Case study 500 words 2 sources and one scripture reference APA format

Managing Human Resources: Exercises, Experiments, and

Applications Workbook

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Managing Human Resources: Exercises, Experiments, and

Applications Workbook

Alan B. Clardy

I p Psychology Press A Taylor &. Francis Group

NEW YORK AND LO NDON

First Published 1996 by Lawrence Erlbaum Associates, Inc.

Published 2014 by Psychology Press 711 Third Avenue, New York, NY 10017

and by Psychology Press 27 Church Road, Hove, East Sussex, BN3 2FA

Psychology Press is an imprint o f the Taylor & Francis Group, an informa business

Copyright © 1996 by Lawrence Erlbaum Associates, Inc.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

Cover design by Gail Silverman

Library of Congress Cataloging-in-Publication Data

Clardy, Alan B. Managing human resources : exercises, experiments, and

applications / by Alan B. Clardy. p. cm.

Includes bibliographical references and index. 1. Personnel management—Problems, exercises, etc. I. Title.

HF5549.C473 1995 658.3—dc20 95-18235

CIP

ISBN 13: 978-0-805-81748-5 (hbk) ISBN 13: 978-0-805-81749-2 (pbk)

Publisher’s Note The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original may be apparent.

To Allison, who mastered the art o f managing the human resources o f our life spectacularly.

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Contents

Preface ix

Acknowledgments xi

1 Human Resources Management: Orientations and Issues 1 Establishing a Human Resources Program 5 Sexual Harassment: Yes or No? 7 The Republic for Which Who Stands 10 This Bud’s for You 17 But Why? 19

2 Human Resources Planning 20 Getting It Together 23 Holloway Looks Ahead 25

3 Job Analysis 29 Job Analysis 32 Job Evaluation 34 Something’s Just Not Right 39

4 Staffing, Recruitment, and Selection 41 Employee or Independent Contractor? 44 Interviewing Two Applicants for the Job 46 Staffing a “Greenfield” Automobile Plant 50 Affirmative Action at Developmental Systems Corporation 52

5 Appraising Employee Performance 58 Experiences With Performance Appraisals Interview Guide 63 Performance Appraisal Form 65 Cracking the Books 66

vii

Viii CONTENTS

Another Day on the Front Line 70 Self-Appraisal: Your Performance in This Course 74

6 Compensation and Benefits 79 Say When: Establishing Salary Levels 83 What Would It Take? 88 You Get What You Pay For—Or Do You? 90 Compensation Plan Design 92 Designing a Benefits Plan 95

7 Training and Career Development 102 Learning on Your Own: Vocationally Oriented Self-Directed 106

Learning Projects Identifying Training Needs 109 Plotting the Learning Curve 113 Employee Assistance Program Training Design 115 Where Is Everybody? 120

8 Improving Organizational Performance and Quality of Worklife 123 Supervisory Training: Violence in the Workplace 126 Back on Safety 129 Taking One for the Team 131 Survey Feedback 136

9 Labor and Employee Relations 137 Your Orientation to Unionized Employees 140 Not in My Shop, You Don’t 142 Statewide Air Tries to Fly 145 Here Come the Judges 151

References 157

Author Index 163

Subject Index 166

Preface

Students taking a personnel or human resources management course often do not enter the course bursting with curiosity or unbridled enthusiasm. If economics is the dismal science, surely, student thinking goes, human resources must be the dreary discipline. After all, what kind of excitement can there be in studying how to process payroll, check employment references, or learn about some arcane government regulation?

It is unfortunate, and ultimately self-defeating, if such a mindset about human resources persists. For increasingly in today’s business world, organizational success and competitive advantage come from the ‘‘people” side of the business. Traditionally, competitive ad­ vantage came from one of three sources: financial strength, technology, or product unique­ ness. This is not so any longer. Capital is widely available, technology can be easily purchased, and products can be copied. One remaining source of sustainable competitive advantage is better because it is not as easily obtained, purchased, or duplicated. That source of competitive advantage is a workforce that is highly competent and committed to the success of the organization. This source of advantage is built, in large part, through the policies, programs, and practices used by the organization to manage its human resources.

Human resources management should be seen less as a stepchild and more as a midwife of the management process. The key for students of the field is to learn how human resources management can be used to achieve a competitive advantage for the organization. If human resources management is a “black box” used to produce certain desired employee outcomes, then the study of human resources becomes an exercise of learning which buttons to push and which levers to pull. In this sense, human resources management is the development and manipulation of policies and programs to produce desired outcomes among employees.

For the student unfamiliar with human resources management, it is important to identify what these buttons and levers are that can be used to establish policies and programs. For example, students should be aware of the different kinds of compensation systems and how those systems channel motivation, how hiring systems can be designed for the best effect, and the various ways that employees can be evaluated and appraised. For the

ix

student who may be a working adult with experience in dealing with a personnel office, it is important to look behind the scenes and understand why certain procedures exist. It is important to realize that there can be more to managing human resources than file clerks, endless forms, and retirement parties. The study of human resources management should empower the student to know the range of policy, program, and practice choices available in any human resources function to produce the desired results. Many of the assignments in this volume are devoted to helping students see the available choices and experience their implications in managing the organization.

Students must also realize that there are constraints and limits on what human resources can do. Just because a policy choice is possible does not mean that it is legal or advisable. Indeed, the art of human resources management lies in balancing the goal of installing the best practices with the need to comply with legal and ethical strictures. Again, many of the assignments offer examples of how the human resources management function must operate in a framework of rules and regulations.

This volume was developed over the course of several years during which I taught human resources management and other related courses to graduate and undergraduate students. The exercises are designed to expose critical experiences across the full range of human resources management practices and responsibilities. I have used these exercises in my classes many times. The students invariably appreciated the challenges presented by the assignments. They consistently found that the exercises helped them comprehend and apply the ideas and concepts developed in the course and the texts. They also found many rewards in working and learning together. It has been my experience that these exercises provide a window for viewing the human resources management process that is not always possible with extended case studies or textbook presentations.

Most of the cases and exercises used in this volume are based on real events reported in the popular press, in academic and specialized journals, or from my own case study research. Unless otherwise indicated, the names of the people, products, and organizations are pseudonyms. A note on terminology—throughout, I have tried to use the term or­ ganization rather than business, firm, or company. The reason is a reminder that most of the issues involved in human resources management apply to public firms as much as they do to private ones; to nonprofit as well as to profit ones. The concept of the organization is a more generic one that covers all these possibilities.

It is my hope that the exercises, experiments, and applications in this volume can be a meaningful source of discovery and learning to guide the journey through the human resources management field. The payoff from studying here may be 5, 10, or more years in the future, when you are in a position to influence the human resources policies of your organization. If you help guide those policies in such a way as to better support the achievement of organizational success while contributing to a better quality of worklife, your investment of time and effort in learning this material will be worthwhile.

Alan Clardy

X PREFACE

Acknowledgments

This is the point at which the author absolves anyone ever associated with him of any errors while simultaneously making them responsible for any incremental value generated by the publication. It is a worthy if overstated tradition that I honor here.

First, the Johns Hopkins University School of Continuing Studies allowed me to teach Human Resources Management, Staffing and Selection, and Organizational Behavior courses on a regular basis over the past several years. The challenge of developing materials to meet the instructional needs of these classes created the spark for this book. Teaching these and other classes at Towson State University and Hood College extended this challenge and spurred me onto additional material.

Second, in using these exercises with the students in the various classes, I have learned from them how to use this material to the best advantage. All of the students in my classes need to be recognized for this role in streamlining and refining the assignments in this volume.

Third, none of this would be possible were it not for the support and encouragement of my wife Allison. Without her, I would have been just another struggling hack.

Finally, I would like to thank Lawrence Erlbaum Associates, Publishers for all the help and assistance provided in bringing this volume to fruition.

It is certainly true that none of these people should be held responsible for whatever shortcomings this volume may contain.

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1 Human Resources Management:

Orientations and Issues

Human resources management (HRM) involves the establishment and execution of poli­ cies, programs, and procedures that influence the performance, capabilities, and loyalty of the employees of an organization. Through these policies and procedures, individuals are attracted, retained, motivated, and developed to perform the work of the organization. It is through these policies and procedures that the organization seeks to mold and shape the actions of its employees to operate successfully, comply with various public policies, provide satisfactory quality of employment, and improve its position in the marketplace through strengthened ability to compete and serve.

The HRM function is of particular importance in the postindustrial economy (Bell, 1972; Schneider & Bowen, 1993). In this emerging system, the critical factor in production has shifted from machines and equipment to the “knowledge” worker (McGregor, 1991). That is, service has replaced production as the driving force in the economy, and the prominent way value is added is through the expertise of knowledge workers and the ministrations of service providers. In systems like this, it becomes even more important to obtain and use the full talents of all employees in the organization. Thus, the skillful adoption and use of HRM policies becomes a significant lever through which to move and direct the performance of the organization.

As Beer, Spector, Lawrence, Mills, and Walton (1984) noted, HRM is really a series of policy choices about how employees are to be treated, paid, and worked. These policies will in turn impact and condition the nature of the employment relationship. Different policies lead to different outcomes in employee commitment, competence, and congruence with organizational goals. Likewise, each policy choice presents the decision maker with a distinctive cost and benefit alternative. For example, compensation policy choices to pay either at the low, average, or high end of the labor market have rather dramatic implications for employee commitment to the organization and for costs to the employer. The fundamen­ tal rationale for effective management of human resources should be to identify and implement those policies, programs, and procedures that will yield the desired levels of loyalty, skill, and direction in the most cost-effective manner possible. In this sense, HRM offers to organizational decision makers a set of people investment opportunities.

1

2 CHAPTER ONE

ORIENTATIONS

However, as Schlesinger (1983) noted, the application of HRM to decision making by the organization is often reduced from review of human resources investment options to technique. For example, rather than focusing on how to build desired levels of trust through employment security arrangements, practitioners elaborate on the steps involved in a job analysis program. Or, rather than examine the impact of selection and development systems on competence levels, practitioners debate the agenda for a training program. In short, a tactical and operational view too often replaces a strategic view.

For Schlesinger (1983), there are several different kinds of value orientations that lie behind different kinds of HRM policy choices. Values in regard to human resources management are defined in terms of two fundamental questions: Who is to be considered a full “employee” of the organization? What rewards should be distributed to those employ­ ees? From these foundations, several different value positions can be erected, including: strict equality, where every member of the organization is entitled to fully share in all rewards; effort and performance, which allocates rewards to employees in terms of their contribution to the performance of the organization; and birthright, by which rewards should only go to those with certain inherited characteristics (such as ownership or gender).

The value orientation operating in an organization may not be consciously chosen or explicitly acknowledged, yet can pervasively shape the kinds of HRM policies adopted. These policies may or may not be appropriate for the longer term success of the organization.

In the Establishing a Human Resources Program case, you are asked to establish a human resources program for Widd-Jays, a manufacturing and service company. In this assignment, you put together human resources programs based on your values as the owner. As a result of this assignment, you have the opportunity to examine how value positions shape and define the kinds of HRM policies and programs adopted by the organization. From this analysis, you can consider the question of whether there is one universal set of HRM policies and programs that can be applied to any organization.

ISSUES AND CONTEXT

The nature of the employment relationship is something that affects virtually all adults and their families. Job opportunities and conditions influence the kinds of education people acquire, their income, and their ability to contribute to and participate in the well-being of society. What happens in and around the workplace is not simply an isolated, private experience for each individual but rather part of the common life of us all. Thus, there is an arguable public interest in what happens at the workplace (Bailyn, 1993; Edwards, 1993; Weller, 1990).

However, the historical foundation of the employment relationship in the United States—a doctrine called employment-at-will—has been one in which the nature of the employment experience was something between the employee and employer, with the state in a hands-off posture. The employment-at-will doctrine holds that the creation and continuation of an employment relationship is at the choice of both the employer and employee. Each is able to begin or stop the relationship at any time for any reason, and the

ORIENTATIONS AND ISSUES 3

state should not interfere in what was seen as a purely private matter between worker and employer. Beginning essentially in the Great Depression of the 1930s, the passage of various laws began to put limits on the pure and untrammeled exercise of the employment-at-will doctrine. In effect, the state adopted a view that there is a public interest in private employment matters.

The question remains to this day: What is the proper relationship between the public interest and the private nature of employment? Under the traditional employment-at-will doctrine, the employer was able to treat employees virtually any way (short of criminal conduct) he or she wanted. Historically, the results of this doctrine in areas such as labor conflict, employment discrimination, and unsafe working conditions often produced con­ ditions judged unacceptable from the vantage point of the public interest. The limitations placed on the employment-at-will doctrine have given employees rights in the employment relationship. Employers do not have an unrestrained free hand in treating their employees in any way they see fit.

These laws and regulations create a legal context for which HRM practices can be held accountable by employees and public regulatory bodies. Employers violating these laws and regulations can be found guilty of violating employee protections and made to suffer consequences in terms of reinstatement, monetary compensations, and fines, to name a few. Thus, it is important that a human resources manager be aware of these laws and regulations in planning and administering HRM policies, programs, and proce­ dures. Compliance with employment laws and regulations will help the employer avoid legal and regulatory interference; however, simple compliance with these laws and regu­ lations will not automatically mean that the organization will be successful. Success in organizational performance from effective HRM practices depends on using the best practices of the field. Thus, the design and implementation of HRM policies and programs is a juggling act of keeping the organization in legal compliance and at the same time instituting the best practices in the field. In general, even though this process may be difficult at times, these twin concerns support and reinforce each other.

In Sexual Harassment: Yes or No?, you are asked to decide whether certain described actions fall in the realm of “sexually harassing” behavior. Sexual harassment is an im­ portant illustration of how public interest has been applied to private employment rela­ tionships, particularly in terms of the responsibilities imposed on employers (EEOC, 1988; Fagin & Rumeld, 1991; Woods & Flynn, 1989).

The assignment The Republic for Which Who Stands is a case simulation on another aspect of the legal context of HRM: racial discrimination. In this case, you are asked to consider whether there was any racial bias involved in an employment decision.

The human resources management process cannot operate in a vacuum. It must par­ ticipate in the day-to-day operations of the organization and likewise itself be managed to produce the best possible results. Further, given the sea of changes taking place in the economy, technology, and society in general, human resources management must be in a position to change and adapt along the way.

First, consider the role that human resources should play in influencing the tone and tenor of everyday life inside an organization. Certainly, one pervasive way human re­ sources makes its presence known is by trying to ensure fair and consistent applications of rules to employees and by serving as a governor to reactive or ill-considered manage­

ment actions. Unfortunately, in pursuing these goals, human resources may seem to some bureaucratic (when insisting that rules be followed) and uncooperative (when resisting unilateral management actions).

Beyond the role of enforcer and monitor, though, human resources can shape the culture of the organization by its wide-ranging attention to personnel matters of whatever sort. By drawing management or employee attention to issues or activities, human resources management sends signals and causes the employees of the organization to think, decide, and act on matters of potential importance.

In This Bud’s for You, you are given the story of Bud Watson, a very colorful character in the Martin’s Superstores chain. Bud is in charge of security, and although he is not technically in violation of any specific human resources policies or procedures, Bud is operating on what some might see as the edge of acceptable conduct. What kinds of concerns and actions, if any, should a human resources manager take in this gray area?

The human resources function in an organization should be positioned to monitor key indicators of the firm’s human resources base (Huselid, 1994). Employee opinion surveys are one method commonly used to track such matters as satisfaction with supervision or with benefits. In addition, the human resources function can create other means for determining how employees are feeling about and reacting to their employment. Another kind of key indicator that can be monitored is why employees leave the organization.

In But Why?, you are given a situation of a high-tech company that is losing valuable employees but does not know why. Your task is to develop a means for determining why employees separate from the company so that the information can be used for management decision making.

SUMMARY

Managing human resources effectively has never been as important as it is today and will be tomorrow. In today’s service economy of knowledge-based, high-discretion jobs, the commitment and competence of employees can spell the difference between those organizations that win and those that are merely in the race. Establishing policies, pro­ grams, and practices that produce these results on a cost-effective basis and comply with laws and regulations is a complex undertaking. HRM can and should play a strategic role in the management of the organization.

Given the changes facing organizations today, a human resources function that operates as business as usual will quickly lose its value to the organization. The human resources function should be expected to introduce better systems for managing a firm’s human resources. In addition, the human resources function should continually look for ways to more closely align human resources systems and procedures with the evolving direction of the organization.

Change presents both danger and opportunity. In today’s rapidly changing world, the danger is that the human resources function will shroud itself in rules and procedures. The opportunities, though, are exciting: to design and implement human resources systems that best support the organization’s pursuit of excellence and the employees’ pursuit of an outstanding quality of work life.

4 CHAPTER ONE

ORIENTATIONS AND ISSUES 5

Establishing a Human Resources Program

You recently inherited ownership of a 75-employee firm, Widd-Jays, Inc., that assembles, markets, and services Widd-Jays (a promotional version of “widgets”). Widd-Jays are household climate enhancers sold in retail markets. Widd-Jays competes with other firms who sell comparable products. Widd-Jays does offer a servicing component that provides something of a competitive edge.

Widd-Jays, Inc. was owned and run by a long-lost aunt with whom you lost touch many years ago. You knew nothing about the company at first but some subsequent research has turned up the following facts:

• Although the business has been profitable since it was started 20 years ago, sales have been flat and profit margins have been eroding over the past few years. The asset value of the firm has been declining slightly during this period also.

• The employees in the firm are not unionized, although there has been some increase in employee discontent. Because the firm experiences an average amount of turnover, layoffs have been avoided during this most recent recessionary period by relying on attrition.

• Widd-Jays has been subject to increasing competitive pressures for improved product quality and reliability. To help in this regard, a new, more automated system for production and management was installed last year. Many employees have been struggling to learn the new skills needed to make the system fully productive.

• Your aunt tended to run the business fairly tightly and directly. The three top managers in place are not accustomed to taking initiatives in actively managing the business.

On your first visit to the plant, you discover that there is no consistent, unified human resources function in place. You believe it is critical to establish some guidelines, ad­ ministrative structures, and policies for human resources as soon as possible. You want to assume the management of the business and see a well-defined human resources system as essential for putting your stamp on the business and getting it running properly.

Assignment

You are given a statement of Instructions describing the position you wish to take in regard to human resources policy and plans. Given this position, you are to recommend human resources policies and programs that would best support and realize this position. Your recommendations will be assessed in terms of the logical consistency between this position and the HRM practices recommended.

Use the following outline to guide the planning of your recommendations. That is, recommend specific human resources programs for each of the following areas.

CHAPTER ONE

A. Compensation Programs 1. Compared to the larger labor market, what kind of base salary do you want to

pay? 2. How and when should base compensation be changed? 3. Do you compensate employees based on what the employee does individually

or the performance of a work group or team? B. Benefits Programs

1. How “rich” do you wish the benefits program to be? (“Richness” refers to the number and generosity of benefits provided.)

2. When should new employees be eligible to begin receiving benefits? C. Staffing and Selection Procedures

1. How rigorous (involved, detailed, and time-consuming) should employee hiring be?

2. What level of credentials should an applicant have? 3. What qualifications should be sought?

D. Work and Job Design 1. Should jobs be made as simple and routine or as complex and challenging as

possible? E. Employee Training

1. How much training should be provided to employees? 2. What types of training should be provided?

F. Employee Relations 1. What kind of programs, if any, should be created to communicate to and/or hear

about employee problems and dissatisfactions?

ORIENTATIONS AND ISSUES 7

Sexual Harassment: Yes or No?

The following scenes present various situations in which the conduct of managers and/or employees may or may not involve sexually harassing behavior. Identify whether, in your judgment, the situation is probably sexual harassment or not. If you have any comments or questions, make notes in the space provided.

1. Mary Wilson is a very friendly and personable supervisor. She tends to greet people with a big smile and direct eye contact. She often touches people when talking with them by placing her hand on the other person’s arm or shoulder. These little actions help her feel like she is keeping the other person’s full attention and rapport. She does these things with her boss, her colleagues, and her subordinate employees, male and female alike. No one has objected to her friendliness.

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

2. Mac Barnes works as a graphic artist in the advertising department. He is quiet and keeps to himself. When reviewing his work, his supervisor Helen Cummings often leans over his shoulder and rubs against him. She has commented several times that his wide shoulders and large hands would be nice to snuggle with. Mac has not reacted to these comments, although they make him uncomfortable.

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

3. Judy Mason has just joined the company and works in the mailroom and supply department. She often wears halter tops and tight blue jeans to work. Her coworkers cluster around her desk, telling dirty jokes during lunch hour. Judy giggles nervously at the jokes, but is becoming increasingly concerned about the way the men act around her. She does not see them act like this around the other women in the area. She expressed her concerns to her supervisor about this.

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

4. Frank Johnson supervises the paint shop, which has traditionally been staffed by men only. He recently hired a woman as a sign painter. Since she reported to work, the male painters will not socialize with or help her. At times, Frank sees them do little things that make it more difficult for her to complete her work successfully, like hiding

tools, misplacing her work orders, or not sharing information about department operations. Frank wonders how long she will remain under this pressure.

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

5. Bill Wiggins is a good employee: dependable, likeable, competent. He is also a bachelor at 35 years of age and is always impeccably dressed and neat. Although it is not certain, many suspect that Bill may be homosexual. Bill is usually the model of good behavior but he will sometimes slap a coworker on the back when laughing at a good joke or will touch a coworker on the arm to make a point in a conversation.

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

6. You are the supervisor of a document production unit with National Products Com­ pany. Two repairmen from the Systems Servicing Company have been called in to repair a malfunctioning office machine. You have noticed that they seem to be talking with Mary Vaughn as they have been working. Mary’s desk is in an area isolated with the machine. Mary is a very attractive, 28-year-old mother of two. Later that morning, while in the ladies room, you overhear two employees talking about how upset Mary is because the two repairmen are making explicit sexual comments and direct offers to have sex with her.

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

7. John Jones is an assistant manager with the Glitz Jewelers Wholesale Company. The warehouse manager Hank Phillips has recently taken to showing John pictures of Hank and Melinda Perez in various stages of undress and sexual activity. Melinda Perez is the secretary of the President of Glitz Jewelers. Hank says that if John doesn’t look at the pictures, Melinda will have him fired. John finds the entire experience very dis­ tasteful and abusive. He finally quits because the stress of having to deal with Hank on this matter is just too great.

Sexual harassment: [ ] Probably [ ] Probably Yes No

8 CHAPTER ONE

Comment

ORIENTATIONS AND ISSUES 9

8. William Campbell, 39, manages the Metropolitan Sales Department. He works out of the headquarters office. William frequently must confer with managers in other de­ partments of the company, including customer service. Brenda Johnson, 25, is an attractive, single woman who works in customer service. For the past few months, whenever William comes into the customer service area, he makes a point of asking Brenda out to lunch at the Downtowner Hotel. He has made several remarks, like “using room service after” and “noon-time quickie” that make it clear that he is thinking of sex and not food. Often, he makes these invitations when other people—managers and coworkers—are present. Brenda has complained to the director of human resources, who replied that “this is not a problem.”

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment

1 0 CHAPTER ONE

The Republic for Which Who Stands

Introduction

This exercise presents the case of Belinda Williams, an African-American woman em­ ployed by Republic Savings and Loan. Ms. Williams believes that she is the victim of racial discrimination in her treatment as a Republic employee. A “trial” over the issues in this case will be staged to come to judgment about this claim.

The next few sections contain the following information:

• A background summary of the situation. • A legal issues briefing paper. • The story of Belinda Williams. • The story of Republic Savings and Loan. • The judge’s briefing.

Everyone should read the background summary and legal issues sections. However, do not read any of the other sections until you have received an assignment from the teacher.

Background Summary

Republic Savings and Loan opened about 40 years ago with one branch in the downtown area. Republic’s close proximity to both city and state office buildings provided a steady supply of customers through good times and bad. Since forming, Republic grew steadily over the years. Now, Republic has more than 10 branch offices in the metropolitan area and almost 200 employees.

Belinda Williams joined Republic about 2 years ago as a teller. Belinda, a 28-year-old African American, was glad to find a steady job during a recessionary period. She went through Republic’s teller training program, learning many of the procedures that should be followed in teller work. For example, she learned that whenever she leaves her teller station to go on a break, she should lock her cash drawer with her special key. She also learned that there should always be another person present whenever cash is being counted or bundled or stored. This was the principle of dual control.

The one thing that most stuck out in Belinda’s mind was the importance of following procedures constantly and without exception. She heard stories of how people could be fired or perhaps even taken to court if there were problems from not following these procedures.

After her training was completed, Belinda was placed in the downtown branch office. Given the emphasis in her training on how much procedures should be strictly adhered to, she was surprised when she began working at the downtown branch, for she found that things at downtown were run casually and informally. When she first arrived and starting doing all the procedural steps she was taught, she was kidded by her manager and coworkers about going by the book.

“Look,” said Bill Winston, Branch Manager, “we’re just a happy family here. We like to be causal and relaxed. There’s no need to follow all those procedures to the letter.”

ORIENTATIONS AND ISSUES 11

Belinda took the advice to heart, just like everyone else, and during her time there, she compiled a good employment record. She was a dependable, loyal employee. She got along well with her coworkers and customers.

About 1 year after moving to the downtown branch, however, Belinda was reminded how important procedures were. Shirley McDonnell, 32, and White, worked as a teller next to Belinda and had joined Republic about 3 months before Belinda. Belinda’s re­ minder lesson came from a troubling incident involving Shirley’s teller work.

As part of their everyday operations, each Republic teller put portions of their day’s work into a lockable voucher packet. This work included checks and deposits, as well as some cash. The voucher was locked by the teller, then picked up by a courier for delivery to Monumental National Bank, a larger institution that Republic contracted to do various “back office” work. One day, it was discovered that about $1,000 that was supposed to be in Shirley’s bag was missing when it arrived at Monumental. It was not clear what happened to the money.

There was an internal investigation, but no one could determine what happened for sure. Shirley admitted that she filled her pouch without anyone else being present, in violation of procedure but not uncommon in the branch. She also said that she had trouble locking that particular pouch that day, and that the pouch may not have been locked completely when she left it in a central location with the other pouches. Other employees had been walking in and out of the area where the pouches were kept. The courier said it was locked when he picked it up. Monumental said the pouch was locked when it arrived there, and that it was opened under dual control conditions.

It was known that Shirley was a single mother who had recently gone through a divorce, but she had never had any prior problems. She was given a formal written disciplinary warning for not following procedures that was placed in her personnel file. However, Shirley kept her job.

That experience was a tense and somewhat sobering one for the entire branch. After about a month or so, though, the incident was pretty much forgotten, and the branch returned to business as usual. This meant that everyone fell back into a lax pattern of following procedures.

Then, about 4 months later, Belinda’s world collapsed as the tables seemed to be turned on her in a similar situation. It was a typical working day, although busier than most. There was a lot of scurrying by the tellers to meet the volume of customer work, and Belinda felt lucky to get a break and lunch at all that day. As was common practice at the branch, she would leave her teller station without locking her cash drawer.

At the end of the day, when the tellers “settled” or balanced their work, Belinda found her teller drawer was $2,000 short of cash. She worked with the head teller and the branch manager to look for where the money might have gone, but it could not be found. Security officers were called out to investigate, and Belinda admitted that she had not locked her drawer while she was away.

The situation was referred to the administrative group downtown. This breech of pro­ cedure was deemed so severe that the decision was made to fire her. Robert Carter, who headed the human resources department, argued against termination. According to Carter, the problem was in the poor procedures followed in the branch, not necessarily with the employees. Further, Carter told the other managers present that there would be discrimi-

12 CHAPTER ONE

CAST OF CHARACTERS REPUBLIC SAVINGS AND LOAN

President

------------------- Robert Carter Director, Human Resources

Jim Bronson Manager, Branch Operations

Bill Winston Branch Manager

I MaryLou Scott

Head Teller

Shirley McDonnell Belinda Williams LoriAnn Jones Teller Teller Teller

nation problems from this action. Said Carter: “This situation is very similar to the Shirley McDonnell case, yet Shirley, a White woman, was only reprimanded, whereas Belinda, a Black woman, gets fired. Belinda will file a discrimination suit within a month.”

Carter’s argument fell on deaf ears. Belinda was fired. Within 2V2 weeks, Carter was served with a notice from the state’s Department of Human Relations that Belinda Williams was suing Republic Savings and Loan for illegal discrimination based on race.

ORIENTATIONS AND ISSUES 13

Legal Issues Briefing Paper

I. Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on race, color, religion, national origin, and sex in every condition of employment, including hiring, promotion, compensation, and termination.

II. Discrimination may be either intentional and willful, or unintentional. Intentional discrimination occurs when the employer knowingly acts against a person because of that person’s membership in a protected class (e.g., the person is intentionally not promoted because he or she is of Italian heritage). Unintentional discrimination can occur when there is evidence that a person who is a member of a protected class is treated differently than others, even if there is no apparent illegal intention to discriminate.

III. The defense to a claim of unlawful discrimination is to (a) establish evidence that there was no willful intention to discriminate based on illegal criteria, and/or (b) to provide evidence that all employees were treated in the same manner.

IV. To argue in favor of unlawful discrimination, you must show either that there is evidence of intentional illegal discrimination, and/or that the employee was a member of a protected class who was treated differently.

14 CHAPTER ONE

Belinda Williams’ Story

The following is Belinda’s general perspective on what happened. These remarks represent her fundamental position and interpretation of what happened. You can supplement this position with other relevant facts that are clearly and logically based on this position. Belinda and her team of lawyers will be expected to present Belinda’s position before a team of judges. You will have 5 minutes to make your argument about why Belinda’s claim of unlawful employment discrimination is valid. You can consult the legal frame­ work issues briefing. The other party will have the opportunity to question Belinda directly. Likewise, Belinda’s attomey(s) will have the opportunity to question the other party.

I couldn’t believe they actually fired me, although I’m not surprised. There are no Black people at the top level of the organization, and it’s well known that if you’re African American at Republic, you don’t have as good a chance of being promoted as if you’re White. I ’ve heard other Black employees complain about being treated differently and unfairly, too.

I ’m disappointed. I liked working at Republic and did a good job while there. My evaluations were always very good or excellent. I remember coming into work on days when I should have stayed home, I was so sick. I was a much more dependable employee than a lot of other people there. There were several White employees whom I heard say that they would often take days off just because they didn’t feel like coming in.

I don’t know what happened to the money, other than I did not take it. I even said something to MaryLou Scott (the head teller) offering to let someone look through my purse, but she said that I shouldn’t volunteer to do that. I was gone for about 20 minutes for lunch, that’s when I think it happened. We were very busy that day, and anyone might have been around my station long enough to take some money out.

I ’m not sure who would have done it or why. I know Shirley is still having a tough time with her divorce. Then there’s LoriAnn Jones (a 58-year-old White woman who has been a teller for sometime): She’s never hidden her feelings about not liking Blacks. And we did cross paths rather harshly about a month ago. Who knows, maybe it was someone who had no other motive than being able to make some quick and easy money. But I did not do it.

But why was I fired and Shirley wasn’t? I mean, look at the circumstances. She admitted not following procedures either and she had much more of a motive than me. What do I want to jeopardize my job for by doing something stupid like that?

So why was I fired and wasn’t she? There can only be one answer: It’s because I am Black and Shirley is White. I mean, if I was White, they wouldn’t have fired me. And if Shirley was Black, she would have been fired. Why aren’t there more Blacks in management?

This is clearly a case of racially motivated discrimination.

ORIENTATIONS AND ISSUES 15

Republic Savings and Loan Story

The following account is the position of Jim Bronson, Manager of Branch Operations for Republic Savings. Jim Bronson and Republic will be represented by a team of attorneys. These comments represent Jim’s fundamental interpretation of events. You can supplement this position with other facts that are clearly and logically related to this position.

Jim and his team of lawyers will be expected to present Jim’s and Republic’s position before a team of judges. You will have 5 minutes to make your argument about why Belinda’s claim of unlawful employment discrimination is invalid. You can consult the legal issues briefing. The other party will have the opportunity to question Jim directly. Likewise, Jim’s attomey(s) will have the opportunity to question the other party.

This was not a matter of racial discrimination. We fired Belinda because she violated procedures that led to the loss of $2,000. There had been a general decline in tellers following procedures, especially at the downtown branch, and we felt we had to take a stand and send a clear message to everyone that they had to follow procedures.

It’s regrettable that Belinda was the one who we picked, but she did make the mistake. And, yes, she had been a very good employee, which did surprise us. But we felt that things had just gone too far in Belinda’s situation.

That’s why her case was different than Shirley. First of all, Shirley was in the middle of a divorce, and she was under a lot of pressure. It wasn’t clear what happened in her case, and we did discipline her. Second, Belinda just did not follow procedures and that caused a loss. She was trained like everyone else and received the same instructions about procedures.

Belinda even admitted that she did not follow procedures and that she knew what could happen as a result of not following procedures. These procedures are not unreasonable: All financial institutions have procedures like this.

We just can’t allow employees like that to keep their jobs with us.

1 6 CHAPTER ONE

Judge Briefing

Your assignment is to hear both sides of the argument presented in the case of Belinda Williams v. Republic Savings, then render a judgment about whether her charge of illegal employment discrimination is true. You are to offer an explanation of your decision either way. If the charge is upheld, you must also decide what remedy(ies) are to be granted to Belinda.

This dispute resolution can be seen to occur at any level, from an internal grievance procedure handling stage to a federal court. For the purposes of this exercise, it is not necessary to adhere to formal rules of legal procedure. Simply give each party 5 minutes (no more) to make their case; each party should have the opportunity to ask the other party questions (i.e., to cross-examine). You can also ask questions and direct the pro­ ceedings as you see fit. Consult the legal issues briefing and the following specifics.

I. The first issue to consider is whether there is evidence of intentional discrimination. If there is, then the verdict should be against Republic.

II. If there is no compelling evidence of intentional discrimination, the next issue is whether there is evidence of unintentional discrimination.

III. The employer can still be liable for discrimination done unintentionally in this case if there is a selective enforcement of procedure. Thus, a key issue will be whether the employer can successfully defend the application of a procedure to all employees.

IV. Selective enforcement occurs when one rule or procedure is applied differently to people in different categories who demonstrate the same behavior. So, even if the employer makes the believable claim that a decision was not racially motivated, the employer must still establish that all employees in similar situations were treated in the same way. If that position is not clearly established, the reason offered by the employer is seen as a rationale or pretext to the real underlying reason, which is then taken to be unlawful employment discrimination.

V. Under the various laws that apply, a judgment of unlawful employment discrimi­ nation can result in various remedies. If this result happens, the employer can be compelled to provide back pay and lost benefits, reinstatement in position, payment for attorney’s fees and costs, or other kinds of injunctive relief.

ORIENTATIONS AND ISSUES 1 7

This Bud’s for You

Martin’s Superstores operated four trendy mega-retailing outlets in the metropolitan area. Each store was huge, having the equivalent of about one football field in floor space. Each store carried almost every kind of merchandise imaginable. Martin’s was able to draw large volumes of shoppers because of its novelty, its pleasant store atmosphere, and its reasonable prices. Martin’s was profitable, in part, because it could operate with a low staffing overhead: The shopping was self-service. There were no full-time sales clerks, only stockers and display personnel (who could answer questions if asked). Cus­ tomers paid for their purchases at a central payment station.

Theodore Watson— or Bud, as he preferred it—joined Martin’s about 5 years ago as their head of security. Bud quickly built a reputation as quite a character among Martin’s employees. This reputation derived from his very unusual past: He used to be a retired undercover narcotics officer with the city’s police force. Bud would often tell stories about his harrowing adventures. These stories highlighted the sad end to his police career. During the last few years, the stress of working undercover took its toll, and Bud eventually had a nervous breakdown. He subsequently received a psychiatric medical discharge from the police. Bud would quickly inform newcomers of this fact in order to explain his rapid mood changes and his use of sedatives. Even though Bud was 5'6", he was powerfully built and could muster fear in those around him when he was on a tirade.

The police force’s loss was Martin’s gain, for Bud began working there not long after the discharge. Bud let everyone know that he was only making a salary of $30,000 because of the restrictions on additional earnings from his police pension. Normally, Bud’s job as head of security would pay around $50,000 for a firm like Martin’s.

Bud’s duties included overseeing the various risks present in a retail operation like Martin’s: employee theft of merchandise, customer shoplifting, bad checks or credit card collections, and the like. However, with Bud’s energy and drive, he quickly assumed other duties at Martin’s. For example, his office was located across the hall from the mailroom in the flagship store. The mailroom processed all incoming customer payments and outgoing mail. Bud took over responsibility for running the mailroom. Bud also became responsible for building maintenance: If a roof leaked, the air conditioning broke, or a wall needed painting, Bud was the man to contact to get it fixed.

Bud did this work unconventionally, playing along the margins of what was acceptable. It was never clear how he got some of the building maintenance work done, as an example. He seemed to pull contractors out of the air, working on a handshake and without purchase orders or contracts. Store managers did not have to sign any approvals once the work was done. And he simply refused to comply with a new procedure instituted by Beth Jones, vice president in charge of accounting, to supply the list of contractors he used along with their tax identification numbers. He told everyone he could that it was too “bureaucratic.”

One story was often mentioned about Bud in this regard. It seems that about 18 months ago, when Martin’s opened its latest store, there was a tree near the streetside curb that blocked the new and expensive Martin’s sign from easy view of passing motorists. The Planning Authority, who controlled the area on which the tree sat, would not allow it to

1 8 CHAPTER ONE

be cut down. One night, shortly thereafter, “vandals” cut the tree down and carried it away. Bill Martin, the founding owner of the chain, often told this story with a nod, a wink, and a smile. While never admitting it, everyone knew that the vandal was Bud.

Bud’s boss was Roman Johnson, an executive vice president of Martin’s. Roman was a “nuts and bolts” type of manager that liked to concentrate on the operational details of the business. Because Roman worked mostly in his office and Bud was constantly in the field, they rarely saw or talked with each other. Bud essentially worked without regular supervision.

Into this operational framework, Bud brought his own inimitable style that amplified his character inside the company. For example, Bud tended to be explosive. If he got angry, look out. Some thought he would do this on purpose around new people—just to scare them. In particular, Bud scared Dotty Zachary half to death, it was told. Dotty, 62, was the internal auditor for Martin’s. She was a long-term employee who at one time ran one of Martin’s stores. Now, expecting to retire within a year or so, Dotty wanted nothing to do with Bud. She mentioned to Beth Jones (from Accounting) one day that she hadn’t audited Bud’s area for more than 3 years, she was so intimidated of him. Nor could she see herself doing an audit anytime before she retired.

Despite this volatile side, Bud endeared himself to a number of employees throughout the company because of his ability to, for lack of a better word, party. Bud was renowned for his liquid lunches: He would gather up four or five employees and take them out for a long lunch that involved a lot of alcoholic consumption. He always insisted that he pay, which he did and left large tips. Bud also dressed very well, with expensive tastes in clothing, jewelry, equipment, and the like. He also traveled a lot with his wife and 12-year-old son. When people wondered how he did it, the usual answer was that the combination of his salary from Martin’s, his disability pension, his wife’s salary, and maybe some inheritance sufficed. No one gave his opulence much thought.

Bud also had a reputation as a ladies’ man. He flirted openly and often with women in all parts of the company. His manner must have been such to be inoffensive enough, for there were never any claims of sexual harassment waged against him. In the past year, Bud seemed to have settled on a “girlfriend” in the accounts payable department. Bud often was seen in the department or elsewhere, talking with her.

Such was the legend of Bud Watson that Alan Franklin pieced together, one story at a time, during his first 2 months on the job as the new director of human resources at Martin’s. Alan had met Bud, and could understand how others could be charmed by him. Still, there was something gnawing at Alan about this whole situation and he was not sure what, if anything, he should do.

Discussion

1. Given this information, what concerns—if any—would you have about Bud? Spec- ify.

2. As director of human resources, does Alan Franklin have any responsibility in this situation? Explain your answer either way.

3. What actions should Alan Franklin take, if any?

ORIENTATIONS AND ISSUES 19

But Why?

New Force Laboratories began operating 10 years ago. Founded by Drs. Nino Cachuri and Sheth Khastanan, New Force Labs specializes in developing and manufacturing various biological agents used by hospitals, universities, and other research centers in the business of biotechnology.

Over the years, New Force has grown to the 250 employees who work for it today. About 90 employees work in the research and development side of the business. Invariably, these employees have advanced degrees in the fields of biology, chemistry, and the like; more than two thirds are PhD level scientists. Another 100 employees work in the pro­ duction and manufacturing side of the business. Of this group, many are skilled, trained specialists. The remaining employees occupy staff positions or are in sales. In short, the New Force labor force is highly trained.

That was why the turnover among all segments of this labor force was so troubling to Drs. Cachuri and Khastanan. Not only were the employees expensive to recruit and hire, they also were paid very well (at least, so thought the good doctors), and when they left, productivity lagged. Although any unwanted loss was bad enough, it seemed that the amount of turnover had been increasing recently. However, no one seemed to know the reasons for that turnover.

Assignment

Your task is to develop a system for collecting information about the reasons why em­ ployees leave the company. That is, design a procedure for collecting information about employee turnover and for using that information as part of management planning and decision making.

There should be at least two parts to your answer:

1. What kind of information should be collected from departing employees? How should that information be collected and by whom? At what point in the separation process should that information be collected? How should this information be compiled and delivered to management?

2. How would you recommend collecting data from the employees who have already left? Assume that Drs. Cachuri and Khastanan want information quickly about why employees have been leaving. What would you do to find out from previously departed employees their reasons for leaving?

2 Human Resources

Planning

One way to define the human resources management function is that it should provide the right kinds of talent to the organization at the right time. In this context, assuring a supply of qualified labor in a timely fashion becomes a major performance expectation for HRM. The major procedure through which this expectation can be met involves human resources planning (Jackson & Schuler, 1990).

The fundamental process underlying human resources planning is a comparison between the organization’s human resources needs and the supply of qualified personnel. This analysis is projected for some period of time into the future. By comparing human resources needs with the supply of human resources, future imbalances can be noted and appropriate actions to remedy those problems can be prescribed.

More specifically, the human resources planning process can be organized into four steps or phases (Schuler, 1992). The first phase is an environmental analysis. This step involves identifying the significant social, demographic, economic, and technological trends taking place in and around the organization. The purpose of this analysis is to anticipate how the organization must or will change to remain competitive and successful.

Sibson (1992) recommended that the scanning and recognition process be conducted annually. From this environmental sensing process, a list of potential changes, trends, and events is compiled. This list of factors should then be evaluated in terms of four criteria:

• Likelihood of important consequence on the business, from significant to not significant.

• Probability of impact, from high to low. • The ability of the organization to manage the impact, from high to low. • The reliability and validity of the information sources used to identify the event,

from high to low.

Following this approach, those events that are judged to come from highly reliable and valid sources, that will have significant impact, that will probably occur, and that the organization can manage should become the focus of intense planning and preparation.

20

Two examples illustrate the importance of environmental scanning for human resources planning. The first dates to the period prior to the recession of the late 1980s, when McDonald’s ran television ads showing an older, retired person working at a McDonald’s restaurant. At that time, all demographic indicators pointed to a shrinking of the teenage labor pool (which was, of course, their main source of workers) and a growing retired population. The ads conveyed the image of how working at McDonald’s could be an interesting and enjoyable way for a retired person to spend some time. The obvious intention of this promotional campaign was to help recruit in a new, potential labor market.

Foster (1986) provided another example, drawn from technology. National Cash Reg­ ister (NCR) was a successful firm in the late 1960s, manufacturing cash registers and accounting machines. Their machines were based on electromechanical technology: These “dumb” machines operated by gears, drives, and levers to crank out calculations. In 1972, 90% of the sales of new cash registers were of this electromechanical design. However, during this period, a newer computer-based technology was increasingly adapted to the register-accounting machine marketplace. By 1976, a scant 4 years later, the market had reversed itself, with only 10% of the sales of new cash registers coming from electro­ mechanical machines, whereas 90% of the sales went to the new “smart” electronic machines. And as Zuboff (1988) showed, information technology profoundly changes the nature of work and the skills required to operate in that new system. Unfortunately for NCR, they did not move into that new technology, and NCR experienced rather dramatic declines in value and employment.

The second phase of human resources planning involves two closely related activities: preparation of forecasts for the demand and supply of labor (Deckard & Lessey, 1975; Hoffman & Wyatt, 1977; Odiorne, 1984; Walker, 1980). A demand forecast is an estimated projection of the kinds and numbers of talented personnel the organization will need in the coming years. This analysis can be derived from the business plan of the organization itself. A simple example might involve a franchise operation that plans to add four retail stores next year, five the year after that, and then three more in the following year. The demand for store managers can be projected relatively easily.

It is not as easy to project changes in an organization’s demand for labor due to significant changes in jobs, technology, or organizational structure. Adler (1986) reported how a French bank believed that the automation of teller jobs would lead to a “de-skilling” of the job. To the contrary, the job requirements changed and new, higher skill sets were required. The expected gains from de-skilling in terms of easier recruitment, lowered payroll expense, and quicker training did not materialize.

Likewise, many organizations today restructure and reengineer themselves into new shapes and operating arrangements. The purpose of such reorganization is often to capi­ talize on improved communications and better responsiveness for competitive advantage. Again, such changes in structure can produce significant changes in the jobs and the kinds of skills people need to perform those jobs (Kanter, 1990).

In the assignment Getting It Together, you participate in an experiment designed to test the influence of organizational structure on job requirements. As this experiment unfolds, look at the changing nature of job requirements for both managers and employees. How can the human resources planning process take into account this changing nature of jobs?

HUMAN RESOURCES PLANNING 21

2 2 CHAPTER TWO

The assessment of the supply of talent available to an organization as projected into the future is the companion piece of this second phase of human resources planning. Here, the current employee population of the organization is inventoried to determine how well the supply can meet the demand. Together, demand and supply forecasting is sometimes referred to as manpower planning (Russ, 1982).

Phase 3 involves a comparison and analysis of the demand and supply forecasts. As noted earlier, the primary thrust of this stage is to look for imbalances between what the organization needs in qualified personnel and what will be available through the manpower supply pipeline.

Finally, in Phase 4, the human resources planner considers what actions, if any, are warranted to address the projected imbalances between labor demand and supply. In this context, the full repertoire of human resources management policies and programs can be called on. The planner looks at the costs and likely benefits of various possible courses of action to help guide the decision-making process.

In Holloway Prepares for Its Future, you have the opportunity to address a more common application of human resources planning today: downsizing. Holloway is a regional hospital facing the need to cut back on its operations and you are asked to prepare plans for that situation.

Human resources planning is a procedure that seems to make a great deal of sense. One would expect that such a procedure would be widely practiced, particularly among larger firms with the size and resources to support such planning. However, in a survey of Fortune 500 firms, Nkomo (1986) found that half of the 264 respondents to her survey did no such planning, whereas only one third had a system in place that integrated human resources with business planning. Perhaps for this reason alone, one further step recom­ mended (Schuler, 1992) is to obtain the support and involvement of top management in the human resources planning process.

Although human resources planning cannot yield perfect predictions, it does give the organization the ability to think through what kinds of personnel will be needed in the future. Further, such planning gives the organization an opportunity to prepare to meet that future in a more proactive manner.

HUMAN RESOURCES PLANNING 23

Getting It Together

In this experiment, you observe the effects of organizational structure on task performance and the roles that team members play. Two equally sized teams are given the same task to perform, but with different operating rules (or organizational structure). You are to observe the performance of the individuals in both teams and discuss your findings for analysis.

Procedure

1. Eight students will be randomly selected to become members of one of two teams. The students will be given role assignments as part of their team membership.

2. Both teams will be given certain rules for operating to accomplish their tasks. The tasks involve solving certain mathematical problems. Everyone will be trained in the process shortly.

3. Both teams will leave the room while the instructor reviews the procedures with the remaining students who will be serving as observers.

4. The first team will reenter the room and be briefed on their specific operating rules. They will be given time to complete as much of the task as possible.

S. The second team will then be invited into the room and given their rules. At that time, they will be given the same task and time limit as the first team.

6. At the conclusion of the experiment, observers will report on their observations. A general discussion will follow.

General Rules for Both Teams

1. The objective of each team is to complete the three production tasks as accurately and quickly as possible.

2. The team must stay within the rules of the system under which they were established. 3. The team cannot use calculators of any sort but all team members may use scratch paper.

Training

The tasks to be completed involve performing mathematical calculations. The building blocks of those calculations are relatively simple addition, subtraction, multiplication, and division procedures. When in doubt, begin with the most embedded terms on the left and work your way across the formulas. What are the answers to these formulas?

1. (A + B) = __

2. (A + B) x C = __

3. (B + D) E

4. [(B ~ D) xC] = __

A = S B = 10 C=2 D = 30

E=4

24 CHAPTER TWO

Observer’s Notebook

Use the following section to record your observations about what happens in the teams.

Team 1 Team 2

Operating rules

Time required

Manager behaviors

Employee behaviors

Problems experienced by the manager

How learning took place in the team

How the groups worked together

HUMAN RESOURCES PLANNING 2 5

Holloway Looks Ahead

Introduction

The Holloway Hospital is a 400-bed institution that serves the citizens in the eastern portion of the metropolitan region. There are 10 hospitals in the region, and like all of the hospitals in the area, Holloway is finding it increasingly difficult to stay afloat. Senior management of the hospital has reluctantly decided that the hospital is and will continue to operate at overcapacity unless action is taken. Holloway measures its capacity in terms of number of beds available compared to the number of patient admissions. Thus, Hol­ loway’s assessment that it is running at overcapacity means that it is staffing to support a number of beds which will likely never be used by patients. Of course, such a staffing arrangement creates costs for the hospital that are not being covered by revenues. Unless capacity is reduced, projections indicate that Holloway may not survive any longer than 3 more years.

Senior management has given you the task of preparing a plan for downsizing the institution. The business goal is to maintain the full range of surgical and care support provided by the hospital but at about one-third less capacity. If approved, the recommen­ dations from your plan would start in 3 months and should be fully implemented in 1 year. As part of this plan, you are to address the following items:

1. How many personnel to cut from what areas and with what estimated savings. 2. How these staff reductions will be carried out (such as firings, layoffs, buyouts,

etc.). Note any legal issues that may be important to consider in this context. 3. How to implement and communicate the downsizing plan to all employees. 4. What practices should be instituted to assist either separated and/or remaining em­

ployees. 5. Likely issues, such as lawsuits, media scrutiny, political pressures, picketing, and

so forth, that the hospital may face when implementing the plan.

In short, concentrate on the personnel planning, staffing, performance management, and communications issues that are important. For this exercise, assume that any regulatory matters about hospital size have been or would be approved. Further, assume that the management of the hospital has already acted to improve the marketing of hospital services. Additionally, assume that the management of the hospital has already decided to close one wing of the hospital with 150 beds. This free-standing wing has been sold to a long-term nursing care group who will convert it into a residential nursing facility.

Background

Holloway Hospital was established by a group of doctors in 1952 as a private, nonprofit institution to serve the growing eastern segment of the metropolitan area. Growth in this area continued steadily through the early 1980s, and Holloway was able to serve its community during this time. In the early 1980s, Holloway was purchased by a national

health care management company; it was converted to a private, for-profit hospital at that time.

During the 1980s, there were several other significant changes in the health care industry that began to shift the fortunes of Holloway by reducing the demand for hospital services:

1. Declining admissions—The population served by Holloway is becoming healthier overall with less need for hospital services. Currently, Holloway admits about 90 to 100 patients per day, down from highs of about 150 per day. Projections indicate that that number will soon level off to about 70 admissions per day.

2. Cost containment pressures—Medical insurers have been promoting less expensive outpatient services as well as limiting usage of hospital services more strictly. For example, the average length of stay in the hospital in 1980 was about 8 days; 10 years later, the average stay was 6 days.

3. Shortage o f trained medical talent, particularly among nurses—The increasing dif­ ficulty of finding and keeping trained health care professionals contributed to a rapidly rising payroll and benefits cost. This was most acute among the nursing staff.

4. Growth in competitors—New, special-focused medical facilities (such as storefront surgery centers) began to emerge that provided surgical services in smaller and less expensive sites. Holloway currently has 15 operating rooms; the business plan reduces that number to 10.

The desired capacity reductions and related factors are shown in the following table.

2 6 CHAPTER TWO

Now Plan

Number of beds 400 250 Admissions/day 100 70 Operating rooms 15 10 Total staff (FTE) 1,135 800 Annual payroll (millions) $43 $30

Holloway Hospital: Structure

Hospitals are established to provide a unique aspect of health care associated with surgery. Privately practicing physicians are generally not employed by the hospital; rather, the physicians refer their patients needing surgery to the hospital. The doctors pay the hospital for use of the operating room. The patients (often through their insurers) pay both the doctor (for performing the operation) and the hospital (for their services during the patient’s stay there).

Holloway Hospital is a 400-bed hospital that is fully equipped to support basically all forms of surgery and care. The hospital is divided into the following departments:

• Operating room and emergency room. • Nursing.

HUMAN RESOURCES PLANNING 2 7

• Allied medical support services (such as the laboratories, X-ray, radiology, pharmacy, therapy and the like).

• Patient services (admissions and billing). • Housekeeping (food, cleaning, security). • Facility maintenance.

Overseeing this organization is the hospital manager with a staff of approximately 10. The particulars of this structure are shown later. Staffing levels are in full-time equivalents. Holloway employs approximately 20% of its nursing staff on a part-time basis. All other departments are basically staffed with full-time personnel.

Unit Number of Employees

Average Compensation

Tenure (in years)

0-1 1-3 4-10 11-20 20+

Operating/Emergency 80 $45,000 6 14 25 20 15 Nursing 800 $40,000 175 225 250 100 50 Allied 100 $35,000 15 15 30 15 25 Patient Services 50 $30,000 20 15 8 2 5 Housekeeping 90 $25,000 40 35 12 2 1 Maintenance 15 $32,500 1 2 4 3 5 Totals 1,135 $43,350,000 257 306 329 142 101

Note. For this exercise, number of employees and compensation are rounded. Number of employees 55 years or older: 125 Number of employees scheduled to retire during the year: 14 Number of minority employees averages about 15% across departmental groups.

Holloway Human Resources Management Systems

The Human Resources Management practices and conditions of Holloway Hospital are as follows:

• It is not unionized, although management makes special efforts to communicate with the health care personnel (nurses and allied health groups) as a professional courtesy.

• The division of labor is rigidly defined. For example, nurses do not do any clean up in patient rooms; housekeeping does all such work. There is a tightly controlled separation of specialties: operating room nurses do not work in the emergency room; specialists in OB-GYN do not work in Pediatrics.

• Holloway has a defined benefit pension plan. Under this plan, an employee is entitled to a monthly pension payment that is 60% of the employee’s final salary (averaged over the last 3 years of employment). To receive the full payment, the employee must be at least 65 years old and have worked at Holloway for 30 years.

• There is an annual performance appraisal and merit review plan in place. However, there has been little training of supervisors, and the widespread opinion is that there is a general overrating of employees.

• Part-time employees do not receive any benefits.

Lessons from Downsizing

1. Reductions in staff may not improve business operations. Although downsizing may reduce payroll expenses, it does not guarantee gains in revenue or profitability. Thus, an essential part of any downsizing move should include plans for productivity and service improvement. Such matters as organizational structure, job design, training, and staffing practices should be examined. Cost containment goals may be met to some degree through actions other than staff reductions.

2. The management of the hospital wishes to try and keep the best quality health care personnel throughout this process. Retaining the best personnel is a goal for this down­ sizing plan.

3. Personnel remaining after downsizing (the “survivors”) are often traumatized and demoralized, too; their needs for dealing with downsizing should be addressed also. Survivor perception of how the process was handled can have a significant impact on their attitudes about their employer.

4. Forced separations of employees create opportunities for discrimination claims. Criteria used for making cut decisions should be carefully assessed.

5. Rumors can overtake a downsizing effort, and the people charged with carrying out any layoffs should be prepared and ready. Good communication is essential.

6. For early retirement offers: If you include a waiver of age discrimination rights, the offer must be given to the employee in writing with adequate lead time. The employee must be offered something in addition to that to which he or she is already entitled. You may be best advised to notify employees that this plan is coming once you begin to seriously plan for it.

2 8 CHAPTER TWO

3 Job Analysis

H ow much should you p a y an em ployee fo r his or her job?

W hat kind o f criteria should you use to select applicants fo r open jobs?

H ow do you establish a selection procedure that gives you the best chance fo r picking the m ost qualified candidate fo r a position and a t the sam e time reduces the chance o f violating laws against discrimination?

Can the tasks o f a jo b be redesigned to improve em ployee motivation and/or quality o f results?

H ow do you decide what to include in a training program ?

H ow can you p u t together a career management and developm ent program ?

These are among the most basic problems with which a human resources management program must grapple. Even though each of these questions deals with a different facet of human resources management, their answers eventually find a common solution in the process of job analysis. This is to say that job analysis is a taproot to virtually all HRM programming and practices (McCormick, 1976; Rohmert & Landau, 1979; Teryek, 1979).

Job analysis is a collection of methods and procedures for defining certain aspects of a job (Gael, 1983; Schuler, 1992). The analysis of a job or set of jobs can feed a number of HRM applications. As elaborated on later, each form of analysis focuses on distinctive features of jobs. Whether the application is compensation, selection, training, performance engineering, or career management, all begin with the process of job analysis.

Perhaps the most widely known version of job analysis is in its use in making com­ pensation decisions (Beatty & Beatty, 1986; Lister & Mercier, 1993). To achieve this purpose, the duties and activities that characterize a given job are identified and described. The result of this kind of job analysis is a job description. In its most comprehensive manifestation, all jobs in an organization are identified and described. These job descrip­ tions are then put through some form of job evaluation. The job evaluation compares jobs on certain criteria (such as the amount of responsibility required or the complexity of the work). By evaluating the typical duties and activities of different jobs using a

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standard evaluation rating procedure, the relative worth of jobs in the organization can be determined. Jobs can then be ranked into groups (or grades), and priced accordingly.

Keep in mind here that what is being analyzed are the jobs of the organization, not the people in those jobs. A warehousing wholesale operation may have 30 different jobs with a payroll of 100 employees. Obviously, a number of people do the same job; for example, there could be 20 people in a route deliveryperson job.

In the Job Analysis assignment, you complete an analysis of a job held by an associate. As a result of the interview with this person, you will see how a job analysis procedure can identify the typical duties and activities of a job as the basis for producing a job description.

In the Job Evaluation assignment, you work through the process of evaluating several different jobs in order to determine the relative worth of each. You will use a type of point-factor job evaluation procedure to rate the jobs in question.

The point-factor method of job evaluation has been the subject of some criticism (Lawler, 1986). One criticism (U.S. Commission on Civil Rights, 1985) suggested that there may be a bias in favor of male jobs in the job evaluation system that contributes to the disparities in wages between men and women performing comparable jobs. Many observers would agree that although there is no purely objective method of job evaluation, the possibility that job evaluation programs contribute in any meaningful way to wage differences between men and women is slight (U.S. Commission on Civil Rights, 1985).

In Something’s Just Not Right, an employee approaches her manager requesting a transfer. The problem seems to center around problems, either real and/or imagined, of pay fairness and equity. You are asked to identify what the problems are and how job evaluation systems can handle those issues.

Another important use of job analysis is to define minimum hiring qualifications (Algera & Greuter, 1989; Dipboye, 1992; Douglas, Feld, & Asquith, 1989). Here, a job analysis is done to identify what knowledge, skills, and attitudes an applicant should possess in order to be considered for employment. As a result of this analysis, a set of hiring specifications is established as the basis for evaluating the applicants for an open position.

A third use of job analysis is for training program planning purposes (Nadler, 1982; Rothwell & Kazanas, 1992). What knowledge and skills should an employee possess in order to perform his or her job effectively? How is it possible to identify what competencies a skilled performer should have? Again, job analysis techniques that identify job tasks are used as the basis for establishing what should be taught in a training program.

There can be a trade-off in the costs associated with buying or making talent, that is, between the level of entry-level skills sought in hiring specifications and the competencies produced through training. Take the position of a computer operator. If hiring specifica­ tions for this position are set so high that the new employee must be fully competent, training costs will approach zero. However, in a competitive labor market, the compen­ sation level would have to be set high to attract candidates with those qualifications. On the other hand, compensation costs could be lowered by reducing the entry-level hiring specifications, allowing less fully qualified individuals to be hired. However, the lower the entry-level skills, the greater the likelihood that training expenses would increase.

A fourth use of job analysis can focus on various applications of workflow analysis. In this context, job analysis can be used to identify inefficiencies in the workflow process

JOB ANALYSIS 31

(Harbour, 1994). It can also be used to identify potential selection procedures (as in the case of work sample testing). Finally, this form of job analysis can be used as part of planning for pay-for-knowledge or skills-based pay plans (Bunning, 1992; U.S. Depart­ ment of Labor, 1988).

Another use of job analysis combines all these approaches in the development of career management and development programs (Pearlman, 1980). Different kinds of job analyses could be used to define the duties of different jobs (permitting the formation of job ladders), to establish training requirements for specific jobs, and to identify skills families.

The assignment Where Is Everybody? in chapter 7 focuses on the issues of job analysis for career planning and management program purposes.

Job analysis is an ensemble of techniques that share a common purpose of highlighting certain characteristics of jobs. The output of this analysis may assume different forms, such as job descriptions, hiring specifications, training competencies, or career ladders. Likewise, the fruits of job analysis may be used in different ways to guide compensation, selection, training, and performance management decisions. Regardless of the application, job analysis keeps human resources management grounded in the needs and requirements of the jobs to be performed in the organization.

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Use the following worksheet to complete an analysis of a job held by an associate (classmate, friend, relative, coworker). Interview that person to answer the questions as specifically as possible.

Job Analysis

Title of Job

1. What is the general purpose and primary function of the job? Answer in three sentences or less.

2. List the typical tasks and activities performed in this job. Once all major tasks are listed, prioritize the tasks in terms of one of these criteria (check one):

[ ] Frequency—how often it is performed [ ] Importance—how critical the task is to overall successful job performance [ ] Difficulty—how difficult the task is to complete

Priority

3. List any equipment used on the job and how frequently it is used (seldom, sometimes, frequently).

4. Describe two typical decisions made or problems solved in this job.

JOB ANALYSIS 3 3

5. Identify the people (either employees or nonemployees) with whom you regularly come into contact.

6. Describe the typical location(s) where the work is done. Note any extreme or dan­ gerous conditions present at the location(s).

7. Is any special education, training, certification, or licensure needed to perform the job? [ ] No [ ] Yes (explain)_____________________________________________

8. How many employees are you officially responsible for supervising? Directly________ Indirectly________

9. Check if you regularly are expected to do any of the following with other employees: [ ] Scheduling employees to work [ ] Assign work tasks [ ] Train others in their job assignments [ ] Resolve specific operating problems [ ] O ther:____________________________________________________________

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For this exercise, you evaluate certain jobs. The purpose of this job evaluation is to determine the total point value of the jobs using the enclosed Job Evaluation Rating system. There are five compensable factors that this system uses to rate jobs:

• Job knowledge. • Complexity. • Relations with others. • Supervision of others. • Working conditions.

The rating levels for each factor are provided.

Instructions

1. Review the five evaluation factors and the rating levels for each. Observe how the degree of activity and responsibility increase as the levels increase. Your instructor will give you the point values for each factor; include those values on the appropriate space on the forms.

2. In your group, review each job description to familiarize yourself with the job and to see if you have any questions.

3. Write the name of each job to be evaluated at the top of the columns on the Job Evaluation Summary Worksheet.

4. For the job under evaluation, begin with the job knowledge factor. What is the typical level of job knowledge required for that job? The group should agree on the rating. If there is uncertainty about what the level should be, seek clarification from the job incumbent, or make a reasonable assumption.

5. Once a decision is reached, enter the corresponding point value in the correct place on the Summary Worksheet.

6. Repeat this basic process for each job factor. When you have rated the job on all five factors, summarize the scores for all five factors and create a total point value for the job.

7. Repeat this process for all the other jobs to be evaluated.

Job Evaluation

JOB ANALYSIS 3 5

Factor 1: Job Knowledge

This factor measures the minimum level of knowledge needed by an employee in order to be able to perform the duties of this position. Job knowledge can be acquired through formal education, training, and/or job experience.

Point Level Standard Value

Job Evaluation Rating System

1. Basic ability to read, write, and understand English language, and to per­ form basic arithmetic calculations. Equivalent to high school degree.

2. General knowledge of basic business practices and work procedures for a specific function (such as bookkeeping, data processing, or operations). Equivalent to high school degree plus several years job experience, or associates degree.

3. Comprehensive understanding of a specific field or function like account­ ing, information management, marketing, sales, production, or engineering. Equivalent to college degree or related level of work experience.

4. Thorough knowledge of a professional field, including training in specific professional methods and techniques. Equivalent to graduate degree.

5. Systematic knowledge of several fields related to the functioning of the organization.

Factor 2: Relationships With Others

This factor measures the nature of the working relationship that the employee experiences with others, either inside or outside the organization.

Point Level Standard Value

1. Working relationships are limited to routine dealings with other employees in the same department.

2. Occasional contacts with personnel in other departments or outside vendors or customers. Ordinary courtesy and tact required; supervisor maintains primary responsibility for outcomes of contacts.

3. Regular phone or in-person contacts with other departments, vendors, or customers. Relationships involve moderately complex transactions that requires ability to manage in terms of gains or losses to the organization.

4. Frequent phone or in-person contacts with senior administrative repre­ sentatives of other organizations, vendors, regulators, customers, media, or the community at large. High levels of tact and judgment required to avoid serious losses to the organization.

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Factor 3: Complexity

This factor measures the complexity of the work performed. Complexity is assessed in terms of the degree to which the work is routine or unpredictable, the amount of inde­ pendent action allowed, and the nature of decisions that can be made.

Point Level Standard Value

1. Work performed is routine and repetitive. Work is continually supervised with little room for choice of method or procedure to follow. Decisions are limited to complying with preset policies.

2. Work is somewhat routine and repetitive. There are general rules to guide decisions. However, employee has some leeway to interpret those rules and make adjustments to improve accuracy or efficiency of work. Employee receives regular supervision.

3. Work is varied, with some routine. Employee is expected to adapt and interpret policies and has broad leeway to act in most appropriate manner. Employee receives general supervision.

4. Work is professional or technical in nature. Employee is expected to apply professional or technical standards to solve the problem or complete work assignments. Employee works according to standards of chosen field.

5. Work is of a broad, varied nature that often involves new and unspecified issues. Independent action is expected and common. Employee involved in establishing policies or formulating new goals and directions for the organization as a whole.

Factor 4: Supervision of Others

This factor measures the degree of responsibility for directing, controlling, and overseeing the work of other employees.

Point Level Standard Value

1. Not responsible for supervising others. 2. Serves as a lead worker in directing others in the work group by assigning

tasks, training, and helping resolve operating problems. No formal supervisory authority.

3. Serves as formal supervisor of others in a group or unit. Has authority to hire, fire, evaluate, and reward.

4. Manages others through subordinate supervisors. Controls others through long-range plans, budgets and forecasts, and general policies.

5. Executive leadership over entire division or business unit. Decides on organizational direction, resources allocation, and general management goals.

6. Top executive management. Responsible for performance of the entire organization.

JOB ANALYSIS 3 7

Factor 5: Working Conditions

This factor measures the physical conditions of the work, including the degree of danger or risk found in the work, the amount of extreme physical conditions experienced, and the amount of physical effort required in the work.

Point Level Standard Value

1. Work occurs primarily indoors. There is little if any risk from dangerous working conditions. Work does not require any strenuous activity.

2. Work requires some amount of time outdoors and/or in somewhat risky conditions. Some amount of physical labor is required in lifting, moving, shift­ ing, positioning, and so on. May require continuous standing.

3. Work occurs primarily outdoors and/or involves frequent or continuous exposure to dangerous or undesirable working conditions. Work requires con­ tinual physical labor.

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Use the given format to record the conclusions of your job evaluation study. List the jobs evaluated at the heading of the columns along the top line. Then, add in the point value for each factor as evaluated in the study. Finally, create a total point value for each of the jobs by adding up the individual scores.

Jobs Evaluated

Job Evaluation: Summary Worksheet

Job knowledge

Relations with others

Complexity

Supervision of others

Working conditions

Total point value

JOB ANALYSIS 3 9

Something’s Just Not Right

Mary Williams had been supervising the customer operations department for the Provident Services Corporation for almost 4 years. There were five operations specialists in the department who made sure Provident’s various customer accounts were kept accurate and up to date. Mary and the specialists were supported by a secretary. Mary was proud of her ability to establish a work group that was strong in both morale and performance. Building and maintaining a high performance team was particularly important, because there was a constantly high volume of work that kept them continually busy.

One Tuesday morning, Mary’s secretary Jan Franklin knocked on Mary’s door and asked to see her. When Jan entered the office and closed the door behind her, Mary knew there must be a problem. The prospect of a problem worried Mary, because Jan was one of Mary’s favorites. Jan had begun working at Provident shortly after graduating from high school. As an employee, she had earned a reputation as a very good and reliable employee. Mary felt Jan had a lot of potential and took every opportunity to develop Jan’s talents and abilities through special assignments, participation in all departmental planning and problem-solving activities, and outright delegation of various departmental administrative duties (like coordination of production control charts and service quality follow-through). Indeed, Jan now worked more as an administrative assistant than a secretary.

Jan was clearly bothered by something as she sat in the chair across from Mary’s desk. Jan nervously handed Mary a Provident job-posting form. Jan avoided making eye contact.

Mary was stunned. As far as Mary knew, Jan liked her job and working in the operations department. Mary knew that all the specialists liked and valued Jan. Mary couldn’t guess what the problem might be.

Mary stayed composed and after a minute of looking over the form, spoke casually: “So, you want to apply for the executive secretary’s job in the sales division.” Neither person was looking at the other. “To the say the least, I ’m surprised. Could we talk about what’s going on with you, Jan?”

Jan looked at her hands, deep in thought. Mary waited. Finally, Jan looked at Mary and said: “My job is only a Grade 12. When I saw that

position listed last week, I also saw that it was a Grade 14, two full grades higher. That’s a lot of money!”

Jan let the message sink in, then continued: “I think that you know I have a friend Bill Magruder who works near their offices there. Bill told me that he sees the secretaries over there sitting around doing nothing half of the time he is there.”

Jan’s voice began to rise as a tone of anger and resentment become more apparent. “Look, Mary, you know how hard I work, we all work, around here. I mean I’m always busy. Why should I work so hard in a Grade 12 job when I could move into a job that pays more and requires less work? After all, the requirements for that job are just a little higher than the ones for my current job, and that merit increase you gave me last month didn’t amount to anything.”

Mary waited for Jan to finish, then thought for a second before beginning: “Jan, I’m hearing you say that you’re upset because you believe you’re not being paid enough for

4 0 CHAPTER THREE

the work you do here. I’m also understanding that you want to move to another job that pays more for less work. Is that a fair summary of your position?”

Jan nodded her head in agreement. As Mary sat there thinking, she knew that Provident’s job evaluation system had been

recently brought up to date and that, as a result, differences in job grades reflected real differences in the background, skills, and responsibilities required of jobs. Mary wanted to help Jan through this issue, because Jan was both a good employee and a nice person. However, Mary was very concerned that Jan might be making a wrong choice if she switched to the executive secretary’s position. Obviously, Mary did not want to lose Jan, particularly if the move would not be the best for Jan’s long-term interests and if it was based on faulty reasoning. Mary wondered what she should do.

Questions

1. What reasons did Jan give for wanting to leave? Evaluate each reason.

2. How should Mary respond to Jan’s request to transfer?

3. How should Mary respond to Jan’s salary complaints?

4 Staffing, Recruitment,

and Selection

One essential human resources management task is to make sure the organization is properly staffed. When done effectively, the staffing, recruitment, and selection process provides a flow of qualified individuals for filling open positions within the organization on a timely and efficient basis. However, when done poorly, the staffing process can result in delays, excessive cost, poor matches between worker skills and job requirements, turnover, and legal challenges. Planning and controlling the staffing and selection process is a vital means by which organizational productivity can be improved (Campbell, Camp­ bell, and Associates, 1990).

With the possible exception of employee benefits, there is no other human resources function that is subject to so many laws and regulations as the staffing and selection process (Douglas, Feld, & Asquith, 1989). In addition, the process by which applicants are assessed for their job qualifications has been heavily researched, producing a growing volume of “best practices” procedures and techniques in selection (Campbell, Campbell, and Associ­ ates, 1990; Dipboye, 1992; Schmitt, Borman, and Associates, 1993; Wigdor&Green, 1991). Thus, although the staffing and selection function is of vital importance, so is the function channeled by legal and regulatory requirements and driven by informed scientific opinion. Effective staffing and selection practices are both critical and complex.

The process of matching qualified applicants with organizational jobs is not a single event. Rather, this process can be broken into three distinct operations. Staffing is the umbrella process of filling the organization’s manpower needs. Recruiting is the process of attracting qualified applicants in sufficient quantity to meet manpower needs. Finally, selection is the process of collecting information from applicants about their qualifications so that a hiring decision can be made.

Each function has its own distinctive tasks and procedures. The exercises contained in this section explore each of these functions in more detail.

STAFFING

Traditionally, it was common for human resources managers to accept the existing or­ ganizational structure as a given, and then to seek to fill openings to that established complement of positions. To the extent that this approach is taken, the performance of

41

the human resources management function is dependent on effective recruiting and rapid, accurate selection practices.

With the economic restructurings taking place in the economy, though, this traditional orientation to filling manpower needs has been increasingly replaced by a more critical approach to organizational staffing. In this newer approach, human resources managers can add value by questioning the existing structure and recommending alternatives to full-time staffing to meet organizational production needs.

A number of new staffing arrangements have evolved over the past 10 to 15 years that provide organizational decision makers more latitude in designing how the organization will get its work done. Among the more prominent innovations in staffing that join the long-practiced option of temporary employees are: job sharing, employee leasing, out­ sourced services, and consultants or independent contractors. Together, these staffing innovations mean that the organization can plan to have its work done without hiring full-time employees to do it. One obvious advantage of such practices is a more flexible workforce with lower labor costs.

This significant shift in the structure of employment and the workforce has been called the “contingent workforce” (Women’s Bureau, 1988). In some cases, people who work on a contingent basis may not be considered as “employees” but as “independent con­ tractors.” Under the laws and regulations governing this situation, if a worker is considered an independent contractor, the employer is not required to provide any benefits to that person, nor is that person protected by any employment laws. Likewise, the worker is paid a fee for services (not a salary or wage from which taxes can be withheld). In this framework, there are a number of different actors involved, each with their own interests: the employer, who wants to reduce labor costs; the worker, who wants to be treated fairly and properly (either in terms of protections and benefits as an employee, or payment and dealings as an independent consultant); and the government through the Internal Revenue Service, who wants to collect all taxes legally due (HR Manager’s Legal Reporter, 1992; Society for Human Resources Management, 1993).

The assignment on Employee or Independent Contractor? looks at the issues involved in deciding whether performers in a given job are to be considered employees or inde­ pendent contractors. Even though this job is rather, so to speak, exotic, the principles and issues covered by this case illustrate the problems involved. In this exercise, you are asked to determine, based on the evidence provided, whether to classify the personnel in the job in question as employees or independent contractors.

RECRUITING

Once a decision is made to staff an open position, the issue is to find someone to fill it. The process of finding and attracting qualified applicants is the heart of the recruiting process. Using recruiting methods that are cost-effective, timely, and compliant with laws and regulations is essential to the success of any recruiting effort.

Often, as part of the recruiting process, there is a tendency on the recruiter’s part to glamorize the job and organization in order to secure the applicant’s interest in joining. Interestingly enough, though, research in this area suggests that such unrestrained recruit­ ing exuberance may actually backfire, because the applicant’s expectations about what it

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STAFFING, RECRUITMENT, AND SELECTION 4 3

will be like to work there will be too high and that can lead to a dispirited employee ready to leave after “reality shock” sets in. The recommended govemer to this tendency is a procedure called a realistic job preview (Wanous, 1980).

The processes of staffing and recruiting should be considered in terms of how those processes impact on the composition of the workforce eventually hired. Many organiza­ tions are obligated to comply with equal employment and affirmative action (AA) re­ quirements so that certain classes of people—especially minority members, women, and disabled individuals—are not discriminated against in hiring practices. Findings of un­ lawful employment discrimination can lead to costs in court settlements, bad publicity, and employee ill will.

SELECTION

Finally, once applicants for positions have been attracted to the organization, they must be evaluated and assessed in terms of their relative fitness for assuming the duties of the open position. There are a variety of selection devices that can be used for this purpose.

By far the most common selection device is the personal interview. In this intentional conversation, the interviewer supposedly gathers sufficient information about the applicant in order to render an assessment of the person’s qualifications. Although this procedure sounds logical and appropriate, the only problem is that the typical “unstructured” inter­ view often is not as effective a predictor of future job performance as would be expected (Dipboye & Gaugler, 1993).

In Interviewing Two Applicants for the Job, you observe a learning experiment in which a manager interviews two applicants for an open position.

There are a variety of other, more effective selection devices available for selecting job applicants. These methods include work samples, paper and pencil tests, assessment centers, structured interviews, and biodata. Generally, these methods require the applicant to actually demonstrate skills and abilities necessary for successful job performance.

These various selection devices can be used in combination. Indeed, one of the chal­ lenges facing a staffing manager is not only to pick a selection device(s) but also to arrange for the most cost-effective result.

In the assignment Staffing a Greenfield Automotive Plant, you have the opportunity to design a comprehensive selection plan for a “start-up” manufacturing plant. The skills and talents specifications for this situation are rather unique and specialized, though. As a result, the selection process could be more complicated than that found in typical experience.

The Affirmative Action at Developmental Systems Corporation case provides a detailed review of the hiring practices at Developmental Systems Corporation (DSC). As a federal contractor, DSC must prepare an affirmative action plan describing its progress in em­ ploying minorities and women. You will look through the information to determine whether there are any concerns that DSC should address, and if so, to recommend re­ sponses to those conditions as part of the creation of an affirmative action plan for DSC.

Providing the talent needed to perform the work of the organization is a critical human resources task. These exercises provide a number of illustrations of the difficulties and opportunities throughout this process.

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Employee or Independent Contractor?

In general, under the law, a person may perform work for another by occupying one of two roles: employee or independent contractor. If the person works as an employee, he or she receives a salary or wages from which income taxes are withheld. The employer is obligated to provide benefit and insurance payments for Social Security, unemployment insurance, and workman’s compensation. Further, the employer would generally be re­ quired to pay a minimum wage and overtime. In addition, if other benefits are offered, the employee should be eligible for those benefits, also.

If the person works as an independent contractor, however, the person is not entitled to those various benefits and requirements. Independent contractors are not covered by safety, labor, or discrimination laws. In general, an independent contractor is seen as having an independent occupation over which the person exercises control in the per­ formance of the job. The buyer of these services either accepts or rejects the finished product and pays a fee for that result.

Because of the payroll tax implications, the Internal Revenue Service has established various factors for judging whether the person has either employee or independent con­ tractor status. The factors concern the extent to which the person operates independently in the performance of the work. The factors to be considered include:

1. Control over the details, means, and manner of performance of the work. • If the employer retains the right to direct the means and manner of the work, an

employment relationship likely exists. If the employer only controls the result and not the process, an independent relationship is likely.

2. Where the work is performed. • If the work is done at the employer’s site, an employee relationship is likely.

3. Whether the person is engaged in a distinct occupation or business with the oppor­ tunity for profit or loss. • If the worker receives a fixed amount of payment for a fixed period, an employee

relationship is likely. An independent contractor status is likely if the worker agrees to do specific jobs for specific prices in advance.

4. The skill required to do the work. • Is a specialized skill required to perform the task? If yes, an independent contractor

relationship is indicated. 5. Whether the employer provides tools, equipment, materials, and so on.

• Independent contractors usually furnish the means for completing the work. 6. How long the person is engaged in the work.

• Is the working relationship open-ended (employee) or is there a preset time limit (contractor)?

7. The method of payment: by the hour (employee) or by the job (independent con­ tractor)?

8. The intentions of the parties: Do the parties intend the relationship to be a contractual one?

9. Are benefits provided or payroll taxes withheld? • If yes, an employee relationship is indicated.

STAFFING, RECRUITMENT, AND SELECTION 4 5

Note that no one factor is decisive. Rather, all the factors must be considered together in reaching a judgment about the status of a working relationship.

The Case of the Topless Dancers

The Premium Corporation operated The Royal Club as an upscale, trendy nightclub and bar in Dallas. The club featured topless dancers.

Under the terms of the relationship between The Royal Club and the dancers who worked there, the club classified the dancers as independent contractors. To attest to this relationship, the club required the dancers to sign a contract with the Club acknowledging that they could dance in any club they wanted at any time, that the club had no right to control the means or manner of the dancing, that the dancers supplied their own costumes, and that the dancers were not employees. The dancers were required to sign this agreement before being allowed to dance, and the agreement was nonnegotiable. Further, each dancer was required to pay a $35 fee each night to The Royal Club in order to dance. The dancers usually worked five or more nights a week at the club and seldom if ever worked at any other club.

The dancers were not compensated in either salary or wages by The Royal Club. The total compensation obtained by the dancers was from tips received for performing either on stage or at private tables.

The club arranged show times and set limits on the dancers’ conduct while at the club. Further, the club automatically deducted 20% from credit card tips.

According to The Royal Club, dancers should be treated as independent contractors because the club exercised limited control over the dancers, and the dancers controlled the essential personal characteristics that determined their profit or loss: their initiative and skill.

Assignment

Are the dancers independent contractors or employees?

4 6 CHAPTER FOUR

Interviewing Two Applicants for the Job

For this exercise, two applicants for a position of customer service representative will be interviewed by the manager of that position.

The position of customer service representative involves servicing and selling a variety of products to customers. There is a large amount of direct customer contact, either in person or over the phone. The service representative is expected to learn about all the products offered. As part of customer servicing, the service rep may be involved in product returns or handling customer complaints.

One person in the class will be selected to be the manager who will interview two different applicants (other students) for the job. For this exercise, assume that the manager has never met either person before. In fact, the only knowledge the manager has of the two applicants is from their resumes sent by the human resources department. Human resources indicates to you that these are the two best qualified candidates for this position.

The manager will have 5 minutes to interview each candidate. During that time, the interviewer can ask anything and as many questions as possible. Note: For the sake of this exercise, assume that the initial welcome and opening niceties have already been handled; thus, go straight to the interviewing questions.

Use the following form to make notes comparing the two candidates and the questions asked by the manager.

Candidate A

Candidate B

STAFFING, RECRUITMENT, AND SELECTION

4 8 CHAPTER FOUR

Career Goal:

CANDIDATE A

RESUME

I am interested in a challenging job in customer service that provides me good career opportunities for growth and advancement

Customer Service Jobs January 1989 to February 1994 Candidate A worked for three different firms in various customer service capacities, including sales, service, telemarketing, returns, and collec­ tions.

Education

Training

Suburban High School Graduate 1987 Jackson Community College

28 hours credit toward associates degree

Essentials of Good Customer Service 3 days

Cross-Selling and Telemarketing 2 days

Fundamentals of Credit and Collections 4 days

1989

1990

1992

Supervisory Ratings: Always received good ratings from my supervisor

STAFFING, RECRUITMENT, AND SELECTION 4 9

CANDIDATE B

RESUME

Career Goal: I am looking for a job that allows me to work with a better manager and in less stressful and more appreciative working conditions

Customer Service Jobs January 1989 to November 1993 Candidate B worked for two different firms in various customer service jobs. One job involved mostly direct and phone sales, and some customer service. The other job included various “back office” support activities, including consumer credit analysis.

Education Middlebrook High School State University

Completed Freshman year of study

Graduated 1986

1988

Training Completed several training courses in customer service over past few years.

Supervisory Ratings: I always received acceptable ratings from my supervisor.

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Staffing a “Greenfield” Automobile Plant

Introduction

You work for one of the U.S. car companies. This company recently entered into a partnership with a Japanese car company to manufacture cars in the United States. How­ ever, the purpose of the partnership was to use Japanese management and manufacturing techniques as the foundation for plant operations. A new plant is being constructed on a “greenfield” (i.e., brand new) site in an outlying region of the state.

Approximately 2,500 production workers will need to be hired for this plant. More than 20,000 people are expected to apply.

Your design team is charged with the responsibility for creating the most cost-effective selection procedure possible. Assume that you have sufficient time and resources to complete whatever reasonable selection procedure you create.

Additional Information

1. The state in which this plant is being built offered various forms of assistance through its offices and agencies if the partnership located the plant in the state.

2. Consistent with the wishes of both parent companies, the plant and production system will be organized in terms of 10- to 15-person teams. The team will make job assignments and handle production issues. Further, each team member is expected to learn every job for which the team is responsible.

3. In Japanese practice, much emphasis is placed on mutual teamwork, supportive team interaction, and team harmony. In addition, as in Japan, employees are expected to be continually involved in creating and initiating ideas for improvement. Needless to say, all employees are expected to perform at the highest standards of performance and quality.

Desired Employee Characteristics for Selection

Given this context, selected employees should have the following characteristics:

1. Able to work effectively in teams. 2. Able to continually suggest and communicate innovative ideas. 3. Supportive of others and willing to pitch in. 4. Able to handle complex jobs at a full level of attention. 5. Trainable. 6. Demonstrate high work standards in safety, productivity, and quality.

Issues to Consider

When designing the selection system, you may want to consider the following questions:

1. How can the large, expected entry pool of applicants be most efficiently reduced in size so that the best qualified applicants remain?

2. What kinds of hurdles or screens should be created? How can the cost of those screens be kept to a minimum while still preserving good predictive power?

3. Are there ways to automate or delegate steps in this process?

4. What kinds of selection procedure(s) will give you the best information on each desired employee characteristic? Note that you should have at least one selection procedure yield information on each desired employee characteristic.

STAFFING, RECRUITMENT, AND SELECTION 51

5 2 CHAPTER FOUR

Developmental Systems Corporation (DSC) specializes in developing, selling, operating, and servicing commercial applications of information management systems. DSC was formed earlier this year by the merger of Development Associates and Software Systems. As a result of the merger, DSC now includes almost 500 employees, many of whom are in professional, technical, sales, and service positions.

The growth of DSC’s parent firms has been phenomenal. Both parent firms began about 5 years ago as start-up ventures and grew rapidly. A major boost to the growth of Software Systems came 2 years ago when they landed a contract to provide software services to several area agencies of the federal government. The contract, now worth more than $365,000 annually, is still in effect.

DSC’s offices are located in Winston County, an outlying suburban county of a major metropolitan area. The managers and professionals working for DSC are drawn from all over the metropolitan area, whereas the technical and operative support staff live mostly in the tri-county region of Winston, Jericho, and Bonner Counties. The Standard Metropolitan Statistical Area (SMSA) numbers more than 2 million people and is composed of five counties and the city center. There are a number of colleges and universities in the area, including two schools serving predominately minority populations and one “girls” school.

DSC Structure

DSC is divided into three main divisions. The software development group creates and in­ stalls unique software applications for organizations. The data management group provides data processing services on an outsourcing basis. The computer servicing group sells, installs, and repairs computer systems. See Exhibit 4.1 for details of these three divisions.

The executive group is composed of 12 managers. Two are women. There is no minority member in an executive position.

Affirmative Action and DSC

As a federal contractor, DSC is required to have an Affirmative Action Plan (AAP). Since Developmental Associates did not do any federal contracting, they never prepared a plan. However, Software Systems had prepared a plan, but it is now out of date. A new AAP is needed.

Assignment

Use the information provided to answer the following questions that will form the foun­ dation of a new AAP. Then, complete your analysis by filling out the items on the Analysis and Recommendations worksheet.

1. Are there any problems with the employment of women and/or minorities by De­ velopmental Systems Corporation? If so, what is (are) the problem(s)? Where are those problems located? Note: For this exercise, concentrate on the three main

Affirmative Action at Developmental Systems Corporation

Introduction: Developmental Systems Corporation

STAFFING, RECRUITMENT, AND SELECTION 5 3

EXHIBIT 4.1 DSC Organizational Structure

DSC Executive

Group

Staff Departments

Software Development 1-------------

Data Management Computer Servicing

Mi Wo Mi Wo Mi Wo

Managers 6 1 3 18 2 4 16 4 5 Professionals 37 6 16 22 4 3 14 3 6 Technicians 3 0 0 14 2 2 55 10 21 Operators 8 2 1 86 26 14 55 17 23 Clerical 6 3 6 24 16 23 26 7 20

Totals 60 12 26 164 50 46 166 41 75

Note. T = Total number of employees in Division; Mi = Total number of minority employees; Wo = Total number of women employees.

divisions and the executive group, ignoring the staff departments. Consider only the managerial, professional, and technical groups.

2. Based on your analysis, prepare the following positions and recommendations. As­ sume that you are making a plan for the next full year. • Hiring goals by job category, if needed. • AA policy communications to parties either inside and/or outside the company. • Other programs to help achieve these goals, including (but not limited to) recruit­

ment, selection, training, development, and management.

Attachments

Exhibit 4.1. DSC Organizational Structure. The general organizational structure for DSC is shown in Exhibit 4.1. Note that there is a typical career path in DSC for personnel moving into management positions. For example, it is common for people hired as operators to move into the position of technician. Further, there are a number of professionals who are promoted from the technician ranks, especially if they have a college education. A number of managers are selected from professional groups.

Exhibit 4.2. Turnover Experience. The turnover rates for the three occupational groups under study here are estimated.

Exhibit 4.3. Utilization Analysis. This table identifies the number of women and minorities in the DSC workforce in terms of the five occupational groups found in the DSC organization. The “minority” category includes: African, Hispanic, and Asian Americans, and American Indians.

5 4 CHAPTER FOUR

EXHIBIT 4.2 Turnover Experience

The average estimated annual rate of turnover for the three occupational groups under study is shown. Turnover includes all forced and voluntary separations (including retirements) divided by the average number of authorized positions for the occupational group during the year.

Officials & managers 17% Professionals 24% Technical employees 14%

EXHIBIT 4.3 Utilization Analysis

Minorities Women Totcil

Job Group Employees # % total # % total

Officials & managers 63 9 14% 18 29% Professionals 116 22 19% 42 36% Technicians 72 12 17% 23 32% Operatives 149 45 30% 38 26% Clerical 79 40 51% 71 90%

Total 478 133 192

Exhibit 4.4. A vail ability Analysis. The availability analysis includes census figures on the total workforce in the metropolitan area, again by occupational group.

EXHIBIT 4.4 Availability Analysis

Technicians Managers and Professionals

Tri-County Region Metropolitan (Winston, Jericho, Bonner) Area Total

Total labor force 314,000 997,000 Female 153,000 485,000 Minority 78,000 285,000

Employment by occupational group (Percentage of total) Executive, managerial

Total 50,000 76,500 Female 23,800 (46%) 24,000 (48%) Minority 6,000 (12%) 17,500 (23%)

Professional Total 67,500 131,000 Female 33,000 (49%) 64,000 (49%) Minority 23,500 (35%) 38,000 (29%)

Technical workers Total 45,000 81,000 Female 20,500 (45%) 31,000 (38%) Minority 14,500 (32%) 23,000 (28%)

STAFFING, RECRUITMENT, AND SELECTION 5 5

Exhibit 4.5. Selection Practices. This provides a narrative account of the typical hiring and selection practices used to find and pick candidates for open positions.

EXHIBIT 4.5 Recruiting and Selection Practices

The typical hiring practices of DSC are described in the following. In general, managers who are doing the hiring have not been trained in interviewing techniques. DSC does not have a tuition assistance program or any policies for employee continuing education. Decisions about employee training are made solely by the division manager.

Management positions: Most management openings are recruited through word-of-mouth referrals to people either inside DSC or in competitor firms. Most of the newly hired executives come from other organizations. About half of the management group was promoted from professionals either in DSC or its parent firms.

Professional positions: About two-thirds of the professionals were recruited into entry-level positions from the area universities. The minority and girl schools have not been visited, however. A third of the personnel in this group were promoted from technicians with college background.

Technician positions: Most of the technicians are picked from operators by department manager choice. Department managers rely on supervisory opinions and training records of the candidates under consideration. The main trade schools (located in the city) are not used.

Operator positions: There are two sources of operator talent. About one third of the operators are local high school graduates, recruited through the Winston County newspaper. They usually have about 1 to 3 years experience. Another third come through the local community college placement office.

Exhibit 4.6. Selection Experience. The table presents information about the recruiting results and selection ratios for the three occupations.

EXHIBIT 4.6 Selection Experience (This Year to Date)

Number of

Openings Applicants Hired Ratio

Management 5 White male 11 4 = .36 Minority 5 1 = .20 Women 2 0 = .00

Professionals 20 White male 21 11 = .52 Minority 16 3 = .19 Women 26 6 = .23

Technicians 8 White male 18 5 = .28 Minority 4 2 = .50 Women 5 1 = .20

56 CHAPTER FOUR

Analysis and Recommendations

I. Problem areas

1. Utilization: Minorities: DSC Labor force

Managers_________ ___ % %

Professionals ___ % %

Technicians ___ % %

2. Recruiting practices:

Managers___________________________

Professionals_________________________

Technicians__________________________

3. Selection ratios (compared to White males)

Minorities Women

Managers________________ _______ _______

Professionals _______ _______

Technicians _______ _______

II. Hiring Goals

Estimated # Hiring Goals of Vacancies Minorities/Women

Officials and managers _______ _______

Professionals _______ _______

Women: DSC Labor force

% %

% %

% %

Technicians

III. Program recommendations

Policy communication:_____________________________________________________

STAFFING, RECRUITMENT, AND SELECTION 5 7

Recruitment:

Selection:

Training:

Education:

Career development:

Other:

5 Appraising

Employee Performance

The assessment and evaluation of employees is a fundamental process within any organi­ zation (Bretz, Milkovich, & Read, 1992; Latham & Wexley, 1981). Such basic issues as whether a given employee is performing the job effectively, how much of a monetary reward to give an employee, or whether an employee can be promoted into a more responsible or challenging position are all dependent on judgments made about each employee in question. Employee appraisal is a fact of organizational life that has very profound implications for both employees (personally) and for the future success of the organization. Employee appraisal is a key component of the larger process of managing employee performance (Brennan, 1989; Morf, 1986; Schneier, Beatty, & Baird, 1987).

Such a critical process should be one that occurs easily and effectively. Is this always the case, however? How well does an appraisal system typically work? How can such evaluation systems be made to work more effectively?

These are questions that researchers have pursued for a number of years. The bad news is that appraisal rating systems are easily subject to error and negative impact (Banks & Murphy, 1985; Bretz, Milkovich, & Read, 1992; Carson, Cardy, & Dobbins, 1991). The good news is that there are developments in the field that suggest ways by which the appraisal process can be improved. The exercises in this chapter explore some of the dilemmas and opportunities in the performance appraisal process.

PROBLEMS AND DILEMMAS

For both managers and employees, appraisals do not universally and automatically create desirable outcomes (Beer, 1981). To any person who has delivered or received an appraisal, this assertion may elicit little surprise. Yet, the proposition that performance appraisals create problems and dilemmas flies in the face of pronouncements about how appraisals should help improve employee performance by providing feedback and reinforcement (Banks & Murphy, 1985; Beer, 1981). At the center of these issues are basic questions about the accuracy (or validity) and consistency (or reliability) of the rating process, and about the counterproductive impacts that ratings may have on employees.

5 8

Consider, for example, the conclusion of an early student of the field (Thorndike, 1920) that illustrates the problems of accuracy and consistency in employee ratings. After re­ viewing studies of personnel ratings, Thorndike concluded that there was “a marked tendency [for the rater] to think of the person in general as rather good or rather inferior, and to color the judgment of the qualities by this general feeling” (p. 25). This form of rating mistake would come to be called a halo error: Because of the rater’s general feeling of like or dislike about the person being rated, all component ratings are judged accord­ ingly. Years later, Borman (1978) tested how good ratings could be under the most ideal circumstances and found that rating accuracy would never be perfect. A perfect rating situation would be one in which the rater is well trained in the task or job, can observe the person’s performance fully and completely, and knows how to use the rating procedure. Such conditions are found, for example, in judging of Olympic gymnastic and diving contests, yet seldom do judges all agree. Finally, Heneman (1986) found only moderate correlations between the ratings given by supervisors and more objective output measures of the same employee’s performance.

In another study, Pearce and Porter (1986) found that professional employees who received satisfactory—but not excellent—ratings underwent a decline in their commitment to the organization. Organizational commitment refers to the extent to which an employee believes in the goals of the organization and is willing to exert extra effort to see those goals accomplished. When commitment slides, as it did for up to a year in the case of these professionals, withdrawal behaviors such as lowered job involvement and turnover are likely.

In the Experiences With Performance Appraisals: Interview Guide assignment, you interview a manager or supervisor who has conducted a performance appraisal. The purpose of this interview is to gather information about the impacts and effects of per­ formance appraisals as perceived by the rating manager. The information collected through this procedure will be used to consider some of the presumed benefits of performance appraisals on managing employees.

The search for effective solutions to the problems and dilemmas of performance ap­ praisal have consumed researchers for several generations (Murphy & Cleveland, 1991). Much of the research in the 1960s and 1970s focused on ways to improve rating scales and on rater training. These research efforts were typically directed at ways to reduce various rating errors, such as halo or leniency.

One common source of appraisal problems is the rating scale(s) itself. For example, everyday appraisal formats not developed by technical specialists often contain a list of traits (such as loyalty, attitude, dependability, or initiative). A scale of numbers from 1 to 5, for example, follows each trait, and the rater must circle the number that represents the employee’s level on that trait. This is a version of a graphic rating scale.

There are several fundamental psychometric failures in such scale constructions that make accuracy and consistency highly suspect. (Psychometrics is the field that studies how to make psychological assessments as accurate as possible.) First, there is the question of whether personal traits should be evaluated. There are two other domains that would probably be better to assess: on-the-job, performance-related behaviors (such as customer contact skills), or work outputs or results (like widget productivity). Both behaviors and results are more job-specific and can provide a better basis for feedback. Second, the list

APPRAISING EMPLOYEE PERFORMANCE 5 9

of traits themselves may have no demonstrable relation to the job. For example, should a person in a creative position be rated on “attention to detail”? Third, even if a trait has some bearing on job performance, these traits are often not defined. Take “attitude”: What attitude means to one supervisor may be entirely different than what it means to another. Finally, what do the numbers mean? How can managers and supervisors be consistent in their ratings if the meanings of 1, 2, 3, and so on are not clearly specified?

The Performance Appraisal Form assignment provides you with the opportunity to assess how well a classmate or colleague “frimmelts.” This little-known but highly im­ portant behavior is a known predictor of later success in life. By going through the process of applying a rating scale to your classmate or colleague, you can see some of the problems that complicate the accuracy of the rating process derived from the construction of rating scales.

Another major consideration in the design of an appraisal procedure involves what performance gets measured and how much weight that measure should carry in deter­ mining the overall rating given. For example, there may be measures of organization-wide performance (such as profitability or return on sales) and workteam performance (as in productivity or customer satisfaction) as well as measures of individual performance (such as typically found in performance appraisals). Employees learn to concentrate on the things on which they will be measured. Thus, a central decision in planning an appraisal program involves specifying what employees will be graded on and how those grades will add together to produce a final rating (Huret, 1991).

Cracking the Books is an experiment intended to illustrate the impact of using different measurement structures on performance. In this assignment, you look at the influences that different grading policies have on student behavior. This assignment uses course grading structures as the basis for examining how incentive plans can shape behavior. You also consider how well different appraisal plans align with different tasks.

IMPROVING THE PERFORMANCE APPRAISAL PROCESS

In spite of the problems, there is some consensus of opinion among researchers and practitioners about how the appraisal process can be improved (Barrett & Keman, 1987; Heneman, 1992; Murphy & Cleveland, 1991). Some of the more common recommenda­ tions include:

1. Build the appraisal upon a job analysis foundation. The job analysis should help focus what is rated on job-specific factors and keep the standards of performance used to make the ratings realistic.

2. Avoid using one form to serve two different, incompatible rating purposes (such as promotion potential for a different job in the future and reward for performance in the current job last year).

3. Institute procedures to increase feedback to employees during the year in order to avoid surprises at appraisal time. For example, use periodic or interim appraisals throughout the year.

One of the most important methods for improving the appraisal process is rater training. There is a large and extensive research literature on rater training techniques (Smith,

6 0 CHAPTER FIVE

1986). Effective training programs in this area teach supervisors how to use specific forms and methods, stress accuracy, and encourage ways to make the appraisal process a mutual, participatory one.

One essential feature that should be included in virtually any rater training is the use of performance vignettes. A vignette is a sample of an employee’s typical job performance. Trainees observe the performance, then rate the employee on the performance they ob­ served. Then, ratings are compared, differences discussed, and a resolution reached as a basis for building consistency among the rating managers and supervisors.

Performance vignettes may be done “live” (as when actors might stage a situation) or, more likely, shown as a video. Or, the vignette may be presented as a written report or transcript. Although there has been some question about how suitable “paper people” are as training devices (Murphy, Herr, Lockhart, & Maguire, 1986), they are relatively easy to prepare and use in training programs.

Another Day on the Front Line is the transcript of an observed interaction between a New Accounts clerk in a bank and customer. This interaction is a typical example of that clerk’s performance in customer service and sales. You are asked to rate this person’s performance using the transcript and rating form provided. This assignment illustrates how training can be used to synchronize the skills of rating managers and supervisors.

One of the major difficulties that can limit the potential effectiveness of an appraisal is the possibility of disagreements between rating supervisor and rated employee (Pearce & Porter, 1986). Self-assessments are often elevated, because individuals rating themselves commit the same kind of rating errors, especially leniency and halo errors, as do raters (Campbell & Lee, 1988; Murphy & Cleveland, 1991). Thus, in the absence of strong, previously provided feedback to the contrary, employees can easily enter an appraisal thinking they have done an excellent job and expecting the top rating. However, if the top rating is not given, the employee can become defensive and/eject the rating and all the indications behind it. In this way, the employee sacrifices the opportunity to learn and improve from the feedback. Likewise, under conditions of defensive communications, the rater’s communication effectiveness may be seriously impaired and the discussion may easily swing into one of accusation and denial (Bassett & Meyer, 1968).

There has been a recent interest in looking at the role of self-appraisals as part of the appraisal process (Ashford, 1989). In part, this interest has focused on how the self-as­ sessment rating process can be improved. Just as the case for supervisory rater training, it may be possible to improve self-rating effectiveness through training. By training the employee to do a better job in evaluating his or her own performance prior to the review, the employee may form a more realistic view of performance and be more ready to discuss how to improve (Murphy & Cleveland, 1991).

An analogous situation exists between teacher and student in a formal education course. In that situation, the student is expected to perform certain tasks for which he or she will be graded and a certain level of reward (grade) provided. The teacher is expected to evaluate the employee’s performance and complete the rating. It is not uncommon for students to enter a course expecting a certain grade, only to be sorely disappointed if that grade is not achieved.

In the Self-Appraisal assignment, you are able to experience firsthand several aspects of any performance appraisal process: Rater training, rating errors, and the impact of

APPRAISING EMPLOYEE PERFORMANCE 61

6 2 CHAPTER FIVE

assessments on future employee performance. In this case, you examine your own per­ formance in this course to date, then be trained in how to make accurate self-appraisals. The effects of this training on your orientation to the course will be examined.

This experiment in self-assessment may shed light on the possible role that self-as­ sessment training may play in improving the employee appraisal process.

SUMMARY

Employee performance appraisal is a natural and necessary part of organizational life, and forms the cornerstone to many basic human resources management practices. In spite of its central role in the HR drama, the reviews of performance appraisals have been mixed, at best. In particular, problems in rater accuracy and consistency, negative impacts on employee commitment and motivation, poor administrative choices for system design and operation, and faulty rating scales all work to compromise the potential value that appraisals can provide.

The large amount of research in this area does point the way to how appraisals can be improved. Such practices as job analysis, aligning purpose with process, and more frequent feedback are all essential steps forward. In particular, rater training is yet another piece of the improvement puzzle. Training raters how to observe and evaluate behaviors reliably can be done by presenting vignettes of performance for common evaluation and discussion in a training setting. An emerging step in this same direction is self-assessment training. Here, employees learn how to rate themselves more accurately and adjust their expectations accordingly.

Performance evaluations are not a perfect process that produce only positive outcomes. Because appraisals are so critical to many of the other HR functions, finding and instituting ways to make the process work as effectively as possible is a major concern of the human resources management function.

APPRAISING EMPLOYEE PERFORMANCE 6 3

Experiences With Performance Appraisals Interview Guide

The common assumption about performance management and appraisal systems is that the system should help a supervisor manage employee performance more effectively. The ways by which this is accomplished include specifying desired performances, monitoring performance, coaching and performance feedback, and linking rewards to performance. However, this goal may not always be achieved in practice. For this research project, you are to interview a manager or supervisor who participates in employee evaluations appraisal in order to learn of his or her experiences in using performance appraisals.

1. How many performance appraisals have you conducted in the previous 12 months?

Were the results of the appraisal(s) used to make decisions about salary adjustments for the employee? [ ] Yes [ ] No [ ] Not Sure

2. Describe your typical level of enthusiasm for conducting the performance appraisals. Enthusiasm refers to your level of interest in and motivation to complete an appraisal that was accurate, constructive, and thorough. Would you say your enthusiasm level was: Very Moderately Moderately Very High High Indifferent Low Low [ ] [ ] [ ] [ 1 [ 1

Explain your answer: W hy?______________________________________________

Did you have any other emotions or concerns about doing the appraisal? [ ] No [ ] Yes (explain):

3. Did you go into the appraisal(s) with clear and specific goals about the results you wanted to produce in the employee as a result of the appraisal? [ 1 Yes [ ] No [ ] Not Sure Explain: (If no, why not? If yes, what were the goals?)

4. In general, using the following dimensions, how would you evaluate the appraisal(s) you conducted? Circle the number corresponding to your answer using the following scale:

1 = very poor; 2 = poor; 3 = not sure; 4 = good; 5 = very good. • How accurately you rated the employee’s performance. • How well the employee was motivated to improve his

1 2 3 4 5

or her performance as a result of the appraisal. 1 2 3 4 5 • Employee satisfaction with the appraisal. 1 2 3 4 5 • Your satisfaction with the outcomes of the appraisal. 1 2 3 4 5

CHAPTER FIVE

5. What kinds of reactions did the appraisals create from the employee who was evaluated? That is, what effect did the appraisal have on the employee, if any? Possible effects might include: anger, renewed motivation, better work application, resentment, and so on.

6. What problems (insufficient information, uncertainty about what to do, difficult rating procedures or forms, anxiety, etc.), if any, did you have in completing any of the appraisals?

7. To what extent do you believe that performance appraisals make it easier or more difficult for you to manage employee performance toward achieving organizational goals?

8. At the start of the review year or period, did you review with the employee what specifically the employee was expected to do and how the employee would be evaluated? [ ] Yes [ ] No [ ] Not Sure If yes, explain what happened.

9. Were you (as a manager or supervisor) held accountable in any way for the quality or timeliness of the appraisal(s) you conducted? [ ] Yes [ ] No [ ] Not Sure Explain:

10. Were you trained in how to complete a performance management and/or appraisal program? [ ] Yes [ ] No [ ] Not Sure If yes, describe the training you received.

11. How would you change the performance appraisal process to make it work more efficiently and/or effectively?

APPRAISING EMPLOYEE PERFORMANCE 6 5

Performance Appraisal Form

Use this form to rate your coworker on his or her frimmelting ability. Mark the line at the point that best represents the person’s typical level of frimmelting over the past year.

6

5

4

3

2

1

Frimmelts easily and efficiently and with no prompting. Enjoys frimmelting in crowds. Results are obvious and impact others decisively.

Usually frimmelts with enthusiasm but may need some prior excitatory stimulus. Quality is significant but not uniformly consistent.

Frimmelts at a level acceptable under USD A guidelines. Quantity meets expectations. Frimmelting may occur after prolonged concentration, followed by excessive bragging.

Cannot frimmelt with others present and may not frimmelt even in private consultation. Electrical stimulation may be needed to meet minimal frimmelting standards.

6 6 CHAPTER FIVE

Introduction

Assume that you are in a degree program at an area college or university, and that you must take an assigned course(s) next semester. (The instructor for the real course you are taking will identify that course from the Course of Study attachment enclosed with this exercise.) Three different sections of this course are being offered, and each is taught by a different instructor.

Assignment

You are to compare the three different sections offered, using the information provided, in order to determine which section you would prefer to attend.

Background

All three instructors base the grades for the course on the same three assignments: a research paper, a small group demonstration project, and a final examination. The re­ quirements for all assignments (such as paper length or number of questions on the final exam) are also the same in all three sections of the course:

• The research paper requires extensive reading and analysis of the technical literature, particularly as found in academic journal articles. This will involve extensive library research.

• The group project is a demonstration of a technique applied to a typical problem; everyone in the group will receive the same grade. This will involve working with others in your small group.

• The final exam is based on the material covered in the class lectures and the main text; all students will be given the same grade for this assignment which will be the overall average grade in the class on the exam (i.e., if the average grade is 86, everyone in the class will receive that grade for the final exam). This requirement means that your grade is dependent, in part, on how well everyone else in the class understands the course material.

The same method for calculating the grade is used in all three sections: the grade for the assignment is multiplied by the weight of the assignment. The three product scores are added together to create the final score that is translated into a letter grade. See the following basic formula with an example:

Cracking the Books

Assignment Grade x Weight - Product

Research paper 90 x 33.3% = 29.97 Group project 86 x 33.3% = 28.64 Final exam 92 x 33.3% = 30.63

Total = 89.24 or B

APPRAISING EMPLOYEE PERFORMANCE 6 7

Notice in this example that all three assignments are weighted exactly the same.

Grading Weights for Each Section

In Table 5.1, the weights given by the instructors for the assignments in their sections are shown. Each instructor uses a different weighting system for his or her section.

In order to decide which section you would prefer, complete the analysis provided. Consider how the weights for each assignment vary by section. Then, rank in order how much time you would spend in each section on the three study activities listed based on the weighting system used by each section. Use this scale:

1 = 1 would spend most of my study time on this activity. 2 = 1 would spend a lot, but not most of my time on this activity. 3 = 1 would spend the least amount of my study time on this activity.

TABLE 5.1 Assignment Weightings for Each Section

Assignment

Weight for Each Assignment

Section 1 Section 2 Section 3

Research paper 20% 60% 25% Group project 25% 20% 50% Final exam 55% 20% 25%

Total 100% 100% 100%

Section Comparison Worksheet

Section 1

Rank My Study Activity Plans Studying the textbook and lecture notes. Reading and examining technical sources in the library. Working with and supporting classmates.

Section 2

Rank My Study Activity Plans Studying the textbook and lecture notes. Reading and examining technical sources in the library. Working with and supporting classmates.

Section 3

Rank My Study Activity Plans Studying the textbook and lecture notes. Reading and examining technical sources in the library. Working with and supporting classmates.

6 8 CHAPTER FIVE

Questions

1. Of the three sections, which one would you prefer and why?

2. How did you personally react to the perceived workload for each section? Did the workload (how much time you would spend on the different learning activities) of one section seem more or less attractive than the other two? What does this say about the kind of work conditions you might prefer and the kinds of incentives to which you would respond more or less favorably?

Course of Study

1. The course you are required to take is in the field o f accounting. Students are expected to master the fundamental concepts of accounting and to demonstrate the ability to complete elementary accounting analysis. Students are expected to produce the correct answers in the set up and allocation of items, presented as ledger entries and general ledger accounts.

2. The course you are required to take is in the field o f business law. This is an advanced course in the rapidly changing area of contract law. You have already passed a course in which you have grasped the fundamentals of contract law. Students are expected to be able to identify the latest developments in any given aspect of the law and summarize the most recent status of the law at a specific point in time.

3. The course you are required to take is in the field o f managerial communications. Students are expected to learn how to influence and work with others in teams. Students are expected to be able to demonstrate the skills and abilities of effectively communicating with others in producing a common team outcome.

Analysis of Results of This Exercise

1. To what extent did the relative weight of the three assignments influence what you considered important in class performance?

APPRAISING EMPLOYEE PERFORMANCE 6 9

2. Identify the extent to which the three courses emphasized individual versus inter­ active performance, and to what extent the courses emphasized predictable, repetitive behaviors versus novel, innovative behaviors. How did the behavioral aspects of the course work influence your analysis of the various assignments?

3. For each course of study (accounting, business law, and managerial communica­ tions), which weighting system would seem to produce the best results?

7 0 CHAPTER FIVE

Another Day on the Front Line

The following transcript is a conversation of a customer service transaction that took place in a bank between a new accounts clerk and a customer. The new accounts clerk is Peggy Jones, a 27-year-old employee who has been with the bank for almost 5 years. Peggy has been working as a new accounts clerk for the past year and is due for her annual performance evaluation.

A new accounts clerk is a person who opens new accounts for customers. Typically, this person sits behind a desk in the lobby of the bank and waits on customers who request services. Over the past few years, banks have come to expect the personnel in these positions to aggressively sell other bank services. For example, in the case of a customer who wants to open a checking account, the new accounts clerk is expected to try and sell that customer other bank services, such as savings accounts or certificates of deposit, credit products (like overdraft lines of credit or personal lines of credit), and/or related services (such as automatic teller machine cards).

The branch manager will appraise Peggy’s performance. The manager’s desk is within visual and hearing range of Peggy’s desk. The case presented is an example of how Peggy Jones typically carries out the main sales and service aspects of her job.

Your job is to become Peggy’s manager and evaluate her performance. Use the enclosed Performance Appraisal: New Accounts Clerk rating form for this process.

In this case, Peggy is approached by Mrs. Frances Smith, a 55-year-old customer. Assume it is a typical day in the branch.

Peggy is seated at her desk, writing some information onto a form. Mrs. Smith ap­ proaches the desk. Peggy Jones (PJ) looks up from her chair without expression.

Mrs. Frances Smith (FS) says in a warm voice: “Hello.” PJ (in an even tone): “Hi.” FS seats herself after some hesitation and hands PJ a document. “I received this

application in the mail for a checking account, and I ’m not sure I’ve filled it out properly. I want to open a checking account.”

PJ says “OK,” and begins looking over the form. “Let me verify the information you have here. Your last name is Smith, first name Frances?” Pause.

FS nods her head and says “Uh-huh.” Still examining the form, PJ continues: “And your address is 123 Elm Street. Is that

correct?” Again, FS nods and says “Uh-huh.” PJ glances briefly at Mrs. Smith, then looks back at the form as she positions her pen

above a section of the form. PJ: “What kind of checks do you want?” FS is a little uncertain and shifts nervously in her chair as she thinks. PJ waits for a

moment, then stares around the lobby. Finally, FS says: “Well, I guess I ’ll take the free ones that are mentioned in the offer.”

PJ looks back on the form: “OK, I ’ll make a note of that,” which she does. PJ then says: “I see on this application that you have $5,000 in a savings account with

us. Were you interested in putting any of that into your checking account?” She looks up at FS without expression.

APPRAISING EMPLOYEE PERFORMANCE 71

FS says with authority: “I want to put $1,000 in it.” She pauses a moment as PJ begins to write on the application form, then says: “I’m leaving for the beach this weekend, and I have to pick up my grandchildren. We’re going on vacation and I want to make sure I have enough in my checking account because one time, I wrote a check and was overdrawn. I don’t want that to happen again.”

PJ looks up from the form briefly and asks: “Sure. How old are your grandchildren?” FS brightens: “They’re 10 and 12.” PJ nods and smiles: “Oh, well, I hope you have a nice time.” FS smiles in return. “Oh, so do I. (pause) But I also have an 18-year-old starting

college this year. Do you have loans for students?” PJ looks at FS with a frown, and in a consoling voice, says: “No, I ’m sorry we don’t

make loans to students.” FS is deflated at the realization: “Oh, gee, that’s too bad. She’s really going to have

a tough struggle financially, and I was hoping I could help her out a little bit—you know, get a loan and help her out. (pause, thinking) Well, I guess if you don’t have student loans, I’ll just have to forget about it.”

PJ, busy writing on the form, makes no reply. After a few more moments, PJ looks up and starts to rise. “OK, I can take care of this transfer for you.”

FS blurts out: “I want to make sure I don’t overdraw my account and that I have enough money to last me while we’re at the beach.”

PJ stands behind her desk. “You’re just going for the weekend, right?” FS nods reluctantly: “Well, right, the weekend plus a couple of days.” PJ says assertively: “Well, I think the $1,000 that you’re putting in the checking account

will be enough for you.” FS stays on the topic: “Yeah, but what if I overspend, what if I don’t have enough

money?” PJ, becoming slightly annoyed, replies: “Well, we do have an ATM card we can set

you up with.” She glances back at the application form she’s holding. “Oh, I almost forgot. Do you want your name, address, and phone number printed on your check?”

FS nods: “Yes, please.” PJ begins to walk toward the teller line. FS muses out loud: “Boy, I just hope my car makes it to the beach. I’ve been having

some problems with it, and I ’ve been thinking of getting a new one, but I just haven’t acted on it.”

PJ slows as she comes next to FS: “Is it an older car?” FS perks up. “Yes it is. It’s a . . . ” PJ breaks in: “Those kind will nickel and dime you death, won’t they?” FS nods: “Absolutely. Repairs, repairs.” PJ says: “I know you’re in a hurry to get away on your trip so let me go take care of

that transfer for you. I ’ll bring you back a receipt and a set of starter checks.” She resumes walking to the teller line.

FS, warily: “Well, OK, but . . .” Her voice trails as PJ walks across the lobby. FS sits at the desk for a few minutes.

Finally, PJ returns and hands FS a packet of materials. “Here you are. Here’s your receipt and a set of starter checks.” PJ sits down.

7 2 CHAPTER FIVE

FS then says: “You know, while you were away, I was thinking that I ’m probably not making very much interest on the money left in my savings account, (pause) Do you have anything that pays a better interest and what are the terms? Do you have any information about some options?”

PJ looks over FS’s shoulder, thinking and biting her lip. PJ is unsure, then suggests: “Well, what you can do is call our Phone Server when you get back from vacation, and they can tell you what our rates are.”

FS is disappointed: “You don’t have it now?” PJ, a little sheepishly: “Well, the rates change every week, and I’m not sure what it

is for this week. But if you give us a call next week, we should be able to give you the information then.”

FS hesitates: “If I can remember, I guess I’ll do that.” PJ warming up: “OK, have a nice weekend at the beach with the grandkids.” FS rises from her chair: “Thank you.” FS extends her hand to PJ. “Bye bye.” A little surprised, PJ cautiously extends her hand and they shake. PJ, still seated, says:

“Bye bye.” FS turns and walks away from the desk.

APPRAISING EMPLOYEE PERFORMANCE 7 3

Performance Appraisal: New Accounts Clerk

Employee Nam e____________________________________________________________

R ater____________________________________________________________

This portion of the appraisal focuses on the Employee’s Sales Performance during the past rating period. The three main sales duties for the New Accounts clerk position are:

• Greet customers effectively. • Identify sales opportunities. • Recommend new products to meet needs.

Specific behaviors the employee can demonstrate in the performance of the sales duties are listed and are the items on which the employee is to be evaluated.

Rate how frequently the employee performs each of the following behaviors by circling the number representing the employee’s typical performance of that behavior.

FREQUENCY SCALE

Almost never

2 Occasionally

3 About half

the time

4 Often

5 Almost always

BEHAVIORS

1. Greets the customer in a friendly and pleasant manner.

2. Listens for indications of customer problems or needs.

3. Recognizes and states the problem or need. 2 3 4 5

2 3 4 5

2 3 4 5

4. Suggests bank product that may solve the need identified.

5. Responds to customer questions and concerns persuasively

6. Completes account opening and documentation efficiently. 2 3 4 5

2 3 4 5

2 3 4 5

7 4 CHAPTER FIVE

Self-Appraisal: Your Performance in This Course

1. In general, how do you rate yourself as a student?

[ ] I ’m a strong A student. [ ] I ’m a good B student. [ ] I ’m an average C student. [ ] I ’m not a very good student.

2. What grade do you expect to receive in this course? (Circle the letter grade.)

A B C D F Other:__________________

3. How much effort will you exert to obtain that grade?

[ ] More effort than I usually exert for other courses. [ ] About the same amount of effort that I exert for other classes. [ ] Less effort than I usually exert for other courses.

4. How worried are you about achieving the grade your expect from this course (Ques­ tion 2)?

[ ] I ’m not worried at all about earning the grade I expect. [ ] I ’m somewhat worried about earning the grade I expect. [ ] I ’m very worried about earning the grade I expect.

Restricted use only.

1. _______________ 2 . _________________ 3. 4.

APPRAISING EMPLOYEE PERFORMANCE 7 5

Self-Assessment Checklist: Your Academic Performance in This Course

Use the following self-assessment checklist to evaluate your academic performance in this course at this point in time. Honestly rate yourself on each of the dimensions by indicating the extent to which you agree or disagree with each item listed. Responses are confidential.

Strongly Strongly Disagree Disagree Agree Agree

1. I am up to date on the readings assigned for this course. 1 2 3 4

2. I understand the main concepts presented in class. 1 2 3 4

3. I can understand relations between differ­ ent human resources functions and other important concerns of the organization. 1 2 3 4

4. I can ask good questions about topics under discussion in the class. 1 2 3 4

5. I am motivated to do well in this course. 1 2 3 4 6. I think about some of the topics covered in

the course when I’m away from the class. 1 2 3 4 7. I tend to compare some of the human

resources practices found in the organization(s) that I know with practices presented in the course. 1 2 3 4

8. I am currently making good progress in completing my course assignments. 1 2 3 4

9. I have already completed some course assignments before the due date(s). 1 2 3 4

10. I could make a summary presentation on the topic of human resources to the personnel department of an organization I’m affiliated with. 1 2 3 4

11. Indicate below any other areas in which you can and should consider assessing your performance in this course:

7 6 CHAPTER FIVE

Self-Assessment Note-Taking Worksheet

Goal for the Assessment Process:________________________

Benefits o f accurate performance rating:

• To you, the student:_________________________________

• To the instructor:____________________________________

• To the school:______________________________________

Common problems interfering with accurate self-assessments:

1. Insufficient information:

2. Look for information that confirms your self-image:

3. Leniency and halo errors:

4. Self-serving bias:

APPRAISING EMPLOYEE PERFORMANCE 77

Assessment Summary

Use this information to answer the following items:

1. In which aspects of this course are you doing well?

2. In which aspects of this course are you not doing well?

3. List all graded assignments you must complete for this course in the Assignment column. Then, estimate the grade you will receive on the course assignments (under Expected Performance), and explain why you think you will receive that grade (“rationale”).

Assignment Expected performance Rationale

How to Evaluate Yourself More Accurately

• Clearly define what you are expected to do. Understand the standards used to judge your performance.

• Honestly identify how far you have progressed in meeting those expectations. Don’t assume that because you are doing well in one aspect means that you are doing well in all.

• Gather as much information as you can about your performance to date. • Be careful about only hearing information that you want to hear. • Take responsibility for your progress to date and for what you have to do in order

to become a better student.

7 8 CHAPTER FIVE

Self-Appraisal and Performance Evaluations: Discussion

Discuss the following questions during the debriefing after the training:

1. Did you change the grade you expected from the course as a result of the training? [ ] YES [ ] NO Explain your answer: Why or why not?

2. What happened to your opinions and intentions in the following areas as a result of the training? Was there no effect? Did you strengthen your existing opinion or intention, or did you change it? Explain.

• Perceived difficulty in successfully completing the course:

• Your perception of yourself as a student:

• Your anxiety about your grade:

• Your motivation for studying for this course:

3. What learning, if any, did the training help you obtain?

4. What are the implications for this experiment for performance appraisal systems?

5. How can this training be changed to become more effective?

6 Compensation and Benefits

Depending on the business, the costs of compensation and benefits can represent a siz­ able proportion of the total cost of running an organization. For example, in a profes­ sional services firm (such as a CPA or lawyer’s business), compensation and benefits costs may be the largest single expense item. In addition to the expense implications, Lawler (1981) noted that pay systems can be a major vehicle for rechanneling employee efforts toward desired organizational goals. Given compensation’s pervasive impact on human resources management, employers can rightfully ask what kind of return—in performance, loyalty and retention, employee satisfaction, and the like—they are obtaining from this investment.

This return on investment question focuses attention on the policies, plans, and practices of effective compensation planning and administration. Rather than one uniform com­ pensation and benefits plan for every organization, planners increasingly see a range of program choices for designing a compensation plan to meet the specific needs and re­ quirements of each unique business and organization (Balkin & Gomez-Mejia, 1987b).

Traditionally, compensation plans may focus on one of three distinct goals: attract­ ing and retaining qualified employees, motivating employees, and controlling costs. Al­ though the planner would like to achieve each goal, it is also true that it is very difficult if not impossible to achieve the best in each goal simultaneously. For example, attracting and retaining employees will likely involve establishing fixed base salaries at very competitive rates. This means setting wage rates and salaries at or above the market average. High base salaries violate the basic impulses of cost control and motivating employees.

The assignments in this section highlight some of the issues involved in the de­ sign and administration of cost-effective compensation and benefits programs. In addi­ tion, several of these exercises put you in the position of designing compensation and benefits plans to meet the specific operating requirements of the organizations in question.

7 9

8 0 CHAPTER SIX

THE RIGHT FOOTING: DEFINING COMPETITIVE COMPENSATION

In competitive labor market conditions, employers must pay attention to the prevailing wage and salary levels paid for various jobs and skills. Were employers to ignore what the market is paying, they would soon discover either that they cannot keep employees because their rates are too low, or they cannot make a profit because their rates are too high. Establishing a competitive wage and salary program is an essential building block for effective compensation planning and administration (Avery, 1972; Lemer, 1988; Rich & Phalen, 1992-1993; Sullivan, 1991).

For many employers, it is relatively easy to find salary surveys that identify the pre­ vailing wage rates found in a labor market. For example, many private consulting firms compile, publish, and sell annual surveys of geographic areas (such as the Washington, DC area) or of industries (such as banking and financial institutions). Professional asso­ ciations often publish their own salary surveys of the jobs in the occupational field they represent. Finally, the U.S. Government publishes survey data about occupations in dif­ ferent areas of the country. The availability of such data makes it possible for an employer to execute a specific compensation goal in the context of existing market rates fairly effectively.

Rynes and Milkovich (1986) observed that the use of competitive salary survey infor­ mation is not an automatic, foolproof routine for establishing compensation rates for the firm. For example, the process is filled with judgment calls about where and how big the labor market to survey really is, whom to include in the survey, which jobs to use for comparison, and what the company’s pay policy will be. And not the least important is the final decision about what to do, if anything, with the wages and salaries already paid to current employees based on the salary survey information available.

In the Say When: Establishing Salary Levels assignment, you have the opportunity to advise on changes to the salary program of Denton Fabricators. In this exercise, you review the adequacy of a salary system in terms of broader labor market conditions and the company’s philosophy on compensation.

PAYING FOR PERFORMANCE

Compensation programs will have differing motivational impacts on employees (Opsahl & Dunnette, 1966). Likewise, different kinds of incentive plans will have different effects on employee performance (Blinder, 1990). One of the most common forms of incentive compensation is a merit pay plan (Heneman, 1992). Under such plans, employees receive a performance appraisal from their manager about their individual performance. The rating received then drives the amount of additional, “merit” reward granted to the employee. To the extent that an organization wishes to use its compensation plan to motivate or encourage employee performance, there are a number of design issues involved (Pritchard, P. L. Roth, P. G. Roth, Watson, & Jones, 1989; Rowland & Greene, 1987).

COMPENSATION AND BENEFITS 81

For example, one issue revolves around the question of how much of a reward is necessary to stimulate extra effort (Heneman, 1992; Krefting, Newman, & Krzystofiak, 1987). Consider a merit pay plan in which exceptional performers receive a 6% pay increase, whereas acceptable performers receive a 4% increase. Does a typical employee, looking at the 2% difference, see enough of an increase between the two ratings to warrant the extra effort required to earn an exceptional rating? Or consider this: The author’s wife works for an agency of the U.S. Government. According to her perspective, there is so little difference between what a supervisor and nonsupervisor earn that there is very little reason for a person to seek becoming a supervisor, especially given all the headaches the supervisors must face in trying to manage under an intractable federal employment system.

In the assignment What Would It Take?, you are asked to consider what kind of compensation incentive it would take for you to work 5 to 10 more hours per week. This exercise allows you to consider what kind of compensation dollars should be devoted to merit increases.

Another issue that may be neglected in designing an incentive plan is an ethical one. For example, is it ever wrong from an ethical point of view to apply an incentive program for employee performance? In the early 1990s, a very large national retailer faced exactly this question. The case presented here is drawn from that experience.

The You Get What You Pay For—Or Do You? case presents information about the application of an incentive program in a service function. The larger question raised by this case is an ethical one: What are the ethical issues that should be examined in the design and development of compensation programs?

A compensation plan draws together the various goals and issues involved into an integrated system for paying for employee performance. Each organization will have distinctive goals and conditions that require a compensation plan best suited for that organization (Krefting, Newman, & Krzystofiak, 1987; Stomich, 1984). The craft of effective compensation design is to understand the needs and directions of the organization, then create a compensation plan to most effectively support those needs and directions.

The Compensation Plan Design assignment presents you with three different business situations. For this exercise, you are challenged to create a compensation plan design for each business that most effectively supports the achievement of the business goals and requirements.

BENEFITS: THE HIDDEN COSTS OF COMPENSATION

Employee benefits can represent a significant cost to the employer and provide important yet often intangible values to the employee. As part of the overall compensation provided employees, benefits can enter into the competitive struggle to attract, retain, and motivate employees (Rosenbloom & Hallman, 1986). At the same time, the employer wants to minimize costs of the benefits provided (Kozlowski & Oleksy, 1987). Again, the ability

8 2 CHAPTER SIX

to design and implement employee benefits programs is a critical skill for the human resources manager.

In the Designing a Benefits Plan assignment, you compete with other consulting teams to recommend the most competitive and cost-effective benefits plan possible for All State Services. In this exercise, you juggle benefits plan design, costs, and impact on employees to suggest a plan with the best outcomes for employees and the business.

SUMMARY

With the possible exception of layoffs and terminations, compensation and benefits are the most high-profile human resources management activity performed. There are several reasons for the central role played by compensation administration. First, compensation and benefits can be significant expenses associated with running the organization. Second, without proper management, poor compensation practices will hurt the organization through turnover, poor performance, or high cost—or all three. Third, compensation plans can exert tremendous pull and push on employee performance and can play an instrumental role in shaping and redefining the culture of an organization.

Effective compensation administration must be sensitive to competitive labor market conditions. For this reason, using salary survey information skillfully becomes very im­ portant. Beyond grounding pay rates in competitive market conditions, compensation plans should be properly structured and designed to support organizational goals. Such issues as how much money it takes to serve as a lure to more performance, ethical concerns in using incentive plans, and fully aligning incentive plans with organizational requirements are all vital ingredients to effective plan design.

Benefits plans and designs are important in their own way. Such plans can consume a sizable portion of total compensation dollars. For that expense, employers would like to receive—but often have trouble obtaining—returns in employee goodwill and perform­ ance. For these reasons, effective benefits design is often a silent but important partner in human resources planning and administration.

COMPENSATION AND BENEFITS 83

Say When: Establishing Salary Levels

Introduction

Denton Fabricators is a subsidiary plant owned by National Products, Inc. As is the case at all National Products subsidiaries, Denton Fabricators is allowed to operate as an independent profit center. This means, among other things, that Denton Fabricators sets its own pay policies and programs.

Denton employs about 350 employees, mostly in the fabrication and production units. To support the business, there is an accounting department staff of 13 including the department manager, three unit managers, and nine nonexempt employees. There are four nonmanagement jobs in the department: accountants (two positions), senior accounting clerks (two positions), bookkeepers (three positions), and bookkeeper assistants (two positions). The two employees in the accountant positions were recruited out of college, and the remaining employees in the unit typically started as bookkeeper assistants, then worked up to bookkeepers and eventually to the senior accounting clerk job.

Denton Fabricators has been under the same budgetary constraints as the other sub­ sidiaries in National Products. As a result, there have been no changes to Denton’s salary levels for over 3 years. Over the past 2 years, Denton has experienced increased levels of turnover throughout the company, including in accounting.

Assignment

You have been given the assignment of reviewing the salary levels for the four positions in the accounting area. You are to make recommendations for any changes to Denton’s salary program for these four positions and/or any individuals in those positions. Estimate the effects these changes would have on employees.

To that end, you have been provided the following information:

1. A staffing and compensation chart which includes recent data from a salary survey of your labor market.

2. The corporate compensation philosophy.

84 CHAPTER SIX

Staffing and Compensation Chart

Current Salary

Performance Years in Rating Position (1-5)

Last Increase

Months Prior %

Accountant Grade 10 Range: $26,000-$39,000

* Pat Jones $28,500 1 3 none 0 * Fran Smith $28,000 1.5 3 6 8% Average $28,250

Sr. Accounting Clerk Grade 8 Range: $8.10-$12.10

* Gene Williams $ 9.72 4 4 24 3% * Lee Brown $ 9.55 2.5 3 20 2.5% Average $ 9.65

Bookkeeper Grade 7 Range: $6.75-$ 10.00

* Chris Black $ 8.50 3 4 19 5% * Terry Johnson $10.45 12 2 28 4% * Jeri Franklin $ 8.40 1.5 3 24 5% Average $ 9.12

Bookkeeper Assistant Grade 5 Range: $6.20-$9.70

* Jan Murphy $ 6.70 1 3 0 0 * Kerry Powers $ 6.80 1.5 3 2 2% Average $ 6.75

COMPENSATION AND BENEFITS 8 5

The goal of Denton Fabricators Corporate Compensation is to attract and retain qualified personnel for the achievement of company business goals.

Desired Market Position

To achieve this goal, Denton Fabricators intends to compensate experienced and capable job performers at a competitive market rate of pay. “Experienced and capable job per­ formers” are understood to mean individuals with enough years experience to be consid­ ered qualified for successful independent job performance. The amount of time it takes to become “experienced and capable” will vary by job and will be assessed on a job-by-job basis. “Competitive” is understood to mean compensation that is paid at or near the market average.

Role of Performance-Based Pay

Employees who are judged to perform the job acceptably should receive adjustments to their pay that match the rate of inflation. Employees who are judged to be exceptional performers should receive adjustments that are approximately double the rate of inflation. Adjustments will be permanently added to the employee’s base rate of pay on an ap­ proximately annual basis.

Communication to Employees

The general structure of this compensation program will be communicated to employees. This includes information on how compensation levels for job grades are determined. However, because each employee’s salary is a private and confidential matter between Denton Fabricators and each employee, information about individual salaries is expected to be kept private.

Denton Fabricators Corporate Compensation Policy

Goals of the Compensation Program

8 6 CHAPTER SIX

The goal of Denton Fabricators Corporate Compensation is to motivate personnel to support the achievement of company business goals.

Desired Market Position

To achieve this goal, Denton Fabricators intends to compensate capable job performers at a very competitive market rate of pay. “Capable job performers” are understood to mean individuals that demonstrate their ability to support company growth and profitability through strong performance in generating revenue or controlling expenses. “Competitive” is understood to mean that the employee’s fixed, base salary will approach but never exceed the market average for compensation in comparable jobs. However, strong per­ formance can be eligible for bonus compensation that, when added to the employee’s base salary, can produce a total compensation up to 75% of the typical market maximum for the pay grade.

Role of Performance-Based Pay

Employee job performance will be used in making decisions about bonus pay. The amount of bonus adjustment for which any employee is eligible will be at the discretion of the managing supervisor. Bonus compensation is not permanently added to base pay, however.

Communication to Employees

The general structure of this compensation program will be communicated to employees. This includes information on how compensation levels for job grades are determined. In addition, in order to incent appropriate behavior, the percentage amount of increases awarded to each employee will be noted in a company-wide communication each year.

Denton Fabricators Corporate Compensation Policy

Goals of the Compensation Program

COMPENSATION AND BENEFITS 8 7

The goal of Denton Fabricators Corporate Compensation is to control the costs of labor in order to support the achievement of company business goals.

Desired Market Position

To achieve this goal, Denton Fabricators intends to compensate qualified employees in the most cost-effective manner possible. To maintain our business, the costs of production need to be kept at the lowest possible levels. Denton Fabricators realizes that it must pay a competitive wage in this context. “Qualified employees” are those employees who have been dependable and reliable in their work behaviors. “Competitive” is understood to mean compensation paid at somewhat below the market average. That is, the midpoint for Denton salary grades should be about 10% below the market average.

Role of Performance-Based Pay

Employees will be regularly assessed by their supervisors, and those who are not meeting minimal acceptable standards will be terminated. All employees who meet the minimum accepted standards of performance become eligible for a year-end cost of living increase, if it is granted. However, whether a cost of living increase is granted and the amount of the increase is solely at the discretion of management. Cost of living adjustments will become ongoing additions to the employee’s base rate of pay once awarded. However, management reserves the right to reset wage rates whenever it deems necessary.

Communication to Employees

Compensation is a private matter between our business and each individual employee. Management reserves the right to make all decisions about the compensation of its em­ ployees. Communication about compensation is unnecessary and may limit management’s freedom to act in this area. Therefore, all aspects of compensation are to be kept private and confidential.

Denton Fabricators Corporate Compensation Policy

Goals of the Compensation Program

8 8 CHAPTER SIX

What Would It Take?

You work in an office in an administrative position and have been in that position for several years. Although you stay busy during the day and meet the requirements of your job efficiently, you also spend a typical amount of time each day talking with cowork­ ers, dealing with necessary personal business, and taking occasional breaks from your work. You do your job in the standard 40-hour workweek, give or take a few hours each week.

You currently earn $35,000 per year or about $1350 gross pay each 2-week pay period. Your take-home pay (after taxes and deductions) is about 65% of your gross pay, or about $900 every 2 weeks.

Although you stay busy and do your job, you understand that you are capable of both more effort and contribution. Like most employees, you are aware that there are oppor­ tunities to improve productivity in several ways:

• Although you manage to complete the most important parts of your job each day, other, less important projects are put “on the back burner” until you find the time. By completing these projects or getting them up to date, productivity could increase.

• If you spent more time examining how you work, then you could come up with more efficient approaches and techniques.

• You also know that your field is changing and that you should spend more time studying and learning about a number of things that could help your job performance.

To reach the next higher level of performance, you estimate that you would need to put in another 5 to 10 hours of work a week, either on the job, at home, and/or at school. In addition, you would have to spend less time at work socializing, on breaks, or taking care of personal business.

Assume your organization has a valid system for appraising performance that would detect meaningful increases in your performance and would reward you accordingly. Under the current system, employees like yourself who satisfactorily meet the basic requirements of their jobs receive a “merit raise” that approximately equals the annual rise in the cost of living. For the past few years, the average merit raise awarded has been 3%. On your annual salary of $35,000, a 3% increase adds another $1,050 in total for the year. Spread over the 26 pay periods for the year, this 3% raise amounts to a $40 increase in your gross salary—and $26 in your take-home pay—every paycheck.

COMPENSATION AND BENEFITS 8 9

Assessment

Given the facts of this scenario, how much additional gross income every 2 weeks would you have to receive in order to prompt you to work at the higher level of performance?

Place an X on the line that shows the minimum amount it would take to prompt you to change your behavior to the next level of performance. Remember, each additional $100 increase in gross pay results in a $65 increase in take-home pay.

The minimum increase in my gross biweekly income needed to motivate me to perform at the next higher level of performance is:

$0 100 200 300 400 500 600 700 800 900

Other:

9 0 CHAPTER SIX

You Get What You Pay For—Or Do You?

For over 100 years, Hoods and Rollins Company stood at the center of the nation’s retail institutions. In many ways, Hoods represented the history of retailing in the United States, starting as a mail-order business bringing to the rural heartland the ever-growing inventory of modem products spewing forth from one new industry to the next. Then, as the American landscape changed as a result of the automobile, Hoods followed with stores carrying a full line of products in the suburban malls springing up in the years following World War II. Hoods tried to be an all-purpose store to the U.S. consumer.

By the late 1980s, though, the stamina that put Hoods at the center of retailing showed signs of faltering. In part, its success was also its failure. In the 1970s, Hoods moved aggressively into diversified services businesses, like insurance and real estate, only to find those ventures difficult to grow. The costs of mounting these operations drained away funds needed for store renovation and improvements in information technology. Hoods’ line of hard goods appealed primarily to men, who made big but infrequent purchases. As a result, the de facto niche from which Hoods drew much of its business was the relatively tight-fisted middle-aged male. The catalog business had become a steady and significant loser. During 1989, Hoods dropped 40% in earnings.

In 1990, Hoods instituted a sales commission plan for many of its employees. In the words of the chairman of the board, Hoods’ intention was to turn every employee into a salesman. This move applied to the automobile service repair mechanics in the car-care centers found adjacent to many Hoods stores. Under the terms of this incentive compen­ sation plan, the mechanics were instructed to sell a certain number of products and services during each 8-hour shift. In one region, a typical sales quota included the following daily sales requirement:

5 front-end alignments 8 sets of springs 8 sets of shocks 2 tires

The quotas might also include brake jobs, brake calipers, idler arms, and struts. To increase the flow of customers into the centers, Hoods would run ads promoting check-ups on car brake systems. Once in the center, the customer could then be sold any of these additional products. Car mechanics who did not meet these sales quotas could be put on less desirable schedules, transferred to lower pay rates, or even dismissed.

COMPENSATION AND BENEFITS 91

Questions for Discussion

1. Is the use of an incentive program for automobile service technicians an appropriate action to take given the company’s financial status?

2. Are there any potential problems the company might face in implementing and using this incentive program?

3. Was the incentive program designed properly? Suggest any appropriate modifications.

4. Does the company face any potential legal or public image problems with this incentive program?

5. What ethical issues exist, if any, for the design of human resource management programs in private, for-profit institutions?

9 2 CHAPTER SIX

Compensation Plan Design

Your team is to design a compensation plan for the three business situations indicated. For this exercise, you can ignore the issues of employee benefits in designing your plan. Develop your plans in terms of the following factors:

• What is the goal for the compensation plan for each situation? Goals could include attracting and retaining high-quality personnel, controlling costs, motivating certain per­ formance, and so on.

• What kinds of behaviors or results do you want to reward? For example, do you wish to reward productivity, sales, service, punctuality, and so on?

• What is the unit of performance you wish to compensate? There are three broad categories: individuals, work groups or teams, or total organizational performance.

• What criteria do you use to identify on what basis to pay people? If you are incenting productivity, do you measure scrap, widgets produced, quality, or some other factor?

• What is the payout arrangement? If you use some kind of incentive plan, is the incentive paid weekly, biweekly, quarterly, or in some other manner?

• How much of the compensation package should be fixed and how much should be variable? Fixed compensation is the predictable, established rate of pay the employee expects to receive with each paycheck. Variable—or “at risk” compensation—is the amount of additional compensation that may result from incentive awards; this amount varies with each paycheck and will likely be pegged to some measure of performance or output.

• How do you evaluate whether the plan is working or not? If you are trying to promote productivity, for example, what productivity measure will you track to see whether the compensation plan is producing the desired results?

Use the worksheet to record your answers for the three business situations.

Situation 1: Smithson Distributions

Smithspn’s is a marketing intermediary company. That is, the organization buys and orders from a variety of product suppliers, then resells those products to its markets through telemarketing and visits to retail stores. Smithson’s profits are a function of the margins between product costs and sale prices. Sales personnel must be good at keeping the margin as wide as possible while still making the sale.

The products are consumer goods that typically require only one sales agent to complete the sale. There is some seasonality to the sales cycle: Sales are highest during the Christmas season and taper off in the winter months.

Most of the employees in the organization are in some kind of marketing or sales capacity. The success of the company is very dependent on the sales performance of each individual salesperson.

COMPENSATION AND BENEFITS 93

The organization is a network of retail service units scattered over an area. Each unit can provide the full services offered by the organization. This means they both sell new services to customers and maintain the account relationships with existing customers.

All employees are expected to be able to perform most of the tasks for which the customer asks. This full degree of cross-training and staff backup capability is seldom met, however, because turnover and some job specialization make it difficult for all personnel to be with the company long enough to learn everything.

The growth of the business is very sensitive to the overall quality of service provided in the unit. Customers who are satisfied with the service they receive will return to buy additional products and services, and will refer other customers to the stores. Quality service requires everyone in the unit to work together effectively.

Situation 3: Metropolitan Electronics

This organization is a small manufacturer of custom-designed and built electronic com­ ponents with a wide range of consumer, commercial, and defense applications.

Metropolitan’s business success rests with the design teams of engineers and the highly skilled technicians assembled to produce the components. Any employee may be on several teams at any one time, and all employees must work closely together in product development and production. Thus, the organization requires a high level of cooperation and interdependent teamwork. The contracts on which they typically work often contain penalties for components submitted late or with quality defects.

Situation 2: Windsor’s Service Centers

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COMPENSATION AND BENEFITS 9 5

Designing a Benefits Plan

Assignment

Your consulting team will be competing with other teams to prepare a proposed benefits program for All State Services Corporation. The team that produces the best plan at the lowest cost will win the competition. Consultants should consider the impact of any benefit changes on employees and how these changes will be communicated to employees.

You will prepare a recommendation on four benefits plans: life insurance, long-term disability, sick leave, and vacation plans. Medical insurance will not be addressed.

Situation

All State Services Corporation is a local firm with 150 employees, all full-time. All State Services competes with three other firms in the same business. Most of the jobs in All State require competently trained and experienced employees, and there is a strong com­ petition for attracting and retaining skilled personnel.

The Conservatory Indemnity Insurance Company underwrites both the medical and life insurance plans provided by All State for its employees. Conservatory recently sent All State’s human resources director a 3-month advance notice that All State should expect a 50% increase in the total cost for medical insurance next year. In response, the HR director asked several consulting firms to review their current plans and recommend improvements.

Attachments

Item 1. A profile of the All State workforce. This profile describes the salary distribution of the All State workforce, the number of people in each salary group, the age distribution by salary group, and the turnover rate (percent within that group that separate during the first year).

Item 2. A profile of the existing benefits plans provided by All State. Item 3. A report on the comparable benefits plans offered by All State’s main competi­

tors. Item 4. Quotes on group insurance rates for life and long-term disability plans from

other insurers.

Use the Benefits Plan Proposal forms to record your recommendations.

9 6 CHAPTER SIX

TABLE 6.1 All State Services: Employee Profile

Salary Average

Number x Employees

Total = Compensation

Age Distribution % Turnover

in First Year18-30 31-55 56+

$15,000 65 $975,000 45 10 10 70% $25,000 35 875,000 20 10 5 50% $30,000 15 450,000 2 12 1 35% $35,000 15 525,000 1 12 2 30% $40,000 10 400,000 1 6 3 15% $50,000 4 200,000 3 1 25% $65,000 2 130,000 1 1 0% $80,000 2 160,000 1 1 50% $95,000 1 95,000 1 100% $120,000 1 120,000 1 0% Total 150 $3,930,000 69 57 24

All State Services: Benefits Plan Profile

I. Life Insurance Plan A. Benefit: A term life insurance policy equal to 3 times each employee’s salary. B. Cost to employee: None (paid entirely by All State). C. When employee becomes eligible for benefit: After completing 1 month’s em­

ployment. D. Total annual premium cost to All State: $50,000. (This is how much All State

must pay to provide the benefit as just described.) E. Insurer: Conservatory Indemnity Insurance company.

Note: Conservatory Indemnity has carried both the life and medical insurance plans for All State for a number of years. According to Conservatory, they have priced the life and medical insurance as a package deal. In recent discussions, Conservatory told All State that:

• If All State uses another insurer for life insurance, the medical cost will rise 55%, not the indicated 50%; this additional 5% adds another $10,000 to the premium cost.

• If All State uses another insurer for medical insurance, the cost for life insurance will rise to $54,000.

II. Long-Term Disability A. Benefit:

• Will replace 75% of the employee’s salary after 3 months off the job due to injury or illness.

• Payment continues in force until the employee returns to work or reaches retirement age.

• Does not take into account any amounts earned from Social Security payments due to disability.

COMPENSATION AND BENEFITS 9 7

B. Cost to employee: None (paid entirely by All State). C. When employee becomes eligible for benefit: After completing 1 month’s em­

ployment. D. Total annual premium cost to All State: $33,000.

III. Sick Leave (Short-Term Disability) A. Benefit: Sick leave is earned at the rate of 1 day per month, beginning the first

day of employment. This amounts to 12 days per year. Pays 100% of compen­ sation for time off.

B. When does employee become eligible to use benefit: After 6 months employment. C. Accumulation: Sick leave can be accumulated without limit and carried over

from one year to the next. D. Payment for unused sick leave: All accumulated sick leave is paid to employees

upon retirement (computed on the employee’s daily equivalent salary rate at time of retirement).

IV. Vacation A. Benefit: the following benefit schedule applies:

Years Employed Amount o f Annual Vacation I 1 week 2-5 2 weeks 6-10 3 weeks II or more 4 weeks

B. When does employee become eligible to take vacation: After 1 full year’s em­ ployment.

C. Carry over of unused leave: Unlimited carryover and accumulation of unused leave

D. Payment for unused leave: All unused leave paid at time of separation (retirement, resignation, termination)

Summary: Costs Associated With Current All State Plans

Total Premium Cost Cost if Another Insurer With Conservatory Is Used for Other Benefit

Medical insurance (next year) $300,000 $310,000 Life insurance $50,000 $54,000

9 8 CHAPTER SIX

Estimated Savings From Accrual Limits

Current Liability for _______________________ Accrued Leaves 90 days 180 days

Sick leave $30,000 $12,000 $7,000

Under the current plan, All State employees have “banked” or accrued the equivalent of $30,000 in sick leave benefits. That is, if they all retired at this point, All State would be obligated to pay them $30,000. If leave accrual was limited to 90 days, All State could save $12,000. If the limit was set at 180 days, they could save $7,000. Other savings can be interpolated from this scale.

Amount Earned 1 Month

Vacation $45,000 $20,000 $9,000

Likewise, under the current plan, employees have banked $45,000 in accrued, unused vacation time. If the amount of vacation time an employee could save was limited to no more than 1 month, All State could save $9,000 of this $45,000; if the limit was set so that the employee could carry over no more than what he or she earned for the year, the savings would be $20,000.

Benefits Plans Provided by Immediate Competitors

Competitors

1 2 3

Life Insurance Benefit 2 x ’s salary $50,000' 1 x ’s salary Employee cost 0 0 0 Eligibility 6 months on hire 3 months

'Employees may purchase a universal life policy worth $30,000 at cost ($180 per year)

Long-Term Disability Benefit:

% of salary replaced Waiting period

Employee cost Eligibility

60% 6 months

none 6 months

50% 9 months

none 1 year

60% 6 months

none 3 months

Sick Leave Benefit Eligibility Accumulation of leave Payoff

9 days/year 3 months

up to 180 days on retirement

no set amount on hire

N.A. N.A.

9 days/year 6 months 30 days

no payoff

Vacation Benefit

Eligibility Accumulation Payoff

1-2 years: 2 weeks 3-4 years: 3 weeks 5-7 years: 4 weeks 8+ years: 5 weeks

6 months yes —> 6 months

yes

1-3 years: 1 week 4-5 years: 2 weeks 6-9 years: 3 weeks 10+ years: 4 weeks

1 year no (use/lose)

yes

1 year: 1 week 2 -4 years: 2 weeks 5-7 years: 3 weeks 8+ years: 4 weeks

1 year 1 month

yes

COMPENSATION AND BENEFITS 99

Competitive Quotes on Life Insurance and LTD Group Insurance

The Good Faith Mutual Insurance Company has supplied the following rates as part of a competitive bid offer for All States Group Life Insurance and Long-Term Disability Plans.

Good Faith is not affiliated with Conservatory Indemnity Insurance. Rather, Good Faith is a wholly owned subsidiary of Provident insurance. Provident is a nationally known insurer. Provident acquired Good Faith a few years ago. As a result, the rating of Good Faith as a solvent insurer cannot be determined exactly. It appears that Good Faith is generally rated a 4 on a scale of 5 (a 5 rating is a four-star, excellent condition rating). Both Provident and Conservatory Indemnity are 5 rated.

Rates offered in the quote from Good Faith Mutual:

Life Insurance

Benefit Level Total Annual Premium Cost

1 x ’s salaiy 2 x ’s salary 3 x ’s salary

$38,000 $42,000 $47,500

Long-Term Disability

Benefit Level Total Annual Premium Cost

Replace: After 3 months After 6 months

50% of salary 60% of salary 75% of salary

$24,000 $20,000 $26,750 $24,000 $30,000 $27,250

Benefits Plan Proposal Form

1 0 0 CHAPTER SIX

I. Life Insurance

Benefit___________________

Eligibility________________

Cost to employee__________

Insurer___________________

Employee impact__________

II. Sick Leave

Benefit___________________

Eligibility_________________

Accumulation of unused leave

Payment for unused leave___

Employee impact___________

III. Vacation

Benefit___________________

Eligibility__________

Employee impact____

IV. Long-Term Disability

Benefit_____________

Eligibility__________

Employee impact____

Financial Impact

Plan Current Cost - New Cost (est’d) = Impact

1. Life $ - = $________

2. LTD $________ - = $________

3. Sick $________ - = $________

4. Vacation $________ - = $________

COMPENSATION AND BENEFITS 1 01

Net Impact

7 Training and

Career Development

In very broad terms, training can be considered as the process of learning how to perform the tasks needed in order for the organization to function. This broad definition covers a variety of instructional and learning processes, ranging from formal, classroom training programs to on-the-job training and self-directed learning. It also includes the “entry” learning experiences of orientation and socialization. Under this broad definition, training can be provided not only to employees of the organization but also to customers and suppliers (Rothwell & Kazanas, 1989). A more focused definition of training considers it as the systematic process of learning the skills, rules, concepts, and/or attitudes that result in improved performance in an operating, “live” environment (Goldstein, 1986). In this framework, training tends to refer to more formally planned, organized, and conducted instructional programs.

An interesting account of the role and functioning of a training program carried out in broad and elaborate terms is reported by Cooper (1987) regarding the preparation of crews for space shuttle missions. Each mission is a unique event that lasts for no more than a week or two. Yet the enormous complexity and cost of each space shuttle voyage requires up to a year’s worth of preparatory training for each crew. Crews learn not only the mechanics of piloting the spacecraft in simulator exercises but also how to conduct the various experi­ ments and activities planned for the mission. Great amounts of time are devoted to how to handle emergency conditions. One particularly important aspect of the training is the development of teamwork. This is a learning objective for the crew from the very start; later, as the date for liftoff approaches, the crew practices with the ground controllers to widen and strengthen the teamwork skills necessary for a successful launch.

TRAINING, LEARNING, AND ORGANIZATIONAL PERFORMANCE

Training is the process of instruction; learning is a relatively permanent change in behavior that results from practice or experience. Although training should produce learning, it is possible that there can be training without a satisfactory learning outcome, or that what is learned from a training program is not what was intended.

102

TRAINING AND CAREER DEVELOPMENT 1 0 3

Likewise, learning occurs regardless of whether there are formal training programs in place. For example, Stohl (1986) found that new employees learned certain “memorable messages” about how they should act as part of their informal socialization into the new company. During the new employee’s first 2 to 3 months on the job, a coworker would give the new employee a homily that explained how to act in the organization. Simple statements such as “There’s plenty of time to sleep when you die,” or “Keep loading the wagon and forget about the mule going blind” capture and convey two different lessons about expected employee job performance.

Without a properly managed training process in place, there are several undesirable outcomes that may occur. First, the instruction that is done may be uneven in quality and effectiveness. This means that the wrong skills may be taught and/or that employees are inadequately prepared for all their job duties. Second, without adequate training, employees are more easily flustered and stressed in trying to do their work. This can lead to increased errors and customer ill will. Consider the case of a bank teller who is uncertain what to do while the customer being served is watching her every move. Uncertainty leads to delays and mistakes, irking the customer and generating frustration all around. Such stressful working conditions can demotivate the employee and even create pressures on the employee to quit. Third, errors made in doing a task mean that the work must be corrected. Corrections take time and cost money. As Crosby (1979) put it, “quality is free”; it’s the mistakes that are costly. The goal of training as part of the human resources management process is to create cost-effective programs that build the skills needed to perform effectively.

Although organized training should play an important role, employee learning is not limited to formal training; employees do learn on their own (Clardy, 1992). Some portion of all the self-directed learning that occurs in an organization is a response to changing organizational and job conditions, whereas another proportion is due to employees who eagerly and voluntarily undertake learning projects in which they are interested. Indeed, it is possible to characterize the learning orientation of an organization by the extent to which employees voluntarily pursue vocationally oriented self-directed learning projects (VO SDLPs). An organization in which a relatively large number of employees pursue VO SDLPs is one way to define a “learning organization” (Levitt & March, 1988; Senge, 1990; Watkins & Marsick, 1993).

In Learning on Your Own, you are asked to assess the extent to which you may have undertaken vocationally oriented self-directed learning projects. In this type of learning projects, you control the learning process in identifying topics of interest, plan and organize the learning activities, engage in the learning, and evaluate what you need to do next. As you complete this assessment, consider what factors may be responsible for your undertaking these projects and to what extent others that you know or work with may do the same. How can an organization’s practices and programs encourage more self-di­ rected learning among its employees?

TRAINING PROGRAM DESIGN

Formalized training programs can represent significant costs as well as returns to the organization. In order to create the most cost-effective training, several steps are critical in the development and design of any program. Such steps assist in pinpointing what should

be covered by the training, how the training should be conducted, and how to increase the chances that the skills learned in training will carry back to and be used on the job.

The Identifying Training Needs assignment presents you with the results of a “needs assessment” survey of managers and store performance in one region of the Alpha Service Stores chain. Your task is to examine this information in order to identify the specific areas that should be covered in a planned management training program.

In Plotting the Learning Curve, you participate in an experiment intended to test the effectiveness of different instructional conditions. Often, training may be scheduled to occur in the shortest time possible. However, this experiment tests the effects of alternative training schedules, particularly on task performance. You have the opportunity to consider the issue of program scheduling.

Training should prepare the employee to perform more effectively back on the job, but there is no guarantee that the learning shown in the classroom will be used to change behavior on the job and, supposedly, improve organizational results. For example, the conditions on the job can be different enough from training conditions that the employee has difficulty remembering how and when to use the skills. Or, if the skills are not used regularly, the learning will “decay” (National Research Council, 1991).

Other reasons why training may not carry back to the job are managerial and admin­ istrative ones. For example, employees quickly learn how interested their managers are in certain things by the amount of interest and attention paid (Peters, 1978). If a manager is keen on something, be it a product, program, or customer service, the employee knows this because of the frequent questions, regular reports, and ongoing discussions about it. However, in spite of a manager’s pronouncements to the contrary, if the manager pays little attention, the employee will spend little energy. The employee leams what the manager thinks is important and will organize and spend his or her time accordingly.

The design of a training program should weave together a variety of strands in order to create the most cost-effective mix of learning activities that produces the best learning and skills transfer (Rothwell & Kazanas, 1992). For example, the training program should:

• Have an obvious role in executing the goals and needs of the organization. • Be based on what participants need to learn. • Define specific learning objectives. • Use learning methods and techniques appropriate to the content. • Follow a schedule that optimizes the learning. • Build in a suitable evaluation mechanism.

In the Employee Assistance Program Training Design assignment, you are presented with the case of Metropolitan Systems. Metropolitan has seen an increase in various troublesome employee behaviors and believes that better use of its Employee Assistance Program could make a significant difference in these behaviors. Your task will be to identify what competencies Metropolitan supervisors should have in order to make this system work and to create a training plan for producing those competencies in the most cost-effective manner.

As noted previously, the evaluation of a training program should be an integral part of any training program. It is through the evaluation process that the effects of the training

1 0 4 CHAPTER SEVEN

TRAINING AND CAREER DEVELOPMENT 10 5

can be assessed, and improvements made to the program (Kirkpatrick, 1987; Phillips, 1983; Seashore, Lawler, Mirvis, & Cammann, 1983). However, although recommended, the practice of evaluation is often neglected or done inadequately.

CAREER MANAGEMENT AND DEVELOPMENT

Career management and development is a specialized application within the context of employee training. As in training, career development deals with systematic employee learning. The framework for career management and development, though, is broader: The span of an employee’s career within the organization is marked by the person’s progression and movement through different jobs (Nadler, 1979). From the perspective of career development, the emphasis is on recognizing and responding to the changing interests and needs of employees as they grow and mature within the organization. Career management, on the other hand, takes the organization’s point of view in putting together job ladders, career paths, rotation programs, and planned learning activities (Lombardo & Eichinger, 1989) to improve the supply of talent among current employees. As such, career management can play a vital role in supporting the business and human resources planning process.

In Where Is Everybody?, you are given the situation of Howard National Bank. Howard is experiencing problems retaining and promoting qualified personnel to support its business plan. Your task is to consider how a career development program could address these issues and to sketch out a structure for what a career development system could be.

SUMMARY

Employees will learn on the job. Without a well-planned and managed training function, however, the learning that takes place can easily be incorrect, inefficient, and, in the long run, demoralizing and counterproductive. For that reason, employee training and devel­ opment is an essential tool for effective human resources management. Indeed, the view is increasingly voiced that strong training (or human resources development) can provide an essential basis for achieving and sustaining competitive advantage in the marketplace (Ulrich & Lake, 1990).

To be done effectively, the training function should be well planned. This means applying the appropriate instructional methodologies to identified learning needs. Further, the transfer of skills learned during training back onto the job should not be assumed but rather managed and encouraged. The program should be evaluated and actions taken accordingly. Career management and self-directed learning can also be promoted.

1 0 6 CHAPTER SEVEN

Learning on Your Own: Vocationally Oriented Self-Directed Learning Projects

Instructions

As employees, we leam about our tasks, jobs, and vocations in a variety of ways. One way is through self-directed learning projects. Self-directed learning projects are activities you undertake that have the primary purpose of learning about job, vocational, or occu­ pational matters. For example, you might read a manual to leam how to operate a new software program, ask your boss for a special assignment so that you can leam more about an area in which you don’t normally work, interview marketing professionals to find out ways to install service quality programs, or attend classes to leam new skills to make a career change or switch employers.

No matter what the specific program is, in self-directed learning, you control the learning process. This can mean learning on your own or with others (including both formal classroom educational programs and informal, noncredit learning activities).

In Column I, you are asked to write a brief description of any vocationally oriented self-directed learning project you recall undertaking in the past year. Remember, the project should be work related, whether it is intended for your current employer or not. In Column II, estimate the total number of hours you spent on this project during the year. Your total time should include time spent on all activities that are part of the learning project, such as time spent identifying what you want to leam, making learning plans, and finding and using learning resources like people, books, courses, and so forth.

Column I Column II Vocationally oriented self directed learning project Total time spent

It is easy to forget some learning projects in which you may have been involved. Did any of the following experiences happen to you during the past year that may have prompted you to undertake a learning project? If so, please identify what the learning project was and the total number of hours you spent on it in the space following the responses.

Answer each of the six questions.

1. Was there a change in job duties or a special assignment that led to learning projects? [ ] No, there was no change in my job duties or assignments. [ ] Yes, my duties changed but no learning was required. [ ] Yes, my duties changed and I undertook the following learning project(s):

TRAINING AND CAREER DEVELOPMENT 1 0 7

2. Was there new equipment, procedures, laws, or regulations that led to learning projects? [ ] No, there weren’t any new additions to my work from any of these sources. [ ] Yes, there were changes but no learning was required. [ ] Yes, there were changes and I undertook the following learning project(s):

3. Were there any organizational changes (from expansion, reorganization, or down­ sizing) that led to learning projects? [ ] No, there weren’t any organizational changes. [ ] Yes, there were changes but no learning was required. [ ] Yes, there were changes and I undertook the following learning project(s):

4. Did you have a performance appraisal that led to a learning activity? [ ] No, I did not have a performance appraisal. [ ] Yes, I had an appraisal but no learning activities occurred as a result of it. [ ] Yes, I had an appraisal and I undertook the following learning project(s):

5. Did you have a new interest or curiosity that led to a learning project? [ ] No, I did not have any new particular interests or curiosities. [ ] Yes, I had certain interests or curiosities but no learning activities for them. [ ] Yes, I had certain interests or curiosities that led to the following learning projects:

6. Did you have a goal to move to another job that prompted a learning project? [ ] No, I did not have a goal to move to another job. [ ] Yes, I had a goal to move to another job but this did not involve any learning projects. [ ] Yes, I had a goal to move to another job that led to the following learning

project(s):

Analysis

1. How much job-related self-directed learning did you undertake within the past year?

2. How much of this learning was triggered by changes in your workplace or job, and how much resulted from your own interests and needs?

3. Was the focus of this learning directed toward your current job or was it directed toward a different job or a different employer?

1 0 8 CHAPTER SEVEN

4. How much self-directed learning do you notice in the other people with whom you work?

5. What can your organization do to encourage self-directed learning among its em­ ployees?

TRAINING AND CAREER DEVELOPMENT 1 0 9

Identifying Training Needs

Situation

You work for the Alpha Service Stores. Alpha is a chain of retail stores spread over a three-state area. The stores sell a line of both nondurable and durable goods to consumers in their market areas. Alpha is organized into 10 regional groupings. Each grouping contains approximately eight stores. The stores are usually located in or near suburban shopping malls, and each store operates as a profit center. The stores are staffed by a general manager, two assistant managers, several department managers, and an average of 20 nonexempt personnel in sales, merchandising, distribution, and service positions.

You were recently hired to work in the Region Four office. Your boss is Pat Vinson, whose career began with Alpha about 15 years ago. All the store managers report directly to Pat. Your first assignment involved picking up the pieces of a project that has been kicking around for the past year: planning for the training of the management group in your region.

A file of information has been collected during this period and is presented to you for action. This information includes various measures of performance and other reports, including the results of a training “needs assessment” conducted about 4 months ago. The original intent behind the project was to train the management staff (store managers, assistant managers, and perhaps department heads) in how to manage and supervise more effectively.

Your boss, in reviewing this assignment with you, has questioned whether any training is necessary at this point, but has put the decision in your hands.

Assignment

You are to make a determination, from the information provided, whether training is appropriate. If it is not, justify your answer. If it is, you are to recommend (in outline form) what the training should cover and a suggestion about the schedule or timing under which it should be conducted. You may also make any recommendations for other policies, programs, or initiatives that seem indicated by the data provided.

1 1 0 CHAPTER SEVEN

Comparative Information: For Alpha Services Stores in Region 4 as Group and by Individual Stores

Actual for Each Store

Group Averages Stores

Alpha Region 4 1 2 3 4 5 6 7

Years in Current Position with Alpha:

General Managers 3.6 3.0 Ages 42 38

Assistant Managers 2.2 2.5

9.6 52

6.8

5.1 41

1.9

1.1 37

.5

.7 32

3.4

2.8 36

1.9

1.2 35

.9

.2 34

1.8

Number of Total Employees Per Store 26 25 24 26 24 25 23 27 26

Employee Voluntary Turnover (Annual Percentage) 26% 33% 16% 19% 36% 39% 33% 42% 43%

Annual Sales per Store ($000,000): 1.6 1.3 2.4 1.8 1.0 .9 1.3 1.1 .6

Sales/Employee ($000) 62 53 100 69 42 36 57 41 23

Repeat Customer Business (Percentage of Customers Who Shop in Store 3 or More Times During the Year)

57% 42% 71% 59% 38% 34% 51% 26% 14%

TRAINING AND CAREER DEVELOPMENT 1 11

Training Needs Assessment Management and Supervisory Practices Survey

Summary of Results

Background

One hundred eighty nine employees (both management and nonmanagement) in Region 4 of Alpha Service were given a blank copy of the Management and Supervisory Practices Survey form in March (4 months earlier). Employees were asked to rate each of the items on the survey in terms of (a) that item’s importance to the employee, and (b) how well the employee’s manager typically performed that item. Employees were told to complete the survey anonymously and return it directly to the Region 4 Headquarters office. There was a 65% response rate of 123 forms. The percentage of responses for all items is shown. The meanings of the two scales are also shown:

Importance: 1 = very important 2 = somewhat important 3 = not very important

Performance: 1 = not performed at all 2 = seldom performed 3 = occasionally performed 4 = usually performed 5 = performed all the time

To what extent is this item: Important? Performed?

1 2 3 1 2 3 4 5My manager:

1. Sets clear and specific goals.

2. Defines job duties clearly.

3. Establishes specific standards of expected job performance.

4. Makes effective work plans.

5. Allows us to participate in planning and decision making.

6. Creates satisfying work conditions.

37% 59% 4% 0

74 24 2 4

75 23 2 6

31 49 20 1

70 30 0 12

62 29 9 8

6% 58% 23% 13%

26 39 18 13

28 40 19 7

11 22 58 8

29 43 12 4

36 35 12 9

112 CHAPTER SEVEN

To what extent is this item: Important? Performed?

1 2 3 1 2 3 4My manager:

7. Shares information about what is going on in the company.

8. Listens effectively to my ideas and concerns.

9. Can be believed. 10. Makes sure employees

are properly trained. 11. Keeps a close eye on:

production morale

12. Tries to solve problems rather than place blame.

13. Treats employees fairly. 14. Provides effective feedback

about my performance. 15. Gives good recognition

for jobs done well. 16. Promotes teamwork. 17. Encourages new ideas.

29% 62% 9% 19%

58 39 3 9

41 44 15 16 74 26 0 4

11 62 27 2 62 27 11 27 53 39 8 10

76 22 2 17 67 29 4 7

72 24 4 16

68 29 3 9 23 36 41 29

39% 22% 11% 9%

41 24 15 11

46 0 24 12 25 31 28 12

9 23 39 27 39 23 9 2 23 36 19 11

23 47 10 3 27 35 15 6

21 50 9 4

24 35 24 8 36 19 13 3

Comments From Focus Group Discussion With Region 4 Managers Following Review of Needs Assessment Data With Them

Manager A: “I ’m still very new here and it’s taken me a long time to learn how to get things done around here. The procedures are sometimes very confusing and it takes so much effort to get any new ideas approved around here.” Manager B: “We’re told that our employees are important and that we should be considerate. Yet if there is one slight deviation from budget, there is hell to pay, so it’s easier to manage by the numbers.” Manager C: “I don’t know how where I stand with the company. Although I’m still new, I have been around long enough to do better than I ’m doing. I ’d like to pay my employees more to reduce turnover but I can’t because of “budget” reasons. I don’t know whether I’m doing as expected or about to be fired.” Manager D: “There’s so much pressure on us to perform that we don’t have much choice but pass that pressure onto the employees. And I know they don’t like it because they’re always grumbling and quitting.” Manager E: “I know a lot of us came from other businesses to Alpha. It’s taken me longer than I expected to leam the specifics of the business and how to manage it.”

TRAINING AND CAREER DEVELOPMENT 11 3

Plotting the Learning Curve

In this experiment, you consider the effects of different instructional conditions on learning and future task performance. Write the names of the two students who will go through the instruction phase of the experiment. Record the time it takes them to complete the task after each trial run.

Student______________________________ Student______________________________

Trial Number Time in seconds Trial Number Time in seconds

1 1

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

10 10

11 11

12 12

13 13

14 14

15 15

Write in the range of time values in the vertical axis on the left. Plot each of their time scores for each trial. Be sure to use different symbols (e.g., circle vs. dot) for the two students. Draw lines connecting those symbols to represent the learning curves of both students in mastering the task.

1 1 4 CHAPTER SEVEN

Time in Seconds

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Trials

TRAINING AND CAREER DEVELOPMENT 1 1 5

Employee Assistance Program Training Design

Background

Metropolitan Systems is a medium-sized firm of 300 employees (including about 60 managers) that provides various consumer service products to a regional marketplace. Recently, Metropolitan has seen an increase in various indicators of troubling employee behaviors, such as stress, absenteeism, turnover, disciplinary problems, interdepartmental conflict, and the like. In response, Metropolitan began to work with the Willows Coun­ seling Services Company.

Willows Counseling is an independent employee assistance program (EAP), staffed by professionals that offers a full range of counseling services for alcohol and drug abuse, family and marriage problems, stress, and financial and career management difficulties. Under this agreement, Metropolitan employees can contact a Willows’ counselor directly for help. Metro employees are receiving information about this new program now.

A Metropolitan supervisor can refer employees to Willows when there is a suspected need or problem. When this occurs, an EAP referral is considered part of Metro’s pro­ gressive disciplinary procedure. The disciplinary procedure identified in Metro’s employee handbook begins with a formal verbal warning, which is then followed by a written warning, next is suspension without pay, and finally termination, if there is no improve­ ment along the way.

Assignment

Your job is to design a training program that will prepare these managers and supervisors to be able to use the EAP as needed. There are no inherent limits on the program’s length, timing, schedule, or format, although the more cost-effective the training, the better. Assume that all of Metro’s managers and supervisors need to be trained in this area, and that all will be required to attend the training. Your plan should include the following components:

1. An analysis that identifies the competencies a trained manager or supervisor should have in using the EAP as part of the disciplinary process. Use the Essential Com­ petencies worksheet to identify those skills and abilities.

2. A program design that lists the sequence of topics to be covered and the method(s) used for covering them. Use the Training Program Design worksheet to prepare your plan.

3. A plan for evaluating the results of the training.

Employee Assistance Programs Background Information

According to some reports, about one fifth of the workforce may be affected by personal problems of one kind or another. Whether caused by substance abuse, difficult working conditions, or personal problems at home, the effects of these problems on productivity

1 1 6 CHAPTER SEVEN

can be high, and the costs to the employer can be great. Further, some kinds of “disabilities” may be protected by law from arbitrary employer reaction. Employee assistance programs (EAPs) have become increasingly common means for confronting these problems in a constructive, legal manner. There are a variety of issues, though, to be addressed if supervisors are to be able to take effective advantage of EAPs.

How an EAP Process Works

EAPs are programs designed to counsel with and assist employees having personal prob­ lems, including drug or alcohol abuse, personal or family problems, and the like. Typically, an EAP will include a diagnosis of the problem, some kind of intervention to stabilize and treat the problem, plus follow-up support and assistance. Depending on the kind of EAP, referrals to other helping agencies may also be made.

An EAP may be structured in several different ways. For example, the company may employ someone on a full-time basis to offer EAP services in-house. Or, the EAP may be an independent group of professionals whom employees may call for assistance. EAPs may also refer their clients to other, more specialized treatment facilities.

The services provided by an EAP may or may not be covered by the health insurance plan offered by the employer. If the employer has a plan that covers certain treatments, the charges may be handled according to the requirements of the plan. Often, though, the employer assumes the costs of some initial visits to the EAP.

To work most effectively, certain organizational conditions should be met. First, top management should support the EAP. Second, the availability and use of the EAP should be documented in company policy and communicated to employees. Third, the individuals staffing the EAP should be professionally trained. Fourth, managers and supervisors should be trained in how to use the EAP. Finally, the EAP should be evaluated for how well it is serving the needs of the organization and its employees.

Legal Issues

There are several legal considerations that affect the use of EAPs by supervisors. First, certain kinds of employee conditions that can be treated through an EAP may be protected by either federal or state law. The Rehabilitation Act of 1973, for example, creates certain protections for alcohol abusers. This means that certain kinds of problems must be handled in certain ways prior to termination. Along the same lines, all employees with similar symptoms should be treated in the same manner.

Second, there are restrictions on the confidentiality of patient information. Supervisors should not expect to obtain information about the nature of the employee’s condition or about the progress of treatment from the helper without a written release. An exception to this rule would occur if the helper learned that the patient posed a real risk to the supervisor’s life and safety.

Third, the positioning of an EAP referral as part of a disciplinary procedure could be misinterpreted. For example, the employee might believe that the EAP treatment must first be completed before termination could occur. To prevent any misunderstanding,

TRAINING AND CAREER DEVELOPMENT 1 1 7

employees should be told of the organization’s policy on this matter before entering the EAP.

Fourth, any actions taken by supervisors should be in response to an employee’s poor job performance and not because of perceived or suspected problems, like substance abuse. However, this means that the supervisor must be prepared to document poor job performance. Likewise, a supervisor should know when and how an employee can be removed from a job assignment when danger seems likely due to erratic or unstable employee behavior.

Supervisory Actions

In addition to knowing the terms and conditions for using an EAP, there are other issues involved. For example, should the supervisor try to directly counsel an employee suspected of having a drug problem? Or what should a manager do if an employee admits having a marital problem and asks for the manager’s help? Managers and supervisors need to know what role they should perform.

Another issue involves knowing when and how to detect whether there is a “refeirable” problem. For example, how can a supervisor detect whether there is an underlying problem that is producing a performance problem?

Some supervisors and managers may be reluctant to start a discussion in an area traditionally seen as personal and private. This reluctance to intrude may prevent the supervisor from even suggesting the use of an EAP with a troubled employee. In the same vein, the belief that an EAP program is for “sick-O’s” or is a sign of a character flaw can have the same result.

Bringing up the subject of EAP referral can be a tricky. Some employees may resent the intrusion or take offense at the suggestion. Others may break down at the thought of being discovered or that their job could be in jeopardy.

In short, the following issues face managers and supervisors in learning how to use an EAP: How does the supervisor incorporate an EAP referral into a disciplinary proce­ dure? How should the supervisor deal with the employee who is in an EAP program? Can the employee be required to go to an EAP? Can there still be disciplinary actions and/or termination? How can the supervisor know whether the employee is still involved in the treatment?

Other Matters

A progressive discipline policy typically identifies a series of steps that would usually be followed in dealing with job performance problems. There can be exceptions for extreme, serious problems. In general, the procedure should be followed. Wavering from the procedure can invite claims of unfair treatment. An employer may mandate EAP participation by specifying it as a step in a progressive disciplinary procedure. If an employee is participating in an EAP, though, minimum performance standards can be maintained, and an employee generally held accountable for meeting those standards.

EAP Training for Managers and Supervisors Essential Competencies Worksheet

Job Analysis

A manager or supervisor should have the following competencies in order to be considered well trained in how to use EAP services in managing his or her employees:

1 1 8 CHAPTER SEVEN

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P T

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IN IN

G F

O R

M A

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A N

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1 2 0 CHAPTER SEVEN

Where Is Everybody?

Background

Howard National Bank is a mid-sized financial institution serving the metropolitan area. There are approximately 230 employees, about two thirds of whom are in 20 branch banks. Howard National has steadily grown over the past 40 years, and the business plan is designed to continue that growth over the next 5 years.

Howard National is divided into two primary line functions. The commercial group concentrates on providing loans and related services to business clients. The branch banking group offers a full range of depository, consumer loan, and related retail financial services to individuals and families in its market.

The senior vice president in charge of the branch banking group is Charlie Potts. As such, he is responsible for making sure that consumers are well served so that the bank has an adequate flow of deposits to lend to its business customers. However, Charlie is finding that his ability to meet his business mission is being thwarted because of turnover among the staff in his branch banks. He is particularly concerned about the loss of high-potential personnel in this flow out of the bank.

The Organization of the Branch Banking Group

The structure of the branch banking group is shown in Fig. 7.1; it is similar to that of other banks. The consumer loan department processes and manages the consumer loan portfolio (car loans, home improvement loans, student loans, lines of credit, and the like). This department serves as staff support for the branch offices, because the applications for such loans start in the branches. Branch personnel must be knowledgeable of consumer lending techniques and practices, too.

The branch administration area oversees the 20 branch offices. Each branch operates as a full-service unit. Type 1 branches are the larger offices with an average of six tellers and two new accounts clerks. Type 2 branches are the smaller offices with an average of three tellers and no new accounts clerks.

BRANCH BANKING GROUP

Charlie Potts SVP

Branch Administration

Consumer Lending

Type 1 Type 2 Branches

(7) Branches

(13)

FIG. 7.1. Organization of branch banking.

TRAINING AND CAREER DEVELOPMENT 121

The standard roster of positions in each branch is described in the following:

A. Branch Manager. A branch manager is in charge of each branch. About 60% of the managers are women, age 35 or older, who have been with the bank for 5 to 10 years. Many of the current managers started as tellers, and teller experience is considered essential for any manager. About 50% of the managers have some college education (five have degrees). However, a college degree does not seem essential, because some of the best performers in the system do not have one. The manager is expected to be proficient in all aspects of running a branch, plus have skills in consumer lending, finance and commercial business lending, and business development selling.

B. Assistant Branch Manager. Each branch also has an assistant branch manager, who serves as the back-up to the manager. The assistant manager is not expected to have the full range of skills of a manager, but those wishing to be promoted into manager positions do need to begin learning these additional skills. Unfortunately, at Howard National, there is not a well-planned training process for personnel in these positions.

C. New Accounts Clerk. The Type I branch offices have new account clerks who work in the lobby to help customers open various accounts. This position is considered a training ground for assistant managers. To be promoted into a new accounts clerk position, the individuals must have teller experience with the bank.

D. Head Teller. The head teller supervises the other tellers and manages certain special functions, such as cash supply and servicing business accounts. Head tellers are promoted from tellers who perform well.

E. Teller. This entry-level position requires some level of training in how to handle cash, process customer transactions, sell services, and complete internal operational pro­ cedures. A high school degree is sufficient for this position. Most of the personnel hired here are young women, ages 18 to 25.

In short, there is a common movement of personnel through the various positions in the branch banking group. Each position can serve as a natural training ground for the next position.

Charlie’s Problem

Charlie’s main problem is one of turnover: He keeps losing personnel at all levels in this system, from tellers to managers. Although some level of turnover is accepted and, in some cases, desired, the general level of turnover is now hampering his ability to meet the business goals for the bank.

Particulars of the problem include:

1. Two of the main reasons individuals give for leaving the bank are poor training and an uncertain career with the bank. Employees indicate that they have little information about career opportunities and how to move up the organization. Many of the younger people are still in a career exploration stage in their lives and need assistance in identifying career interests, goals, skills needed, and career development plans.

122 CHAPTER SEVEN

2. The availability of talent for promotion inside the branches is less than adequate for the number of positions that open up. As a result, many positions must be filled through external recruitment.

3. The personnel area indicates that the time and expense needed to recruit and hire from outside the bank are becoming high. Further, hiring outside for assistant manager and manager positions means that the people selected are not fully productive until they learn Howard National methods, products, and procedures.

4. Charlie wants to have a system in place that allows him to have a reasonably predictable supply of trained personnel on hand at one time that are ready and available for promotion. Charlie estimates that he would like a roster of about five individuals-in- waiting for promotion into new accounts, assistant manager, and manager positions.

5. There is a job posting program in place in the bank. However, individuals in the branch system seldom use it because they often feel like they do not have the qualifications to be considered. Further, although there is a training program in place, it is irregularly scheduled and delivered. There is a standard performance appraisal program in place for use in making salary decisions. Although there is a skills development option in the appraisal, it is seldom used.

Assignment

You have been called in to assist Charlie in dealing with this problem. You are to consider whether a Career Development program could be a solution. You are to evaluate and develop recommendations in response to the following questions:

1. Can a career development program of some sort be a solution, either partially or in full, to Charlie’s problem? Justify your answer.

2. If the response is yes, develop a career development program for meeting this problem. In considering such a program, you may want to address the following components: • Career path structure. • Career-planning programs. • Selection and promotion criteria for positions. • Encouragement and recruitment of employees to participate. • Training programs and scheduling. • System controls. • Managing supply of talent. • Information and communications to employees. • Any other changes to human resources policies and procedures.

Prepare a proposal for a career development program that could solve these problems.

8

Improving Organizational Performance and Quality of Worklife

If there is one fact that seems inescapable to organizations today, it is that change must become a way of life (Coates, Jarratt, & Mahaffie, 1990; Ulrich & Lake, 1990). In part, change is required if organizations are to become more competitive. Finding ways to innovate (Kanter, 1983), streamline organizational processes (Imai, 1986; Meyer, 1993), improve quality (Deming, 1982), or create new structures that better serve changing markets (Quinn, 1992) are all central to the push for competitive advantage. This is particularly true for firms that must compete in international and global markets (Cuomo Commission, 1988; Kozminski, 1993). Further, change is driven by technology, especially by the developments in information technology and communications (Morton, 1991). In part, change results from the restructurings of the economy itself (Bridges, 1994). Or­ ganizations must deal with the changes brought about by public policies and employee expectations for a better quality of working life (Davis, Chems, & Associates, 1975; Harman & Hormann, 1990).

The automobile industry illustrates the dynamics of these changes and serves as an anvil on which the process of managing these changes is hammered out and fashioned. In their study of the major car companies across the planet, for example, Womack, Jones, and Roos (1990) found wide differences existing between the best-in-class producers and the other manufacturers. They observed that Toyota’s system of just-in-time manufacturing is as radical a departure today as was Henry Ford’s introduction of the assembly line in the mid-1910s. Halberstam’s (1986) riveting comparison of Ford and Nissan put a personal face on the battles and losses of U.S. manufacturers occasioned by strong foreign com­ petition. However, the shock waves battering Ford did have a positive, long-term benefit, as Ford successfully found ways to adapt and thrive in this new, tougher business climate.

Change is a pervasive theme of organizational life. Although the sources of change can be many, change is focused on several specific outcomes: improving competitive position, increasing operational efficiency, and providing a better quality working environment.

Given the power and presence of change, a major question facing the human resources professional is how best to make change happen in the workplace (Tannenbaum, Mar- gulies, Massarik, & Associates, 1987). The answers to these questions include more than

123

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just training, although training may play an important role. Indeed, the whole arsenal of human resources management policies and practices may have to be altered and realigned to produce the long-lasting changes desired.

One example, drawn from the daily news, concerns violence in the workplace (National Institute of Occupational Safety & Health, 1993; Solomon & King, 1993). As the pressures of sweeping economic change raise stress and uncertainty levels, the shadow of violence has grown to the point where homicide is now the third leading cause of death at the workplace in the United States (Bensimon, 1994). How can an organization act to neu­ tralize this change in the broader society from afflicting them? Although training is an important part of the solution, training will not provide the complete answer. Other aspects of the organization’s human resources management system must be addressed as part of the overall solution (Hunter, 1990; Quirk, 1993; Thornburg, 1993).

In the Supervisory Training: Violence in the Workplace assignment, you are presented with the case in which the possibility of violence in a work situation seems real. There has been little done inside the organization previously concerning violence management. Your task is to identify how to institute a new system for handling violence for this organization.

Violence in the workplace is part of a larger concern about employee safety on the job. In general, safety matters focus on how to prevent injury and disease from harming employees. For human resources managers, putting programs and practices to encourage safe work behaviors in place is a primary concern because of the sound business sense it makes (Occupational Safety & Health Administration, 1990). For example, safe and healthy workers can be on the job, doing the work for which they were hired while not using medical or disability insurance. Thus, the twin benefits of productivity and lowered costs mutually satisfy both business and personal goals. A classic example in this regard concerns lifting heavy objects: Without proper training and encouragement, employees can create serious back problems for themselves and for their organization.

In Back on Safety, you work with a company that is experiencing an increase in unsafe employee behaviors. Your task in this assignment is to develop a complete safety program to change existing practices into more safe and healthy ones.

Ineffective employee behaviors are not restricted to unsafe physical actions. Indeed, poor customer service and inefficient operations can be as dangerous to the long-term health of any organization as physical hazards can be to employee health. Excellent customer service is increasingly recognized as one basic key to organizational success (Albrecht, 1992; Desatnick, 1987; Lele & Sheth, 1987). The potential loss of customers to a business can be devastating. For this reason, team building is an often recommended approach as a way to deal with teams that perform poorly (Dyer, 1977).

In Taking One for the Team, you are given information about a customer service unit experiencing problems performing effectively as a group. Some initial data about team functioning is provided. Your task is to look at how a team building process can be applied to this situation.

Employee participation in organizational change projects is generally recommended as a way to make the process of change happen more efficiently (French & Bell, 1973). Employee attitude surveys are often used in this context to gather information about how employees are feeling about their employment. Results of this survey are then fed back

to the employees as part of a problem-solving process to look for ways to identify problems and develop solutions.

The Survey Feedback assignment is an experiment that demonstrates how the survey feedback process can work. Through considering your reactions to different instructional and learning methods, you can see how student feedback can be used as part of the change management process.

Change is a constant for organizations. Rather than opposing it, human resources managers may need to be the champions of change, showing how to most effectively bring about the transformations needed for long-term organizational success. The issues and techniques of change management go beyond training to include all the different policies and practices that can shape employee job performance. The human resources professional must be skilled in creating a plan that produces the changes desired in the most cost-effective manner possible.

IMPROVING PERFORMANCE AND QUALITY OF WORKLIFE 125

1 2 6 CHAPTER EIGHT

Supervisory Training: Violence in the Workplace

Context

You are a human resources officer for Republic Services. Republic is a medium-sized firm with a number of retail service centers scattered across the metropolitan area. The headquarters office is located in the downtown area and houses the executive offices, accounting, marketing, information systems, and human resources functions, as well as the operations group. There is also a warehouse distribution center in a suburban location.

To manage the 600 Republic employees in the various production jobs, there is a cadre of approximately 75 managers and supervisors. This administrative group includes the managers of the service centers and operations units, as well as the managers and super­ visors in the headquarters and warehouse areas.

Situation

It is 2:30 p.m. on a typical work day. You just received a call from Betty Baxter, a manager of your Southville Service Center. Betty called for your help in a rather unusual matter. Betty told you the following story.

Betty just completed a meeting with June Wilson, a customer service representative in the Southville Center. June had asked to talk privately with Betty about a troubling incident she just witnessed between Hank Alton and Lamar Washington.

Hank and Lamar were veteran customer service representatives who had both transferred to Southville about the same time 6 months ago. They were both were very sociable and friendly and seemed to “hit it off” very well from the start. Their natural friendliness grew first into good-natured joking with others, then between themselves. In turn, the joking slowly evolved into harmless practical jokes on each other. Over time, though, these practical jokes began to include some physical horseplay, like headlocks, half nelsons, and goosing. Since these practical jokes seemed to sustain a fun atmosphere in the Center, Betty tolerated their activities.

However, based on what June was saying, the nature of this relationship had evidently taken a nasty—and ominous—turn. According to June, she witnessed a confrontation between Hank and Lamar earlier in the afternoon.

W hile Lamar was bending over and moving som e materials in a display area, Hank sneaked up behind him and prodded him in the rear end with a pencil. Lamar, very surprised, almost lost his balance and dropped most o f what he was lifting. The contents in the box appeared to be damaged. Lamar wheeled around, saw it was Hank and exploded.

Lamar put his face right into Hank’s face, screaming that h e’d had enough o f Hank’s horseplay. He was incensed that he almost hurt him self from what Hank did. Lamar continued that h e’d told Hank on several recent occasions that Hank better stop this nonsense, and that this incident was the last straw. Lamar finished by saying that if Hank did it anymore, Lamar would make him stop perm anently. In June’s interpretation, the meaning was clear: Lamar was threatening to hurt, injure, or even worse, kill Hank. Hank just smiled, saying: “Ooohhh, I ’m so frightened” in an off-handed manner and walked away.

June did not think that Hank took Lamar seriously. June also said that a customer whom she was helping also saw the whole event. June felt that the customer, who seemed very interested in a particular product, turned cold quickly after seeing the incident and left the center in a hurry.

IMPROVING PERFORMANCE AND QUALITY OF WORKLIFE 1 2 7

Assignment

Address the following questions and topics.

1. Are there any requirements, obligations, or liabilities that Republic Services now faces in this matter? Consider what implications exist in this matter from the Occupational Safety and Health Act: Does Republic have to do anything in response? If so, what should Republic do?

2. What advice would you give Betty? How should Betty respond to this matter? 3. In your capacity as human resources officer for Republic, this incident has made

you concerned about how well the company and its managers and supervisors are prepared to handle potentially explosive situations. Senior management concurs. You have two assignments:

a) Prepare the outline o f a management and supervisory training program. The purpose of the training is to prepare managers and supervisors for dealing with potential and/or actual violent situations. Because none of the managers or supervisors in the company have had any prior training in this subject, assume all managers and supervisors are equally unprepared and that all will be required to attend. Any training program in this area should provide solutions to the following questions. You should make preliminary responses to these questions as part of your design. • What kinds of “signals” should supervisors look for that might indicate a poten­

tially violent situation? How should they respond to those signals? When should they take these signals seriously?

• What kind of role should supervisors play in situations like the one Betty Baxter described? That is, should supervisors try to mediate conflicts or should they stay out of them? If they mediate a conflict, what kinds of skills do they need? If not, what kind of role should a supervisor play?

• How should a supervisor deal with a fight that might be in progress at the worksite? Or what about a fight between employees where they “step outside”?

• Finally, in case some very serious, life-threatening situation does arise, what should a supervisor do?

b) Develop appropriate policies and procedures in all relevant aspects o f human re­ sources management to address the issues o f violence in the workplace. In fact, these policy issues should probably be settled before designing the training program. In this way, the training can teach participants what Republic’s policies are. In considering the area of policy, the following items have come to your attention: i. The Employee Personnel Manual does not specifically have a policy on violence

in general. The closest policy statements deal with Republic’s commitment to provide a safe workplace and a statement that assault will be grounds for im-

1 2 8 CHAPTER EIGHT

mediate dismissal. Should there be more of a policy statement, and if so, what should it include?

ii. Republic offers an employee assistance program to all employees through a contractual arrangement with an independent counseling service. The EAP is seldom used, though. There has been little communication to supervisors about the EAP, and you strongly suspect that the supervisors generally do not know how to use it.

iii. There are several questions that you feel need to be addressed about human resources practices as they may impact on violence on the job: • How should a supervisor handle terminations so that the potential for violence

is reduced? • What kinds of steps should human resources take in screening and selecting

people to avoid hiring people that might be violence prone?

IMPROVING PERFORMANCE AND QUALITY OF WORKLIFE 1 2 9

Back on Safety

Clean Sweep Distributors, Inc. is a warehouse wholesaling operation that supplies janitorial and commercial cleaning supplies and equipment to a large number of small cleaning services in the metropolitan region. Clean Sweep recently purchased a smaller competitor. This purchase led to a rapid expansion in the number of products carried and in the number of employees.

Clean Sweep now has a staff of approximately 110 employees, about 90 of whom are directly involved in unloading, stocking, or loading the large range of inventory products carried by Clean Sweep. There are five departments of approximately equal employee size: receiving, storage, order fulfillment, shipping, and transportation. The 90 employees working in the warehouse operation have completed an average of 9 years of school and are, on the average, 33 years old.

Most of the inventory comes packaged in 50- to 100-pound boxes. These boxes are manually stored in and retrieved from inventory control bins. The bins are positioned in long rows inside the warehouse. On each row, the bins are floor to ceiling (up to about 40 feet). To reach the higher bins, a ladder must be moved to the bin, then the employee climbs the ladder to get the item. During placement in the bin, the boxes must be carefully placed to maximize storage and inventory control.

Recently, management has become alarmed at the rapid increase in the number of safety problems coming from the warehouse staff. For example, there is an increase in lost time from injuries to the hands and feet, in medical costs for treatment to back injuries, and to workmen’s compensation costs from the more serious injuries.

Through casual observation, management has confirmed that there seem to be poor safety and lifting practices among warehouse employees. A few recent meetings stressing the importance of safe practices did not produce any reduction in these problems.

Assignment

Your task is to design a safety management program to improve and sustain safe working practices among the warehouse personnel. Common components to a safety management program include specifying the behaviors to be improved, establishing baselines of current practices, defining improvement goals, intervening for improvements (training, commu­ nications, standards setting, feedback, ergonomics), monitoring performance, encouraging improvements through financial rewards and/or recognition programs over the long term, and program administration.

Use the worksheet to complete your analysis and plan.

Back on Safety Analysis Worksheet

1. Based upon the facts presented, what kinds of safety performance behaviors should be improved?

1 3 0 CHAPTER EIGHT

2. In order to see whether your safety program is leading to improvements, a baseline of what employees are currently doing is needed. How would you establish what the baseline of current performance is?

3. What improvement goals should be established?

4. Identify what safety improvement interventions you would make and the schedule to follow in implementing those interventions.

5. How will you monitor and keep track of safety performance?

6. Would you use some kind of incentive program? If so, describe how it would work.

7. Are there any other details that will help facilitate administration of your program?

Taking One for the Team

IMPROVING PERFORMANCE AND QUALITY OF WORKLIFE 131

Hampton Utilities is a business that provides gas and electricity to the homes and busi­ nesses in the predominately rural, western region of the state. In addition to the Hampton Utilities headquarter’s building, Hampton Utilities has 10 customer service offices scat­ tered throughout the region. These offices are staffed with an office manager, an assistant manager and about five customer service agents. Typically, these offices monitor and process customer account payments, make service adjustments, direct service crews, and handle all aspects of customer inquiries and problems. The workload of each office requires that everyone in the office work closely together.

The Parkton office is managed by Carol Dunn, 37, who was promoted into the open office manager’s spot 3 months ago. The other personnel include:

• Fran Washington, 36, assistant manager. Fran was promoted into this position 5 months ago.

• Pam Coleman, 29, customer service agent (CSA) II (for 4 years). • Chris Miller, 31, customer service agent I (for 5 years) • Juanita Perez, 24, customer service agent I (for 3 years) • Mickey Franklin, 23, customer service agent I (for 1 year).

Ever since taking over as office manager, Carol has become increasingly concerned with the level of bickering and lack of cooperation exhibited by the staff. Although each employee is technically proficient in his or her job duties, there seems to be a large amount of stress and conflict among the personnel in the office. In part, this is due to how busy the office is. It is located in a growing part of the region and has the highest per-employee volume of activity.

Carol has asked Training and Development Director Hal Clark for assistance in this matter. Carol knows that the training department offers a “team building” service to the component units. Employee termination is not a solution at this time: Each employee is competent and has some tenure with the company. Further, Hampton prides itself on taking care of and protecting its employees.

The Team Building Service

The team building service offered by the Hampton Utilities training department uses a standard team-building process. According to a memo explaining this service, team build­ ing is a data-based, group problem-solving process for improving the performance of the team. This means that all members of the team participate in the steps of the team-building process. In this way, all employees work together in a series of guided team problem­ solving meetings to define the problem(s) and create solutions.

The steps of the team-building process are as follows:

1. Defining current team conditions through observations and interviews. This includes diagnosing the need for teamwork and creating acceptance of the use of an external

1 3 2 CHAPTER EIGHT

facilitator (someone who is not a member of the team and who aids the team in completing this process).

2. Collecting data on perceptions of team performance problems through observation, interviews, tests, and so forth.

3. Analyzing the data from the team: What are the specific problems that the team is experiencing in its operations and practices? One way to analyze team problems is: unclear or unshared goals, unclear or conflicting roles, poorly designed procedures, and interper­ sonal or personality conflicts.

4. Planning for and trying out solutions. Based on the analysis of the problem(s) ex­ perienced, a team-building intervention of some sort is planned and implemented. Some typical kinds of group-based interventions include: goal setting for the team, role analysis, responsibility charting, group interaction process analysis, and interpersonal conflict me­ diation. Other solutions may involve skills training, such as communication or leadership skills training.

5. Evaluating the program’s effectiveness. After some period of time, the performance of the team is reassessed to determine if the adopted solution has been effective. If not, the team repeats Steps 3 through 6 until the problem is resolved.

Assignment

1. Based on the data provided, identify some of the likely problems experienced by the team. The analysis worksheet can help guide your analysis.

2. Prepare a plan for a team building program with the Parkton office. As part of this plan, identify the goals for team building, the likely stages to the process, and an agenda for the first meeting with the team (including a review of the data with the team).

Data Reports

The first stage of the team building service involves determining the current operating conditions of the team and collecting data on the nature of the problem(s). In that context, Hal Clark interviewed Carol Dunn and Fran Washington, observed a recent office meeting, and had employees anonymously complete a team performance assessment survey. The results of his data collection are provided.

Initial Conditions Report by Hal Clark

This report is based on the initial phone conversation with Carol Dunn requesting assist­ ance, plus a follow-up interview with Carol and Fran. It includes my observations of the team’s group process in a team planning meeting.

IMPROVING PERFORMANCE AND QUALITY OF WORKLIFE 1 3 3

Request for Service

Four weeks ago, Carol called me to request our help in “getting the Parkton office staff to work together better.” Carol moved into the position of office manager 3 months ago, and since then, has found a lot of stress among the team. “There are a couple of the staff with very strong personalities that just rub against each other.” “They’re good at their individual jobs” but they spend a lot of time “watching what the other people are doing” and whining if someone doesn’t seem to be working as hard as they are. This level of hostility is carried over into their dealings with customers who pick up on the negative attitudes. Carol wants less bickering, more teamwork, and better customer service. Carol says she’s tried everything she can think of and has not had any success.

Interview With Carol and Fran

Both Carol and Fran reiterated the problem about lack of teamwork. “These people have a bad attitude. They don’t want to pitch in. They’re afraid someone else might do less work than them. Any chance they have, they talk about the other people on the team.”

Both Carol and Fran feel that Pam Coleman, the CSA II, is a “weak leader” that lets the problem get out of hand.

On my visit, the office looked messy: The desks were piled with files and papers and the customer service area looked disorganized. In general, the office setting did not inspire confidence or convey a desired business image.

I ’m a little unsure about Carol’s position in all this. Although she accepts the direction of the team-building effort, I’m not sure of her power as a team leader to carry the momentum of this process.

Observations of Team Process

Carol called a special team meeting after the office closed last Wednesday for the purposes of introducing me and commencing the team-building process. It was clear that everyone was a little nervous about what was going on and why I was there. Carol made some opening remarks and then let me talk.

I introduced myself and modeled open, disclosure communications by talking about my fears for this process and about what I hoped to learn. Everyone then introduced themselves. Then, I had them work on a brain-teaser puzzle in which everyone had some information but no one had the complete solution. They had to pool what they knew under certain artificial communication rules in order to find the solution. I watched the interactions.

The process was dominated by Chris Miller. Chris continually tried to control the flow of interaction and assert her interpretations of the information. Fran Washington seemed to delight in arguing with Chris. Pam Coleman tried to participate in the discussion, but her comments were not often heard. Juanita Perez seemed to understand the puzzle as well as anyone but only made one or two comments. Mickey Franklin seemed to be either frightened by or just turned off by the whole spectacle. She remained fairly passive

1 3 4 CHAPTER EIGHT

throughout the entire meeting and did not contribute much. I had asked Carol to take a low profile, which she did. She did not have a very influential impact on the discussion.

The team took longer than the allotted time, and did not get the correct answer to the puzzle. During the debriefing on the puzzle, Chris took a lot of ribbing and some shots about how she acted. Although she tried to act like she had a stiff upper lip, she signifi­ cantly curtailed her energy in the remainder of the meeting.

I asked the team to define the characteristics of an effective team, which they did. I finished by asking them to anonymously complete the team performance assessment survey, which they also did. Results are included.

Note: After the meeting, Carol told me that everyone acted fairly true to form. That is, each person’s actions on the exercise were typical of how they acted on a daily basis with each other in the office.

TABLE 8.1 Team Performance Assessment Survey

% o f Responses

6 Responses (Totals may equal more than 100% from rounding)

Low

1 2 3 4

High

5

1. How well do you understand the goals of the team? 2. How well do you understand the job responsibilities of the team

67% 33%

members? 17% 17% 50% 17% 3. How well does everyone pitch in and contribute to team-work? 17% 33% 33% 17% 4. How well does the team cooperate and work together? 5. What is the motivation level of the team? 6. To what extent does everyone on the team believe in working

17% 33% 17%

33% 50%

17% 33%

hard? 7. How good a job does the team do in customer service? 8. Communication practices:

17% 17% 33%

33% 17%

33% 50%

Adequacy of information 17% 17% 50% 33% Timeliness in delivery

9. How constructively does the team try to solve problems? 17% 17%

50% 50% 33%

33% 17%

ANALYSIS WORKSHEET

IMPROVING PERFORMANCE AND QUALITY OF WORKLIFE 1 35

1. Based on the data provided, what are the problems that this team seems to be experiencing? For the sake of convenience, the problems can be organized into the following categories. Note the evidence in the data that supports your assessment.

Goal confusions or disagreements

Role clarity or conflicts

Working relationship conflicts or inefficiencies

Interpersonal (personality) problems

2. Given this analysis, rank the problems in terms of likely importance to improved team functioning in order. Identify your rationale for this selection.

3. What kinds of team-building interventions are indicated from this analysis?

1 3 6 CHAPTER EIGHT

Survey Feedback

The information collected through this survey will be used to consider changes or im­ provements in this course. Please answer all of the following items. Your responses will not affect your grade for the course.

1. Your instructor will tell you what specific entries to make. Write those entries in the space provided.

2. Evaluate each of the learning activities indicated by your instructor. Each activity will be evaluated three times on three different dimensions: • Amount o f learning: How much you learned about the subject from this activity. • Significance: How significant the learning was for you. • Enjoyment: How much you enjoyed the activity.

Remember that you are evaluating the procedure (e.g., a case discussion) and not the subject matter (such as occupational safety). Regardless of whether or not you liked the subject of safety, for example, what did you think of the case study in terms of how much you learned from it, how important that learning was, and how much you enjoyed the activity?

Use the following rating scale for your answers.

1 = unsatisfactory 2 = acceptable 3 = outstanding

Write the number that represents your evaluation in the spaces provided.

Amount Learned Significance Enjoyment

1 ________ 2 _________

3____________________________ _________________ ___________ _________ 4________________________________________________ ___________ __________ 5________________________________________________ ___________ __________ Which of the three criteria— amount, significance, or enjoyment—is the most important to you? Is there another criteria not listed that is most important? If so, please write it in the space provided.

9 Labor and Employee

Relations

In 1990, approximately 17 million U.S. workers belonged to a labor union. Approximately the same number of Americans belonged to unions in 1953. Even though the numbers are equivalent, the percentage of the unionized nonfarm labor force tells a much different story. 1953 represents the high-water mark of unions in U.S. history when about one in three workers carried a union card; in 1990, only about one in six do (Bureau of the Census, 1961, 1989; Schuler, 1992). By this account, the presence of unions as part of the business landscape is on the decline.

For some, this is a trend in the right direction. For others, it is frightening to consider what could happen if workers did not have access to strong union representation. For some, unions are deadweights on the neck of the organization, driving up costs and driving down productivity. For others, unions are the most effective way to establish some degree of protection against whimsical management practices and secure a justifiable piece of the organizational pie for employees. The ability to look at and possibly work with unions, with their good and bad points, depends in part on your personal attitude about employee labor organizations.

The fact that labor unions trigger intense reaction is nothing new. Attitudes toward unions may be a legacy of the history known about unions, for example. Certainly, management-labor violence figures prominently in accounts of labor relations during the 19th century and into the 20th century (Hofstadter & Wallace, 1970). Likewise, the role of organized labor in post-World War II business, particularly the role associated with decline, has been noted (Tiffany, 1988). Less well-known are the stories of labor-man- agement cooperation (Bureau of Labor Management Relations and Cooperative Programs, 1988; Stuart, 1993) and of how union workplaces can be better than nonunionized ones. Halberstam (1986) tracked the voyage of a unionized worker laid off from Ford in the late 1970s who finally found work—in more squalid conditions and at a third less pay—in a nonunionized shop.

In the Your Orientation to Unionized Employees assessment, your attitude toward unions is tested. A series of statements describing various claims about unions is presented for you to agree or disagree with. Follow the instructions in completing the assessment.

137

1 3 8 CHAPTER NINE

How would you characterize your attitude about unions? What are the sources of that attitude?

Given the decline of unions, why bother studying labor relations? If unions are a withering institution, why spend the time looking at them? There are several answers to this very obvious question. First, unionized employees are still a factor in the workplace and the human resources professional or line manager must be able to deal knowledgeably with that situation, if it exists in his or her company.

Second, it is useful to understand the conditions and reasons that give rise to employee interest in unions to begin with. Three conditions seem necessary in order for unionization to emerge (Brett, 1980; Kochan, Katz, & McKersie, 1986):

1. Workers need to be deeply dissatisfied with their current job and employment conditions.

2. They need to believe that acting collectively will help in improving those conditions. 3. They need to overcome the negative stereotypes of acting as part of or belonging

to a union.

These conditions can crop up at any time, and so, the potential for unionizing is ever present. Furthermore, even if employees are not formally members of a union, employees can still enjoy certain protections if they act collectively (Gould, 1986). The absence of a union does not mean that the human resources manager can be ignorant of labor relations matters.

In Not in My Shop, You Don’t, you are presented with a case in which a group of nonmanagement employees from the personnel department of a large organization have decided that their working conditions are no longer acceptable and that they want to talk (as a group) to their manager, the head of personnel, about how the working conditions can be improved. What guidelines apply in this situation and what would you suggest doing in response? A hint about this case: The employees in the personnel division at Equitable Consumer Services do not deal with unionized employees and are not familiar with the concerted activity protections of the National Labor Relations Act.

A third reason for studying labor relations is to consider the positive potential that unions may offer to an employer. In their compelling attempt to reconstruct the role that unions can play, Bluestone and Bluestone (1992) proposed the formation of a new Enterprise Compact. Under this banner, labor and management trade promises and commitments that serve the interests of both the business and the employee. Under such a compact, management agrees to attend to employee security and welfare concerns, and employees, through their union, agree to share responsibility for the well-being of the organization. Together, management and labor adopt a joint commitment to increase productivity and product quality and to increase the employee’s share of the wealth produced.

The move to include employees through their unions in more of a business-partnership role has been seen recently in the struggles of airlines to control costs and improve revenues. For example, United Airline employees became major owners of the airline in 1994. Other airlines, such as Delta, are looking to trade ownership (through their pilot’s union) for wage concessions. The process of negotiating new labor contracts goes to the very heart of company survival in these settings.

In Statewide Air Tries to Fly, you have the opportunity to participate in a labor-man- agement negotiation concerning productivity, cost, and profitability. Statewide Air faces serious financial strain and wants to work with its unions to find a solution. The unions wish to do the same but without creating unnecessary sacrifices by employees. This drama may be one that is seen increasingly in labor-management deliberations.

One critical aspect of labor-management relations involves the grievance handling process. Once a contract between management and labor is completed, both sides are bound by it. If management acts in ways that employees think are outside the terms of that contract, the employee may file a grievance. In these cases, there may be several steps involved before a final resolution is reached. During this time, union and management are in adversarial positions with all the negative potential that may be created. Often, nonunionized employers follow similar procedures for handling employee complaints about poor treatment.

A relatively recent innovation in this area is called alternative dispute resolution (Lynch & Redfem, 1993) or peer review (Anfuso, 1994; Hughes & Grote, 1993). In this process, a group of employees and managers serve as a jury to listen to the employee complaint and act as a final authority. Such a process is quicker than the traditional grievance procedure methods and produces more satisfactory outcomes (Caras, 1991).

The Here Comes the Judges assignment provides you the opportunity to witness the operation of a peer review/alternative dispute resolution system in practice. In the situation presented, an employee complains about the unfair treatment she received from her boss. The panel listens to the story from the different parties in order to reach a decision about what actions, if any, to take in response to the complaint.

Although labor unions are on the numerical decline in the U.S. economy, they are not gone. Indeed, the conditions that give rise to union activity are constantly present. Man­ agers need to understand their own feelings toward unions and how the union process operates. Given the restructurings of the economy and innovations in the fields of employee relations, the future of unions and of labor relations in general remains in a state of evolution.

LABOR RELATIONS 1 3 9

1 4 0 CHAPTER NINE

Your Orientation to Unionized Employees

Please answer each of the statements by indicating the extent to which you agree with each statement. Use the scale and circle the letter code that best represents your belief about unions and management.

SA = Strongly agree A = Agree NS = Not sure; neither agree nor disagree D = Disagree SD = Strongly disagree

1. Unions make it impossible for management to run a business efficiently.

2. In general, unionized employees are resistant to change and impede change inside their organizations.

3. Unions protect employee rights in the workplace, keeping m anagem ent honest and fair in dealing with its employees.

4. Management should make every effort to keep their employees from being unionized.

5. Unions are too powerful in shaping how an organization runs and operates.

6. Unions can play a very constructive role in the management of a business if management would only try to work with the union rather than ignore or fight it.

7. Unions tend to be corrupt. 8. Unions should have no role in production or marketing

decisions of the firm. 9. Unions may have been needed at one time in this country

but are not needed now. 10. A union provides valuable services to their members that

justifies the fees paid by the worker. 11. The thing that unionized workers care about most is

higher wages and more expensive benefits. 12. Employers have too much power and ability to prevent

employees from starting a union. 13. When employees unionize, employees become more con­

cerned with keeping their jobs than serving customers. 14. Unions are necessary to offset the unilateral power that

management has.

SA A NS D SD

SA A NS D SD

SD D NS A SA

SA A NS D SD

SA A NS D SD

SD D NS A SA SA A NS D SD

SA A NS D SD

SA A NS D SD

SD D NS A SA

SD A NS A SD

SD D NS A SA

SA A NS D SD

SD D NS A SA

LABOR RELATIONS 141

1. Total responses

2. Point values x

+ + + + 3. Summary ^

4. Total score ____________

To Score Your Answers

1. Count the number of responses in each column and enter the numbers in Row 1. For example, if you circled six NS’s in the middle column, you would enter “6” in the middle block on Row 1. The sum of all entries on Row 1 should equal 14.

2. Multiply the number of responses for each column times the point values shown in Row 2. Enter the products in Row 3.

3. Add the five products in Row 3 together to create a total score. Enter the total score in Row 4 and consult the following scoring chart.

Scoring Chart

If Your Score Was Between: Your Attitude About Employee Labor Unions Will Likely Be:

14 to 24 Strongly antiunion 25 to 36 Moderately antiunion 37 to 47 Uncertain; neither for nor against unions 48 to 59 Moderately prounion 60 to 70 Strongly prounion

1 2 3 4 5

Not in My Shop, You Don’t

1 4 2 CHAPTER NINE

The Equitable Consumer Services Company began over 70 years ago. Since then, Equi­ table’s growth has kept pace with the expansion of the metropolitan area it serves, helping it grow into the major regional business it is today. Equitable now has more than 150 branch offices and 3,000 nonunionized employees scattered over the state.

In spite of its size, though, Equitable’s financial performance was lackluster. As a result, it was purchased by a new group of investors who brought in a new management team to turn things around. The new executive team quickly went about its work and, in the process, turned Equitable’s traditional culture on its head through frequent restruc­ turings, terminations of long-term personnel replaced by new personnel from other com­ panies, and crash sales and productivity improvement programs.

The personnel division, headed by Harry Bowman, was often at the center of these changes. Harry started his career in personnel at Equitable about 25 years ago. Harry’s division of about 45 employees served the entire Equitable system. The organizational structure of the division is shown here.

Harry Bowman Director of Personnel

Compensation Benefits Recruitment Training Employee | Relations

Payroll

Each of the departments, including payroll, was headed by a separate manager. Most of the staff in each department included people in technical and professional capacities with only a small clerical staff supporting the entire division.

Harry expected his managers to supervise their respective functions closely, and he held each manager accountable for the performance of his or her unit. This emphasis prompted each manager to treat each employee as a specialist in his or her area of responsibility. Because Harry’s personnel career had been exclusively in compensation, he never gave much thought to career development or cross-training of his staff. In spite of the functional specialization, Harry also made sure that all employees in the division knew of and followed certain common rules and principles in providing services to the rest of Equitable’s employees. This insistence on uniform application of rules to all employees gave personnel something of a bureaucratic image in the organization.

Most of the professional and technical staff were younger men and women with college degrees, who ranged in age from late 20s to mid-30s. For many, this was their first real job in the professional field of their choice. The entire personnel division occupied one floor in the company’s headquarters office building. Because this group worked in the same office area and often had to consult with each other on various personnel projects, and given their similar personal circumstances, it was natural for these individuals to form friendships and close working relationships.

A normal aspect of the work of the division involved privileged exposure to the inner workings of the new management group. Due to the fact that the personnel staff was expected to handle these matters confidentially, they could only talk about these matters with each other. Soon, the “people management” goals and practices of the new executive group became all too obvious to the professional and technical staff of the personnel division. Based on what they saw, many on the staff became indignant, resentful, and bitter at what the new executive regime was doing.

There were two things about the practices of the new executive group that quickly stood out. First, long-time Equitable employees were assumed to be incompetent and treated badly. Second, if an employee—either new or long-term—could get on an execu­ tive’s good side, that employee would be given special and preferential treatment. Steady, quiet job performance became less important, and political skills in cultivating the favor of the new senior management team became more important. As a result, consistent application of personnel rules and professional practices were essentially thrown out the window, replaced by the personal discretion of any senior executive. The message from the senior executive group was clear to personnel: “Do what I say without question or you’ll be gone, too.”

To the employees in the personnel division who had to execute these decisions, this new approach violated all their professional training about treating all employees fairly and outraged their moral sense of decency. Obviously, they could see, the managers of the personnel division (i.e., Harry and his management group) had no power and were being pressured to go along with this new employee relations regime. The professional and technical employees in the division would frequently bring their consternation over decisions to the attention of their unit managers, only to be told, often in these words, just to keep their heads down, do what they were told, and not ask questions.

Over the course of the next year, this entire situation became the topic for discussions and “bitch” sessions at lunches, breaks, meetings, and any other employee gatherings. Because the snowballing number of complaints produced no effective response from Harry and his managers, the common opinion developing among the professional and technical troops in personnel was that they had better look out for themselves because no one else in the company would. Sickened by the unprofessional nature of how em­ ployees were being treated and frustrated by a management that seemed indifferent to their needs, a collection of professional and technical staff began to think as a group.

By the end of the year, their complaints formed around two themes:

1. They were stuck in dead-ended specialist jobs with no apparent future and for which they were not being given any opportunities for learning and development outside their speciality.

2. The grossly unfair and preferential treatment of Equitable employees should stop and that there should be a more consistent and uniform application of company human resources policies and programs to all employees.

Although Harry was aware that there seemed to be a high level of stress among his employees, he did not really attribute much to the subtle yet pervasive way his employees stopped communicating with him and his managers. He had no idea that his employees

LABOR RELATIONS 1 4 3

1 4 4 CHAPTER NINE

were living in two worlds, as it were: the businesslike face they wore when dealing with him or their managers, and the animated, angry face they wore with each other.

It was around this time that a number of employees were having one of their regular after-work meetings at a local tavern. As usual, the topic was how bad things were and how something needed to be done. One of the more articulate, thoughtful voices in the group was Jan Johnson (a benefits specialist). Jan suggested that they should take action and present their concerns to Harry. Jan was concerned that Harry might not be aware of the depth of their discontent and that he should be given an opportunity to respond. Jan and two others volunteered to draft a memo on this matter for delivery to Harry, which they did the next day. The memo read:

W e, the undersigned, request the opportunity to talk with you about our futures in this division and about the practices being used throughout the rest o f the organization in managing the company’s personnel. Although we are loyal Equitable professionals, w e are very con­ cerned about these issues and would like to discuss with you som e alternatives for resolving these matters. As you may recall, as individuals and with others, we have raised these concerns previously, but without satisfaction. W e believe that there must be som e changes and would like to be involved in considering and deciding on what those changes should be. W e will be present in Training Room 2 tomorrow at 1:00 p.m. to discuss these matters with you. W e look forward to the opportunity to jointly resolve our concerns and make Equitable a better place to work for everyone.

The memo was quietly circulated that day among all the nonmanagement employees in the division. Each person in agreement signed their name at the bottom of the memo; a strong majority agreed that they should go forward.

Near the close of business that day, a group of employees drawn from the various departments asked to speak with Harry. Although Harry was on the way out the door, he agreed to meet with them briefly nonetheless. Speaking for the group, Jan described the history of what happened and gave him a copy of the memo. He read the memo without comment and then told them he had to leave. He said he wanted to reread the memo more closely before he responded. They all left.

Assignment

1. What legal issues are involved here, especially in terms of union and labor relations? 2. How should Harry respond to this memo? 3. What other actions, if any, should Harry take?

LABOR RELATIONS 1 45

Statewide Air Tries to Fly1

Statewide Air, Inc. began as a small “puddle jumper” airline serving the small towns of an upstate region. With airline deregulation in the late 1970s, Statewide embarked on an aggressive plan for growth, becoming the sixth largest carrier in the nation by the late 1980s.

In part, Statewide’s growth in the early 1980s came from acquisitions of other regional airlines. In the process, Statewide took on a heavy load of debt. Statewide extended its more generous wages, benefits, and work rules packages to its newly adopted employees, locking in higher fixed labor expenses. However, Statewide’s growth resulted in a lucrative network of routes in the major markets, allowing it to command full premium prices by catering to the business traveler. This revenue easily paid for Statewide’s relatively higher priced labor and debt servicing costs, and allowed Statewide to post handsome profits during these years.

By the late 1980s, though, several developments began to threaten the Statewide empire. First, the recession of the late 1980s curtailed air travel (especially among business travelers), leading to reduced income. Second, price wars with other national carriers and smaller, discount carriers cut deeply into profitability. Third, less revenue increased the burden of servicing the debt, draining off more and more of the dwindling cash flow. Beginning in 1989, Statewide began losing money and was publicly discussing bankruptcy options. By 1993, Statewide lost more than $2 billion dollars. During this same period, the airline industry as a whole lost $13 billion. In this period, Statewide delayed the purchase of a fleet of more fuel-efficient planes and quickly laid off 5% of its total of 45,000 employees.

Statewide is now under pressure from its creditors to cut labor expenses and improve productivity. Statewide has requested renegotiation of its labor contracts with its various unions. The unions have agreed to bargain as an alliance with Statewide and the nego­ tiations have been underway for some time.

Without a new contract, Statewide has indicated that it will be forced to use more subcontractors, replace full-time with part-time employees, and downsize even further. The unions believe that productivity improvements and changes in management practices can make up any differences; they have threatened to strike if Statewide moves forward on these noncontractual fronts.

Introduction

'This exercise is modeled on similar exercises found in Kelly and Whatley (1987).

Selected Financial Statement for Statewide Air, Inc.

Selected financial results for the years ending 1993, 1992, and 1991. Assume it is the first quarter of 1994.

1 4 6 CHAPTER NINE

1993 1992 1991

Net sales $6.4 $6.1 $6.0 Labor expenses 2.6 2.4 2.2 Net income (Loss) (.420) (1.2) (.290) Working capital .25 .10 4.23 Average monthly revenue from ticket sales .24 .19 .21

Note. Numbers are in billions or fractions thereof.

Assignment

You enter into the final phase of the negotiations in hopes of settling on a new union contract. You have approximately 25 minutes to complete your negotiations. If a new contract agreement is not reached, Statewide will proceed with its plans for layoffs and outsourcing, and the unions will issue the call for a strike.

Rules for Negotiation

1. Your negotiating team will have 15 minutes to prepare for your position and plan for the negotiations.

2. You can use any tactic or method as part of the negotiation process. Feel free to recommend positions between the extreme positions indicated. Interpolate and es­ timate savings as necessary.

3. As you proceed through the negotiations, note the points you agree on in the spaces provided. Once an agreement is reached, it cannot be renegotiated for the purposes of this exercise.

Contract Agreement

1. Wage givebacks________________________________________________________

2. Staffing_______________________________________________________________

3. Work rule changes_____________________________________________________

4. Union involvement_____________________________________________________

LABOR RELATIONS 1 47

Bargaining Issues: Summary

Bargaining Issue 1: Wage Givebacks

• Existing contract: One year ago, management and labor agreed to a wage freeze. This amounted to savings of 5% of projected wage increases for 1993. The freeze expires at the end of the first quarter, 1994, at which time a 5% increase would be given to all employees.

• Union position: Honor agreement and provide 5% increase. • Management position: Extend freeze for another year. • Trade-offs:

Wage Adjustments

0% 1% 2% 3% 4% 5% Statewide Air ------------------------------------------------------------------ Union Alliance

$250 $200 $150 $100 $50 $0

Annual Savings for Airline (millions of dollars)

Bargaining Issue 2: Staffing (Outsourcing and Part-Timers)

• Existing contract: Management must receive union approval prior to eliminating positions and replacing them with outsourced or part-time positions.

• Union position: No change in full-time staffing practices. • Management position: Replace 10% of current ground service personnel with

part-time and outsourced services. • Trade-offs:

Percentage o f Current Labor Force Replaced by Part-time Personnel and Outsources

10% 8% 6% 4% 2% 0% Statewide Air ------------------------------------------------------------------- Union Alliance

$90 $70 $50 $30 $10 $0

Annual Savings for Airline (millions of dollars)

Bargaining Issue 3: Changes in Work Rules

• Existing contract: The existing contract contains specific provisions for the following work rules: 1. Pilots and attendants may not help in cleaning up the cabin and other tasks asso­

ciated with preparing the plane for departure. 2. There is a required 1 -hour break for airline crew members for each 8-hour shift worked. 3. All terminations for poor performance must be submitted to arbitration before com­

pleted. 4. All nonexempt personnel must be entitled to 10 hours overtime before other

personnel not already working on the shift may be brought in.

1 4 8 CHAPTER NINE

Union position: The union will agree to some changes in these work rules: pilots and attendants help with the cleaning on an as-needed basis; switch to 30-minute breaks; keep arbitration but make it optional, rather than mandatory; and reduce overtime entitlement to 5 hours. Management position: Management wants to require pilots and attendants to help clean up and thereby cut one person from ground crew complement, eliminate required break, eliminate arbitration option for terminations, and eliminate overtime option and allow staffing with new personnel. Trade-offs (Airline savings in millions o f dollars): For each work rule, the estimated savings to the airline for State wide’s position and the union alliance’s position are shown in the following. Intermediate positions on each rule may be developed, with cost savings estimated between the two positions.

Statewide Air $75_

Statewide Air $50_

Statewide Air $40_

Statewide Air $85_

Rule 1. Pilot!attendants help

Rule 2. Shift Breaks

Rule 3. Arbitration

Rule 4. Overtime

_$45 Union Alliance

_$30 Union Alliance

_$30 Union Alliance

_$45 Union Alliance

Bargaining Issue 4: Union (Employee) Involvement in Business Planning and Decision Making

• Existing contract: Under the existing contract, management reserves all rights to make business decisions without consulting with the unions, and there is no program for encouraging employee ownership, nor are employees represented on the board of directors.

• Union position: The unions should be included in business planning and decision making by allowing for at least three union representatives on the 15-person board of directors. There should be a plan (be it stock purchase, ESOP, and/or profit-sharing) to promote employee ownership. Employees should be eligible to participate in the plan after passing the 3-month probation period. Employees should be allowed to purchase stock at the same option price granted to executives. These actions will lead to better planned and executed decisions, greater productivity, and more savings.

• Management position: No change in the existing contract. • Trade-offs (Savings in millions o f dollars):

The estimated savings to the airlines for each proposed change are shown in the following. However, the savings occur as projected gains in productivity and performance, not as cuts in expenses. For example, the union alliance estimates that there will be a productivity performance improvement of $95 million by having three union representatives join the board and participate in business planning decisions. Management does not want to add

union representatives; under this position, there is no estimated gain in productivity or performance. Intermediate positions would have corresponding values.

Option 1. Union Input in Business Planning Through Membership on and Participation in the Board o f Directors

Statewide Air $0_____________________________________ $95 Union Alliance Annual Gain for Airline

Option 2. Employee Ownership Statewide Air $0_____________________________________ $125 Union Alliance

Annual Gain for Airline

Competitor Analysis of Bargaining Issues

Analysis of where Statewide Air stands in relation to its main competitors on each of the four bargaining issues is shown in the following:

LABOR RELATIONS 1 4 9

Competitor Airlines

1 2 3 4

Wage Rates: 98% 95% 89% 80% Average rate (expressed as percentage of Statewide’s average)

Staffing: 3% 4% 12% 24% Percentage of part-timers in (Statewide now has less than 1 % of its labor force in their labor force part-time jobs.)

Work Rules: 1. Pilots/attendants help No If needed Often Yes 2. Shift Breaks 30 mins 10 mins 15 mins none 3. Arbitration Required Yes Yes Under certain

conditions No

4. Overtime Option Yes, Yes, Varies by No 5 hours 10 hours airport

Union Involvement: 1. Union Input No No No No 2. Ownership and Board Representation Yes Yes No No

1 5 0 CHAPTER NINE

Observer Worksheet

1. How did the parties prepare for the negotiations? What issues were important? How did they plan for the negotiations? What image did the parties create of their op­ position to the plan?

2. What is the nature of the negotiation taking place? That is, to what extent is it adversarial or cooperative?

3. What tactics were demonstrated by either party that seemed to contribute to the:

a. success of the negotiation

b. failure of the negotiation

4. How did the parties try to resolve differences in the positions and points of view?

LABOR RELATIONS 151

One innovation in handling employee grievances is the use of employee peer review. Begun in the mid-1970s (Anfuso, 1994), peer review has emerged as an attractive alter­ native to the more traditional grievance-handling methods of manager review, mediation, and/or arbitration. As such, peer review is also called alternative dispute resolution.

A typical peer review program will be set up with the following characteristics:

1. A definition of the kinds of grievances this system will and will not handle. Com­ plaints about company policies on pay, benefits, work rules, or violations of law are usually excluded from consideration. However, virtually any kind of personnel action in which the employee believes that he or she has been treated unfairly would be covered. Examples include questions of promotion or demotion, job assignment, pay actions (e.g., denying overtime), discipline, and discharge.

2. A requirement that the employee first try to resolve the problem directly by going to his or her supervisor or to upper management.

3. If that step is not satisfactory, the employee can ask for a peer review of the complaint. The employee picks a panel of, for example, five personnel, two managers and three employees. These personnel, who may already be trained in various aspects of conducting a hearing, are randomly chosen to participate. They are sworn to confidentiality about the case. The employee specifies what remedy he or she seeks, and all parties sign an agreement that the results of the hearing will be considered final and binding.

4. In the hearing, both the employee and the supervisor present their sides of the case consecutively. Finally, the panel may call other witnesses. Attorneys cannot be present. Panelists may ask questions throughout the proceedings.

5. After hearing all the evidence, the panelists discuss the case, then vote by secret ballot. Each panel member has one vote, and a simple majority vote prevails. The panel may make any decision deemed appropriate including: denial of the grievance (thereby affirming the action taken), granting of action asked by the employee, or modifying the action by restitution, reinstatement, back wages, and so forth.

Here Come the Judges2

2The author wishes to thank Harvey Caras of Caras and Associates for assistance in preparing this case. Mr. Caras is credited with developing the peer review innovation while at the General Electric Plant in Columbia, Maryland.

1 5 2 CHAPTER NINE

Peer Review Complaint Intake Form

Employee Judy Williams

Supervisor Pat Robbins

Department Customer Service

Witness Nancy Jacobs

Employee complaint My supervisor is giving all the good customer site visits to Nancy Jacobs. She gets better experience and is clearly the supervisor’s “pet” and is being groomed as the supervisor’s replacement. She also gets a lot more overtime. I ’m not being given an equal chance for advancing my career or for earning overtime. Requested remedy I want to be given on-site customer service calls, to be trained in what I need to make those calls, and I want back pay for the overtime I could have earned if I ’d been treated fairly in the past 6 months.

Completed by Human Resources: Background

The customer support unit helps solve problems with customer accounts. Although more routine and simple problems can often be solved over the phone, the more difficult problems may require a service representative to make on-site visits to inspect, diagnose, install, and maintain the customer’s service. These calls require a higher level of expe­ rience, training, and specialization. On-site visits are career development opportunities, diversions from office work, and often lead to overtime.

Pat Robbins supervises the five service representatives in the customer support unit. All service reps are in the same job grade and pay range, although they do specialize in different aspects of account servicing. Judy Williams (the grievant) has been in the unit for about 1 year. She works on the more routine problems that can be handled over the phone. She does not have a technical degree. Nancy Jacobs has been there for 3 years and has a technical degree. She has specialized in the more difficult aspects of account servicing and must frequently make on-site visits. All employees are White. The other three service reps also make some on-site visits, although not quite as much as Nancy. Judy has reviewed this problem with Pat, and he turned down her request.

Relevant Policy, Procedure, or Practice

The applicable policy is to provide our customers the best service possible. This implies using the best qualified individual to service the account. We have no special policy about job assignments for development or overtime purposes that apply here.

Decision

[ ] Grant employee’s remedy. [ ] Deny employee’s request and affirm action taken. [ ] Modify remedy:____________________________

LABOR RELATIONS 1 5 3

Case Analysis Worksheet

The following worksheet can help in taking notes and recording details through the peer review hearing. Fill in Question 1 during the course of testimony by the parties. Questions 2 and 3 can be completed during the course of panel deliberations.

1. What are the facts and opinions of the parties?

a. Employee:_________________________________________________________

b. Supervisor:

c. Witness:

2. What existing policy, procedure, or practice applies in this case? How does this situation compare to the policy issues?

3. What is the proper judgment on this case? What actions, if any, should be taken?

1 5 4 CHAPTER NINE

The Supervisor’s Story

This is a summary of Pat Robbins’ point of view on this matter. You can ad lib as necessary as long as you stay within the facts of the case as presented. Specifically, there is no implication of any sexual harassment as a motive for using Nancy in on-site visits.

Judy W illiams joined us about a year ago. Although I normally hire people with a little more technical background and training, I took a chance hiring Judy because I thought she had other good qualities. In general, she has learned to do the basic service rep job effectively.

Nonetheless, I mentioned in passing to her during her 90-day new em ployee review that she needed to obtain more technical training in order to m ove into more responsible assign­ ments. I pointed out to her about the company’s tuition assistance program and some o f the internal training opportunities that are available. To my knowledge, she has not follow ed up on my suggestion. She does not need my approval for tuition assistance, and there are no limits on what kind o f training she can ask for. She just needs to request the training through me, and if there is time and money, I will send her. She hasn’t asked. I believe it is up to her to take responsibility for her training and development.

Judy is very ambitious and wants to get more involved in customer site visits. She thinks the experience is valuable for future career growth, which it is. She also wants to earn more money, like we all do.

This specific grievance was triggered by a situation with the W ilson Enterprises account that happened a few weeks ago. W ilson’s is one o f our better accounts. Judy was working through a problem with them on the phone, when she found out that on-site support was needed. After hearing her explanation, I agreed but I knew it was going to be more involved than what she thought. My job is to provide our customers with the best service possible, and I knew Nancy Jacobs was both available and more qualified to handle this specialized problem. So I sent Nancy, and sure enough, the problem was complicated and required Nancy to work until about nine that night. Judy heard about N ancy’s overtime and went ballistic.

Judy thinks I don’t like her and that I ’m favoring Nancy. That’s not true. Nancy is not the most senior person in the department, although she does have the most technical training. She specializes in a particularly tricky service component. I arrange site assignments to make sure the best person for the job goes on the calls, and that frequently turns out to be Nancy, although I do send other service reps when appropriate. When Judy gets more technical training, I ’ll start considering her for site visits.

LABOR RELATIONS 1 5 5

The Employee’s Story

This is a summary of Judy Williams’ point of view on this matter. You can ad lib as necessary as long as you stay within the facts of the case as presented. Do not suggest sexual harassment in relation to Nancy’s on-site visits.

I’ve been working here for over a year now, and I asked for more challenging work assign­ ments at least 6 months ago. I’ve learned how to deal with the simple problems that can be answered over the phone. I’ve told my boss Pat Robbins several times that I want to do more.

I started working in this field 3 years ago after graduating with a nontechnical degree; still, I’ve learned quite a bit. When Pat interviewed me for the job, he pointed out the technical qualifications requirement for the job, but felt I had sufficient background to start.

What really upset me was what happened a few weeks ago. We got a call from Wilson Enterprises, one of our better customers. I was talking with our contact there over the phone for about half an hour, discussing the problem they were facing. I had just about solved it when there was one little glitch that I knew required one of us to be there. It was late in the afternoon, and I went to Pat. I explained the situation and said I wanted to go. Naturally, he told me to go back to my work and that he was going to send Nancy. Pat gave some kind of excuse about this being a problem in Nancy’s speciality for which she was better trained.

It turned out that the problem took some amount of time, and I know from what Nancy said the next day that she got at least 5 hours of overtime. I got no overtime at all that week.

This is just typical of how Pat treats me. Pat obviously likes Nancy more than me and gives her all the opportunities to earn overtime. Pat even told me that I need more education and training. I know the company values direct on-site customer service experience when it comes to promotions and pay raises, and I’m not getting it. Pat’s just not being fair to me.

Sure, Nancy has a little more training and experience than I do, but I can do these customer site visits, too.

I figure that in the last 6 months, I could have been given at least 10 assignments which I figure would have meant about 30 hours of overtime. At my salary, that would amount to about $600. I want to be paid for the overtime I should have received. I want Pat to give me an equal number of assignments and to train me in whatever I need to help me make those on-site calls.

1 5 6 CHAPTER NINE

The Witness’ Account

This is a summary of Nancy Jacobs’ point of view on this matter. You can ad lib as necessary as long as you stay within the facts of the case as presented. Specifically, there is no implication of any sexual harassment as a motive for Pat picking you for on-site visits.

I’ve been in the unit for 3 years and was hired after finishing my technical degree. Since then, I’ve continued my education by taking other college courses and some internal training programs. The service work we do is very involved and complicated, and you just have to keep training to stay on top of the field.

I think my boss Pat Robbins appreciates my background because he sends me a lot on customer site visits. These tend to be the more complicated and tricky problems that we can’t solve over the phone. Frankly, although I don’t mind going every once and awhile, I am getting tired of being sent on so many calls. The other three reps go out sometimes and they have a pretty technical background. I mean, why can’t Pat get these reps more trained?

Sure, I like the overtime, but it is increasingly more difficult to find time for my personal life.

I guess you want to talk to me about the Wilson Enterprises incident that happened a few weeks ago between Pat and Judy Williams. This situation just proves my point.

Judy is good with the basics, but needs to get better in the technical intricacies of our field. She was working on the phone with one of our more important customers—Wilson Enterprises—when she felt that an on-site visit was needed. She talked with Pat, who agreed. Rather than sending her, Pat made me go. I had to cancel some plans for the evening and was complaining about having to work so late when I got back to work the next day.

Now the problem was tricky, but one that Judy probably could have handled. It might have taken her a bit longer and she might have needed some assistance but the problem was not with a critical system. This could have been a good learning opportunity for her.

I think she and Pat had a blow-up over this incident. I’m pretty sure that Judy thinks that Pat treats me as a “teacher’s pet.” It’s not that at all. I just wish Pat would get some people trained to cover me as a back-up.

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Author Index

A Bunning, R. L., 31

Adler, P., 21 Albrecht, K., 124 r * Algera, J. A., 30 U

Anfuso, D., 139 Ashford, S. J., 61 Cammann, C., 105 Asquith, N., 30, 41 Campbell, D. J., 61 Avery, F. E., 80 Campbell, J. P., 41

Campbell, R. J., 41 Caras, H. S., 139

B Cardy, R. L., 58 Carson, K. P., 58

Bailyn, L., 2 Chems, A. B., 123 Baird, L. S., 58 Clardy, A. B., 103 Balkin, D. B., 79 Cleveland, J. N., 59, 60, 61 Banks, C., 58 Coates, J. F., 123 Barrett, G. V., 60 Cooper, H. S. F., Jr., 102 Bassett, G. A., 61 Crosby, P. B., 103 Beatty, J. R., 29 Cushman, D. P., 123 Beatty, R. W., 29, 58 Beer, M., 1, 58 Bell, C. H., Jr., 124

DBell, D., 1 Bensimon, H. F., 123 Blinder, A. S., 83 Davis, L. E., 123 Bluestone, B., 138 Deckard, N. S., 21 Bluestone, I., 138 Deming, W. E., 123 Borman, W., 41, 59 Desatnick, R. L., 124 Bowen, D. E., 1 Dipboye, R. L., 30, 41, 43 Brennan, E. J., 58 Dobbins, G. H., 58 Brett, J. M., 138 Douglas, J. A,, 30, 41 Bretz, Jr., R. D., 58 Dunnette, M. D., 80 Bridges, W., 123 Dyer, W. G., 124

1 6 4 AUTHOR INDEX

E

Edwards, R., 2 Eichinger, R. W., 105

F

Fagin, A. I., 3 Feld, D. E., 30, 41 Flynn, W. J., 3 Foster, R. N., 21 French, W. L., 124

G

Gael, S., 29 Goldstein, I. L., 102 Gomez-Mejia, L. R., 79 Gould, W., IV, 138 Green, B. F., Jr., 50 Gretuer, M. A. M., 30 Grote, R. C., 139

H

Halberstam, D., 123, 137 Hallman, C. V., 81 Harbour, J. L., 31 Harman, W., 123 Heneman, R., 59, 60, 80, 81 Herr, B. M., 61 Hoffman, W. H., 21 Hofstadter, R., 137 Hormann, J., 123 Hughes, P. A., 139 Hunter, R. P., 124 Huret, J., 60 Huselid, M. A., 4

i

Imai, M., 123

J

Jackson, S. E., 20 Jarratt, J., 123

Jones, D. T., 123 Jones, S. D., 80

K

Kanter, R. M., 21, 123 Katz, H. C., 137 Kazanas, H. C., 30, 102, 104 Keman, M. C., 60 King, P., 124 Kirkpatrick, D., 105 Kochan, T. A., 137 Kozlowski, J. G., 81 Kozminski, A. K., 123 Krefting, L., 81 Krzystofiak, F., 81

L

Lake, D., 105, 123 Landau, K., 29 Latham, G., 58 Lawler, E. E., HI, 30, 79, 105 Lawrence, P. R., 1 Lee, G , 61 Lele, M. M., 124 Lerner, M., 80 Lessey, K. W., 21 Levitt, B., 103 Lister, B. J., 29 Lockhart, M. G , 52 Lombardo, M. M., 105 Lynch, E. P., 139

M

Maguire, E., 61 Mahaffie, J. B., 123 March, J. G , 103 Margulies, N., 123 Marsick, V. J., 103 Massarik, F., 123 McCormick, E. J., 29 McGregor, E. B., Jr., 1 McKersie, R. B., 137 Mercier, A., 29 Meyer, C., 123 Meyer, H. H., 61 Milkovich, G. T., 58, 81

AUTHOR INDEX 1 65

Mills, D. Q., 1 Mirvis, P. H., 105 Morf, M., 58 Morton, M. S. S., 123 Murphy, K. R., 58, 59, 60, 61

N

Nadler, L., 30, 105 Newman, J., 81 Nkomo, S. M., 22

o

Odiorne, G. S., 21 Olesky, W., 81 Opsahl, R. L., 80

P

Pearce, J. L., 59, 61 Pearlman, K., 31 Peters, T. J., 104 Phalen, C. C., 80 Phillips, J. J., 105 Porter, L. W., 59, 61 Pritchard, R. D., 80

Q

Quinn, J. B., 123 Quirk, J. H., 124

R

Read, W., 58 Redfern, C. E., 139 Rich, J. R., 80 Rohmert, W., 29 Roos, D., 123 Rosenbloom, J. S., 81 Roth, P. G., 80 Roth, P. L., 80 Roth well, W. J., 30, 102, 104 Rumeld, M. D., 3 Russ, C. F., Jr., 22 Rynes, S. L., 80

s Schlesinger, L. A., 2 Schmitt, N., 41 Schneider, B., 1 Schneier, C. E., 58 Schuler, R. S., 20, 22, 29, 137 Seashore, S. E., 105 Senge, P., 103 Sheth, J. N., 124 Sibson, R. E., 20 Smith, D. E., 60 Soloman, J., 124 Spec tor, B., 1 Stohl, C , 103 Stomich, P., 81 Stuart, P., 137 Sullivan, J. F., 80

T

Tannenbaum, R., 123 Teryak, C. J., 29 Thornburg, L., 124 Thorndike, E. L., 59 Tiffany, P. A., 137

u Ulrich, D., 105, 123

W

Walker, J. W., 21 Wallace, M., 137 Walton, R. E., 1 Wanous, J., 43 Watkins, K. E., 103 Watson, M. D., 80 Weller, P. C., 2 Wexley, K., 58 Wigdor, A. K., 41 Womack, J. P., 123 Woods, M. P., 3 Wyatt, L. L., 21

Z

Zuboff, S., 21

Subject Index

A

Affirmative action planning, 43, 52, 57 availability analysis, 54 utilization analysis, 53-54

Airline industry, 138 Alternative dispute resolution, 139, 151 Automobile industry, 123

B

Benefits, 79, 81, 96-99 plan design, 82, 95-101

c

Career development systems, 31, 105, 121-122 Career ladders or paths, 105, 121 Career management, 105 Change and organizational performance, 123 Compensable factors, 34-37 Compensation, 79

administration, 39 goals, 79 and labor market rates, 80 policy or philosophy, 85-87 planning, 81, 92

Comparable worth, 30 Concerted protected activity, see Unions Contingent workforce, 42

D

Deskilling jobs, 21 Disabilities, legal implications, 116 Discipline practices, 115-117 Discrimination in employment, 3, 10, 12-13, 16 Downsizing, 22, 25, 28

E

Employee assistance programs, 104, 115-119, 128

Employee leasing, 42 Employee opinion surveys, 4, 124, 134, 136 Employee rights in the workplace, 3 Employment at will, 2-3 Enterprise Compact, 138 Ethics, see Human resources planning Exit interviews, 19

F

Frimmelting, 60, 65

G

Grievance handling, 139

166

SUBJECT INDEX 1 6 7

H

Health-care industry, 25-28 Hiring qualifications, see Selection Human resources management, 1, 127

goals for, 1 policies and programs, 1, 5, 27, 127 procedures, 11-12, 151-152 roles and functions, 3-4, 18 value orientations, 2

Human resources planning, 20, 22 and environmental scanning, 20 ethical issues, 81, 90-91 labor supply and demand forecasts, 21 and organizational structure, 21, 23

Incentives, 60, 66-69, 129 Independent contractors, 42, 44 Internal Revenue Service, 42, 44

J

Job analysis, 29, 32-33 and performance appraisals, 60

Job descriptions, 29, 32-33 Job evaluation, 29, 34—38

point-factor system, 30 Job posting, 122 Job sharing, 42

L

Labor unions, see Unions Learning curve, 104, 113 Learning organization, 103

M

Management and supervisory training, 109-112, 115-119, 124, 127

Manpower planning, see Human resources planning

Merit increases, 80-81 just noticeable differences in increase

amounts, 81, 88-89

o

Orientation, 102 memorable messages as part of, 103

Outsourced labor, 42 Overlearning, 113

P

Pay for knowledge, 31 Pay for performance, 80 Peer review, see Alternative dispute resolution Performance appraisals, 58, 63-64, 80

conflicts between supervisory and self-appraisals, 61

goals and purposes, 60 measures and performance, 60 personal traits and ratings, 59, 65 problems with appraisals, 58-60, 63 rating scales, 59, 65, 73 self-appraisal, 61-62, 74-78 validity and reliability, 58, 61 vignettes, 61, 70-72

Performance management, 58, 129 Performance measurement, 59-60, 109

R

Rater training, 59-60 Realistic job previews, 43 Recruitment, 41-42

s Safety, 124, 129 Salary surveys, 80, 83-84 Selection practices and procedures, 41, 43, 55

adverse impact, 52 design of selection systems, 30, 43, 50 hiring qualifications, 30, 41, 50 interviewing techniques, 43, 46 selection techniques, 43

Self-directed learning, 103, 106 Sexual harassment, 3, 7-9 Staffing, 27, 41

planned separations (layoffs, early retirement, reductions in force), 25

and reorganization, 21 Succession planning, 105, 120-122

1 6 8 SUBJECT INDEX

Survey feedback, 125, 136

T

Team building, 115, 122-125 Termination procedures, 119 Training, 102

evaluation, 104, 136 needs assessment, 30, 104, 109-112

focus groups and needs assessment, 112 problems with inadequate training, 103 program planning and design, 30, 103-104,

115 task analysis, 30 transfer of training, 104

Turnover, 19, 41, 53, 121

u Unions, 137-139

attitudes about, 137 bargaining issues, 146-149

concerted protected activity, 138, 142-144 contract negotiation, case, 145-149 membership, 137 organizing drive, 142-144 reasons for joining, 138

v

Violence, 124, 126-128, 137

w

Wage and salary administration, see Compensation

Workflow analysis, 30