HRM from A to Z

Editor's Notes

• #11: The Hierarchy of Goals In companies, it is traditional to view the goals from the top of the firm down to front-line employees as a chain or hierarchy of goals. Figure 3-1 illustrates this. At the top, the president sets long-term or “strategic” goals (such as “double sales revenue to $16 million in fiscal year 2015”). His or her vice presidents then set goals for their units that flow from, and make sense in terms of accomplishing, the president’s goal. Then their own subordinates set goals, and so on down the chain. Policies and Procedures Policies provide day-to-day guidance employees need to do their jobs in a manner that is consistent with the company’s plans and goals. Policies set broad guidelines delineating how employees should proceed. For example, “It is the policy of this company to comply with all laws, regulations, and principles of ethical conduct.” Procedures spell out what to do if a specific situation arises.
• #13: What Is Strategic Human Resource Management? Management formulates a strategic planand measurable strategic goals or aims. The plans imply certain workforcerequirements required to achieve thefirm’s strategic aims. Given these workforce requirements, HR management formulates strategies. These HR policies and practices (strategies) helpproduce the desiredworkforce skills, competencies, and behaviors. Human Resource Strategies in Action As one example of human resource strategy, consider Newell Rubbermaid. Several years ago, it changed its business from manufacturing and marketing housewares (such as Rubbermaid utensils and Levelor Blinds) to mostly just marketing them. They knew that implementing this change would require new employee competencies and behaviors (for instance more advertising and sales employees and fewer manufacturing ones). The human resource management team began by benchmarking Newell’s main marketing-oriented competitors to see what their best human resource practices were. Then the human resource team formulated new HR strategies. Albertsons Example. Supermarket chain Albertsons competes with low-cost leader Walmart in part with a strategy of combining reasonably low costs with superior service. Albertsons’ human resources team helps the company do this. For example, controlling personnel-related costs while improving customer service meant hiring customer-focused employees while reducing turnover, improving retention and eliminating time-consuming manual processes. Working with its information technology department, Albertsons’ human resource team put in place an automated staffing system from Unicru. This collects and analyzes the information entered by applicants online and at kiosks. It ranks applicants based on whether they exhibit customer-focused traits, helps track candidates throughout the screening process, and tracks reasons for departure once applicants are hired. The Albertsons human resource managers were able to present a compelling business case for adopting the Unicru system, by showing its return on investment. The bottom line was that by working as a partner in Albertsons’ strategy design and implementation process, the human resource team helped Albertsons control costs and improve customer service, and thereby achieve its strategic goals. Translating Strategy into Human Resource Policies and Practices: An Example. The CEO of Einstein Medical decided to summarize the change in the program’s goals in three words: initiate, adapt, and deliver. To turn Einstein Medical into a comprehensive health-care network within the dynamic new health care environment, Einstein Medical’s HR and other departmental strategies would have to focus on helping the medical center and its employees to produce new services (initiate), capitalize on opportunities (adapt), and offer consistently high-quality services (deliver). Strategic Human Resource Management Tools Managers use several tools to translate the company’s broad strategic goals into human resource management policies and practices. Three important tools are the strategy map, the HR scorecard, and the digital dashboard.
• #22: We can define talent management as the goal-oriented and integrated process of planning, recruiting, developing, managing, and compensating employees. Effectively managing talent means that managers: Understandthat talent management tasks are parts of one unified process. Ensure talent management decisions such as staffing, training, and pay are goal-directed. Consistently use the same “profile” of competencies, traits, knowledge, and experience for potential employees. The approach requires that employers proactively manage recruitment, selection, development, andrewards. Realize an effective talent management process integrates all underlying talent management activities such as recruiting, developing, and compensating employees.
• #23: We can define talent management as the goal-oriented and integrated process of planning, recruiting, developing, managing, and compensating employees. Effectively managing talent means that managers: Understandthat talent management tasks are parts of one unified process. Ensure talent management decisions such as staffing, training, and pay are goal-directed. Consistently use the same “profile” of competencies, traits, knowledge, and experience for potential employees. The approach requires that employers proactively manage recruitment, selection, development, andrewards. Realize an effective talent management process integrates all underlying talent management activities such as recruiting, developing, and compensating employees.
• #24: The usual process of talent management consists of the several steps such as building an applicant pool, conducting appraisals, and rewarding employees. More recently, however, managing talent is considered more of a unified process. It is a goal-oriented and integrated process of planning,recruiting, developing, managing, and compensating employees. All managers must use the same set of criteria in managing talent effectively. Managers must be proactive in the application of talent management principles and successfully integrate all talent management activities into a coherent whole.
• #25: Talent management begins with understanding what jobs need to be filled, and the human traits and competencies employees need. Jobanalysis is the procedure through which you determine the duties of the positionsand the characteristics of the people to hire for them.
• #26: The information collected through a job analysis is used help manage all aspects of an effective HR program. In terms of recruitment and selection information about what duties the job entails and what human characteristics are required helps in hiring decisions. Job analysis is crucial for validating all major human resources practices, especially when it comes to legal compliance. You may recall from our earlier discussion of federal laws that care must be exercised in all areas related to employees such as hiring under the Americans with Disabilities Act (ADA). A job analysis helps compare each employee’s actual performance with his or her duties and performance standards in performance appraisals. Compensation often depends onthe job’s required skill and education level, safety hazards, degree of responsibility, and other factors you assess through job analysis. The job description, which is created from a job analysis, lists the job’s specific duties and skills—and therefore the training—that the job requires.
• #27: Conducting a job analysis requires multiple steps. Step 1: Decide how you’ll use the information. Step 2: Review relevant background information such as organization charts, process charts, and job descriptions. Step 3: Select representative positions. Step 4: Actually analyze the jobby collecting data on job activities, working conditions, and human traits and abilities needed to perform the job. Step 5: Verify the job analysis information with the worker performing the job and with his or her immediate supervisor. Step 6: Develop a job description and job specification. Job analysis may involve these processes: Workflow analysis is a detailed study of the flow of work from job to job in a work process. Usually, the analyst focuses on one identifiable work process, rather than on how the company gets all its work done. Business Process Reengineering Business process reengineering means redesigning business processes, usually by combining steps, so that small multifunction teams, often using information technology, do the jobs formerly done by a sequence of departments. The basic reengineering approach is to: 1. Identify a business process to be redesigned (such as processing an insurance claim) 2. Measure the performance of the existing processes 3. Identify opportunities to improve these processes 4. Redesign and implement a new way of doing the work 5. Assign ownership of sets of formerly separate tasks to an individual or a team who use new computerized systems to support the new arrangement As at Atlantic American, reengineering usually requires redesigning individual jobs. Job redesign Researches proposed redesigning jobs using methods such as job enlargement, job rotation, and job enrichment. Job enlargement means assigning workers additional same-level activities. Thus, the worker who previously only bolted the seat to the legs might attach the back too. Job rotation means systematically moving workers from one job to another. Job enrichment means redesigning jobs in a way that increases the opportunities for the worker to experience feelings of responsibility, achievement, growth, and recognition—and therefore more motivation. It does this by empowering the worker—for instance, by giving the worker the skills and authority to inspect the work, instead of having supervisors do that. Herzberg said empowered employees would do their jobs well because they wanted to, and quality and productivity would rise. That philosophy, in one form or another, is the theoretical basis for the team-based self-managing jobs in many companies around the world today.
• #28: The job description is one of the main outcomes of conducting a job analysis. The job identification section (on top) contains several types of information. The Fair Labor Standards Act (FLSA) status section identifies the job as exempt or nonexempt with respect to being exempt or non-exempt from FLSA overtime rules. Exempt and non-exempt status also is used to help plan compensation strategies for a firm. The “Date” is the date the job description was actually approved. The job summary should summarize the essence of the job, and include only its major functions or activities. There may be a “relationships” statement that shows the jobholder’s relationships with others inside and outside the organization. Responsibilities and duties are the heart of the job description. This section should present a list of the job’s significant responsibilities and duties. This section may also define the limits of the jobholder’s authority. A “standards of performance” section lists the standards the company expects the employee to achieve for each of the job description’s main duties and responsibilities. Working conditions include the location, tools, environment (hot, cold, etc.) and the like. More employers are turning to the Internet for their job descriptions. The process is simple. Search by alphabetical title, keyword, category, or industry to find the desired job title. This leads you to a generic job description for that title which you may then customize as needed. The Internet, particularly O*NET, can help you create the “human requirements” of the job for the job specification. We will discuss job specifications next.
• #31: Motivators and Frederick Herzberg – Hygiene-motivator theory divides needs into two factors. Hygiene factors include such things as working conditions, salary, and incentives. Motivators include those factors that make the job more intrinsically motivating, like challenge, feedback, and recognition. He further claimed that the absence of hygiene factors would not foster a motivated individual. However, once hygiene factors had been attended to, the presence of motivator factors would create a motivated employee. Edward Deci found that extrinsic rewards could, at times, actually detract from an employee who already possesses a great deal of intrinsic motivation. There are other reasons for incentive plans’ often-dismal results. For example, many employers ignore the fact that incentives that may motivate some people won’t motivate others. Compensation experts therefore argue that managers should understand the motivational bases of incentive plans.
• #32: Piecework is the oldest and still most popular individual incentive plan. Piecework involves paying the worker a specified amount for each piece or unit he/she produces. Straight piecework entails a strict proportionality between results and rewards regardless of output. With a standard hour plan, the worker gets a premium equal to the percent by which his/her performance exceeds the standard. The pluses for piecework are that piecework plans are understandable, appear equitable, and can be powerful incentives, since rewards are proportionate to performance. On the other hand, workers may resist even justified attempts to raise production standards. This may occur in part because a cultural norm has been established between the employees performing the same work. Occasionally, employees may well downplay quality, or resist switching from job to job (since doing so could reduce productivity). Attempts to introduce new technology or processes may trigger resistance, for much the same reason. Merit pay or a merit raise is any salary increase the firm awards to an employee based on his/her individual performance. Merit plan effectiveness depends on trulydifferentiating among employees. Two adaptations of merit pay plans are popular. One awards merit raises in a lump sum once a year and does not make the raise part of the employee’s salary. The other adaptation ties merit awards to both individual and organizational performance.