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Solution Manual for Managing Human Resources, 9th Edition

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    M anaging Human Resources Ninth Edition Luis R. Gómez - Mejía Arizona State University David B. Balkin University of Colorado, Boulder Robert L . Cardy University of Texas at San Antonio Kenneth P. Carson Grove City College Resource Manual

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    Contents Chapter 1 Meeting Present and Emerging Strategic Human Resource Challenges ............ 1 Chapter 2 Managing Work Flows and Conducting Job Analysis ................................ ...... 1 8 Chapter 3 Understanding Equal Opportunity and the Legal Environment ....................... 3 5 Chapter 4 Managing Diversity ................................ ................................ .......................... 5 5 Chapt er 5 Recruiting and Selecting Employees ................................ ................................ 74 Chapter 6 Managing Employee Separations, Downsizing, and Outplacement ................ 88 Chapter 7 Appraising and Managing Performance ................................ ......................... 101 Chapte r 8 Training the Workforce ................................ ................................ .................. 118 Chapter 9 Developing Careers ................................ ................................ ......................... 13 2 Chapter 10 Managing Compensation ................................ ................................ .............. 144 Chapter 11 Rewarding Performance ................................ ................................ ............... 159 Chapter 12 Designing and Administering Benefits ................................ ......................... 178 Chapter 13 Developing Employee Relations ................................ ................................ .. 1 92 Chapter 14 Respecting Employee Rights and Managing Discipline .............................. 205 Chapter 15 Working with Organized Labor ................................ ................................ ... 2 21 Chapter 16 Managing Workplace Safety and Health ................................ ..................... 237 Chapter 17 International HRM Challenge ................................ ................................ ...... 25 1

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    1 Chapter 1 Meeting Present and Emerging Strategic Human Resource Challenges CHAPTER OVERVIEW This first chapter provides a broad overview of the strategic human resource challenges organizations face, and provides a framework to understand the role of human resource strategies, activities, and programs to achieve sustained competitive advantage. To support this broad perspective, some of the most important external and internal challenges vis-à-vis HR strategies are discussed in three categories: environmental challenges, organizational challenges, and individual challenges. The chapter explains the planning and implementation of strategic HR policies, as well as the role of line managers and the HR department in the effective use of human resources. Also explored here is how managers, in partnership with human resource professionals, adopt and implement HR strategies through specific strategies and programs. HR professionals are often responsible for designing these programs in order to meet business goals and employee needs. Although the line managers provide the necessary input during the program design phase, they are primarily responsible for carrying out or implementing such programs. This chapter provides a strong overview of how firms can use HR strategies and initiatives to deal with external and internal challenges, which are then explored in detail in later chapters. LEARNING OBJECTIVES After reading this chapter, students should be able to deal more effectively with the following challenges: 1.1 Describe the major challenges affecting HR. 1.2 Outline key steps in planning and implementing strategic HR policies. 1.3 Understand the various HR strategies that 1.4 companies use to increase firm performance. 1.5 Outline HR best practices. 1.6 Explain how to establish a close partnership between the HR department and managers. ANNOTATED OUTLINE LEARNING OBJECTIVE 1.1 Describe the major challenges affecting HR I. Human Resource Management: The Challenge Human resource challenges that face today’s managers may be categorized according to their primary focus: the environment, the organization, or the individual. Firms that deal with these challenges effectively are likely to outperform those that do not. Figure 1.1

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

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    3 Formulating HR strategies and establishing programs to implement them is strategic human resource planning. Successful HR strategic planning provides many benefits for the company, including (1) encouragement of proactive rather 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 HR constraints and opportunities, and (7) creation of common bonds. B. The Challenges of Strategic HR Planning In developing HR strategy, organizations face several important challenges, including (1) maintaining a competitive advantage, (2) reinforcing overall business strategy, (3) avoiding excessive concentration on day-to-day problems, (4) developing HR strategies suited to unique organizational features, (5) coping with the environment, (6) securing management commitment, (7) translating the strategic plan into action, (8) combining intended and emergent strategies, and (9) accommodating change. C. Strategic HR Choices Human resource strategies, which are implemented through HR activities and programs, may affect the performance of the business. The options that a firm has available in designing its HR system are its strategic HR choices. Some potential choices include work flows, staffing, employee separations, performance appraisal, training and career development, compensation, employee and labor relations, employee rights, and international management. Figure 1.2 LEARNING OBJECTIVE 1.3 Understand the various HR strategies that companies use to increase firm performance . III. Selecting HR Strategies to Increase Firm Performance No HR strategy is “good” or “bad” in and of itself. The success of HR strategies depends on the situation or context in which they are used. In other words, an HR strategy’s effect on firm performance is always dependent on how well it fits with some of the factors. Fit refers to the consistency or compatibility between HR strategies and other important aspects of the organization. Figure 1.3 A. Fit with Organizational Strategies Organizational strategies may be examined at two levels: corporate and business.

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    4 Corporate strategy refers to the mix of businesses a corporation decides to hold and the flow of resources among those businesses. This involves decisions pertaining to acquisition, divestment, diversification, and growth. At one end of the spectrum is the evolutionary business strategy; at the other end is the steady-state strategy. Business unit strategies refer to those established by firms or autonomous units of the corporation. Well-known business strategies were formulated by Porter (overall cost leadership strategy, differentiation business strategy, and focus strategy) and Miles and Snow (defender strategy and prospector strategy). Figure 1.4. B. Fit with the Environment HR strategies should help the organization better exploit environmental opportunities or cope with the unique environmental forces that affect it. The environment can be examined on four dimensions, including (1) degree of uncertainty, (2) volatility, (3) magnitude of change, and (4) complexity. Figure 1.5. C. Fit with Organizational Characteristics To be effective, HR strategies must be tailored to the organization’s personality. The features of an organization’s personality are its (1) the production process for converting inputs into output, (2) the firm’s market posture, (3) the firm’s overall managerial philosophy, (4) the firm’s organizational structure, and (5) the firm’s organizational culture. D. Fit with Organizational Capabilities An organization’s capabilities are its distinct competencies. HR strategies make a greater contribution to a firm’s performance to the extent they (1) help to exploit the firm’s specific advantages or strengths while avoiding its weaknesses, and (2) when they assist in better using its own unique blend of human resource skills and assets. E. Choosing Consistent and Appropriate HR Tactics to Implement HR Strategies Even the best-laid strategic HR plans may fail when specific HR programs are poorly chosen or implemented. A firm’s HR strategies must be mutually consistent. That is, HR strategies are more likely to be effective if they reinforce one another rather than work at cross-purposes. Figure 1.6 LEARNING OBJECTIVE 1.4

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    5 Outline HR best practices F. HR Best Practices There is much debate about whether high-performing HR practices create sustained high organizational performance or vice versa. Regardless of the debate, it is reasonable to state that organizations should consider implementing practices associated with the highest-performing firms. Figure 1.7 LEARNING OBJECTIVE 1.5 Explain how to establish a close partnership between the HR department and managers A. The HR Department and Managers: An Important Partnership All managers must effectively deal with human resource issues because these issues are at the core of being a good manager. Moreover, mutual partnerships must be formed among line managers and HR professionals in order to effectively and efficiently meet the employees’ and employer’s goals and needs. Specific steps a company can take to foster an effective partnership between managers and the HR department include: (1) analyze the people side of productivity, (2) view HR professionals as internal consultants, (3) instill a shared sense of common fate, (4) require some managerial experience, (5) actively involve top corporate and divisional managers, (6) require senior HR executives to participate. B. Specialization in Human Resource Management While the size of the typical HR department has been shrinking in recent years, the use of external HR consultants has increased considerably This may reflect the growth of government regulations and organizations recognizing the growing importance of HR issues. Many colleges and universities are now offering degrees in HR-related fields. The demand for HR professionals is expected to continue to grow in years to come. ANSWERS TO END-OF-CHAPTER DISCUSSION QUESTIONS 1-1. What do you see as the main advantages and disadvantages of Internet-based recruiting? Explain. Students answers will vary but some of the advantages include: it takes less time to review more applications and it broadens the recruiting pool because anyone with access to a computer and Internet can apply from anywhere in the world and HR only looks at candidates who fit the specific qualifications of the job. Some

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    6 disadvantages include: not everyone has access to the Internet so you may lose out on some applicants who do not have this resource; because the computer system is only looking for certain things, an organization may lose out on some good potential applicants because they may not meet the exact search criteria; and it can be costly. . 1-2. Roughly two generations ago many HR articles decried problems with performance appraisal. A common complaint was that managers did not devote sufficient time to conducting the appraisals and that biases were rampant. Another common complaint was that most managers gave high ratings to all employees and did not bother to properly differentiate and carefully document the performance evaluation of subordinates. Several old surveys reported that three quarters or more of employees hated performance appraisals and found them to be useless, increasing tension at work 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 this have for HR practices that presumably rely on an accurate assessment of employee performance (such as promotions and merit pay decisions)? Jobs have become more complicated in recent years and particularly since the economic recession, organizations have to do more with fewer resources. In light of this one explanation, it may be that it is harder to do quality performance appraisals than it used to be. The process may have improved but the jobs may have changed faster than appraisal systems could keep up with. The overall underlying problem may be that people do not like to give employees negative feedback, thus the appraisals they provide are less than accurate. This has numerous implications for HR practices because the policies and procedures (no matter how good they may be) are only as good as the people who apply them and whether they are applied fairly and consistently. 1-3. Go back to the Manager’s Notebook “How Harley-Davidson Is Taking Advantage of a Diverse Customer Base.” If you were a HR manager of a company such as Harley-Davidson, what human resource programs would you 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 is committed 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 employee turnover 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 in the firm • Communicate effectively with employees so that they are kept informed of major issues confronting the organization and any major initiatives • Encourage employee involvement so that there is strong “buy-in” of human resource practices and important managerial initiatives • Encourage teamwork so that employees are more willing to collaborate with 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 this enhances employee motivation by providing future career opportunities • Promote inclusion in workforce • Use data analytics 1-4. Of all the issues affecting HR practices discussed in this chapter, which three in your opinion are the most important ones? Justify your answer. Student answers will vary but their justifications should reference points covered in the text. Training programs are important issue because employees can improve their skills and advance in their careers. Likewise, providing opportunities for learning at work allows employees to grow in their jobs, feel more job satisfaction, and become more marketable. Offering competitive wages will serve to retain good employees and reduce turnover. 1-5. In your opinion, which of the environmental, organizational, and individual challenges identified in this chapter will be most important for human resource management in the twenty-first century? Which will be least important? Use your own experiences in your answer. Student answers will vary in response to this question but it is important to note that governmental regulation, the changing nature of the workforce (shorter-term employment is commonplace), and the globalization of business are all key areas to discuss. 1-6. Do you think it is fair for a company to discipline employees by charging higher fees for those who show evidence of “unhealthy life styles”? According to Dr. Kevin Volpp, director of the Center for Health Incentives and Behavioral Economics at the University of Pennsylvania, punitive surcharges and tough health targets may hurt those who need assistance the most. Do you agree? Explain. Student answers will vary in response to this question. These issues can become emotionally charged for some students. It is important to note that these sorts of

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    8 policies are legal for private firms. However, irrational students may feel these practices are not, so it is important to present the fact that there are a myriad of these types of policies in place. 1-7. 3M’s competitive business strategy is based on innovation. 3M requires that at least 25 percent of its annual sales come from products introduced over the previous five years, a goal it often exceeds. Specific HR programs adopted to implement this strategy include the creation of a special fund that allows employees 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 their own interests, is given credit for the creation of new products that management would not have thought of by itself. In addition, 3M’s appraisal process encourages risk taking. A senior manager at 3M says, “If you are threatened with dismissal after working on a project that fails, you will never try again.” What other types of HR policies might 3M institute to spur product innovation? Students can work in small groups and develop HR policies that might encourage innovation. The groups can share their ideas with the class. 1-8. Many believe that top managers care little about human resources compared to such areas as marketing, finance, production, and engineering. What might account for the perception, and what would you do to change it? Students can share their opinions with the class, while referring to the concepts presented in the chapter MyManagementLab Assisted-graded and Auto-graded Questions. 1-9. Outline a set of issues that are most likely to pose a major challenge to the management of human resources during the next few decades. Based on the materials learned in this chapter, explain why you have chosen each of these issues. Students can discuss which issues will pose a major challenge to HR managers and explain why they have chosen each issue. The major HR challenges fall into three categories: environmental challenges, organizational challenges, and individual challenges. The environmental challenges are rapid change, the rise of the Internet, workforce diversity, economic globalization, legislation, evolving work and family roles, skill shortages and the rise of the service sector, and catastrophic events as a result of natural disasters and terrorism. The organizational challenges are choosing a competitive position, decentralization, downsizing, organizational restructuring, the rise of self-managed work teams, the increased number of small businesses, organizational culture, advances in technology, and the rise of outsourcing. The individual challenges involve

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    9 matching people with the organization, treating employees ethically and engaging in socially responsible behavior, increasing individual productivity, deciding whether to empower employees, taking steps to avoid brain drain, and dealing with issues of job insecurity. 1-10. A major complaint one often hears is that the human resource function still remains as one of the weakest and less prestigious functions in many organizations, with the stereotype that it is a “paper shuffling” unit with little impact on the bottom line. Why do you think this is the case? What can the HR manager do to change this real or perceived state of affairs? Explain. Students can share their opinions on the importance of HR. Responsibility for the effective use of human resources lies primarily with managers. The role of HR professionals is to act as internal consultants or experts, assisting managers to do their jobs better. The number of HR professionals has increased because of the growth and complexity of government regulations and a greater awareness that HR issues are important to the achievement of business objectives. 1-11. Some scholars believe that there is a set of “best” human resource practices that advanced companies should follow (see Figure 1.7), whereas others believe that there is “no one best way” when it comes to HR practices and that 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 two perspectives makes the most sense to you? Explain. Answers will vary. Students can discuss whether there is one set of best practices that companies should follow. HR best practices are human resource programs that effectively attract, retain and motivate employees. Students should refer to the practices outlined in Figure 1.7. • Offer high employment security because this indicates that the firm is committed 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 employee turnover 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 in the firm • Communicate effectively with employees so that they are kept informed of major issues confronting the organization and any major initiatives • Encourage employee involvement so that there is strong “buy-in” of human resource practices and important managerial initiatives • Encourage teamwork so that employees are more willing to collaborate with 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 this enhances employee motivation by providing future career opportunities • Promote inclusion in workforce • Use data analytics You Manage It! 1: Emerging Trends Electronic Monitoring to Make Sure That No One Steps Out of Line Critical Thinking Questions 1-12. 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 see patterns that humans may miss, and computers can handle much more pieces of information than a human can. Disadvantages include: the systems are only as good as the information they contain, so if the information is not accurate then problems will occur, and computers have no emotions or feelings and thus can never completely replace the human factor. 1-13. What do you think are the main reasons for the trend toward “managing by the numbers,” as discussed in the case? Do you believe that this is happening in many organizations, or is it an isolated phenomenon? Will this trend grow in 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 primary education (standardized testing and No Child Left Behind) to the upper levels of corporate America (“Managing by the Numbers”). The phenomenon is definitely not isolated and most likely stems from the need to standardize measurement across many varied groups. However, it seems that using formulas and numeric inputs to determine strategic direction and levels of employee performance might undermine the utility of managers’ interpersonal skills and devalue them in organizations. 1-14. Is it possible to use quantitative assessments of the organization’s human resources to better link human resource management to firm strategy? Explain. Student answers will vary. It is important to note in discussion of this topic that there is a very important qualitative component to managing people as well as firm strategy. The human relations expertise normally attributed to HR is an

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    11 important resource in valuing employee contributions and expectations in organizational life. By recognizing that no two employees (or people for that matter) are the same, organizations can improve retention and productivity. Team Exercise 1-15. The class is divided into groups of five. Each team is to provide a list of suggestions as to how an organization can implement a numerical human resource system, as dis- cussed in the case. The team should discuss whether such a system could be used to achieve a better fit between HR practices and organizational strategies, the environment, organizational characteristics, and organizational capabilities. Lastly, the team should discuss the extent to which such a numerical system would clash with the “HR best practices” summarized in Figure 1.7. Depending on class size and available class time, each team will be asked to present the results of its deliberation, to be followed by open class discussion moderated by the instructor. Experiential Exercise: Team 1-16. 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 hypothetical firm in an industry that is well-known to most people, such as a restaurant; a firm where relatives are employed; and the like). Each team is to provide a list of suggestions as to how the organization can implement a system to “quantify what employees do.” Then the team should discuss how this information could be used to improve efficiency. The team may also discuss potential problems that could arise in gathering that information and using it in practice. The instructor may ask each team to make a formal presentation in class, to be followed by open class discussion moderated by the instructor. Experiential Exercise: Individual 1-17. Each student will interview a manager or an employee (who might be a family member, a friend, or an acquaintance) to determine the extent to which the issues raised in the case are represented in his or her organization and what steps, if any, the firm has taken to make employees more productive. The advantages and disadvantages of such a plan may also be discussed. (Alternatively, if the student has substantial work experience he or she may offer his or her own views based on personal observation.) The instructor will moderate open class discussion based on the findings brought to the class by students. You Manage It! 2: Ethics/Social Responsibility Embedding Sustainability into HR Strategy

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    12 Critical Thinking Questions 1-18. Would you like to work for a company that offers the sorts of programs that are described in the case? Would this be an important enticement for you to accept a job in such a company and remain employed there? Explain. Student answers will vary but some enticements may include: great company culture, corporate social responsibility, garden space, and other perks reducing carbon footprints. 1-19. Some skeptics argue that most sustainability programs (such as the ones discussed above) represent an insincere attempt to create a positive company image at a low cost. Do you agree or disagree? Do you think these types of programs help or hurt the company’s bottom line? Explain. Student answers will vary. Students will need to show support for their decision making. 1-20. What role, if any, should HR professionals play in helping a company become a leader in sustainability efforts? What specific HR challenges is a company likely to face as it tries to become socially responsible? Explain. HR’s role in helping a company reach sustainability should be integral. Hiring the right people will be crucial, particularly because this is not your typical culture. It will be very important that HR communicate with applicants extensively about the culture and the company’s expectations for their employees. Challenges may include maintaining customer quality as new systems and policies are implemented, a potential skill shortage in the service sector as the number of jobs in the company increases, and creating a stronger infrastructure to achieve the goal. Team Exercise 1-21 . The class is divided into groups of five. Team members are asked to describe the HR challenges firms are likely to face when trying to implement sustainability programs. Specifically, considering the examples given above, the team should discuss the main HR issues that a company should take into account when implementing these types of programs. For instance, some employees may feel subtle pressures to participate in organic gardening even if this is not something that they enjoy doing. Experiential Exercise: Team 1-22. The class is divided into groups of five. Each team is asked to role-play a group of employees charged with coming up with a list of HR suggestions to make a hypothetical consumer- products company more environmentally responsible (such as, for instance, providing a bonus for energy savings).

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    13 Each team will have ten minutes to prepare the list. Depending on class size and 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 and question the team about the soundness of its recommendations. This will be followed by open class discussion moderated by the instructor. Experiential Exercise: Individual 1-23 . Examine the Web pages of a sample of large firms (such as those listed by Fortune in its annual rankings of “best companies to work for”) and see if you can identify a particular set of social responsibility programs that involve HR policies. Try to draw some conclusions about the role played by HR, if any, in the implementation of those policies. Also, try to determine the rationale that different companies use for the implementation of these programs. You Manage It! 3 Discussion Managers and HR Professionals at Sands Corporation: Friends and Foes? Critical Thinking Questions 1-24. What seems to be the main source of conflict between supervisors and the HR department at Sands Corporation? Explain. The level of autonomy in decision-making appears to be a big problem for the Sands Corporation. 1-25. Do you believe that managers should be given more autonomy to make personnel decisions such as hiring, appraising, and compensating subordinates? If so, what are some potential drawbacks to granting them this authority? Explain. Discussion on this issue should focus around the expertise of the individual making the decision. Is it more important for the decision maker to be centralized and making all hiring decisions for the firm, or be a coworker or direct report who understands the intricacies of the particular job and the unique expertise necessary to perform the job function. 1-26. How should Sands’ top executives deal with the complaints expressed by supervisors? How should the director of the HR department deal with the situation? Explain. Sands Corporation has many possibilities to address this situation, including mediation, or a simple face-to-face meeting with central figures in the disagreement. It is important that a uniform decision be reached that will be applied in all future situations to ensure consistency.

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