Ann harris only | Management homework help



Resources: Ch. 8 and 9 of Management and Case Study, Ch. 8 p. 257: IDEO’s Culture Reinforces Helping Behavior

Prepare a 7- to 10-slide Microsoft® PowerPoint®, Prezi, or Microsoft® Sway® presentation supporting the following scenario relative to the IDEO case description in Ch. 8 of Management.

You have studied the organizational culture in place at IDEO and are making a presentation about this company to your company’s top management team. 

  • Describe the organizational culture at IDEO.
  • Analyze techniques used by IDEO to embed organizational culture.
  • Identify the organizational culture used by your organization/company. Make a recommendation as to whether you think the IDEO culture could be successfully implemented at your company.
  • Recommend mechanisms your company would need to employ should management decide to implement a culture change in line with the IDEO culture.

Include speaker notes for bulk of communication. Slides should contain headlines, graphics, and bullets.

Include an introduction and conclusion slide, as well as a reference slideizational Culture and Design


Major Questions You Should Be Able to Answer

images9.1Strategic Human Resource Management

Major Question: How do effective managers view the role of people in their organization’s success?

images9.2Recruitment & Selection: Putting the Right People into the Right Jobs

Major Question: How can I reduce mistakes in hiring and find great people who might work for me?

images9.3Managing an Effective Workforce: Compensation & Benefits

Major Question: What are the various forms of compensation?

images9.4Orientation, Training, & Development

Major Question: Once people are hired, what’s the best way to see that they do what they’re supposed to do?

images9.5Performance Appraisal

Major Question: How can I assess employees’ performance more accurately and give more effective feedback?

images9.6Managing Promotions, Transfers, Disciplining, & Dismissals

Major Question: What are some guidelines for handling promotions, transfers, disciplining, and dismissals?

images9.7The Legal Requirements of Human Resource Management

Major Question: To avoid exposure to legal liabilities, what areas of the law do I need to be aware of?

images9.8Labor-Management Issues

Major Question: What are the principal processes and issues involved in organizing labor unions?

Page 261the manager’s toolbox

Soft Skills & Social Graces: Boosting Your Advantage in the Hiring World

Didn’t get hired? Maybe you’re lacking in the right soft skills: appearance, manners, punctuality, ability to communicate well—in other words, professional behavior. It’s what employers complain they can’t find in many job applicants, especially among Millennials.1

Dress for Success

If you dress casually on campus, rethink your wardrobe before showing up for a job interview (or a career fair). No sandals or flip-flops, torn jeans, tank tops, short skirts, or revealing dresses. Wear simple earrings (men not at all), cover tattoos, and don’t try to look sexy. Employers are “looking for people who can assume the role of a business professional,” says one recruitment manager.2 For men, this could mean wearing a suit and tie and leather shoes with dress socks. For women, it could be a blazer and a blouse with a skirt or slacks, along with low heels and hosiery. Do the same the first day at work on a new job.3

Going Forward with Fork & Knife

If you’re asked to lunch, be aware that observing applicants’ dining etiquette has become an informal part of the selection process. (To sharpen their competitive advantage, Chinese executives are now trained in Western table manners and social graces before trips abroad.)4 Keep your fingers clean (don’t order greasy sandwiches, pasta, or sushi), so you can deal with any paperwork and shake hands when you leave. Break bread or rolls into bite-size pieces, butter them, and eat them one at a time. Scoop the spoon away from (not toward) you when consuming soup. Don’t chew the ice cubes from your drink. Put your napkin on your chair (not the table) if you have to leave the table in mid-meal. Above all, chew with your mouth closed. And don’t talk until you’ve swallowed your food.5

Avoiding Bad Tech Habits

Sixty percent of U.S. smartphone users in one survey said they couldn’t go an hour without looking at their devices.6 In research involving human resource managers, 76% of respondents said breaches of tech etiquette hurt work life.7 The most annoying smartphone behaviors at work: having loud private conversations (65%), not silencing the phone (59%), checking the phone during conversation (52%), and checking the phone in a meeting (38%).8 We hope you’re not one of those who doesn’t participate in meal conversations (or meetings) because you’re texting or gaming or Facebooking. Or who sets the ringtone at full volume. Or who talks or texts in public restrooms.9

Watching What You Do on Social Media—Today

Having good manners starts even before you meet any company recruiters. If you tweet obscenities, show a lack of spelling skills on Google+, post sexy photos of yourself on Instagram, or talk about alcohol, drugs, or guns on Facebook, you may already have blown a good job opportunity, since human resource departments regularly check applicants out on social media.10

For Discussion Which of the activities described above do you need to work on? How will you go about doing it?


This chapter considers human resource (HR) management—planning for, attracting, developing, and retaining an effective workforce. We consider how this subject fits in with the overall company strategy, how to evaluate current and future employee needs, and how to recruit and select qualified people. We describe orientation, training, and development and how to assess employee performance and give feedback. We discuss how to manage compensation and benefits, promotions and discipline, and workplace performance problems. We go over basic legal requirements. Finally, we consider the role of labor unions.

Page 262images

Strategic Human Resource Management

How do effective managers view the role of people in their organization’s success?


Human resource management consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce. Planning the human resources needed consists of understanding current employee needs and predicting future employee needs.

How do you get hired by one of the companies on Fortune magazine’s annual “100 Best Companies to Work For” list—companies such as Google, SAS Institute, Boston Consulting Group, Edward Jones, and Quicken Loans, which are on the 2014 list?11 You try to get to know someone in the company, you play up volunteer work on your resume, you get ready to interview and interview and interview, and you do extensive research on the company (as by talking to customers).12

And what kinds of things does an employee of a Fortune “Best” company get? At Google, the Mountain View, California, search engine company (ranked number 1 in 2007–2008 and 2012–2014 and number 4 in 2009–2011), you’re entitled to eat in 1 of 11 free gourmet cafeterias, as well as to visit free snack rooms that contain various cereals, candy, nuts, fresh fruit, and other snacks. You can bring your dog to work, get haircuts on-site, work out at the gym, attend subsidized exercise classes, study Mandarin or other languages, have your laundry done free, or consult five on-site doctors for a checkup, free of charge. The company has also launched numerous compensation incentives, special bonuses, and founders’ awards that can run into millions of dollars.13

The reason for this exceptional treatment? “Happy people are more productive,” says former CEO Eric Schmidt.14 That productivity has made Google an earnings powerhouse; in 2013, for example, it reported a 22% growth in revenue and 28% profits.15 Google has discovered, in other words, that its biggest competitive advantage lies in its human resources—its people.

Human Resource Management: Managing an Organization’s Most Important Resource

Human resource (HR) management consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce. Whether it’s McKenzie looking for entry-level business consultants, the U.S. Navy trying to fill its ranks, or churches trying to recruit priests and ministers, all organizations must deal with staffing.

The fact that the old personnel department is now called the human resources department is not just a cosmetic change. It is intended to suggest the importance of staffing to a company’s success. Although talking about people as “resources” might seem to downgrade them to the same level as financial resources and material resources, in fact, people are an organization’s most important resource. Indeed, companies ranked number 1 on Fortune magazine’s Best Companies list in the past—which, besides Google, include software developer SAS (2011 and 2010), data storage company NetApp (2009), biotechnology firm Genentech (2006), supermarket chain Wegmans Food Markets (2005), jam maker J. M. Smucker (2004), stockbroker Edward Jones (2003 and 2002), and box retailer The Container Store (2001 and 2000)—have discovered that putting employees first has been the foundation for their success. “If you’re not thinking all the time about making every person valuable, you don’t have a chance,” says former General Electric head Jack Welch. “What’s the alternative? Wasted minds? Uninvolved people? A labor force that’s angry or bored? That doesn’t make sense!”16

How would you rate the quality of the human resource practices at your current or a past employer? You can find out by taking Self-Assessment 9.1.

Page 263SELF-ASSESSMENT 9.1images

Assessing the Quality of HR Practices

This survey is designed to assess the quality of HR practices at your current place of employment. If you are not currently working, consider a previous job when completing the survey. Go to and take Self-Assessment 9.1. When you’re done, answer the following questions:

1.   How did you rate the quality of the company’s HR practices?

2.   Based on your responses, what advice would you give the senior HR leader about how to improve its HR practices? Be specific. What are the consequences of having poor-quality HR practices? Explain.

Human Resources as Part of Strategic Planning Some companies—those with flat management structures, for instance—have done away with HR departments entirely, letting the regular line managers handle these tasks. But most workers say they feel the absence of an in-house HR staff, especially when it comes to resolving pay problems and mediating employee disputes.17 So what should organizations do in regard to investing in human resources? Based on research findings, we come down on the side that people are an organization’s most important asset and it’s important to invest in human resources. All told, studies show that companies have higher levels of employee satisfaction, financial performance, and service performance when the company has high-quality human resource practices and programs.18 At many companies, human resources has become part of the strategic planning process. Thus, HR departments deal not only with employee paperwork and legal accountability—a very important area, as we describe in Section 9.7—but also with helping to support the organization’s overall strategy.

Example: Is it important, as Wegmans’s owners think, to have loyal, innovative, smart, passionate employees who will give their best to promote customer satisfaction (the grocery chain’s mission)? Who, then, should be recruited? How should they be trained? What’s the best way to evaluate and reward their performance? The answers to these questions should be consistent with the firm’s strategic mission.

The purpose of the strategic human resource process, then—shown in the yellow-orange shaded boxes at right—is to get the optimal work performance that will help the company’s mission and goals.19 (See Figure 9.1.)

Three concepts important in this view of human resource management are human capital, knowledge workers, and social capital.

FIGURE 9.1 The strategic human resource management process


Human Capital: Potential of Employee Knowledge & Actions “We are living in a time,” says one team of human resource management authors, “when a new economic paradigm—characterized by speed, innovation, short cycle times, quality, and customer satisfaction—is highlighting the importance of intangible assets, such as brand recognition, knowledge, innovation, and particularly human capital.”20 Human capital is the economic or productive potential of employee knowledge, experience, and actions.21

Thinking about people as human capital has an obvious basis: “Attracting, retaining, and developing great people is sometimes the only way our organizations can keep up with the competition across the street or around the globe,” says Susan Meisinger, president and CEO of the Society for Human Resource Management. “Research has shown that highly educated, knowledgeable workers—the most in demand—are the hardest to find and easiest to lose.”22

Knowledge Workers: Potential of Brain Workers A knowledge worker is someone whose occupation is principally concerned with generating or interpreting information, as opposed to manual labor. Knowledge workers add value to the organization Page 264by using their brains rather than their muscle and sweat, and as such they are the most common type of worker in 21st-century organizations. Because of globalization and information technology, the United States no longer has an advantage in knowledge workers. Indeed, because of the advancement of China, India, Russia, and Brazil; the offshoring of sophisticated jobs; the decrease in math and science skills among today’s younger Americans; and other factors, the United States may be in danger of slipping behind.23

Social Capital: Potential of Strong & Cooperative Relationships Social capital is the economic or productive potential of strong, trusting, and cooperative relationships. Among aspects of social capital are goodwill, mutual respect, cooperation, trust, and teamwork. Relationships within a company are important: In one survey, 77% of the women and 63% of the men rated “good relationship with boss” extremely important, outranking such matters as good equipment, easy commute, and flexible hours.24

That relationships matter is shown by the brothers running family-owned J. M. Smucker, who follow a simple code of conduct set forth by their father: “Listen with your full attention, look for the good in others, have a sense of humor, and say thank you for a job well done.”25 (The company’s voluntary employee turnover rate is a mere 5.5%.)

Planning the Human Resources Needed

When a building contractor, looking to hire someone for a few hours to dig ditches, drives by a group of idle day laborers standing on a street corner, is that a form of HR planning? Certainly it shows the contractor’s awareness that a pool of laborers usually can be found in that spot. But what if the builder needs a lot of people with specialized training—to give him or her the competitive advantage that the strategic planning process demands?

Here we are concerned with something more than simply hiring people on an “as needed” basis. Strategic human resource planning consists of developing a systematic, comprehensive strategy for (a) understanding current employee needs and (b) predicting future employee needs. Let’s consider these two parts.

Understanding Current Employee Needs To plan for the future, you must understand the present—what today’s staffing picture looks like. This requires that you (or a trained specialist) first do a job analysisand from that write a job description and a job specification.26

images   Job analysis. The purpose of job analysis is to determine, by observation and analysis, the basic elements of a job. Specialists who do this interview job occupants about what they do, observe the flow of work, and learn how results are accomplished. For example, FedEx has specialists who ride with the couriers and time how long it takes to deliver a load of packages and note what problems are encountered (traffic jams, vicious dogs, recipients not home, and so on).

imagesJob description and job specification. Once the fundamentals of a job are understood, then you can write a job description, which summarizes what the holder of the job does and how and why he or she does it. Next you can write a job specification, which describes the minimum qualifications a person must have to perform the job successfully.

This process can produce some surprises. Jobs that might seem to require a college degree, for example, might not after all. Thus, the process of writing job analyses, Page 265descriptions, and specifications can help you avoid hiring people who are overqualified (and presumably more expensive) or under-qualified (and thus not as productive) for a particular job.

In addition, by entering a job description and specification with their attendant characteristics into a database, an organization can do computer searching for candidates by matching keywords (nouns) on their resumes with the keywords describing the job. A position in desktop publishing, for instance, might be described by the kinds of software programs with which applicants should be familiar: Adobe PageMaker, Adobe InDesign, QuarkXPress, Adobe FrameMaker, and Corel Ventura.


What kind of job is this? A FedEx driver’s problems of driving in a big city—traffic, double parking, addressees not at home—are different from those of driving in rural areas, where there may be long stretches of boredom. Specialists in job analysis can interview drivers about their problems in order to write job descriptions that allow for varying circumstances.

Predicting Future Employee Needs Job descriptions change, of course: Auto mechanics, for instance, now have to know how computer chips work in cars. (Current 7-Series BMWs and S-class Mercedes have about 100 processors apiece.) And new jobs are created: Who could have visualized the position of “e-commerce accountant” 10 years ago, for example?

As you might expect, predicting future employee needs means you have to become knowledgeable about the staffing the organization might need and the likely sources for that staffing:

imagesThe staffing the organization might need. You could assume your organization won’t change much. In that case, you can fairly easily predict that jobs will periodically become unoccupied (because of retirement, resignations, and so on) and that you’ll need to pay the same salaries and meet the same criteria about minority hiring to fill them.

Better, however, to assume the organization will change. Thus, you need to understand the organization’s vision and strategic plan so that the proper people can be hired to meet the future strategies and work. We discussed strategic plans in Chapter 6.

imagesThe likely sources for staffing. You can recruit employees from either inside or outside the organization. In looking at those inside, you need to consider which employees are motivated, trainable, and promotable and what kind of training your organization might have to do. A device for organizing this kind of information is a human resource inventory, a report listing your organization’s employees by name, education, training, languages, and other important information.

In looking outside, you need to consider the availability of talent in your industry’s and geographical area’s labor pool, the training of people graduating from various schools, and such factors as what kind of people are moving into your area. The U.S. Bureau of Labor Statistics and the U.S. Census Bureau issue reports on such matters. images


One way to attract potential employees. One of the first places companies are apt to look for potential employees is online, such as the social networking sites Facebook, LinkedIn, and Glassdoor, as well as Twitter (although sometimes searches can lead to discrimination against some candidates). Creative users also post unusual digital resumes featuring eye-catching graphics, YouTube videos, and PowerPoint slides on Pinterest, the popular online pin board for photos. As for job seekers, they can find useful job-hunting apps on Are you up to speed on these job-hunting advantages?

Page 266images

Recruitment & Selection: Putting the Right People into the Right Jobs

How can I reduce mistakes in hiring and find great people who might work for me?


Qualified applicants for jobs may be recruited from inside or outside the organization. The task of choosing the best person is enhanced by such tools as reviewing candidates’ application forms, resumes, and references; doing interviews, either structured or unstructured; and screening with ability, personality, performance, and other kinds of employment tests.

“Hiring great people is brutally hard,” write Jack (former General Electric CEO) and Suzy Welch. “New managers are lucky to get it right half the time. And even executives with decades of experience will tell you that they make the right calls 75% of the time at best.”27

However difficult it may be, it’s important to try to get hiring right. “We’re essentially in an innovation economy where good people come up with really good ideas,” says one CEO. “Companies want to hit home runs with the next greatest product, and the imperative is making sure you have great people to do that.”28

Recruitment: How to Attract Qualified Applicants

At some time nearly every organization has to think about how to find the right kind of people. Recruiting is the process of locating and attracting qualified applicants for jobs open in the organization. The word qualified is important: You want to find people whose skills, abilities, and characteristics are best suited to your organization. Recruiting is of two types: internal and external.

1. Internal Recruiting: Hiring from the Inside Internal recruiting means making people already employed by the organization aware of job openings. Indeed, most vacant positions in organizations are filled through internal recruitment, mainly through job posting, placing information about job vacancies and qualifications on bulletin boards, in newsletters, and on the organization’s intranet. (Companies looking to make strategic changes do better hiring CEOs from within the ranks rather than from outside, according to a recent study.29)

2. External Recruiting: Hiring from the Outside External recruiting means attracting job applicants from outside the organization. In years past, notices of job vacancies were placed through newspapers, employment agencies, executive recruiting firms, union hiring halls, college job-placement offices, and word of mouth. Today more and more companies are using social media to recruit.30 For example, experts estimate that 89% of U.S. organizations use social networks to recruit. LinkedIn, a social network with more than 259 million members in over 200 countries, accounts for 94% of the people hired via social media, followed by Facebook and Twitter.31 In one survey of 3,500 U.S. college students, 80% said they use smartphones for job hunting or see themselves doing so in the future.32

Both methods have advantages and disadvantages. (See Table 9.1, next page.)

Which External Recruiting Methods Work Best? In general, the most effective sources are employee referrals, say human resource professionals, because, to protect their own reputations, employees are fairly careful about whom they recommend, and they know the qualifications of both the job and the prospective employee.33 Other effective ways of finding good job candidates are e-recruitment tools, such as “dot-jobs” websites; membership directories for associations and trade groups; social networking sites; and industry-specific blogs, forums, and newsgroups.34 Netflix makes a point of “hiring, rewarding, and tolerating only fully formed adults”—people who will put the company’s interests first.35

Page 267TABLE 9.1 Internal & External Recruiting: Advantages & Disadvantages


How do you feel about the job you are in now, if you have one, or the last job you had? Do you feel like you are a “good fit” for the job? That is, do you like the work and does the work match your skills? Research shows that we are happier and more productive when our needs and skills fit the job requirements. If you would like to see whether or not you fit with your current (or last) job, complete Self-Assessment 9.2. You may find the results very interesting.


Assessing Your Person-Job Fit

This survey is designed to assess your job fit. If you are not currently working, consider a previous job when completing the survey. Go to and take Self-Assessment 9.2. When you’re done, answer the following questions:

1.   What is your level of fit?

2.   Whether you have high or low fit, what are the main causes for your level of fit? Explain.

3.   What questions might you ask a future recruiter to ensure a higher level of person-job fit? Be specific.

Realistic Job Previews A realistic job preview (RJP) gives a candidate a picture of both positive and negative features of the job and the organization before he or she is hired. This recruiting technique is very effective at reducing turnover within 30–90 days of employment. Many organizations, such as AT&T, Hilton, the Idaho State Police, and Assess Systems, reduced turnover and enhanced employee satisfaction by using RJPs.

Page 268Selection: How to Choose the Best Person for the Job

Whether the recruitment process turns up a handful of job applicants or thousands, now you turn to the selection process, the screening of job applicants to hire the best candidate. Essentially this becomes an exercise in prediction: How well will the candidate perform the job and how long will he or she stay?

Three types of selection tools are background information, interviewing, and employment tests.

1. Background Information: Application Forms, Resumes, & Reference Checks Application forms and resumes provide basic background information about job applicants, such as citizenship, education, work history, and certifications.

Unfortunately, a lot of resume information consists of mild puffery and even outrageous fairy tales—as many as 35% of resumes, by one estimate.36 InfoLink Screening Services, which does background checks, reported that 14% of the tens of thousands of applicants it had screened had lied about their education.37 Vermont-based, a resume-writing service, surveyed 1,133 resumes that had been uploaded to its site and found that nearly 42.7% had at least one inaccuracy and 12.6% had two or more factual errors.38 And Background Information Services, a preemployment screening company in Cleveland, found 56% of resumes contained falsehoods of some kind.39 It is risky to lie about your background information because it can be used as a reason for terminating your employment.



Would You Lie Like This on Your Resume?

What kind of lies do people put on their resumes? Consider the following examples.

Lying about Education. Lying about education is the most prevalent distortion (such as pretending to hold a degree or an advanced degree). A few years ago, RadioShack CEO David Edmondson achieved some notoriety and had to resign after a newspaper discovered he had falsely claimed on his resume to hold degrees in psychology and theology.40 In 2012, Yahoo CEO Scott Thompson was revealed to not have earned a college degree in computer science, as claimed on his resume and on the company’s website.41 Automatic Data Processing of Roseland, New Jersey, which has studied employee background verification, reported that 41% of education records showed a difference between the information provided by an applicant and that provided by the educational institution.42

Lying about Employment Histories, Ages, Salaries, & Job Titles. Another common fabrication includes creative attempts to cover gaps in employment history (although there are straightforward ways an applicant can deal with this, such as highlighting length of service instead of employment dates).43 People also lie about their ages for fear of seeming to be too experienced (hence expensive) or too old.44 As you might expect, people also embellish their salary histories, job titles, and achievements on projects.

Lying about Criminal Background or Immigration Status. In 2007, it came out that the foundation that runs online encyclopedia Wikipedia had neglected to do a basic background check before hiring Carolyn Doran as its chief operating officer; she had been convicted of drunken driving and fleeing the scene of a car accident.45 Now, more and more job seekers are seeking to legally clear their criminal records—to have their arrests or convictions expunged, when possible.46

In addition, as the number of illegal (undocumented) workers has risen, it has become incumbent on human resource officers to verify U.S. citizenship.47 Use of E-Verify, the federal program that allows employers to quickly check the legal status of potential employees, has taken a big jump.48 Still, perhaps half of illegal workers slip by the system.49


What past events are you most worried potential employers will find out about you? What can you do to put them in a better light?

Many companies are finding conventional resumes not all that useful (because they don’t quantify an applicant’s accomplishments or are too full of fluff descriptors such as “outstanding” or “energetic”) and are increasingly relying on social networks such as LinkedIn, Page 269video profiles, or online quizzes to assess candidates.50 Other firms are so inundated with resumes that they now have to use resume-filtering software, causing applicants to learn to game the system by loading their resumes with keywords from the job description.51 Some applicants try “stunt resumes,” such as those delivered by a stuffed carrier pigeon.52

References are also a problem. Many employers don’t give honest assessments of former employees, for two reasons: (1) They fear that if they say anything negative, they can be sued by the former employee. (2) They fear if they say anything positive, and the job candidate doesn’t pan out, they can be sued by the new employer.53 Despite liability worries, HR recruiters know that if they get a former supervisor on the phone, they can find out a lot—such as the way he or she answers the question, “Can you enthusiastically recommend this person?” or “What were this person’s strengths and weaknesses?”54

Many employers also like to check applicants’ credit references, although there is no evidence that people with weak credit scores are apt to be unqualified or dishonest employees.55 (Note: Prospective employers need to get written consent to run credit checks on job applicants.56)



Applying for a Job? Here Are Some Mistakes to Avoid

There are several mistakes that job candidates often make in initial interviews. Here are some tips.57

Be Prepared—Very Prepared. Can you pronounce the name of the company with whom you’re interviewing? Of the person or people interviewing you? Do you understand the company and the position you’re interviewing for? Do you know the company’s competition? What new products or services are being offered? How about your own job strengths? Your weaknesses? What do you need to improve on to move ahead?

Go online and read the company’s website. Search for any news articles written about the firm. Call the company and ask about pronunciation. Determine how your strengths fit directly into the context of what the prospective employer does. Also, when asked about your weaknesses, state how you recognized a weakness, overcame a dilemma, and were improved by it. Take time to practice questions and answers so you’ll sound confident.58

Dress Right & Pay Attention to Your Attitude. Is the company dress code “business casual”? That doesn’t mean you should dress that way (or the way you dress on campus) for the interview.

Dress professionally for the interview. Be aware of your attitude as soon as you enter the building. Be on time. (Time your commute by doing a test run a day or so before the interview, and make sure you know the exact location of the interview.) If unforeseeable circumstances arise and cause you to be late, call to inform your interviewer. Be polite to the receptionist, and greet everyone who greets you. Turn off your cell phone ringer.

Don’t Get Too Personal with the Interviewer. Don’t be over-friendly and share too much, especially in the initial interview. Although the interviewer will try to make you feel comfortable, you should focus on the position. Rehearse questions to ask the interviewer, such as the challenges for the position in the future. Don’t make negative comments about your old company or boss. Rather, figure out the positives and convey what you learned and gained from your experience. If asked an inappropriate question (about age, marital status, whether you have children or plan to), politely state you don’t believe the question is relevant to your qualifications. Be enthusiastic; enthusiasm is contagious. Incidentally, be sure to mention any organizational citizenship behavior, which scores well with interviewers.59 After the interview, within 24 hours, send an e-mail thanking the interviewer. If you think you messed up part of the interview, use the e-mail to smooth over your mistakes.60

Be Aware That Your Background Will Be Checked—Including Your Social Networks. Because it seems to be getting harder to distinguish honest job applicants from dishonest ones, companies now routinely check resumes or hire companies that do so.61 Ninety-six percent of employers conduct background checks, according to one study.62 Some may even ask for your SAT scores.63 Some have been known to scrutinize checking accounts.64

As mentioned earlier, if you are a Facebook, YouTube, or Twitter user, be aware that employers now frequently use search engines to do continuous and stealthy background checks on prospective employees to see if they’ve posted any racy content. “Many job hunters,” says one report, “are . . . continuing to overlook the dangers of posting provocative photos and other dubious content on social-media sites.”65 Checking your Facebook page is also a way employers can make an end run around discrimination laws.66 Indeed, you may be asked in the interview for your Facebook user name and password so the interviewer can access your private settings—a practice whose legality is questionable but nevertheless being done by more companies.67 (More and more people are getting savvy about privacy and pruning their friend lists and removing unwanted comments on their social networks.68)


What kind of advice do you see here that you wished you’d followed in the past?

Page 2702. Interviewing: Unstructured, Situational, & Behavioral-Description The interview, which is the most commonly used employee-selection technique, may take place face to face, by videoconference, or—as is increasingly the case—via the Internet. (In-depth phone interviews of an hour or more may be on the rise, perhaps for cost reasons.69 However, face-to-face interviews have been perceived as being more fair and leading to higher job acceptance intentions than videoconferencing and telephone interviews.70) To help eliminate bias, interviews can be designed, conducted, and evaluated by a committee of three or more people. The most commonly used employee-selection technique, interviewing, takes three forms: unstructured interviews and two types of structured interviews.71

Unstructured Interview Like an ordinary conversation, an unstructured interview involves asking probing questions to find out what the applicant is like. There is no fixed set of questions asked of all applicants and no systematic scoring procedure. As a result, the unstructured interview has been criticized as being overly subjective and apt to be influenced by the biases of the interviewer. Equally important, it is susceptible to legal attack because some questions may infringe on non-job-related matters such as privacy, diversity, or disability.72 However, compared with the structured interview method, the unstructured interview has been found to provide a more accurate assessment of an applicant’s job-related personality traits.73

Structured Interview Type 1: The Situational Interview The structured interview involves asking each applicant the same questions and comparing their responses to a standardized set of answers.

In one type of structured interview, the situational interview, the interviewer focuses on hypothetical situations. Example: “What would you do if you saw two of your people arguing loudly in the work area?” The idea here is to find out if the applicant can handle difficult situations that may arise on the job.

Structured Interview Type 2: The Behavioral-Description Interview In the second type of structured interview, the behavioral-description interview, the interviewer explores what applicants have actually done in the past. Example: “What was the best idea you ever sold to a supervisor, teacher, peer, or subordinate?” This question (asked by the U.S. Army of college students applying for its officer training program) is designed to assess the applicant’s ability to influence others.



The Right Way to Conduct an Interview

Because hiring people who later have to be let go is such an expensive proposition, companies are now putting a great deal of emphasis on effective interviewing. Although this is a subject worth exploring further, following are some minimal suggestions for you as a manager.74

Before the Interview: Define Your Needs & Review Applicant’s Resume

Write out what skills, traits, and qualities the job requires. “Looking to hire somebody is like going to the supermarket,” says one HR manager. “You need to have a list and know what you need.”75

Look at the applicant’s resume or application form to determine relevant experience, gaps, and discrepancies.

Write Out Interview Questions

You should ask each candidate the same set of questions, so that you can compare their answers. (This helps keep you out of legal trouble, too.) In general, the questions should be designed to elicit the following types of information.

•   Does the applicant have the knowledge to do the job? Examples: “Give an example where you came up with a creative solution.” “How would you distinguish our product from competitors’?”

•   Can the applicant handle difficult situations? Examples: “Tell me about a time when you dealt with an irate customer. How did you handle the situation and what was the outcome?”

Page 271•   Is the applicant willing to cope with the job’s demands? Examples: “How do you feel about making unpopular decisions?” “Are you willing to travel 30% of the time?”

•   Will the applicant fit in with the organization’s culture? Examples: “How would your last supervisor describe you?” “How much leeway did they give you in your previous job in charging travel expenses?”

Follow a Three-Scene Interview Scenario

The interview itself may follow a three-scene script.

•   Scene 1: The first three minutes—small talk and “compatibility” test. The first scene is really a “compatibility test.” It takes about three minutes and consists of exchanging small talk, giving you a chance to establish rapport and judge how well the candidate makes a first impression.
    Note: As many as four out of five hiring decisions are made within the first 10 minutes of an interview, according to some research. Thus, be aware that if you are immediately impressed with a candidate, you may spend more time talking than listening—perhaps trying to sell the candidate on the job rather than screen his or her qualifications.76

•   Scene 2: The next 15–60 minutes—asking questions and listening to the applicant’s “story.” In the next scene, you ask the questions you wrote out (and answer those the candidate directs to you). Allow the interviewee to do 70%–80% of the talking.
    Take notes to remember important points. Don’t ignore your “gut feelings.” Intuition plays a role in hiring decisions. (But be careful you don’t react to people as stereotypes.)

•   Scene 3: The final two minutes—closing the interview and setting up the next steps. In the final minutes, you listen to see whether the candidate expresses interest in taking the job.

After the Interview

Write a short report making some sort of quantitative score of the candidate’s qualifications. Indicate your reasons for your decision.

Check the applicant’s references before inviting him or her to a second interview.


What additional questions would you like to ask a job applicant so as to get the best candidate?

3. Employment Tests: Ability, Personality, Performance, Integrity, & Others It used to be that employment selection tests consisted of paper-and-pencil, performance, and physical-ability tests. Now, however, employment tests are legally considered to consist of any procedure used in the employment selection decision process, even application forms, interviews, and educational requirements.77Indeed, today applicants should expect just about anything, such as spending hours on simulated work tasks, performing role-playing exercises, or tackling a business case study.78

Probably the most common employment tests are the following.

Ability Tests Ability tests measure physical abilities, strength and stamina, mechanical ability, mental abilities, and clerical abilities. Telephone operators, for instance, need to be tested for hearing, and assembly-line workers for manual dexterity. Intelligence tests are also catching on as ways to predict future executive performance.79 The military tests for physical qualifications, along with behavioral and educational abilities (71% of 17- to 24-year-olds don’t qualify for military service, a surprisingly high figure).80 Corporate-event company Windy City Fieldhouse uses a test that measures attention to detail, asking takers to do such things as “do a count of the letter ‘l’ in a three-sentence paragraph to measure how carefully a respondent works,” according to one account.81

Performance Tests Performance tests or skills tests measure performance on actual job tasks—so-called job tryouts—as when computer programmers take a test on a particular programming language such as C++ or middle managers work on a small project.82 Some companies have an assessment center, in which management candidates participate in activities for a few days while being assessed by evaluators.83

Page 272Personality Tests Personality tests measure such personality traits as adjustment, energy, sociability, independence, and need for achievement. Career-assessment tests that help workers identify suitable jobs tend to be of this type.84 One of the most famous personality tests, in existence for 65-plus years, is the 93-question Myers-Briggs Type Indicator, with about 2.5 million tests given each year throughout the world. Myers-Briggs endures, observers say, “because it does a good job of pointing up differences between people, offers individuals a revealing glimpse of themselves, and is a valuable asset in team-building, improving communication, and resolving personality-conflict.”85 However, this and other personality tests need to be interpreted with caution because of the difficulty of measuring personality characteristics and of making a legal defense if the results are challenged.86



Personality Tests: How a Sporting-Goods Chain Screens Job Applicants Online

More than 80% of midsize and large companies use personality and ability assessments for entry and mid-level jobs these days, according to one executive at a global human resources consulting firm.87

Southwest Airlines, for instance, has found the Myers-Briggs test helps build trust in developing teams.88 Hewlett-Packard uses a personality test to see if employees are temperamentally suited to working alone at home—that is, telecommuting—and can handle limited supervision.89 At Children’s Healthcare of Atlanta, personality tests are used to find employees who will be “nice people”—those with “the qualities of being nurturing, kind, and warm-hearted,” in the words of a human resources vice president.90

Online Personality Tests. At Finish Line, a nationwide chain of sporting-goods stores, store managers use the results of web-based personality tests developed by Unicru, of Beaverton, Oregon, to screen applicants for jobs as retail sales clerks. Candidates may apply through Unicru’s kiosks or computer phones, which are installed in the stores. One Finish Line store in Chicago screens as many as 70 applicants a week during the store’s pre-holiday season.

Unicru’s computer scores test takers according to how strongly they agree or disagree (on a four-point scale) with statements such as “You do not fake being polite” and “You love to listen to people talk about themselves.” High scores on attributes such as sociability and initiative reward applicants with a “green” rating that allows them to move on to an interview with a human manager. Scores in the middle earn a “yellow,” and a lesser chance of landing a job; low-scoring “reds” are not considered.

Measurable Results. “The kinds of people who do well,” says Unicru psychologist David Scarborough, “obviously have to have good self-control. They have to be patient. They have to enjoy helping people. All those characteristics are quite measurable.”91 Finish Line says that Unicru’s system has reduced turnover by 24%.


There are, by some estimates, around 2,500 cognitive and personality employment tests on the market, and it’s important that employers match the right test for the right purpose.92 Moreover, tests aren’t supposed to have a disparate impact on a protected class of people, such as certain racial or ethnic groups.93 What questions would you want to ask about a personality test before you submitted yourself to it? (Note: Don’t try to psych the test. You might wind up being miserable in a job that doesn’t suit you.)

Integrity Tests Integrity tests assess attitudes and experiences related to a person’s honesty, dependability, trustworthiness, reliability, and prosocial behavior.94 The tests are designed to identify people likely to engage in inappropriate, antisocial, or dishonest workplace behavior. Typically, integrity tests ask direct questions about past experiences related to ethics and integrity. You might be asked, for example, “What is the most you have ever stolen? (a) $0; (b) $1–$200; (c) $201– $500; (d) more than $500.” Or interviewers may ask questions about preferences and interests from which inferences may be drawn about future behavior—so-called covert tests, where the answers give a sense of the person’s conscientiousness, emotional maturity, and so on.95

Page 273Other Tests The list of employment testing techniques has grown to include—in appropriate cases—drug testing, polygraph (lie detectors), genetic screening, and even (a questionable technique) handwriting analysis.96 Human resource professionals need to be aware, incidentally, that there are a variety of products available on the Internet to help employees beat many kinds of drug tests.97Recently, however, the hair test (of hair follicles) has begun to find favor, since it’s said to be able to detect a pattern of repetitive drug use over a period of up to 90 days.98

Reliability & Validity: Are the Tests Worth It? With any kind of test, an important legal consideration is the test’s reliability—the degree to which a test measures the same thing consistently—so that an individual’s score remains about the same over time, assuming the characteristics being measured also remain the same.

Another legal consideration is the test’s validity—the test measures what it purports to measure and is free of bias. If a test is supposed to predict performance, then the individual’s actual performance should reflect his or her score on the test. Using an invalid test to hire people can lead to poor selection decisions. It can also create legal problems if the test is ever challenged in a court of law. images


Lie detector? Defense contractors and other security-minded companies are apt to require polygraph testing for job applicants. Calling the machine a “lie detector” may make us think it can detect lies, but all it does is measure nervous excitement—which can happen to both liars and truth tellers. This is one reason polygraph tests are inadmissible in court. Would you object to taking such a test?

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Managing an Effective Workforce: Compensation & Benefits

What are the various forms of compensation?


Managers must manage for compensation—which includes wages or salaries, incentives, and benefits.

Do we work only for a paycheck? Many people do, of course. But money is only one form of compensation.

Compensation has three parts: (1) wages or salaries, (2) incentives, and (3) benefits. In different organizations one part may take on more importance than another. For instance, in some nonprofit organizations (education, government), salaries may not be large, but health and retirement benefits may outweigh that fact. In a high-technology start-up, the salary and benefits may actually be somewhat humble, but the promise of a large payoff in incentives, such as stock options or bonuses, may be quite attractive. Let’s consider these three parts briefly. (We expand on them in Chapter 12 when we discuss ways to motivate employees.)

Wages or Salaries

Base pay consists of the basic wage or salary paid employees in exchange for doing their jobs. The basic compensation is determined by all kinds of economic factors: the prevailing pay levels in a particular industry and location, what competitors are paying, whether the jobs are unionized, if the jobs are hazardous, what the individual’s level is in the organization, and how much experience he or she has.


To induce employees to be more productive or to attract and retain top performers, many organizations offer incentives, such as commissions, bonuses, profit-sharing plans, and stock options. We discuss these in detail in Chapter 12.


Stock options. Companies like to offer favored employees stock options rather than higher salaries as benefits. Not only do employees place a high value on options, but companies can issue as many as they want without hurting corporate profits because, under present accounting rules, they don’t have to count the options’ value as an expense. However, some critics believe that making stock options a big part of CEO compensation does not spur better performance. When the stock is up, the CEO benefits. When the stock is down, he or she doesn’t really lose money but rather just makes less money.

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Why Rewards May Fail to Motivate

There are many incentive compensation plans, ranging from cash awards and gifts to profit sharing and stock ownership, as we discuss in detail in Chapter 12. Why, despite the huge investments of time and money, do they often not achieve the results? Here are eight possible reasons:99

•   “I don’t work just for the money.” Sometimes there is too much emphasis on monetary rewards.

•   “They don’t care what I do.” There may be the absence of an “appreciation effect.”

•   “It’s no more than what I deserve.” The benefits may be extensive, but employees feel they are entitled to them just as part of the job.

•   “Let’s see how little work we can get away with.” The rewards may have the unintended consequence of producing nonproductive, even counterproductive, work behavior. (Example: Albuquerque, New Mexico, city officials decided to pay trash truck crews for eight hours regardless of time spent, so as to encourage quick completion of the work and lower overtime costs. However, the policy only led crews to work fast and cut corners, missing pickups, speeding and causing accidents, and generating extra dump fees for overloading vehicles.100)

•   “Why bother, it takes forever to get paid.” There is too long a delay between performance and rewards.

•   “Another $25 gift card? Who needs it?” There are too many one-size-fits-all rewards.

•   “A half day off on Friday—so what.” Managers use one-shot rewards with a short-lived motivational impact.

•   “There they go again. . .” Management continues to use demotivating practices such as layoffs, across-the-board pay cuts, and giving executives but not workers excessive compensation.

Five keys to a successful incentive-pay plan are the following:101

1.  Simplicity. Does the plan pass the simplicity test? Can you explain it on an elevator ride?

2.  Clear goals. Are the goals clear? Are the goals fully supported by management?

3.  Realistic goals. Are the goals realistic—that is, neither too difficult nor too easy to achieve?

4.  Consistency with present goals. Is the plan in line with the organization’s present goals? Company goals change. Few organizations have the same business objective for more than five to seven years.

5.  Regular communication. Do managers regularly communicate with employees about the plan? People want a scorecard.


Benefits, or fringe benefits, are additional nonmonetary forms of compensation designed to enrich the lives of all employees in the organization, which are paid all or in part by the organization. We discuss benefits in more detail in Chapter 12, but examples are many: health insurance, dental insurance, life insurance, disability protection, retirement plans, holidays off, accumulated sick days and vacation days, recreation options, country club or health club memberships, family leave, discounts on company merchandise, counseling, credit unions, legal advice, and education reimbursement. For top executives, there may be “golden parachutes,” generous severance pay for those who might be let go in the event the company is taken over by another company.

Benefits are no small part of an organization’s costs. In March 2014, private industry spent an average of $31.93 per hour worked in employment compensation, of which wages and salaries accounted for 69.9% and benefits for the remaining 30.1%.102 images


Communication is everything. The questions human resource managers need to keep in mind are: What good does it do a company to have attractive incentive plans if employees don’t understand them? Will an employee exert the extra effort in pursuit of rewards if he or she doesn’t know what the rewards are?

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Orientation, Training, & Development

Once people are hired, what’s the best way to see that they do what they’re supposed to do?


Three ways newcomers are helped to perform their jobs are through orientation, to fit them into the job and organization; training, to upgrade the skills of technical and operational employees; and development, to upgrade the skills of professionals and managers.

In muckraker Upton Sinclair’s 1906 novel The Jungle, “employers barely paused when a worker swooned from overwork or fell into a rendering tank,” writes columnist Sue Shellenbarger. “They just got another warm body to replace him.”103

That’s hardly the case anymore. Today when a hire is made, companies often resort to what is known as “onboarding,” rolling out a welcome by assigning “buddies,” providing detailed orientations, even sending goody baskets, so as to bring rookies up to speed quickly and give them a fast introduction to company culture.104

This is because, as we said, the emphasis is on “human capital.” Only a third to half of most companies’ stock-market value is accounted for by hard assets such as property, plant, and equipment, according to a Brookings Institution report. Most of a firm’s value is in such attributes as patents, processes, and—important to this discussion—employee or customer satisfaction.105 The means for helping employees perform their jobs are orientation, training, and development.


Group training. In large companies, orientation and ongoing training are often conducted in group sessions led by a presenter while the employees follow along. Do you see any problems with this approach?

Page 277Orientation: Helping Newcomers Learn the Ropes

The finalist candidate is offered the job, has accepted it, and has started work. Now he or she must begin, in that old sailor’s phrase, to “learn the ropes.” This is the start of orientation, helping the newcomer fit smoothly into the job and the organization.

Helping New Employees Get Comfortable: The First Six Months “How well will I get along with other employees?” “What if I screw up on a project?” Coming into a new job can produce a lot of uncertainty and anxiety. In part this is because, depending on the job, a new hire can accomplish only 60% as much in the first three months as an experienced worker, according to MCI Communications.106

The first six months on a job can be critical to how one performs over the long haul, because that’s when the psychological patterns are established. Thus, employers have discovered that it’s far better to give newcomers a helping hand than to let them learn possibly inappropriate behavior that will be hard to undo later.107

The Desirable Characteristics of Orientation Like orientation week for new college students, the initial socialization period is designed to give new employees the information they need to be effective. In a large organization, orientation may be a formal, established process. In a small organization, it may be so informal that employees find themselves having to make most of the effort themselves.

Following orientation, the employee should emerge with information about three matters (much of which he or she may have acquired during the job-application process):

imagesThe job routine. At minimum, the new employee needs to have learned what is required in the job for which he or she was hired, how the work will be evaluated, and who the immediate coworkers and managers are. This is basic.

imagesThe organization’s mission and operations. Certainly all managers need to know what the organization is about—its purpose, products or services, operations, and history. And it’s now understood that low-level employees perform better if they, too, have this knowledge.

imagesThe organization’s work rules and employee benefits. A public utility’s HR department may have a brochure explaining formalized work rules, overtime requirements, grievance procedures, and elaborate employee benefits. A technology start-up may be so fluid that many of these matters will have not been established yet. Even so, there are matters of law (such as those pertaining to sexual harassment) affecting work operations that every employee should be made aware of.

Training & Development: Helping People Perform Better

How does employee engagement pay off financially? According to one global study, companies with low traditional engagement had an average operating margin (profit) of just under 10%, those with high traditional engagement just over 14%, and those with high sustainable engagement over 27%—three times higher. One important key to high engagement is workforce planning—ensuring there is a match Page 278between the required work and employees’ skills and experience.108 Of course, in hiring, you always try to get people whose qualifications match the requirements of the job. Quite often, however, there are gaps in what new employees need to know. These gaps are filled by training. The training process involves five steps, as shown below. (See Figure 9.2.)

FIGURE 9.2 Five steps in the training process


HR professionals distinguish between training and development.

imagesTraining—upgrading skills of technical and operational employees. Electronics technicians, data processors, computer network administrators, and X-ray technicians, among many others, need to be schooled in new knowledge as the requirements of their fields change. Training, then, refers to educating technical and operational employees in how to better do their current jobs.

imagesDevelopment—upgrading skills of professionals and managers. Accountants, nurses, lawyers, and managers of all levels need to be continually educated in how to do their jobs better not just today but also tomorrow. Development refers to educating professionals and managers in the skills they need to do their jobs in the future.

Typical areas for which employee training and development are given are customer service, safety, leadership, computer skills, quality initiatives, communications, human relations, ethics, diversity, and sexual harassment.109

The Different Types of Training or Development There are all kinds of training and development methods, and their effectiveness depends on whether what is being taught are facts or skills. If people are to learn facts—such as work rules or legal matters—lectures, videotapes, and workbooks are effective. If people are to learn skills—such as improving interpersonal relations or using new tools—then techniques such as discussion, role-playing, and practice work better.

Another way to categorize training methods is to distinguish on-the-job from offthe-job methods.

imagesOn-the-job training. This training takes place in the work setting while employees are performing job-related tasks. Four major training methods are coaching, training positions, job rotation, and planned work activities.

imagesOff-the-job training. This training consists of classroom programs, videotapes, workbooks, and the like. Lots of off-the-job training consists of computer-assisted instruction (CAI), in which computers are used to provide additional help or to reduce instructional time.

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Off-the-Job Training: Getting Ahead through E-Learning

College students, of course, have already discovered e-learning (electronic learning). Several million other people are also taking short-term, practical courses related to their careers, mostly at business schools and continuing-education institutions around the country.

The Surge in Virtual Learning. Outside of education, in other U.S. organizations, e-learning has also become a well-established fact. Although instructor-led classrooms are still the dominant training method, at 44% of total student hours, online self-study e-learning and virtual classrooms make up about 29%.110 The benefits of e-learning, of course, are that no transportation is needed and you can follow a flexible schedule and often work at your own pace.

However, there are some drawbacks. “The one thing e-learning boosters don’t want to talk about is the simple fact that very few people ever actually finish an e-learning course when it involves a technically complex or lengthy subject such as software training or programming,” says corporate trainer Roland Van Liew. “People perform the complex process of assimilating information best in socially interactive environments.”111


Off-the-job training. How does receiving feedback from an instructor affect your retention of knowledge?

What about Student-Teacher Interaction? Because of the lack of classroom interaction between students and teachers in online education, both must assume more responsibility. “If students do not receive adequate teacher feedback and reinforcement,” points out one writer, “they will not always know whether they possess an accurate knowledge of the subject matter.”112


Neuroscientists are finding out that the human brain is a “social animal” that needs interaction with others.113 How do you think this fact relates to e-learning? Do you think you learn better in a classroom rather than online?

What If No One Shows Up? Many employers offer employee training, whether internal or external, or funding to attend seminars. But research has shown that a surprisingly high percentage of employees simply don’t know about it. For instance, while 92% of employers in one survey offered funding to attend seminars and trade shows, only 28% of employees were aware the funding existed.114 Clearly, then, employers need to find out whether the training offered fits with the majority of employee development goals.

Are you suited for a career in human resources? You now have learned about the different HR programs and practices, such as recruiting, training, and compensation. Not everyone is suited for HR work, but does it interest you? The following self-assessment will help you decide. images


Is a Career in HR Right for You?

This survey is designed to assess your skills and interests and determine if a career in human resources is right for you. Go to and take Self-Assessment 9.3. When you’re done, answer the following questions:

1.   Are you suited for a career in human resources? Which specific aspect of human resources do you prefer?

2.   Look at the top two areas of HR for which you tested as being best suited. Look over the descriptions of these fields and then identify what skills you need to have to be successful.

3.   Even if you do not pursue a career in HR, which skills do you feel you should continue to develop? Explain.

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Performance Appraisal

How can I assess employees’ performance more accurately and give more effective feedback?


Performance appraisal, assessing employee performance and providing them feedback, may be objective or subjective. Appraisals may be by peers, subordinates, customers, or oneself. Feedback may be formal or informal.

If you’re a member of the Millennial Generation, you tend to want “frequent and candid performance feedback,” according to one survey, and having your managers provide “detailed guidance in daily work” is very important to you.115 Feedback about how you’re doing at work is part of performance management.

Performance Management in Human Resources

No doubt you’ve had the experience at some point of having a sit-down with a superior, a boss or a teacher, who told you how well or poorly you were doing—a performance appraisal. A performance appraisal is a single event, as we discuss later in this section. Performance management, by contrast, is a powerful ongoing activity that has produced such spectacular results as 40% higher employee commitment, 50% less turnover, 10%–30% higher customer satisfaction—and double a firm’s net profits.116

Performance management is defined as a set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations.117 It consists of four steps: (1) define performance, (2) monitor and evaluate performance, (3) review performance, and (4) provide consequences. (See Figure 9.3.)

FIGURE 9.3 Performance management: four steps

Source: Adapted from A. J. Kinicki, K. J. L. Jacobson, S. J. Peterson, and G. E. Prussia, “Development and Validation of the Performance Management Behavior Questionnaire,” Personnel Psychology, Vol. 66 (2013), pp. 1–45.


Performance management, which is often exerted through an organization’s managers and human resources policies and practices, is a powerful means for improving individual, group, and organizational effectiveness.118

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Performance Management: How Domino’s Pizza Built a Billion-Dollar Business

The founder of Domino’s Pizza, Tom Monaghan, grew the business, which he later sold for $1 billion, by using performance management, as follows:119

1. Define Performance. In order to meet Domino’s promise of delivering customers a pizza within 30 minutes or no payment required, Monaghan made clear to his employees in his performance expectations the importance of speed, even showing employees how to run out the door.

2. Monitor & Evaluate Performance. Domino’s employees filled out a form showing they understood what was expected of them, then every one of them met with their manager and listed goals for the month and action plans for achieving them. Employees also described what the manager was supposed to do for them to support their efforts.

3. Review Performance. Employees met with their managers every three months to review their performance, and managers met with their own superiors once a month to do the same.

4. Provide Consequences. Monaghan is a big believer in rewarding performance and retaining talent. Thus, Domino’s store managers received not only salaries but also 30% of profits. To retain talent, Monaghan rewarded franchisees (individual store owners who had purchased the right to use the Domino’s trademark and business model) by encouraging them to develop their managers into store owners themselves, for which the original franchisees were rewarded with a percentage of the earnings from the new store.


In your current job—being a student—how effective do you think Domino’s approach to performance management could be in helping you excel at college? Who would you designate as your “manager,” how often would you meet, and what kind of goals and action plans would you set?

Two Kinds of Performance Appraisal: Objective & Subjective

A performance appraisal, or performance review, consists of (1) assessing an employee’s performance and (2) providing him or her with feedback. Unlike performance management, which is an ongoing, interactive process between managers and employees, a performance appraisal is often dictated by a date on the calendar rather than need and is a “one-sided, boss-dominated” assessment that comes down to whether your superior “likes” you, according to some critics.120

No wonder, then, that so many performance reviews are worthless, in the opinion of UCLA management professor Samuel Culbert, coauthor of Get Rid of the Performance Review!121 A recent worldwide survey of 1,300 workers also revealed that 7 in 10 people believed that their managers did not remain calm and constructive when discussing performance. This is why 20% of the respondents dreaded having difficult conversations with their boss.122 Management expert W. Edwards Deming (see Chapter 2) felt that such reviews were actually harmful because people remember only the negative parts.123 “The best kind of performance review is no performance review,” says psychologist Aubrey Daniels, who coined the term “performance management.”124 It thus is no surprise that some firms (about 1%) have scrapped the practice altogether.125 Nevertheless, let us take a look at performance appraisals since they are still used frequently.

Two Kinds of Performance Appraisal: Objective & Subjective

There are two ways to evaluate an employee’s performance—objectively and subjectively.

1. Objective Appraisals Objective appraisals, also called results appraisals, are based on facts and are often numerical. In these kinds of appraisals, you would keep Page 282track of such matters as the numbers of products the employee sold in a month, customer complaints filed against an employee, miles of freight hauled, and the like.

There are two good reasons for having objective appraisals:

imagesThey measure results. It doesn’t matter if two appliance salespeople have completely different personal traits (one is formal, reserved, and patient; the other informal, gregarious, and impatient) if each sells the same number of washers and dryers. Human resource professionals point out that, just as in business we measure sales, profits, shareholder value, and other so-called metrics, it is likewise important to measure employee performance, benefit costs, and the like as an aid to strategy.126

imagesThey are harder to challenge legally. Not being as subject to personal bias, objective appraisals are harder for employees to challenge on legal grounds, such as for age, gender, or racial discrimination.


“Here’s the deal . . .” One of the most important tasks of being a manager is giving employees accurate information about their work performance. Which would you be more comfortable giving—objective appraisals or subjective appraisals?

We discussed an objective approach in Chapter 5 under management by objectives, which can encourage employees to feel empowered to adopt behavior that will produce specific results. MBO, you’ll recall, is a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results. For example, an objective for a copier service technician might be to increase the number of service calls 15% during the next three months.

2. Subjective Appraisals Few employees can be adequately measured just by objective appraisals—hence the need for subjective appraisals, which are based on a manager’s perceptions of an employee’s (1) traits or (2) behaviors.

imagesTrait appraisals. Trait appraisals are ratings of such subjective attributes as “attitude,” “initiative,” and “leadership.” Trait evaluations may be easy to create and use, but their validity is questionable because the evaluator’s personal bias can affect the ratings.

imagesBehavioral appraisals. Behavioral appraisals measure specific, observable aspects of performance—being on time for work, for instance—although making the evaluation is still somewhat subjective. An example is the behaviorally anchored rating scale (BARS), which rates employee gradations in performance according to scales of specific behaviors. For example, a five-point BARS rating scale about attendance might go from “Always early for work and has equipment ready to fully assume duties” to “Frequently late and often does not have equipment ready for going to work,” with gradations in between.

Who Should Make Performance Appraisals?

If one of your employees was putting on a good show of solving problems that, it turned out, she had actually created herself so that she could be an “office hero” and look good, how would you know about it? (This phenomenon has been dubbed “Munchausen—pronounced mun-chow-zen—at work” because it resembles the rare psychological disorder in which sufferers seek attention by making up an illness.127) Most performance appraisals are done by managers; however, to add different perspectives, sometimes appraisal information is provided by other people knowledgeable about particular employees.

Page 283Peers, Subordinates, Customers, & Self Among additional sources of information are coworkers and subordinates, customers and clients, and the employees themselves.

imagesPeers and subordinates. Coworkers, colleagues, and subordinates may well see different aspects of your performance. Such information can be useful for development, although it probably shouldn’t be used for evaluation. (Many managers will resist soliciting such information about themselves, of course, fearing negative appraisals.)

imagesCustomers and clients. Some organizations, such as restaurants and hotels, ask customers and clients for their appraisals of employees. Publishers ask authors to judge how well they are doing in handling the editing, production, and marketing of their books. Automobile dealerships may send follow-up questionnaires to car buyers.

imagesSelf-appraisals. How would you rate your own performance in a job, knowing that it would go into your personnel file? Probably the bias would be toward the favorable. Nevertheless, self-appraisals help employees become involved in the whole evaluation process and may make them more receptive to feedback about areas needing improvement.

360-Degree Assessment: Appraisal by Everybody We said that performance appraisals may be done by peers, subordinates, customers, and oneself. Sometimes all these may be used in a technique called 360-degree assessment.

In a “theater in the round,” the actors in a dramatic play are watched by an audience on all sides of them—360 degrees. Similarly, as a worker, you have many people watching you from all sides. Thus has arisen the idea of the 360-degree assessment, or 360-degree feedback appraisal, in which employees are appraised not only by their managerial superiors but also by peers, subordinates, and sometimes clients, thus providing several perspectives.

Typically, an employee chooses between 6 and 12 other people to make evaluations, who then fill out anonymous forms, the results of which are tabulated by computer. Or, using a Facebook-style program such as Performance Multiplier or Twitter-like software called Rypple, employees can solicit evaluations through social networking–style systems.128 The employee then goes over the results with his or her manager and together they put into place a long-term plan for performance goals.

Incorporating 360-degree feedback into the performance appraisal process has advantages and disadvantages. Recent research found that “improvement is most likely to occur when feedback indicates that change is necessary, recipients have a positive feedback orientation, perceive a need to change their behavior, react positively to feedback, believe change is feasible, set appropriate goals to regulate their behavior, and take actions that lead to skill and performance improvement.”129 At the heart of the process is the matter of trust. “Trust determines how much an individual is willing to contribute for an employer,” says one expert. “Using 360 confidentially, for developmental purposes, builds trust; using it to trigger pay and personnel decisions puts trust at risk.”130

Forced Ranking: Grading on a Curve To increase performance, an estimated 60% of Fortune 500 companies (such as General Electric, Ford, Cisco, and Intel) have some variant of performance review systems known as forced ranking (or “rank and yank”) systems.131 In forced ranking performance review systems, all employees within a business unit are ranked against one another and grades are distributed along some sort of bell curve—just like students being graded in a college course. Top performers (such as the top 20%) are rewarded with bonuses and promotions, the worst performers (such as the bottom 20%) are rehabilitated or dismissed. For instance, every year 10% of GE’s managers are assigned the bottom grade, and if they don’t improve, they are asked to leave the company.

Page 284Proponents of forced ranking say it encourages managers to identify and remove poor performers and also structures a predetermined compensation curve, which enables them to reward top performers. If, however, the system is imposed on an organization overnight without preparation, by pitting employees against one another, it can produce shocks to morale, productivity, and loyalty. There may also be legal ramifications, as when employees file class-action lawsuits alleging that the forced ranking methods had a disparate effect on particular groups of employees.132

TABLE 9.2 How to Give Performance Feedback to Employees

Think of yourself as a coach, as though you were managing a team of athletes.


One recent study found that only 14% of all companies surveyed used a forced ranking system, down from 42% in 2009.133 Microsoft recently ended a forced-ranking system because employees complained it discouraged teamwork.134 (However, former GE CEO Jack Welch takes issue with this criticism, saying that if a company wants teamwork, it should identify it as a value, then evaluate and reward it accordingly.135)

Effective Performance Feedback

The whole point of performance appraisal, of course, is to stimulate better job performance. But, says Lawrence Bossidy, former CEO of AlliedSignal, the typical appraisal is often three pages long and filled with vague, uncommunicative language and is useless to ensure that improvement happens.136 Bossidy recommends an appraisal take up half a page and cover just three topics: what the boss likes about your performance, what you can improve, and how you and your boss are going to make sure that improvement happens.

To help increase employee performance, a manager can use two kinds of appraisals—formal and informal.

1. Formal Appraisals Formal appraisals are conducted at specific times throughout the year and are based on performance measures that have been established in advance. An emergency medical technician might be evaluated twice a year by his or her manager, using objective performance measures such as work attendance time sheets and more subjective measures such as a behaviorally anchored rating scales (BARS) to indicate the employee’s willingness to follow emergency procedures and doctors’ and nurses’ orders.

As part of the appraisal, the manager should give the employee feedback, describing how he or she is performing well and not so well and giving examples. Managers are sometimes advised to keep diaries about specific incidents so they won’t have to rely on their memories (and so that their evaluations will be more lawsuit-resistant). Facts should always be used rather than impressions.

2. Informal Appraisals Formal appraisals are the equivalent of a student receiving a grade on a midterm test and a grade on a final test—weeks may go by during which you are unaware of how well you’re doing in the course. Informal appraisals are the equivalent of occasional unscheduled pop quizzes and short papers or drop-in visits to the professor’s office to talk about your work—you have more frequent feedback about your performance. Informal appraisals are conducted on an unscheduled basis and consist of less rigorous indications of employee performance.

As a manager, you may not feel comfortable about critiquing your employees’ performance, especially when you have to convey criticism rather than praise. Nevertheless, giving performance feedback is one of the most important parts of the manager’s job.

Some suggestions for improvement appear in the table at left. (See Table 9.2.) images

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Managing Promotions, Transfers, Disciplining, & Dismissals

What are some guidelines for handling promotions, transfers, disciplining, and dismissals?


As a manager, you’ll have to manage employee replacement actions, as by promoting, transferring, demoting, laying off, or firing.

“The unemployment rate is an abstraction, an aggregation of bodiless data,” writes journalist/novelist Walter Kirn, “but losing a job is a lived experience, written on the nerves. . . . Some blame themselves and some blame everybody. Still others, not knowing whom to blame, explode.”137

Among the major—and most difficult—decisions you will make as a manager are those about employee movement within an organization: Whom should you let go? promote? transfer? discipline? All these matters go under the heading of employee replacement. And, incidentally, any time you need to deal with replacing an employee in a job, that’s a time to reconsider the job description to see how it might be made more effective for the next person to occupy it.

You’ll have to deal with replacement whenever an employee quits, retires, becomes seriously ill, or dies. Or you may initiate the replacement action by promoting, transferring, demoting, laying off, or firing.138

Promotion: Moving Upward

Promotion—moving an employee to a higher-level position—is the most obvious way to recognize that person’s superior performance (apart from giving raises and bonuses). Three concerns are these:

Fairness It’s important that promotion be fair. The step upward must be deserved. It shouldn’t be for reasons of nepotism, cronyism, or other kind of favoritism.

Nondiscrimination The promotion cannot discriminate on the basis of race, ethnicity, gender, age, or physical ability.

Others’ Resentments If someone is promoted, someone else may be resentful about being passed over. As a manager, you may need to counsel the people left behind about their performance and their opportunities in the future. In fact, if you are passed over yourself, it is important not to let your anger build. Instead, you should gather your thoughts, then go in and talk to your boss and find out what qualities were lacking, suggests one report. You should also create a career action plan and look for ways to improve your knowledge, skills, and abilities.139

Transfer: Moving Sideways

Transfer is movement of an employee to a different job with similar responsibility. It may or may not mean a change in geographical location (which might be part of a promotion as well).

Page 286Employees might be transferred for four principal reasons: (1) to solve organizational problems by using their skills at another location; (2) to broaden their experience in being assigned to a different position; (3) to retain their interest and motivation by being presented with a new challenge; or (4) to solve some employee problems, such as personal differences with their bosses.

Disciplining & Demotion: The Threat of Moving Downward

Poorly performing employees may be given a warning or a reprimand and then disciplined. That is, they may be temporarily removed from their jobs, as when a police officer is placed on suspension or administrative leave—removed from his or her regular job in the field and perhaps given a paperwork job or told to stay away from work.

Alternatively, an employee may be demoted—that is, have his or her current responsibilities, pay, and perquisites taken away, as when a middle manager is demoted to a first-line manager. (Sometimes this may occur when a company is downsized, resulting in fewer higher level management positions.)

Dismissal: Moving Out of the Organization

Dismissals are of three sorts:

Layoffs The phrase being laid off tends to suggest that a person has been dismissed temporarily—as when a carmaker doesn’t have enough orders to justify keeping its production employees—and may be recalled later when economic conditions improve.

Downsizings A downsizing is a permanent dismissal; there is no rehiring later. An automaker discontinuing a line of cars or on the path to bankruptcy might permanently let go of its production employees.

Firings The phrase being fired, with all its euphemisms and synonyms—being “terminated,” “separated,” “let go,” “canned”—tends to mean that a person was dismissed permanently “for cause”: absenteeism, sloppy work habits, failure to perform satisfactorily, breaking the law, and the like.

It used to be that managers could use their discretion about dismissals. Today, however, because of the changing legal climate, steps must be taken to avoid employees suing for “wrongful termination.” That is, an employer has to carefully document the reasons for dismissals. You also need to take into account the fact that survivors in the company can suffer just as much as, if not more than, their colleagues who were let go.140

Incidentally, in terms of your own career, be aware that dismissals rarely come as a surprise. Most bosses are conflict-averse, and you may see the handwriting on the wall when your own manager begins to interact with you less.141

The Practical Action box on the next page offers some suggestions for handling dismissals. images

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Fired. Being fired can be one of the most stressful events of one’s life—more than the death of a close friend, separation from one’s spouse over marital problems, or an injury requiring hospitalization. Some people who have been let go from their jobs suffer major health consequences. If you as a manager ever had to fire someone, what would you do to try to soften the blow?



The Right Way to Handle a Dismissal

“Employment at will” is the governing principle of employment in the great majority of states, which means that anyone can be dismissed at any time for any reason at all—or for no reason. Exceptions are whistle-blowers and people with employment contracts. Civil-rights laws also prohibit organizations’ dismissing people for their gender, skin color, or physical or mental disability.142

Four suggestions for handling a dismissal follow.

Give the Employee a Chance First

If you’re dealing with someone who has a problem with absenteeism, alcohol/drug dependency, or the like, articulate to that employee what’s wrong with his or her performance, then set up a plan for improvement (which might include counseling). Or if you’re dealing with an employee who has a bad cultural or personality fit with the company—a buttoned-down, by-the-book style, say, that’s at odds with your flexible, fast-moving organization—have a conversation and give the employee time to find a job elsewhere.143

Don’t Delay the Dismissal, & Make Sure It’s Completely Defensible

If improvements aren’t forthcoming, don’t carry the employee along because you feel sorry for him or her. Your first duty is to the performance of the organization. Make sure, however, that you’ve documented all the steps taken in advance of the dismissal. Also be sure that the steps taken follow the law and all important organizational policies.144

Be Aware How Devastating a Dismissal Can Be—Both to the Individual & to Those Remaining

To the person being let go, the event can be as much of a blow as a divorce or a death in the family. Dismissals can also adversely affect those remaining with the company. This is what psychiatrist Manfred Kets de Vries calls layoff survivor sickness, which is characterized by anger, depression, fear, guilt, risk aversion, distrust, vulnerability, powerlessness, and loss of motivation. Indeed, a five-year study by Cigna and the American Management Association found an enormous increase in medical claims, particularly for stress-related illnesses, not only among those dismissed but among continuing employees as well.145

Offer Assistance in Finding Another Job

Dismissing a long-standing employee with only a few weeks of severance pay hurts not only the person let go but also the organization itself, as word gets back to the employees who remain, as well as to outsiders who might be prospective employees. Knowledgeable employers offer assistance in finding another job.

“The best demonstration that a company’s values are real,” says management scholar Rosabeth Moss Kanter, “is to act on them today even for people who will not be around tomorrow. A company, like a society, can be judged by how it treats its most vulnerable. . . . Bad treatment of departing employees can destroy the commitment of those who stay.”146

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The Legal Requirements of Human Resource Management

To avoid exposure to legal liabilities, what areas of the law do I need to be aware of?


Four areas of human resource law any manager needs to be aware of are labor relations, compensation and benefits, health and safety, and equal employment opportunity.

Whatever your organization’s human resource strategy, in the United States (and in U.S. divisions overseas) it has to operate within the environment of American law. Four areas you need to be aware of are as follows. Some important laws are summarized in the table opposite. (See Table 9.3.)

1. Labor Relations

The earliest laws affecting employee welfare had to do with unions, and they can still have important effects. Legislation passed in 1935 (the Wagner Act) resulted in the National Labor Relations Board, which enforces procedures whereby employees may vote to have a union and for collective bargaining. Collective bargaining consists of negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security.

A 1947 law (the Taft-Hartley Act) allows the president of the United States to prevent or end a strike that threatens national security. (We discuss labor-management issues further in Section 9.8.)

2. Compensation & Benefits

The Social Security Act in 1935 established the U.S. retirement system. The passage of the Fair Labor Standards Act of 1938 established minimum living standards for workers engaged in interstate commerce, including provision of a federal minimum wage (currently $7.25 an hour; several states have higher minimums) and a maximum workweek (now 40 hours, after which overtime must be paid), along with banning products from child labor.147 Salaried executive, administrative, and professional employees are exempt from overtime rules.

3. Health & Safety

From miners risking tunnel cave-ins to cotton mill workers breathing lint, industry has always had dirty, dangerous jobs. Beginning with the Occupational Safety and Health Act (OSHA) of 1970, a body of law has grown that requires organizations to provide employees with nonhazardous working conditions. Later laws extended health coverage, including 2010 health care reform legislation, which requires companies with more than 50 employees to provide health insurance.148

4. Equal Employment Opportunity

The effort to reduce discrimination in employment based on racial, ethnic, and religious bigotry and gender stereotypes began with Title VII of the Civil Rights Act of 1964. This established the Equal Employment Opportunity (EEO) Commission, whose job it is to enforce antidiscrimination and other employment-related laws. Title VII applies to all organizations or their agents engaged in an industry affecting interstate Page 289commerce that employs 15 or more employees. Contractors who wish to do business with the U.S. government (such as most colleges and universities, which receive federal funds) must be in compliance with various executive orders issued by the president covering antidiscrimination. Later laws prevented discrimination against older workers and people with physical and mental disabilities.149

TABLE 9.3 Some Important Recent U.S. Federal Laws & Regulations Protecting Employees


Page 290Workplace Discrimination, Affirmative Action, Sexual Harassment, & Bullying

Three important concepts covered by EEO laws are workplace discrimination, affirmative action, and sexual harassment, which we discuss below. We also consider bullying, which is not covered by EEO laws but, as one report says, “could well become the next major battleground in employment law as a growing number of states consider legislation that would let workers sue for harassment that causes physical or emotional harm.”150

Workplace Discrimination A large gap exists in perceptions between the sexes as to whether men or women have more opportunities for advancement. In a survey of 1,834 business professionals worldwide, 66% of men said opportunities to move to top management were gender neutral, compared with 30% of women who stated that.151 (In actuality, only 4.9% of CEOs are women at the 1,000 biggest U.S. companies, and of the 200 highest-paid chief executives in the United States, only 11—just 5.5%—are women.152)

Workplace discrimination occurs when people are hired or promoted—or denied hiring or promotion—for reasons not relevant to the job, such as skin color or eye shape, gender, religion, national origin, and the like. Two fine points to be made here are that (1) although the law prohibits discrimination in all aspects of employment, it does not require an employer to extend preferential treatment because of race, color, religion, and so on; and (2) employment decisions must be made on the basis of job-related criteria.

There are two types of workplace discrimination:

imagesAdverse impact: Adverse impact occurs when an organization uses an employment practice or procedure that results in unfavorable outcomes to a protected class (such as Hispanics) over another group of people (such as non-Hispanic whites). For example, requiring workers to have a college degree can inadvertently create adverse impact against Hispanics because fewer Hispanics graduate from college than whites. This example would not be a problem, however, if a college degree was required to perform the job.

imagesDisparate treatment: Disparate treatment results when employees from protected groups (such as disabled individuals) are intentionally treated differently. An example would be making a decision to give all international assignments to people with no disabilities because of the assumption that they won’t need any special accommodations related to travel.

When an organization is found to have been practicing discrimination, the people discriminated against may sue for back pay and punitive damages. In 2013, such complaints to the Equal Employment Opportunity Commission (EEOC) declined by 5.7% over the previous year. The most frequently cited basis for charges of discrimination was retaliation (41%), followed by race discrimination (35%); sex discrimination, including sexual harassment and pregnancy discrimination (29%); and discrimination based on disability (27%).153

In recent years, pay discrepancies between women and men improved slightly, but as of 2012 women overall still earned only 77 cents to every $1 for a man, according to the U.S. Census Bureau. For men and women who have a 40-hour workweek, the gap narrows to 88 cents for women. (In some occupations, such as financial specialists, women earn as little as 66 cents to a man’s dollar, but among dental hygienists, Page 291HR specialists, and advertising sales agents, the pay is equal between men and women. In other words, the gap widens in higher-paying occupations such as business, medicine, and law.154)

Affirmative Action Affirmative action focuses on achieving equality of opportunity within an organization. It tries to make up for past discrimination in employment by actively finding, hiring, and developing the talents of people from groups traditionally discriminated against. Steps include active recruitment, elimination of prejudicial questions in interviews, and establishment of minority hiring goals. It’s important to note that EEO laws do not allow use of hiring quotas.155

Affirmative action has created tremendous opportunities for women and minorities, but it has been resisted more by some white males who see it as working against their interests.156 Affirmative action plans are more successful when employees view them as being fair and equitable and when whites are not prejudiced against people of color.157 In addition, research shows that women and minorities hired on the basis of affirmative action felt stigmatized as unqualified and incompetent and experienced lower job satisfaction and more stress than employees supposedly selected on the basis of merit.158


Sexual harassment. If this woman is unaware of the men ogling her legs, does that make their behavior acceptable? Or does it still contribute to an offensive work environment?

Sexual Harassment Sexual harassment consists of unwanted sexual attention that creates an adverse work environment. This means obscene gestures, sex-stereotyped jokes, sexually oriented posters and graffiti, suggestive remarks, unwanted dating pressure, physical nonsexual contact, unwanted touching, sexual propositions, threatening punishment unless sexual favors are given, obscene phone calls, and similar verbal or physical actions of a sexual nature.159 The harassment may be by a member of the opposite sex or a member of the same sex, by a manager, by a coworker, or by an outsider.160 If the harasser is a manager or an agent of the organization, the organization itself can be sued, even if it had no knowledge of the situation.161

Two Types of Sexual Harassment There are two types of sexual harassment, both of which violate Title VII of the 1964 Civil Rights Act. In the quid pro quo harassment type, the person to whom the unwanted sexual attention is directed is put in the position of jeopardizing being hired for a job or obtaining job benefits or opportunities unless he or she implicitly or explicitly acquiesces. More typical is the hostile environmenttype, in which the person being sexually harassed doesn’t risk economic harm but experiences an offensive or intimidating work environment. According to one survey, 38% of women said they heard sexual innuendo, wisecracks, or taunts at the office.162



Silicon Valley, Sexual Harassment, & the “Brogrammer” Culture

Women start 1,288 companies every day, and women-owned businesses have risen 68% since 1997, compared to 47% for all companies.163 Moreover, venture capital firms that invested in women-led companies during the decade 2000–2010 outperformed those that didn’t.164 Despite such achievements, women are significantly underrepresented among the tech companies of Silicon Valley, long a male stronghold. (Google’s global staff is only 30% female, Facebook’s 31%, and Yahoo’s 37%.165)

Frat-Boy Behavior. Lack of gender diversity doesn’t necessarily result in a culture of sexism and sexual harassment. But sometimes it is exceedingly so. Sexist attitudes start in computer science classes, women say, and are reinforced by the tech industry’s “brogrammer” (“bro” + “programmer”) fraternity-house attitudes and behavior of some male software engineers and executives.166 (“Bro culture” also is said to lock many minorities out.167) In the case of Los Angeles-based Tinder, which Page 292produces a popular mobile dating app, former marketing vice president Whitney Wolfe alleges in a lawsuit that such attitudes led to her being sexually harassed and discriminated against before being forced out.

A Joke? Wolfe’s suit says that she briefly dated Justin Mateen, Tinder’s chief marketing officer, but after they broke up he called her a “desperate loser,” a “joke,” a “gold digger,” a “disease,” and worse. He also allegedly stripped her of her “co-founder” title (because she was a “young female”), even though Mateen himself was hired after Wolfe’s marketing trips had begun to make Tinder take off.168 Tinder’s CEO, Sean Rad, who hired Mateen, denies that Wolfe was discriminated against and adds “We take gender equality very seriously.”169


Do you see sexist and demeaning behavior in the culture of your campus that you worry you might encounter later in a future workplace?

The table at left presents some guidelines for preventing sexual harassment. (See Table 9.4.)

TABLE 9.4 Preventing Sexual Harassment


What Managers Can Do To help prevent harassment from occurring, managers can make sure their companies have an effective sexual harassment policy in place. The policy should be shown to all current and new employees, who should be made to understand that sexual harassment will not be tolerated under any circumstances. A formal complaint procedure should be established, which should explain how charges will be investigated and resolved. Supervisors should be trained in Title VII requirements and the proper procedures to follow when charges occur. If charges occur, they should be investigated promptly and objectively, and if substantiated, the offender should be disciplined at once—no matter what his or her rank in the company.170

Bullying If college professors can be bullied, can’t anyone?

For years, mathematics professor Bill Lepowsky experienced abusive behavior at the San Francisco Bay Area community college where he taught. It began with a group of managers spreading rumors and false accusations that threatened his job—for instance, saying he was holding class in the wrong classroom and not attending meetings he wasn’t supposed to attend. It was emotionally draining—like “being a soldier in a foxhole with shells exploding,” he said—and took time and focus away from his job. It didn’t end until his tormentors left the college.171

The Meaning of Mean Bullying is repeated mistreatment of one or more persons by one or more perpetrators; it is abusive physical, psychological, verbal, or nonverbal behavior that is threatening, humiliating, or intimidating. “People have only thought about bullying related to children,” says one expert, “but the fact is that right now adult bullying is rampant.”172 Indeed, bullying on the job is experienced by 37% of employees, according to one survey, and 51%, according to another.173

Bullies can be male or female, although the majority (about 60%) are men and most are bosses. Women tend to be bullied more than men. Bullying can occur between colleagues, managers, and employees. Bullying on the job may be physically aggressive, such as pushing, pinching, or cornering someone. However, it is more apt to be verbal, including shouting, swearing, and name calling. Or it may be relational, including malicious gossip, rumors, and lies that may cause someone to feel isolated or cut off. Bullying through technology (cyberbullying), such as Facebook, twitter, or e-mail, accounts for about one in five incidents.174

The Effects of Bullying Unfortunately, many workplace bullies are quite charming and manipulative and so receive positive evaluations from their supervisors and achieve high levels of career success, according to one dispiriting study.175 “If people are politically skilled, they can do bad things really well,” says one of the study authors.176 Of course, that doesn’t make this behavior right. Indeed, bullying can devastate a workplace.177

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Bullying. A surprisingly common activity, bullying is apt to be verbal, involving shouting and name calling, or relational, including spreading malicious rumors and lies. In some cases, however, it can be physically aggressive, involving pinching or pushing. Perhaps as many as half of all employees have experienced some sort of bullying on the job. Have you? What did you do about it?

Bullying, says Gary Namie, director of the Workplace Bullying Institute, can be especially damaging in work sites where the bullied may be trapped in close proximity to their bully.178 Bullied employees are less satisfied at work, more likely to spend time gossiping and not putting in their full effort, and more likely to quit.179 Victims also tend to experience stress-related health problems, such as anxiety, panic attacks, depression—even suicide.180

The table below presents some guidelines for combating bullying. (See Table 9.5.) images

TABLE 9.5 Beating Back the Bully


Sources: A. Brujzzese, “Workplace Becomes New Schoolyard for Bullies,” USA Today, August 24, 2011,—choolyard-for-bulliets/50081460/1 (accessed July 3, 2014); K. V. Brown, “Far Beyond School Playground, Bullying Common in Workplace,” San Francisco Chronicle, November 6, 2011, pp. A1, A10; and R. Sherwood, “Solutions for Bullying in the Workplace,” Yahoo-Voices, May 17, 2012, (accessed July 3, 2014).

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Labor-Management Issues

What are the principal processes and issues involved in organizing labor unions?


We describe the process by which workers get a labor union to represent them and how unions and management negotiate a contract. This section also discusses the types of union and nonunion workplaces and right-to-work laws. It covers issues unions and management negotiate, such as compensation, cost-of-living adjustments, two-tier wage systems, and givebacks. It concludes by describing mediation and arbitration.

TABLE 9.6 Snapshot of Today’s U.S. Union Movement


Source: Bureau of Labor Statistics, “Union Members Summary,” Economic News Release, January 24, 2014; (accessed July 5, 2014).

Starting in 1943, James Smith worked his way up from washing dishes in the galley of a passenger train’s dining car to waiter, earning tips on top of his wages of 36 cents an hour. The union job with the Brotherhood of Sleeping Car Porters, the first African American union, enabled him to go to college, and when he left the railroad he was hired as a civil engineer for the city of Los Angeles. “His story,” says one report, “is emblematic of the role the railroads and a railroad union played in building a foundation for America’s black middle class.”181 Unions also helped to grow the American (and European) middle classes in general, bringing benefits to all, organized or not.

Labor unions are organizations of employees formed to protect and advance their members’ interests by bargaining with management over job-related issues. The union movement is far less the powerhouse that it was in the 1950s—indeed, its present membership is the lowest since 1916—but it is still a force in many sectors of the economy.182 (See Table 9.6, left.)

How Workers Organize

When workers in a particular organization decide to form a union, they first must get each worker to sign an authorization card, which designates a certain union as the workers’ bargaining agent. When at least 30% of workers have signed cards, the union may ask the employer for official recognition. Usually the employer refuses, at which point the union can petition the National Labor Relations Board (NLRB) to decide which union should become the bargaining unit that represents the workers, such as the Team-sters Union, United Auto Workers, the American Federation of Teachers, or the Service Employees International Union, as appropriate. (Some workers, however, are represented by unions you would never guess: Zookeepers, for instance, are represented by the Teamsters, which mainly organizes transportation workers. University of California, Berkeley, graduate student instructors are represented by the United Auto Workers.) An election is then held by the NLRB, and if 50% or more of the votes cast agree to unionization, the NLRB certifies the union as the workers’ exclusive representative. One of the newest and most unusual unions to be certified is the College Athletes Players Association, which represents scholarship football players at Northwestern University.183

How Unions & Management Negotiate a Contract

Once a union is recognized as an official bargaining unit, its representatives can then meet with management’s representatives to do collective bargaining—to negotiate pay and benefits and other work terms.

When agreement is reached with management, the union representatives take the collective bargaining results back to the members for ratification—they vote to accept or reject the contract negotiated by their leaders. If they vote yes, the union and management representatives sign a negotiated labor-management contract, which sets the general tone and terms under which labor and management agree to work together during the contract period.

Page 295The Issues Unions & Management Negotiate About

The key issues that labor and management negotiate are compensation, employee benefits, job security, work rules, hours, and safety matters. However, the first issue is usually union security and management rights.

Union Security & Types of Workplaces A key issue is: Who controls hiring policies and work assignments—labor or management? This involves the following matters:

imagesThe union security clause. The basic underpinning of union security is the union security clause, the part of the labor-management agreement that states that employees who receive union benefits must join the union, or at least pay dues to it. In times past, a union would try to solidify the union security clause by getting management to agree to a closed shop agreement—which is illegal today—in which a company agreed it would hire only current union members for a given job.

imagesTypes of unionized and nonunionized workplaces. The four basic kinds of workplaces are: closed shop, union shop, agency shop, and open shop. (See Table 9.7.)

TABLE 9.7 Four Kinds of Workplace Labor Agreements


imagesRight-to-work laws. Individual states are allowed (under the 1947 Taft-Hartley Act) to pass legislation outlawing union and agency shops. As a result, 22 states have passed right-to-work laws, statutes that prohibit employees from being required to join a union as a condition of employment.

Business interests supporting such laws argue that forcing workers to join a union violates their rights and makes a state less attractive to businesses considering moving there. Union supporters say that states with such laws have overall lower wages and that all workers benefit from union gains, so everyone should be compelled to join.

The 22 work-to-right states are shown in the map on the next page. (See Figure 9.4.)

Page 296FIGURE 9.4 States with right-to-work laws

What kind of state do you live in? (Alaska and Hawaii are non–right-to-work states.)


Compensation: Wage Rates, COLA Clauses, & Givebacks Unions strive to negotiate the highest wage rates possible, or to trade off higher wages for something else, such as better fringe benefits. Some issues involved with compensation are as follows:

imagesWage rates—same pay or different rates? Wage rates subject to negotiation include overtime pay, different wages for different shifts, and bonuses. In the past, unions tried to negotiate similar wage rates for unionized employees working in similar jobs for similar companies or similar industries. However, the pressure of competition abroad and deregulation at home has forced many unions to negotiate two-tier wage contracts, in which new employees are paid less or receive lesser benefits than veteran employees have.
    Example: In 2011, when automakers began to create new jobs, new union hires were offered about half the pay ($14 an hour) that autoworkers were getting before ($28). Such two-tier wage systems can be attractive to employers, who are able to hire new workers at reduced wages, but it also benefits veteran union members, who experience no wage reduction. However, some companies have been trying to make this wage concession permanent—a big setback for labor.184

imagesCost-of-living adjustment. Because the cost of living is always going up (at least so far), unions often try to negotiate a cost-of-living adjustment (COLA) clause, which during the period of the contract ties future wage increases to increases in the cost of living, as measured by the U.S. Bureau of Labor Statistics’ consumer price index (CPI). (An alternative is the wage reopener clause, which allows wage rates to be renegotiated at certain stated times during the life of the contract. Thus, a 10-year contract might be subject to renegotiation every two years.)

imagesGivebacks. During tough economic times, when a company (or, in the case of public employee unions, a municipality) is fighting for its very survival, management and labor may negotiate givebacks, in which the union agrees to give up previous wage or benefit gains in return for something else. Usually the union seeks job security, as in a no-layoff policy.

Page 297Settling Labor-Management Disputes

Even when a collective-bargaining agreement and contract has been accepted by both sides, there may likely be ongoing differences that must be resolved. Sometimes differences lead to walkouts and strikes, or management may lock out employees. However, conflicts can be resolved through grievance procedures and mediation or arbitration.

Grievance Procedures A grievance is a complaint by an employee that management has violated the terms of the labor-management agreement. Example: An employee may feel he or she is being asked to work too much overtime, is not getting his or her fair share of overtime, or is being unfairly passed over for promotion.

Grievance procedures are often handled initially by the union’s shop steward, an official elected by the union membership who works at the company and represents the interests of unionized employees on a daily basis to the employees’ immediate supervisors. If this process is not successful, the grievance may be carried to the union’s chief shop steward and then to the union’s grievance committee, who deal with their counterparts higher up in management.

If the grievance procedure is not successful, the two sides may decide to try to resolve their differences by one of two ways—mediation or arbitration.

Mediation Mediation is the process in which a neutral third party, a mediator, listens to both sides in a dispute, makes suggestions, and encourages them to agree on a solution. Mediators may be lawyers or retired judges or specialists in various fields, such as conflict resolution or labor matters.

Arbitration Arbitration is the process in which a neutral third party, an arbitrator, listens to both parties in a dispute and makes a decision that the parties have agreed will be binding on them.Arbitrators are often retired judges.

Leo Kanne, head of Local 440 for the United Food & Commercial Workers International Union in Denison, Iowa, home of a Smithfield meat processing plant, says plant workers earn enough to take their children to Pizza Ranch or maybe Dairy Queen every week and go on vacation once a year. “That’s all these people want,” he says. “Nobody is getting rich working in these plants.” Word that a Chinese company had acquired Smithfield has everyone worried. Will they cut costs and not honor past labor agreements?185 Considering these kinds of concerns, what is your feeling about labor unions? Self-Assessment 9.4 enables you to answer this question by assessing your general attitudes toward unions. images


Assessing Your Attitudes toward Unions186

This survey is designed to assess your attitude toward unions. Go to and take Self-Assessment 9.4. When you’re done, answer the following questions:

1.   Where do you stand on your attitude toward unions? Positive, neutral, or negative?

2.   What experiences or events in your life have led to your attitude toward unions? Describe. What do you think lies in the future for labor unions?

3.   Why has there been growing dislike for unions in the U.S.?

Page 298Key Terms Used in This Chapter

360-degree assessment

adverse impact

affirmative action


assessment center

base pay

behavioral-description interview

behaviorally anchored rating scale (BARS)



collective bargaining


computer-assisted instruction (CAI)

cost-of-living adjustment (COLA) clause


disparate treatment

employment tests

Equal Employment Opportunity (EEO) Commission

external recruiting

Fair Labor Standards Act

forced ranking performance review systems

formal appraisals



human capital

human resource inventory

human resource (HR) management

informal appraisals

internal recruiting

job analysis

job description

job posting

job specification

knowledge worker

labor unions


National Labor Relations Board

objective appraisals


performance appraisal

performance management

realistic job preview



right-to-work laws

selection process

sexual harassment

situational interview

social capital

strategic human resource planning

structured interview

subjective appraisals


two-tier wage contracts

union security clause

unstructured interview


workplace discrimination

Key Points

images9.1  Strategic Human Resource Management

•   Human resource (HR) management consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce. The purpose of the strategic human resource management process is to get the optimal work performance that will help realize the company’s mission and vision.

•   Three concepts important to human resource management are (1) human capital, the economic or productive potential of employee knowledge; (2) knowledge workers, people whose occupations are principally concerned with generating or interpreting information, as opposed to manual labor; and (3) social capital, the economic or productive potential of strong, trusting, and cooperative relationships.

•   Strategic human resource planning consists of developing a systematic, comprehensive strategy for (a) understanding current employee needs and (b) predicting future employee needs.

•   Understanding current employee needs requires first doing a job analysis to determine, by observation and analysis, the basic elements of a job. Then a job description can be written, which summarizes what the holder of the job does and how and why he or she does it. Next comes the job specification, which describes the minimum qualifications a person must have to perform the job successfully.

•   Predicting employee needs means a manager needs to become knowledgeable about the staffing an organization might need and the likely sources of staffing, perhaps using a human resource inventory to organize this information.

images9.2  Recruitment & Selection: Putting the Right People into the Right Jobs

•   Recruiting is the process of locating and attracting qualified applicants for jobs open in the organization. Recruiting is of two types: internal and external.

•   Internal recruiting means making people already employed by the organization aware of job openings, as through job postings.

Page 299•   External recruiting means attracting job applicants from outside the organization. A useful approach is the realistic job preview, which gives a candidate a picture of both positive and negative features of the job and organization before he or she is hired.

•   The selection process is the screening of job applicants to hire the best candidates. Three types of selection tools are background information, interviewing, and employment tests.

•   Background information is ascertained through application forms, resumes, and reference checks.

•   Interviewing takes three forms. (a) The unstructured interview involves asking probing questions to find out what the applicant is like. (b) The structured interview involves asking each applicant the same questions and comparing his or her responses to a standardized set of answers. The first type of structured interview is the situational interview, in which the interview focuses on hypothetical situations. (c) The second type of structured interview is the behavioral-description interview, in which the interviewer explores what applicants have actually done in the past.

•   Employment tests are legally considered to consist of any procedure used in the employment selection decision process, but the most common tests are ability tests, personality tests, performance tests, and integrity tests. Some companies have assessment centers, in which management candidates participate in activities for a few days while being assessed in performance tests by evaluators.

•   Other tests include drug testing, polygraphs, and genetic screening. With any kind of test, an important legal consideration is the test’s reliability, the degree to which a test measures the same thing consistently, and validity, whether the test measures what it purports to measure and is free of bias.

images9.3  Managing an Effective Workforce: Compensation & Benefits

•   Compensation has three parts: wages or salaries, incentives, and benefits.

•   In the category of wages or salaries, the concept of base pay consists of the basic wage or salary paid employees in exchange for doing their jobs.

•   Incentives include commissions, bonuses, profit-sharing plans, and stock options.

•   Benefits are additional nonmonetary forms of compensation, such as health insurance, retirement plans, and family leave.

images9.4  Orientation, Training, & Development

•   Three ways in which newcomers are helped to perform their jobs are through orientation, training, and development.

•   Orientation consists of helping the newcomer fit smoothly into the job and organization. Following orientation, the employee should emerge with information about the job routine, the organization’s mission and operations, and the organization’s work rules and employee benefits.

•   Training must be distinguished from development. Training refers to educating technical and operational employees in how to do their current jobs better.

•   Development is the term describing educating professionals and managers in the skills they need to do their jobs in the future. Both training and development may be effected through on-the-job training methods and offthe-job training methods.

images9.5  Performance Appraisal

•   Performance management is defined as a set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations.186 It consists of four steps: (1) define performance, (2) monitor and evaluate performance, (3) review performance, and (4) provide consequences.

•   Performance appraisal consists of assessing an employee’s performance and providing him or her with feedback. Appraisals are of two general types—objective and subjective.

•   Two good reasons for having objective appraisals are that they measure results and they are harder to challenge legally. Objective appraisals are based on facts and are often numerical. An example is management by objectives.

•   Subjective appraisals are based on a manager’s perceptions of an employee’s traits or behaviors. Trait appraisals are ratings of subjective attributes such as attitude and leadership. Behavioral appraisals measure specific, observable aspects of performance. Most performance appraisals are made by managers, but they may also be made by coworkers and subordinates, customers and clients, and employees themselves (self-appraisals). Sometimes all of these may be used, in a technique called the 360-degree assessment, in which employees are appraised not only by their managerial superiors but also by their peers, subordinates, and sometimes clients.

•   In another evaluation technique, forced ranking performance review systems, all employees within a business unit are ranked against one another, and grades are distributed along some sort of bell curve.

Page 300•   Performance feedback can be effected in two ways: (1) Formal appraisals are conducted at specific times throughout the year and are based on performance measures that have been established in advance. (2) Informal appraisals are conducted on an unscheduled basis and consist of less rigorous indications of employee performance.

images9.6  Managing Promotions, Transfers, Disciplining, & Dismissals

•   Managers must manage promotions, transfers, disciplining, and dismissals.

•   In considering promotions, managers must be concerned about fairness, nondiscrimination, and other employees’ resentment.

•   Transfers, or moving employees to a different job with similar responsibility, may take place in order to solve organizational problems, broaden managers’ experience, retain managers’ interest and motivation, and solve some employee problems.

•   Poor-performing employees may need to be disciplined or demoted.

•   Dismissals may consist of layoffs, downsizings, or firings.

images9.7  The Legal Requirements of Human Resource Management

•   Four areas of human resource law that any manager needs to be aware of are labor relations, compensation and benefits, health and safety, and equal employment opportunity.

•   Labor relations are dictated in part by the National Labor Relations Board, which enforces procedures whereby employees may vote to have a union and for collective bargaining. Collective bargaining consists of negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security.

•   Compensation and benefits are covered by the Social Security Act of 1935 and the Fair Labor Standards Act, which established minimum wage and overtime pay regulations.

•   Health and safety are covered by the Occupational Safety and Health Act of 1970, among other laws.

•   Equal employment opportunity is covered by the Equal Employment Opportunity (EEO) Commission, whose job it is to enforce antidiscrimination and other employment-related laws.

•   Three important concepts covered by EEO are (a) discrimination, which occurs when people are hired or promoted—or denied hiring or promotion—for reasons not relevant to the job, such as skin color or national origin; (b) affirmative action, which focuses on achieving equality of opportunity within an organization; and (c) sexual harassment, which consists of unwanted sexual attention that creates an adverse work environment and which may be of two types—the quid pro quo type, which may cause direct economic injury, and the hostile environment type, in which the person being harassed experiences an offensive work environment.

•   Another area of concern, though not covered by EEO laws, is bullying, repeated mistreatment by one or more perpetrators. Bullying is abusive physical, psychological, verbal, or nonverbal behavior that is threatening, humiliating, or intimidating.

images9.8  Labor-Management Issues

•   Labor unions are organizations of employees formed to protect and advance their members’ interests by bargaining with management over job-related issues.

•   Workers organize by signing authorization cards designating a certain union as their bargaining agent, and if enough cards are signed, the National Labor Relations Board will recognize the union as the bargaining unit. If 50% of workers agree, the NLRB certifies the union as the workers’ exclusive representative. In negotiating a contract in collective bargaining, workers in the union must ratify the contract, after which union and management sign a negotiated labor-management contract.

•   Among the issues unions negotiate are the union security clause, which states that workers must join the union or at least pay benefits to it.

•   The four types of workplaces are closed shop (now illegal), union shop, agency shop, and open shop. Twenty-two states have right-to-work laws that prohibit employees from being required to join a union as a condition of employment.

•   Unions also negotiate wage rates, including two-tier wage contracts, with newer employees being paid less, and cost-of-living (COLA) adjustments giving wages that increase with the cost of living. Sometimes unions must negotiate givebacks, in which employees give up previous wage or benefit gains in return for something else.

•   To avoid strikes, labor-management disputes may be resolved through grievance procedures or through mediation or arbitration.

Page 301Understanding the Chapter: What Do I Know?

1.  What is human resource management and its purpose, and what are the three concepts important to it?

2.  What is performance management, and what are the four steps in it?

3.  Explain the two steps in strategic human resource planning.

4.  What are the two types of recruiting and how do the three types of selection tools work?

5.  Differentiate among the three types of compensation.

6.  Describe orientation, training, and development.

7.  Explain the difference between objective and subjective performance appraisals and describe 360-degree assessment, forced ranking, and formal versus informal performance feedback.

8.  What are the four areas of human resource law a manager needs to be aware of?

9.  Explain the concepts of discrimination, affirmative action, sexual harassment, and bullying.

10.  What are the principal labor-management issues?

Management in Action

More Companies Rely on Proactive Human Resource Practices to Reduce Employee Turnover

U.S. Security Associates, Inc., which has a turnover rate of 22.84%, begins its effort to build a long-term workforce even before employees are hired. “A strong hiring process is a pivotal strategy in reducing key turnover liabilities. For our branch and district manager force, we implemented a variety of pre-employment measures and tools to minimize our risk and loss considerably while also adding strong performers to our organization,” says Manager of Organizational Development Jonathan Jones. “We use a combination of screening measurements and assessments as part of the hiring process and map those results to our organization’s specific performance measures. In this way, we are obtaining useful information as far as general performance indicators are concerned, as well as more specific performance indicators that are linked to the competencies that drive our business.”

Once they are hired, U.S. Security Associates works to keep employees motivated to keep up the good work—and stay on its payroll. “In tandem with our rigorous hiring strategies, we tie strong incentives to performance. Our compensation is a ‘pay-for-performance’ model in which actual performance dictates the majority of the total compensation,” says Jones. “This methodology internally ‘top-grades,’ or replaces low-performing managers with individuals more capable of achieving greater results, and assists in decreasing our turnover rate as we hire well and maintain our performers. The turnover we do have in this group is often favorable as it works to increase the caliber of our employees through this system.”

Special Attention Needed Immediately After Hiring

It is important to work to retain employees throughout their career, but never more so than in the first months after they are hired. These new employees you worked so hard to recruit have not yet committed to your company in those first days of employment. Aegis Media knows this and takes care to hold onto its newest employees in their earliest days with the organization. “We have a program that engages new hires for the first 90 days to ensure they are navigating the organization efficiently and to ensure they have an experienced member of the team they can reach out to who is not their direct manager, but rather a peer,” says Executive Vice President and Chief Talent Officer Rose Zory. “This has proven to drive much better engagement early on with the organization, and those who participate have a longer tenure with the company.”

The initial high level of attention Aegis Media gives its new employees is followed up with ongoing check-ins to make sure employees are getting what they need. “Understand engagement with employees at all levels. We have been committed to surveying all employees annually to ensure we are listening to what is working and what needs attention,” says Zory. “We do a post-hiring survey after 90 days and an exit survey with all voluntary leavers, as well. Understanding the reasons for people leaving the organization is key to managing your turnover proactively.”

Compete to Keep Star Employees

Vi, which owns, operates, and manages upscale senior living facilities across the United States, knows top talent in the nursing profession is in high demand. Nevertheless, the company has managed to sustain a turnover rate that continues to improve. “In 2012, Vi’s turnover Page 302was 21.8%, down from 24% in 2011. The average turnover in our industry ranges from 33% to as high as 65 to 70%,” says Vice President of Human Resources and Learning Judy Whitcomb. “Vi is proud that our average employee tenure is 5.5 years.”

Whitcomb says Vi has a strategic retention plan that includes a variety of employee development plans that contribute to Vi’s high retention rate. “The nursing field in general is very competitive. Vi has put several programs in place to attract, retain, and engage the very best in nursing,” Whitcomb explains. “Besides a custom online university portal called E-Campus, designed with specific courses, resources, and tools for nurses, Vi offers more than 500 free continuing education courses. In addition, Vi has created a comprehensive one-year nurse leadership development program for new and emerging nurse leaders. For employees early in their career, Vi offers an annual Management Development Program.”

Balance Long- & Short-Term Retention Efforts

Jiffy Lube International also takes long-term development seriously. The company offers certifications that prepare employees for a long career. The company has an online learning portal that is available to employees as early as their first day on the job. It offers a development path for the next few years of employment should the worker decide to stick with the company. “The 10 certifications in Jiffy Lube University have been reviewed by the American Council on Education (ACE) and determined to be worth seven hours of college credits,” says Manager of Learning and Development Ken Barber.


1.  What specific human resource practices are U.S. Security Associates, Aegis Media, Vi, and Jiffy Lube using to recruit and retain high-quality employees?

2.  Why do you think the practices and programs used at these companies are helping to reduce turnover? Explain your logic.

3.  To what extent does the size of a company influence the ability to implement the type of practices being used by these five companies? Explain.

4.  Based on what you learned in this chapter, can you think of any additional HR practices that might be used to reduce turnover? Discuss.

5.  What is your key takeaway from this case?

Source: Excerpted from Margery Weinstein, “No More Revolving Door,” Training, July/August 2013, pp. 50–53.

Legal/Ethical Challenge

How Would You Accommodate a Pregnant Employee?

This challenge is based on an actual case involving Anycia Grady, a social worker in the area of Cleveland, Ohio. After becoming pregnant, she worried that the stress of her 12-hours-a-day job might negatively impact her baby. She decided to consult her doctor.

Her doctor advised her to cut her workload to eight hours a day: The doctor wrote a note to her employer to confirm this conclusion. The doctor was concerned because research shows that “maternal stress in the early months of pregnancy can affect fetal brain development and can lead to low birth weight and pre-term labor,” according to a research report.

Anycia told her manager, “I am so overwhelmed and have so much anxiety over the health of my baby.” He told her that it would be very difficult for her to cover her case load in eight hours. Anycia concluded “I had two choices: keep my current pay and put my baby at risk, or do what I need to do to protect my baby and take the pay cut.”

The situation got worse after the first ultrasound. Her baby was not growing according to expectations, and was not moving. Ms. Grady was forced into a choice of losing income or doing what was best for her baby. She decided to see her manager and take control of the situation. She told her boss, “I am cutting my hours, and you can tell me later if it affects my pay.”


What would you do if you were Anycia Grady’s manager?

1.  I would allow her to work eight hours a day, and I would not cut her salary. I then would reallocate some of her cases to other social workers.

2.  I would allow her to work eight hours a day, but I would cut her salary accordingly. She should only get paid for the hours she works.

3.  I would try to find another less stressful job that she could perform. If none were available, then I would give her two choices: (1) cut your hours and pay to whatever you desire or (2) take a leave of absence.

4.  Invent other options. Explain.

Source: This case is based on A. Fox, “Great Expectations,” HR Magazine, February 2014, pp. 23–28.

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