CASES IN

~ HUMAN RESOURCE
MANAGEMENT -
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 CASES IN

HUMAN RESOURCE
MANAGEMENT
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 CASES IN

HUMAN RESOURCE
MANAGEMENT
DAVID KIMBALL
Elms College

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 e Brief Contents e

Foreword

Robert N. Lussier
Preface
Acknowledgments
About the Author

PARTI _ ¢ 21st-CENTURY HUMAN RESOURCE

MANAGEMENT STRATEGIC PLANNING
AND LEGAL ISSUES
Chapter1 e The New Human Resource Management Process
Chapter2 e Strategy-Driven Human Resource Management
Chapter3 e TheLegal Environment and Diversity Management

PARTI e¢ STAFFING
Chapter4 e Matching Employees and Jobs: Job Analysis
and Design
Chapter5 e Recruiting Job Candidates
Chapter6 e Selecting New Employees

PART III »« DEVELOPING AND MANAGING 35

Chapter 7 e Training, Learning, Talent Management, and
Development 36
Chapter8 e Performance Management and Appraisal 4)
Chapter9 ¢ Rights and Employee Management 48
Chapter 10 e Employee and Labor Relations ae
PART IV COMPENSATING 57
Chapter 11 Compensation Management 58
Chapter 12 Incentive Pay 62
Chapter 13 Employee Benefits 66

PART V PROTECTING AND EXPANDING

ORGANIZATIONAL REACH 71
Chapter 14 Workplace Safety, Health, and Security 72
Chapter 15 Organizational Ethics, Sustainability, and
Social Responsibility Je
Chapter 16 Global Issues for Human Resource Managers 82
 e Detailed Contents e

Foreword
Robert N. Lussier
Preface
Acknowledgments
About the Author

PART | e 21st-CENTURY HUMAN RESOURCE

MANAGEMENT STRATEGIC PLANNING
AND LEGAL ISSUES

1. The New Human Resource Management Process

Case 1.1. The Changing Role of Human Resources in Organizations:
The Curious Case of Zappos
Case 1.2. HRM Careers: Five Growing Areas of Human Resources

2. Strategy-Driven Human Resource Management

Case 2.1. The External Environment: When State Government
Offers Early Retirement
Case 2.2. HR Strategy: Employees Matter at Costco

3. The Legal Environment and Diversity Management

Case 3.1. Major Employment Laws: How Does an Increase in
State Minimum Wage Impact an Organization?
Case 3.2. Diversity and Inclusion: What's the Difference?

PART Il ¢eSTAFFING

4. Matching Employees and Jobs: Job Analysis and Design

Case 4.1. HR Forecasting: Visier—Workforce Forecasting
Case 4.2. Succession Planning: Developing Leaders at General
Electric (GE)

5. Recruiting Job Candidates

Case 5.1. The Recruiting Process: The Growth of E-Recruitment in
Recruiting Job Candidates
 Case 5.2. Internal Versus External Candidates: Which Candidate Is
More Valuable?

6. Selecting New Employees

Case 6.1. The Selection Process: Searching for a New Faculty
Member ... What Step in the Selection Process Are We in Today?
Case 6.2. Looking for “Organizational Fit”: Walter’s Unstructured
Interview at Google

PART Ill e DEVELOPING AND MANAGING

7 Training, Learning, Talent Management, and Development

Case 7.1. The Need for Training and Development: Should You Use
Massive Open Online Courses (MOOCs) Such as Coursera and
Udacity to Recruit and Retain Talent?
Case 7.2. Talent Management and Development: The Talented
Harry Saunders’s Career Development at the Big Buy Supermarket

. Performance Management and Appraisal

Case 8.1. Why Do We Conduct Performance Appraisals? Jennee LeBeau
and the Case of the Missing Performance Appraisal System
Case 8.2. Performance Appraisal Problems: The Trouble With
Performance Systems

Rights and Employee Management

Case 9.1. Coaching, Counseling, and Discipline: HR’s Role—Document,
Document, Document
Case 9.2. Trends and Issues in HRM: Mindfulness—a Thoughtful
Theory About Leadership

10. Employee and Labor Relations

Case 10.1. Unions and Labor Rights: Can Labor Unions and
Management Work Together?
Case 10.2. Managing Conflicts: How Can HR Help With Angry Employees?

PART IV e COMPENSATING

11. Compensation Management

Case 11.1. Compensation Management: How Does Wage Compression
and Pay Secrecy Affect Employee Motivation?
 Case 11.2. Trends and Issues in HRM: What Motivates Employees at
Work? Expectations or Equity? 60

12. Incentive Pay 62

Case 12.1. Executive Compensation: New Developments in Executive
Compensation 62
Case 12.2. Trends and Issues in HRM: The Giving Praise Model in Action 63

13: Employee Benefits 66

Case 13.1. Statutory Benefits: Companies Kicking Your Spouse Off
of Your Health Care Plans 66
Case 13.2. Trends and Issues in HRM: Managing New Laws
Regarding Sick Leave 67
#

PART V e PROTECTING AND EXPANDING

ORGANIZATIONAL REACH 71

14. Workplace Safety, Health, and Security TZ

Case 14.1. Building a Human Resources Information System While
Protecting Health Information From Cyber Attacks ee
Case 14.2. Trends and Issues in HRM: Future Trends in Human
Resource Management 74

15. Organizational Ethics, Sustainability, and

Social Responsibility 77
Case 15.1. Corporate Social Responsibility (CSR): Can Human
Resources Help Companies Develop a CSR Program? Ve
Case 15.2. Equal Opportunity, Diversity, and Multiple Generations
at Work Together 79

16. Global Issues for Human Resource Managers 82

Case 16.1. Globalization of Business and HRM: Should Your
Marketing Director Become an Expatriate? 82
Case 16.2. Global Staffing: Developing, Staffing, and Managing
Global Human Resources—Katya and Her Russian Background 84
 e Foreword e

The current buzzword in both business and academia is engaged. Today’s millennial
students don’t want to simply be lectured at; they want to be actively engaged in
their learning, and they want relevant real-world businesses examples. The AACSB
(Association to Advance Collegiate Schools of Business) accrediation standards clearly
state the importance of decision-making skills.
Over the years, trends have come and gone, but the case method of developing
decision-making skills through the use of case studies of real-world organizations has
passed the test of time to become the classic teaching method. Case studies require the
student to think critically in analyzing information and in making decisions.
David Kimball’s Cases in Human Resource Management offers real-world business
cases to meet the millennial students’ need to be engaged, and they can be used to
meet the AACSB standard of developing the important decision-making skill. Kim-
ball has selected a good variety of organizations. Some of the popular businesses that
students want to learn more about include Zappos, LinkedIn, Costco, Walmart, GE,
Hilton, and Visier.
Kimball’s Cases in Human Resource Management is a good supplement, not only to
the HRM course, but also for most organizational behavior and management books,
and | recommend it.

Robert N. Lussier
Professor of Management
Springfield College
 e Preface e

This casebook is designed using the five parts of Human Resource Management:
Functions, Applications, and Skills Development, Second Edition, by Robert N. Lussier
and John R. Hendon. Each case is about a thousand words, which allows the student
to learn about the company, people, and the human resource issue within each case.
However, students are encouraged to use the Human Resource Management textbook by
Lussier and Hendon to learn more about the human resource issue within the case.

Part |: 21st-Century Human Resource

Management Strategic Planning and Legal Issues
In Chapter 1, a case about Zappos helps setup a more modern way to look at employees
as human resources—with an emphasis on human. The second case reviews the five
growing areas where a student might work in a human resources department. Students
need to learn what these five growing areas ate so they can explore them throughout
the casebook.
Chapter 2 starts with a case that requires the student to determine the viability of
an early retirement offer in the state of Massachusetts. The second case investigates
how Costco develops happy employees.
Chapter 3 is about a very recent trend where companies, such as Walmart, are
offering more than the required minimum wage. The second case is about diversity
and affirmative action at Hilton Hotels.

Part Il: Staffing

Chapter 4 explores Visier and the services it provides HR departments by helping to
forecast workforce needs. The second case looks back at the famous succession plan-
ning process that Jack Welch used to select his own replacement as chief executive
officer at General Electric (GE).
The cases in Chapter 5 explore e-recruitment and having to make a decision to hire
an internal employee or an external candidate to fill an open position.
The first case in Chapter 6 uses the author’s own experiences of recruiting and
selecting a new college professor. The second case is about an employee, “Walter,” who
is rejected as being a good fit for Google.

Part Ill: Developing and Managing

Chapter 7 presents the latest ideas about Massive Open Online Courses (MOOCs),
such as Coursera and Udacity, and their ability to recruit and train employees. The
second case follows the talented Harry Saunders and his career development at the Big
Buy Supermarket.
Xi
xii Cases in Human Resource Management

The first case in Chapter 8 is about the importance of using performance apprais-
als. The second case is about the problems using performance appraisal forms!
The first case in Chapter 9 is about the importance of coaching, counseling, and
disciplining employees. The importance of documentation is emphasized. The second
case presents the concept of mindfulness and how it can be used as a thoughtful way
to lead employees.
The first case in Chapter 10 challenges management and unions to work together.
The second case deals specifically with managing angry employees.

Part IV: Compensating

The first case in Chapter 11 is about how wage compression and pay secrecy affect
employee motivation. The second case discusses whether employees are motivated at
work based on their expectations or are treated equally.
Chapter 12 debates some of the newer issues involved in executive pay since the
introduction of Sarbanes-Oxley reform in 2012 (SOX) and the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010.
Chapter 13 covers benefits and how some employers are kicking your spouse off
your health-care plans to reduce benefit costs. The second case examines new laws
regarding sick leave for employees.

Part V: Protecting and

Expanding Organizational Reach
Chapter 14 is about building an HR information system (HRIS) while protecting
health information (PHI) from cyber attacks. This is a timely issue with the increased
occurrence in cyber theft in all industries. The second case starts to wrap up the book
by discussing future trends in human resources.
Chapter 15 explores whether HR can help companies develop corporate social
responsibility (CSR) programs. The second case examines equal opportunity, diver-
sity, and how five generations of people are at work together. Professors and readers
might find the case on five generations of people at work together as the most inter-
esting case in the book.
Chapter 16 concludes the book with cases related to people the author knows
(names have been changed) who have worked in various countries in their careers.
The first case discusses the role of a marketing director living in England. The second
case asks readers to put themselves in the shoes of a young Russian lady who comes
to the United States and finds that her language and math skills are very valuable in
the workplace.
The author welcomes comments about individual cases at [email protected].
Readers are also welcome to send updated material they find regarding each case. Ideas
for new cases are also greatly welcome.

David Kimball

Teaching notes for the case studies in the book are available to instructors at
study.sagepub.com/kimball.
 e Acknowledgments ®

This casebook would not have been possible without the support of my family: Amy,
Carly, and Jacob. I appreciate the guidance of Dr. Robert Lussier, whose textbook was
the inspiration for this casebook. I would also like to thank Maggie Stanley and Neda
Dallal from SAGE Publishing, who helped organize all the cases.

SAGE Publishing gratefully acknowledges the following reviewers:

Ralph Braithwaite, University of Hartford

Leslie Campbell, Colby-Sawyer University

Joseph M. Goodman, Illinois State University

Gundars Kaupins, Boise State University

Claire Kent, Mary Baldwin College
Ernest Kovacs, Fairleigh Dickinson University
Kim Lukaszewski, Wright State University

Carl Maertz, Saint Louis University

Dan Morrell, Middle Tennessee State University

Lisa O’Hara, Pennsylvania State University
Kern Peng, Santa Clara University

Matthew Stollak, St. Norbert College

Mussie Tessema, Winona State University

Thomas R. Tudor, University of Arkansas at Little Rock

xii
 e About the Author e

David Kimball, PhD, has been professor of management at Elms College in

Chicopee, Massachusetts, for nearly three decades. He is the chair of the Division of
Business, which includes majors in accounting, management, marketing, sport man-
agement, and health care management. Professor Kimball has taught business strat-
egy and global ethics courses at the undergraduate and MBA levels. Dr. Kimball has
co-authored a textbook on sports management and anew book on entrepreneurship.
As a former employee at the old AT&T, he is often interested in the mobile commu-
nications industry and the technology used in similar industries. Before entering the
field of teaching on a full-time basis, Dr. Kimball worked at Mass Mutual Life Insur-
ance Company as a corporate trainer. At times, Dr. Kimball’s early work experiences
at McDonald’s can be found in his views since he still believes in the McDonald’s
credo of cleanliness, service, and value. Dr. Kimball completed his dissertation on the
topic of business mission and written mission statements while finishing his doctorate
degree in management systems.

Xiv
21st-CENTURY U
HUMAN RESOURCE eae
MANAGEMENT
STRATEGIC
PLANNING AND
LEGAL ISSUES
 The New Human Resource
Management Process
Case 1.1. The Changing
Role of Human Resources in
Organizations: The Curious Case of Zappos
In the 1980s, when you were interviewed or hired for a job you often met a person
from the company who worked in the Personnel Office. The Personnel Office was
viewed as a place where each employee filed the necessary forms to work at the
company.
The Personnel Office was considered a staff management area where you learned
about the policies and rules of being an employee at the company. Personnel was con-
sidered a staff management area, since they only advised line managers in some field of
expertise. For example, Personnel would have consultants with specialized experience
in accounting or providing input on legal issues to support the line managers that
were creating the product.
Fortunately, over the years the Personnel Office became known as the Human
Resources (HR) Department. HR has become a larger part of the strategic planning pro-
cess in many companies. The HR manager often helps to set policies and strategies in
relation to the workforce at an organization. At the same time, HR managers continue
to support line managers by constantly improving areas such as finding prospective
new employees, training employees, improving employee motivation, searching and
evaluating lower cost and higher quality health-care benefits, providing information
on retirement services, and many other activities designed to make sure employees are
able to complete their jobs.
Zappos, a very successful online retailer that sells shoes mainly to women, is an
example of a younger company that provides a modern approach to human resource
management. The human resources department at Zappos organizes unique events to
help celebrate the excitement at Zappos. To begin the process of working at Zappos,
the initial job interview is often conducted in an informal atmosphere to allow the
 Chapter 1 @ The New Human Resource Management Process

prospective employee to feel comfortable. New employees are offered $2,000 if they
don’t want to stay with the company. Very few employees decide to leave the company
since they are excited to work for Zappos and their exciting CEO Tony Heish.'
Zappos has been so successful that it was purchased by Amazon in 2009 for over
$807 million. Zappos runs independently of Amazon to protect its unique human
resources department.’
Rebecca Henry is the former director of human resources for Zappos. She believes
the company consciously decides what the corporate culture needs to look like based
on ten core values. Each new employee is trained by an HR person on each of the
following ten values:

— Deliver WOW Through Service

Embrace and Drive Change

Create Fun and a Little Weirdness

Be Adventurous

Be Creative and Open-Minded

Pursue Growth and Learning

Build Open and Honest Relationships With Communication

Build a Positive Team and Family Spirit

NS)
ee
ha
BOA
IONS
eSDo More With Less

— — Be Passionate and Determined, Be Humble?

The HR Department works with upper-level management to develop employee job

descriptions, the hiring process, on-the-job training, and the day-to-day work envi-
ronment based on these unique core values.
Zappos is always exploring new ideas to improve its human resources process.
For example, to improve the recruiting process, it has developed a social network
known as Zappos Insiders. Zappos Insiders allows prospective employees to interact
with current employees to see if they would be a good fit with the creative culture
at Zappos.*
Tony Heish’s latest idea is to make sure the people working at Zappos are truly
motivated to work at his company. All employees were offered the option to leave
the company with a severance package if they didn’t want to participate in a self-
management program. Self-management is a newer management idea that is based on
having agile workers. Employees learn to manage themselves and move from job to
job instead of staying with a single static job. The goal is for employees to give up tra-
ditional job titles and work on multiple tasks, rather than at a specific job. An employ-
ee’s job is constantly changing instead of being static.
Overall, 220 employees (14%) took the severance package offered by Heish to weed
out employees who wanted to change companies, who were ready for retirement,
Part! @ 21st-Century Human Resource Management Strategic Planning and Legal Issues

or decided to leave for their own reasons. However, that also means 84 percent of the
remaining employees are employees who are motivated to make Zappos an even more
successful online retailer.®

Case Questions

1. Should Tony Heish be concerned 3. Does it appear the Human Resources

that a large number of managers Department at Zappos is a staff or
and employees might reject self- a line area?
mgnegetieny Jeave tie Pee and 4. Does human resources at Zappos
accepts Sive\ ane Taca0: create revenue for the organization?
er one Us OF icen ves de 5. If you were the HR manager at Zappos,
employees experience at Zappos
would you support the Zappos Insider
that make them want to stay with the
program as a reliable source of
company?
acquiring new prospective employees?

Case 1.2. HRM Careers:

Five Growing Areas of Human Resources
What does it mean if you say you want to work in human resources? Actually, if you
can show a desire to work in HR, that is great! Too many students lack a focus on what
they specifically want to do for a job and a career. So, being able to say one wants to
work in HR shows that a student has scoped out an area he or she would like to learn
more about and gain experience in.
A person who would like to work in human resources can expect to work closely
with the other people in the organization. Thus, an HR employee needs to have good
people skills, as the HR job will be to take the lead in the management and maintenance
of the organization’s people. The HR person might find his or her job to be as delightful
as helping employees who have a new baby in their family or as sad as helping with
employees who leave the company, are laid off from the company, or even pass away.
Human Resources employees are increasingly asked to see the big picture of
the organization. They need to know where the company is going so they can hire
the appropriate people to fill those positions. For example, if a supermarket chain
decided to add gasoline stations to its stores, then the company might need to hire a
person who had experience in gasoline sales instead of—or along with—knowledge
of food sales.
The Bureau of Labor Statistics (BLS.gov) provides data on human resource manage-
ment jobs for the 2012 to 2022 range. Median pay in the field of human resources is
expected to be just under $100,000 per year, or $47.94 per hour. The data are based on
a person having a bachelor’s degree and 5 years of related work experience. Job growth
 Chapter 1 @ The New Human Resource Management Process

over the 10-year period is expected to be 13 percent, which is considered as fast as the
average growth in all occupations. The average job rate in all occupations is expected
to be 11 percent.°
HR jobs can be classified as either generalist or specialist. An HR generalist may
Operate in many different areas of the discipline. A specialist focuses on a specific dis-
cipline of HR. Many smaller organizations have only one or two employees in their
HR office. The HR employees will have to be generalists inasmuch as they will have to
help employees in many different areas.
The following are the human resources positions that are expected to grow in the
next five years:

1. Compensation and Benefits Managers. The Bureau of Labor Statistics (BLS.gov)

explains that these managers plan, direct, and coordinate how much an organi-
zation pays its employees and how employees are paid. Benefits managers plan,
direct” and coordinate retirement plans, health insurance, and other benefits
that an organization offers its employees. For example, employees can select
a health-care plan for their family from the benefit manager. Employees will
then periodically ask questions about their plan throughout the year. The ben-
efits manager will end up answering questions regarding the deductible level
in the plan, which the family must pay before most medical services are free.
One plan, for example, may have a $4,000 deductible. That amount of medical
care money must be spent before services are reimbursed. Employees can also
ask the benefits expert for help with purchasing medical supplies via mail order
instead of using a local pharmacist. Salaries can range from $48,000 to $98,000,
depending on where you live.

2. Training and Development Specialists. The median wage for trainers was $56,000
in 2012. Training and development is the area of the company where employ-
ees receive education. Trainers need to have good communication skills, as they
lead training sessions on topics such as leadership, teamwork, and product-
specific information.’

3. Employment, Recruitment, and Staffing Specialists. These HR workers are employ-

ment specialists who screen, recruit, interview, and place workers. The goal
of staffing specialists is to get talented people interested in working for their
company. Mean wages are around $63,000 a year.

4. Human Resources Information (HRIS) Analysts. This person uses computer skills to
help ensure the data within the human resources department. They ensure the
integrity of the data, testing of system changes, and analysis of data flows for
process improvement.

5. Employee Assistance Plan (EAP) Managers. Many small to large businesses have an
EAP program to help employees with their personal health. EAPs can include
counseling for work-related stress, financial problems, and substance-abuse
problems. Wellness programs can include assistance with weight problems and
encourage physical fitness programs.
Partl @ 21st-Century Human Resource Management Strategic Planning and Legal Issues

Case Questions
ii Which of the previous positions listed 4. Aperson with social worker experience
deals with problems you might have would be well suited to which type of
regarding your health-care program? position?
. Which positions would be well suited 5. Aperson who would find, attract, and
to someone who likes to make assign people to a certain division
presentations? would have which job title?
. A person with computer skills would be
best suited for which position?

Notes
1. McFarland, Keith, “Why Zappos Offers New Hires $2,000 to Quit,” Bloomberg Business,
September 16, 2008.
2. Hof, Rob, “Amazon.com Acquires Shoe E-tailer Zappos,” BusinessWeek, July 22, 2009.
3. Heathfield, Susan M., “20 Ways Zappos Reinforces Its Company Culture,” Humanresources.com.
4. Feffer, Mark, “The Democratization of Talent Management: How Technology and Gene-
rational Changes Are Transforming HR,” Society for Human Resource Management, April 7,
2015.
S. Feloni, Richard, “7% of Zappos Managers Quit After Recent CEO Ultimatum to Embrace Self-
Management or Leave,” Businessinsider.com, June 9, 2015.
6. http://www.bls.gov/ooh/management/human-resources-managers.htm.
7. http://www.bls.gov/ooh/business-and-financial/training-and-development-specialists.htm.
 Strategy-Driven Human
Resource Management
#

Case 2.1. The External Environment:

When State Government Offers Early Retirement
iginate outside the

In regard to the external force of the government, we have come to expect our
government agencies to be complex, formalized, and centralized in terms of organi-
zational structure.
Government agencies are very large organizations that are normally very com-
ay in Me we divide the organization into differ-
ent segments. Gove fte x2 ed ir ny
of employees, which makes communication more difficult between the different
bos of the agency. Government agencies are often known to be very

Government jobs are often standardized (formalization) within an agency, since

they have to make decisions based upon many policies, procedures, and rules.
Although these rules help employees to make routine decisions, they also stifle cre-
ativity since employees must also follow these rules.
Overall, government agency
to ensure the
Centralization helps to maintain control and should also result in lower costs.
National, state, and local governments all set laws and regulations that businesses
must obey. Federal and state governments create opportunities and obstacles for busi-
nesses. Safety standards set by government agencies, such as the Occupational Safety
and Health Administration (OSHA), are meant to increase employee safety while in a
working environment. The Environmental Protection Agency (EPA) set standards to
reduce pollution. Although it can be expensive for a company to meet the standards
Part! @ 21st-Century Human Resource Management Strategic Planning and Legal Issues

of these types of agencies, the laws are designed to improve our quality of life at work
and at home.
However, just like a for-profit company, the government has to be careful about
hiring people to work in its agencies. At times, the government can experience a defi-
cit and has to entice its employees to accept an early retirement program.
In Massachusetts, the state government had a primary goal of achieving budget
savings of $172 million by offering an early retirement incentive package. Governor
Charlie Baker and his people estimated that 4,500 state workers would take the incen-
tive. The actual number of people who applied for retirement was about 2,870.' The
reduced number of employees who accepted the reduced early retirement program
might result in layoffs in state employees. However, the governor has promised to look
for other solutions besides layoffs.
The state wanted to use 20 percent of the savings to refill positions that were now
open. As an extra incentive, the state offered a $10,000 buyout to employees who were
eligible to retire. It appears that 100 fully ready to retire employees accepted the extra
$10,000 offer.’
The state of Massachusetts’s forecast for how many employees would take the
early retirement package should have considered multiple issues. For example,
Massachusetts had a record snowfall of 100 inches in the winter of 2015. The increased
amount of snowfall should have enticed more government employees to retire early
so they could move to a warmer climate. However, the people of Massachusetts are
used to snowy winters—fewer left the state, or their position with the government,
than expected.
Employees also are more likely to accept an early retirement program if they have
been preparing for their own retirement. If employees have saved money in prepara-
tion for their retirement, then they would be able to retire early since they will have
enough money in retirement. But employees who have not saved enough for their
retirement will need to continue to work to receive their salary.
Last, employees can have social reasons for working toward their proper retirement
age of approximately 66 years old. Many employees enjoy the job they do at work. The
job gives them motivation to wake up in the morning, to achieve something at work
that is meaningful and can help other people, they enjoy their salary level and bene-
fits package, and they enjoy the friendships of the fellow workers.
Enticing your employees to retire early from the company (or government) is lined
with many potential problems. Here are a few examples:

¢ A “brain drain” situation can occur if your best and most important employ-
ees take the early retirement package. Key knowledge toward running the
operation will be lost if your experienced employees decide to leave the orga-
nization early.
e Aserious lack of talent can also happen if the number of people taking the early
retirement package is more than expected.
¢ There would be fewer employees left to deal with the face-to-face interactions
with customers if the middle-to-lower level state employees decided to take the
early retirement package.
¢ [t will cost more money up front to entice people to want to retire early.
 Chapter 2 @ Strategy-Driven Human Resource Management

@
Case Questions
1. Which force of the external environment to complexity, formalization, and
has the greatest impact on the state of centralization?
Massachusetts?
5. If you were an employee of Zappos or
2. Which force would you select as the the state of Massachusetts, would you
second greatest impact on the state? take early retirement? Assume you
qualify for the extra $10,000 incentive.
3. Should the state be concerned if more
You are currently 58 years old.
than 4,500 employees elected to retire?
4. In regard to structure, how would
you consider the state with respect

Case 2.2. HR Strategy:

Employees Matter at Costco
Costco is a wholesaler and a retailer—customers love to shop at Costco and buy con-
sumer goods in bulk packages. At the same time, the employees who work at Costco
are equally happy with their jobs at Costco. No wonder the company is ranked in the
100 workforces.’

ehavior that member: of an organization share O at Costco,

Jim
said, “When employees are happy, they are your very best ambassadors.”
Although many companies say employees are their most important asset, there is
a special emphasis on employees at Costco. Sinegal is considered a hero at Costco
because he started out his career a bag boy, worked his way up to VP of merchandising
and operations, and eventually co-founded Costco in 1983.
There are plenty of stories of people buying a Costco rotisserie chicken for $4.99
and having no idea why Costco keeps the price so low. The price of a hot dog and soda
for $1.50 hasn't changed since the mid-1980s. However, the $1.50 price is a symbol of
how much Costco cares about its customers; it keeps its price low so that customers,
who often drive quite far to reach a Costco store, have very affordable options to eat
while shopping at the store.°
Employees at Costco are also treated extremely well. Costco pays its employees
much higher than the minimum wage. The company also pays about 90 percent of
health-care benefits for full and part-time workers. There is a clear path provided for
employees to grow and develop with the company.
Competitive advantage (CA) is a key strategic topic often associated with Professor
i from Harvard.°
Determining the
competitive advantage for an organization is the job of management leaders. In the
case of Costco, competitive advantage lies in the ability to sell bulk packages of food
10 Part] @ 21st-Century Human Resource Management Strategic Planning and Legal Issues

items at a lower cost per unit than traditional supermarkets. Of course, these food
items (along with nonfood items such as clothes, books, and videos) are stocked and
sold by extremely pleasant and helpful employees. The key to a competitive advan-
tage is to make sure it is a sustainable competitive advantage (SCA). An SCA would
mean the advantage the company has is not easily copied, outdated due to new inno-
vations or technology, or in general no longer having a valid competitive advantage.
With the goal of a SCA in mind, Porter also developed his Five-Force Model of
Competition.’ Porter's five forces are Supplier Power, Buyer Power, Threat of New Entry,
Threat of Substitution, and Competitive Rivalry. In Costco’s case, Costco is such a
large retailer that it can buy large amounts of products, such as Coca-Cola and Oreo
cookies, that it can get items at the lowest possible cost. Plus, Costco has its own
brand name, Kirkland, which also increases its control over suppliers. In regard to
substitutions, there is really no replacement for food. However, the force of a Threat of
New Entrants is quite possible. For example, Amazon is the largest retailer online and
recently surpassed Walmart as the largest company in market value. Costco has to be
concerned that its customers will increasingly buy their food items online at Amazon
instead of going out to shop at a Costco store.
AS one can see, in many industries, the competitive rivalry within an industr

at all of its stores. It certainly helps to

have pleasant people at their doors enesinie customers into and out of the store. Of
course, that is also a security check to make sure customers have their membership
on the way into the store and that they have a receipt for buying the products on the
way out of the store.
Based on personal experiences since 1991, the author's family has bought grocery
and nongrocery items at Costco. We are loyal customers, and the employees are always
sincerely helpful 100 percent of the time. The level of service, including returning
any product that has ever been bought at Costco, is not found at any other retailer.
Costco’s focus on employee happiness translates to customer satisfaction. Happy
employees make happy customers.

Case Questions
I Costco has impacted the retail shopping 3. How do Costco’s HR policies help the
industry. Use the Five-Force model to company be successful?
outline how Costco impacted the grocery eric cliseihole Ges icucheates = link
and nongrocery marketplace. between employees and customers.
NO How does Costco’s approach to human 5
. Does the mission of Costco impact HR?
resources provide it with a competitive
advantage?
 Chapter 2 ® Strategy-Driven Human Resource Management 11

Notes
1. Associated Press, “Early Retirement Signups for Massachusetts State Workers Below Proje-
ctions as Deadline Nears,” FoxBusiness.com, June 12, 2015.
ee Schoenberg, Shira, “2,870 Sign Up for Early Retirement,” The Republican, June 13, 2015, 1.
3. “2015 Workforce 100: Ranking the World's Top Companies for HR,” Workforce, May 22, 2015,
http://www.workforce.com/articles/21293-2015-Workforce-100-List.
4, “Employee Relations Best Practices: Costco's Approach to HR,” i-Sight, http://i-sight.com/
resources/employee-relations-best-practices-costco/.
5. Tuttle, Brad, “Why Costco May Never Raise Prices on $4.99 Chickens, $1.50 Hot Dogs,” Time
.com, May 29, 2015.
6. Porter, Michael, “Competitive Advantage,” Free Press, 1998.
7. Airline, Katherine, “Porter's Five Forces: Analyzing the Competition,” Businessnewsdaily
.com, February 18, 2015, http://www.businessnewsdaily.com/5446-porters-five-forces.html.
#
 The Legal Environment and
Diversity Management
Case 3.1. Major Employment Laws:
How Does an Increase in State
Minimum Wage Impact an Organization?
In any management position, you need a basic understanding of the major employ-
ment laws. If you are the manager of a company, such as Walmart, you have to under-
stand what is legal and what isn’t, or you may cost your employer money.
There are some laws that deal specifically with compensation issues. A major piece
of legislation was the Equal Pay Act of 1963, which requires that women be paid equal
to men if they are doing the same work. However, the oldest of the compensation
laws is the Fair Labor Standards Act (FLSA) of 1938. The FLSA covers minimum wages,
overtime issues, and child labor issues within the United States.
The federal minimum wage set by FLSA is currently $7.25 per hour. States cannot
set a minimum wage that is lower than the federal standard, but they are free to estab-
lish a higher one. The minimum rate in different states can be found at The National
Conference of State Legislators.'
President Obama has made increasing the minimum wage a priority during his
presidency. He believes that low minimum wages create “social inequality.” He has
called for a minimum of at least $10.10 per hour.” Even still, there is little doubt this
increase will not be enough to help low-income people escape poverty. But it would be
progress, and it would help low-income people earn more money.
Employees, especially in the fast food industry, have been holding rallies across the
nation to increase the minimum wage. The rallying cry has been for $15.00 per hour
for a minimum wage. This is a fight for everyone who is paid minimum wage, not just
the fast-food industry.
For example, the city of Los Angeles voted in 2015 to increase its minimum
wage from $9 per hour to $15 per hour by 2020. The minimum wage rate will

12
 Chapter 3 @ The Legal Environment and Diversity Management 13

be $10 in California in 2016 and $13.00 in 2017.3 More large cities are expected
to follow.
In New York, Governor Andrew Cuomo is siding with the minimum wage earners.
Cuomo rallied against McDonald’s and Burger King, where pay is so low that employ-
ees are forced to accept state assistance.’
Walmart has been at the center of the minimum wage rate for many years. Since
Walmart is the largest physical retailer in the world, it should have expected its wage
rate would be scrutinized by all the stakeholders of the organization.
In response, Walmart has increased its minimum salary to $9 per hour, which will
bump up to $10 by February 2016. Around 500,000 employees will receive the hourly
increase. It is hoped that the increases can help many Walmart employees who are
on state assistance. Walmart didn’t decide to suddenly be kind to its employees. Since
most states now have a rate higher than the federal minimum rate, Walmart made
the change because it was going to legally have to pay its employees the higher rate
in different states.
Human résources departments need to be prepared for the increase in minimum
wages. HR needs to understand its own business situation and build a business model
that will include higher minimum wages. Some companies, such as Costco, Ikea, and
The Gap already pay their workers above the federal minimum wage.°
HR also has to be concerned about wage compression between hourly employees
and supervisors. If the minimum rate rises high enough, the hourly workers could
be paid as high as, or even higher than, their supervisors and managers. This could
cause problems with employees, since they might rather be an hourly worker than of
a salaried employee.
The success of the rallies, the increase in state and local wages, and the decision
by large companies to increase their minimum wage is certainly positive news for the
lives of many Americans. But it is most likely that employers are also going to decide
to hire fewer employees since they will claim it is too expensive to hire the same
number of minimum wage employees as they currently hire. Consequently, it is possi-
ble that low-income, entry-level employees will have fewer job opportunities because
employers will try to reduce the number of employees they hire.

@
Case Questions
1. What lawls) apply to this case? 4. Will more college-educated prospective
employees be offered jobs at $15 per '
2. Will Walmart employ fewer minimum
hour instead of a salaried position?
wage employees to save money?
5. What is your view on the increase in the
3. Will low-income employees need more
minimum wage? How has it affected
education and skills? :
yourself at your own job?
14 Part! @ 21st-Century Human Resource Management Strategic Planning and Legal Issues

Case 3.2. Diversity and Inclusion:

What's the Difference?
Hilton Worldwide Named Top 50 Diversity Company
Diversity and inclusion are important concepts in ensuring that all human beings
in your organization are treated equally. Companies have learned that their employ-
ees should represent their customers. All companies sell their products and services
to an increasingly diverse population. Thus, the employee makeup of the firm should
also be diverse.
Diversity refers to all the ways we differ. Anything that makes us unique is part
of diversity. Inclusion involves bringing together and harnessing these diverse
forces and resources in a way that is beneficial.° An organization needs to be aware
of the diverse nature of their organization, then create programs to help include
all the diverse groups to feel comfortable, wanted, and motivated to work for the
company.
Diversity is important and needed because, as the white population continues to
shrink and the minority population grows, selling your product to a variety of groups
increases sales, revenues, and profits. Embracing diversity means you will create new
business opportunities by having employees who look at the world from different
perspectives.
Human resources needs to be fully trained and aware of all the laws related to the
topic as applied in organizations. Thus, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act of 1990, the Age Discrimination Employment Act of
1967, and other laws need to be fully understood and implemented by HR employees.
HR should be involved in training employees to foster diversity and to be accepting
of ideas created by each group. HR can be the facilitator to help the organization stay
within the laws of discrimination and, at the same time, help foster a better under-
standing between employees from different backgrounds.
Hilton Worldwide was selected as DiversityInc’s Top 50 Companies for Diversity.
Based upon DiversityInc’s research, the top 50 companies have 20 percent more
Blacks, Latinos, and Asians in management, and 13 percent more women.
Here are some reasons that Hilton Worldwide was selected as an above average
diversity company:

¢ “Diversity and inclusion are part of our DNA at Hilton,” said Christopher J.
Nassetta, president and CEO of Hilton Worldwide. “Like our hotels, our work-
force is global, and our success is driven by the passion and motivation of our
teams. Our culture and diversity in all its forms around the world makes our
organization strong and drives better results.”8
¢ Hilton Worldwide supports the LGBT community by participating in two of
the nation’s largest Pride festivals.
 Chapter 3 @ The Legal Environment and Diversity Management 15

e Hilton has a National Minority Supplier Development Council Board of

Directors. Their goal is to help influence the development of Asian, Black,
Hispanic, and Native American suppliers and supplier diversity best practices.
e Hilton Worldwide was ranked on the Hispanic Business 2012 Best Companies
for Diversity list by Hispanic Business magazine. Hilton scored among the high-
est in restaurants and resorts.
e Hilton Worldwide offers excellent employee resource groups, including a group
for veterans and their spouses.

How does Hilton Worldwide do in passing the OUCH test? The OUCH test,
although not a legal test, is a good theory and rule of thumb as to what makes a fair
human resource decision. OUCH is an acronym for a decision that is objective, uniform
in application, consistent in effect, and related to the job The OUCH test should be used
whenever considering any action that involves employees.

The “O” fh OUCH means employment actions are made as objectively as possible.
Objective means the HR decision is based on fact, cognitive knowledge, or quan-
tifiable evidence in all cases. In comparison, employment actions should not be
based on something that is subjective, such as your emotional state, your opinion,
or how you feel in a certain situation.
The “U” in OUCH considers whether an employment action is being uniformly
applied to all employment decisions. For example, if one candidate for a manage-
ment position at Hilton has to take a written test as part of the job process, then
you also need to have all the applicants for the position complete the written test,
under the same conditions, to the best of your ability.
The “C” in OUCH considers whether the employment actions taken have signifi-
cantly different effects on one or more protected groups than it has on majority
group. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination
based on race, color, religion, sex, or national origin. Managers have to be careful
they don’t affect a protected group disproportionately with an employment action.
It is important for managers to show consistency in their employment actions.

The “H” in OUCH determines whether the employment action directly relates to
the primary aspects of the job in question. If the job of a manager at the Hilton
does not include serving coffee to employees in the morning, then the manager
cannot be hired or fired for not serving coffee.

On all accounts, a company like Hilton Worldwide, that is thought of as a Best

Company for Diversity, passes the OUCH test. Hilton has done an excellent job of
including all sorts of diverse groups (such as veterans and their spouses, Asian, His-
panic, and Black employees and suppliers, and the LGBT community) in its diversity
and inclusion programs.
16 Part! @ 21st-Century Human Resource Management Strategic Planning and Legal Issues

Case Questions
1, What laws do you think might apply in 4. Does Hilton Worldwide pass the
this case? OUCH test?
2. What is the difference between diversity 5. Discuss different groups of people/
and inclusion? employees that would be considered
3. What is the role of human resources in
diverse.
fostering diversity?

Notes
ty, National Conference of State Legislators, retrieved November 27, 2015, http://www.ncsl
-org/research/labor-and-employment/state-minimum-wage-chart.aspx.
. Sahadi, Jeanne, “Will a Higher Minimum Wage Really Reduce Income Inequality?” CNN
Money, January 15, 2014.
Wattles, Jackie, “Los Angeles Is Now Largest City in America With $15 Minimum,” CNN
Money, June 14, 2015.
Bredderman, Will, “At Minimum Wage Rally, Cuomo Attacks Term ‘Income Inequality,’”
June 2015; http://observer.com/2015/06/at-minimum-wage-rally-cuomo-attacks-term-
income-inequality/.
Patton, Carol, “Employers Embracing Wage Hike,” Human Resource Executive Online, October 13,
2014.
. Jordan, T. Hudson, “Moving From Diversity to Inclusion,” Diversity Journal.com, March 22,
2011.
“Hilton Worldwide Named One of DiversityInc’s 2015 Top 50 Companies for Diversity:
Hilton Also Named a Top 10 Company for Supplier Diversity,” Hilton Worldwide.com,
April 24, 2015.
http://news.hiltonworldwide.com/index.cfm/newsroom/category/topic/732.
Hendon, John, “The Ouch Test: A Tool for Managing Your Employees,” Ask the HR Department.
com, 2013.
STAFFING

Chapter 4. Matching Employees and Jobs: Job Analysis and Design

Chapter 5. Recruiting Job Candidates

Chapter 6. Selecting New Employees

 Matching Employees and Jobs
Job Analysis and Design

Case 4.1. HR Forecasting:

Visier—Workforce Forecasting
For an organization to maximize productivity, HR must match the right people with
the right jobs. HR forecasting identifies the estimated supply and demand for the dif-
ferent types of human resources needed in the organization over some future period,
based on past and present demand.
Employment software specialist Visier Inc. helps companies complete their HR fore-
cast. Visier is an employment specialist located in Vancouver, British Columbia, and
San Jose, California. The company provides assistance and solutions to for improving
recruitment, retaining employees, and motivating employees.
Visier takes complex data (often called Big Data) and uses Cloud technology to
store and analyze workforce data. It then turns the data into sensible workforce strat-
egies. Led by CEO John Schwarz, Visier has successfully developed HR strategies with
Yahoo, Time Inc., ConAgra Foods, Nissan, and AOL.!
Using its special Workforce Intelligence process, Visier analyzes company data
to predict which valuable employees are most likely to leave the company, provide
insight into proper compensation levels, and discover recruitment sources that will
result in finding the most talented recruits.
Visier predicts that companies will start to look at the overall cost of human
resources, instead of just counting the number of people. Through its Workforce
Intelligence process, Visier will also help predict the impact of employee retirement
and how to best transfer employee skills to the next generation.
Visier has been so successful at helping companies organize their human
resources they have attracted $25.5 million in new financing from investors.2 Visier’s
software will bring even more big data analytical technologies to the human resources
market. HR software that analyzes HR needs such as job analysis, job descriptions,

18
 Chapter 4 @ Matching Employees and Jobs a2

job specifications, job design and redesign, job simplification, and job expansion is
at least an $8 billion market.

&
Case Questions
1. Do you agree with using an employment 4. |f you used Visier services, would you
service such as Visier to help recruit, expect to lay off employees?
y)
train,-and develop your employees 5. Why is forecasting retirements
2. Do you think an outside vendor such as important in regard to the next
Visier can properly match prospective generation of employees?
employees with open jobs?
3. Do you think Visier can complete an HR
forecast for a company?

Case 4.2. Succession Planning:

Developing Leaders at General Electric (GE)
Succession planning requires planning for a smooth transition from one key employee
to another in order to minimize disruption of the organization’s work. Even if you
own your own business, you eventually have to transfer ownership to the next gener-
ation. Having a succession plan is part of forecasting the future human resource needs
of a company. A well-thought-out succession plan can reduce risk within the com-
pany by making sure the company is being led by a top-notch executive. Staff morale
should be increased since the person selected currently works for the company. Hiring
an executive from within will show that all employees who work for the company
have the potential to be promoted.
GE was highly successful under the unique leadership that former CEO Jack Welch
provided. Welch was known for making brash statements to help motivate employees.
In an interview in the Los Angeles Times, Jeff Christian, the CEO of Christian Timbers
Inc., said of Welch,

The winners are the people who make hiring and keeping the best people a top
priority, and that’s exactly what Jack Welch did. ... His primary strategic goal
was hiring the best people around, developing them and training them and
knowing who the stars were.’

On the other hand, Welch could be tough on his employees. He created what was
affectionately called “rank and yank.” His model was that the star employees (10%)
were encouraged to stay at GE. The middle 80 percent were considered the average
employee with potential growth and development. Welch felt the bottom 10 percent
20 Partll @ Staffing

of employees should be encouraged to leave GE. The bottom 10 percent received

counseling on finding their next employer. Although the performance system was
often considered harsh, Welch felt it was transparent, and an honest approach to help
develop employees either at GE or another company.*
The classic case of succession planning took place at General Electric (GE) in 2001.
At that time, Jack Welch had been the CEO at GE for 20 years. Welch had set a suc-
cession plan in place by the mid-1990s. He created a list of 23 essential skills, charac-
teristics, and qualities a CEO should possess. He would move executives into different
positions and strategic business units in an effort to cross train his leaders in all areas
of the company. Jack was left with eight candidates who were all very qualified to run
GE or another large corporation.
Jeff Immelt was eventually selected to succeed Welch, and he has been at the helm
of GE for the last 14 years, The executives not selected were so talented they were
often chosen by other large corporations to be their CEO. Bob Nardelli went from GE
to CEO at Home Depot. He then went to Chrysler. Jim McNerny went from GE to CEO
of 3M, and then he moved to Boeing.
Jack Welch’s succession planning process is the model that many corporations
have used to replace CEOs. The process Welch created led to the creation of a “deep
bench” of talented executives to compete against each other in order to see who
would be the next CEO. The succession plan itself helped GE to develop its top-level
managers.
Welch also started the succession plan many years before he actually retired so he
didn’t have to rush to pick his successor. He challenged the executive candidates with
“stretch assignments” to see who could thrive in increasingly difficult situations. The
stretch assignments were projects the eight candidates were given beyond their normal
skills and abilities. Stretch assignments placed the candidates into new, larger, and
potentially uncomfortable projects and tasks in order to see who could learn to grow
into the next CEO at GE.
In the end, the succession planning process worked for the GE’s Board of Directors.
They were left with a CEO, Jeff Immelt, who has successfully led GE for many years.
Jack Welch retired from GE as planned and has continued to be a key speaker at con-
ferences and training seminars about how to motivate, develop, and promote human
resources.

Case Questions
ile Why do family businesses have to be as 4. Why were the stretch assignments
concerned as large corporations about important to the selection of the new
succession planning? CEO at GE?
Is succession planning part of 9. Find the CEO of a local company and
forecasting human resources? determine how long he/she has been
. Did Jack Welch place great value on the CEO.
human resources at GE?
 Chapter 4 @ Matching Employees and Jobs 21

Notes
1. wwwvisier.com.
2. Shieber, Jonathan, “Combining Big Data and Human Resources Nets Visier $25.5 Million,”
Tech Crunch.com, June 10, 2014.
3. Girion, Lisa, “GE Succession a Leadership Lesson,” Los Angeles Times, December 3, 2000.
4. Welch, Jack, “Jack Welch: ‘Rank-and-Yank’? That's Not How It’s Done,” The Wall Street
Journal, November 14, 2013.
 Recruiting Job Candidates
Case 5.1. The Recruiting Process: The Growth
of E-Recruitment in Recruiting Job Candidates
The most popular place to look for prospective employees used to be classified ads in
newspapers. However, electronic recruitment (e-recruitment) in the last few years has
certainly taken the number one spot for finding new employees.
What are the different type of e-recruitment platforms? They include websites
such as Facebook, Blogs, Google+, LinkedIn, Myspace, Podcasts, Twitter, YouTube, and
Monster.com. Each form of e-recruitment is a growing area for human resources to
find prospective employees.
Companies used to be able to communicate in a downward, one-way fashion when
the only real form of looking for prospective employees were newspaper advertise-
ments. Social media sites such as Facebook, Twitter, and LinkedIn create a more two-
way shared communication process. For example, one human resource manager likes
to review the LinkedIn account of upcoming interviewees. She likes to have a gen-
eral idea of what the interviewee looks like to help greet the person when he or she
arrives at the reception desk at her company. Employers and prospective employees
can engage in a dialogue by interacting online about the specific job opening. Even
simple e-mail exchanges, arranging the date and time for the interview, can create a
bond between the interviewer and the candidate.
Using social media as a recruitment tool does require considering many issues that
didn’t quite exist before the widespread use of the Internet. For example, a positive use
of social media would be a prospect who posts well-written responses using Twitter or
Facebook. Such people might show knowledge or an understanding of the industry for
which they are applying. For example, an applicant might demonstrate the knowledge
to be a sports information director if he or she demonstrates good writing skills and an
understanding of college athletics. A candidate who discusses Adobe Photoshop skills
and experiences would be a potentially good fit for graphic design positions.
However, just as with face-to-face interviews, the HR person wants to be careful about
the legal issues of conducting a search online. Monster.com suggests that HR people use
social media after the first live interview so they don’t make a quick judgment based on
what they see online. Pius, reviewing social media should be conducted at the same time
in the search process for each candidate to be fair in the evaluation process.!
22
 Chapter 5 @ Recruiting Job Candidates

Unlike other platforms, such as Twitter or Facebook, LinkedIn focuses on the busi-
ness environment. LinkedIn has over 364 million members in 200 countries and ter-
ritories. There are over 39 million students on LinkedIn. People who go to LinkedIn
are interested in finding people they have worked with or would like to meet in regard
to their career. Each user maintains an account and approves connections with other
people. A user can ask to form a connection or, likewise, be asked to join someone
else’s connection. The list of connections can be used as a contact list, to follow spe-
cific companies, or to look for jobs, people, and business ideas.’
LinkedIn allows companies to create a job posting with a job description, experi-
ence required, and educational requirements. Employers can also reach out to specific
users to gauge their interest in a job opening. At the same time, individuals can choose
to contact the employer to help show their interest.
When creating a professional network online, the first step is for users to include a
picture that reflects that you are professional in your field. You want to portray your-
self as being a professional. Having an interesting but professional picture can attract
the attention of potential employers. For example, if you were looking for a writing
position, you might wear a large brim fedora hat to show you possess some creative
ideas that could be used in public relations and advertising positions.
Many companies have denied giving a job candidate a position because either they or
their friends have posted embarrassing photos or used improper language. A recent college
senior wasn’t offered a job at an accounting firm because of a picture posted by a friend on
Facebook. Although the picture was only of the two friends sharing a selfie and a drink, the
accounting firm felt the applicant would not be a proper fit.
A second piece of advice is to keep your status area updated with current work, edu-
cation, and experiences. Third, complete all pages about yourself to help prospective
employers learn about you quickly. And fourth, don’t just focus on your latest job. The
employer might like something you did in a previous job or charity where you donated
time.’ One recent applicant traveled throughout Europe right after college graduation.
Upon returning home, he was interviewed by two large insurance companies. The
insurance company recruiters were interested in him because he showed the ability to
travel overseas. The recruiters felt the ability to travel globally would be a valuable skill
for their insurance companies since they had operations in different countries.

.
Case Questions
1. Why is a newspaper classified as a one- 4. Should college students have a
communication vehicle compared toa Facebook, Twitter, or LinkedIn
two-way process, such as Twitter or account?
Linkedin? 5. Review your own Facebook, Twitter,
2. Why would the human resources or LinkedIn account and indicate
department of a company not like to use which of them should be modified
Twitter, Facebook, or LinkedIn? before going on an interview.
3. Why would human resources like to use
Twitter, Facebook, or LinkedIn?
24 Partll @ Staffing

Case 5.2. Internal Versus External

Candidates: Which Candidate Is More Valuable?

Organizational Recruiting Considerations

Organizations need to build a list of internal employees who can be tapped when
high-level employees change companies, retire, or pass away. Much like a baseball
team, there must be good people on the bench in lower-level positions ready to take
the place of players/employees who are no Jonger able to do their job.
Internal recruiting involves filling job openings with current employees or peo-
ple the employees know. Promotion from within means the organization posts job
openings on company-wide e-mail, company newsletters, bulletin boards, and other
internal mechanisms to promote the open positions. Employee referrals are a second
type of internal recruiting. Referrals mean employees are encouraged to refer friends
and relatives to apply for a position.
The advantage of internal recruiting is that it increases employee commitment
and job satisfaction because employees feel they have an opportunity to advance in
the company; the employee already works for the company, which shows interest in
working at the company; the company already has knowledge of the employee's work
habits; and it is often quicker and less costly than a full external search.
The disadvantage of searching to fill positions internally in the company is the
pool of potential applicants is much smaller; there may be better qualified applicants
in the external pool of prospects; employees will feel that they are guaranteed to fill
open positions, which will lead to a lack of new people who can provide new ideas
and creativity; and success in a lower-level position does not mean the employee will
be successful in the higher-level position.
External recruitment also has advantages and disadvantages when a company
is looking to fill a position. External recruiting sources include people who walk in
to the position either in-person or online, recruitment at high schools and colleges,
employment agencies that focus on finding talented employees to match with job
openings, and advertisements online, in newspapers, and through various media.
External recruitment will lead to new people being hired who should have inno-
vative ideas to operate the company. We can also find people who have experience in
the position we are trying to fill. However, new people might cause some disruption
in the way things are normally done, which can cause some conflict. External recruit-
ments can take more time and will cost more money than an internal search. Most
important, the internal candidate might have a nice looking résumé and references,
but the company has no real data to support the assumption the employee is a good
fit for the open position.
Amanda Clark is an internal candidate for an open assistant director position at
the nonprofit community center where she has worked for nearly 30 years. Amanda
has a bachelor’s degree in education and was a program director for teens for 9 months
of the year. She would then switch hats and become the summer camp director for the
remaining three months. She ran the youth theater group for the nonprofit commu-
nity center. She was also involved in finding 50 teenagers to participate in a summer
sport tournament. The list of tasks she completed is extensive and would be hard to
list in its entirety. °
 Chapter 5 @ Recruiting Job Candidates 25

However, Amanda had two male direct superiors. She always got along well with
the director, Bob Gold, and the assistant director, Mike Woods. Bob decided to retire,
and Mike was appointed to be the new director of the Community Center. Mike was
an internal candidate who had spent 25 years preparing to succeed Bob as director.
An external recruitment search began to find a new assistant director. This is
where the case becomes interesting. The nonprofit placed an advertisement to the
public in various local and national newspapers and websites looking for talented
external candidates. But Mike never looked for internal candidates, such as Amanda,
to be promoted to the assistant director position.
An external candidate, Sam Riddle, was hired after a lengthy 9-month search to fill
the position. Sam worked in a management position at a hardware store 1,500 miles
away. He created a hostile work environment, where at least half of the employees did
not appreciate his in-your-face management style.
At the same time, Amanda was sought out by a local for-profit competitor to run its
new youth fagility. She would be in charge of the daycare facility and summer camp.
Feeling overlooked at the nonprofit community center, she was honored to be asked to
work at the local competitor only five minutes away. She accepted the job at the new
for-profit organization. As an external candidate, Amanda was sure she was selected to
use her experience and creativity to help build the for-profit youth facility.
At the nonprofit community center, Sam Riddle lasted about 3 years in his role as
assistant director. He apparently interviews very well, since he was promoted to be a
director at another facility within the organization.
Amanda used her great enthusiasm to build the daycare and camp at the new
for-profit company. She left after about a year due to the lack of ethics on the part of
management. The for-profit was a family-owned business that was generally well oper-
ated. However, there was one family member who helped manage Amanda’s facility
who was hard to manage and would routinely make mistakes, such as leaving children
unattended.
Amanda was fortunate to return to her original nonprofit organization and to
work part-time helping the programs that are most dear to her heart. She was paid an
hourly wage, instead of her previous full-time pay. She applied for the now vacant job
of assistant director. At this point, Amanda is unsure if she is considered an internal
or external candidate at the nonprofit community center.

©
Case Questions
1. Did the original nonprofit appear to 4. At what point(s) was Amanda an
develop internal candidates? external candidate?
2. If the agency didn't develop internal 5. Is it better to hire from within or
candidates, why do you think this would outside your organization?
happen?
3. Did the nonprofit develop and use its
bench strength?
26 PartIl @ Staffing

Notes
1. Berkowitz, Melanie, “Social Media Recruiting: Understand
the Legal Guidelines,” Monster.
com, retrieved September 19, 2015.
2. Archanal, L, V. G. Nivya, and S. M. Thankam, “Recruitment Through Social Media Area:
Human Resource,” ISOR Journal of Business and Management, 2014, pp. 37-41.
3. Kane, Libby, “8 Mistakes You Should Never Make on LinkedIn,” Forbes.com, March 4, 2013.
 Selecting New Employees
Case 6.1.The Selection Process:
Searching for a New Faculty Member...
What Step in the Selection Process Are We in Today?
There are many potential steps in the selection process to complete when conducting
a search process to fill an open position. Most important, companies need to follow
the Uniform Guidelines on Employee Selection Process (UGESP) to avoid discrimi-
natory hiring practices. The guidelines were designed to ensure that organizations
were using nondiscriminatory employment practices so they would be in compliance
under the Civil Rights Act of 1964, often referred to as Title VII.!
The following steps are part of a typical employee selection process:

ie Application and/or résumé collection and review.

Preliminary screening. May include a quick look into background check.

Organize initial interview with promising candidates.

Complete written and physical tests if necessary.

Secondary interviews for candidates who passed the first interview.

ALS
ee
wae
See Detailed background check of references, criminal history, drug screening, and
web searches if appropriate to the position.

Position offered to selected candidate. If position is accepted, prospect is hired

and process is ended. If position is declined, search committee decides whether
to offer position to second highest rated candidate.

Small-Time College is looking for a good accountant that has the right personality-
job fit to complement its existing accounting faculty. Accounting positions often
require the accountant to work closely with financial statements, such as income

27
28 Part ll @ Staffing

statements and balance sheets. However, Small-Time College also wants to hire a pro-
fessor who likes to build close relationships with students and help them be involved
in donating time to nonprofit organizations. The college intends to hire a CPA to
be sure there is a good ability-job fit and hopes the new professor will have a good
person-organization fit, which means the new professor will fit into the culture of the
entire company.
The following are some of the selection steps taken at Small-Time College in its
search for a new full-time accounting professor.

il, A search committee is formed to search for the new accounting professor.
Professors from the Division of Business and a professor from outside the
division are included on the committee.

Search committee works together to write a job description and an advertise-

ment for the open accounting position.

HR places the advertisement in various media, such as Monster.com and

Higherjobs.com. The advertisement’s job was tailored to find qualified applicants
who could teach upper-level accounting courses on-campus and off-campus,
online and face-to-face, while also participating in college-wide activities.

ASSISTANT PROFESSOR OF ACCOUNTING

Apply for Position
Institution: Small-Time College
Location: Carlsbad, CA
Category: Faculty—Business/Accounting
Posted: 06/18/2016
Application Due: Open Until Filled
Type: Full Time

Assistant Professor of Accounting

The Division of Business at Small-Time College located in Carlsbad, CA, invites appli-
cations for the position of full-time, tenure track Assistant Professor of Accounting
Faculty position reporting to the Chair of the Division of Business.
This faculty position is primarily responsible for traditional and online course develop-
ment and instruction in the Accounting Bachelor of Arts Degree at the traditional based
campus programs, the online and F2F undergraduate off-campus degree completion
programs, and the Accounting track in the MBA program. Courses can include, but are
not limited to, Accounting Information Systems, Advanced Cost Accounting, Auditing,
and Financial Management. Potential graduate-level courses include Corporate Tax and
Nonprofit and Government Accounting.
 Chapter 6 @ Selecting New Employees

The faculty member is also responsible for actively participating in all aspects of col-
lege community (teaching, scholarship, and service) in alignment with the faculty hand-
book and to serve a primary role in the governance and organization of the program,
including academic planning, curriculum development and review, advising and program
improvement.

Duties and Responsibilities

Assumes responsibility for assigned course instruction online, off-campus, and
on-campus in both undergraduate and graduate courses.
Facilitates learning and caring environment, which encourages critical thinking,
investigation, self-direction, and respect for the uniqueness of each individual.
Leads and/or participates in course development, curriculum planning, implemen-
tation, and evaluation.
Completes required CPE and maintains current license.
Attends Business Club meetings with senior accounting students.
Assists students in finding internships at local area CPA and other firms.
Coordinates students to perform internship and community service at the Volunteer
Income Tax Assistance (VITA).
Supports the collection of IACBE results related to the accounting students on cam-
pus and off-campus.
Demonstrates knowledge of and implementation of the general education philosophy.
Serves on College committees as appointed or elected.
Participates in peer, self, and course review.
Promotes the mission and purposes of the College in various internal and external
activities.
Evaluates student progress and maintains appropriate records.
Advises students in course-related matters and makes referrals to appropriate
resources.
Remains current with the trends, issues, and practices in the discipline.
Actively involved in professional development and scholarly activities.
Assists the Chair of the department with administrative tasks as needed and
appointed.
Participates in recruitment and retention efforts, specific to the program, as needed.
Performs other duties as assigned.
Contributes to the evaluation of student academic achievement and other evaluative
processes of the College.
Adheres to College and System policies and procedures as indicated in the Faculty
Handbook, College policies, and in other applicable regulatory documents.
Upholds, promotes, and demonstrates behaviors consistent with the Mission and
Core Values (Faith, Community, Justice, and Excellence] of the College.

Minimum Qualifications
CPA or CMA {current license} with a Master's degree in the accounting field. Must have
significant experience in the field of accounting, possess effective oral and written
communication and interpersonal skills, documented excellence in online teaching,

(Continued]
30 Partll @ Staffing

(Continued)

and be committed to the concepts of innovation and excellence in accounting education.

Candidate must maintain active and current membership in professional and commu-
nity organizations. The candidate must effectively use Microsoft Office Suite software
and other accounting software.

Preferred Qualifications

Doctorate degree [related field}. College-level teaching experience in accounting and

experience with web-based course delivery and instructional technology are highly
desirable. Learning Management System experience preferred, Moodle experience
highly preferred. Ability to use Sage 50/QuickBooks and SAP software is very desirable.

To Apply
Send cover letter, transcripts, CV/résumé, a statement of teaching philosophy and con-
tact information for three (3} professional references (as Word or PDF attachments]
via email to: bannisterm(@.edu or by regular mail to Dr. Maxwell Bannister, Chair of the
Division of Business, Small-Time College, 291 Golf Ball Street, Carlsbad, CA 01050.
Review of applications begins immediately and will continue until the position is filled.

4, Résumés (in education they are called CVs) are collected and distributed among
the committee members.

Preliminary screening requires weeding out the applicants who don’t meet the
minimum qualifications. The process includes a meeting to drop those candi-
dates who didn’t have a CPA or a Master’s in accounting. The next step could be
to drop those candidates who lack teaching experience. There is a great deal of
debate deciding on the top 10 candidates if you have a pile of about 100 appli-
cants. The top 10 applicants are then called by the HR Department to see if they
are still interested in the position and if they would be able to accept the position
within the salary range the professor is expected to be paid. The salary range is
determined by the salaries offered to similar faculty at Small-Time College.

Selection interviews: The top 10 candidates are often reduced to the top three
to five candidates if they are still interested in the position and the salary range.
The final five candidates are then called to arrange a date and time for their
initial interview. Sometimes, all the candidates are interviewed on the same
day. That makes a long day for the search committee and HR. Otherwise, it is
important to interview candidates in as few days as possible.
Conducting the interview actually starts before the actual interviews. The com-
mittee often creates a list of appropriate questions that will be asked to all appli-
cants. Each person on the committee often asks specific questions related to his
or her personal area of expertise (which could be teaching accounting courses,
 Chapter 6 @ Selecting New Employees

experience advising students, or working with students on projects outside the

classroom). This ensures that all candidates are asked the same questions.
Once the interview begins, it is important to review the realistic job preview
(RJP) and make sure the candidate understands the nature of the job. The RJP is
a review of all of the tasks and requirements of the job, both good and bad. The
committee will want to make sure the candidates have as much information as
possible about the job so they are aware of the tasks to be completed if they are
offered the position.

8. Background checks (which can include reference checks, credit checks, crim-
inal background checks, and web checks) need to be used in a professional
and ethical manner. For example, reference checks should not be conducted
without the consent of the candidate. It is important to research only for rel-
evant data. There is no need to dig for information beyond the scope of the
search. Keep the search related to the specific information for the job that is
being filled.”
Reference checks often confirm a candidate did work at a previous organi-
zation. But it is important to understand that candidates don’t pick references
unless they are most likely going to give them a positive referral. Web searches
on sites such as LinkedIn have become more popular as a source for checking
the candidate’s background and references.

9. Selecting the candidate and offering the job often means the top two candi-
dates are asked to return for a second interview. They most likely will meet the
dean and Small-Time College president. The final decision normally rests with
the college president, who decides what is best for the college. Offering the
job to the candidate is not quite as simple as it sounds. The candidate might
decide to stay with his or her current employer or might disagree on salary, a
certain benefit, or even the job itself. If the first candidate decides not to accept
the position, the search committee, dean, and president have to decide if they
would like to offer the job to the second candidate or do an entirely new search.

@
Case Questions
1. What would be a good personality fit for 4, Which step did the case skip in regard
an accounting professor at Small-Time to the steps in the selection process?
College? 5. Why are background checks harder to
2. Should the preliminary screening conduct than it might appear?
process result in a top 10 of applicants?
3. What is the role of the Uniform
Guidelines on Employee Selection
Process (UGESP}?
32 Partll @ Staffing

Case 6.2. Looking for

“Organizational Fit”: Walter’s
Unstructured Interview at Google
Walter was proud to earn his bachelor’s degree in computer science from Small-Time
College in California. That was almost three years ago, and he felt as if it was even
longer since the field of computer science changes so quickly.
Walter was able to find a nice “Comp Sci” job at Small-Time College. He inter-
viewed for the job and remembers the key questions were what his greatest strengths
(which he answered as programming skills) and his greatest weakness (he didn’t have
one prepared to discuss) were. Walter considered this a structured interview since
one of the interviewers from Small-Time College said she was responsible for asking
certain questions. After working for three years at Small-Time College, Walter felt he
had a good personality-job fit, since he was a valuable member of the Information
Technology Department. Walter also felt he had proven he had good ability-job fit,
since his three years of experience as a computer programmer at the college proved
he had the skills to complete the job. Most important, Walter felt he had a perfect
person-organization fit, since he was liked by everyone at the college and fit in very
well in the educational culture.
Recently, Walter was contacted by someone on LinkedIn to apply for a new posi-
tion at Google. Like everyone else, Walter had heard stories that Google was a great
place to work. He even watched the movie The Intern to get a better glimpse of what
takes place at Google.
Walter also researched the company (using Google Search) and found out Google
uses a unique way to find and match people with jobs at the amazing company.’
First, Google used its extremely creative way of thinking to create a vice-president
of people operations. Like most companies, Walter's current employer calls this posi-
tion the vice-president of human resources.
Second, Google uses its data analysis skills to analyze vast amounts of data about
what works and what doesn’t work during the hiring process. One result they found
was that interviews had a zero relationship with the success the person actually had
on the job. Consequently, Google doesn’t believe in the traditional metrics used in
the hiring process. These traditional metrics include GPA, SAT scores, or the prestige
of college the candidate attended. Instead, creative companies like Google measure
a candidate on behaviors, such as their level of happiness, ability to work well with
other people, if they like a challenge, if they seek information, and if they are willing
to adapt.*
Walter spoke to the assistant in people operations and set up an interview for
one week later. He was warmly received by Google and quickly fell in love with
the colorful and wide open layout of the headquarters. In a casual and relaxed
atmosphere, he sat down with three different Google employees and basically
explained how he grew up in California and what led him down the path of
computer science.
 Chapter 6 @ Selecting New Employees 33

Walter thought he might be asked one of those out-of-the-box interview questions,

such as how many gasoline stations would you expect to find in a city of 160,000
people. But his research also uncovered that Google felt these types of questions were
biased since they tended to just make the interviewer look smart since they had time
to work out the answers. |
Since Walter wanted to be a good match, he went with the flow of the interview
and became much more relaxed than he could remember in his interview with his
current company. He expressed how he liked being happy at work, enjoyed program-
ming computers with a team of employees, and especially enjoyed interacting with
clients to help them solve their problems. Walter enjoyed the unstructured inter-
view and felt he was doing a good job interacting with the Google interviewers. He
expected the Google interview was going to a least be a semi-structured interview,
which would combine some preplanned and some unplanned questions. However,
the Google interviewers appeared to not have any prepared questions and instead
asked all unplanned questions.
Walter went on to explain how he had been promoted three times in three years
and enjoyed the challenge each positioned offered. He liked the “go for it attitude” at
his present employer. Walter also knew from his research that Google liked outgoing,
happy employees that worked well with their fellow workers and customers.
In the end, Walter did not get the job for reasons he never learned. Although
he was disappointed, he also knew that Facebook once turned down Brian Acton
for a job and he went on to co-found WhatsApp which he sold to Facebook for $19
billion.’ Walter hoped a similar fate was in his future and he could one day sell his
ideas to Google.
Walter went back to his current job with renewed passion and energy. He was
excited to have spent time at Google and hoped to bring back some of what he
learned and apply it to his own job and division. He also intended to work closer than
ever with his own Human Resources Department to look for opportunities in his
current company. He was hoping to find a “fast track” program that would speed up
his own development, so he could create a more open and creative company culture
along the way.
Walter always wondered what his life would have been like if he had been hired
by Google. He thought he was going to be an excellent fit in the Google organiza-
tional culture. He felt he had a good personality-job fit since he demonstrated in the
interviews that he was an outgoing computer programmer who would work well with
Google’s unique corporate culture. Walter also felt he was a great candidate in regard
to ability-job fit since his three years of experience in his current programming job
showed he could apply his technical skills as a computer programmer in a work envi-
ronment. Walter also felt he was a good person-organization fit since he would work
very well within Google’s creative-organizational culture. In the end, Walter was
happy to grow from the experience of trying to get a job at Google. He definitely had
more appreciation for his current job since his employer had been smart enough to
give him a job three years before. He was ready to repay that by doing an excellent
job going into the future.
34 Part Il @ Staffing

Case Questions
1. What do you think the vice president of . Design a form to help Google compare
people actually does at Google? different candidates. HINT: You can
2. Did Walter experience a structured, list some different names of people in
semistructured, or unstructured the rows. The column headings need
interview when he first left college? to represent the areas where Google
is looking for in an interview (Happy
3. What are your own greatest strengths Employees, Employees Willing to Take
and weaknesses as a prospective ona Challenge, Creative Employees, etc.]
employee?
. Why-do you think Google felt Walter
4. How would you answer if someone in was not a good organizational fit for
HR asked you an unstructured question the company?
such as how many gas stations there are
in acity of 160,000?

Notes
1. http://www.uniformguidelines.com/uniformguidelines.html.
2. Lu, Andrew, “S Tips to Keep Reference Checks Legal,” FindLaw.com, December 12, 2012.
3. Nisen, Max, “Moneyball at Work: They've Discovered What Really Makes a Great Employee
at Work,” Business Insider, May 6, 2013.
4. Nisen, Max, “Google HR Boss Explains Why GPA and Most Interviews Are Useless,” Business
Insider, June 19, 2013.
5. Wood, Zoe, “Facebook Turned Down WhatsApp Co-Founder Brian Acton for Job in 2009,”
The Guardian, February 20, 2014.
DEVELOPING
AND MANAGING
|Lav
Ml
r
Chapter 7. Training, Learning, Talent Management, and
Development

Chapter 8. Performance Management and Appraisal

Chapter 9. Rights and Employee Management

Chapter 10. Employee and Labor Relations

 Training, Learning,
Talent Management,
and Development
Case 7.1. The Need for Training and
Development: Should You Use Massive
Open Online Courses (MOOCs) Such as Coursera
and Udacity to Recruit and Retain Talent?
Juan Salmeron graduated from Small-Town College two years ago and was excited
to land a job in customer service with AT&T. He rose quickly in stature at the local
AT&T office and became the go-to guy when someone needed to understand some
new technology.
After 2 years, Juan figured he was marketable and wanted to see if he could land a
larger position with another firm. He worked hard on his résumé, cover letter, refer-
ences, and copies of his college transcripts.
Juan interviewed well at California Mutual Insurance (CMI), and his dreams came
true! Juan was hired as a corporate trainer. His job responsibility was to teach the
insurance employees at CMI about how to use the latest technology to improve their
own performance on the job.
Thus, Juan had to develop a process to help teach the insurance employees about
technology in the workplace. The obvious option was to actually hold courses at
CMI's headquarters. Realistically, Juan could offer two or three courses a week. But
each employee would have to leave desk and job duties to attend the face-to-face (F2F)
training courses.
Juan could also try to hire experts in technology topics, and they could then
develop a course to train the insurance employees. However, this would require extra
financial costs to hire the expert and videotape the lectures. Juan could also decide to
hold courses in a synchronous or asynchronous distance learning format. Synchronous

36
 Chapter 7 @ Training, Learning, Talent Management, and Development 37

distance learning occurs when the trainer/teacher and his employees/pupils interact in
different places, but during the same time. Thus, students and the trainer might select
Tuesday night as the time when they hold the training class. The trainer could be on
his or her laptop computer at home, and the employees could access their training
course at night. On Tuesday night, there would be a specific class where the trainer
and all the students would meet online and discuss the material to learn. Synchronous
learning would require the trainer and employee to meet at a specific time.
Asynchronous distance learning occurs when the trainer and the employee interact
at different times. Students enrolled in an asynchronous course are able to complete
their work within a certain time period. Thus the employee would access the learning
site within a time period such as one week. The employee would review the material,
watch videos, and take any exams, as necessary. Thus, the trainer and employee would
have more freedom to complete assignments within a pre-established time period.
As a third option, Juan could use massive open online courses (MOOCs) offered by
online providers such as Coursera and Udacity. MOOCs are free online courses offered
by experts at no cost. MOOC course topics range from law, education, engineering,
management, and all areas of technology. As Coursera explains: “Coursera is an edu-
cation platform that partners with top universities and organizations worldwide, to
offer courses online for anyone to take, for free. Learners can choose from hundreds
of courses created by the world’s top educational institutions. Courses are open to
anyone, and learning is free.”!
For example, Juan could encourage his employees to take a course on Gamification.
Gamification is a course offered at the University of Pennsylvania, through Coursera,
and taught by Associate Professor Kevin Werbach from The Wharton School of
Business. The initial section of the course had 80,000 students followed by a section
of 63,000 students.”
Gamification is taught in four to eight weekly modules and is offered in different
languages. Gamification is the adaptation of digital game technology applied to human
resource and other business issues. Thus, Juan’s employees could learn to develop a
game, whereby their customers are rewarded points or in-game rewards for checking
their insurance policies, investment accounts, and so forth on a regular basis. The
goal is to make “the game” addictive so that customers check their own accounts on a
more regular basis. The idea is to simulate games such as Angry Birds where customers
actually want to check their accounts.
Many people in HR feel MOOCs could be a major part of recruiting, training, and
developing employees with online degree certifications.* Udacity has a program that
allows employers to review the student résumés. Over 350 large organizations, such
as Facebook, have paid Udacity and Coursera to match them with high performing
students.*
MOOCs can have thousands of students sign up for a course online. Students often
earn a certificate for completing the course. HR departments can also develop their
own certificate or reward for their employees that complete a MOOC. Companies such
as AT&T are using Udacity’s MOOCs to train their employees in new areas of science
and technology. Starbucks offers employees free tuition to participate in Arizona State
University’s online courses.
38 Part Ill @ Developing and Managing

HR departments are also interested in recruiting people who have completed

MOOCs. They were originally interested in students that completed a science- or
technology-related course. Tech-oriented companies such as Amazon, Facebook, and
Google have paid Udacity and Coursera to match them with their top students.

Case Questions
il Would Coursera or Udacity be a 4. Should Juan use a synchronous or
viable option for all human resource asynchronous training format if he
departments to train their employees? decides to use a MOOC to train his
2. Would HR be eliminating themselves - employees?
from their own job if they use Coursera? 9. What are two advantages and two
3. Would MOOCs be a good recruiting disadvantages of gamification of
ions?
method for attracting top talent? the HB functions?

Case 7.2. Talent Management and

Development: The Talented Harry Saunders’s
Career Development at the Big Buy Supermarket
Developing talented employees requires planning on the part of human resources.
The career of Harry Saunders is a good example. Harry progressed in his career by
using three options: formal education, experience, and employee assessment.
Harry’s father worked in the marketing department at The Big Buy Supermarket
chain in Florida. With a little help from his father, Harry was able to get a job as a bag-
boy during high school. Harry enjoyed using the cash register since he liked numbers.
Harry also displayed social skills since he liked talking to customers.
After high school, Harry went to college and tried different business majors until
he concentrated on accounting. Harry knew he had knack for numbers, and account-
ing came easy to him. After graduating from college, Harry was offered quite a few
positions to work for local and national accounting firms. At such a firm, he would
go on the road and conduct audits of his clients’ accounting books. He would travel
quite a bit—but he would be well paid and eventually would become a certified public
accountant (CPA).
However, the HR Department at The Big Buy had no desire to lose an employee it
felt had the potential to be a top-level manager. Thus, HR offered him a position in
the accounting department at a competitive salary with the CPA firms. Since Harry
liked working at The Big Buy, and even followed in his father’s footsteps, he accepted
the position.
 Chapter 7 @ Training, Learning, Talent Management, and Development 39

Harry enjoyed organizing the accounting department at The Big Buy for nearly a
decade. The supermarket chain grew to more than 100 stores. Harry felt he needed to
get a graduate degree in marketing to help further his rise in management. The Big
Buy offered 100 percent tuition reimbursement. It took Harry 2 years to complete his
MBA in marketing.
After 20 years in accounting, Harry felt he was tired of running the same old
accounting data. He was not as marketable as he once was because he had never
become a CPA. He also missed working directly with customers.
Thus, Harry contacted HR, and they worked closely with him to find a new spot
in the organization. Harry took a psychological test, which is a series of multiple choice
questions about what motivated Harry in a work environment. The test results indi-
cated Harry was equally happy working with data and people.
Harry was promoted to the new position of database marketing manager. In that
position, Harry would work with large amounts of sales data that were being generated
by the computer systems at the 100-plus stores Big Buy owned. Harry’s job would be to
analyze sales data to find products that were selling unusually well or poorly at each
of the stores. Harry hired two young computer science majors to run the computer
programs, sort the data, and help Harry makea weekly presentation to senior manage-
ment about the results of the data.
Harry felt a strong resurgence in his career. He was thrilled to be working with cus-
tomers again. He often visited stores to ask customers about various food items. He felt
this boots-on-the-ground strategy would help him to better understand the overall
sales data produced by his two employees back in the home office.
Harry became a popular speaker at supermarket conferences, as mining the data
from large computer systems was an increasingly important task for all supermarket
chains. Harry used his mathematical skills honed by a decade in accounting to under-
stand the trends in food shopping. Harry was the first person to create a grocery store
customer loyalty card, where shoppers paid $20 a year for the right to get lower prices
on selected products. The idea of shoppers paying for a membership to buy groceries
at a traditional supermarket was unheard of at the time Harry tested the idea. The
result was that the customers of The Big Buy loved paying for the card so they would
get lower prices on selected items throughout the store. Harry and his team could
better track customer purchases and buying habits because shoppers were using their
Big Buy card.
Harry took a few quiet moments to review his career by using the four stages of
career development: Exploration, Establishment, Maintenance, and Disengagement.
He felt fortunate to have started his career in the exploration stage by considering
different job opportunities after he finished college. He experienced the establish-
ment stage in his career by working in the accounting department for what felt
like a long time—20 years. He feels refreshed to have transferred to marketing and
has found the whole process of tracking customers a great part of the maintenance
stage in his continued career at The Big Buy. Harry also felt he was in no rush to
disengage from the company anytime in the near future. With the full support of
his wife, Harry plans on working at The Big Buy instead of taking any type of early
retirement offer.
40 Part Ill @ Developing and Managing

Case Questions
{fe How did Harry and HR use formal that occurred as a result of the
education to further his career? organizational career planning process
at Big Buy?
. How did employee assessment help
Harry to advance? . Why did Harry’s attitude and
. Explain how Harry went through performance dramatically change after
the career stages of Exploration, changing from the accounting to the
Establishment, Maintenance, and marketing department?
Disengagement.
. What are some of the individual
and organizational consequences

Notes
1. https://www.coursera.org/about/.
2 . McWilliams, Julie, “Coursera at Penn Surpasses One Million Enrollees,” Penn Current, May 9,
2013.
3 - Quinn, Jody, “Mining the MOOC: HR Looks to Online to Recruit and Train Employees,”
Skilled Up.com, August 25, 2014.
4. Wheeler, Kevin, “Why MOOC'’s Might Change Your Recruiting Methods,” ERE Media, March 4,
2014.
 Performance Management
and Appraisal
Case 8.1. Why Do We
Conduct Performance Appraisals?
Jennee LeBeau and the Case of the
Missing Performance Appraisal System
Jennee LeBeau was very excited to be hired as the director of human resources at
Sunshine Hotels. Her office was located at the Main Island Hotel. Jennee spent her
first year at Sunshine Hotels getting used to the processes used by HR. She spent most
of her time in her office at Main Island Hotels. She didn’t get to visit the other two
Sunshine Hotels very often. Jennee’s employees in HR like her hands-off supervisory
style. However, they also feel she would be an even better supervisor if she left her
office and interacted with the employees more often.
Jennee had spent the last 7 years as the assistant director of human resources for
a chain of 10 fast-food restaurants. She figured being in charge of HR for a growing
chain of three hotels would be similar to her experiences working in the fast-food
industry.
While working in her office, she noticed Sunshine Hotels didn’t conduct perfor-
mance appraisals. Jennee thought performance appraisals (PA) were a common pro-
cess in all companies. She was quite shocked at finding such a review process was not
in place at Sunshine Hotels since they have nearly 30 employees. She decided the hotel
chain was not overly concerned with evaluating employees in their first two hotels
since the employees were mostly family and friends. But the addition of a third hotel
has forced the Sunshine Hotel owners to create more HR policies, rules, and forms to
make sure they are following all the laws of HR.
Jennee did some research and found that a performance appraisal is an ongoing
process of evaluating employee performance. However, it is also a tool of the large

41
42 Part Ill @ Developing and Managing

process of having a performance management system, which is the process of identify-

ing, Measuring, managing, and developing the performance of the human resources
in an organization. Thus, a PA is really a mechanism to help evaluate employees so
they can develop into larger roles and to ensure the success of the company going into
the future.
The good news is that Jennee figured out she could start from scratch and develop
her own performance management system (PMS). She figured she could set up an
entirely new PMS. PAs of individuals could be part of an ongoing process of evaluating
employees.
Jennee has to decide what will be included in her new PMS. She wants the PA to
collect valid information. That means what she measures must be true and correct. She
wants to be sure to measure the performance process. Although Jennee wants to col-
lect valid information, she also has to be concerned that the process isn’t overly long
or costly. She figures she can keep costs lower by emailing the PA to each employee to
reduce mailing costs. She also wanted to use a multiple choice style PA so she could
easily quantify the results.
The PA also has to be reliable. She has to trust that the performance data collected
are consistent and that the PA works the same each time she uses it.
Jennee wants the employees to accept the process as important to their own career
development. Acceptability means that the use of PA is satisfactory or appropriate to
the employees that will use the PA to improve their work performance.
Jennee also wants to develop a process that would not be overly expensive or time
consuming to implement. If the PA is overly long to complete, then the manager and
employee will not use the PA as a tool to improve performance.
The PA has to be specific about an employee’s job performance so that it is a useful
instrument for improving areas that need development for that specific employee.
Another important goal is the PA has to help achieve the mission and goals of
Sunshine Hotels. Completing the PA process should help employees better understand
what Sunshine expects from them and how they can complete their own job to help
the company fulfill its mission.
Jennee is starting to realize that she has walked into a very large project in design-
ing a PMS from scratch. She is starting to realize she will need to organize a committee
to help develop the process, especially the PA form. In answering her own questions,
she realized she will be putting together a PA that Sunshine employees will be using
for the first time. Employees currently receive a straight raise across the board. If the
owners of Sunshine Hotels determine everyone deserves a 3 percent raise, then all
employees get the raise irrespective of their own work performance. A new perfor-
mance management system and performance appraisal process will most likely make
it easier to administer raises based on the rating each employee receives as part of the
process. However, the employees might prefer the across-the-board raises rather than
having to personally earn their raises.
Jennee decided to create a first draft of her performance appraisal form. She can
show this draft to her committee. The following is Jennee’s performance appraisal:
 Chapter 8 @ Performance Management and Appraisal 43

PERFORMANCE APPRAISAL FORM

NAME:
HOTEL:

DEPARTMENT and JOB TITLE:

DATE OF APPRAISAL:

FROM: TO:

Employee Signature

Employer Signature

Needs
eee : Unsatisfactory

Demonstrates
Required Job
Knowledge

Quality of Work
& Productivity

Makes Effective
Decisions

Builds and
Maintains
Relationships
With Others

Communicates
Effectively

Exhibits
Supervisory
Abilities

Overall
Performance
Appraisal Plan
of Action
44 Part Ill @ Developing and Managing

Case Questions
ile What is the real goall(s) of a performance . Complete the performance appraisal
appraisal? form in the case using Jennee
LeBeau as the employee you are
How can Jennee be sure to collect
valid and reliable data with her new
rating. Assume you are Patrick Staal,
performance system? who is the chief financial officer (CFO)
who is rating Jennee’s first year of
How can Jennee get the employees to performance.
accept the process as important to their
own career development?
. Can Jennee develop a process that is
not overly expensive to conduct with
employees?

EMPLOYEE PERFORMANCE APPRAISAL FORM

NAME: Jennee LeBeau
HOTEL: Main Island
DEPARTMENT & JOB TITLE: Director of Human Resources
DATE OF APPRAISAL:
FROM: January 1, 2016 TO: December 31, 2016
Employee Signature: Jennee LeBeau
Supervisor Signature: Patrick Staal

Demonstrates
Required Job
Knowledge

Quality of Work
& Productivity

Makes
Effective
Decisions

Builds &
Maintains
Relationships
With Others
 Chapter 8 @ Performance Management and Appraisal 45

. Needs
Exceptional | Successful Improvement | Unsatisfactory

Communicates X
Effectively

Exhibits X
Supervisory
Abilities

Overall Jennee As the Jennee Jennee will

Performance LeBeau has | Director of needs to participate in
Appraisal Plan | beenthe HR. Jennee develop better | team building
of Action Director is well liked. social skills. sessions to
of Human However, Developing improve her
Resources there is better social communication
for the room for skills will and
last year. improvement | help her to supervisory
She has since she improve her skills.
excellent spends most | communication
knowledge of the timein | and
of the her office. supervisory
human abilities.
resource
concerns at
Main Island
Hotel.

Case 8.2. Performance Appraisal Problems:

The Trouble With Performance Systems
It is unfortunate that employees fear their performance appraisal since the goal of
a performance management system is to help employees develop. However, sitting
across a table from your manager and discussing your performance record is most
likely going to be a high-stress situation.
Janice Flahive didn’t look forward to her performance appraisal. As an advertising
salesperson for her local newspaper, the Miami News, it was Janice’s job to sell adver-
tising space in the newspaper. Her performance was mainly based upon how much ad
space she sold. Janice felt she should have also been evaluated on customer satisfac-
tion, creating new accounts, or developing relationships with prospective businesses
that could lead to future sales opportunities. Instead, Janice’s performance appraisals
usually ended up being a one-way communication process where her employer criti-
cized her for not selling enough advertising space.
The PMS process is full of potential problems if it is not administered properly.
Many of these problems occur because managers are not properly trained to administer
46 Part Ill @ Developing and Managing

a performance management system. The lack of training can lead to “rating errors,”
where one manager grades employees easier than a fellow manager who is a tougher
grader. The result of inconsistent grading can lead to star employees receiving the
same grades as weaker employees.
Poorly trained managers do not provide continuous feedback to their employ-
ees. Feedback is provided only during the performance appraisal meeting. Managers
need to provide performance feedback more often and document their interactions
with the employee. It cannot be stressed enough that managers need to document,
document, and collect even more documentation on each employee under their
supervision. Documentation is needed to support strong employees for raises and pro-
motions. Even more important, documentation is critical if an employee needs to be
reprimanded or fired as a result of the performance appraisal.
Much in the manner of Janice’s experience, performance appraisals often fail to
critique the employee in all areas of performance. Janice’s job is in sales, which makes
it easier to evaluate her in that area since sales can be quantified—she either makes her
sales quota or she doesn’t. However, Janice still deserves to be evaluated on qualitative
areas such as customer service skills or leadership ability, which are often not able to
be quantified.
Janice’s performance appraisals should help her to develop into a better salesper-
son and potential management leader. It appears that Janice’s performance appraisal
is a meeting that tends to discuss her past performance. Instead, the meeting should
help Janice to develop a performance plan with specific goals for the coming year.
One of the more controversial rating systems is the ranking method. Ranking is a
performance appraisal method that is used to evaluate employees from best to worst.
At the Miami News, Janice’s office is evaluated using the ranking system. Since the
rank order is posted in the office, Janice knows she is currently seventh on the list of
10 employees. The list is as follows as it is displayed outside the human resources office:

1. Samuel Garcia

2. Rosa McGowan

3. Meghan Shotland

4. Albert Smithfield

Jerry Jones

Samantha Barron

Janice Flahive

Karreem Rush

oO
uw
PND
Monique Wayne

10. Sarah Badlementi

Janice is concerned that her company will decide to keep the top three star employees,
try to develop the next three employees, and try to lay off the bottom four employees.
 Chapter 8 @ Performance Management
and Appraisal 47

Although there are many potential problems with a PMS that is not well organized,
such a system is still very much needed in all organizations. Dr. Samuel Culbert, pro-
fessor of management from UCLA, does not believe in the performance review; he
supports a performance preview. This would be where Janice and her manager would sit
down and together discuss how they can each help improve her overall performance.
Janice can write “I” statements such as, “I will increase the amount of time I spend
actually selling my products.” Or, her employer might say, “I will check in with Janice
on a monthly basis, instead of every six months.”
Another option for improving the performance appraisal system is to develop a
team of people to review the employee. The traditional method is for the direct super-
visor to evaluate his or her own employee. However, a more comprehensive 360-degree
evaluation will analyze individual performance from many sides—from the supervi-
sor’s viewpoint, from subordinates’ viewpoints, from the customers’ viewpoints, from
peers’ viewpoints, and from a self-evaluation. Unfortunately, it will take extra time
and money to,collect data from all the different people who would be involved in
that type of evaluation. However, the 360-degree evaluation might be worth the time
and effort to help the employee develop under the guidance of multiple stakeholders
instead of just the supervisor’s.

8
Case Questions
|. Why are there problems with most 4. What are the positive and negative
performance management systems? aspects of using aranking method at
ee : sea :
2. What is the potential problem with a soe ee ee
performance review conducted bya 5. What type of PA do you or did you have in
team of managers? the company you work or worked for?
3. Why is an “|” statement a good method
for developing a positive PA?

Note
1. Culbert, Samuel A., “Get Rid of the Performance Review! It Destroys Morale, Kills Teamwork
and Hurts the Bottom Line. And That’s Just for Starters,” Wall Street Journal, October 20,
2008.
 Rights and Employee
Management
Case 9.1. Coaching,
Counseling, and Discipline:
HR’s Role—Document, Document, Document
Andrea Watson works in the small human resources department at ABC Fitness Center.
There are currently about 50 employees working at ABC Fitness. Andrea enjoys the
process of hiring and providing an orientation program for new employees. However,
she does not like the responsibility of firing employees when they do not fit into the
culture at ABC Fitness.
To overcome her own hesitation with firing employees, Andrea reviewed the coach-
ing process, counseling process, progressive discipline process, and the tests for just cause
used in disciplinary investigations. Andrea started to study and implement these pro-
cesses about 2 years ago at ABC Fitness.
ABC Fitness uses the coaching process to give employees feedback to improve their
performance over time. Coaching involves four steps: (1) describing the current perfor-
mance, or what is currently being done by the employee; (2) describing the desired
performance, or what the manager wants the employee to change; (3) getting a verbal
commitment from the employee to change; and (4) following up to make sure the
employee is behaving in the desired manner. Coaching is often associated with sports
coaches such as Mike Krzyzewski at Duke University or Bill Belichick with the New
England Patriots. However, coaching can be just as effective in a business situation
as in sports. Employees in every organization need to receive positive feedback and
support while doing their jobs.
Counseling is provided for employees who are not currently working at an accept-
able level. Guidance is provided to help get the employee back on track. Management
counseling involves giving the employee feedback so he or she knows a problem is
affecting job performance. Employees with severe personal problems can be referred
for help to the employee assistance program (EAP) to get assistance.

48
 Chapter 9 @ Rights and Employee Management 49

Unfortunately, some employees just cannot get their work performance to an

acceptable level. Progressive discipline is then used to try to solve minor disciplinary
infractions. Progressive discipline is a series of steps to help provide discipline:

Step 1. Informal talk

Step 2. Oral warning

Step 3. Written warning

Step 4. Suspensions

Step 5. In some cases, demotion or transfer, or

Step 6. Dismissal

A key element in disciplinary investigations is just cause. Just cause is a set of

standards used to test for fairness in an organizational setting to ensure that any
disciplinary action taken has reasonable cause. The tests attempt to ensure that the
individual knew what the rules were, that there was reasonable evidence or proof that
the person violated or disobeyed the rules, and that, if the rules were violated, the
disciplinary action was appropriate and fair.
Andrea wasn’t sure if all of these processes were conducted in the case of Derek
Struble. Derek was an employee who worked at ABC Fitness for the last 20 years.
He didn’t exhibit the greatest level of enthusiasm with the health center’s fitness
members, but he was also never rude. He assisted fitness members whenever they
needed help.
Andrea reviewed Derek’s file and found he was in a graduate, nonprofit manage-
ment program, which was supported by ABC Fitness since it paid half the tuition.
His file contained limited documentation that Derek was at times not as “cheery” or
“happy” as one might expect at a fitness center. The file mentioned that Derek didn’t
generate enough personal fitness training, which members paid for and which helped
finance the fitness center.
Andrea was fairly sure Derek wasn’t fired due to gross negligence (such as leaving
the fitness members unattended). Nor was he fired due to serious misconduct, such as
hurting another employee or doing harm to the company. Actually, Derek was very
actively trying to recruit new members to the facility.
Thus, Andrea wished she had more documentation that would show that
Derek had been coached, counseled, or had even gone through progressive disci-
pline. She could find in the file only some notes that Derek could be more pleas-
ant and should improve the number of paid training sessions he conducted in the
fitness center.
Andrea was also concerned with the fact that Derek was 39 years old. The Age
Discrimination in Employment Act of 1967 prohibits discrimination against persons
40 years of age or older. Congress found that older workers were disadvantaged in their
efforts to retain employment and especially in regaining employment when released
from a job.’ Since Derek was 39, he was certainly very close to age 40 and could file a
lawsuit against the fitness center.
50 Part Ill @ Developing and Managing

Andrea had a meeting scheduled with Derek later in the afternoon. Her major
thought was something her former director of human resources at her last job used to
say, “Document, document, document.”

Case Questions
. Do you believe Derek received any of the 4, Would you, from what you know,
four steps in the coaching process? discharge Derek?
2. Did Derek receive progressive 5. How would the Age Discrimination
discipline? in Ernployment Act of 1967 apply if
3. Was there just cause to discharge Derek? Derek was 40 years old?

Case 9.2. Trends and Issues in HRM:

Mindfulness—a Thoughtful Theory About Leadership
Astrubal Gonzalez worked as the food service manager at Big-Time Hospital in New
Haven, Connecticut. Unfortunately, the food at the hospital was viewed as terrible.
Still, since Astrubal’s food service was the only place in the hospital to get food, sales
were stable.
The CEO of the hospital, Jean Curry, wondered how she could improve the qual-
ity of the food in Big-Time Hospital. Her first priority was to create a change process
to help the food service employees who were in denial that their food quality could
be improved. She had to help them forget about the daily grind they had repeated
for years and learn a new way to do their jobs. She had to get past their resistance to
change and help them see that a modern food service operation could lift employee
morale around the hospital.
On the way to work on the train, Jean happened to read about an interesting lead-
ership theory called mindfulness. She thought mindfulness sounded like a process with
which the employees could develop a renewed sense of mission toward delivering bet-
ter food quality and service, She decided to contact human resources about exploring
mindfulness as a way to replace mindlessness.
The human resources department responded by researching mindfulness as soon
as it received the call from the CEO. If Jean Curry called, HR was certainly going to
respond. The first step required defining leadership and mindfulness.
Leadership is the process of influencing employees to work toward the achievement
of organizational objectives. In Jean’s case, she was the leader, and it was her idea that
using mindfulness might be the solution to motivating her food service personnel.
HR found out that mindfulness is an area of leadership study that has become more
popular in the last decade. There are numerous summits and conferences devoted
to teaching the process of mindfulness. Jon Kabat-Zinn, former professor at the
University of Massachusetts Medical School, describes mindfulness as “paying atten-
tion in a particular way: on purpose, in the.present moment and non-judgmentally.””
 Chapter 9 @ Rights and Employee Management

By comparison, mindlessness refers to our subconscious, out-of-habit, or repe-

titious actions, placing limitations on what we can accomplish. A mindless worker
would rather continue the same steps and procedures used in the past at work.
Mindfulness enables employees to be fully aware of their mind, body, and spirit.
Mindful people are fully aware of what is happening around them. A mindful employee
has a high level of self-confidence, which gives the employee the belief that failures and
challenges can be overcome. Mindful people can visualize great change instead of plac-
ing limitations on what they can do to lead the organization.’
A mindful manager can lead the employees to reach higher levels of success. But
to do this, the mindful manager needs to learn to be compassionate, more self-confi-
dent, and an authentic leader. Recent organizations to embrace mindfulness include
Google, Harvard Business Schools, and the Seattle Seahawks football team in the NFL.*
Employees would most likely find it easier to enjoy mindlessness on a regular day
at work. However, an organization needs to strive for mindfulness every day at work to
help develop a gompany culture of innovation and creativity. Mindful employees look
for new ways to solve problems. To help develop mindful employees, HR needs to set the
standard by offering training on leadership concepts such as the benefits of mindfulness.
HR and managers in the different divisions can work together to model the behavior of
being mindful so that employees can learn to bounce back from failure, learn to be more
confident, and thus be actively aware of their surroundings at work and in their industry.
Jean decided she was going to also have to learn to use mindfulness if she expected
to have such a culture exist at her hospital. She had to exhibit behaviors that showed
she was innovative and creative. She wanted to be a leader who embraced everything
at work and shared the success with her employees.
After a series of training sessions led by HR, the food service personnel started to
feel more self-confident about their jobs. They were encouraged and wanted to cook
more creative lunch and dinner options. They were excited to see which new food
options were well received by the employees of the hospital. When a food item was
not well received, they didn’t get disappointed as they would have in the past. They
just used that experience as a learning situation. Their self-confidence and creativity
were evident in the variety of food they offered and the upbeat customer service
provided to their customers.
Jean was so excited about the results of implementing mindfulness that she was ready
to spread the leadership theory throughout the entire Big-Time Hospital organization.

@
Case Questions
1. How does mindfulness compare to 4. Do you think Astrubal will find it easy
situational leadership? or difficult to become a mindful leader?
2. How does mindfulness compare to the 5. After mindful training, what could
definition of leadership? Astrubal do to show he is a more
3. What are some ideas about how human mindful manager?
resources can teach employees to be 6. How did Jean use the stages of the
more mindful? change process?
52 Part Ill @ Developing and Managing

Notes
1. http://www.eeoc.gov/laws/statutes/adea.cfm.
2. Garms, Erica, “Practicing Mindful Leadership,” Association for Talent Development, March 8,
2013, https://www.td.org/Publications/Magazines/TD/TD-Archive/2013/03/Practicing-Mindful-
Leadership.
3. Moua, Mia, “Mindfulness and Self-Efficacy,” Leading With Cultural Intelligence, http://catalog.
flatworldknowledge.com/bookhub/reader/5575?e=moua_1.0-ch04#moua_1.0-ch05_s04.
4. http://www.mindfulleader.org/#home.
 10
Employee and
Labor Relations

Case 10.1. Unions and

Labor Rights: Can Labor Unions
and Management Work Together?
Candice works in the human resources department for Familia Wireless, which is
a small chain of stores selling cellular wireless phones and a service center. Familia
employees are not unionized at this time. However, employees are unhappy with
salary, benefits, and the fact that the store is open until 1 a.m. to attract the nighttime
club crowd.
Candice previously worked for the Paper Coating Company (PCC), which manu-
factured paper coating adhesives. This type of paper is often used in greeting cards.
PCC was a unionized company. The employees voted in the IBEW (International
Brotherhood of Electrical Workers) to represent their 500 employees. The manage-
ment team at PCC then had to bargain with the union on hours, wages, vacation time,
insurance, and safety practices.'
Thus, Candice had the opportunity to observe one company that had a unionized
workforce and one company that did not have to worry about bargaining with a union.
She noted that employees at PCC had to pay dues to be in the union. The only way
for the union to survive is to have its members pay some of their wages (dues) to the
union to cover union expenses. Thus, not having a union or dues at Familia Wireless
helps employees save money.
On the other hand, she did notice that employees at PCC were threatened with
discharge or layoff and that the union fought to protect their jobs. So, it was nice to
have union representation when management thought a worker’s job performance
was not up to standards.
Still, Candice thought the key to deciding to have a union shop was based on the
quality of the management team. If there was a good management team in place at
your company, then you wouldn’t need union representation. You were already being
treated and compensated fairly.

53
54 Part Ill @ Developing and Managing

However, if the management team was unfair in providing the correct wages, ben-
efits, and working conditions, then a union was a good idea since it could bargain for
improvement in these areas.
Candice felt she had a unique view from her spot in HR in both companies. She
found that employees of PCC didn’t really mind their union dues since the money was
automatically deducted from their paycheck. Of course, employees knew (or should
have known) they were paying union dues.
Candice worried that if PCC decided to close the company the union would not
be overly helpful. She assumed PCC would give the employees the 60 days’ notice
required by the Worker Adjustment and Retraining Notification Act (WARN). PCC
could also offer job retraining at the local community college. But, when PCC wanted
to close the company, there wasn’t much the union really could do to help employees.
Candice’s father was an IBEW union member because he worked for AT&T. When
AT&T wanted to close his AT&T office in Springfield, Massachusetts, and consoli-
date offices into a single location in Utah, he was asked to move to Utah or have his
employment terminated.
Candice had always heard of violent times in the history of management and
unions. Just recently, Candice had heard of Verizon employees who went on strike
in 2011 when Verizon tried to freeze pensions for current workers, offer fewer sick
days, and put an end to all job security provisions. A major area of concern for the
employees was the difference in unionization in the economy; unionization is high
in the old landline corded telephone business, but the new wireless cellular business
is mostly nonunionized. Employees went on strike for 2 weeks, and many deeply felt
the loss of their paychecks during the difficult economy. Verizon, however, received a
bad reputation because service was hindered for those 2 weeks.”

Chapter Questions
AE What law requires companies to provide 4. What is the role of human resources
employees 60 days’ notice if they are if a company does have a union?
going to close’ D 5. Do you think Familia Wireless will
2. Why would employees want to pay dues unionize?
to have a union?

3. Do employees need a union if the

management team is qualified to do a
good job on its own?

Case 10.2. Managing Conflicts:

How Can HR Help With Angry Employees?
Unfortunately, when two or more people work together for long periods of time, some
level of conflict will emerge. Functional conflict is a level of conflict that actually helps
 Chapter 10 @ Employee and Labor Relations 55

each employee improve his or her overall performance. However, finding this bene-
ficial level is not an easy task. Too little conflict, and employees can become compla-
cent. Too high levels of conflict can create dysfunction that interferes with workplace
performance. A good manager will learn to tweak the office atmosphere to find the
proper level of conflict. 7
During times of conflict, a good manager will also find the conflict management
style that works for him or her or will change styles based upon the type of conflict.
At times the manager might use an avoiding, accommodating, forcing, negotiating,
or collaborative conflict management style. Avoiding a conflict is a passive style and
often leads to lose-lose situations since both sides lose when resolution of the conflict
is not likely. An accommodating conflict style means you passively let the other side
win the conflict and implement its solution. A forcing conflict style uses aggressive
behavior, such as authority, to threaten, intimidate, and call for majority rule when
you know you have the vote in your favor. Negotiating requires finding a compromise
that attempts to resolve the conflict through a give-and-take of the issues involved
until a solution is found. Last, a collaborative style requires working with the other
party in the conflict and finding an acceptable solution.
Unfortunately, managers will find it difficult to keep dysfunctional conflict from
entering their workplace. Brian Hoffman started his own appliance store designed to
provide builders with washers, dryers, refrigerators, and other appliances for a newly
built homes. His business grew to include selling appliances to the consumer market
through 10 retail outlets. Brian worked out of the main headquarters in Windsor. The
human resources, accounting, and marketing departments were also placed at the
headquarters.
Brian heard that two workers in his West Hampton store were arguing on the retail
floor in front of customers. He sent two HR employees to investigate the problem. It
turned out that the two employees had a long-standing problem about who would
receive customers as they entered the store. Since the retail employees worked on
commission, they both wanted to help customers and fought for them as they entered
the store. This was obviously an aggressive form of conflict that was resulting in You
Lose, I Win.
Brian asked his HR department to develop a program with which too high a level
of conflict could be resolved. Avoiding the problem did not seem like a good solution
since the problem was occurring at the point of greeting and helping customers. He
also didn’t want to force a solution onto the two employees. Ultimately, he wanted to
develop a collaborative solution where both parties would like the outcome.
HR decided to look at compensation solutions within a similar setting—selling
automobiles. As a growing appliance supplier, Brian’s company needed to establish
some rules and policies that weren’t needed when it was a small business. HR found
that car dealerships used a rotating process when customers arrived. Each salesper-
son would take the next customer as he or she arrived. If more customers arrived at
once than could be handled, then all sales personnel would do their best to handle
the overflow evenly.
HR also advised Brian to review the compensation system. A compensation sys-
tem based on salary instead of commission would also lessen the rivalry between
salespeople.
56 Part Ill @ Developing and Managing

Fortunately, the new method of greeting customers was accepted by all retail floor
salespeople. The new compensation system based on salary versus commission was
being further evaluated. .
Brian was satisfied with the results in the employee conflict situation. However,
he was concerned about future conflict situations. For example, it was becoming
more likely that his growing business would have to discharge employees for not
performing up to expectations. Was HR up to the task of processing employees out
of the company? Would those employees become violent? HR plays a support role in
these serious conflicts: HR can help improve communication between the manager
and the employee. HR can be a witness to the confrontation between the two parties.
HR can help the employee calm down and return peacefully to the job while looking
into the issue. Otherwise, HR can call security or police to help control the disturbed
employee.’
Brian asked HR to create a program to reduce workplace stress. He wanted to avoid
high-level conflict situations before they occurred. Brian also had the realization
that his little business was no longer little. There were employees in his business
he had never met. While he was busy selling and ordering appliances, HR was busy
hiring new employees. He decided to spend more time with HR before he built any
new retail sites.

2
Case Questions
1. Is all conflict bad? 4. What is the role of HRin cases witha

2. What would be the difference between a potentially violent employee?

forcing style and a collaborative style to 5. How can HR use the Conflict
resolve a conflict? Resolution Model?
3. What is the role of HR in resolving
workplace conflicts among employees?

Notes
1. Rowe, Randy Hicks, “What Challenges Do Unions Pose for Human Resource Management?”
Houston Chronicle: Small Business, http://smallbusiness.chron.com/challenges-unions-pose-
human-resource-management-69221.html.
2. Greenhouse, Steven, “Verizon Workers Plan to End Strike, Agreeing to Revive Talks Toward
a Contract,” The New York Times, August 20, 2011, http://www.nytimes.com/2011/08/21/
technology/verizon-workers-end-strike-though-without-new-contract.html?_r=0.
3. Maurer, Roy, “When and How Should HR Step Into Violent Situations?” Society for Human
Resource Management, May 25, 2015, http://www.shrm.org/hrdisciplines/safetysecurity/
articles/pages/hr-violent-situations.aspx.
COMPENSATING

Chapter 11. Compensation Management

Chapter 12. Incentive Pay

Chapter 13. Employee Benefits

 11
Compensation Management
Case 11.1. Compensation Management:
How Does Wage Compression and Pay
Secrecy Affect Employee Motivation?
Marie was the vice-president of human resources for Envelope City, which is a small
manufacturing company that makes envelopes for the business market. The company
has been in existence for almost 100 years. But there are some problems that can occur
with being such an old business. For example, the organizational philosophy on wage
compensation most likely was set many years ago when the economic, technological,
and social conditions of the country were much different than they are today.
There are seven basic issues that make up the organizational philosophy on com-
pensation. First, Envelope City has to make an honest assessment of how much it can
afford and is willing to pay its employees. Second, Envelope has to decide what type
of compensation (base pay, wage add-ons, incentives, and benefits) it wants to offer.
Third, Envelope has to decide if compensation will be based on loyalty/tenure or if
employees will receive raises based on the quality of their work performance. Fourth,
a decision needs to be made whether compensation will be based upon a competency-
based system that involves the individual's level of knowledge in a particular area
or based on the individual skills the person brings to work. Fifth, Envelope needs to
decide to pay employees at, above, or below wage levels that workers are receiving at
area competitors. Sixth, Envelope has to decide if it is going to allow wage compression
to occur between new and long-term employees. Last, Envelope has to decide if pay
secrecy (which means employees will not be aware of what each of them is actually
paid) will be used within the company.
Interestingly enough, Envelope City found that the last two issues—wage
compression and pay secrecy—caused some problems at the company. Wage com-
pression, in particular, is a major problem. Wage compression occurs when new
employees require higher starting pay than the historical norm, causing a narrow-
ing of the pay gap between experienced and new employees. The result is that new
employees are paid more than longtime employees who are equally talented and at
the same level in the organization, regardless of their many years of experience with
the company.
58
 Chapter 11 @ Compensation Management 59

Marie experienced a form of wage compression as a teenager when she worked

at a fast food restaurant. At the time, back in the 1980s, she had worked hard at a
minimum wage of $1.60 per hour. She worked hard for 2 years to earn a dime raise.
However, shortly thereafter the minimum wage was increased to $3.20 per hour.
Marie lost her dime wage increase for good performance—she made only the mini-
mum of $3.20 per hour.
As a young adult in her twenties, Marie went to work for an oil company and
gained 5 years of experience in a human resources department. She then switched
jobs to work as the vice-president of human resources at Envelope City. She negoti-
ated a good contract that doubled her salary. However, her salary leap-frogged the
other vice-presidents at Envelope City. If her salary was disclosed to the other vice-
presidents, they would be very upset to know she was being paid as much or more
than the more experienced VPs who had worked at Envelope for many years.
Marie did not intend to create a situation where wage compression was going to
be a problem fgr her new HR department at Envelope City. She felt that the result of
her new employee contract (and other similar new employee contracts) was an unin-
tended consequence of Envelope City trying to be a more aggressive employer and
to pay new employees a competitive salary compared to the company’s competitors.
Another disadvantage of salary compression occurs when lower-level, nonmanage-
ment employees are paid as much, or more, than those in managerial positions.’ This
situation can quickly demotivate key managers.
The only good news about wage compression is that employees often keep their
own pay a secret. They are often afraid to compare salaries against each other in case
they find that they make less salary than their colleagues.
In 2010, nearly half of all workers were contractually required or encouraged to
not talk about their pay level with colleagues.? On April 8, 2014, President Obama
signed an executive order prohibiting federal contractors, subcontractors, and feder-
ally assisted construction contractors from discriminating against employees or appli-
cants who ask other employees about their compensation.
However, pay secrecy might also be one of the reasons that women are paid only
77 cents on the dollar that men make in the same job. Organizations might use pay
secrecy to make it difficult for women to compare their salaries with men in similar
positions.

@
Case Question
1. Why does wage compression occur in 4. Have you experienced pay secrecy?
arganizayions! 9. Does President Obama's executive
2. How can pay secrecy affect employee order impact employees at private
motivation? companies such as Envelope City?
3. Have you experienced wage compression
in your career?
60 PartlV @ Compensating

Case 11.2. Trends and

Issues in HRM: What Motivates
Employees at Work? Expectations or Equity?
Edwidge was thrilled to get a new job at Stubbub soon after she graduated from college
with a 4-year degree in management. She was quickly thrown into the position of
customer sales and service, selling tickets to sporting events and concerts. After a few
months, Edwidge was still in customer service and wondered what her future looked
like at Stubbub. She was concerned that she was working very hard but wasn’t receiv-
ing a salary increase for all her efforts.
This was the first time in Edwidge’s life that she wondered why people go to work.
Edwidge liked to compare herself to other employees and to figure out whether she
was being treated equally. She noticed that all the new employees she started with
were working in customer sales and service.
Edwidge decided to look at a few motivation theories to see if they could help her
understand her job expectations. Victor Vroom proposed the expectancy theory in
1964 as it applies to motivation. Expectancy theory states that Edwidge’s motivation is
an outcome of how much an individual wants a reward (valence). Edwidge assesses the
likelihood that her effort will lead to expected performance (expectancy) and the belief
that the performance will lead to reward (instrumentality). Expectancy is Edwidge’s
faith that better efforts will result in better performance and rewards.’
Edwidge next looked at equity theory, which was developed by John Stacey Adams
in 1963. Adams proposes that Edwidge will be demotivated if she feels her inputs are
greater than the outputs she receives. If this happens, Edwidge might respond by
being demotivated, reducing her effort, and becoming an unhappy employee.*
Edwidge also researched the concept of comparable worth. Comparable worth is
similar pay for similar work. The concept of comparable worth holds that, if Edwidge
can compare her job, skills, responsibilities, and efforts with that of another man or
woman, and they are similar, then she should be paid a similar wage. This makes the
concept of comparable worth much broader than just equal pay for equal work. The
key to similar worth, from a legal standpoint, is to determine the value of a job while
also taking into account the supply and demand for a particular job.
One factor in the compensation system at Stubbub also caught Edwidge’s attention
while doing her research. She detected that pay secrecy was the normal practice at
work. She really didn’t know what the other employees were getting paid since this
information was heavily guarded. Edwidge thought protecting employee salaries was
the correct approach for companies to take, but it did make it hard to compare her pay
against other employees.

Case Questions
1. Do you think the expectancy theory 2. Do you think the equity theory does a
is correct in explaining what makes better job than the expectancy theory
Edwidge happy? Explain why or why not.
 Chapter 11 @ Compensation Management 61

of explaining what makes employees 4. How does pay secrecy make it hard to
happy? accept the equity theory?
3. lf you worked in human resources, how 5. How would Edwidge apply comparable
would you use positive reinforcement to worth to her work situation?
support employee development?

Notes
1. Kochanski, Jim, and Yelena Stiles, “Put a Lid on Salary Compression Before It Boils Over,”
Society for Human Resource Management, July 19, 2013, http://www.shrm.org/hrdisciplines/
compensation/articles/pages/salary-compression-lid.aspx.
2. Women’s Bureau, “Fact Sheet,” U.S. Department of Labor Women’s Bureau, August 2014,
http://www.dol.gov/wb/media/pay_secrecy.pdf.
3. http://www.yourcoach.be/en/employee-motivation-theories/vroom-expectancy-motiva
tion-theory.php.
4. https://www.mindtools.com/pages/article/newLDR_96.htm.
 12
Incentive Pay
Case 12.1. Executive Compensation:
New Developments in Executive Compensation
Human resources leaders and compensation experts will always need to attract talented
managers to their corporations. However, newer laws are in place to help rein in large
executive salaries.
Sarbanes-Oxley (SOX) in 2002 has allowed the Securities and Exchange Commission
(SEC) to “claw back” executive pay and stock awards retroactively. SOX has mandatory
reporting requirements of all company perks, jets, country club memberships, and so on.!
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was
signed into federal law by President Barack Obama on July 21, 2010. Commonly
known as the Dodd-Frank, it requires that a public company present to its sharehold-
ers a plan to approve compensation, and “enhanced compensation” must be disclosed
to the SEC. The goal is to monitor executive compensation by making sure executives
are meeting performance-based goals.
The Dodd-Frank Section 953 requires additional disclosure about certain compen-
sation matters, including pay-for-performance and the ratio between the CEO’s total
compensation and the median total compensation for all other company employees.”
SOX and Dodd-Frank are very large laws that HR people might not be able to fol-
low on a daily basis. However, since the recession of 2008, there has been much more
attention paid to the large salaries executives receive.
Most large salaries come in the form of stock and stock options in the company.
CEOs are rewarded for their performance by receiving these stock options. For exam-
ple, CEO Larry Ellison of Oracle was paid $96 million in 2012 and $77 million in 2013
(he declined a performance bonus and took $1 in salary).
However, a study by professors found that, the more CEOs got paid, the worse their
companies did.’ One conclusion was that the CEOs became overconfident in their
abilities and made poor decisions. Another conclusion might be that they lost their
focus and motivation and found other pursuits outside the company to follow. For
example, Ellison is very active and a big supporter of yacht racing.
The clawback issue is still being pursued in 2015 as part of Dodd-Frank. The
SEC voted to propose a rule that would require exchanges to establish standards for

62
 Chapter 12 @ Incentive Pay 63

revoking executive bonuses when companies restate earnings or make accounting

errors leading to the restatement of earnings, regardless of the executive’s fault.’ The
clawback window would extend for 3 years after the bonus was given.
There is also a call for improving the Sarbanes-Oxley legislation since it has been
more than 10 years since the regulation has been established. BoardProspects is an
online professional community dedicated to building better boards of directors for
private, public, and nonprofit organizations. Mark Rogers, the founder and chief exec-
utive, posts that the real problem with executive compensation starts with the board
of directors. He points at the collapse of Enron as a failure of the board of directors.
The board didn’t safeguard Enron shareholders and contributed to the collapse of
the seventh largest public company in the United States. The board allowed Enron
to engage in high-risk accounting, inappropriate conflict of interest transactions,
extensive undisclosed off-the-books activities, and excessive executive compensation.
Rogers claims that executive pay would be more reasonable if there were term limits
on how long a person can serve on a board, limits on the number of boards a person
can sit on at one time, and requirements for continuing education on governance as
part of his or her training.°

6
Case Questions
1. What is a clawback process in regard to 4. Why is Sarbanes-Oxley an important
executive compensation? part of HR?
2. How do the newer laws impact the job of 5. What is the role of the board of
the HR person or compensation expert? directors in setting executive pay?
3. Why is the Dodd-Frank legislation so
important to executive compensation?

Case 12.2. Trends and Issues in

HRM: The Giving Praise Model in Action
The first time David Shaker went to work and was paid was when he was 18 years
old. Although David did jobs such as raking leaves and shoveling snow, he was more
focused on playing sports than getting a part-time job. During his first year of college,
he found his first real job at a McDonald’s. The part-time job at McDonald’s taught
David almost everything he learned about business, and he has used it throughout
the rest of his life.
One such learning lesson at McDonald’s was in regard to compensation and
incentive pay. Individual incentives reinforce performance with a reward that is sig-
nificant to the person. At 18 years old, David was very happy with a minimum wage
of $1.65 and the benefit of a free meal for each shift he worked. Since David was
evaluated on his personal performance at the restaurant, it was pretty easy for his
64 Part lV @ Compensating

manager Naino Leo to evaluate the quality, cleanliness, and service David provided
to customers. Plus, it was fairly easy to evaluate David since his job had a distinct
outcome (the quality and appearance of the cooked hamburger).
After David graduated from college in 1982, he took a marketing position with the
old AT&T. David was evaluated on the performance of the entire group of marketers
and their ability to sell expensive telephone systems to business customers. Group
incentives provide reinforcement for the actions of more than one individual within
the organization. The group evaluation at AT&T did promote teamwork because the
employees in David’s area had to work together to earn their bonus. Most of the team
members were loyal and trusted each other to complete the sales. However, the prob-
lem with teamwork at AT&T was that a few employees played the social loafer role.
That meant that they didn’t work nearly as hard and made fewer sales to customers.
These social loafers still expected to share in the bonus each employee would get if
the team met or went beyond their sales goal. A bonus is a lump sum payment, typi-
cally given to an individual at the end of a time period. Like all employees, David was
happy to get a “holiday bonus.”
David's next step in his career path led him to Monarch Insurance, where he
learned all about the strengths and weaknesses of commission-based sales. A com-
mission is a payment typically provided to a salesperson for selling an item to a
customer, usually calculated as a percentage of the price of the item sold. In David’s
case, he sold insurance policies to employees at other companies as part of the ben-
efit those employees were offered. Thus, if David sold an employee from Company
ABC an insurance policy to protect his family in case of his death, then David
would earn a commission. Many salespeople are paid on a straight commission,
meaning that they get paid only if they sell an item. In David’s case, he was paid a
lower base salary, which was supplemented by commissions on his sales. David felt
his salary plus commission compensation structure was implemented properly, and
he enjoyed the motivation to increase his paycheck by making more sales. It was
important for David to treat customers properly (as he was trained at McDonald's),
even if he made a smaller commission. He would rather see that the customers
got the correct life insurance policy. Commission sales can motivate salespeople to
want to earn the highest commission possible—even if it means that customers buy
more product than they actually need.
David felt fortunate that he never worked under a piecework or piece-rate plan.
However, he once took a tour of a toy factory, which was under a piece-rate plan, and
he watched the employees sorting pieces to include in a 72-piece set. The employees
working around the machine were quite calm and peaceful. They just kept inserting
bricks, such as the toy head for the person, into the set. When asked, the employees
said they were paid for each set of products that was made to the expected quality and
specifications. The employees also noted that they enjoyed job rotation and would
exchange seats around the machine and belts. That would allow the person to take
a different part and insert that part into a different spot in the box. The key for the
employees was to work at the proper pace so that they were not working too slowly
or too fast. Working too slowly could mean that you weren’t making enough of the
product. Working too fast could mean that you made mistakes because you didn’t
have enough time to be careful.
 Chapter 12 @ Incentive Pay 65

But for all the different compensation plans that David experienced in his differ-
ent jobs, he was most happy when someone told him he was doing a good job. If the
customers said he was doing a good job... great! If a manager said he was doing a
good job... great! If his wife praised him about doing a good job—that was also great!
The Giving Praise Model has four steps. The first step is to tell the employee exactly
what was done properly. The second step is to tell the employee why the behavior
is important. The third step is to allow a moment of silence to give the employee a
chance to feel the impact of the praise. The fourth step is to encourage repeat perfor-
mance so the employee continues to do great work.
Upon reflection, David was always impressed with the praise he received at
McDonald’s from his boss Naino Leo. Naino gave praise fairly easily, and it didn’t cost
McDonald’s a penny! Managers who use praise will realize that it really works and that
employees work even harder to keep up the good work. At times, David did receive
praise for finishing his college education, selling telephones for AT&T, or selling an
insurance policy. But he also was a little sad that he never quite had the same praise
that he had received at 18 years old from his boss Naino.

@
Case Questions
1. How would you compare hourly wages, 4, What is the key step in the praise
having a salary, or being paid by model?
I 5. Which type of compensation incentive
2. What is the benefit of the Giving Praise would you be most likely to receive
Model? if you stayed with the same company
2
3. Why do companies have a piece-rate NOE ey Veate
system?

Notes
1. Nemer, Kirk D., “New 2015 Developments in Executive Compensation,” Executive Career
Insider, May 28, 2015, https://www.bluesteps.com/blog/executive-compensation-2015.
2. https://www.sec.gov/spotlight/dodd-frank/corporategovernance.shtml.
3. Adams, Susan, “The Highest-Paid CEOs Are the Worst Performers, New Study Says,” Forbes,
June 16, 2014, http://www.forbes.com/sites/susanadams/2014/06/16/the-highest-paid-ceos-
are-the-worst-performers-new-study-says/.
4. “SEC Proposes Executive Bonus ‘Clawback’ Rule,” ABA Banking Journal, July 1, 2015, http://
bankingjournal.aba.com/2015/07/sec-proposes-executive-bonus-clawback-rule/.
5. Rogers, Mark, “Sarbanes-Oxley 10 Years Later: Boards Are Still the Problem,” Forbes, July 29,
2012.
 13
Employee Benefits
Case 13.1. Statutory
Benefits: Companies Kicking Your
Spouse Off of Your Health Care Plans
Dennis Ferry works for Compatible Technology in its customer service department.
Dennis knows he will have to make plenty of decisions when open enrollment for his
company health plan, Health New England, rolls around July 1 each year. Dennis’s
health-care coverage was totally free for employees in 1982 when he was just out of
college. That was a long time ago—and health care in the United States has changed
dramatically.
Today, companies are looking to save as much money as possible when designing
a health-care program. Each employee who signs up for the company health-care
program can cost the company between $4,000 and $10,000 a year, depending on
the program selected. Of course, it would be nice to think that the companies (and
our government) are also trying to make sure we receive the best health care possible.
Dennis’s wife, Janice Ferry, is employed by LEGO. Dennis and Janice have three
daughters under 10 years old. As a family, they can expect to pay about $300 a month
for the plan offered by Compatible Technology. They can also expect a deductible
around $2,500 to $4,000. The Compatible health-care plan has a deductible of $2,500,
which means the Ferrys will have to pay $2,500 in actual medical costs for pharma-
ceutical drugs, office visits, hospital stays, and so on before they can expect to receive
“free” health service until July 1 rolls around again.
If Dennis worked for UPS, Janice would have to take health-care insurance from
her job at LEGO, since she would not be allowed to stay on the Compatible plan. That
would happen because UPS informed their employees that their spouses would be
dropped from their health-care plan if the spouse can obtain health care at his or her
own place of employment.' This measure was taken as a reaction to the Affordable
Care Act (ACA). UPS expects to save money by avoiding paying the premiums for each
person on the plan. These premiums were implemented as part of the ACA.?
In Dennis’s case, he recently had to decide if he wanted to receive a $3,000 pay-
ment from his employer, Compatible Technology, to not take his health-care benefits.

66
 Chapter 13 @ Employee Benefits 67

The $3,000 must be used to pay for a spouse’s health-care program. Thus, if Dennis
didn’t take Compatible’s health-care plan from Health New England, he would be paid
$3,000 to help pay for health-care benefits at LEGO, where his wife works. Proof of
the other health-care plan must be provided. In Dennis’s case, since his wife Janice
worked for LEGO with a generous health-care plan, they decided to take the offer
from Compatible for $3,000 and would apply it to a family plan offered by LEGO. This
appears to be a positive switch in plans, since even Compatible will be happy that it
will not have to pay its portion of Dennis’s health-care plan, which would be greater
than $3,000.

S
Case Questions
1. Approximately how much money would a 4. At UPS, what would be the result if
company spend on a health-care plan for your spouse was forced to use his or
Janice as compared to her own cost? her own company plan?
2. What did UPS claim as the reason 5. What health-care plan are you
for dropping spouses from its health- covered by at this time? Are you
care plans? working for a company and have you
accepted the company plan? Are you
3. What decisions does Janice have to
on your parents’ plan, which you can
make in regard to selecting her
be covered on until age 26?
health-care plan?

Case 13.2. Trends and Issues in HRM:

Managing New Laws Regarding Sick Leave
It might be surprising to know, but there is no general legal requirement that employ-
ers give employees sick leave in the United States. While most employers do give
employees some paid time off each year to be used for sick leave, the law does not
require employers to do so in most circumstances. Since there is no requirement under
federal law that employees be given sick leave, there also is no legal requirement that
sick leave, if given by an employer, be paid leave.
The following passage is from the U.S. Department of Labor.

Currently, there are no federal legal requirements for paid sick leave. For compa-
nies subject to the Family and Medical Leave Act (FMLA), the Act does require
unpaid sick leave. FMLA provides for up to 12 weeks of unpaid leave for cer-
tain medical situations for either the employee or a member of the employee’s
immediate family. In many instances paid leave may be substituted for unpaid
FMLA leave.
Employees are eligible to take FMLA leave if they have worked for their
employer for at least 12 months, and have worked for at least 1,250 hours over
68 Part IV ® Compensating

the previous 12 months, and work at a location where at least 50 employees are
employed by the employer within 75 miles.’

An estimated 43 million people nationwide have no paid sick time. Employees

without time for sick leave often make up excuses to take time off or try to work when
they are sick. Employees also have to figure out what to do when their child is sick and
needs to stay home, when they need to go to their own doctor, or when they need to
help a sick relative.
However, cities and states are starting to propose and pass laws that provide work-
ers with sick leave time. A city of Pittsburgh councilman has proposed an ordinance
that allows employees to earn sick days based upon the number of hours they have
worked. The draft legislation allows 30 hours of work to equal 1 hour of sick time.
Employees cannot earn more than 72 hours of sick time in a year. Businesses with
fewer than 15 employees can limit sick time to 40 hours.‘
Effective July 1, 2015, the state of Massachusetts passed the Earned Sick Time Law,
which provides 1 hour of sick time for 40 hours of work. Earned sick time is paid at the
employee’s normal rate of pay. Employers that have 11 employees or more must allow
their employees to earn and use up to 40 hours of paid sick time per calendar year.
Employees working for an employer with fewer than 11 employees can earn up to 40
hours of unpaid sick leave per calendar year. An employee may miss work (1) to care for
a physical or mental illness, injury, or medical condition affecting the employee or the
employee’s child, spouse, parent, or parent of a spouse; (2) to attend routine medical
appointments or those of a child, spouse, parent, or parent of a spouse; or (3) to address
the effects of domestic violence on the employee or the employee’s dependent child.°
Six and a half million people in California became eligible for paid sick leave for
the first time starting July 1, 2015. The Healthy Workplace Healthy Family Act of 2014
guarantees up to three days of paid sick leave for all California workers who work for
30 or more days within a year of becoming employed. The law will help employees in
the retail and fast food industry, since those employees often have young children and
often need to take sick time to tend to those children when they are ill.
Overall, as of July 2015, California, Connecticut, Massachusetts, and the District of
Columbia, as well as at least 18 cities, have laws mandating paid sick days.°

@
Case Questions
1. Is sick time part of paid time off benefits? 4. Why doesn’t a national sick leave law
2. Do you believe that employees abuse exist
sick leave by using a “use it or lose it” 9. Does the company you (or your relative
approach? work for have a sick leave policy? If so,
3. Does having a sick leave policy help whabis thatpoliey?
reduce overall stress?
 Chapter 13 @ Ernployee Benefits 69

Notes
1. Ponder, Crissinda, “Will Company Health Plans Drop Spouses?” Bankrate.com, http://www
.bankrate.com/finance/insurance/employer-health-plans-drop-spouses.aspx.
2. Greenhouse, Steven, “U.P.S. to End Health Benefits for Spouses of Some Workers,” New York
Times, August 21, 2013.
3. United States Department of Labor, “Work Hours: Sick Leave,” http://www.dol.gov/dol/topic/
workhours/sickleave.htm.
4. Zullo, Robert, “Pittsburgh Council to Introduce Paid Sick-Leave Legislation,” Pittsburgh Post-
Gazette, July 6, 2015, http://www.post-gazette.com/local/2015/07/06/Council-to-introduce-
paid-sick-leave-legislation/stories/201507030268.
5. http://smcattorneys.com/employment-law-update-massachusetts-sick-leave-law/.
6. Karol, Gabrielle, “California Paid Sick Leave Act Goes Into Effect July 1,” USA Today Network,
June 30, 2015.
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PROTECTING
AND EXPANDING
ORGANIZATIONAL
REACH

lechaaie 14. Workplace Safety, Health, and Security

Chapter 15. Organizational Ethics, Sustainability, and Social

Responsibility

Chapter 16. Global Issues for Human Resource Managers

 14
Workplace Safety,
Health, and Security

Case 14.1. Building a Human

Resources Information System While
Protecting Health Information From Cyber Attacks
Kendra Lewis was hired right out of college to support the human resources staff at
an insurance company in Orange County, California. It took Kendra about a year
to become familiar with all the paper forms that were completed by the employees
of the insurance company. One day her boss, Sam Cooke, told her they were going
to develop a Human Resources Information System (HRIS). Sam had very little idea
what was involved in an HRIS; he had only heard about the concept at a conference
that he recently attended. So Sam told Kendra to research what was involved in
such a system.
Kendra found that the age of technology had created the need to create an HRIS to
effectively coordinate everything related to human resources. A modern HRIS would
be a software solution that would create a database whereby her human resource
department could collect employee information; would create reports and analy-
ses about employee information; would store company-related documents, such as
employee handbooks; would track applications and résumés for Open positions; and
would complete integration with payroll and other company financial software and
accounting systems so that employees would be paid properly.'! A modern HRIS con-
tains information about which benefits an employee selects; status changes, such as
promotions at work; and personal information.
To help track applicants and résumés for open positions, a modern HRIS automates
the application process by providing a standard application to candidates by way of
the Internet. The application and other related documents from the applicant can
then be stored on the HRIS. The search committee filling the open position can then
review applications online, using a company’s Intranet system. Search members can
use keyword searches to provide the HR manager with a first cut of suitable applicants
for a specific job.
72
 Chapter 14 @ Workplace Safety, Health, and Security 73

The amount of information flowing through an HRIS regarding protected health

information (PHI) is increasing rapidly. Since Kendra’s insurance company is growing
rapidly, the data will grow accordingly given that the number of employees and their
dependents who apply for health care will increase on the company payroll.
Employee privacy regarding health insurance is an important issue when develop-
ing an HRIS. Human resource professionals like Kendra will need to be trained in the
Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Security
and Breach Notification Rules. As defined by the Office of Civil Rights, the HIPPA
Privacy Rule protects the privacy of individually identifiable health information. The
HIPAA Security Rule sets national standards for the security of electronically pro-
tected health information. The HIPAA Breach Notification Rule requires notification
following a breach of unsecured protected health information.” Since Kendra and the
other HR office personnel will have electronic access to all employee information, the
need for following the rules of HIPPA will be increased, since it can be much harder to
protect electrogic files than a paper file.
HR professionals need to understand that the protected health information (PHI)
entrusted to them is to be confidential at all times. Cautious employees are good
employees to hire in a human resource department. The need for trusted and confi-
dential employees in HR is critical.
HR should conduct a risk assessment to start the process of protecting the PHI.
The assessment can include protective measures already in place and those that are
missing. Part of the assessment must include an assessment of third-party suppliers,
such as the company that produces the employee checks or the company hired to be
the expert at managing the employer-sponsored health-care and retirement programs.
Kendra’s company uses BBG Health Service Provider to develop the company health-
care program and collect all employee funds related to health insurance. Kendra’s
company also uses Deluxe Check Writing Services to produce employee checks.
Deluxe and BBG are two examples of very important third-party suppliers to the
human resources department. Providers such as Deluxe and BBG must ensure the
safety of the employee data they use while providing their services.
Kendra found that an HRIS will require many high-tech solutions, such as soft-
ware selection and updates. Cyber security is the use of tools and processes to protect
organizational computer systems and networks. Professional and amateur hackers,
terrorist organizations, and even some governments are working to break into com-
pany computer systems for a variety of reasons. In 2015, two major breaches of U.S.
government databases holding personnel records and security-clearance files exposed
sensitive information of at least 22.1 million people. Exposed personal information
was hacked about federal employees, contractors, their families, and friends. U.S. offi-
cials have privately said that the intrusions were traced to the Chinese government.’
Although many high-tech solutions will be needed to safeguard employee data,
some simple solutions such as strong passwords and changing passwords on a regular
basis can help protect the HRIS and PHI. Employees and HR professionals can also be
careful not to leave unsecured laptops with employee data in unlocked areas.
Overall, an HRIS will allow the company to reduce its own paper needs, save time,
reduce stress, and create a more efficient process of helping employees with their sal-
ary and benefits. Kendra proposed to her boss that a committee should be formed so
that the system reflects the needs of all the stakeholders of the organization.
74 Part V @ Protecting and Expanding Organizational Reach

Case Questions
ib What are the goals of ahuman 5. What are some simple solutions
resources information system? to help reduce cyber attacks
9
. In comparison, what is the goal of on PHI?
protected health information? 6. Who should Kendra consider to
. Why do HR professionals need be members on the committee
HIPPA training? to develop the HRIS?

Why are third-party suppliers a

potential security risk?

Case 14.2. Trends and Issues in HRM:

Future Trends in Human Resource Management
Past issues related to HRM will always be important to the future issues in HRM.
Topics such as legal issues involving the rights of employees, recruiting employees,
matching employees with jobs that fit their skill set, selecting employees, develop-
ing and training employees, evaluating the performance of employees, compensating
employees, providing employee health-care and retirement benefits, and developing
an HRIS to maintain all that information will all need to continue to improve. A grow-
ing area of importance to HR is providing workplace safety. Workplace safety is an
area that is of great concern; we want our employees to feel secure while performing
their jobs. We also want to make sure our employees are healthy so they can perform
their jobs and enjoy their lives.
From an HRM perspective, the goal might be to become a more powerful player
in the management of the organization. HR would like to be consulted on strategic
issues that are often associated with the finance or marketing areas. However, in
most companies, HR will always be considered a staff area as compared to the more
active line areas, such as marketing or finance. Still, with the increased diversity of
our workforce and the changes needed in employee skills, HR will certainly be a very
busy area of a company.
HR will be busy with topics such as how to incorporate technology into its func-
tions, how to analyze employee data produced by technology to help make HR
decisions, how to use social media to find talented employees, how to increase our
understanding of how diversity impacts our workforce, and how to address gener-
ational issues in the workplace caused by having up to five generations of people
working together.
These issues will certainly impact HR functions at all organizations. Prospective
employees will use social media (such as LinkedIn and Facebook) to find job openings.
 Chapter 14 @ Workplace Safety, Health, and Security 75

Prospects will use social networks to develop relationships and a network of people to
help find job matches.
Prospective employees will have to be persistent in their search to find the com-
pany that is a good match. Employers will find it hard to stay competitive in their
industries as technology changes the workplace. For example, Hallmark Cards in
Enfield, Connecticut, will lay off 570 employees in 2016 and move its distribution
center to a single location in Liberty, Missouri.’ Only 400 employees were offered
in Missouri. Human resources will have to be involved in processing the employees
either to work in Missouri, to be retrained to work in a new industry, to prepare for an
early retirement, or to be helped through the unemployment process.
People will have to acquire skills that are needed by employers. Increasingly, com-
panies will contract out to training organizations that specifically train employees in
skills such as computer programming. People will often train themselves for free by
completing massive open online courses (MOOCs) to learn specific skills. The millen-
nial group wil} use their desire to learn and use technology to enter companies at the
same time as baby boomers exit companies and head into retirement.
The development of HRIS using massive computer power will increasingly replace
the paperwork typically associated with human resources. The only way to avoid
being eliminated by the computer revolution is to join it by making sure each one of
us is computer educated in our own career.
A great concern is the safety, health, and security of our workers while on the job.
The following workplace incidents, unfortunately, occurred with the past few months
of writing this text. A newscaster and her cameraman were killed by a bitter ex-televi-
sion reporter 2 years after he was fired.’ A student killed nine people when he attacked
a building at Umpqua Community College in Roseburg, Oregon.° Fourteen people
were killed and 22 injured in a workplace massacre at the Inland Regional Center in
San Bernardino, California.’
People can become aware of workplace safety issues much faster than in the past.
The popularity of social media sites, such as Facebook and Twitter, have allowed peo-
ple to be aware of situations while they are happening. Social media can assist com-
panies in dealing with a situation where employees need information quickly and
accurately. Alert systems can provide immediate warnings to all people signed up to
receive alerts.
Violence in the workplace requires HRM to be proactive and to have policies and
procedures in place in case a violent situation does occur. A written policy addressing
workplace violence is the best preventive policy. It is important for HR people to take
action quickly and to address any individuals at work who show potential violent
behaviors and actions.
Organizations need to have a formal grievance process at work to allow frustrated
employees to air their complaints. The process will take time to develop, and it most
likely will involve many steps, since a well-written policy makes sure the employee
meets with all parties involved before reaching a formal grievance hearing. Demotions,
firing, and layoffs need to be handled in a professional manner and in all cases should
include helping the employee find a new place of employment that might be a better
fit for his or her talents.
76 Part V @ Protecting and Expanding Organizational Reach

Case Questions
il. Will HR become more, less, or stay the . What other areas of HR do you
same in regard to its importance within envision as being important in the
companies? future of HR?
. What is the role of technology in the . Research workplace violence that
future of human resources? has happened in your own local area
. What are some areas of HR that will be within the last year.
important in the future of HR?

Notes
1 http://humanresources.about.com/od/glossaryh/a/hris.htm.
2. http://www.hhs.gov/oct/privacy/.
- Nakashima, Ellen, “Hacks of OPM Databases Compromised 22.1 Million People, Federal
Authorities Say,” The Washington Post, July 9, 2015.
. Porter, Mikaela, and Mara Lee, “Hallmark to Close Enfield Warehouse, Eliminate 570 Jobs,”
Hartford Courant, July 7, 2015, http://www.courant.com/business/hc-enfield-hallmark-ware
house-close-20150707-story.html.
- Sandoval, Edgar, Jason Silverstein, and Larry McShane, “TV News Reporter, Cameraman
Are Fatally Shot During Live Broadcast in Virginia; Suspected Shooter Posts Video of Attack,
Then Kills Himself,” New York Daily News, August 27, 2015.
. Turkewitz, Julie, “Oregon Gunman Smiled, Then Fired, Student Says,” New York Times.com,
October 9, 2015.
Sanchez, Ray, Michael Martinez, and Doug Criss, “Pray for Us’: Calls, Texts Relay Horror of
California Mass Shooting,” CNN.com, December 2, 2015.
 ike
Organizational Ethics,
Sustainability, and Social
Responsibility

Case 15.1. Corporate Social

Responsibility (CSR): Can Human
Resources Help Companies Develop a CSR Program?
One of the hotter topics in business in the last 10 years has been corporate social
responsibility (CSR). CSR means taking all stakeholders into account. All stakeholders
means all—not just shareholders or executives. The business case for CSR is based on
the ability of the organization to help or harm various stakeholder groups and to iden-
tify, of those stakeholder groups, which ones help or harm the company. Each stake-
holder group has different, and sometimes competing, interests. The organization
must balance these social responsibilities among all the groups in order to succeed.
A CSR program recognizes that organizations have a duty to all stakeholders
to operate in a manner that takes each of their needs into account. It signifies an
attempt by organizations to be more aware of and to develop programs to create
a triple P concept—people, planet, and profits. The goal is to save the planet, help
people live a better lives, and still produce a profit for the shareholders, owners, and
employees to share.
HR can play a role in helping organizations and employees be more CSR oriented.
So far, HR hasn’t been active enough in this area. But HR can make sure that man-
agement is ethically oriented. HR can make sure employees are ethically oriented by
providing training and development on CSR. HR can make sure that ethics is adhered
to at the board level of the company.!
Ethics is commonly understood to include morals, values, beliefs, and principles.
An employee with these characteristics will have personal integrity and be known as a

aed
78 Part V @ Protecting and Expanding Organizational Reach

trustworthy person. An ethical employee can be.expected to want to help a company

develop a CSR program.
In terms of the planet, HR can teach employees to think about sustainable issues.
Employees look for improvements in their work areas. They can use suppliers that
employ sustainable measures, such as paper packaging produced from recycled paper
or renewable forests. Businesses and their employees can lower the use of environmen-
tally damaging chemicals in the production of their products. Employees can learn to
reduce or reuse waste products.
In regard to people, HR can help employees take care of their health by pro-
moting the use of health-care benefits, such as reimbursement for membership to
health-care clubs. Or HR can heip employees find a better balance between work
and family life.
However, the goal remains being a profitable business. Even a nonprofit business
needs to break even to ensure staying in operation. The Triple P concept looks for ways
to improve the environment, help employees, and yet still be profitable.
The American economist Milton Friedman felt that using any money to improve
the environment, beyond what is required by the government, was not a good use of
company finances since it would reduce overall profits.2 Accordingly, Friedman did
not support the widespread use of CSR. He felt a company should do only what it
legally needed to do as required by the law.
However, research by Edward Freeman resulted in a different view. Freeman’s stake-
holder theory called for managers to create value for customers, suppliers, employees,
communities, and shareholders. Freeman took a much broader view on creating value
for everyone instead of just making profits for shareholders.’ Thus, Freeman would
support the concept of CSR and the idea that a company should go beyond its legal
requirements and help the people, planet, and profits all at the same time.
Since 2012, Apple Computers has faced troubles in regard to its supplier Foxconn
in Taiwan. Foxconn has 1.2 million employees who make Apple’s very profitable iPads,
iPhones, and other high-tech products. However, the employees work under extreme
conditions to ensure that Apple products are consistently produced at a high quality.‘
The repetition of the work has led many of the employees to feel depressed, and some
employees have tried to commit suicide. Foxconn has installed nets around the roof
of the company to prevent jumping off the building.®
Still, just because Apple has trouble with a supplier doesn’t automatically make it
an unethical company. Nike had a very similar problem with its suppliers in the 1990s.
Nike footwear was made in sweatshop conditions in Indonesia. Nikes were made by
workers who were paid low wages and experienced poor working conditions.® Nike
was also accused of using children to make its footwear. Nike did its own research and
found that the poor working conditions were real and needed to be corrected. The
company has spent the last decade trying to publish where its footwear is produced
and trying to train the managers in those locations not to use hurtful tactics (such as
forcing workers to stay outside in the blazing sun after failing to reach their goal of
60 pairs of shoes on time).’ Nike has joined the Fair Labor Association, a group that
includes other footwear and clothing makers, nongovernment organizations (NGOs),
and universities, which conducts independent audits designed to improve standards
across the industry.
 Chapter 15 ®@ Organizational Ethics, Sustainability, and Social Responsibility 79

Case Questions
1. How do Milton Friedman and Edward 4. How can HR help the planet?
Freeman differ on their views of an . 5. Why did Apple bere te aiitenuith
organization's role in corporate social Eovennad
responsibility?
2. Has HR been active enough in CSR?
3. What can HR do to promote CSR in an
organization?

Case 15.2, Equal Opportunity, Diversity,

and Multiple Generations at Work Together
Title VII of the Civil Rights Act of 1964 was enacted to stop discrimination based on
race, color, sex, national origin, and religion. In later years, the meaning of diversity
expanded to include individuals with disabilities, workers aged 40 years and over, and
veterans.® Today, workplace diversity includes differences attributed to generation,
culture, and lifestyles.
Employee diversity will continue to grow, and we will have to become better at man-
aging that diversity than we have in the past. To exclude a qualified person because that
individual is different in some way is counterproductive to business success. Managing
diversity is becoming critical in all organizations and in all industries. We have to con-
tinue to get better at the HRM task in order to engage all our future employees.
Generational differences are one of the latest and most interesting areas of potential
differences. Workplaces often have four or five different generations working together.
These generations are labeled Traditionalist (born 1922-1945), Baby Boomers (born
1946-1964), Generation X (born 1965-1980), and Generation Y (born 1980-1994),
also known as the Millennial Generation or Generation Next.’
Traditionalists tend to work late and on weekends. They grew up in a time when
wives stayed at home and didn’t work. They are loyal employees and expect to be paid
fairly well. Changing jobs did not occur often, since that meant something was not
going well.
Baby Boomers were born in an era of general affluence. Many grew up in a house-
hold with a single parent working. Women are often as educated as men. Boomers can
be driven to succeed.
Gen Xers are often children who lived with two working parents. They tend to
be individualistic, confident, and self-reliant. They believe that balancing family life
and work life is most important. Xers are the first generation to feel comfortable with
technology and diversity.
Millennials are very knowledgeable about technology. They are also very under-
standing of diversity and expressing personal lifestyle choices. They are able to multi-
task and like to work at their own pace."
80 Part V ® Protecting and Expanding Organizational Reach

Today’s business environment is the first one in which five generations of people
are likely to be working at the same time. The differences in age could create con-
flict between the younger and older employees. However, the differences between
employee ages should be cherished and used as a source of information to help sell
company products. Managing older workers will be important as younger people take
over the leadership role in all organizations."
Older employees (such as Traditionalists and Baby Boomers) are often the mentors
for teaching younger (Gen X and Y) employees. Older workers can teach younger
workers about the culture of the company and how things normally get done.
However, Gen X and Y employees have been born in the technology era. That
being so, the younger employees can teach older employees about topics such as social
media marketing techniques. So younger employees can become reverse mentors and
teach the older employees how to better use technology in the workplace.

Case Questions
i What are the traditional areas of 4. What differences do you experience
discrimination the human resources between yourself and a coworker
department normally helps to resolve? (or teacher) from a different
ion?
. How do equal opportunity, diversity, and GsHrrehGrs
generational issues intersect? 5. What potential discrimination issues
. What generation do you belong to? Do do you think exist between employees
ions?
the characteristics describe yourself? of different generations:

Notes
1. Higginbottom, Karen, “Why HR Needs to Take a Leadership Role in CSR,” Forbes, January 6,
2006.
2. Friedman, Milton, “The Social Responsibility of Business Is to Increase Its Profits,” The New
York Times Magazine, September 13, 1970.
3. Freeman, Edward, Strategic Management (Boston, MA: Pitman, 1984).
4. Leach, Anna, “Foxconn Is World’s 10th Largest Employer: 1.2 Million Employees,” The
Register, March 20, 2012.
S. Myers, Connor, “Corporate Social Responsibility in the Consumer Electronics Industry: A
Case Study of Apple Inc.,” Georgetown University, http://Iwp.georgetown.edu/wp-content/
uploads/Connor-Myers.pdf.
6. Nisen, Max, “How Nike Solved Its Sweatshop Problem,” Business Insider.com, May 9, 2013.
SS Teather, David, “Nike Lists Abuses at Asian Factories,” The Guardian, April 14, 2005.
8. Mayhew, Ruth, “What Are an Employer's Responsibilities for Diversity in the Workplace?”
Houston Chronicle:SmallBusiness, http://smallbusiness.chron.com/employers-responsibilities-
diversity-workplace-10417.html.
 Chapter 15 @ Organizational Ethics, Sustainability, and Social Responsibility 81

9, http://www.valueoptions.com/spotlight_YIW/gen_y.htm.
10. Jerome, Alicia, and Michael Scales, “Millennials in the Workforce: Gen Y Workplace
Strategies for the Next Century,” e-Journal of Social & Behavioural Research in Business 5, no. 1
(2014): 1-12.
ILM Hoving, Allan, “Managing Older Workers,” Human Resources IQ.com, October 24, 2013.
 16
Global Issues for Human
Resource Managers
Case 16.1. Globalization of
Business and HRM: Should Your
Marketing Director Become an Expatriate?
Daniel had a successful career in marketing for IToys Corporation in New York.
Daniel's career has been an exciting journey through IToys, which is the fastest grow-
ing toy business in the United States. However, IToys had plans to enter the global
marketplace, and human resources called Daniel with an offer to manage the new
office in England for the next 3 years. Daniel’s career would be kicked up a notch by
being the director of marketing for the entire United Kingdom.
HR determined that Daniel had many of the Big 5 personality traits (extrover-
sion, Openness to new experiences, conscientiousness, agreeableness, and not being
neurotic) that would help him to be successful running IToys in different countries.
Daniel is an extrovert; he is outgoing, makes new friends, and builds relationships
easily. Some evidence shows that being an extrovert, open to learning about new
international cultures and experiences, and working well with new people will help
him adjust to a different culture.!
Although Daniel was surprised about the offer to take an assignment in England,
he knew that he was open to new experiences. Before working at IToys, Daniel spent
plenty of time in Europe at trade shows demonstrating toys for his previous employer.
The problem was that Daniel had a wife, Hannah, and three children between the ages
of S and 10. Daniel had a tough decision to make in regard to uprooting his family
and moving them all the way to England. Hannah had been a great supporter of her
husband for the last 5 years. She had moved up and down the East Coast (New Jersey,
Rhode Island, Pennsylvania, and Massachusetts) in support of Daniel. Daniel had to
consider the impact on his wife since she would be thrown into a new country with no
friends. Daniel's children would have to start school in a strange country.
Still, Daniel and Hannah decided to become expatriates, and they accepted the
new position in England. An expatriate is an employee who leaves his or her home
country to go to work in another country. Many decisions have to be made since the
82
 Chapter 16 @ Global Issues for Human Resource Managers

“expat” is usually in another country for about 3 years. One decision that would have
to be made was in regard to schooling for their children. Daniel and Hannah decided
that their children would attend the American School and attend classes with the
children of other American executives.
Human resources at IToys offered various services to help Daniel make the move to
England. HR explained that his home in New York would be paid for by the company
while he was away for 3 years. HR would provide training on cultural issues such as
language (a lesser problem in this case due to English being spoken in both countries).
HR would also process Daniel’s pay so he would be paid in U.S. dollars, which he could
then transfer to English pounds or euros. HR would be the contact point for Daniel
throughout his international journey.
Daniel and Hannah ended up enjoying their 3 years of marketing IToys in England.
Hannah was an integral piece of the puzzle. She became an important person in the
expat community. While Danie! was busy setting up new retail accounts for IToys to
sell their product lines, Hannah was busy taking care of the children and making sure
they adjusted to a new set of friends. Hannah also made trips back to the United States
to attend to elderly family members or to attend important family celebrations. IToys
allows its expats to return to their home country once a year.
It is important for the expats to be compensated above normal to help alleviate the
extra costs of living overseas. The executives and their families move to another coun-
try and experience the international lifestyle. However, they still need to be part of their
family back in their home country, which requires extra money for travel expenses.
Other issues, besides language, that can cause problems with an overseas job
include determining whom the person reports to in the host country versus the home
country, who appraises the expat in regard to performance, whether there will be a
mentor in the host country to help train Daniel, and what support will be available
from human resources during and after the assignment is complete.
After 3 years, Daniel was offered the chance to start up a new division of IToys in
Brazil. Being in Brazil would bring them to another expat community. However, this
time they could experience more culture shock, as Portuguese is the primary language
of 99 percent of the people in Brazil. Daniel would need to have more cultural training
since doing business in Brazil would be quite different than it was in England. Still,
Daniel and his family thrived in England, so they are experienced expats. They certainly
appear to be flexible, and they may enjoy learning more about the Brazilian culture.

@
~ Case Questions
1. What does it mean to be an expatriate? 5. How did language play a part of the

2. What would it have meant to Daniel’s career decision to go to either England or

if he had declined the position in England? Brazil?
3. Why was Hannah such an important part 6. wae Daniel take the new job in
of the entire expatriate experience?
4, What is the role of human resources
in assisting expatriates?
84 Part V @ Protecting and Expanding Organizational Reach

Case 16.2. Global Staffing: Developing,

Staffing, and Managing Global Human:
Resources—Katya and Her Russian Background
Katya Malkin is proof that we are living in a global village. Companies have to search
for talented employees, like Katya, throughout the world. In Katya’s case, she was a
gifted student while in school in Russia. But she was raised in a very poor home envi-
ronment. Although she had a lovely mother and father, she lived in a small one-bed-
room apartment.
Fortunately, at school Katya excelled at math and science, like many of her fellow
Russian-born students. She also spoke English very well. Katya was quite social and
interacted very well with teachers and counselors. At 15, Katya was extremely fortu-
nate, and she went to the United States for high school. She lived with a wonderful
family in a suburb of Connecticut. She applied and was accepted at a small Catholic
College in Danbury, Connecticut.
Katya had 4 wonderful years studying management, marketing, and accounting.
She found that large employers were especially interested in hiring her for her degree
in accounting.
Katya wrote a senior thesis on how companies hired international students to
help give organizations a global view. She found that employers like international
students but consider the process of hiring an international student rather complex.
Understanding the American immigration process is often stressful and confusing
because there are many different categories of visas. The eligibility requirements are
constantly changing, which makes the process even harder to follow.
On the positive side, international students like Katya have already shown that
they can leave their home country and learn the language of a new country, and they
show a desire to work in the United States. Katya assumed it would be easy to entice
international students to also live as expats in other countries.
The human resources department of a company can help employees renew a visa.
HR can also help international students become part of the local community, find
schools that offer programs for bilingual students, and make spouses feel like a part
of the company.
A company is only as good as the people who work for it. Employees will be needed
to replace people who are retiring from the workforce, who are transferring to another
company, or who have passed away. HR has to fill these spots with talented people
in every country where their product is sold. Hiring recently graduated international
college students can help fill job openings within and outside the United States.
The HR function becomes more complex as companies experience different stages
of developing a global organization. HR has to develop HRIS systems that take into
account the culture and business practices of every country in which they operate.
Still, for those people like Katya who are extroverted, agreeable, and open to new
experiences, taking a chance and becoming an expatriate can lead to an exciting life
of travel, meeting people from different countries, negotiating deals around the globe,
and working for the large global companies in places as diverse as China, Poland,
and Israel.
 Chapter 16 @ Global Issues for Human Resource Managers 85

@
Case Questions
|. What are the advantages of hiring a 4. Use the website http://www.reed
recently graduated international college .co.uk/jobs/human-resources to
student? look for a human resources
job in the
United Kingdom.
2. What are the disadvantages of hiring a
recently graduated international college . Find a job in another country of your
student? choice. You should feel that you
would have a good opportunity to be
3. What is the impact on HR when hiring an
selected for the job.
international student?

Notes <
1. Lussier, Robert, and John R. Hendon, Human Resource Management, 2nd ed. (Thousand
Oaks, CA: Sage, 2016).
2. http://www.internationalstudent.com/study_usa/way-of-life/working-in-the-usa/.
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 Made in the USA
Monee, IL
07 February 2021

59894550R00059
 (FoesIN
BIOIMIAN
RESOURCE
MANAGEMENT
vases in human Resource Management provides students with insights into common
challenges, dilemmas, and issues human resource managers face in the workplace.
Using a wide variety of well-known companies and organizations, author David
Kimball engages students with original, real-world cases that illustrate HRM topics and
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making Kimball the ideal companion for any introductory HRM course.

KEY FEATURES
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in the field such as state and federal minimum wage, succession planning,
executive compensation, mindfulness, cyber attacks, CSR, and managing a
multigenerational workforce.
¢ Achapter on international HRM topics examines important issues like that of
helping expatriates succeed,

Instructors, visit study.sagepub.com/kimbcll to download teaching notes for the cases!

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