CHAPTER 6 - STAFFING AND HUMAN RESOURCE …



CHAPTER 6 - MANAGING HUMAN RESOURCES

LEARNING OUTCOMES

After reading this chapter students should be able to:

1. Describe the key components of the HRM process and what influences it.

2. Discuss the tasks associated with identifying and selecting competent employees.

3. Explain how employees are provided with needed skills and knowledge.

4. Describe strategies for retaining competent, high-performing employees.

5. Discuss contemporary issues in managing human resources.

|Opening Vignette—Shedding Workers and Tears |

|Summary |

|One of the hardest things that a manager may have to do is telling an employee that he or she is being laid off. And some 3 million Americans |

|who have been laid off since the economic recession began in early 2008 have been given that news by someone. |

|In smaller businesses, it’s especially difficult to do because it’s often more personal and employees are more like family. Managers may fear |

|that employees will get highly emotional or angry, and such reactions are more likely when workers have no notice that layoffs are coming. |

|American managers and international managers face the emotional challenge of laying off employees. Studies of managers involved with layoffs |

|have shown that those who must tell people they’ve been laid off also experience stress, poor sleep, and even health problems. In one study, |

|managers called the layoffs “gut-wrenching” and “devastating.” And these problems often can linger. In that same study, those managers had |

|mostly regained their emotional health up to six years after the layoffs, but were still more likely than other managers to have |

|stress-related health problems. Even though, “It gets a little easier with experience,” managers soon learned how to tell people in the least |

|hurtful way and to emphasize that it was the job that was being eliminated. |

|Teaching Notes: |

|As a manager, why would lay-offs be so difficult? |

|What would be your reaction as an employee; as a manager? |

|Why would this skill set be important to master? |

WHAT IS THE HUMAN RESOURCES MANAGEMENT PROCESS AND WHAT INFLUENCES IT?

1 Introduction

1. The quality of an organization is determined by the quality of people it employs.

2. Staffing and human resources management decisions and methods are critical to ensuring that the organization hires and keeps the right personnel.

a) In many organizations, specialists do human resources management (HRM) activities.

b) In other cases, HRM activities may be outsourced to companies like HR Tech.

c) Many small business managers must do their own hiring without the assistance of HRM specialists.

d) Managers in larger organizations are frequently involved in HRM activities (e.g., recruiting candidates, reviewing application forms, interviewing applicants, inducting new employees, making decisions about employee training, providing career advice to employees, evaluating employees’ performance, etc.).

3. Exhibit 6-1 introduces the key components of the human resources management process.

a) It represents eight activities, or steps, that if properly executed, will staff an organization with competent, high-performing employees.

4. The first three steps represent employment planning, the addition of staff through recruitment and the reduction in staff through downsizing, and selection.

a) Executed properly, these steps lead to the identification and selection of competent employees.

b) They are important to assist organizations in achieving their strategic directions.

5. Orientation and training and development assist people in adaptation to the organization and ensure that their job skills and knowledge are kept current.

6. Finally, the HRM process helps to identify performance goals, correct performance problems if necessary, and help employees sustain a high level of performance (e.g., performance appraisal, compensation and benefits, and safety and health).

7. The external environment influences the entire employment process.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

THE LEGAL ENVIRONMENT OF HRM

1 What are the Primary U.S. Laws Affecting HRM?

8. See Exhibit 6-2 for examples.

9. Not many major federal employment discrimination laws were passed in the past decade.

10. Many state laws have been passed during the past decade, which add to the provisions of federal laws.

a) Example, in many states, it is illegal to discriminate against an individual based on sexual orientation.

11. Today’s employers must ensure that equal employment opportunities exist for job applicants and current employees.

a) Example, decisions regarding who will be hired or which employees will be chosen for a management training program must be made without regard to race, sex, religion, age, color, national origin, or disability.

b) Exceptions can occur only when special circumstances exist.

c) Example, a community fire department can deny employment to a firefighter applicant who is confined to a wheelchair.

1) But if that same individual is applying for a desk job, such as fire department dispatcher, the disability cannot be used as a reason to deny employment.

d) Example, employment laws protect most employees whose religious beliefs require a specific style of dress (robes, long shirts, long hair, etc.).

1) But if the specific style of dress may be hazardous or unsafe in the work setting (e.g., when operating machinery), a company could refuse to hire a person who would not adopt a safer dress code.

12. Balancing the “shoulds and should-nots” of complying with these laws often falls under the realm of affirmative action.

a) Affirmative action programs ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups.

13. American managers are not completely free to choose whom they hire, promote, or fire.

|From the Past to the Present |

|Hugo Munsterberg was a pioneer in the field of industrial psychology and is “generally credited with creating the field.” As an admirer of |

|Frederick W. Taylor and the scientific management movement, Munsterberg stated that “Taylor had introduced most valuable suggestions which the|

|industrial world cannot ignore.” Munsterberg stressed “the importance of efficiently using workers to achieve economic production.” His |

|research and work in Today, industrial-organizational psychology is defined as the scientific study of the workplace. |

|Industrial-organizational (I/O) psychologists use scientific principles and research-based designs to generate knowledge about workplace. |

|Check out the Society for Industrial and Organizational Psychology at (.) |

|What information is applicable to today's workplace? |

2 Are HRM Laws the Same Globally?

14. You need to know the laws and regulations that apply in your locale.

a) Canadian laws pertaining to HRM practices closely parallel those in the United States.

1) The Canadian Human Rights Act provides federal legislation that prohibits discrimination on the basis of race, religion, age, marital status, sex, physical or mental disability, or national origin.

2) There is more decentralization of lawmaking to the provincial level in Canada.

b) In Mexico employees are more likely to be unionized than in the United States.

1) Labor matters in Mexico are governed by the Mexican Federal Labor Law.

2) An employer has 28 days to evaluate a new employee’s work performance and then the employee has job security—termination is difficult and expensive.

3) Infractions of the Mexican Federal Labor Law are subject to severe penalties, including criminal action.

c) Australia’s discrimination laws were not enacted until the 1980s.

1) Generally apply to discrimination and affirmative action for women.

2) A significant proportion of the work force is unionized.

3) The Workplace Relations Bill, passed in 1997, gives employers greater flexibility to negotiate directly with employees on pay, hours, and benefits and simplifies federal regulation of labor-management relations.

d) HRM practices in Germany are similar to those in most Western European countries.

1) Legislation requires companies to practice representative participation.

2) Goal of representative participation is to put labor on a more equal footing with the interests of management and stockholders.

a) Work councils—groups of nominated or elected employees who must be consulted when management makes decisions involving personnel.

4 Board representatives—employees who sit on a company’s board of directors and represent the interest of the firm’s employees.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

HOW DO MANAGERS IDENTIFY AND SELECT COMPETENT EMPLOYEES?

1 What is Employment Planning?

15. Employment planning is the process by which management ensures that it has the right number and kinds of people in the right places at the right times, who are capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.

16. Employment planning translates the organizational mission and objectives into a personnel plan.

a) Assessing current and future human resources needs.

b) Developing a plan to meet those plans.

2 How Does an Organization Conduct an Employee Assessment?

17. Management begins by reviewing its current human resource status through a human resource inventory.

a) The input for this report is derived from forms completed by employees (e.g., name, education, training, prior employment, languages spoken, capabilities, specialized skills, etc.).

b) This inventory enables management to assess what talents and skills are currently available in the organization.

18. Another part of the current assessment is the job analysis.

a) Job analysis is more fundamental than an inventory and is a lengthy process, one in which work flows are analyzed and skills and behaviors that are necessary to perform jobs are identified.

b) Ultimately, the purpose of job analysis is to determine the kinds of skills, knowledge, and attitudes needed to successfully perform each job.

c) This information is then used to develop or revise job descriptions and job specifications.

19. A job description is a written statement of what a jobholder does, how it is done, and why.

a) It typically portrays job content, environment, and conditions of employment.

20. The job specification states the minimum qualifications that an incumbent must possess to perform a given job successfully.

a) It identifies the knowledge, skills, and attitudes needed to do the job effectively.

21. Both are important documents for recruiting and selecting.

a) The job description can be used to describe the job to potential candidates.

b) The job specification keeps the manager’s attention on the list of qualifications necessary for an incumbent to perform a job, and assist in determining whether candidates are qualified.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3 How Are Future Employee Needs Determined?

22. Future human resources needs are determined by the organization’s strategic direction.

23. Demand for human resources is a result of demand for the organization’s products or services.

24. Using estimated total revenue, management can attempt to establish the number and mix of human resources needed to reach that revenue.

a) When particular skills are necessary and in scarce supply, the availability of satisfactory human resources determines revenues.

b) Example, upscale chain of assisted-living retirement facilities where revenues are limited by ability to locate and hire a qualified nursing staff to fully meet the needs of the residents.

25. In most cases, the overall organizational goals and the resulting revenue forecast provide the major input determining the organization’s human resources requirements.

26. After assessing current capabilities and future needs, a program can then be developed that matches these estimates with forecasts of future labor supply.

4 How do Organizations Recruit Employees?

27. Once managers know their current staffing levels—whether they are understaffed or overstaffed—they can begin to do something about it.

28. To fill vacancies, they use recruitment—the process of locating, identifying, and attracting capable applicants.

29. If employment planning indicates a surplus, management will want to reduce the labor supply and initiate downsizing or layoff activities.

5 Where Does a Manager Recruit Applicants?

30. Candidates can be found by using several sources, including the World Wide Web.

a) See Exhibit 6-3.

31. The source that is used should reflect the local labor market, the type or level of position, and the size of the organization.

32. Are certain recruiting sources better than others?

a) Employee referrals generally produce the best candidates.

1) Applicants referred by current employees are prescreened by those employees.

2) Current employees often make referrals when they are reasonably confident that the referral won’t make them look bad.

b) Employee referrals may not increase the diversity and mix of employees.

33. How does a manager handle layoffs?

a) Downsizing has become a relevant means of meeting the demands of a dynamic environment.

34. What are downsizing options?

a) See Exhibit 6-4.

b) Regardless of the method chosen, employees may suffer.

6 How do Managers Select Job Candidates?

35. The selection process is a prediction exercise—it seeks to predict which applicants will be “successful” if hired.

36. Successful in this case means performing well on the criteria the organization uses to evaluate its employees.

37. Any selection decision can result in four possible outcomes. (See Exhibit 6-5.)

38. A decision is correct when:

a) the applicant was predicted to be successful (was accepted) and later proved to be successful on the job, or

b) the applicant was predicted to be unsuccessful (was rejected), and, if hired, would not have been able to do the job.

39. Problems occur, however, when we make reject errors or accept errors.

a) Reject errors occur when we reject candidates who, if hired, would have performed successfully on the job.

b) Reject errors can open the organization to charges of employment discrimination.

c) Accept errors occur when we accept those who subsequently perform poorly.

d) Accept errors cost the organization—training costs, costs generated or profits foregone because of the employee’s incompetence, the cost of severance, and subsequent costs of additional recruiting and selection screening.

40. Major thrust of any selection activity: reduce probability of making reject errors or accept errors while increasing the probability of making correct decisions.

41. What is reliability?

a) Reliability addresses whether a selection device measures the same characteristic consistently.

b) If a test is reliable, an individual’s score should remain fairly stable over time, assuming that the characteristics it is measuring are also stable.

c) No selection device can be effective if it is low in reliability.

d) To be effective predictors, selection devices must possess an acceptable level of consistency.

42. What is validity?

a) Any selection device that a manager uses where there is a proven relationship between the selection device used and some relevant measure.

b) The law prohibits management from using any selection device that cannot be shown to be directly related to successful job performance.

c) This constraint also applies to entrance tests. Management must be able to demonstrate that, once on the job, individuals with high scores on this test outperform individuals with low scores.

d) The burden is on management to verify that any selection device it uses to differentiate applicants is related to job performance.

|MANAGING DIVERSITY | Diversity and Discrimination |

|Data released by the Equal Employment Opportunity Commission in early 2009 stated that more people experienced workplace discrimination in |

|2008 than ever before. More than 95,400 job-bias claims were filed, an increase of 15 percent over the previous year. |

|All major categories of workplace discrimination saw increases although age and retaliation claims increased the most. Charges of age |

|discrimination jumped by 28.7 percent, while complaints about retaliation were up 22.6 percent. |

|What are the implications for HRM? |

|What HRM policies and practices should be in place? |

|What laws are applicable? |

7 How Effective Are Tests and Interviews as Selection Devices?

43. Managers can use a number of selection devices to reduce accept and reject errors.

44. The best-known devices include written and performance-simulation tests, and interviews.

45. How do written tests serve a useful purpose?

a) Typical written tests include tests of intelligence, aptitude, ability, and interest.

b) Written tests were widely used for twenty years after World War II.

c) They fell into disfavor in the late 1960s, frequently characterized as discriminatory.

d) But, since the late 1980s, written tests have made a comeback; many of them are Internet-based.

1) Managers have become increasingly aware that poor hiring decisions are costly and properly designed tests reduce their likelihood.

2) The cost of developing and validating written tests for a specific job has come down.

e) Tests of intellectual ability, spatial and mechanical ability, perceptual accuracy, and motor ability are moderately valid predictors for many semiskilled and unskilled operative jobs.

f) An enduring criticism of written tests is that intelligence and other tested characteristics can be somewhat removed from the actual performance of the job itself.

46. What are performance-simulation tests?

a) Determine if an applicant can do a job by having him/her do it.

b) Based on job analysis data and therefore are more job related than written tests.

c) Performance-simulation tests are made up of actual job behaviors rather than substitutes.

d) The best-known performance-simulation tests are:

1) Work sampling—a miniature replica of the job.

a) Suited to routine jobs.

2) Assessment centers—simulating real problems one may face on the job.

a) For selecting managerial personnel.

e) The advantage of performance simulation over traditional testing methods—because content is essentially identical to job content, performance-simulation should be a better predictor of short-term job performance and should minimize potential employment discrimination allegations.

f) Well-constructed performance-simulation tests are valid predictors.

47. Is the interview effective?

a) The interview, along with the application form, is an almost universal selection device.

b) The value of the interview as a selection device has been the subject of considerable debate.

c) Interviews are reliable and valid selection tools when structured and well organized.

d) The typical interview often provides little in the way of valuable information.

e) All kinds of potential biases can creep into interviews.

1) Prior knowledge about the applicant will bias the interviewer’s evaluation.

2) The interviewer tends to hold a stereotype of what represents a “good” applicant.

3) The interviewer tends to favor applicants who share his/her own attitudes.

4) The order in which applicants are interviewed will influence evaluations.

5) The order in which information is elicited during the interview will influence evaluations.

6) Negative information is given unduly high weight.

7) Deciding on an applicant’s suitability within the first four or five minutes of the interview.

8) Forgetting much of the interview’s content within minutes of its conclusion.

9) Most valid in determining an applicant’s intelligence, level of motivation, and interpersonal skills. (PPT 6-12)

10) Structured and well-organized interviews are more reliable.

f) Managers can make interviews more valid and reliable.

1) Selling applicants on the job and only exposing positive characteristics may lead to a work force that is dissatisfied and prone to high turnover.

g) Behavioral or situational interviews are becoming more popular.

1) Candidates are presented with a situation (which often involve role-playing) and

2) Research in this area suggests behavioral interviews are nearly 8 times more effective for predicting successful job performance.

h) How can you "close the deal"?

1) Every job applicant acquires a set of expectations about the company and the job.

2) Excessively inflated information can have negative effects on the company.

a) Mismatched applicants are less likely to withdraw from the search process.

b) Inflated information builds unrealistic expectations, quicker dissatisfaction.

c) New hires are prone to become disillusioned and less committed to the organization if they feel they were misled.

i) A realistic job preview (RJP) includes both positive and negative information about the job and the company.

1) Applicants given a realistic job preview hold lower and more realistic job expectations.

2) The result is fewer unexpected resignations by new employees.

3) For managers, realistic job previews offer a major insight into the HRM process; retaining good people is as important as hiring them.

Teaching Notes ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Developing Your Interviewing Skill

Interviewing Job Applicants

Developing Your Interviewing Skill

Every manager needs to develop his or her skills at interviewing. Here are the key behaviors involved.

Steps in Practicing the Skill

1. Review the job description and job specification.

2. Prepare a structured set of questions you want to ask all applicants for the job.

3. Before meeting a candidate, review his or her application form and resume.

4. Open the interview by putting the applicant at ease and by providing a brief preview of the topics to be discussed.

5. Ask your questions and listen carefully to the applicant’s answers.

6. Close the interview by telling the applicant what is going to happen next.

7. Write your evaluation of the applicant while the interview is still fresh in your mind.

Practicing the Skill – Interviewing

1. Review and update your resume.

2. Then have several friends critique it who are employed in management-level positions or in management-training programs.

3. Ask them to explain their comments, and make any changes to your resume that they think will improve it.

4. Now inventory your interpersonal and technical skills and any practical experiences that do not show up in your resume.

5. Draft a set of leading questions that you would like to be asked in an interview that would give you a chance to discuss the unique qualities and attributes you could bring to the job.

Teaching Tips:

Students can practice interviewing as they know they will need this skill as they move on through school and begin their careers. Review with students the following steps for effective interview preparation below. You can have students bring their resumes, personal inventories, and sample questions to class and then pair them together to practice interviewing.

HOW ARE EMPLOYEEES PROVIDED WITH NEEDED SKILS AND KNOWLEDGE?

1 How Are New Hires Introduced to the Organization?

48. Once selected, the job candidate needs to be introduced to the job and organization— orientation.

49. The major objectives of orientation:

a) Reduce the initial anxiety.

b) Familiarize new employees with the job, the work unit, and the organization.

c) Facilitate the outsider-insider transition.

50. Job orientation expands on the information the employee obtained during recruitment and selection.

a) This is the time to clarify the new employee’s specific duties and responsibilities and to rectify any unrealistic expectations new employees might hold.

51. Work-unit orientation:

a) familiarizes the employee with the goals of the work unit.

b) makes clear how his/her job contributes to the unit’s goals.

c) provides introduction to his/her co-workers.

52. Organization orientation informs the new employee about the organization’s objectives, history, philosophy, procedures, and rules.

53. Should also include relevant personnel policies such as work hours, pay procedures, overtime requirements, and benefits, as well as a tour of the organization’s physical facilities.

54. Management has an obligation to make the integration of the new employee into the organization as smooth and as free of anxiety as possible.

|Technology and the Manager's Job |

|HR and IT |

|HR has gone digital and the field is using software top assist in a variety of HR functions. Specifically, training has benefitted as |

|e-learning techniques are utilized to develop employees' skills, knowledge and abilities. IT is applied to help company's productivity and the|

|way they conduct business. |

|What specific skills could be improved? |

|Give an example of ways that companies could improve their bottom line? |

2 What Is Employee Training?

55. Employee training is a learning experience in that it seeks a relatively permanent change in employees such that their ability to perform on the job improves.

a) It involves changing skills, knowledge, attitudes, or behavior.

b) Determining training needs typically involves generating answers to several questions. (See Exhibit 6-6.)

56. Warning signals indicating training may be necessary—decreases in production numbers, lower quality, more accidents, and higher scrap or rejection rates.

57. How are employees trained?

a) Most training takes place on the job.

1) On-the-job training (OJT) can disrupt the workplace and result in an increase in errors while learning.

2) Some skill training is too complex to learn on the job.

58. What are some of the typical methods used?

a) Two ways of classifying training are on the job and off the job.

b) See Exhibit 6-7 for typical training methods.

59. How can managers ensure that training is working?

a) Measure results—evaluate the training program.

b) Training programs are typically evaluated by asking several managers, representatives from HRM, and a group of workers who have recently completed the program to provide their opinions.

1) The reactions of participants or managers, while easy to acquire, are the least valid.

2) Their opinions are heavily influenced by factors that may have little to do with the training’s effectiveness—difficulty, entertainment value, or the personality characteristics of the instructor.

3) Trainees’ reactions to the training may provide feedback on how worthwhile the participants viewed the training to be.

c) Training must also be evaluated in terms of how much the participants learned, whether their behavior changed, and whether the training program achieved its desired results.

Teaching Notes ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

HOW DO ORGANIZATIONS RETAIN COMPETENT, HIGH-PERFORMING EMPLOYEES?

1 What Is a Performance Management System?

60. A performance management system is a process of establishing performance standards and evaluating performance in order to arrive at objective human resources decisions as well as to provide documentation to support any personnel actions.

61. See Exhibit 6-8, performance appraisal methods. The written essay requires no complex forms or extensive training to complete.

a) A “good” or “bad” appraisal may be determined as much by the evaluator’s writing skill as by the employee’s actual level of performance.

62. The use of critical incidents focuses the evaluator’s attention on those critical or key behaviors that separate effective from ineffective job performance.

63. Graphic rating scales are one of the oldest and most popular methods of appraisal.

a) This method lists a set of performance factors (e.g., quantity and quality of work, job knowledge, cooperation, loyalty, attendance, honesty, initiative).

b) The evaluator then goes down the list and rates each factor on an incremental scale.

64. Behaviorally anchored rating scales (BARS).

a) Combines the major elements from the critical incident and graphic rating scale.

b) The appraiser rates an employee according to items along a numerical scale, but the items are examples of actual behavior on a given job rather than general descriptions or traits.

65. The 360-degree appraisal seeks performance feedback from oneself, bosses, peers, team members, customers, etc.

a) Used in approximately 90 percent of the Fortune 1000 firms.

66. Traditional performance evaluation systems may be archaic.

a) Due to downsizing, supervisors have greater work responsibility and more direct reports.

b) The growth of project teams and employee involvement places the responsibility of evaluation where people are better able to make an accurate assessment.

67. The 360-degree feedback process also has some positive benefits for development concerns.

a) Many managers simply do not know how their employees truly view them and the work they have done.

b) Research studies into the effectiveness of 360-degree performance appraisals report positive results from more accurate feedback, empowering employees, reducing the subjective factors in the evaluation process, and developing leadership in an organization.

68. Should we compare people with one another or against a set of standards?

a) Multi-person comparisons compare one person’s performance with that of others.

1) They are relative, not absolute, measuring devices.

b) The three most popular forms: group-order ranking, individual ranking, and paired comparison. (PPT 6-17, 6-18)

c) The group order ranking.

1) The evaluator places all employees into a particular classification such as “top one-fifth,” “second fifth,” etc., including “bottom fifth.”

2) If a rater has 20 employees, only 4 can be in the top fifth and 4 must be relegated to the bottom fifth.

d) The individual ranking approach.

1) The evaluator merely lists the employees in order from highest to lowest.

2) Only one can be “best” and there can be no ties.

e) The paired comparison approach.

1) Each employee is compared with every other employee in the comparison group and rated as either the superior or weaker member of the pair.

2) Each employee is assigned a summary ranking based on the number of superior scores received.

3) This approach can become unwieldy with large numbers of employees.

69. What about MBO as an appraisal approach?

a) Introduced in Chapter 4.

b) MBO is also a mechanism for appraising performance.

c) Employees are evaluated by how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of their jobs.

d) MBO’s popularity among managerial personnel is probably due to its focus on end goals.

1) Managers tend to emphasize such results-oriented outcomes as profit, sales, and costs.

e) This emphasis meshes with MBO’s concern with quantitative measures of performance and allows managers to choose the best path for achieving their goals.

2 What Happens if an Employee's Performance is not up to Par?

70. What if an employee is not performing in a satisfactory manner?

71. A manager needs to find out why.

a) If it is because the employee is mismatched (a hiring error), something relatively simple can be done.

b) If the problem is associated with the desire to do the job, it becomes a discipline problem.

1) A manager can rely on employee counseling and/or can take disciplinary action.

72. Employee counseling is a process designed to help employees overcome performance-related problems.

a) It attempts to uncover why employees have lost their desire to work productively.

b) It is designed to find ways to fix the problem.

c) The premise is fairly simple: it is beneficial to both the organization and the employee.

d) If the employee can’t or won’t accept help, then disciplinary action must be taken.

3 How are Employees Compensated?

73. Managers must develop a compensation system that reflects the changing nature of work and the workplace in order to keep people motivated.

8 How Are Pay Levels Determined? The goals of compensation administration are:

a) to design a cost-effective pay structure that will attract and retain competent employees.

b) to provide an incentive for these individuals to exert high energy levels at work.

c) to ensure that pay levels will be perceived as fair by all employees.

1) Fairness means that the established pay levels are adequate and consistent for the demands and requirements of the job.

74. The primary determination of pay is the kind of job an employee performs.

a) Different jobs require different kinds and levels of skills, knowledge, and abilities, and these vary in their value to the organization as does the responsibility and authority of various positions. (See Exhibit 6-9)

75. Pay levels may be influenced by the kind of business, the environment surrounding the job, geographic location, and employee performance levels and seniority.

a) Private-sector jobs typically provide higher rates of pay than comparable positions in public and not-for-profit jobs.

b) Employees who work under hazardous conditions, work unusual hours, or work in geographic areas where the cost of living is higher, are typically more highly compensated.

c) Employees who have been with an organization for a long time may have had a salary increase each year.

76. The most important factor is management’s compensation philosophy.

a) Some organizations don’t pay employees any more than they have to.

b) Others commit to a compensation philosophy of paying at or above area wage levels.

77. Skill-based pay systems reward employees for the job skills and competencies they can demonstrate.

78. Variable pay are systems in which an individual’s compensation is contingent on performance.

a) 90 percent of U.S. organizations use variable pay plans

b) 81 percent of Canadian and Taiwanese organizations do.

1 Why Do Organizations Offer Employee Benefits?

79. When an organization designs its overall compensation package, it has to take into account another element, employee benefits.

80. Employee benefits are nonfinancial rewards that are designed to enrich employees’ lives.

a) Once viewed as “fringes,” today’s benefit packages reflect a considered effort to provide something that each employee values.

81. The benefits offered by an organization will vary widely in scope.

82. Most are required to provide social security and workers’ and unemployment compensations.

83. Organizations also provide an array of benefits, such as paid time off from work, life and disability insurance, retirement programs, health insurance, etc.

a) Costs of some of these, such as retirement and health insurance benefits, are frequently paid by both the employer and the employee.

WHAT CONTEMPORARY HRM ISSUES FACE MANAGERS?

1 How Can Managers Manage Downsizing?

84. Downsizing is the planned elimination of jobs in an organization (See Exhibit 6-10).

85. Downsizing, disruptions in the workplace and in employees’ personal lives are to be expected. Stress, frustration, anxiety, and anger are typical reactions of both individuals being laid off and the job survivors.

86. Many organizations have done a fairly good job of helping layoff victims by offering a variety of job-help services, psychological counseling, support groups, severance pay, extended health insurance benefits, and detailed communications.

87. Although some affected individuals react very negatively to being laid off, the assistance offered reveals that the organization does care about its former employees.

88. Unfortunately, little is done for those who retain their jobs and have the task of keeping the organization going or even of revitalizing it.

89. Both victims and survivors experience feelings of frustration, anxiety, and loss.

90. A new syndrome: layoff-survivor sickness.

a) It is a set of attitudes, perceptions, and behaviors of employees who survive involuntary staff reductions.

b) Symptoms include job insecurity, perceptions of unfairness, guilt, depression, stress from increased workload, fear of change, loss of loyalty and commitment, reduced effort, and an unwillingness to do anything beyond the required minimum.

91. Managers may want to provide opportunities for employees to talk to counselors about their guilt, anger, and anxiety.

92. Group discussions can also provide an opportunity for the survivors to vent their feelings.

93. Every attempt should be made to ensure that those individuals who are still working in the organization know that they are valuable and much-needed resources.

|Right or Wrong? |

|A report released by The Corporate Library says that many CEOs who voluntarily didn’t take their salary for a year or only took a $1 in pay |

|were actually well compensated. Such action by a CEO is usually intended to convey concern and commitment, but in many cases, it may have |

|been largely a symbolic action. Still, 21 received some form of “all other compensation.” In 18 instances of these “dollar CEOs,” the |

|individuals received a combined $6 billion in company stock alone. |

|What do you think of this? |

|What do such actions convey to employees? To stockholders? To the general public? |

2 How Can Work Force Diversity Be Managed?

94. Consider how work force diversity affects recruitment, selection, and orientation.

95. Improving work force diversity requires managers to widen their recruiting net.

a) To increase diversity, managers must increasingly turn to non-traditional sources such as women’s job networks, over-50 clubs, urban job banks, disabled people’s training centers, ethnic newspapers, and gay rights organizations.

96. Once a diverse set of applicants exists, efforts must be made to ensure that the selection process does not discriminate.

a) Applicants need to be made comfortable with the organization’s culture and be made aware of management’s desire to accommodate their needs.

97. Orientation is often difficult for women and minorities.

a) Many organizations provide special workshops to raise diversity consciousness among current employees as well as programs for new employees that focus on diversity issues.

b) The thrust of these efforts is to increase individual understanding of differences.

c) A number of companies also have special mentoring programs for female and minority managers who have few role models.

3 What Is Sexual Harassment?

98. Sexual harassment is a serious issue in both public and private sector organizations.

a) More than 12,000 complaints are filed with the EEOC each year.

b) More than 15 percent of the complaints are filed by males.

c) Sexual harassment is estimated to be the single biggest financial risk facing companies today—and result in upwards of a 30-percent decrease in a company’s stock price.

1) Mitsubishi paid out more than $34 million to 300 women because of sexual harassment.

2) Results in millions lost in absenteeism, low productivity, and turnover.

d) Sexual harassment is a global issue.

99. Sexual harassment is defined as any unwanted activity of a sexual nature that affects an individual’s employment.

a) It can occur between members of the opposite or of the same sex.

b) It can occur between employees of the organization or involve an employee and a non-employee.

c) Such an activity was generally protected under Title VII (sex discrimination) in the United States.

d) In recent years, this problem has gained more recognition.

100. Much of the problem is defining what constitutes this illegal behavior.

101. In 1993, the EEOC cited three situations in which sexual harassment can occur where there are instances of verbal or physical conduct toward an individual.

a) Creates an intimidating, offensive, or hostile environment;

b) Unreasonably interferes with an individual’s work; or

c) Adversely affects an employee’s employment opportunities.

102. For many organizations, it’s the offensive or hostile environment issue that is problematic.

103. The Supreme Court case of Meritor Savings Bank vs. Vinson supported the hostile environment concept; it also identified employer liability.

a) An organization can be held liable for sexual harassment actions by its managers, employees, and even customers!

104. How do organizational members determine if something is offensive?

a) It depends on the people in the organization and the environment in which they work.

b) We all must be attuned to what makes fellow employees uncomfortable—and if we don’t know, then we should find out!

1) This means understanding one another and respecting others’ rights.

105. What can a company do to protect itself?

106. The courts want to know two things:

a) Did the organization know about, or should it have known about, the alleged behavior?

b) What did management do to stop it?

107. In 1993, the Supreme Court ruled in the case of Harris v. Forklift Systems, Inc. that victims do not have to suffer substantial mental distress to receive a jury award.

108. In June 1998, the Supreme Court ruled that sexual harassment may have occurred even if the employee had not experienced any “negative” job repercussions.

a) Case of Kimberly Ellerth, a marketing assistant at Burlington Industries.

b) What the Supreme Court’s decision in this case indicates is that “harassment is defined by the ugly behavior of the manager, not by what happened to the worker subsequently.”

109. Whenever involved in a sexual harassment matter, the harasser may have rights, too.

a) No action should be taken against someone until a thorough investigation has been conducted.

b) The results of the investigation should be reviewed by an independent and objective individual before any action against the alleged harasser is taken.

c) The harasser should be given an opportunity to respond to the allegation, and have a disciplinary hearing if desired.

d) An avenue for appeal should also exist for the alleged harasser—an appeal heard by someone in a higher level of management who is not associated with the case.

4 What Is Workplace Spirituality?

10 Workplace spirituality is not about organized religious practices.

e) Workplace spirituality is about recognizing that employees have an inner life that nourishes and is nourished by meaningful work that takes place in the context of an organizational community.

f) Spiritual organizational cultures recognize that employees have both a mind and a spirit.

110. Why the emphasis on Spirituality in today’s organizations?

a) Historical models of management focused on organizational efficiency without feelings.

b) Today, just as consideration of emotions helps us, an understanding of employee's spirituality can help explain employee workplace behavior.

111. What does a Spiritual Organization Look Like?

a) Concerned with ethics, values, motivation, work/life balance, and leadership elements f an organization. (See Exhibit 6-11)

b) Helps employees develop and reach their full potential.

c) Addresses problems created by work/life conflicts.

d) Critics question the legitimacy of organizations imposing their spiritual values on employees, and on whether spirituality and profitability are compatible.

e) Studies show that organizations that have introduced spirituality have increased productivity, reduced turnover, greater employee satisfaction, and increased organizational commitment.

112. What Does HRM have to do with Spirituality?

a) HRM is the leader or vehicle for workplace spirituality.

b) HRM has introduced many of the initiatives associate with workplace spirituality for years. Workplace spirituality is about recognizing that employees have an inner life that nourishes and is nourished by meaningful work that takes place in the context of an organizational community.

1 How and Why Are Organizations Controlling HR Costs?

113. Healthcare costs are skyrocketing and companies are trying to control the costs.

114. Since 2002, health care costs have risen an average of 15 percent a year and are expected to double by the year 2016 from the $2.2 trillion spent in 2007.

115. Another recent study indicated that nearly 90 percent of companies planned to aggressively promote healthy lifestyles to their employees during the next three to five years.

116. Pensions plans have been around since the 19th century, although costs have increased and need controlled also.

117. Many companies like NCR, FedEx, Lockheed Martin, and Motorola—no longer provide pensions.

118. Organizations want to attract talented, capable employees by offering them desirable benefits such as pensions, but they have to balance the costs of providing such benefits.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

REVIEW AND APPLICATIONS

CHAPTER SUMMARY

1. Describe the key components of the human resource management process and the important influences on that process. The HRM process consists of eight activities that will staff an organization with competent, high-performing employees who are capable of sustaining their performance level over the long term.

The first three HR activities involve employment planning and include recruitment, downsizing, and selection. The next two steps involve helping employees adapt to the organization and ensuring that their skills and knowledge are kept current, and include the HR activities of orienting and training. The last steps involve identifying performance goals, correcting performance problems, and helping employees sustain high levels of performance. These are done using the HR activities of performance appraisal, compensation and benefits, and safety and health. The main influences on the HRM process are legal although other environmental conditions such as restructuring, downsizing, diversity, and so forth can impact it as well.

2. Discuss the tasks associated with identifying and selecting competent employees. The first task is employment planning, which involves job analysis and the creation of job descriptions and job specifications. Then, if job needs are indicated, recruitment involves attempts to develop a pool of potential job candidates. Downsizing is used to reduce the labor supply. Selection involves determining who is best qualified for the job. Selection devices need to be both reliable and valid. Managers may want to give potential employees a realistic job preview.

3. Explain how employees are provided with needed skills and knowledge. New hires must be acclimated to the organization’s culture and be trained and given the knowledge to do the job in a manner consistent with the organization’s goals. Orientation—job, work unit, and organizational—provides new employees with information to introduce them to the job. Training is used to help employees improve their ability to perform on the job.

4. Describe strategies for retaining competent, high-performing employees. Two HRM activities that play a role in this are managing employee performance and developing an appropriate compensation and benefits program. Managing employee performance involves establishing performance standards and then appraising performance to see if those standards have been met. There are various performance appraisal techniques managers can use. If an employee’s performance is not up to par, managers need to assess why and take action. Compensation and benefits programs can help attract and retain competent and talented individuals. Managers have to determine who gets paid what and what benefits will be offered.

5. Discuss contemporary issues in managing human resources. Downsizing is the planned elimination of jobs and must be managed from the perspective of layoff victims and job survivors. Workforce diversity must be managed through HRM activities including recruitment, selection, and orientation. Sexual harassment is a significant concern of organizations and managers, which mean programs and mechanisms must be in place to educate all employees about it. Workplace spirituality involves attempts by organizations to make work more meaningful to employees. Finally, organizations are looking for ways to control HR costs, especially health care costs and pension costs.

[pic]

To check your understanding of outcomes 6.1 – 6.5, go to and try the chapter questions.

UNDERSTANDING THE CHAPTER

1. How does HRM affect all managers?

Answer: The quality of an organization is determined by the quality of people it employs. Staffing and human resources management decisions and methods are critical to ensuring that the organization hires and keeps the right personnel. Many small business managers must do their own hiring without the assistance of HRM. Managers in larger organizations are frequently involved in HRM activities.

2. Should an employer have the right to choose employees without governmental interference? Support your position.

Answer: Students’ positions will vary. They should seek a balance in their answer. While no businessperson likes someone from the “outside” telling him/her what to do, the reality is that the government interference “balances” the power relationship between an employer and a job candidate.

3. Some critics claim that corporate HR departments have outlived their usefulness and are not there to help employees but to shield the organization from legal problems. What do you think? What benefits are there to having a formal HRM process? What drawbacks?

Answer: HR departments are critical to the success of organizations since human resources are the true assets of the company. When HR is involved with strategic decisions of recruiting, staffing, planning and retaining stat candidates and employees, the y are an integral part of organizations. Formalizing processes add to job-related criteria which also minimizes legal challenges. If they are organized and autonomous, HR should be essential without drawbacks.

4. Do you think it’s ethical for a prospective employer to delve into an applicant’s life by means of interviews, tests, and background investigations? What if those investigations involved looking at your Facebook page or personal blogs? Explain your position. To check your understanding of outcomes, go to and try the chapter questions.

Answer: This will be a controversial issue. Most students will probably feel their private lives are their own business. A few will not. Key here is discussing the relationship between non work-related behaviors having an impact on work. For example, if someone has an alcohol or drug problem, even if it isn’t practiced on the job, can it, will it eventually impact their job performance? Probably. Employment decisions can make or break a company and certainly contribute to its success. If you are a potential candidate, social networks and public domain is fair game and will be used by employers.

5. Discuss the advantages and drawbacks of the various recruiting sources.

Answer: Recruitment seeks to develop a pool of potential job candidates. Typical sources include an internal search, advertisements, employee referrals, employment agencies, school placement centers, and temporary services. It depends on a variety of factors which device is selected. An example is an internal search can be used when a position becomes available and there are good quality candidates within the organization's talent management system to fill the vacancy. The benefit is that the employee would already know the culture and have a proven track record. The downside of only hiring from within is no new fresh ideas or best practices learned from within another firm. Employee referrals are often a great recruiting method since internal employees use their network and reputation usually resulting in a win-win for the company, the employee and the candidate.

6. Discuss the advantages and drawbacks of the various selection devices.

Answer: Selection devices must match the job in question. Work sampling works best with low-level jobs; assessment centers work best for managerial positions. The validity of the interview as a selection device increases at progressively higher levels of management. The interview, along with the application form, is an almost universal selection device. The value of the interview as a selection device has been the subject of considerable debate. Interviews can be reliable and valid selection tools when structured and well organized, and when interviewers hold to common questions.

But the typical interview often provides little in the way of valuable information. All kinds of potential biases can creep into interviews.

← Prior knowledge about the applicant will bias the interviewer’s evaluation.

← The interviewer tends to hold a stereotype of what represents a “good” applicant.

← The interviewer tends to favor applicants who share his/her attitudes.

← The order in which applicants are interviewed will influence evaluations.

← The order in which information is elicited during the interview will influence evaluations.

← Negative information is given unduly high weight.

← The interviewer may make a decision concerning the applicant’s suitability within the first four or five minutes of the interview.

← The interviewer may forget much of the interview’s content within minutes of its conclusion.

← The interview is most valid in determining an applicant’s intelligence, level of motivation, and interpersonal skills.

← Structured and well-organized interviews are more reliable than unstructured and unorganized ones.

7. What are the benefits and drawbacks of realistic job previews? (Consider this question from both the perspective of the organization and the perspective of a potential employee.)

Answer: Realistic job previews are beneficial to both the employee and employer, since both parties are aware of the true details of the job and what a 'life in a day looks like. Although it may deter some candidates, it may also reduce turnover in the future when both parties can make an informed decision on the match.

8. What, in your view, constitutes sexual harassment? Describe how companies can minimize sexual harassment in the workplace.

Answer: Sexual harassment encompasses sexually suggestive remarks, unwanted touching and sexual advances, requests for sexual favors, or other verbal and physical conduct of a sexual nature. Sexual harassment is a serious issue in both public and private sector organizations. It is defined as any unwanted activity of a sexual nature that affects an individual’s employment. It can occur between members of the opposite or of the same sex. A workplace environment that is free from sexual harassment is generally guaranteed under employment discrimination laws.

The EEOC cites three situations in which sexual harassment can occur. These are instances where verbal or physical conduct toward an individual (1) creates an intimidating, offensive, or hostile environment; (2) unreasonably interferes with an individual’s work; or (3) adversely affects an employee’s employment opportunities. For many organizations, it’s the offensive or hostile environment issue that is problematic.

A company can do some things to protect itself. The courts want to know two things—did the organization know about, or should it have known about, the alleged behavior; and what did management do to stop it? Therefore the organization needs to educate all employees on sexual harassment matters and have mechanisms available to monitor employees.

9. Research your chosen career by finding out what it’s going to take to be successful in this career in terms of education, skills, experience, and so forth. Write a personal career guide that details this information.

Answer: Student answers will vary.

UNDERSTANDING YOURSELF

How Much Do I Know About HRM?

This scale measures how much you know about human resource management. Although it assesses your knowledge of some key findings within the HRM field, there are many other important things to know.

INSTRUMENT Below are a number of statements about research findings in human resource management. For each statement, indicate whether you think it is true or false.

0 = False

1 = True

|1. Most managers give employees lower performance appraisals than they objectively deserve. |0 1 |

|2. Poor performers are generally more realistic about their performance than good performers are. |0 1 |

|3. Despite the popularity of drug testing, there is no clear evidence that applicants who score positive on drug tests are any less |0 1 |

|reliable or less productive employees. | |

|4. Most people over-evaluate how well they perform on the job. |0 1 |

|5. The most important determinant of how much training employees actually use on their jobs is how much they learned during training.|0 1 |

|6. The most valid employment interviews are designed around each candidate’s unique background. |0 1 |

|7. Although there are “integrity tests” that try to predict whether someone will steal, be absent, or otherwise take advantage of an |0 1 |

|employer, they don’t work well in practice because so many people lie on them. | |

|8. On average, conscientiousness is a better predictor of job performance than is intelligence. |0 1 |

|9. Most employees prefer to be paid on the basis of individual performance rather than on team or organizational performance. |0 1 |

|10. There is a positive relationship between the proportion of managers receiving organizationally based pay incentives and company |0 1 |

|profitability. | |

SCORING KEY To score the measure, compare your answers to the correct answers, which are as follows: (1) False, (2) False, (3) False, (4) True, (5) False, (6) False, (7) False, (8) False, (9) True, and (10) True. Matches should be counted as one. Compute the number of correct responses. Scores will range from zero (all response incorrect) to 10 (responses correct).

ANALYSIS AND INTERPRETATION If you didn’t achieve a high score, don’t worry just yet. These questions were given to nearly 1,000 HR professionals in a variety of organizations. These professionals had an average of 14 years of work experience in HRM. How did they do? On some of the questions (such as, “Most managers give employees lower performance appraisals than they objectively deserve”), the vast majority gave the correct answer (which is false, by the way). On other questions, however, a much smaller percentage gave the correct answer. For example, for the statement: “On average, conscientiousness is a better predictor of job performance than is intelligence,” only 18 percent of the HR professionals gave the correct response (false)!

Why the discrepancies? There are several reasons. It could be that practicing HR professionals are unaware of research findings, either because they don’t have time to read academic journals (or textbooks), or because the journals are so technically complex that it’s difficult to extract the main findings. It also could be that practicing professionals are aware of the research findings but choose not to utilize them because of factors such as political reasons, organizational inertia, or aversion to risk. In any event, closing the gap between research and practice is likely to be beneficial, as research has indicated that organizations that implement effective HRM practices perform better than those that don’t.

Overview

This scale measures how much you know about human resource management. Although this measure assesses some key findings within the field of human resource management, there are many other important things to know.

If you did not achieve a high score, do not worry just yet. These questions were given to nearly 1,000 human resource (HR) professionals in a variety of organizations. The professionals had an average of 14 years of work experience in human resource management. How did they do? On some of the questions (e.g., “Most managers give employees lower performance appraisals than they objectively deserve”), the vast majority gave the correct answer (which is “false,” by the way). On other questions, however, a much smaller percentage gave the correct answer. For example, for the statement: “On average, conscientiousness is a better predictor of job performance than is intelligence,” only 18% of the HR professionals gave the correct response (false)!

Why the discrepancies? There are several reasons. It could be that practicing HR professionals are unaware of research findings, because either they do not have time to read academic journals, or because the journals are so technically complex that it is too difficult to extract the main findings. It also could be that practicing HR professionals are aware of the research findings but choose not to utilize them because of factors such as political reasons, organizational inertia, or aversion to risk. In any event, closing the gap between research and practice is likely to be beneficial, as research has indicated that organizations who implement effective human resource management practices perform better than those that do not.

Teaching Notes

This assessment is closely related to the prior instrument (IV.G.1) with only a slight twist of topic. As with the previous assessment, this can be used to start discussions on the general topic of HRM and to develop student interest.

Exercises

1. Additional Gotcha Questions. Show the 10 statements from the assessment or on the board on a PowerPoint® slide. Ask the class which answers surprised them. Have those who respond describe how they arrived at an understanding of human nature opposite of what research has shown to be true. Draw out their observation and thought processes. Use their comments to reinforce the need to study OB and HRM.

Learning Objective(s): To describe the typical observational learning method used by people to learn about human relations management.

Preparation/Time Allotment: Allow 15 to 20 minutes for this warm-up HRM discussion.

Advantages/Disadvantages/Potential Problems: This exercise is a good means of developing initial interest in HRM. The 12 items from IV.G.1 can be brought out and compared to the 10 items on this instrument to help students realize the distinction between OB and HRM.

2. Why Bother? In most cases, this assessment and its related chapter are provided toward the end of the course. It may be helpful to ask the students why they should bother to study HRM when they have already spent all this time learning OB. Play stupid and draw out the differences between the two related fields by asking leading questions of the students. Is HRM just what happens after managers learn about OB? Is it just institutionalized OB?

Learning Objective(s): To elicit the differences between HRM and OB as fields of study.

Preparation/Time Allotment: Allow 20 minutes for discussion.

Advantages/Disadvantages/Potential Problems: This exercise does require the instructor to be fast on his or her feet but it can be a fun activity and a good review of the OB concepts. Forcing the students to draw out the distinction themselves makes it far more likely they will remember it

|FYIA (For Your Immediate Action) |

|Western Montana Power and Light |

|To: Sandra Gillies, Director of Human Resources |

|From: William Munroney, CEO |

|Re: Sexual Harassment |

|Sandra, I think we might have a problem. It appears that some of our employees aren’t clear about the practices and actions that do or do not |

|constitute sexual harassment. We can’t have any ambiguity or uncertainty about this I want to make the issue of sexual harassment the primary |

|topic at next month’s executive board meeting. |

|What would be some content of an initial two-hour employee workshop on sexual harassment? |

|What would be an appropriate procedure for employees who believe that they have been the victims of sexual harassment? |

|Case Application |

|Busted |

|Scotts Miracle-Gro is facing the dilemma of persuading employees to take better care of themselves without diminishing employee morale or |

|getting hit with employee lawsuits. It’s on the leading edge of companies looking to monitor and change employee behavior. |

|Scotts’ CEO Jim Hagedorn (in photo) acknowledges that his company’s wellness program is controversial. In 2000, he, like many other CEOs, |

|watched as his company’s health care costs skyrocketed. No help was in sight from either the government or from the health insurance industry,|

|and the company’s employees were “bingeing on health care.” By February 2003, workers’ health care insurance premiums had doubled and employee|

|morale had plummeted. 20 percent of the company’s net profits were going to health care. The company’s health-risk assessment showed that |

|half of the 6,000 employees were overweight or morbidly obese and a quarter of them smoked.. He found a law firm that helped determine that in|

|21 states (including the company’s home base in Ohio) it wasn’t illegal to hire and fire people based on their smoking habits. |

|Today, Scotts’ employees are encouraged to take exhaustive health-risk assessments. Those who don’t, pay $40 a month more in premiums. All |

|employees are assigned a health coach, who works closely with those who are moderate to high risk. Those who don’t comply pay an additional |

|$67 a month on top of the $40. Many employees find the policy “intrusive.” |

|Discussion Questions |

|What do you think about Hagedorn’s approach to controlling employee health care costs? Do you agree with it? Why or why not? |

|Answer: Responses will vary although the company has some rights since they are paying the bulk of the premiums. It may be viewed as severe, |

|but people should have some personal accountability too. |

|What benefits/drawbacks are there to this type of wellness program for (a) employees and (b) the company? |

|Answer: The benefits are obvious in terms of controlling costs and a balanced diet, good nutrition and exercise are keys to good health. |

|Lowered premiums, healthier employees are all positive. The drawbacks are when firms become too intrusive and more of a 'big brother |

|mentality' affecting employees' personal time and home life. |

|Research company wellness programs. What types of things are companies doing to encourage employee wellness? Are there any things that you |

|found that you might recommend that Hagedorn implement? Describe. |

|Answer: Companies offer a variety of programs from smoking cessation, discounts at health clubs, in-house facilities, dietary programs, chair|

|massages, alcohol and drug counseling, etc. Any of these programs plus many more could benefit Scott's employees for long-term health. |

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