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Body of Knowledge HR Business Professional Module 1: HR Administration Module 2: Recruitment and Selection Module 3: Employee Relations and Communications Module 4: Compensation and Benefits Module 5: Training and Development Module 6: Health, Safety and Security

Universal HR Practices Body of Knowledge

Body of Knowledge The foundation of the Universal HR Practices materials is a Body of Knowledge representing the most recent study of the HR profession expressed as behaviors, skills and knowledge required to fulfill human resource management responsibilities that are universal and transcend global boundaries. The Body of Knowledge on which the Universal HR Practices Learning System is based has six competency domains. For each domain, there are behaviors, skills and knowledge identified. This learning aid includes all six domains of the Body of Knowledge so that you may readily identify behaviors, skills or knowledge presented within all portions of the Learning System. For your convenience, the Body of Knowledge is provided on the following pages.

Module 1: HR Administration Purpose Statement for HR Administration: HR professionals in the area of HR Administration should possess a combination of behaviors and skills/knowledge that include monitoring activities for opportunities to make improvements and using metrics to measure success, providing and maintaining information related to the HR function. This information may take the form of questions from employees, documentation of employee information in paper forms or in a Human Resource Information System.

Universal HR Practices Body of Knowledge

Important Behaviors for HR Administration: 01. Use HR metrics and prepare reports to analyze HR issues (for example, the number of employees hired and those who left, employee turnover, the cost per employee and budgets) 02. Format and maintain organization charts 03. Maintain, file and process HR forms (for example, notices, announcements, new hire forms and salary forms) 04. Make sure the organization follows legal and industry regulations 05. Maintain human resource information systems (HRIS) data and employee files (for example, make sure data is updated and correct) 06. Stay updated on new business trends 07. Answer or refer questions from employees as the first level of support 08. Work with external providers of HR services (for example, external recruiters, training providers, benefit providers) 09. Monitor projects and suggest improvements (for example, ways to recruit better applicants; resources for internal and external training; ways to improve insurance, benefits, or compensation plans) 10. Assist managers in updating standard job descriptions in order to match any changes in job requirements

Important Knowledge and Skills for HR Administration: 01. Skills for planning and organizing (time management techniques) 02. Change management concepts including terms and factors, resistance to change and communication techniques (but not including the implementation process) 03. Documentation requirements for employees and their employment 2

Universal HR Practices Body of Knowledge

04. Management of HR documents (for example, managing files, scheduling for records retention) 05. Communication skills, both verbal and written 06. Human resources information systems (HRIS) for managing employee information 07. Employment best practices (for example, the best ways to recruit, select and retain employees) 08. Organizational policies and procedures 09. HR ethics and professional standards 10. Confidentiality and privacy rules that apply to employee records, company data and individual data 11. Tools and methods to analyze business data (for example, spreadsheets and databases) 12. Ways to report information (for example, presentation software, such as Power Point; and word-processing software, such as Microsoft Word) 13. Different ways to classify employees(for example, workers who are full time, part time, temporary, or those who receive payment by the day) 14. The number of employees in the budget, and the salary and benefit costs for these employees

Universal HR Practices Body of Knowledge

Module 2: Recruitment and Selection Purpose Statement for Recruitment and Selection: HR professionals in recruitment and selection should possess a combination of behaviors and skills/knowledge that relate to the full process of finding potential employees through preparation for the new hire’s arrival. These include managing the job requisition process, providing information on possible jobs to individuals and groups, managing the interview process and coordinating the final selection of the employee.

Important Behaviors for Recruiting and Selecting Employees: 01. Manage the process to request jobs (for example, make sure requisitions are approved , get approval for the number of positions to be filled, monitor open positions) 02. Support managers in developing job descriptions and keep records of job requirements 03. Provide contact between recruiters and hiring managers (for example, prepare job listings, share appropriate information with the hiring manager and recruiter) 04. Announce job openings within the organization 05. Identify ways to find new hires (for example, advertisements and web sites) 06. Choose a group of potential applicants for managers to interview (for example, read resumes and conduct phone interviews) 07. Scheduling interviews with managers and applicants 08. Answer questions from job applicants 09. Interview job candidates 10. Promote the organization to potential applicants (for example, attend job or career fairs, recruit at colleges and universities) 4

Universal HR Practices Body of Knowledge

11. Organize assessments of applicants (for example, schedule and score assessments, share results) 12. Coordinate the final selection process (for example, schedule interviews with managers, check references) 13. Coordinate the employment offer (for example, start date, salary, benefits) 14. Prepare for the new hire’s arrival (for example, get identification documents and required forms, set up email address) 15. Manage database of applicants (for example, track the sources of applicants and the results of the recruiting and selection process, decide where to store information about candidates for possible future employment) 16. Report recruiting metrics (for example, the number of applications received, the number of candidates interviewed, the number of applicants hired) 17. Coordinate orientations for new employees (for example, discuss the company’s expectations for the position, review the employee handbook, explain the benefit plans)

Important Knowledge and Skills for Recruiting and Selecting Employees: 01. How government requirements affect recruitment and selection 02. Job functions and responsibilities in the organization and industry 03. Recruitment methods (for example, advertising , job fairs and outsourcing) 04. Procedures to review applications and watch applicants’ progress, including tracking systems 05. Procedures to check references 06. Assessments or evaluations of applicants 07. Procedures to conduct assessments or evaluations

Universal HR Practices Body of Knowledge

08. Tools for selecting candidates 09. Options for recruitment 10. Interviewing techniques 11. Recruiting process (job announcement, initial applicant review, interviews, assessments, selection, job offer and orientation) 12. Processes for transferring or promoting employees within the organization 13. Diversity and inclusion (for example, diversity of demographics, culture and location)

Module 3: Employee Relations and Communication Purpose Statement for Employee Relations and Communication: HR professionals in employee relations and communication should possess a combination of behaviors and skills/knowledge that include promoting HR policies and procedures and communicating with employees through individual approaches, such as exit interviews, and group approaches, such as a company web site or a rewards program.

Important Behaviors for Employee Relations and Communication: 01. Communicate information to the company about HR policies and procedures (for example, announcements about organizational changes such as structure, safety and security, or legal requirements) 02. Support company sponsored activities and awards to encourage a positive work environment (for example, employee appreciation and rewards, company social gatherings, sports teams or clubs)

Universal HR Practices Body of Knowledge

03. Collect information about employees’ work experiences by conducting final exit interviews before employees leave the organization, and conduct surveys about employee attitudes, work conditions, or diversity issues 04. Complete the assigned tasks when an employee leaves the organization due to voluntary or involuntary terminations 05. Respond to employee’s questions or concerns about workplace issues (for example, employment concerns, company HR policies, complaints, retirement questions, payments) 06. Enforce HR policies and procedures (for example, explain and make sure that employees comply with the employee handbook) 07. Maintain regular communication with employees (for example, through newsletters, or the company website)

Important Knowledge and Skills for Employee Relations and Communication: 01. How to encourage and keep employees (employee engagement techniques) 02. Methods and processes for collecting employee feedback (for example, employee attitude surveys or final exit interviews before leaving the organization) 03. Effects of employment and labor law (for example, minimum wage, rules for terminating employees, establishing unions or work councils, people with disabilities and rules against discrimination) 04. How to handle conflicts (for example, addressing the problems of individual employees and knowing when to involve senior staff) 05. Issues affecting work/life balance (for example, flexibility of hours, telecommuting) 06. Issues of behavior in the workplace (for example, absences, discipline, workplace violence, or harassment)

Universal HR Practices Body of Knowledge

07. Methods for investigating complaints or grievances 08. Methods for increasing disciplinary action needed for work-related behavior, including procedures for ending employment 09. Event planning

Module 4: Compensation and Benefits Purpose Statement for Compensation and Benefits: HR professionals in compensation and benefits should possess a combination of behaviors and skills/knowledge that include providing information about compensation and benefits to employees and about policies associated with time off/leaves. They also include developing and providing the information associated with salaries in the form of salary surveys and merit increases and/or bonus payments.

Important Behaviors for Compensation and Benefits: 01. Communicate information about an employee’s compensation package, when required 02. Communicate information about company benefits 03. Record information about employees in HR database (for benefits or tax purposes) 04. Provide information about payment to employees for working hours and non-working hours (for example, not working because of illness or vacation) 05. Administer salary adjustments 06. Track eligibility for time off and temporary leaves (for example, maternity, mourning, unpaid leave) 07. Explain policies and procedures for taking time off and requesting leaves of absence

Universal HR Practices Body of Knowledge

08. Coordinate activities to support employee programs (for example, programs to improve health, tuition reimbursement or educational assistance) 09. Coordinate the completion of salary surveys from external organizations 10. Report the results of current research and available information about salaries 11. Provide data for merit increases or bonus payments

Important Knowledge and Skills for Compensation and Benefits: 01. Total compensation packages 02. Benefit programs (for example, health care plans and flexible benefits) 03. Retirement plans and programs 04. Salary surveys 05. Effects of laws and regulations on compensation and benefits 06. Company-wide compensation policies (for example, wage agreements with unions or work councils, employee categories and salary increases) 07. Contracts with service and product providers (for example, health insurance and pension plans) 08. Bonus and incentive programs 09. Payroll processes 10. Leave and time-off allowances

Universal HR Practices Body of Knowledge

Module 5: Training and Development Purpose Statement for Training and Development: HR professionals in training and development should possess a combination of behaviors and skills/knowledge that include developing and delivering basic training programs and collecting information about training programs, such as training needs, employee participation, and evaluation of programs. They also include monitoring completion of the performance review process and the preparation of development plans.

Important Behaviors for Training and Development: 01. Develop basic training programs (for example, safety regulations, emergency preparedness, presentation skills and time management skills) 02. Train employees for basic programs (for example, safety regulations, emergency preparedness, presentation skills and time management skills) 03. Collect and analyze evaluations of training programs (for example, review evaluation forms, contact trainees or supervisors after the training and ask how effective the training was) 04. Coordinate and monitor training activities (for example, cross training, re-training, scheduling, setting up the classroom and completion of required training) 05. Collect information, analyze needs and make recommendations for training and future development programs 06. Monitor completion of performance reviews and development plans 07. Keep records to document employee development and performance

Universal HR Practices Body of Knowledge

Important Knowledge and Skills for Training and Development: 01. Different training and learning methods (for example, e-learning, blended learning, seminars and mentoring) 02. How to give feedback on job performance 03. Organizational culture (for example, the organization’s vision, mission, values, history, processes and guidelines) 04. Policies and techniques for evaluating performance 05. Opportunities for training and development 06. Procedures for evaluating trainings 07. Training policies 08. Training needs assessment 09. Individual development plans 10. Performance management methods (for example, setting goals, benchmarking, 360-degree feedback, performance incentives) 11. Training skills for basic programs 12. How to organize meetings (for example, writing agendas, inviting attendees, scheduling and setting up rooms) 13. Career paths (for example, concepts such as opportunities for job promotion, how employees can grow within an organization)

Universal HR Practices Body of Knowledge

Module 6: Health, Safety and Security Purpose Statement for Health, Safety and Security: HR professionals in the area of health, safety, and security should possess a combination of behaviors and skills/knowledge that focus on promoting a safe work environment, encouraging employee participation in health and wellness programs and documenting events that relate to employee well-being. These events may include injuries or crimes or the return to work after a long absence.

Important Behaviors for Health, Safety and Security: 01. Encourage employees to participate in health and wellness programs (for example, exercise programs, health tests, vaccinations, vision tests) 02. Track reports about injuries and crimes (for example, accidents, theft, vandalism) 03. Process claims from employees (for example, workers’ compensation, short-term or longterm disability benefits and social security or social insurance) 04. Complete tasks for employees who are returning to work after a long absence (for example, after giving birth, after an injury, returning with medical issues) 05. Promote a safe work environment

Important Knowledge and Skills for Health, Safety and Security: 01. Effects of laws and regulations about health and safety 02. Policies and programs for paying workers who take a leave of absence (for example, medical leave, maternity leave, injury leave, or leave due to a death in the family) 03. Safety risks in the workplace (for example, violence, use of drugs and alcohol, small spaces, dangerous materials, fires, emergencies)

Universal HR Practices Body of Knowledge

04. Security risks in the workplace (for example, data or materials theft, equipment theft, damage or destruction) 05. Health and safety practices (for example, emergency evacuation procedures, ergonomic evaluations, safety-related behaviors) 06. Policies and procedures for investigating issues of health, safety or security 07. Programs to improve employee health and well-being

Module 1: HR Administration Module 1: HR Administration .................................................................................................... iii Acknowledgements ................................................................................................................... vii Module 1 Body of Knowledge ................................................................................................. viii Purpose Statement .............................................................................................................................. viii Body of Knowledge ........................................................................................................................... viii

Section 1.1: Strategic HR Management and Business Trends ...................................................1 Introduction ..................................................................................................................................4 The Evolving Role of the Human Resource Professional ............................................................5 A Historical Perspective of Human Resources ..................................................................................... 5 HR Today: An Expanded Role ............................................................................................................. 6

Elements for HR Success ...........................................................................................................10 Competency Areas .............................................................................................................................. 12 Core Bodies of Knowledge ................................................................................................................. 13 Core Behaviors.................................................................................................................................... 13 Proficiency Standards and Career Levels ........................................................................................... 13 Time Management and the Organization ............................................................................................ 17

Strategic HR Management .........................................................................................................22 Stakeholders ........................................................................................................................................ 22 Strategic Planning Process .................................................................................................................. 23 Strategy Formulation .......................................................................................................................... 26 Strategy Development ......................................................................................................................... 28 Strategy Implementation ..................................................................................................................... 43 Strategy Evaluation ............................................................................................................................. 44 Financial Measures ............................................................................................................................. 47 Nonfinancial Measures ....................................................................................................................... 48 The Balanced Scorecard...................................................................................................................... 48

Organizational Structure ............................................................................................................51 Functional Structure ............................................................................................................................ 52

Product Structure ................................................................................................................................ 52 Geographic Structure .......................................................................................................................... 53 Front-Back Structure ........................................................................................................................... 54 Matrix Structure .................................................................................................................................. 54

HR Trends ..................................................................................................................................56 Globalization ....................................................................................................................................... 58 Staffing................................................................................................................................................ 59 Compensation and Benefits ................................................................................................................ 61 Human Resource Measurement and Metrics ...................................................................................... 64 Employee Engagement ....................................................................................................................... 65 Training and Development.................................................................................................................. 66

Keeping Current on Business Trends .........................................................................................72 Technology for Today’s HR Professional ..................................................................................74 Monitoring the Technological Front ................................................................................................... 74 Human Resource Information Systems ............................................................................................... 77 Knowledge Management Systems ...................................................................................................... 82

Section 1.2: Gathering, Measuring and Reporting HR Data ...................................................86 Introduction ................................................................................................................................87 Understanding Research Terms and Techniques .......................................................................88 Inductive and Deductive Reasoning ................................................................................................... 88 Primary and Secondary Research ....................................................................................................... 90 Experimental Research Process .......................................................................................................... 91 Quantitative and Qualitative Data Analyses ....................................................................................... 93 Reliability and Validity ..................................................................................................................... 108

Human Resource Management and Evaluation Metrics ..........................................................110 Initial Considerations ........................................................................................................................ 110 Frequently Used HR Metrics ............................................................................................................ 111

Budgeted Headcount ................................................................................................................113 Strengths and Weaknesses of the Headcount Method ...................................................................... 114

Evaluating HR’s Strategic Contributions .................................................................................114 Financial Measures ........................................................................................................................... 115 Performance Measures ...................................................................................................................... 120

Trend Analysis .................................................................................................................................. 123

Reporting Methods ...................................................................................................................125 Section 1.3: Workforce Planning and Employment Strategies .............................................128 Introduction ..............................................................................................................................129 Workforce Planning .................................................................................................................129 Benefits of Workforce Planning ....................................................................................................... 131 Role of HR in Workforce Planning................................................................................................... 131 Four-Step Process for Workforce Planning ...................................................................................... 131

Job Analysis .............................................................................................................................134 Job Analysis Benefits ........................................................................................................................ 136 Writing Job Descriptions and Specifications .................................................................................... 136

Recruitment and Selection .......................................................................................................142 Employment Procedures ..........................................................................................................142 Staffing Options to Consider............................................................................................................. 143 Employment Contracts, Records and Documentation ...................................................................... 147

Section 1.4: Change Management and Business Process Improvement for HR Professionals156 Introduction ..............................................................................................................................157 Change Management ................................................................................................................157 Managing Change ............................................................................................................................. 157 Change Process Theory..................................................................................................................... 158 Managing Change in Organizations .................................................................................................. 159 HR’s Key Role in Managing Change ............................................................................................... 162 Change Drivers ................................................................................................................................. 163

Project Management .................................................................................................................167 Common Project Characteristics ....................................................................................................... 168 Common Project Phases and Roles ................................................................................................... 169 Project Planning Tools ...................................................................................................................... 170 Project Success.................................................................................................................................. 172

Quality Improvement Methods and Analysis ...........................................................................173 Quality Standards .............................................................................................................................. 173 Quality Improvement Theories and Methods ................................................................................... 174

Data Gathering and Analysis Methods ............................................................................................. 178 Benchmarking ................................................................................................................................... 182

Section 1.5: Organizational Policies, Procedures and Regulations .......................................188 Introduction ..............................................................................................................................189 The Influence of Law on the Organization ....................................................................................... 189 Jurisdiction ........................................................................................................................................ 193

Legal Areas Monitored by HR .................................................................................................193 Laws of Employment ........................................................................................................................ 195 Compensation and Benefit Laws ...................................................................................................... 196 Occupational Health and Safety ........................................................................................................ 196 Anti-Discrimination, Harassment and Fair Work Laws ................................................................... 197 Exploring the Legal and Regulatory Issues for Your Organization .................................................. 197 Considerations Involving Legal and Regulatory Environments ....................................................... 198

HR Ethics and Professional Standards .....................................................................................205 HR’s Role in Promoting Organizational Ethics ................................................................................ 205 Corporate Social Responsibility (CSR) ............................................................................................ 212

Policies, Procedures and Work Rules ......................................................................................219 HR Responsibilities for Workplace Policies, Procedures and Work Rules ...................................... 219

Confidentiality and Privacy Regulations ..................................................................................222 Privacy Protection ............................................................................................................................. 222 Developing Employee Privacy Programs ......................................................................................... 224

Bibliography ...............................................................................................................................227 Index ............................................................................................................................................232

Acknowledgements SHRM acknowledges its volunteer leaders for their valuable contributions to the Universal HR Practices Learning System: Lead Subject Matter Expert Diane M. Dowlin, SPHR, GPHR, CCP, GBA, CMS, CEBS International Human Resources Director, FIS Jacksonville, Florida Subject Matter Experts Mohamed Boraei, MBA HRIS & Project Manager, Qatar Foundation Doha, Qatar

Timo Michel, HRMP HR Business Partner, HR International Deutschland, Germany

Brad Boyson, MSHRM, SPHR, GPHR, HRMP Executive Director, SHRM MEA Dubai, United Arab Emirates

Rachel Park Program Manager, Global Talent Acquisition, Mastercard Worldwide Singapore, Singapore

Cigdem Ozdemir Evren, MBA, HRBP HR Generalist, FNSS Defense Systems Ankara, Turkey

Patchara Popaitoon Researcher/Teacher/Lecturer, School of Management University of Bath Claverton Down, Bath, United Kingdom

Arturo Gaitán Nicholls Human Resource Analyst, Bancolombia Bogota, Colombia Nancy Kaysarly, PHR OED Advisor, International Management Consulting Company Cairo, Egypt Sameer Khanna, GPHR, HRMP Vice President and Head HR – Region India, Ericsson India Pvt. Ltd. New Delhi, India

Aparna Rajesh, MBA, GPHR HR Manager, Lafarge Dubai, United Arab Emirates Howard A. Wallack, MA, MSc, GPHR Vice President, Global Business Development (acting), Society for Human Resource Management Alexandria, Virginia

Module 1: HR Administration

Module 1 Body of Knowledge For your convenience, the Body of Knowledge for Module 1: HR Administration is provided on the following pages.

Purpose Statement Purpose Statement for HR Administration: HR professionals in the area of HR Administration should possess a combination of behaviors and skills/knowledge that include monitoring activities for opportunities to make improvements and using metrics to measure success, providing and maintaining information related to the HR function. This information may take the form of questions from employees, documentation of employee information in paper forms or in a Human Resource Information System.

Body of Knowledge Below are lists of the behaviors and skills and knowledge required for mastery of content related to Module 1: HR Administration. Important behaviors for HR administration: 1.

Use HR metrics and prepare reports to analyze HR issues (for example, the number of employees hired and those who left, employee turnover, the cost per employee and budgets)

Format and maintain organization charts

Maintain, file and process HR forms (for example, notices, announcements, new hire forms and salary forms)

Make sure the organization follows legal and industry regulations

viii

Module 1: HR Administration

Maintain human resource information systems (HRIS) data and employee files (for example, make sure data is updated and correct)

Stay updated on new business trends

Answer or refer questions from employees as the first level of support

Work with external providers of HR services (for example, external recruiters, training providers, benefit providers)

Monitor projects and suggest improvements (for example, ways to recruit better applicants; resources for internal and external training; ways to improve insurance, benefits, or compensation plans)

10. Assist managers in updating standard job descriptions in order to match any changes in job requirements Important knowledge and skills for HR administration: 01. Skills for planning and organizing (time management techniques) 02. Change management concepts including terms and factors, resistance to change and communication techniques (but not including the implementation process) 03. Documentation requirements for employees and their employment 04. Management of HR documents (for example, managing files, scheduling for records retention) 05. Communication skills, both verbal and written 06. Human resources information systems (HRIS) for managing employee information 07. Employment best practices (for example, the best ways to recruit, select and retain employees) 08. Organizational policies and procedures © 2012 SHRM

Module 1: HR Administration

09. HR ethics and professional standards 10. Confidentiality and privacy rules that apply to employee records, company data and individual data 11. Tools and methods to analyze business data (for example, spreadsheets and databases) 12. Ways to report information (for example, presentation software, such as Power Point; and word-processing software, such as Microsoft Word) 13. Different ways to classify employees(for example, workers who are full time, part time, temporary, or those who receive payment by the day) 14. The number of employees in the budget, and the salary and benefit costs for these employees

Module 1: HR Administration

1.1: Strategic HR Management and Business Trends This section covers the following information from the Body of Knowledge: Behaviors: 02. Format and maintain organization charts 05. Maintain human resource information systems (HRIS) data and employee files (for example, make sure data is updated and correct) 06. Stay updated on new business trends 08. Work with external providers of HR services (for example, external recruiters, training providers, benefit providers) Skills & Knowledge: 01. Skills for planning and organizing (time management techniques) 05. Communication skills, both oral and written 06. Human resource information systems (HRIS) for managing employee information

Section 1.1: Strategic HR Management and Business Trends Introduction ....................................................................................................................................4 The Evolving Role of the Human Resource Professional ...........................................................5 A Historical Perspective of Human Resources ............................................................................5 HR Today: An Expanded Role.....................................................................................................6 Elements for HR Success .............................................................................................................10 Competency Areas .....................................................................................................................12 Core Bodies of Knowledge ........................................................................................................13 Core Behaviors ...........................................................................................................................13 Proficiency Standards and Career Levels ...................................................................................13 Time Management and the Organization ...................................................................................17 Strategic HR Management ..........................................................................................................22 Stakeholders ...............................................................................................................................22 Strategic Planning Process .........................................................................................................23 Strategy Formulation ..................................................................................................................26 Strategy Development ................................................................................................................28 Strategy Implementation ............................................................................................................43 Strategy Evaluation ....................................................................................................................44 Financial Measures .....................................................................................................................47 Nonfinancial Measures ...............................................................................................................48 The Balanced Scorecard .............................................................................................................48 Organizational Structure ............................................................................................................51 Functional Structure ...................................................................................................................52 Product Structure ........................................................................................................................52

Geographic Structure ..................................................................................................................53 Front-Back Structure ..................................................................................................................54 Matrix Structure .........................................................................................................................54 HR Trends ....................................................................................................................................56 Globalization ..............................................................................................................................58 Staffing .......................................................................................................................................59 Compensation and Benefits ........................................................................................................61 Human Resource Measurement and Metrics..............................................................................64 Employee Engagement ...............................................................................................................65 Training and Development .........................................................................................................66 Keeping Current on Business Trends ........................................................................................72 Technology for Today’s HR Professional ..................................................................................74 Monitoring the Technological Front ..........................................................................................74 Human Resource Information Systems ......................................................................................77 Knowledge Management Systems .............................................................................................82

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Introduction Human resource management (HRM) is an organization’s design of formal systems that ensures the effective and efficient use of human talent to accomplish organizational goals. HRM is an essential function for organizations to remain competitive and to fulfill their organizational missions. Although the focus of human resources (HR) is the development of human capital, the significance of HR’s contributions is now more apparent. HR’s traditional function—to provide advice, service and control to other areas of the organization—has expanded and developed a more global, strategic character. This section examines the following topics: 

The evolution of the human resource profession into an essential function of organizations worldwide

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Major success factors for today’s HR professional

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Organizational structures

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Current HR and technology trends and how they impact HR roles and responsibilities

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

The Evolving Role of the Human Resource Professional The role of the HR professional is evolving in ways that are significant but not yet completely defined. How can HR professionals adapt as their traditional role changes and expands? According to HRM experts, the following transitions are necessary (Bates 2002): 

Move beyond the basics of HR knowledge and develop a greater understanding and awareness of business functions and costs.



Be ready to develop new skills and take on new responsibilities as previous HR administrative tasks are outsourced and automated.

Figure 1-1. Facing the Future of HR

A Historical Perspective of Human Resources In fulfilling their organizational responsibilities, HR staff has typically provided three types of support: service, control and advice. The relative importance of these three support types varies based on the organization.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Service HR is a service-oriented function with a diverse customer base. This customer base includes upper management, line management, employees, peers, departments, legal and regulatory agencies, vendors, applicants, retirees and families of employees. An example of HR’s service role is answering employee questions concerning benefit packages. Control Control involves reviewing and measuring employee performances to monitor how well they meet the goals and needs of the organization. Controls are used to evaluate supervisory and employee performance, to correct deficiencies and to motivate employees. An example of HR’s control function is designing a new performance appraisal system. Advice HR professionals advise and assist line managers. This process involved gathering facts, diagnosing problems, providing solutions and offering objective assistance and guidance on employee-related problems. An example is providing a line manager with specific policy and procedure steps for dealing with employee grievances. Rather than managing the situation personally, the HR professional gives responsibility to the line managers and provides the assistance they need to increase productivity and work satisfaction.

HR Today: An Expanded Role Many HR professionals still fulfill the roles of service, control and advice. However, the scope of those roles in many organizations now has a stronger strategic focus. HR professionals today often balance the following three major responsibilities, listed here and shown in Figure 1-2: 

Strategic



Operational



Administrative

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Figure 1-2. HR’s Current Expanded Role Strategic HR’s strategic role requires a long-term and forward-thinking focus. HR professionals can help the organization create the right culture and build the right structure. Strategic HR activities include the following: 

Help the organization prepare for change



Forecast needs for specialized skills and knowledge that will be required to achieve strategic goals



Manage talent

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Restructure the organization



Develop performance management systems that support strategic objectives

To fulfill HR’s strategic role, HR professionals must understand each of the following elements: 

The organization’s business and the environment in which it operates



Notable competition



Trends and events that could influence the organization’s success

HR professionals must establish business partnerships with senior management and with essential figures in other functions within the organization.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Operational The operational role of HR involves both the development and deployment of HR policies to ensure successful implementation of HR strategy (which was set at the strategic level). By fulfilling its operational role, HR supports the attainment of organizational objectives and goals. The development of HR policies includes activities such as recruiting for current job openings, resolving employee complaints and communicating with employees. For example, part of the organization‘s strategy could involve building a globally based and culturally diverse workforce. HR could use nontraditional sources for recruitment and could require specific job skills such as proficiency in other languages. HR professionals could also increase employee engagement by the following two actions: 

Help employees develop better communication skills and channels.



Develop and carry out employee involvement strategies.

In the deployment of HR policies, line managers are usually the people who apply these policies in their local management. Therefore, at the operational level, HR professionals need to work closely with the line managers to effectively deliver HR practices to the employee. The HR practices deployed to employees should be consistent with the organization’s intended policies; this approach allows employees to attain sufficient knowledge, skills and abilities to perform their roles. Perhaps more importantly, effective deployment of HR practices can strongly motivate employees to support the goals of the organization. Administrative Administrative responsibilities are treated as less important to allow HR professionals to focus on the expanding roles that contribute more directly to the organization’s financial goals. HR’s administrative role focuses on dealing with compliance issues and record keeping. Human resource information systems (HRIS) can help with this role. HRIS applications manage HR data, such as employee records, and create © 2012 SHRM

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

compliance reports. These responsibilities are made easier by technology. For example, many employees keep their own information up-to-date by using selfservice computer stations. Human resource information systems are discussed in more detail later in this section. Some administrative functions are not considered core HR functions and are outsourced to third-party providers, which are used in place of doing the work internally. Examples of outsourced functions include the following: 

Administration. Outsourced functions include benefits plan administration, payroll administration and background checks.

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Recruiting. Vendors such as staffing agencies are used to source, screen and recommend potential employees for placement.

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Health care. Medical examinations are outsourced to third-party providers rather than retaining professional medical staff within the organization.

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Training. Third-party providers develop and deliver training programs.

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Compensation. Organizations outsource salary and benefits surveys to third-party providers.

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Legal. Organizations hire attorneys as outside counsel rather than retaining attorneys on staff.

Depending on the business process used in the organization, HR staff may complete some or all of the following tasks when working with third-party providers: 

Prepare requests for proposals (RFPs).



Solicit bids to provide services.

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Review the responses.

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Select the providers.

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Manage the relationship.

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Ensure performance by establishing metrics.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Elements for HR Success As part of a multi-year effort, the Society for Human Resource Management has developed a competency model for the human resource management professional. These efforts began by forming the HR Thought Leadership Initiative. Members of this initiative identified the key competencies needed by all HR professionals regardless of enterprise and role. The HR Thought Leadership Initiative’s findings have guided the development of the Elements for HR Success competency model. Figure 1-3 illustrates the Elements for HR Success model. To develop this model, SHRM researchers reviewed different competency models, conducted over 100 focus groups with HR professionals in 29 cities around the world, and surveyed 640 Chief Human Resource Officers. The content of the resulting model was validated in a 2012 survey of over 32,000 HR professionals. Survey respondents encompassed numerous career levels and worked in organizations located around the world. Continuing efforts by the Society of Human Resource Management will focus on: 

Establishing links between proficiency in these competencies and outcomes including self, peer and supervisor ratings of employee performance, HR unit performance, and organizational effectiveness.



Developing competency-based tools for building and maintaining proficiency

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Figure 1-3. Society for Human Resource Management’s Elements for HR Success Model (Society for Human Resource Management, SHRM’s HR Competency Model Initiative 2012)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Competency Areas The Elements for HR Success model contains the following nine competency areas (see Figure 1-3): 1. Human Resource Technical Expertise and Practice: the ability to apply the principles and practices of HRM to contribute to the organization’s success 2. Relationship Management: the ability to manage interactions to provide service and support the organization’s success 3. Consultation: the art of providing expert advice to organizational stakeholders in a variety of circumstances 4. Organizational Leadership and Navigation: the ability to direct initiatives and processes with agility and to gain buy-in from stakeholders 5. Communication: the ability to create a free exchange of information among stakeholders at all levels of the organization to produce desired outcomes 6. Global and Cultural Effectiveness: the art of managing human resources within and across borders and cultures 7. Ethical Practice: the integration of core values, integrity, and accountability with all organizational and business practices 8. Critical Evaluation: skill in interpreting information to determine return on investment and the organizational impact of decisions and recommendations 9. Business Acumen: the ability to understand business functions and metrics in both the organization and the industry

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Core Bodies of Knowledge The Society for Human Resource Management’s research indicates that success is a function of what you know and the behaviors you engage in to apply your knowledge. In the Elements for HR Success model, your knowledge is based upon your mastery of the following six core bodies of knowledge which make up your HR technical expertise and practice (see Figure 1-3): 

Business management and strategy



Workforce planning and employment



Human resource development



Compensation and benefits



Employee and labor relations



Risk management

Core Behaviors However, success does not rely solely on what you know. It also depends on how you act to apply your knowledge. The core behaviors performed by successful HR professionals range from relationship management to business acumen. These behaviors, represented in the behavior circle (that is, horseshoe), are critical behaviors used by HR professionals to apply their knowledge to business situations. The importance of these competencies to individual HR professionals will vary among organizations and role, but it may also vary according to an individual’s career level.

Proficiency Standards and Career Levels SHRM has identified competencies and defined behaviors for each of these nine areas. In addition, specific proficiency standards have been associated with four career levels: 

Entry: typically less than two years in the profession; usually a specialist in a support function, such as recruiting or benefits



Mid: typically three to seven years in the profession; often managing projects; usually a generalist or tenured specialist

Module 1: HR Administration



Section 1.1: Strategic HR Management and Business Trends

Senior: typically eight to fourteen years; often holding a formal title such as director or principal



Executive: typically fifteen years or more in the profession; usually holding the top HR role in the organization

In terms of strategic HR management, executive-level HR defines strategy, senior-level HR creates action plans to implement that strategy, mid-level HR implements action plans, and entry-level HR gathers and reports metrics related to strategic outcomes. Figure 1-4 illustrates the way in which proficiency standards vary for the same competency area. This list illustrates how one proficiency standard per competency may evolve as one matures in one’s HR career. For each competency, there are approximately 15-20 proficiency standards per level.

Entry

Mid

Senior

Executive

Human Resource Technical Expertise and Practice Employs standard

Applies policies and

Ensures the delivery

Ensures alignment of

operating procedures

procedures across the

of high-quality HR

HR policies and

and policies when

organization

processes

procedures with

performing HR

organizational values

transactions

and goals

Figure 1-4. Example Career Level Proficiency Standards by Competency Area (continued to next page)

Module 1: HR Administration

Entry

Section 1.1: Strategic HR Management and Business Trends

Mid

Senior

Executive

Relationship Management Refers potentially

Mediates difficult

Creates conflict

difficult interactions to

interactions, escalating

employee relations or

resolution strategies

manager

when warranted

other interactions as a

and processes

neutral party

throughout the organization

Consultation Provides pertinent

Identifies threats to

Offers business

Identifies

facts and information

business and

solutions in a

opportunities to

to mid and senior-

recommends effective

proactive manner

provide HR and

level HR leaders

solutions

business solutions that maximize return on investment for the organization

Organizational Leadership and Navigation Listens actively to

Demonstrates

Leads project plans for

Works with other

identify challenges

flexibility and

timely completion

executives to design,

and solutions

adaptability

maintain, and champion the mission, vision, and strategy of the organization

Figure 1-4. Example Career Level Proficiency Standards by Competency Area (continued to next page)

Module 1: HR Administration

Entry

Section 1.1: Strategic HR Management and Business Trends

Mid

Senior

Executive

Communication Produces accurate,

Delivers well-

Solicits feedback and

Crafts messages to be

error-free

organized, impactful

buy-in on HR

delivered to

communication

presentations

initiatives from

stakeholders on high-

stakeholders

visibility issues

Global and Cultural Effectiveness Possesses general

Implements and audits

Develops expert

Uses global economic

knowledge of local

organizational/HR

knowledge of global

outlook to determine

cultural issues

practices to ensure

economic trends and

impact on the

global/cultural

best practices

organization’s human

sensitivity

capital strategy Ethical Practice

Demonstrates

Establishes oneself as

Establishes HR team

Challenges other

accountability for

a credible resource for

as a credible and

executives and senior

actions

employee and

trustworthy resource

leaders when potential

management issues

within the

conflicts of interest

organization

arise

Figure 1-4. Example Career Level Proficiency Standards by Competency Area (continued to next page)

Module 1: HR Administration

Entry

Section 1.1: Strategic HR Management and Business Trends

Mid

Senior

Executive

Critical Evaluation Gathers facts and

Maintains working

Maintains advanced

Maintains expert

analyzes data

knowledge of metrics,

knowledge in use of

data collection,

data, evidence-based

statistics, and analysis

research, benchmarks,

and metrics to make

critical decisions

Business Acumen Demonstrates basic

Maintains functional

Maintains advanced

Benchmarks the

knowledge of business

knowledge of

knowledge of key

competition and other

lines and

organizational

industry and

relevant comparison

products/services

business units

organization metrics

groups

Figure 1-4. Example Career Level Proficiency Standards by Competency Area (concluded)

Time Management and the Organization The evolving role of the HR professional includes knowledge of time management techniques. Successful time management is based on consistently applying a few techniques to how we approach work. Remember, you can control your own time. Some of the techniques are listed below: 

Have a good planning system and use it.



Take on realistic goals and schedule accurately.



Do not over-commit.



Define priorities to decide between urgent and important tasks.



Build in some flexibility to deal with the unexpected.



Do not procrastinate. Manage your time every day.



Define and use periods of quality time in your schedule.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends



Learn to say No in a professional manner.



Stay away from perfectionism and aim for excellence.



Build in time for personal development.

Ways to Manage Your Time Effectively

Figure 1-5. Quote by Kenneth Patton Planning is the most important activity in managing your time effectively. It is best to plan at the end of the preceding day or at the beginning of the new day. Here are other ways you can manage your time effectively: 

Manage and control interruptions.



Combine routine tasks and separate routine tasks from your high-priority tasks.



Break any large task or project into smaller pieces.



Work on priority or routine tasks during that time of day that matches your work habit preferences.



Handle each piece of paper or document only once if at all possible. Respond to it, file it or discard it.



Delegate to others if appropriate and possible.



Reserve uninterrupted blocks of time for difficult and lengthy projects. During this time, refrain from meetings, e-mails and phone calls.



Throughout the day review your objectives for that day and update or reprioritize.

Module 1: HR Administration



Section 1.1: Strategic HR Management and Business Trends

Give yourself a break or several breaks during the day. Get up and stretch; leave your desk for lunch. Getting away even for a few minutes from your work will help you return alert and refreshed.



Most importantly, maintain your work/life balance. Put family and other social activities on your daily and weekly lists. Avoid the habit of ignoring these constantly for work.

There are ways in which we all waste time. Some are beyond our control, but many are within our control. These are the ones we need to work on. Two of the biggest challenges for managing time are also two that can easily be controlled: 1. Unnecessary and unproductive meetings 2. E-mails Preventing Unnecessary and Unproductive Meetings

To prevent unproductive meetings, first determine if the meeting is really necessary. Figure 1-6 outlines when it makes sense to have a meeting and when it makes sense not to have a meeting. Reasons to have a meeting

Reasons NOT to have a meeting

Attendees can collaborate,

You can more effectively accomplish your

review, evaluate, discuss,

purpose by telephone, memo, report, e-mail or

problem solve and decide with

one-on-one discussion.

each other. Attendees can present

It is premature to meet. The subject is too

significant information.

uncertain or too insignificant to justify a meeting.

Figure 1-6. Reasons to Have or Not to Have a Meeting (continued to next page)

Module 1: HR Administration

Reasons to have a meeting

Section 1.1: Strategic HR Management and Business Trends

Reasons NOT to have a meeting

The meeting allows you to take

The group needs a cooling-off period. There may

action.

be too much anger or hostility among members.

The group can do something

You can consider having one day each week when

together that you can’t do better

no meetings are held.

alone. Figure 1-6. Reasons to Have or Not to Have a Meeting (concluded) Effective Meetings

There is one crucial key to effective meetings: make an agenda, and follow it. The agenda drives the content and outcomes of the meeting and, where appropriate, should reflect the needs of all attendees, so everyone has an interest in the outcomes. Here are some tips for fostering productive meetings: 

Start on time.



Always make and follow an agenda. With each agenda item, include the following:



The topic stated in question form



The person responsible for leading the discussion



The information relative to the issue



The time allotted for that issue



The action/reason/purpose of the exchange *Helpful Tip: Include with the agenda a not-on-agenda list of topics that are off limits for this meeting. Indicate when these items may be expected to appear on a future agenda.



Avoid attending your subordinates' meetings unless specifically invited to discuss a topic, and limit your time attending to the discussion of that topic.



Limit presentations to ten minutes.



Avoid having a meeting lasting over ninety minutes.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Managing E-mail

E-mail can take away two to three hours of productive time at the workplace. To help manage your time on e-mail, check e-mails only at specified times during the day, unless you are waiting for an urgent message. When you have planned to devote a block of time to work on a project, do not interrupt it by checking e-mails. Here are some other ways to better manage your e-mail: 

Create folders to sort and save appropriate e-mails.



Touch each e-mail just once, just as for paper documents. Decide whether to delete, save, respond to later, save for reference or retention or respond to immediately.



Keep e-mails short—no more than one to ten sentences. Communicate the main point in the first or second sentence.



After two rounds of trying to solve a problem via e-mail, use the phone or talk in person.



If you can’t respond immediately, let the other party know when you can respond to avoid repeat messages.



Remove yourself from as many distribution lists as possible.



Use filters or rules to eliminate or to assign junk e-mails to a special folder.



Use “No response required” to end messages and to discourage unnecessary replies.



If people are sending you messages or jokes that you do not need and want, ask them politely to stop.



Use the subject line for the entire message or use shortcuts to convey a quick message

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Strategic HR Management Stakeholders A stakeholder is a person, group or organization that has a direct or indirect interest in the organization (for example, owners, investors, employees, suppliers or the community). An organization’s value impacts the organization’s stakeholders. The stakeholders perceive that value in distinctive ways. HR professionals should be familiar with the stakeholder concept as described below. The stakeholder concept proposes that any organization operates within a complex environment. This environment affects and is affected by various forces or stakeholders, who all share in the organization’s values and activities. The needs of the different groups can make business objectives more complex. R. Edward Freeman proposed the stakeholder concept in the mid-1980s as an alternative to the shareholder perception. The shareholder concept believes that the goal of a business is to create as much wealth as possible. This wealth is returned to the shareholders in the business. The managers’ goals should be to maximize profit, both in the short term and long term. The stakeholder concept recognizes the different types of value an organization creates (Freeman, Harrison and Wicks, Managing for Stakeholders: Survival, Reputation, and Success 2007). Figure 1-7 illustrates the stakeholder concept.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Figure 1-7. Stakeholder Concept

Strategic Planning Process After identifying its stakeholders, the organization can proceed with strategic planning. Strategic planning is the process of positioning the organization for the future. The future can be eighteen months, three years, five years or even longer. The strategic planning process consists of four stages that an organization goes through to generate its strategic plan. Shown in Figure 1-8, the process is a cycle: a strategy is developed, implemented and evaluated. Then a new or modified strategy is formulated based on the evaluation.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Figure 1-8. Strategic Planning Process Figure 1-9 shows what happens during each stage of the strategic planning process.

Planning Stage Formulation

Description 

Define the company’s vision, mission and value statements.



Specify the core strategy.



Establish strategic goals.



Develop short- and long-term objectives from the strategic

Development

goals. 

Perform a strengths, weaknesses, opportunities and threats (SWOT) analysis.



Align internal systems and develop functional supporting strategies.

Figure 1-9. Stages of the Strategic Planning Process (continued to next page)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Planning Stage Implementation

Description 

Create specific action plans.



Allocate budgets and resources to support objectives.



Make plans to communicate to employees.



On a regular basis, review external and internal factors for

Evaluation

changes. 

Review progress toward achieving strategic objectives and measurable outcomes.



Take corrective action.

Figure 1-9. Stages of the Strategic Planning Process (concluded)

Strategic planning in an organization is complicated by a number of factors, including the following: 

Difficulty in gathering information in a timely fashion from all regions within the organization



Difficulty involving personnel from all regions in planning sessions



Multiple operating environments, each of which includes diverse economic, political, legal and cultural forces



Different levels of risk and tolerance for risk



Different technology platforms

A crucial step is to involve all the right people in the strategic planning process. If stakeholders feel they are ignored or uninformed, then implementing the strategy will be difficult, if not impossible. HR plays a unique organizational role, which can impact whether people feel connected to or disconnected from the company’s overall strategy.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

The strategic planning process involves people at different levels. 

Strategic planning team. The strategic planning team is usually a small, high-level team. This team reviews and revises the organization’s message at crucial stages.



Setting strategic goals, objectives and budgets. The strategy is divided into goals, objectives and contributing factors. The strategic core team can expand to a much larger group of people to reflect a global composition. The budgets approved by headquarters should reflect the priorities and activities in the strategy.



Development of functional strategies. If the organization’s operations are geographically dispersed, include a representative sample of HR professionals from local operations for successful involvement.



Communicating and motivating employees about the organization’s strategy. Communicating about strategy requires a systematic process to ensure that people know where the organization is going and what their role is. Employees also need to be committed and motivated to help the organization achieve its goals.

Each of the four steps in the strategic planning process is discussed in greater detail.

Strategy Formulation Strategy formulation is the first stage of the strategic planning process. This stage includes the following actions: 

Define the organization’s vision, mission and value statements.



Specify the core strategy.



Establish strategic goals.

The complete strategic plan comes from the organization’s mission and strategic goals. The mission statement expresses the organization’s essential purpose and value. Some global organizations choose to develop separate mission statements

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

for their subsidiaries to reflect the characteristic values and terminology of the local cultures. The mission statement defines the course for the organization. The strategic goals start moving the organization and its people in the intended direction. Strategic goals are turned into short-term and long-term objectives for each value-adding activity and must be measurable.

Figure 1-10. Sample Mission (used with permission) The organization’s strategy must be clearly communicated to the entire organization. David Collis and Michael Rukstad provide an example of a strategic goals chart (Collis and Rukstad 2008). A clear statement of strategy should communicate the following to the entire organization: 

The strategy’s desired endpoints



The time frame for reaching the endpoints



The scope or boundaries of the organization’s activities (for example, regional, business model or enterprise focus)



The competitive advantage the organization will leverage to reach its goals

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Strategy Development Strategy development is the second stage of the strategic planning process. This stage includes the following actions: 

Develop short- and long-term objectives from the strategic goals.



Perform a SWOT analysis.



Align internal systems and develop functional supporting strategies.

This stage must address different organization issues, such as the following: 

Organizational competency refers to how an organization develops and uses its core business capabilities to differentiate itself. Examples include research and development, technology, customer relations and distribution.



Market refers to how an organization positions its products and services. Two frequently stated market strategies are being a low-cost provider and creating the most value for customers. Some organizations choose to serve a broad customer base; other organizations choose to serve a specific niche, market segment or location. These choices have specific implications for HR programs.



Competition refers to how an organization responds to a competitive threat. Will it compete aggressively or avoid direct conflict? Will it try to eliminate competitors by acquisition or cooperate through alliance and joint ventures?

The competitive strategy may be based on extensive analysis, such as that introduced by Michael Porter in Competitive Strategy (Porter 1980). Growth and market entry strategy refers to the decision to expand an organization’s presence. This strategy requires analyzing the tactical options available for market entry or growth. Figure 1-11 lists some of the more common tactics. (In this context, tactics refers to the implementation of strategy.) Many of these tactics are low risk for market entry, and each tactic has its strengths and weaknesses. Decisions about which tactic to pursue depend on timing, desired control, strategic importance, risk management and financial incentives. Human

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

resources will be deeply involved in preparing and implementing the chosen tactic. Therefore, HR professionals should be prepared to play a role in early discussions of these options.

Market Entry/

Description

Growth Tactics Strategic alliances

Strategic alliances include a number of organizations loosely or tightly joined for a variety of purposes, including manufacturing, marketing, distribution or sales. Some alliances involve customers, partners and competitors.

Joint venture

A joint venture is a form of strategic alliance with two or more organizations developing a product or service together.

Equity partnership

Equity partnership involves acquiring partial ownership through a purchase of shares. This partnership can be general (sharing proportionally in control, profits and liabilities) or limited (no managerial authority and liability limited to investment). The partnership agreement defines issues such as leadership and division of profits and losses.

Licensing

Licensing means that the organization designated by a legal entity in the host country is granted the rights to produce or sell a product. This is a low-risk entry strategy that avoids tariffs and quotas imposed on exports. However, there is little control of the licensee’s activities and results.

Franchising

Franchising is when a trademark, product or service is licensed for an initial fee and ongoing royalties. Franchising is similar to licensing as a low-risk entry strategy. This tactic involves an initial franchise fee with ongoing royalties.

Module 1: HR Administration

Market Entry/

Section 1.1: Strategic HR Management and Business Trends

Description

Growth Tactics Contract

Contract manufacturing means contracting for the manufacture of

manufacturing

components or products as a means of lowering labor costs.

Turnkey operation

A turnkey operation or BOT is an organization that includes

(also called BOT,

everything needed to start operating in a certain location.

or build, operate and transfer) Management

With a management contract, an organization is hired to manage and

contract

run the daily operations of the business. Decisions about financing and ownership reside with the owners. Acquisition results in the expansion of the organization’s employee

Acquisition

base and facilities. Significant cultural, systems and management challenges can occur during acquisitions. Data privacy can be a serious issue. Greenfield

A Greenfield operation is the start-up of a new business plant or

operation

operation, usually in a new location.

Brownfield

A Brownfield operation is the reuse of land that was previously used

operation

for industry or manufacturing. Figure 1-11. Market Entry and Growth Tactics (concluded)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

A start-up is a term used to describe an organization that recently began operating and is in an early phase of development. HR’s role in supporting the start-up strategy occurs during the research, planning and implementation phases. Global HR professionals prepare themselves for the start-up process by reviewing information on the following: 

Country-specific employment-related issues such as employment practices, recruiting sources, workforce relations, taxation and legally mandated components of compensation and benefit plans



Cultural, religious and ethical issues that will affect practices

The website http://www.doingbusiness.org offers country-specific information related to doing business in other countries and complying with local labor laws. The International Labour Organization (http://www.ilo.org) is another useful resource for labor management in different locales. Figure 1-12 shows some examples of the scope of the HR professional’s responsibilities during the following activities: 

Researching locations for start-ups



Identifying local resources and challenges



Localizing the global HR strategy as necessary



Ensuring the fulfillment of local HR functions

Many of these tasks are familiar to the HR professional. However, with a start-up each task must start at the beginning with no previous experience to build on.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Researching New Operations Political/business/social environment  

Industry/labor environment

Real decision makers (that is, formal



Major business leaders

versus informal power structures)



Conditions in industry

Government structures and attitude



Presence of union representation

toward business 

Stability and continuity of policy across changes in leadership and administration

Workforce 

and use of collective bargaining Recruitment and hiring 

Typical education requirements



Sources for recruiting and

Employee classification system (for example, exempt/nonexempt,

reliability of references 

Contracting requirements

hourly/salary, monthly) 

Enforceability of local system



Use of contracts and restrictions on

HR policies and procedures 

Payroll and tax procedures (for

hiring (for example, part-time or

example, HR information system

temporary employment)

and learning management system implications)

Compensation and benefits 

Pay structures, pay review cycle,



Customary workweek



Social restrictions on job

progression

assignments (for example, who can



Mandatory or customary bonus payments

work certain shifts or jobs)



Overtime, night or shift pay

Figure 1-12. Sample Research Topics for Starting a New Global Business (R. e. Herod 2007)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Environmental Scanning/SWOT Analysis

An environmental scan is a survey of internal and external environments to identify the following: 

Internal strengths and weaknesses



External potential opportunities and threats to the proposed strategy

Environmental scanning can involve an analysis technique known as SWOT analysis. SWOT is an acronym that stands for strengths, weaknesses, opportunities and threats. The SWOT analysis is used to discover two things about an organization: 

Distinctive capabilities that provide a strategic advantage



Potential problem areas that must be addressed

A SWOT matrix is illustrated in Figure 1-13.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Internal

External



Strengths



Opportunities



CEO backing



New markets



Good communication system in



New partners

place



Improved brand



Initial excitement and good

awareness

motivation 

Strong vendor relationships



Consistent with strategy

Weaknesses 

No market research



Organizational resistance to



Threats



Local rules and regulations

change



Environmental impacts



Workload is already excessive



New competitors



Not enough resources assigned



Poor economy and



Loss of focus

resistance to new investments Figure 1-13. Sample SWOT Matrix

Strengths and weaknesses refer to the internal environment. Opportunities and threats come from the external environment. The opportunities represent favorable circumstances that the organization can leverage to produce a desired effect. The threats indicate possible danger, harm or menace. Strengths and opportunities can be leveraged. Weaknesses and threats are problems that must be solved but can be difficult to control. Figure 1-14 shows a hypothetical HR SWOT analysis. In this example, a real estate and property development organization wants to expand its number of properties, square footage and number of locations.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Internal

External



Strengths



Opportunities



Strong organizational



High growth in some

brand 

Good onboarding

locations 

program

Technology and building techniques



High income potential



Weaknesses



Threats



Lack of cross-border



Lack of talent

experience



Individualistic culture

Difficulty reaching



Financial crisis

diversity goals (for



Working with accounts



example, for women) 

Lack of valuable career plans Figure 1-14. A Hypothetical HR SWOT Matrix

HR’s Strategic and Tactical Roles in Internationalization Mergers and Acquisitions

Mergers and acquisitions (M&A) are a common way for an organization to develop a presence in a local market. However, there is also a significant risk of failure. Figure 1-15 lists some of the potential benefits and risks of the M&A strategy for expansion.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Potential Benefits 

  

Acquire local company’s

Potential Risks 

Meet administrative (political,

familiarity with local market

legal and regulatory) resistance

forces and competitors

to M&A

Acquire known brands and



Incur liabilities of other

market share

organization (for example,

Gain access to new market of

acquired rights of workforce,

consumers or customers

lawsuits)

Gain additional resources,



Incur loss of shareholder value

institutional knowledge and



Lose talent and productivity

skills

during prolonged integration period (integration of strategies, management, workforce, processes and technology)

Figure 1-15. Potential Benefits and Risks of Mergers and Acquisitions HR’s due diligence in mergers and acquisitions. Many organizations have developed their own due diligence checklists. Figure 1-16 lists typical factors HR should include in its due diligence investigation. The investigation should use multiple sources and local contacts and experts.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Due Diligence Topics Management   

Community labor environment

Talent of current managers at top and



Union climate

middle levels



Availability of necessary skills

Anticipated level of post-M&A

Current HR function

motivation of managers



In-house or outsourced

Likelihood of retaining top



Future plan

management 

Management pay structure



Ability to recruit top managers

Management style 

Centralized versus decentralized



Paternalistic, authoritarian or

HR policies and procedures 

procedures 

Distance of management style from that of your own organization



Compatibility with own policies and procedures



collaborative 

Written or unwritten policies and

Other required policies (for example, regulatory, such as affirmative action)

Effect of future business strategy 

HR activities needed to support

Probability that managers will be able

business strategy (for example, hiring,

to adapt to new style

closing of operations)

General employee information 

Types of employees (for example, full time or part time)



Local customs of employment



Retention plans, if applicable Figure 1-16. HR Due Diligence for M&A (continued to next page)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Due Diligence Topics Work environment 

Employee attitudes



Type of worker representation and participation

Hidden costs of acquisition 

Special contract terms with management



Benefit plans and transferability to



Rates of absenteeism and disability



Safety records



Complaints filed with regulatory

funding, distribution, retention of

agencies

unvested percentage)

new employees 

Pension plan status (adequacy of



Separation and incentive pay plans



Compensation packages



Pending lawsuits and judgments

Figure 1-16. HR Due Diligence for M&A (R. Herod 2007) (concluded)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Strategic Alliances and Partnerships

In The Global Challenge: Frameworks for International Human Resource Management (Evans, Pucik and Björkman 2010), the authors note that HR can do the following to add value to strategic alliances and partnerships: 

Identify and select partners. HR can identify appropriate competencies needed in a partner, analyze the impact of the partner’s organizational and ethnic cultures, and assess the strength of the partner’s HR function.



Negotiate the relationship. HR may help select and train the negotiation team and contribute its own facilitation skills. HR must also address issues such as transfer of competencies and ensure that the partner is developing the appropriate staff and workforce.



Implement alliances. This may involve contributing to compensation/reward plans, development programs and transfers that will improve alliance performance. HR may also help integrate cultures and enable collaboration.



Promote learning. Transfer of knowledge may be an important goal in the alliance. HR can help ensure that opportunities for learning are built into the arrangement and implement programs designed to stimulate learning.

Given the potential benefits, HR should be involved at an early stage in planning these strategies and should be included in management teams. Expanding Resources Across Borders

Offshoring, outsourcing and open sourcing are all ways of expanding resources and increasing efficiency by using opportunities across borders. Offshoring. Offshoring is transferring service or manufacturing operations to a foreign country where there is a supply of skilled and less costly labor. For example, a financial services company in the United Kingdom could open a facility in Thailand to perform back-office banking transactions. Cost savings may not be the only attraction of offshoring. Organizations may also be attracted to the greater proximity that offshoring provides to growing markets © 2012 SHRM

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

or suppliers. There has also been a trend toward offshoring to certain areas because of a greater availability of talent. India, China and Russia now provide more than half of the supply of young professionals. In 2003, there were 30% fewer engineers in low-wage economies than in mid- to high-wage economics, but by 2008 the gap had narrowed to 18%. As education improves in emerging and developing economies, the talent gap will continue to close (Farrell 2006). Some of the factors for choosing one location over another relate to workforce and talent issues. Therefore, HR’s early and close involvement is important. Figure 1-17 highlights main areas for HR research during the due diligence period.

Due Diligence Topics for Offshoring Cost and quality 

Wage structure relative to

Talent pool 

other options 

Tax structures



Real estate



Infrastructure (for example,

Size of labor force with required skills



Size of offshore sector and share of exports



Availability of vendors for

telecommunications networks,

specific services (for example,

transportation, energy)

IT)

Figure 1-17. HR Due Diligence for Offshoring (continued to next page)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Due Diligence Topics for Offshoring Sociopolitical environment  Government receptivity, 

Risk levels  Political and labor unrest

amount of regulation



Natural disasters

Ethical environment of



Personal and property security,

political and business

intellectual property rights

communities



Economic stability



Quality of life



Regulatory stability



Accessibility

Figure 1-17. HR Due Diligence for Offshoring (Farrell 2006) (concluded) Outsourcing. Outsourcing occurs when a company contracts with a third-party vendor for the supply of products, services or component parts. Outsourcing can occur to a domestic firm or across borders. This practice is a common way to take advantage of global differences—for example, in cheaper labor or access to raw materials or end users. Outsourcing is a way of accessing special skills and knowledge that can raise the quality level of an organization’s products or services or enhance its ability to respond quickly to customer demands. However, organizations generally do not outsource their core competencies, the essential activities that create the organization’s characteristic value. The advantage of outsourcing lies in a company’s ability to acquire value without a long-term investment in assets. Figure 1-18 lists reasons to outsource.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Reasons to Outsource 

Reducing and controlling costs



Improving focus on core strategic competencies by



improvements 

transferring important but non

Accelerating process

Managing difficult situations and deadlines

core competencies



Sharing financial risk

Gaining access to world-class



Satisfying government reporting

talent

requirements



Freeing internal resources



Accessing technology



Adding resources that do not



Obtaining critical mass

exist internally Figure 1-18. Reasons to Outsource In a cosourcing arrangement, an organization outsources only one part of a function—for example, by retaining the more strategic aspects of compensation but outsourcing the data-intensive activities. The term insourcing has a variety of meanings, including the following: 

Contracting a function out to another entity that manages and performs the function on-site



Transferring a previously outsourced function back in-house



Hiring of local workers by foreign organizations operating subsidiaries locally

In International Human Resource Management: Policy and Practice for Multinational Enterprises (Briscoe, Schuler and Claus 2008), the authors describe the internal challenges of outsourcing: 

Internal divisions of the organization must agree to use the service or product provider. Management may have to enforce the strategic decision to outsource.



The organization must define clear processes and parameters and establish efficient communication channels with the provider.

Module 1: HR Administration



Section 1.1: Strategic HR Management and Business Trends

If outsourcing results in workforce reductions, the organization must manage the economic, legal, social and organizational costs.



Externally, local instabilities and obstacles that prevent the contractor from performing as promised can also jeopardize the organization’s own performance. This factor must be considered when choosing products or services to be outsourced.

HR may be involved directly in outsourcing—by contracting out HR processes or subprocesses—or indirectly. For example, HR may provide training and decision support tools to help the organization’s managers supervise the outsourcing process. HR has a role in developing and monitoring relationships with external stakeholders and in supporting the organization’s corporate social responsibility program. Therefore, HR may also evaluate vendors’ performance on such issues as labor conditions and environmental practices.

Strategy Implementation The third stage of the strategic planning process is strategy implementation. This stage involves three actions: 

Create specific action plans.



Allocate budgets and resources to support objectives.



Make plans to communicate to employees.

At this stage, the strategy becomes part of the organization’s operations, priorities and direction. A strategy is only as good as its implementation and evaluation. Even a very thoughtful strategy can fail if it is not properly implemented.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

The Role of HR in Implementing Strategy HR has an important role as manager of the organization’s human talent resources. In this role, HR can promote successful implementation of an organization’s strategy. Managing talent means constantly analyzing the talent pool against the requirements of the organization’s strategy. How can HR retain highly valuable assets and increase the general value of the organization’s talent? 

By developing strategic competencies



By promoting the exchange of learning and experience throughout the organization

HR can take the following actions to support implementation of the organization’s strategy: 

Maintain a talent pool of innovative, literate leaders who can be assigned to strategically sensitive areas. This concept is discussed in Christopher A. Bartlett and Sumantra Ghoshal’s Managing Across Borders: The Transnational Solution (Bartlett and Ghoshal 2002).



Identify and develop key skills in the existing talent pool.



Increase the pool of needed skills through targeted recruiting.



Help define the interconnected roles of different parts of the organization.



Establish methods for communication and collaboration.



Create strategies for decreasing competition between units and enhancing collaboration.

Strategy Evaluation The last stage in the strategic planning process is evaluation, which involves the following three actions: 

On a regular basis, review external and internal factors for changes.



Review progress toward achieving strategic objectives and measurable outcomes.



Take corrective action.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Evaluation can and should occur at any time. Evaluation impacts the organization in the following ways: 

Affects both the perceptions of external stakeholders and the behaviors of internal stakeholders (management and employees)



Confirms the continued relevance of the organization’s strategy



Demonstrates progress toward achieving specific goals based on that strategy

HR professionals can differentiate evaluation metrics by what they measure. Activity versus Results Figure 1-19 compares activity measures to results measures. Activity Measures

Results Measures

Activity measures focus on what an

Results measures focus on the output of those

organization does (its processes).

processes (improvements in time, money, quality, efficiency, effectiveness and credibility).

Activity measures identify problems and

Results measures are essential to success.

areas for improvement and lead to improved results. Example: An organization’s strategy is to

Example: An organization’s strategy is to

increase its ability to innovate. An activity

increase its ability to innovate. A results

measure tracks the number of employees

measure focuses on the number of new

who have attended workshops on

products in development.

creativity. Figure 1-19. Activity Measures versus Results Measures

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Operations should examine what they are measuring and ensure the following: 

Results measures receive the most emphasis.



The balance and the relationship between activity and results measures are appropriate.

Cost Control versus Value Creation Cost control measures focus on the ratio of operating costs to income. Value creation measures focus on the following: 

Number of patents and product innovations



Time to achieve competency



Development time for new products



Effectiveness of knowledge sharing and global collaboration



Strength of the employment brand



Opening of new markets and opportunities for revenue

Cost control and value creation both are valuable and contribute to the organization’s financial goals. Leading organizations have a healthy balance between cost and value creation measures. A strong emphasis only on cost control or only on value creation can create challenges for strategic and organizational alignment. Benchmarks Benchmarks are measures or markers used as a basis for judging or measuring something else. Here are examples: 

For commercial enterprises: inventory turn, profit margin



For nonprofits: ratio of fund-raising costs to total expenses



For government agencies: the number of transactions with citizens performed within a period of time

Additional information on benchmarks is presented in Section 1.4: Change Management and Business Process Improvement for HR Professionals.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Financial Measures A variety of metrics—both financial and nonfinancial—are used to evaluate the effectiveness of organizational strategies. The choice of tactic depends on the nature of the strategy and the organization’s priority. We will discuss typical financial and nonfinancial metrics and the balanced scorecard, beginning with financial measures. Financial measurements can shape the future of an organization. Here are three examples: 

Good performance data can increase the organization’s value and ability to attract talent.



Senior management can earn rewards based on economic performance measures.



Labor unions can use financial reports to support demands for increases in wages.

Excessive use of financial measures can overemphasize the importance of shortterm results. Viewing financial results as trends can help lessen this effect. Financial measures must always be used within the context of a specific industry. For example, profit margins are very different in financial services than in manufacturing consumer goods. Compensation levels can also be a financial metric. For example, an organization’s average wages can be benchmarked against industry averages to identify potential vulnerabilities. A history of stagnant wages can signal problems with retaining valuable employees.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Nonfinancial Measures Nonfinancial measures examine changes in areas that are not measured in terms of currency. However, the effects of these changes can be expressed in currency to show their financial effect. Such measures may include the following: 

Share of market, which may signify competitive strength



Reputation among investors, consumers, governments and political groups



Level of brand awareness among consumers



Achievements in social responsibility



Recognizable employee brand (useful in recruiting and hiring)



Reputations for quality, customer relations and innovation



Efficiency (that is, use of most current, efficient technology and processes)



Activity ratios, which measure the efficiency with which resources are used to generate profit (for example, number of inventory turns in a period, average age of inventory, average collection and payment period, asset turnover)



Employee retention and job satisfaction ratings

The Balanced Scorecard The balanced scorecard is a tool used to evaluate organizational strategies. This tool must accommodate the varied goals of different strategies. For additional information about the balanced scorecard, see Section 1.2: Gathering, Measuring and Reporting HR Data. Robert Kaplan and David Norton (Kaplan and Norton 1992) first introduced the balanced scorecard as a metric that considers both financial and operational performance. Kaplan and Norton believe that relying only on common financial measures—such as return of shareholder value or revenue growth—gives an incomplete picture of an organization’s strengths and weaknesses. This is especially true in modern organizations that succeed in their ability to innovate and respond quickly to change. Kaplan and Norton also believe that traditional

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

measurement approaches do not account for the complex relationships between different aspects of performance. The purpose of a balanced scorecard is to achieve balance in three main areas: 

Between financial and nonfinancial indicators of success



Between internal and external constituents in the organization



Between lagging indicators and leading indicators of performance

Figure 1-20 illustrates the general form of a balanced scorecard. (The scorecard can be customized for different types of organizations.) The scorecard incorporates measures from four perspectives and illustrates the interrelationship of leading and lagging performance indicators (that is, the cause-effect relationship between measures).

Figure 1-20. The Balanced Scorecard for a For-Profit Organization Four perspectives are represented in the balanced scorecard.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Financial Financial measures examine the effect of the organization’s actions on its financial goals. The typical financial measures are profitability, growth (for example, in sales and market share) and shareholder value (for publicly held companies). Customer (External) Kaplan and Norton (Kaplan and Norton 1992) found that customer concerns tend to divide into the categories of time, quality, performance and service and cost. For example, customer measures of an organization’s performance may include the following: 

Time. How much time does it take to receive a product after an order has been placed?



Quality. Is a product being returned because of a flaw or because a service is performed incorrectly?



Performance and service. Does the product or service meet the customer’s needs and add value?



Cost. Is the cost appropriate for the value delivered and the competitive environment?

Operations (Internal) The operations (or internal) perspective looks at how well the organization performs the essential processes that create its value. These processes can directly affect customers (for example, quality monitoring) or important competencies (for example, technology and managing product life cycles). Learning and Growth The learning and growth perspective recognizes that remaining competitive or sustaining value requires continuous improvement and innovation. Examples of learning and growth measures include the following: 

The rate or number of new product introductions



Rates of improvement in measures such as quality or productivity

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Leading indicators predict future performance. Improved customer loyalty (a customer measure) eventually translates into increased revenue growth and possibly improved profits (financial measures). Lagging indicators (such as financial performance) show only what has happened in the past. Consider an organization that is in the middle of implementing a strategic initiative to improve performance. This organization could see a disconnect between strong leading indicators and poor lagging indicators. However, if the organization continues to improve the leading indicators, the lagging indicators will eventually turn around.

For more information about the use of the balanced scorecard, refer to the Balanced Scorecard Institute, http://www.balancedscorecard.org.

Organizational Structure Organizational structure is a way to align and relate the parts of an organization to get the most performance from all functions. Organizations must implement organizational structures that provide a good fit with their industries—allowing the right balance of local responsiveness, efficiency and sharing of learning and innovation. The wrong organizational design can severely hamper the organization’s ability to achieve its goals. HR professionals should be familiar with the elements of organizational structures, so they can guide their organizations through choosing and implementing the elements that are right for them. Organizations can be structured according to function, product or geography. They can also use hybrid structures, such as front-back or matrix. We will discuss these five structures in more detail.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Functional Structure The functional structure is the most common organizational structure. In this structure, departments are defined by the services they contribute to the organization’s mission. For example, the departments can include HR, operations and marketing and sales. Departments can also be defined by process. For example, the organization can be divided into departments such as design, manufacturing, distribution and customer service. Figure 1-21 shows a functional structure. In this example, some units in the structure are considered line units, and others are considered staff units. Line units are workgroups responsible for the organization’s major business functions (such as production or marketing). Staff units help the line units by performing specialized services for the organization (such as HR).

Figure 1-21. Functional Structure

Product Structure In the product structure, functional departments are grouped under major product divisions. For example, an automobile company can have separate divisions for cars, truck and sports vehicles. Each of the divisions will have its own marketing, sales, manufacturing and finance functions. More employees are needed to staff this type of organization, but this need can be offset because of accumulated experience and expertise. The truck division, for example, should be better than a generic vehicle operation at designing and manufacturing trucks. Figure 1-22 shows a product structure. © 2012 SHRM

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Figure 1-22. Product Structure

Geographic Structure A geographic structure is very similar to a product structure except that geographic regions, rather than products, define the organizational chart. Each region has its own complete group of functions. Although more employees may be needed, each division can also be more responsive to local markets. Figure 1-23 shows a geographic structure.

Figure 1-23. Geographic Structure

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Front-Back Structure The front-back structure is a hybrid structure that mixes elements of the functional, product and geographic organizational structures. The front-back structure divides the organization into front functions (organized by geographic locations or customer types) and back functions (organized by product or business unit). For example, the front end of an athletic shoe corporation can be organized by geographic region (such as Europe, the Middle East and Africa). The back end can be organized by product area (such as shoes for different sports).

Matrix Structure The matrix structure is another hybrid structure. The matrix combines the functional and product structures to gain the benefits of both. This structure creates two chains of command in the organization. Some employees may report equally to two managers. For example, in Figure 1-24, the safety training manager reports to both the vice president of manufacturing and product manager C.

Module 1: HR Administration

Type of

Advantages

Structure Functional

Section 1.1: Strategic HR Management and Business Trends

Disadvantages



Easy to understand



Weak customer or product focus



Specializations develop



Potentially weak communication



Economies of scale



Communication within

among functions 

organizational issues

functions

Product

Weak grasp of broader



Hierarchical structure

Economies of scale



Regional or local focus



Product team culture



More people



Product expertise



Weak customer focus



Cross-functional



Career paths



Fewer people



communication Geographic



Proximity to customer



Fewer economies of scale



Localization



More people



Quicker response time



Potential quality control



Cross-functional

problems

communication Figure 1-25. Advantages and Disadvantages of Organizational Structures (continued to next page)

Module 1: HR Administration

Type of

Section 1.1: Strategic HR Management and Business Trends

Advantages

Structure  Front-back 

High level of customer

Disadvantages 

Potential for conflict between

focus

front and back (for example,

Flexibility (units can be

explaining decreases in sales by

added to meet demand for

mutual accusations of poor

new products or

performance)

emergence of new



customers)

Necessity for developing new skills (customer/market focus) for all employees

 Matrix

Combines strengths of



both functional and product structures  

Can be expensive and difficult to explain to employees



May result in conflicting

Blends technical and

priorities when individuals have

market emphasis

more than one superior

Develops managers who are comfortable with technical and marketing issues

Figure 1-25. Advantages and Disadvantages of Organizational Structures (concluded)

HR Trends How do you determine what trends to analyze? Because your organization is unique, the trends you analyze will also be unique. The organization’s HR needs change constantly in response to the economy, specific industry changes, competition and localities where the organization has a presence. In 2009, the Society for Human Resource Management (SHRM) published a list of the future workplace trends according to SHRM’s HR subject matter expert panels (Society for Human Resource Management, Future Insights: The Top

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Trends According to SHRM's HR Subject Matter Expert Panels 2009). Twelve Special Expertise Panels compiled lists of the issues they believe will have the greatest impact in the workplace. The report identifies broad trends that impact many aspects of HR and the workplace simultaneously. These broad trends include the following: 

Impact of the global recession on business strategy and employees



Influence of social networking, especially as it relates to recruiting



Continuing importance of work/life balance as employees deal with multiple caring responsibilities and, in some cases, multiple paid jobs



Need for measurement of results and the development and standardization of important HR metrics



Growing need for organizations to demonstrate a commitment to ethics, sustainability and social responsibility



Importance of globalization and integrating markets



Continued emphasis on performance management

In 2011, the International Bar Association’s Global Employment Institute (GEI) reported on the most important HR issues of the next ten years, as identified by HR leaders in multinational organizations (International Bar Association Global Employment Institute 2011). The following issues were among the top international HR challenges: 

Human resources issues in transnational company operations



Work/life balance as a significant factor in acquiring and retaining talent globally



Managing mobile employees and those working remotely in other countries



Nondiscrimination and management of diversity in a global company culture



The use of the Internet and social networking communications in the workplace (Heylman 2011)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

More information about HR trends can be found at the following websites: 

http://www.shrm.org/Research/FutureWorkplaceTrends/Pages/default.as px



http://www.shrm.org/hrdisciplines/global/Articles/Pages/GlobalizationSt udy.aspx



http://www.shrm.org/about/pressroom/Documents/future_of_hr.pdf

We will discuss trends in specific HR areas in more detail below.

Globalization Christopher Bartlett and Sumantra Ghoshal (Bartlett and Ghoshal 2002) have proposed the most recent and optimal form of global enterprise: the transnational corporation (TNC). The TNC blends the standardization used by global organizations with the localization approach of a multinational organization. The result is glocalization—an organization with a strong global image but an equally strong local identity. Global integration (GI) 

Global integration emphasizes consistency of approach, standardization of processes and a common corporate culture across global operations.



Decisions are made from a global perspective so that the organization’s brand and image are consistent and uniform.

Local responsiveness (LR) 

Local responsiveness emphasizes adapting to the needs of local markets and allows subsidiaries to develop unique products, structures and systems.



Company functions, processes and activities are modified to reflect local conditions—including markets and cultural, legal and sociopolitical situations.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Staffing Staffing describes the act of selecting, hiring and training qualified people for specific jobs, as well as reducing the workforce when needed. HR professionals must consider current and future trends in order to effectively support the organization’s staffing needs. In the 2009 SHRM report on future workplace trends (Society for Human Resource Management, Future Insights: The Top Trends According to SHRM's HR Subject Matter Expert Panels 2009), one of the Special Expertise Panels identified trends related to staffing management. Some of these trends include the following: 

Many workers are available (although not always qualified) to apply for many jobs. However, other jobs are harder to fill and require a competitive recruitment strategy.



Workforce planning will be affected both by availability of qualified workers and by changes in retirement patterns.



HR needs to build competency in selecting and managing third-party products and services.



Sustaining the employment brand is critical for recruitment and retention regardless of the employment market and economic business conditions.



Employers are increasingly using multiple selection measures—including panel interviews, reference checks and work samples.

In addition, William Arruda, founder of Reach Communications Consulting Inc., identified technology trends that he says will find increasing use among employers and corporate recruiters through 2012. These trends include the following: 

Customized Google searches help recruiters quickly find relevant and accurate information on potential employees. One example is the Search Me button developed by United States-based Vizibility.



Blended searches provide employers with a multimedia package of information on job candidates, including photos and videos.

Module 1: HR Administration



Section 1.1: Strategic HR Management and Business Trends

Digital bridges let potential employees access online suites of career marketing tools.



Crowd sourcing allows colleagues and clients to make online recommendations and reviews of a person’s work skills (Society for Human Resource Management, 'Search Me' Button Might Help Eliminate Mistaken Identity 2011).

Proactive Recruiting Using Social Media

The use of social media is a growing technology trend. Social networking sites available to recruiters include Facebook, LinkedIn and Twitter. Benefits of using these media include a reduced cost of recruiting and a larger pool of potential applicants. The LinkedIn Recruiter platform, for example, provides an organization’s recruiters with access to an expanding database of over 80 million members in 200 countries (Society for Human Resource Management, Recruiting Strategies for Social Media 2010). However, according to Sherrie A. Madia, author of The Social Media Survival Guide, recruiters should balance social media with continued use of their existing recruitment channels (Society for Human Resource Management, Recruiting Strategies for Social Media 2010). Employment Branding

Employment branding is an organization’s strategy to change how others perceive it. The goal of employment branding is to project an image of the organization as a desirable employer. An effective employment brand is considered crucial for recruitment and retention (Society for Human Resource Management, Future Insights: The Top Trends According to SHRM's HR Subject Matter Expert Panels 2009). More information about the employment branding trend can be found at the following websites: 

http://www.shrm.org/Research/FutureWorkplaceTrends/Documents/100028%20India_Article_Employer_brand_v5.pdf

http://www.shrm.org/Publications/Books/Pages/CulturalFitFactor.aspx 60

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Outsourcing

HR needs to build competency in selecting and managing third-party products and services (Society for Human Resource Management, Future Insights: The Top Trends According to SHRM's HR Subject Matter Expert Panels 2009). The use of third-party contractors is also known as outsourcing. Outsourcing involves transferring certain business functions outside the organization so that the organization can focus on core activities. Before considering outsourcing, organizations should be aware of the following issues: 

The gap between what the organization needs and what the organization currently has



What role outsourcing can serve in closing those gaps



The impact on the organization in terms of a reduction in workforce or future dissatisfaction with the outsourcing arrangement (Society for Human Resource Management 2008)

Compensation and Benefits Benefits are things that the employee receives in addition to a salary, such as health insurance. Compensation refers to total rewards that the employee receives for working, including pay and nonmonetary benefits. HR Magazine’s 2011 HR Trend Book reports a need for salary and incentive overhauls as a result of the global financial crisis. As part of compensation planning for 2011, organizations must align their compensation program with their recovery strategy (Krell 2010). Following are some of the significant trends related to compensation and benefits.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Transparent Executive Compensation

Poor performance by an organization can lead to closer scrutiny of the compensation received by the organization’s top executives. In the 2010 SHRM report on trends, the Total Rewards/Compensation and Benefits Panel identified the following trend:

Figure 1-26. Trend in Compensation DolmatConnell & Partners, an executive compensation consulting firm, identified the following top trends in executive compensation for 2009: 1. Low increases in base salaries 2. Restructuring of bonus plans 3. Potential shifts in long-term incentive mixes 4. An increased potential for taking back previously awarded money or benefits because of corporate underperformance 5. A more conservative approach by compensation committees (Society for Human Resource Management, Executive Compensation: What Lies Ahead? 2009)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Total Rewards Emphasis

The 2010 SHRM report on trends identified the following total rewards trend:

Figure 1-27. Trend in Total Rewards A 2009 survey by Deloitte Consulting and the International Society of Certified Employee Benefit Specialists (ISCEBS) identified the cost of providing health care benefits as the top priority of total rewards specialists (Society for Human Resource Management, Increased Cost Concerns Dominate 2009 Total Rewards Trends 2009). Generational Differences

HR professionals must be aware of the differing attitudes and motivations of different generations of employees. C. Scott Boring, 2009 ISCEBS President, cautions that each generation of employees has unique beliefs about work and rewards. However, in the 2009 survey by Deloitte and ISCEBS, 24% of the respondents believed that their organization’s leadership did not understand the total rewards perspective of the different generations in the workforce (Society for Human Resource Management, Increased Cost Concerns Dominate 2009 Total Rewards Trends 2009).

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Demand for Work/Life Balance

Employees are facing increased caring responsibilities (for example, caring for their aging parents). This situation may lead to greater demands for work/life balance benefits (Heylman 2011). Preventive Health and Wellness Programs

Many organizations are adopting preventive health and wellness programs. These programs combat the increase in preventable and chronic health conditions and the accompanying increase in the organization’s health insurance costs. Examples of wellness programs include the following: 

Nonsmoking campaigns



Stress management



Weight management



Hypertension (high blood pressure) screening and education

Human Resource Measurement and Metrics The 2010 SHRM report on future workplace trends identified the following trend related to human capital measurement and HR metrics:

Figure 1-28. Trend in Human Capital Measurement and HR Trends One significant trend is the ongoing effort to create a formal and standardized definition of the practice of HR. This effort requires HR professionals to identify

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

and formalize a core group of universal HR principles and practices that are not confined to any one nation or jurisdiction. An example of this trend is the course material you are currently studying. Another example is the Society for Human Resource Management’s effort to establish an HR-specific series of ISO standards that can be applied worldwide (Society for Human Resource Management, SHRM Bid to Lead Global HR Standards Effort Ratified 2011). All such efforts support the increasing objectivity and professionalism associated with the practice of HR worldwide. For more information about frequently used HR metrics, refer to the Section 1.2: Gathering, Measuring and Reporting HR Data.

Additional information about HR metrics and metrics calculators can be found at the following website: 

http://www.shrm.org/TemplatesTools/Samples/Metrics/Pages/default.asp x

Employee Engagement Employee engagement is a measurement of employees’ involvement, satisfaction, happiness and loyalty with their employment. Engagement is reflected in how hard employees work and in how long they stay with their organization. A recent online survey of over 5,000 executives from 109 countries identified employee engagement as one of the top most critical HR topics (Society for Human Resource Management, Study: Engage Employees and Middle Managers 2010). In order to engage their employees globally, organizations are encouraged to do the following: 

View global HR decisions in the context of national culture.



Use valid research to align HR practices with actual employee attitudes in a local population.

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

Section 1.1: Strategic HR Management and Business Trends

Collect data on national norms in order to interpret employee surveys correctly.



Recognize that the elements that create engagement also create the employment brand. (Society for Human Resource Management, Developing and Sustaining Employee Engagement 2010)

Training and Development Recent technological advances have changed the methods that human resource and training professionals use to design, deliver and administer training. The use of technology—such as social media—is allowing learners to learn differently and more effectively. Training should use more sophisticated tools that entertain as well as educate employees. These tools can include gaming, social media and virtual worlds rather than conventional slides and classroom approaches, according to Anders Gronstedt of The Gronstedt Group, Inc. The use of innovative technology can result in better-trained employees (Society for Human Resource Management, Forget the Classroom: Turn to the Web for Innovative Learning Techniques 2010). At the 2010 American Society for Training & Development (ASTD) International Conference and Exposition, keynote speaker Charlene Li explained that the use of social media tools can enhance social learning and connect it to formal learning. Li identified the following five levels of engagement in social media-driven learning (Society for Human Resource Management, Social Media Tools Redefining Learning in Organizations 2010): 

Watching



Sharing



Commenting



Producing



Curating (in other words, organizing content into meaningful packages that connect with the audience to create a meaningful experience)

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Examples of using technology in training include the following: 

An anesthesiologist at a remote hospital watches a YouTube video to see how to perform a particular procedure (Society for Human Resource Management, Social Media Tools Redefining Learning in Organizations 2010).



Employees improve sales by watching a weekly webisode (a short episode played on the Internet) based on a popular television comedy (Society for Human Resource Management, Forget the Classroom: Turn to the Web for Innovative Learning Techniques 2010).



Employees are presented with a sales case in the form of an alternate reality game with clues hidden in the organization’s Intranet (Society for Human Resource Management, Forget the Classroom: Turn to the Web for Innovative Learning Techniques 2010).

Specific training trends are described in more detail below. e-Learning

E-learning is on online method of training or education where participants attend classes via the use of electronic media. E-learning can be delivered via the public Internet, an organization’s Intranet or extranet, satellite broadcast, DVD or compact disk or other electronic means. E-learning technology can be used to implement distance learning, which is the process of delivering educational or instructional programs to locations away from a classroom or central site.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Getting-More-from-Less-Training Strategy

Human resources may face competition from other business functions for an organization’s limited—and sometime diminishing—resources. Many organizations are reluctant to apply these resources toward additional talent management and training. Therefore, HR professionals must focus on getting more from less—that is, retaining and maximizing the productivity of the strongest talent while minimizing staffing and training costs. A key to this strategy is maintaining good communications with the organization’s major stakeholders (Society for Human Resource Management, Getting More from Less Trend Will Continue in 2010, 2010). Learning Management Systems

A learning management system (LMS) is computer software that administers, tracks and reports on employee development opportunities, such as classroom and online events, e-learning programs and training content. An LMS can track and manage employee course registration and completion, career development and other employee development activities. Many learning management systems also offer testing and measurement capabilities. Learning Organization

Tetrick and Da Silva define a learning organization as, “A learning organization can create, acquire and transfer knowledge, and with this new knowledge, it can then change its behaviors in order to improve organization performance.” (Tetrick and Da Silva 2003) Nancy R. Lockwood for the Society for Human Resource Management examined organizational learning. Her research identified the following attributes for organizational learning: 

A focus on organizational learning results in a competitive advantage.



Effective learning refers not only to shifting what is learned but also how learning occurs and evolves in an organizational context.

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

Section 1.1: Strategic HR Management and Business Trends

Within a knowledge economy, cooperation, networking and collaboration have essential roles in organizational culture.



Learning organizations have cultures that are open to transformation and continuous change.



A learning culture allows for some risk-taking with some tolerance for mistakes.



Communities of competence are providing the structure in which to describe and combine different strengths and core competencies—job satisfaction, productivity and work quality improve as all members share knowledge and expertise (Society for Human Resource Management, Knowledge Management Series Part II: Organizational Learning 2005).

Learning Portals

Portal is a term used to describe a gateway or access point to the Internet. A learning portal provides access to an organization’s database of information and resources regarding learning and training. Learning portals allow training and learning information to be channeled and communicated effectively to employees. Learning portals are often used together with learning management systems (see above) to manage data, provide access to internal training programs and distribute training-related information and resources to employees. Remote Project Collaborations

Organizations are dealing increasingly with technological advancements, telecommuting, globalization and escalating travel costs. These factors are leading to a demand for better options for remote communication and collaboration. Software companies are responding by offering specialized suites of programs that make it easier for virtual teams to communicate with each other and to use project management tools collaboratively. HR professionals can use these new tools to increase the involvement of local stakeholders in the training program design and development process.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Social Networks

A social network is a group of people who interact because they have a common interest. The group communicates either in-person or using technology (for example, Facebook or Twitter). Social networking sites such as LinkedIn and Plaxo Pulse are Internet-based services that allow individuals to do the following: 

Construct a public or semipublic profile within a bounded system



Create a list or database of other users with whom they share a connection



View and use their lists of connections and those made by others within the system

HR professionals can use these sites for multiple professional purposes, including identifying and contacting potential suppliers, leveraging learning and developing mentoring and professional support relationships. University Involvement

An emerging trend is linking organizations with national and international universities to enhance knowledge and develop competencies within the organization. One example is the Accenture-XLRI HR Academy, a training academy in India launched by Accenture and the XLRI School of Business and Human Resources. Virtual-World Simulations

Computer and electronic simulations are also growing in popularity. Trainingrelated simulations place the learner in a virtual work environment (for example, managing an office or using a machine) and present a series of real-life challenges. The learner has the opportunity to practice new skills and make decisions in a supportive and low-risk environment. One of the better-known virtual-world simulations is Second Life, an Internet-based video simulation launched in 2003 by Linden Research.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Simulations offer a number of important benefits: 

Appealing to young learners with sophisticated technological expectations



Actively engaging individuals in the learning process



Providing additional opportunities for individuals to learn complex or potentially dangerous skills in a realistic but safe environment

Web 2.0

The term, Web 2.0, was coined in 2004 to indicate a group of web-based technologies characterized by interactivity. These technologies are focused on building connections through the ability to interact and encourage collaboration and community. Thomas Friedman wrote in The World is Flat that these programs make connections possible across the world. He quotes Carly Fiorina of Hewlett Packard who described information as “…digital, mobile, personal and virtual.” Digitization makes the information easy to transmit. This information can be manipulated through many applications where people capture and manipulate data without thinking about the technology (Society for Human Resource Management, HR and Technology 2009). More information about how organizations are using Web 2.0 tools can be found in McKinsey & Company’s report “Building the Web 2.0 Enterprise: McKinsey Global Survey Results” at the following website: http://www.mckinseyquarterly.com. Webinars

A webinar is an interactive seminar on the Internet. Usually the webinar is a live presentation. The webinar can be one-way communication with limited audience interaction, or it can be limited two-way communication to allow full participation between the audience and the presenter (for example, through the addition of collaborative, polling and question-and-answer activities). This technological solution provides many of the benefits of live classroom training without many of the attendant costs of bringing the instructor to the audience or the audience to the instructor.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Additional information on training and development is presented in Module 5: Training and Development.

Keeping Current on Business Trends The following suggested tasks for conducting trend research will vary based on the circumstances associated with the research: 1. Understand your organization’s strategic vision. Focus your trend analysis on issues that have the greatest influence on the organization. Research external conditions first and then examine conditions internal to your organization. 2. Collect information through research. Prioritize your research efforts to encompass both an organizational focus and an HR focus. 3. Identify a pattern to use in predicting future events. Today’s biggest challenge with respect to research is not the access to information but rather finding information that is relevant. Anticipate the events and issues that have the greatest value. Through continued research, trends will emerge. 4. Benchmark and measure to quantify the trend. Trend analysis is most beneficial when you have a benchmark of the current situation. You may be the first person to anticipate the trend. In this circumstance, you will define a benchmark from which to measure the trend. Then you can compare your research findings with how the organization operates now. Over time, subsequent comparisons should be captured. 5. Share your research findings. Other organizational leaders can benefit from your research. Share your insights, experience and findings. 6. Gain perspectives and consensus from others. Your research has more influence and validity when you include additional perspectives. Reaching consensus with your stakeholders (anyone affected by the information) increases the strategic value.

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

7. Measure outcomes from responding to trends. Continue to measure the results achieved. As the environment changes, your earlier efforts will create a basis to anticipate change. 8. Record outcomes as the basis for tracking future trends. Always keep a defined basis (sometimes referred to as a baseline) to track future trends and to continuously measure progress. As an HR professional, your analysis of trends includes a personal world perspective. Each person’s world perspective is influenced by cultural presumptions. These presumptions also influence how you perceive your research findings. Dr. Geert Hofstede’s dimensions of culture may be helpful in understanding the differences between cultures when you conduct trend research: 

Power distance



Uncertainty avoidance



Individualism/collectivism



Masculinity/femininity



Long-term/short-term



Indulgence/restrain (Hofstede, Hofstede and Minkov 2010)

For example, uncertainty avoidance reflects the level of tolerance society members have for uncertainty and ambiguity. When researching and communicating with other cultures, pay particular attention to the concepts of time and personal space. Be aware that different cultures may perceive and value time differently (Society for Human Resource Management, When in Rome: Note Cultural Differences When Training, Experts Say 2009). More information about Hofstede’s dimensions of cultures can be found at the following website: http://www.clearlycultural.com.

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Section 1.1: Strategic HR Management and Business Trends

Additional information on cross-cultural communication is presented in Module 3: Employee Relations and Communication, Section 3.1: Communication in the Workplace.

Technology for Today’s HR Professional HR’s role in managing technology is to help identify new technologies that can help with the following goals: 

Achieving the organization’s strategic HR goals



Facilitating the rapid pace of change due to technology



Managing the cultural change and strategic redirection associated with the introduction of new technology

Technology has allowed HR to reduce some administrative tasks—like benefits administration and record keeping—and focus its attention on more strategic tasks—like knowledge and talent management and strategy development.

Monitoring the Technological Front Technology has changed, and the rate of change has increased dramatically in the computer age, changing the way the organization does business. In order to be better leaders and effective strategic partners, HR professionals must be aware of technology trends, capabilities and issues. Consider the following factors when monitoring the technological front: 

Advances in technology



Technological skills



The digital divide

Advances in Technology Changes in technology can alter both the structure of jobs and the structure of the organization. Technology allows organizations to provide service twenty-four hours a day to accommodate customers who live in all parts of the world. Also, © 2012 SHRM

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Section 1.1: Strategic HR Management and Business Trends

technology may provide employees with the tools to do a job more efficiently and accurately. Technology has even affected the way in which organizations solve problems. The phenomenon of swarming—the rapid linking of networks of individuals through cell phones and other electronic devices—has been used to brainstorm solutions to work situations. HR must be ready to capitalize on the advantages of instantaneous and global communication, such as employee selfservice and e-learning. The following are a few of the major changes in technology. Electronic Record Keeping

Electronic data is subject to data retention laws and regulations. Improperly deleting electronic records may be a legal violation. However, keeping documents beyond compliance requirements can leave a business vulnerable. For example, records discovered by plaintiffs can become evidence in court. Therefore, policies must be in place for the conversion, migration, storage and legal destruction of records. Keeping electronic data is particularly important in the event of litigation. Under these circumstances, the employer must preserve electronic documents (as well as hard-copy documents) until the matter is conclusively resolved. These record management efforts include e-mails, backup tapes, local hard drives, network drives, floppy disks, CD or DVD drives and any other removal drives. Electronic Signatures

In 1999, the European Union adopted the EU Directive on Electronic Signatures. The electronic signature technology must pass certain tests to be used as a legal signature. Qualified electronic signatures would carry the same legal effect as handwritten signatures. According to the Summaries of EU Legislation website, the goal of this community framework for electronic signatures is as follows (EUROPA 2008):

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

Figure 1-29. Goal for Electronic Signatures Application Service Providers (ASPs)

An application service provider (ASP) hosts and runs an organization’s software applications on the Internet. Instead of purchasing software and installing it, the organization pays the ASP on a subscription basis. Advantages of using ASPs include the following: 

Automating administrative tasks (such as time and attendance tracking, applicant tracking and other workforce management issues)



Spending less money on software installation and maintenance



Making IT resources available for other major tasks



Creating efficiencies in various business processes (Society for Human Resource Management 2007)

One disadvantage of an ASP is the potential lack of customization. In addition, experts advise caution and careful evaluation before choosing an ASP partner. Because the market is currently young, ASPs may be better suited for activities (such as HR activities) that are not critical to an organization’s mission (Society for Human Resource Management 2007). Cloud Computing

Cloud computing refers to storing, developing or processing data on software running on the Internet, instead of on a personal computer or the organization’s

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

server (Zielinski 2009). For example, you can create a spreadsheet using a cloud provider’s application. The spreadsheet will be stored on the Internet and is accessible any time you want to make changes and additions to the data (Thornburg 2009). Technological Skills Organizations must train employees on the new technologies that allow them to work anytime and anywhere. The need for new technological skills may emerge quickly. An organization’s success can depend on constant monitoring of needed skills and educational options. Organizations must recognize that retraining workers is an ongoing effort and important in building a skillful workforce. Computer-based learning or e-learning may help organizations respond quickly to new training needs. The Digital Divide As organizations become more dependent on the Internet, lack of access (including broadband or high-speed access) to the Internet may create a divide between those who have digital access and those who do not. The digital divide can limit the following: 

Sharing of information



Opening of educational and training opportunities



Opportunities for small businesses located in communities without highspeed access

Human Resource Information Systems HR professionals are experiencing a greater need for broad-based employee information to help them make effective decisions and maintain necessary information. This need is especially true for compliance purposes. A human resource information system (HRIS) is a tool that supports human resources functions. This tool can be used for gathering, storing, maintaining, retrieving and revising HR data. An effective HRIS provides information the company needs to track and analyze employees, former employees and applicants.

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Section 1.1: Strategic HR Management and Business Trends

Most HRIS programs include three types of reporting or analytics: 

Standard reports Standard reports include both regulatory-related reports and recruiting reports.



Ad hoc reports An ad hoc report writer allows users to create their own reports beyond the standard reports.



Scorecards and dashboards The balanced scorecard is a strategic evaluation tool. A dashboard is a visual display of HR metrics. A role-based dashboard provides important metrics for the role and is configurable to user preferences.

Does your organization need a special human resource information system? The answer depends on how much information the organization needs to operate efficiently. Smaller organizations typically need only the basic information associated with payroll records. Larger organizations often want more specific information for effective HR planning and may invest in the following technology solutions: 

Self-service online applications can enlist employees in entering and updating their own profiles and in initiating many transactions, such as changes in beneficiaries or benefit options.



Employees can answer many employment-related questions themselves by accessing an online help desk.



Manager self-service software gives managers the ability to access crucial information and to perform tasks themselves, without the help of HR personnel. These tasks include managing performance reviews, accessing report data, monitoring team members and managing employee salaries and status changes (Society for Human Resource Management, Making the Move to Manager Self-Service 2010).

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Section 1.1: Strategic HR Management and Business Trends

More information about human resource information systems can be found at the following website: 

http://www.shrm.org/about/foundation/products/Pages/HRTechEPG.aspx

HRIS Applications Figure 1-30 shows some types of HRIS applications that apply to different functional areas of HR. HR Functional

HRIS Applications

Area  Strategic

Provides environmental



scanning results

Provides quality and productivity improvements

management  Workforce planning and employment



Tracks hiring, promotions,



Prints appropriate

transfers and termination

compliance data in the

rates by job group

required format

Records the number and percentage of each segment



Collects resumes and internal job applications

in apprenticeship and training programs Figure 1-30. Applications of HRIS (continued to next page)

Module 1: HR Administration

HR Functional

HRIS Applications

Area  Human resource development

Section 1.1: Strategic HR Management and Business Trends



Outlines career path



Registers employees for

development

courses, monitors costs,

Records information such as

schedules trainers and

education, skills and

classrooms

completed training programs



Evaluates employee performance

Total rewards



Tracks salary survey results



Facilitates benefits

comparison of salaries

administration

across job classifications



Facilitates employee self-



Prints compliance data in the appropriate format

service 

Facilitates analysis and

Tracks history of tuition reimbursement



Tracks retirement planning



Stores employee discipline



Records union service data

records



Maintains attitude survey

Employee and labor relations



Records labor distribution

results

data  Risk management



Identifies trends in on-the-



job accidents and illnesses

examinations and follow-up

and helps in development of

procedures resulting from

preventive measures

injury or illness

Tracks insurance and



workers’ compensation claims by accident 

Monitors medical

Tracks safety records

Identifies high-risk conditions



Monitors accidents and their costs by type and location

Figure 1-30. Applications of HRIS (concluded)

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Section 1.1: Strategic HR Management and Business Trends

Implementing HRIS Globally The use of HRIS applications has provided valuable, consistent information to management, but it has also encountered difficulties. Some HRIS systems are time consuming and expensive to implement and maintain. This difficulty is magnified when systems must span multiple countries with different technical platforms and communications. HRIS operations face a number of practical challenges: 

Affordability



Different technology platforms in various units



Types and quality of electronic access available



Different understandings of terminology and meanings when collecting data (for example, the varying definitions of contractor, temporary employee, part-time employee and full-time employee)



Different lengths of fields and records based on language and local differences



Attitudes and regulations toward employee data and privacy



Cultural acceptance of the technology system (Employees’ emotional response to a technology should be carefully considered. Will an employee with little computer experience be comfortable using a kiosk?)

HRIS Skill Banks and Skill Tracking Systems HR professionals can use the human resource information system as a source for internal recruitment. HRIS skill banks and skill tracking systems can help generate computerized talent or skill inventories. These inventories can furnish a list of people who have the needed knowledge, skills and abilities. Information systems that include a compete record of each employee’s qualifications allow organizations to scan records quickly and to locate qualified candidates for vacant positions. However, HR professionals should be aware that skill inventories are only as good as the data they contain. These inventories can be time consuming and

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

costly to maintain, so consider carefully the type of data that is collected and used in a skill tracking system. In many organizations, employees regularly update their employee records (for example, as a part of the performance appraisal process). Selecting Human Resources Information Technology Human resources information technology is an increasingly necessary tool to help HR professionals manage employee information. Experts recommend that organizations carefully evaluate the many available options. The HR information technology that is selected must support the needs of HR and the organization over time. The Society for Human Resource Management, recommends answering the following questions when selecting a human resources information system: 

What do you need the system to do?



If you presently have a system, what about your present system works well and what problems exist?



What other processes can be automated?



Who will have access to the system?



What security controls will be needed?



Will it need to be compatible with any other systems (that is, Accounting)? Are there any major organizational changes planned that may impact the choice of system (next 3-5 years)?



How long do you expect to use this system?



What kind of a budget do you have to work with? (Society for Human Resource Management, HRIS: How Can I Find an HRIS System That Is Right for My Company? 2005)

Knowledge Management Systems An organization’s human capital is its primary competitive advantage in the global economy. To retain this advantage, employees must be able to quickly and

Module 1: HR Administration

Section 1.1: Strategic HR Management and Business Trends

efficiently share knowledge across both organizational and geographic boundaries. Knowledge management is the process of gathering, documenting and sharing important information to improve the performance of employees and the organization. Knowledge management can strengthen the ability of the organization to innovate, to react to market conditions and to continually improve. A knowledge management system is based on four activities, each of which must occur for knowledge management to be successful: 

Inventory knowledge assets. This activity involves cataloging the tangible assets of the company (such as white papers, presentations and articles), best practices and areas of employee expertise.



Create a knowledge base and directory. The cataloged information from the first activity is entered into a system for easy access and retrieval. The directory is a listing of employee skill banks and areas of expertise (building connections). The knowledge base is all the tangible assets (building collections).



Use the system. The knowledge management system can be used both informally (to educate employees and project team members) and formally (as a basis to make employee assignments).



Update the system. Maintain and update the system as people, projects and information change.

Knowledge management becomes more difficult as organizations grow and become more global. Challenges include the following: 

The physical task of inventorying and updating so many people and so much knowledge



Cultural and personal issues related to sharing information with others (If information is perceived as power, there may be issues associated with convincing people to share this valuable asset.)



The relevance of best practices from one organization’s environment and culture to another

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Section 1.1: Strategic HR Management and Business Trends

Despite these challenges, developing workable knowledge management solutions is a worthwhile endeavor. These solutions can make the organization smarter, more agile and efficient. Organizations that find ways to enhance collaboration at a global level and thereby speed knowledge creation have a major strategic advantage.

1.2: Gathering, Measuring and Reporting HR Data This section covers the following information from the Body of Knowledge: Behaviors: 01. Use HR metrics and prepare reports to analyze HR issues (for example, the number of employees hired and those who left, employee turnover, the cost per employee and budgets) Skills & Knowledge: 11. Tools and methods to analyze business data (for example, spreadsheets and databases) 12. Ways to report information (for example, presentation software, such as Power Point; and word-processing software, such as Microsoft Word) 14. The number of employees in the budget, and the salary and benefit costs for these employees

Section 1.2: Gathering, Measuring and Reporting HR Data Introduction ..................................................................................................................................87 Understanding Research Terms and Techniques .....................................................................88 Inductive and Deductive Reasoning ...........................................................................................88 Primary and Secondary Research ...............................................................................................90 Experimental Research Process .................................................................................................91 Quantitative and Qualitative Data Analyses ..............................................................................93 Reliability and Validity ............................................................................................................108 Human Resource Management and Evaluation Metrics .......................................................110 Initial Considerations ...............................................................................................................110 Frequently Used HR Metrics....................................................................................................111 Budgeted Headcount..................................................................................................................113 Strengths and Weaknesses of the Headcount Method .............................................................114 Evaluating HR’s Strategic Contributions ................................................................................114 Financial Measures ...................................................................................................................115 Performance Measures .............................................................................................................120 Trend Analysis .........................................................................................................................123 Reporting Methods ....................................................................................................................125

Module 1: HR Administration

Section 1.2: Gathering, Measuring, and Reporting HR Data

Introduction Organizations use measurement systems to track results and plan their strategic development. These measurement systems are an important part of any business planning process. Metrics and measurements provide information on what works and what does not. Human resource professionals have the following responsibilities when measuring and evaluating: 

Provide training on the purpose and use of essential metrics and measurement tools.



Provide measurement reports and data needed for organization-wide assessments.



Help the organization analyze and interpret measurements.



Create and use programs that measure and evaluate HR programs and initiatives.

Collecting data and analyzing metrics can be completed with little interaction with people. However, these activities are still crucial to HR management. In order to identify problems and improve processes, HR must define what success is and then measure it. Using metrics and measures tells employees that the organization is committed to specific values and goals. This section examines the following HR responsibilities:



Understanding research terms and techniques



Describing the metrics and techniques used to gather HR data



Understanding the methods and forms used to report HR data

Module 1: HR Administration

Section 1.2: Gathering, Measuring, and Reporting HR Data

Understanding Research Terms and Techniques HR can conduct its own research or use the research of others to support its metrics. Any research that HR uses must be based on accurate measurements and conclusions. Your measurements are reliable only if you use reliable methods to collect and analyze your data. Therefore, we will review the main concepts in data research and analysis: 

Inductive reasoning and deductive reasoning



Primary research and secondary research



Experimental research process



Quantitative and qualitative analyses



Reliability and validity

Inductive and Deductive Reasoning Inductive and deductive reasoning are processes for analyzing data. Both types of reasoning are useful in some ways and limited in others. Figure 2-1 illustrates the different approaches used in inductive and deductive reasoning.

Figure 2-1. Inductive and Deductive Reasoning Processes

Module 1: HR Administration

Section 1.2: Gathering, Measuring, and Reporting HR Data

Inductive reasoning starts with the specific and moves to a broader conclusion. It involves two steps: 1. Look at a series of specific observations. 2. Design a rule that explains a pattern underlying the observations. For example, an HR professional can gather data about a group of new hires who are high performers. Most of the employees also speak more than one language. The HR professional induces that, for this job, the ability to speak more than one language is a good indicator of future success. The success of inductive reasoning depends on the sample size and randomness, which are discussed later in this section. In this example, a larger sample of new hires from different organizations could produce a different pattern of data. Deductive reasoning starts with the general and moves to a narrower conclusion. It also involves two steps: 1. Start with a general or universal statement that is accepted as true. 2. Apply the premise to a new situation so that you can make a prediction or improve your understanding. For example, research at one organization shows that managers who maintain very high levels of control have workers with lower morale. An HR professional observes that a particular manager is very controlling. The HR professional deduces that the organization will find lower morale in this manager’s department. The success of deductive reasoning depends on the reliability of the starting premise. Wherever possible an organization’s procedures should be expressed using inductive reasoning. In contrast, an organization’s policies should be expressed using deductive reasoning. Taken together the two reasoning methods explain the how and the why of an organization’s workplace rules.

Module 1: HR Administration

Section 1.2: Gathering, Measuring, and Reporting HR Data

Primary and Secondary Research Primary research involves data that the HR professional directly gathers for the evaluation. Secondary research uses data that is gathered by others and reported in various sources. Data from secondary research must be examined for relevance. Methods of primary and secondary research are listed in Figure 2-2. The choice between primary or secondary research depends on the question and on practical limitations. For example, some questions are very specific and can be answered only by primary research. Other questions are too broad to be tested within a confined work environment and can be answered only by secondary research.

Primary Research

Secondary Research



Experiments



Secondhand reports



Pilot projects



Historical data (for example,



Surveys and questionnaires



Interviews (exit, individual and

HR records and census records) 

Purchased data (for example, Gallup data or Roper data)

panel) 

Focus groups



Direct observation



Testing



Professional journals, books and other media



Benchmarking and bestpractices reports

Figure 2-2. Sources of Primary and Secondary Research for Evaluating HR Effectiveness Research projects can combine primary and secondary research. For example, an organization wants to understand how recent technological changes have affected frontline managers. Primary research can include the following:



Focus groups of a cross section of managers



Questionnaires sent to all managers



Observation of several managers as they perform their daily tasks

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Secondary research can include the following: 

Articles about similar experiences in other organizations



Analysis of personnel records to identify common elements in managers who have been able to adapt to new technology

Experimental Research Process Experimental research uses the scientific method to work with variables (changing factors) and to examine the results. (Nonexperimental research does not include variables. Instead, behavior is observed, measured and analyzed.) Scientific research tries to be as objective as possible. The HR professional can use the scientific method to discover the factors that attract people to their jobs, that encourage them to stay at their jobs and that motivate them to perform well at their jobs. Five steps are included in the scientific method as indicated in Figure 2-3.

Figure 2-3. The Scientific Method Step 1: Problem Analysis Problem analysis means carefully defining the problem you are investigating. Example Sales figures are decreasing for all stores at a large organization. Employees receive no sales training during this financial crisis. The HR professional should conduct a short internal survey.

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Step 2: Hypothesis Formulation Hypothesis formulation means describing the problem with a hypothesis. A hypothesis is a specific, testable prediction that is derived from a theory and describes a relationship between two variables. Example The HR professional makes the following testable hypothesis: after one year, sales will increase more in stores where sales training is provided compared to stores where sales training is not provided. Step 3: Experimental Design In an experiment, the researcher controls and manipulates parts of the research environment to measure the impact of each variable. A well-designed experiment helps us determine the causes with the greatest impact. Example All stores in the organization are divided into two similar and comparable groups according to their sales turnover and size. In Group 1, the store employees receive sales training. In Group 2, the store employees receive no sales training. Step 4: Data Collection Data consists of unanalyzed facts and figures. This data becomes information when it is placed into a useful context (as with scientific research). Data may be qualitative or quantitative. The difference between qualitative data and quantitative data is discussed below. Example After one year, the sales turnover of both groups of stores is measured and compared. Step 5: Data Analysis The success of data analysis depends on the effort put into the first four steps. Data analysis may be qualitative or quantitative. The example below highlights the difference between qualitative data analysis and quantitative data analysis.

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Example Data analysis shows that after one year, Group 1 (the group of stores with sales training) has a better sales turnover. This short internal survey helped HR promote more sales training for Group 2. The survey also helped HR develop a sales training philosophy for the entire organization.

Quantitative and Qualitative Data Analyses Quantitative and qualitative data analyses both depend on the kind of data that is used and how the data is collected. Quantitative analysis is based on a limited number of data points that are easily measured. Qualitative analysis is based on research that uses open-ended interviewing. Many parts of the organization use only quantitative data analysis. The human resources department is different from other parts of the organization because it often uses both quantitative and qualitative data analysis. Quantitative Analysis Quantitative analysis uses a limited number of measurements to collect numerical data. The use of statistics helps the HR professional with the following tasks: 

Interpret the collected data



Accomplish the desired research objectives



Provide a cost-benefit analysis



Communicate the results of the project

HR professionals often used statistical methods to analyze compensation, benefits and employee surveys. Statistical methods used to interpret research data include descriptive statistics and inferential statistics. We will discuss descriptive statics first.

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Descriptive Statistics

Descriptive statistics condense and summarize large amounts of data for quick understanding. Figure 2-4 shows types of descriptive statistics.

Descriptive Statistics 

Charts and graphs



Frequency distributions and tables



Measures of central tendency



Measures of variation



Measures of association

Figure 2-4. Types of Descriptive Statistical Data Used in Quantitative Analysis

Charts and Graphs

Showing data on a chart or graph lets the researcher see the distribution of scores. Examples include pie charts, bar charts and graphs. The pie chart is a circular chart that compares different parts as a percentage of a total amount. Figure 2-5 shows a pie chart.

Figure 2-5. Pie Chart

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The bar chart uses rectangular bars of different lengths to represent and compare different values. Figure 2-6 shows a bar chart.

Figure 2-6. Bar Chart

The histogram and additional charts and diagrams are presented in Section 1.4: Change Management and Business Process Improvement for HR Professionals.

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Frequency Distributions and Tables

Frequency distributions and tables are used to sort salary data. A frequency distribution is a listing of grouped data, from lowest to highest. A frequency table shows the number of people who receive a particular salary. Figure 2-7 shows a frequency distribution and table for a determined of salary data.

Organization

Salaries

Number of People

55,000

60,000

65,000

70,000

75,000

Figure 2-7. Frequency Distribution and Table Frequency tables can be converted to histograms for a graphic representation of the data. Measure of Central Tendency

There are three measures of central tendency: 

The mean is the average score or value.



The mode is the value that occurs most frequently.



The median is the middle point above and below which 50% of the scores are positioned.

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Example Look at the data shown in Figure 2-8. There are 15 scores for a total of 155 points.

Figure 2-8. Example 1 of Measure of Central Tendency

The mean is the most common measure of central tendency. The mean is calculated by adding all the data values and then dividing by the number of values. The calculation in Figure 2-9 shows a mean of 10.33 based on the data in Figure 2-8.

Figure 2-9. Calculation of Mean

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Figure 2-10 shows a graphical representation of the mean, median and mode for a positively skewed distribution. In this distribution, most of the data values are at the lower (left) end of the scale.

Figure 2-10. Example 2 of Measure of Central Tendency The mean for salary data can be calculated as an unweighted average or as a weighted average. The unweighted average, or raw average, gives equal weight to every salary in the survey. Other factors (such as the number of people who receive each salary) are not considered. The unweighted average is used when organizations provide only the average salary data rather than actual salaries. The weighted average, or weighted mean, considers the number of people who receive each salary. Figure 2-11 shows the salary data for unweighted and weighted average figures. The unweighted average is 65,000 (325,000 divided by 5 average salaries provided by the organization). The weighted average is 65,909 (725,000 divided by 11 organization salaries).

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Organization

Totals:

Number of

Annual

Total

Incumbents

Salary

55,000

110,000

60,000

65,000

130,000

70,000

350,000

75,000

325,000

725,000

Organizations Figure 2-11. Salary Data for Unweighted and Weighted Average Figures

The mean is simple to calculate. However, problems can occur if there are very few data values. For example, an organization provided a training program that was rated by only five employees. If four employees rated the training program as 1 (indicating poor) and one rated it as 10 (excellent), the mean rating would be 2.8. This is not the best measure of perception of the training. In this case, the mode, or the value that occurs most frequently, gives more information. In our example, four out of the five data values are 1, indicating that most employees did not find the training effective.

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Another problem occurs with a large number of data points that include extreme scores. For example, an organization provided a training program that was rated by 500 employees. Most of the employees rated the program as 7 on a 10-point scale. However, some of the ratings were very high, and a few ratings were very low. In this case, the median is the most useful. The median is the score that lies directly in the middle of the values. To find the median, the data is listed in order like the ascending order shown in Figure 2-8. The total number of data points are counted (500) and then divided by two. The median is between data values 250 and 251 and is close to a rating of 7. Quartiles and percentiles are also used to measure central tendencies. They both show how groups of data are related to each other (also called dispersion). Organizations use quartiles and percentiles to determine whether they lead, lag or match the external market. For example, Figure 2-12 shows the range for one job grade as reported in a salary survey.

Figure 2-12. Quartiles

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Measures of Variation

Measures of variation show how much the data differs from the central tendency values. In our training example above, the employees’ rating of the training program shows a large variation, with some very high ratings and some very low ratings. This variation could indicate that some employees are insufficiently prepared for the training. Measures of variation include the following: 

Range is the distance between the highest and lowest scores. The range is calculated as the highest score minus the lowest score. Example The data 10, 11, 12, 68, 69 and 70 yields a range of 60 (70 minus 10).



Percentile is a point in a distribution that has a given percentage of cases below it. Example If you take a test and are in the 68th percentile, you have scored better than 68% of the test takers.



Standard deviation shows how much the scores are spread out from the mean or average. A normal distribution of data means that most of the examples are close to the average and that only a few of them are very high or very low. Normally, distributed data have graphs that look like the bell curve in Figure 2-13. A large standard deviation tells you that the data is diverse, while a small standard deviation tells you that the data is close together. HR professionals use standard deviations to show performance rating distributions.

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Figure 2-13. The Theoretical Normal Distribution Measures of Association

Measures of association show how two or more factors (variables) are related. For example, income can be related to level of education, and the amount of air pollution can be related to the incidence of respiratory disease.

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Measures of association include the following: 

Scatter diagrams show the relationship between data items using x and y axes. These diagrams will be discussed later in this section.



Correlation is a measure of the relationship between two variables. The correlation coefficient is measured on a scale that varies from +1 through 0 to –1. When one variable increases as the other increases, the correlation is positive. When one variable decreases as the other increases, the correlation is negative. Complete correlation between two variables is expressed by either +1 or –1. Complete absence of correlation is represented by 0. Figure 2-14 shows a graphic representation of correlation.

Figure 2-14. Correlation Coefficient 

Regression analysis is a statistical method that predicts a variable from one or more other variables. The purpose of regression analysis is to determine whether a relationship exists between variables and the strength of the relationship. A causal relationship exists when two variables are related in some way. Three conditions must be met in a causal relationship:



Evidence of association must exist.



The dependent variable must change in a consistent way after the independent variable changes.



All other possible causes must be eliminated.

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Inferential Statistics

We have looked at five different types of descriptive statistics. Now we will consider three different types of inferential statistics, as shown in Figure 2-15.

Inferential Statistics 

Population



Sample



Normal distribution

Figure 2-15. Types of Inferential Statistical Data Used in Quantitative Analysis

Inferential statistics lets you form a conclusion about a characteristic of a population by studying a sample taken from that population. Three concepts important in inferential statistics include population, sample and normal distribution. Population A population is a group or a collection (of people, objects or measurements) that you want to form conclusions about. A few examples follow: 

All the employees of an organization



All the parts produced on a given day



All the test scores of math students at a given level in a given district

Sample HR professionals often do not use or cannot use an entire population to test a hypothesis. Instead, they form conclusions about the population based on a part of the population, or a sample. A sample of a population has the characteristics of the whole group. For example, consider a cup of coffee with three cubes of sugar, as shown in Figure 2-16.

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Assume the sugar represents the population. Add the sugar, and then take a sip from the cup to taste if the coffee is sweet. This represents sampling the population. You do not need to drink the whole cup of coffee to see if it has enough sugar.

Figure 2-16. Sampling Do not sample a population by choosing only people you know. In addition, make sure that the sample is random. In random sampling, each member of the population is equally likely to be chosen. An example of random sampling is in surveys of voters before and after elections. Normal Distribution The normal distribution is the distribution that you expect to see after conducting a random sampling across a large population. When you use inferential statistics, you assume that the sample and the population under examination conform to the characteristics of a normal distribution. Qualitative Analysis Qualitative analysis is based on research that uses open-ended interviewing to explore and understand the opinions and behavior of individuals or a group of individuals. Qualitative research is the best research method for gathering information in depth and in discovering underlying motivations, values and perceptions. In contrast, quantitative surveys are best for gathering a breadth of information regarding how many or how much.

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Qualitative research has many applications, including the following: 

Identifying strengths and weaknesses



Exploring alternative communication methods



Brainstorming/idea generation

Qualitative research can take many forms. A typical example is an interview with individuals or groups. Some benefits and cautions related to common qualitative research tools are described below. Individual or Panel Interviews

An interview involves asking a carefully planned, structured series of questions in a face-to-face setting. Interviews give researchers qualitative information and yield additional insights through probing questions. Figure 2-17 lists benefits of interviews and cautions regarding their use.

Benefits of Interviews 

Yield insightful information



Provide opinions and reactions

Are flexible

An interviewer’s nonverbal signals can influence responses. Interviewers should not ask leading questions.

Allow for personal connection to interviewee



 

to events 

Cautions for Interviewing



Interviewees might answer with what they think is correct.

Figure 2-17. Interview Benefits and Cautions

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Surveys and Questionnaires

Many HR professionals find interviews to be more effective when used with the questionnaire. Questionnaires involve asking a series of prepared questions in written form. Four common approaches are listed below: 

Rating scales



Yes, No or Don’t Know answers



Open-ended essay questions



Structured questions with multiple-choice answers

Rating scales provide fixed quantitative responses. For example, participants are asked to read a series of statements and to indicate their degree of agreement, with 1 representing strong disagreement and 5 representing strong agreement. Rating scales may consist of an odd or even number range. A scale of 1 to 5 allows participants to choose a centered response (3). A scale of 1 to 6 does not contain a center value and forces participants to choose a value in the lower range (1, 2 or 3) or the higher range (4, 5 or 6). Rating scales are easy for participants to answer when the directions are clear. These scales are sometimes combined with qualitative information. Qualitative information may be obtained through open-ended questions that encourage broader reactions than rated items. Figure 2-18 lists benefits of surveys and questionnaires and cautions regarding their use.

Benefits of Using Surveys and

Cautions When Using Surveys and

Questionnaires



Interviewee anonymity



Efficiency



Standard data collection



Surveys and questionnaires are less flexible than interviews.



Low response rates could yield little data.

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Observation, Organizational Records and Testing

Some data-gathering methods have problems with objectivity, availability or costeffectiveness. In those cases, you can use a supplemental form of analysis. Examples include the following: 

Observational techniques. For example, the person being observed is not aware that his or her behavior, production or responses are being recorded.



Archival information in organizational records. This information includes performance appraisals, turnover data and personnel records.



Job-relevant tests. Job-relevant means that the test accurately reflects a person’s ability to do a task, such as assembling electronic components or using equipment.

When you collect personal data as part of a qualitative analysis, be aware of the laws concerning data privacy in your country.

Reliability and Validity Before you begin to analyze data, be sure that all data are generated in an objective way. For example, use the same questionnaire or interviewer’s manual, the same time frame and comparable sample groups. Your goal is to gather reliable and valid information that you can use to make objective conclusions about a particular situation.

Reliability is the ability of an instrument to measure consistently. It is also defined as the ability to repeat an experiment and get similar results. Parallel Forms This method uses two tests that are identical except for the test questions. For example, a pre-test and a post-test can be considered parallel forms if they are designed correctly. After both tests are completed, the two scores are correlated.

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Test/Retest This approach measures the consistency of test scores over time. Participants take the same test at two different times. After both tests are completed, the scores for each individual are correlated. Internal Consistency Internal consistency tells you how well a test or procedure assesses the same characteristic, skill or quality. For example, a test is divided into two equivalent parts. The same person takes both parts of the test. Then scores from each part of the test are correlated. These scores should be the same or very similar. Rater Agreement Do different raters or observers give consistent estimates of the same behavior? You can check reliability by calculating the percentage of agreement between raters. For example, a group of raters is observing an employee conducting a meeting. They rate the employee’s behavior as excellent, good, fair or poor in twenty categories. The employee receives the same rating in fifteen out of twenty categories. In this case, the percentage of agreement is 75%. Training helps clarify the rules for rating and improves reliability among raters. This is particularly helpful when you are using multirater instruments, such as 360-degree feedback surveys or evaluating employees using an assessment center. Validity is the ability of an instrument to measure what it is intended to measure. Validation answers two questions: 

What does the instrument measure?



How well does the instrument measure it?

An instrument or method that is reliable is not always valid. However, an instrument that is valid is always reliable.

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Human Resource Management and Evaluation Metrics We have discussed how HR supports the organization by providing training and contributing data. HR professionals also have another important responsibility. They must evaluate the effectiveness of HR functions and processes. It is important is measure things correctly. It is even more important to measure the correct things.

Initial Considerations Before measuring and evaluating data, human resource professionals should carefully consider the following: 

How were the data generated?



Why were the data generated?



Are the data comparable?



Were the data correctly analyzed?



Are different cultural understandings involved?



Are the data privacy protected?

HR professionals should also consider opportunity costs. When you have a limited budget or limited resources, the opportunity cost is the value of what you must give up when you choose another option. For example, when an employee participates in a day of training, the opportunity cost is the loss of participation in work-related activities. As HR professionals gather and use data from different locations, they should also consider the impact of cultural differences. For example, an organization with its headquarters in one country conducts surveys only inside its own boundaries because of data privacy considerations. In these situations, the HR professional can take either of the following actions:



Identify a different data collection method



Do not include data from specific locations in the final analysis

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Frequently Used HR Metrics HR metrics can be used in the following ways: 

Comparing to metrics from previous years to see if organizational performance has improved or declined



Showing the benefit of HR practices and how HR professionals contribute to the organization



Comparing to the metrics of other organizations (benchmarking) to identify best practices, areas of excellence and areas requiring improvement

Figure 2-19 describes some frequently used HR metrics and how they are used.

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Figure 2-19. Frequently Used HR Metrics

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Budgeted Headcount The headcount method is one of the most straightforward methods used to create a budget that accounts for compensation-related employee costs. Figure 2-20 provides an overview of the headcount method.

Figure 2-20. The Budgeted Headcount Method

A more detailed headcount estimate can be made by further subdividing an organization into staffing layers and functions. Subdividing helps obtain a better estimate of cost allocation as well any subsequent revenue-related forecasting. Figure 2-21 provides examples of how you may want to subdivide an organization.

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Figure 2-21. Subdividing for Headcount

Strengths and Weaknesses of the Headcount Method One significant strength of the headcount method comes from its simplicity. The headcount method is easy to understand, communicate and apply. It is most useful for work that is routine and where the unique differences between job holders will have little impact on the range of possible job productivity. One significant weakness of the headcount method is its failure to differentiate between the competence and subsequent potential productivity of different individuals; all employees are considered equally productive using this budgeting method. This weakness is especially profound in knowledge-based work where one highly competent employee can be as productive as numerous less-competent employees put together.

Evaluating HR’s Strategic Contributions Any organizational function can be measured at two levels: effectiveness and efficiency. Effectiveness measures how well the organization has met its goals. Efficiency measures whether operations are done on time and within budget.

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The efficient and effective use of human resources contributes to the organization’s success and profitability. HR can actively contribute to the organization’s strategic plan in the following ways: 

By suggesting ways for the organization to measure the effectiveness of the strategic plan



By demonstrating the value of HR activities to the organization’s financial considerations and organizational goals

HR professionals use a variety of metrics to measure the impact of organizational changes. We will discuss four financial measures, two performance measures and the analysis of trends.

Financial Measures Human resource professionals can use the following four financial measures to evaluate HR’s strategic contributions: 

Return on investment



Cost-benefit analysis



Break-even analysis



Financial statement analysis

Return on Investment Return on investment (ROI) is defined in many different ways. In basic terms, return on investment is a calculation that measures the economic return on a project or investment. This calculation is for a specific investment or for a specific commitment of money that is made.

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Figure 2-22. Formula for Calculating Return on Investment Example An organization lost 100 employees last year, at a cost of 10,000 each, for a total of 1,000,000. With a new program that will require a one-time investment of 300,000, you can reduce turnover by 50%. This will mean a savings of 500,000. The net savings the first year will be 200,000. The net return on investment of this program for the first year would be 66.6%.

Figure 2-23. Sample ROI Calculation ROI calculations require the following actions: 

Establish clear objectives.



Define achievements in a measurable way that can be translated into a monetary value.



Gather data carefully.

Figure 2-24 illustrates ROI methodology.

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Figure 2-24. ROI Methodology Cost-Benefit Analysis The cost-benefit analysis presents data as a ratio. Management uses this analysis to measure how programs impact the organization’s profitability.

Figure 2-25. Formula for Calculating the Cost-Benefit Ratio Example A new HR program will result in total savings of 10,000. The cost of the program will be 2,000. The cost-benefit ratio is calculated as follows.

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Figure 2-26. Sample Cost-Benefit Ratio Calculation In HR, a cost-benefit analysis of all HR activities and programs should be completed on a regular basis. Ideally, this happens once a year in conjunction with the budget cycle. The cost-benefit analysis process for the entire HR function includes the following steps: 1. Identify each program in the HR plan. 2. Evaluate the effectiveness of each program based on the following: 

Cost versus projected benefits of the program



Relevance of the program to corporate objectives



Willingness and ability of line managers to execute the program



Economic risks of not executing the program

3. Prioritize all programs and assign staff resources.

The return on investment calculation is for a single specific investment. The cost-benefit analysis compares two or more options to help with decision making.

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Break-Even Analysis A break-even analysis is one of the simplest forms of cost-benefit analysis. In this analysis, you find the time at which total revenue associated with the program is equal to the total cost of the program. To calculate the break-even point, divide the total cost by the total revenue.

Figure 2-27. Formula for Calculating the Break-Even Point Example A program has an annual cost of 35,000 and is expected to generate a savings of 40,000 the first year. The break-even point would be about 10.5 months.

Figure 2-28. Sample Break-Even Point Calculation

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Financial Statement Analysis A financial (or income) statement explains revenues, expenses and profits over a specified period of time—usually a year or a quarter. Financial (or income) statement analysis is a common metric among investors. This analysis is used in the following ways: 

To determine the financial health of an organization



To measure the overall impact of a strategic plan

HR professionals can analyze financial statements in various ways: 

To calculate financial ratios, such as the rate of return the organization is earning on the shareholders’ retained earnings and assets



To calculate profit margins, such as the gross profit margin, operating profit margin and net profit margin

Performance Measures HR professionals should focus on measuring results rather than on measuring activities. An example of an activity is establishing a dispute resolution training program for managers. An example of a result that can be measured is the number of employees retained as a result of a change in dispute resolution. HR can collaborate with internal stakeholders to select significant measurement points. This collaboration will have two impacts: 

Ensuring that efforts are being directed at strategically significant improvements



Building understanding of the process and its value, which is essential for cooperation in data gathering

We will discuss two performance measures, the balanced scorecard and performance audits.

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The Balanced Scorecard The balanced scorecard approach provides a concise and complete picture of an organization’s performance. Four main areas are assessed in a balanced scorecard: 

Finance



Customers



Internal business processes



Learning and growth

Additional information about the organizational use of the balanced scorecard can also be found at the website of the Balanced Scorecard Institute, http://www.balancedscorecard.org. The steps for implementing the balanced scorecard system are similar to the steps in strategic planning. Step 1: Plan the Process Planning involves the following points: 

Confirm the scope of the project and establish a project timeline.



Outline a project communication approach.



Determine organizational participation and roles.



Confirm expected project deliverables.

Goals must be in place before the scorecard is used. If possible, recruit a person from the organization’s top-level management to provide support for the process. Step 2: Design the Scorecard Designing involves the following:



Focus on measures that actively support the organization’s strategy.



Identify critical success factors.

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

Develop an action plan.



Collect and prepare data.



Decide on tracking measures.

Scorecards should be designed to match the organization’s strategic goals. Measurements should be tied to specific organizational activities. Step 3: Employ and Refine Measures In Step 3, the organization takes the following actions: 

Employ scorecards.



Monitor performance gaps.



Refine measures of the scorecard.



Identify implementation issues.

You can use the balanced scorecard to measure the effectiveness of specific initiatives of entire departments or the entire organization. Two examples follow. 

The Minnesota Department of Revenue used the balanced scorecard to measure an initiative to increase taxpayer compliance. Measures included revenue collected (the financial perspective), taxpayer education and support (customer perspective), tax policy and internal processes (the process perspective) and staff self-assessment (the learning and growth perspective).

Programs should be piloted before they are formally implemented. Gradually use the balanced scorecard in every division, department and process. Ideally, scorecard use should start at the top of the organization, so people have direction and understanding about the total organizational mission and vision. Performance Audits Performance audits assess the performance and management of a program by an objective evaluator, using objective criteria.

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An HR audit measures HR effectiveness and efficiency and demonstrates the value of HR in helping an organization meet its strategic goals. The HR audit has two main functions: 

Help organizational decision makers understand what is happening with various HR activities



Allow HR managers to determine which programs and positions should be eliminated or enhanced

You can use HR audit checklists to indicate what items should be included in any HR audit. The HR audit tool should allow HR professionals to assign a numerical value to an assessment. This numerical value shows how effectively the organization has put basic HR activities in place and how well these HR activities are being performed. Either HR staff or a third-party contractor can conduct an audit. The benefit of using an outside source is that it can be more objective in its evaluation than using internal staff. Before starting an audit, make sure that you have agreement to fix any legal compliance problem you may discover as part of the audit. If you learn about a problem and then ignore that problem, you may increase your organization’s liability.

Trend Analysis Trend analysis uses statistics to determine whether relationships exist between two variables. A manager who is looking at HR trends must look for variables related to HR that seem to change predictably over time. The manager is analyzing past performance as a predictor of the future. Example: Using the six years of performance data in Figure 2-29, the HR manager for ABC Books wants to project the demand for employees for years seven and eight.

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Business Factors

Year

(sales in millions)

Labor Productivity

HR Demand

(annual sales per

(number of

employee)

employees)

3.613

11,120

325

3.748

11,120

337

3.880

12,520

310

4.095

12,520

327

4.283

12,520

342

4.446

12,520

355

Figure 2-29. Performance of ABC Books

A simple trend analysis plots the number of employees each year for the last six years. Figure 2-30 shows the trend analysis. You can use a statistical formula to calculate the slope of the trend line. Then project this trend for two more years to predict the number of employees. (The example assumes there is no turnover. Turnover should also be considered when deciding on a final estimate.)

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HR forecasts depend on the ability to predict variables (such as level of sales) within workable limits. When you project figures into the future, the major determinant is whether relationships will continue to exist. You must clearly identify any assumptions used in the forecast. This identification will help other people interpret and accept the information.

Reporting Methods Reporting methods are ways in which you can effectively present data and information that you have collected. When you select the right reporting method, it can help you communicate the organization’s dynamics and make your presentations more valuable, accurate and efficient. When creating a report, be sure to highlight your data points and to focus on the message. Many times the message can get lost in headings, graphics and other formatting elements. One reporting method is the Excel chart, which can be used to display lines, bars, pie charts and scatter diagrams. Bar charts and pie charts were discussed earlier in this section. Scatter diagrams are presented in Section 1.4. Before you choose a method of presentation, carefully consider the type of information you are presenting. For example, pie charts are useful when the information represents parts of a whole. Line charts often represent tendencies of change as a function of time.

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The PowerPoint presentation is a delivery tool that allows you to create slides to deliver your information. Whether you use PowerPoint or another presentation program, consider the following guidelines for presentation design and delivery (Reynolds 2008): 

Use the slides as an aid for the presentation, rather than depending on the slides to present all your information for you.



Make sure that the information on the slides does not distract the audience from your spoken presentation.



Don’t overload the slides. Include only the most important and meaningful information. Make each slide as simple and as concrete as possible.



Try to evoke emotions. For example, use unexpected facts or scenarios to capture the attention of your audience.



Keep your presentation friendly and conversational.



Interact with the audience as you present the information.



Add images and other visual content that complements the presentation.

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1.3: Workforce Planning and Employment Strategies This section covers the following information from the Body of Knowledge: Behaviors: 03. Maintain, file and process HR forms (for example, notices, announcements, new hire forms and salary forms) 10. Assist managers in updating standard job descriptions in order to match any changes in job requirements Skills & Knowledge: 03. Documentation requirements for employees and their employment 04. Management of HR documents (for example, managing files, scheduling for records retention) 07. Employment best practices (for example, the best ways to recruit, select and retain employees) 13. Different ways to classify employees(for example, workers who are full time, part time, temporary, or those who receive payment by the day)

Section 1.3: Workforce Planning and Employment Strategies Introduction ................................................................................................................................129 Workforce Planning...................................................................................................................129 Benefits of Workforce Planning ...............................................................................................131 Role of HR in Workforce Planning ..........................................................................................131 Four-Step Process for Workforce Planning .............................................................................131 Job Analysis ................................................................................................................................134 Job Analysis Benefits ...............................................................................................................136 Writing Job Descriptions and Specifications ...........................................................................136 Recruitment and Selection ........................................................................................................142 Employment Procedures ...........................................................................................................142 Staffing Options to Consider ....................................................................................................143 Employment Contracts, Records and Documentation .............................................................147

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Introduction An organization’s success is built on the quality of its employees. Often, it is the job of HR administration to recruit talented employees for positions and to ensure employees support the goals and vision of the organization. To be viable, workforce planning and employment strategies must be assimilated into the organization’s strategic objectives. In so doing, HR professionals must consider both short- and long-term needs of the organization so that staffing requirements can be anticipated in a timely manner. This section examines the following topics: 

The scope of responsibilities related to workforce planning



How to conduct a job analysis



Employment strategies that can offer innovative solutions for your resource needs



How to maintain records for employees

Workforce Planning Workforce planning is a disciplined process used to analyze an organization’s workforce and to prepare for future staffing needs. Workforce planning helps HR determine whether future skill needs will be met by recruiting, by training or by outsourcing the work.

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Organizations should conduct a regular and thorough workforce planning assessment so that staffing needs can be measured, that training and development goals can be established and that contingent workforce options can be used. Workforce planning examines the type of work organizations will do in the future and how that work will be performed. Workforce planning should consider internal factors such as employees’ skills and abilities and external factors such as technologic advancements, social, economic and political conditions. Figure 3-1 illustrates these considerations for workforce planning.

Figure 3-1. Workforce Planning Considerations

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Benefits of Workforce Planning Many HR professionals believe that the ultimate benefit from workforce planning is a vibrant, internal employee environment that transcends the boundaries between business units and geographies. Additional benefits of workforce planning are listed here: 

Allows managers to anticipate change rather than be surprised by events



Provides managers with strategic methods for addressing present and anticipated workforce issues



Prepares HR for recruitment needs, restructuring events, downsizing impacts and retraining

Role of HR in Workforce Planning HR departments are typically responsible for many of the workforce planning activities. Workforce planning is often a large-scale effort that requires budgeting and resourcing. Senior management and leaders should be involved, so they can contribute to the workforce planning process and provide the support you may need. Several best practices for your workforce planning efforts are listed here: 

Designate a specific member of the HR team to manage the process.



Find a leader to champion the plan.



Involve major stakeholders in the workforce planning process.



Align the plan with the company’s strategic business plan.



Coordinate the workforce plan with succession planning and career development initiatives.



Make workforce planning an ongoing activity, with continuous evaluation of changes in the internal and external environment that may affect the organization’s staffing needs.

Four-Step Process for Workforce Planning Use the four-step process shown in Figure 3-2 to help guide your workforce planning.

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Figure 3-2. Workforce Planning Process (Society for Human Resource Management, Practicing the Discipline of Workforce Planning 2010) Supply Analysis The purpose of supply analysis is to analyze the organization as it currently exists and to identify the supply of labor and skills that are essential to the organization. The supply analysis should evaluate the number of employees and workforce demographics such as retirement projections. A supply analysis also involves making projections of attrition due to the following factors: 

Resignations



Retirements



Internal transfers



Promotions



Involuntary terminations

By examining these factors, a profile can be developed to predict what will happen if no action is taken in recruiting, training or outsourcing. Demand Analysis The purpose of the demand analysis is to forecast the organization’s future workforce composition. This forecast should take into consideration a wide range of business issues, as shown in Figure 3-3.

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Figure 3-3. Demand Analysis Gap Analysis The next step in the process compares the supply model with the demand model to identify gaps between the composition of the current workforce and future workforce needs. See Figure 3-4.

Figure 3-4. Gap Analysis

The workforce planning professional may want to categorize a variety of future scenarios and then select the future that is most likely to occur, with contingency planning for alternative futures. When conducting this analysis, be sure to identify the additional number of employees with requisite skills and knowledge who will be needed and employees who will no longer be needed because of limited skills and knowledge.

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Solution Analysis Solution analysis is the process of creating strategies to close the gaps identified during the gap analysis. Strategies may include the actions listed here: 

Recruiting



Training and retraining



Using contingent staff



Outsourcing

The approaches selected will depend on whether the organization will need to expand, contract, restructure or rely on contingent staff to meet new workplace demands. After a plan has been created, have leaders evaluate whether the plan can anticipate and respond to future needs so that sound business decisions can be made and executed. Performance indicators will include the following measures: 

Will the solution lead to profitability?



Will the organization achieve a return on investment?



Will the solution lead to productivity?

For additional information on workforce planning, see Module 2: Recruitment and Selection.

Job Analysis A job analysis is the process of gathering, examining and interpreting data about the job’s tasks and responsibilities. HR professionals conduct job analyses during workforce planning and other employment activities such as hiring individuals, evaluating current employees, accommodating persons with disabilities and improving workplace efficiencies.

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A job analysis evaluates the job, not the person doing the job.

The final product from a job analysis is an understanding of all duties and responsibilities, a percentage of time spent for each group of tasks, the job’s relative importance in comparison with other jobs, the knowledge, skills and abilities (KSAs) needed to perform the job and the conditions under which the work is completed. A job analysis requires the cooperation of the employee in the position, his or her manager(s) and coworkers. Figure 3-5 lists the tasks to complete when conducting a job analysis.

Figure 3-5. Job Analysis Tasks (Society for Human Resource Management, Job Analysis: How Do I Conduct a Job Analysis to Ensure the Job Description Actually Matches the Duties Performed by the Employee in the Job? 2010)

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If there is more than one person doing the same job, make sure to observe and obtain feedback and information from more than one person. You will want to compare your findings with the employees and managers until you have an accurate reflection of the job duties and responsibilities.

Job Analysis Benefits Job analysis serves a wide variety of uses, as shown in Figure 3-6.

Figure 3-6. Uses of Job Analysis

Writing Job Descriptions and Specifications The data you gather from a job analysis can be used to help write job descriptions and specify the qualifications employees need in order to be successful in their

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job roles. When writing and updating job descriptions, HR professionals should work directly with managers who have specific knowledge of the job role.

Job descriptions are tools for workforce planning, recruiting, determining salary ranges and levels or grades, establishing job titles, creating employee’s job goals and conducting performance reviews. Job descriptions can also be used for career planning and, in some countries, for meeting legal requirements for compliance purposes. In some cases, having written job descriptions that accurately reflect the employee’s job duties and responsibilities can prevent legal issues. Organizations should audit their job descriptions every few years, usually in conjunction with a compensation study and whenever the organization’s purpose, mission or structure changes.

A well-written job description summarizes the most important features of a job, including a description of the work that details the required tasks, knowledge, skills, abilities, responsibilities and reporting structure.

The following outlines the benefits job descriptions provide organizations: 

Defines the jobs for performance planning, transfer, promotion, staff planning and career



Uses standard formats that allow for consistent application



Gives employees written definitions of their jobs



Provides reliable sources for comparing job salary surveys



Helps organizations move swiftly to increase or replace staff due to increased business or turnover



Helps the people responsible for workflow to perform systematic analyses of organizations’ work processes from start to finish (Society for Human Resource Management, Job Analysis: How Do I Conduct a Job Analysis to Ensure the Job Description Actually Matches the Duties Performed by the Employee in the Job? 2010)

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Elements of Job Descriptions Job descriptions are typically written by HR with input from management and should include the following elements. Summary

The summary is a four- or five-sentence overview that summarizes the purpose and objectives of the job. The summary section also covers the primary responsibilities of the job, the results the worker is expected to accomplish and the degree of freedom to act (for example, independently or under direct supervision). Figure 3-7 is an example of a summary for a Director of Commercial Sales.

Figure 3-7. Job Description: Summary Essential Functions

The essential functions are the tasks, duties and responsibilities of the job. The list often includes statements explaining why the function is required. Figure 3-8 is an example of essential functions for a Director of Commercial Sales.

Figure 3-8. Job Description: Essential Functions

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Nonessential Functions

Nonessential functions are desirable but unnecessary aspects of the job that could be reassigned to other employees if needed. Answering the following questions can help HR professionals determine if a function is nonessential: 

How often must the function be performed?



Can the function be performed by another employee?



Can the function be eliminated or outsourced?

Figure 3-9 shows examples of nonessential functions for a Director of Commercial Sales.

Figure 3-9. Job Description: Nonessential Functions Knowledge, Skills and Abilities (KSAs)

KSAs are the specific competencies required for job performance. Figure 3-10 provides several KSAs for a Director of Commercial Sales.

Figure 3-10. Job Description: KSAs

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Supervisory Responsibilities

Supervisory responsibilities include the scope of the person’s authority, including a list of job positions that report to the supervisor. Working Conditions

Working conditions should list the environment in which the job is performed, especially any unpleasant (or dangerous) conditions. Minimum Qualifications

Minimum qualifications include the minimum knowledge, skills and abilities required to enter the job. Success Factors

Success factors are personal characteristics that contribute to an individual’s ability to perform well in the job. Figure 3-11 provides two success factors for a Director Commercial of Sales.

Figure 3-11. Job Description: Success Factors

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Helpful Resources for Writing Job Descriptions Various resources are available for HR professionals to help develop job descriptions, including SHRM Online, http://www.shrm.org, and O*NET, the Occupational Information Network. O*NET, http://online.onetcenter.org, is the replacement for the Dictionary of Occupational Titles (DOT). O*NET moves occupational information into the technological age. It provides a comprehensive database of worker attributes and job characteristics applicable in both the public and private sectors and a common language for defining and describing occupations. O*NET’s flexible design also captures rapidly changing job requirements. The goal of O*NET is to improve the quality of dialogue among people who communicate about jobs in the economy, generate employment statistics and develop education and training programs. Employer hiring requirements will have the same meaning for the following groups: 

HR practitioners



Workers



Education and training developers



Program planners



Students

Job Specifications A well-written job description is the basis for writing effective job specifications. Job specifications can be a separate section of the job description or a separate document.

A job specification identifies the qualifications necessary for an incumbent to be able to perform the job. Job specifications must be carefully worded and reflect what is necessary for satisfactory performance (see Figure 3-12). For example, if three years of © 2012 SHRM

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experience and a bachelor’s degree in business would suffice, don’t list six years of experience and a master’s degree in finance.

Figure 3-12. Job Specifications

Recruitment and Selection Following the job analysis, the organization recruits and selects the most qualified candidate for an open position. Recruitment is the process of attracting, screening and hiring qualified people for a job. Selection is the process of hiring the most suitable candidate for a job. HR professionals should follow best practices in the following tasks: 

Developing a recruiting strategy



Developing internal and external recruitment sources



Becoming familiar with the most current recruiting tools and technologies



Gathering the information needed to make a selection decision

Detailed information about best practices in recruitment and selection is presented in Module 2: Recruitment and Selection.

Employment Procedures One of the primary responsibilities of HR is to manage the daily needs of an organization’s staff. Staffing responsibilities are considerable and often touch every milestone of an employee’s career, from signing an employment contract through retirement. If HR professionals are expected to respond quickly and © 2012 SHRM

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within legal limits, they must have an understanding of employment options and how these can apply to individual employees.

Staffing Options to Consider Today’s labor market presents many different ways to staff an organization with talent. It is best to discuss these options with the leaders in your organization and to consider the contractual and legal implications for each option. You should have terms such as full time and part time clearly defined and documented. Figure 3-13 provides descriptions of three traditional staffing options.

Staffing Option Full time

Description Employees scheduled to work a full workweek on an ongoing basis; benefit eligibility depends on the organization.

Part time

Employees scheduled to work less than a regular workweek on an ongoing basis; benefit eligibility depends on various factors (for example, number of hours worked).

Independent

Self-employed individuals hired on a contract basis for

contractor

specialized services. Independent contractors generally have a high degree of independence, judgment, skill and discretion. They are compensated on a contract or fee basis. Figure 3-13. Traditional Staffing Options

Flexible Staffing As organizations look for cost-effective and creative ways to recruit talent and to ensure the organization’s success and growth, flexible staffing offers employers several desirable alternatives.

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Also referred to as alternative staffing, flexible staffing uses alternative recruiting sources and workers who are not regular employees.

Figure 3-14 shows several situations of how flexible staffing can provide a solution for your workforce needs.

Figure 3-14. Flexible Staffing Scenarios

Figures 3-15 and 3-16 summarize important characteristics for some of the more prevalent types of flexible staff, organized according to whether the employees are on an organization’s payroll or administration functions are outsourced to staffing firms.

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Flexible Staffing Options Offered by the Organization

Type Temporary assignments

Description Employees hired to work on a specified job to supplement the regular workforce on a shortterm basis or for a specified period of time.

Temporary employees or

Employees hired to work directly on a

floaters

company’s payroll for a short period of time, which may require employees to float between positions or departments.

On-call workers

Employees who report to work only when needed.

Seasonal workers

Employees hired to perform seasonal work in a variety of industries such as agriculture, construction, tourism and recreation.

Figure 3-15. Flexible Staffing Options Offered by the Organization Flexible Staffing Options through Outsourcing

Type Finite temporary help

Description Workers recruited, screened and employed by a temporary help firm. The firm assigns individuals to work at client sites for a finite duration such as covering an employee’s medical leave.

Figure 3-16. Flexible Staffing Options through Outsourcing (continued to next page)

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Type Temp-to-hire programs

Description Workers hired on a temporary basis, usually through a temporary placement firm. Employees understand they may be offered regular employment if they perform competently.

Contract workers

Highly skilled workers supplied by a firm for long-term projects. A contract defines the terms of agreement for services provided by the worker.

Figure 3-16. Flexible Staffing Options through Outsourcing (concluded) Legal Considerations for Flexible Staffing The risk of assuming that an individual will not be regarded as your employee could be significant. In some countries, if an organization misclassifies workers, the organization may be required to pay fines and to provide workers with retroactive benefits available to regular employees. Organizations should check with legal sources to be sure they are compliant. Alternate Work Schedules Organizations may depart from the traditional workday or workweek to improve organizational productivity and employee morale by giving employees increased control over the hours they work. This approach can help employees balance the demands of their personal life and work life. They can remain employed and keep their skills current and still have the flexibility they require to take care of their personal needs. The use of alternative work schedules can also benefit the organization. Some potential benefits include savings on overtime payments, work assignment flexibility, increased productivity, reduced fatigue and lower rates of absenteeism. Descriptions of flexible work arrangements are summarized in the Figure 3-17.

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Type

Description

Flextime

Employees work an established number of hours per week with varying starting and ending times.

Compressed workweek

Employees work a compressed full week in fewer than five days.

Regular part time

Employees work less than full-time hours.

Job sharing

Two part-time employees share one full-time job.

Phase retirement

Employees gradually reduce the number of work hours before full retirement.

Telecommuting

Employees use electronic computing and telecommunications equipment.

Working from home

Employees work from their home rather than in the company office(s).

Figure 3-17. Alternative Work Schedules

Employment Contracts, Records and Documentation Once an organization decides on a staffing arrangement, the terms of the agreement should be put into writing. Reaching consensus on the specific mechanics of the arrangement requires attention to detail.

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Figure 3-18. Agreements

The best agreement is one that accurately and precisely reflects the underlying transaction. HR may need to work with legal counsel who are experienced in writing staffing contracts when defining the terms for staffing. Employment Contracts A written contract helps clarify employment terms and avoid misunderstanding and misinterpretation. While oral employment agreements are generally just as enforceable as written ones, some terms can become hard to prove if one side disagrees with specific terms or outright denies having agreed to the terms. When contracts are put in writing, they should be designed to meet the needs of the organization and the employee. Even with written contracts, any local and national laws apply. There are many items to consider in drafting a written employment contract. Specific contract terms will vary based on the organization, the job and any applicable laws. The following list names some items that may be covered in an employment contract:



Terms and conditions of employment



General duties and job expectations of the employee



Confidentiality and nondisclosure terms



Invention or non-piracy clauses



Compensation and benefits 148

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

Noncompete clauses



Change of control



Terms for resignation/termination



Relocation



Severance provisions



Appropriate signatures and dates

Maintaining Employee Records Organizations have their own unique employment record maintenance practices. Employee records can be maintained in paper form, scanned or completed and maintained electronically. No matter what format is used, the maintenance, security and retention requirements should be standardized and adhere to related laws (Society for Human Resource Management, Complying With Workplace Records and Reporting Requirements 2010). Figure 3-19 illustrates a typical employee life cycle and the major milestones at which HR professionals should generate and maintain employee records.

Figure 3-19. Employee Life Cycle

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Audit Checklists HR must give special consideration to where and how to maintain files, limiting access to protect applicants and employees from discrimination, identity theft, breach of privacy and any other legal violations. In some cases, HR may use checklists to ensure the policies are being met. Figure 3-20 is an example of audit checklist for personnel files.

Figure 3-20. Audit Checklist for Personnel Files (Society for Human Resource Management, Audit: Personnel Files: Employment (Personnel) Records Audit Checklist 2010)

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Documenting Employee Performance and Corrective Action For legal purposes, performance documentation is among the most important items in an employee’s file. Current performance information helps the supervisor justify the comments in the performance appraisal. Documentation of employee performance can show the reasoning that led to actions such as an increase in pay or a termination.

The following describe two common documentation practices: 

Performance diary: A performance diary is a record of crucial incidents or tasks that are performed by the employee.



Performance records: Performance records are notes that contain performance indicators such as unit measures, quantity and quality measures, and accounting and cost measures. Performance records should relate to the employee.

All performance documentation must be specific, objective, accurate and consistent. The following guidelines will assist in your documentation efforts: 

Document as situations occur.



Keep performance notes on all employees.



Document job-related observations.



Use objective criteria.



Support your observations with facts.



Focus on the deficiencies, not the perceived underlying cause.



Avoid emotion; write with respect.



Avoid conclusions; provide facts for others to use in reaching logical conclusions.

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Remember that others may read your comments, so be sure that your documentation is accurate and objective and that it focuses on behavior. Wellwritten documentation can provide the following benefits: 

Improve employee performance



Assist in communication with employees



Help identify training and career development activities



Reward and recognize good performance

Records Management Programs Reporting requirements are often confusing, and organizations may not understand what records to keep and for how long. A records management program can help reduce this burden. To help determine the requirements for a records management program, ask the following questions: 

What data and records currently exist?



Where are the records stored?



What records need to be kept and for how long?



Who should have access?



Is our record maintenance process efficient and compliant?



What system will work best to ensure compliance with changing requirements?

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An effective records management program is the blueprint for compliance with laws and regulations. A number of main elements should be considered when developing, implementing and maintaining a records management program: 

Definition of record



Retention schedule



Access



Storage and format



Security and privacy



Compliance with laws on record retention



Careful and timely destruction of documents



Consistent policy implementation and periodic audits (Society for Human Resource Management, Complying With Workplace Records and Reporting Requirements 2010)

Electronic Records Your organization’s records management program can include a policy that provides broad guidance concerning paper documents and electronically stored data. Electronic data includes e-mail, web pages, word-processing files, computer databases and any other information that is stored on a computer and that exists in a medium that can only be read through the use of computers. It can also include hidden electronic data left behind when a manager adds or deletes text to a performance review, formulas employees used for making spreadsheet calculations, edits to a memorandum and other unintentionally stored data.

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1.4: Change Management and Business Process Improvement for HR Professionals This section covers the following information from the Body of Knowledge: Behavior: 07. Answer or refer questions from employees as the first level of support 09. Monitor projects and suggest improvements (for example, ways to recruit better applicants; resources for internal and external training; ways to improve insurance, benefits, or compensation plans) Skills & Knowledge: 02. Change management concepts including terms and factors, resistance to change and communication techniques (but not including the implementation process)

Section 1.4: Change Management and Business Process Improvement for HR Professionals Introduction ................................................................................................................................157 Change Management .................................................................................................................157 Managing Change ....................................................................................................................157 Change Process Theory ............................................................................................................158 Managing Change in Organizations .........................................................................................159 HR’s Key Role in Managing Change .......................................................................................162 Change Drivers .........................................................................................................................163 Project Management ..................................................................................................................167 Common Project Characteristics ..............................................................................................168 Common Project Phases and Roles ..........................................................................................169 Project Planning Tools .............................................................................................................170 Project Success .........................................................................................................................172 Quality Improvement Methods and Analysis .........................................................................173 Quality Standards .....................................................................................................................173 Quality Improvement Theories and Methods ...........................................................................174 Data Gathering and Analysis Methods .....................................................................................178 Benchmarking ..........................................................................................................................182

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Introduction Change is constant in the world today for organizations and the people working in them. It is important for organizations to adopt a planned process that uses the principles of behavioral science to improve the way their organization functions. This process is called organizational development. This section examines the following topics: 

HR’s role in communicating and managing change in organizations



Project planning and management



Business process improvement activities

Change Management Managing Change HR professionals need to develop the skill of managing change. Change is the process of alteration or transformation that individuals, groups and organizations experience for external or internal reasons. Change may be the result of a largescale strategic planning movement or of the introduction of operational changes such as a new e-mail system. HR should be involved in managing the people issues resulting from change.

The key to managing the change process is to be proactive, rather than reactive. Participating in strategic planning allows HR professionals to have an impact on upcoming change initiatives.

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Organizations have to be flexible enough to adjust to consumer demands in order to succeed in today’s competitive economy. If an organization cannot change, it will be replaced by another organization that expects changing needs. Organizations that consistently do better than their competitors are not only open to change but also have an underlying motivation to profit from change.

Change Process Theory The change process theory explains the dynamics of organizational change. Understanding these dynamics allows HR professionals to offer the proper initiative to address the change. Figure 4-1 represents social psychologist Kurt Lewin’s three stages of the change process.

Figure 4-1. The Stages of Change Process Theory (Dessler 2008)

Unfreeze the current state: The purpose of this stage is to get people to accept that the change will occur. Reducing factors that work against change is crucial at this stage. Move toward the new state: During the second stage, the focus is on getting people to alter their behavior. Refreeze the new state: Once the change has been carried out and generally accepted, the focus should be on reinforcing and maintaining the changes. The focus is on making the new idea a regular part of the organization (Dessler 2008).

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Conditions That Make Change Possible In their article, The Psychology of Change Management (2003), Emily Lawson and Colin Price identify several conditions that make it easier for people to get to the point where they will consider or try a new way of doing things: 

Shared purpose. If people believe in the overall purpose and reason for the change, they will make an effort to change themselves.



Reinforcement systems. The following support factors must be present and must match the desired change initiative:



Structures



Management processes



Encouragement



Measurement



Communication



Consistent role models. The presence of a role model makes change real and demonstrates that change is possible. Many role models (in addition to managers and executives) need to be present throughout the organization to keep the message of change alive until it becomes part of the way the organization operates (Lawson and Price 2003).

Managing Change in Organizations In a business environment characterized by constant change, it is no longer enough for an organization to accept change. An organization must know how to embrace change, that is, how to adapt and make changes quickly, effectively and economically, with as little negative effect on the stakeholders (the organization, shareholders, employees and communities) as possible (Jellison 2006).

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The J Curve of Change In Managing the Dynamics of Change: The Fastest Path to Creating an Engaged and Productive Workforce, Jerald M. Jellison writes: “Change suggests progress, growth, success and also the possibility of uncertainty, failure and fear. The fundamental challenge of implementing change is how to help people through their fears and doubts so they experience the joys of growth and success. Knowing how to deal with these human aspects of change is important to your success as a manager and leader” (2006). To deal with these human dimensions of change, Jellison introduces the J Curve of Change. The J Curve of Change describes people’s performance, thoughts and emotions as they deal with change. As shown in Figure 4-2, first there is a drop in performance, followed by a ragged period of limited progress and then a steep climb in performance improvement.

Figure 4-2. The J Curve of Change (Jellison 2006)

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Jellison defines five stages in the J Curve of Change: 

Stage 1: The plateau. Before change is announced, employees are on a performance plateau, following conventional patterns where they are comfortable with the routine and have mastered their work. Resistance appears when change is announced and continues to grow with varying intensity as realization of the change moves into Stage 2.



Stage 2: The cliff. As employees are forced to do things differently, the Stage 1 pattern is reversed: failures now outnumber successes. The greater the difference between the new and old ways of doing things, the greater the drop in performance. Resistance becomes intense in Stage 2. Employees are openly opposed to the change and express their desire to return to the old ways.



Stage 3: The valley. This is the stage where the shift between the old and new ways of doing things can be observed. In the first half of Stage 3, net performance is still decreasing but at a slower rate. Employees’ negativity also decreases. Uncertainty still exists. As employees move into the second half of Stage 3, successes begin to outnumber failures, and cautious optimism appears.



Stage 4: The ascent. Performance improves remarkably, and the curve rises almost as rapidly as the earlier descent. Skills are sharpened, inefficiencies are eliminated, and problems are considered solvable challenges rather than insurmountable barriers. Employees are confident and motivated, driving performance higher.



Stage 5: The mountaintop. In Stages 2, 3 and 4, performance was below Stage 1 level. Now performance surges beyond its past highs as employees find new and creative ways to apply the new approach and to invent new solutions to old problems (Jellison 2006).

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Activation Activation is designed to promote early positive experiences, so the J Curve of Change becomes more like a checkmark: moving the person from resistance to conversion. Leaders can use the following key aspects of activation to change Resisters into Doers and Believers: 

Break the change down into small steps.



Front-load rewards.



Make it safe to make mistakes.



Provide guidance and training.



Encourage involvement.



Sympathize with negative feelings.



Make it easy to get started.



Stay committed to implementing the change.

The challenge for a leader or coach is to sympathize with those in Stage 1 and help others through the tough times. The leader’s main responsibility is in the first half of the J Curve—meeting regularly with people and communicating often. As employees achieve success, leaders should encourage celebration of results, so employees will be ready for the next change. “Even the boldest mountaineer pauses at the peak to savor the view” (Jellison 2006).

HR’s Key Role in Managing Change HR plays a key role in helping employees develop flexibility during change, focusing on the following actions: 

Involve employees in the change process, so they will be more committed to the outcome of change initiatives.



Communicate with employees and top management throughout the process.



Educate employees that change is an ongoing and necessary process.



Expect resistance and find ways to manage it.

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Show personal commitment, and present a positive attitude toward the changes.



Reinforce change with incentives.



Use peer and group influence to show support for the change.



Ensure that top management is visible and supportive of change initiatives.



Remind top management that it has discussed and processed the changes for a longer period of time than the rest of the organization; it will take time for others in the organization to arrive at the same place as top management.

Change Drivers Drivers of global organizational change and organizational development activity and their impact are described in Figure 4-3. Drivers of Change and

Impact

Organizational Development Efforts Leadership or business strategy

Changes in leadership and business strategy

changes

often go hand in hand and may lead to some of the additional changes listed here:

Mergers and acquisitions



Process improvements



Mergers and acquisitions



Organizational expansion



Value creation efforts

Organizational development support may be needed when a new group is brought into the organization. International merger and acquisition activities often require integration of different national and organizational cultures.

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Drivers of Change and

Impact

Organizational Development Efforts Process improvements

Quality and reduced time-to-market initiatives are often significant reasons for organizational change.

Cost reductions

Cost reductions produce immediate financial benefits for the organization. Efforts to reduce costs may include the following:

Organizational expansion



Reduce inventory



Identify/use lower cost resources



Evaluate suppliers



Rationalize or renegotiate

When an organization expands, HR professionals should be involved in the planning and carrying out of activities related to the following factors: 

Start-up



Planning



Development



Training

Including HR will ensure strategic alignment and assist in the risk analysis of global expansion activities. Figure 4-3. Drivers of Organizational Change (continued to next page)

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Drivers of Change and

Impact

Organizational Development Efforts Value creation

Value creation efforts tend to be long range, but they are important to the continued organizational growth.

Quick threat response

Organizations must be prepared to respond immediately across borders and around the world if any one of the following occurs: 

A competitor acts



Technology changes



Legal requirements are revised

Figure 4-3. Drivers of Organizational Change (Kotter 1996) (concluded) Figure 4-4 shows an integrated view of Lewin’s and Kotter’s change strategy models. It was developed by human resource practitioner Cesar Aguirre to effectively explain the theoretical and practical aspects of the change management process (Aguirre 2007). HR professionals may find this view helpful in describing the total process of change.

Adapted by Cesar Aguirre—The Human Assets Group Corp., 2006 (Aguirre 2007). Figure 4-4. An Integrated View of Change Strategy

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As explained earlier in this section, most models for change include some aspects of Lewin’s model by describing the following: 

Activities that prepare for change (Unfreeze)



Activities essential to making the actual change possible (Move)



Activities or steps that focus on acceptance and adoption of the change (Refreeze)

The model developed by John Kotter (Kotter 1996) describes change management techniques for successfully carrying out the change. 

Create a sense of urgency.



Assemble a strong guiding team.



Provide a clear vision.



Over-communicate.



Empower action.



Ensure short-term successes.



Consolidate progress.



Institutionalize.

The following recommendations may help to support over-communication during change processes: 

Develop a written communication plan.



Communicate consistently and frequently.



Identify HR as a point of contact for employee questions.



Plan enough time for providing clear responses.



Use multiple communication channels (for example, speaking, writing, Intranet, training bulletin boards).



Communicate all important change information as soon as the information is available.



Clearly communicate the vision, the mission and the objectives of the change management effort.

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Checklist for Assessing Readiness for Change HR professionals can assist organizations in evaluating readiness and planning for change by asking questions such as those shown in Figure 4-5.

Figure 4-5. Checklist for Assessing Readiness for Change

Project Management Project management is a discipline that involves planning, organizing and managing resources to bring about the successful completion of specific project goals and objectives. It requires skill to oversee a project from start to finish. A project team is a group of people who come together for a specific project.

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Common Project Characteristics A project is a series of tasks and activities. Projects vary in their duration and complexity; however, all projects have the characteristics listed here: 

Stated goal and objectives



Schedule with defined start and end dates



Budget that establishes limits on the dedicated use of resources, both monetary resources and human resources

Let’s look at an HR project example shown in Figure 4-6.

Common Project Characteristics Stated goal and objectives:

HR Example An HR manager defines a goal to audit all job descriptions and to reclassify employees following

All projects are established to fulfill some need or requirement in the

a merger between two organizations. Key objectives are to do the following:

organization. Within each project,



Review all job descriptions.

there is a goal to be reached.



Make changes to the job descriptions as

Objectives outline a path for

appropriate to reflect new responsibilities

achieving the goal.

under the merged organization. 

Reclassify employees as necessary.



Communicate and explain the changes to employees, supervisors and managers.

The HR manager establishes a completion date for

Schedule:

six months following the merger. Projects have a timeline that finishes in a target completion date. Figure 4-6. Common Project Characteristics (continued to next page)

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Common Project Characteristics Resource budget:

HR Example A project team is established that includes the HR manager, a compensation specialist and a staffing

All projects will use various resources (people, equipment, time and money).

specialist. Together they determine that they will need administrative help to make the necessary changes to the job descriptions.

Figure 4-6. Common Project Characteristics (concluded)

Common Project Phases and Roles Projects have similar phases and roles, including the following: 

Conception: The project idea is born, and goals and objectives are established. Senior management lend support as a project sponsor is needed to support the project’s efforts and ensure success. The purpose of a written project charter includes the following:



Describes the sponsorship



Provides a basis for measurement of the project’s success



Aligns the project with organizational strategy



Selection of manager and team: Managing a project involves many responsibilities, which can be categorized into three main roles:



Interpersonal: The project manager is a leader and liaison, with top priorities building team norms and fostering harmony.



Informational: The project manager is a spokesperson who gathers and spreads information and is responsible for helping team members communicate effectively.



Decisional: The project manager allocates resources, negotiates differences and encourages project progress.

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Planning, scheduling, monitoring and control: Throughout this phase of the process, the project manager creates a project schedule and assigns resources, and the work begins. The project manager is then responsible for the following tasks:



Overseeing the quality of work, the progress against the schedule and the use of resources needed to complete the project



Paying attention to risks and obstacles that could delay the project’s progress



Taking action to mitigate risk and to remove obstacles



Completion: In the same way the project conception was documented in a charter, project completion should be documented in a report that describes the following:



Accomplishments and gaps



Observations for future success



Next steps



Evaluation: Project managers may conduct evaluations at various points throughout the process. At a minimum, project effectiveness should be assessed at the end of the process, by referring to the goals and objectives defined at project start.

Project Planning Tools Project managers and their team members use a variety of tools and techniques to plan, schedule and manage their projects. Two tools most commonly associated with project management are Gantt charts and program evaluation and review technique (PERT) charts.

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Gantt Chart The Gantt chart is also known as a horizontal bar chart, a milestone chart or an activity chart. The Gantt chart graphically displays steps in a project in order by start date and plots their expected duration with start points and end points. Each activity includes the amount of work required to proceed from one point in time to another. Gantt charts are used to plan a project or to monitor the progress of a project. Figure 4-7 shows an example of a Gantt chart.

Figure 4-7. A Sample Gantt Chart Program Evaluation and Review Technique (PERT) Chart A program evaluation and review technique (PERT) chart is a project management tool used to schedule, organize and coordinate tasks within a project. It is generally used for very large, complex projects. A PERT chart presents a graphic illustration of a project. Circles or rectangles represent project milestones and are linked by arrows to show the sequence of the tasks. When building the PERT chart, two inputs are required:



Tasks required to complete the project



Sequence of the tasks

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Figure 4-8 is a sample PERT chart. Tasks that must be completed in sequence (A, B, C, E and F) are called dependent or serial tasks. These tasks take the longest time to complete and compose the critical path (that is, these tasks are crucial). For the whole project to be completed and referred to on time, critical path tasks must be completed on time. Task D is not dependent on other tasks and can be completed at the same time as the other tasks. It is referred to as a parallel or concurrent task.

Figure 4-8. Sample Section of a PERT Chart

Project Success To help ensure project success, here are some considerations that should be followed in any project: 

Continuous communication. Open, two-way communication is necessary throughout the entire project. The project manager should constantly update and explain the project to management, to customers and even to the project team; however, each person on the project team should also be responsible for this communication. Communication updates should be incorporated into the project plan.



Identification of success factors. The project team should identify the factors in the organization that will help them reach the project objectives.



Use of proven methodology. The project team should follow a consistent project plan and methodology that has been proven to produce results.



Use of contractors. If using third-party contractors, their role must be clearly defined.

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For more information on project management go to http://www.pmi.org/Business-Solutions.aspx.

Quality Improvement Methods and Analysis Quality Standards A number of methods for determining quality in organizations have been used in recent years. In many countries, national standards are the most familiar and therefore the most commonly used. The International Organization for Standardization (ISO) is the world’s largest developer of international standards. The goals of ISO are to provide the following: 

A common basis for continuous improvement



Defect prevention/variation and waste reduction



A starting point for a closer working relationship among suppliers

The main purpose of ISO is to enhance and help trade between countries. Using International Standards means that organizations can develop products and services that are widely accepted internationally. Therefore, organizations using International Standards can compete on many more markets around the world.

For more information on ISO, go to http://www.iso.org/iso/home.html.

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Quality Improvement Theories and Methods Quality assurance, customer satisfaction and continuous improvement are key objectives for organizations that provide products and services. Over the past thirty years several quality-related concepts and methods have been introduced and used by many organizations in order to more systematically and continuously improve the quality of their customer value proposition (CVP). 

Systems Theory



TQM (Total Quality Management)



Six Sigma



Lean Six Sigma

Systems Theory The systems theory is common in organizational development and is crucial to achieving quality. A system is composed of interacting parts that work together to achieve a goal. A system is meant to take in inputs, process them and produce outputs, as shown in Figure 4-9.

Figure 4-9. System

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According to the systems theory, organizations need to understand the relationship between input, process and output and the environment in which they occur. This understanding will help the organization improve its processes, making them more efficient and cost-effective. Total Quality Management (TQM) Total quality management (TQM) is a strategic, integrated management system for achieving customer satisfaction that involves all managers and employees. It uses methods to continuously improve an organization’s processes. Such a system can provide the following benefits: 

Find and eliminate problems that interfere with quality.



Identify customer(s) and satisfy their needs.



Eliminate waste.



Encourage pride and teamwork.



Create an environment that encourages creativity.

TQM is closely associated with the Japanese continuous improvement concept known as Kaizen. Kaizen is a Japanese business philosophy advocating the need for continuous improvement in quality, technology, processes, company culture, productivity, safety and leadership. Six Sigma Six Sigma is a strategy that identifies and removes the causes of defects and errors in manufacturing and business processes. This strategy originated in the 1980s and uses data and facts to measure performance of a process or a product. Six Sigma targets three main areas:



Improving customer satisfaction



Reducing cycle time



Reducing defects

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Figure 4-10. History of Six Sigma (Pande and Holpp 2002)

Six Sigma lends itself well to manufacturing, but it is increasingly used in financial industries, health care, government, public education and other environments. Here are some examples: 

A hospital system studied variations and made improvements in patient care practices, patient costs and hospital utilization. Other areas of focus were billing errors, excess inventory, excess overtime and employee turnover.



A debt collection agency gathered historical information and solved process problems, which improved debt collection rates.



The HR function of a service agency reduced the cycle time of recruitment, the payroll processing cycle, the number of employees working on weekends and employee attrition.

To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications; a Six Sigma opportunity is the total number of chances for a defect.

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Six Sigma uses two processes, DMAIC and DMADV: 

DMAIC (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specifications and looking for incremental improvement.



DMADV (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels.

Both Six Sigma processes are carried out by two groups: 

Six Sigma Green Belts (employees)



Six Sigma Black Belts (project leaders)

The processes are overseen by Six Sigma Master Black Belts (quality leaders). Lean Six Sigma Lean Six Sigma is a strategy that eliminates waste and improves process flows. Lean focuses on resource optimization through logistical coordination and inventory minimization. The difference between Lean Six Sigma and Six Sigma is as follows: 

Lean Six Sigma is about eliminating waste, taking time out of processes and creating better flow.



Six Sigma is a business strategy built around the concept that organizations gain a competitive edge by reducing variations, thus defects. Eliminating variations is a long and involved process.

To make a decision about whether to use Lean Six Sigma or Six Sigma tools, you can look at the types of business problems that need to be solved.

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Lean Six Sigma tools are more appropriate if the following business problems exist: 

There seems to be a lot of waste.



There is a need to minimize inventories and redundancies.



There is a need to improve work flows.



There is a need to speed up processes.



There are human mistakes.

Six Sigma tools are more appropriate if the following business problems exist: 

There are quality issues.



There is too much variation.



There are complex problems.



There are challenging root cause identifications.



There are numerous technical considerations.

For more information on Six Sigma go to http://www.isixsigma.com/sixsigma/six_sigma.asp.

Data Gathering and Analysis Methods Improvement efforts begin with understanding the problem. In some cases, the problem may be evident and can be easily fixed, while in other cases the problem may involve many business functions and input from thousands of employees. The tools outlined below are often used to help gather and analyze data for improvement initiatives: 

Process-flow analysis



Cause-and-effect diagram



Histogram



Scatter diagram



Pareto chart



Gantt chart

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Process-Flow Analysis A process-flow analysis (or flowchart) is a diagram of the steps involved in a process. This diagram shows a process and its outputs. Figure 4-11 illustrates a process flow for the assembly of a pen.

Figure 4-11. Process Flowchart Cause-and-Effect Diagram A cause-and-effect diagram (or Ishikawa diagram or fishbone diagram) maps the factors that affect a problem or a desired outcome. HR professionals use causeand-effect diagrams to explain employee turnover or to better understand a process failure. Figure 4-12 shows a cause-and-effect diagram.

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Figure 4-12. Cause-and-Effect Diagram Histogram A histogram is a graph that shows how a single type of measurement is distributed. The data is represented by rectangles of varying heights, with the rectangles usually touching. Data that is normally distributed has a histogram that is bell-shaped. Many other distributions do not follow this pattern and can still be depicted by a histogram. Figure 4-13 is an example of a histogram.

Figure 4-13. Histogram

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Scatter Diagram A scatter diagram shows possible relationships between two variables. For example, an HR professional wants to find out if there is a relationship between years of education and amount of income. The years of education are placed on one axis and the amount of income on the other. In the scatter diagram example in Figure 4-14, the amount of each factor rises along an imaginary diagonal line. The level of education and the amount of income are rising together. The scatter diagram makes it easy to see points or conditions that do not fall near this line.

Figure 4-14. Scatter Diagram Pareto Chart A Pareto chart is based on the Pareto Principle, which states that 80% of effects come from 20% of causes. A Pareto chart is a vertical bar graph where the bar height shows the frequency or impact of causes. Figure 4-15 is a sample Pareto chart.

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Figure 4-15. Pareto Chart Gantt Chart A Gantt chart, described previously in this section, is helpful for analyzing project timelines and for tracking your data analysis processes. See Figure 4-7 for an example of a Gantt chart. Additional charts and diagrams are presented in Section 1.2: Gathering, Measuring and Reporting HR Data.

Benchmarking Benchmarking is the process of measuring key criteria that can be compared across organizations. Benchmarks are useful because they provide insights into the ways other organizations manage similar functions. An organization can benchmark data for almost any aspect of its operation.

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Benchmarking, depicted in Figure 4-16, involves two organizations that have previously agreed to share information about their processes or operations. Any organization has the right to retain information considered private. The companies may or may not be competitors. Third-party services are often used when the direct sharing of information may breach confidentiality, privacy or competition regulations.

Figure 4-16. Benchmarking The benchmark you use must be comparable to the function or situation you are assessing. For example, turnover can differ widely from organization to organization and from branch to branch within an organization. The industry and the number of employees in an organization can impact human capital metrics. When comparing your organization to others, be sure that the other organizations are in similar industries and have similar employee numbers.

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Kinds of Benchmarking Organizations choose to compare themselves to other organizations for many different reasons. The benchmarks are based on a very wide range of factors, from energy use to research and development expenditures. The following describes four kinds of benchmarking: 

Internal benchmarking: when comparisons are made inside the organization



Competitive benchmarking: when comparisons are made against competitors



Industry benchmarking: when the organization’s standards are compared to the standards of other organizations in the same industry



World-class benchmarking: when the organization’s level of achievement is compared to the achievement of the best organizations in the world, regardless of industry (Hindle 2008)

HR Benchmarking Benchmarking can be applied to the HR function. Figure 4-17 lists examples of human resource criteria that may be helpful for your organization to benchmark.

Benchmark Examples 

Health care cost per employee



Turnover rate



Pay and benefits as a



Turnover cost

percentage of operating



Time to fill jobs

expense



Human value added



Cost per hire



Return-on-training investment Figure 4-17. Human Resource Benchmark Examples (Society for Human Resource Management 2006)

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networks and Internet platforms allow people around the world to post questions and get answers quickly and easily. Informal benchmarks are less exact, but they are often faster and less expensive.

There is a difference between the terms benchmarking and competitive analysis. Competitive analysis compares a product from the organization with a competitor’s product. Characteristics and prices of both products are compared. Benchmarking not only compares price and characteristics but may also compare additional factors such as how the product is designed, developed and distributed. Benchmarking Limitations Benchmarking is a difficult process that demands commitment for success. Consider the following limitations before deciding to benchmark:



Availability of competitors that are suitable for comparison



Difficulties in comparing data



Constraints in resources, such as time, money and expertise



Resistance from staff (Business Performance Improvement Resource 2011)

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1.5: Organizational Policies, Procedures and Regulations

This section covers the following information from the Body of Knowledge: Behavior: 04. Make sure the organization follows legal and industry regulations Skills & Knowledge: 08. Organizational policies and procedures 09. HR ethics and professional standards 10. Confidentiality and privacy rules that apply to employee records, company data and individual data

Section 1.5: Organizational Policies, Procedures and Regulations Introduction ................................................................................................................................189 The Influence of Law on the Organization ..............................................................................189 Jurisdiction ...............................................................................................................................193 Legal Areas Monitored by HR..................................................................................................193 Laws of Employment ...............................................................................................................195 Compensation and Benefit Laws ..............................................................................................196 Occupational Health and Safety ...............................................................................................196 Anti-Discrimination, Harassment and Fair Work Laws ...........................................................197 Exploring the Legal and Regulatory Issues for Your Organization .........................................197 Considerations Involving Legal and Regulatory Environments ..............................................198 HR Ethics and Professional Standards ....................................................................................205 HR’s Role in Promoting Organizational Ethics .......................................................................205 Corporate Social Responsibility (CSR)....................................................................................212 Policies, Procedures and Work Rules ......................................................................................219 HR Responsibilities for Workplace Policies, Procedures and Work Rules .............................219 Confidentiality and Privacy Regulations .................................................................................222 Privacy Protection ....................................................................................................................222 Developing Employee Privacy Programs ................................................................................224

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Introduction Legal systems impact an organization’s mission and ability to conduct its business activities. The legal and regulatory environment is often complex, which can provide a challenge for HR management. To be effective, it is crucial for HR professionals to conduct a comprehensive review of related laws and to understand how these laws affect the organization’s business activities and employees. This section examines the following topics: 

The influence of law on the organization



Legal areas monitored by HR professionals



HR ethics and professional standards



Policies, procedures and work rules



Confidentiality and privacy regulations

The Influence of Law on the Organization HR professionals must be proficient learning about related laws and applying these laws to employment practices. For example, if your organization is required to follow certain safety and health laws, these laws will direct how your safety practices are shaped and enforced. If your organization is conducting business abroad, you will need to understand the laws of not only your country but also the laws of countries where your organization has a presence. Figures 5-1 through 5-3 demonstrate how laws across country borders can impact your organization.

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Figure 5-1. Example 1 of Laws across Country Borders

Figure 5-2. Example 2 of Laws across Country Borders

Figure 5-3. Example 3 of Laws across Country Borders Seeking Legal Advice Each of the previous examples requires the HR function to carefully evaluate the legal and regulatory environment in the context of the organization’s strategic mission. It is recommended you seek expert legal advice for specific legal disciplines and the laws of specific countries. Legal professionals can help you identify potential concerns, mitigate undesirable consequences and ultimately avoid litigation.

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The complexities of legal and regulatory issues are also reflected in the legal profession. Lawyers are able to practice law within predetermined geographies and specialties. As an HR professional, you will often seek advice from more than one lawyer. Or your organization’s legal counsel may engage additional experts. Rule of Law The rule of law states that all citizens are subject to the laws of their country, that no individual is above the law, and that everyone must obey the law. Due process protects citizens against abuses of power by governments and deprivation of their rights. There are three major legal systems of the world. Definitions are listed in Figure 5-4. Many national legal systems are actually hybrids, blending civil, common and religious laws.

Type of

Description

Law Civil

Civil law is based on written codes, such as laws, rules or regulations created by legislative bodies. The law is applied in a deductive manner to each matter brought before a legal court, which will make a decision by applying the specific language of the directive to each specific case. Civil law is the most prevalent form of law.

Common

Common laws have evolved over time through court decisions and legal precedence among English-speaking people. Common law is created by judges, unlike civil law, which is created by legislators.

Religious

Religious laws are based on religious beliefs and codes. Figure 5-4. Legal Systems of the World

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For those organizations conducting business abroad, HR should seek legal advice for how international and extraterritoriality laws may apply to HR issues. Definitions for each type of law are described in Figure 5-5. Type of Law International law

Description International law involves both the relationships between nations and the treatment of individuals within national boundaries. Jurisdiction usually comes from treaties, conventions, pacts, protocols and covenants. Nations may also enter into joint agreements regarding such employmentrelated issues as totalization (alignment of pension plans) and visas.

Extraterritoriality

Extraterritoriality law is defined with the following two

law

definitions: 

Being exempt from local law, or having immunity from the laws of the country in which one is living



The extension of the power of a country’s laws over its citizens outside that country’s sovereign national boundaries

For example, the United States has enacted a series of laws that relate to employment. Under certain circumstances, these laws govern the non-United States’ operations of United States’ organizations. Foreign compulsion exception applies when a law of an organization's home country does not apply because it is in conflict with laws of the country where the organization is doing business. Figure 5-5. Legal Systems of the World © 2012 SHRM

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Directly versus Indirectly Binding Law An international law or treaty directly binds the nation-states that are participants, not their individual citizens. These states are bound to change these legal obligations into national laws. For organizations and their employees, these international or supranational laws and agreements are indirectly binding.

Jurisdiction Jurisdiction refers to the right and power to interpret and to apply the law, often within a certain geographical region. The question of jurisdiction may directly affect some organizations. Under territorial jurisdiction, a legal body may decide cases based on any activity that occurs within its borders (with some exceptions).

Because some organizations operate across more than one jurisdiction, they are liable to a litigation phenomenon called jurisdiction or forum shopping. This situation occurs when plaintiffs bring their suit in a jurisdiction that is more likely to be sympathetic to their claims. The change in jurisdiction may mean expanded discovery rules will apply. The organization’s documents and communications may become public, and global reputations may be damaged in the process.

Legal Areas Monitored by HR Many federal laws, common laws and international laws help frame the relationship between organizations and employees. These laws protect and secure the rights of employers as well as employees, both union and nonunion.

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HR professionals often play a key role in employee relations by developing policies and procedures, supportive communication and training programs. HR helps keep the entire organization compliant. The legal environment monitored by HR typically includes, but is not limited to, the areas identified in Figure 5-6. These legal areas are described in the sections to follow.

Figure 5-6. Legal Areas Monitored by HR

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Laws of Employment Laws of employment typically address the following employment conditions: 

Work rules: Work rules include items like hours worked, time off and length of shifts.



Redundancy: Redundancy (also known as layoff) refers to instances in which employment ends due to reductions in the number of employees needed, relocation of the facility or other situations.



Termination: Termination refers to instances when an employee’s employment ends either for voluntary reasons (quitting, end of contract, mutual agreement) or involuntary reasons (misconduct, disciplinary).



Employment contracts: The employment contract law includes both the legal aspects of the agreement between the employee and employer as well as cultural influences.



Immigration and/or citizenship laws: Many countries have various levels of restriction regarding employment of nonnationals of their country. These laws often apply to government employment, the military and other positions.



Labor or industrial laws, customs and practices: These laws address various issues concerning employment conditions. The customs and practices include conditions that cannot be directly attributed to a written law or to terms in the employment contract. Two examples are described in Figures 5-7 and 5-8.

Figure 5-7. Local Customs versus Department Policy

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Figure 5-8. Local Practice versus Employment Agreement

Compensation and Benefit Laws Compensation (also called remuneration) and benefit laws describe the conditions for how employees are compensated (or remunerated) and the benefits accorded employees as part of their employment. These laws vary greatly from country to country. Legislation has been enacted for the following reasons: 

To arrange a minimum wage



To govern overtime pay



To protect employees from wage discrimination



To decide how compensation is taxed

HR professionals should have a thorough understanding of compensation and benefits laws for all jurisdictions where the organization has a presence.

Occupational Health and Safety Organizations operating in the twenty-first century must comply with laws, regulations, minimum requirements and recommended industry best practices regarding the management of occupational health, environmental, safety and quality aspects across the value chain. In the International Labour Organization (ILO) health, safety and environment (HSE) guidelines, every employee has a right to a safe workplace, safe environment and competent supervision, among others. Because of the nature of HSE regulations and the need to ensure strict compliance, HR plays a primary role in managing the accountability process. © 2012 SHRM

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Some countries have practices that are quite lax in comparison to those in other countries. In these cases, employers expect the HR professional to advise and develop policy to ensure that in their place of work employees know they are highly regarded.

Anti-Discrimination, Harassment and Fair Work Laws Anti-discrimination, harassment and fair work laws vary from country to country. These laws may be influenced by cultural and societal norms. HR professionals should have a thorough understanding of anti-discrimination, harassment and fair work laws for all jurisdictions where the organization has a presence. The HR professional’s responsibility is to develop policy and practices consistent with the corporate culture to ensure employees of their care and also to be seen as a preferred and best practice employer.

Exploring the Legal and Regulatory Issues for Your Organization Identifying the legal and regulatory issues for your organization requires a disciplined and ongoing process. The five steps outlined in Figure 5-9 can help guide your exploration.

Figure 5-9. Identifying Legal Issues for Your Organization

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Throughout the five-step process, seek the advice of your organization’s legal counsel to help with the following: 

Identifying issues



Interpreting related laws



Ensuring that the policies and procedures are compliant

In addition, the following additional resources can help you understand local laws and regulations: 

Chambers of commerce, boards of trade or business networks



Law schools (both the schools’ libraries and faculty)



Consultants



Legal firms



Industry associations

Considerations Involving Legal and Regulatory Environments

Figure 5-10. Anonymous Quote There are many questions you need answered as you identify the legal and regulatory issues for your organization. The following worksheets provide a list of questions you can use to inventory the parameters of your legal environment. There are three worksheets. Each worksheet contains questions that pertain to one dimension of the legal environment. Figure 5-11 summarizes the purpose for each worksheet.

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Primary Question Answered by

Purpose

Worksheet Worksheet 1: Where does the



Identify the localities where the organization has a presence.

organization operate? 

Evaluate if additional jurisdictional issues exist.

Worksheet 2: What does the



Identify how the products or services provided by the

organization produce?

organization impact the legal environment. 

Locate regulations specific to your organization’s industry.



Determine how the products or services produced impact employee work conditions.

Worksheet 3: What are the



Inventory the laws and regulations

parameters of the laws affecting

that affect employee and labor

employee and labor relations?

relations. 

Focus on the laws and regulations monitored by and relevant to HR.

Figure 5-11. Worksheet Summary Worksheet 1: Where Does the Organization Operate? Directions: Figure 5-12 contains exploratory questions about where your organization has a presence. Your responses represent the potential geographical areas whose laws should be considered as part of your legal environment.

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Exploratory Question

Your Response

What is your location?

Country

State, Province, etc.

Where does the organization

Country

State, Province, etc.

Country

State, Province, etc.

Country

State, Province, etc.

have other physical locations? For example, divisions, headquarters, offices, plants, warehouses, etc. To where does the organization export products or services? From where do your suppliers import materials, goods or services to the organization? Figure 5-12. Worksheet: Organization’s Geographical Presence Worksheet 2: What Does the Organization Produce? Directions: Figure 5-13 contains exploratory questions about laws and regulations associated with the products or services produced by your organization. These responses identify laws and regulations that impact your organization’s strategic planning. Depending on the number of territorial jurisdictions identified in the previous worksheet, it may be necessary to complete more than one production worksheet.

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Exploratory Question

Your Response

What industry-specific regulations, tariffs, etc., guide your organization? Carefully consider the locations of production facilities. Are there territorial

List the countries whose regulations should

jurisdiction considerations?

be considered.

What laws or regulations address requirements about employee training or credentials? Carefully consider the locations of production facilities. Are there territorial

List the countries whose regulations should

jurisdiction considerations?

be considered.

What industry regulations or mandates relate to employee safety? To handling of materials? Carefully consider the locations of production facilities. Are there territorial

List the countries whose regulations should be considered.

jurisdiction considerations? Figure 5-13. Worksheet: Summary of Industry-Specific Laws and Regulations (continued to next page)

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Exploratory Question

Your Response

Is your organization affected or influenced by laws with respect to intellectual property rights? If so, what laws apply? List the countries whose regulations should be considered.

What other industry-specific legal issues should be considered?

Figure 5-13. Worksheet: Summary of Industry-Specific Laws and Regulations (concluded) Worksheet 3: Labor Laws and Codes Worksheet Directions: Figure 5-14 provides exploratory questions about laws and regulations associated with labor laws and codes. Depending on the number of territorial jurisdictions identified in the earlier worksheet, it may be necessary to complete more than one labor laws and codes worksheet.

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Exploratory Question

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Your Response

What laws guide the contract of employment?

List the countries whose regulations should be considered.

What laws guide hiring practices?

List the countries whose regulations should be considered.

What laws impact time worked? Time off?

List the countries whose regulations should be considered.

What laws guide wages and compensation?

List the countries whose regulations should be considered.

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Exploratory Question

Your Response

What laws apply for labor relations?

List the countries whose regulations should be considered.

What laws influence health and safety? Of employees? At the workplace? List the countries whose regulations should be considered.

What laws influence workplace closure? Transfer of ownership? Corporate restructuring?

List the countries whose regulations should be considered.

Figure 5-14. Worksheet: Summary of Labor Laws and Codes (concluded)

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HR Ethics and Professional Standards Today’s investors are very concerned with the ethical practices of the organizations in which they choose to invest. Investors and customers alike closely scrutinize how organizations conduct their business. They are asking the types of questions as shown in Figure 5-15.

Figure 5-15. Ethical Questions Ethics is a system of moral principles and values that creates appropriate conduct. In a business environment, the rules or standards of ethical behavior should rule the conduct of the following members of the organization: 

Officers



Directors



HR professionals



All employees

HR’s Role in Promoting Organizational Ethics HR plays an important role in organizational ethics. Ethical issues in HR raise fundamental questions about fairness, justice, truthfulness and social responsibility, but ethical issues can be difficult to resolve.

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Often, HR’s role includes the following tasks: 

Deciding on the organization’s ethics policy



Establishing supportive procedures and training



Creating a culture where ethics is valued and violations will result in disclosure



Conducting investigations and using discipline, when required

HR should be involved enough in organizational operations to be able to recognize ethical violations. HR should be seen as a responsible management party to whom violations may be reported. Sometimes HR professionals must be risk takers to effectively fulfill these responsibilities. Many ethical situations are not clear-cut and require experience and expertise to come up with a workable solution. Reporting Ethical Violations In accordance with the law, organizations should create a quick, effective and consistently applied method for a nonsupervisory employee to report ethical violations without retribution (whistle-blowing). HR should take a leading role in responding to, investigating and internally resolving these reports. Figure 5-16 provides a sample procedure that an organization could create for the reporting of ethical violations.

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Step

Section 1.5: Organizational Policies, Procedures and Regulations

Action 

Step 1

Employee directs concerns to his or her immediate supervisor within five (5) working days of the date the incident occurred.

 Step 2

Supervisor responds to the complaint within five (5) working days.

If the problem is not resolved by the initial meeting: 

Employee submits a written complaint to the department head within five (5) working days and forwards a copy of the letter to HR.



The letter must include the following information:

Description of the incident o Date the incident occurred o Suggestions for resolution o Date the employee met with the immediate supervisor o Copy or summary of the immediate supervisor’s response Step 3

The department head takes the following steps: 

Schedules a meeting with the employee within five (5) working days to discuss the complaint

 Step 4

Issues a decision within five (5) working days of the meeting

If the employee is dissatisfied with the decision of the department head: 

Employee appeals the decision in writing to HR within five (5) working days.



HR investigates the complaint.



HR calls a meeting with the parties directly involved to facilitate a resolution. Figure 5-16. Process for Reporting Ethical Violations (continued to next page)

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Step

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Action 

Additional

If the employee fails to initiate a timely appeal, the problem will be considered settled.

Guidance 

The conflict resolution procedure can only be initiated by an individual and not by a group of employees.



The organization has the right to impose appropriate disciplinary action for any conduct it considers to be disruptive or inappropriate.



No employee will be retaliated against for filing a complaint under this procedure.

Figure 5-16. Process for Reporting Ethical Violations (Society for Human Resource Management, Conflict Resolution Policy and Procedure 2010) (concluded) Ethics Hotline

A whistle-blower or ethics hotline is a helpful tool for employees to report ethical violations. A whistle-blower/ethics hotline provides the following benefits: 

Provides a confidential way for employees to report issues to management



Lessens the potential for retaliation



Reduces the possibility of inappropriate or illegal actions

HR’s Role in Creating an Ethical Environment How do HR professionals manage the dilemmas they face when dealing with ethical issues in the workplace? How can they give advice to their organizations about the options available? Creating and enforcing an organizational code of ethics is one way.

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A code of ethics can be defined as principles of conduct within an organization that guide decision making and behavior. This code is the foundation from which organizational norms and attitudes arise. These norms are important in all aspects of the organization, including the following: 

New employee training



Performance standards



Organizational planning

The common frame of reference provided by a code of ethics is very important while an organization is working on a strategic planning process. Below are steps that organizations can take to establish an ethical workplace: 

State corporate values in no more than a few sentences. Ensure the values are published and understood by employees and customers alike.



Act according to the published values.



Conduct ethical awareness training for employees.



Outline specific responsibilities for decision making to ensure accountability.



Encourage open discussion about controversial issues, ethical questions and anything that may fall into gray areas.



Do not allow retaliation against those who voice ethical concerns in good faith.



Use corrective discipline, as required.



Have clear policies regarding conflicts of interest.

The process of creating an ethical environment should always begin at the top of the organization. An ethical environment should receive continuous reinforcement from leadership at all levels.

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Who Handles Ethical Issues? There are many people within the organization whose involvement in ethics issues is critical. These include the following roles: 

Chief executive officer (CEO): The first and most important is the chief executive officer of the organization. The CEO should establish the necessary ethical standards and conduct business in a manner consistent with those standards.



Chief financial officer (CFO): The CFO must ensure that all the organization’s financial records are accurate. Financial records are an essential part of ethics compliance.



Internal auditing group: Along with the organization’s external auditors, these individuals also ensure accurate reporting and compliance.



General counsel: The organization’s general counsel provides important legal guidance and is also responsible for corporate and governmental compliance.



Chief human resources officer (CHRO): The CHRO assists in the development of the following ethics issues:



Policy



Training



Enforcement



Ombudsperson or chief ethics officer: The ombudsperson or chief ethics officer oversees the ethics function. The ethics officer can be effective by doing the following:



Reporting to the CEO and the board of the organization



Being highly visible



Being a dedicated confidential resource



Chief risk officer (CRO): The CRO of an organization is the person responsible for the effective control of significant risks to the organization. A main priority for the CRO is to ensure that the organization is in full compliance with applicable regulations. This position may also deal with the following:

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

Insurance



Internal auditing



Corporate investigations



Fraud



Information security

Section 1.5: Organizational Policies, Procedures and Regulations

If corporate ethics includes legal compliance, ethical conduct and corporate social responsibility, it is helpful to group these matters under one corporate officer. If these responsibilities are divided among several officers, different approaches may result. The chief ethics officer communicates standards of conduct in terms of organizational values and culture and instills these standards throughout the organization. This position may also be involved with the ethical sensitivity of major organizational decisions. Ideally, an effective ethics officer would be consulted on business issues that pose value-laden decisions. However, this person should not be the only one responsible for ethics. All levels of management must support policy development, training and enforcement. The SHRM Code of Ethical and Professional Standards The SHRM Code of Ethical and Professional Standards in Human Resource Management, originally developed in 1972, was revised in November 2007 to reflect changes in the HR profession. It provides useful and practical guidance in ethical decision making. The reputation of HR professionals depends on each of us serving the needs of our various stakeholders in the most morally responsible manner possible and leading our individual organizations to conduct business in an equally responsible manner. The six provisions of the code, outlined in Figure 5-17, apply specifically to SHRM members.

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Figure 5-17. SHRM Code of Ethics Provisions

Visit the SHRM website at http://www.shrm.org/ethics for additional information on ethics.

Corporate Social Responsibility (CSR) Today, organizations are more aware of social practices and of how business can impact people, communities and the environment and have a lasting economic influence. HR professionals must be familiar with trends that relate to corporate social responsibility (CSR) and recognize how CSR efforts can support organizational goals and values. To explain the case for CSR, John Elkington developed the concept of the three pillars. The three pillars concept provides three criteria for organizational success: People, Planet and Profit. This concept is illustrated in Figure 5-18 (Savitz 2006).

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Figure 5-18. CSR Strategy Examples for these three CSR strategy pillars include the following: 

People provide fair and beneficial business practices toward labor and the community in which a corporation conducts its business.



Planet provides sustainable environmental practices.



Profit provides lasting economic impact to the economic environment, not just internal profit.

More organizations are now including CSR as one of their core organizational strategies. In his book, The Triple Bottom Line, Andy Savitz compares corporate focus in 1950s and 1970s to today’s focus on CSR. This comparison is illustrated in Figure 5-19.

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Figure 5-19. Comparison of Corporate Focus in 1950s, 1970s and Today (Savitz 2006)

In other words, today an organization's responsibility should be to its stakeholders, rather than to its shareholders. Organizations should focus on social causes that align with their businesses to create shared value across their stakeholders (Porter and Kramer, Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility December 2006). Philanthropy One way to demonstrate CSR is through philanthropy. Philanthropic activities are increasing among modern organizations that believe their success depends on the support of society. By participating in philanthropic activities, organizations can make long-term investments in causes that help society while enhancing the company’s reputation with stakeholders.

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Philanthropy is often recognized through implementation of corporate citizenship programs such as establishing a charitable fund, staffing volunteer programs and partnering with nonprofit organizations. More and more organizations recognize that including corporate citizenship in their goals and objectives fosters sustainable growth. Figure 5-20 lists the goals and benefits of corporate citizenship programs.

Figure 5-20. Goals and Benefits of Corporate Citizenship Programs A recent trend in citizenship programs is to seek a charitable organization that offers opportunities for its employees to volunteer without incurring administrative costs. These programs form a partnership of citizenship and sustainability. Figures 5-21 through 5-23 show examples of successful programs.

Figure 5-21. Example 1 of a Corporate Citizenship Program (Society for Human Resource Management, The Changing Face of CSR Partnerships 2010)

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Figure 5-22. Example 2 of a Corporate Citizenship Program (Society for Human Resource Management, The India Way 2010), (Bartlett and Ghoshal 2002), (Tata Sons, Ltd. 2008)

Figure 5-23. Example 3 of a Corporate Citizenship Program (Walmart 2010)

For more information on the financial performance of leading sustainability-driven companies worldwide, visit the following websites:



Human Development Index (HDI): http://hdr.undp.org/



Environmental Sustainability Index (ESI): http://sedac.ciesin.columbia.edu/



Environmental Performance Index (EPI): http://epi.yale.edu/



Genuine Progress Index (GPI) Atlantic: http://www.gpiatlantic.org/



Dow Jones Sustainability Indexes: http://www.sustainability-index.com/



FTSE4Good Index: http://www.ftse.com/

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Environmental Sustainability Many corporations are working toward environmental sustainability goals. Sustainable development can be defined as “meeting today’s needs without hampering future generations” (Wirtenberg, Russell and Lipsky 2008). Sustainability projects generally target environmental issues, such as the following: 

Climate change



Water shortages



Energy conservation



Health care (Schwab 2008)

The United Nations collaborating center, called the Global Reporting Initiative, has published the Sustainability Reporting Guidelines to promote benchmarking standards for sustainability. More than 1,500 organizations have adopted these guidelines (Global Reporting Initiative 2011).

HR’s Role in Implementing CSR HR can do the following to support the implementation of the organization’s CSR strategy: 

Help create an ethical management and staff through hiring:



Include scenario-based values questions in the interview process.



Perform reference and background checks to learn about the applicant's past behavior and integrity.



Emphasize the company’s adherence to its code of conduct.



Examine transgressions for organizational significance:



Consider the possibility that the work environment may have contributed to the transgression.



Correct any flaws in the ethical infrastructure of the organization.



Serve as a connection with the organization’s communities:



Identify opportunities for social engagement, and establish partnerships.

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

Section 1.5: Organizational Policies, Procedures and Regulations

Promote volunteer opportunities, and identify employee expertise with community need.



Ensure that employees and suppliers understand and support the organization’s ethical code by using the following techniques:



Issue regular communications about the organization’s CSR policy to all stakeholders.



Train management to use ethical criteria in evaluating employee performance.



Reward employees for ethical actions under difficult conditions.



Plan periodic reviews of suppliers’ compliance with the organization’s CSR policies and standards of ethics.



Review all HR policies and practices to ensure consistency with the organization’s values and CSR strategies.



Institute volunteer programs.

For more information about the international guidelines for CSR, visit the following websites: 

The Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises based on International Labour Organization (ILO) Conventions: http://www.oecd.org



The Global Reporting Initiative (GRI) guidelines for creating a GRI Sustainability Report: http://www.globalreporting.org



The United Nations Global Compact's ten principles addressing employee legal rights, labor and environmental issues: http://www.unglobalcompact.org



The International Organization for Standardization (ISO) 26000 Social Responsibility certification process: http://www.iso.org

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Policies, Procedures and Work Rules Policies, procedures and work rules help an organization achieve its long-term plans. HR is a key player in the creation and successful deployment of organizational policies, procedures and work rules. Any discussion of work rules requires an understanding of policies and procedures. Work rules are specific to an organization; they are shaped by internal factors. Organizations use fewer work rules now than they have in the past. Many organizations are finding that employees’ self-confidence and productivity are often best nurtured when employees have the freedom to make their own decisions. Collective bargaining agreements often address the terms and conditions of employment. These terms and conditions include the following: 

Work rules



Discipline procedures



Opportunities to pursue grievances



The right to employment opportunities and jobs

Organizations may send clear statements and policies showing the values the organization will support, but these actions do not change the terms agreed upon in the workers’ agreement.

HR Responsibilities for Workplace Policies, Procedures and Work Rules The concepts behind the words policies, procedures and work rules are interrelated, but the terms do have different meanings. Often the HR professional must translate how policies, procedures and work rules apply to day-to-day interactions and activities. Policy A policy is a method to help guide and make decisions. Policies are general in nature, whereas procedures and work rules are more specific to a given situation. © 2012 SHRM

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Figure 5-24: Example of a Policy Properly conceived and carried out, policies are intended to help management and employees make intelligent decisions. The decisions should be consistent with those policies. Policies provide a basis for HR management practices and a framework within which these practices are established. The meaning of policies is not standardized. Here are examples: 

In large organizations, policies may be documented in an employee manual. These written policies become the basis for consistent conduct.



In small organizations, policies that guide conduct are often considered an unwritten code of conduct. Policies in smaller organizations are passed on through observations or word of mouth.

If an organization does not intend to abide by a policy, the policy should not be published. Keep in mind that a written policy provides credibility only if it is backed up by actions. Policies, written or unwritten, are not permanent. The HR function must periodically review policies and revise those that are out of date; however, frequent changes in policies may suggest management problems. Procedures A procedure is a detailed, step-by-step description of the method of handling an activity. Procedures are more specific than policies. A procedure often provides details of the what, when, where and who for a given situation.

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Figure 5-25: Example of a Procedure Work Rules Work rules reflect management decisions regarding specific actions to be taken, or avoided, in a given situation. Work rules and procedures are similar because they are both intended to guide action and to leave no room for interpretation.

Figure 5-26: Example of a Work Rule Employee Handbooks Employers can use a variety of methods to communicate policies, procedures and work rules to employees. Employee handbooks are the most popular format. They are usually available online. Many organizations also distribute hard copies to new employees on their first day of work. The handbook explains major HR and employee policies and procedures and describes the employee benefits. An employee handbook can be effective in providing information to the employee. It has proven to be useful for the following reasons:



Properly orients new employees



Helps maintain consistency among supervisors



Reduces the number of misunderstandings over workplace policies



Supports disciplinary action and avoids charges of unlawful discrimination



Potentially reduces the need for employees to seek out union representation

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Section 1.5: Organizational Policies, Procedures and Regulations

Most employee handbooks include similar types of information. Specific policies, procedures, programs and other items will vary. An employee handbook may include (but is not limited to) the categories outlined below: 

Introductory information



Employment information



Compensation



Time off



Employee benefits



Leaving the organization



Other information

Confidentiality and Privacy Regulations Every organization has a need to keep certain information confidential. HR typically maintains sensitive employee data and information relating to employee and management issues. As a result, HR professionals must understand relevant privacy laws and develop processes and procedures to secure and safeguard sensitive employee data.

Privacy Protection Because of the nature of their jobs, HR professionals have access to employees’ private and confidential information. They also hear management decisions, like layoffs, in advance in order to make preparations. Any leakage of information can easily result in one of the following consequences: 

Theft (for example, national identification number)



Use of confidential information against someone (salary, medical issues and performance appraisals)



The spread of information from employee to employee before management approves the message



Loss of trust in the HR department

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In some countries, private information is protected by law: 

In the United States (US), age and medical information is protected by law, and any information shared is subject to punishment by law.



In the European Union (EU), the Directive on Protection of Personal Data protects employees’ personal data and impacts employers in how personnel records are kept, how personal information is disclosed and whether personal data is transferred to third parties or outside the EU.



In the United Kingdom (UK), the Data Protection Act is related to personnel records and restricts the collection, retention and use of information.



The Privacy Act of Australia covers the public, private and health sectors and includes ten National Privacy Principles that must be followed. The act governs how organizations should collect, store, use and disclose personal information and gives certain rights to Australian citizens, such as the right to know what information an organization holds about them and the right to correct it if it is wrong.

To keep records and information safe, here are some basic precautions for HR employees: 

Prepare procedures about confidentiality and ensure they are effectively communicated.



Train your HR employees on confidentiality.



Stay current on legal requirements and regulations about confidentiality.



Categorize the confidential data, and authorize staff accordingly.



Only allow authorized entry to the area where you keep employee data.



Be cautious about authorization of database users. (For example, if you are using an enterprise resource planning (ERP) database that all employees have access to, a mistake in authorization may cause confidential information to become available for everyone to see.)



Carry out all investigations and disciplinary actions with the utmost confidentiality.

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In addition, you should take precautions at your workspace and at home: 

Do not leave your computer without locking it.



Do not leave confidential information on the screen before you leave your workspace, even when you lock the computer. For example, you may come back to your desk with someone to work on a different task. When you unlock your computer, the confidential information will still be displayed.



Do not share your password or write it down where it can be seen.



Do not leave confidential paperwork on your table or throw confidential papers in the trash without destroying them first.



Pay attention to who is around when you talk on the phone if you are talking about confidential issues.



Keep job applications confidential regardless of any relationship you may have with the applicant’s current employer.



Do not discuss employee information and workplace issues with friends.

Additional information about security is provided in Module 6: Health, Safety, and Security.

Developing Employee Privacy Programs Laws and regulations will dictate what data must be protected on behalf of the employees, but your organization will develop its own unique processes for carrying out these laws. Figure 5-27 provides guidelines for developing employee privacy programs.

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Developing an Employee Privacy Program  Analyze all business processes that involve personal employee data.  Eliminate the collection of data that is not put to use, and restrict access by individuals without a legitimate need for it.  Decide how to handle requirements related to notice, legitimacy (that is, consent) and access.  Develop strategies for overcoming other significant compliance risks.  Formalize procedures for the business processes that have been identified.  Document all employee data flows, including those that will remain unchanged.  Create a privacy policy.  Include robust monitoring and enforcement mechanisms.  Educate the entire workforce on the privacy policy and procedures that have been established. Transactions involving personal employee data are not limited to the HR department. 

Monitor the internal and external environments (for example, new business initiatives and privacy regulations, respectively) for potential impact on the company’s privacy program. Figure 5-27. Checklist for Developing an Employee Privacy Program

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You have completed Module 1: HR Administration. Next, if you feel ready, go to the Online Learning Center and check your knowledge by completing the Case Studies, Module 1 Practice Test and the Cumulative Practice Test. Also try the Terminology Quiz to check your knowledge of terminology.

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Bibliography Aguirre, Cesar. "Managing Across Borders in Latin America." Staffing Industry Analysts, November 20, 2007. Bartlett, Christopher A., and Sumantra Ghoshal. Managing Across Borders: The Transnational Solution. 2nd Edition. Boston, Massachusetts: Harvard Business School Press, 2002. Bates, Steve. "Facing the Future." HR Magazine, July 2002. Briscoe, Dennis R, Randall S Schuler, and Lisbeth Claus. International Human Resource Management: Policy and Practice for Multinational Enterprises. New York, New York: Routledge, 2008. Business Performance Improvement Resource. "What Is Benchmarking?" Business Performance Improvement Resource. 2011. http://www.bpir.com/benchmarkingwhat-is-benchmarking-bpir.com.html (accessed October 11, 2012). Collis, David J., and Michael G. Rukstad. "Can You Say What Your Strategy Is?" Harvard Business Review, April 2008. Dessler, Gary. Human Resource Management. 11th Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2008.

Bibliography

EUROPA. "Community Framework for Electronic Signatures." December 17, 2008. http://europa.eu/legislation_summari es/information_society/l24118_en.ht m (accessed October 11, 2012). Evans, Paul, Vladimir Pucik, and Ingmar Björkman. The Global Challenge: Frameworks for International Human Resource Management. 2nd Edition. Boston, Massachusetts: McGraw-Hill, 2010. Farrell, Diana. "Smarter Offshoring." Harvard Business Review, June 2006. Freeman, R. Edward, Andrew C. Wicks, and Bidman Parmar. "Stakeholder Theory and the Corporate Objective Revisited." Organizational Science 15, no. 3 (May-June 2004). Freeman, R. Edward, Jeffery S. Harrison, and Andrew C. Wicks. Managing for Stakeholders: Survival, Reputation, and Success. New Haven, Connecticut: Yale University Press, 2007. Global Reporting Initiative. "Sustainability Reporting Guidelines, Version 3.1." 2011. https://www.globalreporting.org/info rmation/sustainabilityreporting/Pages/default.aspx (accessed October 11, 2012). Herod, Roger. International Human Resources Guide. Eagan, Minnesota: Thomson/West, 2007. Herod, Roger, editor. International Human Resources Guide. Eagan, Minnesota: Thomson/West, 2007.

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Heylman, Susan R. "Study: Globalization, Work/Life Balance Among Key Issues for HR Worldwide." Society for Human Resource Management. February 18, 2011. http://www.shrm.org/hrdisciplines/gl obal/Articles/Pages/GlobalizationStu dy.aspx (accessed October 11, 2012). Hindle, Tim. Guide to Management Ideas and Gurus. London, United Kingdom: Profile Books/The Economist, 2008. Hofstede, Geert, Gert Jan Hofstede, and Michael Minkov. Cultures and Organizations: Software for the Mind. New York, New York: McGraw-Hill, 2010. International Bar Association Global Employment Institute. "Looking to the Key Human Resources Legal Issues of the Next Decade: The 10/20 Survey." February 23, 2011. http://www.ibanet.org/ENews_Archi ve/IBA_28February_2011_Enews_I BAGEI_publishes_Key_HR_survey. aspx (accessed October 11, 2012). Jellison, Jerald M. Managing the Dynamics of Change, The Fastest Path to Creating an Engaged and Productive Workforce. New York, New York: McGraw Hill, 2006. Kaplan, Robert S., and David P. Norton. "The Balanced Scorecard: Measures That Drive Performance." Harvard Business Review, January-February 1992. Kotter, John. Leading Change. Boston, Massachusetts: Harvard Business Press, 1996.

Bibliography

Krell, Eric. "Trends: Compensation and Incentives." Society for Human Resource Management. December 2010. http://www.shrm.org/Publications/hr magazine/EditorialContent/2010/121 0/trendbook/Pages/11TB_Compensat ion.aspx (accessed October 11, 2012). Lawson, Emily, and Colin Price. "The Psychology of Change Management." McKinsey Quarterly, 2003. Pande, Peter, and Larry Holpp. What is Six Sigma? New York, New York: McGraw-Hill Companies, Inc., 2002. Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York, New York: The Free Press, 1980. Porter, Michael E., and Mark R. Kramer. "Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility." Harvard Business Review, December 2006. Reynolds, Garr. Presentation Zen: Simple Ideas on Presentation Design and Delivery. Berkeley, California: New Riders Press, 2008. Savitz, Andrew W. The Triple Bottom Line. San Francisco, California: John Wiley & Sons, Inc., 2006. Schwab, Klaus. "Global Corporate Citizenship: Working with Governments and Civil Society." Foreign Affairs 87, no. 1 (January/February 2008).

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Society for Human Resource Management. "ABCs of ASPs, The." November 12, 2007. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/CMS_0065 29.aspx (accessed October 11, 2012).

—. "Developing and Sustaining Employee Engagement." December 30, 2010. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/SustainingEmploye eEngagement.aspx (accessed October 11, 2012).

—. "Audit: Personnel Files: Employment (Personnel) Records Audit Checklist." June 25, 2010. http://www.shrm.org/TemplatesTool s/Samples/HRForms/Articles/Pages/ personnelfileaudit.aspx (accessed October 11, 2012).

—. "Executive Compensation: What Lies Ahead?" January 2, 2009. http://www.shrm.org/hrdisciplines/co mpensation/Articles/Pages/Executive CompensationWhatLiesAhead.aspx (accessed October 11, 2012).

—. "Benchmarking for Continuous Improvement." December 1, 2006. http://www.shrm.org/Research/Articl es/Articles/Pages/ROI_20Series__20 Benchmarking_20For_20Continuous _20Improvement.aspx (accessed October 11, 2012). —. "Changing Face of CSR Partnerships, The." June 22, 2010. http://www.shrm.org/hrdisciplines/et hics/articles/Pages/CSRPartnerships. aspx (accessed October 11, 2012). —. "Complying With Workplace Records and Reporting Requirements." Society for Human Resource Management. December 13, 2010. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/RecordsandReporti ngRequirements.aspx (accessed October 11, 2012). —. "Conflict Resolution Policy and Procedure." March 2010. http://www.shrm.org/TemplatesTool s/Samples/Policies/Pages/CMS_000 517.aspx (accessed October 11, 2012).

—. "Forget the Classroom: Turn to the Web for Innovative Learning Techniques." March 2, 2010. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/WebTrainin g.aspx (accessed October 11, 2012). —. "Future Insights: The Top Trends According to SHRM's HR Subject Matter Expert Panels." 2009. http://www.shrm.org/Research/Futur eWorkplaceTrends/Documents/090700%20Workplace%20panel_trend s_sympFINAL%20Upd.pdf (accessed October 11, 2012). —. "Getting More from Less Trend Will Continue in 2010." Society for Human Resource Management. January 11, 2010. http://www.shrm.org/hrdisciplines/or gempdev/articles/Pages/MorefromLe ssin2010.aspx (accessed October 11, 2012). —. "HR and Technology." October 28, 2009. http://www.shrm.org/Education/hred ucation/Pages/HRandTechnology.as px (accessed October 11, 2012).

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—. "HRIS: How Can I Find an HRIS System That Is Right for My Company?" June 19, 2005. http://www.shrm.org/TemplatesTool s/hrqa/Pages/findingrightHRIS.aspx (accessed October 11, 2012). —. "Importance of Managing Time Effectively, The." 2008. —. "Increased Cost Concerns Dominate 2009 Total Rewards Trends." February 16, 2009. http://www.shrm.org/hrdisciplines/be nefits/Articles/Pages/TotalRewardsT rends.aspx (accessed October 11, 2012). —. "India Way, The." October 13, 2010. http://www.shrm.org/about/foundatio n/products/Documents/Cappelli Pres.ppt (accessed October 11, 2012). —. "Job Analysis: How Do I Conduct a Job Analysis to Ensure the Job Description Actually Matches the Duties Performed by the Employee in the Job?" October 15, 2010. http://www.shrm.org/TemplatesTool s/hrqa/Pages/conductjobanalysis.asp x (accessed October 11, 2012). —. "Knowledge Management Series Part II: Organizational Learning." December 1, 2005. http://www.shrm.org/Research/Articl es/Articles/Pages/Knowledge_20Ma nagement_20Series_20Part_20II__2 0Organizational_20Learning.aspx (accessed October 11, 2012). —. "Making the Move to Manager SelfService." November 1, 2010. http://www.shrm.org/Publications/hr magazine/EditorialContent/2010/111 0/Pages/1110tech.aspx (accessed October 11, 2012). © 2012 SHRM

Bibliography

—. "More Than HR Competencies Needed to Manage Talent." Society for Human Resource Management. March 6, 2009. http://www.shrm.org/hrdisciplines/st affingmanagement/Articles/Pages/M oreThanCompetenciesNeeded.aspx (accessed October 11, 2012). —. "Practicing the Discipline of Workforce Planning." December 2010. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/PracticingWorkforc ePlanning.aspx (accessed October 11, 2012). —. "Recruiting Strategies for Social Media." Society for Human Resource Management. November 22, 2010. http://www.shrm.org/hrdisciplines/st affingmanagement/Articles/Pages/Re cruitingStrategiesforSocialMedia.asp x (accessed October 11, 2012). —. "'Search Me' Button Might Help Eliminate Mistaken Identity." Society for Human Resource Management. March 9, 2011. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/GoogleButt on.aspx (accessed October 11, 2012). —. "SHRM Bid to Lead Global HR Standards Effort Ratified." Februrary 25, 2011. http://www.shrm.org/about/news/Pag es/StandardsEffortRatified.aspx (accessed October 11, 2012). —. "Social Media Tools Redefining Learning in Organizations." May 18, 2010. http://www.shrm.org/hrdisciplines/st affingmanagement/Articles/Pages/To olsRedefineLearning.aspx (accessed October 11, 2012).

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—. "Staffing the Human Resource Function." February 3, 2011. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/StaffingHRFunctio n.aspx (accessed October 11, 2012).

Tata Sons, Ltd. "Tata Company Initiatives." July 2008. http://tata.com/ourcommitment/articl es/inside.aspx?artid=UCW6h61KLw s= (accessed October 11, 2012).

—. "Stay Connected to Former Employees to Reap Staffing Dividends." March 3, 2008. http://www.shrm.org/publications/m anagingsmart/fall06/pages/story2.asp x (accessed September 20, 2012).

Tetrick, L. E., and N. Da Silva. "Assessing the Culture and Climate for Organizational Learning." In Managing Knowledge for Sustained Competitive Advantage: Designing Strategies for Effective Human Resource Management, by S. E. Jackson, M. A. Hitt and A. S. Denisi (Eds.). San Francisco, California: Jossey-Bass, 2003.

—. "Study: Engage Employees and Middle Managers." Society for Human Resource Management. October 4, 2010. http://www.shrm.org/hrdisciplines/e mployeerelations/articles/Pages/Post RecessionHRPractices.aspx (accessed October 11, 2012). —. "Three Keys to Unlock Successful HR Outsourcing." April 21, 2008. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/UnlockSucc essfulHROutsourcing.aspx (accessed October 11, 2012). —. "When in Rome: Note Cultural Differences When Training, Experts Say." June 8, 2009. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/NoteCultura lDifferencesWhenTraining.aspx (accessed October 11, 2012).

Thornburg, Linda. "Cloud Computing." Staffing Management Magazine, January 1, 2009. Walmart. Walmart Global Sustainability Report 2010 Progress Update. Bentonville, Arkansas: Walmart Stores, Inc., 2010. Wirtenberg, Jeana, William G Russell, and David B Lipsky. Sustainable Enterprise: When It All Comes Together. Saranac Lake, New York: AMACOM Books, 2008. Zielinski, David. "Cloud Computing's Multiple Dimensions." HR Magazine, November 1, 2009.

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Index

Index Aguirre, Cesar ......................................... 165

cloud computing........................................ 76

alternate work schedules ......................... 146

code of ethics .................. 208, 209, 210, 212

application service provider (ASP) ........... 76

compensation ..... 38, 42, 61–62, 80, 93, 113, 137, 148, 169, 222

ASP ............ See application service provider competencies ............. 39, 41, 42, 44, 70, 139 audit checklist ................................. 123, 150 balanced scorecard .................... 120–21, 122 Barlett, Christopher A. .............................. 44 benchmarks ....................................... 182–85 applied to the HR function .................. 184 kinds .................................................... 184 limitations ............................................ 185 benefits . 9, 32, 35, 60, 71, 74, 80, 93, 106–7, 118, 136, 137, 146, 164, 175, 184, 208, 215, 221–22

confidentiality and privacy ..................... 222 employee privacy programs ................ 224 privacy protection ................................ 222 corporate social responsibility (CSR) ..... 212 corporate citizenship programs ........... 215 environmental sustainability ............... 217 HR's role ...................................... 208, 217 cost per hire ............................................. 184 cost-benefit analysis .......... 93, 117, 118, 119 cost-benefit ratio ............................. 117, 118

Boring, Scott C.......................................... 63 CSR .........See corporate social responsibility break-even analysis ......................... 115, 119 break-even point...................................... 119 budgeted headcount ................................ 113 cause-and-effect diagram .......... 178, 179–80 change drivers ......................................... 163 change management ................................ 157 assessing readiness for change ............ 167 HR's role .............................................. 206 in organizations ................................... 159

data analysis .............................................. 92 qualitative .............................................. 93 quantitative ............................................ 93 data gathering and analysis methods cause-and-effect diagram .................... 179 Gantt Chart .......................................... 182 histogram ............................................. 180 Pareto Chart ......................................... 181 process-flow analysis .......................... 179 scatter diagram .................................... 181 deductive reasoning ............................ 88–89

change process theory ............................. 158

Deloitte Consulting ................................... 63

change strategy models ........................... 165

demand analysis ...................................... 132

charts and graphs....................................... 94

descriptive statistics .................................. 94

232

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Index

digital divide ....................................... 74, 77

financial measures ................................... 115

e-Learning ..................................... 68, 75, 77

financial statement analysis ............ 115, 120

electronic record keeping .......................... 75

flexible spending ............................... 143–46

electronic signatures.................................. 75

flexible staffing ................................. 143–46

Elements for HR Success .................... 14–17

frequency distributions........................ 94, 96

Elkington, John ....................................... 212

full-time............................... 37, 81, 143, 147

employee engagement ............................... 65

Gantt Chart ...................................... 171, 178

employee handbooks ......................... 221–22

gap analysis ..................................... 133, 134

employee life cycle ................................. 149

generational differences ............................ 63

employee records .............................. 82, 149

Ghoshal, Sumantra .............................. 44, 58

employment branding ............................... 60

global integration ...................................... 58

employment contract ............... 142, 147, 148

globalization .............................................. 69

employment procedures .......................... 142

Gronstedt, Anders See The Gronstedt Group, Inc.

environmental scanning ............................ 33 budgeted headcount .......................... 113–14 essential functions ................................... 138 ethics and professional standards .... 189, 205 ethical questions .................................. 205 reporting ethical violations (whistle blowing) ........................................... 206 SHRM Code of Ethical and Professional Standards ......................................... 211 European Union ................................ 75, 223 evaluation metrics ....................... See metrics experimental design .................................. 92 experimental research process ............ 88, 91 scientific method ................................... 91 step 1: problem analysis ........................ 91 step 2: hypothesis formulation .............. 92 step 3: experimental design ................... 92 step 4: data collection ............................ 92 step 5: data analysis ............................... 92 © 2012 SHRM

headcount method strengths and weaknesses .................... 114 health and wellness programs ................... 64 histogram............................. 95, 96, 178, 180 Hofstede, Geert ................................... 73–74 Hofstede’s dimensions of culture.............. 73 HR ethics and professional standards code of ethics ....................................... 212 ethics hotline ....................................... 208 HR’s role ............................................. 208 who handles ethical issues? ................. 210 HRIS ......... See human resource information system (HRIS) human capital .................................. 4, 64, 82 measurement of ..................................... 65 233

Module 1: HR Administration

human resource (HR) administrative role ................................... 8 human resource information systems (HRIS) ................................................................. 8 globally .................................................. 81 help with administrative role ................... 9 HRIS applications ................................. 79 skill banks and skill tracking systems ... 81 human resource management (HRM) ......... 4 definition ................................................. 4 evaluation metrics ............................... 110 human resources (HR) ................................ 4 creating an ethical environment .......... 208 current expanded role .............................. 7 ethics and professional standards ........ 189 evaluation metrics ................................. 45 historical perspective ............................... 5 implementing CSR .............................. 217 legal areas monitored by ..................... 193 metrics ................................. 47, 57, 64, 87 operational role ........................................ 8 role in outsourcing ................................. 61 role of HR in implementing strategy ..... 44 role of HR in workforce planning ....... 131 strategic role ............................................ 7 hypothesis formulation.............................. 92 independent contractor ............................ 143 inductive reasoning ............................. 88, 89 International Organization for Standardization (ISO) .................. 173, 218 International Society of Certified Employee Benefits Specialists ............................... 63 interviews .......................................... 59, 107 ISCEBS ............. See International Society of Certified Employee Benefits Specialists ISO .......... See International Organization for Standardization

Index

Jellison, Jerald M. ................................... 160 job analysis.............................................. 136 definition ............................................. 134 job description ............................... 136–38 job descriptions . 136–38, 136–38, 141, 168– 69 benefits ................................................ 137 elements ............................................... 138 writing ................................................. 136 job specification ...................................... 141 jurisdiction 65, 192, 193, 196, 197, 200, 202 Kaplan, Robert .......................................... 48 knowledge management................ 83, 82–84 knowledge management systems .............. 82 knowledge, skills and abilities (KSAs) .. 135, 139 KSAs ...... See knowledge, skills and abilities laws ......................................................... 189 anti-discrimination, harassment and fair work ................................................. 197 compensation and benefit .................... 196 identifying the legal issues .................. 197 influence of law on the organization ... 189 influence on the organization .............. 197 laws across country borders ................ 190 occupational health and safety ............ 196 of employment..................................... 195 Lawson, Emily ........................................ 159 Lean Six Sigma ......................... 174, 177–78 learning management systems (LMS) ...... 68 learning organization ................................ 69 learning portals.......................................... 69 legal and regulatory environments .......... 198

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legal systems of the world....................... 191 Lewin, Kurt ............................................. 158 Li, Charlene............................................... 66 LMS ......... See learning management system

Index

front-back structure ............................... 54 functional structure ................................ 52 geographic structure .............................. 53 matrix structure ..................................... 54 product structure .................................... 52

matrix structure ................................. 177–78

outsourcing ...... 39, 41–43, 61, 132, 134, 145 administrative .......................................... 8 cosourcing ............................................ 42 flexible staffing ................................... 143 HR's involvement .................................. 43 insourcing ............................................. 42 internal challenge .................................. 42 reasons to outsource .............................. 42

mean .............................................. 98, 97–98

Pareto Chart .............................. 178, 181–82

measures of association........................... 102

part-time .............................. 32, 81, 143, 147

measures of central tendency .................... 94

performance audits .......................... 120, 122

measures of variation ........................ 94, 101

performance documentation.................... 151

median ............................................... 98, 100

performance measures .............. 47, 115, 120

mergers and acquisitions (M&A)...... 35, 163 benefits and risks ................................... 36 HR's due diligence........................... 36–37

PERT ..... See program evaluation and review technique

local responsiveness ............................ 51, 58 M&A ............... See mergers and acquisitions Madia, Sherrie A. ...................................... 60

metrics9, 45, 57, 64, 65, 78, 85, 87, 88, 111– 12, 115 initial considerations ........................... 110 mission statement .................... 26–27, 26–27 mode.......................................................... 98 nonessential functions ............................. 139

policy....................................................... 219 Price, Colin ............................................. 159 primary research.................................. 88, 90 privacy programs .................................... 224 problem analysis ....................................... 91

nonfinancial measures ............................... 48

procedure 142, 189, 194, 198, 206, 208, 219, 220

Norton, David ........................................... 48

process-flow analysis .............................. 179

O*NET .................................................... 141

product structure ................................. 52–54

offshoring ................................................ 141

program evaluation and review technique ..................................................... 170, 171

project management .......... 69, 167, 170, 171 common project characteristics ........... 168 235

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Index

common project phases and roles........ 169 data gathering and analysis methods ... 178 definition ............................................. 167

ROI......................... See return on investment

project planning tools .............................. 170 Gantt Chart .......................................... 171 PERT Chart ......................................... 171

Savitz, Andy............................................ 213

project success ........................................ 172

scientific method ....................................... 91

qualitative data analysis description of ....................................... 105 individual or panel interviews ............. 106

secondary research ........................ 88, 90–91

quality improvement ............................... 173 quality standards .................................. 173 theories and methods ........................... 174

SHRM ........See Society of Human Resource Management

quantitative data analysis .......................... 93 charts and graphs ................................... 94 description of ......................................... 93 descriptive statistics............................... 94 frequency distributions and tables ......... 96 measure of association .................... 102–3 measure of central tendency .................. 96 measure of variation ............................ 101 observational ....................................... 108 organizational records ......................... 108 surveys and questionnaires .................. 107 tests ...................................................... 108

rule of law ............................................... 191

scatter diagram.............. 103, 125, 178, 181

selection ............................................ 59, 142

SHRM Code of Ethical and Professional Standards ............................................. 211 Six Sigma .................................. 174, 175–78 skill banks and skill tracking systems ....... 81 social media ........................................ 60, 66 social network ........................................... 70 Society for Human Resource Management ......................................................... 14–17

questionnaires ................................... 90, 107

Society for Human Resource Management (SHRM) ................................................. 56

records management programs ............... 152

solution analysis ...................................... 134

recruitment .. 8, 32, 59, 60, 81, 131, 142, 176

staffing .......... 59, 68, 113, 130, 131, 143–44 options ................................................. 143

reliability ........................... 32, 88–89, 108–9 explanation of ...................................... 108 internal consistency ............................. 109 parallel forms....................................... 108 rater agreement .................................... 109 test/retest.............................................. 109 remote project collaboration ..................... 69 reporting methods ................................... 125 return on investment ............................... 115 © 2012 SHRM

stakeholders.... 22, 23, 25, 43, 45, 68, 69, 72, 120, 131, 159, 211, 214, 218 standard deviation ................................... 101 start-up .............................................. 30, 164 definition ............................................... 31 scope of the HR professional’s responsibilities ................................... 31 statistics ............................... 93, 94, 104, 141 descriptive statistics............................... 94 236

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inferential statistics .............................. 104

Index

managing E-mail ................................... 21 techniques for ........................................ 18

strategic alliances ................................ 29, 39 time to fill................................................ 184 strategic HR management ......................... 22 TNC................. See transnational corporation strategic plan ..................................... 26, 115 total quality management (TQM) ........... 175 strategic planning ................ 43, 44, 157, 200 total rewards ........................................ 63, 80 strategic planning process ................... 23–26 TQM............... See total quality management strategy development ................................ 28 actions.................................................... 28 market entry strategy ............................. 28 strategy evaluation .................................... 44 actions.................................................... 44 activity versus results ............................ 45 benchmarks............................................ 46 cost control versus value creation ......... 46 strategy formulation .................................. 26 strategy implementation ............................ 43 role of HR .............................................. 44 strengths, weaknesses, opportunities, threats (SWOT) analysis ............................. 24, 33 supply analysis ........................................ 132 surveys .............................. 9, 66, 90, 93, 105 systems theory......................................... 174 technological skills.............................. 74, 77 technology .. 9, 25, 28, 35, 42, 48, 50, 59, 66, 74 advances in ............................................ 74 digital divide.......................................... 77 human resource information systems .... 77 knowledge management systems .......... 82 monitoring ............................................. 74 technology skills .................................... 77 time management ...................................... 17 effective meetings ................................. 20

training . 66–71, 77, 79, 91, 92, 93, 100, 109, 120, 130, 131, 132, 134, 184, 201 trends ..................................................... 67 transnational corporation (TNC) ............... 58 trends .... 4, 47, 56–59, 61–67, 72–73, 72–74, 115, 212 analysis of .............................................. 73 compensation and benefits .................... 61 conducting trend research...................... 72 globalization .......................................... 58 human resource measurement and metrics ........................................................... 64 in employee engagement ....................... 65 in staffing............................................... 59 training and development ...................... 66 turnover cost............................................ 184 validity ........................................ 72, 88, 108 virtual-world simulations .......................... 70 webinar ...................................................... 71 whistle blowing ....................................... 206 work rules................................ 189, 195, 219 work/life balance ........................... 19, 57, 64 workforce planning ........................... 129–32 benefits ................................................ 131 definition ............................................. 129 role of HR ............................................ 131

237

Module 2: Recruitment and Selection Module 2: Recruitment and Selection ........................................................................................ iii Acknowledgements .................................................................................................................... vi Module 2 Body of Knowledge .................................................................................................. vii Module 2 Purpose Statement .............................................................................................................. vii Module 2 Recruitment and Selection .................................................................................................. vii

Section 2.1: Workforce Planning and Staffing ............................................................................2 Introduction ..................................................................................................................................3 Organizational Requirements .......................................................................................................4 Defining Staffing Needs........................................................................................................................ 4 Anticipating Staffing Needs .................................................................................................................. 5 Promoting the Organization .................................................................................................................. 6 Employment Branding .......................................................................................................................... 6 Employee Value Proposition ................................................................................................................ 8

Approach to Staffing ....................................................................................................................9 Trends in Staffing ................................................................................................................................. 9 Diversity and Inclusion Considerations .............................................................................................. 10 Legal Considerations in Global Staffing ............................................................................................. 11

Developing the Staffing Plan .....................................................................................................14 The Role of the Staffing Plan .............................................................................................................. 14 Gathering the Staffing Data ................................................................................................................ 14 Designing the Staffing Plan ................................................................................................................ 16

Section 2.2: Job Analysis and Documentation ..........................................................................20 Introduction ................................................................................................................................21 Job Analysis ...............................................................................................................................22 Gathering Job Analysis Data............................................................................................................... 23 Outcomes of the Job Analysis ............................................................................................................. 26

Job Documentation .....................................................................................................................27

Job Descriptions .................................................................................................................................. 27 Job Specifications ............................................................................................................................... 30 Guidelines for Writing Job Descriptions and Specifications .............................................................. 32 Job Competencies ............................................................................................................................... 33

Section 2.3: Recruitment .............................................................................................................39 Introduction ................................................................................................................................40 Starting the Recruiting Process ..................................................................................................41 Developing Recruiting Strategies and Sources ..........................................................................42 Recruiting Strategies ........................................................................................................................... 42 Internal Recruitment Sources .............................................................................................................. 45 External Recruitment Sources ............................................................................................................. 52

Recruiting Technology ...............................................................................................................56 Job Databases ...................................................................................................................................... 56 Networking Sites ................................................................................................................................. 57 Mobile Marketing ............................................................................................................................... 58 Video Conferencing ............................................................................................................................ 59

Section 2.4: Selection ...................................................................................................................63 Introduction ................................................................................................................................65 Overview of the Selection Process .............................................................................................65 Step 1: Pre-Screen ......................................................................................................................66 CVs and Application Forms ................................................................................................................ 66 Pre-Employment Tests ........................................................................................................................ 69 Other Pre-Screening Tools .................................................................................................................. 70 Qualifications and Eligibility .............................................................................................................. 71 Applicant Notification......................................................................................................................... 72

Step 2: Track ..............................................................................................................................72 Step 3: Interview ........................................................................................................................73 Types of Interviews............................................................................................................................. 73 Guidelines for Interviews .................................................................................................................... 77

Step 4: Evaluate ..........................................................................................................................79 Interview Feedback ............................................................................................................................. 79

Background Investigations .................................................................................................................. 79

Step 5: Select ..............................................................................................................................81 Reliability and Validity of Selection Tools and Methods ................................................................... 81 Realistic Job Previews ........................................................................................................................ 82

Step 6: Offer ...............................................................................................................................84 Contingent Job Offer........................................................................................................................... 84 Employment Offer .............................................................................................................................. 84 Offer Negotiation ................................................................................................................................ 85 Employment Contracts........................................................................................................................ 85 Handling Nonselected Candidates ...................................................................................................... 86

Section 2.5: New Hire Onboarding.............................................................................................88 Introduction ................................................................................................................................89 New Employee Orientation ........................................................................................................89 Before the Employee’s Arrival ........................................................................................................... 89 Orientation/Induction .......................................................................................................................... 90 New Employee Orientation Checklist................................................................................................. 91 Supervisor Orientation Checklist ........................................................................................................ 92

New Employee Onboarding .......................................................................................................93 Onboarding Roles and Responsibilities .............................................................................................. 94 Evaluating the Effectiveness of Onboarding....................................................................................... 98

Section 2.6: Recruitment Metrics .............................................................................................104 Introduction ..............................................................................................................................105 Using Recruitment Metrics to Measure Business Impact ........................................................105 Evaluating the Effectiveness of Recruiting Efforts ........................................................................... 105 More Staffing Metrics ....................................................................................................................... 110 Workforce Analytics and Reporting ................................................................................................. 115

Bibliography ...............................................................................................................................118 Index ............................................................................................................................................122

Acknowledgements SHRM acknowledges its volunteer leaders for their valuable contributions to the Universal HR Practices Learning System: Lead Subject Matter Expert Sameer Khanna, GPHR, HRMP Vice President and Head HR – Region India, Ericsson India Pvt. Ltd. New Delhi, India Subject Matter Experts Mohamed Boraei, MBA HRIS & Project Manager, Qatar Foundation Doha, Qatar

Timo Michel, HRMP HR Business Partner, HR International Deutschland, Germany

Brad Boyson, MSHRM, SPHR, GPHR, HRMP Executive Director, SHRM MEA Dubai, United Arab Emirates

Rachel Park Program Manager, Global Talent Acquisition, Mastercard Worldwide Singapore, Singapore

Diane M. Dowlin, SPHR, GPHR, CCP, GBA, CMS, CEBS International Human Resources Director, FIS Jacksonville, Florida

Patchara Popaitoon Researcher/Teacher/Lecturer, School of Management University of Bath Claverton Down, Bath, United Kingdom

Cigdem Ozdemir Evren, MBA, HRBP HR Generalist, FNSS Defense Systems Ankara, Turkey Arturo Gaitán Nicholls Human Resource Analyst, Bancolombia Bogota, Colombia Nancy Kaysarly, PHR OED Advisor, International Management Consulting Company Cairo, Egypt

Module 2: Recruitment and Selection

Module 2 Body of Knowledge For your convenience, the Body of Knowledge for Module 2: Recruitment and Selection is provided on the following pages.

Module 2 Purpose Statement Purpose Statement for Recruitment and Selection: HR professionals in recruitment and selection should possess a combination of behaviors and skills/knowledge that relate to the full process of finding potential employees through preparation for the new hire’s arrival. These include managing the job requisition process, providing information on possible jobs to individuals and groups, managing the interview process and coordinating the final selection of the employee.

Module 2 Recruitment and Selection Below are lists of the behaviors and skills and knowledge required for mastery of content related to Module 2: Recruitment and Selection. Important behaviors for recruiting and selecting employees: 01. Manage the process to request jobs (for example, make sure requisitions are approved , get approval for the number of positions to be filled, monitor open positions) 02. Support managers in developing job descriptions and keep records of job requirements 03. Provide contact between recruiters and hiring managers (for example, prepare job listings, share appropriate information with the hiring manager and recruiter) 04. Announce job openings within the organization

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05. Identify ways to find new hires (for example, advertisements and web sites) 06. Choose a group of potential applicants for managers to interview (for example, read resumes and conduct phone interviews) 07. Scheduling interviews with managers and applicants 08. Answer questions from job applicants 09. Interview job candidates 10. Promote the organization to potential applicants (for example, attend job or career fairs, recruit at colleges and universities) 11. Organize assessments of applicants (for example, schedule and score assessments, share results) 12. Coordinate the final selection process (for example, schedule interviews with managers, check references) 13. Coordinate the employment offer (for example, start date, salary, benefits) 14. Prepare for the new hire’s arrival (for example, get identification documents and required forms, set up email address) 15. Manage database of applicants (for example, track the sources of applicants and the results of the recruiting and selection process, decide where to store information about candidates for possible future employment) 16. Report recruiting metrics (for example, the number of applications received, the number of candidates interviewed, the number of applicants hired) 17. Coordinate orientations for new employees (for example, discuss the company’s expectations for the position, review the employee handbook, explain the benefit plans)

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Important knowledge and skills for recruiting and selecting employees: 01. How government requirements affect recruitment and selection 02. Job functions and responsibilities in the organization and industry 03. Recruitment methods (for example, advertising , job fairs and outsourcing) 04. Procedures to review applications and watch applicants’ progress, including tracking systems 05. Procedures to check references 06. Assessments or evaluations of applicants 07. Procedures to conduct assessments or evaluations 08. Tools for selecting candidates 09. Options for recruitment 10. Interviewing techniques 11. Recruiting process (job announcement, initial applicant review, interviews, assessments, selection, job offer and orientation) 12. Processes for transferring or promoting employees within the organization 13. Diversity and inclusion (for example, diversity of demographics, culture and location)

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Module 2: Recruitment and Selection

2.1: Workforce Planning and Staffing

This section covers the following information from the Body of Knowledge: Behavior: 10. Promote the organization to potential applicants (for example, attend job or career fairs, recruit at colleges and universities) Skills & Knowledge: 01. How government requirements affect recruitment and selection 11. Recruiting process (job announcement, initial applicant review, interviews, assessments, selection, job offer and orientation) 13. Diversity and inclusion (for example, diversity of demographics, culture and location)

Section 2.1: Workforce Planning and Staffing Introduction ....................................................................................................................................3 Organizational Requirements .......................................................................................................4 Defining Staffing Needs ...............................................................................................................4 Anticipating Staffing Needs .........................................................................................................5 Promoting the Organization .........................................................................................................6 Employment Branding .................................................................................................................6 Employee Value Proposition ........................................................................................................8 Approach to Staffing......................................................................................................................9 Trends in Staffing .........................................................................................................................9 Diversity and Inclusion Considerations .....................................................................................10 Legal Considerations in Global Staffing ....................................................................................11 Developing the Staffing Plan .......................................................................................................14 The Role of the Staffing Plan .....................................................................................................14 Gathering the Staffing Data ........................................................................................................14 Designing the Staffing Plan........................................................................................................16

Module 2: Recruitment and Selection

Section 2.1: Workforce Planning and Staffing

Introduction Workforce planning is the process of identifying and analyzing the organization’s need for human capital to allow for the achievement of the organization’s goals. This process includes the following actions: 

Forecasting the future composition of the workforce



Identifying any gaps between the current and future staff



Deciding how to close those gaps



Determining how to meet the staffing needs

Organizations should conduct a regular and detailed workforce planning assessment. The goal is to create the best staffed and trained workforce that can respond to the needs of the organization. Effective workforce planning offers the following benefits to an organization: 

Easily accessing employee data to locate talent anywhere in the organization



Finding the best use for each employee



Recruiting passive job candidates (Society for Human Resource Management, Practicing the Discipline of Workforce Planning 2010)

This section examines the following topics:



Determining organizational requirements



Promoting the organization



Developing the staffing plan

Module 2: Recruitment and Selection

Section 2.1: Workforce Planning and Staffing

Organizational Requirements Defining Staffing Needs According to the Corporate Leadership Council, many HR departments do not have a formal staffing strategy that examines the organization’s business cycle and forecasts staffing needs. However, effective organizations must anticipate both organizational staffing needs and actual talent supplies. Flexibility is one key to defining staffing needs. The state of the economy can change rapidly and unpredictably. Organizations that respond quickly will have the most success with recruiting and hiring the best talent. Another key trait is being proactive. Organizations must develop strategic workforce plans that allow them to avoid future surpluses or shortages in the workforce. Organizations should take the following actions to define their staffing needs over the long term: 

Incorporate economic indicators into forecasts of talent supply and demand.



Retain staff with a strong employee value proposition (discussed later in this section).



Consider hire-back deals, alumni networks and paid sabbaticals to rebuild a workforce. (Corporate Leadership Council, Models for Strategic Staffing Processes 2003)

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Section 2.1: Workforce Planning and Staffing

Anticipating Staffing Needs The HR professional has the responsibility of anticipating the staffing needs of the organization. This responsibility includes managing the communication of staffing issues and changes within the organization. As part of the staffing strategy, HR should consider the following factors: 

Estimates of increases or decreases in the organization’s growth, output and revenue



Estimates of corresponding changes in talent needs



Projections of future vacancies



Estimates of the internal and external availability of talent (Corporate Leadership Council, Models for Strategic Staffing Processes 2003)

Examples of issues that can impact future staffing needs include the following. A persistent shortage of people is a shortage that is not linked to a specific event and that spans several years. Persistent shortages often occur in the health care field (for example, nurses) and in the education field (for example, qualified teachers). A temporary reduction in staff can occur when an organization undergoes restructuring and must decrease the number of staff for a short time. When the restructuring is complete, the intent of the organization is to rehire the staff. The HR professional must organize this reduction and keep in communication with both the organization’s leadership and the staff who are being temporarily fired. A temporary reduction can also occur due to a sudden increase in available jobs. One example was the need to prepare for technical issues with the start of a new century in the year 2000. Organizations had difficulty finding and keeping experienced employees in their information technology departments.

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Section 2.1: Workforce Planning and Staffing

A permanent reduction in staff requires thoughtful communication with all employees in the organization, particularly those involved in the reduction. HR professionals can focus on designing and providing job placement information.

Promoting the Organization An organization’s workforce planning process should include a consideration of how the organization is perceived by potential applicants and why applicants would want to work for the organization. Employment brands and employee value propositions are two effective tools for promoting the organization to applicants.

Employment Branding Employment branding is the process of positioning an organization as a desired employer in the labor market. This process is a key part of an organization’s efforts to attract and retain the best talent. An employment brand creates an image that makes people want to work for and stay working for the organization. The increasing importance of employment branding is reflected in a survey from the UK-based organization People in Business. Between 2006 and 2010, the number of specialist support managers leading employment brand projects nearly tripled, from 10% to 28% (CLC Human Resources 2010). In addition, 43% of the organizations in the survey reported using employment brand strategies to guide the organization’s overall HR strategy (Woods 2010). Branding is becoming meaningful as the demand for skilled workers increases and the talent marketplace undergoes significant transformation. Technology is changing the job search and recruiting processes, making the need for employment branding even greater.

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Section 2.1: Workforce Planning and Staffing

Organizations have the following motivations for developing an effective employment brand (Woods 2010) (Corporate Leadership Council, The Implementation and Impact of Employment Branding 2003): 

Distinguishing the organization as a desired employer



Attracting the best talent



Providing candidates with a clear vision of the organization’s culture



Retaining qualified talent



Improving the brand’s external reputation



Increasing employee engagement



Maintaining consistency and presenting a unified image across the organization

HR professionals must recognize that implementing an employment brand takes time. Sophy Pern, director of People in Business, cautions that “[employment] brand management is a long-term investment; it’s not a short-term project” (Woods 2010).

Building an effective employment brand is based on the following four strategies: 

Making sure that all key stakeholders work toward the same objective



Involving senior management to show the organization’s commitment to the employment brand



Ensuring that the employment brand reflects the organization’s culture



Selecting appropriate metrics to measure the impact of employment branding (CLC Human Resources 2010)

How can an organization promote the employment brand? Specific opportunities include the following:



Represent the organization at career fairs and universities.



Offer internship programs and scholarships.



Sponsor training conferences.

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

Section 2.1: Workforce Planning and Staffing

Place media advertisements in venues such as print, television, radio and the Internet.



Use social media to keep a positive perception of the organization in the news.

More information about trends in employment branding can be found at the following websites: 

http://www.shrm.org/Research/FutureWorkplaceTrends/Documents/100028%20India_Article_Employer_brand_v5.pdf



http://www.shrm.org/Publications/Books/Pages/CulturalFitFactor.aspx

Employee Value Proposition Organizations select the talented people they want to hire. However, talented people also select the organization they want to work for. An organization’s employee value proposition (EVP) answers the question: Why would a talented person want to work for the organization? The EVP is the foundation of employment branding. An organization’s EVP must accomplish the following: 

Align with the organization’s strategic plan, vision, mission and values



Create an image that attracts and retains people



Provide an accurate picture of employment for employees and candidates

An EVP promotes the benefits of working for an organization. Examples of benefits include the following: 

Compensation



Mobility



Opportunity for creativity or innovation



Social responsibility

The Corporate Learning Council divides the employee value proposition into five categories that can be leveraged into significant attraction and commitment

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Section 2.1: Workforce Planning and Staffing

benefits. For example, organizations with an effective EVP had high levels of commitment in 30 to 40% of employees. Organizations with a less effective EVP had high levels of commitment from less than 10% of employees (Corporate Leadership Council 2010). Organizations can face some challenges in delivering their EVP. These challenges include the following: 

A change in employee preferences (for example, employees seeking different rewards or opportunities)



A change in how the EVP affects commitment



Poor delivery of important EVP initiatives (Corporate Leadership Council 2010)

Approach to Staffing Trends in Staffing Staffing is defined as the act of selecting, hiring and training people for specific jobs. This definition includes both hiring and firing employees. A 2009 SHRM report on future workplace trends (Society for Human Resource Management, Future Insights: The Top Trends According to SHRM's HR Subject Matter Expert Panels 2009) identified trends related to staffing management, including the following: 

Many workers are available (although not always qualified) to apply for many jobs. However, some jobs are harder to fill and require a competitive recruitment strategy.



Workforce planning will be affected both by availability of qualified workers and by changes in retirement patterns.



HR needs to build competency in selecting and managing third-party products and services.

Module 2: Recruitment and Selection



Section 2.1: Workforce Planning and Staffing

Sustaining the employment brand is crucial for recruitment and retention regardless of the employment market and economic/business conditions.



Employers are increasingly using multiple selection measures—including panel interviews, reference checks and work sample tests.

For extensive additional information on staffing trends, see Module 1: HR Administration, Section 1.1: Strategic HR Management and Business Trends. In response to these trends, how can organizations focus their efforts on attracting the best and most qualified people? The Corporate Learning Center recommends the following actions steps: 

Write clear and effective job postings to attract qualified candidates.



Target passive candidates to expand the pool of applicants and to reduce competition from other recruiters.



Analyze your recruiting sources and focus on the ones with the highest return on investment. (CLC Human Resources 2010)

Diversity and Inclusion Considerations

Figure 1-1. The Importance of Diversity and Inclusion (Society for Human Resource Management, Jackson: Diversity, Inclusion a Moral and Business Imperative 2010)

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Section 2.1: Workforce Planning and Staffing

HR professionals face some challenges in relation to diversity and inclusion initiatives: 

Communicating to business leaders how diversity and inclusion efforts impact the organization’s financial goals



Providing clear definitions and promoting understanding of diversity and inclusion throughout the organization



Focusing too much on compliance (Society for Human Resource Management, Diversity, Inclusion a Moral and Business Imperative 2010)

HR professionals should take the following actions to integrate diversity and inclusion into the organization: 

Use social networking to help create a workforce that can navigate different cultures, countries and companies



Connect diversity and inclusion to strategic business outcomes



Encourage diversity practitioners to develop strong business skills and global experience



Help mitigate division between different groups and cultures



Increase the credibility of diversity and inclusion initiatives in the organization by dealing with difficult issues (Society for Human Resource Management, Diversity, Inclusion a Moral and Business Imperative 2010)

Legal Considerations in Global Staffing Many unique employment issues are raised by global and cross-border organizations. The HR professional must take the following actions: 

Identify what matters.



Understand the risks and obstacles of noncompliance.



Find solutions for compliance.

The HR professional should seek legal counsel regarding any uncertainties related to the content of any laws, regulations or practices (especially in countries with less developed legal systems).

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Section 2.1: Workforce Planning and Staffing

Figure 1-2 provides examples of key legislation affecting global staffing. Key Legislation

Basic Provisions 

Brazil: Federal Constitution and Labor Code

Provides for mandatory employment rights



Covers hours of work, employment contracts and termination of employment

 Canada: Employment Equity

Attempts to ensure that no Canadians are denied jobs for

Act

reasons unrelated to their abilities 

Requires preferential treatment in employment practices for four designated (protected) groups: women, people with disabilities, Aboriginal peoples and visible minorities

 China: 2008 PRC Employment Contract Law

Specifies the rights and obligations of the parties to employment contracts to protect the lawful rights and interests of workers and to build and develop harmonious and stable employment relationships

Figure 1-2. Key Legislation Affecting Global Staffing (continued to next page)

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Section 2.1: Workforce Planning and Staffing

Key Legislation

Basic Provisions 

European Union: Council

Ensures the effective mobility of workers within the European

Regulation 1612/68

Union 

Founded on the general principle of eliminating any direct or indirect discrimination based on nationality

 India: Minimum Wages Act

Sets minimum rates of wages in certain types of employment

 Mexico: Federal Labor Law

Regulates employment relationships in Mexico



Mandates minimum employment conditions that an employer must provide to employees



Applies to anyone working in Mexico, without regard to nationality or where the employee was hired

 United Kingdom: Employment Act, 2002

Specifies employment rights related to maternity, paternity and adoption leave; flexible working; minimum dismissal procedures and disciplinary and grievance procedures; union learning; Equal Pay Act questionnaires; and fixedterm work

Figure 1-2. Key Legislation Affecting Global Staffing (concluded)

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Section 2.1: Workforce Planning and Staffing

Additional information about global employment laws can be found at the following websites: 

NATLEX, a global database of labor, social security and human rightsrelated legislation maintained by the International Labour Organization: http://www.ilo.org/dyn/natlex/natlex_browse.home



Global Legal Information Network (GLIN), a public database of official texts of laws, regulations, judicial decisions and other complementary legal sources contributed by governmental agencies and international organizations: http://www.glin.gov

Developing the Staffing Plan The Role of the Staffing Plan A staffing plan provides an organization with the following benefits: 

Provides a strategic basis for making HR decisions



Allows organizations to anticipate change



Provides strategic methods for addressing current and future workforce issues



Can lead to significant cost savings, improved efficiencies and increased productivity

The staffing plan creates a practical link between HR strategic plans and day-today staffing activities. The focus of the staffing plan is on short-term implementation.

Gathering the Staffing Data Different approaches exist for gathering staffing data. Most approaches include a needs analysis and the creation of tactical objectives. These two components provide the information to create the staffing plan.

Module 2: Recruitment and Selection

Section 2.1: Workforce Planning and Staffing

Staffing Needs Analysis A staffing needs analysis provides a systematic approach to anticipate the demand for talent and the available supply. The outcome of the analysis is data that HR professionals can use to help ensure the organization is appropriately staffed. The needs analysis usually forecasts needs within a one-year to three-year time frame. Figure 1-3 shows the four-step process for analyzing staffing needs.

Figure 1-3. Staffing Needs Analysis (Society for Human Resource Management, Practicing the Discipline of Workforce Planning 2010) 

Supply analysis identifies the supply of labor and skills essential to the organization.



Demand analysis forecasts the organization’s future workforce composition.



Gap analysis compares the supply with the demand to identify gaps between the composition of the current workforce and future workforce needs.



Solution analysis is the process of creating strategies to close the gaps identified during the gap analysis.

Organizations may label these steps differently or consolidate some activities. However, any staffing analysis must collect all the information necessary to develop a staffing plan. The four-step process is covered in detail in Module 1: HR Administration, Section 1.3: Workforce Planning and Employment Strategies.

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Section 2.1: Workforce Planning and Staffing

Tactical Objectives The needs analysis identifies high-priority gaps between supply and demand. These gaps become the basis for defining tactical objectives. HR professionals use tactical objectives to accomplish the following: 

Close high-priority gaps in the short term



Specify in measurable terms which gaps must be closed and when

Objectives are not synonymous with goals. Goals usually refer to broader and longer-term endpoints. Objectives support goals by answering the question: How do we reach the desired endpoint? Objectives are measureable statements of future expectations that include a deadline for completion. The two terms should be used consistently throughout the organization. A common approach for developing tactical objectives is the acronym SMART. Ask yourself if the objectives meet the following conditions: 

Specific



Measurable



Achievable



Realistic



Time-based

Designing the Staffing Plan The needs analysis and the tactical objectives are used to design the staffing plan. A staffing plan describes how the tactical objectives will be achieved through the delegation of tasks and the application of resources. The organization’s planning approach should have the following features: 

Be consistent with other HR planning initiatives



Be collaborative and easily understood by all participants



Be accepted by those responsible for implementing the plan

Figure 1-4 shows the common elements of a staffing plan.

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Section 2.1: Workforce Planning and Staffing

Staffing Plan Element Statement of purpose

Purpose 

Documents the previous components of the staffing plan



Establishes the goals and targets for the remainder of the staffing plan

Stakeholders



Identifies key decision makers and others who should be involved in the development of the plan

Activities and tasks



Describes what needs to be accomplished and the timeline for completion



Notes relationships among activities, tasks and deliverables

Team members



Identifies the people who have been assigned or have volunteered to work on specific activities, tasks and deliverables

Resources



Documents financial and nonfinancial resources required for implementing the plan

Figure 1-4. Elements of a Staffing Plan (continued to next page)

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Section 2.1: Workforce Planning and Staffing

Staffing Plan Element Communication plan

Purpose 

Notes specific approaches and responsibilities for the following tasks: o Communicating initial details o Monitoring the plan o Requesting ongoing feedback

Continuous improvement



Develops a process to review the extent to which tactical objectives are achieved



Identifies ways to continuously improve the plan

Figure 1-4. Elements of a Staffing Plan (concluded)

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Section 2.1: Workforce Planning and Staffing

2.2: Job Analysis and Documentation This section covers the following information from the Body of Knowledge: Behaviors: 02. Support managers in developing job descriptions and keep records of job requirements Skills & Knowledge: 02. Job functions and responsibilities in the organization and industry 11. Recruiting process (job announcement, initial applicant review, interviews, assessments, selection, job offer and orientation) Recruiting cycle (from announcement to job offer)

Section 2.2: Job Analysis and Documentation Introduction ..................................................................................................................................21 Job Analysis ..................................................................................................................................22 Gathering Job Analysis Data ......................................................................................................23 Outcomes of the Job Analysis ....................................................................................................26 Job Documentation ......................................................................................................................27 Job Descriptions .........................................................................................................................27 Job Specifications .......................................................................................................................30 Guidelines for Writing Job Descriptions and Specifications .....................................................32 Job Competencies .......................................................................................................................33

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Introduction The success of any organization depends on each employee’s performance on the job. To make the recruitment and selection process effective, both employees and employers must have a clear concept of what a given job is and a clear language to communicate about the job. A job analysis is a study of the major tasks and responsibilities of jobs in an organization. Job analysis is the foundation of many HR functions and activities. Effective HR practices depend on a thorough understanding of how jobs are performed (Society for Human Resource Management, Job Analysis 2009). Figure 2-1 shows the integral role of job analysis in HR.

Figure 2-1. Roles of Job Analysis in HR

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

This section examines the following topics: 

The job analysis



Three outcomes of the job analysis: job descriptions, job specifications and job competencies

Figure 2-2 illustrates how the different components of the job fit together.

Figure 2-2. Job Components

Job Analysis A job analysis helps you determine the following information: 

The importance of each task and responsibility



How the job relates to other jobs in the organization



The performance qualifications for the job



The conditions under which the work is performed

The general purpose of the job analysis is to understand the requirements of a job and to develop a pay structure. All jobs must be interrelated to accomplish the organization’s vision, mission, goals and objectives. Job analysis is the first step toward that end.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Gathering Job Analysis Data A job analysis measures the job, not the person doing the job.

How often should job analysis data be gathered? 

A job analysis for current positions should be completed on a regular and ongoing basis. At a minimum, a job analysis is needed when there is a vacancy or every two years.



A follow-up assessment for new positions should be completed within six months to one year after the job is filled.

Relevant Information The data you collect for a job analysis should clarify the following aspects of the job: 

Essential and nonessential tasks, duties and responsibilities



Knowledge, skills, and abilities



Mental and physical attributes required for the job



Level of responsibility in the job (supervision received and given)



Work environment (including equipment used, hazards and general physical conditions that may affect the work)

This data will help differentiate the job from other jobs in the organization. What do we mean by knowledge, skills, and abilities? 

Knowledge: the information necessary for task performance



Skills: the level of expertise needed for task performance



Abilities: the capabilities necessary to perform the job

These three key elements are commonly abbreviated as KSAs.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Primary Source When you collect data for a job analysis, a primary source can provide valuable information from personal experience. A primary source is a source who is as close as possible to the topic you are researching. For a job analysis, primary sources include the following: 

The employees who currently perform the job



The managers who supervise others who perform the job

If many employees perform the same job, be sure the data sample is representative of the target population to ensure that your job analysis conclusions are valid. For additional information on sampling, see Module 1: HR Administration, Section 1.2: Gathering, Measuring and Reporting HR Data. Collection Methods Most organizations use more than one method for collecting primary source data. Figure 2-3 summarizes some common data collection methods. Method

Description 

Observation

Directly observe

Benefits 

Provides a realistic view

employees performing

of the daily tasks and

the tasks of a job.

activities performed in a



Record observations.

job



Translate observations into the necessary KSAs.



Works best for shortcycle jobs in production

Figure 2-3. Common Data Collection Methods (continued to next page)

Module 2: Recruitment and Selection

Method

Section 2.2: Job Analysis and Documentation

Description 

Interview

Conduct a face-to-face

Benefits 

interview in which the interviewer obtains the

Uses predetermined questions



Adds new questions

necessary information

based on the response of

from the employee about

the employee being

KSAs needed to perform

interviewed

the job.



Works well for professional jobs

 Open-ended questionnaire



Use a questionnaire to



Produces reasonable job

ask job incumbents and

requirements because

their managers about the

input is solicited from

KSAs necessary to

both employees and

perform the job.

managers

Combine the answers and



Works well when a large

publish a composite

number of jobs must be

statement of job

analyzed with limited

requirements.

resources

Figure 2-3. Common Data Collection Methods (concluded) Sample job analysis forms can be found at the following SHRM websites: 

http://www.shrm.org/TemplatesTools/Samples/HRForms/Articles/Pages/ CMS_001973.aspx



http://www.shrm.org/TemplatesTools/Samples/HRForms/Pages/JobAnaly sisForm.aspx



http://www.shrm.org/TemplatesTools/Samples/HRForms/Articles/Pages/ CMS_011001.aspx

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Outcomes of the Job Analysis A job analysis usually results in the three outcomes shown in Figure 2-4. Element Job descriptions

Description Summarize the most important features of a job, including the following: 

Required tasks



Knowledge, skills and abilities

Job specifications



Responsibilities



Reporting structure

Describe the qualifications necessary for a job holder to perform the job successfully

Job competencies

Describe the attributes or behaviors of employees required for success in an organization, workgroup or job Figure 2-4. Outcomes of the Job Analysis

Job descriptions, specifications and competencies are described in more detail below. For additional information on job analysis, see Module 1: HR Administration, Section 1.3: Workforce Planning and Employment Strategies.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Job Documentation Job documentation involves the creation of job descriptions, specifications and competencies.

Job Descriptions A job description is a written document describing an employee’s work activities. (Organizations in different countries may use different names for the job description, such as “role profile” or “role description.”) Job descriptions are used to document job content. These descriptions have many uses, as shown in Figure 2-5.

Figure 2-5. Uses of Job Descriptions (Society for Human Resource Management 2004)

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Challenges A major challenge with job descriptions is presenting them in a consistent way for different jobs. Difficulties with consistency can be caused by the following issues: 

A large number of employees



An inefficient job description process



The different responsibilities and duties of different jobs

Inconsistent job descriptions can lead to hiring people who are poorly equipped to perform the job functions successfully (Corporate Leadership Council, Job Description Creation and Review 2003). Considerations for a Global Environment Job descriptions have some additional purposes in a global environment: 

Matching the employee to the right job to avoid inappropriate cross-border transfers



Comparing salaries across countries so that jobs with the same description have the same salary



Providing the basis for reliable statistics about job types and projected needs across the organization



Helping compare and align business processes across countries

Elements of Job Descriptions Most job descriptions include the elements shown in Figure 2-6. But, not every element will appear in every job description.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Job Element Job identification

Summary

Description 

Job title



Department or location



Date the job description was completed



Approvals



Who the position reports to

Overview (four or five sentences) that summarizes the purpose and objectives of the job, including the following: 

Primary responsibilities



Expected results



Degree of freedom (for example, works independently or works under direct supervision)

Essential functions

Tasks, duties and responsibilities of the job

Nonessential functions

Desirable but not essential aspects of the job

KSAs

Minimum knowledge, skills and abilities required to perform the job satisfactorily

Supervisory

Extent of authority, including a list of who reports

responsibilities

to this position

Working conditions

Environment in which the job is performed, especially hazardous or difficult physical conditions

Figure 2-6. Elements of the Job Description

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Job Specifications A job specification is a written description of the minimum qualifications required to perform a specific job. A job specification should reflect what is necessary for satisfactory performance, not what the ideal candidate should have. Job specifications can be generated during the preparation of the job description. These specifications are often included as part of the job description document. Examples of job specifications include the following: 

Experience



Education



Training



Licenses and certification (if required)



Mental abilities and physical skills



Level of organizational responsibility

As you determine the job specifications, be sure to distinguish between essential functions and nonessential functions of the job. Documenting the essential functions will help support your decision of who is qualified for a job. Figure 2-7 shows an example of job specifications for a Marketing Manager.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Job Specifications 

Manage all details of the request for proposal process (RFP) and workflow including coordinating all responses to insure appropriateness of response.



Write and edit RFP responses.



Determine priorities of responses when receiving more than one response.



Provide technical guidance to other team members on RFP procedures.



Maintain library of RFP documentation and update as needed.



Prepare accurate monthly reports of all departmental expenditures.



Research information request from the Vice-President.

Figure 2-7. Sample Job Specifications for a Marketing Manager (Society for Human Resource Management, Marketing Manager (Sample Job Description), n.d.)

For additional information on job descriptions and specifications, see Module 1: HR Administration, Section 1.3: Workforce Planning and Employment Strategies.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Guidelines for Writing Job Descriptions and Specifications Job descriptions and job specifications must be based on the specific duties and responsibilities that are performed within the organization. Some basic guidelines for writing job descriptions and specifications are listed in Figure 2-8. Guidelines for Writing Job Descriptions and Specifications 

Give jobs realistic and descriptive titles.



Keep the summary short (no more than four or five sentences).



List only the most important duties, tasks or responsibilities.



Identify the essential job functions. (If you include nonessential job functions, indicate which functions are essential and which are not.)



Review the KSAs to be sure they are job related.



Secure approvals and dates.



Include appropriate disclaimers (for example: the job description may be changed at any time).

Figure 2-8. Guidelines for Writing Job Descriptions and Specifications In some organizations, writing the job description is the task of the department that is hiring a new employee. In these cases, the human resources department can provide guidance in the form of training and consultation on the elements of the job description and on how to include organizational and department-specific messages. A number of standard job description packages (both paper based and computer based) are available. These packages can provide the HR professional with a starting point for establishing consistency in job descriptions and specifications.

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Resources available to help HR professionals develop job descriptions include the following: 

http://www.shrm.org (Society for Human Resource Management)



http://online.onetcenter.org (O*NET, the Occupational Information Network). O*NET provides a comprehensive database of worker attributes and job characteristics applicable in both the public and private sectors and a common language for defining and describing occupations.

Job Competencies Job competencies are the observable and measurable skills, behaviors and knowledge that are needed to succeed in a specific job. Some organizations use the term “competencies” interchangeably with the knowledge, skills and abilities needed to perform a job successfully (Dessler 2008). However, competencies are more than basic KSAs. An employee usually develops competency at a job over a period of time. Therefore, job competencies represent the accumulation of multiple abilities and traits and knowledge required for success. A competency-based job analysis describes a job in terms of competencies instead of job duties. The focus is on what the employee or team must be competent to do in order to perform the job. Identifying Job Competencies Several methods may be used to identify job competencies. One way is by completing the sentence in Figure 2-9 (Dessler 2008).

Figure 2-9. Identifying Job Competencies

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Behavioral interviews are another common way to identify job competencies.

Additional information about behavioral interviews can be found at the following website: http://www.shrm.org/hrdisciplines/staffingmanagement/Articles/ Pages/CMS_006200.aspx. For additional information about behavioral interviews, see Section 2.4: Selection. For additional information on using interviews to gather data, see Module 1: HR Administration, Section 1.2: Gathering, Measuring and Reporting HR Data. Finally, professional organizations sometimes publish generic lists of competencies. Job Competency Examples Sample job competencies for a head of marketing position include the following: 

Business understanding



Market understanding



Targeting and designing



Building customer loyalty

Elements for HR Success The Society for Human Resource Management, as part of a multi-year research and development effort, has identified the following nine core competencies for successful HR professionals:



Human Resource Technical Expertise and Practice



Relationship Management



Consultation



Organizational Leadership and Navigation

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation



Communication



Global and Cultural Effectiveness



Ethical Practice



Critical Evaluation



Business Acumen

For additional information on core competencies for successful HR professionals, see Module 1: HR Administration, Section 1.1: Strategic HR Management and Business Trends.

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Section 2.2: Job Analysis and Documentation

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Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

2.3: Recruitment

This section covers the following information from the Body of Knowledge: Behaviors: 01. Manage the process to request jobs (for example, make sure requisitions are approved , get approval for the number of positions to be filled, monitor open positions) 03. Provide contact between recruiters and hiring managers (for example, prepare job listings, share appropriate information with the hiring manager and recruiter) 04. Announce job openings within the organization 05. Identify ways to find new hires (for example, advertisements and web sites) 15. Manage database of applicants (for example, track the sources of applicants and the results of the recruiting and selection process, decide where to store information about candidates for possible future employment)

Module 2: Recruitment and Selection

Section 2.2: Job Analysis and Documentation

Skills & Knowledge: 03. Recruitment methods (for example, advertising , job fairs and outsourcing) 09. Options for recruitment 11. Recruiting process (job announcement, initial applicant review, interviews, assessments, selection, job offer and orientation) 12. Processes for transferring or promoting employees within the organization

Section 2.3: Recruitment Introduction ..................................................................................................................................40 Starting the Recruiting Process ..................................................................................................41 Developing Recruiting Strategies and Sources..........................................................................42 Recruiting Strategies ..................................................................................................................42 Internal Recruitment Sources .....................................................................................................45 External Recruitment Sources ....................................................................................................52 Recruiting Technology.................................................................................................................56 Job Databases .............................................................................................................................56 Networking Sites ........................................................................................................................57 Mobile Marketing .......................................................................................................................58 Video Conferencing ...................................................................................................................59

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Introduction Recruitment is the process of attracting, screening and hiring qualified people for a job. The goal is to attract a pool of qualified candidates, some of whom will later be given job offers. Recruitment consists of two crucial factors. One factor is attracting the appropriate quantity of applicants. The other factor is attracting quality applicants. The starting place for determining who is qualified should be a carefully prepared job analysis, job description and job specification. These three documents are needed to establish selection criteria, evaluate applicants and screen out those who do not meet the minimum qualifications needed for the job.

For additional information on the job analysis, job description and job specification, see Section 2.2: Job Analysis and Documentation.

This section examines the following topics: 

Recruitment strategies and sources—including internal and external recruitment methods



Recruiting technology to help the HR professional

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Starting the Recruiting Process The recruiting process starts with getting approvals for opening a job requisition. The job requisition is a request to hire a person for an open position. Job requisitions usually include the following information for candidates: 

Job description



Job level



Job location

The requisitions also include information required for HR professionals, such as cost estimates and headcount information. Headcount refers to the number of employees an organization has on its payroll. Requisition forms and approvals may be known by different names in different organizations. Generally these forms and approvals are required for the following actions related to the job opening: 

Authorizing the recruitment of full-time, part-time, temporary and contract employees



Authorizing filling a position that has been vacated by the transfer or termination of a current employee



Authorizing creating a new position that is not currently filled by an employee (Society for Human Resource Management, Recruiting: Recruitment and Selection Policy and Procedures 2011)

HR professionals, together with recruiting professionals, have the following responsibilities during the job requisition process: 

Securing the necessary approvals for any action related to the open position



Before the job advertised, ensuring that the information on the job requisition is accurate and that it represents the organization appropriately

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Developing Recruiting Strategies and Sources Recruiting Strategies After job requisitions are approved, the next step is to develop a recruiting strategy. Developing a strategy means establishing a specific plan of action for meeting your recruitment objectives (Society for Human Resource Management, Recruiting and Attracting Talent: A Guide to Understanding and Managing the Recruitment Process 2009). Figure 3-1 suggests questions your organization should ask while developing a recruiting strategy.

Figure 3-1. Strategy Development Questions HR professionals must select appropriate sources to identify prospective candidates. The organization can choose either to look internally within the organization or to seek candidates externally. The choice between internal and external recruitment sources depends on the organization’s needs, culture and philosophy. The advantages and disadvantages of each approach are discussed later in this section. Many experts advocate a balance between the two sources. In choosing a recruiting strategy, be aware that what works for one organization may not apply to another. However, certain general guidelines can help improve your recruiting effectiveness. Figure 3-2 provides a checklist of suggested guidelines.

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Figure 3-2. Checklist for Recruiting Effectiveness Employment branding is a recruiting strategy that is covered in detail in Section 2.1: Workforce Planning and Staffing. Build a Candidate Pipeline Building a candidate pipeline means developing a pool of applicants that will be available when a job opening needs to be filled. A candidate pipeline has crucial value to an organization. However, organizations must first know what they are looking for (Society for Human Resource Management, Build a Talent Pipeline for Diverse Leaders 2007). Consider the following strategies for starting and maintaining effective candidate pipelines: 

Let potential candidates know that your organization may be interested in hiring them if an appropriate job position becomes available.



Let management know when exceptional talent is available.



Consider creating a new position for a very strong candidate who may not match your organization’s current job openings.



Keep your pipeline to a manageable size (Pritchard 2006).

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Consider Flexible Staffing Options Flexible staffing offers organizations a cost-effective and creative way to recruit talent. Also referred to as alternative staffing, flexible staffing uses alternative recruiting sources and workers who are not regular employees.

Flexible staffing can be based on either schedule flexibility or location flexibility. Schedule flexibility includes situations such as compressed workweeks and parttime options. Location flexibility includes working remotely from a location other than the main office or worksite. Reasons to consider flexible staffing options for your organization include the following situations: 

A shortage of available workers for open positions



Seasonal workload demands



Organizational upturns and downturns that make permanent headcounts impractical



Special projects that demand specific skills

Flexible staffing offers organizations the following benefits: 

Improved job commitment over a one-year period



Decreased health problems or complications that impact the employee’s work (Society for Human Resource Management, Workplace Flexibility Has Bottom Line Implications 2008)

For additional information on flexible staffing, see Module 1: HR Administration, Section 1.3: Workforce Planning and Employment Strategies.

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Internal Recruitment Sources Organizations can fill open positions through internal promotions and transfers. This internal recruitment allows the organization to capitalize on its investment in recruiting, selecting and developing its current employees. Figure 3-3 lists several advantages and disadvantages of recruiting internally.



Advantages

Disadvantages

of Recruiting Internally

Allows management to easily



assess the candidate’s performance, attendance



Limits the number of potential qualified candidates



May result in the organization

record, and strengths and

becoming too internally

weaknesses

focused

Allows management to



Can potentially decrease

identify employees who are

employee morale and

interested and ready for career

motivation if the job is given

advancement

to a preselected candidate

Reduces the time needed for the employee to adjust to the position and to the organization



Can decrease the time and cost of recruitment

Figure 3-3. Advantages and Disadvantages of Recruiting Internally (Stredwick 2005) Figure 3-4 suggests issues that HR professionals should consider as part of the internal recruitment process.

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Figure 3-4. Issues to Consider During Internal Recruitment Methods of Recruiting Internally Effective methods of recruiting internally include the following: 

Job postings



Skills assessment tools



Employee databases



Employee referrals

Job Postings

A job posting is an internal system that allows employees to respond to a job opening for a specific position. A posting should provide a brief description of the job, including significant job duties and minimum qualifications, education and experience. Job postings can be communicated through bulletin board notices, newsletters, memos, electronic bulletins or the company Intranet.

Module 2: Recruitment and Selection

Section 2.3: Recruitment

In some cases, jobs are not advertised externally until employees have an opportunity to respond to the posting. In other cases, jobs may be simultaneously advertised externally to speed up the hiring process. Job postings have several advantages: 

Allows all qualified employees to compete for positions



Alerts candidates to advancement opportunities in the department or the organization



Allows the organization to reduce the costs of recruiting



Accommodates seniority by establishing qualifications and other position requirements

Skills Assessment Tools

The human resource information system (HRIS) is technology that supports human resources functions. HRIS can be used as a source for internal recruitment. HRIS skill banks and skill tracking systems can generate computerized employee profiles and skill inventories. These inventories provide a list of candidates who have the needed knowledge, skills and abilities. Having a complete record of each employee’s qualifications provides the following benefits: 

Allows organizations to scan records quickly and to locate qualified candidates



Increases the likelihood of a good match between the job and the employee

For additional information on human resource information systems, see Module 1: HR Administration, Section 1.1: Strategic HR Management and Business Trends.

Employee Referrals

An employee referral program is a recruiting strategy that rewards current employees for referring qualified candidates for open positions (Society for

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Human Resource Management, Employee Referral: What Is an Employee Referral Program 2009). Figure 3-5 shows the potential value of using employee referrals.

Figure 3-5. The Potential Value of Employee Referrals (Society for Human Resource Management, Recruiting and Attracting Talent: A Guide to Understanding and Managing the Recruitment Process 2009) Employee referral programs are most effective when used together with other recruitment methods. For a sample employee referral form, see the following website: http://www.shrm.org/TemplatesTools/Samples/HRForms/Articles/Pages/1CMS_ 007172.aspx. Internal Movement Internal movement refers to the movement of employees from one job to another within the organization. We will look in more detail at the following forms of internal movement:



Promotions



Demotions



Relocations



Transfers



International assignments

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Promotions

In most organizations, a promotion is an advancement of an employee's rank, usually with greater responsibility and more money. Some reasons for promotion include the following: 

Assuming new and different duties of a different position at a higher level



Assuming a position that involves increased responsibilities and the acquisition of additional knowledge, skills or abilities in the same line of work

HR, together with line management, should develop a natural progression of jobs whenever possible. This progression provides employees with a career path for future growth that can also be used as a basis for promotion from within. However, HR management should not create jobs simply to provide a path of upward mobility. Artificial career paths can lead to unrealistic expectations and unnecessary organizational structure and costs. Demotions

A demotion is moving an employee back or laterally to a position that is better suited to his or her talents. Demotions can occur for several different reasons: 

Staff reductions, consolidations or reorganizations



An attempt to move an underqualified employee to a more suitable position



An employee’s request (For example, an employee may not want to continue as a supervisor or may request a part-time schedule.)

Relocations

Relocation means moving an employee to another location for work. This relocation can be within the country or to another country. The organization should consider several factors related to relocations:



The cost to the organization



The employee’s willingness to accept the relocation

Module 2: Recruitment and Selection



Section 2.3: Recruitment

The impact on the employee’s family (including employment opportunities for the spouse)



The need for an orientation program to adjust employees and their families to the new location

Transfers

Often employees transfer to other divisions within an organization. Transfers are usually considered a lateral move with no salary adjustment. Transfers can be initiated by either the employee or management and may involve a move to a different geographic location, function or organizational line. Reasons for transfers include the following: 

The employee desires change but does not want to leave the organization.



The organization finds a better match between the employee’s abilities and the organization’s staffing needs.



The transfer helps the organization balance staffing and reduces the need for terminations.

International Assignments

An international assignee is a person who moves to a new country to work on an international assignment. Figure 3-6 lists examples of types of international assignees whom organizations use to staff their global operations.

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Types of International Assignees Short-term assignee

General Description The employee works in a new country for a specified period of time (usually between three months and a year).

Long-term assignee

The employee is relocated to a new country (usually for longer than one year).

Permanent assignee

Most of the employee’s career is spent moving from one international assignment to another.

Returnee

The person is already employed by the organization and returns to the home country to work. Figure 3-6. Examples of Types of International Assignees

Reasons for organizations to make an international assignment include the following: 

Filling an open position



Transferring technology or knowledge



Developing an employee’s career



Analyzing the market for the organization’s products or services (Society for Human Resource Management, Managing International Assignment 2009)

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Employees may view an international assignment as stopping the upward progress of their career path. That perception can be changed by including these six components in an international assignment: 

Make professional training available to spouses. The International Assignee Research Project reports that 71% of international assignees say that spouse counseling and support are important.



Support the assignee’s children with programs that familiarize them with the country’s schools and culture. A Global Trends survey found that children’s education is one of the most important family challenges with an international assignment.



Provide continuing professional development and education.



Maintain a strong connection between the assignee and the home office and provide reassurance that the assignee will still be considered for promotions.



Require assignees to return to the home office during vacation time to reconnect with coworkers and management.



Clearly communicate the need for the assignment and how the assignee will fit into the organization when the assignment is complete. (Society for Human Resource Management 2000)

External Recruitment Sources Organizations can fill open positions through external recruitment sources. Figure 3-7 lists several advantages and disadvantages of recruiting externally.

Module 2: Recruitment and Selection

 

Section 2.3: Recruitment

Advantages

Disadvantages

of Recruiting Externally

Brings new ideas and talent



May result in poor placements

into the organization



Increases recruitment costs

Helps the organization fill



May cause morale problems

needed competencies 

Provides cross-industry insights



for internal candidates 

Requires longer orientation or adjustment time

May reduce training costs (with experienced hires) Figure 3-7. Advantages and Disadvantages of Recruiting Externally During the external recruitment process, HR or the lead recruiter plays the liaison role between the hiring manager and the external recruitment source. As a liaison, the recruiter is the main contact point in the recruitment process and facilitates the communication between the organization and the external recruitment source. Candidates from outside an organization may be found through a wide variety of sources. Figure 3-8 lists a number of common external recruiting methods and sources.

External Recruiting Sources

Description

Advertising (print and

Advertising includes print publications, kiosks, billboards, radio

nonprint media)

advertisements and television advertisements.

Figure 3-8. Examples of External Recruiting Sources (continued to next page)

Module 2: Recruitment and Selection

External Recruiting

Description

Sources Agencies

Section 2.3: Recruitment

Recruiting agencies can be in-country or global vendors who provide pre-screened candidates quickly. Examples include the following: 

Contract agencies provide a pool of workers for longterm projects.



Temporary agencies offer a contract relationship with an external staffing firm to supply talent through temporary service arrangements.

Career sites (on an

Career sites offer interactive use of the organization’s website

organization’s website)

for branding, communication and relationship building (for example, posting current employee profiles and providing opportunities for individuals to create a profile).

Community awareness

Community awareness promotes awareness of the organization’s brand and identifies the organization as a premier place to work (for example, participation in community volunteer programs, humanitarian events, local job fairs and local school events)

Educational institutions Organizations can post job openings on college and university website job boards, at on-site job fairs and at on-site interviews. Global internships

Global internships are partnerships with global exchange programs to gain access to interns.

Figure 3-8. Examples of External Recruiting Sources (continued to next page)

Module 2: Recruitment and Selection

External Recruiting Sources Government agencies

Section 2.3: Recruitment

Description

Government agencies are online and on-site conduits between employers and job seekers.

Online social networks

Online sites such as Facebook, LinkedIn and MySpace help

and blogs

expand an organization’s talent database, extend the employment brand and acquire top talent.

Outplacement services

Outplacement services maintain job sites or job boards for people who are displaced due to layoffs.

Personal networking

Personal networking means contacting and developing relationships with people in various locations to share information, names and other data about prospective candidates.

Trade and professional

Trade and professional organizations provide placement

organizations

services where employers can post and advertise positions. For example, HR associations (such as the Canadian Council of Human Resources Association) offer online boards and publications where employers can post and advertise positions.

Figure 3-8. Examples of External Recruiting Sources (concluded)

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Recruiting Technology How people apply for jobs and how recruiters look for candidates is changing rapidly (Society for Human Resource Management, Recruiting Goes Mobile 2009). Recruiting is relying more on technology to reach and communicate with potential candidates. Many recruiters are using social networking sites and online job boards as more cost-effective ways to fill open positions (Society for Human Resource Management, The Effect of High-Tech Solutions and Social Networking on the Recruiting Process 2010). We will look in more detail at the following forms of recruiting technology: 

Job databases



Networking sites



Mobile marketing



Virtual CVs



Video conferencing

Job Databases Many job boards are available on the Internet. Examples include the following websites: Australia 

http://www.seek.com.au



http://www.monster.ca



http://www.canadajobs.com



http://www.workopolis.com



http://www.monsterindia.com



http://www.naukri.com



http://www.clickitjobs.com

Canada

India

Module 2: Recruitment and Selection

Section 2.3: Recruitment

Latin America 

http://www.bumeran.com



http://www.bumeran.com.mx



http://www.jobstreet.com.sg



http://www.milkround.com

Mexico

Singapore

United Kingdom

Networking Sites

Figure 3-9. Report on the Impact of Online Technologies (Society for Human Resource Management, Report: Social Networks Catching On as HR Tool 2008) Organizations are increasingly using social networking sites—such as LinkedIn, Facebook and Twitter—to reach a larger pool of applicants, to increase the speed of the recruiting process and to reduce recruiting costs. Guidelines for using networking sites include the following: 

Use networking sites to complement your existing recruitment channels— not to replace them.



Create a job applicant process that directs qualified applicants from the networking site to the organization’s website.

Module 2: Recruitment and Selection



Section 2.3: Recruitment

Assess candidates on skill sets beyond their ability to navigate the social networking sites (Society for Human Resource Management, Recruiting Strategies for Social Media 2010).

Mobile Marketing In 2011 the number of mobile phone subscriptions reached five billion, according to the United Nations’ International Telecommunications Union (Touré 2011). Many job candidates are now using their mobile phones to search for job information. Organizations can use these low-cost methods of reaching candidates through mobile marketing: 

Short messaging services such as Twitter allow users to send very short text messages to a restricted audience. Organizations can use these sites to update candidates about open positions.



Organizations can add quick response (QR) tags to their recruiting advertisements. Candidates use the cameras on their mobile phones to take a picture of the QR tag. The candidate then e-mails the tag to the organization, which quickly sends job information back to the candidate.



Image recognition technology is more flexible than QR tags. This technology allows candidates to take a mobile phone picture of any image selected by the recruiter (for example, a sign at a job fair). The candidate emails the picture to the recruiter, and the recruiter sends relevant information back to the phone’s Internet browser. (Society for Human Resource Management, Reaching Smart Prospects on their Smart Phones 2009)

Reaching candidates through text messages on their mobile phones offers several benefits:



Increased efficiency



Broader reach

Module 2: Recruitment and Selection



Section 2.3: Recruitment

Immediacy (Society for Human Resource Management, Recruiting on the Run 2010)

Video Conferencing Video conferencing used video conference equipment to bring together workers from widely scattered locations. Organizations are increasingly using this recruiting technology in job interviews. Video technology is generally not used for initial screenings of candidates. Video conferencing is generally better suited for interviewing the best applicants, particularly if the candidate and the organization are more than a half day of travel apart. In that case, a video conference can save the organization time and money (Bolch 2007). Figure 3-10 lists some advantages and disadvantages of video conferencing.

Advantages

Disadvantages

of Video Conferencing



Speeds up the search process



Eliminates the cost of travel



Reduces time demands on



Technical problems, such as lags in transmission



Discomfort with the technology

applicants 

Difficulty with staying engaged with the candidate

Figure 3-10. Advantages and Disadvantages of Video Conferencing (Bolch 2007)

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Section 2.3: Recruitment

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Module 2: Recruitment and Selection

Section 2.3: Recruitment

2.4: Selection

This section covers the following information from the Body of Knowledge:

Behaviors: 06. Choose a group of potential applicants for managers to interview (for example, read resumes and conduct phone interviews) 07. Scheduling interviews with managers and applicants 08. Answer questions from job applicants 09. Interview job candidates 11. Organize assessments of applicants (for example, schedule and score assessments, share results) 12. Coordinate the final selection process (for example, schedule interviews with managers, check references) 13. Coordinate the employment offer (for example, start date, salary, benefits)

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Section 2.3: Recruitment

15. Manage database of applicants (for example, track the sources of applicants and the results of the recruiting and selection process, decide where to store information about candidates for possible future employment) Skills & Knowledge: 04. Procedures to review applications and watch applicants’ progress, including tracking systems 05. Procedures to check references 06. Assessments or evaluations of applicants 07. Procedures to conduct assessments or evaluations 08. Tools for selecting candidates 10. Interviewing techniques 11. Recruiting process (job announcement, initial applicant review, interviews, assessments, selection, job offer and orientation)

Section 2.4: Selection Introduction ..................................................................................................................................65 Overview of the Selection Process ..............................................................................................65 Step 1: Pre-Screen ........................................................................................................................66 CVs and Application Forms .......................................................................................................66 Pre-Employment Tests ...............................................................................................................69 Other Pre-Screening Tools .........................................................................................................70 Qualifications and Eligibility .....................................................................................................71 Applicant Notification ................................................................................................................72 Step 2: Track ................................................................................................................................72 Step 3: Interview ..........................................................................................................................73 Types of Interviews ....................................................................................................................73 Guidelines for Interviews ...........................................................................................................77 Step 4: Evaluate............................................................................................................................79 Interview Feedback ....................................................................................................................79 Background Investigations .........................................................................................................79 Step 5: Select .................................................................................................................................81 Reliability and Validity of Selection Tools and Methods ..........................................................81 Realistic Job Previews ................................................................................................................82 Step 6: Offer .................................................................................................................................84 Contingent Job Offer ..................................................................................................................84 Employment Offer ......................................................................................................................84 Offer Negotiation .......................................................................................................................85

Employment Contracts ...............................................................................................................85 Handling Nonselected Candidates .............................................................................................86

Module 2: Recruitment and Selection

Section 2.4: Selection

Introduction After HR and line managers have identified and recruited qualified candidates for an open position, they need to gather the information needed to make a selection decision. Selection is the process of hiring the most suitable candidate for a job.

This section examines each step of the selection process in detail.

Overview of the Selection Process Figure 4-1 shows the six steps of the selection process. Each step is designed to narrow the field of applicants down to the most qualified people. More information is gathered about prospective candidates during each step. With this information, employers can match the prospective employees’ qualifications to the organization’s requirements.

Figure 4-1. The Selection Process

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Section 2.4: Selection

Your organization may not always conduct all the steps in the order shown in Figure 4-1. However, this is an example of the selection process used by many organizations. A discussion of each step follows.

Step 1: Pre-Screen The first step of the selection process is to pre-screen the pool of candidates. Prescreening means examining or interviewing applicants before further selection takes place.

CVs and Application Forms Pre-screening begins with analyzing the candidate’s curriculum vitae (CV) and/or application form. Efficient pre-screening by HR has the following important uses: 

Identifies who fits the minimum selection criteria



Provides a source of questions for the interviewer and for reference checks



Ensures that line management spends time interviewing only qualified candidates

CVs/Resumes The curriculum vitae, also known as a resume, highlights the candidate’s strengths. Figure 4-2 shows a CV checklist that can help evaluate the CVs you receive.

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Section 2.4: Selection

Figure 4-2. CV/Resume Analysis Checklist Application Forms A good application form is one that is complete, easy to read and easy to review. Figure 4-3 identifies the information usually found on the application form.

Application Information 

Basic personal data (name, address and phone number)



Education, training and special skills



Work history, with dates of employment



References and authorization to check them



Authorization to verify all information



Statement regarding truthfulness of information



Candidate signature Figure 4-3. Application Information

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Section 2.4: Selection

Many HR professionals believe candidates should submit an application form in addition to a resume, for the following reasons: 

The resume provides information the candidate wants you to know; the application provides information you want to know.



The application form may indicate if the candidate has exaggerated accomplishments on the resume.



The candidate’s signature on the application form serves as legal verification that the information is correct and truthful.

Warning Signs Figure 4-4 identifies warning signs that indicate potential problems with a CV or application form. The presence of warning signs does not necessarily mean that a candidate should be rejected. However, additional information is needed before making a final decision on the application.

Figure 4-4. Warning Signs in CVs and Application Forms

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Section 2.4: Selection

Pre-Employment Tests Pre-employment testing is a useful screening tool for many organizations. An appropriate pre-employment test has the following features: 

Is job relevant



Is valid (that is, measures what it claims to measure)



Is reliable (that is, measures consistently)



Helps the organization make more effective employment decisions about candidates

Follow these guidelines when creating or using pre-employment tests: 

Use reliable and valid assessment instruments and procedures.



Use assessment tools that are appropriate for the target population.

Additional information about reliability and validity can be found in Module 1: HR Administration, Section 2: Gathering, Measuring and Reporting HR Data. Following are some examples of pre-employment tests. Aptitude Tests Aptitude tests assess the candidate’s ability to learn a new skill. For example, a candidate for a factory assembly job may be asked to take a manual skill test. Cognitive Ability Tests Cognitive ability tests assess skills the candidate has already learned. One kind of cognitive ability test is the performance test (also known as the work sample test). There are several kinds of cognitive ability tests. Typing tests are one simple example. Another example is asking an editor to edit a brief section of the organization’s policy manual.

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Section 2.4: Selection

Personality Tests Personality tests assess the candidate’s social interaction skills and patterns of behavior. These tests report what can be described as traits, temperaments or dispositions. Some tests focus on characterizing an individual as being within the normal ranges of adult functioning. Others focus on identification of abnormal behavior. Psychomotor Tests Psychomotor tests require a candidate to demonstrate a minimum degree of strength, physical dexterity and coordination in a specialized skill area. This test is appropriate only if the job’s essential functions require such abilities.

Other Pre-Screening Tools Phone calls and work reference checks are two other tools that HR professionals can use to pre-screen candidates.

Pre-Screening Phone Calls A phone call with the candidate can be a time-effective form of pre-screening. In a few minutes, interviewers can accomplish the following: 

Verify the candidate’s background, experience and availability.



Describe the job in greater detail and answer questions.



If both the interviewer and candidate are still interested, ask the candidate to come to the organization for a pre-screening interview.

Work Reference Checks Always obtain the candidate’s permission before conducting work reference checks. Former employers, clients and colleagues can provide in-depth information about the candidate’s work. The most informative references will be from former or

Module 2: Recruitment and Selection

Section 2.4: Selection

current supervisors, who will know the candidate’s work and will have observed the candidate performing a similar job. Reference checking has several important purposes: 

To achieve better hiring fits



To confirm the honesty and accuracy of the resume



To protect the substantial investment that an organization makes when hiring

An example of an employment reference check form is available at the following website: http://www.shrm.org/TemplatesTools/Samples/HRForms/Articles/ Pages/CMS_019909.aspx. Intercultural Assessment Tools An increasing number of intercultural assessment tools help organizations prescreen the right people for international assignments or positions in multicultural situations. These tools identify the candidate’s adaptability and intercultural competence. Examples include the following two assessment tools: 

In Canada: the International Personnel Assessment tool (iPASS)



In the Netherlands: the Multicultural Personality Questionnaire (MPQ) (Society for Human Resource Management, Assessment Instruments for a Global Workforce 2007)

Qualifications and Eligibility Some organizations request verification of the candidate’s academic qualification. For example, candidates may be asked to provide verification that they attended the educational institution listed on the resume or application form. Employment eligibility varies according to local employment laws.

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Section 2.4: Selection

Applicant Notification Whenever possible, keep applicants informed of their status and avoid any lengthy delays. If you are slow to contact a pre-screened qualified candidate, that candidate may be hired by another organization. Both the recruiter and the administrative process can impact an applicant’s overall impression of the organization. To maintain a positive and professional image for the organization, make applicant notification a priority.

Step 2: Track The second step of the selection process is to track the pre-screened applicants. An applicant tracking system (ATS) is a software system that helps an organization recruit employees. Many applicant tracking systems support the following tasks: 

Storing and processing resumes



Making the job requisition process more efficient



Providing reporting metrics that allow organizations to apply their recruiting budget more effectively

Recently the ATS has also evolved into a platform for services such as video interviewing, background checking, assessment testing, onboarding, and as a link to social media sites (Society for Human Resource Management, Applicant Tracking Systems Evolve 2011). Commonly used applicant tracking tools include products from Taleo and Kenexa. Another option for tracking applicants is outsourcing the task to an external agency. In this case, recruiting professionals act as a liaison between external agency recruiters and internal hiring managers or other internal stakeholders

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Section 2.4: Selection

involved in the recruiting process. The recruiting professional has the following additional responsibilities: 

Serve as a point of contact within the organization to communicate job requirements and recruiting processes to the agency



Ensure that the applications received from the agency are tracked to the organization’s job database and are consistent with the external candidate application process

Step 3: Interview The third step of the selection process is to interview the qualified candidates.

Types of Interviews Interviews determine how well the candidate meets the needs of the organization. Organizations tend to use interviews for qualifying candidates more than any other procedure in the selection process. Interviews can range from short pre-screening interviews (20 minutes or less) to long in-depth interviews (one hour or more). Figure 4-5 identifies the differences between pre-screening and in-depth interviews. Pre-Screening Interviews

In-Depth Interviews



Usually 20 minutes or less



Usually one hour or more



Usually conducted by HR



Usually conducted by line



Useful when an organization has a high volume of applicants

managements 

May be divided into several in-

for a job and face-to-face

depth interviews by both line

interviews are needed to judge

managers and potential

pre-qualification factors

colleagues

Figure 4-5. The Differences between Pre-Screening and In-Depth Interviews

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Section 2.4: Selection

There are many styles of in-depth interviews. Three styles that we will discuss are the behavioral interview, the competency-based interview and the structured interview. Behavioral Interview The behavioral interview is the most common type of interview. Figure 4-6 describes the behavioral interview. Description 

The interviewer focuses on



Provides insight into how the

how the applicant previously

candidate handled past job-

handled situations (real

related situations

experiences, not hypothetical 

Comments



Allows the interviewer to probe

ones).

more than with traditional

The interviewer asks very

interview questions

direct questions to determine if the individual possesses the skills necessary for the job. Figure 4-6. The Behavioral Interview

The premise of the behavioral interview is that past performance is the best predictor of future performance. For example, an interviewer may ask a candidate for a management position to describe a situation in which the candidate coached a difficult employee. The candidate gives an example that illustrates past performance, while the interviewer looks for the following three key pieces of information:



A description of the situation or task



The action taken



The result or outcome

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Section 2.4: Selection

Figure 4-7 provides examples of questions used in behavioral interviews.

Figure 4-7. Examples of Questions for Behavioral Interviews Competency-Based Interview Competencies are the skills, behaviors and knowledge that are needed to succeed in a specific job. Figure 4-8 describes the competency-based interview. Description 

The interviewer asks questions



Provides insight into the

that are based on real situations

candidate’s proficiency in a

related to the competencies for

particular competency

the position. 

Comments



Gathers information that is

The interviewer asks the

predictive of what the

candidate to provide an

candidate’s behavior and

example of a time he or she

performance is likely to be in

demonstrated the competency.

the position

Figure 4-8. The Competency-Based Interview (Hoevemeyer 2005)

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Section 2.4: Selection

Examples of questions used in competency-based interviews are shown in Figure 4-9. The questions focus on a competency in change management.

Figure 4-9. Examples of Questions for Competency-Based Interviews (Hoevemeyer 2005) Structured Interview Figure 4-10 describes the structured interview. Description 

The interviewer asks every

Comments 

Ensures that similar

candidate the same questions.

information is gathered from all

Follow-up questions may be

candidates

different.

Figure 4-10. The Structured Interview (continued to next page)

Module 2: Recruitment and Selection

Section 2.4: Selection

Description 

The interviewer stays in control

Comments 

of the interview.

Gives each candidate the same opportunity to create a good impression



Works best when the interviewer wants to ensure that the same questions are asked of all candidates

Figure 4-10. The Structured Interview (concluded) Different types of questions can be used in the structured interview. The key is that the interviewer asks every candidate the same group of questions.

Guidelines for Interviews Before the interview, use the checklist in Figure 4-11 to prepare for your conversation with the candidate.

Figure 4-11. Pre-Interview Checklist (Society for Human Resource Management, Interview: PreInterview Checklist 2011)

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Section 2.4: Selection

During the interview, take the actions described in Figure 4-12. These actions will help put the candidate at ease and will increase the likelihood of an effective interviewing experience. Action

Description Tell the candidate what to expect during the interview.

Establish rapport.

Establish an environment that encourages the candidate to relax and to provide information. Frequently summarize or paraphrase what you hear to make

Listen carefully.

sure you understand what the candidate is saying. You should observe and listen more than you talk.

Make smooth transitions

An organized, logical interview works best for both you and the

from one topic to another.

candidate. Cover a topic area thoroughly and then move on to the next area.

Observe nonverbal

Be aware of facial expressions, gestures and body positions.

behavior.

This applies to both you and the candidate.

Take notes.

Taking notes will help you remember your impressions and significant pieces of information from the interview. However, stay engaged with the candidate, and don’t make notes directly on the application form or resume.

Conclude the interview.

Tell the candidate what the next step in the process will be.

Figure 4-12. Guidelines for an Effective Interview

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Section 2.4: Selection

Step 4: Evaluate The fourth step of the selection process is to evaluate the candidates.

Interview Feedback It is good practice to speak with the candidate following the interview, elicit their feedback, answer related questions, and get a sense of the candidate’s overall interest. Examples of questions to ask may include: 

How do you feel about the interview?



What was your impression about the organization?



What questions do have about the role? Was the role as you expected?



How interested are you in the position? (Brown and Swain 2009)

Additionally, this is a good time to provide honest and concise feedback for the candidate’s future employment. Be certain to provide feedback that is meaningful allowing the applicant to understand their strengths and weaknesses in comparison to the job requirements.

Background Investigations Background investigation is the process of authenticating the information supplied to a potential employer by a job applicant in his or her resume, application and interviews. Organizations that conduct thorough background investigations usually make better hiring decisions and may avoid negligent hiring claims. Negligent hiring involves hiring a candidate who the employer knew (or should have known based on a reasonable investigation of the candidate’s background) posed a risk to others in the workplace. HR professionals often conduct the background investigations. These investigations should be the same for candidates applying for the same job. Make

Module 2: Recruitment and Selection

Section 2.4: Selection

sure a clear connection exists between the background investigations and the requirements of the job. Common background investigations include the following. Internet Search An Internet search on the candidate's name, especially using an Internet search engine such as Google.com, helps the organization confirm candidates’ claims about their jobs, performance, awards and other information. Sites such as LinkedIn may also serve to check the candidate’s consistency in claims about job history and achievements. Criminal Background Check Organizations conduct criminal background checks for the following reasons:



To determine if the candidate has a history of criminal convictions that may disqualify her or him from consideration



To increase the quality of applicant hiring



To reduce the possibility of theft and embezzlement

Credit History Checks Credit history checks should be conducted only on the following candidates: 

Candidates for positions of financial responsibility (such as accounting and finance professionals)



Candidate for positions that involve handling significant amounts of currency or other valuables

If your credit reports are acquired from external vendors, the organization must comply with any applicable credit check laws.

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Section 2.4: Selection

Step 5: Select The fifth step in the selection process is selecting a candidate to fill the open position. Selection of the most qualified candidate will be based on the interviews, evaluations, and tests conducted in Steps 3 and 4 of the selection process. A tie breaker is a method used to select a preferred candidate when two or more candidates are considered equally qualified. The job requirements will help you determine what particular categories are the most important. The winning candidate should be the one who scores higher in the most consequential categories. In some cases the decision must be based on a personality fit. The wrong fit leads to an unhappy employee, manager and team. The right fit can energize the environment and lead to a happy employee, manager and team. Often the head of the department or the organization must make the final decision about the right fit.

Reliability and Validity of Selection Tools and Methods Hiring the wrong person for the job is a costly mistake. Selection errors can impact the organization’s human capital management plan, employee morale, management time, training budgets, productivity and profitability. Just as reliability and validity were critical parts of the pre-screening process, you must also establish the reliability and validity of the selection tools and methods. Establishing Reliability Reliability is the ability of an instrument to measure consistently. For example, if an applicant takes a motor skills test twice, the scores should be similar (allowing for the effect of practice). If the scores differ significantly, the test may not be reliable.

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Section 2.4: Selection

Perfect reliability is difficult to achieve. The following types of errors can lead to inconsistent results: 

Failure to measure some aspect of an important attribute



Irrelevant questions in an interview or on a test



Different time limits for candidates in an interview or on a test

Establishing Validity Validity is the ability of an instrument to measure what it is intended to measure. For example, a typing performance test is probably a valid prerequisite for applicants who will be expected to do typing (such as for a position in an administrative processing center).

Realistic Job Previews The cost of hiring and training an employee is substantial. Therefore, providing a realistic job preview (RJP) is in the best interest of the candidate and the organization. A realistic job preview informs candidates about all aspects of the job and the work environment. For some candidates, the RJP can occur earlier in the selection process, during the interview. The RJP has three purposes: 

Gives candidates as much information as possible, so they can make an informed decision about their suitability for the job



Gives organizations an opportunity to portray the job objectively— including both favorable and unfavorable factors



Increases the possibility of a good match between the candidate and the organization

For example, an RJP may include:



Written job descriptions



Observations of employees

Module 2: Recruitment and Selection

Section 2.4: Selection



Interviews with future coworkers



Job-related videos



Simulations that replicate the working conditions

Types of Realistic Job Previews Organizations can create realistic job previews in a variety of ways, including the following: 

Tours of the workplace. A walk-through of the workplace provides a candidate with an accurate impression of the work environment. Candidates can determine their comfort level with the physical format (for example, cubicles or traditional offices, break areas and cafeterias) and with noise levels.



Job simulations. Candidates may experience a simulation of the job in order to determine their suitability. For example, an applicant for a cleanroom manufacturing position can wear the clean-room attire that is required several hours a week.



Video presentation. A candidate may view a video presentation before starting to work for an organization. The video can portray the history of the company, the organizational culture, and a discussion of benefits and the path of a typical day.

Benefits of RJPs A wise saying applies to realistic job previewing: It pays to tell the truth. An effective RJP has the following features: 

Dispels unrealistic expectations and accurately represents organizational realities



Promotes an informative exchange between the candidate and the organization.



Encourages self-selection



Helps increase job satisfaction



Helps prevent disappointments

Module 2: Recruitment and Selection



Reduces post-entry stress



Reduces employee turnover

Section 2.4: Selection

Step 6: Offer The last step of the selection process is offering the position to the most qualified candidate.

Contingent Job Offer Organizations may make a job offer that is contingent on the candidate passing certain tests or meeting certain requirements. This is known as a contingent job offer. The tests or requirements can include the following: 

Medical examination



Physical fitness test



Psychological test

Employment Offer An employment offer should quickly follow the selection of the most qualified candidate. Mishandling this part of the process can result in losing the candidate to another organization or can give the employment relationship a negative start even if the candidate accepts the position. An employment offer is formally communicated through an offer letter. Employment offers must be worded carefully. Figure 4-13 provides a simple list of guidelines for the offer letter.

Module 2: Recruitment and Selection

Section 2.4: Selection

Offer Letter Guidelines 

Use a standard letter that has been approved by the legal department.



Clearly state the terms of the offer and any contingencies.



Establish a reasonable acceptance deadline.



Clearly state the acceptance details (for example, requiring a signature returned on a duplicate copy of the offer letter). Figure 4-13. Offer Letter Guidelines

Offer Negotiation In some countries, the offer letter is followed by little or no negotiation. Both the candidate and the organization will have a mutual understanding about what the offer letter will include before the formal offer is made. In other countries, the offer letter may be the starting point of a long negotiation. After the negotiations are complete, the offer and contract of employment may be finalized.

Employment Contracts An employment contract is an agreement between the organization and an employee that explains the employment relationship. A written contract helps clarify employment terms. The specific terms will vary based on the organization, the job and applicable local laws. The following list provides examples of items commonly covered in an employment contract: 

Terms and conditions of employment

Module 2: Recruitment and Selection

Section 2.4: Selection



General duties and job expectations of the employee



Confidentiality and nondisclosure terms



Compensation and benefits



Terms for resignation or termination



Relocation



Severance provisions



Appropriate signatures and date

What is the difference between an offer and a contract? The legal distinction may vary from country to country. In general, an offer is not legally binding and can be retracted at any time. A contract confers specific legal obligations on both the organization and the new employee. In some counties, the contract can be very difficult to break without significant costs. Involve legal counsel in developing any offer letter or contract for the organization.

Handling Nonselected Candidates Candidates who are not selected for the open position should be notified promptly. A personal phone call or letter is the preferred method for such notifications. However, standardized rejection letters may be necessary when there are numerous applicants. If possible, add a paragraph to the letter showing that the organization has given careful thought to the candidate and to the selection. For example, the letter can indicate that the selection was a difficult decision and that the deciding factor was due to the need for a specific skill or competency in the candidate. The candidate is more likely to feel respected and to retain a positive impression of the organization.

Module 2: Recruitment and Selection

Section 2.4: Selection

2.5: New Hire Onboarding

This section covers the following information from the Body of Knowledge: Behaviors: 14. Prepare for the new hire’s arrival (for example, get identification documents and required forms, set up email address) 17. Coordinate orientations for new employees (for example, discuss the company’s expectations for the position, review the employee handbook, explain the benefit plans)

Section 2.5: New Hire Onboarding Introduction ..................................................................................................................................89 New Employee Orientation .........................................................................................................89 Before the Employee’s Arrival ..................................................................................................89 Orientation/Induction .................................................................................................................90 New Employee Orientation Checklist ........................................................................................91 Supervisor Orientation Checklist ...............................................................................................92 New Employee Onboarding ........................................................................................................93 Onboarding Roles and Responsibilities .....................................................................................94 Evaluating the Effectiveness of Onboarding ..............................................................................98

Module 2: Recruitment and Selection

Section 2.5: New Hire Onboarding

Introduction Research on orientation and onboarding shows that a positive start at an organization has the following benefits for employees: 

Creates enthusiasm



Reduces anxiety



Encourages social connections

To support that positive start, a key task for HR professionals is to arrange and complete all administrative details before the new employee arrives (Corporate Leadership Council 2004). This section examines the following topics: 

New employee orientation



New employee onboarding



HR’s role in facilitating the employee’s successful transition into the new environment

New Employee Orientation Before the Employee’s Arrival Employees play a key role in helping an organization meet its goals and objectives. Many organizations begin to inform new employees about their roles before the employees arrive for their first day of work. Offer letters and new hire welcome packages are the most common methods of communicating information to the new employee before the start date.

Module 2: Recruitment and Selection

Section 2.5: New Hire Onboarding

Typical contents of a new hire welcome package include the following: 

Welcome letters (for example, from the organization’s CEO, president and human resources department)



Payroll information



Policies manual



Benefits information



Benefits enrollment forms (Corporate Leadership Council 2004)

In addition to sending the welcome package, the organization should take the following steps to prepare for the employee’s arrival: 

Communicate. Contact the employee and provide a personal welcome.



Set up the work area. Verify that the employee’s office space is ready and that the computer, telephone and any other necessary equipment are arranged.



Schedule ahead. Ensure that an orientation program is in place (University of California, Davis, Human Resources 2010).

Orientation/Induction Orientation, also known as induction, is the first step in the formal process of training employees. Through orientation, employees become familiar with the organization, their department, their coworkers and their job. Orientation programs usually span one to two days. The orientation provides new employees with three types of information: 

Organizational information



Policies, procedures and benefits



Work context (including job procedures)

The purpose of the orientation program is to ease the employee’s transition to a new environment. During the orientation, the employee can establish relationships with coworkers and develop a sense of belonging to the organization. The

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Section 2.5: New Hire Onboarding

employee also gains a realistic image of the job. An effective orientation program helps the employee quickly become a productive and contributing member of the organization. Orientation programs can be divided into a general orientation and a department orientation. HR is usually responsible for the general orientation and can also provide input to the manager on the department orientation. However, the manager is responsible for ensuring that employees understand how they will contribute to their department and how they fit into the organization structure. Figure 5-1 shows who usually conducts each type of orientation and lists typical activities.

Figure 5-1. Responsibilities and Activities for General and Department Orientations

New Employee Orientation Checklist Figure 5-2 provides a sample checklist for the new employee orientation.

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Figure 5-2. Sample New Employee Orientation Checklist (Society for Human Resource Management, New Hire: Orientation Checklist #1 (All), n.d.)

Supervisor Orientation Checklist Figure 5-3 provides a sample checklist for supervisors conducting a new employee orientation.

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Figure 5-3. Orientation Checklist for Supervisors

New Employee Onboarding Onboarding is the process of helping new employees learn the organization’s policies, procedures and culture in addition to their job responsibilities. Onboarding includes both the orientation and the first three to twelve months of employment. The purpose of the onboarding process is to provide the employee with a positive start at the organization. This positive start can have many benefits; including increasing the employee’s enthusiasm, helping reduce anxiety and helping the employee connect with coworkers (Corporate Leadership Council 2004). Successful onboarding programs generally include the following factors: 

Active rather than passive participation by new employees

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

Onboarding spread out over a period of time



Use of checklists to ensure that all important material is covered



Avoidance of information overload

Onboarding Roles and Responsibilities During onboarding, HR professionals, the hiring manager, coworkers and others learn more about the new employees and further integrate them into the organization in the following areas: 

Organizational culture and norms



Organizational goals and objectives



Specific functional areas in the organization



Departmental and job expectations



Available work resources and tools



Mentor options



Performance management systems



Work/life balance and support resources

What specific activities should take place during onboarding? Figure 5-4 provides a list of best practices included in a successful onboarding process.

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Activity

Description

Help the new

Plan the new employee’s first week and verify that the

employee feel

following tasks are complete:

welcome



E-mail and phone are functioning.



A clean work space is available.



Business cards are ready.

Clearly define roles

Ensure that new employees understand their roles and

and responsibilities

their responsibilities.

Socialize and

Provide new employees with the opportunity to meet their

integrate with the

coworkers. This can be accomplished by team lunches,

team

cross-departmental meetings and/or a mentor program.

Modify the

For example, all management employees will need both a

onboarding process

review of organizational policies and programs and also

to meet the needs of

information on how to administer these policies and

different groups of

programs.

employees  Create a formal

Establish an evaluation process using surveys or interviews with new employees about their

evaluation system

experiences. 

Hold a more formal performance discussion after three to six months.



Encourage the employee to discuss problems, and find ways to provide support.

Figure 5-4. Best Practices in a Successful Onboarding Process

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Figure 5-5 lists general guidelines for delegating onboarding responsibilities to different departments and people. Responsible

Onboarding Responsibilities

Departments/People Corporate Services



Site information (for example, cafeteria and fitness center)

Facilities

Human Resources



Phone access



Workspace preparation



Onboarding coordination



Alerting functional groups of new employee’s start date



Background checks



New employee orientation



New employee paperwork



Work hours



History and background of the organization



Review of the organizational chart



Facility tour



Computer at workstation

Information



E-mail

Technology



Intranet access



Passwords



Systems access



Voice mail



Creation of new employee paperwork



Creation of new employee policies

Legal

Figure 5-5. Delegation of Onboarding Responsibilities to Different Departments and People (continued to the next page)

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Responsible

Section 2.5: New Hire Onboarding

Onboarding Responsibilities

Departments/People Occupational Health



Health questionnaire



Pre-placement examination (where required)



ID badges



Parking identification ticket



Security access to buildings



Vehicle registration



Team interactions



How to accomplish tasks



How to find and requisition tools and equipment



Mission, vision and values



Strategic goals and objectives of the organization



High-level review of roles and responsibilities



Description of organizational culture



Introductions to coworkers and others within the

Services Safety and Security

Coworkers

Management

Mentor

Supervisor

organization 

Review of informal rules and policies



Answers to day-to-day questions



Work behaviors, standards and expectations



Introductions to coworkers and others within the organization



Department tour



Review of roles and relationships within department

Figure 5-5. Delegation of Onboarding Responsibilities to Different Departments and People (concluded)

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Talya N Bauer, Ph. D., in the Society for Human Resource Management Foundation’s Effective Practice Guidelines Series−On Boarding New Employees examined on-boarding practices. Figure 5-6 summarizes a sample onboarding program. The program components were developed to be distributed to either all employees or incoming executives from the first day on the job and throughout the first year of employment.

Figure 5-6. Sample Onboarding Components (Bauer 2010)

Evaluating the Effectiveness of Onboarding The effectiveness of the onboarding program can be related to the amount of turnover in the first year of employment. Onboarding programs can help

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Section 2.5: New Hire Onboarding

employees adjust to the new environment by introducing them to coworkers, lessening feelings of isolation and providing a better understanding of expectations and future opportunities. HR professionals can evaluate their organization’s onboarding initiatives using metrics that include the following: 

Turnover/retention rates. Compare retention rates for various groups. For example, what is the retention rate for employees who began their employment in 2011 compared to employees who began in 2010?



Retention threshold. Track the point at which most new employees tend to exit the organization. For example, if most new employees exit within the first 90 days of employment, the organization can conduct exit interviews to determine the cause of the early exit.



Performance measures. Compare the performance of groups provided with different onboarding experiences. For example, one group is provided with one week of onboarding experiences and a second similar group is provided with a full month.



Formal/informal feedback. Ask new employees open-ended questions to determine their satisfaction with the onboarding process and the organization.



Flexibility. Flexibility and adaptability allow your organization to provide employees with an optimal work environment.

Figures 5-7 and 5-8 provide a sample new hire survey that can be used to obtain new employee feedback.

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Figure 5-7. Sample New Hire Survey (Society for Human Resource Management, Survey: New Hire Survey, n.d.)

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Figure 5-8. Sample New Hire Survey (Society for Human Resource Management, Survey: New Hire Survey, n.d.)

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2.6: Recruitment Metrics

This section covers the following information from the Body of Knowledge: Behaviors: 16. Report recruiting metrics (for example, the number of applications received, the number of candidates interviewed, the number of applicants hired)

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Section 2.6: Recruitment Metrics Introduction ................................................................................................................................105 Using Recruitment Metrics to Measure Business Impact ......................................................105 Evaluating the Effectiveness of Recruiting Efforts ..................................................................105 More Staffing Metrics ..............................................................................................................110 Workforce Analytics and Reporting ........................................................................................115

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Section 2.6: Recruitment Metrics

Introduction Recruiting and acquiring talent has a large economic impact on an organization. Talent is what moves the organization forward and helps the organization achieve strategic success. This is true whether the organization’s operations are for profit, not for profit, governmental or nongovernmental. HR is responsible for collecting workforce metrics. Organization leaders are interested in these metrics and in how HR’s talent management impacts the organization’s financial goals. Many HR professionals only analyze and report activities. However, workforce metrics and tools are useful beyond simply measuring talent acquisition. The HR professional must also report what the activities accomplish. The data can be used to provide insights that improve talent management decisions, which improves organizational effectiveness. Metrics used in this manner are valuable in developing workforce planning strategies that place the right people in the right place at the right time. This section examines some of the traditional workforce metrics used by HR.

Using Recruitment Metrics to Measure Business Impact Evaluating the Effectiveness of Recruiting Efforts The metrics collected by HR provide data that the organization can use to make key decisions. Recruitment metrics should take both a short- and long-term view and should help the HR department contribute to the goals and objectives of the organization. The yield ratio is a valuable metric for evaluating the effectiveness of recruiting efforts. A yield ratio compares the number of applicants at one stage of the © 2012 SHRM

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recruiting process to the number of applicants at the next stage. This ratio helps you determine how many candidates you will need, the cost of recruiting methods and the return on investment (ROI). Common yield calculations include the following ratios: 

Qualified candidates to total candidates



Minority candidates to total candidates



Offers extended to qualified candidates



Offers extended to final interviews



Offers accepted to offers extended

Figure 6-1 provides the data for a simple yield ratio calculation.

Figure 6-1. Sample Situation for Yield Ratio Calculation

Figure 6-2 shows the formula for calculating the yield ratio of qualified candidates to total candidates.

Figure 6-2. Yield Ratio Calculation The yield ratio of qualified candidates to total candidates is 10%.

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This information provides measureable and quantifiable data that help the HR professional better estimate recruiting efforts and costs. Figure 6-2 shows that 100 potential candidates are needed to find 10 qualified candidates. This information helps forecast the amount of effort required to fill a position. Analyzing the Cost of Recruiting Cost per hire is the traditional measure of recruiting costs. Cost per hire is the amount of money needed to recruit a new employee. This metric is calculated by dividing the total costs of all hires by the number of new hires, as shown in Figure 6-3.

Figure 6-3. Cost of Hire What are the total costs? This category includes all costs associated with recruiting. Figure 6-4 shows both direct and indirect costs.

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Direct Costs

Indirect Costs



Advertising



Recruiter salaries



Agency fees



Referral incentives

vacancies on



Recruitment materials

coworkers



Screening



Lost productivity



Training



Decline in morale



Overtime



Travel



Signing and referral

Involvement of managers



Impact of unfilled

bonuses Figure 6-4. Direct and Indirect Costs of Recruiting A concern with the cost-per-hire metric is that it oversimplifies the costs of hiring. Cost of hire groups the costs of hiring for all types of employees. Mixing types of employees can misrepresent the true costs of hiring for a specific position. For example, the cost per hire would not be the same for senior-level employees, supervisors and lower-level employees. A better approach is to calculate the cost per hire by employee type. Recruitment costs must be weighed against both short- and long-term recruiting objectives. From a short-term perspective, ongoing efforts can be more expensive than intensive, last-minute efforts. However, from a long-term perspective, ongoing efforts can be more cost-effective over time by providing a steady source of well-qualified candidates. Figure 6-5 shows examples of possible yield ratios and cost-per-hire data for two different recruiting sources.

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Local University

Electronic Job Board

Applications generated

300

Yield ratio of interview

15/20 or 75%

20/300 or 6%

5/15 or 33%

3/20 or 15%

5,000

660

1,000

220

offers Yield ratio of job hires to interviews Total cost-per-recruitment source Cost per hire

Figure 6-5. Examples of Cost-Per-Hire Data for Two Different Recruiting Sources The data in Figure 6-5 demonstrate that the recruiting source can directly impact the cost of recruiting. A source analysis provides a better understanding of the effectiveness of different recruiting sources. The source yield is calculated as shown in Figure 6-6 (Society for Human Resource Management, Source Yield: SHRM Metric of the Month 2007).

Figure 6-6. Source Yield

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The benefits of each recruitment method depend on factors such as the following: 

The length of time needed to fill the position



The number of qualified candidates generated by the recruitment method



The effect of staff time

Organizations should analyze the cost and effectiveness of each recruiting source and make the appropriate changes in its recruiting process.

More Staffing Metrics Many HR professionals are examining their recruiting data in more detail to accomplish the following: 

To better understand the value of their recruiting processes



To ensure that these processes are properly aligned with the organization’s goals (Garvey 2005)

Using a matrix of staffing metrics gives organizations a fuller perspective of the recruiting process. However, the metrics that provide the most valuable data vary from organization to organization. The metrics that are best for your organization will depend on many factors, including the organization’s goals and objectives (Garvey 2005). We will look in detail at the following staffing metrics:



Days to fill



Headcount



Human capital value added



Return on investment



Turnover rate



Vacancy rate

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Days to Fill Days to fill (also known as time to fill) is the average number of days required to hire a person for an open job position. Figure 6-7 shows the formula for days to fill.

Figure 6-7. Days to Fill What is the value of this information? 

HR professionals can determine a realistic amount of time for hiring new employees.



Managers can plan how to redistribute work to existing employees while the position is open.



The organization can complete resource and budget planning.

HR professionals must be aware that increasing the speed of hiring can decrease cost efficiency and quality. However, increasing cost efficiency can decrease the quality of the hire and the speed of hiring. Similarly, a focus on increasing quality may decrease cost efficiency and the speed of hiring. Figure 6-8 portrays the relationship among these three variables.

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Figure 6-8. Factors Influencing Recruitment (Richards 1995)

Many other factors can impact days to fill for international operations, including the following: 

The type of employee for example, international assignee or local hire)



Level of employee (for example, executive, supervisor or lower level)



Legal compliance in specific countries



Labor market conditions



Assignment logistics (for example, visas, work permits and predecision trips)



Culture



Compensation and benefits offerings

Headcount Headcount is the number of people on the organization’s payroll. The headcount includes temporary workers on the organization’s payroll and employees on temporary leave of absence. The headcount does not include independent contractors or temporary workers on an agency’s payroll (Society for Human Resource Management, How to Determine Turnover Rate 2009). The headcount provides a number for one moment in time (for example, on June 1 the headcount was 35,000). Headcount rises and falls as employees leave and are replaced, but these changes are usually small. Large changes in headcount are © 2012 SHRM

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not the result of employee turnover; they are the result of operational changes that drive the demand for talent. Examples of operational changes include expansions, acquisitions, Greenfield operations and divestures. Retention and productivity improvements can also influence headcount. Return on Investment Return on investment (ROI) is a performance measure used to evaluate the financial outcome of an investment. ROI equals the difference between the benefits that an asset or project delivers and the costs of the asset or project, as shown in Figure 6-9. This metric helps HR professionals optimize investments in recruitment, motivation, training and development.

Figure 6-9. Return on Investment Additional information on return on investment can be found in Module 1: HR Administration, Section 1.2: Gathering, Measuring and Reporting HR Data.

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Turnover Rate The turnover rate measures the rate at which employees leave an organization. Figure 6-10 shows the formula for the monthly turnover rate.

Figure 6-10. Turnover Rate Vacancy Rate The vacancy rate measures the rate at which positions open as a result of employee turnover. Vacancy rate can be calculated for one position, one division or the entire organization. Figure 6-11 shows the formula for the vacancy rate.

Figure 6-11. Vacancy Rate Human Capital Value Added This metric measures how the workforce’s knowledge, talent and skills add value to an organization. Figure 6-12 shows the formula for human capital value added.

Figure 6-12. Human Capital Value Added

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Workforce Analytics and Reporting

Figure 6-13. Using Workforce Analytics (Roberts 2009) Workforce analytics refers broadly to the metrics used in determining the effectiveness of HR functions. As reported by Bill Roberts in HR Magazine, workforce analytics should be based on facts: the use of data, metrics, statistics and scientific methods (Roberts 2009). This information helps an organization draw conclusions from its HR data quickly and efficiently. Workforce analytics is considered particularly vital for the most strategic talent management tasks, such as the following: 

Recruiting the right employees



Measuring employees’ performance



Helping employees develop



Compensating employees effectively

Many organizations are outsourcing the entire recruiting life cycle from end to end. As a result, outsourcing vendors become responsible for workforce analytics that support the organization’s long-term goals. For example, the vendor should use selection tools that result in reduced early turnover for the organization

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(Society for Human Resource Management, For Recruitment Outsourcing Success, Mind the Metrics 2007). Data marts and data warehouses are two tools that organizations use to help collect workforce data for analysis. Figure 6-14 shows features of these tools.

Data Mart 

A data mart is a collection of



Data Warehouse 

A data warehouse integrates

data based on the reporting

data from multiple systems—

needs of a specific group.

for example, financial, sales

Data marts are usually heavily

and HR—based on the

indexed for ease of use.

reporting needs of the entire organization. 

Data warehouses are usually not indexed because of the volume of information.

Figure 6-14. Data Marts and Data Warehouses

Many vendors offer products for transforming workforce data into strategic reports. One example is Oracle’s PeopleSoft Workforce Analytics. This product is vendor-independent; you can use data from other human resource information systems as well as from PeopleSoft data. The product provides analytics on workforce demographics, compensation, benefits, turnover and training (Society for Human Resource Management, Workforce Analytics: Strive for More Than Standard HR Reports 2007)

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You have completed Module 2: Recruitment and Selection. Next, if you feel ready, go to the Online Learning Center and check your knowledge by completing the Case Studies, Module 2 Practice Test and the Cumulative Practice Test. Also try the Terminology Quiz to check your knowledge of terminology.

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Bibliography Bauer, Talya N. "SHRM Foundation's Effective Practice Guidelines Series−On Boarding New Employees: Maximizing Success." Society for Human Resource Management. 2010. http://www.shrm.org/about/foundatio n/products/Documents/Onboarding% 20EPG-%20FINAL.pdf (accessed August 31, 2012). Bolch, Matt. "Lights, Camera...Interview!" HR Magazine, March 1, 2007. Brown, Jane Newell, and Ann Swain. The Professional Recruiter's Handbook. London: Kogan Page Limited, 2009. CLC Human Resources. HR Quarterly News and Trends, Q4 2010. Arlington, Virginia: Corporate Leadership Council, 2010. Corporate Leadership Council. Coordinating New Hire Onboarding. Washington, DC: Corporate Executive Board, 2004. —. Implementation and Impact of Employment Branding, The. Washington, DC: Corporate Executive Board, 2003. —. Job Description Creation and Review. Washington, DC: Corporate Executive Board, 2003.

Bibliography

Dessler, Gary. Human Resource Management. 11th Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2008. Garvey, Charlotte. "The Next Generation of Hiring Metrics." HR Magazine, April 2005. Hoevemeyer, Victoria A. Impact Interview Questions: 701 Behavior-Based Questions to Find the Right Person for Every Job. New York, New York: AMACOM, 2005. Pritchard, Christopher W. 101 Strategies for Recruiting Success: Where, When, and How to Find the Right People Every Time. Saranac Lake, New York: AMACOM Books, 2006. Richards, Lance J. Factors Influencing Recruitment. Roberts, Bill. "Analyze This!" HR Magazine, October 1, 2009. Society for Human Resource Management. "Applicant Tracking Systems Evolve." May 27, 2011. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/ATSEvolve s.aspx (accessed August 31, 2012). —. "Assessment Instruments for a Global Workforce." June 1, 2007. http://www.shrmindia.org/assessmen t-instruments-global-workforce (accessed September 26, 2012).

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—. "Build a Talent Pipeline for Diverse Leaders." December 26, 2007. http://www.shrm.org/hrdisciplines/D iversity/Articles/Pages/PipelineforDi verseLeaders.aspx (accessed August 31, 2012). —. "Compensation Series Part I: Job Analysis." July 1, 2004. http://www.shrm.org/Research/Articl es/Articles/Pages/Compensation_20S eries_20Part_20I__20Job_20Analysi s.aspx (accessed August 31, 2012). —. "Diversity, Inclusion a Moral and Business Imperative." October 13, 2010. http://www.shrm.org/Publications/H RNews/Pages/DiversityBusinessImp erative.aspx (accessed August 31, 2012). —. "Effect of High-Tech Solutions and Social Networking on the Recruiting Process, The." May 2, 2010. http://www.shrm.org/Research/Futur eWorkplaceTrends/Documents/Spotl ight%20Q2%202010.pdf (accessed August 31, 2012). —. "Employee Referral: What Is an Employee Referral Program." November 9, 2009. http://www.shrm.org/TemplatesTool s/hrqa/Pages/Whatisanemployeerefer ralprogram.aspx (accessed August 31, 2012).

Bibliography

—. "Future Insights: The Top Trends According to SHRM's HR Subject Matter Expert Panels." 2009. http://www.shrm.org/Research/Futur eWorkplaceTrends/Documents/090700%20Workplace%20panel_trend s_sympFINAL%20Upd.pdf (accessed August 31, 2012). —. "How to Determine Turnover Rate." December 7, 2009. http://www.shrm.org/TemplatesTool s/HowtoGuides/Pages/DetermineTur noverRate.aspx (accessed August 31, 2012). —. "International Transfers: Making Relocation Offers Employees Can't Refuse." SHRM India. April 1, 2000. http://www.shrmindia.org/internation al-transfers-making-relocationoffers-employees-cant-refuse (accessed September 26, 2012). —. "Interview: Pre-Interview Checklist." 2011. http://www.shrm.org/TemplatesTool s/Samples/HRForms/Articles/Pages/ CMS_002170.aspx (accessed August 31, 2012). —. "Job Analysis." October 2009. http://www.shrm.org/Education/hred ucation/Pages/JobAnalysis.aspx (accessed August 31, 2012). —. "Managing International Assignment." September 21, 2009. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/CMS_010358.aspx (accessed August 31, 2012).

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Bibliography

—. "Marketing Manager (Sample Job Description)." http://www.shrm.org/TemplatesTool s/Samples/JobDescriptions/Pages/def ault.aspx (accessed August 31, 2012).

—. "Recruiting on the Run." February 1, 2010. http://www.shrm.org/Publications/hr magazine/EditorialContent/2010/021 0/Pages/0210tech.aspx (accessed August 31, 2012).

—. "New Hire: Orientation Checklist #1 (All)." http://www.shrm.org/TemplatesTool s/Samples/HRForms/Articles/Pages/ 1CMS_002153.aspx (accessed August 31, 2012).

—. "Recruiting Strategies for Social Media." November 22, 2010. http://www.shrm.org/hrdisciplines/st affingmanagement/Articles/Pages/Re cruitingStrategiesforSocialMedia.asp x (accessed August 31, 2012).

—. "Practicing the Discipline of Workforce Planning." December 2010. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/PracticingWorkforc ePlanning.aspx (accessed August 31, 2012).

—. "Recruiting: Recruitment and Selection Policy and Procedures." 2011. http://www.shrm.org/TemplatesTool s/Samples/Policies/Pages/CMS_000 582.aspx (accessed August 31, 2012).

—. "Reaching Smart Prospects on their Smart Phones." January 1, 2009. http://www.shrm.org/Publications/St affingManagementMagazine/Editori alContent/Pages/0109taylor.aspx (accessed August 31, 2012).

—. "Report: Social Networks Catching On as HR Tool." November 3, 2008. http://www.shrm.org/Publications/H RNews/Pages/SocialNetEmergingTo ol.aspx (accessed August 31, 2012).

—. "Recruiting and Attracting Talent: A Guide to Understanding and Managing the Recruitment Process." 2009. http://www.shrmindia.org/sites/defau lt/files/1109%20Recruiting%20EPG%20Final.pdf (accessed August 31, 2012). —. "Recruiting Goes Mobile." November 12, 2009. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/RecruitingG oesMobile.aspx (accessed August 31, 2012).

—. "Source Yield: SHRM Metric of the Month." April 1, 2007. http://www.shrm.org/Research/Articl es/Articles/Pages/MetricoftheMonth SourceYield.aspx (accessed August 31, 2012). —. "Survey: New Hire Survey." http://www.shrm.org/TemplatesTool s/Samples/HRForms/Articles/Pages/ 1CMS_004328.aspx (accessed August 31, 2012).

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Bibliography

—. "Workforce Analytics: Strive for More Than Standard HR Reports." November 12, 2007. http://www.shrm.org/hrdisciplines/te chnology/Articles/Pages/CMS_0065 89.aspx (accessed August 31, 2012). —. "Workplace Flexibility Has Bottom Line Implications." May 13, 2008. http://www.shrm.org/Publications/H RNews/Pages/FlexibilityImprovesBo ttomLine.aspx (accessed August 31, 2012). Stredwick, John. An Introduction to Human Resource Management. Oxford, United Kingdom: ButterworthHeinemann, 2005. Touré, Hamadoun I. "Speech by ITU Secretary-General." International Telecommunications Union. January 26, 2011. http://www.itu.int/en/osg/speeches/P ages/2011-01-26.aspx (accessed August 31, 2012). University of California, Davis, Human Resources. "Preparing for Your New Employee's Arrival: Before the First Day." 2010. http://www.hr.ucdavis.edu/sdps/onbo arding-toolkit-supervisors-guide (accessed August 31, 2012). Woods, David. "Managing the Employer Brand Is Increasing in Importance." HRMagazine.co.uk. September 6, 2010. http://www.hrmagazine.co.uk/hro/ne ws/1018369/managing-employerbrand-increasing-importance (accessed August 31, 2012).

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Index

Index applicant notification ................................ 72

diversity and inclusion considerations 10–11

application forms ................................ 66–68

employee referrals ............................... 46, 47

aptitude test ............................................... 69

behavioral interviews .......................... 74–75

employee value proposition ................ 4, 6, 8 benefits .................................................... 8 categories ................................................. 8 challenges ................................................ 9 corporate use ........................................... 8

candidate pipeline ..................................... 43

employment branding ................................. 6

cognitive ability test .................................. 69

employment contracts ......................... 12, 85

competency-based interview ............... 74–76

employment offer ...................................... 84

contingent job offer ................................... 84

evaluating candidates ................................ 79 background investigations ..................... 79 interview feedback ................................ 79

background investigations ........................ 79

corporate learning council........................... 8 cost efficiency ......................................... 111 cost per hire ......................................... 107–9 credit history check ................................... 80 criminal background check ....................... 80 curriculum vitae (CV) ............................... 66 CV ................................ See curriculum vitae data ............ 3, 23–25, 55, 67, 23–25, 115–16 common data collection methods .......... 24 gathering job analysis data .................... 23 gathering staffing data ........................... 14

external recruitment .................................. 52 advantages and disadvantages ............... 53 external recruiting sources .................... 53 flexibility ......................................... 4, 44, 99 flexible staffing ......................................... 44 formal/informal feedback.........................See gap analysis ............................................... 15 headcount ............................ 41, 44, 110, 112 HRIS ......... See human resource information system

data marts and data warehouses .............. 116

human capital value added .............. 110, 114

demand analysis ........................................ 15

human resource information system (HRIS) ............................................................... 47

demotions .................................................. 49

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intercultural assessment tools ................... 71 internal movement .................................... 48 internal recruitment ............................. 45–47 advantages and disadvantages ............... 45 internal movement ................................. 48 methods of ............................................. 46 reasons for ............................................. 51 international assignments ........ 48, 50–52, 71

Index

employment contract ....................... 12, 85 employment offer .................................. 84 handling nonselected candidates ........... 86 offer negotiation .................................... 85 job postings ................................... 10, 46–47 job requisition ............................... 41–42, 72 job specifications .................... 22, 26, 30–32 examples ................................................ 30 guidelines for writing ............................ 32

Internet search ........................................... 80 knowledge, skills, abilities ............ 23, 29, 47 interviewing candidates ................ 59, 66, 73 behavioral interview .............................. 74 competency-based interview ................. 75 differences between prescreening and indepth interviews ................................. 73 feedback ................................................ 79 guidelines .............................................. 77 structured interview ............................... 76 job analysis.......................................... 21–26 collection methods................................. 24 definition ............................................... 21 outcomes of ........................................... 26 purpose of .............................................. 22 relevant information .............................. 23 job competencies ..................... 22, 26, 33–34 definition ............................................... 33 examples ................................................ 34 Identifying ............................................. 33 job databases ............................................. 56 job descriptions ............................. 22, 26–32 challenges .............................................. 28 considerations for a global environment 28 definition ............................................... 27 elements of ............................................ 28 job documentation ..................................... 27 job offer ............................................... 40, 84 contingent job offer ............................... 84

KSA.............. See knowledge, skills, abilities legal considerations in global staffing ...... 11 metrics ......................... 72, 99, 105, 110, 115 cost per hire ......................................... 107 days to fill ............................................ 111 headcount ............................................ 112 human capital value added .......... 110, 114 return on investment ............................ 113 source yield ......................................... 109 turnover rate ........................................ 114 vacancy rate ......................................... 114 yield ratios ........................................... 108 mobile marketing ...................................... 58 networking sites ........................................ 57 new employee onboarding ....See onboarding new employee orientation ..... See orientation nonselected candidates .............................. 86 observation method ................................... 24 offer negotiation ........................................ 85 onboarding .............................. 72, 89, 93–99 best practices ......................................... 95 definition ............................................... 93 delegating onboarding responsibilities .. 96 123

Module 2: Recruitment and Selection

Index

evaluating the effectiveness of .............. 98 purpose .................................................. 93 roles and responsibilities ....................... 94 sample new hire survey ......................... 99 sample onboarding program components ........................................................... 98

realistic job previews (RJP) ...................... 82 benefits .................................................. 83 purpose .................................................. 82 types ...................................................... 83

open-ended questionnaire ......................... 25

recruiting strategy ............................... 42, 47 candidate pipeline .................................. 43 checklist for recruiting effectiveness..... 43 flexible staffing options ......................... 44

orientation ......................... 50, 89, 90–93, 96 before the employee’s arrival ................ 89 definition ............................................... 90 new employee orientation checklist ...... 91 purpose .................................................. 90 supervisor orientation checklist ............. 92 people in business ....................................... 6 performance measures .............................. 99

recruiting costs ................................. 107, See

recruiting technology .......................... 56, 59 job databases ......................................... 56 mobile marketing................................... 58 networking sites..................................... 57 video conferencing ................................ 59

permanent reduction.................................... 6

recruitment definition ............................................... 40 starting the process ................................ 41

persistent shortage ....................................... 5

recruitment metrics ................................. 105

personality test .......................................... 70

recruitment sources ....................... 42, 45, 52 external recruitment............................... 52 internal recruitment sources .................. 45

pre-employment tests ................................ 69 prescreening candidates applicant notification ............................. 72 application forms ................................... 67 CVs and application forms .................... 66 definition ............................................... 66 other prescreening tools ........................ 70 pre-employment tests ............................ 69 qualifications and eligibility .................. 71 warning signs......................................... 68

reference check ....................... 10, 61, 66, 70

prescreening phone call............................. 70

retention threshold .................................... 99

primary source .......................................... 24

return on investment (ROI) ............. 106, 113

promotion ............................................ 45, 49

RJP ........................See realistic job previews

psychomotor test ....................................... 70

Roberts, Bill ............................................ 115

qualifications and eligibility ..................... 71

ROI......................... See return on investment

reliability ............................................. 69, 81 relocation............................................. 49, 86 resume ................................................. 67–68 retention rates ............................................ 99

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selecting candidates .................................. 81 realistic job previews ............................. 82 reliability and validity of selection tools and methods ....................................... 81 selection definition ............................................... 65 selection process ....................................... 65 overview ................................................ 65 step 1: prescreen .................................... 66 step 2: track ........................................... 72 step 3: interview .................................... 73 step 4: evaluate ...................................... 79 step 5: select .......................................... 81 step 6: offer............................................ 84 skills assessment tools............................... 47 SMART (smart, measurable, achievable, realistic, time-based) ............................. 16 solution analysis ........................................ 15 source yield ......................................... 67–68 staffing definition ................................................. 9 staffing approach ......................................... 9 diversity and inclusion considerations .. 10 legal considerations ............................... 11 trends ....................................................... 9

Index

staffing plan .................................... 3, 14–18 comment elements ................................. 16 designing ............................................... 16 gatheringdatafor .................................... 14 role of .................................................... 14 staffing strategy....................................... 4–6 structured interview .................................. 74 supply analysis .......................................... 15 temporary reduction .................................... 5 tracking applicants .................................... 72 transfer .................................... 28, 41, 45, 50 trends in staffing ......................................... 9 turnover rate .................................... 110, 114 vacancy rate .................................... 110, 114 validity ................................................ 69, 81 video conferencing .............................. 56, 59 welcome package ................................ 89, 90 workforce analytics ........................... 115–16

staffing data ............................................... 14

workforce planning .... 3, 6, 9, 15, 26, 31, 43, 105 benefits .................................................... 3 definition ................................................. 3

staffing metrics............................ See metrics

writing guidelines...................................... 32

staffing needs .................................... 3–5, 15 anticipating .............................................. 5 defining.................................................... 4

yield ratio ............................................ 105–6

125

Module 3: Employee Relations and Communications Module 3: Employee Relations and Communications .............................................................. iii Acknowledgements .................................................................................................................... vi Module 3 Body of Knowledge .................................................................................................. vii Purpose Statement ............................................................................................................................... vii Body of Knowledge ............................................................................................................................ vii

Section 3.1: Communication in the Workplace...........................................................................1 Introduction ..................................................................................................................................4 Communicating with Employees .................................................................................................5 Importance of Communication ............................................................................................................. 5 Developing Your HR Communication Skills ....................................................................................... 8 Know Your Audience ........................................................................................................................... 9

What Does HR Need to Communicate? .....................................................................................10 Communicating Benefits..................................................................................................................... 11 Communicating an Emergency Plan ................................................................................................... 12

Cross-Cultural Communication..................................................................................................15 Barriers to Effective Communication ................................................................................................. 16 Communication and Language across Cultures .................................................................................. 17 Cultural Styles of Communication ...................................................................................................... 19 Cross-Cultural Working Teams .......................................................................................................... 21

Methods of Communication .......................................................................................................22 Flow of Communication throughout the Organization ....................................................................... 22 Choosing a Communication Method .................................................................................................. 23

Communicating through Technology.........................................................................................26 Employee Feedback ...................................................................................................................31 Mechanisms for Collecting Employee Feedback ................................................................................ 31 Informing Employees during Difficult Times..................................................................................... 35

Section 3.2: Laws Affecting Employee and Labor Relations ...................................................38 Introduction ................................................................................................................................39 The Influence of Law on Employee Relations ...........................................................................40 Introduction to Employment Law ....................................................................................................... 40 Compensation and Benefits Laws ....................................................................................................... 42 Occupational Health and Safety Laws ................................................................................................ 44 Anti-Discrimination, Harassment and Fair Work Laws ..................................................................... 46 Intellectual Property Laws .................................................................................................................. 47 Employment Contracts........................................................................................................................ 49

Laws Affecting Global Workforce Organizations .....................................................................52 International Human Rights and Labor Standards .............................................................................. 53 Trade Agreements and Treaties .......................................................................................................... 55 Global Mobility ................................................................................................................................... 56 Unions Across Borders ....................................................................................................................... 61

Organizational Polices and Employee Relations .......................................................................62 Defining Policies and Procedures ....................................................................................................... 62 Writing Policies and Procedures ......................................................................................................... 64 Communicating Policies and Procedures ............................................................................................ 65

Section 3.3: Creating a Positive Work Environment ................................................................71 Introduction ................................................................................................................................72 Employee Engagement ...............................................................................................................72 Employee Engagement versus Job Satisfaction .................................................................................. 72 Levels of Employee Engagement ....................................................................................................... 73 Employee Engagement Drivers .......................................................................................................... 74 Engaging Employees across Cultures ................................................................................................. 74 Identifying Employee Engagement Barriers ....................................................................................... 75 Communication Strategies for Engaging Employees ......................................................................... 76

Positive Workplace Culture .......................................................................................................78 Early and Effective Onboarding Practices .......................................................................................... 79 Trusting Environment ......................................................................................................................... 79 Reward and Recognition Programs ..................................................................................................... 80 Work/Life Balance Programs .............................................................................................................. 86

International Assignee Support ........................................................................................................... 89 Creating a Friendly Workplace Environment ..................................................................................... 92

Section 3.4: Managing Employee Behavior Issues ....................................................................96 Introduction ................................................................................................................................97 Discipline Process ......................................................................................................................97 Performance Problems .............................................................................................................103 Investigate the Performance Issue..................................................................................................... 103 Conduct the Performance Meeting ................................................................................................... 104 Take Corrective Actions ................................................................................................................... 104 Document Results ............................................................................................................................. 104

Complaint Review, Investigation and Resolution ....................................................................107 Complaint Review ............................................................................................................................ 107 Investigating a Complaint ................................................................................................................. 107 Alternative Dispute Resolution Process and Procedures .................................................................. 110 Dealing with Workplace Violence .................................................................................................... 111 Escalating Issues ............................................................................................................................... 113

Managing Employee Conflicts .................................................................................................113 Interpersonal versus Task Conflicts .................................................................................................. 113 The Cultural Components of Conflict ............................................................................................... 116

Handling Employee Terminations............................................................................................117 Types of Terminations ...................................................................................................................... 117 HR Responsibilities with Termination Activities ............................................................................. 120 Exit Interviews .................................................................................................................................. 120

Bibliography ...............................................................................................................................122 Index ............................................................................................................................................126

Timo Michel, HRMP HR Business Partner, HR International Deutschland, Germany

Brad Boyson, MSHRM, SPHR, GPHR, HRMP Executive Director, SHRM MEA Dubai, United Arab Emirates

Rachel Park Program Manager, Global Talent Acquisition, Mastercard Worldwide Singapore, Singapore

Cigdem Ozdemir Evren, MBA, HRBP HR Generalist, FNSS Defense Systems Ankara, Turkey

Patchara Popaitoon Researcher/Teacher/Lecturer, School of Management University of Bath Claverton Down, Bath, United Kingdom

Module 3: Employee Relations and Communication

Module 3 Body of Knowledge For your convenience, the Body of Knowledge for Module 3: Employee Relations and Communication is provided on the following pages.

Purpose Statement Purpose Statement for Employee Relations and Communication: HR professionals in employee relations and communication should possess a combination of behaviors and skills/knowledge that include promoting HR policies and procedures and communicating with employees through individual approaches, such as exit interviews, and group approaches, such as a company web site or a rewards program.

Body of Knowledge Below are lists of the behaviors and skills and knowledge required for mastery of content related to Module 3: Employee Relations and Communication. Important behaviors for employee relations and communications: 01. Communicate information to the company about HR policies and procedures (for example, announcements about organizational changes such as structure, safety and security, or legal requirements) 02. Support company sponsored activities and awards to encourage a positive work environment (for example, employee appreciation and rewards, company social gatherings, sports teams or clubs) 03. Collect information about employees’ work experiences by conducting final exit interviews before employees leave the organization, and conduct surveys about employee attitudes, work conditions, or diversity issues

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04. Complete the assigned tasks when an employee leaves the organization due to voluntary or involuntary terminations 05. Respond to employee’s questions or concerns about workplace issues (for example, employment concerns, company HR policies, complaints, retirement questions, payments) 06. Enforce HR policies and procedures (for example, explain and make sure that employees comply with the employee handbook) 07. Maintain regular communication with employees (for example, through newsletters, or the company website)

Important knowledge and skills for employee relations and communication: 01. How to encourage and keep employees (employee engagement techniques) 02. Methods and processes for collecting employee feedback (for example, employee attitude surveys or final exit interviews before leaving the organization) 03. Effects of employment and labor law (for example, minimum wage, rules for terminating employees, establishing unions or work councils, people with disabilities and rules against discrimination) 04. How to handle conflicts (for example, addressing the problems of individual employees and knowing when to involve senior staff) 05. Issues affecting work-life balance (for example, flexibility of hours, telecommuting) 06. Issues of behavior in the workplace (for example, absences, discipline, workplace violence, or harassment) 07. Methods for investigating complaints or grievances

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08. Methods for increasing disciplinary action needed for work-related behavior, including procedures for ending employment 09. Event planning

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3.1: Communication in the Workplace This section covers the following information from the Body of Knowledge: Behaviors: 01. Communicate information to the company about HR policies and procedures (for example, announcements about organizational changes such as structure, safety and security, or legal requirements) 03. Collect information about employees’ work experiences by conducting final exit interviews before employees leave the organization, and conduct surveys about employee attitudes, work conditions, or diversity issues 05. Respond to employee’s questions or concerns about workplace issues (for example, employment concerns, company HR policies, complaints, retirement questions, payments) 07. Maintain regular communication with employees (for example, through newsletters, or the company website)

Skills & Knowledge: 02. Methods and processes for collecting employee feedback (for example, employee attitude surveys or final exit interviews before leaving the organization)

Section 3.1: Communication in the Workplace Introduction ....................................................................................................................................4 Communicating with Employees ..................................................................................................5 Importance of Communication.....................................................................................................5 Developing Your HR Communication Skills...............................................................................8 Know Your Audience...................................................................................................................9 What Does HR Need to Communicate? .....................................................................................10 Communicating Benefits ............................................................................................................11 Communicating an Emergency Plan ..........................................................................................12 Cross-Cultural Communication .................................................................................................15 Barriers to Effective Communication ........................................................................................16 Communication and Language across Cultures .........................................................................17 Cultural Styles of Communication .............................................................................................19 Cross-Cultural Working Teams .................................................................................................21 Methods of Communication ........................................................................................................22 Flow of Communication throughout the Organization ..............................................................22 Choosing a Communication Method..........................................................................................23 Communicating through Technology ........................................................................................26 Employee Feedback .....................................................................................................................31 Mechanisms for Collecting Employee Feedback .......................................................................31 Informing Employees during Difficult Times ............................................................................35

Module 3: Employee Relations and Communication

3.1: Communication in the Workplace

Introduction Imagine you’ve been charged with creating a human resources (HR) function within your organization. First, you want to be sure the human element of the organization is aligned with the overall business strategy. Next, you have the enormous task of planning for services, creating budgets, establishing infrastructures and identifying resources to support the needs of your workforce. Now imagine that all the planning is complete and that everyone within the HR function understands the processes, the great benefits offered, the employee programs being rolled out and how to respond to employee needs. You’re left wondering: how will employees know about these great offerings? What’s missing from your planning? A communication strategy is missing from your planning. In order for a successful HR function to service an organization’s constituents, there needs to be an effective way to communicate with employees and to collect ongoing feedback for continual improvement efforts. Communication does not start and stop within the HR function. There are numerous stakeholders and partners to involve, namely leadership. In this section you will explore the importance of an organization-wide communication strategy and how this strategy cascades down to the HR function. You will learn about what you may want to communicate to your constituents and also about methods for delivery and feedback. This section examines the following:



Communicating with employees



What HR needs to communicate



Cross-cultural communication concepts



Methods for communicating



Using technology for communications

Module 3: Employee Relations and Communication

3.1: Communication in the Workplace

Communicating with Employees Importance of Communication Employees want to be kept informed, but most companies do a poor job of communicating and keeping employees involved, especially over distances, across time zones and in different languages. Employees in most organizations continue to state that they are not aware of the company’s strategies, direction or key initiatives. Furthermore, people leaving the organization often cite a lack of communication and a feeling of being cut off from the company as primary reasons for their departure. Most human resource professionals and business leaders agree that a formalized communication strategy is essential to effective and consistent business operations. With a formal and comprehensive communication strategy, organizations can ensure the following: 

Consistent messages are delivered



Messages support a recognizable employment brand



Messages express the organization’s mission, vision and culture

HR is often responsible for managing the flow of critical information throughout the organization. Whether the purpose is merely to update employees on new policies, prepare for an emergency, share achievement or listen to employee concerns, HR is a principal function of an organization’s communication strategy. Benefits of Effective Communication Research shows that organizations that communicate effectively with their employees financially outperform those that do not. According to a study conducted by Watson Wyatt Worldwide (now Towers Watson), organizations that “communicate with courage, innovation and discipline, especially during times of economic challenge and change, are more effective at engaging employees and achieving desired business results” (Watson Wyatt 2009/2010).

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3.1: Communication in the Workplace

The study included 328 organizations worldwide that represented 5 million employees. Results found that those companies with highly effective communication strategies had 47% higher total returns to shareholders compared with companies with less effective communication strategies. In addition to financial advantages, communication strategies can create a culture where employees are more productive and loyal. Figure 1-1 lists some of these advantages, as well as the disadvantages of ineffective communication.

Effective Communication 

Builds employee morale



Helps employees understand expectations

Ineffective Communication 

Leads to damaged work relationships

of their employment



Decreases trust



Creates commitment and loyalty



Fosters anger and hostility



Allows employees to give feedback



Provides a basis for



Reduces potential grievances and misunderstandings



misunderstandings 

Reduces opportunities for success

Increases efficiencies and reduces costs Figure 1-1. Effective verses Ineffective Communication (Society for Human Resource Management, Managing Organizational Communication 2010)

Elements of an Organization-Wide Communication Strategy Organizational leadership should set the tone for organization-wide communication. This process involves creating a communication strategy. When organizations have a communication strategy in place, leaders can quickly convey messages and put action plans in place when the need arises. Those organizations with a disorganized approach to communicating often waste time deciding who should communicate and the methods for how to reach employees.

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3.1: Communication in the Workplace

An organization-wide communication strategy should be adaptable and include a top-down approach, a budget and processes for conveying messages and methods for feedback. These elements are described in Figure 1-2.

Figure 1-2. Elements of a Communication Strategy Constituencies

Everyone in the organization has a role in making a communication strategy work. Senior leaders are ultimately responsible for setting the tone and for establishing an organizational culture. Managers are responsible for carrying out daily communication with their employees and for relating to their peers and colleagues. Both leaders and managers should be coached on their role in ensuring effective organization-wide communication. Part of HR’s role may be to manage and provide communication training for leaders and managers. A strong training component will not only equip leaders to communicate effectively with their teams and colleagues but also help them understand the appropriate communication channels and protocols.

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3.1: Communication in the Workplace

In addition to training, HR may have other responsibilities when it comes to its role in communication. These may include the following: 

Responding to employee communication issues



Dealing with external communications such as media



Measuring and quantifying results of communication strategies

Employees also play a major role in a communication strategy and have a responsibility to voice concerns and issues, provide feedback and listen effectively (Society for Human Resource Management, Managing Organizational Communication 2010).

Developing Your HR Communication Skills With so much at stake in your ability to communicate effectively, it makes sense to put thought and effort into developing your communication skills. According to Elaine Varelas from Keystone Partners, there are five guiding principles you can use to help you become a more effective communicator: 

Address the difficult issues in an honest and concise manner. Problems can escalate if they are not addressed in a swift manner. While it may make you feel uncomfortable to discuss poor performance issues or questionable ethical actions, you are leaving your organization vulnerable if you do not have the difficult discussions.



Select the appropriate method to deliver the message. Carefully consider the method most appropriate to send a message. This includes using the correct messenger as well. For example, information about an acquisition is best delivered by a senior manager, not by a line manager.



Praise in public; reprimand in private. People appreciate recognition. Look for opportunities to provide encouragement for a job well done. The opposite is true when there is criticism to share. Behaviors need to be addressed; however, respect the dignity of the person whom you are

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3.1: Communication in the Workplace

reprimanding. Consider cultural preferences when praising in public and also when sharing criticism. 

Be honest. To be honest you need to be able to determine the truth and to convey it accurately. Wanting to be honest doesn’t make you honest. Honesty requires conscious practice.



Communicate on a regular basis. Communication should be part of a routine. When it is part of your work cycle, communication is easier to manage and less daunting. (Varelas 2008)

Know Your Audience In any communication strategy, identifying audience issues is a key task in ensuring effectiveness. In the example of an organization downsizing, there could be many audience types each requiring a different message and delivery method. The following list provides five possible examples of audience types for downsizing in an organization: 

Audience 1: Employees who will lose their job



Audience 2: Employees who will tell other employees that they will lose their jobs



Audience 3: Employees whose work requirements may increase because of downsizing



Audience 4: Employees not impacted



Audience 5: Managers who have groups impacted or not impacted by downsizing

You should also consider the size of your audiences, which may guide the methods you use. For example, if it is anticipated that a given audience will have many questions regarding downsizing and the personal implications, keeping meeting sizes small may be preferred so that questions can be adequately addressed.

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3.1: Communication in the Workplace

Diverse Audiences Organizations may have multiunit operations, with worksites across cities and even across countries. The more geographically dispersed and interdependent these groups are, the greater the challenges are for creating a cohesive communication strategy. Audiences may have differing perceptions and expectations when giving or receiving information due to age, disability, ethnicity, gender and race. These differences should be evaluated when developing messages for a broad audience.

What Does HR Need to Communicate? Communication starts with a message, and for HR functions there are often many messages to deliver to constituencies and therefore many opportunities to seek feedback. The more complex the organization, the greater the need for HR to manage the flow of communication, so it is inclusive, timely and effective. Review the topics outlined in Figure 1-3, and for those topics relevant to your organization, ask yourself: what understanding is necessary for my audience, and what do I want my audience to do with this information? HR Topics Benefits

Holiday calendar

Emergency plan

Organization’s goals and

Employee surveys

New employee orientation

mission Figure 1-3. HR Topics for Communication (continued to next page)

Module 3: Employee Relations and Communication

3.1: Communication in the Workplace

HR Topics Organization’s values

Rewards system

Employee news

Organizational policies

Employee handbooks

Community involvement & social responsibility

Organizational initiatives

Safety and security

Employee programs

Figure 1-3. HR Topics for Communication (concluded) Let’s explore in more detail two of the topics listed in Figure 1-3, benefits and emergency plan.

Communicating Benefits Even if a company offers an outstanding benefits package, it won’t achieve a return on investment if the employees fail to understand what is offered and how the benefits can support their lives and the lives of their families. Employees should be considered consumers of benefits, and communications should reflect this perspective so that employees feel empowered to make decisions that suit their needs. There are a variety of ways HR can communicate benefits information to employees. Examples include employee handbooks, organizational websites and employment contracts. HR must be careful to communicate consistently and accurately across channels and also remember to update the information as it changes. One-on-One Communication Sending brochures or attending a seminar may not be enough for your employees. You can’t assume employees will read through a folder of materials and have a full understanding of how the benefits will support their lifestyles. One-on-one

Module 3: Employee Relations and Communication

3.1: Communication in the Workplace

communication is the best way for employees to identify the choices that best meet their individual needs and to plan for how they will use the benefits. Compare an employee who has a family of four and is preparing to retire in eight years with an employee who just started his or her first job. Their needs are likely to be very different. It is important to look at your employee base from a demographic basis and to determine how to best communicate information that is relevant to them. Communicating Financial Information HR professionals must be careful about how they position financial planning such as retirement benefits. Avoiding the appearance of a fiduciary relationship is critical, as there could be legal implications. Communicate the basic offerings, answer questions and then use third-party providers that are qualified to assist employees. Education Conducted by Third-Party Providers In many cases, suppliers of benefits such as health care and financial planning offer education programs for employees. There are advantages to these educational programs as outlined below: 

Savings on expenses



Educating employees on options



Educating employees on processes and tools

When employees understand how benefits can help secure their futures, they are more likely to participate in the plans and to recognize the value of working at the organization (Society for Human Resource Management, Benefits Choices: Educating the Consumer 2011).

Communicating an Emergency Plan In an emergency, the ability to communicate with your employees can be disrupted. You may not have the ability to communicate through e-mail, or

Module 3: Employee Relations and Communication

3.1: Communication in the Workplace

perhaps your phone and fax capabilities are out of service. These difficulties can occur at a time when communication with your employees is most critical. When considering your emergency preparedness and response plan, explore your current communication tools and establish primary and secondary ways to reach employees. If the phone system is out of service, could you use e-mail or post information to your Intranet site? Make a list of the ways you can stay connected, and be sure employees know what the alternatives are in an emergency. The goal of your communication plan is to keep people informed and working together to move forward. This can be an additional challenge for employees working from a remote location who may not understand what is happening at another worksite. The following identify considerations for creating an emergency communications plan: 

Identify who your constituents are in an emergency. Include clients if necessary.



Identify the kinds of information and resources your constituents need in an emergency.



Assess how you would react to restricted access to your workplace.



Talk with other organizations in your industry or geographic area, and analyze their response plans.



Identify information that constituents would need in an emergency.

It may be helpful to run a focus group with leaders, safety and security personnel, managers and employees to discuss alternative communication channels and key information to disseminate to employees in a time of crisis.

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3.1: Communication in the Workplace

Leveraging Technology to Communicate During an Emergency The Internet

The Internet is a reliable way to stay connected with employees across your organization during an emergency. Because you’re not dependent on a single location, provider or server, the Internet offers channels and forums to gather and collaborate. Even if you cannot get to your office, you may still be able to connect from home, at a local school or at a library. Internet-based communication tools such as e-mail, instant messaging, online collaboration sites and social networking should all be considered as alternative ways to connect with employees. If one communication system goes down, you should have sufficient backup to continue with business operations. Be sure to coordinate these initiatives with your technology department. Your Internet or Intranet site can offer a powerful means of communication. The key is to get employees in the habit of going to your web location on a regular basis. If your site is seldom updated and not maintained, employees are less likely to access this communication forum during an emergency. Telephone Notification Chain

If your telephone service is still working, activate a telephone notification chain, and forward instructions to employees on your team. Make sure that employee names and phone numbers, including cell numbers, are stored and secured and can be accessed by appropriate personnel during the emergency. Hotlines

A hotline, also referred to as an automatic signaling service, is a communication link in which a phone call is directed to a prerecorded message. Hotlines are another way to disseminate information, but employees must know the hotline number. If employees don’t know the hotline number, they should know to check the Internet, voice mail, instant messaging, e-mail, TV, radio, print or company call centers for hotline numbers.

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3.1: Communication in the Workplace

Text Messages

Many cell phones today also work with e-mail to support text messaging. This beeper-like service may still function when normal phone and pager systems are down. Create a group list in your e-mail program with the cell phone numbers in the format needed to send them as text messages. This way, you can quickly communicate with all your employees by sending just a single e-mail message (Society for Human Resource Management 2007). For more information on ways to communicate HR topics, please see Managing Organizational Communication at the following website: http://www.shrmindia.org/managing-organizational-communication.

Cross-Cultural Communication When communication occurs between people of two or more cultures, it is termed cross-cultural communication. While effective cross-cultural communication is possible, it cannot be approached in the same manner as domestic communication or communication between individuals who share the same culture. There are numerous renowned models describing the communication process. Exploring these models may help mitigate the challenges that can arise when communicating across cultures. Common to most of these models are the elements illustrated in Figure 1-4.

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Figure 1-4. Model of Two-Way Communication Problems arise when what the communicator says differs from what the receiver hears. Because the sender is translating thoughts into words and the receiver is translating words into thoughts, many opportunities for misinterpretation exist.

Barriers to Effective Communication Information doesn’t always flow intact from communicator to receiver. Barriers can influence how information is received and interpreted. Figure 1-5 lists several barriers to effective communication.

Barrier

Description

Frame of

Different individuals can interpret the same communication

reference

differently, depending on previous experiences.

Selective

Individuals tend to block out new information, especially if it

listening

conflicts with existing beliefs.

Figure 1-5. Barriers to Effective Communication (continue to next page)

Module 3: Employee Relations and Communication

Barrier

3.1: Communication in the Workplace

Description

Value

Individuals assign an overall worth to a message prior to

judgments

receiving the entire message.

Source

Individuals weigh the actions and words of the communicator

credibility

based on the amount of confidence they have in that person.

Language

The same word may mean entirely different things to different people. Information is manipulated so that the receiver perceives it as

Filtering

positive. Cultural

Different perspectives may lead to misperception and

differences

miscommunication.

Communication

Different forms of communication are preferred because of

preferences

differences in interest, education, occupation, ability and culture.

Figure 1-5. Barriers to Effective Communication (concluded)

Communication and Language across Cultures Language represents our primary vehicle for expressing thoughts and ideas, and it can both restrict and expand communication. In some languages, for example, there is no word for the color gray, which other languages associate with the color between black and white. In these cultures, gray is either not perceived to exist or is expressed differently. Similarly, other languages contain different words to describe the love between siblings, between friends and between married partners. Colors often have interesting uses and meanings across cultures. In China, red is a very positive color; it connotes happiness, warmth and good things. In Hong Kong, red envelopes are used to disperse lucky money during the celebration of

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3.1: Communication in the Workplace

the New Year. In Chile, yellow roses are associated with contempt. Sending a gift of yellow roses communicates that the sender does not like the recipient. Time and personal space also have a role in communicating across cultures. For example, in some countries like China and Japan, punctuality is considered important and being late would be considered an insult. However, in countries such as those in South America and the Middle East, being on time does not carry the same sense of urgency. The concept of personal space also varies from country to country. In certain countries, it is considered respectful to maintain a distance while interacting. However, in other countries, personal space is not as important. Sounds represent another culturally sensitive area that may often be overlooked during communication and negotiation. An acronym that is commonly used or accepted in one country may, when spoken, produce a sound that is inappropriate or offensive in a different language. These examples of the cultural connotations of colors, numbers, time, space and sounds have broad implications, not just for interpersonal and face-to-face communication but also for organization-wide communication and human resource development programs. HR professionals have an obligation to help their organizations avoid pitfalls when choosing themes, objects, colors, numbers, acronyms, process nicknames and other aspects of organizational effectiveness programs. Here are several pitfalls to be aware of and to avoid when communicating: 

Colloquialisms, buzzwords, acronyms and idioms



Local expressions that do not translate cross-culturally



Multiple meanings of words



Biases

In addition, HR should be aware of naming conventions across cultures such as differences in surname, family name, given name and preferred name.

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Cultural Styles of Communication Culture influences more than just the words and phrases used for communication. With respect to cross-cultural communication, the context of the communication is as important as, and sometimes more important than, the content. In The Silent Language (1990), Edward T. Hall explores cultural factors as they relate to communication. In particular, he distinguishes between high- and lowcontext cultural factors. Expectations for individuals functioning within each context are described in Figure 1-6.

Figure 1-6. Cultural Context (Hall, The Silent Language 1990) Low-Context Style of Communication In a low-context culture, very little is taken for granted. As a result, more explanation may be needed. While this means more explanation is required, it also means there is less chance of misunderstanding.

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When communicating with people accustomed to low context, consider the following and adapt your communication style as necessary: 

The focus is on the specifics of what is said or written.



A handshake is insufficient; contracts are important.



People look for content, not what surrounds the content.



Information is held very closely and shared on a need-to-know basis.



Body language may not be acknowledged as having a significant impact on the content of the message.



Clarity of communication in words is paramount, and open dialogue with probing questions is acceptable.



Sometimes openly challenging someone you disagree with is admired. (Hall, Beyond Culture 1976)

Countries with low-context cultures include Germany, Sweden, Denmark, North American countries and the United Kingdom. High Context Style of Communication In a high-context culture, there are many contextual elements that help people understand the rules. As a result, much is taken for granted. This communication style may be very confusing for a person who does not understand the unwritten rules of the culture. When communicating with employees accustomed to high context, consider the following and adapt your communication style as necessary: 

What is unsaid but understood carries more weight than what is verbalized or written.



Personal relations add to business.



It isn’t only what people talk about that’s important, but also the tone of voice, where the conversation takes place and so forth.



People share more information and expect to have a constant flow of input.



People tend to be indirect. Listeners are expected to interpret statements and questions.

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

There are many nonverbal nuances, including gestures and voice quality.



Speaking eloquently but indirectly is valued. (Hall, Beyond Culture 1976)

Cross-cultural communication will always involve more than just the words and language being used. Differing preferences for high context or low context have a significant impact on understanding and comprehension, trust, negotiations and many other aspects of interpersonal relationships. Countries with high-context cultures include China, Japan, Arab countries, Spain and Greece. Most Latin American countries also have high-context cultures. An example of a high-context Latin American country is Brazil.

Cross-Cultural Working Teams Getting work done in teams requires a free flow of accurate information and open, productive relationships with employees. But that’s easier said than done in a diverse workplace where many cultures collide. Teams are considered homogeneous if they share the same cultural background and heterogeneous if the members come from different cultural backgrounds. Heterogeneous teams are often virtual teams. Because team members may not share the same values, beliefs, attitudes and approaches to decision making, they face additional challenges and may require different types of support than homogeneous teams, especially during the start-up phase. Challenges faced by heterogeneous teams may include the following: 

Geographic distances: To be successful and to overcome the challenges of distance, virtual teams must make maximum use of technological tools.



Time differences: Virtual teams may struggle to find the most effective method of managing time. They can choose to work in real time or work at any time from a shared archive. Depending on the nature of their task,

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teams may find it most effective to use a combination of the two approaches. 

Language differences: When team members must use a second or third language to participate, their ability to contribute may be compromised. Such teams may benefit from applying the suggestions for high- and low-context styles discussed earlier.

Methods of Communication Part of developing and executing communication plans is to select the best methods for delivering any given message to and from employees. With so many choices, such as face-to-face meetings, electronic media, print and social media, the decision becomes quite complex.

Flow of Communication throughout the Organization When considering how to convey your message, be sure the content of the message is appropriate for the delivery method. For example, critical announcements from leadership that impact the entire organization should take a top-down approach. For other messages, the following communication methods may be appropriate: 

Top down: Information flows from higher to lower levels in an organization.



Bottom up: Information flows from lower to higher levels in an organization.



Horizontal: Information flows among peers, within a team or group, or across functions in an organization.



Network: Information flows along a predetermined set of links through an organization (for example, e-mail routed on a network).



Informal: Informal communication channels (actually, ad hoc networks) provide assorted facts, opinions, suspicions and rumors—information that normally does not travel through the organization’s formal channels.

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Choosing a Communication Method When selecting the best communication vehicle, organizational leaders will want to consider three key variables: 

Timing. The timing of the information may be important in cases such as selling a business unit or finalizing a major acquisition.



Location. Employees’ location will affect the method of communication. Ask: are all employees in one building, at multiple sites or working remotely?



Message. Another issue that affects the decision is the sensitivity of the information. For downsizing information, most professionals agree that face-to-face meetings are the best means of communication, but location and the number of employees involved may be determining factors for other alternatives. (Society for Human Resource Management, Managing Organizational Communication 2010)

Employee Handbooks The employee handbook is typically used to communicate the organization’s mission, values and goals as well as standard operating procedures, guidelines and policies. The handbook helps establish an organizational culture and employment brand. Traditionally, employee handbooks have been in print format; however, more organizations are publishing handbooks in an online format, allowing for quick updates and easy accessibility. We will further explore the details included in Employee Handbooks in Section 3.2: Laws Affecting Employee and Labor Relations.

Newsletters More often today, HR functions are reaching employees through online newsletters that can be published on a regular basis such as weekly or monthly or

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whenever there is news to share. Newsletters are used to communicate new information about the company, its employees and new products and services. Newsletters also help build unity among employees in the following ways: 

Newsletters provide employees at all levels with the same news delivered at the same time. From an employee’s perspective, knowing you are receiving the same news as leadership encourages a sense of community.



Newsletters allow employees to feel connected on a personal level by hearing about recent marriages, new births, graduations and achievements.

Organization-Wide Meetings Organization-wide meetings are a good option when it is important to gather employees together to share news, to celebrate successes or to communicate information that affects all employees. These meetings generally are most effective when employees are physically located in one geographic area where employees can attend together. Alternatively, these kinds of meetings can be held electronically via webinars or teleconferences. At his company’s quarterly meeting, Adam Rizika enjoys seeing his CEO, Dick Harrison, in action. “He likes people to come out with difficult questions, and he likes responding to them ad lib,” says the director of marketing, Asia-Pacific, for Parametric Technology Corp. “He can also talk in incredible detail about what our competitors are doing and how we are approaching them. When you hear him talking, you say, ‘Hey, we are on top of this’” (Woodward 2006). Telephone The telephone is a traditional method of communication and is best used for simple exchanges of information once relationships are established. Combined with online tools such as conference calling and virtual meetings, the telephone is still a powerful method of communication.

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Informal Communication One of the most used and undermanaged tools for employee communication is informal discussion. Informal meetings, phone calls and online discussions are an easy and inexpensive way for employees to get the latest news unfiltered by management, and they continue to be a source for employees learning about the current happenings across the organization. Organizations should be mindful that informal communication can lead to gossip, which in turn can impact productivity. Having a consistent and strong system of communication from leadership is often the best way to manage gossip and to inform employees of the facts. In-Person Meetings Meeting in person with employees is the preferred method for relaying sensitive or confidential information. In-person meetings are ideal to communicate compensation and benefits issues. Either HR or line managers should take the time to meet with individual employees in a comfortable, confidential setting to discuss sensitive topics such as those listed below: 

Job grade changes



Raises



Individual benefits issues



New policies or procedures that directly affect that employee



Policy infractions

While in-person meetings may be based on a written document, the affected employee should feel free to ask questions and should leave the meeting having had all questions answered and understanding the compensation or benefits issue discussed.

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Good employee communication helps increase employees’ awareness that their employer is attempting to create internal equity, ensure competitiveness and reward individual performance.

Communicating through Technology Today the face of HR is often a website, rather than a person. Almost all firms now provide universal access to HR services through technology-based applications, dramatically changing the practice of communication for human resource professionals. Those organizations that combine effective HR communication processes with effective HR technology are likely to be more productive and more profitable than those that do not. In the following sections, we will explore technology tools HR can use to communicate with employees. Human Resource Information Systems (HRIS) Many organizations are moving toward portals such as human resource information systems (HRIS) to deliver HR services and to communicate with employees. These portals often provide access to third-party providers and act as a centralized location for communicating information. The following information is often found on HRIS portals:



Employee handbooks



Benefits information



Company newsletters



Training and development resources



Emergency planning



General business updates



Standard operating procedures



Recruitment and selection resources



Compensation information

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Self-service applications are often part of an organization’s HRIS and continue to evolve in sophistication and use. More often, organizations are paying employees electronically and posting pay statements and benefits summaries online. Paper statements of direct deposits and benefits will decrease as the number of employees participating increases. Virtual Team Meetings Increases in travel expenses, technological improvements and the proliferation of virtual teams have caused organizations to rely more heavily on remote and virtual communication. All nonverbal aspects of the communication are lost when employees are engaged in virtual or audio-only communication. In these situations, it becomes especially important to attend to and manage verbal aspects of the communication such as pace, tone of voice, accent and word selection. Virtual meetings can combine a variety of tools, so you can hear coworkers, see coworkers and also see the information being discussed. The concept of virtual meetings is illustrated in Figure 1-7.

Figure 1-7. Virtual Team Meetings

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According to Karen Cvitkovich, managing director, global talent development for Aperian Global, it is crucial to establish protocol for virtual meetings. Protocol may include the following rules: 

Speak slowly.



Don’t interrupt.



Listen to understand.



Speak as though remote participants are in the room.



Don’t use a computer or text messages during meetings.



Don’t wear pajamas to meetings. (Society for Human Resource Management, Set Ground Rules for Virtual Team Communications 2008)

Depending on the situation and the applications you have available within your organization, you can combine a variety of tools to suit the virtual situation. Some useful technological applications and their potential value in supporting virtual teams are described in Figure 1-8.

Situation Meetings

Application Web meetings, video teleconferencing and teleconferences

Daily

Telephone, voice mail, chat and discussion

communications

forums, e-mail, instant messaging, Voiceover-Internet Protocol (VoIP)

Collaborative

Word-processing programs, groupware

writing Figure 1-8. Tools for Virtual Teams (continued on next page)

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Situation Project platforms

3.1: Communication in the Workplace

Application Portals, project sites, dedicated Intranet pages for posting project information, deliverables and resources

Project

Integrated suites of tools for shared work

productivity suite

products, project schedules, version and quality control, surveys and polling

Team building

Simulations and activities designed for team building and enhanced project communications, social networking software

Figure 1-8. Tools for Virtual Teams (concluded) Social Media Social media is now a common term, and many individuals use social media sites not only for personal use but also for business communication tools. Listed below are examples of popular social media sites across the globe: 

Facebook: Popular worldwide



Twitter: Popular worldwide



Hyves: Popular in the Netherlands



renren: Popular in China



Orkut: Popular in Brazil

For HR, social media provides a number of advantages:



Assists in recruiting top talent



Promotes branding to internal and external constituents



Links employees to customer contact



Connects employees to coworkers, managers, and leaders

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Some organizations are adopting social networking tools internally for knowledge capture and sharing, informal learning, collaboration, communication and engagement. An Aberdeen Group study of more than 500 organizations, released in June 2009 and titled HR Executive’s Guide to Web 2.0, notes that many organizations have workforces spread out among various locations and workgroups that often include vendors and customers. The study concludes: “Business executives (HR and nonHR) are realizing that these new realities require a rethinking of the talent management lifecycle, and of the new tools they can use to manage this diverse and dispersed workforce” (Society for Human Resource Management, Developing a Social Business Network 2010). The study reported on Manheim Auctions Inc., a company with 30,000 employees that remarkets vehicles for auto dealers, manufacturers, rental car operators and others. Manheim’s 200-person HR team is dispersed and includes staff in Australia. Lilicia Bailey, senior vice president and chief people officer, shared two examples where Manheim uses online technology: 

The HR team uses an online community to share ideas and to develop a dialogue on common issues. For instance, they’re revising the employee handbook through instant collaboration.



A group of assistant general managers at all offices are using the community function to discuss ways to transform the business in the future. These managers tend to be younger and comfortable using these tools.

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Employee Feedback

Figure 1-9. Dale Carnegie Quote Two-way communication plays an essential role in a comprehensive HR strategy. Listening to employee issues and concerns contributes to a loyal and productive workforce. Through listening, HR can learn about employee relations issues and attitudes toward terms and conditions of employment.

Mechanisms for Collecting Employee Feedback Organizations should have a formal process to gain direct, nonhierarchical information about employees’ views of organizational effectiveness as well as about specific policies and practices. Most organizations develop feedback mechanisms to provide a reality check on management’s beliefs about the perceptions of employees. Organizations have a variety of feedback and communication mechanisms they can use, but for these mechanisms to be effective, they must be backed with commitment by leadership. In the following sections, we will explore several examples of feedback mechanisms. Surveys Surveys ask employees to provide opinions on fair treatment, recognition and appreciation, quality of supervision, working conditions, job demands, job

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security, adequacy of communication and satisfaction with compensation, benefits and other conditions of employment. Many organizations use norms from other organizations to benchmark the results from these surveys and then to focus on internal continuous improvement from survey to survey. Employee Suggestion Systems Employees often know better than management how waste can be eliminated, how hazards can be avoided or how improvements can be made. Suggestion systems offer individual employees the opportunity to provide management with ideas for improving the workplace or any of its processes. To help ensure success, a suggestion system should be publicized, and suggestions should be collected and evaluated regularly. A suggestion system should have established rules and provisions for judging the merits of the suggestions submitted. Employee Focus Groups A focus group is a small group (normally six to twelve people) invited to actively participate in a structured discussion with a facilitator. Focus groups typically last from one to three hours, depending on the topic and purpose. Focus groups serve a variety of purposes for HR. They are often used as a followup to a survey. They can provide an in-depth look at specific issues raised during a survey. In this respect, focus groups collect qualitative data that enriches quantitative survey results. However, focus groups may also be used independently of any survey to learn how employees feel about a specific program or issue. Lunch with Management Some organizations host periodic lunch events in which employees are invited to have a lunch with management. This type of feedback method can be intimidating

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and should be voluntary. There are a few simple ways to increase engagement and ensure the dialogue is meaningful: 1. Keep the lunch casual to increase the comfort level of participants. 2. Establish a seating arrangement to encourage dialogue. 3. Provide participants with a few business-focused questions they should come prepared to discuss during the meal. 4. Ask participants what they thought about the event afterward in order to make improvements to future events. (Society for Human Resource Management, Expert: Workplaces Need Continuing Dialogue 2011) Management Visits Management visits are regularly scheduled visits at certain locations within the organization. A designated employee should act as a guide during the visit, introducing team members and pointing out key projects. Management should ask questions about project work and encourage employees to share their accomplishments and challenges. Management should record their findings and communicate back to the team on any action steps required. Accessible Leadership Leaders will receive more feedback from employees if they keep their doors open, frequent the hallways and engage in informal conversations with employees. Leaders should provide multiple channels for open dialogue such as online tools, in-person meetings, phone calls or even a written note. Most employees don’t want to ask questions or pass along new ideas to a stranger (Society for Human Resource Management, Expert: Workplaces Need Continuing Dialogue 2011). Exit Interviews An exit interview is typically conducted when an employee is terminating employment with the organization. Exit interviews can also be conducted when an employee transfers internally.

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Exit interviews provide an opportunity to gain honest information on employment conditions within the organization. Employees can offer objective feedback on the conditions or patterns of management behavior that may have contributed to an employee's decision to leave. Interviews are often conducted by an HR professional. Questions should focus on the business needs of the organization. Sample questions may include: 

How were you recruited?



Was the job presented correctly and honestly?



What was your supervisor’s management style like?



What did you like and dislike about the organization?



Why did you decide to leave, and how was the departure handled?

There are several alternative ways to conduct exit interviews. Alternative approaches are listed below. Outsourcing: Some organizations outsource the exit interview process to professionals who can conduct online or telephone interviews anonymously, if desired, and present organization-wide data using meaningful metrics. Online Surveys: There are a number of different websites and software programs that provide online surveys to resigning employees. For example, after HR enters information into the system regarding a resigning employee, an e-mail is generated asking the resigning employee to participate in an online survey. Data is anonymously generated along with reporting options and metrics. According to David Darling, vice president of HR for Teavana, an organization with locations in Mexico and the United States, automating and outsourcing exit interviews can be especially useful for companies with spread-out employees and small HR departments. Darling shares data with managers and uses the information for training opportunities (Society for Human Resource Management 2006).

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Informing Employees during Difficult Times When employers are considering downsizing, pay reduction or other tough decisions, a communication strategy is the most integral piece to change management. The best way to lessen the blow to morale and productivity is to communicate early, frequently and honestly. Announcing all the bad news upfront is usually advised. Although this is a difficult undertaking, it allows everyone to adjust more quickly and prepare for the next steps. Employees need to feel that management is being open and honest with them, and the best way to do that is to state the facts in a sensitive manner (Society for Human Resource Management, Isn’t How You Communicate to Staff Just as Important as the Information You Want to Share? 2010). During tough times, trust is crucial. To build trust, employees need to believe that the organization is forthcoming with factual information. When employees don't trust the organization they work for, productivity can be lost. The following outlines three ways in which organizations can suffer when there is mistrust: 

Employees may leave the company. Losing valuable employees can make it even harder for a company to get through tough times.



Employees may become complacent and unproductive, adding a level of risk to the organization.



Employees may begin to become angry and hostile. This discontent can quickly spread throughout the organization.

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In late 2008, Watson Wyatt Worldwide surveyed senior communicators in companies across a broad range of industries to learn how they communicated with employees during the financial crisis. Survey findings show: “…employers are increasing communication about organizational performance and solvency, as well as pay and benefits. Using a variety of traditional communication channels, as well as social media, senior leaders are hoping to allay employees’ fears and increase trust levels. However, in many cases frontline managers are not reinforcing and interpreting these messages for specific work groups. Nevertheless, most employers who are measuring communication effectiveness feel that taking the initiative to communicate during these challenging times is improving employee engagement and productivity” (Watson Wyatt 2008).

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3.2: Laws Affecting Employee and Labor Relations This section covers the following information from the Body of Knowledge: Behaviors: 05. Respond to employee’s questions or concerns about workplace issues (for example, employment concerns, company HR policies, complaints, retirement questions, payments) 06. Enforce HR policies and procedures (for example, explain and make sure that employees comply with the employee handbook) Skills & Knowledge: 03. Effects of employment and labor law (for example, minimum wage, rules for terminating employees, establishing unions or work councils, people with disabilities and rules against discrimination) 06. Issues of behavior in the workplace (for example, absences, discipline, workplace violence, or harassment)

Section 3.2: Laws Affecting Employee and Labor Relations Introduction ..................................................................................................................................39 The Influence of Law on Employee Relations ...........................................................................40 Introduction to Employment Law ..............................................................................................40 Compensation and Benefits Laws ..............................................................................................42 Occupational Health and Safety Laws .......................................................................................44 Anti-Discrimination, Harassment and Fair Work Laws .............................................................46 Intellectual Property Laws .........................................................................................................47 Employment Contracts ...............................................................................................................49 Laws Affecting Global Workforce Organizations ....................................................................52 International Human Rights and Labor Standards .....................................................................53 Trade Agreements and Treaties ..................................................................................................55 Global Mobility ..........................................................................................................................56 Unions Across Borders ...............................................................................................................61 Organizational Polices and Employee Relations .......................................................................62 Defining Policies and Procedures...............................................................................................62 Writing Policies and Procedures ................................................................................................64 Communicating Policies and Procedures ...................................................................................65

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Section 3.2: Laws Affecting Employee and Labor Relations

Introduction Failure to implement fair and legal employment practices may damage an organization’s reputation. This is a particular risk for high-profile organizations. For example, human rights and labor organizations have widely criticized organizations on issues such as their diversity policies and substandard working conditions in their global supply chain. In addition to ethical motives, there are a variety of legal and practical reasons for why organizations remain ethical, including the following: 

Comply with local, national and global laws and standards



Comply with corporate social responsibility (CSR) standards



Provide fair and decent working conditions for employees



Limit legal liability for business risks



Respond to labor issues in a consistent and swift manner

For HR professionals, the law often guides your daily activities and how you respond to issues that arise. Whether you’re talking through terms of a contract, helping someone prepare for maternity leave or responding to a domestic violence incident, laws can help guide your actions. For purposes of this discussion, we will define laws in general terms and discuss how these laws may impact employee relations. It is important for you to assess your own geographic location, related labor laws and how these laws apply to your organization’s unique circumstances. This section examines the following:



The influence of laws on employee relations



The laws affecting global workforce organizations



Organizational policies and employee relations

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Section 3.2: Laws Affecting Employee and Labor Relations

Section 1.5: The Influence of Law on the Organization contains a self-directed activity that provides a framework for determining your organization’s legal environment. If you have completed this activity, consult your completed worksheets as you determine what laws and regulations apply for workplace conditions and employment practices. Use this opportunity to refine your responses by adding laws and regulations that apply to your organization. In addition, Section 1.5 provides details on the major world legal systems and levels of law. You may want to review this information for this discussion.

The Influence of Law on Employee Relations Introduction to Employment Law Employment law is defined as the body of laws, rulings and precedents that address the legal rights of and restrictions for employees and their organizations. Employment law may be organized into two subcategories: 

Collective labor law: Relates to the relationship between employee, employer and union if necessary.



Individual labor law: Concerns employees' rights at work and through the contract for work.

As an HR professional, you will need to understand the laws that regulate the relationships with your employees. Some of the more common employee relations topics that may have legal implications are listed below:



General employment law



Employment agreements



Contracts



Wages (including minimum wages)



Working time

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

Sick leave



Vacation leave



Maternity leave



Noncompetition clauses



Individual dismissals



Collective agreements



Unions



Work counsels



International Labour Organization (ILO)

When determining the scope of the laws significant to your organization, you must consider the places where your organization has presence, along with any other jurisdictional implications. Exploratory questions to ask when determining which employment laws apply include those listed in Figure 2-1.

Figure 2-1. Exploring Employment Laws

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Section 3.2: Laws Affecting Employee and Labor Relations

Knowing the law and applying the law are equally important. For example, when thinking about legal considerations for employee work time, you first need to understand how the law defines a standard workweek and any restrictions on overtime and regulations for wages. In addition, you need to know what the repercussions are for violations, how to manage reporting and the processes you’ll use for compensation. While this is just one example, you can see the various ways in which the law can influence many facets of HR operations. In the following sections, we will explore categories of employment laws and define key terms. These topics are categorized as follows: 

Compensation and benefits laws



Occupational health and safety laws



Anti-discrimination, harassment and fair work laws



Intellectual property laws



Employment contracts

As we explore each category of employment law, please remember that the explanations provide guidelines to help you understand potential implications on employee relations. These explanations may not be applicable to all countries, and you should consult with legal professionals to determine if and how these laws apply to your organization.

Compensation and Benefits Laws Compensation and benefits laws provide conditions for how the organization will pay and offer benefits to employees. These laws vary greatly from country to country. Examples of laws that fall under this category include the following:



Minimum wage requirements



Application of overtime pay rates



Protection from wage discrimination



Regulations with respect to how wages are taxed

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Section 3.2: Laws Affecting Employee and Labor Relations

The locations where your organization has a presence continue to apply when evaluating compensation and benefits programs. Carefully consider the locations of production facilities, and determine if there are territorial jurisdiction considerations. Exploratory questions to ask when determining what laws apply for compensation and benefit programs include those listed in Figure 2-2.

Figure 2-2. Exploring Compensation and Benefits Laws HR’s Role Supporting Compensation and Benefits Laws As an HR professional, you should be thoroughly familiar with the legal and regulatory environment associated with compensation and benefit laws. Figure 23 outlines related responsibilities for HR.

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Section 3.2: Laws Affecting Employee and Labor Relations

Examples of HR Responsibilities Post notices: Some jurisdictions have requirements that employers must post notices about employees’ rights in areas of the workplace that are conspicuous and accessible to all employees. Provide training: Some laws require training on the basic concepts of equal employment opportunity and other aspects of employee relations. Training is designed to educate employees and raise awareness about lawful, appropriate and respectful conduct in a diverse workforce (Society for Human Resource Management, Introduction to the Human Resources Discipline of Employee Relations 2012). Maintain records and reporting: Laws and regulations can govern numerous aspects for employee records management. HR polices must include how these records are protected, what information is kept and when the records are disposed of and how. Figure 2-3. HR Responsibilities Related to Compensation and Benefit Laws

Occupational Health and Safety Laws Occupational health and safety laws are often intended to ensure employers provide employees with an environment free from hazards, such as exposure to toxic chemicals, excessive noise, mechanical dangers, heat or cold stress or unsanitary conditions. Organizations must comply with laws, regulations, minimum requirements and recommended industry best practices regarding the management of occupational health, environmental, safety and quality aspects across the value chain.

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Section 3.2: Laws Affecting Employee and Labor Relations

The locations where your organization has a presence and the products or services produced apply when creating occupational health and safety policies, processes, practices and programs. Exploratory questions to ask when determining what laws and regulations apply for occupational health and safety include those listed in Figure 2-4.

Figure 2-4. Exploring Occupational Health and Safety Laws HR’s Role in Supporting Occupational Health and Safety Laws The health and safety of employees is a vital component of employee relations. Essential contributions by the HR function for employee health and safety may include the responsibilities outlined in Figure 2-5.

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Section 3.2: Laws Affecting Employee and Labor Relations

Examples of HR Responsibilities Conduct risk assessments: Risk

Align hiring practices: HR should

assessments should evaluate the

work with managers to ensure

organization’s overall risk and

employees have the required skills

identify best practices for

and knowledge with respect to

reducing workplace injuries and

workplace safety and health.

illness. Establish policies: HR is often

Provide education and training:

responsible for establishing

HR should ensure employees have

organizational policies based on

required training to maintain a safe

related health and safety laws.

environment.

Enforce notification and

Implement safety inspections: HR

record-keeping procedures:

must ensure safety inspections are

HR should notify agencies or

carried out and appropriately

authorities of occupational

documented per safety laws and

accidents and diseases as

organizational policies.

dictated by the law. Figure 2-5. HR Responsibilities Related to Occupational Health and Safety Laws

Anti-Discrimination, Harassment and Fair Work Laws Anti-discrimination law refers to the law concerning people's right to be treated equally. Some countries mandate that in employment, in consumer transactions and in political participation people should be dealt with on an equal basis regardless of sex, race, ethnicity, nationality, sexuality and sometimes religion and political views.

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Anti-discrimination, harassment and fair work laws vary from country to country. These laws may be influenced by cultural and societal norms. HR professionals should have a thorough understanding of anti-discrimination, harassment and fair work laws for all jurisdictions where the organization has a presence. HR’s Role in Supporting Anti-Discrimination, Harassment and Fair Work Laws The demographic composition of the workforce is rapidly changing. Responding to these changes in the workforce affects recruitment, staffing, employee retention, talent management and employee development programs. For HR professionals, implementing organization policies, procedures and practices that adhere to anti-discrimination, harassment and fair work laws supports the changes that are continuing to evolve.

Intellectual Property Laws Most businesses own intellectual property (IP). IP could include knowledge on how to operate specialized machinery, information about an application or even the recipe for organic bread. While some IP is protected by patents, registered designs or registered trademarks, a substantial part of a company's IP is knowledge contained in the minds of employees. The World Intellectual Property Organization (WIPO) divides intellectual property into two categories: 

Industrial property: Includes patents, trademarks and industrial designs



Copyright: Includes literary and artistic works such as novels, poems, films, musical works, paintings, photographs and architectural designs (World Intellectual Property Organization n.d.)

HR’s Role in Protecting an Organization’s IP HR professionals should know what methods are reasonable to protect an organization. Methods to protect IP require research and due diligence. For example, in some regions and countries, when an employee invents something at

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work, the invention is not necessarily the property of the organization. As a protective measure, HR should include a separate written agreement as of the date of hire for all employees regarding patents, trade secrets, copyrights and trademarks. Trade Secrets

A trade secret is any confidential business information that provides an organization with economic value. Trade secrets can include manufacturing or industrial secrets and commercial secrets. According to WIPO: “The unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret. Depending on the legal system, the protection of trade secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information” (World Intellectual Property Organization n.d.). HR can help protect an organization’s trade secrets through written agreements with employees and independent contractors. HR can create a trade secret protection program with the following actions: 

Limit the number of individuals who have knowledge and access to trade secrets.



Keep trade secrets secure through physical or electronic means.



Provide a training program to protect your trade secrets. (Society for Human Resource Management, Type of Intellectual Property Dictates Protection Needed 2008)

IP Global Standards

The World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Right (TRIPS) introduced intellectual property rules. This agreement attempts to narrow the gaps in the way rights are protected around the world and to bring them under common international rules. The agreement

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establishes minimum levels of protection that each government must give to fellow WTO members. The agreement covers five common issues: 

How basic principles of the trading system and other international intellectual property agreements should be applied



How to give adequate protection to intellectual property rights



How countries should enforce those rights adequately in their own territories



How to settle disputes on intellectual property between members of the WTO



Special transitional arrangements during the period when the new system is being introduced (World Trade Organization 2011)

Employment Contracts Employment contracts are common in most countries, although the format of the agreements may vary. Listed below are a few examples: 

Employees in the European Union are guaranteed, under EU Directive 91/533, the right to a written description of employment terms within two months of hiring. This description could include a pay slip (also called a pay stub). If no written contract is provided, a contract is implied.



Chinese law requires that employees receive written contracts within one month of hiring. In the absence of a written contract, a contract will be implied.



In Mexico, written contracts are required for all levels of staff, including temporary and part-time workers.



In Portugal, contracts may be verbal or implied by the fact that an employee is receiving a paycheck.



In the United States, the principle of at-will employment means that individual employment contracts are the exception rather than the rule.

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In some countries such as those in the Middle East, the service contract may contain a provision subjecting the employee to a probation period according to the employer policy. Often, the policy stipulates that the probation period will not exceed what the labor law states within the same country. Usually, the employee will not be subjected to more than one probation period with the same employer. In the meantime, the contract may be terminated within the probation period if it has been proved to any party that the other party did not or cannot fulfill the agreed responsibilities. In this case, the given notice should not be less than what the labor law states. The notice period during a probation period is usually shorter than in normal time. Implied Contracts Implied contracts have terms derived from statutory or common law, from collective agreements or from local norms for the job, employer and country. The terms of implied contracts vary by country. These implied terms may include the following: 

Minimum notice of termination



Entitlement to full pay when sick



Restrictions on what can be required of an employee; for example, requiring an employee to do only the current job in the current location under the current schedule



Benefits in kind



Payment terms



Loyalty terms (for example, noncompete and confidentiality pledges)



Commitment of both sides to refrain from actions likely to undermine trust and confidence (for example, equitable treatment, attention to procedures)

Amending Contracts Employment terms are defined by contract. Therefore, an employer should amend the contract to change employment terms (for example, pay, hours and duties). In certain situations, an employer’s options for changing contracts may be limited.

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Contracts concluded through collective bargaining require renegotiation with unions. An employer seeking to change employment terms for workers after a purchase or merger will be restricted by acquired rights laws—unless the employer can prove economic hardship. The TUPE regulations in the United Kingdom, for example, require an employer to demonstrate economic, technical or organizational reasons for changes in employment or termination; an employer faces consequences if the reasons given are proved to be false. The strategy of amending contracts by firing and rehiring under new terms may not be legally defensible and may be considered an arbitrary unfair dismissal. Union Agreements and Contracts Trade unions and labor unions are common and can often influence work conditions. A trade union or labor union is an organization of workers designed to achieve common goals such as better working conditions. Workers elect union leaders who can negotiate terms of a working agreement, including wages, hours and terms and conditions of employment. The employer and union leaders agree on working terms, and these terms are specified in a binding contract. Unions in Europe are influential and are characterized by the following: 

Industry-wide: Unions in Western Europe tend to be industry-wide and not necessarily at the organizational level. Because unions are often industry specific, employers tend to bargain through employer associations rather than as an individual employer.



Scope of bargaining: European agreements tend to be concise and allow the organization to institute more generous terms. (Dessler 2008)

Union Contract Provisions

If a union represents employees, a day is set for the organization and union leaders to meet and to negotiate a labor agreement. This agreement will contain

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specific provisions covering wages, hours and terms and conditions of employment. The actual contract may be lengthy and include the following sections: 

Management rights



Union security and payroll dues deductions



Grievance procedures



Arbitration of grievances



Disciplinary procedures



Compensation rates



Hour-of-work and overtime policies



Benefits



Health and safety provisions



Employee security seniority provisions



Contract expiration date (Dessler 2008)

Laws Affecting Global Workforce Organizations In a globalized economy, an organization’s relationship with its workforce may be influenced by many layers of employment-related laws and regulations. There are three primary considerations for HR professionals in managing global employee relations: 

HR professionals must be aware of country-specific laws from all applicable levels of jurisdiction. In China, for example, employers must pay into a city-administered education fund. In Canada, federal law usually cedes jurisdiction to provincial law. Employers in an EU member state must be mindful of EU regulations, directives and local national statutes.



HR professionals should understand and help international assignees comply with various permit and visa conditions. These conditions may differ depending on specific trade agreements between the home and host countries.

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

Section 3.2: Laws Affecting Employee and Labor Relations

HR professionals should research international agreements on labor, human rights and corporate social responsibilities and assess how these apply to the organization’s employment policies.

International Human Rights and Labor Standards Efforts have been made by international institutions, such as the International Labour Organization (ILO) and the Organisation for Economic Co-operation and Development (OECD), to address employee rights through international legislations and standards. The ILO standards, in particular, serve as the foundation for the vast majority of employment laws and acceptable management practices throughout the world, and they should, therefore, play a key role in business decision making. It is important for HR professionals to understand these labor principles and, more importantly, their impact throughout an enterprise’s worldwide operations.

There are two distinct types of ILO standards: 

Conventions are international treaties that are legally binding once ratified.



Recommendations are nonbinding guidelines designed to assist countries in the implementation of ratified conventions.

The ILO has adopted more than 180 Conventions and more than 190 Recommendations. They cover such topics as basic worker rights, industrial relations and conditions of work. The ILO has identified eight core labor standards: 

Freedom of association and the right to organize. The right to form and join unions without interference from public authorities or authorization by employers

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

Section 3.2: Laws Affecting Employee and Labor Relations

The right to organize and bargain collectively. Protecting employees from discrimination or retaliation related to union activity and requiring employers to negotiate with unions



Forced labor. Prohibiting all forced and compulsory labor, except for military service, prison and emergencies (for example, war, natural disaster)



Abolition of forced labor. Prohibiting forced labor as a means of political coercion or punishment, retaliation for strikes, workforce mobilization, labor discipline and discrimination



Minimum age. Prohibiting the hiring of children too young to have completed compulsory schooling and limiting employment in hazardous work to those eighteen and older



Prohibition and immediate elimination of the worst forms of child labor. Prohibiting any work likely to be harmful to the health, safety and morals of children



Equal remuneration. Requiring equal pay and benefits for men and women



Discrimination (employment and occupational). Prohibiting discrimination in hiring, training and working conditions and requiring employers to promote equality of opportunity and treatment

While the main users of international labor standards are the ILO's constituents, global organizations have found these standards to be useful tools. Increasing consumer interest in the ethical dimensions of products has led multinational organizations to adopt these governing conditions in their production sites and those in their supply chains. For a listing of ILO constituents and standards, please see http://www.ilo.org.

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Trade Agreements and Treaties One of the major factors contributing to the rapid increase in cross-border economic activity has been the passage of international trade agreements removing many barriers to the movement of capital, goods and sometimes people. Some trade agreements have been formed specifically to facilitate the growth of emerging markets. Agreements may be bilateral, meaning between two countries, or multilateral/regional. World Trade Organization (WTO) statistics show the rapid increase in the number of regional trade agreements worldwide. Since the creation of the WTO in 1995, more than 240 agreements have been reached, in addition to the 124 notifications of agreement received by the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT). The WTO reports that nearly all its members participate in one or more regional trade agreements. Trade agreements may affect the work of global HR in a number of ways: 

Eased visa requirements may increase talent mobility.



Taxation and pension provisions may provide savings to enterprises and international assignees, and they will affect internal processes.



Recognition of intellectual property rights will help control some risks due to loss of patented or copyrighted processes or content and increase transfer of knowledge throughout the global organization.



Changes in trade and investment barriers may lead to workforce expansions, reductions or transfer in different areas of a multinational enterprise.



Offshoring and outsourcing may be used more freely.



Talent management issues and priorities may change as certain tasks are transferred from one country to another.



Greater internationalization will require more integration within global organizations.

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

Section 3.2: Laws Affecting Employee and Labor Relations

Accession to a trade agreement may involve harmonizing regulations among participants, which may trigger institutional changes that affect employment regulations and processes, such as changes in wage and working conditions.

Global Mobility Increasingly people are looking across borders for work; it’s not just multinational employees being assigned to another country. The increase in employees working across borders identifies a greater need for organizations to set up processes for global mobility. Ensuring employees are able to work safely and legally outside their home country involves much planning. Employee relations issues to consider include the following: 

When can employees travel, and how long can they stay?



What can they do while in the host country?



How will they be paid?



How will they receive benefits?



What are the tax considerations?



How long can they stay?

Human resource professionals and corporate counsel are confronted with a maze of legal and regulatory issues in multiple countries that must be considered before moving employees across borders. These issues include (see Figure 2-6):



Immigration laws



Laws of employment



Compensation and benefit regulations and laws



Tax and social insurance regulations and laws

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Figure 2-6. Legal Considerations for a Global Workforce Work Assignments The nature of the work being done and the length of stay may influence the legal requirements of traveling from one country to the next. Figure 2-7 outlines different types of work assignments. Assignment Long-term assignment

Description Involves relocation from one country to another for a period of one year or more

Short-term assignment

Involves relocation from one country to another for a period of time lasting from six months to one year

Localized transfer

Cross-border assignment during which the employee is ultimately transitioned to permanent local status

Figure 2-7. Types of Work Assignments (continued to next page)

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Assignment International commuting

Section 3.2: Laws Affecting Employee and Labor Relations

Description Cross-border assignment during which the employee commutes frequently to the home country

Extended business travel

Cross-border assignment during which the employee does not relocate but travels regularly to the assignment location

Figure 2-7. Types of Work Assignments (concluded) Obtaining Visas and Work Permits Once an individual is chosen for an assignment, the organization needs to move quickly to secure the necessary visa. Requirements and processing times vary by country. Start by contacting the host country’s consulate or embassy for information on visa requirements. To locate information on embassies and consulates around the world, go to http://www.embassyworld.com. Following is a list of generic visa types that may be required depending on the nature of business to be conducted in a particular country: 

Work permit. Authorizes paid employment in a host country. Work permits are often handled by a Ministry of Labor or equivalent government labor agency.



Work visa. Authorizes entry into a country to take up paid employment.



Dependent visa. Permits family members to accompany or join employee in country of assignment.



Multiple-entry visa. Permits multiple entries into a country.

Treaties or other agreements may include provisions related to visa requirements and procedures that facilitate travel across borders. Often, as indicated in the

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discussion of trade agreements, treaties will include reciprocal visa programs, in which visa-free travel may be permitted under certain circumstances. The following are two examples of reciprocal visa agreements: 

Asia-Pacific Economic Cooperation (APEC): The APEC Business Travel Card (ABTC) provides multiple, precleared entry into participating countries and express immigration processing upon arrival. Cardholders need not apply for visas or entry permits each time they travel to any of the APEC nations.



North American Free Trade Act (NAFTA): Through NAFTA, Americans, Canadians and Mexicans may work within each other’s countries, within certain conditions.

European Union

There are twenty-seven member states of the European Union (EU). Citizens of the EU have the freedom of movement and residence and the right to work in any position other than civil service and related posts. The European Union does not issue passports, but the passports issued by its members share certain common design features. HR’s Role in Visa Requirements

HR professionals are often responsible for overseeing and assisting employees in the application process for visas. Figure 2-8 summarizes these responsibilities.

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HR’s Strategic Roles

Section 3.2: Laws Affecting Employee and Labor Relations

HR’s Tactical Responsibilities

Know the company’s risk, liabilities

Anticipate roadblocks in the visa

and burden of employing foreign

application process.

nationals. Understand the legal repercussions

Know the visa application process in

for noncompliance.

different countries.

Develop a comprehensive

Comply with record keeping and

compensation and immigration

tracking.

strategy for global staffing and international recruitment. Plan proactively to deal with delays.

Coordinate visa process with specialists (mainly specialized law firms).

Figure 2-8. HR’s Responsibilities with Visas Taxation When an employee lives in a host country, it is natural to assume that the host country may seek to tax the employee’s compensation. Many jurisdictions have provided income tax relief for short-term assignments. Understanding how these rules work in any particular country is key to effective tax planning. According to the Global Mobility Handbook published by Baker and McKenzie, taxation issues can be complex for a number of reasons, as listed below: 

The income tax, social insurance and other relevant laws of more than one jurisdiction are involved.



Many jurisdictions have special rules that apply to the cross-border transfer of employees.

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

Section 3.2: Laws Affecting Employee and Labor Relations

Many income tax issues revolve around the employee’s citizenship, nationality or residency.



The provisions of an income tax treaty or other international agreement may apply to reduce the employee’s liability for income tax and social insurance. (Baker & McKenzie 2010)

Permanent Establishment

One key issue that should be evaluated when employees are assigned in another country is whether the structure will inadvertently create a permanent establishment. In such cases the employer may be considered to be doing business in the host country and may be subject to corporate income tax on an allocable amount of its net income. An organization that unintentionally creates a permanent establishment abroad may be obligated to file tax returns with a foreign tax agency, to observe local accounting standards for foreign tax purposes and to pay higher taxes on a worldwide basis. The existence of a permanent establishment may also trigger registration, filing and publication (Baker & McKenzie 2010).

Unions Across Borders As a result of globalization, the presence of international unions has expanded. Nevertheless, as many unions have discovered, the historical, culture and legal influences of different jurisdictions often mean that unions will occupy very different roles in a society, depending on the jurisdiction. In some countries, like China, unions remain very much aligned with the central government and the cultural legacy of overseeing a harmonious work environment. In other countries, like Germany, the legacy of work counsels often prevents the influence or penetration of international unions. In some northern European countries, unions are tasked with managing and administering the social benefits of employees, a role usually held by the government itself. While unions are generally accepted to represent a collective, rather than individual, employment bargaining relationship,

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the actual practice and mandate of a union still varies significantly from country to country. Trends in Membership and Density While the absolute numbers of union members have increased in the past decade, the broader global trend reflects an overall decrease in union density. Union density refers to the percentage of the total workforce that is unionized, and in the vast majority of countries around the world, union density has been on the decline. Union density remains highest in Scandinavian countries, while among the developed nations, France and the US have the lowest density; in certain countries unions are illegal. One reason cited for the decline in union density during a time of gains in union membership is the migration of manufacturing jobs from developed to developing nations, coupled with unions increasingly targeting service sector jobs. Another common trend at the global level is the significantly higher levels of unionization in the government sector or public sector-related employment as compared with the private sector.

Organizational Polices and Employee Relations Your organization’s policies must be customized to reflect your industry, geographic location and the organization’s goals and values. Employment laws vary by region of operation, and certain industries have special considerations. When creating policies, know how the law applies to your organization and factor in the culture of your organization.

Defining Policies and Procedures A policy is a formal statement of a principle or rule that employees must follow. Each policy addresses an issue important to the organization's mission or operations. Policies are written as statements or rules.

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A procedure tells employees how to assess and interpret a policy. Policy is the "what," and the procedure is the "how to." Procedures are written as instructions, in logical, numbered steps. At a minimum, organizations should have policies and procedures created for the following topics:



Employee information



Performance management



Hiring procedures



Holidays



Hours of work



Leaves of absence



Overtime



Termination



Vacation



Benefits program

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Writing Policies and Procedures Key steps in writing a policy and procedure document are outlined in Figure 2-9.

Figure 2-9. Process for HR Writing Policy Essential Content The following is essential content for your policies: 

Policy name



Effective date of the policy and date of any revisions



Purpose of the policy (what it is intended to promote or achieve)



Main policy statement



Definitions of any main concepts or terms used in the policy



Eligibility or scope (which groups of employees are covered by the policy)



Scope of permissible exceptions and who is responsible for making exceptions to the general application of the policy



Positions in the organization responsible for implementing and monitoring the policy (HR Council for the Nonprofit Sector n.d.)

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Legal Assistance It may be in the best interest of your organization to seek legal assistance when creating policies and procedures. A qualified legal professional can determine if there are legal implications in the wording of the policy and in any implied actions. Legal professionals can also help identify what should be included in your policies and procedures and help minimize legal liabilities. For example, even though some laws may guide the following employment policies and procedures, it may be in the best interest of the organization to specify policies for the following: 

Access to personal records



Anti-nepotism or no-spouse rules



Searches on employer property



In-house investigations



Solicitation, bulletin board and e-mail rules



Travel policies



Attendance, punctuality and dependability



Performance evaluations



Payment of wages



Employer property (Society for Human Resource Management, Writing an Employee Handbook Is Not for the Faint of Heart 2010)

Communicating Policies and Procedures The name of your policy and procedure document will depend on your audience and on the content you wish to communicate. Some organizations use multiple documents to focus on certain content areas so that critical information is not lost within hundreds of pages of documentation. Here are three examples that are commonly used to document policies and procedures.

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Employee handbook: An employee handbook is written for employees. It is often written using a simple layout to easily reference organization policies and procedures and is a vehicle for familiarizing employees with basic company policies and benefits programs. An employee handbook also addresses the general expectations of the company, including acceptable and unacceptable behavior and disciplinary measures. Policies and procedures manual: A policies and procedures manual is more comprehensive than an employee handbook and details every aspect of company policy, the procedures for following those policies and the forms necessary to complete each process. A policies and procedures manual is a reference tool for managers and supervisors. This documentation is much more complete in detail than the employee handbook and should be used for backup when more information is needed to explain a policy or when a deeper understanding of a process is desired. As a benefit to management, the manual can contain references to applicable laws that correlate to each policy. Managers and supervisors then have access to the rationale for the policies, thus providing them with assistance for enforcement (Society for Human Resource Management, Employee Handbooks: What is the Difference Between Employee Handbooks and Policies and Procedures Manuals? 2008). Codes of conduct: Outlines the standards to which the employer expects its employees to adhere. For example, a code of conduct may include policies and procedures related to bribery, workplace violence and accurate reporting. Statements of Understanding Some organizations ask employees to sign statements of understanding for certain policy and procedure documents. This is often put into practice for code of conduct documents. In these instances, employees may be asked to sign a statement of understanding to acknowledge that they have read, and that they comprehend and agree to abide by, the code of conduct set forth by the organization. If a statement of understanding is part of your processes, be sure

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you have a consistent plan for tracking who has received and signed the statements. Distribution Ensure that employees have an up-to-date copy of each policy and procedure that is relevant to their job or that the policies and procedures manual is kept in a central place, such as online, where all employees can easily access it. If there are significant updates to policies, require employees to sign the statement. Ongoing Communication When necessary, provide communications to employees about different aspects of policies and how these policies apply to their daily activities. Communication can be in the form of a short e-mail, an update to a website or an extensive training. Send short communications to employees outlining different aspects of a policy that could be misinterpreted or easily overlooked. Encourage employees to ask their manager or supervisor for information about the policy, particularly about how the policy impacts them individually (HR Council for the Nonprofit Sector n.d.).

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3.3: Creating a Positive Work Environment

This section covers the following information from the Body of Knowledge: Behaviors: 02. Support company sponsored activities and awards to encourage a positive work environment (for example, employee appreciation and rewards, company social gatherings, sports teams or clubs) 03. Collect information about employees’ work experiences by conducting final exit interviews before employees leave the organization, and conduct surveys about employee attitudes, work conditions, or diversity issues 05. Respond to employee’s questions or concerns about workplace issues (for example, employment concerns, company HR policies, complaints, retirement questions, payments) Skills & Knowledge: 01. How to encourage and keep employees (employee engagement techniques) 02. Methods and processes for collecting employee feedback (for example, employee attitude surveys or final exit interviews before leaving the organization)

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05. Issues affecting work/life balance (for example, flexibility of hours, telecommuting) 09. Event planning

Section 3.3: Creating a Positive Work Environment Introduction ..................................................................................................................................72 Employee Engagement ................................................................................................................72 Employee Engagement versus Job Satisfaction .........................................................................72 Levels of Employee Engagement ...............................................................................................73 Employee Engagement Drivers ..................................................................................................74 Engaging Employees across Cultures ........................................................................................74 Identifying Employee Engagement Barriers ..............................................................................75 Communication Strategies for Engaging Employees .................................................................76 Positive Workplace Culture ........................................................................................................78 Early and Effective Onboarding Practices .................................................................................79 Trusting Environment ................................................................................................................79 Reward and Recognition Programs ............................................................................................80 Work/Life Balance Programs .....................................................................................................86 International Assignee Support ..................................................................................................89 Creating a Friendly Workplace Environment ............................................................................92

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Section 3.3: Creating a Positive Work Environment

Introduction Research shows that when employees work in a positive work environment, with the right resources to do their job, the result is more satisfied customers and increased competitive financial performance for the organization. Today, organizations are turning to HR to create and sustain a workplace culture with people management practices and initiatives that encourage, recognize and reward behavior focused on quality performance. This section examines the following: 

Employee engagement



Characteristics of a positive workplace culture

Employee Engagement Employee Engagement versus Job Satisfaction Employee engagement is defined as “the extent to which employees commit to something or someone in their organization, how hard they work and how long they stay as a result of that commitment” (Lloyd Morgan 2004). In contrast, job satisfaction, a term sometimes used interchangeably with employee engagement, is defined as how an employee feels about his or her job, work environment, pay and benefits. Let’s compare the terms and explore how an employee can be satisfied with a job without being engaged in the job. Satisfied employee: These employees are getting everything they wish: a steady paycheck, benefits, sick leave and paid vacation. Their workload is fair, and they like the people they work with. Their actual contribution to the well-being of the

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Section 3.3: Creating a Positive Work Environment

organization in terms of innovation, creativity and productivity is negligible. But these employees are satisfied. Engaged employee: These employees are enthusiastic about their work, creative and innovative. These employees feel camaraderie with coworkers and feel responsible for the organization’s success. These employees may show a lower level of satisfaction for various reasons. But these employees are contributing and adding value. The most valuable employees today are those that are both satisfied and engaged.

Levels of Employee Engagement Engaged employees work harder and are more loyal. Understanding the types of engagement provides perspective into employee behaviors that can either positively or negatively affect organizational success. Figure 3-1 describes the levels of employee engagement. Level of Employee

Description

Engagement Engaged employees

Engaged employees work with enthusiasm and feel a connection to their organization. They drive innovation and move the organization toward goals.

Not-engaged

Not-engaged employees are essentially unproductive. They

Employees

are going through daily motions without energy or enthusiasm.

Figure 3-1. Levels of Employee Engagement (continued to next page)

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Level of Employee

Section 3.3: Creating a Positive Work Environment

Description

Engagement Actively disengaged

Actively disengaged employees are unhappy at work and are

Employees

also busy acting out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish. Figure 3-1. Levels of Employee Engagement (concluded) (Gallup, Inc. 2006)

Employee Engagement Drivers An increased demand for work/life balance and the changing relationship between employers and employees are driving the need for HR professionals to understand what employees need and want. The following provides a list of current trends to consider: 

The needs, wants and behaviors of the talent pool are driving changes in attraction, selection and retention practices.



The traditional employee-employer relationships are evolving into partnerships.



There is an increased demand for work/life balance programs.



HR has a greater role in promoting the link between employee performance and its impact on business goals (Lockwood 2007).

Engaging Employees across Cultures While the factors listed above may be universal, to effectively promote engagement, HR leaders will need to be aware of country, regional and cultural differences when designing employee engagement and commitment initiatives. Here are several key drivers for various countries: 

Canada: Competitive base pay, work/life balance and career advancement opportunities

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

Germany: The level of autonomy



India: Focus on the reputation of the organization as a good employer



Japan: The caliber of coworkers



Netherlands: The collaborative environment



United States: Competitive health benefits

These differences suggest that each country and/or culture has certain factors seen as important in the workplace (Lockwood 2007).

Identifying Employee Engagement Barriers Part of HR’s role is to determine barriers that prevent employees from engaging in their work. The Gallup organization has identified twelve indicators that link employee engagement with positive business outcomes and profitability. These indicators, known as the Q12, describe the twelve key expectations that when satisfied form the foundation of strong feelings of engagement. These involve items such as employee expectations of their supervisor, perceived support and work environment. Gallup explains when employees are engaged, they are more likely to perform, come to work and add value to the organization (Gallup, Inc. 2008, 2010). The Q12 includes the following questions. The answers you receive from your employees can help you determine what is working and what is not working when it comes to employee engagement. 1. Do you know what is expected of you at work? 2. Do you have the materials and equipment you need to do your work right? 3. At work, do you have the opportunity to do what you do best every day? 4. In the last seven days, have you received recognition or praise for doing good work? 5. Does your supervisor, or someone at work, seem to care about you as a person? 6. Is there someone at work who encourages your development?

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Section 3.3: Creating a Positive Work Environment

7. At work, do your opinions seem to count? 8. Does the mission/purpose of your organization make you feel your job is important? 9. Are your associates (fellow employees) committed to doing quality work? 10. Do you have a best friend at work? 11. In the last six months, has someone at work talked to you about your progress? 12. In the past year, have you had opportunities at work to learn and grow? (Gallup, Inc. 2008, 2010)

Communication Strategies for Engaging Employees One simple way to improve engagement and productivity is to increase employee involvement in communication efforts and to provide feedback on the organization’s operations and leadership. Here are several examples of strategies used by other organizations to engage employees through communication efforts. Employee action committees: HR can help create ad hoc groups of frontline employees who are trusted by their peers and are comfortable speaking up and offering their opinions. Members of employee action committees focus on providing the unfiltered feedback that surveys often don’t capture. Provide training on two-way communication practices: HR professionals can help build communication competencies through training and development. For example, HR can offer training to managers and leaders to help develop skills in facilitating open-ended discussions, fostering a team-based work environment and encouraging transparency in the workplace. Build communication competencies into performance management expectations: HR can help establish the stage for increased feedback by building communication competency expectations into the performance management process. For example, managers can be expected to demonstrate skills in

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Section 3.3: Creating a Positive Work Environment

responding to and acting on direct feedback (Society for Human Resource Management, Expert: Workplaces Need Continuing Dialogue 2011). Cross-Generational Communication Strategies “Companies can use distinct communication strategies to engage workers on a generational level,” advises Mike Ryan, senior vice president of client strategy at Madison Performance Group, a provider of employee engagement and sales incentive marketing programs (Society for Human Resource Management, New Rules of Engagement for Boomers—and Echo Boomers 2011). Ryan refers to echo boomers as the “first generation to grow up with computers at home and were plugged into the Internet revolution from the start. This powerful generation is now entering positions of authority and is in the unique position of competing with their ‘parent’s’ generation in the workplace,” Ryan observes. To address this generational shift, management must recognize these differences and adjust communication practices. “It’s all in the positioning,” Ryan explains, noting two practical ways to adjust: 

Managers should partner with the younger generation to help leverage their entrepreneurial skills, so they can be seen as the enabler for their success and not an obstacle. Ryan believes, “Jobs will then take on new dimensions for Echo Boomers, demanding more of their engagement, attention and loyalty.”



Managers should show workers they are respected and rewarded for their loyalty. “Many Boomers are contemplating the next phase in life and might lose intellectual curiosity—show them that their work is still fascinating," Ryan advises. (Society for Human Resource Management, New Rules of Engagement for Boomers—and 'Echo Boomers' 2011)

Module 3: Employee Relations and Communication

Section 3.3: Creating a Positive Work Environment

Positive Workplace Culture Organization culture is the characteristic values, traditions and behaviors employees share. When thinking about your organization’s culture, you may want to explore some of the questions listed in Figure 3-2.

Figure 3-2. Workplace Culture Research shows that organizations with a positive workplace culture, combined with safety and resources, are more likely to have engaged employees. Consequently, such organizations are more likely to attract and retain the best talent and to have higher levels of engagement. Some HR initiatives that facilitate a positive workplace culture include the following: 

Early and effective onboarding engagement



Trusting environment



Reward and recognition programs



Work/life balance programs



International assignee support



Friendly workplace environment

We will explore each of these in more detail in the sections to follow.

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Section 3.3: Creating a Positive Work Environment

Early and Effective Onboarding Practices The practice of onboarding new employees is making headlines across the media. Few companies give much thought to creating the right onboarding experience, but studies have shown employees are more likely to stay with an organization after three years if they’ve experienced a worthwhile onboarding program. When HR views onboarding as an opportunity to engage employees from their first day of employment, HR can achieve the following: 

Assimilate employees into the organization’s culture, processes and values



Increase retention through greater employee loyalty and commitment



Provide employees with the tools to be successful (Society for Human Resource Management, Managing the Employee Onboarding and Assimilation Process 2012)

Today’s forward-thinking organizations are looking beyond the traditional onboarding approaches and including innovative ways to engage employees from the start.

Trusting Environment Trust is built on understanding. Leaders can create understanding by clarifying what the organization wants and what leaders can offer employees. As an HR professional, you can promote trust in two ways: 

Lead by example.



Provide managers and leadership with the coaching, training and resources needed to build trust throughout the organization.

According to Stephen Covey, the author of The Speed of Trust: The One Thing That Changes Everything, there are thirteen common behaviors of trusted leaders around the world:



Talk straight.



Demonstrate respect.

Module 3: Employee Relations and Communication



Create transparency.



Right wrongs.



Show loyalty.



Deliver results.



Get better.



Confront reality.



Clarify expectation.



Practice accountability.



Listen first.



Keep commitments.



Extend trust.

Section 3.3: Creating a Positive Work Environment

Remember that the thirteen behaviors always need to be balanced by each other and that demonstrating behaviors in the extreme such as “talk straight” can be viewed as a flaw (Society for Human Resource Management, How the Best Leaders Build Trust 2009).

Reward and Recognition Programs Reward and recognition programs can facilitate a positive workplace environment and, hence, a strong engagement between the employee and the organization. For a program to be effective, however, it must create value. Creating value means that the recognition or reward must directly link to a performance component, or it will be insignificant. Consider the questions in Figure 3-3 before implementing a rewards program.

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Section 3.3: Creating a Positive Work Environment

Figure 3-3. HR Considerations for Reward and Recognition Programs The types of recognition and reward programs are endless. The following describe only a few of the many ideas used across organizations today. Spot awards: Spot award programs recognize employees on an impromptu basis for their effort or achievement. This award can be presented right away when a manager notices an employee doing something worthy. Spot awards can be presented at larger meetings, so the employee can be recognized by peers. Team achievement awards: Team achievement awards recognize teams that have completed a special project, met a milestone or demonstrated a collaborative effort. Social recognition: Social recognition are informal manager-employee exchanges such as praise, approval or expressions of gratitude for good performance. For some managers, praising employees is a natural part of their employee interaction. For other managers, this may not be part of their management style and may require coaching and development.

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Section 3.3: Creating a Positive Work Environment

Financial incentives: Financial incentives provide employees with a monetary gift in recognition of their achievements. Financial incentives can include gift certificates, cash rewards, merchandise and variable pay. Nonfinancial incentives: Nonfinancial incentives provide employees with an award not tied directly to a financial gain, such as work/life benefits, thank-you notes, special award ceremonies, lunches with an organizational leader, bouquet of flowers or even an office with a window. Cross-Cultural Considerations

What is considered a reward in one culture may be considered distasteful in another. For example, in Japanese and Scandinavian cultures, selecting an individual employee for recognition is problematic and may result in demotivation. With cultural guidelines in mind, global HR professionals may choose from a variety of nonfinancial recognitions, including the following: 

Assignment to project teams or global task forces that provide opportunities for greater visibility within the organization, exposure to other parts of the organization and skill development



Allowing employees more autonomy and self-direction in their work assignments



Opportunities to supervise other employees or to try different jobs



Access to a high-performer development program



Enhanced job tools or resources such as subscriptions to professional journals

Creating Reward and Recognition Programs When creating rewards and recognition programs, follow these five guiding principles: 

Align rewards and recognition with your organization’s goals and values: Rewards and recognition are most successful when they are aligned with the organization’s stated mission, vision, values and goals. If employees see a clear connection between what management says is

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Section 3.3: Creating a Positive Work Environment

important and what is actually rewarded at work, the reward will hold a greater value. 

Be sincere and simple: Be sure that the recognition and awards are appropriate for your culture and that the message is honest and sincere. One of the easiest and most effective ways to show appreciation is through a thank-you note.



Ensure the meaning matches the effort: An employee who recently closed a million-dollar deal may not feel appreciated if he or she receives a coffee mug. Beware of canned incentive programs. Organization cultures differ greatly, and what works in one environment may fail in another. The reward must be meaningful to the individual receiving it.



Adapt the program when necessary: Certain groups of employees may not be motivated by all of the organization’s incentives. For example, some employees may value a cash award, while others would place a greater value on time off from work. Consider a variety of incentives and recognition opportunities in order to meet the varying needs of the workforce.



Provide relevancy: Determine what behaviors to reward and then reward them consistently. Be specific as to why the reward is being given and the value the effort has on the organization.



Act in a timely manner: Recognize and reward soon after the desired behavior. This strengthens the link between the employee’s action and the result to the organization. (Society for Human Resource Management 2005)

Assessing Your Organization’s Level of Appreciation Teresa A. Daniel and Gary S. Metcalf, in their paper Fundamentals of Employee Recognition, suggest organizations assess how well they are doing when it comes to employee recognition by assessing their performance answering the following questions: 

Does our organization show employee appreciation every week?

Module 3: Employee Relations and Communication



Section 3.3: Creating a Positive Work Environment

Does our organization measure what we reward and reward what we measure?



Does our organization compete between teams for incentives?



Are employees able to select some of their project work?



Does our organization reward on most of our organizational values?



Do employees see our recognition and rewards as valuable?



Do peers recognize and reward others?



Does our organization recognize small accomplishments as well as large accomplishments? (Society for Human Resource Management 2005)

If you answered No for the majority of the questions listed, you should reconsider ways in which you can offer meaningful programs within your organization. Providing Feedback from Managers to Employees Receiving specific feedback from a manager helps employees assess personal performance. Feedback can also clarify how an organization operates and its expectations for future goals. A lack of feedback can cause an employee to become anxious and to look for another job. Obtaining feedback across geographic areas presents certain challenges: 

In virtual organizations, employees and leaders may be separated physically. Opportunities for seeking feedback may be fewer, and misunderstandings through e-mail and voice mail may increase.



In complex and technical organizations, leaders may not have sufficient expertise to deliver meaningful feedback. Consequently, they may devise ways to secure third-party feedback from a respected source.

To help determine the most effective form of feedback, managers should understand the communication patterns seen across different cultures. Figure 3-4 outlines different communication patterns and how these patterns translate into styles of feedback.

Module 3: Employee Relations and Communication

Communication

Section 3.3: Creating a Positive Work Environment

How Communication Patterns Translate into Styles of Feedback

Patterns High context

Low context



Relies on implicit communication



Appreciates the meaning of gestures, posture, voice and context



Relies on explicit communication



Favors clear and detailed instructions



In a conflict or with a tough message to deliver, favors getting

Direct

your point across clearly even at the risk of offending or hurting 

Indirect

In a conflict or with a tough message to deliver, favors maintaining a cordial relationship at the risk of misunderstanding

Affective



Displays emotions and warmth when communicating



Establishes and maintains personal and social connections



Stresses conciseness, precision and detachment when

Neutral

communicating 

Observes strict protocols and rituals



Favors familiarity and spontaneity

Formal Informal Figure 3-4. How Communication Patterns Translate into Styles of Feedback (Rosinski 2003) Another significant challenge, especially for organizations with a global presence, is cultural diversity. Cultural differences can affect the degree of need for feedback and inhibit employees from seeking necessary feedback. M. F. Sully de Luque and S. M. Sommer, in the article The Impact of Culture on Feedback-Seeking Behavior, propose that feedback-seeking behavior was influenced by four dimensions of cultural variability: 

High/low status: Feedback seeking by a subordinate might be perceived by a supervisor as an insult that causes loss of face. In these cultures, peer feedback may be more practical.

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

Section 3.3: Creating a Positive Work Environment

Specific/holistic: Supervisors in holistic cultures may be reluctant to deliver feedback that might damage the harmony of the employee relationship. Employees from specific cultures are more likely to compartmentalize their request for feedback and direction and not see it as a loss of face.



High/low tolerance for ambiguity: Employees in a culture with low tolerance for ambiguity need feedback in order to allay anxiety.



Individualism/collectivism: This dimension of cultural difference affects whether the individual or the entire group will be singled out for feedback. Some researchers also believe that individualist cultures prefer positive feedback while collective cultures prefer information about mistakes (Sully de Luque and Sommer 2000).

The reward programs developed by HR should accommodate these special needs and allow local operations to adapt systems to their cultural requirements.

Work/Life Balance Programs As patterns of work continue to shift in response to the demands of production and trade in the global economy, major challenges have arisen. Demands on employees are changing, which means an increase in competition for jobs and an increase in work pressures. Employers are also affected by global competition and face a myriad of national and international policy and law. For both employee and employer, there is a struggle to find a balance between work and personal life without diminishing productivity and profits. Work/life balance programs can strengthen the engagement between the employee and the organization. HR is often navigating work/life balance decisions for an organization and working with leaders to determine which programs support the well-being of employees and also provide a return on investment.

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Section 3.3: Creating a Positive Work Environment

Figure 3-5 provides a list of options that are often categorized as work/life balance programs. Work/Life

Examples

Balance Programs 

Banking service



Grocery services

Convenience/



Dinners-to-go program



Referral services for

concierge



Dry cleaning and laundry

household needs (e.g.,

service

plumbing, electrical)

services

 Employee assistance and

Career development and



Subsidized cafeteria services



Resources and referrals for

coaching 

employee

education

Employee development



Retirement planning

courses



Time management training



Tuition assistance program

development



Financial planning

programs



Legal assistance



Mentoring



Resources and referrals for counseling

Family



Adoption assistance



Eldercare assistance



Backup (emergency) child



Long-term care for extended

assistance programs

care program 

Child care assistance

family members 

Parenting resources and seminars

Figure 3-5. Examples of Work/Life Balance Programs (continued to next page)

Module 3: Employee Relations and Communication

Work/Life

Section 3.3: Creating a Positive Work Environment

Examples

Balance Programs  Flexible work arrangements



Flexible work hours such



Telecommuting

as flextime. Flextime



Variable workweek,

allows employees to

which is sometimes

choose starting and

called a compressed

ending hours but typically

workweek. A

must be present in the

variable workweek

office during core periods,

allows employees to

such as 10 a.m. to 3 p.m.

work longer hours

Job sharing, which allows

over fewer days.

two employees to share the workload of a single job. 

Part-time employment



Disease management

Wellness programs



program 

Fitness benefits or

Smoking-cessation program



workplace fitness

Weight management program

program  Leave of absence

Miscellaneous

Maternity and paternity



Self-funded leave

leave program 

Commuting program



Ergonomics program



Employee affinity groups



New mothers’ rooms



Employer-sponsored



Public transportation

discounts

assistance

Figure 3-5. Examples of Work/Life Balance Programs (concluded)

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Section 3.3: Creating a Positive Work Environment

Implementing Work/Life Balance Programs across Cultures Several factors influence the benefits an organization offers in different countries. Primary factors include the following: 

Laws: Are there laws governing work/life program offerings?



Labor relations: Do labor contracts specify work/life provisions for workers?



Organizational culture: Is the organization family friendly? Are there expectations of long hours of work for career progression?



Maturity of the organization: Is the organization in a start-up phase or established with the capabilities to support work/life initiatives?



Market practice: What work/life benefits are necessary to be competitive on a local and global scale?

International Assignee Support The profile of the international assignee is often made up of long work hours, frequent international travel, difficult communications across time zones, working during vacations and disruption in family life. Unfortunately, these types of situations often lead to failed assignments, an early return home for the assignee or his or her transfer to another employer. With so much at risk, support for international assignees is critical and can strengthen the engagement between employees and the organization’s HR department (Society for Human Resource Management, Managing International Assignments 2009). In the paragraphs to follow, we will assume the assignee has completed predeparture training and preparation, and we will focus on ways to support assignees while on assignment.

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Section 3.3: Creating a Positive Work Environment

Managing Culture Shock Culture shock may be most significant several months after the employee begins the assignment. In some cases, family members are most affected. Providing spousal and family support can minimize family stress and enhance the assignee’s productivity. Spousal support may include the following elements: 

Examining personal strengths



Managing change



Examining cross-cultural values



Creating goals, both personal and professional



Maximizing host country activities and resources

Communication Abroad Maintaining consistent communication with the assignee throughout the assignment will greatly reduce feelings of isolation and abandonment. Use the various communication channels to support dialogue and information sharing. Communication options include the following: 

Organization Intranet



Employee website



Virtual meetings



Teleconferences



E-mail

HR Support for Daily Living Tasks Daily living activities such as banking and finding housing can become burdensome for international assignees. HR can assist and work with managers to ensure that assignees are not overwhelmed with work responsibilities while orienting to their host country. Figure 3-6 provides a checklist to help the assignee and HR prepare for daily living tasks and to determine which tasks HR can assist the assignee in completing.

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Section 3.3: Creating a Positive Work Environment

Figure 3-6. Checklist for HR Support Repatriation Repatriation refers to the process of reintegrating an employee back into the home country after an international assignment. Preparation should begin at least six months prior to the return of assignees and their family and may include counseling, reverse culture training and career coaching. HR may want to provide special recognition through newsletters, e-mail or at organizational events. This attention shows assignees they are valued and also reinforces the value placed on the international experience. In addition to the emotional considerations for repatriation, there are tasks related to relocation decisions and benefit changes. HR should identify any gaps before assignees begin their next assignment and manage these tasks for a smooth transition.

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Section 3.3: Creating a Positive Work Environment

Creating a Friendly Workplace Environment Esprit de corps is a concept meaning a common spirit of camaraderie, enthusiasm and devotion among the members of a group. Think about your own work environment. Is there a spirit of enthusiasm? If not, are there ways in which you can create a friendly workplace environment? According to Adrian Gostick and Chester Elton who wrote The Orange Revolution, “If people are having fun together, they’re going to work harder, stay longer, maintain their composure in a crisis and take better care of the organization. And that leads us to one of the ways great teams succeed: They lighten up and enjoy the process” (Gostick and Elton 2010). There are ways in which HR can incorporate an esprit de corps throughout the workplace. Your workplace culture, budget and the goal of the events will drive what works. Here are several ideas according to Gostick and Elton: 

Provide an on-site gym where employees can interact as well as exercise.



Sponsor trips and events such as attending football games, group picnics, and sponsored organization outings.



Nominate colleagues for special recognition.



Include “employee of the month” awards for outstanding performance.



Send e-cards to recognize who colleagues demonstrate organization guiding principles and core competencies.



Send a balloon bouquet for a special event.



Allow an employee to use a coveted parking spot for a week. (Gostick and Elton 2010)

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Section 3.3: Creating a Positive Work Environment

Event Planning As an HR professional, you may be tasked to organize and plan an organization event. Whether it is a holiday party, luncheon or employee recognition dinner, you will want to plan for safety and success. Regardless of the event, ask yourself these questions to help guide your planning efforts: 

Would the theme or timing of the event offend employees?



What is our organization’s policy on serving alcohol?



What are we trying to accomplish with the event?



Does the event support our organization’s values?



How can we promote employee involvement in the event-planning process?



What liabilities, including safety, should we evaluate when planning this event?



Is this event supported by organizational leaders?



What is the budget for the event?

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Section 3.3: Creating a Positive Work Environment

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Module 3: Employee Relations and Communication

Section 3.3: Creating a Positive Work Environment

3.4: Managing Employee Behavior Issues This section covers the following information from the Body of Knowledge: Behaviors: 05. Respond to employee’s questions or concerns about workplace issues (for example, employment concerns, company HR policies, complaints, retirement questions, payments) 06. Enforce HR policies and procedures (for example, explain and make sure that employees comply with the employee handbook) Skills & Knowledge: 04. How to handle conflicts (for example, addressing the problems of individual employees and knowing when to involve senior staff) 06. Issues of behavior in the workplace (for example, absences, discipline, workplace violence, or harassment) 07. Methods for investigating complaints or grievances

Section 3.4: Managing Employee Behavior Issues Introduction ..................................................................................................................................97 Discipline Process .........................................................................................................................97 Performance Problems ..............................................................................................................103 Investigate the Performance Issue ............................................................................................103 Conduct the Performance Meeting ...........................................................................................104 Take Corrective Actions...........................................................................................................104 Document Results ....................................................................................................................104 Complaint Review, Investigation and Resolution ...................................................................107 Complaint Review ....................................................................................................................107 Investigating a Complaint ........................................................................................................107 Alternative Dispute Resolution Process and Procedures .........................................................110 Dealing with Workplace Violence ...........................................................................................111 Escalating Issues ......................................................................................................................113 Managing Employee Conflicts ..................................................................................................113 Interpersonal versus Task Conflicts .........................................................................................113 The Cultural Components of Conflict ......................................................................................116 Handling Employee Terminations ...........................................................................................117 Types of Terminations .............................................................................................................117 HR Responsibilities with Termination Activities ....................................................................120 Exit Interviews .........................................................................................................................120

Module 3: Employee Relations and Communication

Section 3.4: Managing Employee Behavior Issues

Introduction Organizations have rules that define and govern the expectations and conduct of both management and employees. Sometimes laws define and regulate what is acceptable and what is not acceptable. When the rules are not followed, organizations must rely on discipline processes to encourage employees to behave sensibly and to discourage unwanted behavior. For HR, having a discipline process in place helps guide the course of action when issues arise. While it is impossible to anticipate every employee issue, HR professionals who understand the basic concepts will know how to diffuse issues, manage the employee relationship and formulate fair outcomes. This section examines the following: 

Discipline processes



Processes for complaint review, investigation and resolution



Performance problems



Methods for managing employee conflicts



Handling employee terminations

Discipline Process In the context of HR, discipline is not punishment; rather, discipline refers to the methods of management used to communicate and enforce appropriate workplace behavior. Applying discipline in HR means clearly communicating to an employee four important elements of information:



Employee’s behavior or performance is not acceptable.



Employee’s behavior or performance must change.



Describe standards of behavior or performance expected or required.



Potential consequences should the behavior or performance not change.

Module 3: Employee Relations and Communication

Section 3.4: Managing Employee Behavior Issues

Informal discipline usually involves verbal communication or written documentation that is not kept in the employee’s file. More formal forms of discipline usually involve more detailed documentation and mutual acknowledgement that the discipline has in fact been clearly communicated and understood. In all cases, the goal of discipline is to change behavior for mutual benefit, not to punish. Progressive discipline refers to a strategy of increasing the consequences when an employee fails to change his or her inappropriate behavior. Plus, it also means that the discipline applied should fit the seriousness of the situation. Because progressive discipline requires systems and processes that are predetermined, clearly articulated and applicable to all employees, progressive discipline is seen to be fair, not arbitrary. The ultimate consequence of discipline is the termination of employment. If, however, the organization has followed and applied a progressive discipline process, the positive outcome is that the organization’s culture will value the fair and respectful treatment provided to the employee, and in most cases the organization will be able to defend its actions if the matter were eventually challenged from a legal perspective. A fair and just discipline process is based on three pillars as illustrated in Figure 4-1.

Module 3: Employee Relations and Communication

Section 3.4: Managing Employee Behavior Issues

Figure 4-1. Elements of a Discipline Process (Dessler 2008) Each pillar is described in more detail in the sections to follow. Clearly Defined Rules and Regulations When an employee is hired, he or she should review and agree to the organization’s rules, policies, procedures and code of conduct. Rules and policies should be clearly defined along with terms that could be misinterpreted. Terms such as “poor performance” and “gross misconduct” may require additional definitions. For some issues such as absenteeism, it is worth the effort detailing the organization’s policy and various procedures, so employees can differentiate between paid time off, sick days, vacation days and unplanned absences. A 2010 study conducted by Kronos/Mercer found that unplanned absences cost employers a large part of their payroll budgets each year. Here are two statistics from the study: 

The total costs of all major absence categories, including direct and indirect costs, average 35% of base payroll. These costs range from 29% for exempt employees, 36% for nonexempt salaried, 39% for nonunion hourly and 38% for union hourly.

Module 3: Employee Relations and Communication



Section 3.4: Managing Employee Behavior Issues

Incidental unplanned absences also result in the highest net loss of productivity per day: 19% versus 13% for planned absences and 16% for extended absences (Kronos Incorporated 2010).

Proper attendance management begins with clearly, defined policies and centralized, sophisticated record keeping to eliminate favoritism, lax standards and compliance issues. When defining attendance and absenteeism rules, HR may want to include the following in policy manuals or employee handbooks: 

Expectations for employee attendance



Definition of absenteeism



Standards for lateness and absences



Procedures for unplanned absences



Attendance incentives



Laws related to attendance and hours worked

To supplement written policies and employee handbooks, HR may offer supervisor training for managing employee attendance. For more information on creating and implementing rules and regulations in the workplace, see Section 3.2: Laws Affecting Employee and Labor Relations. System of Progressive Consequences A system of progressive consequences is the second pillar of effective discipline. To ensure fair and equitable management practices, follow a progressive approach to discipline. The approach may include a range of actions as outlined below: 

Coaching or counseling: Efforts are made to ensure the employee is clear on what is expected.



Retraining: Sometimes training can help employees correct the problem.



Verbal warning: A verbal warning serves as a notice of the specific acts for which the employee is being reprimanded. Documenting the verbal warning is always good practice.

100

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

Section 3.4: Managing Employee Behavior Issues

Written warning: A written warning documents the history of the problem and the previous actions taken by the employer. A written warning should state the consequences of an additional violation. The employee should sign the warning.



Suspension: In most cases you should suspend an employee before terminating an employee. Sometimes suspension is also referred to as last chance agreement (LCA). Suspension is evidence the employee was aware of the criticality of his or her offense. Suspension actions should be documented and stipulate the employer has grounds to terminate. An example of a suspension notice is provided in Figure 4-2.



Termination: At this point in the progressive penalty process, the employee is choosing not to comply, and the employer is following protocol. A termination session may be required and will necessitate detailed planning. (Muller 2009)

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Figure 4-2. Example of a Suspension Form (Society for Human Resource Management, Discipline: Notice of Suspension 2010) Formal Appeals Processes In addition to clearly stated rules and progressive consequences, the disciplinary process should have an appeals procedure. Through an appeals process,

102

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employees have the opportunity to challenge information used to issue disciplinary action. The purpose of this process is to offer insight into other circumstances that may have contributed to the employee’s performance or conduct issues (Dessler 2008).

Performance Problems An employee stealing from an organization is a different issue from an employee with poor performance. Handling a performance improvement situation works best when the HR department and line managers work together. A manager may not always perceive an employee’s behavior accurately, and the HR department can provide an impartial view of the circumstances and help the manager prepare for and conduct a performance improvement meeting. Corrective action for performance problems should not be thought of as punitive in nature. It is an opportunity to correct unacceptable behavior and to reestablish the relationship between the employee and the organization. By taking corrective action early, an employee can improve performance, stay with the organization and become a valued member of the organization.

Investigate the Performance Issue Thorough investigations begin the process and precede corrective actions. During the investigation, an HR representative and the line manager should talk with witnesses and gather the relevant facts and specific details. They should also review any related files and documents. It is important to maintain objectivity and to keep the details of the investigation private and confidential.

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Conduct the Performance Meeting Conduct a performance meeting in a quiet, private location with no interruptions. Bring relevant information related to previous problems or actions. When conducting the meeting, do the following: 

Present the facts in a straightforward fashion.



Clarify the specific performance issue and its significance to the organization.



Give the employee a chance to explain his or her performance and explore the reasons for the unacceptable performance, but do not argue with the employee.

The focus of the first part of the meeting should be discussing the existing situation and explaining how it violates the performance and behavior standards of the job.

Take Corrective Actions The second part of the meeting should address corrective actions. The employee must understand that the current performance is unacceptable, that the behavior must change, and that negative consequences will occur if the behavior does not change. The manager and the employee should work together to develop and agree to a corrective action plan. The plan should include provisions for follow-up or monitoring of progress. The employee should also be advised of the organization’s appeal process.

Document Results After the meeting, document corrective actions. Be sure to include the following: 

Outline organizational expectations. Supervisors should document specific expectations, so employees understand what is required of them.

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

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State specific changes employees need to make. Outline the conduct that needs to change. Focus on the behavior, not the person.



Include the employee’s story. There are always two sides to a story. Good documentation records both the employee’s side and the supervisor’s side of a situation.



Outline a plan. Effective documentation maps out specific goals and how the employee is going to achieve them. The case is reviewed for potential exceptions to employment at will and potential tort or other liability.



List possible consequences if improvements are not made. Specifically state the possible consequences if the employee fails to make the necessary improvements.



Establish a time frame. Managers should use a realistic time period when creating a timeline for improvement.



Follow up on documentation. Use follow-up sessions to gauge progress, to offer feedback, and to make additional recommendations for continued improvement.

A performance improvement plan (PIP) may be developed as a part of the performance improvement meeting. The manager, with input from the affected employee, develops a plan that will help the employee attain the desired level of performance. Figure 4-3 provides an example of a format for a performance improvement plan.

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Figure 4-3. Example of a Performance Improvement Plan Format (Society for Human Resource Management n.d.)

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The manager’s supervisor and the human resources department should review the plan to ensure consistent and fair treatment of employees across the organization. The supervisor will monitor the plan and provide feedback to the employee.

Complaint Review, Investigation and Resolution HR should treat all their employees equitably and fairly. Disciplinary procedures should ensure that employees have the opportunity to explain and defend their actions against charges of violation or misconduct. Complaint and disciplinary procedures should be conducted in a private manner. Disciplinary actions are never a simple matter. There may be a combination of factors in addition to the specific violation that warrant careful consideration. Concerns about protected classes and workers’ compensation are only a few examples.

Complaint Review When an informal or formal complaint is made, the employer should take immediate steps to stop the alleged conflict, protect employees involved and begin investigations. Under many laws, employers are legally obligated to investigate certain complaints, such as workplace violence, in a timely manner. Responsiveness to a complaint and an investigation will not only yield the best information and evidence, but it will also enhance both the investigator’s and the employer’s credibility (Society for Human Resource Management, How to Conduct an Investigation 2010).

Investigating a Complaint The following steps are part of a thorough investigation and should begin as soon as the employer receives a verbal or written complaint. The severity of the complaint will determine the scope of investigation.

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Step 1: Ensure confidentiality: The employer should explain to all those involved in the investigation that all information gathered will remain confidential to the extent required for a thorough investigation. Step 2: Provide interim protection: If there are security issues related to the complaint, actions should be taken to protect all those at risk of harm. Step 3: Select the investigator: HR is the most common choice but can only be effective if HR professionals possess the following skills: 

Ability to investigate objectively



Interpersonal skills for building rapport with the parties involved



Ability to pay attention to details



Ability to maintain confidentiality



Respect of employees



Understanding of the law and the organization’s policies and procedures

Step 4: Create a plan for the investigation: The type of the complaint will drive the plan for investigation. A complete plan should include an outline of the issue, the development of a witness list, sources for information and evidence, interview questions targeted to get crucial information and details and a process for documentation. Step 5: Develop interview questions: Good questions are relevant and designed to draw out facts without leading the interviewee. Questions should be openended to elicit as much information as possible.

Step 6: Conduct interviews: The investigator should remain objective throughout the interviews. The investigator should avoid pushing the investigation in any particular direction and should never offer any opinions. During the interviews, the investigator should take notes.

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Step 7: Make a decision: The investigator, members of management and legal counsel, if necessary, should make the final determination of any employment actions that are warranted based on the investigative report. In the final determination, the employer must consider all parties involved as well as the organization’s processes, not just whether the accused is at fault. Step 8: Close the investigation: Once a decision is made, the employer should do the following: 

Notify both the complaining employee and the accused of the outcome.



Take corrective action that is appropriate to the situation, such as discipline or even termination.

Step 9: Develop written summary investigation results: HR should operate on the premise that every investigation of a serious nature could potentially be reviewed by a court. With this mindset, HR should keep accurate documentation and evidence (Society for Human Resource Management, How to Conduct an Investigation 2010). Employee Monitoring Many countries and regions have laws that regulate monitoring and seizing any wire, oral or electronic communications. For example, in some countries, the law requires employers to obtain written consent or provide notification to employees that e-mails may be monitored. Be sure your organization includes policies and procedures on monitoring employee communications and that these policies are understood by employees. These policies should cover the following topics: 

Telephone practices and voice mail



Internet use, including accessing private e-mail accounts and websites while at work



Workplace searches



Surveillance

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Alternative Dispute Resolution Process and Procedures Alternative dispute resolution has developed as a way to prevent the escalation of actions, like discipline and termination, into lawsuits. The purpose of alternative dispute resolution (ADR) is to provide employers and employees with a fair and private forum to settle workplace disputes. In the last several years, ADR has gained popularity, because it often reduces the number of simple disagreements that could wind up in court or in formal arbitration. Using ADR processes, organizations can diffuse and resolve disputes and ultimately avoid bad feelings, high turnover and costly litigation. Figure 4-4 outlines several ADR strategies. ADR Strategy Open-door policy

Description Employees have the opportunity to meet with supervisors and managers to discuss issues.

Third-party

A neutral third party, from inside or outside the

investigations

organization, confidentially investigates workplace complaints and proposes resolutions.

Peer review

A panel of employees, or employees and managers, works together to resolve employee complaints.

Arbitration

A process in which a neutral third party, after reviewing evidence and listening to arguments from both sides, issues a decision to settle the case. Figure 4-4. ADR Strategies

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Arbitration If the organization determines that arbitration is the best dispute resolution strategy, HR should work to ensure arbitration is perceived as a helpful tool for resolution and not as a corporate strategy for suppressing troublemakers. A fair program should include an arbitrator whom all parties see as neutral and fair. In many cases, arbitrators can award whatever relief would be available to the involved parties if they were to settle the dispute in court, including compensatory and punitive damages, back pay and reinstatement. The arbitrator should provide a written opinion and include a summary of the dispute, damages and other relief awarded, and a statement about the disposition of any statutory claim (Society for Human Resource Management 2001). Know the Law Remember that methods of dispute resolution such as grievance procedures may be defined in collective bargaining agreements, and while arbitration may be used to resolve some conflicts, it does not preclude legal action in some countries. In the United Kingdom, the Employment Act of 2002 describes statutory grievance and disciplinary procedures. Failure to comply with its requirements can result in a finding of unfair termination and an increase in compensation awarded. Attempts at conflict management must be conducted within these legal restrictions.

Dealing with Workplace Violence The definition of workplace violence varies and often includes any physical assault, threatening behavior or verbal abuse that occurs in the work setting. Examples of workplace violence include but are not limited to the acts listed below:



Psychological trauma due to threats



Obscene phone calls



An intimidating presence and harassment of any kind

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

Acts that result in damage to company resources or capabilities



Assaults, threats or other actions by outside parties with whom employees have relationships and that occur at the workplace

To reduce liability and to maintain safe work environments, organizations must comply with related laws and know what preventive measures are necessary and what actions are required when a violent act occurs. HR’s Response to Workplace Violence The law and the organization’s policies will determine how to respond to workplace violence. Responses range from immediate termination to counseling to warnings. The following list provides ways in which HR can respond to violent incidents: 

Provide counseling for victims.



Provide debrief session for employees.



Provide counseling for employees not directly involved in the incident.



Allow employees to take a leave of absence.



Institute new policies to prevent future acts of violence.



Provide counseling for the victim’s family.



Provide counseling to the aggressor/assailant.



Aid employees in job relocations.

Following a violent incident, HR may need to adjust organization policies, procedures and security measures in order to prevent another incident. Depending on the incident, HR may also want to institute the following preventive measures: 

Arrange access control on a regular basis. It can take various forms, including sign-in sheets and surveillance.



Communicate to employees the reason for security procedures and that precautions extend to even persons familiar to the employer, such as an employee’s family members or friends.

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

Section 3.4: Managing Employee Behavior Issues

Identify to all employees the point person or office for communicating any potential workplace violence, threat or concern (Society for Human Resource Management, Dealing with Violence in the Workplace 2012).

For more information on maintaining a safe work environment, please see Module 6: Health, Safety and Security.

Escalating Issues HR professionals need to know what they can solve themselves and what must be referred to a higher authority. For example, workplace violence issues are serious offenses and should be handled by more senior personnel. In these instances, it is important to have an escalation process in place and to know when to contact more senior personnel, the organization’s leadership, security, law enforcement and other resources that can help you respond appropriately and prevent liabilities.

Managing Employee Conflicts It is inevitable: conflicts arise at work. And when they do, parties involved usually turn to HR professionals for their expertise and guidance. HR should use the framework of law, policies and procedures to mediate disputes and act in consultative manner. In managing conflict, it is crucial to first understand the source of the conflict. Is the source based on clashes of personality and style, differences in vision and procedure or a cultural misunderstanding? Most conflicts can be categorized as interpersonal or task conflicts, also referred to as work-related conflicts.

Interpersonal versus Task Conflicts The word conflict is laden with negative connotations, but many organizational experts believe that conflict is not uniformly bad. In the study Types of

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Intragroup Conflict and Affective Reactions, Francisco Medina and his colleagues distinguish between relationship or interpersonal conflict and task conflict. The two conflict types are illustrated in Figure 4-5.

Figure 4-5. Types of Conflict (Medina, et al. 2005) The difference between these types of conflict suggests that to arrive at the best conflict resolution approach, one must first thoroughly understand the source of the conflict. Consider the case study outlined in Figure 4-6.

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Case Study: Employee Conflict Background

Two members of a global product development team end

information

every team meeting locked in conflict. The team leader assumes that some of their differences come from their disciplines: One is an engineer and tends to think in a logical, step-by-step manner, while the other is a designer, known for an intuitive understanding of the relationship between aesthetics and user interfaces. They bring distinctive experiences to the team.

The conflict

They have each been involved in different projects that tried different strategies with different levels of success, and they now have definite opinions about what works and what doesn’t. However, they also just don’t like each other. One seeks risk, while the other avoids it. One displays emotions openly, while the other appears dispassionate.

The

Realizing the two levels of conflict, the team leader

intervention

approaches each member separately and talks about their different styles as something that can’t be changed but that can be controlled through some ground rules. During meetings, the team leader acts quickly when an interpersonal conflict arises, reminding the team members of the ground rules and directing them to the more productive aspects of their disagreement and the pros and cons of the approaches each is proposing. Figure 4-6. Case Study: Employee Conflict

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Even when a conflict involves just a task, a certain amount of investigation is required to determine the actual disagreements and to find common ground.

The Cultural Components of Conflict Cultural differences and misunderstandings drive many conflicts for organizations with a global presence. Even when the roots of a conflict are related to personality, the resolution of the conflict can be complicated by cultural differences. Different cultural norms can prevent managers and employees from recognizing conflicts. Understanding cultural differences can help HR and those involved find an approach that leads to resolution. Consider the following: 

Cultural differences in values and perceptions: For example, a manager from a more task-oriented culture is assigned to a subsidiary in a country with a more holistic, relationship-oriented culture. Problems immediately result as the manager quickly proposes new and completely different processes. His colleagues resist implementing the new processes.



Cultural prejudices: Conflicts may derive not from any personal differences or specific events but from attachments to specific groups, such as religious, ethnic or clan groups. These conflicts can occur between members of a workplace that appear completely homogenous to an outsider.



Cultural attitudes toward conflict: In a high-context culture, maintaining dignity can complicate the resolution of conflict. For example, consider a situation in which two members of a cross-cultural team come from countries with different contextual needs such as high- and low-context cultures. The team member from the low-context culture continually interrupts and corrects the team member from the high-context culture, who is offended but says nothing. The first team member is not aware of the problem until a third party points it out. Then this team member makes matters worse by bringing the issue up in front of the entire group and apologizing, thus embarrassing the team member from the high-context culture.

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

Section 3.4: Managing Employee Behavior Issues

Using the wrong conflict resolution technique: HR professionals should become aware of the cultural filters that may influence their own choice of conflict resolution methods. For example, an HR professional from a culture with few differences between male and female roles needs to recognize that women from cultures with significant differences in gender roles may not want to participate in dispute resolution that requires open discussion of problems. Similarly, inviting employees in conflict to discuss their differences in an equal manner may work in an individualistic society but not in a collectivist culture. An effective mediator may need to be assertive and powerful.

Many forms of alternative dispute resolution (ADR) involve impartial intermediaries or observers. Some experts have noted that neutral outsiders are more effective in Western cultures. However, a rational dissection of a dispute may be seen in an Arab culture as dismissing the emotional dimension of the conflict. In this context, a partial insider may be more appropriate, someone both sides know and trust (Leeds 1997).

Handling Employee Terminations Types of Terminations Employment relationships, like any other type of relationship, sometimes come to an end. This section deals with issues related to the termination of employees. Whether voluntary or involuntary, it is important that terminations are conducted legally, with sensitivity, and that the rights of the employees and the organization are upheld. Terminations generally fall into two categories: involuntary and voluntary. Involuntary Terminations For cause terminations: For cause terminations occur when an employer discharges a particular employee because of things the employee has done wrong.

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Four common reasons for discharge are poor performance, attendance problems, violations of organizational policies and serious misconduct. Legal cause is a very specific application of the broader concept of cause. Whereas the word and concept of “cause” can simply mean “to have a reason,” to have legal cause actually means that the reason must fit within a very specific and legally defined group of actions or behaviors, often quite serious in nature. Frequently in employment contexts, the word “cause” is used without including the preface legal. In all cases, care needs to be taken to ensure that the proper interpretation and application of the word “cause” is being used and that the definition is not simply assumed to be understood. The following items may qualify as termination for cause: 

Breach of a fiduciary responsibility



Disclosure to unauthorized persons of proprietary information regarding the business or operations of the organization



Failure to report to or perform work for any significant period of time



Willful misconduct or gross negligence in the performance of duties



Willful and repeated refusal to perform duties that have been delegated or assigned



Commission of a crime resulting in loss to the organization, including theft, embezzlement, fraud or commission of any felony that brings the organization into public disgrace

No fault terminations: Another type of involuntary termination occurs when employees are dismissed due to no fault of their own. Common reasons for such terminations include the following:



Mergers and acquisitions



Downturn in business



Organization goes out of business



Reorganization or restructuring



Financial difficulties

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

Plant obsolescence or relocation



Technological developments

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Possible alternatives to labor reductions include asking employees to sustain pay cuts or to accept a reduced work schedule or offering voluntary retirement with additional benefits. Constructive Dismissal Constructive dismissal (also known as constructive termination or constructive discharge) is an important legal concept for HR practitioners to understand. While not all jurisdictions have this law or precedent, it remains an important HR concept to know in terms of employee morale and motivation. A constructive dismissal may occur when the employer changes the employee’s work or work environment in a fundamentally negative manner so as to have breached the terms and conditions of the original undertaking of employment. To be valid the change must be applicable in a legal sense, not simply based on the employee’s own personal interpretation of unfairness or harassment. To be initiated, constructive dismissal usually requires that the employee resign shortly after the change in his or her work or workplace has occurred in order to validate and acknowledge that a breach of contract has occurred. Legally or motivationally constructive dismissal is a significant HR concept because it has the potential to create numerous unintended consequences. From a legal and financial point of view, a constructive dismissal may trigger expensive severance packages, wrongful dismissal claims and extended legal conflicts. From a motivational point of view, employers need to be aware that arbitrary or wilfully fundamental changes in employment conditions can often have a serious demotivational effect on employees. Examples of actions by an employer that may trigger a constructive dismissal include the following: arbitrary demotions, reassignment to a remote geographic

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work location, harassment, bullying or humiliation and unilateral changes of substance to the terms or conditions of employment. Voluntary Terminations Resignations: An employee may decide to leave for better pay or career opportunities, to relocate, to return to school or to retire. The organization may request but generally should not require that resigning employees give a minimum amount of notice. Employers may decide to give pay in lieu of fulfilling the notice period when there are good reasons to do so, such as cases when the employee is not trusted to stay at the organization. Job abandonment: Job abandonment occurs when an employee fails to call in or report to work for a period of time.

HR Responsibilities with Termination Activities While each employee’s direct manager is usually responsible for the termination action, HR must help support lawful terminations by providing coaching and counseling to the manager and by ensuring the following is in compliance: 

Is documentation of the situation in accordance with related laws?



Are wages and compensation decisions in compliance with related laws?



If eligible, is the employee aware of any opportunities to continue in the organization-provided health insurance plan and other benefits at the employee’s own cost?



Are employee references provided in accordance with organizational policy?

Exit Interviews For the organization, the exit interview is a valuable source of information about the employment experience. It is also used to handle administrative issues, such as delivery of the final paycheck and collection of organizational property, and gives management a chance to address employee questions.

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The timing of the meeting is important. While some employees discharged for cause should attend an exit interview immediately after notification of termination, it depends on the reason for termination. Most organizations do exit interviews only in connection with voluntary termination. These interviews are typically conducted on the employee’s last or next-to-last day. The interview is best conducted by a neutral party who is not in the employee’s chain of command. Employees are more likely to provide candid input if they know that their comments will be kept confidential or anonymous. The employer should make the effort to treat the exiting employee with compassion and respect. The manner in which the severing of the employment relationship is conducted can have a huge impact on how the employee copes with the termination and whether or not the employee chooses to sue the employer. Protecting Your Organization’s Reputation Disgruntled employees may spread negative misinformation that can damage an organization’s reputation, especially after a termination. Social media is sometimes the outlet for an employee’s anger, which consequently may prevent new talent from considering employment at your organization. Websites such as Hallway.com, Jobitorial.com and Glassdoor.com allow people to anonymously share salary details about specific jobs or talk about the interviewing and hiring experience. HR should be aware of the negative impact but should also consider the feedback as another way to reevaluate practices and to improve employee relations (Overman 2010). You have completed Module 3: Employee Relations and Communication. Next, if you feel ready, go to the Online Learning Center and check your knowledge by completing the Case Studies, Module 3 Practice Test and the Cumulative Practice Test. Also try the Terminology Quiz to check your knowledge of terminology.

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Rosinski, Philippe. Coaching Across Cultures: New Tools for Leveraging National, Corporate and Professional Differences. Yarmouth, Maine: Nicholas Brealey Publishing, 2003. Society for Human Resource Management. "Benefits Choices: Educating the Consumer." March 1, 2011. http://www.shrm.org/Publications/hr magazine/EditorialContent/2011/031 1/Pages/0311robb.aspx (accessed August 31, 2012). —. "Dealing with Violence in the Workplace." April 10, 2012. http://www.shrm.org/TemplatesTool s/Toolkits/Pages/DealingWithViolen ceintheWorkplace.aspx (accessed September 24, 2012). —. "Developing a Social Business Network." October 1, 2010. http://www.shrm.org/Publications/hr magazine/EditorialContent/2010/101 0/Pages/1010roberts.aspx (accessed August 31, 2012).

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Varelas, Elaine. "Communication 101: Reviewing the Golden Rules of HR Communication." Boston.com. May 12, 2008. http://www.boston.com/jobs/hire_aut hority/051208.shtml (accessed August 31, 2012). Watson Wyatt . Communicating With Employees During the Current Financial Crisis. Watson Wyatt Worldwide, 2008. Watson Wyatt. Communication ROI Study Report. Watson Wyatt Worldwide, 2009/2010.

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World Intellectual Property Organization. What Is a Trade Secret? http://www.wipo.int/sme/en/ip_business/trad e_secrets/trade_secrets.htm (accessed August 31, 2012). —. What Is Intellectual Property? http://www.wipo.int/about-ip/en/ (accessed August 31, 2012). World Trade Organization. Intellectual Property: Protection and Enforcement. 2011. http://www.wto.org/english/thewto_e/whatis _e/tif_e/agrm7_e.htm (accessed August 31, 2012).

Woodward, Nancy Hatch. "Doing Town Hall Meetings Better ." HR Magazine, 2006.

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Module 3: Employee Relations and Communication

Index

Index absenteeism ............................................... 99

cross-cultural communication ....... 15, 19, 21

alternative dispute resolution .......... 110, 117

cross-cultural working teams .................... 21

amending contracts ................................... 50

cross-generational communication strategies ............................................................... 77

anti-discrimination, harassment and fair work laws .................................. 42, 46–47

cultural styles ............................................ 19

arbitration .................................... 52, 110–11

dimensions of cultural variability ............. 85

code of conduct ................................... 66, 99

discipline process ................................ 97–99

collective agreements .......................... 41, 50

emergency plan ......................................... 12

collective labor law ................................... 40

employee action committees ..................... 76

communicating ... 5, 6, 11–12, 15, 18, 20, 26, 65, 97, 113 abroad .................................................... 90 benefits .............................................. 5, 11 human resource information systems (HRIS) ............................................... 26 policies and procedures ......................... 66 social media ........................................... 29 virtual team meetings ............................ 27

employee affinity groups .......................... 88

communication methods ........................... 22 communication strategies................ 6, 76–77 compensation and benefits laws.......... 42–43 complaint review ..................................... 107

employee assistance and employee development programs .......................... 87 employee communication ............... 8, 25–26 employee conflicts .................................. 113 employee contracts.................................... 49 employee engagement ................... 36, 72–75 across cultures ....................................... 18 action committees .................................. 76 engagement barriers .............................. 75 engagement drivers ............................... 74 levels of employee engagement ............ 73

corrective actions ............................ 103, 104

employee feedback.................................... 31 accessible leadership ............................. 33 collection mechanisms .......................... 31 exit interviews ....................................... 33 focus groups .......................................... 32 management lunches ............................. 32 management visits ................................. 33 suggestion systems ................................ 32 surveys ................................................... 31

counseling ........................... 87, 91, 112, 120

employee handbook .................................. 66

concierge services ..................................... 87 conflict resolution ........................... 114, 117 constructive dismissal ............................. 119 contracts ............... 11, 20, 40, 42, 49–51, See

126

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employment agreements ........................... 40

Index

event planning ........................................... 93

compensation and benefits law ............. 43 employment law .................................... 42 intellectual property laws ................ 42, 47 international human rights and labor standards ............................................ 53 occupational health and safety laws 42, 46 taxation ............................................ 55, 60 trade agreements and treaties ................ 55 unions .................................................... 53 visas and work permits .......................... 58

exit interviews ................................... 33, 120

leave of absence ................................ 88, 112

family assistance programs ....................... 87

long term assignment ................................ 57

flexible work arrangements....................... 88

low-context culture ............................. 19–20

focus groups .............................................. 32

managing employee conflicts ................. 113

friendly workplace environment ......... 78, 92

maternity leave .......................................... 39

general employment law ........................... 40

newsletters........................................... 23, 26

global mobility .................................... 56, 60

occupational health and safety laws .. 42, 44– 46

employment contracts ............................... 42 employment law .................................. 40–42 equal employment opportunity ................. 44 ergonomics program ................................. 88

high-context culture .......................... 20, 116 human resource information systems (HRIS) ............................................................... 26 implied contracts ....................................... 50 intellectual property (IP) laws ................... 47 international assignees ........................ 52, 89 interpersonal conflict ........................ 114–15 investigation ........ 107, See complaint review investigations .................................... 65, 103 involuntary terminations ......................... 117 job abandonment ..................................... 120 laws .... 23, 39–47, 51, 52, 60, 62, 65–66, 89, 97, 100, 107, 109, 112, 120 anti-discrimination, harassment and fair work laws ............................... 42, 46–47 © 2012 SHRM

onboarding practices ................................. 79 organizational polices and employee relations ................................................. 62 codes of conduct .................................... 66 policies and procedures manual ............ 66 statements of understanding .................. 66 performance problems ............................ 103 alternative dispute resolution .............. 110 arbitration ............................................ 111 corrective actions................................. 104 investigations ....................................... 103 performance meeting ........................... 104 performance problems ......................... 105 policies and procedures ....................... 62–67 essential content .................................... 64 manual ................................................... 66 positive workplace culture ........................ 78 relocation............................. 57, 91, 112, 119

127

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repatriation ................................................ 91

Index

resignations ............................................. 120

unions .................................................. 41, 53 across borders ........................................ 61 agreements and contracts ...................... 51

reward and recognition programs . 78, 80–82

Unions Across Borders ....................... 61–62

short term assignment ............................... 57

unions. ....................................................... 51

sick leave ............................................. 41, 72

vacation leave............................................ 41

social media ........................................ 22, 29

visas and work permits.............................. 58

statements of understanding ...................... 66

voluntary terminations ............................ 120

surveys .............................. 10, 29, 31, 34, 76

wellness programs ..................................... 88

terminations............................... 117–18, 120 constructive dismissal ......................... 119 involuntary terminations ..................... 117 job abandonment ................................. 120 no fault terminations............................ 118 resignations.......................................... 120 termination for cause ........................... 118 voluntary terminations......................... 120

work counsels...................................... 41, 61

trade agreements and treaties .................... 55

work/life balance programs..... 74, 78, 86–89 workplace violence ............. 66, 107, 111–13 access ................................................... 112 communicating procedures ................. 113 counseling............................................ 112 escalating issues .................................. 113 HR’s response to workplace violence . 112 liability ................................................ 112

trade secrets ............................................... 48

128

Module 4: Compensation and Benefits Module 4: Compensation and Benefits ...................................................................................... iii Acknowledgements ......................................................................................................................v Module 4 Body of Knowledge ................................................................................................... vi Purpose Statement ................................................................................................................................ vi Body of Knowledge ............................................................................................................................. vi

Section 4.1: Total Rewards............................................................................................................3 Introduction ..................................................................................................................................4 Goals of the Total Rewards System .............................................................................................6 Mission and Strategy............................................................................................................................. 6 Corporate Culture.................................................................................................................................. 8 Workforce ............................................................................................................................................. 9 Equity Issues ......................................................................................................................................... 9

Compensation and Benefits Strategy .........................................................................................13 Job Evaluation ..................................................................................................................................... 13 Salary Surveys .................................................................................................................................... 15 Communicating to Employees ............................................................................................................ 17 Evaluating Effectiveness of the Total Rewards Strategy .................................................................... 19

Compensation and Benefits for International Assignments .......................................................19 Long-Term Assignments..................................................................................................................... 20 Short-Term Assignments .................................................................................................................... 21 Commuter Assignments ...................................................................................................................... 23 Trade Agreements and Treaties .......................................................................................................... 25

Section 4.2: Compensation ..........................................................................................................29 Introduction ................................................................................................................................30 Designing a Compensation System ............................................................................................30 Job Analysis ........................................................................................................................................ 31 Job Documentation ............................................................................................................................. 35

Job Evaluation ..................................................................................................................................... 40 Developing a Pay Structure................................................................................................................. 43

Compensation Systems ..............................................................................................................46 Base-Pay Systems ............................................................................................................................... 46 Pay Variations ..................................................................................................................................... 50 Pay Adjustments ................................................................................................................................. 53 Variable or Differential Pay ................................................................................................................ 55 Incentive Pay ....................................................................................................................................... 57 Pay Plans for Select Employees .......................................................................................................... 59 Payroll Function .................................................................................................................................. 62 Payroll Systems ................................................................................................................................... 64 Controlling Costs ................................................................................................................................ 66

Section 4.3: Benefits .....................................................................................................................71 Introduction ................................................................................................................................72 Deciding Which Benefits to Offer ...................................................................................................... 72

Types of Benefits .......................................................................................................................74 Benefits Needs Assessment ................................................................................................................ 74 Government Mandated Benefits ......................................................................................................... 78 Voluntary Benefits .............................................................................................................................. 82 Paid Time Off ..................................................................................................................................... 88 Work/Life Balance .............................................................................................................................. 90 Perquisites ........................................................................................................................................... 96 Metrics ................................................................................................................................................ 97

Trends in Benefits ......................................................................................................................99 Bibliography ...............................................................................................................................103 Index ............................................................................................................................................104

Acknowledgements SHRM acknowledges its volunteer leaders for their valuable contributions to the Universal HR Practices Learning System: Lead Subject Matter Expert Sameer Khanna, GPHR, HRMP Vice President and Head HR – Region India Ericsson India Pvt. Ltd New Delhi, India Subject Matter Experts Mohamed Boraei, MBA HRIS & Project Manager, Qatar Foundation Doha, Qatar

Timo Michel, HRMP HR Business Partner, HR International Deutschland, Germany

Brad Boyson, MSHRM, SPHR, GPHR, HRMP Executive Director, SHRM MEA Dubai, United Arab Emirates

Rachel Park Program Manager, Global Talent Acquisition, Mastercard Worldwide Singapore, Singapore

Diane M. Dowlin, SPHR, GPHR, CCP, GBA, CMS, CEBS International Human Resources Director, FIS Jacksonville, Florida

Patchara Popaitoon Researcher/Teacher/Lecturer, School of Management University of Bath Claverton Down, Bath, United Kingdom

Module 4: Compensation and Benefits

Module 4 Body of Knowledge For your convenience, the Body of Knowledge for Module 4: Compensation and Benefits is provided on the following pages.

Purpose Statement Purpose Statement for Compensation and Benefits: HR professionals in compensation and benefits should possess a combination of behaviors and skills/knowledge that include providing information about compensation and benefits to employees and about policies associated with time off/leaves. They also include developing and providing the information associated with salaries in the form of salary surveys and merit increases and/or bonus payments.

Body of Knowledge Below are lists of the behaviors and skills and knowledge required for mastery of content related to Module 4: Compensation and Benefits. Important behaviors for compensation and benefits: 01. Communicate information about an employee’s compensation package, when required 02. Communicate information about company benefits 03. Record information about employees in HR database (for benefits or tax purposes) 04. Provide information about payment to employees for working hours and non-working hours (for example, not working because of illness or vacation) 05. Administer salary adjustments

Module 4: Compensation and Benefits

06. Track eligibility for time off and temporary leaves (for example, maternity, mourning, unpaid leave) 07. Explain policies and procedures for taking time off and requesting leaves of absence 08. Coordinate activities to support employee programs (for example, programs to improve health, tuition reimbursement or educational assistance) 09. Coordinate the completion of salary surveys from external organizations 10. Report the results of current research and available information about salaries 11. Provide data for merit increases or bonus payments Important knowledge and skills for compensation and benefits: 01. Total compensation packages 02. Benefit programs (for example, health care plans and flexible benefits) 03. Retirement plans and programs 04. Salary surveys 05. Effects of laws and regulations on compensation and benefits 06. Company-wide compensation policies (for example, wage agreements with unions or work councils, employee categories and salary increases) 07.

Contracts with service and product providers (for example, health insurance and pension plans)

08. Bonus and incentive programs 09. Payroll processes 10. Leave and time-off allowances

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4.1: Total Rewards

This section covers the following information from the Body of Knowledge:

Behaviors: 01. Communicate information about an employee’s compensation package, when required 02. Communicate information about company benefits 04. Provide information about payment to employees for working hours and non-working hours (for example, not working because of illness or vacation) 07. Explain policies and procedures for taking time off and requesting leaves of absence 09. Coordinate the completion of salary surveys from external organizations 10. Report the results of current research and available information about salaries

Skills & Knowledge: 01. Total compensation packages 02. Benefit programs (for example, health care plans and flexible benefits) 04. Salary surveys 05. Effects of laws and regulations on compensation and benefits 06. Company-wide compensation policies (for example, wage agreements with unions or work councils, employee categories and salary increases) 09. Payroll processes

Section 4.1: Total Rewards Introduction ....................................................................................................................................4 Goals of the Total Rewards System ..............................................................................................6 Mission and Strategy ....................................................................................................................6 Corporate Culture .........................................................................................................................8 Workforce.....................................................................................................................................9 Equity Issues ................................................................................................................................9 Compensation and Benefits Strategy .........................................................................................13 Job Evaluation ............................................................................................................................13 Salary Surveys ............................................................................................................................15 Communicating to Employees ...................................................................................................17 Evaluating Effectiveness of the Total Rewards Strategy ...........................................................19 Compensation and Benefits for International Assignments ....................................................19 Long-Term Assignments ............................................................................................................20 Short-Term Assignments............................................................................................................21 Commuter Assignments .............................................................................................................23 Trade Agreements and Treaties ..................................................................................................25

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

Introduction This section examines the following: 

Goals of the total rewards system



Compensation and benefits strategy



Compensation and benefits for international assignments

Total rewards is the broadest concept that captures what employees receive in exchange for supplying their employment services to their employer. The two main categories of total rewards are often divided into their financial and nonfinancial components. Financial rewards can be categorized as direct (monetary) or indirect (benefits) forms of compensation, whereas nonfinancial rewards can include other important forms of employment incentives like work/life balance, career development and performance recognition. Total rewards is often differentiated from compensation alone due to the inherent emphasis compensation assigns to monetary or monetary-related rewards. From a motivational perspective it is generally accepted that nonmonetary benefits can offer equal if not greater incentives to attracting and retaining talent. Moreover, the concept of benefits alone does not fully capture or emphasize the increasing motivational importance of rewards like work/life balance, career development and performancerecognition. Nevertheless, this module emphasizes and focuses on compensation and benefits due to the central importance these two elements have in fundamentally effective HR administration. Compensation and benefits represent the essential foundation of an effective total rewards system; if the foundation is not being administered effectively, the subtleties of the other nonmonetary forms of reward will have significantly less impact.

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

Consideration is an important legal concept associated with the fulfillment of a contract. Consideration refers to anything of value that is exchanged to satisfy a contract. The most familiar form of value is money; however, legal consideration can take many nonmonetary forms, including physical items, services, actions and even inactions. A legally binding contract is itself often defined in terms of the three reinforcing steps or elements known as: 

Offer



Acceptance



Consideration

The compensatory notion of total rewards is closely associated with the legal notion of consideration. An effective total rewards system in an organization will be aligned with the organization’s mission, vision and values. A well-designed rewards system motivates employees to perform well, which is good for both the employees and the organization. 

Compensation refers to all direct rewards and tangible services, including the following: o Base pay, usually an hourly wage or a salary o Incentives, used to motivate employees by paying for performance above and beyond base-pay hours o Differentials, used to compensate employees who work during times or at locations that are less desirable than usual

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

Section 4.2: Compensation provides detailed information about compensation. Benefits are indirect rewards that employees receive by being a member of the organization. These rewards are not based on performance. Some benefits are required by law, but the employer provides other benefits voluntarily. Section 4.3: Benefits provides detailed information about employee benefits.

Goals of the Total Rewards System To be successful, an organization’s total rewards system must meet legal standards and be cost-effective and affordable. The challenge for HR is to design and package a total rewards system that is affordable, internally equitable and externally competitive while achieving the organization’s strategic objectives. Such a total rewards system helps achieve several important goals: 

Attracts people who can help the organization meet its mission and vision



Retains valuable employees



Motivates and rewards desired performance



Spends compensation money wisely

“On the list of top eight reasons why people leave jobs, pay ranks at number eight. People seek the opportunity to contribute, and they want to feel their contribution is appreciated” (Manas and Graham 2002).

Mission and Strategy The total rewards system of an organization needs to support its mission and strategy. Therefore, the first step in developing a total rewards system is to look at the organization’s mission and business strategy.

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Section 4.1: Total Rewards

Larger and more mature organizations usually have a strategic business plan that states the basic goals that guide the organization in a certain direction. Because the total rewards system is a result of that business plan, it must be adjusted as the plan is updated. Smaller and newer companies may not formally define their strategies. In this case, the HR professional may consider other indicators. For example, Figure 1-1 shows questions that will be asked when deciding where the organization is in its life cycle.

Figure 1-1. Life Cycle Decisions In addition to the stage at which the organization is in its life cycle, other influences on total rewards packages include the following: 

Degree of competition



Level of product or service demand



Industry characteristics

Whether an organization is large or small, its rewards package should support organizational goals and objectives. A total rewards system should attract the

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

right people to the right jobs and provide appropriate performance incentives to produce engaged employees who are loyal to the organization.

Corporate Culture According to Dennis Briscoe, Randall Schuler and Lisbeth Claus national and organizational cultures influence perceptions with respect to rewards: “National and organizational cultures also influence how people perceive the value of the various rewards available in the compensation system. For example, the culture may be performance-driven (and pay for performance is a well-established norm) or it may be entitlement-oriented (with longevity of service rewarded). In some cultures people are more willing to accept risk in their compensation while in others people are quite riskaverse. In addition, the level of uncertainty avoidance in a culture may determine the amount of fixed versus variable pay that people will accept.” (Briscoe, Schuler and Claus 2008) In their attempt to achieve the total rewards system goals, organizations will follow one of the two basic compensation approaches toward employees—the entitlement-oriented approach or the performance-oriented approach. Entitlement-oriented approach. Some organizations promote a caring, protective feeling and want employees to feel as if they are a part of the family. These organizations feel that employees are entitled to benefits such as health care, employee assistance or disability insurance as a condition of employment. In general, as benefits increase, there is less emphasis on individual employee contributions and responsibility and more emphasis on the success of the organization as a whole.

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Section 4.1: Total Rewards

Performance-oriented approach. The compensation programs of other organizations are more performance-driven, putting more emphasis on the performance and contributions of individual employees. These compensation systems emphasize performance-based pay, incentives and shared responsibility for benefits. For example, the firm may require co-pay for medical insurance. Although few organizations have a compensation system that is based only on a performance approach, the trend is moving away from the entitlement approach toward the performance approach. Many organizations will have compensation practices that are somewhere in the middle rather than specifically one or the other approach.

Workforce The rewards program must consider the type of workforce. An organization with entry-level or unskilled workers will probably have a very different rewards package than an organization with experienced, highly educated professionals. One way to keep in touch with the employees’ preferences is by conducting surveys to check their attitudes, current needs and long-term needs. Analyzing the workforce and its characteristics will help the organization understand those needs.

Equity Issues Equity means fair pay treatment for employees. Equity helps to attract, motivate and retain competent employees, making it an important concern. Individuals responsible for developing an organization’s compensation system need to understand how perceptions of equity are formed (Bhatia 2010). Issues of equity influence whether employees think their pay system is fair and equitable. Equity issues can be internal and/or external.

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Internal Equity Kanchan Bhatia describes the concept of internal equity as follows: “Internal equity refers to the pay relationship among different jobs/skills/competencies within a single organization. To achieve internal consistency, the employee must believe that all jobs are paid what they are worth. In other words, they must be confident that company pay rates reflect the overall importance of each person’s job to the success of the organization. For the pay rates to be internally consistent, an organization first must determine the overall importance or worth of each job.” (Bhatia 2010) An organization cannot successfully recruit new employees or keep existing ones without internal equity. Employees need to see a basic fairness between what they bring to the organization in the way of education, experience and productivity and how the organization rewards them. External Equity “A firm achieves external competitiveness when employees perceive that their pay is fair in relation to what their counterparts in other organizations earn. To become externally competitive, organizations must first learn what other employers are paying and then make a decision regarding just how competitive they want to be. Then they establish pay rates consistent with this decision” (Bhatia 2010). When an organization is developing a total rewards system, it is very important to maintain external equity to attract and keep employees. External equity involves comparing an organization’s compensation levels and benefits to those of other organizations that are in the same market and that compete for the same employees. Employees will look at whether their total compensation equals what they could earn at another organization for the same job, at the same level of performance and with the same seniority.

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Section 4.1: Total Rewards

In a majority of countries, employees can easily access salary data for their industry, region and position on online pay comparison sites. They can also look at the following factors online: 

Benefits



Opportunity for advancement



Job security



Commuting time



Physical environment

Pay Strategies

Organizations will compete for employees with other organizations in the same labor market. Three factors that define labor markets are listed in Figure 1-2. Factor

Description

Industry

Similar products or services

Occupation

Workers with the same experience or skills

Location

Workers in the same geographical area

Figure 1-2. Factors That Define Labor Markets Based on what is known about those markets and the competition, organizations usually decide on a pay strategy that matches, leads or lags the competition. These pay strategies are described in Figure 1-3.

Module 4: Compensation and Benefits

Pay Strategy Lag competition

Section 4.1: Total Rewards

Description 

Controls labor costs by setting up pay rates below those of other organizations



May be used because of economic necessity



May enable an organization to offset other higher costs such as purchasing, distribution or sales expenses

Match competition



Most common approach



Offers wage rates and benefits packages similar to that of the competition

Lead competition



Often referred to as being externally competitive



Offers higher wages and/or better benefits in an attempt to attract and keep the best talent



Thinks that higher-quality employees are more productive, which makes up for the higher salaries Figure 1-3. Pay Strategies

The correct strategy depends on two things: 

How the employees add value to the organization’s success



The degree to which the organization can afford to pay for a particular strategy

An organization will probably use a combination of these strategies. For example, for critical jobs, the organization may decide to lead the competition; in other areas, it may use a match strategy. Organizations must keep in mind that using more than one pay strategy may cause morale issues and lead valuable employees to seek jobs in other organizations.

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Section 4.1: Total Rewards

Compensation and Benefits Strategy For the majority of organizations, business success depends heavily on developing a total rewards strategy that enables the organization to compete costeffectively for talent. HR professionals must remember that the elements in a total rewards system are dynamic. Therefore, they need to pay close attention to the competition, because any of the following elements can vary from year to year: 

Employment costs and conditions



Supply and demand for talent



Laws that affect business and employment



Employees’ perceived value of rewards

Job Evaluation Job evaluation supports the need for the total rewards system to advance the organization’s strategic objectives and is related to the organization’s concern for equity of pay. Organizations sometimes find it difficult to balance these concerns as they attempt to maintain profit margins and meet the needs and expectations of their workforce. Understanding the market in which they operate and using data gained through surveys help the organization maintain equity. There are two types of job evaluation: 

Job-content-based (internal) job evaluation



Market-based (external) job evaluation

Job-Content-Based (Internal) Job Evaluation In job-content-based job evaluation, the worth and pay opportunities of different jobs are based on an appraisal of their responsibilities and requirements and their relationship to other jobs within the organization.

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

Jobs can be compared to each other or to an outside standard. Job evaluation techniques are either nonquantitative or quantitative: 

Nonquantitative methods evaluate the whole job by sequencing all jobs within the organization by the value to the organization.



Quantitative methods try to compare the worth of one job with another job by evaluating the job using a variety of factors that reflect how much the job adds value to the organization.

Section 4.2: Compensation provides the details of nonquantitative and quantitative methods of job evaluation. Market-Based (External) Job Evaluation Market-based job evaluation is sometimes referred to as market pricing because this method bases the worth and pay opportunities of different jobs on their market value or the going rate in the marketplace. Job content or internal job relationships may also be taken into account, but these are usually secondary considerations. Two advantages to market pricing are as follows: 

External competitiveness



Provides a rational, objective basis for negotiating pay rates with individuals and groups

There are also disadvantages to market-based pricing: 

Insufficient data and the potential for poor job matching. Obtaining pay data may be difficult in emerging and developing markets.



Market-based pricing is less legally defensible than job-content approaches because it relies on survey data. Organizations need to ensure that their pay structures are legally compliant while also enabling talent mobility.

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Section 4.1: Total Rewards

Keep in mind that “no market information source is designed or, indeed, should be designed to show that one salary level is the correct market rate for any given job. It should give as clear an indication as possible of the current operating or going range for establishing salary levels or setting pay structures and define which factors affect the distribution of individual salaries within it” (Armstrong and Murlis 2007).

Salary Surveys To be competitive and affordable, an organization’s pay structure must be designed and priced properly. Many organizations use surveys to collect the information that will help them evaluate positions, adjust pay range structures to remain competitive and present salary information to top management. Pay surveys collect information on current market rates and may include the following topics: 

Starting wage rates



Base pay



Pay ranges



Incentive plans



Overtime pay



Shift differentials



Vacation and holiday practices

Internal versus External Surveys Once an organization decides it needs a salary survey, it must decide how the survey should be designed and conducted. The organization has two choices: 

Develop and conduct an internal survey



Look to an external source

Internal Surveys

Organizations that have available resources and expertise may choose to develop their own internal survey to allow for more control over the survey technique and

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

data analysis. The advantage of an internal survey is having the ability to shape the design, administration, data analysis and reporting as needed by the organization. The disadvantages include the following: 

Competitors may not be willing to cooperate and to share their pay structures.



If no consultant is used, matching the positions may be difficult. Data from consultancy firms may be more dependable because they work with such data more frequently and have structured benchmarks.

If an organization decides on an internal survey, it may contract with an independent consultant to help. The advantages to using an outside consultant are as follows: 

The organization still maintains control over the internal survey.



Using an outside person may place less demand on organizational resources.



Enlisting the help of a consultant may ease any concerns about survey credibility.



Recommendations from a person outside the organization are sometimes more acceptable.

In all cases, care needs to be taken to ensure that when internal surveys are being created and applied that doing so or participating in one does not break any relevant jurisdictional rules related to antitrust or anti-competition laws or acts. Internal surveys are more common in maturing (developing) markets or where they are not conducted by third-party vendors. In some cultures, sharing compensation data could be illegal and considered collusion (for example, in the US, Canada and UK) because of the competitive nature of the markets—this could be considered as controlling your employees’ potential earnings.

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External Surveys

Organizations have different options available if they choose an external pay survey. If an organization uses externally published data, it must be sure it knows how the data were generated and when. Other external survey options are available. Professional member groups such as the Society for Human Resource Management (SHRM), as well as consulting firms, conduct surveys of wage/job data for a wide range of professions, industries and geographical areas. Depending on the type of external survey, the organization may have limited participation and input. Any of the following factors may be considered when an organization is deciding between an internal or external pay survey: 

Internal time and expertise required



Relevance/match of external surveyed jobs to the organization’s jobs



How current the external survey data are



Expense associated with the type of survey

Communicating to Employees “Employee benefits can easily be taken for granted by staff, and it is therefore important to tell them about what they are getting and its value. This can be done in company newsletters or, better still, by means of employee benefits statements which set out in full the scale and cost of the benefits for each individual employee” (Armstrong and Murlis 2007). The key to a successful total rewards program is employee communication. The more complex the system and the more choices it provides, the greater the need for a communication plan.

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Communication is important for three reasons: 

Educating employees about the organization’s total rewards practices



Achieving employees’ buy-in



Supporting the organization’s goals for performance management

Direct Communication Having a written communication plan is the first step toward communicating the compensation plan to employees. However, direct communication is still the preferred method in many instances. Either HR or the employee’s manager must meet with individual employees in a confidential setting to communicate the following compensation and benefits issues: 

Job grade changes



Raises



Individual benefit issues



New policies or procedures that directly affect that employee



Policy infractions (for example, incorrect reporting of overtime)

If the meeting is effective, the employee will feel free to ask questions and will understand the compensation or benefits issue discussed. Good employee communication helps increase employees’ awareness that their employer is attempting to do the following: 

Create internal equity



Ensure competitiveness



Reward individual or team performance

Do not limit communication to the rollout of a new benefits or compensation program or to an annual enrollment period (where applicable). Instead, communicate with workers about these programs throughout the year. Doing this will increase acceptance and participation as well as job satisfaction and morale.

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Section 4.1: Total Rewards

Evaluating Effectiveness of the Total Rewards Strategy How do you know if the organization’s total rewards system is effective? The answer to this question depends on the goals of the system. As described earlier in this section, the objectives of any organization’s total rewards system are to be cost-effective and affordable, as well as compliant with laws and regulations. In addition, the basic objective of the total rewards system is to offer employees a system that encompasses the following: 

Compatible with the organization’s mission and strategy



Matched with the corporate culture



Appropriate for the workforce



Externally and internally equitable

Consistently monitoring the system will pay off in the following ways: 

More cost-effective system



More satisfied employees



Fewer legal complications

These payoffs mean fewer compensation problems for the HR function.

Compensation and Benefits for International Assignments People move across borders for the following reasons: 

Develop new markets and businesses



Manage ongoing operations



Transfer skills



Solve problems

Trends in international assignments are showing that organizations are reducing the number of long-term assignments while increasing the number of crossborder, short-term and permanent assignments.

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

Because of the changes in international assignment programs, HR responsibilities have also changed. It is difficult to manage compensation and benefits for the various international assignment types. This topic describes the compensation and benefit approaches for three international assignment types, which are defined in Figure 1-4. Assignment

Description The traditional international (expatriate) assignment, usually lasting

Long-term

longer than one year, involves relocating the employee and family to the host country. Employees go abroad for a specified period of time (usually for three

Short-term

to twelve months); the family may or may not accompany the employee. Employees (international commuters) live in one country and work in

Commuter

another country. These employees regularly commute across borders (usually weekly or biweekly) to perform their jobs, while their families remain at home. Figure 1-4. International Assignment Types

Long-Term Assignments The costs of an international assignment can be significant. Organizations look for the most cost-effective approach to pay the assignees, but it is difficult to apply the same approach across all markets. Some of the differences from country to country include the following:



Compensation practices, including bonuses



Laws and regulations, which are constantly changing



Social security regulations



Employee preferences in total rewards

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Section 4.1: Total Rewards

Organizations usually have a suite of policies and choose the one best aligned to the reasons for the assignment and any unique requirements. Ongoing support is a vital way to allow the employee and spouse to adjust to their new surroundings. “Much of valuable ongoing support can be characterized as providing guidance and mentoring for dealing with local challenges as well as career management activities aimed at combating a possible sense of isolation that may develop even after effective foreign site adjustment.” (Vance and Yongsun 2006)

Short-Term Assignments Short-term assignees are employees who are assigned to a country for a brief time. These employees return to their home country at the end of the assignment. The definition of a short-term assignment varies from organization to organization. Short-term assignments often involve a period of no longer than six months. 

Some organizations choose to make the break point at three months.



Other organizations make the break point when the employee becomes liable for tax in the host country (Armstrong and Murlis 2007).

Short-term assignment compensation and benefits need to be treated differently than compensation and benefits for other types of international assignees. Shortterm assignees continue to receive their salary in their home country; their homecountry compensation package does not change. Short-term assignments of three months or less are regarded as extended business trips. These individuals are often paid a pure home-country salary and benefits structure.

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Section 4.1: Total Rewards

If the assignment is longer than three months, adjustments may be similar to those made for longer-term international assignees, such as allowances for differences in housing expenses or goods and services. These adjustments are usually less complex than for long-term assignees for the following reasons: 

The family usually remains at home.



Many other costs are not necessary, such as leasing or purchasing automobiles, country club memberships and leave for rest and recreation.



Host-country taxation issues are usually not a problem because income is received at home; however, adjustments may need to be made for additional taxes due to allowances.

There has been an increase in the use of short-term assignments for a number of reasons. Here are a few examples: 

Organizations think of short-term assignments as less costly. This is important when organizations are trying to cut expenses and control costs.



Many assignees do not want to move their families to potentially risky locations.



Because of changing demographics, more employees have responsibility for aging parents or are part of a dual-income couple.

Short-term assignments have the following potential drawbacks: 

International assignees sometimes feel that short-term assignments are too short to really accomplish anything.



Local employees may not completely accept or socialize with the assignee because they know their presence is only temporary.



In many parts of the world, relationships are very important and take time to build. Relationship building is a problem on a short schedule.



The impact on the family left behind can be difficult. The spouse who stays at home with children becomes, in effect, a single parent.

The biggest challenge with short-term assignments comes when they get extended. Many short-term assignments start out as business trips, but when

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

business objectives are not met quickly, they can easily turn into unplanned longterm assignments. This situation can cause the following compensation and benefits problems for HR professionals: 

Difficulties in the accurate reporting of taxes and social security for both the assignee and the organization



Impacts on other assignment costs, such as housing (For example, housing and other allowances may have been handled differently if the longer assignment duration had been known at the beginning.)

Commuter Assignments In their book, Reward Management: A Handbook of Remuneration Strategy and Practice, Michael Armstrong and Helen Murlis describe the reasons for commuter assignments. “Commuter assignments have grown in popularity for two quite different reasons: 

First, in response to the growing unwillingness of employees to disrupt their children’s education or the career of a spouse for the sake of a full expatriate assignment.



Second, where the organization does not wish to enter into the cost or commitment of a full expatriate assignment. Further, it may believe that the employee(s) concerned would be willing and able to travel to the work location on a Monday morning (or Sunday evening) and return home on the Friday evening without detriment to the work or themselves.

Such assignments are usually confined to European countries where the relative ease of travel and work permits makes such patterns of work manageable both for the organization and for the employee.” (Armstrong and Murlis 2007)

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

In a commuter assignment, the assignee’s home-country residence is maintained. In the host location, furnished accommodations are provided, often in a hotel or company-owned housing. The following are recommendations and best practices for commuter assignment compensation and benefits: 

Direct reimbursement for meals and incidentals



Regular travel between the home and host locations with reimbursement for airfare or mileage



No hardship allowance



Travel security briefing, travel intelligence/updates and emergency assistance provided



Employee assistance program coverage for the employee and family



Additional taxes incurred as a result of the commuter assignment paid by the organization

Some organizations offer the following additional benefits to lessen the stress of the frequent travel: 

A round-trip allowance for the spouse to visit the employee once per month (instead of the employee returning to the home location) and, if necessary, a stipend for child care costs



Mobile phone allowances for family calls



A webcam to enable more personal family communications during travel



Business-class or upgraded travel for the employee for these reasons: o Helps lessen the stress of frequent travel o Makes speedy check-ins possible o Provides access to business lounges



A monthly stipend to assist stay-behind families with domestic tasks previously handled by the employee

Module 4: Compensation and Benefits

Section 4.1: Total Rewards

Trade Agreements and Treaties One of the major factors causing the increase in international economic activity has been the passing of international trade agreements. Trade agreements have removed many of the difficulties involved in moving capital, goods and people. Some trade agreements have been formed specifically to assist in the growth of emerging markets. Trade agreements now include topics such as labor and environmental standards, human rights, technical assistance, dispute resolution and training. Trade agreements may affect the work of HR in a number of ways: 

Eased visa requirements may increase talent mobility.



Taxation and pension provisions may result in savings to organizations and international assignees, and they will affect internal processes.



Changes in trade and investment barriers may cause workforce expansions, reductions or transfers in different areas of a multinational organization.



Offshoring and outsourcing may be used more freely.



Talent management issues and priorities may change as certain tasks are transferred from one country to another.



A trade agreement may result in matching regulations among participants. This situation may cause institutional changes that affect employment regulations and processes, such as changes in wage and working conditions.

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Section 4.1: Total Rewards

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4.2: Compensation

This section covers the following information from the Body of Knowledge: Behaviors: 01. Communicate information about an employee’s compensation package, when required 02. Communicate information about company benefits 04. Provide information about payment to employees for working hours and non-working hours (for example, not working because of illness or vacation) 05. Administer salary adjustments 09. Coordinate the completion of salary surveys from external organizations 10. Report the results of current research and available information about salaries

Skills & Knowledge: 01. Total compensation packages 02. Benefit programs (for example, health care plans and flexible benefits) 04. Salary surveys 06. Company-wide compensation policies (for example, wage agreements with unions or work councils, employee categories and salary increases) 07. Contracts with service and product providers (for example, health insurance and pension plans) 08. Bonus/incentive programs 09. Payroll processes

Section 4.2: Compensation Introduction ..................................................................................................................................30 Designing a Compensation System .............................................................................................30 Job Analysis ...............................................................................................................................31 Job Documentation .....................................................................................................................35 Job Evaluation ............................................................................................................................40 Developing a Pay Structure ........................................................................................................43 Compensation Systems ................................................................................................................46 Base-Pay Systems ......................................................................................................................46 Pay Variations ............................................................................................................................50 Pay Adjustments .........................................................................................................................53 Variable or Differential Pay .......................................................................................................55 Incentive Pay ..............................................................................................................................57 Pay Plans for Select Employees .................................................................................................59 Payroll Function .........................................................................................................................62 Payroll Systems ..........................................................................................................................64 Controlling Costs........................................................................................................................66

Module 4: Compensation and Benefits

Section 4.2: Compensation

Introduction As you learned in Section 4.1, total rewards refers to all forms of financial rewards (that is, compensation and benefits) that employees receive from their employers. Compensation refers to the financial returns and tangible services, including salary, allowances and incentives. In this section you will learn the steps used to design a compensation system. You will also learn what is involved in developing a pay system that helps attract, motivate and keep valuable employees. This section examines the following: 

How to design a compensation system



The components of a compensation system

Designing a Compensation System Developing a compensation system that is fair and impartial requires an understanding of the positions in the organization. The compensation system design process consists of four phases, as shown in Figure 2-1.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Figure 2-1. Phases of Compensation System Design Process

Job Analysis Job analysis helps ensure that jobs within the organization are related. This is an important step toward achieving the organization’s mission, vision, goals and objectives. What is the purpose of a job analysis? 

To understand the requirements of a job and to develop a pay structure

What is a job analysis? 

A systematic method of collecting information about a job and evaluating the job requirements

Module 4: Compensation and Benefits

Section 4.2: Compensation

What are the results of a job analysis? 

A written statement of the tasks performed in the job and the basic qualifications: o Education level o Experience o Training o Knowledge, skills and abilities (KSAs)

The three key elements of a job analysis are the following: 

Knowledge: Information necessary for performing a task



Skills: Level of expertise needed for performing a task



Abilities: Capabilities needed to perform the job

These three key elements are commonly abbreviated as KSAs. Minimum selection criteria should not include KSAs that can be taught in a relatively short time frame (for example, a day).

Supervisors and HR work together to design a job analysis for new positions. Time limits are usually placed on this task. 

For new positions: A follow-up assessment needs to be completed within six months (no later than one year) after placement.



For current positions: Job analysis needs to be completed on a regular and ongoing basis—every two years or when there is a vacancy.

Relevant information. The purpose of collecting data for a job analysis is to help differentiate the job from other jobs. The data needs to describe the following job features:



Essential and nonessential tasks and responsibilities



Required knowledge, skills, abilities and mental and physical attributes

Module 4: Compensation and Benefits

Section 4.2: Compensation



Required level of responsibility in the job (supervision received and given)



Work environment, including the following: o Machines and equipment used o Hazards o General physical conditions that may affect the work

Primary source data. When collecting job analysis data, two data sources are most important: 

Employees who are actually performing the job



Employees who are supervising others who perform the job

If these two sources are used, the data sample will better represent the target population, and the job analysis conclusions will be valid. Collection tools and techniques. Most organizations use more than one method for collecting primary source data. Deciding who conducts the job analysis will depend on the collection method(s) chosen and the resources that are available.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Figure 2-2 summarizes various common data collection methods.

Method Observation

Description 

Directly observe

Benefits 

employees performing the

the daily tasks and

tasks of a job.

activities performed in a



Record observations.

job



Translate observations into



Conduct a face-to-face



interview to obtain the necessary information

Works best for short-cycle jobs in production

the necessary KSAs. Interview

Provides a realistic view of

Uses predetermined questions



Adds new questions based

from the employee about

on the response of the

KSAs needed to perform

employee being

the job.

interviewed 

Works well for professional jobs

Figure 2-2. Common Data Collection Methods (continued to next page)

Module 4: Compensation and Benefits

Method

Section 4.2: Compensation

Description 

Open-ended questionnaire



Use a questionnaire to ask

Benefits 

Produces reasonable job

job incumbents and their

requirements because

managers about the KSAs

input is requested from

necessary to perform the

both employees and

job.

managers

Combine the answers and



Works well when a large

publish a composite

number of jobs must be

statement of job

analyzed with limited

requirements.

resources

Figure 2-2. Common Data Collection Methods (concluded)

Job Documentation Job documentation, which involves creating job descriptions and job specifications, is the second step in the process of developing a compensation system. Job Descriptions Job descriptions play a crucial role in an organization’s HR system. A job description is a written document describing an employee’s work activities. (Organizations may use another name for the job description, such as role profile or role description.) The uses of job descriptions as they relate to the design and administration of a compensation system are as follows: 

Help to set up evaluation criteria for job performance



Provide data for comparing pay with that of other organizations



Help in assigning objective classifications or job titles to employees



Communicate expectations to both supervisors and employees



Improve an organization’s ability to defend unwarranted charges of discrimination

Module 4: Compensation and Benefits

Section 4.2: Compensation

In addition to their uses in developing compensation systems, job descriptions bring value to many areas, as shown in Figure 2-3.

Figure 2-3. Value of Job Descriptions Although job descriptions may vary in format, they should include the elements shown in Figure 2-4.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Job Element

Description

Job identification



Job title



Department or location



Date the job description was completed



Approvals



Who the position reports to

Overview (four or five sentences) that summarizes

Summary

the purpose and objectives of the job, including the following: 

Primary responsibilities



Expected results



Degree of freedom (for example, works independently or works under direct supervision)

Essential functions

Tasks, duties and responsibilities of the job

Nonessential functions

Desirable but not essential aspects of the job

KSAs

Minimum knowledge, skills and abilities required to perform the job satisfactorily

Supervisory responsibilities

Extent of authority, including a list of who reports to this position

Working conditions

Environment in which the job is performed, especially hazardous or difficult physical conditions Figure 2-4. Elements of a Job Description

Module 4: Compensation and Benefits

Section 4.2: Compensation

Not every component listed in Figure 2-4 will appear in every job description. Organizations have flexibility in the format of their job descriptions. A sample job description is provided in the Essentials of Human Resource Management Resource Center at http://www.learnhrm.com. Job Specifications The written statement of the minimum qualifications required to perform a specific job is called the job specification. The specification includes both essential and nonessential functions and abilities: 

Experience



Education



Training



Licenses and certifications (if required)



Mental abilities and physical skills



Level of organizational responsibility

Essential and Nonessential Functions

By analyzing a job specification, the employer can assess a job’s most important functions and the criteria for deciding whether an individual can perform the essential functions. The analysis process involves three steps, as shown in Figure 2-5.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Step

Description

1. Get job information

Includes information about the job tasks, duties and responsibilities in terms of the following: 

Nature



Frequency



Intensity



Duration



Impact



Perceived importance to the job

The core of the process, this step reveals the job’s main

2. Analyze data

purposes. Analyzing the data includes the following: 

Distinguishing essential functions from nonessential ones, with a focus on essential functions



Deciding on ways of achieving the desired job results

3. Document conclusions

Documentation must always be consistent with the results of the analysis. Its level of detail can never exceed the level of detail provided by the analysis. Job facts and conclusions must be documented so they are not biased toward people with disabilities.

Figure 2-5. Analysis of a Job Specification Remember, it is crucial to differentiate between the job’s essential and nonessential functions. Good job documentation supports decisions about who is qualified for a job.

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Section 4.2: Compensation

Together, job analysis and job documentation are important steps in the process of developing pay structures for jobs. As an organization grows in size and complexity, these steps become more critical because the resulting compensation programs help guarantee fairness within the organization.

Job Evaluation Job evaluation assesses the worth of a position within the organization. This process consists of two main tasks: 

Defining the pay rate structure



Setting pay rates equal to rates for similar jobs in other organizations

All methods of job evaluation have the same objective—to develop a system that is measurable and realistic for deciding pay structures. Most evaluation methods can be grouped into one of two categories: 

Nonquantitative (whole-job) methods



Quantitative methods

Nonquantitative Evaluation Methods Nonquantitative methods evaluate the whole job and try to place jobs in order of value to the organization. The sequence will indicate that one job is more important than another job, but it will not tell how much more important. Examples of two nonquantitative methods include job ranking and job classification. Job Ranking

In an article for the Society of Human Resource Management, Leslie Weatherly writes, “The job ranking method is considered the simplest method of job evaluation. It places jobs in order, ranging from highest to lowest in value to the organization. The entire job is considered, rather than the individual elements.” (Weatherly 2004)

Module 4: Compensation and Benefits

Section 4.2: Compensation

Job Classification

The job-classification method writes descriptions for each class of jobs. The jobs are then put into the grade that best matches its class description, based on the judgment of the evaluator. There are a few disadvantages to this method: 

Because this process is subjective, with a wide variety of jobs and job descriptions, jobs could easily fall within more than one grade level.



This method relies on job titles and duties and assumes the jobs are similar among organizations. Many organizations are moving to the point-factor method (described below) for these reasons.

Quantitative Evaluation Methods Quantitative evaluation methods use a scaling system to show how much more valuable one job is than another. While nonquantitative methods evaluate the whole job, quantitative methods evaluate the job using a variety of factors—often called compensable factors. Compensable factors reflect how much the job adds value to the organization. Point-Factor System

The point-factor system is a form of quantitative evaluation. It is the most commonly used method of job evaluation. The compensable factors chosen for the evaluation must reflect the nature of the job being evaluated. For example, hazards and working environment would be pertinent factors in a manufacturing setting but not as relevant in most office jobs.

Module 4: Compensation and Benefits

Section 4.2: Compensation

The factors most commonly used in point-factor evaluations include the following:



Skills



Responsibilities



Effort and physical demands



Working conditions



Supervision of others

HR may independently conduct the job evaluation or lead a discussion with an internal or external committee to decide how much each factor (such as skills and working conditions) is present in a specific job. The committee assigns points to each factor and then adds the points to come up with an overall point value for the job. Then they can compare the relative worth of jobs on the basis of their point values. The advantages of a point-factor system are listed below (Koss 2008): 

Forces an organization to quantify total points for each unique job, the true value that the company places on this job. This process provides value beyond just compensation.



Forces an organization to do some real soul searching about the traits they value in employees. This exercise has some side benefits for recruitment, promotions and job design.

The disadvantages of a point-factor system are as follows (Koss 2008): 

If the organization requires an outside resource to design a custom system, there will be a substantial cost in consulting fees for each 30 unique jobs that need to be evaluated.



A time commitment from senior management also is needed for the initial design of the system. This generally requires at least three half-day meetings, and then a smaller group will need to review job descriptions and assign points.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Market-Based Evaluation

In a market-based evaluation, an organization identifies the labor market in which it wants to compete and uses the current pay rates as the relative worth of corresponding jobs. Although evaluating jobs on the basis of their market value is not a true method of job evaluation, market rates are used as the standard for developing a job-worth hierarchy. Remaining jobs that do not fit the standard are usually put into the hierarchy based on whole-job comparisons (for example, the job-ranking method) with the market-value jobs.

Developing a Pay Structure After the job analysis, job documentation and job evaluation are completed, an organization uses all the data to develop its pay structure. There are two steps to developing a pay structure: 

Grouping jobs into pay grades



Setting pay ranges

Grouping Jobs into Pay Grades Pay grades are used to group jobs that have approximately the same relative worth within the organization. All jobs within a particular grade are paid the same rate or within the same pay range. The purpose of pay grades is to create a pay structure for the entire organization rather than having to set up a separate pay range for each job. The number of pay grades an organization has will depend on the following factors: 

The size of the organization



The distance between the highest and lowest level of job



How clearly the organization defines and differentiates jobs



The policies regarding pay increases and promotions

Module 4: Compensation and Benefits

Section 4.2: Compensation

method was used, the pay grade will consist of all jobs that fall within two or three ranks. The job-classification method categorizes jobs into classes or grades. To be successful, there must be enough grades to distinguish jobs by relative worth but not so many grades that the lines between grades become insignificant. By using pay grades, management can develop a coordinated pay system without having to create a separate pay range for each job in the organization. Setting Pay Ranges For each pay grade, the organization creates a pay range that sets the upper and lower limits of compensation for employees whose jobs fit within that particular grade. It is best to have overlap between pay ranges so that an experienced person in a lower-grade job may be paid more than an inexperienced person in a highergrade job. A maximum, a minimum and a midpoint of the pay range are set on the basis of market data from pay surveys: 

Range minimum equals the lowest value on the job.



Range maximum equals the highest value on the job.



Midpoint is the middle point between the minimum and maximum rates. The midpoint is often considered the market rate paid to an experienced, fully performing employee.

The difference will vary with an organization’s administrative, promotion and pay increase policies. Lower-level jobs normally have a smaller range between minimum and maximum salaries. Entry-level employees usually have more opportunity for promotion and tend to remain at entry level for only a short time. Even when a pay structure is set up, an organization can usually identify a few employees whose pay is either lower than the minimum or higher than the maximum of their pay range. In either case, the organization needs to take steps to bring the employee back into the organization’s pay structure. Figure 2-6 summarizes the steps to develop a pay structure.

Module 4: Compensation and Benefits

Step 1

Section 4.2: Compensation

Description Develop a market line for all jobs, comparing the job-evaluation points or values with the market value for comparable jobs.

Use the market line to decide pay grades by grouping together the jobs with similar value to the organization.

Spread pay grades evenly over the points or values on the market line, attempting to place jobs in the middle of the pay grade.

Calculate the pay ranges for each grade. Assuming that the jobs are placed in the middle of the range (midpoint), set up a range spread that fits with the type of positions and the number of grades

Each pay range will have a minimum, midpoint and maximum, with equal distance between each.

Individual pay rates are calculated using a pay policy line that is set by the organization. For example, in a highly competitive marketplace, an employer may decide to hire employees at 105% of the pay structure, or 5% above the midpoint of each range (the midpoint represents the market rate). Figure 2-6. Developing a Pay Structure Worksheet

Module 4: Compensation and Benefits

Section 4.2: Compensation

A typical pay structure will look something like this: 

Production employees: 10-20%



Clerical employees: 20-40%



Exempt employees: 35-50%



Management employees: 45-60%

Compensation Systems Once the job analysis, job documentation and job evaluation are completed, and the pay structure is developed, the pay system is developed and maintained.

Base-Pay Systems After an organization has analyzed, evaluated and priced its jobs and designed its pay structure, the next step is to develop a pay system that helps attract, motivate and retain employees. To manage base pay for employees, it is important to understand the mechanics of the organization’s base pay program and how much freedom there is within that system. Typically, as organizations grow and mature, they need to formalize how they manage pay as well as people. The best compensation structure is one that fits your organization’s strategy and culture. Decisions about base pay are made not on an individual employee basis but within the context of the organization’s needs and operation philosophy (Jensen, McMullen and Stark 2006). Most employees receive some type of base pay, in one of these forms: 

Hourly wage (for each hour worked)



Salary (the same amount no matter how many hours are worked)

Base-pay systems can be structured in many different ways, as described below.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Single- or Flat-Rate System In single-rate pay or flat-rate pay systems, each employee currently performing the job has the same rate of pay, regardless of performance or seniority. This system is typically used for elected government jobs or union hourly workers. The flat rate is often set to correspond to survey data relating to the job. There may be a training wage in a flat-rate system. Time-Based Step-Rate System In a time-based step-rate pay system, the rate is based on how long an employee has been performing the job. Pay increases occur on a set schedule. Employees are normally hired at, or given promotional adjustments to, the first step, although people with qualifications greater than that required for the job may be hired at a higher step. There are several types of time-based step-rate systems. 

In an automatic step-rate pay structure, the pay scale is usually divided into a number of steps that are 3% to 7% apart. At set time periods, each employee with the required seniority receives a one-step increase. This system is most commonly used in union and government environments. Figure 2-7 shows an example of a step-rate pay structure with four steps that are 7% apart.

Figure 2-7. Automatic Step-Rate Pay Structure 

A step-rate system with variability-based performance considerations is similar to the time-based system, except that the size or timing of

Module 4: Compensation and Benefits

Section 4.2: Compensation

increases may vary if performance is significantly above or below standard. For example, a very capable employee may skip steps. 

In a combination step-rate and performance structure, employees receive increases on a step-rate basis up to the job rate. Above the job rate, increases are granted only for above-standard performance. This system requires resources that can develop and administer a performance appraisal system and communicate it to employees so that they understand how they can earn performance-based increases.

Performance-Based/Merit Pay System In a performance-based pay system, the individual employee’s performance is the basis for the amount and timing of pay increases. Another term for a performancebased pay system is a merit pay system. In a merit pay system, employees are usually hired at or near the pay range minimum. Pay increases are tied to performance and the degree to which the employee masters the job. Employers using a performance-based system must be able to explain the differences in salary increases from one employee to another. Employers must also be able to support the performance appraisal methods that were used to decide why an employee deserved a specific pay increase. Without such controls, performance-based systems are difficult to justify to employees, and supervisors could rate employees in ways that give the desired wage regardless of actual work performance.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Productivity-Based System In a productivity-based pay system, pay is decided based on the employee’s output. The two examples listed here are most frequently used in manufacturing industries: 

Straight piece-rate system. The employee receives a base wage rate and is awarded additional compensation for the amount of output produced.



Differential piece-rate systems. The employee receives one piece rate up to the standard and then a higher rate once the standard is exceeded.

In assembly line work, a productivity-based system works best under the following conditions: 

Units of output can be measured.



A clear relationship exists between employee effort and quantity of output.



The job is standardized, the workflow is regular and there are few delays.



Quality is less important than quantity. If quality is important, it is easily measured and controlled.



Costs are known and precise.

Because these systems stress quantity of work, the quality of the work must be closely monitored. Person-Based System In person-based pay, employee characteristics rather than the job performed decide pay. In such systems, two employees may perform similar tasks, but the person with superior knowledge or skill mastery receives more pay. “Unfortunately paying people based on what they could do rather than on what they produce can bankrupt the organization— unrealized potential is hard to turn into profits” (Society for Human Resource Management 2010).

Module 4: Compensation and Benefits

Section 4.2: Compensation

There are three basic approaches to tying base pay to people’s qualifications: 

In a knowledge-based system, pay is based on the level of knowledge the employee has in a field. This approach is used mainly for compensating learned professions such as scientists or teachers. Staff professionals may also be paid this way.



Skill-based systems base pay on the number of different skills an employee is qualified to perform. Employees increase their pay by acquiring new skills, even if they do not use the skills on their current assignment. This type of system is most commonly used in a production environment.



Competency-based systems base pay on the level at which an employee can operate in defined competencies, such as training other employees. This type of system is commonly found when rewarding professional groups of employees. (Competencies are the skills, behaviors and knowledge that are needed to succeed in a specific job.)

A recommended article, Effectively Managing Base Pay: Strategies and Programs for Success, by Robert J. Greene, is available at http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/CMS_005592.aspx.

Pay Variations There are times when individual employees are paid outside the pay ranges that are set up in the organization. Examples of these variations include the following: 

Red-circle rates



Green-circle rates



Pay compression

Pay structures must be reevaluated over time, and necessary changes must be made to ensure they remain internally equitable and externally competitive.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Red-Circle Rates Red-circle rates are rates above the range maximum.

Here are some examples of when red-circle rates may occur: 

Long-term employees who reach the maximum rate in their range or jobs in which promotion opportunities are rare.



Employees who are bumped down to a lower-level job, rather than getting laid off, but their salary is not reduced. Sometimes a red-circle rate is frozen until the pay structure is increased enough so that the rate falls within the range.



A manager who is paid at the top of the job range, but there are no openings at the next job range. In this case, bonuses are sometimes used to increase the manager’s take-home pay.

If red-circle rates become common in the organization, the organization’s pay ranges may lag the market and may need to be reexamined. Green-Circle Rates Green-circle rates are the opposite of red-circle rates—an employee’s pay is below the minimum of the range. Generally, employees in this situation should be given pay raises to get them into the range as soon as they meet the minimum requirements for the position.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Pay Compression Pay compression, or “salary compression, which means longer-term employees’ salaries are lower than those of workers entering the firm today, is a creature of inflation. Prices (and starting salaries) go up faster than the company’s salaries, and firms need a policy to handle it” (Dessler 2008). Pay compression usually occurs for one of the following reasons: 

Beginning salaries are raised due to increases in the minimum wage or inflation. Therefore, new hires can make the same as employees with more experience who began at a lower wage.



Labor market pay levels increase more rapidly than an employer’s pay adjustments. An example would be hiring an inexperienced systems engineer at or close to what more experienced systems engineers earn because of an increase in competitive hiring rates. If the inexperienced systems engineer is paid more than the experienced ones, salary inversion occurs.



There is not enough difference between pay levels. This situation allows an employee making overtime to have a larger net pay than that of a supervisor, even though the base pay of the employee is less than the supervisor’s pay.

To offset the effects of pay compression, organizations can do the following:



Match the market in pay rates for all employees, not just new hires.



Provide other benefits to employees affected by pay compression.



Continuously evaluate survey data and update pay ranges accordingly.



Provide incentive plans for managers.



Increase the amount of time off.



Provide longevity bonuses.



Monitor salaries for inflation.



Install a more aggressive merit pay program.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Pay Adjustments Some organizations use a technique that integrates performance appraisals and pay adjustments. Figure 2-8 is an example of a pay adjustment matrix that helps guide decisions on salary increases. As you can see, an employee in the lower half of the range who has a performance appraisal rating of “fully meets standards” would be eligible for a 3% to 4% raise. Position of Pay Rate in

Position of Pay Rate in

“Below Midpoint” Range

“Above Midpoint” Range

Outstanding

7–8%

5–6%

Significantly exceeds

5–6%

3–4%

1–2%

Performance Rating

standards Fully meets standards Does not fully meet standards Figure 2-8. Pay Adjustment Matrix Other pay adjustment techniques include the following: Cost-of-Living Adjustments (COLAs) The purpose of a cost-of-living increase is to protect the employees’ purchasing power against rising inflation. These increases are given to all employees, either in equal cents per hour or as a percentage of their current pay. General Pay Increase A general pay increase is given to all employees (or sometimes a class of employees such as office or production workers) based on local competitive market requirements. This type of increase is awarded regardless of employee

Module 4: Compensation and Benefits

Section 4.2: Compensation

performance. The pay increase is not linked to the cost of living and will depend on the employer’s ability to pay for compensation increases. Seniority Seniority, which is the time spent in an organization, is sometimes the basis for pay adjustments. Organizations may agree to one of these two rules when seniority is used: 

Employees may need to be employed for a certain period of time before they are eligible for pay increases.



Employees may receive pay increases automatically after a set time in the job.

Lump-Sum Increases (LSI) Some organizations use a lump-sum increase (LSI), or performance bonus, method to reward employees. An LSI is a one-time payment of all or part of a yearly pay increase. An employee’s base wage rate is typically not adjusted by this increase.

The LSI approach is an advantage to the organization because other wages and benefits linked to the base rate, such as overtime, shift premium, sick pay and life insurance, are not impacted. Market-Based Increases Organizations may use market-based salary increases to be competitive in attracting new talent or to keep key employees.

Market-based salary increases are usually added to base pay and may also be called equity increases.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Variable or Differential Pay Variable pay, or differential pay, depends on performance and is not added to the employee’s base pay. This practice allows organizations to better control their labor costs and to tie performance and pay together. There are two ways to differentiate pay: 

Time-based (when the employee works)



Geographic (where the employee works)

Time-Based Differential Pay Some employees receive time-based differential pay, or a different rate of pay, based on when they work. Keep in mind that any overtime premium must be applied to the differential pay. 

Shift pay. Some employees receive extra pay when they work less desirable hours, such as a second or third shift. Shift pay may be a flat amount per hour or a percentage of their base pay.



Emergency-shift pay. Certain types of industries pay emergency-shift pay when employees work in response to an emergency.



Premium pay. Some employers pay extra pay, or overtime at a higher rate, for working any of the following: o Holidays or vacation days o For the sixth or seventh day of straight time o After eight hours in a day



Hazard pay. In some industries, employees earn extra pay for working in an environment that is considered to be more risky from a safety or health perspective.



On-call or call-back pay. In some organizations employees earn pay for the following reasons: o When they are on call, even if they are not called in to work (on-call allowance) o When they are called back for an extra shift in the same workday (earn extra pay)

Module 4: Compensation and Benefits



Section 4.2: Compensation

Reporting pay. Employees are paid for reporting to work as scheduled even if upon arrival no work is available.



Travel pay. Hourly employees receive pay for time spent traveling to work assignments, even if the travel time is outside of working hours.



Overtime pay. In various countries the minimum amount to be paid for overtime is dictated by legislation.

Geographic Differential Pay Geographic differential pay is based on where an employee works. Organizations with facilities in different locations often need to tailor their compensation programs to the differences in local labor markets. For example, geographic differences may occur between different cities or regions within the United States and between the United States and other countries where the organization is located. Some reasons for differential pay by geographic region include: 

For labor costs. Employers change their base-pay structure to reflect different wage rates or factors that impact the cost of living in different geographic areas.



To attract workers to certain locations. Employers pay more for employees who accept work in remote locations or in places where the climate or quality of living is a deterrent. An offshore oil platform is a good example.



For foreign pay. Employers offer a base-pay structure plus allowances to reflect factors that affect the economics of employees who work in offices located in foreign countries. These factors may include the following examples: o Differences in culture o Education o Technology o Climate o Taxes

Module 4: Compensation and Benefits

Section 4.2: Compensation

For more information on compensating global employees, visit this link; http://www.shrm.org/templatestools/toolkits/pages/designingglobalcompens ation.aspx

Incentive Pay Incentives are used to motivate employees by paying for performance that exceeds base-pay expectations. Incentives can be structured to reward short-term accomplishments or long-term results. 

Short-term is easy to measure but may not have a lasting impact on the overall health of the organization. For example, a salesperson who receives incentives for having the most monthly sales may be motivated to exceed goals in the short term only.



Long-term can help keep high performers and provide long-term positive results for the organization.

It is important that employees have the ability to achieve the incentive goal and to see the results of their efforts. For example, a customer help line has no impact on increasing production on the line, so customer service employees should not be compensated for an increase in production. However, they can increase customer satisfaction, which can be an appropriate incentive goal. Keep in mind that “some people may prefer consolidated increases to base pay rather than rely on possibly unpredictable bonus payments that may be perceived as arbitrary, and which are likely to be non-pensionable” (Armstrong and Cummins, Reward Management Toolkit: A Step-by-Step Guide to Designing and Delivering Pay and Benefits 2011). The best system balances both short- and long-term goals. Incentives can be developed at any of these levels:



Individual



Group



Organization-wide 57

Module 4: Compensation and Benefits

Section 4.2: Compensation

Figure 2-9 provides examples of each.

Incentive Type Individual

Examples 

The piece-rate system is the most basic individual incentive system. Workers who produce more earn more. Wages are decided by multiplying the number of units produced by the piece rate for one unit.



A commission is another example of an individual incentive. A commission is generally a percentage of sales.

Group

Group incentives are used when measuring individual performance is difficult or when performance requires cooperation of the group. 

In gain sharing plans, an organization shares a portion of the gains from a successful group effort. For example, past production records may be used to set up base productivity standards. Any gains above that standard are shared 50/50 by the organization and its employees.



Team bonuses can also be used and are based on achieving group goals and objectives.

Organization-wide



Profit sharing and stock ownership are the most common organization-wide incentive plans.



Another example is a bonus program that is tied to organizational goals. A goal may be to gain repeat business from 10% of hotel customers. Examples of the method of payout include a flat monetary amount and a percentage of base pay; the methods are typically dependent on the position within the organization. Figure 2-9. Types of Incentives

Module 4: Compensation and Benefits

Section 4.2: Compensation

For an incentive program to be successful, the following conditions must apply: 

Employees must feel the program is related to aspects of the job that they can influence.



Incentive pay should never be used as a way to reduce salary costs.



Employees must believe that the goals are achievable.



Organizations need to have the following in place: o Competitive base salaries o Fairly stable management presence and strategic direction o Good communication between management and employees o Reliable method for measuring the results linked to incentives o Commitment from the top down to communicate the plan and to provide ongoing training and coaching

HR’s challenge is to design an incentive plan that is tailored to the organization. Even within the organization, the plan may vary across business units, functions and locations.

Pay Plans for Select Employees Sometimes specific categories of employees are compensated differently. Organizations may develop separate pay plans for direct sales personnel, professionals and outside directors. Direct Sales Personnel Most organizations compensate their direct sales force in one of three ways: 

Straight salary



Straight commission



Salary plus commission and/or bonus

In addition, sales personnel often receive the following:



Car and expense allowances



Company cars



Club memberships or allowances

Module 4: Compensation and Benefits



Section 4.2: Compensation

Other noncash perquisites

Straight salary plans are the least used compensation package for direct salespeople. However, they are appropriate under these circumstances: 

The sales staff spends a significant amount of time servicing customers rather than securing sales (for example, training, trade shows or handling customer inquiries).



Measuring sales performance is difficult.



The nature of the sales process makes it impossible to separate one individual’s efforts from those of the support people who also help secure the sale.



There is a long sales cycle.

In the case of straight commission plans, the salesperson’s entire salary is based on commission. Straight commission plans are appropriate in the following situations: 

When the organization’s objectives are to motivate sales volume (even if that means less service)



When holding down the cost of sales is important



When competitors also compensate through commission-only systems

Sometimes organizations that use a straight commission plan provide an entrylevel sales representative with a non-recoverable draw or a guaranteed commission for a set period of time, usually six months to one year. After that time, the salesperson does not need to repay the draw and goes on a regular commission plan.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Nonrecoverable Draw (Guarantee): A compensation payment made in addition to base salary regardless of performance. Typically given to individuals who are either new to the company, position or territory. This type of compensation is typically temporary and usually lasts a few months and no more than a one-year period. If the incentive earnings do not exceed the draw amount, the monies are not owed to the company by the individual (Society for Human Resource Management 2007). Salary plus commission/bonus is the most widely used approach to compensating sales personnel, for these reasons: 

Traditionally, salespeople are thought to be motivated by financial gain.



Salary-plus-commission systems allow organizations to directly reward those behaviors that best support their organizational strategy.



Salary-plus-commission systems are adaptable and allow organizations to readjust the plan to fit current conditions.



Competitors usually use a salary-plus-commission/bonus sales strategy.

Professionals Another special compensation challenge is appropriately compensating professionals. Almost all professionals are primarily oriented to their chosen fields and to their career progressions in that field. As a result, the pay system must reward career progression, and a promotional structure must be developed. 

A dual-ladder career progression allows professionals to earn as much in senior technical positions as they would on a management track (see Section 5.3 in Module 5: Training and Development).



Maturity curves link pay with time spent in the professional field. They are most frequently used for teachers and research-focused scientists, engineers and other technical personnel.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Outside Directors Members of boards of directors are compensated in various ways: 

Base pay or retainer



Incentives, usually for attending meetings, chairing a committee or other services



Benefits such as liability and life insurance



Perquisites similar to those offered executives



Nonqualified stock options/grant plans



Nonqualified deferred compensation programs

Payroll Function Few employees understand how complex it is to get paychecks issued; however, all employees expect their paychecks to be on time and accurate to the penny. The responsibilities of the payroll function are far more than just issuing paychecks. The payroll function is also responsible for the following: 

Compliance with legal regulations



Periodic reporting



Record retention



Control and security

The main tasks involved in payroll function are described here. Completing Paychecks Issuing paychecks is a complex operation that may use all the resources in payroll. The following is a brief description of some of the tasks the payroll function performs, sometimes on a daily basis. Each of these tasks depends on the knowledge of skilled payroll administrators who must remain current as to all applicable laws affecting payroll: 

Calculating employees’ gross earnings. Gross earnings include regular wages plus additional earnings such as tips, shift premiums, paid time off, bonuses and overtime pay.

Module 4: Compensation and Benefits



Section 4.2: Compensation

Determining taxable wages. Most countries define taxable wages as all remuneration for services (including noncash benefits) that is taxable when paid. However, determining what is taxable and what is not can be complex and may change from one tax year to the next.



Withholding taxes. Withholding taxes can be done in different ways based on country or state requirements. In either case, issues such as pay frequency (such as weekly, biweekly or monthly) and withholding allowances affect the amount of tax to withhold. If supplemental wages such as bonuses or commissions are paid, they may be taxed differently.



Calculating Social Security tax and Medicare tax. Typically, the Social Security tax is a percentage (which changes periodically) of the employee’s salary up to a yearly maximum, with the employer matching that amount in some countries. All employers are required to withhold and match to the maximum each year regardless of an employee’s previous earnings with another employer. In some countries, Medicare taxes (also based on a percentage of wages) are withheld with no yearly maximum.



Withholding voluntary and involuntary deductions. Employees may authorize the payroll department to take amounts directly from their paychecks. Such voluntary deductions include union dues, some charitable contributions, and contributions to retirement programs. Involuntary deductions, or wage attachments in certain countries, include items such as tax levies, court-ordered child support payments, and garnishments. Involuntary deductions are withheld from paychecks before voluntary ones.

Payroll Record Keeping and Retention Administering the payroll function includes keeping the organization in compliance with its own internal policies as well as with applicable laws and regulations. Ensuring compliance, combined with issuing paychecks, could cause payroll to be buried in paperwork. Therefore, efficient payroll record-keeping practices are vital to having an effective payroll system. An employer is required to keep a master file of employment records for the government. In addition, employers need a master file with accurate records to © 2012 SHRM

Module 4: Compensation and Benefits

Section 4.2: Compensation

understand their labor costs and to have an organized pay process. A master file includes information such as the following: 

Personal data on each employee (for example, name, gender, birth date and Social Security number or equivalent number)



Employment data on each employee (for example, hire date, hours worked per day or week and regular rate of pay)



Tax and payroll data on each employee, allowances claimed, marital status and timecards



Form 1099, a form used in the United States to record payment to independent contractors who provided $600 or more of services during the previous year (US-specific)

Retention of payroll records differs from that for personnel files. Unlike personnel files, payroll records do not need to be retained for the term of employment plus a specified period of time after employment ends. Instead, payroll records should be retained on a rolling basis beginning with the date on which they were created, or as specified by the respective government.

After employment ends, payroll records should include a copy of the termination notice; all wages, salaries, commissions or other compensation paid to the employee (for example, vested vacation time, unused compensating time and sick pay); and any deductions made for money the employee owed the company. Records should reflect deductions made from final paychecks in accordance with the law.

Payroll Systems Most payroll departments use a computerized payroll system because of the enormous task involved with payroll and record keeping. Such a system allows the payroll function to do the following: 

Comply with tax rules, multistate taxing (if applicable) and withholding, depositing and reporting requirements on a timely basis

Module 4: Compensation and Benefits



Section 4.2: Compensation

Reduce human error and possibly reduce labor costs by calculating wages, tax withholding and various tax complexities



Provide management with timely, accurate reports



Maintain control and security

A computerized system relies on its hardware configuration and software choices. Payroll System Hardware The basic configuration of a payroll system within an organization can use any of the following: 

Manual system



Payroll service provider to administer turnkey payroll operation



In-house mainframe or minicomputer



Networked or online system

The organization can also choose to combine the various alternatives for a customized system and may want to coordinate its efforts with the HRIS. Payroll System Software No matter which hardware configuration the payroll system uses, it is dependent on software. Organizations have three software choices: 

Buy off-the-shelf software.



Buy a vendor-supplied software package.



Develop customized software package.

Considerations Besides hardware or software options, there are other issues that must be considered: 

People. The people who work with the system are the ones who decide its success or failure. Their customers are the employees who depend on timely and accurate paychecks and the organization that depends on an accurate and cost-effective system. In all of their dealings with the organization and its employees, the people in the payroll department will

Module 4: Compensation and Benefits

Section 4.2: Compensation

provide the best customer service if they possess the following characteristics: o Reliable o Responsive o Empathetic o Professional 

Security. The organization must have a system of checks and balances. The organization cannot use the same employees to enter payroll data and control the employee database. For example, if an employee fraudulently issues a paycheck to an employee who does not exist, the organization is legally responsible for that paycheck.



Compatibility. The HRIS and payroll systems must be compatible. They must be able to share data, and changes to employee records made in one system must be reflected in the other.

Controlling Costs Controlling costs is a concern for all organizations and is crucial to their success. Organizations can control compensation system costs and keep the system from growing out of control by setting maximum/minimum ranges that govern pay decisions, using a formal budgeting process and auditing the system. 

Setting ranges. Setting pay ranges, the upper and lower bounds of possible compensation for jobs that fall within each pay grade, is one of the most common ways for an organization to contain and predict labor costs. Once ranges are set up, calculating compa-ratios can help HR managers decide if compensation policies are being carried out as intended.

Module 4: Compensation and Benefits

Section 4.2: Compensation

Assuming that pay ranges are based on the market average, compa-ratios are an indicator as to how actual wages match, lead or lag behind the market. Compa-ratios are computed by dividing the pay level of an employee by the midpoint of the pay range. A compa-ratio of 100% means that the salary would be at the midpoint (Armstrong and Cummins, Reward Management Toolkit: A Step-by-Step Guide to Designing and Delivering Pay and Benefits 2011).



Budgeting. A formal budget process helps control and coordinate future spending. There are two basic approaches to budgeting: o Top-down. Top management sets a budge, and line managers make the necessary personnel decisions to make it work. This is the more common approach. o Bottom-up. The employees’ compensation package for next year is forecast to decide on the organization’s total labor budget. A bottomup system is rarely used because it does not offer any way to control costs.



Auditing. Pay ranges and a budget cannot be effective without ongoing monitoring of the spending. Areas that need special attention include the following: o Administrative process o Policy compliance, both organizational and regulatory o Adequate documentation and record keeping o Overall results

Module 3: Employee Relations and Communication

Section 3.2: Laws Affecting Employee and Labor Relations

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Module 3: Employee Relations and Communication

Section 3.2: Laws Affecting Employee and Labor Relations

4.3: Benefits

This section covers the following information from the Body of Knowledge: Behaviors: 02. Communicate information about company benefits 03. Record information about employees in HR database (for benefits or tax purposes) 04. Provide information about payment to employees for working hours and non-working hours (for example, not working because of illness or vacation) 06. Track eligibility for time off and temporary leaves (for example, maternity, mourning, unpaid leave) 07. Explain policies and procedures for taking time off and requesting leaves of absence 08. Coordinate activities to support employee programs (for example, programs to improve health, tuition reimbursement or educational assistance)

Module 3: Employee Relations and Communication

Section 3.2: Laws Affecting Employee and Labor Relations

Skills & Knowledge: 02. Benefit programs (for example, health care plans and flexible benefits) 03. Retirement plans and/or programs 06. Company-wide compensation policies (for example, wage agreements with unions or work councils, employee categories and salary increases) 07. Contracts with service and product providers (for example, health insurance and pension plans) 08. Bonus and incentive programs 10. Leave and time-off allowances

Section 4.3: Benefits Introduction ..................................................................................................................................72 Deciding Which Benefits to Offer..............................................................................................72 Types of Benefits ..........................................................................................................................74 Benefits Needs Assessment ........................................................................................................74 Government Mandated Benefits .................................................................................................78 Voluntary Benefits .....................................................................................................................82 Paid Time Off .............................................................................................................................88 Work/Life Balance .....................................................................................................................90 Perquisites ..................................................................................................................................96 Metrics ........................................................................................................................................97 Trends in Benefits ........................................................................................................................99

Module 4: Compensation and Benefits

Section 4.3: Benefits

Introduction In addition to direct compensation, organizations provide employees with indirect compensation, commonly known as employee benefits. Benefits could be a large part of an organization’s total employment cost. In general, the cost of benefits could add an estimated 35% to an employee’s base salary. In most countries, rising health care costs have produced record highs for employer-sponsored health plans and employee contributions. Because of the expense, an organization must spend its benefit money wisely so that both the organization and the employee benefit. Benefit programs can be thought of as a contract to protect the financial and physical well-being of workers and their families. They are designed to reward continued employment, promote loyalty and enable employees to live healthier lives. Indirect compensation also benefits employers in the following ways: 

Helps organizations recruit and keep good employees.



Increases the employee’s commitment to the organization. This commitment then transforms into improved productivity, work quality and competitiveness.



Provides tax-effective purchase of insurance and benefits.

This section examines the types of benefits and trends associated with benefits.

Deciding Which Benefits to Offer Armstrong and Murlis state, “Benefit entitlements are an area which employees watch closely and where perceived injustice can rapidly cause problems. They are also a major component of employee costs, particularly at management level where keeping up with ‘best practice’ can add 40 percent or more to basic salary costs for a fairly average group of executives” (Armstrong and Murlis 2007).

Module 4: Compensation and Benefits

Section 4.3: Benefits

In order to spend its benefit money wisely, an organization must answer the following questions: 

Which benefits are required by law? Laws require that employers provide certain benefits to their employees. These benefits must be included in your organization’s total compensation package.



Which benefits enable an employer to compete for employees? Some benefits, such as paid time off, have become so common that organizations that do not offer them will have a problem finding and keeping workers. Offering these benefits allows an organization to compete for the best employees. Also, if an organization offers an attractive benefit that is not commonly offered by competitors, such as day care, the organization will have an advantage over its competitors.



Which benefits are cost-effective to purchase and to administer? Because organizations usually have a limited budget for benefits, they must always assess the cost of the benefits and the associated administrative burden. Benefits such as paid holidays are easy to administer, but pension and health care plans are more time consuming and costly to administer.



Which benefits do employees prefer? Organizations must consider what benefits will attract and keep new employees. Maintaining a well-qualified, motivated workforce is important to the organization’s success. Surveying employees regularly and understanding the makeup of the workforce allows the organization to identify benefits that employees value. Here are some examples: o Health insurance ranks high with employees of all ages. o Some benefits, like tuition reimbursement, may appeal more to younger workers. o Older workers may also be interested in life insurance and retirement benefits.



Which benefits provide creative choices? Look for ways to be creative when designing benefit programs. Constantly monitor the marketplace to decide if legislation or other changes have

Module 4: Compensation and Benefits

Section 4.3: Benefits

made desirable benefits more affordable. Here are two examples of how to provide benefits that save employees time and money and cost the organization very little: o An organization that cannot afford to provide health insurance may consider annual cash bonuses that employees can apply toward their insurance costs. o An organization that cannot offer a benefit due to cost may think about offering popular lower-cost benefits, such as a flexible work schedule, telecommuting and casual dress.

Types of Benefits HR will need to consider that there are several benefits required by law. In addition to those benefits, HR will select from a wide array of voluntary benefits. To aid in the selection process, they will need to know the following: 

Benefits most important to employees



Benefits offered by competitors

Selecting the right voluntary benefits will make a difference in recruiting and retaining valuable employees.

Benefits Needs Assessment Employee benefits are a significant factor in an organization’s total budget and in the reward package offered to employees. The HR professional has the responsibility to develop an employee benefits package that fulfills the objectives of both the employer and the employee. This is done by gathering data through a needs assessment. The purpose of the needs assessment is to decide on a benefits package that will provide the following results:



Match the overall business strategies.



Support the organization’s mission and vision.



Meet employee needs. 74

Module 4: Compensation and Benefits

Section 4.3: Benefits

A benefits needs assessment includes the activities listed in Figure 3-1 and ends with a gap analysis.

Activity

Description

Review the organization’s

The organization’s market strategy has a direct effect on

strategy.

the benefits it offers employees: 

Organizations that want to lead the market will offer their employees a more extensive benefits package.



Organizations that have a lagging or matching market strategy will offer their employees a simple benefits package.

Review the organization’s

The organization’s total rewards philosophy will provide

total rewards philosophy.

an understanding of how benefits fit into that philosophy. HR professionals will need to find out how much can be spent on benefits and their actual impact on the organization’s cash flow. Benefits must be balanced with the other elements in the total rewards program.

Analyze the demographics of

An organization’s benefits plan must address the needs of

the organization’s workforce.

various categories of employees. These categories include the following: 

Full-time versus part-time status



Active versus retired status



Age



Marital status



Family status

Figure 3-1. Activities in a Benefits Needs Assessment (continued to next page)

Module 4: Compensation and Benefits

Section 4.3: Benefits

Activity

Description

Analyze the design and

Utilization data need to look at specific benefits plan usage

utilization data on all benefit

(for example, relevance of defined benefit schemes for a

plans.

workforce that has a lower than average age and a high turnover). This analysis may result in design changes to a plan. Based on employee lifestyle and employee mix, types of benefits will vary and may include the following: 

Retirement



Medical expenses



Insurance



Dependent care assistance



Capital accumulation

Figure 3-1. Activities in a Benefits Needs Assessment (concluded) Gap Analysis The final step in a benefits needs assessment is to compare the following: 

Organizational needs (including budget)



Employee needs



Existing set of benefits

The HR professional performs a gap analysis to identify the set of benefits that best matches the needs of the organization and its employees. Based on employee demographics and employees’ need for different benefits, current benefits must be looked at to decide if the benefits need is being met. A review of the use of current benefits can also be done to decide which specific parts of each benefits plan are being used and whether that use is in line with the organization's strategies.

Module 4: Compensation and Benefits

Section 4.3: Benefits

Figure 3-2 summarizes some issues that may surface during a gap analysis and suggests the appropriate action.

Figure 3-2. Gap Analysis Findings and Actions Needs assessment data should help HR develop a benefits package that is affordable for the organization, valued and used by employees. A benefits needs assessment allows HR to build a business case for important recommendations listed here: 

The type of benefits provided



Who is covered under the plan (for example, employees, dependents, retirees)



What options employees have (for example, flexible spending accounts, cafeteria plans)



How the plan will be financed and whether employees share in the costs

Module 4: Compensation and Benefits



Section 4.3: Benefits

Who should administer the plan (for example, the organization, an insurance carrier, a third-party administrator)



How the benefit plan will be communicated to all affected individuals

Government Mandated Benefits In some countries, certain benefits are administered or provided by the employer as per law. The organization cannot change or remove these benefits even if a needs assessment suggests the benefits are not required by the organization or its employees. Different countries may use different words or terms to describe these benefits; however, they all tend to operate similarly to insurance programs whereby a premium is paid (by either the employer, employee or both) and a benefit is offered. These benefits may be deferred to the future or may operate in parallel to the employee’s tenure. In addition, some programs may be administered at different levels: 

National



Subnational (for example, state or provincial)



Both national and subnational

Some northern European countries use what is called a Ghent system. In this system, trade unions take on the role of government, acting as the collector of premiums and administrator of such benefits. These mandated workplace benefits, together with nonemployment-related government benefits, create what has been called social protection or a social safety net. In general, government-mandated benefits that affect employers tend to fall into four main categories related to the following:



Retirement (or loss of ability to work)



Health



Unemployment (loss of job or work)



Work-related accidents

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In some countries, some or all of these benefits may be administered as a single group of social services within the broader tax system (for example, Provident Funds or Welfare). In other countries each category of benefit may have its own national, state, provincial or quasi-government body that collects fees and administers the benefit. In all cases the employer’s contribution is effectively a tax. It must also be emphasized that the same term or phrase associated with a benefits program in one country may have very different meanings and applications in another. Mandated Retirement (or Loss-of-Ability-to-Work) Benefits Many countries mandate a form of social security or social insurance programs that may provide the following employee benefits: 

Retirement



Disability



Death



Survivor’s benefits

Often the manner of calculating the employer’s contribution to fund this benefit is based on a percentage of salary up to a yearly maximum. This amount must be deducted from the employee’s regular pay until the maximum is reached. This premium may be jointly paid by the employer and the employee. The social principle of this benefit is to defer income for when an employee is retired or no longer able to work. However, in many cases the funds collected by the government (or government-appointed body) are not specifically allocated to a dedicated fund but rather are paid out of general revenue once the employee qualifies for the benefit. Terms or phrases often associated with this type of benefit are:



Social Security



Social insurance



Government pension

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Mandated Health Benefits Many jurisdictions collect premiums from employers and employees to be applied toward payments to employees if and when they require health care services and/or are unable to financially provide for their own health care services. Globally there are two extremes relating to this benefit: 

Universal (single-payer) health care systems at one extreme



Purely private or self-insured systems at the other extreme

Employers must comply with the laws associated with health-related benefits of the jurisdiction within which they have operations. In terms of legally mandated health benefits, this compliance may involve the employer paying dedicated health-related premiums or simply paying into general income tax to support the public policy. In countries such as the United States, the mandated health benefit relates to when the employee retires (Medicare). In other countries, the government-mandated health benefit coverage and premium are ongoing as part of the general medical services provided to residents or citizens. The formulas for collecting premiums vary; however, most follow a pattern that is similar to the formulas for mandated retirement benefits. In this pattern, the law establishes a certain yearly maximum contribution. The employer—and perhaps the employee—makes regular contributions based on a percentage of the employee’s salary until the yearly maximum is reached. The actual methods and payout of mandated health-related benefits vary significantly between countries and are too broad to generalize. However, many principles of insurance such as deductibles, means testing, co-insurance and qualification periods are often applied to this benefit depending on the jurisdiction.

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Mandated Unemployment Insurance Benefits Many jurisdictions collect premiums from employers—and perhaps employees— to be applied toward paying a percentage of an employee’s salary in the case of the employee losing his or her job through no fault of the employee. The principle behind this benefit is to help workers who have been terminated to transition from one job to another equally suitable job. In most jurisdictions the amount paid to the unemployed worker first requires a waiting period and is followed by time and financial limits (the benefit period is limited, as is the financial payout). The goal of such public policy is to enable people to meet their basic financial obligations while searching for a new job. Though the unemployment benefits plans may operate differently, here are some examples of terms or phrases used to describe this kind of benefit: 

Unemployment insurance



Employment insurance



Job seekers allowance/benefit



Redundancy funds

Mandated Work-Related Accident Benefits In many jurisdictions, insurance against work-related accidents is called workers’ compensation. This wording can be a bit misleading because the benefit is more of an insurance policy against accidents than a form of compensation for work; only a person who has a work-related accident would collect this benefit. The goal of the benefit is to offer employees and employers a financial buffer if an employee is unable to work for a period of time because of a work-related accident. 

The employer is usually exempt from paying the employee’s salary or wages during the accident-related leave period.



The employee receives a portion of his or her salary during the same period.

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An additional benefit to the employer is that these plans usually function as nonfault insurance policies, meaning the employer is protected against being sued by the injured employee even though the injury occurred at the workplace (provided the employer was not negligent). In jurisdictions with broader or more universal social health care systems, sometimes the need for a separate work-related accident benefits program is not necessary because it relates to the medical coverage for the injured worker. Nevertheless, in these cases it is usually mandatory that the employer obtain some form of insurance related to the income loss potential for the employee, which can be significant, especially if the employee is permanently disabled. The following are terms or phrases often associated with this type of benefit: 

Workers’ compensation



Workers’ comp



Compo



Workers’ indemnity



Employers’ liability insurance

Voluntary Benefits Highly regarded employers are always looking for solutions to help employees with the following: 

Manage their personal lives



Increase performance



Develop professionally

Knowing what type of benefits are offered by your competitors and which benefits are meaningful for your organization’s employees makes it easier for your organization to design a plan that will help recruit and keep valuable employees.

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Health Care Benefits In most countries, health care is paid through some type of social insurance, funded by employers, employees, general taxation or combinations of these. It is very unusual for employees not to be at least partially covered by some form of government-supported health care. The role of private health insurance varies, usually depending on the amount and quality of health care provided by the local government or the employer. Many employees purchase additional private health insurance and go to private health care facilities because the quality of government-provided health care is sometimes less than desirable. Private health insurance is too expensive for most employees in less developed countries, so this option is usually available only to upper management. Cultural values play a role in which health care benefits are provided to employees. Health care options considered by many Western countries as nontraditional may be considered both traditional and acceptable in other countries. In the United States, health insurance has become very important to the average employee; however, health insurance is an optional protection program that is not mandated by law. Additional Health Care Benefits

Many organizations are progressively looking to offer additional health care benefits such as the following: 

Dental plans. Dental plans vary, but coverage is usually provided for preventive and restorative services and orthodontia, in varying percentages.

Module 4: Compensation and Benefits



Section 4.3: Benefits

Vision care plans. Because health care plans provide little or no vision care except for medical or surgical treatment, employers sometimes offer a vision care plan. Many employers calculate the cost of lowered productivity because of eye care problems and decide that offering vision care is a good business decision—especially as the workforce ages and the use of computers becomes more widespread. Vision care plans include all or some coverage for eye exams, frames and lenses.



Prescription drug plans. The most common drug plans require a perprescription co-payment or a percentage of the ceiling amount. If the cost is less than the co-payment, the amount is the cost of the drug. Mail-order drug benefits are becoming more popular for maintenance drugs. Some prescription drug plans may have the following requirements: o Employees must fill prescriptions at specified pharmacies for a prearranged reduced cost. o Employees must use generic-brand drugs when available. o Employees must refer to a list that states which prescription drugs are covered.

Information on the cost of health care can be found in the article The Rising Cost of Health Care: Strategic and Societal Considerations for Employers, by Leslie A. Weatherly, HR Magazine, September 2004, at: http://www.shrm.org/Research/Articles/Documents/q304health.pdf Life Insurance Plans A major concern of most employees is caring for their families if the employees were to die. Many employers provide death benefits through group-term life insurance. Group-term life insurance provides a lump-sum payment to beneficiaries. These plans may have any of the following characteristics: 

The insurance may be for a flat amount (such as $50,000) or a multiple of salary (such as two times base annual salary). The amount does not usually vary by the length of service or the position of the insured.

Module 4: Compensation and Benefits



Section 4.3: Benefits

The majority of employers provide life insurance, payable to a beneficiary upon the death of the employee, as a voluntary company-provided benefit.



Sometimes life insurance is required by law. These required insurances are often very small lump-sum amounts, enough to cover burial but not enough for the beneficiary to live on. Here are two examples: o In some countries, some life insurance is provided by Social Security. o In some countries, the government mandates that life insurance must be provided by the employer.



In many countries, the employee can purchase additional life insurance through an organization-sponsored group plan. Examples of this include the following: o In many Latin American countries, employees may receive life insurance that pays twenty-four months of salary, although the amount may vary depending on the employee’s level in the organization. o In the United Kingdom, employees may receive three to four times their annual salary as a life insurance benefit. o In the United States, the organization-provided amount tends to be one or two times the annual salary, and the employee is able to buy additional coverage at group rates. o Keep in mind that life insurance practices may vary even within a country. For example, in India it varies across industries and could vary across local/multinational organizations. There is no uniformity.

Dependent Group Life Insurance

Some employers also insure the employee’s spouse or dependent children through dependent group life insurance. Most organizations allow employees to pay for this coverage through a payroll deduction at favorable group rates. Disability Income Plans In addition to replacing income when they retire and are no longer working, employees may need an income-replacement plan in case they become disabled,

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die prematurely (leaving their family without adequate resources) or are temporarily out of work. In many countries, work-related illnesses or injuries are covered under workers’ compensation. Non-work-related disabilities are covered by the employer’s disability plan, which typically has three phases: 

Employer-provided sick leave



Short-term disability (STD) coverage



Long-term disability (LTD) coverage 

Sick leave. Most sick leave policies pay 100% of pay for a specified number of earned sick leave days. Employees usually accrue sick leave up to a maximum amount specified by the organization. When an employee uses the maximum amount, the sick leave ends, and short-term disability coverage or leave without pay begins. “Sick leave pay causes difficulty for many employees. The problem is that while many employees use their sick days only when they are legitimately sick, others use sick leave as extensions of vacations, whether they are sick or not. Employers have tried several tactics to overcome the problem. They used to repurchase unused sick leave at the end of the year by paying their employees the equivalent sum of the amount of unused sick days.” (Bhatia 2010)



Many organizations provide paid-time-off (PTO) banks rather than sick leave. The PTO bank combines all paid-time-off programs into one large bank of time that includes vacation, sick leave and personal days.



Short-term disability (STD). This type of disability coverage replaces a portion of lost income and may require a waiting period. STD normally provides employees with 50% to 70% of their compensation for up to six months. Sometimes employees with more years of service are given more STD coverage.



Long-term disability (LTD). Long-term disability (LTD) coverage usually begins after the short-term coverage ends. Because of the risks

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associated with long-term coverage, a commercial insurance company almost always underwrites such coverage. o During the first two years of LTD, employees must be unable to perform their own occupation. After the first two years of LTD coverage, benefits will be continued if the person is still unable to engage in any work or occupation that he or she has the education, training or experience to perform. o Benefits end if the person returns to work or dies prior to retirement age. o There are no income-level restrictions on LTD. o Compared to short-term disability, LTD is an expensive benefit to offer employees because it could begin at an early age and may last until normal retirement age (the age at which Social Security begins). Retirement Plans Retirement programs are sometimes mandated by the government, but they are often paid for with employee and employer contributions. Supplemental government support is sometimes provided. Retirement and pension benefits may be provided through a wide variety of plans. The main goal is to provide retirement income to employees with some type of income payable periodically. The two most common types of plans, defined benefit and defined contribution, are described in Figure 3-3.

Module 4: Compensation and Benefits

Plan Defined benefit

Section 4.3: Benefits

Description 

Promises specific benefit amount upon retirement.



Vesting schedule is set up. (Vesting is the process by which employees gain permanent claim to a portion or all of their benefit. Employees are always 100% vested in their own contributions; employer contributions usually vest over time.)



Provides benefits based on service and perhaps on salary.

Defined contribution



Amount of benefit is decided by a formula.



Provides a prespecified level of benefits.



Employer bears the investment risk.



The amount of money that is to be regularly contributed to the fund is specified.



No promises are made about the future value of the benefit.



Employees will be entitled to 100% of their investment and the vested portion of the employer’s contributions upon retirement.



Requires individual accounts for each employee.



The amount of the benefit at retirement will depend on the investment return.



Employee bears the investment risk.

Figure 3-3. Types of Retirement Plans

Paid Time Off Paid leave provides well-deserved relief from the physical and mental demands of work. It may also reward long-term employees for their seniority and service. Paid leave also contributes to a worker’s ability to be productive and to keep up © 2012 SHRM

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with the stress of the job. Employers normally offer their full-time employees the following types of paid leave: 

Holidays



Vacations



Leave of absence



Bereavement



Maternity/paternity/parental

Holiday Pay Each country has paid public holidays, usually nationally, during which organizations may be required to shut down. Certain holidays may be observed on a local basis or only by certain industries. HR personnel need to be aware of country requirements and employee expectations for holidays. Vacation Pay Most vacation policies are based on the employee’s length of service and pay 100% of base earnings. The number of paid employee vacation days varies from employer to employer. The common trend is to relate the length of vacation to the length of tenure and job classification in the organization. Examples include the following: 

Six months of service = one weeks’ vacation



One year of service = two weeks’ vacation



Five years of service = three weeks’ vacation



Ten or more years of service = four weeks’ vacation (Bhatia 2010)

In some organizations, vacation time can be accrued and carried over to the next year (or beyond). There are legal considerations for vacation carry-over; usually, there is a limit on how many days can be carried over.

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Employees are usually required to schedule their vacation time in advance and to get approval from their supervisor. In some flexible benefit plans, employees may buy or sell a limited number of vacation days. Leave of Absence Some industries or professions (for example, teaching) allow long-term employees to take a leave of absence. A leave of absence is a period of time to complete a course of study, to do research or to engage in other activities that will help employees gain knowledge or expertise in their profession. Bereavement Leave Many organizations allow time off with pay to attend the funeral of a close relative. Some organizations also extend this benefit to funerals of friends. Maternity/Paternity/Parental Leave In many countries, organizations pay some portion of maternity leave. To enhance maternity leave, some organizations offer unpaid time off or allow the employee to work part time. In addition to maternity leave, some countries offer paid or unpaid paternity and parental leave. There is also a trend toward adoption leave.

Work/Life Balance In today’s work environment, employees often live with a twenty-four-hour, seven-days-a-week work ethic. There always seems to be a need to deliver superior products, services and information. Technology makes possible worldwide connectivity. Because of these factors, employees have less free time because they are spending more time at work.

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Work/life balance (WLB) is a term used to describe a variety of benefits-related programs to help employees successfully manage their work, family and personal life without too much stress or negative impact. Many organizations report that a key factor in employee satisfaction surveys is balancing work and family. Organizations are increasingly using work/life balance as a recruitment and retention strategy. Work/Life Programs The purpose of work/life programs and services is to support the well-being of employees and to help them achieve a balance between their jobs, families and personal lives. Some organizations express work/life programs in terms of diversity and corporate social responsibility (CSR) programs. Others present work/life programs as a way to promote the organization. An organization can choose from a wide range of work/life programs to offer their employees. Examples are listed here: 

Convenience/concierge services o Banking service o Dinners-to-go program o Dry cleaning and laundry service o Grocery service o Referral services for household needs o Subsidized cafeteria service



Employee assistance/employee development programs o Career development and coaching o Employee development courses o Financial planning o Legal assistance o Mentoring o Resources and referrals for counseling and education o Retirement planning

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o Tuition assistance program 

Family assistance programs o Adoption assistance o Backup (emergency) child care program o Child care assistance o Eldercare assistance o Long-term care for extended family members



Flexible work arrangements o Flexible work hours (flextime). Employees choose starting and ending hours but typically must be present in the office during core working hours. o Job sharing. Two employees share or divide the workload of a single job. o Part-time employment. Employees are offered a reduced work schedule. o Telecommuting. With the aid of technology, employees can work remotely. o Variable workweek (flexible week). Sometimes called a compressed workweek, it allows employees to work longer hours over fewer days. (For example, a person could work ten hours a day for four days instead of eight hours a day for five days.)



Leave of absence o Maternity and paternity leave program o Self-funded leave



Wellness programs o Disease management program o Fitness benefits or workplace fitness program o Smoking cessation program o Weight management program



Miscellaneous o Commuting program o Employer-sponsored discounts

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o Ergonomics program o New mothers’ rooms o Public transportation assistance Which Work/Life Programs Are Appropriate?

Organizations decide which work/life program benefits to offer its employees based on several factors. Primary factors are listed in Figure 3-4.

Factor Laws

Description 

Are work/life balance benefits required by law?

Labor relations



Do labor contracts specify work/life balance provisions for workers?

Organizational culture



Is the organization family friendly, or is there the expectation of long hours of work for career progression?

Maturity of the organization



What behaviors do managers model?



What employee behaviors are rewarded?



Is the firm in a start-up, entrepreneurial phase or established with the capabilities to support work/life balance initiatives?

Market practice



What work/life benefits are necessary to be competitive (locally and globally)?

Figure 3-4. Factors Influencing Work/Life Program Decisions (continued to next page)

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Factor Expectations and needs of

Description 

What are the demographics and demands employees have in terms of family

employees

support, child care and other personal matters? Level of formalized human resources management



Are there strategies within the organization, supported by training, to make offerings possible?

Figure 3-4. Factors Influencing Work/Life Program Decisions (concluded) In many countries, social programs for employees focus mainly on work/life balance. Several countries have enacted employment legislation that directly relates to work/life balance (for example, laws governing different types of employee leave, working time and part-time protection). Impact of Work/Life Programs

Why are so many organizations interested in work/life balance? They feel they have a responsibility to care for their employees’ mental and physical health. Actually, employers and employees both benefit from work/life programs, as shown in Figure 3-5.

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Benefits of Work/Life Balance Programs To Employers 

To Employees

Provides an appropriate work



Improves job satisfaction

environment



Reduces on-the-job stress



Strengthens the employer brand



Increases commitment to the



Decreases absenteeism



Reduces turnover



Improves overall life satisfaction



Reduces workplace stress



Assists with the management of



Reduces health care costs



Improves employee engagement,

employer

work and family responsibilities 

involved in their children’s lives

morale and productivity 

Allows parents to be more

Improves customer satisfaction and



Helps with eldercare issues

client retention



Improves self-esteem



Helps attract qualified talent



Improves employee commitment and retention Figure 3-5. Benefits of WLB Programs There are many good reasons for work/life balance, but commitment and communication can make or break success. Having work/life programs means little if employees are not aware they exist or if the culture does not support the programs.

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For more information on work/life balance, you may access the article Work/Life Balance: Challenges and Solutions, by Nancy R. Lockwood, 2003 SHRM Research Quarterly, at: http://www.shrm.org/Research/SurveyFindings/Articles/Documents/0302wl.pdf

Perquisites There are many perquisites that organizations may offer employees. The following are some of the more common: 

Club memberships. Entrance fees as well as annual subscriptions for social or sports club memberships



Free/discounted products or services. Eligibility for free products and services or discounts



Housing. Accommodations or related allowances o May be company-owned or company-leased housing o Allowances may be a fixed monetary amount or a percentage of basic salary o May include furnishings



Mobile phones. Mobile phone equipment, typically for senior executives and employees with a business need (such as direct sales)



Professional organizations. Employee membership in professional associations



Training programs. Payment of training programs, available to many levels of employees



Company car and/or cash car allowances and meal subsidies/vouchers. Often included in international compensation packages

The following are some additional (less common) perquisites:



Education/tuition fee reimbursements



Employee assistance programs



Financial counseling



Medical checkups 96

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

Subsidized/low-interest rate loans for the purchase of a house or car



Travel allowances

Metrics As an HR professional, understanding how benefits costs are calculated will help in the following ways: 

To analyze the requirement of a particular benefits program



To understand the cost-benefit ratio of a particular program



To prioritize the money spent



To communicate with employees

Figure 3-6 provides descriptions/formulas for figuring the cost of benefits.

Metric

Description

Benefits costs as a

Reflects total costs of benefits

percentage of total

divided by total payroll costs for

payroll costs

organization.

Formula

Figure 3-6. Metrics for Costs of Benefits (continued to next page)

Module 4: Compensation and Benefits

Metric

Section 4.3: Benefits

Description

Formula

Annual increase /

1. Represents expected

1. Health care expense per

decrease in benefits

increase/decrease in organization’s

covered employee

costs (from previous

health care expense for a given

years and projected)

fiscal year. 2. Health care expense per covered

employee is calculated by taking the total health care expenses paid by the organization in a given fiscal year and dividing it by the number of employees who are enrolled in a health care plan in that organizational unit. Total health care expenses include both employee- and company-paid premiums, stop-loss insurance and administrative fees. Percentage of

Calculated by dividing the amount

premiums

the organization pays for

organization pays for

employee-only coverage

employee-only

premiums by the total amount.

coverage Figure 3-6. Metrics for Costs of Benefits (continued to next page)

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Metric

Section 4.3: Benefits

Description

Percentage of

Calculated by dividing the amount

premiums

the organization pays for

organization pays for

employee and dependent coverage

employee and

premiums by the total premium

dependent coverage

amount.

Formula

Figure 3-6. Metrics for Costs of Benefits (concluded)

Trends in Benefits Armstrong and Murlis state, “The main trends in benefits policy are: 

Continued simplification of benefit packages



Increased emphasis on individual need and individual choice, particularly evidenced by flexible and voluntary benefit schemes



More attention paid to communicating the benefits available to employees” (Armstrong and Murlis 2007)

The trends provided here are brief snapshots of the type of issues that HR professionals must consider when making employee benefits decisions. Trends related to employee benefits include the following: 

Health care cost control. Because health care costs continue to rise, organizations are finding multiple ways to cut costs. Some examples are listed here: o Reduced number of choices for employees o Choices that force employees to be more conscious of costs when making health care decisions o Higher co-payments for office visits and drugs o Networks that offer a limited choice of doctors

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o Limited number of participants in the organization’s plan o Spousal surcharge to encourage a spouse who has coverage elsewhere to enroll in that plan For more information on trends in health care reform, you may access the article Health Reform: Mixed Impact on Retiree Benefits, Study Finds, by Stephen Miller at http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/Reform_RetireeBenefits. aspx?marquee=DD3_032310. 

Consumer-directed health care plans. Under the umbrella of consumerdirected health care, employers are adding high-deductible health plans, personal health care spending accounts and tiered benefit designs. These plans are designed to encourage consumers to avoid unnecessary care and to seek lower-cost, higher-quality providers.

For more information on trends in consumer-directed health plans, you may access the following articles by Stephen Miller: Studies Quantify Savings with Consumer-Driven Health Plans: http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/CostSavingsCDHPlans.aspx Reform Creates Opportunities, Uncertainties for Consumer-Directed Plans: http://www.shrm.org/Publications/HRNews/Pages/UncertaintyConsumerDirected.aspx 

Demand for work/life balance. As mentioned earlier, one of the reasons the demand for work/life balance is increasing is that employees have less free time because they are spending more time at work. In addition, increases in employees’ caring responsibilities (for example, aging parents) may also lead to greater demands for work/life balance benefits.



Preventive health and wellness programs. Many organizations are adopting preventive health and wellness programs because of the increase in preventable and chronic health conditions. This increase also results in

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an increase in the organization’s health insurance costs. Examples of wellness programs include the following: o Stop smoking program o Stress management o Weight management o Hypertension (high blood pressure) screening and education For more information on trends in preventive health and wellness programs, you may access the article 10 Steps for Wellness Program Success, by Stephen Miller at http://www.shrm.org/Pages/loginA.aspx?ReturnUrl=%2fhrdisciplines%2fbenefits% 2fArticles%2fPages%2f10StepsforWellness.aspx. 

Retaining younger workers. Organizations are beginning to provide benefits for the purpose of encouraging younger workers to remain in the organization. Younger workers are often interested in the following: o Child care o Tuition reimbursement for education that will allow them to advance in their careers



Flexible benefits. The choice is in the hands of the employees to allocate the benefits most suitable to them based on their needs. Kanchan Bhatia details the initial motivation for flexible benefits packages: “[The flexible benefits package]…was basically designed to enable senior executives, top professionals and managers to choose individually many of these benefits and services. The demands of services depend on their age, their educational and income levels, their life style and other forms of preferences. Recent studies suggest that flexible or cafeteria compensation programs are becoming increasingly popular among employees. It provides an opportunity to contain the costs of the benefit package and provides benefits on a more tax-effective basis. It also increases loyalty and motivation of employees, which in turn enhances productivity.” (Bhatia 2010)

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You have completed Module 4: Compensation and Benefits. Next, if you feel ready, go to the Online Learning Center and check your knowledge by completing the Case Studies, Module 4 Practice Test and the Cumulative Practice Test. Also try the Terminology Quiz to check your knowledge of terminology.

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Bibliography Armstrong, Michael, and Ann Cummins. Reward Management Toolkit: A Step-by-Step Guide to Designing and Delivering Pay and Benefits. London, United Kingdom: Kogan Page , 2011. Armstrong, Michael, and Helen Murlis. Reward Management: A Handbook of Remuneration Strategy and Practice. 5th Edition. London, United Kingdom: Kogan Page, 2007. Bhatia, Kanchan. Compensation Management. Mumbai, India: Global Media, 2010. Briscoe, Dennis R., Randall S. Schuler, and Lisbeth Claus. International Human Resource Management: Policy and Practice for Multinational Enterprises. New York, New York: Routledge, 2008. Dessler, Gary. Human Resource Management. 11th Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2008. Jensen, Doug, Tom McMullen, and Mel Stark. Manager's Guide to Rewards: What You Need to Know to Get the Best For-- and From-- Your Employees. New York, New York: AMACOM, 2006. Koss, Sharon K. Solving the Compensation Puzzle: Putting Together a Complete Pay and Performance System. Alexandria, VA: Society for Human Resource Management, 2008.

Bibliography

Society for Human Resource Management. "Effectively Managing Base Pay: Strategies and Programs for Success." January 21, 2010. http://www.shrm.org/hrdisciplines/co mpensation/Articles/Pages/CMS_00 5592.aspx (accessed August 31, 2012). —. "Effectively Managing Base Pay: Strategies and Programs for Success." January 21, 2010. http://www.shrm.org/hrdisciplines/co mpensation/Articles/Pages/CMS_00 5592.aspx (accessed May 2011). —. "Sales Compensation Planning for HR Professionals." June 1, 2007. http://www.shrm.org/Research/Articl es/Articles/Pages/CMS_022035.aspx (accessed August 31, 2012). —. "Sales Compensation Planning for HR Professionals." June 1, 2007. http://www.shrm.org/Research/Articl es/Articles/Pages/CMS_022035.aspx (accessed June 24, 2011). Vance, Charles M., and Patik Yongsun. Managing a Global Workforce: Challenges and Opportunities in International Human Resources Management. Armonk, New York: M.E. Sharpe, 2006. Weatherly, Leslie A. "Society for Human Resource Management." July 1, 2004. http://www.shrm.org/research/article s/articles/pages/compensation_20seri es_20part_20ii__20job_20evaluation .aspx (accessed August 31, 2012).

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Index

Index setting ranges ......................................... 66 auditing ........................ See controlling costs base-pay systems ....................................... 46 performance-based/merit pay system .... 48 productivity-based system ..................... 49 single- or flat-rate system ...................... 47 time-based step-rate system .................. 47

corporate culture ................................... 8, 19 entitlement-oriented ................................ 8 performance-oriented .............................. 9 demand for work/life balance ... See trends in benefits

benefit needs assessment........................... 74 activies in......................................... 75–76 gap analysis ........................................... 76 purpose of .............................................. 74

differential pay .............................. 15, 55–56

benefits .... 62–63, 72–84, 87–88, 92–95, 97– 101 definition ................................................. 6

emergency-shift pay .............. See time-based differential pay

disability income plans ........... See voluntary benefits

bereavement leave .............. See paid time off

entitlement-oriented approach . See corporate culture

budgeting...................... See controlling costs

external equity........................................... 10

communicating to employees .......... See total rewards

external surveys ............... See salary surveys flexible benefits ........... See trends in benefits

commuter assignments ........See international assignments

gap analysis ... See benefits needs assessment

compa-ratios ............. 5, See controlling costs

geographic differential pay ....................... 56

compensation . 30–31, 35, 40, 42, 44, 46, 49, 54, 56, 60, 61, 64, 66 definition ................................................. 5

completing paychecks ... See payroll function

government mandated benefits ................. 78 mandated health benefits ....................... 80 mandated retirement (or loss of ability to work) benefits .................................. 79 mandated unemployment insurance benefits ............................................. 81 mandated work-related accident benefits .......................................................... 81

consideration ...................... See total rewards

green-circle rates .............. See pay variations

consumer-directed health care plans ........ See trends in benefits

hazard pay .... See time-based differential pay

compensation system .......... 9, 30–31, 35, 66 design process ....................................... 30

health care benefits ....See voluntary benefits controlling costs ........................................ 66 auditing .................................................. 67 budgeting ............................................... 67 compa-ratios .......................................... 67 © 2012 SHRM

health care cost control See trends in benefits holiday pay ......................... See paid time off 104

Module 4: Compensation and Benefits

incentive pay ....................................... 57, 59 long-term ............................................... 57 short-term .............................................. 57 internal equity ..................................... 10, 18 internal surveys ................ See salary surveys

Index

mandated health benefits......See government mandated benefits mandated retirement benefits ................... See government mandated benefits mandated unemployment insurance benefits ........... See government mandated benefits

international assignments .......................... 19 job analysis.................................... 31, 32, 40

mandated work-related accident benefits.See government mandated benefits

job classification .............. See job evaluation

market-based evaluation .. See job evaluation

job descriptions ......... See job documentation

match competition ............. See pay strategies

job documentation ............. 35, 39–40, 43, 46 job descriptions ..................................... 35 job evaluation ........................................ 40 job specifications ............................. 35, 38

maternity/paternity/parental leave ... See paid time off

job evaluation ...................................... 40–43 job classification .................................... 41 job ranking............................................. 40 market-based evaluation ........................ 43 nonquantitative evaluation methods ...... 40 point-factor system ................................ 41 quantitative evaluation methods ............ 41

nonquantitative evaluation methods . See job evaluation

job ranking ....................... See job evaluation job specifications ...... See job documentation job-content-based (internal) job evaluation ...................................... See job evaluation

metrics ................................................. 97–99

overtime pay. See time-based differential pay paid time off .................................. 62, 73, 88 bereavement leave ................................. 90 holiday pay ............................................ 89 leave of absence .................................... 90 maternity/paternity/parental leave ......... 90 vacation pay........................................... 89

KSAs ...... See knowledge, skills and abilities

pay adjustments ................................... 52–54 cost-of-living adjustments (COLAs) ..... 53 general pay increase .............................. 53 lump-sum increases (LSI) ..................... 54 market-based increases .......................... 54 seniority ................................................. 54

lag competition.................. See pay strategies

pay compression............... See pay variations

lead competition ................ See pay strategies

pay grade ............................ See pay structure

leave of absence ................. See paid time off

pay plans for select employees ................. 59 direct sales personnel ............................ 59 outside directors .................................... 62 professionals .......................................... 61

Knowledge, skills, abilities (KSAs) .......... 32

pay ranges .......................... See pay structure 105

Module 4: Compensation and Benefits

Index

pay strategies ....................................... 11–12 lag competition ...................................... 12 lead competition .................................... 12 match competition ................................. 12

quantitative evaluation methods ....... See job evaluation

pay structure ...................... 43, 46–47, 51, 56 grouping jobs into pay grades ............... 43 setting pay ranges .................................. 44 steps to develop ..................................... 44

retirement plans ..........See voluntary benefits

pay variations ............................................ 50 green-circle rates ................................... 51 red-circle rates ....................................... 51 payroll function ................................... 62–63 completing paychecks ........................... 62 payroll record keeping and retention ..... 63 payroll record keeping and retention .......See payroll functions payroll system hardware See payroll systems payroll system software .See payroll systems payroll systems.................................... 64, 66 considerations ........................................ 65 payroll system hardware ........................ 65 payroll system software ......................... 65 performance-based/merit pay system ......See base pay systems performance-oriented approachSee corporate culture perquisites ..................................... 60, 62, 96 person-based system ... See base pay systems point-factor system........... See job evaluation premium pay See time-based differential pay preventive health and wellness programs See trends in benefits productivity-based system ........ See base pay system

red-circle rates .................. See pay variations

salary surveys ............................................ 15 external surveys ..................................... 17 internal surveys ..................................... 15 internal versus external surveys ............ 15 setting ranges ............... See controlling costs shift pay........ See time-based differential pay short-term assignments .......See international assignments single- or flat-rate system.......... See base pay systems tetaining younger workers......... See trends in benefits time-based differential pay ....................... 55 emergency-shift pay .............................. 55 hazard pay ............................................. 55 on-call or call-back pay ......................... 55 overtime pay .......................................... 56 premium pay .......................................... 55 reporting pay ......................................... 56 shift pay ................................................. 55 travel pay ............................................... 56 time-based step-rate system ...... See base pay systems total rewards .. 4–8, 10, 13, 17–19, 20, 30, 75 communicating to employees ................ 17 consideration ........................................... 5 corporate culture ...................................... 8 evaluating effectiveness ........................ 19 goals of .................................................... 6 mission and strategy ................................ 6 subcomponents of .................................... 4 workforce ................................................ 9 trade agreements and treaties .................... 25

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Index

travel pay...... See time-based differential pay

vacation pay ....................... See paid time off

trends in benefits ....................................... 99 Consumer-directed health care plans .. 100 Demand for work/life balance ............. 100 health care cost control .......................... 99 Preventive health and wellness programs ........................................................ 100 Retaining younger workers ................. 101

variable pay ........................................... 8, 55

trends in beneftis flexible benefits ................................... 101

work/life balance ............................... 91, 100 work/life programs .................... 91, 93, 94

types of benefits .................................. 74, 76

Work/Life Programs ................................. 91

voluntary benefits................................ 74, 82 disability income plans .......................... 85 health care benefits ................................ 83 life insurance plans ................................ 84 retirement plans ..................................... 87

workforce .....................See corporate culture

107

Module 5: Training and Development Module 5: Training and Development ....................................................................................... iii Acknowledgements ......................................................................................................................v Module 5 Body of Knowledge ................................................................................................... vi Purpose Statement .................................................................................................................. vi Body of Knowledge ................................................................................................................ vi Section 5.1: Training....................................................................................................................11 Introduction ..................................................................................................................................4 Adult Learning .............................................................................................................................4 Key Principles of Adult Learning ............................................................................................ 5 Motivation ............................................................................................................................. 10 Developing Training ..................................................................................................................14 New Employee Orientation ................................................................................................... 14 Training Analysis, Design and Development Process........................................................... 15 Cultural Learning Perceptions ....................................................................................................39 Language and Interpretation .................................................................................................. 46 Technology Trends .....................................................................................................................46 Learning Portal ...................................................................................................................... 46 Learning Management System .............................................................................................. 47 Webinar ................................................................................................................................. 47 Training and Virtual-World Simulation ................................................................................ 48 Social Networking and Web 2.0 ............................................................................................ 48 Section 5.2: Performance Management .....................................................................................52 Introduction ................................................................................................................................53 Management of Performance in the Organization .....................................................................53 Organizational Values and Goals .......................................................................................... 53 Performance Standards .......................................................................................................... 54

Performance Management Process ........................................................................................ 55 Business Results and Employee Growth ............................................................................... 57 Organizational Support .......................................................................................................... 58 Individual Performance Appraisals ............................................................................................59 Performance Evaluation Process ........................................................................................... 60 Individual Development Plans............................................................................................... 73 Section 5.3: Career Development ...............................................................................................76 Introduction ................................................................................................................................77 Career Management ...................................................................................................................78 Managing Career Development ............................................................................................. 79 Career Development Model................................................................................................... 80 Career Development Programs .............................................................................................. 82 Individual Career Planning.........................................................................................................85 Employee Development Programs ........................................................................................ 85 Unique Employee Needs ....................................................................................................... 89 Challenges in Career Planning and Development ................................................................. 89 Developing Leaders ....................................................................................................................90 Leadership and Management ................................................................................................. 91 Leadership Theories .............................................................................................................. 93 Issues Affecting Leadership .................................................................................................. 98 Succession Planning .............................................................................................................. 98 Bibliography ...............................................................................................................................103 Index ............................................................................................................................................105

Timo Michel, HRMP HR Business Partner, HR International Deutschland, Germany

Brad Boyson, MSHRM, SPHR, GPHR, HRMP Executive Director, SHRM MEA Dubai, United Arab Emirates

Rachel Park Program Manager, Global Talent Acquisition, Mastercard Worldwide Singapore, Singapore

Diane M. Dowlin, SPHR, GPHR, CCP, GBA, CMS, CEBS International Human Resources Director, FIS Jacksonville, Florida

Patchara Popaitoon Researcher/Teacher/Lecturer, School of Management University of Bath Claverton Down, Bath, United Kingdom

Module 5: Training and Development

Section 5.1: Training

Module 5 Body of Knowledge For your convenience, the Body of Knowledge for Module 5: Training and Development is provided on the following pages.

Purpose Statement Purpose Statement for Training and Development: HR professionals in training and development should possess a combination of behaviors and skills/knowledge that include developing and delivering basic training programs and collecting information about training programs, such as training needs, employee participation, and evaluation of programs. They also include monitoring completion of the performance review process and the preparation of development plans.

Body of Knowledge Below are lists of the behaviors and skills and knowledge required for mastery of content related to Module 5: Training and Development. Important behaviors for training and development: 01. Develop basic training programs (for example, safety regulations, emergency preparedness, presentation skills and time management skills) 02. Train employees for basic programs (for example, safety regulations, emergency preparedness, presentation skills and time management skills) 03. Collect and analyze evaluations of training programs (for example, review evaluation forms, contact trainees or supervisors after the training and ask how effective the training was) 04. Coordinate and monitor training activities (for example, cross training, re-training, scheduling, setting up the classroom and completion of required training) © 2012 SHRM

Module 5: Training and Development

Section 5.1: Training

05. Collect information, analyze needs and make recommendations for training and future development programs 06. Monitor completion of performance reviews and development plans 07. Keep records to document employee development and performance Important knowledge and skills for training and development: 01. Different training and learning methods (for example, e-learning, blended learning, seminars and mentoring) 02. How to give feedback on job performance 03. Organizational culture (for example, the organization’s vision, mission, values, history, processes and guidelines) 04. Policies and techniques for evaluating performance 05. Opportunities for training and development 06. Procedures for evaluating trainings 07. Training policies 08. Training needs assessment 09. Individual development plans 10. Performance management methods (for example, setting goals, benchmarking, 360-degree feedback, performance incentives) 11. Training skills for basic programs

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12. How to organize meetings (for example, writing agendas, inviting attendees, scheduling and setting up rooms) 13. Career paths (for example, concepts such as opportunities for job promotion, how employees can grow within an organization)

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5.1: Training

This section covers the following information from the Body of Knowledge: Behaviors: 01. Develop basic training programs (for example, safety regulations, emergency preparedness, presentation skills and time management skills) 02. Train employees for basic programs (for example, safety regulations, emergency preparedness, presentation skills and time management skills) 03. Collect and analyze evaluations of training programs (for example, review evaluation forms, contact trainees or supervisors after the training and ask how effective the training was) 04. Coordinate and monitor training activities (for example, cross training, re-training, scheduling, setting up the classroom and completion of required training) 05. Collect information, analyze needs and make recommendations for training and future development programs

Skills & Knowledge: 01. Different training and learning methods (for example, e-learning, blended learning, seminars and mentoring) 05. Opportunities for training and development 06. Procedures for evaluating trainings 07. Training policies 08. Training needs assessment 11. Training skills for basic programs 12. How to organize meetings (for example, writing agendas, inviting attendees, scheduling and setting up rooms)

Section 5.1: Training Introduction ....................................................................................................................................4 Adult Learning ...............................................................................................................................4 Key Principles of Adult Learning ................................................................................................5 Motivation ..................................................................................................................................10 Developing Training ....................................................................................................................14 New Employee Orientation ........................................................................................................14 Training Analysis, Design and Development Process ...............................................................15 Cultural Learning Perceptions ...................................................................................................39 Language and Interpretation .......................................................................................................46 Technology Trends.......................................................................................................................46 Learning Portal ...........................................................................................................................46 Learning Management System ...................................................................................................47 Webinar ......................................................................................................................................47 Training and Virtual-World Simulation .....................................................................................48 Social Networking and Web 2.0 ................................................................................................48

Module 5: Training and Development

Section 5.1: Training

Introduction Learning occurs all the time, with or without formal training; however, formal training speeds up the learning that is important for the organization. Training in an organization is necessary for the following reasons: 

To teach new employees the skills they need to perform their jobs



To teach current employees how to use a new program, process or system



To close the gaps between an employee’s current performance and the desired performance



To correct performance issues

An organization may have excellent employees, but knowing what the organization expects them to do and how they are expected to do it is the key to their success (Dessler 2008). This section examines: 

Adult learning principles



Processes for developing training



Cultural learning perceptions



Technology trends

Keep in mind that dealing with different cultures means dealing with various learning styles, skills, methods, environments and time schedules.

Adult Learning When designing or selecting training, it is important to consider adult learning principles and learning styles. They both affect the quality of the learning experience. Before beginning the design and development of a training program, adult learning principles must first be addressed.

Module 5: Training and Development

Section 5.1: Training

Key Principles of Adult Learning Using the basic principles of adult learning is the best place to start when designing training programs. These principles provide a basis for how adults learn. HR and training professionals must design their programs with the needs of adult learners in mind. A checklist summarizing adult learning principles is shown in Figure 1-1.

Adult Learning Principles

Training Applications

 Adults want a focus on real-world issues.

 Show how participants can immediately use the learning back on the job.

 Adults want the emphasis to be on how the learning can be applied.

 Apply training to current and future needs.

 Adult learners will come with goals and expectations.

 Discover the participants’ expectations at the beginning of the program and address those that will not be covered.

 Allow debate and challenge of ideas, but adults must be motivated to keep disagreements unheated.

 For some participants, this interaction enhances the learning.  Create a safe learning environment.

 Adults expect instructors to listen to and respect their opinions.

 Promote a learning environment that is collaborative between the instructor and the participants.  Allow participants to receive feedback from the instructor and each other.

 Adults will wish to be resources to you and to each other.

 Allow for planning between the instructor and the group.  Take the knowledge and experience of participants into account.

Figure 1-1. Checklist of Adult Learning Principles

Module 5: Training and Development

Section 5.1: Training

Trainability The principles of adult learning show that how people learn is a direct result of their trainability. Trainability can be defined as follows: 

Willingness to learn and motivation



Level of ability



Perceptions of the work environment

A participant must have both the willingness to learn and the ability to achieve the learning objectives. If either is lacking, then learning will not occur. For example, if a graphic artist is required to attend a training program on the basics of graphic design and has actually been very good at graphic design for several years, the graphic artist’s motivation to attend the program will be low. In addition, if participants feel there will be no support for their new knowledge when they return to work, their learning will suffer. If employees are placed in programs that they are not motivated to attend or are not prepared to do well in, a lot of time and resources will be wasted. Participants with a lower level of ability take longer to learn, which can increase the length of the program and the expense involved with conducting it. Obstacles to Learning Every HR and training professional will meet participants who are resistant to learning. There are many causes for this resistance, so trainers should be aware of the following obstacles: 

Low tolerance for change. Because today’s environment is constantly changing, organizations need to constantly adapt to keep up with the competition. Some people accept change more readily than others. HR professionals need to let employees know that change makes their jobs more interesting and challenging, as well as more secure, and prepares them for a variety of responsibilities that will increase their value as employees in the organization.

Module 5: Training and Development

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Section 5.1: Training

Lack of trust. There are some employees who do not think training is worthwhile, or they have had negative experiences in the past. These employees will not give the training their full attention to make it worthwhile. One way to overcome this problem is to involve these individuals in the design of the training. In addition, when employees see how training fits into the overall plan, they are more likely to support the training.



Peer group pressure. Many employees are influenced by their coworkers’ opinions. If employees do not think a training program is valuable, their opinions may affect others in the department. If HR professionals can find out why negative feelings exist, they can define the goals of the program and explain how the training will help them in their jobs.

For more information on key principles of adult learning, visit the following website: http://www.lsaglobal.com/pdf/w_laws_of_learning.pdf. Experiential Learning Theory Experiential learning is the process of making meaning from direct experience. David A. Kolb helped to promote the idea of experiential learning, drawing heavily on the work of John Dewey, Kurt Lewin and Jean Piaget. According to Kolb, there are four stages of learning (shown in Figure 1-2).

Module 5: Training and Development

Section 5.1: Training

Figure 1-2. Experiential Learning Cycle (Kolb and Kolb 2005) The four stages include Concrete Experience, followed by Reflection on that experience on a personal basis. Reflection may then be followed by the application and learning from the experience (Abstract Hypotheses) and hence to the construction of ways of modifying the next occurrence of the experience (Active Testing). This stage will in turn lead to the next Concrete Experience. Learning Styles According to Kolb’s model, the ideal learning process engages all four of these modes in response to situational demands. In order for learning to be effective, all four of these approaches must be incorporated. As individuals attempt to use all four approaches, however, they tend to develop strengths in one experiencegrasping approach and one experience-transforming approach. The resulting learning styles are combinations of the individual’s preferred approaches. These learning styles include the following:

Module 5: Training and Development



Section 5.1: Training

Convergers are characterized by abstract conceptualization and active experimentation. They are good at making practical applications of ideas and using deductive reasoning to solve problems.



Divergers tend toward concrete experience and reflective observation. They are imaginative and are good at coming up with ideas and seeing things from different perspectives.



Assimilators are characterized by abstract conceptualization and reflective observation. They are capable of taking a wide range of information and creating a concise logical summary.



Accommodators use concrete experience and active experimentation. They are good at actively engaging with the world and actually doing things instead of merely reading about and studying them (Kolb and Kolb 2005).

In the mid-1970s Peter Honey and Alan Mumford adapted David Kolb’s model for use with middle and senior managers in business. Two adaptations were made to Kolb’s experiential model. First, the stages in the cycle were renamed to coincide with managerial experiences such as decision making and problem solving. The Honey and Mumford stages are listed here: 1. Having an experience 2. Reviewing the experience 3. Concluding from the experience 4. Planning the next steps Second, the styles were directly aligned to the stages in the cycle and were named as follows: 1. Activist 2. Reflector 3. Theorist 4. Pragmatist

Module 5: Training and Development

Section 5.1: Training

These preferences are assumed to be acquired and adaptable rather than being fixed personality characteristics. Meeting the needs of all learning styles requires the use of various learning methods. This use will help increase the rate of success for your adult learners.

The Training Analysis, Design and Development Process topic of this section examines various learning methods.

Motivation Motivation has a great influence on an individual’s ability to learn. Motivation is defined as reasons that lead to specific desired behavior such as commitment to a job or continuing efforts to achieve a goal. It is essential to understand the reasons behind behaviors when designing a learning environment. The best way to understand motivation is to look at three principles of human behavior: 

People have a reason for doing what they do.



People do things to accomplish something.



No two people are alike, which means that no two people have exactly the same characteristics.

Motivational Theories The principles of human behavior can help HR professionals motivate learners to engage in the learning process. The major motivational theories described below look at what events affect behavior and how they affect it. These theories will help you understand learners’ needs, goals and motives. Maslow’s Hierarchy of Needs

Maslow’s hierarchy suggests there are five basic human needs, arranged in a hierarchy: 1. Basic physical needs: The need to meet basic physical needs or drives.

Module 5: Training and Development

Section 5.1: Training

2. Safety and security: The need to feel secure and free from threats. 3. Belonging and love: The need to belong, to be accepted, to give and receive love. 4. Esteem: The need for respect and esteem in the eyes of oneself and others. 5. Self-actualization: The need to fulfill one’s potential, to be the best one can be. “The hierarchic theory is often represented as a pyramid, with the larger, lower levels representing the lower needs and the upper point representing the need for self-actualization (Simons, Irwin and Drinnien 1987).” Figure 1-3 shows Maslow’s needs hierarchy and suggests how to fulfill these needs both on and off the job.

Figure 1-3. Maslow’s Hierarchy of Needs Herzberg’s Motivation-Hygiene Theory

Herzberg’s theory of work motivation says that employees have two different categories of needs that are independent of each other and affect behavior in different ways: 

Hygiene factors (extrinsic). Hygiene factors are those that make up the environment in which the employees work. These factors include job security, pay, working conditions, supervision and relations with coworkers.

Module 5: Training and Development



Section 5.1: Training

Motivation factors (intrinsic). Motivation factors are present in the job itself. They include opportunity for recognition, achievement and personal growth.

McClelland’s Theory of Needs

McClelland’s theory is based on studies showing that a person’s needs are influenced by life experiences. Some people have an intense need to achieve, while others do not. His work identifies people with the following characteristics: 

High need for achievement (nAch): o Create difficult but potentially achievable goals o Prefer to work on a problem rather than leave the outcome to chance o Are more concerned with personal achievement than with the rewards of success o Look for situations in which they get feedback on how well they are doing with regard to their work



High need for affiliation (nAff): o Need harmonious relationships with other people o Need to feel accepted by other people o Conform to the norms of their workgroup o Prefer work that provides personal interaction o Perform well in customer service and client interaction situations



High need for power (nPow): o Personal: Want to direct others (often considered undesirable) o Institutional: Want to organize the efforts of others to further the goals of the organization

For more information on McClelland’s Theory of Needs, visit the following website: http://www.netmba.com/mgmt/ob/motivation/mcclelland/.

Module 5: Training and Development

Section 5.1: Training

Theory X and Theory Y

McGregor’s theory is based on two approaches to motivating employees: 

Theory Y managers operate with a participative style. They believe that employees do not like rigid controls and that they naturally want to accomplish something.



Theory X managers operate with an authoritative style. They believe that employees do not like to work and must be strictly controlled and forced to work.

The Theory Y manager provides leadership to employees using motivational techniques that produce greater satisfaction, productivity and interest in learning than what the Theory X manager will provide. Organizations need to consider the type of work, the work environment, the work group size and other factors when adopting either a Theory X or Theory Y approach. The following website provides more information on McGregor’s Theory X and Theory Y: http://www.netmba.com/mgmt/ob/motivation/mcgregor/. Skinner’s Behavioral Reinforcement Theory

B. F. Skinner’s theory of behavioral reinforcement explains how principles of behavior can be used to train people or to shape their behavior. People’s behavior is influenced by consequences; therefore, management may influence employees’ future behavior by the way it reacts to current behavior. Behavior modification provides employees with immediate knowledge of the results of their behavior. Desired behavior is recognized and rewarded; undesired behavior is ignored or punished. Using behavior modification, a facilitator may apply the following strategies in a learning situation: 

Positive reinforcement. Giving a reward to induce desired behavior or to encourage the person to repeat the behavior.

Module 5: Training and Development



Section 5.1: Training

Negative reinforcement. Avoiding an undesirable end result by giving the person a reward when a desired response is displayed.



Punishment. Responding negatively to discourage undesirable behavior.



Extinction. Giving no response. When behavior is not reinforced (positively, negatively or via punishment), the behavior will eventually become nonexistent. .

Barriers to Motivation Most people have barriers against learning and change. As much as they may want to learn and make changes, they are held back because of certain barriers, such as the following: 

Lack of confidence in their ability to learn or succeed at the task



Lack of interest because there is no perceived benefit



Lack of time or money or presence of scheduling problems



Lack of cognitive ability needed to pay attention and remember

To see a description of GE’s Training and Development philosophy and programs, visit the following website: www.ge.com/citizenship/our-priorities/our-people/training-development.html.

Developing Training New Employee Orientation New employee orientation programs ease the transition to a new environment and maximize the contribution of employees once they start their new assignment. In the short term, it helps support the day-to-day functioning for new employees. In the long term, it helps employees interact with other employees in harmony with the organizational values.

Module 5: Training and Development

Section 5.1: Training

In their book, HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals, Shawn A. Smith and Rebecca A. Mazin identify the following common elements for effective orientation programs: 

An explanation of organizational goals, mission and vision



Introductions of supervisors, managers, leaders and executives (these introductions may take the form of a pre-recorded message from executives)



A review of the company history, structure, and organization chart to identify each attendee’s organizational role in the department



Distribution of the employee handbook, with a review of crucial policies



An introduction to and overview of any benefits plans



A tour of the facility, perhaps with product demonstrations, a view of manufacturing processes, or other organizational highlights



A review of emergency, safety and security procedures



A discussion of any outstanding logistical details, such as pay cycles and deadlines for benefits enrollment (Smith and Mazin 2004)

Over a period of time, the orientation program enables employees to become committed members of the organizational team. When conducted successfully, it results in faster and greater productivity as well as engagement. Module 2: Recruitment and Selection provides more detail on new employee orientation.

Training Analysis, Design and Development Process The process for developing training programs is similar to the process for developing software or a new product or service. The process begins with an analysis stage and proceeds through design and development. There are many models for the training development process, but the standard and most frequently used process is referred to as the ADDIE model.

Module 5: Training and Development

Section 5.1: Training

ADDIE stands for: 

A = Analysis



D = Design



D = Development



I = Implementation



E = Evaluation

As you can see in Figure 1-4, the ADDIE model is cyclical. The success of each phase depends on the time, effort and resources spent on the previous phase. For example, if the analysis is skipped because members of the organization feel they know what the problem is, the program design might not address the cultural differences of the audience or contain the content necessary to address the most important needs. Each phase of the ADDIE model is described in detail below.

Figure 1-4. The ADDIE Model Needs Analysis The first phase of the ADDIE process is needs analysis or assessment. A needs analysis is the process used to identify and document the organization’s developmental needs. Gaps between actual and desired performance are identified. When those gaps suggest a lack of employee knowledge or skill, objectives are created to address training needs.

Module 5: Training and Development

Section 5.1: Training

The analysis phase can be used to identify the following: 

The organization’s goals



Gaps between current and future performance



Types of programs needed



Identification of mandatory training



Target audience



Expected challenges and areas of potential learner resistance



Baseline information to check effectiveness



Limitations for cost-effective program



Resource and logistical limitations

Sometimes organizations develop and implement programs without conducting an analysis. Figure 1-5 summarizes various reasons that organizations choose not to conduct needs assessments.

Reasons Organizations Do Not Conduct a Needs Analysis 

Lack of support for the needs analysis process



Time-consuming and expensive



Not easy to summarize findings into objective data



Managers may prefer action over research



Demands from senior managers sometimes take priority



Lack of knowledge about how to conduct an analysis

Figure 1-5. Reasons Organizations Do Not Conduct a Needs Analysis Types of Needs Analysis

A complete needs analysis will explore three types of possible development needs: organizational, task and individual. Figure 1-6 briefly describes what is measured in each of these three types.

Module 5: Training and Development

Type Organizational

Section 5.1: Training

Definition Identifies the knowledge,

Measures 

Where is training needed in

skills and abilities

the organization?

employees will need in the 

What are the conditions

future

under which training will be conducted?

Task

Compares job



What needs to be taught?

requirements with



What training is mandatory?

employee knowledge and



What must be done to perform the job effectively?

skills to identify areas that need improvement Individual

Focuses on individual



Who should be trained?

employees and how they



What kind of training do they

perform their jobs, usually

need?

during performance reviews Figure 1-6. Three Types of Needs Assessment Conducting a Needs Analysis

The time spent in conducting a needs analysis differs according to the type (shown in Figure 1-6) of assessment that is conducted. There are five basic steps to conduct the analysis, as shown in Figure 1-7.

Module 5: Training and Development

Section 5.1: Training

Figure 1-7. ADDIE Model – Needs Analysis Step 1: Gather data to identify needs. Selecting a needs analysis strategy that will produce high-quality information requires effort. A number of different methods are available for collecting data. Using more than one method helps validate the data by collecting different types of information through different methods. For example, questionnaires provide factual information, and follow-up interviews can explain why people answered questions as they did. Participants should represent a cross section of the target audience and include varying experience levels. Otherwise, the sample may not be valid, and training may be effective only for the small part of the total population questioned.

Module 5: Training and Development

Section 5.1: Training

Step 2: Decide needs that can be met by training. Training is not a solution for employee relations problems such as poor morale or lack of motivation. Examples of needs that can be met using training are as follows: 

How to use a new program or system



Learning about new product information



Learning a new sales technique



Implementing a new or modified process



Skill enhancement needs

Step 3: Propose solutions. After a performance/competency gap is identified and it is decided that a training program or intervention is a potential solution, all possible solutions should be identified and examined for their ability to address the problem. Step 4: Calculate potential cost of training. In this step, the value and cost of a training program must be justified in order for it to occur. HR professionals must identify the cost per trainee against the potential value to the organization for each of the proposed solutions from Step 3. In calculating the cost of training, employers also need to consider whether and when they must pay employees for the training time. Organizations traditionally think of training as a cost or an investment. If the training is seen as a program that will support the vision, mission and goals of the organization, it will have a better chance of being approved. If training programs can show their worth, they will be viewed as an investment rather than as an expense. The cost of individual training programs can be figured using traditional cost accounting principles. The steps are listed here with a simplified formula shown in Figure 1-8: 1. Calculate the total cost of the training. 2. Divide the cost of training by the number of trainees.

Module 5: Training and Development

Section 5.1: Training

Figure 1-8. Simplified Formula for Cost of Training 3. Calculate the savings or benefit (often a more difficult activity). 4. Compare the cost per trainee to the expected improvement or savings. Step 5: Choose and implement the training. Once all costs have been calculated and compared, it is time to select the most appropriate training program and continue through the ADDIE model process. Design During the design phase of the ADDIE process, training and human resource personnel make decisions regarding course content and structure, course goals and objectives, delivery methods, and implementation strategies. “Before training can be undertaken, a number of critical stages need to be satisfied. For training and development to be the right answer is rather dependent on first asking the correct questions. …Although training is often thought of as a single event, in reality planned training is a continuous process which begins with identifying the learning that is required.” (Leigh 2006) The result of the design phase is a rough outline of what the final program will look like. All major content components are described, including the order and method in which they will be presented. Design includes the following tasks: 

Composing goals and objectives



Defining the target audience



Deciding how to develop the training program

Module 5: Training and Development

Section 5.1: Training

Composing Goals and Objectives

Effective instructional design is based on a concise statement of the goal of the program and of the objectives that describe what participants will do and learn. The goal is a clear statement, usually in one sentence, of the purpose and the intent of the program. The goal consists of three parts: 

Who is the training for?



What is the training about?



Why is the training being conducted?

Objectives describe what participants will be able to do at the end of instruction, and they provide clear reasons for teaching. Objectives should describe the intended result of instruction, not the process of instruction itself. Objectives are based on the goal of the program, and they should do the following: 

Provide a focus for selecting and designing instructional content



Alert participants as to what they should know by the end of the program



Assist in ensuring knowledge and skill transfer



Provide a means of measuring whether participants have gained the appropriate skills and knowledge

The purpose of objectives is to help participants, facilitators and management make training programs more effective. The objectives should also support performance planning initiatives and development of individual competencies. Well-written objectives use action verbs such as identify, list, describe, define, operate and compare as opposed to terms such as understand or learn about.

Module 5: Training and Development

Section 5.1: Training

This model outlines a way to compose SMART objectives. It provides an easy way to remember to include these five elements in each objective: 

Specific objectives outline exactly what the learner hopes to accomplish.



Measurable objectives can be evaluated to decide whether they have been accomplished.



Action-oriented objectives describe the actions the learner will be able to take.



Realistic objectives are attainable; they are not so difficult that the learner cannot achieve them, and they are not so simple that the learner will not be challenged.



Timely objectives outline actions the learner can apply immediately.

Defining the Target Audience

When conducting an initial needs analysis, the target audience is identified. When designing the training, the target audience’s abilities, talents, prior knowledge, skills, attitudes, motivation, perceptions and resources must be taken into account. The principles of adult learning and learning styles are also important aspects of program design. Deciding How to Develop the Training Program

A key decision that must be made at the beginning of the process is whether to develop a training program in house or to purchase it off the shelf or customized. Figure 1-9 lists the advantages and disadvantages of in-house versus off-the-shelf or customized programs. This information may help HR professionals decide on the most effective way to develop the training program.

Module 5: Training and Development

Section 5.1: Training

Advantages

In-House



Knowledge of organization’s

Disadvantages



culture is useful.  

Learning objectives can be

Development time may be lengthy.



Training staff, if any, is often

tailored to specific needs.

overloaded with administrative

Management may buy in more

duties.

quickly; trust has already been



Expertise is often not on staff.

developed. Externally

Off the Shelf

Provided:



Off the Shelf and

Training is immediately available.



Customized

Developer’s expertise is

specific needs. 

There is usually a need for

usually available to the

orientation to assist in

organization to assist in

understanding the corporate

tailoring the product to meet

culture.

specific needs. 

Training does not always target



It is often less expensive than developing in-house

It may not be possible to customize the product.



It can sometimes be expensive.

programs. Customized Customized



It can sometimes be expensive.



It may require a lot of time to

Training is designed to meet specific needs of organization.



develop.

Practical applications for the organization.



Staff spends fewer hours away from work.

Figure 1-9. Advantages/Disadvantages of Designing In-House or Externally Provided

Module 5: Training and Development

Section 5.1: Training

When the training is purchased off the shelf, it is important to provide the instructor with some information on the company culture. This information has greater value if the course goals are for soft skill improvement. For teamwork and communication skills type of training programs, the instructor should know where the audience stands and what the current relationships are. If there is a major gap between the current state and the requested state, the course content may be thought of as not applicable, and resistance may occur. Development The third phase of the process is development. At this point, a needs analysis and the design of goals and objectives have been successfully completed. During the development phase, the training team makes a decision on the most appropriate method of delivering the training. Then materials are created, purchased or modified to meet the objectives that were created during the analysis phase. Training Delivery Methods

Training delivery methods are the approaches for teaching the content. Delivery methods serve two vital purposes: 

They provide a means for participants to learn the program content.



They keep participants interested and involved, so the learning is enhanced.

When deciding which methods to use in a training program, you can ask the following questions: 

What are the learning objectives of the program?



What are my cost limitations?



What is the time frame of the program?



What equipment is available for delivering the program?



Who is my audience?

Figure 1-10 lists several common training-delivery methods.

Module 5: Training and Development

Delivery Method Classroom training

Section 5.1: Training

Description Classroom training is face-to-face training, usually led by an instructor or facilitator. The face-to-face classroom structure allows for the use of several learning methods, such as the following:

Self-directed study



Presentations and lectures



Case studies



Demonstrations



Group discussions



Simulations

Self-directed study, sometimes combined with other methods, allows participants to learn at their own pace through a collection of training materials. Here are examples of training materials: 

Workbooks



Web-based materials



Job aids

Figure 1-10. Training Delivery Methods (continued on next page)

Module 5: Training and Development

Delivery Method

Section 5.1: Training

Description E-learning is the delivery of formal and informal training and

E-learning

educational materials, processes and programs using electronic media. E-learning includes the following: 

Web-based learning



Computer-based training (CBT)



Virtual classrooms

E-learning can be synchronous or asynchronous. 

Synchronous: Participants interact together in real time—for example, in a virtual classroom or for an online discussion at a specific time.



Asynchronous: Participants access information at different times and in different places—for example, accessing and completing a web-based training course.

On-the-job

On-the-job training (OJT) is training provided to employees by

training

managers and supervisors at the actual worksite. The instructor uses demonstration and actual performance of job tasks to train the employees. Figure 1-10. Training Delivery Methods (continued on next page)

Module 5: Training and Development

Delivery Method Blended learning

Section 5.1: Training

Description Blended learning is an approach that includes a combination of methods. Based on the needs of the target audience and the learning objectives, blended learning may be more effective than a single strategy. “One of the most important factors in creating blended learning solutions is to recognize where they fit in the broader context of organizational learning and development. …The potential of blended learning is almost limitless and represents a naturally evolving process from traditional forms of learning to a personalized and focused development path” (Thorne and Mackey 2007). Combined methods may include any the following: 

Classroom



E-learning



Self-paced study



Job aids



Coaching



On-the-job training

Figure 1-10. Training Delivery Methods (concluded) Once the delivery method is decided, the primary activity is to create (or revise) course materials that will be used in the training program. Sometimes an existing course, with minor changes, may be acceptable to meet specific needs. Using learning content that exists in the organization avoids reinventing the wheel, saves overall cost and helps with consistency. If using content previously created is not possible, a new course must be developed.

Module 5: Training and Development

Section 5.1: Training

Presenting Small Scale Training

Many times HR is responsible for presenting training (for example, for new hires). The following list provides suggestions on how to effectively prepare and present small scale training: 

Provide content in small training blocks.



Set a positive, productive tone for the training session.



Practice active learning principles.



Consider a variety of learning styles by using different methods of presenting information.



Visualize content with charts, pictures and graphs.



Train people on skills and information that are immediately applicable on the job.



Engage trainees in tasks requiring action.



Address real-life scenarios and barriers that participants believe they will encounter when they apply the training on the job.



Provide reference materials and job aids for review after the session.



Assign or self-select a training partner.



Collect feedback from the trainees after the training.

Use of Copyrighted Material

When HR and training personnel within an organization are using an existing training program or developing a new course, keep copyrights in mind. Copyright, enacted by most governments, gives exclusive rights to the author or creator of an original work, including the right to copy, distribute and adapt the work. Copyright does not protect ideas, only their expression. Rights are usually granted for a specified and limited period of time. During the effective period, copyright protection allows the creator of the work to control how it is used. It is essential to remember to reference/cite any content written by another author when developing training materials. Copyright legislation differs from country to country. While no single law universally extends copyright protection worldwide, a number of agreements, © 2012 SHRM

Module 5: Training and Development

Section 5.1: Training

treaties and conventions made between various countries provide for copyright protection across borders. Implementation In the implementation phase, the program is delivered to the target audience. This is the most visible phase in the ADDIE process. Success will be measured on the learning that takes place during the delivery of the program. At this point, the primary responsibility for that success is in the hands of the trainer. The primary tasks of implementation are listed below: 

Pilot program



Revising content



Scheduling the program



Announcing and executing the program

Pilot Program

A pilot program offers the program in a controlled environment with a small sample of the target audience, including managers. The purpose of the pilot program is to identify potential problems and assess initial effectiveness before the program is offered to the entire target audience. A pilot program gives HR and training personnel a chance to do the following: 

Evaluate the sequencing of the content and the level of detail



Measure the effectiveness of the learning activities



Assess the time allotted



Examine the physical space in which the program will occur



Establish support for the program from key stakeholders

The pilot program provides useful feedback and identifies potential content or deployment problems before program launch. Feedback from the participants of the pilot audience will be used in the next step, revising content.

Module 5: Training and Development

Section 5.1: Training

Revising Content

Based on the results of the pilot program and on feedback from the pilot audience, training personnel will revise the content and make last adjustments before final delivery of the program. Revisions made in this phase may involve the elimination of ineffective learning activities or changes required to give more or less time to specific segments of the program. Scheduling the Training Program

Organizations can be unpredictable environments, and attempting to coordinate all the details of a training program can be challenging. The main goal is to ensure that the participants attend training at a time when their attention will be focused on the learning task. Scheduling the program involves paying attention to the following aspects of the training: 

Target audience



Intended learning outcomes



Deadlines for completion



Participation at a distance



Selecting a qualified trainer



Logistics

Selecting a Trainer

Effective trainers have characteristics that make them suitable for leading a training session. Trainers have different styles and different ways of leading their sessions. The choice of trainer will be influenced by the training method and the target audience. Trainers can be selected on the basis of a variety of factors. Selection criteria should be decided early in the process and be based on the cultural and learning needs of the audience. Important factors to consider during the selection process are listed here:  © 2012 SHRM

Training expertise 31

Module 5: Training and Development



Subject matter expertise



Consulting skills



Credibility with the local audience



Qualifications, education and certification



Cultural familiarity



Communication and language expertise

Section 5.1: Training

Finding all the required characteristics in one individual may be difficult. Pairing trainers is an effective strategy that may allow for larger groups and at the same time reduce the stress on the primary trainer. Logistics

Before a training program is delivered, HR and training personnel must consider the following logistics: 

Location. The location of the program can affect its effectiveness. The choice of a training facility will depend on the target audience, the methods and media to be used, special needs such as computer terminals or simulation aids, the length of the program and whether the budget allows for travel costs. o On-site facility options may include classrooms, labs, learning centers or conference rooms. On-site facilities are convenient and economical, but the space must be conducive to effective training and free of job site-related interruptions. o Off-site training is often selected for multiday programs. A new environment can help make participants more involved, and there will be fewer job-related interruptions. Trainer and participant travel must be arranged and budgeted. More administration is required to handle the logistics.

Module 5: Training and Development



Section 5.1: Training

Equipment and environmental concerns. A number of environmental factors must be considered to maximize learning and retention. Breaks should also be planned to keep participants refreshed and alert. Here are some considerations for comfortable classrooms: o Good seating o Acoustics o Vision sight line o Room temperature o Ventilation o Lighting o Media equipment



Space requirements and facility availability. Adequate space must be available; participants must not feel crowded or uncomfortable. Different types of training have different space requirements. For example, interactive training such as role playing and team exercises requires more space than presentations.



Seating arrangements. Seating arrangements will depend on the type of training and the size of the group. General types of seating include classroom/theater, banquet, circle and rectangle. Figure 1-11 outlines the advantages and disadvantages of various types of seating arrangements.

Announcing and Implementing the Program

Promoting and advertising a new training program is an effective way to increase interest in the program. Giving participants the opportunity to preview the topics and agenda will help increase interest, motivation, attendance and learning. This activity may be even more important in situations where cultural or other types of participant resistance may be expected.

Module 5: Training and Development

Arrangement Classroom/theater

Section 5.1: Training

Advantages

Disadvantages



Suited for large groups



Low interaction



Great for presentations



May be hard to hear or see trainer

Banquet



Suited for large groups



Can easily be broken into



Some participants seated with back to the trainer

small groups for interaction  U shape

Good for small interactive



Not suitable for large groups



Not suitable for large groups



Easy for participants to feel

groups

 Circle

Good for small interactive groups

Chevron



Suited for large groups



Great setup for PC-based

disconnected if sitting at PC

training

terminals

 Rectangle

Good for small interactive



Not suitable for large groups

groups

Figure 1-11. Advantages and Disadvantages of Types of Seating Arrangements

Module 5: Training and Development

Section 5.1: Training

Evaluation Evaluation, the final phase of the ADDIE model, involves measuring the effectiveness of the training. Evaluators will compare the program results to the established objectives to decide whether the original needs were met. When evaluating training results, evaluators will look at the following indicators: 

Participant reactions



Retention of new information



Application of new procedures



Changes in behavior on the job



Changes in organizational performance

Evaluation is such a meaningful part of the process, yet organizations often overlook this step. Training program evaluations have the following goals: 

Determine whether a program achieved its objectives



Identify best practices as well as the strengths and weaknesses of individual programs



Help the organization evaluate the cost-benefit ratio of training



Identify which participants benefited the most and least from the training effort



Gather data to help design, create and market future programs.



Decide whether the program content and learning methods were appropriate



Create a database of information to assist in future strategic decision making

Transfer of Learning

When the effectiveness of the training program is measured during the evaluation phase, HR professionals can validate their contribution to organizational goals and objectives. Training program evaluation is also essential to the evaluation of the transfer of learning.

Module 5: Training and Development

Section 5.1: Training

Transfer of learning is the effective and continuing on-the-job application of the knowledge and skills gained through the training experience. Learning is an important result for human resource development programs, but the organization needs the participant to apply the new skills and knowledge at the worksite. Ideally, the participant will also share the new skills and knowledge with coworkers. Levels of Training Evaluation

There are several models for evaluating training programs. Let’s focus on the well-known model developed by Donald L. Kirkpatrick (Kirkpatrick 1998), who identified four levels of training evaluation. Kirkpatrick’s model focuses on evaluating effectiveness after the program has been conducted. Figure 1-12 summarizes each of the four evaluation levels.

Level 1. Reaction

What Is Evaluated?

Data-Gathering Methods

How participants felt about the



Checklists

program



Questionnaires (see Figure 1-13 for a sample Evaluation Form)

2. Learning



Interviews

How participants increased or



Post-measure tests

changed their knowledge, skills



Pre-/post-measure tests

and attitudes



Pre-/post-measure tests with control group

Figure 1-12. Levels of Evaluation (continued to next page)

Module 5: Training and Development

Level 3. Behavior

4. Results

Section 5.1: Training

What Is Evaluated?

Data-Gathering Methods

How participants changed their



Performance tests

behavior on the job



Critical incidents



360-degree feedback



Simulations



Observations



Progress toward organizational

How the program affected the

objectives

organizational goals 

Performance appraisals



Cost-benefit analysis



Return-on-investment analysis

Figure 1-12. Levels of Evaluation (Kirkpatrick 1998)

Module 5: Training and Development

Section 5.1: Training

Figure 1-13. Training Evaluation Form

Module 5: Training and Development

Section 5.1: Training

Cost-Benefit Analysis

During the fourth level of training evaluation, an organization may decide to use the data collected at each level to complete a cost-benefit analysis, also known as a return-on-investment (ROI) analysis, to evaluate results of the training. Cost-benefit analysis is a financial review of various options to decide if the benefits are greater than the costs. The organization calculates the return on investment produced by the training. This level of analysis is usually conducted only for 10% to 20% of all training programs because the collection and analysis of data is usually time consuming and expensive. Computing the return on investment of training involves the following tasks: 1. Isolating the effects of the training 2. Converting these effects (benefits) into monetary values 3. Calculating the costs of the training 4. Comparing the value of the effects to the costs of the training Additional Training and Development Models In addition to the ADDIE model, the following models may be used in many organizations: 

Dick and Carey Design Model



ARCS Model of Motivational Design (Keller)



Bloom



Gagne

Cultural Learning Perceptions In global organizations, there are cultural considerations. To be effective within a global organization, HR professionals must understand the effect of cultural forces on the implementation of global strategies and on the development of local HR practices. Being global requires that the organization be able to see the view from inside another person’s culture and to use that awareness to create solutions.

Module 5: Training and Development

Section 5.1: Training

There may be various types of cultures in a global organization. The differences between these cultures can create conflict that will interfere with the organization’s ability to apply its global strategic plan. HR professionals in a global organization must therefore understand culture as being very complex with many exceptions because there will always be individuals or groups that resist expectations. Geert Hofstede’s dimensions of culture originate initially from his research during the 1970s into cultural differences at IBM subsidiaries in sixty-four countries. They have since been researched in additional countries and in other occupations and industries. Not all dimensions may be of the same importance in all cultures. Hofstede’s five dimensions are listed in Figure 1-14. The table shows the effect of Hofstede’s dimensions on the practice of global HR. The examples show the effect of culture on the manager and on the person being managed.

Module 5: Training and Development

Dimension

Section 5.1: Training

Definition

Impact on Manager

Impact on Managed

Examples

Power

Extent to which less powerful

Two headquarters’ managers

A British training

High:

distance

members of organizations and

demonstrate the effects of their

specialist goes to



Malaysia

institutions accept unequal

cultures. A Saudi manager:

work for a Malaysian



Latin America

distribution of power



Remains aloof from

domestic company.



Middle East

subordinates

He cannot understand



China

Tends to retain significant

why his attempts to



Indonesia

projects rather than delegate

offer suggestions are



India

them

coldly received and

Expects subordinates to step

why he is receiving

Low:

forward quickly to assume

poor performance



Austria

blame when things go

reviews.



Israel



Scandinavian



wrong

countries A Danish colleague: 

Enjoys sharing assignments



and credit with subordinates 

Always assumes blame for any problems

Figure 1-14. Hofstede’s Five Dimensions (continued on next page)

Module 5: Training and Development

Dimension

Definition

Section 5.1: Training

Impact on Manager

Impact on Managed

Examples

Individualism

Degree to which individuals

A US manager in a Latin

The performance of a

Individual:

/collectivism

are integrated into groups

American country plans to

South Korean sales



Individualism: ties are

promote an individual based on

force improves



Australia

loose; self-reliance valued

her work on an important

dramatically when



Collectivism: strong,

project.

incentives are



Netherlands

changed from



Italy

individual rewards to



Belgium



cohesive groups in which protection is exchanged for loyalty to group

Other managers explain that they use a broader range of

team bonuses.

factors in this decision,

Collective:

including evidence of loyalty.



Latin America



Pakistan



Indonesia



South Korea



China

Figure 1-14. Hofstede’s Five Dimensions (continued on next page)

Module 5: Training and Development

Section 5.1: Training

Dimension

Definition

Impact on Manager

Impact on Managed

Examples

Uncertainty

Level of tolerance of

A compensation specialist

Before beginning a

High:

avoidance

uncertainty and ambiguity;

advises a Singapore company to

project, a French



Greece

extent to which individuals

adopt a different compensation

employee of a global



Portugal

feel comfortable in

plan for its sales force in Japan.

nonprofit asks many



Latin America

unstructured, new or

Unlike the home sales force,

questions to ensure



Belgium

unexpected situations

which has low base pay and

perfect understanding



Japan

high commissions, the Japanese

of the manager’s



France

sales representatives will

expectations.

receive high base pay and lower

Low:

commissions.



Singapore



Denmark



Sweden



Hong Kong



Figure 1-14. Hofstede’s Five Dimensions (continued on next page)

Module 5: Training and Development

Dimension

Definition

Section 5.1: Training

Impact on Manager

Impact on Managed

Examples

Masculine/

Masculine traits:

A Swedish company promotes

An HR department in

Masculine:

feminine



Ambitious, tendency to

employee development

Austria has been



Japan

polarize, preference for

practices such as coaching and

instructed by its



Hungary

speed and size, oriented

mentoring that emphasize

Danish headquarters



Austria

toward work and

providing empathy and support.

to start a new



Venezuela

work/life balance



Italy

achievement A manager in Japan has trouble Feminine traits: 

performing this part of his job.

program. They try, but the program is not

Feminine:

Nurturing, empathetic,

well accepted or



oriented toward quality of

implemented locally.

Scandinavian countries

life, striving for consensus,



Netherlands

favoring small size and



Chile

slow pace



Thailand

Note: In masculine societies, gender roles are distinct, while in feminine societies roles may overlap. Figure 1-14. Hofstede’s Five Dimensions (continued on next page)

Module 5: Training and Development

Dimension

Definition

Section 5.1: Training

Impact on Manager

Impact on Managed

Examples

Long-term/

Long-term orientation:

A Chinese manager faced with

A Nigerian

Long-term:

short-term



Values thrift and

promoting one of two Nigerian

supervisor can’t



China

perseverance

supervisors chooses the one

understand why he



Japan

Orders relationships by

with the most tenure and best

has been passed over



South Korea

status and values

work attendance.

for promotion in his



Brazil

Chinese-owned



India



observation of this

company. He is well Short-term orientation:

placed in his

Short-term:



Values social traditions

community and has



West Africa

and fulfilling social

given his manager



Philippines

obligations; values being

appropriate gifts.



Norway

respected



Expects reciprocation of



greetings, favors, gifts Figure 1-14. Hofstede’s Five Dimensions (concluded) (Hofstede, Hofstede and Minkov 2010)

Module 5: Training and Development

Section 5.1: Training

Language and Interpretation Organizations must recognize the value of translation services for their website, Intranet, employee communications and training programs. Specific country legislation often specifies that all employee-related material be translated into the local language. Translating training programs into the local language will reduce participant resistance and gain support. Although training and human resources professionals may not be legally required to translate the program, the cost of taking this extra step to ensure better participant understanding and retention is likely to be small compared to the total investment the organization made in purchasing or designing and developing the program.

Technology Trends The use of technology in training has changed the methods that training professionals use to design, deliver and administer training. Several trends related to training program development and implementation are described here.

Learning Portal A learning portal is an Internet or Intranet site that provides access to an organization’s database of learning and training resources. Learning portals are often used in conjunction with learning management systems (see below) as a way for training professionals to manage data, provide access to internal training programs and distribute training-related information and resources to employees.

Module 5: Training and Development

Section 5.1: Training

Learning Management System Many organizations have an electronic system called a learning management system (LMS) or learning content management system (LCMS). The LMS and LCMS are used for the following purposes: 

Hold course content information and web-based and computer-based training courses



Track and manage employee course registrations, course completion, and scoring



Manage career development and other employee development activities



Repurpose content to allow multiple uses for the same content

Webinar The Internet has made web conferencing a popular communication tool. Web conferencing is used to conduct live meetings or to give presentations over the Internet. In a web conference, participants sit at their own computer and are connected to other participants via the Internet. This can be either a downloaded application on each of the participants’ computers or a web-based application in which the attendees enter a URL (website address) to access the conference. A webinar is a specific type of web conference. The presenter may speak over a standard telephone line, pointing out information being presented on the screen, and the participants can respond over their own telephones. Webinars typically occur in real time and are characterized by the presence of an actual, live instructor. The presence of an instructor and the opportunity for audience interaction has made webinars a popular delivery choice for training and human resource professionals. This solution provides many of the benefits of live classroom training without many of the costs of bringing the instructor to the audience or the audience to the instructor.

Module 5: Training and Development

Section 5.1: Training

Training and Virtual-World Simulation Computer and electronic simulations are also growing in popularity (for training, networking, entertainment and other uses). Training-related simulations place the learner in a virtual work environment (for example, managing an office or using a new computer system) and present a series of real-life challenges. The learner has the opportunity to practice new skills and make decisions in a low-risk environment. Here are some benefits that simulations provide: 

Appeal to young learners with sophisticated technological expectations



Actively engage individuals in the learning process



Provide opportunities for individuals to learn complex or dangerous skills in a realistic but low-risk environment

Social Networking and Web 2.0 Another technological trend is the growing use of social networking sites and social networking software to expand professional relationships. Social networking sites are rapidly becoming valuable resources that trainers and global HR professionals can use for multiple professional purposes, including the following: 

Identifying and contacting potential suppliers



Controlling learning



Developing mentoring and professional support relationships



Identifying and selecting potential new employees

Module 5: Training and Development

Section 5.1: Training

“The advent of social platforms has challenged traditional work constructs and can be harnessed to drive performance improvement and enterprise excellence. With Web 2.0 technologies, it is important to take advantage of individuals’ natural inclinations to share and learn from one another. Instinctively, employees prefer to turn to peers and colleagues (both virtually and face-to-face) for advice with workrelated queries and problem solving. Web 2.0 is not just about new technology changing the way people communicate; it’s a fundamental shift in the way people perceive learning.” (Haar, Michael 2010)

Module 5: Training and Development

Section 5.1: Training

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Training and Development

Section 5.1: Training

5.2: Performance Management

This section covers the following information from the Body of Knowledge: Behaviors: 06. Monitor completion of performance reviews and development plans 07. Keep records to document employee development and performance Skills & Knowledge: 02. How to give feedback on job performance 04. Policies and techniques for evaluating performance 05. Opportunities for training and development 09. Individual development plans 10. Performance management methods (for example, setting goals, benchmarking, 360-degree feedback, performance incentives)

Section 5.2: Performance Management Introduction ..................................................................................................................................53 Management of Performance in the Organization ...................................................................53 Organizational Values and Goals ...............................................................................................53 Performance Standards ...............................................................................................................54 Performance Management Process ............................................................................................55 Business Results and Employee Growth ....................................................................................57 Organizational Support ..............................................................................................................58 Individual Performance Appraisals ...........................................................................................59 Performance Evaluation Process ................................................................................................60 Individual Development Plans ...................................................................................................73

Module 5: Training and Development

Section 5.2: Performance Management

Introduction Performance management is the process of maintaining or improving employee job performance. Organizations perform this process with the following methods: 

Using performance assessment tools



Coaching and counseling



Providing continuous feedback

This section focuses on two processes: 

Continuous management of performance within the organization



Individual performance appraisals

Management of Performance in the Organization The performance management process in an organization allows employees to talk about their performance and development goals with their managers and create a plan for achieving those goals. Development plans and employee actions then contribute to organizational goals and the professional growth of the employee.

Organizational Values and Goals Values and goals reflect organizational structure and philosophy. Executives must come to an agreement as to the values and goals of their organization. Once they communicate those values and goals, employees have a sense of purpose and know where to place priorities. Values Management throughout the organization must display behavior that reflects the organizational values. Values are usually expressed in the organization’s mission statement.

Module 5: Training and Development

Section 5.2: Performance Management

Values are principles, standards, or qualities considered worthwhile or desirable. It is important that employees always conduct business with the organization’s values in mind. The following values are highly regarded: 

Putting the customer first



Treating employees as well as you treat your customers



Conducting business fairly and honestly



Showing creativity and innovation



Using teamwork to achieve goals

Goals Management must also be specific about the organization’s goals. Goals are the standards that reflect the success of the organization. By comparing organizational goals with levels of achievement, management can get a good idea of whether the organization is progressing at the rate desired.

Performance Standards Performance standards are the behaviors and results that management expects of the employees.

Module 5: Training and Development

Section 5.2: Performance Management

The HR professional needs to consider the following when creating and communicating performance standards: 

Behaviors. What does the organization want employees to do? These behaviors have to be translated into performance standards.



Results. What does the organization want employees to produce?

When performance standards are communicated throughout the organization, they must be clearly defined, so all employees understand the expected behavior. Employees must be told what management expects for performance. This instruction can be delivered in a number of ways: 

Orientation



Employee handbooks



Company or department meetings



Newsletters

Performance Management Process In most organizations, the performance management process includes three phases. Each phase has a unique set of activities, considerations, and outcomes. These phases are shown in Figure 2-1.

Figure 2-1. Phases of the Performance Management Process

Module 5: Training and Development

Section 5.2: Performance Management

Design During the design phase of the performance management process, the following important decisions are made: 

Who will evaluate?



When will evaluations be completed?



What criteria will be used?

Questions that must be answered during this phase include the following: 

Purpose o Why do we have a performance management process? o What do we expect from it?



Performance criteria o What standards will we use to evaluate employees?



Instrumentation o How will the evaluations be done? o What tools will be used?



Evaluators o Who will complete the evaluations?



Integration/local differentiation o How will the process and performance standards differ in different countries and locations?

Implementation The implementation phase involves the following activities: 

Communicating expectations regarding job performance and how performance will be evaluated



Providing training in the performance management process



Communicating the performance management process to both employees and managers



Providing performance incentives to motivate employees

Module 5: Training and Development

Section 5.2: Performance Management

Keeping in close contact with managers and employees during implementation is critical. Respond quickly to questions and feedback from managers and employees by providing solutions to recurring problems and questions if possible. Evaluation The evaluation phase involves identifying and evaluating the results of the performance management process. The following outcomes are evaluated: 

Overall fit with the organization’s culture and objectives



Fairness to employees



Effectiveness and extent to which the process supports the organization’s recognition and reward system

Business Results and Employee Growth Business results. Organizations will assess the effectiveness of the performance management system by asking certain questions: 

Are the employees’ behaviors and results what management expected?



Is the organization progressing as planned?

The business results impact the goals and strategy of the organization. As business goals and strategies change, the performance management system will need to be adjusted. Business results provide value to stakeholders and may affect the following: 

Financial earnings



Business processes



Quality outcomes



Customer products or services

Employee growth. The employee brings certain knowledge and skills to the job but will also grow professionally through experience, performance improvement plans and organizational support. The performance management system must include fair and meaningful recognition and rewards. Job satisfaction surveys

Module 5: Training and Development

Section 5.2: Performance Management

have shown that employees do value financial rewards, but the following performance incentives keep employees in an organization: 

Appreciation/recognition



Career growth opportunities



Good manager relationships

Organizational Support There are several ways an organization can support and enhance its performance management system: 

Show support of performance management at the executive level.



Encourage and promote employee engagement activities.



Train managers in performance management.



Hold managers accountable for their contributions to the performance management system.



Encourage continual feedback from managers, peers and other team members.



Make it clear to everyone in the organization that performance management is more than a yearly appraisal.



Provide necessary resources and tools.



Communicate consistent management practices.

Module 5: Training and Development

Section 5.2: Performance Management

Individual Performance Appraisals The typical method of measuring employees’ adherence to performance standards and of providing feedback is the performance appraisal. Performance appraisal is the process that measures the degree to which an employee accomplishes work requirements.

According to Gary Dessler in his book Human Resource Management, there are four reasons to appraise employees’ performance: 

From a practical point of view, most employers still base pay and promotional decisions on the employee’s appraisal.



Appraisals play an integral role in the employer’s performance management process. It does little good to translate the employer’s strategic goals into specific employees’ goals, if you don’t periodically review performance.



The appraisal lets the boss and employee establish a plan for correcting any deficiencies and to reinforce the things the employee does right.



Appraisals should serve a useful career planning purpose. They provide an opportunity to review the employee’s career plans in light of his or her exhibited strengths and weaknesses. (Dessler 2008)

Module 5: Training and Development

Section 5.2: Performance Management

What is the difference between performance management and performance appraisal? Performance management is the process of maintaining or improving employee job performance. By communicating and defining performance standards throughout the organization, development plans and employee actions can contribute to organizational goals and the professional growth of the employee. Performance appraisal is the process that measures whether an employee accomplishes work requirements.

Performance Evaluation Process Remember, the organization’s goals are the standards that reflect the success of the organization. Managers need to help convert the organization’s business goals, objectives, and performance standards to individual employee goals. This conversion is accomplished when the employee and the performance manager talk about performance goals and create a plan for achieving those goals. This process is called performance evaluation. Figure 2-2 shows the phases of the performance evaluation process.

Module 5: Training and Development

Section 5.2: Performance Management

Figure 2-2. Performance Evaluation Process

The performance evaluation process is an ongoing communication process between a manager and an employee. Together they do the following: 

Set goals.



Meet regularly to talk about progress on projects, plans and goals.



Update goals and plans throughout the year as needed.



Document the results and meet to review them annually.

Setting Goals

The manager and employee decide on performance goals by considering the following: 

Strategic planning process



Organization’s goals and objectives



Employee’s job description



Past performance



Employee’s desired accomplishments and development objectives/goals

Performance goals communicate the expected level of performance as well as how performance will be measured in each area of the job description. Some goals relate to the duties of the job and are easy to observe and measure. Other goals relate to the employee’s behavior. Observation

The coaching or mentoring that takes place between the employee and a colleague/mentor must be consistent to ensure continual feedback to support the employee’s performance success. Self-Assessment and Manager Assessment

Module 5: Training and Development

Section 5.2: Performance Management



Reviews information related to employee performance



Completes the performance evaluation form



Obtains feedback from an HR manager and peers or subordinates

The assessment must be objective and focus on actual performance. It must also refer back to any documentation of performance issues. Errors and bias are described in detail in the Errors in Performance Appraisals subsection of this module. Two tools managers commonly use in this effort are performance logs and critical incidents. 

Performance logs are informal notes listing examples of employee accomplishments and/or deficiencies.



A critical incidents tool is a record of positive and negative employee actions.

The manager’s ability to talk objectively about issues is critical to the success of the performance evaluation. The more a manager prepares for the evaluation meeting, the more successful the results. Employee’s self-assessment. Some organizations ask employees to complete a self-assessment prior to the evaluation meeting. Employees use a performance evaluation form to complete their self-assessment. This process advances the dialogue between the manager and the employee. Self-assessment and manager assessment combined. If the employee uses a self-assessment, the evaluation is usually structured around these action areas: 

The employee provides the self-assessment.



The manager adds comments about the employee’s assessment. Positive comments are provided first, followed by suggestions for improvement.



The manager and the employee talk about problems and agree on steps.

Module 5: Training and Development

Section 5.2: Performance Management

Evaluation

After the review, the manager and the employee will agree on new goals in a separate session. The focus is now on setting goals that will affect the employee’s future performance. It is important that the employee sees a direct connection between his or her personal objectives and those of the organization. Involving employees in setting their own goals is key. Being a part of the process leads to greater acceptance. The manager can use the following approach for a successful evaluation process: 

For long-term objectives, provide short-term milestones that help measure progress along the way.



Give employees the support they will need to reach their objectives (for example, tools, training, coaching or special projects).



Ensure that objectives do not conflict with each other.



Follow up to see how the employee is proceeding and provide timely feedback.



Encourage review of successes and obstacles.

Evaluation Methods An organization’s decisions about evaluating performance are usually influenced by the industry in which it competes as well as by its culture. A common approach to performance appraisal involves the employee and the direct supervisor. Methods available for conducting an appraisal are described briefly below. 360-Degree Feedback

In some company cultures and environments, peers may be asked to provide input on an individual’s performance. This input may be supplied using a 360-degree feedback approach to performance appraisal. The 360-degree feedback approach evaluates performance using self, peers, direct reports, management and sometimes even customers and suppliers. It benefits the

Module 5: Training and Development

Section 5.2: Performance Management

employee by providing feedback from a variety of sources and basically serves as a development tool for altering behavior. Benchmarking

Jon A. Christopherson, David R. Carino and Wayne E. Ferson define benchmarking as, “…the process of finding a quantifiable standard against which to measure one’s performance. Benchmarking seeks to determine whether the performance of our investment is than what we could have obtained using a simpler or less costly investment plan.” (Christopherson, Carino and Ferson 2009) Category Rating Methods

The category rating methods are the easiest to administer and understand. The manager marks an employee’s level of performance on a designated form that is divided into performance categories. The following are three category rating method examples: 

Graphic scale: This method uses a five-point scale, with ratings ranging from Exceptional to Needs Improvement.



Checklist: Check marks are placed next to characteristics describing employee performance.



Force choice: Check marks are placed by two of four statements from a combination of positive and negative statements describing what the employee is most like and least like.

When dealing with appraisals, always consider cultural differences—grading and scale systems are very different. People understand the rating scales from their own experiences. Here are examples of differing rating scales: 

Eastern Europe—Russia: 1 (very bad) – 5 (very good)



Western Europe—Germany: 1 (very good) – 5 (very bad)



US: A (very good) – F (failed)



Canada: Level 4 (very good) – Level 1 (passed)

Module 5: Training and Development

Section 5.2: Performance Management

At OBI, a 5-scale program has been implemented for appraisals. For more information, visit the following website: http://www.shrmindia.org/team-efforthelps-make-worldwide-performance-evaluations-consistent. Comparative Methods

Comparative methods of evaluation require the manager to compare employees’ performance. The following are three comparative method examples: 

Ranking of all employees: Employees are ranked from highest to lowest in performance.



Paired comparison: Each employee is compared with every other employee, one at a time.



Forced distribution: Employee ratings are distributed on a bell curve.

Narrative Methods

Sometimes managers are required to develop narrative evaluations: 

Essay: The manager writes an essay describing the employee’s performance.



Critical incidents: The manager keeps a written record of positive and negative employee actions.

Special Methods

Special appraisal methods overcome some of the difficulties associated with appraisals: 

Management by objectives (MBO). Management by objectives (MBO) is frequently used by managers to appraise employees. Employees help identify objectives for themselves, defining what they intend to achieve within a specified time period. The objectives are based on overall goals and objectives for the organization. After the employee identifies goals and objectives, a dialogue between the employee and the manager must take place to ensure they both agree with the goals and objectives. The goals and objectives must still reflect the goals of the organization.

Module 5: Training and Development



Section 5.2: Performance Management

Behaviorally anchored rating scale (BARS). The behaviorally anchored rating scale (BARS) method enhances the category rating. The manager describes the employee’s behavior associated with each level of performance. BARS works best in situations where many employees are performing the same tasks. This method requires a lot of time and energy to develop and maintain. In addition, different BARS must be developed to measure employee performance for different jobs.



Competency models. A competency model identifies the competencies needed to perform a specific role in a job, organization or profession. Simply put, a competency model helps define what people need to know and to do to be successful. For several decades, business and industry have used competency models to select and develop their employees and for workforce planning purposes (American Society for Training and Development 2010).

Module 5: Training and Development

Section 5.2: Performance Management

Here is an example of a typical competency model that includes behavioral anchors as a three-rating scale: Competency: Deadline Management Description of three rating options: 

Exceeds expectations: Frequently provides the required performance earlier than the schedule deadlines require. Constantly monitors critical stages in order to ensure that projects are executed in compliance with the time schedule.



Meets expectations: Always completes tasks in compliance with schedules or deadlines.



Occasionally meets expectations: Does not achieve any on-time service provision. Must often be reminded of compliance with deadline specifications.

Behavioral examples for “meets expectations”: 

Fulfills tasks by the planned deadlines



Keeps promises



Assumes responsibility



Initiates measures in order to ensure that schedules are adhered to.

Balanced Scorecard

The balanced scorecard is a tool used to evaluate organizational strategies. This tool must accommodate the goals of various strategies. The balanced scorecard approach provides a concise picture of an organization’s performance. Four key areas are assessed in a balanced scorecard:



Finance



Customers



Internal business processes



Learning and growth

Module 5: Training and Development

Section 5.2: Performance Management

Programs should be piloted before they are formally carried out. Ideally, scorecard use should start at the top of the organization, so people have direction and understanding about the total organizational mission and goals.

The balanced scorecard is described in detail in Module 1: HR Administration, Section 1.2 Gathering, Measuring and Reporting HR Data.

Additional information about the organizational use of the balanced scorecard can be found at the website of the Balanced Scorecard Institute, http://www.balancedscorecard.org. Errors in Performance Appraisals No appraisal rating method is entirely foolproof. Figure 2-3 lists some common errors a manager may see when conducting an appraisal of employees and assigning a rating. Performance logs may help reduce these biases.

Module 5: Training and Development

Error Halo/horn effect

Section 5.2: Performance Management

Description A halo effect may occur when an employee is extremely competent in one area and is rated high in all categories. On the other hand, the horn effect may occur when one weakness results in an overall low rating.

Recency

A recency error occurs when a manager gives more weight to recent performance and ignores the employee’s earlier performance during the appraisal period. This situation may happen for the following reasons: 

The manager is unable to remember the employee’s performance from eight or twelve months ago.



Many employees may improve their performance just before their performance review occurs.

Primacy effect

A primacy effect is the tendency to pay more attention at first and then lose attention. A manager may give more weight to the employee’s earlier performance and ignore recent performance.

Bias

When a manager’s values, beliefs or prejudices have an influence on ratings, the error is due to bias. National origin, age, religion, gender, appearance or other non-job-related factors may influence the manager to alter appraisal information. HR should offer training materials or training for managers regarding biases.

Strictness

The employees of a strict manager may be performing better than employees in other departments, but their ratings may be lower. This error occurs when these managers believe the standards are too low and higher the standards make these managers more meaningful in their eyes.

Module 5: Training and Development

Error

Section 5.2: Performance Management

Description A leniency error is the result of managers who don’t want to give

Leniency

low scores, so they give all employees high scores. If an employee is discharged after receiving such an evaluation, the appraisal may contradict the reason for the discharge; therefore, this type of evaluation can cause discontent, and it may be the cause of litigation. In addition, employees who have not received clear, honest feedback have limited opportunity for improvement and future success. That’s why this error does not really help the organization or the employee who is rated. Central tendency

Central tendency errors occur when a manager rates all employees within the same range, regardless of their differences in actual performance. A contrast error occurs when an employee’s rating is based on

Contrast

how his or her performance compares to another employee’s performance instead of on objective performance standards. Although it is legitimate for an employer to rank employees and compare them, their performance must be judged at first against objective standards that are appropriate for them. Figure 2-3. Common Errors in Performance Appraisals (concluded) Appraisal Meeting During the performance appraisal, input from both the employee and manager is necessary for an effective appraisal. Employees need to have a clear understanding of how they are doing in the eyes of their manager and the organization. The appraisal meeting gives the manager an opportunity to talk about the employee’s performance, the rationale behind strengths and weaknesses and suggestions for future development.

Module 5: Training and Development

Section 5.2: Performance Management

Guidelines for Giving Feedback

The feedback guidelines in Figure 2-4 are helpful for the manager when giving performance feedback.

Feedback Guidelines Don’ts

Do’s  

 

Do choose a time and place that allows for



Don’t focus on a specific event.

privacy and lack of interruptions.

(Instead, review the entire

Do give employees a chance to comment

evaluation period.)

on their own performance (both strengths



Don’t focus only on the negative.

and weaknesses).



Don’t focus on personality issues

Do focus first on strengths and then talk

or traits that are not related to job

about areas for improvement.

performance.

Do be specific, not general. (Support



Don’t do all the talking.

feedback with factual information.) 

Do focus on job behaviors, not the person. Figure 2-4. Feedback Guidelines

Action Planning Steps

After the review of the employee’s performance, the manager and the employee work together to create a performance improvement plan that will help the employee meet organizational, departmental and individual goals. At this point in the appraisal meeting, the manager and the employee must do the following: 

Come to an agreement on the appraisal ratings.



Set objectives that the employee is to achieve before the next appraisal period.



Create a plan for how the employee will meet the objectives.



Talk about how the manager will follow up with the employee to see that the objectives are being met.

Module 5: Training and Development

Section 5.2: Performance Management

In addition to looking at past performance against agreed-upon objectives, the performance appraisal is the time for the manager and the employee to talk about the following employee needs, so they can plan for long-term development: 

Training



Other developmental needs



Employee strengths



Interests/ambitions

Documentation In some countries, good documentation can make the difference between winning or losing a lawsuit. More importantly, good documentation plays an important role in the overall fairness of the evaluation system. Up-to-date performance information helps the manager explain the comments in the performance appraisal. Documentation of employee performance can show the reasoning that led to positive or negative actions. Two common documentation practices include the following: 

A performance diary is a record of incidents or tasks performed by the employee. The manager usually keeps the diary.



Performance records are notes that contain unit measures, quantity and quality measures and accounting and cost measures, as they relate to the employee.

All performance documentation must be specific, objective and accurate. Documentation is not only valuable in protecting an organization from a lawsuit but also can be used for the following purposes:



Improve employee performance



Communicate with employees



Form the basis of training and career development activities



Reward and recognize good performance

Module 5: Training and Development

Section 5.2: Performance Management

The following guidelines will assist managers in documentation efforts: 

Document as an event happens.



Keep performance notes on all employees.



Keep observations job related and be objective.



Support your observations with facts.



Focus on the deficiencies, not the perceived underlying cause.



Avoid emotion; write with respect, regardless of the employee’s performance.



Avoid conclusions; provide facts for others to use in reaching logical conclusions.



Keep in mind that others may read your comments.

Individual Development Plans An individual development plan (IDP) is a natural product of the performance evaluation process. IDPs are a valuable performance enhancement and career development tool. Managers who promote the use of IDPs send a clear message to their employees that each person’s professional development is a priority. An IDP focuses on the following: 

The employee’s skills and talents for future jobs



New skills that will help the employee perform better on the job

It requires employees to answer the following questions:



What direction is my organization going in the future?



What will the organization need from its employees?



What positions am I interested in?



What are my goals for the next three years?



What strengths can I build on?



What major weakness could prevent me from reaching my goals?

Module 5: Training and Development

Section 5.2: Performance Management

Employees who are involved in a career development process are more likely to stay with the organization. Working together, a manager and an employee can plan ahead to meet the goals of both the employee and the organization. It is very important that these goals are regularly monitored and that the organization supports the employee to enable him or her to achieve these development plans. You will read more information about individual development and career planning in Section 5.3: Career Development.

5.3: Career Development

This section covers the following information from the Body of Knowledge: Behaviors: 05. Collect information, analyze needs and make recommendations for training and future development programs 07. Keep records to document employee development and performance Skills & Knowledge: 03. Organizational culture (for example, the organization’s vision, mission, values, history, processes and guidelines) 05. Opportunities for training and development 09. Individual development plans 13. Career paths (for example, concepts such as opportunities for job promotion, how employees can grow within an organization)

Section 5.3: Career Development Introduction ..................................................................................................................................77 Career Management ....................................................................................................................78 Managing Career Development .................................................................................................79 Career Development Model .......................................................................................................80 Career Development Programs ..................................................................................................82 Individual Career Planning ........................................................................................................85 Employee Development Programs .............................................................................................85 Unique Employee Needs ............................................................................................................89 Challenges in Career Planning and Development ......................................................................89 Developing Leaders ......................................................................................................................90 Leadership and Management .....................................................................................................91 Leadership Theories ...................................................................................................................93 Issues Affecting Leadership .......................................................................................................98 Succession Planning ...................................................................................................................98

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Introduction Career development looks at how employees and organizations work together to manage the employee’s career objectives. Career development consists of two processes—career management and career planning. 

Career management focuses on the goals of the organization. It involves preparing, carrying out and monitoring employees’ career paths. Employees are involved in career management activities, but the organization provides development programs and opportunities that support its interests, such as staffing and succession planning.



Career planning focuses on the needs of the individual employee. It involves the activities that employees perform to figure out the best course of action for their career. Management and HR professionals often help employees as they assess their skills and abilities to create a career plan.

Figure 3-1 compares the focus of career management to the focus of career planning. This section examines:



Career management practices



Individual career planning



Methods for developing leaders

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Career Management:

Career Planning:

Organizational Focus

Individual Focus



Identify future staffing needs.



Decide training and development

 

Section 5.3: Career Development



abilities.

gaps around organizational needs.



Set personal career goals.

Create professional development



Assess career path options.

programs and strategies.



Design a career plan.

Match organizational needs with



Select professional development

individual abilities. 

Identify personal interests and

Provide access to ongoing learning

opportunities. 

Reassess progress of career on a

opportunities to support future career

regular basis; adjust career goals as

growth.

needed. (Employees are responsible for their own careers.) Figure 3-1. Career Management versus Career Planning

Career Management A good career management program should incorporate and align both the goals of the business and those of the employees. If an organization ignores the personal goals of its employees, the organization may face issues such as the ones listed here: 

Morale problems



Inability to match new organizational requirements with the best-qualified candidates



Loss of outstanding employees

The organization must balance the employees’ needs with the organizational direction and objectives. In addition, employees need to understand the goals of the organization to ensure that they remain a necessary part of the organization. Training and professional development are critical to the success of the organization and its employees. © 2012 SHRM

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Allowing employees to grow with the organization will benefit the organization and the employees.

Managing Career Development Within an organization four key players, listed below, are involved in the career development process. Individual Employees Employees have the primary responsibility for their own career. In the past, employees felt that the organization would lead them through their career; however, the changes in the social contract between employers and employees have made it necessary for everyone to accept responsibility. Individual employees need to be proactive in planning their own careers but recognize that their organization can still support them. Managers Managers should serve as the support link between the individual employee and the organization. There are four roles managers can perform to assist their employees in developing their careers: 

The coach listens, clarifies and defines employee career concerns.



The appraiser gives feedback and explains performance standards and job responsibilities.



The adviser helps set goals, makes recommendations and gives advice.



The referral agent talks to employees about action plans and links them to available organizational resources.

HR Professionals To help employees achieve their career goals, HR professionals design career paths, enlargement programs and enrichment programs. Designing a career path involves several key steps: 

Complete a job analysis to determine the performance requirements of a position and how they link to the organizational goals.

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

Section 5.3: Career Development

Develop a natural progression of jobs that employees can follow that require more knowledge, skills and abilities.



Communicate potential career paths to employees through brochures, booklets, career development workshops, meetings and other methods.



Obtain information from employees and their managers to be entered into a skill inventory database.



Decide training and development needs of employees.

Organizational Leaders The organization’s leaders need to understand the importance of supporting organizational career development and career management. This support promotes a focus on development and creates a more flexible workforce that can adapt to the changing times. There are several ways that top leaders can be involved: 

Link career development to the organization’s mission and vision.



Clearly communicate business goals.



Reward managers who help employees with career planning.



Take part in career development kickoff meetings.



Require annual review of management planning versus actual actions taken.

Career Development Model A career development model usually includes the following stages: 

Occupational preparation



Organizational entry



Early career establishment and achievement



Mid-career



Late career

By understanding the focus of each stage, employees can better manage their careers as they evolve. Organizations will also be able to develop programs to

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manage career transitions and to create career management systems that will meet the needs of both the employee and the organization. The typical stages of career development and the major tasks associated with each stage are summarized in Figure 3-2.

Stages

Major Tasks 

Develop occupational self-image.



Investigate alternative occupations.



Develop initial occupational choice.



Pursue necessary education.



Obtain job offers from desired organizations.



Select appropriate offer.

3: Early career establishment



Learn job.

and achievement



Learn organizational rules.



Fit into chosen occupation and organization.



Increase abilities.



Pursue career dream.



Evaluate early career plans.



Reaffirm or modify career dream.



Make choices appropriate to middle adult years.



Remain productive in work.

1: Occupational preparation

2: Organizational entry

4: Mid-career

Figure 3-2. A Career Development Model (continued to next page)

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Stages 5: Late career

Major Tasks 

Remain productive in work.



Maintain self-esteem.



Prepare for retirement.



Contribute to career development of others at earlier stages.

Figure 3-2. A Career Development Model (concluded)

Career Development Programs Organizations can choose from a wide range of possible career development tools and activities. Organizations with good programs have a variety of these activities. Employee self-assessment tools and other professional development tools are described below. Employee Self-Assessment Self-assessment activities usually focus on a process for employees to identify their career goals and preferences. A self-assessment is a good first step in the career development process, but it should not be used on its own. Selfassessments should answer the following questions about a person’s career: 

Where am I today?



Where do I want to be?



What gaps do I need to fill to get there?

Types of self-assessment tools include: 

Self-study workbooks with exercises that help individuals discover their career values, abilities and preferences



Web-based career planning tools, including assessments, interactive exercises and Internet resource searching capabilities



Career planning workshops that offer support and feedback from others

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Professional Development Tools The following professional development tools will help organizations and employees develop the skills they require to be successful: 

The International Coach Federation (ICF) defines coaching as partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential (International Coach Federation 2010). Coaching involves discussions between the employee and an experienced individual. This individual can be an HR professional, a supervisor or a hired consultant. Types of individual coaching activities include the following: o Internal coaching o External coaching o Executive coaching



Mentoring is a relationship between two individuals, usually a senior colleague and a junior colleague, but usually not a supervisor. The junior colleague receives career support and learns about the organization. The mentor gets the chance to serve as a role model and share his or her knowledge. The following features are included in an effective mentoring program: o Matching of mentor and employee based on skills/development needs o Formal goals outlined and tracked o Minimum time commitments o Both parties being accountable o Links to business strategy and goals



Job rotation, also known as cross-training, provides employees with the opportunity to learn diverse skills. Employees learn new job skills by moving from job to job, usually in a lateral direction.



Job enlargement expands the job. It adds more tasks and duties to the job, usually at the same level of complexity.



Job enrichment adds depth to the job. The employee has more control and responsibility and uses good judgment as to how the job is performed.

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

Section 5.3: Career Development

Employees take on increased job responsibilities, some of which are usually at a higher level, such as supervisory.



Employees are often given developmental assignments that allow them to develop new skills, knowledge and abilities necessary to compete for higher-level positions. These assignments may be in the following areas: o Specialty areas o Related positions o Different organizational levels o Different geographical sites



Replacement planning looks for available qualified backup for crucial management positions. These candidates are ready to assume a position without any additional training.



Succession planning is an ongoing process of identifying and developing leadership that will help achieve future strategic goals. This activity decides which employees may benefit from different organizational experiences and identifies the training that will help them advance in the organization. Succession planning, as compared to replacement planning, is more concerned with long-range needs and the development of qualified employees to satisfy those needs.



Assessment centers consist of a standardized evaluation of behavior based on many different activities. Job simulations are used to evaluate candidates on behaviors related to the most critical competencies of the job. Assessment centers may play a role in recruiting. Also referred to as Development Centers, they are used to identify employees with potential and to decide on their training needs.

More information on assessment centers can be found in Assessment and Development Centres, by Iain Ballantyne and Nigel Povah. You can find more information on career management in Career Paths: Charting Courses to Success for Organizations and Their Employees, by Gary W. Carter, Kevin W. Cook and David W. Dorsey.

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Individual Career Planning Individual career planning for the employee not only involves employee development programs but also takes into consideration unique employee needs and the challenges organizations face in career planning and development.

Employee Development Programs Employee development programs prepare employees for future positions by providing them with opportunities to learn new ideas and skills. Types of employee development programs include the following. Tuition Reimbursement Programs Sometimes organizations offer tuition reimbursement programs to support employees’ education and development. Most companies require that the program attended by the employee be directly related to his or her job responsibilities. Committee/Team Participation If employees are involved on committees and diverse work teams, they are exposed to group decision making, collaborative processes and other areas of the organization. These assignments may result in the following advantages: 

Provide challenging activities



Enrich employee knowledge



Develop leadership capabilities



Offer recognition and rewards

Apprenticeship Apprenticeship usually relates to technical skills training. Employers design, organize and manage apprenticeship programs under a set of apprenticeship standards that include the following:



On-the-job training outline



Classroom instruction curriculum



Apprenticeship operating procedures

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Section 5.3: Career Development

Internal Mobility Internal mobility in career development involves a number of activities. These mobility options are strengthened when partnered with job enrichment and job enlargement programs.

The Career Development Programs topic in this section describes job enrichment and job enlargement programs. Here are some examples of internal mobility activities: 

Promotions. A promotion is a change or increase in level. Management and HR are responsible for developing a natural progression of jobs whenever possible. This development will result in the following: o Provides employees with a career path for future growth o Enhances employee morale and motivation o Provides the organization with candidates whose strengths and weaknesses are known and who should already have an understanding of the business operation



Demotions. Sometimes employees may have advanced beyond their skills and capabilities. If this situation occurs, they may have the opportunity to move back or laterally to positions that are more suited to their talents and capabilities. Demotions as a practice could vary across countries, based on cultures. In some cultures, demotions would be very difficult. Demotions are usually the result of the following cases: o Staff reductions, consolidations and reorganizations o An attempt to move an underqualified employee to a more suitable position o An employee’s request



Relocations. Moving employees to another geographic location, domestically or internationally, can be expensive and disruptive for the company as well as for the employee; however, relocation helps the organization as it increases the pool of employees with a global mindset. There has been a decrease in employee willingness to accept relocations

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because of issues related to work, dual-career families and the value of family life. Here are some factors to be considered when managing such moves: o How will the organization benefit? o What will be the effect on employee morale and productivity? o What are the costs, including moving costs and possible adjustments in compensation? o Are there employment opportunities for the spouse? o Is there an orientation program to adjust employees and their families to the new location? 

Transfers. Another way to match employees’ abilities and the organization’s staffing needs is to shift employees to other positions. Transfers are usually considered a lateral move with no salary adjustment. Employees sometimes seek transfers for the following reasons: o Personal enrichment o More interesting job o Better hours o Job location o Greater possibility for advancement (Dessler 2008)

Dual-Ladder Programs A dual-ladder career program offers two separate career paths within an organization, one for managers and one for technical workers. The two paths offer equal pay scales at each level. Technical workers such as engineers, programmers and scientists often feel the need to move into management to progress their career and take home a larger paycheck. As a result, many skilled technical workers end up in management positions that are administrative in nature, and their technical knowledge and expertise are no longer used. The idea behind the dual-ladder program is to provide an alternative method of career progression for these employees. Figure 3-3 is a good example of a dual-ladder career path.

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Section 5.3: Career Development

Figure 3-3. Dual-Ladder Career Path Fast-Track/High-Potential (HiPo) Programs The fast-track program searches for high-potential employees who have shown the personal motivation and drive to excel now and in the future. The fast-track program is expected to increase retention. It is also a good tool for succession planning to ensure that qualified employees are available across the organization for new business and for replacements after promotions and retirements. After an organization identifies potential future leaders, it can use fast-track programs to promote their development. The results of development centers and other methods can be used to tailor development plans for each employee. The organization must be careful that any fast-track program does not discriminate. Everyone must have an opportunity to be considered for the program. More information on HiPo programs can be found in the article Best and Brightest by Dave Zielinski at the following website: http://www.personneldecisions.com/uploadedFiles/Articles/ARTICLE_BestandBrig htest.pdf.

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Section 5.3: Career Development

Unique Employee Needs Employee development programs must consider the unique needs of the employees. HR professionals have the responsibility to the organization to ensure that any special needs of employees can be met in order to help them accomplish their goals. These needs may include any of the following: 

Employee flexible work arrangements. These may include flextime, job sharing, telecommuting and other options.



Alternative staffing. Nontraditional workers may include temporary, contract, on-call and other types.



Workplace diversity. This may include race, age, ethnicity, gender, religion and more. Be aware of laws, regulations and practices on diversity, which vary from country to country as well as locality to locality.

Challenges in Career Planning and Development Even though an organization has created programs and processes for development and retention of employees, there are always exceptions and challenges. Plateaued Careers One of the more challenging issues for HR professionals is dealing with employees whose careers are not progressing in a positive direction. A challenge for HR professionals is to maintain the commitment and productivity of long-term employees who can no longer be promoted. HR professionals must look for ways to achieve the following for these employees: 

Maintain and expand skills



Recapture enthusiasm



Maintain motivation



Use the talents of an aging, experienced workforce

Early Retirement Early retirement programs are often provided as an alternative to layoffs. Organizations may offer incentives for employees to retire voluntarily if they

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Section 5.3: Career Development

meet length-of-service or age requirements. Incentives generally include additional retirement pay and other benefits. Employers need to be careful that they do not state or even suggest that an older employee is required to retire. The early retirement must be voluntary. Transition Planning Many employees who wish to retire are still interested in an opportunity to continue to contribute to their former employer or community. Many organizations are creating formal mentoring programs and modified work arrangements (including part-time work and sabbaticals). This arrangement will support their employees’ wishes to continue to contribute and benefit the organization by keeping that knowledge in the organization.

Developing Leaders

Figure 3-4. Barry Posner Comment on Developing Leaders (Posner 2010) HR professionals spend a good amount of time on leadership development because organizations must recognize effective leadership characteristics, behaviors and competencies. To drive their business success, organizations need to do the following: 

Develop those leadership behaviors through coaching and developmental activities



Reward and advance employees who show those behaviors

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Section 5.3: Career Development

In the leadership role, HR professionals have two responsibilities: 

Serve as leaders themselves, so they can help bring about the change necessary to keep the organization competitive and successful



Identify and develop leaders in the organization

Leadership and Management Leadership is the ability of an individual to influence a group or another individual toward the achievement of goals and results. Management has the responsibility of coping with day-to-day operations. Good management brings order and consistency to an organization by establishing structures and systems to get results. Leadership and management differ in terms of their primary functions. 

Leadership: o Produces useful change. o By itself never keeps an operation on time and on budget.



Management o By itself never creates significant, useful change. o Creates logical results that keep something working efficiently.

Where Do Leaders Come From? Despite the lack of much evidence, most researchers agree that leaders are both born and made. For example, genetics and early family experiences play a significant role in developing the following: 

Personality and character that motivate an individual to lead



Intellectual and interpersonal skills necessary to lead

The majority of researchers today believe that the following sources may also play a role in the development of leaders:



Work experiences



Hardship



Opportunity 91

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

Education



Role models



Mentors

Section 5.3: Career Development

Preparing Potential Leaders To expand upon sources that may play a role in developing leaders, the following are important development opportunities in the workplace that will help prepare potential leaders: 

Challenging assignments early in a career



Visible leadership role models



Assignments that broaden knowledge and experience



Mentoring or coaching from senior executives



Attendance at meetings outside a person’s core responsibility



Special projects



Formal training programs

Certain types of work experiences enhance the development of leaders. A potential leader may learn the following from challenging work assignments: 

Self-confidence and a sense of independence



Toughness and persistence



Knowledge of the business



Skill in managing relationships



Leadership and collaboration

Leadership development is a lifelong process. The leaders of today must nurture the development of tomorrow’s leaders.

More information on leadership development can be found in Leadership Development: Optimizing Human Capital for Business Success, by Nancy R. Lockwood, 2006 SHRM Research Quarterly, Society for Human Research Management, available at http://www.shrm.org/Research/Articles/.

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Leadership Theories According to Stephen R. Covey, leadership theories can be grouped into five broad categories: 

Trait



Behavioral



Participative/power-influence



Situational/contingency



Integrative

Over the past 100 years the general trend in leadership theories has followed the ongoing debate between what has more of an influence—nature or nurture. Early leadership theories tended to emphasize nature (that is, the innate attributes a person was born possessing). Over time the influence of circumstance and experience that is nurture has proven to be increasingly influential in the development of a leader purporting that leaders are made. The more contemporary integrative approach to leadership theories suggest that once certain minimum personal attributes and behaviors are established, the influences of circumstance and experience end up having a much greater impact on the realization of the leader’s potential. Because any engagement of specific leadership behaviors will vary significantly depending on the actual application (such as political, organizational, military, intellectual and family), the most successful leadership theories today tend to be more context specific and less subject to broad generalizations (Covey 2004). Trait Theories Early approaches to leadership studies concentrated on the qualities of leaders. At that time the studies assumed that leaders were born and not made. The emphasis was on personal characteristics such as physical and mental abilities and personality characteristics.

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Research has never identified one set of traits to identify leaders; however, five personal characteristics seem to be related to effective leadership: 

Intelligence



Dominance



Self-confidence



High levels of energy and activity



Task-relevant knowledge

Behavioral Theories Trait theories were popular until the 1940s. From the late 1940s through the mid-1960s, the emphasis changed to the idea that how a person behaves shows that person’s leadership effectiveness. This research looked at the impact that leadership behavior of different leaders had on the performance and satisfaction of followers. From these behavioral studies, two leadership styles were revealed. One focuses on the employee, and the other focuses on the job: 

Consideration, also known as employee-centered behavior, refers to leadership behavior aimed at meeting the social and emotional needs of individuals and group members (for example, helping individuals and group members, explaining decisions and looking out for their best interests).



Initiating structure, also known as job-oriented behavior, refers to leadership behavior aimed at careful supervision of employee work methods and performance levels (for example, getting workers to follow rules, clarifying roles and setting goals).

Research on these behaviors tried to predict the style that would produce the most effective leaders. A combination of both styles seemed to be the most favorable, but there were enough exceptions to suggest that other factors needed to be considered.

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Power-Influence/Participative Theories This group of leadership theories tends to focus on the relationship between formal and informal authority and the degree to which a leader chooses to engage others by utilizing one or the other form of authority. The strength of these theories relates to the emphasis put on engaging the group; however, the weakness surrounds the assertion that it is the leader alone who holds the key to engagement and that people require a certain type of leader in order to become engaged. Situational/Contingency Theories No one leadership style is optimal in each and every situation. Situational and contingency theories suggest that a successful application of leadership depends on thoughtful consideration of the leader’s own style coupled with a specific analysis of the circumstance and composition of the affected group. Situational Leadership Theory

Situational leadership theories stress that leadership styles vary according to the situation or the employees involved. A well-known situational leadership theory is Hersey-Blanchard’s theory. This theory suggests that leadership style should be matched to the maturity level of the employees regarding each task. Situational leadership theory has two key aspects: task behavior and relationship behavior. 

Task behavior is the extent to which leaders are likely to organize and define the roles and activities of members of the group.



Relationship behavior is the extent to which leaders are likely to maintain personal relationships with members of the group.

Maturity is defined in relation to a specific task and has two parts: 

Psychological maturity combines self-confidence, ability and readiness to accept responsibility.



Job maturity combines related skills and technical knowledge.

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As the employee’s maturity increases, leadership should become more relationship motivated than task motivated. Leadership consists of four leadership styles based on the employee’s maturity: 

Telling employees what to do



Selling ideas to employees



Participating with employees



Delegating to employees

Figure 3-5 illustrates the situational leadership model.

Figure 3-5. Situational Leadership Model Contingency Theories

Several contingency theories were developed in the 1960s and 1970s. The most popular and well known is the contingency model of leadership effectiveness developed by Fred Fiedler (Fiedler 1967). This theory states that group performance depends on the interaction between leadership style and the situation.

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Fiedler proposed there are three factors that determine the favorableness of the leadership environment: 

How much confidence, trust and respect do followers have in their leaders?



Are the followers’ tasks defined (that is, structured or unstructured, clear or unclear)?



How much power and influence does a leader have over subordinates?

Fiedler argues that certain leadership styles are more effective for certain situations. However, rather than suggesting that leaders be trained to change their preferred styles, he suggests that it is better to alter the situation by making changes to one or more of the three factors listed above. Integrative Theories Integrative theories tend to combine or contrast the transactional elements associated with management against the inspirational aspects associated with leadership. This group of theories gathers together the more contemporary and often populous work of management and leadership gurus. Integrative theories tend to polarize between those that support systematic, deliberate and consistent management techniques as being the required foundation for successful leadership, in contrast with those that support a visionary if not spiritual leadership style that inspires people to achieve results beyond their own predetermined expectations. A common theme among these theories is the understanding that management and leadership are two very different behaviors; nevertheless, each behavior depends on the other in order to be optimally effective.

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Issues Affecting Leadership Regardless of which leadership theory an organization accepts as its model, HR is responsible for creating a culture in which leaders can succeed. Leadership style may also be affected by the following: 

Gender differences. Individuals learn through family, places of worship, the education system and the media to act according to their gender. Because these behaviors are often instilled over a lifetime, they may also affect leadership style. Although HR professionals must be aware of gender differences, it is important not to generalize based on gender.



Generational characteristics. Leaders must recognize that generational differences exist and use general guidelines for planning and communication in the organization. HR professionals must be aware of generational differences, but they should not reach wide-ranging conclusions based on them.



Cross-cultural differences. Culture can also affect a person’s leadership style. Different cultures will vary quite a bit in how they operate. Again, HR must be aware of cultural differences without generalizing based on culture.



Emotional intelligence (EI). Emotional intelligence describes an individual’s ability to be understanding of the emotions of others and to manage his or her own emotions. The level of emotional intelligence varies among leaders and can affect their ability to direct others and build cooperative teams.

Succession Planning An organization’s strategic goals can be more easily achieved if there is an effective program for leadership succession. As introduced earlier in the Career Development Programs topic of this section, succession planning is a talent management strategy to help identify and promote the development of highpotential employees.

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A succession planning program decides which employees may benefit from different organizational experiences and identifies the training they will need to advance in the organization. Succession planning must apply to employees at all levels of the organization, not only to senior management. Succession planning targets long-range needs and focuses on the development of certain qualified employees to satisfy those needs. Effective succession planning plays an active role in encouraging employee engagement, reducing turnover and aiding retention. Replacement planning, also introduced in the Career Development Programs topic of this section, concentrates on immediate needs and searches for available qualified backups for employees in key positions. Figure 3-6 compares succession planning and replacement planning.

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Variable

Section 5.3: Career Development

Succession Planning

Replacement Planning

Time frame

12–36 months

0–12 months

Readiness

Candidate with the best

Best candidate available

development potential Commitment

Only possibilities until vacancies

Selected preferred replacement

level

occur

candidate

Planning focus

A pool of talented candidates

Vertical lines of succession within

with capabilities for several

units or functions

assignments Planning

Specific plans and goals set for

Usually an informal status report on

development

the individual

strengths and weaknesses

Flexibility

Flexible plans intended to

Limited by plan structure; however,

promote development and

has a great deal of flexibility

thinking about alternatives Plan basis

Evaluation

The result of input and discussion

Each manager’s best judgment based

among multiple managers

on observation and experience

Multiple evaluations by different

Observation of performance on the

managers on different

job over time; demonstrated

assignments; testing and

competence; progress through the

developing early in career

unit

Figure 3-6. Succession versus Replacement Planning

100

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You have completed Module 5: Training and Development. Next, if you feel ready, go to the Online Learning Center and check your knowledge by completing the Case Studies, Module 5 Practice Test and the Cumulative Practice Test. Also try the Terminology Quiz to check your knowledge of terminology.

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Bibliography American Society for Training and Development. "ASTD Competency Models." 2010. http://www.astd.org/content/research /competency/competencyStudy (accessed August 31, 2012). Ballantyne, Iain, and Nigel Povah. Assessment and Development Centres. Aldershot, United Kingdom: Gower Publishing, 2004. Carter, Gary W., Kevin W. Cook, and David W. Dorsey. Career Paths: Charting Courses to Success for Organizations and Their Employees. Est Sussex, United Kingdom: WileyBlackwell, 2009. Christopherson, Jon A., David R. Carino, and Wayne E. Ferson. Portfolio Performance Measurement and Benchmarking. New York, New York: McGraw-Hill, 2009. Covey, Stephen R. The 8th Habit: From Effectiveness to Greatness, Har/DVD ed. New York, New York: Free Press, 2004. Dessler, Gary. Human Resource Management. 11th Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2008. Fiedler, F.E. "Leader Attitudes and Group Effectiveness." Urbana, Illinios: University of Illinois Press, 1967. Gorman, Tom. Motivation: Spark Initiative. Inspire Action. Achieve Your Goal. Avon, Massachusetts: F+W Publications, 2007.

Bibliography

Haar, Michael. "How Can Web 2.0 Help Train Your Employees?" Mind Resources Institute of Learning and Innovation 2, no. 2 (2010): 17. Hofstede, Geert, Gert Jan Hofstede, and Michael Minkov. Cultures and Organizations: Software of the Mind. New York, New York: McGraw Hill, 2010. International Coach Federation. "Advancing the Art, Science and Practice of Professional Coaching." 2010. http://www.coachfederation.org/ (accessed August 31, 2012). Kirkpatrick, Donald. Evaluating Training Programs: The Four Levels. San Francisco, California: BerrettKoehler Publishers, 1998. Kolb, Alice Y., and David A. Kolb. "Learning Styles and Learning Spaces: Enhancing Experiential Learning in Higher Education." Academy of Management Learning & Education 4, no. 2 (2005): 193212. Kotter, John P. A Force for Change: How Leadership Differs from Management. New York, New York: The Free Press, A Division of Simon & Schuster, 1990. Leigh, David. Group Trainer's Handbook: Designing and Delivering Training for Groups. London, United Kingdom: Kogan Page, 2006. Posner, Barry. "Leadership Is in the Moment." March 2010. http://www.leadershipchallenge.com/ WileyCDA/Section/id-420509.html (accessed August 31, 2012). 103

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Simons, Janet, Donald Irwin, and Beverly Drinnien. Psychology—The Search for Understanding. New York, New York: West Publishing Company, 1987.

Bibliography

Thorne, Kaye, and David. Mackey. Everything You Ever Needed to Know About Training, 4th ed. London, United Kingdom: Kogan Page, 2007.

Smith, Shawn A., and Rebecca A. Mazin. HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals. New York, New York: AMACOM, 2004.

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Index

Index 360-degree feedback .............. See evaluation methods, See evaluation methods ADDIE model ............. 15, 16, 19, 21, 35, 39 ADDIE process ............... See ADDIE model additional training and development models ............................................................... 39

challenges in career planning and development .................................... 89–90 early retirement ..................................... 90 plateaued careers ................................... 89 transition planning ................................. 90 coaching .......... 28, 44, 53, 61, 63, 83, 90, 92 competency models ............................. 66, 67

adult learning ........................................ 4–14 basic principles ........................................ 5 obstacles to learning ............................ 6–7

cost-benefit analysis ..... See evaluation phase

alternative staffing ...... See unique employee needs

cross-cultural differencesSee issues affecting leadership

appraisal meeting ................................ 70–72 action planning steps ....................... 71–72 feedback guidelines ............................... 71

cultural learning perceptions ............... 39–45 Hofstede's dimensions of culture .... 40–45

Covey, Stephen ......... See leadership theories

balanced scorecard .................................... 68

design phase ........................................ 21–25 composing goals and objectives ...... 21, 22 deciding how to develop the training program .................................. 21, 23–25 defining the target audience ............ 21, 23 in-house versus externally provided ...... 24 SMART objectives ................................ 23

BARS ............................................................ ...... See behaviorally anchored rating scale

Dessler, Gary............... See Human Resource Management

basic principles of adult learning .... See adult learning

development phase .............................. 25–30 presenting small scale training .............. 29 training delivery methods ................ 25–28 use of copyrighted material ................... 30

apprenticeship ....See employee development programs assessment centers .................................... 84

behaviorally anchored rating scale (BARS) ............................................................... 66 benchmarking ............................................ 64 business results.......................................... 57 career development ................. 47, 72, 73, 74 career development model .................. 80–82 career management ....................... 77, 78–84

documentation ............................... 62, 72–73 performance diary ................................. 72 performance records .............................. 72 dual-ladder programs .............. See employee development programs early retirement ....... See challenges in career planning and development e-learning ...................................... 27, 28, 49

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employee development programs ....... 85–88 apprenticeship........................................ 85 committee/team participation ................ 85 dual-ladder programs....................... 87–88 fast-track/high potential (HiPo) programs ........................................................... 88 internal mobility .............................. 86–87 tuition reimbursement ........................... 85 employee flexible work arrangements ..... See unique employee needs employee growth ................................. 57–58 employee self-assessment ......................... 82 errors in performance appraisals ......... 68–70 bias ........................................................ 69 central tendency..................................... 70 contrast error ......................................... 70 halo effect .............................................. 69 horn effect ............................................. 69 leniency error......................................... 70 primacy effect ........................................ 69 recency error .......................................... 69

Index

Hofstede, Geert .............See cultural learning perceptions IDP ............ See individual development plan implementation phase ......................... 30–33 announcing and implementing the program ........................................ 30, 33 logistics............................................ 30–33 pilot program ......................................... 30 revising content ............................... 30, 31 scheduling training program............ 30, 31 selecting a trainer ............................ 31–32 internal mobility .See employee development programs issues affecting leadership ........................ 98 cross-cultural differences ...................... 98 emotional intelligence (EI) .................... 98 gender differences ................................. 98 generational characteristics ................... 98 succession versus replacement planning ................................................... 99–100 job enlargement ................................... 83, 86

evaluation methods ............................. 63–68 360-degree feedback ............................. 64 category rating methods .................. 64–65 comparative methods............................. 65 narrative methods .................................. 65 special methods ............................... 65–67 evaluation phase .................................. 35, 57 cost-benefit analysis .............................. 37 levels of training evaluation ............ 36–38 training evaluation form ........................ 38 transfer of learning ................................ 36 experiential learning theory .................... 7–8 four stages of learning ............................. 7 face-to-face training .................................. 26 fast-track/high potential (HiPo) programsSee employee development programs Fiedler, Fred .............. See leadership theories Herzberg, Fredrick See motivational theories © 2012 SHRM

job enrichment .................................... 83, 86 job rotation ................................................ 83 Kolb, David A. .................................... 7, 8, 9 language and interpretation ....................... 49 LCMS .......See learning content management system leadership and management ................ 91–92 differences ............................................. 91 preparing potential leaders .................... 92 where do leaders come from?................ 92 leadership theories behavioral theories ................................ 94 contingency theories .................. 95, 96–97 Covey’s five categories ......................... 93 Fiedler.............................................. 96, 97 integrative theories ................................ 97 power-influence/participative theories .. 95 106

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situational leadership theory............ 95–96 trait theories ........................................... 94 learning content management system (LCMS) ................................................. 47 learning management system (LMS) ........ 47 learning portals.......................................... 46 learning styles ........................................... 10 accommodators........................................ 9 activist ..................................................... 9 assimilators .............................................. 9 convergers ............................................... 9 divergers .................................................. 9 pragmatist ................................................ 9 reflector ................................................... 9 theorist ..................................................... 9 levels of training evaluation ... See evaluation phase

Index

Herzberg’s Motivation-Hygiene theory ..................................................... 11–12 Maslow's Hierarchy of Needs ......... 10–11 McClelland's Theory of Needs .............. 12 Skinner's Behavioral Reinforcement Theory.......................................... 13–14 Theory X ............................................... 13 Theory Y ............................................... 13 needs analysis...................................... 23, 25 definition ............................................... 16 types of needs assessment ............... 17–18 new employee orientation ................... 14–15 OJT............................ See on-the-job training on-the-job training (OJT) .......................... 27 organizational values and goals .......... 53–54 goals ...................................................... 54 mission statement .................................. 53 values..................................................... 54

LMS ......... See learning management system management by objectives (MBO) ........... 65 managing career development ............ 79–80 key players....................................... 79–80 Maslow, Abraham See motivational theories, See motivational theories MBO .....See management by objectives, See management by objectives McClelland, David See motivational theories McGregor, Douglas.............See motivational theories mentoring .................... 44, 48, 61, 83, 90, 92 mission statement .. See organizational values and goals motivation ......... 6, 10–14, 20, 33, 86, 88, 89 barriers to motivation ............................ 14 motivational theories........................... 10–14 © 2012 SHRM

performance appraisals ....................... 37, 53 agement and performance appraisal ...... 60 definition ............................................... 59 Dessler ................................................... 59 reasons to appraise employees’ performance ....................................... 59 performance evaluation process critical incidents ........................ 37, 62, 65 evaluation .................................. 62, 65, 70 manager assessment .................. 61–62, 62 observation ............................................ 61 performance logs ............................. 62, 68 self-assessment ................................ 62, 82 setting goals ........................................... 61 performance management ......................... 74 organizational support ........................... 58 performance management process 53, 55–58 phases of .......................................... 55–57 performance standards 54–55, 56, 59, 60, 70, 79 pilot program ........See implementation phase 107

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Index

plateaued careers ..... See challenges in career planning and development

training delivery methods .. See development phase

professional development tools..... 82, 83–84

training evaluation form ......... See evaluation phase

replacement planning .................. 84, 99, 100 transfer of learning ....... See evaluation phase return on investment (ROI) ....................... 39 ROI......................... See return on investment

transition planning .. See challenges in career planning and development

scheduling training program .................... See implementation phase

tuition reimbursement ............. See employee development programs

selecting a trainer .See implementation phase

unique employee needs ........... 89–90, 89–90 alternative staffing ................................. 89 employee flexible work arrangements .. 89 workplace diversity ............................... 89

Skinner, B. F. ........ See motivational theories small scale training .. See development phase SMART objectives............. See design phase

use of copyrighted material See development phase

social networking ...................................... 49

Web 2.0 ..................................................... 49

succession planning ...................... 77, 84, 88

webinar ...................................................... 47

training and virtual-world simulation ....... 48

workplace diversity ..... See unique employee needs

108

Module 6: Health, Safety and Security Module 6: Health, Safety and Security ....................................................................................... ii Acknowledgements .................................................................................................................... vi Module 6 Body of Knowledge .................................................................................................. vii Module 6 Purpose Statement ................................................................................................. vii Module 6 Body of Knowledge .............................................................................................. vii Section 6.1: Organizational Risks.................................................................................................2 Introduction ..................................................................................................................................3 What Is Organizational Risk? ......................................................................................................5 Origins of Risk......................................................................................................................... 5 Risk Management Strategy ..........................................................................................................9 Effect of Health and Safety Laws and Regulations ....................................................................11 Contingency Plans for Health and Safety Issues ........................................................................12 Creating a Contingency Plan ................................................................................................. 14 Managing Risk for International Assignees .......................................................................... 16 HR’s Role in Managing Risk .....................................................................................................22 Mitigating Risk within the Supply Chain .............................................................................. 23 Section 6.2: Employee Health .....................................................................................................26 Introduction ................................................................................................................................27 Workplace Health Risks .............................................................................................................28 Infectious Diseases ................................................................................................................ 28 Global Warming .................................................................................................................... 35 Environmental Health Hazards .............................................................................................. 35 Promoting Health and Wellness Programs .................................................................................40 Performance Benefits ............................................................................................................ 40 Cost Benefits.......................................................................................................................... 41 Employee Wellness Programs ............................................................................................... 42

Work/Life Balance Programs ................................................................................................ 46 Employee Counseling and Awareness Programs .................................................................. 48 Section 6.3: Employee Safety ......................................................................................................53 Introduction ................................................................................................................................54 Safety Risks and Prevention .......................................................................................................55 Workplace Accidents ............................................................................................................. 55 Road Accidents ...................................................................................................................... 58 Workplace Violence .............................................................................................................. 60 Terrorism ............................................................................................................................... 63 Kidnapping ............................................................................................................................ 63 Accident Investigations ..............................................................................................................64 Promoting a Safe Culture ...........................................................................................................68 Management Support ............................................................................................................. 69 Safety Committees ................................................................................................................. 71 Safety Inspections .................................................................................................................. 71 Emergency Preparedness Plans ............................................................................................. 72 Insurance and Processing Claims ...............................................................................................74 Workers’ Compensation Insurance ....................................................................................... 74 Disability Insurance ............................................................................................................... 74 Social Security Insurance ...................................................................................................... 75 Processing Claims.................................................................................................................. 75 Section 6.4: Workplace Security .................................................................................................78 Introduction ................................................................................................................................79 Security Risks and Preventions ..................................................................................................80 Security Risk Analysis........................................................................................................... 80 Workplace Security Risks ..................................................................................................... 81 Physical Security Risks and Preventions ............................................................................... 82 Nonphysical Security Risks and Preventions ........................................................................ 83 Creating Security Programs .......................................................................................................91 Formalized Policies and Procedures ...................................................................................... 92

Assigned Responsibility and Accountability ......................................................................... 92 Security Controls and Measurements .................................................................................... 93 Disaster Recovery Plans for Security Matters ....................................................................... 95 Internal Investigation Policies and Procedures ..........................................................................96 Monitoring, Surveillance and Searches ................................................................................. 96 Internal Security Investigations ............................................................................................. 96 Bibliography .................................................................................................................................99 Index ............................................................................................................................................102

Acknowledgements SHRM acknowledges its volunteer leaders for their valuable contributions to the Universal HR Practices Learning System: Lead Subject Matter Expert Rachel Park Program Manager, Global Talent Acquisition, Mastercard Worldwide Singapore, Singapore Subject Matter Experts Mohamed Boraei, MBA HRIS & Project Manager, Qatar Foundation Doha, Qatar Brad Boyson, MSHRM, SPHR, GPHR, HRMP Executive Director, SHRM MEA Dubai, United Arab Emirates Diane M. Dowlin, CEBS, CCP, SPHR, GPHR International Human Resources, Senior Manager, FIS Jacksonville, Florida Cigdem Ozdemir Evren, MBA, HRBP HR Generalist, FNSS Defense Systems Ankara, Turkey Arturo Gaitán Nicholls Human Resource Analyst, Bancolombia Bogota, Colombia Nancy Kaysarly, PHR OED Advisor, International Management Consulting Company Cairo, Egypt

Sameer Khanna, GPHR Head of Human Resources, Jones Lang LaSalle, India New Delhi, India Timo Michel, HRMP HR Business Partner, HR International Deutschland, Germany Patchara Popaitoon Researcher/Teacher/Lecturer, School of Management University of Bath Claverton Down, Bath, United Kingdom Aparna Rajesh, MBA, GPHR HR Manager, Lafarge Dubai, United Arab Emirates Howard A. Wallack, MA, MSc, GPHR Vice President, Global Business Development (acting), Society for Human Resource Management Alexandria, Virginia

Module 6: Health, Safety and Security

Module 6 Body of Knowledge For your convenience, the Body of Knowledge for Module 6: Health, Safety and Security is provided on the following pages.

Module 6 Purpose Statement Purpose Statement for Health, Safety and Security: HR professionals in the area of health, safety, and security should possess a combination of behaviors and skills/knowledge that focus on promoting a safe work environment, encouraging employee participation in health and wellness programs and documenting events that relate to employee well-being. These events may include injuries or crimes or the return to work after a long absence.

Module 6 Body of Knowledge Below are lists of the behaviors and skills and knowledge required for mastery of content related to Module 6: Health, Safety and Security. Important behaviors for health, safety and security: 01. Encourage employees to participate in health and wellness programs (for example, exercise programs, health tests, vaccinations, vision tests) 02. Track reports about injuries and crimes (for example, accidents, theft, vandalism) 03. Process claims from employees (for example, workers’ compensation, short-term or longterm disability benefits and social security or social insurance) 04. Complete tasks for employees who are returning to work after a long absence (for example, after giving birth, after an injury, returning with medical issues)

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05. Promote a safe work environment Important knowledge and skills for health, safety and security: 01. Effects of laws and regulations about health and safety 02. Policies and programs for paying workers who take a leave of absence (for example, medical leave, maternity leave, injury leave, or leave due to a death in the family) 03. Safety risks in the workplace (for example, violence, use of drugs and alcohol, small spaces, dangerous materials, fires, emergencies) 04. Security risks in the workplace (for example, data or materials theft, equipment theft, damage or destruction) 05. Health and safety practices (for example, emergency evacuation procedures, ergonomic evaluations, safety-related behaviors) 06. Policies and procedures for investigating issues of health, safety or security 07. Programs to improve employee health and well-being

viii

6.1: Organizational Risk This section covers the following information from the Body of Knowledge: Behaviors: 05. Promote a safe work environment Skills & Knowledge: 01. Effects of laws and regulations about health and safety 03. Safety risks in the workplace (for example, violence, use of drugs and alcohol, small spaces, dangerous materials, fires, emergencies) 04. Security risks in the workplace (for example, data or materials theft, equipment theft, damage or destruction) 05. Health and safety practices (for example, emergency evacuation procedures, ergonomic evaluations, safety-related behaviors) 06. Policies and procedures for investigating issues of health, safety or security

Section 6.1: Organizational Risks Introduction ....................................................................................................................................3 What Is Organizational Risk? ......................................................................................................5 Origins of Risk .............................................................................................................................5 Risk Management Strategy ...........................................................................................................9 Effect of Health and Safety Laws and Regulations...................................................................11 Contingency Plans for Health and Safety Issues .......................................................................12 Creating a Contingency Plan ......................................................................................................14 Managing Risk for International Assignees ...............................................................................16 HR’s Role in Managing Risk ......................................................................................................22 Mitigating Risk within the Supply Chain ...................................................................................23

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Section 6.1: Organizational Risk

Introduction Risk or negative outcome is common to all organizations. Consequently, all organizations should assess sources and levels of risk, decide their own level of risk tolerance and develop strategies to manage risk. A global organization must conduct risk assessments in each geographic area and in each function. This section examines: 

The concept of risk management



Risk management strategies



The effect of health and safety laws and regulations



Contingency plans for health and safety issues



HR’s role in managing risk

To consider the potential scope of organizational risk, let’s consider the hypothetical example in Figure 1-1. Hypothetical Example of Organizational Risk Gabe is a senior HR professional at a commercial sheet metal company. The company designs and fabricates light gauge metalworking, tanks, pressure vessels, holding chambers and other custom products. The company is headquartered in Dublin, Ireland, but has factories in six other countries. The company’s customers are worldwide. Figure 1-1. Hypothetical Organizational Risk Example (continued to next page)

Module 6: Health, Safety and Security

Section 6.1: Organizational Risk

Hypothetical Example of Organizational Risk Gabe’s company, like most organizations today, is extremely aware of the risks it faces in all the aspects of its business and supply chain. As part of its strategic planning process, the company just completed a risk-mapping project in all its locations. Gabe heads a project team that will now try to create controls to manage these risks and prepare audit plans. What Gabe sees, as he studies all the reports, is complex and involves different types of risk areas. A summary of the reports is outlined in the bulleted list. 

Corporate headquarters: At



Factories: Throughout the

corporate headquarters, risks

factories, risks include

include violations of corporate

machinery injuries, improper

governance by senior

handling of hazardous

management and the board of

chemicals and improper use of

directors; ergonomic injuries

safety equipment such as

from repetitive work;

goggles and boots.

inadequate lighting; poorly handled installation of new software and a security break-in through the vendor portal. Figure 1-1. Hypothetical Organizational Risk Example (continued to next page)

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Section 6.1: Organizational Risk

Hypothetical Example of Organizational Risk 

Supply chain: Looking at the



Worldwide presence:

entire supply chain, Gabe

Recently, there was flooding in

considers the transportation

one of the factories in China

companies with whom his

causing extensive damage to

company partners in London

several laser cutting and

and Singapore and notes there

welding machines, forcing

are unclear policies regarding

projects to shut down and

insurance and liability issues. In

employees to be out of work

addition, while strict procedures

until the machinery was fixed.

are in place for data access and information sharing for suppliers and contractors, the procedures are not enforced. Figure 1-1. Hypothetical Organizational Risk Example (concluded) Gabe’s situation represents the scope of risk for many organizations today: health, safety, technological, physical, legal and financial. The job of the HR professional is to create risk awareness throughout the organization and to promote the development of risk management plans that create plausible controls and audit measures that ensure employees and organizations are healthy.

What Is Organizational Risk? Origins of Risk There are two origins of risks: 

External risks: Risks that result from external political, economic, technological and sociological changes, which can have a negative impact on the organization.



Internal risks: Risks that originate from internal processes and management.

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Section 6.1: Organizational Risk

Let’s use Gabe’s example to categorize the origin of risks for his company. The risks are categorized in Figure 1-2.

External Risks

Internal Risks



Third-party liability issues



Flooding



Breach of data integrity



Violations of corporate governance



Ergonomic injuries



Chemical exposure



Machinery-use injuries



Interruption in business

Figure 1-2. Origins of Risk The risks identified for Gabe’s organization present a small fraction of the potential risks organizations face today. Figure 1-3 lists additional risk types and examples for each type. Risk Categories 



Natural disasters

Financial risks

Related Examples 

Flooding



Hurricane



Landslide



Tsunami



Wildfire



Blizzard



Inflation risk



Interest rate risk



Liquidity risk



Credit risk

Figure 1-3. Categories and Examples of Risk (continued to next page)

Module 6: Health, Safety and Security

Section 6.1: Organizational Risk

Risk Categories 



Medical risks

Property risks

Legal risks

Political and social risks

Intellectual property (IP)

Related Examples 

Chemical exposure



Ergonomic injuries



Poor air quality



Operating dangerous machinery



Biological hazards/exposure



Fire



Structural damage



Being underinsured



Theft



Contractual risk



Uncovered claims



Legal defense costs



Tax risk



War



Coups



Terrorism



Shift in political power



Government relations



Copyrights, trademarks, patents,

Risks

trade secrets 

Someone has infringed on your IP rights



You have infringed on someone else’s IP rights

Figure 1-3. Categories and Examples of Risk (continued to next page)

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Section 6.1: Organizational Risk

Risk Categories 

Technological risks

Related Examples 

Critical data



Confidential data



Security posture



Architectural weaknesses



Internal hackers



External hackers

Figure 1-3. Categories and Examples of Risk (concluded) Regional Risks Risk levels vary regionally. Extreme locations pose unusually high levels of risk to local employees and international assignees. These extreme locations may be characterized by difficult living and working conditions, including high levels of poverty, kidnapping, theft, assault or war. Other examples are health risks resulting from lack of health care facilities, inadequate supplies of drinking water or high levels of pollution. Extreme locations necessitate risk management plans that can provide the following: 

Detailed ways to avoid unnecessary risks and to mitigate risks that can be managed



Contingency planning to manage specific events

Industry-Specific Risk Industries tend to have distinguishing tolerances for risk. Contrast risk-tolerant companies that specialize in exploration for natural resources with risk-averse health care industries. In the first sector, the benefits of accepting the risk outweigh the potential harm. However, for a health care business, a risk like contaminated raw ingredients or improperly certified care providers could lead to deaths, lawsuits, substantial negative publicity, decline in share value and so on. Despite these possible dangers, a pharmaceutical company may choose to accept or mitigate risk in some of its activities, particularly product development, if those

Module 6: Health, Safety and Security

Section 6.1: Organizational Risk

activities offer significant potential benefits. They may mitigate the risk by having a variety of products with different risk levels in their development pipeline or by entering into development partnerships with other companies and sharing the risk. Other forms of risk mitigation include replicating or keeping versions of information. For example, an insurance company keeps replicated information, so client data will be preserved if the main system fails.

Risk Management Strategy The only real way to avoid risk is to shut the doors and put a closed sign in the window, which of course is not practical. Risks are unavoidable and organizations have an obligation to protect the health and safety of their employees, clients and anyone who may be part of the business cycle.

Figure 1-4. Risk Quote (Neville 2005) A risk management strategy describes how an organization plans to address the vulnerabilities it has identified throughout the organization: by accepting, avoiding or mitigating the risk. The strategy is influenced by such factors as specific risk levels, vulnerabilities and the organization’s own tolerance for risk.

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Section 6.1: Organizational Risk

There are several ways to calculate risk levels. One example of how to calculate risk is illustrated in Figure 1-5.

Figure 1-5. Calculating Risk For Gabe’s company, there is a probability of a flood twice every ten years at a cost of $500,000 for equipment loss and project delays. The risk level is calculated in Figure 1-6.

Figure 1-6. Example of Calculating Risk Some risks are so unlikely, or their effects so minimal, that the organization will choose to tolerate them. For example, a significant change in the legal environment of the European Union could have a large impact on an organization’s activities there, but this occurrence is extremely unlikely. However, if an organization’s success depends on its relationship with the current regime in a politically unstable country, it may decide to avoid the risk and do business elsewhere. A risk management strategy is implemented through a system of controls designed to avoid or mitigate the risk. The strategy is continuous for as long as the

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Section 6.1: Organizational Risk

organization exists. In his book, The Risk Management Process: Business Strategy and Tactics, Christopher L. Culp discusses the five steps within a risk management process. These steps are as follows: 1. Identify risks and determine tolerances 2. Measure risks 3. Monitor and report risks 4. Control risks 5. Oversee, audit, tune and re-align risk management (Culp 2001)

A risk management strategy is not a one-time event but requires ongoing monitoring. Monitoring should involve tracking of milestones, tracking of critical risks and regular risk reassessment.

Effect of Health and Safety Laws and Regulations Health and safety laws are concerned with protecting the health, safety and welfare of people in the workplace. The goals of laws and regulations are to foster a safe work environment. Consequentially, laws and guidelines may also protect coworkers, family members, employers, customers, suppliers, communities and other members of the public who may come in contact with the organization. According to the International Labour Organization (ILO): “…deaths due to work-related accidents and illnesses represent 3.9 percent of all deaths and 15 percent of the world’s population suffers a minor or major occupational accident or work-related disease in any one year. A large number of the unemployed—up to 30 percent—report that they suffer from an injury or disease dating from the time at which they were employed. The unemployed often cite impairment of their health as a hindrance to finding new employment.” (International Labour Organization 2005)

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Section 6.1: Organizational Risk

Laws and regulations effectively enforced can drastically reduce the number of work-related accidents and deaths. Different countries and regions take different approaches to legislation, regulation and enforcement. For example, in the European Union (EU), member states have enforcing authorities to ensure that employees are protected. In many countries, there is strong cooperation between the organization and workers unions to ensure safety and protection. In the People’s Republic of China, the Ministry of Health is responsible for occupational disease prevention and the State Administration of Work Safety for safety issues within the work environment. On the provincial and municipal level, there are Health Supervisions for occupational health and local bureaus of Work Safety for safety. Know the laws by which you must abide, and ensure your organization’s policies and procedures are compliant. In addition, if your organization is conducting international business practices, be sure you are aware of the risks and laws of related countries so that employees are protected across borders. The International Labour Organization (ILO) offers a wealth of resources to assist organizations with occupational safety and health practices. There are many ILO Codes of Practice, or recommended guidelines, to address general and specific HR related topics. Titles include Guidelines on Occupational Safety and Health Management Systems, Prevention of Major Industrial Accidents and Safety in the Use of Chemicals at Work. Many of these publications can be freely downloaded from the ILO website, http://www.ilo.org.

Contingency Plans for Health and Safety Issues Disasters occur all the time and can have severe implications for your organization, especially if you are not prepared. Things like computer failures, broken water pipes, electrical outages and labor issues may seem manageable, but these types of issues can lead to the demise of an organization. © 2012 SHRM

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Section 6.1: Organizational Risk

Take, for example, the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003. Overnight, this outbreak had a tremendous impact on the tourism and the transportation industry. Sherry Cooper from the Harvard Business Review reported on the impact of SARS:

Figure 1-7. Report on SARS (Cooper 2009) In fact, 50% of organizations that suffer a disaster without a contingency plan never reopen their doors. Without a doubt, your organization will be faced with challenges. While you can’t be certain which event may challenge your business, you can prepare for these potential threats through contingency planning. In their book, The Disaster Recovery Handbook, Michael Wallace and Lawrence Webber outline relevant questions to measure whether your organization is prepared for disasters. 1. Does your organization know how long your Uninterruptible Power Supply will power your equipment if the electrical grid fails? Which equipment can be shut down first? 2. Does your organization know where you can get critical supplies if your primary supplier is shut down? 3. Does your organization know the location of all your software licenses?

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Section 6.1: Organizational Risk

4. Does your organization have a plan to contact customers to make sure they don’t go to a competitor if they hear you have a disaster? 5. Has your organization tested backups to ensure data can be restored? What about custom applications? Is backup software up to date? 6. Do employees know who to call if they see on the news a building caught fire? 7. Does your organization know what to do if a backhoe cut a telecommunication cable? 8. Is the virus protection software up-to-date? 9. Does your organization know the location of warranty information, registration codes and CD keys for all hardware and software? 10. Does your organization have a plan for using alternative equipment until the existing equipment is restored or replaced? (Wallace and Webber 2004) Contingency planning is a forward planning process, in a state of uncertainty, in which scenarios and objectives are agreed on and systematic responses are outlined to protect employee security, company assets and all stakeholders; to comply with local laws and regulations; to document and report the event as required and to follow up. The plans should be specific in designating roles and time frames, and they must be supported with training and opportunities for practice.

Creating a Contingency Plan How you build your contingency plans is determined by your organization’s culture, available resources and the support for the planning. You may find the planning becomes a myriad of complex options you may want to document by functional area. The following provides several guides for creating contingency plans.

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Gain support and assign a lead: Contingency plans require a significant investment in resources—not for the purpose of gain but simply for preventing loss. Therefore, it is advantageous to secure support at the highest level within the organization. Then assign the planning task to an individual who commands respect and support and who can assemble and lead an effective team. Scope and plan: The scope of the contingency planning should be clearly defined, with resources identified and timelines agreed on. Both technical and political considerations are important in assembling a team that can create and implement the plan. Create and test the contingency plan: A plan is designed and must be reviewed and tested. The plan can be reviewed in stages: 1. A preliminary review by senior staff will help ensure that all contributors complete their planning assignments within the specified time frame and according to an expected standard of quality. 2. Interdepartmental reviews can identify potential bottlenecks and areas in which coordination is important. 3. Simulations can be run in test areas. 4. If feasible, areas with a high potential for failure or whose failure poses a high level of risk to the enterprise can be shut down to test the plan. Contingency planning software is available to guide organizations through the process. In some cases, the entire contingency planning process may be outsourced to vendors specializing in this area. There are many resources to assist an organization in its contingency planning efforts. The embassies, consular offices and commerce departments of many countries publish information of this nature. Local and international organizations such as those outlined below provide valuable information about preparing for and recovering from a wide range of human disasters.



Disaster Preparedness European Humanitarian Aid Office or DIPECHO



United States Federal Emergency Management Agency or FEMA

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

International Red Cross and Red Crescent



World Health Organization

Managing Risk for International Assignees International assignments are an integral part of today’s global organizations. While international business offers endless opportunities, some organizations are finding they are not getting the return on the time and money they are investing in international pursuits. There are incomplete assignments, inefficiencies, stress on employees, health and safety risks and high rates of turnover, all making international endeavors risky for organizations. While international assignments have existed for decades, organizations often lack an understanding of how to properly assign employees, train them and provide the support required. Due diligence in four relevant areas will help organizations manage associated risks and thus capitalize on the international experience: 

Duty of Care



Proper international assignments



Personal security for international assignees



Training for international assignees

These relevant areas are further discussed in the sections to follow. Duty of Care Organizations have a Duty of Care to proactively protect employees’ and their dependents’ health, safety and security as they travel internationally. The treatment of Duty of Care is diverse in terms of application, and it is incumbent upon leaders within the organization to take the Duty of Care responsibilities into account and to make the appropriate business decisions. To ignore this issue is to add layers of risk to an organization that can extend into legal, fiduciary, ethical and social responsibilities. Figure 1-8 provides an example of what can happen when an organization does not provide Duty of Care.

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Figure 1-8. Duty of Care: Obligation to Employees (Claus 2010) A standardized Duty of Care involves the following: 

Developing policies and procedures according to the various work environments



Carefully planning and tracking employees’ trips and schedules to minimize risk; establishing an emergency preparedness plan



Educating traveling employees on all political, social, security and health risks



Setting up a twenty-four-hour support system for traveling employees (Claus 2010).

Proper International Assignments Determining the reason for an international assignment will help guide the selection process. Traditionally, companies have relied on technical, job-related skills as the main criteria for selecting employees for overseas assignments, but it is becoming apparent that assessing global mindset is equally, if not more, important. To a great extent, the success of every expatriate relies on that person’s ability to influence individuals, groups and leaders that may have a different cultural perspective.

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Figure 1-9. Characteristics for International Assignees (Society for Human Resource Management, Best Expatriate Assignments Require Much Thought, Even More Planning 2008) Expatriate Screening Processes

Many organizations are informal about their expatriate screening processes, which can lead to failed assignments. For example, in some organizations, the right technical skills combined with an interest in traveling abroad may be enough for an assignment. This approach is risky. HR should have a thorough screening process to screen for skills, experience and behaviors necessary for successful foreign assignments. Research points to three major attributes of successful expatriates as illustrated in Figure 1-10. These attributes and related questions can help guide the screening process.

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Figure 1-10. Attributes of Successful Expatriates (Society for Human Resource Management, Best Expatriate Assignments Require Much Thought, Even More Planning 2008) Personal Security for International Assignees Personal security is always a greater concern when employees are transferred outside the employee’s country of origin. These employees may be entering unfamiliar territory, with risks they cannot recognize or appreciate and with limited support if problems occur. In 2010 alone, there were several high-profile international emergencies, from natural disasters like the earthquake in Haiti and the eruption of Iceland`s Eyjafjallajokull volcano to political disturbances like those in Bangkok, Thailand. Expatriates who were involved in these overseas emergencies became urgent issues for those managing their assignments. It has become more important than ever to proactively manage personal security risks and have well-thought-out and comprehensive contingency plans should the worst happen, though being prepared for every emergency is impossible.

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Lisbeth Claus and Michael McCallum reported on the most important actions an organization can take to protect employees assigned to hazardous regions. These actions are listed in Figure 1-11. What Organizations Can Provide to Protect Their International Assignees Assessment and risk management planning 



Ensure evacuation services for employees and their families.



Provide additional hazard insurance.

Design safety and evacuation plans.



Provide protective services for assignees in hazardous areas.

Develop contingency plans with crisis management experts.



Engage in ongoing assessment of risks.



Protection

Develop clear policies,

Support during a crisis 

Provide full crisis-management support services for employees and their families.

procedures and action plans.

(These services range from twenty-fourhour communication to full evacuation to

Training 

Provide training on how to handle

ensuring employee and family safety at any

emergency/hazardous situations,

cost.)

how to improve safety and how to protect employees and their families.

Empowerment 

Empower employees to make informed decisions regarding their own safety and the safety of their families.

Information and communication 

Provide honest, accurate and



timely information to employees and their families on the risks and

Listen to local input, and grant locals the authority to provide support.



Provide access to discretionary funds.

hazards involved. Figure 1-11. What Organizations Can Provide to Protect International Assignees (Claus and McCallum 2004)

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Training for International Assignees Training to prepare international assignees should address, at minimum, the following topics. Health risks: The host country may pose certain health risks or lack sophisticated hospital facilities. Expatriates and their family members can minimize and prepare for medical emergencies by doing the following: 

Familiarizing themselves with illnesses prevalent in the host country, keeping apprised of disease outbreaks and epidemics and developing behavioral strategies to avoid problems; this information can be found on the World Health Organization website, http://www.who.int



Obtaining copies of their medical records and a separate summary of their medical histories, including any current or chronic problems, from their home-country physicians; these medical records should be translated into the language of the host country



Receiving appropriate preventive vaccinations and medication (such as antibiotics)



Bringing at least a six-month supply of any prescription medication, kept in its original container



Traveling with a basic medical kit that includes over-the-counter medication and supplies (such as analgesics, antacids, cough syrup and sterile bandages), as well as a phrase book to help them describe any symptoms in the local language



Developing an understanding of the local health care system (for example, which facilities are appropriate in given circumstances) and establishing relationships with local doctors as soon after their arrival as possible



Creating, with the employer’s assistance, a contingency plan if evacuation to a country with better medical care becomes necessary

Risks from legal prosecution: International assignees should be aware that the criminal prosecution process varies from one country to the next. They and their

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family members should know how to request immediate assistance from the nearest consular office or embassy in the event of an arrest. A consular or embassy representative will explain the local judicial system; provide a list of local attorneys; contact family and friends (if authorized by the prisoner); facilitate the transfer of money, food and clothing; ensure that the prison conditions are humane and healthy; arrange medical examinations, if appropriate and protect against discriminatory treatment. Kidnapping and ransom: Employers must determine, in advance, how they will handle kidnapping and ransom (K&R) demands. 

Will the local authorities be contacted?



Will ransom demands be paid? If so, will this be done through a K&R insurance policy or some other source of funds?



Does the insurance policy include access to a negotiation consultant? If not, should the firm retain one independently?



Will corporate K&R procedures apply only to employees or to their family members as well? Whatever the case, a company’s K&R guidelines and insurance details should be shared with as few individuals as possible.

Evacuation plans: Due to political and social unrest in many areas of the world, employers must be prepared to bring international assignees and their families home if their safety is threatened. Many global firms establish a corporate crisis team to create evacuation plans and make crucial decisions during emergency situations. At a minimum, the HR, security and legal departments are typically involved in the proactive and continuous process of keeping international assignees out of harm’s way.

HR’s Role in Managing Risk HR should be considered an added value business partner with regard to risk management. HR can help balance opportunity management and risk minimization. For example, data security is not typically monitored and managed © 2012 SHRM

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by HR. However, hiring appropriately trained technology professionals can minimize an organization’s risk of fraudulent activities. According to John Stevens, author of Managing Risk: The Human Resources Contribution, five core concepts help to define HR’s role in managing organizational risk: 

Organizations should involve HR in risk management strategies, and organizational policies and procedures should be included in risk management systems.



A prime responsibility for HR is to provide effective management of organizational activities that have a human dimension. This is often referred to as people risks.



HR professionals should use risk management techniques to identify risk exposures and evaluate control options. HR should demonstrate that the cost of improving people risks can outweigh inaction.



HR must adopt a proactive risk-based, business-focused approach rather than a risk averse, compliance approach.



HR must form partnerships with relevant influencers in the organization and those who are involved in business planning and strategy. (Stevens 2005)

Mitigating Risk within the Supply Chain Business relationships with suppliers and third-party vendors can pose risk if their ethics and compliance are not monitored and enforced. While companies historically have taken little interest in their external suppliers beyond product features, quality, price and availability, the issue of supply chain behavior is now closely integrated with a global organization’s corporate social responsibility (CSR) policies. HR professionals can mitigate those risks by doing a thorough risk assessment and communicating company standards and expectations proactively. In some organizations, training and workshops provide suppliers with an understanding of

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expectations and of how the organization operates. In other cases, values are communicated in bid documents and in terms and conditions of master agreements and contracts. In one example, the British home improvement, appliance and electronics retailer Kingfisher includes attention to supply chain behavior in its own corporate social responsibility program. Believing that this focus strengthens both the supply chain and the Kingfisher brand, the multinational has set policies to do the following: 

Know the provenance of every product they sell—who sells Kingfisher the product and where they make it.



Set and assess workplace standards for suppliers’ factories.



Work with suppliers, governments and nongovernment organizations to address challenges within the supply chain.



Support factories to help them achieve Kingfisher’s standards.

Site Visits Site visits are an excellent way to identify potential safety and risk issues concerning employees and to further help prevent business risks. Site visits can expose unsafe work conditions, environmental and labor issues such as hazardous waste disposal or underage workers. HR may have a role in these visits by answering questions regarding the organization’s health, safety, and security policies and also by ensuring that any issues are documented and resolved as needed. Take for example the factories run by Foxconn Technology Group, the contract maker of Apple Inc.’s iPhone. In 2010, at least ten of their workers committed suicide, which resulted in investigations into whether Foxconn’s working conditions were legal and ethical. Apple commissioned a review by a team of suicide-prevention experts after the worker deaths occurred and then presented its findings to senior executives from both companies (Culpan 2011). In cases like this, the organization’s knowledge of supplier operation can help navigate underlying cause of business risk. © 2012 SHRM

Health, Safety and Security

Section 6.2: Employee Health

6.2: Employee Health This section covers the following information from the Body of Knowledge: Behaviors: 01. Encourage employees to participate in health and wellness programs (for example, exercise programs, health tests, vaccinations, vision tests) 05. Promote a safe work environment Skills & Knowledge: 05. Health and safety practices (for example, emergency evacuation procedures, ergonomic evaluations, safety-related behaviors) 07. Programs to improve employee health and well-being

Section 6.2: Employee Health Introduction ..................................................................................................................................27 Workplace Health Risks ..............................................................................................................28 Infectious Diseases .....................................................................................................................28 Global Warming .........................................................................................................................35 Environmental Health Hazards ..................................................................................................35 Promoting Health and Wellness Programs ...............................................................................40 Performance Benefits .................................................................................................................40 Cost Benefits ..............................................................................................................................41 Employee Wellness Programs ....................................................................................................42 Work/Life Balance Programs .....................................................................................................46 Employee Counseling and Awareness Programs .......................................................................48

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Introduction Human resource (HR) professionals deal with issues such as health workforce information, research, planning and management. In recent years, there has been a raised awareness of the critical role HR has in strengthening health system performance and improving health outcomes. Human resources functions are identified as one of the core building blocks of a health system. The World Health Organization defines human resources in health as “all people engaged in actions whose primary intent is to enhance health” (World Health Organization 2006). In global health, we are witnessing enormous advances in medicines and technologies, yet there are also unprecedented reversals, incurable diseases, widespread conditions and natural disasters. The shortages of skilled health care workers and lack of access to care compound today’s problems. In many organizations, HR is responsible for navigating health issues for employees. While offerings and services may differ from country to country, this section offers practices for health concerns and ways in which you can manage this responsibility. This section examines:



Workplace health risks



Promoting health and wellness programs

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Workplace Health Risks Most workplace health risks are not obvious and can go undetected until a worker needs to be hospitalized. Direct and indirect costs to the organization can be considerable, including the following: 

Wages due employees for paid time lost



Compensation (remuneration) for employees covering injured or disabled employees



Disability payments



Increased health insurance costs



Litigation costs and possible fines



Costs associated with investigations



Costs associated with recruiting and training replacements

You can reduce your organization’s health risks by understanding potential risks and working with the leaders in your organization to identify preventive policies and programs.

Infectious Diseases Infectious diseases, also known as communicable diseases, are caused by pathogenic microorganisms, such as bacteria, viruses, parasites or fungi; the diseases can be spread directly or indirectly from one person to another. An epidemic can take an economic toll through lost workforce productivity and can strain health services. With many employees traveling internationally, monitoring and controlling infectious diseases has become a crucial health issue. Let’s look closely at four infectious diseases and discuss ways in which organizations can reduce risks (see Figure 2-1):



Influenza



Hepatitis B



Malaria



Acquired Immune Deficiency Syndrome (AIDS)

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Disease Influenza

Section 6.2: Employee Health

Description Influenza is a viral infection that affects mainly the nose, throat, bronchi and, occasionally, lungs. Infection usually lasts for about a week and is characterized by sudden onset of high fever, aching muscles, headache and severe malaise, nonproductive cough, sore throat and rhinitis. Vaccination is the most effective way to prevent infection and protect employees. Some organizations promote vaccinations (World Health Organization 2009).

Hepatitis B

Hepatitis B is a viral infection that attacks the liver and can cause both acute and chronic disease. The virus is transmitted through contact with the blood or other body fluids of an infected person—not through casual contact. About 2 billion people worldwide have been infected with the virus, and about 350 million live with chronic infection. An estimated 600,000 persons die each year due to the acute or chronic consequences of hepatitis B. Hepatitis B virus is an important health hazard for health workers. Vaccination is the most effective way to prevent infection (World Health Organization 2008).

Figure 2-1. Infectious Diseases (continued to next page)

Module 6: Health, Safety and Security

Disease Malaria

Section 6.2: Employee Health

Description Malaria is a life-threatening disease caused by parasites that are transmitted to people through the bites of infected mosquitoes. Most malaria cases and deaths occur in sub-Saharan Africa. However, Asia, Latin America and, to a lesser extent, the Middle East and parts of Europe are also affected. In 2008, malaria was present in 108 countries and territories. Nonimmune travelers from malaria-free areas are very vulnerable to the disease when they get infected. For individuals, personal protection against mosquito bites represents the first line of defense for malaria prevention (World Health Organization, Media Centre: Fact Sheet, no. 94 2010).

Figure 2-1. Infectious Diseases (continued to next page)

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Disease AIDS

Section 6.2: Employee Health

Description AIDS (acquired immune deficiency syndrome or acquired immunodeficiency syndrome) is a disease of the human immune system caused by the human immunodeficiency virus (HIV). AIDS is considered a pandemic. AIDS is a concern to all countries and presents exceptional challenges to countries such as Central and Southern Africa and South and Southeast Asia. Here are a few facts about this disease: 

As of 2009, it is estimated that there are 33.3 million people worldwide living with HIV/AIDS.



There are 2.6 million new HIV infections per year.



1.8 million deaths annually are due to AIDS. (AVERT 2010)

The amount of people living with HIV/AIDS is staggering and includes employees, family members on health care plans, future hiring pools, customers, leaders and policy makers. Illness or death in any of these groups can reduce performance and increase costs for an organization (AVERT 2010). Figure 2-1. Infectious Diseases (concluded)

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Section 6.2: Employee Health

At the United Nations International Labour Conference (ILC) meeting June 1-18, 2010, in Geneva, an international standard on HIV/AIDS in the workplace was drafted. It was decided that it was necessary to adopt an international labor standard in order to increase the attention devoted to the subject, to promote united action among the main actors on HIV/AIDS and to increase the impact of the International Labour Organization (ILO) code of practice on HIV/AIDS and the world of work (International Labour Organization 2010). Preventive Measures for Infectious Diseases It is the responsibility of employers to educate their workforce regarding the risk of and response to infectious diseases while maintaining the confidentiality of affected employees. Organizations can incorporate policies to prevent the exposure or spread of diseases through several proactive measures: 

Closely monitor resources such as the World Health Organization for travel alerts.



Offer vaccination awareness programs as needed. Be sure international assignees are appropriately vaccinated.



Provide daily screenings for employees who may be exposed to infectious diseases.



Deny access to facilities for ten days for employees or visitors returning from affected areas.



Instruct employees to stay home if they are exhibiting symptoms such as fevers or respiratory issues.



Institute policies on cleaning work surfaces and areas regularly.



Stagger breaks. Offer several lunch and break periods to reduce overcrowding.

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

Section 6.2: Employee Health

Communicate the importance of frequent hand washing and make sanitizers with alcohol available throughout the workplace. (Dressler 2008)

World Health Organization Interactive Map The World Health Organization (WHO) has several resources you can access to help monitor disease outbreaks and other health issues across the globe. Figures 2-2, 2-3 and 2-4 describe some of the resources available on the WHO’s website at http://www.who.int.

Figure 2-2. WHO Health Action in Crisis

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Section 6.2: Employee Health

Figure 2-3. WHO Emergency Program Information

Figure 2-4. WHO Interactive Map

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Section 6.2: Employee Health

Global Warming You may be wondering, “What does global warming have to do with HR?” Well, when organizations offer concern for the health of the environment, they are contributing to the well-being of their employees. This situation is especially true for those workers who have to cope with increasing fuel prices and dense traffic while commuting. HR can help employees develop their competencies by advocating for their continuing education on global warming and personal development. In addition, HR professionals can work with all levels of the organization to take advantage of their insights and find ways to reduce carbon dioxide emissions.

Environmental Health Hazards Environmental hazards are situations that pose a threat to the surrounding natural environment and adversely affect people's health. This term incorporates topics like pollution, chemicals and radiation. Environmental hazards can be categorized by the following: 

Chemical agents



Physical agents



Biological agents



Natural disasters

Chemical Agents The production and use of chemicals continue to grow worldwide. Many chemicals can when properly used significantly contribute to the improvement of our quality of life, health and well-being. But other chemicals are highly hazardous and can negatively affect our health and environment when improperly managed. The chemicals listed in Figure 2-5 are considered common workplace chemical hazards.

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Figure 2-5. Chemicals of Public Health Concern (World Health Organization, Preventing Disease through Healthy Environments: Action Is Needed on Chemicals of Major Public Health Concern 2010) Dust, fumes, gases, toxic materials, carcinogens and smoke are all ways in which chemicals can directly affect humans. If your workforce is at risk, your organization needs to take action. Let’s look more closely at the use of pesticides and tactical ways in which an organization can reduce harmful risks. Overview of Pesticides

Not all pesticides are safe. Impurities formed during the manufacture of a pesticide or by interaction in unstable formulations can increase product toxicity to humans and the environment. Effects from pesticides can range from simple irritation of the skin and eyes to more severe effects such as affecting the nervous system or causing reproductive problems or cancer.

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If you are questioning the safety of pesticide exposure or use, be sure to research associated risks. In 2009, the Pesticide Data Sheets were prepared by the World Health Organization (WHO) along with the Food and Agriculture Organization of the United Nations (FAO) and give basic toxicological information on individual pesticides. The Pesticide Data Sheets can be accessed from the World Health Organization’s website at http://www.who.int/ipcs/publications/pds/en/. Physical Agents In his book, The Manager’s Guide to Health & Safety at Work, Jeremy Stranks identifies important physical agents and associated risks. Figure 2-6 provides several examples.

Physical Agent Temperature

Associated Risks 

Heat stroke



Heat cataracts



Miner’s nystagmus



Radiation sickness



Arc eye



Burns



Noise-induced hearing loss



Vibration-induced white finger



Decompression sickness

Lighting

Radiation

Noise Vibration Pressure Figure 2-6. Physical Agents (continued to next page)

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Section 6.2: Employee Health

Physical Agent

Associated Risks 

Pneumoconiosis, including silicosis, coal worker’s pneumoconiosis, occupational

Dust

asthma, occupational cancers 

Writer’s cramp



Beat elbow, beat knee, beat hand

Repetitive movements Manual work Figure 2-6. Physical Agents (concluded) (Stranks 2006) Biological Agents Biological agents have the ability to threaten human health in a variety of ways, ranging from relatively allergic reactions to serious medical conditions, even death. These organisms are present in nature and can be found in water, soil, plants and animals. Biological agents are a potential danger because many reproduce rapidly and require minimal resources for preservation. Figure 2-7 provides examples of biological agents and associated risks. Biological Agent Contact with infected

Associated Risks Anthrax, Brucellosis, Glanders

animals Contact with blood or

Viral Hepatitis

blood products Vegetable-borne infections

Farmer’s Lung (aspergillosis)

Contact with rodents

Leptospirosis

Figure 2-7. Biological Agents (Stranks 2006)

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Section 6.2: Employee Health

Natural Disasters The powerful earthquake that hit off the northeastern coast of Japan in March 2011 offered an unfortunate reminder that disaster awareness and emergency preparedness is critical for organizations around the world. The threats of natural disasters are often determined by geographic location and populations at risk. Many resources are available that categorize and identify risk profiles for specific regions. Figure 2-8 is taken from the Annual Disaster Statistical Review 2009 and summarizes the number of natural disasters that occurred by region from 2000 through 2009.

Figure 2-8. Number of Natural Disasters per Region (Vos, et al. 2010) The Annual Disaster Statistical Review 2009 report may be accessed from the following web link: http://reliefweb.int/sites/reliefweb.int/files/resources/7C4BB2DD1D0F292AC125 774D004254C5-CRED_Jun2010.pdf

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Section 6.2: Employee Health

Risk Assessment for Environmental Hazards For HR, risk assessment is essential for planning purposes. Human health risk can be mitigated by the level of preparedness or capacity of the community and organization at risk. Figure 2-9 provides a calculation for evaluating proportional risk levels.

Figure 2-9. Proportion of Risk (World Health Organization n.d.) In the Employee Security section, we will discuss HR’s role with emergency preparedness and response.

Promoting Health and Wellness Programs Performance Benefits Research and evidence prove that wellness and health programs based on the clinical practice of preventive medicine are able to achieve the following tangible results: 

Greater employee engagement



Organizational productivity



Talent retention



Creativity and innovation



Health care cost savings

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and well-being at work. Figure 2-10 summarizes these key drivers from an employee’s perspective.

Figure 2-10 (Schroeder-Saulnier 2010)

Cost Benefits The trend toward increasing health and wellness programs coincides with growing evidence that these programs are providing a return on investment (ROI) and driving down costs. Organizations are recognizing that preventing illnesses is less expensive than treating them and that they can help reduce costs by increasing their program offerings.

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Section 6.2: Employee Health

Employee Wellness Programs A wellness program consists of services offered by the employer to promote or maintain good health rather than the correction of poor health. Most often wellness programs target physical, mental and social well-being, which together are commonly referred to as the Health Triangle. Components of the Health Triangle are illustrated in Figure 2-11 (World Health Organization 2006).

Figure 2-11. Health Triangle There are a number of ways you can incorporate wellness programs within your organization. Nutrition and Fitness Programs There are many ways you can incorporate nutrition and fitness programs in the workplace. Here are several ideas for workplace nutrition and fitness programs: 

If your building has stairs, you may suggest using the stairs instead of taking the elevator.



Try a Walk to Work Day for employees who live nearby.



Suggest a lunchtime group walk.



Bring in a fitness professional to help devise a program for the group and/or individuals. Perhaps the fitness professional can measure progress over a period of time.



Subsidize memberships at a fitness club near the office.



Offer yoga classes as a healthy, therapeutic and team-building form of exercise.

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Section 6.2: Employee Health



Provide storage for bicycles.



Sponsor a company team or arrange regular activity nights.



Allow flexible working hours to let personnel fit in exercise time before or after work.



Provide handbooks for employees to find out more about the various options open to them.



Install showers in the office.



Implement a fitness challenge to promote sustainable improvement. (Natural Healthcare Canada n.d.)

Health Screenings Workplace screenings offer employees a chance to test for overall health risks while at work. Some of the more popular screenings include the following: 

Cholesterol screenings



Glucose screenings



Blood pressure screenings



Body composition analysis



Pulmonary function screenings



Prostate cancer screenings



Hepatitis vaccinations



Vaccinations



Tuberculosis skin tests



Hearing



Vision screenings

Vision Screenings

Let’s explore vision screenings in more detail and examine how a quick fifteenminute test can prevent blindness and other eye diseases. An eye exam conducted by a licensed eye care professional can detect the early signs of eye disease and uncover evidence of other diseases, including diabetes or hypertension. © 2012 SHRM

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Section 6.2: Employee Health

Typically, the screener will ask for information about the employee’s medical history, age and other questions to assess risk for eye problems. Next the screener conducts the exam and checks problems seeing far and close and the ability to focus. If a certified vision screener detects a possible problem, the screener will advise you to make an appointment with an eye doctor for a full eye exam. Considering that good eyesight and visual health leads to increased productivity at work, the return on investment for this screening can be significant. Considerations for Workplace Screenings

There are three major considerations for workplace screenings: safety, privacy and budget. Safety considerations: Screenings should be completed by qualified and licensed personnel. This is critical because your employees need to know that the results they are getting are accurate and reliable. Privacy considerations: Screenings should follow the organization’s policies regarding confidentiality of employee information. HR should have a full understanding of what it will take to ensure privacy of employee information and be able to address any concerns about privacy up front. Budget considerations: Screenings can be very costly for an organization as well as for the wellness budget. You may need to find alternative ways to supplement paying for these tests. Employees may be willing to pay for all or a portion of the testing, and they will recognize the convenience of onsite screenings.

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Section 6.2: Employee Health

Health Education Programs In his book, The Manager’s Guide Health & Safety at Work, Jeremy Stranks concludes that: “Health education programs are primarily concerned with the education of employees toward a healthier lifestyle. It can also include the training of management and employees in various health and safety at work, in health working techniques and in the avoidance of health hazards, such as those arising from manual handling and the use of hazardous substances.” (Stranks 2006) By offering workplace education programs, organizations have an opportunity to improve individuals’ health and influence their attitudes. The following provide ideas for health education programs in the workplace: 

Nutrition education and resources



Smoking cessation programs



Eldercare education and resources



Office ergonomics

Promotion and Participation for Health and Wellness Programs The biggest challenge for making wellness programs work is getting employees to participate. Often employees think involvement can get in the way of job opportunities and even promotions. Employees may think, “If I sign up for the Heart Health seminar, my boss won’t think I have the stamina for a management position.” Employees may also be discouraged to participate if they are fearful that personal information will be made public. To encourage participation, make it a policy to protect your worker's privacy. Make sure signing up for health information is strictly confidential. You may also think about offering incentives for participation, from decreasing employees' co-pays to giving gifts and bonuses. Communicate that your organization values good health and that good health can also reduce health care © 2012 SHRM

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Section 6.2: Employee Health

costs. Posters, social media platforms, e-mail, and meetings are several ways in which you can promote nutrition and health initiatives.

Work/Life Balance Programs The economy, environment, technology and societal demands have changed the role of today’s employees and what they expect from their employers. While work is still a necessity, there are expectations for personal satisfaction. One of the ways to help employees achieve personal and professional goals is to offer work/life balance programs.

Work/life balance is the ability to effectively manage time at work with the time spent on leisure or with family members. If you poll employees across organizations, you’ll likely find there is never a complete balance between work and life because of conflicting responsibilities and commitments. However, organizations that provide flexible and supportive programs to assist employees find they can better maintain employee morale, which directly ties to better productivity. In some countries, legislation may impose guidelines for some work/life balance programs. An example is child care programs. Some governments are setting the policy framework for child care that meets diverse needs, including those of workers and employers. Benefits of such programs can include the following: 

An increase in resources for child care



Encouragement of partnerships and innovation



Improved responsiveness to parents’ needs



Support for woman’s labor force participation (International Labour Organization 2011)

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Section 6.2: Employee Health

Telecommuting Flexible workplace options, such as telecommuting or teleworking, can greatly expand HR’s opportunities for hiring the most talented candidates for a job, regardless of their location. Many organizations are concerned about productivity when employees work from home, yet some studies show that employees can be more productive when working remotely. With telecommuting, employees can avoid office distractions and add to productivity hours without the commute. Telecommuting doesn’t work for everyone, and certain employees perform better in the well-structured office environment. For this reason, when hiring employees who will work remotely, it is important to find candidates capable of creating their own structure. When supervisors cannot see employees, they may need to change their management style. Agreeing on clear and structured goals can help manage the relationship (Society for Human Resource Management 2011). Flexible Schedules There are many alternatives to a traditional workweek. Many of them have been in practice for some time but are now being recognized as flexible or alternative. Examples of flexible work hours are as follows. Regular part-time work: An arrangement that provides both employee and employer flexibility to achieve job-related tasks. Often, part-time employees do not receive the same level of benefits as full-time workers, although this is increasingly changing. Temporary work: Traditionally, organizations used temporary workers on a short-term basis to fill in when employees went on leave or for special staffing needs. However, many organizations now use temporary arrangements to test employee’s productivity and fit within the organization before hiring or to meet long-term staffing needs. © 2012 SHRM

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Section 6.2: Employee Health

Compressed workweek. This type of workweek allows full-time employees to work the required number of hours in fewer days than in a traditional workweek. For example, instead of working eight hours a day for five days, you may work ten hours a day for four days. Compressed workweeks are more common in the health care, production and manufacturing industries. Some employers offer compressed workweeks to employees during the summer (Dressler 2008). We will further explore flexible schedules in Section 6.3: Employee Relations and Communication.

Employee Counseling and Awareness Programs Counseling is a preventive strategy to help employees better manage stress, personal issues or work-related problems. Counseling programs can increase employees’ awareness regarding their thinking patterns and behaviors to make them more effective as individuals and in turn more effective in their job. Employee counseling programs are typically structured in one of two ways: 

Internal counseling: Staff employed exclusively by the organization or by a union provides counseling services.



External counseling: Counseling services are provided on a contract and confidential basis by an external provider.

Additionally, programs can also be structured through the following: 

Consortium: Several companies pool their resources to develop a collaborative counseling program.



Affiliate: A vendor already under contract to the employer subcontracts to a local professional rather than using the employer’s own salaried staff.

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Section 6.2: Employee Health

Stress Management Pressure is unavoidable and is often due to the demands of the modern work environment mixed with life’s responsibilities. When peoples’ abilities to cope are challenged, the result is stress. At work, stress can be aggravated if employees feel they have little support from supervisors and colleagues, as well as little control over work processes. Organizations can minimize stress in a number of ways: 

Evaluate work requirements and policies from the standpoint of stress.



Use job design interventions to give employees greater control over their work.



Use a stress questionnaire to help identify sources of tension and provide individual counseling and follow-up programs as indicated.



Build effective and supportive relationships with employees.



Negotiate realistic deadlines on important projects.



Encourage open communication between management and employees.



Encourage employees to get away (for example, take a vacation or work elsewhere).



Support employee participation in fitness and relaxation programs.



Train supervisors to understand the issues surrounding stress.



Allow employees to personalize their workspace.

Additionally, recognition and respect at work is one of the most important factors to increase motivation and satisfaction as well as general well-being. Research shows that appreciation and respect can be useful for the prevention of stress in the workplace. The following report provides more information on workplace stress: Raising Awareness of Stress at Work in Developing Countries, available at http://www.who.int/occupational_health/publications/raisingawarenessofstress.pdf.

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Section 6.2: Employee Health

Substance Abuse Awareness Substance abuse refers to the harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs. Psychoactive substance use can lead to dependency and physiological risks that develop after repeated substance use. Training and education on substance abuse are crucial to workplace wellness. Managers, supervisors and coworkers are typically the first ones to be aware of a problem, and they are in a position to provide the necessary support and motivation to confront the problem. Training usually focuses on educating managers and workers to spot behaviors that signal abuse. Education also helps managers react effectively to substance abusers and provides them with information on appropriate support resources and referral strategies. Managers who are not trained are far less likely to respond appropriately when faced with signs and symptoms of drug and alcohol abuse. Apart from the productivity lost to the company, the prospects for helping an employee and a career are much higher when intervention is made early.

6.3: Employee Safety

This section covers the following information from the Body of Knowledge: Behaviors: 03. Process claims from employees (for example, workers’ compensation, short-term or long-term disability benefits and social security or social insurance) 04. Complete tasks for employees who are returning to work after a long absence (for example, after giving birth, after an injury, returning with medical issues) 05. Promote a safe work environment Skills & Knowledge: 02. Policies and programs for paying workers who take a leave of absence (for example, medical leave, maternity leave, injury leave, or leave due to a death in the family) 03. Safety risks in the workplace (for example, violence, use of drugs and alcohol, small spaces, dangerous materials, fires, emergencies)

05. Health and safety practices (for example, emergency evacuation procedures, ergonomic evaluations, safety-related behaviors) 06. Policies and procedures for investigating issues of health, safety or security

Section 6.3: Employee Safety Introduction ..................................................................................................................................54 Safety Risks and Prevention .......................................................................................................55 Workplace Accidents .................................................................................................................55 Road Accidents ..........................................................................................................................58 Workplace Violence ...................................................................................................................60 Terrorism ....................................................................................................................................63 Kidnapping .................................................................................................................................63 Accident Investigations ................................................................................................................64 Promoting a Safe Culture ............................................................................................................68 Management Support .................................................................................................................69 Safety Committees .....................................................................................................................71 Safety Inspections ......................................................................................................................71 Emergency Preparedness Plans ..................................................................................................72 Insurance and Processing Claims ...............................................................................................74 Workers’ Compensation Insurance ............................................................................................74 Disability Insurance ....................................................................................................................74 Social Security Insurance ...........................................................................................................75 Processing Claims ......................................................................................................................75

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Section 6.3: Employee Safety

Introduction Workplace safety is no longer an advantage of working for a compassionate employer. In today’s organization, safety policies are mandated and recognized by employers as a way to sustain profitability, provide competitive advantages and stay out of the courtroom. In fact, safety initiatives and events such as the World Day for Safety and Health at Work sponsored by the International Labour Organization (ILO) are becoming more widespread and demonstrate that our cultures, communities and employers value the safety of our workers.

Since 2003, the ILO has observed on April 28 the World Day for Safety and Health at Work, which promotes the prevention of accidents and diseases at work, capitalizing on its traditional strengths of tripartism and social dialogue. Safety refers to freedom from hazard, risk or injury for employees on the job. As discussed in Section 6-1, laws and regulations help create safety and health standards, yet how an organization interprets and enforces those is often part of HR’s responsibilities. In this section, we will explore safety risks, suggestions for preventive measures and best practices for maintaining and managing a safe workplace environment. This section examines:



Safety risks and prevention



Accident investigation



How to promote a safe culture



Insurance and processing claims

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Section 6.3: Employee Safety

Safety Risks and Prevention Safety risks for employees are never ending and can arise when an employee stumbles on brick walking into an office or can occur thousands of miles away in a foreign country. In the sections to follow, we will describe the following safety risks and discuss ways in which HR can institute and support preventive measures: 

Workplace accidents



Road accidents



Workplace violence



Terrorism



Kidnapping

Workplace Accidents In 2010, thirty-three Chilean workers were trapped in a mine for sixty-nine days. Fortunately, this catastrophe ended well, and all the miners were saved. As a result of the incident, Chilean President Sebastian Pinera ordered an overhaul of Chile’s mine safety regulations and a renewed call to shut down decrepit mines. This miraculous incident has become a symbol of survival and also a reminder to consider the safety of employees within our own workplace environments. Catastrophes such as the one in Chile and accidents on a smaller scale can lead to the demise of an organization and loss of life. Figure 3-1 categorizes influencing risk factors for workplace accidents.

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Influencing

Section 6.3: Employee Safety

Description

Risk Factors Internal

Internal influences refer to the nature of the task, the work

influences

group, management goals, organizational style, leader’s style and experience, employee orientation and new or antiquated machinery. For example, an inexperienced supervisor may give employees orders that could put them in unsafe situations.

External

External influences include economic conditions,

influences

composition of the labor force and the geographic location of the organization. External influences such as labor unions and governmental regulations and requirements can have a positive influence on the workplace. For example, some laws may dictate required safety clothing, equipment and training for certain tasks, such as using power tools and slicing machines.

Human factors Human factors include employee attitudes, abilities, motivation, skills, preferences and distractions. For example, an employee who forgets to remove dangling jewelry could become entangled in equipment. Figure 3-1. Workplace Accidents’ Influences Classifying Accidents Applicable laws, regulations and your organization’s policies will determine how to classify accidents. For example, in some organizations, an accident can result © 2012 SHRM

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Section 6.3: Employee Safety

from unsafe acts or unsafe conditions or a combination of both. Figure 3-2 further compares unsafe acts verses unsafe conditions.

Figure 3-2. Unsafe Acts and Unsafe Conditions By identifying the potential causes of incidents, the HR professional becomes aware of factors that may need immediate attention if further incidents are to be prevented. The more precise the professional is during the identification stage, the better he or she can use the information to suggest necessary changes. Musculoskeletal Disorders Musculoskeletal disorders can result from unsafe acts or conditions at work. Disorders can affect muscles, nerves, tendons, ligaments, joints, cartilage, blood vessels and spinal disks. These diseases are the result of repetitive motion and are one type of disease attributed to ergonomic problems. Some examples of musculoskeletal disorders are listed below: 

Carpal tunnel syndrome



Tendonitis



Bursitis



Ganglion cysts

Musculoskeletal disorders can be mitigated by improved workplace design, ergonomically designed equipment, frequent breaks, exercise programs, job rotation and increases in job variety.

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Section 6.3: Employee Safety

Ergonomics

Ergonomics is the proper design of the work environment to address the physical demands experienced by employees. An ergonomist assesses three factors to identify ways to reduce or eliminate accidents: 

Physiological factors such as lighting and ventilation



Psychological factors such as fatigue and stress



Engineering design such as layout and tools

The goal of an effective ergonomics program is to engineer risk factors out of jobs. Lower Back Strains Lifting is an activity frequently done incorrectly, placing strain on the lower back area and leading to potential workers’ compensation (remuneration) claims. Back injuries are often painful and expensive cases, and to compound the problem, at least half of the population will suffer from back pain during their working careers. An effective program to reduce and control back injuries can lead to a reduced number of workers’ compensation claims as well as improve employee relations and help reduce stress in the workplace.

Road Accidents According to the European Transport Safety Council (ETSC), it is estimated that in Europe six out of ten work-related fatalities result from road crashes, including crashes while driving for work and while commuting to work. In response, ETSC’s PRAISE project, Preventing Road Accidents and Injuries for the Safety of Employees, has been established to mobilize knowledge and create work-related road safety programs.

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Section 6.3: Employee Safety

The project aims to achieve the following: 

Advance the awareness of the need for work-related road safety management



Offer organizations ways in which they can incorporate safety standards and programs

The PRAISE project is making a difference in how the workplace addresses road safety. The PRAISE project suggests organizations identify risk factors before instituting a safety program. The following considerations can help determine an organization’s level of risk and also identify action needed to keep employees safe on the road: 

Commuting mode: Employees may spend hours every day commuting to and from work. Evaluate how employees commute to work and if there are associated risk factors with cars, bicycles, ferries, walking, road conditions and other considerations.



Working hours: Working and commuting during darkness and early morning can double the risks of accidents. Besides fatigue, drivers can misinterpret road conditions due to the darkness.



Traveling routes: Commuters and workers typically seek the quickest traveling route that is not always the safest. This risk can be addressed by providing information on safer alternatives.



Operating skills and behaviors: Consider what skills and behaviors are needed to safely operate vehicles. Safety education programs on topics such as traffic rules, speed, mobile phone use, braking distances, impact of weather conditions and preparing for long journeys can reduce the risks of accidents. (European Transport Safety Council 2010)

For more information on the PRAISE project, please go to ETSC’s website: http://www.etsc.eu/home.php.

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Section 6.3: Employee Safety

Workplace Violence Stressors often lead to workplace violence. In today’s organization, stressors may include reductions in workforce, hiring moratoriums, salary reductions, increased workloads and longer hours. Violent acts can occur in all industries and are perpetrated by workers who bully other workers, customers who write menacing notes or refuse to leave the office or discharged workers who return to the office. Having a zero-tolerance policy for threats, harassment, intimidation and weapons possession provides employers with legal support for future terminations and helps employees understand the unacceptable behavior and its consequences.

“Workplace violence includes but is not limited to intimidation, threats, physical attacks, domestic violence or property damage and includes acts of violence committed by employees, clients, customers, relatives, acquaintances or strangers against employees in the workplace” (Muller 2009). Workplace Violence in the Health Care Sector According to the International Labour Organization (ILO), workplace violence is an increasingly dangerous problem within the health care sector. This is a disturbing finding considering these environments are intended to provide care for those in need. Not only does violence compromise the safety of workers, but it also imposes very significant costs on health services in terms of human and financial resources. An article published by the ILO states: “Recommendations from country reports on how to address workplace violence in the health sector reflect an approach that integrates interventions at an organizational, societal and individual level, with a clear focus on preventive action. Interventions should focus on (a) general conditions in society and the legal framework; (b) normative interventions,

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Section 6.3: Employee Safety

such as guidelines and management competencies; and (c) interventions at the environmental and individual levels.” The article encourages the start of social dialogues and strategies that can promote awareness and build understanding among health personnel and others. When people are conscious about the magnitude of this problem, they are more likely to participate in programs that can make health care environments a safer place to work (International Labour Organization 2003). Domestic Violence In the case of domestic violence or stalking, the potential liability for the employer is often greater because the organization is usually unaware of the conflict between the employee and the person intent on revenge. Once on notice, the employer should take reasonable precautions to protect the employee and coworkers. HR’s Role in Preventing Workplace Violence In addition to creating a healthy environment, HR can institute preventive strategies against workplace violence and document these practices within the organization’s policies. Some preventive strategies include the following listed in Figure 3-3.

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Section 6.3: Employee Safety

Strategy Environmental

Actions to Take 

Institute cash-handling policies such as safes and carrying small amounts of money.



Make high-risk areas visible to people and install external lighting.



Install security devices and systems for relevant risk areas.

Administrative



Publish and distribute a workplace violence policy.



Establish a workplace violence reporting system.



Institute staffing patterns and practices during the opening and closing of buildings and use security professionals as appropriate.

Behavioral



Train employees, including management, on identifying risk factors for violent behaviors, nonviolent responses and conflict resolution.



Enforce workplace violence policies.

Figure 3-3. Strategies for Preventing Workplace Violence (Muller 2009) HR’s Role in Responding to Workplace Violence In the event of workplace violence, HR should respond quickly and in the best interest of the safety of the employees. The first concern is to ensure the safety of the employees and company property. Once the situation is under control, the organization will need to review the situation to prevent a recurrence of violence and to address the effect the violent act has had on company and employee morale. © 2012 SHRM

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Section 6.3: Employee Safety

Terrorism Terrorism is the use of force or violence against persons or property in violation of the criminal laws for purposes of intimidation, coercion, or ransom. There are two types of terrorism: 

In-country terrorism involves groups or individuals whose terrorist activities are without foreign direction.



International terrorism involves groups or individuals whose terrorist activities are foreign based or whose activities transcend national boundaries.

Responses to terrorism should be part of the organization’s crisis management and emergency response plans. With the increased visibility of terrorism, governments have passed legislation and formed agencies targeting the unique situations posed by terrorism. As an HR professional, you must continuously monitor legislative proceedings with the goal of understanding how laws and regulations impact the organization’s strategic goals. Identify governmental organizations and agencies that provide support and expertise.

Kidnapping Many business travelers are more careless about personal security than they are about corporate security. As a result, terrorism and kidnapping have become a major corporate concern, especially for executives. To prevent kidnapping, executives should constantly be aware of their surroundings. If a risk exists for family members, they should be appropriately advised. Employers may take protective measures and retain crisis management teams. In the event that a suspected kidnapping has occurred, the organization should immediately establish contact with the appropriate government and law enforcement agencies.

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Section 6.3: Employee Safety

Crisis Management Teams Organizations may retain crisis management teams to respond to critical incidents such as kidnapping, extortion, terrorism or threats to harm property. The crisis management team’s purpose is to assist with decision making, communications flow and operational response capability. Crisis management teams provide the following: 

A framework for a quick and effective response



A description of roles, responsibilities and limitations



Methods to assess the situation



Cues regarding relevant issues they must handle in the first twenty-four to forty-eight hours



Communication process descriptions

Accident Investigations If an actual accident occurs, the employer must act. An accident is an undesired event that results in physical harm to a person or in damage to property. It is an unwanted interruption of a desired course of action. Whenever an accident occurs, an investigation should follow as soon as possible to identify its cause and the steps that should be taken to prevent recurrence. When investigating an accident, prioritize your action steps to prevent further harm and to preserve any necessary evidence. Figure 3-4 identifies some of the priorities that should be considered when investigating an accident.

Module 6: Health, Safety and Security

Priority Priorities at the

Section 6.3: Employee Safety

Actions to Take 

Arrive safely and



take charge.

incident scene 

Observe the overall

injured. 

scene for safety upon arrival and evaluate

Care for the

Protect others from injury.



the situation.

Remove onlookers from the immediate area.

Secondary priorities



at the incident scene 

Preserving evidence



Protect the mishap



Contact

scene.

appropriate state

Keep management

and federal

informed.

officials.

Control crowds and



Isolate witnesses.

traffic.



Erect barriers (if



Take charge.

necessary or



Take photos or make

appropriate).

sketches. Gathering evidence



Gather samples of



evidence (such as oil, glass, metal).

Identify photos and sketches.



Identify witnesses



Label samples.

by name, address



Take measurements.

or other means.

Figure 3-4. Prioritizing Accident Action Steps (continued to next page)

Module 6: Health, Safety and Security

Priority Interviewing

Section 6.3: Employee Safety

Actions to Take 



Interview witnesses



Let witnesses tell

in a quiet, neutral and

the story in their

nonthreatening

own terms; do not

location.

interrupt.

Tell witnesses the



Take notes.

purpose of the



Avoid leading

interview.

questions; be

Take down essential

neutral and use

information.

tact and diplomacy.

Figure 3-4. Prioritizing Accident Action Steps (concluded)

The process for an investigation should go beyond the unsafe act or condition and look at system and management errors. It is important to follow a disciplined process such as the approach outlined in the following four steps: 1. Learn why the accident happened. 2. Make changes that will prevent a repeat accident. 3. Document findings according to policy and applicable laws. 4. Communicate with the employee. The following sections provide more detail for each step. 1. Learn why the accident happened.

Learning why the accident occurred is essential and includes the investigation itself, interviews and documenting your findings. It is crucial to determine the physical and environmental conditions that contributed to the accident. Poor lighting, poor ventilation and wet floors are possible considerations at the scene.

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Section 6.3: Employee Safety

One way to obtain an accurate view of the accident scene is with photographs or videotapes. However, recognize these may be used against your organization in a related civil or criminal litigation. Another way to obtain information about the accident is to interview the injured employee, his or her supervisor and witnesses to the accident. The interviewer attempts to determine what happened and how the accident was caused. These interviews may generate some suggestions on how to prevent similar accidents in the future. Depending on the severity of the injury, such interviews may need to be conducted by or at the direction of legal counsel to ensure that attorney-client privilege and/or the work product doctrine protect them. 2. Complete the accident investigation report.

The accident investigation report forms should address the items required by upper management and necessary authorities. Reports that contain subjective impressions of management or counsel should be held confidential, and distribution should be tightly controlled to preserve all possible legal privileges. A separate report, limited to factual information, may be prepared where necessary for use with employees, third parties or government agencies. 3. Make changes that will prevent a repeat accident.

Identifying why an accident occurred is useful, but identifying steps to prevent it from occurring again is more important. As part of an investigation, recommendations should be made on how the accident could have been prevented and what changes could prevent further accidents. 4. Communicate with employees.

If an accident prevents an employee from immediately returning to work, the HR professional should provide information to the employee regarding how medical bills will be handled, what financial benefits the employee can expect to receive and any other benefits offered to the employee under the company’s programs.

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Section 6.3: Employee Safety

Follow-Up and Corrective Action Once problems have been identified, specific individuals should be designated to take responsibility for carrying out and monitoring any follow-up that is necessary. All corrective actions must be documented as to how the correction was made, when it was made and by whom. If possible, proof of the correction should also be documented; for example, a picture of a corrected guard rail could be included in the documentation. Extended Absence If an accident prevents an employee from immediately returning to work, the HR professional should provide information to the employee regarding how medical bills will be handled, what financial benefits the employee can expect to receive and any other benefits offered to the employee under the company’s programs. In the case of a planned extended absence, options may vary according to applicable laws and the organization’s policies. Part of HR’s role is to ensure that the individual’s work responsibilities continue during this absence and that a manager or an HR professional keeps in touch with the employee.

Promoting a Safe Culture Once you know the risks that threaten the safety of your organization, you’re better prepared to promote safety through suitable programs and with realistic actions.

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Section 6.3: Employee Safety

Management Support HR professionals must gain senior management support for safety programs and include management in the development, administration and evaluation of those programs. Management policies can create a culture that either emphasizes safety as an uncompromised goal for the workplace or, on the other extreme, tolerates unsafe conditions or work practices. Senior management’s commitment and involvement can be demonstrated in a variety of ways as illustrated in Figure 3-5.

Figure 3-5. Management Support for a Safe Culture

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Section 6.3: Employee Safety

HR and Line Management Support Once a commitment is made to safety, planning efforts must be coordinated, with duties assigned to line managers, including safety specialists and human resource professionals. Naturally, these duties vary according to the size of the organization and the industry. While it is impossible to suggest a single proper mixture of responsibilities, the primary safety responsibilities in an organization usually fall on managers and HR, as suggested in Figure 3-6. HR 

Gain management support

Line Management 

for safety programs. 

Assist in coordinating

actions as well as with words. 

safety programs.  

Develop a safety reporting



Recognize hazards.

system.



Report accidents.

Provide accident



Conduct follow-up actions to

Provide technical expertise

prevent further accidents. 

on accident research and prevention. 

Monitor employees’ safety habits.

investigation expertise. 

Show support of safety with

Provide training for line

Follow up with employees after incident is reported.



Accept ultimate responsibility for the safety of employees.

managers. Figure 3-6. HR and Line Management Support for Safety

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Section 6.3: Employee Safety

Safety Committees Workers from different levels and departments are frequently involved in safety planning through safety committees. An effective safety committee encourages safety awareness, serves to help motivate employees to follow sound safety practices and provides feedback to identify and correct new safety hazards at the earliest stages. As described in Figure 3-7, safety committees can have a significant role in reducing accidents.

Figure 3-7. Jeremy Stranks Quote (Stranks 2006)

Safety Inspections Organizations should inspect their worksites before accidents happen. Accidents or injuries can be very expensive and counterproductive to organizations’ efforts. As a result, organizations should conduct their own regular inspections. Safety and health inspections provide formal methods to assess the state of an organization’s safety and health activities and can be highly effective early warnings of accident potential or job health problems. Explore whether your organization can obtain assistance in performing safety inspections from its

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Section 6.3: Employee Safety

workers’ compensation carrier, local safety associations or third-party consultants who are qualified safety and health professionals. Conducting on-site safety inspections can help achieve the following: 

Identify unsafe conditions and equipment.



Focus on eliminating unsafe work practices and behaviors.



Reveal the need for new safeguards.



Involve many more employees in the safety program.



Help to promote the safety program within the organization



Reevaluate the safety standards of the organization.



Compare safety results against safety plans.



Gauge the relative success of training efforts.

Emergency Preparedness Plans An important component of an integrated safety and security system for any organization is an emergency preparedness plan. Such a plan should describe the actions to be taken by all personnel to respond to situations at the facility that pose a threat to human health and the environment. Emergency situations could include planning for natural disasters and human disasters. Potential disasters are listed in Figure 3-8.

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Section 6.3: Employee Safety

Natural Disasters

Human Disasters



Floods



Civil disasters



Fires



Labor disturbances



Hurricanes



Chemical/gas leaks



Earthquakes



Explosions



Tornadoes



Blackouts



Volcanic eruptions



Brownouts



Workplace violence

Figure 3-8. Potential Emergencies Guidelines for Creating Emergency Preparedness Plans The goal for an emergency preparedness plan is to get an organization back up and running in the event of an interruption. In order for an emergency preparedness plan to be useful, it must be created before an interruption occurs. There are some common elements among plans, but every plan will be different because every organization’s structure and circumstances are unique. The Nonprofit Coordinating Committee of New York, Inc. offers guidelines for developing an emergency preparedness plan: 1. Assign a team to write the emergency preparedness plan, including someone in charge of making decisions. 2. Identify potential disasters. 3. Analyze your organization, including critical services and functions and the employees who perform those functions. 4. Identify where information is stored, including employee data, client data and other data crucial to the organization’s operations. 5. Analyze the physical buildings and the organization’s security infrastructure. 6. Identify emergency contacts, such as local police precinct, fire department, gas, power and other utility companies, poison control, electrician, plumber, architect and building managers.

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Section 6.3: Employee Safety

7. Conduct a business analysis to determine how many days or weeks without income you can sustain before going out of business. Also part of the business analysis is to establish a recovery time objective that identifies when the organization can expect to be in operation following a disaster. 8. Write the emergency preparedness plan and identify necessary resources. 9. Test the emergency preparedness plan. 10. Communicate the emergency preparedness plan. 11. Test the emergency preparedness plan. 12. Keep the emergency preparedness plan current. (Nonprofit Coordinating Committee of New York 2007)

Insurance and Processing Claims Workers’ Compensation Insurance Workers’ compensation laws and standards differ between jurisdictions. For those countries with workers’ compensation laws, the aim is to protect an employee and their dependents if a work-related accident or death occurs. Depending on the plan, provisions can be made for weekly payments in place of wages, financial compensation, reimbursement of medical expenses and benefits to the dependents of workers killed during employment. Workers’ compensation typically functions like an insurance plan and is purchased by the employer. Governments do not typically fund workers’ compensation insurance.

Disability Insurance Many organizations offer some type of disability insurance to protect employees against loss of wages after an accident or illness. When this benefit is offered, the payments usually start after sick leave payments end. Disability payments usually compensate employees 50% to 75% of normal pay.

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Section 6.3: Employee Safety

Social Security Insurance For those jurisdictions that offer Social Security, there are typically three benefits that are part of this program. Provisions will vary according to jurisdictions. 

Retirement benefits: These benefits provide income to retirees.



Survivor or death benefits: These benefits provide payments to a surviving dependent, regardless of age.



Disability payments: These payments provide monthly payments to disabled employees and their dependents.

Often, to get disability benefits, you must meet different criteria such as working a minimum amount of time under the Social Security program. For more information on Social Security programs around the world, please go to the Social Security Online/International Programs website at: http://www.ssa.gov/international/links.html.

Processing Claims Proper handling of claims is a critical HR responsibility. Insurances provide a great benefit to employers and employees and must be managed in a disciplined, swift manner to minimize risks. The following provides a list of primary duties HR is often responsible for when handling claims: 

Review and evaluate all work-related claim forms and accident reports for completeness and clarity of information.



Review, track and document accidents and claims and assure compliance.



Create initial folder for new claims; maintain confidential files; collect and file required documentation.



Research discrepancies.



Facilitate effective communications between employee (or dependent) filing claim and claims administrators.

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6.4: Workplace Security This section covers the following information from the Body of Knowledge: Behaviors: 02. Track reports about injuries and crimes (for example, accidents, theft, vandalism) 05. Promote a safe work environment Skills & Knowledge: 04. Security risks in the workplace (for example, data or materials theft, equipment theft, damage or destruction) 06. Policies and procedures for investigating issues of health, safety or security

Section 6.4: Workplace Security Introduction ..................................................................................................................................79 Security Risks and Preventions ..................................................................................................80 Security Risk Analysis ...............................................................................................................80 Workplace Security Risks ..........................................................................................................81 Physical Security Risks and Preventions ...................................................................................82 Nonphysical Security Risks and Preventions .............................................................................83 Creating Security Programs .......................................................................................................91 Formalized Policies and Procedures ..........................................................................................92 Assigned Responsibility and Accountability .............................................................................92 Security Controls and Measurements .........................................................................................93 Disaster Recovery Plans for Security Matters ............................................................................95 Internal Investigation Policies and Procedures .........................................................................96 Monitoring, Surveillance and Searches ......................................................................................96 Internal Security Investigations ..................................................................................................96

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Section 6.4: Workplace Security

Introduction The purpose for workplace security is to protect employees and the organization from internal and external security risks. Workplace security risks vary depending on an organization’s location, industry and its hours of operation. For some organizations, securing technology and data present the biggest security risks, while in other organizations theft and building access may be potential threats. Human resource professionals are becoming increasingly responsible for many workplace security matters, and their role can expand into the following responsibilities: 

Working with leaders to establish a formal security function



Hiring security professionals



Establishing theft and fraud prevention policies



Communicating and educating employees on security policies and practices



Including noncompete agreements and other types of clauses in employment contracts for the protection of proprietary information and intellectual property



Developing crisis management and contingency plans



Developing workplace violence prevention procedures



Installing security systems



Developing organization access procedures

Some organizations may have an in-house security function or may use a thirdparty provider to assist in security measures. In either case, HR should determine how its role can support workplace security and what actions it needs to take to keep employees safe at work. This section examines the following areas:



Security risks and prevention measures



Creating security programs 79

Module 6: Health, Safety and Security



Section 6.4: Workplace Security

Internal investigation policies and procedures

Security Risks and Preventions Security Risk Analysis Organizations vary by size and type and the vulnerability of their property. The degree of security needed is directly related to the loss control and riskcontainment requirements of the organization. Risk assessments should be used to identify possible security issues and help organizations establish the appropriate measures. During a risk analysis, the organization looks at its security risk factors, also known as vulnerabilities. These risks can be specific to the organization. Examples may include computer viruses, union strikes or vandalism. Next, the organization examines the probability of occurrence. Once the probability of occurrence is determined, the organization can assess the impact or cost if a loss were to occur, including the following: 

Cost to permanently replace lost or damaged assets



Cost to temporarily replace lost or damaged assets



Cost of related losses caused by the inability to carry on normal activities



Cost of loss of investment income from short-term expenses incurred to meet these costs

The risk level of a loss can be evaluated in terms of four levels of criticality:



Level 1: Fatal to the organization



Level 2: Very serious



Level 3: Moderately serious



Level 4: Not serious or negligible

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Section 6.4: Workplace Security

Assessing risk levels can help determine if the organization should invest in security protection measures. Organizations usually look for the cost of protection to be substantially less than the costs incurred without the protection. Figure 4-1 demonstrates a simple calculation used to determine whether investing in a security guard and video surveillance is a financially good decision.

Figure 4-1. Comparison of Magnitude of Costs to Protection Costs

Workplace Security Risks Security risks can be categorized as physical or nonphysical. Physical security risks are possible dangers against tangible items such as property, facilities, computer equipment, materials and even personnel. These risks occur from unauthorized entry, trespass, damage, sabotage or other illegal acts. Nonphysical security risks are potential dangers against nontangible items such as corporate data, consumer data, personnel data and intellectual property. There are many ways in which these assets are threatened, and they are especially vulnerable since many people have access.

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Section 6.4: Workplace Security

Physical Security Risks and Preventions Theft Taking a pen here or there seems innocent enough; however, if your organization has strict policies on using workplace materials for personal purposes, this small infraction can be considered theft. Theft can be costly to organizations, especially when theft expands into larger problems such as stealing computer equipment or inflating expense reports. The source of theft can be internal employees or external offenders. In either case, HR plays a role in prevention. HR’s Role in Preventing Fraud, Vandalism and Theft

From an HR perspective, there are a number of actions you can take to minimize and prevent workplace theft, fraud and vandalism. Here are specific ways HR can help minimize workplace offenses: 

Implement and support security measures. Security measures include clearly identified and distributed policies and practices such as those listed below: o Track inventory through a system of checks and balances. o Implement authorization controls to determine how financial transactions are initiated, authorized, recorded and reviewed. o Separate duties among employees for recording and processing financial transactions (Buckhoff and Morris 2002).



Establish hiring practices that include background checks. Complete a thorough investigation and background check when hiring employees (Evans 2010).



Establish policies on theft and fraud. An effective policy should address the most common forms of employee theft (Buckhoff and Morris 2002).



Educate employees about fraud. Inform your employees about policies and procedures related to theft and fraud (Evans 2010).

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Section 6.4: Workplace Security

Financial Auditing

Each organization should consider hiring financial auditors to develop an ongoing auditing program to test accounting and financial systems for theft and fraud. Companies may consider using forensic accounting, which is a system that is intended to detect and investigate fraud. Unlike traditional accounting, forensic accounting avoids checklists and preconceived notions and procedures. Rather, it takes aim at the indicators, or red flags, of fraud and other financial misdeeds. The goal of forensic accounting is to isolate documents and events that do not fit within the normal course of business.

Nonphysical Security Risks and Preventions Data Security As companies around the world trend toward wireless networking and the use of smart phones, like Blackberries or iPhones, appropriate security methods must be considered. Information technology managers and systems specialists already face enormous challenges in providing security for Windows and Mac computer environments. Now factor in the various mobile devices, and the potential for risk escalates. The issue of data security for HR professionals involves two relevant areas: 

Protecting organization-wide information such as client lists and databases



Protecting personnel files and data

Both of these issues are at risk if appropriate safeguards and practices are not in place. Figure 4-2 lists the technology-related components, potential risks and influences these risks can have on an organization.

Module 6: Health, Safety and Security

Component

Section 6.4: Workplace Security

Potential Risk

Influences



Viruses



Can disrupt entire company.

Workstation



Shared folders



Improper security can lead to

(PC)



Hard drive



Passwords



Can be stolen and data retrieved.



Flash drives



Common passwords (such as user

compromised data.

name) can be guessed and bypassed. Network



Firewall



E-mail



Access



May not protect system or may be overly restrictive.



Anyone can read or alter.



Lack of user access audits can lead to security breach.



Viruses

Cellular



Access

phones



Database



Synchronizing email can lead to viruses and increased exposure to private information.



Tapes



Patches



Extracts



Data can be extracted from physical access to tapes.



Failure to install current software can leave security holes.



Data extracts from interface programs can be used to gather sensitive data.

Software



Controls



Roles



Employee-installed software on servers can cause problems.



Lack of maintenance and testing can give access to sensitive data to wrong users.

Figure 4-2. Data and Technology Risks

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Section 6.4: Workplace Security

Cyber Criminals Cyber criminals have created a number of tactics to break into systems to get the information they want. In some cases, the criminal is not looking for information but simply the ability to hack into as many systems as possible. Cyber criminals are hard to catch because many organizations report that their systems were hacked long before the issues was realized. If your systems are not properly guarded, it is easy for cyber criminals to access your systems. A risk assessment can help determine your systems’ vulnerabilities. Identity Fraud Some of the most sensitive and private information about an individual, from health records to financial data, is one reason why identity fraud is becoming more prevalent in the workplace. Personnel files, benefits information and payroll and tax records all typically reside in the HR department and can be an ideal target for identity thieves. Coupled with computerized storage of records, the frequency and severity of incidents of identity fraud in the workplace have increased. HR professionals can help safeguard against identify fraud through the following measures: 

Monitor news and professional sources for fraudulent schemes.



Implement basic practices to minimize identity fraud.



Stay current on legislative and regulatory developments.

Another way to safeguard against fraud is to enforce policies regarding online shopping at work. ISACA, previously known as the Information Systems Audit and Control Association, is an association for information technology governance with members in more than 160 countries. It found that “using the company email address as the contact for a purchase—a practice by nearly one-fourth of those ISACA polled—can lead to security problems. It can open a computer network to a variety of threats and productivity wasters such as spam, phishing attacks and viruses.” © 2012 SHRM

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Section 6.4: Workplace Security

For those organizations that allow online shopping from workplace systems, ISACA advises, “…those shopping online not to allow sites to save their username or password, to use separate browser sessions for online shopping vs. work-related browsing and to delete cookies from the computer after shopping.” (Society for Human Resource Management, Online Shopping Poses Threats to Employers 2008) Social Media Risks Social media networks present another channel for risk. Social media are defined as any web-based applications that allow people to share information to an entire network. The network can be user controlled, like Facebook, or open, like YouTube. Social media differ from e-mail and websites. Examples include LinkedIn, Facebook, Twitter, Hyves, YouTube and various web logs, or blogs. Users may forget that posting personal or company-related information through social media can breach confidentiality policies. Be sure social media policies clearly detail what is considered acceptable versus what is unacceptable. Figure 4-3 summarizes the possible advantages and disadvantages with social media from the Society for Human Resource Management.

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Section 6.4: Workplace Security

Possible Advantages 



Facilitates open communication,



Opens up the possibility for hackers to commit fraud and

discovery and delivery.

launch spam and virus attacks.

Allows employees to discuss



Increases the risk of people falling

ideas, post news, ask questions

prey to online scams that seem

and share links.

genuine, resulting in data or

Provides an opportunity to widen

identity theft. 

May result in negative comments

Targets a wide audience, making it

from employees about the

a useful and effective recruitment

company or potential legal

tool.

consequences if employees use

Improves business reputation and

these sites to view objectionable,

client base with minimal use of

illicit or offensive material.

advertising. 



leading to enhanced information

business contacts. 

Possible Disadvantages



Potentially results in lost

Expands market research,

productivity, especially if

implements marketing campaigns,

employees are busy updating

delivers communications and

profiles, etc.

directs interested people to specific web sites. Figure 4-3. Social Media Possible Advantages and Disadvantages (Society for Human Resource Management 2010)

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Section 6.4: Workplace Security

Data Security Standardization Across the world, laws, regulations and guidelines are being enforced to protect consumers and also employees. One example is the ISO/IEC 27000 series. This information security standard was published by the International Organization for Standardization (ISO) and by the International Electrotechnical Commission (IEC) and entitled Information Technology - Security Techniques - Code of Practice for Information Security Management. This publication includes best practices such as establishing a risk assessment process and determining controls that are appropriate for given circumstances. The standards are broad enough to apply to organizations of all sizes, and equivalent national standards have been adopted by many countries. You can access detailed information on the ISO/IEC 27000 standards from http://www.iso.org/iso/home.html. In some countries, governments have instituted specific new laws on data protection. In Germany, for example, states have ratified separate data privacy laws protecting individuals from fraud and malicious use of their data. As an HR professional, know the guiding laws and regulations as they apply to your organization’s systems and data infrastructure. HR’s Role in Protecting Data Whether you’re protecting personnel files or client lists, HR must be involved in ways to prevent data from falling into the wrong hands. Here are ten simple guidelines HR can follow and enforce to safeguard critical data: 

Collect only the information that is needed.



Create rules on how information is stored, accessed and transported.



Grant access to sensitive data on an as-needed basis, and keep current records of who has access to the data.



Avoid accessing information in public places such as airports, buses, Internet cafes or unsecured wireless networks.

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Section 6.4: Workplace Security



Discard the data responsibly once the need for it has expired.



Create a culture in which employees, including HR employees, understand the importance of data security and abide by company policy.



Educate employees on policies regarding secure data. For example, if encrypting data will offer a more secure data environment, provide training on this process.



Ensure that laptop computers have current anti-virus subscriptions.



Have an active personal firewall to protect laptops from clients’ networks.



Use company laptop computers for business purposes only. (Society for Human Resource Management, By Protecting Client Data, Consultants Protect Themselves 2008)

Additionally, be sure to establish a relationship with the systems and technology professionals in your organization. Rely on these professionals to identify potential risks, to assist during training programs and to help you develop disaster and contingency planning. Protecting Portable Data and Equipment When employees are traveling or working remotely, risks for stolen data and equipment greatly increase. HR should work with systems and technology professionals to establish procedures for storing sensitive data on laptops and for using public wireless networks. Additionally, HR should set up best practices for transporting equipment from location to location, especially at airports. It is often best practice to carry a laptop onto an airplane rather than to check it with luggage. Intellectual Property By talking to competitors, employees can jeopardize a valuable organizational asset, intellectual property. They can also compromise the organization’s competitive edge and future profits. In addition, current and former employees may attempt to use trade secrets and other information for their own gain.

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Section 6.4: Workplace Security

The following suggestions are offered to help organizations prevent information leaks: 

Identify what needs protecting.



Create confidentiality and nondisclosure agreements to keep proprietary information from being exploited by former owners or employees in competing ventures or through sales to competitors.



Have all employees promise to safeguard company secrets.



Remind workers not to discuss company activities or display sensitive company documents in public places. A nondisclosure agreement (NDA), also known as a confidentiality agreement, confidential disclosure agreement (CDA), proprietary information agreement (PIA) or secrecy agreement, is a binding contract between at least two groups that outlines confidential knowledge or information that the groups agree to share and restrict with third parties. The most important part of a nondisclosure agreement is defining the confidential information. It is better to be inclusive and descriptive without actually revealing the confidential information itself.

Organizations should also have processes in place for protecting intellectual property through trademark, copyright and patent procedures. Give careful thought to the types of information made available through the organization’s Intranet and Internet sites. Beyond these steps, management at all levels must exert a positive influence on the protection of a company’s proprietary information. This positive influence must come from the top, with a strong statement from the CEO or president supporting a proprietary information policy. This policy should identify the types of corporate proprietary information that are protected and the steps to be followed in preserving confidentiality.

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Section 6.4: Workplace Security

Creating Security Programs A world-class security program is effective only when policies and procedures achieve their stated objectives, and that is to protect people, property and the workplace environment. Best practices vary depending on the scope of security measures. Building a security program takes time, dedication and commitment from all levels within the organization. An effective security program will likely include the elements listed in Figure 4-4.

Figure 4-4. Elements of a Security Program

Each element is further discussed in the sections to follow.

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Section 6.4: Workplace Security

Formalized Policies and Procedures Organizations should have a documented security program that addresses specific security threats and employee responsibilities. Management must be visibly supportive and involved in communicating practices. A formal process for reporting security issues should be established and included in the documentation. Policies and procedures should be reviewed on a regular basis and should allow for employee feedback toward policy formation and implementation. Communication and Training Security policies can save lives but only when employees are knowledgeable about risks and can clearly articulate the course of action to take when security threats arise. Training programs offer an opportunity to review policies and procedures and also to role play best practices. Specific training topics may include the following: 

Who and what are subject to the rules, including which any new rules that apply to employees



Permitted and restricted uses and disclosures of privacy requirements



Administrative, physical and technical security measures



Documentation requirements



Applicable penalties

Assigned Responsibility and Accountability A security program requires someone to oversee all responsibilities and to account for controls and measurements. For some organizations, outsourcing can be a cost-effective alternative when resources are not able to adequately address workplace safety and security. Once a need is identified, the organization can determine whether the budget and culture will allow for outsourcing. A successful outsourcing relationship will require commitment from the outsourcing firm to the organization’s goals.

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Section 6.4: Workplace Security

Security Professionals Security professionals are common in industry sectors such as health care, retail and pharmaceuticals. If you are hiring a security professional, be aware positions range from basic security officers to executive-level roles at large, multinational corporations. Workplace security careers typically require education and experience in overall security, criminal science, computer technology, law and information management. A basic understanding of business relations and human resources is also important.

Security Controls and Measurements Security controls that are put in place should tie directly to security risks. For example, if your building presents security or safety risks, you may want to enact the following controls: 

Reduce the number of access points to your organization.



Use key cards or badge access.



Secure restrooms.



Institute panic button procedures for contacting emergency personnel.



Establish practices for mail delivery and handling.



Create computer protection measures if an unauthorized individual gains access.

These are just a few examples, and other control measures may include highly sophisticated systems such as video surveillance. The key factor here is to analyze the risk and put appropriate controls in place (Dressler 2008). Security Metrics It is essential to establish meaningful security metrics that can determine how security programs and practices are contributing to the organization. Relevant metrics may include those listed in Figure 4-5.

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Section 6.4: Workplace Security

Examples of Security Metrics 

Safety and security team



At-risk behavior reduction

initiatives completion rate 

Compliance trainings



Observation of safety behavior



Near-miss responses



Safety and security committee activities



Six Sigma



Trend analysis

Figure 4-5. Security Metrics (Garber 2008) Supply Chain Management for Security Matters Supply chain management (SCM) can greatly reduce security risks for organizations. By carefully monitoring the interconnected businesses involved in the provision of products and services, organizations can identify risk areas and also communicate expectations to suppliers. For some organizations, this process can be costly and require extensive resources. Let’s look at a large-scale example. Imagine your country is hosting the upcoming Winter Olympic events. Next, consider all the security measures required to host such an event and to protect the host country, neighboring countries, spectators, event workers and the athletes. Next, think about all the potential risks for those attending and participating in the events. Now ask yourself, what would it take to secure this event? Part of your answer should be to consider risks associated with every vendor, athlete, worker and spectator and to institute measures to monitor their presence at the games. Knowing who is part of the supply chain and the risks they present is part of an effective security assessment. For the 2010 Winter Olympics hosted in Canada, the security costs were initially estimated at $175 million Canadian, and the final tally was close to $1 billion Canadian. Costs escalated once additional risks were identified and

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Section 6.4: Workplace Security

Canadian security officials realized extra police, private security and military personnel were required (Dowd February 19, 2009).

Disaster Recovery Plans for Security Matters The goal of a disaster recovery plan is to get an organization back up and running in the event of a disaster. The problem may be the loss of crucial data or an entire network crashing. In any event, your organization should have a contingency plan to protect against unsafe exposure so that the delivery of services and goods is not interrupted. The HR professional must recognize that operations, administration, finance, security and marketing managers share in the planning responsibility for security disasters. Their involvement will allow for appropriate planning consistent with the organization’s values and beliefs. A disaster recovery plan should describe the actions to be taken by all personnel to respond to situations. For some disasters, establishing a command center makes sense. A command center serves as the central source for communication and making decisions on behalf of the organization. A command center allows a company to act quickly, determine actions to take and provide information to outside authorities, employees, their families and the media. Should the organization be able to maintain its operations, plans should be developed for identifying alternative worksites and staffing options, as well as the technology structures required to support business operations.

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Section 6.4: Workplace Security

Internal Investigation Policies and Procedures Monitoring, Surveillance and Searches Monitoring, surveillance and searches are often a source of tension between employers and employees. While these controls may seem like the most effective line of defense for protecting an organization’s interests, they can violate employees’ personal rights. Be sure to follow applicable laws regarding individual privacy issues if you are incorporating the following: 

Random searches of an employee’s personal property



Electronic data monitoring



Video surveillance

Video surveillance is one of many techniques you can use to monitor employees’ workplace activities. Many employers use video surveillance in order to monitor theft and attendance issues and to identify unsafe working conditions. Video monitoring also provides clear evidence of crimes when they occur in the workplace. This type of surveillance may not be legal in your organization, depending on many factors. Explore legal considerations: whether the surveillance area is a public or private area, whether sound is also monitored and whether the camera is in open view or hidden (Society for Human Resource Management, Monitoring Video: Can We Use Video Surveillance to Monitor Employees? 2008).

Internal Security Investigations Organizations should investigate complaints where there is a reasonable concern that an employee’s behavior may cause harm. To support such, the employer should, in advance of any complaint, develop protocol for conducting internal investigations concerning the reported behavior, threats or acts. Figure 4-6 outlines suggested steps for internal investigative protocol.

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Section 6.4: Workplace Security

Suggested Steps for Investigative Protocol Step 1: Identify a person

This person should be a qualified in conducting

responsible for conducting

interviews and be able to interview and gather

the investigation

facts and statements on behalf of the employer.

Step 2: Establish protocol

A process should outline how the reporting will

for the investigation

be handled in terms of fact gathering, documentation and confidentiality.

Step 3: Gather information

The investigator should interview all persons concerning the reporting. A statement should be obtained from the person making the report as well as from any persons identified by the reporting party and witnesses. In cases where the reporting is anonymous, the investigator should make a good faith effort to substantiate, within reason, the information provided in the reporting.

Step 4: Analyze the data

The investigator should make an effort to

collected

determine whether the report is based on facts and if there was a violation in the employer’s policy. The investigator should also prepare an investigative reporting, including a summary of the facts, evidence collected and, if appropriate, recommendations such as intervention, professional counseling or termination.

Figure 4-6. Suggested Steps for Investigative Protocol (continued to next page)

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Section 6.4: Workplace Security

Suggested Steps for Investigative Protocol Step 5: Review the

A person(s) not involved in the investigation

investigators’ findings and

should review the investigators’ findings and

recommendations

recommendations. Based on these findings, a course of action should be considered, and any actions taken should be documented.

Figure 4-6. Suggested Steps for Investigative Protocol (concluded)

As a result of the investigation, if a course of action may have consequences to any of the parties involved, the employer should communicate the potential risk to these persons and undertake reasonable measures to mitigate the risk to any employee and/or company assets. Let’s use the example of a terminated employee who threatens harm against another employee who reported wrong doing or an infraction to management. The investigator should discuss an appropriate protective action plan with the employee who made the report and the applicable manager. Actions could include notification to law enforcement. You have completed Module 6: Health, Safety and Security. Next, if you feel ready, go to the Online Learning Center and check your knowledge by completing the Case Studies, Module 6 Practice Test and the Cumulative Practice Test. Also try the Terminology Quiz to check your knowledge of terminology.

Module 6: Health, Safety and Security

Bibliography AVERT. "Worldwide HIV and AIDS Statistics." 2010. http://www.avert.org/worldstats.htm (accessed August 31, 2012). Buckhoff, Thomas A., and Thomas W. Morris. "Preventing Employee Fraud by Minimizing Opportunity." The CPA Journal 72, no. 5 (May 2002): 64-65. Claus, Lisbeth. "International Assignees at Risk." HR Magazine. February 2010. http://www.shrm.org/Publications/hr magazine/EditorialContent/2010/021 0/Pages/0210legal.aspx (accessed August 31, 2012). Claus, Lisbeth, and Michael McCallum. "Alternative International Assignment." Conference Proceedings of the SHRM Global Forum. 2004. Cooper, Sherry. "Test Case: A Preview of Disruption." Harvard Business Review. 2009. http://hbr.org/web/2009/pandemic/pr eview-of-disruption (accessed August 31, 2012). Culp, Christopher L. The Risk Managment Process: Business Strategy and Tatics. Hoboken, New Jersey: John Wiley & Sons, 2001. Culpan, Tim. "Apple Says Foxconn's Actions on Suicides Saved Futher Lives." Bloomberg.com. February 14, 2011. http://www.bloomberg.com/news/20 11-02-15/apple-says-foxconn-squick-response-on-suicidesprevented-further-deaths.html (accessed September 18, 2012). © 2012 SHRM

Bibliography

Dowd, Allan. Olympics-Vancouver's 2010 Security Costs Rise Sharply. Reuters, February 19, 2009. Dressler, Gary. Human Resource Management. 11th Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2008. European Transport Safety Council. "PRAISE: Safer Commuting to Work." November 3, 2010. http://www.etsc.eu/documents/PRAI SE%20Report%20(4).pdf (accessed August 31, 2012). Evans, Michelle. "Partner Corner: Preventing Employee Theft." ASAE: The Center for Association Leadership. August 2010. http://www.asaecenter.org/Resources /ANowDetail.cfm?ItemNumber=517 60 (accessed August 31, 2012). Garber, John E. "Introduction to the Human Resources Discipline of Workplace Safety and Security." Society of Human Resource Management. April 1, 2008. http://www.shrm.org/templatestools/t oolkits/pages/introsafetyandsecurity. aspx (accessed August 31, 2012). International Labour Organization. "Strengthening the HIV/AIDS response." World of Work Magazine. April 2010. http://www.ilo.org/wow/Articles/lan g--en/WCMS_145901/index.htm (accessed August 31, 2012). —. "Workplace Solutions for Childcare." International Labour Organization. January 2011. http://www.ilo.org/wcmsp5/groups/p ublic/---ed_protect/---protrav/--travail/documents/event/wcms_1459 35.pdf (accessed August 31, 2012). 99

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—. "Workplace Violence in the Health Services." International Labour Organization. 2003. http://www.ilo.org/wcmsp5/groups/p ublic/---ed_dialogue/--sector/documents/publication/wcms_ 161953.pdf (accessed September 19, 2012).

Schroeder-Saulnier, Deborah. "Study Links Wellness Programs to Innovation, Creativity." SHRM India. February 26, 2010. http://www.shrmindia.org/studylinks-wellness-programs-innovationcreativity (accessed August 31, 2012).

—. "World Day for Safety and Health at Work 2005: A Background Paper." Geneva: International Labour Office, 2005. 1.

Society for Human Resource Management. "Best Expatriate Assignments Require Much Thought, Even More Planning." February 29, 2008. http://www.shrm.org/hrdisciplines/st affingmanagement/Articles/Pages/Be stExpatriateAssignments.aspx (accessed August 31, 2012).

Muller, Max. The Manager's Guide to HR. New York, New York: AMACOM, 2009. Natural Healthcare Canada. "Workplace Wellness: Fitness Program." n.d. http://naturalhealthcare.ca/ (accessed August 31, 2012). Neville, Terry M. "Foreword." In Managing Risk, The Human Resources Contribution, by John Stevens. London, United Kingdom: LexisNexis UK, a Divison of Reed Elsevier, 2005. Nonprofit Coordinating Committee of New York. "Disaster Planning, Emergency Preparedness & Business Continuity." Society for Human Resource Management. May 8, 2007. http://www.shrm.org/TemplatesTool s/Toolkits/Documents/Disaster_Plan ning.doc (accessed August 31, 2012).

—. "By Protecting Client Data, Consultants Protect Themselves." January 29, 2008. http://www.shrm.org/hrdisciplines/co nsultants/Articles/Pages/ProtectingCl ientData.aspx (accessed August 31, 2012). —. "Monitoring Video: Can We Use Video Surveillance to Monitor Employees?" October 1, 2008. http://www.shrm.org/TemplatesTool s/hrqa/Pages/Canweusevideosurveill ancetomonitoremployees.aspx (accessed August 31, 2012). —. "Online Shopping Poses Threats to Employers." December 2, 2008. http://www.shrm.org/Publications/H RNews/Pages/ThreatstoEmployers.a spx (accessed August 31, 2012). —. "Remote Talent Can Serve Up Big Opportunities." March 18, 2011. http://www.shrm.org/hrdisciplines/be nefits/Articles/Pages/RemoteTalent.a spx (accessed August 31, 2012).

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Module 6: Health, Safety and Security

—. "What Are the Advantages and Disadvantages of Social Networking Sites? What Should We Include in a Policy?" July 22, 2010. http://www.shrm.org/TemplatesTool s/hrqa/Pages/socialnetworkingsitespo licy.aspx (accessed August 31, 2012). Stevens, John, ed. Managing Risk: The Human Resources Contribution. London, United Kingdom: LexisNexis UK, a Division of Reed Elsevier, 2005. Stranks, Jeremy. The Manager's Guide Health & Safety at Work, 8th ed. London, United Kingdom: Kogan Page, 2006. Vos, Femke, Jose Rodriguez, Regina Below, and D. Guha-Sapir. "Annual Disaster Statistical Review 2009." Centre for Research on the Epidemiology of Disasters. 2010. http://reliefweb.int/sites/reliefweb.int /files/resources/7C4BB2DD1D0F29 2AC125774D004254C5CRED_Jun2010.pdf (accessed August 31, 2012).

Bibliography

—. "Influenza." Media Centre Fact Sheet, no. 211. April 2009. http://www.who.int/mediacentre/fact sheets/fs211/en/index.html (accessed August 31, 2012). —. "Malaria." Media Centre: Fact Sheet, no. 94. April 2010. http://www.who.int/mediacentre/fact sheets/fs094/en/index.html (accessed August 31, 2012). —. "Preventing Disease through Healthy Environments: Action Is Needed on Chemicals of Major Public Health Concern." 2010. http://www.who.int/ipcs/features/10c hemicals_en.pdf (accessed August 31, 2012). —. "Risk Reduction and Emergency Preparedness." World Health Organization. n.d. http://www.who.int/hac/techguidanc e/preparedness/en/index.html (accessed August 31, 2012). World Health Organization. The World Health Report: Working Together for Health. Geneva, Switzerland: World Health Organization, 2006.

Wallace, Michael, and Lawrence Webber. The Disaster Recovery Handbook. New York, New York: AMACOM, 2004. World Health Organization. "Constitution of the World Health Organization, 45th ed." October 2006. http://www.who.int/governance/eb/w ho_constitution_en.pdf (accessed August 31, 2012). —. "Hepatitis B." Media Centre Fact Sheet, no. 204. August 2008. http://www.who.int/mediacentre/fact sheets/fs204/en/index.html (accessed August 31, 2012). © 2012 SHRM

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Module 6: Health, Safety and Security

Index

Index accident investigations .............................. 65 corrective action .................................... 69 evidence ................................................. 96 extended absence ................................... 69

Duty of Care ............ 16–17, See international assignees

AIDS (acquired immune deficiency syndrome) ........................................ 29, 32

employee counseling and awareness programs ................................................ 49

business risks ............................................ 24

employee wellness programs .................... 43

calculating risk .......................................... 10

environmental hazards ........................ 36, 41 risk assessment for environmental hazards ........................................................... 41

chemical agents ......................................... 36

emergency preparedness plan ....... 17, 73–75

claims .............................................. 7, 59, 76 retirement benefits ................................. 76 survivor or death benefits ...................... 76

expatriate screening process ..................... 18

contingency plan ........ See security programs

external counseling ................................... 49

contingency plans.................... 14, 19, 20, 79 disasters .. 6, 12, 15, 19, 28, 36, 40, 73–74, 95

external risks ............................................... 5

corrective Action ....................................... 69

financial risks .............................................. 6

crisis management ............................... 20, 79

flexible schedules ...................................... 48

crisis management teams .......................... 64

global warming ......................................... 36

cyber criminals .......................................... 85

health and safety laws and regulations.. 1, 11 work related accidents ........................... 12

data security .................................. 22, 83, 89 disability insurance ................................... 75 disability payments ............................. 29, 75 disaster recovery plans .............................. 95 disasters 6, 12, 13, 15, 19, 28, 36, 40, 73–74, 95 domestic violence................................ 61, 62

extended absence ...................................... 69

financial auditing ...................................... 83

health and wellness ....................... 41, 42, 46 cost benefits ........................................... 42 counseling and awareness programs ..... 49 employee wellness programs ................ 43 external counseling ................................ 49 flexible schedules .................................. 48 health education programs .................... 46 health screenings ................................... 44 internal counseling ................................ 49 nutrition and fitness programs ............... 43 performance benefits ............................. 41 102

Module 6: Health, Safety and Security

Index

stress management ................................. 50 substance abuse awareness .................... 51 telecommuting ....................................... 48

musculoskeletal disorders ......................... 58

health education programs ........................ 46

nutrition and fitness programs .................. 43

Hepatitis B .......................................... 29, 30

organizational risks ..................................... 5 external risks ........................................... 5 financial risks .......................................... 6 internal risks ............................................ 5 legal risks................................................. 7 medical risks ............................................ 7 political & social risks ............................. 7 property risks ........................................... 7 technological risks ................................... 8

identity fraud ............................................. 85 infectious diseases ......................... 29, 31–33 influenza ................................................ 29 influenza.................................................... 30 insurance ......................... 5, 9, 22, 29, 75–76 disability insurance ................................ 75 disability payments .................... 29, 75, 76 social security insurance ........................ 76 survivor or death benefits ...................... 76 insurance assignees evacuation plans .................................... 22

natural disasters ....... 6, 19, 28, 36, 40, 73, 74

personal security for international assignees ......................................................... 16, 19 physical agents .......................................... 38 property risks .............................................. 7 regional risks ............................................... 8

intellectual property (IP) risks .................... 7 retirement benefits .................................... 76 international assignees .. 8, 15, 18, 19, 20, 21 Duty of Care .......................................... 16 evacuation plans .................................... 20 proper international assignments ..... 16, 17 protecting ............................................... 83

risk assessment .............. 3, 23, 41, 80, 85, 88 risk management strategy calculating risk ...................................... 10 risk assessment ........................................ 3

international assignments .......................... 17 International Labour Organization11, 12, 33, 55, 61

road accidents PRAISE project ..................................... 59

investigations ...................................... 96–98 interviewing ........................................... 67 investigative protocol. ..................... 96–98 reports .............................................. 68, 76

safe culture .......................................... 69–75 emergency preparedness plan.......... 73–75 management support ............................. 69 safety committees .................................. 72 safety inspections .................................. 72

kidnapping....................................... 8, 22, 64

safety committees...................................... 72

legal risks .................................................... 7

safety inspections ................................ 72–73

malaria................................................. 29, 31

safety risks and prevention........................ 55 classifying accidents .............................. 57 commuting mode ................................... 60 influencing risk factors .......................... 56

medical risks ............................................... 7

103

Module 6: Health, Safety and Security

Index

musculoskeletal disorders ..................... 58 operating skills and behaviors ............... 60 road accidents ........................................ 59 traveling routes ...................................... 60 unsafe acts ............................................. 58 unsafe conditions ................................... 58 working hours ........................................ 60

substance abuse awareness ....................... 51

safety risks and preventions workplace accidents .............................. 56

telecommuting........................................... 48

security investigations ............................... 96 security metrics ................................... 93–94 security professionals .................... 63, 79, 93 security programs ...................................... 91 communication & training .................... 92 disaster recovery plans .......................... 95 security controls and measurements ...... 93 security metrics ..................................... 93 supply chain management ..................... 94 security risk cyber criminals ...................................... 85 damaged assets ...................................... 80 data protection ....................................... 88 data security........................................... 89 data security standardization ................. 88 financial auditing ................................... 83 identity fraud ......................................... 85 intellectual property............................... 89 nonphysical security risks ..................... 83 physical security risks ..................... 81–82 probability of occurrence ...................... 80 security risk analysis ............................. 80 social media risks .................................. 86 theft.................................................. 79, 82 vulnerabilities .............................. 9, 80, 85 workplace security risks .................. 79, 81 site visits.................................................... 24 social media .............................................. 86

surveillance ......................................... 81, 96 survivor or death benefits.......................... 76 technological risks ...................................... 8

terrorism .......................................... 7, 56, 64 theft ..................................................... 79, 82 training for international assignees ..... 16, 21 vision screenings ....................................... 44 vulnerabilities .................................. 9, 80, 85 work related accidents............................... 12 work/life balance programs....................... 47 working hours ........................................... 44 workplace accidents ............................ 56–57 classifying accidents .............................. 57 workplace health risks......................... 29–41 biological agents .................................... 39 chemical agents ..................................... 36 direct and indirect costs ......................... 29 environmental hazards ........................... 36 global warming ...................................... 36 infectious diseases ................................. 29 natural disasters ..................................... 40 workplace screenings ........ 44, 45, See vision screenings workplace violence ........... 56, 62–63, 74, 79 actions to take ........................................ 63 crisis management teams ....................... 65 workplace violence in the health care sector ............................................................... 61

104

Glossary

Glossary 0-9 ..................................................................2

L .....................................................................55

A.....................................................................2

M ....................................................................58

B .....................................................................7

N.....................................................................62

C.....................................................................10

O ....................................................................63

D.....................................................................21

P .....................................................................66

E .....................................................................27

Q ....................................................................72

F .....................................................................34

R.....................................................................73

G ....................................................................39

S .....................................................................77

H ....................................................................43

T .....................................................................84

I ......................................................................47

U.....................................................................88

J......................................................................52

V.....................................................................88

K ....................................................................54

W....................................................................90

Glossary

Word

Definition

0-9 360-degree feedback

a method of appraising job performance in which information for an employee's performance review is collected from many sources (for example, from peers, subordinates, supervisors, and sometimes from internal and external customers)

360-degree

a method of appraising job performance using information collected

performance reviews

from many sources (for example, from peers, subordinates, supervisors, and sometimes from internal and external customers)

A absenteeism

not coming to work because of illness or personal problems. Many companies calculate the absenteeism rate (the average number of days employees do not come to work) of their employees.

accident

an undesired event that results in physical harm to a person or damage to property

accountability

an obligation to accept responsibility for one's actions

accounts payable

money an organization owes its vendors and suppliers

accounts receivable

money an organization's customers owe the organization

accrual

an accounting method that recognizes a company's financial performance by recording income and expenses at the time a transaction occurs, rather than when a payment is received or an invoice is paid

Glossary

Word

Definition

achieved cultures

cultures where individuals are judged on accomplishments; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of ascribed culture

acquiring organization

the business or organization that is buying another business or organization

acquisition

an acquired organization, or a process in which one organization buys another organization

action plan

detailed steps a unit, department or team take to achieve short-term objectives

active listening

a communication method that a listener uses to interpret and evaluate information from a speaker

ad hoc

a solution to a specific problem that is not planned or cannot be used in other situations

ADA

Americans with Disabilities Act. A United Sates law that prevents an organization or person from discriminating against an employee because of physical or mental disabilities.

ADDIE model

a process for designing training programs that has five steps: analysis, design, development, implementation and evaluation

ADR

Alternative Dispute Resolution. A method for resolving a disagreement without going through formal legal procedures.

advocacy

supporting an idea or cause; influencing outcomes

Glossary

Word

Definition

affective culture

a culture where individuals are very open with their emotions; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite neutral culture

affirmative action

an activity designed to correct previous inequality that may have existed for certain groups or classes of people. This may also refer to a policy to give the same treatment to employees of all sexes, races, religions and physical and mental abilities.

align

to line up or make parallel; to place in a line or arrange in a similar way

alliance

a partnership between organizations that helps both sides

allowance

money for a specific purpose

alternative dispute

a method for resolving a disagreement without going through formal

resolution (ADR)

legal procedures

alternative staffing

the use of alternative recruiting sources and workers who are not regular employees. This is also known as flexible staffing.

Americans with

a United States law that prevents an organization or person from

Disabilities Act (ADA) discriminating against an employee because of physical or mental disabilities andragogy

the study of how adults learn

Angoff method

a way to set the standard score for passing a test

appeal

to challenge an official decision (for example, in court); a request to a higher authority

Glossary

Word

Definition

applicant tracking

computer software that helps an organization recruit employees

system (ATS) application service

a business that provides computer-based services to customers over a

provider (ASP)

network such as the Internet. Software offered using an ASP model is also sometimes called on-demand software or software as a service (SaaS).

appraisals

assessments or evaluations of the value or performance of something (example: job appraisals)

apprenticeship

when one person works for another to learn a skill, typically a technical skill. This often occurs as a partnership between employers and worker's groups.

aptitude

the ability to learn information or acquire a skill

aptitude tests

tests that measure the general ability or capacity to learn or acquire a new skill

arbitration

a process in which a disagreement between two or more people or organizations is resolved by impartial individuals, called arbitrators, without using a judge or court

ascribed culture

a culture where individuals are judged based on social factors, wealth, family or gender; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of achieved culture

ASP

application service provider. A business that provides computer-based services to customers over a network such as the Internet. Software offered using an ASP model is also sometimes called on-demand software or software as a service (SaaS).

Glossary

Word

Definition

assessment center

a system of tests and interviews that evaluate employee performance and help organizations select the right people for job positions

assets

financial, physical and intangible properties owned by an organization. Assets are the investments made by the organization to operate its business.

assignee

a person who is on (or will go on) an international work assignment

assignment

a job, usually in a new location

assimilation

the process of becoming a member of a team, organization or culture

asynchronous learning

a teaching method where students and teachers are online at different times

ATS

applicant tracking system. Computer software that helps an organization recruit employees.

attrition

the number of employees that leave the organization for any of the following reasons: resignation, termination, end of agreement, retirement, sickness or death

auditory learners

people who learn best by relying on their sense of hearing

authority

someone with extensive knowledge of a specific subject; a person in a superior position

availability analysis

analysis in which an organization considers internal and external availability to determine the theoretical availability of minorities and women for established job groups

Glossary

Word

Definition

B balance sheet

a standard financial report that summarizes the organization's financial position on a specific day

balanced scorecard

a method or tool that organizations use to measure the success of their strategies by looking at both financial and non-financial areas

balance-sheet approach a way to set the salary and living allowances for employees on international assignments base pay

basic compensation an employee receives for work; basic pay for work performed

baseline

the point or basis that is a starting point of reference; often, the baseline is the first set of data collected to measure something over time

behavioral interview

an interview process to predict future performance based on how the candidate acted in past work situations

bench strength

The ability of the organization to fill vacancies from within the organization

benchmarks

a standard or a set of standards used as a point of reference for evaluating performance or level of quality

benchmark jobs

jobs used as reference points when designing a job classification system and when designing or modifying a pay structure

benchmarking

the act of using a standard or a set of standards as a point of reference for evaluating performance or level of quality

Glossary

Word

Definition

beneficiary

a person who is eligible to gain benefits under a will, insurance policy, retirement plan or other contract

benefits

things that the employee receives in addition to a salary, such as health insurance

best practices

the methods, processes or activities that have proven to produce outstanding results for organizations

bias

occurs when an appraiser's values, beliefs or prejudices distort performance ratings

biodata

a shortened term for biographical data; information about a person's education, background and work history

blackout period

a brief period in which employees cannot access or change things about their retirement or investment plans

blended learning

a learning method that combines face-to-face teaching with online learning

body language

nonverbal communication including gestures, facial expressions, dress, silence, touch and amount of personal space

bottom line

the line on an income statement that shows net income or loss

brain drain

when smart and talented people leave their own country or organization for better opportunities

brainstorming

a method in which individuals or groups spontaneously find solutions to a problem

Glossary

Word

Definition

break-even analysis

analysis used to identify the point in time when a company begins making a profit on a project by identifying the break-even point

BRI

building-related illness. A situation in which building occupants experience acute health effects and discomfort that can be attributed directly to airborne building contaminants.

briefings

discussions which provide detailed information

broadbanding

combining several salary grades or job classifications with narrow pay ranges into one band with a wider salary spread

Brownfield operations

reuse of land previously used for industry or manufacturing

building-related illness

a situation in which building occupants experience acute health

(BRI)

effects and discomfort that can be attributed directly to airborne building contaminants

bumping

when more senior workers whose jobs have been eliminated are given the right to transfer into the jobs of less senior workers

business continuity

a management process that identifies potential threats and impacts to

planning

an organization and provides a framework for safeguarding essential business functions against disruption by unforeseen events

business ethics

the accepted principles of right or wrong governing the conduct of business people

business unit

a specific area of an organization such as marketing, accounting or production

Glossary

Word

Definition

business-to-business

any activity or program conducted between businesses through the

(B2B) e-commerce

use of a computer network connection versus an intermediary

C call-back pay

additional pay that employees receive when they are called back for an extra shift in the same workday

capacity

to an operations department, the ability to yield output

career development

an employee's progress through each stage in his or her career

career ladder

job advancement through a series of defined positions, from lower

promotion

level to higher level

career management

preparing, implementing and monitoring the career path of employees with a focus on the goals and needs of the organization

career planning

taking steps to improve professional skills and create new opportunities

cascading goals

goals that an organization sets at a high level that flow down as goals for departments and then become goals for specific people; goals that flow from the top to the bottom of an organization

cash-balance plan

a pension plan that defines the promised benefit in terms of a hypothetical account balance and features benefit portability

cash flow

a concept that describes the flow of cash in and out of the organization

Glossary

Word

Definition

cash flow projection

predicts cash inflows from customer payments and cash outflows for expenses

cause-and-effect

a visual tool to organize factors that contribute to certain outcomes;

diagram

also called a fishbone diagram

Caux Principles

a set of ethical principles developed for global organizations by the Caux Round Table, a group of global business leaders from around the world

center of excellence

a team or division that uses best practices in a specific area to achieve business goals

central tendency

a measure of the middle of a statistical distribution of data

centralization

degree to which decision-making authority is restricted to higher levels of management in an organization

centralized

when decision-making authority is restricted to higher levels of management in an organization

certification

confirmation of specific achievements or characteristics given by an authority, usually by issuing a certificate or diploma after a test

chain of command

the sequence of power in an organization from the top to the next levels of authority

change

to make different

change agent

a person or department that deliberately causes change in an organization

simple visual tools used to collect and analyze data 11

Glossary

Word

Definition

circular thinking

how Eastern cultures view history as a cycle that repeats itself

civil law

regulations set by countries or legislative groups about the rights of people (different from common laws which are set by judges)

clause

a part of a document, agreement, proposal or contract that gives more detail

cliff vesting

requires participants to complete a specific number of years of service with an employer before they get any vested benefits, after which they are 100 percent vested

closed questions

questions that can usually be answered with yes or no

cloud computing

storing, developing or processing data on software running on the Internet instead of on a personal computer or the organization’s server

coaching

a method of developing specific skills in which a coach gives information and objective feedback to a person or group

code of conduct

a written description of the principles, behaviors and responsibilities that an organization expects of its employees

code of ethical conduct

a written code of conduct or ethics that helps communicate an organization's general value system and ethical principles, as well as specific ethical rules

code of ethics

a written description of the principles of conduct in an organization that guide decision making and behavior; also see code of conduct

codetermination

an organizational structure in which employees share responsibility for the operations of a company

Glossary

Word

Definition

co-employment

a situation in which an organization shares joint responsibility and liability for their alternative workers with an alternative staffing supplier

cognitive ability

thinking skills and mental abilities

cognitive ability test

tests that assess skills the candidate has already learned

collectivism

cultures where members form collective groups with close relationships that are responsible for and reliant on each other; one of Hofstede’s Dimensions of Culture, opposite of individualism

commercial diplomacy

negotiations between countries about policies on international trade or investment

commission

payment made to salespeople, usually calculated as a percentage of sales

committee

a group of people and resources who are tasked to accomplish a specific organizational objective

common law

laws established by court decisions and legal precedence (different from civil laws which are regulations set by nations or legislative groups)

communication

how communication moves through an organization

channels communitarian culture

a culture where the members work as a group toward a collective goal; also called collectivist culture; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of individual culture

Glossary

Word

Definition

community of interests

mutuality of interests among employees in bargaining for wages, hours and working conditions

commuter assignment

an international job that requires an employee to live in one country, to work in another country, and to travel regularly between them (for example, an expatriate who lives in Bahrain and works in Saudi Arabia)

comparable worth

women's and men's salaries should be equal when their jobs require comparable skills, effort, responsibility and working conditions. Comparable worth is a concept that compares salaries of women and men.

compa-ratio

a number comparing a person's salary to other salaries for the same job. The comparison ratio is calculated by taking a person's salary and comparing it to the mid-point of other salaries (if a person earns $45,000 per year in a job where the salary mid-point is $50,000 per year, the compa-ratio is $45,000/$50,000 = 90%).

compensable factors

factors that reflect the dimensions along which a job is perceived to add value to the organization. These factors are used to determine which jobs are worth more than others.

compensation

everything that an employee receives for working including pay and non-monetary benefits

competencies

the skills, behaviors and knowledge that are needed to succeed in a specific job

competency model

a list of the behaviors, skills and knowledge needed to do well in a specific job

Glossary

Word

Definition

competency-based pay

pay based on the skills and knowledge that make an employee valuable to an organization

compliance

following established laws, guidelines or rules

comply

to obey requests, laws or guidelines

comprehension

level of learning characterized by ability to translate or interpret information

compressed workweek

work schedule that compresses a full week's work into fewer than five days

conciliation

method of nonbinding dispute resolution where a third party helps disputing parties reach an agreement. This is also known as mediation.

concurrent validity

type of criterion-related validity determined by relating the test scores of a group of test takers who take a test (Test A) to some other criterion measure (Test B) that is administered at the same time

conflict resolution

method of negotiating agreements or solving problems

consolidation

combining separate companies, functional areas or product lines; in finance, combining the assets, equity, liabilities and operating accounts of a company with those of its subsidiaries

constituent

a person who makes up one part of a larger group

constructive

an intervention strategy that focuses on constructively confronting the

confrontation

employee about job performance

Glossary

Word

Definition

constructive discharge

a type of discharge that occurs when an employer makes working conditions so intolerable that an employee has no choice but to resign

consumer picketing

product boycotts involving such activities as: distributing handbills, carrying placards, and urging customers to refuse to purchase products from a particular retail or wholesale business

content validity

degree to which an interview, test or other selection device measures the knowledge, skills, abilities or other qualifications that are part of the job

contingency theories

theories developed in the 1960s and 1970s that advocate that group performance is dependent on the interaction between leadership style and situational favorableness; the most popular and well known is the contingency model of leadership effectiveness developed by Fred Fiedler

contingent worker

a person who is hired part-time to work under a contract or for a fixed period of time

continuous

an ongoing effort to improve products, services or processes. These

improvement

efforts can seek incremental improvement over time or improvement all at once.

contract manufacturing

a production method in which one company hires another company to manufacture parts or goods under its label and according to its specifications

contrast error

error that occurs when an employee's rating is based on how his or her performance compares to that of another employee rather than to objective standards

Glossary

Word

Definition

control

to an operations department, an after-the-fact evaluation of a company's ability to meet its own specifications and its customers' needs; operations-related term for ability to meet specifications

control chart

a chart where variations from the norm are plotted over time

control-oriented

when used as a descriptor for performance evaluation, this phrase indicates the evaluation focuses on accomplishing tasks

a form of protection provided by the United States government to authors of original works to prevent others from printing or otherwise duplicating, distributing or vending copies of his or her literary, artistic and other creative expressions

core competency

the skills or knowledge that an organization or employee needs to do its work

corporate alumni

developing a network of potential employees by maintaining

network

relationships with employees who have left the organization for the purposes of re-recruiting, gaining referrals of potential candidates and supporting business development

corporate citizenship

a practice in which organizations take steps to improve their employees’ lives and the communities in which they operate

corporate culture

the values, language, rules, procedures, expectations and processes that affect how employees of an organization think, act and view the world; the beliefs and behaviors of an organization

corporate governance

the systems and processes by which organizations are controlled and directed

Glossary

Word

Definition

corporate social

a business philosophy in which an organization helps to improve

responsibility (CSR)

social and environmental problems

correlation

a measure of the relationship between two variables

co-sourcing

a business practice in which the employees of a company work with an outside organization to perform a service

cost of goods sold

the expenses incurred to produce the goods or services sold

cost per hire

the amount of money needed to recruit a new employee, which includes advertising, recruiting fees, referral fees, travel expenses and relocation costs

cost-benefit analysis

a financial review of various options to determine if the benefits are greater than the costs

cost-sharing

a method of saving money by dividing the costs of a program, project or business operation among those involved

counseling

a form of intervention in which the emphasis is on the cause of a problem rather than on job performance

credentials

proof of a person's earned authority, status or rights, usually in writing (for example, a university diploma or proof of passing a professional exam)

crisis management

a plan that details the actions to be taken when a crisis strikes an

plan

organization

criterion

a test, standard or rule on which something is judged or measured

Glossary

Word

Definition

criterion-related

refers to the link between a selection device and job performance

validity critical incidents tool

a record of positive and negative employee actions

critical path

the longest irreducible sequence of work activities which determines the minimum duration of a project

cross-border

taking place across the geographic boundaries of two or more countries (for example, cross-border trade)

cross-cultural

involving two or more cultures (such as national, regional or professional cultures)

cross-cultural training

programs that provide information to help a person live and work successfully in a different culture (for example, teaching about cultural values, beliefs and practices, communication styles, business protocols and daily living resources)

CSR

corporate social responsibility. A business philosophy in which an organization helps to improve social and environmental problems.

cultural coaching

giving support and suggestions to help employees achieve greater success with different cultures

cultural determinism

the belief that one's culture determines one's behavior

cultural dilemmas

a model identified by Fons Trompenaars and Charles HampdenTurner that identifies seven alternatives that illustrate tensions that occur between cultures

Glossary

Word

Definition

cultural distance

the disconnect between an organization’s leaders and subsidiary leaders that increases the need for feedback (advice, comments, responses and opinions) about organizational policies and their implementation

cultural intelligence

a person's ability to function in multi-cultural situations and to interact appropriately with people from different backgrounds

cultural noise

impediments to successful communication between people of different cultures; failure to recognize responses of a candidate that are socially acceptable rather than factual

cultural novelty

the difference between a person's native culture and a new culture, and the degree of difficulty in adjusting to the new culture

cultural presumption

an unintentional attitude or conduct that originates from a person's cultural perspective

cultural relativism

the belief that everything is relative because cultures vary so greatly

cultural shortcut

words, phrases or non-verbal cues that native English speakers use to quickly convey a message that they presume their listeners or readers will understand without any explicit explanation. Examples include idioms, phrasal verbs, jargon, industry cliché, acronyms and colloquial expressions.

cultural stereotypes

generalizations made about individuals based on ethnicity, gender, age, nationality or other characteristics believed to be typical of a specific group

Glossary

Word

Definition

culture

the values and beliefs that shape a specific group of people (for example, organizational culture, national culture, generational culture and professional culture)

customer satisfaction

a measure of how products and services supplied by an organization meet or surpass customer expectation

customer value

a business or marketing statement that describes why a customer

proposition (CVP)

should buy a product or use a service. It is specifically targeted to potential customers rather than other constituent groups such as employees, partners or suppliers.

CVP

customer value proposition. A business or marketing statement that describes why a customer should buy a product or use a service. It is specifically targeted to potential customers rather than other constituent groups such as employees, partners or suppliers.

D danger premium

extra pay that employees receive for working in dangerous jobs or places (for example, environments that are hazardous or politically unstable)

dashboard

similar to a dashboard on a car, this tool arranges information in a visual fashion that allows the user to view and compare data

days to fill

the average number of days it takes to hire someone for an open job position

decentralized

when decision-making authority is given to lower levels in an organization's hierarchy

Glossary

Word

Definition

decentralization

the degree to which decision-making authority is given to lower levels in an organization's hierarchy

decision science

a consistent and logical framework that enhances reliable decisions about a key resource—wherever those decisions are made

decreasing returns

a type of learning curve in which the amount of learning or skill level increases rapidly at first and then the rate of improvement slows

dedicated HR

a human resource position that works only on HR responsibilities in an organization

deductive reasoning

reasoning from the general to the specific. A method of reasoning that forms a conclusion from general information. The opposite of inductive reasoning, where a conclusion is formed from particular facts.

defamation

injuring someone's reputation by making a false and malicious statement. These statements may be either spoken (that is, slander) or written (that is, libel).

deferred compensation

a pension program which allows an employee to contribute a portion

plan

of income over time to be paid as a lump sum at retirement when the employee's income tax rate will be lower

defined benefit plan

a retirement plan that tells participants exactly how much money they will receive on a specific later date (usually the day they retire)

defined contribution

a retirement plan where the amount of money that is to be regularly

plan

contributed to the fund is specified, but no promises are made regarding the future value of the benefit. The amount of the benefit at retirement will depend on the investment return.

Glossary

Word

Definition

defined retirement plan a retirement plan that tells participants exactly how much money they will receive on a specific later date (usually the day they retire) deliverables

a tangible product created during the course of a project for delivery to the customer

delphi technique

a method of forecasting where a group of experts provide individual opinions which are later shared in order to reach a more objective decision

descriptive statistics

statistics which condense and summarize large amounts of data for quick understanding

demand analysis

a type of workforce planning data. Demand analysis considers the model organization of the future and its human capital needs. Demand is often measured in terms of estimated growth, need for new skills, and the location and number of new positions.

demographics

statistics about groups of people that give information such as age, gender, income and ethnic background

designated

something intended for a specific person or purpose

develop professionally

activities that prepare employees for future responsibilities while increasing their capacity to perform their current jobs

development

something that has happened or the act of making or improving something

development-oriented

a descriptor for performance evaluation, this phrase indicates that the evaluation focuses on identifying developmental activities for improving performance

Glossary

Word

Definition

developmental

activities that prepare employees for future responsibilities while

activities

increasing their capacity to perform their current jobs

didactic

intending to teach or demonstrate

differential

a change in value of one item compared to another (for example, a cost-of-living differential is the difference between the price of goods bought in the home country compared to the price of similar goods in the host country)

differential pay

pay that is based on when the employee works or where the employee works; also called variable pay

diffuse culture

a culture in which people are very private; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of specific culture

digital divide

the gap between individuals with and without access to technology

dilemma reconciliation

a method of resolving cross-cultural differences that focuses on the use of “recognize, respect and reconcile”

direct compensation

a type of pay received by employees that includes base pay, differential pay and incentive pay

directive interview

a type of interview in which the interviewer poses specific questions to a candidate and keeps control

directors' and officers'

liability insurance that protects directors, officers and corporations

(D&O) liability

from claims

insurance

Glossary

Word

Definition

disability

a physical or mental condition that limits, but does not prevent, the performance of certain tasks (for example, a person who is blind or deaf)

disaster recovery plan

guidelines and procedures used by an organization to recover essential business operations in the event of a disaster. Many disaster recovery plans place an emphasis on technology and information system recovery

dispute resolution

resolving conflict between people or groups (for example, lawsuits, arbitration and mediation)

distance learning

a method of education that uses TV, audio or video tapes, computers, the Internet, and mobile devices instead of traditional classroom teaching, where students are physically present with their teacher

distributed training

a method of training that allows instructors, students and content to be located in different places. This type of training can be used with a traditional classroom or to create virtual classrooms.

distributive bargaining

a negotiation process aimed at reaching the best and most equitable outcome for all parties involved

diversity

a combination of various people working together, often with differences in culture, race, generation, gender or religion

diversity training

training designed to inform and educate senior managers and employees about diversity and to develop concrete skills to facilitate enhanced productivity and communication among all employees

divestiture

property which an organization sells or gives to another organization (for example, a company sells a business unit)

Glossary

Word

Definition

divisional structure

an organizational structure in which segments are separated by product, customer, market or region

DMADV

a Six Sigma process. An acronym formed by “define, measure, analyze, design, verify”. Is an improvement system used to develop new processes or products at Six Sigma-quality levels.

DMAIC

a Six Sigma process. An acronym formed by “define, measure, analyze, improve, control”. An improvement system for existing processes falling below specifications and looking for incremental improvement.

domestic organization

a local organization. An organization that does business and is based in the country where it is established, unlike a multinational organization, which does business in more than one country.

dot chart

a graph with a vertical and horizontal axis with dots at each data point. Also called a scatter plot or scatter diagram.

downsizing

a decrease in a company's workforce to create efficiency and profitability

draw

an amount advanced to a salesperson in anticipation of future commissions (this a unique usage of the word “draw” associated with pay methods for salespeople)

drive

to push or move forward a plan or project

dual-ladder programs

career development programs that identify meaningful career paths for employees not interested in traditional management roles

Glossary

Word

Definition

due diligence

the gathering and analysis of important information related to a business acquisition or merger, such as assets and liabilities, contracts and benefit plans

due process

the way a government enforces its laws to protect its citizens (for example, guaranteeing a person a fair trial)

duty of good faith and

imposes on each party in a contract an obligation for honesty in the

fair dealing

conduct of the transaction

duty of loyalty

common-law precept that imposes on employees a duty to be loyal to the employer

E EAP

employee assistance program. Services and counseling that employees receive to help them solve problems that could affect their work productivity. Examples include counseling for drug or alcohol problems or family issues.

economic valuation

giving monetary value to environmental factors (for example, the quality of air and water, which are not normally part of a financial valuation)

economies of scale

the cost benefits that an organization experiences as it gains efficiency through expansion

Eiffel Tower

an organizational culture in which authority and decision-making

organizational culture

responsibility increase with promotion; one of Trompenaars’ four organizational cultures

Glossary

Word

Definition

e-HR

electronic human resources. Delivery HR services using technology and web-based applications.

e-learning

electronic learning. A method of education where students attend classes on a computer or on the Internet.

e-procurement

electronic procurement. Online ordering processes.

eligible

to be qualified to participate in a program or to apply for a job

emergency response

a plan that describes the actions to be taken by all personnel during

plan

situations that pose a threat to human health and the environment

emergency-shift pay

extra pay that employees receive when they are called into work during an emergency

emotional intelligence

the ability of an individual to be aware of the emotions and moods of

(EI)

others and manage his or her own emotions and impulses

employee assistance

services and counseling that employees receive to help them solve

program

problems that could affect their work productivity. Examples include counseling for drug or alcohol problems or family issues.

employee benefits

payments or allowances that organizations give to their employees (for example, medical insurance, social security taxes, pension contributions, education reimbursement, and car or clothing allowances)

employee engagement

a measurement of employees' involvement, satisfaction, happiness and loyalty with their employment (how hard they work and how long they stay with their organization)

Glossary

Word

Definition

employee handbook

a manual that contains information about an organization's policies, procedures and benefits

employee involvement

planned and orderly attempt to link the shared interests of the

(EI)

employee and the organization for their mutual benefit

employee relations

interaction between employees and an organization (for example, communications, conflict resolution, compliance with legal regulations, career development and performance measurement)

employee retention

an organization's techniques to keep its employees

employee self-service

a trend in human resource management that allows employees to handle many job-related tasks (such as updates to their personnel data) using technology

employee stock

a tax-qualified benefit plan with defined contributions that allows

ownership plan

employees to own shares in a company

(ESOP) employee surveys

a measurement tool used to assess employee perceptions about the work environment

employee turnover

the percentage of a company's employees that must be replaced at any time

employer branding

the image an organization presents to its employees, stakeholders and customers

employer of choice

an organization that people want to work for because it attracts, motivates and keeps good employees

Glossary

Word

Definition

employer-paid benefits

the benefits that an organization gives its employees in addition to salary (for example, medical insurance, payments to retirement funds, or allowances for cars or clothing)

employment at will

an employment agreement in which an employee can quit or can be fired at any time and for any reason

employment branding

a process of turning an organization into an employer of choice

employment contract

an agreement between an employer and an employee that explains the employment relationship

employment offer

a letter sent immediately after the final decision to hire a candidate is made that makes the hiring decision official

employment practices

insurance that protects an employer against claims by workers that

liability insurance

their legal rights as employees of the company have been violated

(EPLI) empowerment

the ability for employees to manage their work, share information and make decisions without close supervision

enterprise resource

computer software that combines information from all areas of an

planning (ERP)

organization (such as finance, human resources, operations and materials) and also manages contact with people outside the organization (such as customers, suppliers and stakeholders)

enterprise risk

computer software that helps identify and manage operational risk

management (ERM)

across an organization

environmental

the management of products and processes that show concern for

responsibility

health, safety and the environment

Glossary

Word

Definition

environmental

acquiring and using information about the internal and external

scanning

business environments that influence an organization's strategy. For example, determining how to respond to a talent shortage.

equal employment

a United States law that guarantees equal treatment and respect for all

opportunity (EEO)

employees

equity

the amount of the owners’ or shareholders’ portion of the business

equity compensation

a non-cash payment that represents an ownership interest in a company (for example, stock options and restricted stock)

equity partnership

an agreement for a person or organization to own part of a company by providing start-up funds to the new business

ergonomic

designed to be comfortable and avoid injuries (for example, an ergonomic chair or keyboard)

ERP

enterprise resource planning. Computer software that combines information from all areas of an organization (such as finance, human resources, operations and materials) and also manages contact with people outside the organization (such as customers, suppliers and stakeholders).

errors and omission

form of professional liability coverage that protects against

(E&O) insurance

employment claims

ESOP

employee stock ownership plan. A tax-qualified benefit plan with defined contributions that allows employees to own shares in a company.

espouse

adopt as one's own; support

Glossary

Word

Definition

essential functions

an employee's main responsibilities or tasks to succeed in a job

essential tensions

basic conflicts that are inherent between different cultures

ethical strategy

a strategy, or course of action, that does not violate the accepted system of principles and values that guide individual or group behavior

ethics

a system of principles and values that guide individual or group behavior

ethics hotline

a dedicated phone, online chat or e-mail address used to confidentially report ethical issues

ethnocentric

a cultural bias based on the belief that one's own culture is the center of everything and other cultures are less effective or less important

ethnocentric staffing

filling important positions in an international organization by

orientation

choosing new hires from the country where the organization has its headquarters

ethnocentrism

the belief that one's own culture is the center of everything and other cultures are less effective or less important; opposite of parochialism

ethnorelative

a cultural bias based on the ability to recognize different values and behaviors as cultural and not universal

ethnorelativism

the ability to recognize different values and behaviors as cultural and not universal

evaluation

a level of learning characterized by ability to make judgments

Glossary

Word

Definition

executive search firms

an organization specializing in recruiting candidates for executive, managerial or professional positions. Executive search firms are typically external to the hiring organization.

exempt

a term used in the United States to designate employees who are excluded from the overtime pay requirements of the law

exempt-level

a term used in the United States which describes employees who work

experience

as many hours as are necessary to perform the tasks of their position. They do not receive overtime pay, unlike hourly workers.

exit interview

an interview that HR has with an employee to get feedback about the job the employee held, the work environment and the organization

expatriate

an employee who has been transferred from their country of citizenship (home country) to live and work in another country (host country)

expatriate assignment

a position in one country that is filled by a person from another country who moves there to live and work

expenses

the costs of conducting business

experimental research

research in which certain factors (variables) are manipulated and the results are examined

explicit culture

surface characteristics of a culture (such as dress) which are easy to identify but sometimes difficult to comprehend

express oral contract

verbal employment promises made between employer and employee

Glossary

Word

Definition

external coaching

coaching typically available to professional, exempt and/or highpotential employees that is done in a private and confidential relationship with a trained or certified consultant/coach

external cultures

cultures that believe humans are part of a larger scheme that directs the course of events; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of internal cultures

external equity

classification of pay rates. When an organization's pay rates are at least equal to market rates.

external forces

events an organization cannot control. Things that occur outside of an organization that might affect its financial health, employees, products, services or customers (for example, political, economic or environmental challenges).

extraterritorial laws

laws from one country that apply to that country's citizens when they travel or live in countries where they might be exempt from some local laws. Similar exceptions can apply to companies operating abroad.

extraterritoriality

being exempt from the laws of the foreign country in which one is living (for example, foreign diplomats)

extrinsic rewards

work or actions where the motivating factors are material and are measured through monetary benefits, grades, prizes and praise

F face-to-face

interacting while in the presence of another person as opposed to interaction on the telephone, a webinar or e-mail

Glossary

Word

Definition

facilitator

a person who leads or coordinates a process

factor comparison

a job comparison method that ranks each job by each selected

method

compensable factor and then identifies dollar values to develop a pay rate

family organizational

an organizational culture that focuses on personal relationships and

culture

compatibility; one of Trompenaars’ four organizational cultures

fast-track programs

career development programs that identify potential leaders and rapidly increase their leadership skill development

feasibility study

an investigation or analysis of what is possible. Research and analysis to determine if a project will succeed.

federal regulations

national laws. United States laws that apply in every state (as opposed to laws unique to every state).

feedback

advice, comments, responses or opinions provided to an individual in the form of coaching or counseling regarding his or her performance or behavior

femininity

the quality of being feminine. When gender roles overlap within a culture; one of Hofstede’s dimensions of culture, the opposite of masculinity

fetal protection

policies formed with the primary goal of protecting the fetus from

policies

workplace hazards

financial statement

explains revenues, expenses and profits over a specified period of

analysis

time, usually a year or a quarter

Glossary

Word

Definition

financial viability

the ability of an organization to achieve financial goals, growth and stability while also paying expenses and debt

first-impression error

a type of error made by interviewer. When an interviewer lets their first impression of the candidate affect the outcome of the interview.

fixed costs

business expenses that are not dependent on the level or goods or services produced by the organization. That is, the amount does not change based on the volume of goods or services produced.

flat-rate pay

a type of pay calculation that provides each incumbent of a job with the same rate of pay regardless of performance or seniority. This is also known as single-rate pay.

flexible staffing

the use of alternative recruiting sources and workers who are not regular employees. This is also known as alternative staffing.

flextime

a work schedule that allows changes in the beginning and end of the work day without reducing the number of hours worked per week. This is also known as variable work schedule.

focus group

a small group invited to actively participate in a structured discussion with a facilitator

forecasting

a tool used to plan for the future needs of a business or other operation. In HR, it is usually focused on predicting future employment needs. Also defined as identifying expected future conditions based on information about the past and the present; predicting.

Glossary

Word

Definition

foreign compulsion

exemption from a home country's law. When a law of an

exception

organization's home country does not apply because it is in conflict with laws of the country where the organization is doing business.

foreign direct

ownership of a business or property by a foreign entity. An overseas

investment

investment in structures, equipment or property controlled by a foreign corporation.

foreign service

a financial reward for moving to a foreign country. Extra pay that an

premiums

employee receives for accepting an international work assignment.

foreign subsidiary

a legal term defining ownership of a foreign company. A company that is more than 50 percent owned or controlled by a parent organization in another country.

formal communication

communication that is officially authorized by the organization

formalization

structured work roles and rules. The degree to which processes and procedures define job functions and organizational structure.

formula budgeting

a form of budgeting in which an average cost is applied to comparable expenses and general funding is changed by a specific amount

forum shopping

the practice of trying to get a trial held in a location that is most likely to produce a favorable result

franchising

a business model that involves licensing. Selling a license for the use of a trademark, product or service in order to do business a certain way and receiving ongoing payment for the license.

fraudulent

intentional deception relied on and resulting in injury to another

misrepresentation

person

Glossary

Word

Definition

frequency distribution

data gathered that is grouped from lowest to highest

frequency table

shows the number of people or organizations associated with data organized in a frequency distribution

front-back structure

an organization that has two parts: one part that focuses on the customers and the market (the "front") and one part that develops products and services (the "back")

FTE

full-time equivalent. A percentage comparing the number of hours that an organization's part-time employees work to the number of hours that full-time employees work.

full-time equivalent

a percentage comparing the number of hours that an organization's

(FTE)

part-time employees work to the number of hours that full-time employees work

functional area

a group of people performing similar tasks. A department in which people have similar specialties or skills (for example, the accounting or IT department in an organization).

functional HR

dedicated tasks of the human resource position in an organization. The human resource role in an organization that focuses on strategy, recruitment, management and the direction of the people in the organization.

functional structure

a group of people performing similar tasks. A department or division where people have similar specialties or skills (for example, the accounting or IT department in an organization).

Glossary

Word

Definition

G gainsharing plans

group incentives where a portion of the gains an organization realizes from group efforts is shared with the group

Gantt chart

a project planning tool that graphically displays activities of a project in sequential order and plots them against time

gap analysis

a technique used to compare the current state with the future desired state. An analysis process which helps an organization compare its actual performance with its potential performance.

general pay increase

a type of pay increase given to all employees based on local competitive market requirements. This increase is awarded regardless of employee performance.

generalization

an objective conclusion. A perception based on observations (for example, Americans are usually friendly). Different from a stereotype (for example, all Americans are friendly).

Generation X

a group of people born roughly between the years of 1965 and 1980

Generation Y

a group of people born after 1980

geocentric staffing

management of global talent. The practice of choosing the best

orientation

employees for a job regardless of their nationality or where the job is located.

geographic structure

an organizational model in which divisions, functions or departments are organized by location in a specific country or region

Glossary

Word

Definition

global integration

the management of global talent. The practice of choosing the best employees for a job regardless of their nationality or where the job is located.

glass ceiling

an artificial barrier to advancement which excludes groups of individuals from access to senior leadership positions

global ethics

a system of principles and values that guide behavior around the world

global ethics policy

company behavioral guidelines. An outline of how a company expects employees to behave around the world, often intended to prevent bribery and corruption.

global integration

bringing together diverse elements across multiple geographies. Working to promote an effective combination of different people, products, services and systems throughout the world.

global mindset

a worldview that embraces cultural diversity. A perspective that helps people understand and function successfully in a range of cultures, markets and organizations. It is an attitude of authentic interest in culturally diverse perspectives, receptiveness to new possibilities and ideas, and a recognition that ignoring them can lead to unpredictable consequences in workplace interactions.

global mobility

international relocation. The transfer of employees from one part of the world to another.

global organization

an organization that views the whole world as one market and does not divide it into separate markets by country

Glossary

Word

Definition

global sourcing

recruiting processes conducted on a global basis. This phrase is used as part of the people development and talent management domain behavior 03, “Analyze conditions affecting the organization’s source of employees (for example, the average age of the available workforce, global sourcing of talent, job changes, global mobility)." This reference pertains to the usage for this sentence only.

global staffing

worldwide employees. The process of identifying the number and type of employees an organization needs worldwide and searching for the best candidates.

Global Sullivan

rules for ethics and human rights. A voluntary set of rules to help an

Principles

organization advance human rights and equality.

global talent

a strategy to put qualified employees in key positions around the

acquisition

world. Actions an organization takes to make sure it has employees with the right skills to accomplish its worldwide goals.

global team

a group of employees who are working on the same project but who are located in different countries or come from different cultures

globalization

expansion of products, services, people and customs throughout the world. Changes in society and the world as a result of economic trade and cultural exchange.

glocalization

a strong local and global presence. Characteristic of a company that thinks globally, but acts locally. When a company has a strong presence both in its own country and around the world.

Glossary

Word

Definition

glocalized

an organization where headquarters develops goals and standards centrally and allows local HR to develop country-specific mechanisms

goals

objectives that an individual or organization wishes to achieve; ambitions

going-rate approach

a method for determining the salary of an employee on an international assignment; the salary is based on pay rates in the employee's home country

good-faith bargaining

a bargaining technique. When parties enter into negotiation with a sincere desire to arrive at an agreement.

governance

a system of rules and processes an organization creates to comply with local and international laws, accounting rules, ethical norms and environmental and social codes of conduct

graded vesting

a calculation method for pension plan vesting. A system by which qualified retirement plan participants become incrementally vested over a period of years of service.

graphic rating scale

a method of evaluating employees. A method of giving employees a numerical rating for having certain traits (for example, being reliable or honest).

green

environmentally conscious

green-circle rates

a classification for employee pay. A situation where an employee's pay is below the minimum of the range.

Glossary

Word

Definition

Greenfield operation

the startup of a new business plant or operation, usually in a new location

grievance

a cause of distress that can lead to an official complaint (for example, difficult work conditions); serious complaint

gross domestic product

a financial metric used to measure a country's commercial output.

(GDP)

Estimate of the total value of goods and services produced in a country in a given year.

gross profit margin

a financial metric to measure gross profit. Measures the difference between what it costs to produce a product and the selling price.

grossed-up income

a practice in which a company increases an expatriate's base pay in order to cover the additional taxes the expatriate owes because of extra benefits and overseas allowances

group consensus

a decision process in which a group of people agree to a decision or come to the same conclusion; agreement between people

group interview

a type of interview where multiple job candidates are interviewed by one or more interviewers at the same time and/or multiple people in an organization interview a single job candidate at the same time

guided missile

an organizational culture that is highly focused on the achievement of

organizational culture

specific objectives; one of Trompenaars’ four organizational cultures

H halo effect

the transfer of the positive qualities of a person or thing to related people or things

Glossary

Word

Definition

hardship premium

extra payment or benefits that an expatriate receives on assignment in a country where the living and working conditions are challenging

hardships

situations in a country that cause political or economic uncertainty that make it challenging for expatriates to live and work. Often, expatriates receive extra hardship pay.

head count

the number of employees an organization has on its payroll

head hunter

an informal name for an employment recruiter, sometimes referred to as an executive search firm

head hunting

the practice of recruiting employees from one company to work at another company

high-context culture

a culture that communicates indirectly, through the context of a situation more than through words and that builds relationships slowly (for example, Japan, China, Arab countries, Spain and Greece); defined by Edward T. Hall

high-potential

an employee who has been identified as a talented and important

employee

contributor

hiring

engaging the service or labor of an individual by payment of wages; employing

histogram

a bar graph that shows the upper and lower limits in a set of data; a bar graph showing frequency distribution

holistic

a culture that views each individual as a whole; opposite of specific

Glossary

Word

Definition

home-country

an approach to handling an expatriate's international payroll.

compensation

Expatriate salary that stays the same while the employee is on assignment (for example, if an employee is relocated from Tokyo to London, he or she continues to receive the Tokyo salary along with expatriate benefits).

homogeneous

a description of a group whose members are all the same or similar (for example, people from the same background and heritage); opposite of heterogeneous

horn effect

when the interviewer allows one strong point that works against candidate to overshadow all other information

host-country nationals

employees or other people who are citizens of the country where a person is working on an expatriate assignment; local citizens of a country

hostile environment

a situation in which an employee's co-workers create an

harassment

uncomfortable work environment, often through inappropriate sexual behavior or discrimination; harassment from co-workers rather than supervisors

hourly wage

a form of base pay that is dependent on the number of hours worked

human resources. A function in an organization that focuses on implementing organizational strategy, as well as recruitment, management and providing direction for the people who work in the organization.

Glossary

Word

Definition

HR audit

an assessment of an organization's human resources. An evaluation of the strengths, weaknesses and development needs of human resources required for organizational performance.

HR business partner

a strategic role in which human resources works closely with an organization to develop strategies and achieve business results

HR partner

a manager or department that has a relationship with HR in order to provide services to the organization; an ally in providing HR services

HR value proposition

the HR policies, procedures, functions and personnel that deliver value to an organization's stakeholders (both internal and external)

HRD

human resource development. The part of human resource management that deals with training employees and giving them the skills they need to do their jobs both now and in the future.

HRIS

human resource information systems. Technology that supports human resource functions.

human capital

employees' knowledge, talents and skills that add to the value of the organization

human capital

a process to reduce the gap between the goals of the organization and

optimization

the skills of the workforce; also see human capital risk analysis

human capital risk

the analysis of human capital risk as the measurement of the gap

analysis

between the goals of the organization and the skills of the workforce

human capital strategy

methods and tools for recruiting, managing and keeping important employees

Glossary

Word

Definition

human resource

a systematic and planned delivery of activities that provide the

development (HRD)

members of an organization with the skills necessary to meet current

process

and future job demands

human resource

technology that supports human resource functions

information system (HRIS) human resource

design of formal systems in an organization that ensure the effective

management (HRM)

and efficient use of human talent to accomplish organizational goals

human resources (HR)

a function in an organization that focuses on implementing organizational strategy, as well as recruitment, management and providing direction for the people who work in the organization

hybrid structure

a vertical and horizontal organizational model. An organizational model that combines different operational, functional, product and geographic structures.

hypothesis

a specific, testable prediction that is derived from a theory and describes a relationship between two variables

I ILO

International Labour Organization. A department of the United Nations that deals with human and labor rights.

ILO conventions

standards of the International Labour Organization. International standards for employers and employees that become international law when a certain number of governments have adopted them.

Glossary

Word

Definition

in-basket exercise

a test used to hire or promote employees to management positions. The test measures the candidate's ability to prioritize and respond to daily tasks.

incentive

a monetary or non-monetary reward to motivate an employee (for example, a bonus or extra time off); motivation, inducement

income statement

a report of financial performance that details revenues, expenses and profits over a specified accounting period—usually a year or a quarter. Also called the profit and loss statement.

incubator

an organizational culture in which any individual in the organization

organizational culture

can exert authority and gain recognition; one of Trompenaars’ four organizational cultures

independent

workers who contract to do specific work for other people or

contractors

organizations and are not considered employees; people who provide goods or services under an agreement

indirect compensation

compensation that is not paid directly to an employee and is calculated in addition to base salary and incentive pay (for example, health/dental/vision insurance, vacation, retirement benefits, educational benefits, relocation expenses, etc.)

individual

a document completed by the individual for the plan of self-

development plan

development over the next period. This plan is then reviewed and

(IDP)

discussed by supervisors to match the individual goals with organization goals.

Glossary

Word

Definition

individualism

a cultural belief that the individual is the most important part of society; one of Hofstede's cultural dimensions, opposite of collectivism

individualist culture

a culture in which the individual is the most important part of society; one of Hofstede's cultural dimensions, opposite of collective culture

inducement

a benefit that management offers to employees as motivation for producing specific results; incentive

inductive reasoning

reasoning from the specific to the general. A method of reasoning that forms a conclusion from particular facts. The opposite of deductive reasoning, where a conclusion is formed from general facts.

indulgence

a culture with an indulgence orientation has the freedom to pursue desires, express feelings and experience gratification; one of Hofstede's cultural dimensions, opposite of restraint

industrial relations

the relationship between the management of an industrial enterprise and its employees, as guided by specific laws and regulations

ineligible

not suitable to participate in a program or apply for a job; not qualified, unsuitable

inferential statistics

let’s you form a conclusion about a characteristic of a population by studying a sample taken from that population

informal

unofficial communication that occurs among employees every day

communication informants

people who provide business, social or cultural data to others; suppliers of useful information

Glossary

Word

Definition

initiatives

actions related to new ideas or to starting new plans; ideas, programs, projects

inpatriate

a foreign employee who is on a work assignment in the country where an organization's headquarters are located

inpatriation

the process of transferring a foreign employee to a work assignment in the country where an organization's headquarters are located

insourcing

assigning a job to an internal department instead of to an outside organization; opposite of outsourcing

instant awards

rewards for employees that are provided immediately after the desired behavior is produced; immediate employee recognition

integrate

to combine or bring together different parts

intellectual property

creations or inventions protected by law. An original invention or something created by the mind, usually protected by patents, trademarks or copyrights.

intercultural

between or among people of different cultures; involving or representing different cultures (for example, intercultural communication, intercultural competency or intercultural marriage)

intercultural

communication involving people from any culture interacting with

communication

anyone else from another culture and/or multiple cultures at the same time

internal cultures

cultures where individuals determine and follow their own paths; one of Hofstede's cultural dimensions, opposite of external cultures

Glossary

Word

Definition

internal equity

unique jobs are fairly compensated by the organization as performance or job differences result in corresponding differences in pay rates

internal forces

drivers of change inside an organization. Key people and influences inside an organization that shape its future (the opposite of external forces, such as the economy and competitors).

internal rate of return

a way of measuring profits. A calculation of the average return each year during the life of an investment.

international assignee

a person who moves to a new country to work on an international assignment; expatriate employee

International English

a mode of communication increasingly used in international business where non-native English speakers speak English with native English speakers. Requires the avoidance of culturally laden language such as cultural shortcuts, metaphors, jargon, slang and idiomatic phrases.

International Labour

a department of the United Nations that deals with human and labor

Organization (ILO)

rights

international

a company that has operations and services in different parts of the

organization

world; a business that operates in more than one country

International

the world's largest developer and publisher of International Standards.

Organization for

ISO is a network of the national standards institutes of 159 countries,

Standardization (ISO)

one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system.

Glossary

Word

Definition

Internet

a global system of interconnected computer networks that use the standard Internet protocol suite (TCP/IP) to serve billions of users worldwide

interpersonal skills

effective social qualities for communicating and building good relationships with different people; traits for effective social interaction

interpretation

an explanation of the meaning of something; translating spoken language

interpreter

someone who translates spoken language by speaking or signing

intrinsic reward

non-material motivation which comes from personal satisfaction (for example, job status, job satisfaction or human interest)

investments

money and capital which is spent to make more money (for examples, stocks, bonds, real-estate). A commitment of money for expected return.

J job analysis

a study of the major tasks and responsibilities of jobs to determine their importance and relation to other jobs in a company

job competencies

the skills and behaviors that will help an employee succeed in a specific job

job description

a written document describing an employee's work activities (work tasks and responsibilities)

Glossary

Word

Definition

job enlargement

increasing the scope of a job by extending duties and responsibilities, generally without changing pay or status

job enrichment

a way to motivate employees by giving them greater responsibilities and more variety in their work; a motivational tool for increasing job satisfaction

job evaluation

the process of measuring how much a job is worth (for example, in order to set the salary and other benefits)

job hierarchy

a system for ranking jobs to each other based on their internal and external value. The ranking is from most to least important.

job matching

the process of connecting people with appropriate levels of employment

job ranking

a way to compare all jobs based on their value. A job evaluation method that compares jobs to each other based on their importance to the organization.

job requisition

a request to hire a person for an open position. A procedure used when a company wants to hire a new employee to fill a position.

job rotation

a way to develop employees by giving them different jobs to perform; changing work assignments

job shadowing

learning a new job by watching another employee work; observing another person's work practices

job specification

a description of employee qualifications required to perform a specific job; requirements for an employment position

Glossary

Word

Definition

job-content-based job

a method to decide an employee's salary. A way of estimating how

evaluation

much a person should be paid based on what they do.

joint venture

a partnership between two or more organizations. When two or more organizations work together and share risks and rewards. Also called JV.

jurisdiction

the right and power to interpret and apply the law, often within a certain geographical region; legal authority

jurisdiction shopping

the practice of trying to get a trial held in a location that is most likely to produce a favorable result

K key performance

a measure an organization uses to see its progress and show what it

indicator (KPI)

needs to improve

key talent

employees who perform extremely good work and are highly valued by the organization; important and valued workers

kidnap and ransom

policies that reimburse employees' losses due to kidnapping or

insurance

extortion in high-risk areas of the world; protection for employees in high-risk areas

knowledge

the process of gathering, documenting and sharing important

management

information to improve the performance of employees and the organization

knowledge, skills,

the qualifications for a job. A list of special qualifications and

abilities (KSAs)

personal attributes you need to have for a particular job.

Glossary

Word

Definition

KPI

key performance indicator. A measure an organization uses to see its progress and show what it needs to improve.

L labor union

a trade organization or works council. A group of employees with the same job who join together to ask their employers for things such as better wages, benefits or working conditions.

lagging indicators

signs that confirm the economy has already changed (for example, the unemployment rate)

laissez-faire

an economic theory that is strongly against any government interference in business affairs; lack of regulation and control

layoff

a temporary suspension or termination of an employee or groups of employees because of business reasons

leadership

the ability to influence other people or groups to achieve a goal; a management ability

leadership

activities that enhance leadership performance. Investment in

development

programs to help current leaders become more effective and to build future leaders.

leadership pipeline

a source of future leaders. The people in a company who will be developed to move into higher levels of leadership over time.

leading indicators

signs that show the economy will change before it does (for example, a rise or fall in interest rates)

Glossary

Word

Definition

lean six sigma

a strategy that eliminates waste and improves process flows, and focuses on resource optimization through logistical coordination and inventory minimization

learning management

computer software that administers, tracks and reports on employee

system (LMS)

development opportunities, such as classroom and online events, elearning programs and training content

learning organization

an organization that facilitates the learning of its members and continuously transforms itself

learning pace

the time it takes for a person to understand and retain information; how fast a person learns

learning portal

an Internet site where employees can use educational resources; website for learning

learning style

the way people process new information and learn most effectively (for example, some people learn best visually, through lectures or by reading, while others learn best by action or doing). The way a person learns.

lease

an agreement for a person or organization (leasee) to rent a property from its owner (leasor) for a specific period of time and amount of money

leniency error

rating employees higher than their actual performance deserves; favoritism in performance evaluations

leverage

the act of applying a small investment to bring a high level of return; the ability to multiply the return on an investment

Glossary

Word

Definition

liability

an organization’s debts and other financial obligations. Liabilities reflect how the assets are financed. Liabilities are classified as current (due within 12 months) and non-current (due after 12 months).

liaison

a communication link between people or groups; contact, connection, link

licensing

a written contract in which the owner of a trademark or intellectual property gives rights to a licensee to use, produce or sell a product or service

line functions

important functions in an organization that are directly related to and support the organization's objectives

line management

people who create revenue. Work groups that conduct the major business of an organization, such as manufacturing or sales.

linear thinking

how Western cultures view history as a linear; step-by-step thinking

loan

money or goods that a person or organization lends temporarily, usually charging interest; lending of money or goods

local nationals

employees or other people who are citizens of the country where a person is working on an expatriate assignment; local citizens of a country

localized

organizations where headquarters issues policies and allows local HR personnel to develop local systems for implementation

localization

a salary for an international assignee that is the same as the salary that

compensation strategy

a local employee receives for a similar job. Expatriate salary based on the salary structure of the host country.

Glossary

Word

Definition

long term

occurring over an extended time (for example, a long-term goal or a long-term assignment)

long-term orientation

when a culture is organized based on status, values, work ethic, thrift and perseverance. A culture that is able to defer or delay gratification; one of Hofstede's cultural dimensions, opposite of short-term orientation.

long-term assignment

a job in a different culture that lasts longer than six months, usually three to five years

low-context culture

a culture that communicates directly, using words more than situations, and that builds relationships quickly (for example, the United States, Canada, Germany, Sweden, Denmark and United Kingdom); defined by Edward T. Hall

lump-sum

a method for paying expatriates. An expatriate receives an extra

compensation

amount of money (in addition to the base salary) to cover the cost of housing, taxes and transportation, rather than receiving separate funds for each item.

M management contract

an arrangement in which a person or company operates a project or business in return for a fee

manager self-service

a self-service online application. A technology system that allows managers to access data and complete administrative HR tasks on-line without the help of HR personnel.

Glossary

Word

Definition

mandatory benefits

laws which outline benefits to provide economic security for employees and their dependents

manpower

an organization's workforce. The total number of individuals who make up the workforce of an organization.

market salary survey

research summary of fair wages. A review of median pay for specific positions in the same labor market.

market-based job

a comparison of current salaries for a specific job. An evaluation that

evaluation

compares the salaries for particular jobs offered on the external job market.

masculinity

the quality of being masculine. A term used in cultural studies to represent work-oriented societies. One of Hofstede's cultural dimensions, the opposite of femininity.

Maslow's hierarchy

a theory in psychology based on five levels of human needs. A method of ranking human needs in a pyramid, with basic physical needs (such as obtaining food and shelter) at the bottom and psychological needs (such as creative expression) at the top.

mastery

great ability and knowledge of some subject or activity; ability, expertise

matrix structure

a system of managing staff where employees have more than one reporting relationship (both vertical and horizontal relationships). For example, they could report to a direct supervisor as well as a team leader.

Glossary

Word

Definition

mean

a way to calculate the average of a series of numbers. An average determined by adding up a group of numbers, and then dividing that total by the number of numbers. For example, to calculate the mean of "10, 20, 30, 40, 50": first, add the numbers (10+20+30+40+50 = 150), then count the numbers (5), then divide the total by the number of numbers (150/5 = 30).

measures of

a relationship between variables; shows how two or more factors

association

(variables) are related

measures of variation

provide an indicator of variation around central tendency values

median

the middle number in a series. For example, in the series "13, 13, 13, 13, 14, 14, 16, 18, 21", the median is 14, with four numbers to the left and four numbers to the right

mediation

an attempt to help other people or groups come to an agreement

mentoring

when an experienced person shares knowledge with someone who has less experience; helping a person learn

merger

two or more organizations that come together through a purchase, acquisition or sharing of resources to form a new legal entity. Usually the new organization saves money by eliminating duplicate jobs.

mergers and

when two or more different organizations are joined together as

acquisitions (M&A)

equals or when one organization purchases another and the purchased employees are assimilated into the purchasing organization under one common owner and management structure; sometimes under the name of the purchasing organization and sometimes as a new entity

Glossary

Word

Definition

merit increase

an increase in wages for meeting or exceeding the performance goals of a job

milestones

important events or achievements that mark progress toward a goal

minimum wage

the lowest hourly, daily or monthly salary that employers must legally pay to employees or workers

mission statement

a short description of the main purpose of an organization, which does not change (unlike strategy and business practices, which can change frequently)

mobility

the ability to move from one place to another. In HR, term refers to employees and their families who move from one location to another.

mobility premium

a financial benefit for expatriates. Extra salary paid to expatriates to encourage them to move to a new country.

mode

the value that occurs most often in a series of numbers. In the following series of numbers, 8 is the mode: 6, 5, 8, 3, 7, 8, 9, 8, 4.

module

one section of a training program which is presented alone or as part of a series of other units

moonlighting

to have a second job in addition to full-time employment; working for more than one company at the same time

moral absolutes

the idea that there is a clear definition of what is right and wrong; beliefs that are right or wrong

Glossary

Word

Definition

motivation

reasons or influences that lead to specific desired behavior such as commitment to a job or continuing efforts to achieve a goal; inspiration for action

multicultural

a group of people from several cultures or ethnic groups. Employees of diverse cultures and backgrounds who are part of an organization's workforce.

multinational

a company that has its headquarters in one country and has offices and

corporation (MNC)

operations in other countries; also known as a multinational organization

multinational

a company that has its headquarters in one country and has offices and

organization

operations in other countries; also known as a multinational corporation (MNC)

multinational pooling

a method of managing the risk of benefit plans across countries. Combining different employee benefit programs in a multinational organization to save money and control risks.

N needs analysis

assessing the present situation to determine the steps necessary to reach a desired future goal

negotiation

the process of bargaining with one or more parties to arrive at a solution that is acceptable to all

nepotism

a practice where people of influence appoint their relatives or friends to positions in a business even though they may be less qualified than other candidates

Glossary

Word

Definition

net present value

a financial metric to analyze profitability of a project. The difference

(NPV)

between the present value of cash inflows and the present value of cash outflows. Compares the value of a monetary amount today to the value of the same monetary amount in the future.

network

a group of people who connect with one another. A computer system that allows people to access shared resources and data.

neutral culture

a culture that feels emotions but controls them; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, the opposite of affective culture

NGO

non-governmental organization. Any non-profit, voluntary and independent organization that is not connected with any government and that usually works to improve social or environmental conditions.

nonexempt

a term used in the United States to designate employees who are not excluded from the overtime pay requirements of the law and are entitled to overtime pay

norms

a standard model or pattern which is considered typical; standards, averages

O offshoring

the relocation of a business process to another country. Transferring internal service or manufacturing operations to a foreign (nonheadquarters) country where there is a supply of skilled and less costly labor.

Glossary

Word

Definition

onboarding

the training and orientation of new employees. The process used to help new employees learn the organization's policies, procedures and culture in addition to their job responsibilities.

online survey

an employee survey administered via the Internet

on-the-job experience

the skills and knowledge a person learns from day-to-day work experience

on-the-job training

acquiring knowledge, practical skills and competencies while engaged in daily work

one-on-one

person-to-person communication such as a conversation between two employees

open sourcing

made available for others to use or modify; freely sharing

org chart

organization chart. A graphic representation of how authority and responsibility is distributed within a company. Includes all work processes of the company.

organization chart

a graphic representation of how authority and responsibility is distributed within a company; includes all work processes of the company

organizational culture

shared attitudes and perceptions in an organization

organizational

a planned process that uses the principles of behavioral science to

development

improve the way an organization functions

Glossary

Word

Definition

organizational

the systematic presentation of data to groups to cause discussion of

feedback

problem areas, to cause ideas for potential solution, to cause motivation for change and to result in the development and implementation of action plans

organizational goals

objectives that an organization wishes to achieve; objectives that guide an organization

organizational

the way employees and processes are grouped into departments or

structure

functions in an organization, along with a description of reporting relationships

organizational values

the values and goals that reflect an organization's philosophy and guide its organizational effectiveness

outplacement

the process of helping an employee find a new job. The services that help an employee find a new job (for example, writing resumes, networking skills and counseling).

outsourcing

transferring certain business functions outside an organization so the organization can focus on core activities (examples of outsourced functions include data processing, telemarketing and manufacturing)

outstanding loan

an unpaid debt; money that a person or organization has borrowed but not yet paid back

overseas premium

a financial benefit for expatriates. The extra salary paid to expatriates to encourage them to move to a new country.

overtime

extra time worked beyond the normal hours of employment or the payment for extra time worked

Glossary

Word

Definition

ownership interest

owning part of a company or business; equity in a company

P parent-country

people who live and work abroad but are citizens of the country where

nationals

an organization's headquarters is located

pareto chart

a chart that shows most frequently occurring items. A vertical bar graph in which values are plotted in decreasing order of frequency, from left to right. Often used in quality control.

parochialism

a narrow interest or view. A view of the world that does not consider other ways of living and working. Opposite of ethnocentrism.

particularist culture

a culture in which fairness is achieved by considering many factors and relationships; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, the opposite of universalist culture

partnership

two or more organizations with shared interests working together toward a common goal; alliance

passing score

the number of correct answers required to pass a test; the minimum points required to pass a test

passive candidate

a recruiting strategy. Identifying and recruiting candidates who are not

recruiting

actively seeking work. Internet recruiting technologies, intelligent search agents and professional networking sites have made it easier to employ this technique.

pay for performance

a salary based on merit or on meeting goals. A payment strategy where management links an employee's pay to desired results, behaviors or goals.

Glossary

Word

Definition

pay grade

used to group jobs that have approximately the same relative internal worth and are paid at the same rate or within the same pay range

pay range

defines a job's upper and lower bounds of possible compensation for individuals whose jobs fall in a pay grade; pay ranges are created for each grade

peers

people who are similar to one another in age, background, profession or status; people equal to each other

percentile

a specific point in a distribution that has a given percentage of items below it

per diem

the amount of money a person receives for working for one day, or the amount an organization allows an employee to spend on expenses each day (for example, meals and hotels on a business trip)

performance appraisals

a method of measuring how effective employees are; employee evaluation

performance logs

informal notes listing examples of employee accomplishments and/or performance problems

performance

the process of setting goals, measuring progress, and rewarding or

management

correcting performance for employees; supervising employees

performance

the process of creating a productive work environment. The process

management system

used to help people perform to the best of their abilities, which begins by defining a job and ends when an employee leaves the organization.

Glossary

Word

Definition

performance review

a documented discussion about an employee's development and performance that involves managers, HR and the employee. Formal evaluation of an employee's work activities.

performance standards

the behaviors and results that management expects employees to achieve on the job

performance-based pay pay linked to how well the employee meets expectations; better performance results in more pay permanent assignment

an employee's regular or usual job or position in a company

perquisites

benefits and special treatment. Special non-monetary privileges (such as a car or club membership) that come with senior job positions; also called executive perks or fringe benefits.

PERT chart

stands for “program evaluation and review technique”. A graphical illustration used to manage very large complex projects with a high degree of task dependency. Project planning tool.

phantom stock

an employee incentive plan. A technique in which a company gives its

arrangement

employees the benefits that come with owning stock, including dividends, but does not actually give them stock in the company.

pilot program

a small group of users who test the training and implementation of a system before the system is released to the entire organization

placement

finding suitable jobs for applicants

planned absence

scheduled time away from work. Missing work after asking permission in advance, such as for vacation or a medical appointment.

Glossary

Word

Definition

plateaued careers

the inability of employees to advance further in the company due to mediocre performance or lack of opportunities

philanthropy

when an organization donates money or resources to a charitable organization or group; charity

pockets of technology

dispersed areas where technology has been developed but is not being used—or used effectively

point factor

a method used for analytical job evaluation. A point rating plan is developed by selecting and defining factors, by defining a number of degrees for each factor, and by assigning point values to each degree. Jobs are analyzed in terms of the factors in the classification plan and assigned a point value by reference to the factor and degree definitions. The total number of points determines the relative value of the job. This method is used for the evaluation of work in the professional and higher categories because of its capacity to evaluate consistently and accurately, the heterogeneous jobs found in the United Nations common system organizations. While it is more costly to develop and operate than other systems, it is more difficult to manipulate and biases become more readily apparent, thus, it is ultimately more cost effective.

policy

a method to help guide and make decisions

political unrest

unrest, agitation or turmoil about a government's actions or beliefs

polycentric staffing

recruiting host-country nationals to manage subsidiaries in their own

orientation

country and recruiting parent-country nationals to fill management positions at headquarters

Glossary

Word

Definition

population

a group or a collection (of people, objects or measurements) that you want to form conclusions about

power distance

a term Geert Hofstede uses in his cultural theory to describe hierarchical relationships between people in a culture. For example, high power distance means there are strong hierarchical relationships. Low power distance means greater equality and accessibility among the population.

predictive validity

a relationship between a test score and a work task. The extent to which a score on a scale or test predicts future behavior.

premiums

incentives or payments employees receive for meeting goals by a certain time; also, payments for insurance

prevailing wage

the hourly wage, usual benefits and overtime that most workers receive in a certain location

primacy errors

incorrect conclusions where the first impression of someone or something continues despite contradictory evidence. Occurs when a manager gives more weight to the employee’s earlier performance and ignores recent performance.

primary research

a type of research that involves data that the HR professional gathers directly for the evaluation

process mapping

a method of assessing critical business functions. A diagram used to assess business processes.

process-flow analysis

a method of assessing critical business functions. A diagram used to assess business processes. Sometimes called process mapping.

Glossary

Word

Definition

proctor

a person who monitors another person or activity (for example, someone who supervises an exam)

product structure

a method of organizing a company in which the departments are grouped by product

profit

the difference between the costs of doing business and the sales price. On the income statement, there are various profit calculations.

professional

actions taken by professionals to attain skills and knowledge for both

development

personal development and career advancement.

progress review

an evaluation of an employee's performance. Formal or informal evaluation of an employee's progress toward goals and recommendations for improvements and development.

progressive discipline

a method of improving employee performance. A series of corrective actions aimed at an employee to resolve a problem or improve performance.

project

an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources; enterprise

project management

planning and guiding processes. A methodical approach to planning and guiding project processes from start to finish.

promotion

advancement of an employee's rank, usually with greater responsibility and more money; job advancement

proprietary

the rights of property ownership relating to key information, materials or methods developed by an organization; relating to an owner or ownership

Glossary

Word

Definition

psychological contract

an unwritten agreement of the mutual beliefs, perceptions and informal obligations between an employer and an employee which influences how they interact

purchase

to buy or to acquire something through payment or barter

Q qualitative

measuring the quality of something rather than quantity

qualitative analysis

a data analysis method that is based on research that uses interviewing to explore and understand the opinions and behavior of individuals or a group

quality assurance

the planned and systematic activities implemented in a quality system so that quality requirements for a product or service will be fulfilled

quantification

giving a number to a measurement of something; counting and measuring

quantitative

measuring the quantity of something rather than the quality; measurable

quantitative analysis

a data analysis method that uses a limited number of measurements to collect numerical data

quartile

four parts each containing one quarter of the item being measured

Glossary

Word

Definition

R RACI chart

stands for “responsible, accountable, consulted and informed”. A chart that supports the effective allocation of roles and responsibilities among the different members of the project team. A project management tool.

raise

an increase in salary that an employee receives, often for good performance

range

the amount covered, or the amount of difference (for example, a salary range is the difference between the lowest and highest amount paid for a particular job)

range penetration

an employee's pay compared to the total pay range for the same job function

ranked performance

a method of evaluating employees. Rating employees from best to worst against each other according to a standard measurement system.

ransom

a demand for money or other goods in exchange for releasing a person or property

reasonable

changing the process of applying for a job or the work environment

accommodation

for a qualified person with a disability

recency errors

incorrect conclusions due to recent actions that are weighed more heavily than overall performance

recruiting

attracting, screening and hiring qualified people for a job

recruiting sources

places or people who provide qualified applicants for job openings

Glossary

Word

Definition

recruitment

the process of attracting, screening and hiring qualified people for a job

redeployment

a change in an employee's location or task, often to reduce layoffs or to make the best use of employees

reduce turnover

to retain employees and lower the number of vacancies in a company

reduction in force

loss of employment positions due to lack of funding or change in

(RIF)

work requirements; temporary or permanent layoffs

redundancies

elimination or reduction of jobs because of downsizing or outsourcing

re-entry shock

the transition challenges that a person experiences when returning to his or her home country after living in another culture; culture shock upon repatriation

referral program

a recruitment method that rewards employees for recommending candidates

reimbursements

payments made for money already spent (for example, a company pays an employee for the cost of travel or supplies after the employee has spent his or her own money)

regiocentric staffing

a staffing policy for a particular geographic area. Focus on

orientation

recruitment and hiring of employees in a particular region with opportunities for inter-regional transfers.

regression analysis

a statistical method that predicts a variable from one or more other variables

Glossary

Word

Definition

reliability

having the same results after many tests; being dependable or consistent

relocation

transferring employees to another location for work; changing residence, moving employees

remuneration

the money paid for work including wages, commissions, bonuses, overtime pay and pay for holidays, vacations and sickness

remuneration surveys

surveys that gather information on what other companies pay employees and what kind of benefits they provide

repatriate

to return home from an international work assignment

repatriation

the return of an employee to the home country after living in another country (for example, an expatriate going home from an international assignment)

replacement planning

using past performance to identify employees who can fill future vacancies (unlike succession planning, which focuses on future potential)

reprimand

a warning given to an employee who violates an organization's rules and may result in dismissal; formal warning or scolding

request for proposal

a written request asking contractors or vendors to propose solutions

(RFP)

and prices that fit the customer’s requirements

requisition

a request to hire a person for an open position. A procedure used when a company wants to hire a new employee to fill a position.

responsibility

a task that is part of an employee's job description; duty

Glossary

Word

Definition

restraint

a culture with stringent social norms that dictate the need for individuals to control their emotions and the need for gratification; one of Hofstede's cultural dimensions, opposite of indulgence

restricted stock

stock with rules about when it can be sold (restricted stock is usually issued as part of a salary package and has a time limit on when it can be fully transferred)

retention

the methods of motivating employees to stay with the organization and making sure employees are satisfied and rewarded; keeping employees

retention management

an organization's techniques to keep its employees

return on investment

a performance measure used to evaluate the financial outcome of an

(ROI)

investment

revenue

the income an organization receives from its operations. Income is typically generated from the sale of goods and services to customers.

risk management

the process of analyzing potential threats and deciding how to prevent them

role behavior

how a person acts as appropriate to a particular job function or position

role play

to perform an action or attitude in a simulation in order to understand a different viewpoint; to act a part

root cause

the underlying cause(s) of specific areas of deficiency in business

Glossary

Word

Definition

rule of law

a political system in which the law is supreme. All citizens are subject to the laws of their country, no individual is above the law and everyone must obey it.

S S.M.A.R.T. goal

applying specific, measurable, achievable, relevant and time-based

setting

goals to help a company achieve business success. A process used to help achieve business success.

salary

a uniform amount that an employee is paid no matter how many hours are worked

salary mid-point

the amount of money between the highest and lowest amount paid for a particular job. The middle range paid for a certain job.

salary range

the lowest and highest wages paid to employees who work in the same or similar jobs; wage band, pay scale, compensation rate

sample

a smaller part of a whole group

Sarbanes-Oxley Act

a broad range of legal regulations that strengthen corporate accounting controls in the United States; sets specific standards for public companies

scaled score

an adjusted score. A conversion of a raw score to a common scale that can be used for comparison.

scatter diagram

a graph with a vertical and horizontal axis with dots at each data point (shows relationships between variables). Also called a scatter plot or dot chart.

Glossary

Word

Definition

scatter plot

a graph with a vertical and horizontal axis with dots at each data point (shows relationships between variables). Also called a scatter diagram or dot chart.

scientific method

an experimental research method where a problem is defined, a hypothesis is formulated, and data is collected and analyzed. Note that non-experimental research observes, measures and analyzes behaviors instead of variables.

scored questions

the answers on exams that count toward the total score. The total number of right and wrong questions on an exam (for example, pretest questions do not count).

secondary research

a type of research that uses data that is gathered by others and reported in various sources; data from secondary research must be examined for relevance

selection

a method for choosing the most suitable candidate for a job

self-assessment

evaluation of one's own performance, abilities and developmental needs

sequential cultures

cultures in which time is viewed as a linear progression; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of synchronic cultures

service mark

a word, phrase, symbol or design that identifies and differentiates the provider of services; trademark

severance

money paid to an employee when employment ends in addition to salary that is owed; separation payment

Glossary

Word

Definition

sexual harassment

unwelcome verbal, visual or physical conduct of a sexual nature that is offensive or inappropriate; inappropriate sexual advances

shared services

a business strategy to centralize administrative functions. An operational approach where each country or unit uses administrative services from a central source rather than repeating these services in different locations (examples of services include finance, purchasing, inventory, payroll, hiring and information technology).

Sharia

Islamic religious law. The code of law from the Koran that regulates civil and criminal justice, and individual behaviors and morals.

shift differential

extra pay employees receive for working a less-than-desirable shift; variable pay

short term

occurring over a brief time (for example, a short-term loan or a shortterm assignment)

short-term assignment

a work assignment outside the home country that is usually less than six months long

short-term orientation

when a culture is concerned about displaying respect and fulfilling social obligations within their cultural contexts; one of Hofstede's cultural dimensions, opposite of long-term orientation

six sigma

a strategy to improve current business processes by continuously reviewing and revising them; business management strategy

skill banks

computerized talent or skill inventories that can furnish a list of qualified people; skill tracking systems

Glossary

Word

Definition

skill tracking systems

computerized talent or skill inventories that can furnish a list of qualified people; skill tracking systems

social audit

systematic assessment of a company’s activities in terms of its social impact (influence)

social media

technology that lets people communicate over the Internet to share information and resources (for example, Twitter, Facebook, LinkedIn and podcasts)

social network

a group of people who interact because they have a common interest. The group communicates either in-person or using technology (for example, Facebook or Twitter).

social networking

when a group of people interact because they have a common interest. The group communicates either in-person or using technology (for example, Facebook or Twitter).

social responsibility

an ethical theory that guides organizations to consider the welfare of society. An organization's voluntary obligation toward the good of the environment in which it operates.

sourcing

identifying candidates who are qualified to do a job by using proactive recruiting techniques

span of control

the number of employees who report to one manager in an organization. The more people that a manager supervises, the wider the span of control.

specific

a culture that views individuals by their parts, not as a whole; opposite of holistic

Glossary

Word

Definition

specific culture

a culture in which people have approachable public lives with a strong boundary to separate their private lives for public lives; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of diffuse culture

split payroll

a method of paying expatriates that gives part of their salary in the currency of the home country and part of their salary in the currency of the host country

staff units

work groups that support the major business of an organization with activities such as accounting, customer service, maintenance and personnel; people who support line management

staffing

the act of selecting, hiring and training people for specific jobs, as well as reducing the workforce when needed

staffing needs analysis

a systematic approach to talent supply and demand. Provides a systematic approach to anticipate the demand for talent and the supply available. The outcome of the process is data that HR professionals can use to help ensure that the appropriate workforce mix will be available when needed to accomplish organizational goals and objectives, typically within a one- to three-year timeframe.

stakeholder

a person, group or organization that has a direct or indirect interest in the organization (for example, owners, investors, employees, suppliers, unions or the community)

standardized

an organization in which policies are developed at headquarters for implementation in the field

Glossary

Word

Definition

status

an individual’s position in an organization in relation to other individuals in the organization; professional standing

start-up

a new business venture. A company or business that recently began operating and is in an early phase of development.

stereotype

an oversimplified opinion, image or attitude that people from a particular group are all the same; fixed opinion or belief

stock option

a benefit which gives employees the right to buy or sell stock in their company at a certain price for a specific period of time

strategic alliance

an arrangement between two organizations to pursue common goals and share resources. Unlike a joint venture, the organizations do not form a new legal entity.

strategic goals

a goal developed during strategic planning to define an important result for an organization to achieve

strategic planning

the process of defining a company's direction for the future in four stages: analysis, development, implementation and evaluation

strategy

a plan of action that starts with examining the current state of an organization and then deciding how to achieve the best state for the organization's future

subsidiary

a company whose voting stock is more than 50 percent owned by another company. The company with the majority interest is called the parent company.

substance abuse

use of habit forming drugs or substances which impair behavior; excessive use of drugs, alcohol or other addictions

Glossary

Word

Definition

succession planning

identifying and developing high-potential employees for the organization's future success; determining and preparing for future talent needs

supervisor

someone who oversees employees in a department or business unit to assign tasks and make sure work is completed

supply analysis

supply data is one type of workforce planning data. Supply analysis considers the varieties of skills in the organization as it exists now and projects the future needs based on anticipated business growth or retention. Historical attrition is considered when forecasting future supply.

supply chain

the process of planning, implementing and controlling operations,

management (SCM)

which begins with acquiring raw materials and continues to customer delivery and support. The steps taken from initial planning through customer support.

sustainability

the ability of an organization to sustain itself while preserving the environment

sweet spot

in sports: the place on a sporting instrument (such as a racket or bat) from which the most accurate shots are made; in business: the place where business and society interests overlap

SWOT analysis

a strategic planning technique used to assess the internal and external environment in which a company operates; its strengths and weaknesses (internal), and opportunities and threats (external)

Glossary

Word

Definition

synchronic cultures

cultures in which individuals often participate in multiple activities at the same time; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of sequential cultures

synchronous learning

type of e-learning in which participants interact without a time delay, which requires them to attend at specific times; online teaching method

systems theory

a theory of how interacting parts work together to achieve a goal. A system is meant to take in inputs, process them and produce outputs.

T tactical objective

the objectives focused on closing high-priority gaps in the near term (as opposed to the long-term strategic HR objectives). Specify in concrete and measurable terms which gaps must be closed and when; specific, concrete and measurable objective.

talent acquisition

the actions an organization takes to meet current and future skill needs for operations throughout the organization.

talent management

the process of recruiting, integrating and developing new workers, developing and keeping current workers, and attracting skilled workers

talent pool

a group of available skilled workers, or database of resumes, that a company can use to recruit in a particular location

talentship

a decision science created by John Boudreau and Peter Ramstad in 2004 that helps managers make better talent management decisions; an employment marketing approach

Glossary

Word

Definition

tax bill

a document which lists the tax money owed to a government or legal body

tax equalization

a policy that makes sure that expatriates' combined home and host taxes are no more than they would have paid if they remained in their home country. The expatriate's company pays for any additional taxes. Tax equalization is also known as tax protection.

tax protection

telecommuting

a flexible work arrangement which allows part- or full-time employees to work at home via a computer

territorial rule

a rule that employees must follow the tax laws of the country where they are working

testing vendor

an organization that provides locations for people to take exams on certain dates

theory of constraints

a systems management philosophy intended to help organizations

(TOC)

continually achieve their goals. Based on the premise that the rate of goal achievement is limited by at least one constraining process. Only by increasing flow through the constraint can overall throughput be increased

third-country national

an expatriate who works for a foreign company that is located in the

(TCN)

host country (for example, a French person working in China for a German company)

Glossary

Word

Definition

Time-based step-rate

a compensation rate based on how long an employee has been

system

performing the job and pay increases occur on a set schedule

time to fill

the average number of days a certain job position remains open; average time to hire people for job vacancies

tolerance for ambiguity the ability of an individual to deal with unknown factors total compensation

an employee's complete pay package including cash, benefits and services

total quality

a method for improving the organization by continuously changing

management (TQM)

practices, structures and systems; continuous improvement

total rewards

financial and non-financial benefits that the employee sees as valuable. All the tools available for attracting, motivating and keeping employees.

totalization agreement

an agreement between countries that says an expatriate only needs to pay social taxes to the country in which he or she is working. Arrangement to avoid double social taxes of expatriates.

trade secret

information that has economic value to an organization’s competitors if known to them. Organizations make reasonable efforts to keep this information secret. Proprietary information.

trade union

a trade organization or works council. A group of employees with the same job who join together to ask their employers for things such as better wages, benefits or working conditions.

trademark

a word, phrase, symbol or design that identifies and differentiates the maker of goods; service mark

Glossary

Word

Definition

training method

a way of communicating skills and knowledge (for example, classroom training, distance learning, online training and on-the-jobtraining). A way of helping people learn.

transfer of learning

the continuous exchange of information, knowledge and skills from one context to another

translation

changing a message from one language to another while keeping the meaning. Interpreting text from one language to another.

transnational

an organization whose operations, production or service processes

corporation (TNC)

take place in more than one country and are interconnected. An organization that operates globally; multinational enterprise.

triple bottom line

a concept coined by Andy Savitz that describes three criteria for organizational success: people, planet and profit

tuition reimbursement

a benefit whereby the employer provides full or partial payment for educational courses completed by employees

turnkey operation

a business that includes everything needed to start operating in a certain location

turnover

a metric expressed using an annualized formula that tracks the number of employees leaving the organization for any reason (for example, resignation, retirement, disability or health reasons, another job, etc.) and the total number of workforce employees per month

Glossary

Word

Definition

U uncertainty avoidance

one of Geert Hofstede's cultural dimensions which describes the degree to which cultures accept ambiguity and risk. For example, in cultures with high uncertainty avoidance, people prefer clear, formal rules. In cultures with low uncertainty avoidance, people are comfortable with flexible rules.

universalist culture

a rules-based culture in which rules are applied consistently and impartially; one of Trompenaars’ and Hampden-Turner’s cultural dilemmas, opposite of particularist culture

unweighted average

gives equal weight to every item being averaged; raw average

up-front

paid in advance, or invested as beginning capital

upward leadership

when a subordinate leads superiors

user interface

software that allows a human and a computer to share information

V validate

to formalize an agreement. In testing, to confirm the accuracy.

validity

the extent to which something is accurate (for example, the extent to which an exam actually measures what it claims to measure). Reliability; true evaluation.

value-added employee

an employee who delivers unique benefits, return on investment (ROI) and value to his or her organization (Cripe and Mansfield 2002)

Glossary

Word

Definition

value chain

a model of how businesses receive raw materials, add value to the raw materials and sell finished products to customers

value creation

the primary financial performance indicator for measuring and

indicator

evaluating financial performance

value proposition

the unique benefits, costs and value that a business delivers to its customers

values

the lasting beliefs of members of a culture about what is good or desirable and what is not

variable

a factor or condition that is subject to change, especially one that is allowed to change; in a scientific experiment, to test a hypothesis

variable costs

the expenses that change in proportion to the activity of the organization. Variable costs are also called unit-level costs because the costs vary with the number of units produced.

variable pay

pay that is based on when the employee works or where the employee works. This is also called differential pay.

variable pay plan

profit-sharing, incentives, bonuses or commissions that align compensation with performance. Compensation that is less predictable than standard base pay.

vicarious liability

a legal doctrine that makes a person liable for the negligence or crimes of another person

virtual communication

the use of technology to communicate across distances (for example, telephone, video chat, instant messenger) or in a virtual reality (e.g., second life)

Glossary

Word

Definition

virtual team

a group of people who work in different times, locations or organizations, who communicate using technology

vision statement

a written statement which clarifies what the organization wants to be in the future

voice-over-Internet

technology that allows voice communication over the Internet

protocol (VoIP) voluntary benefits

extra benefits or discounted services offered to employees with little extra cost to the employer. Examples include additional life insurance, gym memberships and concierge services.

W wage band

the lowest and highest wages paid to employees who work in the same or similar jobs; salary range, pay scale, compensation rate

war for talent

principles based on a 1997 study by McKinsey & Company that projected that talent would be the most important business resource over the following two decades; employment marketing approach

webinar

an interactive seminar on the Internet (usually a live presentation). Meetings, training or presentations on the Internet.

weighted average

considers the number of each type of item being averaged; weighted mean

weighting pattern

term used in statistics to show the frequency of different choices

well being

a positive lifestyle which includes good health, enjoyable recreation and leisure time, and social belonging

Glossary

Word

Definition

wellness program

services to improve and maintain the health of employees

whistle-blower

a non-supervisory employee who reports an ethical and illegal violation; informant

whistle-blowing

a method for a non-supervisory employee to report ethical and illegal violations; informing

work rules

a set of rules specific to an organization that reflect management decisions regarding specific actions to be taken—or avoided—in a given situation

work sample test

an evaluation of a candidate's ability to perform tasks that are similar to the actual tasks performed on the job

work unit

a business function that produces one product or focuses on a single area. Smallest work group in a company.

work/life balance

ability to effectively manage time at work with time spent on leisure or with family members

work/life issues

issues surrounding the balance between an employee’s work and personal life

work/life programs

services to support the well-being of employees and to help them balance their jobs, families and personal lives

workforce

the people working for a single company, industry or a geographic region; workers, employees

Glossary

Word

Definition

workforce analytics

the metrics used to determine the effectiveness of HR functions, such as turnover rates, organizational culture and succession planning; metrics used in HR strategic planning

workforce planning

identifying and analyzing what an organization needs to achieve its goals, in terms of the size, type and quality of its employees

workforce rotation

the regular movement of employees from one function, time or place to another, as needed

workplace

a place, such as an office or factory, where people work

works councils

organizations that function like trade unions and represent the rights of workers. Works councils are most common in Europe and the United Kingdom.