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OVERVIEW Among the HR prescriptions cited in Chapter 1 as predictive of corporate performance was
the use of “validated” selection procedures, the use of formal performance appraisal, and
the percentage of the workforce working in self-managed work teams. These prescriptions
require some form of work or job analysis. An analysis of work is considered a building
block for most HR systems in organizations. Corporate restructuring processes, quality im-
provement programs, human resource planning, job design, recruitment strategies, training
programs, succession planning, and compensation systems are among the other HR activi-
ties that are based on work analysis. Let us not forget the importance of job analysis in the
legal context discussed in Chapter 3.
Work analysis, a term which includes traditional job analysis and job design, provides the basic information that leads to specific products used or actions taken by management
to create and sustain organizational capability. While sometimes a highly formal system involving trained analysts and standardized instruments and other times a more informal
process, work analysis should be the first step for actions within most of the functional
areas of HR. Consider the following scenarios:
■ G4S Secure Solutions is interested in the development of a new screening test for armed
security guards. It wants to be certain that the test is legally defensible and “job related”
and emphasizes the most important elements of the job. Having also read the previous
chapter in this book on equal employment opportunity (EEO), the consultant recom-
mends two methods of work analysis to gather information. Why two methods?
O B J E C T I V E S
After reading this chapter, you should be able to
1. Understand what work analysis is and what its major products are.
2. Explain the purposes of and uses for work analysis data.
3. Compare and contrast methods for collecting data.
4. Describe commonly used and newer methods for conducting work analysis,
including O*NET.
5. Describe the process of competency modeling and compare this method to
other forms of work analysis.
6. Explain how work analysis information is applied to job design efforts.
Chapter
4 Work Analysis and Design
Work analysis for organizational capability
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■ The Wage and Hour Division of the U.S. Department of Labor recently updated re-
cordkeeping requirements for compliance with the Fair Labor Standards Act (FLSA).
Employers are required to notify workers of their rights under the FLSA and to provide
information regarding hours worked and wage computation. Also, employers that seek
to exclude workers from the FLSA’s overtime provisions are required to perform (and
document) a job analysis and to retain that analysis for possible Department of Labor
scrutiny. Is there a job analysis method that can help an organization comply with the
new FLSA requirements?
■ At Boeing, the competency models are used for many HR processes and practices, in-
cluding structured interviews, reductions-in-force, and training and development. For
example, the reduction-in-force process begins by selecting the competencies identified
for any particular job family that are considered most critical for current and future per-
formance. Employees are then appraised on these competencies. Also, Boeing’s training
and development programs are created to align the core and technical competencies that
are needed for current job performance and also to prepare employees for future jobs.
■ Louis Vuitton, maker of many luxurious items, was concerned about the inefficiencies
in its handbag assembly process. Assembly was made up of about 25 workers who were
performing highly specialized tasks. It took about 8 days to produce one bag with this
process. The company thought that a more team-based approach to assembly would
speed up the process. How did Louis Vuitton go about making this change?
■ Like most U.S. cities, New Haven, Connecticut, must use competitive examinations to
fill vacancies for police, fire, and other civil service positions. The exams must consider
character, training, experience, and physical and mental fitness. The city may choose
among a variety of testing methods, including written and oral exams or various work
samples or performance tests that demonstrate applicants’ skills and abilities to perform
the necessary work. The content of the exams must be job related. How does New Ha-
ven establish this job-related exam?
■ The State of Virginia passed a law mandating that state employee pay be based on
performance. However, there was a need for the development of a new performance
appraisal system. The first step in the development of the appraisal system was the use
of the critical incident method to identify the critical outcomes and behaviors for each
position to be evaluated. Why?
■ Two laboratory technicians have similar job experience and education but are employed
at different local hospitals. One technician makes $5,000 more per year than the other.
The lower-paid employee asks her HR department to review her pay based on the exter-
nal compensation market. What information will the hospital need in order to establish
fair compensation?
■ O*NET, the federal government’s online database for work analysis, proves to be very
valuable for military personnel leaving the service and for their families. Veterans
are using the O*NET to help with relocating or transitioning from military to civilian
careers and for vocational guidance. Based on the O*NET database, the Military to
Civilian Occupation Translator was developed to help service members match military
skills and experience to civilian occupations. The database is also useful for disabled
vets because job requirements and particular disabilities can be matched. The Mili-
tary Spouse Resource Center, also known as MilSpouse.org (www.careeronestop.org/
militaryspouse/), is designed to help spouses and their families with career and job
decisions. O*NET is a critical component of this comprehensive service. How was the
Military to Civilian Occupation Translator developed?
■ The Monsanto Corporation has many jobs that stipulate specific physical requirements
(e.g., must be able to lift 75 lb.). The company is concerned that some of the require-
ments are unnecessary and may be in violation of the Civil Rights Act or the Americans
with Disabilities Act (ADA). Will a work analysis help?
■ A division of Ford Motor Company decided to adopt autonomous work groups (AWGs)
to reconfigure a factory floor. Teams, rather than individuals, would be assigned spe-
cific tasks. The teams would divide up the work, which was as clearly defined and
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standardized as in typical American factories, but all team members would be expected
to be able to perform any of the work tasks. What information did the HR department at
Ford need in order to help redesign jobs into these AWGs?
■ The James River Corporation uses a standardized job analysis questionnaire known as
the Position Analysis Questionnaire (PAQ) to identify the best written tests to determine admission to its pipe fitter and millwright apprenticeship programs. Based on its un-
derstanding of Griggs v. Duke Power on the use of tests for hiring purposes, the James River Corporation attempts to establish the “job relatedness” of the tests based on the
results from the PAQ. Will the PAQ results establish the “job relatedness” and support
the legal defensibility of the test?
■ Pratt and Whitney, the jet engine division of United Technologies, seeks to improve its
competitiveness through the elimination of activities no longer essential to the business
and the improvement of existing job functions in the context of customer requirements.
Can work analysis help them?
■ The State of Maryland asked the consulting firm of Booz, Allen, and Hamilton to de-
termine the necessary knowledge, skills, and abilities required to perform the essential
functions of certain social work positions for the state. The study led to the reclassifica-
tion of some positions, stipulating that only a bachelor’s degree should be required to
do the work rather than a master’s degree in social work. Could the reclassification save
the state money?
■ The City of Ft. Lauderdale, Florida, updates all of its job descriptions by identifying the
“essential functions” of each job according to the Americans with Disabilities Act and
incorporating this language into new job descriptions. How does this serve the city?
■ The City of Chicago loses a lawsuit because it cannot justify a particular passing score
on a test used to screen firefighter applicants. Could it have avoided this?
Work analysis information is needed for each of these situations to assist organizations
in achieving certain objectives. Job descriptions and job specifications are needed to attract
and select qualified (but not overqualified) employees and evaluate compensation systems.
Job standards and performance criteria are used to evaluate employee and/or unit perfor-
mance; job factors are needed to group jobs to assess wage and salary systems; and tasks
and context factors are examined to redesign and evaluate jobs, restructure organizations,
develop succession planning, and stay on the right side of the law. Almost all programs of
interest to human resource specialists and other practitioners whose work pertains to orga-
nizational personnel depend on work analysis results. 1 This chapter describes the impor-
tance of work analysis for the field of HRM. Discussion centers on the purposes for work
analysis as well as the major approaches for collecting data.
The nature of work is changing, and traditional work arrangements exist alongside con-
tingent workers, independent contractors, outsourced activities, and work teams. But while
the world of work may be changing, the basics of work analysis can (and should) be the
cornerstone of HR activities. Good work analysis increases the probability that the “deliv-
erables” from the HR suppliers will meet the requirements of their customers, both internal
and external. This applies even though jobs are becoming more elastic and less static and
even if we don’t call them jobs anymore but rather projects or roles. Of course, the context
for all work analysis must be legal and regulatory compliance.
Work analysis: Cornerstone of HR
WHAT IS WORK ANALYSIS? Work analysis is a systematic process of gathering information about work, jobs, and the relationships among jobs. 2 Figure 4-1 presents a chronology of the steps to be undertaken
in a comprehensive (and effective) work analysis. This approach should focus first on
outputs with quality and quantity measures of those outputs. The focus is on internal and
especially external customers to identify the critical products, services, or performance C o p
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outcomes that are required of the supplier. This list of carefully defined outputs should then
be the frame of reference for the rest of the steps in the analysis of that supplier’s job, start-
ing with the major tasks or activities necessary to achieve the required outcomes defined
by the customers. The required outcomes as defined by customers are derived from the
strategic planning of the organization.
G4S Secure System, for example, in one of the scenarios described earlier, required a
cost-effective and job-related test that would help identify persons most likely to be effec-
tive guards who were more likely to keep the job. The product to be delivered by HR was
the test, and the internal customers were managers who would have to make the hiring
decisions. Of course, the main frame of reference for these managers must be the external
customers, the many and varied G4S customers who contracted for security guards.
Once the outputs are defined and the tasks and activities have been identified, the rela-
tive importance, relative frequency, or essentiality with which the various tasks are per-
formed can be assessed. Remember that word essentiality. Many methods now require the determination of essential functions for jobs because of the language of the Americans with Disabilities Act (see Chapter 3 discussion). This step should include work-flow analysis.
Next, the critical knowledges, abilities, skills, and other characteristics (or KASOCs ) necessary to perform the tasks must be identified. KASOCs are also called “ competencies.”
This step is roughly equivalent to competency modeling, which is discussed later. Knowledge refers to an organized body of information, usually of a factual or proce- dural nature applied directly to the performance of a function. For example, computer
programmers may need knowledge of specific languages such as Java. Your instructor in
this class should obviously have knowledge of research and practice in human resource
management.
An ability refers to a demonstrated competence to perform an observable behavior or a behavior that results in an observable product. Police officers, for example, are required to
possess the physical ability to apprehend and detain a suspect and the cognitive ability to
understand and complete arrest forms. Vigilance also may be such an ability. For example,
while the ability to perform as an airport baggage checker may not require high levels of
cognitive ability, the ability to be vigilant in a fairly boring task is a critical ability. NFL
quarterbacks should possess high levels of cognitive ability to be able to read (and react
quickly) to defense formations.
A skill is a competence to perform a learned, psychomotor act and may include a manual, verbal, or mental manipulation of data, people, or things. So, in the case of a police
officer, she or he must demonstrate an acceptable level of driving skill and skill in operat-
ing and maintaining a weapon, among many others.
Finally, other personal characteristics include various personality characteristics, at- titudes, or physical or mental competencies needed to perform the job. Even something as
obvious as being courteous to civilians plays an important role in determining how well
officers perform their jobs. When officers are unable to empathize with crime victims, are
callous in treating witnesses, or are impulsive and destroy evidence at a crime scene, they
demonstrate some shortcoming on personal characteristics that affects their job perfor-
mance. Being able to tolerate the belligerence of customers and control one’s temper may
Step Critical Questions
1 What are the required outputs (i.e., what is the product, service, or information and how do we measure it?)
2 What are the essential tasks, activities, behaviors required to meet or exceed the output requirements established at step 1? What are the relative importance, frequency, and essentiality of these tasks for achieving measures at step 1? How do the tasks relate to one another?
3 What are the raw inputs that are required for the outputs and what specific equipment is necessary?
4 What are the necessary knowledges, skills, abilities, and other characteristics or competencies required to perform the activities at step 2?
5 How should jobs/work be defined? Where does the work get done to maximize efficiency/effectiveness? Do we use individual jobs, work teams, independent contractors, full-time/part-time? Do we outsource?
Figure 4-1 The Chronological Steps in Effective Work Analysis
Knowledge, abilities, skills, and other characteristics (KASOCs)
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be critical in certain circumstances. Being able to work in teams is another example of a
critical characteristic for many jobs today. An analysis could conclude, for example, that
armed security guards must not have a history indicating psychiatric problems.
As you can tell from these examples, the products of competencies or KASOCs are typ- ically easy to observe and ultimately serve as the basic units of observation for analysis. 3
For example, the customer of the computer programmer requires a Java program that meets
certain specifications. Knowledge of a computer language such as Java can be determined
from an interview, responses to a written test, the possession of a certain license or gradua-
tion from a certain class, or by observing an individual attempt to program. The knowledge
required to teach a class in human resource management can be determined based on the
possession of certain credentials (e.g., PhD in human resource management or industrial/
organizational psychology) or through an interview or test.
Establishing that someone requires driving skill to perform a job is one thing, and as-
certaining that an individual has this skill is another. It would be difficult in an interview
or written test to measure the latter, as they do not afford an opportunity to observe the
series of behaviors that demonstrate the application of this knowledge domain in the job
environment. This would seem to require observations of actual motor vehicle operation.
To establish that driving skill is a requirement in the first place depends on observation in
the field and a work analysis.
As you’ve probably gathered by now, much of the success (i.e., validity) of work analysis
efforts is a function of the accuracy of the inferences drawn about the job from observa-
tions, interviews, and/or questionnaire data gathered through the work analysis. One un-
derlying objective of work analysis is to minimize the inferential leaps required to arrive
at a conclusion. The context for work analysis should always be critical outputs that define
strategy. Toward this end, the following are offered as goals that one should strive for in
the course of work analysis:
1. Work analysis should start with a description of observables . Often the behavior or competency necessary for performing the job is not observable but the products
or outcomes, kinds of materials or work aids used, and the people included in the
decision process can be reported. Work analysis should focus on observable be-
haviors and work outputs. A job description is the usual product of this analysis.
2. Work analysis should describe work behavior independent of the personal char- acteristics of particular people who perform the job . Quite simply, work analysis describes how a job is performed and focuses on the position, not the person do-
ing the work. Performance appraisal is used to describe how well individuals perform their jobs. The actual performance appraisal instrument may have been
developed from work analysis and should be linked to the job description.
3. Work analysis data must be verifiable and reliable . The organization should maintain records of the data, document all decisions that are data based, and be
able to justify every judgment and inference. The data must be reliable, indicating
that different sources agreed on judgments about the work. The source of the data
clearly matters.
While most American workers have a detailed job description that describes their work,
a strong trend is to reduce the specificity in job descriptions and to reduce the number of
job classifications to foster greater flexibility on how (and who) gets the work done. Pre-
cisely defined job descriptions for individual workers have been criticized by many work
experts. In Japan, for example, new employees are typically hired without a job descrip-
tion or specifications. Japan places much greater reliance on in-house training and job
rotation to foster a versatility in the skills of each new employee. Japanese managers think
job descriptions can be harmful to their team-building approach to management. Many
experts in job design and organizational restructuring embrace this view and believe that
What Are the Major Goals for Work Analysis?
Focus on observables
Describe work not persons doing work
Data must be reliable
Do We Really Need All the Specificity in Formal Job Analysis?
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job descriptions should be written for units or teams with all team members responsible for
(or at least qualified to perform) all unit functions or activities. Individual job descriptions
and multiple job classifications are thought to be detrimental to work group effectiveness.
However, as discussed in Chapter 3, job descriptions may be needed for legal reasons and
can be written in such a way as to facilitate a team-oriented approach to work processes.
Detailed job descriptions are still quite common in Europe where they are frequently
required by regulation or union agreement. Every employee at the Volvo plant in Sweden,
for example, has a detailed job description based on a quantitative job analysis even though
the assembly process at Volvo is team based rather than the traditional assembly line.
There is some evidence that things are changing in Europe. At Volkswagen, for example,
all narrowly defined job descriptions were replaced in 2006 by flexible, cross-functional
team-based statements similar to descriptions at Toyota. The changes to how the work got
done helped Volkswagen produce cars at the same pace as its major competitors. 4
While work analysis is often used to derive specific information about particular jobs,
the data can be aggregated to the unit or function level so that the end products such as job
descriptions or job specifications are defined at the team level rather than for particular
positions. Often this approach to defining the job in terms of team member competencies is
coupled with skill-based pay systems where individuals are compensated on their potential
to perform multiple tasks as opposed to a limited set of tasks specific to a job. So a team
member may be expected to perform the tasks of another who is absent, rotate task assign-
ments with others as needed, and provide additional expert opinion on task processes or
products. In this way, the team member is cross-trained to perform a number of different
tasks, perhaps even all of those involved in a specific work process. In other words, no one
has a monopoly on a set of tasks, as the responsibility for performance of these tasks is
shared by team members.
So what’s the answer to the question about the value of specificity? Unfortunately for
those seeking “specificity” in this answer, it really depends on the context! While in many
situations organizations can retrieve general job descriptions right off the Internet through
O*NET or other sources, there are other situations where great detail in the job descrip-
tion and job specifications may be required. For example, had a job analysis existed with
greater specificity in the Chicago lawsuit mentioned earlier regarding a particular passing
score that caused adverse impact, it might have helped the city in its defense.
There has been strong interest in job analysis since passage of the Civil Rights Act, the
ADA, and subsequent court rulings and government guidelines. As discussed in Chapter 3,
the “Uniform Guidelines on Employee Selection Procedures” (see eeoc.gov) and the Supreme Court decisions in Griggs v. Duke Power and Albemarle Paper Company v. Moody have emphasized the importance of demonstrating the job relatedness of em- ployer selection systems. One way to do this is by conducting a thorough work analysis to
justify personnel job specifications such as passing scores on tests or particular credentials
for the job.
There are a great number of court cases that focus on the results of (or the nonexistence
of) a job analysis. For example, many women have filed lawsuits contesting the physical
ability tests (e.g., push-ups, sit-ups) mandated for entry into police or firefighters’ acad-
emies. They often claim “adverse impact” since a greater proportion of women than men
are disqualified as a result of such tests. As in the Chicago case that focused on a particular
passing score on a written test that caused adverse impact, the outcomes of such cases may
turn on the quality of any work analysis that formed the basis of a test and a particular pass-
ing score on a physical or mental ability test.
There also have been a number of lawsuits filed on behalf of older workers who lost
their jobs because of a mandatory retirement age. For example, an Indianapolis bus driver
used the ADEA to challenge the mandatory retirement age of 55 (he lost). In this case, job
analysis data were successfully introduced at trial to support the age limit. On the other
hand, the American Association of Retired Persons has been active in challenging manda-
tory retirement ages using job analysis data. The Federal Aviation Administration raised
the mandatory retirement age for pilots to 65 based on work analysis data.
Need for specificity depends on purpose for work analysis
What Is the Legal Significance of Work Analysis?
Job relatedness
See “Uniform Guidelines” at eeoc.gov
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As discussed in Chapter 3, statistics can be used to establish prima facie evidence of
discrimination under the disparate impact theory of Title VII. The burden of proof then
rests with the employer to show that the selection device or job specification (e.g., the
test, test score, specified years of experience, educational requirement) is “job related” or
a “business necessity.”
Firefighter candidates in Dallas, Texas, were required to scale a fence 6 feet high in a
prescribed amount of time. Since a higher percentage of women than men were unable to
scale the fence, the court asked the city to show how scaling a fence 6 feet in height was job
related. The city presented data that demonstrated that the average fence in the jurisdiction
was 6 feet high and that scaling fences was a frequent activity that must be performed by
competent firefighters.
Legal challenges to job specifications involving physical attributes (e.g., strength,
speed) and mental attributes have increased since the Americans with Disabilities Act
took effect in 1990. The ADA specifies that employers must make “reasonable accom-
modations” that would allow qualified workers with disabilities to perform the “essential
functions” of the job. According to the EEOC, these accommodations may include physi-
cal renovations to the job and the workplace. 5 There are many other laws that require work
analysis. For example, the new U.S. Department of Labor recordkeeping requirements
for compliance with the Fair Labor Standards Act (FLSA) stipulates that employers must
provide information regarding hours worked and what tasks are performed. Employers
excluding workers from the FLSA’s overtime provisions of the law must perform a job
analysis and retain this analysis for possible Department of Labor review for compliance
with the new requirement regarding what particular jobs must be paid overtime (and which
ones can be exempted). Many companies now use the Position Analysis Questionnaire analysis to help organizations comply with the new FLSA requirements.
There are numerous products that can be derived from work analysis. The most fre-
quently and commonly used products include “job descriptions” and “job specifications.”
Job descriptions define the job in terms of its content and scope. Although the format can vary, the job description may include information on job duties, tasks, activities, behav-
iors, competencies, and/or responsibilities. An identification of critical internal and exter-
nal customers, equipment to be used on the job, working conditions, relationships with
co-workers, and the extent of supervision required is also typical in a job description.
Figure 4-2 presents an example of a job description for a compensation manager. In a sense, you can think of a job description as being a report of the job situation. Job descriptions
are often summarized in classified employment ads and, more recently, available on the
Internet through various job placement services. Go to www.online.onetcenter.org for over
1,500 job descriptions.
Job specifications consist of the KASOCs needed to carry out the job tasks and duties. Specific educational requirements (e.g., PhD, MD, MBA, RN, JD, EdD, MSW), certi-
fications or licenses (e.g., CPA, CFP), or other qualifications (e.g., years of experience)
are often stipulated as job specifications. Cutoff scores on tests are also job specifications.
Figure 4-2 also presents an example of the job specifications for a compensation manager. You will note that a college degree in human resources or a related field is required for
the compensation manager job along with 3–5 years’ experience. Job specifications detail
the specific KASOCs or competencies required. Work analysis should be the basis of each
specification.
Job specifications often are contested in court because they have adverse impact against
groups protected by EEO laws. Certainly job specifications that result in adverse impact
against groups covered by EEO legislation should be derived from a thorough (and docu-
mented) analysis. Where data are available in company records that shed light on the rela-
tionship between a given job specification and some measure of effectiveness, these data
should certainly be used. A regional manager of a 500-store clothing retailer proposed that
all assistant managers in his region should have college degrees. This specification would
thus be a necessary but insufficient condition for any applicant for this job. However,
research from the HR department indicated that there was no correlation between having
May need work analysis to justify cut-off scores
What Are the Major Work Analysis Products?
Job descriptions
Job specifications
Validate job specifications using company records
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Figure 4-2 Job Description and Job Specifications for a Compensation Manager
Job Title: Compensation Manager DOT Code: 166.167–022 Reports to:
JOB DESCRIPTION Responsible for the design and administration of employee compensation programs. Ensures proper consideration of the relationship of salary to performance of each employee and provides consultation on salary administration to managers and supervisors.
Principal Duties and Responsibilities: 1. Ensures the preparation and maintenance of job descriptions for each current and projected position. Prepares all job descriptions,
authorizing final drafts. Coordinates periodic review of all job descriptions, making revisions as necessary. Educates employees and supervisors on job description use and their intent by participation in formal training programs and by responding to their questions. Maintains accurate file of all current job descriptions. Distributes revised job descriptions to appropriate individuals.
2. Ensures the proper evaluation of job descriptions. Serves as chair of Job Evaluation Committee, coordinating its activities. Resolves disputes over proper evaluation of jobs. Assigns jobs to pay ranges and reevaluates jobs periodically through the Committee process. Conducts initial evaluation of new positions prior to hiring. Ensures integrity of job evaluation process.
3. Ensures that Company compensation rates are in accordance with the Company philosophy. Maintains current information concern- ing applicable salary movements taking place in comparable organizations. Obtains or conducts salary surveys as necessary. Con- ducts analysis of salary changes among competitors and presents recommendations on salary movements on an annual basis.
4. Ensures proper consideration of the relationship of salary to the performance of each employee. Inspects all performance appraisals and salary reviews, authorizing all pay adjustments.
5. Develops and administers the performance appraisal program. Develops and updates performance appraisal instruments. Assists in the development of training programs to educate supervisors on using the performance appraisal system. Monitors the use of the performance appraisal instruments to ensure the integrity of the system and proper use.
6. Assists in the development and oversees the administration of all bonus payments up through the Officer level. 7. Researches and provides recommendations on executive compensation issues. 8. Coordinates the development of an integrated HR information system. Assists in identifying needs; interfaces with the Management
Information Systems Department to achieve departmental goals for information needs. 9. Performs related duties as assigned or as the situation dictates.
JOB SPECIFICATIONS Required Knowledges, Skills, and Abilities: 1. Knowledge of compensation and HRM practices and principles. 2. Knowledge of job analysis procedures. 3. Knowledge of survey development and interpretation practices. 4. Knowledge of current performance appraisal issues for designing, implementing, and maintaining systems. 5. Skill in conducting job analysis interviews. 6. Skill in writing job descriptions, memorandums, letters, and proposals. 7. Skill in making group presentations, conducting job analysis interviews, and explaining policies and practices to employees and
supervisors. 8. Skill in performing statistical computations including regression, correlation, and basic descriptive statistics. 9. Ability to conduct meetings. 10. Ability to plan and prioritize work.
Education and Experience Requirements: This position requires the equivalent of a college degree in personnel, human resources, industrial psychology, or a related degree, plus 3–5 years' experience in Personnel, 2–3 of which should include compensation administration experience. An advanced degree in Industrial Psychology, Business Administration, or Personnel Management is preferred.
Work Orientation Factors: This position may require up to 15 percent travel.
or not having a college degree and performance as an assistant store manager. In addition,
HR determined that the college degree specification would make it more difficult to fill
the job and would drive up the salary. In addition there was likely to be an 80 percent rule adverse impact against minorities. The manager was persuaded to change his mind about
requiring the degree for the job.
Unnecessary job specifications can translate into higher labor costs. The State of Mary-
land, as mentioned in the opening of the chapter, was concerned about the number of
state positions that required a master’s in social work (MSW), a requirement that neces-
sitated a higher starting salary. The consulting firm of Booz, Allen, and Hamilton (BAH)
conducted work analysis of these jobs and determined the extent to which the knowledge ac-
quired by the MSW was essential for these jobs. In addition, since many positions had some
MSW-trained occupants and others doing the same work with only a bachelor’s degree,
Adverse impact 80 percent rule
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the consultant firm also could study whether the more advanced degree was related to
better performance on the job (it wasn’t). BAH also found that the MSW requirement
hindered the state’s ability to meet its diversity goals and caused adverse impact against
minorities. They recommended that the MSW job specification be dropped for these posi-
tions. The state saved millions of dollars by dropping the higher degree requirement and
was able to recruit from a much larger pool of potential candidates.
Many business schools now stipulate that a PhD is required for full-time faculty posi-
tion although it is conceivable that a candidate with an MBA would be less costly and
perhaps as (or more) effective as an instructor of undergraduate students. Job specifications
such as reading level, formal education requirements, and the like must be established at a
level that reflects the minimum necessary for job entry. Establishing specifications at too
high a level often results in adverse impact and can hinder diversity and affirmative ac-
tion goals. For this reason, such practices are closely scrutinized by the courts. The “glass ceiling effect” in certain industries may to some extent be caused by job specifications that block women from many key positions because they lack certain credentials or experience.
For example, requiring an advanced degree and a minimum number of years of previous
experience are examples of job specifications that could hinder the ability of women or mi-
norities to even compete for a job—and those specifications may have been set arbitrarily.
It is in an organization’s best interest to determine whether a particular job specification
is really necessary for success on a job. After all, more education or more years of experi-
ence almost always translate into higher salaries and more difficulty recruiting. Organiza-
tions should constantly monitor their specifications. Larger companies often have the data
available to be able to assess the correlation between job specifications and important
outcomes like performance. If the data are available, they really need to test the validity of
job specifications. Should an employment discrimination lawsuit ensue, the plaintiffs will
surely examine these data very carefully and perhaps use their own analysis to support their
theory of discrimination.
In addition to job descriptions and job specifications, work analysis is used for a variety
of purposes and products for both the private and the public sectors, particularly in larger
organizations ( Figure 4-3 ). Many products are related to employee compensation. Smaller
businesses are less likely to use formal approaches for conducting job analyses and less
likely to even use formal job descriptions. In larger organizations, including state and fed-
eral government agencies, personnel are hired, trained, and classified as job analysts. In
these positions, their primary duty is to perform work analyses for job classification and job evaluation (see Figure 4-3 ). A great deal of their work today concerns legal compli- ance and, in particular, compliance with the Americans with Disabilities Act (ADA). For
example, as mentioned at the start of the chapter, job analysts employed by the City of
Fort Lauderdale, Florida, developed a new job analysis method that incorporated ADA
language regarding “essential functions.”
Work analysis also is used for recruitment and selection purposes by many companies.
For example, Office Depot developed a test and a structured interview using the Manage- ment Position Description Questionnaire, a standardized job analysis instrument, and the critical incident technique. Exxon Corporation and AT&T employ a standardized ques- tionnaire to analyze their jobs in order to develop or identify personnel selection tests for
their entry-level employees. The City of New York and the Monsanto Corporation also
use a quantitative job analysis method to establish very specific physical requirements for
certain jobs.
Work analysis is also used to redesign jobs and to determine how jobs relate to one another. Pratt and Whitney, a division of United Technologies, conducted work analysis
as part of a corporatewide restructuring effort. Motorola Corporation and Ford used a stan-
dardized, task-based instrument known as the Job Diagnostic Survey to collect information related to the development of work teams. Numerous organizations also use work analysis
to develop training curricula.
Managers concerned about efficiency need to have a thorough knowledge of how work
processes result in the desired (or undesired) product or service outputs. This knowledge
of work processes is critical for improving efficiencies and product quality. Louis Vuit-
ton conducted a work-flow and process analysis to redesign the assembly process for its
Glass ceiling effect
Job design
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handbags into a team-based approach where about eight people would work as a unit in
order to complete an entire product such as their hot-selling Evora MM handbag. Workers
had to be cross-trained to perform the multiple tasks required. Previous to this team-based
redesign, assembly was made up of individual workers and the typical line was made up
of about 25 people who were doing specialized tasks such as leather cutting or stitching.
The new team-based approach reduced the time to assemble a complete handbag from
8 days to 1 day. This expedited process enabled Louis Vuitton to more quickly meet (and
adapt to) product demands. 6 Of course a complete understanding of the various tasks to be
performed was necessary to form (and train) the teams in order to ensure that all teams had
the capability to perform all tasks at a high level of competence.
Work analysis is often used to develop performance appraisal systems. Office Depot conducted work analysis using competency modeling in order to develop a multirater as- sessment program that would be used for feedback and development for its store managers
and as a possible source of data to be used for determining managerial potential for higher
level management. One of yours authors led groups of district managers and HR specialists
in a process of refining the company’s mission/vision statement followed by the develop-
ment of “core competencies” to meet new strategic business goals. This step was fol-
lowed by a refinement of the competency definitions and the development of behaviorally anchored rating scales to be used by peers, subordinates, supervisors, and customers in the assessment of managers.
There are a variety of methods used to collect information about jobs, including observa-
tion of the job, actual performance of the job, interviews, identification of critical incidents,
diaries, and organization records, including customer complaints and questionnaires.
Figure 4-4 presents a list of the various data collection methods available along with some
Figure 4-3 Products of and Purposes for Job Analysis Information
Job Description. A complete job description should contain job identification information, a job summary, the job duties, accountabilities, and job specification or employment standards information. Job Classification. Job classification is the arrangement of jobs into classes, groups, or families according to some systematic schema. Traditional classification schemes have been based on organizational lines of authority, technology-based job/task content, and human behavior–based job content. Job Evaluation. Job evaluation is a procedure for classifying jobs in terms of their relative worth both within an organization and within the related labor market. Job evaluation is used to determine compensation. Job Design/Restructuring. Job design deals with the allocation and arrangement of organizational work activities and tasks into sets where a singular set of activities constitutes a “job” and is performed by the job incumbent. Job restructuring or redesign consists of reallocation or rearrangement of the work activities into different sets. Job Specifications. Personnel requirements and specifications for a particular job are the personal knowledge, skills, aptitudes, attributes, and traits that are required for successful performance. Job specifications may be identified as minimum qualifications, as essential characteristics, or as desirable specifications. Cutoff scores on tests, credentials, licenses, degrees, and previous experience are all job specifications. Performance Appraisal. Performance appraisal is a systematic evaluation of employees' job performance by their supervisors or others who are familiar with their performance. Job analysis is used to develop the criteria or standards for the appraisal. Worker Training. Training is a systematic, intentional process of developing specific skills and influencing behavior of organizational members such that their resultant behavior contributes to organizational effectiveness. Worker Mobility/Succession Planning. Worker mobility (career development and pathing) is the movement of individuals into and out of positions, jobs, and occupations. From the perspective of the individual, both self-concepts and social situations change, making the process of job/occupational choice continuous due to growth, exploration, establishment, maintenance, and decline. Efficiency. Improving efficiency in jobs involves the development of optimal work processes and design of equipment and other physical facilities with particular reference to work activities of people, including work procedures, work layout, and work standards. Safety. Similar to efficiency, improving safety in jobs involves the development of optimal work processes and safe design of equipment and physical facilities. However, the focus is on identifying and eliminating unsafe work behaviors, physical conditions, and environmental conditions. Human Resource Planning. Human resource planning consists of anticipatory and reactive activities by which an organization ensures that it has and will continue to have the right number and kind of people at the right places, at the right times, performing jobs that maximize both the service objectives and/or profit of the organization. It includes the activities by which an organization enhances the self- actualization and growth needs of its people and allows for the maximum utilization of their skills and talents. Legal/Quasi-Legal Requirements. Laws, regulations, and guidelines established by government agencies (e.g., EEOC, OFCCP, OSHA) have set forth requirements related to one or more of the job analysis products or purposes listed above.
Source: Adapted from R. A. Ash, “Job Analysis Questionnaire (PAQ),” in The Job Analysis Handbook for Business, Industry and Government, ed. S. Gael, vol. II, pp. 826–827. Reprinted with permission.
Performance appraisal
What Are the Major Methods of Work Analysis?
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of their relative advantages and disadvantages. As noted, an analyst, often the supervisor
for the position under study, can simply observe the job and record his or her observations.
The analyst also can actually perform the job. Many corporations now require high-level
managers to spend time performing jobs where there is personal contact with the customer.
Target, for example, makes its managers work the cash register on weekends and Xerox
Corporation sends its top managers on sales calls. The basic idea is to better understand
the customer’s perspective on the business. Individual or group interviews can be con-
ducted with clients or customer incumbents, supervisors, or subordinates for the position
under study. Incumbents or observers can be asked to maintain a diary or to record critical
incidents regarding their performance or behavior on the job. Available records of work
activities or other relevant information such as job descriptions, an organizational chart,
and policies and procedures manuals can be reviewed by the analyst to gain background
data on the job. Relevant job descriptions can also be retrieved from the Internet through
O*NET, a product of the United States Department of Labor.
Figure 4-4 Advantages and Disadvantages of Common Work Analysis Data Collection Methods
Collection Method Advantages Disadvantages
Observation: Direct observation of job duties, work sampling or observation of segments of job performance, and indirect recording of activities (e.g., film).
Allows for a deeper understanding of job duties than relying on incumbents' descriptions.
Unable to observe mental aspects of jobs (e.g., decision making of managers, creativity of scientists); may not sample all important aspects of the job, especially important yet infrequently performed activities (e.g., use of weapons by police officers).
Performing the Job: Actual performance of job duties by the analyst.
Analyst receives firsthand experience of contextual factors on the job, including physical hazards, social demands, emotional stressors, and mental requirements; useful for jobs that can be easily learned.
May be dangerous for hazardous jobs (e.g., firefighters, patrol officers) or unethical/ illegal for jobs requiring licensing or extensive training (e.g., medical doctor, psychologist, pharmacist); analyst may be exposed only to frequently performed activities.
Interviews: Individual and group interviews with job incumbents, supervisors, subordinates, clients, or other knowledgeable sources.
Information on infrequently performed activities, and physical and mental activities can be collected; use of multiple sources instead of one source can provide a more comprehensive, unbiased view of the job.
Value of the data is dependent on the interviewers' skills and may be faulty if they ask ambiguous questions; interviewees may be suspicious about the motives for the job analysis (e.g., fearful it will alter their compensation) and distort the information they provide.
Critical Incidents: Descriptions of behavioral examples of exceptionally poor or good performance, and context and consequences in which they occur.
Since observable and measurable behaviors are described, the information can be readily used for performance appraisal and training purposes; may provide insights into job expectations as defined by incumbents.
Descriptions of average or typical behavior are typically not collected so the data may be less inclusive of the entire job domain; time-consuming to gather the incidents.
Diaries: Descriptions of daily work activities by incumbents.
Written in terms familiar to incumbents and supervisors so the data may be easier to use (e.g., in developing performance appraisal measures); may provide insights into the reasons for job activities.
Time-consuming to document; may be biased accounts; may not include mental activities (e.g., innovativeness) or a representative account of all activities.
Background Records: Analysis of relevant materials and data including: organizational charts, O*NET, company training manuals, organizational policies and procedures manuals, existing job descriptions, correlational studies relating work variables (e.g., job specifications) to important outcomes.
Provide analyst with job information that assists in developing interview questions or questionnaires; validating job specifications; is relatively easy to collect/ and analyze; can help determine the value of job specifications; necessary in legal context.
Generally needs to be supplemented with data collected using other methods; may be outdated materials; usually provide limited information on specific KASOCs required as well as importance of ratings of tasks.
Questionnaires: Structured forms and activity checklists (PAQ, JDS, WDQ, MPDQ, JCQ) as well as open-ended or unstructured questions (see www .onetcenter.org/questionnaires.html for downloadable questionnaires on abilities, background, education and training, knowledge, skills, work context, and work style).
Commercially available questionnaires are generally less expensive and quicker to use than other methods; can reach a large sample of incumbents or sources, which allows for a greater coverage of informed individuals; responses often can be quantified and analyzed in a variety of meaningful ways (e.g., comparisons can be made across jobs or departments for compensation or selection purposes); can be integrated with O*NET database.
Questions may be interpreted incorrectly; difficult to assess how respondents interpreted questions; response rate may be low making the results less generalizable; often expensive and time- consuming to develop, score, or analyze; open-ended questions are difficult to quantify and require content analysis that is time-consuming.
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Questionnaires or checklists also can be completed by incumbents, supervisors, clients,
or subordinates. Respondents can be asked to list the major tasks they perform as well as to
rate the importance, frequency, time spent, or “essential” nature of each task. Respondents
also can indicate how important a specific knowledge, skill, or ability is for completing the
tasks. Methods are available for determining the importance of job tasks. A variety of stan-
dardized questionnaires exist for conducting job analyses, and some of the more commonly
used instruments are described in a later section. Questionnaires are also available through
O*NET. Go to www.onetcenter.org/questionnaires.html for downloadable instruments in
English and Spanish.
Background records should be used with organizational data directly relevant to the purposes for doing the work analysis when such data are available. For example, in the
State of Maryland study of social workers described earlier, one of the primary purposes
of the study was to determine whether a graduate degree was really essential for the actual
work being done. Some past and present social workers for the state had graduate degrees
while others did not. Fortunately, the State of Maryland had performance data on social
workers and could thus conduct an empirical study correlating educational level (e.g.,
MSW or not) with job performance. This correlational analysis was the primary basis for
recommending that the MSW should be dropped as a required credential for employment
(the correlation between the degree and job performance was near zero). Of course such
recommendations must be made with deference to critical licensing, certification, or ac-
creditation standards.
Work analysis methods can vary along several dimensions, including (1) the types of infor-
mation provided, (2) the forms in which job information is illustrated, (3) the standardiza-
tion of the analysis, and (4) the sources of job information. 7 Each of these dimensions is
described next.
Work analysis methods can solicit a variety of types of information. Some approaches are
called task- or job-oriented methods since they indicate the tasks or duties required to perform the job. For example, “performing cardiopulmonary resuscitation” is considered
an important task for a nurse. Similarly, “study and evaluate state-of-the-art techniques to
remain competitive and/or lead the field” may be considered an essential task for a member
of the management information systems (MIS) staff. Task/job-oriented approaches can be
distinguished from the other two approaches we will discuss by their identification or, at
least, implication of an end product. That is, task/job-oriented approaches tend to stress
“what gets done on the job.” These approaches typically produce quite detailed descrip-
tions of the objectives for each job. As a result, they are very good for fine-grained analysis
of jobs but often are too specific to allow for useful comparisons across jobs.
Other methods such as the Position Analysis Questionnaire (PAQ) are considered to be person- or worker-oriented approaches since information is more focused on the KASOCs or behaviors (e.g., decision making, communicating) needed to perform the
tasks satisfactorily. In the nurse example, a person-oriented analysis may determine that
“knowledge of disorders of the circulatory system” is critical for competent nursing.
These approaches provide less detailed information than the job/task-oriented approach
but tend to provide better information for the purpose of comparing jobs and identifying
job specifications.
Finally, competency modeling or trait-oriented approaches focus more on bundles
of KASOCs or latent traits (physical and mental abilities and sometimes personality or
temperament) a worker must possess in order to perform the required behaviors that
lead to specific ends. These approaches detail the competencies or traits necessary for
job success. In a sense they generate a prototype of the ideal job incumbent. They ask,
“Who can perform these behaviors?” Oftentimes several approaches are combined
into a more comprehensive analysis. As you can imagine, it makes little sense to ask
“Who can perform these behaviors?” without first answering the questions: “What
behaviors are performed?” and “For what ends?” In fact, some courts have ruled that
Background records
Correlate specifications with performance
What Are the Dimensions on Which Work Analysis May Vary?
Types of Information
Position Analysis Questionnaire
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detailed task analysis must precede any attempt to identify critical competencies or
job specifications. 8
Almost all systematic work analysis methods collect data on the machines, tools, and work aids used. More complete analyses also include records of contextual factors of the
job (e.g., physical working conditions, environmental hazards, contact with co-workers).
Some methods also provide information on work performance standards (e.g., quality and
quantity standards, error analysis) and specific customer requirements. These latter pieces
of information are essential to support personnel decisions based on performance appraisal
such as terminations, assignment to training, or promotion.
Work analysis information can be presented in qualitative or quantitative form depending
on the method used. Most methods are qualitative in the sense that the job is described in a narrative, nonnumerical manner and results in verbal or narrative descriptions of job infor-
mation. The critical incident technique (CIT), discussed later, is an example of a qualitative
method. Other methods such as the O*NET questionnaires, PAQ, the Job Compatibility
Questionnaire (JCQ), the Management Position Description Questionnaire (MPDQ), and
empirical analysis of background data and performance relationships are quantitative and provide descriptive information in numerical form. Common examples include a listing of
tasks and ratings of the relative frequency, essentiality, or importance with which they are
performed and descriptions of the production or error rates per period. In most cases, work
analyses include both quantitative and qualitative information.
Many HRM professionals have created a uniform or consistent method for work analysis.
Some methods, for example, have a set number of questions or items to which responses
are required. The job analyst may be asked to write the major objectives of the posi-
tion, the most important or essential tasks or functions to be performed, the KASOCs
or competencies that an occupant should have for the position, the major work products
or outcomes, and the critical internal or external customers for the products or services.
The quantitative approaches are more standardized. The PAQ, for example, has standard
content for all the jobs that are under study. Other methods have a standardized content
(listing of tasks) for a group of similar jobs, but another list may be used for a different
set of jobs.
Another component of the standardization process is the response format. Many meth-
ods are completed using computer sheets, direct entry through a computer diskette, or, for
many approaches now, through the Internet. Many questionnaires can be completed online
with near instant results for the job analyst.
Recall the discussion of the elasticity of work itself and how jobs change so rapidly.
So the recommendation here is not to have too much faith in an already standardized
measure since many jobs, their duties, and necessary worker competencies can change
dramatically. Who would have envisioned just 15 years ago that clerical workers would
have so much of their job activity centered on the computer or that automobile assembly
plants would require computer competencies to the extent they do today? As a more vivid
example for you, think about how the role of human resource assistant has changed from
the days when most jobs in the personnel office were largely clerical and centered around
payroll issues.
There are a number of potential sources for information about a job. Cameras can be used
to observe tasks, and a variety of recording devices can be used to assess employees’
physiological reactions. The most common source for information is job incumbents and
supervisors for the job under study. Other possibilities include job analysts or specialists
trained to conduct job analyses, outside observers or consultants, subordinates to the job
under study, clients or customers, or persons simply in a good position to observe the job as
it is performed. Most agencies of the federal government have job analyst positions whose
major responsibility is analysis of other agency jobs. Obviously, more sources of informa-
tion will probably more fully capture a job on a project. As we discuss later, the source of
the work analysis data does have an impact of results.
Use different work analysis methods for different HR functions/purposes
The Form of Job Information
The Standardization of the Work Analysis Content
Sources of Job Information
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A great number of formal approaches are available today. One of the best sources of infor-
mation on traditional job analysis is the two-volume Job Analysis Handbook for Business, Industry, and Government. The handbook describes 18 different job analysis methods in use today. 9 A very readable text for novices is Everything You Always Wanted to Know about Job Analysis, authored by one of the leading authorities in the field. 10 This chapter concentrates discussion on methods that have been used to accomplish a specific purpose.
The Position Analysis Questionnaire (PAQ) is a standardized questionnaire that assesses activities using 187 items in six categories. 11 These are
1. Information input —where and how does the worker obtain the information needed to perform the job (e.g., use of visual or sensory input)?
2. Mental processes —what reasoning, planning, decision-making, or information- processing activities are necessary to perform the activities?
3. Work output —what physical activities are performed, and what tools are used?
4. Relationships with other people —what relationships with other people are re- quired to perform the job (e.g., negotiating, performing supervisory activities)?
5. Job context —in what physical and social contexts is the work performed (e.g., hazards, stress)?
6. Other job characteristics —what other activities or characteristics are relevant to the job (e.g., apparel required, work schedule, salary basis)?
Sample items for each of the six PAQ categories are presented in Figure 4-5 . Items on
the PAQ are rated using different scales, including importance, amount of time required,
extent of use, possibility of occurrence, applicability, and difficulty. 12 The PAQ can be
completed in about 2½ hours. An online scoring form is now available (www.paq.com).
Each job is scored on 32 dimensions, and a profile is constructed for the job. Norms are
provided so that the job profile can be compared to profiles of benchmark jobs. PAQ
results are provided based on the user’s purpose(s) for conducting the work analysis. For
example, a user may request “test predictions” where the PAQ results identify particular
tests with estimated validities for the job under study, or job evaluation points could be
provided for compensation purposes. Figure 4-6 presents a printout from a PAQ analysis
of a job analyst’s job. This printout identifies “G” or general intelligence as the most valid
factor underlying job performance as a job analyst and even recommends particular tests
(e.g., Wonderlic) that can be used to measure “G” intelligence. The 0.33 “Predictive Va-
lidity Coefficient” is the estimated correlation between scores on a general intelligence or
cognitive ability test and job performance. This correlation indicates that the construct of
general intelligence and the tests that measure it are valid predictors for this job (and the
most valid of those considered) based on a comparison of the PAQ responses for the job
under study with the PAQ database.
The extensive research that has been conducted with the PAQ makes it one of the most
useful of the standardized job analysis instruments, particularly for selection and compen-
sation purposes. For example, PAQ results were used to first select a particular test and
then to successfully support an argument of job relatedness in a Title VII case involving a cognitive ability test that had caused adverse impact at the James River Corporation. 13
The approach is also excellent for small businesses with little or no expertise in human
resources. Considerable research supports the use of the PAQ. However, the PAQ must
usually be completed by a trained job analyst rather than incumbents since the language in
the questionnaire is difficult and at a fairly high reading level. The instrument also lacks the
specificity that can be gained by a questionnaire developed within the company for one or
more particular positions or one adapted from the O*NET. While in Taylor v. James River the company was able to successfully defend a test that caused adverse impact, the safest
WHAT ARE THE MOST USEFUL FORMAL APPROACHES TO WORK ANALYSIS?
Position Analysis Questionnaire (PAQ) Six categories of activities
PAQ results can identify useful tests
PAQ results and job relatedness
Taylor v. James River
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Code Extent of Use (U)
N Does not apply 1 Nominal, very infrequent 2 Occasional 3 Moderate 4 Considerable 5 Very substantial
Code Importance to This Job (I)
N Does not apply 1 Very minor 2 Low 3 Average 4 High 5 Extreme
Code Importance to This Job (I)
N Does not apply 1 Very minor 2 Low 3 Average 4 High 5 Extreme
Figure 4-5 Sample Items from the PAQ
POSITION ANALYSIS QUESTIONNAIRE (PAQ) 1 INFORMATION INPUT
1.1 Sources of Job Information Rate each of the following items in terms of the extent to which it is used by the worker as a source of information in performing the job.
1.1.1 Visual Sources of Job Information
1 U Written materials (books, reports, office notes, articles, job instructions, signs, etc.)
2 U Quantitative materials (materials that deal with quantities or amounts, such as graphs, accounts, specifications, tables of numbers, etc.)
3 U Pictorial materials (pictures or picturelike materials used as sources of information, for example, drawings, blueprints, diagrams, maps, tracings, photographic films, x-ray films, TV pictures, etc.)
2 MENTAL PROCESSES 2.2 Information Processing Activities
In this section are various human operations involving the “processing” of information or data. Rate each of the following items in terms of how important the activity is to the completion of the job.
39 I Combining information ( combining, synthesizing, or integrating information or data from two or more sources to establish new facts, hypotheses, theories, or a more complete body of related information, for example, an economist using information from various sources to predict future economic conditions, a pilot flying aircraft, a judge trying a case, etc.)
40 I Analyzing information or data (for the purpose of identifying underlying principles or facts by breaking down information into component parts, for example, interpreting financial reports, diagnosing mechanical disorders or medical symptoms, etc.)
49 S Using mathematics (indicate, using the code below, the highest level of mathematics that the individual must understand as required by the job)
Code Level of Mathematics N Does not apply. 1 Simple basic (counting, addition and subtraction of 2-digit numbers or less) 2 Basic (addition and subtraction of numbers of 3 digits or more, multiplication, division, etc.) 3 Intermediate (calculations and concepts involving fractions, decimals, percentages, etc.) 4 Advanced (algebraic, geometric, trigonometric, and statistical concepts, techniques, and procedures
usually applied in standard practical situations) 5 Very advanced (advanced mathematical and statistical theory, concepts, and techniques, for example,
calculus, topology, vector analysis, factor analysis, probability theory, etc.)
3 WORK OUTPUT 3.6 Manipulation/Coordination Activities
Rate the following items in terms of how important the activity is to completion of the job.
93 I Finger manipulation (making careful finger movements in various types of activities, for example, fine assembly, use of precision tools, repairing watches, use of writing and drawing instruments, hand painting of china, etc., usually the hand and arm are not involved to any great extent).
94 I Hand-arm manipulation (the manual control or manipulation of objects through hand and/or arm movements, which may or may not require continuous visual control, for example, repairing automobiles, packaging products, etc.)
(Continued)
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Code Importance to This Job (I)
N Does not apply 1 Very minor 2 Low 3 Average 4 High 5 Extreme
Code Amount of Time (T)
N Does not apply (or is very incidental) 1 Under 1/10 of the time 2 Between 1/10 and 1/3 of the time 3 Between 1/3 and 2/3 of the time 4 Over 2/3 of the time 5 Almost continually
Figure 4-5 (Continued)
RELATIONSHIPS WITH OTHER PERSONS
4 RELATIONSHIPS WITH OTHER PERSONS This section deals with different aspects of interaction between people involved in various kinds of work.
4.1 Communications Rate the following in terms of how important the activity is to the completion of the job. Some jobs may involve several or all of the items in this section.
4.1.1 Oral (communicating by speaking)
99 I Advising (dealing with individuals in order to counsel and/or guide them with regard to problems that may be resolved by legal, financial, scientific, technical, clinical, spiritual, and/or other professional principles)
100 I Negotiating (dealing with others in order to reach an agreement or solution, for example, labor bargaining, diplomatic relations, etc.)
4.3 Amount of Job-Required Personal Contact
112 S Job-required personal contact (Indicate, using the code below, the extent of job-required contact with others, individually or in groups, for example, contact with customers, patients, students, the public, superiors, subordinates, fellow employees, official visitors, etc.; consider only personal contact which is definitely part of the job).
Code Extent of Required Personal Contact 1 Very infrequent (almost no contact with others is required) 2 Infrequent (limited contact with others is required) 3 Occasional (moderate contact with others is required) 4 Frequent (considerable contact with others is required) 5 Very frequent (almost continual contact with others is required)
5 JOB CONTEXT 5.1 Physical Working Conditions
This section lists various working conditions. Ratethe average amount of time the worker is exposed to each condition during a typical work period.
5.1.1 Outdoor environment
135 T Out-of-door environment (subject to changing weather conditions).
6 OTHER JOB CHARACTERISTICS 6.4 Job Demands (cont.)
172 I Following set procedures (need to follow specific set procedures or routines in order to obtain satisfactory outcomes, for example, following check-out lists to inspect equipment or vehicles, following procedures for changing a tire, performing specified laboratory tests, etc.)
173 I Time pressure of situation (rush hours in a restaurant, urgent time deadlines, rush jobs, etc.)
Source: E. J. McCormick and P. R. Jeanneret, “Position Analysis Questionnaire (PAQ),” in The Job Analysis Handbook for Business, Industry and Government, ed. S. Gael, vol. II, pp. 826–827. Reprinted with permission.
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Figure 4-6 Option 4A: Job Profile—Part I
IDENTIFICATION INFORMATION
PAQ Number: 002335 Organization Number: 1 Organization: DOTPAQ Group #: 2335 Record #: 0001
Job Title: JOB ANALYST NUMBER OF ANALYSTS/TYPE Dept/Unit: ADMIN SPEC Incumbents: Analysis: Analyst(s): AVERAGE/DB Supervisors: Unknown: Completed: 01/91 WORKFORCE ANALYSTS (optional) Dot Number: 166267018 N Number of Job Incumbents: 39
Dot Coded By: ORGANIZATION % FM: % WH: %BL: Processed: 08/20/08 % HS: % TO:
JOB EVALUATION, FLSA EXEMPTION AND JOB PRESTIGE PREDICTIONS
Equation(s) Used to Calculate Job Evaluation Points (2) Job Evaluation Points: 816 Reported Median Monthly Compensation: Probability this Job is EXEMPT from the Fair Labor Standards Act: 1.000 Job Prestige Score: 55.1
TEST PREDICTIONS
GATB TESTS* *General Aptitude Test Battery
Predicted Score Range
Prob. of Use
Predictive Validity Coefficient SIMILAR TESTS
Predicted Score Range
Low Avg High Low Avg High
G-Intelligence 102 115 128 .93 .33 − Adaptability 17 20 25 Learning Abilt 37 43 49 Wonderlic P.T 19 26 33 V-Verbal Aptitude 99 113 127 .37 .27 − EAS-Verbal 13 18 22 PTI-Verbal 24 33 40 SET-Verbal 24 37 46 DAT-Verbal
Rsn * * *
DAT-LU Sentenc
* * *
DAT-LU Spelling
* * *
N-Numerical Apt. 100 113 127 .60 .28 − Arith Fundmntl
31 36 40
Arithmtc Index
40 47 53
EAS-Numerical 25 34 43 FIT-Arithmetic 28 34 39 PTI-Numerical 14 20 24 SET-Numerical 28 40 50 DAT-Numrcl
Abil * * *
S-Spatial Apt. 92 109 126 .16 .18 − EAS-Spatial 17 27 34 FIT-Assembly 8 11 14 Mn Ppr Frm
Brd 42 50 57
DAT-Space Rltn
* * *
P-Form Percept. 94 111 128 .19 .18 − None Q-Clerical Percept.
101 116 131 .50 .23 − EAS-Visual Spd
83 96 111
Mn Clrcl- Names
113 136 165
SET-Clerical 28 34 42 DAT-Clercl
Spd * * *
K-Motor Coord. 95 112 129 .20 .17 − None F-Finger Dexterity 81 101 120 .01 .15 − None M-Manual Dexterity
83 104 124 .07 .14 − None
MYERS-BRIGGS TYPE INDICATOR (MBTI) (est. % of incumbents with high score on): Extraversion 54 Sensing 52 Thinking 50 Judgment 62 Introversion 46 Intuitive 48 Feeling 50 Perception 38
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approach would be to use PAQ results to recommend particular tests for hiring, but as soon
as it is “technically feasible,” an emprical study relating test scores to job performance should be done (“technical feasibility” means at least 100 pairs of scores).
As with almost all questionnaires, results must be interpreted with caution and with con-
sideration of the “hidden agendas” of the source of the data. The PAQ was administered to
a graphic artist of a specialty mail-order firm. The graphic artist job was part-time and paid
about 50 cents per hour above minimum wage. The job entailed creating original stencils
for use in casting and dying. The current incumbent had approximately 6 months’ experi-
ence at the job and was taking courses part-time at a local community college. PAQ analy-
sis of the job revealed that the job required a PhD in art history or related areas and that
compensation appropriate for the work was $55,000 per year! This result can be explained
in large part by two factors. First, in the course of the analysis, answers were recorded just
as the incumbent provided them to the analyst despite observations of the work performed
that indicated the incumbent was grossly exaggerating the behavioral requirements of the
job. And perhaps more importantly, there had been a rumor in this organization that the job
analyses were to be used to revise current compensation practices. The lesson here is that
the organizational context can strongly influence the validity of work analysis.
Although the PAQ has been and can be used to study managerial positions, other instru-
ments are more suitable for executive and managerial jobs. The most heavily researched
of such instruments is the Management Position Description Questionnaire (MPDQ) , a standardized instrument designed specifically for use in analyzing managerial jobs. The
274-item questionnaire contains 15 sections, one of which is presented in Figure 4-7 . 14
Two and one-half hours are required to complete the entire MPDQ. In most sections, re-
spondents (usually the managers above the position under study) are asked to indicate how
significant each item is to the position. For example, they may state that “marketing deci-
sions” are of substantial significance to the position. A computer program generates eight
reports, including a management position description, a position-tailored performance ap-
praisal form, and a group comparison report, among others. 15 The data provided by this
report are particularly valuable for determining areas of emphasis in hiring, training, and
staff development. For example, Office Depot relied on the MPDQ results to develop test-
ing materials to be used in hiring its district managers. Figure 4-7 also presents a portion
of Office Depot’s results. General Cinema relied on the MPDQ to construct a job-related
behavioral interview and a test for theater managers.
MPDQ results, however, will not tell you whether a particular job specification is necessary for any given position. For example, Office Depot dropped its new requirement that associate store managers have college degrees not based an MPDQ results but rather a
study showing no statistical relationship or correlation between having a graduate college
degree and manager performance.
Although the term is confusing and, some would argue, describes a process similar to
job analysis, most experts contend that competency modeling is focused more on how objectives are accomplished than on what is accomplished. In addition, the process of
competency modeling is usually concentrated on managerial positions and should be more
closely linked to business goals and strategies. Competency modeling attempts to identify
and define the individual competencies that are common or core for an occupational group
or the organization as a whole. By contrast, job analysis methods such as the PAQ and the
MPDQ attempt to draw distinctions across jobs. The most common purpose for compe-
tency modeling is to derive performance management and training programs.
Software, now available for competency modeling through PeopleSoft, SAP, and Ora-
cle, is very popular as the starting point for comprehensive enterprisewide resource plan-
ning systems. Try www.Haygroup.com for a popular competency modeling approach.
The focus on core competencies to drive HR systems and applications is very popular
today despite the general lack of rigor in the derivation of the so-called competencies. The
integration of the measurement rigor of methods such as the PAQ and the MPDQ with
Management Position Description Questionnaire (MPDQ)
Competency Modeling
Technical feasibility
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Figure 4-7 Sample Portion of
MANAGEMENT POSITION DESCRIPTION QUESTIONNAIRE (MPDQ) and results
NAME: B. B. BARKER ORGANIZATION: CDBA
EMPLOYEE I.D.: 222 SUPERVISOR: D. D. DUNCAN
POSITION TITLE: MANAGER SUPERVISOR'S TITLE: MANAGER
FUNCTIONAL AREA: HUMAN RESOURCES % OF JOB DESCRIBED: 90%
SUPERVISORY LEVEL: SUPERVISOR DATE COMPLETED: 9/11/12
I. GENERAL INFORMATION
A. HUMAN RESOURCE RESPONSIBILITIES
—Management responsibility for 7 employees: 5 (71%) Full Time—Salaried Exempt
2 (28%) Part Time—Salaried Nonexempt
— 7 report directly and 0 report on a dotted line basis.
—Highest direct subordinate: SR. PROGRAMMER
— No geographically separate facilities managed directly.
B. FINANCIAL RESPONSIBILITIES
—No annual operating budget.
—Sales for last fiscal year: $ 78,000.
—Sales objective for current fiscal year: $ 220,000.
—Revenue for last fiscal year. $ 275,000.
—Revenue objective for current fiscal year: $ 230,000.
II. POSITION ACTIVITIES
A. DECISION MAKING
Decision Making: 5% of jobholder's time is spent on this function and it is VERY IMPORTANT to this position.
—Related activities and their significance:
Significance Item No. Activity
CRUCIAL 5 Consider the long-range implications of decisions.
CRUCIAL 8 Make decisions in new/unusual situations without clear guidelines on basis of precedent/experience.
CRUCIAL 11 Make critical decisions under time pressure.
CRUCIAL 18 Process and evaluate a variety of information before making a decision.
CRUCIAL 21 Make decisions that significantly affect customers/clients.
SUBSTANTIAL 4 Make decisions concerning the future direction of operations.
SUBSTANTIAL 7 Consider legal or ethical constraints, as well as company policy or goals, when making decisions.
SUBSTANTIAL 12 Make major product/program/technology/marketing decisions in implementing strategic business plan.
SUBSTANTIAL 14 Make decisions without hesitation when required.
MODERATE 1 Evaluate the costs/benefits of alternative solutions to problems before making decisions.
SIGNIFICANCE
THE DUTIES OF THIS POSITION REQUIRE YOU TO:
––––– 1. Define areas of responsibility for supervisory/managerial personnel.
––––– 2. Schedule activities of subordinates on a day-to-day basis to maintain steady work flow.
––––– 3. Interact face-to-face with subordinates on an almost daily basis.
––––– 4. Delegate work and assign responsibility to subordinates.
––––– 5. Facilitate the completion of assignments when subordinates are unable to meet commitments.
––––– 6. Provide detailed instructions to subordinates when making assignments.
(Continued)
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––––– 7. Coach subordinates on technical aspects of the job.
––––– 8. Provide on-the-job training for employees.
––––– 9. Frequently review and provide feedback concerning the accuracy and efficiency of subordinates' work.
––––– 10. Motivate employees through interpersonal interactions rather than through external incentives (e.g., pay, promotion, status, etc.).
––––– 11. Motivate subordinates to improve performance through a process of goal setting and positive reinforcement (i.e., incentives).
––––– 12. Work with subordinates to identify and correct weaknesses in performance.
––––– 13. Conduct formal performance appraisals with subordinates.
––––– 14. Develop executive-level management talent.
––––– 15. Establish formal career development plans with employees.
––––– 16. Implement career development and management succession plans.
––––– 17. Identify the training needed for employees to acquire the skills/knowledge necessary for advancement and ensure that the appropriate training is obtained.
––––– 18. Work with employees in highly emotional situations concerning personal or career problems.
––––– 19. Arbitrate conflicts between supervisors and employees.
––––– 20. Investigate and/or settle employee grievances/complaints.
––––– 21. Take necessary action to prevent and/or resolve alleged discriminatory practices.
––––– 22. Interpret, administer, and enforce personnel policies and practices (e.g., employee benefits, training or education reimbursement, affirmative action).
––––– 23. Interpret and administer union contract agreements in the supervision of subordinates.
––––– 24. Interview and hire individuals for approved positions.
Figure 4-7 (Continued)
this focus on core competencies for HR applications should make competency modeling a
more effective method for whatever purpose the data are collected.
Competency modeling is a popular form of work analysis today. A competency is de-
fined as an “underlying characteristic of a person which results in effective and/or superior
performance on the job” or as a “cluster of related knowledge, skills and attitudes that
affects a major part of one’s job (role or responsibility), that correlates with performance
on the job, and that can be measured against well-accepted standards.” 16 The set of com-
petencies is usually called the competency “model.” Competencies are not significantly
different from KASOCs although the “modeling” approach tends to be more focused on or-
ganizational strategy goals and important performance or outcome measures. At Microsoft,
for example, a small set of “foundational” or “core” competencies is identified across all
competency models within the company. These foundational competencies are considered
essential for success in any role at Microsoft. These core competencies are then supple-
mented by more job-specific competencies for particular jobs and job families.
Competency modeling typically derives job specifications based on an organiza-
tion’s strategic plans. The competencies are then used to generate a “common language”
across HR practices and products such as personnel selection, performance appraisal,
training, and compensation. The approach is compatible with the numerous calls for the
strategic alignment of HR practices with an organization’s strategic plans. Compared to
other work analysis methods, the focus is much more on identifying the competencies
underlying (and distinguishing between) superior and average performance.
The U.S. Department of Labor, Employment and Training Administration (ETA) is
currently working with business leaders, educators, and others to develop comprehensive
industry competency models in economically important industries. Competency models
are used for developing curricula, selecting training materials, setting licensure and cer-
tification requirements, writing job descriptions, recruiting and hiring, and performance
reviews.
It is estimated that over 75 percent of companies have some form of competency-
based application. 17 It is estimated that firms spend $100 million per year developing,
What is a competency ?
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implementing, and revising competency models. One popular, two-level competency
model distinguishes “can-do competencies” (skills and knowledge derived from education
and experience) from “will-do competencies” (personality and attitudinal characteristics
that reflect an individual’s willingness to perform). 18
The three major differences between traditional job analysis and competency modeling
are as follows: (1) Job analysis (JA) is more focused on tasks or behaviors while competency
modeling is focused on the KASOCs required to perform the tasks effectively; (2) While
most JA methods collect and analyze survey data from subject matter experts, competency
modeling tends to be more (but shouldn’t be) qualitative; and (3) Competency model-
ing tends to be more future oriented and driven by the strategic plans of the organization.
Perhaps the most significant difference between traditional job analysis methods and com-
petency modeling is that executives tend to pay more attention to competency modeling,
which can ultimately have a large impact on actual managerial decisions. One clear com-
mon goal of traditional JA and competency modeling is that both approaches are directed at
attempting to understand the necessary requirements for performing a job effectively.
The process of deriving competencies requires a significant “inferential leap” from ac-
tual job tasks or behaviors to the competencies. This “leap” can cause legal problems. The
Uniform Guidelines on Employee Selection Procedures (discussed in Chapter 3) require demonstrable linkages between job specifications and important job behaviors.
In an illustration of this rigorous approach, competencies were defined as clusters of
measurable and relevant behaviorally based characteristics or capabilities of people. 19 The
capabilities were described as descriptors reflecting abilities to perform specific work
activities and included specific skills or specific knowledge. The goal was to define all
competencies with specific, observable, and verifiable descriptors that were reliably and
logically classified together.
The researchers used a variety of methods and data to derive competencies for assess-
ment. First, they used the Critical Incident Technique for associate and store manager jobs. They also reviewed company records and performance assessment criteria and conducted
correlational studies of the relationship between store managers’ characteristics (and perfor-
mance). Next, they interviewed subject matter experts (SMEs) and administered a question-
naire that derived ratings of the importance of various managerial tasks, activities, behaviors,
knowledge, skills, and abilities for retail management positions within the company.
Four groups of SMEs—made up of trained HR specialists, district managers, and store
managers—drafted and refined a list of competencies based on both the strategic busi-
ness goals for the company and questionnaire results. The descriptor content for each
competency was then refined into the list of competencies. A different group of SMEs
was then asked to evaluate the “relative importance” weights for each competency and
“relative predictive” weights for each competency. Seven competencies were identified
as “core” or “generalizable” competencies such that each was judged to be a critical and
independent underlying competency for successful performance at two levels of man-
agement. These categories were: technical knowledge, oral presentation/communication,
written communication, interpersonal skills, planning and organizing, decision making,
and leadership. These competencies were judged to be important for and representative of
relatively stable and important work activities for three layers of retail management jobs
within the organization.
While there are a number of so-called validated models available for managerial jobs,
competency modeling usually does not determine what specific job specifications to re- quire for a particular job or assignment. For example, the typical competency modeling
process would require an inferential leap to determine particular educational credentials
or the number of years of experience, the types of specifications most often written into
want ads and provided to recruiters for searches. In general, much like the discussion in
Chapter 3 regarding validation and job relatedness, the recommendation here would be to
use whatever data you have to assess particular job specifications. If it’s possible to cor-
relate the possession of a particular job specification with job performance, do the study. If
EEO difficulties (e.g., prima facie evidence) should arise because of a particular job speci-
fication that has been used to screen job candidates, the plaintiffs will make every attempt
to obtain data and conduct such a study.
Critical incidents
Core competencies
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Driven by the availability of vendor software, many companies use competency model-
ing to evaluate the performance of their managers. The performance appraisals are then
used to make important decisions about these managers. A problem here could be the
difficulty in distinguishing between competencies and psychological traits. For example,
the managerial competencies utilized by the American Management Association include
self-confidence, positive regard, self-control, spontaneity, stamina, and adaptability. Jag-
uar Cars reported complaints from managers who received low performance ratings on the
“integrity” competency as a part of the performance appraisal process. Office Depot evalu-
ates its store managers on their “personal maturity.” Store managers often disagreed with
ratings indicating they needed to work on their personal maturity. Ratings on these types
of competencies can cause the legal difficulties covered in Chapter 3 when ratings are used
to make important personnel decisions about people such as promotions, terminations, or
raises. Assessments of competencies should be clearly distinguished from measures of
performance on any given job.
Figure 4-8 presents a set of best practices for competency modeling based on published
research, and the experiences from major perspectives on the topic, including two major
companies (Microsoft and Boeing), a major consulting firm, an academic expert on the
topic, a government agency, and the Society for Industrial and Organizational Psychology
(SIOP) taskforce on competency modeling.
The Boeing Company has incorporated its competency models into many HR pro-
cesses, including structured interviews, reductions-in-force, and training and development.
Competencies vs. Traits
Figure 4-8 Best Practices in Competency Modeling
ANALYZING COMPETENCY INFORMATION (IDENTIFYING COMPETENCIES) 1. Consider the organizational context—models should be tailored to the organization. 2. Link competency models to organizational goals and objectives—develop (and align) the competency model by defining organiza-
tional goals or objectives. 3. Start at the top—begin information collection with top executives. 4. Use rigorous job analysis methods to develop competencies (e.g., multiple data collection methods, sound survey, sampling and
statistical methods)—assess reliability of the data and validate the model with important performance/outcome criteria linked to objectives.
5. Consider future-oriented job requirements—focus on long-range business strategies and identify the key competencies required to execute those strategies.
6. Use additional unique methods—use in-depth interviews with senior executives, and collect detailed information on past situations on the job (the critical incident technique is a good approach here).
ORGANIZING AND PRESENTING COMPETENCY INFORMATION 7. Define the anatomy of a competency (the language of competencies)—competencies best defined as KASOCs, with behaviors used
to describe or illustrate the observable actions/outcomes on the job as a result of the competencies. 8. Define levels of proficiency on competencies—define levels in terms of observable behaviors and outcomes and include contextual
factors. 9. Use organizational language—use an organization's unique language (e.g., common expressions, acronyms, technology, job titles,
business unit titles, products). 10. Identify and include both core or fundamental (cross-job) and technical (job-specific) competencies—"fundamental" competencies
because they refer to basic capabilities versus unique or job-specific or “technical" competencies. 11. Use competency libraries—this is efficient but use these “off-the-shelf” competencies as a starting point; tailor competency labels,
definitions, and proficiency levels to particular organizational needs. 12. Achieve the proper level of granularity (number of competencies and amount of detail)—limit the total number of competencies to a
reasonable number considered most important to distinguishing superior from average performance; can be hierarchically arranged so they are divided into categories and subcategories.
13. Use diagrams, pictures, and heuristics to communicate competency models to employees—keep these aids simple; focus on the core idea of the model. Not every detail of the model needs to be included.
USING COMPETENCY INFORMATION 14. Use organizational development techniques to ensure competency modeling acceptance and use—involve many employees from
various levels in the creation of the model (critical for getting people to use the model). 15. Use competencies to develop HR systems (hiring, appraisal, promotion, compensation)—competency models are easier to use in cre-
ating HR systems than traditional job analysis methods. 16. Use competencies to align the HR systems—alignment facilitated because of small number of competencies stated at a level of gen-
erality so that their relationships with different HR systems are apparent. 17. Use competencies to develop a practical “theory” of effective job performance tailored to the organization—they should explain how
and why competencies are related to job performance and organizational goals. 18. Use information technology to enhance the usability of competency models—use a single IT source of model information to enhance
use and interpretation. 19. Maintain the currency of competencies over time—having a plan for updating competencies is critical. 20. Use competency modeling for legal defensibility (e.g., test validation)—if models are developed in scientifically rigorous manner,
they should be appropriate (and could be advantageous) for demonstrating job relatedness.
Source: Adapted from Campion, M. A., Fink, A. A., Ruggeberg, B. J., Carr, L., Phillips, G. M. and Odman, R. B. (2011). Doing Competencies Well: Best Practices in Competency Modeling. Personnel Psychology, 64, 225–262.
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For example, the structured interview process incorporates behavioral anchors describing
low to highly effective behaviors, and interview questions are written to align to the entry,
career, and advanced levels of the job. The reduction-in-force process begins by selecting
those competencies identified for a job family that are most critical for current and future
performances. Employees are then evaluated on those competencies using an anchored
rating scale. Finally, training and development opportunities were created to align to gen-
eral and technical competencies needed for current job performance and also to prepare
employees for future jobs and career paths.
At Microsoft, the competency models are the center of its midyear career discussion
(MYCD) process. During MYCD, employees and their managers each complete compe-
tency and career stage profile (CSP) assessments. These assessments then form the basis
for developmental planning and for targeting future work and roles that are a good fit for
an employee’s present (and planned) competencies.
At the U.S. Department of State, the competency models guide promotion panels that
review the performance appraisal reports to determine promotions, required training
courses for each career level, and to organize course offerings for the State Department’s
internal university, the Foreign Service Institute. The model is also used to organize infor-
mation in a skills profiling system. Its competency model integrates and aligns each HR
system in order to create a development-oriented HR system that ensures the readiness of
the workforce, a fundamental requirement for an organization whose main purpose is to
handle each new international diplomatic crisis.
The Occupational Information Network, or O*NET, provides an automated database for
collecting, describing, and presenting reliable and valid occupational information. O*NET
is now the federal government’s primary source of information about occupations (see
Figure 4-9 for a summary of what O*NET can do). O*NET uses multiple descriptors to
reveal “multiple windows” on the world of work that can be used to address different uses
for the information.
Competency Modeling at Boeing
Competencies at Microsoft
O*NET
Figure 4-9 What Is O*NET?
O*NET, the Occupational Information Network, is a comprehensive database of worker attributes and job characteristics. As the replacement for the Dictionary of Occupational Titles (DOT) , O * NET will be the nation's primary source of occupational information. O*NET is being developed as a timely, easy-to-use resource that supports public and private sector efforts to identify and develop the skills of the American workforce. It provides a common language for defining and describing occupations. Its flexible design also captures rapidly changing job requirements. In addition, O*NET moves occupational information into the technological age. As the basis for enhanced product development, the O*NET database can serve as the engine that drives value-added applications designed around core information. It provides the essential foundation for facilitating career counseling, education, employment, and training activities. The database contains information about knowledges, skills, abilities (KSAs), interests, general work activities (GWAs), and work context. O*NET data and structure will also link related occupational, educational, and labor market information databases to the system.
O*NET may be used to: • Align educational and job training curricula with current workplace needs. • Create occupational clusters based on KSA information. • Develop job descriptions or specifications, job orders, and resumes. • Facilitate employee training and development initiatives. • Develop and supplement assessment tools to identify worker attributes. • Structure compensation and reward systems.
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2 / Acquiring Human Resource Capability
O*NET is used by many employers now and for a variety of purposes. Boeing used
O*NET to help laid-off employees in Seattle find new jobs. Some state agencies have
used O*NET’s emerging occupations data to plan (and fund) training and educational
programs. Among the many users of O*NET products are: assessment and career informa-
tion delivery systems, educational and research institutions, federal and state government
agencies, international users, private companies, public workforce investment systems and
workforce investment boards, and the U.S. Armed Forces.
O*NET has more than 275 standardized descriptors of skills, knowledges, tasks, oc-
cupation requirements, and worker abilities, interests, and values to assist managers in the
building of accurate job descriptions. Organizations can also use the O*NET Question- naires for free to apply O*NET descriptors to their own particular work situation. O*NET information and tools can be used to identify important elements of a job for developing
or choosing training materials, to identify skill requirements to align job needs with more
qualified applicants, and to define success factors for promotion and advancement.
O*NET uses “generalized work activities,” which are broader than traditional task
statements so that the same descriptors can be used across jobs. Because of the many
intended uses for O*NET, the descriptors for each job include tasks, behaviors, abilities,
skills, knowledge, styles, and work context. O*NET is based on a six-domain content
model that attempts to provide a descriptive framework for describing jobs in greater
detail. Figure 4-10 presents the content model and major categories within each of the six
domains of the model. All of the questionnaires used to describe work using the O*NET
model can be completed by job incumbents, which will be the primary source of infor-
mation about work. Unlike many popular methods (e.g., PAQ), the reading level for the
questionnaires allows for most incumbents to participate. All questionnaires can be down-
loaded from the O*NET website (onetcenter.org).
One of the many unique features of O*NET is that it classifies jobs according to worker
personality and dispositional styles. Jobs are classified according to seven general style
categories and 17 subcategories. The seven style categories are achievement orientation,
social influence, interpersonal orientation, adjustment, conscientiousness, independence,
and practical intelligence. This information can be useful for the development of selection
procedures for hiring employees and for vocational counseling.
O*NET is the most comprehensive methodology for describing occupations and work-
ers. Figure 4-11 presents some recent illustrations of O*NET use. One showed that O*NET
data can help practitioners identify useful tests for employee selection. 20 Many companies
Figure 4-9 (Continued)
• Evaluate and forecast human resource requirements. • Design and implement organizational development initiatives. • Identify criteria to establish performance appraisal and management systems. • Identify criteria to guide selection and placement decisions. • Create skills-match profiles. • Explore career options that capitalize on individual KSA profiles. • Target recruitment efforts to maximize person-job-organizational fit. • Improve vocational and career counseling efforts.
WHAT IS THE FOUNDATION OF O * NET? Common Language O*NET offers a common language for communication across the economy and among workforce development efforts. It provides definitions and concepts for describing worker attributes and workplace requirements that can be broadly understood and easily accepted. Using comprehensive terms to describe the KSAs, interests, content, and context of work, O*NET provides a common frame of reference for understanding what is involved in effective job performance. The goal of O*NET's common language is straightforward: “improve the quality of dialogue among people who communicate about jobs in the economy, generate employment statistics, and develop education and training programs.” It provides the shared foundation of language upon which to build private and public sector workforce development efforts. Employer hiring requirements will have the same meaning for human resource practitioners, workers, education and training developers, program planners, and students. Conceptual Framework The conceptual foundation of O*NET is called the Content Model. The Content Model provides a framework for classifying, organizing, and structuring O*NET data.
O * NET useful for developing hiring procedures
Download job descriptions from O * NET
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now use O*NET to download basic job descriptions (there are over 1,000 job descriptions).
Figure 4-12 presents a portion of the job description for human resources managers retrieved
from O*NET. Occupational data, including salary information, are also available. The infor-
mation is obviously a great start on a detailed job description for any HRM job. Completion
of the work context questions will add useful detail. The O*NET database also provides very
useful compensation data at both the state and national levels (see Figure 4-12 ).
The critical incident technique is a qualitative approach for obtaining specific, behav- iorally focused descriptions of work or other activities. The technique originally was de-
veloped as a training needs assessment and performance appraisal tool. 21 In this regard,
individuals recalled and reported specific behavioral examples of incidents that reflected
exceptionally good or exceptionally poor performance.
A critical incident should possess four characteristics. It should be specific, focus on observable behaviors that have been exhibited on the job, describe the context in which the behavior occurred, and indicate the consequences, outcomes, or products of the behavior. A critical incident also must be sufficiently detailed so that knowledgeable people will
picture the same incident as it was experienced by the individual. One vivid example of
a critical incident characterizing extremely poor performance was provided by a police
Figure 4-10 O*NET Content Model
Worker Requirements • Basic Skills • Cross-Functional Skills • Knowledge • Education
O*NET
Occupational Requirements • Generalized Work Activities • Work Context • Organizational Context
Worker Characteristics • Abilities • Occupational Values, Interests • Work Styles
Experience Requirements • Training • Experience • Licensure
Occupation-Specific Requirements • Occupational Skills, Knowledge • Tasks, Duties • Machines, Tools, and Equipment
Occupation Characteristics • Labor Market Information • Occupational Outlook • Wages
Source: N. G. Peterson et al., “Understanding Occupational Information Network (ONET): Implications for Practice and Research,” Personnel Psychology 54 (2001), p. 58. Reprinted by permission of Wiley-Blackwell.
Critical Incident Technique (CIT)
Four characteristics of a good critical incident
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Figure 4-11 Recent Illustrations of O*NET product and Data Use
The Boys and Girls Clubs of America developed a career preparation program to help teens make sound educational decisions, explore a variety of careers, and develop skills for success in the workplace.
CareerJournal.com, the Wall Street Journal Executive Career Site, conducted a study designed to identify the “best careers,” those occupa- tions for which workers report a high degree of satisfaction. CareerJournal used occupational data in the O*NET database
Colorado State University's Department of Psychology has developed an interactive career assessment tool to be used by Colorado's community college students.
CDM Internet is an online tool for individual assessment and career exploration. Targeted at students ages 12 and above, the system may also be used by adults reentering the world of work or transitioning between jobs.
Corporate Gray Online is a website devoted to linking employers with transitioning or former military personnel.
The Job Skills Transfer Assessment Tool (JobSTAT) is a web-based tool offered by the Minnesota Department of Employment and Economic Development.
The Traumatic Brain Injury Program at the Tennessee Rehabilitation Center relies on O*NET OnLine to help clients identify jobs they want to do and can do well.
JobZone is a career information and management system for adult jobseekers used in all of New York's regional One-Stop Employment Centers.
MyPlan.com is a comprehensive preparation website for school curriculum planning and career exploration. It presents valuable informa- tion to job seekers and students who want to make informed career-planning decisions. Wackenhut
my Skills myFuture is a website sponsored by the U.S. Department of Labor, Office of Workforce Investment. The site functions as a skills transferability tool, helping laid-off workers and other career changers find new occupations and job openings to explore.
The American Foundation for the Blind (AFB) uses O*NET data to help the visually impaired expand their employment possibilities.
Health and medical science career exploration with Life Works™ is accomplished through an interactive career development website oper- ated by the National Institutes of Health's Office of Science Education. Driven by O*NET data, the Life Works search engine, or Career Finder, offers an array of information on more than 100 health and medical science careers.
Figure 4-12 Job Description from O*NET
SUMMARY REPORT FOR: 11-3040.00—HUMAN RESOURCES MANAGERS Plan, direct, and coordinate human resource management activities of an organization to maximize the strategic use of human resources and maintain functions such as employee compensation, recruitment, personnel policies, and regulatory compliance. Sample of reported job titles: Human Resources Manager, Director of Human Resources, HR Director (Human Resources Director), Employee Benefits Manager, Employee Relations Manager.
View report: Summary Details Custom
Tasks | Knowledge | Skills | Abilities | Work Activities | Work Context | Job Zone | Interests | Work Styles | Work Values | Related Occupations | Wages & Employment
Tasks • Administer compensation, benefits and performance management systems, and safety and recreation programs. • Identify staff vacancies and recruit, interview, and select applicants. • Allocate human resources, ensuring appropriate matches between personnel. • Provide current and prospective employees with information about policies, job duties, working conditions, wages, opportunities for
promotion and employee benefits. • Perform difficult staffing duties, including dealing with understaffing, refereeing disputes, firing employees, and administering discipli-
nary procedures. • Advise managers on organizational policy matters such as equal employment opportunity and sexual harassment, and recommend
needed changes. • Analyze and modify compensation and benefits policies to establish competitive programs and ensure compliance with legal require-
ments. • Plan and conduct new employee orientation to foster positive attitude toward organizational objectives. • Serve as a link between management and employees by handling questions, interpreting and administering contracts and helping re-
solve work-related problems. • Plan, direct, supervise, and coordinate work activities of subordinates and staff relating to employment, compensation, labor relations,
and employee relations.
Knowledge Personnel and Human Resources—Knowledge of principles and procedures for personnel recruitment, selection, training, compensation
and benefits, labor relations and negotiation, and personnel information systems. (Continued)
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English Language—Knowledge of the structure and content of the English language including the meaning and spelling of words, rules of composition, and grammar.
Customer and Personal Service—Knowledge of principles and processes for providing customer and personal services. This includes cus- tomer needs assessment, meeting quality standards for services, and evaluation of customer satisfaction.
Administration and Management—Knowledge of business and management principles involved in strategic planning, resource alloca- tion, human resources modeling, leadership technique, production methods, and coordination of people and resources.
Law and Government—Knowledge of laws, legal codes, court procedures, precedents, government regulations, executive orders, agency rules, and the democratic political process.
Clerical—Knowledge of administrative and clerical procedures and systems such as word processing, managing files and records, stenog- raphy and transcription, designing forms, and other office procedures and terminology.
Education and Training—Knowledge of principles and methods for curriculum and training design, teaching and instruction for individu- als and groups, and the measurement of training effects.
Economics and Accounting—Knowledge of economic and accounting principles and practices, the financial markets, banking and the analysis and reporting of financial data.
Psychology—Knowledge of human behavior and performance; individual differences in ability, personality, and interests; learning and motivation; psychological research methods; and the assessment and treatment of behavioral and affective disorders.
Mathematics—Knowledge of arithmetic, algebra, geometry, calculus, statistics, and their applications.
Skills Active Listening—Giving full attention to what other people are saying, taking time to understand the points being made, asking ques-
tions as appropriate, and not interrupting at inappropriate times. Management of Personnel Resources—Motivating, developing, and directing people as they work, identifying the best people for the job. Reading Comprehension—Understanding written sentences and paragraphs in work-related documents. Writing—Communicating effectively in writing as appropriate for the needs of the audience. Speaking—Talking to others to convey information effectively. Negotiation—Bringing others together and trying to reconcile differences. Time Management—Managing one's own time and the time of others. Social Perceptiveness—Being aware of others' reactions and understanding why they react as they do. Critical Thinking—Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions or approaches
to problems. Monitoring—Monitoring/assessing performance of yourself, other individuals, or organizations to make improvements or take corrective
action.
Abilities Oral Comprehension—The ability to listen to and understand information and ideas presented through spoken words and sentences. Oral Expression—The ability to communicate information and ideas in speaking so others will understand. Written Comprehension—The ability to read and understand information and ideas presented in writing. Written Expression—The ability to communicate information and ideas in writing so others will understand. Speech Recognition—The ability to identify and understand the speech of another person. Speech Clarity—The ability to speak clearly so others can understand you. Problem Sensitivity—The ability to tell when something is wrong or is likely to go wrong. It does not involve solving the problem, only
recognizing there is a problem. Deductive Reasoning—The ability to apply general rules to specific problems to produce answers that make sense. Inductive Reasoning—The ability to combine pieces of information to form general rules or conclusions (includes finding a relationship
among seemingly unrelated events). Originality—The ability to come up with unusual or clever ideas about a given topic or situation, or to develop creative ways to solve a
problem.
Work Activities Establishing and Maintaining Interpersonal Relationships—Developing constructive and cooperative working relationships with others,
and maintaining them over time. Communicating with Supervisors, Peers, or Subordinates—Providing information to supervisors, co-workers, and subordinates by tel-
ephone, in written form, e-mail, or in person. Making Decisions and Solving Problems—Analyzing information and evaluating results to choose the best solution and solve problems. Staffing Organizational Units—Recruiting, interviewing, selecting, hiring, and promoting employees in an organization. Getting Information—Observing, receiving, and otherwise obtaining information from all relevant sources. Judging the Qualities of Things, Services, or People—Assessing the value, importance, or quality of things or people. Resolving Conflicts and Negotiating with Others—Handling complaints, settling disputes, and resolving grievances and conflicts, or oth-
erwise negotiating with others. Guiding, Directing, and Motivating Subordinates—Providing guidance and direction to subordinates, including setting performance
standards and monitoring performance. Evaluating Information to Determine Compliance with Standards—Using relevant information and individual judgment to determine
whether events or processes comply with laws, regulations, or standards. Coaching and Developing Others—Identifying the developmental needs of others and coaching, mentoring, or otherwise helping others
to improve their knowledge or skills.
(Continued)
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Work Context Telephone—How often do you have telephone conversations in this job? Indoors, Environmentally Controlled—How often does this job require working indoors in environmentally controlled conditions? Structured versus Unstructured Work—To what extent is this job structured for the worker, rather than allowing the worker to determine
tasks, priorities, and goals? Contact With Others—How much does this job require the worker to be in contact with others (face-to-face, by telephone, or otherwise)
in order to perform it? Electronic Mail—How often do you use electronic mail in this job? Spend Time Sitting—How much does this job require sitting? Freedom to Make Decisions—How much decision making freedom, without supervision, does the job offer? Importance of Being Exact or Accurate—How important is being very exact or highly accurate in performing this job? Face-to-Face Discussions—How often do you have to have face-to-face discussions with individuals or teams in this job? Letters and Memos—How often does the job require written letters and memos?
Job Zone
Title Job Zone Four: Considerable Preparation Needed
Overall experience A minimum of two to four years of work-related skill, knowledge, or experience is needed for these occupations. For example, an accountant must complete four years of college and work for several years in accounting to be considered qualified.
Job training Employees in these occupations usually need several years of work-related experience, on-the- job training, and/or vocational training.
Job zone Many of these occupations involve coordinating, supervising. Examples Managing, or training others. Examples include accountants, chefs and head cooks, computer programmers,
historians, pharmacists, and police detectives. SVP range (7.0 to ≤ 8.0) Education Most of these occupations require a four-year bachelor's degree, but some do not.
Interests Enterprising—Enterprising occupations frequently involve starting up and carrying out projects. These occupations can involve leading
people and making many decisions. Sometimes they require risk taking and often deal with business. Social—Social occupations frequently involve working with, communicating with, and teaching people. These occupations often involve
helping or providing service to others. Conventional—Conventional occupations frequently involve following set procedures and routines. These occupations can include work-
ing with data and details more than with ideas. Usually there is a clear line of authority to follow.
Work Styles Concern for Others—Job requires being sensitive to others' needs and feelings and being understanding and helpful on the job. Attention to Detail—Job requires being careful about detail and thorough in completing work tasks. Integrity—Job requires being honest and ethical. Initiative—Job requires a willingness to take on responsibilities and challenges. Independence—Job requires developing one's own ways of doing things, guiding oneself with little or no supervision, and depending on
oneself to get things done. Persistence—Job requires persistence in the face of obstacles. Dependability—Job requires being reliable, responsible, and dependable, and fulfilling obligations. Stress Tolerance—Job requires accepting criticism and dealing calmly and effectively with high stress situations. Leadership—Job requires a willingness to lead, take charge, and offer opinions and direction. Self Control—Job requires maintaining composure, keeping emotions in check, controlling anger, and avoiding aggressive behavior,
even in very difficult situations.
Work Values Achievement—Occupations that satisfy this work value are results oriented and allow employees to use their strongest abilities, giving
them a feeling of accomplishment. Corresponding needs are Ability Utilization and Achievement. Independence—Occupations that satisfy this work value allow employs to work on their own and make decisions. Corresponding needs
are Creativity, Responsibility and Autonomy.
Related Occupations 11-3011.00 Administrative Services Managers 11-9111.00 Medical and Health Services Managers 11-9131.00 Postmasters and Mail Superintendents 13-1073.00 Training and Development Specialists
Wages Median Wages (2011) $42.95 hourly, $89,330 annual
Source: Bureau of Labor Statistics, Occupational Employment Statistics Survey.
Figure 4-12 (Continued)
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officer in describing an ex-partner. He wrote, “while on duty, this officer went out of his
assigned duty area, went into a bar, got drunk, and had his gun stolen.”
A critical incident report references actual behavior in a specific situation with no
mention of traits or judgmental inferences. The following is an example of a well-written
critical incident. “I observed an employee looking through the scrap tub. Shortly later, she
came to me stating that someone had thrown a large piece of cast iron piston into the scrap
tub. We salvaged this piston and, a short time later, used this piece to make a pulley for a
very urgently needed job.” The following example does not qualify as a well-written criti- cal incident: “The employee completely lacked initiative in getting the job done. While
there was plenty of opportunity, I couldn’t count on her to deliver.” This incident mentions
a trait (initiative), does not describe either the situation or the employee’s behavior in any
detail, and is judgmental in nature.
The critical incident technique has been used to study a variety of jobs such as those
of airline pilots, air traffic controllers, research scientists, dentists, industrial foremen, life
insurance agents, sales clerks, retail managers, and college professors. One major purpose
of the use of CIT is to develop performance appraisal systems. CIT is also an excellent ap-
proach for the development of customer satisfaction instruments. Customers provide the
examples of effective and ineffective customer service that are then used to develop a stan-
dardized customer service evaluation instrument. Burger King, Office Depot, and Continen-
tal Bank used the critical incident method to develop a performance appraisal instrument
used by “professional customers” to assess compliance with company regulations regarding
customer service. The CIT is also very useful for developing highly detailed selection procedures such as assessment centers or behavioral interviews. Office Depot developed its district manager assessment methods using both MPDQ and critical incident results.
Personality inventories are quite popular now to help make hiring and promotion deci-
sions. Researchers generally agree that personality is important for the prediction of job
performance and most also agree that a useful taxonomy of personality is the Five-Factor Model, which we discuss in Chapter 6. These so-called Big Five personality factors are as follows: (1) neuroticism (or emotional stability); (2) extroversion/introversion; (3) open-
ness to experience; (4) agreeableness/likability; and (5) conscientiousness. As we discuss
in Chapter 6, there is evidence that higher or lower scores on these factors are related to
job performance and that the relative predictive importance of the five factors differs as a
function of the particular job.
It is argued that personality-based job analysis is particularly useful for cross-functional
jobs that cannot be easily described in terms of simple tasks or particular abilities. The
Personality-Related Position Requirements Form (PPRF) is a worker-oriented, job analysis method that assesses the extent to which each of the “Big Five” factors and its
underlying facets is needed or important for a particular job. 22 Subsequent development
resulted in identifying 12 specific sets of items for the underlying facets of each of the
Big Five. In a study of 260 jobs, PPRF data reliably differentiated among jobs. The PPRF
technical report maps the results to a highly regarded Big-Five selection instrument. The
report states that “This hypothesis table is not meant to be definitive, but rather is presented
as a demonstration of how an existing set of personality measures might be mapped onto
the PPRF; we believe that users can make their own informed connections of this type for
their preferred instruments. . . . The PPRF is intended to help in hypothesis developments
but is not a substitute for a user’s professional judgment.”
The method was used to identify the most important factors for the performance of snip-
ers in the Canadian Army (probably besides shooting ability) and then used to construct
a selection battery for this vital position. A recent study showed that an “on-line” training
program could effectively reduce the biases using the PPRF. 23
The Fleishman Job Analysis Survey (F-JAS) is a system for describing jobs and tasks in terms of the abilities, skills, knowledge, and social-interpersonal attributes required
for the job. It is one of the most thoroughly researched of the formal JA methods. The
Personality-Based Job Analysis
Fleishman Job-Analysis Survey (F-JAS)
CIT is excellent for performance appraisal development
Personality-Related Position Requirements Form
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system is based on Fleishman’s Taxonomy of Human Abilities, Fleishman’s taxonomies
of knowledge and social-interpersonal attributes, and a taxonomy of skills. 24 F-JAS is used
to identify characteristics of jobs and tasks that are related to the requirements people need
to perform these jobs and tasks. Thus, the F-JAS method provides a direct link between
job tasks and the characteristics of individuals required to perform these tasks effectively.
The assumption is that tasks and jobs differ in the extent to which each selected attribute
is required for successful performance of the task or job. The F-JAS provides a method
through which an individual’s attribute profile can then be compared with the requirements
of the job identified in the job analysis.
The F-JAS web tool also helps with the identification or development of selection,
training, and evaluation programs. A job analysis can use the attributes identified by the
F-JAS result to select or develop job-related measures. For selection, consultants can link
the F-JAS results with the commercially available tests listed in the “Handbook” that have
been identified as valid measures of these abilities. The F-JAS is fairly easy to use and
provides instant scoring and interpretation at a rather low cost ( http://www.management
researchinstitute.com/f-jas.aspx ).
The Job Compatibility Questionnaire (JCQ) was designed as a work analysis method to be used in the development of personnel selection instruments and intervention strate-
gies. 25 Unlike other work analysis methods, the JCQ gathers information on all aspects
of the work experience that are thought to be related to employee performance, absences,
turnover, and job satisfaction. The underlying assumption of the JCQ is that the greater
the compatibility between a job applicant’s preferences for work characteristics and the
characteristics of a job as perceived by job incumbents, the more likely that the applicant
will stay in the job longer and be more effective. The primary goal of the JCQ methodol-
ogy is to derive perceptions of job characteristics from incumbents’ perspectives and to
develop selection instruments capable of assessing the extent to which job applicants’
preferences are compatible with these perspectives. The selection instrument derived from
the JCQ is designed to predict and ultimately increase the level of employee effectiveness.
In addition, the instrument can be used to redesign jobs to increase group effectiveness and
decrease absences and turnover.
The JCQ is a 200-item instrument that measures job factors that have been shown by
previous research to be related to one or more effectiveness criteria (e.g., performance,
turnover, absenteeism, job satisfaction). Items cover the following job factors: task require-
ments, physical environment, customer characteristics, co-worker characteristics, leader
characteristics, worker compensation preferences, dispositional factors, task variety, job
autonomy, physical demands, and work schedule.
The JCQ is administered to job incumbents, who are asked to indicate the extent to which
each JCQ item is descriptive of the job. Thus, an incumbent is asked to indicate on a five-point
scale how descriptive each item is of his/her job. A sample list of characteristics is presented next.
Working alone all day.
Having different projects that challenge the intellect.
Staying physically active all day.
Working at my own pace.
Being able to choose the order of my work tasks.
Working under the constant threat of danger.
Having to copy or post numerical data all day.
Having to make public speeches.
Working under extreme time pressure.
Having an opportunity to be creative at work.
The average time required to complete the JCQ is 30 minutes and can be reduced by
removing items and factors that clearly do not apply to the job under study. There is also
Job Compatibility Questionnaire (JCQ)
Work analysis with JCQ generates a selection tool
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a provision for adding important characteristics that are not covered on the JCQ such as
those that may characterize organizational culture or climate.
Responses from incumbents on the JCQ are used to derive a selection instrument with
a scoring key. The selection instrument items come directly from the items on the JCQ.
Figure 4-13 provides some sample items that were derived from the JCQ approach to work
analysis. This is part of a 35-item JCQ-based test that was developed for security guard
jobs for one of the largest security guard companies in the world. The items in Figure 4-13
from within each pair with an * are the job characteristics identified as “very descriptive”
of the job for which the test will be used for hiring purposes. The details of this process are
discussed in Chapter 6.
Research indicates that the tests that evolve from the JCQ do a good job in predicting
retention for low-wage jobs such as customer service representatives, theater personnel,
security guards, telephone interviewers, and counter personnel. The JCQ is usually nested
within a comprehensive test that also assesses applicants on their job-related competencies.
The JCQ has not been validated (or used) for higher-level jobs (e.g., managerial) and is not
recommended for such positions.
The JCQ also can be used to identify those characteristics of a particular job that are
most highly correlated with important outcomes such as employee turnover and job perfor-
mance. JCQ results are then used to redesign jobs. For example, at Tenneco Corporation,
responses to the JCQ indicated strong preferences for a pay-for-performance system and
a more stable work schedule. These work characteristics, shown to be related to employee
turnover, were changed at relatively little cost and turnover was reduced by 14 percent,
saving Tenneco over $2 million over 3 years.
A popular application of work analysis today is for job design and redesign efforts. This application reflects an orientation toward either creating or, more often, changing the man-
ner in which work gets done. There is now a strong interest in efficiencies, particularly as
related to new technologies, and with goals related to increasing the quality or quantity of
outputs and reducing costs. Many of these work analyses have focused on redesigning jobs
to take advantage of technology in order to reduce “head count” (and thus costs). While
this “lean production” orientation is evident (and very successful) in manufacturing, there
is now more attention directed at services and getting more done for less.
Job design or redesign almost always requires an understanding of how jobs relate to
one another. The organizational structure is defined as the network of relationships or the connections among the various jobs of an organization. These connections or relationships
should transcend functional areas such as marketing or production and should be defined
From each pair of statements select the one that you consider to be the most undesirable in a job you might have:
1. a. Having frequent face-to-face discussions with people? b. Having to be very punctual at work?*
2. a. Having to make frequent speeches? b. Having to wear a uniform at work?*
3. a. Having to provide information and ideas in writing? b. Having the same routine every day at work?*
4. a. Having constant interactions with customers? b. Spending most of my time at work alone?*
5. a. Having to write a lot of reports? b. Working on a boring job?*
6. a. Dealing with people who complain a lot?* b. Selling a product that is not very good?
7. a. Having to closely monitor the behavior of others?* b. Having to frequently and quickly do math at work?
8. a. Having to work outdoors in hot or cold weather?* b. Having to work indoors with poor ventilation?
Note: * indicates characteristics that are “very descriptive” of the job being tested for.
Figure 4-13 Sample Test Items from the Job Compatibility Questionnaire
Work Analysis for Job Design
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in terms of both vertical (e.g., supervisors and subordinates) and horizontal relationships
(e.g., peer to peer). Work analysis that is directed at improving productivity or efficiencies
requires a thorough understanding of how jobs relate to one another and how critical out-
puts from the various jobs relate to one another as well. This understanding is particularly
critical when the goal of the work analysis is to improve the competitive position of the
organization by decreasing costs or improving the quality of outputs.
One major area related to technology is the use of artificial intelligence and “e- discovery”
software capable of analyzing documents much faster than humans. Programs are now
available that go beyond finding information based on key terms to do searches based
on concepts. For example, in conducting legal research, there is some evidence that such
computerized document analysis is not only much faster and cheaper than using lawyers,
it may also be more accurate in identifying the pertinent information. Says Bill Herr, a
lawyer at a major chemical company, “People get bored, people get headaches. Computers
don’t.” 26 Another example is that many hospitals have created paperless processes because
of great software and “apps” that are available for easy information entry and access to all
pertinent medical information. This change has eliminated the need for medical records de-
partments, copiers, and many other costs while increasing efficiencies and reducing errors.
Nurses and doctors require fairly simple training on the use of the new technology and the
paperless approach appears to be a very effective job design change.
Another somewhat contradictory focus for job redesign is “enriching” jobs so as to
increase employee motivation and job satisfaction. Such enrichment efforts usually entail
providing more meaningful work, greater responsibility, and greater worker autonomy.
There is evidence that the enrichment approach is worthwhile. One review found that work
design had a great impact on worker satisfaction and job performance, explaining an aver-
age of 43 percent of the variability in these outcomes. 27 Managers would do well to focus
on both efficiencies and worker job satisfaction and motivation.
Oftentimes a goal for job design is increased efficiency (e.g, producing more with less)
or improved quality. Here the manager is clearly interested in changing the way in which
the work gets done. Thus while other job analysis methods focus on what is being done on
the job, job design is focused on how work should be organized to foster greater efficien-
cies. The various approaches to job redesign clearly have trade-offs in the sense that the
effort to increase efficiency has the potential to reduce the motivational aspects of a job.
Managers would do well to focus on both efficiencies and worker job satisfaction and mo-
tivation. The result of this two-pronged approach can be motivated and satisfied workers
operating in a highly efficient work environment.
The most well-known and well-researched job enrichment approach is the Job Char- acteristics Model, which uses the Job Diagnostic Survey (JDS) to measure work char- acteristics. 28 The Job Characteristics Model emphasizes enhancing the intrinsic aspects
of an employee’s work to increase satisfaction and performance. The model states that
workers will be more motivated and satisfied, produce better quality work, and have less
absenteeism and turnover to the extent that they experience three psychological states:
(1) they believe their work is meaningful, (2) they have responsibility for the outcomes of their work, and (3) they receive feedback on the results of their work.
There has been much criticism of the JDS and the Job Characteristics Model and the
resultant research. A new and superior instrument is the “Work Design Questionnaire” (WDQ), which expands knowledge of work design. 29 The WDQ has been used to study the
relationship between work design variables and important work outcomes such as job sat-
isfaction and performance outcomes. Figure 4-14 presents the list of the 18 work character-
istics and sample items representing each of the characteristics measured using the WDQ.
Research with the WDQ indicates that the two best predictors of job satisfaction are
autonomy (i.e., the extent to which a job allows freedom, independence, and discretion to
schedule work, make decisions, and choose the methods used to perform tasks) and social
support (the degree to which a job provides opportunities for advice and assistance from
others). Thus, if an organization has an interest in improving job satisfaction, it could work
on expanding job autonomy or improving the social support for the work. However, chang-
ing a job so as to increase autonomy can also increase demands for more compensation and
training, while increasing social support does not have these negative trade-offs. 30
Enriching jobs
Job Diagnostic Survey
Work Design Questionnaire is recommended over the JDS
Predictors of job satisfaction: autonomy and social support
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Figure 4-14 Sample Items from the Work Design Questionnaire
Please respond to each item indicating your level of agreement that each statement describes the job you are analyzing:
1 = Strongly Disagree; 2 = Disagree; 3 = Undecided; 4 = Agree; 5 = Strongly Agree
Task Characteristics Autonomy: Extent to which a job allows freedom, independence,
and discretion to schedule work Work Scheduling Autonomy The job allows me to make my own decisions about how to schedule my work. Decision-Making Autonomy The job gives me a chance to use my personal initiative or judgment in carrying out the work. Work Methods Autonomy The job allows me to make decisions about what methods I use to complete my work.
Task Variety: Degree to which a job requires employees to perform a wide range of tasks
The job involves doing a number of different things.
Task Significance: Degree to which a job influences the lives or work of others
The results of my work are likely to significantly affect the lives of other people.
Task Identity: Degree to which a job involves a whole piece of work, the results of which can be easily identified
The job involves completing a piece of work that has an obvious beginning and end.
Feedback from Job: Degree to which the job provides direct and clear information about the effectiveness of task performance
The work activities themselves provide direct and clear information about the effectiveness (e.g., quality and quantity) of my job performance.
Knowledge Characteristics Reflects the kinds of knowledge, skill, and ability demands that are placed on an individual as a function of what is done on the job.
The job provides the opportunity to learn
Job Complexity : Extent to which the tasks on a job are complex and difficult to perform
The job requires that I only do one task or activity at a time (reverse scored).
Information Processing : Degree to which a job requires attending to and processing data or other information
The job requires me to monitor a great deal of information.
Problem Solving: Degree to which a job requires unique ideas or solutions and reflects the more active cognitive processing requirements of a job
The job involves solving problems that have no obvious correct answer.
Skill Variety: Extent to which a job requires an individual to use a variety of different skills to complete the work
The job requires a variety of skills. Specialization : Extent to which a job involves performing specialized
tasks or possessing specialized knowledge and skill The job is highly specialized in terms of purpose, tasks, or activities.
Social Characteristics Social Support: Social support reflects the degree to which a job
provides opportunities for advice and assistance from others. I have the opportunity to develop close friendships in my job. My supervisor is concerned about the welfare of the people that work for him/her.
Interdependence : Reflects the degree to which the job depends on others and others depend on it to complete the work
Initiated Interdependence : The extent to which work flows from one job to other jobs (initiated interdependence)
The job requires me to accomplish my job before others complete their job.
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Received Interdependence : The extent to which a job is affected by work from other jobs
The job activities are greatly affected by the work of other people.
Interaction Outside Organization : Extent to which the job requires employees to interact and communicate with individuals
external to the organization
The job requires spending a great deal of time with people outside my organization.
Feedback From Others : Degree to which others in the organization provide information about performance
I receive a great deal of information from my manager about my job performance.
Work Context Ergonomics : Degree to which a job allows correct
or appropriate posture and movement
The seating arrangements on the job are adequate (e.g., ample opportunities to sit, comfortable chairs, good postural support).
Physical Demands : Level of physical activity or effort required in the job, focus on the physical strength, endurance,
effort, and activity aspects of the job
The job requires a great deal of muscular endurance.
Work Conditions : The environment within which a job is performed, the presence of health hazards, noise, temperature, and cleanliness
of the working environment
The workplace is free from excessive noise. The job takes place in an environment free from health hazards (e.g., chemicals, fumes, etc.).
Equipment Use : Reflects the variety and complexity of the technology and equipment used in a job
The job involves the use of a variety of different equipment.
Source: Adapted from: F. P. Morgeson and S. E. Humphrey. “The Work Design Questionnaire (WDQ): Developing and Validating a Comprehensive Measure for Assessing Job Design and the Nature of Work,” Journal of Applied Psychology, (2006), 91, pp. 1321–1339.
Figure 4-14 (Continued)
Before closing this section on work and design methods, let’s review how job analyses can
be conducted in situations where jobs don’t already exist, such as when a new small busi-
ness is started or where jobs are changing dramatically as might result from restructuring
or workplace reengineering.
In instances where a job is being created or where an organization is undergoing signifi-
cant strategy evaluation, work analysis takes on a rather predictive bent in that the idea is
to describe a job through the anticipated tasks that need to be performed in order to meet
organizational goals. This approach has been termed strategic job analysis as its purpose is to forecast what a job may be like in a new environment with new strategic goals, new
technologies, increased customer contact, or expanded duties. Briefly, conducting a strate-
gic job analysis involves the following steps: 31
1. If the job currently exists, then a conventional job analysis procedure is used to
describe it in detail. If the job isn’t in existence yet, then subject matter experts
(SMEs) and primary customers of the job’s intended services are brought to-
gether to identify the tasks that constitute the job based on the new strategic plan.
O*NET can be consulted to identify any existing jobs that are similar and can
further inform job design.
2. Incumbents and/or SMEs discuss how changes to the job such as new technology
or increased contact with external customers will change the tasks making up the
job and how the job is performed.
What Is Strategic Job Analysis?
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3. Detailed descriptions of the job’s tasks and the required KASOCs necessary for
successful performance are generated by SMEs and others familiar with the job
and the expected changes.
4. The results of the analysis of the projected job are compared to those of the
current job to identify differences in tasks and KASOCs.
5. The comparison provides information relevant to developing performance
standards, training content, KASOCs for personnel selection, the need for
supervision and management, and the relationship between jobs (internal
customers and suppliers).
The utility of this approach depends on how accurately the SMEs and other participants
anticipate changes in the job or in anticipating what a job created from scratch may be like
when actually performed by someone. This approach requires widespread involvement
from organizational members, often from different functional areas. In addition, when the
job change issue is one of introducing new technology, it may be necessary to involve the
hardware or software manufacturer in the analysis of job changes. While more focused on
tasks, this approach is similar to competency modeling.
Strategic job analysis requires extensive organizational involvement
AUTONOMOUS WORK GROUPS (AWG) OR SELF-MANAGING TEAMS Autonomous work groups (also known as self-managing work teams) are employee groups
given a high degree of decision-making responsibility and behavioral control for complet-
ing their work. 32 Usually, the team is empowered or given the responsibility for producing
(or providing) the entire product or service. A team essentially replaces the boss by taking
over responsibilities for scheduling, hiring, ordering, and firing. AWGs are an example of
a restructuring or job design work analysis.
Procter and Gamble and Corning are examples of major manufacturing facilities with
work teams. At the Procter and Gamble plant in Lima, Ohio, which makes Liquid Tide,
Downy fabric softener, and Biz bleach, teams are responsible for their own safety, produc-
tion targets, quality goals, and improvements in customer service. Team meetings occur at
every shift change, and the teams reorganize themselves as they deem necessary.
AWGs are also catching on in the services sector. Using a service quality audit, manag-
ers and quality-improvement teams at Ritz-Carlton Hotels identify errors and determine
their frequency, assign costs of fixing (or not fixing) the errors, and identify steps to pre-
vent them.
AWGs usually elect an internal leader. Management may appoint an external leader or
coordinator as well. The external leader serves primarily as a facilitator rather than as a
supervisor and, where the organization is converting to AWGs, may facilitate relationships
among AWGs. He or she may assist the group members in receiving feedback on the qual-
ity and quantity of their performance as well as make any structural changes in the team
design. The coordinator is also responsible for helping the team acquire needed resources
(e.g., equipment) and technical assistance.
Self-managing teams may be involved in a number of different activities, including
■ Recording quality control statistics.
■ Making scheduling assignments.
■ Solving technical problems.
■ Setting group or team goals.
■ Resolving internal conflicts.
■ Assessing group or team performance.
■ Making task assignments to group or team members.
AWGs: An example of job design
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■ Preparing a budget.
■ Training team members.
■ Selecting new members.
■ Allocating pay raises for members.
For AWGs or self-managing work teams to be effective, training is critical. Training is
necessary for team members on a variety of human relations skills, such as problem solv-
ing, group dynamics, conflict resolution, cooperation and participation, and technical skills
such as statistical quality control and budget preparation. Training is also necessary for
managers in their new roles as facilitators.
The overall effects of AWGs on productivity have been mixed. 33 It often takes up to 2 years
for some of the positive effects of AWGs to materialize. Managers need to be patient in
expecting results and should guarantee job security to enable employees to feel comfort-
able taking risks and being creative and innovative.
There are many success stories. Based on the way in which the plant was reorga-
nized into only three levels (one plant manager, 10 managers, and about 350 techni-
cians working in teams), the Ohio Procter and Gamble plant was 30 percent more
productive. At Pacific Bell, employees on craft, clerical, and engineering self-managed
teams reported higher productivity and performance and satisfaction with their jobs,
work units, and growth potential as compared to similar traditional work groups. At
Ritz-Carlton, the quality audit found that the most common error at the front desk at
one hotel was not posting late charges on a guest’s bill, which cost the hotel an esti-
mated $250,000 per year.
Employees report that team membership provides them with more autonomy, flexibil-
ity, skill variety, training opportunities, and financial benefits (e.g., group-based bonuses).
It is not surprising then that firms have found that members of AWGs experience higher
job satisfaction and morale and lower levels of turnover.
Suggestions for Using AWGs or Self-Managing Work Teams
The Effectiveness of AWGs or Self- Managing Work Teams
AWGs can lead to higher job satisfaction
RATING SOURCE MATTERS: POTENTIAL BIASES IN WORK ANALYSIS DATA There has been considerable research investigating whether the source of the job infor-
mation influences the results of the data collected. It is clear that the rating source, the
purpose for the data, and the type of ratings that are made will have an impact on results
and the accuracy of information. Figure 4-15 presents a summary of the major findings in
this area.
In general, incumbents tend to inflate the importance of their jobs compared to data from
their supervisors or trained analysts. This effect is particularly potent when incumbents
believe that the job analysis is connected to future compensation adjustments. However,
incumbents may be the best source of information for the assessment of safety-related is-
sues. If possible, customer data should be used, particularly for service-related jobs. When
assessing skill requirements for a job, external job analysis experts who have experience
evaluating a wide variety of jobs are probably the best sources of data. The idiosyncrasies
and characteristics of particular raters clearly affect ratings. For example, Hispanics per-
ceived bilingual language skills as significantly more important than non-Hispanics and
that the Hispanic point of view was more compatible with the view of actual customers.
Bottom line: Since most work analysis methods involve human judgment, the resultant
data are inevitably subject to bias. Get more experts for more reliable assessments of job
specifications and/or competencies and how these factors relate to outputs and strategy
execution. And, if possible, get customers’ and clients’ perspectives, both internal and,
ideally, external.
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Figure 4-15 Potential Sources of Bias for Work Analysis Data-Major Research Findings
Experienced external analysts are the best source for rating skill levels Analysts have the highest reliability and incumbents have the lowest
Incumbents tend to assign more (overall) importance to their jobs than do supervisors or trained analysts. The purpose of data collection matters (e.g., if it's related to compensation, incumbents tend to exaggerate importance. Incumbents and supervisors agree more about the tasks performed but less about the attributes required to perform the job well.
Those who know more about a job tend to make more reliable and accurate judgments. Naive raters do not provide work analysis data equivalent to the information provided by experts at the job.
Incumbents who are more effective at their jobs do not provide different information about their jobs than do low performers. Ratings on the frequency of tasks performed and the importance of tasks performed provided the most reliable data across different types of raters (e.g., incumbents, experts).
Incumbents provide more accurate estimates of time spent on job tasks and assessing safety-related risk factors Supervisors are more accurate in assessing job duty importance.
Expert ratings of job specifications in the form of specific KASOCs are more transportable across organizations. The characteristics of particular raters contributes the most to unreliability in the job analysis ratings.
Hispanic incumbents perceived bilingual language skills as significantly more important than non-Hispanics (the Hispanic point of view was more compatible with the view of actual customers).
Bottom line: Source clearly matters. Involve multiple perspectives and document choices. Get more experts for more reliable assessments of job specifications and/or competencies and how they relate to strategy execution. Involve customers (internal and especially external).
Sources: Morgeson, F. P., & Campion, M. A. (1997). Social and cognitive sources of potential inaccuracy in job analysis. Journal of AppliedPsychology, 82, 627–655; Treiman, D. J., and Hartmann, H. J. (Eds.) (1981). Women, work, and wages: Equal pay for jobs of equal value. Washington, D.C.National Academy Press; Cornelius, E. T. (1988). Practical findings from job analysis research. In S. Gael (Ed.). The job analysis handbook for business, industry,and government , vol. I. NewYork: John Wiley and Sons, pp. 48–68; DeNisi, A. S., Cornelius, E. T., and Blencos, A. G. (1987). Further investigation of common knowledge effects on job analysis ratings. Journal of Applied Psychology, 72, 262–268; Friedman, L., and Harvey, R. J. (1986). Can raters with reduced job descriptive information provide accurate Position Analysis Questionnaire (PAQ) ratings? Personnel Psychology, 39, 779–789; Conley, P. R., and Sackett, P. R. (1987). Effects of using high- versus low-performing job incumbents as sources of job analysis information. Journal of Applied Psychology, 72, 434–437; Dierdorff, E. C., and Wilson, M. A. (2003). A meta-analysis of job analysis reliability. Journal of Applied Psychology, 88, 635–646; Van Iddelinge, C. H., & Putka, D. J. (2005). Modeling error variance in job specification ratings: The influence of rater, job, and organization-level factors. Journal of Applied Psychology, 90, 323–334; Harvey, R. J., & Wilson, M. A. (2000). Yes Virginia, here is an objective reality in job analysis. Journal of Organizational Behavior, 21 , 829–854; Morgeson, F. P., & Campion, M. A. (2000). Accuracy in job analysis: Toward an inference based model. Journal of Organizational Behavior, 21 , 819–827; Pine, D. E. (1995). Assessing the validity of job ratings: An empirical study of false reporting in task inventories. Public Personnel Management, 24 , 451–459.
HOW DO YOU CHOOSE THE BEST WORK ANALYSIS METHOD? A number of studies have examined the relative effectiveness of specific work analysis
methods. For example, one study asked experienced job analysts to indicate the extent to
which four methods accomplished the various purposes for job analysis. 34 In addition, they
were asked to evaluate the amount of training required to use the method, the sample sizes
required for deriving reliable results, and the cost to administer and score the method. The
results indicated that, of the methods evaluated, if the purpose is to generate a job descrip-
tion or to do job classification or job design, a good method is the PAQ. CIT is probably not
as good for job classification purposes. The best method for job evaluation is the PAQ. The
PAQ was also the best method for identifying specific tests to use for hiring. If the purpose of
the analysis is to develop a performance appraisal instrument, detailed and job-related inter-
view questions, or training programs, the recommended method is CIT. No method is ideal in
terms of legal compliance, including ADA compliance. For companies in need of highly de-
tailed information about a job, the development of their own job analysis method is probably
preferable to an “off-the-shelf” type such as the PAQ, which would not give you the level of
detail in describing the job, perhaps a critical issue if you are developing a training program.
Experts agree that organizations should “mine” their own data whenever possible to
determine whether particular job specifications (e.g., a particular level of education or ex-
perience) are related to critical criteria such as job performance. This is particularly true if
job specifications cause adverse impact or if there is a need to determine if a specification
could cause adverse impact.
O*NET has a wealth of information that can be used effectively by organizations to ac-
complish most of the major purposes for which you do work analysis. The job descriptions
you can retrieve from the website are a great start on a number of the work analysis products
discussed in this chapter (if not finished products) and you can even retrieve up-to-date salary
PAQ is best for job evaluation and test identification
Mine data to validate job specifications
CIT is best for performance appraisal development
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information for your particular jobs and geographical areas. And it’s all free! You can also
download detailed questionnaires that can be adapted for whatever purposes you have in mind.
Experts also agree that the choice of work analysis method depends on the purposes to
be served by the data and the desired product. There is no “one best way” to conduct work
analysis. The purposes for the data and the practicality of the various methods for particular
organizations must be considered. The most definitive finding from the research on the rela-
tive effectiveness of the various methods is that multiple methods of analysis should be used
whenever possible. For example, a quantitative approach such as the PAQ should probably
be augmented by a qualitative approach such as the CIT, which can provide more specific
information about jobs than what can typically be derived from the quantitative methods.
Choice of work analysis depends on purpose
Jobs are important to people because they have surplus meaning beyond just providing a
paycheck necessary to sustain their economic survival. People ask a lot of their jobs, as
they become better educated and develop rising expectations about what jobs should sup-
ply. As a result of technology and the flattening of organizational structures, jobs are no
longer the static entities they once were thought to be. Work has become more dynamic
and the lines distinguishing the responsibilities of one job from another continue to blur.
Recent research on job performance has shown that there are some generic dimensions of
work behavior that apply across a broad spectrum of jobs while others that are more task-
based are very specific to a limited set of jobs. Generic work dimensions influence the
performance of virtually any job. 35 Examples are honesty and integrity, goal attendance,
treating co-workers with respect, and maintaining good personal hygiene. The idea of
generic work behaviors opens the possibility for more direct comparisons of employee per-
formance regardless of the specific tasks for which employees are responsible. It also chal-
lenges the traditional idea that jobs and job performance can be neatly compartmentalized.
Yet one of the aims of work analysis is to identify differences between jobs so that
selection tests, levels of compensation, training and development efforts, and performance
standards are demonstrably relevant to job success. An increasing burden on work analysis
today is to describe jobs in sufficient detail so that differences between them are recog-
nized and appropriate criteria for personnel decisions result. At the same time, work analy-
sis should be flexible enough to be applied to the study of jobs as they change in response
to technological demands and the organization of projects and work. A detailed work
analysis product is also considered to be a critical element of any possible outsourcing
effort. Research on successful and unsuccessful outsourcing projects shows that one key
variable is the specificity in the job description and the determination of the key outcomes
from the customer perspective. 36
The once-traditional idea of “the job” is under challenge as more organizations adopt
project-based work assignments. Work analysis remains an essential tool for HR profes-
sionals despite contemporary changes in the world of work and the new “team” orientation
within many companies. There has been much discussion in the popular press about the
“de-jobbing” of organizations. 37 In fact, formal work analysis may be even more significant
in the context of a turbulent work environment and need for a more comprehensive work
analysis. Regardless of the elasticity of the job, projects, and tasks, work analysis should be
a starting point in the design of most HR systems, including restructuring, human resource
planning, reengineering of recruitment strategies, selection processes, training and career
development programs, performance appraisal systems, customer-based appraisal, job de-
sign efforts, compensation plans, and health and safety compliance and improvements.
Even project-based employment requires hiring, training, compensation, and performance
appraisal functions. The need to describe the work a prospective employee or contractor
will perform before hiring still presupposes an inventory of the likely situational demands
and worker competencies required to fulfill this broader mission. Work analysis helps
to ensure that HR systems will be professionally sound. As noted in Chapter 3, HR sys-
tems that involve personnel decisions such as selection, pay, promotion, and terminations
SUMMARY
Work analysis and outsourcing
“De-jobbing”
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should be based on a determination of the important job duties and KASOCs necessary for
successful job performance. Even if the legal mandate did not exist, effective HR practice
dictates the linkage between these HR activities and work analysis.
While many contemporary management gurus preach that job descriptions promote
individualism to the detriment of unit effectiveness, work analysis can facilitate more ef-
fective group and unit effectiveness through clearer definitions of responsibilities and a
determination of the relative importance of tasks and working relationships between posi-
tions and individuals and how all are related to customer requirements. Job descriptions do
not have to say, and they rarely ever say, that the incumbent will perform only those tasks
defined on the description regardless of circumstances. To the extent that job descriptions
foster an “it’s not my job” philosophy of work and a deviation in attention away from cus-
tomer requirements, the gurus are right. The trick is to develop and use work analysis with
customer requirements as the focus.
Although static unchanging jobs may be obsolete, work analysis as a tool for under-
standing and describing work activities will remain an essential HR competency for the
foreseeable future. As the various HR functional areas are covered in the chapters to
follow, more detail will be provided on how work analysis is used to supply internal and
external customers with the most effective HR products.
Work analysis with a customer focus
Discussion Questions 1. What is meant by conducting a work analysis? How might you convince top
managers of the importance of conducting work analysis?
2. Do you believe that having highly detailed job descriptions for every position can
interfere with group effectiveness? If so, is there anything that can be done to
avoid this?
3. For each of the following HR systems, what type of analysis is needed to develop
a professional and legally defensible system?
a. Training program for new employees.
b. Selection system.
c. Performance appraisal system.
d. Compensation system.
e. Job design.
4. Describe the advantages and disadvantages of using interviews, observation, and
questionnaires for collecting work analysis data.
5. How might you involve customers in the development of job descriptions and job
specifications? Are there any constraints on what customers can stipulate in job
specifications?
6. Do PAQ data provide sufficient argument for “job relatedness”? Explain.
7. How would you use O*NET for developing job descriptions and specifications?
8. A fast-growing small business decides to hire a human resources manager for the
first time. What steps should be taken next?
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OVERVIEW Kathryn Connors, a vice president of human resources at Liz Claiborne, described the
ideal role for HR in strategic planning: “Human resources is part of the strategic planning
process. It’s part of policy development, line extension planning and the merger and acqui-
sition process. Little is done in the company that doesn’t involve us in the planning, policy
or finalization stages of any deal.” 1 Unfortunately, as discussed in Chapter 1, the extent of
involvement of human resources in strategic planning as practiced by Liz Claiborne is still
rather unusual. While more companies now link HR planning to strategic planning, the
linkage is usually focused mainly on the reduction of labor costs with limited consideration
of other elements related to HR. 2 The typical practice is for an HRM unit to receive fore-
casting plans to reduce overhead by reducing labor costs. The role of HR is to devise the
HR strategy for implementing the plan. Amazon.com had a more comprehensive approach
to HR planning that involved business forecasting, customer demand, and labor force needs
and options. It laid off 1,800 workers based on a thorough study of projected sales. Another
company with great HR planning processes is Southwest Airlines. While other airlines laid
off people post 9/11, Southwest transferred people, cut overtime, and changed some assign-
ments. Not a single Southwest employee was laid off. This was still true in 2011.
O B J E C T I V E S
After reading this chapter, you should be able to
1. Understand the importance of human resource planning (HRP) to the
organization.
2. Identify the six steps in the HRP process.
3. Explain the methods by which an organization can develop forecasts of
anticipated personnel demand and understand labor markets.
4. Understand how an organization can stay apprised of and evaluate its
personnel supply and, if necessary, implement a downsizing program.
5. Determine which recruitment methods are best for given situations,
including the role of E-recruiting.
6. Understand the pros and cons of internal versus external recruiting.
7. Identify the most important features of recruitment strategy.
8. Understand the legal implications of recruitment and planning.
Human Resource Planning and Recruitment
Chapter
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IBM does systematic HR planning tied to its strategic objectives. Its planning in-
cludes the identification of the skills most likely to be in demand over the next 3 years
(updated yearly). The 2011 “hot” skills list includes expertise in the life sciences, wire-
less networks, digital media databases, and Linux programming. IBM then spends
$400 million a year training its workers in these skills that the company is betting it will
need soon. In terms of competitive advantage in the global economy, however, the “good” news is that most foreign competitors also conduct their HR planning and recruit-
ment in a more reactive manner rather than as a fully integrated system. Particularly, given
the greater HR constraints in reacting to business problems placed on some foreign com-
petitors, especially European, there is opportunity for an HR-based competitive advantage
for U.S. companies.
HR planning (HRP) should be an integral part of competitive strategy. The most effec- tive approach to staffing, whether adding workers or eliminating them, is to assess staffing
needs with a focus on meeting customer requirements and expanding the customer base.
One important element of HR planning today is a consideration of outsourcing to reduce
costs. Outsourcing is the relocation of a business process from one country to another. HR should be much more involved in assessing outsourcing and offshoring options. Says
Jennifer Schramm, manager of workplace trends and forecasting at the Society of Human
Resource Management (SHRM.org), “The participation of HR professionals in offshoring
is necessary from the beginning stages of exploring the idea of offshoring as a viable option
to the implementation stage. . . . HR should be involved in spearheading the country selec-
tion process—investigating the most viable offshore labor force—and then in orchestrating
the recruitment of qualified staff.” 3
The goal for organizations of all sizes is quite simple: Keep the cost of labor as low as
possible while meeting (or exceeding) customer demand and, if this is a part of the strategic
plan, expanding the customer base. The realization of this goal for HR practice is obviously
much more difficult. The goal also can be applied to the internal customers who require
products or services from internal suppliers, including HRM staff. For example, an inter-
nal customer could be a district manager in retail who must hire a store manager for one
of the stores in the district. One option could be to use an external headhunter group that
specializes in retail, or perhaps the company relies on internal recruiters to compile a list of
qualified candidates. Obviously, the company is very interested in the cost of the recruiting
effort and the district manager may be particularly interested in filling the position quickly
with someone who requires little or no training.
Two of the most important aspects of staffing are HRM planning and recruitment. Plan- ning is the forecasting of HR needs in the context of strategic business planning and sales forecasting. The human resource planning process of the past was typically reactive with
business needs defining personnel needs. However, with major changes in the business
environment and increasing uncertainty, many organizations have adopted a longer-term
perspective, integrating human resource planning with strategic business planning centered
on a consideration of core business competencies.
Recruitment is the process of attracting applicants for the positions needed. As dis- cussed in Chapter 1, recruiting Generation “Y” employees or the so-called Millennials
poses some special planning and recruiting problems and opportunities for employers.
Clearly, employers must do a little more than put ads in the paper these days to attract top
talent.
This process should be fully integrated with the HR planning process and other HR ac- tivities, especially the selection process. Recruitment and other HRM activities are interde-
pendent. For example, a change in a compensation or benefit package can have a profound
effect on recruitment and retention. In a debate over a new GI education bill for returning
vets, the Congressional Budget Office (CBO) projected that the better benefits offered in
the legislation would decrease reenlistments by 16 percent. At a time when the ability of
the army to recruit and retain good soldiers during wartime was hindered, a 16 percent
reduction in “re-ups” would be a serious problem. But the CBO also predicted that the new
benefit would increase the number of new recruits by 16 percent. The program could be a
strong positive if the motivation to not re-up was offset by more incentives to reenlist. HR
planning and recruitment should be carefully integrated.
IBM’s “hot skills list”
Early HR involvement in outsourcing is critical
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Here a data-driven approach to HR practices is very important. One retailer was con-
sidering the adoption of a mediation and mandatory arbitration policy as a condition for
employment for all employees. However, HR was very concerned that the imposition of
such a policy would hinder the company’s ability to attract and hire its most desirable job
candidates. The company conducted a controlled study across its four regions and deter-
mined that, when presented in a certain manner, requiring job candidates to agree to an
arbitration policy had no negative effects of recruiting or hiring. 4
This chapter provides an overview of the planning and recruitment process. The rela-
tionships among the various HR functions are discussed as are the process of downsizing
and reengineering or restructuring, the various sources available for recruiting and their
relative effectiveness, the advantages and disadvantages of internal and external recruit-
ing, and the role of equal employment opportunity law and regulations in the planning and
recruitment process.
EFFECTIVE HUMAN RESOURCE PLANNING Organizations that integrate strategy with HR planning and recruitment have an HR
competitive advantage. Recruitment planning should flow directly from HR planning.
Figure 5-1 presents a model of this relationship. Effective HRP closes the gap from the
current situation to a desired state of affairs in the context of the organization’s strategy.
Legal Environment • Federal laws • State laws • Executive orders
EXTERNAL FACTORS INTERNAL FACTORS
Strategic Business Planning • Corporate philosophy • Environmental scan • Assessment of organizational strengths and weaknesses • Development of strategic business objectives
Human Resource Planning • Projected staffing needs Number of openings Types of jobs Time frame for filling openings • Projected staff availability • Reconciliation of forecasted needs and availability • Formulation of action plans Recruitment of new employees Layoffs, retirement incentives Retraining, transfers Increased productivity
Operational Planning • Specific plans for growth, acquisition, diversification, and/or divestiture
Recruitment Planning
Business Environment • Degree of competition • Speed of technological change
Labor Markets • Availability of skilled and unskilled personnel
Figure 5-1 Simplified Model of External and Internal Factors That Influence Recruitment
Source: “Simplified Model of External and Internal Factors That Influence Recruitment.” Adapted from Employee Recruitment: Science and Practice by James Breaugh. Reprinted by permission of the author. C
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The process for determining this match is outlined in Figure 5-2 . Effective HRP should in-
volve (1) environmental scanning, (2) labor analysis, (3) supply analysis, (4) gap analysis,
(5) action programming, and (6) evaluation. We examine each of these next.
Environmental scanning helps HR planners identify and anticipate sources of problems, threats, and opportunities that should drive the organization’s strategic planning. Scanning
provides a better understanding of the context in which HR decisions are/will be made.
Both external and internal environmental scans are critical for effective planning. Envi-
ronmental scans should be very data driven. As discussed in Chapter 1, more data-driven
decisions from an environmental scan are more likely to improve productivity than a reli-
ance on managerial intuition or experience. 5 These data-driven approaches include the use
of analytical software that are instrumental for optimal HR planning. One example of this
approach is Walmart’s use of data for optimal scheduling of personnel. Walmart compiles
and uses its historical store data to make very accurate predictions regarding specific em-
ployee needs for its stores by the hour and day. This labor scheduling software facilitates
an efficient use of personnel. 6
While there can be (and often are) situations with ambiguous problems, threats, and
opportunities, the probability of reducing or eliminating the ambiguity is increased by a
more thorough environmental scan. The idea here is to at least attempt to turn a threat into
an opportunity with information. In general, the greater the amount of relevant information
that managers have about a problem, the more likely that problem can be turned into an op-
portunity. Both external and internal environmental scans are critical for this information.
Amazon is a good example here. Amazon closed a large and costly customer service center
in Seattle despite projections of 20 to 30 percent sales growth because its study of global
labor options indicated that it could meet its sales growth projections with a far less costly
customer service center in India. Numerous other companies have turned to offshoring
and outsourcing to save money. However, some U.S. and foreign companies have actu-
ally moved back to or set up operations in the United States. Recent (2011) economic data
indicate a small turnaround in U.S. manufacturing trade. While the overall U.S. economy
grew only 1.9 percent in the first quarter of 2011, manufacturing grew more than 9 percent.
Volkswagen opened a new plant in Chattanooga, Tennessee, in 2011. Rising wages in
China and falling wages in the United States have helped with the recent uptick in manufac-
turing. For the first time in over 10 years, the United States is creating more manufacturing
jobs than losing them.
A clear (but somewhat sad) example of poor environmental scanning may be Levi-
Strauss. For too many years, Levi-Strauss manufactured its jeans in the United States at a
huge labor cost disadvantage to all of its major competitors. Levi-Strauss finally closed all
U.S. plants in 2003 after a long struggle and estimated that it lost over $20 million in its
earnest effort to retain U.S. employees. Now this iconic company is in a much more favor-
able competitive position to compete on price.
Environmental scanning pursued for the purposes of HR planning should not lose sight
of the fact that the frame of reference for such scanning should always be on strategic goals
with a customer focus. A large law firm in Atlanta was losing young associates, many of
Figure 5-2 Steps for Effective HR Planning
1. Environmental scanning. Identify and anticipate sources of threats and opportunities, scanning the external environment (competitors, laws regulation) and internal environment (strategy, technology, culture).
2. Labor demand forecast. Project how business needs will affect HR needs, using qualitative methods (e.g., Delphi, nominal) and quantitative methods (trend analysis, simple and multiple linear regression analysis).
3. Labor supply forecast. Project resource availability from internal and external sources. 4. Gap analysis. Reconcile the forecast of labor supply and demand. 5. Action programming. Implement the recommended solution from step 4. 6. Control and evaluation. Monitor the effects of the HRP by defining and measuring critical criteria (e.g., turnover costs, break-even
costs of new hires, recruitment costs, performance outcomes).
Step One: Environmental Scanning
Scanning frame of reference on strategic goals with customer focus
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whom in exit interviews complained about “burnout” and conflicts with partners and more
senior associates. The turnover rate spiked coincidentally with the loss of two major clients
and almost 400 billable hours a week. While the loss of the associates was obviously im-
portant, the customer/client problem was more important. It turned out that the two were
related in that partners were sending more work to associates. The clients were increasingly
unhappy with work products, and were then complaining, before finally firing the law firm
altogether. Another law firm noted the higher turnover among female associates and the in-
creasing proportion of females the firm was recruiting from top law schools. The firm con-
ducted exit interviews, gathered information, and set a goal to be a leading firm for female
attorneys. It installed many profamily programs such as 90 days of paid maternity leave,
coverage of fertility treatments, and concierge services. The firm, Alston and Bird, is now
a perennial Fortune “Best company to work for” and a top-ranked best company for work-
ing moms. Most importantly, the firm now claims one of the lowest turnover rates among
associates and reports improved recruiting success since implementation of the programs.
For any HR problem, an environmental scan should always keep the “big picture”
in mind. While the “big picture” will mean different things to different organizations,
the focus is on meeting or exceeding customer or client requirements and expanding the
customer base. The environmental scan should never lose this focus. If customers have
expressed concerns about some aspect of a product or service, what specifically are the
customer complaints? Can we fix a systemic problem that may be causing customer prob-
lems, problems that may ultimately translate into an HR problem such as a need for more
employees to hear and attempt to respond to these complaints. Reducing customer com-
plaints may take care of the HR problem or sharply reduce it.
Any environmental scan must be done in the context of the legal environment. Amazon
closed its Seattle service center in compliance with the Worker Adjustment and Retrain- ing Notification Act (WARN). WARN provides protection to workers, their families, and communities by requiring employers to give at least 60 days advance notice of covered
plant closings and covered mass layoffs. Employers are covered by WARN requirements
if they have 100 or more full-time employees. Federal, state, and local government enti-
ties that provide public services are not covered by WARN. Employees who are entitled
to notice under WARN include hourly and salaried workers as well as managerial and
supervisory employees. Enforcement of the WARN requirements is through the United
States federal district courts. Workers’ representatives of employees and units of local
government may bring individual or class-action suits. WARN lawsuits were up in both
2009 and 2010. 7 A covered employer must give notice if an employment site will be shut
down and the shutdown will result in the loss of employment for 50 or more employees
during any 30-day period. A covered employer must also give notice if there is to be a mass
layoff (that does not result in a plant closing) that will result in an employment loss at the
site during any 30-day period for: (a) 500 or more employees, or (b) 50 to 499 employees
if they make up at least 33 percent of the employer’s active workforce.
One critical component of environmental scanning for HR planning and recruitment is
an understanding of the relevant labor market. Labor market conditions influence HR
planning in terms of both the number and types of available employees. In a loose labor market, qualified recruits are abundant. This has been the case for most jobs in the United States since 2008. However, some labor markets are tight. For example, there are shortages
in numerous cutting-edge technologies such as optics and laser technology as well as short-
ages in unskilled labor areas such as child care and nursing home assistance. Tight markets
limit the availability of labor, drive up the costs for those employees who are selected, and
even limit the extent to which the organization can be selective in its hiring procedures.
A great deal of the innovation out of Silicon Valley derives from engineers leaving com-
panies to join “start-ups” or to start their own company. From 2005 to 2010 Google had
grown to over 23,000 employees from 5,000 and to $23.7 billion in revenue (from $3.2
billion). Google constantly worries that it will lose top talent and thus the next big idea.
Now Google is perceived by some as too big and bureaucratic. 8
Keep the “big picture” in mind
The Worker Adjustment and Retraining Notification Act (WARN)
Understanding the Labor Market for HR Planning
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Google has employed interesting approaches to attracting some of its top talent. On
California’s Highway 101 in 2004, Google paid for a billboard in Silicon Valley that asked
interested parties to find the first 10-digit prime number occurring in consecutive digits
(i.e., the decimal expansion) of the mathematical constant known as e , which is a transcen- dental number whose first few digits are 2.7182818284 . . . . Of course the billboard led to
coverage on NPR, The Boston Globe , and the Oakland Tribune and widespread notice on the Internet. It also posted the Google Labs Aptitude Test (GLAT) and asked readers of
many computer technology magazines to mail in their answers. Google would then follow
up with a recruiting pitch. Says Judy Gilbert, staffing programs director at Google, “It was
a great PR move, and we got a lot of interest from it.” Here are a few of the questions from
the GLAT (go to http://www.thegooglestory.com/glatpage1.html for answers to these and
all of the questions):
1. Solve this cryptic equation, realizing of course that values for M and E could be interchanged. No leading zeroes are allowed.
WWWDOT − GOOGLE = DOTCOM
2. Write a haiku describing possible methods for predicting search traffic seasonality.
3. Given a triangle ABC, how would you use only a compass and straightedge to
find a point P such that triangles ABP, ACP, and BCP have equal perimeters?
(Assume that ABC is constructed so that a solution does exist.)
This is a great time for entrepreneurial software engineers. A new and rather expensive
approach to recruiting has been labeled “acqhiring.” Google, Facebook, and Zynga are
among the companies now hiring top talent by buying “start-ups” to acquire the engineers
who work there. 9 The relevant labor market for an employer is defined by occupation,
geography, and employer competition. Obviously, the job and the skills or job specifica-
tions play the greatest role in the definition of the relevant labor market and the ease (or
difficulty) with which positions can be filled. The labor market is affected by geography
but, because of technology, not nearly as much as in the past. Outsourcing and offshoring are having a significant impact on the definition of a labor market. Competing employers
are the third factor defining the labor market. The number and type of employers seeking
similarly qualified personnel or offering similar compensation in the same location also
can serve to define the labor market. Google and Facebook are now rivals. They compete
for the same rare talent and try hard to recruit employees directly from their rivals.
The technological and communications revolution has truly changed the relationship
between geography and labor supply. Thomas L. Friedman and Michael Mandelbaum,
authors of “That Used to Be Us” emphasize the profound effects of globalization and in-
formation technology on the available labor supply and the impact on the American work
force. 10 As discussed in Chapter 2, an international division of labor has emerged. The out-
sourcing of the manufacturing/assembly process to a foreign location is now commonplace
in most industries although there is some indication that the cost of shipping and other vari-
ables may have reversed this trend. Since 1960, manufacturing is down from 32 percent of
the U.S. work force to about 9 percent. As of 2011, there were over 3.5 million fewer U.S.
manufacturing workers than there had been in 2000. Some experts are now predicting a
small U.S. “manufacturing renaissance” with companies like Caterpillar returning to U.S.
production and companies from other countries moving production to the United States.
Volkswagen recently opened a plant in Chattanooga, Tennessee with 2,000 new jobs.
The chances are also much greater now that the customer service representative you
speak with over the phone or who processes your Internet order is sitting a long way from
U.S. soil. According the National Association of Software and Service Companies in India,
customer service business is expected to increase to 240,000 employees and over $5 billion
by 2012. One call center in Bangalore, 247customer.com, founded in 2000, includes sev-
eral Fortune 500 companies and a major telecommunications company. General Electric
and British Airways have large phone banks in India and are expanding this function be-
cause of the low cost and low turnover of personnel and the quality of the work. As of 2011,
entry-level customer service representatives in India earn between $4,200 and $5,200 per
“Acqhiring”
The Global Labor Market/ Offshoring
The world is the labor market for many jobs
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year, a good salary by India’s standards, which probably explains the low turnover. The to-
tal savings estimates for U.S. companies for this critical work is between 20 and 35 percent.
What also is becoming more common is that skilled labor is being “offshored” to lower-paid, overseas workers as well. Companies are now offshoring a wide range of service functions,
including IT, payroll, finance and accounting, and logistics. Dallas-based software company
I2 Technologies runs software centers in Bombay and Bangalore. Programming costs are
estimated to be about one-third of the cost of an American programmer. However, this differ-
ence could change rapidly as the demand for Indian programmers grows. The consulting firm
McKinsey and Company reports that by 2012, new jobs in accounting, software development,
and transcribing will have generated one million new jobs and $19 billion in revenue for India.
India is by no means the only attractive offshoring destination. Figure 5-3 presents
the results of a 2011 study conducted by A. T. Kearney that derived an index of the most
attractive countries for offshoring based on financial attractiveness, the business environ-
ment, and each country’s “people and skills availability.” 11
Technology has made workers from all over the world accessible and has expanded the
labor market for U.S. companies. The result is lower labor costs for American companies
and (usually) greater profits; the shipment of more American jobs overseas; and the contin-
ued stagnation of middle-class wages in this country. Rick Younts, executive vice president
for international operations at Motorola, claims more than lower wages as the reason Motor-
ola hires Asian programmers. U.S.-based programmers can work on a project during the day
and then e-mail their work to Asian counterparts who can work on it while the U.S.-based
programmers are sleeping. Younts estimates a 40 percent reduction in time to completion
because of this work schedule. Companies that do not take advantage of the global labor
market for labor will be at a competitive disadvantage as long as consumers do not place a
heavy weight on the extent to which a product or service involves American workers.
One of the leading worldwide outsourcing firms is California-based Elance, which
charges a fee for vendors to compete on “Requests for Proposals” submitted through its
India is the most attractive offshoring destination
Rank Country Financial attractiveness
People skills and availability
Business environment Total score
1 India 3.1 2.8 1.1 7.0
2 China 2.9 2.6 1.3 6.5
3 Malaysia 2.8 1.4 1.3 6.0
4 Egypt 3.1 1.4 1.4 5.8
5 Indonesia 3.2 1.5 1.0 5.8
6 Mexico 2.7 1.6 1.4 5.7
7 Thailand 3.0 1.4 1.3 5.7
8 Vietnam 3.3 1.2 1.2 5.7
9 Philippines 3.2 1.3 1.2 5.7
10 Chile 2.4 1.3 1.8 5.5
11 Estonia 2.3 1.0 2.2 5.5
12 Brazil 2.0 2.1 1.6 5.5
13 Latvia 2.5 0.9 2.0 5.5
14 Lithuania 2.5 0.9 2.1 5.4
15 United Arab Emirates 2.4 0.9 2.1 5.4
16 United Kingdom (Tier 2) 0.9 2.9 2.2 5.4
17 Bulgaria 2.8 0.9 1.7 5.4
18 United States (Tier 2) 0.5 2.9 2.0 5.3
19 Costa Rica 2.8 0.9 1.8 5.3
20 Russia 2.5 1.8 1.1 5.3
Figure 5-3 India, China, and Malaysia once again lead the Global Services Location Index™
Elance: Outsourcing model
Offshoring skilled labor
Note: The weight distribution for the three categories is 40:30:30. Financial attractiveness is rated on scale of 0 to 4, and the categories for people, skills & availability, and business environment are on a scale of 0 to 3. Source: Composite Offshoring “Attractiveness” Scores by Country. Copyright AT Kearney (2005). All rights reserved. Reprinted with permission of the author.
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website. Elance claims that over 60,000 registered and qualified professionals in more than
150 categories of work (e.g., software design, writing, website design, sales and marketing,
management and finance, training and development, legal) are ready to bid on a project
proposal, which is submitted to www.Elance.com . With bids, you also receive credentials,
work samples, and a performance assessment on previous projects. Elance claims that
companies have saved “over 60%” by outsourcing their projects through Elance. The ser-
vice is free to outsourcing organizations (and individuals).
U.S. companies are now outsourcing their legal work offshore. The leading firm in this
area is Michigan-based Lexadigm Solutions that offers legal research conducted by Indian
lawyers at substantially lower fees (see www.lexadigm.com ). The Lexadigm website states
that “by hiring India-based attorneys, we are able to take advantage of the large wage dis-
parity between Indian attorneys and their U.S. counterparts, and our rates reflect this cost
advantage. We are also able to be extremely selective in our hiring practices. Each of our
India-based Research Specialists has graduated from one of the top five law schools in India,
practiced law for at least three years, received extensive legal training from U.S. attorneys,
and passed Lexadigm’s rigorous legal research and writing exam. In addition, a large per-
centage of our India-based attorneys have legal degrees from reputable U.S. law schools.”
One of the fastest growing areas for outsourcing is in HR. HR outsourcing (or HROs) involves contracting certain HR activities to an external supplier. There are different approaches
to this form of outsourcing. The fastest growing approach is business process outsourcing which
involves the supplier managing specific HR activities such as payroll or recruitment. Other areas
that are often outsourced include training and development, staff relocation, and employee data
management. Shared service outsourcing concerns only the administrative aspects of an HR
activity. While these approaches to HR can be cost effective, among the potential problems are
the loss of some control and the possible negative effects on the employer/employee relation-
ship. In addition to cost savings, an important advantage is that HR professionals will probably
have more time to devote to more strategic issues related to HR and organizational effectiveness.
A great (and growing) amount of HR outsourcing is now offshored. As one example, Accenture,
one of the largest of the HRO suppliers, provides HR services for 200,000 Unilever employees
in 20 languages with service centers around the globe, including Bangalore and Prague. Hewitt
Associates provides HR services for 100,000 British Petroleum (BP) employees working with
Hewitt staff in 80 countries. Among the many remote locations, Hewitt staff working on BP HR
matters is in Scotland and Texas. Hewitt claims that BP saves 20 percent on HR costs. 12
Since labor can constitute as much as 80 percent of operating expenses, and since most
businesses compete at least partly on a price/cost basis, managing the labor market and the
cost of labor is a crucial HR activity (the great increase in the proportion of adjunct profes-
sors at most universities is a good example of this). Companies usually look at labor first
when their corporate performance measures do not meet expectations. Recall the discus-
sion in Chapter 1 about the need to be flexible in this dynamic and more global economy.
Compared to European countries, flexibility regarding labor reductions and cost cutting is
relatively common in the United States. American companies certainly have a competitive
advantage over European countries as they compete on price.
The trend line for offshoring American jobs is clearly up and for a growing number of
professional service jobs as well. These jobs include high-level financial analyst positions.
Some experts predict that the greatest growth in offshoring will be for services requiring
higher skill levels.
IBM went from 9,000 software engineers to over 45,000 between 2003 and 2010 in
India. Numerous other companies have greatly expanded their skilled offshoring employ-
ment in India in recent years. Offshoring has the potential to lower labor costs, increase a
firm’s ability to adapt to a more globally integrated economy, and increase the talent pool.
The potential for more offshoring is great. The least offshorable and fastest-growing U.S.
jobs actually require less education and pay lower compensation. One study indicates that
approximately 38 million American jobs are offshorable while 55 million are not. 13 An-
other estimate put the figure at about 25 percent offshorable. 14
Of course, there should be more to outsourcing than saving on labor costs. One study by
DiamondCluster International, a global management consulting firm, found that 51 percent of
U.S. buyers of outsourcing services are dissatisfied with the service providers and terminating
Lexadigm Solutions: Outsourcing legal work
Business Process Outsourcing
The potential for more offshoring is great
51% of outsourcing contracts are terminated early
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contracts early. “The blame cannot be heaped solely on the shoulders of providers,” said Tom
Weakland, who heads up an outsourcing advisory consulting practice. “Many buyers are now
several years into at least one outsourcing relationship, but they still lack effective measures
to gauge the success of their outsourcing initiatives, which are critical for knowing and get-
ting what you want.” Many companies report that because of quality problems, “companies
are learning that the tremendous cost-savings outsourcers have been promising are actually
difficult to achieve. And they are learning more about the cost of losing good people and the
value of their institutional knowledge.” Outsourcing buyers report that the greatest risks of
outsourcing include the increased complexity of managing relationships, reduced operational
effectiveness, and lower quality of output from their outsourcing providers. 15
As discussed in Chapter 3, government regulations also influence HR planning and must be considered in any environmental scan. Equal employment opportunity legislation such as Title
VII of the Civil Rights Act, the 1991 Civil Rights Act, the Age Discrimination in Employ-
ment Act, the 1990 Americans with Disabilities Act, and Executive Order 11246 require that
companies pay close attention to the manner in which they treat protected class individuals.
Executive Order 11246 requires federal contractors and subcontractors to take affirma- tive action to ensure that all individuals have an equal opportunity for employment, with-
out regard to race, color, religion, sex, national origin, disability, or status as a Vietnam
era or special disabled veteran. Through the Office of Contract Compliance (OFCCP), 11246 requires a contractor, as a condition of having a federal contract, to engage in a
self-analysis for the purpose of discovering any barriers to equal employment opportunity.
The United States Office of Contract Compliance’s Revised Order #4 (see www
. OFCCP.gov ) describes affirmative action activities and several actions an employer may
take to “improve recruitment and increase the flow of minority or female applicants.” One
recommendation is to contact sources such as the Urban League, the Job Corp, and col-
leges with high minority enrollment. For example, many U.S. corporations actively recruit
at Florida A&M in Tallahassee, Florida, a predominantly African American university
with an excellent business school.
Section 706(G) of the Civil Rights Act allows a judge to order an affirmative action program as part of a settlement or if the employer is found guilty of intentional discrimina-
tion (the judge overseeing the Abercrombie and Fitch settlement used this order to craft the
out-of-court settlement; A&F continues on this court-imposed and court-monitored affirma-
tive action program). Let’s return to this issue since diversity goals are an important part of
HR planning and recruitment for most large U.S. corporations and government in general.
Hiring to promote a diverse workforce will probably remain a complicated issue be-
cause of the confusing state of the EEO case law, particularly in situations in which orga-
nizations embark on some form of preferential treatment as a part of a voluntary diversity
or affirmative action program. The most contentious situation is one in which the employer
shows some form of preferential treatment toward members of one group when there is no
proven history of discrimination, and no court-ordered requirement. What organizations
can and cannot do under a voluntary affirmative action or diversity program is unclear.
The ambiguity and potential illegality seem to occur when preferential treatment is
shown toward members of groups by placing at least some weight on a job candidate’s
gender or ethnicity. The controversy lies in whether such a characteristic should ever be
considered and, if so, to what extent. The safest strategy for an organization today is to
meet diversity goals by increasing the recruitment effort to attract women and minorities
and, once the pool of candidates is established, ignore the gender or ethnicity of members
of the pool and concentrate on only the job-related credentials of the candidates. The issue
of diversity and affirmative action also comes up when companies are downsizing.
Out-of-court settlements with Abercrombie and Fitch, Texaco, Coca-Cola, Home De-
pot, and Office Depot have included provisions where managers would be accountable
for meeting diversity goals. Yet these goals can be problematic when companies entertain
downsizing options and consider maintaining the diversity goals they had attained when
they conceptualized the downsizing steps. This was clearly illustrated in a settled and
expensive age discrimination and Title VII lawsuit against the Ford Motor Company. The
plaintiffs maintained that preferences were shown to women and minorities during the
Affirmative Action/ Diversity Programs and the Law: A Problem, Threat, or Opportunity?
Diversity goals and preferential treatment
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downsizing. There are also many rules and regulations that affect hiring for government
agencies. For example, civil service rules for most governments, the federal government
included, prohibit the consideration of political affiliation for civil service appointments.
Despite the legal confusion regarding EEO, organizations are continuing their efforts to
promote diversity in their workforces. Walt Disney, for example, has minority hiring tar-
gets “at every level,” according to Marc Pacala, Disney’s general manager. Kentucky Fried
Chicken maintains separate lists of minority candidates for its executive positions. Xerox
continues with its “balanced workforce” program, which has measurable diversity hiring
goals for all levels of management. Many companies hold managers responsible (and pays
them) for meeting “diversity” goals.
Despite the legal controversy, one survey found that 70 percent of Fortune 500 compa-
nies engage in hiring where they consider the race of the applicant while only 14 percent
said they hired by merit alone. 16 The diversity issue is here to stay. Figure 5-4 presents
some data and projections that illustrate trends in the U.S. workforce and U.S. businesses.
Figure 5-5 presents a summary of research and implications for diversity initiatives.
Specific recommendations are made to make diversity programs more effective.
Figure 5-4 The Growing Diversity of the U.S. Workforce and U.S. Work
• The fastest-growing labor force age group is 55 and older. • Workers aged 25–34 will decline by over 3 million by 2016. • As of 2009, over 50 percent of the U.S. workforce consisted of women, nonwhites, ethnic
minorities, and immigrants. • Women will constitute 47 percent of the labor force by 2016. • Hispanics as a percentage of the U.S. workforce will be 16 percent by 2016 (estimated to be almost
27 million by 2016). • African-Americans as a percentage of the U.S. workforce will hold steady at 12 percent by 2016. • Asians, Native Americans, Alaska Natives, and Pacific Islanders will constitute 5.3 percent of the
U.S. workforce by 2016. • As of 2011, women held 15% of senior management positions in the U.S. • As of 2007, Hispanics owned 2.3 million U.S. businesses (up 44 percent from 2002). • As of 2007, women owned 7.8 million U.S. businesses (up 20 percent from 2002). • As of 2007, blacks owned 1.9 million U.S. businesses (up 60 percent from 2002). • Service jobs will constitute 88 percent of U.S. jobs by 2016.
Source: U.S. Bureau of Labor Statistics, “Employment Projections, 1996–2016.”
Figure 5-5 Research and Implications for Diversity
Gaps between Diversity Rhetoric and Research 1. Increased diversity does not necessarily improve the talent pool. 2. Increased diversity does not necessarily build commitment, improve motivation, or reduce
conflict. 3. Increased group-level diversity does not necessarily lead to improved performance. 4. Increased diversity does not necessarily improve organizational performance.
Implications of Research and Theory 1. Benefits of diversity are contingent on the situation. 2. Successful diversity programs are based on meeting specific goals. 3. Diversity initiatives should be framed as strengths and opportunities with individual merit
emphasized over numerical measures. 4. Diversity programs are more likely to be successful when employees identify with their work
teams and organizations rather than with whichever diverse social groups they are drawn from.
Actions Organizations Can Take to Manage Diversity Effectively 1. Build senior management commitment and accountability. 2. Conduct a thorough needs assessment of people, jobs, and the organization. 3. Develop a well-defined diversity strategy tied to business results. 4. Emphasize team building and group-process training. 5. Establish metrics and evaluate the effectiveness of diversity initiatives.
Source: Adapted from M. E. A. Jayne and R. L. Dipboye, “Leveraging Diversity to Improve Business Performance: Research Findings and Recommendations for Organizations,” Human Resource Management, 43 (2004), pp. 409–424.
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Employee workforce audits, also known as workforce utilization reviews , are im- portant for determining potential legal problems with the flow of employees through an
organization. Organizations with a history of growing and promoting their own managers
can be particularly vulnerable to legal challenges if the proportion of a protected class of
employees at one level is significantly different than the proportion at a higher level. While
such a statistical finding does not constitute illegality, it could be interpreted as a “red flag”
and a precursor to legal or regulatory trouble down the road.
A forecast of labor demand derives from a projection of how business needs will affect
HR. Each of the environmental forces discussed earlier is likely to exert pressure on HR
demand—both in terms of the number and the types of employees required as well as the
number and types of jobs utilized. The HR planner must anticipate these needs, add focus
to an otherwise confusing array of possibilities, and set priorities for conflicting goals.
Labor demand forecasting methods fall into two categories: qualitative and quantitative.
As each category embraces certain assumptions, a combination of the two is preferred.
Figure 5-6 presents a summary of the most common methods.
The simplest method for projecting labor demand is a centralized, “top-down” approach in which the HR department examines the current business situation and determines staff-
ing requirements for the rest of the firm. While this approach is simple, it can be inaccurate.
A top-down approach assumes that the central HR office has an accurate understanding of
the business as well as the needs of each unit or function. In large complex firms, these
assumptions typically do not hold. A more preferred method involves a decentralized process wherein each unit or functional manager subjectively derives his/her own staffing
needs. These projections are aggregated to create an overall composite forecast for the
company.
At jet engine maker Pratt & Whitney, for example, top management set a goal of
30 percent cost reduction for each functional unit after a study of competitors’ overhead.
Unit managers were asked to conduct job analysis of each job under their jurisdiction
and, after analysis, to submit proposals for workload reduction and other cost-reduction
options. A procedure was established to present the various reduction options, including
a method for the presentation of a rationale if the manager failed to make the 30 percent
target reduction.
Figure 5-6 Advantages and Disadvantages of Labor Demand Forecasting Methods
Method Advantages Disadvantages
QUALITATIVE
Delphi • Experts go through several rounds of estimates
• No face-to-face meetings
• More futuristic • Incorporates future plans
• May ignore data • Subjective • Time consuming
Nominal • Face-to-face discussion • Group exchanges facilitate plans
• May ignore data • Subjective
QUANTITATIVE
Markov • Incorporates past data for time period
• Data-driven • Need adequate historical data
Regression • Regress staffing needs onto key variables
• Data-driven • Actuarial • Learning curve
• Large and representative sample needed
• Difficult to understand
Trend analysis • Required staffing matched to desired outcomes
• Futuristic • Actuarial • Use business
• Many assumptions • Required factors
Step Two: Labor Demand Forecast
Qualitative Methods
Centralized is “top-down” approach
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Other firms have experimented with formalized problem-solving methods such as the
Delphi technique to minimize interpersonal and jurisdictional conflicts. The Delphi tech- nique avoids face-to-face group discussion by the use of an intermediary. Experts take
turns at presenting a forecast statement and assumptions. The intermediary passes on the
forecasts and assumptions to the others. Revisions are then made independently and anony-
mously by the experts. The intermediary then pools and summarizes the judgments and
gives them to the experts. This process is continued until a consensus forecast emerges
or until the intermediary concludes that more than one perspective must be presented. In
comparison with linear regression analysis (discussed later), the Delphi technique has been
shown to produce better 1-year forecasts, but there can be difficulties in reaching consen-
sus on complex problems. 17
The full Delphi process can take considerable time. For example, The Gap, a clothing
retailer, took over 4 months to forecast the number of buyers needed for the next year us-
ing a Delphi method. The use of networked computers can do much to reduce the time for
Delphi forecasting.
The nominal group technique is similar to the Delphi method. However, experts join at a conference table and independently list their ideas in writing. The experts then share
their ideas with the group in turn. As the ideas are presented, a master list of the ideas is
compiled so that everyone can refer back to them. The ideas are discussed and ranked by
member vote. 18
Quantitative methods are based on the assumption that the future is an extrapolation from
the past. Trend analysis incorporates certain business factors (e.g., units produced, rev- enues) and a productivity ratio (e.g., employees per unit produced). For example, Pratt &
Whitney calculated 16 jet engines per factory worker and almost 20 support, marketing,
and management personnel for every 100 factory workers. Its external environmental scan-
ning data indicated more favorable ratios for General Electric, Pratt’s chief competitor.
By projecting changes in the business factor and/or the productivity ratio, we can forecast
changes in the labor demand. There are six steps in trend analysis:
1. Find the appropriate business factor that relates to the size of the workforce.
2. Plot the historical record of that factor in relation to the size of the workforce.
3. Compute the productivity ratio (average output per worker per year).
4. Determine the trend.
5. Make necessary adjustments in the trend, past and future.
6. Project to the target year.
The use of the appropriate business factor is critical to the success of trend analysis. 19
Learning curves assume that the average number of units produced per employee will in-
crease as more units are produced. Such an increase is expected because workers learn to
perform their tasks more efficiently over time. Learning curves are evident in virtually all
industries. For example, in the automotive industry, learning curves for new models im-
prove by over 50 percent through the life of the model. At Pratt, the learning curve for one
particular engine exceeded 60 percent from start-up to the final production year. The busi-
ness factor, of course, should be directly related to the essential purpose for the business.
Universities typically use student enrollment by discipline, hospitals use patient-days,
manufacturers typically use output needs, and retailers use sales adjusted by inventory.
Regression analysis uses information from the past relationship between the organiza- tion’s employment level and some important success criterion known to be related to em-
ployment. With this approach, companies establish a statistical relationship between sales
or work output and level of employment. Such a relationship, however, is influenced by the
learning curve which is a graphical representation of a changing rate of learning for a given activity. Learning curves can be studied and used to make more accurate projections of future employment levels. More complicated quantitative methods can improve accu-
racy by incorporating operational constraints (e.g., budgets, mix of labor) into the models.
Through this elaboration, it is possible to forecast demand under varying business scenarios.
Some evidence shows that the Delphi method produces better forecasts
Quantitative Methods
Appropriate business factor is critical to trend analysis success
Quantitative methods can improve accuracy by incorporating operational constraints
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While our discussion of labor demand may suggest that planners attempt to establish a
singular forecast, the outcome of this process is typically a set of potential scenarios. A sce-
nario is a multifaceted portrayal of the mix of business factors in conjunction with the array
of HR needs. As such, each scenario/forecast is an elaborate set of “if–then” statements;
that is, “if” the business context presents us with scenario A, “then” our labor demand fore-
cast would be B. Ideally, HR planning is as comprehensive as possible to provide leeway
for a wide variety of business activities. Next we discuss labor supply forecasts that reveal
some of the constraints placed on business planning.
Whereas the labor demand forecast projects HR needs, the labor supply forecast projects
resource availability. This step of HR planning is vital in that it conveys an inventory
of the firm’s current and projected competencies. This skill base sets an upper limit on
the commitments and challenges the firm can undertake (all else being equal). From a
problem- solving perspective, labor supply represents the “raw materials” available to address
problems, threats, and opportunities. Supply forecasts are typically broken down into two
categories: external supply and internal supply .
Internal labor supply consists of those individuals currently available within the firm. Infor-
mation on personnel is maintained in Human Resource Information Systems (HRIS) . 20 Although many systems are available, the new Workday HRIS, developed by the creator
of Peoplesoft, is gaining considerable attention. Both Workday (go to Workday.com) and
Peoplesoft offer a human capital management, web-based HRIS system that includes a
competency or skill inventory, a comprehensive recruiting system, and an elaborate per-
formance management and development system. Data from these systems can be used to
make projections into the future based on current trends. These trends include not only the
number and kinds of individuals in each job, but also the flow of employees in, through,
and out of the organization. Specifically, a skills or competency inventory includes an as-
sessment of the knowledge, skills, abilities, experience, and career aspirations of each of
the present workers. This record should be updated frequently and should include changes
such as new competencies, degree completions, and changed job duties.
These inventories also aid in the internal recruitment process. If these inventories are
not updated, present employees may be overlooked for job openings within the organiza-
tion. This may result in increased search costs in addition to dissatisfaction among employ-
ees who were overlooked. Accordingly, internal supply forecasts must take into account
the company’s current practices pertaining to hiring, firing, transfer, promotion, develop-
ment, and attrition. The best HRISs, Workday being one example, provide great flexibility
for managing a global workforce for the process of recruiting, applicant tracking, hiring/
placement, and even termination. Requisite components should have the following:
1. Applicant tracking for comparing the pool across the organization, job families,
job profiles, and positions.
2. Managing the transition from applicant to employee (including temps).
3. Employee tracking with full worker histories, performance appraisals, and com-
pensation, benefits, and Paid Time OFF (PTO)/leave history.
4. Employee movement system for tracking within the organization to aid in succes-
sion planning and internal staffing.
5. Managing the transition from working status to retirement and/or termination.
Succession planning and replacement charts also are used by some companies to iden-
tify individuals to fill a given slot if an incumbent should leave. These techniques are most
useful for individual-level problems with short-term planning time horizons. Pratt used an
HRIS system to project successions, early retirements, future openings, and overstaffing
problems.
Two of the most important concerns regarding the use of electronic databases for per-
sonnel are privacy rights and security problems. The latter issues can be handled with the
Step Three: Labor Supply Forecast
Internal Supply
HRIS can help with internal recruitment
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Markov transition probabilities must be reliable
right systems and software provisions. The privacy issue is much more difficult. Many
states and many countries have privacy laws and regulations that may pertain to the use,
content, and access of the HRIS.
More complicated transition models such as Markov analysis are used for long-range forecasts in large organizations. Markov analysis uses historical information from person-
nel movements of the internal labor supply to predict what will happen in the future. An
estimate is made of the likelihood that persons in a particular job will remain in that job or
be transferred, promoted, demoted, terminated, or retired using data collected over a num-
ber of years. Probabilities are used to represent the historical flow of personnel through the
organization, a “transition matrix” is formed from these probabilities, and future personnel
flows are estimated from this matrix. 21 Figure 5-7 presents Markov data from one division
of Progressive Tool and Industries, one of the largest tool companies serving the automo-
tive industry (Progressive designs and manufactures the tooling for assembly lines). The
transition probability matrix presents percentages or probabilities of employee movement
through four positions within the division. These data were retrieved from personnel re-
cords and averaged over a 5-year period. The matrix shows that 70 percent of the assem-
blers remain in the position after 1 year with a turnover (quit or fired) rate of 20 percent.
The matrix also shows that 80 percent of the more skilled machinist jobs are retained after
1 year with only a 5 percent turnover rate. These data were used by Progressive to plan
its recruiting strategy based on its projected contracts. The data indicated a strong need to
evaluate the assembler job to determine the causes of the high turnover rate and the need to
concentrate recruiting at that level in anticipation of shortages of assemblers in the coming
year when contracts were expected to expand. Both Eaton Corporation and Weyerhaeuser have used Markov analysis successfully
in their forecasts. However, two attempts at Corning Glass proved unsuccessful because
the transition probabilities were unreliable. A minimum of 50 people in each job of the
transition matrix is recommended to ensure adequate reliability in forecasting. At Progres-
sive, for example, projections for oversupplies of foremen were based on small numbers
and proved to be relatively inaccurate. More research is needed on Markov analysis to
determine the key variables affecting its accuracy. Variables such as unemployment rate,
changes in competitor status, and business plans or customer demand that differ signifi-
cantly from the situation when the probabilities were established will have a profound ef-
fect on the usefulness of the Markov projections for the future. 22
External supply consists of those individuals in the labor force who are potential recruits
of the firm (including those working for another firm). The skill levels being sought de-
termine the relevant labor market. The entire country (or world) may be the relevant labor
market for highly skilled jobs, whereas for unskilled jobs the relevant labor market is
usually (but not always) the local community. Determining the relevant labor market also
A M F S Exit
Assemblers (A) .70 .10 .20
Machinists (M) .05 .80 .10 .05
Foremen (F) .10 .75 .05 .10
Supervision (S) .05 .90 .05
Staffing Levels A M F S Exit
Assemblers (A) 250 175 25 50
Machinists (M) 120 6 96 12 6
Foremen (F) 40 4 30 2 4
Supervision (S) 20 1 18 1
Forecast 181 125 43 20 61
Figure 5-7 Markov Analysis at Progressive Industries
External Supply
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Employees must sign I-9 forms
will determine what type of recruiting approach should be used. Several governmental and
industrial reports (e.g., Bureau of Labor Statistics, Public Health Service, Northwestern
Endicott Lindquist Report) regularly forecast the supply of labor and make estimates of
available workers in general job and demographic categories. These forecasts are also
extrapolations into the future based on current trends.
What Is the Immigration Reform and Control Act (IRCA) of 1986? The labor pool should be a legal pool. While there is a global market for many jobs today, some jobs just
have to be done in person (i.e., the worker is in the United States). The IRCA requires that
every U.S. employer, no matter how small, not hire or continue to employ aliens who are
not legally authorized to work here. The wave of immigrants entering the United States
slowed in recent years as the economy faltered and governments stepped up enforcement
of immigration and employment eligibility laws. Employers are supposed to verify the
identity and work authorization of every new employee and to sign an I-9 form attesting
to the legal status of each worker. Financial penalties for noncompliance can be harsh
(from $100 to $1,000 per employee) and criminal penalties are possible. Immigration and
Customs Enforcement (ICE) and the U.S. Attorney’s Office have made individuals who
work for companies that employ illegal aliens the targets of criminal prosecutions. This is
a change in tactics. HR people and line managers are now serving prison time for conspiracy
and harboring illegal aliens.
The use of illegals is rampant in some American industries as enforcement of the law is
limited and criminal penalties are still enforced on a limited basis. Law-abiding companies
in some industries such as construction can have difficulty competing on price against the
cheaters. One roofing-business owner in Florida reported that he couldn’t adequately staff
his business without illegals and that he certainly couldn’t compete in bidding jobs without
low-wage illegals. In addition, he reported that he “saves a ton” on worker’s compensation
and social security expenses when he uses “illegals.”
State lawmakers, in response to Congressional inaction on immigration law, are giv-
ing local authorities a wider berth. States across the country have recently proposed or
enacted hundreds of bills addressing immigration. Between 2009 and 2011, there were
222 laws enacted and 131 resolutions in 48 states, according to the National Conference
of State Legislatures. 23 The Immigration Reform and Control Act states that this fed- eral law overrides “any state or local law imposing civil or criminal sanctions (other than
through licensing and similar laws) upon those who” recruit or hire “unauthorized aliens.”
However, in 2011, the Supreme Court appeared to endorse state laws that punish employ-
ers who intentionally hire illegal workers. “The most rational path for employers,” Chief
Justice John Roberts wrote, “is to obey the law — both the law barring the employment
of unauthorized aliens and the law prohibiting discrimination — and there is no reason to
suppose that Arizona employers will choose not to do so.” 24
In affirming the legality of the Legal Arizona Workers Act that allows a county at- torney to bring a civil suit to suspend or revoke a business license if a business intention-
ally or knowingly hires an “unauthorized alien” worker, the Court ruling in Chamber of Commerce v. Whiting appears to also make legal similar laws in Alabama, Colorado, Mis- sissippi, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.
Other states may have passed similar laws since 2011.
E-Verify is a free, Internet-based program run by the U.S. government comparing data from an employee’s I-9 form with government records. If there is a match the employee
is eligible to work in the United States, whereas a mismatch alerts an employer and the
employee is then allowed to work while attempting to resolve the reason for the mismatch.
E-Verify is run by the Department of Homeland Security (DHS) in partnership with the
Social Security Administration. For most employers, the use of E-Verify is voluntary and
limited to determining the employment eligibility of new hires only. Federal contractors
and subcontractors are required to use E-Verify. Executive Order 12989 mandates the
electronic verification of all employees working on any federal contract. E-Verify is also
required for employers in certain states. Also as part of the Chamber of Commerce v. Whiting decision, the Supreme Court ruled that states can punish employers who violate mandatory E-Verify laws. In the same decision, the Court also upheld the provision of
State laws aim to curb illegal immigration
Immigration Reform and Control Act
E-Verify available to determine work eligibility
Chamber of Commerce v. Whiting
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Error rate down for E-Verify
the same Arizona law that requires employers to enroll in the voluntary federal E-Verify
program.
More than 238,000 employers are enrolled in the program with over 16 million queries
run through the system in fiscal year 2010. There were over 3 million cases run through
E-Verify in fiscal year 2011. According to a recent report from the Government Account-
ability Office (GAO), there has been a significant reduction in mismatch rates and fewer
problems with fraud, privacy, and discrimination issues. 25
What Are the Immigration Options for U.S. Employers? Another employment option for U.S. employers is legally importing workers through work visas. The H-1B visa program allows employers to hire highly skilled or specialized foreign workers for temporary jobs
in the United States. The program is designed for skilled workers in high demand and is
capped at 65,000 for 2012 plus 20,000 additional slots with advanced and specified college
degrees. An employer must file a labor condition application with the Department of Labor
attesting to several items, including payment of prevailing wages for the position and the
working conditions offered. Under current law, an alien can only be on H-1B status for
6 years at a time (go to http://uscis.gov for more detail). The legal limit of H-1B visas was
reached for 2011 before the fiscal year even began.
Employers can also hire foreign workers to temporarily work in the United States or to
receive training. Employers must file a petition for temporary foreign employees. There
are many categories of temporary workers, and the categories vary by the maximum time
such an employee may stay. One controversial program for temporary employees is the
Intracompany Transferee L-1 classification. The purpose of these visas is to allow foreign companies to transfer employees into the United States. The number of these visas has
risen in recent years. Unlike the H-1B visa, employers do not have to pay L-1 workers
prevailing wages. Aliens with “specialized knowledge” or managerial responsibilities who
are transferred to the United States by a foreign employer to work for the parent company
in the United States qualify for L-1 visa status.
While the United States Citizenship and Immigration Service has specific definitions
for “specialized knowledge,” “managerial,” and “executive” classes, there are accusations
that the L-1 program has been abused to the detriment of the American worker. At present,
L-1 workers can stay in the United States for a maximum of 7 years. Critics charge that L-1
visas are now used by foreign companies to bring workers into the United States who then
do contract work for American companies, at times to replace American workers. There
have even been accusations that American workers trained the L-1 contract workers before
the Americans were fired.
Gap analysis is used to reconcile the forecasts of labor demand and supply. At a minimum,
this process identifies potential shortages or surpluses of employees, skills, and compe-
tencies. In addition, however, planners can review several environmental forecasts with
alternative supply and demand forecasts in order to determine the firm’s preparedness for
different business scenarios in the context of business objectives. From a problem-solving
perspective, gap analysis is used to match potential strengths and opportunities with so-
lutions in order to evaluate how the firm might attack the future. This decision-making
process involves (1) search for alternative solutions, (2) evaluation of alternatives, and
(3) choice of solutions.
The evidence on the effects of downsizing is mixed. Strategic downsizing and restruc-
turing can clearly be effective in improving a firm’s position, but strategic downsizing is
more than just “cost reduction.” Figure 5-8 presents a summary of the research evidence.
One expert echoes the latest research showing that restructuring by downsizing does
not necessarily make a company more profitable. In an excellent book entitled Responsible Restructuring , Professor Wayne Cascio presents a strategy for optimal restructuring. 26 Figure 5-9 presents Dr. Cascio’s prescriptions for enhancing the effectiveness of restruc-
turing and downsizing. He makes a convincing argument that his approach can be an oppor-
tunity to focus on the most important elements (and people) of the organization where it has
(or could have) a sustained competitive advantage. 27
L-1 programs are controversial
Step Four: Gap Analysis
Is There an Optimal Way to Downsize or Restructure?
Strategic downsizing is more than cost reduction
H-1B Visa
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Most effective reengineering improves competitive advantage
Most companies implement downsizing as a reaction to loss of market share, increased
competition, or lower productivity. Some look at downsizing as simply a workforce reduc-
tion process rather than a restructuring or reengineering of jobs in the context of corporate
strategy or planning. As one CEO put it, “We lost the organization in the process . . . we
basically fired people and called it re-engineering . . . we jumped on the re-engineering
bandwagon without understanding its destination.” Another CEO was even more disil-
lusioned with job cutting posing as reengineering. “We cut costs, ruined quality and elimi-
nated more customers than employees. . . . Re-engineering has replaced strategic thinking
around here.”
The most effective reengineering efforts are an opportunity to create or improve
the company’s competitive advantage through restructuring, overhead reduction, and
more effective performance management with a constant focus on the core competencies
of the organization and the current and/or future customer base. The process can create a
frame of mind that could be sustained after the major downsizing effort is complete. The
idea is to create and maintain a “lean and mean” mentality in management that would be
sustained long after the specific downsizing goals are met and always in the context of
meeting (or exceeding) customer requirements with measurement criteria that best define
this customer focus. Reengineering that focuses on the core competencies of the organi-
zation and the core business and its customers can help support a clear and compelling
organizational strategy. But as strategy expert Darrell Rigby puts it, “Cutting people whose
experience is vital to the creation of customer value will never create superior results.”
Over 130,000 IBM employees have taken early retirement since its first major downsiz-
ing effort in 1988. While the program helped IBM maintain its company policy of never
laying off a single full-time employee, IBM lost some of its best employees who opted for
one of the attractive termination programs. Later, IBM’s downsizing program focused on
offering early retirement to only noncritical employees, terminating marginal employees
Figure 5-8 Summary of Research on Downsizing and Outcome Variables
1. No consistent relationship between downsizing and post-downsizing financial performance. 2. Other cost-saving measures may be more effective (e.g., attrition). 3. Even when payroll is reduced, restructuring charges may offset benefits. 4. Negative effects on effectiveness and performance for some types of firms. 5. Effects can be more negative in service industries with high levels of customer contact. 6. Higher negative effects for firms engaged in “high involvement” work practices with team-oriented work designs and pay-for-per-
formance systems. 7. Negative effects on survivors (that should be incorporated into calculation of effects). Survivors lose motivation, are risk-averse, and
are more likely to seek employment elsewhere. 8. Can lead to a loss in valuable talent but also disrupts vital social networks that facilitate innovation and creativity. 9. Large sample studies indicate a general negative effect of layoff announcements on market-adjusted equity values. 10. Early retirement programs tend to realize positive response but the most valuable employees may accept buyouts.
Figure 5-9 Enhancing the Effectiveness of Employment Restructuring and Downsizing 1. Carefully consider the rationale behind employment downsizing. 2. Consider the virtues of stability. 3. Before making any final decisions about downsizing, executives should make their concerns known to employees and seek their input. 4. Top management should lead by example, and use downsizing as a last resort. 5. If employment downsizing is unavoidable, be sure that employees perceive the process as fair, and make decisions in a consistent
manner. 6. Communicate regularly and in a variety of ways in order to keep everyone abreast of new developments and information. 7. Give survivors a reason to stay and prospective new hires a reason to join. 8. Train employees and their managers in the new ways of operating. 9. Examine carefully all management systems in light of the change of strategy or environment facing the firm.
Source: Adapted from W. F. Cascio and P. Wynn, “Managing a Downsizing Process,” Human Resource Management 43 (2004), pp. 425–436.
Poor performance appraisal systems problematic for performance-based downsizing
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Downsizing needs a customer focus
for cause, and offering less attractive transfer options to those who were not needed in their
current jobs. One of the biggest problems in achieving its early downsizing goals, however,
was the IBM performance appraisal system, which did not provide enough useful data to
allow for performance-based decisions. It does now and IBM is doing very well.
There are many approaches to downsizing and some may be required due to union
agreements. AT&T “selected” current employees for the new positions based on new job
descriptions created by the overhaul of its divisions. The skilled-based résumés and the
performance appraisals of the “applicants” for the new jobs were assessed in the context of
the labor demands projected based on the new corporate strategy. Voluntary buyouts were
one part of the options AT&T used to close the gap in its supply and demand for labor.
Most chief executives and senior managers viewed a customer focus as the framework
for downsizing. 28 This focus included increasing the understanding of customer needs,
expanding the customer base, and increasing product and service quality. Of course the
relationship between labor costs and pricing is almost always on the top of the list in terms
of customer focus. But the list must be longer than just cutting payroll to save money.
Professor Cascio asks, “Could it be that there is virtue in stability?” He reports that 80
of the 100 companies that made Fortune’ s 2002 list of the “100 Best Companies to Work For” avoided layoffs in 2001; 47 of them had some form of policy barring layoffs. And
remember there is a relationship between that list of the “best companies” to work for and
actual corporate financial performance. 29
As indicated in Figure 5-9 , some of the problems associated with downsizing (or “right-
sizing”) can be minimized with good planning and strategy. In addition to examining
performance data and redeployment options, such planning may include outplacement services for employees who have lost their jobs. Outplacement can involve job coaching,
résumé preparation, placement services, and interview training. Every AT&T employee
who was not selected for the restructured company was given access to a resource center
that provided job counseling and access to job postings within the company and at other
companies.
Such outplacement services are now available in Europe and even in Japan, where
Japanese companies are faced with a need to downsize as well. It is generally believed that
offering outplacement services to employees who have lost their jobs will reduce the prob-
ability of a lawsuit, such as a claim of age discrimination. (There is actually no definitive
study on the subject.)
These prescriptions for effective (and limited) downsizing do not necessarily rule out
strategic termination. A strong argument can be made that having the very best people in
the most important strategic positions is a key to strategy execution. Former GE CEO Jack
Welsh often talks about having “A” players in the strategic “A” positions and that having
“C” players in such positions can kill strategic execution. HR planning should emphasize
the placement of the most qualified individuals in the most important positions. Strategic
planning may also include a careful look at and action regarding those employees who
could be replaced with more effective individuals.
As discussed previously, in HRP there are likely to be multiple scenarios that are worthy
of consideration. Environmental scanning and labor forecasts identify a range of possible
options. At this stage, the range of possibilities can be increased by seeking input from
executives, line managers, employees, customers, and consultants in a “brainstorming”
process. A qualitative approach such as Delphi can be used at this point as well. As part of its HR planning process and after a thorough job analysis, pharmaceutical
giant Upjohn asked line managers to answer four basic questions:
1. How does each job relate to the strategic plan of the work unit?
2. Are there alternatives to a full-time job that should be considered to accomplish
the same objectives (e.g., temporary workers, part-time employees, independent
contractors, job sharing, telecommuting, employee leasing, consultants, overtime)?
3. What are the projected costs of each job?
4. What specific impact will the job have on critical and clearly defined effective-
ness criteria?
Downsizing problems can be minimized with good strategic planning
Outplacement may reduce the probability of lawsuits
What Are Some Alternative or Additional Solutions? Use Delphi method to assess HRP options
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What Is the Role of Temporary Employment?
More and more companies have been asking similar questions regarding their workforce
and coming up with rather creative answers. One of the strongest trends in this country
is the use of creative labor arrangements. Temporary employment, part-time workers,
telecommuters, job sharing, and employee leasing are among the most popular solutions
to labor cost control and fluctuating demand. With employee leasing , a leasing company assumes complete responsibility for the employee, including pay and benefits. The major
disadvantage for the employer is a loss of some control over the employee. This loss
of control, of course, could affect the effectiveness of employees’ performance, which
could have a direct impact on the customer. There are few studies that compare the per-
formance, productivity, absence rates, or any other criteria of permanent versus leased
employees.
Another significant trend in creative HR planning is the use of permanent part-time
employees. 30 For years, IBM’s policy of maintaining a 10 percent part-time workforce
enabled the company to maintain a labor pool in line with the business cycle and to
preserve its sacrosanct policy of no layoffs. IBM has now increased the percentage to
20 percent and outsourced many functions, including a large share of its HRM functions.
Many other companies, particularly in service, are now following suit. Ryder Trucks,
UPS, and Walmart are among the major companies now maintaining a sizable percent-
age of their workforce with part-time status. According to the Bureau of Labor Statistics,
41 percent of the U.S. workforce worked part-time in 2010. Of this group, two-thirds
were women.
There is a growing use of temporary employees to provide more flexibility for HR.
Through temporary employment agencies such as Manpower, Inc., employers often can
get well-screened and well-trained employees who might also provide unique and positive
perspectives on how the work gets done. Of course, on the downside, temporary employees
are usually less committed to the organization and its customers. They may also be per-
ceived as a threat to the job security of full-time employees. New temporary employees can
be particularly problematic if a major downsizing has occurred recently. 31 While working
parents consider part-time employment a good thing, women’s groups such as the National
Organization for Women (NOW.org) decry the trend as fostering a marginal employment
policy characterized by low wages and no benefits.
The National Association of Temporary Services reports a growth rate in temporary
employment in excess of 30 percent. While employers generally report that temporaries are
typically hired for emergencies, an increasing number of companies report considerable
cost savings as well with “temps” judged to be as productive as permanent employees. 32
One form of temporary “employment” is the internship . Many organizations now use some form of paid or unpaid internship, particularly for college students or new graduates.
From the organization’s perspective, this is an excellent way to gather information on an
individual for a full-time position.
One recent study found that over 60 percent of such internships ultimately resulted in job
offers. This same study found that interns who desired to be hired were more likely to use
self-promotion and ingratiation as a strategy and that this strategy increased the probability
of a job offer. Those organizations who wished to hire individuals were more receptive to
interns’ creativity, and this receptivity increased the interns’ application intentions.33
What are the criteria for classifying workers as independent contractors? Many American workers are classified as independent contractors. Individuals pro-
viding services are employees or independent contractors. In general, employers must
withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay
unemployment tax on wages paid to an employee. Employers do not have to withhold or
pay any taxes on payments to independent contractors. The critical questions for determin-
ing a worker’s status are: (1) Does the company control or have the right to control what
the worker does and how the worker does his or her job? (2) Are the business aspects of
the worker’s job controlled by the employer (e.g., how the worker is paid, are expenses re-
imbursed, who provides tools/supplies)? (3) Are there written contracts or employee-type
benefits (e.g., pension plan, insurance, vacation pay, etc.)? and (4) Will the relationship
continue and is the work performed a key aspect of the business? According to the Internal
Revenue Service (IRS), the key is to look at the entire relationship; consider the degree or
Temporary employment, part-time, telecommuting, job sharing, and employee leasing are popular ways to control costs
Temporary employees can provide more HR flexibility
Over 30 percent increase in temporary employment
60 percent of internships result in job offers
Internal Revenue Service: key issue for worker classification is the entire relationship
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Telecommuting has beneficial effects
extent of the right to direct and control; and, finally, to document each of the factors used
in coming up with the determination.
Many employers offer some form of job sharing , in which two employees share the re- sponsibilities, accountability, and compensation of one full-time job. Job sharing is more
common among small employers. 34 Management support appears to be the key to the suc-
cess of these programs. Many managers and supervisors express fear that job sharing will
translate into extra work for management and extra expense for the employer. However,
the limited research on the subject indicates that any additional compensation is offset by
higher productivity and longer tenure. Job sharing has the potential to help with work flow,
reduce turnover, and save on recruiting costs. The approach is responsive to employees’
needs to balance work and family or other personal issues.
The success of job sharing depends on a good partnership. Among the key questions the
partners and management must answer are the following: (1) How will the work schedule
be divided? (2) How will the partners handle critical meetings, deadlines, etc? (3) How will
the partners divide salary and benefits? (4) How will the work team communicate (formal
systems are better)? and (5) How will performance evaluations be conducted (individual
appraisals are usually more effective)?
Technology has facilitated job sharing. Projects no longer have to stop at the end of the
American workday. This is especially evident in the IT industry. Americans finish their work-
day and then turn over a project to computer programmers in India or Dubai who work while
the Americans sleep. Needless to say, this 24-hour attention helps companies hit deadlines.
Technology enables work to be done from almost anywhere. It is estimated that over
30 million American workers telecommuted in 2010. 35 The number is probably higher today
as traffic becomes more problematic, the cost of gas continues to rise, and telecommunications
technology improves. Telecommuting is an alternative work arrangement allowing workers to work at home or in some other location other than the employer’s physical premises. When
properly implemented, the evidence of its effectiveness and efficiency is quite strong. Compa-
nies are able to attract and retain effective workers with considerable cost savings.
The most comprehensive review of effects found that telecommuting had beneficial
effects on job satisfaction, job performance, turnover intent, and role stress. Also, telecom-
muting that involved more than 2½ days of work per week increased the benefits regarding
work-family conflict. However, although telecommuting had no general negative effects
on the quality of workplace relationships, the longer hour types of arrangements did some
harm to relationships with co-workers. 36
One of the more complicated issues regarding a major downsizing is the potential conflict
between downsizing efforts and programs aimed at promoting workforce diversity. Ciba-
Geigy, the pharmaceutical company, had a diversity challenge as a part of its retention
process. In the assessment of employee performance, managers were asked to value a
diverse organization by “proactively considering diversity in this process.” After the ini-
tial retention decisions were made, “HR challengers will review retention decisions with
respect to diversity . . . and to test for adverse impact.” HR compared diversity data after
the initial retention decisions to predownsizing data. According to documents in a lawsuit,
“the result of this analysis may lead to a possible further challenge.” Several older Ciba-
Geigy employees who were fired maintained that the “diversity challenges” resulted in
discrimination against older workers since they were not a part of the diversity programs.
Given the current state of EEO law regarding preferential treatment, if the plaintiffs
could show that race or gender was actually considered in the retention process and that
this consideration affected the status of older workers, would the older workers prevail in
an ADEA case? This is a tough call and probably would depend on the process that was
followed after the internal audit. If the plaintiffs could show that performance ratings were
simply changed to avoid adverse impact against women or minorities and that changes
were unfavorable to older workers, an ADEA claim could be successful.
Organizations that undergo downsizing while attempting to maintain diversity or affir-
mative action accomplishments should try to avoid showing preferential treatment on the
What Is Job Sharing?
Job sharing success depends on a good partnership
What Is Telecommuting?
Is There a Conflict between Downsizing and Diversity Goals?
Avoid preferential treatment in downsizing
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Step Five: Action Programming
basis of any protected class characteristic. It is possible (and advisable) to actually evaluate
past performance or even potential performance without even considering a protected class
characteristic. While conducting adverse impact analysis such as hypothetical violations
of the 80 percent rule is certainly recommended, violations of the guidelines should lead
to a serious evaluation of the job relatedness of each step of the decision-making system,
not the simple adjustment in ratings as a consequence of a protected class characteristic in
order to avoid a violation of the 80 percent rule.
Action programming is the final step of HRP that takes the adopted solution and lays out
the sequence of events that need to be executed to realize the plan. In the previous four
steps of HR planning, the task was to derive a solution that best addresses the issues iden-
tified through environmental scanning and labor forecasts in the context of the strategic
plan. The purpose of action programming is to make certain that those decisions become
reality. In general, there are two aspects of programming: internal and external.
Many of the solutions in HRP rest on actions inside the firm with the current workforce.
For routine issues, in particular, bureaucratic adjustments in HR practices can be easily
programmed internally (e.g., job design/assignments). In addition, for some uncertain ar-
eas, adaptive adjustments such as training, career planning, and compensation design can
be made internally.
These are the adaptive requirements many companies follow because of labor shortages
in key areas. Taking a closer look at organizational design around changing technologies is one such example. IBM’s “hot skills” program is a great illustration of the effective link-
ing of corporate strategic planning with HR planning and HR recruitment.
Other solutions in HRP require going outside the firm to interact with constituencies in the
environment (e.g., labor unions, competitors, etc.). In particular, when plans require drasti-
cally different competencies from what employees currently possess and/or the time frame
for change is quite short, the firm likely will need to recruit from the outside labor market.
Motorola’s experience with the coordinated efforts of U.S. and Indian programmers is one
example of reacting to new time frames.
Control and evaluation monitor the effectiveness of human resource plans over time.
Deviations from the plans are identified and actions are taken. The extent to which
human resource objectives have been met is measured by the feedback from various
outcomes. It has been suggested that, essentially, long-range planning activities require
the attainment of short-run objectives. Examples include performance or productivity
data, turnover costs, workforce reduction effects from early retirement programs, break-
even costs of new hires/or consultants, and analysis of costs of recruits compared to the
training and development costs of existing employees. Obviously, actual staffing levels
compared to projected levels should be evaluated for accuracy. Doing evaluations such
as cost–benefit analysis makes it easier to determine whether long-run planning objec-
tives will be met.
The issue of evaluation of planning can be considered along with the evaluation of
recruitment efforts since the criteria used for the evaluations are often the same. This is
discussed later in the chapter. The critical consideration here should be the identification
of the vital measurement criteria, which will provide for an assessment of the HR planning
implementation in the context of the business strategy. Regarding outsourcing and alterna-
tive work arrangements, the most fundamental criterion should be cost savings but always
in the context of meeting customer requirements.
When HR planning involves adding to the labor force, the organization must rely on
the recruitment function to meet its employment needs. The whole point of the planning
exercise is to accurately determine the optimal number of employees to meet internal and
external customer requirements. If the gap analysis determines that employees are needed,
that is where recruitment comes in. Discussion of this vital HR function is next.
Internal Programming
External Programming
Step Six: Control and Evaluation
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Moving from HRP to recruitment is essentially a process of translating broad strategies
into operational tasks. The major responsibility for this process typically rests within the
HRM department, although most tasks are shared with line managers. While HR manag-
ers are responsible for determining recruitment policy, ensuring EEO compliance, train-
ing, and evaluating the recruiters, many organizations actively involve line managers and
employees as recruiters. As mentioned previously, conflict between HR and line managers
can occur when their priorities diverge. For example, line managers may be more con-
cerned about filling a position quickly (i.e., when the new employee is needed), while HR
managers may be more concerned about affirmative action guidelines or complying with
EEO regulations. Their goals should be the same: hiring the most qualified person(s) when
needed and without violating any laws or regulations. Figure 5-10 presents a model of the
organizational recruitment process.
Recall the statement earlier about the interdependent nature of recruiting with other HR ac-
tivities and the reputation of the organization. Decisions regarding employee testing, work
policies and programs, compensation, benefits, and corporate image all can have an impact
on recruiting. Here are some examples. A large retailer required high-level managerial can-
didates to travel to the company headquarters (for some, over 2,000 miles) to go through
a 2-day selection process that was only offered at headquarters. Because of these require-
ments, many experienced managers who were working for other companies dropped out of
the pool of candidates because they didn’t have the time to commit to a 2-day assessment
with 2 additional days of travel to the national headquarters. The Opryland Hotel in Nash-
ville had difficulty attracting housekeepers, kitchen helpers, and laundry workers. It put
THE RECRUITMENT FUNCTION: PUTTING HRP INTO ACTION
Figure 5-10 A Model of the Organizational Recruitment Process
Recruitment Objectives
• Retention rate • Job performance • Psychological contract fulfilled • Job satisfaction
• Cost of filling jobs • Speed of filling jobs • Number of positions filled • Diversity of hires
• Number of applicants • Quality of applicants • Diversity of applicants • Ratio of offers to acceptances
Strategy Development
• Whom to recruit? • Where to recruit? • Recruitment sources to use? • When to recruit? • What message to communicate?
Recruitment Objectives
• Recruitment sources • Recruiters • Recruitment message Realism Completeness Timeliness
Intervening/ Process Variables
• Applicant attention • Applicant comprehension • Message credibility • Applicant interest Job & organizational attractiveness Expectancy of job offer • Accuracy of applicant’s expectations • Self-insight Knowledge, skills, abilities, needs
Recruitment Results
• Compare outcomes to objectives
Source: J. Breaugh and B. Starke. “Research on Employee Recruitment: So Many Studies, So Many Questions,” Journal of Management, Vol. 26, p. 408. Copyright (2000) by Sage Publications, Reprinted by permission.
Recruitment, Other HR Activities, and Organizational Attractiveness
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Some manufacturing is returning to the United States
“Geography is history”
in a 7-day-a-week child care center and a bus service to transport workers. The two new
employee benefits increased the number of applicants by 35 percent.
A company institutes a comprehensive drug-testing program that includes random drug
testing with no probable cause for all employees. The company does not consider how the
broader pool of candidates might view this and merely assumes that the policy will have
an impact only by deterring applicants who would be most likely to use drugs. Weyco, a
Michigan insurance benefits company, informed its workers that they would be subject to
random testing for smoking. If they test positive for smoking, they will be fired. Rather than
take the mandatory breathalyzer test, four employees left the company. Another company
decides to reduce indirect compensation by reducing health benefits for new employees
and increasing the premium. It has no idea what the change in policy will do to its ability
to recruit. The company finds out later that recruitment costs have gone up along with the
rate of offer rejections. It finally conducts an actual cost–benefit study of the change in
policy and discovers that in fact the company lost money because of the interactive effect
of the policy on staffing and the retention of valuable employees. Recruitment, selection, and personnel policies are indeed interdependent.
Of course recruitment and human resource planning should be done with the assump-
tion that consideration will be given to where the work is performed. Technology now
allows employers to consider many more options for getting the job done. As discussed
earlier, along with telecommuting, more companies are now turning to offshoring and the
outsourcing of work, particularly work that is strategically less important, can be done for
less, and when shipping and the cost of oil do not wipe out the gain from lower labor costs.
“Geography is history,” says Raman Roy, chairman of Wipro Spectramind, one of India’s
largest customer service companies. 37 Over 750,000 American tax returns were prepared
in India in 2011, most of them by SurePrep, headquartered in Bangalore. Indian tax prepar-
ers are paid between $400 and $500 per month versus $3,000 to $4,000 per month in the
United States. In 2011, SurePrep did work for more than 200 American accounting firms.
Morgan Stanley now has Indian stock analysts and Dell sends customer calls to India
(estimated savings of around 50 percent on compensation). IBM employs about 350,000
people worldwide and only about 35 percent of them are in the United States. Even SAS,
the North Carolina company discussed in Chapter 1 with the incredible employee benefits,
now employs a growing percentage of computer tech specialists who live and work in In-
dia. Says Jerry Rao, Indian entrepreneur, “Any activity where we can digitize and decom-
pose the value chain, and move the work around, will get moved around.” It is estimated
that 750,000 American jobs went to China, Russia, and India between 2001 and 2010. See
again Figure 5-3 for offshoring “attractiveness” scores by country.
While “geography may be history” regarding knowledge-based service work that does
not require face-to-face contact with customers or clients, geography is not history with
regard to manufacturing or any work involving expensive shipping. Also, because of the
increased cost of shipping mainly due to the price of oil, some manufacturing is actually
returning to the United States. “Cheap labor in China doesn’t help you when you gotta
pay so much to bring the goods over,” says economist Jeff Rubin. “Made in the USA”
now makes more sense for some companies. DESA, the company that makes the giant
heaters you see behind the benches at NFL games, relocated back to the United States
from China in 2008. Among the other companies practicing this “reverse globalization”
are Crown Battery (from Mexico to Ohio) and Larouk Systems (1,000 jobs from China
to Houston). “It’s not just about labor costs anymore,” says economist Rubin. “Distance
costs money, and when you have to shift iron ore from Brazil to China and then ship it
back to Pittsburgh, Pittsburgh is looking pretty good at 40 bucks an hour.” 38 But $40 an
hour may be more the exception than the rule for new U.S. manufacturing jobs. That new
Volkswagen plant in Chattanooga, Tennessee is paying its 2,000 American workers $14.50
an hour, far below the pay for the typical (unionized) U.S. auto worker.
Recent developments in China, particularly when combined with added costs because
of the price of oil, could contribute to this momentum regarding manufacturing in the U.S.
Chinese factory workers are demanding and getting better wages, working conditions, and
benefits. Minimum wages have climbed 32 percent since 2004 (the average is from $58 to
$81 a month, excluding benefits) in Shenzhen, Beijing, and Shanghai. Wages at the largest C o p
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factories operated by many American multinationals, paying between $100 and $200 a
month in 2004, are now also rising. China’s progress could bode well for workers in places
like Cambodia, Bangladesh, and Madagascar, but the shipping costs might still direct the
multinationals back to the United States at least for products sold mainly here. Factory
owners may be complaining that they can’t find workers in China, but that means they will
do what they have always done in such cases: look for cheap labor elsewhere and more
efficient logistics. Foreign auto companies employed over 140,000 people in the United
States in 2011. Still, the typical General Motors worker in the U.S. costs the company
about $56 per hour (including benefits). In Mexico, a worker doing the same type of work
costs the company $7 per hour; in China, $4.50 an hour, and in India, $1 per hour. While
G.M. reduced its hourly work force in the U.S. to 50,000 in 2010 from 89,000 in 2006, its
Mexican hourly head count rose up 10% (to 10,000).
For jobs with high turnover rates, as stated earlier, consideration should also be given
to telecommuting where a customer call “center” isn’t a center at all. When you call Jet-
Blue to make a reservation, you’re probably talking to a Utah housewife working from
her home. American Airlines is following the JetBlue lead with a growing number of its
customer service representatives CSRs sitting in their homes throughout the United States.
There is growing evidence that turnover rates and overall costs can be sharply reduced
with telecommuting. Job applicants tend to like the approach, the pool of qualified job
candidates grows, performance is on a par (or better) than “on-premises” workers, and the
voluntary turnover rate is significantly lower compared to the “on-premises” folks. With
the cost of gasoline high (and climbing), telecommuting is looking better and better to
corporate America and to working America.
Recruitment can clearly be made harder or easier by a whole host of factors. The state of
the economy, the unemployment rate, the supply and demand for particular KASOCs or
competencies, and HR policies and practices are all factors. Of course the attractiveness
of the organization from the perspective of potential job candidates is also important. This
attractiveness factor is related to many factors that go into an organization’s reputation.
As discussed in Chapter 1, an organization’s reputation in terms of its effectiveness or as
a “socially responsible” employer can clearly affect recruitment. Google may now be the
leader in IT applications because of its reputation. No doubt an organization’s reputation
as a great place to work with an optimistic outlook and a stable history, as a company with
great potential for growth, or as a socially responsible company will make a recruiter’s
job a whole lot easier. Have you noticed how many ads are on television now extolling
the virtues of Walmart as a great place to work and how much Walmart is doing for the
local community? This PR campaign is probably to some extent a response to the negative
news about Walmart in these same areas and its generally unfavorable reputation as an
employer. Obviously, Walmart wants its reputation to attract and keep good workers and,
of course, loyal customers.
Based on the gap analysis, an organization should have a fairly good idea of its overall
recruitment or downsizing needs. This information must be operationalized and com-
municated to those who will be taking the action. Three essential steps for translating
future needs into specific operational terms are (1) work analysis, (2) time lapse data, and
(3) yield ratios.
Recruiters and HR planners rely on two aspects of work analysis to identify the critical
skills for which they will recruit. First, job descriptions provide an outline of the responsi- bilities, duties, and tasks to be performed by the potential employee. Second, the job speci- fications outline the knowledge, skills, and abilities required of the applicant. In general, the more specific the recruitment design, especially in terms of job specifications, the more
efficient and effective it is, assuming of course that the specificity is important for the job.
Poorly designed recruiting is more expensive and takes longer.
For example, job specifications are sometimes written that are not essential for the job
and are sometimes unnecessary and costly. One retailer stipulated 3 years’ experience as a
store manager in order to be eligible for consideration as a store manager for the company.
Automotive wage comparisons
An organization’s reputation affects recruitment success
The Three Essential Steps for Recruitment Planning
Work Analysis
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Time Lapse Data
The VP of operations drew up specifications unilaterally and based on his “sense” of what
was required in the job. The result was a small pool of applicants, higher advertising costs,
and fewer otherwise qualified females and minorities with such experience.
Work analysis information that accurately reflects the requirements needed for the
job can have a direct impact on the effectiveness of any recruitment and planning effort.
Work analysis information can also be used in a downsizing effort as jobs are restruc-
tured based on the new organizational structure or individuals are repositioned based on
a new strategy. As discussed in Chapter 4, specific work analysis strategies are available
for writing job descriptions and specifications based on an organization’s competitive
strategy.
Work analysis can also determine where work should be done for maximum efficiency.
Office Depot cut 900 call center jobs and then contracted with Willow CSN Corp. in
Miramar, Florida, to provide the “home-based” service to customers. Technology now al-
lows for telecommuting where most (or all) work is performed at home. Alston and Byrd,
an Atlanta-based law firm, allows lawyers considerable latitude in determining when to go
into the office and when to stay home and work. With its entire law library now online and
many other communication vehicles available, lawyers don’t miss a beat on productivity
and they avoid the horrendous Atlanta traffic.
The need for accurate job descriptions and job specifications is particularly critical for
web-based recruiting of any kind. There are numerous examples of Internet recruiting that
can quickly get you an overwhelming number of résumés, the vast majority of which are
irrelevant to the jobs you are trying to fill.
While HRP provides the number of jobs needed and work analysis provides the speci-
fications for the jobs, management must know when to start a recruiting process and how
extensive the search should be. This is where time lapse data and yield ratios come in.
Time lapse data (TLD) provide the average time that elapses between points of decision making in recruiting. For example, if the recruitment plan calls for newspaper advertise-
ments, records may reflect that the job is ultimately filled an average of 2 months after
publication of the ad. Thus, the ad should be placed at least 2 months before the job has
to be filled. Data also may be available on the time lapse between interviews and offers,
and offers and acceptances. When combined with yield ratios, the TLD can provide useful
information for planning and scheduling a recruitment effort.
Time lapses have been reduced for some companies taking advantage of the automated
recruiting options available through the World Wide Web. All of the country’s largest
newspapers now have job listings services on the Internet. Careerjournal.com is an online
job board that allows employers to post positions on multiple websites. Currently, there are
over 150 sites that “partner” to cover many job specialties.
A yield ratio for any recruiting step reflects the number of candidates available at a step compared to a previous step. For example, a series of newspaper ads may result in
1,000 applications for employment. Of these 1,000 applications, 100 are judged to meet
some minimum qualifications (to be in the “ball game” so to speak). Thus the yield ratio
at this initial stage is 10 percent. Of the group of 100 candidates, 50 accepted invitations to
be interviewed (yield ratio is 50 percent for this stage); of the 50, 10 were given job offers
(20 percent yield ratio). These ratios can (and should) be calculated for recruitment sources.
Assuming that the labor market has not changed dramatically from when the yield ratios
were derived and that similar methods of recruiting are to be used (e.g., advertising in the
same papers, using a web service or a headhunter), the ratios can be used as the basis for
planning future recruitment efforts. By going backward from the calculated yield ratios,
the recruiter can estimate how many applicants will be necessary in order to fill a certain
number of positions. The recruiter then can adjust the recruiting effort accordingly with
more (or less) advertising, more (or fewer) trips to college campuses, more “Monster” ads,
and so on.
The use of time lapse data and yield ratios is another area where there is a wide gap be-
tween what academic texts and scholarly research recommend and the extent to which such
data are collected in organizations to drive future recruitment planning. While almost every
Yield Ratio or Percentage
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scholar on the subject recommends a recruitment evaluation process that includes yield
ratios to assist decision makers in efficient recruitment planning, few companies actually
collect these data as a part of a recruitment evaluation.
Recruitment is a never-ending process for many jobs where there are critical shortages of
highly specialized skills. As discussed previously, there are tight labor markets for some oc-
cupations and indications that markets will get even tighter, particularly for knowledge-inten-
sive jobs. Many hospitals recruit for nurses on a continuous basis because they are constantly
understaffed. Advertisements for nurses today often promise not only high pay, but more of
a say in their jobs and hospital management, bonuses of $3,000 or more for signing up, bo-
nuses for staying on the job a certain length of time, flexible work schedules, child care, and
free tuition for advanced courses. Some employers even offer maid service and free housing
for nurses who are willing to work at various locations based on demand. Many high-tech
manufacturing firms recruit for engineers and computer programmers year-round as well.
Some companies have difficulty filling even the unskilled positions. The fast-food in-
dustry, for example, beset by turnover rates in excess of 200 percent (two incumbents for
every job in 1 year), often advertises and takes applications for counter personnel through-
out the year for many locations. Many companies have mobile recruiting units that visit
high schools and shopping malls to solicit applications. McDonald’s cooperates with the
American Association of Retired Persons to attract senior citizens for hard-to-fill counter-
personnel positions. Despite 9 percent unemployment in 2011, many companies still re-
ported difficulties in recruiting unskilled workers in many geographical areas. McDonald’s
was offering a $300 signing bonus for certain North Dakota locations where there were
major labor shortages in 2011.
There are two general sources of recruiting: internal and external. Internal recruiting seeks
applicants for positions from among the ranks of those currently employed. With the excep-
tion of entry-level positions, most organizations try to fill positions with current employees.
Figure 5-11 summarizes the advantages and disadvantages of each source of recruiting.
There are several major advantages of internal recruiting. First of all, it is considerably less
costly than external recruiting. Second, organizations typically have a better knowledge
of internal applicants’ skills and abilities than that which can be acquired of candidates in
an external recruiting effort. Through performance and competency assessment, decision
makers typically will have much more extensive knowledge of internal candidates and
thus make more valid selection decisions. The third advantage to internal recruiting is that
an organizational policy of promoting from within can enhance organizational commit-
ment and job satisfaction. These variables have been shown to be correlated with lower
employee turnover rates and higher productivity.
A policy of internal recruiting is one component of high-performance work practices, which are discussed in Chapter 1. Companies that practice internal recruiting are more
likely to be successful financially than companies that rely on external recruiting for top
Discrepancy between academic research and personnel practice: The use of yield ratios
The Two Sources of Recruiting: Internal and External
Recruitment Advantages Disadvantages
Internal More valid assessment of candidates Creates vacancies Reduces training time Can stifle politics diversity Faster Insufficient supply of candidates Cheaper Motivates current employees
External Increases diversity Expensive Facilitates growth Slower Can save training time Less valid data on candidates New/novel problem solving Stifles upward movement of personnel
Figure 5-11 Advantages and Disadvantages of Internal versus External Recruiting
Advantages and Disadvantages of Internal and External Recruiting
Internal recruiting is a high-performance work practice
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talent. Ted LeVino, senior vice president at GE, argues that its internal recruiting policy
has fostered stability and continuity in the managerial ranks of the company. Deloitte and
Accenture have policies in which newly hired college grads receive a career planning
guide that describes the typical timetable for progression within the company for the best
employees and steps to take in order to get there.
One of the great advantages of detailed work analysis is that succession planning pro- grams can be developed so that management (and employees) can have a good idea of the
sources for internal recruiting. At Ford, for example, associates complete a competency-
based job analysis describing their current knowledge and skills required for their present
job and what knowledge or skills they would like to acquire. These responses are then
linked to particular vacancies and jobs within the company, descriptions of which already
have been completed by managers of these positions.
Succession planning should involve first identifying key (or core) jobs within the orga-
nization. Next, assessments of current employees’ skills and interests should be done in or-
der to identify from three to five employees with the potential to occupy each of these key
positions down the road. The most effective succession planning programs include training
and development programs for these individuals. Such a program can be very motivating
for these high-potential employees and decrease the probability that they will look outside
the firm for employment. 39
There may be disadvantages to internal recruiting. Continuity is not always such a
good thing. If the organization has decided to change its business strategy, for example,
entrenched managers are probably not the “change masters” you want. One theory of in-
ternal recruiting is that it promulgates the old ways of doing things, that creative problem
solving may be hindered by the lack of “new blood” or a sort of “managerial inbreeding.”
However, there is no solid research that supports this belief that internal recruiting impedes
creativity and innovative thinking, and one recent study at a Fortune 500 company found
just the opposite. Creative and innovative solutions to problems within the company and
the industry were generated in a staffing exercise conducted by a consulting firm. Experts
from the consulting firm and the firm’s top management then rated the potentiality of the
solutions. Proposals from internal job candidates were judged to be more innovative by
both the outside firm and the top management. 40
One well-documented managerial blunder is to irrationally stay committed to an initial
course of action, particularly if you initiated the action. This misdirected persistence, or
escalation bias, is more likely when internal versus external recruiting is emphasized, especially if the internal candidates were personally involved in a particular course of
action. 41 For example, one U.S. company faced new competition to an established prod-
uct line from a foreign competitor. The senior managers, all of whom had been at the
company for at least 15 years and had great ownership in the product and how it was
marketed, agreed to deal with the new competition as they had always dealt with competi-
tion— by competing on price. This manner was unfortunately out of step with the upstart
competitor’s strategy, which included competing on price. The result was a disaster for
the company with over 30 percent of its workforce laid off because of a loss of market
share. A new manager might have been better able to conduct a more rational analysis of
the situation.
Entrenched managers sometimes have difficulty understanding that time and money al-
ready invested are “sunk costs” and should therefore not be considered in future planning.
Managers who had something to do with a present course of action seem to have more
difficulty in understanding this.
Some organizations complain of unit raiding where divisions may compete for the same people. GM, for example, reported raiding of the best design engineers from one divi-
sion by another despite an agreement that such recruiting was not in the best interests of
the company. Raiding is quite common in universities for clerical positions where position
descriptions can be written in such a way that a secretary can move to another department
because the new position pays more.
A third possible disadvantage of internal recruiting is that politics probably has a greater
impact on internal recruiting and selection than does external recruiting. Thus, while more
job-related information may be known about internal candidates, personnel decisions
Succession planning reduces turnover
Internal recruiting does not impede creativity
Escalation bias
Unit raiding
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involving internal candidates are more likely to be affected by the political agendas of
the decision makers and are also more likely to be contested legally than external staffing
decisions.
One survey of high-level federal government managers revealed that the easiest per-
ceived way to get rid of a troublesome employee was to evaluate that employee so posi-
tively that the employee would be more likely to get an employment opportunity out of
the unit (either within or outside of the same agency). The “Peter Principle” states that we rise to our level of incompetence. This survey found that, at least in the federal govern-
ment, once we reach our level of incompetence, our boss may actually try to get us moved
up a notch above our level of incompetence in order to get rid of us with the least amount of
trouble. In other words, things may be even worse than the “Peter Principle.” 42 HR manag-
ers must constantly monitor very precisely defined job descriptions or job specifications.
While this may constitute well-focused recruiting based on precisely what the organization
requires, it also can mean that a position has been “wired” for an internal candidate. An ef-
fective HR manager should be capable of making the distinction. The manager writing the
job description and job specifications should be required to stipulate why highly specific
credentials or areas of expertise are required in the context of the organization’s or unit’s
strategic plan.
Internal recruiting programs should be carefully integrated with other HR functions.
Effective HR succession planning, job analysis, personnel selection, and performance
appraisal are all important for an effective system that can fill required positions with the
most qualified personnel in the shortest amount of time. Administrators of such programs
should be knowledgeable about EEO law as numerous lawsuits have been filed related to
internal recruiting and placement decisions.
While most large companies have formal succession plans at the managerial level, a
much lower percentage of small- to medium-size firms have formal systems. 43 A job- posting system can enhance the effectiveness of internal recruiting. Job posting is a process where announcements of positions are made available to all current employees through
company newsletters, bulletin boards, and so on. When properly implemented, job-posting
systems can substantially improve the quality of the job placements that are made within
an organization and protect the organization from EEO problems. The most effective
job-posting systems take advantage of a corporate intranet where employees can access
information about job openings through their connected computers. Many sophisticated
human resource information systems (HRIS) are now available with competency-based,
succession planning data .
External recruiting concerns recruitment from outside the organization. Most scholars ar-
gue that one of the biggest advantages of external recruiting is that the approach can facili-
tate the introduction of new ideas and thinking into corporate decision making. The “new
blood” comes with no ownership of past strategies that can hinder an objective assessment
of future strategy. A major disadvantage of external recruiting is that the introduction of
new personnel may have a negative impact on work group cohesion and morale. Also, new
personnel from outside the organization typically take longer to learn the ropes of the job
and the organization. Another possible disadvantage is that external recruiting can be very
costly. For example, companies have paid in excess of $150,000 to executive search firms
for locating a single, high-level manager. Figure 5-12 presents some examples of ads for
professional and executive global positions.
The Internet has had a profound impact on the cost and the time involved in recruiting
personnel, including that of managers. Most Fortune 1000 companies now post available
jobs on their websites and more and more skilled employees are applying for these jobs
through these sites. A formal job posting system for both internal and external recruiting can
also give an employer some protection against legal claims based on simple “progression”
statistics (e.g., nonsupervisory positions vs. supervisory positions by race or gender) derived
from EEO-1 reports (see Chapter 3).
The final disadvantage of external recruiting is that you typically have less information
about external candidates. There is thus a need for good assessment procedures that can
“Peter Principle”
Job posting enhances inter- nal recruiting effectiveness
External Recruitment Sources
Most Fortune 1000 companies post available jobs
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Figure 5-12 Ads for Global Executive and Professional Positions
INTERNATIONAL PROFESSIONALS
In today’s dynamic global environment, there are exceptional opportunities for individuals whose experience and skills equip them to live and work overseas. There are currently positions available to men and women throughout a wide spectrum of professional fields, including the sciences, engineering, information and computer systems, economics/ finance, education, marketing, business, or management. If you have worked abroad in any of these areas, you have a definite advantage in securing an exciting new overseas career.
These worldwide positions are being offered to people who are already confident and at home in foreign locations. You must be self-reliant and have the integrity to work without direct supervision. Reporting will require excellent verbal and written communications skills, and you must be conversant in at least one foreign language. Advanced degrees are preferred; a bachelor’s degree in an appropriate area is a minimum requirement for consideration.
We represent international employers who will pay all fees associated with your selection process. They require that all applicants be U.S. citizens (Legal Permanent Residents also may apply). These positions are open to individuals of all racial and ethnic backgrounds. Compensation and benefits are commensurate with your demonstrated qualifications. For consideration under strict confidentiality, send your résumé and a letter describing your credentials. As we are a third party and not an employer, no phone calls from applicants will be accepted. We will respond only to those applicants who are of interest to our clients.
CAREER SYSTEMS INTERNATIONAL P.O. Box, Dept. IP- Philadelphia, PA 19103
Representing equal opportunity employers.
Manager-Expatriate Programs
Philips Electronics North America Corp., a global consumer and electronic business with a significant number of employees on worldwide expatriate assignments, has an excellent career opportunity in Manhattan for a pro-active professional with 5–8 years’ human resources expertise to design, develop, implement, and manage the expatriate program. This fundamental position will advise personnel on expatriate and immigration policies/procedures; develop worldwide compensation programs; implement program changes; and serve as an international liaison.
To qualify, you must have 4+ years’ immigration/ expatriate and supervisory experience, plus a B.A. in business, human resources, or related discipline is highly beneficial. Top-notch organizational, technical, business, interpersonal, and communication skills are essential.
We offer a competitive salary/benefits package and a stimulating work environment. For confidential consideration, please send résumé to:
Human Resources/JM, Philips Electronics North America Corp., 100 East 42nd Street, New York, NY 10017. FAX: EOE M/F/D/V. Principals only.
PHILIPS
be used instead of reliable performance data on the external candidate. Good assessment
procedures can be costly and bad assessment procedures and references can be downright
deceptive or ineffective. Remember the survey of federal managers regarding using posi-
tive evaluations to get rid of incompetent employees. Inflated letters of recommendation or
confidential interviews may be intended to land a troublesome employee in a job outside
of the organization.
There are several methods available for external recruitment.
Walk-ins/Unsolicited Applicant Files: The most common and least expensive approach is to make use of direct applications where job seekers submit unsolicited material (e.g., a
résumé) or simply show up in person seeking employment. Direct applications can provide
a pool of potential employees to meet future needs. While direct applications are particu-
larly effective in filling entry-level and unskilled positions, some organizations, because of
their reputations or because of their geographical locations, succeed in compiling excellent
pools of potential employees from direct applications for skilled positions.
The Riley Guide ( www.rileyguide.com ) presents an excellent overview for online re- cruiters with links to most major job banks and specialty job sites. Careerbuilder.com is an
effective online source for small business. For $450, a company can post one position and
access, so the website claims, 25 million “candidates.”
The reputation of the company has a great deal to do with the usefulness and size of
the pool of unsolicited applicants and résumés. Organizations such as Google, Coca-Cola,
What Methods Are Available for External Recruiting?
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Apple, Facebook, SAS, GE, IBM, the New York Times, and Harvard University receive thousands of unsolicited applications every year. Many excellent candidates can be found
in this pool. One of the reasons that companies actively campaign to make one or more of
the many top 10 lists of the “best companies to work for” is because the rate of unsolicited
résumés is directly related to this honor.
Not only do unsolicited résumés reduce the cost of recruiting, they also increase the
probability of hiring the very best employees. The New York Times has led the world in Pulitzer Prize winners for years. It spends very little time recruiting the future Pulitizer
winner, since some of the best writers just know where to work.
Many companies now scan résumés or applications and then conduct key-word computer
searches to quickly get to a reasonable short list of candidates when positions become available.
Software now exists to match fairly detailed job specifications with résumé information. The
result is usually a much more efficient (and faster) recruiting effort. Monster’s “TARGET
Reach” filters résumés by a company’s criteria (e.g., experience, location, education).
Referrals: Some organizations have formal systems of employee referral for occupations with great demand. Pratt & Whitney, for example, pays employees a $2,000 bonus if
electrical engineers who are referred are ultimately hired and work for the company for
at least 1 year. While formal systems of referral are more effective in attracting interested
applicants, there is also some evidence that the quality of the applicants is less than that
which results from an informal system of referrals. Microsoft is presently offering referral
incentives to its employees for Internet experts of all shapes and sizes.
Referrals by friends and family have been found to increase job tenure (and decrease
voluntary job turnover) even for jobs with high turnover rates. The “referred” job can-
didates tend to have a more realistic understanding of the job when they take it and thus
have more accurate expectations about the job and the organization. But before we get
too excited about an employee referral program, let’s not forget about Abercrombie and
Fitch. A&F encouraged its mostly beautiful but also mostly white sales staff to recruit its
beautiful customers and friends to become sales personnel. The result was a Title VII race
discrimination lawsuit that A&F settled for $40 million.
The extensive use of employee referrals can thus cause EEO problems. In EEOC v. Detroit Edison, the court concluded that “the practice of relying on referrals by a predomi- nantly white workforce rather than seeking new employees in the marketplace for jobs was
discriminatory.” 44 Of course, this may not be a problem if the workforce is diverse to begin
with, if the organization relies on other methods of recruiting as well, or if the organization
offers a referral program that specifically targets minorities and women. Coca-Cola and
Disney are among the many large corporations that offer targeted referral programs, another
of the recommendations from the OFCCP Revised Order #4. Coca-Cola agreed to target
African Americans in recruiting as a part of its out-of-court race discrimination settlement.
Advertising: A third common method for recruiting is advertising. Advertising can range from a simple classified ad to an elaborate media campaign through radio or television to
attract applicants. The approach can be quite versatile in its ability to provide information
about job opportunities while targeting specific labor markets in particular geographical
areas. While the majority of advertising is in newspapers, many organizations go beyond the
typical newspaper ads for tight labor markets. You have undoubtedly seen one of the com-
mercials extolling the virtues of “starting your career” in our armed forces. Many companies
use television to attract applicants for hard-to-fill positions. Many budgets for classified
print ads have been cut because of the Internet. Diane Schlageter, director of employment
for Adobe Systems in San Jose, says that Adobe has dropped its ad budget by 60 to 70 per-
cent in favor of Internet. “A half-page ad in the San Jose Mercury News may be $15,000 to $18,000. You can do a lot of stuff online for that amount of money,” says Schlageter. 45
As discussed below, employer advertising on the web is now the norm.
Most experts agree that advertising through any media (including the Internet) should
contain the following information:
1. The job content (primary tasks and responsibilities).
2. A realistic description of working conditions, particularly if they are unusual.
EEOC v. Detroit Edison
Software is available to match job specifications with résumés
Referrals by friends and family can increase tenure
Employer advertising on the web is now the norm
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3. The location of the job.
4. The compensation, including the fringe benefits.
5. Job specifications (e.g., education, experience).
6. To whom one applies. 46
Since advertising can be very expensive, record keeping (and yield ratios) on the suc-
cesses of the various media sources can help to identify the approaches with the biggest
potential payoff for future recruiting. Figure 5-13 presents a summary of some of the
advantages and disadvantages of the various media options. A section to follow examines
online recruiting in particular.
EEO considerations are also critical for advertising. A men’s clothing retailer decided
to target younger men with its new fall line. As part of that effort, the retailer advertised
for “young, energetic” assistant managers at the same time it was firing a 48-year-old man
who had been with the company for 10 years. An ADEA lawsuit resulted in an out-of-court
settlement in excess of $100,000. Obviously, a person knowledgeable about EEO laws
should review all ad copy for potential legal problems.
There are several excellent outlets for targeted advertising to minorities and women.
Monster.com allows job seekers to search for positions using diversity organizations as a
search criterion (see http://diversity.monster.com ). Most highly regarded African Ameri-
can universities have websites that post résumés of new graduates.
Employment Agencies: Employment agencies are used by many companies for identifying potential workers. There are publicly funded agencies that provide free placement services
and private agencies that charge either the employee or the employer for a placement or re-
ferral. The major functions of these agencies are to increase the pool of possible applicants
and to do preliminary screening. Private agencies are most effective when (1) the organiza-
tion has had difficulty in building a pool of qualified applicants, (2) the organization is not
equipped to develop a sophisticated recruitment effort, (3) there is a need to fill a position
quickly, (4) the organization is explicitly recruiting minorities or females, and (5) the or-
ganization is attempting to recruit individuals who are not actively seeking employment. 47
There are about 2,000 federally funded but state-run employment agencies under the
U.S. Training and Employment Service (USTES) . All persons drawing unemployment
Medium Advantages Disadvantages
E-Recruiting Global reach Many unmotivated applicants Excellent yield ratios Fast processing EEO/Diversity problems Relatively inexpensive Not effective for low-skilled jobs Appeals to Millennials Technologically savvy More detail about job Can be adapted for Screening/ RJPs
Newspapers/Magazines Local audience Often ignored/not seen Tailored to audience Expensive (per applicant) Specialty outlets Long lead time (Usually) Good circulation Good yield ratios for low-skilled jobs
Direct Mail Can be well targeted with good list Expensive (for better mailing lists) Can attract people not seeking a job Long lead time Television/Radio Targeted locally Very expensive More attention to ad Longest lead time
Figure 5-13 Advantages and Disadvantages of Recruitment Media
Targeted advertising to minorities and women
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compensation must apply through one of these agencies. The most recent approach to job
placement is to attempt a matching of applicants’ aptitudes and interests with the require-
ments of the job. In general, neither employers nor employees are satisfied with the service
that is offered, but efforts are being made to improve the service. 48
Search Firms: Search firms are private companies that help employers find and hire employees. These firms used to specialize in executive recruiting and placement, but there are now many
specialized firms for specific occupations (e.g., IT, nursing, psychologists) and full-service
companies that handle all aspects of recruiting. A growing number of companies now use em- ployment process outsourcing (EPO), also known as recruitment process outsourcing (RPO). These are search and recruiting firms that can handle all or a part of a company’s recruiting.
EPOs are the fourth-largest component of HR being outsourced and the fastest grow-
ing, according to Allan Schweyer, executive director of the Human Capital Institute (HCI).
InSearch Worldwide Corp. surveyed 300 HR executives about professional-level EPO
and found that more than 30 percent of companies are doing at least some recruitment
outsourcing.
In selecting a search firm, experts recommend the following criteria. 49
1. The firm should recruit in a specific industry.
2. The firm pays its sales personnel based on the completion of an assignment.
3. The firm uses primary data sources rather than secondary sources such as com-
puterized lists of potential candidates and association directories.
4. Firms that also do outplacement services are not recommended (outplacement
is professional services for terminated employees that may include placement in
another job). Many socially responsible organizations are turning to outplacement
programs to assist terminated employees, especially after major downsizing actions.
5. Ensure that the firm provides a placement guarantee, typically 30, 60, or 90 days.
This gives the organization a specified amount of time to review the employee on
the job and receive a refund if a candidate’s skills do not meet the requirements
of the organization.
6. The firm should also have a recruitment strategy in writing. You would not allow
a contractor to build your house without a blueprint, so why would you allow a
search firm to staff your organization without a specific plan? This defined pro-
cess also ties back to your placement guarantee.
7. The firm should not charge a fee to candidates. Charging a fee to candidates lim-
its the number of qualified candidates the search firm can draw on, thereby dra-
matically limiting the pool of qualified candidates.
8. The firm should be able to provide references from both clients and candidates
who have used its services in the past.
Many search firms now specialize in “targeted” recruiting for many jobs. 50 Recruit- ment in a specific industry helps ensure that the search firm understands the specific needs
of the organization and industry, thereby increasing the probability that the candidate
placement will be a success. One of the largest firms is DHR International, which for one
fee provides a list of candidates whose credentials match job specifications and, for an ad-
ditional fee, completes the search process.
A good source for identifying a qualified search firm is Recruiterlink.com. This website
helps managers who are responsible for identifying qualified search firms that specialize
in over 50 areas, such as CEO search, financial services, consumer products, informa-
tion technology, marketing, and telecommunications. Recruiterlink.com has a database
of over 400 executive headhunters, from some of the largest firms such as Korn/Ferry to
so-called boutique recruiters. These recruiters specialize in jobs starting at annual salaries
of $125,000. Recruiters pay a $500-a-year fee to be included in the database.
At this website, an organization’s representative identifies a specialty area, provides
geographic specifications (including international), the average salary handled, and other
criteria. A list of potential recruiters is then provided with fees and recent experiences/
assignments. This is all free to the “searcher” of the search firm.
Targeted recruiting
EPOs are a major outsourced component of HR
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In addition to negotiating fees, many organizations are developing partnerships with
a select group of search firms, known as preferred vendors. The goal of the preferred
vendor relationship is that the search firm is better able to match candidates not only on
job specifications but also on fit to the organization’s culture. In addition, the partnership
allows organizations to maintain control over how the organization’s open positions are
marketed since the search firm has intimate knowledge of the company. The partnership
relationship is often mutually beneficial to both parties since the company receives highly
qualified candidates and the recruiter has inside knowledge of the “unwritten” needs of the
organization. The fees for search firms can be very high with estimates ranging from 20 to
50 percent of the first-year salaries of the individuals placed.
The reviews on the effectiveness of search firms are mixed. According to one review,
50 percent of the fulfilled job searches take twice as long to fill as promised. Less than
50 percent of contracts to fill positions are ever fulfilled. 51 More search firms are now
charging a flat rate rather than a percentage of salary. Says one recruiter, “By charging a
flat rate, we are able to remain objective in presenting candidates to the client. We do not
show only the high-priced candidates; we show the most qualified.” Many companies now
demand the flat-fee approach because of the tendency of percentage-based recruiters to
recommend high-priced candidates. A sliding scale fee structure can be negotiated so that
as the total number of placements increases, the fee percentage decreases.
Campus Visits: One major source of recruiting for professional and managerial posi- tions is the college campus. Many large organizations send recruiters to campuses once
or twice a year to inform graduates and future graduates about career opportunities. One
survey found that 59 percent of all managers and professionals with less than 3 years’
experience were hired through college recruiting. 52 There is no question that college
recruiting is successful at filling vacancies. There is a question as to the extent to which
the vacancies are filled with people most likely to be successful within the organization.
Some companies report turnover rates in excess of 50 percent for new college graduates
after only 1 year.
The cost of college recruiting can be high. Estimates are as high as $6,000 per hired
graduate. 53 Despite this substantial cost, program evaluation is rarely done and little
attention is placed on recruiting processes. When evaluation has been done, the criterion
for evaluation was simply filled vacancies or number of offers accepted rather than a mea-
sure of the quality of those who are recruited or retention rates. Recruiters often receive
little guidance on interviewing procedures, despite evidence that the interviewing format is
important for the accuracy of the predictions that are made.
The recruiting process should commence long before there are any visits to the cam-
pus. Recruiters should get familiar with the university and university personnel before
their visit. Job descriptions and specifications should be mailed to the campus before the
recruiter arrives.
Another good strategy is to set up internship programs through the university. In gen-
eral, the most effective college recruiting efforts are those that facilitate a long-term rela-
tionship with the college through a variety of cooperative programs between the school and
the organization. Again, record keeping on past experience will be very helpful in planning
future campus recruiting. Campus.monster.com and internshipprogram.com are great sources for internships. Both sites help students locate internships by geography, industry,
and salary.
Growing in popularity today is the use of videoconferencing at college campuses. This
allows for interviewing that is much more cost effective than traditional face-to-face inter-
viewing. The extent to which videoconferencing is an effective approach to recruiting is
another empirical question. There is now a need to compare the effects (and costs) of cam-
pus visits with recruiting (and interviewing) through the Internet. Most college students or
graduates may not be adversely affected by highly efficient, computerized recruiting and
interviewing and some may actually prefer it. 54
One of the largest recruiters of college graduates is the federal government. Research
on the ability of the government to attract the most qualified graduates is not encourag-
ing. One survey found only 38 percent of graduates interested in careers with the federal
government. The private sector was viewed as offering more prestige and power than
College recruiting costs are high
Research on effectiveness of search firms is mixed
Campus.monster.com and internshipprogram.com are great sources for internships
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the public sector. 55 The research also indicated that the government could do a better job
recruiting graduates by more on-campus visits and greater effort at reducing its negative
public image. If anything, the public image has actually gotten worse in recent years.
Two other sources for recruiting that should be mentioned are professional associations
and computerized services. The first is professional societies or associations within special-
ized areas. College faculty for management departments, for example, are often recruited
through the Academy of Management ( www.aomonline.org ) and other academic associations
(e.g., www.nea.org, www.chronicle.com). The Society of Human Resource Management
now has a placement service available for jobs in all areas of HR (SHRM.org).
Newly minted MBAs and companies seeking project-related help should consult
mbaglobalnet.com. As of 2011, this site charged the employer to post a job for 60 days on the career center. The site then e-mails members new jobs every Tuesday. In addition, the
site provides a project worker hiring service and charges 15 percent of the contract. MBAs
register on the site for free.
Electronic recruiting (or E-recruiting) is a recruiting component for virtually all large U.S.
companies. There is no doubt that E-recruiting can reduce costs and result in a larger number
of applicants (and faster). Yield ratios are clearly superior with this approach. 56 Electronic job
descriptions and résumés are now retrievable from numerous recruitment websites. The big
three sites are Monster.com, careerBuilder.com, and Yahoo Hot Jobs.com, but there are an estimated 5,000 job boards on the web. Figure 5-14 presents a list of some of the major
sites and the costs to the employer. Of course, Craigslist.org is free to all (and quite effective).
The most popular job site is Monster.com, which claims to have more than 500,000 jobs
in its databank. Forbes magazine named Monster the best job hunting site on the web based on its design, navigation, content, speed, and customization. As of May 2011, Monster had
Electronic Recruiting on the World Wide Web
(continued)
Figure 5-14 Recruitment Web Site Comparisons
Web Sites Search Options Job Search Database Ease of Use for Searcher
Costs for One- Time Posting Employer Benefits
Monster.com Location Industry/ Job Keyword Employer
Position/Title — click and view job description Company —search by company name to see all job postings Posted date —sorted by most recent; can limit date range Salary —not searchable; must click job description to view
• Site easy to use • Can search by
company from basic search
1 job/60 days/ $385 on average (differs by state)
• Online database search
• Track statistics of each job posting
• Search agents (automatically generated list of potential candidates)
• International postings available
• Company profiles • Diversity section • Likely one of the
most recognized job boards by job seekers
Hotjobs.yahoo.com Location Industry/ Job Keyword Employer
Position/Title — click and view job description Company —click and view all job postings from specific company Posted date —sorted by most recent; can limit date range Salary —searchable in advanced search; must click job description to view
• Site easy to use • Can search by
company; requires change in search option
• Search by industry/ job was easy to use since further specified state and city
1 job/30 days/ $349
• Online database search
• Unlimited job posting changes permitted
• Track statistics on each job posting
• E-mail potential candidates
• Jobs can be posted in U.S. and Canada
• Company profile
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Careerbuilder.com Location Industry/ Job Keyword Employer
Position/Title — click and view job description Company —click and view all job postings (must conduct a search first) Posted date —sorted by most recent; can limit date range Salary —searchable in advanced search; listed on search results page
• Site easy to use • Can search by
company; requires change in search option
• Site moderately easy to navigate
• Cannot search for positions from home page
1 job/30 days/ $419
• Online database search
• Additional services such as prescreened candidates, background checks, career fairs
• International postings available
• Company profile
Employmentguide.com Location Industry/ Job Keyword Employer
Position/Title —click and view position Company —click and view all positions by employer (sorted alphabetically) Posted date —sorted by most recent; cannot limit date Salary —not searchable or provided separately
• Site moderately easy to navigate
• Cannot search for positions from home page
1 job/30 days/ $350
• Online database search
• Entry level to middle management positions (hourly and nonexempt positions)
Careerjournal.com Location Industry/ Job Keyword Employer
Position/Title —click and view position Company —click and view all job postings Posted date —sorted by most recent; cannot limit date Salary —not searchable or provided separately
• Site moderately easy to navigate
• Cannot search for positions from home page
1 job/30 days/ $325
• Online database search (300,000+ résumés)
• Diversity career fairs
• Brief company overview (Briefing Book)
• Partnership with 150+ media sources so positions are posted to additional sites
• International job postings
Flipdog.com Location Industry/ Job Keyword Employer
Position/Title —click and view position Company —click and view all job postings Posted date —sorted by most recent; cannot limit date Salary —does not include a separate section listing salary
• Site moderately easy to navigate
• Advanced search method is interactive and may be confusing for novice job board users
1 job/30 days/ $125
• Online database search
• International job postings
Idealist.org Location Sector/ Job Keyword
Position/Title — click and view job description Organization —click and view all positions by employer (once original search has been completed) Posted date —sorted by most recent Salary —not searchable but is listed in the search results
• Site easy to navigate
Free • Online database search
• International postings
• Non-profiles provided
Source: Contributed by Renee Bartlett.
Figure 5-14 (Continued) C
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over 80 million searchable résumés with an average of 27,000 résumés being added daily
and over 1.9 million job postings. Job seekers conduct over 4 million job searches daily at Monster. There are many niche sites on the web too. Computer-related specialists should
check out techies.com or dice.com. There are specialty sites for doctors, pharmacists, toxi-
cologists, and even highly paid executives (check out The Ladders.com). Those seeking
nonprofit work should check out Idealist.org.
Nearly 100 percent of global 500 companies are now posting jobs on their own web-
sites. Some companies accept only online applications. When Hewlett-Packard (HP) was
looking for an engineer with specific programming skills and 5 years’ experience who
could speak Spanish, the software screened the résumés and identified three applicants
who met these specifications. While the efficiency of this approach should be obvious,
some problems with the software as it reads the résumés can create errors in the search and
eliminate applicants who otherwise would have survived at least the initial screening. For
example, if you misspell a key word, you could be out of luck.
Excellent software tracking is now available. Resumix Inc., for example, contains 10 million terms related to various industries, including terms such as application design and general ledger for specialized programmer and accounting applications. Some com- panies report substantial savings in recruiting and advertising due to this type of software
tracking system. HP claims to have over 330,000 résumés in its database. Needless to say,
it avoids a paperwork nightmare with the “virtual recruiter” system. HP recently received
over 100,000 résumés in the staffing of 1,400 new hires.
Recruiting in the very near future may go something like the following for many large
companies.
1. A line manager completes a standardized online job analysis questionnaire iden-
tifying employment needs for the unit; the questionnaire may include job location
and other details of the job in addition to the critical job specifications.
2. The completed questionnaire is then automatically converted into a job posting on
the Internet and matched with a current database of “candidates” whose creden-
tials are entered using the same terminology as the job analysis.
3. A list of candidates is identified based on the match of job specifications with job
credentials and data related to job/work compatibility.
4. Almost instantaneously, the line manager has a list of minimally qualified candi-
dates with whom she/he can interact.
5. A testing and interview format (with job-related questions), in compliance with all
EEO guidelines, is derived from the same job analysis information completed in
step 1.
6. Using the testing/interview material, additional data are collected on the
candidates through e-mail and/or web camera and a list of top candidates
is compiled.
Note that the word candidates is used first rather than applicants because résumés of qualified persons may be retrieved from web databases and personnel websites and these
potential candidates may or may not be interested in a particular job opportunity. They are
simply alerted to the new job and then decide whether they wish to become applicants.
A hot HR position today is “Internet” or “cyber” recruiter. These folks are specialists in
locating and placing people off job websites. Many also coordinate all web recruiting
activities for companies. There are already 20,000 members of the Association of Internet Recruiters (see Recruitersnetwork. com). One of these cyber recruiters boasts that he can access the résumé of every IBM employee.
It is clear that the Internet has great potential for expediting the recruiting process. The
preceding scenario should be contrasted with the more traditional methods of recruiting we
have described. Of course, the Internet approach depends on potential job applicants being
aware of this convenient method and amenable to the process. A great place to start for
both employers and job seekers is the Riley Guide, which provides loads of free informa- tion and links to numerous recruitment sites.
Streamlined recruiting / selection
“Virtual” Recruiter system
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A great website for college students is www.campus.monster.com . The site has intern- ships, résumé services, and job listings for students and partnerships with over 1,000 uni-
versities. Monster’s site is a comprehensive source for first-time job seekers with excellent
information on valuable internships.
A concern for organizations is reaching “diversity” candidates online. The digital di-
vide between white users and minorities has been a concern of many HR practitioners.
However, there is evidence that the differences in Internet access are closing fast. Accord-
ing to the Pew Internet & American Life Project, 75 percent of whites have access to the
Internet, while 64 percent of African Americans and 68 percent of Hispanics have Internet
access. Also, the yearly Internet adoption rate is growing rapidly in African American and
Hispanic households. 57
There have been few studies that have compared the effects of different methods for re-
cruitment. The criteria that have been used in these studies also differ and include cost
per hire, number of résumés, time lapse from recruiting to filling the vacancy, interview/
invitation ratio, applicant performance on the job, and job tenure or turnover. One critical
question is obviously how people are findings jobs these days.
A study (conducted by an Internet consulting firm) found that, on average, the larg-
est sources of new employees were first linked to the hiring organization through (in this
order)
1. Online job boards.
2. Staffing and executive search firms.
3. Tips from friends and family members.
4. Networking in a business context.
5. Career/job fairs.
6. Newspapers.
Of course, this order does differ as a function of the particular industry, the particular
company, and the particular job. In general, the preceding are the best sources for effective
recruiting from the perspective of the job seeker. What are the worst?
According to one survey of 11,500 Americans seeking employment, here are the top
five least helpful sources for employment opportunities.
1. Networking at a social event (least effective).
2. Answering an ad in a publication of a professional association.
3. Using a social networking site.
4. Sending a résumé directly to an employer.
5. Responding to a notice posted in a store. 58
A recent emphasis also has been placed on understanding minority hiring patterns as
a function of the recruiting effort and relative to population statistics and census data on
potential employees. These comparisons may be critical if EEO litigation is pending.
The EEOC has stated that the definition of an “applicant” depends on the user’s re-
cruitment and selection procedures. The concept of an applicant is that of a person who
has indicated an interest in being considered for hiring, promotion, or other employment
opportunities. This interest might be expressed by completing an application form; or
might be expressed orally, depending on the employer’s practice; or through the Internet
and related electronic technologies only. According to the EEOC, in order for an individ-
ual to be an applicant in the context of the Internet and related electronic data-processing
technologies, the following must have occurred: (1) the employer has acted to fill a
particular position; (2) the individual has followed the employer’s standard procedures
for submitting applications; and (3) the individual has indicated an interest in the
particular position.
Figure 5-15 presents a list of some of the most important criteria that are used to evalu-
ate different approaches to recruiting and the extent to which companies collect such data.
What Methods of Recruiting Are Most Effective?
The largest recruiting sources for new employees
Least helpful sources for employment opportunities
EEOC definition of an “applicant”
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One excellent study emphasizes the importance of “attraction outcomes” as a recruit-
ment outcome that should be emphasized when evaluating recruitment practices. Attrac-
tion outcomes emphasize (and measure) the quality of the applicant pool as a function of
the recruitment source. The authors argue that “adopting methods for evaluating attraction
outcomes may be the single most valuable step organizations can take toward improving
recruitment effectiveness.” 59 They emphasize a more systematic measurement process that
includes yield ratios and other detail on the methods used to screen candidates. Figure 5-16
Attraction outcomes
Figure 5-16 Assessing Attraction Outcomes:
A STEP-BY-STEP OVERVIEW
STEP 1: IDENTIFY POSITIONS TO ASSESS Description: Organizations may choose not to develop scores to evaluate recruitment outcomes for all positions. Those positions where assessment of attraction outcomes is likely to be of greatest value are jobs that generate several new hires and attract large numbers of applicants. Calculate yield ratios for each recruitment source.
STEP 2: IDENTIFY CURRENT SCREENING METHOD AND DETERMINE CURRENT PROPERTIES Description: Organizations need to identify the current selection methods used at each step in the recruitment process.
STEP 3: DETERMINE STRATEGY FOR ADAPTING CURRENT SCREENING METHOD TO PRODUCE SCORES FOR EACH APPLICANT AND ADAPT CHANGES Description: Depending on what screening method is currently used, the amount of deviation between current recommended practices and the development of comparable scores for each candidate should be determined.
STEP 4: ASSESS ATTRACTION OUTCOMES Description: Assess each applicant using the device developed in Step 3. Scores for all applicants in the applicant pool should be evaluated, including those that have left the pool by withdrawing themselves from consideration or because they were hired during the appropriate time period (defined by the organization).
STEP 5: MATCH RECRUITMENT ACTIVITIES TO RECRUITMENT PHASES AND ESTIMATE RECRUITMENT COSTS Description: In order to evaluate the cost effectiveness of various recruitment practices, recruitment costs must be identified and mapped to the appropriate phase of recruitment (i.e., attraction, status maintenance, gaining job acceptance). Estimate costs of attraction by identifying all activities primarily designed to influence the attraction of applicants to this position.
STEP 6: ESTIMATE INPUT VALUES AND COMPLETE UTILITY ESTIMATES (THIS IS REQUIRED TO COMPLETE EVALUATIONS THAT INCORPO- RATE BOTH COST AND BENEFIT CONSIDERATIONS) Description: To be able to use utility analysis to convert differences in quality scores to dollars, several values need to be estimated. These include the validity of screening devices, the standard deviation of performance in dollars for the job in question, the number of individuals to be selected or the subset of candidates to be evaluated, and the average expected tenure of candidates in their positions once hired.
STEP 7: EVALUATE THE ADEQUACY OF CURRENT SCREENING DEVICES Description: Organizations may decide that alternative screening devices may be more appropriate due to their cost, validity, adverse impact rate, or other properties of the scores they generate.
Source: Adapted from K. D. Carlson, M. L. Connerley, and R. L. Mecham, “Recruitment Evaluation: The Case for Assessing the Quality of Applicants Attracted,” Personnel Psychology 55 (2002), pp. 461–490.
Time to fill 82%
Retention rates
Turnover rates
Cost per hire
Number of applicants generated
EEO/diversity impact
Total cost of recruiting
62%
57%
58%
66%
Job performance of new hires after specified period of time 35%
52%
54%
Most Frequently Used Measures for Evaluating Recruiting Program Effectiveness
Source: H. J. Bernardin, “A Survey of SHRM Member Recruiting Practices and Criteria for Evaluation,” 2012. Manuscript under review.
Figure 5-15 Criteria for Evaluating Recruitment Activities and the Extent to Which They Are Measured
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presents their seven-step plan for assessing attraction outcomes.Their plan includes estimates
of the economic yield or utility from each source. Yield ratios are important but there should
be close scrutiny of the criteria used to qualify candidates from one recruitment step to the
next. Obviously, a recruitment source that yields a high proportion of “qualified” candidates
is important but a more fine-tuned analysis will provide more useful definitions of “qualified”
that include comparative “scores” on these qualified candidates.
Unfortunately, there is little systematic research on the effects of recruiting options using
any of these criteria. Despite calls for systematic research on the effects of various ap-
proaches to recruiting, using yield ratios and performance-based criteria, few companies
have strategic measurement criteria for evaluating recruitment and recruitment sources.
One survey found that only 53 percent of companies even had a formal system for
evaluating their recruiting. Only 35 percent look at the job performance of new hires rela-
tive to recruitment source. Only 52 percent evaluate recruiting sources in terms of EEO or
diversity issues. Obviously, the tracking of such vital criteria is essential in determining the
relative effectiveness of the various recruiting options.
In general, the limited comparative studies on recruitment methods suggest that the
more informal methods (e.g., walk-ins, referrals) are more likely to lead to longer job
tenure than the more formal sources, such as newspaper ads. The Internet now exceeds
newspaper ads in generating a large number of applicants for a position compared to the
other methods. Another study found that people who had worked for the organization
earlier had superior performance records, longer job tenure, and better attendance. There
is also evidence that recruiting Generation Y job candidates requires emphasis on unique
strategies that can increase success. 60
Many problems in recruiting may be a consequence of the way in which recruiters are
rewarded. You may recall the army recruiting scandals. One recruiter in Colorado, working
under a specific “head count” quota, produced a “Faith Hill High School” diploma for a
dropout who was actually not eligible. Research has shown that those criteria that pertain
to direct costs of recruiting to the organization are the ones on which recruiters are typically
evaluated. 61
For example, recruiters for a large manufacturing company in the South are compen-
sated in relation to a “cost per hire” measure or what one staff member refers to as the
“warm body” phenomenon. This emphasis on cost figures may explain the general lack
of systematic research relating recruiting methods to higher-level criteria such as work
quality. In the context of affirmative action, those persons assigned to meet specific EEO
goals or timetables often are evaluated on the extent to which they meet the goals or time-
tables and not the extent to which the positions have been filled with qualified personnel or
whether those individuals are successfully retained. The conflicting incentives of recruiters
and line management can cause problems when the time comes to make job offers.
The effectiveness of the various methods of recruiting also has been shown to vary as a
function of particular method characteristics. In general, research allows us to construct an
ideal recruiter: strong interpersonal skills, extensive knowledge of the organization, and en-
thusiasm for the organization, the job, and the candidates. College recruiting is apparently en-
hanced when the recruiter is between the ages of 30 and 55, is perceived to have stature in the
company (line managers are preferred to professional recruiters), and is verbally fluent with
good interpersonal skills and an extensive knowledge of the company and the particular job. 62
The success of any recruiting effort, however, is more dependent on the job (and offer) charac-
teristics themselves. College students place the greatest weight on pay, fringe benefits, and the
type of work. Recruiters often underestimate the importance of such factors relative to others. 63
Figure 5-17 presents a summary of the latest research findings on recruitment and prac-
tical applications. Figure 5-18 summarizes the sparse research on recruiting the Millennial
generation.
Despite its great potential, E-recruiting is not necessarily a panacea for all organizations and all jobs. The track record to date is not all that impressive. 64 One CEO of a marketing
development company said, “Unless you’re looking for programmers in some cutting-edge
technology, you’re kind of out of luck.”
The Discrepancy between Research and Practice
Tracking vital criteria is essential in recruiting
More informal methods more likely to improve job tenure
The ideal recruiter
What Are the Effects of E-Recruiting?
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Figure 5-17 Recruitment Research and Practical Applications
Research Findings Practical Applications
Recruitment sources affect the characteristics of applicants attracted.
Use sources such as referrals (e.g., from current employees) that yield applicants less prone to turnover and more likely to be better performers.
Recruitment materials have a more positive impact if they contain more specific information.
Provide applicants with information on aspects of the job that are important to them, such as salary, location, and diversity.
Organizational image influences applicants’ initial reactions to employers.
Ensure all communications regarding an organization provide a positive message regarding the corporate image and the attractiveness of the organization as a place to work.
Applicants with a greater number of job opportunities are more attentive to and more influenced by early recruitment activities than those with fewer opportunities (i.e., less marketable individuals).
Ensure initial recruitment activities (e.g., Web site, brochure, on-campus recruiting) are as attractive to candidates as later activities.
Recruiter demographics have a relatively small effect on applicants’ attraction to the organization.
Worry less about matching recruiter/applicant demographics and more about the content of recruiting messages and the organization’s overall image in terms of diversity.
Realistic job previews (e.g., brochures, videos, group discussions that highlight both the advantages and the disadvantages of the job) reduce subsequent turnover.
Provide applicants with a realistic picture of the job and organization, not just the positives.
Applicants will infer job and organizational information based on the organizational image projected and their early interactions with the organization if the information is not clearly provided by the organization.
Provide clear, specific, and complete information in recruitment materials so that applicants do not make erroneous inferences about the nature of the job or the organization as an employer.
Recruiter warmth has a large and positive effect on applicants’ decisions to accept a job.
Individuals who have contact with applicants should be chosen for their interpersonal skills.
Applicants’ beliefs in a “good fit” between their values and the organization’s influence their job-choice decisions.
Provide applicants with accurate information about what the organization is like so that they can make accurate fit assessments.
Source: Adapted from A. M. Ryan and N. T. Tippins, “Attracting and Selecting: What Psychological Research Tells Us,” Human Resource Management 43 (2004), p. 311. Reprinted with permission of John Wiley & Sons.
Figure 5-18 Strategies for Recruiting the Millennials
1. Put More Emphasis on Employee Referrals
While this strategy works for all generations, some headhunters argue that Yers are particularly deferential to company referrals. Millennials are active internal recruiters because they like an active role in picking their peers.
2. Offer Job Internships and Job Tryouts
Paid summer internships (often between junior and senior years of college) are becoming more common. The interns are given many work sample tryouts. Says one prominent headhunter, “The key to retaining young guns is to give them different opportu- nities throughout the business.”
3. “TLK 2 Them”
Millennials are impressed with and attracted to companies with “high tech” recruitment. Electronic communications (videos about the organization, executive blogs) are important elements of recruitment and more valued by the Millennials.
4. Offer Flexible Work Arrangements
Options such as telecommuting or remote working arrangements are more valued by this generation as they tend to question why actual “face” time is really necessary when Internet-based communication is more efficient and, as one Yer put it, “I can do it in my underwear without spending time or gas money.”
5. Offer Sabbaticals and Time Off for Community/Volunteer Service
Millennials are more attracted to “green” companies and jobs that offer time off for community service and volunteer work. They are more attracted to companies regarded as “socially responsible.”
6. Offer Pay Packages with More Pay at Risk and a Closer Link with Performance and Productivity
Millennials like a closer link between their work products and their pay through pay-for-performance systems. In some segments (e.g., technology), they particularly like stock options as a part of the pay package.
While others would certainly disagree with such a sweeping conclusion, there is limited
empirical evidence showing web-based recruiting to be superior to other recruiting options
for the most important criteria for assessing the recruitment effort.
The Internet will certainly give you a lot of résumés and fast. But whether the Inter-
net facilitates the faster hiring of better people at relatively lower cost has not yet been
Track record on e-recruiting not that impressive
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determined except with isolated case studies, usually involving technological jobs. Darlene
Chapin, recruiting director for Cheetah Technologies in Florida, claims Internet recruiting
for programmers has made the process much more efficient. Research supports this view. 65
One of the major problems reported with Internet recruiting is the volume of résu-
més received, the so-called résumé overload. Many recruiters simply download all the
“applications.” While this type of recruiting will surely get you more applications and
faster, the process can be quite inefficient without a strategy for classifying, rating, or
ranking résumés based on a matching process between job specifications and candidates’
KASOCs or competencies.
More companies are now using online structured approaches to screening that require
applicants to submit biographical information according to a specific format. The format al-
lows for an automatic “scoring” of biographical and other information and thus a classifica-
tion scheme for candidates. This “artificial intelligence” approach allows for greater control
over information gathering and storage and has the potential for better decision making.
One discrepancy between academic research and personnel practice is the clear finding in
research that statistical or actuarial decision making based on the valid weighting of differ-
ent sources of information about job candidates results in more effective staffing decisions
compared to the way personnel decisions are normally made where an evaluator forms a
general impression based on an overall evaluation of the information about candidates.
When done properly, “artificial intelligence” can lead to more intelligent decision mak-
ing. One study reported a 270 percent increase in efficiency using an automated résumé
scoring system. 66 One expert recommends the following strategies for processing résumés:
(1) optimize the e-mail system by pushing candidates to particular job folders; (2) use
auto-response e-mails with valid, prequalifying questions or conditions (certain required
job specifications); (3) drive candidates to apply online at your website so valid scores can
be derived based on relevant biographical, competency-based information; and (4) use an
outsourced staffing or résumé screening service. 67 This expert is also the co-founder of a
company called People Bonus that offers this very service (check out its website). There is
no question that the Millennial generation is more receptive to Internet recruiting, online
applications, and even online “interviews.” Figure 5-18 presents a summary of the unique
elements to Gen Y recruiting.
The traditional philosophy of recruiting has been to get as many people to apply for a job
as possible. The idea is based on trying to obtain the lowest possible selection ratio given a
fixed recruiting cost. A selection ratio (SR) is the proportion of job openings to applicants. An SR of 0.10 means there are 10 applicants for every job opening. A lower selection ratio is generally more desirable because it enables the organization to choose job can- didates from a larger pool of qualified candidates, thereby increasing selectivity. Research
on High- Performance Work practices, first introduced in Chapter 1, clearly shows that more successful firms have significantly lower selection ratios than less successful firms
for key positions.
This assumption holds true as long as the cost of recruiting and subsequent screening is
not exorbitant and applicants for the job are at least minimally qualified. In general, selec-
tion ratios are more favorable when companies are admired by the working public. 68 For
example, the number of job applicants is up for most of Fortune magazine’s “2011 Best Companies” (e.g., Google, Apple, Cisco Systems, SAS, Southwest Airlines) relative to
competitors that did not make the list.
Of course, what is critical is that the increases in the applicant pool reflect at least
minimally qualified applicants. Many companies express disappointment with web-based
recruiting because of the labor involved in processing a larger collection of résumés,
many of which are not really a close match to the requirements of the job. In circum-
stances where the “quality” of the candidates is most important, along with the attraction
of people who are more likely to stay longer, the “matching” philosophy of recruitment
may be more efficient. 69 A persuasive argument can be made that matching the needs
of the organization to the needs of the applicant will enhance the recruitment process.
The result will be a workforce that is more likely to stay with the organization longer
Résumé overload
Online structured approaches to screening
“Artificial intelligence” can lead to more valid decision making
Two Philosophies of Recruiting: Flypaper versus Matching
More applicants for key positions is a HPWP
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and perform at a higher level of effectiveness for a longer period. In the context of this
matching philosophy, a process of realistic recruitment is recommended. An important
component of realistic recruiting is a realistic job preview (RJP). RJPs provide the char- acteristics of the job to applicants so they can evaluate the compatibility of this realistic
presentation of the job with their own work preferences. St. Petersburg, Florida, police
recruits are shown a video depicting the realistic life of a St. Petersburg police officer.
Recruits are told that each arrest they make entails hours of paperwork. RJPs can result in
a self-selection process that screens out people most likely to have difficulty on the job.
Those applicants who are hired after being exposed to an RJP are also better able to cope
because of more realistic expectations about the job. 70 It is said that RJPs “vaccinate”
applicants by lowering their unrealistic expectations and bringing them more in line with
actual work conditions.
Many companies doing international work provide extensive RJPs for potential expa-
triates and their families. Bechtel, the giant construction company, provides a 60-minute
video of life in Saudi Arabia that engineers and their spouses view before they make a
commitment for a 1-year assignment. Research on realistic recruiting shows lower rates of
employee turnover for employees recruited with RJPs, particularly for more complex jobs,
and higher levels of job satisfaction and performance at the initial stages of employment.
RJPs are more beneficial for organizations hiring at the entry level, when there are low
selection ratios (i.e., many applicants per position), and under conditions of relatively low
unemployment (i.e., where people have more job options). Otherwise, the approach may
increase the cost of recruiting by increasing the average time it takes to fill each position.
RJPs are developed using job analysis information. The critical incident technique is par-
ticularly effective for developing RJPs. RJPs also could be incorporated in job postings on
the Internet to facilitate the self-selection process.
Another approach to staffing that fits into the matching philosophy is the use of the Job Compatibility Questionnaire (JCQ) discussed in Chapter 4. 71 The JCQ provides a quan- titative match between job applicant preferences and the actual characteristics of a job,
including compensation system characteristics, benefits, work schedule, and, of course, the
characteristics of the actual work to be performed. The JCQ results have also been used to
construct a realistic job preview and to redesign high-turnover jobs. A study of customer
service representatives at one Tribune Company newspaper found that the combination of
JCQ as a selection device plus the RJP after the job offer was conveyed reduced voluntary
turnover by 35 percent and increased the job satisfaction of the workforce. 72 An instrument
such as the JCQ also could be incorporated into a standardized job analysis method for
downloading from the Internet. Since the JCQ and the RJP will reduce the pool of poten-
tial qualified candidates, these approaches should be used in conjunction with a stronger
recruitment effort in order to increase the pool of potential candidates of job candidates.
Effective recruiting requires that the organization know what potential applicants are think-
ing and what their needs and desires are regarding all major characteristics of the job. For
example, how important are the various elements of the fringe benefit package? Are ap-
plicants interested in special work schedules, child care, particular work locations? Orga-
nizations also need to be keenly aware of how candidates search for jobs. What outlets do
they rely on for job information? To what extent do they rely on outside referral agencies
for job placement? Should recruitment be restricted to specific geographical areas based
on the search behavior of potential candidates? At least some answers to these questions
can be gathered over time based on the past recruiting successes and failures of the orga-
nization. Recruitment is one area of HRM where a computerized system of detailed record
keeping would be most beneficial for recruiting efforts in the future. Unfortunately, most
organizations rely on recruiter “hunches” to make decisions and do little to organize their
past recruiting efforts in such a way that systematic research could help to determine their
future strategies. Research indicates that these “hunches” are not particularly accurate. A
better strategy is to rely on the research that is summarized in Figures 5-17 and 5-18 and
to understand that whom you are recruiting has a lot to do with the success of any given
strategy. 73
Lower rates of employee turnover for employees recruited with RJPs
Use of the Job Compat- ibility Questionnaire can reduce turnover
Understanding the Recruits
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The majority of Fortune 500 companies are now multinational in nature and a sizable
portion of their business (and profits) is derived from overseas operations. As discussed
in Chapter 2, some of our largest, most prestigious companies (e.g., Microsoft, IBM, GE,
McDonald’s, Coca-Cola) derive close to (or over) 50 percent of their revenues from over-
seas business. Unfortunately, with few exceptions, the relationship between HR planning
and strategic planning for international ventures is even weaker than for U.S. operations
despite the fact that many experts regard human resource issues as even more important to
the success of an overseas operation than of a domestic operation. Efforts are being made
to enhance the recruiting and success of expatriates. As illustrated in Figure 5-19 , some
companies are responding by consolidating the external hiring requirements and gaining
expertise in overseas staffing needs.
As discussed in Chapter 2, international HRM is more complicated than domestic
HRM. All of the planning and recruitment are more unpredictable because of potentially
volatile environmental and political issues in the host country that can affect the over-
seas operations. For example, after considerable success penetrating the Japanese market,
Milwaukee-based Harley-Davidson has had to respond to considerable political pressure
directed at restricting its growth in Japan. The pressure is affecting its forecasts of market
penetration in Japan.
Almost all HRM activities (e.g., staffing, performance management, reward systems and
compliance, and employee development) are more difficult and unpredictable in overseas
operations not only because of environmental volatility but because many of the methods
within each of these domains that have proven effective in U.S. settings do not necessarily
work for international staffing, performance management, and the other domains. The U.S.
insurance industry, for example, puts considerable weight on biographical information in
the selection of insurance agents. The validity of the method for predicting sales success,
Human Resource Planning and Recruitment for Multinational Corporations *
*This section was contributed by Stephanie Thomason.
International HR planning and recruitment is more complicated
Figure 5-19 International HR Jobs
Director, Global eRecruiting International, Munich, Germany HR Director International, Toronto, Canada
Allianz AG, a global leader in the financial services arena, seeks a highly motivated individual to lead an international team responsible for creating and implementing a comprehensive eRecruiting and employment branding plan and incorporating multiple segmented lead generation tactics that ensure a consistent candidate experience with Allianz and its affiliates. Requirements: At least 8 years of Marketing and/or branding experience (project management) in financial services or insurance fields. Recruiting- related marketing experience preferred. Significant project management experience. Demonstrated leadership and relationship management abilities. Sourcing strategist who has developed a total approach to generating leads in a similar environment desired. Proficient in Internet utilization and Web analysis. Ability to conduct and report on relevant research. Bachelor’s Degree and/or MBA (e.g., business, economics, marketing) or equivalent. Work experience abroad (6-month minimum).
We are one of Forbes’ 200 Best Small Companies (www.edumgt. com) for the third year in a row. With proprietary colleges throughout the U.S., we have recently acquired three post- secondary institutions specializing in information technology, located in Halifax, Toronto, and Vancouver. We seek a Director of Human Resources for the three locations, to be based in Toronto headquarters.
The Director of Human Resources is a position of leadership within our organization. We seek a seasoned generalist who is familiar with start-ups or acquisitions, and who is able to successfully guide employees through change. The incumbent will possess the ability to integrate HR into key business operations, and to assist senior executives in building an infrastructure with all levels of management, staff, and faculty. Particular emphasis will be placed on organizational development, staffing, compensation, benefits, employee relations, training, and knowledge of provincial employment laws within a tri-site environment.
The successful candidate will possess a broad understanding of HR practices and policies, a minimum Bachelors degree in business, human resources management, or related field and at least seven (7) years of parallel experience in HR management. Some travel will be necessary in order to serve each of the locations.
The environment is challenging and very fast-paced, as well as student and employee-centered. We offer a competitive salary and benefits, with enormous opportunities for advancement. For immediate consideration, your résumé and salary history may be sent via e-mail attachment to:
HR Director International, Riyadh, Saudi Arabia
New position reporting to COO for one of the world’s largest jewelry manufacturing facilities located in Riyadh, SA. Approximately 3,000 employees in seven (7) locations throughout Saudi Arabia. Will be responsible for the development of an effective HR program, building all systems including core competencies and organizational values. Ideal candidate will be fluid in the language, culture, and customs/laws of Middle Eastern manufacturing operations. Excellent salary and benefits package to include housing allowance and relocation. Submit résumé to:
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discussed in Chapter 6, has never been studied for overseas sales and thus may not apply
in the hiring of expatriate Americans, host-country nationals, or third-country nationals.
Within the rewards/compliance domain of HRM activities, issues related to family,
housing, dependent care and schooling, spouse employment, taxation, and health care all
tend to complicate the international HRM function. These issues also make the economic
and psychological implications of errors in international HRM relatively greater than for
domestic assignments. 74
One study identified the critical issues affecting planning and recruitment aspects of
international HRM. 75 The major challenges were
1. Identifying top managerial talent early in the process.
2. Identifying criteria for success in overseas assignments.
3. Motivating employees to take overseas assignments.
4. Establishing a stronger connection between the strategic plan of the company and
HR planning.
Identifying top managerial talent in the home and host countries is a recurring prob-
lem in international HRM, as noted by a 2010 Global Relocation Trends survey. 76 In this survey, 32 percent of respondents cited “finding suitable candidates” as their most sig-
nificant challenge. Identifying criteria for success, the second challenge listed, is a complex
issue, as performance appraisals and criteria vary as a function of cultural values and norms
of the country of assignment. Few experts would argue with the contention that these chal-
lenges are more difficult with international planning and recruitment. The third challenge,
motivating employees to take overseas assignments, often proves easier to meet, as many ex-
ecutives seeking upward advancement 77 and executives who are open to change and have an
adventurous spirit may relish the overseas experience and the immersion into a new culture.
Furthermore, the extensive benefit package often provided to expatriates under the com-
monly used balance sheet approach makes the overseas stay quite comfortable. This pack-
age may afford many expatriates the ability to save more while overseas than in the home
country. Despite such benefits, some executives refuse to take international assignments.
One study found that “family concerns” was the most common reason for assignment re-
fusal (89 percent), followed by spouse career concerns (62 percent). 78 Family issues remain
a challenge throughout the international assignment, as 28 percent of respondents from the
same study cited family concerns as their reason for early return. Executives may also re-
fuse the assignment due to the inherent difficulties perceived in the country of assignment.
As noted in Chapter 2, the emerging societies of China, India, and Russia present signifi-
cant cultural and legal problems with which program managers and expatriates must deal.
Repatriation policies often are not adequate to meet the needs of returning expatriates. Lawrence Buckley, personnel manager for GE, for example, says the “re-entry process
isn’t as smooth as we would like it to be.” He states that GE is making progress in this
area but that it is “still a problem for us and U.S. industry in general.” 79 One problem oc-
curs when organizations fail to establish a career development plan for expatriates that
takes into account the international experience and knowledge they acquired overseas.
This failure may propel expatriates to seek other job alternatives that capitalize on their
experience. A second problem occurs when expatriates are placed in lateral positions with
less autonomy and freedom than they had enjoyed overseas. Extensive reporting require-
ments and greater bureaucracy may pose difficulties for executives accustomed to making
decisions on their own. 80 A third problem occurs when foreign-service premiums, cost of
living allowances, and other benefits and perquisites provided to expatriates while abroad
are abruptly terminated. Expatriates, spouses, and children who have grown accustomed to
extensive benefits overseas may feel that an abrupt change in lifestyle is unfair, given the
expatriates’ additional tenure within the company.
Corporations now place more and considerable weight on overseas experience as a re-
quirement for high-level executive assignments. For example, Honeywell, Allied-Signal,
and Rohm & Haas all require overseas assignments prior to senior management place-
ment. With the increased sophistication of international communications and the growing
importance of international operations for corporate strategy, studies showing managers
Inadequate Repatriation Policies
Critical issues affecting IHRM planning and recruitment
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perceiving a loss of visibility at headquarters due to overseas assignments probably apply
less today than only a few years ago.
Underlying all HRM challenges is the strategic position of the multinational corpora-
tion regarding the relationship of the overseas operation to the parent company. 81 The
recruitment strategy for overseas assignments is directly tied to this strategic position. U.S.
companies may recruit and select from one (or more) of three sources.
1. The pool of U.S. personnel who would be expatriated to the foreign assignment.
2. The pool of candidates from the country of the overseas operations.
3. Candidates from all nationalities.
Ethnocentrism , the policy of using only home-country executives for overseas as- signments, really only makes sense either financially or strategically when the company
is just starting the operation. Otherwise, the disadvantages of this approach outweigh the
advantages. Japanese companies with this philosophy applied to U.S. operations have
encountered a number of problems, including a proliferation of equal employment oppor-
tunity lawsuits and, in particular, age discrimination cases as Japanese companies replace
American managers over the age of 40 with sometimes younger and very often Japanese
managers. The use of host-country nationals in overseas operations can reduce language
and cultural problems, the need for expensive training programs, and, of course, the tre-
mendous cost of placing expatriates and their families in overseas assignments. This is
becoming more common for American companies. 82
The geocentric policy of hiring the best person regardless of nationality is the formal policy of choice for most large U.S. corporations but is certainly not without its problems
since such a management team may have more difficulties communicating with each other
and understanding the subtle implications of cultural differences.
For corporations maintaining a close strategic relationship to the overseas division (as
opposed to a philosophy of autonomous operations), the most common strategy for mana-
gerial recruitment and job placement for U.S. companies is a balance between expatriates
and host- or third-country nationals. Sales and production personnel are typically recruited
from the national pool. Companies that have a “hands-off” managerial philosophy toward
autonomous foreign operations they may have acquired or developed typically use expatri-
ates in coordination with nationals until the parent company is comfortable with the opera-
tion and the profits of the foreign division are acceptable. Most of the expatriates may then
be recalled to reduce the overhead of the operation.
Ethnocentrism
Geocentrism
Human resource planning (HRP) seeks to place the right employees in the right jobs at the
right time and at the lowest possible cost, thereby providing the means for the organization
to pursue its competitive strategy and fulfill its mission. Planning improves the organi-
zation’s ability to create and sustain competitive advantage and to cope with problems,
threats, and opportunities arising from change—technological, social, political, and envi-
ronmental. HRP and all of its derivatives should always keep the future customer in focus.
Reengineering or downsizing programs that lose this focus ultimately may have a negative
impact on the organization. HRP systematically attempts to forecast personnel demand,
assess supply, and reconcile the two.
Personnel demand can be assessed using qualitative methods such as the Delphi tech-
nique and quantitative methods. Internal supply may be forecast by using human resources
information systems (HRIS), replacement charts, and Markov analysis. Internal shortages
are resolved through training and/or recruitment. This information is used in action plan-
ning to develop human resource strategy. HRP is an ongoing process where control and
evaluation procedures are necessary to guide HRP activities. Deviations from the plan and
their causes must be identified in order to assess whether the plan should be revised. Most
labor market analysis should now be done with a global context. 83
SUMMARY
C o p
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g h
t ©
2 0 1 3 T
h e M
c G
ra w
-H il
l C
o m
p a n
ie s.
A ll
r ig
h ts
r e se
rv e d
.
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2 / Acquiring Human Resource Capability
Recruitment is the process of finding and attracting applicants who are interested in and
qualified for position vacancies. The Internet has had an increasingly profound impact on
this HR function. Recruitment should encompass both the attraction and the selection of
the most qualified personnel. The ideal recruitment program is one in which a sufficient
number of qualified applicants are attracted to and ultimately accept the positions in an
efficient manner. Unfortunately, the typical assessment of recruitment policies, programs,
and personnel in the past has focused on simply whether positions were filled and the cost
and speed of filling positions rather than evaluating the quality of the personnel who were
hired and placed.
The most recent writing on recruitment, however, has placed a greater emphasis on the
quality dimension of the recruiting effort. There is increasing evidence that the various ap-
proaches to recruiting result in different outcomes for the organization and that the success
of any strategy depends on who is being recruited. The evaluation of recruiting programs in
the future is thus more likely to focus on the quality dimension of the people who are hired
in addition to the “body count” criteria that are more typically used. The quality criterion
has been emphasized in this chapter and the need to establish a match between job seekers’
needs and desires for certain job characteristics and those which the organization can offer.
Discussion Questions 1. How should HR planning involve a comparison to competitors? What critical data
are required?
2. Why is HR planning an important activity? What are some of the advantages of
effective planning?
3. Some organizations do thorough job analysis first and then human resource
planning as part of a restructuring process. What approach makes more sense to
you?
4. Discuss the possible pros and cons of the two qualitative methods for forecasting
labor demand.
5. If actual performance of the human resource plan differs from desired
performance, what remedial steps might you use?
6. Employee referral is a popular method of recruiting candidates. What are its
advantages and disadvantages?
7. What are the advantages and disadvantages of the various external recruitment
sources described in the chapter?
8. How do human resource planning and recruitment complement each other?
9. Suppose a key employee has just resigned and you are the department manager.
After you have sent your request to personnel for a replacement, how could you
help the recruiter find the best replacement?
10. Discuss the advantages and disadvantages of using web-based recruitment.
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