Systems Approach to Training

The success of orientation or any other type of training can be gauged by the amount of learning that occurs and is transferred to the job. Too often, unplanned, uncoordinated, and haphazard training efforts significantly reduce the learning that could have occurred. Training and learning will take place, especially through informal work groups, whether an organization has a coordinated effort or not—because employees learn from other employees. But without a welldesigned, systematic approach to training, what is learned may not be what is best for the organization. Figure 10—6 shows the relevant components of the three major phases in a training system: (1) the assessment phase, (2) the implementation phase, and (3) the evaluation phase.

Assessment Phase
In the assessment phase, planners determine the need for training and specify the objectives of the training effort. Looking at the performance of clerks in a billing department, a manager might find that their data-entry and keyboard abilities are weak and that they would profit by having instruction in these areas. An objective of increasing the clerks’ keyboard entry speed to 60 words per minute without errors might be established. The number of words per minute without errors is the criterion against which training success can be measured, and it represents the way in which the objective is made specific. To make the bridge between assessment and implementation, the clerks would be given a keyboard data-entry test.

Implementation Phase
Using the results of the assessment, implementation can begin. For instance, a billing supervisor and an HR training specialist could work together to determine how to train the clerks to increase their speeds. Arrangements for instructors, classrooms, materials, and so on would be made at this point. A programmed instruction manual might be used in conjunction with a special data-entry class set up at the company. Implementation occurs when training is actually conducted.

Evaluation Phase
The evaluation phase is crucial. It focuses on measuring how well the training accomplished what its originators expected. Monitoring the training serves as a bridge between the implementation and evaluation phases and provides feedback for setting future training objectives.

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Labour Market

There actually is not one, but several labor markets that are the external sources from which employers attract employees. These markets occur because different conditions characterize different geographical areas, industries, occupations,and professions at any given time. For example, the demand for over-theroad truck drivers is very strong at this writing (a tight labor market). Yet with downsizing and mergers in the banking industry, there is a surplus of middlelevel banking managers (a loose market).

There are many ways to identify labor markets, including by geographical area, type of skill, and educational level. Some labor market segments might include managerial, clerical, professional and technical, and blue collar. Classified differently, some markets are local, others regional, others national; and there are international labor markets as well. For instance, an interesting labor market segment opened up with the demise of the Soviet Union. A number of excellent Soviet scientists became available due to the absence of job opportunities in their own countries. Several research organizations, including Sun Microsystems, have recruited them for jobs. Many of these recruits have continued to live in their home countries and are linked electronically to their employers in the United States.

Recruiting locally for a job market that is really national likely will result in disappointing applicant rates. For example, attempting to recruit a senior accounting faculty member in a small town is not likely to be successful. Conversely, it may not be necessary to recruit nationally for workers in unskilled positions on the assembly line. The job qualifications needed and the distribution of the labor supply determine which labor markets are relevant.

Changes in a labor market may force changes in recruiting efforts. If a new major employer locates in a regional labor market, then other employers may see a decline in their numbers of applicants. For instance, when three riverboat casinos, employing a total of 3,000 workers, opened in Council Bluffs, Iowa, many employers in the area noticed a dramatic decrease in the number of applicants for job openings outside of the casino industry. Also, some employers, particularly smaller manufacturing firms, had to raise their wages to prevent turnover of existing workers. Similar occurrences have followed the opening of large automobile manufacturing plants in South Carolina, Tennessee, Kentucky, and Alabama.

To understand the components of labor markets in which recruiting takes place, three different concepts must be considered. Those three groups are labor force population, applicant population, and applicant pool. The labor force population includes all individuals who are available for selection if all possible recruitment strategies are used. This vast array of possible applicants may be reached in very different ways. Different recruiting methods for example, newspaper ads versus college recruiting will reach different segments of the labor force population.

The applicant population is a subset of the labor force population that is available for selection using a particular recruiting approach. For example, an organization might limit its recruiting for management trainees to MBA graduates from major universities. This recruiting method will result in a very different group of applicants from those who would have applied had the employer chosen to advertise openings for management trainees on a local radio station.

At least four recruiting decisions affect the nature of the applicant population:

• Recruiting method: advertising medium chosen and considering use of employment agencies.
• Recruiting message: what is said about the job and how it is said.
• Applicant qualifications required: education level and amount of experience necessary.
• Administrative procedures: time of year recruiting is done, the follow-ups with applicants, and use of previous applicant files.
  

The applicant pool consists of all persons who are actually evaluated for selection. Many factors can affect the size of the applicant pool. For example, the organization mentioned previously is likely to interview only a small percentage of the MBA graduates at major universities, because not all graduates will want to be interviewed. The applicant pool at this step will depend on the reputation of the organization and industry as a place to work, the screening efforts of the organization, and the information available to the applicant population. Assuming a suitable candidate can be found, the final selection is made from the applicant pool.

The supply and demand of workers in the labor force population has a substantial impact on the staffing strategies of organizations. Internal labor markets also influence recruiting because many employers choose to promote from within whenever possible, but hire externally for entry-level jobs. A discussion of these and other strategic decisions to be made in recruiting follows.

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Human Resource Development

Development can be thought of as growing capabilities that go beyond those required by the current job; it represents efforts to improve employees’ ability to handle a variety of assignments. Development is beneficial to both the organization and the individuals. Employees and managers with appropriate experiences and abilities enhance the ability of an organization to compete and adapt to a changing competitive environment. In the development process, the individuals’ careers also gain focus and evolve.

At the organizational level of analysis, executives responsible for crafting the broader organizational strategies should establish a system for developing the people who will manage and achieve those identified strategies. The successful CEO is likely to have employee and managerial succession plans on several levels and in several different succession pathways as part of that development. Specific development needs can be identified by HR planning. Currently, more jobs are taking on the characteristics of knowledge work. People in such jobs must combine mastery of technical expertise with the ability to work in teams with other employees, form relationships with customers, and analyze their own practices. The practice of management increasingly involves guiding and integrating autonomous, highly skilled people.

The HR Development Process

Development should begin with the HR plans of an organization. As discussed in Chapter 2, such plans deal with analyzing, forecasting, and identifying the organizational needs for human resources. Also, HR planning allows anticipating the movement of people through the organization due to retirement, promotion, and transfers. It helps identify the capabilities that will be needed by the organization in the future and the development necessary to have people with those abilities on hand when needed.

Figure 11—2 illustrates the HR development process. As the figure shows, HR plans first identify necessary abilities and capacities. Such capacities can influence planning in return. The specific abilities needed also influence decisions about who will be promoted, and what the succession of leaders will be in the organization. Those decisions influence—and are influenced by—an assessment of the development needs in the organization. Two categories of development planning follow from this needs assessment: organizational and individual. Finally, the success of the developmental process must be evaluated and changes made as necessary over time.

Succession Planning

Succession planning can be an important part of development. For example, combined with skills training, management development, and promotion from within, it has been linked to “turning around” a plant acquired by another company. The general result for the plant was a large increase in capacity over four years, with virtually no infusion of new managers or employees. Existing talent was developed instead.

SUCCESSION IN SMALL AND CLOSELY HELD ORGANIZATIONS Succession planning can be especially important in small- and medium-sized firms, but studies show that these firms have done the least planning. Few small- and medium-sized firms have formal succession plans. In closely-held family firms (those that are not publicly traded on stock exchanges), many CEOs plan to pass the business on to a family member. Planning in advance for the orderly succession and development needs of the successor is important to avoid a host of potential problems.

REPLACEMENT CHARTS Traditional career paths in a company include a range of possible moves: lateral moves across departments, vertical moves within departments, and others. Each possible path represents actual positions, the experience needed to fill the positions, and the relationships of positions to each other. Replacement charts (similar to depth charts used by football teams to show the backup players at each position) give a simple model of the process. The purpose of replacement charts is to ensure that the right individuals are available at the right time, and that they have had sufficient experience to handle the targeted jobs. Replacement charts can be part of the development planning process by specifying the nature of development each employee needs to be prepared for the identified promotions. This information can be used to identify development needs and “promotion ladders” for people.

Selecting and Placing Human Resources

Selection is the process of choosing individuals who have relevant qualifications to fill jobs in an organization. Without qualified employees, an organization is in a poorer position to succeed. A vivid case in point is athletic organizations like the Dallas Cowboys, Atlanta Braves, and Los Angeles Lakers, who fail or succeed on their ability to select the coaches, players, and other employees to win games.

Selection is much more than just choosing the best available person. Selecting the appropriate set of knowledge, skills, and abilities (KSAs)—which come packaged in a human being—is an attempt to get a “fit” between what the applicant can and wants to do, and what the organization needs. The task is made more difficult because it is not always possible to tell exactly what the applicant really can and wants to do. Fit between the applicant and the organization affects both the employer’s willingness to make a job offer and an applicant’s willingness to accept a job. Fitting a person to the right job is called placement.

More than anything else, placement of human resources should be seen as a matching process. Gaps between an individual’s skills and the job requirements are common factors that lead to rejection of an applicant. How well an employee is matched to a job affects the amount and quality of the employee’s work. This matching also directly affects training and operating costs. Workers who are unable to produce the expected amount and quality of work can cost an organization a great deal of money and time. Estimates are that hiring an inappropriate employee costs an employer three to five times that employee’s salary before it is resolved.2 Yet hiring mistakes are relatively common.

Good selection and placement decisions are an important part of successful HR management. Some would argue that these decisions are the most important part. Productivity improvement for an employer may come from changes in incentive pay plans, improved training, or better job design; but unless the employer has the necessary people with the appropriate KSAs in place, those changes may not have much impact. The very best training will not enable someone with little aptitude for a certain job to do that job well and enjoy it.

To put selection decisions in perspective, consider that organizations on average reject a high percentage of applicants. In some situations about five out of six applicants for jobs are rejected. Figure 9—1 depicts the reasons why employers most often reject applicants. Perhaps the best perspective on selection and placement comes from two traditional HR truisms that clearly identify the importance of effective employment selection.

• “Good training will not make up for bad selection.” The implication here is that when the right people with the appropriate KSAs are not selected for jobs, it is very difficult for the employer to recover later by somehow trying to train those individuals without the proper aptitude, interests, or other KSA deficiencies.
  

• “If you don’t hire the right one, your competitor will.” There is an opportunity cost in failure to select the right employee, and that cost is that the “right one” went somewhere else.

Criteria, Predictors, and Job Performance

At the heart of an effective selection system is knowledge of what constitutes appropriate job performance and what characteristics in employees are associated with that performance.4 Once the definition of employee success (performance) is known, the employee specifications required to achieve that success can be determined. A selection criterion is a characteristic that a person must have to do the job successfully. A certain preexisting ability is often a selection criterion. One example is the criterion appropriate employee permanence, which considers that a person must stay in a job long enough for the employer at least to break even on the training and hiring expenses incurred to hire the employee. Figure 9—3 shows that ability, motivation, intelligence, conscientiousness, appropriate risk, and permanence might be good selection criteria for many jobs. To predict whether a selection criterion (such as “motivation” or “ability”) is present, employers try to identify predictors as measurable indicators of selection criteria. For example, in Figure 9—3 good predictors of the criterion “appropriate permanence” might be individual interests, salary requirements, and tenure on previous jobs.

The information gathered about an applicant should be focused on finding predictors of the likelihood that the applicant will be able to perform the job well. Predictors can take many forms, but they should be job related, valid, and reliable. A test score can be a predictor of success on the job only if it is valid. Previous experience can be a predictor of success if it is related to the necessary performance on the current job. Any selection tool used (for example, application form, test, interview, education requirements, or years of experience

required) should be used only if it is a valid predictor of job performance. Using invalid predictors can result in selecting the “wrong” candidate and rejecting the “right” one.

VALIDITY Validity is the correlation between a predictor and job performance. As mentioned in Chapter 5, validity occurs to the extent that a predictor actually predicts what it is supposed to predict. Validity depends on the situation in which the selection device is being used.5 For example, a test designed to predict aptitude for child-care jobs might not be valid in predicting sales potential in a candidate for a sales representative.

RELIABILITY Reliability of a predictor is the extent to which it repeatedly produces the same results, over time. For example, if the same person took a test in December and scored 100, but upon taking it in March scored significantly higher, the test would not be highly reliable. Thus, reliability has to do with consistency, and predictors that are useful in selection should be consistent.

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Careers

A career is the sequence of work-related positions a person occupies throughout life. People pursue careers to satisfy deeply individual needs. At one time, identifying with one employer seemed to fulfill many of those needs. Now, the distinction between the individual’s career as the organization sees it and the career as the individual sees it is very important.

Organization-Centered vs. Individual-Centered Career Planning

Career planning can be somewhat confusing, because two different perspectives exist. Career planning can be organization centered, individual centered, or both. Organization-centered career planning focuses on jobs and on constructing career paths that provide for the logical progression of people between jobs in an organization. These paths are ones that individuals can follow to advance in certain organizational units. For example, a person might enter the sales department as a sales counselor, then be promoted to account director, to sales manager, and finally to vice-president of sales.

Individual-centered career planning focuses on individuals’ careers rather than organizational needs. It is done by employees themselves, and individual goals and skills are the focus of the analysis. Such analyses might consider situations both inside and outside the organization that could expand a person’s career.

Organizational retrenchment and downsizing have changed career plans for many people. They have found themselves in “career transition”—in other words, in need of finding other jobs. Small businesses, some started by early retirees from big companies, have provided many of the new career opportunities.

How People Choose Careers

Four general individual characteristics affect how people make career choices.

1. Interests: People tend to pursue careers that they believe match their interests.
2. Self-image: A career is an extension of a person’s self-image, as well as a molder of it.
   
3. Personality: This factor includes an employee’s personal orientation (for example, whether the employee is realistic, enterprising, and artistic) and personal needs (including affiliation, power, and achievement needs).
   
4. Social backgrounds: Socioeconomic status and the educational and occupation level of a person’s parents are a few factors included in this category.
   

Less is known about how and why people choose specific organizations than about why they choose specific careers. One obvious factor is the availability of a job when the person is looking for work. The amount of information available about alternatives is an important factor as well. Beyond these issues, people seem to pick an organization on the basis of a “fit” between the climate of the organization as they perceive it and their own personal characteristics. Many factors may influence job choice, including the gender of the job informant who passed along job information.

Career Plateaus

Those who do not job-hop may face another problem: career plateaus. As the babyboom generation reaches midlife, and as large employers cut back on their workforces, increasing numbers of managers will find themselves at a career plateau. Plateauing may seem a sign of failure to many people, and plateaued employees can cause problems for employers when frustration affects performance. Perhaps in part because of plateauing, many middle managers’ optimism about opportunity for advancement has declined. Even though these managers have more responsibility and less influence in the decision-making process, the result has been leaner, more competitive organizations with few promotion opportunities.

Moonlighting As a Career Strategy

Moonlighting traditionally has been defined as work outside a person’s regular
employment that takes 12 or more additional hours per week. More recently, the
concept of moonlighting has been expanded to include such activities as selfemployment, investments, hobbies, and other interests for which additional remuneration is received. The perception that moonlighting is a fixed outside commitment is no longer sufficiently broad, because the forms that it may take
are varied and sometimes difficult to identify.

Moonlighting is no longer just a second job for the underpaid blue-collar worker but also a career development strategy for some professionals. A growing number of managers are dividing their work efforts by moonlighting as consultants or self-employed entrepreneurs. Consulting not only increases their income but also provides new experiences and diversity to their lives. Many individuals also view such activities as providing extra security, especially in these times of layoffs among middle managers.

Most moonlighting managers cannot afford to walk away from their corporate salaries, but they are looking elsewhere for fulfillment. An HR manager at a TV network moonlights by working for a training firm that she and a friend set up. An advertising executive at a cosmetics company accepts freelance assignments from his employer’s clients. A computer software expert secretly develops a home computer program to market on his own.

If someone is working for a company and freelancing in the same field, questions bout whose ideas and time are involved are bound to arise. Some organizations threaten to fire employees who are caught moonlighting, mainly to keep them from becoming competitors.36 But that does not seem to stop the activities. Other organizations permit freelance work so long as it is not directly competitive. Many believe that staff members should be free to develop their own special interests.

There is evidence that some people who hold multiple jobs work a second job in preparation for a career change. Whether or not a career change is sought, the concept of “job insurance” plays a role, as mentioned earlier. Moonlighting can be viewed in the same context as auto, car, home, or life insurance. The second job can serve as a backup in the event the primary job is lost.

Moonlighting is not without its problems. The main argument against moonlighting has been that energy is being used on a second job that should be used on the primary job. This division of effort may lead to poor performance, absenteeism, and reduced job commitment. However, these arguments are less valid with a growing number of employees.

Key for employers in dealing with moonlighting employees is to devise and communicate a policy on the subject. Such a policy should focus on defining those areas in which the employer limits employee activities because of business reasons.

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Job Design

Individual responses to jobs vary. A job may be motivating to one person but not to someone else. Also, depending on how jobs are designed, they may provide more or less opportunity for employees to satisfy their job-related needs. For example, a sales job may furnish a good opportunity to satisfy social needs, whereas a training assignment may satisfy a person’s need to be an expert in a certain area. A job that gives little latitude may not satisfy an individual’s need to be creative or innovative. Therefore, managers and employees alike are finding that understanding the characteristics of jobs requires broader perspectives than it did in the past. Designing or redesigning jobs encompasses many factors. Job design refers to organizing tasks, duties, and responsibilities into a productive unit of work. It involves the content of jobs and the effect of jobs on employees. Identifying the components of a given job is an integral part of job design. More attention is being paid to job design for three major reasons:

• Job design can influence performance in certain jobs, especially those where employee motivation can make a substantial difference. Lower costs through reduced turnover and absenteeism also are related to good job design.

• Job design can affect job satisfaction. Because people are more satisfied with certain job configurations than with others, it is important to be able to identify what makes a “good” job.

• Job design can affect both physical and mental health. Problems such as hearing loss, backache, and leg pain sometimes can be traced directly to job design, as can stress and related high blood pressure and heart disease.

Not everyone would be happy as a physician, as an engineer, or as a dishwasher. But certain people like and do well at each of those jobs. The person/job fit is a simple but important concept that involves matching characteristics of people with characteristics of jobs. Obviously, if a person does not fit a job, either the person can be changed or replaced, or the job can be altered. In the past, it was much more common to make the round person fit the square job. However, successfully “reshaping” people is not easy to do. By redesigning jobs, the person/job fit can be improved more easily. Jobs may be designed properly when they are first established or “reengineered” later.

Nature of Job Design

Identifying the components of a given job is an integral part of job design. Designing or redesigning jobs encompasses many factors, and a number of different techniques are available to the manager. Job design has been equated with job enrichment, a technique developed by Frederick Herzberg, but job design is much broader than job enrichment alone.

JOB ENLARGEMENT AND JOB ENRICHMENT

Attempts to alleviate some of the problems encountered in excessive job simplification fall under the general headings of job enlargement and job enrichment. Job enlargement involves broadening the scope of a job by expanding the number of different tasks to be performed. Job enrichment is increasing the depth of a job by adding responsibility for planning, organizing, controlling, and evaluating the job. A manager might enrich a job by promoting variety, requiring more skill and responsibility, providing more autonomy, and adding opportunities for personal growth. Giving an employee more planning and controlling responsibilities over the tasks to be done also enriches. However, simply adding more similar tasks does not enrich the job. Some examples of such actions that enrich a job include:

• Giving a person an entire job rather than just a piece of the work.

• Giving more freedom and authority so the employee can perform the job as he or she sees fit.

• Increasing a person’s accountability for work by reducing external control.

• Expanding assignments so employees can learn to do new tasks and develop new areas of expertise.

• Giving feedback reports directly to employees rather than to management only.

JOB ROTATION

The technique known as job rotation can be a way to break the monotony of an otherwise routine job with little scope by shifting a person from job to job. For example, one week on the auto assembly line, John Williams attaches doors to the rest of the body assembly. The next week he attaches bumpers. The third week he puts in seat assemblies, then rotates back to doors again the following week. Job rotation need not be done on a weekly basis. John could spend one-third of a day on each job or one entire day, instead of a week, on each job. It has been argued, however, that rotation does little in the long run to solve the problem of employee boredom. Rotating a person from one boring job to another may help somewhat initially, but the jobs are still perceived to be boring. The advantage is that job rotation does develop an employee who can do many different jobs.

Job Characteristics

The job-characteristics model by Hackman and Oldham identifies five important design characteristics of jobs. Figure 3—6 shows that skill variety, task identity, and task significance affect meaningfulness of work. Autonomy stimulates responsibility, and feedback provides knowledge of results. Following is a description of each characteristic.

SKILL VARIETY The extent to which the work requires several different activities for successful completion indicates its skill variety. For example, low skill variety exists when an assembly-line worker performs the same two tasks repetitively. The more skills involved, the more meaningful the work. Skill variety can be enhanced in several ways. Job rotation can break the monotony of an otherwise routine job with little scope by shifting a person from job to job. Job enlargement may as well.

TASK IDENTITY The extent to which the job includes a “whole” identifiable unit of work that is carried out from start to finish and that results in a visible outcome is its task identity. For example, one corporation changed its customer
service processes so that when a customer calls with a problem, one employee, called a Customer Care Advocate, handles most or all facets of the problem from maintenance to repair. As a result, more than 40% of customer problems are resolved by one person while the customer is still on the line. Previously, less than


1% of the customer problems were resolved immediately because the customer service representative had to complete paperwork and forward it to operations, which then followed a number of separate steps using different people to resolve problems. In the current system, the Customer Care Advocate can identify more closely with solving a customer’s problem.

TASK SIGNIFICANCE The amount of impact the job has on other people indicates its task significance. A job is more meaningful if it is important to other people for some reason. For instance, a soldier may experience more fulfillment when defending his or her country from a real threat than when merely training to stay ready in case such a threat arises. In the earlier example, the Customer Care Advocate’s task has significance because it affects customers considerably.

AUTONOMY The extent of individual freedom and discretion in the work and its scheduling indicates autonomy. More autonomy leads to a greater feeling of personal responsibility for the work. Efforts to increase autonomy may lead to what was characterized as job enrichment by Frederick Herzberg. Examples of actions that increase autonomy include giving more freedom and authority so the employee can perform the job as he or she sees fit and increasing an employee’s accountability for work by reducing external control.


FEEDBACK The amount of information employees receive about how well or how poorly they have performed is feedback. The advantage of feedback is that it helps employees to understand the effectiveness of their performance and contributes to their overall knowledge about the work. At one firm, feedback reports from customers who contact the company with problems are given directly to the employees who handle the customers’ complaints, instead of being given only to the department manager.

Consequences of Job Design

Jobs designed to take advantage of these important job characteristics are more likely to be positively received by employees. Such characteristics help distinguish between “good” and “bad” jobs. Many approaches to enhancing productivity and quality reflect efforts to expand some of the job characteristics. Because of the effects of job design on performance, employee satisfaction, health, and many other factors, many organizations are changing or have already changed the design of some jobs. A broader approach is reengineering work and jobs.

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Individual Motivation

The performance that employers look for in individuals rests on ability, motivation, and the support individuals receive; however, motivation is often the missing variable. Motivation is the desire within a person causing that person to act. People usually act for one reason: to reach a goal. Thus, motivation is a goal directed drive, and it seldom occurs in a void. The words need, want, desire, and drive are all similar to motive, from which the word motivation is derived. Understanding motivation is important because performance, reaction to compensation, and other HR concerns are related to motivation. Approaches to understanding motivation differ because many individual theorists have developed their own views and theories. They approach motivation from different starting points, with different ideas in mind, and from different backgrounds. No one approach is considered to be the “ultimate.” Each approach has contributed to the understanding of human motivation.

Content Theories of Motivation

Content theories of motivation are concerned with the needs that people are attempting to satisfy. The most well-known theories are highlighted briefly next.

MASLOW’S HIERARCHY OF NEEDS

One theory of human motivation that has received a great deal of exposure in the past was developed by Abraham Maslow. In this theory, Maslow classified human needs into five categories that ascend in a definite order. Until the more basic needs are adequately fulfilled, a person will not strive to meet higher needs. Maslow’s well-known hierarchy is composed of (1) physiological needs, (2) safety and security needs, (3) belonging and love needs, (4) esteem needs, and (5) self-actualization needs. An assumption often made by those using Maslow’s hierarchy is that workers in modern, technologically advanced societies basically have satisfied their physiological, safety, and belonging needs. Therefore, they will be motivated by the needs for self-esteem, esteem of others, and then self-actualization. Consequently, conditions to satisfy these needs should be present at work; the job it self should be meaningful and motivating.

HERZBERG’S MOTIVATION/HYGIENE THEORY

Frederick Herzberg’s motivation/hygiene theory assumes that one group of factors, motivators, accounts for high levels of motivation. Another group of factors, hygiene, or maintenance factors, can cause discontent with work. Figure 3—4 compares Herzberg’s motivators and hygiene factors with Maslow’s needs of hierarchy. The implication of Herzberg’s research for management and HR practices is that although managers must carefully consider hygiene factors in order to avoid employee dissatisfaction, even if all these maintenance needs are addressed, people may not be motivated to work harder. Only motivators cause employees to exert more effort and thereby attain more productivity, and this theory suggests that managers should utilize the motivators as tools to enhance employee performance.


Process Theories of Motivation

Process theories suggest that a variety of factors may prove to be motivating, depending on the needs of the individual, the situation the individual is in, and the rewards the individual expects for the work done. Theorists who hold to this view do not attempt to fit people into a single category, but rather accept human differences. One process theory by Lyman Porter and E.E. Lawler focuses on the value a person places on a goal as well as the person’s perceptions of workplace equity, or fairness, as factors that influence his or her job behavior. In a work situation, perception is the way an individual views the job. Figure 3—5 contains a simplified Porter and Lawler model, which indicates that motivation is influenced by people’s expectations. If expectations are not met, people may feel that they have been unfairly treated and consequently become dissatisfied.

Using the Porter and Lawler model, suppose that a salesclerk is motivated to expend effort on her job. From this job she expects to receive two types of rewards: intrinsic (internal) and extrinsic (external). For this salesclerk, intrinsic rewards could include a feeling of accomplishment, a feeling of recognition, or other motivators. Extrinsic rewards might be such items as pay, benefits, good working conditions, and other hygiene factors. The salesclerk compares her performance with what she expected and evaluates it in light of both types of rewards she receives. She then reaches some level of job satisfaction or dissatisfaction. Once this level is reached, it is difficult to determine what she will do. If she is dissatisfied, she might put forth less effort in the future, she might


work harder to get the rewards she wants, or she might just accept her dissatisfaction. If she is highly satisfied, it does not always mean she will work harder. She may even slack off a bit, saying, “I got what I wanted.” The essence of the Porter and Lawler view of motivation is perception. In addition, as the feedback loop in Figure 3—5 indicates, performance leads to satisfaction rather than satisfaction leading to performance.

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Organizational Strategy and Human Resources

The development of specific business strategies must be based on the areas of strength that an organization has. Referred to as core competencies by Hamel and Prahalad, they are the foundation for creating the competitive advantage for an organization. A core competency is a unique capability in the organization that creates high value and that differentiates the organization from its competition.

Human Resources as a Core Competency

Certainly, many organizations have voiced the idea that their human resources differentiate them from their competitors. Organizations as widely diverse as Federal Express, Nordstrom’s Department Stores, and Gateway Computers have focused on human resources as having special strategic value for the organization. The significance of human resources as a core competency

was confirmed in a study of 293 U.S. firms. The study found that HR management effectiveness positively affected organizational productivity, financial performance, and stock market value. Some ways that human resources become a core competency are through attracting and retaining employees with unique professional and technical capabilities, investing in training and development of those employees, and compensating them in ways that keep them competitive with their counterparts in other organizations. The value of human resources was demonstrated several years ago, when United Parcel Service workers went on strike. In offices around the country, customers had concerns that the brown-shirted UPS drivers, whom customers often knew by their first names, were not working. Fortunately for UPS, its drivers, and their customers, the strike was settled relatively quickly. Another illustration is what happened in the banking industry with the many mergers and acquisitions. Smaller, community-oriented banks have picked up numerous small- and medium-sized commercial loan customers because they emphasize that “you can talk to the same person,” rather than having to call an automated service center in another state.Resource-Based Organizational Strategies

There has been growing recognition that human resources contribute to sustaining a competitive advantage for organizations. Jay Barney and others have focused on four factors that are important to organizational strategic accomplishments.4 Those factors, called the VRIO framework, are related to human resources as follows:

• Value: Human resources that can create value are those that can respond to external threats and opportunities. Having this ability means that employees can make decisions and be innovative when faced with environmental changes.

• Rareness: The special capabilities of people in the organization provide it significant advantages. Especially important is that the human resources in an organization be provided training and development to enhance their capabilities, so that they are continually seen as “the best” by customers and industry colleagues. This rareness also helps in attracting and retaining employees with scarce and unique knowledge, skills, and abilities. Reducing employee turnover is certainly important in preserving the rareness of human resources.

• Imitability: Human resources have a special strategic value when they cannot be easily imitated by others. Southwest Airlines, Disney, and Marriott Corporation each have created images with customers and competitors that they are different and better at customer service. Any competitors trying to copy the HR management “culture” created in these organizations would have to significantly change many organizational and HR aspects.

• Organization: The human resources must be organized in order for an entity to take advantage of the competitive advantages just noted. This means that the human resources must be able to work effectively together, and have HR policies and programs managed in ways that support the people working in the organization.

Using a VRIO framework as the foundation for HR management means that people are truly seen as assets, not as expenses. It also means that the culture of organizations must be considered when developing organizational and HR strategies.

Organizational Culture and HR Strategy

Organizational culture is a pattern of shared values and beliefs giving members of an organization meaning and providing them with rules for behavior. These values are inherent in the ways organizations and their members view themselves, define opportunities, and plan strategies. Much as personality shapes an individual, organizational culture shapes its members’ responses and defines what an organization can or is willing to do.

The culture of an organization is seen in the norms of expected behaviors, values, philosophies, rituals, and symbols used by its employees. Culture evolves over a period of time. Only if an organization has a history in which people have shared experiences for years does a culture stabilize. A relatively new firm, such as a business existing for less than two years, probably has not developed a stabilized culture.

Managers must consider the culture of the organization because otherwise excellent strategies can be negated by a culture that is incompatible with the strategies. Further, it is the culture of the organization, as viewed by the people in it, that affects the attraction and retention of competent employees.5 Numerous examples can be given of key technical, professional, and administrative employees leaving firms because of corporate cultures that seem to devalue people and create barriers to the use of individual capabilities. In contrast, by creating a culture that values people highly, some corporations have been very successful at attracting, training, and retaining former welfare recipients.

The culture of an organization also affects the way external forces are viewed. In one culture, external events are seen as threatening, whereas another culture views risks and changes as challenges requiring immediate responses. The latter type of culture can be a source of competitive advantage, especially if it is unique and hard to duplicate. This is especially true as an organization evolves through the life cycle in an industry.

Linking Organizational Strategies and HR Plans

Strategic planning must include planning for human resources to carry out the rest of the plan. Figure 2—3 shows the relationship among the variables that


ultimately determine the HR plans an organization will develop. Business strategy affects strategies and activities in the HR area. For example, several years ago, a large bank began planning to become one of the top financial institutions in the country. Two parts of its strategic plan were (1) to adopt a global focus and (2) to improve service. HR plans to support global goals included integrating compensation and benefits systems and hiring policies for international operations and domestic operations. Service improvement plans hinged on well trained, capable first-level employees. But an HR diagnosis turned up basic skills deficiencies in employees. As a result of HR planning, a series of programs designed to remedy basic skills problems in the workforce was developed. The coordination of company-wide strategic planning and strategic HR planning was successful in this case because HR plans supported corporate strategic plans.

The cost-leadership strategy requires an organization to “build” its own employees to fit its specialized needs. This approach requires a longer HR planning horizon. When specific skills are found to be needed for a new market or product, it may be more difficult to internally develop them quickly. However, with a differentiation strategy, responsiveness means that HR planning is likely to have a shorter time frame, and greater use of external sources will be used to staff the organization. The HR Perspective discusses a study that examined the involvement of HR executives when determining organizational strategies and core competencies.

source by Human Resource Management 9th Edition Robert L. Mathis John H

Human Resource Planning

The competitive organizational strategy of the firm as a whole becomes the basis for human resource (HR) planning, which is the process of analyzing and identifying the need for and availability of human resources so that the organization can meet its objectives. This section discusses HR planning responsibilities, the importance of HR planning in small and entrepreneurial organizations, and the HR planning process.

HR Planning Responsibilities

In most organizations that do HR planning, the top HR executive and subordinate staff specialists have most of the responsibilities for this planning. However, other managers must provide data for the HR specialists to analyze. In turn, those managers need to receive data from the HR unit. Because top managers are responsible for overall strategic planning, they usually ask the HR unit to project the human resources needed to implement overall organizational goals.

HR Planning in Evolving Small and Entrepreneurial Organizations

HR management and ultimately HR planning are critical in small and entrepreneurial organizations. “People problems” are among the most frustrating ones faced by small-business owners and entrepreneurs.

EVOLUTION OF HR ACTIVITIES

At the beginning of a small business’s existence, only very basic HR activities must be performed. Compensation and government mandated benefits must be paid. As the organization evolves, more employees must be recruited and selected. Also, some orientation and on-the-job training are necessary, though they are often done haphazardly. The evolution of the business proceeds through several stages. The focus of each stage reflects the needs of the organization at the time. In the initial stage, the organization first hires an HR clerk, then possibly an HR administrator. As the organization grows, it may add more HR professionals, often including an employment or benefits specialist. With further growth, other specialists, such as trainers, may be needed. From this point, additional clerical and specialist employees can be added, and separate functional departments (employment, compensation, benefits, and training) can evolve.

SMALL BUSINESS AND FAMILY ISSUES

One factor often affecting the planning of HR activities in small firms is family considerations. Particular difficulties arise when a growing business is passed on from one generation to another, resulting in a mix of family and non family employees. Some family members may use employees as “pawns” in disagreements with other family members in the firm. Also, non family employees may see different HR policies and rules being used for family members than for them. Key to the successful transition of a business from one generation to another is having a clearly identified HR plan. Crucial in small businesses is incorporating the role of key nonfamily members with HR planning efforts. Often, non family members have important capabilities and expertise that family members do not possess. Therefore, planning for the attraction and retention of these “outsiders” may be vital to the future success of smaller organizations. One survey of over 3,000 small businesses found that management succession was one of the top challenges faced by family-owned firms.

It even may be that the non family members will assume top management leadership roles, with some or all family members who are owners serving on the Board of Directors, but not being active managers in the firm. Additionally, non family executives may be the intermediaries who focus on the needs of the business when family member conflicts arise. Small businesses, depending on how small they are, may use the HR planning that follows, but in very small organizations the process is much more intuitive and often done entirely by the top executives, who often are family members.

HR Planning Process

Notice that the HR planning process begins with considering the organizational objectives and strategies. Then both external and internal assessments of HR needs and supply sources must be done and forecasts developed. Key to assessing internal human resources is having solid information, which is accessible through a human resource information system (HRIS). Once the assessments are complete, forecasts must be developed to identify the mismatch between HR supply and HR demand. HR strategies and plans to address the imbalance, both short and long term, must be developed. HR strategies are the means used to aid the organization in anticipating and managing the supply and demand for human resources. These HR strategies provide overall direction for how HR activities will be developed and managed. Finally, specific HR plans are developed to provide more specific direction for the management of HR activities.

DEVELOPING THE HR PLAN

The HR plan must be guided by longer-term plans. For example, in planning for human resources, an organization must consider the allocation of people to jobs over long periods of time—not just for the next month or even the next year. This allocation requires knowledge of any foreseen expansions or reductions in operations and any technological changes that may affect the organization. On the basis of such analyses, plans can be made for shifting employees within the organization, laying off or otherwise cutting back the number of employees, or retraining present employees. Factors to consider include the current level of employee knowledge, skills, and abilities in an organization and the expected vacancies resulting from retirement, promotion, transfer, sick leave, or discharge.

In summary, the HR plan provides a road map for the future, identifying where employees are likely to be obtained, when employees will be needed, and what training and development employees must have. Through succession planning, employee career paths can be tailored to individual needs that are consistent with organizational requirements. Further, the compensation system has to fit with the performance appraisal system, which must fit with HR development decisions, and so on. In summary, the different HR activities must be aligned with the general business strategy, as well as the overall HR strategy, in order to support business goals.

EVALUATING HR PLANNING

If HR planning is done well, the following benefits should result: l Upper management has a better view of the human resource dimensions of business decisions. l HR costs may be lower because management can anticipate imbalances before they become unmanageable and expensive. l More time is available to locate talent because needs are anticipated and identified before the actual staffing is required. l Better opportunities exist to include women and minority groups in future growth plans. l Development of managers can be better planned. To the extent that these results can be measured, they can form the basis for evaluating the success of HR planning. Another approach is to measure projected levels of demand against actual levels at some point in the future. But the most telling evidence of successful HR planning is an organization in which the human resources are consistently aligned with the needs of the business over a period of time.

source by Human Resource Management 9th Edition Robert L. Mathis John H

Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole (an office held by an individual natural person, which is a legal entity separate from that person) or a corporation aggregate (involving more persons). In American and, increasingly, international usage, the term denotes a body corporate formed to conduct business, and this meaning of corporation is discussed in the remaining part of this entry (the limited company in British usage).

Corporations exist as a product of corporate law, and their rules balance the interests of the shareholders that invest their capital and the employees who contribute their labor. People work together in corporations to produce value and generate income. In modern times, corporations have become an increasingly dominant part of economic life. People rely on corporations for employment, for their goods and services, for the value of the pensions, for economic growth and social development.

The defining feature of a corporation is its legal independence from the people who create it. If a corporation fails, shareholders normally only stand to lose their investment (and possibly, in the unusual case where the shares are not fully paid up, any amount outstanding on them - and not even that in the case of a No liability company), and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation's creditors unless they have separately varied this, e.g. with personal guarantees. This rule is called limited liability, and it is why the names of corporations in the UK end with "Ltd." (or some variant like "Inc." and "plc").

Despite not being natural persons, corporations are recognized by the law to have rights and responsibilities like actual people. Corporations can exercise human rights against real individuals and the state,and they may be responsible for human rights violations. Just as they are "born" into existence through its members obtaining a certificate of incorporation, they can "die" when they lose money into insolvency. Corporations can even be convicted of criminal offences, such as fraud and manslaughter. Five common characteristics of the modern corporation, according to Harvard University Professors Hansmann and Kraakman are...

• delegated management, in other words, control of the company placed in the hands of a board of directors
• limited liability of the shareholders (so that when the company is insolvent, they only owe the money that they subscribed for in shares)
• investor ownership, which Hansmann and Kraakman take to mean, ownership by shareholders.
• separate legal personality of the corporation (the right to sue and be sued in its own name)
• transferrable shares (usually on a listed exchange, such as the London Stock Exchange, New York Stock Exchange or Euronext in Paris).

Ownership of a corporation is complicated by increasing social and economic interdependence, as different stakeholders compete to have a say in corporate affairs. In most developed countries excluding the English speaking world, company boards have representatives of both shareholders and employees to "codetermine" company strategy. Calls for increasing corporate social responsibility are made by consumer, environmental and human rights activists, and this has led to larger corporations drawing up codes of conduct. In Australia, Canada, the United Kingdom and the United States, corporate law has not yet stepped into that field, and its building blocks remain the study of corporate governance and corporate finance.

Human Resources

Human resources is a term with which some organizations describe the combination of traditionally administrative personnel functions with performance, Employee Relations and resource planning. The field draws upon concepts developed in Industrial/Organizational Psychology. Human resources has at least two related interpretations depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of four factors of production.

The more common usage within corporations and businesses refers to the individuals within the firm, and to the portion of the firm's organization that deals with hiring, firing, training, and other personnel issues. This article addresses both definitions.

The objective of human resources is to maximize the return on investment from the organization's human capital and minimize financial risk. It is the responsibility of human resource managers to conduct these activities in an effective, legal, fair, and consistent manner.

Human resource management serves these key functions:

· Selection

· Training and Development

· Performance Evaluation and Management

· Promotions

· Redundancy

· Industrial and Employee Relations

· Record keeping of all personal data.

· Compensation, pensions, bonuses etc in liaison with Payroll

· Confidential advice to internal 'customers' in relation to problems at work

· Career development

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires to identify the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. One view of this trend is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can move from one enterprise to another with little controversy or difficulty in adapting.

An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital.

The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts.

An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society.

Source by wikipedia.org