5
Organizing Human Resources
Learning Objectives
By the end of this chapter, you should be able to:
• Identify the human resource function of management as a critical component of business strategy.
• Identify the key stages of the human resource cycle.
• Define each element of the human resource cycle as it reflects strategy implementation.
• Assess the appropriateness of a staffing plan for a particular business.
• Cite recent legislation affecting the management of human resources.
As discussed in Chapter 4, organizing is the managerial function concerned with arranging the resources of a business. That chapter described how managers create the framework or structure within which plans can be implemented. Once the structure is in place, individual tasks need to be determined and jobs filled.
A key resource of any organization is its people. People doing particular jobs are necessary in order for plans and objectives to be realized. The people of the organization are called its human resources. Human resources are distinct from material or financial resources, and they are a critical component of the business’s portfolio of resources. The people who act to implement the business’s strategy can make the difference between success and failure.
Human resource management is the process of deciding how to allocate this most precious resource. The management of human resources is part of general management and must fit a company’s business and its long-term objectives (Beer, Spector, et al. 1985).
THE SIGNIFICANCE OF HUMAN RESOURCE MANAGEMENT
Management can be defined as getting things done through other people (see Chapter 1). Although much of the success of management depends upon successful planning (as described in Chapter 3), the plans must be implemented. Implementation requires bringing appropriate resources to the situation and using them effectively.
All managers are human resource managers, as they must decide how to fill existing job openings; where to recruit for these jobs; how to monitor the performance of people reporting to them; and when and whom to train, promote, transfer, or discharge. In order to make these decisions, managers must plan, organize, lead, and control the people who work for them. This is known as human resource management.
The human resource functions of management have often been performed without consideration of overall business objectives. Traditionally, personnel offices took care of most staffing issues, training departments handled training needs, while line managers did performance evaluations and job descriptions. These functions frequently evolved as reactive measures rather than as proactive responses to identified plans and needs. As reactions, these important activities had no necessary connection to the overall business objectives.
In addition, while marketing, operations, finance, and accounting have been considered key functional areas, human resources have been assumed to occupy a cross-functional position (because human resources are necessary for all the functions of an organization). As such, positions in human resource management have tended to evolve as secondary staff positions. These positions therefore have not been included in a firm’s basic planning, which would have helped to connect a company’s human resource practices to its overall objectives.
The adoption of total quality management has resulted in human resource decisions being made by line personnel rather than staff personnel. Increasingly, line managers are becoming aware of the importance of their people and the need to develop their own skill at human resource management. As a result, the human resource function has been elevated to a key functional area and has been responsible for the implementation of total quality management as a strategy to change an organization’s culture.
STAFFING
The staffing function of human resource management involves finding the right people to do the required tasks. Good people can make even poor plans succeed. A manager’s success rests in large part on his or her ability to find and manage these people, and this requires planning, organizing, leading, and controlling the people of the department, unit, or work group. Managers must plan how many and what type of people are needed to do the job, and they must organize the tasks these people will do. They must focus activities to see that tasks are accomplished efficiently and correctly. They must control the energy and effort of subordinates so as to achieve the objectives of the organization.
The questions to ask in staffing are twofold: What resources—that is, what type and how many—do you need? and Where are you going to get them?
The Staffing Plan
The staffing plan for the organization is an operational strategy, and it has implications for both the long- and the short-term goals of the organization. An effective staffing plan is consistent with the overall business strategy and is internally consistent in each step of the human resource cycle.
Since human resources are key ingredients in a business plan, the link between human resource planning and business strategy is an important one. If the two complement each other, business success is more likely than if they work in opposition. For example, if a company is following cost leadership as a business strategy, keeping costs at a minimum will be very important. But if the human resource strategy of that company involves high-cost elements (such as high salaries, high training and development costs, high benefits, high recruitment costs, and a no-layoff policy), the company may find its staffing cost base out of line relative to its competitors and its own plan.
Contrast the operation of human resource management in a fast-food chain and an elegant gourmet restaurant. The fast-food chain’s business goals may be to profit by low cost and high volume. The business goals of the gourmet establishment, on the other hand, may be to profit by high quality, low volume, and high prices. What are the human resource implications for each of these businesses?
A fast-food chain does not pay high wages. Efficiency and high productivity are the key. Tasks are simple and do not require specialized knowledge. Management recruits across a wide spectrum of job seekers—this frequently means young, inexperienced workers or older, retired workers on a part-time basis at a minimum wage. Training is minimal and usually occurs on the job. Unfortunately, a high degree of employee turnover frequently results from this approach to staffing.
The gourmet establishment, on the other hand, is more likely to select its workers carefully. It looks for people who will be dedicated to the business, who know how to explain unusual menu items, and who know what kind of service is expected. It spends more time and financial resources training its people to understand the menu and to serve correctly. This human resource strategy is more likely to be directed toward hiring and keeping personnel (decreasing turnover), since customers frequently expect a consistent level of service. This type of business will probably be more willing to commit more of its organizational resources to support its human resources.
THE HUMAN RESOURCE CYCLE
The human resource cycle, as illustrated in Exhibit 5–1, consists of seven elements that represent key decision points in effective human resource management. The exhibit shows how human resource planning should follow from business strategy and objectives. Once the planning process has been completed and the operating plan for human resources has been set, the plans must be implemented. The seven-stage cycle illustrates the desired sequence of the decision stages. Each stage represents a managerial action and decision point. If, at the point of selection, someone is hired, the process moves on to the training stage. Similarly, after a career assessment has been made, the cycle may return to training or go on to analyze the job once again.
xhibit 5–1
The seven-stage cycle of human resource management divides into two subcycles. The first subcycle is the hiring cycle; the second is the evaluation cycle. At the end of each subcycle, the process may either progress to the next subcycle or repeat itself.
By following the human resource cycle, we see how each stage in the cycle operates individually and how each is connected to the stage preceding it. Taken together, these seven stages make up a company’s human resource strategy.
Job Analysis
The first stage in the human resource cycle is job analysis. Job analysis provides the basis for decisions about who will be needed in which positions to implement the strategic plan of the business. Job analysis asks the basic question, What are the essential tasks in this business? The analysis of job needs relates directly to decisions that have been made about the business’s strategic objectives and how the organization intends to reach these objectives. In other words, the question is, What positions are essential, and how many will be needed?
The first step in determining present and future job needs is to examine the business’s current objectives and structure. This analysis should uncover any questionable or unsatisfactory arrangements within the structure, like positions that were created out of expediency, overlapping areas of authority, or jobs with duties that are not clearly defined. In addition, the analysis of the organization should go beyond the present structure. Management should try to project an ideal organization, which takes into account the business’s future needs based on the business plan. This projected organization should reflect possible realignment of duties. It might be well to ask whether a different form of organization would be more effective in the future. If, for example, the firm were to change from a functional to a market orientation at some time, this could indicate a need for a different kind of organization and job structure.
Work Force Planning
Once the organizational issues of job analysis have been addressed, managers need to be specific about particular needs. How many individuals with which particular skills will be required to do the tasks necessary to complete the job on time? For a complex task, this can be difficult to determine. The work force plan reflects individual managers’ best estimates of the particular number and type of people required. Each manager submits this plan to upper management to obtain the approval for the funding necessary for these positions.
Compensation
Compensation refers to the total financial payment package that an organization provides to its employees. In addition to wages and salaries, compensation includes: the benefits package of health insurance, life insurance, and so forth; and perquisites (“perks”), such as automobiles, membership in health clubs, and bonuses or incentives. Bonuses are one time, oft-repeated payments usually made to selected individuals for achieving operating results above and beyond preestablished levels—for example, sales in excess of annual objectives or profits in excess of previous experience. Incentives are automatic payments made to both management and workers for productivity improvement. The widely known Scanlon, Rowan, and Halsey plans are institution-wide means of sharing excess production according to preestablished criteria. For individuals, there is the straight piece-rate plan based on the idea that workers are paid directly for production, X dollars per unit. To alleviate the wide fluctuations in wages that may result, some piece-rate plans have a minimum or floor wage rate per hour (e.g., the Manchester plan). A minimum wage is guaranteed regardless of output, but the opportunity to earn more is clearly possible. Obviously, these compensation schemes have an effect on employee motivation (discussed in the next chapter).
Job Description
Once the job needs of the business have been assessed and the type of positions needed have been identified, the actual duties and responsibilities of each position must be detailed in a job description.
While job analysis is concerned with organizing human resources on a large scale, job descriptions deal with organizing on an individual level. At the job analysis stage, the manager decides how many people are needed to perform which general jobs. Decisions may involve such things as whether to hire a secretary and an administrative assistant or just a secretary. At the job description stage, the manager is concerned with organizing the daily and weekly time of each employee.
A job description includes a detailed breakdown of all activities expected of an individual holding the particular position. Frequently, a percentage of time expected to be devoted to each specific task is included. In addition, the job description states the qualifications a person must have for the job. This may include past experience as well as the skills and knowledge necessary to perform the job.
The job description is an important document for three reasons:
1. By establishing the basic performance requirements of the job, it sets the parameters of the qualifications necessary for an individual seeking the job.
2. By specifying what duties are required in the particular job, the job description can help to clarify expectations about acceptable performance.
3. By describing the job in specific detail, the job description sets the standard for minimal performance on the job.
In this way, the job description can be used as a base measure for performance assessment.
The development of job descriptions is an important early stage in the human resource cycle because it has implications for each of the following stages. An accurate job description is critical for successful recruitment and selection. Furthermore, job descriptions provide the basis for training and developing employees and are essential in conducting performance appraisals.
Writing a job description is a useful exercise both for managers and for subordinates. Writing down the duties and responsibilities of the job helps to clarify what activities are actually performed and which activities are essential in order for the business to meet its objectives. Writing job descriptions is often done as part of a human resource assessment to determine if the jobs that are being performed are the best way for the organization to meet overall objectives. Additionally, periodic updating of job descriptions can help both managers and employees clarify and keep abreast of how jobs may have changed.
Recruitment
At this stage in the human resource cycle, managers know what positions must be filled, and they have a description of the activities required for each position. The question of who is necessary to get the job done has been partially answered. Now the question becomes where to get these people. This is the recruitment stage.
The Labor Market
The labor market is a term used to refer to all people who are able to work. These people have various types of skills and represent many levels of competence. In times of low unemployment, the competition among businesses for qualified and reliable employees is intense. The skills available in the labor market also change in response to demand. The 1980s saw many changes in the skills needed by businesses; the labor market has been slower to respond. This increases the competition for qualified help, making a good recruitment plan—one that identifies the appropriate sources for the kind of skills needed by the business—even more important.
Source of Candidates
In the search for talent, the organization itself is a prime source. Candidates are also recruited from other organizations. Many organizations have a stated policy that, whenever possible, promotions will be made from within the company. Such a policy boosts morale and fosters a commitment from the firm’s employees, since they know that they have the opportunity to advance. There are some dangers, however, in adhering strictly to promotion from within. For one, it can lead to “inbreeding”—filling positions with people who have been trained by, and imitate, the superiors who do the selecting. Such inbreeding is particularly harmful when originality or new ideas are needed in a position. It also may foster mediocre performance among employees who know that they have a monopoly on promotions.
On the other hand, the policy of competing for vacancies removes some of the negative aspects of relying exclusively on present employees. Under open competition, vacant positions are available to the best-qualified individuals, whether within or outside of the firm. Such a policy obviates inbreeding and promotes competition among current employees. This policy, however, does place a special obligation on managers who make the ultimate selection. They must be sure that they have developed a list of qualified individuals from among present employees. If these people feel that they are being given a fair chance for the promotion, they are less likely to resent the hiring of an outsider. Even under open competition, current employees enjoy advantages; they are familiar with the firm and its policies, and management knows their history of performance.
Some business organizations rely almost exclusively on recruiting talent developed by other firms. By offering attractive salaries and advancement opportunities, they are able to attract experienced individuals who can fill positions at all levels in the organization. Executive recruiting firms that specialize in middle- and upper-level management positions function as intermediaries between the individual and the firm. For their services of recruiting, investigating, and recommending an individual, such firms receive about 25 percent of the new hire’s first-year salary.
Although some people question the ethics of recruiting individuals from other companies, either directly or through a third party, this practice is nonetheless common. Many firms have the reputation of providing excellent training and experience for their personnel and must be prepared to lose some of them. Others encourage their employees to participate in academic or other development programs through tuition refunds. However, if management has not anticipated providing advancement opportunities when the person completes training, that individual may well seek advancement outside the firm. (This is an example of inconsistency in human resource strategy. Overemphasis on training may hurt long-term strategic goals if there are insufficient opportunities for career advancement.)
Many firms use the annual college recruitment program as a source of talent. Almost all institutions of higher learning have placement offices with facilities for interviewing and possible testing. A college recruitment program allows a company to hire individuals at salaries lower than what would be paid if applicants from other employers were hired. However, college recruitment programs tend to be limited to larger employers, who can afford the costs of having teams of interviewers and the travel involved in having promising students visit a plant or the home office for a second interview.
A continuing question for management is, What kind of individual should we solicit—the well-rounded liberal arts graduate, or the specially trained individual (who supposedly can become productive more quickly)? Academics continually hear top executives address commencement exercises with a call for the broadly educated individual, then their recruiters move on campus the following year seeking accounting, finance, and information systems majors.
As a part of the staffing plan, recruitment activities should answer the question, Where will we get the people to do the work? The recruiting plan must logically follow and be consistent with the job analysis and job description phases of human resource management. For example, suppose a busy financial consulting firm has conducted a job analysis that indicated a need for an administrative support person to help relieve bottlenecks caused by routing paperwork through a busy executive’s office. A position description was written that described the kinds of confidential portfolio information the new recruit would be expected to assign to account managers and consultants. The recruitment plan must outline the places to look for this individual that are likely to result in the largest number of potential recruits. Assume further that the job analysis indicates that this is not a professional position, but rather an administrative support position with not much possibility for advancement, and that the job description indicates literacy and an ability to analyze the needs and capabilities of clients and consultants as requirements. A logical first step in recruiting would be to seek an internal candidate who is familiar with the business, experienced with the kind of portfolio data and the individuals involved, and interested in a staff promotion.
Frequent recruiting problems arise when the recruitment plan is not consistent with the job analysis and the job description. For example, if the consulting firm described above turned first to graduate programs in universities for candidates, it would probably find a large number of overqualified high achievers who would be dissatisfied quickly with the lack of professional advancement and the fundamentally administrative nature of the work involved in this job.
Realistic Job Preview
Another way for organizations to improve staffing effectiveness is to provide applicants with a realistic job preview. A realistic job preview (RJP) informs applicants about all aspects of the job, including both the desirable and undesirable facets of the position. This, coupled with a tour of the work site and a discussion of health and safety considerations, results in fewer surprises for the new hire. Proponents and researchers attribute improved job satisfaction, lower turnover, higher-quality interpersonal relations, and realistic job expectations to the use of RJPs.
Like other recruitment and selection techniques, RJPs must be tailored to both the needs of the organization and the requirements of the position and should include a balanced presentation of positive and negative job characteristics and its environment.
Selection
The recruitment strategy provides a pool of potential candidates for the job(s) available. This pool must be narrowed down to the individual who will be chosen to fill the job—the selection decision. Selection decisions are more specific than previous decisions in the cycle, but essentially the same questions dominate: What must be done? Who can do it? Do any of the candidates fit?
Selection Criteria
The selection procedure must be based on criteria known as bona fide occupational qualifications (BFOQ) that are clearly related to a person’s effectiveness on the job. In other words, it is legitimate and legal to use tests of various kinds in sorting through the pool of applicants for a particular job. However, these tests must be shown to provide hard evidence of potential for performance on the job. If the ability to add columns of numbers is a requirement and can be shown to be related to job performance, it is acceptable to administer an addition test to rank and select candidates for the job. For example, a physical endurance test would be unacceptable if the job required sitting at a desk doing bookkeeping tasks. Psychological tests may be used in the selection procedure if they can be validated and shown to be reliable.
Interviewing
The interview is a critical component of the selection process. After the résumé has been reviewed and other criteria such as test results examined, it is standard practice to meet with the applicant face to face for an interview. At the interview, the applicant should be examined for responses to situations he or she is likely to face on the job. The interviewer should focus on the assessment of the applicant’s competence relative to the position to be filled. All too frequently, assessment of the person-organization fit, although important, receives undue attention. Questioning should be thorough, but should not overstep the bounds of privacy and regulatory restrictions. Again, questions must have direct bearing on the job to be performed.
Completion of the Hiring Subcycle
After the selection has been made, the business has a new employee on board and the hiring subcycle is complete. Often all the steps involved in hiring are often performed by human resource departments. In these cases, the effectiveness of the decision depends upon how clearly the human resource department understands the needs of the business and the individual recruits. Human resource departments rarely initiate stages in the other subcycle—the evaluation process—because these stages usually require the specialized knowledge and experience of a direct supervisor.
As mentioned earlier, the human resource function is only recently being recognized as important for the strategic management of a company. The stages of the human resource cycle are often conducted separately from each other. They may be performed by different departments, and some stages may be omitted altogether in some organizations.
The model presented as the human resource cycle in Exhibit 5–1 shows the ideal sequencing of the activities involved in organizing human resources. Effective organization of human resources requires linking these stages. Most businesses have recognized the significance of evaluation and have provided for at least some of the activities in the evaluation subcycle to occur. Regular performance appraisals are usually done, and most businesses have instituted some regular mechanism for this activity. However, the organization may not provide training, or the recruitment and selection process may be done largely by the human resource department.
Training and Development of New Hires
The training stage of the human resource cycle is actually done in two steps. The first occurs after the selection decision has been made. This is training and orientation, when the new recruit is initially taught the job. The second occurs after the career assessment stage and includes developmental training
No matter how skilled and well trained a new recruit may be for a particular job, some orientation and training are necessary after the decision to hire has been made. If the new employee has been recruited from a competing firm, he or she also must be trained. No two business organizations are the same. If the strategic plan for the firm is to work, the new employee will need to be taught the organization’s mission, goals, and culture. At the first stage of job training, the new employee may receive job-centered training or coaching.
Job-centered Training
The fundamental idea behind job-centered training is to allow the individual to gain on-the-job experience. The value of this experiential approach varies with the kind of situation within which the individual is placed. If, for example, the organization is decentralized and the position carries decision-making authority, the possibility of maximizing development is much greater. On the other hand, if the authority associated with the position is limited—that is, if a higher position makes the significant decisions—the value of such job-centered training is questionable. The individual will probably learn to perform in the job as the superiors dictate, but will not develop his or her potential.
Coaching
When job performance is accompanied by some formal guidance from a supervisor, the training method is known as coaching. This is one of the most common methods of on-the-job development. It is based on the belief that for individuals to derive the greatest benefit from their work, they need to receive the guidance of those with greater knowledge and experience. Through coaching, individuals are helped in carrying out their duties by other, more experienced workers. Most of us know the term coaching as it is used in athletics; its use in job training is much the same. It involves observing performance and providing expert guidance on how to improve performance.
A key element in coaching is a superior’s confidence in the subordinate. The superior should make the subordinate feel that the work assignment can be accomplished, and to do this the superior must also have self-confidence. He or she delegates authority wisely, has the ability and the patience to teach, and takes pride in developing subordinates. If the superior feels threatened by coaching—that is, if training a subordinate is seen as training the superior’s replacement—the process will not work.
Coaching is a part of every manager’s job, whether or not it is specifically stated, for managers are required to provide guidance and assistance to their subordinates. Too often, however, this requirement is lost in the day-to-day urgency of getting a particular job done. Nevertheless, the duty remains.
Training and development are also important as part of career assessment. We will return to a discussion of training and development as part of the evaluation process after discussing performance appraisal and career assessment.
Performance Appraisal
Performance appraisal is the feedback process through which individual workers are shown how their performance fits the company’s goals and whether it measures up to company standards. Through performance appraisal, the company, too, learns of the individuals’ contributions to business results.
Performance appraisal programs exist in all organizations, although they differ in degree of formality and in method. Some firms have periodic evaluations, using a system such as a graphic scale on which an individual might be rated from 1 to 5 on a number of job factors, such as knowledge and quality of work. Firms that do not have an appraisal system are being unrealistic; all work should be continually evaluated to maintain high standards of performance and to make continuous improvements possible. Regardless of the formality and the method, effective performance appraisal is important. Evaluation programs help the organization to identify those individuals with promotion potential. They may also highlight the development needs of individuals. The person evaluated thus becomes aware of how to improve performance. The firm likewise can learn how it can help in this development. Without periodic performance appraisals, a company will not be able to understand the potential or the training needs of its employees. Employee productivity and quality of work have a direct effect on business results. Thus, performance appraisal is an essential step to keep the business on target in meeting its strategic objectives.
Many firms have established a formal performance appraisal system in order to be sure that managers maintain regular communication with subordinates. Effective performance appraisals entail frank discussions of company goals and employee strengths and weaknesses. A frequent shortcoming of formal performance appraisals is that they become meaningless games that have little bearing on actual performance. Ideally, performance appraisals occur continuously. Subordinates should constantly perform self-appraisal, and managers should provide feedback while constantly interpreting company goals for their subordinates.
Career Assessment
The career assessment stage of the human resource cycle has a direct effect on the future of individual employees as well as on the future of the organization. The data generated from the performance appraisal provide evidence to assist in the determination of future career directions for individual employees. Is an individual a candidate for promotion? Does the individual have the skills and career inclinations that could be used better in a different part of the business? If so, perhaps a recommendation for a transfer should be made. Is the individual unable to perform to the standards specified in the job description? In this case, termination may have to be considered. Alternatively, perhaps the performance record shows potential such that the individual should be maintained and developed in the current position.
Career assessment decisions are critical for both the business and the individual employee. An error at this point can mean serious misuse of human resources and result in costs to the business that may be unrecoverable. Think of the implications of promoting someone too soon or to the wrong department, not promoting a potential star and losing that person to a competitor, or maintaining a substandard worker too long.
Termination
One of the most sensitive and difficult decisions a manager has to make is whether to terminate the employment of a particular individual. It is never easy to be the bearer of bad news, and a termination decision is almost always bad news.
A termination decision should not come as a surprise to an employee. If the manager has followed the proper sequence of the human resource cycle, the employee will have been hired with full knowledge of the performance requirements of the job. He or she will have received orientation and training. He or she will have had some feedback on performance in a performance appraisal. The performance appraisal is crucial, for if a manager does not provide an adequate and frank performance appraisal and then terminates an employee, that manager may later face a suit for discrimination or unfair discharge.
Most large organizations, especially where there is a labor union, have established termination procedures with the human resource department overseeing implementation. These procedures require supervision to follow steps designed to deal with employees fairly, openly, and within legal constraints. Employee rights are of prime importance. These procedures are designed to prevent precipitous acts by supervisors. They involve a series of steps over time which give both the organization and the employee an opportunity to address the causes of unacceptable performance. Less sophisticated organizations, however, are likely to have greater exposure to legal action because the termination process is not as well defined, which leaves greater room for error. Termination for cause is a complex issue, and in today’s environment the burden of proof is on management. The best defense is a good offense. It can be in the form of a probationary period wherein sound judgments about the permanency of the relationship can be made by both parties.
Training and Development of Existing Employees
Managers should try to match the development needs of individuals with the business needs for a particular position. A number of different training and development techniques are available to enhance the effectiveness and productivity of employees. Skill-based training is available for those individuals who have potential but need technical improvement; management development training programs are available for those with managerial potential.
ROTATION AND LATERAL ASSIGNMENTS 
Another on-the-job development technique is job rotation, which is aimed at broadening the individual through assignments to jobs in many areas. Usually, these assignments are for short periods in positions at the same organizational level. Job rotation is normally used with young, relatively inexperienced employees. One potential weakness of job rotation is the disruptive effect of periodic transfers of workers. In addition, individuals may not put forth their best efforts in temporary assignments. This may be overcome by assigning specific duties as part of each assignment.
Lateral movement may also be used to broaden the skills and experience of managers. A position in the industrial engineering department, for example, may be used to broaden the experience of a line manager.
STAFF MEETINGS Another method of developing workers is by encouraging their participation in staff meetings so they may become exposed to activities and problems occurring outside their specific area. Moreover, they may be given a chance to make presentations at staff meetings, requiring the ability to organize information and to deliver it in a clear, concise manner. Ideas can be evaluated and possibly improved by the comments and suggestions of the group members. Of course, the value of staff meetings to individual development depends on how well such meetings are planned and conducted.
ROLE PLAYING Role playing is directed toward developing human relations skills—that is, skills in dealing with people. This technique, as its name implies, calls for two or more people to assume the attitudes and behavior of individuals involved in a problem. For example, participants may play a manager and a subordinate reviewing the subordinate’s unsatisfactory performance. They would place themselves in the assigned roles and interact before other participants, who would then comment on the behavior. Role playing allows individuals to learn how certain behavior affects others. It should also enable the participants to improve their understanding of the problems of others and how to deal with these problems.
SPECIAL TRAINING PROGRAMS Training may also be conducted by various educational and professional institutions. Many universities and colleges offer courses, conferences, and formal programs designed to train employees. Similar offerings are also available through trade or professional associations, such as the American Management Association. These programs are usually designed to develop specific skills or to increase knowledge in a certain subject. Both the length of training time and the method of instruction vary widely, depending on the program. Some middle- and upper-level management programs can last several months.
The value of such training depends on many factors. Such programs can teach principles and techniques that can be applied to one’s own firm. Also, interacting with others can be a valuable source of ideas and new approaches to problems.
Following the career assessment stage, the human resource cycle begins again. An organization is always changing, never static; jobs and those doing the jobs must be evaluated continually to make certain that existing positions are meeting current needs and that future needs are being planned for.
EFFECTIVE HUMAN RESOURCE MANAGEMENT
The quality of a firm’s human resource management has often suffered due to fragmentation. As mentioned earlier, different stages of the human resource cycle are often delegated to different branches of the business. For example, the personnel department may be in charge of recruitment, while the training department is responsible for training and development. Once activities relating to recruitment and training are separated and delegated to different departments, there is a tendency for each department to act as a self-contained unit. The coordination necessary for effective management becomes difficult. The personnel department may engage in recruitment with a different set of objectives than those the training department is training for. The results may be extra training costs, less effective training programs, and employee dissatisfaction.
A key to successful human resource management is to actively manage the connections between the stages of the human resource cycle. Inconsistencies can result in costly practices, such as “fat” in staff (people with not enough to do), duplication of jobs, or overly expensive recruitment practices.
If a company begins to show signs of trouble, careful analysis of the human resource cycle will often show discrepancies and inconsistencies in the human resource strategy. A company that had difficulty finding qualified individuals to do the required job may be recruiting in the wrong places. For instance, suppose that a consulting company has determined that it needs a word processing specialist to troubleshoot software problems and provide training for consultants. The firm’s personnel recruitment specialist is sent to the local liberal arts college to screen potential candidates. Unfortunately, this particular college has a weak computer science department and graduates only five to six computer majors a year. The consulting company is unable to fill the position. Why? They are looking in the wrong place. They are pursuing a recruitment plan that is inconsistent with their job analysis.
When the links between elements of the human resource cycle are maintained and coordinated, the human resource system can work to further business objectives. Organizations that manage the cycle well will be able to adapt more quickly to changing external factors. A coordinated human resource system enables a business to identify staffing needs quickly and implement a staffing plan that will meet those needs efficiently.
IMPLICATIONS FOR MANAGERS
The effective manager recognizes the strategic role the human resources of the organization play in achieving organizational goals and objectives, but the ultimate responsibility for a productive work force rests with management. Commencing with the hiring cycle and concluding with the evaluation cycle, line management must be directly and intimately involved in identifying, selecting, training, and evaluating individuals and groups in the work force to ensure a fit with the cultural needs of the organization.
Human resource planning is every bit as important to business strategy formulation and implementation as the functions of marketing, finance and production. Steps must be taken to ensure adequate and appropriate consideration is given to human resource needs.
The increasingly regulated environment of business has created the need for special skills and knowledge in the area of human resource management, adding further to its importance to the organization and to the individual manager. Human resource management is being placed higher in the organization.
As stated at the beginning of this chapter, all managers are human resource managers. The best managers recognize this role and are able to ensure that the human resource cycle is completed. In addition, managers are fundamentally in the middle—they must manage individual employees’ needs and abilities and, at the same time, implement the business’s strategic goals and objectives. Managers must interpret business strategy in a very real way. This involves making a commitment of financial resources to individuals to whom duties are delegated, for the performance of these individuals determines the success or failure of the business.
The history of labor relations in the United States has been filled with disputes between labor and management about the appropriate balance between the interests of the firm and the interests of employees. Many of these disputes have been resolved in the courts and through legislative action. Managers need to be aware of the legal rights and restrictions that apply to their actions and relations with employees. Two areas of concern are health and safety and equal opportunity.
Health and Safety
Managers have become increasingly aware that a concern with the health and safety of employees is in the company’s best interest. The Occupational Safety and Health Act (OSHA) passed in 1970 was designed to ensure, so far as possible, every American worker safe and healthful working conditions. Many lawsuits have been brought against firms that have neglected the health and safety of their workers, some of which cost the companies involved millions of dollars in damages. In addition to being responsible for a healthy working environment, companies are recognizing the cost benefits of a healthy work force. Lower absenteeism due to a healthier work force improves overall company performance. In response to these issues, some companies offer wellness programs to keep their employees healthy and on the job.
Equal Employment Opportunity (EEO)
In 1964, the Civil Rights Act, Title VII, made it illegal to discriminate on the basis of race, color, religion, sex, or national origin. In 1972, amendments were made, and Title VII was renamed the Equal Employment Opportunity Act. The Pregnancy Discrimination Act of 1978 broadened the meaning of sex discrimination to include pregnancy, childbirth, or related medical conditions. Management practices were further constrained with the passage of the Americans With Disabilities Act of 1990. This act protects persons with physical or mental disabilities, the chronically ill, or anyone being regarded as having such as impairment. Disputes between employers and employees over discriminatory practices in the workplace have been brought through the courts. The courts have often found in favor of the plaintiffs, sometimes awarding substantial damages. As a result, the impact of EEO legislation has been felt in hiring practices, seniority systems, compensation systems, and behavior in the workplace. Managers need to be aware that they represent their companies and that their companies are liable for their acts of discrimination. As it is managers who make the decisions involved in the human resource cycle, so it is managers who must be sure that they are not discriminating in any way.
Individuals seek jobs that will help them to develop, fulfill their needs, and provide satisfaction. Managers must match these individuals’ needs with overall business objectives. In making this match, they must proceed through the stages of the human resource cycle in ways that do not infringe upon individual rights, and they must make decisions for their companies that enable them to reach their business goals.
In Chapter 6, as part of our discussion of the leadership function of management, we elaborate upon the manager’s position in the middle, mediating between individual needs and organizational goals.
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