Chapter 11Chapter 11

Attracting, Selecting, andDeveloping Employees

StaffingStaffing

• Staffing involves bringing new people into the organization and then moving them through, and perhaps out of, the firm.

• Staffing consists of three stages:– recruiting– selection and hiring– placement

• These staffing activities are coupled with the training and development function to match the abilities of the job candidate with the needs of the firm.

Staffing or Training?Staffing or Training?

• Should a firm hire people who are ready to step into their jobs, or should it “groom” them through training programs?

• With selection and placement, new employees have proven skills and can begin work immediately.

• With training and development, people can be hired at lower rates of pay if they come to the firm untrained, and training and development can be tailored exactly to the company’s needs.

The Staffing/Training Balancing ActThe Staffing/Training Balancing Act(Figure 11-1)(Figure 11-1)

Recruitment,Selection,

andPlacement

Fitting NewEmployee andJob Together

Trainingand

Development

Making SureThat Employees

Grow with Their Jobs

RecruitingRecruiting

• Recruiting is the first of staffing’s three stages.• Recruiting refers to all activities involved in

finding interested and qualified applicants for a job opening.

• The greater the number of applicants and the better their qualifications, the more likely it is that the firm will build a solid personnel base.

The Gillette International Graduate The Gillette International Graduate Trainee ProgramTrainee Program

• The program grooms local talent in the countries where the firm has business operations.

• Training includes an 18-month term at the company’s Boston headquarters, followed by an entry-level position in the home country.

• At headquarters, an executive mentor is responsible for overseeing the trainee’s training and education in Gillette’s operations.

• About half the trainees have moved into executive positions, and many have returned to the U.S. or moved to other countries to pursue international careers.

Global Staffing at Colgate-PalmoliveGlobal Staffing at Colgate-Palmolive

• Almost 70% of Colgate-Palmolive’s $7 billion in sales come from overseas. 60% of its employees operating outside their home countries come from places other than the U.S.

• Two of the last four CEOs were from outside the U.S. • All top executives must speak at least two languages, and important

meetings take place all over the globe.• In 1991 a global team of Colgate human resource leaders and senior-

level managers began a year-long quest to develop global HR policies that would mesh with business goals.

• These efforts culminated in a Global Human Resources conference, with more than 200 HR leaders from more than 35 countries in attendance.

Sources of Applicants (Figure 11-3)Sources of Applicants (Figure 11-3)

Source Benefits and Costs

Walk-ins to thecompany

Company must assign someone to greetwalk-ins and deal with applications

Newspaper andmagazine ads

Bring in many applicants, but don’tscreen out unqualified applicants.

Referrals fromcurrent and pastemployees

Referring employees understand thefirm’s needs and may know goodpeople in the industry.

Privateemploymentagencies

These are in the business of matching jobseekers with suitable jobs. Theycharge a fee.

Publicemploymentagencies

Most cities have an office of the stateemployment agency. It finds jobs for theunemployed and may offer training.

Sources of Applicants (Figure 11-3)Sources of Applicants (Figure 11-3)(Continued)(Continued)

Source Benefits and Costs

Educationalinstitutions

Good sources of applicants. Companies maysend recruiters to campus.

Labor unions Good sources for blue-collar and someprofessional jobs. Some have hiring halls.

Socialserviceagencies

These provide training and assistance for thehomeless, including help with job seeking.

Coops andinternships

In a coop arrangement, the student attendsschool and works full time on an alternatingbasis. In an internship, the student works forthe employer for a specified period of time.

Temporaryhelpagencies

Contingent workers are employed by a firm ona temporary basis. They are used whenwork is of short duration and many give thecompany flexibility.

Internet RecruitingInternet Recruiting

• The Internet is the hottest tool for recruiting.• Search engines such as Yahoo! and Excite as well

as bulletin boards and news groups provide job information.

• Job Banks include America’s Job Bank, the Monster Board, and others.

• Cisco Systems gets 500,000 hits a month on its Internet job pages. It hires 1,200 people every three months, making 66% of its hires from the Net.

America’sJob Bank

The Monster Board

Merits of Internal and External Merits of Internal and External Recruiting SourcesRecruiting Sources

Merits of internal methods• Employees are familiar with

the organization.• Recruiting and training costs

are relatively low.• Enhance employee morale and

motivation since they send a signal that the organization offers opportunities for advancement.

Merits of external methods• Introduce new ideas and

approaches.• Provide knowledge and

skills that are not currently available in the organization.

• Permit new hires to start with clean slates.

• Reduce political infighting for promotions.

The Outsourcing AlternativeThe Outsourcing Alternative

• In the face of increasing demand, evolving needs, or cost considerations firms may use outside parties to perform tasks that would otherwise be performed in house.

• This is a popular, rapidly-growing option.• In 1996, American firms spent over $100 billion in

outsourced business activities.• By outsourcing some activities, firms can concentrate

their resources on their core competencies, the things that they do particularly well.

The Realistic Job Preview (RJP)The Realistic Job Preview (RJP)

• Most companies present a rosy picture of themselves and their job openings in order to attract job applicants.

• As a result, many new employees experience “entry shock” and are dissatisfied when they learn the “truth” about the company.

• The aim of realistic job preview (RJP) is to give the recruit an accurate picture of what the company and the job are like.

• RJPs lead to higher levels of employee satisfaction and lower levels of turnover. They don’t appear to reduce job acceptance rates.

Bottom Line: The Recruiting ProcessBottom Line: The Recruiting Process

Identify aJob Opening

Determine JobRequirementsand EmployeeQualifications

Needed

IdentifyAppropriateRecruiting

Sources andMethods

GenerateApplicant

Pool

ImplementRecruitingStrategy

EvaluateRecruitingProcess

SelectionSelection

• The role of selection is to evaluate each candidate’s qualifications and pick the one whose skills and interests best match requirements of the job and company.

• Some firms use informal selection procedures, such as reviewing application blanks and resumes. Others use formal procedures, such as tests and assessment centers.

• Careful selection procedures can be time consuming and costly. They are worthwhile if:– the costs of a wrong decision are high– there are many applicants and few openings– selection tools are accurate

Focus on Management: Selection at Focus on Management: Selection at ToyotaToyota

• When Toyota Motor Corp. wanted to fill positions at its new Kentucky auto assembly plant, it received 90,000 applications from 120 countries for its 2,700 production jobs and thousands more for the 300 office jobs.

• The company wanted to select workers who would conform to its emphasis on teamwork, loyalty, and versatility.

• In addition to physical exams and drug tests, applicants had to spend as much as 25 hours completing written tests, workplace simulations, and interviews.

• Only 1 of 20 applicants made it to the interview.

Application FormsApplication Forms

• The application form is the first source of information about a potential employee.

• It provides the hiring firm with information about educational background, work experience, and outside interests.

• Much of this information is especially useful for screening purposes.

Problems with Application FormsProblems with Application Forms

• The information provided by the applicant may not be relevant to job performance.

• Job applicants may provide incorrect or misleading information.

• The law places many restrictions on what can and cannot be asked on a job application.

Some Unfair Pre-Employment InquiriesSome Unfair Pre-Employment Inquiries(Excerpted from Figure 11-4)(Excerpted from Figure 11-4)

• Any inquiry that implies a preference for people under 40 years of age

• Whether applicant is a citizen; any inquiry into citizenship than tends to divulge applicant’s lineage, ancestry, national origin, descent, or birthplace

• All inquiries relating to arrests• Request that applicant submit a photograph• Gender• Any inquiry concerning race or color of skin, hair, eyes, etc.• Any inquiry concerning religious denomination, affiliations, holidays

observed, etc.

Lighten Up: Rotten ResumesLighten Up: Rotten Resumes

• I am extremely loyal to my present firm, so please don’t let them know of my immediate availability.

• Note: Please don’t misconstrue my 14 jobs as ‘job hopping.’ I have never quit a job.

• Marital status: Often. Children: Various.• Wholly responsible for two (2) failed institutions.• Terminated after saying, “It would be a blessing to be fired.”• I am writing to you, as I have written to all Fortune 1000 companies every year

for the past three years, to solicit employment.• It’s best for employers that I not work with people.• Excellent memory; strong math aptitude; excellent memory; effective

management skills; and very good at math.

InterviewsInterviews

• In an interview, a representative of the hiring firm asks the candidate a series of questions.

• The goal of the interview is to determine how well the candidate’s skills and interests match the job requirements.

• In a structured interview, all candidates are asked the same list of questions in the same order. This gives each applicant the same chance as others, makes it easier to compare candidates, and makes it less likely the firm will be sued for discrimination in hiring.

• In an unstructured interview, there is a looser exchange between the interviewer and job candidate. This may result in a more complete picture.

Advantages of InterviewsAdvantages of Interviews

• It is easier to ask a series of questions than to develop a test.• Interviewing makes the selection process more personal and gives

the interviewer an overall idea as to whether the applicant is right for the job.

• The interview may be used to give the applicant information about the job and company.

• Interviews may be used to “sell” the company to the applicant.• Interviews may be be used to complete the information about job

candidates.• Good candidates may be unwilling to consider a job seriously

unless they had the change to ask questions and gather information.

Problems with InterviewsProblems with Interviews

• Interviewers:– show many biases– disagree with one another – ignore much of the information available

• The success of an interview in identifying the best candidate for the job depends on the skill and good judgment of the individual interviewer.

• There are severe legal restrictions on what can be asked in interviews.

Guidelines for Improving InterviewsGuidelines for Improving Interviews

• Interviewers should prepare for interviews by making a list of specific topics to be covered and/or specific questions to be asked.

• Interviewers should be trained in preparing questions that relate to job requirements, probing for details, listening carefully, and avoiding discriminatory questions.

• Interviewers should use behavioral and situational questions.• Written records of the interview should be kept.• Whenever possible, multiple interviewers should be used.• Interviews should be used along with other selection tools.

The Bottom Line: The Job Interviewing The Bottom Line: The Job Interviewing ProcessProcess

Determine JobRequirementsand EmployeeQualifications

Needed

DevelopBehavioral and

SituationalInterview

Questions

Develop anInterview

Rating Form

Start EachInterview byPutting theInterviewee

at Ease

ProbeIntervieweeResponses

and Explore

Related Issues

CompleteInterview

Rating FormImmediately

After theInterview

Ask the SameQuestions of

EachInterviewee --Do Not Make

SnapJudgments

TestingTesting

• A test is a systematic and standardized procedure for obtaining information about individuals.

• Testing is a relatively objective way to determine how well a person may do on the job.

• Many human resource experts and human resource managers believe testing is the single best selection tool.

• Tests yield more information about a person than does a completed application form, and they are generally less biased than interviews.

Types of TestsTypes of Tests

• Ability tests measure whether the applicant has certain skills needed to perform the job tasks.

• Personality tests measure the strength or weakness of personality characteristics that are considered important for good performance on the job.

• Interest tests measure a person’s likes or dislikes for various activities.

• Work sample tests measure how well applicants perform selected job tasks.

Types of Tests (Continued)Types of Tests (Continued)

• Integrity tests measure an applicant’s honesty.• Drug and impairment tests measure abuse of alcohol

or other drugs.• Genetic testing applies the science of genetics to the

testing of workers.

Forms of Ability TestsForms of Ability Tests

AbilityTests

Mental AbilityTests

MechanicalAbility Tests

PsychomotorAbility Tests

Integrity TestsIntegrity Tests

• A polygraph (“lie detector”) test is an electronic device used to detect lying. Due to concerns about validity and invasion of privacy, a 1988 federal law outlawed most private uses of pre-employment polygraph tests aimed at assessing employee honesty.

• Written “honesty” or “integrity” tests contain items concerning one’s attitudes toward theft and other forms of dishonesty. These may be less valid than the polygraph tests they replace, and may cause resentment.

• Many firms use credit checks to judge applicant integrity. There are legal restrictions regarding credit checks.

Drug and Impairment TestsDrug and Impairment Tests

• Drug and impairment tests measure abuse of alcohol and other drugs.

• Drug tests may involve examination of body fluids, such as urine and blood, or hair, or of reaction of the pupil to light.

• In response to concerns about violation of rights of privacy and errors in the testing process, many firms instead use impairment testing. This involves use of activities similar to a video game to measure an employee’s ability to work.

• Impairment tests detect impairment due to things such as illness, sleep deprivation, and emotional preoccupation that would be missed by drug tests.

Genetic TestingGenetic Testing

• Genetic testing takes two forms:– genetic monitoring involves periodically testing groups of employees

to see whether they are showing any alarming chromosomal abnormalities that might have been caused by their environment.

– genetic screening is a one-time analysis of DNA taken from blood or other bodily fluids. It is aimed at finding genetic “markers” that indicate that a person may be especially susceptible to harm from a particular substance.

• Genetic monitoring has the approval of most observers since it provides an early warning of dangers from the work environment, but genetic screening is controversial.

Focus on Management: Too Smart forFocus on Management: Too Smart forthe New London Police Departmentthe New London Police Department

• The city of New London, Connecticut refused to grant Robert Jordan a job interview because he scored too high on a pre-employment test.

• The city’s rationale was that employees who are too smart are likely to be bored in patrol jobs and thus to leave the force.

• Jordan sued the department, but a federal judge ruled that the practice of excluding too-bright applicants was constitutional.

Test ValidityTest Validity

• Validity is the degree to which predictions from the selection device are supported by evidence.

• Valid tests are expensive to develop.• Some jobs, such as those of top management, are hard to

describe, and the abilities and interests required may be all but impossible to predict on the basis of test results.

• In general, ability tests and work sample tests are more valid than other selection tools.

GraphologyGraphology

• Graphology, or handwriting analysis, is sometimes used to predict performance.

• The theory behind graphology is that handwriting reflects personality.• Graphology is very popular in western Europe; most French companies

require applicants to submit handwritten letters.• While graphology is difficult to fake, there is no solid evidence that it

predicts job performance.

Test FairnessTest Fairness

• Everyone agrees that a test should be fair, but few agree on a definition of fairness.

• To some people, a test is unfair if it includes questions about things that might be unfamiliar to some people because of their race or ethnic origin.

• To other people, a test is unfair if it measures things that aren’t needed on the job but that block some people from being hired.

• In the eyes of the law, a fair test is one that does not overpredict or underpredict performance of one group of employees relative to another.

Assessment CentersAssessment Centers

• An assessment center is a collection of systematic procedures to approach the selection process systematically.

• The centers employ psychologists and other experts on human behavior as well as providing tests, interviews, group discussions, and other approaches for evaluating job candidates.

• Assessment centers may use role playing and in-baskets.• Assessment centers have additional uses, including early detection of

management talent and skill development for assessors.• While expensive, assessment centers are quite valid and are seen by

employees as offering a fair chance to show abilities.

Selecting for TeamsSelecting for Teams

• As organizations rely more heavily on teams, they must carefully screen team candidates for their ability to work with other team members.

• In putting together a self-directed team, Delta Dental Plan:– spent more than 6 months recruiting and selecting team members.– used a personality test to find members with complementary

personality types.– selected some bilingual team members.– selected members from both inside and outside the company.– assessed candidates’ interpersonal skills with interviews by

members of the HR department and others.

The Bottom Line: The Selection ProcessThe Bottom Line: The Selection Process

Identify SelectionMethods Based onJob Requirements

and DesiredEmployee

Qualifications

Administer SelectionMethods to

Applicant PoolGenerated by the

Recruiting Process

AssessPerson-Job

Fit

AssessPerson-

OrganizationFit

ReduceApplicant Poolto “Short List”

of Top 3-5

Extend Job Offers andNegotiate Termswith Candidate(s)

Evaluate theProcess

PlacementPlacement

• Placement means fitting people and jobs together after the people have become employees of the firm.

• It includes everything from helping new employees feel at home in the firm to promoting them to positions of greater responsibility or demoting them to less demanding position when necessary.

OrientationOrientation

• Orientation involves introducing new employees to their jobs and to the company.

• Orientation:– reduces uncertainties, makes company policies and expectations clear,

and provides a good idea of what the firm, plant, and coworkers are like.

– sends a signal that the new employee has an important role to play in the organization.

– offers a bonding opportunity, ensuring that new hires don’t feel alienated and helping to instill in them a sense of pride and opportunity.

Lateral MoveLateral Move

• A lateral move is sideways rather than up or down.• One type of lateral move, job rotation, may be used to

build worker skills and provide a more solid base for later promotions.

• Employees may welcome the change of pace and duties of job rotation, and may develop a greater sense of pride and self-worth as they learn new skills.

• Lateral moves are sometimes dictated by organizational changes, such as reorganizations.

• W. R. Grace & Company, a chemical and consumer products company, has been using lateral moves for years.

• Purposes include:– assignment to special projects for the company’s future– to fill slots at locations far from their current posts– to newly created jobs in other countries

• The company’s VP for corporate administration reports that, “They get new challenges, and we get broadened managers -- something a global, decentralized company must have.”

Lateral Moves at W. R. Grace Lateral Moves at W. R. Grace

PromotionPromotion

• A promotion is a move up, generally to a new title, more responsibility, and greater financial rewards.

• Promotions are valued by employees, and move competent employees to positions with greater impact on the firm’s success.

• Promotions also demonstrate to other employees that good performance and potential are rewarded, thus serving as a motivating device.

• Promotions must be handled carefully since jobs at different levels may require different skills. If not, the Peter Principle may occur.

• Some firms have instituted fallback positions for employees who are unhappy with their promotions.

DemotionDemotion

• A move down in the organizational hierarchy to a lower title, less responsibility, and lower salary is called a demotion.

• Demotions are stressful to employees and may be resisted by unions.

• Demotions may be necessary. A firm may, for instance, demote rather than fire a poorly-performing employee. Also, especially during economic downturns, employees may prefer demotions to unemployment.

• Some firms have experimented with demoting employees temporarily so they can relate better to their subordinates.

TerminationTermination

• Sometimes firings are necessary because employees have continued to perform poorly or because they have been unmotivated or uncooperative.

• Firings are traumatic for the terminated individual and costly for the firm. For instance, the firm will have to bear the costs of recruiting and training a replacement.

• Employees who are performing below standards should be counseled and given written performance goals and plans for meeting them.

• Those employees should have a probationary period and should receive regular feedback over that period.

Termination (Continued)Termination (Continued)

• Firing should only be used if corrective efforts fail, as a last resort.

• In recent years, many employees have been fired as a result of things having little to do with their motivation or performance, such as technological changes, restructuring, mergers, changes in strategy, and foreign competition.

• In some cases, firms hire outplacement companies to assist those who are affected.

• There are increasing legal restrictions on firing.

Guidelines for Effective TerminationGuidelines for Effective Termination

• Give as much warning as possible for mass layoffs.• Be sure the employee hears of the termination from a

manager, not from a colleague.• Sit down one-on-one in a private office with the

individual to be terminated.• Tell the individual in the first sentence that he or she is

terminated; leave no room for confusion.• Express appreciation for the employee’s past

accomplishments if appropriate.

Guidelines for Effective Termination Guidelines for Effective Termination (Continued)(Continued)

• Complete the firing session within 15 minutes. Make the session brief and to the point, not an opportunity for debate.

• Keep the conversation professional, avoiding personal comments.

• Briefly explain how much severance pay will be provided and for how long; provide written explanations of severance benefits.

• Unless security is an issue, don’t rush the employee off site.

Training and DevelopmentTraining and Development

• Training and development helps the firm meet its immediate human resource needs.

• Over the long run, training and development ensures that the firm’s employees are ready to meet future challenges.

• Training and development takes many forms.• Firms in the U.S. spend an estimated $30 billion

annually to train employees.

Training and DevelopmentTraining and DevelopmentNeeds AssessmentNeeds Assessment

• In general, training and development should follow a systematic needs assessment.

• The needs assessment should consider three sets of factors:– The organization. What is the environment for training in terms

of the organization’s goals, resources, and climate for training?– The task. What is the work to be performed and what are the

conditions under which it will be performed?– The person. What personal capabilities are needed to do the job,

and what are the people like who will do the job?

On-the-Job TrainingOn-the-Job Training

• On-the-job training is conducted while employees perform job-related tasks. Employees are not taken out of the workplace or put in a classroom.

• Employees learn the job by doing it, with coaching and feedback from a supervisor or more experienced employees.

• On-the-job training is the most direct approach to training and development and offers quick returns in terms of improved performance.

• Job rotation, regular coaching by a supervisor, committee assignments to involve individuals in decision-making activities, and staff meetings to broader employee understanding of company activities outside their immediate areas are examples.

Off-the-Job TrainingOff-the-Job Training

• It is often necessary to train employees away from the workplace.

• Such off-the-job training may take place elsewhere within the firm or outside the company.

• There are many popular off-the-job training techniques.

Forms of Off-the-Job TrainingForms of Off-the-Job Training

Off-the-JobTraining

ClassroomTraining

ProgrammedInstruction

ManagementGames

SensitivityTraining

BehaviorModeling

Training in JapanTraining in Japan

• Workers in the U.S. often receive far less training than their Japanese counterparts.

• New production workers in Japan receive 380 hours of training, and new workers in Japanese-owned plants in the U.S. receive 370 hours.

• In contrast, new workers in U.S.-owned plants in North America receive only 47 hours of training, or one-eighth as much.

Corporate UniversitiesCorporate Universities

• Corporate universities are educational organizations established and run by a corporation to educate employees, customers, and suppliers.

• There were an estimated 1,600 corporate universities in 1999, up from 400 in 1998.

• Dow Chemical -- which has training expenditures of more than $90 million annually -- is developing online learning over its company’s intranet.

• In the first nine months, Dow developed 31 classes, and over one-quarter of its employees completed one or more courses.

Motorola University’sGalvin Center

Virtual RealityVirtual Reality

• Virtual reality immerses the trainee in a simulated setting through the use of computer peripherals and stereographic imaging.

• Although virtual reality techniques are expensive, they typically cost much less than training on real equipment.

• Using a specialized display system called a haptic interface, virtual reality can now simulate touch.

SensingVest

SensingChair

Haptic Glove

Virtual Reality Goggles

Web Wise: The Virtual Environment Web Wise: The Virtual Environment Technology Laboratory (VETL)Technology Laboratory (VETL)

• The Virtual Environment Technology Laboratory is a joint enterprise of the University of Houston and NASA/Johnson Space Center.

• It performs research and development focused on virtual environments for training, education, and scientific/engineering data visualization.

• www.vetl.uh.edu/

Training for ToleranceTraining for Tolerance

• In addition to techniques such as sensitivity training which may be used to enhance tolerance toward minority group members, firms are adopting many other approaches.

• At Hoechst Celanese the top 26 officers are each required to join two organizations in which they are a minority.

• IBM’s Systems Storage Division in San Jose, California (a city where 33 languages are spoken) launched an annual diversity day in 1993.

• Firms are providing training to integrate sexual orientation into their ongoing diversity efforts.

• Many firms are “gender training” to promote tolerance between the sexes.

The Bottom Line: The Training ProcessThe Bottom Line: The Training Process

Conduct aTraining Needs

Analysis

DevelopTraining

Objectives

Develop TrainingContent and

Methods That AreBased on Training

Objectives andSensitive toParticipant

Characteristics

Presentthe

Training

Evaluate TrainingProgram

Effectiveness inRelation to

Original TrainingObjectives

Performance AppraisalPerformance Appraisal

Performance appraisal is the process of measuring employee performance against established goals and expectations.

Why Appraise Performance?Why Appraise Performance?

PerformanceAppraisal

As input to Promotion,Salary, and

Termination Decisions

To Give EmployeesDevelopmental

Feedback

To MotivateEmployees to MeetPerformance Goals

To Check on theImpact of New

Policies and Programs

Guidelines for Improving Performance Guidelines for Improving Performance AppraisalsAppraisals

• Ensure that the performance appraisal measure is reliable and valid.

• Provide training for raters.• Involve employees in the process.• Make sure the performance ratings are discussed.• Develop an action plan based on the discussion.• Attempt to link merit increases to performance ratings.• Integrate performance evaluation into the broader process

of day-to-day performance management.

Types of Performance MeasuresTypes of Performance Measures

• With trait approaches, employees are rated on such traits as friendliness, efficiency, and punctuality. The assumption is that these traits are related to performance. Trait approaches suffer from a variety of problems, and should never be used alone.

• With behavioral approaches, such as the critical incidents method and behaviorally anchored rating scales, employees are rated on specific actions.

• With outcome approaches, employees are rated on what they are supposed to accomplish on the job.

Performance Reviews at Northern States Performance Reviews at Northern States PowerPower

• Northern States Power Company is committed to achieving the benefits of workplace diversity.

• Its annual performance reviews now include an assessment of how well an individual creates an environment that cultivates workforce diversity.

• The reviews also measure each person’s active participation in meeting departmental diversity goals.

360360oo Feedback Feedback

• Many firms are now using 360-degree feedback.• With 360-degree feedback, the employee receives

feedback from four sources: the supervisor, subordinates, peers or coworkers, and self-ratings.

The Bottom Line: The Performance The Bottom Line: The Performance Appraisal ProcessAppraisal Process

CommunicatePerformanceExpectations

toEmployees

DocumentObservationsof EmployeePerformance

During theAppraisal

Period

UseDocumented

Observations of EmployeePerformanceto Complete

Ratings

Ask Employeeto Submit a

Self-Evaluation of

His or HerPerformance

Start the PerformanceAppraisal Session byEstablishing Rapport

with the Employeeand by Explaining theProcess to Him/Her

Present theCompleted Rating

Form to theEmployee and

Explain the Basis forthe Ratings

Work with theEmployee to Develop

and Implement anAction Plan for

Improving His or HerJob Performance

Job Analysis, Job Specification, Job Job Analysis, Job Specification, Job Description, and Performance StandardsDescription, and Performance Standards

• Job Analysis is the systematic study of a job to determine its characteristics.

• A job specification is a summary of the qualifications needed in a worker for a specific job.

• A job description is a short summary of the basic tasks making up a job.

• Performance standards define the goals to be achieved by a worker over a specified period of time.

Pay SystemsPay Systems

• Seniority: Pay is linked to years of service. The idea is that seniority reflects loyalty to the company as well as valuable experience.

• Individual performance: Individual employees are paid on the basis of how well they do on the job. With a piece-rate system, total wages are tied directly to output. These have strong motivational effects.

• Group performance: How much each person makes is based on how well the group as a whole does. Such systems encourage cooperation, and may give group members an incentive to push slow workers to do better.

Guidelines for Basing Pay on Individual Guidelines for Basing Pay on Individual or Group Performanceor Group Performance

• Appropriately link pay to performance.• Use pay-for-performance as part of a broader

human resources management system.• Build employee trust and promote the belief that

performance makes a difference.• Use multiple layers of rewards.• Increase employee involvement.• Include nonfinancial incentives.

Pay Systems (Continued)Pay Systems (Continued)

• Plantwide or company productivity: Employee pay rates are based in part on the productivity of the entire plant or organization. One form is the Scanlon Plan, in which groups of employees suggest to management how productivity might be improved and are given bonuses if the suggestions help.

• Organization-based: These include plans such as profit-sharing plans, under which employees get a bonus if company profits are high, and employee stock option plans (ESOPS), which reward employees with company stock. Organization-based plans give companies flexibility to make payments when they can be afforded and may result in positive employee attitudes toward the company, but have little impact on individual performance.

The Wage Determination ProcessThe Wage Determination Process(Figure 11-6)(Figure 11-6)

PerformanceStandards

PerformanceAppraisal

Payments toEmployee

PaySystem

LocalWages

Local WageLevel

WageSurveys

Job Descriptionand Evaluation

JobAnalysis

JobEvaluation

MarketConditions