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HR Group 2


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401(k) PLAN
Mass Production led to factories which led to lots of workers to be managed (clerical), New Deal created control & advisory role, 50s-90s led to increased legislation and behavioral studies (motivation, satisfaction, etc.), 90s took training and development, Now attempting to become a strategic partner (recruitment, retention, and performance)
Various Roles of HR
Administrative: clerical administration, personnel processing, record keeping, maintaining records, etc. Administrative responsibilities are decreasing due to HRIS systems and outsourcing. Operational/Employee Advocate Role: Operational- recruitment, selection, performance management, employee and labor relations, health and safety, etc. Employee Advocate-EEO compliance, career counseling, EAP, greivances, etc. Strategic Role: Proactive planning approach, includes workforce planning, organizational change, merger and aquisition management, performance management, etc.
Profession *Know
Defined by the Department of Labor having 5 characteristics. 1. National Organization 2. Code of Ethics 3. Research 4. Body of Knowledge 5. Expert Group that sets professional standards or practice
Functions Of Management *Know
Management= The process used to achieve organizational goals through people and resources. 1. Planning- determing goals, deciding on activities required to accomplish them 2. Organizing- Assembling resources necessary to achieve goals 3. Leading- Directing and motivating employees to achieve goals 4. Controlling- Monitoring progress, adapting when necessary
SWOT (Measures internal factors)= Strengths. Weaknesses. Opportunities. Threats. PEST (Measures external factors) (Used during scanning/planning stage)= Politics. Economics. Social. Technological.
Evovling HR Issues *Know
Movement from administrative to strategic role using metrics to document successes. Workforce Demographics: increasingly female, diverse, and older. Each brings special challenges. Occupational Shifts: Starting with a manufacting, changing to a service, and now evolving into a knowledge economy. Challenge lies in attracting and retaining valuable in demand employees and low wage disposable employees alike. Offshoring (movement of jobs to foreign countries) forces HR to deal with foreign cultures, rules, and regulations as well as ethical dilemas such as working conditions and child labor. Contracting Out: Using temporary, leased, or contracted workers can result in cost savings and reduce exposure to litigations, problems are maintaining quality and productivity. Technology Changes: increased worker availability and flexibility, rapid changes in work and skill set required resulting in need for constant retraining. Shortages: Significant shortage of workers due to retiring baby boomers, work environment outpacing skills of new workers resulting in remedial training. Mergers and Aquisitions: Often involves incompatible policies and procedures. Decentralization/Centralization: Placing additional fuctions and responsiblities at the field level, and centralizing repetitive or large scale functions at "HR Service Centers"
Managing Projects
"Project"= One time only events that have a definitive beginning and ending point. Characteristics- Specific Objectives; Funding; Start and End Date; Uses Resources
Lifestyle- Project Conception and Approval to Project Planning to Project Management and Ending with Project Evaluation. "Project Sponsor"=executive with resources to allocate "Project Champion"=Member of Project team that communicates its value. "Project Management"=Planning and Monitoring Project Activities. "Project Planning"= Determining tasks to be done and resources needed. "Statement of Work"=Broad summary of work containing objectives, schedule, resources, etc. "Work Breakdown Structure"(WBS)= Document listing tasks, timeline, and individuals assigned to tasks. (Can also contain a column for cost, this is a "costed WBS"
PERT/CPM; Gantt Charts
Program Evaluation and Review Technique (PERT)/Critical Path Method: Critical information on the order of tasks and proper flow of activities in the Work Breakdown Structure (WBS). PERT developed by the Navy, CPM by the DuPont company. Circles=nodes, lines between nodes=time to complete, dotted line="dummy path" (must be completed before project can be finalized), Critical Path= mandatory task process (ie building walls before a roof) and minimum time to complete project, "Slack/Float"= difference of time between paths (provides flexibility), Gantt Chart= Displays estimated project dates- actuals can be overlaid to compare.
Project Monitoring
Begins when actual project activities begin, includes: Tracking progress, comparing actual to predicted, making corrections, monitoring resources. "Cost/Schedule Integration"=Project Monitoring software that integrates activities and budget tracking.
Managing Organizational Change
Change is alteration of status quo. Organization change is alteration of structure, culture, or work process in response to external or internal factors. Strategic planning operates within the goal of "proactive" and "internally drvien" change vs. "reactive" or "externally driven" change.
Managing Outsource Vendors
Contracting to outside vendor to increase cost savings, productivity, expertise, and flexibility. Activities to be outsourced are: Payroll, Benefits, Recruitment, HRIS, WC, Training, EAP, 401k, Background checks, etc. Other busniess functions (marketing, sales, etc.) can be outsourced as well. Disadvantegous to outsourcing are: Concerns over job security, Shrinking of availability of skilled internal employees, and additional legal entitlements.
Outsourcing Process
Similar to any other procurement or contractual process. Steps:
1. Scan- a)Analyze current operations, b)identify potential for improvement, c) define goals
2. Various alternatives for reaching the goals are considered (if outsourcing still viable option proces continues) 3. Organization creates and issues a request for proposal (RFP) 4. Responses are evaluated in terms of RFP (cost, company rep, and company capability also considered) 5. Contractor chosen and contract negoatiated 6. Contract implemented, administered, and monitored.
-Must be evaluated periodically.
Contract Law
To remain enforceable contracts must:
-Offer must be made to do or provide something. -Must be voluntarily accepted. -Both parties must give and receive something of value. -Both parties must be legally competent to enter into a contract. -Contracts must be for legal purposes (ie not to murder). -Must be in proper form (ie in writing).
Breach of Contract (when a party fails to live up to the agreement): Courts can get invloved and order the violator to- 1. Live up to their side of agreement 2. Pay damages 3. Be released from all obligations under the contract.
HR and Technology
Strategic HR- HR professionals are freed from burdensome tasks and able to focus on strategy.
Decision Making- Metrics retained and tracked can assist in predicting or referencing.
Employee Self Service- Increased employee access to computers has reduced paper, allowed quick processing, eliminated wastful tasks, and provided information.
Productivity- Eases repetative tasks, electronic signatures, allows field managers to make changes with oversight.
Systems Security: Additional costs of tech. are potential lapses of security, employee privacy, etc. and the costs associated with protecting them.
Outsourcing: To increase efficiency and effectiveness of some programs.
Human Resource Informatin Systems (HRIS)/Human Resource Management Systems (HRMS)= Computer application that collects, processes, stores, and analyzes HR data. Integrations: Other systems (ie benefits, payroll, etc.), Recruitment, Evaluations, EEO, Turnover, Promotions, Etc. Disadvantegous are: Very high costs in implementation, initial training, and upkeep. Difficulty in training. Problems adapting to new system.
Technology Terms:
Data Warehouse; ASP; Electronic Signatures; Web Portal; Mobile/Wireless Nets; Synch Systems; Service Center; Streaming Video
Data Warehouse- Large database; ASP- (Application SErvice Provider) Hosts and Manages Software; Electronic Signatures-Permits Authroization without physical prescence; Web Portals- Allows Access from a personal computer; Mobile Net- Allows access to systems without cable; Synchronization Systems- Allows cell phones, PDAs, and PCs to communicate with each other and access web portals; Service Center- Place where HR processing is centralized; Streaming Video-Allows employee training and development to be sent directly to the employee.
Strategic Planning Process
Process of making decisions re. long term goals/strategies planning to match capabilities to the environment. Process(generalized, can be different)-Strategy Formulation, Development of strategic objectives, strategy implementation, strategy eval.
Strategy Formulation and Development of Strategic Objectives in the Strategic Planning Process
Strategy Formulation- Answer two basic questions: 1) What is the organizations purpose now? 2) Is that purpose viable in the future? Answers will lead to development of: "vission statement"=an emotional appeal that describes the organizations desired future state. "Mission Statement"= Describes the fundamental purpose of the organization in its current status. "Values Statement"= Vasic beliefs of the organization.
Development of Strategic Objectives: Vission, mission, and values into goals using SWOT and PEST analysis. Strengths and Weaknesses are found internally, Threats and Opportunities are found externally.
Strategic Objectives
Long term (3-5 years) goals that represent the best match of strengths against opportunities in the environment. Organization must minimize or eliminate internal weaknesses and avoid external threats. "Strategy"= Course of action providing direction and guidance, for actions and decision making toward acheivement of objectives. "Functional Strategic Plan"= Individual departments (finance, marketing, etc.) strategic plans, must remain in line with organizational vissions, missions, and values.
Strategy Implementation and Evaluation *Know
Implementation- Process by which strategic objectives are achieved. Short term in nature. Involves activities such as creating action plans, committing resources, and directing employees. Execution is the key to success.
Evaluation- Process of determing progress toward achievement of the strategy objectives and taking action. Use measurment of organiztional performance in relasionship to strategic objectives. Traditionally "Single loop" learning" is used (measure performance against milestones, make midcourse corrections), this often results in escalation of commitment. Better to use "double loop learning" and evaluate not only progess toward objectives, but the objectives themselves.
Advantages and Disadvantages of Strategic Planning
Advantages- Can provide a forceful message re. where the organization is heading, priorities, and values throughout the organization providing guidance. Often contribute to customer loyalty, ease of recruitment, employee retention, and access to resources. Research reveals a positive correlation between the qualityof planning and organiztional success.
Disadvantages- A process not a project. Can create rigidity if not flexible, tends to rely too heavily on assumptions, some environments may be too turbulent and that strategic planning is a waste of effort.
HR Strategic Planning *Know how HR Strategic plan aligns with Organizational Strategic Plan
Virtually the same as overall strategic planning process. Begins with HR's own vision, mission, and values statements. a SWOT analysis is performed, leading to development of strategic objectives. Strategies to acheive objectives are developed using specific programmatic activities. Progress is monitored and corrections made as necessary. Two levels of evaluation= Extent of accomplishment of HR objectives, and Effect of the HR strategy and planning process on organizational goals. This process is second tier in nature, it is reactive and does not include HR as a stratetic partner.
Environmental Scanning
Process of collecting and interpreting information to determine conditions, trends, and changes in the environment that might contain oppurtunities and threats in the environment. Integral to the SWOT analysis.
Components of the Environment *Know
Affect the Development of HR strategy. Political/Legal- HR must know and attempt to anticipate even try to influence changes in the law or politics by instituting legal proceedings, defending itself in court, or filing of "amicus curiae" (friend of the court) briefs.
Global- Importation of low cost products, low-cost labor, changes in power and legislation, international integration, and trade arrangments.
Economic- Overall economic conditions and interest rates affect availability of resources, influence availability and cost of labor, and inflation. Imporant Economic Statistics: Unemployment Rate= General indicator of the availablity of labor, high unemployment is good because there are employees available for low wages, this means only the unemployment rate in the area the organization is opperating in is important. Consumer Price Index (CPI)= Used to measure inflation. Gross Domestic Product (GDP)= Total value of good and services produced by a country in a given year. Increases indicate the economy is growing.
Social- Societal expectations as to the responsibilities of the organization, issues such as fair treatment of employees, business ethics, corporate responsibility, and environmental responsiblity.
Competitive- Strategies that competitors are following, being able to adjust to changes in the competition is called "competitive intelligence"
Demographic- Forecast the availability of workers and their skill levels. Monitor changes in age, ethnicity, and/or gender.
Technology- Facilitates global operations, outsourcing, and increased productivity, requires skills, affecting recruitment and training.
Environmental Scanning Process
Can vary in sophistication from simplistic (talking to customers, supplers, competitors, and reading the paper) to very sophisticated (devoting resources, having a separate deparment devoted to the process, hiring a consulting firm). Common other sources of information are: Suppliers, Employees, Media, Internet, Professional Organizations, Internal Data, Tradeshows, Governmental Reports.
Environmental Scanning Outcomes *Know
Data is first analyzed, and then turned into a format that can be used in strategic planning:
Forecasts- Predictions to how a particular measure will change in the future, often developed from historical data and analysis of trends, only accurate to the extent that environmental factors stay stable. Includes revenue, sales, profit, staffing, benefit costs, skills needed, tech changes, etc.
Competitive Intelligence- Provides information on who the organization's current and potential competitiors are, what strategies they are currently pursuing, and how the organization will be affected.
Scenario- Good general description of what the future is likely to be, developing scenarios of various views of the future. Facilitates development of strategic plans, and development of contingency plans.
Benchmarking- Comparing the organizations operations against those of other organizations. Environmental scans might reveal best practices that are a source of competitive advantage.
Gain an Understanding of Organizations
To operate at strategic levels HR must be able to partner with other parts of the organization, and understand how various designs support various strategies. All functions provide a service or product and must manage their operations, All need some sort of accounting function to manage resources, All need to gain access to resources either through sales and marketing or R&D, and operations are becoming increasingly dependent on IT functions.
Operations Management
Evolved from "Production Management" recently. Defined as= Planning and analysis of those activities by which the organization transforms its inputs to outputs, (can be a product, service, or knowledge, sometimes all three). Includes production scheduling, quality control, purchasing, and inventory/supply, facility location, layout, and design for efficiency, Designing internal processes, continuous improvement of quality management, certification by the International Organization for Standardization, Using technology to incorporate the efficiencies of mass production, and Lean Manufacturing- Eliminating unecessary steps, minimizing inventory, engaging in just-in-time production and supply, and using teams or cells.
Financial Management
Activities designed to account for and control the organizations resources, includes accounting and budgeting.
Fundatmental Accounting Equation.
Balance Sheet.
Income Statement.
Statement of Cash Flows.
FAE: Basis for balance sheet, Assets=Liabilities+Owner's Equity, Assets are economic resources owned, fixed assets are permanent and take time to turn into cash, accounts receivable and cash are "current assets". Liabilities are financial obligations, obligations due in a year or less are current liabilities, long-term liabilities are those over 1 year. Owners equity is the difference between the assetts and liabilities, if own by stockholders it will be "stockholder's equity", if owned by partners "partner's equity"
Balance Sheet: Financial statement that reports the organizations financial condition at a certain date.
Income Statement: Shows profit/loss for a period of time, usually a fiscal quarter or year. Summarizes all revenue in and expenses out, showing the net result. Uses "Gross Margin"=Revenue-Cost of goods sold (or made); "Net Income Before Taxes"=Gross Margin-Operating Expenses; "Net Income After Taxes"=Net Income Before Taxes-Taxes
Statement of Cash Flows: Reports all cash receipts and disbursements during a set period, can show a profit but have insufficient funds to pay regular bills.
Financil Ratios
Statistical measures used to evaluate the financial performance of the organization, common ratios are business activity, profitabilty, debt and liquidity. Often the absolute value of the ratio is not important,but how it compares with the industry average.
Business Activity Ratios- Measure the organizations efficiency in using its assets. Exp. Inventory Turnover Ratio=Cost of Goods Sold/Average Inventory.
Profitability Ratios-Measure effectiveness turning resources into profits, common are earnings per share, return on sales, and Return on Equity=Net Income After Taxes/Owner's Equity.
Debt Ratios- Also called "Leverage Ratios", measure extent organization relies on borrowed money Exp. Debt of Owner's Equity=Total Liabilities/Owner's Equity (Above 1 indicates more debt than equity).
Liquidity Ratios: Measures how quickly organization turns assets into cash, evaluate the capability of the organization to pay short term debts, includes; "Current Ratio"= evaluates current assets in relations to current liabilities, higher ratios are more credit worthy, Exp. Current Ratio=Current Assets/Current Liabilities. "Acid Test Ratio"= Measures ability to pay short term debts but takes current inventory out of the calculation. Exp. Acid-Test Ratio=(Cash+marketable securities+receivables)/Current Liabilities.
Budgeting *Know types
The process of creating financial control devices that estimate revenues and allocating them for specific purposes. Types include: Incremental Budgeting- traditional budget, uses previous budget as a base or reference, adjusts individual items up or down, assumes (possibly wrongly) all line items are valid. Formula Budgeting- Specific increase or decrease is applied to previous budget, assumption is all items are valid. Zero-Based Budgeting- Develops entire budget from scratch, each item much be justified for value, very time consuming. Activity-Based Budgeting- Allocates funds to processes or projects, better links resources to goals but becomes cumbersome when allocating overhead costs shared by all.
All budgets can be developed bottom-up (all levels develop resource estimates which are all aggragated into a budget, tends to develop better commitment to executing the budtet), or top-down (top management develops and executes budget, quicker possibly more realistic process but often management is not aware of what lower levels may need).
Sales and Marketing
"Marketing"=Process of developing, pricing, promoting, and distributing projects, services, and knowledge. Involves identification of customer needs and wants. "Sales"= Promotion component of marketing. "Marketing Concept"= The organization should attempt to solve customer needs while meeting goals. "Martketing Segment"= Targeted customers, marketing mixes (combination of 4 Ps) must be customized to each segment. Four Ps of marketing- Product (good service or idea, must serve a perceived need or want, includes: development, determination of profit potential, testing, differentiation, packacking, etc.) Place (When, where, and how, selecting the correct channel and distribution network.) Promotion (informs potential customers, increase awarness, control public image, includes advertising, pr, personal selling, and promotion.) Pricing (desicions regarding product price in relasionship to goals, analyses of the relasionship among market demand, price, and profitability and a determination of the method of setting product price.)
Organizational Design and Lifecycle
Organizational Design is the process of determining the appropriate organizational structure
All organizations follow a general lifecycle, they can keep from dying out by renewing themselves with a change of mission, product, or service. 1. Introduction- Simple and flat, few policies and centered on growing, low overall cash flow, compensation is averaged with equity options. 2. Growth- Expansion, objectives and incentive plans center around efficiency. 3. Maturity- Maximum size, revenue at max but profitability possibly declining due to hierarchy and competition, overly bureaucratic, entitlement pay philosophy, incentives focused around savings. 4. Decline- No longer competitive, rigid departmentalization, fixed compensation, if unable to turn around organization will shrink and fail.
Organizational Structure
6 Elements. Job Specialization- Also referred to as "division of labor", more tasks are separated the more specialization, simplified jobs do tend to lead to job dissatisfaction. Formalization- Extent to which jobs are standardized, employee discretion kept to a minimum, facilitates centralization but limits flexibility, prevents the org. from adapting. Departmentation- Also referred to as "departmentalization" is the framework by which jobs are grouped, types are function, division, and matrix. Chain of Command- arrangment of authority, "authority" is the right to give orders and expect to have them carried out, "principle of unity of command" means each employee only reports to one person, use of teams negates need for direct control, IT helps this. Span of Control- refers to # of employees a manager directs, asks the ? "how many employees can one manager manage?", trend toward wider span of control, narrow spans of control result in taller org. structures- effective, wider spans of control cost less but might result in lack of direction- efficient. Centralization- decisions made at highest level, todays organizations are increasingly decentralized.
3 types: Function- Departmentation by functions most performed and traditional way of grouping jobs, ie HR, Finance, Marketing, etc., high potential for efficiency, specialist positions are possible, tends to create loyalty to function instead of org. Division- Several ways (product- ie by product line, process- ie by type of work or people doing the work, geography, customer, etc.), creates accountability to goals, encourages communication, often creates duplication of activities. Matrix- Combination of departmentation by function and by division, employees have two supervisors, facilitates development of expertise, can create confusion and violate the unity of command.
Chain of Command
CoC- Hierarchical arrangement of authority. Authority is the right of superiors to give orders and expect those orders to be carried out. The principle of unity of command states that each employee has only one person to whom they report. technology has eliminated some of the needs for a CoC, empowerment and increased use of teams has eliminated some of the need for supervisors.
Span of Control
Refers to the number of employees a manager directs. This number can fluctuate based on the capabilities of the manager and employees, complexity, and technology available. Because of the increasing need to create flattened organic organizations spans of control continue to get wider (fewer managers more employees). There is a direct correlation between levels of hierarchy in an organization and span of control, narrow spans result in taller organizational structures requiring more managers, this control costs more but provides more supervision. Wider spans of control costs less but may not provide enough direction. It is also a matter of effectivness (narrow) vs. efficiency (wider)
In centralized organizations decisions are concentrated at the very highest levels. In decentralized organizations employees at lower levels are empowered to make decisions. Todays organizations are increasingly decentralized.
Types of Organizational Models
Simple Structure; Bureaucracy; Virtual Organization; Boundaryless Organization; Mechanistic Organization; Organic Organization; and Concentrated Structures
Simple Structure Organization
Characteristic of small organizations or any organization at the introductory phase of their lifecycle. Not departmentalized, spans of control are wide, chain of command is simplistic, formalization is virtually nonexistent, job responsibilities are fluid, structure is flat and efficient. Quickly becomes dysfunctional as organization grows. CoC slows down decision making, does not facilitate employee growth, and success or failure rests on the founder.
Characteristic of many organizations including governmental entities. High degree of job specialization, highly formalized policies and procedures, centralized, departmentation, small spans of control and multiple level hierarchies (pyramidal type). Very efficient at producing products or providing services when the work is repetitive and the environment is stable, they also develop high levels of expert knowledge in narrow areas. Significant economies of scale and formalization permit bureaucracies to perform well with less talented and expensive management. Often efficient only in stable environments, centralization slows down decision making, bureaucracies don't deal well in unique situations, and rigid functionalization limits cross-functional cooperation.
Virtual Organization
Every function possible is subcontracted out. Can be created or disbanded easily, highly flexible and adaptive, and may contain high levels of expertise. The negatives to subcontracting are that managerial control is lost, and there is a lack of commitment or shared goals.
Boundaryless Organizations
Basically a concept that defines how large organizations can become adaptive and organic by removing boundaries (vertical hierarchial, horizontal functional, and external suppliers and customers). Will likely never become a complete reality. Great IT is a must to enable communications and cross functional, cross hierarchial teams that can function well.
Mechanistic Organization
Rigid and highly stuctured, fall at one end of the continuum with organic structures falling on the other. Characterized by high formalization, high job specialization, centralized decisionmaking, narrow spans of contorl, and a high degree of departmentalization. Way an organization operates than the way its designed. All organizations must function a bit mechanistically to get any work done.
Organic Organizations
Highly adaptive and interact with their environment. Often composed of cross functional teams with decentralized decision making. Very informal chanin of command, with its ability to change rapidly it can fall into chaos. Exps are virtual and boundaryless organizations.
Concentrated Structures
Organizational substructures created to make mechanistic organizations more organic. Sometimes called "skunkworks", project teams and committees are examples. The products of concentrated structures (creativty and innovation) are created outside of the organization free of the rules and culture, and then funneled into the organization.
Organizational Strategy:
Innovation or Differentiation
Cost Minimization or Cost Leadership
Must support the organizations strategic plan. 3 common types: 1. Innovation or differentiation involves being the first to market with new products or services, organizations must be very organic (adaptive, low formalization, decentralized, flat hierarchy, low job specialization, etc.) 2. Cost Minimization or Cost leadership strategies require efficient organizations, need to be mechanized (centralization, formalization, functional departmentation, etc.) 3. Imitation strategy is in the middle of the continuum and a combination of the first two.
Effectivenesss and Efficiency
Effectiveness- extent to which goals are met
Efficiency- ratio of inputs to outputs and cost per unit, possible to be either one, none, or both.
HR Audit
Evaluates the current effectiveness and eficiency of the HR function and makes recommendations. Covers: Payroll (accuracy, timeliness), compensation (strategy, equity, etc.), regulatory compliance, performance against stated goals, mandatory benefits (compliance), voluntary benefits (employee needs, effectiveness, etc.), Employee and labor relations (contract compliance, employee discipline, etc.), employee communications (handbook, policies), IT (HRIS), Training and development (orientation, mentoring), Health and safety (compliance, proactive planning), recruitment and selection (capability to meet needs). Can be done internally or contracted. Once done goals are established and ways to reach those goals are laid out.
Balanced Scorecard & HR Scorecard
HR scorecards are just balanced scorecards soley for the HR department. Process for translating strategic goals into operational plans and metrics. Because relying soley on financial metrics forced organizations to only review past details instead of current performance measures and place too much emphasis on short-term performance to the detriment of long-term planning, the balanced scorecard balances current performance by including additionals measures: financial (market share, cash flow, profitability, etc.), customers (share of the wallet, retention, new customer aquisition, etc.), Internal Business Processes (innovation, quality, cycle time, etc.), and Learning and Growth (employee satisfaction, productivity, skill levels, etc.). Proponents believe it aligns organizational activites to the strategic plan, increases employee knowledge of and commitment to organizational goals, provides performance feedback, and solidly links objectives with organizational performance.
Types Of OSHA Citations, Definitions, Associated Penalties, And The Appeal Process
Inspectors have the authority to issue citations and recommend penalties, in extreme cases where there is immediate danger the inspector can seek an injunction to prevent the employer from operating. There are additional criminal penalties for knowingly providing false information to OSHA or divulging the fact that OSHA is visiting a worksite.
Willful- The employer intentionally and knowingly violates a standard; $5,000-$70,000; Willful violations that result in the death of an employee could also result in criminal prosecution resulting in fines of up to $10,000 and imprisonment up to six months. Fines and imprisonment terms are doubled for repeat offenders.
Serious- Violation of a standard where there is substantial probability that death or serious injury could result and that the employer knew or should have known that the hazard existed; Up to $7,000.
Repeat- Continued violation of a standard upon OSHA reinspection; up to $70,000.
Failure To Abate- The employer fails to correct a violation found in an inspection; Up to $7,000 per day beyond the prescribed abatement period.
Other- Violation that is not likely to cause death or serious harm; Up to $7,000.
The closing conference is the first chance for the employer to negotiate the penalties, if a resolution is not reached the appeal process will begin. If at a state level the next step is the a higher level state official. For federal an appeal must be made to the area director within 15 days of the inspection. If not reached here it can be appealed to OSHRC which will assign an Administrative Law Judge (ALJ) to make a desicion, this desicion can be appealed through the federal court system.
OSHA Inspection Process
1. An OSHA or state officer shows up at the place of business. At this time the inspector will display appropriate credentials and request to speak with the owner or manager.
2. An opening conference is held in which the inspector explains the purpose of the inspection, how it will proceed, and gives an overview of the standards that are likely to apply. If the inspector is likely to become aware of trade secrets or proprietary information during the inspection the issue of protection is discussed.
3. The inspection in conducted with the employer and the employee representative accompanying the inspector (including: physical inspection, check of OSHA records, check for mandatory posters, review of safety program)
4. A closing conference is held in which the employer and employee rep. are presented with the results of the inspection.
-Employers are protected from warrant-less inspections and can require OSHA to get a judicial warrant to proceed.
OSHA Inspection Priorities
Occupational Safety and Health Act permits OSHA to enter and inspect the workplace to determine compliance with standards. This must occur during normal working hours and both the employer and an employee rep are permitted to accompany the inspector. Reasons for inspections by priority: Highest priority- Conditions that cause imminent danger of injury or death to employees.
Second Priority- After a serious incident involving death or serious injury
Third Priority- Result of employee complaints
Fourth Priority- Targeted OSHA program inspections, might involve industries with high incident rates, dangerous jobs, or special emphasis programs where OSHA believes there is noncompliance and wants to send a message.
Final Priority- Reinspections and random inspections, majority occur in high-hazard industries.
Components Of An Ergonomic Program
OSHA issued an ergonomic standard in 2000 but it was repealed by congress, because of this it is important for employers to develop their own ergonomic programs:
-Upper management commitment
-Development of formal program and/or policy
-Ergonomic analysis of job tasks and worksite environment
-Job design and redesign to minimize muscle stress, strain, and fatigue and to improve worksite environment
-Training of employees in proper performance of ergonomically designed tasks
-Medical monitoring and intervention of employees affected by cumulative trauma disorders (CTDs)
-Follow up and analysis of program results, and modification of the program where necessary.
Common OSHA Standards
Control of Hazardous Energy- Usually referred to as "lockout" or "tagout". Purpose is to prevent accidental operation of equipment during maintanence. "Lockout" means to physically impede the inadvertent operation (ie cap over on/off switch) "tagout" means attaching a tag to the device warning employees not to operate it.
Hazard Communication- Commonly referred to as the "Employee right to know standard". Requires manufacturers and users of hazardous chemicals label those products and provide information regarding the substances in "material safety data sheets" (MSDSs). These contain information as to the nature of hazard the substance is composed of and what the appropriate treatment is for those who come in contact. Must be readily available to employees, but actions can not be taken to move employees against their will out of positions that may be harmful to an individual or fetus.
Personal Protective Equipment- Require that the employer analyze the hazards associated with a job and provide appropriate equipment to prevent injury or illness (ie hard hats, safety glasses, breathing masks, and steel-toed shoes.)
Bloodborne Pathogens- Designed to protect employees who are regularly in contact with blood and bodily fluids or subject to needle sticks from contracting bloodborne diseases such as HIV or hepatitis. Require training as to how to avoid exposure and the proper response should exposure occur.
Others- Forklift Operation, Confined Space, Emergency Exit, Noise Exposure, Machine Guarding.
Basic Health Safety And Security Laws
Same federal law covers both Health (broader term and refers to the employee's overall physical well-being, injuries both physical and psychological) Safety (the prevention of injury due to working conditions, processes, and procedures) and Security (Separate yet allied, deals with the protection of physical, human, and intellectual assests from harm). Workers Compensation Act and Occupational Safety and Health Act are the two laws that have the most impact.
-Fair Labor and Standards Act limits the types of jobs that can be performed and the number of hours that can be worked by those under 18.
Occupational Safety and Health Act- Covers virtually all private employers except for those that are covered by a different act. Does not cover Local, State, or Federal Employees. Allows states to set up their own agencies to manage health and safety. Establishes the Occupational Safety And Health Administration (OSHA), Establishes the National Institute of Occupational Safety and Health (NIOSH). Establishes the Occupational Safety and Health Review Commission (OSHRC). Require employers to comply with OSHA. Requires employers with 10 or more employees to keep safety records. Requires employees to comply with health and safety standards, but does not provide penalties. Requires employers to put up posters notifying employees of their rights under the act. Prohibits employers from retaliating against employees for exercising their rights under the act. Permits OSHA to inspect worksites and issues citations. Permits states to operate their own plans.
NIOSH, OSHRC, And Which Employers Are Covered By OSHA
National Institute of Occupational Safety And Health- Researches safety and health issues in the workplace and to assist OSHA in developing standards.
The Occupational Safety and Health Review Commission (OSHRC)- Adjudicates challenges challenges to OSHA enforcement activities.
Virtually all private employers with over 10 employees are covered OSHA exept those already covered by another act (ie miners), Local State and Federal employees are also not covered although each state has the option to set up their own agency to manage safety and health, and federal employees are covered by an executive order.
Basic Responsiblites Of The Occupational Safety And Health Administration
Has the authority to set and enforce safety standards, inspect work sites, and issue penalties. Has the responsibility under the Occupational Safety and Health ACt to develop and issue health and safety standards. These standards become obligatory once issued, must not only be implemented but also communicated to employees and training provided. Proposed or amended standards are published in the federal register for review and comment, hearings can be held if requested. This standard may still be appealed within 60 days of issuance.
Workers Compensation Act
No-Fault Provisions
Benefits Provided
Benefit Funding
Compensates employees for physical or mental on the job injuries. In some states employer may be required to carry state workers compensation insurance, in others they can self-insure and get it through a private carrier. There are limitations to the benefits, so it may be necessary for the employee to absorb loss of income not covered. Compensation usually covers: Medical treatments required, survivor benefits, rehab expenses, permanent or partial disability income loss payments, lump sum payment for permanent partial disability. Premiums are determined by the firm's prior claim rates. Workers compensation is no-fault, except in extreme cases the employee's only recourse is through the WC program. The employee may only sue if the employer was grossly negligent, if the accident was due to the employee or a co-workers negligence they are not able.
OSHA General Duty Clause
Because of the impossibility of identifying all tasks and process, the general duty clause provides a standard in those instances when another specific standard does not apply. Obligates employer to provide a workplace that is free from recognized hazards that might cause death, serious injury, or illness.
Union Avoidance Strategies
Run along a continuum from agressive supression to benevolent substitution. Might involve consistent anti-union rhetoric even though no union organization is underway. Actively moving plants to right-to-work states, or areas with low union support. Attempting to make the union irrelevant by providing better treatment, compensation, etc. The strategy chosen must be ethically sound and match the organizations objectives.
The national labor relations board ruled that certain types of programs created a labor organization (union) as defined by the national labor relations act. The outcome of the act was that an employer can violate the NLRAs prohibition against domination of a labor organization by creating and dealing with employee committtees, task forces, etc. Specifics for maintaining compliance are: Programs that deal with issues such as productivity and quality as opposed to wages, hours, and other terms and conditions of employment; Programs in which there is little management intervention are usually permissible. Independant authrity usually makes them permissible; Programs in which it is clear that the employee group is merely making suggestions or providing information. This was important because it increasingly affects employers ability to manage in a flexible manner.
Total Quality Management (TQM), Cell Manufacturing and Self-Directed Work Teams
TQM is a program to improve quality through continuous improvement linked to organizational goals. In "Lean Manufacturing/ Production" cells or teams are responsible for manufacturing all or most of the product, this is done to eliminate unecessary steps in the process.
Self-Directed Work Teams incorporate the concepts of employee involvment and high performance work systems. Teams are essentially self-managed and have authroity to make most work decisions on their own. including work design and assignments, quality and production, etc. Also called "Self Managed" or "Self-Designing Teams".
Progressive Discipline
The application of increasingly severe penalties for rule violations in an attempt to encourage good behavior. There is nothing that precludes severe punishment including termination on a first instance. Four step process: 1. verbal warning, 2. written warning, 3. Suspension, 4. Termination. Typically there is some sort of forgiveness for extended periods of good conduct. The second concept is that of similar behavior, an employee on the third step of the process for absenteeism would not be terminated for a policy violation.
Positive Discipline
Sometimes called nonpunative discipline, and is a problem solving approach for correcting behavior. Four step process: 1. Verbal agreement of a resolution with a supervisor, 2. Employee agrees in writing to correct the problem, 3. "Decision Day Off", employee is suspended for a day to decide what course they want to take for the furture, 4. Termination.
Failure To Discipline
Typical reasons are:
-Managers do not like the adversity and confrontation.
-Managers fear the possibility of violence.
-Manager has risen from the ranks performing the same behavior without being penalized
-There is no clear supervisor-supervisee relasionship.
-Managers feel they will look silly whne the discipline is overturned by an upper level manager.
Exception To The Employment-At-Will Doctrine
-Employment law of the federal, state, or local government
-Employment contracts
-Implied Contracts
-When an employer document implies some benefit or right even though the intent is not to do so. For example just cause terminations.
-When an agent of the employer promises some benefit or right, that might be an implied contract.
-Public Policy, an employee can not be fired for refusing to break a law or going along with an investigation.
-Good Faith And Fair Dealing, a less frequently accepted exception, involves failure to treat the employee fairly orto provide some benefit.
Unfair Labor Practice Process
Cease And Desist Orders
Appeal And Enforcement Of Cease And Desist Orders
Unfair Labor Practice Process Consists Of: 1. Initiation (Filing a charge with NLRBs regional director), 2. Investigation (Merit is determined, determination can be appealed to Ofiice of General Counsel, Dismissal at that stage can not be appealed. Ongoing dispute resolution discussions can between the two parties during the investigation process, the charge may be withdrawn or settled at any point up to a final board action. If merit is decided a hearing will be scheduled), 3. Hearing (Before an Administrative Law Judge (ALJ), NLRB general counsel will present evidence that ULP occured. the ALJ will issue a report either recommending dismissal or an order to cease and desist. If either party appeals to the boad the board will make the final decision) 4. Cease And Desist Order (Requires the respondent to immediately stop the illegal activity. The board can enact many remedies but can not enact punitive damages or fines. Possible penalties are a return to work or promotion and back pay, order to recognize a union, etc. The order will normally be required to be posted throughout the workplace.) 5. Appeal/Enforcement (Either party can appeal the final board decision tothe federal appeals court, their decision can be appealed to supreme court, if the respondent fails to honor the order the board may request enforcement by a federal appeals court.
Protected Activity Strikes And Permanently Replacing Striking Employees
"Recognition Strike"-Rarely used, used to get the employer to recognize and bargain with the union. Protected Activity, Employee Can be permanently replaced.
"Economic Strike"-Done during contract negotiations to place additional economic pressure on the employer to agree to union proposed language. Activity is protected, Employee Can be permanently replaced.
"Unfair Labor Practice Strike"-Protests the alleged unfair labor practice of an employer, the ativity is Protected, and the employee Cannot be permanently replaced.
"Jurisdictional Strike"-To force the employer to assign work to bargaining unit employees as opposed to some other work group, is Not a protected activity, It is an unfair labor practice to engage in this type of strike and strikers can be terminated.
"Wildcat Strike"-Dispute while a labor agreement is in effect, often without the approval or knowledge of the union. Strike over a greivance. Technically a protected activity, however most labor agreements include a union no-strike clause in exchange for a grievance procedure and binding arbitration. In these cases the strike is not protected and the striking employee may be terminated.
"Sympathy Strike"-Strike in support of other striking unions, refusal to cross a picket line is considered a sympathy strike, Protected, but the employee Can be permanently replaced. Unprotected if the labor contract contains a no-strike clause.
Impact Of Unionization
Paradox Of Improved Retention And Decreased Job Satisfaction
Impact- Almost always comes with higher labor costs, 10% as a conservative estimate just in wages, plus union employees usually get health insurance, retirement, etc. Restriction of management rights in issues such as discipline. Collective bargaining does not engender long term relationships. Unions may affect productivity, especially with work assignment rules, in general unionized firms tend to be less profitable.
"Paradox And Decreased Job Satisfaction"- Studies reveal that unionized employees experience relatively low job satisfaction but relatively high retention. One explanation is that the low job satisfaction is related to better knowledge regarding the problems in the workplace combined with restrictive rules that affect the employee as well as the employer. High retention can be explained by the differential in benefits and wages experienced by the unionized worker. In a few instances the presence of a union allows the employer to provide better benefits at the same or lower cost. Contracts provide some consistency and a guide for management actions, employee retention is improved.
Why Employees Vote For Unions
Short Answer- Employees believe that unions will provide them better working conditions.
If current practices and management are not meeting employee needs or exhibiting bad management they may seek better working environments, employees might feel alienated from the workplace because of lack of involvement in decisions affecting their work, high productivity standards, lack of job security, etc. And social, the union facilitates social relationships among its constituency and a sense of belonging.
Rights Arbitration
Arbitrator Selection
Just Cause Determinations
Limited Appeal Rights
Arbitration- two types, 1. interest arbitration (two types "conventional" and "final offer", neutral third party makes binding decisions re. what to include in a contract) 2. Interest Arbitration (Used to resolve grievances). Arbitrators found in the American Arbitration Association (AAA) or the Federal Mediation and Conciliation Service (FMCS). Arbitration panel (usually composed of three arbitrators one picked by management, one picked by the union, and one jointly), Permanent arbitrators can be helpful because overtime they may become very familiar with the contract. Can be chosen as needed, benefit is the arbitrator may have different specialties.
"Just Cause"- Arbitrator must decide whether action taken was for "just cause", meaning there was sufficient justification for taking the actions. No specific guidelines and determined on a case by case basis. Seven part test commonly used in the evaluation process: 1. Employee was warned about the possibility of discipline, 2. Conduct leading to discipline is job related, 3. Employer conducted an investigation, 4. Investigation was fair, 5. Investigation indicated employee was guilty, 6. Penalty was consistent with past practice, 7. Penalty was appropriate for the severity of the conduct. A written decision will be given to both parties.
"Appeal and Enforcement"- Courts will defer to the arbitrators decision and overturn it only very rarely, if any party refuses to implement the courts will enforce.
Typical Grievance Process
Both management and labor have the right to use the process, though management rarely does so.
1. Union or employee has to initiate complaint within a certain time period after they become aware of the violation. May either be required to be written or verbal, normally filed with first-level supervisor, who has a prescribed number of days to meet with the grieving party to discuss the issue. After that a certain number of days to either deny or grant relief, if resolution is acceptable the grievance is settled. If not acceptable it can be appealed.
2. Same as step one but involves higher levels of leadership of both such as directors the union and management, again time limits apply and appeals can be made.
3. Same process but at even hire levels, usually corporate. If resolution is not acceptable parties can go to binding resolution, time limits apply.
4. Aribration is conducted by a third party for a binding decision.
Typical Clauses In A Labor Agreement
Union Security-protects interests of the union. prevelant ones are: closed shop (requires employee to be a union member before being hired, outlawed by taft-hartley act still exists in a few industries). Union Shop (Bargaining unit must join the union after a specified period of time, usually 30 days, and must remain a member. "Beck" decision modified provisions so that employees do not have to join the union but must pay the portion of the dues attributable to union costs of negotiations, contract administrations, etc. Illegal in right-to-work states, and "beck" makes effective only as an "agency shop". Remains beneficial because employees must excercise "beck" rights.
Agency Shop (Employees are not required to join union but must pay dues, illegal in right-to-work states). Maintenance Of Membership (used infrequently, requires that employees can only leave the union when labor contract is in place during small open enrollment periods). Open Shop (Employee need not join the union nor pay union dues, only possible security provision in right-to-work states and the federal government). Dues Checkoff (employer must collect union dues and give them to union).
Management Rights Clause- Management reserves the right to manage as they see fit, can be general or very specific.
No Strike Clause- Union agrees not to strike, usually comes with strong greivance procedure.
Union Representative/Employer Provided Items- Contract may indicate funds and employers may need to dedicate to the union, and ameneties the union may be provided.
No Lockout Clause-Employer agrees not to lock out employees, usually comes with a no strike clause.
Discipline And Discharge- Limits managements rights to discipline for instances involving cause or just cause
Grievance Procedure- formal process used to resolve disagreements.
Wages, Hours, Etc.- Meat of the agreement, very detailed.
Seniority- Defined by employees length of service, used as a factor in promotions, increases, etc. can result in "bumping" which allows seniority to be used during a layoff.
Third-Party Impasse-Resolution Methods
Obligation of two bargaining parties is to bargain to "impasse", no specifically defined in the law but occurs when it is clear that future bargaining will not result in agreement, resolution attempts can include: Mediation (proces by which a third party assists the parties in reaching a decision, but can not usually impose a settlement, generally voluntary). Interest Arbitration (Process by which a neutral third party imposes a binding decision, two types "Conventional" which allows the arbitrator to reach decisions as they choose, and "final offer" in which the labor is forced to either choose one side or the other and cannot amend the provisions. Can be "total package" or issue-by-issue" when it comes to contracts which forces it to be accepted in its totality or item by item. Rarely used in private sector). Med-Arb (Combination of the two, if arbitration attempts fail the third party switches to mediation and makes a binding decision, used infrequently in the private sector anyway, also because it is difficult to find an individual trained in both and many companies don't want to tell an arbitrator something that can be used against them in mediation). Fact-Finding- a designated fact finder or group conducts an investigation and issues a report with recommendations, more prevelant in public sector). Legislative Intervention/Governmental Seizure- Relatively rare, possible that congress or state leglislative bodies may resolve the dispute, Seizure of plants or entire industries can be done by the president but happens only rarely in times of war.
Employer Tactics In Bargaining
Lockout- Opposite of a strike, employer prohibtis workers from working to put on economic pressure, legal unless it looks like its being done to kill the union, workers can not be permanently replaced, only temporarily.
Strike Replacements- Using nonbargaining employees or hiring replacements, employees must be notified at hire if they are temporarily or permanent, workers not reinstated are put on a priority hiring list.
Strike Insurance- Private insurance to offest losses during a strike.
Strike Preparations- Stockpiling inventory, moving production, etc. are ways that the employer can negate potential impact of a strike.
Union Tactics In Bargaining
Economic Strike- Employee initiated work stoppage, rarely happen anymore.
Unfair Labor Practice Strike- Permanent strike replacements are not permitted, union must be able to prove ULP.
Strike Benefits- Funds set aside to offset loss of income or unemployment.
Work Slowdowns- Employee initiated slowdowns of productivity, can include using a lot of sickness, filing a lot of grievances, etc. Discipline can still be used if in accordance with organizational P&Ps
Corporate Campaigns- Exert external pressure on the employer, ie file complaints with organizations (EEOC, OSHA, etc.), investors, etc.
Picketing/Boycotts- Lawful but heavily regulated, picketing/boycotting of a neutral third party is not legal (ie financier of employer), a nonunion subsidiary of the employer can be picketed ("Double Breasting"), When multiple companies are at the same location only the employer and no neutral third parties can be picketed/boycotted.
Sympathy Strike- Members of different unions can strike along with the original striking union to show support.
Mandatory, Illegal & Permissive Bargaining Items
Permissive Bargaining Items are those that cannot go to strike or impasse, Illegal Bargaining Items are those that would create a ULP like a closed shop, Mandatory Bargaining Items: Regular Wages, Work Hours, Overtime, Discipline Procedures, Paid and non-paid time off, Union Security, Layoffs and Recalls, Seniority, Work Rules, Work assignments. Those items that arise from the impact of the mandatory items are called "effects bargaining".
Unfair Labor Practices On The Part Of The Employer During Union Organizing
Mnemonic- TIPS
Threat (employer cannot threaten employees), Interrogate (employer cannot drill employees about how they will vote or what activites they engage in), Promise (employer cannot promise benefits in exchange for things like voting against the union), Surveil (employers cannot surveil employees liking taking pictures of those at a union meeting). Union organizers can visit employees at home while management cannot.
Permissible Employer Strategies And Tactics During Union Organizing
Delaying tactics effective according to research. Benefited by larger bargaining units because of the diversity of interests. Election Consultants can be hired, provide employees with anti union information, "captive audience" meetings where employees are forced to sit and listen to anti union rhetoric, Information communicated must be factual in nature. Employer may stop union organizing during work time, and may institue a no-solicitation policy.
Union Permissible Organizing Activities And ULPs
Distributing campaign literature, Meeting with employees at their homes or at group meetings, Use local media, use a legal process called "salting" where individuals attempt to get hired by the employer purely for the purpose of supporting the union, Unions best tactic is that they can promise benefits during the organizing process, organization picketing.
ULPs- Unions cannot retaliate against employees after the election or threaten to before.
Considerations NLRB Uses To Determine Whether The Bargaining Unit Is Appropriately Constituted
Bargaining unit comprises all employees who will be represented by the labor organization. Certain types of employees are not permitted to be part of a bargaining unit (ie managers, supervisors, secrataries to managers, etc.). If management claims that the bargaining unit does not share a "community of interest", NLRB makes a dertermination based on: Geographical dispersion, Similarity of working conditions and duties, Organizing arrangements in the industry, Mobility of employees between units, Requests of employees, Organizational structure.
Initial Union Contact Stage
Authorization Cards
NLRB Hearing Process
Reasons For Objecting To An Election
Process either begins when employees contact the union or union contacts the employees, this occurs most requently when employees are obviously unhappy or are in a heavily unionized industry, they could also target the employer just to get a quick win under their belt, or to help some strategic objective. Once 30% of employees sign authorization cards union can petition NLRB to hold a certification election. To get a "card check election" the union must get a majority of employees to sign authorization cards and then approach employer about voluntarily accepting the union. Unions can also hold recognition strikes but this rarely happens. Unions cannot have an election if they have petitioned for one within the last year. If the employer agrees the authorization cards are valid the process moves on to the "consent election". Or, the employer can object and request a hearing based on: ULP by the union, Authoization cards are not valid, Bargaining unit not properly constituted, etc.
NLRB & Court Decisions
-Beck Rights: Right for bargaining unit members to pay only that portion of union dues that are attributable to mainline responsibilities (communication wokers of america v. beck).
-Cicuit City: Determined compulsory arbitration, as a condition of employment, is legal (cicuit city stores v. adams)
-Borg-Warner Doctrine: Empowers NLRB to categorize bargaining issues into mandatory, permissive, and illegal. (NLRB v. Wooster Division Of Borg-Warner Corporation)
Excelsior List: Names and addresses of all employees eligible to vote in a certification election. List must be provided to the NLRB who gives it to the union. (excelsior underwear v. NLRB)
-Mackay Doctrine: Right of an employer to permanently replace striking wokers during an economic strike (NLRB v. Mackay Radio and Telegraph)
-Weingarten Rights: Employees entitlement to have a representative at an investigatory interview with management if the employee reasonably believes discipline may result. Who may be allowed representation has flipped back and forth with non union employees being given the right in 2000 and then reverting back to union employees only in 2004
A statistic used to analyze compensation policy v. actual practice, formula= (actual pay/midpoint of pay range). Ratio will be 1 when actual rate is on the policy line at the midpoint of the range (perfect), will be above 1 when it is above the range (overpaying), and below 1 when under the range (underpaying). Can be used for analysis to: provide organizational data on maintaining pay policy, evaluate compliance with equal pay and eeoc law, by race and sex of employee, completed for individual organizational units to insure management is following pay policy.
Fee-For-Service, HMO, And PPO Plans
Health Maintenance organizations and preferred provider organizations are referred to as managed care programs and emphasize primary and preventive care.
-Fee-For-Service Plans: Provide maximum flexibility, may be more expensive and not cover preventive care. Charateritics are- Covers medical fees based on a schedule of coverd services, subject to a deductible (amount policyholders must pay out before insurance coverage begins), coinsurnce (percentage of costs policyholder must personally pay), Out of pocket maximum in case of major medical event.
-Health Maintenance Organizaztions: Provide complete medical care for a set fee and a small copayment when services are used. Designated providers must be used, limited exceptions are made for emergency services.
-Preferred Provider Organizations: Combination of Fee-For-Service and HMO plan, Employees pay small copays for services within the network but may also go outside the network if they decide to inccur coinsurance costs.
Defined Benefit Plan
Defined Contribution Retirement Plan
Cash Balance Plan
-Defined Benefit Retirement Plan: Traditionally thought of as a pension, employer guarantees certain level of payment on retirement either as a dollar amount or a specific formula to be used. May be contributory or non-contributory. Funded by contributions based on potential obligations and ERISA requirements. Never fully funded because there is a continuing liability that cannot be predicted.
-Defined Contribution Retirement Plan: Specifies the amount of contribution employer is obligated to make, these are not subject to many regulatory requrements of ERISA. Examples are 401(k)s for private sector employees, 403(b)s for nonprofit, and 457 for state and local governement. Regulations limit the maximum contributions, those over 50 can contribute more than the max under catch up plans, most of these are portable.
-Cash Balance Retirement Plan: Combination of defined benefit plan and defined contribution plan, provides a guaranteed amount, but also provides portablility between employers. These could provide better benefits to younger workers, so they are on hold pending an IRS investigation on their impact on older workers.
Balance Sheet Approach With International Employees
Organizations using the "balance sheet approach" is one of the reasons why international employees are notoriously more expensive then local employees. The employee is compensated to the extent possible so that they are not financially harmed and can maintain a similar standard of living. This balance sheet can be based on the wages paid at headquarters (the home approach) or in the host country (generally only used if the host country has higher costs of living than the home country), the higher of the two can just be chosen, or a reference point can be chosen (ie the average US wages for a job in michigan).
Factors Considered: Salary, Taxes (employer just deducts home country taxes and covers overages themselves), Housing, Hardship Allowances, Additional Allowances. A failed expatriate assignment can be far more expensive than a well thought out balance sheet approach as the implementation and reassignment costs may be the greatest of the whole assignment.
Agency Theory And The Best Ways To Craft Executive Compensation
-Agency Theory: Postulates that the theory of the principal (owners/ stockholders) and the agent (managers and workers) are not aligned, principals want growth and profitability while agents are interested only in personal rewards. Being at odds the theory further suggests that these interests can be aligned by connecting agent rewards to the achievenment of organizational goals.
-Ways To Craft Executive Compensation: Composed of Base Salary (Limited to one million, can be above it performance based but meeting legal standards for this is difficult, compensation committee of the board of directors normally determines executive salaries, one issue with these committees is that they may hike up the salaries in order to have leverage negotiating their own salaries), Short-Term Incentives (Bonuses for meeting one year or less goals), Long-Term Incentives (Earned with long term objectives various types are stock options where employee can purchase stock at a set price, nonqualified stock options with fewer legal restrictions, Stock purchase plans, Restricted stock where the employee must fulfill some objective prior to receiving the stock, Phantom stock that mirror the real stock, performance shares, or stock appreciation plans). Benefits. And Perquisites.
Individual Incentive Plans
Designed to motivate employees by giving them the ability to control to some extent the amount of their compensation, piece rates, standard hour plans, bonuses and awards, commissions, and recognition plans are all for individuals. Workers can still not be paid less than minimum wage so they may still get a base weekly salary in addition to these performance based bonuses. The average employee should be at the midpoint of the range, but even the very best employee should not be above the highpoint of the plan. The plans are usually based around the idea that one employee doing additional work is more profitable than hiring additional help.
-Advantageous: Encourages performance, Aligns behavior with organizational goals.
-Disadvantegeous: Doesn't encourage teamwork, Could create dysfunctional internal competition, Could result in employee doing the organization harm in order to put themselves in a good position to receive compensation.
Group Incentives
Designed to reward performance at the group, department, or plant level. Appropriate when group performance is independant of other groups, but individual performace is interdependant within the group. Piece rate incentive plans can be established at the group level. Gainsharing is the most common incentive at the group level, these are plans that share cost reduction savings or the value of increased productivity with the group.
Advantegeous: Improved teamwork, Alignment of group and organizational goals.
Disadvantegious: Might undermine intergroup cooperation or create dysfunctional competition, Difficult to develop baseline data, gainsharing formula may be complex and difficult for workers to understand and not make clear what behaviors are rewarded, does not reward invidual performance and might be viewed as rewarding those who don't contribute, group effort might not be valued in organizational culture.
Organizationwide Incentive Plans
Might be appropriate when work at the individual and group level cannot be measured and/or is not independent. Includes:
Goalsharing plans (method of aligning employees with goals that may include a committee deciding objectives and determines what behaviors would contribute to fulfilling these goals, a baseline of current performance is developed with metrics based on goals like profitability, quality, sales, turnover, etc. Monitoring and Feedback Occur. Performance awards are given out.)
Profit-Sharing (distribute percentage of firm's yearly profit to employees, either equally, performance based, seniority, pay rate, etc.)
Employee Stock Plans (Employer purchases stock and deposits it in employees account where it stays until employee retires or leaves, very complex in terms of tax laws and (ERISA), amount of stock is usually either based on employee's salary or on seniority.)
Advantegeous: Might promote a sense of belonging and committment. Might increase employee retention. Might have tax benefits.
Disadvantegeous: Does not recognize individual performance, Could be seen as rewarding slackers, difficult for employees to determine the impact of their work on organizational goals, payout may be too far removed to provide link between behavior and reward, acheivment of objectives may be based on issues other than employee performance like the economy or bad CEO decisions, stock based compensation is dependant on performance of the stock.
Benefits Of Broad Banding
Done when pay grades do not meet the needs of management in terms of flexibility and performance recognition. Multiple pay grades may be "broadbanded" and collapsed into one level. The resulting broad band encompasses a pay range from the minimum rate on the lowest collapsed pay grade to the maximum pay rate for the highest collapsed pay rate. Employees can easily be assigned a variety of duties without consideration of the need to promote from one grade to another. Promotes flexibility in job assignments and facilitates employee growth, also allows management to give greater pay increases for superior performance without hinderance of narrow range that goes with multiple pay grades. Could better align compensation with today's flattened organizations and dynamic environments.
4 Basic Job Evaluation Methods
Ranking (Deck of cards, Alternation Ranking, Paired comparison method)
Job Classification (Position, jobs, class, grades, job family).
Point Factor Method.
Factor Comparison Method.
Ranking and Job Classification are whole job nonqunatitative evaluations, while point factor and factor comparsons are quantitative and rely on the use of compensable factors.
Ranking Job Evaluation Method
Simplest of the job evaluation methods and merely involves subjectively ranking jobs from most to least valuable.
Procedures: Deck Of Cards (all jobs are listed on pieces of paper like index cards, ranker goes through deck and removes most important job, then goes through the deck and removes the second most important, and so on.) Alternation Ranking (Similar to deck of cards method but after most important job is selected the least important job is selected, then second most important then second least important and so on.) Paired Comparison Method (involves creating a matrix with all jobs listed on the vertical and horizontal axis, each job is then compared to every other job and a determination is made as to whether it is more or less valuable with more getting a check mark, once all jobs are done the checkmarks are totaled up and the jobs are ranked.)
Disadvantages: Ranking method often based on vague criteria, ie subjective opinion of ranker (difficult to justify to third party or employee), provides only a ranking (ie one and two may be very different in terms of value while five and six may be near the same), In too large an organization may be too cumbersome.
Job Classification Job Evaluation Method
Involves comparing the job description of the job to be classified with the generic descriptions of those classes (jobs that have same duties, ie drivers) in the compensation system, duties are the first items to be compared, once the generic class if found with similar duties (ie driving), the grade must then be decided, etc. Federal employees use this system (ie hr assistant I)
Disadvantages: Beginning with no system in place, difficult and time consuming, difficult to determine where a position lies and clearly writing out a description that differentiates it, when job falls into more than one category it can become a source of contention.
Point Factor Job Evaluation Method
Involves placing jobs into a hierarchy of paygrades based on the number of points in the evaluation process. Points are assigned based on specific factors. This is the most frequently used evaluation system.
Design Issues: Deciding what factors are going to be used and how much they are worth. Deciding total number of points possible, the more grade levels the more seperation necesary. Subfactors of decided factors. Deciding how to use degrees (ie one factor worth 200 points may have 4 degrees of experience worth 50 points for each level).
Although difficult this method provides a solid job evaluation foundation, generally acceptable to all parties involved.
Factor Comparison Job Evaluation Method
More sophisticated method of ranking. Begins with selection of compensable factors and comparison with benchmark jobs in the external labor market. The factors are listed horizontally (ie skill, effort, responsibility, etc.) and the market rates are listed vertically (ie 5,6,8,10) positions are assigned a certain place in the pay range for each factor then the factors are added up to come up with an hourly total. Advante is that it makes it simple to price positions once done. Rare because of its complexity, and limited approach to blue collar jobs. One obvious problem is that this system is vulnerable to changes in the external market, but if indices rather than dollars are used this can be avoided.
Strategic Implications, Benefits, and Disadvantages of Leading, Lagging, or Mirroring External Labor Market Rates
In any company the employer may chose to pay:
Above the market rate for some jobs (those requiring critical skills). Advanatages- Recruitment is easier and retention is higher, higher-quality candidates, higher quality and quantity of production, Reduced training costs.
Disadvantages- Higher costs.
and below market for others (less critical skills where employer is willing to accept higher turnover),
Advantages- Lower Costs
Disadvantages- Lower quality and quantity of production, higher turnover, increased training costs.
this decision is also based on the nature of the organizational or product life cycle and the employer's business strategy. When training time is negligible it may be better to pay more competitively and accept higher turnover.
Determining Employee V. Independant Contractor
Relieves the employer of tax and benefit costs, but may remove control over means of production. Employers can not have the best of both worlds. Status is based on three factors:
-Amount of Behavioral Control: determined by amount of authroity the employer has to direct how the worker accomplishes the task, employees are generally subject to employer control of how, when, where, in what sequence, with what tools, and so on the worker does the task. Employees are often trained to do the work, whereas independent contractors use their own methods and means.
-Financial Control: Refers to whether the employer controls the business aspects of the worker's job. Independant contractors are more likely to have ongoing unreimbursed business expenses, independant contractors often have significant investments in facilities or equipment, independant contractors are available to work in the relevant market, seek other business opportunities, and advertise their services, employees are typically paid by the hour, week, or some other period of time, independant contractors on the other hand are paid a flat fee for completing the job. Independant contractors can make a profit or loss.
-The Nature Of the Relasionship Refers To: Whether there is a written contract, whether the employer provides the worker with employee-type benefits. The permanency of the relationship, if the relationship is for the duration of a specific project or a specific time, this is characteristic of an independant contractor, if the relationship is for long periods the intent appears to be to create an employee-employer relationship. The extent to which key work is performed, with critical work the employer may retain more control and control means employee.
Also- Can file IRS form SS-8 "Determination of worker status for purposes of federal employment taxes and income tax withholding.
Employer Obligations Under USERRA
Uniformed Services Employment and Reemployment Rights Act: Prohibits discrimination based on military service. Covers all employers and members of all uniformed services. Requires :
-Permitting military leave up to a cumulative five years.
- Prohibits discrimination in employment decisions based on service or potential service.
-Requires posting of USERRA notice
-Requires re-employment to position employee would have had had military service not occured.
-Employers required to provide reasonable accommodation to those disabled in military service.
-Reemployed employees entitled to benefits that would have accrued during service (ie pay, retirement)
-Employees covered under COBRA type continued health coverage for up to two years even if covered by military health insurance.
Employer Obligations Under FMLA
Under the Familty and Medical Leave Act employers must provide up to 12 weeks of unpaid leave every 12 months for seriuos health reasons, administered by DOL. -Covers public and private employers with 50+ employees within a 75 mile radius during 20 or more weeks within current or previous year. -Employees eligible is with the organization for 12 months, and have worked at least 1,250 hours during the past year. -If both husband and wife work for same company they receive 12 weeks for the birth of a child to share. -Benefits and seniority must continue during FMLA leave. -Employer may force the employee to deplete paid leave balances concurrently with FMLA leave. -Employer may not retaliate against the employee. -Responsibility of employer to notify employee FMLA leave is being used within two business days, this is especially important during periods when FMLA is being depleted for employee when paid leave is being used. -Employer may request documentation, employer can also request a second opinion as to whether a health condition exists, if this differs from the first opinion a third opinion can be requested. Employer is required to pay for second and third options.
Employer Obligations Under COBRA
The Consolidated Omnibus Budget Reconciliation Act provides for continuation of employer health coverage, does not require employer to provide health insurance though, covers employers with 20 or more employees and a group health plan. Provisions:
-Jointly enforced by the DOL and IRS
-Requires group health insurance remain available to a former employee and dependants.
-Qualifying events: Employee is terminated for reasons other than gross misconduct, Reduction of work hours makes the employee ineligible for health insurance.
-Qualifying Events For Spouse And Dependants: Death of employee, Divorce, Dependant ceases to be eligible under the plan.
-Duration Of Continuation Of Coverage: Termination or reduction in hours: 18 months, Employee is disabled at the time of loss of coverage: 29 months, Death Divorce Separation or Dependant loses eligibility: 36 months.
-During the continued period employee is required to pay both employer and employee health premiums plus a 2% surcharge for administration.
-Employer may terminate coverage if employee fails to pay premiums in a timely manner.
-Employer must provide notification of the availability of continued coverage within 90 days of becoming eligible and an election notice must be provided to employee within 14 days of qualifying event notifying employee that a qualifying event is occuring, it is the recipents responsibility to notify the employer about the qualifying event.
Fair Labor Standards Act
Provides for a minimum wage ($5.15/hr,$2.13/hr for tipped employees but total must be minimum equal to minimum wage. Exempt employees must meet all parts of a 3 part test: salary, minimum $455/wk double minimum wage or $27.63/hr for some computer employees, primary duties must be exempt: management, nonmanual tasks related to management, work primarily intellectual, learned professionals, creative professionals, Computer employees, outside sales employees, highly compensated executives- exemption can be removed if employer takes actions such as suspensions, reducing salary, deductions for any absences, changing pay in any way regarding hours), overtime (time and a half for any hours over 40 in one week, only paid on "work" time), Comp Time (Employees can trade at the same time and a half rate for time off, ie 1 hour of over time would get the employee one and a half hours off early that they would be paid for), Restrictions on employees less than 18 years of age (under 14=no go, 14&15=prohibited from many jobs and restricted on total hours and work times, 16&17=long list of prohibited jobs, no weekly hour limit, under 17 cannot drive on public highways while working), maintenance of compensation related records (name, address, birth date, sex, job, rate, earnings, etc.), and equal pay. (Sex) Not only can employers be penalized for noncompliance, but the official that made the offending decision can be personally penalized.
External Equity
Internal Equity
Individual Equity
Equity: Employees will weigh their perception of the ratio of their outcomes (pay) and inputs (experience, education, work quality and quantity) to the inputs/outcomes of others, perceptions of inequality can lead up to and including the employee leaving the organization.
External Equity: Employees comparison with those outside the company, very important in attracting good employees.
Internal Equity: Employees comparison with those inside the company, can be critical to employee retention, often more important than external because the job may be specialized to the company.
Individual Equity: Employees perception of fairness in where the employee is located on the pay scale in relation to the others on that pay scale.
Components That Take Up Total Compensation
-Wage/Salary: consists of direct financial payments, money for time (salary/hourly) or production (piecework, commissions) or a combination.
-Benefits: Indirect financial rewards usually as a reward of being with the organization (health insurance, retirement, pto), the law regulates some benefits while others are voluntary.
-Nonrecurring or intermittent extrinsic rewards: awards based on performance, not guaranteed.
-Intrinsic Rewards: Have no value, examples are praise, pride in organization, good working conditions, professinal growth, etc.
Elements To Be Included In A Good Performance Management Program.
-Aligned with organizational goals. -Performance dimensions are clearly job related and performance standards are reasonable. -Expectations are well known by employees. -Managers are trained in fair performance appraisals in relation to standards (frame of reference training). -Employees view system as fair. -Provide relative measures for admin decisions. -Provide absolute measures to provide developmental feedback. -Feedback is continuously instead of intermittently provided. -Appeal process in place. -Multiple inputs to the appraisal. -At least one higher level of review. -Done in a timely manner.
Setting Performance Management Standards
Performance standards are derived from the critical duties of the job found in the job description and are often called "performance dimensions". After dimensions are selected, standards are then developed. Three types of performance information to be obtained: Outcomes (most useful type, quantity and quality, customer satisfaction, completion of projects, etc.). Behaviors (2nd most useful type of info are used when outcomes like creativity are too hard to evaluate, includes things like timeliness of decisions, coaching, customer contacts, etc.) Traits (constructs such as dependability, commitment, integrity. Least useful of all, rationale is that these behaviors lead to achievment of desired outcomes.)
Who Performs Performance Evaluation
-Supervisor rates employees: Most used method, (advan- traditional, accepted by employees, managers are trained to do so, managers have close contact. Disadvan- Manager may have bias, manager may not have observed employee, manager may not understand position).
-Employee Rates Manager: employee may have unique insight, but generally not sole determinant (advan- employee knows job, might encourage manager to improve, higher management can become more informed. Disadvan- manager may not permit, employee may retaliate, employee may not understand several aspects.)
-Self-Rating: Often a developmental tool (advan- knows accomplishments, provides a basis for introspection. Disadvan- employee may not have necessary skill, employee may over or under rate).
-Peer-Team Rating: (Advan- peers have close contact, manager may not be able to observe employee, manager may not have technical expertise to evaluate employee. Disadvan- rating may not be based on work, peers may collude, may have negative impact on teamwork.)
-Outside Ratings: Often includes suppliers and customers (Advan- external perspective, provides customer service info, identifies customer needs. Disadvan- limited context, expectations may not be those of the organization).
-360 degree ratings: Input from all or many of the other sources (Advan- many sources, good developmental info. Disadvan- Administrative burden, various expectations.)
Performance Appraisal Goals
Two types are "Developmental" which uses absolute measures which evaluate the employees performance against predefined performance standards (identifying strengths/career goals, creating career paths, coaching, identifying training and educational needs.) and "Administrative" which require relative measures against others in the same job, this is important in making decisions regarding pay raises, promotions, bonuses, etc (Pay raises, promotions, selection for training, discipline, termination, etc.)
Performance Appraisal Errors
-Different underdstanding of performance dimension: Vague and unspecific rating levels can create inconsistencies. -Leniency: Managers rate high regardless of performance. -Strictness: Managers rate low regardless of performance. -Central Tendancy: Managers rate in the middle regardless of performance. -Bias: Values or prejudices affect rating. -Primacy: Performance at the beginning of the evaluation period gets more emphasis. -Recency: Most recent performance is given greater emphasis. -Vividness: Greater weight is given to particularly good or bad performance. -Halo Effect: Because of a high score in one area, rater scores employee high in all areas. -Horn Effect: Because of a low score in one area, rater scores employee low in all areas. -Contrast Error: Rating against the performance of other employees instead of to absolute standards previously established. -Similar to/Different from me: Rating based on nonperformance characteristics (ie college, hobbies, etc.)
Performance Appraisal Methods
Three Major Headings:
-Category Ranking Scales: Simplest and most frequently used, include graphic rating scales (most used method, allows rater to rank employee on several dimensions based on a continuum, can be numbered or subjective ie average, below average, etc.), Checklists (rater is provided with narrative statements that describe performance, often a list of each dimension, rater must choose most appropriate), Forced Choice (variation of checklist, some positive and some negative narrative statments are provided, rater must choose two options that are most like the employee and two that are least like them.) Advantages- simple, absolute measures. Disadvantages- no relative measures, open to interpretation, job relation may be loose.
-Comparative Methods: Ranking (evaluates all employees from highest to lowest), Forced Distribution (Rater must place a specific amount of employees in specific categories, ie 15% excellent, 40% average, 30% below average, 15% poor), Paired Comparison (requires that rater compares every employee with every other employee, outcome is a ranking of how many times each employee was determined to be better). Advantages- relative measure, prevents leniency or strictness. Disadvan- no absolute measures, does not indicate difference between rankings, might force over or under rating, time consuming.
-Narrative Methods: Essay (rater writes a short essay describing employees performance), Critical Incidents (manager keeps written chronology of good and bad performance). Advan- can have absolute standards, good developmental feedback. Disadvan- no relative measures, may not be job related, may place too much emphasis on managers writing ability.
Special Performance Appraisal Methods
-BARS: The behaviorally anchored rating scale is a combination of the graphic rating scale and critical incidents methodology. Development usually involves committee who put together list of critical incidents associated w/ job, incidents are then categorized by performance level for the position. Considered a valid and defensible appraisal method. Advantages- job related, defensible, absolute measures, validity. Disadvantages- time consuming and difficult to develop, difficult to get relative measures, each job needs a seperate BARS
-MBO: Management By Objectives is a goal setting as well as a performance appraisal system, employee and supervisor decide on goals together and progess towards goals are periodically reivewed and feedback is provided, final appraisal is based on goal achievement. Advantages- links performance to organizational goals, built in feedback, motivates goal achievement, objectives are specfic and measurable, absolute measures. Disadvantages- no relative measures, employee may concentrate on only goals instead of overall performance.
Learning Organizations
A continually adaptive organization is more of a theoretical construct than a reality. Characteristics are: strong member commitment, ogranizational culture values adpatation change and risk taking and accepts failures, all members are environmental scanners, members feel comfortable communicating at all levels, members put the organization over themselves, engage in "double-loop" learning establishing goals and monitoring them making corrections as needed is known as "single-loop" learning, learning organizations continuously reevaluate the goals themselves, completely changing course when necessary.
Causes Of Resistence To Change And Strategies For Overcoming Resistence
Change bring change in the status quo and is often difficult with formalized policies, procedures, job descriptions, etc. Strategies that can be used to overcome this change are: -Forcing (Using power or force to bring about the change, often results in negative outcomes such as distrust, lowered morale, etc.) -Reward (Resistence is reduced when the reward for change is greater, reward costs may be significant though) -Communication (Rational approach, assumes that explaining need for and change process will reduce or eliminate resistence. However change is often an emotional issue and cannot be addressed with the rational approach.) -Participation (Has others assist in the design and development of change. Challenge lies in the time it takes to develop and possible inexperience of those involved.) -Counseling (Involves dealing with the emotional aspects of change. Can be a long, expensive, and committed process that many organizations don't want to get in to.) -Either way, a combination is usually better than any individually.
Managing Organizational Change
Lewin's Concepts: Three-Step Change Process And Force Field Analysis
Lewin proposed that planned organizations follows a three-step process and that change can be initiated through force field analysis.
-Three-Steps: 1. Status quo is distributing through "unfreezing", this disturbs the homeostatsis forcing instability. 2. After equilibrium is removed, organization can begin movement to a new status "movement". 3. New desired state is stabilized through "freezing", this is done by reestablishing the equilibrium.
-Force Field Analysis: Shows how equilibrium is disturbed and reestablished. Involves determining major restraining (lack of capital, tradition, fear of change, organizational policies, fear of economic loss, etc.) and driving (federal regulations, downturn in economy, interest rate increase, new management, change in technology, etc.) forces then analyzing which can be changed to create an imbalance.
Three Ways Of Creating Movement: -Increase driving forces. -Decrease restraining forces. -Both. Increasing driving forces tends to bring an increase in restraining forces. After movement has taken place equilibrium must be reestablished.
Organizational Culture
System of shared values and norms held by organizational members, the "personality" of the organization that gives members guidance as to how to interpret events and behaviors. Can be strong or weak. Each department may have it's own culture. Sustained by continued selection of members who fit this culture. New members are introduced to culture through formal and informal socialization process. Culture is not always positive and can lead to resistance to change, also adopted values may not always lead to success.
Leader-Member Exchange Theory
Path-Goal Theory
Situational Leadership Theory
-Leader-Member Exhange Theory: (self-fulfilling prophecy) leaders make decisions whether new employees are in the "in" group or the "out" group. No clear objective basis for decision. "In" group receives better support, assignments, etc. this makes the in group more productive with less turnover, etc. the opposite is true for out group.
-Path-Goal Theory: It is the leaders job to provide what is missing in the employees, environments, etc. in order to complete tasks. 4 types: directive, participative, achievement-oriented, and supportive.
-Situational Leadership Theory: Leadership style is based on subordinates ability to accomplish tasks (based on two elements: skill/ability and motivation/willingness). Types of leadership styles: Directing (leader provides specific instructions monitors work closely, good for low skill and motivation levels). Coaching (leader provides guidance and high support, good for low skill but high motivation.) Supportive (Leader provides little direction but less support, good for high skill but low motivation.) Delegating (leader turns over decisions to employees with high skill and high motivation).
Fiedler's Contingency Theory
Proposes that leadership effectiveness is based on a match between the leader's leadership style and the contingencies of the workplace. -Two styles of leader behavior: task-oriented, and relationship-oriented. -Three contingencies: Leader-Member Relations (how much trust and respect the members have in the leader). Task Structure (how formalized and structured the work environment and processes are). Position Power (the amount of authority the leader has over the group members in terms of hiring, discipline, salary, etc.) Eight seperate situations can be built from these contingincies ranging from highly favorable to highly unfavorable for the leader. Task-oriented leaders produced better results in five of the eight situations, both those that were favorable to the leader and those unfavorable. Relationshiop-oriented leader produced better results in three situations that were neither favorable or unfavorable. Supported by research. Fiedler considered leadership style to be fixed if there was a mismatch one of two things can happen either leadership style or contingencies can change.
The Managerial Grid
9x9 Matrix with concern for people on the vertical axis and concern for production on the horizontal axis, 9x9 managers being the most effective. Subsequent research does not support this and the managerial grid should only be used as a jumping off point or aid.
Transactional And Transformational Leadership
-Transactional Leadership: Essentially management, leading the group towards established goals by providing direction and guidance. Use contingent reward, management by exception, to ensure work is completed.
-Transformational Leadership: Adaptive leadership, leaders bring out change and superior performance by consensus building and concern for employee welfare. Pay attention to employee needs, attempt to develop potential, broad term that incorporates the concepts of both charisma and visionary leadership.
Kirkpatrick's Four Levels Of Evaluation Of Training
1. Reaction- Measures participants attitude and perceptions regarding the program. Easy to measure and usually done with a checklist at the end of the program, tells little about effectiveness of the program, only if it was enjoyable. This is important because enjoyment facilitates learning and word of mouth for future participants becomes an issue.
2. Learning- Tells whether knowledge objectives were achieved, typically collected by administration of tests or quizzes or by observation and demonstration, does not tell whether training impacted organizational goals.
3. Behavior- Indicates affect on job behavior or performance, supervisor observations and feedback serve this purpose, behavioral data indicates change in performance but does not indicate whether this led to the achievement of organizational goals.
4. Results- Provides information re. impact on organizational goals, type of data needed is determined in the neeeds analysis stage of the HRD process.
Methods Of Data Collection For Training Evaluation
1. Reaction- Interviews (good data, time consuming, good if small number of participants, can serve as basis for questionnaires). Check Sheets (most frequently used method, do not provide in depth information) Questionnaires (good for large groups, data can be analyzed, often results in low participation rates, unclear questions can skew responses).
2. Learning- Usually on some sort of test, data should reveal differences in knowledge or skills before and after. Post-Measure (done at end of program, weakness is that it does not tell whether or not program caused any difference) Pre/Post Measure (Tests give when program begins and when it ends, data gives an indication of change in performance, but cannot be concluded that any changes were the result of the program) Pre/Post Measure w/ Control Group (uses two statistically similar groups, differences in performance between a control group and one that took the training can be attributed to the program).
3. Behavior- Observations (checking to see if change from the program is observable by the evaluator) Simulations (does participant perform in new ways in simulated environments) Managerial Feedback (manager is asked about performance) Self Statements (Employee is asked about performance) 360* Feedback (Several co-workers of employees give feedback).
4. Results- Identified gap must be measured, baseline data is usually needed. Financial Reports (ROI, Profitability, etc.) Production Records (Productivity, Scrap, Quality Data, Etc.) Compensation Records (Gainsharing results, merit or incentive pay) Organizational Goals (Milestones and subjectives) Performance Management Data (Overall rise in performance) Cost-Benefit Data
Transfer of Training/Learning
Transfer of training occurs when what is learned in the training is actually utilized on the job, a lot of training money is wasted because it is never used on the job. HRD abilities are limited once participant receives training, they can impart skills and knowledge, facilitate confidence with situational training. Up to management to ensure that the participant is actuallyh permitted to use what is learned and to provide them with what is necessary to do so. The phenomenon of management failing to support training is called "encapsulated development". Critical for HRD professionals to be able to measure programs, impact, and make changes.
Facility Arrangments
Must complement program delivery.
-Classroom/Theater: Appropriate for lecture or dicussion presentation for larder groups, difference between the two is that classroom arragments usually have a writing surface. Accomodate large number of people and allow discussion between trainer and participants, does not allow participants to interact.
-Banquet: Appropriate when delivery method includes discussion or project groups or includes meals. Does not utilize space well or maximize participants, participants may not be facing the trainer.
-Rectangle: Facilitates group interaction, number of people should be limited to fewer than 20 and this arrangment takes up a lot of space.
A. Needs Assessment (Process of determining whether HRD programs are needed to achieve organizational goals at the organizational, task, and person level.
D. Program Design
D. Program Development (Program design and program development are frequently considered one step in the HRD process because they are intertwined. Designing consists of putting together wells stated goals and objectives. Development consists of deciding the actual methods of delivery and materials are produced.)
I. Program Implementation (important issues are selecting a facilitator, facility arrangment, communication, etc. A bad implementation will destroy a training)
E. Program Evaluation (For cost benefit analysis. other things to measure are transfer of training, evaluation models, sources to be used, etc.)
Practical Applications Of Motivational Theories
-Maslow's Hierarchy of Needs: Wide Variety, compensation, environment, performance management, etc.
-Theory X and Theory Y: Management Practices, Employee Relations.
-Herzberg's Two-Factor Theory: Job satisfaction, training and development, compensation, employee relations
-ERG Theory: Same as Maslow's
-McClelland's Theory of Needs: Employee and management selection, training
-Goal-Setting Theory: MBO, Performance management
-Self-Efficacy: Performance Management, training programs
-Expectancy Theory: Performance management, compensation, benefits
-Reinforcement Theory: Training, incentive programs, compensation
-Equity Theory: Compensation, Internal, External, and Individual equity, benefits
-Job Characteristic Model: Job analysis and design, job enrichment, job rotation, job simplification, job enlargement.
Expectancy Theory
Motivation is determined by the importance of an outcome to the individual and the belief that increased effort will lead to a positive outcome. Formula: M=E*I*V
M-Motivation, E-Expectancy that effort will lead to a level 1 outcome, I-Instrumentality is the probability that a level 1 outcome will lead to a level 2 outcome, V- the value or valance placed on the level 2 outcome. Can be explained as- an employees motivation will depend on the fact that they expect to get a level 1 bonus (ie bonus) if they do x, and getting 4 level one bonuses will lead to a level 2 bonus (ie raise). Can have multiple outcomes and variables.

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