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Human Resource Management

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Human Resource Management

T H I R T E E N T H E D I T I O N

ROBERT L. MATHIS University of Nebraska at Omaha

JOHN H. JACKSON University of Wyoming

Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States

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Human Resource Management, 13th Edition Robert L. Mathis John H. Jackson

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D e d i c a t i o n s

TO

Jo Ann Mathis for managing efforts on this book, and

Julie Foster and Lee Skoda as key supporters.

R. D. and M. M. Jackson, who were successful managers of people for many years

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Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.

C o n t e n t s i n B r i e f

Preface xxv

S E C T I O N 1 Environment of Human Resource Management 1

Chapter 1 Human Resource Management in Organizations 2 Chapter 2 Strategic HR Management and Planning 36 Chapter 3 Equal Employment Opportunity 72

S E C T I O N 2 Jobs and Labor 107

Chapter 4 Workers, Jobs, and Job Analysis 108 Chapter 5 Human Resource Planning and Retention 144 Chapter 6 Recruiting and Labor Markets 176 Chapter 7 Selecting Human Resources 212

S E C T I O N 3 Training and Development 247

Chapter 8 Training Human Resources 248 Chapter 9 Talent Management 282 Chapter 10 Performance Management and Appraisal 318

S E C T I O N 4 Compensation 357

Chapter 11 Total Rewards and Compensation 358 Chapter 12 Incentive Plans and Executive Compensation 394 Chapter 13 Managing Employee Benefits 424

S E C T I O N 5 Employee Relations 465

Chapter 14 Risk Management and Worker Protection 466 Chapter 15 Employee Rights and Responsibilities 502 Chapter 16 Union/Management Relations 538

Appendices 575

Appendix A Human Resource Certification Institute: PHR and SPHR Test Specifications 575 Appendix B HR Management Resources 581 Appendix C Major Federal Equal Employment Opportunity Laws and Regulations 585 Appendix D Uniform Guidelines on Employee Selection 587

vii

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viii CONTENTS IN BRIEF

Appendix E EEO Enforcement 591 Appendix F Preemployment Inquiries 595 Appendix G Sample HR-Related Job Descriptions 599

Glossary 601 Author Index 609 Subject Index 615

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ix

ix

C o n t e n t s

S E C T I O N 1

Environment of Human Resource Management 1

C H A P T E R 1

Human Resource Management in Organizations 2

HR Headline: The Challenges and Crises Facing HR Management 3

Human Resources as Organizational Core Competency 4

Human Capital and HR 5 HR Functions 5

HR Management’s Contributing Role 7

Organizational Culture and HR 7 Organizational Productivity 9 Social Responsibilities and HR 10

HR Perspective: “Growing Green” in HR 11

Customer Service and Quality Linked to HR 11 Employee Engagement and HR Culture 12

Organizational Ethics and HR Management 12

Ethical Behavior and Organizational Culture 13

HR Best Practices: Cisco Makes Global Ethics Important and Fun 14

Ethics and Global Differences 14 HR’s Role in Organizational Ethics 15

Current and Future HR Management Challenges 16

Organizational Cost Pressures and Restructuring 16 Economics and Job Changes 16 Globalization of Organizations and HR 19 Workforce Demographics and Diversity 20 HR Technology 21

HR Online: Wikis, Blogs, Twitters, and HR 22

Measuring HR Impact through Metrics 23

Managing HR in Organizations 23

Smaller Organizations and HR Management 23 HR Cooperation with Operating and Line Managers 24 How HR Is Seen in Organizations 24

HR Management Roles 25

Administrative Role of HR 26 Operational and Employee Advocate Role for HR 27 Strategic Role for HR 27

HR Management Competencies and Careers 28

HR Competencies 28 HR Management as a Career Field 28 HR Professionalism and Certification 29

Preface xxv

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x CONTENTS

Summary 31

Critical Thinking Activities 32

HR Experiential Problem Solving 32

Case: HR, Culture, and Business Results Success at Google, Scripps, and UPS 33

Supplemental Cases: Phillips Furniture; Sysco 34

Notes 34

C H A P T E R 2

Strategic HR Management and Planning 36

HR Headline: Strategic Utilization of Talent Benefits Health Care Organization 37

Strategic Planning 38

Strategy Formulation 39

HR as Organizational Contributor 41

High-Performance Work Practices 42 HR Effectiveness and Financial Performance 43

Environmental Analysis 43

HR Perspective: Numbers Add Up for IBM 44

Internal Environmental Analysis 44 External Environmental Analysis 45

HR Best Practices: NASA Launches Workforce Realignment 47

Global Competitiveness and Strategic HR 48

Global Framework 48 Global Legal and Regulatory Factors 48 Offshoring 49

Global Staffing 49

HR Planning in Mergers and Acquisitions 50

Before the Deal 50 During Integration 51 Post Integration 52

HR Perspective: Dow’s Formula for Successful Acquisitions 52

Strategic Challenges 53

Managing a Talent Surplus 54 Legal Considerations for Workforce Reductions 55 Managing a Talent Shortage 56

Technology Challenges 57

Effects on Work and Organizations 57 Effects on Communication 58

HR Perspective: Verizon Engages Employees via Web Portal 59

Effects on Work Processes 59 Effects on HR Activities 60

Measuring Effectiveness of HR Initiatives 61

HR Metrics 61 HR and Benchmarking 63 HR and the Balanced Scorecard 63 Human Capital Effectiveness Measures 64 HR Audit 66

Summary 66

Critical Thinking Activities 67

HR Experiential Problem Solving 67

Case: Pioneers in HR Analytics 68

Supplemental Cases: Where Do You Find the Bodies?; Xerox 69

Notes 69

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CONTENTS xi

C H A P T E R 3

Equal Employment Opportunity 72

HR Headline: Sexual Harassment at the United Nations 73

Nature of Equal Employment Opportunity (EEO) 74

Disparate Treatment 75 Disparate Impact 75 Equal Employment Opportunity Concepts 76 Progressing Toward Equal Employment Opportunity 77

HR Perspective: “Officer Dirt” 78

Race/Ethnic/National Origin 78

Civil Rights Act 1964, Title VII 78 Executive Orders 11246, 11375, and 11478 79 Civil Rights Act 1991 79 Managing Racial and National Origin Issues 79 Affirmative Action 80 Managing Affirmative Action Requirements 81

Sex/Gender Discrimination Laws and Regulations 82

Pregnancy Discrimination 82 Equal Pay and Pay Equity 83 Sexual Harassment 83 Managing Sex/Gender Issues 84 Individuals with Differing Sexual Orientations 86 Nepotism 86 Consensual Relationships and Romance at Work 86 Dealing with Sexual Harassment 87 Types of Sexual Harassment 88 Employer Responses to Sexual Harassment 88 Harassment Likelihood 89

Individuals with Disabilities 90

Americans with Disabilities Act (ADA) 90

Who Is Disabled? 90 Genetic Bias Regulations 91 Managing Disabilities in the Workforce 92

HR On-the-Job: ADA and Employment Questions 93

Age and Equal Employment Opportunity 94

Age Discrimination in Employment Act (ADEA) 95 Older Workers Benefit Protection Act (OWBPA) 95 Managing Age Discrimination 95

Religion and Spirituality in the Workplace 96

Managing Religious Diversity 96

Managing Other Discrimination Issues 97

Immigration Reform and Control Acts (IRCA) 97 Language Issues 98 Military Status and USERRA 98 Sexual Orientation 99 Appearance and Weight Discrimination 99

HR Perspective: Discrimination against “Caregivers” 100

Family Responsibility Discrimination (FRD) 100

Diversity Training 100

Components of Traditional Diversity Training 101 Mixed Results for Diversity Training 101 Backlash against Diversity Training Efforts 101

Summary 102

Critical Thinking Activities 102

HR Experiential Problem Solving 103

Case: Religious Accommodation? 103

Supplemental Cases: Keep on Trucking; Mitsubishi Believes in EEO—Now 104

Notes 104

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xii CONTENTS

C H A P T E R 4

Workers, Jobs, and Job Analysis 108

HR Headline: Work-Life Balancing 109

Workforce Composition 110

Business Contribution of Diverse Workers 110 Race and Ethnicity 111

HR Best Practices: Resolving Language Barriers Pays Off 112

Generational Differences 113 Gender Workforce Diversity 113

Nature of Jobs and Work 114

Work Flow Analysis 114

Job Design 116

Workers and Job Design 117 Common Approaches to Job Design 118 Characteristics of Jobs 118 Using Worker Teams in Jobs 119

Jobs and Work Scheduling 121

Telework 121 Work Schedule Alternatives 122

HR Perspective: Global Work Schedule Differences 123

Work Flexibility and Scheduling 124

Job Analysis 124

Purposes of Job Analysis 125 Job Analysis Responsibilities 126 Task-Based Job Analysis 126 Competency-Based Job Analysis 127

Implementing Job Analysis 128

Planning the Job Analysis 128

Preparing for and Introducing the Job Analysis 129 Conducting the Job Analysis 129 Developing Job Descriptions and Job Specifications 129 Maintaining and Updating Job Descriptions and Job Specifications 129

Job Analysis Methods 129

Observation 130 Interviewing 130 Questionnaires 130 Computerized Job Analysis Systems 131 Combination Methods 131

HR Online: O*Net Resources for Employers 132

Job Analysis and O*Net 132

Behavioral and Legal Aspects of Job Analysis 133

Current Incumbent Emphasis 133 “Inflation” of Jobs and Job Titles 133 Employee and Managerial Anxieties 133 Legal Aspects of Job Analysis 134

Job Descriptions and Job Specifications 135

HR On-The-Job: Writing Job Descriptions 136

Job Descriptions 136 Job Specifications 136 Performance Standards 136 Job Description Components 137

Summary 139

Critical Thinking Activities 139

HR Experiential Problem Solving 139

Case: ROWE and Flexible Work and Success at Best Buy 140

Supplemental Cases: The Reluctant Receptionist; Jobs and Work at R.R. Donnelley 141

Notes 141

S E C T I O N 2

Jobs and Labor 107

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CONTENTS xiii

C H A P T E R 5

Human Resource Planning and Retention 144

HR Headline: Need More Workers? 145

Human Resource Planning 146

Organizational Size and HR Planning 146

HR Best Practices: Effective HR Planning for Workforce Future 147

HR Planning Process 147

Assessing the External Workforce 148

Economic and Governmental Factors 149 Competitive Evaluations 149 Changing Workforce Considerations 149

Assessing the Internal Workforce 150

Current and Future Jobs Audit 150 Employee and Organizational Capabilities Inventory 150

HR Online: Technology Expanding Employee Skills Database 151

Forecasting HR Supply and Demand 152

Forecasting Methods and Periods 152 Forecasting the Demand for Human Resources 153 Forecasting the Supply of Human Resources 153

Individual Workers and Organizational Relationships 155

Psychological Contract 155 Individual Employee Performance and Motivation 156 Nature of Job Satisfaction 158

Employee Turnover 159

Types of Employee Turnover 160 Measuring Employee Turnover 161 HR Metrics: Determining Turnover Costs 162

Retention of Human Resources 163

Myths and Realities about Retention 163

Drivers of Retention 164

HR Perspective: Global Retention 166

Managing Retention 168

Retention Assessment and Metrics 168

HR On-the-Job: Conducting Exit Interviews 170

Retention Evaluation and Follow-Up 170

Summary 171

Critical Thinking Activities 171

HR Experiential Problem Solving 172

Case: Accenture—Retaining for Itself 172

Supplemental Cases: The Clothing Store; Alegent Health 173

Notes 173

C H A P T E R 6

Recruiting and Labor Markets 176

HR Headline: Passive Recruiting Becomes Active 177

Recruiting 178

Strategic Recruiting and HR Planning 178 Training of Recruiters and Managers 179

Labor Markets 179

Labor Market Components 180 Different Labor Markets and Recruiting 181

Strategic Recruiting Decisions 183

Recruiting Presence and Image 183

HR Best Practices: Effective Recruitment at USDA 184

Organization-Based versus Outsourced Recruiting 184 Regular versus Flexible Staffing 185 Recruiting and EEO: Diversity Considerations 186

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xiv CONTENTS

Realistic Job Previews 188 Recruiting Source Choices: Internal versus External 188

Internet Recruiting 188

E-Recruiting Means 188 Recruiting and Internet Social Networking 189

HR On-the-Job: Effective Recruiting Using an Employer Website 190

Recruiting Using Special Technology Means 190 Legal Issues in Internet Recruiting 191 Advantages of Internet Recruiting 192 Disadvantages of Internet Recruiting 193

External Recruiting Sources 193

Media Sources 193 Competitive Recruiting Sources 195 Employment Agencies 195 Labor Unions 195

HR Perspective: Outplacement Firms as Recruiting Sources 196

Job Fairs and Creative Recruiting 196 Educational Institutions and Recruiting 197

HR On-the-Job: Internships as a Part of College Recruiting 198

Internal Recruiting Methods 198

Internal Recruiting Databases and Internet- Related Sources 199 Job Posting 200

HR Perspective: Enhancing Opportunities for Internal Promotion 201

Employee-Focused Recruiting 201

Recruiting Evaluation and Metrics 202

Evaluating Recruiting Quantity and Quality 203 Evaluating Recruiting Satisfaction 204 Evaluating the Time Required to Fill Openings 204 Evaluating the Cost of Recruiting 205

General Recruiting Process Metrics 205 Increasing Recruiting Effectiveness 207

Summary 208

Critical Thinking Activities 208

HR Experiential Problem Solving 208

Case: Recruiting at Kia 209

Supplemental Cases: Northwest State College; Enterprise Recruiting 210

Notes 210

C H A P T E R 7

Selecting Human Resources 212

HR Headline: Using Virtual Worlds for Selection 213

Selection and Placement 214

Placement 214 Selection, Criteria, Predictors, and Job Performance 215 Validity 216 Combining Predictors 218 Selection Responsibilities 218

The Selection Process 219

Applicant Job Interest 220 Preemployment Screening 221

HR Perspective: Cheating on Electronic Assesments 222

Application Forms 222 Immigration Verification 225

Selection Testing 225

Ability Tests 226 Personality Tests 227 Honesty/Integrity Tests 228 Controversies in Selection Testing 228

Selection Interviewing 229

Inter-Rater Reliability and Face Validity 229 Structured Interviews 230 Less-Structured Interviews 231 Who Conducts Interviews? 232

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CONTENTS xv

Effective Interviewing 232 Problems in the Interview 234

HR Perspective: Common Interview Mistakes 235

Background Investigations 235

Negligent Hiring and Retention 235 Legal Constraints on Background Investigations 236 Medical Examinations and Inquiries 237 References 237 Making the Job Offer 238

Global Staffing Issues 238

Types of Global Employees 238

Selection Process for Global Assignments 239

Legal Concerns in the Selection Process 240

Defining Who Is an Applicant 240 Applicant Flow Documentation 241 Selecting for “Soft Skills” 241

Summary 241

Critical Thinking Activities 242

HR Experiential Problem Solving 242

Case: Full Disclosure on Sex Offenders? 243

Supplemental Cases: Strategic Selection: A Review of Two Companies; Selecting a Programmer 243

Notes 244

S E C T I O N 3

Training and Development 247 C H A P T E R 8

Training Human Resources 248

HR Headline: China’s Need for Training 249

Training and HR 250

Training Categories 250 Legal Issues and Training 251

Organizational Strategy and Training 252

Strategic Training 252 Organizational Competitiveness and Training 253

HR Perspective: Business Education at Work 255

Training for Global Strategies 256

Global Assignment Training 256 Intercultural Competence Training 256

Planning for Training 257

Orientation: Planning for New Employees 258

HR On-the-Job: Planning for New Employee Orientation 258

Evaluating Orientation and Metrics 259

Training Needs Assessment 260

Analysis of Training Needs 260 Establishing Training Objectives and Priorities 262

Training Design 263

Learner Characteristics 263 Instructional Strategies 265 Transfer of Training 266

Training Delivery 266

Internal Training 267

HR Perspective: Cross Training “Universal Agents” 269

External Training 270 Combination Training Approaches 271 E-Learning: Online Training 272

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xvi CONTENTS

HR Perspective: Simulations and Games 273

Training Evaluation 274

Levels of Evaluation 275 Training Evaluation Metrics 276 Training Evaluation Designs 277

Summary 278

Critical Thinking Activities 279

HR Experiential Problem Solving 279

Case: 21st-Century Onboarding 279

Supplemental Cases: Training Crucial for Hotels; New Payroll Clerk 280

Notes 280

C H A P T E R 9

Talent Management 282

HR Headline: How Top Companies Develop Stars 283

Talent Management in Perspective 284

Talent Management “Systems” 285 Scope of Talent Management 286

HR Perspective: Groundbreaking Talent Management Programs 286

Succession Planning 288

Succession Planning Process 288 Succession Planning Decisions 290 Benefits of Formal Succession Planning 292

Careers and Career Planning 293

Changing Nature of Careers 293 Organization-Centered Career Planning 294 Individual-Centered Career Planning 295 Career Progression Considerations 296 Career Transitions 298

Common Individual Career Issues 299

Technical and Professional Workers 299 Women and Careers 300 Dual-Career Couples 300

HR On-the-Job: Handling Global Dual-Career Situations 301

Global Career Concerns 302

Developing Human Resources 303

Possible Development Focuses 303 Development Needs Analyses 304

HR Development Approaches 305

Job-Site Development Approaches 306 Off-Site Development Approaches 307 Learning Organizations and Development 308

Management Development 309

Supervisor Development 310 Leadership Development 311 Problems with Management Development Efforts 313

Summary 314

Critical Thinking Activities 314

HR Experiential Problem Solving 314

Case: Leadership Leverage 315

Supplemental Cases: Equipping for the Future; Developed Today, Gone Tomorrow 316

Notes 316

C H A P T E R 1 0

Performance Management and Appraisal 318

HR Headline: Performance Management Does Not Focus Enough on Ethics 319

The Nature of Performance Management 320

Global Cultural Differences in Performance Management 322 Performance-Focused Organizational Cultures 323

Identifying and Measuring Employee Performance 324

Types of Performance Information 325

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CONTENTS xvii

HR Perspective: Behaviors or Results . . . Why Not Both? 326

Relevance of Performance Criteria 327 Performance Standards 327 Performance Metrics in Service Businesses 328

Performance Appraisals 329

Uses of Performance Appraisals 329

HR Online: Using Technology to Enhance Performance Appraisals 331

Decisions about the Performance Appraisal Process 332 Legal Concerns and Performance Appraisals 334

HR On-the-Job: Elements of a Legal Performance Appraisal System 334

Who Conducts Appraisals? 335

Supervisory Rating of Subordinates 335 Employee Rating of Managers 336 Team/Peer Rating 336 Self-Rating 337 Outsider Rating 337 Multisource/360-Degree Feedback 337

Tools for Appraising Performance 339

Category Scaling Methods 339

Graphic Rating Scales 339 Comparative Methods 343 Narrative Methods 345 Management by Objectives 345 Combinations of Methods 346

Training Managers and Employees in Performance Appraisal 346

Rater Errors 347

Appraisal Feedback 349

Appraisal Interview 349 Feedback as a System 350 Reactions of Managers 351 Reactions of Appraised Employees 351 Effective Performance Management 351

HR Best Practices: Calibration Is the Key to Better Employee Evaluations and Performance Management 352

Summary 352

Critical Thinking Activities 353

HR Experiential Problem Solving 353

Case: Building Performance Management through Employee Participation 354

Supplemental Cases: Performance Management Improvements for Bristol-Myers Squibb; Unequal/Equal Supervisors 354

Notes 355

S E C T I O N 4

Compensation 357

C H A P T E R 1 1

Total Rewards and Compensation 358

HR Headline: Rewarding Employees to Encourage Positive Behaviors 359

Nature of Total Rewards and Compensation 360

Types of Compensation 362 Compensation Philosophies 362

HR Best Practices: Using Rewards to Effectively Develop Talent 364

HR Metrics for Compensation 365 Compensation Responsibilities 365

Compensation System Design Issues 366

Compensation Fairness and Equity 366

HR Perspective: Quantitative Techniques Facilitate Compensation Management 367

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xviii CONTENTS

Market Competitiveness and Compensation 368 Competency-Based Pay 369 Individual versus Team Rewards 370 Global Compensation Issues 370 Compensating Expatriates 371

Legal Constraints on Pay Systems 372

Fair Labor Standards Act (FLSA) 372 Independent Contractor Regulations 375 Acts Affecting Government Contractors 375 Legislation on Equal Pay and Pay Equity 376 State and Local Laws 376 Garnishment Laws 376 Lilly Ledbetter Fair Pay Act 376

Development of a Base Pay System 377

Valuing Jobs with Job Evaluation Methods 378 Valuing Jobs Using Market Pricing 379 Pay Surveys 380

HR Online: Responding to Internet Pay Survey Data Questions 381

Pay Structures 382

Pay Grades 383 Pay Ranges 383 Individual Pay 384

Determining Pay Increases 386

Performance-Based Increases 386 Standardized Pay Adjustments 388

Summary 389

Critical Thinking Activities 389

HR Experiential Problem Solving 390

Case: Pay for Performance Enhances Employee Management at Scripps Health 390

Supplemental Cases: Compensation Changes at JC Penney; Scientific Turmoil 391

Notes 391

C H A P T E R 1 2

Incentive Plans and Executive Compensation 394

HR Headline: Variable Pay at Cox Communications 395

Variable Pay: Incentives for Performance 396

Developing Successful Pay-for-Performance Plans 396

HR Perspective: Awarding Points for Staff Efforts 398

Global Variable Pay 399 Metrics for Variable Pay Plans 399 Successes and Failures of Variable Pay Plans 400 Three Categories of Variable Pay 401

Individual Incentives 402

Piece-Rate Systems 402 Bonuses 402 Special Incentive Programs 403

Group/Team Incentives 404

Design of Group/Team Incentive Plans 405 Group/Team Incentive Challenges 406 Types of Group/Team Incentives 406 Group/Team Incentives and Information Sharing 408

Organizational Incentives 408

Profit Sharing 408 Employee Stock Plans 409

Sales Compensation 410

Types of Sales Compensation Plans 410

HR Perspective: Ethical Concerns and Sales Compensation 411

Sales Compensation Challenges 412

Executive Compensation 413

Elements of Executive Compensation 414 Global Executive Compensation 416

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CONTENTS xix

“Reasonableness” of Executive Compensation 416

HR Perspective: CEO Executives Overpaid? 417

Summary 419

Critical Thinking Activities 419

HR Experiential Problem Solving 420

Case: Sodexo Incentives 420

Supplemental Cases: Cash Is Good, Card Is Bad; Incentive Plans for Fun and Travel 421

Notes 421

C H A P T E R 1 3

Managing Employee Benefits 424

HR Headline: Behavioral Economics Guides Benefits Administration 425

Benefits and HR Strategy 426

Benefits as Competitive Advantage 427 Role of Benefits for Workforce Attraction and Retention 429

Benefits Management and Communications 429

Benefits Design 429 HR and Benefits Administration 431 HR Technology and Benefits 432 Benefits Measurement 432 Benefits Cost Control 433 Benefits Communication 433

HR Online: Using Online Technology to Combat Presenteeism 434

Types of Benefits 434

Government-Mandated Benefits 435 Voluntary Benefits 436