Chapter 15

1. Chapter 15 WORKING WITH EMPLOYEES

2. “Management Talk” “What makes us stand out is our heritage as a cooperative and commitment to providing a great work environment. While we work hard to create a challenging and enjoyable work environment, it takes great people to be a best company.” • Wally Smith, REI, President and CEO

3. Objectives • Understand the methods that organizations use to select employees • Explain the difference between a transfer, promotion, and separation • Identify different methods of training employees • Understand the methods that organizations use to measure performance • Explain the process of Management By Objectives • Understand the importance of rewarding employees

4. Understanding Management REI (Recreational Equipment Inc.) has repeatedly been named to Fortune magazine’s list of “100 best companies to work for in America.” The outdoors and sporting goods retailer has earned this distinction by offering employees a unique set of benefits, including flexible health, life, and disability insurance plans, an employee profit-sharing plan, and a “challenge grant” program that encourages employees to test REI products on wilderness adventures.

5. Management Skills • Why would employee enthusiasm be important to a company like REI? • If you were publishing a list of the 10 best companies to work for in your town, what things would you take into consideration?

6. Sec. 15.1: Meeting Personnel Needs • What kind of experiences have you had applying for jobs?

7. What You’ll Learn • How companies use methods such as interviewing and testing to select employees • How the human resources department handles employees leaving positions • What training techniques companies develop to teach new concepts

8. Why is this important? A successful manager must develop effective processes to select, train, and maintain employees”

9. How Companies Select Employees Human Resources (HR) • A department that recruits employees, manages training and compensation, and plans for future personnel HR Functions • Advertise positions, select from applicants, fill positions • Develop employee plan in respect to company goals and business environment • Create a Job Description • Written statement identifying the type of work and necessary qualifications for a job • Sets the standards against which applicants can be rated Online Source: www.workforceinfo.state.il.us (Career Click)

10. How Companies Select Employees • THINGS LISTED ON A JOB DESCRIPTION: • Essential job functions • Knowledge and critical skills • Physical demands • Environmental factors • Any information that may be necessary to clarify job duties or responsibilities SAMPLE: Title: Receptionist Duties and responsibilities: Receives and directs phone calls, greets visitors, receives and sorts mail and packages, orders office and kitchen supplies, key documents when required Qualifications: High school graduate. Needs good communication skills and ability to get along with people. Keying speed of 45 words per minute. Experience desirable but not necessary. Salary: $20,000- $25,000, depending on experience

11. Alternatives to Adding Staff Freelancers * Interns * Temporary Workers

12. Freelancers • Provide services to business by hourly basis or by the job • Used when full time employment is not needed • Examples: Bookkeepers, accountants, lawyers, graphic designers, window display artists, advertising copywriters, and photographers

13. Interns • Students, who will work for little or no pay in order to gain experience in a particular field • Found in community, local colleges, and high schools

14. Temporary Workers • Can be used for long periods of time as an alternative to full time hiring • Paid a workers salary plus a fee to the agency who supplies the worker • Ex: Seasonal, substitute for injured or sick workers on leave

15. How Companies Recruit Employees College Placement Centers Classified Ads Get the readers attention Stimulate the reader’s interest Present a solid specific fact End ad with a call to action Most college and universities have them Collect info on career and employment opportunities Make them available to students or graduates No fee is charged Ask college to make you business listed at their placement center Find employees for businesses and other institutions Try to match people with jobs their looking for to the right business Charge a fee when they are successful Employment Agencies

16. How Companies Recruit Employees Referrals World Wide Web Often businesses except referrals from reliable sources on a good applicant for a job their offering On the world wide web mostly all companies use their business web sites to post job availability and have online applications Also businesses can mention their location for people to apply Online Job Search Databases Post Classified Ads and Resumes www.monster.com www.careerpath.com www.careerbuilder.com

17. The Selection Process Standard Selection Procedures • Preliminary screening • HR Department will sort out hundreds of letters and resumes in response to one classified ad • I.E. – Southwest Airlines receives 129,000 resumes and hires approximately 3,411 people every two years • Applicant pool is narrowed and input from team members is given • Check applicant’s references and credentials • Call for an interview

18. The Selection Process Standard Selection Procedures • Testing • Used to differentiate applicants with similar credentials • Provides a uniform evaluation of the qualifications of a prospective employee • Predictive Index (PI) • 10-minute personality test is used for effectively hiring and working with employees • Identifies an individual’s strengths and weaknesses • Over 3,000 companies use it (IKEA, Budget Rent-A-Car, colleges, professional sports teams) • Validity and Reliability of Test • Factors relevant to the job • Group of people taking test under similar circumstances get similar results • Remove the element of chance

19. The Selection Process Common Employment Tests

20. The Selection Process Standard Selection Procedures • Employment interview • Allow the employer to learn more about the applicant than can be conveyed in a resume or cover letter • Preparing for an Interview • Setting aside space - Privacy • Putting the applicant at ease – Small talk, Refreshment, Interviewer should be outgoing trained in interviewing skills • Taking control over the interview – take notes to record important points, encourage applicant to talk, but control the direction of discussion

21. The Selection Process Standard Selection Procedures • Employment interview • Structured Interview • Prepare a list of questions when interviewing many applications for one position • Provides uniform information for each applicant • Remind the applicant to cover each question • Where do you want to be in five years? • What are your strengths in working with others? • Unstructured Interview • A conversation between employer and applicant in a relaxed environment • Ask open-ended questions • Why did you leave your previous job? • Tell me about yourself • Applicant has the opportunity to ask questions about the organization • Not always reliable interviews • Pertinent questions may not be covered and bias is a possibility

22. The Selection Process Standard Selection Procedures • Employment interview • First Impressions on personal attributes can be taken into consideration • Halo Effect • Single characteristic dominates the interviewer’s impression of the applicant • (I.E.) - Pleasant Personality dominates the perception of the applicant and other concerns are overlooked • Doesn’t indicate if the candidate is qualified • Applicant with a pleasant personality in an interview is common

23. The Selection Process Standard Selection Procedures • Personal judgment • Choosing which individual gets the job • Employer must make a value judgment as to which applicant would be most successful • Follow the selection procedures for effective decision • What if no applicants are qualified? • Offer a higher salary or better benefits to attract more applicants • Re-advertise in a different newspaper or Web site

24. Legal Considerations in Selection The Wrong Questions Due to federal law, certain questions cannot be asked of job candidates. Questions to avoid when interviewing candidates include: • Age (may ask if they are older than a certain age if it is a requirement to of the job [i.e.-school bus driver, forklift operator] • Date of birth • Religion or church affiliation • Father's surname or mother's maiden name • Marital status • What languages they speak (unless it is a job requirement) • How many children they have, their children's ages and who will care for the children while applicant is working • Financial information not related to compensation • If they served in the military of any foreign country • If they have ever been arrested? (may ask if they have been convicted of a felony/misdemeanor)

25. Legal Considerations in Selection Griggs v. Duke Power Company • African American employees at a power-generating plan objected to the requirement of a high-school diploma or passing an intelligence test as conditions of employment in or transfer to jobs at the plant • Court decided if a test negatively impacts female or minority group applicants, then company must prove validity and prevalence to job requirements • Even if a company does not mean to discriminate, if may unintentionally select an unfair test Findlaw.com source: GRIGGS v. DUKE POWER CO., 401 U.S. 424 (1971)

26. Legal Considerations in Selection Albemarle Paper Company v. Moody • North Carolina paper mill was seeking the reversal of a Court of Appeals decision that eliminated its testing program and awarded back pay to a group of African American employees • Managers argued that in addition to creating diversity programs, they had statistical proof that their testing was job-related • Lower court noted that they had made efforts to deal with segregation • Supreme Court agreed with Court of Appeals that the intentions of the company were not the main issue • It held that it was not enough to show that the best workers did well on the tests, or that a testing program improved the overall quality of the work force. • Any tests had to be specifically related to performing the job in question. Findlaw.com source: ALBEMARLE PAPER CO. v. MOODY, 422 U.S. 405 (1975)

27. Transfers, Promotions, and Separations HR Department must account for employees leaving positions, as well as new employees being hired Transfers • Moves an employee into another position within the company • Generally maintains the same level of responsibility and pay • Employee can learn different functions within organization

28. Transfers, Promotions, and Separations Promotions • Moving to a position of greater responsibility with higher status and pay • Merit-based and encourage performance • Considerations: • Merit, seniority, or length of service • Performance in current job • How they will adapt to new job (aptitudes and interest) • Peter Principle– possible for employees to be promoted until they reach a level at which they can no longer perform • Employee has “risen to her level of incompetence” • Will gain a mediocre employee and lose a competent one through inappropriate promotion

29. Transfers, Promotions, and Separations Separations - Final way in which an employee leaves a position • Voluntary – employee resigns • Exit Interview – pinpoints reasons why an employee is leaving • Involuntary – employee is laid-off or terminated • Layoffs – there is not enough work for all employees • Result of downsizing to increase efficiency • Employee can be called back • Termination – employee is asked to leave because of poor performance or failure to follow company rules • Failures from previous actions of training, counseling, and/or disciplinary action • Last result • Possible reassignment to a less stressful job will eliminate the waste of company resources and time invested in hiring and training that individual

30. Training Employees • A way for employees to learn new concepts, gain new skills, or update existing ones • Training can be to entire organization if a new way of operating a business function is implemented (I.E. - District 211 Online Gradebook) • Provide meaningful training • Positive reinforcement • Feedback regarding progress • Encourage learning by setting standards and measuring performance • Outback Steakhouse, the Australian-themed franchise • Monthly video conference meetings to all kitchen staff • Forum to discuss cooking and menus • Serving techniques to food handling

31. Training Employees On-the-Job Training • Employee works and trains under close supervision until he or she understands the task and performs it correctly Job Rotation • Cross-Training: a form of on-the-job training that exposes employees to several jobs within an organization • Perform each job for a fixed period • Allows employee to master many skills

32. Training Employees Vestibule Training • Training area is set up with equipment similar to that used in the actual job • Employees learn and practice in a simulated work environment • Used to train cashiers, bank tellers, clerks, and technicians • Creating training area can be expensive • Can the employee adapt to working in the “real” environment, with all its pressures, when training end?

33. Training Employees Apprenticeship Training • Time-tested form of on-the-job training • Experienced worker (mentor) passes on skills to an assistant • Skilled occupations • Carpentry • Mechanics • Physicians

34. Training Employees Classroom Training • Presents general information about the organization, rules, safety, and job concepts in a classroom setting • Lectures, Q & R, Open Discussion • Allows for information to be shared with large groups at low cost • 2-hour Bus Driving Re-fresher Courses (Mandatory)

35. Training Employees Computer-based Training • Internet Training in the classroom or on an individual basis, contributes to employee development at a low cost • View material at computer workstations and answer questions at their own pace • Electronic learning will grow to approx. $23.7 billion by this year (Source: International Data Corporation)

36. Percentage of Organizations Using Various Methods for Employee Training Source: Adapted by B. Filipczak, “What Employers Teach,” Training 29, no. 10 (1992) p. 46. 1992 Lakewood Publications, Minneapolis, MN.

37. Extension Activity!!! • Have students interview personnel directors (at the school or in a business) about what types of interviews they conduct and what general traits they look for in new hires. • Have students use the Internet to research and compare career tests

38. 15. 1: Chapter Summary • The employee selection procedure includes screening, testing, and interviewing • Employees may leave a position through transfers, promotions, or separations • Methods of employee training include on-the-job training, vestibule training, apprenticeship, classroom training, and computer-based training

39. Sec. 15.2: Rewarding Performance • What types of rewards will you work for and why? • Predict what are the most effective rewards and what their importance is in the business world.

40. What You’ll Learn • Four different methods of evaluation employee performance • Why is it important to provide feedback to employees • How to connect a reward system to performance evaluation Why is this Important? “Reward systems are developed to maintain employee motivation. It is necessary to evaluate performance and provide feedback to produce positive results.”

41. How is Performance Measured? • Rewarding employees motivates them to do their best • Employers must show appreciation to retain qualified employees • America West Airlines • Offers employees a $50 bonus for every month in which the company ranks in the top three major airlines in either on-time performance or lack of customer complaints • Performance Assessments • Identify problem areas and guides employee’s future efforts

42. How is Performance Measured? • Performance measures: • An employee’s degree of accomplishment and results in job-related tasks • Effort that an employee exerts on the job • Role perception: • Employee must understand his or her part in an organization

43. How is Performance Measured? Management By Objectives (MBO) • Process often used in quality improvement and goal setting for the whole organization as well as performance appraisal • Empowers employees by involving them in personal goal setting • Establishes well-defined job objectives • Develops an action plan • Allows employees to implement the action plan • Evaluates achieved performance-based objectives • Takes necessary corrective action • Establishes new objectives for the future

44. How is Performance Measured? Management By Objectives (MBO) • Should be clear and straightforward • Challenging and incentives for improvement • Manager and employee should agree on objectives that are fair and realistic Sample Objectives • To answer all customer complaints in writing within three days of receipt of complaint • To reduce order-processing time by two days within the next six months • To implement the new computerized accounts receivable system by August 1 How do these sample objectives meet that standard?

45. How is Performance Measured? Production Standards • Used when something can be counted or measured • Set an expected level of output • Employees compare their production with this standard

46. How is Performance Measured? Essay Appraisal • Manager describes the employee’s performance in a written narrative • A form which includes questions such as: • Describe, in your own words, this employee’s performance • What are his or her strengths and weaknesses? • Writing Skills are necessary • May be subjective and difficult to defend against accusations of unfairness

47. How is Performance Measured? Critical-Incident Appraisal • Manager records specific situations that reflect the employee’s performance, behavior, and attitudes on the job • Used as a basis for appraisal and feedback • Produces large volume of material and recording is time-consuming • Problems of subjectivity based on the likeability of the employee by the supervisor

48. Providing Feedback Managers must explain results to employees, especially if there is negative feedback The Successful Appraisal Interview The following factors contribute to the success of the appraisal interview: • Employee involvement • Recognition and praise • Manager and employee work together to set improvement goals • Discussion of problems • Avoidance of heavy criticism • Encourage the employee to voice opinions • Opportunity for employee to prepare for interview • Perception that good performance will be rewarded How could these factors help to achieve the goal of motivating an employee to improve?

49. Legal Considerations Title VII of the Civil Rights Act • Requires that an organization’s performance appraisal system be “bona fide.” • System can’t have disproportionately negative effects upon minorities, women, or older employees • An appraisal system that is fair and legal should: • Be based on Job Descriptions • Emphasize performance rather than personal traits • Communicate appraisal results to employees • Allow employee response • Train mangers in conducting proper evaluation • Ensure that appraisals are written and documentation is retained • Be consistent

50. Organizational Reward System Intrinsic Rewards • Intangible and internal to the individual Extrinsic Rewards • Controlled and distributed by the organization • Child Day Care • Basketball Courts • Weekly softball games • Fitness Center