Solution Manual for Managing Human Resources, 9th Edition

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ManagingHumanResourcesNinthEditionLuis R. Gómez-MejíaArizona State UniversityDavid B. BalkinUniversity ofColorado,BoulderRobertL.CardyUniversity of Texasat San AntonioKenneth P. CarsonGrove CityCollegeResource Manual

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ContentsChapter 1Meeting Present and Emerging Strategic Human Resource Challenges............1Chapter 2Managing Work Flowsand Conducting Job Analysis......................................18Chapter 3Understanding Equal Opportunity and the Legal Environment.......................35Chapter 4Managing Diversity..........................................................................................55Chapter 5 Recruiting and Selecting Employees................................................................74Chapter 6Managing Employee Separations, Downsizing, and Outplacement................88Chapter 7Appraising and Managing Performance.........................................................101Chapter 8Training the Workforce..................................................................................118Chapter 9Developing Careers.........................................................................................132Chapter 10Managing Compensation..............................................................................144Chapter 11Rewarding Performance...............................................................................159Chapter 12Designing and Administering Benefits.........................................................178Chapter 13Developing Employee Relations..................................................................192Chapter 14Respecting Employee Rights and Managing Discipline..............................205Chapter15Working with Organized Labor...................................................................221Chapter 16Managing Workplace Safety and Health.....................................................237Chapter 17International HRM Challenge......................................................................251

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1Chapter 1Meeting Present and Emerging Strategic Human Resource ChallengesCHAPTER OVERVIEWThis first chapter provides a broad overview of the strategic human resource challengesorganizations face, and provides a framework to understand the role of human resourcestrategies, activities, and programs to achieve sustained competitive advantage. Tosupport this broad perspective, some of the most important external and internalchallenges vis-à-vis HR strategies are discussed in three categories: environmentalchallenges, organizational challenges, and individual challenges. The chapter explains theplanning and implementation of strategic HR policies, as well as the role of line managersand the HR department in the effective use of human resources. Also explored here ishow managers, in partnership with human resource professionals, adopt and implementHR strategies through specific strategies and programs. HR professionals are oftenresponsible for designing these programs in order to meet business goals and employeeneeds. Although the line managers provide the necessary input during the program designphase, they are primarily responsible for carrying out or implementing such programs.This chapter provides a strong overview of how firms can use HR strategies andinitiatives to deal with external and internal challenges, which are then explored in detailin later chapters.LEARNING OBJECTIVESAfter reading this chapter, students should be able to deal more effectively with thefollowing challenges:1.1Describe the major challenges affecting HR.1.2Outline key steps in planning and implementing strategic HR policies.1.3Understand the various HR strategies that1.4companies use to increase firm performance.1.5Outline HR best practices.1.6Explain how to establish a close partnership between the HR department andmanagers.ANNOTATED OUTLINELEARNING OBJECTIVE 1.1Describe the major challenges affecting HRI.Human Resource Management: The ChallengeHuman resource challenges that face today’s managers may be categorizedaccording to their primary focus: the environment, the organization, or theindividual. Firms that deal with these challenges effectively are likely to outperformthose that do not. Figure 1.1

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2A.Environmental ChallengesEnvironmental challenges refer to forces external to the firm that are largelybeyond management’s control but influence organizational performance. Theyinclude rapid change, the web economy, workforce diversity, globalization,legislation, evolving work and family roles, skill shortages and the rise of theservice sector, and natural disasters and terrorism,B.Organizational ChallengesOrganizational challenges refer to concerns that are internal to the firm.Effective managers must be proactive and deal with organizational issuesbefore they become too big.C.Competitive Position: Cost, Quality, or Distinctive CapabilitiesHuman resources represent the single most important cost in many businesses.A number of HR policies affect the organization’s competitive position. Theseissues include: decentralization, downsizing, organizational restructuring, self-managed work teams, organizational culture, technology, internal security,data security, outsourcing, and product integrity.D.Individual ChallengesHuman resource issues at the individual level address decisions most pertinentto specific employees. These issues almost always reflect what is happening inthe larger organization. How individuals are treated also is likely to have aneffect on organizational issues. For instance, if many key employees leave afirm to join its competitor, it will affect the competitive posture of the firm.The individual issues include matching people and organizations, ethics andsocial responsibility, productivity, empowerment, brain drain, and jobinsecurity.LEARNING OBJECTIVE 1.2Outline key steps in planning and implementing strategic HR policiesII.Planning and Implementing Strategic HR PoliciesTo be successful, firms must closely align their HR strategies and programs (tactics)with environmental opportunities, business strategies, and the organization’s uniquecharacteristics and distinctive competence.A.The Benefits of Strategic HR Planning

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3Formulating HR strategies and establishing programs to implement them isstrategic human resource planning. Successful HR strategic planning providesmany benefits for the company, including (1) encouragement of proactiverather than reactive behavior, (2) explicit communication of company goals,(3) stimulation of critical thinking and ongoing examination of assumptions,(4) identification of gaps between current situation and future vision, (5)encouragement of line managers’ participation, (6) identification of HRconstraints and opportunities, and (7) creation of common bonds.B.The Challenges of Strategic HR PlanningIn developing HR strategy, organizations face several important challenges,including (1) maintaining a competitive advantage, (2) reinforcing overallbusiness strategy, (3) avoiding excessive concentration on day-to-dayproblems, (4) developing HR strategies suited to unique organizationalfeatures, (5) coping with the environment, (6) securing managementcommitment, (7) translating the strategic plan into action, (8) combiningintended and emergent strategies, and (9) accommodating change.C.Strategic HR ChoicesHuman resource strategies, which are implemented through HR activities andprograms, may affect the performance of the business. The options that a firmhas available in designing its HR system are its strategic HR choices. Somepotential choices include work flows, staffing, employee separations,performance appraisal, training and career development, compensation,employee and labor relations, employee rights, and international management.Figure 1.2LEARNING OBJECTIVE 1.3Understand the various HR strategies that companies use to increasefirm performance.III.Selecting HR Strategies to Increase Firm PerformanceNo HR strategy is “good” or “bad” in and of itself. The success of HR strategiesdepends on the situation or context in which they are used. In other words, an HRstrategy’s effect on firm performance is always dependent on how well it fits withsome of the factors.Fitrefers to the consistency or compatibility between HRstrategies and other important aspects of the organization. Figure 1.3A.Fit with Organizational StrategiesOrganizational strategies may be examined at two levels: corporate andbusiness.

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4Corporate strategyrefers to the mix of businesses a corporation decides tohold and the flow of resources among those businesses. This involvesdecisions pertaining to acquisition, divestment, diversification, and growth. Atone end of the spectrum is the evolutionary business strategy; at the other endis the steady-state strategy.Business unit strategiesrefer to those established by firms or autonomousunits of the corporation. Well-known business strategies were formulated byPorter (overall cost leadership strategy, differentiation business strategy, andfocus strategy) and Miles and Snow (defender strategy and prospectorstrategy). Figure 1.4.B.Fit with the EnvironmentHR strategies should help the organization better exploit environmentalopportunities or cope with the unique environmental forces that affect it. Theenvironment can be examined on four dimensions, including (1) degree ofuncertainty, (2) volatility, (3) magnitude of change, and (4) complexity.Figure 1.5.C.Fit with Organizational CharacteristicsTo be effective, HR strategies must be tailored to the organization’spersonality. The features of an organization’s personality are its (1) theproduction process for converting inputs into output, (2) the firm’s marketposture, (3) the firm’s overall managerial philosophy, (4) the firm’sorganizational structure, and (5) the firm’s organizational culture.D.Fit with Organizational CapabilitiesAn organization’s capabilities are its distinct competencies. HR strategiesmake a greater contribution to a firm’s performance to the extent they (1) helpto exploit the firm’s specific advantages or strengths while avoiding itsweaknesses, and (2) when they assist in better using its own unique blend ofhuman resource skills and assets.E.Choosing Consistent and Appropriate HR Tactics to Implement HRStrategiesEven the best-laid strategic HR plans may fail when specific HR programs arepoorly chosen or implemented. A firm’s HR strategies must be mutuallyconsistent. That is, HR strategies are more likely to be effective if theyreinforce one another rather than work at cross-purposes. Figure 1.6LEARNING OBJECTIVE 1.4

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5Outline HR best practicesF.HR Best PracticesThere is much debate about whether high-performing HR practices createsustained high organizational performance or vice versa. Regardless of thedebate, it is reasonable to state that organizations should considerimplementing practices associated with the highest-performing firms. Figure1.7LEARNING OBJECTIVE 1.5Explain how to establish a close partnership between the HR departmentand managersA.The HR Department and Managers: An Important PartnershipAll managers must effectively deal with human resource issues because theseissues are at the core of being a good manager. Moreover, mutual partnershipsmust be formed among line managers and HR professionals in order toeffectively and efficiently meet the employees’ and employer’s goals andneeds. Specific steps a company can take to foster an effective partnershipbetween managers and the HR department include: (1) analyze the people sideof productivity, (2) view HR professionals as internal consultants, (3) instill ashared sense of common fate, (4) require some managerial experience, (5)actively involve top corporate and divisional managers, (6) require senior HRexecutives to participate.B.Specialization in Human Resource ManagementWhile the size of the typical HR department has been shrinking in recentyears, the use of external HR consultants has increased considerablyThis may reflect the growth of government regulations and organizationsrecognizing the growing importance of HR issues. Many colleges anduniversities are now offering degrees in HR-related fields. The demand forHR professionals is expected to continue to grow in years to come.ANSWERS TO END-OF-CHAPTER DISCUSSION QUESTIONS1-1.What do you see as the main advantages and disadvantages of Internet-basedrecruiting? Explain.Students answers will vary but some of the advantages include: it takes less timeto review more applications and it broadens the recruiting pool because anyonewith access to a computer and Internet can apply from anywhere in the world andHR only looks at candidates who fit the specific qualifications of the job. Some

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6disadvantages include: not everyone has access to the Internet so you may lose outon some applicants who do not have this resource; because the computer system isonly looking for certain things, an organization may lose out on some goodpotential applicants because they may not meet the exact search criteria; and it canbe costly..1-2. Roughly two generations ago many HR articles decried problems withperformance appraisal. A common complaint was that managers did notdevote sufficient time to conducting the appraisals and that biases wererampant. Another common complaint was that most managers gave highratings to all employees and did not bother to properly differentiate andcarefully document the performance evaluation of subordinates. Several oldsurveys reported that three quarters or more of employees hatedperformance appraisals and found them to be useless, increasing tension atwork Several recent surveys reveal that this situation has not changed much,with the majority of managers and employees unhappy with appraisals.Based on what you have learned in this chapter, what implications does thishave for HR practices that presumably rely on an accurate assessment ofemployee performance (such as promotions and merit pay decisions)?Jobs have become more complicated in recent years and particularly since theeconomic recession, organizations have to do more with fewer resources. In lightof this one explanation, it may be that it is harder to do quality performanceappraisals than it used to be. The process may have improved but the jobs mayhave changed faster than appraisal systems could keep up with. The overallunderlying problem may be that people do not like to give employees negativefeedback, thus the appraisals they provide are less than accurate. This hasnumerous implications for HR practices because the policies and procedures (nomatter how good they may be) are only as good as the people who apply them andwhether they are applied fairly and consistently.1-3.Go back to the Manager’s Notebook “How Harley-Davidson Is TakingAdvantage of a Diverse Customer Base.” If you were a HR manager of acompany such as Harley-Davidson, what human resource programs wouldyou put in place to help the company expand its customer base? Explain.Student answers should reference points covered in Figure 1.7.•Offer high employment security because this indicates that the firm iscommitted to the employee’s welfare•Develop a good selection program that can screen the best applicants•Offer wages that are highly competitive as this helps reduce employeeturnover and helps in the attraction of high-quality employees

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7•Recognize employees by providing monetary and non-monetary rewards•Make employees part-owners of the firm by providing them with stock inthe firm•Communicate effectively with employees so that they are kept informed ofmajor issues confronting theorganization and any major initiatives•Encourage employee involvement so that there is strong “buy-in” ofhuman resource practices and important managerial initiatives•Encourage teamwork so that employees are more willing to collaboratewith each other•Invest in training programs to improve employee skills•Provide opportunities for learning at work so that employees are“stretched” in the use of their skills•Give a higher priority to internal candidates for promotion because thisenhances employee motivation by providing future career opportunities•Promote inclusion in workforce•Use data analytics1-4.Of all the issues affecting HR practices discussed in this chapter, which threein your opinion are the most important ones? Justify your answer.Student answers will vary but their justifications should reference points coveredin the text. Training programs are important issue because employees can improvetheir skills and advance in their careers. Likewise, providing opportunities forlearning at work allows employees to grow in their jobs, feel more jobsatisfaction, and become more marketable. Offering competitive wages will serveto retain good employees and reduce turnover.1-5.In your opinion, which of the environmental, organizational, and individualchallenges identified in this chapter will be most important for humanresource management in the twenty-first century? Which will be leastimportant? Use your own experiences in your answer.Student answers will vary in response to this question but it is important to notethat governmental regulation, the changing nature of the workforce (shorter-termemployment is commonplace), and the globalization of business are all key areasto discuss.1-6.Do you think it is fair for a company to discipline employees by charginghigher fees for those who show evidence of “unhealthy life styles”? Accordingto Dr. Kevin Volpp, director of the Center for Health Incentives andBehavioral Economics at the University of Pennsylvania, punitive surchargesand tough health targets may hurt those who need assistance the most. Doyou agree? Explain.Student answers will vary in response to this question. These issues can becomeemotionally charged for some students. It is important to note that these sorts of

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8policies are legal for private firms. However, irrational students may feel thesepractices are not, so it is important to present the fact that there are a myriad ofthese types of policies in place.1-7.3M’s competitive business strategy is based on innovation. 3M requires thatat least 25 percent of its annual sales come from products introduced over theprevious five years, a goal it often exceeds. Specific HR programs adopted toimplement this strategy include the creation of a special fund that allowsemployees to start new projects or follow up on ideas. 3M’s “release time”program, in which workers are given time off during the day to pursue theirown interests, is given credit for the creation of new products thatmanagement would not have thought of by itself. In addition, 3M’s appraisalprocess encourages risk taking. A senior manager at 3M says, “If you arethreatened with dismissal after working on a project that fails, you will nevertry again.” What other types of HR policies might 3M institute to spurproduct innovation?Students can work in small groups and develop HR policies that might encourageinnovation. The groups can share their ideas with the class.1-8.Many believe that top managers care little about human resources comparedto such areas as marketing, finance, production, and engineering. Whatmight account for the perception, and what would you do to change it?Students can share their opinions with the class, while referring to the conceptspresented in the chapterMyManagementLab Assisted-graded and Auto-graded Questions.1-9.Outline a set of issues that are most likely to pose a major challenge to themanagement of human resources during the next few decades. Based on thematerials learned in this chapter, explain why you have chosen each of theseissues.Students can discuss which issues will pose a major challenge to HR managersand explain why they have chosen each issue. The major HR challenges fall intothree categories: environmental challenges, organizational challenges, andindividual challenges. The environmental challenges are rapid change, the rise ofthe Internet, workforce diversity, economic globalization, legislation, evolvingwork and family roles, skill shortages and the rise of the service sector, andcatastrophic events as a result of natural disasters and terrorism. Theorganizational challenges are choosing a competitive position, decentralization,downsizing, organizational restructuring, the rise of self-managed work teams, theincreased number of small businesses, organizational culture, advances intechnology, and the rise of outsourcing. The individual challenges involve

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9matching people with the organization, treating employees ethically and engagingin socially responsible behavior, increasing individual productivity, decidingwhether to empower employees, taking steps to avoid brain drain, and dealingwith issues of job insecurity.1-10.A major complaint one often hears is that the human resource function stillremains as one of the weakest and less prestigious functions in manyorganizations, with the stereotype that it is a “paper shuffling” unit with littleimpact on the bottom line. Why do you think this is the case? What can theHR manager do to change this real or perceived state of affairs? Explain.Students can share their opinions on the importance of HR. Responsibility for theeffective use of human resources lies primarily with managers. The role of HRprofessionals is to act as internal consultants or experts, assisting managers to dotheir jobs better. The number of HR professionals has increased because of thegrowth and complexity of government regulations and a greater awareness thatHR issues are important to the achievement of business objectives.1-11.Some scholars believe that there is a set of “best” human resource practicesthat advanced companies should follow (see Figure 1.7), whereas othersbelieve that there is “no one best way” when it comes to HR practices andthat these should be adapted depending on organizational strategies,organizational characteristics, environment, and organizational capabilities(see Figure 1.3). Are these perspectives contradictory? Which of the twoperspectives makes the most sense to you? Explain.Answers will vary. Students can discuss whether there is one set of best practicesthat companies should follow. HR best practices are human resource programsthat effectively attract, retain and motivate employees. Students should refer to thepractices outlined in Figure 1.7.•Offer high employment security because this indicates that the firm iscommitted to the employee’s welfare•Develop a good selection program that can screen the best applicants•Offer wages that are highly competitive as this helps reduce employeeturnover and helps in the attraction of high-quality employees•Recognize employees by providing monetary and non-monetary rewards•Make employees part-owners of the firm by providing them with stock inthe firm•Communicate effectively with employees so that they are kept informed ofmajor issues confronting the organization and any major initiatives•Encourage employee involvement so that there is strong “buy-in” ofhuman resource practices and important managerial initiatives•Encourage teamwork so that employees are more willing to collaboratewith each other

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10•Invest in training programs to improve employee skills•Provide opportunities for learning at work so that employees are“stretched” in the use of their skills•Give a higher priority to internal candidates for promotion because thisenhances employee motivation by providing future career opportunities•Promote inclusion in workforce•Use data analyticsYou Manage It! 1: Emerging TrendsElectronic Monitoring to Make Sure That No One Steps Out of LineCritical Thinking Questions1-12.Do you think that it is feasible to boil down human behavior to numbers?What are the potential advantages and disadvantages of doing so? Explain.Student answers will vary but some advantages may include: a computer may seepatterns that humans may miss, and computers can handle much more pieces ofinformation than a human can. Disadvantages include: the systems are only asgood as the information they contain, so if the information is not accurate thenproblems will occur, and computers have no emotions or feelings and thus cannever completely replace the human factor.1-13.What do you think are the main reasons for the trend toward “managing bythe numbers,” as discussed in the case? Do you believe that this is happeningin many organizations, or is it an isolated phenomenon? Will this trend growin the future, or is it another passing fad? Explain.Student answers will vary. Students may note the trend toward quantifying“everything” in today’s world. The focus on numbers ranges from primaryeducation (standardized testing and No Child Left Behind) to the upper levels ofcorporate America (“Managing by the Numbers”). The phenomenon is definitelynot isolated and most likely stems from the need to standardize measurementacross many varied groups. However, it seems that using formulas and numericinputs to determine strategic direction and levels of employee performance mightundermine the utility of managers’ interpersonal skills and devalue them inorganizations.1-14.Is it possible to use quantitative assessments of the organization’s humanresources to better link human resource management to firm strategy?Explain.Student answers will vary. It is important to note in discussion of this topic thatthere is a very important qualitative component to managing people as well asfirm strategy. The human relations expertise normally attributed to HR is an

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11important resource in valuing employee contributions and expectations inorganizational life. By recognizing that no two employees (or people for thatmatter) are the same, organizations can improve retention and productivity.Team Exercise1-15.The class is divided into groups of five. Each team is to provide a list ofsuggestions as to how an organization can implement a numerical humanresource system, as dis- cussed in the case. The team should discuss whethersuch a system could be used to achieve a better fit between HR practices andorganizational strategies, the environment, organizational characteristics, andorganizational capabilities. Lastly, the team should discuss the extent to whichsuch a numerical system would clash with the “HR best practices” summarizedin Figure 1.7. Depending on class size and available class time, each team willbe asked to present the results of its deliberation, to be followed by open classdiscussion moderated by the instructor.Experiential Exercise: Team1-16.The class is divided into groups of five. Each team is to choose an organization(which could be a workplace for one or more team members; a hypotheticalfirm in an industry that is well-known to most people, such as a restaurant; afirm where relatives are employed; and the like). Each team is to provide a listof suggestions as to how the organization can implement a system to “quantifywhat employees do.” Then the team should discuss how this informationcouldbe used to improve efficiency. The team may also discuss potentialproblems that could arise in gathering that information and using it inpractice. The instructor may ask each team to make a formal presentation inclass, to be followed by open class discussion moderated by the instructor.Experiential Exercise: Individual1-17.Each student will interview a manager or an employee (who might be a familymember, a friend, or an acquaintance) to determine the extent to which theissues raised in the case are represented in his or her organization and whatsteps, if any, the firm has taken to make employees more productive. Theadvantages and disadvantages of such a plan may also be discussed.(Alternatively, if the student has substantial work experience he or she mayoffer his or her own views based on personal observation.) The instructor willmoderate open class discussion based on the findings brought to the class bystudents.You Manage It! 2: Ethics/Social ResponsibilityEmbedding Sustainability into HR Strategy

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12Critical Thinking Questions1-18. Would you like to work for a company that offers the sorts of programs thatare described in the case? Would this be an important enticement for you toaccept a job in such a company and remain employed there? Explain.Student answers will vary but some enticements may include: great companyculture, corporate social responsibility, garden space, and other perks reducingcarbon footprints.1-19. Some skeptics argue that most sustainability programs (such as the onesdiscussed above) represent an insincere attempt to create a positive companyimage at a low cost. Do you agree or disagree? Do you think these types ofprograms help or hurt the company’s bottom line? Explain.Student answers will vary. Students will need to show support for their decisionmaking.1-20. What role, if any, should HR professionals play in helping a companybecome a leader in sustainability efforts? What specific HR challenges is acompany likely to face as it tries to become socially responsible? Explain.HR’s role in helping a company reach sustainability should be integral. Hiring theright people will be crucial, particularly because this is not your typical culture. Itwill be very important that HR communicate with applicants extensively about theculture and the company’s expectations for their employees. Challenges mayinclude maintaining customer quality as new systems and policies areimplemented, a potential skill shortage in the service sector as the number of jobsin the company increases, and creating a stronger infrastructure to achieve thegoal.Team Exercise1-21.The class is divided into groups of five. Team membersare asked to describethe HR challenges firms are likelyto face when trying to implementsustainability programs. Specifically, considering the examples given above,the team should discuss the main HR issues that a company should take intoaccount when implementing these types of programs. For instance, someemployees may feel subtle pressures to participate in organic gardening evenif this is not something that they enjoy doing.Experiential Exercise: Team1-22.The class is divided into groups of five. Each team is asked to role-play agroup of employees charged with coming up with a list of HR suggestions tomake a hypothetical consumer- products company more environmentallyresponsible (such as, for instance, providing a bonus for energy savings).

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13Each team will have ten minutes to prepare the list. Depending on class sizeand available time, the team will present its suggestions to the entire class.The instructor (or another student) will play the role of the HR manager andquestion the team about the soundness of its recommendations. This will befollowed by open class discussion moderated by the instructor.Experiential Exercise: Individual1-23.Examine the Web pages of a sample of large firms (such as those listed byFortunein its annual rankings of “best companies to work for”) and see ifyou can identify a particular set of social responsibility programs thatinvolve HR policies. Try to draw some conclusions about the role played byHR, if any, in the implementation of those policies. Also, try to determine therationale that different companies use for the implementation of theseprograms.You Manage It! 3 DiscussionManagers and HR Professionals at Sands Corporation: Friends and Foes?Critical Thinking Questions1-24. What seems to be the main source of conflict between supervisors andthe HR department at Sands Corporation? Explain.The level of autonomy in decision-making appears to be a big problem for theSands Corporation.1-25. Do you believe that managers should be given more autonomy to makepersonnel decisions such as hiring, appraising, and compensatingsubordinates? If so, what are some potential drawbacks to grantingthem this authority? Explain.Discussion on this issue should focus around the expertise of the individualmaking the decision. Is it more important for the decision maker to be centralizedand making all hiring decisions for the firm, or be a coworker or direct report whounderstands the intricacies of the particular job and the unique expertise necessaryto perform the job function.1-26. How should Sands’ top executives deal with the complaints expressed bysupervisors? How should the director of the HR department deal with thesituation? Explain.Sands Corporation has many possibilities to address this situation, includingmediation, or a simple face-to-face meeting with central figures in thedisagreement. It is important that a uniform decision be reached that will beapplied in all future situations to ensure consistency.

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