Dual career marriages stress management and employee outplacement are

The Staffing Function

Learning Objectives

After completing this chapter, you should be able to:

• View staffing as an organization-wide activity taking place in a complex legal environment. • Design jobs and plan for future human resource requirements. • Conduct employee placement in a manner that leads to quality hires. • Maintain an effective work force through compensation policies and other staffing

activities. • Explain how staffing is related to building careers and working with unions.

4

Shekhardino/iStock/Thinkstock

Introduction Chapter 4

4.1 Introduction In Chapter 1, we defined management as the process that consists of a collection of techniques used to lead the human resources in an organization to become productive. Notice that a key element of that definition is the human resource component. The people who work in an organi- zation are its most valuable resource, because they convert raw materials into finished products and services, which help generate profits for the business. People also design products and make decisions about when and how products and services are distributed to maximize organizational effectiveness. People are often the most valuable asset of the organization. At the same time, people can be the most expensive part of running a business and often pose the greatest chal- lenges to effective management (Mathis & Jackson, 1997).

M A N A G E M E N T I N P R A C T I C E

Zappos.com—Strategic Staffing

Shoe stores lose one out of every three sales because the customer’s size is not in stock. This factor explains some of the success and growth of online shoe sales. The online shoe market share has reached over $3 billion. Zappos.com, which is an adaptation of the Spanish word for “shoe,” has captured a 20% share of the overall shoe market. The organization has moved into sales of various products beyond footwear, increasing sales and market awareness. New product lines include cloth- ing, electronics, and accessories.

Nick Swinmurn founded Zappos.com in 1999 after spending a day walking in a mall looking for a pair of shoes and being unable to find the pair he wanted. His first business concept was to create an inventory so large that the odds of the customer finding exactly the right pair would be very high. Zappos.com now maintains more than 4 million pairs of shoes in its inventory. The Zappos. com business model dictates that key customer contacts are made via the phone center. If a cus- tomer cannot locate the exact pair of shoes he or she wants, the center’s service representative will direct the person to two or three other companies that might have the item. Each phone operator is required to exhibit a consistently friendly, upbeat, and helpful demeanor. Zappos.com represents a prime example of a company that effectively completes the staffing function. The overall mission for the organization combines employee sat- isfaction with customer satisfaction. The quality of the company’s service begins with the company’s culture.

The company’s recruiting and selec- tion processes reflect a commitment to the overall mission. Employees are carefully selected, and only those who show positive, customer- oriented attitudes are chosen. New employees are required to enroll in a four-week training session that prepares them to work in the call center. During the training, company

(continued)

Fuse/Thinkstock

▲▲ An effective organization combines employee satisfaction with customer satisfaction.

Introduction Chapter 4

The Nature of Staffing

Staffing is the achievement of organizational goals through the effective and efficient deployment of people. Staffing deals with people as a resource in the organization. It is more than a depart- ment called human resources.

The typical human resources department deals with the design of formal systems to assist and support managers in the staffing function. But staffing is a distributed function of management itself. All managers are responsible for staffing within the organization and not just in one depart- ment. No matter what process the organization uses, managers make hiring and termination decisions, conduct training or supervise it, evaluate worker performance, assess worker suitabil- ity for advancement, discipline workers when necessary, and prepare the annual labor budget. In almost all cases, the organization has a manager who is responsible for maximizing the worker’s efficiency and achieving the highest grade of work output the worker is capable of (Taylor, 1911). This is the essence of the staffing function.

CEO Tony Hsieh personally offers to “buy out” the trainees with a cash payment (up to $2,000) that allows each person to quit the company with money in his or her pocket. Those who remain consistently remind other employees of the importance of excellent customer service. Many are placed in non-phone-related jobs such as order fulfillment, inventory control, or finance. The training process ends with a graduation ceremony during which graduates recite the Zappos.com 10 core values, which include phrases such as “Deliver WOW,” “Create fun,” “A little weirdness,” “Pursue growth,” “Be passionate,” and “Be humble.”

The employee environment reflects the company’s culture. Employees can personalize their cubicles. An abundance of free food is available every day. Employees are encouraged to be spontaneous, energetic, and have fun. In contrast to the free-flowing and short-lived dot-coms of the 1990s, Zappos.com employees are well trained, and they are constantly reminded that the customer is their top priority.

Meeting customer needs is also part of the company’s compensation system. Employees who stay with Zappos.com receive excellent compensation, full health insurance, and dental benefits. Why doesn’t the company relocate the call center to somewhere cheaper? “We don’t think you’re going to give great customer service by outsourcing it,” Tony Hsieh calmly states. Hsieh, who already made a fortune with another Internet company, receives compensation from Zappos.com of about $36,000 per year. He works in a small cubicle at the center of the plant.

Most of Zappos.com sales come from online purchases. Each order is shipped at no cost to the cus- tomer, who also can return it at no cost if necessary. Customers receive their purchase within just a few days of placing their order. Shoes that do not fit can be returned for full credit up to one year after the original purchase date.

Why don’t other companies follow this business model, including the staffing system? Tony Hsieh speculates that it’s because “You don’t really see the payoff right away.” Building a company in this way takes time. On the other hand, 75% of Zappos’ business comes from repeat customers. Most would agree that Zappos.com fulfills its mission: To Live and Deliver WOW (Clow & Baack, 2010, p. 255; Durst, 2007; ABC News Nightline, 2008).

Discussion Questions

1. How has Zappos.com managed to capture 20% of the overall shoe market? 2. In what way does the Zappos.com mission contribute to its success? 3. How does CEO Tony Hsieh’s staffing function model differ from those used by other companies?

Introduction Chapter 4

Strategic Human Resource Management

The organization’s strategic plan establishes the foundation of staffing. People are the most criti- cal asset in building and maintaining organizational capability. In principle, “Building organiza- tional capability requires very specific talent or competencies” (Christensen, 1997). Staffing the organization must be viewed by managers “in the same context as financial, technological, and other resources that are managed in organizations” (Mathis & Jackson, 1997, p. 199). To do other- wise does not appropriately align organizational resources to meet future operational demands.

Strategic human resource management (SHRM) may be defined as a process in which all staffing activities are fully integrated into a program designed to help the overall organization achieve its strategic objectives. This perspective suggests that the human resources department should contribute to every aspect of a company’s operations and lead to a higher level of competi- tive advantage within the industry or environment. The “strategic best-fit” perspective regarding SHRM suggests that the human resources department should seek to match each specific func- tion or activity with the firm’s overall business strategy. A “configurational” approach to SHRM argues that “bundles” of HR practices should be managed collectively to improve business perfor- mance. Such bundles must be designed to fit various industries and specific business conditions. The “resource-based” perspective argues that the focus of SHRM should be to acquire, train, use, and retain the most competent employees, thereby helping the organization to achieve (Fisher, Schoenfeldt, & Shaw, 2006).

What sets SHRM apart from earlier, more traditional, views of staffing is the long-term, strategic perspective. It suggests that human resources departments play vital roles in every aspect of a firm’s operations rather than simply performing a set of rote functions, such as recruiting, selec- tion, training, and collecting and maintaining employee records. A strategic human resource manager is charged with monitoring the external environment and developing strategies and tactics that mesh internal operations with the demands and contingencies of that external envi- ronment. At the same time, the human resources department still is expected to carry out its basic functions and activities. Thus SHRM contains practical, hands-on elements as well as more general theoretical and integrated views of the company.

Staffing Functions

As just noted, human resource management continues to carry out basic organizational func- tions; at the very least, they engage in the following major activities or functions:

• job design • human resource planning • recruiting • selection • orientation • employee development • compensation management • performance assessment • employee discipline systems • workplace safety • career development • labor–management relations

Introduction Chapter 4

Before evaluating these activities, however, we review the legal environment surrounding the staffing function and the conduct of the overall business organization.

Legal Aspects of Staffing

The staffing function takes place in a complex and changing environment. Social trends, shift- ing demographics, and legal regulation influence the employment process. As the population becomes more diverse and new legal issues arise, a key part of effective staffing involves adapting to these trends and rulings. The organization’s policies and work rules, combined with a myriad of national, state, and local laws and regulations, govern the workplace. Although this is not a law textbook, here we address the most significant and recent areas of concern to managers.

Employment at Will One of the most significant and misunderstood legal doctrines affecting the employment rela- tionship is that of “at will” employment. In essence, it means that workers are free to sell their labor services to any employer, and employers may employ whomever they prefer and terminate that employment arrangement at any time and for any reason. But the application of employ- ment at will has limitations. Laws restrain employers from termination for reasons of discrimina- tion, retaliation for whistle-blowing, service in the military (e.g., called to duty in the reserves or National Guard), and jury service. In other instances, employers and employees are able to sever the employment relationship as long as both employer and employee comply with applicable laws.

Fair Labor Standards Act The Fair Labor Standards Act (FLSA) was signed into law by Franklin D. Roosevelt in 1938. The law provides for a minimum wage ($7.25 effective July 24, 2009), overtime pay for hours worked in excess of 40 hours in the workweek for nonexempt (hourly) employees, workweek standardiza- tion, child labor restrictions, and standardized record keeping. The primary purpose of FLSA is to protect workers, but these standards help managers plan and budget work schedules and pro- vide clear guidelines for supervising employees. In 2012, President Obama proposed an increase to the minimum wage following his reelection; however, no action had been taken by the close of the 2013 legislative session.

The Civil Rights Act of 1964 and EEOC The Civil Rights Act was signed into law during the Lyndon B. Johnson administra- tion with the express purpose of eliminating discrimination. It defined such discrimi- nation to include race, creed, color, sex, and national origin. In addition to mak- ing discrimination illegal in a variety of life experiences, the act specifically defines what constitutes illegal discrimination in employment relationships.

The act also created the Equal Employment Opportunity Commission (EEOC). No other regulatory area has more impact on staffing, or more influence over organizations and managers, than the EEOC. All aspects of employment management are affected, including hir- ing, recruiting, training, compensating, disciplining, and terminating.

Courtesy Everett Collection

▲▲ President Lyndon Johnson, watched by Martin Luther King Jr., signed the Civil Rights Act in 1964.

Introduction Chapter 4

Sexual Harassment and Sexual Discrimination Sexual harassment is defined as

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical con- duct of a sexual nature constitute sexual harassment when this conduct explicitly or implic- itly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment. (U.S. EEOC, 2013b)

It is a form of discrimination as defined in the Civil Rights Act of 1964 and EEOC regulations. There are numerous types of sexual harassment, but the two most widely recognized are sum- marized in Table 4.1 (Weitzer, 2002).

Table 4.1 Forms of sexual harassment

Quid pro quo Sexual advances or sexual favors are exchanged for favorable treatment, including

• Better job assignments

• Undeserved performance evaluation ratings

• Promotions

• Pay raises

Hostile environment Work environment is characterized by the following:

• Sexual innuendos in language, including jokes and sexual references

• Inappropriate comments about appearance and dress

• Unwanted touching

• Signage (“girlie” calendars, cartoons)

• Conduct toward the other gender or those with a different sexual orientation suggesting a discrepancy in how people are treated

The Latin term quid pro quo literally means “this for that.” In the work environment, quid pro quo occurs when a subordinate’s job benefits are directly tied to his or her submission to unwelcome sexual advances. Hostile working environments are created in various ways that lead to impaired job satisfaction. While impairment could be a subtle or significant condition, the employee has a right to be free from such acts in the work environment.

The Age Discrimination in Employment Act This 1967 federal statute is intended to protect workers over the age of 40 against discrimina- tion based on age. The EEOC defines age discrimination as “discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, train- ing, fringe benefits, and any other term or condition of employment” (U.S. EEOC, 2013a). The law also specifies that harassment based on a person’s age (if over 40) is illegal, although off- hand comments and isolated incidents by themselves do not constitute harassment that creates a “severe or offensive environment.” Still, the intended effect of the law is to create an age-protected class of workers and so to prevent older workers from being subjected to employment actions based on age status. As the work force continues to become older, you can expect that the Age Discrimination in Employment Act will more frequently apply to workplace decisions regarding senior employees.

Job Design and Human Resource Planning Chapter 4

The Americans with Disabilities Act of 1990 (ADA) The Americans with Disabilities Act (ADA) is designed to protect individuals with disabilities from being discriminated against by employers. The law does not provide protection from short- term conditions or temporarily disabling injuries, but from long-term conditions that signifi- cantly impair an individual. The ADA requires employers to make reasonable accommodation for such disabilities in employment staffing arrangements unless providing such an accommodation would place an undue hardship on the employer.

Family and Medical Leave Act In 1993, Congress enacted the Family and Medical Leave Act (FMLA) to cover circumstances in which various events disrupt an employee’s ability to perform effectively. The law requires larger employers to provide employees job-protected unpaid leave due to a serious health condition that makes the employee unable to perform his or her job, or to care for a sick family member, or to care for a new child (either natural-born or adopted). The law also covers caring for an injured member of the armed services.

4.2 Job Design and Human Resource Planning Staffing has a close connection with the organizing function. The first step of organization, job design, results from the collaboration between functional managers and the human resources department. Individual jobs require analysis of the tasks to be completed as well as identification of skills and talents needed to complete those tasks. After company managers have assigned the jobs, they can then begin the process of planning for current and future personnel needs.

Job Design

As noted in Chapter 3, job design occurs when managers determine the tasks needed to be done, who will do them, and the selection criteria to be used to choose employees and place them on the job. This means that job design is the process of “organizing tasks, duties, and responsibilities into a productive unit of work” (Mathis & Jackson, 1997).

Job design involves identifying appropriate, job-related knowledge, skills, and abilities to ensure that assigned work can be completed successfully. Designers consider the work, the environment, and the impact of the work on employees. The standard approach to job design involves three steps: job analysis, job description, and job specification.

Job Analysis

The process of assigning tasks to jobs, or job analysis, is conducted by the human resources department working in conjunction with departmental managers. Three forms of commonly employed job analysis are comparison with other companies, experimentation, and reflective planning.

Comparison with other companies can result from something as simple as a phone call to a friend in another firm to ask how that company defines duties for a particular job. For example, the posi- tion of administrative assistant varies widely, depending on the industry. Someone assigned to manage a new walk-in emergency health care facility might call leaders of similar organizations for advice. Comparisons can also take place more formally. This process normally involves using a resource such as the Dictionary of Occupational Titles (U.S. Department of Labor, 1977).

Job Design and Human Resource Planning Chapter 4

Experimentation methods begin with simply trying various methods to learn which is most effec- tive and efficient for performing a job. This process allows managers to evaluate workload to aid the organization of workflow. For instance, if employees cannot keep up with their job respon- sibilities, some tasks can be removed; if an employee is bored, additional tasks may be assigned. One form of experimentation, the time-and-motion study designed by Frank Gilbreth, studies jobs as they are performed by using a stopwatch and sometimes even filming specific tasks. The goal is to eliminate wasted motion and create an efficient set of job tasks by having them carried out in various ways to find the most efficient approach. As an example, a UPS truck driver might try numerous routes while seeking the optimal pattern for loading, delivering, and unloading items. This effort would be a form of experimentation and a quasi time-and-motion approach.

Reflective planning requires that managers think about how jobs should be designed. In some organizations, the public relations function is performed by specialists trained in media relations and writing. Those jobs are clearly defined as being more managerial. In other companies, a job in the public relations department is more of a marketing activity that centers on finding sponsor- ships with charities and other groups to generate positive publicity. The job title stays the same, but the job itself is quite different. Therefore, to determine the goals of particular jobs before deciding which employees are most qualified, managers must spend time in reflection.

Most recently, many organizations have begun to create positions associated with monitoring and responding to what appears in social media and on the Internet. When Taco Bell’s monitor- ing group discovered visual images of an employee licking the shells of tacos, the organization was able to respond immediately, thereby limiting harm to the company’s image. Without the design of a social media monitor job, which may be created through a reflective planning process, the damage to Taco Bell’s image might have been much worse (Kim, 2013).

Job analysis is a vital first step in the design of an organization. Consider, for example, the differ- ences between designing jobs in various occupations: sales, production/manufacturing, research and development, accounting, finance, quality control, purchasing, servicing, marketing, and public relations. Each job type must be tailored to the organization, including accounting for differences between profit-seeking companies, nonprofits, and governmental agencies. Then, jobs must match various industries. Selling intangible items such as life insurance differs dramatically from selling cars or heavy equipment. Marketing programs vary widely; some emphasize adver- tising while others feature a strong element of pricing and price discounting. Servicing depart- ments for brick-and-mortar retail stores are substantially different from those offering products online or over the phone, and so forth. Individual department managers should work carefully with those in human resources departments to clearly spell out which tasks are involved, how they will be completed, and the types of skills needed to do the job effectively. Only after a thor- ough job analysis can a quality job description be created for use in recruiting and selecting the proper individuals.

Job Description

When the manager and human resource specialist have agreed on the tasks that belong to each job, the next organizational step in job design takes place—creating a job description. A job description includes a formal task list that is used in two main ways. First, job descriptions are part of the recruiting process that allows applicants to review what exactly a job entails. Second, job descriptions often appear in a company manual, handbook, or on an organizational website. Managers and employees can then refer to the listing to see which employee is responsible for any given task. Writing clear job descriptions is an essential part of organizing a business.

Job Design and Human Resource Planning Chapter 4

Job Specification

Once job descriptions are created, organizers generate a list of requirements that applicants must have to be considered for a particular job. This list, a job specification, identifies the eligibil- ity requirements or qualifications needed to perform a job. Table 4.2 presents a standard set of specifications.

Table 4.2 Components of job specifications

Qualification Examples

Level of education High school diploma, associate’s degree, college degree, MBA, PhD

Amount and types of experience Number of years, job experience

Special skills—physical Ability to lift heavy weights, work outdoors

Special skills—technical Ability to use software programs

Personality characteristics Outgoing, self-starter, confident, effective public speaker

Legal requirements Meet with current laws for employment

Job specifications are often posted on company websites and in publications associated with the recruiting process. The usual order of operations at this level of organizational development is as follows: First, specifications are published online—and in some cases, in print media, most nota- bly newspapers and trade journals. Second, job specifications are published in particular employ- ment markets where pools of employers and job seekers meet, such as LinkedIn, Career Finder, and Monster.com. This step helps streamline the application process. Third, specifications may be sent to a trade show for those in a particular industry.

Impact on Employees To understand the impact of job design on employees who will actually carry out the work, Hackman and Oldham (1976) explain the potential motivating factors of a job for a worker. The five dimensions used in the analysis are described in Table 4.3.

Table 4.3 Core job dimensions

Skill variety The number and degree of skills, abilities, and talents used in performing the job

Task identity The degree to which the job includes a complete and identifiable piece of work

Task significance The personal impact on other people through human interaction

Autonomy The amount of freedom, independence, and working without supervision involved in the job

Feedback Performance-related knowledge and information

These five elements combine to reinforce three factors. Experienced meaning fulness expresses whether the employee sees the job as important, valuable, and worthwhile. Experienced respon- sibility measures the degree to which the employee feels personally accountable for outcomes.

Job Design and Human Resource Planning Chapter 4

Knowledge of results suggests whether the person readily knows whether the job has been done well (Nadler, Hackman, & Oldham, 1979).

Note Hackman and Oldham’s basic premise: “The more, the better.” These authors believed that increasing amounts in each of the five core job dimensions would dramatically increase the “motivating potential” of the job itself, regardless of pay, benefits, or other employment circum- stances. Others have challenged this assertion, suggesting instead that these factors have positive impact on only some, but not all, employees (Baack, 2012).

Once jobs have been designed and staffed, managers track job success, review job content and growth, and conduct ongoing job analysis to redefine or refine jobs and ensure that they continue to meet expectations. One of the final acts of this process is to develop a job or position descrip- tion incorporating all job-related information. Thus managers have a tool kit at their disposal to recruit, select, train, compensate, and evaluate worker performance.

Recent Trends in Job Design Over the past half century, job design has undergone many changes. Beyond the development and implementation of laws seeking to protect workers from various managerial actions, addi- tional trends have emerged. The most notable impact results from the continual evolution of workplace technologies. Such improvements change the methods by which jobs are performed and other aspects of everyday work.

The Internet and newly developed communication systems affect many jobs. For example, in the past, a salesperson would expect to be constantly traveling to establish face-to-face relationships with customers. Now, however, the use of programs such as Skype makes it possible to visit with people across the company without leaving the sales office. Travel and the salesperson’s time can be scheduled more efficiently. Job descriptions have changed as a result.

Further, telecommuting jobs have risen dramatically. These jobs are designed to enable an employee to live in an entirely different location and only rarely travel to the actual workplace. Telephones, Internet and satellite transmissions, instant messaging, and email make it pos- sible for a person to work at home or in a remote location. Some major companies that fea- ture telecommuting jobs as a significant part of the work force include Cisco, Accenture, Intel,

PricewaterhouseCoopers, and American Fidelity Insurance (CNN Money, 2012).

Other job design changes result from com- puterization and increasing use of robotics in manufacturing systems. Job descriptions include the use of computer skills when con- ducting tasks in these circumstances. Large production operations, such as automobile manufacturing, have been strongly influ- enced by computerization and robotics. Even basic activities like getting fast food have been influenced by technology. In the past, customers could order a pizza only by telephone or in the restaurant. Now, many large chains in the pizza business and other fast-food restaurants receive orders through company websites. Some companies inform

Mary Altaffer/Associated Press

▲▲ Even simple tasks, such as ordering takeout, have been influenced by technology. Today many restaurants allow customers to place food orders online.

Job Design and Human Resource Planning Chapter 4

customers of the status of food orders in real time, so they know when to expect home delivery. It is rare to find a job that has not been changed in some way by new technologies over the past few decades. Physicians now send in prescription orders using the Internet rather than writing out paper versions. Pharmacies can receive the order, contact the person’s insurance company, and fill the prescription before the individual arrives to pick it up. As a result, skill sets required to perform various jobs have changed. The new work force can expect further evolution of training systems and the subsequent jobs to be performed as these new technologies continue to evolve.

Human Resource Planning

Just as job design has a close connection with organizing, human resource planning has an obvi- ous tie to planning processes. Human resource planning consists of analyzing and preparing for future personnel needs. The process of human resource planning includes assessment of at least four levels: entry-level employees, front-line supervisors, middle managers, and executive managers. Various factors affect all four levels. When a company is growing, management must make certain an adequate number of entry-level employees can be attracted to the company. Declining firms require managers who can either rejuvenate the organization or find ways to stabilize the company with fewer staff.

As part of the human resource planning process, managers conduct a labor force analysis to determine the number of potential employees with the proper knowledge, skills, and abili- ties within the appropriate population. Next, they complete requisite salary surveys to assess market pay rates as part of developing a strategic recruitment plan. Recruitment plans may employ various approaches such as employing a headhunter, using social media sites such as LinkedIn and Monster.com, attending networking events, and posting ads online and in print publications. These are just a few ways to recruit new talent. The method used depends on how best to access the employable population. Also, those managing the recruiting processes must always consider legal compliance issues, diversity, appropriate knowledge, skills, abilities, and labor pricing.

Employee Inventories Managers use two methods during the planning process and the analysis of employees. The first, an employee inventory, involves examining all current employees at the four levels as well as projecting future needs in those areas. Managers note which workers are about to retire, those at risk of termination, and those who are viable candidates for promotion. The company can use two methods to fill the positions that are about to open: a promote-from-within policy and external recruiting.

Promote-from-within policies give priority to advancing current employees to higher ranks. Firms dedicated to this approach need quality manager-training programs along with recruiting systems that identify individuals who wish to join a company and stay by moving up through the ranks over time. Promote-from-within policies help build morale, because employees believe they can advance without having to change companies. This belief often inspires additional effort and creativity on the job. The disadvantages of promote-from-within policies begin with promotion decisions. Those who are passed over often have hard feelings about not getting the promotion. Also, when the firm does not attract outsiders, it risks becoming “stale” because new employees often bring in new, innovative ideas.

External recruiting exhibits the opposite advantages and disadvantages. Morale may suffer when employees believe they have to “move on to move up.” Further, when there are no internal

Employee Placement Chapter 4

opportunities for promotion, the firm’s best employees may be the first to leave because they have the greatest number of options. Conversely, external recruiting infuses new ideas and energy into a company. External managers are often hired to shake things up. They can view company programs and problems more objectively.

The compromise between the two approaches is an open listing that considers both internal and external candidates. This policy takes advantage of the potential for new ideas and new blood, but leaves the possibility of being promoted open for the company’s top employees.

Skills Inventories A second method of analyzing employees, a skills inventory, breaks down the employee’s resume or performance record into sets of strengths and talents exhibited. The skills inventory method has several uses. First, it can be a major asset when making a promotion decision by matching the right person to a supervisory position. Second, skill sets can be combined to create effec- tive teams and task forces. When one person has excellent organizing abilities and another has expertise in a key task, such as designing a new package or label for a product, these talents can be added with other skills for a more successful product launch or relaunch. Third, inventory information can become a useful part of the performance assessment process, indicating the individual’s strengths as well as areas needing improvement.

Succession Planning A major element of the strategic human resource planning process is the line of succession. Well-managed firms have capable CEOs and executive managers in place, and they also set out procedures to identify the type of manager—or the actual individual—who will move into the organization’s top spot. These plans are often made after consulting with the organization’s board of directors. Sometimes a person within the company appears to be well suited to tak- ing the reins. At other times, a series of potential external candidates are identified before a CEO announces plans to retire or move on. Companies that fail to make contingency plans for top-management positions become vulnerable to dramatic turmoil when turnover occurs at these levels.

Clearly, human resource planning demands attention at every level in the hierarchy. The more complete the information is, the better the strategic human resource plans will be. Employee inventories and skills inventories can assist in the process of identifying company strengths as well as company weaknesses. Succession planning is a key component of preparation in the area of human resource planning.

4.3 Employee Placement Simply put, the human resource function is designed to identify the required kinds of jobs and then find the right person for each job. Once jobs are designed, managers can begin recruiting employees for the various positions available.

The employee placement process consists of four activities: recruiting, selection, orientation, and employee development. These four steps constitute a primary organizational function. When the right person takes the job, the entire organization reaps the benefits. Someone who does not fit and cannot do the job will experience and perhaps cause problems almost immediately.

Employee Placement Chapter 4

Recruiting

Recruiting is a staffing activity that is not performed by the human resources department alone. Anyone in the organization can encourage a qualified person to submit an application or an indication of interest in working for the company. In the most general terms, effective recruiting systems are ongoing, systematic, and geared to the company’s needs.

Recruiting should be an ongoing process. Quality organizational leaders, working in concert with the human resources depart- ment, work to make sure the company always has a list of potential employees for use in beginning a candidate search. This process entails recruiting on a year-round basis. Effective recruiting is also system- atic. Every single place where a potential quality applicant might be found should be explored. Systematic recruiting con- sists of both internal and external sourc- ing. Internal sourcing means that company employees can encourage their friends and colleagues to submit applications. Leaders and supervisors attending conferences, civic events, and other public forums will be looking for qualified prospects. External sourcing involves the following options (Chruden & Sherman, 1980):

• advertisements (want ads) • public employment agencies • private employment agencies and search firms • private employment agencies temporary employment agencies • educational institutions • referrals from other companies (suppliers and retail outlets) • unsolicited applications (walk-ins) • professional organizations • labor unions

Recruiting should be geared to the company’s needs. Human resource managers consider the nature of the work before selecting methods of external recruiting. Factors that might influence the nature of recruiting include

• the industry type (service, manufacturing, hospitality, public utilities, etc.) • annual cycle of activity (need for part-time, seasonal employees) • company circumstances (growing versus declining firm)

Various industries experience differing needs with regard to employees. Notice that in the Zappos.com story, the firm spells out customer service as a primary employment character- istic. Manufacturing jobs would feature a different emphasis. Many blue-collar occupations rely more on physical skills, whereas many white-collar jobs focus on various forms of mental

Steven Senne/Associated Press

▲▲ The recruiting process generates candidates that will be the “best fit” for employment.

Employee Placement Chapter 4

activity. Further, many organizations, such as retailers and hospitality companies, experience peak seasons and slow seasons. Consequently, the companies are more likely to rely on seasonal or part-time employees during various months of the year. Also, growing companies recruit more vigorously than those in decline.

Currently, emerging technology and a mobile work force have changed recruiting. Many organi- zations now post job specifications online and receive applications in the same way. Paper cover letters and resumes, while still common, are giving way somewhat to electronic submissions. The general idea in recruiting remains to generate candidates who are the “best fit” for employment, to be evaluated by the department manager. The narrower the search is on the relevant charac- teristics, the more likely the organization is to compile a set of qualified candidates and eventually select the best hire.

Selection

Selection processes involve choosing from among the job applicants those who hold the relevant qualifications, as defined in the job or position. Selection should be designed to comply with organizational policy and labor laws. A job specification enumerates standard selection criteria. As noted in Table 4.2, the criteria normally include

• level of education • amounts and types of experience • special skills—physical • special skills—technical • personality characteristics • legal requirements

The standard selection process consists of these steps:

1. Announce the position. 2. Accept applications. 3. Conduct initial screening of applications. 4. Hold preliminary interviews. 5. Contact references and previous employers. 6. Select finalists. 7. Hold final interview, including the position’s supervisor. 8. Select and notify all finalists.

Position announcements should allow sufficient time for prospective employees to become aware that the job is open. A closing date normally is set for accepting applications. The initial screening quickly narrows the field to a viable list of candidates. The preliminary interview is brief, some- times over the phone. It is used to gain additional insight into whether a person should remain in the running for the job. References may not always yield the best information, because candidates are going to provide only the names of trusted associates and friends who may not give the entire picture about the person’s readiness for a job. Previous employers often offer guarded responses. Their answers should be considered carefully. An applicant’s current employer can be contacted only when the candidate grants permission to do so.

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The finalist list normally consists of three to five individuals who are the best prospects. The final interview with the human resource specialist, the supervisor, and other key parties provides the best idea about which candidate will fit. Intangibles such as chemistry and personality are assessed at that time. After an individual has been chosen and has accepted the position, com- mon courtesy requires notifying all applicants of the decision. While making a selection remains a bit of an art, recruitment of qualified candidates and well-defined selection criteria tend to improve the likelihood of a superior hire.

The final step in the hiring process often requires that the person offered the position undergo a background check, a credit check, or both. Though some companies do allow new hires to start their new jobs before obtaining these results, new employees are made aware that continued employment is contingent upon the results. This step is particularly important in fields where people work with vulnerable populations, or those careers in which employees have access to sensitive information or company funds.

Orientation

After making the hiring decision, work must be completed to successfully move the person into the organization. Orientation consists of a series of seemingly mundane activities; however, they can have a major impact on the employment experience. Typically, orientation programs include the following:

• paperwork and forms • introductions, work rules, company history, expectations, and tour • physical examination (when required) • answering questions

The paperwork includes tax forms such as Form W-4, insurance forms, and other informa- tion, including “contact in emergency” documents. The introduction-and-tour session should be designed to show the person where to park, to assign a locker or storage area if one is provided, and to assist the person in understanding the locations of all departments; the session includes meetings with key people in the worker’s assigned department. A physical exam may be required for some positions, to make sure the person is physically capable of performing the job. All ques- tions should be answered in a friendly way. The new employee may be nervous and worried about asking something “dumb.” The individual should be reassured that the company wants the per- son to feel as comfortable as possible.

Almost all new hires need to learn the ropes. Every company has its own procedures, which are important for all employees to understand. A few hours of orientation during the first day or two on the job helps ease new hires into the company’s way of doing things (Mathis & Jackson, 1997, p. 440). The orientation process serves several purposes, including creating a favorable impres- sion, enhancing interpersonal acceptance, and reducing turnover.

Create a Favorable Impression A quality orientation program creates a favorable impression of the organization and its work. The impression may be partially built before the new employee reports to work. Providing suf- ficient information about when and where to report the first day, handling all relevant paperwork efficiently, and having personable and efficient people assist the new hire all contribute to creat- ing a favorable sense of the organization. First impressions matter. New employees who feel their

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induction into a company is a professional and friendly experience will quickly develop positive attitudes about the organization. Conversely, those who feel neglected or taken for granted may develop negative attitudes that can last a long time.

Enhance Personal Acceptance Orientation helps ease the employee’s entrance into the work group. Meeting peers is a common concern among new employees. Information presented at the formal orientation may not always parallel the expectations of a group of employees. Many organizations use a “buddy” system, which pairs an existing employee with a new employee as part of the orientation process. This type of socialization can be advantageous to newcomers and to the established employee. Both parties may feel the company is trying to make the transition as smooth as possible.

Reduce Turnover Recruiting and selection are time-consuming and expensive. Companies that fail to orient new work- ers adequately often experience first-day or first-week quits. Then the company must repeat the entire hiring process. An effective orientation program can foster lower absenteeism and create higher job satisfaction, and most important, it can help reduce employee turnover by creating a stronger loyalty and greater commitment to organizational goals and values. These efforts are imperative, because employee turnover can cost 1.5 to 2.5 times the worker’s annual salary (Bliss, 2009).

While orientation may not seem glamorous, it has a bottom line. Orientation goes beyond what takes place in the human resource office. Ongoing employees and supervisors play key roles in helping new employees feel welcome and accepted.

Employee Development

Employee development takes place in two ways. As shown in Table 4.4, on-the-job and off-the-job methods are used. Managers select the combination that fits the position, the company’s goals, and the individual’s level of experience and training.

Table 4.4 Employee training methods

On the job

Demonstration A seasoned employee shows the worker how to perform the task; then the new hire does the job as the seasoned employee watches and provides feedback.

Apprenticeship This method is normally used for skilled blue-collar jobs (e.g., plumber, electrician, heavy equipment operator) and in some semiprofessional and professional occupations (e.g., nursing trainee).

Sink or swim The employee learns by doing.

Off the Job

Simulation The employee practices doing the job away from the shop or sales floor.

Film and classroom The new worker watches films or videos and receives additional training in a classroom setting.

Vestibule The employee engages in self-study and learning using a training manual or website.

E-Learning Many companies use electronic media to deliver training instead of relying solely on traditional classroom approaches. The training delivered by electronics-based technologies is referred to as

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e-learning. E-learning processes include web-based learning, computer-based learning, virtual classrooms, and digital collaboration. E-learning technology creates an advantage for the com- pany when it allows employees to develop their competencies at their own pace and at conve- nient times. For companies, it is less expensive than sending employees to traditional classroom training.

The goal of any training system or program is to make sure the employee is completely ready and can perform the assigned tasks. Any worker who feels unprepared will quickly come to believe the organization does not care. Many of these employees become early quits or terminations. Well-trained employees tend to be grateful for the help and support the company has provided.

4.4 The Employment Environment Employees on the job quickly absorb the nature of the workplace environment. A series of fac- tors determine employee reactions to the overall organization. The management team has four key areas of concern: compensation management, performance assessment, employee discipline systems, and workplace safety. The human resources department, in consultation with other managers and leaders, develops systems that best serve the staff.

Compensation Management

Compensation programs balance labor costs with the ability to attract and keep employees by providing fairness of rewards. The compensation structure should also support organizational objectives and strategies. Some people are surprised to learn that compensation programs actu- ally are based on one of two philosophies: equity versus exchange.

The equity philosophy reflects the belief that company leaders try their best to make the com- pensation system fair to employees. Many times, pay systems based on this philosophy rely on rate cards, across-the-board pay raises, and other methods that treat workers as uniformly as possible. Unions often stress fairness in pay systems.

The exchange philosophy, on the other hand, indicates management’s belief that some work skills and some employees are more valuable to the company than others. The company estab- lishes a pay system that reflects performance incentives and premiums for various skills, talents, and contributions to the organization. After company leaders decide upon the organization’s basic philosophy, other ingredients in the compensation system follow. Compensation has three major parts: base pay, incentives, and benefits.

Base Pay Table 4.5 lists four main ways of establish- ing pay systems. In most organizations, being hired means a guarantee of some basic level of pay, assuming that an employee comes to work and satisfactorily performs the job functions. Employees being paid a rate on par with the market average, or even above the market aver- age, are more likely to believe they are being paid fairly than those who are being paid below the market average.

Table 4.5 Forms of pay

By time Hourly, shift rate, day rate

By the unit Piece-rate pay

By the sale Commission

Professional/annual Salary

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Employees who think the level of pay is inadequate or that they are not being treated fairly become more likely to leave the organization.

Incentives Incentive pay systems should be designed to encourage superior performance. Incentive pay sys- tems take the forms of pay raises, bonuses, prizes in contests, and profit sharing.

Pay raises take two forms: across-the-board and merit raises. Across-the-board incentives appear to reflect the equity philosophy. Many times, an across-the-board raise will be paid as a percent- age of the person’s base salary. Note, however, that this means the highest-paid employees receive the biggest pay raises (4% of a $30,000 salary would be a $1,200 raise; 4% of a $50,000 salary would be a $2,000 raise), which contradicts the concept of equity in some sense. Merit raises provide larger incentives for employees to stand out in the crowd and are more likely to stress the exchange philosophy.

Bonuses can be paid to individuals and to groups. Individual bonuses often take the form of a year-end payment for excellent work. Group bonuses can be tied to sales contests, production contests, or periods of time, such as quarterly team incentives. Company leaders should make sure employees understand that higher levels of performance are required to receive the payments. If not, employees start to believe the checks are simply part of the regular pay system. Prizes in con- tests are similar to bonuses. The primary difference is that the prize can be something other than money. It can take the form of merchandise, a prepaid vacation trip, and other creative awards for winning a production, sales, or specially created contest. Profit-sharing plans provide long-term incentives to continue to work at high levels. They may be pegged to a stock price or bottom-line profits, take the form of actual shares of stock, or be paid out in some other way.

The goal of linking pay to strategically important outcomes will be to improve organizational pro- ductivity. In addition, incentives can lead employees to believe the company notices and rewards their efforts, thereby creating a stronger sense of loyalty to the company.

Benefits Employee benefits are in-kind payments or services provided to employees for their membership in the organization. The law requires certain benefits, including Social Security contributions, unemployment compensation, and workers compensation insurance. Employers may voluntarily offer other benefits. Typically, larger organizations offer health care, life insurance, disability insurance, and retirement pensions or savings plans. With passage of the Patient Protection and Affordable Care Act of 2010, all employers will be required to offer minimum employee health insurance coverage unless specifically exempted. (For further information and a timeline describ- ing when these changes go into effect, visit http://www.healthcare.gov/law/timeline/index.html.) Benefit programs also include pay for time not at work: vacations, holidays, sick days and absences, and short breaks during the regular workday. Unlike base pay, which differs according to the job a person holds, all full-time employees in an organization generally receive the same benefits.

Choosing which benefits to offer employees is a complex and important issue due to three fac- tors: recruiting, retention, and costs. Recruiting is affected because savvy applicants will move beyond base pay issues to find out if health insurance will be offered, the amount of vacation time allowed, and other enticements. Potential hires will compare packages being offered by compet- ing employers.