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HUMAN

RESOURCE

MANAGEMENT

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THIRTEENTH EDITION

GARY DESSLER FLORIDA INTERNATIONAL UNIVERSITY

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Library of Congress Cataloging-in-Publication Data

Dessler, Gary

Human resource management/Gary Dessler. 13th ed.

p. cm.

Includes bibliographical references and index.

ISBN-13: 978-0-13-266821-7 (hardcover: alk. paper)

ISBN-10: 0-13-266821-1 (hardcover: alk. paper)

1. Personnel management. I. Title.

HF5549.D4379 2012

658.3 dc23

2011037044

ISBN 10: 0-13-266821-1

ISBN 13: 978-0-13-266821-7

10 9 8 7 6 5 4 3 2 1

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DEDICATED TO SAMANTHA AND TAYLOR

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A01_DESS8217_13_SE_FM.QXD 12/2/11 7:28 PM Page iv

B R I E F C O N T E N T S

PART ONE INTRODUCTION 2

1 Introduction to Human Resource Management 2

2 Equal Opportunity and the Law 30

3 Human Resource Management Strategy and Analysis 70

PART TWO RECRUITMENT, PLACEMENT, AND TALENT

MANAGEMENT 102

4 Job Analysis and the Talent Management Process 102

5 Personnel Planning and Recruiting 136

6 Employee Testing and Selection 174

7 Interviewing Candidates 212

PART THREE TRAINING AND DEVELOPMENT 242

8 Training and Developing Employees 242

9 Performance Management and Appraisal 282

10 Employee Retention, Engagement, and Careers 320

PART FOUR COMPENSATION 350

11 Establishing Strategic Pay Plans 350

12 Pay for Performance and Financial Incentives 390

13 Benefits and Services 422

PART FIVE EMPLOYEE RELATIONS 458

14 Ethics and Employee Rights and Discipline 458

15 Labor Relations and Collective Bargaining 494

16 Employee Safety and Health 530

17 Managing Global Human Resources 576

18 Managing Human Resources in Small and Entrepreneurial Firms 604

APPENDICES

APPENDIX A PHR and SPHR Knowledge Base 633

APPENDIX B Comprehensive Cases 641

V

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A01_DESS8217_13_SE_FM.QXD 12/2/11 7:28 PM Page vi

C O N T E N T S

Preface xxiii

Acknowledgments xxvii

PART ONE INTRODUCTION 2

1 Introduction to Human Resource Management 2 WHAT IS HUMAN RESOURCE MANAGEMENT AND WHY IS IT IMPORTANT? 4

What Is Human Resource Management? 4

Why Is Human Resource Management Important to All Managers? 5

Line and Staff Aspects of Human Resource Management 6

Line Managers Human Resource Duties 7

Human Resource Manager s Duties 7

New Approaches to Organizing HR 9

Cooperative Line and Staff HR Management: An Example 9

THE TRENDS SHAPING HUMAN RESOURCE MANAGEMENT 10

Globalization and Competition Trends 11

Indebtedness ( Leverage ) and Deregulation 12

Technological Trends 12

Trends in the Nature of Work 13

* HR AS A PROFIT CENTER: Boosting Customer Service 14

Workforce and Demographic Trends 14

Economic Challenges and Trends 16

THE NEW HUMAN RESOURCE MANAGERS 17

Human Resource Management Yesterday and Today 17

They Focus More on Strategic, Big Picture Issues 17

* THE STRATEGIC CONTEXT: Building L.L.Bean 17

They Use New Ways to Provide Transactional Services 18

They Take an Integrated, Talent Management Approach to Managing

Human Resources 19

They Manage Ethics 19

They Manage Employee Engagement 19

They Measure HR Performance and Results 19

They Use Evidence-Based Human Resource Management 20

They Add Value 20

They Have New Competencies 21

HR Certification 22

THE PLAN OF THIS BOOK 22

The Basic Themes and Features 22

CHAPTER CONTENTS OVERVIEW 23

Part 1: Introduction 23

Part 2: Recruitment, Placement, and Talent Management 23

Part 3: Training and Development 23

Part 4: Compensation 23

Part 5: Employee Relations 23

The Topics Are Interrelated 24

CHAPTER SECTION SUMMARIES 25

DISCUSSION QUESTIONS 25

INDIVIDUAL AND GROUP ACTIVITIES 26

EXPERIENTIAL EXERCISE: HELPING THE DONALD 26

APPLICATION CASE: JACK NELSON S PROBLEM 27

CONTINUING CASE: CARTER CLEANING COMPANY 27

KEY TERMS 28

ENDNOTES 28

VII

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2 Equal Opportunity and the Law 30 EQUAL EMPLOYMENT OPPORTUNITY 1964 1991 32

Title VII of the 1964 Civil Rights Act 32

Executive Orders 32

Equal Pay Act of 1963 33

Age Discrimination in Employment Act of 1967 33

Vocational Rehabilitation Act of 1973 33

Pregnancy Discrimination Act of 1978 34

Federal Agency Guidelines 34

Early Court Decisions Regarding Equal Employment Opportunity 34

EQUAL EMPLOYMENT OPPORTUNITY 1990 91 PRESENT 35

The Civil Rights Act of 1991 35

The Americans with Disabilities Act 36

Genetic Information Nondiscrimination Act of 2008 (GINA) 39

State and Local Equal Employment Opportunity Laws 39

Sexual Harassment 39

DEFENSES AGAINST DISCRIMINATION ALLEGATIONS 43

The Central Role of Adverse Impact 44

Bona Fide Occupational Qualification 46

Business Necessity 47

Other Considerations in Discriminatory Practice Defenses 48

ILLUSTRATIVE DISCRIMINATORY EMPLOYMENT PRACTICES 48

A Note on What You Can and Cannot Do 48

Recruitment 49

Selection Standards 49

Sample Discriminatory Promotion, Transfer, and Layoff Practices 50

What the Supervisor Should Keep in Mind 51

THE EEOC ENFORCEMENT PROCESS 51

Voluntary Mediation 53

Mandatory Arbitration of Discrimination Claims 54

DIVERSITY MANAGEMENT AND AFFIRMATIVE ACTION PROGRAMS 55

Diversity s Potential Pros and Cons 55

* HR AS A PROFIT CENTER 56

Managing Diversity 56

Encouraging Inclusiveness 57

Developing a Multicultural Consciousness 58

Equal Employment Opportunity Versus Affirmative Action 59

Implementing the Affirmative Action Program 59

Reverse Discrimination 60

CHAPTER SECTION SUMMARIES 61

DISCUSSION QUESTIONS 62

INDIVIDUAL AND GROUP ACTIVITIES 62

EXPERIENTIAL EXERCISE: SPACE CADET OR VICTIM? 63

APPLICATION CASE: AN ACCUSATION OF SEXUAL HARASSMENT IN PRO SPORTS 63

CONTINUING CASE: CARTER CLEANING COMPANY 64

KEY TERMS 65

ENDNOTES 65

3 Human Resource Management Strategy and Analysis 70 THE STRATEGIC MANAGEMENT PROCESS 72

* THE STRATEGIC CONTEXT: The Shanghai Portman Hotel 72

Goal-Setting and the Planning Process 72

Strategic Planning 73

Improving Productivity Through HRIS: Using Computerized Business Planning Software 76

Types of Strategies 76

Top Managers Role in Strategic Planning 78

VIII CONTENTS

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Departmental Managers Strategic Planning Roles 78

Departmental Managers Strategic Planning Roles in Action: Improving Mergers and

Acquisitions 79

STRATEGIC HUMAN RESOURCE MANAGEMENT 80

Defining Strategic Human Resource Management 80

Human Resource Strategies and Policies 82

HR AS A PROFIT CENTER: Albertsons Example 82

Strategic Human Resource Management Tools 82

HR METRICS AND BENCHMARKING 84

Types of Metrics 85

Improving Productivity Through HRIS: Tracking Applicant Metrics for Improved Talent

Management 85

Benchmarking in Action 86

Strategy and Strategy-Based Metrics 87

Workforce/Talent Analytics and Data Mining 87

HR AS A PROFIT CENTER: Using Workforce/Talent Analytics 88

What Are HR Audits? 89

Evidence-Based HR and the Scientific Way of Doing Things 90

WHAT ARE HIGH-PERFORMANCE WORK SYSTEMS? 91

High-Performance Human Resource Policies and Practices 92

CHAPTER SECTION SUMMARIES 93

DISCUSSION QUESTIONS 94

INDIVIDUAL AND GROUP ACTIVITIES 94

EXPERIENTIAL EXERCISE: DEVELOPING AN HR STRATEGY FOR STARBUCKS 95

APPLICATION CASE: SIEMENS BUILDS A STRATEGY-ORIENTED HR SYSTEM 95

CONTINUING CASE: CARTER CLEANING COMPANY 96

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 96

KEY TERMS 98

ENDNOTES 99

PART 1 VIDEO CASES APPENDIX 100

PART TWO RECRUITMENT, PLACEMENT, AND TALENT

MANAGEMENT 102

4 Job Analysis and the Talent Management Process 102 THE TALENT MANAGEMENT PROCESS 104

What Is Talent Management? 104

THE BASICS OF JOB ANALYSIS 105

Uses of Job Analysis Information 106

THE STRATEGIC CONTEXT: Daimler Alabama Example 107

Conducting a Job Analysis 107

HR AS A PROFIT CENTER: Boosting Productivity through Work Redesign 108

Job Analysis Guidelines 110

METHODS FOR COLLECTING JOB ANALYSIS INFORMATION 110

The Interview 110

Questionnaires 113

Observation 114

Participant Diary/Logs 114

Quantitative Job Analysis Techniques 114

Internet-Based Job Analysis 116

WRITING JOB DESCRIPTIONS 118

Job Identification 118

Job Summary 119

Relationships 121

Responsibilities and Duties 121

CONTENTS IX

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MANAGING THE NEW WORKFORCE: Writing Job Descriptions That Comply

with the ADA 122

Standards of Performance and Working Conditions 122

Duty: Accurately Posting Accounts Payable 122

Using the Internet for Writing Job Descriptions 122

WRITING JOB SPECIFICATIONS 126

Specifications for Trained Versus Untrained Personnel 126

Specifications Based on Judgment 126

Job Specifications Based on Statistical Analysis 127

Using Task Statements 127

PROFILES IN TALENT MANAGEMENT 128

Competencies and Competency-Based Job Analysis 128

How to Write Job Competencies-Based Job Descriptions 130

CHAPTER SECTION SUMMARIES 131

DISCUSSION QUESTIONS 132

INDIVIDUAL AND GROUP ACTIVITIES 132

EXPERIENTIAL EXERCISE: THE INSTRUCTOR S JOB DESCRIPTION 132

APPLICATION CASE: THE FLOOD 133

CONTINUING CASE: CARTER CLEANING COMPANY 133

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL

PARIS CASE 134

KEY TERMS 134

ENDNOTES 134

5 Personnel Planning and Recruiting 136 INTRODUCTION 138

WORKFORCE PLANNING AND FORECASTING 138

Strategy and Workforce Planning 138

THE STRATEGIC CONTEXT: IBM 139

Forecasting Personnel Needs (Labor Demand) 139

Improving Productivity Through HRIS: Computerized Personnel Forecasting 142

Forecasting the Supply of Inside Candidates 142

Forecasting the Supply of Outside Candidates 144

Talent Management and Predictive Workforce Monitoring 144

Developing an Action Plan to Match Projected Labor Supply and Labor Demand 145

The Recruiting Yield Pyramid 145

THE NEED FOR EFFECTIVE RECRUITING 146

Why Recruiting Is Important 146

What Makes Recruiting a Challenge? 146

Organizing How You Recruit 146

INTERNAL SOURCES OF CANDIDATES 147

Using Internal Sources: Pros and Cons 147

Finding Internal Candidates 147

Rehiring 147

Succession Planning 148

Improving Productivity Through HRIS: Succession and Talent Planning Systems 148

OUTSIDE SOURCES OF CANDIDATES 149

Recruiting via the Internet 149

Advertising 152

Employment Agencies 154

Temp Agencies and Alternative Staffing 155

Offshoring and Outsourcing Jobs 157

Executive Recruiters 157

On-Demand Recruiting Services 158

College Recruiting 158

Referrals and Walk-Ins 159

Telecommuters 160

Military Personnel 160

X CONTENTS

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Recruiting Source Use and Effectiveness 160

Evidence-Based HR: Measuring Recruiting Effectiveness 161

HR AS A PROFIT CENTER: GE Medical Recruitment Process Outsourcing (RPO) example 162

Improving Productivity Through HRIS: An Integrated Approach to Recruiting 162

RECRUITING A MORE DIVERSE WORKFORCE 162

Single Parents 162

Older Workers 163

Recruiting Minorities 163

Welfare-to-Work 164

The Disabled 164

DEVELOPING AND USING APPLICATION FORMS 164

Purpose of Application Forms 164

Application Guidelines 166

Application Forms and EEO Law 166

Using Application Forms to Predict Job Performance 167

Mandatory Arbitration 167

CHAPTER SECTION SUMMARIES 167

DISCUSSION QUESTIONS 168

INDIVIDUAL AND GROUP ACTIVITIES 168

EXPERIENTIAL EXERCISE: THE NURSING SHORTAGE 169

APPLICATION CASE: FINDING PEOPLE WHO ARE PASSIONATE ABOUT WHAT THEY DO 169

CONTINUING CASE: CARTER CLEANING COMPANY 170

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL

PARIS CASE 170

KEY TERMS 171

ENDNOTES 171

6 Employee Testing and Selection 174 WHY CAREFUL SELECTION IS IMPORTANT 176

Person and Job/Organization Fit 176

THE STRATEGIC CONTEXT: Crowd Sourcing at Google 176

BASIC TESTING CONCEPTS 177

Reliability 177

Validity 178

Evidence-Based HR: How to Validate a Test 180

Bias 182

Utility Analysis 182

HR AS A PROFIT CENTER: Reducing Turnover at KeyBank 183

Validity Generalization 183

Test Takers Individual Rights and Test Security 183

How Do Employers Use Tests at Work? 184

Computerized and Online Testing 185

TYPES OF TESTS 186

Tests of Cognitive Abilities 186

Tests of Motor and Physical Abilities 187

Measuring Personality and Interests 187

Achievement Tests 190

WORK SAMPLES AND SIMULATIONS 190

Using Work Sampling for Employee Selection 190

Situational Judgment Tests 191

Management Assessment Centers 191

Situational Testing and Video-Based Situational Testing 192

Computerized Multimedia Candidate Assessment Tools 192

The Miniature Job Training and Evaluation Approach 193

Realistic Job Previews 193

HR in Practice: Testing Techniques for Managers 193

Summary 194

CONTENTS XI

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BACKGROUND INVESTIGATIONS AND OTHER SELECTION METHODS 194

Why Perform Background Investigations and Reference Checks? 194

The Legal Dangers and How to Avoid Them 195

How to Check a Candidate s Background 196

The Social Network: Checking Applicants Social Postings 198

Using Preemployment Information Services 199

The Polygraph and Honesty Testing 199

Graphology 201

Human Lie Detectors 201

Physical Exams 201

Substance Abuse Screening 202

Complying with Immigration Law 203

Improving Productivity Through HRIS: Using Automated Applicant Tracking and Screening

Systems 204

CHAPTER SECTION SUMMARIES 204

DISCUSSION QUESTIONS 205

INDIVIDUAL AND GROUP ACTIVITIES 205

EXPERIENTIAL EXERCISE: A TEST FOR A RESERVATION CLERK 206

APPLICATION CASE: THE INSIDER 206

CONTINUING CASE: HONESTY TESTING AT CARTER CLEANING COMPANY 207

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 207

KEY TERMS 208

ENDNOTES 208

7 Interviewing Candidates 212 BASIC TYPES OF INTERVIEWS 214

THE STRATEGIC CONTEXT: Whirlpool Corp. 214

Structured Versus Unstructured Interviews 214

Interview Content (What Types of Questions to Ask) 215

How Should We Administer the Interview? 218

HR AS A PROFIT CENTER: Great Western Bank 220

Three Ways to Make the Interview Usefulness 221

THE ERRORS THAT UNDERMINE AN INTERVIEW S USEFULNESS 221

First Impressions (Snap Judgments) 222

Not Clarifying What the Job Requires 222

Candidate-Order (Contrast) Error and Pressure to Hire 222

Nonverbal Behavior and Impression Management 223

Effect of Personal Characteristics: Attractiveness, Gender, Race 223

MANAGING THE NEW WORKFORCE: Applicant Disability and the Employment

Interview 224

Interviewer Behavior 224

HOW TO DESIGN AND CONDUCT AN EFFECTIVE INTERVIEW 225

Designing a Structured Situational Interview 225

How to Conduct an Effective Interview 226

Talent Management: Profiles and Employee Interviews 229

CHAPTER SECTION SUMMARIES 229

DISCUSSION QUESTIONS 230

INDIVIDUAL AND GROUP ACTIVITIES 230

EXPERIENTIAL EXERCISE: THE MOST IMPORTANT PERSON YOU LL EVER HIRE 231

APPLICATION CASE: THE OUT-OF-CONTROL INTERVIEW 231

CONTINUING CASE: CARTER CLEANING COMPANY 232

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 232

KEY TERMS 233

ENDNOTES 233

APPENDIX 1 FOR CHAPTER 7 APPLICANT INTERVIEW GUIDE 236

APPENDIX 2 FOR CHAPTER 7 INTERVIEW GUIDE FOR INTERVIEWEES 238

PART 2 VIDEO CASES APPENDIX 240

XII CONTENTS

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PART THREE TRAINING AND DEVELOPMENT 242

8 Training and Developing Employees 242 ORIENTING AND ONBOARDING NEW EMPLOYEES 244

The Purposes of Employee Orientation/Onboarding 244

The Orientation Process 244

OVERVIEW OF THE TRAINING PROCESS 246

Aligning Strategy and Training 246

THE STRATEGIC CONTEXT 246

Training and Performance 247

The ADDIE Five-Step Training Process 247

Conducting the Training Needs Analysis 247

Designing the Training Program 250

Developing the Program 253

IMPLEMENTING TRAINING PROGRAMS 253

On-the-Job Training 253

Apprenticeship Training 255

Informal Learning 255

Job Instruction Training 255

Lectures 256

Programmed Learning 256

Audiovisual-Based Training 257

Vestibule Training 257

Electronic Performance Support Systems (EPSS) 257

Videoconferencing 258

Computer-Based Training (CBT) 258

Simulated Learning 258

Interactive Learning 259

Internet-Based Training 259

Improving Productivity Through HRIS: Learning Management Systems 260

Mobile Learning 260

The Virtual Classroom 261

Lifelong and Literacy Training Techniques 261

Team Training 262

IMPLEMENTING MANAGEMENT DEVELOPMENT PROGRAMS 263

Strategy and Development 263

Managerial On-the-Job Training 263

Off-the-Job Management Training and Development

Techniques 264

Leadership Development at GE 266

Talent Management and Mission-Critical Employees: Differential Development

Assignments 267

MANAGING ORGANIZATIONAL CHANGE PROGRAMS 268

What to Change 268

Lewin s Change Process 269

Leading Organizational Change 269

Using Organizational Development 270

EVALUATING THE TRAINING EFFORT 272

Designing the Study 272

Training Effects to Measure 273

HR AS A PROFIT CENTER: Judging Training s Impact 274

CHAPTER SECTION SUMMARIES 275

DISCUSSION QUESTIONS 275

INDIVIDUAL AND GROUP ACTIVITIES 276

EXPERIENTIAL EXERCISE: FLYING THE FRIENDLIER SKIES 276

APPLICATION CASE: REINVENTING THE WHEEL AT APEX DOOR COMPANY 277

CONTINUING CASE: CARTER CLEANING COMPANY 277

CONTENTS XIII

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TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 278

KEY TERMS 278

ENDNOTES 278

9 Performance Management and Appraisal 282 BASIC CONCEPTS IN PERFORMANCE MANAGEMENT AND APPRAISAL 284

The Performance Appraisal Process 284

Why Appraise Performance? 285

HR AS A PROFIT CENTER: Setting Performance Goals at Ball Corporation 286

The Importance of Continual Feedback 286

Performance Management 286

THE STRATEGIC CONTEXT: TRW 287

Defining the Employee s Goals and Performance Standards 287

Who Should Do the Appraising? 288

TECHNIQUES FOR APPRAISING PERFORMANCE 290

Graphic Rating Scale Method 290

Alternation Ranking Method 294

Paired Comparison Method 294

Forced Distribution Method 294

Critical Incident Method 295

Narrative Forms 296

Behaviorally Anchored Rating Scales 296

Mixed Standard Scales 299

Management by Objectives 300

Computerized and Web-Based Performance Appraisal 300

Electronic Performance Monitoring 301

Appraisal in Practice 301

DEALING WITH APPRAISAL PROBLEMS AND INTERVIEWS 302

Potential Appraisal Problems 303

Guidelines for Effective Appraisals 304

Appraisals and the Law 306

Managing the Appraisal Interview 306

PERFORMANCE MANAGEMENT 309

Performance Management vs. Performance Appraisal 309

Using Information Technology to Support Performance Management 310

TALENT MANAGEMENT PRACTICES AND EMPLOYEE APPRAISAL 311

Appraising and Actively Managing Employees 311

Segmenting and Actively Managing Employees in Practice 311

CHAPTER SECTION SUMMARIES 312

DISCUSSION QUESTIONS 313

INDIVIDUAL AND GROUP ACTIVITIES 313

EXPERIENTIAL EXERCISE: GRADING THE PROFESSOR 314

APPLICATION CASE: APPRAISING THE SECRETARIES AT SWEETWATER U 314

CONTINUING CASE: CARTER CLEANING COMPANY 315

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 316

KEY TERMS 316

ENDNOTES 316

10 Employee Retention, Engagement, and Careers 320 MANAGING EMPLOYEE TURNOVER AND RETENTION 322

Costs of Turnover 322

HR AS A PROFIT CENTER 322

Managing Voluntary Turnover 322

Retention Strategies for Reducing Voluntary Turnover 323

A Comprehensive Approach to Retaining Employees 324

THE STRATEGIC CONTEXT: IBM Aims for Flexibility 324

Managing Involuntary Turnover 325

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Talent Management and Employee Retention 325

Job Withdrawal 325

EMPLOYEE ENGAGEMENT 326

Why Engagement Is Important 326

Actions That Foster Engagement 326

Monitoring Employee Engagement 326

CAREER MANAGEMENT 327

Careers Terminology 327

Careers Today 328

Psychological Contract 328

The Employee s Role in Career Management 328

The Employer s Role in Career Management 330

Career Management Systems 330

Gender Issues in Career Development 332

The Manager s Role 333

IMPROVING COACHING SKILLS 333

Building Your Coaching Skills 333

Building Your Mentoring Skills 334

Improving Productivity Through HRIS: Integrating Talent Management and Career

and Succession Planning 336

MAKING PROMOTION DECISIONS 337

Decision 1: Is Seniority or Competence the Rule? 337

Decision 2: How Should We Measure Competence? 337

Decision 3: Is the Process Formal or Informal? 338

Decision 4: Vertical, Horizontal, or Other? 338

Practical Considerations 338

Sources of Bias in Promotion Decisions 338

Promotions and the Law 339

Managing Transfers 339

Managing Retirements 340

CHAPTER SECTION SUMMARIES 341

DISCUSSION QUESTIONS 341

INDIVIDUAL AND GROUP ACTIVITIES 342

EXPERIENTIAL EXERCISE: WHERE AM I GOING . . . AND WHY? 342

APPLICATION CASE: GOOGLE REACTS 343

CONTINUING CASE: CARTER CLEANING COMPANY 343

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 343

KEY TERMS 344

ENDNOTES 344

PART 3 VIDEO CASES APPENDIX 347

PART FOUR COMPENSATION 350

11 Establishing Strategic Pay Plans 350 BASIC FACTORS IN DETERMINING PAY RATES 352

Aligning Total Rewards with Strategy 352

THE STRATEGIC CONTEXT: Wegmans Foods 352

Equity and Its Impact on Pay Rates 353

Legal Considerations in Compensation 354

MANAGING THE NEW WORKFORCE: The Independent Contractor 355

Union Influences on Compensation Decisions 358

Pay Policies 358

HR AS A PROFIT CENTER: Wegmans Foods 359

JOB EVALUATION METHODS 359

Compensable Factors 360

Preparing for the Job Evaluation 360

CONTENTS XV

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Job Evaluation Methods: Ranking 361

Job Evaluation Methods: Job Classification 362

Job Evaluation Methods: Point Method 363

Computerized Job Evaluations 363

HOW TO CREATE A MARKET-COMPETITIVE PAY PLAN 364

1. Choose Benchmark Jobs 364

2. Select Compensable Factors 364

3. Assign Weights to Compensable Factors 365

4. Convert Percentages to Points for Each Factor 365

5. Define Each Factor s Degrees 366

6. Determine for Each Job Its Factors Degrees and Assign Points 366

7. Review Job Descriptions and Job Specifications 366

8. Evaluate the Jobs 367

9. Draw the Current (Internal) Wage Curve 368

10. Conduct a Market Analysis: Salary Surveys 368

11. Draw the Market (External) Wage Curve 370

12. Compare and Adjust Current and Market Wage Rates for Jobs 370

13. Develop Pay Grades 371

14. Establish Rate Ranges 371

15. Address Remaining Jobs 373

16. Correct Out-of-Line Rates 373

PRICING MANAGERIAL AND PROFESSIONAL JOBS 374

Compensating Executives and Managers 374

What Determines Executive Pay? 374

Compensating Professional Employees 375

CONTEMPORARY TOPICS IN COMPENSATION 376

Competency-Based Pay 376

Broadbanding 378

Actively Managing Compensation Allocations and Talent Management 380

Comparable Worth 380

Board Oversight of Executive Pay 381

Total Rewards and Tomorrow s Pay Programs 381

Improving Productivity Through HRIS: Automating Strategic

Compensation Administration 382

CHAPTER SECTION SUMMARIES 382

DISCUSSION QUESTIONS 383

INDIVIDUAL AND GROUP ACTIVITIES 383

EXPERIENTIAL EXERCISE: RANKING THE COLLEGE S ADMINISTRATORS 384

APPLICATION CASE: SALARY INEQUITIES AT ACME MANUFACTURING 384

CONTINUING CASE: CARTER CLEANING COMPANY 385

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 385

KEY TERMS 386

ENDNOTES 386

12 Pay for Performance and Financial Incentives 390 MONEY AND MOTIVATION 392

Linking Strategy, Performance, and Incentive Pay 392

THE STRATEGIC CONTEXT: The Car Sales Commission 392

Motivation and Incentives 393

Incentive Pay Terminology 395

Employee Incentives and the Law 395

INDIVIDUAL EMPLOYEE INCENTIVE AND RECOGNITION PROGRAMS 396

Piecework Plans 396

Merit Pay as an Incentive 396

Incentives for Professional Employees 398

Nonfinancial and Recognition-Based Awards 398

Online and IT-Supported Awards 400

Job Design 400

XVI CONTENTS

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INCENTIVES FOR SALESPEOPLE 400

Salary Plan 401

Commission Plan 401

Combination Plan 401

Maximizing Sales Force Results 402

Evidence-Based HR: How Effective Are Your Incentives? 402

INCENTIVES FOR MANAGERS AND EXECUTIVES 403

Strategy and the Executive s Long-Term and Total Rewards Package 403

Sarbanes-Oxley 404

Short-Term Incentives and the Annual Bonus 404

Strategic Long-Term Incentives 406

Other Executive Incentives 407

TEAM AND ORGANIZATIONWIDE INCENTIVE PLANS 407

How to Design Team Incentives 407

Evidence-Based HR: How Effective Are Your Incentives? 408

Profit-Sharing Plans 409

Scanlon Plans 409

Other Gainsharing Plans 410

At-Risk Pay Plans 410

Employee Stock Ownership Plans 411

DESIGNING EFFECTIVE INCENTIVE PROGRAMS 411

HR AS A PROFIT CENTER: The Impact of Financial and Nonfinancial Incentives 412

The Five Building Blocks of Effective Incentive Plans 412

Incentive Plans in Practice: Nucor 413

CHAPTER SECTION SUMMARIES 413

DISCUSSION QUESTIONS 414

INDIVIDUAL AND GROUP ACTIVITIES 414

EXPERIENTIAL EXERCISE: MOTIVATING THE SALES FORCE AT EXPRESS AUTO 415

APPLICATION CASE: INSERTING THE TEAM CONCEPT INTO COMPENSATION OR NOT 415

CONTINUING CASE: CARTER CLEANING COMPANY 416

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 417

KEY TERMS 417

ENDNOTES 418

13 Benefits and Services 422 THE BENEFITS PICTURE TODAY 424

Policy Issues 424

THE STRATEGIC CONTEXT: NES Rentals 425

PAY FOR TIME NOT WORKED 425

Unemployment Insurance 425

Vacations and Holidays 427

Sick Leave 427

Evidence-Based HR: Tracking Sick Leave 428

HR AS A PROFIT CENTER: Cutting Absences at the Driver and Vehicle Licensing Agency 428

Parental Leave and the Family and Medical Leave Act 429

Severance Pay 431

Supplemental Unemployment Benefits 432

INSURANCE BENEFITS 432

Workers Compensation 432

Hospitalization, Health, and Disability Insurance 433

The Legal Side of Health Benefits 434

Trends in Employer Health Care Cost Control 435

Long-Term Care 437

Life Insurance 438

Benefits for Part-Time and Contingent Workers 438

RETIREMENT BENEFITS 438

Social Security 438

CONTENTS XVII

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Pension Plans 438

Pension Planning and the Law 441

Pensions and Early Retirement 442

Improving Productivity Through HRIS: Online Benefits Management Systems 442

PERSONAL SERVICES AND FAMILY-FRIENDLY BENEFITS 443

Personal Services 443

Family-Friendly (Work Life) Benefits 443

Other Job-Related Benefits 445

Executive Perquisites 445

FLEXIBLE BENEFITS PROGRAMS 446

The Cafeteria Approach 446

Benefits and Employee Leasing 447

Flexible Work Schedules 448

CHAPTER SECTION SUMMARIES 449

DISCUSSION QUESTIONS 450

INDIVIDUAL AND GROUP ACTIVITIES 450

EXPERIENTIAL EXERCISE: REVISING THE BENEFITS PACKAGE 450

APPLICATION CASE: STRIKING FOR BENEFITS 451

CONTINUING CASE: CARTER CLEANING COMPANY 451

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 452

KEY TERMS 452

ENDNOTES 453

PART 4 VIDEO CASES APPENDIX 456

PART FIVE EMPLOYEE RELATIONS 458

14 Ethics and Employee Rights and Discipline 458 ETHICS AND FAIR TREATMENT AT WORK 460

THE STRATEGIC CONTEXT: Berkshire Hathaway 460

What Is Ethics? 461

Ethics and the Law 461

Ethics, Justice, and Fair Treatment 461

Ethics, Public Policy, and Employee Rights 462

WHAT SHAPES ETHICAL BEHAVIOR AT WORK? 463

There s No One Smoking Gun 463

The Person (What Makes Bad Apples?) 464

Outside Forces That Shape Ethical Decisions (Bad Barrels) 464

In Summary: Some Things to Keep in Mind About Ethical Behavior at Work 466

USING HUMAN RESOURCE MANAGEMENT METHODS TO PROMOTE ETHICS

AND FAIR TREATMENT 467

Selection 467

Ethics Training 468

Performance Appraisal 468

Reward and Disciplinary Systems 468

Managing Ethics Compliance 468

MANAGING EMPLOYEE DISCIPLINE AND PRIVACY 468

Fairness in Disciplining 469

Bullying and Victimization 469

What Causes Unfair Behavior 470

Basics of a Fair and Just Disciplinary Process 471

Employee Privacy 474

Employee Monitoring 474

MANAGING DISMISSALS 476

Termination at Will and Wrongful Discharge 476

Grounds for Dismissal 477

Avoiding Wrongful Discharge Suits 478

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HR AS A PROFIT CENTER: Wrongful Terminations 479

Personal Supervisory Liability 480

The Termination Interview 481

Layoffs, Downsizing, and the Plant Closing Law 483

Adjusting to Downsizings and Mergers 485

CHAPTER SECTION SUMMARIES 486

DISCUSSION QUESTIONS 487

INDIVIDUAL AND GROUP ACTIVITIES 487

EXPERIENTIAL EXERCISE: DISCIPLINE OR NOT? 487

APPLICATION CASE: ENRON, ETHICS, AND ORGANIZATIONAL CULTURE 488

CONTINUING CASE: CARTER CLEANING COMPANY 489

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 489

KEY TERMS 490

ETHICS QUIZ ANSWERS 490

ENDNOTES 490

15 Labor Relations and Collective Bargaining 494 THE LABOR MOVEMENT 496

THE STRATEGIC CONTEXT: The Anti-Walmart 496

Why Do Workers Organize? 496

What Do Unions Want? 497

The AFL-CIO and the SEIU 498

UNIONS AND THE LAW 498

Period of Strong Encouragement: The Norris-LaGuardia (1932) and National Labor Relations

(or Wagner) Acts (1935) 499

Period of Modified Encouragement Coupled with Regulation: The Taft-Hartley Act (1947) 501

Unfair Union Labor Practices 501

THE UNION DRIVE AND ELECTION 502

Step 1. Initial Contact 502

Step 2. Obtaining Authorization Cards 504

Step 3. Hold a Hearing 505

Step 4. The Campaign 505

Step 5. The Election 506

How to Lose an NLRB Election 507

Evidence-Based HR: What to Expect the Union to Do to Win the Election 508

The Supervisor s Role 508

Rules Regarding Literature and Solicitation 509

Decertification Elections: Ousting the Union 509

THE COLLECTIVE BARGAINING PROCESS 509

What Is Collective Bargaining? 509

What Is Good Faith? 510

The Negotiating Team 510

HR AS A PROFIT CENTER: Costing the Contract 511

Bargaining Items 511

Bargaining Hints 511

Impasses, Mediation, and Strikes 512

Improving Productivity Through HRIS: Unions Go High-Tech 516

The Contract Agreement 516

DEALING WITH DISPUTES AND GRIEVANCES 517

Sources of Grievances 517

The Grievance Procedure 518

Guidelines for Handling Grievances 519

THE UNION MOVEMENT TODAY AND TOMORROW 520

Why Union Membership Is Down 520

An Upswing for Unions? 520

Card Check and Other New Union Tactics 521

High-Performance Work Systems, Employee Participation, and Unions 521

CONTENTS XIX

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CHAPTER SECTION SUMMARIES 523

DISCUSSION QUESTIONS 524

INDIVIDUAL AND GROUP ACTIVITIES 524

EXPERIENTIAL EXERCISE: THE UNION-ORGANIZING CAMPAIGN AT PIERCE U. 524

APPLICATION CASE: NEGOTIATING WITH THE WRITERS GUILD OF AMERICA 525

CONTINUING CASE: CARTER CLEANING COMPANY 525

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 526

KEY TERMS 526

ENDNOTES 527

16 Employee Safety and Health 530 SAFETY AND THE MANAGER 532

Why Safety Is Important 532

Management s Role in Safety 532

What Top Management Can Do 532

THE STRATEGIC CONTEXT: Deepwater Horizon 532

The Supervisor s Role in Safety 533

OCCUPATIONAL SAFETY LAW 533

OSHA Standards and Record Keeping 533

Inspections and Citations 535

Responsibilities and Rights of Employers and Employees 538

WHAT CAUSES ACCIDENTS? 539

What Causes Unsafe Conditions and Other Work-Related Safety Problems? 539

What Causes Unsafe Acts? (A Second Basic Cause of Accidents) 540

HOW TO PREVENT ACCIDENTS 540

Reducing Unsafe Conditions 540

MANAGING THE NEW WORKFORCE: Protecting Vulnerable Workers 545

Reducing Unsafe Acts 546

Reducing Unsafe Acts through Selection and Placement 546

Reducing Unsafe Acts through Training 546

MANAGING THE NEW WORKFORCE: Safety Training for Hispanic Workers 547

Reducing Unsafe Acts through Motivation: Posters, Incentives, and Positive Reinforcement 547

Reducing Unsafe Acts through Behavior-Based Safety 548

Reducing Unsafe Acts through Employee Participation 548

Reducing Unsafe Acts by Conducting Safety and Health Audits and Inspections 549

Controlling Workers Compensation Costs 550

HR AS A PROFIT CENTER: Reducing Workers Compensation Claims 551

WORKPLACE HEALTH HAZARDS: PROBLEMS AND REMEDIES 551

The Basic Industrial Hygiene Program 552

Asbestos Exposure at Work 552

Infectious Diseases 553

Air Quality 553

Alcoholism and Substance Abuse 553

Stress, Burnout, and Depression 555

Solving Computer-Related Ergonomic Problems 557

Repetitive Motion Disorders 557

Workplace Smoking 558

HR AS A PROFIT CENTER: Wellness Pays 558

Violence at Work 558

Workplace Violence Supervisory Training 560

OCCUPATIONAL SECURITY AND SAFETY 561

Basic Prerequisites for a Crime Prevention Plan 562

Setting Up a Basic Security Program 562

Evacuation Plans 563

Company Security and Employee Privacy 563

CHAPTER SECTION SUMMARIES 564

DISCUSSION QUESTIONS 564

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INDIVIDUAL AND GROUP ACTIVITIES 565

EXPERIENTIAL EXERCISE: HOW SAFE IS MY UNIVERSITY? 565

APPLICATION CASE: THE NEW SAFETY AND HEALTH PROGRAM 569

CONTINUING CASE: CARTER CLEANING COMPANY 570

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 570

KEY TERMS 571

ENDNOTES 571

17 Managing Global Human Resources 576 The Manager s Global Challenge 578

THE STRATEGIC CONTEXT: Unionizing Walmart Stores in China 578

ADAPTING HUMAN RESOURCE ACTIVITIES TO INTERCOUNTRY

DIFFERENCES 578

Cultural Factors 579

Economic Systems 580

Legal, Political, and Labor Relations Factors 580

Ethics and Codes of Conduct 581

HR Abroad Example: The European Union 581

HR Abroad Example: China 581

STAFFING THE GLOBAL ORGANIZATION 582

International Staffing: Home or Local? 582

HR AS A PROFIT CENTER: Reducing Expatriate Costs 583

Offshoring 585

Management Values and International Staffing Policy 585

Selecting Expatriate Managers 586

Avoiding Early Expatriate Returns 589

TRAINING AND MAINTAINING EMPLOYEES ABROAD 590

Orienting and Training Employees on International Assignment 590

Appraising Managers Abroad 590

Compensating Managers Abroad 591

Labor Relations Abroad 593

Terrorism, Safety, and Global HR 593

Repatriation: Problems and Solutions 594

Improving Productivity Through HRIS: Taking the HRIS Global 595

MANAGING HR LOCALLY: HOW TO PUT INTO PRACTICE A GLOBAL HR SYSTEM 595

Developing a More Effective Global HR System 596

Making the Global HR System More Acceptable 596

Implementing the Global HR System 597

CHAPTER SECTION SUMMARIES 597

DISCUSSION QUESTIONS 598

INDIVIDUAL AND GROUP ACTIVITIES 598

EXPERIENTIAL EXERCISE: A TAXING PROBLEM FOR EXPATRIATE EMPLOYEES 599

APPLICATION CASE: BOSS, I THINK WE HAVE A PROBLEM 599

CONTINUING CASE: CARTER CLEANING COMPANY 600

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE:

THE HOTEL PARIS CASE 600

KEY TERMS 601

ENDNOTES 601

18 Managing Human Resources in Small and Entrepreneurial Firms 604

THE SMALL BUSINESS CHALLENGE 606

Why Small Business Is Important 606

How Small Business Human Resource Management Is Different 606

Why HRM Is Important to Small Businesses 607

THE STRATEGIC CONTEXT: The Dealership 608

USING INTERNET AND GOVERNMENT TOOLS TO SUPPORT THE HR EFFORT 608

CONTENTS XXI

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Complying with Employment Laws 608

Employment Planning and Recruiting 611

Employment Selection 611

Employment Training 612

Employment Appraisal and Compensation 613

Employment Safety and Health 614

LEVERAGING SMALL SIZE: FAMILIARITY, FLEXIBILITY, FAIRNESS, INFORMALITY,

AND HRM 614

Simple, Informal Employee Selection Procedures 614

A Streamlined Interviewing Process 614

Work-Sampling Tests 616

Flexibility in Training 616

Flexibility in Benefits and Rewards 617

Improved Communications 620

* HR AS A PROFIT CENTER: IHOP 620

Fairness and the Family Business 620

USING PROFESSIONAL EMPLOYER ORGANIZATIONS 621

How Do PEOs Work? 621

Why Use a PEO? 621

Caveats 622

MANAGING HR SYSTEMS, PROCEDURES, AND PAPERWORK 623

Introduction 623

Basic Components of Manual HR Systems 623

Automating Individual HR Tasks 624

Human Resource Information Systems (HRIS) 624

Improved Transaction Processing 625

Online Self-Processing 625

Improved Reporting Capability 625

HR System Integration 625

HRIS Vendors 625

HR and Intranets 625

CHAPTER SECTION SUMMARIES 626

DISCUSSION QUESTIONS 626

INDIVIDUAL AND GROUP ACTIVITIES 627

EXPERIENTIAL EXERCISE: BUILDING AN HRIS 627

APPLICATION CASE: NETFLIX BREAKS THE RULES 627

CONTINUING CASE: CARTER CLEANING COMPANY 628

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 628

ENDNOTES 629

PART 5 VIDEO CASES APPENDIX 631

APPENDICES

APPENDIX A PHR and SPHR Knowledge Base 633

APPENDIX B Comprehensive Cases 641

Glossary 655

Name and Organization Index 663

Subject Index 678

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P R E F A C E

Human Resource Management, 13th edition provides students in human resource management courses and practicing managers with a comprehensive review of essential personnel management concepts and techniques in a highly readable and understandable form. As this new edition goes to press, I feel even more strongly than I did when I wrote the first that all managers not just HR managers need a strong foundation in HR/personnel management concepts and techniques to effectively do their jobs. Particularly in these difficult economic times, where students want to be able to apply at work what they learn in class, this edition continues to particularly focus on practical applications that all managers can use in carrying out their HR-related responsibilities. If you adopted the previous edition, you will find transitioning to the 13th edition easy, as the chapter outline (as well as the outline for each chapter) is more or less the same.

I had two goals in writing the 13th edition. In brief, I wanted it to provide a high-level book s complete coverage with a lower-level book s readability, user-

friendliness and (relative) brevity. To that end, I ve made six major changes to this edition.

1. Dozens of new topics. These include new, expanded treatments of reliability, validity, generalizability, utility, person-job fit, person-organization fit, and bias in Chapter 6 (Employee Selection), as well as the standard deviation rule in equal employment compliance, retaliation, job satisfaction and withdrawal, managing voluntary turnover, management s willingness to take a strike, cross training, the Myers-Briggs type indicator, workflow analysis, job design in job analysis, task analysis and task statements, the psychological contract, job hazard analysis, safety awareness programs, operations reviews, competencies of HR professionals, managing voluntary turnover, employee engagement, the process of job withdrawal, cumulative trauma disorders, a thoroughly revised and expanded description of the ADDIE training process in Chapter 8, and new material on employee rights in Chapter 14 (Ethics and Employee Rights and Discipline). This edition also contains many dozens of new recent citations.

2. A new boxed feature, The Strategic Context, paired with new strategic human resource management opening scenarios. These boxes illustrate the strategic context of each chapter s material for instance, how L.L.Bean s employee selection standards help to produce the employee competencies and behaviors that in turn support L.L.Bean s customer service strategy. The new chapter opening model says this: that (1) the company s human resource policies and practices should (2) produce the employee competencies and behaviors that (3) the company needs to implement its strategic plan.

3. New HR as a Profit Center boxed features. I ve added a new focus throughout the book on the value proposition and on HR strategy, metrics, and analysis. The new HR as a Profit Center features give readers actual examples of human resource management practices they can apply on their jobs to cut costs, boost revenues, and improve performance.

4. A completely revised Chapter 10 on Employee Retention, Engagement, and Careers, and a completely rewritten and practical discussion in Chapter 11 of how to actually develop a market competitive salary structure.

5. Eighteen new videos all reviewed by me and with discussion questions and a synopsis for each video included at the end of each part of the textbook. We have a total of 28 videos on the DVD.

6. All in a slimmer package. This 13th edition is about 10% (73 pages) shorter than the 12th edition, which I accomplished mostly by pruning material.

XXIII

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NEW FEATURES As noted previously, I ve added two important boxed features.

Strategic HR opening scenarios paired with a new boxed feature, The Strategic Context. What HR practices and policies do we need to produce the employee competencies and behaviors required to achieve our strategic goals? The new The Strategic Context features (linked to the opening scenarios) show how companies make human resource management decisions within the context of their strategic initiatives. Examples include how Whirlpool uses candidate interviewing to build its customer base (Chapter 7), and how Google fosters the employee interaction its strategy depends on with a crowd sourcing selection process (Chapter 6).

New HR as a Profit Center boxed feature. Today s students want to apply what they learn in class to their jobs, and today's employers expect human resource management to add measurable value to the company. Our new HR as a Profit Center features show actual examples of how human resource management practices do this. Examples include how the Atlantic American insurance company conducted a workflow analysis to identify inefficiencies in how it processes its insurance claims (Chapter 4), and how KeyBank produced a $1.7 million cost savings in teller turnover in one year, simply by making better hiring decisions to reduce training costs (Chapter 6).

In addition, I ve retained these important 12th edition features.

Evidence-Based Human Resource Management illustrates why and how managers base human resource decisions on measurable, data-based evidence.

Improving Productivity Through HRIS demonstrates how managers use tech- nology to improve the productivity of HR.

Managing the New Workforce illustrates the skills managers need to manage today s diverse employees.

Previous editions of this textbook were the first to provide specific, actionable expla- nations and illustrations showing how to use devices such as the HR Scorecard process (explained fully in Chapter 3) to measure HR s effectiveness in achieving the compa- ny s strategic aims. In this 13th edition, a continuing Hotel Paris case at the end of each chapter gives readers practice in applying strategic human resource management in action. Coverage of the core concepts of strategic HR appears in Chapter 3.

Video Cases To provide professors, students, and practicing managers with a richer and more flexible textbook, I have incorporated 18 new video cases at the end of the book s five parts. The in-book video cases provide a basis for in-class discussion of the videos available to adopters; I reviewed the videos and wrote the questions.

Comprehensive Cases To continue with the theme of a richer, more flexible textbook, professors, students, and practicing managers will find I ve again included five comprehensive cases in an appendix at the end of the book. I personally wrote the five comprehensive cases to provide students and faculty with an opportunity to discuss and apply the book s concepts and techniques by addressing more comprehensive and realistic case-based issues.

SHRM HRCI Review Questions The profession of HR management is becoming increasingly demanding. Responding to these new demands, thousands of HR managers have passed the various certification exams offered by the Human Resource Certification Institute (HRCI), thus earning the designations Professional in HR (PHR), Senior Professional in HR (SPHR), and Global Professional in HR (GPHR) (as well as a special exam for California HR professionals).