The HR expertise domain of Organization Knowledge counts toward 16 percent for both exams. This domain covers the essential HR knowledge needed for relating to the organization. The following are the functional areas that fall within the Organization Knowledge domain:

•   Functional area 6—Structure of the HR Function

•   Functional area 7—Organizational Effectiveness & Development

•   Functional area 8—Workforce Management

•   Functional area 9—Employee and Labor Relations

•   Functional area 10—Technology Management

HR professionals are expected to know how to perform the following Body of Competency and Knowledge (BoCK) statements for the Organization Knowledge domain:

•   01 Creating an effective HR function fully aligned to the organizational strategy

•   02 Enhancing the effectiveness of the organization at large

•   03 Ensuring that the organization’s talent pool has the skills and capabilities to achieve organizational goals

•   04 Promoting positive relationships with employees

•   05 Leveraging technology to improve HR functioning

Functional Area 6—Structure of the HR Function

Here is SHRM’s BoCK definition: “Structure of the HR Function encompasses the people, processes, theories, and activities involved in the delivery of HR-related services that create and drive organizational effectiveness.”¹

All career levels of HR are expected to know and support the different types of HR service models and understand how HR services are integrated. The HR organization must be structured to meet the needs of the organization and its stakeholders. Gathering feedback, collecting data, and using the appropriate metrics to determine HR performance and satisfaction all enable HR professionals to evaluate HR’s effectiveness and identify areas needing improvement and change.

Key Concepts

•   Approaches to HR operational integration (i.e., how HR structures work together)

•   Approaches to HR function/service models (e.g., centralized versus decentralized)

•   Approaches to HR structural models (e.g., Center of Excellence [COE], shared services)

•   Elements of the HR function (e.g., recruiting, talent management, compensation, benefits)

•   HR-function metrics (e.g., HR staff per full-time employee, customer satisfaction, key performance indicators, Balanced Scorecard)

•   HR staff roles, responsibilities, and functions (e.g., generalists, specialists, HR business partners)

•   Outsourcing of HR functions

These are the proficiency indicators that SHRM has identified as key concepts:

The Strategic Role of HR

The strategic role of HR professionals is to strengthen the relationship between the employees and the employer.

The Evolving Role of HR Professionals

The role of human resources has evolved over the years, probably more so than any other department function in an organization. In the old days, HR managers simply shuffled paper, keeping payroll records and benefit assignments straight. In the early twentieth century, HR as a specialized function began with a narrow focus of hiring and keeping records of employees, an operational and administrative function. Changes in HR have been stimulated by external changes, and a major change has been the need for HR professionals to participate in strategic planning and then implementation of those plans.

HR’s staff typically provided three types of support: advice, service, and control.

•   Advice Advising line management on workforce matters including policies and laws, providing solutions and procedural steps, offering assistance and guidance on employee issues, diagnosing problems or gathering facts, and providing resources

•   Service Maintaining records, hiring, training, answering, and clarifying information within a broad customer base, including management, employees, legal and regulatory agencies, applicants, retirees, families of employees, and vendors

•   Control An authoritative role involved in consistency of policy application, evaluation of employee performance, corrective action, and designing or implementation of employee programs

While the focus continues to have a foundational basis in the day-to-day operational role (acquisition, development, resolving issues, and communications), along with administrative transactional activities (maintaining a human resource information system [HRIS]), the significance of HR’s contributions has become more apparent as a business strategist with a forward-thinking, long-term global focus that includes protecting the organization from potential risks. HR professionals have earned a seat at the executive round table, contributing to the organization’s direction with strategic solutions for talent management, creating organizational culture, formulating and developing strategies, and balancing the external and internal environments to help the organization achieve its goals. The title of chief human resource officer (CHRO) is common in today’s large organizations—a recognition that indicates HR has come a long way up the perceived value-added scale. In today’s global competitive business climate, the HR role must contribute in quantifiable business terms, outlining a return on investment (ROI) that ensures the effective and efficient use of its human capital.

Table 5-1 provides a brief historical perspective of the evolution of the human resource function.

Table 5-1     Evolution of Human Resources

HR as a Profession   A job is something you can go to every day, perform the assigned duties, and go home without any further attachment. Human resource management used to fall into this category. Now, however, HR professionals are placed into a role that demands strategic thinking and strategic planning with an eye on overall organizational health and success. Early on, “personnel management” was a staff function. Later “human resource management” became a management function. In recent years, HR management has become a strategic function helping the organization achieve its strategic goals.

HR in the Twentieth Century   Following the creation of a “personnel department” in the mid-twentieth century, people in that portion of the organization were expected to shift their focus toward a broader perspective of HR management. It became more than a personnel and payroll support function.

Administrative Services   HR workers were assigned duties including the following:

•   Personnel records management

•   Benefits enrollment

•   Attendance tracking

•   Training recordkeeping

•   Employee data management systems such as HRISs

•   Employee award tracking

•   Office party planning

Operational Services   Direct support of the operational units in the employer organization became necessary. The following were added to the HR responsibilities:

•   Labor relations expertise

•   Recruiting and staffing

•   Training preparation and management such as operations and management skills

•   Policy development

•   Employee handbook management

HR in the Twenty-First Century   As we transition into the new century, HR professionals find themselves involved more with strategic planning and implementation.

Strategic Administrative Role   The functions handled in the twentieth century still exist, but they have morphed into a strategic support role. Personnel records management is now responsible for assessing employee benefit programs as they contribute to the financial success of the organization. This includes impact analysis on employee recruiting and retention and its effect on the profit and loss performance of the company. Employee award tracking has evolved into a strategic assessment of programs that will improve employee retention and engagement. Office party planning has gone away in many organizations. In its place is the strategic assessment and selection of employee support programs, such as free or low-cost food services, and specific employee motivation programs.

Strategic Operational Role   Labor relations has grown over the years with the transitioning of union contract protections to laws that apply to most employers. Those protections such as wage and hour restrictions now are available to most employees in the country. The benefits offered by labor unions these days are less numerous than they used to be. Most of the old benefits are now legal protections at both the state and federal levels.

Policy development involves a wide swath of topics from employee benefit offerings to disciplinary processes. Those policies are being assessed based on their strategic impact on the organization and its mission. Once policies are developed, employee handbook content can be prepared that communicates those policies to the employee body. Even the designation employee is being altered by some organizations. Some of the terms now used include cast member, crew member, associate, and staff member.

Changes That Impact the HR Profession

The largest impact on the HR profession has come from state and federal legislative bodies creating new laws that contain employee protections that once were available only to union members within a bargaining unit.

David Ulrich presents his approach in terms of deliverables, or outcomes, for which HR should be responsible in new strategic roles: strategy execution, administrative efficiency, employee contribution, and capacity for change.² In the course of delivering in these four areas, he describes four corresponding roles for HR to play within a business: a) as a strategic partner working to align HR and business strategy, b) as an administrative expert working to improve organizational processes and deliver basic HR services, c) as an employee champion, listening and responding to employees’ needs, and d) as a change agent managing change processes to increase the effectiveness of the organization. One of unique things about Ulrich’s approach is that it includes all of the ways that HR can deliver value to an organization, rather than shifting focus from one area to another.

Workforce/Workplace Changes   According to a recent article in Work Design Magazine, “By 2027, global socioeconomic shifts will result in larger changes in worker type, available jobs, and ways of working. The rise of the middle class in emerging markets will have a large impact on the overall workforce. Currently, one-third of the global middle class is located in Asia Pacific. By 2030, this proportion will double, due in large part to expansions of the middle class in countries like China and India. This growth will result in changes in buying habits, ultimately driving economic growth. According to a Morgan Stanley estimate, by 2030 middle-class spending will almost double that of 2010.

“New patterns will emerge in occupations: jobs in service-oriented industries such as healthcare and hospitality sustain growth, but a significant portion of workers gravitate towards more flexible work arrangements and freelance jobs. There will be an influx of jobs enabled by emergent technologies.”³

Globalization   Globalization is not a fad. It is a movement that will only solidify the ways of doing business as the days go by. The impacts it will have on employer organizations will be profound. Employee groups in remotely operating locations with different laws and customs present challenges to professional HR managers. The role of diversity management will grow even bigger than it is today. Value added will be the operating expectation for every group, including HR. If something can’t be measured and shown to add value, the HR organization will be hard-pressed to convince the C suite that it should be done.

Ethics   In the past, HR professionals had to wrestle with different employment laws in the different states where they had employees working. In the future, it will be necessary to wrestle with laws and customs in multiple countries. In some countries there is an expectation that money will be offered to those approving work projects. That is unacceptable to an HR professional’s ethics, so dilemmas will arise when the strategic repositioning of workforce groups becomes necessary. It is incumbent upon HR professionals to reconcile those differences so that the work can get done and the local expectations are satisfied without violating U.S. laws.

Organizational Growth or Retraction   When the size of an employment organization increases or decreases, there are considerations for legal compliance and, equally important, for the satisfaction of employee morale requirements. When groups are small, there is a tendency for individuals to bond easily around the mission of the groups. As groups grow, that sense is diluted, and bonding can become more difficult. There can be issues related to who is promoted and who is not or who is given a desirable work assignment and who is passed over. Leadership from HR professionals takes on critical importance. How they communicate and help employees through difficult periods of time will determine how well the organization can meet its strategic objectives.

When organizations reduce their employee headcount, other problems occur that require HR interventions and leadership. Layoffs, downsizing programs, relocations, and constructive discharges can all result in employee dissatisfaction. How HR professionals handle these difficulties will determine how well the force reduction will reach its goals.

Movement of Decision-Making   As new workforce locations are opened in remote countries or even remote locations within the United States, there is a risk that they will experience the “out of sight, out of mind” syndrome. Managing people from a distance involves permitting and even encouraging decision-making by people at those locations. Working out what decisions should be local and what should be held for headquarters becomes an operational requirement that HR can help with.

Extended Organizations   When manufacturing, marketing, or administrative organizations find it necessary to create workforce placement in new, extended locations, HR can help facilitate those movements. Any expansion into an international environment will require some adjustments. It is not so much a need to hire people in the new location as it is a need for cultural adaptation. That is a two-way process. New employees in the remote location must learn about the corporate culture and how to behave within it. The corporation must also learn about the local culture and design ways so that culture can be embraced by the organization.

New Organizational Structures   Expansion into international locations is not quite like expanding into additional U.S. locations. There are enough similarities from one U.S. location to another to make the transition easier than when international expansion is undertaken. New locations may mean a different organizational structure is required for the effective management of the remote location. The following are some organizational structures:

•   Functional structure This type groups all workers within a function under the management of a chief executive for each function. Chief sales and marketing officer, chief administrative support officer, chief human resource officer, and chief financial officer are just examples.

•   Divisional structure This aligns workers according to product, market, or region. An international expansion can sometimes result in an “Asian division” or a “Customer Product division.”

•   Matrix structure This requires two reporting lines, one to the divisional manager and one to the functional manager.

Changing organizational structures can be as difficult and challenging as merging cultures. Witness the merger of Continental Airlines and United Airlines. In May 2010 the two organizations agreed to a $3 billion merger.⁴ In 2018 the combined organization had yet to fully blend its cultures. Union contract provisions for each group of employees were still separate and, in some cases, quite different from one another. Eight years in, and a new airline company has yet to emerge.

Increased Accountability   The magazine Inside HR suggests, “Today, employees are collaborating in real time on projects across many time zones and geographies. People are working where they want and when they want—more than half of millennials say they want to work in a different country. Companies are moving towards organizational designs centered on project-based teams, matrixed structures and flat hierarchies.”⁵

The magazine goes on to add the following:

Possible future #1: expanded HR accountability

This potential future for HR includes increased accountability for workforce productivity, performance, collaboration, innovation and culture. In this future, new core HR competencies would emerge requiring strong technical, analytical and creative skills.

•   HR would replace its one-size-fits-all policy focus with a focus on building flexible work environments which support myriad work styles, individual preferences, geographies and time zones.

•   HR would replace its focus on ensuring people work the requisite hours with a focus on building technologies that actually facilitate productivity, such as collaborative workspaces and virtual team rooms.

•   HR would replace its focus on facilitating an annual performance review with a focus on deploying systems that actually increase performance and engagement, rather than just measuring it.

•   HR would replace its focus on developing training curriculum with a focus on enabling real-time, ‘24/7’ learning.

•   HR would replace its focus on annual goal-setting with a focus on providing managers with a real-time way to monitor and quantify work.

Possible future #2: decreased HR accountability

The second potential future for HR includes diminished accountability and a narrowing of mission. In this future, there are a couple of different possible paths:

•   HR will fail to step into the current accountability vacuum for productivity, performance, collaboration and innovation and would cede enterprise leadership to other areas of the business. In this scenario, the business would drive the changes needed to support emerging work models, and HR would focus primarily on the administrative aspects of HR.

•   HR will significantly increase its technical and analytical acumen and provide the business with the tools and data to be more self-sufficient and do for itself many of the things that HR once did for the business (recruiting of talent, measurement of performance, training of staff).

Understanding the Organization

Understanding your organization is fundamental as an HR professional so that you can provide the necessary support required of HR activities to the organization. HR professionals need a thorough understanding of their organization’s structure, the internal environment, and the external environment and industry in which it operates. This type of understanding lends itself to helping the HR professional to fulfill the role of a true business partner that can help the operating management with identifying internal needs and the issues they face, along with setting HR goals to address the issues.

Having an understanding of the organization and its design allows you to do the following:

•   Be fluent in the nomenclature of the business

•   Increase your credibility and the HR function’s credibility

•   Connect the dots in the strategic planning process

•   Educate others in the organization about HR’s contributions and value

•   Be proactive in affecting outcomes of the organization

The Core Business Functions

Every organization, regardless of size, has basic key business functions: marketing and sales, operations, information technology, and finance and accounting. Larger organizations will have even more, including customer service and relations, research and development, and quality assurance. Each has a connection and collaboration associated with the human resource function. HR professionals need to form partnerships within their organization’s key business functions to fully understand the key functional areas in an effort to support and become a strategic business partner. Understanding the core functions and business lines within the organization, including each area’s perspectives, challenges, and goals, will be of great use to an HR professional.

Finance and Accounting   Similar to the sales and marketing functions, the finance and accounting functions go hand in hand yet are distinctively different. Finance has its focus on funding sources, such as bank loans and stock sales, along with budgeting for income generation and expenses. Accounting, on the other hand, is associated with the movement of the monies going in and out, such as payables and receivables processing, payroll, and taxes.

HR interfaces with finance and accounting by preparing and reviewing budgets.

Budgeting and Financial Analysis   Budgeting is the process of estimating the amount of income and expenses that will occur within a given period of time. It is usually done on an annual basis, although budgets can be created for multiple years and for shorter periods of time such as months and quarters. The accuracy of budgeting can be improved when there is some historical data on which to rely. Generally speaking, budgets in the short term can be easier to construct and are usually more accurate than long-range budgets. The reason, simply, is because many unforeseen influences can enter the picture in the long range. Fewer unpredictable influences tend to happen in shorter periods of time. Figure 5-1 illustrates the basis of budgeting.

Figure 5-1     Budget chart

Whether in a for-profit enterprise, a governmental agency, a nonprofit, or a volunteer service organization, there is a need for money management. Budgeting and financial analysis are critical to any organization large enough to have employees. Understanding how to plan for earnings and expenses, managing the process, and ultimately conducting analyses of what happened after the fact are key to any individual’s success in a management role.

There are two key financial reports that any organization should be preparing and studying. One measures the income and expenses over a defined period of time such as a year, a calendar/fiscal quarter, or a month. This is usually called a profit-and-loss statement, or P&L. The second is a balance sheet that shows the assets (furniture, buildings, vehicles, cash, and accounts receivable) compared to the liabilities outstanding (accounts payable, taxes payable, credit card balances, and payroll payables). A balance sheet also shows the amount of equity owned by investors in the organization. Equity is the difference between income and liabilities in a for-profit organization. In a nonprofit organization it is called net assets.

There are four basic approaches to budgeting.

•   Zero-based is a method of budgeting in which all expenses must be justified for each new period. The process of zero-based budgeting starts from a zero base, and every function within an organization is analyzed for its needs and costs.

•   Incremental is a budget prepared using a previous period’s budget or actual performance as a basis, with incremental amounts added for the new budget period. It encourages “spending up to the budget” to ensure a reasonable allocation in the next period. It leads to a “spend it or lose it” mentality.

•   Formula budgeting is based on some predetermined formula.

•   Activity-based as a method of budgeting is based on an activity framework, using cost driver data in the budget setting and variance feedback processes.

HR professionals at management levels will generally participate in the creation of the HR department’s budget to outline anticipated specific expenses, such as office supplies, equipment purchases, and software licenses, but also for other areas in the organization that have compensation and benefits associated with their budgets. Additionally, HR will provide projected budget expenses associated with plans that the organization’s strategic plan may pursue that year. An example would be a strategic plan objective that creates a new incentive bonus plan for customer service representatives. HR will project how those additional earnings will impact 401(k) matching contributions.

Marketing and Sales   The marketing function has responsibilities for promoting, pricing, and locating/identifying the customer base. The sales function in an organization is normally the revenue generator. It is responsible for selling the organization’s service or product.

Operations   Operations is considered the heartbeat of the organization. Operations will create the goods or services, acquire the resources, and make sure the customer receives those goods or services. This runs off of five concepts: capacity, scheduling, inventory, standards, and control.

Information Technology   Information technology is the brain of today’s organizations. The systems, tools, and information required for all other key functions to do what they do are the responsibilities of IT. IT’s major focus is to support the integration of data from different systems and processes through an enterprise resource planning (ERP) system. This helps make an organization’s data more visible for decisions and in real time.

Research and Development   Research and development (R&D) varies by type of company. It exists not just in the private sector but also in the public sector. The private sector may focus on new product design and the development/expansion of the organization’s mission to expand revenue. In the public sector, R&D would be in the form of research institutes and laboratories mostly focusing on theoretical research that promotes science and new technologies of a public interest. Some organizations will have their R&D function in individual business units so that initiatives are focused specifically on that genre. R&D spending and investment vary greatly by organization and industry. According to the 2013 Global Innovation 1000 Study by Booz & Company,⁶ R&D spending ranges from 2 percent of revenue in telecommunications to 27 percent in computing and electronics. Globally, R&D spending has increased steadily since 1998.

Organizational Design

The design of an organization determines how it does business. The size and scope of the organization, its functions, its culture, and how it communicates and makes decisions are all part of its design. There are lifecycles for all organizations that take them through phases of growth. Which phase an organization is in will define its structure and its goals. A startup will have a very different design than a more established mature organization, and the focus of HR will vary accordingly.

Organizational Structures

Aligning the way the parts of an organization relate to each other is considered the organizational structure. HR professionals need to be familiar with organizational structures so they can act as a guide for management in selecting and determining which structure would be best to gain the highest performance.

Structural Principles   Three key principles guide organizational structure: decision-making authority, layers of hierarchy, and formalization.

There are seven types of organizational structures.

•   Departmental

•   Chain of command

•   Span of control

•   Work specialization

•   Formalized

•   Centralized or decentralized

•   Matrix

Departmental   This is where tasks are divided into separate duties grouping people and jobs together. The purpose is so that work can be coordinated. It can be functional in nature, divisional, or matrix.

Chain of Command   This is a structure where an employee typically reports to one manager in an up-down format, with a clear line of decisions and authority. Chain of command is becoming less recognized in organizations today because more and more organizations are pushing decision-making downward matrix lines, which causes the line of authority to look more lateral.

Span of Control   This organizational structure refers to the number of individuals who report to a single supervisor. It’s hierarchically in nature through a chain of command. For example, there is an executive at the top, then managers, then supervisors, and then direct reports, much like a pyramid. In organizations where many workers are skilled and require little supervision, they may report to one supervisor; this would be considered a flat organization.

Work Specialization   Work specialization was first associated with the assembly line. It is where tasks are divided into specific jobs and workers are considered skilled labor. It may offer a more efficient manner of productivity, yet on the other hand, it can lead to worker boredom. Today’s organizations using this organizational structure will typically rotate job functions on a regular basis, training the workers in skills that add variety to their tasks.

Centralized or Decentralized   To centralize or decentralize, that seems to be the question and the cycle of several long-standing organizations. Centralizing pulls decision-making authority to a central level of management, such as headquarters. Decentralizing is pushing the authority level and decisions out to units, such as regional divisions.

Centralizing and decentralizing continuum is also applicable to HR departments. With decentralized structures, corporate headquarters will create policy and develop programs; rollout and application are then carried out by the HR staff in the regional divisions. When the organization is centralized, HR headquarters would make the policy and coordinate the rollout activities or administration functions.

Matrix   Matrix structures create a dual chain of command, rather than a singular chain of command. A function, such as HR, would report to the local division executive at a facility, along with a direct reporting function to the head of HR in the headquarters office, which is typically located in another geographical area. As a result, the HR manager at the division location would have two managers, with neither manager having a superior role over the other in this reporting relationship. A huge disadvantage of this type of reporting relationship is the conflicting priorities of the division and the headquarters. The employee with two direct superiors is attempting to follow the direction of one, and the other is competing for their priority. It can be a bit of a tug-of-war.

RACI Matrix   RACI is an acronym standing for responsible (R), accountable (A), consulted (C), and informed (I). The RACI matrix is used by organizations to better define the roles and responsibilities of each member in an organization.

•   There should be only one person responsible (R) for a work assignment. Having more than one person responsible for the same task increases the probability that there will be duplication of work or that some portions of the work will not be performed.

•   Accountable (A) means an individual is designated to oversee the completion of the assigned tasks.

•   Consulted (C) means there are appropriate subject-matter experts when necessary. They will suggest any deviations from the standard procedures that may be necessary.

•   Informed (I) are those who have an interest in the task being performed. It could be a manager who oversees the given task or someone who cannot begin the next task until this one is completed.

Structural Alternatives   There are other alternatives to structuring an organization such as functional structure, product structure, geographic structure, and hybrid structure.

Functional Structure   Departments are defined by the services they contribute to the organization in a functional structure. In this type of structure, all of the operations employees report to a single function. In the organizational chart shown in Figure 5-2, each plant has the functions of finance, marketing, and so on, reporting to the plant manager, who in turns reports for those functions collectively to the division president.

Figure 5-2     Functional structure

Product Structure   With an organization that has a product structure, the functional departments are grouped under major product divisions. As an example, an electronic company may have separate divisions for its printers, cameras, GPS units, and monitors. Each of these divisions will have their own marketing, finance, and sales functions.

Geographic Structure   A geographic structure is similar to a product structure with the exception that the geographic regions, not products, define the organizational chart. Each region has its own complete set of functions such as finance, manufacturing, marketing, and so on. The organizational chart shown in Figure 5-3 depicts a geographic structure.

Figure 5-3     Geographic structure

Hybrid Structures   In a hybrid structure, all the elements of the functional, product, and geographic structures are combined. Because some locations in an organization are not equipped to handle all functional activities such as manufacturing, a hybrid structure is used. A hybrid is generally used when an enterprise is expanding into new geographical areas, such as first going global, and then it will move into a matrix structure.

Other Internal Environment Considerations

Beside understanding the functions within an organization, the HR professional needs to be keen to the important priorities and initiatives that are on the organization’s agenda. This might include a shift in customer service performance, a new product or service being developed, or a new focus on vendor relationships. Understanding and knowing the hottest initiatives keeps HR “in the know” to relate its function and services to the initiatives underway.

The External Environment

Equally important to the internal environment is knowing the external environment. PEST is an acronym to follow in learning about the key factors that affect the external environment of an organization.

•   P = Political environment This political environment includes government regulations or any defined rules for that particular industry or business. It also involves studying tax policy, which includes exemptions (if any), employment laws, environment laws, and so on.

•   E = Economic factors This includes gauging the economic environment by studying factors in the macro economy such as interest rates, economic growth, exchange rate, and inflation rate. These factors also help in assessing the demand, cost of the product, expansion, and growth.

•   S = Social factors This forms the macro environment of the organization. It includes the study of demographics, as well as the target customers. These factors help in gauging the potential size of the market. It includes studying population growth, age distribution, career attitude, and so on.

•   T = Technology Technology changes rapidly. It involves understanding factors that are related to technological advancements and the rate at which technology gets obsolete.

The HR Organization and Function

The function of HR is designed to serve the overall organization and its mission. The structure can take on different arrangements based on the size and needs of the organization. Let’s explore the processes, the HR team, the department structure, and ways to demonstrate and measure HR’s value.

HR Processes

Grouped in the following categories, these are the HR processes:

•   Participating in the implementation and creation of the organization’s strategy. Those processes could be

•   Performance management

•   Job design

•   Organizational design

•   Communications

•   Knowledge management

•   HRIS selection, implementation, and integration

•   Strategic planning

•   Hiring

•   Creating and following strategy to source, recruit, hire, develop, manage, and retain talent

•   Creating staffing plans

•   Attracting qualified talent

•   Selecting the best talent

•   Offering interviewing assistance to management

•   Onboarding and assimilating new hires into the organization

•   Developing and delivering programs for training, total rewards, employee engagement, communications, and so on

•   Collecting data and analyzing it for specific organizational needs

•   Capturing and tracking data to be analyzed

•   Identifying trends in the workforce and the external environment that affect the organization

•   Identifying best practices and processes that would be helpful to the organization and its strategy

•   Daily HR operations

•   The processing of data, information, recordkeeping, and requests, typically using an HRIS and applicant tracking system

•   Responding to employee and internal or outside requests

The HR Team

Here again, the HR team will vary depending on the organization’s size and needs, yet the following are typical for roles and responsibilities of an HR team:

•   HR leaders These can be the most senior of the HR group, and many will be part of the executive team, such as the chief human resource officer (CHRO) reporting directly to the CEO or president. They have a seat at the “round table” where the role lends itself to correlating organizational challenges and strategies to the HR function.

•   Managers This role is normally responsible for sections or units with the HR team such as the compensation manager, the talent recruitment manager, and the training manager. They have a direct responsibility in coordinating and managing the activities of their specific function and the people who are within it.

•   Specialists This role on the HR team is usually singularly focused with a specific knowledge and ability, such as the benefits specialist, the affirmative action specialist, and the HRIS specialist. They maintain and apply best practices in their specialty.

•   Generalists Also called HR practitioners, these are the jacks-of-all-trades. They may have a role and responsibility that includes expertise in more than one area. In today’s large organizations, generalists are assigned a unit such as a department and become known as the business partner for that unit, guiding the management of that unit with all aspects of HR and serving as a liaison to the HR specialists and management.

HR Structural Alternatives

Organizations will structure HR based on the areas of responsibility they are assigning to the HR function. An important factor is ensuring that the HR structure is aligned with the organization’s strategic plan. This may begin to be sounding like a broken record, yet it can’t be emphasized enough that creating and sustaining HR’s alignment with the organization’s strategies is highly important. For example, if one of the organization’s strategy’s is an initiative and goal to be the employer of choice for its technical engineers in its industry, then it is necessary to ensure that the structure of HR includes the formation of attraction, rewards, retention, and development functions to address those needs for the engineering department.

Shared Services

The shared services model is another structural alternative identified by Ulrich and Brockbank.⁷ This model is used in organizations with multiple business units, or divisions, as most are referred to as. Each division doesn’t need to have its own expertise in every area, such as compensation and benefits. They select what they need from a menu of shared services that are typically transactional that the divisions agree will be shared (e.g., affirmative action compliance, compensation administration).

The most common functions assigned for consolidation are health care, retirement, and compensation. Organizations that have implemented the shared services model have identified four favorable outcomes.

•   Reduced administrative time by staff on tasks

•   A reduction in administrative costs

•   A consolidation of redundant functions

•   Better tracking of employee data

Centers of Excellence   A Center of Excellence is a team, a shared facility, or an entity that provides leadership, best practices, research, support, or training for a focus area. This focus might be a technology (e.g., Oracle), a skill (e.g., negotiation), or a broad area of research (e.g., cancer treatment). A COE, sometimes called a center of expertise, is an independent unit that provides services to internal customers within the organization. It is generally funded by fees that other functions using the COE have allotted from their budgeting. COEs may be located anywhere, wherever the internal customers can access the function, for example, an in-house training university.

Third-Party Contractors   Outsourcing and co-sourcing are examples of structural alternatives used by the HR function. Outsourcing is where a third-party vendor provides selected activities, such as administration of benefits. Co-sourcing is when a third party provides dedicated services to HR, which may include having contractors within the HR’s organization. An example would be a temporary employment agency on-site hiring and onboarding seasonal labor.

Measuring and Demonstrating HR Value

Organizations have to measure and demonstrate the value they are delivering to their stakeholders—so too does HR to its stakeholders within the organization. Measuring results serves to reinforce HR’s role in showing its effectiveness to management. It can also strengthen HR’s relationship within the organization by indicating the impact of its services. This affords it the position to seek investment when it comes to budget allocation. Measurement also indicates where things need to be improved. ROI is essential for HR to further the investment requests for its strategic plan serving the organization.

Performance Measures

Key performance indicators are used to measure HR value. A KPI’s gauge progresses toward goals and standards of performance that have been agreed to. An example is the number of new hires who have progressed through specific onboarding training such as sexual harassment, ergonomics, and diversity practices.

Balanced Scorecards   A Balanced Scorecard is a performance metric used to identify and improve various internal functions and their resulting outcomes. It is used to measure and provide feedback. HR measurement using a Balanced Scorecard method would be focused on specific functions or initiatives—as an example, recruiting—reducing length of time to fill a position. The performance metrics would include financial, processes, customers, and learning and growth.

To be effective, a Balanced Scorecard must include the following:

•   Accountability and measurable results

•   Measures, metrics, and targets that are understandable and supported by data

•   Measures that have actionable items associated with them that can be measured

•   Meaningful measures that focus on results

•   Carefully planned, focused on end results, and executed

HR Audits   An HR audit is a systematic and comprehensive evaluation of HR’s policies, procedures, and practices that protect the organization, create best practices, and identify areas needing improvement. Audits also identify gaps in performance and outcomes and are usually identified in priority order to be corrected. There are different types of audits, such as those caused by legal embattlements with a lawsuit or regulatory compliance and those that are done to achieve a level of world-class acknowledgment such as being recognized for a best practice.

Metrics   There are many different metrics to select from, and the formulas can vary. It’s important to use a consistent formula when benchmarking HR practices. Here are the typical metrics used for measuring the HR value:

•   Absence rate

•   Applicant yield

•   Cost per hire

•   Human capital ROI

•   Human capital value added

•   Key talent retention

•   Promotion pattern

•   Success ratio

•   Training ROI

•   Transfer/relocation

•   Turnover costs

•   Turnover rate

•   Vacancy costs

HR’s Role in Organizational Strategy

The role of HR as a function within the strategic plan of the organization has transformed from the traditional administrative and operations roles into becoming more strategic in nature, helping the organization plan how it will achieve its goals and objectives with regard to talent management.

HR and the Strategic Process

HR brings significant expertise, knowledge, and perspective to the organization’s strategic planning process when it has a place at the table during a planning retreat. What is discussed, decided, and shared in these types of planning meetings helps the senior management team have a full 360-view of the workforce and talent implications of plans and allows HR to ensure its goals and plans are aligned with the overall plans of where the organization is going.

HR’s Role

HR plays an important role in the strategic process. It contributes perspective and ensures that all HR implications are considered, such as laws and regulations, community, union contracts, and so on. It plays a role in influencing and voicing an opinion for leadership and stakeholders at large. And it uses its strengths and technology to be applied and aligned with the direction set.

The administrative activities of HR are directly aligned with all aspects of the organization’s strategy. Tasks that HR performs may be high in strategic value, such as orientation of new hires, or low in value, such as activities that third-party vendors can provide (e.g., benefits administration). The core functions are what need consideration as to how they stack up to the value that HR lends to the organization’s strategy and goals.

Leveraging HR’s Strengths   The value of HR in an organization, specifically with the strategic planning process, is that HR knows the entire organization. This includes the functionality of the organization. This is because of the involvement it has in managing the talent, training, recruiting, risk management, policy administration, and so on. HR can be the ringmaster in helping coordinate and integrate the stakeholders listed here:

•   Employees HR needs to know the nuances of each geographical area in the organization and what laws or cultural issues are impacting each area.

•   Suppliers HR’s knowledge of the suppliers and challenges they may pose such as ethical behavior is of great value within the strategic process.

•   Communities With HR’s role in CSR and interacting with the communities of the organization that it operates in, this allows HR to identify potential conflicts or agreements with its communities associated with new strategic plans on the table.

•   Government Yes, there is “big brother” to contend with, and outside of the industry regulatory matters, the matters concerning workforce would be an arena that HR would have an antennae up in.

•   Labor groups For those organizations with labor unions, HR has its finger on the pulse of the affected labor unions when a strategy is considered that may affect a workforce union group.

Contributing the HR Perspective   HR professionals can contribute an important perspective during the strategic planning process. Although the main focus is to execute the organization’s strategy, they have a ton of expertise and perspective they can add in the planning stages. For example, HR can add value when the organization is formulating a strategy to expand into a new geographical area by pointing out their perspective and knowledge about the issues with local laws for employment in that area.

Negotiating and Influencing   Negotiation is when two or more parties work together to reach an agreement in a matter or with an issue. The HR professional needs to know and work the process, which has six phases to it.

•   Preparation Identify the needs and wants that would be concessions.

•   Relationship building Personal character is involved here, and within the strategic planning process, this means having the trust of the others at the planning table.

•   Information exchange A thorough understanding of both sides of the issue is necessary.

•   Persuasion This means seeking what are the mutually beneficial options rather than going for the win-lose positioning. When HR professionals have a broader understanding of the other’s interests, they can seek solutions that satisfy both sides of the issue.

•   Concessions There can be small concessions that count. They find the “wants” that are not essential and decide whether giving them helps the negotiation process.

•   Agreement When both sides have agreed, confirm it in writing. With formal negotiations such as union contracts, legal investigations, etc., these agreements must be in the form of a written document. Within the parameters of strategic planning, think of confirmation memos.

Influencing is an ability that goes hand in hand with credibility. Much more than just having knowledge and expertise, the HR professional needs to have credibility, which is part of building the personal relationship with trust mentioned earlier. HR professionals need to use their influence to provide the added value for the formulation of strategy to add what they know and their opinion of how the strategy can happen or what it’s challenges might be.

Due Diligence   Due diligence refers to digging in and looking at all factors surrounding a matter. In strategic planning, it may involve reaching the local employment laws in the example of an organization wanting to expand into a new geographical area. Due diligence would also involve learning the landscape of the potential applicant pool for the new area and a 360-degree look at being an employer in that area. In Chapter 4 we discussed due diligence with mergers and acquisitions, which is the same process that would apply during the due diligence phase in strategic planning.

Aligning the HR Function and the Strategic Plan of the Organization

HR’s administrative and operational activities are directly aligned with the organizational strategy and objectives. As we explained in Chapter 4 with SWOT analysis, it is important for HR professionals to understand the business and industry they support and to know all of the business function’s own strategic plans.

HR Strategic Alignment   HR serves the entire organization and the needs of each business unit. Thus, having HR participate at each unit’s planning session would be helpful, just as it is when HR sits as a participant to the senior team’s strategic planning meeting. The same level of expertise, influence, and perspective is necessary at all levels of planning. When part of the organization’s strategy involves entering a new market, HR’s recruitment plans and sources will require a specific direction to be able to fulfill the workforce needs of the new markets. The goals of HR in, say, talent acquisition, may be focused on the nature of the talent required for the new market and how to manage the advertising that might go along with it. Forecasting the human resource needs is an important and essential role of HR in strategy.

Ensures That HR Fulfills Its Basic Mission   HR’s basic mission is to help the organization achieve its vision with a highly engaged and talented workforce. That is the same with all other business units. Yet in regard to HR’s mission, it will cross into all business functions because there are employees in each of those functions. Bringing HR into the fold as a true business partner for each of those units in order to help them accomplish their goals and plans that support the organization is the bottom line of the mission of HR. HR must understand how all business units perform their work and their own priorities, values, and business plans in order to design their processes to fit in.

Learn About Your Organization’s History   Learning and talking “story” is an important function of HR, not just in attracting potential talent and onboarding them but in keeping the foundational values, desired culture, and history alive for the organization. HR professionals are generally the first impression in the talent arena and can be in the community too. Knowing the “story” of where the organization has been, how it began, and where it intends to go is necessary for keeping it alive and communicating it to all “who enter the double doors.” Add to that the “story” of the industry and how the organization fits in, as well as the communities it exists in. Building this knowledge will help HR professionals make useful recommendations during the planning process.

Use Facts and Objective Data as Support   As a participant in the planning process, you’ll need to have tangible evidence to back up your opinions and recommendations. An HR professional needs to be fluent in measuring strategic outcomes that they anticipate in order to be influential, have credibility, and build solid business cases for their recommendations.

Contribute to Measuring Strategic Success   Common measures used, besides the many discussed in Chapter 4, include the ones associated with human capital measurements. They are as follows:

•   Productivity

•   Employee attitudes

•   Employee capability and capacity

•   Human capital investment

•   Leadership and management

•   Total rewards

•   Compliance and safety

•   Employee relations

•   Job recruitment

•   Job creation

•   Workforce retention

•   Workforce profile

Developing the HR Strategy

HR needs to develop a strategy that is aligned with the capabilities needed to implement the organization’s overall strategy. Becker, Huselid, and Beatty wrote in The Differentiated Workforce⁸ that HR must shift its focus from employees to one of strategy, and it needs to commit to diverting a greater share of its resources from developing the entire workforce to developing strategic talent. It needs to “assess the big picture” and get out of the weeds.

The HR Strategic Process   Chapter 4 goes into detail on what creating strategy entails. For the HR strategic process, the steps are similar yet more specific.

1.   Assess the big picture. Get an understanding of the organizational context and the previous strategic plans. Identify what goals will involve HR processes and support.

2.   Do SWOT analysis, which will review the matters affecting the people side of the business. PEST analysis will also be used in this stage. These analyses are explained in greater detail in Chapter 4.

3.   HR’s own mission and vision statements need to be either created at this phase or reviewed. They need to reflect and fit into the organization’s overall strategies.

4.   Conduct detailed HR analysis, which would include a thorough review of the current systems and processes in place. The goal in this phase is to identify gaps that may exist with current systems/processes and the future system needs. Focus is generally in the total rewards, talent acquisition, performance management, and training/development functions. Here again a SWOT analysis and PEST analysis could be utilized. Addressing these gaps to align with the organizational direction is the crux of the HR strategy.

5.   Determine what are the critical people issues. During this phase, the future talent needs and existing workforce will be compared, and again, the gaps are considered and addressed with a strategic plan of action. An example is when a plant is going to bring in new automated equipment. How does that affect the current workforce? Will there be a need for retraining to operate the new equipment? Will there be a need to reallocate workers to a different job or downsize?

6.   Develop HR’s own goals, metrics, consequences, and solutions. At this phase, the specific actions HR will take and how they will be measured occur. Audits and balanced scorecards tools may be utilized (explained in Chapter 4).

7.   Developing an implementation and evaluation plan is the last step. Here HR will provide clear direction on the resources, risks, timing, and support that each of their goals and initiatives will require. A project Gantt chart may be used as additional support for budget requests.

Functional Area 7—Organizational Effectiveness & Development

Here is SHRM’s BoCK definition: Organizational Effectiveness & Development concerns the overall structure and functionality of the organization, and involves measurement of long- and short-term effectiveness and growth of people and processes, and implementation of necessary organizational change initiatives.⁹

Organizational effectiveness and development (OED) is a complex effort whose objectives are to change the beliefs, attitudes, values, culture, and structure of organizations so that they can be in a better position to adapt to new technologies, markets, and challenges. These changes occur through planned interventions designed to accomplish better results. In simple terms, OD is a systematic approach that enables the company to implement improvements in a consistent way.

Key Concepts

•   Application of behavioral assessments (e.g., personality assessments)

•   Intergroup dynamics (e.g., intergroup conflict)

•   Intragroup dynamics (e.g., group formation, identity, cohesion, structure, influence on behavior)

•   Organizational design structures and approaches (e.g., customer, functional, geographic, matrix, program)

•   Organizational performance theories, structures, and approaches

The following are the proficiency indicators that SHRM has identified as key concepts:

Overview of Organizational Effectiveness and Development (OED)

A major HR responsibility and function is to regularly monitor and analyze an organization’s metrics to identify and analyze major operating, workforce, and cultural health information to plan and implement organizational effectiveness and development efforts in a way that adds value to the organization. To do this, the HR professional must do the following:

•   Recognize and support the alignment of key strategic and tactical business plans and program objectives. Each unit’s tactical plans should be designed to support one or more strategic business objectives for the organization. Each unit’s operational tactics need to be coordinated with other plans and objectives. In much the same manner, all HR and OED objectives must be aligned with the organization’s overall strategy, with each other’s activities, and with country-specific requirements.

•   Focus on the organization’s skills and capabilities; for example, all of the organization’s business units, including HR, need to identify, focus, and improve the organization’s talent acquisition capabilities.

OED Process

The OED process is based on an action research model that begins with an identified problem or need for change and proceeds with assessing, planning an intervention, implementing the intervention, gathering data to evaluate the intervention, and determining whether satisfactory progress has been made or whether there is need for further intervention. The process is cyclical and ends when the desired developmental result is obtained.

The OED process begins when an organization recognizes that a problem exists that impacts the mission or culture of the organization and change is desired. It can also begin when leadership has a vision of a better way and wants to improve the organization. An organization does not always have to be in trouble to implement organization development activities.

Once the decision is made to change the situation, the next step is to assess the situation to fully understand it. This assessment can be conducted in many ways including documentation review, organizational sensing, focus groups, interviewing, or surveying. The assessment could be conducted by outside experts or by members of the organization.

After the situation is assessed, defined, and understood, the next step is to plan an intervention. The type of change desired determines the type of intervention needed. Interventions can include training and development, team interventions, structural interventions, or individual interventions. Examples are team building for management or employees and establishing change teams. Once the intervention is planned, it is implemented.

During and after the implementation of the intervention, relevant data is gathered. The data to be gathered is determined by the change goals. For example, if the intervention is training and development for individual employees, the data would measure changes in knowledge and competencies.

This data is used to determine the effectiveness of the intervention. It is reported to the organization’s decision-makers. The decision-makers determine whether the intervention met its goals. If the intervention met its goals, the process can end, which is reflected by raising the development bar. If it did not, the decision is made whether to continue the cycle and to plan and carry out another intervention or to end it.

OED Strategies

One approach depicts three basic strategies to achieving successful organizational change. The three strategies are not mutually exclusive, and all three could be used concurrently to bring about systemic change. One or the other, however, may be more conducive to the type of change needed in a particular organization. For this purpose, they are shown as being three different strategies.¹⁰

The Behavioral Strategy: Talent Development   Talent development takes an employee training and development approach. It is based on the premise that employee learning would bring about the organizational change needed. Learning consists of gaining knowledge, skills, and new attitudes that lead to new behaviors. These new behaviors then lead to improved quality and performance.

The Technical Strategy: Performance Improvement   Performance improvement takes a continuous improvement approach. Its premise is that processes in the areas of customer focus, product and service delivery, support, and supplier and partnering can be improved. This strategy also maintains that technology be continuously updated and aligned with the processes of production and service to make work more efficient and effective. Continuous process improvement with aligned technology leads to improved quality and performance.

The Structural Strategy: Organizational Design   The organizational design premise is that organization structure and design should be aligned (or realigned) consistent with the vision, direction, mission, or goals of the organization. Structural strategy will incorporate changes in the organization chart. Employees, units, divisions, and departments can be realigned to optimize resources. For example, hierarchies can be flattened, and decision-making can be placed closer to the point of action. Significant work can be done in chartered, self-directed teams. Such realigned relationships lead to improved quality and performance.

OED Benefits   OED is the practice of planned, systemic change in the beliefs, attitudes, and values of employees for individual and company growth. The purpose of OED is to enable an organization to better respond and adapt to industry/market changes and technological advances. The following are five benefits of OED that range from continuous improvement to increased profits:¹²

•   Continuous improvement Companies that engage in organizational effectiveness and development commit to continually improving their business and offerings. The OED process creates a continuous cycle of improvement whereby strategies are planned, implemented, evaluated, improved, and monitored. Organizational effectiveness development is a proactive approach that embraces change (internal and external) and leverages it for renewal.

•   Increased communication One of the key advantages to OED is increased communication, feedback, and interaction within the organization. The goal of improving communication is to align all employees to shared company goals and values. Candid communication also leads to increased understanding of the need for change within the organization. Communication is open across all levels of the organization, and relevant feedback is recurrently shared for improvement.

•   Employee development Organizational effectiveness/development focuses on increased communication to influence employees to bring about desired changes. The need for employee development stems from constant industry and market changes. This requires an organization to regularly enhance employee skills to meet evolving market requirements, which is achieved through a program of learning, training, skills/competency enhancement, and work process improvements.

•   Product and service enhancement A major benefit of OED is innovation, which leads to product and service enhancement. Innovation is achieved through employee development, which focuses on rewarding successes and boosting motivation and morale. In this scenario, employee engagement is high, leading to increased creativity and innovation. Organizational effectiveness and development also increases product innovation by using competitive analysis, market research, and consumer expectations and preferences.

•   Increased profits Organizational effectiveness/development affects the bottom line in a variety of ways. Through raised innovation and productivity, efficiency and profits are increased. Costs are also reduced by minimizing employee turnover and absenteeism. As OED aligns objectives and focuses on development, product/service quality and employee satisfaction are increased. The culture shift to one of continuous improvement gives the company a distinct advantage in the competitive marketplace.

In its publication “Traits of Truly Agile Businesses,” Accenture reported the results of a survey it conducted in 2013 that investigated business agility in strategy, organization, marketing, operations, and finance. Because of this research, five critical enablers of company agility emerged. Agile companies had leaders who did the following:

•   Actively build seasoned, diverse leaders and management teams Leaders ensure that managers up and down the organization are fully accountable and have the right competencies to handle a diverse set of circumstances.

•   Speed up decision-making They establish a culture of making critical decisions quickly, always ensuring that those decisions are tuned to market conditions.

•   Prioritize strategic decisions They distinguish between the decisions that affect everyday operations and the bigger decisions that concern the company’s strategic direction.

•   Prepare their ecosystems to act quickly They arm their business ecosystems—suppliers, customers, and a range of third-party partners—with their sources, information, and tools to take decisive, well-orchestrated action and to quickly measure the results and correct their course when needed.

•   Invest in and make more use of data and analytics to run the business Leaders understand the competitive value of deeper insights and know how to mine many sources of data—not just their own—to obtain those insights.¹³

Opportunities for OED   In recent years many companies became good at delivering their core products and services with limited resources by adopting a “do more with less” operating style. Many companies reaped some short-term benefits because of certain cost savings. However, some of these short-term benefits have the potential to inflict long-term problems on the organization’s overall capabilities, organizational structure, business processes, and levels of workforce engagement. The unintended result of attempting to get along with less over the long term can, in many cases, become very problematic. These same problems can become opportunities for alert HR professionals. Examples include the following:

•   Diminished capacity, capability, and agility Not being properly staffed can directly influence a company’s cost structure, cash flow, and ability to deliver goods or services. Ultimately, diminished capacity and lagging response times will affect an organization’s ability to remain competitive.

•   Misaligned organizational structure Many of these reorganizations produced structural gaps in roles, work processes, accountabilities, and critical information flows. Structural gaps can occur when companies eliminate jobs without eliminating the work, forcing employees to take on additional responsibilities. This can create problems because lower-level employees who step in may be ill-equipped to perform the required duties, and higher-level executives, who must take on more-tactical responsibilities, may feel that their leadership skills are being minimized.

•   Broken business processes Many organizations will admit that, even prior to the economic downturn, many core business processes were not documented, were not supported by technology, and relied too heavily on the “tribal knowledge” of long-term employees. Many businesses have not analyzed the impact from their cuts and the corresponding critical gaps that have developed. By failing to address these issues in a timely manner, companies risk losing core efficiencies, thus damaging the customer experience—a primary driver of revenue sustainability.

•   Declining workforce engagement While doing more with less can improve productivity, it can also damage employee morale. More workers (managers and individual contributors alike) are juggling additional responsibilities, working longer hours, missing family time, and performing jobs that are one or two levels above or below their pay grade.

To ensure long-term viability, organizations need to realign their critical elements to fit the new economic realities without diminishing their core capabilities and competitive differentiation.

HR’s Role in OED   HR should be involved in major organizational changes from the beginning. HR’s early involvement can facilitate the improvement of employee understanding of change and communication between management and nonmanagement employees. Positive outcomes of communication efforts can include the following:

•   Identification and mitigation of potential risks

•   Increased employee buy-in and satisfaction

•   Increased trust between management and non-managerial employees

•   Identification of needed change-related training initiatives to improve employee skills and proficiency throughout the change process

•   Increased leadership cohesiveness

In its 2014 publication “Future Insights,” SHRM outlined the top OED trends according to an HR subject-matter expert panel. The panel identified several trends.

HR professionals must do the following:

•   Increase their focus on the development and engagement of highly professional talent and high-potential employees who possess deep expertise, drive innovation, and uniquely contribute to the organization’s value proposition.

•   Take responsibility to educate line management and help them acquire skills to become more proactive in managing and coaching talent.

•   Become skilled in organizational design and change management required to effectively implement enhanced organizational structures.

•   Develop superior communication and situational leadership skills, motivation, energy, and learning agility. Leaders must have the ability to recognize and respect cultural differences and to reconcile the issues cultural diversity creates.

•   Integrate the workforce planning process with career planning and employee engagement to provide information and support for employees to help them identify and choose from available career paths and job opportunities.

•   Interact with technology specialists to produce accurate models to use in planning and managing the workforce, including decision support tools and predictive analytics.

•   Use creative development tools such as mobile technologies for just-in-time learning via “pulled” rather than “pushed” instruction.¹⁴

Organizational Gap Development

Organizational effectiveness and development involves more than just specialized interventions; its practice should be integrated into the organization’s daily operations. When a “gap” begins to develop between what is going on in your organization compared to a standard or benchmark in your industry or other comparator, you may be seeing a problem in the making.

Assessments and Targets

The means to identify an organizational gap is to first isolate the area of interest. That may be customer service, employee skills, leadership skills, employee training, and countless others. Pick one. If your concern is employee skills, first identify the specific skill (running scientific machinery, answering employee benefit questions, or management communication skills). Next, identify the benchmark or industry standard for the skill (number of hours managers spend working directly with employees each month, number of research grants obtained each quarter, successful merger or acquisition for employee policies).

Change Readiness   Developing and implementing change programs should follow the articulation of specific needs. If efficiencies can be improved through implementing new technologies (for example, use of robots on the automobile assembly line to perform routine repetitive actions), plans can be made to implement that change.

Normally, implementation plans should involve these steps:

1.   Documenting goals and specific actions required to achieve them

2.   Meeting with employees to discuss the changes and vision that requires those changes

3.   Soliciting employee support and participating in the change process

4.   Measuring the results

Organizational changes should always be consistent with the employer’s strategic plan. Changes should represent the means to achieve missions or goals. There should always be a link between the change and the organizational strategy.

Cultural Assessment   Perhaps the greatest need for cultural assessment comes in the wake of mergers and acquisitions (M&A). When organizations try to combine their operations, there will inevitably be conflicts in policy, management style, and “the way we do things around here.” One consulting firm, the Turknett Leadership Group, uses a written survey to gather input from employees on both sides of the corporate mix. Then, it conducts in-depth one-on-one interviews with a sampling of employees from each group.¹⁵ In those interviews, they ask questions such as the following:

•   “Give me ten words you would use to describe the organization.”

•   “Who really gets ahead in this organization?”

•   “What and who is really rewarded around here?”

•   “What are some of the war stories or legendary events in the organization’s history?”

•   “What does the CEO or leader pay the most attention to? Where does the CEO’s energy get expended, and what do they reward?”

With the answers to those and other similar questions, it will soon become apparent where work should be focused for cultural improvement.

Implementing OED Initiatives

According to SHRM, “Unfortunately, many OED interventions are incorrectly implemented in response to symptoms of the dysfunction rather than by following a thorough diagnostic analysis, or organizational assessment, to reveal core problems. To avoid this, employers must use caution and make certain a comprehensive data collection process is followed.”¹⁶ When correctly assessed, plans for intervention can be built and then implemented.

OED Initiatives

Organizational development involves more than just specialized interventions; its practice should be integrated into the organization’s daily operations. One of the simplest tools OED practitioners use is the ADDIE model.¹⁷ ADDIE is an instructional systems design framework that many instructional designers and training developers use to develop courses. It can be used when dealing with other problems and issues, too. It involves the following:

•   Analysis

•   Design

•   Development

•   Implementation

•   Evaluation

OED initiatives often involve transformational change including efficiency and effectiveness initiatives, organizational restructurings, organizational capabilities development, rebuilding trust initiative, and culture change. Nearly any aspect of the organization is fair game.

Workforce Support of OED Initiatives

To a large extent, whether employees support your OED initiatives will depend upon the quality of leadership that shepherds the effort. But it is a sure thing that unless employees do support your OED initiatives, there is little hope for success in that effort. Getting employee buy-in is critical.

OED Tools

Here are some tools and techniques that can help you in your OED initiatives.

Team Building   Achieving the state where individual team members actually trust one another to do their work and support others in the group is the objective of any team building program. Some groups work better together as teams than others. How the supervisor or manager treats each employee will influence how likely there will be a cohesiveness to the group. People want to work where they like the people they work with. They don’t like to work with people who steal the credit for accomplishments of others, tattle to the supervisor about each small infraction of rules, or actively work to discredit others. Team building can overcome some of those behaviors, but not all. Progressive discipline is sometimes needed to eliminate really bad behavior before the group is willing to be a team. The question in the minds of employees who see the bad behavior all the time is, “Will the boss actually do something about it?”

Group Decision-Making   Group decision-making is a type of participatory process in which multiple individuals acting collectively analyze problems or situations, consider and evaluate alternative courses of action, and select from among the alternatives a solution or solutions.¹⁸ In organizations many decisions of consequence are made after some form of group decision-making process is undertaken. However, groups are not the only form of collective work arrangement. Group decision-making should be distinguished from the concepts of teams, teamwork, and self-managed teams. Although the words teams and groups are often used interchangeably, scholars increasingly differentiate between the two. The basis for the distinction seems to be that teams act more collectively and achieve greater synergy of effort.

•   The group has a definite leader, but the team has shared leadership roles.

•   Members of a group have individual accountability; the team has both individual and collective accountability.

•   The group measures effectiveness indirectly, but the team measures performance directly through their collective work product.

•   The group discusses, decides, and delegates, but the team discusses, decides, and does real work.

There are several types of group decision-making methods.

•   Brainstorming This is freewheeling idea generation.

•   Dialectical inquiry Opposing groups debate the pros and cons of selected solutions or decisions.

•   Nominal group technique This is a structured decision-making process in which group members are required to compose a comprehensive list of their ideas or proposed alternatives in writing.

•   Delphi technique Group members are in different remote locations, and the group develops successive rounds of ideas, evaluation, refinement, and choices.

Diversity Programs   Changing workforce demographics and new organizational forms are increasing the diversity of work teams in general and decision-making teams in particular. Given these environmental changes, work teams that are diverse in terms of sex, race, ethnicity, national origin, area of expertise, organizational affiliation, and many other personal characteristics are increasingly common.¹⁹

Striving to increase workplace diversity is not an empty slogan; it is a good business decision. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35 percent more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15 percent more likely to have returns above the industry mean.²⁰

In a global analysis of 2,400 companies conducted by Credit Suisse,²¹ organizations with at least one female board member yielded higher return on equity and higher net income growth than those that did not have any women on the board.

In recent years, a body of research has revealed another, more nuanced benefit of workplace diversity: nonhomogenous teams are simply smarter. Working with people who are different from you may challenge your brain to overcome its stale ways of thinking and sharpen its performance.

Quality Initiatives   Focusing on quality issues can happen in any workgroup within an organization. Of course, quality is important on the production line, but it is also important in the accounting department and in HR. What would be the consequence of HR publishing incorrect information about company benefit programs just before open enrollment? There are a few different ways to address quality.

Systems Theory   Systems theory is less of a management methodology as it is a way of analyzing and thinking about organizations. It puts forth the premise that organizations, like living organisms, are made up of numerous component subsystems that must work together in harmony for the larger system to succeed. Systems theory states that organizational success relies on synergy, interrelations, and interdependence between different subsystems. As arguably the most valuable component of a company, employees make up various vital subsystems within an organization. Departments, work groups, business units, facilities, and individual employees can all be considered component systems of the organizations.²²

Systems theory is an alternative approach to understanding, managing, and planning organizations. Employee relations is a human resource discipline concerned with strengthening ties between employers and employees. Systems theory can provide a fresh perspective for approaching employee-relations initiatives, allowing managers to understand their employees’ importance and position as a vital system in the organization, rather than viewing employees as an expense through the lens of accounting.

Quality Standards   The International Organization for Standardization (ISO) has now published four standards for human resource management. These are considered the benchmark against which all employers should measure themselves in these specific areas of HR.

The standards are as follows:²³

•   ISO 30400, Human resource management – Terminology This standard provides a common understanding of the fundamental terms used in human resource management standards.

•   ISO 30405, Human resource management – Guidelines on recruitment This standard provides guidance on effective recruitment processes and procedures. It is designed for use by anyone involved in recruiting.

•   ISO 30408, Human resource management – Guidelines on human governance This standard provides the guidelines to create an effective human governance system that can both respond effectively to organizational and operational needs but also foster greater collaboration across all stakeholders, anticipate and manage risks in human resources, and develop a company culture that is aligned with its values.

•   ISO 30409, Human resource management – Workforce planning This standard helps organizations respond more effectively to their current and projected requirements for staffing.

You can expect that there will be more standards developed related to human resource management as time goes on.

Quality Control Tools   The following are the seven tools of quality:

•   Cause-and-effect diagram Also known as the fishbone or Ishikawa diagram.

•   Check sheet Chart of event/occurrence by date or time with stroke tally of times the event happened.

•   Control chart Plot of quality conformance at times throughout the day.

•   Histogram Column chart showing frequency/intervals on the y-axis and the event being measured along the x-axis.

•   Pareto chart Column chart showing types of quality problems on the x-axis and frequency of occurrence on the y-axis.

•   Scatter diagram Graph showing plot of individual quality results using any two variables. Plot points can be used to determine the slope of a trend.

•   Stratification Flow chart or run chart.

Theory of Constraints   The Theory of Constraints (TOC) says in essence that “a chain is no stronger than its weakest link.” That means quality depends on the weakest point in the process, whether it is a machine or a person. Quality failures can most often be traced back to that single point that constrains the quality results. It may also come to pass that there is more than one constraint interfering with the quality results.

Six Sigma   Six Sigma methodologies can be rolled out in a matter of months or over the course of years. From large international companies to midsize firms, many high-profile companies have implemented Six Sigma strategies as a way of saving corporate dollars, increasing quality, and leveraging the competitive edge.²⁴

One of the guiding principles behind Six Sigma is that variation in a process creates waste and errors. Eliminating variation, then, will make that process more efficient, cost-effective, and error-free. This may sound like a relatively straightforward concept, but its application in a complex and highly integrated business environment can be far from simple. The term Sigma refers to a scale of measurement of quality in processes such as manufacturing. When using this particular scale, Six Sigma equates to just under 3.4 defects per million opportunities (DPMO).

HR’s Role in Implementation

HR can be called on to support OED changes in other portions of the enterprise, or it can take on an OED change program within its own department. HR can help by training managers and employees how the process will work, what the changes will be, and what expectations they should have for the results. They can provide tracking systems if necessary to document the program implementation.

Communicating OED Changes   Communication is basically relating the objectives of the organizational redesign to the organization’s strategies and tactical plans. Employees need to understand how they will fit into the new organization, the new process, or the new work assignment. They will need to know that there is training, team building, or individual coaching on the horizon. Communication is more than an e-mail blast to everyone in the organization. It is conversation with groups and individuals. The more employees are included in the OED development process, the more communication they will be receiving along the way.

Measuring Organizational Effectiveness and Development

First comes the goal or objective. Then comes the measurement. There are two types of measurements you can use to determine whether you have reached your goal.

•   Lagging indicators These confirm performance or lack of performance. They measure the results of past actions.

•   Leading indicators These predict performance. They measure actions that will affect future organizational effectiveness.

Demonstrating Value

It is rather easy to demonstrate value. Simply gather the results you have measured and show how your performance has met or exceeded the goals you set. Goals are established to create value for the organization. If you reach them, or better yet, exceed them, there is clearly value for the organization.

Cultural Assessment   There are tools that companies can use to identify both their current and desired culture. One of the most well-known of these tools is the Organizational Culture Assessment Instrument (OCAI)²⁵ developed by Kim Cameron and Robert Quinn at the University of Michigan. Cameron and Quinn analyzed 39 organizational effectiveness indicators and identified two key dimensions, as listed here:²⁶

•   Internal focus and integration versus external focus and differentiation

•   Stability and control versus flexibility and discretion

Four organizational culture types emerged from these studies.²⁷

•   Clan culture Similar to a large family. People have a lot in common. The organization is held together by loyalty and tradition. There is great involvement.

•   Adhocracy culture A creative working environment where employees take risks. Experiments and innovation are the bonding agents within the organization.

•   Market culture Results-oriented culture emphasizing finishing work and getting things done. The emphasis on winning keeps the organization together.

•   Hierarchy culture A formal, structured environment. Procedures decide what people do. Formal rules and policy keep the organization together.

Functional Area 8—Workforce Management

Here is SHRM’s BoCK definition: Workforce Management refers to HR practices and initiatives that allow the organization to meet its talent needs (e.g., workforce planning, succession planning) and close critical gaps in competencies.²⁸

With workforce management, this is where HR will continually be evaluating the ability of the organization’s workforce to meet the competency and talent needs of the organization. Development, productivity, staffing, and effectiveness initiatives will be the core functions of HR’s responsibility within workforce management. Workforce planning and employment is where you will find all the information about staffing, recruiting, interviewing, and employee performance management. Master these, and you will have a strong foundation for HR performance in your employment group.

Key Concepts

•   Analysis of labor supply and demand

•   Approaches to restructuring (e.g., mergers and acquisitions, downsizing)

•   Best practices and techniques for knowledge management, retention, and transfer

•   Leadership development and planning (e.g., high-potential development programs)

•   Success planning programs and techniques

•   Techniques for organizational need-gap analysis (e.g., examination of HR records, interviews, focus groups)

•   Workforce planning approaches, techniques, and analyses (e.g., attrition, gap and solution, implementation and evaluation, reduction in force, supply and demand, workforce profile)

The following are the proficiency indicators that SHRM has identified as key concepts:

Organizational Workforce Requirements

Organizational staffing needs expand and contract with the level of organizational productivity requirements. It’s not always a straight-line relationship that would indicate continuous steady growth. Living organizations inhale and exhale, and workloads grow and contract, often at irregular intervals. Workforce requirements expand and contract with those production requirements.

Workforce Requirements

Forecasting results can be converted into employee headcount and budget impact, and the consequences can demand other staffing needs. Adding production workers can cause an increase in payroll support work levels, for example.

Identifying job openings before they exist is the activity known as forecasting. It is best performed with the aid of operations managers who will be supervising the new positions. Given what is anticipated for growth (or force reduction), a manager is able to convert workloads into staff requirements. Determining the portion of jobs that will be part-time versus those that will be full-time is another contribution of the forecasting process.

Forecasting staffing needs is usually done in terms of the number of full-time equivalent people. That unit value is also favored for budgeting activities. Here is the formula:

Full-time equivalent (FTE) people required = total functional workload / workload handled by one person

Organizational Structure

Aligning the way the parts of an organization relate to one another is considered the organizational structure. HR professionals need to be familiar with organizational structures so they can act as a guide for management in selecting and determining which structure would be best to gain the best performance.

There are six types of organizational structures. (See descriptions in the “Understanding the Organization” section earlier in this chapter.)

•   Departmental

•   Chain of command

•   Span of control

•   Work specialization

•   Formalized

•   Centralized or decentralized

•   Matrix

Restructuring

The act of restructuring the structures of an organization for the purpose of making it more profitable, or better organized, is known as corporate restructuring. Additional changes can necessitate restructuring such as a change of ownership or a bankruptcy filing. Restructuring can include selling off portions, or divesting, to reduce debt or operations. The 1980s experienced a heyday of restructuring because of the rampant undervaluation of publicly traded organizations that attracted hostile takeover attempts. If the targeted organization was lucky enough to find a major investor to ward off the hostile takeover attempt (known as a white knight), the aftermath usually involved a tremendous amount of debt and then restructuring and divesting to pay off the white knight and debt.

During the recent great recession, corporate restructuring occurred as a result of economic decline to reduce financial losses from the lack of revenue. The basic nature of restructuring is a zero-sum game. It can quickly reduce financial losses and simultaneously reduce the tensions between major stakeholders (shareholders) and the overriding condition prompting the distressed situation.

Drivers of Restructuring   Two major reasons for restructuring are divestiture and mergers and acquisitions.

Forms of Restructuring   There are perhaps seven different forms of restructuring. Each is based on specific needs generated just prior to the restructuring efforts.

Downsizing   When production demand drops, for whatever reason, the number of employees required to meet the production requirements will also fall. Adjusting to that diminished level of production is called downsizing, layoff, rightsizing, smart-sizing, or bad luck. It doesn’t matter what percentage of the workforce will be impacted through layoffs. For each individual who receives a pink slip notice, the number is 100 percent. How that process is handled is a topic to be discussed elsewhere.

When the Bell System underwent a seismic rupture in 1982 because Judge Green ordered it to divest the unregulated portions of the Bell Telephone companies, there were more workers than needed in the new unregulated company. Before the judge’s order, the Bell System was composed of 23 operating companies, AT&T, Western Electric, and Bell Labs. Together they were the largest employer in the country with 1,100,000 employees. After the spin-off, the new company was called American Bell and began its life on January 1, 1983, with 100,000 employees and zero revenue. It operated on loans from the other companies. Its reason for being was to sell private branch exchange telephone service to business customers. So, there were marketing people and technical people, too many of each in fact. Thus, it became necessary to develop the first mass industrial layoff in history. The company started with a layoff of 24,000 people in 1983 and followed it with additional large groups of downsizing in subsequent years. That represented a 24 percent reduction in workforce in the first wave of cuts. By any standard, that was substantial downsizing.

Divestiture   This is what the Bell System underwent in 1983. It had to divest itself of the unregulated portion of its business to allow other companies to compete for that customer money. It can also be done when the parent company wants to become more competitive in new business ventures.

In 1911, the U.S. Supreme Court ruled that Standard Oil was an illegal monopoly. Standard Oil at the time was producing, transporting, refining, and marketing oil, gasoline, and other oil-related products such as grease and kerosene. It was ordered to divest itself of the various components into smaller companies so it would be possible for others to enter the marketplace.

Restructuring   As you have seen, restructuring can be done voluntarily or involuntarily. The Bell System and Standard Oil breakups were court-ordered. When done voluntarily, the effort is sometimes called unbundling. Some options for unbundling include sell-offs, spin-offs, carve-outs, and buyouts.

Redistribution of Decision-Making Authority   Organizational structure can determine decision-making authority. Centralizing the organization can pull decision-making into the core headquarters establishment. Decentralizing the organization can push decision-making out into the remote locations. This can be true whether the remote locations happen to have independent corporate identity.

Extended Organization   In 2000 Sara Lee began merging various brands to “create smaller, customer-focused teams. In meats alone, for instance, Sara Lee had 10 different brands, including Ball Park, Hillshire Farms, Bryan, and Jimmy Dean.”²⁹ As a result, supermarkets had to deal with ten different sales reps and process ten different invoices each month. “The new customer-focused teams reduced duplication and were more convenient for buyers—a win-win situation. National retailers responded by increasing their orders for Sara Lee products.”³⁰

Mergers and Acquisitions (M&A) and Divestiture   Mergers, acquisitions, and divestiture are daily occurrences in organizations for restructuring an organization. In some industries, it’s become an annual expected event to restructure, and in others, such as technology, M&A has become the norm. HR professionals need to know the importance of their role with workforce planning when it comes to these activities.

Divestiture   Organizations divest to refocus, rethink, and restructure their core business capabilities with an ultimate goal to be leaner and more cost effective. Going from big to smaller, or refocusing on the core product/service that the organization offers by selling off a separate line of business arms, can present a variety of challenges for HR. To minimize the disruption of operations and employees during divestiture, HR may need to redefine some of the organizational structure that is currently in place. Reviewing re-employment policies, severance packages, and employee classifications and job descriptions for either increased or decreased responsibilities are just a few considerations.

Mergers and Acquisitions   Mergers and acquisitions (M&A) are intended to enhance an organization by accessing market share or increasing assets. It is best to involve HR right from the get-go to plan for the effects that mergers and acquisitions have on an organization, such as culture blending, job function redundancy, and comparison of benefits/compensation/job titles, along with effects on HR information systems, policies/procedures/ethics, and, if there is a union, collective bargaining.

The M&A process has four basic phases, which are covered in the following sections.

Preparation   You must first ascertain whether the HR staff has the necessary knowledge, strategic planning, and project management skills for managing the transition of an M&A.

Due Diligence Production   The due diligence stage is next, which includes scrutinizing not just the financials but many of the other risks associated with HR. The organization’s workforce-related risks are just the tip of the iceberg. Factoring in people matters are more difficult to quantify and yet absolutely crucial.

Research and investigation are needed on the proposed M&A organization to determine the technology differences and needs, structural and talent risks, and cultural issues that will arise. The sheer recognition that two cultures must be brought together and blended to create a collaborative, high-performance new organization is daunting. Compliance, corporate governance, and legal claims/lawsuit information—those in process and those that appear on the horizon as a potential threat—would additionally be reviewed and understood at this phase. It is important to understand that oversimplifying these risks can lead to misguided integration planning, unexpected costs, and loss of critical talent.

Integration Planning   Here’s where a good strategic planning process resulting in goals and objectives is necessary, along with project management implementation. A change management plan associated with a culture blending process, communication strategies, and consolidation activities occurs during this phase.

Implementation, Measurement, and Monitoring Results   The process is not complete when the organizations are finished with the M&A. HR plays a vital role in monitoring the pulse and mood, assisting with workforces that have blended successfully, and helping to troubleshoot new issues that may have occurred during integration. Employees, after all, will be the implementers of the changes to enable an organization to realize the goals of the merger. Creating metrics and milestones that measure the intended results the organization set out to achieve, with respect to the people related value of the deal, is the last phase for HR.

Transition Tactics   During a major transition, management often expects leadership transitions to happen without major changes in the acquired business. When clarity and trust are most needed, it’s possible that leadership may appear more focused on itself (individuals impacted personally by the transition) than on taking care of its anxious people. Employees can’t help noticing the disconnection between leadership’s actions and words, with potentially damaging effects of costly turnover of valued employees and serious morale and productivity problems. Poor people management and communication drain financial value from many changeovers.

Having a clear vision and consistent frequent communication about organizational transition is vital. Creating a strategic blueprint should revolve around communication, not just to the workforce but also to other stakeholders such as the customers and communities served by the organization (plural in the case of M&A). The best transition tactics revolve around trust and communication. Leadership groups must move forward together, fully aligned, and “owning” the strategic blueprint of the newly created vision in sharing its messages. If the messages and themes that are expressed to all parties are not consistent, then confusion, fear, and a lack of faith in the transition process will likely occur. Those signals could send tremors of uncertainty throughout the organization. The workforce can surely be counted on to fill a vacuum of information with worse-case scenario rumors, in terms of who will be retained, who will be let go, and how the everyday rules of the game will change.

Downsizing   Downsizing is the act of reducing the size of a workforce. It can be done for many different reasons, but the end result is fewer people work at the employer than in the past. In the past few decades, corporate downsizing has become a widely used tool. The impact on individual employees has been immense. To help mitigate that impact, employers have sometimes offered incentive programs with cash buyouts based on the length of service and/or retirement qualification enhancements. Offers have sometimes included months- or years-long support in a job search (providing an office, telephone, computer, e-mail, secretarial support), formal outplacement service through a third-party vendor, and occupational training programs to provide new skills necessary for a career in a new field.

Organizational Interventions

Aside from redesigning the organizational structure, the science of organizational development (OD) can be used to help solve problems with organizations through various interventions.

•   Team building

•   Creating common values

•   Creating a vision

•   Creating a specific role for each organizational segment

•   Facilitating problem-solving sessions focused on organizational structure

Workforce Planning

The exercise known as workforce planning is based on the notion that you want a balance between the work to be done and the workers available to do it. Over time, that balance will change, shifting toward one side of the equation or the other.

Workforce Planning Process

There are many approaches you can take to workforce planning. All of them, ultimately, boil down to one thing, analyzing the gap between what you estimate will be the staffing requirement and the staff you have available to meet that requirement. Once the gap is determined, then plans can be laid to identify action steps that will be necessary to narrow that gap.

Supply Analysis   This is a strategic evaluation of supply chain options such as sourcing alternatives, plant locations, and warehouse locations. Will the workforce you need be available in the location where you want it?

Trend and Ratio Analysis Projections   Ratio analysis compares current results or historic results but always at a point in time. Trend analysis compares historical results with current results and identifies what may happen in the future based on the trend of data in the past.

Turnover Analysis   There are many possible reasons for employees leaving the payroll, including resignation, dismissal, death, long-term disability, and transfer to another subordinate company within the same parent company. Identifying the reasons that employees are leaving provides the data needed to analyze trends and identify potential problems within the organization. If supervisors are causing high resignation rates, it may be appropriate to train the supervisors or take some other action to reduce the rate at which their subordinates are leaving.

Flow Analysis   This can involve analysis of data, analysis of production line movement, or analysis of order processing, among other possibilities. How processes operate and how flows of products, data, or other items go through those processes are the objective of this type of monitoring.

Demand Analysis

It is interesting to look forward to determine what customers, clients, or patrons will want in the future.

Judgmental Forecasts   These are projections based on subjective inputs. This method is often used when there is a short time to draw a conclusion or data is outdated or unavailable.

Statistical Forecasts   These approaches to analysis use mathematical formulas to identify patterns and trends. Once identified, the trends are analyzed again for mathematical reasonableness.

Gap Analysis

Measuring the distance (or difference) between where you are and where you want to be is known as gap analysis. If you have to train all employees in certain safety procedures, you can use gap analysis to determine what portion of the population has yet to receive the training, or any portion of the training.

Prioritizing the Gaps   Identifying the gaps is the first step. Then, it is a good idea to determine the relevant importance of each portion of the results that need attention. Safety training may be more important (and greater priority) than training on the new benefit forms. Product feature training may be higher priority than updates on vacation scheduling procedures. Setting priorities for all components of the gap is important.

Defining Tactical Objectives   “Tactical plans are sometimes called short-term action plans because they break down bigger-picture goals and strategies into narrower, actionable tasks. The key to a well-developed tactical plan is having specifically stated actions assigned to particular employees with specific deadlines.”³¹ So, identifying specific objectives to be worked on and determining who will do what by what date is the tactical planning component. The following action plan is an example of tactical objectives:

Solution Analysis

In problem-solving, once the problem has been identified, identifying potential solutions comes next. Every solution suggested should be written on a list, regardless of whether you think it might actually work. After identifying all the possible solutions you can, begin writing a list of criteria that are absolutely required of any solution you choose. These are the must-haves. Criteria tell us that no solution will work if it doesn’t meet all of these requirements. Next, compare each suggested solution with the list of criteria and scratch off the list any solution that does not fully meet all of the criteria requirements. What is left will be a list of solutions that can each satisfy the criteria. You may then make a selection from the surviving list of solutions.

When multiple solutions meet all the criteria, using regression analysis can help you decide which one is best for you. For example, it might be possible to solve the problem of turnover by creating a management skills training program. It also might be possible to solve the turnover problem by providing different employee benefits that are more appealing to the workers. It could also be that offering continuing education to employees would have an impact on turnover. Each of those solutions could work. You can determine how well each works by using regression analysis to calculate the contribution each could make to the problem of turnover control. This analysis considers that there is some value to be contributed by each different solution. If you can’t choose all of them, where will you get the greatest impact for your investment of time and money?

The Staffing Plan

Once a list of organizational objectives is determined, it is possible to begin the process of determining the quantity of employees that will be needed in each function to accomplish those objectives.

Statement of Purpose

The purpose of your staffing plan should be simply stated. Universally, staffing involves the activities associated with filling job openings. Candidates can come from both internal and external sources. So, the purpose can be stated like this: “Our staffing plan is designed to meet our employment needs with the right skills in the right jobs at the right time.”

Stakeholders

Everyone who has something at risk if the job openings are not filled with qualified individuals at the proper time is considered a stakeholder. This includes the HR manager, the staffing manager, recruiters, operations managers and supervisors, production managers and supervisors, job candidates, interns, job advertising vendors, Internet sources, and more.

Everyone who has a “stake” in the success of your staffing efforts will fall into this grouping. Not all stakeholders will have the same level of interest or amount of risk involved, however. The supervisor trying to fill the job opening will have the most to gain or lose in the successful completion of the staffing efforts. The HR department’s reputation will rise or fall depending on how well it develops the staffing plan and then implements its actions.

Activities and Tasks

What is involved in a staffing plan and its implementation? More or less it depends on the size of your organization. The larger the organization, the more complex the staffing plan will be. Larger organizations have more complex policies and procedures. Small organizations are more flexible and less encumbered by detailed policies.

Some of the activities you will find in staffing plans are as follows:

•   Identify the organizational goals needing employee support

•   Identify the quantity of full-time equivalent (FTE) employees each goal will need

•   Specify the knowledge, skills, and abilities (KSAs) each position will require

•   Identify candidate sources, considering diversity efforts and KSA requirements

•   Solicit job applications or resumes from qualified candidates

•   Screen candidates for qualifications

•   Select candidates who will likely “fit best” into the job requirements

•   Forward candidate records to selecting manager for consideration

•   Schedule interviews with selecting manager and/or others in the department

•   Administer any other screening device/step such as written tests or skill demonstrations

•   Make employment selection decision

•   Follow up months later to assess the success of the employment selection

•   Make any procedural adjustments for the future based on that assessment

Team Members

Staffing processes involve multiple individuals in organizations of any size. In large organizations, there will be individuals who specialize in given segments of the process. In smaller organizations, there will be greater emphasis on generalists who handle multiple functions.

For example, the HR department may have only one person, the HR manager, who is responsible for all phases of the staffing process. However, in the larger counterpart, there may be an entire staff of recruiters working for the HR department. There can even be psychologists involved in employment screening for some large, sophisticated organizations.

Resources

Staffing resources include all of the people, assets, and funding needed to successfully place qualified people into the job openings. If there is a competitive marketplace where you must try to get your qualified candidates, your competitors may be trying to do the same thing. You will need to distinguish your organization from the competition so you can be successful in attracting the people you want on your staff.

There are internal resources from which you can make your staffing selections. Succession plans will help you identify who is “Ready Now” for promotion, who is capable of a lateral transfer, and who still needs some additional training or experience before being considered “Ready Now” for the job in question. While succession plans normally apply to the executive ranks, employee skills inventories can help you determine who is capable of filling job openings through a database of employee KSAs.

In organizations with labor union representation, it is not uncommon to have union-represented jobs filled based on employee seniority. Internal training centers can produce qualified job candidates with each graduating class.

Don’t forget employee referrals. “I know a guy…” can sometimes provide some very appropriate talent for the staffing needs.

External resources include state employment services, veterans groups, state rehabilitation services for disabled job candidates, educational institutions, job fairs, Internet sources such as Monster.com, LinkedIn, Craigslist, school alumni sites, and a host of other service vendors. And, you shouldn’t forget your own organization’s web site. That can be an excellent avenue for job applicants to enter your selection process.

Communication Plan

A staffing plan won’t be very effective unless people important to its success know what should be happening. Letting employees and people outside the organization know that you are hiring and the type of skill sets you want will boost the placement rate and reduce selection time.

Continuous Improvement

As with any other portion of the enterprise, staffing should be the focus of continuous improvement efforts. Small goals that are frequently reached can result in large progress over the course of longer time periods. Kaizen to the Japanese, making frequent assessments of performance and then setting new improvement goals, will result in substantial performance improvement. Japan’s automobile industry overtook the American market because Honda and Toyota presented better-quality products in the 1980s and 1990s.

Employee Development

Employee development programs are an important aspect of talent management, providing employees with opportunities to learn new knowledge and skills, preparing them for future responsibilities and job changes, and increasing their capacity to perform in their current jobs. Job rotation, job enlargement, and job enrichment represent some approaches to employee development. Another could be an apprenticeship program that relates to skills training.

Higher education tuition reimbursement programs are also offered by many organizations as part of their employee development program. The pursuit of education is normally restricted to an employee’s current occupation or an occupation that exists within the organization.

Other employee development programs that are increasingly on the rise within organizations are those associated with wellness training, stress management, and work-life balance.

Development of Employees

Next to strong retention efforts, employee development is a staffing effort that can lower overall costs and improve morale in the workforce. Giving people the opportunity to expand their skill set when they want to leads to their taking on more responsibility with higher levels of satisfaction. Blocking the wish for learning new skills can only lead to disappointment and discontent.

Talent Management

Talent management involves all the HR strategies and processes that are involved in attracting, developing, engaging, and retaining the KSAs of the workforce to meet the organization’s needs. Talent management goals are simple: manage the human resources initiatives that directly result in employee productivity and that address current and future business needs.

Talent Pools   It’s not just best practice. “Creating and maintaining current skills inventories allow employers to develop succession plans based on current employee skills sets and identify key employees for future openings critical to the company’s leadership and business success. Skills inventories should be reviewed on an ongoing basis and employers should take steps to ensure employees keep their own skills inventory current and updated. By doing so, employers can help ensure the success of their strategic plans and achievement of their company’s short- and long-term goals.”³²

Talent Management Strategies   It is less expensive to tap into the organization’s internal talent pool than it is to conduct an external search for the skills needed in a particular job. So, skill inventories are something that can pay off handsomely. Succession planning, if maintained well, can reduce the panic felt when key people are suddenly out of the picture (death, resignation, long term-illness, or injury). Knowing in advance who has the skills and abilities to do the job, plus the interest and willingness, will accelerate placement efforts.

Addressing the Changing Needs of Employees   Nothing in the world is static for very long, and employee needs are no different. Life goes on, and work is just part of our lives. So, when new babies arrive, someone gets seriously ill, or tragedy strikes and an employee has a death in the family, the employer will be faced with some attendance issues and perhaps some ongoing adjustment requests.

Flexible Staffing   Growing in popularity, telecommuting is an alternative to traditional staffing where everyone reported to a given work location every day. And, there are other flexible staffing options.

•   Job sharing Job sharing is an employment technique that you hear about more and more these days. It offers two or more workers the opportunity to collectively constitute one full-time equivalent employee. One person works the job in the morning, and another works the same job in the afternoon. Considerations involve briefing the “job sharing partner” on the current issues to be dealt with during the next portion of work time. There are some financial considerations, too. Each employee will require the employer’s full contribution toward Social Security and Medicare. That may cost the employee more than if one person were to occupy the position.

•   Shortened workweeks One option is four 10-hour days per week. Another option involves eight 9-hour days plus one 8-hour day every two weeks, which allows a three-day weekend every other week.

•   Phased retirement As opposed to instant full-time retirement, phased retirement is another alternative to full-time employment, which allows an individual to take partial retirement while continuing to work a reduced schedule. It can take the form of job sharing, part-time, seasonal, temporary, or project work.

Alternative Staffing   When looking for alternatives to the FTE 40-hour workweek stereotype, there are some options.

•   Project employees Using project hires and contract labor is an alternative to full-time employment. Project hires are people who are recruited and placed on the payroll with the understanding that their employment will be terminated once the project is completed. It is common in organizations that seek out projects from client organizations. A staff is hired for the project and then let go when the project comes to an end.

Contract labor refers to people who are hired for a specific period of time. An organization may believe that the workload will last until this time next year. So, it contracts with people to handle that workload for the year. At the end of the contract, those folks will come off the payroll, whether or not the project has concluded. They could be “extended” (payroll status maintained) for a designated period of time if the workload has not diminished.

•   Temporary employees One change to full-time employment is the use of temporary employees. It is not necessary to hire people by putting them on the payroll. Employers can expand their workforce quickly and easily by contracting with temporary talent agencies to satisfy their need for additional people. Temporary workers can be used on production lines, in accounting departments, or in any other portion of an organization experiencing a workload that cannot be handled by the permanent staff. Agencies pay their employees, take care of payroll withholding and tax reporting, add a profit margin, and then pass the final rate to the employer contracting for that help.

•   Payrolling When a job needs to be done and the organization does not want to hire someone onto its own payroll to do that job, an alternative is to contract with a vendor who will hire someone to do the job at the client organization. Contractor payrolling is used when you need to adjust to seasonal fluctuations, fill a vacancy while searching for a permanent replacement, bridge the gap in personnel when there is unexpected growth, or use interns for a set period of time. It has many applications, and the greatest benefit is in protecting against charges that the person hired is not an independent contractor but an employee, a problem that cost the company Microsoft just under $100 million in payroll taxes, penalties, fines, and legal fees. This is usually a process used for less than an entire workforce. When single employees or small groups of employees are needed, payrolling services can solve the need.

•   Employee leasing through a professional employer organization (PEO) Similar to payrolling, employee leasing is a process of moving employees to another company’s payroll as a service for a client organization. Typically, PEOs will take over the entire workforce in a client company. PEOs provide payroll services, tax tracking and depositing, retirement program management, health care benefit program management, and even employee counseling and support services. In essence, employee leasing is the outsourcing of the human resource department and the payroll function together. Employees usually become employees of both organizations, the client where they perform their work, and the vendor (PEO) that handles the payroll and HR functions for the client. It means both employers are liable for legal compliance.

•   Outsourcing and managed service providers (MSPs) Another alternative is outsourcing. Outsourcing is shifting a workload out of the organization through a contract with another employer organization, either here in this country or somewhere else in the world. Managed service providers offer to manage functions as part of a strategic decision to move operations or support functions out of an employment organization to a vendor that can perform them less expensively. Such a decision is designed to allow the client company to focus on key activities within its core business while a vendor handles support activities for the client.

•   Temp-to-lease programs When a need exists for employees on a seasonal basis or for jobs that will last longer than a few days or weeks, it is possible for employers to lease their workers from a vendor organization. The vendor provides the underlying employment relationship with the worker. When temporary needs stretch into longer-term needs, it still may not be wise to increase payroll in the client organization. That’s when contracting for temporary agency workers can be converted into long-term employee leases. These workers often have no benefits provided to them. The client organization pays an employment agency a fee in addition to the pay received by the worker assigned to the client. All payroll operations are maintained by the temporary service agency.

•   Rehires and transfers When workloads rise unexpectedly, it is sometimes difficult to bring in new hires quickly enough to respond to that increased demand. Rehiring laid-off workers and bringing in transfers from other portions of the organization can sometimes be good solutions. Rehired workers are already trained and can be productive immediately. Transfers from other portions of the organization have the advantage of already knowing the culture and, if coming from similar or identical types of work, can also be productive rather quickly.

•   Relocation Moving workers from one location to another outside the normal commute radius requires finding them new living quarters. This can be done on a temporary or permanent basis. If relocation is used to respond to union strikes or increased workload, it will likely be a temporary condition. Employers sometimes rent blocks of rooms in long-term hotel facilities so workers can have cooking and laundry facilities along with living quarters.

Permanent relocation can involve workers selling and buying homes and packing household belongings and shipping them long distances, sometimes across the country or internationally. There are many variables in such action on the part of the employer. Enticing employees to accept relocation can be a high hurdle to overcome. Forcing the change for a spouse’s employment, moving children from one school to another, and accepting a higher cost of living at the new location can require employers to provide financial incentives. Those incentives can include such things as the following:

•   Home purchase/lease escape fees A strategy is offering a guaranteed purchase of the employee’s old home following an appraisal of value. The employee can accept or reject the company’s offer if it might be possible to achieve a higher selling price some other way. When there is a fee involved for canceling property leases, employers can pay that fee for employees.

•   Real estate processing fees Escrow fees for selling and buying real property can amount to many dollars. Paying these expenses for a relocating employee can lift that burden and remove another objection to relocating.

•   Mortgage subsidy In an inflationary economy, mortgage rates rise. It can sometimes be necessary for employers to pay a portion or all of the increased mortgage rate to get an employee to accept relocation.

•   Packing/shipping/unpacking Paying the bill for a moving company to pack, ship, and unpack at the destination is another way to relieve employees of financial burden.

•   Funds for taxes on increased taxable income When there are income tax consequences for employees as a result of a relocation, employers sometimes compute a “tax obligation roll-up” and pay that to the employee in a lump sum as withholdings.

Work-Life Balance   According to the web site www.worklifebalance.com, the proper definition of the term is meaningful daily achievement and enjoyment in four life quadrants, namely, work, family, friends, and self. That doesn’t mean an equal amount of time spent in each life area. It means whatever is necessary for personal satisfaction. And, employers can help facilitate that achievement if they are sophisticated about employee management and contemporary issues.

Measuring Talent Management Effectiveness   Talent management can be defined as putting the right people in the right positions at the right time…and keeping them there. So, measuring that must go more than skin deep into the organization’s policies and procedures.

An ADP white paper on the topic suggests that talent management should “connect investments in human capital with the immutable facts of financial performance.” Here are some basic measurements it suggests organizations consider. All relate to the return on investment (ROI) employers can expect from their human capital.³³

•   Overall talent retention rate

•   Cost to hire talent

•   Revenue per full-time employee

•   Time it takes to hire talent

•   Time to full productivity per full-time employee

•   Diversity statistics

•   Impact of voluntary and involuntary employee loss rates on revenue

•   Average tenure of new hires

•   Number of senior positions and the depth of bench strength

•   Number of promotions made from within the organization

Succession Planning

Succession planning systematically identifies, assesses, and develops talent as a key component for business success. It is an ongoing process that enables an organization to plan or recover when critical talent is lost. An effective succession plan includes a focus on identifying, developing, and preparing the placement of high-potential employees for future opportunities. It is foolish to assume that key players would provide adequate notice of resignation. Succession planning is not just for the planned events such as retirements; it serves for replacement planning such as when a key player is relocating because of family or perhaps perished in an accident. Succession should be developed to anticipate managerial staffing needs or key employee positions that would interrupt the business process if an incumbent were to vacate.

A succession plan contains an identification of high-risk positions along with those positions with known or potentially known vacancy dates (as with retirements). Competencies for those positions are identified, and a gap analysis is conducted with the current workforce potential candidates. Individuals within are identified as high-potential employees, which might include their interest/aspiration in the position. After all, not every individual may be interested in moving into a more responsible position. Tentative plans are created for shortages, which may include seeking outside candidates.

HR is typically responsible for maintaining a candidate database of skills and career development plans, along with the monitoring of development activities. Additionally, HR is responsible for sourcing or creating training needs for candidates. Figure 5-4 provides a typical progression of steps in succession planning.

Figure 5-4     Succession planning

Knowledge Management

Knowledge management (KM) is a term that relates to the retention and distribution of organizational knowledge. It is the efficient process of capturing, developing, sharing, and handling of information or resources within a business. KM efforts will generally focus on competitive advantage, innovation, the sharing of lessons from the past, integration, and the renewal cycle of continuous improvement in an organization. Its focus is on the management of internal knowledge held by incumbents as a strategic asset and the mentorship in sharing this knowledge.

Managing Organizational Knowledge

In managing organizational knowledge, organizations identify their collective knowledge to compete, including the creation, storage/retrieval, transfer, and application of knowledge that is pertinent to conducting business. Referred to as knowledge assets, they are one of an organization’s most valuable assets. Knowledge assets include both explicit knowledge (e.g., documented concepts, procedures, and processes) and tacit knowledge (e.g., know-how) that are highly specific to an organization.

Knowledge Management Systems

Today, many organizations and industries as a whole are taking advantage of advanced technologies such as database tools and web-based applications to effectively manage knowledge that their workforce has. Over the last two decades, organizations have leveraged these technologies in their KM initiatives. The ultimate goal of these technologies is to introduce a standardized process to promote a more efficient and effective flow of information and knowledge throughout the organization.

Knowledge Management Process   A knowledge management process is creating, sharing, using, and managing the information and knowledge within an organization. It is a multidisciplinary approach to achieving organizational objectives by making the best use of knowledge.

Uses of Knowledge Management Systems   There are various uses for knowledge management systems, yet generally they all focus on transferring knowledge seamlessly. “Document, document, document” has been the cry in IT for many years because IT has felt the pain of what it’s like to have a programmer “keep the coding in their head.” when an employee has abruptly and unexpectedly left their employment. An example of a KM system is a central database that stores customer data that is used for sales and marketing analytics. The resulting information that the sales/marketing folks place in the database is knowledge, which is then transferred and shared across the organization. A retrieval tool such as a query system could be used to have a new sales or marketing person learn who is the rep for a particular client and what the status is of that particular relationship in the sales cycle.

Strategies for Effective Knowledge Management Systems   Using information systems to manage the knowledge is often a difficult, time-consuming, and tedious task. The following internal and external strategies could help to ensure effective implementation and management of KM systems:

Internal Strategies

•   Identify business challenges. This is related to knowledge management and then capturing essential pieces of knowledge. Focus on knowledge that is important to capture and feasible to maintain.

•   Obtain executive support. Executives in the organization need to be on board with supporting knowledge management initiatives from both a strategic perspective and a financial perspective. The probability of success increases when the knowledge management effort is a top priority.

•   Be patient. Creating a knowledge management system is time-consuming. Managing knowledge is a difficult task with no hard-and-fast rules.

•   Get buy-in and input from the users. Many KM initiatives have failed because the system designers neglect user feedback. Involve users at early stages in the design process and incorporate user input on system design requirements. Remember, the objective is to implement a system that users willfully use, not one that is technically sound but remains underutilized because of a lack of buy-in from potential users.

•   Celebrate small wins. Use a “control tower” approach, where a specific function is mandated to develop a knowledge management action plans, such as accounts payable. This can result in a favorable approach to ensure small wins throughout the organization by showing how a function created their KM.

•   Manage employee behavior. One of the signals of effective KM initiatives is evidence of employee participation. Project leaders should champion changes in KM practices and ensure that the technology provides added value. Moreover, employees should be actively involved in the knowledge management efforts because it is their knowledge that will be leveraged and retained for future.

External Strategies

•   Attend KM-oriented training sessions and conferences. KM is a new frontier for many organizations. Attending training sessions and discussing knowledge management problems and best practices with others will serve as an introduction to the challenges.

•   Establish a peer network. Establish forums where colleagues are able to demonstrate the latest best practices.

•   Benchmark your knowledge management practices. Benchmark your organization’s knowledge management process against competitors to identify areas of strength and weakness.

•   Hire a knowledge management expert. Knowledge management experts provide credibility to the organization’s KM efforts especially to stakeholders. Traditional management consultants may be insufficient because they lack the appropriate expertise needed to address KM issues.

Social Sharing of Knowledge   Knowledge sharing via enterprise social media (ESN) is increasingly being introduced into large organizations. ESN focuses on the use of online social networks among the employees who share the same roles and responsibilities, generally in large organizations, such as matrix positions (e.g., HR business partners in each manufacturing plant who report to both the plant manager and the headquarters’ HR director). Internally, an enterprise social software may be part of the organization’s intranet. ESNs are also used externally and not just within a particular organization, such as software programmers seeking knowledge shared on blogs and networks to figure out how to code a particular challenge.

Functional Area 9—Employee and Labor Relations

Here is SHRM’s BoCK definition: Employee and Labor Relations refers to any dealings between the organization and its employees regarding the terms and conditions of employment.³⁴

Human Resources Management as a functional area within employer organizations didn’t always exist in its current configuration. It began as a kinship department associated with accounting and was primarily responsible for taking care of payroll issues and for record keeping. From that it evolved into a labor relations department responsible for union interactions. In recent years HR has had responsibility for employee management legal compliance and today is involved in strategic issues of employee resource management.

Key Concepts

•   Approaches to retaliation prevention

•   Approaches to union-organization relations (e.g., collective bargaining, contract negotiation, contract administration process)

•   Causes of and methods for preventing and addressing strikes, boycotts, and work stoppages

•   Disciplinary procedures and approaches

•   Employment rights, standards, and concepts (e.g., labor rights, living wage and fair concepts, standard workday), according to the International Labor Organization (ILO)

•   Techniques for disciplinary investigations

•   Techniques for grievance and complaint resolution

•   Types and development of compliance and ethics programs (e.g., design, implementation, performance measures)

•   Types and structures of organized labor (e.g., unions, works councils, trade union federations, other employee collectives)

•   Types of alternative dispute resolution (ADR) (e.g., mediation, arbitration) and their advantages and disadvantages

•   Unfair labor practices, according to the ILO

•   Unionization approaches, methods, and management (e.g., acceptance, avoidance strategies)

The following are the proficiency indicators that SHRM has identified as key concepts:

The Employment Relationship

According to the government, people are either employees or not employees. That begs the question, “What is an employee?” A quick look in our glossary will reveal an employee is “A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed.”

Toward “Employee Relations”

Organizational culture is often defined, at least in part, by the type of employee relations programs that exist. We are talking about structured programs that are designed to help employees feel part of the organization in positive ways. Creating a positive culture is not a simple matter and is an essential influential factor for recruiting and retaining talent. HR devotes much effort and time to champion a positive culture with effective employee relations programs. The human resource department also serves as an employee advocate. Culture is defined by the way an organization treats its employees, customers, and others. It is also influenced by the way power is distributed within the organization and the amount of power employees sense they have. What follows is an overview of different types of employee relationship programs.

Employer and Employee Rights

Under the laws of the United States both employers and employees have rights related to their relationship.

Employer Rights Under the Law   Employers used to be able to treat employees in any way they wanted. That is what brought about the rise of labor unions. Unions protested ill treatment of workers and fought for employee benefits and wages. Over the decades, much of what the unions accomplished for their membership have been transported into laws that protect all employees, not just unionized workers. Equal Employment Opportunity (EEO) is a prime example. Employers may make their decisions about employees based on any factor that is job related. Things such as race, religion, sex, or national origin may no longer be considered in that decision-making process.

As things stand today, employers can do virtually anything they want as long as it doesn’t violate law or public policy. That includes the covenant of good faith and fair dealing. Employers are expected to give workers more consideration the longer they have served the employer. And all workers are due fair treatment. That is a constant expectation.

Intellectual Property   While there are some exceptions, the general rule is that employers own the rights to work-related copyrights, patents, and trademarks developed by employees even if the work was done on the employee’s own time. In the absence of written agreements to the contrary, employers are ordinarily the owners of such work products by their employees.

Employee Rights Under the Law   There are dozens of labor laws on the books today. They have been created to provide protections to employees in the workplace. You can scan the list of federal laws in Chapter 3. Case laws (Appendix B) also bring influence to the subject. All U.S. employers are influenced in one way or another by these requirements.

Employees are usually given the “benefit of the doubt” when it comes to disciplinary treatment or complaint against an employer. Remember, they are always afforded consideration under the covenant of good faith and fair dealing. Employers must treat people fairly, even though they may be categorized as “employment at will” employees.

Employment at will is a form of employment relationship that has been amended over the years. Now, there are many restrictions to an employer’s termination of a worker without cause. And, fair treatment influences strongly employee attitudes and, in turn, production levels.

International Human Rights and Labor Standards   While the United States and other first-world countries lead the pack for employee rights, other countries also recognize the need to protect workers against inhumane treatment and bad employer conduct.

•   International Labor Organization In 1919, the International Labor Organization (ILO) was created. It was later adopted by the United Nations as a component of that international body; 185 of 193 UN member states also belong to the ILO.³⁵ There are four key principles of the ILO.

•   Freedom of association and the effective recognition of the right to collective bargaining

•   Elimination of all forms of forced or compulsory labor

•   Effective abolition of child labor

•   Elimination of discrimination in respect of employment and occupation

•   Organisation for Economic Co-operation and Development (OECD) The OECD was formed in 1961 to stimulate economic progress and world trade. Current members are Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. Member countries produce two-thirds of the world’s goods and services.³⁶

By maintaining contact with many governmental and international agencies, such as the International Monetary Fund, the OECD has become a clearinghouse for a vast amount of economic data. It publishes hundreds of titles annually on a variety of subjects that include agriculture, scientific research, capital markets, tax structures, energy resources, lumber, air pollution, educational development, and development assistance.

•   World Trade Organization (WTO) The WTO has been headquartered in Geneva, Switzerland, since its creation in January 1995. Its 161 member countries focus on global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible.³⁷

Treaties and Trade Agreements   Treaties are formal contracts between nations that, in the United States, must be approved by the U.S. Senate before they become binding on the government. Trade agreements are administrative arrangements generally made by the executive branch of the government that do not require approval of the U.S. Senate. Under international law, both types of agreement are considered binding, even though we only see treaties as enforceable under our laws.

Relevant Employment Laws   Federal laws applying to employee relations include the following:

•   Data privacy Privacy of employee-related data is a prime concern these days, especially with weekly revelations about computer hackers breaking into one database after another. And, the grand prize of all was reached when hackers accessed millions of records in the Office of Personnel Management database. Both current and former employee records were involved. The hack was attributed to Chinese government groups. It is among a growing list of invasions into personal information collections maintained by employers and governments around the country.

Some of the key requirements are shown here:

•   Separation of employment Separation of employment includes every form of voluntary and involuntary employment termination category. Voluntary separations include resignation, retirement, and job abandonment. Involuntary separations include death, discharge, layoff/downsizing, or incapacitation.

Employment Contracts   Employment relationships can exist under a contract or without a contract. Contracts can exist either as oral agreements or as written documents. Either form of agreement will obligate each party to certain performance behaviors. Employers will be obligated for certain compensation, and employees will be obligated for certain work. Contracts spell out how the contract can be ended, meaning how the employment can come to an end. Usually, there is a requirement for a “just cause” before an employer can dismiss a contractual employee.

Written employment contracts will typically contain several sections, such as the following:

•   Job description Lists duties and responsibilities.

•   Statement of authority Details expenditure limits, hiring authority, and what conditions require approval of the board of directors or other authority.

•   Agreement length Identifies the beginning and ending dates of the contract.

•   Performance requirements Documents performance requirements for compensation increases or bonuses. These can include revenue targets, sales targets, or other measurable performance standard.

•   Compensation and benefits Details the base rate of pay, pay calculation (hourly, salaried, commissioned), how increases will be achieved, how bonuses will be achieved, how compensation will be paid (cash, stock, bonds, future payments), pension program (company and employee contribution scheme), healthcare benefits programs (medical, dental, vision, individual or family), perks (company car, airplane, driver, concierge, entertainment tickets for concerts and sporting events), and any other compensation condition upon which the relationship will be based.

•   Other important issues Can include agreements about who owns copyright and patent rights to things produced by the employee during the contract period, nondisclosure agreements for employer intellectual property protection, and noncompete provisions.

•   Termination provisions Can include personal behavior and ethics requirements and other reasons or “causes” for separating the employee from the organization. In many contracts these reasons are specified in great detail. If there is to be a “buyout” for time remaining on the agreement, that should be specified here. “Golden parachutes” are often large sums representing the buyout for early separation such as in a merger.

Oral Employment Contracts   Oral employment contracts can be expressly made, or made by mistake, and still be valid and enforceable, much to the dismay of employers who fall into those traps.

Oral contracts can be created in some unusual circumstances. Supervisors and managers can inadvertently enter into oral contracts and should receive training to help them avoid such pitfalls.

The following are some examples of oral contracts:

•   An in-house recruiter tells a job applicant that this is a great organization and anyone who keeps their record clean “can expect to have a lifelong career here.” Within a year, the new employee’s division was closed, and all employees were laid off.

•   A manager tells a subordinate that “nothing short of stealing from the company” will be cause for termination. Within a year the employee was terminated for inadequate performance.

•   A manager tells a new employee, “Sure, you can bet that you’ll be here at least five years, so go ahead and sell your house in another state and move your family here.” The employee was part of a downsizing 6 months later.

•   A supervisor says to an employee, “Don’t worry about your performance rating. Nobody pays any attention to them here anyway.” Within a few months the employee was terminated because of poor performance.

At-Will Employment   “During the late 19th and early 20th centuries a new set of legal rules emerged in the United States governing the relationship between employer and employee. These rules were called ‘employment-at-will’ and provided that, absent express agreement to the contrary, employment was for an indefinite time and could be terminated by either party, for any reason, or for no reason at all. This doctrine is a unique product of American common law, created by state and federal judges, and continues, substantially unchanged, until today.”³⁸

Currently, employment at will exists in most states, and it is state law that usually governs these employee relationships. In other countries, using different legal systems, employment may be terminated only for cause. That means employers must justify their decisions to end the employment relationship with someone. The behavior of the individual is usually the justification.

Employment at will exists only in the absence of a contract that details the employment agreement between employer and employee. Those contracts can be related to a group, as union memorandums of understanding, or to individuals, such as chief executive officers. Since roughly the 1930s, American courts have been instrumental in identifying conditions under which employers may not arbitrarily discharge people, even though they are at-will employees. Some of those restrictions include the following:

•   Civil service rules

•   Constitutional protections

•   Protections against employment discrimination (based on race, color, national origin, religion, sex, age, genetic information, physical disability, mental disability, pregnancy, veteran status, use of Family and Medical Leave)

•   Whistle-blowing protections

Employee Relationship Strategy

Employee relations are methods for managing the employer-employee relationship. Strategically managing that relationship calls for consideration of four key elements.

•   Union or nonunion status

•   Communication

•   Company culture

•   Compensation and benefits

Union Acceptance/Avoidance Strategies   Employers that have not been unionized have a choice about how they will approach the idea of union organizing. It is possible that an employer would welcome or be neutral toward the idea. Where an employer believes the organization could be well served by having a single voice in representing the employee body, support for unionizing its workforce may be a positive approach. However, if the employer believes that a union would bring lack of flexibility and stringent work rules, then avoidance could be the path of choice.

Accepting the notion of worker organization efforts is rather simple. It could even represent encouragement for the effort. Strategically, the employer would make it known that it supports the union-organizing effort.

Employers that believe unions would not add substantially to their employee management programs will want to use strategies that are intended to show workers that unions are not necessary for their satisfaction on the job. Strategic programs such as honest open-door policies, sincere management attention to employee complaints, promotion from within, employee training programs, employee satisfaction surveys (with appropriate follow-up), competitive benefit programs and wage schedules, and similar policies can help deflect union-organizing efforts.

Global ER Strategies   Each national jurisdiction has its own legal requirements that act as a minimum threshold for employer-employee treatment. Once those minimums have been reached, it is appropriate for employers to ask whether their policies should go beyond to provide enhanced treatment benefits. Perhaps those are insurance programs such as medical, dental, and vision coverage. Sometimes the strategies include higher wage schedules or paid time-off limits than absolutely required. Strategic use of employee benefits can be a strong argument against union-organizing success. Trying to find an appropriate treatment for employee values that can vary by culture in each different country is also a strategic application of union-prevention efforts.

Employee Recognition and Reward

The larger an organization grows, the greater the likelihood that its recognition programs will be structured. In small organizations, recognition can be given in many forms, often as events unfold and accomplishments are achieved.

Forms of Rewards   Employee recognition can include service anniversary awards (watches, clocks, plaques, certificates, pins), employee-of-the-month awards (designated parking space, plaque or bulletin board posting, special benefit like a dinner gift certificate), cost savings suggestions, sales achievement awards, team achievement awards, or individual achievement awards. Obviously, that is not an exhaustive list. You can add others and apply them as your organization finds a fit between the recognition and the accomplishment.

Recognition Systems   Employee recognition systems can be either formal or informal. Formal recognition systems involve programs that are designed to address systemic employee issues such as service awards, retirement awards, and employee-of-the-month recognitions. Informal recognition systems involve supervisor or manager spotlighting of employee accomplishments at an employee meeting or supervisor acknowledgment of an employee accomplishment by giving an extra paid day off.

Recognition and Rewards in Global Organizations   Cultural differences from one country to another mean that the esteem (or value) placed on specific rewards will also vary from one country to another. It may be that employees think a few extra days off are wonderful if they are in the United States. In China, they may place greater value on a free month of health benefits for their extended family. Before offering a recognition to employees in another country, it is a good idea to be sure the recognition will be perceived as positively as it is by the manager offering it.

Feedback as Reward and Recognition   Culture doesn’t usually get in the way of a supervisor telling an employee “thank you” for a job well done. Almost everyone, regardless of their location, feels good when receiving positive reinforcement for their work performance. Managers and supervisors who make it a habit to give thanks to employees when it is truly deserved will find that it is quite the motivator. Everyone likes to feel appreciated.

Employee Communication

Here again, there are formal and informal communication systems. Formal systems include an employee bulletin or monthly newsletter and daily intranet blog updates for company work sites. Informal communication systems can involve manager distribution of periodic e-mails updating workers on specific happenings in the realm of employee relations. Employees are always interested in the subjects of benefits, customer feedback, and new customer contract activity. When the company is given an award for safety accomplishments or production goal achievements, the workers want to know about it. Being sure to communicate those things to employees is often the job of the HR manager.

Including Managers and Supervisors

As important as general employee communication, special communication to supervisors and managers cannot be overlooked. When new policies are issued, for example, managers and supervisors are interested because they will have to implement the policies and answer questions from employees about daily implications. It is not uncommon in larger organizations for managers and supervisors to participate in special meetings just for them. They are often venues for these organizational leaders to learn and provide feedback to senior management about what company policies and programs are working and what are not. Communication flows both directions in such a gathering.

Third-Party Influences on Employee Relations

When we think of employee relationships, we normally consider only the two primary parties: employers and employees. There are times, however, when third parties are involved in that process of conducting employee relationships.

Complex Labor Environments

Even in nonunion environments, there can be third parties in the employment relationship. Often those third parties are government agents responsible for enforcing legal compliance requirements having to do with things such as safety, child labor, equal employment opportunity, or workplace security. Things get complicated when labor unions are active representatives of employees in a portion of the organization and there are no unions in other parts of the company.

Labor or Trade Unions

Unions are groups of employees designated to represent interests of those employees through formal negotiation processes. They are responsible for conducting grievances as employee representatives and for protecting against an employer’s failure to follow termination procedures.

Labor/Trade Union Strategies   Employers may find it an advantage to have a union represent their workers. Or, they may not want to have to deal with the regimental procedures necessary once a union gains a foothold in the organization. Either way, having a strategy for supporting or avoiding union representation is worthwhile.

Increasing Formal Internationalization of Unions   These days, unions are more often international entities such as the International Brotherhood of ____________ (you can fill in the blank with just about any name). So many employer organizations are multinational that unions are forced into the same mode of operation.

Pressing for National and International Compliance   Legal compliance requirements for unions vary from one country to another. It is incumbent upon employers who work with international unions to understand the requirements of each country in which they have represented employees.

Implementing International Framework Agreements   “An international (or global) framework agreement (IFA) is an instrument negotiated between a multinational enterprise and a Global Union Federation (GUF) in order to establish an ongoing relationship between the parties and ensure that the company respects the same standards in all the countries where it operates… Most framework agreements include follow-up mechanisms involving trade union participation. These mechanisms include specific actions on the part of management and workers’ representatives, such as company-wide dissemination (and translation, where necessary) of the agreement or the development of joint training programs. Some agreements provide for joint missions by the relevant national trade union and global union federation in order to carry out on-site monitoring of the implementation of the agreement. Most of them also include mechanisms for the global union federation to raise a case if the company violates the terms of the agreement.”³⁹

Forming Networks and Alliances   The international labor-organizing effort is relatively new. It is building bridges between union organizations in individual countries to create international organizations with a wider influence. And the organizing effort continues to expand into new countries where there have not yet been union representation of workers. In Ireland, for example, the Irish Congress of Trade Unions is the single umbrella for trade unions in both Northern Ireland and Ireland.

Understanding Individual Labor or Trade Unions   Each trade union is organized to assist the members it attracts. Those members have a unifying interest in their employment relationship with one or more employers. In the case of trade workers (carpenters, electricians, plumbers), journey-level individuals can work for any union-represented employer. In the case of labor unions not in the trades (electrical workers, telephone workers, state government workers), employees usually work for a single employer doing similar types of work. For example, the Communication Workers of America (CWA) represents technicians in the telephone companies. The Service Employees International Union (SEIU) represents workers in health care (nurses, doctors, lab technicians, home health workers), property services (cleaning, security, building maintenance), and public service workers (bus drivers, state government workers, school workers).

Managing the Union Relationship   Traditionally, unions have been seen as adversaries of management. These days, more focus is being placed on cooperation between the two. That means employee representatives are often invited to participate in the decision-making process along with managers and supervisors. When given an active participative role, unions can become allies of employers.

Work Councils   Originally in Germany beginning in the 1920s, these groups have been common in other European countries since the late 1990s. Either the employer or employees can request formation of a work council. Member states are to provide for the right to establish European Works Councils in companies or groups of companies with at least five employees in the EU. Through work councils, workers are informed and consulted by management on the progress of the business and any significant decision at European level that could affect their employment or working conditions. Members are usually elected from the employee body. Work councils focus their attention on issues dealing with employee status and rights.

Work Council Structures   Work councils are composed of members from the employer’s body of workers. In many organizations, those are also union representatives. Typically, a work council can be established once there are five employees in the employer’s organization. The following table is an example of how representation of employees can be composed. Notice that there are always an odd number of members to facilitate achievement of a simple majority vote on issues. Senior management are not party to the work council.

Codetermination   In organizations having systems of codetermination, employees are given seats on boards of directors and/or supervisory boards. Policy decisions related to employee treatment are addressed by the board of directors with this system in place.

HR and Work Councils   Work councils are sometimes used in multinational corporations outside Europe. Oracle is one example. At Oracle, line managers and HR managers can make recommendations for hiring and firing, but the work council holds the approval stamp. In the United States, establishing work councils in the absence of labor unions is tricky. The National Labor Relations Act prohibits “company unions,” which is sometimes a label pinned on work councils.

Governments and Other Groups

Government laws and regulations weigh heavily on employee relations in today’s workplace. In every country, laws govern minimum wage, paid time-off allocations or use, safety and health issues, retirement programs, and union relations. It is incumbent upon HR managers to identify the specific legal requirements in each country where they have employees. Compliance, though complicated, can be critical to employee satisfaction.

Collective Bargaining

Collective bargaining is an issue that is generally governed by law. Regulations that implement the law specify how employers are to respond to employee union-organizing activities and ongoing negotiations for contract content. Collective bargaining is negotiation involving how employee relations will be conducted in the employer organization. It results in a formal contract document or resolution of formal workplace practice and procedures.

Contract Negotiation Process   Negotiating a contract requires identifying the subjects to be addressed by the agreement. Then, each party prepares its preferred position on each subject. Then the process of comparing those positions begins. Often, dollars are attached to contract subjects. For example, the length of work shift, the amount of overtime to be paid, and the cost of health care benefits all can be represented by dollar values. If the union wants greater benefits for its members, a dollar value can be assigned to that increase. Employers argue budget restraint and use dollar values to justify their reasoning.

According to the Negotiation Board, there are eight steps in the negotiation process. Here is a list of the process step flow in contract negotiations:

•   Step 1, Prepare Do your research ahead of time so that you know your opponent and you know what you want from the negotiation.

•   Step 2, Open Let the other side know what you want and let them tell you what they want.

•   Step 3, Argue Back up your case with evidence and uncover defects in your opponent’s argument.

•   Step 4, Explore Search for common ground and agreeable outcomes.

•   Step 5, Signal Show that you are ready to reach an agreement.

•   Step 6, Package Put together different acceptable options for both parties.

•   Step 7, Close Come to an agreement and finalize the negotiation.

•   Step 8, Sustain Ensure that their side, and yours, follows through with the negotiated agreement.

HR’s Role in Contract Negotiations   In large organizations, a segment of the HR department will be responsible for labor relations. That responsibility would include duties associated with contract negotiations. In smaller organizations, the HR manager may be the only person in the HR department. Then, that manager is responsible for contract negotiations. Often, there is direct support from the legal department or external legal counsel.

Each component of a contract agreement can be assigned a cost in dollars. Adding all of those component costs can produce the total contract value. For example, health benefits will cost several hundreds of dollars each month to cover an employee and family members. The employer can agree to cover a percentage of that cost, with the balance being paid by the employee. A union will ask for more employer contribution to that formula. And, should the employer agree, the increased contribution can be assigned an incremental cost increase value. Adding that to other cost increases, such as increased pay schedules and overtime rates, will produce a total increase of contract costs. Each time a new proposal is made or received, a cost analysis should be made to determine the budgetary impact. Some costs will be perpetual, such as an increase in pay rates. Other costs can be limited to one time only, such as special bonus payments. There are advantages and disadvantages to costs that will be contained to one period of time (year) versus continuing into future periods of time. Assembling this data is usually the responsibility of the HR manager.

Contract Administration and Enforcement

The thought that only large employers have union contracts is a myth. Many small employers work with union agreements. That is often the case in the construction industry, for example. Operating engineers, teamsters, and laborers, among other unions, will sometimes have agreements with governmental entities that only union-represented workers will be employed on projects funded by that entity. This is common practice for cities and counties, particularly in geographical areas where labor organizations are a strong political influence.

Memoranda of understanding (MOU) and collective bargaining agreements (CBAs) are the written contracts between employer and unions. MOU is a term usually found in the public sector, and CBA is a term normally used in the private sector.

Whether the employer is large or small, someone in the organization must be assigned the responsibility for coordinating work through unions and ensuring the employer abides by all the requirements of the union contract. Sometimes unions require that they process all job requisitions from their employer counterparts. Hiring through union “hiring halls,” as it is sometimes called, is the practice of notifying the union of a job opening and receiving a qualified union member as the new hire designee. It is a simple process that can provide staffing quickly, often with only one telephone call or e-mail conveying the employment requisition.

Large employers will have labor relations staff groups that are assigned responsibility for day-to-day interactions with labor unions, as well as carrying responsibility for contract negotiations. Small employers will rely on a part-time job duty assignment for the labor relations function because it doesn’t require full-time attention. Small employers sometimes rely on their labor attorneys to fill the role of contract negotiator and grievance handler, while job requisitions are processed part-time by another company employee.

Handling Grievances   Employee grievances can relate to any subject but always indicate a feeling of upset or discontent about something going on in the workplace, such as the way they are being treated, organizational policies, and the big category of “fairness.”

In union-represented organizations, the union contract (memorandum of understanding) will usually explain what steps exist in the grievance procedure. They are designed to permit union members the opportunity to formally protest application of any contract provision. Most will deal with working conditions such as hours of work, how shifts are assigned, or seniority practices.

In nonunion organizations, employee handbooks will often detail the steps for submitting and processing an employee complaint.

Note that rarely will such complaints be called grievances in nonunion groups. That is usually a term reserved for union contracts.

Here are the typical grievance-handling steps you will find in most organizations:

1.   A written complaint The employee describes in writing what is causing the upset or discontent.

2.   Supervisor-level discussion The employee’s supervisor (or another group’s supervisor) will discuss the complaint with the employee, reviewing facts and reasons for the decision that resulted in the complaint. If the explanation is sufficient, the grievance ends here. If the employee presents information that causes the decision to be changed, the grievance can also end here.

3.   Management- or HR-level discussion If the supervisor and employee can’t agree, the next discussion is with a management person or the human resource department. If an agreement is reached, the matter is settled. If not, it can go to a final step with senior management.

4.   Senior management The final management step is usually with a senior management official. Sometimes that is the chief executive officer, but it can be with any other designated official who has authority to make any adjustments or decisions deemed appropriate in settling the grievance.

5.   Mediation or arbitration Contracts usually specify whether arbitration will be used to resolve union grievances. Ordinarily, employers and unions will split the cost of hiring an arbitrator. Contracts will also specify the procedures to be used in selecting an arbitrator.

When the Employee Relationship Falters

Things do not always move smoothly in an employment organization. There are times when management and employees do not see things in the same way. Sometimes, feelings get hurt, and people feel like they are being treated unfairly. Whether these conditions constitute a violation of union contract or company policy or are simply examples of miscommunication, they are very real for employees.

Preserving the Relationship at Difficult Times

When disagreements occur and upsets happen, HR managers should focus on preserving their relationships with union officials. The worst thing that can come from disagreements is failure of the communication channel. If parties cease to talk with one another, it is impossible to get back to a normal working relationship. Sometimes simply agreeing to disagree and move to the next step in the resolution process is the best that can be hoped for. But it carries with it agreement to continue working toward cooperation in other areas.

Industrial Actions and Unfair Labor Practices

Either management or union can initiate retaliatory action in the workplace as a response to the other party’s failure to agree at the bargaining table. Industrial actions are designed to get the attention of the opposite party. Unfair labor practices are those activities that violate the National Labor Relations Act (NLRA).

Industrial Actions   Industrial actions can be initiated by either employer or employees and almost always result from the breakdown in the negotiation process.

Employee-initiated industrial actions can include work slowdowns (where production rates are decreased from normal), work stoppage (where a portion of the facility stops its production), and “sickouts” (orchestrated absences by calling in “sick” such as the “blue flu” when police officers fail to report for duty).

Employer-initiated industrial action usually involves lockouts, when employees are prevented from reporting to work because the employer has locked the facility or otherwise barred their access to the work area.

Unfair Labor Practices   The National Labor Relations Act (NLRA) explains that unfair labor practices can be blamed on either employers or labor unions. Common among issues evoking such claims are those revolving around the process of union elections. Unions commonly claim the employer is blocking their organizing efforts, and employers claim that the union is harassing employees and electioneering using paid time. Another issue that generates great numbers of complaints is how management and union members behave during a work stoppage (strike).

Complaints of unfair labor practices are formally filed with the National Labor Relations Board (NLRB). The NLRB will investigate the complaints and issue a determination along with any order for corrective action or limitation on activities of the offending party.

In some instances, when an employer believes there has been a violation of civil law requirements, it will go directly to court requesting an injunction against the union to prevent the behavior that is causing the problem. That is common when striking union pickets block access to parking lots, loading docks, or employee building entrances. Municipal laws in many locations govern how public access to property must be maintained and how public sidewalks and roadways can be used appropriately.

In other instances, unions can seek court assistance when employers are being accused of inappropriate controls on picketers. Use of physical force by private security guards could be an example.

In either situation, the remedy sought through the court is an injunction preventing the offending behaviors. With an injunction in hand, it is possible to request help from law enforcement bodies such as the police department or sheriff’s department to enforce the injunction.

HR’s Role   Human resource professionals are usually the people responsible for monitoring activities in the workplace, documenting the behavior of individuals, and communicating the messages from management and unions to one another.

Managing Conflicts with and Between Employees

Employee conflicts are not always limited to union grievances or discrimination complaints. Sometimes they happen because what happens “just isn’t fair,” and the American expectation is always that the workplace will operate fairly.

HR’s Role in Managing Conflict   Howard M. Guttman, Guttman Development Strategies, Inc., has identified five roles the HR professional should play in managing conflicts within the employer organization.⁴⁰

•   Be a custodian of team alignment. HR professionals should hold a mirror to team members so they can see how well the team has done in reaching its goals. Part of that reflection should focus on individual accountability for participation and results.

•   Drive/monitor accountability. Team members become accountable not only for their own performance but for that of their colleagues—even those who do not report to them.

•   Help assess the team’s conflict-management behavior. The HR professional can guide teams through an exploration of effectiveness in handling conflicts. Identifying specific behavior changes that it will take for successful goal accomplishment then follows.

•   Ensure the right capability set on teams. A major role for HR is ensuring that, after the “should be-as is” analysis, teams receive the skills needed to fill the gaps.

•   Work to make sure that teams are high performers. The internal HR consultant must wear many hats: consultant, coach, facilitator, trainer, and, perhaps most important, role model to support the team’s continued success.

Conflict-Resolution Techniques   Some amount of conflict will always be present in the workplace. The fact that it exists is not necessarily an unhealthy thing. When it is resolved quickly and effectively, it can lead to personal and professional growth. In many cases, effective conflict resolution can make the difference between positive and negative outcomes. The “Leader’s 5-Step Guide to Conflict Resolution”⁴¹ recommends five steps in the conflict-resolution process.

1.   Affirm the relationship I am here because I value your friendship more than I value the discomfort of confronting my hurt feelings.

2.   Seek to understand Covey’s thoughts on listening are worth their weight in gold, teaching one to seek the others person’s feelings, thoughts, and perspectives first.

3.   Seek to be understood After understanding, share one’s feelings, thoughts, and perspectives, not in an attacking mode but in an effort for the other party to see one’s views.

4.   Own responsibility by apologizing Seek to see where any, if not all, of the conflict is one’s responsibility, learning to respond differently in the future. A genuine apology not only affirms the relationship but can do wonders in releasing hurt feelings.

5.   Seek agreement After both parties have apologized, accepting responsibility for their parts in the conflict, seeking agreement means reuniting on the common vision that drew both sides together in the first place, agreeing that the cause is bigger than the conflict is for both parties.

One-on-One Resolution   Rarely do two parties involved in conflict have the skills to dig themselves out of the pit they find themselves in. That requires help from a coach such as an HR professional. The coach will facilitate one-on-one discussions to help the two people identify what they want and why it is important for the other party to also get what they want. Identifying something that will be satisfactory to each party is what the coaching process is designed to accomplish.

Third-Party Resolution   When something formal is required, mediation or arbitration might be the answer. Outside experts are trained and certified as mediators and arbitrators and are available for hire to bring two parties to a resolution of the conflict. It is important that each party to the process agree to accept the outcome as binding. The American Arbitration Association (www.adr.org) and the American Mediation Association (www.americanmediation.org) are two resources for HR professionals when these services are necessary.

Agency Complaints and Litigation   Internal complaints give an employer the opportunity to resolve issues with employees before they fester further and generate formal external agency complaints. Wise HR professionals will make every effort to encourage employees to file complaints internally so they will have the opportunity to investigate and resolve them. Dealing with issues internally is always preferable to having them registered with third-party law enforcement agencies.

External complaints are those filed with state or federal fair employment practices agencies (for example, Equal Employment Opportunity Commission), wage and hour enforcement agencies (for example, U.S. Department of Labor or Wage and Hour Division), or safety enforcement agencies (for example, Organizational Safety and Health Administration or Mine Safety and Health Administration). When a formal complaint is filed with an external agency, it is often a signal that the employer may no longer speak with their own employee about that issue. All discussions with the employee after a complaint is filed must be handled through the enforcement agency. As a practical matter, that means the employer will face some limitations.

Before a response can be prepared explaining what happened and why, the employer will need to conduct an investigation to determine whether the complaint has merit. Based on that result and with the help from legal counsel, a formal response can be prepared explaining the employer’s position.

Remember that these are law enforcement agencies with authority to require employers to take certain actions to remedy complaints if that is warranted. Your legal advisor is always your best ally when working with external agencies. There are usually complaint filing deadlines, designated response deadlines, and deadlines for implementing remedies. Those will vary depending on the agency involved and provisions of the relevant laws.

HR’s Role in Complaints and Litigation   HR managers are often the company’s designated contact for employee complaints. And the HR professional will usually be the person responsible for conducting the investigation into the complaint’s validity. Once the investigation has concluded, it is up to the HR professional to make recommendations to upper management regarding the outcome and any actions that should be taken. It may be necessary for the HR manager to recommend disciplinary action against the offending employee. Or it may be that the HR manager must determine how to help an employee resolve a problem that is not a question of legal compliance, but rather a problem of communication and misunderstanding.

Workplace Retaliation   Every category of federal law that deals with employee relations provides prohibitions against employer retaliation for employees availing themselves of the legal protections against mistreatment. In 2014, the EEOC received nearly 38,000 charges of retaliation from employees who had already filed complaints of discrimination based on a protected class. That was more than 42 percent of all charges filed with the commission in fiscal year 2014. Clearly, people are feeling that filing a complaint with the EEOC has caused follow-on pain.

Conducting Investigations

Investigations are appropriate in several circumstances within an employer’s organization. They can be helpful in a grievance-handling effort and are essential in determining the validity of discrimination complaints. Whenever there is a need to determine facts surrounding a complaint, an investigation should be conducted. Some form of this approach should be used when responding to safety or wage and hour complaints. Interviews may or may not be necessary depending upon the availability of records that can explain the facts.

Internal HR professionals are almost always given authority in state and federal law to conduct an investigation on behalf of the employer. If the organization wants to have an external investigator handle the fact finding, there are some limitations imposed by certain state laws. In California, for example, external investigators who are not licensed attorneys must be licensed private investigators. Other states have different requirements.

Legal advisors suggest that internal attorneys are not the best people to conduct investigations because they could be placed in the position of having to testify to their investigative activities while still providing legal advice to their employer.

Whoever is designated as the investigator should normally follow these steps:

1.   Obtain a written complaint. The employee should write out a complaint that states she was treated differently from others in similar situations based on a legally protected category and that category should be identified. If she can do this, she will have provided a prima facie case, which means it sounds good on its face.

2.   Conduct interviews. Next it is necessary to interview the complaining employee, the supervisor or management person who is named as the offending decision-maker, and any witnesses the employee says were there at the time. Sometimes it is a peer who has been the offending party. When that is the case, at least one interview of the offending party should be scheduled. The investigation should follow whatever leads are uncovered until the investigator is satisfied that all the facts have been uncovered that can be uncovered. Each step of the process should be documented in writing and maintained in a complaint investigation file.

3.   Make a determination. Once the facts have been determined as best as possible, a determination should be made about the validity of the complaint. If the complaint is valid, a remedy should be sought based on both legal and reasonable requirements. If the complaint is determined not to have valid grounds, that will be the determination. The decision should be documented in writing and included in the investigation folder.

4.   Give feedback. The employee who filed the complaint should be given feedback about the investigation results and any decisions made as a result. It may or may not be advisable to provide specific information about disciplinary action taken against an employee. Your legal advisor can give you guidance about that in your specific circumstances.

Disciplining Employees

The progressive discipline model is the one that has been used in American workplaces for more than a century. It is written into many, if not most, union contracts as a requirement to assure management treats its members appropriately when problems arise. Yet some people contend that this model is not as effective as the coaching model. Even the Huffington Post (www.huffingtonpost.com) endorses this approach in its blog article “A Respectful Way to Discipline Employees.”

In small organizations, discipline and termination are handled without many written procedures. The “boss” simply tells one of the employees that they are being disciplined because of a specific infraction. In larger organizations, the procedures for disciplinary action are written down in a step-by-step format and followed by managers.

Usually, discipline and termination are a multistep process. It doesn’t have to be a formal process, but it can be. Here are the typical steps in that process:

•   Oral warning Observing the employee violating a policy, procedure, or instruction. In a personal discussion with the employee, the boss explains the problem and issues a verbal warning that the problem should not happen again.

•   Written warning Observing the employee doing the same behavior for which they received the oral warning. This is an “escalation” of discipline to the next step. A warning in writing should explain the infraction and why it is unacceptable. It should also explain the consequence of the same thing happening again.

•   Suspension Although this step is not always included in the process, it is available for use to emphasize to the employee how serious the behavioral problem is. In many cases, a suspension will be unpaid time off. It can last from a day to several weeks. The length of time should be dependent upon the seriousness of the behavioral problem and the employee’s length of service.

•   Termination The final stage of the disciplinary process is removing the employee from employment. Use of this step acknowledges that the employee cannot be salvaged.

Employers can avoid locking themselves into strict disciplinary procedures if they provide a policy for discretionary disciplinary decisions based on the circumstances of a situation. Policies containing hard rules about steps to be used in the process can prevent flexibility and discretion.

Preventive Measures   The best prevention is great communication. Be sure each employee is clear about the specific expectations you have for their performance. Help them understand how their personal contribution fits into the team and company efforts. Making sure people understand their personal importance to the employer’s success is critical in preventing any behavior problems. It is only when expectations are not met that there are problems. So, be sure everyone understands the expectations that relate to them.

Providing Due Process   Due process is making sure employees receive all the protections to which they are entitled and is part of what contributes to the Covenant of Good Faith and Fair Dealing. It means that every employee will be given an opportunity to hear that there is a problem with their behavior, be it conduct or production, and then given be a chance to change the behavior. Progressive discipline is one approach for providing employees with due process.

Constructive Discipline   It’s not an oxymoron. Constructive discipline can exist. It is the positive outcome of the disciplinary process. It means that even though employees are being disciplined, they understand why, and the treatment is fair within the circumstances.

HR’s Role in Discipline   HR professionals are the coaches for line managers and supervisors. It is HR’s responsibility to track disciplinary cases, counsel managers in how to handle disciplinary interviews, encourage employees when they discuss their problems, and nudge all parties toward a positive outcome. HR is the expert in how to do discipline appropriately. As such, teaching supervisors is a key responsibility of the HR department. And, encouraging employees with problems to do better is also part of the role HR plays.

Functional Area 10—Technology Management

Here is SHRM’s BoCK definition: Technology Management involves the use of existing, new and emerging technologies to support the HR function, and the development and implementation of policies and procedures governing the use of technologies in the workplace.⁴²

Enhancing the effectiveness of HR functions could not be done without the use of technology. HR information systems, applicant tracking systems, self-service portals to company-specific information such as employee handbooks, training programs, benefits—these form the backbone to having HR processes click along seamlessly. HR professionals should fully understand the HR-related technology applications and the potential value of ever-increasing new technologies being developed.

Key Concepts

•   Approaches to electronic self-service for basic HR and people management functions (e.g., scheduling, time keeping, benefit enrollment)

•   Data and information management (e.g., data integrity, confidentiality, security, disclosure)

•   HRIS capabilities and use

•   Policies and procedures for procurement

•   Policies and practices for technology and social media use (e.g., bring-your-own-device, web sites, computers for personal activity)

•   Software for recruiting and applicant tracking

The following are the proficiency indicators that SHRM has identified as key concepts:

HR and Technology

Technology is now foundational to any HR function in an organization. It captures more information and makes that information accessible to a variety of needs and people within the organization. It can make analyzing information far quicker and allows for detecting patterns, conditions, and issues. HR’s technology provides communication support, which is particularly helpful with a workplace that is geographically broad. And when technology doesn’t work as planned or goes on the blink, it can literally cripple the functions of HR.

HR Technology Use

There is no one-size-fits-all technology blueprint for HR. Every organization is going to require HR technology that is specific to the size of organization, geographical and workforce particulars, and industry. The technological platforms and applications will differ, yet the initial blueprint will have the same process flow guidelines for implementation. Think of the computer game Minecraft; the rules are the same, yet each player’s outcomes in building things are hugely different.

HR uses technology to allow more work to be accomplished with fewer resources and by automating jobs and functions to allow greater accuracy and speed of processing or providing information to stakeholders. This is the true value of HR’s technology use. Examples of technology include the following:

•   E-signing, the electronic signature to process authorization of documents

•   Electronic recordkeeping, a big advantage in the ever-growing field of legal record retention requirements

•   Mobile learning, offering instructional content delivered to wireless mobile devices to facilitate information sharing and learning

•   Intranet, access to information for the workforce for a broader style of communicating and understanding

•   Gamification, a technology offering an approach for enhancing learning

•   Blogs, for communicating both internally and externally

•   Social media, for customer service and for promoting information/communications for shared purposes

•   Self-service systems, portals that allow targeted groups of employees to access their information such as benefits, payroll, and initiating selections and changes

Advances and Leveraging HR Technology

An ever-changing landscape in HR, technology changes the way HR functions and supports the organization in doing its business. HR professionals should be aware of the trends, the capabilities, and the issues associated with technology in order to be strategic partners and help their organizations with their competitive vantage.

HR professionals can leverage technology to increase the efficiency of HR processes and functions by transforming data into sources of immense value to internal stakeholders. We have been experiencing a digital revolution that is a far cry from the industrial revolution and one that is at a rapid pace of constant change. The world has embraced technology, and HR has been on the forefront of the adopting technology within organizations. The many advantages in doing so include streamlining the processes and reducing administrative work; improving efficiencies; reducing costs, especially those related to compliance; providing real-time metrics to facilitate planning and decision-making; improving service to internal and external stakeholders; and enabling the sharing of information.

Information Management

HR’s information, largely maintained within technology vehicles, is highly confidential to both the workforce and the organization. As such, there are challenges in how this information is managed and accessed. There is the complexity of too much data—what to use and what not to use. And then there is real-time access where users are interacting with information that is in real time. Transparency of data is another consideration—where the information is sourced and who will have access.

HR in the Era of Big Data

The era of “big data” has been ushered in because of technology. Big data refers to the large amount of dissimilar data such as images and figures, tables, charts, and words. Users can access and do what is known as data mining—extracting particular data that serves their needs. In some large organizations, the HR function will have data specialists such as compensation or affirmative action analysts to gather and scrutinize data collected. In his article “The Promise of Big Data for HR,” Alex Levenson⁴³ discusses the likely paths for HR. They are as follows:

•   Collecting data New data collection about how employees do their jobs can provide process insights, possibly reducing errors and increasing productivity and efficiencies.

•   Using data effectively Data can be used to understand the motivation of employees, their engagement, and why they do what they do.

•   Strategic analysis Mapping how information flows in organizations and how it impacts the manner in which people rely on it to do their jobs.

Measures, Metrics, and Analytics

Analytics help HR professionals translate data into action and decisions. HR can use analytics to link HR outcomes to organizational results by starting with a foundation of accurate, consistent, integrate, accessible, and relevant data.

Sample Human Capital Metrics   A sample of human capital metrics would be using an employee database to track the knowledge, skills, and performance of employees; then using the analytics to identify the key performance indicators of high-potential employees to manage critical needs and projections for the workforce, perhaps because of anticipated retirements; and finally using the analytics to assess the marketplace for recruiting replacements and attracting the talent anticipated, along with the budget resources that will be required for workforce planning.

Why Analytics Matter   Analytics have the ability to improve organizational performance because they can improve and drive the planning and forecasting processes, shorten cycles, reduce costs, and direct resources for just-in-time needs.

HR Information Systems

A human resource information system is technology software that supports the functions of HR and is the workhorse of administration for HR data to be gathered, stored, maintained, retrieved, analyzed, and reported. Processing employee data, researching, answering questions—these were the activities that made up the major components of HR’s time in the past. Enter HRIS technology and poof, the time-consuming activities of a typical HR professional diminished. An HRIS offers the ability for increased efficiency and accuracy to be disseminated at a lower cost.

HRIS records involve fields of data including those shown in Figure 5-5. This is not an exhaustive list. Many other records are maintained by some employers.

Figure 5-5     Types of data included in employee records

HRIS Selection

Selecting and implementing an HRIS must be done right because errors in selection will have a profound impact. The HRIS software programs range from those serving employee groups up to 100 people to systems that can handle unlimited data fields and unlimited numbers of employees. Obviously, the prices of such software systems vary according to the capabilities they offer. The first thing to do in selecting an HRIS is to identify all the stakeholders and then do a needs analysis to determine what the features are needed for the stakeholders. A complete analysis will involve not only what the HR needs are but also what the user needs are when interacting with an HRIS.

Build, Customize, or Outsource Development   When deciding on an HRIS, you must consider whether the system is going to be developed internally by the organization’s IT group or will be an off-the-shelf system such as PeopleSoft. Another choice is to outsource the HRIS to an external vendor because there are many payrolling services available.

Integrated Solution or “Best-of-Breed” Option   A best-of-breed (BoB) option is the “best-fit” solution for each functional area in HR. Although a BoB option performs specialized functions better than an integrated system, this type of system is limited by its specialty area. To fulfill varying requirements, organizations often use best-of-breed systems from separate vendors. An integrated solution features a common interface across applications.

The choice between an integrated or best-of-breed solution comes down to how to deliver the technology. Will it be on-premise where the organization has software supported by internal IT staff, or will it be hosted, where the software is installed at the vendor’s site and supported by external IT? There is also software as a service (SaaS), which is where the organization does not purchase any software. Instead, it subscribes to a service that is accessed via the Internet.

Data Access   The data in an HRIS is not restricted to just the HR department. This is referred to as democratization where HR data is provided with direct access by those who need it. Executives, finance, payroll, managers, hiring managers—there is a stakeholder for just about every source of data. This type of access brings with it both legal and ethical considerations, including the protection of employee private information and the dissemination of it. Creating restrictions on the access to different portions of an HRIS is imperative when considering the design and implementation.

Database Structure   An HRIS is a database, and data is a structure that stores information in an organized manner. Access to the information in an HRIS typically happens through the following means:

•   HR portals A portal is a customized entry point via the intranet or Internet for employees and applicants that allows them to access information such as benefits enrollment.

•   Employee self-service (ESS) web sites that often are accessed via the HR portal This is normally associated with transactional functions such as updating personal information, filing expense reports, and changing 401(k) selections.

•   Manager self-service (MSS) These are tools that are like the ESS, via an HR portal, that allows supervisory management to conduct HR-related transactions such as performance appraisals, job descriptions, and attaining reports or viewing information.

Data Protection   Personally identifiable information (PII) is a crucial concern with HRIS and other systems in protecting employee data. It has a high-priority status in today’s world to protect it from hacking. Risk managers, IT managers, security managers, and audit managers all have a vested interest in HRIS data protection. Unauthorized use or loss of personnel data is a constant threat, and a breach of the HRIS could be catastrophic to an employer.

HRIS Implementation

Most implementations of HRIS systems will use a project management approach. It will take a team of folks from both the internal IT department and the external IT consultants and HR professionals to follow a proven systematic framework over a period of time. Rushing the implementation of an HRIS is a disservice—take the time to be thorough when following the implementation steps. The steps follow this order:

•   Assessing whether to flush out and determine the requirements

•   Identifying the project parameters such as budget, technology limitations, and time

•   Evaluating software packages against the requirements and parameters

•   Gathering the project task committee, stakeholders, and implementation group

•   Clarifying vendor requirements and putting out an RFP to vendors

•   Screening the RFPs

•   Selecting the best vendor/software

The Importance of Systems Integration   Implementing an HRIS is complex and expensive, and there are headaches of unforeseen factors that come up. A systems integration approach that is thorough, looking at the entire process well before fingers are put on the keyboard, will be well worth it in the end. You need to look at all the software components involved and how the entire process will integrate into the HRIS. There are two common approaches: a continuous integration, or waterfall, approach or a big bang approach.

Continuous Integration Approach   With continuous integration, the HRIS components are integrated as they are developed into mini-versions of the HRIS. The developers will build chunks or portions of the system to integrate them into the whole. This causes an incremental building, which eventually creates the larger final HRIS. Throughout the development process, the HR functions can see the workings of what is created and massage the development process. This approach is generally perceived as less risky.

“Big Bang” Approach   Not until everything is ready will the individual components making up the HRIS be integrated—thus the label big bang. This approach allows for everything to be finished, and then testing begins. It can be time-consuming using this approach and cause system failures. Smaller organizations will generally adopt this approach, especially when using off-the-shelf or external HRIS implementations.

Policies for Technology Use in the Workplace

Technology use policies can raise some sticky issues for both the organization and the workforce. They can work well when organizations balance security, compliance, and privacy concerns. The key is being collaborative and thorough in the approach to creating policy and ensuring that policies are being updated to keep pace with the continuous growth of new and changing technologies. Just a few years ago smartphones and watches came on the scene, and around the corner will be new technology that will affect policy-making.

Developing Workplace Policies

“A policy is a broad statement that reflects an organization’s philosophy, objectives, or standards concerning a particular set of management or employee activities. Policies reflect the employer’s employee relationship strategy. They are general in nature and are expressed through more specific procedures and work rules.”⁴⁴

There are nine steps involved with developing workplace policies.⁴⁵

1.   Identify the need for a policy.

2.   Identify who will take the lead responsibility for this policy development.

3.   Gather information.

4.   Draft the policy.

5.   Consult with stakeholders.

6.   Finalize and approve policy.

7.   Consider whether procedures will be required to implement the policy.

8.   Implement the policy.

9.   Monitor its success, and review and revise if necessary.

Developing Employee Handbooks   An employee handbook is a document that communicates organizational history, mission, values, policies, procedures, and benefits. It should contain information about all the “way we do things around here” and why we do them that way.

The steps for developing employee handbooks are similar to those involved in developing workplace policies.⁴⁶

1.   Review and make required revisions to the current company policies.

2.   Create an outline of what to include in the employee handbook.

3.   Create summarized versions of each policy and procedure.

4.   Add each summary statement in the appropriate sections according to the outline.

5.   Review the entire handbook.

6.   Provide a finalized version to legal counsel for review.

7.   Select a means of publication.

8.   Distribute handbooks.

9.   Update as necessary.

The majority of organizations are finding it extremely helpful to have their employee handbooks electronic. It allows for the updating (and announcement of updates) to be more frequent and an acknowledgment from employees that they are aware of the policy changes.

Bring-Your-Own-Device Policy   A bring-your-own-device (BYOD) policy applies to employee use of personal electronic devices for company purposes. Taking a clear position on employee-owned devices via a policy is critical. A policy should outline the terms for eligibility for BYOD, as well as protocols for using personal devices.

Allowing employees to work on their personal laptops, tablets, and smartphones instead of company-issued equipment has been a trend that has been driven in part by society that now relies on the use of technology for both work and play. While allowing or asking employees to bring their own devices can lower costs and improve efficiency, effectiveness, and morale, it can also raise concerns of security and legal compliance. A well-crafted policy can alleviate those concerns.

From an employee perspective, the largest concern is that BYOD could lead to a loss of employee privacy. Employees may worry that their company will have inappropriate access to their personal data, as well as to their photographs, contacts, and other information—and that they could lose all that information if the company attempts to remove or “wipe” business information from the worker’s device, which typically happens after an employee’s employment has ended.

On the organization’s side, the primary concern is related to security. For example, devices may not have an automatic lock code or timeout function, and some people do not use passwords to protect their devices. Equally troubling are worries that employees may connect to their devices via unsecured Wi-Fi, share them with others, or simply lose them. All of these possibilities raise the risk for the unauthorized disclosure or destruction of business data.

If nonexempt employees are asked to use their own devices for work, the organization opens itself up to exposure under the federal Fair Labor Standards Act and state overtime and wage payment laws. Nonexempt workers can be in a position to respond to e-mails/text messages or to otherwise engage in work activities outside their scheduled work hours.

Collaboration

Because of the globally dispersed and diverse ways of working, technology vendors have created platforms that allow employees to collaborate more efficiently, such as programmers collaborating on coding. Organizations are recognizing this and adopting collaboration policies and tools to facilitate this new form of communication and productivity learning.

Groupware   Groupware is a specialized software application of a collaborative nature that facilitates interaction between people, helping them work together. Webinars, videoconferencing, and online collaboration tools such as Google Docs are just a few examples of groupware.

Effective Collaboration Policies and Approaches   Organizations have established practices that create greater effectiveness for these collaborations. Webinars may be arranged at times that are early in the morning for those on the West Coast and thus later in the day for those located in Europe, allowing participation and recognizing that it’s outside the normal 8 A.M. to 5 P.M. routine. Also, the ability to record meetings using webinar technology allows those in Australia to view a meeting presentation instead of participating in the wee hours of the day, for example.

Of course, legal disclaimers and the rights and responsibilities should also be considered in policies that protect trade secrets and confidentiality.

Social Media

Social media policies and practices are land mines in today’s world. With the ever-changing technology and new platforms popping up just about every year, social media is an important technology trend that HR professionals need to stay on top of. Policies need to be aligned with the organization’s ethical and cultural expectations and its core values. They must reflect the organization’s legal and reputational risks too. What will the organization consider as an infraction of ethics with an employee’s personal postings? Many situations have popped up challenging this issue within the last few years, causing newsworthy headlines.

Effective Social Media Policies and Approaches for Personal Posting   The types of personal posts that employers should be concerned with by their employees are the ones that disclose proprietary information, harass other employees or customers, reflect poorly on the organization, or are considered inappropriate comments (non-work-related included). There is a balance of restrictive and permissive aspects for personal posting, and a policy that establishes what constitutes both should be evaluated and updated on a frequent basis.

Networking

Social networks are the online clusters of individuals in groups with shared interests. These networking sites connect individuals with shared interests, regardless of their geographical location. An exchange of private and public messages can occur. They may be groups of professionals, such as alumni from a college, or informational, such as people with hobbies or seeking information such as do-it-yourselfers.

Effective Networking Policies and Approaches   Similar to social media policies, networking policies should protect the reputation of the organization and outline expectations of its employees, values, and ethics.

Communications

Policies and practices with regard to communication in technology require a balance between protecting the organization’s proprietary information, its security, and its legal interest and getting work done by the workforce. Here again, having expectations well thought out with examples will help the workforce know where the line is drawn for inappropriate communications.

Effective Communications Policies and Approaches   Over the years, employers have discovered that the best approach to technology communication policies is constantly reminding employees of policies such as the monitoring of employee e-mails or browsing histories. Notifying employees, new hires, and even executives about the potential of monitoring can serve as a deterrent for inappropriate communications and resources. Further, when an organization regularly advises employees that their communications are not private, it makes it problematic for employees to contest confidentiality in lawsuits.

Chapter Review

In this chapter, you learned about the structure of the HR function within organizations. You also reviewed organizational effectiveness and development, workforce management, employee relations, and, finally, technology and data. These collectively compose the entity called an employment organization. There are some new approaches now being used in these areas of HR management that the certified professional will need to be cognizant of and consider using in the operation of a contemporary HR management department.

Questions

1.   A large technology company has identified a group of key managers in various departments who were hired with employment contracts that included large equity options. The company went public 2 years ago and continues to see a steady increase in stock value. There is a realization that many of these managers may retire when they are eligible to exercise their stock options in three more years. What OD activity should HR be focused on related to this circumstance?

A.   Review the organization’s retirement plan and begin counseling discussions.

B.   Expand the vacation policy for this group of managers.

C.   Design a succession plan and identify high-potential employees.

D.   Hire executive coaches to help this group of management with work-life balance.

2.   The process of analyzing and identifying the need for availability of human resources so that the organization can meet its objectives is known as:

A.   Strategic planning

B.   PEST analysis

C.   Human resource planning

D.   Organization planning

3.   The AB Trucking Co. is expanding its routes and hiring more people. Those changes will mean that employees will have to take on different work assignments. How should the HR manager handle those changes with the workforce?

A.   Explain the coming changes to all employees and solicit their help in deciding how to assign the new routes. Prepare a project plan and make sure everyone has a chance to see it before the implementation date.

B.   Explain the coming changes and tell the truckers that assignments will be made based on seniority. The new people will be assigned last.

C.   Explain the coming changes and let the senior executives handle the questions about how new job assignments will be made.

D.   Explain the coming changes and let the employees discuss among themselves how they want to assign routes to the workforce.

4.   Mergers and acquisitions (M&A) provide HR managers with special problems of cultural differences. To make sure that the cultures don’t clash after the merger, the HR manager should:

A.   Assign a subordinate to monitor the complaint levels and report on problems that are being addressed.

B.   Conduct meetings with key players from each organization to outline the cultural values of each organization and determine how best to protect them in the blended employer unit.

C.   Send memos to department heads that specify the new cultural characteristics and express the expectation that the department heads will “make it happen.”

D.   Provide written complaint forms to all employees and express a willingness to listen to any comments the employees have to make about the merger.

5.   Harriet has just taken over for the HR manager in her group, and her boss is asking for an update on the succession plan. He wants to see the employee skill inventory as soon as possible. Harriet didn’t even know there was a succession plan. What should Harriet be looking for in her files?

A.   A confidential record that lists each employee’s skills and abilities

B.   A list of only the top-rated people in the group who have computer skills

C.   A list of everyone in the group identifying each person’s skills and whether they are currently ready for promotion

D.   A list of people showing what individuals are capable of doing now, without regard for any future assignment

6.   An employee in Cortez’s organization came to him and suggested that she and her co-worker could consolidate their duties into one job and each work part-time, sharing the 40 hours each week so the work got done as always. What would you say if you were Cortez?

A.   Unfortunately, the Fair Labor Standards Act and the Unified Job Consolidation Act say that sharing jobs is not permitted because it would violate union agreements.

B.   There is no reason that it couldn’t work if Cortez believes the two people are capable and want to make it work.

C.   Having more than one person and one Social Security number on one job assignment won’t work. It makes tax reporting impossible.

D.   It’s not a good idea because it doubles the liability for workers’ compensation and unemployment insurance.

7.   The local county’s workforce has been decimated in recent months because the pension plan is changing and folks wanted to get their higher-level calculation before the changes cut that formula. The result, however, has been that a great deal of organizational intelligence walked out the door. The senior staff are suggesting you hire back some of the key personnel as temporary workers until you are able to get replacements trained. Is that a good idea?

A.   Hardly ever. It gives the newly retired people a way to “double dip” and make more money than they would have if they had stayed on the job without retiring.

B.   Sometimes. If the temporary period is truly used to train a replacement, it could get the organization across the institutional knowledge gap, passing along that information to someone new.

C.   Always. There is no downside to bringing back retirees as temporary workers. So what if they make a bit more? The work gets done without interruption.

D.   Maybe, if there is a limit of 6 months on the temporary assignment in compliance with the Fair Labor Standards Act.

8.   The Tasty Good Corporation downsized because of intense global competition and modified its strategic business plan for the year. The most important task that the HR department’s training and development function needs to do to support the change is to:

A.   Cost-justify training.

B.   Work with employees on accepting the change.

C.   Evaluate the effectiveness of all training programs.

D.   Link training and development to the new strategic plan.

9.   One of the most important competencies of an HR professional is:

A.   Skilled project manager

B.   Masterful change agent

C.   Excellent time management skills

D.   Listening

10.   Human resource management as a function within employer organizations has developed into a critical business participant because:

A.   Strategic business success can be accomplished only if minor staff functions are given some consideration in planning conferences.

B.   Accomplishment of organizational objectives is dependent upon strategic deployment of all resources, including human resources.

C.   Finding a seat at the table with other senior executives requires HR executives to contribute to strategic efforts and offer accountability for resource management.

D.   HR management is a function closely allied with accounting and finance, so strategic management of finance can’t be complete without a contribution from HR.

11.   As the HR professional in your organization, you’ve been asked to submit a recommendation for the best way to convert to the matrix form of organizational structure. What is the most important issue you might encounter?

A.   Matrix organizations don’t have strict reporting relationships, so supervisors will be upset at their loss of control.

B.   Because the matrix organizations are “loose” in their management oversight, results may need to be monitored by executives more carefully.

C.   When matrix organizations are formed, it takes some time for people to get used to working in that type of configuration. There is a “break-in” time required.

D.   Unions object to matrix organizations because they impinge on union representation authority.

12.   When participating in a merger or acquisition, part of the process includes assembling data from the “due diligence” process. In many jurisdictions much of the information about employer liabilities requires disclosure. These things could include:

A.   The number of parking spaces that have disabled markings and the quantity of fire extinguishers in the building.

B.   The number and type of discrimination complaints, and the number and type of law suits dealing with employee management issues.

C.   The number and type of safety classes held for employees each year.

D.   The amount of budget allocated to overtime versus straight time payroll.

13.   HR professionals must be able to explain to employees the status they enjoy with the employer. While some employers operate by specifying that status to every employee in writing, those who opt not to do that will wind up operating with what type of employment relationship?

A.   All employees will have oral contracts based on the promises made during the interview process and conversations about the job offer.

B.   There are never any contracts made in the employment process, oral or otherwise. The default is a relationship based on promises from the employer.

C.   In the absence of contracts, the relationship is “at will” for each party.

D.   “At will” employment is never a default. It must be specified. So, the default employment relationship is “as promised.”

14.   Employees are sometimes caught up in downsizing efforts that are aimed at budget control. What are employers required to do when designing downsizing programs?

A.   Compare them to programs that were used by other employers with headquarters in their same city.

B.   Analyze their estimated results for age, race, and sex discrimination.

C.   Determine how many people will be affected from each department.

D.   Give the CEO and board of directors a written report on the downsizing impact on the organization’s budget.

15.   One of your employees has just been discovered stealing large amounts of money from the accounts receivable account. You have the evidence in hand. What should you do about that?

A.   Reason with the employee and try to get them to give the money back.

B.   Suspend the employee for 2 weeks while the employee tries to stop taking drugs.

C.   File a police report of theft/embezzlement and criminal complaint against the employee and then terminate the employer from the payroll.

D.   Call the insurance company to file a claim of loss.

16.   One of the unions representing people in your organization has just called for a boycott of your products and services. What can you do about that?

A.   Negotiate with the union whatever will be needed for them to cancel the boycott.

B.   Take the union to court and get a judgment against them.

C.   Begin an advertising campaign that explains how the union is wrong.

D.   Turn the entire problem over to the legal department.

17.   A departmental manager has called you to report that a union steward has been behaving badly in grievance meetings. What can you do about that, if anything?

A.   Nothing can be done about that.

B.   Call the steward in for a chat. Explain that they will be disciplined if they don’t change their behavior.

C.   Advise the manager to suspend the steward for bad behavior.

D.   Call the union president and discuss the problem. Ask the union president to control the steward’s behavior.

18.   HR in the twenty-first century embodies:

A.   A tactical administrative role and a strategic operational role

B.   A strategic administrative role and a strategic operational role

C.   A strategic administrative role and a tactical operational role

D.   A support role for corporate strategies only

19.   What are three of the six types of strategic differentiation?

A.   Service differentiation, accounting differentiation, employee differentiation

B.   Reputation differentiation, leadership differentiation, employee differentiation

C.   Product differentiation, relationship differentiation, price differentiation

D.   International differentiation, competitor differentiation, banking differentiation

20.   BYOD policies must be carefully crafted to make sure these things are addressed:

A.   That dogs brought in the workplace are well behaved and always on a leash

B.   Legal compliance with current technology

C.   Security, legal compliance, and privacy of both employee and organization

D.   That all levels of employees are offered to bring their dogs into the workplace

21.   A detailed HR analysis during the HR strategic process serves what purpose?

A.   Creating HR’s goals and objectives

B.   Reviewing the code of ethics

C.   Identifying the HR gaps

D.   Identifying key employees

22.   What is the main reason HR is considered a valuable player in the strategic planning process?

A.   Ability to provide programs

B.   Total rewards administration

C.   Access to employment laws

D.   Knowledge of the entire organization

23.   Besides activities, HR should also measure:

A.   Progress against goals and objectives

B.   Meetings

C.   Results and outcomes

D.   Projects and initiatives

24.   What is the goal of an HR audit?

A.   Demonstrating value

B.   Controlling costs

C.   Identifying the existing gaps in HR processes

D.   Comparing human capital to organizational needs

25.   Which form of measurement is an overall yet concise picture of the organization’s performance?

A.   Balanced scorecard

B.   Internal audit

C.   ROI

D.   External audit

Answers

1.   C. A succession plan is a key component for business success and should be part of every organization’s human resource development program to be sure that there is no gap in knowledge that cripples an organization because of the departure of key human capital.

2.   C. Human resource planning involves all facets of people management issues. Forecasting the need for more or fewer people, budget considerations, and recruiting sources comes into play. How HR can be used to support the organization’s strategic plans is critical.

3.   A. Whenever possible, involving employees in designing the plan for accommodating organizational changes will be the best for employee morale.

4.   B. Involving key managers from each organization can provide a foundation for whatever cultural values the new organization wants to build.

5.   C. The list should show what skills each person has now and whether they are ready for promotion now or need further experience or training before being ready for promotion.

6.   B. Sometimes, using part-time workers to accomplish one job is a good solution. A great deal depends on the reliability of incumbents.

7.   B. One reason these arrangements sometimes fail is that they go on and on and on. There is no real replacement training going on. The retired employee is doing the same work as before they retired, and nobody is being transferred, promoted, or hired into that job as a replacement.

8.   D. Linking training and development activities to the new strategic plan is the first step to ensuring that activities and resources are aligned with the organization’s new initiatives.

9.   B. Although all those skills listed are important to the profession, being a masterful change agent is most important because change agents serve as a catalyst in helping others work through and accept change, along with implementing processes and programs that align with the change.

10.   C. Only if HR is willing to contribute to strategic planning and implementation and offer accountability for results will HR professionals be allowed to remain at the executive table.

11.   C. Working on a team with representatives from many departments can take some time to get used to. There is a lag time between implementation and results simply because employees need time to get acquainted with the new working structure.

12.   B. Liabilities such as lawsuits and discrimination complaints can pose future drains on budget and cash flow. The other party will want to understand what risks might exist as a result of these types of liabilities.

13.   C. In the absence of contracts, federal (and many state) laws default to “at will” status. It does not require a written notification to employees, but that is always recommended.

14.   B. The Uniform Guidelines on Employee Selection Procedures and Age Discrimination in Employment Act (ADEA) requires analysis of the impact of selection decisions in downsizing.

15.   C. Criminal behavior should be reported to the police. In the eyes of most employers, theft/embezzlement is cause for immediate dismissal.

16.   A. Negotiation is the avenue to lifting the boycott.

17.   D. Asking the union president to control the steward’s behavior is likely to be the most effective approach. Since you can’t discipline the employee for union activities, the president is the person who can help the steward understand the advantages of civil behavior.

18.   B. Transitioning into the new century, HR professionals will find themselves involved more with strategic planning in an administrative role and operational role.

19.   C. The three types of strategic differentiation are product, relationship, and price.

20.   C. Security, legal compliance, and privacy need to be addressed in policies about employee’s using their personal electronic devices at work in order to protect both the organization and the employee’s right to privacy.

21.   C. HR analysis includes a thorough review of the current systems and processes in place to identify gaps that may exist with current systems/processes and the future system needs. Addressing these gaps aligns with the basis of HR strategy.

22.   D. The HR function has a pulse on the current workforce and outside influences on the workforce, which is why it adds value to the organization’s strategic planning.

23.   C. The deliverables, or outcomes, for which HR is responsible for producing is what David Ulrich suggests should be measured for HR’s true effectiveness.

24.   C. An HR audit is a comprehensive evaluation of HR’s policies and procedures that identify gaps in performance and outcomes.

25.   A. A balanced scorecard is a performance metric used to identify and improve internal functions effectiveness in an organization.