Chapter 9 Human Resource Management, Motivation, and Labor-Management Relations

1. Chapter 9 Human Resource Management, Motivation, and Labor-Management Relations Learning Goals Discuss employee separation and the impact of downsizing and outsourcing. Explain how Maslow’s hierarchy-of-needs theory, goal setting, job design, and managers’ attitudes relate to employee motivation. Summarize the role of labor unions and the tactics of labor-management conflicts. 5 Explain the importance of human resource management. Describe how recruitment and selection contribute to placing the right person in a job. Explain how training programs and performance appraisal help employees grow and develop. Outline the methods employers use to compensate employees. 1 6 2 3 7 4

2. HUMAN RESOURCE MANAGEMENT IS VITAL TO ALL ORGANIZATIONS • Human resource management Function of attracting, developing, and retaining enough qualified employees to perform the activities necessary to accomplish organizational objectives. • • Three main objectives: • • Providing qualified, well-trained employees for the organization. • • Maximizing employee effectiveness in the organization. • • Satisfying individual employee needs through monetary compensation, benefits, opportunities to advance, and job satisfaction.

4. RECRUITMENT AND SELECTION • Finding Qualified Candidates • • HR managers face challenges finding qualified workers. • • Eight in 10 manufacturers report moderate or severe shortage of highly qualified workers. • • 77 million baby boomers are set to retire in next five years, but only 46 million Generation X workers are available to take their places. • • Must be creative in searches, looking both internally and externally.

5. Selecting and Hiring Employees • • Must follow legal requirements. • • Civil Rights Act of 1964 • • Equal Employment Opportunity Commission programs • • Civil Rights Act of 1991 • • Failure to follow these exposes company to risk of litigation. • • Society for Human Resources Management offers more information about litigation issues. • • Hiring is a costly process for employers. • • Some employers require employment tests.

6. ORIENTATION, TRAINING, AND EVALUATION • • During orientation, employer representatives inform employees about company policies regarding their rights and benefits. • Training Programs • • A good investment for employers. • On-the-Job Training • • Prepares employees for job duties by allowing them to perform tasks under the guidance of experienced employees.

7. Classroom and Computer-Based Training • • Off-the-job training involving some form of classroom instruction such as lectures, conferences, audiovisual aids, computer instruction, and special machines. • • Frequently involves the use of the Internet. • Management Development • • Provides training designed to improve the skills and broaden the knowledge of current and potential executives. • • May involve benchmarking, or learning the best practices of the best companies so they can serve as performance standards.

8. Performance Appraisals • Performance appraisalEvaluation of an employee’s job performance that compares actual results with desired outcomes. • • Some firms conduct peer reviews, in which employees assess the performance of coworkers, while other firms allow employees to review their supervisors and managers. • • May conduct a 360-degree performance review, a process that gathers feedback from a review panel that includes co-workers, supervisors, team members, subordinates, and sometimes customers. • • A majority of large U.S. firms use multirater system.

9. Compensation • WagesCompensation based on an hourly pay rate or the amount of output produced • SalaryCompensation calculated on a periodic basis, such as weekly or monthly. • • Most firms base compensation decisions on five factors: • • Salaries and wages paid by other companies that compete for the same people • • Government legislation, including the federal, state, or local minimum wage • • The cost of living • • The firm’s ability to pay • • Worker productivity

10. • Many also use one or more forms of incentive compensation.

11. Employee Benefits • Employee benefits Rewards such as retirement plans, health insurance, vacation, and tuition reimbursement provided for employees either entirely or in part at the company’s expense • • Typically account for 30 percent of total employee compensation. • • Costs of health care are increasingly being shifted to workers. • • Some benefits required by law: • • Social Security and Medicare contributions • • State unemployment insurance and workers’ compensation programs • • Pensions and retirement plans are also areas of rising costs.

12. Flexible Benefits • • Also called cafeteria plans. • • Employees provided a range of options from which they can choose, including different types of • • Medical insurance • • Dental and vision plans • • Life and disability insurance • • Employees choose how too allocate their benefit allowance among the choices. • • “Family-friendly” benefits • • Paid time off instead of set holidays, including for volunteering • • Flexible hours • • Dependent care accounts

13. Flexible Work • • Allow employees to adjust their working hours and places of work to accommodate their personal needs. • • Flextime allows employees to set their own work hours within constraints specified by the firm. • •  A compressed workweek allows employees to work the regular number of weekly hours in fewer than the typical five days. • • A job sharing program allows two or more employees to divide the tasks of one job. • •  A home-based work program allows employees, or telecommuters, to perform their jobs from home instead of at the workplace. • • 45 million Americans have telecommuted from home. • • 22 million telecommute from home at least once a week.

14. EMPLOYEE SEPARATION • Voluntary and Involuntary Turnover • • Voluntary turnover Employees leave firms to start their own businesses, take jobs with other firms, move to another city, or retire. • • Some firms ask employees who leave voluntarily to participate in exit interviews to find out why they decided to leave. • • Successful companies are clearly focused on retaining their best workers. • • Involuntary turnover Employers terminate employees because of poor job performance, negative attitudes toward work and co-workers, or misconduct such as dishonesty or sexual harassment. • • Necessary because poor performers lower productivity and employee morale. • • Employers must carefully document reasons when terminating employees.

15. Downsizing • DownsizingProcess of reducing the number of employees within a firm by eliminating jobs. • • Two most common reasons: • •  Cut overhead costs • •  Streamline organizational structure • • Studies show downsizing doesn’t guarantee improvements. • • Devastating impact on employee morale • • Encourages employees to put individual career success ahead of company loyalty

16. Outsourcing • OutsourcingContracting with another business to perform tasks or functions previously handled by internal staff members. • • Complements today’s focus on business competitiveness and flexibility. • • Get best price among competing bidders while avoiding long-term costs of in-house operations.

17. MOTIVATING EMPLOYEES • • Motivation starts with good employee morale, the mental attitude of employees toward their employer and jobs. • • High morale = sign of a well-managed organization • • Poor morale shows up in many ways, including absenteeism, employee turnover, strikes, falling productivity, and rising employee grievances

18. Maslow’s Hierarchy-of-Needs Theory • Maslow’s hierarchy of needsTheory of motivation proposed by Abraham Maslow. According to the theory, people have five levels of needs that they seek to satisfy: physiological, safety, social, esteem, and self-actualization. • Based on these assumptions: • • People’s needs depend on what they already possess. • • A satisfied need is not a motivator; only needs that remain unsatisfied can influence behavior. • • People’s needs are arranged in a hierarchy of importance; once they satisfy one need, at least partially, another emerges and demands satisfaction.

21. Goal-Setting Theory • GoalTarget, objective, or result that someone tries to accomplish. • Goal-setting theoryTheory that people will be motivated to the extent to which they accept specific, challenging goals and receive feedback that indicates their progress toward goal achievement.

22. • Goal specificity The extent to which goals are detailed, exact, and unambiguous. • • Goal difficulty The extent to which a goal is hard or challenging to accomplish. • • Goal acceptance The extent to which people consciously understand and agree to goals. • • Performance feedback Information about the quality or quantity of past performance that indicates whether progress is being made toward accomplishing a goal.

23. Job Design and Motivation • Job enlargementJob design that expands an employee’s responsibilities by increasing the number and variety of tasks assigned to the worker. • Job enrichmentChange in job duties to increase employees’ authority in planning their work, deciding how it should be done, and learning new skills.

24. Managers’ Attitudes and Motivation • • Employees feel needs beyond those satisfied by monetary rewards. • • Two assumptions manager make about employees, according to psychologist Douglas McGregor: • • Theory X Employees dislike work and try to avoid it whenever possible; managers must coerce or control them or threaten punishment to achieve the organization’s goals. • • Theory Y Typical person likes work and learns to accept and seek responsibilities; managers assume creative people solve work-related problems. • • A third theory from management professor William Ouchi: • • Theory Z Worker involvement key to increased productivity for the company and improved quality of work life for employees.

25. LABOR-MANAGEMENT RELATIONS • Development of Labor Unions • Labor unionGroup of workers who have banded together to achieve common goals in the areas of wages, hours, and working conditions. • • Found at local, national, and international levels. • • Approximate rates of unionization in the United States today: Total full-time workforce: 13 percent Private-sector workforce: 8 percent Government workforce: 33 percent

26. Labor Legislation • • National Labor Relations Act of 1935 (Wagner Act) Legalized collective bargaining and required employers to negotiate with elected representatives of their employees. • • Fair Labor Standards Act of 1938 Set the initial federal minimum wage and maximum basic workweek for workers employed in industries engaged in interstate commerce; outlawed child labor. • • Taft-Hartley Act of 1947 (Labor-Management Relations Act) Limited unions’ power by prohibiting a variety of unfair practices, including coercing employees to join unions and coercing employers to discriminate against employees who are not union members. • • Landrum-Griffin Act of 1959 (Labor-Management Reporting and Disclosure Act) Amended the Taft-Hartley Act to promote honesty and democracy in running unions’ internal affairs.

27. The Collective Bargaining Process • Collective bargainingProcess of negotiation between management and union representatives for the purpose of arriving at mutually acceptable wages and working conditions for employees. • • Issues involved can include: • • Wages • • Work hours • • Benefits • • Union activities and responsibilities • • Grievance handling and arbitration • • Layoffs • • Employee rights and seniority

28. Settling Labor-Management Disputes • • Most labor-management negotiations result in a signed agreement without a work stoppage. • • Approximately 140,000 union contracts are in force in the U.S. • • On average 20 or fewer negotiations involve a work stoppage. • • Disagreements can be handled through grievance process.

30. Settling Labor-Management Disputes • • Most labor-management negotiations result in a signed agreement without a work stoppage. • • Approximately 140,000 union contracts are in force in the U.S. • • On average 20 or fewer negotiations involve a work stoppage. • • Disagreements can be handled through grievance process. • • May also be handled through mediation, the process of settling disputes with the suggestions and advice of a neutral third party. • • May go to arbitration, in which a neutral third party renders a legally binding decision.

31. Competitive Tactics of Unions and Management • Union Tactics • • Strikes A temporary work stoppage by employees until a dispute has been settled or a contract signed. • • Picketing Workers marching at the entrances of the employer’s business as a public protest against some management practice. • • Boycott An organized attempt to keep the public from purchasing the products of a firm. • Management Tactics • • Lockout A management strike to put pressure on union members by closing the firm.

32. The Future of Labor Unions • • Membership and influence grew through the 20th century, but both are now declining. Private-sector union members today: 8 percent Private-sector union members in 1983: 17 percent

33. • Why the decline? • • Competitive compensation and benefit packages at nonunion employers. • • Effective communications by management. • • Emphasis on promotions from within. • • Employee empowerment. • • Employee participation in goal setting and grievance handling. • • How will labor unions maintain their relevance? • • Reach out to nonmanufacturing workers. • • Offer affiliate or partial memberships. • • Overcome widespread belief that they can’t win unless management loses.