staffing 2

Chapter 9

STAFFING AND HUMAN RESOURCE MANAGEMENT

Chapter 9 explains the nature of staffing, giving insight into the major component of human

resource management. The view of staffing here includes its strategic and legal aspects, human

resource planning, recruitment, selection and placement, orientation, training and development,

performance evaluation (appraisal), and compensation. Included also is a glimpse of how labor

unions contribute to staffing and human resource management. Two other aspects of staffing,

termination and managing ineffective performers, are covered later in Chapter 16. Human

resource management is inherently interesting to many students because it relates directly to their

experiences in seeking employment.

Learning Objectives

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1. Explain how human resource management is part of business strategy.

2. Describe the components of organizational staffing.

3. Present an overview of recruitment and selection.

4. Present an overview of employee orientation, training, and development.

5. Explain the basics of a performance evaluation system.

6. Summarize the basics of employee compensation.

7. Understand the role of labor unions in human resource management.

Chapter Outline and Lecture Notes

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I. HUMAN RESOURCE MANAGEMENT AND BUSINESS STRATEGY

The modern role for human resource professionals is that of a partner in helping the

organization attain its business strategy. Without effective human resource management,

the company cannot accomplish high-level goals such as competing globally, grabbing

market share, and being innovative. A specific way HRM contributes to business strategy

is by helping to build high-performance work practices. An integration of 92 studies found

that organizations can increase their performance 20 percent by implementing high-

performance work practices.

II. THE STAFFING MODEL

Staffing the organization is the heart of human resource management. Staffing follows a

logical flow of events (see Exhibit 9-1 in the text): (a) awareness of legal aspects, (b)

human resources planning; (c) recruitment; (d) selection, (e) orientation, training, and

development, (f) compensation, and (g) performance evaluation. A major strategy of

staffing is to retain valuable employees, and any aspect of staffing can contribute to

retention. The main reasons for turnover are individual, environmental, and workplace

factors.

A recent theory of turnover called job embeddedness suggests that a combination of many

factors influences whether employees stay with a firm. Among these influences are the job

itself and off-the-job factors such as personal and family commitments.

9/Staffing and Human Resource Management

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A. Legal Aspects of Staffing

Federal, state, provincial, and local laws influence every aspect of organizational

staffing. Exhibit 9-2 summarizes key legislation that affects staffing in the United

States. (See also http://www.eeoc.gov/abouteeo/overview_laws.html ) When a possible

legal issue arises, the manager should review the relevant legislation in depth and

confer with a company specialist in employment law.

Affirmative action programs help implement the spirit and letter of employment

discrimination law in the U.S. Affirmative action consists of complying with anti-

discrimination law and correcting past discriminatory practices. Employers actively

recruit, employ, train, and promote minorities and women who may have been

discriminated against previously by the employer. A national debate continues over

whether any person in a competitive situation deserves a preference because of race,

ethnicity, or sex.

Under Title VII, the ADA, and the ADEA, it is illegal to discriminate in any aspect of

employment, including: hiring and firing; compensation, assignment or classification of

employees; transfer, promotion, layoff, or recall; job advertisements; recruitment;

testing; use of company facilities; training and apprenticeship programs; fringe

benefits; pay, retirement plans, and disability leave; or other terms and conditions of

employment.

An example of discrimination is harassment on the basis of race, color, religion, sex,

national origin, disability, or age. Although most forms of discrimination may appear

clear-cut, a good deal of interpretation is required to decide if a given employee is the

subject of discrimination.

B. Strategic Human Resource Planning

Staffing begins with strategic human resources planning, the process of anticipating

and providing for the movement of people into, with, and out of an organization to

support the firm’s business strategy. Planning helps identify the gaps between current

employee competencies and behavior and the competencies and behavior needed in the

organization’s future. The four basic steps in strategic human resource planning are

planning for (1) future needs, (2) future turnover, (3) recruitment, selection, and layoffs,

and (4) training and development. In step 3 a major choice is between the training and

promoting current employees versus hiring from the outside.

III. RECRUITMENT

Recruitment is the process of attracting job candidates with the right characteristics and

skills to fill job openings. The preferred recruiting method is to begin with a large number

of possible job candidates and then give serious consideration to a much smaller number.

A. Purposes of Recruitment

Recruitment searches for a good person-organization fit, and attempts to sell the

organization to high-quality prospective candidates.

http://www.eeoc.gov/abouteeo/overview_laws.html


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B. Job Descriptions and Job Specifications

The job description explains in detail what the jobholder is supposed to do. A job

specification is a statement of the personal characteristics needed to perform the job.

Many firms see job descriptions and job specifications decreasing in relevance because

some workers are expected to occupy flexible roles.

C. Recruiting Sources

Recruiting sources can be classified into (1) present employees, (2) referrals by present

employees, (3) external sources other than online approaches, and (4) online recruiting

including company Web sites—known as e-recruiting. Company Websites have

ascended as recruiting sources, as has creating pages on social networking sites. The

data presented in Exhibit 9-3 are instructive, with employee referrals and the Internet

being the two major recruiting sources.

D. Global Recruiting

Multinational businesses must have the capability to connect with other parts of the

globe to locate talent anywhere in the world. Company recruiters must meet job

specifications calling for multiculturalism (being able to conduct business in other

cultures) on top of more traditional skills. Global recruiting for managers can be

difficult because candidates must be found who can blend the work practices of the two

cultures.

IV. SELECTION

Selection follows recruitment. Good candidates are the lifeblood of any firm, and selection

mistakes can cost the employer three times the worker’s annual salary.

A. Preliminary Screening Interview

A brief screening interview helps determine if the candidate is plausible. The screening

interview is often conducted over the telephone. “Knockout” questions are sometimes

used for quickly disqualifying candidates.

B. Types of Psychological and Personnel Tests

Tests remain an important part of selection, and have shown a recent surge in use.

1. Types of Psychological and Personnel Tests The four commonly used types are

achievement, aptitude, personality (including emotional intelligence), and honesty

and integrity. A major factor measured by integrity tests is conscientiousness. The

Big Five Personality Factors presented in Exhibit 9-5 are useful for discussions

about job demands.

2. Validity and Equal Employment Opportunity The EEOC insists that selection

instruments must be validated, job-related, and not discriminatory toward any

group. At their best, batteries of tests make an important contribution to selection

and therefore to increasing workforce productivity. The most valid predictors of job

success for a variety of general jobs are cognitive intelligence and

conscientiousness.

C. The Job Interview and Job Simulations

Employment interviews are more valid when the interviewer is trained and

experienced. Keep in mind the importance of the realistic job preview, a complete

disclosure of the potential negative features of a job to a job candidate. Guidelines for


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conducting a productive job interview are presented in Exhibit 9-6. Several of the

suggestions reflect a screening approach referred to as behavioral interviewing

because the answers to many of the questions reveal actual job behaviors relevant to a

given position. Exhibit 9-7, the Job Interviewee Checklist, can be useful for class

discussion.

An extension of behavioral interviewing is to give the job application a job simulation

(work task to perform) to help determine job qualifications. Job simulations are mostly

relevant for experienced candidates, whereas many people are hired for positions they

have never performed. Applicants tend to regard job simulations to be relevant.

D. Reference Checking and Background Investigation

A reference check is an inquiry to a second party about a job candidate’s suitability for

employment. The two main areas of inquiry are past job performance and the ability to

get along with co-workers. Asking about violent behavior has become more frequent.

Former and prospective employers have a qualified privilege to discuss an employee’s

past performance. Job applicants have legal access to written reference unless they sign

a waiver.

Background investigations are closely related to reference checks, except that they

focus on information form sources other than former employees. Credit checks are

usually included as part of the checking. Background investigations are useful because

so many job candidates present untrue information. An estimated 40 to 70 percent of

job applicants enhance their work histories in their résumés and during the interview.

E. The Physical Examination and Drug Testing

The physical exam gives some indication as to the person’s physical ability to handle

the requirements of a particular job, and provides a basis for later comparisons. The

ADA increases the importance of the physical exam. So long as the candidate can

perform the essential aspects of the job, including the employer making reasonable

accommodations, the candidate cannot be disqualified.

About 60 percent of large companies test all job applicants for illegal drug use, and the

number is declining. Testing hair samples is a recent approach to drug testing. Abuse of

prescription drugs is also a problem. A concern is that inaccurate drug testing may

unfairly deny employment to worthy candidates, yet drug abusers create many

problems if hired.

F. Cross-Cultural Selection

Managers and employment interviewers should familiarize themselves with key facts

about the other culture, such as differences among various schools. Many selection

principles apply well across cultures, but some do not. A key aspect of cross-cultural

selection is choosing workers who will fit well as expatriates. One predictor of success

is the desire for an out-of-the country assignment. Matching the person’s style to the

culture is another key success factor.


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V. ORIENTATION, TRAINING, AND DEVELOPMENT

Most firms no longer operate under a “sink or swim” philosophy when it comes to

employee learning.

A. Employee Orientation

An employee orientation program more formally acquaints new employees with the

company imparts information about the corporate culture. Orientation also conveys to

new employees the specific nature of their job and expectations in terms of

performance. A buddy or a mentor might also assist in orientation. Another aspect of

orientation is informal socialization in which coworkers introduce new employees to

aspects of the organizational culture.

B. Training and Development

Training is any procedure intended to foster and enhance learning among employees,

and is aimed at acquiring job skills. Training is used to develop both hard (technical,

scientific, and numerical) sills as well as soft skills (interpersonal skills and attitudes).

A substantial amount of skills training in industry is delivered through computers. E-

learning is a Web-based form of computer-based training. Much computer-based

training includes an interaction between the trainee and the training material. Some

training is delivered through MP3 players, enabling workers to receive training at any

spare moment, or just in time.

Despite the contribution and growth of e-learning, many students, however, need the

classroom interaction. Many companies are now taking a balanced approach of

classroom training combined with e-learning. Developing interpersonal skills requires

face-to-face practice. Many workers lack enough self-discipline and self-motivation to

follow through with e-learning.

Development is a form of personal improvement generally consisting of enhancing

knowledge and skills of a complex and unstructured nature. A new thrust in

development is to teach managers to become better life-long learners.

Conducting training and development programs begins with determining what types of

training are needed. Training and development needs can also be identified for the entire

organization, or a large chunk thereof. However, there are also universal training needs

relating to such topics as communication, motivation, and decision making.

After needs are assessed, they must be carefully matched to training and development

programs. Sometimes a program must be tailored to fit company requirements. A

current trend is for non-managers to participate in training and development usually

reserved for managers and future managers. Informal learning (outside of classrooms)

has been elevated in status recently.

VI. PERFORMANCE EVALUATION (OR APPRAISAL)

A performance evaluation (or appraisal) is a formal system for measuring, evaluating,

and reviewing performance. Research indicates that performance has three major

components: task performance, citizenship performance, and counterproductive

performance. An offshoot of evaluating employees against a performance standard is to


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use forced rankings in which employees are measured against each other. One ranking

approach is forcing employees into the categories of “Top 20%, Vital 70%, and Bottom

10%.” When bottom-group employees are fired, the system is called “rank and yank.”

Forced rankings are highly controversial. The concerns include that managers are forced

to rank some good workers as “bottom performers,” teamwork suffers, and that

discrimination occurs.

A widely-used performance appraisal is 360-degree feedback, in which a person is

evaluated by a sampling of all the people with whom he or she interacts. Self-assessment

is also included. The 360-degree survey can also be used to supplement a traditional

performance appraisal. However, 360-dgree feedback is used more often for development

than appraisal.

A. Purposes of Performance Evaluation

Performance evaluations serve a number of important administrative and leadership

purposes. Administrative purposes include salary administration and documenting

poor performance for purposes of dismissal. The leadership purposes of performance

appraisal include increasing productivity and helping employees grow and develop.

Performance appraisals help measure whether the previous steps in the staffing model

have been effective.

B. Design of the Performance-Evaluation System

Performance-evaluation systems measure traits, behavior, results, or a combination of

the three. Traits are the stable aspects of people, closely related to personality.

Behavior, or activity, is what people do on the job. Results are what people

accomplish, or the objectives they attain. Research strongly suggests that employees

are the most satisfied with performance appraisal when they participate in the

process.

Many workers dislike having their performance evaluated, and many managers

dislike evaluating workers. One alternative to performance appraisals is for managers

to have face-to-face conversations with workers about their performance on a regular

basis.

VII. COMPENSATION

Compensation, the combination of pay and benefits, is closely related to staffing.

A. Types of Pay

Wages and salary are the most common forms of pay. Wages are hourly pay, whereas

salary is an annual amount of money paid to a worker. A bonus serves as a reward for

good performance. To determine how much a given job should receive in wages or

pay, many companies perform a job evaluation, the process of rank-ordering job

based on job content.

The major thrust in compensation for workers at all levels is variable pay, in which

the amount of money a worker receives is partially dependent on his or her

performance. Another approach to variable pay, stack ranking, requires managers to


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rank each employee within each unit, and distribute raises and bonuses accordingly.

Yahoo uses stack ranking to help retain top performers.

B. Employee Benefits

An employee benefit is any noncash benefit given to workers as a condition of their

employment. The benefit package averages about 35 percent of salaries. A substantial

number of firms offer a flexible benefit package in which employees select a group

of benefits tailored to their preferences. Exhibit 9-9 presents a representative list of

employee benefits, organized by type and frequency.

Despite the importance of benefits, many companies in recent yeas have either

decreased or required employees to pay a larger share, particularly with medical

benefits. Health-care insurance and pensions have been looked upon carefully by

management as a detriment to competing successfully against foreign competitors.

To reduce costs, many companies have shifted workers to a consumer driven health

plan in which workers assume a much large deductible. Some companies have

eliminated company pension plans by declaring bankruptcy, and then forcing the

federal government to pay partial benefits through the Pension Benefit Guaranty

Corp. Cash balance plans are another method for reducing pension expenses.

VIII. THE ROLE OF LABOR UNIONS IN HUMAN RESOURCE MANAGEMENT

When a firm is unionized, the labor union influences almost all human resources

programs and practices. A major purpose of a labor union is to attain fair treatment for

workers in such areas as compensation including health and retirement benefits, safe

working conditions, working hours, job security, and work-life programs. In the U. S.,

about 12.5% of wage and salary workers are union members; 36.5% for government

workers, and 7.8% for private industry.

Because the manufacturing sector has been hardest hit by foreign competition, union

leaders are often unable to push for improved compensation. Unions face the threat of

work being sent offshore or a company declaring bankruptcy.

Many instances exist of healthy partnerships between management and labor unions in

which both sides gain advantage. The American Rights to Work Group notes that the

companies on its list of partners excel in human resource management practices such as

creating new jobs, and protecting workers’ safety and health. Costco and Harley-

Davidson make the list.

Comments on End-of-Chapter Questions

___________________________________________________________________________ 1. What is your opinion about paying human resource managers as much as managers

in other functions, such as marketing, operations, and finance?

The positive argument for paying human resource managers as much as their

counterparts in other business functions is that human resources contributes mightily to

the bottom line in such activities as recruiting the right people to the organization,

organizing training programs that boost productivity, and efficiently managing

compensation. Many more human resource managers earn hefty executive incomes,


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including Dennis Donovan, the former executive vice president of HR at Home Depot

who left after CEO Robert Nardelli was ousted. One counterargument is that some

traditional managers wonder what HR managers do aside from shuffling papers. Also,

supply and demand rules. If HR managers are willing to work for less than their

counterparts in other functions, why bother paying them equivalent wages?

2. If you were applying for a position in your chosen field, what would be your reaction

to being fingerprinted as part of the screening process?

Many people would regard being finger printed as part of applicant screening to be an

invasion of privacy. Part of the problem is that finger printing is perceived by many

as a process mostly reserved for criminals and suspected criminals. The opposite view

is that companies must protect themselves from hiring people with criminal records

and potential terrorists, so finger printing is necessary. Some people would also argue

that because they have nothing to hide, finger printing as part of the application

process would not be bothersome.

3. Why should a manager who does not work in the human resources department be

familiar with the various aspects of staffing?

Staffing is a key part of virtually every manager's responsibilities. Human resources

specialists provide professional assistance, yet it remains the manager's responsibility

to carry out such functions as making hiring decisions and evaluating performance.

4. Noted psychologist David McClelland once said, “They say you can teach a squirrel

to fly. But it’s easier to hire the eagle.” What did McClelland mean by his metaphor?

Assuming the statement is true, what implication does the statement have for staffing

and human resource management?

McClelland meant that hiring people with the right aptitude and skills is more

effective than starting from scratch in attempting to train an employee. The

implication is that selecting the right people for a given job remains an effective

human resource management strategy.

5. What have you learned about staffing that you might apply to your own job search?

The astute student will find some information of value here. A small fact such as the

concern some employers have about the abuse of prescription drugs could help a

person prepare for the physical exam. Some readers might have such a critical job

skill that they have no concern about a job search. However, for most people

understanding the staffing process will help them find a better job.

6. What would be the advantages and disadvantages to the organization and individuals

if a company abolished performance evaluations?

The advantage to a company of abolishing the performance appraisal system is that

negative attitudes about the system, and conflict over the ratings, would subside.

Employees who believed that pay increases should be based solely on seniority


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would have their day. The disadvantages, however, would be substantial. Less

information would be available for making decisions about pay, transfers,

promotions, and downsizing. Companies would lack vital evidence they need to

justify firing workers in case they faced a lawsuit. Many high-performing employees

would be discouraged because they would lack formal recognition for their

accomplishments. Also, anecdotes and hearsay would replace documentation for

evaluating employees.

7. What is your opinion of the ethics of American business firms reducing health care

benefits and pensions of retirees to help compete against foreign manufacturers?

Here would be a good opportunity to run this proposition through an ethical screen.

An unethical feature of reducing health and pension benefits is that the companies

involved are reneging on promises made in the past, often by previous management.

The people will get hurt the most are retirees who are now just squeezing by

financially. The positive argument for the ethics is that by lowering operating costs,

the American business firms in questions can be more competitive thereby saving

many jobs.

Comments on Skill-Building Exercises

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Presenting Yourself in 30 Seconds—End of Chapter

We have found this exercise to be extremely valuable for career development. Armed with a 30-

second self-promotion speech, the student is prepared for job interviews, job fairs, and chance

encounters with key people. I enjoy immensely watching the attentive body language of students

watching other students give their 30-second presentations.

The Selection Interview—End of Chapter

This activity is usually well received. It illustrates how difficult it is to conduct a good interview.

A typical problem is that the interviewer talks more than the interviewee—a common

shortcoming of neophyte interviewers.

Recruiting on the Net—Internet

A key feature of this exercise is that it duplicates exactly what managers and specialists do to

recruit employees. Students are likely to be fascinated with observing how others present

themselves on a résumé. One frustration built into this exercise, is that some recruiting

approaches require that the company pay a fee before gaining access to the résumé bank.

Answers to Case Questions

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Can Boomer Road Warriors Really Solve Our Problems?


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This case illustrates how fresh and imaginative thinking may be called for in recruiting workers

in strong demand but short supply.

1. What advice would you offer the trucking company in question about recruiting retired

baby boomer couples as drivers?

The trucking company in question should move forward with hiring trucker couples, but

not be blinded by the allure of the idea. Even though trucking companies are in dire need

of truckers, the couples should still be screened for such factors as physical capability and

conscientiousness.

2. Would the trucking company in question really be hiring two people to do the job of one

trucker?

The company is probably not paying as much as it would be for two full-time truckers

because the pay offered for a couple is usually less than the compensation for two

truckers. Another consideration is that a team can keep the truck on the road for longer

stretches than an individual trucker might because of regulations about how many hours

in one day a trucker can be at the wheel. However, if the couple takes many recreational

stops, the number of hours the truck remains on the road would not exceed that

accomplished by an individual driver.

3. What other out-of-the-ordinary recruiting source for truckers could you offer this

company, as well as other truckers?

Hispanics were mentioned in the case as a promising source of candidates for trucker

training and hiring. Within the United States, it might be effective to recruit new truckers

in areas of high unemployment created by downsizing in basic industries. Many

companies in western states, for example, recruit workers in Michigan because of the

auto industry cutbacks. Recruiting potential truckers from countries with job shortages is

also potentially fruitful, providing that work permits could be obtained.

4. What advice can you offer the trucking company in question to avoid practicing job

discrimination against young applicants for their trucking jobs?

The company should maintain equal employment opportunity, and certainly not

discriminate against qualified younger candidates for trucker positions. Because so few

young people are applying to work as truckers, the company would most likely not be

faced with the prospects of turning down a young trucker just to hire an older person or

couple.

The Scrutinized Job Candidates

This case illustrates that all behavior exhibited by a job candidate might be interpreted as an

indicator of how the person will behave on the job. So the job candidate has to avoid behavior

that is likely to be interpreted as rude or insensitive.


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1. How fair is it for the recruiters described here to reject candidates because they display

poor manners, such as receiving e-mail messages during the job interviews or while

talking to the human resources representative?

The candidates are being fair because people who display poor manners during job

interviews are most likely even ruder on the job. The underlying principle is that job

candidates attempt to be at their best during the recruiting and interviewing process.

Consulting your BlackBerry during an interview reflects high insensitivity, and is most

likely not a random event.

2. What significance is it if the candidate who is waiting reads the National Enquirer

instead of the company annual report?

Reading the National Enquirer is usually a form of recreation because the newspaper

focuses on gossip and scandal. So the sensible candidate would size up the situation, and

at leas fake more interest in reading the annual report than the National Enquirer. Even

reading The Wall Street Journal suggests a little insensitivity. The candidate should be

focused on absorbing information about the company during the time surrounding the

interview.

3. How valid is the management recruiter’s belief that the way a person drives is related to

job performance in aspects of a job that do not involve driving?

We could probably use some research to find a link between driving and job behavior.

However, gross errors in judgment, such as speeding or blaming another drive for an

accident, might bring into question the driver’s maturity and judgment.

4. What lessons do these recruiters have for graduates seeking entry-level technical and

professional jobs?

The lessons here include (a) all behavior displayed during and around a job interview is

subject to interpretation, (b) performing well in a job interview includes displaying good

manners, and (c) any minor miscue might be interpreted negatively so be at your best.

staffing 2

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