Management IV
166 PART 3 | Organizing
Learning Objectives
After studying Chapter 8, you should be
able to:
LO1 Discuss how companies use human resources management to gain competitive advantage.
LO2 Give reasons why companies recruit both internally and externally for new hires.
LO3 Understand various methods for selecting new employees and HR-related laws.
LO4 Evaluate the importance of spending on training and development.
LO5 Explain alternatives for who appraises an employee’s performance.
LO6 Describe the fundamental aspects of a reward system.
LO7 Summarize how unions and labor laws influence human resources management.
8 Managing Human Resources chapter
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CHAPTER 8 | Managing Human Resources 167
LO1 Discuss how companies use human resources management to gain competitive advantage
I possess or develop resources that are valuable, rare, inimi-table, and organized. The same criteria apply to the strategic
impact of human resources:
1. People create value. People can increase value by helping lower costs, providing some- thing unique to customers, or both. Through empowerment, total quality initiatives, and continuous improvement, people at Intuit, NetApp, USAA Financial Services, and other companies add to the bottom line.
2. Talent is rare. People are a source of competitive advantage when their skills, knowledge, and abilities are not equally available to all competitors. Top companies invest in hiring and training the best and the brightest employees to gain a competitive advantage.
3. A group of well-chosen, motivated people is difficult to imitate. Competitors have difficulty matching the unique cultures of SAS, W. L. Gore, and The Container Store, which get the most from their employees.
4. People can be organized for success. People can deliver a com- petitive advantage when their talents are combined and deployed rapidly to work on new assignments at a moment’s notice, as in the effective use of teamwork and collaboration.
These four criteria highlight the importance of people and
show the close link between HRM and strategic manage-
ment. Evidence is mounting that this focus brings posi-
tive business results. For example, a study by Deloitte &
Touche associated the use of effective human resources
practices with higher valuation of a company in the stock
market. 2 Because employee skills, knowledge, and abilities
are among an organization’s most distinctive and renewable
resources, strategic management of people is more import-
ant than ever.
As more executives realize that their employees can be their
organization’s most valuable resources, human resources
managers have played a greater role in strategic planning.
HR specialists are challenged to know their organization’s
business, and line managers are challenged to excel at select-
ing and motivating the best people. As contributors to the
organization’s strategy, HR managers also face greater eth-
ical challenges. Strategy decisions require them to be able
to link decisions about staffing, benefits, and other HR mat-
ters to the organization’s business success. For example, as
members of the top management team, HR managers may
need to implement drastic downsizing while still retaining
top executives through generous salaries or bonuses, or they
may hesitate to risk aggressively investigating and challeng-
ing corrupt management practices. In the long run, however,
organizations are best served when HR leaders strongly
advocate at least four sets of values: strategic, ethical, legal,
and financial. 3
Enterprise’s approach to business is based on the expectation
that success will follow from effective human resources man-
agement. Human resources management (HRM) focuses on activities that attract, develop, and motivate people at work—
which are fundamental aspects of organizational and mana-
gerial life. Your first formal interaction with an organization
you wish to join will likely involve some aspect of its human
resources function, and throughout your career as a manager
you will be a part of, as well as be affected by, your organiza-
tion’s human resources management.
We begin this chapter by describing HRM as it relates to
strategic management. Then we discuss the “nuts and bolts” of
HRM: staffing, training, performance appraisal, rewards, and
labor relations. Throughout the chapter, we discuss legal issues
that affect each aspect of HRM.
n 1981 Pam Nicholson was a senior in college,
and graduation was looming. So when recruiters
from Enterprise Rent-A-Car appeared on campus,
she jumped at the chance to interview. For Nicholson, who
hoped to manage a small business someday, getting an offer to
work behind the counter at an Enterprise rental location seemed
ideal. Today, as chief executive officer of the $15.4 billion private
company, Nicholson is responsible for 75,000 employees in
40 countries and a fleet of 1.3 million rental vehicles. She has
been named to Fortune’s “Most Powerful Women in Business”
in each of the past six years. Industry observers might say that
Nicholson’s career success has something to do with the firm’s
formula for running a business: hire recent college grads looking
for management experience, provide training and mentoring,
promote from within, and put customers and employees first. 1
1 | STRATEGIC HUMAN RESOURCES MANAGEMENT
Human resources management plays a vital strategic role as
organizations attempt to compete through people. You already
know that firms can create a competitive advantage when they
human resources management (HRM) system of organizational activities to attract, develop, and motivate an effective and qualified workforce. Also known as talent, human capital, or personnel management
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168 PART 3 | Organizing
Tough economic times deliver exciting HR opportunities as well
as tough HR challenges. For example, companies that can hire
during a recession gain access to a huge pool of talented peo-
ple. Well-managed firms seize the opportunities and meet the
challenges.
Family Dollar Stores is one of the companies that found
opportunities during the recent recession. As shoppers
switched to dollar stores from higher-priced retailers, Family
Dollar opened more stores, receiving applications from work-
ers with better-than-usual credentials. To meet a need for
specialists for its information technology department, the com-
pany found experienced IT workers who had left Circuit City
when that chain went out of business. Companies that, like
Family Dollar, build up their staff when talented people are
hungry for work can boost sales, improve efficiency, and gain
an advantage over competitors—if they can keep and motivate
these employees. 4
Managing human capital to sustain a competitive advan-
tage may be the most important part of an organization’s HR
function. But on a day-to-day basis, HR managers have many
other concerns regarding their workers and the entire person-
nel puzzle: attracting talent; maintaining a well-trained, highly
motivated, and loyal workforce; managing diversity; devising
effective compensation systems; managing layoffs; and con-
taining health care and pension costs. The best approaches
depend on the circumstances of the organization, such as
whether it is growing, declining, or standing still.
1.1 | HR Planning Involves Three Stages
“Get me the right kind and the right number of people at the
right time.” It sounds simple enough, but meeting an organi-
zation’s staffing needs requires strategic human resources
planning—an activity with a strategic purpose derived from the
organization’s plans. The HR planning process occurs in three
stages, shown in Exhibit 8.1 :
● Southwest Airlines is known for creating a unique culture that gets the most from employees. Southwest
rewards its employees for excellent performance and maintains loyalty by offering free airfare, profit sharing,
and other incentives. What benefits would you need to stay motivated?
Traditional Thinking Managers see the HR department as being primarily concerned
with filling out paperwork, administering benefits, and
complying with laws.
Source: Adapted from S. E. Needleman and A. Loten, “When ‘Friending’ Becomes a Source of Start-up Funds,” The Wall Street Journal, November 1, 2011, p. B1.
The Best Managers Today Think of HR as a business partner within the firm who helps
align HR activities—hiring, training, and compensation— with
organizational strategy.
1. Planning —To ensure that the right number and types of people are available, HR managers must know the organization’s business plans— where the company is headed, in what businesses it plans to be, what future growth is expected, and so forth.
2. Programming —The organization i m p l e m e n t s s p e c i f i c h u m a n resources activities, such as recruit- ment, training, and pay systems.
3. E v a l u a t i n g — H u m a n r e s o u r c e s activities are evaluated to determine whether they are producing the results needed to contribute to the organization’s business plans.
In this chapter, we focus on human
resources planning and program-
ming. Many of the other factors
listed in Exhibit 8.1 are discussed in
later chapters.
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technical, financial, and customized goods and service indus-
tries. These jobs often require much more training and school-
ing than the jobs they replace. Other trends may worsen this
situation. For example, the upcoming retirement of the baby
boomer generation will remove many educated and trained
employees from the workforce. And in math, science, and
engineering graduate schools, fewer than half the students
receiving graduate degrees are American-born. To fill U.S.
jobs, companies must hire U.S. citizens or immigrants with
permission to work in the United States.
Some managers have responded to this skills shortage by
significantly increasing their remedial and training budgets. 7
Many companies have increased their labor supply by recruit-
ing workers from other countries. However, this strategy
is limited by the number of visas issued by the U.S. govern-
ment. Retraining downsized workers is yet another approach to
increasing the workforce labor pool.
Demand Forecasts Perhaps the most difficult part of HR planning is conducting demand forecasts—that is, determining how many and what type of people are needed. Demand fore-
casts are derived from organizational plans. To develop the
iPhone, Apple had to determine how many engineers and design-
ers it needed to ensure that such a complex product was ready to
launch. Managers also needed to estimate how many iPhones the
company would sell. Based on their forecast, they had to deter-
mine how many production employees would be required, along
with the staff to market the phone, handle publicity for the prod-
uct launch, and answer inquiries from customers learning how
to use the new product. Similarly, companies selling an existing
product consider current sales and projected future sales growth
as they estimate the plant capacity for future demand, the sales
force required, the support staff needed, and so forth. They calcu-
late the number of labor-hours required and then use those esti-
mates to determine the demand for specific types of workers.
Labor Supply Forecasts Along with forecasting demand, managers must forecast the supply of labor —how many and what types of employees the organization actually will
have. In performing a supply analysis, the organization esti-
mates the number and quality of its current employees and
the available external supply of workers. To estimate internal
supply, the company typically relies on its experiences with
turnover, terminations, retirements, promotions, and transfers.
A computerized human resources information system can
help considerably.
Externally, organizations look at workforce trends to make
projections. Worldwide, the highly skilled, higher-paid jobs
have been generated mostly in the cities of the industrialized
world, where companies have scrambled to find enough qual-
ified workers. At the same time, companies in industrialized
nations have used offshoring to move much of their routine and
less skilled work to nations with a large population willing to
work for lower pay. However, the resulting demand for over-
seas talent has made it difficult to fill a variety of jobs through-
out the world, from factory workers in China to engineering
positions in India. 6
In the United States, demographic trends have contrib-
uted to a shortage of skilled and highly educated workers.
Traditional labor-intensive jobs in agriculture, mining, and
assembly-line manufacturing have made way for jobs in
“When talent, capabilities, and leadership align with external expectations, organizations sustain their
competitive advantage.” 5 — Dave Ulrich , Professor (University of Michigan)
LISTEN & LEARN ONLINE
YOUNG MANAGERS
Speak Out! “ . . . It is easy to form relationships with your colleagues because you work so closely with them, but keeping in mind that a business is a business. ”
—Blair Root, Nonprofit Director
169
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170 PART 3 | Organizing
Exhibit 8.1 HR planning process
HRM environmental
scanning
Human
resources planning
Organizational strategic planning
Human
resources activities
Results
PLANNING
PROGRAMMING EVALUATING
I t takes brains to manage brawn. And that’s exactly what the cofounders of College Hunks Hauling Junk do daily. College Hunks Hauling Junk was estab- lished by high school friends Omar Soliman and Nick Friedman over sum- mer vacation from college—they needed work, so they created a company. The young men borrowed a delivery truck from Soliman’s mother’s furniture store and offered to haul away people’s unwanted junk. When they graduated, Soliman and Friedman decided to turn their project into something bigger, and College Hunks Hauling Junk hit the road.
For a fee, crew members will pick up unwanted furniture and other house- hold, construction, or office debris from individuals or businesses. The College
Hunks then recycle or donate what- ever items they can, transporting to the dump only what cannot possibly be recycled or reused. Although some skeptics point out that many towns will collect large items left curbside as part of regular trash pickup (for an added cost), so demand for College Hunks will fall off, that doesn’t seem to be happening. Home owners and small business owners seem to appre- ciate the convenience of the service as well as the knowledge that many of their items will be recycled or reused. Friedman identifies an additional reason: “We recognized that people placed a premium on having young, friendly, per- sonable, and courteous teams coming in to do the work.”
From the beginning, Soliman and Friedman envisioned a business that would expand through franchising. This requires forecasts of labor demand and supply in more than one location. It also requires the ability to select the right franchise owners
Hiring College Hunks to Haul Junk
Omar Soliman is cofounder and CEO of College
Hunks Hauling Junk.
Not limited to the United States, there is also a skills shortage in
several other countries like Brazil, Japan, India, and China. A sur-
vey of 35,000 employers in 36 countries found that 31 percent of
responding companies are having difficulty filling positions due to
lack of qualified employees. The top 10 jobs that employers are
having difficulty filling include these:
1. Skilled trades.
2. Sales representatives.
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CHAPTER 8 | Managing Human Resources 171
economies as “increasingly sophisticated pro-
duction systems require a better-trained and
more capable workforce.” 8
In contrast, earlier forecasts of an increas-
ingly diverse workforce have become fact,
adding greatly to the pool of available tal-
ent. Minorities, women, immigrants, older
and disabled workers, and other groups have
made the management of diversity a funda-
mental activity of today’s manager. Because
managing the “new workforce” is so essen-
tial, the next chapter is devoted to this topic.
Reconciling Supply and Demand Once managers can estimate the supply of and
demand for various types of employees, they
develop approaches for reconciling the two. If
organizations need more people than they cur-
rently have (a labor deficit), they can hire new
employees, promote current employees to new
positions, or outsource work to contractors.
When organizations have more people than they
need (a labor surplus), they can use attrition—
the normal turnover of employees—to reduce
the surplus if they have planned far enough
in advance. The organization also may lay off
employees or transfer them to other areas.
When managers need to hire, they can use
their organization’s compensation policy to attract talent. Large
companies spend a lot of time gathering information about pay
scales for the jobs they have available and making sure their
3. Technicians (especially production opera-
tions or maintenance).
4. Engineers.
5. Accounting and finance staff.
6. Production operators.
7. Administrative assistants, physician assis-
tants, and office support staff.
8. Management and executives.
9. Drivers.
10. Laborers.
The problem is not due to an insufficient
number of applicants, but rather a mismatch
between employer needs and applicant qual-
ifications. Employers increasingly want
applicants to have combinations of skills as
opposed to just technical skills. For exam-
ple, an employer may hire only salespeople
who can also be team leaders and trainers of
other salespeople. Or a firm may reject sev-
eral candidates for an HR position because
even though the applicants have the required
technical training in staffing, legal compli-
ance, and compensation, they may lack other
important skills like critical thinking and
knowing how to align HR initiatives with the
company’s business strategy.
There are no easy solutions to this problem of not having the
right people in the right place at the right time. It’s a long-term
and complex problem that is affecting developed and emerging
to manage these franchises, including the junk-hauling hunks themselves. New fran- chise owners are put through a five-day training program at “Junk University.” They learn every facet of the business, ranging from recruiting and hiring a work- force to management, sales, and market- ing. Franchisees tend to recruit their junk haulers from nearby colleges. And while employees don’t need to look like male run- way models, they are required to be well groomed, with no visible piercings or tat- toos. Female “hunkettes” are beginning to make their way from the corporate offices onto the trucks as well.
To date, the company has sold nearly 47 franchises that operate bright green and orange trucks in towns across the United States. The business made $12.3 million in
• What factors might affect the demand for the services provided by College Hunks Hauling Junk? How might indi- vidual franchise owners deal with fluc- tuations in labor demand?
• The labor supply for College Hunks Hauling Junk is mainly college students. What are some risks and benefits of relying on college students as a work- force? How should this source of labor affect the ways that franchise owners recruit, select, and train workers?
SOURCES: Company website, www.1800junkusa.com ; 2013 Inc. 5000 List, Inc. (online), www.inc.com , accessed May 15, 2014; S. E. Needleman, “How I Built It: ‘Hunks’ Take Summer Gig, Turn It into Real Business,” The Wall Street Journal, September 15, 2011, p. B8; L. Gerdes, “Creative Career of the Week: College Hunks Hauling Junk,” BusinessWeek, May 11, 2009, www.businessweek.com ; L. Rosellini, “Dreamers: Hunks of Junk,” Reader’s Digest, April 2009, www.rd.com ; D. Gill, “Hauling Junk (with a Touch of Class),” The New York Times, October 1, 2008, www.nytimes.com ; and J. Leiser, “ College Hunks Hauling Junk Relocates to Tampa Bay,” Tampa Bay Business Journal, March 21, 2008, http://tampabay.bizjournals.com .
Discussion Questions
2012, which was about 360 percent more than in 2009. What’s next? “We grew super, super fast,” notes CEO Omar Soliman.
“Now we’re playing catch-up, getting all the systems in place so everything works smoother.”
● LinkedIn, the popular online professional
networking site, has approximately 300
million members in over 200 countries.
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172 PART 3 | Organizing
compensation systems are fair
and competitive. We discuss
pay issues later in this chapter.
Job Analysis Although issues of supply and demand are con- ducted at an organizational level, HR planning also focuses on
individual jobs, using job analysis. Job analysis does two things: 9
1. A job description tells about the job itself—the essential tasks, duties, and responsibilities involved in performing the job. The job description for an accounting manager might specify that the posi- tion will be responsible for monthly, quarterly, and annual financial reports, getting bills issued and paid, preparing budgets, ensuring the company’s compliance with laws and regulations, working closely with line managers on financial issues, and supervising an accounting department of 12 people.
2. A job specification describes the knowledge, skills, abilities, and other characteristics (KSAOs) needed to perform the job. For an assistant manager at a retail store like Best Buy or Old Navy, the job requirements might include a degree in management, moti- vational skills, knowledge of customer service, retail managerial experience, and excellent communication skills.
Job analysis provides the information required by virtually
every human resources activity. It assists with the essential
HR programs: recruitment, training, selection, appraisal,
and reward systems. It may also help organizations defend
themselves in lawsuits involving employment practices—for
example, by clearly specifying what a job requires if some-
one claims unfair dismissal. 10
Ultimately, job analysis helps
increase the value added by employees to the organization
because it clarifies what is required to perform effectively.
LO2 Give reasons why companies recruit both internally and externally for new hires
organization may find they don’t like working there. Also, the
opportunity to move up within the organization may encourage
employees to remain with the company, work hard, and suc-
ceed. Recruiting from outside the company can be demoralizing
to employees. Many companies, such as FedEx and National
Instruments, prefer internal to external recruiting for these reasons.
Internal staffing has some drawbacks. If employees lack
skills or talent, it yields a limited applicant pool, leading to
poor selection decisions. Also, an internal recruitment policy
can inhibit a company that wants to change the nature or goals
of the business by bringing in outside candidates. In chang-
ing from a rapidly growing, entrepreneurial organization to a
mature business with more stable growth, Dell went outside the
organization to hire managers who better fit those needs.
Many companies that rely heavily on internal recruiting use
a job-posting system to advertise open positions. Shell Oil and AT&T use job posting. Employees complete a request form indi-
cating interest in a posted job. The posted job description includes
a list of duties and the minimum skills and experience required.
External Recruiting External recruiting brings in “new blood” and can inspire innovation. Among the most frequently
used sources of outside applicants are Internet job boards, com-
pany websites, employee referrals, newspaper advertisements,
and college campus recruiting.
Recent surveys suggest that employers place the greatest
emphasis on referrals by current employees and online job
boards. 12
Some companies actively encourage employees to
refer their friends by offering cash rewards. In fact, surveys
show that word-of-mouth recommendations are the way most
job positions get filled. Not only is this method relatively inex-
pensive, but employees also tend to know who will be a good
fit with the company.
Web job boards such as CareerBuilder, Monster,
CollegeRecruiter, SimplyHired, and Mashable Jobs have
exploded in popularity as a job recruitment tool because
they easily reach a large pool of job seekers. They have
largely supplanted newspaper want ads, although print
recruiting has grown somewhat, partly as a result of form-
ing alliances with the job boards. Most companies also let
people apply for jobs at their corporate website, and many
even list open positions. Some companies also are buying
search engine ads to display next to the results for rele-
vant terms such as nurse. Another online tool is to obtain leads through networking sites such as LinkedIn, Twitter,
Facebook, and Craigslist.
Employment agencies are another common recruitment
tool, and for important management positions, companies
often use specialized executive search firms. Campus recruit-
ing can be helpful for companies looking for applicants who
have up-to-date training and innovative ideas. However, com-
panies that rely heavily on campus recruiting and employee
referrals must take extra care to ensure that these methods do
not discriminate by generating pools of applicants who are,
say, mostly women or primarily white. 13
job analysis a tool for determining what is done on a given job and what should be done on that job
2 | STAFFING THE ORGANIZATION
Once HR planning is completed, managers can focus on staff-
ing the organization. The staffing function consists of three
related activities: recruitment, selection, and outplacement.
2.1 | Recruitment Helps Find Job Candidates
Recruitment activities increase the pool of candidates that might be selected for a job. Recruitment may be internal to the organiza-
tion (considering current employees for promotions and transfers)
or external. Each approach has advantages and disadvantages. 11
Internal Recruiting The advantages of internal recruiting are that employers know their employees, and employees know their
organization. External candidates who are unfamiliar with the
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CHAPTER 8 | Managing Human Resources 173
of thousands of U.S. troops have
recently returned home from Iraq
and Afghanistan. Many of these
men and women will be leaving the
military and rejoining the civilian
workforce. To help these veterans,
JPMorgan Chase, with the involve-
ment of 11 other companies, com-
mitted to hire or help find jobs for
100,000 military members. Having
surpassed that goal, the mis-
sion has been expanded to place
200,000 veterans by 2020. Known
as the “100,000 Jobs Mission,”
a website ( http://100000jobsmis-
sion.com ) was launched to help
transitioning military members
match their military expertise to
job openings. Also, the participat-
ing companies have hired many
of these veterans themselves; they
have agreed to share best practices
and hiring/retention statistics. 14
Most companies use some combination of the methods we
have been discussing, depending on the particular job or sit-
uation. For example, they might use internal recruiting for
existing jobs that need replacements, and external recruiting
when the firm is expanding or needs to acquire some new
skill.
Some organizations go beyond the call of duty to help certain
groups of people find gainful employment. Finding jobs for veter-
ans is an important goal given that the unemployment rate among
veterans who have served since 2001 is higher than that of the
general population. In the next year or two, the number of veter-
ans seeking civilian positions is likely to increase given that tens
● A U.S. Army soldier attends the Hiring our Heroes job fair in New York. It was started by the U.S. Chamber
of Commerce to help service members, veterans, and military spouses obtain information on veteran benefits,
employment, or upgrade their current job situations. There have been 610 fairs across the 50 states since program
started in 2011.
According to a recent survey, 15 U.S. employees would leave their current organizations for the following five reasons (in descending order of importance):
1. Work-related stress is too high. 2. Base pay is too low. 3. Promotion opportunity is available in another
organization. 4. Trust/confidence in management is lacking. 5. Incentive pay opportunity is offered in another
organization.
Did You Know?
recruitment the development of a pool of applicants for jobs in an organization
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174 PART 3 | Organizing
In a structured interview, the interviewer conducts the same interview with each applicant. There are two basic types
of structured interview:
1. The situational interview focuses on hypothetical situations. Zale Corporation, a major jewelry chain, uses this type of inter- view to select sales clerks. Here is sample question: “A cus- tomer comes into the store to pick up a watch he had left for repair. The watch is not back yet from the repair shop, and the customer becomes angry. How would you handle the situation?” Answering “I would refer the customer to my supervisor” might suggest that the applicant felt incapable of handling the situa- tion independently.
2. The behavioral description interview explores what candidates have actually done in the past. In selecting accountants, Bill Bufe of Plante & Moran asks candidates how they handled a difficult person they have worked with, and Art King asks how candi- dates have handled a stressful situation because he believes this shows how candidates “think on their feet.” 17 Because behav- ioral questions are based on real events, they often provide use- ful information about how the candidate will actually perform on the job.
Each of these interview techniques offers different advantages
and disadvantages, and many interviewers use more than one
technique during the same interview. Unstructured interviews
can help establish rapport and provide a sense of the applicant’s
personality, but they may not generate specific information
about the candidate’s ability. Structured interviews tend to be
more reliable predictors of job performance because they are
based on the job analysis that has been done for the position.
They are also more likely to be free of bias and stereotypes.
And because the same questions are being asked of all can-
didates for the job, an interview that is at least partly struc-
tured allows the manager to compare responses across different
candidates. 18
Reference Checks Résumés, applications, and interviews rely on the applicant’s honesty. To make an accurate selection
decision, employers have to be able to trust the words of each
candidate. Unfortunately some candidates may exaggerate their
qualifications or hide criminal backgrounds that could pose a
risk to the employer. In a highly publicized incident, the dean
of admissions at the Massachusetts Institute of Technology
resigned after nearly three decades on the job because the
school learned she had provided false information about her
educational background. 19
She had demonstrated an ability to
perform the job functions but could no longer claim the level
of integrity required by that position. Once lost, a reputation is
hard to regain.
Because these and more ambiguous ethical gray areas
arise, employers supplement candidate-provided information
with other screening devices, including reference checks. Virtually all organizations contact references or former
employers and educational institutions listed by candidates
LO3 Understand various methods for selecting new employees and HR-related laws
3 | SELECTION CHOOSES APPLICANTS TO HIRE
Selection builds on recruiting and involves decisions about whom to hire. As important as these decisions are, they are at
times made carelessly or quickly.
3.1 | Selection Methods To help you in your own career, we describe a number of selec-
tion instruments you may encounter.
Applications and Résumés Application blanks and résumés provide basic information that help prospective employers
make a first cut through candidates. Applications and résumés
typically include the applicant’s name, educational back-
ground, citizenship, work experiences, certifications, and the
like. Their appearance and accuracy also say something about
the applicant—spelling mistakes, for example, almost always
disqualify you immediately. While providing important infor-
mation, applications and résumés tend not to be useful as a basis
for final selection decisions.
Interviews The most popular selection tool is inter- viewing, and every company uses some type of interview.
Employment interviewers must be careful about what they
ask and how they ask it. As we will explain later, federal
law requires employers to avoid discriminating on criteria
such as sex and race; questions that distinguish candidates
according to protected categories may be seen as evidence of
discrimination.
In an unstructured (or nondirective) interview, the inter- viewer asks different interviewees different questions. The
interviewer may also use probes—that is, ask follow-up ques-
tions to learn more about the candidate. 16
selection choosing from among qualified applicants to hire into an organization
structured interview selection technique that involves asking all applicants the same questions and comparing their responses to a standardized set of answers
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CHAPTER 8 | Managing Human Resources 175
candidates. 21
Such searches
can turn up a variety of infor-
mation, including what people
have written on blogs or posted
under their name on Twitter,
LinkedIn, or Facebook. Internet
users are advised to remember
that anything carrying their
name online may become infor-
mation for potential employ-
ers, even years down the road.
ChoicePoint, a 4,200-employee
company specializes in con-
ducting background checks,
sells a preemployment self-
check to job seekers who want
to see what prospective employ-
ers will learn about them. The cost of this service is between
$25 and $75. 22
Personality Tests Employers have been hesitant to use personality tests for employee selection, largely because they
are hard to defend in court. 23
Some personality types have
been associated with greater job satisfaction and perfor-
mance, especially where the organization can build groups of
people with similar positive traits. 24
As a result, personal-
ity tests are regaining popularity, and at some point in your
career you will probably complete some personality tests. A
number of well-known paper-and-pencil inventories measure
personality traits such as sociability, adjustment, and energy.
Typical questions are “Do you like to socialize with people?”
and “Do you enjoy working hard?” Some personality tests try
to determine the type of working conditions that the candidate
prefers, to see if he or she
would be motivated and pro-
ductive in the particular job.
For example, if the candidate
prefers making decisions on
his or her own but the job
requires gaining the coopera-
tion of others, another candi-
date might be a better fit.
Drug Testing Drug testing is now a frequently used screening
instrument. Since the passage
of the Drug-Free Workplace
Act of 1988, applicants and
employees of federal contrac-
tors and Department of Defense
con tractors and those under
Department of Transportation
regulations have been subject to
to at least confirm dates of employment (or attendance),
positions held, and job duties performed. Although checking
references makes sense, reference information is becoming
increasingly difficult to obtain as a result of several highly
publicized lawsuits. In one case, an applicant sued a former
boss on the grounds that the boss told prospective employers
the applicant was a “thief and a crook.” The jury awarded the
applicant $80,000. 20
Still, talking to an applicant’s previous
supervisor is a common practice and often does provide use-
ful information, particularly if specific job-related questions
are asked (“Can you give me an example of a project candi-
date X handled particularly well?”).
Background Checks For a higher level of scrutiny, background investigations also have become standard procedure at many com-
panies. Some state courts have ruled that companies can be held
liable for negligent hiring if they
fail to do adequate background
checks. Types of checks include
Social Security verification,
past employment and educa-
tion ver ification, and a criminal
records check. A number of
other checks can be conducted
if they pertain to the specific
job, including a motor vehicle
record check (for jobs involving
driving) and a credit check (for
money- handling jobs).
Internet tools have made
basic background checks fast
and easy. A recent survey of
executive recruiters learned
that more than three-quar-
ters use search engines such
as Google to find out about
Percentage of respondents who say the selection method is effective or very effective:
Employee referral programs
Job boards
Print ads
0 20 40 60 80 100
75%
50%
42%
● When based on a job analysis, structured interviews tend to be more
reliable predictors of job performance than are unstructured interviews.
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176 PART 3 | Organizing
clerical positions. The most widely used performance test is the
typing test. However, performance tests have been developed
for almost every occupation, including manage rial positions.
Assessment centers are the most notable offshoot of the
managerial performance test. 26
A typical assessment center consists of 10 to 12 candidates who participate in a variety of
exercises or situations; some of the exercises involve group
interactions, and others are performed individually. Each exer-
cise taps a number of critical managerial dimensions, such as
leadership, decision-making skills, and communication abil-
ity. Assessors, generally line managers from the organization,
observe and record information about the candidates’ perfor-
mance in each exercise.
Integrity Tests To assess job candidates’ honesty, employers may administer integrity tests. Polygraphs, or lie detector tests,
testing for illegal drugs. Well
over half of all U.S. companies
conduct preemployment drug
tests.
Cognitive Ability Tests Among the oldest employment selection devices are cognitive ability tests. These tests measure
a range of intellectual abilities, including verbal comprehension
(vocabulary, reading) and numerical aptitude (mathematical
calculations). About 20 percent of U.S. companies use cog-
nitive ability tests for selection purposes. 25
Exhibit 8.2 shows
some examples of cognitive ability test questions.
Performance Tests In a performance test, the test taker performs a sample of the job. Most companies use some type
of performance test, typically for administrative assistant and
Source: G. Bohlander, S. Snell, and A. Sherman, Managing Human Resources, 12th ed. © 2001. Reprinted with permission of South- Western, a part of Cengage Learning, Inc. Reproduced by permission. www.cengage.com/permissions.
Verbal 1. What is the meaning of the word surreptitious? a. covert c. lively
b. winding d. sweet
2. How is the noun clause used in the following sentence:
“I hope that I can learn this game.”
a. subject c. direct object
b. predicate nominative d. object of the preposition
Quantitative 3. Divide 50 by .5 and add 5. What is the result? a. 25 c. 95
b. 30 d. 105
4. What is the value of 1442?
a. 12 c. 288
b. 72 d. 20736
Reasoning 5. ———— is to boat as snow is to ———— a. sail, ski c. water, ski
b. water, winter d. engine, water
6. Two women played 5 games of chess. Each woman won the same
number of games, yet there were no ties. How can this be so?
a. There was a forfeit. c. They played different people.
b. One player cheated. d. One game was still in progress.
Mechanical 7. If gear A and gear C are both turning counterclockwise, what is happening to gear B?
a. It is turning counterclockwise. c. It remains stationary.
b. It is turning clockwise. d. The whole system will jam.
Answers: 1a, 2c, 3d, 4d, 5c, 6c, 7b.
A B C
Exhibit 8.2 Sample measures of cognitive ability
assessment center a managerial performance test in which candidates participate in a variety of exercises and situations
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CHAPTER 8 | Managing Human Resources 177
itself perfectly predicts per-
formance. Managers usually
consider other criteria before
making a final selection.
Content validity concerns the degree to which selection
tests measure a representa-
tive sample of the knowledge,
skills, and abilities required for
the job. The best-known exam-
ple of a content-valid test is a
keyboarding test for adminis-
trative assistants because key-
boarding is a task a person in that position almost always
performs. However, to be completely content-valid, the
selection process also should measure other skills the assis-
tant would likely perform, such as answering the telephone,
duplicating and faxing documents, and dealing with the pub-
lic. Content validity is more subjective (less statistical) than
evaluations of criterion-related validity but is no less import-
ant, particularly when an organization is defending employ-
ment decisions in court.
3.3 | Sometimes Employees Must Be Let Go
Unfortunately staffing decisions do not simply focus on hir-
ing employees. As organizations evolve and markets change,
the demand for certain employees rises and falls. Also, some
employees simply do not perform at the level required. For
these reasons, managers sometimes must make difficult deci-
sions to terminate their employment.
Layoffs As a result of the massive restructuring of American industry, many organizations have been downsizing — laying off large numbers of managerial and other employees.
Dismissing any employee is tough, but when a company lays
off a substantial portion of its workforce, the results can rock
the foundations of the organization. 29
The victims of restructur-
ing face all the difficulties of being let go—loss of self-esteem,
demoralizing job searches, and the stigma of being out of work.
Employers can help by offering outplacement, the process of helping people who have been dismissed from the company to
regain employment elsewhere. Even then, the impact of layoffs
goes further than the employees who leave. Many who remain
will experience disenchantment, distrust, and lethargy. The
way management deals with dismissals affects the productivity
and satisfaction of those who remain. A well-thought-out dis-
missal process eases tensions and helps remaining employees
adjust to the new work situation.
Organizations with strong performance evaluation systems
benefit because the survivors are less likely to believe the deci-
sion was arbitrary. In addition, if laid-off workers are offered
severance pay and help in finding a new job, remaining work-
ers will be comforted. Companies also should avoid stringing
out layoffs by dismissing a few workers at a time.
have been banned for most employment purposes. 27
Paper-and-
pencil honesty tests are more recent instruments for measur-
ing individuals’ propensity to engage in dishonesty or other
counterproductive behaviors at work. The tests include ques-
tions such as whether a person has ever thought about stealing
and whether he or she believes other people steal. Although
companies including Payless ShoeSource reported that losses
due to theft declined following the introduction of integrity
tests, the accuracy of these tests is still debatable. 28
3.2 | Both Reliability and Validity Are Important
A good selection technique, like a structured interview or
assessment center, needs to be consistent and accurate. The
basic objective of achieving competitive advantage through
human capital can be compromised if the reliability and valid-
ity of the firm’s selection techniques are in doubt. The first step
is to understand the difference between these two concepts:
1. Reliability refers to the consistency of test scores over time and across alternative measurements. For example, if three different interviewers talked to the same job candidate but drew very dif- ferent conclusions about the candidate’s abilities, there could be problems with the reliability of one or more of the selection tests or interview procedures.
2. Validity moves beyond reliability to assess the accuracy of the selection test.
Criterion-related validity refers to the degree to which a test actually predicts or correlates with job performance. Such
validity is usually established through studies comparing test
performance and job performance for a large enough sample of
employees to enable a fair conclusion to be reached. For exam-
ple, if a high score on a cognitive ability test strongly predicts
good job performance, then candidates who score well will
tend to be preferred over those who do not. Still, no test by
“Productivity requires sufficient sleep” Do you ever feel like you have too much on your plate? Between school, work, volunteer/community activities, and social/family life, you may not be getting enough sleep. Another factor that may negatively affect your sleep is consuming caf- feinated drinks in the late afternoon or evening. What’s the bot- tom line? Getting sufficient sleep on a regular basis can help you study more efficiently and possibly earn higher grades in your courses.
study tip 8
reliability the consistency of test scores over time and across alternative measurements
validity the degree to which a selection test predicts or correlates with job performance
outplacement the process of helping people who have been dismissed from the company to regain employment elsewhere
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178 PART 3 | Organizing
the employee that this is the “last straw.” Arbitrators are more
likely to side with an employer that fires someone when they
believe the company has made sincere efforts to help the per-
son correct his or her behavior.
The termination interview, in which the manager dis- cusses the company’s termination decision with the employee,
is stressful for both parties. Most experts believe that the
immediate superior should be the one to deliver the bad news
to employees. However, it is wise to have a third party, such
as an HR manager, present for guidance and note-taking.
Because announcing a termination is likely to upset the
employee and occasionally leads to a lawsuit, the manager
should prepare carefully. Preparation should include learn-
ing the facts of the situation and reviewing any documents to
make sure they are consistent with the reason for the termi-
nation. During the termination interview, ethics and common
sense dictate that the manager should be truthful but respect-
ful, stating the facts and avoiding arguments. Exhibit 8.3 pro-
vides some additional practical guidelines for conducting a
termination interview: 32
3.4 | Legal Issues and Equal Employment Opportunity
Many laws have been passed governing employment decisions
and practices. They will directly affect a good part of your
day-to-day work as a manager, as well as the human resource
function of your organization. It is important for managers to
be familiar with Equal Employment Opportunity laws in order
to follow best practices and avoid the negative consequences
of noncompliance. In 2012, there were nearly 100,000 charges
of illegal discrimination filed with the U.S. government, cost-
ing employers $365.4 million in settlement costs. In 2013, the
government filed charges against Dollar General and BMW for
“allegedly implementing and utilizing a criminal background
Termination People some- times “get fired” for poor
performance or other reasons.
Should an employer have the
right to fire a worker? In 1884
a Tennessee court ruled “All
may dismiss their employ-
ee(s) at will for good cause,
for no cause, or even for cause
morally wrong.” The concept that an employee may be fired
for any reason is known as employment-at-will or termina- tion-at-will and was upheld in a 1908 Supreme Court ruling. 30 The logic is that if the employee may quit at any time, the
employer is free to dismiss at any time.
Since the mid-1970s, courts in most states have made
exceptions to this doctrine based on public policy—a policy
or ruling designed to protect the public from harm. Under the
public policy exception, employees cannot be fired for such
actions as refusing to break the law, taking time off for jury
duty, or “whistle-blowing” to report illegal company behav-
ior. So if a worker reports an environmental violation to the
regulatory agency and the company fires him or her, the courts
may argue that the firing was unfair because the employee
acted for the good of the community. Another major excep-
tion is union contracts that limit an employer’s ability to fire
without cause.
Employers can avoid the pitfalls associated with dismissal
by developing progressive and positive disciplinary proce-
dures. 31
Progressive means the manager takes graduated steps
in trying to correct a workplace behavior. For example, an
employee who has been absent receives a verbal reprimand
for the first offense, and a written reprimand for the second
offense. A third offense results in counseling and probation,
and a fourth results in a paid-leave day to think over the con-
sequences of future infractions. The employer is signaling to
Do give as much warning as possible for mass layoffs.
Do sit down one-on-one with the individual, in a private office.
Do complete a termination session within 15 minutes.
Do provide written explanations of severance benefits.
Do provide outplacement services away from company headquarters.
Do be sure the employee hears about the termination from a manager, not a colleague.
Do express appreciation for what the employee has contributed, if appropriate.
Don’t leave room for confusion when firing. Tell the individual in the first sentence that he or she is terminated.
Don’t allow time for debate during a termination session.
Don’t make personal comments when firing someone; keep the conversation professional.
Don’t rush a fired employee off site unless security is an issue.
Don’t fire people on significant dates, like the 25th anniversary of their employment or the day their mother died.
Don’t fire employees when they are on vacation or have just returned.
Exhibit 8.3 Practical guidelines for conducting a termination interview
employment-at- will the legal concept that an employee may be terminated for any reason
termination interview a discussion between a manager and an employee about the employee’s dismissal
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CHAPTER 8 | Managing Human Resources 179
hiring, discharge, promotion, compensation, and access to
training. 34
Title VII also prohibits a specific form of discrim-
ination, sexual harassment, which refers to “unwelcome sex- ual advances, requests for favors, and other verbal or physical
conduct of a sexual nature” that impacts an individual’s
employment, interferes with work performance, or creates a
hostile work environment. 35
The Americans with Disabilities Act prohibits employment discrimination against people with disabilities. Recovering alcoholics and drug abusers, cancer
patients in remission, and AIDS patients are covered by this
legislation. The 1991 Civil Rights Act strengthened all these protections and permitted punitive damages to be imposed
on companies that violate them. The Age Discrimination in Employment Act of 1967 and its amendments in 1978 and 1986 prohibit discrimination against people age 40 and over.
One reason for this legislation was the practice of dismissing
older workers to replace them with younger workers earning
lower pay.
policy that results in employees being fired and others being
screened out for employment.” 33
Exhibit 8.4 summarizes many
of these major employment laws.
The 1938 Fair Labor Standards Act (FLSA), among other provisions, creates two employee categories: exempt and non-
exempt. Employees are normally exempt from overtime pay if
they have considerable discretion in how they carry out their
jobs and if their jobs require them to exercise independent
judgment. Managers usually fall in this category. Nonexempt
employees are usually paid by the hour and must be paid over-
time if they work more than 40 hours in a week. As a manager
you will almost certainly need to specify the exempt or nonex-
empt status of anyone you hire.
Laws aimed at protecting employees from discrimination
include the 1964 Civil Rights Act, which prohibits discrim- ination in employment based on race, sex, color, national
origin, and religion. Title VII of the act specifically forbids
discrimination in such employment practices as recruitment,
Act Major Provisions Enforcement and Remedies
Fair Labor Standards Act (1938) Creates exempt (salaried) and nonexempt (hourly) employee categories, governing overtime and other rules; sets minimum wage, child labor laws.
Enforced by Department of Labor, private action to recover lost wages; civil and criminal penalties also possible.
Equal Pay Act (1963) Prohibits gender-based pay discrimination between two jobs substantially similar in skill, effort, responsibility, and working conditions.
Fines up to $10,000, imprisonment up to 6 months, or both; enforced by Equal Employment Opportunity Commission (EEOC); private actions for double damages up to 3 years’ wages, liquidated damages, reinstatement, or promotion.
Title VII of Civil Rights Act (1964) Prohibits discrimination based on race, sex, color, religion, or national origin in employment decisions: hiring, pay, working conditions, promotion, discipline, or discharge.
Enforced by EEOC; private actions, back pay, front pay, reinstatement, restoration of seniority and pension benefits, attorneys’ fees and costs.
Executive Orders 11246 and 11375 (1965)
Requires equal opportunity clauses in federal contracts; prohibits employment discrimination by federal contractors based on race, color, religion, sex, or national origin.
Established Office of Federal Contract Compliance Programs (OFCCP) to investigate violations; empowered to terminate violator’s federal contracts.
Age Discrimination in Employment Act (1967)
Prohibits employment discrimination based on age for persons over 40 years; restricts mandatory retirement.
EEOC enforcement; private actions for reinstatement, back pay, front pay, restoration of seniority and pension benefits; double unpaid wages for willful violations; attorneys’ fees and costs.
Vocational Rehabilitation Act (1973)
Requires affirmative action by all federal contractors for persons with disabilities; defines disabilities as physical or mental impairments that substantially limit life activities.
Federal contractors must consider hiring disabled persons capable of performance after reasonable accommodations.
Americans with Disabilities Act (1990)
Extends affirmative action provisions of Vocational Rehabilitation Act to private employers; requires workplace modifications to facilitate disabled employees; prohibits discrimination against disabled.
EEOC enforcement; private actions for Title VII remedies.
Civil Rights Act (1991) Clarifies Title VII requirements: disparate treatment impact suits, business necessity, job relatedness; shifts burden of proof to employer; permits punitive damages and jury trials.
Punitive damages limited to sliding scale only in intentional discrimination based on sex, religion, and disabilities.
Family and Medical Leave Act (1991)
Requires 12 weeks’ unpaid leave for medical or family needs: paternity, maternity, family member illness.
Private actions for lost wages and other expenses, reinstatement.
Exhibit 8.4 U.S. equal employment laws
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180 PART 3 | Organizing
Another law that affects staffing practices is the Worker Adjustment and Retraining Notification Act of 1989, commonly known as the WARN Act or Plant Closing Bill. It requires covered employers to give affected employees 60 days’ written notice of
plant closings or mass layoffs.
One common reason why employers are sued for discrimi-
nation is adverse impact —when a seemingly neutral employ- ment practice has a disproportionately negative effect on a group
protected by the Civil Rights Act. 36
For example, if equal num-
bers of qualified men and women apply for jobs but a particular
employment test results in far fewer women being hired, the test
may be considered to cause an adverse impact, making it sub-
ject to challenge on that basis. For example, 1.5 million current
and former female employees from Walmart pressed a class
action lawsuit against the retailer, claiming that it has a discrim-
inatory pay and promotion policy against women. In 2011 the
U.S. Supreme Court (in a split decision) rejected this class action
lawsuit. 37
Because of the importance of these issues, many companies
have established procedures to ensure compliance with labor
and equal opportunity laws. For example, they may monitor and
compare salaries by race, gender, length of service, and other
categories to make sure employees across all groups are being
fairly paid. Written policies can also help ensure fair and legal
practices in the workplace, although the company may also have
to demonstrate a record of actually following those procedures
and making sure they are implemented. In this sense, effective
management practices not only help managers motivate employ-
ees to do their best work but often help provide legal protection
as well. For example, managers who give their employees regu-
lar, specific evaluations can prevent misunderstandings that lead
to lawsuits. A written record of those evaluations is often useful
in demonstrating fair and objective treatment.
● Walmart employee Betty Dukes was the first “named plaintiff” in the Dukes v.
Walmart case. Approximately 1.5 million current and former female employees of
the giant retailer filed the largest gender bias class action lawsuit in U.S. history.
Exhibit 8.5 Percentage of companies increasing spending on training areas in 2014
Source: Adapted from “2013 Training Industry Report,” Training (online), November/December 2013, www.trainingmag.com.
29%
22%
21%
20%
20%
19%
18%
16%
%%
%%
%
%%
%
%%
%
%%
%
%%
%%
%
%
Management/supervisory
Onboarding
Sales training
Interpersonal skills (e.g., communication and teamwork)
Customer service
IT/Systems (e.g., enterprise software)
Mandatory or compliance
Executive development
LO4 Evaluate the importance of spending on training and development
4 | TRAINING AND DEVELOPMENT
Today’s competitive environment requires managers to upgrade
the skills and performance of employees—and themselves.
Continual improvement increases both personal and organi-
zational effectiveness. It makes organization members more
useful in their current job and prepares them for new respon-
sibilities. And it helps the entire organization handle new chal-
lenges and take advantage of new methods and technologies.
These training and development activities are supported by
appraising employees’ performance and giving them effective
feedback, as we will discuss in the next section.
U.S. businesses spend more than $60 billion to provide
their employees with formal training annually. As shown in
Exhibit 8.5 , the greatest increase in training expenditures has
been in management/supervisory, onboarding, and sales train-
ing. 38
But competitive pressures require that companies consider
the most efficient training methods. That means traditional class-
room settings are often giving way to computerized methods.
4.1 | Training Programs Include Four Phases
Although we use the general term training here, training some- times is distinguished from development. Training usually
adverse impact when a seemingly neutral employment practice has a disproportionately negative effect on a protected group
training teaching lower-level employees how to perform their present jobs
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CHAPTER 8 | Managing Human Resources 181
across many organizations. Orientation training familiarizes new employees with their jobs, work units, and the organiza-
tion in general. Done well, orientation training can increase
morale and productivity and can lower employee turnover and
the costs of recruiting and training.
Team training teaches employees the skills they need to work together and helps them interact. After General Mills
acquired Pillsbury, it used a team training program called
Brand Champions to combine the marketing expertise of the
two companies and share knowledge among employees han-
dling various functions such as sales and research and devel-
opment. Most of the time, trainees engaged in team exercises
to analyze brands, target customers, and develop marketing
messages. 41
Diversity training focuses on building awareness of diver- sity issues and providing the skills employees need to work
with others who are different from them. Managing diversity is
discussed in the next chapter.
As today’s decentralized and leaner organizations have put
more demands on managers, management training programs have become widespread. Such programs often seek to improve
managers’ people skills —their ability to delegate effectively, motivate their subordinates, and communicate and inspire oth-
ers to achieve organization goals. Coaching —being trained by a superior—is usually the most effective and direct management
development tool. Managers may also participate in training
programs that are used for all employees, such as job rotation, or
attend seminars and courses specifically designed to help them
improve supervisory skills or prepare for future promotion.
NetApp, a data management company based in Sunnyvale,
California, has an engaging approach to management training.
The company hired BTS Group to develop a simulation game,
modeled on NetApp’s real-life business. NetApp first used the
simulation at a strategy meeting of its top managers. The execu-
tives were so enthusiastic and creative about solving the simula-
tion problem that the company invited middle managers to play
the game as training for top posts, where strategic thinking is
essential.
In the simulation, the managers were divided into five teams,
bringing together managers from various functions. Each team
was told to run an imaginary high-growth company named
Pet-a-Toaster for three years, competing against the other teams.
A year’s worth of events were packed into each day of the train-
ing program. Each team received a booklet with details about
Pet-a-Toaster, based on the market conditions actually facing
refers to teaching lower-level employees how to perform their
present jobs, whereas development involves teaching manag- ers and professional employees broader skills needed for their
present and future jobs.
Phase one of training usually starts with a needs assessment. Managers conduct an analysis to identify the jobs, people, and
departments for which training is necessary. Job analysis and
performance measurements are useful for this purpose.
Phase two involves the design of training programs. Training objectives and content are established from the needs
assessment. For example, Recreational Equipment Inc. (REI)
wants its sales associates to learn how to tell whether they are
being approached by a “transactional customer,” who simply
wants to find and pay for a specific product, or a “consultative
customer,” who wants to spend some time discussing alterna-
tive features and benefits. 39
Phase three involves decisions about the training methods and location—whether the training will be provided on or off
the job. Common training methods include lectures, role-play-
ing, business simulation, behavior modeling (watching a video
and imitating what is observed), conferences, vestibule train-
ing (practicing in a simulated job environment), and appren-
ticeships. Another popular method is job rotation, or assigning
employees to different jobs in the organization to broaden their
experience and improve their skills. Smart managers often
request assignment to jobs where they can be challenged and
their skills broadened. The training method should be suited to
the objectives defined in phase two. At REI, where the company
wants sales associates to identify and respond to various inter-
personal situations, much of the training involves role-play-
ing, supplemented with video presentations. And Home Depot
emphasizes mentoring for sales associates who work the aisles
but has a more efficient computer-based training program for
the cashiers, whose jobs are more routine. 40
Finally, phase four of training should evaluate the program’s effectiveness. Measures of effectiveness include employee
reactions (surveys), learning (tests), improved behavior on the
job, and bottom-line results (e.g., an increase in sales or reduc-
tion in defect rates following the training program).
4.2 | Training Options Achieve Many Objectives
Companies invest in training to enhance individual perfor-
mance and organizational productivity. Programs to improve
an employee’s computer, technical, or communication skills
are common, and some types of training have become standard
development teaching managers and professional employees broad skills needed for their present and future jobs
needs assessment an analysis identifying the jobs, people, and departments for which training is necessary
orientation training training designed to introduce new employees to the company and familiarize them with policies, procedures, culture, and the like
team training training that provides employees with the skills and perspectives they need to collaborate with others
diversity training programs that focus on identifying and reducing hidden biases against people with differences and developing the skills needed to manage a diversified workforce
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182 PART 3 | Organizing
attitude). Trait scales are common because they are simple to
use and provide a standard measure for all employees. But they
are often not valid as performance measures. Because they
tend to be ambiguous as well as highly subjective—does the
employee really have a bad attitude, or is he or she just shy?—
they often lead to personal bias and may not be suitable for
providing useful feedback.
Behavioral appraisals, while still subjective, focus on observable aspects of performance. They use scales describ-
ing specific, prescribed behaviors, which can help ensure that
all parties understand what the ratings are really measuring.
Because they are less ambiguous, they also can provide use-
ful feedback. Exhibit 8.6 shows an example of a behaviorally
anchored rating scale (BARS) for evaluating quality. Another
common approach is the critical incident technique, in which the manager keeps a regular log by recording each significant
employee behavior that reflects the quality of his or her perfor-
mance (“Juanita impressed the client with her effective presen-
tation today”; “Joe was late with his report”). This approach
can be subjective and time-consuming, and it may give some
employees a sense that everything they do is being recorded.
However, it reminds managers preparing a performance review
what the employee actually did.
Results appraisals tend to be more objective and can focus on production data such as sales volume (for a salesperson),
units produced (for a line worker), or profits (for a manager).
One approach, management by objectives (MBO), involves a subordinate and a supervisor agreeing in advance on specific
performance goals (objectives). They develop a plan describ-
ing the time frame and criteria for determining whether the
objectives have been reached. The aim is to agree on a set of
objectives that are clear, specific, and reachable. An objective
of a marketing manager might be “Develop a new advertising
campaign using social media and YouTube videos.”
MBO has several important advantages. First, it avoids the
biases and measurement difficulties of trait and behavioral apprais-
als. At the end of the review period, the employee either has or has
not achieved the specified objective. The employee is judged on
actual job performance. Second, because the employee and man-
ager have agreed on the objective at the outset, the employee is
likely to be committed to the outcome, and misunderstanding is
unlikely. Third, because the employee is directly responsible for
achieving the objective, MBO supports empowerment of employ-
ees to adapt their behavior so they achieve the desired results.
But the approach has disadvantages as well. Objectives may be
unrealistic, frustrating the employee and the manager, or too rigid,
leaving the employee without enough flexibility if circumstances
change. Finally, MBO often focuses too much on short-term
achievement at the expense of long-term goals.
None of these performance appraisal systems is easy to con-
duct properly, and all have drawbacks. In choosing an appraisal
method, the following guidelines may prove helpful:
• Base performance standards on job analysis.
• Communicate performance standards to employees.
NetApp. Teams allocated their
resources, selected from among
possible strategies, and reacted
to events posed by the game
(for example, a request from
a big customer). BTS’s simu-
lation software analyzed the
actions and provided feedback.
At the end of the simula-
tion, BTS reported each team’s
results, including total sales and operating profits. Now NetApp’s
middle managers appreciate what it takes to run a company—and
have greater respect for their leaders. 42
LO5 Explain alternatives for who appraises an employee’s performance
5 | PERFORMANCE APPRAISAL
One of the most important responsibilities you will have as a
manager is performance appraisal (PA), the assessment of an employee’s job performance. Done well, it can help employees
improve their performance, pay, and chances for promotion;
foster communication between managers and employees; and
increase the employees’ and the organization’s effectiveness.
Done poorly, it can cause resentment, reduce motivation, dimin-
ish performance, and even expose the organization to legal action.
Performance appraisal has two basic, equally important
purposes:
1. Administrative —It provides managers with the information they need to make salary, promotion, and dismissal decisions; helps employees understand and accept the basis of those decisions; and provides documentation that can justify those decisions in court.
2. Developmental —The information gathered can be used to iden- tify and plan the additional training, experience, or other improve- ment that employees require. Also, the manager’s feedback and coaching based on the appraisal help employees improve their day-to-day performance and can help prepare them for greater responsibilities.
5.1 | What Do You Appraise? Performance appraisals can assess three basic categories of
employee performance: traits, behaviors, and results. Trait appraisals involve judgments about employee performance. The rater indicates the degree to which the employee pos-
sesses a trait such as initiative, leadership, and attitude. Usually
the manager uses a numerical ratings scale. For example, if the measured trait is “attitude,” the employee might be rated
anywhere from 1 (very negative attitude) to 5 (very positive
performance appraisal (PA) assessment of an employee’s job performance
management by objectives (MBO) a process in which objectives set by a subordinate and a supervisor must be reached within a given time period
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CHAPTER 8 | Managing Human Resources 183
• Managers and supervisors are the traditional source of appraisal information because they are often best positioned to observe an employee’s performance.
• Peers and team members see different dimensions of performance and may be best at identifying leadership potential and interper- sonal skills. Companies are therefore turning to peers and team members to provide input to the performance appraisal.
• Evaluate employees on specific performance-related behaviors rather than on a single global or overall measure.
• Document the performance appraisal process carefully.
• If possible, use more than one rater.
• Develop a formal appeal process.
• Always take legal considerations into account. 43
Exhibit 8.6 Example of BARS used for evaluating quality
Source: Reprinted with permission of Rick Jacobs.
OUTSTANDING Uses measures of quality and well-defined processes to achieve project goals. Defines quality from the client’s perspective.
Looks for/identifies ways to continually improve the process.
Clearly communicates quality management to others. Develops a plan that defines how the team will participate in quality.
Appreciates TQM as an investment.
AVERAGE Has measures of quality that define tolerance levels.
Views quality as costly.
Legislates quality.
Focuses his/her concerns only on outputs and
deliverables, ignoring the underlying processes.
Blames others for absence of quality.
Gives only lip service to quality concerns.POOR
7
6
5
4
3
2
1
Performance Dimension: Total Quality Management. This area of performance concerns the extent to which a person is aware of, endorses, and develops proactive procedures to enhance product quality, ensure early disclosure of discrepancies, and integrate quality assessments with cost and schedule performance measurement reports to maximize clients’ satisfaction with overall performance.
e pe procrocessess.
erers.s. ticicipatpatpp e ie in qn ualualiittty.y.y.
s.
“Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in
themselves, it’s amazing what they can accomplish.” — Sam Walton
5.2 | Who Should Do the Appraisal? Just as multiple methods can be used to gather performance
appraisal information, several different sources can provide
that information:
• Subordinates are becoming a more popular source of appraisal infor- mation, used by companies such as Xerox and IBM to give superiors feedback on how their employees view them. Often this information is given in confidence to the manager and not shared with superi- ors. Even so, this approach can make managers uncomfortable
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184 PART 3 | Organizing
be highly regarded by peers and subordinates. The approach
can lead to significant improvement, with employees often
motivated to improve their ratings. On the downside, employ-
ees may be unwilling to rate colleagues harshly, so a certain
uniformity of ratings may result. Also, the 360-degree appraisal
is less useful than more objective criteria, like financial targets.
It is usually aimed at employee development, rather than being
a tool for administrative decisions like raises. For those, results
appraisals like MBO are more appropriate. 44
5.3 | How Do You Give Employees Feedback?
Giving performance feedback can be stressful for managers
and subordinates because its purposes conflict to some degree.
Providing growth and development requires understanding and
support, but the manager must be impersonal and able to make
tough decisions. Employees want to know how they are doing,
but typically they are uncomfortable about getting feedback.
Finally, the organization’s need to make HR decisions conflicts
with the individual employee’s need to maintain a positive
image. 45
These conflicts often make performance interviews
difficult, so managers should conduct them thoughtfully.
In general, appraisal feedback works best when it is spe- cific and constructive —related to clear goals or behaviors and clearly intended to help the employee rather than simply criti-
cize. Managers have an interest not just in rating performance
but in raising it, and effective appraisals take that into account.
In addition, the appraisal is likely to be more meaningful and
satisfying when the manager gives the employee a chance to
discuss his or her performance and respond to the appraisal.
initially, but the feedback is often practical and can help them signifi- cantly improve their management style. Because this process gives employees power over their bosses, it is generally used for develop- ment purposes only, not for salary or promotion decisions.
• Internal and external customers are relevant sources of perfor- mance appraisal information in companies, such as Ford and Honda, that are focused on total quality management. External customers have been used for some time to appraise restaurant employees. Internal customers can include anyone inside the orga- nization who depends on an employee’s work output.
• Self-appraisals, in which employees evaluate their own perfor- mance, usually are a good idea. Although they may be biased upward, the process of self-evaluation helps increase the employ- ee’s involvement in the review process and is a starting point for setting future goals.
Because each source of information has some limitations, and
since different people may see different aspects of perfor-
mance, Westinghouse, Dell, and many other companies have
involved more than one source for appraisal information. In a
process known as 360-degree appraisal, feedback is obtained from subordinates, peers, and superiors—every level involved
with the employee. Often the person being rated can select the
appraisers, subject to a manager’s approval, with the under-
standing that the individual appraisals are kept confidential;
returned forms might not include the name of the appraiser, for
example, and the results may be consolidated for each level.
The 360-degree appraisal delivers a fuller picture of the
employee’s strengths and weaknesses, and it often captures qual-
ities other appraisal methods miss. For example, an employee
may have a difficult relationship with his or her supervisor yet
Take Charge of Your Career Tips for Providing Constructive Feedback
F or many managers, supervisors, and team leaders, giving performance feedback to their employees can be uncomfortable. Maybe it’s not as stressful as going to the dentist, but there are some tips available for making the process less painful.
According to Eileen Chadnick of Big Cheese Coaching, providing constructive feedback to employees may not only help them develop and improve their performance, but it may also build trust between you and your employ- ees. First, she recommends reframing your
thinking to envisioning the meeting as a way to help your employees, not to demoralize them. Spend time and practice phrasing questions so you do not put the employee on the defensive. For example, “Can you help me understand why your sales numbers were down by 10 percent this year?” sounds bet- ter than “Tell me why you’re not pulling your weight in sales this year?” Chadnick also suggests that you be prepared for a two- way conversation, not just a one-way lecture about how the employee needs to improve. Giving employees room to comment and clar- ify performance issues will generally make the process seem more fair and transparent. Also, focus on employees’ behaviors, not their character or personalities. For example,
“When you arrived late to the call center, your coworkers had to take extra calls to cover for you” focuses on the behavior that needs to be changed. In contrast, avoid saying things like “Only slackers arrive late. Be on time so you don’t stress out your coworkers.” A final tip for giving constructive feedback is to show empathy with your employees. It needs to be sincere. You may consider saying things like “I know some customers can be unrea- sonable” or “I bet that can be challenging.” Showing empathy signals to your employees that you hear them and understand what they are going through.
Source: E. Chadnick, “Giving Feedback That Fuels Success,” Canadian HR Reporter 23, no. 15 (September 6, 2010), pp. 19–21.
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CHAPTER 8 | Managing Human Resources 185
6.1 | Pay Decisions Consider the Company, Position, and Individual
Reward systems can serve the strategic purposes of
attracting, motivating, and retaining people. The
wages paid to employees are based on a complex set
of forces. Beyond the body of laws governing com-
pensation, a number of basic decisions must be made
in choosing an appropriate pay plan. The wage mix is
influenced by a variety of factors: 46
• Internal factors include the organization’s compensation policy, the worth of each job, the employee’s relative worth, and the employer’s ability to pay.
● Performance appraisal feedback tends to be more effective when it’s specific and
constructive.
Interviews are most difficult with an employee who is per-
forming poorly. Here is a useful interview format for when an
employee is performing below acceptable standards:
1. Summarize the employee’s specific performance. Describe the performance in behavioral or outcome terms, such as sales or absenteeism. Don’t say the employee has a poor attitude; rather, explain which employee behaviors indicate a poor attitude.
2. Describe the expectations and standards, and be specific.
3. Determine the causes for the low performance; get the employee’s input.
4. Discuss solutions to the problem, and have the employee play a major role in the process.
5. Agree to a solution. As a supervisor, you have input into the solu- tion. Raise issues and questions, but also provide support.
6. Agree to a timetable for improvement.
7. Document the meeting.
Follow-up meetings may be needed.
LO6 Describe the fundamental aspects of a reward system
6 | DESIGNING REWARD SYSTEMS
Another major set of HRM activities involves reward systems.
This section emphasizes monetary rewards such as pay and
fringe benefits.
• External factors include conditions of the labor market, area wage rates, the cost of living, the use of collective bargaining (union negotiations), and legal requirements.
Three types of decisions are crucial for designing an effective
pay plan:
1. Pay level —the choice of whether to be a high-, average-, or low-paying company. Compensation is a major cost for any orga- nization, so low wages can be justified on a short-term financial basis. But being the high-wage employer—the highest-paying company in the region—ensures that the company will attract many applicants. Being a wage leader may be important during times of low unemployment or intense competition.
2. Pay structure —the choice of how to price different jobs within the organization. Jobs that are similar in worth usually are grouped together into job families. A pay grade, with a floor and a ceiling, is established for each job family. Exhibit 8.7 illustrates a hypothetical pay structure.
3. Individual pay decisions —different pay rates for jobs of similar worth within the same family. Differences in pay within job families are decided in two ways. First, some jobs are occupied by individuals with more seniority than others. Second, some people may perform better and therefore deserve higher pay. Setting an individual’s pay below that of coworkers—like choosing an overall low pay level— may become more difficult for employers to sustain in the future, as more employees use online resources such as Glassdoor.com , Salary.com , Vault.com , and PayScale.com to check whether their pay is above or below the average amount for similar job titles. 47
Unlike many other types of decisions in organizations, deci-
sions about pay, especially at the individual level, often are
kept confidential. Is that practice advantageous for organiza-
tions? Surprisingly, there is little evidence about this practice,
even though it affects almost every private sector employee. 48
Keeping pay decisions secret may help the organization by
avoiding conflicts, protecting individuals’ privacy, and reduc-
ing the likelihood that employees will leave to seek better pay
360-degree appraisal process of using multiple sources of appraisal to gain a comprehensive perspective on one’s performance
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186 PART 3 | Organizing
Several types of group incentive plans, in
which pay is based on group performance,
are increasingly used today. The plans aim
to give employees a sense of participation
and ownership in the firm’s performance.
Gainsharing plans reward employees for increasing productivity or saving money
in areas under their direct control. 51
For
example, if the usual waste allowance in
a production line has been 5 percent and
the company wants production employees
to reduce that number, the company may
offer to split any savings gained with the
employees. Profit-sharing plans are usu- ally implemented in the division or organi-
zation as a whole, although some incentives
may still be tailored to unit performance. In
most companies, the profit-sharing plan is
based on a formula for allocating an annual
amount to each employee if the company
exceeds a specified profit target. Although
profit-sharing plans do not reward individ-
ual performance, they do give all employ-
ees a stake in the company’s success and
motivate efforts to improve the company’s
profitability. Enterprise Rent-A-Car, which
gives branch managers great latitude to
address the needs of their local markets,
uses an incentive pay system that allows local offices to share in
the profits they have generated. The arrangement is especially
attractive to employees with an entrepreneurial streak. 52
When objective performance measures are unavailable but
the company still wants to base pay on performance, it uses
a merit pay system. Individuals’ pay raises and bonuses are based on the merit rating they receive from their boss. Many
organizations use merit pay systems to encourage higher lev-
els of employee and organizational performance. However,
not everyone agrees that this is the best approach. Stanford
University Professor Jeffrey Pfeffer suggests that individual
merit pay plans can undermine teamwork and the achievement
of organizational goals; instead he recommends using group
incentives like gain-sharing and profit-sharing. 53
6.3 | Executive Pay Has Generated Controversy
In recent years the issue of executive pay has stirred con-
troversy. One reason is that the gap between the pay of top
executives and the average pay of employees has widened con-
siderably. In the 1980s CEOs made less than 40 times the aver-
age worker’s pay, but that multiple has now reached 343 times
the average worker’s pay. This gap is considerably wider in the
United States than it is abroad. 54
Besides the difference between
executive and average worker pay, the sheer size of CEO com-
pensation also has been criticized. Top-earning CEOs can make
tens of millions of dollars a year. Still, it’s important to keep in
if they are earning less than the average for their position.
However, if decisions about pay are kept secret, employees
may worry that decisions are unfair and may be less motivated
because the link between performance and pay is unclear. Also,
in an economic sense, labor markets are less efficient when
information is unavailable, which can reduce organizations’
ability to get the best workers at the optimum rate of pay. Given
these possible pros and cons of pay secrecy, do you think this
practice is wise? Is it ethical? And what about you—do you
want to know how much your coworkers earn?
6.2 | Incentive Pay Encourages Employees to Do Their Best
Various incentive systems have been devised to motivate
employees to be more productive. 49
The most common are
individual incentive plans, which compare a worker’s perfor- mance against an objective standard, with pay determined by
the employee’s performance. Examples include paying a sales-
person extra for exceeding a sales target or awarding managers
a bonus when their group meets a target. If effectively designed,
individual incentive plans can be highly motivating. Some
companies, including Boeing, are using them for nonmanagers.
Boeing provides a cash bonus opportunity to nonmanagement
employees when the company meets or exceeds its profit goals.
Depending on the company’s financial achievement, employ-
ees can earn from 1 to 20 days of additional pay. 50
Exhibit 8.7 Pay structure
Source: Bohlander/Snell/Sherman, Managing Human Resources, 11th ed., © 1998. Reprinted with permission of South-Western, a part of Cengage Learning, Inc. www.cengage.com/permissions.
Range overlap Range overlap
Midpoint
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8.50
8.00
7.50
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Maximum rate
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CHAPTER 8 | Managing Human Resources 187
that is tied to the company’s performance—and their incentive
to work hard for the company—should continually increase. 57
However, many critics have suggested that excessive use of
options encouraged executives to focus on short-term results to
drive up the price of their stock, at the expense of their firm’s
long-run competitiveness. More recently, a plunging stock
market highlighted another problem with stock options: many
options became essentially worthless, so they failed to reward
employees. 58
In the future, employees may be wary about
accepting stock options in lieu of less risky forms of pay.
6.4 | Employees Get Benefits, Too Although pay has traditionally been employees’ primary mon-
etary reward, benefits have been receiving increased attention.
Benefits currently make up a far greater percentage of the total
payroll than they did in past decades. 59
The typical employer
today pays about 30 percent of payroll costs in benefits.
Throughout most of the past two decades, benefits costs have
risen faster than wages and salaries, fueled by the rapidly rising
cost of medical care. Accordingly, employers are attempting to
reduce benefits costs, even as their value to employees is rising.
Benefits are also receiving more management attention because
of their increased complexity. Many new types of benefits are
now available, and tax laws affect myriad fringe benefits, such
as health insurance and pension plans.
Like pay systems, employee benefit plans are subject to reg-
ulation. Employee benefits are divided into those required by
law and those optional for an employer. Three basic benefits
are required by law:
1. Workers’ compensation provides financial support to employees suffering a work-related injury or illness.
2. Social Security, as established in the Social Security Act of 1935, provides financial support to retirees; in subsequent amendments, the act was expanded to cover disabled employees. The funds come from payments made by employers, employees, and self- employed workers.
3. Unemployment insurance provides financial support to employees laid off for reasons they cannot control. Companies that have termi- nated fewer employees pay less into the unemployment insurance fund, so organizations have an incentive to minimize terminations.
Many employers also offer benefits that are not required. The
most common are pension plans and medical and hospital
insurance. Both of these programs are undergoing significant
change, partly because, in a global economy, they have put
U.S. firms at a competitive disadvantage. For example, U.S.
employers spend an average of $11,000 for each employee
with health insurance. 60
Overseas firms generally do not bear
these costs, which are usually government-funded, so they can
compete more effectively on price. With U.S. medical costs ris-
ing rapidly, companies have reduced health benefits or asked
employees to share more of their cost. A growing share of
U.S. companies (more than one-third) offer no medical bene-
fits at all, or they staff more positions with part-time workers
and offer coverage only to full-time employees. At the same
mind that the huge awards that make headlines are not neces-
sarily typical. In 2012, CEOs of companies in the Standard &
Poor’s stock index earned on average $4.0 million, an increase
of 19.7 percent over 2011; 55
this stands in stark contrast to the
average wage of all U.S. workers, which was $46,400. 56
The fastest-growing part of executive compensation comes
from stock grants and stock options. Such options give the holder the right to purchase shares of stock at a specified price. For
example, if the company’s stock price is $8 a share, the com-
pany may award a manager the right to purchase a specific num-
ber of shares of company stock at that price. If the price of the
stock rises to, say, $10 a share after a specified holding period—
usually three years or more—the manager can exercise the option. He or she can purchase the shares from the company at
$8 per share, sell the shares on the stock market at $10, and keep
the difference. (Of course, if the stock price never rises above $8,
the options will be worthless.) Companies issue options to man-
agers to align their interests with those of the company’s owners,
the shareholders. The assumption is that managers will become
even more focused on making the company successful, leading
to a rise in its stock price. Assuming that the executives continue
to own their stock year after year, the amount of their wealth
● Workers have begun to not only consider salary, but also environment,
culture, and other compensation packages to help make employment decisions.
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188 PART 3 | Organizing
In contrast to the equal-pay-for-equal-work notion, compa- rable worth doctrine implies that women who perform different jobs of equal worth as those performed by men should be paid the same wage.
64 For example, nurses (predominantly female)
were found to be paid considerably less than skilled craftwork-
ers (predominantly male), even though the two jobs were found
to be of equal value or worth. 65
Under the Equal Pay Act, this
would not constitute pay discrimination because the jobs are
very different. But under the comparable worth concept, these
findings would indicate discrimination because the jobs are
of equal worth. To date, no federal law requires comparable
worth, and the Supreme Court has made no decisive rulings
about it. However, some states have considered developing
comparable worth laws, and others have raised the wages of
female-dominated jobs. For example, Minnesota passed a com-
parable worth law for public sector employees after finding that
women on average were paid 25 percent less than men. Iowa,
Idaho, New Mexico, Washington, and South Dakota also have
comparable worth laws for public sector employees. 66
Some laws influence benefit practices. The Pregnancy Discrimination Act of 1978 states that pregnancy is a disability and qualifies a woman to receive the same benefits that she
would with any other disability. The Employee Retirement Income Security Act (ERISA) of 1974 protects private pension programs from mismanagement. ERISA requires retirement
benefits to be paid to those who vest or earn a right to draw
benefits and ensures retirement benefits for employees whose
companies go bankrupt or who otherwise cannot meet their
pension obligations. The Patient Protection and Affordable Care Act (PPACA) of 2010 is requiring certain employers to
time, retirement benefits have been shifting away from guar-
anteed pensions. While a promised monthly pension used to be
the norm, only about 18 percent of private company employ-
ees have one today (down from 36 percent two decades ago). 61
More often, the employee, the employer, or both contribute
to an individual retirement account or 401(k) plan, which is
invested. Upon retirement, the employee gets the balance that
has accumulated in the account.
Because of the wide variety of possible benefits and the con-
siderable differences in employee preferences and needs, compa-
nies often use cafeteria or flexible benefit programs. In this type of program, employees are given credits, which they “spend” by
selecting individualized packages of benefits, including medical
and dental insurance, dependent care, life insurance, and so on.
6.5 | Pay and Benefits Must Meet Legal Requirements
Several laws affect employee compensation and benefits. We
have already mentioned the FLSA, which in addition to distin-
guishing between exempt and nonexempt employees also sets
minimum wage, maximum hour, and child labor provisions. 63
The Equal Pay Act (EPA) of 1963 prohibits unequal pay for men and women who perform equal work. Equal work means
jobs that require equal skill, effort, and responsibility and are
performed under similar working conditions. The law does per-
mit exceptions in which the difference in pay is due to a senior-
ity system, merit system, incentive system based on quantity or
quality of production, or any additional factor other than sex,
such as market demand.
Rapidly rising medical costs have made health care coverage an expensive part of employers’ benefits packages. 62 Some employers—especially small ones—have coped by dropping health insurance altogether. Did You
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CHAPTER 8 | Managing Human Resources 189
Another area of concern is the safety of young workers, who
may lack the confidence to speak up if they see health or safety
problems. A recent study of teenage workers found that many
were exposed to hazards and used equipment that should have
been off-limits to teens under federal regulations. For exam-
ple, almost half of teenaged grocery store employees said they
had performed prohibited tasks such as using box crushers and
dough mixers. 67
provide health insurance to their employees (or pay $2,000
annually per employee for this purpose), insure employees with
preexisting conditions, and provide coverage for employees’
dependents until the age of 26.
6.6 | Employers Must Protect Health and Safety
The Occupational Safety and Health Act (OSHA) of 1970 requires employers to pursue workplace safety. Employers
must maintain records of injuries and deaths caused by work-
place accidents and submit to on-site inspections. Large-scale
industrial accidents and nuclear power plant disasters world-
wide have focused attention on the importance of workplace
safety. Exhibit 8.8 presents several interesting facts about
work-related injuries and illnesses in the United States.
cafeteria benefit program an employee benefit program in which employees choose from a menu of options to create benefit packages tailored to their needs
flexible benefit programs benefit programs in which employees are given credits to spend on benefits that fit their unique needs
comparable worth principle of equal pay for different jobs of equal worth
labor relations the system of relations between workers and management
Source: “Nonfatal Occupational Injuries and Illnesses Requiring Days Away from Work, 2012,” economic news release, Bureau of Labor Statistics, www. bls.gov .
Which jobs have the most lost work time associated with them due to injuries/illnesses?
1. Laborers and freight, stock, and material movers.
2. Nursing assistants.
3. Truck drivers, heavy and tractor–trailer.
4. Janitors and cleaners.
5. Police and sheriff’s patrol officers.
When do most injuries and illnesses occur?
During the day (8–4 p.m.) shift, Monday–Friday, and between the second and fourth hours after arriving to work.
Which injuries/illnesses cause employees to miss the most workdays (and for how many days on average)?
1. Fractures (30 days).
2. Carpal tunnel syndrome (30 days).
3. Amputations (26 days).
4. Tendonitis (15 days).
5. Sprains, strains, and tears (10 days).
Do men or women miss more workdays due to injuries or illnesses?
Men do. They accounted for 62 percent of all missed days in 2012.
Do older workers have more days away from work due to injuries/ illnesses?
Yes, but not by much. Workers aged 65 and older averaged 14 missed days of work due to injuries or illnesses, compared to 35- to 44-year-olds, who missed an average of 9 days per year.
Exhibit 8.8 Facts about work-related injuries and illnesses (2012)
LO7 Summarize how unions and labor laws influence human resources management
7 | LABOR RELATIONS Labor relations is the system of relations between workers and management. Labor unions recruit members, collect dues, and
ensure that employees are treated fairly with respect to wages,
working conditions, and other issues. When workers organize
and negotiate with management, two processes are involved:
unionization and collective bargaining. These processes have
evolved since the 1930s in the United States to provide import-
ant employee rights. 68
● Fast food workers and activists demonstrate outside the McDonald’s
corporate campus in Oak Brook, IL. They were calling on McDonald’s to pay a
minimum wage of $15-per-hour and offer better working conditions for their
employees. Several protestors were arrested after they ignored police orders
to leave the McDonald’s campus. McDonald’s, with over 35,000 restaurants
around the world, is one of several companies at the center of the minimum
wage debate. According to the Bureau of Labor Statistics, the median wage for
fast-food and counter workers in the United States is $8.83/hour which is higher
than the federally mandated minimum wage of $7.25/hour for all workers.
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190 PART 3 | Organizing
If an election is warranted, an NLRB representative con-
ducts the election by secret ballot. A simple majority of those
voting determines the winner, so apathetic workers who do not
vote in effect support the union. If the union wins the election,
it is certified as the bargaining unit representative. Management
and the union are then legally required to bargain in good faith
to obtain a collective bargaining agreement or contract.
Why do workers vote for or against a union? Four factors
play a significant role: 70
1. Economic factors, especially for workers in low-paying jobs— Unions attempt to raise the average wage rate for their members.
2. Job dissatisfaction —Poor supervisory practices, favoritism, lack of communication, and perceived unfair or arbitrary discipline and discharge are specific triggers of job dissatisfaction.
3. Belief that the union has power to obtain desired benefits can gen- erate a pro-union vote.
4. The image of the union —Headline stories of union corruption and dishonesty can discourage workers from unionization.
7.3 | How Is Collective Bargaining Conducted?
In the United States, management and unions engage in a
periodic ritual (typically every three years) of negotiating an
agreement for wages, benefits, hours, and working conditions.
Disputes can arise during this process, and sometimes the
workers go on strike to compel agreement on their terms. Such
an action, known as an economic strike, is permitted by law, but strikes are rare today. Strikers are not paid while they are on
strike, and few workers want to undertake this hardship unnec-
essarily. In addition, managers may legally hire replacement
workers during a strike, offsetting some of the strike’s effect.
Finally, workers are as aware as managers of the tougher com-
petition companies face today; if treated fairly, they will usu-
ally share management’s interest in coming to an agreement.
Once an agreement is signed, management and the union
sometimes disagree over interpretation of the agreement. Usually they settle their disputes through arbitration, the use of a neutral third party, typically jointly selected, to resolve
7.1 | What Labor Laws Exist?
Passed in 1935, the National Labor Relations Act (also called the Wagner Act after its legislative sponsor) ushered in an era of rapid unionization by declaring labor organizations legal, establishing
five unfair employer labor practices, and creating the National
Labor Relations Board (NLRB). Before the act, employers could
fire workers who favored unions, and federal troops were often
provided to put down strikes. Today the NLRB conducts union-
ization elections, hears complaints of unfair labor practices, and
issues injunctions against offending employers. The Wagner Act
greatly assisted the growth of unions by enabling workers to use
the law and the courts to organize and collectively bargain for
better wages, hours, and working conditions. Minimum wages,
health benefits, maternity leave, the 40-hour workweek, and
other worker protections were largely the result of collective bar-
gaining over many years by unions.
Public policy began on the side of organized labor in 1935,
but over the next 25 years, the pendulum swung toward man-
agement. The Labor-Management Relations Act, or Taft- Hartley Act (1947), protected employers’ free speech rights, defined unfair labor practices by unions, and permitted workers
to decertify (reject) a union as their representative.
Finally, the Labor-Management Reporting and Disclosure Act, or Landrum-Griffin Act (1959), swung the public policy pendulum midway between organized labor and
management. By declaring a bill of rights for union mem-
bers, establishing control over union dues increases, and
imposing reporting requirements for unions, Landrum-
Griffin was designed to curb abuses by union leadership
and rid unions of corruption.
7.2 | How Do Employees Form Unions? The effort to form a union begins when a union organizer or
local union representative describes to workers the benefits
they may receive by joining. 69
The union representative distrib-
utes authorization cards that permit workers to indicate whether
they want an election to certify the union. The National Labor
Relations Board will conduct an election if at least 30 percent
arbitration the use of a neutral third party to resolve a labor dispute
“Always treat your employees exactly as you want them to treat your best customers.”
— Stephen R. Covey
of the employees sign authorization cards. Management has
several choices at this stage: to recognize the union without an
election, to consent to an election, or to contest the number of
cards signed and resist an election.
the dispute. The United States uses arbitration while an agree-
ment is in effect to avoid wildcat strikes (in which workers walk off the job in violation of the contract) or unplanned work
stoppages.
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CHAPTER 8 | Managing Human Resources 191
used to be union strong-
holds. Employees in today’s
white-collar office jobs are
less interested in joining
unions and are also more
difficult to organize. Tough
global competition has made
managers much less willing
to give in to union demands,
so the benefits of unionization are less clear to many work-
ers—particularly young, skilled workers who no longer
expect to stay with one company all their lives. In addition,
elimination of inefficient work rules, the introduction of
profit sharing, and across-the-board salary reductions have
been seen as steps toward a fundamentally different, coopera-
tive long-term relationship.
When companies recognize that their success depends on
the talents and energies of employees, the interests of unions
and managers begin to converge. Rather than one side exploit-
ing the other, unions and managers find common ground based
on developing, valuing, and involving employees. Particularly
in knowledge-based companies, the balance of power is shift-
ing toward employees. Individuals, not companies, own their
own human capital. This leaves poorly managed organizations
in a particularly vulnerable position. To compete, organizations
are searching for ways to obtain, retain, and engage their most
valuable resources: human resources.
Certain clauses are common in a collective bargaining
agreement:
• Security clause —In a union shop, the contract requires workers to join the union after a set period of time. Right-to-work states, through restrictive laws, do not permit union shops; workers have the right to work without being forced to join a union. The southern United States has many right-to-work states.
• Wage component —The contract spells out rates of pay, including premium pay for overtime and paid holidays.
• Individual rights —These include the use of seniority to determine pay increases, job bidding, and the order of layoffs.
• Grievance procedure —This procedure gives workers a voice in what goes on during contract negotiations and administration. 71
In about 50 percent of discharge cases that go to arbitration, the arbitrator overturns management’s decision and reinstates the worker. 72
Unions have a legal duty of fair representation, which means
they must represent all workers in the bargaining unit and
ensure that workers’ rights are protected.
7.4 | What Does the Future Hold? In recent years union membership has declined to about
12 percent of the U.S. labor force—down from a peak of
over 33 percent at the end of World War II. Increased auto-
mation eliminated many of the manufacturing jobs that
union shop an organization with a union and a union security clause specifying that workers must join the union after a set period of time
right-to-work legislation that allows employees to work without having to join a union
Study Che klist Did you tear out the perforated student review card at
the back of the text to revisit learning objectives and key terms and definitions?
Connect ® Management is available for M Management. Additional resources include:
Interactive Applications: • Comprehension Case: Will the Union Get In? • Drag & Drop: Staffing the Organization • Sequencing/Timeline: Putting HR Planning in
Perspective • Video Case: HRM at Best Buy
LearnSmart—Multiple choice questions help you determine what you already know, are not sure about, or need to practice based on your score. And with SmartBook, you can read the relevant section in the eBook as well as practice and recharge what you’ve learned.
Chapter Videos: SAS, Hollywood Labor Unions
Young Manager Speaks Out: Blair Root, Nonprofit Director
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192 PART 3 | Organizing
Learning Objectives
After studying Chapter 9, you will be
able to
LO1 Describe how changes in the U.S. workforce make diversity a critical organizational and managerial issue.
LO2 Explain how diversity, if well managed, can give organizations a competitive edge.
LO3 Identify challenges associated with managing a diverse workforce.
LO4 Define monolithic, pluralistic, and multicultural organizations.
LO5 List steps managers and their organizations can take to cultivate diversity.
LO6 Summarize the skills and knowledge about cultural differences needed to manage globally.
9 Managing Diversity and Inclusion chapter
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CHAPTER 9 | Managing Diversity and Inclusion 193
I
management, which is proactive in nature, and affirmative action programs, which are more reactive and focus on com- pliance. Exhibit 9.1 highlights some of the differences between
these two initiatives. Managing diversity involves, first, such
basic activities as recruiting, training, promoting, and utiliz-
ing to full advantage individuals with different backgrounds,
Managing diversity and inclusion on the part of organiza- tions have their roots in Equal Employment Opportunity (EEO),
meaning ”freedom from discrimination on the basis of sex,
color, religion, national origin, disability and age.” 2 Essentially,
there are two distinctive (though related) sets of diversity and
inclusion activities in which organizations engage: diversity
n the previous chapter, we described the laws that
require equal opportunity and fair treatment in the
workplace. But a proactive approach—of seeking
and capitalizing on the benefits of a diverse workforce—is funda-
mental to the success of many organizations today. For example,
by following a decades-long policy of hiring, developing, and uti-
lizing the full potential of diverse employees, care provider Kaiser
Permanente has created a competitive advantage in the health care
industry. 1 In contrast, managers who lack the skills to lead men and
women of different colors, cultures, ages, religions, abilities, and
backgrounds will be at a significant disadvantage in their careers.
In the United States, the number of racial and ethnic minori-
ties is increasing far faster than the growth rate in the white,
nonminority population, and women make up a sizable share of
the workforce. American workers, customers, and markets are
highly diverse and becoming
even more so. In addition, busi-
nesses are increasingly global,
so managers must be much
more aware of, and sensitive
to, cultural differences. Also,
the creativity and innovation
that are vital for organizational
success are fostered in an atmosphere that celebrates different
perspectives and bright people from all walks of life. Few societies
have access to the range of talents available in the United States,
with its immigrant tradition and racially and ethnically diverse pop-
ulation. Yet getting people from divergent backgrounds to work
together effectively is not easy. For this reason, managing diversity
is one of America’s biggest challenges—and opportunities.
managing diversity and inclusion managing a culturally diverse workforce by recognizing the characteristics common to specific groups of employees while dealing with such employees as individuals and supporting, nurturing, and utilizing their differences to the organization’s advantage
Component Affirmative Action Program (AAP) Diversity Management Program (DMP)
Purpose Correct historic wrongs and past/current discrimination against minorities, women, and other protected classes.
Value and leverage diversity of all stakeholders—from employees to customers—to achieve competitive advantage.
Origin Executive Order 11246 and related to Title VII of the Civil Rights Act of 1964.
No precise date; however, DMPs have become an integral component of most employers’ HR strategies.
Approach Formally written plan to proactively recruit, hire, and promote minorities, women, and other protected classes.
Company-driven plan to foster an inclusive environment in which all stakeholders contribute to organizational objectives.
Required by law? Yes. Federal, state, and local agencies, as well as certain federal contractors and subcontractors are required to have an AAP. It is voluntary for private employers to have one, unless it is court-ordered to correct discrimatory practices.
No. However, the majority of employers have DMPs because they believe that diversity equates to good business. Companies that align the diversity of their employees with that of their customers position themselves for success.
Enforcement Office of Federal Contract Compliance Programs (OFCCP) in the U. S. Department of Labor.
An organization’s HR department, with input from other internal stakeholders, including diversity councils or advisory groups.
Examples of organizations with program
U.S. Food & Drug Administration, Florida Department of Environmental Protection, Princeton University, Boeing, and the National Association of Basketball Coaches.
Johnson & Johnson, Procter & Gamble, Microsoft, Pepsi, Intel, Kraft Foods, General Electric, Ernst & Young, MasterCard Worldwide, and Kaiser Permanente.
Sources: U. S. Equal Employment Opportunity Commission website (online), “Diversity and Affirmative Action,” www.eeoc.gov , accessed on May 18, 2014; Diversity Inc. Top 50 List (online), www.diversityinc.com , accessed on May 18, 2014; “Who Supports Affirmative Action?” American Civil Liberties Union (online), www.aclu .org , accessed on May 18, 2014; “When Would My Company Need to Have an Affirmative Action Program?” Society for Human Resource Management (online), December 4, 2012, www.shrm.org ; “What is the Difference Between EEO, Affirmative Action, and Diversity?” Society for Human Resource Management (online), September 20, 2012, www.shrm.org ; and H. J. Bernardin, Human Resource Management: An Experiential Approach, 5th ed. (Boston: McGraw-Hill, 2009), p. 71.
Exhibit 9.1 Differences between affirmative action and diversity management programs
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beliefs, capabilities, and cul-
tures. But it means more
than just hiring women and
minorities and making sure
they are treated equally and
encouraged to succeed. It also means understanding and deeply
valuing employee differences to build a more effective and
profitable organization. Organizations that strive to foster the
richness that a diverse workforce brings also work to build
bridges between those employees to tap their potential. Such
inclusion moves beyond valuing the differences of employees
to valuing the connections that arise and develop between them.
Related to diversity management is
affirmative action . Many organizations originally diversified their workforce out
of concerns for social responsibility and
legal necessity. To correct the past exclu-
sion of women and minorities, companies
introduced affirmative action—special
efforts to recruit and hire qualified mem-
bers of groups that have been discrim-
inated against in the past. While many organizations do so
voluntarily, contractors and subcontractors with 50 or more
employees that receive more than $50,000 in government busi-
ness are required to have an affirmative action program. 3 The
intent is not to prefer these group members to the exclusion
of others, but to correct for the history of discriminatory prac-
tices and exclusion. For example, in Portland, Oregon, about
one-fifth of the city’s population consists of various ethnic
minorities, but only 12 percent of new construction employ-
ees are minorities. The city government, Portland Development
Commission, Port of Portland, and regional and state trans-
portation departments established affirmative action programs
to increase minority group members’ participation in public
contracts. 4
Such efforts, along with legal remedies to end discrimina-
tion, have had a powerful impact. Today the immigrant nature
of American society is virtually taken for granted—even seen
as a source of pride. And women, African
Americans, Hispanics, and other minori-
ties routinely occupy positions that in
years past would have been totally closed
to them.
Yet employment discrimination per-
sists, and despite upward mobility, some
groups still lack full participation and
opportunity in today’s organizations. To
move beyond correcting past wrongs and become truly inclu-
sive requires a change in organizational culture—one in which
diversity is seen as contributing directly to the attainment of
organization goals.
Viewed in this way, affirmative action and diversity man-
agement are complementary, not the same. In contrast to equal
employment opportunity (EEO) and affirmative action pro-
grams, managing diversity means moving beyond legislated
mandates to embrace a proactive business philosophy that sees
differences as positive. In this broader sense, managing diver-
sity involves making changes in organizations’ systems, struc-
tures, and practices to eliminate barriers that may keep people
from reaching their full potential. It asks managers to recognize
and value the uniqueness of each employee and to see the dif-
ferent ideas and perspectives each brings to the organization as
a source of competitive advantage. In short, managing diversity
goes beyond getting more minorities and women into the orga-
nization. It creates an environment in which employees from
every background listen to each other and work better together
affirmative action special efforts to recruit and hire qualified members of groups that have been discriminated against in the past
LISTEN & LEARN ONLINE
YOUNG MANAGERS
Speak Out! “ One of the ways we encourage (diversity) is to make sure that we are educated . . . Also knowing how to handle dif- ferent types of personalities or beliefs or backgrounds people come from. ”
—Stephanie Neubauer , Hair Salon Owner/Manager
“e pluribus unum”
194
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CHAPTER 9 | Managing Diversity and Inclusion 195
Movement was launched in Seneca Falls in 1848, most occu-
pations were off-limits to women, and colleges and profes-
sional schools were closed to them. In the first part of the 20th
century, when women began to be accepted into professional
schools, they were subject to severe quotas. There was also
a widespread assumption that certain jobs were done only by
men, and other jobs only by women. As recently as the 1970s,
classified-ad sections in newspapers listed jobs by sex, with
sections headed “Help Wanted—Males” and “Help Wanted—
Females.” Women who wanted a bank loan needed a male
cosigner, and married women were not issued credit cards in
their own name. 5 This discrimination started to decline when
the Civil Rights Act of 1964 and other legislation began to be
enforced. Although women are still underrepresented at the
most senior levels of corporate life, and their average pay rates
still lag those of men, most jobs are now open to women.
The most difficult and wrenching struggle for equality
involved America’s nonwhite minorities. Rigid racial segre-
gation of education, employment, and housing persisted for
100 years after the end of the Civil War. After years of coura-
geous protest and struggle, the unanimous Brown v. Board of Education Supreme Court decision in 1954 declared segregation
so that the organization as a whole will become more effective.
This emphasis on coming together to benefit the whole has led
many companies to begin referring to their objective as diver-
sity and inclusion.
This chapter examines the meaning of diversity and the
management skills and organizational processes involved
in managing the diverse workforce effectively. We begin by
identifying the changes in society and the workplace that are
creating this more diverse U.S. workforce. Next we consider
challenges of diversity and ways to address those challenges.
Then we explore the practices that support inclusion. Finally,
because companies today have a global presence, we end by
describing how to manage in environments with economic, cul-
tural, and geographic differences.
1 | DIVERSITY IS DYNAMIC AND EVOLVING
Diversity is far from a new challenge for managers. However,
over time, U.S. businesses have changed their approach to
managing diversity.
1.1 | Diversity Shaped America’s Past
From the late 1800s to the early 1900s, most of the immi-
grants to the United States came from Italy, Poland, Ireland,
and Russia. Those people were considered outsiders because
most did not speak English and had different customs and work
styles. They struggled to gain acceptance in the steel, coal,
automobile manufacturing, insurance, and finance industries.
As late as the 1940s, and sometimes beyond, colleges rou-
tinely discriminated against immigrants, Catholics, and Jews,
establishing strict quotas that limited their number, if any were
admitted at all. This type of discrimination severely diminished
the employment prospects of these groups until the 1960s.
Women’s struggle for acceptance in the workplace was in
some ways even more difficult. When the Women’s Rights
Traditional Thinking Diversity management is just another nonessential initiative
driven by the HR department.
The Best Managers Today Attract, develop, and retain diverse employees to achieve
competitive advantage.
LO1 Describe how changes in the U.S. workforce make diversity a critical organizational and managerial issue
● Freedom marchers in the 1960s were an important part of the American
civil rights movement.
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196 PART 3 | Organizing
much diversity also exists within each category. Every group
consists of individuals who are unique in personality, education,
and life experiences. There may be more differences among,
say, three Asians from Thailand, Hong Kong, and Korea than
among a white, an African American, and an Asian all born in
Chicago. And all individuals differ in their personal or profes-
sional goals and values.
Thus managing diversity may seem to be a contradiction.
It means being acutely aware of characteristics common to a group of employees, while also managing these employees as
individuals. Managing diversity means not just tolerating or accommodating all sorts of differences but supporting, nurtur-
ing, and utilizing these differences to the organization’s advan-
tage. A global survey of 546 senior executives from companies
with more than $500 million in sales found that the top three
methods used to promote diversity within their organizations
include (1) expanding work/life balance (flexible hours and
work-at-home) policies, (2) tapping wider applicant pools for
recruitment, and (3) providing training to enhance respect for
differences among colleagues. 7
A sizable number of HR executives say their companies
need to or plan to expand their diversity training programs.
Although many companies initially instituted diversity pro-
grams to prevent discrimination, more are beginning to see the
programs as a crucial way to expand their customer bases both
domestically and worldwide. In fact, two out of three compa-
nies said they had broadened their diversity programs because
of increasing globalization, according to a survey of 1,780 HR
and training executives by the Boston-based consulting firm
Novations/J. Howard and Associates.
Gender Issues One of the most important developments in the U.S. labor market has been the growing number of women
working outside the home. Consider this:
• Women make up about 47 percent of the workforce.
• The overall labor force participation rate of women rose throughout the 1970s through the 1990s and is now holding steady even as the participation rate of men gradually declines.
• Almost 60 percent of marriages are dual-earner marriages.
• Nearly one of every three married women in two-income house- holds earns more than her husband does. 9
Balancing work life with family responsibilities presents
an enormous challenge. Although men’s roles in our society
unconstitutional, setting the stage for laws we discussed in
Chapter 8, including the Civil Rights Act of 1964. Although the
struggle for equality is far from complete, many civil rights—
equal opportunity, fair treatment in housing, and the illegality
of religious, racial, and sex discrimination—received their
greatest impetus from the Civil Rights movement.
With this background, the traditional American image of
diversity emphasized assimilation. The United States was con-
sidered the “melting pot” of the world, a country where ethnic
and racial differences were blended into an American purée.
In real life, many ethnic and most racial groups retained their
identities but did not express them at work. Deemphasizing
their ethnic and cultural distinctions helped employees keep
their jobs and get ahead.
1.2 | Diversity Is Growing in Today’s Workforce
Today nearly half of the U.S. workforce consists of women,
16 percent of U.S. workers identify themselves as Hispanic or
Latino, 11 percent are black, and 6 percent are Asian. One-third
of all businesses in the United States are owned by women,
employing about 20 percent of America’s workers. Two-
thirds of all global migration is into the United States. 6 U.S.
businesses do not have a choice of whether to have a diverse
workforce; if they want to survive, they must learn to manage
a diverse workforce sooner or better than their competitors do.
Today’s immigrants are willing to be part of an integrated
team, but they no longer are willing to sacrifice their cultural
identities to get ahead. Nor do they have to do so. Companies
are recognizing that accommodating employees’ differences
pays off in business. Managers are also realizing that their
customers are becoming increasingly diverse, so retaining a
diversified workforce can provide a significant competitive
advantage in the marketplace.
Diversity today refers to far more than skin color and gender. The term broadly refers to a variety of differences, summarized
in Exhibit 9.2 . These differences include religious affiliation,
age, disability status, military experience, sexual orientation,
economic class, educational level, and lifestyle, as well as gen-
der, race, ethnicity, and nationality.
Although members of different groups (white males, people
born during the Depression, homosexuals, Iraq war veterans,
Hispanics, Asians, women, African Americans, etc.) share within
their groups many common values, attitudes, and perceptions,
“Leaders can use diversity strategically to create sustainable competitive advantages for their firms.”
— Martin N. Davidson , University of Virginia 8
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CHAPTER 9 | Managing Diversity and Inclusion 197
make complex decisions weighing job requirements and each
employee’s contributions and motivation. Michele Coleman
Mayes, former senior vice president and general counsel of
Pitney Bowes, agreed to let one attorney leave promptly at
five o’clock each evening; the attorney works on her laptop
at night as needed to meet her deadlines. But Mayes refused
another employee’s request to work part-time because the per-
son in that position needed to be available each day to handle
requests for other departments. Mayes told her employees that
scheduling decisions “may not always be equal, but I will try
to be fair.” 10
The desire for flexible scheduling is often cited as a reason
why significant pay disparities remain between men and women.
have been changing, women still carry the bulk of family
responsibilities. That puts women at a disadvantage in com-
panies that expect employees, particularly at the managerial
level, to put in long hours and sacrifice their personal lives for
the sake of their jobs, organizations, and careers. It also may
cause those companies to lose valuable talent. Some compa-
nies therefore offer their employees ways to balance work
and family commitments with such benefits as onsite child
care, in-home care for elderly family members, flexible work
schedules, and the use of newer technologies that permit more
work from home.
Still, as managers weigh employees’ needs for flexibility
against the organization’s need for productivity, they have to
Exhibit 9.2 Components of workforce diversity
Workforce diversity
includes . . .
Older employees
Racial/ ethnic
minorities
Immigrants
Religious employees
Physically/ mentally disabled
Women
. . . and these differences, too.
Sexual orientation
Lifestyle
Skill and
educational level
Economic class
Function or position in
firm
Veteran status
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198 PART 3 | Organizing
sexual conduct that is a term or condition of employment.
Sexual harassment falls into two categories:
1. Quid pro quo harassment occurs when “submission to or rejection of sexual conduct is used as a basis for employment decisions.”
2. Hostile environment occurs when unwelcome sexual conduct “has the purpose or effect of unreasonably interfering with job perfor- mance or creating an intimidating, hostile, or offensive working environment.” Behaviors that can cause a hostile work environ- ment include persistent or pervasive displays of pornography, lewd or suggestive remarks, and demeaning taunts or jokes.
Both categories of harassment violate Title VII of the Civil
Rights Act of 1964, regardless of the sex of the harasser and the
victim (in a recent year, more than 16 percent
of complaints filed with the federal govern-
ment came from males). If an employee files a
complaint of sexual harassment with the Equal
Employment Opportunity Commission, the com-
mission may investigate and, if it finds evidence
for the complaint, may request mediation, seek
a settlement, or file a lawsuit with the potential
for stiff fines—and negative publicity that may
damage the company’s ability to recruit the best
employees in the future.
Harassment by creating a hostile work envi-
ronment is now more typical than quid pro quo
harassment. Because it may involve more sub-
jective standards of behavior, it puts an extra
burden on managers to maintain an appropriate
work environment by ensuring that all employ-
ees know what conduct is and is not appro-
priate and that there are serious consequences
for this behavior. Even when managers do not
themselves engage in harassment, if they fail
to prevent it or to take appropriate action after
receiving legitimate complaints about it, they
may still be held liable, along with their com-
panies, if a lawsuit is filed. Managers also need
to know that the “hostile work environment” standard applies
to same-sex harassment, as well as to non-gender-related cases,
such as a pattern of racial or ethnic slurs.
One way managers can help their companies prevent
harassment, or avoid punitive damages if a lawsuit is filed, is
to make sure their organization has an effective and compre-
hensive policy on harassment. (See the six basic components
in Exhibit 9.3 .) Such a policy would have the following basic
components: 17
1. Develop a comprehensive organizationwide policy on sexual harassment and present it to all current and new employees. Stress that sexual harassment will not be tolerated under any circum- stances. Emphasis is best achieved when the policy is publicized and supported by top management.
2. Hold training sessions with supervisors to explain Title VII require- ments, their role in providing an environment free of sexual harass- ment, and proper investigative procedures when charges occur.
The average full-time working
woman earns about 80 percent
as much as men in the same
job (recall the discussion in
Chapter 8 about equal pay and
comparable worth). This pay
gap is closing faster for younger
women. The women’s-to-men’s
earnings ratio among 25- to
34-year-olds increased from
68 percent (in 1979) to 90 percent (in 2012). In comparison, this
ratio for 45- to 54-year-olds rose from 57 percent to 75 percent. 11
Another concern involving female workers is the low repre-
sentation of women in top jobs. As women—
along with minorities—move up the corporate
ladder, they encounter a glass ceiling , a meta- phor for an invisible barrier that makes it diffi-
cult for women and minorities to move beyond
a certain level in the corporate hierarchy. For
example, just 24 women are chief executives
of Fortune 500 companies—that’s 24 out of 500. Looking at all corporate officers of those
companies, about 15 percent are women, and
less than 2 percent are minority women. 12
Still, women’s leadership is beginning to be
seen at a broader range of companies. Today’s
well-known female CEOs include Indra
Nooyi of PepsiCo, Virginia Rometty of IBM,
Mary Barra of GM, Ursula Burns of Xerox,
Pat Woertz of Archer Daniels Midland, Ellen
Kullman of Dupont, and Marissa Mayer of
Yahoo! 13
Similarly, a small handful of minority
CEOs are currently leading their Fortune 500 firms, including Otis Clarence Jr. of Darden
Restaurants, Kenneth I. Chenault of American
Express, Carlos Rodriguez of ADP, and Roger
W. Ferguson Jr. of TIAA-CREF. 14
Some companies are helping women break
through the glass ceiling. Accenture sponsors monthly net-
working events for its female employees and offers flexible
schedules and part-time arrangements. The following com-
panies are among those the National Association of Female
Executives recently identified as the “top 10” for executive
women: 16
AstraZeneca KPMG
Ernst & Young Marriott International
General Mills Procter & Gamble
Grant Thornton State Farm
IBM Verizon
As women have gained more presence and power in the
workforce, some have drawn attention to the problem of sexual harassment (discussed in Chapter 8), which is unwelcome
glass ceiling metaphor for an invisible barrier that makes it difficult for women and minorities to rise above a certain level in the organization
sexual harassment conduct of a sexual nature that has negative consequences for employment
According to the Society for Human Resource Management, the top five scoring countries on the Global Diversity Readiness Index are Sweden, Norway, New Zealand, Canada, and Finland. (Note: The United States was ranked 14th out of 47 countries.) 15
Did You Know?
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CHAPTER 9 | Managing Diversity and Inclusion 199
• The younger Americans are, the more likely they are to be persons of color.
• One in 66 people in the United States identifies himself or herself as multiracial, and the number could soar to 1 in 5 by 2050. 19
These numbers indicate that the term minority, as it is used typically, may soon become outdated.
Particularly in regions of the country and urban areas where
white males do not predominate, managing diversity means more
than eliminating discrimination: it means capitalizing on the wide
variety of skills available in the labor market. Organizations that
do not take full advantage of the skills and capabilities of minori-
ties and immigrants are severely limiting their potential talent
pool and their ability to understand and capture minority markets.
Those markets are growing rapidly, along with their share of pur-
chasing power. And if you sell to businesses, you are likely to
deal with some minority-owned companies because the number
of businesses started by Asian American, African American, and
Hispanic entrepreneurs is growing much faster than the overall
growth in new companies in the United States. For example,
more than half of the companies that started in California’s high-
tech Silicon Valley were founded by immigrants, and in a recent
year, one-fourth of patent applications in the United States iden-
tified an immigrant as the inventor or a co-inventor. 20
Exhibit 9.4
lists some successful immigrant entrepreneurs.
Even so, the evidence shows some troubling disparities in
employment and earnings. Unemployment rates are higher for
black and Hispanic workers than for whites—twice as high in
the case of black men. Earnings of black and Hispanic workers
have consistently trailed those of white workers; recent figures
put the median earnings for African American employees at
78 percent of median earnings for white workers and the median
earnings of Hispanics at just 72 percent. African Americans and
Hispanic Americans are also underrepresented in management
and professional occupations. 21
This underrepresentation may
itself help perpetuate the problem because it can leave many
aspiring young minorities with fewer role models or mentors.
3. Establish a formal complaint procedure in which employees can discuss problems without fear of retaliation. The complaint pro- cedure should spell out how charges will be investigated and resolved.
4. Act immediately when employees complain of sexual harassment. Communicate widely that investigations will be conducted objec- tively and with appreciation for the sensitivity of the issue.
5. When an investigation supports employee charges, discipline the offender at once. For extremely serious offenses, discipline should include penalties up to and including discharge. Discipline should be applied consistently across similar cases and among managers and hourly employees alike.
6. Follow up on all cases to ensure a satisfactory resolution of the problem.
Companies such as Avon, Corning, Infosys, and Metro-
Goldwyn-Mayer have found that a strong commitment to
diversity reduces problems with sexual harassment. 18
Gender issues and the changing nature of work do not apply
just to women. In some ways, the changing status of women has
given men a chance to redefine their roles, expectations, and
lifestyles. Some men are deciding that there is more to life than
corporate success and are scaling back work hours and com-
mitments to spend time with their families. Worker values are
shifting toward personal time, quality of life, self- fulfillment,
and family. Workers today, both men and women, are looking
to achieve a balance between career and family.
Minorities and Immigrants Along with gender issues, the importance and scope of diversity are evident in the growth of
racial minorities and immigrants in the workforce. Consider
these facts:
• Black, Asian, and Hispanic workers hold more than one of every four U.S. jobs.
• Asian and Hispanic workforces are growing the fastest in the United States, followed by the African American workforce.
• Three in ten college enrollees are people of color.
• Foreign-born workers make up more than 16 percent of the U.S. civilian labor force. About half of these workers are Hispanic, and 24 percent are Asian.
Exhibit 9.3 Basic Components of a Company’s Policy to Prevent Harassment
Create organizationwide policy
Establish complaint procedure Train
supervisors
Follow up and resolve cases
Discipline offenders
Act on complaints
● Yahoo! President and CEO Marissa Mayer delivers a keynote address at
the 2014 International CES in Las Vegas, NV. CES, the world’s largest annual
consumer technology trade show, is featured 3,200 exhibitors showing off
their latest products and services to about 150,000 attendees.
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200 PART 3 | Organizing
one in three individuals with disabil-
ities are employed. 25
On average, dis-
abled employees earn about $10,000
less than employees who are not dis-
abled. 26
Still, more than half of peo-
ple with a disability held jobs during
the year in which they were surveyed.
And among those who are unem-
ployed, many would like to find work.
The Americans with Disabilities
Act (ADA), mentioned in Chapter 8,
defines a disability as a physical or
mental impairment that substantially
limits one or more major life activ-
ities. Examples of such physical or
mental impairments include those
resulting from orthopedic, visual,
speech, and hearing impairments;
cerebral palsy; epilepsy; multiple scle-
rosis; HIV infections; cancer; heart disease; diabetes; mental
retardation; psychological illness; specific learning disabilities;
drug addiction; and alcoholism. 27
For most businesses, mentally and physically disabled
people represent an unexplored but fruitful labor market.
Frequently employers have found that disabled employees are
more dependable than other employees, miss fewer days of
work, and exhibit lower turnover. Tax credits are available to
companies who hire disabled workers. In addition, managers
who hire and support employees with disabilities are signaling
to other employees and stakeholders their strong interest in cre-
ating an inclusive organization culture.
Education Levels When the United States was primarily an industrial economy, many jobs required physical strength,
stamina, and skill in a trade, rather than college and profes-
sional degrees. In today’s service and technology economy,
more positions require a college education and even a graduate
or professional degree. Today’s prospective employees have
responded by applying to college in record numbers. The pro-
portion of the workforce with at least some college education
has been growing steadily since the 1970s. The share of work-
ers with a bachelor’s degree has more than doubled since 1970.
People with degrees in science and technology are in especially
high demand. Employers often expand their search for scien-
tists and computer professionals overseas, but visa require-
ments limit that supply.
At the other end of the spectrum, the share of workers with
less than a high school diploma has tumbled from nearly 4 out
of 10 in 1970 to below 1 out of 10 today. Among foreign-born
workers, 24.6 percent have not completed high school. 28
Age Groups By 2018, it is estimated that one out of four workers will be aged 55 or older.
29 As a result, entry-level
workers for some positions are in short supply. Today’s compa-
nies need to compete hard for a shrinking pool of young talent,
There is considerable evidence that discrimination may
account for at least some of the disparities in employment and
earnings. For example, in one recent study, fictitious résumés
were used to respond to help-wanted ads. Each résumé used
either African American names like Lakisha and Jamal or
white-sounding names like Emily and Greg. The résumés with
white-sounding names were 50 percent more likely to get a
callback for an interview than the same résumés with African
American names. Despite equivalence in credentials, the often
unconscious assumptions about different racial groups are very
difficult to overcome. 22
Nevertheless, significant progress has been made. Talented
members of minority groups are contributing to organizational
effectiveness in a wide variety of companies across multiple
industries. A sample of companies that value diversity can be
found on Fortune ’s 2012 “Best Companies to Work For” (“most diverse”) list, including Methodist Hospital, Cisco, Whole Foods
Market, Marriott International, and Capital One. 23
Virtually every large organization today has policies and
programs for increasing minority representation, including
compensation systems that reward managers for increasing the
diversity of their operations. FedEx, Xerox, Motorola, Shell,
Sun Microsystems, and other companies have corporate diver-
sity officers who help managers attract, retain, and promote
minority and women executives. Many organizations, including
Lockheed Martin and Dun and Bradstreet, are also supporting
minority internships and MBA programs. The internship pro-
grams help students and organizations learn about one another
and, ideally, turn into full-time employment opportunities.
Mentally and Physically Disabled People The largest unemployed minority population in the United States is peo-
ple with disabilities. The share of the population with a disabil-
ity is growing as the average worker gets older and heavier. 24
According to the U.S. Census Bureau, 19 percent of the pop-
ulation reports having some degree of disability, and of only
Exhibit 9.4 Successful immigrant entrepreneurs in the United States
Russia
Belgium
Taiwan
France
India
Australia
Hungary
Sergey Brin of Google
Liz Claiborne of her namesake company
Steve Chen of YouTube
Coco Chanel of Chanel
Vinod Khosla of Sun Microsystems
Robert Murdoch of News Corporation
Andy Grove of Intel
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CHAPTER 9 | Managing Diversity and Inclusion 201
is declining. As shown in Exhibit 9.5 , by 2050 the percent-
age of whites in the labor force is projected to decrease to
about 48.2 percent. By 2050 one of every three workers will
be of Hispanic origin, the percentage of black workers will
increase slightly to 12.4 percent, and Asians will make up
8.6 percent of all civilian workers. 32
This significant change in
the workforce parallels trends in the overall U.S. population.
Recently the Census Bureau announced that, for the first time,
about one in three residents of the United States is a racial
or ethnic minority. The largest and fastest-growing minority
group is Hispanics. In several states—California, Hawaii,
New Mexico, and Texas—and the District of Columbia, these
minority groups plus Asians, Native Americans, and Pacific
Islanders combine to make a population that is “majority
minority.” 33
During most of its history, the United States experienced
a surplus of workers. But that is expected to change. Lower
birth rates in the United States and other developed coun-
tries are resulting in a smaller labor force. An even more
substantial slowdown in the pace of growth of the labor
force is projected between now and 2018, as the baby boom
generation retires. 34
Employers are likely to outsource some work to factories
and firms in developing nations where birthrates are high
and the labor supply is more plentiful. But they will have to
compete for the best candidates from a relatively smaller and
more diverse U.S. labor pool. Employers will need to know
who these new workers are—and must be prepared to meet
their needs.
preparing for applicants who know the job market and insist
on the working conditions they value and the praise they were
raised to expect. Bruce Tulgan, founder of Rainmaker Thinking,
which specializes in researching generational differences, says
Millennials (a.k.a., Gen Y) – today’s young workers—tend
to be “high-maintenance” but also “high-performing,” having
learned to process the flood of information that pours in over
the Internet. 30
Many of these workers were raised by highly
involved parents who filled their lives with “quality” experi-
ences, so employers are designing work arrangements that are
stimulating, involve teamwork, keep work hours reasonable to
allow for outside activities, and provide for plenty of positive
feedback. Employers are also updating their recruiting tactics
to reach young workers where they are—online.
Rackspace Hosting, the open cloud company known for its excep-
tional customer service, branded Fanatical Support, has more than
5,000 employees in nine data centers on four continents, most of
whom are Millennials. The company does several unorthodox
(by traditional thinking) things to keep the creative juices flow-
ing among these younger employees. When Rackspace needed
more office space to accommodate the fast-growing company, it
bought a defunct 1.2 million square foot mall for $27 million in a
suburb of San Antonio, Texas. Responding to employees’ (known
as Rackers) desire for a creative, inspiring space to work and
engage one another, Rackspace renovated the inside and outside
of the mall so that it would look and function like the Millennial-
inspired campuses at Google, Amazon, and Microsoft. In 2014,
The Castle, as the company’s headquarters is known, is home to
more than 3,000 Rackers who enjoy the fol-
lowing “quirky perqs”: a stainless steel silver
two-story slide, a life-sized chessboard, con-
ference (getaway) rooms named after break-
fast cereals and TV game shows, red bouncy
balls to use for hallway races, a video arcade
to hold Mortal Kombat competitions, and sta-
tionary gondolas in which to hold meetings.
This Millennial-friendly approach is help-
ing Rackspace earn considerable respect and
success in the cloud space. Net revenue at the
end of 2013 was $1.534 billion, an increase of
17.2 percent over that of 2012. 31
1.3 | Tomorrow’s Workers Will Be More Varied Than Ever
Until recently, white American-born males
dominated the U.S. workforce. This group
still constitutes the largest percentage of
workers—about 68 percent of U.S. work-
ers are white, and more than half of them
are male—but its share of the labor force
Exhibit 9.5 Percentage of the projected U.S. labor force by race and Hispanic origin (2010 to 2050)
0
10
20
30
40
50
60
70
2010
White
Hispanic
Black
Asian
2030 2050
Source: Bureau of Labor Statistics, “Labor Force (Demographic) Data,” news release, March 11, 2010, http://www.bls.gov .
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202 PART 3 | Organizing
campuses take advantage of phased retirement, and the concept
is catching on in many other public and private organizations.
Other strategies include making workplace adaptations to help
older workers cope with the physical problems they experience
as they age, such as poorer vision, hearing, and mobility.
2 | WELL-MANAGED DIVERSITY AND INCLUSION: A COMPETITIVE ADVANTAGE
Many organizations now view diversity from a more practical,
business-oriented perspective, as a powerful tool for building
competitive advantage. A study by the Department of Labor’s
In addition, the median age of America’s workforce is
rising as the number of older workers swells while the num-
ber of young workers grows only slightly. Industries such as
nursing and manufacturing are already facing a tremendous
loss of expertise as a result of downsizing and a rapidly aging
workforce. Many other industries ranging from education to
nuclear plant maintenance will soon be in a similar situation. 35
On the plus side, almost 70 percent of workers between the
ages of 45 and 74 told researchers with AARP (formerly the
American Association of Retired Persons) that they intend to
work in retirement. Retirees often return to the workforce at the
behest of their employers, who can’t afford to lose the knowl-
edge accumulated by longtime employees, their willingness to
work nontraditional shifts, and their reliable work habits, which
have a positive effect on the entire work group. As Exhibit 9.6
illustrates, recent research suggests that workers aged 65 or
older are more engaged in their work than younger employ-
ees. Organizations benefit from having engaged or emotionally
connected workers because they tend to be more enthusiastic
and productive. 36
To prevent an exodus of talent, employers need strategies
to retain and attract skilled and knowledgeable older workers.
Phased retirement plans that allow older employees to work
fewer hours per week is one such strategy. Almost one-third
of retiring faculty members at 16 University of North Carolina
LO2 Explain how diversity, if well managed, can give organizations a competitive edge
Exhibit 9.6 Percentage of employee engagement by worker age
0
10
20
30
40
50
60
70
80
Age 18–29
% Engaged
Age 30–44 Age 45–65 Age 65 or older
% Disengaged
Source: Adapted from N. Blacksmith and J. Harter, “Majority of American Workers Not Engaged in Their Jobs,” Gallup Poll (Online), October 28, 2011, http://www.gallup.com .
Glass Ceiling Institute showed that the
stock performance of firms that were
high performers on diversity- related
goals was over twice as high as that
of other firms. In another recent study,
companies with the highest percentage
of women among senior managers had
a significantly higher return to share-
holders than companies with the lowest
percentage. Conversely, announce-
ments of damage awards from discrim-
ination lawsuits frequently hurt stock
returns. 37
Managing a diverse workforce
presents many advantages:
• Ability to attract and retain motivated employees —Companies with a rep- utation for providing opportunities for diverse employees will have a compet- itive advantage in the labor market. In addition, when employees believe their differences are not merely tolerated but valued, they may become more loyal, productive, and committed.
• Better perspective on a differentiated market —Just as women and minori- ties may prefer to work for an employer that values diversity, they may prefer
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CHAPTER 9 | Managing Diversity and Inclusion 203
3 | A DIVERSE AND INCLUSIVE WORKFORCE: CHALLENGING TO MANAGE
Despite the laws guaranteeing equal opportunity and the business
advantages of diversity and inclusion, every year thousands of law-
suits are filed complaining of discrimination and unfair treatment,
some involving large and well-respected firms. 41
Even in compa-
nies that are careful to avoid discrimination in hiring and pay, man-
aging diversity can be difficult. Managers with all the goodwill in
the world sometimes find it harder than they expected to get people
from different backgrounds to work together for a common goal. 42
Becoming an effective manager of a diverse organization
requires identifying and overcoming several challenges:
to patronize such organizations. Similarly, each new generation has its own set of values and experiences, so diversity in ages can help the organization relate to more age groups of customers. A diverse workforce can give a company greater knowledge of the prefer- ences and habits of this diversified marketplace, so it can design products and develop marketing campaigns to meet those consum- ers’ needs, nationally and internationally.
• Ability to leverage creativity and innovation in problem solving — Work team diversity promotes creativity and innovation because people from different backgrounds hold different perspectives. With a broader base of experience from which to approach a prob- lem, diverse teams, when effectively managed, invent more options and create more solutions than homogeneous groups do. They also are freer to deviate from traditional approaches and practices and are less likely to succumb to “groupthink.” 39
• Enhancement of organizational flexibility —A diverse workforce can make organizations more flexible because successfully managing diversity requires a corporate culture that tolerates many different styles and approaches. Less restrictive policies and procedures and less standardized operating methods enable organizations to be more flexible and better able to respond quickly to environmental changes.
Executives at Aetna, Denny’s, and FedEx are so convinced
of the competitive potential of a diverse workforce that they tie
a portion of management compensation to success in recruiting
and promoting minorities and women. 40
LO3 Identify challenges associated with managing a diverse workforce
Women are almost as likely as men to take jobs in science, engineering, and technology but are far more likely to quit, primarily because they feel isolated, lack mentors, find the work culture hostile, and are pressured to work long or rigid hours. 38
Did You Know?
Percentage of workers in entry-level science, engineering, and technology (SET) jobs
Women
Men
0 20 40 60 80
41%
59%
Percentage of SET workers who quit after a decade
Women
Men
0 20 40 60 80
52%
26%
• Unexamined assumptions —Seeing the world from someone else’s per- spective can be difficult because our own assumptions and viewpoints seem so normal and familiar. For example, heterosexuals may not even think before putting a picture of their loved ones on their desks because the practice is so common and accepted; but for lesbian, bisexual, gay, or transgender (LBGT) employees, dis- playing such a picture may cause considerable anxiety. Other unexam- ined assumptions involve the roles of men and women—for example, the assumption that women will shoul- der the burden of caring for children, even if it conflicts with the demands of work. In a recent study, research- ers sent employers résumés that were identical except that some bore a male name and others a female name, and half implied that the person submitting the résumé was a parent. Employers were less likely to invite the supposed parents for an interview—but only if the name was female. 43 Since the résumés were otherwise identical, it appears that people make assump- tions about mothers that do not apply
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204 PART 3 | Organizing
capabilities, aspirations, and motivations. Women may be stereo- typed as not dedicated to their careers, older workers as unwilling to learn new skills, minority group members as less educated or capable. Stereotypes may cost the organization dearly by stifling employees’ ambition so that they don’t fully contribute. Research supports the idea that people perform better when they expect they can. 46 Unless managers are aware of their own and their employ- ees’ stereotypes, the stereotypes can shape important actions. For instance, employees labeled as unmotivated or emotional will be given less stress-provoking (and perhaps less important) jobs than their coworkers, perhaps resulting in lower commitment, higher turnover, and underused skills. 47
For all these reasons and more, managing diversity is not
easy. Yet managers must confront these issues. They need to
develop the skills and strategies diversity requires if they and
their organizations are to succeed in our increasingly multicul-
tural business environment.
4 | MULTICULTURAL ORGANIZATIONS
To capitalize on the benefits and minimize the costs of a
diverse workforce, managers can begin by examining their
organization’s prevailing assumptions about people and cul-
tures. Exhibit 9.7 shows some of the fundamental assumptions
that may exist. Based on these assumptions, we can classify
organizations as one of three types and describe their implica-
tions for managers:
1. A monolithic organization has very little cultural integration; its employee population is highly homogeneous. For example, in hiring, an organization might favor alumni of the same college, perhaps target- ing members of fraternities who are enthusiastic about the school’s football team. When a monolithic organization does employ people from groups other than the norm, they primarily hold low- status jobs. Minority group members must adopt the norms of the majority to sur- vive. This fact, coupled with small numbers, keeps conflicts among
to fathers or to childless women. In an organization that is oblivious to these different perspectives, managers may have more difficulty developing an enthusiastically shared sense of purpose.
• Lower cohesiveness —Diversity can decrease cohesiveness, defined as how tightly knit the group is and the degree to which group mem- bers act and think in similar ways. Cohesiveness is lower because of differences in language, culture, and/or experience. When mistrust, miscommunication, stress, and attitudinal differences reduce cohe- siveness, productivity may decline. This may explain the results of a study showing greater turnover among store employees who feel they are greatly outnumbered by coworkers from other racial or
ethnic groups. 44 In a diverse group, managers need to build cohe- siveness by establishing common goals and values.
• Communication problems —Perhaps the most common negative effect of diversity, communication problems include misunder- standings, inaccuracies, inefficiencies, and slowness. Speed is lost when not all group members are fluent in the same language or when additional time is required to explain things. Diversity can also lead to errors and misunderstandings. Group members may assume they interpret things similarly when they in fact do not, or they may disagree because of their different frames of reference. 45 For example, if managers do not actively encourage and accept the expression of different points of view, some employees may be afraid to speak up at meetings, giving the manager a false impres- sion that consensus has been reached.
• Mistrust and tension —People prefer to associate with others who are like themselves. This normal, understandable tendency can lead to misunderstanding, mistrust, and even fear of those who are different. For example, if women and minority group members are routinely excluded from joining white male colleagues for lunch or at business gatherings, they may feel excluded by their colleagues. Similarly, tension often develops between people of different ages—for example, what one generation might see as a taste- less tattoo may be a creative example of body art for a member of another generation. Such misunderstandings can cause stress, tension, and even resentment, making it harder for people to work productively together.
• Stereotyping —We learn to interpret the world in a certain way based on our backgrounds and experiences. Our interests, val- ues, and cultures filter, distort, block, and select what we per- ceive. We see and hear what we expect to see and hear. Group members often stereotype their “different” colleagues rather than accurately perceive and evaluate those persons’ contributions,
LO4 Define monolithic, pluralistic, and multicultural organizations
“Among CEOs of Fortune 500 companies, 58 percent are six feet or taller . . . Most of us, in ways we are not entirely aware of, automatically associate leadership
with imposing physical stature.” — Malcolm Gladwell
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● Wayne Embry became the first NBA African American general manager in
1972 when he was named to the post by the Milwaukee Bucks.
CHAPTER 9 | Managing Diversity and Inclusion 205
5 | HOW ORGANIZATIONS CAN CULTIVATE A DIVERSE WORKFORCE
An organization’s plans for becoming multicultural and making
the most of its diverse workforce should include five components:
1. Securing top management’s leadership and commitment.
2. Assessing the organization’s progress toward goals.
groups low. Discrimination and prejudice typically pre- vail, informal integration is almost nonexistent, and minority group members do not identify strongly with the company.
2. Pluralistic organizations have a more diverse employee population and take steps to involve peo- ple from different backgrounds. These organizations use an affir- mative action approach, actively trying to hire and train a diverse workforce and to prevent any discrimination against minority group members. They typically have much more integration than do monolithic organizations, but as in monolithic organizations, minority group members tend to be clustered at certain levels or in par- ticular functions. Because of greater cultural integration, affirmative action programs, and training programs, the pluralistic organization has some acceptance of minority group members into the informal network, much less discrimina- tion, and less prejudice. With improved employment opportunities, minority group members feel greater identification with the organiza- tion. However, resentment of majority group members, coupled with the greater number of women and minorities, creates more conflict.
3. In multicultural organizations , diversity not only exists but is valued. In contrast to the pluralistic organization, which fails to address the cultural aspects of integration, these organizations fully integrate minority group members both formally and infor- mally. But managers in such organizations do not focus primarily on employees’ visible differences, like race or sex. Rather, managers value and draw on the experience and knowledge employees bring to the organization and help it achieve agreed-upon strategies and goals. 48 The multicultural organization is marked by an absence of prejudice and discrimination and by low levels of intergroup con- flict. Such an organization creates a synergistic environment in which all members contribute to their maximum potential and the advantages of diversity can be fully realized. 49
monolithic organization an organization that has a low degree of structural integration—employing few women, minorities, or other groups that differ from the majority—and thus has a highly homogeneous employee population
pluralistic organization an organization that has a relatively diverse employee population and makes an effort to involve employees from different gender, racial, or cultural backgrounds
multicultural organization an organization that values cultural diversity and seeks to utilize and encourage it
LO5 List steps managers and their organizations can take to cultivate diversity
Dimension Misleading Assumption More Accurate Assumption
Homogeneity–heterogeneity We are a melting pot; we are all the same. We are more like a stew. Society consists of different groups.
Similarity–difference “They” are all just like me. There are no real differences.
People exhibit both differences and similarities compared to me.
Parochialism–equifinality Our way of living and working is the only way. There are many distinct ways of reaching goals, living, and working.
Ethnocentrism–culture contingency Our way is the best way; all other approaches are inferior versions of our way.
There are many different and equally good ways to reach goals; the best way depends on the people involved.
Source: Adapted from N. J. Adler, “Diversity Assumptions and Their Implications for Management,” Handbook of Organization, 1996.
Exhibit 9.7 Misleading and more accurate assumptions about diversity
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206 PART 3 | Organizing
Adequate funding must be allocated to the diversity effort to
ensure its success. Also, top management can set an exam-
ple for other organization members by participating in diver-
sity programs and making participation mandatory for all
managers.
As we mentioned earlier, some organizations have established
corporate offices or committees to coordinate the companywide
diversity effort and provide feedback to top management. Intel
hired a chief diversity officer and Avon a director of multicul-
tural planning and design. Other companies prefer to incorporate
diversity management into the function of director of affirmative
action or EEO.
The work of managing diversity cannot be done by top man-
agement or diversity directors alone. Many companies rely on
minority advisory groups or task forces to monitor organiza-
tional policies, practices, and attitudes; assess their impact on
the diverse groups within the organization; and provide feed-
back and suggestions to top management. At Equitable Life
Assurance Society, employee groups meet regularly with the
CEO to discuss issues pertaining to women, African Americans,
and Hispanics and make recommendations for improvement.
At Honeywell, disabled employees formed a council to discuss
their needs. They proposed and accepted an accessibility pro-
gram that went beyond federal regulations for accommodations
of disabilities.
As you can see, progressive companies are moving from
asking managers what they think minority employees need and
toward asking the employees themselves what they need.
5.2 | Conduct an Organizational Assessment
The next step in managing diversity is to routinely assess the
organization’s workforce, culture, policies, and practices in
areas such as recruitment, promotions, benefits, and compen-
sation. Managers may evaluate whether they are attracting their
share of diverse candidates from the labor pool and whether
the needs of their customers are being addressed by the current
composition of their workforce. The objective is to identify
areas where there are problems or opportunities and to make
recommendations when changes are needed. For example,
Cisco measures several positive outcomes that it associates
with being diverse and inclusive, including financial growth,
employee engagement, and customer loyalty. The firm’s man-
agers believe that leveraging diversity is a critical ingredient as
it grows into a global company. 52
3. Attracting employees.
4. Training employees in diversity.
5. Retaining employees.
A recent study examining the performance of hundreds
of companies over a 30-year period found that organizations
in which responsibility for achieving diversity targets was
assigned to particular individuals or groups made the most
progress in increasing their share of female and black work-
ers. Moderate change occurred in companies with mentoring
and networking programs, but formal diversity training pro-
grams had little effect unless the organizations also used the
other methods. 50
Thus cultivating diversity needs to be a well-
planned organizationwide effort in which each element is sup-
ported by the personal commitment of individual managers,
who address this issue as seriously as they do other manage-
ment challenges. These managers actively try to develop the
skills, understanding, and practices that enable people of every
background to do their best work in the common pursuit of the
organization’s goals.
The National Basketball Association (NBA) has cultivated diver-
sity throughout its history; in fact, it currently has the highest
percentage of minority vice presidents and league office manag-
ers in the history of men’s sports. Fifteen percent of NBA team
vice presidents and 34 percent of the professionals who work in
the league office are minorities. The NBA also has nine African
American head coaches, and nearly half of the assistant coaches
are minorities. NBA spokesperson Brian McIntyre reports that
this is business as usual for the organization. He says NBA com-
missioner David Stern “has long felt that a diverse workplace is
the only workplace.” 51
5.1 | Start by Securing Top Managers’ Commitment
Obtaining top management’s leadership and commitment is
critical for diversity programs to succeed. Otherwise the rest
of the organization will not take the effort seriously. One way
to communicate this commitment to all employees—and to
the external environment—is to incorporate the organization’s
attitudes about diversity into the corporate mission statement
and into strategic plans and objectives. Managers’ compensa-
tion can be linked directly to accomplishing diversity goals.
“Recognize yourself in he and she who are not like you and me.”
— Carlos Fuentes
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CHAPTER 9 | Managing Diversity and Inclusion 207
and family policies are now one of the most important recruit-
ing tools. Employers that have adopted onsite child care report
decreased turnover and absenteeism and improved morale. In
addition to providing child care, many companies now assist
with care for elderly dependents, offer time off to care for sick
family members, provide parental leaves of absence, and offer
various benefits that can be tailored to individual family needs.
Some companies are accommodating the needs and concerns
of dual-career couples by limiting relocation requirements or
providing job search assistance to relocated spouses.
Alternative Work Arrangements Another way managers accommodate diversity is to offer flexible work schedules and
arrangements. Stiff demand for talented employees is motivat-
ing companies to accommodate the needs of employees with
family responsibilities. For example, Agilent Technologies
offers its employees a variety of flexible work arrangements,
including part-time, telecommuting, and job sharing. The firm’s
goal is to “be the best place to work for everyone.” 55
Other creative work arrangements include compressed
workweeks (e.g., four 10-hour days) and job sharing, in which
two part-time workers share one full-time job. Another option
to accommodate working mothers and disabled employees is
teleworking (working from home) or telecommuting (working
from home via computer hookup to the main work site).
5.4 | Train Employees to Understand and Work with Diversity
As you learned earlier, employees can be developed in sev-
eral ways. Traditionally, most management training was based
on the unstated assumption that “managing” means managing
a homogeneous, often white male, full-time workforce. But
gender, race, culture, age, educational, and other differences
create an additional layer of complexity. 56
Diversity training
programs attempt to identify and reduce hidden biases and
develop the skills needed to manage a diversified workforce
effectively.
The majority of U.S. organizations sponsor some sort of
diversity training. Typically diversity training has two compo-
nents: awareness building and skill building.
Awareness Building Awareness building is designed to increase recognition of the meaning and importance of valuing
diversity. 57
Its aim is not to teach specific skills but to sensi-
tize employees to the assumptions they make about others and
the way those assumptions affect their behaviors, decisions,
and judgment. For example, male managers who have never
reported to a female manager may feel awkward the first time
they are required to do so. Awareness building can reveal this
concern in advance and help the managers address it.
To build awareness, trainers teach people to become famil-
iar with myths, stereotypes, and cultural differences as well
as the organizational barriers that inhibit the full contribu-
tions of all employees. They develop a better understanding of
5.3 | Attract a Diverse Group of Qualified Employees
Companies can attract a diverse, qualified workforce by using
effective recruiting practices, accommodating employees’ work
and family needs, and offering alternative work arrangements.
Recruitment A company’s image can be a strong recruiting tool. Companies with reputations for hiring and promoting all
types of people have a competitive advantage. Xerox gives
prospective minority employees reprints of an article that rates
the company as one of the best places for African Americans
to work. Abbott, Deloitte, and Well Star Health System,
after being named to Working Mother magazine’s 2013 Best Companies list, issued news releases on their websites—a
move partially aimed at attracting diverse job applicants. 53
Diversity is built into the origins of the Philadelphia law firm
of Caesar Rivise. The firm’s founder was Abraham Caesar, an
attorney specializing in intellectual property (such as patents
and trademarks). In 1926 Caesar could not land a job at one of
the local law firms because he was Jewish, so he founded his own
firm, later adding partner Charles Rivise. The two attorneys wrote
important reference books on patents, establishing a reputation
as experts.
Given Caesar’s early experiences, it’s not surprising that his
law firm committed itself to diversity in hiring. Stanley Cohen,
now a partner, recalls that when he joined the firm in the 1960s,
his secretary was a black man. Another Caesar Rivise employee
since the 1960s, Bernice Mims, graduated at the top of her South
Philadelphia High School class but lacked access to jobs because
she was black and some employers stipulated “no Jews or
Negroes.” Caesar hired Mims as a law clerk, and she remained
loyal to the firm, eventually working her way up to manager of
human resources.
Today Caesar Rivise builds on its historical commitment to
diversity by sponsoring diversity fellowships (tuition assistance
and internships) at Drexel University’s Earle Mack School of Law.
Partnering with Drexel is a good strategic fit because the university
emphasizes technology and science—backgrounds that are import-
ant for working with corporate clients on technical matters. 54
Many disabled persons and economically disadvantaged peo-
ple are physically isolated from job opportunities. Companies can
bring information about job opportunities to the source of labor,
or they can transport the labor to the jobs. Polycast Technology
in Stamford, Connecticut, contracts with a private van company
to transport workers from the Bronx in New York City to jobs
in Stamford. Days Inn recruits homeless workers in Atlanta and
houses them in a motel within walking distance of their jobs.
Accommodating Work and Family Needs More job seekers today are putting family needs first. Corporate work
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208 PART 3 | Organizing
5.5 | Retain Talented Employees As replacing qualified and experienced workers becomes more
difficult and costly, retaining good workers is becoming much
more important. Several policies and strategies can help man-
agers increase retention of all employees, especially those who
are “different” from the norm. 59
Support Groups Companies can form minority networks and other support groups to promote information exchange and
social support. Support groups provide emotional and career
support for members who traditionally have not been included
in the majority’s informal groups. They also can help diverse
employees understand work norms and the corporate culture.
At Apple headquarters, support groups include a Jewish cul-
tural group, a gay/lesbian group, an African American group,
and a technical women’s group. Avon encourages employees to
organize into African American, Hispanic, and Asian networks
by granting them official recognition and assigning a senior
manager to provide advice. These groups help new employees
adjust and give management feedback about problems that con-
cern the groups.
Coca-Cola believes in diversity. It has established several groups—
known as diversity advisory councils and business resource
groups—to provide feedback to upper management to ensure that
employees feel included and valued. The diversity advisory coun-
cils have representatives from all functions and business units,
and provide recommendations to senior management about how
best to foster diversity within Coca-Cola. The goal of the business
resource groups is to provide networking opportunities to employ-
ees who share similar interests and backgrounds.
Here is a sample of Coca-Cola’s business resource (support)
groups:
• African American —provides members with professional experi- ences through training and development and facilitates connec- tions to support the community.
• Asian/Pacific American —encourages member development and community engagement to better connect with key customers.
• Gay, lesbian, bisexual, and transgender (GLBT) —fosters an equita- ble work environment where its members feel a sense of commu- nity within the company.
• Latino —provides opportunities for members to develop, engage in the organization, and be involved in the community.
• Women —facilitates members’ careers by providing valuable opportunities for engagement and development, and helping sup- port personal and career success. 60
Mentoring To help individuals enter the informal network that provides exposure to top management and access to
information about organizational politics, many companies
have implemented formal mentoring programs. Mentors are
corporate culture, requirements
for success, and career choices
that affect opportunities for
advancement.
In most companies, the
“rules” for success are ambig-
uous, unwritten, and perhaps inconsistent with written pol-
icy. A common problem for women, minorities, immigrants,
and young employees is that they are unaware of many of the
unofficial rules that are obvious to people in the mainstream.
For example, organizations often have informal networks and
power structures that may not be apparent or readily available
to everyone. As a result, some employees may not know where
to go when they need to get an idea approved or want to build
support and alliances. For managers, valuing diversity means
teaching the unwritten “rules” or cultural values to those who
need to know them and changing the rules when necessary to
benefit employees and hence the organization. It also requires
inviting “outsiders” in and giving them access to information
and meaningful relationships with people in power.
Skill Building Skill building aims to develop the skills that employees and managers need to deal effectively with one
another and with customers in a diverse environment. Most
of the skills taught are interpersonal, such as active listening,
coaching, and giving feedback. Ideally the organizational
assessment is used to identify which skills should be taught,
tailoring the training to the specific business issues that were
identified. For example, if too many women and minorities
believe they lack helpful feedback, the skill-building program
can address that issue. Likewise, training in flexible scheduling
can help managers meet the company’s needs while accom-
modating and valuing workers who want to set aside time to
advance their education, participate in community projects, or
look after elderly parents. Tying the training to specific, mea-
surable business goals increases its usefulness and makes it
easier to assess.
The Transportation Security Administration provided a combina-
tion of awareness training and skill building to prepare its airport
security personnel to screen Muslim travelers without violating
their civil rights. The TSA employees were taught that the reli-
gious customs of Islam include the hajj, an annual pilgrimage to
Saudi Arabia. As a result, once a year air travelers include many
groups of these pilgrims. The employees learned to recognize that,
especially at the time of the hajj, women in head scarves travel-
ing with men in beards may be devoutly religious Muslims engag-
ing in a deeply personal religious journey. Besides teaching about
the customs and practices of Islam, the training prepared TSA
employees to perform their jobs without discriminating; for exam-
ple, they learned how to effectively screen passengers who were
wearing head coverings and what to do if passengers were trans-
porting holy water. 58
mentors higher-level managers who help ensure that high-potential people are introduced to top management and socialized into the norms and values of the organization
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CHAPTER 9 | Managing Diversity and Inclusion 209
limited by their geographic location or their likelihood of meet-
ing in the course of their daily work. 61
Career Development and Promotions To ensure that talented employees are not hitting a glass ceiling, companies
such as Deloitte & Touche and Honeywell have established
teams to evaluate the career progress of women, minorities,
and employees with disabilities and to devise ways to move
them up through the ranks. An extremely important step is to
make sure deserving employees get a chance at line positions.
Women in particular are often relegated to staff positions, like
human resources, with less opportunity to demonstrate they can
earn money for their employers. Career development programs
that give exposure and experience in line jobs to a wide range
of employees can make senior management positions more
available to them.
higher-level managers who help ensure that high-potential peo-
ple are introduced to top management and socialized into the
norms and values of the organization.
Aflac’s efforts to develop a diverse workforce include pro-
grams aimed at retaining employees by offering them oppor-
tunities for development and advancement. The insurance
company’s mentoring program prepares employees from
minority groups to move into management ranks. This program
is part of a culture that demonstrates respect for all employees in
a variety of ways, including forums where employees can share
information about their ethnic customs. Abbott Laboratories
operates a mentoring program where employees can find men-
tors online. Employees interested in having or being a mentor
submit profiles about themselves, and software suggests pos-
sible matches based on experiences, skills, and interests. The
advantage of the online relationships is that employees aren’t
Take Charge of Your Career Find a mentor (Before they all retire)
O ver the next couple of decades, hundreds of thousands of Baby Boomers will be retiring. Given the fact that there are about 80 million workers in this generational cohort, many experts are concerned that these retir- ees will take a great deal of organizational knowledge with them.
What can you do to help the organization as well as your own career? Find a mentor within the organization. If there is a formal procedure for matching mentors to mentees, sign up and try the program to see if it meets your needs and expectations. Unfortunately sometimes the match does not work out because the mentor is too busy, or there is no chemistry between the mentor and mentee. Another approach is for you to find your own mentor within the organization. Generally speaking, your immediate supervisor (and his or her immediate boss) is not the best choice because there may be things you want to share about your job that could reflect badly on him or her; so it may be prudent to look for someone else that is senior in the organization and not directly linked to your supervisor.
While it can be difficult to find the right mentor, one possible approach is to engage a few “mentor candidates” when you see them in the cafeteria, at a business function, in the hallways, or in the break room. You may want to ask them for their opinion about some proj- ect you are currently working on or a career tip regarding how to succeed in the organiza- tion; then listen carefully to how they respond. If they spend more than a couple of minutes with you giving meaningful and insightful feedback, this is usually a good sign that they may be taking an interest in you. If they seem rushed or slightly annoyed that you are asking for their opinion, they are unlikely to become a mentor.
Another approach is to offer to help a senior manager learn more about an area with which you are familiar. Some companies, like pub- lic relations firm Burson-Marsteller, sponsor “reverse mentoring” programs in which junior employees provide advice to senior executives on such topics as how to use social media to connect with customers. This program gives Millennial employees a chance to see another side of the organization by connecting with senior management.
Once you are reasonably sure that you have found someone from whom you can learn and who seems genuinely interested in mentoring you, cultivate your professional relationship by seeking and listening to her or his advice about additional work challenges or career issues. If the person turns out to be the right mentor, you will be amazed at how this relationship will benefit you personally and professionally.
Sources: J. M. Ivancevich and R. Konopaske, Human Resource Management, 12 ed. (New York: McGraw-Hill/Irwin, 2013); J. C. Meister and K. Willyerd, “Mentoring Millennials,” Harvard Business Review 88, no. 5 (May 2010), pp. 68–72; and S. Banjo, “A Perfect Match? For Generation Y, A Good Workplace Environment Is Crucial,” The Wall Street Journal, October 13, 2008, p. R9.
The right mentor can help you grow professionally
and personally.
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210 PART 3 | Organizing
in the future as the median age of the workforce contin-
ues to rise. In addition, the rise in the weight of the aver- age U.S. worker may raise disability concerns. Not only are
the familiar health consequences such as heart disease, joint
problems, and diabetes associated with increased weight, but
Systems Accommodation Managers can support diver- sity by recognizing cultural and religious holidays, dif-
fering modes of dress, and dietary restrictions, as well as
accommodating the needs of individuals with disabilities.
Accommodations for disability may become more important
F or many decades, companies deployed expatriates (and their families) to a specific international location like Tokyo, London, or Mexico City for a multiyear assignment. The firm would usually provide expatriates with relocation assistance, cost of living adjust- ments, a foreign service premium, income tax assistance, private schooling for children, in-country housing, training, and other per- quisites. However, there were some draw- backs associated with the use of long-term expatriates. The costs of sending an expatri- ate to another country for a few years often exceeded a million dollars. Also, the lack of language and cross-cultural skills, coupled with spouse or family adjustment issues, impeded some expatriates from performing to their full potential. Some even failed and returned early from their assignments. Once back, turnover was often an issue. After completing their overseas assignments, approximately 20 percent of repatriates left their employers within one year of their return. Not only was this an unacceptably low return on investment, but the combi- nation of all of these factors contributed to fewer managers within the firm being willing to take an expatriate assignment.
These drawbacks to long-term expatri- ate assignments, combined with today’s less expensive air travel and new communication technologies, have paved the way for a new type of international manager. Known by different names—flexpatriates, short-term assignees, extended business travelers, or virtual expatriates—these international managers travel to one or more countries for short-term projects or to meet with in- country stakeholders (such as customers, suppliers, government officials, managers of a joint venture, and alliance partners). Also, these international travelers do not relocate
overseas, and they often have domestic job responsibilities in the home country.
These new international assignments can be quite varied. While doing your regular marketing job in the United States, you might be asked to staff your company’s booth at trade shows in China, Russia, and Brazil for a week at a time at different points throughout the year. Or as a network analyst, you might be sent to Bangalore, India, for three months to help install a network in your company’s new venture. Also, these assignments offer you the opportunity to gain some basic for- eign language and cross-cultural skills, and develop your knowledge about how busi- ness is conducted in different countries. These skills and perspectives are valuable to employers as globalization and competi- tion affect companies of all types and sizes.
Here are some ideas for how to increase your chances of landing one of these new types of international assignments:
1. Let them know. Discuss your interest in doing more international work with your supervisor and the human resource
department. If your organization has a skills or career interests database, be sure to update it.
2. Study a foreign language. Find out into which countries your organization is planning to expand over the next few years. Choose the country with the larg- est market and then study its language. You will not become fluent overnight, but you will send a strong message to upper management that you are serious about helping your firm succeed overseas.
3. Volunteer to be an “ambassador.” When- ever clients or suppliers from another country are planning on visiting your company in the United States, volunteer to pick them up at the airport, show them the local sights, and take them out to eat. While these activities probably fall out- side your normal job duties, they will give you additional opportunities to develop your international skills and network. This extra effort could help you get the nod when the next international assign- ment becomes available.
Move Over Expatriates: Here Comes a New Breed of International Managers
• Why do you think shorter-term, traveling international assignments have become popular alternatives to multiyear expatriate assignments?
• To what degree will companies need employees with foreign language, cross- cultural experience, and other international skills in the next 5–10 years? How will these employees help firms compete globally?
SOURCES: E. Krell, “Taking Care of Business Abroad,” HRMagazine 56, no. 12 (December 2011),
pp. 44–49; B. Demel and W. Mayrhofer, “Frequent Business Travelers across Europe: Career Aspirations and Implications,” Thunderbird International Business Review 52, no. 4 (July/ August 2010), pp. 301–11; M. Harvey, L. Hartmann, H. Mayerhofer, and M. Moeller, “Corralling the ’Horses’ to Staff the Global Organization,” Organizational Dynamics 39, no. 3 (2010), pp. 258–68; and R. Konopaske, C. Robie, and J. M. Ivancevich, “Managerial Willingness to Assume Traveling Short-Term and Long-Term Global Assignments,” Management International Review 49, no. 3 (2009), pp. 359–87.
Discussion Questions
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● Darden Restaurants’ chairman of the board chief
executive officer Clarence Otis is shown in Darden’s
offices in Orlando, Florida. Selling under such brands
as Olive Garden, LongHorn Steakhouse, and Bahama
Breeze, Darden Restaurants owns and operates 2,100
restaurants, has 200,000 employees, and serves 425
million meals per year.
CHAPTER 9 | Managing Diversity and Inclusion 211
the region (third- country
national) to assist with
the start-up. While most corpo-
rations use some com-
bination of all three
types of employees,
there are advantages
and disadvantages of
each. Colgate-Palmolive
and Procter &
Gamble use
expatriates to get their products to interna-
tional markets more quickly. AT&T and
Toyota have used expatriates to transfer
their corporate cultures and best practices
to other countries—in Toyota’s case, to
its U.S. plants. But sending employees
abroad can cost three to four times as
much as employing host-country nation-
als, and in many countries, the personal
security of expatriates is an issue. As a
result, firms may send their expatriates
on shorter assignments and communicate
internationally via videoconferencing,
phone, text, e-mail, and other electronic
means. Local employees are more avail-
able, tend to be familiar with the culture
and language, and usually cost less
because they need not be relocated. At Kraft Foods, a policy
of letting local marketing experts make decisions about local
markets freed Chinese marketers to redesign the Oreo cookie
so it would be more palatable to Chinese consumers’ tastes
(and easier on their wallets). 64
In addition, local governments
often provide incentives to companies that create good jobs
for their citizens, or they may restrict the use of expatriates.
The trend away from using expatriates in top management
positions is especially apparent in companies that truly want
to create a multinational culture. In Honeywell’s European
division, many of the top executive positions are held by
non-Americans. 65
6.1 | Global Managers Need Cross-Cultural Skills
Working internationally can be stressful, even for experienced
global managers. Stress can originate from a variety of sources,
including culture shock, language barriers, and differences in
work values.
Given the challenges, many overseas assignments fail. While
conclusive information is lacking about how often expatriates
underperform overseas or fail (defined as returning early from
the international assignment), there is evidence that certain des-
tinations like China are more challenging for expatriates. 67
Each
failed assignment may cost tens of thousands to hundreds of
one study found that obese workers had many more
workplace injury claims and absences related to
injuries. 62
This pattern suggests that managers of
the future will be even more concerned than in
the past with keeping their workers of all sizes
on the job by maintaining safe workplaces and
offering benefits that encourage healthy life-
styles (possibly through company-sponsored fit-
ness programs).
Accountability As we noted at the beginning of this section, one of the most effective ways
to ensure that diversity efforts succeed is
to hold managers accountable for hir-
ing and developing a diverse workforce.
Organizations must ensure that their
performance appraisal and reward sys-
tems reinforce the importance of effec-
tive diversity management. At PepsiCo,
each executive reporting to the CEO is
assigned responsibility for employee
development of a different group—for
example, the company’s women or
Latinos or gay and lesbian employees.
The executive responsible for that group
must identify leadership talent, learn
group members’ concerns, identify areas
where support is needed, and identify
plans for addressing these issues. 63
6 | MANAGING ACROSS BORDERS
Adding to the challenges and opportunities of diversity, today’s
managers are increasingly responsible for managing employees
from other countries or managing operations in other countries.
When establishing operations overseas, headquarters executives
have a choice among sending expatriates (individuals from the parent country), using host-country nationals (individuals from the host country), and deploying third-country nationals (indi- viduals from a country other than the home country or the host
country). For example, assume planners at Google headquarters
in Mountain View, California, decide to establish a new office
in Brazil. To get it up and running, they send an American exec-
utive (expatriate) who has international experience to be general
manager of the new operation. Once there, the expatriate will
likely hire several Brazilian employees (host- country nationals)
and possibly an Argentinian or other experienced manager from
LO6 Summarize the skills and knowledge about cultural differences needed to manage globally
expatriates parent- company nationals who are sent to work at a foreign subsidiary
host-country nationals individuals from the country where an overseas subsidiary is located
third-country nationals individuals from a country other than the home country or the host country of an overseas subsidiary
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212 PART 3 | Organizing
• Cultural adventurousness —The person enjoys the challenge of working in countries other than his or her own.
• Desire for opportunities to learn —The candidate takes advantage of opportunities to do new things.
• Openness to criticism —The person does not appear brittle, as if criticism might cause him or her to break.
• Desire for feedback —He or she pursues feedback even when others are reluctant to give it.
• Flexibility —The candidate doesn’t get so invested in things that he or she cannot change when something doesn’t work.
Companies such as BP, Global Hyatt, and
others with large international staffs have exten-
sive training programs to prepare employees for
international assignments. Other organizations,
such as Coca-Cola, Motorola, Chevron, and
Mattel, have extended this training to include
employees located in the United States who deal
in international markets. These programs focus
on areas such as language, culture, and career development. As
shown in Exhibit 9.8 , companies can take several steps to pre-
vent global assignees from failing.
Managers who are sent on an overseas assignment usually
wonder about the effect such an assignment will have on their
careers. Selection for a post overseas is usually an indication that
they are being groomed to become more effective managers in an
era of globalization. Also, they often have more responsibility,
challenge, and operating leeway than they might have at home.
Yet they may be concerned that they will be “out of the loop”
on key developments back home. Good companies and man-
agers address that issue with effective communication between
subsidiaries and headquarters and by a program of visitations to
and from the home office. Communication technology makes
it easy for expatriates to keep in touch with colleagues in their
thousands of dollars. 68
Typically the causes for
failure extend beyond technical skills to include
personal and social issues. In a recent survey
of human resource managers around the globe,
two-thirds said the main reason for failure is
family issues, especially dissatisfaction of the
employee’s spouse or partner. 69
The problem
may be compounded in this era of dual-career
couples, in which one spouse may have to give
up his or her job to accompany the expatriate
manager to the new location. Complicating mat-
ters is the fact that it is difficult in most coun-
tries to obtain a work visa for the spouse of an
expatriate. To ensure that an overseas posting
will succeed, managers can encourage employ-
ees to talk to their spouses about what they will
do in the foreign country.
For both the expatriate and the spouse,
adjustment requires flexibility, emotional sta-
bility, empathy for the culture, communication
skills, resourcefulness, initiative, and diplo-
matic skills. 70
When Kent Millington took the
position of vice president of Asia operations for an Internet
hosting company, his wife Linda quit her job to move with
him to Japan. Especially for Linda Millington, the first three
months were difficult because she didn’t speak Japanese, found
the transit system confusing, and even struggled to buy food
because she couldn’t translate the labels. But she persevered
and participated in classes and volunteer activities. Eventually
she and her husband learned to enjoy the experience and appre-
ciated the chance to see just how well they could tackle a
challenge. 71
The following traits may be associated with candidates who
are likely to succeed in a global environment: 72
• Sensitivity to cultural differences —When working with people from other cultures, the candidate tries hard to understand their perspective.
• Business knowledge —The candidate has a solid understanding of the company’s products and services.
• Courage to take a stand —The person is willing to take a stand on issues.
• Bringing out the best in people —He or she has a special talent for dealing with people.
• Integrity —The person can be depended on to tell the truth regard- less of circumstances.
• Insightfulness —The candidate is good at identifying the most important part of a complex problem.
• Commitment to success —He or she clearly demonstrates commit- ment to seeing the organization succeed.
• Risk taking —The candidate takes personal as well as business risks.
• Use of feedback —The candidate has changed as a result of feedback.
Most of the growth in IBM’s workforce is occurring in India, where employees handle software development, services, and customer support. IBM has more employees in India than in any other country outside the United States. 66
Did You Know?
Structure the assignment clearly.
• Be clear about reporting relationships, job responsibilities, and job objectives.
Use valid selection methods.
• Methods should assess both technical skills and personal factors.
Prepare expatriates and their families.
• Send them on a “look-see” trip, and provide training and in-country support.
Assign mentors. • Assign home office and in-country mentors.
Encourage communication.
• Connect with the expatriate via frequent texting, e-mailing, and videoconferencing.
Measure performance.
• Link performance measures to the objectives of the assignment.
Develop a reentry plan.
• Before the assignment ends, find the repatriate a job that utilizes newly acquired skills.
Exhibit 9.8 Ways to prevent failed global assignments
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CHAPTER 9 | Managing Diversity and Inclusion 213
our everyday behavior, so we
tend to adapt poorly to situ-
ations that are unique or for-
eign to us. Without realizing it,
some managers may even act
out of ethnocentrism —a ten- dency to judge foreign people
or groups by the standards of
one’s own culture or group, and
to see one’s own standards as
superior. Such tendencies may
be totally unconscious—for
example, the assumption that “in England they drive on the wrong side of the road” rather than merely on the left. Or they may reflect
a lack of awareness of the values underlying a local culture—for
example, an assumption that a culture does not air American tele-
vision programming because it is backward, when it is actually
committed to maintaining its traditional values and norms.
Assumptions such as these are one reason why people
traveling abroad frequently experience culture shock —the disorientation and stress associated with being in a foreign
environment. Managers are better able to navigate this transi-
tion if they are sensitive to their surroundings, including social
norms and customs, and readily able to adjust their behavior to
such circumstances. 76
Employers can help by identifying some
of the cultural norms to expect and by establishing performance
measures for behaviors that contribute to success in the host
country (for example, the types of communication and direc-
tion employees will expect from their manager).
A wealth of cross-cultural research has been conducted on
the differences and similarities among various countries. Geert
Hofstede, for example, has identified four dimensions along
which managers in multinational corporations tend to view cul-
tural differences:
1. Power distance —the extent to which a society accepts the fact that power in organizations is distributed unequally.
2. Individualism/collectivism —the extent to which people act on their own or as a part of a group.
3. Uncertainty avoidance —the extent to which people in a society feel threatened by uncertain and ambiguous situations.
4. Masculinity/femininity —the extent to which a society values quan- tity of life (e.g., accomplishment, money) over quality of life (e.g., compassion, beauty).
home country daily or even more often through e-mail, video-
conferencing, and phone calls. Alan Paul, an American journalist
working in China, says Internet phone service, a webcam, and
podcasts of favorite radio programs enable him to stay in touch
with family and friends back home, even to the extent that he has
to work hard to have “a fully engaged existence in China.” 74
Cross-cultural management extends beyond U.S. employees
going abroad and includes effective management of inpatriates — foreign nationals who are brought in to work at the parent com-
pany. These employees bring their employer extensive knowl-
edge about how to operate effectively in their home countries.
They are also better prepared to communicate their organiza-
tion’s products and values when they return. But they often have
the same types of problems as expatriates and may be even more
neglected because parent-company managers either are more
focused on their expatriate program or unconsciously see the
home country as normal—requiring no period of adjustment.
Yet the language, customs, expense, and lack of local commu-
nity support in the United States are at least as daunting to inpa-
triates as the experience of American nationals abroad.
6.2 | National Cultures Shape Values and Business Practices
In many ways, cultural issues are the most elusive aspect of
international business. In an era when modern transportation and
communication technologies have created a “global village,” it is
easy to forget how deep and enduring the differences can be. Even
though people everywhere drink Coke, wear blue jeans, and drive
Toyotas, we are not all becoming alike. Each country is unique
for reasons rooted in history, culture, language, geography, social
conditions, race, and religion. These differences complicate any
international activity and guide how a company should conduct
business across borders. For example, while working in Hong
Kong, Geoffrey Fowler discovered that his coworkers chose top-
ics for small talk— people’s weight, salary, and the sizes of their
apartments—that would horrify Americans. At the same time,
Chinese workers are put off by the American custom of combin-
ing lunch with a business meeting at which junior employees are
chewing away while a superior in the company is talking. 75
Ironically, while most of us would guess that the trick to work-
ing abroad is learning about a foreign culture, in reality our prob-
lems often stem from our being oblivious to our own cultural
conditioning. Most of us pay no attention to how culture influences
inpatriates foreign nationals transferred to work at the parent company
ethnocentrism the tendency to judge others by the standards of one’s group or culture, which are seen as superior
culture shock the disorientation and stress associated with being in a foreign environment
“ (Culture is) the collective programming of the mind distinguishing the members of one group or category
of people from another. 73 ” — Geert Hofstede
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214 PART 3 | Organizing
may have already begun to blur some of these distinctions. Still,
to suggest no cultural differences exist is equally simplistic.
Clearly, cultures such as the United States, which emphasize
“rugged individualism,” differ significantly from collectivistic
cultures such as those of Pakistan, Taiwan, and Colombia. And
to be effective in cultures that exhibit a greater power distance,
managers often must behave more autocratically, perhaps invit-
ing less participation in decision making.
In starting an insurance company in the United Arab Emirates,
Texas native Michael Weinberg has learned a lot about that coun-
try’s business culture. One surprise was the Arabs’ far looser
sense of time. On an early visit, Weinberg was doubtful when
his partners—both Lebanese American and more familiar with
the culture—assured him that showing up a few hours late for
an appointment would be fine. As it turned out, their hosts were
unruffled by their late arrival.
Traditionally, in Arabic culture, people’s activities fit around
the appointed times for prayer (related to the sun’s position) and
the climate’s cycles of heating and cooling. In addition, partici-
pants in a meeting focus more on the relationships being built than
on the next event on their calendar, so appointments often run lon-
ger than scheduled. These cultural norms result in a fluid under-
standing of time.
Still, visitors must be conscientious. They have to take into
account the status of their host; a higher-status person expects
visitors to be available as scheduled, even if that means a wait.
Weinberg has learned to use waiting time to catch up on his e-mail.
He also calls ahead to confirm meeting times and to notify his host
if he’ll be late.
Acknowledging the challenges of learning a culture, Weinberg
has also experienced the joys, noting the “hospitality, warmth,
love, education, and charity” of the Arab people he has met. 77
Effective managers are sensitive to these issues and consider
them in dealing with people from other cultures. In contrast to
people born in America, employees, coworkers, or customers
from other countries might tend to communicate less directly,
place more emphasis on hierarchy and authority, or make deci-
sions more slowly. For example, an American manager work-
ing in Japan sent an e-mail message to her American supervisor
and Japanese colleagues in which she pointed out flaws in the
process they were working on. The supervisor appreciated the
alert, but her colleagues were embarrassed by behavior they
considered rude; she should have inquired indirectly—say, by
wondering what might happen if such a problem did exist. In
general, managers of international groups can manage such
misunderstandings by acknowledging cultural differences
frankly and finding ways to work around them, by modifying
the group (e.g., assigning tasks to subgroups), by setting rules
to correct problems that are upsetting group members, or by
removing group members who demonstrate they cannot work
effectively within a particular situation. 78
Exhibit 9.9 graphs how 40 nations differ on the dimensions
of individualism/collectivism and power distance. Countries
like Australia, Great Britain, and the United States are indi-
vidualistic and exhibit small power distance. In other words,
employees from these cultures believe in individual achieve-
ment and rewards; and while they respect their superiors, they
will disagree with and question orders if they feel such behav-
ior is warranted. In contrast, Singapore, Colombia, and the
Philippines are collectivist and are characterized by large power
distance. Employees from these collectivist societies will often
place the needs of their group and family ahead of individual
needs. When attempting to motivate these individuals, expatri-
ate managers should consider using group-based rewards and
recognition programs. Also, employees from large power dis-
tance cultures will be less willing to openly question or pro-
vide feedback regarding their superiors’ ideas and orders. Of
course this depiction exaggerates the differences to some extent.
Many Americans prefer to act as part of a group, just as many
Taiwanese prefer to act individualistically. And globalization
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study tip 9
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CHAPTER 9 | Managing Diversity and Inclusion 215
• Work(aholic) schedules — Workers in countries with strong labor organizations often get many more weeks of vacation than American work- ers. Europeans in particular may balk at working on week- ends. Matters such as these are most helpfully raised and addressed at the beginning of the work assignment.
• E-mail —Parts of the world have not yet embraced e-mail and voice mail the way U.S. workers have. Often others prefer to communicate face to face. Particularly when lan- guage difficulties may exist, at the outset managers will probably want to avoid using e-mail for important matters.
• Fast-trackers —Although U.S. companies may take a young MBA graduate and put him or her on the fast track to man- agement, most other cultures still see no substitute for the wisdom gained through expe- rience. Experienced manag ers are often best for mentoring inpatriates.
• Feedback —Everyone appreci- ates praise, but other cultures tend to be less lavish in deliver- ing positive feedback than the United States. U.S. managers should keep this point in mind when they give foreign nation- als their performance reviews. 79
6.3 | International Management Introduces Complex Ethical Challenges
If managers are to function
effectively in a foreign setting,
they must understand the ways culture influences how they are
perceived and how others behave. One of the most sensitive
issues in this regard is how culture plays out in terms of ethical
behavior. 80
Issues of right and wrong get blurred as we move
from one culture to another, and actions that may be customary in
one setting may be unethical—even illegal—in another. The use
In addition, when working in the United States, foreign
nationals will encounter a number of work-related differences:
• Meetings —Americans and workers from some other countries may have different views about the purpose of meetings and how much time can be spent. Managers should make sure foreign nationals are comfortable with the American approach.
Exhibit 9.9 Positions of 40 countries on the power distance and individualism scales
(4) Small power distance/ collectivist
Collectivism
Individualism
Large power
distance
Small power
distance
(3) Small power distance/
individualist
CAN
USA
*
*
(2) Large power distance/individualist
(1) Large power distance/ collectivist
* SPA
* *
* *
*
* * *
* * * *
* *
* *
* *PAK COL TAI PER
CHL SIN
HOK YUG MEX
PHI
POR
GRE TUR
BRA IRA
JAP
VEN
THA
IND
ARG
SAF
FRA
BELITA
* *
* **
* *
* *
* * *
*
AUT ISR
FIN
NOR GER SWI
SWEIRE DEN
* NZL *
* *
*
NET * GBR
AUL
The 40 Countries (showing abbreviations used above)
ARG Argentina AUL Australia AUT Austria BEL Belgium BRA Brazil CAN Canada CHL Chile COL Colombia DEN Denmark FIN Finland
FRA France GBR Great Britain GER Germany (West) GRE Greece HOK Hong Kong IND India IRA Iran IRE Ireland ISR Israel ITA Italy
JAP Japan MEX Mexico NET Netherlands NOR Norway NZL New Zealand PAK Pakistan PER Peru PHI Philippines POR Portugal SAF South Africa
SIN Singapore SPA Spain SWE Sweden SWI Switzerland TAI Taiwan THA Thailand TUR Turkey USA United States VEN Venezuela YUG Yugoslavia
Source: From G. Hofstede, G.J. Hofstede, and M. Minkov, Cultures and Organizations, Software of the Mind, Third Revised Edition, 2010. Reprinted with permission of the author.
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216 PART 3 | Organizing
as engaged as domestic corporations in establishing and enforc-
ing standards for ethical behavior. In Chapter 4, we identified a
number of steps organizations should take. They include estab-
lishing and communicating the company’s values, measuring
performance in meeting ethical standards, rewarding employ-
ees at all levels for meeting those standards, and taking swift
but fair action when violations occur. The primary difference in
the international context is that these activities must be carried
out with foreign business partners and employees in any sub-
sidiary, franchise, or other company operation.
Interestingly, despite some obvious cultural differences,
research suggests that regardless of nationality or religion,
most people embrace a set of five core values:
1. Compassion.
2. Fairness.
3. Honesty.
4. Responsibility.
5. Respect for others.
These values lie at the heart of human rights issues and
seem to transcend more superficial differences among cultures.
Finding shared values allows companies to build more effec-
tive partnerships and alliances. As long as people understand
that there is a set of core values, perhaps they can permit differ-
ences in strategy and tactics. 84
To a large extent, the challenge of managing across borders
comes down to the philosophies and systems used to manage
people. In moving from domestic to international management,
managers need to develop a wide portfolio of behaviors and the
capacity to adjust their behavior for a particular situation. This
adjustment, however, should not compromise the values, integrity,
and strengths of their home country. When managers can transcend
national borders and move among different cultures, they can lever-
age the strategic capabilities of their organization and take advan-
tage of the opportunities that our global economy has to offer.
of bribes, for example, is perceived as an accepted part of com-
mercial transactions in many parts of the world. Transparency
International publishes the “Bribe Payers’ Index” that ranks
28 countries based on the likelihood that companies (from those
countries) will pay bribes to win business abroad. Companies
from the Netherlands, Switzerland, and Belgium were the least
likely to pay bribes, while Russian, Chinese and Mexican compa-
nies were the most likely to engage in bribery abroad. 81
What should a U.S. businessperson do? Failure to sweeten
the deal with bribes can result in lost business. In the United
States, the Foreign Corrupt Practices Act of 1977 prohibits U.S.
employees from bribing foreign officials. (Small business gifts
or payments to lower-level officials are permissible if the dol-
lar amount of the payments would not influence the outcome
of the negotiations.) Likewise, countries of the Organization for
Economic Cooperation and Development, including the United
States, have prohibited bribes since 1977. Even so, a study found
that fewer than half of U.S. managers said bribes were unaccept-
able, and 20 percent actually said they were always acceptable. 82
Enforcement of the antibribery law—if only in the United
States—became more vigorous following high-profile financial
scandals at Enron, WorldCom, and other corporations. Still, even
in companies with a solid reputation for ethical conduct, bribery
can occur. Alcoa recently agreed to pay $384 million to settle U.S.
Security and Exchange Commission charges its subsidiaries repeat-
edly paid bribes to government officials in Bahrain to maintain
business. In an unrelated case, Ralph Lauren Corporation agreed to
pay more than $700,000 to settle charges that its Argentinian sub-
sidiary profited by bribing government officials from 2005–2009. 83
Without an understanding of local customs, ethical standards,
and applicable laws, an expatriate may be woefully unprepared
to work internationally. To safeguard against the problems and
mitigate the punishment if an organization should be found
guilty of bribery, the U.S. Sentencing Commission has deemed
it essential for firms to establish effective ethics programs and
see that they are enforced. To put teeth into the corporate ethics
initiative, companies with global operations should be at least
Study Che klist Did you tear out the perforated student review card at
the back of the text to revisit learning objectives and key terms and definitions?
Connect ® Management is available for M Management. Additional resources include: Interactive Applications: • Case Analysis: Cultivating Diversity at Saving
Dollars • Drag & Drop: Diversity and the Multicultural
Organization
• Self-Assessment: Do You Appreciate and Value Diversity?
• Video Case: Multigenerational Offices
LearnSmart—Multiple choice questions help you determine what you already know, are not sure about, or need to practice based on your score. And with SmartBook, you can read the relevant section in the eBook as well as practice and recharge what you’ve learned.
Chapter Videos: Managing Religious Diversity at Work
Young Manager Speaks Out: Stephanie Neubauer, Hair Salon Owner/Manager
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- 8 Managing Human Resources
- 1 | STRATEGIC HUMAN RESOURCES MANAGEMENT
- 1.1 | �HR planning Involves Three Stages
- 2 | STAFFING THE ORGANIZATION
- 2.1 | �Recruitment Helps Find Job Candidates
- 3 | SELECTION CHOOSES APPLICANTS TO HIRE
- 3.1 | �Selection Methods
- 3.2 | �Both Reliability and Validity Are Important
- 3.3 | �Sometimes Employees Must Be Let Go
- 3.4 | �legal Issues and Equal Employment Opportunity
- 4 | TRAINING AND DEVELOPMENT
- 4.1 | �Training Programs Include Four Phases
- 4.2 | �Training Options Achieve Many Objectives
- 5 | PERFORMANCE APPRAISAL
- 5.1 | �What Do You Appraise?
- 5.2 | �Who Should Do the Appraisal?
- 5.3 | �How Do You Give Employees Feedback?
- 6 | DESIGNING REWARD SYSTEMS
- 6.1 | �Pay Decisions Consider the Company, Position, and Individual
- 6.2 | �Incentive Pay Encourages Employees to Do Their Best
- 6.3 | �Executive Pay Has Generated Controversy
- 6.4 | �Employees Get Benefits, Too
- 6.5 | �Pay and Benefits Must Meet Legal Requirements
- 6.6 | �Employers Must Protect Health and Safety
- 7 | LABOR RELATIONS
- 7.1 | �What Labor Laws Exist?
- 7.2 | �How Do Employees Form Unions?
- 7.3 | �How Is Collective Bargaining Conducted?
- 7.4 | �What Does the Future Hold?
- Take Charge of Your Career // Tips for providing constructive feedback
- Hiring College Hunks to Haul Junk
- 9 Managing Diversity and Inclusion
- 1 | DIVERSITY IS DYNAMIC AND EVOLVING
- 1.1 | �Diversity Shaped America’s Past
- 1.2 | �Diversity Is Growing in Today’s Workforce
- 1.3 | �Tomorrow’s Workers Will Be More Varied than Ever
- 2 | WELL-MANAGED DIVERSITY AND INCLUSION: A COMPETITIVE ADVANTAGE
- 3 | A DIVERSE AND INCLUSIVE WORKFORCE: CHALLENGING TO MANAGE
- 4 | MULTICULTURAL ORGANIZATIONS
- 5 | HOW ORGANIZATIONS CAN CULTIVATE A DIVERSE WORKFORCE
- 5.1 | �Start by Securing Top Managers’ Commitment
- 5.2 | �Conduct an Organizational Assessment
- 5.3 | �Attract a Diverse Group of Qualified Employees
- 5.4 | �Train Employees to Understand and Work with Diversity
- 5.5 | �Retain Talented Employees
- 6. | MANAGING ACROSS BORDERS
- 6.1 | �Global Managers Need Cross-Cultural Skills
- 6.2 | �National Cultures Shape Values and Business Practices
- 6.3 | �International Management Introduces Complex Ethical Challenges
- Take Charge of Your Career // Find a mentor (Before they all retire)
- Move Over Expatriates: Here Comes a New Breed of International Managers