50 case studies management training alan b clardy

Case Study

Please complete the Denton Fabricators Case Say When: Establishing Salary Levels found in Chapter 6: Compensation and Benefits in the Clardy text.

Managing Human Resources: Exercises, Experiments, and

Applications Workbook

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Managing Human Resources: Exercises, Experiments, and

Applications Workbook

Alan B. Clardy

I p Psychology Press A Taylor &. Francis Group

NEW YORK AND LO NDON

First Published 1996 by Lawrence Erlbaum Associates, Inc.

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

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

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

Copyright © 1996 by Lawrence Erlbaum Associates, Inc.

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

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

Cover design by Gail Silverman

Library of Congress Cataloging-in-Publication Data

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

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

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

HF5549.C473 1995 658.3—dc20 95-18235

CIP

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

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

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

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Contents

Preface ix

Acknowledgments xi

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

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

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

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

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

vii

Viii CONTENTS

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

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

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

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

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

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

References 157

Author Index 163

Subject Index 166

Preface

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

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

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

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

ix

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

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

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

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

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

Alan Clardy

X PREFACE

Acknowledgments

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

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

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

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

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

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

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1 Human Resources Management:

Orientations and Issues

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

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

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

1

2 CHAPTER ONE

ORIENTATIONS

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

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

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

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

ISSUES AND CONTEXT

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

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

ORIENTATIONS AND ISSUES 3

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

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

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

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

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

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

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

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

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

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

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

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

SUMMARY

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

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

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

4 CHAPTER ONE

ORIENTATIONS AND ISSUES 5

Establishing a Human Resources Program

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

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

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

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

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

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

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

Assignment

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

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

CHAPTER ONE

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

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

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

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

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

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

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

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

possible? E. Employee Training

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

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

about employee problems and dissatisfactions?

ORIENTATIONS AND ISSUES 7

Sexual Harassment: Yes or No?

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

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

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

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment________________________________________________________________

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

8 CHAPTER ONE

Comment

ORIENTATIONS AND ISSUES 9

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

Sexual harassment: [ ] Probably [ ] Probably Yes No

Comment

1 0 CHAPTER ONE

The Republic for Which Who Stands

Introduction

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

The next few sections contain the following information:

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

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

Background Summary

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

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

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

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

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

ORIENTATIONS AND ISSUES 11

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

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

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

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

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

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

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

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

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

12 CHAPTER ONE

CAST OF CHARACTERS REPUBLIC SAVINGS AND LOAN

President

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

Jim Bronson Manager, Branch Operations

Bill Winston Branch Manager

I MaryLou Scott

Head Teller

Shirley McDonnell Belinda Williams LoriAnn Jones Teller Teller Teller

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

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

ORIENTATIONS AND ISSUES 13

Legal Issues Briefing Paper

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

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

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

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

14 CHAPTER ONE

Belinda Williams’ Story

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

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

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

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

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

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

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

This is clearly a case of racially motivated discrimination.

ORIENTATIONS AND ISSUES 15

Republic Savings and Loan Story

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

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

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

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

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

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

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

1 6 CHAPTER ONE

Judge Briefing

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

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

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

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

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

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

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

ORIENTATIONS AND ISSUES 1 7

This Bud’s for You

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

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

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

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

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

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

1 8 CHAPTER ONE

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

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

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

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

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

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

Discussion

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

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

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

ORIENTATIONS AND ISSUES 19

But Why?

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

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

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

Assignment

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

There should be at least two parts to your answer:

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

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

2 Human Resources

Planning

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

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

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

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

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

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

from high to low.

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

20

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

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

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

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

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

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

HUMAN RESOURCES PLANNING 21

2 2 CHAPTER TWO

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

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

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

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

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