Chapter 3: Human Chapter 3: Human Resource Planning, Resource Planning, Recruitment, and Recruitment, and SelectionSelectionCreating Effective Creating Effective OrganizationsOrganizations

Development of Development of Human Resource Human Resource ManagementManagementParallels the protection and treatment Parallels the protection and treatment

of workersof workers

1.1. Social Welfare Department Social Welfare Department 1880 – 19351880 – 1935

a.a. Helping injured workers and their Helping injured workers and their familiesfamilies

b.b. Company unions: parties and Company unions: parties and social eventssocial events

c.c. Worker healthWorker health

2.2. Labor Relations Department Labor Relations Department 1935 – 19501935 – 1950

a.a. Collective bargainingCollective bargainingb.b. Contract administrationContract administration

3.3. Industrial Relations Department Industrial Relations Department 1950 – 19701950 – 1970

a.a. Labor relationsLabor relationsb.b. Benefits and vacationsBenefits and vacationsc.c. Testing and selectionTesting and selectiond.d. Compensation systemsCompensation systems

4.4. Personnel Department Personnel Department 1970 – 19901970 – 1990

a.a. Legal complianceLegal complianceb.b. StaffingStaffingc.c. Performance evaluationPerformance evaluationd.d. Compensation and benefitsCompensation and benefitse.e. Employee relationsEmployee relationsf.f. Safety and healthSafety and health

5.5. Human Resource ManagementHuman Resource Management

Staffing ModelStaffing Model

Strategic Strategic PlanningPlanning

EnvironmentaEnvironmental Scanningl Scanning

Operational Operational PlanningPlanning ForecastingForecasting

Projected Projected Staffing Staffing

RequirementsRequirements

Goals and Goals and ObjectivesObjectives

Recruitment Recruitment PlanningPlanning

Applicant SearchApplicant Search

Preliminary Preliminary ScreeningScreeningSelection Selection DecisionDecision

PlacementPlacement

StrategiStrategic c

BusinesBusiness s

PlanninPlanningg

Human Human ResourcResourc

e e PlanninPlannin

ggLong-Long-range range

planningplanning

SelectioSelectionn

RecruitmeRecruitmentnt

Middle-Middle-range range

planningplanningShort-Short-range range

planningplanning

Human Human ResourcResource e PlanningPlanning

Typical Steps in the Typical Steps in the Selection ProcessSelection Process

Reference checksReference checks

Employment Employment testingtesting

Drug testingDrug testing

Final interviewFinal interview

Selection decisionSelection decision

Placement on the jobPlacement on the job

Reject applicantReject applicantPreliminary screeningPreliminary screening

Application Application blanksblanks

InterviewsInterviews

Forecasting Forecasting Employment NeedsEmployment Needs

1.1. BudgetingBudgeting

2.2. Work-load AnalysisWork-load Analysis

3.3. Unit DemandUnit Demand

4.4. Expert OpinionExpert Opinion

5.5. Trend PredictionsTrend Predictions

Example of Predicting Labor Supply and Example of Predicting Labor Supply and Required New Hires for a Hotel ChainRequired New Hires for a Hotel Chain

Supply AnalysisSupply Analysis Supply Demand Supply Demand ComparisonComparison

Key PositionsKey Positions

AA

% Quit % Quit (rounded) (rounded)

(1996-(1996-1998)1998)

BB

Number of Number of Present Present

EmployeesEmployees

CC

Projected Projected Turnover Turnover by 2000by 2000

DD

Employees Employees Left by Left by 20002000

EE

Projected Projected Labor Labor

Demand in Demand in 20002000

FF

Projected Projected New Hires New Hires

in 2000in 2000

General ManagerGeneral Manager 3838 2525 1010 1515 3232 1717

Resident ManagerResident Manager 7777 99 77 22 1212 1010

Food/Beverage Food/Beverage DirectorDirector

4747 2323 1111 1212 2929 1717

ControllerController 8585 2525 2121 44 3232 2828

Assistant ControllerAssistant Controller 6666 1414 99 55 1818 1313

Chief EngineerChief Engineer 8181 2424 1616 88 3131 2323

Director of SalesDirector of Sales 3434 2525 99 1616 3232 1616

Sales ManagerSales Manager 6868 4545 3030 1515 5858 4343

Convention ManagerConvention Manager 9090 1414 1313 11 1818 1717

Catering DirectorCatering Director 7474 1919 1414 55 2424 1919

Banquet ManagerBanquet Manager 6060 1919 1212 77 2424 1717

Personnel DirectorPersonnel Director 4343 1515 66 99 1919 1010

Restaurant ManagerRestaurant Manager 8989 4949 4444 55 6363 5858

Executive ChefExecutive Chef 7070 2424 1717 77 3131 2424

Sous ChefSous Chef 9292 2424 2222 22 3131 2929

Executive Executive HousekeeperHousekeeper

6363 2525 1616 99 3232 2323

Total EmployeesTotal Employees 379379 257257 122122 486486 364364

Solving the ‘Surplus Solving the ‘Surplus Personnel’ ProblemPersonnel’ Problem

1.1. LayoffsLayoffs

2.2. AttritionAttrition

3.3. Reduced Hours/Job SharingReduced Hours/Job Sharing

4.4. Unpaid VacationsUnpaid Vacations

5.5. Early RetirementsEarly Retirements

High Performance Work High Performance Work Practices – Financial Practices – Financial PerformancePerformanceSample: Sample: 968 U.S. firms with 100 or more employees968 U.S. firms with 100 or more employees

Financial Data:Financial Data: 10-K reports with the SEC 10-K reports with the SEC

High Performance Work Practices:High Performance Work Practices: What proportion of the What proportion of the workforce participates in:workforce participates in:

1.1. Formal information sharing programFormal information sharing program

2.2. Formal job analysisFormal job analysis

3.3. Hiring from withinHiring from within

4.4. Employee attitude surveysEmployee attitude surveys

5.5. Quality of Work Life ProgramsQuality of Work Life Programs

6.6. Company incentive, profit-sharing, or gain-sharing plansCompany incentive, profit-sharing, or gain-sharing plans

7.7. Formal grievance and complaint proceduresFormal grievance and complaint procedures

8.8. Pre-employment testingPre-employment testing

9.9. Performance appraisals are used to determine promotionPerformance appraisals are used to determine promotion

10.10. Formal performance appraisalsFormal performance appraisals

11.11. Promotion by seniority or performancePromotion by seniority or performance

12.12. Selection ratio for hiringSelection ratio for hiring

13.13. What is the average number of hours of training received per What is the average number of hours of training received per employee per year?employee per year?

High Performance High Performance Work Practices - Work Practices - ResultsResultsA one standard deviation increase A one standard deviation increase

from the mean in high performance from the mean in high performance work practices is associated with:work practices is associated with:

7.05% decrease in 7.05% decrease in turnoverturnover $27,044 increase in $27,044 increase in salessales annually per annually per

employeeemployee $18,641 increase in $18,641 increase in market valuemarket value annually annually

per employeeper employee $3,814 increase in $3,814 increase in profitsprofits annually per annually per

employeeemployeeSource: Mark A. Huselid, “The Impact of Human Resource Management Practices Source: Mark A. Huselid, “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance.” on Turnover, Productivity, and Corporate Financial Performance.” Academy of Academy of Management JournalManagement Journal, vol 38 (1995): 635-672, vol 38 (1995): 635-672