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Human Resource Management
The process of accomplishing an organization's objectives by acquiring, retaining, developing, and properly using its human resources.
A step in human resources management that involves recruiting, screening, selecting, and properly placing personnel.
An employer's ability to hold employees
Ending an employee's employment
Proper use of people
An understanding of both individual and organizational needs so that the full potential of human resources can be employed.
Human Resource Planning
Estimating the size and makeup of the future workforce
Two steps: forecasting future human resource needs, and planning how to fulfill and then manage those needs.
Human Resources Planning System parts
- Human resource inventory: assessing the personnel skills, abilities, and potential present in the organization.
- Forecasting: predicting future personnel requirements
- Human resources plans: developing strategy for recruiting, selecting, placing, transferring, and promoting personnel.
- Development plans: ensuring that properly trained managers are ready to take over vacant or new jobs.
Bona Fide occupational qualification (BFOQ)
A qualification that is reasonably necessary for the normal operation of the particular business
Selection of Personnel
The hiring process that depends largely on an organization's needs and compliance with legal requirements.
An interview for which the interviewer prepares questions in advance and asks these specific questions of all interviewees
An interview for which the interviewer prepares some questions in advance but has flexibility in the questions to ask.
An interview for which the interviewer has the freedom to discuss whatever information is considered important.
Advantages of Selection Tests
- Improved accuracy in selecting employees
- Objective means for judging
- Information on the needs of present employees
Criticisms of Selection Tests
- Tests are not infallible
- Tests are given too much weight
- Tests discriminate against minorities
Steps to make sound employment decisions
- Inform candidates up front of the recruiting procedures. If candidates believe that the prospective employer will contact former supervisors, verify education, and check criminal records, the are more likely to be honest and straightforward.
- Require candidates to complete an application form that includes a signed statement from the application confirming the accuracy of the information provided and consenting to a background check.
- Follow up reviews of applications with a telephone interview. An initial telephone interview can help qualify the candidates. Red flags identified in the review process could be confirmed or refuted at this state through direct questions.
- Ask the right questions. Direct questions should be asked during interviews to determine resume fact from fiction.
- Conduct mandatory background checks, including criminal records and verification of employment and education histories.
A process of providing new employees specific information about their organization.
A post control technique that focuses on the extent to which employees have achieved expected levels of work during a specified time period.
The use of performance evaluation results as a bases for salary, promotion, and transfer decisions.
A performance evaluation policy of information employees of their strengths and weaknesses and ways to improve their skills and abilities in an effort to improve performance through self-learning and personsal growth.
Standards that form the basis for appraising an individual employee's effectiveness during the performance evaluation.
Four requirements to qualify as a performance standard
- Relevant requirement
- Stable requirement
- Discriminatory requirement
- Practical requirement
A measure used as a performance standard must be determined to have a significant and determinable necessity (relevance) to the individual and organization.
The requirement that a performance evaluation standard must be reliable; that is, different evaluations performed at different times should be in agreement.
The requirement that a performance evaluation standard must recognize the difference between good, average, and poor performers.
An evaluations standard that must have meaning to the evaluator and the person evaluated.
A form of performance evaluation that involves gathering information about a person's behavior from a boss or bosses, direct reports, colleagues, team members, internal and external customers, and suppliers.
A rating systems consisting of statements that describe various types and levels of behavior for a particular job. Each of the statements is weighted according to its importance.
Behaviorally Anchored Rating Scales (BARS)
Rating scales developed by raters and/or ratees that use critical behavioral incidents as interval anchors on each scale; uses about six to ten scales with behavioral incidents to derive the evaluation.
Examples of specific job behaviors that determine various levels of performance.
Management by Objectives (MBO)
A planning and controlling method that comprises two meetings between the superior and the subordinate: (1) first to discuss goals and to jointly establish attainable goals for the subordinate and (2) later to evaluate the subordinate's performance in terms of the goals that have been set.
Key Features of MBO program
- The superior and the subordinate meet to discuss and set objectives for a specific period of time
- Both the superior and the subordinate attempt to establish objectives that are realistic, challenging, clear, and comprehensive. The objectives should be related to the needs of both the organization and the individual.
- The standards for measuring and evaluating the objectives are agreed upon
- The superior and the subordinate establish some intermediate review dates when the objectives will be reexamined.
- The superior plays more of a coaching, counseling, and supportive role and less of a judgmental role.
- The entire process focuses on results and on the counseling of the subordinate, and not on activities, mistake and organizational requirements.
Direct Financial Compensation
Consists of pay an employee receives in the form of wages, salary, bonuses, and commissions.
Indirect financial compensation
Consists of all the rewards, such as vacation time and insurance coverage not included in direct compensation.
An organization's established procedure that specifies pay levels, benefits packages, and other rights, privileges, and perks according to job classification.
Criteria for compensation system effectiveness
- Adequate: Minimum government, union, and managerial pay levels should be met
- Equitable: Everyone should be paid fairly, in line with their effort, abilities, and training.
- Balanced: Pay, benefits, and other rewards should provide a reasonable total reward package.
- Cost-effective: Pay should not be excessive, considering what the organization can afford to pay.
- Secure: Pay should be enough to help employees feel secure and aid them in satisfying basic needs.
- Incentive providing: Pay should motivate effective, productive work.
- Acceptable to the employee: Employees should understand the pay system and feel that it is reasonable for the enterprise and themselves.
A pay scale establish by collective bargaining
individual incentive plan
A compensation plan that pays the employee for units produced; includes piecework, production bonuses, and commissions.
A compensation plan that bases pay rate on the number of pieces produced; a type of individual incentive plan.
differential piece rate
A compensation plan in which an employer pays one rate per piece up to a certain standard number and then a higher rate per piece.
Production Bonus Systems
A system that pays an employee an hourly rate. Then a bonus is paid when the employee exceeds the standard, typically 50 percent of labor savings.
A compensation plan that is the equivalent of straight piecework and typically a percentage of the item's price.
A group incentive compensation plan whose purpose is, through a financial formula, distributing organization-wide gains.
Employee stock option plans (ESOP)
A program that awards company stock to employees as a form of compensation; usually employees are allowed to purchase shares of company stock at a discount from the market prices after a specified performance standard has been surpassed.
A compensation concept that attempts to prove and remedy the allegation that employers systematically discriminate by paying women employees less than their work is intrinsically worth, relative to what they pay men who work in comparable professions; sometimes called pay equity.
Indirect financial compensation consisting of all financial rewards not included in direct financial compensation.