Human Resource Management Day to Day

Human Resource Management Day to Day

You are visiting family in Halifax, Nova Scotia. You and your cousin have both recently gotten your first job and you are both earning minimum wage. But to your surprise, you realize you are earning $0.65/hour more than your cousin!

You exclaim, “That’s illegal! They are paying him less than minimum wage!”

Your aunt reassures you, “No. The minimum wage is different in Nova Scotia. The laws are different.”

You decide to google “minimum wage in Canada” and learn that the minimum wage is different in every province. In addition, some provinces have a “training wage” for workers who have never held a job before, and other provinces have a special minimum wage for servers that is lower than the regular minimum wage. You wonder why the rules are different in every province.

Human Resource Management Day to Day: The Value of Planning

James stumbled into his position as the human resource (HR) manager. He had been working for Techno, Inc. for three years, and when the company grew, James moved from a management position into a human resource management (HRM) position. Techno, Inc. is a technology and software consulting company for the music industry.

James didn’t have a good handle on how to effectively run a HR department, so for much of the time he tried to figure it out as he went. When Techno started seeing rapid growth, he hired 30 people within a one-month period to meet the demand. Proud of his ability to accomplish his task of meeting the business’s current needs, James was rather pleased with himself. He had spent numerous hours mulling over recruitment strategies, putting together excellent compensation plans, and then eventually sifting through résumés. Now the organization had the right number of people needed to carry out its projects.

Fast forward five months, however, and it turns out that the rapid growth was only temporary. James met with the executives of the business who told him the contracts they had acquired were finished, and there wasn’t enough new work coming in to make payroll next month if they didn’t let some people go. James felt frustrated because he had gone through so much effort to hire people, and now they would be laid off—never mind the costs of hiring and training his department had taken on to make this happen. As James sat with the executives to determine who should be laid off, he felt sad for the people who had given up other jobs just five months before, only to be laid off.

After the meeting, James reflected on this situation and realized that if he had spoken with the executives of the company sooner, they would have shared information on the duration of the contracts. If he had, he likely would have hired people differently, perhaps on a contract basis rather than on a full-time basis. He also considered the fact that the organization could have hired an out-sourcing company to recruit workers for him. As Jason mulled this over, he realized that he needed a strategic plan to make sure his department was meeting the needs of the organization. He vowed to work with the company executives to find out more about the company’s strategic plan and then develop a HRM strategic plan to make sure Techno, Inc. has the right number of workers, with the right skills, at the right time in the future.

Human Resource Management Day to Day: Hiring Multicultural

On a Tuesday afternoon, as you are getting ready to go to lunch, you receive an email from your human resource (HR) manager about the need to hire a new project manager, and there is a $500 bonus for referring a friend who successfully joins the company. Immediately, you email your friend Daniel, because you know he would be great for the job. Daniel is eventually hired for the position. A few months later, a new email goes out asking for friend recommendations for a new position. You and Daniel both recommend someone, and eventually that person gets hired. Over the next year, hiring notices are not advertised externally, as the organization has had good luck with this hiring practice. It seems like a great way to recruit new people, doesn’t it? It can be, but it also can be detrimental to developing a diverse and multicultural workplace.

While not true across the board, people have a tendency to spend time with people who are like themselves in race, income level, and other aspects of diversity such as sexual orientation. In fact, according to the National Institute of Child Health and Human Development and a study published in the American Journal of Sociology, it is much more likely that someone will name a person in their own race as a friend than someone of a different race.James Moody, “Race, School Integration, and Friendship Segregation in America,” American Journal of Sociology 107, no. 3 (2001): 679–719. Likewise, even from a young age, people tend to choose friends who are of the same race. As a result, when you recommend Daniel for a position, it is highly likely that Daniel is similar, from a diversity perspective, to you. Then, when Daniel recommends someone for a job, it is highly likely that he too is recommending someone with similar characteristics as you both. This obviously creates a lack of multicultural diversity in the workplace, which can mean lost profits for companies.

Keeping Up with Growth

Over the last two years, the company where Melinda works as HR manager, Dragon Enterprises, has seen plenty of growth. Much of this growth has created a need for a strategic, specific recruiting processes. In the past, Dragon Enterprises recruited simply on the basis of the applications they received, rather than actively searching for the right person for the job. The first thing Melinda did when arriving at the company was to develop a job analysis questionnaire, which she had all employees fill out an online survey tool. The goal was to create a job analysis for each position that existed at the company. This happened to be the point where the organization started seeing rapid growth, as a result of increased demand for the types of parts the company sells. Luckily, since Melinda followed the industry closely and worked closely with management, part of her strategic outline planned for the hiring of several new positions, so she was mostly ready for it. Keeping in mind the company’s position on a diverse workforce, Melinda set out to write new job descriptions for the job analysis she had performed. She knew the job analysis should be tied to the job description, and both of these should be tied to the job qualifications. Obviously, to recruit for these positions, she needed to develop a recruitment plan. Over the next year, the organization needed to hire three more floor management positions, three office positions, and fifteen factory floor positions. Next, she needed to determine a time line to recruit candidates and a method by which to accept the applications she would receive. After sharing this time line with her colleague, the chief operating officer, she went to work recruiting. She sent an e-mail to all employees asking them to refer a friend and receive a $500 bonus. Next, part of her strategy was to try to find very specialized talent in management to fill those positions. For this, she thought working with a recruiting company might be the best way to go. She also used her Twitter and Facebook accounts to broadcast the job openings. After a three-week period, Melinda had 54 applications for the management positions, 78 for the office positions, and 110 for the factory floor positions. Pleased with the way recruiting had gone, she started reviewing the résumés to continue with the selection process.

Learning Objectives

By the end of this section, you will be able to:

1. Discuss the need for forecasting human resource needs and techniques for forecasting.
2. Explain the steps to an effective recruitment strategy.
3. Develop a job analysis and job description

Recruitment is a process that provides the organization with a pool of qualified job candidates from which to choose.

Recruitment is a process that provides the organization with a pool of qualified job candidates from which to choose. Before companies recruit, they must implement proper staffing plans and forecasting to determine how many people they will need. The basis of the forecast will be the annual budget of the organization and the short- to long-term plans of the organization—for example, the possibility of expansion. In addition to this, the organizational life cycle will be a factor. Organization life cycle is discussed in the chapter, “Developing and Implementing Strategic HRM Plans”. Forecasting is based on both internal and external factors.

Internal factors include the following:

1. Budget constraints
2. Expected or trend of employee separations
3. Production levels
4. Sales increases or decreases
5. Global expansion plans

External factors might include the following:

1. Changes in technology
2. Changes in laws
3. Unemployment rates
4. Shifts in population
5. Shifts in urban, suburban, and rural areas
6. Competition

Underestimating staffing needs either interferes with your production / service levels, or increases your costs through the use of overtime or having to outsource production. Overestimating is also a problem, as it will impact the profitability of your organization and could result in layoffs, which will impact morale. Once the forecasting data are gathered and analyzed, the HR professional can see where gaps exist and then begin to recruit individuals with the right skills, education, and backgrounds. This section will discuss this step in HR planning.

Recruitment Strategy

Although it might seem easy, recruitment of the right talent, at the right place and at the right time, takes skill and practice, but more importantly, it takes strategic planning. In the chapter, “Developing and Implementing Strategic HRM Plans”, development of staffing plans is discussed. An understanding of the labour market and the factors determining the relevant aspects of the labour market is key to being strategic about your recruiting processes.

Based on this information, when a job opening occurs, the HRM professional should be ready to fill that position. Here are the aspects of developing a recruitment strategy:

1. Refer to a staffing plan. This is discussed in the chapter, “Developing and Implementing Strategic HRM Plans”.
2. Confirm the job analysis is correct through questionnaires.
3. Write the job description and job specifications.
4. Have a bidding system to recruit and review internal candidate qualifications for possible promotions.
5. Determine the best recruitment strategies for the position.
6. Implement a recruiting strategy.

The first step in the recruitment process is acknowledgment of a job opening. At this time, the manager and/or the HRM look at the job description for the job opening (assuming it isn’t a new job). We discuss how to write a job analysis and job description in Section 5.1.2 “Job Analysis and Job Descriptions”.

Assuming the job analysis and job description are ready, an organization may decide to look at internal candidates’ qualifications first. Internal candidates are people who are already working for the company. If an internal candidate meets the qualifications, this person might be encouraged to apply for the job, and the job opening may not be published. Many organizations have formal job posting procedures and bidding systems in place for internal candidates. For example, job postings may be sent to a listserv or other avenue so all employees have access to them. However, the advantage of publishing open positions to everyone in and outside the company is to ensure the organization is diverse. Diversity is discussed in the chapter, “Diversity and Multiculturalism”. We discuss more about internal and external candidates and bidding systems in Chapter 5 “Selection”.

Then the best recruiting strategies for the type of position are determined. For example, for a high-level executive position, it may be decided to hire an outside head-hunting firm. For an entry-level position, advertising on social networking websites might be the best strategy. Most organizations will use a variety of methods to obtain the best results. We discuss specific strategies in Section 5.3 “Recruitment Strategies”.

Another consideration is how the recruiting process will be managed under constraining circumstances such as a short deadline or a low number of applications. In addition, establishing a protocol for how applications and résumés will be processed will save time later.

Once these tasks are accomplished, the hope is that you will have a diverse group of people to interview (called the selection process). Before this is done, though, it is important to have information to ensure the right people are recruited. This is where the job analysis and job description come in.

Job Analysis is a formal system developed to determine what tasks people actually perform in their jobs.

Job Analysis and Job Description

The job analysis is a formal system developed to determine what tasks people actually perform in their jobs. The purpose of a job analysis is to ensure creation of the right fit between the job and the employee and to determine how employee performance will be assessed. A major part of the job analysis includes research, which may mean reviewing job responsibilities of current employees, researching job descriptions for similar jobs with competitors, and analyzing any new responsibilities that need to be accomplished by the person with the position. According to research by Hackman and Oldham, [1] a job diagnostic survey should be used to diagnose job characteristics prior to any redesign of a job. This is discussed in Chapter 7 “Retention and Motivation”.

To start writing a job analysis, data need to be gathered and analyzed, keeping in mind Hackman and Oldham’s model. Figure 5.1 “Process for Writing the Job Analysis”shows the process of writing a job analysis. Please note, though, that a job analysis is different from a job design. Job design refers to how a job can be modified or changed to be more effective—for example, changing tasks as new technology becomes available. We discuss job design in Chapter 7 “Retention and Motivation” and Chapter 11 “Employee Assessment”.

Figure 5.1: Process for Writing the Job Analysis

The information gathered from the job analysis is used to develop both the job description and the job specifications. A job description is a list of tasks, duties, and responsibilities of a job. Job specifications, on the other hand, discuss the skills and abilities the person must have to perform the job. The two are tied together, as job descriptions are usually written to include job specifications. A job analysis must be performed first, and then based on that data, we can successfully write the job description and job specifications. Think of the analysis as “everything an employee is required and expected to do.”

Two types of job analyses can be performed: a task-based analysis and a competency- or skills-based analysis. A task-based analysis focuses on the duties of the job, as opposed to a competency-based analysis, which focuses on the specific knowledge and abilities an employee must have to perform the job. An example of a task-based analysis might include information on the following:

1. Write performance evaluations for employees.
2. Prepare reports.
3. Answer incoming phone calls.
4. Assist customers with product questions.
5. Cold-call three customers a day.

With task job analysis, the specific tasks are listed and it is clear. With competency based, it is less clear and more objective. However, competency-based analysis might be more appropriate for specific, high-level positions. For example, a competency-based analysis might include the following:

1. Able to utilize data analysis tools
2. Able to work within teams
3. Adaptable
4. Innovative

A task-based analysis focuses on the duties of the job. A competency-based analysis focuses on the specific knowledge and abilities an employee must have to perform the job.

You can clearly see the difference between the two. The focus of task-based analyses is the job duties required, while the focus of competency-based analyses is on how a person can apply their skills to perform the job. One is not better than the other but is simply used for different purposes and different types of jobs. For example, a task-based analysis might be used for a receptionist, while a competency-based analysis might be used for a vice president of sales position. Consider the legal implications, however, of which job analysis is used. Because a competency-based job analysis is more subjective, it might be more difficult to tell whether someone has met the criteria.

Once you have decided if a competency-based or task-based analysis is more appropriate for the job, you can prepare to write the job analysis. Of course, this isn’t something that should be done alone. Feedback from managers should be taken into consideration to make this task useful in all levels of the organization. Organization is a key component to preparing for your job analysis. For example, will you perform an analysis on all jobs in the organization or just focus on one department? Once you have determined how you will conduct the analysis, a tool to conduct the analysis should be chosen. Most organizations use questionnaires (online or hard copy) to determine the duties of each job title. Some organizations will use face-to-face interviews to perform this task, depending on time constraints and the size of the organization.

A job description is a list of tasks, duties, and responsibilities of a job. Job specifications discuss the skills and abilities the person must have to perform the job.

Figure 5.2: This questionnaire shows how an HR professional might gather data for a job analysis.

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Questionnaires can be completed on paper or online.

A job analysis questionnaire usually includes the following types of questions, obviously depending on the type of industry:

1. Employee information such as job title, how long in position, education level, how many years of experience in the industry
2. Key tasks and responsibilities
3. Decision making and problem solving: this section asks employees to list situations in which problems needed to be solved and the types of decisions made or solutions provided.
4. Level of contact with colleagues, managers, outside vendors, and customers
5. Physical demands of the job, such as the amount of heavy lifting or ability to see, hear, or walk
6. Personal abilities required to do the job—that is, personal characteristics needed to perform well in this position
7. Specific skills required to do the job—for example, the ability to run a particular computer program
8. Certifications to perform the job

Once all employees (or the ones you have identified) have completed the questionnaire, you can organize the data, which is helpful in creating job descriptions. If there is more than one person completing a questionnaire for one job title, the data should be combined to create one job analysis for one job title. There are a number of software packages available to help human resources perform this task; a quick google search using “job analysis software” yields both free and paid software applications.

Once the job analysis has been completed, it is time to write the job description and specifications, using the data you collected. Job descriptions should always include the following components:

1. Job functions (the tasks the employee performs)
2. Knowledge, skills, and abilities (what an employee is expected to know and be able to do, as well as personal attributes)
3. Education and experience required
4. Physical requirements of the job (ability to lift, see, or hear, for example)

Once the job description has been written, obtaining approval from the hiring manager is the next step. Then the HR professional can begin to recruit for the position. Before we discuss specific recruitment strategies, we should address the law and how it relates to hiring. This is the topic of Section 5.2 “The Law and Recruitment”.

[1] J. Richard Hackman and Greg R. Oldham, “Motivation through the Design of Work: Test of a Theory,” Organizational Behavior and Human Performance 16, no. 2 (August 1976): 250–79.

The Interview

Many of us have or will sit in a waiting room with our best clothes on awaiting a job (or school) interview. You can feel your palms sweat and thoughts race as you wait for your name to be called. You look around at the office environment and imagine yourself walking through those doors everyday. People walk by and smile, and overall, you have a really good first impression of the organization. You hope they like you. You tell yourself to remember to smile, while recalling all your experience that makes you the perfect person for this job. A moment of self-doubt may occur, as you wonder about the abilities of the other people being interviewed and hope you have more experience and make a better impression than they do. You hear your name, stand up, and give a firm handshake to the HR manager. The interview has begun.

As she walks you back to a conference room, you think you see encouraging smiles as you pass by people. She asks you to take a chair and then tells you what the interview process will be like. She then asks the first question, “Tell me about yourself.” As you start discussing your experience, you feel yourself relax, just a little bit. After the interview finishes, she asks you to take a quick cognitive test, which you feel good about. She tells you she will be doing reference checks and will let you know by early next week.

To get to this point, the hiring manager may have reviewed hundreds of résumés and developed criteria she would use for selection of the right person for the job. She has probably planned a time line for hiring, developed hiring criteria, determined a compensation package for the job, and enlisted help of other managers to interview candidates. She may have even performed a number of phone interviews before bringing only a few of the best candidates in for interviews. It is likely she has certain qualities in mind that she is hoping you or another candidate will possess. Much work goes into the process of hiring someone, with selection being an important step in that process. A hiring process done correctly is time-consuming and precise. The interviewer should already have questions determined and should be ready to sell the organization to the candidate as well. This chapter will discuss the main components to the selection process.

Criteria Development Considerations

Many HR professionals and managers develop the criteria for hiring, as well as the interview questions, before reviewing any résumés. This allows for a streamlined process with specific guidelines already set before reviewing a résumé. For example, criteria for a project management job might include the following:

1. Two years of experience managing a $2 million or more project budget
2. A bachelor’s degree in business or closely related field
3. Ability to work on multiple projects at once
4. Problem-solving ability
5. Conflict-management ability
6. Ability to manage a team of five to six diverse workers
7. Score of at least a 70 on cognitive ability test
8. Score of excellent from most recent employer

By setting criteria ahead of time, the hiring team has a clear picture of exactly what qualifications they are looking for. As a result, it is easier to determine who should move forward in the selection process. For example, if someone does not have a bachelor’s degree, given this is a criterion, their application materials can be filed away, perhaps for another job opening. Likewise, the HR manager can include those résumés with two or more years of experience and bachelor’s degree in the interview pile and then develop interview questions that show the candidates’ problem-solving, multitasking, and conflict-management abilities.

Résumé parsing or résumé scanning software is readily available and can make the initial screening easier. For example, software allows the HR manager to include keywords such as bachelor’s degree or management. This software scans all received résumés and selects the ones that have the keywords. While it still may be necessary to review résumés, this type of software can save time having to look through résumés that obviously do not meet the minimum qualifications.

Validity and Reliability

Validity refers to how well a tool measures a person’s attributes for a specific job opening, i.e. are you measuring what you think you are measuring. Your criteria should be a valid indicator of future performance. For example, if you decide that a fitness test should be required for a job that requires physical strength, but the test emphasizes cardiovascular endurance, it may not be a valid predictor of whether a candidate could actually do the job.

A tool may include any and all of the following:

1. Résumé-scanning software
2. Reference checks
3. Cognitive ability tests
4. Work samples
5. Credit reports
6. Biographical information blanks
7. Weighted application forms
8. Personality tests
9. Interview questions

For example, if you ask the same interview question of every applicant for the project management position, and the “right” answer always yields similar, positive results, such as the hiring of a successful employee every time, the question would be considered valid. Biographical information blanks (BIBs) are a useful part of the application process. A BIB is a series of questions about a person’s history that may have shaped his or her behavior. The BIB can be scored in the same way as an interview or a résumé, assuming the organization knows which types of answers are predictable for success in a given job. Similarly, a weighted application form involves selecting an employee characteristic to be measured and then identifying which questions on the application predict the desired behavior. Then scores are assigned to each predictor. Of course, the development of the scoring should be determined before any résumés and application forms have been reviewed. In other words, any tool you use to determine someone’s qualifications for a job should have validity to determine they are the right fit for the job. To determine the validity of your selection tools, you would need to gather information over time, to demonstrate that the tool is an accurate predictor of success in the job.

According to the Merriam-Webster dictionary, reliability refers to the extent to which a measuring procedure yields the same results on repeated trials. Reliability refers to the degree in which other selection techniques yield similar data over time. We can test reliability by giving the same test repeatedly, or another test designed to measure the same thing. When we give an exam to students, we hope that the test is a valid indicator of whether the student has learned the concepts taught in the course. If we provided the same or similar exam to a student three times, and their score each time was approximately the same, the test is a reliable indicator of that student’s knowledge. Results do not have to be identical, only similar, in order to determine reliability, as there are factors that will legitimately provides a small amount of variation. For example, a student could be tired or have things on his or her mind which could cause them to get a lower score one time.

Fit Issues

Fit includes not only the right technical expertise, education, and experience but also fit in company culture and team culture. For example, at Facebook headquarters in Palo Alto, California, engineers are selected based on their willingness to take risks, as risk taking is nurtured at Facebook. [2] In addition to this component of their company culture, the company looks for the “hacker” personality, because a hacker is someone who finds ways around the constraints placed upon a system. At Zappos, profiled inthe chapter, “Recruitment”, the company culture is one focused on customer service and the willingness of people to provide the best customer service in all aspects of the business. At Amazon, the huge online retailer, a core value in their company culture is a focus on developing leaders to grow with the organization. If a potential candidate is not interested in long-term career growth, he or she might not be deemed an appropriate strategic fit with the organization. In today’s organizations, most people are required to work within teams. As a result, fit within a team is as important as company culture fit. Microsoft, for example, does an immense amount of teamwork. The company is structured so that there are marketers, accountants, developers, and many others working on one product at a time. As a result, Microsoft looks for not only company culture fit but also fit with other team members.

Reviewing Résumés

Once we have developed our criteria for a specific job, we can begin the review process. Everyone prefers to perform this differently. For example, all the hiring decision makers may review all résumés, list the people they would like to meet in person, and then compare the lists. Another method might be to rate each candidate and interview only those above a certain score. This is discussed in Section 6.4.2 “Selection Methods”. Obviously, much of the process will depend on the organization’s size and the type of job. None of this process can be done fairly without first setting criteria for the job.

When looking at résumés to determine whom to interview, a manager should be concerned with the concepts of disparate impact and disparate treatment. This is discussed in the chapter, “Recruitment”. Disparate impact is unintended discrimination against a protected group as a whole through the use of a particular requirement. Disparate impact may be present in the interviewing process, as well as other employment-related processes such as pay raises and promotions. For example, a requirement of being able to lift 110 pounds might be considered as having disparate impact on women, unless the job requires this ability. Every criteria developed should be closely considered to see if it might have disparate impact on a protected group of individuals. For example, the requirement of a certain credit score might have a negative impact on immigrants, who may not have a well-developed credit rating. However, if being able to manage money is an important requirement of the job, this requirement might not be discriminatory.

Disparate treatment in hiring might include not interviewing a candidate because of one’s perception about the candidate’s age, race, or gender.

The last consideration is the hiring of internal versus external candidates. An internal candidate is someone who already works within the organization, while an external candidate is someone who works outside the organization. A bidding process may occur to notify internal candidates of open positions. Generally speaking, it is best to go through a formal interview process with all candidates, even if they work within the organization. This way, an HR professional can be assured that disparate treatment does not occur because of favoritism. For example, a senior executive of your organization just left, and you believe the manager in that department is qualified to take over the position. Suppose, though, that the manager has been lobbying you for the job for some time and has even taken you out to lunch to talk about the job. While this person has maintained high visibility and lobbied for the promotion, there may be equally qualified internal candidates who did not use the same lobbying techniques. Automatically offering the position to this internal candidate might undermine others who are equally qualified. So while hiring internally can be a motivator, making assumptions about a particular person may not be a motivator to others. This is why it is best, even if you hire internally, to post a formal job announcement listing the job description and job qualifications, so everyone in the organization can have an equal opportunity to apply for the job.

Once you have completed the criteria for the particular job and narrowed down the field, you can begin the interview process. We discuss this in Section 6.3 “Interviewing”.

How Would You Handle This?

Poor Interviewer

As the assistant to the HR manager, one of your jobs is to help managers get ready to interview candidates. When you offer help to Johnathan, he says he has interviewed hundreds of people and doesn’t need your help in planning the interview process. When you sit in the interview with him, he asks inappropriate questions that you don’t feel really assess the abilities of a candidate. How would you handle this?

[1] “What Are KSAs?” US Department of Veterans Affairs, accessed August 2, 2011,http://www.va.gov/jobs/hiring/apply/ksa.asp.

[2] Ellen McGirt, “Most Innovative Companies,” Fast Company, February 2010, accessed July 12, 2011, http://www.fastcompany.com/mic/2010/profile/facebook.

Matching Compensation with Core Values

As you sit down to review the compensation package your company offers, one thing that stands out is that your compensation package no longer matches the core values of your organization. When your organization merged five years ago with a similar firm that specializes in online shoe retailing, your company had to hire hundreds of people to keep up with growth. As a result—and what happens with many companies—the compensation plans are not revised and revisited as they should be. The core values your company adopted from the merging company focused on customer service, freedom to work where employees felt they could be most productive, and continuing education of employees, whether or not the education was related to the organization. The compensation package, providing the basic salary, health benefits, and pension plans, seems a bit old-fashioned for the type of company yours has become.

After reviewing your company’s strategic plan and your human resource management (HRM) strategic plan, you begin to develop a compensation plan that includes salary, health benefits, and pension plans, but you feel it might be smart to better meet the needs of your employees by making some changes to these existing plans. For example, you are considering implementing a team bonus program for high customer service ratings and coverage for alternative forms of medicine, such as acupuncture and massage. Instead of guessing what employees would like to see in their compensation packages, you decide to develop a compensation survey to assess what benefits are most important to your employees. As you begin this task, you know it will be a lot of work, but it’s important to the continued recruitment, retention, and motivation of your current employees. In this chapter, we will discuss:

1. The goals of a compensation plan
2. Developing a compensation package
3. Types of pay systems
4. Other types of compensation

Dissatisfaction Isn’t Always About Pay

As an HR consultant, your job normally involves reviewing HR strategic plans and systems of small to medium size companies, then making recommendations on how to improve. Most of the companies you work with do not have large HR departments, and they find it less expensive to hire you than to hire a full-time person.

Your current client, Pacific Books, is a small online retailer with forty-seven employees. Pacific Books has had some challenges, and as the economy has improved, several employees have quit. They want you to look into this issue and provide a plan to improve retention.

Pacific Books currently has just one person managing payroll and benefits. The individual managers in the organization are the ones who handle other HR aspects, such as recruiting and developing compensation plans. As you speak with the managers and the payroll and benefits manager, it is clear employees are not happy working for this organization. You are concerned that if the company does not improve its employee retention, they will spend an excessive amount of time trying to recruit and train new people, so retention of the current employees is important.

As with most HR issues, rather than just guessing what employees want, you develop a survey to send to all employees, including management. You developed the survey on SurveyMonkey and asked employee satisfaction questions surrounding pay and benefits. However, you know that there are many other things that can cause someone to be unhappy at work, so to take this survey a step further, you decide to ask questions about the type of work employees are doing, management style, and work-life balance. Then you send out a link to all employees, giving them one week to take the survey.

When the results come in, they are astounding. Out of the forty-seven employees, forty-three selected “dissatisfied” on at least four or more areas of the five-question survey. While some employees are not happy with pay and benefits, the results say that other areas of the organization are actually what are causing the dissatisfaction. Employees are feeling micromanaged and do not have freedom over their time. There are also questions of favoritism by some managers for some employees, who always seem to get the “best” projects. When you sit down with the CEO to discuss the survey results, at first she defends the organization by saying the company offers the highest salaries and best benefits in the industry, and she doesn’t understand how someone can be dissatisfied. You explain to her that employee retention and motivation is partly about pay and benefits, but it includes other aspects of the employee’s job, too. She listens intently and then asks you to develop a retention and motivation plan that can improve the organization.

As we have addressed so far in this chapter, retention and reduction of turnover is paramount to a healthy organization. Performing research, such as calculating turnover rates, doing exit interviews, and surveying employees’ satisfaction, are the first steps. Once this is done, understanding motivational theories and the application of them in the retention plan can help reduce turnover. Next, we can apply specific retention strategies to include in our plans, while keeping our budget in mind. Some of the retention strategies discussed have already or will be discussed in their own chapters, but they are certainly worth a mention here as part of the overall plan.

Salaries and Benefits

As we know from previous chapters, a comprehensive compensation plan that includes not only pay but things such as health benefits and paid time off (PTO) is the first retention strategy that should be addressed. The compensation plan should not only help in recruitment of the right people but also help retain employees. Utilizing a pay banding system, in which the levels of compensation for jobs are clearly defined, is one way to ensure fairness exists within internal pay structures.

As we know from this chapter, compensation is not everything. An employee can be well paid and have great benefits but still not be satisfied with the organization. Some of the considerations surrounding pay as a way to retain employees include the following:

1. Instituting a standard process. Many organizations do not have set pay plans, which can result in unfairness when onboarding (the process of bringing someone “on board” with the company, including discussion and negotiation of compensation) or offering pay increases. Make sure the process for receiving pay raises is fair and defensible, so as not to appear to be discriminatory. This can be addressed in both your compensation planning process as well as your retention plan.
2. A pay communication strategy. Employees deserve to know how their pay rates are being determined. Transparency in the process of how raises are given and then communicating the process can help in your retention planning process. [1]
3. Paid time off. Is your organization offering competitive PTO? Consider implementing a PTO system that is based on the amount of hours an employee works. For example, rather than developing a policy based on hours worked for the company, consider revising the policy so that for every X number of hours worked, PTO is earned. This can create fairness for the salaried employee, especially for those employees who may work more than the required forty hours.

Training and Development

To meet our higher level needs, humans need to experience self-growth. HR professionals and managers can help this process by offering training programs within the organization and paying for employees to attend career skill seminars and programs. In addition, many companies offer tuition reimbursement programs to help the employee earn a degree. Dick’s Drive-In, a local fast food restaurant in Seattle, Washington, offers $18,000 in scholarships over four years to employees working twenty hours per week. There is a six-month waiting period, and the employee must continue to work twenty hours per week. In a high turnover industry, Dick’s Drive-In boasts one of the highest retention rates around.

How Would You Handle This?

You work for a small organization in the HR department. One of your web developers schedules a meeting with you, and during the meeting she says that she doesn’t see any career growth for her in the organization. As a result, she confides that she is planning to leave the organization as soon as she can find another job. She is one of the best developers you have and you would hate to lose her.

Performance Appraisals

Chapter 11 “Employee Assessment” addresses performance appraisals. The performance appraisal is a formalized process to assess how well an employee does his or her job. The effectiveness of this process can contribute to employee retention, in that employees can gain constructive feedback on their job performance, and it can be an opportunity for the manager to work with the employee to set goals within the organization. This process can help ensure the employee’s upper level self-actualization needs are met, but it also can address some of the motivational factors discussed by Herzberg, such as achievement, recognition, and responsibility.

Succession Planning

Succession planning is a process of identifying and developing internal people who have the potential for filling positions. As we know, many people leave organizations because they do not see career growth or potential. One way we can combat this in our retention plan is to make sure we have a clear succession planning process that is communicated to employees. Succession planning is sometimes called the talent bench, because successful companies always have talented people “on the bench” or ready to do the job should a key position become vacant. The goals of most succession plans include the following: [2]

• Identify high-potential employees capable of advancing to positions of higher responsibility.
• Ensure the development of these individuals to help them be “ready” to earn a promotion into a new position.
• Ensure diversity in the talent bench by creating a formal succession planning process.
• Succession planning must be just that: planned. This allows clear communication to the employees on how they can further develop within the organization, and it helps them see what skills they should master before that time comes.

Flextime, Telecommuting, and Sabbaticals

According to a Salary.com survey, the ability to work from home and flexible work schedules are benefits that would entice an employee to stay in their job. [3] The ability to implement this type of retention strategy might be difficult, depending on the type of business. For example, a retailer may not be able to implement this, since the sales associate must be in the store to assist customers. However, for many professions, it is a viable option, worth including in the retention plan and part of work-life balance, which we will discuss in Section 8.3.10 “Work-Life Balance”.

Some companies, such as Recreational Equipment Incorporated, based in Seattle, offer twelve weeks of unpaid leave per year (beyond the twelve weeks required under the Family and Medical Leave Act) for the employee to pursue volunteering or traveling opportunities. In addition, with fifteen years of service with the company, paid sabbaticals are offered, which include four weeks plus already earned vacation time.

Management Training

As we discuss in  Section 8.1.1 “Reasons for Voluntary Turnover”, a manager can affect an employee’s willingness to stay on the job. In a recent Gallup poll of one million workers, a poor supervisor or manager is the number one reason why people leave their jobs. [4] Managers who bully, use the theory X approach, communicate poorly, or are incompetent may find it difficult to motivate employees to stay within the organization. While in HR we cannot control a manager’s behavior, we can provide training to create better management. Training of managers to be better communicators and motivators is a way to handle this retention issue. We will discuss training further in Chapter 8 “Training and Development”.

Conflict Management and Fairness

Perceptions on fairness and how organizations handle conflict can be a contributing factor to retention. Outcome fairness refers to the judgment that people make with respect to the outcomes they receive versus the outcomes received by others with whom they associate with. When people are deciding if something is fair, they will likely look at procedural justice, or the process used to determine the outcomes received. There are six main areas employees will use to determine the outcome fairness of a conflict:

• Consistency. The employee will determine if the procedures are applied consistently to other persons and throughout periods of time.
• Bias suppression. The employee perceives the person making the decision does not have bias or vested interest in the outcome.
• Information accuracy. The decision made is based on correct information.
• Correctability. The decision is able to be appealed and mistakes in the decision process can be corrected.
• Representativeness. The employee feels the concerns of all stakeholders involved have been taken into account.
• Ethicality. The decision is in line with moral societal standards.

For example, let’s suppose JoAnn just received a bonus and recognition at the company party for her contributions to an important company project. Another employee, Sam, might compare his inputs and outputs and determine it was unfair that JoAnn was recognized because he had worked on bigger projects and not received the same recognition or bonus. When we look at how our retention strategies are developed, we want to be sure they can apply to everyone in the organization; otherwise it may cause retention problems. Some of the procedures questioned could include the following:

• How time off is requested
• How assignments of the “best” projects are given
• Division of work
• Promotion processes
• Pay processes

While some of these policies may seem minor, they can make a big difference in retention. Besides development of fair policies, we should be sure that the policies are clearly communicated and any processes are communicated as well. These types of policies should be revisited yearly and addressed in the retention plan if it appears they are causing employee dissatisfaction.

In addition to a sense of fairness within the organization, there should be a specific way (process) of managing conflict. If the organization is unionized, it is likely a grievance process is already in place to handle many types of conflicts. We will discuss this process in greater detail in “Working with Labour Unions”.

There are four basic steps to handle conflict. First, the individuals in conflict should try to handle the conflict by discussing the problem with one another. If this doesn’t work, a panel of representatives from the organization should hear both sides of the dispute and make a recommendation. If this doesn’t work, the organization may want to consider mediation and, in extreme cases, arbitration. In mediation, a neutral third party from outside the organization hears both sides of a dispute and tries to get the parties to come to a resolution, while in arbitration, an outside person hears both sides and makes a specific decision about how things should proceed.

Job Design, Job Enlargement, and Empowerment

As we have discussed previously, one of the reasons for job dissatisfaction is the job itself. Ensuring we are appropriately matching skills with the job when we do our initial hiring is important. Revisiting the recruitment plan and selection process should be a consideration.

Job enrichment means to enhance a job by adding more meaningful tasks to make the employee’s work more rewarding. For example, if a retail salesperson is good at creating eye-catching displays, allow him or her to practice this skill and assign tasks revolving around this. Job enrichment can fulfill the higher level of human needs while creating job satisfaction at the same time. In fact, research in this area by Richard Hackman and Greg Oldham [8] found that employees need the following to achieve job satisfaction:

• Skill variety, or many different activities as part of the job
• Task identity, or being able to complete one task from beginning to end
• Task significance, or the degree to which the job has impact on others, internally or externally
• Autonomy, or freedom to make decisions within the job
• Feedback, or clear information about performance

In addition, job enlargement, defined as the adding of new challenges or responsibilities to a current job, can create job satisfaction. Assigning employees to a special project or task is an example of job enlargement. Be cautioned, though, that some employees may resent additional work, and job enlargement could actually be a demotivator. Otherwise, knowing the employee and his or her goals and adding work that can be an end to these goals is the best way to achieve retention through job enlargement.

Employee empowerment involves employees in their work by allowing them to make decisions and act upon those decisions, with the support of the organization. Employees who are not micromanaged and who have the power to determine the sequence of their own work day, for example, tend to be more satisfied than those who are not empowered. Empowerment can include the following:

• Encourage innovation or new ways of doing things.
• Make sure employees have the information they need to do their jobs; for example, they are not dependent on managers for information in decision making.
• Use management styles that allow for participation, feedback, and ideas from employees.

Pay-for-Performance Strategies

In the Chapter “Compensation and Benefits”, we discussed several pay-for-performance strategies we can implement to motivate our employees. A pay-for-performance strategy means that employees are rewarded for meeting preset objectives within the organization. For example, in a merit-based pay system, the employee is rewarded for meeting or exceeding performance during a given time period. Rather than a set pay increase every year, the increase is based on performance. Some organizations offer bonuses to employees for meeting objectives, while some organizations offer team incentive pay if a team achieves a specific, predetermined outcome. For example, each player on the winning team of the 2010 NFL Super Bowl earned a team bonus of $83,000, [9] while the losing team of the Super Bowl took home $42,000. Players also earn money for each wild card game and payoff game. Some organizations also offer profit sharing, which is tied to a company’s overall performance. Gain sharing, different from profit sharing, focuses on improvement of productivity within the organization. For example, the city of Loveland in Colorado implemented a gain-sharing program that defined three criteria that needed to be met for employees to be given extra compensation. The city revenues had to exceed expenses, expenses had to be equal to or less than the previous year’s expenses, and a citizen satisfaction survey had to meet minimum requirements.

To make sure a pay-for-performance system works, the organization needs to ensure the following:

• Standards are specific and measureable.
• The system is applied fairly to all employees.
• The system is communicated clearly to employees.
• The best work from everyone in the organization is encouraged.
• Rewards are given to performers versus nonperformers.
• The system is updated as the business climate changes.
• There are substantial rewards for high performers.

As we have already addressed, pay isn’t everything, but it certainly can be an important part of the employee retention plan and strategy.

Work-Life Balance

Work-life balance discussions originated during the 1960s and 1970s and pertained mostly to working mothers’ meeting the demands of family and work. During the 1980s, the realization that meeting a work-life balance is important (for all, not just working mothers) resulted in companies such as IBM implementing flextime and home-based work solutions. The growing awareness of the work-life balance problem continued into the 1990s, when policies were developed and implemented but not acted upon by managers and employees, according to Jim Bird in Employment Relations Today. [10] Today, work-life balance is considered an important topic, so much so that the World at Work Society offers special certifications in this area. The World at Work certification programs focus on creation of successful programs to attract, retain, and motivate employees.

Karol Rose, author of WORK LIFE EFFECTIVENESS [11] says that most companies look at a systems approach of work-life balance, instead of a systems and individual approach. The systems approach to work-life balance includes policies and procedures that allow people flexibility, such as telecommuting and flextime options.

According to Rose, looking at the individual differences is equally as important as the systems approach. Brad Harrington, the director of Boston College’s Center for Work and Family, stresses this issue: “Work-life balance comes down, not to an organizational strategy, but to an individual strategy.” For example, a single parent has a different work-life balance need than someone without children. In other words, as HR professionals, we can create work-life balance systems, but we should also look at individual approaches. For example, at Recreational Equipment Incorporated (REI),[12] they use the systems approach perspective and offer paid time off and sabbaticals, but their employee assistance program also offers access to services, referrals, and free consulting for the individual to find his or her perfect work-life balance. For this, REI receives a number nine ranking on FORTUNE’s list of best companies to work for in the area of work-life balance.

The company culture can contribute greatly to work-life balance. Some organizations have a culture of flexibility that fares well for workers who do not want to feel tethered to an office, while some workers prefer to be in the office where more informal socializing can occur. While some companies promote work-life balance on paper, upper management needs to let employees know it is OK to take advantage of the alternatives to create a positive work-life balance. For example, companies place different levels of value on work-life options such as telecommuting. An organization may have a telecommuting option, but the employees must feel it is OK to use these options. Even in a company that has work-life balance systems, a manager who sends e-mails at 10 p.m. on Saturday night could be sending the wrong message to employees about the expectations, creating an environment in which work-life balance is not practiced in reality. O’Neill, a surf gear company in California, sends a strong message to its employees by offering half-day Fridays during the summer, [13] so employees can get a head start on the weekend.

Jim Bird, in his work-life balance article in Employment Relations Today, suggests implementing a work-life balance training program that is dual purpose (can serve both personal interests and professional development). In other words, implement trainings in which the employee can develop both personal skills and interests that can translate into higher productivity at work.

Besides the training program, Bird suggests creating a monthly work-life newsletter as an educational tool to show the company’s commitment to work-life balance. The newsletter can include interviews from respected employees and tips on how to create a work-life balance.

Finally, training managers on the importance of work-life balance and how to create a culture that embraces this is a key way to use work-life balance as a retention strategy.

Other Retention Strategies

According to FORTUNE’s “100 Best Companies to Work For,” [14] retention strategies that are more unusual might be part of your retention plan. Some strategies from the list might include the following:

• On-site daycare or daycare assistance
• Gym memberships or on-site gyms
• Concierge service to assist in party planning or dog grooming, for example
• On-site dry cleaning drop-off and pickup
• Car care, such as oil changes, on-site once a week
• On-site doggie daycare
• On-site yoga or other fitness classes
• “Summer Fridays,” when all employees work half days on Fridays during the summer
• Various support groups for cancer survivors, weight loss, or support in caring for aging parents
• Allowance for fertility treatment benefits
• On-site life coaches
• Peer-to-peer employee recognition programs
• Management recognition programs

While some of these options may not work in your organization, we must remember to be creative when our goal is to retain our best employees and reduce turnover in our organizations. The bottom line is to create a plan and make sure the plan is communicated to all employees.

[1] “The Knowledge of Pay Study,” WorldatWork and The LeBlanc Group LLC, 2010, accessed February 26, 2011, http://www.worldatwork.org/waw/Content/research/html/research-home.jsp.

[2] William J. Rothwell and H. C. Kazanas, Building In-House Leadership and Management Development Programs: Their Creation, Management, and Continuous Improvement(Westport, CT: Quorum Books, 1999), 131.

[3] “Employee Job Satisfaction and Retention Survey, 2007/2008,” Salary.com, 2008, accessed February 26, 2011, http://www.salary.com/docs/resources/JobSatSurvey_08.pdf.

[4] “No. 1 Reason People Quit Their jobs,” AOL News, Netscape, n.d., accessed July 28, 2011,http://webcenters.netscape.compuserve.com/whatsnew/package.jsp?name=fte/quitjobs/quitjobs&floc=wn-dx.

[5] “Our Philosophy,” Google, n.d., accessed July 28, 2011,http://www.google.com/about/corporate/company/tenthings.html.

[6] Ben Popper, “Why Google’s Retention Plan Backfired,” CBS Business Network, September 16, 2010, accessed July 28, 2011, http://www.bnet.com/blog/high-tech/why-googles-retention-plan-backfired/1172.

[7] “100 Best Companies to Work For,” CNN Money, 2011, accessed July 28, 2011,http://money.cnn.com/magazines/fortune/bestcompanies/2011/snapshots/4.html.

[8] Robert N. Ford, Motivation through the Work Itself (New York: American Management Association, 1969); William J. Paul, Keith B. Robertson, and Frederick Herzberg, “Job Enrichment Pays Off,” Harvard Business Review, March–April 1969, 61–78.

[9] Darren Rovell, “How Much Do Players Get Paid for Winning the Super Bowl?” CNBC Sports, January 18, 2011, accessed July 29, 2011,http://www.cnbc.com/id/41138354/How_Much_Do_Players_Get_Paid_For_Winning_the_Super_Bowl.

[10] Jim Bird, “Work-Life Balance: Doing It Right and Avoiding the Pitfalls,” Employment Relations Today 33, no. 3 (2006), reprinted on WorkLifeBalance.com, accessed July 29, 2011,http://www.worklifebalance.com/assets/pdfs/article3.pdf.

[11] Karol Rose, Work-life Effectiveness: Bottom-line Strategies for Today’s Workplace(Scottsdale, AZ: World at Work Press, 2006).

[12] “Pay and Benefits: Total Rewards at REI,” Recreational Equipment Incorporated, n.d., accessed July 29, 2011, http://www.rei.com/jobs/pay.html.

[13] “Vans, Quiksilver, and California Top Skate Companies Offer Dream Careers to FIDM’s Graphic Design School Grads,” Fashion News, June 4, 2011, accessed July 29, 2011,http://www.fashionnews.com/2011/06/04/vans-quiksilver-californias-top-skate-companies-offer-dream-careers-to-fidms-graphic -design-school-grads.

[14] “100 Best Companies to Work For,” CNN Money, 2011, accessed February 26, 2011,http://money.cnn.com/galleries/2011/news/companies/1101/gallery.bestcompanies_unusual_perks.fortune/5.html.

The Biggest Challenge

Casey is seated at his desk reviewing his human resource strategic plan when Lily walks in, obviously upset. Her facial expressions show she is upset, and after she enters, she crosses her arms while standing in front of Casey’s desk. Casey thinks Lily is a very hard worker and does an excellent job managing people as the manager of her marketing department. Lately, she has been having trouble with some of her employees.

“Casey,” she says, “I really need to vent. Can I sit down and talk with you?” Casey offers Lily a seat and she sits down. She tells Casey that Sam, a marketing manager, made snide and underhanded comments during a meeting this morning. “For example, when I asked the status on one of our projects, Sam said snidely, ‘Why don’t you ask one of your marketing assistants? They are doing such a great job, after all.’ I suspect he is upset with something I wrote on my blog last week. As you know, I started the blog to continually let employees know of changes in the department and to provide feedback. In last week’s blog, I wrote about what a great job the marketing assistants are doing in my department.”

Lily goes on, “So I pulled him aside after the meeting and asked him about his comment. He said that he was upset that I had given feedback to the marketing assistants because he feels that as their manager, it is his job to do that. He felt I had stepped on his toes and the toes of other marketing managers.”

Casey thinks about the situation and asks Lily if she apologized. Lily responds, “I didn’t feel like I needed to. I do think the marketing assistants are doing a good job, and I don’t need to apologize for mentioning that. I am just trying to raise morale among them. You know, two marketing assistants have quit in the last three months.”

Casey leans back in his chair and gives some thought as to how to advise Lily. He suggests that Lily speak with Sam directly (not via e-mail) and tell him that her intention was only positive and not meant to be harmful, and see what happens. Lily thinks about that and says she will try to see Sam later today. When she leaves, Casey sits back and thinks about how communication is one of the biggest challenges in any job, but especially in human resources.

A Dilemma

You have been the store manager for a large coffee shop for three years but have never had this type of problem employee to handle before, and you schedule a meeting to speak with your HR manager about it. Jake, one of your best employees, has recently begun to have some problems. He is showing up to work late at least twice per week, and he missed the mandatory employee meeting on Saturday morning. When you ask him about it, he says that he is having some personal problems and will try to get better.

For a bit of time, Jake does get better, comes to work on time, and is his normal, pleasant self when helping customers. However, the situation gets more serious two weeks later when Jake comes to work wearing the same clothes he wore to work the day before. You pull Jake aside and ask him what is happening. He says his wife kicked him out of the house last night and he stayed with a friend, but he didn’t have time to gather any of his belongings when he left his house. You accept his answer and hope that things will get better.

A week later, when Jake arrives for his 10–7 shift, he is obviously drunk. He is talking and laughing loudly, smells of alcohol, and has a hard time standing up. You pull him aside and decide to have a serious talk with him. You confront him about his drinking and he says he is just tired from everything happening with his wife. You point out the smell and the inability to stand up, and Jake starts crying and says he is going through a divorce. He begs for you to give him another chance. You tell him you will think about it, but in the meantime, you send him home.

The meeting with HR is this afternoon and you feel nervous. You want to do what is right for Jake, but you also know this kind of disruptive behavior can’t continue. You like Jake as a person and he is normally a good employee, so you don’t want to fire him. When you meet with the HR manager, he discusses your options. The options, he says, are based on a discipline process developed by HR, and the process helps to ensure that the firing of an employee is both legal and fair. As you review the process, you realize that ignoring the behavior early on has an effect on what you can do now. Since you didn’t talk to Jake about his attendance or discuss supports available to help him through his personal problems, more work needs to be done before you can consider a disciplinary process. You hope that Jake can improve so it doesn’t come down to that.

A Tough Conversation

As you wake up this morning, you think about the performance evaluation you will give one of your employees, Sean, later this morning. Sean has been with your company for two years, and over the last six months his performance has begun to slide. As the manager, it is your responsibility to talk with him about performance, which you have done on several occasions. However, the performance evaluation will make his nonperformance more formalized. You know that Sean has had some personal troubles that can account for some of the performance issues, but despite this, you really need to get his performance up to par. Your goal in the performance evaluation interview today is to create an improvement plan for Sean, while documenting his nonperformance.

When you arrive at work, you look over the essay rating part of Sean’s evaluation. It details two client project deadlines that were missed, as well as the over-budget amounts of the two client projects. It was Sean’s responsibility to oversee both aspects of this project. When Sean arrives at your office, you greet him, ask him to take a seat, and begin to discuss the evaluation with him.

“Sean, while you have always been a high performer, these last few months have been lackluster. On two of your projects, you were over budget and late. The client commented on both of these aspects when it filled out the client evaluation. As a result, you can see this is documented in your performance evaluation.”

Using defensive nonverbal language, Sean says, “Missing the project deadlines and budget wasn’t my fault. Emily said everything was under control, and I trusted her. She is the one who should have a bad performance review.”

You say, “Ultimately, as the account director, you are responsible, as outlined in your job description. As you know, it is important to manage the accountability within your team, and in this case, you didn’t perform. In fact, in your 360 reviews, several of your colleagues suggested you were not putting in enough time on the projects and seemed distracted.”

“I really dislike those 360 reviews. It really is just a popularity contest, anyway,” Sean says. “So, am I fired for these two mistakes?” You have worked with people who exhibited this type of defensive behavior before, and you know it is natural for people to feel like they need to defend themselves when having this type of conversation. You decide to move the conversation ahead and focus on future behavior rather than past behavior.

You say, “Sean, you normally add a lot of value to the organization. Although these issues will be documented in your performance evaluation, I believe you can produce high-quality work. As a result, let’s work together to develop an improvement plan so you can continue to add value to the organization. The improvement plan addresses project deadlines and budgets, and I think you will find it helpful for your career development.”

Sean agrees begrudgingly and you begin to show him the improvement plan document the company uses, so you can fill it out together.

When you head home after work, you think about the day’s events and about Sean. As you had suspected, he was defensive at first but seemed enthusiastic to work on the improvement plan after you showed him the document. You feel positive that this performance evaluation was a step in the right direction to ensure Sean continues to be a high producer in the company, despite these mistakes.

Designing a Performance Appraisal System

Unhappy Employees Could Equal Unionization

As the HR manager for a two-hundred-person company, you tend to have a pretty good sense of employee morale. Recently, you are concerned because it seems that morale is low, because of pay and the increasing health benefit costs to employees. You discuss these concerns with upper-level management, but owing to financial pressures, the company is not able to give pay raises this year.

One afternoon, the manager of the marketing department comes to you with this concern, but also with some news. She tells you that she has heard talk of employees unionizing if they do not receive pay raises within the next few months. She expresses that the employees are very unhappy and productivity is suffering as a result. She says that employees have already started the unionization process by contacting the BC Labour Relations Board and are in the process of proving worker support for unionization. As you mull over this news, you are concerned because the organization has always had a family atmosphere, and a union might change this. You are also concerned about the financial pressures to the organization should the employees unionize and negotiate higher pay. You know that all managers are legally bound by rules relating to unionization, and you need a refresher on what these rules are. You decide to call a meeting first with the CEO and then with managers to discuss strategy and inform them of the legal implications of this process.

Training for Safety

As the HR manager of a large construction company, your workers’ health and safety is of paramount concern. Last week, you calculated an incidence rate of 7.5 accidents per 100 employees. When you compared these numbers to last year, you found the number had significantly increased, as it was 4.2 the year prior. This is concerning, because you know an unsafe workplace is not only bad for employees and bad for business, but it could result in fines from WorkSafe BC. You ask your operations managers to meet with you about the situation. When you bring this to his attention, he doesn’t seem at all concerned about the almost double increase in accidents over the last year. He says the increase in accidents is a result of scaffolding falling during a building project where several workers were hurt. He says this one accident skewed the numbers. He mentions that the supervisor responsible for the scaffolding had been let go six months ago for other reasons, and he assures you that there is no reason to be concerned. A few weeks after this conversation, two of your workers spend time in the hospital because of a falling scaffolding injury. Again, you approach the operations manager and he assures you that those employees were just new and he will implement proper procedures. You know the incident will result in another high incident percentage, even if there isn’t another accident the rest of the year. You look back over ten years of accident reports and find there are three areas for which your company seems to have 90 percent of all accidents. You decide you will develop a training program to address these safety issues in your workplace. You refer to your HRM textbook for tips on how to prepare and communicate this training to your employees. When you present this option to your operations manager, he says that employees don’t have the time to take from their jobs to go through this training and suggests you just let it go. You are prepared for this response, and you give him the dollar figure of money lost owing to worker injury in your organization. This gets his attention, especially when you compare it to the small cost of doing a two-hour training for all employees. Both of you check your schedules to find the best day of the week to schedule the training, for minimum impact on employees’ work.