CHAPTER 5 Small Business and the Entrepreneur

CHAPTER 5 Small Business and the Entrepreneur

9 chapter Human Resource Management Better Business 1st Edition Poatsy Martin Slide presentation prepared by Pam Janson Stark State College of Technology 2010 Pearson Education, Inc. 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior

written permission of the publisher. Printed in the United States of America. 2010 Pearson Education, Inc. 2 Learning Objectives 1. What processes are involved in human resource management? 2. Why is the performance management process proven to be more effective than performance appraisals? 3. What are the main components of compensating and scheduling employees? 4. How does employee status change through promotions, transfers, retirement, and termination? 5. How does incorporating diversity affect the

workforce? 6. What are the objectives, structures, and future of labor unions in the global business environment? 2010 Pearson Education, Inc. 3 Human Resource Management 2010 Pearson Education, Inc. Publishing as Prentice Hall 4 Manpower Planning Assess the supply of and demand for current and future employee

resources Forecasting: Workforce Profile: Personnel inventory o o o o o o o Age Education Training Experience Specialized skills Current position

Previous positions Based on o o o o Predicted sales Current workforce skills Technology changes Use of temporary workers o Turnover o Retirement o Planned reassignments 2010 Pearson Education, Inc.

Publishing as Prentice Hall 5 Job Descriptions and Job Specifications 2010 Pearson Education, Inc. Publishing as Prentice Hall 6 Internal Recruiting Methods o Company intranet o Staff notice boards o In-house newsletters o Staff meetings

2010 Pearson Education, Inc. Publishing as Prentice Hall 7 Internal Recruiting Advantages Morale booster Less risk Faster Less costly Disadvantages Limited pool of candidates Creates cascading internal vacancies

Might miss a fresh perspective 2010 Pearson Education, Inc. Publishing as Prentice Hall 8 External Recruiting 2010 Pearson Education, Inc. 9 Recruiting Challenges One of the newer challenges is the use of technology o Online job and resume posting sites o Web and video blogs

o Virtual job fairs o Social networking technologies o Web 2.0 techniques o Creating enhanced online job postings that stand out Sifting through these responses to find the right person for the job can be time-consuming and burdensome Finding qualified candidates for critical positions is still a major challenge 2010 Pearson Education, Inc. 10 The Hiring Process 2010 Pearson Education, Inc. Publishing as Prentice Hall

11 Federal Laws that Impact Human Resource Management Federal Equal Employment Opportunity The Civil Rights Act of 1964 Americans with Disabilities Act Age Discrimination in Employment Act 2010 Pearson Education, Inc.

Publishing as Prentice Hall 12 Employee Training Benefits Increased job satisfaction, motivation, and morale among employees Greater efficiency in work, resulting in financial gain More effective use of new technologies and methods Development of new strategies and products Lower employee turnover Fewer interpersonal conflicts and better communication 2010 Pearson Education, Inc.

13 Training Methods Orientation program On-the-job training Apprentice training program Programmed learning approach Simulation/vestibule training Online training 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 Management Development

Programs: Training Techniques 2010 Pearson Education, Inc. Publishing as Prentice Hall 15 Performance Appraisal Process 1. Determine standards that employees should aim for in their work. 2. Evaluate the employees performance in comparison with these standards. 3. Provide feedback to reduce and eliminate poor performance and improve or enhance positive performance. 2010 Pearson Education, Inc. Publishing as Prentice Hall

16 A Sample Performance Appraisal 2010 Pearson Education, Inc. 17 Problems with Performance Appraisals Managers may shy away from them if they are not comfortable criticizing Managers may have difficulty quantifying performance The process does not always offer the

opportunity to follow up With large time spans between appraisals, follow-up items may not occur 2010 Pearson Education, Inc. 18 Performance Management An alternative to performance appraisals Combines goal setting, performance appraisal, and training and development into a unified and ongoing process Employees constantly receive feedback and opportunities for training and development

2010 Pearson Education, Inc. Publishing as Prentice Hall 19 Compensation Strategies Salary Wages Incentivebased payment o Commissions Bonuses 2010 Pearson Education, Inc. Publishing as Prentice Hall 20

Retirement Plans and Other Financial Incentives 401(k) plans Pension plans o Defined benefit plans o Defined contribution plans Profit sharing plans Stock option plans Employee stock purchase plans Employee stock ownership plans (ESOPs) 2010 Pearson Education, Inc.

Publishing as Prentice Hall 21 Employee Benefits Benefits are non-cash compensation payment structures They can come in many forms: o Health and disability insurance o Vacation and sick pay o Retirement plans Flexible benefit plans o Cafeteria plans Work/life benefits 2010 Pearson Education, Inc. Publishing as Prentice Hall

22 Alternative Scheduling Arrangements Alternative scheduling plans (flextime) Permanent part-time Job sharing Compressed work week Telecommuting 2010 Pearson Education, Inc. Publishing as Prentice Hall 23 Temporary and Contingent Workers Benefits for the Company

Benefits for the Worker Allow more flexibility in workforce size Can use for absent employees or busy times Can provide specific skills for special projects Can evaluate temporary workers for full-time positions Flexibility Variety Learn and improve skills Evaluate company for

potential permanent employment Provide exposure to potential career/industry 2010 Pearson Education, Inc. Publishing as Prentice Hall 24 Promotions and Transfers From the Employee Perspective Employees look to increase their stature, responsibility, and pay through promotion

Promotion may not always result in a positive situation if it is done with secrecy, unfairness, or arbitrariness Two career paths o Management o Individual contributors From the Employer Perspective Employers like to promote from within when possible Management must ensure promotions are based on a distinct set of criteria

such as seniority or competency Two promotion paths o Management o Individual contributors 2010 Pearson Education, Inc. 25 Retirement Mandatory retirement o Historically, age 65 o Nearly of workers would like to retire before age 60 o 7 out of 10 of workers plan to keep working past retirement age

The major contributing factor is financial need Worker buyouts o Also called golden parachutes o Offer financial incentives for older workers to retire 2010 Pearson Education, Inc. Publishing as Prentice Hall 26 Terminating Employees Due to corporate downsizing, etc. o Outplacement services often offered Due to poor performance or policy violation o Employment at will

Exceptions: discrimination, whistle-blowing, workers compensation o Must have written record of issues leading to dismissal 2010 Pearson Education, Inc. Publishing as Prentice Hall 27 Managing Workforce Diversity Cultural diversity o International expansion o Domestic hiring of international workers Religion

o Provide for religious observations at work o Strive to avoid potential friction between groups Gender o Gender-related issues have improved, but not gone away Age o The benefits and challenges of an aging workforce 2010 Pearson Education, Inc. Publishing as Prentice Hall 28

Impact of Diversity View diversity as: o More than just a response to affirmative action requirements o A competitive advantage o Mission-critical to the organization, requiring: Training Executive accountability Grass roots support such as mentorships 2010 Pearson Education, Inc. Publishing as Prentice Hall 29

Labor and Union Issues Historically, labor unions were developed to protect workers from horrible working conditions Today, unions act as bargaining units to negotiate specific employment issues for groups of workers o Locals are created for specific industry, company, region, or business sector 2010 Pearson Education, Inc. Publishing as Prentice Hall 30 AFL-CIO American Federation of Labor (AFL) founded in 1886 to protect skilled

workers Congress of Industrial Organization (CIO) formed in 1935 to represent entire industries Combined in 1955 and has 56 member unions today 2010 Pearson Education, Inc. Publishing as Prentice Hall 31 Management/Labor Relations Collective bargaining process If no agreement is reached: o Mediation o Arbitration If negotiation breaks down:

o Management may hire strikebreakers or lockout union members o Union members may boycott, strike (and picket), or stage sick-outs 2010 Pearson Education, Inc. Publishing as Prentice Hall 32 The State of Labor Unions The role of unions is declining in the U.S. because of: o Their success in improving working conditions. o Decline in traditional union industries.

Unions are looking at international coordination to protect their interests 2010 Pearson Education, Inc. Publishing as Prentice Hall 33 Trends in Employee Benefits Domestic-partner benefits Paternity benefits Adoption benefits 2010 Pearson Education, Inc. Publishing as Prentice Hall 34

Chapter Summary 1. What processes are involved in human resource management? 2. Why is the performance management process proven to be more effective than performance appraisals? 3. What are the main components of compensating and scheduling employees? 4. How does employee status change through promotions, transfers, retirement, and termination? 5. How does incorporating diversity affect the workforce? 6. What are the objectives, structures, and future of labor unions in the global business environment? 2010 Pearson Education, Inc. Publishing as Prentice Hall

35 Beyond the Book 2010 Pearson Education, Inc. Publishing as Prentice Hall 36 External Recruiting Advantages: Disadvantages: Provides new ideas and fresh perspectives May be more able to initiate a turnaround

Brings in experienced employees May be less upsetting to present organizational hierarchy Allows rapid growth Can increase diversity Takes longer and costs more Risk of candidates ability to fit with rest of organization Demoralizing for existing employees Outsider takes time to become familiar with current systems Current organization members may fight new

ideas 2010 Pearson Education, Inc. Publishing as Prentice Hall 37 Eighty Is the New Fifty More executives are in their 70s, 80s, and even 90s There is still bias toward older workers in general Organizations have to learn to manage the older workforce Perceptions should change as the baby boomers age past the traditional retirement age and want to keep working

2010 Pearson Education, Inc. Publishing as Prentice Hall 38 Rethinking Retirement Charles Schwab Corporation surveyed nearly 4,000 across four generations: o Silent Generation (age 6383) o Boomers (age 4462) o Generation X (age 32 43) o Generation Y (age 21 31)

Survey conducted in March and April 2008 Some of the findings: o Old age doesnt begin until 75 or older o Median net worth of retires today is $250,000, but respondents believe they need at least $500,000 o Gen Y expects to provide 61% of retirement funds themselves vs. the Silent Generation at 32% o Staying mentally active is the biggest reason for working after retirement o 45% view retirement as a

time to give back 2010 Pearson Education, Inc. Publishing as Prentice Hall 39 Monster.com and Workforce Diversity Many companies look at managing a diverse workforce as a competitive advantage. Hiring workers that represent and understand emerging groups makes sense. o Hispanic Americans account for 15% of the countrys total population. o The Hispanic population accounted for $489 billion in 2000 and is expected to be $1.2 trillion in 2012.

Monster has created a diversity database to help job candidates highlight their cultural understanding, experiences, and knowledge. 2010 Pearson Education, Inc. 40 The State of U.S. Workers The number receiving unemployment benefits in June 2008 rose to 3.1 million, the highest since 2004 Labor is business biggest cost o Wage growth has decelerated o Average weekly earnings of production workers were up 3.2% from June 2007 to June 2008 (4.6% in August 2006)

In recent decades, labor unions have most power, companies have outsourced offshore and automated U.S. workers are getting squeezed with sharply rising prices for food and energy, but wages growing more slowly 2010 Pearson Education, Inc. 41 Human Resources and the Green Movement: Work Less The U.S. leads the world in work and waste U.S. workers work 100+ more hours per year than in 1976 o This has increased our productivity but also our energy consumption and greenhouse gas emissions

To help the Green Movement, companies should reinvent the work week 2010 Pearson Education, Inc. Publishing as Prentice Hall 42

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