Chapter 9Human Resource Management, Motivation,

and Labor-Management

RelationsLearning Goals

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.

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.

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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.

RECRUITMENT AND SELECTION

Finding Qualified Candidates• 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.

Selecting and Hiring Employees• Must follow legal requirements.

• Society for Human Resources Management offers more information about litigation issues.

• Hiring is a costly process for employers.

ORIENTATION, TRAINING, AND EVALUATION

• During orientation, employer representatives inform employees about company policies regarding their rights and benefits.

Training ProgramsOn-the-Job Training Prepares employees for job duties by allowing them to

perform tasks under the guidance of experienced employees.

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.

Management Development Provides training designed to improve the skills and broaden the knowledge of current and potential executives.

Performance AppraisalsPerformance appraisal Evaluation 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.

CompensationWages Compensation based on an hourly pay rate or the amount of output produced

Salary Compensation 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

Employee BenefitsEmployee 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.

Flexible Benefits• Employees provided a range of benefits options among which they can choose.

• “Family-friendly” benefits such as flexible hours, and dependent care accounts

Flexible Work• Allow employees to adjust their working hours and places of work to accommodate

their personal needs.

• Flextime, compressed workweek, job sharing program, telecommuting.

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.

• 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.

DownsizingDownsizing Process 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.

OutsourcingOutsourcing Contracting with another business to perform tasks or functions

previously handled by internal staff members.

• Complements today’s focus on business competitiveness and flexibility.

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

Maslow’s Hierarchy-of-Needs TheoryMaslow’s hierarchy of needs Theory 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.

Goal-Setting TheoryGoal Target, objective, or result that someone tries to accomplish.

Goal-setting theory Theory 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.

Job Design and MotivationJob enlargement Job design that expands an employee’s responsibilities by

increasing the number and variety of tasks assigned to the worker.

Job enrichment Change in job duties to increase employees’ authority in planning their work, deciding how it should be done, and learning new skills.

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.

LABOR-MANAGEMENT RELATIONSDevelopment of Labor UnionsLabor union Group 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

Labor Legislation• National Labor Relations Act of 1935 (Wagner Act)

• Fair Labor Standards Act of 1938

• Taft-Hartley Act of 1947 (Labor-Management Relations Act)

• Landrum-Griffin Act of 1959 (Labor-Management Reporting and Disclosure Act)

The Collective Bargaining ProcessCollective bargaining Process 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, hours, benefits and employee rights.

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.

Competitive Tactics of Unions and ManagementUnion 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.

The Future of Labor Unions• Membership and influence grew through the 20th century, but both are now

declining.

• Why the decline?

• Competitive compensation and benefit packages at nonunion employers.

• Effective communications by management.

• 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.

• 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.