9.1 Strategic Human Resource Management

• Human resource management consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce. The purpose of the strategic human resource management process is to get the optimum work performance that will help realize the company's mission and vision.
• Two concepts important to human resource management are human capital and social capital. (1) Human capital is the economic or productive potential of employee knowledge. (2) Social capital is the economic or productive potential of strong, trusting, and cooperative relationships.
• Strategic human resource planning consists of developing a systematic, comprehensive strategy for (a) understanding current employee needs and (b) predicting future employee needs.
• Understanding current employee needs requires first doing a job analysis and then writing a job description and job specification. The purpose of job analysis is to determine, by observation and analysis, the basic elements of a job. Once the fundamentals of a job are understood, a job description can be written, which summarizes what the holder of the job does and how and why he or she does it. Next comes the job specification, which describes the minimum qualifications a person must have to perform the job successfully.
• Predicting employee needs means a manager needs to become knowledgeable about the staffing an organization might need and the likely sources of staffing.

9.2 The Legal Requirements of Human Resource Management

• Four areas of human resource law that any manager needs to be aware of are as follows: (1) Labor relations are dictated in part by the National Labor Relations Board, which enforces procedures whereby employees may vote to have a union and for collective bargaining. Collective bargaining consists of negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security. (2) Compensation and benefits are covered by the Social Security Act of 1935 and the Fair Labor Standards Act, which established minimum wage and overtime pay regulations. (3) Health and safety are covered by the Occupational Safety and Health Act of 1970, among other laws. (4) Equal employment opportunity is covered by the Equal Employment Opportunity (EEO) Commission, whose job it is to enforce antidiscrimination and other employment-related laws. Two important concepts covered by EEO are (a) discrimination, which occurs when people are hired or promoted—or denied hiring or promotion—for reasons not relevant to the job, such as skin color or national origin, and (b) affirmative action, which focuses on achieving equality of opportunity within an organization.

9.3 Recruitment & Selection: Putting the Right People into the Right Jobs

• Recruiting is the process of locating and attracting qualified applicants for jobs open in the organization. Recruiting is of two types: internal and external. (1) Internal recruiting means making people already employed by the organization aware of job openings. (2) External recruiting means attracting job applicants from outside the organization. A useful approach with external recruitment is the realistic job preview, which gives a candidate a picture of both positive and negative features of the job and organization before he or she is hired.
• The selection process is the screening of job applicants to hire the best candidates. Three types of selection tools are background information, interviewing, and employment tests. (1) Background information is ascertained through application forms, resumes, and reference checks. (2) Interviewing takes three forms. (a) The unstructured interview involves asking probing questions to find out what the applicant is like. (b) The structured interview involves asking each applicant the same questions and comparing their responses to a standardized set of answers. The first type of structured interview is the situational interview, in which the interview focuses on hypothetical situations. (c) The second type of structured interview is the behavioral-description interview, in which the interviewer explores what applicants have actually done in the past. (3) Employment tests are legally considered to consist of any procedure used in the employment selection decision process, but the three most common tests are ability tests, personality tests, and performance tests. Some companies have assessment centers, in which management candidates participate in activities for a few days while being assessed in performance tests by evaluators. Other tests include drug testing, polygraphs, and genetic screening.

9.4 Orientation, Training, & Development

• Three ways in which newcomers are helped to perform their jobs are through orientation, training, and development.
• Orientation consists of helping the newcomer fit smoothly into the job and organization. Following orientation, the employee should emerge with information about the job routine, the organization's mission and operations, and the organization's work rules and employee benefits.
• Training must be distinguished from development. Training refers to educating technical and operational employees in how to better do their current jobs.
• Development is the term describing educating professionals and managers in the skills they need to do their jobs in the future.
• Both training and development may be effected through on-the-job training methods and off-the-job training methods.

9.5 Performance Appraisal

• Performance appraisal consists of assessing an employee's performance and providing him or her with feedback. Appraisals are of two general types—objective and subjective. (1) Objective appraisals are based on facts and are often numerical. An example is management by objectives. (2) Subjective appraisals are based on a manager's perceptions of an employee's traits or behaviors. Trait appraisals are ratings of subjective attributes such as attitude and leadership. Behavioral appraisals measure specific, observable aspects of performance. An example is the behaviorally anchored rating scale (BARS), which rates employee gradations in performance according to scales of specific behaviors.
• Most performance appraisals are made by managers, but they may also be made by coworkers and subordinates, customers and clients, and employees themselves (self-appraisals). Sometimes all of these may be used, in a technique called the 360-degree assessment, in which employees are appraised not only by their managerial superiors but also by their peers, subordinates, and sometimes clients. In another evaluation technique, forced ranking performance review systems, all employees within a business unit are ranked against one another, and grades are distributed along some sort of bell curve.
• Effective performance feedback can be effected in two ways: formal and informal. Formal appraisals are conducted at specific times throughout the year and are based on performance measures that have been established in advance. Informal appraisals are conducted on an unscheduled basis and consist of less rigorous indications of employee performance.

9.6 Managing an Effective Workforce: Compensation & Benefits

• Compensation has three parts: wages or salaries, incentives, and benefits. (1) In the category of wages or salaries, the concept of base pay consists of the basic wage or salary paid employees in exchange for doing their jobs. (2) Incentives include commissions, bonuses, profit-sharing plans, and stock options. (3) Benefits are additional nonmonetary forms of compensation, such as health insurance, retirement plans, and family leave.

9.7 Other Concerns in Managing an Effective Workforce

• Managers must manage promotions, transfers, disciplining, and dismissals. (1) In considering promotions, managers must be concerned about fairness, nondiscrimination, and other employees' resentment. (2) Transfers, or moving employees to a different job with similar responsibility, may take place in order to solve organizational problems, broaden managers' experience, retain managers' interest and motivation, and solve some employee problems. (3) Poor-performing employees may need to be disciplined or demoted. (4) Dismissals may consist of layoffs, downsizings, or firings.
• Managers must also deal with such sensitive matters as dealing with a diversified workforce or international workforce. A third matter is alcohol and drug abuse, which may be helped by referring employees with substance-abuse problems to the Human Resources Department, which may have an employee assistance program that may help employees overcome personal problems affecting their job performance. A fourth matter is sexual harassment, which consists of unwanted sexual attention that creates an adverse work environment and which may be of two types—the quid pro quo type, which may cause direct economic injury, and the hostile environment type, in which the person being harassed experiences an offensive work environment.