Week 5 - Assignment: Analyze a Case Study on Supervising Employees and Week 8 - Assignment: Create a Brochure on Organizational Planning

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Home >Business & Finance homework help >Management homework help >Week 5 - Assignment: Analyze a Case Study on Supervising Employees and Week 8 - Assignment: Create a Brochure on Organizational Planning

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Public and nonprofit organizations are confronting a variety of eco-nomic, technological, legal, and cultural changes with which they must cope effectively if they are to remain viable. The key to viability is well-trained and fl exible employees. To be responsive to the constantly changing environment, agencies must integrate their human resources management (HRM) needs with their long-term strategic plans. The four chapters in this part explain how society and workplaces have changed and the strategic human resources management (SHRM) implications of these changes for organizations.

Chapter 1 discusses some of the differences between public sec- tor agencies and nonprofi t organizations. It reviews some of the exter- nal factors that affect the internal operations of an organization, such as changes in economic conditions and the fiscal uncertainty that such changes can bring to an agency, and the social and cultural changes affecting the demographic composition of the workforce. Most organizations today have a more diverse group of employees than ever before, bringing different experiences and new expectations into the orga- nization. The legal environment must always be monitored for change. Equal employment opportunity, labor relations, and compensation and benefi ts are all regulated by law.

PART ONE

HUMAN RESOURCES MANAGEMENT IN CONTEXT

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Pynes, J. E. (2013). Human resources management for public and nonprofit organizations : A strategic approach. ProQuest Ebook Central <a onclick=window.open('http://ebookcentral.proquest.com','_blank') href='http://ebookcentral.proquest.com' target='_blank' style='cursor: pointer;'>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-18 17:23:38.

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2 Human Resources Management for Public and Nonprofi t Organizations

There is also an increased emphasis on accountability and perfor- mance management in public and nonprofi t organizations. Staff need crit- ical knowledge skills, abilities, and other characteristics to perform specifi c jobs, but they also need to be fl exible and willing to deal with rapid and unstructured change. Knowledge-specifi c skills and general competencies are important. To make this possible, HRM needs to be more closely inte- grated with the organization ’s objectives and mission.

Chapter 2 addresses the strategic side of HRM and the importance of strategic human resources and human resources planning. It explains why SHRM and HRM planning are critical to agencies ’ missions. SHRM believes that realistic planning is not possible unless strategic planning takes into consideration information on current and potential human resources. Human resources planning requires the assessment of past trends, an eval- uation of the current situation, and the projection of future events. The external and internal environments must be scanned, and changes that might affect an organization ’s human resources must be anticipated and planned for. Also discussed is the effect of information technologies on SHRM. Technological changes such as the increased use of computers, information systems, databases, telecommunications, and networking have changed the way agencies are structured and work is organized and man- aged. Organizations need to recruit, hire, and provide training to individ- uals who have the skills and motivation to adapt to technological changes.

Chapter 3 focuses on the legal environment and the federal laws gov- erning equal employment opportunity. Equal employment opportunity requires that employers not discriminate in the administration and exe- cution of all HRM practices, such as recruitment, selection, promotion, training, compensation, career development, discipline, and labor-manage- ment relations. To understand the legal environment of equal employment opportunity, public and nonprofi t administrators must be familiar with the laws and regulations that govern its implementation.

Chapter 4 is devoted to exploring the issues of managing a diverse workforce. As already noted, the composition of public and nonprofi t work- forces has changed. Women, racial and ethnic minorities, returning war veterans, and older, disabled, homosexual, and transgendered workers are more visible in today ’s workplace than in the past. Other types of diversity issues exist in agencies as well. Diversity must be understood if organizations want to deal effectively with employees regardless of their different characteristics. When diversity is well managed, all employees are supported, valued, and included. A supportive work environment enables employees to achieve their fullest potential.

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After reading this chapter, you should be able to

• Understand the responsibilities and roles of human resources management

• Understand what constitutes public organizations

• Explain why civil service systems or merit systems exist in the pub- lic sector

• Understand what constitutes nonprofi t organizations

• Identify the challenges facing human resources management today

Human resources management (HRM) is the design of formal systems in an organization to ensure the effective use of employees ’ knowl- edge, skills, abilities, and other characteristics (KSAOCs) to accomplish organizational goals. HRM concerns the recruitment, selection, training and development, compensation and benefi ts, retention, evaluation, and promotion of employees, and labor-management relations within an orga- nization. In public and nonprofi t agencies, the greatest expenses and the greatest assets are employees. Unlike many for-profi t organizations that can

CHAPTER ONE

INTRODUCTION TO HUMAN RESOURCES MANAGEMENT IN THE PUBLIC AND NONPROFIT SECTORS

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4 Human Resources Management for Public and Nonprofi t Organizations

use technology to automate the production of their products and reduce staff, public and nonprofi t organizations typically provide some type of service. Thus, they rely on the professionalism and competence of their employees.

Machines cannot be substituted for most public and nonprofi t employ- ees. As a result, public and nonprofi t agencies are labor intensive; employee costs are typically between 50 and 80 percent of their budgets (Cascio & Boudreau, 2008; Fitz-enz, 2000, 2009, 2010). Employees are also public and nonprofi ts ’ greatest assets. Whether referring to top leadership, depart- ment directors or managers, or fi rst-level employees, the quality and com- petencies of the workforce differentiate successful agencies or departments from others. Why is one police department more effective than another when dealing with similar problems and situated in local governments with similar incomes and demographics and with similar responsibilities? Why is one substance abuse treatment center more effective than another if they are using similar clinical protocols and techniques and have clients with similar problems? The answer is likely to be related to the profession- alism and competencies of their employees. The study of HRM has existed for a long time, despite having different names. Scientifi c management addressed the principle of breaking job positions down into their simplest tasks. It was concerned with production effi ciencies through making the best employee and job match and also addressed employee motivation by developing incentive pay systems.

Additional psychological aspects of HRM were developed to select individuals for military positions. Intelligence, aptitude, and psychological tests were developed to screen and place employees in various positions. The fi eld of industrial/organizational psychology has played, and contin- ues to play, a critical role in the development of HRM activities. Human resources management has evolved to encompass systems for the effec- tive recruitment, selection, evaluation, and training and development of employees. Compensation studies to pay employees fair salaries and pro- vide them with benefi ts that are important to them are also important com- ponents of HRM systems. Fair compensation serves to retain and motivate employees.

Human resources management responsibilities change as society changes. Today, public and nonprofi t organizations are facing serious eco- nomic challenges, changes in the legal environment, and social, cultural, gen- erational, technological, and educational changes. A strategic HRM system identifi es these changes and challenges and develops effective strategies to address them.

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Introduction to Human Resources Management 5

The Public Sector

The public sector is composed of a variety of government organiza- tions. Government agencies are owned and controlled by the people. Government is used to maintain a system of law, justice, and social organi- zation. It protects individual rights and freedoms, provides security and sta- bility, and provides direction for the nation. It also provides public goods, regulates certain industries and activities, and corrects problems that the markets create or are unable to address (Rainey, 2003).

In the United States, we have a variety of federal, state, and local gov- ernment agencies. Federal employees work directly for federal agencies and receive their compensation and benefits from the federal govern- ment. Federal Bureau of Investigation agents are federal employees, as are doctors working for the National Institutes of Health and the Centers for Disease Control. Other federal employees may work for the Federal Aviation Authority, the Securities and Exchange Commission, and the Food and Drug Administration. (To see the scope of federal departments and agencies, go to http://www.whitehouse.gov/government/independent-agencies.html.) In 2010, more than 3 million civilian employees were employed directly by the federal government (US Census Bureau, 2012h).

State employees work directly for state agencies and receive their com- pensation and benefi ts from state governments. Each state has a different number of agencies. The compensation and benefi ts given to state employ- ees vary across the states. In 2010, 5.3 million employees were employed directly by state governments (US Census Bureau, 2012g).

There are more than eighty-eight thousand units of local govern- ment: counties, cities, villages and townships, and special districts such as school districts, fi re districts, park districts, hospital districts, museum and zoo districts, and parks and recreation districts. Local government employ- ees work directly for local units and receive their compensation and ben- efi ts from the local governments and taxing districts. The number of local units varies across the states, as do compensation and benefi ts given to local government employees. Even within the same county, county employ- ees may be paid different salaries from employees working for city gov- ernments located in the county. Also, special district employees receive different salaries and benefi ts. There is often little consistency across local government units. In 2010, the number of local government employees was 14.2 million. Most public employees work for local units (US Census Bureau, 2012f).

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http://www.whitehouse.gov/government/independent-agencies.html

6 Human Resources Management for Public and Nonprofi t Organizations

Individuals working directly for federal, state, or local units are consid- ered to be government employees. In a democracy, government is owned by all of its citizens, and most of the revenues that support government agencies typically come from taxes. Government ’s objectives are political in nature. Public agencies are infl uenced by certain values found in the private sector such as effi ciency, effectiveness, timeliness, and reliability. But they are also infl uenced by values not necessarily found in the private sector and often are in confl ict with one another, such as accountability to the public at large and to elected offi cials, being responsive to the rule of law and governmental authorities, being responsive to public demands, being open to external scrutiny and criticism, adhering to strict ethical standards, and conducting public affairs with the goals of fairness, equal treatment, social equity, and impartiality (Rainey, 2003).

Civil Service and Merit Systems

Many public agencies are required to comply with civil service or merit systems to facilitate these values and objective employment practices in public agencies:

• Federal government . The Pendleton Act, passed in 1883, set up an independent, bipartisan civil service commission to make objective, merit- based selections for federal jobs. Those individuals best qualifi ed would receive a job or promotion based on their KSAOCs. The terms civil ser- vice system and merit system are often used interchangeably. This is because merit provides the foundation for civil service systems. The ability to per- form tasks is dependent not on political affi liation but on individual skills and abilities (i.e., merit considerations). The intent of the merit system was to remove the negative effects of patronage (granting jobs to political supporters) in appointing individuals to federal positions. Public employ- ees were expected to perform their work in a politically neutral manner. In 1978, the Civil Service Reform Act made changes to federal personnel policies. The Civil Service Commission was eliminated, and the Offi ce of Personnel Management and the Merit Systems Protection Board took its place. However, being politically neutral, along with experience, education, and expertise, are still important criteria for selecting federal employees.

• State governments . The federal government encouraged state and local governments to develop civil service or merit systems as a condition of receiving federal grants (Aronson, 1974). The federal government has a vested interest in seeing that state and local programs supported by its funds are administered in an effi cient and professional manner. The

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Introduction to Human Resources Management 7

recipients of federal monies were to ensure the proper administration of grant programs. Standards were initially issued in the 1930s and continued through the 1970s when the Intergovernmental Personnel Act of 1970 was passed, which gave grants to state and local governments to improve their personnel practices. The authority for state merit systems is typically out- lined in state statutes, which direct a specifi ed agency to issue the necessary rules and regulations that have the effect of law and the necessary admin- istrative procedures to carry out its provisions. Most civil service systems have independent civil service commissions that are patterned after the fi rst Civil Service Commission. They are bipartisan in composition and usu- ally have three to fi ve members who serve staggered terms and are typically appointed by the governor. They are usually responsible for overseeing hiring and promotions, but they may also be involved in adjudicating griev- ance or discharge hearing and developing or approving job classifi cation schedules.

• Local governments . The administrative structure and the authority granted to local governments are typically found in their charters. This pro- vision for chartering local governments is found in state constitutions and state statutes. For example, the Illinois state statute permits seven varieties of local government structure: aldermanic-city, trustee-village, commission, manager, special charter, strong mayor, and administrator. Each form has its own rules for the selection and type of offi cers, their powers and respon- sibilities, and their general operations. Any municipality may adopt the civil service provisions of the Illinois Municipal Code, but they are not required to do so. Should they adopt civil service provisions, they must adhere to them. All relevant offi cers and employees must be appointed, promoted, and removed according to civil service rules.

In jurisdictions with civil service systems in place, applicants are typically appointed after they have passed a standardized selection procedure. The selection procedure could consist of written examinations, a combination of prior experience and education, or oral interviews. Where competition exists for positions, candidates are ranked by their scores from high to low, with the agency appointing one of the top-ranking candidates.

Different rules apply to different civil service systems. Some systems allow managers to select one of the top three ranked candidates to be selected, others allow one of the top fi ve ranked candidates to be selected, and others allow a larger range of acceptable candidates. Some public employees are exempt from civil service requirements. The exemptions permit chief executives to select people who are in agreement with their

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8 Human Resources Management for Public and Nonprofi t Organizations

priorities for policymaking and politically sensitive posts. In most state and local governments, department directors are appointed by the chief execu- tive. Many public sector HRM regulations and responsibilities are codifi ed in statutes, which means that any changes need the respective legislative body to make the change. Chief executives and managers often have lim- ited administrative and managerial discretion, and increases in compensa- tion and benefi ts are often dependent on legislative approval.

Public agencies often grant hiring preference to veterans of the US armed services. Additional points may be added to the scores of eligible veterans applying for public sector positions.

Economic Challenges

More than 46 million people in the United States are living poverty, and at least 16 million of them are children younger than sixteen. The pov- erty rate for blacks is 27.6. percent, Hispanics 25.3 percent, non-Hispanic whites 9.9 percent, and Asians 12.3 percent. For children under eighteen years old, the poverty rate is 21.9 percent (DeNavas-Walt, Proctor, & Smith, 2012). When times are tough, the demand for public services grows. Low- income residents are dependent on a variety of services, such as housing assistance, assistance for medical care, food, unemployment benefi ts, trans- portation, and utility bills.

Middle-income Americans are increasingly concerned about jobs, health insurance, pensions, housing, and income security. Wage and salary increases have not kept up with increases in the cost of housing, gasoline, food, edu- cation, and insurance. Residents concerned about their living expenses tend to keep a close eye on government spending and want tax relief. At the same time, state and local governments are facing budget defi cits and have to make budget cuts. Problems with the housing markets and foreclosures, leading to reduced property taxes, reductions in sales taxes due to declines in con- sumer spending, and increasing unemployment rates have led to reductions in spending, so state and local revenues are falling. As a result of diffi cult economic times, public agencies are looking to reduce expenses. Strategies to save money include not hiring employees with benefi ts and instead hiring supplemental direct-hire employees who work irregular hours; they receive a paycheck from the agency for time worked but do not receive health insur- ance, retirement pensions, vacation or sick leave, and other benefi ts. In some organizations, they are referred to as other personnel services workers .

Governments are also using more contract workers. These workers work for public agencies, but they are procured through a staffi ng agency or other third party. These arrangements, as well as seasonal, part-time, on-call, and

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Introduction to Human Resources Management 9

temporary agency work, are referred to as nonstandard work arrangements . Many previously employed full-time workers are now filling short-term openings as contractors, consultants, freelancers, and temporary workers (Grossman, 2012; Thompson & Mastracci, 2005; “Surge in Temp Jobs,” 2012). A survey conducted by the Society for Human Resource Management (SocHRM) found the primary reasons that agencies hire temporary workers include to complete specifi c projects (27 percent); as additional resources during busy times or cycles (25 percent); as a gap fi ller until they can hire full-time employees (17 percent); as a way to try out workers for full-time jobs (13 percent); to reduce benefi ts and other labor costs (95 percent); and because they have diffi culty fi lling key skill positions (4 percent); and other reasons (6 percent) (SocHRM, 2011, cited in Grossman, 2012).

Alternative Service Delivery

Privatization and contracting out occur when public sector agencies con- tract with private nonprofi t, private for-profi t, or other public agencies to provide specifi c services. A typical privatization agreement specifi es that a private or nonprofi t entity is responsible for producing particular services. The public employer chooses the service level and pays the amount speci- fi ed in the contract, but leaves decisions about production methods to the contracted fi rm. From an administrative perspective, privatization is often viewed as a way to save tax dollars, reduce the public payrolls, minimize government spending, and boost productivity.

Supporters claim that contracting out government programs will lead to greater effi ciency and more effective operations. They maintain that competition and fewer restrictions allow the contractors to be more cost- effi cient and responsive and that cost savings can be achieved through the economies of scale used by one vendor to provide services to many commu- nities and organizations. It is believed that nonprofi t and private fi rms, not hampered by bureaucratic rules and regulations, can be more innovative than public sector ones (Savas, 2000, 2002). However, research on the cost savings of privatization is inconclusive. There are examples of sweetheart deals with contractors, cost overruns, ineffi ciencies, and less-qualifi ed staff providing important services. Furthermore, transparency, accountability, and concern for the public interest are often lacking (Feeney & Kingsley, 2008; Greenblatt, 2004; Moe, 1987; Sclar, 2001; Starr, 1987).

Technological Innovations

Innovations in technology are changing the way organizations are struc- tured and how work is organized and managed. More agencies are

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10 Human Resources Management for Public and Nonprofi t Organizations

embracing telework. The General Services Administration ’s Office of Strategy Management implemented a thirty-day “telework wave” where employees were supposed to report to their offi ces and instead work from home or other GSA buildings. The purpose was for them to learn differ- ent patterns of behavior, different patterns of communication, different cultures, and different ways of operating (Rausnitz, 2012).

Approximately one in fi ve workers worldwide telecommute according to a poll conducted by Ipsos/Reuters. Telecommuting is most popular in India, where more than 50 percent of workers were working from home, followed by 34 percent in Indonesia, 30 percent in Mexico, and smaller percentages in Argentina, South Africa, and Turkey. Less than 10 percent of people work from home in Hungary, Germany, Sweden, France, Italy, and Canada. The treasurer of Cuyahoga County, Ohio, has replaced fi ve workers with an automated tax processing system. Instead of opening envelopes and scanning and encoding checks, an automated processing system provides those functions (Johnston, 2011).

Police departments are turning to an online talking animated virtual offi cer to assist residents in fi ling an online crime report for nonemergency crimes on the police department ’s website (Powers, 2012), and a mobile application is helping US Fish & Wildlife Service refuge offi cers identify potentially dangerous suspects and stay connected to colleagues while conducting investigations in remote locations. Using an application called PocketCop, an offi cer can connect to the FBI National Crime Information Center database and run background checks.

Key SHRM challenges facing organizations will be the ability to attract and hire qualifi ed applicants and provide training for incumbent employ- ees so that the benefi ts of technology can be realized.

The Nonprofi t Sector

Nonprofi t sector is the collective name used to describe organizations that are not government or private for-profit organizations. They have also been called the voluntary sector , the third sector , and the philanthropic sector . Nonprofi t organizations are chartered by each state and are conferred spe- cial tax-exempt status by the states and the Internal Revenue Service (IRS). The IRS exempts nonprofi ts from paying federal corporate income taxes, and state and local governments may grant nonprofi ts exemptions from property and sales taxes.

To be recognized as a nonprofi t, an organization must possess the fol- lowing general characteristics: (1) it is specifi cally designated as a nonprofi t

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Introduction to Human Resources Management 11

when organized; (2) profi ts or assets may not be divided among corporate members, offi cers, or directors in the manner of corporate dividends; and (3) it may lawfully pursue only such purposes as are permitted for such organizations by statute (Oleck, 1988). Internal Revenue Code section 501(c) lists the types of associations, corporations, and trusts that can qual- ify for federal tax exemption (table 1.1).

The largest nonprofi t classifi cation is 501(c)(3) nonprofi ts, referred to as public charities (table 1.2). The IRS defi nes a public charity as an organiza- tion that normally receives a substantial portion of its total income directly or indirectly from the general public or government. This is different from 501(c)(5) (labor and agricultural organizations) and 501(c)(6) (business leagues) classifi cations, which derive most of their money from members and are organized to primarily serve the interests of their members (Urban Institute, 2012).

The National Taxonomy of Exempt Entities, developed by the National Center for Charitable Statistics, provides this classifi cation system for public charity nonprofi t organizations:

A. Arts, Culture, and Humanities B. Education C. Environmental Quality, Protection, and Beautifi cation D. Animal-Related E. Health F. Mental Health, Crisis Intervention G. Diseases, Disorders, Medical Disciplines H. Medical Research I. Crime, Legal-Related J. Employment, Job-Related K. Food, Agriculture, and Nutrition L. Housing and Shelter M. Public Safety, Disaster Preparedness, and Relief N. Recreation and Sports O. Youth Development P. Human Services Q. International, Foreign Affairs, and National Security R. Civil Rights, Social Action, and Advocacy S. Community Improvement and Capacity Building T. Philanthropy, Voluntarism, and Grantmaking Foundations

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Section of 1986 Code Description of Organization General Nature of Activities

Application Form Number

Annual Return Required to Be Filed

Contributions Allowable

501(c)(1) Corporations organized under act of Congress (including Federal Credit Unions)

Instrumentalities of the United States

No form None Yes, if made for exclusively pub- lic purposes

501(c)(2) Title holding corporation for exempt organization

Holding title to property of an exempt organization

1024 990 a or 990EZ h No b

501(c)(3) Religious, educational, charita- ble, scientifi c, literary, testing for public safety, to foster national or international amateur sports competition, or prevention of cruelty to children or animals organizations

Activities of nature implied by description of class of organization

1023 990 a or 990EZ r , or 990-PF

Yes, generally

501(c)(4) Civic leagues, social welfare organizations, and local associa- tions of employees

Promotion of community wel- fare; charitable, educational or recreational

1024 990 a or 990EZ h No, generally b,c

501(c)(5) Labor, agricultural, and horticul- tural organizations

Educational or instructive, the purpose being to improve condi- tions of work and improve prod- ucts of effi ciency

1024 990 a or 990EZ h No b

501(c)(6) Business leagues, chambers of commerce, real estate boards, and others

Improvement of business conditions of one or more lines of business

1024 990 a or 990EZ h No b

501(c)(7) Social and recreational clubs Pleasure, recreation, social activities

1024 990 a or 990EZ h No b

501(c)(8) Fraternal benefi ciary societies and associations

Lodge providing for payment of life, sickness, accident, or other benefi ts to members

1024 990 a or 990EZ h Yes, if for certain section 501(c)(3) purposes

Table 1.1. IRS Organization Reference Chart

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501(c)(9) Voluntary employees benefi ciary associations

Providing for payment of life, sickness, accident, or other bene- fi ts to members

1024 990 a or 990EZ h No b

501(c)(10) Domestic fraternal societies and associations

Lodge devoting its net earnings to charitable, fraternal, and other specifi ed purposes. No life, sickness, or accident benefi ts to members

1024 990 a or 990EZ h Yes, if for certain section 501(c)(3) purposes

501(c)(11) Teachers ’ retirement fund associations

Teachers ’ association for payment of retirement benefi ts

No form f 990 a or 990EZ h No b

501(c)(12) Benevolent life insurance associ- ations, mutual ditch or irrigation companies, mutual or coopera- tive telephone companies, and others

Activities of a mutually benefi cial nature similar to those implied by the description of class of organization

1024 990 a or 990EZ h No b

501(c)(13) Cemetery companies Burials and incidental activities 1024 990 a or 990EZ h Yes, generally

501(c)(14) State chartered credit unions, mutual reserve funds

Loans to members No Form f 990 a or 990EZ h No b

501(c)(15) Mutual insurance companies or associations

Providing insurance to members substantially at cost

1024 990 a or 990EZ h No b

501(c)(16) Cooperative organizations to fi nance crop operations

Financing crop operations in con- junction with activities of a mar- keting or purchasing association

No form f 990 a or 990EZ h No b

501(c)(17) Supplemental unemployment benefi t trusts

Provides for payment of supple- mental unemployment compen- sation benefi ts

1024 990 a or 990EZ h No b

501(c)(18) Employee Funded Pension Trust (created before June 25, 1959)

Payment of benefi ts under a pen- sion plan funded by employees

No form f 990 a or 990EZ h No b

501(c)(19) Post or organization of past or present members of the armed forces

Activities implied by nature of organization

1024 990 a or 990EZ h No, generally g

(Continued)

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Section of 1986 Code Description of Organization General Nature of Activities

Application Form Number

Annual Return Required to Be Filed

Contributions Allowable

501(c)(21) Black lung benefi t trusts Funded by coal mine operators to satisfy their liability for disabil- ity or death due to black lung diseases

No form f 990-BL No d

501(c)(22) Withdrawal liability payment fund

To provide funds to meet the lia- bility of employers withdrawing from a multiemployer pension fund

No form f 990 a or 990EZ8 No e

501(c)(23) Veterans organization (created before 1880)

To provide insurance and other benefi ts to veterans

No Form f 990 a or 990EZ h No, generally g

501(c)(25) Title holding corporations or trusts with multiple parents

Holding title and paying over income from property to 35 or fewer parents or benefi ciaries

1024 990 a or 990EZ h No

501(c)(26) State-sponsored organization providing health coverage for high-risk individuals

Provides health care coverage to high-risk individuals

No form f 990 a or 990EZ h No

501(c)(27) State-sponsored workers ’ compensation reinsurance organization

Reimburses members for losses under workers ’ compensation acts

No form f 990 a or 990EZ h No

501(c)(28) National Railroad Retirement Investment Trust

Manages and invests the assets of the Railroad Retirement Account

No form k Not yet determined

No k

501(d) Religious and apostolic associations

Regular business activities; com- munal religious community

No form 1065 i No b

501(e) Cooperative hospital service organizations

Performs cooperative services for hospitals

1023 9901 or 990EZ h Yes

Table 1.1. (Continued)

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501(f) Cooperative service organiza- tions of operating educational organizations

Performs collective invest- ment services for educational organizations

1023 9901or 990EZ h Yes

501(k) Child care organizations Provides cares for children 1023 990 or 990EZ h Yes

501(n) Charitable risk pools Pools certain insurance risks of 501(c)(3)

1023 990 a or 990EZ h Yes

521(a) Farmers ’ cooperative associations

Cooperative marketing and purchasing for agricultural procedures

1028 990-C No

527 Political organizations A party, committee, fund, associ- ation, or similar organization that directly or indirectly accepts con- tributions or makes expenditures for political campaigns

8871 1120-POL j 990 a or 990EZ h

a For exceptions to the fi ling requirement, see chapter 2 and the form instructions. b An organization exempt under a subsection of code section 501 other than 501(c)(3) may establish a charitable fund, contributions to which are deduct- ible. Such a fund must itself meet the requirements of section 501(c)(3) and the related notice requirements of section 508(a). c Contributions to volunteer fi re companies and similar organizations are deductible, but only if made for exclusively public purposes. d Deductible as a business expense to the extent allowed by code section 192. e Deductible as a business expense to the extent allowed by code section 194A. f Application is by letter to the address shown on form 8718. A copy of the organizing document should be attached and the letter signed by an offi cer. g Contributions to these organizations are deductible only if 90 percent or more of the organization ’s members are war veterans. For limits on the use of Form 990EZ, see chapter 2 and the general instructions for Form 990EZ (or Form 990). h For limits on the use of Form 990-EZ, see the general instructions for Form 990-EZ (or Form 990). i Although the organization fi les a partnership return, all distributions are deemed dividends. The members are not entitled to pass-through treatment of the organization ’s income or expenses. j Form 1120–POL is required only if the organization has taxable income as defi ned in IRC 527(c). k Application procedures not yet determined. Source: IRS Publication 557 www.irs.gov/pub/irs-pdf/p.557.pdf (pp. 60–61).

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Table 1.2. Number of Nonprofi t Organizations in the United States, 1999–2009

1999 2009

Number of Organizations

Percentage of All Organizations

Number of Organizations

Percentage of All Organizations

Percentage Change

All nonprofi t organizations 1,202,573 100.0% 1,581,111 100.0% 31.5%

501(c)(3) public charities 631,902 52.5 1,006,670 63.7 59.3

501(c)(3) private foundations 77,978 6.5 120,617 7.6 54.7

Other 501(c) nonprofi t organizations 492,693 41.0 453,824 28.7 −7.9

Small community groups and partnerships

Unknown NA Unknown NA NA

501(c)(3) public charities 631,902 52.5 1,006,670 63.7 59.3

501(c)(3) public charities registered with the IRS (including registered congregations)

631,902 52.5 1,006,670 63.7 59.3

Reporting public charities 246,733 20.5 315,662 20.0 27.9

Operating public charities 214,344 17.8 275,984 17.5 28.8

Supporting public charities 32,389 2.7 39,678 2.5 22.5

Nonreporting, or with less than $25,000 in gross receipts

385,169 32.0 691,008 43.7 79.4

Congregations (about half are regis- tered with IRS) a

— 0.0 385,874 24.4 NA

501(c)(3) private foundations 77,978 6.5 120,617 7.6 54.7

Private grant making (nonoperating) foundations

74,891 6.2 115,249 7.3 53.9

Private operating foundations 3,087 0.3 5,368 0.3 73.9

Other 501(c) nonprofi t organizations 492,693 41.0 453,824 28.7 −7.9

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Civic leagues, social welfare organi- zations, and others

124,774 10.4 111,849 7.1 −10.4

Fraternal benefi ciary societies 103,725 8.6 77,811 4.9 −25.0

Business leagues, chambers of com- merce, and others

70,718 5.9 72,801 4.6 2.9

Labor, agricultural, horticultural organizations

60,530 5.0 56,292 3.6 −7.0

Social and recreational clubs 56,429 4.7 57,255 3.6 1.5

Post or organization of war veterans 34,608 2.9 34,593 2.2 −0.0

All other nonprofi t organizations 41,909 3.5 43,223 2.7 3.1

Note: Excludes out-of-scope organizations. a The number of congregations is from the website of American Church Lists (http://list.infousa.com/acl.htm), 2004. These numbers are excluded from the totals for the state since approximately half of the congregations are included under registered public charities. Sources: IRS Business Master File 04/2010 (with modifi cations by the National Center for Charitable Statistics at the Urban Institute to exclude for- eign and governmental organizations). Retrieved from http://nccsdataweb.urban.org/PubApps/profi le1.php?state=us. Used with permission of the Urban Institute.

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18 Human Resources Management for Public and Nonprofi t Organizations

U. Science and Technology V. Social Science W. Public and Societal Benefi t X. Religion-Related Y. Mutual and Membership Benefi t Z. Unknown

There are nine major groups, twenty-six categories, and over four hun- dred subcategories (table 1.3).

501(c)(3) Nonprofi ts

Charitable nonprofi ts are private organizations that serve a public purpose. They operate under a nondistribution component, which prohibits the distribution of profits or residual earnings to individuals who control the entity. As such, it is believed that they possess a greater moral authority and concern for the public interest than private for-profi t organizations. Nonprofi ts often perform public tasks that have been delegated to them by the state or for which there is a demand that neither government nor for-profi t organizations offer. They provide myriad services, such as help- ing the disadvantaged, providing medical services, supporting museums and cultural activities, preserving the environment, and funding medical research. Because of their public-serving nature, individual and corporate

Table 1.3. National Taxonomy of Exempt Entities: Broad Categories

Major Group

Arts, culture, and humanities A

Education B

Environment and animals C, D

Health E, F, G, H

Human services I, J, K, L, M, N, O, P

International, foreign affairs Q

Public, societal benefi t R, S, T, U, V, W

Religion-related X

Mutual/membership Benefi t Y

Unknown, unclassifi ed Z

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Introduction to Human Resources Management 19

donations to 501(c)(3) public charity nonprofi ts can deduct the value of the gift from their taxable income.

Nonprofi ts are thought to be more fl exible than government agen- cies. They can experiment with new programs, responding quickly to new social needs. Instead of getting involved in new or controversial programs, government often gives money to nonprofit agencies to do this work instead. Nonprofi ts thus get fi nancial support, and clients receive services. Government, through the conditions it places on agencies that receive public funds, still has some infl uence but can quickly disassociate itself from programs when things go wrong. There are often certain societal needs that may be too expensive to be provided on a private for-profi t basis. Therefore, in the United States, both government and the nonprofi t sector provide certain services whose costs exceed their market value (Douglas, 1983; O ’Neill, 1989; Salamon, 2012; Weisbrod, 1997).

Public administration practitioners and scholars have increased their attention to nonprofi t organizations as governments have more frequently used such agencies to provide health and human services. Among the examples are organizations established to prevent child abuse, domestic violence, or homelessness; assist the disabled, the elderly, or the mentally ill; or provide day care, counseling, vocational training and rehabilitation, or community and neighborhood centers (Kramer & Grossman, 1987; Lipsky & Smith 1989–1990; Salamon, 2012).

Public assistance reaches nonprofi t organizations indirectly through federal, state, and local governments that contract with nonprofi t agencies to provide public services. Many people do not realize that “rather than depending mostly on private charity and volunteers, most nonprofi t service organizations depend on government for over half of their revenues; for many small agencies, government support comprises their entire budget in contrast to the traditional relationship of two independent sectors; the new relationship between government and nonprofi ts amounts to one of mutual dependencies that is fi nancial as well as technical. The lines between public and private are blurred” (Lipsky & Smith, 1989–1990, p. 625).

This blurring is especially vivid in health and human services. Government, nonprofi t, and for-profi t organizations are subject to similar regulations, dependent on the same revenue sources, hire the same types of professional staff, and perform similar functions. However, public orga- nizations and nonprofi ts are similar in that they defi ne themselves around their missions or the services they offer. These services are often intangible and diffi cult to measure. Both sectors are accountable to multiple constit- uencies. Nonprofi ts must be responsive to supporters, sponsors, clients,

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20 Human Resources Management for Public and Nonprofi t Organizations

and government sources who provide funding and impose regulations. Public agencies must be responsive to their respective legislative and judi- cial branches, taxpayers, cognate agencies, political appointees, clients, the media, and other levels of government.

501(c)(4) Nonprofi ts

Social welfare organizations are often referred to as advocacy organizations . The American Civil Liberties Union, the National Rifl e Association, and the Sierra Club are examples. They cannot receive tax-deductible gifts, they engage in lobbying activities, and they can advocate for specifi c issues. They, along with 501(c)(3) nonprofi ts, constitute what is referred to as the independent sector and are public serving. Many 501(c)(4) nonprofi ts have affi liated 501(c)(3) nonprofi ts to assist with fundraising, and they often establish foundations since donations to them are not tax deductible. And many 501(c)(3) nonprofi ts have affi liated 501(c)(4) organizations to engage in lobbying and advocacy activities. This is because 501(c)(3) non- profi ts have more restrictive limits on their lobbying and political advocacy activities than 501(c)(4) nonprofi ts do.

Public charity 501(c)(3) and social welfare 501(c)(4) nonprofi ts share a common purpose of serving the public. They also share community- oriented values of public administration, such as being responsive, being open to external scrutiny and criticism, conducting public affairs with the goals of fairness and social equity, addressing what they perceive to be com- munity or societal problems, and defending individual rights, commitment to democratic ideals, and citizen and community participation and involvement. They are mission driven, and although operating in the black is a goal, profi t is not the reason for their existence. Public and nonprofi t administrators must behave responsively and ethically at all times, acting in the public interest.

The Alliance for Justice provides live as well as online workshops and publishes booklets and fact sheets on the permissible advocacy activities for 501(c)(3) and 501(c)(4) organizations. Nonprofi ts organized under section 527 are permitted to be active in political campaigns, although they cannot communicate with candidates or members of their staffs and advocacy activities.

Nonprofi t Administrative Structures

A nonprofi t ’s administrative structure is governed by its bylaws, internal documents that typically defi ne most operational and management poli- cies. Bylaws regulate the organization ’s procedures and internal practices, as well as defi ne the duties, powers, and limitations of the directors, offi cers,

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Introduction to Human Resources Management 21

and other agents. Like all other important documents, bylaws should be reviewed periodically and updated.

Nonprofi t organizations possess legal power. Directors are elected or appointed to the board and are authorized to manage and direct the affairs of the organization. They act on behalf of the organization but do not have ownership powers within it; their control is managerial and proprietary. They are free only to change policies and short-range purposes unless the charter or bylaws permit the directors to change the fundamental pur- pose or policies. Many states permit the delegation of direct authority to committees to study and make recommendations about some matter or to manage routine affairs.

The human resources committee, responsible for developing per- sonnel policies, may recommend employee and executive director salary ranges and benefi t packages to the board, as well as evaluate the executive director. It may also handle employee grievances. Although the board may delegate its authority to committees, it has not delegated its responsibility; it must still supervise and hold accountable the activities of the committees.

The nonprofi t sector is often referred to as the voluntary sector because nonprofi t agencies are often dependent on the use of volunteers to assist in executing their missions. Additional information on volunteers and gov- erning boards is provided in later chapters.

501(c)(3) Nonprofi ts

Nonprofits are facing severe economic challenges. Declines in public revenues mean less support for many of these organizations. Uncertain fi nancial times place additional stresses on them. Increased unemployment often requires the expansion of food assistance, medical aid, job training, rent assistance, or retraining services. These services are typically provided by nonprofi t agencies, which must absorb an increase in demand for ser- vices without increasing their staffs and possibly facing layoffs themselves. An additional problem is that the reimbursement rates provided by gov- ernments are often below the true costs of providing services. Due to the decreased funding, some states have also been late in reimbursing nonprof- its for the services already rendered.

Nonprofit agencies are affected by economic uncertainty in other ways. Individuals who have been or might be laid off are less inclined to spend money on cultural activities than more securely employed people. Nonprofi ts that rely on government aid are facing hard times. Lower rev- enue from property taxes, income taxes, user fees, and sales taxes are forcing state and local governments to reduce their budgets.

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22 Human Resources Management for Public and Nonprofi t Organizations

There is a greater emphasis on social enterprise activities as well. Nonprofi ts are expected to diversify their revenue streams and eliminate their reliance on public monies or foundation grants. The leadership of nonprofi t organizations must understand, supervise, and implement fi nance strategies and social marketing. Tough fi nancial times also provoke a greater scrutiny of performance outcomes and indicators of effectiveness.

There are also new corporate forms that recognize social businesses whose primary business is service and not profi ts. Low-profi t limited liabil- ity corporations (L3Cs) and B corporations are recognized by some states and local government. They are run like a business and are profitable, but their primary aim is to provide a social benefi t, often referred to as a double bottom-line. Social benefit is its primary mission. An L3C can accept foundation funds in the form of program-related investments (PRIs), mission-related investments, loans, and guarantees (Hrywna, 2009). A B cor- poration is a designation that a for-profi t corporation can seek to signal it uses the power of business to create public benefi t (Certifi ed B Corporation, 2010; Environmental Leader, 2009). The intent of the new for-profi t des- ignation is to make it easier for socially oriented businesses to attract program-related investments from foundations and additional money from private investors (Loten, 2012; Pynes, 2011; Westaway, 2011).

The New Public Service

Graduates of schools of public policy and administration are likely to take their fi rst jobs in the nonprofi t sector and have shown an interest in work- ing for the private sector as well. The nonprofi t sector is attractive to gradu- ates because they are motivated and believe they will fi nd more challenging work and a greater opportunity to acquire new skills than in government service. More recently, increasing numbers of business students are seek- ing social purpose or responsibility positions at Fortune 500 companies or working at for-profi t organizations that address economic development or energy issues. Sometimes they fi rst go to work for for-profi ts to gain experience and then move to nonprofi ts (Glazer, 2012; Korn, 2011).

Public charity 501(c)(3) and social welfare 501(c)(4) nonprofi ts share a common purpose of serving the public. They also share the community- oriented values of public administration, such as being responsive, being open to external scrutiny and criticism, conducting public affairs with the goals of fairness and social equity, addressing what they perceive to be com- munity or societal problems, and defending individual rights, commitment

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Introduction to Human Resources Management 23

to democratic ideals, and citizen and community participation and involve- ment. Public and nonprofi t administrators must behave responsively and ethically at all times, acting in the public interest.

Today ’s Context for Human Resources Management

Human resources management is critical if organizations are to be effec- tive. Public and nonprofi t organizations are labor-intensive enterprises depending on the KSAOCs of their employees. To be successful, they need to develop progressive HRM practices. Understanding the legal environment of HRMs, the social and cultural changes affecting society and organizations, the generational changes taking place in today ’s work environments, and changes in the educational opportunities available to incumbent employees and future employees is important.

The Legal Environment

Public and nonprofi t agencies must comply with federal, state, and local laws; with executive orders and the rules and regulations promulgated by administrative agencies such as the Equal Employment Opportunity Commission and the Department of Labor; and federal and state court decisions. Equal employment opportunity, labor relations, and employer contributions to benefi ts such as retirement plans and pensions, workers ’ compensation, and unemployment are regulated by law. These topics and employment at will are discussed in greater detail in later chapters.

Social Media Innovations

Social media are increasingly being used in the public and nonprofi t sec- tors. Social media tools are being used to improve the quality of internal and external services; improve internal and external communication; and enable greater citizen, client, and customer participation and engagement. The Center for Technology Innovation at Brookings Institution (Hrdinova & Helbig, 2011) identifi ed three types of social media that organizations use and also outlined why it is important for those designing a social media policy to consider the types of social media uses:

• Employee use for offi cial agency interests: Offi cial agency use refers to employees ’ use of social media to communicate on behalf of the agency through an offi cial account. Employees are not communicating

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24 Human Resources Management for Public and Nonprofi t Organizations

on behalf of themselves as individuals, but rather on behalf of the agency or his or her department.

• Employee use for professional interests: Professional use refers to an employ- ee ’s use of social media for the purpose of furthering their specifi c job responsibilities or professional duties through an external site. While professional use is benefi cial to the work of government by enhancing employees ’ capability to share knowledge and collaborate with their peers, the site that employees are using is not maintained or moni- tored by the agency itself.

• Employee use for personal interests: Using social media for personal interests refers to employees who are using social media tools to conduct personal activities that are not connected to their job duties.

The report acknowledges that often the uses of social media are blurred because the social media environment does not distinguish between what are personal versus professional postings. For example, the University of South Florida (USF) has a Public Administration Program Facebook page that disseminates information relevant to current students and alumni. The information may be programmatic or have to do with careers and job notices, professional development opportunities, and other information deemed relevant. Connected to the Facebook page are other USF Facebook pages. Students, alumni, and faculty often have their own Facebook pages and can friend the page. There could be times when a personal post to Facebook fi nds itself on the Public Administration Facebook page. Likewise, the post could also end up on the College of Arts and Sciences Facebook page and the main USF page.

Due to these interconnected relationships, consideration of the follow- ing elements for social media policy has been recommended when devel- oping a social media policy (Hrdinova & Helbig, 2011, pp. 5–8):

• Employee access: What is the degree to which employees are allowed to access social media sites while at work and the procedures for gaining access?

• Account management: What are the procedures for the creation, mainte- nance, and destruction of social media accounts?

• Acceptable use: What should be the guidelines on how employees are expected to use social media tools while at work, including issues such as time of use, purposes of use, and types of equipment?

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Introduction to Human Resources Management 25

• Employee conduct: What are the expectations for employee conduct on social media sites and consequences should a violation occur?

• Content: What are the procedures for posting content on offi cial agency social media pages, including creation and editorial require- ments for such content?

• Security: What are the security procedures for safeguarding agency data infrastructure?

• Legal issues: What are the legal considerations and requirements for use of social media?

• Stakeholder conduct: What should be the policies in regard to the con- tent posted on an agency social media site by individuals who are not affi liated with the agency?

Employee activity on social media sites like Facebook and Twitter may be covered under

the National Labor Relations Act even in workplaces without unions. Criticisms about

business activities and business practices may qualify as “protected concerted activity”

under section 7 of the National Labor Relations Act, which confers on workers the right,

among others, to engage in “concerted activities for the purpose of collective bargain-

ing or other mutual aid and protection.” Statements about wages, hours, and working

conditions are protected speech.

However, employers can take action against employees for social media posts con-

cerning the agency and its management if the employee is making negative statements

that do not concern work conditions, benefi ts, wages, and other terms and conditions

of employment; the employee is discussing privileged and confi dential client or stake-

holder communications; and the employee is harassing, threatening, or making racist

statements directed at a coworker.

Developing a social media policy for your organization is important, because not all departments and agencies want to or can engage in the same way. The goals of agencies are different, so the social media tools they use are likely to be different as well (Marks, 2012).

All of the Veterans Affairs Department ’s medical centers are connected with veterans, their families, and the public on Facebook. It also has its own YouTube channel, sixty-four Twitter feeds, a Flickr page, and the veteran-run Vantage Point blog (Brewin, 2011). The National Association of Counties reported that a significant number of its member county

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26 Human Resources Management for Public and Nonprofi t Organizations

governments use Twitter and have a Facebook page, although their level of involvement with social media varies.

Once a social media policy is enacted, it should be reviewed on a regu- lar basis to make sure that it covers any new information and communica- tion technologies (ICT) that have been implemented and that the policy is still relevant.

Social and Cultural Changes

The demographic composition of American society is changing. Hispanics (who can be of any race) are now the largest minority in the United States, at approximately 50.5 million, 16.3 percent of the nation ’s popu- lation. As of 2010, the black or African American population, including those of more than one race, surpassed, 42 million (US Census Bureau, 2012a); Americans of Asian/Pacific descent was estimated at 17.3 mil- lion; and American Indian and Alaskan Natives was 5.2 million. The number of Americans who declared themselves as two or more races was 9 million. The population of non-Hispanic whites who indicated no other race totaled 223.6 million (Hixson, Hepler, & Kim, 2011; US Census Bureau, 2010a).

Nontraditional families are now prevalent. Divorce, death, domestic partners, and different generations of the same family living together have become commonplace. In 2009, 49 million (16 percent) of the US popula- tions lived in a household that contained at least two adult generations or a grandparent and at least one generation.

One-generation household: Households that consist of only one generation, for example,

a married or cohabitating couple, a single person, siblings, or roommates

Two-generation household: Households that include a parent or parents and their child or

children under age twenty-fi ve (including stepchildren)

Multigenerational family household: Two generations: parents (or in-laws) and adult

children ages twenty-fi ve and older (or children-in-law), with either generation as

“head” of the household; three generations: parents (or in-laws), adult children

(and spouse or children-in-law), grandchildren

“Skipped” generation: Grandparents and grandchildren, without parents (including

step-generation)

Source: Pew Research Center (2010).

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Introduction to Human Resources Management 27

More than 2.6 million grandparents whose grandchildren are younger than age eighteen live with them (US Census Bureau, 2010b). Thirty-eight percent of opposite-sex, unmarried-partner households are raising chil- dren (US Census Bureau, 2010c). In 2010 there were 349,377 same-sex married couple households and 552,620 same-sex unmarried partner households (US Census Bureau, 2011d). There are 10 million single moth- ers living with children younger than age eighteen in 2011 (US Census Bureau, 2012d), and in 2010 the number of single fathers was 1.8 million or 15 percent of single parents (US Census Bureau, 2011b).

Because of the increase in single-parent families, families in which both parents work, employees taking care of elderly parents and young children, and children living with caregivers other than their parents, organizations need to provide employees with more fl exibility and options than in the past in choosing work schedules and benefi ts. Issues such as day care, elder care, assistance with family problems, and spousal involvement in career planning have become important workplace issues.

Employers face new issues arising from the diverse workforce. They must offer more fl exible work schedules to accommodate training, educa- tion, and family demands. They must also provide greater opportunities for work-based learning to prepare future workers and upgrade the skills of current workers. The increased diversity of the workforce poses new challenges for the systems that educate and train workers. They must now accommodate ethnic and cultural differences, provide for the needs of working families and individuals with disabilities, and address gaps in lit- eracy and job skills among some immigrant populations. This will require increased investments in adult literacy and English as a Second Language programs, more opportunities for continuous learning to stay competitive, and expanded access to work supports to sustain labor force participation. Employers need to manage a diverse workforce, including ensuring that agency rewards such as promotional opportunities and compensation are determined by job performance, initiative, or special skills, not by racism or sexism.

There has been a shift in the attitudes and values of employees, who are now seeking a balance between their personal and work lives and demanding more leisure time to spend with their families. Attitudes toward work have also changed: a greater number of employees want challeng- ing jobs and the opportunity to exercise discretion in the performance of their tasks. Improving the quality of work life has become impor- tant. Empowerment, teamwork, quality improvement, job design, labor- management cooperation, and participative management are expected.

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28 Human Resources Management for Public and Nonprofi t Organizations

Organizational culture will need to be changed if organizations wish to attract, motivate, and retain a competent workforce.

Generational Challenges

Many workforces today are composed of four generations of workers: the traditionalists or matures, born between 1922 and 1945; the baby boomers, born between 1946 and 1964; Generation Xers, born between 1965 and 1980; and the millennials (also known as Gen Y, Net), born between 1981 and 2000. Baby boomers are the largest segment (at least for now) followed by Gen-Xers, millennials, and traditionalists.

Six trends have been identified as affecting the multigenerational workforce (Hannam & Yordi, 2011):

• Increased use of new technologies

• Increased expectation for work-life fl exibility

• Increased expectation for continual development

• Increased need for new ways to reward and recognize employees

• Increased need to engage the entire workforce

• Increased emphasis on innovation

Each generation is characterized as having its own work-related behav- iors. Many traditionalists and baby boomers have typically remained with one organization throughout their working lives. They accept organizational policies and procedures more readily than the other generations and have lower expectations of work and life balance. Some of the keys to motivate them include recognizing their experience and contributions and provid- ing them with opportunities to share their knowledge with less-experienced employees. Gen Xers tend to be results oriented, they are less comfortable with established procedures that may no longer be effective, and they expect the employer to be supportive of a balance between work and life. Some of them may have expected to spend their career with the same organization. They may be motivated by working in a fl exible environment and being provided with learning and development opportunities. Millennials tend to be comfortable with technology, which they have grown up with. As a result, their attention spans are believed to be shorter and more focused on visual and auditory prompts. They are socially minded and goal oriented; drawing the connection between their work and how it contributes to organization goals and public service is likely to motivate them. They are likely to prefer working in a collaborative, fl exible environment and being provided with

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Introduction to Human Resources Management 29

learning and development opportunities. However, the learning and devel- opment opportunities need to be delivered in an experiential manner.

Agencies need to prepare for the impending retirements of tradi- tionalists and baby boomers. They need to develop strategies for sharing knowledge and experience. Agencies and departments need to engage in workforce and succession planning and develop strategies for talent management. Lockwood, Capero, and Williams (2009) recommend using multiple ways of communication (oral, written, and e-mail), hosting col- laborative decision-making and problem-solving discussion, and creating mentoring and coaching programs so that workers of different generations can work together and share experiences.

Many retired employees want to continue working, although in another capacity than in their former jobs. Many retirees from the private, for-profi t sector are looking for new opportunities in public service. Public and nonprofi t organizations should develop creative accommodations to provide them with fl exible work schedules, fl exible benefi ts, and fl exible compensation plans.

Educational Challenges

At a time when workforces require greater skills, fewer low-income stu- dents are attending college, and those who have enrolled have acquired a greater amount of federal student loan debt. At the same time, the chang- ing demographics of American society have called attention to inequities in postsecondary education. Black and Hispanic students earn bachelor ’s degrees at a substantially lower rate than white students.

Given the demographic changes in society, future college-age cohorts will look different from previous generations of college-age students.

Today ’s knowledge-based economy makes college more important than ever before. Nearly 60 percent of jobs today require at least some college. The new economy is making a baccalaureate degree the equivalent of a high school diploma in the old economy. It is estimated that shortages of workers with postsecondary-level skills could grow to 14 million by 2020. In order for the nation as a whole to maintain a competitive economic edge, the workforce must have education and training beyond high school. Six out of ten jobs now require at least some postsecondary education and training.

Violence in the Workplace

Workplace violence is any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the work site. It ranges from threats and verbal abuse to physical assaults and

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30 Human Resources Management for Public and Nonprofi t Organizations

even homicide. It can affect and involve employees, clients, customers and visitors. Homicide is currently the fourth-leading cause of fatal occu- pational injuries in the United States. According to the Bureau of Labor Statistics Census of Fatal Occupational Injuries (CFOI), of the 4,547 fatal workplace injuries that occurred in the United States in 2010, 506 were workplace homicides. Homicide is the leading cause of death for women in the workplace. (Occupational Safety and Health Administration, http://www.osha.gov/SLTC/workplaceviolence/)

Nearly two million individuals every year become victims of violent crime while working or on duty. Organizations that fail to take any precautions against potentially violent situations may fi nd themselves facing a lawsuit over negligent security. Specifi c danger areas are negligent hiring, negligent super- vision, and negligent retention. The US Merit Systems Protection Board, the US Department of Justice, the Federal Bureau of Investigations, and the Occupational Safety and Health Administration conduct research and track incidents of violence in the work place.

Because violence is often in part an uncontrolled expression of built-up stress, it has been suggested that organizations review which elements of their HRM system can be used to defuse stress. Even if no violent actions take place there has been a noted increase of workplace and cyberbullying.

Workplace Bullying and Cyberbullying

The Society for Human Resource Management (SocHRM) conducted a survey in 2012 and reported, “[Bullying is ] defi ned as persistent, offen- sive, abusive, intimidating or insulting behavior or unfair actions directed at another individual, causing the recipient to feel threatened, abused, humiliated or vulnerable. Workplace bullies and targets may be employees, clients or vendors of the affected organization.”

Actions that could be considered workplace bullying include:

• Verbal abuse, name-calling, or malicious sarcasm

• Malicious gossiping or spreading lies about coworkers

• Physical threats or intimidation

• Harsh or constant criticism

• Abuse of authority by providing evaluations that are not accurate; giving unreasonable assignments

• Unjustifi ed interference with work performance such as withholding relevant information, hiding or destroying documents, sabotaging others ’ work

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Introduction to Human Resources Management 31

• Use of technology for bullying behaviors occurring through e-mail, text messages, Twitter, Facebook, or other social media

• Physical intimidation or assault (SocHRM, 2012; US Department of Labor–Occupational Safety and Health Administration, 2013; Harrell, 2011)

Threats of workplace violence or bullying have implications and affect the management of organizations in the following ways:

• Decreased morale

• Increased stress

• Decreased trust among coworkers

• Decreased productivity

• Increased turnover

• Decreased trust in management

• Increased absenteeism

To be proactive, human resource management departments should evaluate the following elements with an eye toward preventing or eliminat- ing antisocial behaviors:

• Job analysis . A systematic job analysis should identify the KSAOCs required for the job. The job analysis should help agencies recruit individuals who possess those characteristics and are able to learn to perform or learn the tasks, which should minimize frustrated employ- ees. Jobs with a high risk of violence should be identifi ed, and precau- tions to minimize risk should be emphasized.

• Selection process . The use of particular selection instruments should be validated. They should screen out candidates who are unable to per- form the required job duties adequately. Tests, applications, interviews, and reference checks can be used to discover nonapparent personality or work-related attitudes. When feasible, thorough background checks should be conducted.

• Performance evaluation processes . Supervisors need to be trained in providing timely, constructive feedback to their staff in a helpful and nonconfrontational manner. Any verbal or physical threats should be documented and reported to management.

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32 Human Resources Management for Public and Nonprofi t Organizations

• Training and development . Organizations need to provide training and development opportunities so that employees can upgrade their skills as the demands of their jobs change. All employees should receive training on how to recognize the signs of a potentially violent person. Warning signs of possible violent acts are being argumentative, not cooperating well with others, having problems with authority fi gures, frequently blaming others for one ’s problems, and being involved with alcohol and drugs.

• Probationary period . The probationary period should be used to closely monitor an employee ’s performance of job tasks and inter- actions with coworkers and management. Danger signals should not be ignored, and if warranted, the probationary period should be extended.

• Grievance procedures . To resolve disputes in nonunionized environments, organizations should have a system to resolve employee grievances, thereby reducing employees feelings of powerlessness.

• Employee assistance programs . These plans should be available to employ- ees who need counseling and other types of assistance. Chronically poor work performance, confl icts with supervisors and other employ- ees, unfounded grievances and complaints, and the abuse of sick leave are symptoms of stress. Providing stress management, employee well- ness services, fi nancial advice, and outplacement assistance may help to decrease incidents of workplace violence.

• Disciplinary policies and procedures . Due process protections and pro- gressive discipline policies should be in place. The objective of the disciplinary process should be to improve performance, not punish or denigrate the employee.

• Rewards and incentives systems . Organizations must ensure that superior performance is recognized and that employees with unacceptable performance or those who display discrimination, partisan loyalty, or favoritism are held accountable.

• Crisis management system . There should be a comprehensive plan to address violence in the workplace. Issues such as the physical arrange- ment of offi ces, the distribution of keys, and access of visitors to employees, fi les, and computers should be reviewed. Should a violent incident occur, a crisis management team should be available to direct employees and handle emergency procedures.

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Introduction to Human Resources Management 33

Conclusion

Public and nonprofi t agencies must change with the times. Nonprofi ts, dependent on government for a signifi cant share of their revenue, now must compete with other nonprofi ts, government agencies, and for-profi ts for shrinking dollars. Faced with the same changes that are confronting public organizations, nonprofi ts must demonstrate they are capable of pro- viding cost-effective professional services. The nature of work has changed, and like public agencies, nonprofi t organizations require their employees to have up-to-date professional and technical skills. In both sectors, there is a greater reliance on technology. Advances in technology call for advanced education, continuous training, and the addition of new benefi ts, such as educational leave or tuition reimbursement.

The use of social media has become important in SHRM. Agencies are using it to recruit and screen applicants, post information about the workplace, and communicate with employees, clients, and constituents of the agency. Social media policies need to be developed that refl ect issues affecting the contemporary work environment.

Jobs may have to be redesigned in order to take advantage of employee skills and boost job satisfaction. Job rotation, job enlargement, and job enrichment have become SHRM components.

Public and nonprofi t administration must meet the challenge of chang- ing social needs and priorities, new directions in public policy, demands for greater citizen involvement in the decision-making process, and pressures for increased accountability and productivity.

An uncertain external environment, coupled with changing needs for organizational skills, has facilitated a shift in the importance of HRM func- tions. Organizations need individuals with the right technical KSAOCs, but they also need people who are fl exible and willing to deal with rapid and unstructured changes. Public and nonprofi t jobs are increasingly more professional in nature, requiring higher levels of education. At the same time, the number of jobs requiring manual labor is decreasing. Employees in public and nonprofi t agencies need to be able to deal with a variety of people, many with a stake in the agency. Taxpayers, clients, customers, elected offi cials, foundations, donors, contractors, board members, and special interest groups are just some of the stakeholders concerned about agency performance. Studies have indicated that relationships exist among an agency ’s strategy, its human resources planning and HRM practices, and its performance.

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34 Human Resources Management for Public and Nonprofi t Organizations

Exercise 1.1. Art Museums Are Looking for Leaders

Museum directors today need both an advanced degree in art history and curatorial experience, as well as the fi nancial acumen and managerial skills of a chief executive.

In this economic environment, most museum directors have to think about generating revenue streams and charitable donations, as well as tend- ing to the permanent collection and acquisitions. Although they may have a chief fi nancial offi cer and development team, directors generally serve as the museum ’s public face of fundraising. They are also ultimately responsible for covering the costs of acquisitions and operations.

Questions

1. Given the recession of 2007–2009, if you are a member of a search com- mittee looking to recruit an executive director for a museum, what knowl- edge, skills, abilities, and other characteristics would you emphasize?

2. What about a different type of nonprofi t organization? Do you believe that fi nancial and management skills are as important as the knowledge an executive director has in the substantive area of the nonprofi t—for example, an educator leading a school, a social worker leading a social service agency, or an athlete leading a sports and recreation program? Explain your reasoning.

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Introduction to Human Resources Management 35

Chapter Questions

1. Discuss examples of how the changing economic condition has called for qualifi ed employees who are fl exible and willing to deal with rapid and unstructured changes. Give examples of impacts of eco- nomic changes on employees ’ and employers ’ expectations.

2. Consider the four generations of workers now in the workplace. Identify a worker you know from each generation. How do they fi t into their generational stereotype? How do they differ? Are there rea- sons other than age that accounts for the similarities and differences in workers?

Online Activities

1. Visit the US Department of Labor, Bureau of Labor Statistics web page and review “Occupation Outlooks and Demographics Data.” What additional workforce changes do you believe might take place in the next fi ve to ten years? What strategies will public and nonprofi t agencies need to implement to be prepared for the future?

2. Visit the Monthly Labor Review Online . Review the two most recent editions, and select two articles from each edition. What topics are discussed, and why do the authors think they are important? Explain your answer.

Additional Readings

Boris, E. T., & Steuerle, C. E. (Eds.). (2006). Nonprofi ts and government: Collaboration and confl ict (2nd ed.). Washington, DC: Urban Institute Press

Bowman, A. O., & Kearney, R. C. (2011). State and local government: The essentials (5th ed.). Boston: Houghton Miffl in.

Costanza, D. P., Badgar, J. M., Fraser, R. L., Severt, J. B., & Gade, P. A. (2012). Generational differences in work-related attitudes: A meta-analysis. Journal of Business and Psychology , 27 , 275–394.

Emerson, S., Menkus, R., & Van Ness, K. (2011). The public administrator ’s companion: A practical guide . Washington, DC: CQ Press.

Mergel, I. (2012). Working the network: A manager's guide for using Twitter in government . Washington, DC: IBM Center for the Business of Government. Retrieved from at www.businessof government.org

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http://www.businessofgovernment.org

36 Human Resources Management for Public and Nonprofi t Organizations

National Center for Charitable Statistics. http://nccs.urban.org/ Pynes, J. E. (2011). Effective nonprofi t management: Context and environment .

New York: M. E. Sharpe. Roeger, K., Blackwood, A., & Pettijohn, S. L. (2012). The nonprofi t sector in

brief. Public charities, giving, and volunteering, 2011 . Washington, DC: Urban Institute. Retrieved from http://www.urban.org /UploadedPDF/412434-Nonprofi tAlmanacBrief2011.pdf

Smith, S. R., & Lipsky, M. (1993). Nonprofi ts for hire: The welfare state in the age of contracting . Cambridge, MA: Harvard University Press.

Society for Human Resource Management. (2011, March). Staff levels and the use of contingent and part-time workers . Arlington, VA: Author.

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http://www.urban.org//UploadedPDF/412434-Nonprofi tAlmanacBrief2011.pdf

�

After you read this chapter, you should be able to

• Describe the changing role of human resources management

• Defi ne human resources planning and identify steps in the plan- ning process

• Identify factors to consider in forecasting the supply and demand for strategic human resources management (SHRM)

• Explain why SHRM is critical for public and nonprofi t organizations

Strategic human resources management (SHRM) is based on the belief that to be effective and able to adapt to changes quickly, agencies need realistic information on the capabilities and talents of their current staff— in essence, their human resources. It refers to the implementation of human resources activities, policies, and practices to make the necessary ongoing changes to support or improve the agency ’s operational and stra- tegic objectives. Agency leaders need to understand how their workplaces will be affected by impending changes and prepare accordingly for the changes. Agency objectives should be formulated after relevant data on the quantity and potential of available human resources have been reviewed. Are human resources available for short- and long-term objectives? To be competitive, organizations must be able to anticipate,

CHAPTER TWO

STRATEGIC HUMAN RESOURCES MANAGEMENT AND PLANNING

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38 Human Resources Management for Public and Nonprofi t Organizations

infl uence, and manage the forces that are important to their ability to remain effective. In the service sector, this means they must be able to manage their human resources capabilities. All too often, agencies have relied on short-term service requirements to direct their human resources management (HRM) practices without giving much thought to long-term implications. By invoking SHRM, agencies are better able to match their human resources requirements with the demands of the external environ- ment and the needs of the organization. The human resources focus is not just an individual employee issue; it also encompasses integrating human resources into the organization ’s strategy and becomes part of the visionary process. Strategic planning, budgeting, and human resources planning are linked in SHRM, the integrative framework that matches HRM activities with strategic organizational needs.

Nonprofi t and public sectors are facing the impending retirements of traditionalists and baby boomers in their workforces. Many employees eligi- ble to retire postponed retiring until the economy improved. Other employ- ees are retiring in advance of recent legislative changes that will affect their pensions. Still other employees are retiring due to buy-out incentives being offered by their employers. Impending retirements are not the only reason that SHRM is important: many public and nonprofi t agencies have had to contend with signifi cant reductions in funding. Some of the strategies used to balance their budgets are to reduce or eliminate services and staff, fur- lough employees, and increase or institute user fees for many of the services that remain. Many jobs are changing. Although the titles may remain the same, incumbent employees are being given new responsibilities and are expected to perform new tasks. Individuals remaining after the layoffs need to possess the requisite knowledge, skills, abilities, and other characteristics (KSAOCs) to keep the programs and services operating effectively.

This chapter discusses SHRM, the changing role of HRM, the need to anticipate future department and agency HR needs, in addition to the increasing use of human resources analytics and human resources infor- mation systems (HRIS) in SHRM and illustrates the importance of all these concerns to organizational vitality and success.

The Changing Role of Human Resources Management

Public, nonprofi t, and for-profi t organizations are facing daunting chal- lenges. For HRM departments to play a strategic role, they must focus on the long-term implications of HRM issues. For example, how will changing

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Strategic Human Resources Management and Planning 39

workforce demographics and workforce shortages affect the organization, and what strategies will be used to address them?

The downsizing and reorganization of public and nonprofi t agencies, along with a strong focus on results, are forcing agencies to validate their business processes, reassess the role of the human resources function, and evaluate the adequacy of the work performed by human resources employees.

To be strategic partners, HRM departments must possess high levels of professional and business knowledge. HRM must establish links to contrib- ute to organizational performance and be able to demonstrate on a contin- uing basis how HRM activities contribute to the success and effectiveness of the organization.

A report by the Society for Human Resource Management (2010a), What Senior HR Leaders Need to Know: Perspectives from the United States, Canada, India, the Middle East and North Africa , identifi ed eighteen core senior HR leadership competencies:

• Business knowledge: An understanding of the operations and processes of how business is conducted

• Coaching/developing others: Helping others to reach their potential

• Credibility: Being perceived by others as having the knowledge and experience to back up one ’s authority

• Critical/analytical thinking: Seeking information and using that informa- tion to inform decisions and resolve problems

• Cross-cultural intelligence: Knowledge of and sensitivity to differences among cultures

• Effective communication: Being able to verbally or in writing convey mes- sages in terms that make sense and also to listen closely to what others are saying

• Ethical behavior: Perception of the moral appropriateness of individual or group conduct or behavior

• Flexibility/adaptability: The ability to adjust the approach as required by shifts within the organization and in the external business environment

• Global intelligence/global mind-set: An overarching way of thinking about the nature of doing business that includes an understanding of and sensitivity to cultural differences among workers in other countries and legal issues inherent in operating a multinational business

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40 Human Resources Management for Public and Nonprofi t Organizations

• HR knowledge: Understanding of tactical and strategic HR functions and processes

• Integrity: Honesty and doing the right thing

• Leading change: Charting the course for the organization ’s stakehold- ers to navigate a shift in business processes, priorities, roles, and expectations

• Organizational knowledge: Understanding the business issues that are specifi c to the organization and having empathy for and an awareness of the impact of human capital issues on the organization as a system

• Persuasiveness/infl uencing others: The art of using interpersonal skills to convince others to share one ’s perspective or way of thinking

• Results orientation/drive for performance: The ability to link processes and practices to positive outcomes and demonstrate the value that human resources brings to the organizations

• Shaping organizational culture: Creating values by which an organization operates

• Strategic thinking: Seeing the big picture, having a long-term line of sight, and understanding the interconnectedness of decisions and activities within the various lines of business

• Technological savvy: Knowledge of the unique solutions and challenges that new technology will bring to the organization and understanding how talent management will be affected by a technologically enhanced business environment

Across all four geographical regions covered in the report, effective communication and strategic thinking were the two most highly rated competencies. In the United States, the competencies human resources professionals rated among their top fi ve were (1) effective communica- tions, (2) strategic thinking, (3) human resources knowledge, (4) integ- rity, and (5) ethical behavior.

Unfortunately, many HRM departments have spent their time ensuring compliance with rules and regulations, so they lack the skills and compe- tencies to act as a strategic partner. For organizations to be successful in implementing SHRM, they need the collaborative effort of agency leaders and human resources professionals, who themselves need the knowledge and skills to undertake a more proactive role. To be ready to change, they

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Strategic Human Resources Management and Planning 41

need an integrated and strategic approach. Critical components identifi ed as being necessary include:

• Leadership: Are leaders actively engaged with and supportive of the agency ’s human resources activities?

• Culture: Does the culture support talent development and the sharing of talent?

• Strategic alignment: Are talent management strategies and initiatives aligned to the broader strategic plans and objectives of the organiza- tion? Workforce planning and future skills need to be identifi ed, and a leadership framework needs to be in place.

• Talent assessment: Does the organization have objective, standardized mechanisms for assessing the most important skills and behavior of incumbents and external candidate? Are competencies tracked at the individual, unit, and agency levels, and are gaps recognized?

• Learning and development: Are learning and development processes and tools used to support the growth of employees? Are development activ- ities targeted to eliminating competency gaps?

• Performance management: Does the performance management process effectively measure and provide useful feedback on the right behaviors and skills in the workforce?

• Human resource capability: Is the human resources function viewed as a values partner relative to talent acquisition, assessment, development, coaching, and deployment?

• HR analytics: Do human resources analytics exist to measure and link HR tasks and responsibilities to business outcomes (Boudreau & Ramstad, 2007; Cappelli, 2008; Cascio & Boudreau, 2011; Eccher, 2011; Fitz-Enz, 2009, 2010; Krell, 2011; Partnership for Public Service, 2011)?

At micro–human resources staff level, Edward Lawler and John Boudreau (2009, p. 33) identifi ed the following strategy activities as being necessary for the successful integration of SHRM:

• Help identify or design strategy options.

• Help decide among the best strategy options.

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42 Human Resources Management for Public and Nonprofi t Organizations

• Help plan the implementation of strategy.

• Help identify new business opportunities.

• Assess the organization ’s readiness to implement strategies.

• Help design the organizational structure to implement strategy.

• Assess possible merger, acquisition, or divestiture strategies.

• Work with the corporate board on business strategy.

• Recruit and develop talent.

As expectations for human resources strategy responsibilities continue to change, staff need to develop new skills if they do not already possess them.

Human Resources Outsourcing

Another change in HRM is the increasing use of human resources out- sourcing (Coggburn, 2009; HRO Today , 2012). Federal agencies, state and local governments, and many nonprofi ts often fi nd it advantageous to outsource some or all of their HRM responsibilities. Many smaller organizations outsource services such as payroll and benefi ts, and in fact, a variety of HRM activities can be outsourced. The journal HRO Today provides a resource guide with almost fi fteen hundred providers in a number of service categories. HRM services that can be outsourced include these:

• Benefi ts consulting services: Benefi ts program design, cost containment, enrollment, actuarial analysis, and full-service administration. Other areas are health care strategy and plans, retirement plan design, life insurance, long-term disability, selection of plan provid- ers and administrators, and assessment of employee behavior and benchmarking.

• Payroll software and services: Payroll processing, withholding, and bene- fi ts accrual services.

• Health benefi ts services: The administration and management of health care plans that may include consumer-driven health care plans, health maintenance organization plans, preferred provider organization plans, point-of-service plans, health savings accounts, fee-for-service plans, and wellness programs.

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Strategic Human Resources Management and Planning 43

• Recruiting, staffi ng, and search services: The provision of online recruit- ment technology, search, temporary staffi ng, and full-service recruit- ment process outsourcing.

• Relocation services for employees moving from one community to another: Relocation fi rms typically make their money though commissions from home sales and moves.

• Screening and workplace security services: Drug testing, background screen- ing for applicants and existing employees, academic verifi cation, resident work eligibility, employment history, and workplace security functions.

• HRIS and web-based services: The provision of human resources services through these systems and services.

• Incentive services: Developing employee recognition programs, measur- ing the return on investment of such programs, providing technology support for incentive programs, and purchasing gift certifi cates and gift baskets for employees.

• Information technology services: Application development, architecture consulting, business intelligence, content management, data security and warehousing, enterprise resource planning, e-procurement, sys- tem integration, technology infrastructure, and web hosting and devel- opment services.

• Professional employer organizations (PEOs) and administrative services orga- nizations (ASOs): Coemployment service, where employees are paid under the PEO ’s federal employer identifi cation number and placed on the PEO ’s benefi ts program and workers ’ compensation policy. ASOs offer many of the same services as a PEO but under a non- coemployer relationship.

• Enterprise HRO services: Comprehensive human resources functions such as benefi ts consulting and administration, employee recognition and incentives, HRIS and human resources information technology, payroll, recruiting and staffi ng, relocation, screening, and training and development.

In the past, the public sector was reluctant to pursue human resources outsourcing aggressively because unions do not approve of it when it means the termination of staff. Also, many HRO services are provided by employees working in other countries, meaning that jobs are transferred out of the United States and local communities. However, this view has

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44 Human Resources Management for Public and Nonprofi t Organizations

softened in some communities as public revenues have decreased, and many agencies are looking at sharing services and reducing costs wher- ever possible.

Strategic Human Resources Management and Human Resources Planning

Strategic planning is the process that enables organizations to guide their future activities and the use of their resources. It assists elected offi cials, funders, foundations, citizens, business partners, and admin- istrators in determining organizational purposes and objectives. The process permits the external forces that affect the organization and the people in it to be identifi ed. These forces may include workforce patterns, economic conditions, competition, regulation, social values, and technological developments. After the external factors are assessed, the internal strengths and weaknesses of the organization ’s incumbents must be identifi ed. Factors to include in an internal assessment are cur- rent workforce skills, retirement patterns, demographic profi les, and employee capabilities.

The agency ’s vision, mission, and measurable goals and objectives drive the identification of future functional requirements, which in turn drive the analysis and elements of the workforce plan. The question to ask is, “What key functions need to be performed to move in the direction set out in the strategic plan?” This may include many current functions in addition to forecasting important future functions and activities. This infor- mation can be used to forecast the organization ’s capabilities to confront its future opportunities and threats. The ultimate feasibility of strategic planning depends on the people who make it operational.

In February 2012, the Equal Employment Opportunity Commission approved its strategic plan for fi scal years 2012 to 2016. Its mission is “to stop and remedy unlawful employment discrimination,” and its vision is “justice and equality in the workplace.” It developed three strategic objectives:

Strategic Objective I: Combat employment discrimination through strategic law enforcement.

Strategic Objective II: Prevent employment discrimination through educa- tion and outreach.

Strategic Objective III: Deliver excellent and consistent service through a skilled and diverse workforce and effective systems.

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Each strategic objective had outcome goals and strategies associated with it. Strategic Objective III and its outcome goal and strategies, for example, are

Mission: Stop and remedy unlawful employment discrimination Vision: Justice and equality in the workplace Strategic Objective III: Deliver excellent and consistent service through a

skilled and diverse workforce and effective systems. Outcome Goal III.A: All interactions with the public are timely, of high

quality, and informative. Strategy III.A.1: Effectively engage in workforce development and

planning, including identifying, cultivating, and sustaining a skilled and diverse workforce.

Strategy IIIA.2: Rigorously and consistently implement charge and case management systems to deliver excellent service.

Strategy III.A.3: Use innovative technology to facilitate responsive interactions and streamline agency processes.

Human Resources Planning

Agency leaders need to understand how their workplaces will be affected by impending changes and plan for their human resources needs. Human resources planning, a critical component of strategic planning and SHRM, is the process of analyzing and identifying the need for and availability of human resources to meet the organization ’s objectives. In an effort to be proactive, the US Offi ce of Personnel Management developed a fi ve- step workforce planning model (http://www.opm.gov/workforceplanning /hfpmodel.htm):

Step 1: Develop a strategic direction: Linking the workforce planning process with the agency ’s strategic plan, annual performance and business plan, and work activities required to carry out long and short terms goals and objectives

Step 2: Analyze the workforce, identify skills gaps, and conduct a workforce analysis: Determining what the current workforce resources are and how they will evolve through turnover; developing specifi ca- tions for the kinds, numbers, and location of workers and man- agers needed to accomplish the agency ’s strategic requirements;

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http://www.opm.gov/workforceplanning/hfpmodel.htm):

46 Human Resources Management for Public and Nonprofi t Organizations

determining what gaps exist between the current and projected workforce needs

Step 3: Develop an action plan: Identifying strategies to close gaps, plans to implement the strategies, and measures for assessing strategic progress—for example, recruiting, training and retraining, restruc- turing, contracting out, succession planning, and technological enhancements

Step 4: Implement the action plan: Ensuring human and fi scal resources are in place; roles are understood; and the necessary communication, marketing, and coordination are occurring to execute the plan and achieve the strategic objectives

Step 5: Monitor, evaluate, and revise: Monitoring progress against mile- stones, assessing for continuous improvement purposes, and adjusting the plan to make course corrections and to address new workforce issues

Forecasting is used to assess past trends, evaluate the existing sit- uation, and project future events. Forecasting and planning are com- plementary in that forecasts identify expectations, while plans establish concrete goals and objectives. Forecasting has become increasingly important as a large segment of the public workforce is inching toward retirement. Agencies must consider how to allocate people to jobs over long periods and try to anticipate expansions or reductions in programs or other changes that may affect the organization. Based on these analy- ses, plans can be made for recruiting and selecting new employees, shift- ing employees to different programs or units, or retraining incumbent employees.

A demand forecast anticipates the workforce that will be needed to accomplish future functional requirements and carry out the mission of the organization. In this step, a visionary staffi ng assessment against future functional requirements is conducted. The result is a forecast of the type of competencies, numbers, and locations of employees needed in the future. An important part of the demand forecast is examining not only what work the agency will do in the future but how that work will be performed. Some things to consider include the following:

• How will jobs and workload change as a result of technological advancements and economic, social, and political conditions?

• What will be the consequences or results of these changes?

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Strategic Human Resources Management and Planning 47

• What will the reporting relationships be?

• How will divisions, work units, and jobs be designed?

• How will work fl ow into each part of the organization?

Once these questions have been answered, the next step is to identify the competencies employees will need to carry out the work. The set of competencies provides management and staff with a common under- standing of the skills and behaviors that are important to the agency. Competencies play a key role in decisions on recruiting, employee devel- opment, personal development, and performance management.

Forecasting human resources requirements involves determining the number and types of employees needed by skill level. First, agencies audit the skills of incumbent employees and determine their capabilities and weaknesses. Positions must also be audited. In most organizations, there are likely to be jobs that are vulnerable because technology or reengi- neering is ready to replace them. Job analyses must be conducted to pro- vide information on existing jobs. The basic requirements of a job should be defi ned and converted to job specifi cations that specify the minimum KSAOCs necessary for effective performance. The skill requirements of positions do change, so any changes that occur must be monitored and refl ected in the job specifi cations.

It is not enough to monitor changes in positions; organizations must also keep abreast of the skills of their employees. Human resources planning uses data inventories to integrate the planning and utilization functions of SHRM. Data inventories compile summary information, such as the characteristics of employees, the distribution of employees by position, and employees ’ performance and career objectives. Specifi c data that are typically catalogued are age, education, career path, cur- rent work skills, work experience, aspirations, performance evaluations, years with the organization, and jobs for which one is qualifi ed. Expected vacancies due to retirement, promotion, transfer, sick leave, relocation, or termination are also tracked. Using an HRIS to compile these data makes the retrieval of information readily available for forecasting work- force needs.

Communication and information technologies enable organizations to maintain and retrieve information and records. An HRIS provides current and accurate data for decision making and broader applications, such as producing reports, forecasting HR needs, strategic planning, career and promotion planning, and evaluating HR policies and practices. Having

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accessible data enables HR planning and managerial decision making to be based to a greater degree on information rather than perceptions. Common applications of HRISs include maintaining employee records, overseeing payroll and benefi ts activities, handling absence and vacation records, administering recruitment and training programs, employee com- munications, and equal employment opportunity and affi rmative action tracking.

Developing an HRIS can be expensive; therefore, it is important that department managers and users, HRM professionals, and technology experts jointly develop it and plan for its implementation. Some factors that should be considered when developing an HRIS are the anticipated initial costs and annual maintenance costs, the ability to upgrade the sys- tem, the availability of relevant software packages for users, compatibility with current information technology systems in place, the availability of technical support to maintain the system, the ability to customize the sys- tem for different kinds of information, the time required to implement the system, and the amount of training required for users to become profi cient.

When forecasting the availability of human resources, agencies need to consider both the internal and external supply of qualifi ed candidates. The internal supply of candidates is infl uenced by training and devel- opment and by transfer, promotion, and retirement policies. Assessing incumbent staff competencies is crucial. An assessment of employees ’ competency levels will provide information for determining the number of those available for and capable of fulfi lling future functional require- ments. It will also provide salient information as to what recruitment, training, and other strategies need to be deployed to address workforce gaps and surpluses. A succession analysis should be prepared that forecasts the supply of people for certain positions. Succession plans should be used to identify potential personnel changes, select backup candidates, and keep track of attrition.

The report Daring to Lead 2011: A National Study of Nonprofi t Executive Leadership

(Cornelius, Moyers, & Bell, 2011) found that 67 percent of executives planned to leave

their positions within fi ve years. Retirements in the federal government increased 24

percent in 2011 (Cornelius et al., 2011), and in Michigan, 4,755 state employees retired

in 2010–2011 (“State Deal to Create,“ 2010), indicating the need to plan ahead so that

the quality of services and programs are not diminished.

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SHRM attempts to match the available supply of labor with the fore- cast demand in the light of the organization ’s strategic plan. A gap anal- ysis is the process of comparing the workforce demand forecast with the workforce supply projection. The expected result is the identifi cation of gaps and surpluses in staffi ng levels and competencies needed to carry out future functional requirements. A gap occurs when the projected supply is less than the forecast demand. It indicates a future shortage of needed employees. Strategies such as recruitment, training, and succession plan- ning will need to be developed and implemented.

A surplus occurs when the projected supply is greater than the forecast demand. This indicates future excess in some categories of employees that may also require taking action. The surplus data may represent occupa- tions or skill sets that will not be needed in the future, or at least not to the same degree. Retraining, transfers, or separation incentives may need to be implemented to address surplus situations.

If necessary skills do not exist in the workforce, employees need to be trained in the new ones, or external recruitment must be used to bring those skills to the organization. The employer must identify where employ- ees with those skills are likely to be found and develop recruitment strat- egies. The availability of external candidates is infl uenced by a variety of factors, including developments in technology, the actions of competing employers, geographical location, and government regulations. Instead of hiring permanent staff, some organizations are using a temporary or “adhocratic” workforce to meet special needs. While temporary and part- time workers have always been part of the labor force, adhocratic workforce is a new term to describe workers hired on an ad hoc basis, teaming up in work groups created for a specifi c reason for a specifi c period of time (Stafford, 2011).

If retaining the knowledge base of an agency is important or to serve its clients better, some organizations have developed creative ways to encourage retirement-eligible employees to remain on the job. They have improved training opportunities and technology to impart different skills, divided full-time positions into part-time work, and offered telecommut- ing as an option. Some organizations have phased retirement plans that permit employees to reduce their hours or responsibilities in order to ease into retirement. This provides an opportunity for experienced workers to mentor younger employees and transfer institutional knowledge. In this way, organizations continue to gain benefi ts from the skills and expertise of soon-to-be-retiring workers. Unless an organization has a mechanism in place to preserve worker knowledge, its loss can have a negative effect on

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50 Human Resources Management for Public and Nonprofi t Organizations

the organization. Experienced workers often possess valuable knowledge and understand the cultural nuances of organizations. SHRM should fol- low these trends and anticipate how they may affect their agencies.

Strategies that can be implemented to halt the retirement of productive employees are offering part-time work with or without benefi ts (depend- ing on the employee ’s need), training employees to develop new skills, transferring employees to different jobs with reduced pay and responsi- bilities, and addressing any age-bias issues that may exist in the agency. Organizations that cannot halt the retirement of productive employees need to set up a system for transferring knowledge to younger employees.

In his book Retoooling HR (2010), John Boudreau suggests that HRM use the logic and rigor of business frameworks to improve how human resources departments analyze, report, and optimize human resources. Using techniques from fi nance, marketing, and operations management, human resources practitioners can build on the decisions that organization leaders have made. For example, HRM departments could use concepts such as return on improved performance and key performance indicators to understand how workforce performance connects to business outcomes the way an engineer would convert process or component performance to improve product design and manufacturing. Other strategies to enhance performance include using portfolio analysis to balance planning for employee skills and talents for several future scenarios according to their likelihood and risk of occurring; using inventory management tech- niques to identify holding and shortage costs by planning for shortages or surpluses in necessary workforce skills; or using logistics management to identify the risk and return of succession planning by balancing the costs, benefi ts, and timing for various career paths. Using various tech- niques, organizations should invest in performance management, work analysis, and competency systems where they make the greatest impact.

Human Resources Information Systems and Electronic Human Resources Management

The HRM function is responsible for attracting, developing, and main- taining the agency ’s workforce. Human resources identifies potential employees, maintains complete records on existing employees, and creates programs to develop employees ’ talents and skills.

Strategic-level human resources information systems identify the personnel requirements—such as the skills, educational level, types of

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positions, number of positions, and cost—for meeting the agency ’s stra- tegic plans. At the management level, an HRIS helps managers monitor and analyze the recruitment, allocation, and compensation of employees. Human resources knowledge systems support analysis activities related to job design, training, and the modeling of employee career paths and reporting relationships. Human resources operational systems track the recruitment and placement of the agency ’s employees (see fi gure 2.1).

Technological advances have not only changed how organizations are structured and work is performed but have also begun to change the tasks of HRM specialists. Communication and information technology systems are being used to perform many of the functions for which employees were once responsible.

A typical HRIS system for employee records keeping maintains basic data, such as the employee ’s name, age, sex, marital status, address, educa- tional background, salary, job title, date of hire, and date of termination.

Figure 2.1. Uses of Human Resources Information Systems

H R I S

Equal Employment

Affirmative action plan

Applicant tracking

HR Development

Employee training profiles

Training needs assessments

Health, Safety, and Security

Safety training

Accident records

Employee and Labor Relations

Union negotiating cost

Auditing records

Attitude survey results

Staffing

Recruiting sources

Applicant tracking

Job offer refusal analysis

Compensation and Benefits

Pay structures

Wage and salary costing

Flexible benefit administration

Vacation use

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52 Human Resources Management for Public and Nonprofi t Organizations

The system can produce a variety of reports, such as lists of newly hired employees, terminated employees, leaves of absences, employees classifi ed by job type or educational level, or employee job performance levels. Such systems are typically designed to provide the data necessary for federal and state record-keeping requirements.

Compensation and Benefi ts

At a higher level, HRIS is the integration of payroll operations with the HRIS and benefi ts unit in HR. Government regulations and the complexity of benefi ts in many organizations warrant HRM expertise. Effi ciency can be increased when payroll and human resources systems are interfaced or integrated because then data entry and maintenance can be reduced. When payroll operations are moved to the human resources department, the bene- fi ts and compensation expertise of the human resources department makes certain that benefi ts plans remain qualifi ed under government regulations, ensures the accuracy of payroll deductions for human resources–managed plans, and provides the opportunity to answer employees ’ questions about pay and benefi ts in person or through interactive HRIS technology.

When organizations offer fl exible benefi ts plans to employees, HRIS can be used to communicate benefi ts information to the employees that can have an impact on the costs of benefi ts and their administration. Employees can obtain information about the benefi ts available and make changes in their plans, enrolling in new benefi ts, adding or changing dependents, changing the amount of monthly savings deducted from paychecks, making a cash withdrawal or taking out a loan, or withdrawing from a plan altogether. In some systems these decisions are supported by a simple “what-if?” analysis that shows the employee his or her available choices, pension projections, how much would be saved after fi ve years at a certain rate of deduction, and so on.

Direct access to benefi ts plans and employees ’ ability to self-enroll or change benefi ts reduces staffi ng requirements in the benefi ts depart- ment, eliminates paperwork, and otherwise improves the administration of benefi ts. New employees who want to know when they are eligible to enroll in a certain plan can fi nd this information without going to the benefi ts department, a change in dependents covered by health insur- ance can be made without paperwork, and retirement benefi ts at differ- ent ages can be projected.

Career Planning and Management Staffi ng Systems

Extending the reach of the HRIS to employees generally can be used for career planning and staffi ng systems. At the simplest level, electronic

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Strategic Human Resources Management and Planning 53

bulletin boards list basic job posting information and at a more complex level include online position descriptions, job advertisements when open- ings arise, résumés of all covered employees, knowledge-based assessment modules, and systematic procedures that link qualifi ed candidates and open positions, providing managers with the backgrounds and résumés of employees or applicants who meet the position requirements.

Career planning and staffi ng systems that are accessible to employ- ees permit their direct involvement in their own career development or movement in the organization. A career development system that employ- ees can access can provide information about positions at the next level, job descriptions, information about steps in career paths leading to cer- tain positions, training and development activities that may be required, and trends in workforce movement, surpluses and shortages, and other career-relevant information. In some systems, the employee can select a training class or another development activity or create an entirely new career plan, subject to authorization, which can also be handled elec- tronically. Most career development is essentially self-development and requires individual motivation, commitment, and clear linkages between individual effort and career results. Extending information through HRIS involves the employees being managed.

Communicating Policies and Procedures

The distribution of agency policies and procedures through technology is less expensive than printing hard copies and distributing them to employ- ees. Changes can be made and communicated in an expedited manner. Information systems permit automatic communication that provides uni- formity and consistency of some policies and procedures yet is fl exible for audience-specifi c variations in others. For example, regional pay levels may infl uence hourly rates, different labor contracts may be in effect in differ- ent locations, and paid holidays may vary. However, other policies with respect to nondiscrimination, privacy, and federal legislation such as the Fair Labor Standards Act may apply to all employees, requiring overtime pay and record keeping.

Organizations are using technology to offer quicker access to com- pany policies online. Entering the systems, managers and employees can examine company policy with respect to treatment for time off, vacations, holiday pay, or infractions leading to discipline. Such things as merit pay guidelines, performance appraisal instructions, access to training pro- grams, and instructions on how to transfer or hire an individual can be provided online.

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Employee Participation

Systems access to employees also permit employees to make their views and ideas known to management in a timely, cost-effi cient manner. When employee attitudes are important to the organization, the timeliness, accu- racy, and identifi cation of different attitudes and perceptions among dif- ferent types or categories of employees are important. Online employee surveys can eliminate the administration of paper-and-pencil surveys and automatically summarize data and trends such as changes in attitudes that may deserve prompt management intervention. Linked to HRIS data, an automated attitude survey can produce summaries of responses by such groupings as management level, job function, location, or demographic characteristics without manual analysis.

Training and Performance Support

In a complex HRIS, job analysis data, productivity data, skills and com- petencies information, performance ratings, applicant qualifications, test results, and other types of information relevant to training can be integrated:

• HRIS demographic data can be analyzed to develop audience- specifi c curricula and training formats that are most effective for different groups.

• Job requirements can be linked to training. This could include compe- tency-based training and assessment.

• HRIS can provide online training courses or provide links to approved vendor-supplied training courses.

• HRIS can analyze the relationships between training and performance ratings, turnover, compensation, and other variables to establish cost-benefi t data on specifi c types of training.

• HRIS can develop new recruitment practices, preemployment tests, and other employment process tools based on analysis of training data and the requirements of positions.

Restructuring Work and Technology Transfer

The introduction of e-mail, computer-based training and testing, voice- activated systems, and the range of telecommunications technologies does not necessarily lead to improvements in performance or gains in productiv- ity. Integrating employees and technology can be a complex, multifaceted

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function. For information systems to work well, many factors need to be considered and implemented. Job and work fl ow analyses should be con- ducted, qualifi ed people must be recruited and selected, and training and retraining must be provided.

Electronic Human Resources Management

Electronic human resources management (eHR) is used to enhance human resources processes such as job analysis, recruitment, selections, training, performance management, and compensation. Data can be collected for job analysis from employees and supervisors from online questionnaires. They then can be summarized and job descriptions created. Some of the systems can convert the data to a job evaluation form and create job eval- uation point scores for use in compensation systems. Many agencies now use web-based portal systems to post job openings and screen résumés. E-recruiting systems can be used to track applicants and provide them with virtual job previews. Some organizations are using e-selection systems to assess job applicants ’ KSAOCs, manage applicant fl ow, and evaluate the effectiveness of selection systems. Some organizations use technology to conduct interviews, personality assessments, and background checks online and use computerized testing to examine candidates ’ cognitive ability skills.

E-learning is used for a variety of education and training programs. Information and communication technologies such as tablet applica- tions, smart phones, social networks, DVDs, streaming video, virtual real- ity, simulations, webinars, and videoconferencing can be used at remote locations. E-performance management systems are used to facilitate the writing of performance appraisals. Technology can also track unit per- formance, absenteeism, grievance rates, and turnover levels over time. E-compensation is used to help agencies administer compensation, ben- efi ts, and payroll systems. Technology can assist with providing managers with comparable labor market data, provide managers with a tool to design and model the costs of compensation systems, provide employees with information about benefi ts and with self-service systems to select or change benefi ts, and enable agencies to comply with laws and union contracts.

Managers must deal with new employee issues because the changes brought about by information technology require employees need to be more highly trained than in the past as tasks become more automated. Employees need the skills and ability to work in an electronic environ- ment, the ability to digest new information and knowledge and act on that information, and the ability and willingness to learn new software and work procedures.

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Information and communication technologies are used to advertise job vacancies in public places and computer bulletin boards. Citizens can dial in or push appropriate buttons to identify agencies that are recruiting and for what types of positions. These technologies have also been used to replace interpersonal screening and interviewing. In computer-assisted screening, applicants are screened over the telephone. A digitized voice asks applicants to respond to a variety of job-related questions, inquiring about work experience, attitudes, interests, and skills.

Many civil service systems have adopted computerized testing. Applicants read questions at a computer screen and use the keypad or mouse to select the correct answer. Tests that require the ability to read, write, and follow oral and visual instructions have been developed that use interactive video and multimedia. The computer scores the exams as soon as the candidates complete them, immediately notifying the candidates of the results.

Staffi ng activities generate and use considerable information, often in paper forms. Job descriptions, applicant material, résumé correspondence, applicant profi les, applicant fl ow, and tracking and reports are the types of information necessary for the operation of a staffi ng system.

Tasks that used to require many human hours of retrieving data from archival fi les can now be performed quickly by computers. Administrative responsibilities such as tracking applicants and employees for equal oppor- tunity and affi rmative action goals and timetables are being done by com- puters. Computer programs are also being used for salary administration and performance evaluations. Benefi ts administration is increasingly being done through computer technology. Interactive voice response systems are providing twenty-four-hour access to retirement plan enrollment, savings plan inquiries and enrollment, and medical plan inquiries. With more and more information being compiled into agency databases, it is imperative that security measures be developed that protect sensitive or confi dential information such as medical records and employee personnel fi les.

While the integration of human resources technology can lead to increases in productivity, there are also challenges associated with it. The implementation of online HR services requires new skills and roles for HR staff such as increased technical and vendor relationship skills. In some instances, there will be an increase in expectations and demand for data; some employees may prefer to meet with a person rather than complete forms online and feel than human resources has become too distant from staff. There is also a risk that applicants from lower socioeconomic back- grounds may not be represented in applicant pools (Johnson & Gueutal, 2011).

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Implementing Strategic Human Resources Management

To implement an SHRM system, it is important for HRM departments to expand their scope of activities beyond their traditional tasks and functions and enter partnerships with managers and employees. Working together provides managers and employees a better understanding of HRM issues, and HRM staff become more informed about the needs of the employees and departments.

SHRM is a process that must be implemented throughout the organi- zation. The goal is to make the SHRM process one that becomes the tem- plate for organizational change and innovation. The Partnership for Public Service (2011) has developed a process overview for federal executives, but managers in all organizations can use its prescriptions:

• Build a planning project team: When assembling a planning team, include human resources professionals as well as agency leaders. Agency leaders provide sponsorship for the planning process and strategic directions for the plan, while human resources profession- als bring other expertise. The process must be collaborative. Those charged with responsibility for the plan must be given the necessary time and resources. The planning project team should identify the approach taken, the tasks associated with implementing those tasks, and time frames in which to complete them. Accountability among team members is important.

• Review relevant inputs: Once the planning team is in place, collect and analyze information about the workforce, as well as review relevant

Human resources apps are available for the iPhone, iPad, BlackBerry, and Android plat-

forms. Apps have been developed for recruitment, keeping track of time and atten-

dance, and analyzing metrics.

SocializedHR.com, JobSpeek, Jobvite, All the Top Bananas, and mResource are used

for recruitment.

The US Department of Labor has a timesheet app that lets employees track the

hours they work and their break times.

A number of HR vendors (such as Kronos, ADP, Kenexa, Taleo, Vortex, Peoplefl uent)

have also developed applications for their systems (Zielinski, 2012a).

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58 Human Resources Management for Public and Nonprofi t Organizations

documents on a variety of information: agency and department strategic plans; existing human capital plans; retirement, attrition, and hiring projections; staffi ng and recruitment plans; external stake- holder issues and concerns; employee views; and other successful models of SHRM.

• Engage managers: Senior managers should be engaged while developing the plan. There should be a cross-section of senior managers representing the full range of major functions. Managers typically are most aware of the challenges to a unit ’s mission and its workforce.

• Assess challenges and devise solutions: The planning team should collab- orate to identify challenges and develop solutions. Quantitative data about the workforce should be reviewed—information that includes retirement, attrition, and hiring projections; staffi ng plans; and employee feedback. Qualitative information that should be considered includes information about strategic goals and priorities, the work- force needed to achieve those goals, and potential challenges to build- ing or maintaining the workforce.

• Draft the plan: Before writing the plan, prepare a comprehensive outline and solicit feedback from agency leaders and managers, employees, and external stakeholders. The plan should also include a time line for action, the tactics, the tasks associated with each change initiative, time frames for completion, and the person or persons responsible for each item and the metrics for assessing success.

Evaluating the Effectiveness of Strategic Human Resources Management

To evaluate the effectiveness of SHRM, SHRM audits and human resources benchmarking and return on investment analysis can be used.

SHRM Audit

One method used to assess SHRM effectiveness is an HRM audit, an in-depth analysis that evaluates the current state of SHRM in an organi- zation. The audit identifi es areas of strengths and weaknesses and where improvements are needed. During the audit, current practices, policies, and procedures are reviewed. Many audits also include benchmarking

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against organizations of similar size or industry. A number of areas are typically included in an audit:

• Legal compliance (Equal Employment Opportunity Act, Occupational Safety and Health Act, Fair Labor Standards Act, Employment Retirement Income Security Act, Family and Medical Leave Act, privacy)

• Current job descriptions and specifi cations

• Recruiting and selection procedures

• Compensation and pay equity and benefi ts

• Employee relations

• Absenteeism and turnover control measures

• Training and development activities

• Performance management systems

• Policies and procedures, the employee handbook

• Terminations

• Health, safety, and security issues

Human Resources Benchmarking and Return on Investment

Human resources management departments, like other units, are being asked to demonstrate their value to public and nonprofi t organizations. Human resources audits and HRIS are being used with greater frequency to obtain information on HR performance. Once information on perfor- mance has been gathered, it must be compared to a standard. One method is to compare specifi c measures of performance against data on measures in other organizations known for their best practices.

The use of human resources analytics to demonstrate return on invest- ment has been promoted by a number of scholars for years. Employee costs in public and nonprofi t organizations can be anywhere from 50 to 80 per- cent of expenses; therefore, a key responsibility of human resources leaders is to demonstrate the connections between progressive human resources practices and agency performance, and to do so they need data (Cascio & Boudreau, 2008). Drawing on their earlier work, Cascio and Boudreau developed an integrated approach that uses logic, analytics, measures, and process, which they refer to this as the LAMP framework. Also drawing on his earlier work, Fitz-enz (2009, 2010) developed a predictive manage- ment model driven by human capital analytics. He notes the importance

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60 Human Resources Management for Public and Nonprofi t Organizations

of comprehending past and current events that affect the organization, understanding not only trends but also the drivers behind the trends, the ability to see patterns of consistency as well as change, and having the tools to describe the probability of something in the future.

Problems and Implications of Strategic Human Resources Management

Research demonstrates the importance of SHRM. Why, then, is HRM often considered a secondary support function rather than a driver of an organization ’s future? A number of reasons may exist. Human resources management professionals may not have the fl exibility to ini- tiate new programs or suggest changes in regard to new organizational structures. This is especially true when organizational change issues challenge existing rules and regulations, as well as embedded standard operating procedures. There are fi nancial costs associated with SHRM. Some organizations may be reluctant to spend additional resources to update their information management technology and analytical sys- tems, as well support the training and development of human resources employee skills. Even human resources managers in the federal govern- ment have been found to neglect SHRM. A report from the Partnership for Public Service and Booz Allen Hamilton (2011) found that these managers spend more time planning for the federal agencies they work for rather than plan for their own human resources units. Major barriers that managers cited included a lack of time, inadequate funding, a lim- ited ability to assess and select candidates, and challenges with workforce forecasting.

In a global study of HRM operations in corporations based in Europe, China, the United Kingdom, Canada, Australia, and the United States, Lawler and Boudreau (2012) found that human resources departments have not changed how they allocate their time. The departments studied still spend most of their time on providing services and record keeping. These departments are often not acting as strategic partners, and human resources metrics and analytics remain underdeveloped and underused. The study also found a clear relationship between the skills of human resources managers and the effectiveness of the human resources func- tions. Human resources effectiveness was found to be related to having an integrated HRIS system, using human resources metrics and analytics for decision making, and participating in strategic activities such as helping to

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plan the implementation of strategy and choosing strategy options. It is not only in the United States that human resources departments still need to evolve; departments in Europe, China, the United Kingdom, Canada, and Australia must move beyond providing administrative tasks and become more involved in strategic decisions.

Ethical Standards for Strategic Human Resources Management

Consistent with many professional associations, HRM associations have professional codes of conduct. In an analysis of the professional codes of conduct for the American Compensation Association, the American Society for Training and Development, the International Association of Human Resource Information Management, the International Personnel Management Association, and the Society for Human Resource Management, Wiley (2000) found the following code of ethics items to be most frequent:

• Integrity: Practicing the profession with a high level of honesty, integ- rity, and fairness

• Legality: Respecting individual rights and obeying all laws

• Profi ciency: Maintaining and improving professional competence

• Professional loyalty: Supporting the profession and not misusing professional affi liation for personal or business gain

• Confi dentiality: Respecting the confi dentiality of privileged information

Wiley noted that despite some similarities in the codes, there were inconsistencies in language, they were not always clearly written, terms commonly were used without defi nitions, and little guidance was given to human resources practitioners for making ethical decisions. Information related to sanctions and penalties and enforcement was also found to be lacking. However, what Wiley did fi nd was important: the codes serve as a set of expectations by which practitioners will be judged by their con- stituents; they represent the preferred character dispositions that should control the way the profession is practiced by the individual, and they are designed to support or encourage practitioners to act in the interest of the public (Pynes, 2012).

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Conclusion

The future viability of an organization and its human resources capabilities are interrelated and must be considered together. Human resources man- agement must be vertically integrated with strategic planning and horizon- tally integrated with other human resources functions, such as training and development, compensation and benefi ts, recruitment and selection, labor relations, and the evaluation of the human resources planning process, to allow adjustments to be made to confront rapidly changing environmental conditions. Strategic human resources management guides management in identifying and implementing the appropriate human resources learn- ing activities for resolving organizational problems or adapting to meet new opportunities.

Strategic human resources management determines the human resources needs of the agency and ensures that qualifi ed personnel are recruited and developed to meet organizational needs. Should there be a shift in demand for services, agencies must know whether there are poten- tial employees with the requisite skills available to provide these services and whether the agency ’s finances can afford the costs associated with additional compensation and benefi ts. Forecasting an agency ’s human resources supply reveals the characteristics of its internal supply of labor; it also helps to assess the productivity of incumbent employees, implement succession planning and salary planning, and identify areas where external recruitment or training and development are necessary.

Training and development are essential to the effective use of an orga- nization ’s human resources and an integral part of its planning. Training is used to remedy immediate needs, and development is concerned with long-term objectives and the ability to cope with change. Training and development should be viewed as a continuous process. There will always be new employees, new positions, new problems, changes in technology, and changes in the external and internal environments that require a planned approach to training and development and its integration with other HRM functions. Training and development infl uence recruitment, selection, career planning, and the compatibility between agency goals and employee aspirations. Training and development programs must be integrated to complement the organization ’s mission and operations. Organizations should use employees wisely with respect to the strategic needs of the organization.

Turnover, including retirements, must be anticipated and planned for. Human resources management departments must track the skills of

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Strategic Human Resources Management and Planning 63

incumbent employees and keep skill inventories. Recruitment and training must be tied to the organization ’s mission. The availability and stability of fi nancial support; the advancement of technological changes, legal regula- tions, and social and cultural changes; and the evolution of human resources requirements must be considered when developing strategic plans.

At one time, organizations hired employees to fi t the characteristics of a particular job. Now it is important for organizations to select employ- ees who fit the characteristics not only of the position but also of the organization. Human resources management professionals must serve as internal consultants, working with managers to assess human resources needs. Together they must project the demand for services, develop new resources, and determine the appropriate reallocation of services. The SHRM process, once established, can be used to anticipate and prepare for major changes affecting the workplace.

Effective strategic human capital management approaches serve as the foundation of any serious HRM initiative. They must be at the center of efforts to transform the cultures of agencies so that they become results oriented and externally focused. To facilitate these changes, HRM personnel and depart- ment managers must acquire new competencies to be able to deliver HRM services and shift toward a more consultative role for human resources staff.

Like service industries and new economy companies, public and non- profi t organizations are driven by the knowledge and skills their employees possess. It is shortsighted for elected offi cials, board members, funders, executives, and other agency leaders to dismiss the importance of SHRM. As important, organizations must reinforce the importance of human cap- ital and the contribution that knowledge management makes to the effec- tive delivery of services. Human resources management departments must have the knowledge, skills, and authority to identify and facilitate changes.

The results of a survey distributed to US corporations to assess what human resources

professionals did to improve the effectiveness of human resources during the Great

Recession found the following (Lawler, Jamrog, & Boudreau, 2011):

Talent management . Making a stronger commitment to talent management and improv-

ing the quality of their talent management decisions. Having performance manage-

ment systems in place that produced data on the talent in the workforce.

Analytics and metrics . Using data to show the effectiveness of human resources processes.

Innovation . Implementing innovative human resources activities and being willing to change.

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Exercise 2.1. State and Local Government Workforce: 2012 Trends

A survey by the Center for State and Local Government Excellence, con- ducted among members of the International Public Management Association for Human Resources and the National Association of State Personnel Executives, State and Local Government Workforce: 2012 Trends (http://slge .org/publications/state-and-local-government-workforce2012-trends) iden- tifi ed the following workforce changes:

• Sixty-eight percent of the respondents noted their workforces have shrunk since the 2007–2008 economic downturn.

• Twenty-two percent of the respondents noted that employees had accel- erated their plans for retirement.

• Fifty-one percent of the respondents noted pay freezes. • Forty-two percent of the respondents noted hiring freezes. • Twenty-eight percent of the respondents laid off employees.

Questions 1. Develop a SHRM plan for addressing each of those workforce changes:

reduced workforce, increased retirements, pay freezes, hiring freezes, and layoffs.

2. Which SHRM plan was most diffi cult to develop?

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Strategic Human Resources Management and Planning 65

Exercise 2.2. Some Nonprofi ts Are Hiring

Nonprofi t HR Solutions released a survey of nonprofi t organizations, 2012 Nonprofi t Employment Trends Survey (www.nonprofi t.hrcom/index.php), that found the following:

1. Forty-three of nonprofi ts surveyed indicated they plan to hire in the com- ing year.

2. Retirements and voluntary resignations are driving turnover again.

3. Staff retention needs greater attention, especially for direct service staff.

4. Social networking–based recruitment strategies are growing in popularity.

5. Staff diversity is important to nonprofi ts.

Questions

1. What steps can agencies take to make sure they are prepared for the above survey responses?

2. Which of the survey responses do you think is most important to address fi rst? Explain your reasoning.

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66 Human Resources Management for Public and Nonprofi t Organizations

Chapter Questions

1. Assume the role of HRM director for a public or nonprofi t agency you are familiar with. Prepare a written outline about why HRM plan- ning must be a process fl owing from the organization ’s strategic plan. Be prepared to present your outline to the class.

2. In small groups, discuss how technology has transformed your job. Share with your group members initiatives that your organization has established to meet the technology challenges.

3. In small groups, describe web-based human resources information systems (HRIS) you are familiar with. Based on your own experiences and internet research, evaluate the advantages and disadvantages of employees using a web-based HRIS. What HRIS services are most convenient for employees?

Online Activity

1. Go to the US Government Accountability Offi ce website and review two reports on human capital. Develop a written proposal for strate- gies that should be implemented by the agency you work for or one you have worked for in the past.

2. In a small group, use the websites of Governing Magazine, Government Technology Executive News , and the Chronicle of Philanthropy . Have each group member discuss the most recent topics addressed in these publications. After the topics have been presented, discuss where the topics overlap. Do differences exist among the technology topics of public and nonprofi t organizations?

3. Using the internet, conduct research in identifying three HRIS sys- tems and the companies that developed them. Develop criteria to evaluate the systems. Then use these criteria to prepare a presenta- tion summarizing what you believe to be the benefi ts of each and introducing the companies that developed them.

Additional Readings

Goodman, D., & French, P. E. (2011). Assessing the temporary use of at-will employment for reorganization and workforce reduction in Mississippi state government. Review of Public Personnel Administration , 31 (3), 270–290.

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Strategic Human Resources Management and Planning 67

Guo, C., Brown, W. A., Ashcraft, R. F., Yoshioka, C. F., & Dong, H-K. D. (2011). Strategic human resources management in nonprofi t organi- zations. Review of Public Personnel Administration , 31 (3), 248–269.

Lengnick-Hall, C. A., Beck, T. E., & Lengnick-Hall, M. L. (2011). Developing a capacity for organizational resilience through strategic human resource management. Human Resource Management Review , 21 , 243–255.

Lengnick-Hall, M. L., Lengnick-Hall, C. A., Andrade, L. S., & Drake, B. (2009). Strategic human resource management: The evolution of the fi eld. Human Resource Management Review , 19 , 64–85.

Nobel, C. (2010). How IT shapes top-down and bottom-up decision mak- ing. Harvard Business School Working Knowledge . Retrieved from http:// hbswk.hbs.edu.

Ogg, S. (2011). HR for impact. In P. M. Wright, J. W. Boudreau, D. A. Pace, E. Sartain, P. McKinnon, & R. L. Antoine (Eds.), The chief HR offi cer: Defi ning the new role of human resource leaders (pp. 257–268). San Francisco: Jossey-Bass.

Phillips, P. P. (Ed.). (2002). Measuring ROI in the public sector . Alexandria, VA: ASTD.

Selden, S. C., & Wooters, R. (2011). Structures in public human resource management: Shared services in state governments. Review of Public Personnel Administration , 31 (4), 349–368.

Van Buren III, H. J., Greenwood, M., & Sheehan, C. (2011). Strategic human resource management and the decline of employee focus. Human Resource Management Review, 21 , 209–219.

Wright, P. M., Boudreau, J. W., Pace, D. A., Sartain, E., McKinnon, P., & Antoine, R. L. (2011). (Eds.). The chief HR offi cer: Defi ning the new role of human resource leaders . San Francisco: Jossey-Bass.

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http://hbswk.hbs.edu

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�

After you have read this chapter, you should be able to

• Understand the federal laws related to equal employment oppor- tunity and their implications for strategic human resources management

• Be able to explain the difference between equal employment opportunity and affi rmative action

• Comprehend the religious exemption from Title VII protections provided to some religious-affi liated nonprofi t organizations

• Know the differences between disparate treatment and disparate impact theories of employment discrimination

• Be able to understand and apply the constitutional protections provided to public employees

• Understand the concept of employment at will

The legal environment has a signifi cant infl uence on public and non-profit human resources management (HRM). All organizations— public, nonprofi t, and private for-profi t—must comply with equal employ- ment opportunity laws. Equal employment opportunity has implications

CHAPTER THREE

FEDERAL EQUAL EMPLOYMENT OPPORTUNITY LAWS AND OTHER EMPLOYEE PROTECTIONS

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70 Human Resources Management for Public and Nonprofi t Organizations

for all aspects of strategic human resources management (SHRM): human resources planning, recruitment and selection, training and career development, compensation and benefi ts, performance evaluation, and labor-management relations. Public employees enjoy constitutional pro- tections that are not available to nonprofi t or private for-profi t employees.

This chapter explains the federal legal environment that governs equal employment opportunity, the constitutional rights relevant to public sec- tor employees, and employment at will. Administrators must understand the laws that are important to human resources management (HRM). These laws are designed to eradicate discrimination in the workplace for non-job-related or non-performance-related reasons. However, many employers do not understand the laws, misapply them, or choose to ignore them. Employers must consider these laws when developing employment policies and practices.

Federal Equal Employment Opportunity Laws

This section explains the federal laws governing equal employment oppor- tunity. It is recommended, however, that you check with your state and local governments ’ fair employment practice agencies for additional laws and regulations that may have an impact on the equal employment oppor- tunity practices of your agency.

Civil Rights Acts of 1866 and 1871

The Civil Rights Act of 1866, based on the Thirteenth Amendment to the US Constitution, prohibits racial discrimination in the making and enforcement of contracts, which includes hiring and promotion decisions. Nonprofi t and private employers, unions, and employment agencies fall under its coverage.

The Civil Rights Act of 1871 covers state and local governments. Based on the Fourteenth Amendment, it prohibits the deprivation of equal employment rights under state laws. It does not apply to private businesses or federal agencies unless there is state involvement in the employment practices in question.

Title VII of the Civil Rights Act of 1964

The Civil Rights Act of 1964, signed by President Lyndon Johnson, cov- ers all employers with fifteen or more employees except private clubs,

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Federal Equal Employment Opportunity Laws 71

religious organizations, and places of employment connected to an Indian reservation.

Title VII of the act deals specifi cally with discrimination in employ- ment: it prohibits discrimination based on race, color, religion, sex, or national origin. The passage of this law was not without controversy. Many politicians (mostly in the South) thought that a federal law forbidding discrimination would usurp states ’ rights. Congressman Howard Smith of Virginia tried to defeat the bill by including sex as one of the protected classifi cations. He hoped that the insertion of sex would render the bill foolish and lead to its defeat. The act passed with the inclusion of sex, and today litigation concerning sex discrimination is common.

The Civil Rights Act of 1964 created the Equal Employment Opportunity Commission (EEOC) to investigate complaints and try to resolve disputes through conciliation. The act was amended in 1972 by the Equal Employment Opportunity Act, which extended its coverage to state and local governments and educational institutions. At this time, the EEOC was granted enforcement powers to bring action against organizations in the courts if necessary to force compliance with Title VII.

The EEOC requires that most organizations submit annual EEO forms, identifying the demographic breakdown of their employees. Data from these forms are used to identify possible patterns of discrimination in par- ticular organizations or segments of the workforce. The EEOC may then take legal action against an organization on the basis of these data.

Title VII does not prohibit discrimination based on seniority systems, vet- erans ’ preference rights, national security reasons, or job qualifi cations based on test scores, background, or experience, even when the use of such prac- tices may correlate with discrimination based on race, sex, color, religion, or national origin. Section 703(e)(1) of Title VII permits an employer to discriminate on religion, sex, or national origin in instances where religion, sex, or national origin is a bona-fi de occupational qualifi cation (BFOQ) reasonably necessary to the normal operation of that particular business or enterprise. For example, a BFOQ that excludes one group (say, males or females) from an employment opportunity is permissible if the employer can argue that the essence of the business requires the exclusion, that is, when business would be signifi cantly affected by not employing members of one group exclusively. One case that dealt with this issue was United Automobile Workers v. Johnson Controls (1991). Johnson Controls is a car battery manufac- turer that excluded fertile women from jobs where there was high exposure to lead. Fertile men were not automatically excluded and were given a choice as to whether they wanted to risk their reproductive health. The company

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72 Human Resources Management for Public and Nonprofi t Organizations

argued that this policy falls within the BFOQ exception to Title VII. In its 1991 decision, the US Supreme Court disagreed. The Court found that the policy was discriminatory since only women employees were affected by it:

Respondent ’s fetal protection policy explicitly discriminates against women on the basis of their sex. The policy excludes women with child- bearing capacity from lead-exposed jobs and so creates a facial classi- fi cation based on gender . . . Despite evidence in the record about the debilitating effect of lead exposure on the male reproductive system, Johnson Controls is concerned only with the harms that may befall the unborn offspring of its female employees.

The Court stated that women as capable of doing their jobs as their male counterparts may not be forced to choose between having a child and having a job.

In general, the position of the courts regarding BFOQs clearly favors judgments about the performance, abilities, or potential of specifi c individ- uals rather than discrimination by class or categories. The Supreme Court has said that the BFOQ exception to Title VII is a narrow one, limited to policies that are directly related to a worker ’s ability to do the job. The burden of proof is on the employer to justify any BFOQ claim.

For most public sector jobs, it is very diffi cult to substantiate the neces- sity of gender, race, religion, national origin, age, or disability as a BFOQ. Nevertheless, there are some instances where a BFOQ case can be made. In Dothard v. Rawlinson (1977), the state of Alabama was permitted to exclude females from being guards in an all-male maximum-security prison where 20 percent of the prisoners were sex offenders.

In 1996, the US Court of Appeals at Philadelphia ruled in Healey v. Southwood Psychiatric Hospital (1996) that gender can be considered a BFOQ for the purposes of staffi ng a psychiatric hospital unit that treats emotion- ally disturbed and sexually abused children. A female child care worker was assigned to work the night shift because the hospital needed a balance of men and women to provide therapeutic care to female and male patients who might want to talk with a staff member of their own sex. The court held that Title VII excuses discrimination that is justifi ed as a BFOQ when it is reasonably necessary to the normal operation of business. The essence of the hospital ’s business requires consideration of gender in staffi ng deci- sions because if there are not members of both sexes on a shift, the hospi- tal ’s ability to provide care to its patients is impeded.

The question of whether race, religion, national origin, color, and sex constitute BFOQs arises often in the nonprofi t sector. Is gender a legitimate

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BFOQ for an executive director position at a rape and sexual abuse center? Can a qualifi ed male perform the administrative and leadership tasks, or does the executive director need to be a female? Would race be a BFOQ for a leadership position in a community-based nonprofi t that provides services to racial minorities? If a BFOQ is challenged, the burden is on the employer to justify any claim.

Laws That Address Religious Discrimination

Under section 701(j) of Title VII, employers are obligated to accommodate their employees ’ or prospective employees ’ religious practices. Failure to make accommodation is unlawful unless an employer can demonstrate that it cannot reasonably accommodate the employee because of undue hard- ship in the conduct of its business. In Trans World Airlines, Inc . v. Hardison (1977), the Supreme Court ruled that the employer and union need not violate a seniority provision of a valid collective bargaining agreement, the employer has no obligation to impose undesirable shifts on nonreligious employees, and the employer has no obligation to call in substitute workers if such accommodation would require more than de minimis cost.

Nonprofi t organizations that provide secular services but are affi liated with and governed by religious institutions are exempt from the law under section 702 of the Civil Rights Act of 1964, which states: “This title shall not apply to an employer with respect to the employment of aliens outside any State, or to a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular reli- gion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.”

Educational institutions such as universities, schools, or other institu- tions of learning are also exempt from the law. Section 703(e)(2) of the Civil Rights Act of 1964 states:

It shall not be an unlawful employment practice for a school, college, university, or other educational institution or institution of learning to hire and employ employees of a particular religion if such school, col- lege, university, or other educational institution or institution of learn- ing is, in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society, or if the curriculum of such school, college, uni- versity, or other educational institution of learning is directed toward the propagation of a particular religion.

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In Corporation of the Bishop of the Church of Jesus Christ of Latter Day Saints v. Amos (1987), the Supreme Court upheld the right of the Church of Jesus Christ of Latter-Day Saints to terminate a building engineer who had worked at its nonprofi t gymnasium for sixteen years because he failed to maintain his qualifi cation for church membership. The Court claimed that the decision to terminate was based on religion by the religious organiza- tion and thus exempted from the Title VII prohibition against religious dis- crimination. The section 703(e)(2) exemption is broad and is not limited to the religious activities of the institution.

Another change with an impact on how one manages religious diver- sity is the introduction of faith-based initiatives. President George W. Bush signed Executive Orders 13198 and 13199 in January 2001 and Executive Orders 13279 and 13280 in December 2002 requiring execu- tive branch agencies to identify and remove internal bureaucratic barriers that have impeded greater participation in federal programs by faith- based organizations. The executive orders permit religious or faith-based organizations to receive federal funds for use in providing social services. Under the executive orders, these organizations have a right to use reli- gious criteria in the selection, termination, and discipline of employees. Faith-based service providers are permitted to require applicants to be a member of a particular denomination in hiring personnel, though they are still prohibited from discriminating on the basis of race, gender, dis- ability, or national origin.

On February 5, 2009, President Obama signed Amendments to Executive Order 13199 and Establishment of the President ’s Advisory Council for Faith-Based and Neighborhood Partnerships to help address the country ’s social problems by strengthening the capacity of faith-based and commu- nity organizations. The executive order does not reverse President Bush ’s policy that allowed federal agencies to award contracts to faith-based orga- nizations that discriminate in their hiring processes based on religious sta- tus, marital status, or sexual orientation.

Age Discrimination in Employment Act of 1967

Congress enacted the Age Discrimination in Employment Act (ADEA) in 1967 to prohibit discrimination in employment because of age in matters pertaining to selection, job retention, compensation, and other terms and conditions of employment. Congress intended to promote the employ- ment of older persons based on their ability rather than age and to pro- hibit arbitrary age discrimination in employment. In 1974, the ADEA was

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amended to extend coverage to state and local government employees, as well as most federal employees.

The ADEA at that time protected workers between the ages of forty and sixty-fi ve. Employers were granted four exemptions to the act: (1) where age is a BFOQ reasonably necessary to normal operation of a particular business; (2) where differentiation is based on reasonable factors other than age; (3) to observe the terms of a bona-fide seniority system or a bona-fi de insurance plan, with the qualifi cation that no seniority system or benefi t plan may require or permit the involuntary retirement of who is covered by ADEA; and (4) where an employee is discharged or disciplined for good cause.

The ADEA was amended in 1978 by raising the upper limit to seventy years of age; that limit was removed in 1987, meaning that compulsory retirement for most jobs is now illegal. The ADEA applies to employers with twenty or more employees; unions of twenty-fi ve or more members; employment agencies; and federal, state, and local governments.

On April 1, 1996, the Supreme Court ruled in O’Connor v. Consolidated Coin Caters Corporation (1996) that an individual claiming age discrimina- tion must show a logical connection between his or her age and his or her discharge, but there is no requirement to show that the replacement for the position was under forty years old. Justice Antonin Scalia wrote that “the fact that one person in the protected class lost out to another person in the protected class is thus irrelevant, so long as he has lost out because of age.”

In 2000, the Supreme Court ruled in Kimmel v. Florida Board of Regents that the Eleventh Amendment to the US Constitution bars state employees from suing a state employer in federal court for violation of the ADEA. This ruling does not apply to local government employees or employees working for private for-profi t, nonprofi t, or federal entities.

The US Supreme Court decision in Smith v. City of Jackson (2005) held that evidence of an employment practice that is neutral on its face but has a disparate impact on older workers could be used in establishing a prima facie case of age discrimination. Defense of an ADEA claim involves show- ing that factors other than age were determining considerations.

On June 19, 2008, the Court ruled in Meacham v. Knolls Atomic Power Laboratory (2008) that the employer has the burden of proof in proving that a layoff or other action that has an adverse impact on older workers more than others was from “reasonable factors other than age,” now often referred to as RFOA.

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Pregnancy Discrimination Act of 1978

The Pregnancy Discrimination Act prohibits employment practices that discriminate on the basis of pregnancy, childbirth, or related medical con- ditions. A woman is protected from being fi red or refused a job or promo- tion because she is pregnant. She also cannot be forced to take a leave of absence as long as she is able to work.

Under the law, employers are obligated to treat pregnancy like any other disability. For example, if other employees on disability leave are entitled to return to their jobs when they are able to work again, so should women who have been unable to work due to pregnancy.

The Pregnancy Discrimination Act requires that employers provide full benefi ts coverage for pregnancy. A woman unable to work for pregnancy- related reasons is entitled to disability benefi ts or sick leave on the same basis as other employees unable to work for other medical reasons.

In 2012, the EEOC issued its Final Rule on Reasonable Factors Other Than Age under the

ADEA. Previously if an employee proved in court that an employment practice dispropor-

tionately harmed older workers, the employer had to justify it as a “business necessity.”

Employers need only to prove that the practice was based on an RFOA. An employment

practice is based on an RFOA when it was reasonably designed and administered to achieve

a legitimate business purpose in light of the circumstances. The rule emphasized the need

for an individual consideration of the facts and circumstances surrounding the particular sit-

uation. It includes the following list of considerations relevant to assessing reasonableness:

The extent to which the factor is related to the employer ’s stated business purpose

The extent to which the employer defi ned the factor accurately and applied the

factor fairly and accurately, including the extent to which managers and super-

visors were given guidance or training about how to apply the factor and avoid

discrimination

The extent to which the employer limited supervisors ’ discretion to assess employees

subjectively, particularly where the criteria that the supervisors were asked to

evaluate are known to be subject to negative age-based stereotypes

The extent to which the employer assessed the adverse impact of its employment

practice on older workers, and the degree of the harm to individuals within the

protected age group, in terms of both the extent of injury and the numbers of

persons adversely affected, and the extent to which the employer took steps to

reduce harm, in light of the burden of undertaking such steps. (EEOC, 2012b)

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States may pass their own laws requiring additional benefi ts for preg- nant employees beyond the scope of the federal law. The Supreme Court upheld a California law that required employers to provide up to four months ’ unpaid pregnancy disability leave with guaranteed reinstate- ment, even though disabled males were not entitled to the same benefi t ( California Federal Savings & Loan Association v. Guerra , 1987).

Americans with Disabilities Act of 1990 and the ADA Amendments of 2008

In 1990, Congress passed the Americans with Disabilities Act (ADA). Title I of the act provides that qualifi ed individuals with disabilities may not be discriminated against on the basis of disability in all aspects of the employ- ment relationship, from the application stage through retirement. The law took effect on July 26, 1992, for organizations of twenty-fi ve or more employees and on July 26, 1994, for organizations with fi fteen to twenty- four or more employees. Employment practices covered by ADA include job application procedures, hiring, fi ring, advancement, compensation, training, and other terms and conditions and privileges of employment.

The ADA Amendment Act (ADAAA) of 2008 was signed by President Bush on September 25, 2008, and became effective on January 1, 2009 (PL 110–325). The fi rst major revision to the act, it overturned several court decisions and parts of EEOC regulations that limited the act ’s coverage. The Equal Employment Commission issued fi nal regulations and interpretive guidelines on March 24, 2011. The ADAAA specifi cally states that all of its changes also apply to section 501 of the Rehabilitation Act (federal employ- ment), section 503 of the Rehabilitation Act (federal contractors), and sec- tion 504 of the Rehabilitation Act (recipients of federal fi nancial assistance and services and programs of federal agencies). The Equal Employment Opportunity Commission has published a fact sheet on the EEOC ’s Final Regulations implementing the ADAAA and Questions and Answers on the Final Rule Implementing the ADA Amendments Act of 2008 (www1.eeoc.gov).

The new legislation redefi nes disability so that more individuals receive protection under the law. The ADA recognized the following categories of disabilities:

• Having a physical or mental impairment that substantially limits one or more major life activities—for example, speech impediments, learning disabilities, AIDS, mental retardation, chronic mental illness, and epilepsy. Under the ADAAA, the list of major life activities for courts to consider has been expanded to include caring for oneself; performing manual tasks; seeing or hearing; eating, sleeping, walking,

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and standing; lifting and bending; speaking and breathing; learning, reading, concentrating, and thinking; and working. Major life activi- ties could also include functions of the immune system; normal cell growth; and digestive bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.

• Having a record of such an impairment. This could include people who have recovered from a heart attack, cancer, back injuries, or men- tal illness.

• Being regarded as having an impairment. This would include individ- uals who are perceived as having a disability, such as individuals sus- pected of having the HIV virus.

Under the ADAAA, the phrase substantially limits is to be viewed broadly, and an impairment that is episodic or in remission must be considered a disability as long as that impairment in its active state would be substantially limiting.

The ADAAA clarifi es that the determination of whether an individual has a disability is to be made without taking into account the ameliorative effects of any mitigating measures such as medication, medical supplies, equipment, or appliances. It prohibits courts from considering mitigat- ing measures such as medication, prosthetics, and assistive technology in determining whether an individual is disabled. Prescription eyeglasses and contact lenses are excluded and may be considered when assessing whether an individual is “substantially limited” in a major life activity.

To be considered qualifi ed under ADA, an individual must be able to perform the “essential functions of the position,” meaning that he or she must satisfy the prerequisites for the position and be able to perform the essential functions of the job with or without reasonable accommodation.

Employers must provide those who are disabled with reasonable accommodations that do not place an undue hardship on the organiza- tion. Undue hardship is defi ned as an adjustment related to an employer ’s operation, fi nancial resources, and facilities that require signifi cant dif- fi culty or expense. Undue hardship and reasonable accommodation are to be determined on a case-by-case basis, taking into account such mat- ters as the size of the organization, the number of employees responsible for a particular job or tasks, and the organization ’s ability to afford the accommodation.

Accommodations may include interventions such as reassignment, part- time work, and fl exible schedules, as well as modifi cations in equipment

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and the work environment, such as acquiring a special telephone headset or larger computer screen or moving a training workshop to a location accessible to wheelchairs.

In 2001, the US Supreme Court, using the reasoning to that in Kimmel , ruled that the Eleventh Amendment to the US Constitution bars state employees from suing their state employer for alleged violations of the ADA ( Board of Trustees of the University of Alabama v. Garrett , 2001). This case, like the Kimmel decision, limits state employer liability and also limits con- gressional authority to implement antidiscrimination regulations in state government.

In a January 2012 unanimous US Supreme Court decision, the Court held for the fi rst time that religious employees of a church cannot sue for employment discrimination under the ADA ( Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission et al., 2012). Cheryl Perich was a teacher at the Lutheran school and was fi red after she pursued an ADA claim based on narcolepsy. The justices noted that she was a “called teacher,” responsible for religious instruction and attending chapel, and not a “lay teacher,” and therefore fell under the “ministerial exception” to employment discrimination laws.

Immigration Reform and Control Act of 1986, as Revised in 1990

Under the Immigration Reform and Control Act (IRCA), it is illegal for employers to discriminate in respect to hiring, fi ring, or recruitment or referral for a fee based on an individual ’s citizenship or immigration status unless required to do so by law, regulation, or government contract. It also prohibits employers from preferring to hire temporary visa holders or undocumented workers over qualifi ed US citizens or other protected individuals, such as refugees or individuals granted asylum.

The IRCA requires employers to verify the identity and employment eligibility of all employees by completing the Employment Verifi cation (I-9) Form, and reviewing documents showing the employee ’s identity and employment authorization. Because of potential claims of illegal discrimination, employment eligibility verifi cation should be conducted after an offer to hire has been made. The Equal Employment Opportunity Commission recommends that applicants be informed of the requirements in the preemployment setting by adding the following statement on the employment application: “In compliance with federal law, all persons hired will be required to verify identity and eligibility to work in the United States and to complete the required employment verifi cation document form upon hire” (www.eeocc.gov).

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Civil Rights Act of 1991

The Civil Rights Act of 1991 (CRA) was passed by Congress on November 7, 1991, and signed into law by President George H. W. Bush on November 21, 1991. It provides additional remedies to protect against and deter unlawful discrimination and harassment in employment and to restore the strength of federal antidiscrimination laws that many felt had been weak- ened by several Supreme Court decisions.

The CRA amends five civil rights statutes: Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination Act of 1967, the Civil Rights Act of 1866, and the Civil Rights Attorney ’s Fee Awards Act of 1976. In addition, three new laws were created: section 1981A of Title 42 of the US Code, the Glass Ceiling Act of 1991, and the Government Employee Rights Act of 1991. Compensatory and punitive damages were made available to the victims of private and nonprofi t employers. Public employees are now entitled to only compen- satory damages. There is a cap on damages permitted under the law that is determined by the number of workers employed by an organization.

The CRA extended the application of Title VII and the ADA to US cit- izens working abroad for US-based employers. It also extended the appli- cation of Title VII, the ADA, and the ADEA to previously unprotected Senate employees, allowing them to redress employment discrimination claims through internal procedures and a limited right of appeal in federal court.

Family and Medical Leave Act of 1993

The Family and Medical Leave Act (FMLA) was signed by President Bill Clinton shortly after his inauguration in January 1993 and took effect on August 5 of that year. It applies to all public agencies, including state, local, and federal employers; educational institutions; business entities engaged in commerce or in an industry affecting commerce; and private sector employers who employ fi fty or more employees in twenty or more work- weeks in the current or preceding calendar year, including joint employers and successors of covered employers.

Family and medical leave is available as the result of the birth or adop- tion of a child or the placement of a child for foster care; to care for a spouse, child, or parent with a serious health condition; or to accommo- date the disabling illness of the employee. To be eligible for the leave, an employee must have worked for at least twelve months and at least 1,250 hours during the year preceding the start of the leave.

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The law requires employers to maintain coverage under any group health plan under the condition that coverage would have been provided if no leave was taken. When the leave ends, employees are entitled to return to the same job they held before going on leave or to equivalent positions. An equivalent position is defi ned as a position having the same pay, bene- fi ts, and working conditions and involves the same or substantially similar duties and responsibilities. Employees must be restored to the same or a geographically proximate work site.

Not all employees are eligible for leave under FMLA. An employee who qualifies as a key employee may be denied restoration to employ- ment. A key employee is salaried and is among the highest-paid 10 per- cent of the employees at the work site. Employees must be notifi ed by the employer of their status as a key employee if there is any possibility that the employer may deny reinstatement. Employees are required to give thirty days ’ advance notice of the need to take family and medical leave when it is foreseeable for the birth of a child, the placement of a child for adoption or foster care, or planned medical treatment. When it is not pos- sible to provide such notice, employees must give notice within one or two business days of when the employee learns of the need for leave.

Employers can require medical certifi cation from a health care pro- vider to support leave requests. Employees who are denied leave or rein- statement at the end of leave in violation of the law may fi le a complaint with the Department of Labor. Employees may also fi le a private lawsuit against the employer to obtain damages and other relief.

The FMLA does not supersede any state or local law that provides greater family or medical leave rights. Employers covered by both fed- eral and state laws must comply with both. In Nevada Department of Human Resources v. Hibbs (2003), the Supreme Court upheld the right of state employees to sue their employers (state governments) in federal court for alleged violations of the FMLA.

On January 28, 2008, President George W. Bush signed into law the National Defense Authorization Act of 2008, which expands FMLA for mil- itary families. An employee may take up to twelve weeks of unpaid FMLA leave for any qualifying exigency related to a spouse, son, daughter, or parent ’s active duty or notifi cation of an impending call or order to active duty in the US armed forces in support of a contingency operation. Also, an employee who is the spouse, son, daughter, parent, or next of kin of a covered service member is entitled to twenty-six workweeks of leave during a twelve-month period to care for the service member. The leave is avail- able during a single twelve-month period. Other changes concern how

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employees notify employers about FMLA leave and how employers certify the leave.

The Family and Medical Leave Act National Defense Authorization Act for FY 2010 Amendments were signed into law on October 28, 2009, by President Obama (PL 111–84, section 565). These amendments expand the military family leave provisions added to the FMLA in 2008. The 2010 NDAA amendments to the FMLA provide that an eligible employee may take FMLA leave for any qualifying exigency arising out of the fact that the employee ’s spouse, son, daughter, or parent is on (or has been notifi ed of an impending call to) covered active duty in the armed forces. The 2010 NDAA also expands the military caregiver leave provi- sions of the FMLA. Military caregiver leave entitles an eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered ser- vice member to take up to twenty-six workweeks of FMLA leave in a single twelve-month period to care for a covered service member with a “serious injury or illness.”

Under the 2010 NDAA amendments, the defi nition of covered service member is expanded to include a veteran “who is undergoing medical treat- ment, recuperation, or therapy for a serious injury or illness” if the veteran was a member of the armed forces “at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.” In addition, the 2010 NDAA amends the FMLA ’s defi nition of a “serious injury or illness.”

On June 22, 2010, the US Department of Labor issued an Administrator ’s Interpretation Letter expanding the protections of the FMLA to require employers who are subject to FMLA to provide gay and lesbian employees unpaid time off to care for newborns or a nonadoptive, nonbiological child with a serious health condition. (Additional information on the FMLA is available at www.dol.gov/whd/fmla.)

Table 3.1 presents federal statutes related to equal employment oppor- tunity statutes in the United States, and table 3.2 presents examples of antidiscrimination laws in other countries. Which countries have greater nondiscrimination protections?

Proving Employment Discrimination

Cases of alleged discrimination in violation of federal or state statutes can be made under one of two theories: disparate impact and disparate treatment.

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Federal Equal Employment Opportunity Laws 83

Statute Provisions

Civil Rights Act of 1866 Prohibits intentional discrimination based on race and ethnicity.

Civil Rights Act of 1871 Allows individuals to sue state actors in state or federal courts for civil rights violations. This act prohibits public sector employment discrimination based on race, color, religion, sex, or national origin.

Equal Pay Act of 1963 Protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination.

Civil Rights Act of 1964, Title VII

Prohibits employers from discrimination against employees in hiring, promotion, and termination decisions based on race, color, religion, sex, or national origin.

Age Discrimination in Employment Act of 1967, as amended

Protects workers age forty and over in hiring, promotion, and termination decisions.

Rehabilitation Act of 1973 Makes it unlawful to discriminate against an otherwise quali- fi ed individual with a disability because of that disability.

Vietnam Era Veterans ’ Readjustment Act of 1974, as amended

Requires that employers with federal contracts or subcon- tracts of $25,000 or more provide equal opportunity and affi rmative action for Vietnam-era veterans, special disabled veterans, and veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized (http://www.dol.gov/ofccp /regs/compliance/fsvevraa.htm).

Pregnancy Discrimination Act of 1978

Prohibits discrimination on the basis of pregnancy, child- birth, or related medical conditions.

Immigration Reform and Control Act of 1986

Makes it illegal for employers to discriminate with respect to hiring, fi ring, or recruitment or referral for a fee based on an individual ’s citizenship or immigration status unless required to do so by law, regulation, or government contract.

Americans with Disabilities Act of 1990 and the ADA Amendments Act of 2008

Prohibits employment discrimination against qualifi ed indi- viduals with disabilities.

Civil Rights Act of 1991 Provides the right to trial by jury and emotional distress damages for discrimination claims.

Family and Medical Leave Act of 1993 and the National Defense Authorization Act of 2008

Requires employers of fi fty or more employees and all public agencies to provide up to twelve weeks of unpaid leave to eligible employees for the birth and care of a child, adoption and placement of a child, or serious illness of the employee or an immediate family member. The National Defense Authorization Act of 2008 expands the Family and Medical Leave Act for military families.

(Continued )

Table 3.1. Federal Statutes Related to Equal Employment Opportunity

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Statute Provisions

Uniformed Services Employment and Reemployment Rights Act of 1994

Protects the employment rights of National Guard and Reserve members called to active duty.

Genetic Information Nondiscrimination Act of 2008

Prohibits discrimination against employees or applicants because of genetic information, which includes information about an individual ’s genetic tests and the genetic tests of an individual ’s family members, as well as information about any disease, disorder or condition of an individual ’s family members (i.e. an individual ’s family medical history) (EEOC, 2013).

Table 3.1. (Continued)

Disparate Treatment

Disparate treatment occurs when an employer treats an employee of a pro- tected class differently from a nonprotected class employee in a similar situation. For example, deliberately using different criteria for selection depending on the candidate ’s sex or race would constitute disparate treat- ment, as when an employer asks female applicants but not male applicants questions about their marital status or child care arrangements or requires African American applicants to take preemployment tests that other appli- cants applying for the same positions are not required to take.

Factors to be reviewed were fi rst set forth in McDonnell Douglas v. Green (1973):

1. The applicant or employee is a member of a class protected by the statute alleged to be violated (sex, race, age, national origin).

2. The applicant or employee applied for the vacancy and is qualifi ed to perform the job.

3. Although qualifi ed, the applicant or employee was rejected. 4. After rejection, the vacancy remained, and the employer continued

to seek applications from persons of equal qualifi cation.

The Supreme Court established that in disparate treatment cases, the burden is on the plaintiff to prove that the employer intended to discriminate because of race, sex, color, religion, or national origin. In St. Mary’s Honor Center v. Hicks (1993), the Court ruled that in addition to showing that all of the employer ’s legal reasons are false, an employee must

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Antidiscrimination Criteria Covered by Law

A u

st ri

B e lg

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C an

ad a

Fr an

G e rm

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It al

N e th

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it e d

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d o

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te s

Age XX XX XX XX XX XX XX XX XX ! XX XX

Color XX XX

Disability/handicap XX XX XX XX XX XX XX XX XX XX XX XX ! XX XX

Ethnicity XX XX XX XX XX XX ! XX

Family status/name XX XX XX* XX +

Gender/sex XX XX XX XX XX XX XX XX XX XX XX X XX XX XX

Health status XX XX XX XX

Language XX XX XX XX

Nationality XX XX XX

National origin/birth XX XX XX XX XX XX XX

Physical or genetic features

XX XX XX

Pregnancy XX XX XX XX

Political affi liation or belief

XX XX XX XX XX

Race XX XX XX XX XX XX XX XX XX XX

Table 3.2. International Comparison of Antidiscrimination Criteria Covered by Law

(Continued )

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Antidiscrimination Criteria Covered by Law

A u

st ri

B e lg

iu m

C an

ad a

Fr an

G e rm

an y

In d

It al

N e th

e rl

an d

P ak

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S in

g ap

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S o

u th

A fr

ic a

S w

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S w

it ze

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Tu rk

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U n

it e d

in g

d o

U n

it e d

S ta

te s

Religion or belief XX XX XX XX XX XX XX XX XX XX XX ! XX XX

Sexual orientation XX XX XX XX XX XX XX XX ! XX

Status of a war veteran XX

Transgender identity XX

Union activity XX XX XX

Note: Additional criteria: Belgium also includes “Civil Status,” “Property,” and “Social Background in Employment Relations.” France includes “demeanors.” Italy includes “Personal Circumstances” and “Economic Treatment.” The Netherlands includes “Marital Status,” “Labor Contracts,” and “Work Hours.” Source: Table adapted from Klarsfeld, A. (Ed.). (2010). International handbook on diversity management at work: Country perspectives on diversity and equal treatment . Northhampton, MA: Elgar. See individual chapters for specifi c country information.

Table 3.2. (Continued)

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prove that the employer was motivated by bias and show direct evidence of discrimination. In Reeves v. Sanderson Plumbing Products , Inc . (2000), the Supreme Court held that “[a] plaintiff ’s prima facie case of discrim- ination, combined with suffi cient evidence for a reasonable factfi nder to reject the employer ’s nondiscriminatory explanation for its decision, may be adequate to sustain a fi nding of liability for intentional discrimination under the ADEA.” The ruling means that an employer is liable to a former employee under the Age Discrimination in Employment Act of 1967 if a reasonable jury can fi nd that the employer ’s explanation for the employ- ee ’s dismissal was pretext for discrimination.

Disparate Impact

Disparate impact occurs when an employer ’s policy or practice, neutral on its face and in its application, has a negative effect on the employment opportunities of protected-class individuals. Neutral means that the employer requires all applicants or employees to take the same examination or pos- sess the same qualifi cations for the positions. Unlike the examples provided under disparate treatment, in which the employer deliberately treated males and females or black and white applicants and employees differently, under disparate impact all applicants and employees are treated the same but pro- tected-class members are not hired or promoted. Such impact is illegal if the employment practice is not job related or is unrelated to the employment in question. For example, if an agency hired fi fty whites and no Hispanics from one hundred white and one hundred Hispanic applicants, disparate impact has occurred. Whether the employer had good intentions or did not mean to discriminate is irrelevant to the courts in this type of lawsuit. After the plaintiff shows evidence of disparate impact, the employer must carry the burden of producing evidence of business necessity or job relatedness for the employment practice. Finally, the burden shifts back to the plaintiff, who must show that an alternative procedure is available that is equal to or better than the employer ’s practice and has a less discriminatory effect.

The Uniform Guidelines on Employee Selection Procedures were jointly adopted in 1978 by the EEOC, the US Civil Service Commission, the Department of Labor, and the Department of Justice. Although they are not administrative regulations, they are granted deference by the courts. Their purpose is to provide a framework for determining the proper use of tests and other selection procedures. They are applicable to all employers: federal, state, local, nonprofi t, and private.

The Uniform Guidelines and many courts have adopted the four- fi fths rule as a yardstick for determining disparate impact: a selection rate,

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determined by the number of applicants selected divided by the number who applied, for a protected group should not be less than four-fi fths, or 80 percent, of the rate for the group with the highest selection rate.

Disparate impact theory has been used in many cases involving neutral employment practices such as tests, entrance requirements, and physical requirements. In 1988, the Supreme Court extended use of the disparate impact theory in cases involving subjective employment practices such as interviews, performance appraisals, and job recommendations ( Watson v. Fort Worth Bank and Trust , 1988). Statistical data based on the four-fi fths rule can be used in a disparate impact case to establish prima facie evidence of dis- crimination when decisions are based on subjective employment practices.

Executive Orders, Affi rmative Action, and Other Federal Laws

This section explains affi rmative action and the requirements imposed on employers through Executive Orders 11246 and 11375, the Rehabilitation Act of 1973, the Vietnam Era Veterans’ Readjustment Act of 1974, and chapter 4 briefl y discusses equal employment opportunity and the executive orders and federal laws that require employers to engage in affi rmative action.

Executive Orders 11246 and 11375

In 1965, President Johnson signed Executive Order 11246, which prohibited discrimination in federal employment or by federal contractors on the basis of race, creed, color, or national origin. In 1967, it was amended by Executive Order 11375 to change the word creed to religion and to add sex discrimina- tion to the other prohibited items. The executive order applies to all federal agencies, contractors, and subcontractors, including all the facilities of the agency holding the contract. Contractors and subcontractors with more than fi fty thousand dollars in government business and fi fty or more employ- ees are not only prohibited from discriminating, but must also take affi rmative action to ensure that applicants and employees are not treated differently as a function of their sex, religion, race, color, or national origin. The order authorizes the cancellation of federal contracts for failure to meet the order ’s guidelines. It requires a contractor to post notices of equal employment opportunity and document its compliance to the US Department of Labor.

Executive Order 11246 is enforced by the Department of Labor through the Offi ce of Federal Contract Compliance Programs (OFCCP), a branch of the Department of Labor ’s Employment Standards Administration.

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It promulgates guidelines and conducts audits of federal contractors to ensure compliance with the executive orders. The OFCCP is charged with processing complaints as well as compliance review. It reviews complaints and can visit an employer ’s work site and review the affirmative action plans for compliance with the law. Minority availability is measured by the portion of qualifi ed applicants (actual or potential) who are minorities. OFCCP defi nes underutilization as fewer minorities or women in a particular job group than would reasonably be expected by their availability. When a job group is identifi ed as underused, the contractor must set goals to correct the underuse. The goals for each underused group, together with the utilization analysis, become part of the written affi rmative action plan. A federal contractor must monitor information about the status of employ- ees when creating and using an affi rmative action plan. The employer must demonstrate that its employment practices comply with Executive Order 11246 and the OFCCP ’s guidelines by documenting employment decisions on hiring, termination, promotion, demotion, and transfer.

If noncompliance is found, the OFCCP generally fi rst tries to reach a conciliation agreement with the employer. Special hiring or recruit- ment programs, seniority credit, or back pay may be some of the provi- sions included in the agreement. If an agreement cannot be reached, the employer is scheduled for a hearing with a judge. If an agreement is still not reached during this time, employers may lose their government contracts or have their payments withheld. They may also lose the right to bid on future government contracts or be barred from all subsequent contract work.

While equal employment opportunity is a legal duty, affi rmative action can be voluntary or involuntary. Although Executive Order 11246 applies only to organizations receiving federal funds, many public and nonprofi t organizations have decided to implement voluntary affi rmative action pro- grams to redress previous discriminatory employment practices or make their workforce more representative. Involuntary affi rmative action is permitted under the Civil Rights Act of 1964, section 706(g), which states that if a court fi nds that an employer has intentionally engaged in an unlawful employment practice, it may order appropriate affi rmative action. Affi rmative action is not required unless the employer has adopted the plan as a remedy for past discrimination or must comply with an executive order requiring affi rmative action as a condition of federal or state agencies doing business with the government. Employers who are not the recipients of government contracts may be forced to develop affi rmative action plans if an investigation by a state or federal compliance agency fi nds that an employer ’s personnel practices discriminate against protected-class members.

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There are three types of involuntarily affi rmative action plans, pre- sented here in order from least restrictive to most restrictive:

• Conciliation agreement. After an investigation by a compliance agency, the employer may acknowledge there is merit to the allegation of dis- criminatory employment practices and agree to change its practices to comply with the recommendations of the compliance agency.

• Consent decree. A consent decree is an agreement between an employer and a compliance agency negotiated with the approval of a court and is subject to court enforcement.

• Court order. Court orders result if a compliance agency must take an employer to court because neither a conciliation agreement nor a consent decree can be agreed on. If the court fi nds the employer guilty of discrimination, the judge may impose court-ordered rem- edies. These can include hiring or promotion quotas, changes in personnel practices, and fi nancial compensation for the victims of discrimination.

The Rehabilitation Act of 1973

The Rehabilitation Act prohibits discrimination on the basis of physical or mental disability. A disabled person is defi ned as one who has an impair- ment that affects a major life activity, has a history of such an impairment, or is considered as having one. Major life activities refer to functions such as seeing, speaking, walking, and caring for oneself. Disabled individuals also applies to those with mental disabilities and may include those with illnesses making them unfi t for employment, such as contagious diseases or other conditions (tuberculosis, heart disease, cancer, diabetes, drug dependency, or alcoholism, for example). The Supreme Court ruled in Arline v. School Board of Nassau County (1987) that individuals with conta- gious diseases who are able to perform their jobs are protected by the Rehabilitation Act of 1973. It stated that the assessment of risks cannot be based on “society ’s accumulated myths and fears about disability and disease.” Most states have similar laws protecting disabled workers from discrimination.

Section 501 of the Rehabilitation Act requires the federal government, as an employer, to develop and implement affirmative action plans on behalf of disabled employees. Congress enacted this provision with the expectation that the federal government would serve as a model for other employers.

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Section 503 requires all federal contractors or subcontractors receiv- ing funds over twenty-fi ve hundred dollars to take affi rmative action for the employment of qualifi ed disabled persons. Enforcement is carried out by the Department of Labor ’s Employment Standards Administration. Under the Rehabilitation Act, as under the ADA of 1990, a disabled per- son is considered qualifi ed for a job if an individual analysis determines that he or she can, with reasonable accommodation, perform the essential functions of the job. Employers must make such accommodations unless it can be shown that the accommodation would pose an undue hardship on the fi rm.

Section 504 prohibits federally funded programs and government agencies from excluding from employment an “otherwise qualifi ed hand- icapped individual . . . solely by reason of handicap.” The enforcement of section 504 rests with each federal agency providing fi nancial assistance. The US attorney general is responsible for coordinating the enforcement efforts of the agencies.

Believing that qualifi ed individuals with disabilities are underrepresented in the federal

government workforce, President Obama signed Executive Order 13548, Increasing

Federal Employment of Individuals with Disabilities, on July 26, 2010.

The Vietnam Era Veterans ’ Readjustment Act of 1974

The Vietnam Era Veterans ’ Readjustment Act of 1974, as amended, applies to employers with government contracts of twenty-fi ve thousand dollars or more. Contractors are required to take affi rmative action to employ and advance disabled veterans and qualifi ed veterans of the Vietnam era. Enforcement of the act is by compliance to the Veterans ’ Employment and Training Service of the Department of Labor.

Uniformed Services Employment and Reemployment Rights Act of 1994

On October 12, 1994, President Clinton signed the Uniformed Services Employment and Reemployment Rights Act (USERRA), which became effective December 12, 1994. Employees have a right to be reemployed in their civilian job if they leave their employer to be in the uniformed services, assuming certain requirements have been met (www.dol.gov/vets /programs/fact/userra_vets03.htm).

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92 Human Resources Management for Public and Nonprofi t Organizations

The Genetic Information Nondiscrimination Act of 2008

President Bush signed the Genetic Information Nondiscrimination Act on May 22, 2008. The act prohibits employers from discriminating against employees or applicants on the basis of genetic information and bans the collection of genetic information except in limited circumstances. Genetic information includes information about an individual ’s genetic tests and the genetic tests of an individual ’s family members, as well as information about any disease, disorder or condition of an individual ’s family members or family medical history (EEOC, 2011).

◆ ◆ ◆

Refer to table 3.1 for a summary of the statutory laws discussed through- out this chapter.

In Staub v. Proctor Hospital (March 1, 2011), the US Supreme Court ruled in favor of a

US Army reservist fi red from his job at the hospital because the facts showed that his

supervisors ’ hostility to his military service was a motivating factor in the termination.

Vincent Staub ’s supervisor and his supervisor ’s supervisor were hostile to Staub ’s military

obligations, which included one weekend a month and two to three weeks of training

each year. The human resources vice president fi red Staub. The hospital argued it could

not be liable for the actions of its supervisors because the vice president was not biased

and was the ultimate decision maker.

The court ruled, “If a supervisor performs an act motivated by antimilitary ani-

mus that is intended by the supervisor to cause an adverse employment action, and

if that act is a proximate cause of the ultimate employment action, then the employer is

liable under USERRA.” Because the supervisors were hostile to Staub ’s service and sought

to terminate him and the vice president acted on their reports, the hospital is liable for

the violation of USERRA. This association referred to the cat ’s paw theory of liability. In

discrimination cases, cat’s paw refers to a decision maker who lacks an unlawful bias but

bases the adverse employment decision on the infl uence of another with such a bias.

The term cat’s paw is derived from the fable “The Monkey and the Cat” by Jean de

La Fontaine (1621–1695). In the tale, a clever and unscrupulous monkey persuades an

unsuspecting cat to snatch chestnuts from a fi re. The cat burns her paw in the process

while the monkey profi ts, gulping down the chestnuts one by one. As understood today,

a cat ’s paw is a “tool” or “one used by another to accomplish his purposes” ( Webster’s

Third New International Dictionary , 1976).

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Affi rmative Action

Many statutes, executive orders, court decisions, and administrative regu- lations exist that prohibit employment discrimination due to race, color, sex, national origin, religion, or disability. Employment decisions are to be based on merit and job-related qualifi cations, not on membership in a certain classifi cation. Equal employment opportunity requires employers not to discriminate in the administration and execution of all HRM prac- tices such as recruitment, selection, promotions, training, compensation, career development, discipline, and labor-management relations. In pass- ing the laws, Congress assumed that outlawing deliberate discrimination and punishing employers found guilty of unfair practices would eradicate the vestiges of years of discrimination.

Although passage of these laws meant that overt discrimination was no longer tolerated, women and minorities were still underrepresented in the workforce. A more assertive strategy was needed to correct for past and existing discrimination. That strategy was affi rmative action. Executive Order 11246 states, “An affi rmative action program is a set of specifi c and results-oriented procedures to which the contractor commits itself to apply in a good faith effort.” The objective of those procedures plus such efforts is equal employment opportunity.

In 1965, President Johnson signed Executive Order 11246, which pro- hibits discrimination in federal employment on the basis of race, creed, color, or national origin. In 1967, this order was amended by Executive Order 11375, in which the word creed was changed to religion , and sex dis- crimination was added to the list of prohibited types. The executive order applied to all federal agencies, contractors, and subcontractors, including all of the facilities of the agency holding the contract, regardless of the loca- tion at which the work is conducted. Contractors and subcontractors with more than fi fty thousand dollars in government business and fi fty or more employees are not only prohibited from discriminating, but must also take affi rmative action to ensure that applicants and employees are not treated differently because of their sex, religion, race, color, and national origin. Executive Order 11478 states that the policy of the US government is “to provide equal opportunity in federal employment for all persons, to pro- hibit discrimination because of race, color, religion, sex, national origin, handicap, or age, and to promote the full realization of equal employment opportunity through a continuing affi rmative program in each executive department and agency.”

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Two executive orders were issued in 2000. Executive Order 13116 requires federal agencies to examine services and prepare a plan to “improve access to federally conducted and federally assisted programs and activities for persons who, as a result of national origin, are limited in their English profi ciency.” Executive Order 13171 requires the head of each executive department and agency to establish and maintain a pro- gram for the recruitment and career development of Hispanics in fed- eral employment. The Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Act of 1974 also require federal contractors or subcontractors to take affi rmative action for the employment and advance- ment of qualifi ed disabled persons and veterans, and qualifi ed veterans.

Affi rmative action has often been interpreted and criticized as requir- ing the implementation of quotas regardless of individuals ’ qualifi cations and ability to perform a job. In reality, affi rmative action may refer to sev- eral strategies, including active recruitment of groups underrepresented in an organization, eliminating irrelevant employment practices that bar pro- tected groups from employment, and, the most controversial one, granting preferential status to protected groups. The effectiveness of affi rmative action is represented by the extent to which employers make an effort through their SHRM practices to attract, retain, and upgrade members of protected classes as a condition of doing business with the government.

Critics of affi rmative action claim it results in reverse discrimination and that the costs of complying with its guidelines are too expensive. Claims of reverse discrimination suggest that special advantages or preferential treat- ment given to women and minorities promote unfair treatment against white males and are thus still discrimination. A second argument against affi rma- tive action is that the costs associated with complying with the regulations are high and that compliance results in lower productivity because of a less-qualifi ed workforce. However, there is little evidence to validate these arguments (Kellough, 2006; Pincus, 2003).

Although the executive orders, the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Act apply only to the recipients of federal funds, many organizations have decided to implement voluntary affi rmative action programs to redress previous discriminatory employment practices or to make their workforce more representative of the constituents or clients they serve. Whereas equal employment opportunity is a policy of nondiscrimination, affi rmative action requires employers to analyze their workforces and develop plans of action to recruit, select, train, and pro- mote members of protected classes and develop plans of action to correct areas in which past discrimination may have occurred. Affi rmative action

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in the United States is jointly determined by the Constitution, legislative acts, executive orders, and court decisions. The Offi ce of Federal Contract Compliance Programs is responsible for developing and enforcing most affirmative action plans, although the Equal Employment Opportunity Commission enforces affi rmative action plans in the federal sector.

The federal government uses affi rmative action to promote a more diverse workforce. Recipients of federal funds are required to develop affi r- mative action plans that encourage the recruitment, selection, training, and promotion of qualifi ed disabled individuals, war veterans, and individ- uals who may have been discriminated against because of their race, sex, color, or national origin. Affi rmative action plans can be involuntary or voluntary. Involuntary action plans have increasingly come under intense scrutiny, and affi rmative action itself is being challenged. On April 1, 2003, the Supreme Court heard arguments challenging the use of race in the admissions policies at the University of Michigan and its law school ( Gratz v. Bollinger , 2003, and Grutter v. Bollinger , 2003, respectively).

Major corporations, including Microsoft, Bank One, General Motors, Shell, and American Express, and the Army, Navy, and Air Force acade- mies, fi led briefs supporting the University of Michigan ’s race-conscious admissions policies. Supporters of using race as one of many factors in the admissions process believe that diversity creates stronger organizations. On June 23, 2003, the Supreme Court upheld the affi rmative action plan of the law school. Justice Sandra Day O ’Connor, writing for the majority, which included Justices Stephen G. Breyer, John Paul Stevens, Ruth Bader Ginsburg, and David H. Souter, stated:

The hallmark of the law school ’s policy is its focus on academic ability coupled with a fl exible assessment of applicant ’s talents, experiences and potential “to contribute to the learning of those around them.” . . . The policy aspires to “achieve that diversity which has the potential to enrich everyone ’s education and thus make a law school class stronger than the sum of its parts.” . . . We have held that all racial classifi cations imposed by the government “must be analyzed by a reviewing court under strict scrutiny.” This means that such classifi cations are constitutional only if they are narrowly tailored to further compelling governmental inter- ests . . . To be narrowly tailored, a race-conscious admissions program cannot use a quota system . . . Instead a university may consider race or ethnicity more fl exibly as a “plus” factor in the context of individualized consideration of each and every applicant . . . The Law School engages in a highly individualized, holistic review of each applicant ’s fi le, giving

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serious consideration to all the ways an applicant might contribute to a diverse educational environment . . . In order to cultivate a set of leaders with legitimacy in the eyes of the citizenry, it is necessary that the path to leadership be visibly open to talented and qualifi ed individuals of every race and ethnicity.

In Gratz , however, the Court found the University of Michigan ’s under- graduate affi rmative action admission program unconstitutional. Chief Justice William Rehnquist, writing for the majority, stated, “The university ’s policy which automatically distributes 20 points, or one-fi fth of the points needed to guarantee admission, to every single underrepresented minor- ity applicant solely because of race, is not narrowly tailored to achieve the interest in the educational diversity.” In essence, the Court ruled that race and ethnicity may be taken into account as a plus factor when making admission decisions but limited how much a factor race can play in the selection of students.

Several other federal court decisions concerning affi rmative action have been especially important. One case addressed affi rmative action and the granting of federal contracts, and the second case dealt with affi rmative action and law school admission policies.

In Adarand Constructors v. Pena (1995), the Supreme Court ruled that federal programs that use race or ethnicity as a basis for decision making must be strictly scrutinized to ensure that they promote compelling govern- ment interests and are narrowly tailored to serve those interests. Federal affi rmative action programs giving preferences to minorities are subject to the same strict scrutiny applied to state and local programs.

In Hopwood et al . v. State of Texas et al . (1996), the Fifth Circuit Court of Appeals struck down the University of Texas Law School affi rmative action program, which viewed minority and white applicants for admission separately, resulting in an unconstitutional quota system. The court ruled that racial diversity can never be a compelling government interest and that racial diversity “may promote improper racial stereotypes, thus fueling racial hostility.”

At the time of writing, Fisher v. University of Texas at Austin is before the US Supreme Court. Abigail Fisher and another woman fi led a lawsuit when they were denied admission to the University of Texas at Austin. They contend that the university ’s race-conscious policy violated their civil and constitutional rights. Most freshmen entering the university are among the top 10 percent in their high school class. Fisher ’s grades were not that high. For the remaining openings, Texas allows the consideration of race with

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other factors. Texas claims its policy does not use quotas and complies with previous US Supreme Court rulings and relies on a holistic approach to ensure a diverse student body. A federal appeals court upheld the Texas pro- gram saying it complies with the 2003 US Supreme Court ruling in Grutter that upheld race as one of many factors in considering admission to the University of Michigan law School ( Fisher v. University of Texas at Austin , 2011).

At this time, the Supreme Court has upheld the use of court-ordered affi rmative action programs designed to eliminate egregious past discrim- ination ( United States v. Paradise , 1986) and voluntary affi rmative action plans designed to increase the representation of women and minorities in nontraditional jobs or in traditionally segregated positions ( Johnson v. Santa Clara Transportation Agency , 1987; United Steelworkers of America v. Weber , 1979). Voluntary affi rmative action plans are permitted as long as they meet four conditions: (1) the affi rmative action plan is temporary, (2) it is undertaken to eliminate manifest racial imbalance, (3) it is for nontraditional jobs or traditionally segregated job categories, and (4) it does not require the dis- charge of white workers or create an absolute bar to their advancement.

The Supreme Court has not upheld the use of racial quotas when race serves as the only criterion for admission to universities and advanced grad- uate programs ( Regents of the University of California v. Bakke , 1978) or when race is used to abrogate seniority systems in layoffs. Hiring and promo- tional preferences may be permissible to redress past discrimination but not layoffs ( Firefi ghters Local 1784 v. Stotts , 1984; Wygant v. Jackson Board of Education , 1986).

Constitutional Rights

Public employees have a broad array of constitutional protections that differentiate public employment from employment in the nonprofi t and for-profi t sectors. Public sector employees ’ rights and privileges to work are to some extent protected by a broad umbrella of laws that either prohibit a government activity or create an individual right. Many of the constitutional protections afforded to public sector employees were orig- inally enacted to protect free citizens from arbitrary government action in the areas of privacy, expression, association, contracts, and property. Since public sector employees work for the government, the protections are extended to them by operation of the employment relationship.

Many of the rights under the US Constitution are limitations on Congress and the states to exercise certain actions against the citizens and

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employees. However, these constitutional limitations are not self-executing and therefore must be enforced through the Civil Rights Act of 1871. In the public sector employment arena, it is important to note that 42 USC 1983 is the enforcement vehicle of the other constitutional rights and allows damages only against persons who act “under the color of law,” that is, the government, where the government actor subjects any person to a depriva- tion of any rights, privileges, or immunities secured by the US Constitution or the laws of the United States. Therefore, where a public sector employer is “acting under the color” within the employment relationship or otherwise deprives employees of certain constitutional rights, a cause of action against the employer or other employees may be available to protect the “rights” afforded. However, the employer may be held liable only where it has a pol- icy, practice, or custom that deprives the employee of the right.

Today it is unlikely that employers have written policies that on their face would be a violation of the Constitution. However, many employment actions arise through incorrect policy implementation or in violation of the Constitution through supervisory personnel who deprive employees of their constitutional rights, which gives rise to individual or, in some cases, employer liability. The legal concept of respondeat superior (“let the mas- ter answer”) is generally not available under constitutional claims to hold the employer liable for nonsanctioned offi cial actions of its employees.

Expressive Rights

The First Amendment to the US Constitution protects public employees against unwarranted employer interference with their freedom of speech, expression, association, and religion. It also protects the right of public employees to join a labor union or advocate the joining of associations, the right to speak out on matters of public concern, the right of access to a public employer ’s property, and freedom from religious discrimination.

Prior to 2006, the prevailing legal theory under the First Amendment was that the interests of public employees in free speech were balanced against the interests of the state, as employer, in promoting the effi ciency of the public services it performs through its employees. There needs to be a balance between the interest of a public sector employee, as a citizen, in commenting on issues of public concern and the interests of the state, as an employer, in promoting the effi ciency of its public services via its employees. If the disciplined employee did engage in speech protected by the First Amendment through the balancing of interests, the discipline could still be upheld if the employer could show that the employee would have been disciplined for other, legitimate reasons ( Pickering v. Board of

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Education , 1968; Connick v. Myers , 1983; McPherson v. Rankin , 1987; Mount Healthy Board of Education v. Doyle , 1977).

In 2006, the US Supreme Court, in Garcetti v. Ceballos , pronounced a holding that many feel has reduced the First Amendment constitutional protections afforded to public sector employees in speech cases (Hudson, 2008). The Garcetti decision created an additional hurdle for public employ- ees by requiring them to show they were speaking as citizens on a matter of public concern and not simply doing their jobs when they expressed themselves. According to the Court, public sector employees who speak as a result of the required duties of their job do so as employees rather than as citizens and will not be afforded First Amendment protections from subse- quent disciplinary action by their employers as a direct result of the speech (Garry, 2007).

Ceballos was a deputy district attorney in the Los Angeles County District Offi ce who was demoted after fi ling a deposition memorandum outlining alleged false statements by police contained in an affi davit used to obtain a search warrant and informing defense counsel of those false statements. After being demoted, Ceballos fi led a suit alleging that his demotion was a result of his speech protected by the First Amendment. The US Supreme Court held that the First Amendment did not apply because the deputy district attorney spoke as an employee and not as a citizen when he wrote his memorandum (Garry, 2007). The issue presented was not whether the speech was a matter of public concern, but whether it was made by a government employee in implementing his offi cial duties. Ceballos spoke as a public employee and not as a citizen, so the Court held that his supervisors had every right to criticize his performance and take disciplinary action.

Freedom of Association

Public employees are generally free to join organizations as long as their membership does not create a confl ict of interest with their jobs or appears to invite impropriety. Public employees also have broad protections against being forced to join organizations. With limited exceptions, such as in executive policymaking positions, the decisions to hire, terminate, train, transfer, promote, or discipline employees for partisan political reasons are not permissible. The Supreme Court reasoned that the contributions that patronage makes to the government ’s interests in loyalty, accountabil- ity, and party competition are outweighed by its infringement on public employees ’ freedom of association and belief ( Elrod v. Burns , 1976; Branti v. Finkel , 1980; Rutan v. Republic Party of Illinois , 1990). Moreover, public

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employees cannot be required to join labor unions as dues-paying mem- bers, but may be included as bargaining unit members for the purposes of voting and contract application. Generally dues-paying members are assessed fees to contribute to their fair share of contract negotiations, con- tract administration, and other privileges afforded under the contract, but bargaining unit members may not be.

Equal Protection of the Law

In Engquist v. Oregon Department of Agriculture et al. (2008), the US Supreme Court ruled against a state worker who brought a so-called class-of-one claim, asserting her rights under the Equal Protection Clause of the US Constitution. Engquist claimed she was fi red by a supervisor for arbitrary, vindictive, and malicious reasons and not because she was a member of an identifi ed class such as race, sex, or national origin. The Court held that the class-of-one theory of equal protection does not apply in the public employment context, “noting that government has signifi cantly greater leeway in its dealing with citizen employees than in bringing its sovereign power to bear on citizens at large.” Justice John Roberts wrote, “The Court is guided, as in the past, by the ‘common-sense realization that government offi ces could not function if every employment decision became a consti- tutional matter.’” Citing Garcetti v. Ceballos (2006), he further stated “the Equal Protection Clause does not require the displacement of managerial discretion by judicial supervision.”

Privacy Rights

The Fourth Amendment to the US Constitution bars unreasonable searches and seizures and essentially provides zones of privacy. However, not every intrusion on a privacy interest is a search, and employers can and do limit the zones of privacy in the workplace.

Public employees do not lose their Fourth Amendment rights against unreasonable searches or seizures because they work for the government instead of a private employer ( National Treasury Employees Union v. Von Raab, 1989). Where employees have a “reasonable expectation of privacy” under employment circumstances, the Fourth Amendment provides protection unless a search warrant is issued by a detached magistrate based on prob- able cause.

Due Process Rights

This area of the law is in constant development as societal values and ide- ologies ebb and fl ow. There are two concepts of recognized due process:

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procedural and substantive. Procedural due process is a concept adopting fun- damental fairness as the rule of law to effect decisions regarding individual rights. Due process in this context is not necessarily a tangible right; rather, it relates to the preprocesses afforded to individuals before tangible rights are affected by government. Essentially procedural due process requires the government to provide reasonable notice and an opportunity to be heard within a fair forum under just conditions before a person ’s rights are negatively affected. Fairness is an objective standard and naturally depends on a multitude of considerations. Procedural due process is a check on arbitrary, capricious, or discriminatory decisions by government offi cials in individual cases. When invoked in the public employment context, it protects public employees from arbitrary discharge. If nothing else, pro- cedural due process procedures create the opportunity for individuals to protect rights and interests through the discovery of arbitrary or capricious government action. In order to comport with procedural due process, a public sector employer must give the affected employee notice, a mean- ingful opportunity for the employee to respond to charges and present evidence, and the right to an impartial decision maker.

Not all substantive due process rights are codifi ed in the Constitution. (Substantive due process prohibits the government from infringing on fun- damental constitutional liberties.) The Fifth and Fourteenth Amendments ’ substantive due process provisions allow the courts to recognize tangible interests dependent on the concepts of liberty. The Fifth Amendment applies to federal government action and the Fourteenth Amendment to actions of the states. In limited circumstances, these amendments provide substantive due process rights to protect individuals against the depriva- tion of life, liberty, or property without the procedural due process of law. The concepts of life, liberty, and property are ever evolving, and therefore substantive due process rights are recognized on a case-by-case basis. At a minimum, these amendments to the Constitution require a rational basis supporting government actions. In the context of equal protection not affecting a protected class of individuals, the government is not required to treat everyone the same, but it does mandate that it treat similarly situated groups in a like manner unless it can establish a legitimate reason that is rationally related to the employment decision. Where a protected class of individuals is at issue, for example, gender or race, the judicial scrutiny increases and therefore affords greater protection to these classes.

Public and nonprofi t employees may also have additional workplace protections that prohibit arbitrary and unfair treatment from employers through local, state, or federal statutes.

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Limits on Political Participation

Public employees can be restricted from participating in partisan political activities. The 1939 Political Activities Act, more commonly referred to as the Hatch Act, prohibits federal employees covered by it from taking an active part in political campaigns. The act prohibits federal employees from engaging in political activity while on duty, wearing campaign buttons in the offi ce, and putting campaign bumper stickers on government vehicles.

It also bans soliciting and accepting or receiving political contribu- tions, and it prohibits employees from using their official positions to infl uence or interfere with an election. In addition, the Offi ce of Special Counsel (OSC), an independent agency that investigates and prosecutes allegations of improper political activities by government employees, has rendered opinions that limit persons from running for a partisan offi ce where the individual is directly or indirectly responsible for funds arising from federal grants. In those cases, the individual may need to resign from public employment to run for a local offi ce. Violators can be prosecuted under federal law and even lose their jobs.

An interesting issue has risen as a result of the internet. Today political messages, campaign solicitations, and cartoons come to individuals ’ e-mail in-boxes. The OSC notes that receiving an e-mail may not be under an indi- vidual ’s control; however, public employees should not forward an e-mail that urges a vote for a specifi c candidate or seeks to raise campaign money. Blogging about politics from work is not permissible, and blogging from home may also get a federal employee in trouble. The OSC provides infor- mation on its website in regard to the federal employees who fall under its jurisdiction, as well as permitted and prohibited activities for federal employees (www.osc.gov).

In addition, the OSC has rendered opinions that limit persons from running for a partisan offi ce where the individual is directly or indirectly responsible for funds arising from federal grants. In those cases, the indi- vidual may need to resign from public employment to run for a local offi ce. Violators can be prosecuted under federal law and even lose their jobs.

The Hatch Act Modernization Act of 2012, introduced by Senator Daniel Akaka (D-Hawaii) and Representative Elijah Cummings (D-MD), was signed into law on December 28, 2012:

• Allow state and local government employees covered by the law to run for offi ce.

• Allow the Merit Systems Protection Board greater fl exibility to con- sider a range of punishments rather than the automatic fi ring.

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• Allow Washington, DC, employees who are now treated the same as federal employees to fall under the same rules as state or local employees.

The political activities of most state and local government employees are also restricted by state or local governments ’ “little Hatch Acts.” What is permitted and what is proscribed vary by state. Many of the state laws are less restrictive than the federal Hatch Act and permit state and local employees to engage in more political activity than their federal counter- parts are allowed. It is important for public employees to review current federal and state laws, along with local ordinances, resolutions, and regu- lations, to determine permitted political activity.

Additional Protections for Employees

Public and nonprofit employees may also have additional workplace protections that prohibit arbitrary and unfair treatment form employers through local, state, or federal statutes.

Whistle-Blower Protection

A whistle-blower is an employee, former employee, or contractor of an agency who reports agency misconduct. Generally the misconduct is a violation of law, rule, or regulation or a direct threat to public interest, such as fraud, health and safety violations, or corruption. Whistle-blower laws and policies are designed to protect employees who report wrongdoing, illegal conduct, internal fraud, and discrimination from retaliation (Harshbarger & Crafts, 2007; Lee & Kleiner, 2011; US Merit Systems Protection Board, 2010a). A patchwork of federal laws protects the rights of workers to report wrongdoing. The federal government and every state except Alabama have some type of whistle-blower protection (Meinert, 2011). Many local governments also have statutory or common law whistle-blower or antiretaliation laws.

Nonprofi ts have been advised to adhere to the whistle-blowing provi- sions of the Public Accounting Reform and Investor Protection Act of 2002, more commonly known as the Sarbanes-Oxley Act (Harshbarger & Crafts, 2007). The act was passed as a reaction to the Enron, Tyco, Adelphia, and WorldCom corporate scandals that cost investors billions of dollars and led to diminished confi dence in the securities markets. The most recent federal whistle-blower protection laws were passed in 2010: the FDA Food Safety Modernization Act, which protects food industry workers; the Patient Protection and Affordable Care Act, which protects hospital employees and

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employees of direct care providers; and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which protects fi nancial industry employees at publicly traded companies and their private subsidiaries and affi liates. This expands the whistle-blower rights that were granted under the Sarbanes- Oxley Act (The Government Accountability Project, www.whistleblower.org).

Internal whistle-blower policies can be used to identify problems in the workplace. With whistle-blower protections in place, intervention and prevention methods can strengthen and support a workplace culture of integrity, openness, transparency, and two-way communication. Human resources managers must let employees know that it is safe to report wrong- doing through internal processes and should train supervisors and man- agers to be receptive to employee concerns. Nonretaliation policies must also be created, disseminated, and enforced (Harshbarger & Crafts, 2007; Meinert, 2011).

Public and nonprofi t employers need to be aware of the Whistle Blower Protection Act of 1989 and the state and local laws in jurisdictions in which they are located, and they must comply with any internal policies in regard to whistle-blowers. Public, nonprofit, and for-profit employees are typ- ically covered by whistle-blower or antiretaliation laws. Like the federal whistle-blower laws, state and local governments have recognized with laws a public policy exception to the doctrine of employment at will.

Employment at Will

The doctrine of employment at will provides that an employer may dis- charge an employee for any reason not prohibited by law or for no reason. However, there are some exceptions:

• Public policy exception . Under this exception, an employer may not fi re an employee if it would violate the state ’s public policy or a state or federal statute.

• Implied contract exception . Under this exception, an employer may not fi re an employee when an implied contract is formed between an employer and employee, even though no express, written instrument regarding the employment relationship exists. Proving the terms of an implied contract is often diffi cult, and the burden of proof is on the employee who has been fi red. Implied employment contracts are most often found when an employer ’s personnel policies or handbooks indi- cate that an employee will not be fi red except for good cause or specify a process for fi ring. An employer who fi res the employee in violation of an implied employment contract may be found liable for breach of contract.

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• Good-faith and fair dealing exception . This exception represents the most signifi cant departure from the traditional employment-at-will doctrine. Rather than narrowly prohibiting terminations based on public pol- icy or an implied contract, it inserts a covenant of good faith and fair dealing into every employment relationship. It has been interpreted by some courts to mean either that employer personnel decisions are subject to a just-cause standard or that terminations made in bad faith or motivated by malice are prohibited.

Employers may not fi re at-will employees for refusing to commit illegal acts, and if the employment handbook or agency policy outlines proce- dures that must be followed before an employee can be terminated, those procedures must be followed. If the employer fi res an employee without following established procedures, the employee may have a claim for wrongful termination. Employers in all sectors must be aware of excep- tions to the employment-at-will doctrine. Essentially these concepts are developed under the rubric of procedural and substantive due process as discussed above. In addition, the courts have found that public employ- ees have liberty interests (quasi-property rights) in their reputation as it relates to public employment. The liberty interest does not necessarily pro- tect the job, but it allows the employee to invoke a liberty-interest hearing after termination. The hearing allows the employee to have the last word within the public personnel fi le.

Equal employment opportunity has continued to evolve, and it now prohibits not only race discrimination but discrimination against sex, religion, color, national origin, disability, and age. The equal employ- ment opportunity and affirmative action laws create legal responsibili- ties for employers and affect all aspects of the employment relationship. Recruitment, selection, training, compensation and benefi ts, promotions, and terminations must all be conducted in a nondiscriminatory manner.

Conclusion

The focus on equal employment opportunity and affi rmative action pro- grams has increased the importance of strategic HRM and planning. Compliance with equal employment opportunity laws and affirmative action regulations is essential to human resources planning and the effec- tive utilization of all employees. One day affi rmative action programs may be eliminated, and many of the paperwork requirements for compliance

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