Management of Human Resources The Essentials, 5th Canadian edition Dessler Solution Manual

INSTRUCTOR’S RESEROUCE MANUAL Genevieve Farrell Ryerson University

Management of Human Resources: The Essentials Fifth Canadian Edition Gary Dessler Florida University College Nita Chhinzer Guelph University Gary Gannon Durham College

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PART ONE: HUMAN RESOURCES MANAGEMENT IN PERSPECTIVE

CHAPTER 1 THE STRATEGIC ROLE OF HUMAN RESOURCES MANAGEMENT LEARNING OUTCOMES DEFINE human resources management and ANALYZE the strategic significance of human resources management.

DESCRIBE the four phases in the evolution of HRM, and EXPLAIN how HRM has changed over recent years to include a higher-level advisory role.

EXPLAIN how HRM has taken on the characteristics of a profession.

DISCUSS the internal and external environmental factors affecting human resources management policies and practices and EXPLAIN their impact.

CHAPTER SUMMARY This chapter focuses on the strategic role of HRM and HR professionals in today’s business context.

Strategic HRM links the management of people to strategic goals and objectives to improve business performance. Two major stages in the evolution of HR management thinking were (1) personnel management, which focused on administrative tasks, and (2) strategic HRM, in which it was recognized that organizational success is linked to operational and strategic management of labour. 5 critical pieces of knowledge required by HR professionals are presented (business acumen, an understanding of employment law and legislation, talent management, broad HR knowledge and employee-labour relations knowledge). Six core competencies for HR professionals to have to deliver value to their organizations are identified (credible activist, culture and change steward, talent manager and organizational designer, strategy architect, operational executor and business alley). Two specific areas of HR activity, operational and strategic, show how HRM has gone beyond its traditional administrative role. The chapter looks at numerous professional designations that help to ensure that HR professionals understand and can deal with the large number of external (including economic factors, labour market issues, technology, government, globalization, and environmental concerns) and internal (including organizational culture, organizational climate and management factors) that impact HRM.

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LECTURE OUTLINE The Strategic Role of Human Resources Management Just as organizations require financial capital to operate successfully, they must also acquire, grow and effectively use the human capital of workers (knowledge, education, training, skills, and expertise). HRM involves formulating and implementing HR systems (e.g., recruitment, performance appraisal, and compensation) that are aligned with organizational strategy (see Figure 1.1, p. 3). This ensures that necessary competencies and behaviours will be available to meet strategic goals. Research has shown that strategically aligned systems of HR practices are related to better organizational performance and competitive advantage. The resource- based view of the firm suggests that HR practices contribute to the development of embedded knowledge of a firm’s culture, history, processes, and context, which are nonimitable (hard to copy by competitors). Three specific HR practices (profit sharing, results-oriented performance appraisal, and employment security) are strongly related to accounting measures of firm performance, such as return on assets and return on equity. A more extensive set of practices, known collectively as high-performance HR practices, have a positive relationship with turnover, productivity, and corporate financial performance (gross rate of return on capital).

Teaching Tip: This is a critical section for getting buy-in from students in quantitative disciplines/fields (e.g., economics, finance, accounting, and engineering) who may see HR more trivial and less important than their other courses. Have students guess how much of a difference effective HR makes, then share the statistics and graphs from empirical research. The citations for footnoted studies are found in the Notes section of the text (beginning on page 492). If using this text for an MBA class you can assign one or more articles as class preparation.

The Evolution of HRM While many students and employees still perceive HRM to be a clerical department, HRM has changed dramatically over the past 100 years, taking on an increasingly strategic role. This has changed the demands on, and expectations of those working in the HR department. Today’s strategic view of HRM evolved through two major stages: personnel management and strategic management of human resources. Dr. Rick Hackett recommends that human resources is really the responsibility of all and requires a focus on data analytics, the role of technology, the use of a contingent workforce, intrepreneurship and to stay on top of the current literature in HR.

Critical Competencies for HR Professionals Six core competencies for HR professionals to have to deliver value to their organizations are identified (credible activist, culture and change steward, talent manager and organizational designer, strategy architect, operational executor and business alley).

Measuring the Value of HR: Metrics A key difference between the traditional and current role of HR professionals is the requirement to be able to measure the value and impact of the organization’s human capital and HRM practices. Metrics (statistics) that HR professionals need to understand and use cover both quantity (e.g., # of candidates interviewed for a vacancy) and quality (e.g., # of first choice candidates accepting an offer to hire). HR .

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measures are also an important part of the balanced scorecard system of organizational outcomes that contains measures of financial, customer and operations performance.

Teaching Tip: Avoid using the word “history” as this tends to make most students immediately tune out.

Make students aware of outdated perceptions of those who work in HR by having them describe a day in the life of an HR person as preparation for class, or as a short in-class exercise. Have students look up HR job postings on www.monster.ca or www.workopolis.com.

Professionalism in HRM Every profession (e.g., doctors, lawyers, engineers) shares several characteristics (common body of knowledge, benchmarked performance standards, representative professional association, an external perception as a profession, code of ethics, required training credentials for entry and career mobility, ongoing skill development and a need to ensure maintenance and socially responsible use of professional competence. In Canada, the HR professional designation is undergoing major change. HR practitioners are increasingly professionals, both in performance and qualifications. Although operating locally, provincial HR associations are tied into a global network of HR associations through their affiliation with the Chartered Professionals in Human Resources (CPHR) formerly called the Canadian Council of Human Resources Associations. Review Table 1.2 on page 10.

HR professionals can also belong to a number of other Canadian and international associations. Broad and specialized certification requirements, managed and administered by provincial associations, leads to professional designations that signal validation of professional Teaching Tip: Ask students explore HR association websites and compare them to each other and even to websites for other professions. Assign students to read one or more portions of the Canadian HR Reporter and bring recent cases, issues, articles to class or submit as a reflection exercise. Request students explore other HR specialty associations, such as, World at Work and the Institute for Performance and Learning.

Ethics and Corporate Social Responsibility The text outlines what ethics are, the key ethical issues confronting organizations today and the role of social responsibility. Teaching Tip: Invite students to find organizations that have interesting corporate social responsible programmes.

Environmental Influences on HRM As mentioned in the preceding section, the new role of HR professionals involves environmental scanning, looking outside the organization in addition to the more traditional internal focus. This is because HR professionals need to understand both external and internal environmental influences that could impact on strategy formulation and/or implementation. These influences can help organizations to attract and retain highly qualified workers or make it extremely challenging to ensure that the available human capital can successfully contribute to organizational performance and sustain competitive advantage.

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External Environmental Influences are outside the direct control of the organization.

Economic Conditions (unemployment, productivity, primary/secondary/tertiary sector growth/decline) affect demand for products and services, therefore demand and supply of workers.

Labour Market Issues (workforce diversity, generational differences (Table 1.4, p. 13), and growth in nonstandard/contingent work) affect not only the characteristics of workers but also change traditional employment patterns and relationships. Traditionalist, Baby Boomers, Generation X and Generation Y workers are working with and for each other, and increasingly workers are not traditional employees of the organization, but are working on a contingent/non-standard basis.

Technology can enable workers to work almost anywhere and provide tools for management of a dispersed workforce. Technological changes however have brought increased concerns about employee privacy and the line between work and personal time.

Government laws affecting the workplace continue to proliferate and are not standard across Canada.

Companies with employees in multiple jurisdictions need to have a good grasp of the complexity of the legal landscape.

Globalization has brought an increase in business conducted outside of the home country, increasing the need to manage human resources in many different countries. In addition to legal differences there are also societal and cultural differences that have to be accommodated in HR practice.

Environmental Concerns have led to sustainability being a key means of retaining human capital as a growing number of workers want to work for a socially responsible organization.

Teaching Tip: One way to tackle this material is to have students first identify how each of these influences would affect the organization, then dig down to identify the specific impact on HRM. Internal Environmental Influences are within the control of the organization Organizational Culture, defined as core, widely shared values, beliefs, assumptions, serves a number of purposes (communication, direction and norms, attitudes, identify, orderliness, consistency, loyalty and commitment). HR is involved in sharing stories, myths, symbols and creating ceremonies and rituals that reinforce the desired culture.

Organizational Climate (prevailing atmosphere) should, but does not always, work in harmony with the organizational culture. Management’s leadership style, HR policies and practices and organizational communication send more obvious signals about whether the organization is friendly/unfriendly, open/secretive, rigid/flexible, or innovative/stagnant.

Management Practices such as flatter organizational structures, cross-functional teams and improved communication have led to increased employee empowerment.

Teaching Tip: One way to address the often difficult concept of organizational culture is to have students explore what some of the shared values in the particular class are.

DISCUSSION BOXES STRATEGIC HR: The HR Role Continues to Evolve (p. 7) Five major changes will drive continued change in the HRM department and profession well into the 2020s. .

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These five are: changing technology that has refocused the role of HR professionals on strategic activities; new rules for financial accountability and legislative compliance, more focus on succession planning for CEOs and other executive positions, selective development of top talent, and C-suite participation by HR leaders.

Teaching Tip: Get students to discuss the reaction of other executives to having HR as part of the top management team. Consider assigning the article “Why We Hate HR” (Hammond, Fast Company, 2007), because leaders of other functional areas of business may also be unaware of changes in HRM and the increasing certification of HR professionals.

ETHICAL DILEMMAS Can or should an employee real information that was disclosed in confidence about a troubled coworker, and if so, under what circumstances? (p.10) Troubled can mean many things and the response to this question revolves around what is meant by the term troubled. If the employee had confided to another employee about a personal matter that he or she is dealing with and can resolve, then it would be appropriate for the employee to maintain this information in confidence. If however, troubled refers to a situation that may cause hard to the employee or to others, the person who has received such information would have an ethical obligation to real that information in order to get assistance for the person in order to prevent him or her from harming himself or herself. In the case of a situation where the trouble of the individual has the potential to cause harm to others, the employer has the obligation to act so that the workplace remains, safe, healthy and free from harassment for all employees. In order to ensure that this is the case, the employee should reveal information disclosed in confidence in order to prevent harm to others

The maintenance department supervisor has just come to you, the HR manager, voicing concern about the safety of two of her reporting employees whom she recently discovered are functionally illiterate.

What are your responsibilities to these employees, if any? (p. 13) Functional illiteracy means that someone cannot read, write, calculate, or solve problems at a level required for independent functioning or the performance of routine technical tasks. This means that the supervisor must keep in mind, at all times, the fact that these employees may not be able to read hazard warnings, operating instructions, etc., putting themselves and possibly other workers in danger. You cannot assume that they will act in unsafe ways, but the firm has a legal obligation to take every possible precaution to protect the health and safety of all of its employees. This might mean providing verbal instructions, using graphical signs and symbols, and/or supervising them more closely. Firing these employees or moving them to a lower-risk job (without consultation) increases the risk of a lawsuit or a union grievance (if unionized workplace). To ensure that all future workers meet functional literacy standards recruitment and selection processes should be reviewed and modified.

In the process, caution must be exercised to ensure that there is no violation of their privacy rights, and that the dignity and respect of these individuals are not undermined. If the functional illiteracy of one or both of these individuals is associated with a learning disability, human rights protection may also come into play. Firms have a legal obligation to accommodate individuals with a disability (physical or mental) to the point of undue hardship.

While not required to do so, the firm’s code of ethics may suggest that this matter be addressed in a more comprehensive way and thus choose to offer an on-site literacy program, If the company has not checked .

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for functional literacy as part of its selection processes, there may be other workers who are also functionally illiterate. Although such programs are aimed at refreshing and improving basic reading, writing, math, and problem-solving skills, they also improve listening, oral communication, teamwork, leadership, and computer skills, among other things.

KEY TERMS balanced scorecard A measurement system that translates an organization's strategy into a comprehensive set of performance measures. (p. 8) certification Recognition for having met certain professional standards. (p. 9) change agents Specialists who lead the organization and its employees through organizational change. (p.

6) contingent/nonstandard workers Workers who do not have regular full-time employment status. (p. 13) employee engagement The emotional and intellectual involvement of employees in their work, such as intensity, focus, and involvement in his or her job and organization. (p. 5) empowerment Providing workers with the skills and authority to make decisions that would traditionally be made by managers. (p. 17) environmental scanning Identifying and analyzing external opportunities and threats that may be crucial to the organization’s success. (p. 6) ethics The principles of conduct governing an individual or a group; specifically, the standards you use to decide what your conduct should be. (p. 10) human capital The knowledge, education, training, skills, and expertise of a firm's workforce. (p. 2) human resources management (HRM) The management of people in organizations to drive successful organizational performance and achievement of the organization’s strategic goals. (p. 2) metrics Statistics used to measure activities and results. (p. 8) organizational climate The prevailing atmosphere that exists in an organization and its impact on employees. (p. 16) organizational culture The core values, beliefs, and assumptions that are widely shared by members of an organization. (p. 16) primary sector Jobs in agriculture, fishing and trapping, forestry, and mining. (p. 12) productivity The ratio of an organization's outputs (goods and services) to its inputs (people, capital, energy, and materials) (p. 12) secondary sector Jobs in manufacturing and construction. (p. 12) social responsibility The implied, enforced or felt obligation of managers, acting in their official capacities, to serve or protect the interests of groups other than themselves. (p. 11) .

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strategy The company’s plan for how it will balance its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. (p. 6) tertiary or service sector Job in public administration, personal and business services, finance, trade, public utilities, and transportation/ communications. (p. 12)

REVIEW AND DISCUSSION QUESTIONS (page 18) 1. Describe the transformation that HR underwent over the years. Discuss how changes in internal and external factors contributed to the evolution in HR. (p. 3) The role of HR is moving away from the traditional operational/administrative role, where HR professionals hire and maintain employee records, train and manage employee separations into a more strategic role, where HR is focused on ensuring that the organization acquires, develops and retains the most effective human capital to achieve its strategic goals. The evolution took place during four phases in which HR replaced administrative tasks with more strategic tasks.

2. Describe the role of HR in strategy formulation and strategy implementation. (p. 7 - 8) Organizations are increasingly viewing the HR department as an equal partner in the strategic planning process, in contrast to the past when HR input was not sought during strategic planning. HR professionals, together with line managers play a key role in identifying and analyzing external opportunities and threats that may be crucial to the organization’s success. HR professionals can also add value to the strategy formulation process by supplying information regarding the company’s internal strengths and weaknesses, particularly as they relate to the organization’s workforce.

Strategy execution is typically the area where HR makes the biggest strategic contribution. For example, HR professionals are heavily involved in the execution of downsizing and restructuring strategies through establishing training and retraining programs, arranging for outplacement services, instituting pay-forperformance plans, and helping to redesign jobs. HR specialists are expected to be change agents who lead the organization and its employees through organizational change.

3. Describe how the external environment influences HR. (p. 11 – 16) External environmental factors cited as driving the strategic focus of HRM are: overall economic conditions, labour market issues, technology, globalization, government, and environmental concerns. Students should discuss how these affect HRM e.g. economic conditions affect unemployment rates, which affect supply of labour. Economic conditions also affect demand for products and services which affects the demand for labour. Students should not discuss internal factors, such as organizational culture organizational climate, or management practices.

4. Differentiate between organizational culture and organizational climate. (p. 16) Organizational culture consists of the core values, beliefs, and assumptions that are widely shared by members of an organization. It serves a variety of purposes: communicating "what the organization believes in" and "stands for”; providing employees with a sense of direction and expected behaviour (norms); shaping employees' attitudes about themselves, the organization, and their roles; creating a sense of identity, orderliness, and consistency; and fostering employee loyalty and commitment. A positive culture leads to loyalty and commitment; a negative culture has the opposite effect. .

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Organizational climate refers to the prevailing atmosphere that exists in an organization and its impact on employees. The major factors influencing climate are management's leadership style, HR policies and practices, and amount and style of communication. The type of climate that exists is generally reflected in the level of employee motivation, job satisfaction, performance, and productivity, and thus has a direct impact on organizational profits and/or ongoing viability.

5. Describe the multiple jurisdictions related to employment legislation affecting HRM in Canada (p. 15) Each province and territory, 13 in all, has its own human rights, employment standards, labour relations, health and safety, and workers’ compensation legislation. Some jurisdictions have pay and employment equity, while others don’t. Some companies are under federal legislation and others provincial. About 10% of the Canadian workforce is federally regulated; these include employees of the federal government, banks, airlines, national railways, and the armed forces. However, there are some laws that apply to all employers and employees across Canada. These are Employment Insurance (EI) and the Canada/Quebec Pension Plan.

6. Describe the six core competencies required of HR professionals. Identify how these competencies are also embedded in the roles of line managers, senior managers, and C- level executives in an organization. (p. 4 – 7) The six core competencies of HR professionals are Credible Activist, Culture/Change Steward, Talent Manager/Organizational Designer, Strategy Architect, Operational Executor, and Business Ally: Credible Activists are respected and trusted and actively take positions, often challenging assumptions, sharing this role with many CEOs. Culture/Change Stewards understand, guide, and react to both internal and external stakeholder expectations. They are responsible for shaping and supporting a culture of change as well as developing change management programs, strategies, and projects. This role is shared with line managers who understand their employees and must implement change programs.

Talent Managers/Organizational Designers embed theory, research and practice into processes, policies, and structures of an organization to facilitate effective movement of employees into, out of, and within the organization. At the same time they work together with line managers to lower labour costs (turnover, absenteeism, occupational health and safety).

Strategy Architects work with the senior management team to formulate organizational strategy.

Operational Executors act as change agents to align operations with current strategy, working with managers throughout the organization, but also maintain their traditional role of drafting employeerelated policies.

Finally, Business Allies scan the environment to identify external opportunities and threats, sharing their findings with other environmental scanners. They also act as a Business Ally in terms of sharing up to date information on internal strengths and weaknesses, when it comes to existing human capital.

7. Explain how HR has become professionalized and describe the value of this professionalism. (p. 9 – 10) HRM has adopted the characteristics of a profession, namely a common body of knowledge, benchmarked performance standards, representative professional association, an external perception as a profession, .

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code of ethics, required training credentials for entry and career mobility, on-going skill development and a need to ensure maintenance and socially responsible use of professional competence.

The value of this professionalism is that it raises the credibility of HR professionals in the eyes of senior management, promotes sharing of best practices across organizations, ensures HR professionals are prepared to deal with the full range of HR issues, and increases the probability that the organization can avoid legal problems.

CRITICAL THINKING QUESTIONS (page 18) 1. Explain how demographics and workforce diversity have had an impact on the organization in which you are working or one in which you have worked. What policies or practices did managers or HR in the organization have in place to help assist with the management of a diverse internal labour force.

As a starting point they should list the demographic differences that they have noticed at work. They may have noticed multiple generations, ethnic and/or racial diversity, gender de- segregation (females doing traditionally male jobs, and vice versa), workers with different levels of education, and workers with different physical and intellectual abilities. They have possibly noticed the trend to nonstandard/contingent labour; for example, they may have noticed a trend towards part-time or contract employment. Their answer should then move onto how diversity has affected the workplace; is it less harmonious, more creative, or more cliquish?

Finally they should attempt to identify ways in which the organization tries to meet the needs of different types of workers while not appearing to favour one group over another. These might include leave and retirement programs, orientation and training on working with others, more empowerment, more teamwork, lateral career moves, tuition reimbursement, and accommodation of disabled workers. They may also have experienced diversity management initiatives that seek to educate workers about world religions and cultural practices in different countries. Some organizations may offer telecommuting and/or childcare, as well as health and fitness/wellness programs and employee assistance programs.

2. Explain how changing economic and competitive pressures have had an impact on the organization in which you are working or one in which you have worked. How has your business responded to these pressures?

Economic conditions (unemployment, inflation, interest rates, and/or exchange rates) and competitive pressures (competitor offerings, pricing, or control of materials or distribution) affect demand for goods and services, indirectly affecting supply and demand for labour. While they might talk about how their organization has responded through changes to marketing, production or ecommerce, they should make a connection to how those changes impacted HR. E.g. if the company dropped its prices did it put in a hiring freeze or layoff people? If economic conditions improved did they hire more full-time people or just give more overtime to current workers?

3. A firm has requested your assistance in ensuring that their multigenerational workforce functions effectively as a team. What strategies and/or programs would you recommend? Why? Answers should focus on the fact that three types of programs are required: activities/training to promote an understanding of and respect for values, priorities, and differences associated with the members of the baby boom generation, Generation X and Generation Y, and an appreciation of the benefits associated with having a multigenerational workforce; work/life support programs to enable all employees to .

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effectively balance their work and non- work responsibilities, such that they can devote the expected time and attention to their work duties; and activities/programs to enhance teamwork skills, which are not innate and must be learned. For any such initiatives to be successful there must be support from senior management (in terms of financial and human resources) and a commitment to multigenerational teams by senior managers, since they set the tone and example.

The fact that employees of all ages are truly valued must be embedded in the corporate culture and reflected in all HRM policies, procedures, activities and decisions, such as training program admission, transfer and promotion decisions, communications initiatives, etc.

The firm’s commitment to a multigenerational workforce must be reflected in recruitment advertising and discussed during the selection process to ensure that individuals thinking about joining the firm understand the expectations related thereto.

Support and/or mentoring programs should be considered, since they can be very effective in breaking down barriers and increasing understanding. For example, an older employee might be asked to mentor a younger employee to prepare him/her for a specific advancement opportunity. A younger employee might be asked to provide an older employee with some computer skills coaching. Building effective teams (whether multigenerational or not) requires training in setting and achieving group goals, team roles and responsibilities, group problem solving and decision making, handling conflict, and effective communication strategies.

Confidential assistance should be available to provide guidance/advice to employees in how to handle specific situations, so that any problems/misunderstandings can be dealt with as they arise.

4. Choose a non-HR role you have had in your previous jobs. Identify how you have used the core competencies of HR professionals in that role, and how it affected your job performance.

Their answer should touch on each of the six core competencies. Being a credible activist means building trust while challenging assumptions about existing policies and procedures. Being a culture and change steward means helping to promote and implement change and develop employee engagement that is aligned with the organization’s culture. Non- HR employees can also act as talent managers/organizational designers by identifying ways to lower labour costs by changing organizational policies and/or processes.

Being a strategy architect is probably the core competency that they may not have experienced but some may have had a role in providing information into the strategy formulation process. As an operational executor non-HR employees play a large role in providing information to HR about company policies and procedures that may need to be changed to help the organization become more responsive, because they are closer to the customer. Everyone in the organization should act as a business ally and share information that is relevant to external opportunities and threats and internal strengths and weaknesses.

Teaching Tip: Some of these questions may have to be revised depending on the composition of your class.

If you have a predominantly young and relatively inexperienced group of give them an assignment requiring them to ask these questions of an older relative who has been in the workforce for more than 10 years.

EXPERIENTIAL EXERCISES (page 18-19) 1. Working alone or with a small group of classmates, interview an HR manager and prepare a short essay regarding his or her role in strategy formulation and implementation.

Here the student should consider the responsibilities of the actual role and compare it to the discussion in the text. Is the role strategic or is it more administrative? What core competencies has the HR manager .

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used in the past? Identify what actions the HR managers took that contributed to strategy formulation versus those that contributed to strategy implementation. What gap or opportunity did the HR strategy intend to address? What is the link between HR strategy and organizational strategy? How was the strategy implemented? What were the outcomes?

2. Review job ads for five senior HR roles on job posting websites or corporate websites. Identify common competencies required for those roles as per the ads. Contrast these required competencies (both implied and explicit) with the core HR professional competencies highlighted in this chapter.

Discuss the most consistently required competency and the impact of that competency on organizational success.

Answers will vary somewhat depending on what postings were available at the time of their search. Ideally the postings should have Director, Vice President, or Assistant Vice President in the title; Manager is acceptable only if no other postings are available and it is for a large organization. Their answer should copy and paste language used in the posting to the one or more of the six core competencies. They may choose to use a table for this purpose. Quotations from job advertisements should be properly cited. The explicit information may come easily but they will have to interpret other parts of the job specification (knowledge, skills, abilities, and other characteristics/credentials) in order to uncover implicit requirements. The most consistently required competency should be the one with the most matches to job posting content.

3. Review job ads for five executive roles (such as CEO, vice-president, or president) on job posting websites or corporate websites. Identify common competencies required for those roles as per the ads.

Contrast these required competencies (both implied and explicit) with the core HR professional competencies highlighted in this chapter. Discuss the most consistently required competency and how it is important in non-HR roles.

Answer will vary depending on postings selected; all postings should be for non-HR executive roles e.g. Vice President, Marketing or Chief Information Officer. The first part of their answer should identify commonalities across these postings e.g. leadership, vision, etc. Then the second part of their answer should match these commonalities against the six HR core competencies. This may take some work as executive postings are often worded quite broadly and requirements may not have an obvious match at first glance. However, they should be able to find that one of the six competencies appears more frequently/has more emphasis in executive roles. Their answer is not complete if they do not discuss the importance of this HR competency in a non-HR role.

4. According to a 2016 study of the world’s most attractive firms (released by Universum), the top 10 employers for career seekers with a business background were (in priority order): Google, Apple, Ernst & Young (EY), Goodman Sachs, PricewaterhouseCoopers (PwC),Deloitte, Microsoft, KPMG, L’Oréal Group and JP Morgan. In groups, review the company websites of these organizations to determine the corporate strategy, objectives, and markets that these organizations target. As a team, discuss the similarities and differences among the strategies, objectives, and markets of these 10 employers. Explain how these factors might affect Generation Y perceiving these companies as desirable employers.

An efficient way for students to tackle this question is to set up a table in which they can record information that they obtain from the website and/or annual reports. They should then briefly summarize points of similarity, but spend more time on points of difference. For instance, do some of the employers have the same target market but different strategies? How do objectives differ across employers in terms of growth or market position? For the final part of the question they should draw on the information about Generation Y in Table 1.4 and the text (p. 12-13) rather than simply drawing on their own personal opinions. Two key characteristics of Generation Y are that they are eager to accept new challenges and are innovative and creative. If they do not find a match in company’s strategy or goals (e.g., entry into new .

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markets, research and development goals) then they may not find certain employers as attractive.

5. Using the sample Balanced Scorecard template provided by your professor, in pairs, develop a balanced scorecard measure for a hypothetical company in the retail urban clothing sector. This company has many stores in large and small cities in Ontario and Quebec. As you develop your measures be sure to take into consideration current economic conditions. Exchange your completed set of measures with another pair. Compare and contrast your measures. Is one set “better” than the other?

Why or why not? Debrief as instructed.

Create a simple handout with four sections as follows and if the students are not yet familiar with Balanced Scorecards measures and concepts, briefly outline each and compare the value of these measures to traditional organization measures which only measure outcomes once things have happened. Provide a sample measure for each section as required:   

Financial - e.g. profits, sales, market share Customer Service – e.g. satisfaction, repeat business, # of products per customer Internal processes – e.g. productivity, quality, cycle time Employees – e.g. satisfaction, learning, engagement, turnover, absenteeism

Debrief the students’ work by discussing the linkages between measures in the other 3 categories and HR measures. For instance, what could HR measure to help ensure quality in operations or customer satisfaction?

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CHAPTER 2 THE CHANGING LEGAL EMPHASIS: COMPLIANCE AND IMPACT ON CANADIAN WORKPLACES LEARNING OUTCOMES EXPLAIN how employment-related issues are governed in Canada.

DISCUSS at least five prohibited grounds for discrimination under human rights legislation and DESCRIBE the requirements for reasonable accommodation.

DESCRIBE behaviour that could constitute harassment and EXPLAIN the employers’ responsibilities regarding harassment.

DESCRIBE the role of minimums established in employment standards legislation and the enforcement process.

CHAPTER SUMMARY This chapter focuses on the legal environment in Canada. It discusses the multiple overlapping pieces of legislation that attempt to balance employee and employer rights when it comes to human rights and freedoms, employment equity, employment standards, and privacy. The chapter shows the similarities and differences between organizations that are under federal jurisdiction versus provincial jurisdiction. It discusses the requirement to take steps to protect employees from harassment and discrimination, in order to reduce legal liability. Specific exceptions that allow discrimination on prohibited grounds, based on bona fide occupational requirements, are covered, but so is the requirement to offer reasonable accommodation. Legislation specific to the workplace is discussed.

This includes the Employment Equity Legislation and Employment Standards. The chapter identifies the minimum terms and conditions contained in employment standards legislation and the complaintbased process for violations. Respecting employee privacy is emphasized. The chapter discusses how the Personal Information Protection and Electronic Documents Act (PIPEDA) is used to oversee the collection, use, and disclosure of employees’ personal information.

LECTURE OUTLINE I. The Legal Framework for Employment Law in Canada Both HR professionals and front line managers/supervisors need up-to-date knowledge of the multiple layers of employment legislation and regulation that affect Canadian workplaces in order to reduce legal liability and protect against expensive lawsuits. Stare decisis and precedents are included. Figure 2.2 (p.

23) lists several key pieces of legislation that attempt to balance the rights of employers and employees including the Charter of Rights and Freedoms; human rights legislation; employment standards legislation; occupational health and safety laws; collective bargaining agreements; and employment contracts. The judicial system and special regulatory bodies, such as human rights commissions/tribunals, provide forums for resolving differences between employers and employees.

II. Legislation Protecting the General Population Workplace practices are measured against general Canadian legislation that makes it illegal to discriminate, even unintentionally against members of various groups on prohibited grounds. .

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1. The Charter of Rights and Freedoms – Far-reaching federal law, enacted in 1982, applies to the actions of all levels of government and to agencies under their jurisdiction. The Charter provides fundamental rights and freedoms to every Canadian, including the equality rights found in Section 15, that provide the basis for more specific human rights legislation.

2. Human Rights Legislation – Prohibits intentional and unintentional discrimination on prohibited grounds in employment situations and the delivery of goods and services. Human rights legislation takes its cue from Section 15 of the Charter, but differs in that it applies to every person residing in Canada and is jurisdiction specific; i.e., legislation can vary from province to province/territory. Human rights legislation cannot be superseded by employment contracts.

3. Discrimination Defined – Because discrimination nullifies or impairs human rights, both intentional (direct or indirect) and unintentional discrimination are illegal. Forms of intentional discrimination include differential or unequal treatment or discrimination because of association (friendship or other relationship with a member of a protected group).

Unintentional/constructive discrimination, also known as systemic discrimination is often harder to detect as it is embedded in policies and practices that appear neutral Permissible Discrimination via Bona Fide Occupational Requirements – A bona fide occupational requirement (BFOR) is a justifiable reason for discrimination based on business necessity (that is, the discrimination is required for the safe and efficient operation of the organization) or a requirement that can be clearly defended as intrinsically required by the tasks an employee is expected to perform. Discrimination via a BFOR is permitted when reasonable accommodation through adjustment of employment policies or practices is not feasible.

The three criteria for assessing the legality of a BFOR, as established by the Meiorin case (Supreme Court of Canada, 1999) are:  The discriminatory policy/procedure was based on a legitimate, work-related purpose  Decision makers/agents believed the requirement was necessary for the role  It was impossible to accommodate employees who could not meet the requirement without undue hardship on the employer.

4. Human Rights Case Examples - The three most common types of complaints ( see Figure 2.3 (p.

26)) heard by the Canadian Human Rights Commission relate to discrimination and/or failure to accommodate based on:  Disability (roughly 60%) - for duty to accommodate disabilities  Race or ethnicity (roughly 15%)  National or ethnic origin (roughly 16%) Other human rights cases have involved complaints in regards to religion, sexual orientation, age and family status. Sound anti-harassment policies (see p. 34) when communicated to all employees and enforced fairly and consistently, can help to create a harassment free workplace.

Legislative systems in Canada allow for multiple opportunities for appeal; if HR and managers take a proactive approach to ensuring that all programs and policies are legally defensible, then the risk of becoming involved in lengthy and expensive human rights proceedings can be mitigated.

5. Enforcement – Responsibility for enforcement of the human rights acts and providing a speedy and accessible mediation process for dispute resolution falls on the human rights commission/tribunal in each jurisdiction. These regulatory bodies are also responsible for bearing the costs of human rights complaints brought forward, to ensure financial resources are not an obstacle for potential complainants. Employers have a duty to investigate all claims of discrimination, starting with selection of a workplace investigator (see Figure 2.5, p. 36) .

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Three other obligations of employers’ include  showing awareness of discrimination/harassment issues prior to the complaint  taking prompt action after the complaint is filed  demonstrating reasonable resolution and communication in regards to the complaint.

Two forms of remedies if discrimination is found by the commission/tribunal are systemic and restitutional.

III. Employment Equity Legislation The Charter of Rights and Freedoms also permits proactive programs that go beyond human rights legislation, in order to remedy pervasive discrimination against four identifiable groups, and for whom the complaint-based reactive process was insufficient in changing patterns of discrimination over time.

Employment equity programs are not affirmative action (quotas); their goal is to achieve a balanced representation of designated group members in the organization at all levels.

The Plight of the Four Designated Groups  Women – issues include occupational segregation, glass ceiling (see Figure 2.6, p. 37) and equal pay for equal work  Aboriginals – concentrated in low-skill, low paid jobs; unemployment rate is significantly higher and income significantly lower than non-Aboriginals **NOTE: Preferred word is Indigenous – not Aboriginal**  People with Disabilities – employment opportunities are lower than non-disabled and employment income lags that of non-disabled  Visible minorities – not to be confused with immigrant; visible minorities are defined as all nonCaucasian/non-white persons, other than Aboriginals. Key issue is underemployment relative to their knowledge, skills, and abilities.

IV. Employment/Labour Standards Legislation Employment (labour) standards legislation covers all employers and most employees in Canada, both unionized and non-unionized. Employment standards acts set minimum terms and conditions, which can be exceeded by employers, but which cannot be waived by employers or employees. In the case of an employment contract/collective bargaining agreement that exceeds the ESA, the principle of greater benefit will apply i.e., employers cannot revert back to the ESA. Enforcement - Complaints of violation of the ESA by employees against employers must be submitted to the Ministry of Labour within pre-set time limits; fines and restitution up to maximum limits. Employees cannot sue in civil court if they file a claim with the Ministry.

Teaching Tip: Students often find the multiple jurisdictions in Canada involved in HR to be quite confusing, it is often helpful if they know of differing regulations in different provinces regarding other aspects of life, such as drinking age as an analogy.

V. Respecting Employee Privacy The Privacy Commissioner of Canada and the provincial Information and Privacy Commissioners seek to balance employees’ rights to privacy with employers’ rights to monitor employee activity and protect company resources. New legislation and guidelines continue to clarify what is and isn’t acceptable. .

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The Personal Information Protection and Electronic Documents Act (PIPEDA) – governs collection, use, and disclosure of personal information. Employees must give consent for collection, use and dissemination of personal information.

Video Surveillance – Companies must be able to show that reasonable alternatives to surveillance were not available.

Teaching Tips; Break up the material and shift to active learning by incorporating mini- discussions based on a combination of the Industry Viewpoint Box, Ethical Dilemmas, and Critical Thinking Questions for this chapter and using provincial human rights websites to look at current trends and cases. Ask students to bring in/share related news stories and/or experiences. Many students know someone who has experienced discrimination, despite legislation.

ETHICAL DILEMMAS Your company president tells you not to hire any gay or lesbian employees to work as part of his office staff because it would make him uncomfortable. What would you do? (p. 35) What you cannot do is follow this order because it is illegal to discriminate on the basis of sexual orientation. You need to educate the President on the law and the potential consequences of violating the law. Depending on your position you can address the President directly or obtain assistance from senior HR people as well as the Canadian and appropriate provincial Human Rights websites.

Is it ethical to use video surveillance of employees? Do you think employees need to be told of surveillance tools if they are used? (p. 42) It is ethical if it is a business necessity and there is no other reasonable means available; such is the case with casinos. However, Canadian courts have typically decided that video surveillance is not reasonable in most workplaces and that other means of control could have been used. Employees must be made aware of how they are being monitored, and must give consent if there is any possibility that personal and private information might be collected as a result of monitoring.

KEY TERMS bona fide occupational requirement (BFOR) A justifiable reason for discrimination based on business necessity (that is, the discrimination is required for the safe and efficient operation of the organization) or a requirement that can be clearly defended as intrinsically required by the tasks an employee is expected to perform (p. 28) Charter of Rights and Freedoms Federal law enacted in 1982 that guarantees fundamental freedoms to all Canadians. (p. 25) differential or unequal treatment Treating an individual differently in any aspect of terms and conditions of employment based on any of the prohibited grounds. (p. 28) disability A protected ground in human rights legislation, including a wide range of conditions, some which are visible and some which are not. A disability may be present from birth, be caused by an accident, or develop over time (p. 30) discrimination As used in the context of human rights in employment, a distinction, exclusion, or preference, based on one of the prohibited grounds, that has the effect of nullifying or impairing the right of a person to full and equal recognition and exercise of his or her human rights and freedoms. (p. .

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27) discrimination because of association Denial of rights because of friendship or other relationship with a protected group member. (p. 28) employment (labour) standards legislation Laws present in every Canadian jurisdiction that establishes minimum employee entitlements and a limit on the maximum number of hours of work permitted per day and/or per week. (p. 39)

employment equity program A detailed plan designed to identify and correct existing discrimination, redress past discrimination, and achieve a balanced representation of designated group members in the organization. (p. 37) equal pay for equal work An employer cannot pay male and female employees differently if they are performing the same or substantially similar work. (p. 38) equality rights Section 15 of the Charter of Rights and Freedoms, which guarantees the right to equal protection and equal benefit of the law without discrimination. (p. 25) glass ceiling An invisible barrier, caused by attitudinal or organizational bias, which limits the advancement opportunities of qualified designated group members. (p. 37) harassment Unwelcome behaviour that demeans, humiliates, or embarrasses a person, and which a reasonable person should have known would be unwelcome. (p. 32) human rights legislation Jurisdictions’ specific legislation that prohibits intentional and unintentional discrimination in employment situations and in the delivery of goods and services (p. 26) KSAs Knowledge, skills, and abilities. (p.39) occupational segregation The existence of certain occupations that have traditionally been maledominated and others that have been female-dominated. (p. 37) precedent The decision or interpretation of a court of another jurisdiction can act as a persuasive authority regarding how legislation is to be interpreted and applied in other jurisdictions (p. 23) reasonable accommodation The adjustment of employment policies and practices that an employer may be expected to make so that no individual is denied benefits, disadvantaged in employment, or prevented from carrying out the essential components of a job because of grounds prohibited in human rights legislation. (p. 29) regulations Legally binding rules established by the special regulatory bodies created to enforce compliance with the law and aid in its interpretation. (p. 24) restitutional remedies Monetary compensation for the complainant to put him or her back to the position he or she would be in if the discrimination had not occurred (this includes compensation for injury to dignity and self-respect), and may include an apology letter. (p.34) sexual annoyance Sexually-related conduct that is hostile, intimidating, or offensive to the employee, but has no direct link to tangible job benefits or loss thereof. (p. 33) .

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sexual coercion Harassment of a sexual nature that results in some direct consequence to the worker's employment status or some gain in or loss of tangible job benefits. (p. 33) sexual harassment Offensive or humiliating behaviour that is related to a person’s sex, as well as behaviour of a sexual nature that creates an intimidating, unwelcome, hostile, or offensive work environment, or that could reasonably be thought to put sexual conditions on a person’s job or employment opportunities. (p. 33)

stare decisis Decisions of a higher court can act as the binding authority on a lower court decision within that same jurisdiction. systemic remedies Forward looking solutions to discrimination that require respondents to take positive steps to ensure compliance with legislation, both in respect to the current complaint and any future practices. (p. 36) tort law Primarily judge-based law, whereby the precedent and jurisprudences set by one judge through his or her assessment of a case establishes how similar cases will be interpreted, as either intentional torts or unintentional torts. (p. 24) underemployment Being employed in a job that does not fully utilize one’s knowledge, skills, and abilities (KSAs). (p. 39) undue hardship The point to which employers are expected to accommodate under human rights legislative requirements. (p. 29) unintentional/constructive/systemic discrimination Discrimination that is embedded in policies and practices that appear neutral on the surface, and are implemented impartially, but have adverse impact on specific groups of people for reasons that are not job related or required for the safe and efficient operation of the business. (p. 28) REVIEW AND DISCUSSION QUESTIONS (p. 44) 1. Explain how the legal system in Canada is different than the legal system in the United States.

Three significant differences between Canadian employment legislation/regulation and the US National Labor Relations Act are: 

A higher acceptance by Canadians of government-mandated regulations for organizations



“Employment at will” whereby the employer or the employee can break the employment relationship without notice does not exist in Canada. Employers must provide reasonable notice if terminating employees without cause and employees must comply with employment legislation if they quite, strike, or otherwise cease employment



In contrast to the largely centralized employment legislation model in the USA, the primary responsibility for employment-related laws resides with the provinces and territories; provincial/territorial employment laws govern approximately 90% of Canadian workers

Teaching Tip: The comparison to the US legislation is not specifically given in the text but many students assume that the regulations are the same, or alternatively, that a US based employer is governed by US regulations in Canada. This question can be used to have students research some of the difference in .

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legislation between Canada and the US. 2. Describe the impact of the Charter of Rights and Freedoms on HRM. (p.25) Although the Charter of Rights and Freedoms (1982), applies directly only to the actions of all levels of government (federal, provincial/territorial, and municipal) and agencies under their jurisdiction, all Canadian legislation, including provincial legislation, must meet Charter standards in terms of ensuring equality of opportunity. Therefore the Charter impacts HR in all Canadian organizations through its influence on human rights legislation and employment- specific legislation, such as Employment Standards Acts, health and safety laws, union relations, and laws governing pensions and compensation.

In particular, Section 15 of the Charter – Equality Rights prohibits discrimination on the basis of race, national or ethnic origin, colour, religion, sex, age, or mental or physical disability provides the foundation for human rights legislation. Human rights legislation has extended this protection to other grounds, such as sexual orientation, family status and marital status.

3. Differentiate between the following types of discrimination, and provide one example of each: direct, differential treatment, indirect, because of association, and systemic. (p. 27 – 28) Direct (intentional) discrimination involves an employer deliberately denying an individual or group fair treatment in any term, aspect, or condition of employment on the basis of one of the prohibited grounds. An example would be a company refusing to hire, train, or promote an individual based because they are female, or Chinese, or are in a wheelchair.

Differential treatment involves treating individuals or groups differently in any aspect, term, or condition of employment based on one of the prohibited grounds. For example, it is illegal for an employer to request that job applicants with an obvious physical disability undergo a pre-employment medical examination if those appearing able-bodied are not also asked to undergo such an exam, or to offer training to younger workers and not to older workers.

Indirect discrimination involves asking another party to discriminate on one’s behalf. An example would be an employer requesting an employment agency to refer only female candidates for consideration as nurses, or instructing supervisors that female managers be excluded from consideration for international assignments.

Discrimination because of association is another possible type of intentional discrimination. It involves the denial of rights because of friendship or other relationship with a protected group member. An example would be the refusal of a firm to promote a highly-qualified male into senior management on the basis of the assumption that his wife, recently diagnosed with multiple sclerosis, will require too much of his time and attention, and that her needs may restrict his willingness to travel on company business.

Unintentional discrimination (also known as constructive or systemic discrimination) is the most difficult to detect and combat. Typically, it is embedded in policies and practices that, although appearing neutral on the surface, but, when implemented, have adverse impact on specific groups of people. The outcome is discrimination based on prohibited grounds. Many examples of systemic discrimination can be found in Figure 2.3 on p. 32.

4. Provide five examples of prohibited grounds of discrimination in employment in Canadian jurisdictions. (p. 26, 30 – 37) Prohibited grounds of discrimination vary across jurisdictions. Race, colour, age, sex, marital/family .

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status, religion/creed, physical and mental handicap, ethnic/national origin are prohibited grounds.

Five of the grounds are described with examples.

Race/Colour – The British Columbia Human Rights tribunal found that two construction companies had discriminated against 38 Latin American temporary workers by paying them lower wages and providing inferior accommodation compared to European temporary workers on the same project.

Sexual Orientation – A lesbian employee alleged that she was harassed by a co-worker, due to her sexual orientation. She made a complaint with her supervisors but felt the complaint was not investigated properly. She alleged that she was given a poor performance review because of her complaint and that her request for a transfer to another work site was denied.

Religion – It is a violation of human rights legislation to prohibit Muslims from praying at work and/or wearing a hijab (the head-to-ankle covering that leaves only the face, hands, and feet visible in public.

Age – In an Ontario case two older foremen were laid off with retirement packages while two younger foremen were allowed to keep their jobs. This is a violation as human rights legislation does not permit discrimination by age, except for legally mandated minimum age requirements.

Family Status – Companies cannot favour individuals without parenting responsibilities over individuals without parenting responsibilities in hiring, promotion or access to training, and career development. At the same time, pay decisions cannot favour employees with dependents over those without dependents.

5. Explain the purpose of employment standards legislation, and the concept of “the greater good” when assessing these minimums. (p. 39 – 41) Employment Standards Acts establish minimum terms and conditions for workplaces, covering such things as wages, paid holidays and vacations, maternity, paternity or adoption leave, bereavement leave, compassionate care leave, termination notice, and overtime pay. They also set the weekly and daily maximum hours of work before overtime pay is required. These standards ensure consistency and a minimum level of fair treatment across organizations. The concept of the “greater good” or “greater benefit” means that if an employment contract is more generous than the minimum term/condition in ESA, then the contract has to be honoured. The employer cannot revert back to the minimum.

6. Define "sexual harassment" and describe five types of behaviour that could constitute such behaviour. (p. 33) Sexual harassment is offensive or humiliating behaviour that is related to a person’s sex, as well as behaviour of a sexual nature that creates an intimidating, unwelcome, hostile, or offensive work environment, or that could reasonably be thought to put sexual conditions on a person’s job or employment opportunities. Two types of sexual harassment are sexual coercion, which results in some direct consequence to the worker's employment status or some gain in or loss of tangible job benefits, and sexual annoyance, sexually-related conduct that is hostile, intimidating, or offensive to the employee, but has no direct link to tangible job benefits or loss.

Five types of behaviour that would fall under sexual harassment are:  asking/requiring sexual favours in return for favourable performance ratings, pay, and job security (sexual coercion)  unwanted touching (sexual coercion/sexual annoyance)  making sexist comments (sexual annoyance)  displaying pornographic material (sexual annoyance) .

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telling sexist jokes (sexual annoyance)

7. Define the concepts of occupational segregation, underemployment, and the glass ceiling. (p.

37, 39) Occupational segregation – the existence of certain occupations that have traditionally been maledominated and others that have been female-dominated, often due to sex-based discrimination Underemployment - Being employed in a job that does not fully utilize one’s knowledge, skills, and abilities (KSAs).

Glass ceiling – an invisible barrier, caused by attitudinal or organizational bias, which limits the advancement opportunities of a qualified designated group member. Applies not just to females but also to visible minorities, Aboriginals and the disabled 8. What is the test to define if a bona fide occupational requirement exists? What are the three elements of this test? (p. 28-29) The three criteria for assessing the legality of a BFOR, as established by the Meiorin case (Supreme Court of Canada, 1999) are:   

The discriminatory policy/procedure was based on a legitimate, work-related purpose Decision makers/agents believed the requirement was necessary for the role It was impossible to accommodate employees who could not meet the requirement without undue hardship on the employer.

9. What is the role of privacy legislation in Canada? Describe the act that protects employee’s privacy. (p. 41 – 42) The Privacy Commissioner of Canada and the provincial Information and Privacy Commissioners seek to balance employees’ rights to privacy with employers’ rights to monitor employee activity and protect company resources. The Personal Information Protection and Electronic Documents Act (PIPEDA) – governs collection, use, and disclosure of personal information. Employees must give consent for collection, use and dissemination of personal information.

Critical Thinking Questions (p. 44) 1. Go to your provincial or territorial employment (labour) standards website and determine the following:  Minimum legal age to work in this jurisdiction  Minimum hourly wages  Maximum number of hours that can be worked in a week before overtime must be paid 2. How does this information apply to you and your friends and family? Did you notice anything else that caught your interest that you were previously unaware of?

The information they obtain should tell them who in their social group should/should not be working and how much individuals of different ages should be paid. Typically there is a minimum wage rate for teenage workers and higher rate for adult workers. The information can tell them whether they are being paid fairly by their employer when it comes to overtime. Something they may not have realized is that age discrimination is permitted when it comes to wages – teenagers can be paid less than older workers doing the same job e.g., McDonalds, Tim Horton’s in some jurisdictions. .

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3. Prepare a report outlining legally acceptable questions that may be asked at a selection interview with a young female engineer applying for the job of engineering project manager at an oil field in rural northern Alberta with an otherwise all male group. (Refer to appendix 5.1 on page for help).

In their report they should not have any questions that they would not ask of a male engineer to avoid differential treatment and avoid any questions that bring prohibited grounds into play. This would exclude questions about being the only female in a male group, concerns about managing a group of men, or questions about pregnancy. Legally acceptable questions would include questions about eligibility to work in Canada, interest/experience living in a rural or northern setting, interest/experience as a project manager, and interest/experience in the oil field industry.

4. Working with a small group of classmates, use Statistics Canada to find updated information regarding labour market outcomes for one of the four protected groups in Canada. Based on your research, what inequities exist for the group you selected? What are some direct and indirection organizational decisions or actions that can possibly explain these inequities? What legislation(s) provides protection for people in your selected designated group?

There will be a very large variety of reports generated!!

5. The organization you are working for is relatively new and growing, and has no HR department. They have asked you to prepare a briefing about what can and cannot be asked during an employment interview. Given that it is a small organization, management usually conducts interviews. You notice a number of managers huffing about how the law doesn’t apply to them and their actions can’t result in a lawsuit. In addition to preparing a briefing about the types of question that can and cannot be asked in an interview, prepare a response to the perception that the law does not apply to the managers in this situation.

Their briefing about employment interview questions should draw on appendix 5.1 on page 141 and the discussions of prohibited grounds and protected groups. In response to the perception that the law does not apply they can reference the 1989 sexual harassment case where the Supreme Court held that employers are liable for the actions of their employees. Therefore, while employees may not sue managers directly, lawsuits can be filed by employees against the company based on the actions of these managers; if this occurs then the manager’s employment and career prospects will certainly be affected.

They should also be made aware that claims can also be filed through human rights commissions/tribunals and managers will be called to testify in regards to the complaint. In short, they are not untouchable. Looking up recent cases in which managers were demoted or lost their jobs because of discriminatory actions should get their attention.

Experiential Exercises (p. 45) 1. You are an HR manager at a women-only fitness centre. The owner has just informed you that he or she would like to only employ women trainers and staff, to accommodate the demands of clientele (some clients prefer this gym over a co-ed one for religious or personal comfort reasons). Do you think this is a BFOR? How would you handle men who apply for the position? How will you ensure a legally defensible position for this company? (p. 30 - 33) In order to make sure any BFOR is legally defensible the owner needs to be advised of the 3 tests that any BFOR has to meet.  

The discriminatory policy/procedure was based on a legitimate, work-related purpose Decision makers/agents believed the requirement was necessary for the role .

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It was impossible to accommodate employees who could not meet the requirement without undue hardship on the employer.

As part of this discussion, attempts should be made, with external assistance if necessary to determine more precisely what the minimum strength requirement is rather than just set an arbitrary number.

This can be done by weighing sample boxes and furniture and having current employees assess what minimum standard is reasonable, based on their past moving experience.

2. An employee who has been off for 2 months with a stress-related ailment has just contacted you, indicating that she would like to return to work next week but won’t be able to work full time for another month or so. How would you handle this situation? (p. 30 – 32) The organization’s responsibility is to accommodate this individual, because medical disabilities are prohibited grounds for discrimination, and stress-related disabilities have been validated as medical disabilities. Their disability appears to already have been documented previously in order to support the two month leave, but an update from their doctor may be necessary in considering possible solutions.

Reasonable accommodation requires that a range of possible options are discussed, not just the one that the employee would like to have. If the issue is travelling to and being in a busy setting full-time, then, depending on the nature of their job working part-time from home and part-time in the office might be the solution. If the issue is that they are not yet ready for full day work, regardless of location, then a reduced hour schedule can be negotiated, either a few hours every day or a couple of full-time days per week. Financial support can come from a combination of paid hours, partial sick-pay, and possible partial government assistance programs. The employee should not be financially disadvantaged by returning to work.

3. A supervisor has just approached you to indicate a concern she has with an employee. The supervisor indicates that the employee is often surfing the Internet while at work and fears that not only is this affecting productivity negatively, but is also a violation of the company’s rules for Internet surfing using a company computer. The supervisor would like you to ask the IT team to investigate how many hours a day are logged to non-work – related activities for that employee and also ask for a list of websites that the employee visits. What is the role of privacy legislation from the employer and employee perspectives? What additional information would you need to make a decision about next steps? What recommendations can you make to the supervisor to deal with the situation in the short term?

Under privacy legislation the employer has the right to monitor employee activities, including the use of information technology, in order to run a successful business and prevent against abuse of company resources. On the other hand, employees have the right to privacy, possibly they are surfing only on their lunch break in which case company time is not being wasted and are not gaming but are looking up highly sensitive information on a medical or personal issue for themselves or family member, that is causing them to be distracted and their work to suffer as a result. They may also be using the Internet for work-related reasons e.g., using professional/technical online forums, so time spent on work-related is often difficult to pin down.

The IT team cannot be sent on “fishing” expeditions unless employees have given consent to be monitored because of the risk of personal information being collected directly or indirectly from websites visited. In order to be on solid ground the company policy should be reviewed to make sure it is specific and records should be checked to ensure that the employee was made aware of the company policy on use of company computers for Internet surfing, on a regular basis. This can be established by checking employment contracts, signed declarations from company handbooks and Code of Ethics, and finding out .

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when the policy was last emailed to employees or discussed in an employee meeting.

Last, but not least, the traditional approach of sitting down with the employee and asking them why their productivity seems to have dropped lately should definitely be pursued. Maybe they are wrestling with a personal issue or are bored with their job, or are feeling overwhelmed by the job demands but are reluctant to ask for assistance. Data obtained from electronic monitoring can help support a case for sanctions but cannot get to the root of why the employee is not working as expected. Having a meeting may cause an immediate change in employee behaviour without the need for electronic review.

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PART TWO: MEETING HUMAN RESOURCES REQUIREMENTS CHAPTER 3 DESIGNING AND ANALYZING JOBS

LEARNING OUTCOMES EXPLAIN the steps in job analysis and the difference between a job and a position.

DESCRIBE the evolution of job design and how organizational structure influences job design.

EXPLAIN the three reasons why competency-based job analysis has become more common.

DESCRIBE and evaluate multiple methods of collecting job analysis information.

EXPLAIN the difference between a job description and a job specification.

CHAPTER SUMMARY Job analysis is the procedure for determining the tasks, duties, and responsibilities of each job, and the human attribute (in terms of knowledge, skills, and abilities) required to perform it. The process of organizing work into the tasks required to perform a specific job is known as job design. The specific collection of tasks and responsibilities held by just one person is known as a “position”.

There are six steps involved in the job analysis process: collection of background information; selection of representative jobs/positions; data collection; data review, development of job descriptions and job specifications, communication and on-going review. Relevant information is obtained from incumbents, supervisors and other credible sources using one or more primary or secondary techniques.

Competency-based job analysis, which focuses more on required behaviours rather than task requirements, has become more common for three reasons: flexible jobs; strategic HR focus, better support for performance management processes.

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LECTURE OUTLINE I.

FUNDAMENTALS OF JOB ANALYSIS

A job is a group of relations activities and duties held by a single employee or a number of incumbents, whereas a position the collection of tasks and responsibilities performed by one person. The procedure for determining the tasks, duties, and responsibilities of each job, and the human attributes (in terms of knowledge, skills, and abilities) required to perform it is known as job analysis. Job analysis is a fundamental component of HRM and a cornerstone that is critical to other organizational activities related to labour and work processes.

1. Seven Uses of Job Analysis Information The information gathered, evaluated and summarized through job analysis, results in job descriptions (what the jobs entails) and job specifications (human requirements), which, in turn, act as the basis for a number of inter-related HRM activities (see fig. 3.1 p. 49) a. Human Resource Planning – future staffing needs, external versus internal recruitment b. Talent Aquistion– bona fide occupational requirements, legally compliant activities c. Compensation- job evaluation, relative value of jobs, pay differences, overtime and maximum hours pay d. Performance Management – legally defensible performance criteria, realistic and achievable performance standards e. Labour Relations – union approval, job classification, collective bargaining, negotiation of changes to job descriptions f. Training, Development, and Career Management – identification of current and future KSA gaps g. Restructuring – identification of unnecessary requirements, areas of conflict/dissatisfaction, health and safety concerns 2. Six Steps in Job Analysis A disciplined process aids in ensuring higher rather than lower quality job descriptions and job specifications, whether jobs are being analysed on a continuous basis or on an ad hoc (as needed) basis. In order, the six steps are: a. Relevant organization information is reviewed. b. Jobs are selected to be analysed. c. Using one or more job analysis techniques, data are collection on job activities. d. The information collection is then verified and modified, if required. e. Job descriptions and job specifications are developed based on the verified information. f. The information is then communication and updated on an as-needed basis

STEP 1: REVIEW RELEVANT BACKGROUND INFORMATION Step 1 includes the review of relevant background information, such as organization charts, process charts, and existing job descriptions. Organization charts (see Fig. 3.2, p. 50) reflect an organization’s structure (the formal relationship among jobs in an organization), by showing how jobs are grouped into departments and/or divisions. Structure reflects choices as to managerial span of control, narrow versus broad employee responsibility, and centralized versus decentralized decision-making.

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An organization’s structure should fit its strategic goals; three possible structures are bureaucratic, flat, and matrix (see Figure 3.3, p. 51). While the tendency is often to focus immediately on the micro-level details of the job, a strategic HR approach requires that job analysts understand where the job fits in the larger organization, and how the structure and distribution of work can provide strategic advantage over competitors, facilitate achievement of strategic goals in an efficient and effective manner, and produce a motivated and engaged workforce.

In contrast to the macro-level review, process charts show the flow of inputs to and outputs from the job under study (see Fig. 4.5, p. 83), and help to identify interdependencies between jobs and between jobs and external organizations.

STEP 2: SELECT JOBS TO BE ANALYZED The next step involves the selection of representative positions and/or jobs to be analyzed.

Analyzing representative jobs avoids the need to analyze every single position and job. At the same time jobs are chosen for analysis, job design also becomes a consideration. Job design is Is the process of improving organizational efficiency and employee satisfaction through technological and human considerations. Effective job design reflects fit with an organization’s strategy and structure, and takes into account human and technological factors. Over time the notion of a “job” as a set of well-defined and clearly delineated responsibilities has been eroded by a set of external challenges that require firms to be more responsive, flexible and competitive.

1. The Evolution of Jobs and Job Design The notion of “job” arose out of the efficiency demands of the Industrial Revolution, scientific management and industrial engineering, in which job design was tightly focused on work simplification. However, by the mid-1900s the “dehumanizing aspects of highly repetitive and specialized jobs led to a shift to a broadening of the activities employees engaged in. Three specific methods for redesigning jobs are job enlargement (horizontal loading), job rotation, and job enrichment (vertical loading); although not every employee wants additional responsibilities and challenges. By the late twentieth century, job designers also consider physiological and health and safety issues in addition to psychological needs. The field of ergonomics aims to adapt the entire job system – work, environment, machines, equipment, and processes – to match human characteristics.

2. Competency-Based Job Analysis In high-performance work environments, employers need workers to seamlessly move from job to job and exercise self-control, rather than be closely supervised. In order to enable more flexible behaviour, employers are shifting toward newer approaches for describing jobs, such as competencybased analysis. Competency-based job analysis means describing the job in terms of the measurable, observable, behavioural competencies (knowledge, skills, or behaviours) that an employee must exhibit in order to do the job well. a. Three reasons to use competency analysis are: i. Traditional job descriptions with lists of specific duties breed an “it’s not my job attitude” rather than learning and self-motivation ii. Competencies provide a tighter linkage to the organization’s strategy iii. Performance management processes are more transparent; competencies clearly identify the basis for training, performance appraisal, and rewards.

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b. Examples of competencies When describing jobs from a competency perspective, managers often cluster specific competencies into clusters (e.g. general or core competencies; leadership competencies; and technical/task/functional competencies).General competencies include reading, writing, mathematical reasoning, whereas leadership competencies focus on strategic thinking and teaching others. While general and leadership competencies may appear across many different jobs, technical/task/functional competencies are more specific to a particular type of job or occupation e.g. engineer, accountant, produce manager. c. Comparing traditional versus competency-based job analysis Competency-based duties and responsibilities are already appearing in otherwise traditional job descriptions (e.g. conducts marketing surveys on current and new-product concepts).

However, more specific duties and responsibilities resist being written from a competency perspective because they are not as readily observable or measurable e.g. oversees (e.g. oversees copywriting, design, layout, and production). For this reason, job descriptions will probably continue to reflect a combination of the competency-based and traditional approaches.

3. Team-Based Job Designs A logical outgrowth of job enrichment has been the increasing use of team-based job designs, in flat and matrix structure organizations. Teams are responsible for a whole and meaningful piece of work. Team members are empowered to decide how to accomplish the work and are cross- trained to facilitate job rotation. Team-based job designs can break down barriers of time and space, through the formation of virtual teams composed of members in different locations who collaborate through technology.

II. IV: STEP 3: COLLECTING JOB ANALYSIS INFORMATION Various qualitative and quantitative techniques are used to collect information about the duties, responsibilities, and requirements of the job; several techniques are often used in combination.

Collecting data involves a joint effort by an HR specialist (an HR manger, job analyst, or consultant), the incumbent (someone who currently works in this job), and the job-holder’s supervisor. After the data is collected, the HR specialist develops the job description and job specification, which is then reviewed by the supervisor and incumbent.

1. The Interview Interviewing incumbents, supervisors and other subject matter experts is the most widely used method of determining duties and responsibilities of a job. The three types of job analysis interviews are individual, group, and supervisory.

Interview Guidelines i. Identify knowledgeable and objective employees ii. Build rapport with chosen individuals iii. Use a structured guide/checklist iv. Rank activities in terms of importance and frequency of occurrence v. Have the interviewee and immediate supervisor review the data Copyright © 2019Pearson Canada Inc.

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2. Questionnaire There are two major questions around the use of questionnaires; first, how structured should they be and what questions to ask, and second, who should complete the questionnaire. Two popular predeveloped structured job analysis questionnaires are the Position Analysis Questionnaire (PAQ) and the Functional Job Analysis (FJA) questionnaire. The PAQ contains 194 items) and provides a quantitative score and profile of how the job rates on six basic dimensions (information input, mental processes, work output, relationships with others, job context, and other job characteristics). The PAQ is often used for classifying jobs in order to compare jobs and determine appropriate pay levels. The FJA is not quite as complex; the items rate a job on responsibilities for data, people and things on a scale from simple to complex. The FJS facilitates development of performance standards and also training requirements.

3. Observations Observation means watching employees perform their work and recording the frequency of behaviours or the nature of performance. It can be done in an unstructured or structured format.

Observation is particularly beneficial when jobs consist mainly of observable physical activities, less useful for jobs with substantial mental activity. However, observation can influence/change physical behaviour so data needs to be validated through another method (e.g. interview) 4. Participant Diary/Log Employees can be asked to keep a diary/log, which are daily listings of every activity in which they engage along with the time each activity takes. Diaries/logs provide rich detail and keeping track of time helps to prevent exaggeration/inflation of tasks.

5. The National Occupational Classification For standardized jobs, HR specialists and managers/supervisors can turn to the National Occupational Classification (NOC), which is a reference tool f or writing job descriptions and job specifications. Compiled by the federal government, it contains comprehensive, standardized descriptions of about 30,000 occupations organized into 500 Unit Groups according to the 4 skill levels and ten skill types. The NOC facilitates the writing of job descriptions and specifications because it contains comprehensive standardized descriptions of about 40 000 occupations and the requirements for each (see Fig. 3.5, p. 61).

An occupation is a collection of jobs that share some or all of a set of main duties; jobs may have different titles but similar content. Occupations are classified into Major, Minor, and Unit Groups. Major groups (2 digit identifier) are the broadest classification and are based on two key dimensions – skill level and skill type Minor groups (3 digit identifier) subdivide the main classification, and Unit Groups subdivide the minor group classification, proving the most specific profile of an actual occupation.

Example: Administrative and financial supervisors and administrative occupations (12), Administrative and regulatory occupations (122, Human resources and recruitment officers (1223) Companies who use the NOC should be prepared to: a.

Adjust information based on their organizational strategy and structure b.

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Verify the information (see Step 4 in the text and Lecture Outline)

6. Using Multiple Sources of Job Analysis Information Each source (incumbent, supervisor, subject matter expert) and each method/approach (interview, questionnaire, observation, diary/log, NOC) has its drawbacks. Therefore, a prudent approach is to collect data from several sources and possibly using more than one method.

Teaching Tip: Ethical Dilemma, p. 62 is a good fit for probing into the pros and cons of multiple sources in terms of perceived competence, reactions from original respondent, use of technology in job analysis

STEP 4: VERIFYING INFORMATION Errors and/or omissions can occur in the process of collecting job analysis data; verification with workers and supervisors can help to catch and rectify factual errors and ensure completeness. Later on, respondents may have recalled details that are not in the information they originally provided. Taking time for verification can increase both reliability and validity, and increases the chances that respondents will be truthful the first time round, knowing their answers will be verified.

STEP 5: WRITING JOB DESCRIPTIONS AND JOB SPECIFICATIONS 1. Job Descriptions A job description is a list of the duties, responsibilities, reporting relationship, and working conditions of a job – one product of job analysis. The job description answers the questions about what the jobholder does, how they do it and under what conditions the job is performed. There isn’t agreement on a single standard format, but most job descriptions include the following types of information: Content of a job description: Job identification – job/position title, department, location, to whom the job reports And administrative information such as job classification, code, location and pay band a. b. Job summary – major functions and activities c. Relationships - internal and external linkages, includes subordinates if appropriate d. Duties and responsibilities – more detailed list of duties & responsibilities, avoid “cop- out” clauses such as “other duties as assigned” e. Working conditions and physical environment – noise level, temperature, lighting, degree of privacy, frequency of interruptions, hours of work, amount of travel, and job/workplace hazards Special note: Job descriptions and human rights legislation Job descriptions are not legally required but are highly advisable. Job descriptions distinguish between essential versus non-essential tasks. This distinction is important because discrimination and/or failure to provide reasonable accommodation, for reasons related to prohibited grounds, applies only to essential tasks. The process of preparing a job description provides an opportunity to assess whether there are any existing biases in terms

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of duties and responsibilities e.g. manual lifting when technology-aided lifting could work just as well 2. Job Specifications The job specification is the other major product of job analysis, and clarifies what type of person can fulfil the duties and responsibilities identified in the job description, in terms of required human traits and experience. Identifying human requirements can be accomplished through a judgemental approach (educated guesses by job incumbents, supervisors, and HR managers) or statistical analysis (quantitative relationship between some human trait or skill and some criterion of job effectiveness). The latter is more legally defensible, especially for traits such as personality. The Personality-Related Position Requirements Form (PPRF) identifies which of the basic personality dimensions (agreeableness, conscientiousness, emotional stability) relate to the job under study.

Teaching Tip: Have students identify 2 or 3 occupations where a higher level of each personality trait would be desirable and conversely 2 or 3 occupations where a lower level of each trait would be ideal.

To ensure compliance with human rights legislation, keep a few pointers in mind when preparing job specifications.  All listed qualifications must be bona fide occupational requirements (BFORs) based on the current job duties and responsibilities.  Unjustifiably high educational or lengthy experience requirements can lead to systemic discrimination.  The qualifications of the current incumbent should not be confused with the minimum requirements, since s/he may be under-qualified or overqualified.  Identifying the actual physical and mental demands is critical for entry-level jobs (e.g. finger dexterity). A physical demands analysis identifies senses used (e.g. smell, touch, taste, hearing, sight) and the type, frequency, and amount of physical effort. Mental and emotional demands are often ignored, but should be included so that candidates can be tested on these characteristics (e.g. working in high-pressure environment) Teaching Tip: Discuss the trend towards “credentialization” (asking for more education than is really necessary for the job); Why is this is occurring and who is disadvantaged by this trend? a. Completing the job specification form Whether using a statistical analysis or a judgemental approach, a job specification form should be completed once the required human characteristics have been determined. b. Writing competency-based job descriptions The process for writing competency-based job descriptions and job specifications is similar to the traditional job analysis process

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STEP 6: COMMUNICATION AND PREPARATION FOR REVISIONS Information provided from the job analysis must be communicated to all relevant stakeholders (e.g. employees, line mangers, recruiters, and compensation specialists). However, job descriptions and job specifications need ongoing revision and communication, because significant organizational changes like restructuring, new product development, technological changes, and competition require modifications to the way work is done.

Job analysis needs to be structured enough to allow for modifications as required while still providing current and future employees with an understanding of what they are expected to do. Three approaches to updating are: a) regularly update the data (proactive); b) develop systems to collect data on an ongoing basis; and c) adjust job analysis activities in a reactive manner after a significant organizational change is initiated.

DISCUSSION BOXES ENTREPRENEURS & HR: A Practical approach to Job Analysis and Job Descriptions (p. 84) Small business owners need a streamlined approach to job analysis, because many lack an HR manager and don’t have access to a job analyst. The NOC can help to fill this gap if small businesses use the following process: develop an organization chart; use a short job analysis questionnaire to get basic information on each job; obtain a copy of the NOC and choose suitable (matching/related) job titles and job descriptions; use the information obtained internally to modify the standardized job description obtained from the NOC. ETHICAL DILEMMAS If a job analyst is on the other side of the world from an employee who completed a web- based job analysis questionnaire, should another method of job analysis also be used to confirm the accuracy of the information? Why? (p.62) If the company is global it is likely that there are similar jobs in both the home country and elsewhere, so the job analyst will not be completely unfamiliar with the job being analyzed.

However, because there might be employee bias in the questionnaire, it might be wise to use another method (e.g. interviews, diaries and logs, or group interviews) to verify the information. The analyst can also arrange for a similar job to be analyzed in their country to see if there are any material differences in how the job is designed in different countries. Technology can facilitate review and verification between employees and analysts who are in different countries.

Teaching Tip: Have students identify ways to establish rapport and build trust between the job analyst, the employee and their supervisor, using technology (e.g. Skype).

In view of the fact that job descriptions are not required by law, and that some organizations have found that they are no longer relevant, would abolishing job descriptions raise any moral or legal concerns? Give an example to support your viewpoint. (p. 63) A key advantage of having job descriptions is that they help to clarify employer expectations – for both the supervisor and employee. Leaving employees in the dark about expectations that Copyright © 2019Pearson Canada Inc.

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will be used in other HR practices is not illegal but might be viewed as immoral. Failure to have job descriptions could result in overlap in job duties and/or that some duties are not assigned to anyone.

Having an accurate description of each job sometimes leads to the identification of unnecessary requirements, areas of conflict or dissatisfaction, and/or health and safety concerns that can be eliminated through job redesign. Such redesign may increase morale and productivity, and ensure compliance with human rights and occupational health and safety legislation. Job descriptions and specifications are also the basis for a legally-defensible compensation system and for effective training, development, and career management programs (p. 48).

While job descriptions are not legally required, they are highly advisable. When assessing suitability for employment, training program enrolment, and transfers or promotions, and when appraising performance, the only criteria examined should be the KSAs required for the essential duties of the job. Having a job description also makes it easier to identify accommodation requirements, as required by human rights legislation.

Some supervisors and/or small-business owners are reluctant to introduce job descriptions, fearing that employees will refuse to perform tasks that are not specifically listed therein. However, in addition to the issues identified above, another important reason for preparing such descriptions relates to the fact that in some firms without them, employees might be expected to perform tasks that are clearly not job related. Preventing such abuse is one of the reasons why a “copy-out clause” such as “other duties, as assigned” should be avoided when job descriptions are prepared. As explained in the text, while duties and responsibilities should be described in sufficient detail so that training requirements and performance appraisal criteria can be identified, and the qualifications outlined in the job specification can be justified, it is generally possible to make it clear that the incumbent may be asked to perform additional related duties, without resorting to such a “cop-out clause.” If not, including a statement such as: “The duties and responsibilities outlined above are representative, but not all-inclusive” may meet the firm’s need for flexibility without sacrificing the quality and usefulness of the job description.

A Is it proper for an employer to use personality traits as part of the KSAs and the bona fide occupational requirements/essential duties of a job? Explain your reasoning. (p.65) Yes, they can be because KSAs capture the qualifications required to perform the job duties and responsibilities. For instance, sales positions tend to require higher, rather than lower, levels of extraversion. The Personality-Related Position Requirements Form can be used to collect data to show the relationship between extraversion, sales behaviours and sales performance. Similarly in other occupations other personality traits, such as emotional stability, can be verified as being BFOR’s.

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KEY TERMS competencies Demonstrable characteristics of a person that enable performance on the job. (p. 55) competency-based job analysis Describing a job in terms of the measurable, observable behavioural competencies an employee must exhibit to do a job well. (p. 56 ) diary/log Daily listings made by employees of every activity in which they engage, along with the time each activity takes. (p. 60 ) ergonomics An interdisciplinary approach that seeks to integrate and accommodate the physical needs of workers into the design of jobs. It aims to adapt the entire job system – the work, environment, machines, equipment, and processes – to match human characteristics. (p. 54 ) Functional Job Analysis (FJA) A quantitative method for classifying jobs based on types and amounts of responsibility for data, people, and things. Performance standards and training requirements are also identified. (p. 59 ) Incumbent Individual currently holding the position (p. 59) industrial engineering A field of study concerned with analyzing work methods; making work cycles more efficient by modifying, combining, rearranging, or eliminating tasks; and establishing time standards. (p. 53) job A group of related activities and duties, held by a single employee or a number of incumbents. (p.

47) job analysis The procedure for determining the tasks, duties, and responsibilities of each job, and the human attributes (in terms of knowledge, skills, and abilities) required to perform it. (p. 47) job description A list of the duties, responsibilities, reporting relationships, and working conditions of a job – one product of job analysis. (p. 62) job design The process of systematically organizing work into tasks that are required to perform a specific job. (p. 54) job enlargement (horizontal loading) A technique to relieve monotony and boredom that involves assigning workers additional tasks at the same level of responsibility to increase the number of activities they have to perform. (p. 52) job enrichment (vertical loading) Any effort that makes an employee's job more rewarding or satisfying by adding more meaningful tasks and duties. (p. 53) job rotation Another technique to relieve monotony and employee boredom that involves systematically moving employees from one job to another. (p. 54) job specification A list of the "human requirements", that is, the requisite knowledge, skills, and abilities (KSAs) needed to perform the job - another product of job analysis. (p.65) Copyright © 2019Pearson Canada Inc.

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National Occupational Classification (NOC) A reference tool for for writing job descriptions and job specifications. Compiled by the federal government, it contains comprehensive, standardized descriptions of about 30,000 occupations organized into 500 Unit Groups according to the 4 skill levels and ten skill types .. (p. 60) occupation A collection of jobs that share some or all of a set of main duties. (p. 61) organization chart A "snapshot" of the firm, depicting the organization's structure in chart form at a particular point in time. (p. 49) organizational structure The formal relationships among jobs in an organization. (p. 49) physical demands analysis Identification of the senses used, and type, frequency, and amount of physical effort involved in a job. (p. 65) position The collection of tasks and responsibilities performed by one person. (p. 47) Position Analysis Questionnaire (PAQ) A questionnaire used to collect quantifiable data concerning the duties and responsibilities of various jobs. (p. 59) process chart A diagram showing the flow of inputs to and outputs from the job under study. (p. 50) team A small group of people with complementary skills who work toward common goals for which they hold joint responsibility and accountability. (p. 57) team-based job designs Job designs that focus on giving a team, rather than an individual, a whole and meaningful piece of work to do, and empowering team members to decide among themselves how to accomplish the work. (p. 57) work simplification An approach to job design that involves assigning most of the administrative aspects of work (such as planning and organizing) to supervisors and managers, while giving lower-level employees narrowly defined tasks to perform according to methods established and specified by management. (p. 53) REVIEW AND DISCUSSION QUESTIONS 1. Explain how job analysis provides important information that is required for at least three different functions of HRM. See Fig. 3.1, p. 47 – job analysis influences 7 different HR functions: HR planning; talent aquisition; job evaluation/compensation; performance appraisal; labour relations; training, development and career management; and job design. A strong answer will discuss the role of job descriptions and job specifications in each of the three chosen functions (p. 49-50). A weak answer will ignore the role of job descriptions and job specifications or fail to distinguish between them.

2. Differentiate among job enlargement, job rotation, and job enrichment, and provide an example of each.

Job enlargement involves assigning workers additional tasks at the same level of responsibility to Copyright © 2019Pearson Canada Inc.

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increase the number of tasks they have to perform. Also known as horizontal loading, job enlargement reduces monotony and fatigue by expanding the job cycle and drawing on a wider range of employee skills. For example, if the work was assembling chairs, a worker who previously only bolted the seat to the legs might take on the additional tasks of assembling the legs and attaching the back, as well. (p. 53) Job rotation is another technique to relieve monotony and employee boredom. This involves systematically moving employees from one job to another. Although the jobs themselves don't change, workers experience more task variety, motivation, and productivity. The company gains by having versatile, multi-skilled employees who can cover for one another efficiently. For example, a worker might assemble chairs for several days, then move to the table assembly area for a few, and spend the remainder of the week working in the shipping area, packing chairs and tables. (p. 54) Job enrichment is defined as any effort that makes an employee's job more rewarding or satisfying by adding more meaningful tasks and duties. Also known as vertical loading, job enrichment involves increasing autonomy and responsibility by allowing employees to assume a greater role in the decision-making process and become more involved in planning, organizing, directing, and controlling their own work. Enriching jobs can be accomplished through such activities as: increasing the level of difficulty and responsibility of the job; assigning workers more authority and control over outcomes; providing feedback about individual or unit job performance directly to employees; adding new tasks requiring training, thereby providing an opportunity for growth; or assigning individuals specific tasks or the responsibility of performing a whole job rather than only parts of it. (p. 5456) 3. Describe a negative consequence to the employer or an employee if an organization pays little attention to ergonomic job design.

Ergonomics seeks to integrate and accommodate the physical needs of workers into the design of jobs.

It aims to adapt the entire job system – work, environment, machines, equipment, and processes – to match human characteristics. Doing so results in eliminating or minimizing product defects, damage to equipment, and worker injuries or illnesses caused by poor work design. (p. 54)

4. Several methods for collecting job analysis data are available – interviews, the Position Analysis Questionnaire, and so on. Compare and contrast four of these methods, explaining what each is useful for and listing the pros and cons of each.

(Pages 58-) Interviews – The interview is probably the most widely used method. Three types of interviews are used to collect job analysis data: individual interviews with each employee; group interviews with employees having the same job; and supervisory interviews with one or more supervisors who are thoroughly knowledgeable about the job being analyzed.

The major advantage is that the incumbent can report activities and behaviour that might not otherwise come to light. Interviews also provide an opportunity to explain the need for and functions of job analysis, allow for probing, and can let the interviewee vent frustrations or views that might otherwise go unnoticed by management. Interviews are also relatively simple and quick, and are more flexible than surveys. There are several additional advantages to group

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interviews. First, groups tend to do better than individuals with open-ended questions. Also, such interviews may also be higher in reliability and validity due to cross-checking.

The major drawback of the interview technique is potential distortion of information, whether due to outright falsification or honest misunderstandings. A job analysis is often used as a prelude to changing a job's pay rate. Knowing that fact, employees tend to exaggerate certain responsibilities, while minimizing others. Obtaining valid information can thus be a slow process. Interviewing is also fairly labour-intensive, and depends heavily on rapport between the interviewer and respondent. Group interviews are also fairly costly, because of the number of people taken away from their jobs to participate.

Questionnaires – Having employees fill out questionnaires to describe their job-related duties and responsibilities is another good method of obtaining job analysis information.

Whether structured, unstructured, or a combination of the two, questionnaires have advantages and disadvantages. A questionnaire is a quick and efficient way of obtaining information from a large number of employees and is less costly than interviewing hundreds of workers, for instance.

Structured surveys lend themselves easily to computer analyses. This method also lends itself to situations in which the survey sample is widely scattered.

A drawback is the fact that developing the questionnaire and testing it can be an expensive and timeconsuming process. Other disadvantages include the fact that this technique is dependent on the communication skills of respondents, does not allow for probing, and tends to focus on perceptions of the job.

Observation – Direct observation is especially useful when jobs consist mainly of observable physical activities. Direct observation and interviewing are often used together. One approach is to observe the worker on the job during a complete work cycle. All of the observed job activities are noted. Then, after as much information as possible is accumulated, the incumbent is interviewed, asked to clarify points not understood, and explain what additional activities he or she performs that weren't observed. Another approach is to observe and interview simultaneously, while the jobholder performs his or her tasks.

Advantages include the fact this method focuses more on reality than on perceptions, and that a thirdparty observer tends to have more credibility than job incumbents, who may have reasons for distorting the information provided.

Disadvantages relate to the fact that observation can influence the behaviour of job incumbents, and is unsuitable for jobs requiring mental effort – those in which the employee engages in important activities that occur only occasionally, and those with long job cycles.

Participant Diary/Log – Another technique involves asking employees to keep a diary/log or a list of what they do during the day, along with the time each activity takes.

This can produce a very complete picture of the job, especially when supplemented with subsequent interviews with the employee and his or her supervisor. Another advantage is its appropriateness for jobs with a long job cycle.

This method requires the participation and cooperation of job incumbents, something that is not always easy to attain. Other disadvantages include the focus on perceptions and the fact that Copyright © 2019Pearson Canada Inc.

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the employee might try to exaggerate some activities and underplay others. However, the detailed, chronological nature of the log tends to minimize this problem.

Quantitative Job Analysis Techniques – Although most employers use interviews, questionnaires, observations, and/or diaries/logs for collecting job analysis data, there are many times when these narrative approaches are not appropriate. For example, when the aim is to assign a quantitative value to each job so that they can be compared for pay purposes, a more quantitative job analysis approach may be best. The two most popular quantitative methods include: Position Analysis Questionnaire (PAQ) – The position analysis questionnaire is a very structured job analysis questionnaire that is filled in by a job analyst. The PAQ contains 194 items, each of which represents a basic element that may or may not play an important role in the job. The job analyst decides whether each item plays a role on the job and, if so, to what extent.

The advantage of the PAQ is that it provides a quantitative score or profile of the job in terms of how that job rates on five basic dimensions: (1) having decision-making/communication/social responsibilities; (2) performing skilled activities; (3) being physically active; (4) operating vehicles/equipment; and (5) processing information. The PAQ's real strength is in classifying jobs.

Results can be used to compare jobs to one another; this information can then be used to determine appropriate pay levels.

Functional Job Analysis (FJA) Functional job analysis rates the job not only on responsibilities pertaining to data, people, and things, but also on the following dimensions: the extent to which specific instructions, reasoning, and judgment are required to perform the task; the mathematical ability required; and the verbal and language facilities involved. This quantitative technique also identifies performance standards and training requirements.

5. Although not legally required, having job descriptions is highly advisable. Provide two reasons to support the argument for a business ensuring such documents exist for all jobs in the company.

Job Descriptions and Human Rights Issues (p. 65) – While employers are not legally obligated to have job descriptions, it is highly advisable, since failure to develop such descriptions may mean that job duties are never determined, clarified, prioritized, and justified. Human rights legislation requires employers to ensure that there is no discrimination on any of the prohibited grounds in any aspect or terms and conditions of employment. Essential job duties can be clearly identified in the job description. When assessing suitability for employment, training program enrolment, and transfers or promotions, and appraising performance, the sole criteria examined should be KSAs required for the essential duties of the job. Even when an employee cannot perform one or more of the essential duties of the job due to reasons related to a prohibited ground, such as a physical disability or religion, an employer is expected to make reasonable accommodations to the point of undue hardship.

Writing Legally-Defensible Job Specifications (p. 67).To ensure compliance with human rights legislation keep a few pointers in mind when preparing job specifications.  All listed qualifications must be bona fide occupational requirements (BFORs) based on the current job duties and responsibilities.  Unjustifiably high educational or lengthy experience requirements can lead to systemic discrimination.

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The qualifications of the current incumbent should not be confused with the minimum requirements, since s/he may be under-qualified or overqualified.

Identifying the actual physical and mental demands is critical for entry-level jobs (e.g. finger dexterity). A physical demands analysis identifies senses used (e.g. smell, touch, taste, hearing, sight) and the type, frequency, and amount of physical effort. Mental and emotional demands are often ignored, but should be included so that candidates can be tested on these characteristics (e.g. working in high-pressure environment)

6. Present your rationale for describing jobs in terms of competencies rather than duties. How is this approach different from the traditional approach?

In high-performance work environments, employers need workers to seamlessly move from job to job and exercise self-control, rather than be closely supervised. In order to enable more flexible behaviour, employers are shifting toward newer approaches for describing jobs, such as competencybased analysis. Competency-based job analysis means describing the job in terms of the measurable, observable, behavioural competencies (knowledge, skills, or behaviours) that an employee must exhibit in order to do the job well.

Three reasons to use competency analysis are: i. Traditional job descriptions with lists of specific duties breed an “it’s not my job attitude” rather than learning and self-motivation ii. Competencies provide a tighter linkage to the organization’s strategy iii. Performance management processes are more transparent; competencies clearly identify the basis for training, performance appraisal, and rewards.

Examples of competencies When describing jobs from a competency perspective, managers often cluster specific competencies into clusters (e.g. general or core competencies; leadership competencies; and technical/task/functional competencies).General competencies include reading, writing, mathematical reasoning, whereas leadership competencies focus on strategic thinking and teaching others. While general and leadership competencies may appear across many different jobs, technical/task/functional competencies are more specific to a particular type of job or occupation e.g. engineer, accountant, produce manager.

The process for writing competency-based job descriptions and job specifications is similar to the traditional job analysis process. Competency-based duties and responsibilities are already appearing in otherwise traditional job descriptions (e.g. conducts marketing surveys on current and new-product concepts). However, more specific duties and responsibilities resist being written from a competency perspective because they are not as readily observable or measurable e.g. oversees (e.g. oversees copywriting, design, layout, and production). For this reason, job descriptions will probably continue to reflect a combination of the competency-based and traditional approaches. (p. 54-, 63

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CRITICAL THINKING QUESTIONS 1. Why isn't it always desirable or appropriate to use job enrichment when designing jobs? How would you determine how enriched an individual employee’s job should be?

Job enrichment programs are more successful in some jobs and settings than in others.

Moreover, not all employees want additional responsibility and the challenge of enriched jobs or those including the five core dimensions. Some people prefer routine jobs and may resist job redesign efforts. In addition, job redesign efforts almost always fail when employees lack the physical or mental skills, abilities, or education needed to perform the job. (p. 54) Sitting down with the employee to discuss their motivation for an enriched job and their strengths and weaknesses in terms of handling an enriched job (e.g. additional decision- making) will help identify employees who would embrace the opportunity and the training needed to help them be successful in an enriched job.

2. Assume that you are the job analyst at a bicycle manufacturing company in British Columbia and have been assigned responsibility for preparing job descriptions (including specifications) for all of the supervisory and managerial positions. One of the production managers has just indicated that he will not complete the job analysis questionnaire you have developed. a. How would you handle this situation? b. What arguments would you use to attempt to persuade him to change his mind? c. If your persuasion efforts failed, how would you go about obtaining the job analysis information you require to develop the job description for his position?

I would try to discover the cause of his resistance. If it is simply a matter of not understanding the importance of this information and/or the reasons why it is being collected, providing additional information may be advantageous. Perhaps he is confusing this process with some type of “efficiency evaluation” and is concerned about his next performance rating or his job security.

If this is the case, then explaining that updating job descriptions and specifications is a best practice that all organizations need to do because jobs change over time in response to organizational changes. It is in his best interest to have a job description that accurately reflects what he does, the importance and frequency of essential tasks, because this information is used in so many other HR functions (Fig. 3.1, p. 4 7 ). It may be that his job is undervalued, his performance is being judged on criteria that are no longer relevant, and that he is not being given access to relevant training and development opportunities. People are more likely to co- operate if they can see the “WIFM” –what’s in it for me.

If that tactic fails, I would seek advice from my boss, since he or she might have additional hints regarding how this situation should be handled. Presumably, completing the questionnaire has the support of senior management and is required of all employees. Perhaps an explanation from the HR Manager would overcome the production manager’s resistance. If those approaches fail and he is the only holdout then the HR Manager may need to contact the production manager’s supervisor, but going over his head would be a last resort.

Alternate methods for collecting the information without his co-operation would be interviewing his subordinates, having his subordinates fill out a simplified questionnaire, and using the NOC.

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The PAQ could be used if the job analyst is familiar with the job of production manager.

Observation is technically possible, but may make the situation worse if he feels that he is being “spied” on. (p. 59) 3. Because the top job in a firm (such as president, executive director, or CEO) is by nature more strategic and broader in scope than any other job, is competency-based job analysis more appropriate? Is there less need for a job description for the president? Why or why not?

The top job in a firm tends to have more leadership competencies and less technical/task/functional competencies, while still requiring general or core competencies (reading writing, mathematical reasoning). For this reason, competency based job analysis may provide better insight into the required capabilities of the role and better describe those characteristics that will enable performance by the incumbent.

While it is true that the job descriptions for lower-level positions tend to include more detailed explanations of duties and tasks, job descriptions are equally critical for senior management positions, including president or CEO. Such descriptions tend to include broader responsibility statements rather than an outline of specific tasks. Having a job description and job specifications for the most senior-level position are absolutely essential for HR planning, recruitment and selection, compensation, performance appraisal, and succession planning purposes. Even the most senior-level person is accountable to others, such as a board or stockholders. Having a job description and specification for the president or CEO and reviewing it regularly ensures that the requirements of this key position are aligned with the organization’s current or emerging strategy. Review by the board of directors may identify a need to replace the CEO with someone with a different set of capabilities in order to meet new challenges.

4. Give examples of working that should be included in in the job descriptions for each of the following: emergency room nurse; animal control officer; telephone repair technician; road maintenance worker; air traffic controller; and metal stamping press operator.

Emergency Room Nurse –  Shift work (days, evenings, nights, weekends, statutory holidays)  Prolonged periods of standing  Lifting patients, carrying supplies, walking, bending  Exposure to chemicals, body fluids, difficult patients, infectious diseases  Frequent interruptions, little privacy  No travel involved  Fast-paced, stressful environment Animal Control Officer –  Shift work (days, evenings, nights, weekends, statutory holidays)  Prolonged periods of standing  Lifting animals of all sizes, carrying supplies, walking, bending  Exposure to chemicals, body fluids, difficult animals and humans, infectious diseases  Frequent interruptions, little privacy  Travel across the city involved  Fast-paced, stressful environment Telephone Repair Technician –  Shift work (days, evenings, nights, weekends, statutory holidays) Copyright © 2019Pearson Canada Inc.

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 Prolonged periods of standing, bending, sitting  Working indoors and outdoors, so exposure to changing weather conditions  Lifting supplies, bending  Exposure to chemicals and electrical units  Some interruptions, some privacy  Travel across the city involved  Fast-paced environment  Dealing with stressed clients Road Maintenance Worker –  Some Shift work, but mostly day shift (evenings, nights, weekends, statutory holidays)  Prolonged periods of standing  Lifting tools, materials of all weights, carrying supplies, walking, bending  Frequent interruptions, little privacy  Travel across the city involved  Fast-paced, stressful environment  Working primarily outdoors so exposure to all kinds of weather conditions Air Traffic Controller –  Shift work (days, evenings, nights, weekends, statutory holidays)  Prolonged periods of sitting  Prolonged periods of looking at screens  Frequent interruptions, little privacy  Fast-paced, very stressful environment  Dealing with voices with accents  Work indoors  Exposed to loud sounds Metal Stamping Press Operator –  Shift work (days, evenings, nights, weekends, statutory holidays)  Prolonged periods of standing, walking, bending, pulling  Occasional exposure to heavy weights  Frequent interruptions, little privacy  Fast-paced  Exposure to high levels of noise from machines  Exposure to hazards from moving equipment and machine parts, nuisance dust, and skin exposure to cutting and drawing oils 5. If a supervisor reviews the job analysis information provided by an employee and says that the job duties and responsibilities have been inflated, but the employee says that the supervisor does not really know what the job entails, explain the approach you would take to ensure the final job analysis information is accurate.

Getting into a s/he said/s/he said cycle will not be productive. You could ask the supervisor to elaborate on why s/he feels the duties and responsibilities have not been reported accurately and ask for any evidence to support their argument e.g. production records, sales records. At the same time, you can ask the employee to keep a diary/log for a week that will be reviewed by the supervisor and the job analyst at the end of that week to help pin down points of difference. Objective observation of the employee by the job analyst is also a possibility as long as neither party feels like the job analyst is taking sides. If there are other employees doing the same job who have not been involved in the job analysis process you can get one or more of them to complete a questionnaire. At some point you should facilitate a discussion of the job between the supervisor and the employee because there is obviously a case of mismatched expectations, which needs to be resolved, or this will become a Copyright © 2019Pearson Canada Inc.

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performance management issue.

EXPERIENTIAL EXERCISES (p. 68) 1. Using the examples of organizational structures in Figure 3.3 in this chapter, prepare a sketch the structure that matches a current or recent company that where you have held a job.

Once you have completed this task, form a group with several of your classmates. Taking turns, have each member show his or her organization chart to the group; and briefly (i) describe the structure depicted, (ii) explain whether or not the structure seems to be appropriate, and (iii) identify at least one advantage and one disadvantage he or she experienced working within this structure.

A sample organization chart can be found on page 51. There are three basic types of organizational structure, as depicted in Figure 3.3 on page 5 1 : bureaucratic, flat, and matrix. The major characteristics and advantages/disadvantages are listed beside the illustration of each. Flatter organizations and team-based structures are becoming increasingly the norm, and boundaryless structures are starting to emerge due to such forces as accelerating product and technological change, globalized competition, deregulation, political instability, demographic changes, and trends toward a service society and the information age. These forces have dramatically increased the need for firms to be responsive, flexible, and capable of competing in a global marketplace.

Teaching Tip: This may be a difficult exercise for students without extensive work experience unless their organization’s chart is available on the Web or they know to go to the Annual Report to obtain information on how the organization is structured by looking at the titles of company officers. If this is the case then you can substitute the university/college organization structure e.g. schools/faculties, departments, area groups or a not for profit volunteer organization that students have been involved with provided that it is an organization of sufficient size..

2. Working individually or in groups, and using the Employment and Skills Development (ESDC) website, find the National Occupational Classification (NOC) job description for both an architect (NOC# 2151) and an architectural technologist (NOC# 2251. Compare the two descriptions, noting t w o similarities and t w o differences between these related but different jobs.

This exercise is the foundation for a number of exercises found in later chapters of this text. If students have brought the NOC description to class, this exercise should take no more than 35- 40 minutes to complete. It is designed to let the students know that there is help available to organizations that are just starting to write job descriptions. It can also be pointed out that the students, as future job seekers can use this resource to help them anticipate some interview questions, if they do not have a full job description of the position being applied for, prior to a job interview.

3. Working individually, use the Physical Demands Analysis sample form provided by the Industrial Accident Prevention Association (http://iapa.ca/Main/documents/pdf/FreeDownloads_PDA.pdf).

Complete it based on a current or former job (one that you held in the last 2 years). Once completed, share your working conditions information with someone else in the class.

This is a straightforward exercise that will help students understand the depth of information that may need to be gathered with doing working conditions for a job description and to see that there are tools for them to use. The template will provide a straightforward framework, especially if you walk through all of the elements at the beginning of the exercise to make sure that people are clear. Some individual clarification may be required as the students work on it.

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CHAPTER 4 HUMAN RESOURCES PLANNING

LEARNING OUTCOMES DEFINE human resources planning (HRP) and DISCUSS its strategic importance.

DISCUSS briefly the four strategies used to forecast internal human resources supply and four types of market conditions assessed when forecasting external human resources supply DESCRIBE four quantitative and two qualitative techniques used to forecast human resources demand.

EXPLAIN how organizations deal labour surpluses and labour shortages.

CHAPTER SUMMARY Human resources planning (HRP) is a process that ensures the organization has the required number and type of employees to meet its strategic goals. Using quantitative and qualitative techniques to forecast labour supply and demand is a critical element of the strategic planning process. Techniques for forecasting future HR demand are trend analysis, ratio analysis, scatter plots, regression analysis, nominal group technique, and the Delphi technique. Four techniques for forecasting internal labour supply are skills and management inventories, replacement charts and summaries, succession planning and Markov analysis. Forecasting external HR supply requires assessment of general economic conditions, labour market conditions, and occupational labour conditions. HR planners need to work with various levels of management to make decisions about how to manage labour surpluses and shortages. A range of internal and external options are available; organizations must choose solutions that fit organizational timelines and company culture.

LECTURE OUTLINE I.

THE STRATEGIC IMPORTANCE OF HUMAN RESOURCES PLANNING

Human Resources Planning (HRP) is the process of reviewing human resources requirements to ensure that the organization has the required number of employees, at the right time, with the necessary skills, knowledge and abilities to meet its s t r a t e g i c o b j e c t i v e s . HRP is a proactive process, which both anticipates and influences an organization's future by systematically forecasting the demand for and supply of employees under changing conditions, and developing plans and activities to satisfy these needs.

Four key steps in the HRP process are: forecasting labour supply, forecasting labour demand, gap analysis, and solutions analysis (see Fig. 4.1 p. 71). Lack of or inadequate human resources planning can result in significant costs, a f f e c t a n o r g a n i z a t i o n ’ s f i n a n c i a l p e r f o r m a n c e , lead to labour mismatches across departments, reduce morale and increase turnover. The greatest concern is failure to accomplish short-term operational or long-range strategic plans.

1. The Relationship between HRP and Strategic Planning .

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An HR plan must align with the overall goals of the organization, the organization’s short and long-term plans, and with the plans of the other functional areas of the business (e.g. marketing, finance, operations). Strategic decisions to expand, redirect, diverge, divest, partner, or merge must be accommodated through HR planning.

2. The Importance of Environmental Scanning Environment scanning is a critical component of proactive HRP and strategic planning processes. Environment scanning is identifying and analyzing external opportunities and threats that may be critical to the organization’s success. In the context of human resources management, environmental scanning involves an assessment of external factors influencing the organization’s ability to find and secure talent from the external labour market including economic conditions (e.g. unemployment rate), competitive trends (e.g. compensation policies), legislative changes (e.g. minimum wage laws), social concerns (e.g. healthcare, childcare), technological developments (e.g. automation), and demographic trends. Failure to scan the environment on an ongoing basis can increase the risk of having a labour shortage or a labour surplus, whether in terms of number or type of workers.

3. Steps in Human Resources Planning Four key steps in the HRP process are: forecasting labour supply; forecasting labour demand; gap analysis; and solutions analysis.

Before embarking on an HR planning exercise, current HR levels must be assessed by integrating macro level information (organizational structure, business units, and career paths).

with micro level information (number of employees at each level, existing skill sets, demographic and job-related information).

4. FORECASTING THE AVAILABILITY OF CANDIDATES (SUPPLY) There are two sources of labour supply, internal (existing employees) and external (unemployed and those employed elsewhere).

4. Forecasting the Supply of Internal Candidates Before considering external recruitment management must determine how many candidates for projected openings will likely come from within the firm using one or more of the following approaches. Confidentiality is essential when using replacement charts, replacement summaries, or succession plans. a.

Skills inventories and management inventories – organizational records of education, experience, skills, qualifications, interests, responsibilities, and prior training

b.

Replacement charts and replacement summaries – visual representations and lists of potential replacements (See Figure 4.2 p. 74 for an example)

c.

Succession plans – career development plans for filling vacancies in senior or key jobs; requires balancing top management needs with potential career aspirations of available .

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candidates Teaching Tip: consider using Ethical Dilemma (p. 75) to illustrate the balancing issue and/or the Entrepreneurs and HR Discussion Box (p. 82) on succession planning in family businesses. d.

Markov analysis – development of a probability matrix based on past employee movements (see Fig. 4.3, p. 76)

5. Forecasting the Supply of External Candidates When a sufficient number of current employees are not available or suitably qualified to fill vacancies the firm must look for external candidates. To project the supply of outside candidates employers assess general economic conditions, labour market conditions, and occupational market conditions. a.

General economic conditions – impact of natural fluctuations in economic activity (e.g. interest rates, wage rates, inflation rate, unemployment rate)

b.

Occupational market conditions – availability of potential candidates in specific occupations (e.g. engineers, accountants, and so on). Some sectors have significant shortages, while others are experiencing a labour surplus.

Teaching Tip: Have students bring in recent news stories about occupational market conditions, such as the surplus of teachers in Ontario and the shortage of skilled trade workers across Canada.

Alternatively, have students download population profiles of the various regions of Canada to develop an understanding of the potential changes to the labour force due to the age profile of our population.

II. FORECASTING FUTURE HUMAN RESOURCES NEEDS (DEMAND) A key component of HRP is forecasting the number and type of people needed to meet organizational objectives beginning with forecasting demand for the company’s products and/or services. Sales forecasts are translated into production volume forecasts, which determine staffing levels. Other factors that are considered are projected turnover, quality and nature of employees, product and market decisions, planned technological and administrative changes, and the organization’s financial resources. Large organizations with highly trained specialists tend to use quantitative techniques; however qualitative techniques also have their advantages.

1. Quantitative Approaches a.

Trend analysis – initial estimate based on employment levels over last 3 – 5 years

b.

Ratio analysis - uses ratio between casual factor (e.g. sales) and # of employees required

c.

The scatter plot – graphical method of identifying relationships between causal factors and staffing levels (see Fig. 4.4, p. 80)

d.

Regression analysis – statistical technique involving use of a mathematical formula to determine the relationship between and organization’s employment level (dependent variable) and some measurable factor of output (independent variable) .

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2. Qualitative Approaches Qualitative approaches rely solely on expert judgements which can be used by themselves or to modify forecasts from quantitative approaches. See pages 87 – 88 for steps involved in each approach. a.

Nominal group technique – face-to-face meeting of a group of experts who generate, clarify and engage in both open discussion and private assessment of ideas.

b.

Delphi technique – useful for long-range forecasting; often involves outside experts as well as company employees but ideas are exchanged without face-to-face interaction

3. Gap Analysis: Summarizing Human Resources Requirements The end result of the forecasting process is an estimate of short-term and long-range HR requirements. A staffing table is often used to illustrate short-term plans.

III. PLANNING AND IMPLENTING HR PROGRAMS TO BALANCE SUPPLY AND DEMAND Once the supply and demand of human resources have been estimated, program planning and implementation begins. Specific strategies must be formulated to deal with the three possible labour supply and demand scenarios – equilibrium, surplus, or shortage (see Fig. 4.5, p. 83).

1. Labour Equilibrium – rare, no new action, maintain existing transfer and recruitment plans 2. Labour Surplus – internal labour supply exceeds human resource demand. Solutions include one or a combination of: hiring freeze, attrition, early retirement buyout programs, job sharing, work sharing, reduced work week, layoff, termination or leave of absence. a.

Easing the pain of labour surplus management Research has shown that layoffs and downsizing do not always result in improved financial performance, due in part to survivor syndrome; those who remain experience a range of re negative emotions which tend to be associated with stress symptoms and reduced performance. To assist employees who are laid off or terminated through no fault of their own, organizations provide supplemental unemployment benefits (SUBs), severance packages, and/or outplacement assistance. Executives tend to be protected by golden parachute clauses in their contracts.

3. Labour Shortage – A labour shortage exists when the internal supply of human resources cannot meet the organization’s needs. a.

Internal solutions to a labour shortage – besides the initial response of overtime, transfers and promotions can be used, although these then create new vacancies.

b.

External solutions to a labour shortage – recruitment of new hires is a permanent solution, however, organizations often turn first to temporary employees or outsourcing of work to a third party organization.

Teaching Tip: Share news stories about organizations where excessive overtime has become the norm .

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and contrast this with the position of labour unions in regards to overtime.

DISCUSSION BOXES STRATEGIC HR: Pumping Up People Supply (p. 77) Burnaby, B.C.–based Sorin Group Canada makes intricate aortic pericardial heart valves that require highly specialized skills in engineering and production. There is a very small talent pool of biomedical engineers, quality assurance and production technicians available in Canada. While they do hire and train Canadian engineers and scientists on medical devices they have to rely on new immigrants with relevant education and experience from other countries in order to hire a sufficient number of qualified workers. and provide extensive training, including both English-language training and subsidies for foreign-trained engineers seeking a Canadian engineering degree.

Teaching Tip: Have students discuss the reasons why Canadian high school students do not pursue science careers when evidence clearly shows that this is a domain of plentiful job opportunities.

ETHICAL DILEMMAS You were recently asked to identify one employee you manage as a top performer to align with a new company program offering top performers intensive management skills training. The employees you identified for this role is unaware of the program. This morning, she confided in your that she just applied for graduate school and will find out if she has been accepted five month from now, with the intent to start the program one month after that. Would you change the identification of who was the top performer in our team based on this information? Why or why not? (p. 75) If you let the employee know that you were considering putting forward their name for this program then they may feel pressure to stay, depending on their relationship with you. They may also misinterpret this as a guarantee of a future career, which is outside of your authority. If they pass up graduate studies and are not successful in management training then they may blame you for giving them false hope. Furthermore, they may deliberately or inadvertently let other employees know that they were chosen over them and cause a decline in job satisfaction by those who were not considered.

If you do not tell them about the opportunity then you will never know if they are considering graduate study because they don’t perceive any advancement opportunities with your organization i.e. they would love to stay but want a new challenge. You could be penalizing your organization by letting a top performer get away if the next person in line is not as qualified as this person.

One solution may be to check with HR and find out if you can tell this employee about the program, without telling them that they are being considered, and see what their level of interest would be in being considered for it. It would then be their decision to defer their graduate studies or pursue graduate studies on a part-time basis while remaining with your organization.

.

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KEY TERMS attrition The normal separation of employees from an organization due to resignation, retirement, or death. (p. 83) Delphi technique A judgmental forecasting method used to arrive at a group decision, typically involving outside experts as well as organizational employees. Ideas are exchanged without face-to-face interaction, and feedback is provided and used to fine-tune independent judgments until a consensus is reached. (p. 81) early retirement buyout programs Strategies used to accelerate attrition that involve offering attractive buyout packages or the opportunity to retire on full pension with an attractive benefits package. (p. 83) environment scanning is identifying and analyzing external opportunities and threats that may be critical to the organization’s success. In the context of human resources management, environmental scanning is an assessment of external factors influencing the organization’s ability to find and secure talent from the external labour market including economic, competitive, legislative, social, technological, and demographic trends. (p. 71) hiring freeze A common initial response to an employee surplus. Openings are filled by reassigning current employees, and no outsiders are hired. (p. 83) human resources planning (HRP) The process of reviewing human resources requirements to ensure that the organization has the required number of employees, at the right time with the necessary skills, knowledge and abilities to meet its strategic objectives. (p. 70) job sharing A strategy that involves dividing duties of a single position between two or more employees. (p. 84) layoff The temporary or permanent withdrawal of employment to workers for economic or business reasons. (p. 84) leave of absence Allows those who may be interested in taking time away from work for a variety of reasons (e.g. personal, educational, etc.) to have a set period of time away from their position without pay, but with a guarantee that their job will be available upon their return. (p. 84) management inventories Records summarizing the qualifications, interests, and skills of management employees, along with the number and types of employees supervised, duties of such employees, total budget managed, previous managerial duties and responsibilities, and managerial training received. (p. 73) Markov analysis A method of forecasting internal labour supply that involves tracking the pattern of employee movements through various jobs and developing a transitional probability matrix. (p. 75) nominal group technique A decision-making technique that involves a group of experts meeting face to face. Steps include independent idea generation, clarification and open discussion, and private assessment. (p. 81) promotion Movement of an employee from one job to another that is higher in pay, responsibility, or organizational level, usually based on merit, seniority, or a combination of both. (p. 86) .

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ratio analysis A forecasting technique for determining future staff needs by using ratios between some causal factor (such as sales volume) and number of employees needed. (p. 79) reduced workweek Employees work fewer hours and receive less pay. (p. 84) regression analysis A statistical technique involving the use of a mathematical formula to project future demands based on an established relationship between an organization's employment level (dependent variable) and some measurable factor of output (independent variable). (p. 80) replacement charts Visual representations of who will replace whom in the event of a job opening. Likely internal candidates are listed, along with their age, present performance rating, and promotability status. (p. 73) replacement summaries Lists of likely replacements for each position and their relative strengths and weaknesses, as well as information about current position, performance, promotability, age, and experience. (p. 74) scatter plot A graphical method used to help identify the relationship between two variables. (p. 79) skills inventories Manual or computerized records summarizing employees' education, experience, interests, skills, and so on., which are used to identify internal candidates eligible for transfer or promotion. (p. 73) staffing table A pictorial representation of all jobs within the organization, along with the number of current incumbents and future employment requirements (monthly or yearly) for each. (p. 82) succession planning The process of ensuring a suitable supply of successors for current and future senior or key jobs, so that the careers of individuals can be effectively planned and managed. (p.

74) termination Permanent separation from the organization for any reason. (p. 84) transfer Movement of an employee from one job to another that is relatively equal in pay, responsibility, or organizational level. (p. 86) trend analysis Study of a firm's past employment levels over a period of years to predict future needs. (p. 79)

work sharing Employees work three or four days a week and receive EI benefits on their non- work day(s). (p. 84) REVIEW AND DISCUSSION QUESTIONS 1. Name and briefly describe two undesired consequences to an organization that lacks a proper human resources planning (HRP) process. (p. 70) Lack of or inadequate human resources planning within an organization can result in: 

Significant costs – both tangible and intangible. For example, unstaffed vacant positions can lead to .

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costly inefficiencies, particularly when lengthy training is needed for new hires to reach acceptable performance standards. Requiring employees to work extra hours to perform the duties of such vacant positions or to compensate for understaffing can lead to lower productivity, fatigue, stress-related illnesses, and accidents, as well as incurring overtime premium costs.

There are also costs associated with overstaffing. For example, if large numbers of employees are being laid off, extended notice periods are required in many jurisdictions, as well as severance pay. 

Situations in which one department is laying off employees, while another is hiring individuals with similar skills, which can have a devastating impact on morale and productivity. Ineffective planning hinders the ability of the HR department to develop effective training, development, and career planning programs.



Inability to accomplish short-term operational plans and/or long-range strategic plans.

2. Environmental scanning involves assessing external factors that may affect the supply and demand for labour in an organization. Discuss two such factors, and indicate their impact on either the supply of, or demand for, labour in an organization.

Students can choose from among the three factors which are economic conditions, market and competitive trends and legislation. There is much to discuss under each category.

Economic conditions (local, regional, national, international): For example, if the unemployment rate in a region is low, an organization would have to be more aggressive in recruiting job candidates, as availability of talent may be more scarce.

Market and competitive trends: For example, compensation policies that lag behind competitors’ policies may result in higher turnover or more difficulties in attracting talent.

New or revised laws and the decisions of courts and quasi-judicial bodies: For example, a raise in the in the minimum wage rate can inflate the cost of labour in an organization, therefore creating budgetary pressure to reduce.

3. Differentiate between the internal labour supply techniques know as replacement charts and succession plans. Explain why the employer may prefer either strategy. (p. 73-75, Fig. 4.2) Replacement charts are a visual representation of who will replace whom in the event of a job opening. Such charts typically indicate age and replacement status of potential internal candidates.

Replacement status consists of two variables: (1) present performance – gleaned from performance appraisals and (2) promotability – based on information provided by the employee about future career aspirations, and a subjective assessment by the employee's immediate supervisors regarding likelihood of future success.

Succession plans list likely replacements for each position and their relative strengths and weaknesses, as well as information about current position, performance, promotability, age, and experience.

While replacement charts provide an excellent quick reference tool, they contain very little information. These are best used when the need is to demonstrate whether a sufficient number of potentially qualified candidates exist for each key position. .

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Many firms prefer to use succession plans for more in-depth discussions because they contain information that will help decision-makers choose between candidates.

4. To attain a “balanced” labour demand–supply state, the HR planning team may offer advice on particular techniques to increase or lower the current supply of the labour force in an organization. Suggest two possible strategies when: a. there is a short-term (2–5 days) shortage of staff for scheduled afternoon shifts in a production department. b. there is a need to increase the number of sales associates due to the forecasted long-term popularity of a new line of cosmetics. (p. 83-86). (a) Students can discuss methods such as paying overtime, flexing the schedules of workers, subcontracting or hire temporary employees (b) Students can discuss offering promotions, transfers, career and training opportunities and recruit from outside.

CRITICAL THINKING QUESTIONS 1. A number of quantitative and qualitative techniques for forecasting human resources demand were discussed in this chapter. Working in groups, identify which strategies would be most appropriate for (a) small vs. large sized companies, (b) industries undergoing rapid change, and (c) businesses/industries in which there are seasonal variations in HR requirements. (p. 78-82) A suggested approach would be to have students create a matrix (table) with techniques down the left hand side and the four criteria (small, large, rapid change, seasonal variation). Considerations include availability of historical data, validity of historical data in terms of projecting future trends, in-house expertise in different methods, and owner/manager preferences.

Small firms may not have the data or expertise to take on the more sophisticated quantitative techniques, but could use trend analysis and possibly scatter plots. In large organizations, needs forecasting is primarily quantitative in nature. Highly trained professionals in these organizations would be familiar with ratio and regression analyses in addition to trend analysis and scatter plots. In contrast, small firms may be more comfortable using the nominal group technique, drawing on the expertise of employees, managers, and owners.

Industries undergoing rapid change will find the nominal group technique, and/or the Delphi technique to be particularly helpful in modifying the projections from quantitative techniques which require input from experts in order to project alternate scenarios.

Trend analysis and the qualitative techniques are well suited to the needs of businesses/industries in which there are seasonal variations in HR requirements.

2. Suppose that you are the HR manager at a firm in which a hiring freeze has just been declared.

The plan is to downsize through attrition. Define the meaning of attrition. What steps would you take to ensure that you reap the advantages of this strategy, while minimizing the disadvantages? (p.

83-85) Attrition is the normal separation of employees from an organization because of resignation, retirement or death. The major advantage of attrition is that it does not require separating any employees involuntarily. Potential drawbacks of this strategy include the following: .

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4.

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It can be a slow method of reducing numbers.

The organization may have no control over who stays and who leaves. Thus, valuable high performers may leave, while less needed or lower-performing employees stay.

Remaining employees may be overburdened with work or lack necessary skills, resulting in decreased or inferior performance.

Stagnation may occur due to the lack of new skills and ideas because no outsiders are hired.

To reap the advantages of this strategy while ensuring that the organization does not lose high performers or individuals with highly needed skills, you could provide current employees with the opportunity for training and development to broaden and enhance their KSAs, based on needs identified through HR planning. This would allow them to take on more value-added tasks and shift to more strategic roles as they become available. Engaging remaining employees in career management discussions may help to make them feel that they have a future with the organization, so they might be less likely to leave after they receive additional training. However some employees will take their new KSAs to the job market and search for opportunities outside of the organization.

3. Suggest a rationale to present to the senior management team that promotes an early retirement incentive plan for workers over the age of 55. What are key considerations to mention in your presentation? (p. 83-85).

In the presentation, it needs to be stressed that the organization must offer an attractive package with a full pension and benefits; ensure to keep the people who are hard to replace; that costs for this are up-front so the company needs the money now; human rights must be protected (especially there be no age discrimination) EXPERIENTIAL EXERCISES

1. Individually or in groups of three or four, act as an HR (human resources) team for your local grocery store. Develop an HR plan. Specifically forecast supply for three years, including trends in demographics, turnover trends in the industry, population forecasts for the region, competition for labour, and economic trends. Forecast demand considering population growth (clients), changes to technology or automation of work, consumer preference shifts (e.g., purchasing groceries online), and competitors in the industry.

Teaching Tip: Have student groups present their findings to the whole class.

2. Consider that you are working in a company that has just announced the termination of 20 percent of the organization’s workforce. You are not affected by this action, but several of your friends will lose their jobs. This past week several other employees not affected by this job loss appear to be quite stressed out by the news. You have a good relationship with the HR representative for your work team. What might you suggest she do in this situation?

She could look into counselling services (e.g., employee assistance programme); one-on-one or small group meetings or a large meeting to have their questions answered; offer out-placement services to help them find new jobs; look at job-sharing options.

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CHAPTER 5 TALENT ACQUISITION LEARNING OUTCOMES Define talent acquisition and Discuss the relevant components of this new perspective on traditional staffing of organizations.

Analyze the role of various internal and external recruitment methods Discuss strategies for recruiting a more diverse workforce.

Define selection and DISCUSS its strategic importance.

DEFINE reliability and validity and EXPLAIN their importance in selection techniques.

DESCRIBE at least four types of testing used in selection, and ANALYZE the conflicting legal concerns related to alcohol and drug testing.

DESCRIBE the major types of selection interview by degree of structure, type of content, and manner of administration.

EXPLAIN the importance of reference checking, DESCRIBE strategies to make such checking effective, and ANALYZE the legal issues involved.

CHAPTER SUMMARY Talent Acquisition is an emerging HRM programming concept that is focused on finding, acquiring, assessing and hiring job applicants. This is a result of globalization, technological advancements, competitive labour markets and demographic changes. Talent acquisition is linked to an organizations corporate marketing strategy, HR planning, employee retention and career development programmes.

See the recruitment notice for a Talent Acquisition Specialist (Figure 5.1 p. 90) as it shows the significance of this new approach beyond just recruiting and selections.

Recruitment is the process of searching out and attracting qualified job applicants. Talent shortages mean employers are relying more on employer branding in order to be seen as an employer of choice. The recruitment process has four steps: identification of job openings; review of job descriptions and job specifications; choices of recruiting source(s) and method(s); and generation of a pool of qualified candidates. Internal recruitment takes place through job postings and review of human resources records, especially skill inventories. There are a wide range of external recruitment methods from traditional print ads to an ever increasing number of online forums. Increasingly both recruitment and application are being carried out through online channels. Two emerging issues in recruitment are recruitment of non-permanent (contingent) workers and recruitment of a demographically diverse workforce.

Selection is the process of choosing among individuals who have been recruited to fill existing or projected job openings, and has considerable strategic importance. Reliable (consistent) and valid (accurate) selection methods are critically important to effective and legally defensible selection of the best candidate. HR professionals need to provide hiring managers with guidance in regards to .

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choosing among the many different types of selection tests and the various ways to conduct selection interviews. Reference checking is an important source of information, which if ignored can lead to negligent or wrongful-hiring lawsuits. However, feat of civil litigation has led some Canadian companies to adopt a policy of “not references” or only to confirm former position and dates of employment.

LECTURE OUTLINE RECRUITMENT Recruitment is the process of searching for and locating an adequate number of qualified job candidates, from whom the organization may select the most appropriate to staff its job requirements.

The process begins when the need to fill a position is identified and ends with the receipt of résumés and/or completed application forms.

Authority for recruiting is generally delegated to HR staff; in large organizations HR specialists known as recruiters find and attract qualified candidates on a continual basis.

1. Employer Branding As technology has expanded its reach to passive and active job seekers through mobile devices and professional networking sites, contemporary HR professionals are realizing the importance of marketing strategies is seeking talent. Employer Branding is the image or impression of an organization as an employer of choice, based on the perceived benefits of being employed by the organization; branding is particularly important during the recruiting process. Employer branding involves three steps: (See Table 5.1 p.91) 1. Define the target audience, where to find them, and what they want from an employer.

2. Develop the employee value proposition – the specific reasons why the organization is a unique place to work and more attractive than other organizations.

3. Communicate the brand by incorporating the value proposition into all recruitment efforts.

I.

THE RECRUITMENT PROCESS

There are four steps in the recruitment process (see Fig. 5.2 p. 92) 1.

2.

3.

4.

Identify job openings.

Specify job requirements Select methods of recruitment Generate pool of qualified candidates

Recruiters must be aware of several constraints on the recruitment process such as: Promote-from-within Policies – positions must be posted internally first (especially in unionized environments); recruiters cannot begin to seek external candidates until the period is over, even if he or she is aware that there are no suitable internal candidates.

Compensation Policies – pay structure and benefits package influence the attractiveness of the job to .

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potential applicants; recruiters rarely have the authority to exceed established pay ranges, pay above midpoint, or offer non-standard benefits Employment Equity Plan – specify the organization's goals and timetables pertaining to the hiring of designated group members; recruiters often need to use non-traditional (outreach) strategies to increase the number of qualified candidates from the designated groups (women, visible minorities, disabled, aboriginals)

Inducements of Competitors – monetary and non-monetary inducements offered by the competition may lure qualified candidates away; recruiters must try to meet the prevailing standards or use alternative inducements while ensuring they do not make promises they cannot keep or the firm can be charged with negligent misrepresentation.

Labour Supply – The emerging skills shortage makes recruiting more difficult; recruiters need to be ready to make substantial changes in recruitment practices.

Teaching Tip: Students very often find it difficult to distinguish between recruitment and selection.

To help with this have students review job postings and ads to determine what position the employer is trying to fill and how the employer is trying to attract a candidate to their organization.

II. RECRUITING FROM WITHIN THE ORGANIZATION Current employees are generally the largest source of recruits.

Advantages of internal recruitment are:  employees see reward for competence; enhances commitment, morale, and performance.  insiders may be more committed to company’s goals and less likely to leave.  managers are provided with a longer-term perspective when making business decisions.  firm is likely to have a more accurate assessment of the person’s skills  inside candidates require less orientation than outsiders.

Disadvantages of internal recruitment are:  unsuccessful employees may become discontented, especially if feedback is not provided  managers may be required to post all job openings and interview all inside candidates, wasting considerable time and creating false hopes on the part of those employees not genuinely being considered.  employees may not accept a boss appointed from within their own ranks  newly chosen leaders may have difficulty adjusting to no longer being “one of the gang.”  increases the possibility of “inbreeding.”; tendency to make decisions “by the book” and to maintain the status quo, even when a new and innovative direction is needed.

1. Internal Recruitment Methods Recruiting from within can be accomplished by using job posting, human resources records, and skills inventories. a. Job Posting is a process of notifying current employees about vacant positions via, the company’s intranet. Content of job postings includes job title, duties, qualifications, hours of work, pay range, posting date, and closing date As illustrated in Figure 5.3 (p. 94), there are .

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advantages and disadvantages to using job postings. b. Human Resources Records – Human resources records are often consulted to ensure that qualified individuals are notified, in person, of vacant positions. An examination of employee files may uncover: employees who are working in jobs below their education or skill levels; people who already have the requisite KSAs; or persons with the potential to move into the vacant position if given some additional training. c. Skills Inventories – Skills inventories are an even better reference tool. Whether computerized or manual, referring to such inventories ensures that qualified internal d. candidates are identified and considered for transfer or promotion when opportunities arise.

Teaching Tip: Some low tech job posting methods may seem out of date in a smartphone enabled world. Have students discuss the use of smartphone technology (mobile apps) for job postings but also why low tech methods are also necessary or useful even today.

2. Limitations of Recruiting from Within Besides the disadvantages previously identified, there are a few other limitations in regards to i n ter n al recruiting . One is an i n s u f f i c i e n t num ber o f q u a l i f i e d internal c a n di d ate s , especially for non-entry level and specialized positions. It may be quicker to bring in an external candidate if a job is vacated unexpectedly or if the organization wants to acquire new knowledge/expertise, gain new ideas, and revitalize the department or organization

III. RECRUITING FROM OUTSIDE THE ORGANIZATION In contrast to internal recruitment, the advantages of external recruitment include:     

Generation of a larger pool of qualified candidates, impacts quality of the selection decision.

Availability of a more diverse applicant pool, which can assist in meeting employment equity goals and timetables.

Acquisition of skills or knowledge not currently available within the organization and/or new ideas and creative problem-solving techniques.

Elimination of rivalry and competition caused by employees jockeying for transfers and promotions, which can hinder interpersonal and interdepartmental cooperation.

Potential cost savings resulting from hiring individuals who already have the skills, rather than providing extensive training.

1. Planning External Recruitment Several factors should be considered including type of job, and effectiveness of the external recruitment method. Effectiveness can be measured using yield ratios (see Fig.4.7, p. 99) and time-lapse data (time from initiation of recruitment activity to first day of work by successful candidate).

2. External Recruitment Methods Organizations use a wide range of recruitment methods to attract interest from qualified candidates for current and future job vacancies. Such approaches range from the tradition use of job applications to contemporary, web-based sources such as job boards and social media. The following external recruitment .

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methods illustrate the notion of “pipelines” connecting external candidate supply sources to the company’s talent acquisition team.

a. Cold calls - walk-ins (go in person without referral or invitation) and write-ins (submit unsolicited résumés); inexpensive, documents can be scanned and stored b. Job Applications and Resumes - For most employers completion of an application form is the last step in the recruitment process and provides efficient means of collecting verifiable historical data in a standardized format, even if a detailed résumé has already been submitted. Standardized application forms are requested from candidate because:      

Candidate comparison is facilitated as information is collected in a uniform manner The information is what the organization specifically requests The application for, if done on site, provides an example of the candidate’s own work Authorization for reference check is generally given on an application form Applicants are asked to acknowledge that their information is true and accurate Applicants may have the option of stating if they are a member of a designated group

One type of application form that can be used to predict performance is a biographical information blank (BIB), also known as biodata form. Essentially, it is a more detailed version of an application form, focusing on biographical data found to be predictive of job success. Questions relating to age, gender, race or other grounds prohibited under human rights legislation cannot be used.

Increasingly application forms are provided and completed online to reduce risk of lost applications, increase exposure level of the job, reduce likelihood of biases, and allow candidates to complete their application 24/7. The downside is that online applications tend to dramatically increase the volume of applications, although HRIS can be used to automatically code and pre-screen candidates.

Teaching Tip: Have students discuss their experiences with online application forms in terms of necessity, ease of use, and their perception of organization based on the online application process.

b. Employee referrals – low cost, but can result in systemic discrimination, inbreeding, and problems associated with nepotism (hiring or not hiring of relatives) c. Former employees – may be interested organization, organization knows them

in rejoining “boomerangs”’,

know

the

d. Educational institutions – good for jobs needing education but not as much experience; process can start via co-op, field placement and internship opportunities; schools have career centres to promote opportunities and help prepare students to interact with recruiters e. Job fairs – attracts large number of applicants, allows face-to-face promotion of organization and pre-screening, can also be done online f.

Professional and trade associations – actively engaged in trying to place their members, have newsletters, magazines, websites and sometimes online, searchable databases; may attract active job seekers as well as those who had not considered a job change (passive job seekers)

g. Labour organizations – have union hiring halls (physical and virtual); maintain roster of available members; fill requests from recruiters .

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Teaching tip: Many students may be unaware of professional organizations and labour unions as a recruitment mechanism. Asking groups of student how they would go about recruiting candidates with very specific, and credentialed, skill sets can get students to think of these types of organizations h. Military personnel – Canadian Forces Liaison Council CFLC) responsible for promoting hiring of reservists by civilian employers. REAP program provides access to more than 300 military units at no charge a. Print advertising – still very common method (e.g. newspapers local and national, technical journals, billboards); decide on want ad or blind ad; use four-point AIDA guide (Attract attention, develop Interest, create Desire, instigate Action) Teaching Tip: Students are often heavily focused on online as their default communication media.

Discuss what demographic would be recruited through non electronic communication and for what skill set would more traditional communication be more successful as a recruiting medium.

Online recruiting – used by majority of companies and job seekers; provides large audience for postings; provides access to online job seeker databases. Types include internet job boards (e.g.

Workopolis and Monster.ca), corporate websites and social media. Downside is sheer volume of applications and number of unqualified applicants who have to be screened. a. Online networking sites (social media) – e.g. Facebook, LinkedIn, Twitter and other social media, firms create company profiles, virtual recruitment booths, low cost access to large number of job seekers Teaching Tip: Organizations are increasingly using social media not just to find but also to pre- screen candidates and are requiring candidates to provide social media passwords. Use the Teaching Tip: Discuss all of the ways organizations can use social media to find out about you and what is and isn’t acceptable to students. Would students even consider finding a job through Facebook, let alone being pre-screened?

Agency Recruiters b. Employment and Social Development Canada (ESDC) – runs “Job Bank” largest, web-based network of job posting available to Canadian employers at no charge; helps unemployed find work and firms hire unemployed workers through government programs and tools such as “Job Match” c. Executive search firms –fee-based service used to fill critical positions (middle to senior- level professional and managerial); often specialize in particular type of talent, know and understand market, have many contacts, adept at contacting currently employed candidates “headhunting”; expensive but worth the money, highly dependent on accurate and complete information, can sometimes engage in game playing; CPC designation signifies education, testing and recruiter commitment to best practices d. Private employment agencies – assist with fee-based searches for c l e r ic a l staff , functional specialists, and technical employees; solicit job seekers through job boards, advertising, walkins and write-ins; useful when hiring firm does not have HR department, has been unsuccessful in past recruiting, job needs to be filled quickly, need to attract larger number of designated group members, desire to reach out to currently employed. .

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Temporary help agencies e.g. Kelly Services, Office Overload; workers remain employees of the agency and are reassigned as needed; benefits include – lower cost, immediate substitution/replacement, tend to be highly motivated i.

Contract workers – develop work relationships directly with the employer for a specific type of work or period of time, often professionals with specialized skills, many prefer selfemployment, others have been downsized and are unable to find full-time permanent employment

Teaching Tip: Given that a number of contract workers would prefer permanent employment, see what students have to say about whether it is ethical or socially responsible to keep extending the contracts of contract workers, rather than hiring them as permanent employees to avoid paying them the cost of employee benefits.

IV. RECRUTING A MORE DIVERSE WORKFORCE 1. Attracting Older Workers – tend to have high job satisfaction, loyal and committed to organization, strong work ethic, good people skills, willingness to work in variety of roles; recruiters need to deal with stereotypes of older workers held by other employees, ensure HR policies do not discourage recruitment of older workers, develop flexible work arrangements, redesign jobs as necessary, and specifically target mature workers 2. Attracting Younger Employees – G e n e r a t i o n Y ( M i l l e n n i a l s b o r n b e t w e e n 1 9 8 2 & 2 0 0 4 ) bring energy, enthusiasm and physical strength, often mirror customer base; want to work independently and have work-life balance and want transparency in policies and procedures; recruiters need to promote variety of experiences available, social responsibility, diversity, and creativity Teaching Tip: Have students find and critique job ads that are supposedly aimed at them.

3. Recruiting Designated Group Members – an employers’ commitment to diversity through recruitment that targets designated group members is often the first sign of their commitment to diversity and quality; recruiters should consider linkages with organizations and agencies, advertising in alternative publications, and participating in government programs Teaching Tip: The Workforce Diversity Discussion Box (p. 104) illustrates a major challenge associated with recruiting the disabled. You can also use this as a launching pad for a more in- depth discussion of other issues that face disabled job seekers

Recruiting Metrics HR professionals must evaluate expenditures on the range of recruitment tools available in their talent acquisition efforts. The recognized metrics in Figure 5.6 assist recruiters in deciding on cost-effective search tools for preferred job candidates: Time lapsed per hire, Cost per hire, Offers-applicant cost, Quality of hires and costs and Yield ratio.

I.

THE STRATEGIC IMPORTANCE OF EMPLOYEE SELECTION .

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Selection is the process of choosing among individuals with the relevant qualifications to fill existing or projected job openings. The purpose of selection is to find the “best” candidate for the job – an individual who possesses the required KSAs and personality, who will perform well, embrace the corporate mission and values, and fit the organizational culture. Hiring the wrong people means strategic objectives cannot be met due to underperformance, and additional cost (time and money) has to be spent in starting over with recruitment and selection for that vacancy. Ineffective selection can also mean increased legal liability in regards to failure to protect human rights, liability for negligent hiring and wrongful dismissal.

Suggested guidelines for avoiding these negative legal consequences (see p. 107) are: 1. Ensuring all selection criteria and strategies are based on the job description and specification.

2. Do not Ask questions that, directly or indirectly, violate human rights legislation.

3. Obtaining written authorization for reference checking from prospective employees, and check references carefully.

4. Save all records and information obtained about the applicant during each stage of the selection process.

5. Rejecting applicants who make false statements on their application forms or résumés.

6. Treat all applicants in the same manner regardless of personal factors 1. Supply Challenges Although it is desirable to have a larger, rather than smaller pool of recruits there may be labour shortages for some positions and labour surpluses for others.

Selection ratio = # of applicants hired/total # of applicants Teaching Tip: have students discuss the pros and cons of having too many and too few qualified recruits. Discuss the problem of not being able to know who saw your posting/advertisement but did not apply, for whatever reason.

2. The Selection Process Most firms use a sequential selection system involving a series of successive steps – multiple hurdle strategy. Candidate only move forward in the process if they meet each hurdle in turn.

Teaching Tip: An alternate less common strategy is the compensatory strategy where selection decisions are not made until a number of pieces of information have been collected about each candidate. This way a higher score on a later assessment can compensate for a lower score on an early assessment. Have students discuss the pros and cons in regards to GPA being used as an early hurdle.

The selection process involves drawing on multiple sources of information acquired through a range of selection instruments/tools/devices; processes vary across organizations. Six common steps are shown in Fig. 5.7 on p. 1 0 7 ; at each step carefully selected selection criteria should be used.

Teaching Tip: Discuss the ordering of interviews, tests, and background investigations/reference checks.

Identify situations in which the order shows in Fig. 5.7 (p. 107) might be different. .

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3. Acquiring Employees and the Law The entire recruitment and selection procedures must comply with human rights legislation. All information collected from time an ad is posted to selection decision must be free from questions that would directly or indirectly classify candidates on the basis of any of the prohibited grounds under human rights legislation or an unsuccessful candidate may challenge the legality of the process.

There are six guidelines for managing a legally defensible process:  Ensure that all selection criteria and strategies are based on the job description and job specifications.  Do not ask questions that would violate human rights indirectly or directly. Questions cannot be asked about the candidates’ marital status, child care arrangements, ethnic background or workers compensation history, for example.  Obtain written authorization for reference checking from prospective employees and check references carefully.  Save all records and information obtained about the application during each stage of the selection process.  Reject applicants who make false statements on their application forms or resumes.  Treat all candidates in exactly the same manner, regardless of personal factors (e.g., gender, marital status). However accommodation must be provided to applicants with disabilities. i Teaching Tip: This is a great point at which to have students in pairs or groups discuss past experiences (self or relatives/friends) that they believe were legally questionable.

STEP 1: PRELIMINARY APPLICANT SCREENING First contact is often through the Web. Initial applicant screening is generally performed by members of the HR department. Application forms and résumés are reviewed. Those candidates not meeting the "must have" selection criteria are eliminated first. Then the remaining applications are examined, and those candidates who most closely match the remaining job specifications are identified and given further consideration.

Teaching Tip: Bring in or have students research the use of HRIS to automate pre-screening and discuss how students can improve the chances of their application making it through the first cut. You may want to have student go to the campus career centre website for relevant tips and available workshops.

STEP 2: SELECTION TESTING Approximately 2/3 of Canadian organizations report using selection tests; tests are efficient, standardized procedures for screening large numbers of applicants. Organizations can purchase premade tests or develop their own in-house tests, however, all tests and other selection techniques are only useful if they can be shown to be reliable and valid. Information on reliability and validity is available for reputable tests.

1. The Importance of Reliability and Validity a. Reliability captures the degree to which interviews, tests, and other selection procedures .

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yield comparable data over time; in other words, the degree of dependability, consistency, or stability of the measures used. Diminished when applicant is tired/unwell, test setting is noisy or uncomfortable, or questions are just answered randomly b. Validity, in the context of selection, captures the accuracy with which a predictor measures what it is intended to measure. There are three distinct types of validity: criterion- related; content; and construct validity.

Criterion-Related validity is the extent to which a selection tool predicts or significantly correlates with important elements of work behaviour ii. Content validity is the extent to which a selection instrument adequately samples the knowledge and skills needed to perform the job iii. Construct validity – The extent to which a selection tool measures a theoretical construct or trait deemed necessary to perform the job successfully (e.g. intelligence, or leadership) i.

Teaching Tip: Students often have difficulty with the concepts of validity and reliability. It is often easy to understand when looking at a tangible example, for example, a rule is a valid tool for measuring the depth of my coffee cup but is quite inappropriate for measuring temperature. The concepts are more difficult when students consider measures that they view as more abstract such as behaviour in a job interview or whether a particular test is valid for a particular position Experts also recommend that separate validation studies be administered for different subgroups, such as visible minorities and women. If differential validity is not assessed, it is possible for a test or other procedure to be a valid predictor of job success for one group (such as white male applicants) but not for all candidates, thereby leading to systemic discrimination.

This is true particularly for personality, intelligence testing or other psychological measures.

Teaching Tip: Discuss why test results would be different for different groups (not different individuals) to uncover issues associated with experience-based content and second language literacy and fluency. For instance, many tests assume domestic education (e.g. historical facts) and are timed for a native speaking audience.

2. Tests of Cognitive Abilities

Cognitive (mental) abilities capture various aspects of the power of the brain (e.g. intelligence, emotional intelligence, memory, and inductive reasoning). a. Intelligence tests (IQ) tests (e.g. Wonderlic, Stanford-Binet, Wechsler) are tests of general intellectual abilities. They measure not a single "intelligence" trait, but rather a number of abilities including memory, vocabulary, verbal fluency, and numerical ability. Easy to administer via pen & paper or online and Wonderlic can be used with groups.

b. Emotional intelligence (EI) tests (e.g. EQ-I), EQ Map, MSCEIT), and EIQ) provide a score referred to as the emotional quotient (EQ) which measures a person’s ability to monitor his or her own emotions and the emotions of others and to use that knowledge to guide thoughts and actions. Someone with a high emotional quotient (EQ) is self- aware, can control his or her impulses, motivates him or herself, and demonstrates empathy and social awareness; however, EI tests have limited and controversial empirical evidence to support validity claims.

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c. Specific cognitive abilities tests, often called aptitude tests, include tests of thinking skills such as inductive and deductive reasoning, verbal comprehension, memory and numerical ability (see example in Fig. 5.8, p. 111). Aptitude measures an individual’s potential to perform a job, provided s/he is given proper training.

3. Tests of Motor and Physical Abilities (e.g. Stromberg Dexterity Test, Minnesota Rate of Manipulation Test, Purdue Pegboard, and the Crawford Small Parts Dexterity Test (see Fig. 5.9, p.

1 1 2 )) assess abilities such as finger dexterity, manual dexterity, speed for arm movement, and reaction time. Functional ability evaluations (FAE) measure abilities related to lifting, pulling, pushing, sitting, squatting, climbing, and carrying Avoid problems by making sure all motor and physical ability tests are based on job duties identified through an up to date job analysis.

Teaching Tip: Have students identify the motor and physical abilities necessary for a past or current job, and whether this requirement could be reasonably accommodated without undue hardship for someone who was disabled in this regard.

4. Measuring Personality and Interests focuses on motivational forces that would explain why one candidate would be more suited to a job than another.

Personality tests (e.g. Myers-Briggs Type Indicator, MMPI, and Big Five) measure basic aspects of an applicant's personality, such as introversion, stability, motivation, neurotic tendency, selfconfidence, self-sufficiency, and sociability). The Big Five measures extraversion, emotional stability (neuroticism), agreeableness, openness to experience and conscientiousness, with conscientiousness being the number one predictor of job performance across all performance criteria for every occupation. Openness and extroversion predict training proficiency and extraversion predicts performance for managers and sales employees. Applicants do try to fake personality tests when they are motivated to do so but individual differences exist in the ability to fake.

Thematic apperception tests present an ambiguous stimulus (see Fig. 5.10, p. 113) and ask for applicant’s interpretation which supposedly projects existing established attitudes.

Interest inventories (e.g. Strong-Campbell Interest Inventory) compare a candidate’s interests with those of people already in various occupations, as a good fit means new employees are more likely to be successful.

Teaching Tip: Use a show of hands to find out how many students have taken a personality test of some kind (M-B, Big Five or something in a magazine). Assign students to take an interest inventory offered online by the campus career centre, before class and discuss the results.

5. Achievement Tests are widely used in selection to measure what an individual has learned to date through education and/or experience; achievement tests capture both knowledge (know about) and proficiency/skill (know how).

6. Work Sampling is among the best predictors of job performance, because it is based on having the applicant perform actual key tasks. Work samples are validated by comparing applicant scores to later job performance scores to establish nature of relationship and cut- off-scores (i.e. once a baseline has been established, there is no need to validate every time).

Teaching Tip: Have students describe a valid work sample for a particular type of job. .

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7. Management Assessment Centres are not a place, but are comprehensive, systematic procedures used to assess the management potential of groups of candidates (often 10 – 12).

This is done using a combination of realistic exercises and management games (e.g. in- basket exercise, leaderless group discussion, problem-solving/simulations) in combination with objective testing, presentations and interviews 8. Situational Testing presents candidates with hypothetical situations representative of the job for which they are applying and are evaluated on their responses. Situational tests are one way of providing a realistic job preview and tend to be an integral part of management assessment centres. They have high validity for predicting overall job performance as well as core technical proficiency, job dedication and interpersonal facilitation. They provide valid predictive information over and above cognitive ability tests, personality tests, and job experience.

9. Micro-Assessments are a series of verbal, paper-based, or computer-based questions and exercises that a candidate is required to complete covering the range of activities required on the job for which s/he is applying (entirely performance-based).

10. Physical Examination, Substance Abuse Testing, and Polygraph Tests The use of medical examinations has decreased, due to decline in manufacturing but also legal concerns. They are only permitted after a written offer of employment has been extended (except in the case of bona fide occupational requirements). Three main reasons why firms may include a medical examination as a step in the selection process: (1) to determine that the applicant qualifies for the physical requirements of the position and, if not, to document any accommodation requirements; (2) to establish a record and baseline of the applicant’s health for the purpose of future insurance or compensation claims; and (3) to reduce absenteeism and accidents by enabling the applicant and physician to identify any health- or safety-related issues or concerns that need to be addressed.

Substance Abuse In Canada employers are not permitted to screen candidates for substance abuse, because addiction to drugs or alcohol is considered to be a disability, and an applicant cannot be discriminated against during selection based on a disability. Pre- employment alcohol and drug testing is only permitted after a written job offer has been extended and a bona fide case has been established, although this is rare even in safety intensive industries.

Teaching Tip: Discuss recent news stories that the Canadian oil and gas industry are regularly testing for substance abuse despite being on shaky legal ground, particularly as recent court rulings have further restricted the practice in the oil patch. Compare the perspective on drug testing by American organizations (pervasive) versus the limited perspective of Canadian organizations. Discuss the issue of use versus abuse and whether selection tests can make the distinction (without condoning use of illegal substances). Another issue is whether tests measure past use versus present impairment. A further potential topic is performance- enhancing versus performance-impairing substances.

Polygraph testing has been rejected by the scientific community for being unreliable and invalid and by the law. It is better to use validated integrity or honesty tests.

Teaching Tip: Students have likely seen polygraph testing on “reality” type tv shows and in the movies.

It is fun to discuss the issues around the use of them in the media!

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STEP 3: THE SELECTION INTERVIEW Both interviewers and applicants have objectives that they try to fulfil through a selection interview. Interviewer objectives include: assessing applicants' qualifications; observing relevant aspects of applicants' behaviour, such as verbal communication skills, degree of self- confidence, and interpersonal skills; gathering information about applicants that helps to predict future performance (how long they are likely to remain in the organization); providing candidates with information about the job; promoting the organization and highlighting its attractiveness; and determining how well the applicants would fit into the organization. Typical objectives of job applicants include: presenting a positive image of themselves; selling their skills and marketing their positive attributes; and gathering information about the job and the organization so that they can make an informed decision.

1. Types of Interviews (structure, content, administration) a. Structure - unstructured, structured (high validity and reliability, but low flexibility), mixed (semi-structured); gender differences affected by interview structure b. Content – situational interview (questions about future behaviour) and/or behavioural description interview (BDI) (questions about past behaviour) c. Administering the interview – one-on-one, panel interview or mass interview; sequentially or all at once; face-to-face or technology-aided (phone, videoconferencing, including Skype) Teaching Tip: Do a survey to find out what types of interviews students have had and their perceptions of the various types. Discuss comfort level with phone and Skype interviews.

2. Common Interviewing Mistakes Research shows that interviewers (both HR staff and hiring managers) make one or more common mistakes that reduce the validity and reliability of selection interviews. Interviews can be improved by paying attention the following: a. Poor planning – questions not written in advance, no thought to structure or administration b. Snap judgements – decision based on first impressions c. Negative emphasis – more weight given to unfavourable information d. Halo effects – subsequent ratings distorted by first impression on one or more factors e. Poor knowledge of the job – ratings end up being made based on stereotypes f. Contrast (candidate-order) error – distortion due to rating of prior candidate (good or bad) g. Influence of non-verbal behaviour – eye contact, head moving, smiling affect ratings, but nonverbal behaviour is tied to ethnicity cultural background. Attractiveness and gender also affect ratings – old is unattractive h. Leading – guiding candidates directly or indirectly to “right” answer i. Too much/too little talking – 30/70 rule (70% of interview time should be for applicant) j. Similar-to-me bias – distortion due to similarity in demographics, personality, attitudinal characteristics. Suppresses workplace diversity Teaching Tip: Discuss how to plan for assessment accommodation, rather than get caught off guard.

Reinforce that it is up to the candidate to request accommodation, not for the recruiter to assume accommodation is needed or wanted.

Teaching Tip: This is a great opportunity to have students discuss past experiences but more importantly the steps organizations should take in regards to choosing and training those .

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involved in the selection process, particularly in training interviewers as there is significant potential for perceptual error.

3. Designing an Effective Interview Combine formats to gain advantages of each and offset disadvantages of each. Recommended approach is semi-structured with focus on job-related situational and behavioural questions.

4. Conducting an Effective Interview a. Planning the interview – who will be involved, where will interview be held, how will questions be asked and by whom b. Establishing rapport – friendly greeting, put at ease but avoid human rights related topics e.g. what’s the origin of that name? c. Asking questions – write out in advance, listen carefully, encourage expression, record answers; taking notes improves validity – reduces likelihood of forgetting or reconstructing to confirm biases/stereotypes; reduces snap judgements and helps prevent halo error, negative emphasis, and candidate-order errors; ensures consistent treatment of all applicants (see Fig. 5.115, p. 121133) for sample structured interview questions) d. Closing the interview – allow time for candidates’ own questions, advocate/promote firm and position, inform candidate about next steps and timelines Teaching Tip: Ask students by a show of hands whether they had sufficient opportunity to ask questions and whether they received information on the decision-making process. Also, reinforce the importance of having questions to ask when you go to a job interview, especially questions that show that you already know something about the organization. e. Evaluating the candidate – independently rate candidate immediately following interview, based on review of notes or observation form; do not share ratings until all selection information for that stage has been obtained.

STEP 4: BACKGROUND INVESTIGATION/REFERENCE CHECKING Background investigation (education, work history, criminal record, and so on) and reference checking are important to verify accuracy of candidate-provided information (answers, documentation). At least 1/3 of candidates lie about missing or inadequate qualifications, even for senior management and healthcare jobs (see Fig. 5.12, p. 122). Surveys indicate that most (at least 90%) of Canadian organizations conduct background checks typically using a third party reference-checking service or a hired consultant.

1. Information to Be Verified – criminal record, education, five years of employment, 3 performancerelated references from past supervisors, credit check for financially sensitive positions 2. Obtaining Written Permission – must be obtained in advance from applicant, usually through a permission section on the application form; some employers will ask for written authorization before providing reference. Note that there is an increasing use of social media sources which may increase possibility of bringing non-job related information into consideration (see Fig. 5.13, p. 123) and obtaining information that is related to a prohibited ground or discrimination (e.g. age, .

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marital or family status) 3. Privacy Considerations – Background checks need to be conducted in accordance with the applicable federal or provincial laws. They impose limitations on how to do these checks and how to handle the collected information.

4. Teaching Tip: Have students research and compare the privacy legislation in 2 different provinces.

5. Providing References – qualified privilege protects the reference giver if they provide information that is negative as long as it is honest, fair, candid and given in confidence for a public purpose (not gossip). Overly positively references are considered negligent misrepresentation. “no reference” policy adopted by a number of organizations means confirmation only of position(s) held and dates of employment.

Teaching Tip: There are a number of good examples in the textbook (p. 123) but there are also news stories that appear almost on a daily basis about forged qualifications and/or failure to adequately verify background information and references. You can assign research by province/territory or have students do some international research to find examples from other countries, as this tends to be a global phenomenon.

STEP 5: SUPERVISORY INTERVIEW AND REALISTIC JOB PREVIEW Supervisory interviews are usually conducted after pre-screening; immediate supervisor interviews short-list of candidates. This is because the supervisor knows technical aspects of job, can provide a more realistic job preview, has to work closely and must feel comfortable with person, knows the current group into which the new person must fit. Involvement by supervisor tends to increase commitment and responsibility to new hire (provision of advice and guidance) increasing chances of successful transition.

Teaching Tip: Discuss how supervisor discomfort with “different” or less familiar types of candidates (women, visible minorities, Aboriginal persons, disabled) could highjack an otherwise objective process and what you as HR person would do if you thought this was happening.

STEP 6: HIRING DECISION AND CANDIDATE NOTIFICATION To make the hiring decision, information from the multiple selection techniques and sources must be combined; the applicant who is the best fit with the selection criteria must be identified. HR department can help integrate information and present in easy to view manner; immediate supervisors usually responsible for final decision.

Review of data is often subjective which can reduce validity and reliability unless tests are objectively scored and candidate-rating sheets are developed based on weighted want criteria. An alternate approach which tends to maintain higher validity and reliability is to use a mathematicallydriven statistical strategy (identification of valid and weighting of scores through statistical methods, such as multiple regression).

Teaching Tip: Use the Ethical Dilemmas (p. 116 and p. 137) to discuss the role of nepotism in the final hiring decision and how much feedback should be given to unsuccessful candidates. .

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All information collected during recruitment and selection should be kept on file, in the event of a human rights challenge, negligent hiring charge, or union grievance.

Initial job offers can be extended to the successful candidate by phone, but must be followed up with a written employment offer that clearly specifies important terms and conditions of employment, such as starting date, starting salary, probation period, and so on. Time to respond should be reasonable and closely qualified candidates can be offered the job if the first choice declines. If there isn’t a good second choice candidate then the organization can choose to leave the position vacant or start a brand new recruitment search.

ETHICAL DILEMMAS Suppose a manager has already made up his or her mind about who will be selected for an internal position. However, an internal job posting and subsequent interviews have shown another equally qualified candidate. Who should be offered the position? (p. 94) On the one hand, from an interpersonal perspective, the supervisor may get along better with his or her choice than the other person and would be more accepting of that individual. He or she knows the team dynamics and if that person would fit in that role and in that team. On the other hand, it may be seen as favoritism and bias and that supervisor’s reputation could be tarnished. Ideally, further testing may help to make the decision clearer.

As the company recruiter, how would you handle a request from the CEO that you hire her son for a summer job, knowing that, given current hiring constraints, the sons and daughters of other employees will not be able to obtain such positions? (p. 106) Some will argue that when the CEO makes a request, it cannot be ignored. After all, she is the boss!

Others, however, will indicate that they feel it would be morally and ethically incorrect to give preferential treatment in the form of a summer job to the son of the CEO, when the sons and daughters of other employees will not have equal opportunity to attain such positions. While a request from the CEO cannot be ignored, perhaps a compromise is possible. After all, presumably her request is based on a desire to see her son working for the summer. Thus, helping her son to obtain employment – at another firm – would meet her needs and yet not compromise my ethics as the firm’s recruiter.

As the HR manager, how much feedback should you provide to those individuals not selected for a position? (p. 125) Some will strongly recommend that I should provide those individuals not selected for a position with as little feedback as possible and should rarely, if ever, discuss the underlying reasons for the firm’s decision. There are several sound arguments to support this viewpoint:  

It is frequently awkward, if not tactically impossible, to tell the applicant the real reason for his or her rejection.

Trying to provide honest feedback may lead to a time-consuming argument that I, as the individual relaying the message, cannot win.

Some experts feel strongly that candidates should never be rejected. Instead, the impression should be conveyed that the applicant was not found wanting, but that the candidate selected simply matches the selection criteria more closely. .

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Others will argue that it is both appropriate and desirable for me to provide honest feedback to those candidates who were not selected, especially if the hiring decision is based on bona fide selection criteria and a series of valid and reliable steps. It can be very helpful to job seekers to receive tactfully worded and honest feedback, especially if it is developmental in nature. For example, listening to such feedback and acting upon it may enable them to correct a problem, such as the need to practice interview skills to present themselves more effectively, or to overcome a skills weakness by acquiring additional experience, training, or education. Such feedback is particularly desirable for internal applicants.

Sometimes applicants who were not selected for the position in question may be worthy of consideration for future openings. If so, most will argue that they should be informed of this fact and reassured that their résumé and application form data will be filed appropriately.

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KEY TERMS achievement tests Tests used to measure knowledge and/or proficiency acquired through education, training, or experience. (p. 114) aptitude tests Tests that measure an individual's aptitude or potential to perform a job provided he or she is given proper training. (p.111) behavioural or behaviour descriptive interview (BDI) A series of job-related questions that focus on relevant past job-related behaviours. (p. 117) biographical information blank (BIB) A detailed job application form requesting biographical data found to be predictive of success on the job, pertaining to background, experiences, and preferences.

Responses are scored. (p. 96) blind ad A recruitment ad in which the identity and address of the employer are omitted. (p. 99) construct validity The extent to which a selection tool measures a theoretical construct or trait deemed necessary to perform the job successfully. (p. 110) content validity The extent to which a selection instrument, such as a test, adequately samples the knowledge and skills needed to perform the job. (p. 110) contract workers Employees who develop work relationships directly with the employer for a specific type of work or period of time. (p. 101) contrast or candidate-order error An error of judgment on the part of the interviewer because of interviewing one or more very good or very bad candidates just before the interview in question. (p. 119) criterion-related validity The extent to which a selection tool predicts or significantly correlates with important elements of work behaviour. (p. 109) differential validity Confirmation that the selection tool accurately predicts the performance of all possible employee subgroups, including white males, women, visible minorities, persons with disabilities, and Aboriginal peoples. (p. 108) emotional intelligence (EI) tests Tests that measure a person’s ability to monitor his or her own emotions and the emotions of others and to use that knowledge to guide thoughts and actions. (p.

110) employer branding The image or impression of an organization as an employer based on the benefits of being employed by the organization (p. 91) halo effect A positive initial impression that distorts an interviewer’s rating of a candidate because subsequent information is judged with a positive bias. (p. 119) human capital theory The accumulation of firm specific knowledge and experience involving a joint investment by both the employee and employer; therefore, both parties benefit from maintaining a long term relationship (p 93) .

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intelligence (IQ) tests Tests that measure general intellectual abilities, such as verbal comprehension, inductive reasoning, memory, numerical ability, speed of perception, spatial visualization, and word fluency. (p. 110) interest inventories Tests that compare a candidate’s interests with those people in various occupations. (p. 114) job posting The process of notifying current employees about vacant positions. (p. 94) management assessment centre A comprehensive, systematic procedure used to assess candidates’ management potential that uses a combination of realistic exercises, management games, objective testing, presentations, and interviews. (p. 114) micro-assessment A series of verbal, paper-based, or computer-based questions and exercises that a candidate is required to complete, covering the range of activities required on the job for which he or she is applying. (p. 115) mixed (semi-structured) interview An interview format that combines the structured and unstructured techniques. (p. 117) multiple-hurdle strategy An approach to selection involving a series of successive steps or hurdles.

Only candidates clearing the hurdle are permitted to move on to the next step. (p. 106)

nepotism A preference for hiring relatives of current employees. (p. 97) panel interview An interview in which a group of interviewers questions the applicant. (p. 118) personality tests Instruments used to measure basic aspects of personality, such as introversion, stability, motivation, neurotic tendency, self-confidence, self-sufficiency, and sociability. (p.113) realistic job preview (RJP) A strategy used to provide applicants with realistic information – both positive and negative – about the job demands, the organization's expectations, and the work environment. (p. 124) recruiter A specialist in recruitment, whose job it is to find and attract capable candidates. (p. 91) recruitment The process of searching out and attracting qualified job applicants, which begins with the identification of a position that requires staffing and is completed when résumés or completed application forms are received from an adequate number of applicants. (p. 90) reliability The degree to which interviews, tests, and other selection procedures yield comparable data over time; in other words, the degree of dependability, consistency, or stability of the measures used. (p. 108) selection The process of choosing individuals who have been recruited to fill existing or projected job openings. (p. 105) selection interview A procedure designed to predict future job performance on the basis of applicants' oral responses to oral inquiries. (p. 116) selection ratio The ratio of the number of applicants hired to total number of applicants. (p. 106) .

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situational interview A series of job-related questions that focus on how the candidate would behave in a given situation. (p. 117) situational tests Tests in which candidates are presented with hypothetical situations representative of the job for which they are applying and are evaluated on their responses. (p. 115) statistical strategy A more objective technique used to determine whom the job should be offered to; involves identifying the most valid predictors and weighting them through statistical methods, such as multiple regression. (p. 125) structured interview An interview following a set sequence of questions. (p. 117) talent acquisition An emerging HRM programming concept that is focused on finding, acquiring, assessing and hiring job candidates (p. 90) unstructured interview An unstructured, conversational-style interview. The interviewer pursues points of interest as they come up in response to questions. (p. 117) validity The accuracy with which a predictor measures what it is intended to measure. (p. 108) want ad A recruitment ad describing the job and its specifications, the compensation package, and the hiring employer. The address to which applications and/or résumés should be submitted is also provided. (p. 99)

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REVIEW AND DISCUSSION QUESTIONS (p. 126-127) 1. Discuss the advantages and disadvantages of recruiting from within the organization. Identify and describe the three tools that are used in this process. (p. 93-95 Filling open positions with inside candidates has several advantages:  employees see that competence is rewarded, thus enhancing commitment, morale, and performance.  having already been with the firm for some time, insiders may be more committed to company’s goals and less likely to leave.  managers are provided with a longer-term perspective when making business decisions.  it is generally safer to promote from within, since the firm is likely to have a more accurate assessment of the person’s skills than would otherwise be the case.  inside candidates require less orientation than outsiders.

Disadvantages associated with recruiting within the organization include:  employees who apply for jobs and don’t get them may become discontented.  managers may be required to post all job openings and interview all inside candidates, even when they already know whom they wish to hire, thus wasting considerable time and creating false hope on the part of those employees not genuinely being considered.  employees may be less satisfied and accepting of a boss appointed from within their own ranks than a newcomer.  it is sometimes difficult for a newly chosen leader to adjust to no longer being “one of the gang.”  there is a possibility of “inbreeding” reflected in a tendency to make decisions “by the book” and to maintain the status quo, even when a new and innovative direction is needed.

The three tools most frequently used are job postings, HR records and Skills inventories Job Posting is a process of notifying current employees about vacant positions via designated bulletin boards, employee publications, special-announcement handouts, the company’s intranet, or a 24hour telephone number. Content of job postings includes job title, duties, qualifications, hours of work, pay range, posting date, and closing date. As illustrated in Figure 4.6 (p. 98), there are advantages and disadvantages to using job postings.

Human resources records are often consulted to ensure that qualified individuals are notified, in person, of vacant positions. An examination of employee files may uncover: employees who are working in jobs below their education or skill levels; people who already have the requisite KSAs or persons with the potential to move into the vacant position if given some additional training.

Skills inventories are an even better reference tool. Whether computerized or manual, referring to such inventories ensures that qualified internal candidates are identified and considered for transfer or promotion when opportunities arise.

2. Brainstorm the advantages of external recruitment. Discuss the risks associated with external recruiting. (p. 95) The advantages of external recruitment include: .

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generation of a larger pool of qualified candidates, which may have a positive impact on the quality of the selection decision. availability of a more diverse applicant pool, which can assist in meeting employment equity goals and timetables. acquisition of skills or knowledge not currently available within the organization and/or new ideas and creative problem-solving techniques. elimination of rivalry and competition caused by employees jockeying for transfers and promotions, which can hinder interpersonal and interdepartmental cooperation. potential cost savings resulting from hiring individuals who already have the skills, rather than providing extensive training.

The risks associated with external recruiting are having to deal with a high volume of applicants, many of whom are unqualified, dealing with candidates who are “testing the market” but are not serious about taking the job if offered, and having to deal with dissatisfied internal candidates who believe that they should receive preference in hiring. HRIS, especially applicant tracking software can help to make the process more efficient. Organizations should ensure they have sound reasons for external recruiting and be open to discussing employee concerns about limited career opportunities. By definition outsiders are less known to the organization so verifying information is critical; candidates are motivated to display themselves in the best possible light and may not reveal all information and in some cases will openly misrepresent their qualifications.

3. Name two specific situations where a private employment agency be used for recruitment purposes? (p. 100-101) Private employment agencies are often called upon to provide assistance to employers seeking intermediate- to senior-level clerical staff, and professional, technical, or managerial employees. Such agencies take an employer’s request for recruits and then solicit job seekers, relying primarily on advertising and walk-ins/write-ins. They serve two basic functions: expanding the applicant pool and performing preliminary interviewing and screening. To match the employer’s job specifications with the abilities and interests of potential applicants, agencies may perform a range of functions, including: advertising; testing for skills, aptitudes, and interests; interviewing; and reference checking. It should be noted, though, that the amount of service provided varies widely, as does the level of professionalism and the caliber of staff.

4. Explain the differences among criterion-related validity, content validity, and construct validity. (p.

120 – 121) Validity in the context of selection is an indicator of the extent to which data from a selection technique, such as a test or interview, are related to or predictive of subsequent performance on the job. Separate validation studies of selection techniques should be conducted for different subgroups, such as visible minorities and women, in order to address differential validity.

Criterion-related validity is the extent to which a selection tool predicts or significantly correlates with important elements of work behaviour. Demonstrating criterion-related validity requires proving that those who do well on a test or in an interview, for example, also do well on the job, and that individuals who do poorly on the test or in the interview receive low job-performance ratings.

Content validity is assumed to exist when a selection instrument, such as a test, adequately samples the knowledge and skills needed to perform the job. The closer the content of the selection .

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instrument is to actual samples of work or work behaviour, the greater the content validity. For example, asking a candidate for a secretarial position to demonstrate word processing skills, as required on the job, has high content validity.

Construct validity is the extent to which a selection tool measures a theoretical construct or trait deemed necessary to perform the job successfully. Intelligence, verbal skills, analytical ability, and leadership skills are all examples of constructs. Measuring construct validity requires demonstrating that the psychological trait or attribute is related to satisfactory job performance, as well as showing that the test or other selection tool used accurately measures the psychological trait or attribute.

5. Discuss an advantage for two different types of testing used in the selection process and give an example of each. (p. 110-116) Testing types include Cognitive abilities, motor and physical abilities, personality and interests, achievement, work sampling, assessment centre, situational, micro assessment, physical examination and substance abuse

6. Explain the difference between situational and behavioural interviews. Give examples of situational and behavioural interview questions. (p. 116-117) Content of the Interview – Interviews can also be classified according to the content of their questions. A situational interview is one in which the questions focus on the individual's ability to project what his or her behaviour would be in a given situation. The underlying premise is that intentions predict behaviour. The interview can be both structured and situational, with predetermined questions requiring the candidate to project what his or her behaviour would be.

The behavioural interview or behaviour description interview (BDI) is gaining in popularity. This technique involves describing various situations and asking interviewees how they behaved in the past in such situations. Thus, while situational interviews ask interviewees to describe how they would react to a situation, the BDI asks interviewees to describe how they did react to situations in the past, giving specific examples. The underlying assumption is that the best predictor of future performance is past performance in similar circumstances.

Open-ended questions – primarily situational and behavioural – should then be developed for each of the KSAs to be assessed during the interview. Situational questions ask candidates to indicate how they would respond to a hypothetical situation that could actually occur on the job. Behavioural questions request specific examples of past behaviour. Job-knowledge and worker- requirements questions should also be included.

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CRITICAL THINKING QUESTIONS (p. 127) 1. What potential problems may result if the employer branding value proposition presented during the recruitment process is not reinforced once the new recruit is working for the organization? What could organizations do to avoid this situation? (p. 91- 92) An employee’s psychological contract (set of expectations of what will happen/what they will get) forms during the recruitment and selection process. If this contract is breached because value was misrepresented then this may create disenchanted employees who may leave and badmouth the organization or stay and create a negative environment for their co-workers. This has a financial impact by costing the company money for wasted hiring costs or lowered productivity. The company should make sure that all policies and practices are clearly aligned, with everyone walking the talk.

2. What i s a p o t e n t i a l a d v a n t a g e a n d a p o s s i b l e p r o b l e m in adopting a referral bonus programme payable to existing employees who refer external candidates for job openings? (p.

96-97) Costs are lower than most other recruiting methods. Some of the potential problems associated with employee referrals include the potential of inbreeding and nepotism to cause morale problems, and dissatisfaction of employees whose referral is not hired. Perhaps the biggest drawback, however, is that this method may result in systemic discrimination in workplaces that are not diverse, since employees tend to recommend individuals who have backgrounds similar to their own, in terms of race, ethnicity, religion. In addition, employees may put forward candidates who don’t work out once on the job, especially if the bonus is paid for the referral and not for the performance of the candidate in the months immediately after hiring.

Teaching Tip: Survey students to find out who would refer a friend or family member if a referral bonus was offered, first without a performance condition and second with a performance condition.

Students can also discuss how much money would motivate them to refer people from their social network, especially in terms of posting a job opportunity via Twitter or Facebook.

3. What are two advantages and two possible drawbacks of adopting an “internal applicants first” recruitment policy?

Internal candidates have firm-specific knowledge; employees feel valued when they see the opportunities to be promoted; they are more likely to remain committed to the organization and not leave; managers can look to the long-term for planning; the internal applicants are known to the organization so less risky than hiring an unknown; they require less orientation. Drawbacks include unsuccessful internal candidates may be upset and dissatisfied; current employees may be less accepting of an internal vs. external successful candidate; there Is the possibility of “inbreeding” (maintaining the status quo instead of innovation) 4. Assume you are the HR manager in a highly homogenous company that now seeks greater diversity i n its employee demographics. What are the key considerations to successfully c a r r y i n g o u t a n e w r e c r u i t m e n t s t r a t e g y ? (p. 101-104)

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Considerations include assessing why current recruitment strategies have not produced a diverse workforce to date and identifying alternate sources and methods for outreach that encourage a broader range of candidates. Working in partnership with organizations and associations may be more effective and efficient than trying to go it alone as they have the contacts, channels and expertise in communicating with their members. At the same time, you must be aware of a possible backlash from current employees who believe they or their family members will have limited opportunities in the future, especially if nepotism has been part of the corporate culture in the past.

You should closely monitor results from different external recruitment methods by using yield ratios to see which methods are most effective in making your workforce more diverse and are cost-effective (time and money) at the same time.

Last, but not least, you should not go so far as to open up the organization to claims of discrimination by members of designated groups or on prohibited grounds. Transition to a more diverse workforce is likely to be a gradual process; unless you have to satisfy federal government targets.

5. Suggest two appropriate forms of testing to screen candidates for a front-line supervisory role in a career path with which you have some familiarity. How are your choices relevant to assessing a candidate’s “fit” for this position’s job requirements? (p. 110-116) Students may discuss intelligence tests, emotional Intelligence tests, personality tests, situational testing, micro-assessments and integrity testing as ways to assess fit for a supervisory role. Each is aimed at getting to know the candidates in more depth to see if they are capable to be a leader who can be trusted and relied upon.

6. What are two key considerations to build into a company policy on reference or background checks used in candidate selection? (p. 121-124) Students may discuss obtaining written permission to do the reference checks as legal protection and know the relevant privacy legislation requirements in their province or territory or if a federal agency, the federal legislation. Students may discuss also qualified privilege.

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EXPERIENTIAL EXERCISES (p 127) 1. Examine three company websites associated with your career interests. Look for some specific reference on each site that matches your own set of values and beliefs. Explain why including such information on a company’s website is advantageous to talent acquisition in today’s job market.

Teaching Tip: Have the students identify 3 values important to them before they begin their search. Have them discuss their findings with classmates 2. Considering the current economic situation and using the following list of jobs, identify two sources that could be used to recruit qualified applicants:     

Registered Nurses to work in the critical care unit of a new regional hospital Carpenters to work on a new home building project Chief Financial Officer for an international engineering firm with a head office located in Vancouver Sales associates to work in an arts supply store Bilingual administrative assistants for a global Canadian financial services company

The purpose of this exercise is to have students brainstorm different ways to attract new talent. It can be done in small groups or as a large class discussion. Encourage students to think outside of the box. This is an opportunity to discuss some of the different means of getting qualified workers such as: carpenters – if want licensed carpenter must go through the union, otherwise you can ask for referrals from people who have had someone do carpentry work in the past, for bank reps – could hire students part time and use social media to interact with potential applicants (page 95-104) 3. Using the National Occupation Classification (NOC), select a job that you are familiar with and create two situational and two behavioural descriptive interview questions for short-listed candidates. For any of these questions, identify key elements of a high quality answer you would expect from the candidate. Share this example with another remember of the class.

The purpose of this exercise is to give the students practice in developing interview questions and “good” answers based on specific job tasks. Provide students with the framework for each type of question, e.g. “Tell me about a time when...” and “What would you do if...” using one of their jobs as an example. Then probe for the answer they would expect to hear from a good candidate. Have students critique each other’s questions and answers. Debrief with reference to the value in doing this work up front. Remind them that once it is done it only needs to be reviewed and tweaked the next time they are hiring. Remind them that knowing how to do this is also useful to them as job applicants as they prepare for interviews.

4. Working with another student, develop a three-point argument explaining why introducing realistic job previews is beneficial to the company’s talent acquisition programme. (p. 124) Students may identify is to create ensure applicants have realistic information about the job, to have hires experience job satisfaction (not dissatisfaction), to ensure hires stay (lower turnover) and for good communication and understanding. .

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PART THREE: DEVELOPING EFFECTIVE HUMAN RESOURCES CHAPTER 6 ONBOARDING AND TRAINING LEARNING OUTCOMES EXPLAIN how to develop an onboarding program.

DESCRIBE the five-step training process.

DISCUSS two techniques used for assessing training needs and DESCRIBE how to evaluate the training effort.

EXPLAIN the strategic importance of career planning and development in the context of today’s talent shortage.

ANALYZE the factors that affect career choices.

EXPLAIN the evolution of career development and the impact of that on employers and employees.

CHAPTER SUMMARY A strategic approach to recruitment and retention of employees includes a well-integrated onboarding (orientation) program that reduces reality shock for new employees by clarifying policies and performance expectations, and socializing them into the prevailing attitudes, standards, values and patterns of behaviour expected by the organization. Training teaches employees the basic skills and competencies to do their job through a five step process: needs analysis (task and performance), instructional design, validation, implementation, and evaluation. Training is delivered both through traditional techniques (e.g. on-the-job- classroom, audiovisual, and so on) as well as through e-learning (e.g. computer-based, online, and electronic performance support systems). The effectiveness of training is evaluated on four dimensions: reaction, learning, behaviour, and results. Special purpose training includes diversity training, customer service training, training for teamwork, and training for first-time supervisors/managers.

Career planning and development is a critical strategic issue in ensuring that the supply of necessary talent is available. It is a deliberate process that has evolved from identification of occupational onboarding(s) to a new focus on identifying skills, aptitudes, career anchors and life trajectories and becoming a learning organization. Learning organizations use behaviour modelling (role plays, simulations, management games and mentoring). Career development transfers now often require career-transition programs for spouses. Firms have to make a number of policy decisions when it comes to promotions (seniority or competence; measure of competence; formal or informal). Management development improves managerial performance and prepares employees for future jobs. Succession planning to avoid leadership shortages is an essential part of a management development program.

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LECTURE OUTLINE I.

ONBOARDING NEW EMPLOYEES

A strategic approach to recruitment and retention of employees includes a well-integrated onboarding (orientation) program before and after hiring. Benefits of a comprehensive onboarding program include lower turnover, increased morale, fewer instance of corrective discipline, fewer employee grievances, and can reduce workplace injuries especially for new workers.

1. Purpose of Onboarding Programs Onboarding (orientation) delivered in-person and/or online provides new employees with basic background information about the firm and the job. A strong onboarding program, which can begin before the first day of employment, can speed up socialization, which is the process of instilling in all employees the prevailing attitudes, standards, values, and patterns of behaviour that are expected by the organization. It can only reduce reality shock (cognitive dissonance) because it lessens the discrepancy between what the new employee expected from his/her job and its realities. Online onboarding can increase first day productivity by taking care of routine form completion in advance.

Teaching Tip: Ask for a show of hands as to who has taken a job that was not as it was promised and ask what they did about the discrepancy.

2. Content of Onboarding Programs The content can range from brief, informal introductions to length, formal programs. Typical components include:  Review of internal publications, including employee handbooks, which should clarify that handbooks are not employment contracts  Facility tours and staff introductions  Review of and completion of job-related documents  Expected training (when and why)  Performance appraisal criteria and estimated time to achieve full productivity Teaching Tip: Use the Strategic HR Discussion Box on onboarding in the fast food industry (p.

147) to launch small group discussions about first-days on the job (good and bad) then debrief. There are several humorous videos on YouTube about first day on the job.

3. Responsibility for Onboarding Onboarding usually starts with the HR specialist (if there is one), followed by a meeting with the supervisor then introductions to new colleagues. A co-worker may be assigned as a “buddy” or “mentor” for a short initial period. HR should follow-up after three months to address adjustment and any remaining questions.

4. Special Onboarding Situations a. Diverse workforce – differences in values, variety of reactions from co-workers and tips on handling them b. Mergers and acquisitions – details on merger/acquisition, unresolved operational issues, Copyright © 2019Pearson Canada Inc.

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resocialization c. Union versus non-union employees – copy of collective bargaining agreement, introduction to union steward, payroll deduction for union dues, names of union executives, clarification of unionized jobs versus non-unionized jobs d. Multi-location organizations – where other locations are and business functions, for consistency consider online and virtual onboarding 5. Executive Integration Typically newly hired executives do not participate in formal onboarding activities and there is little planning regarding how they will be integrated into their new position and company, especially if they are brought in as change agents. However, executive integration can take up to 18 months.

Key aspects of executive integration include:  Identifying position specifications  Providing realistic information to job candidates (pre-hire) and providing support regarding reality shock (post-hire)  Assessing each candidate’s previous record with organizational transitions  Announcing the hiring with enthusiasm  Stressing the importance of listening to the newly hired executive as well as demonstrating competency. Promote talking with their boss.  Assist new executive with changing the organizational culture around work balance 6. Problems with Onboarding Programs A number of potential problems can arise with onboarding programs. These include:  Too much information in a short time  Little or no onboarding  Onboarding information is too broad (HR dept.) or too detailed (supervisor) Teaching Tip: This is an alternate or additional time at which to collect feedback from students about their past experiences and to probe further into how this did or did not change their initial impressions of the organization (employee’s brand).

7. Evaluation of Onboarding Programs Onboarding programs should be evaluated to assess whether they are providing timely, useful information to new employees in a cost-effective manner. Three approaches are:  Capture employee reactions through interviews and/or surveys and track job performance  Assess socialization effects by checking employee understanding of organizational beliefs, values and norms  Conduct a cost-benefit analysis by comparing onboarding costs (time and materials) with benefits of onboarding (error reduction, productivity, efficiency, and so on)

II.

THE TRAINING PROCESS

Training is the process of teaching employees the basic skills/competencies that they need to perform their jobs, in contrast to development, which is training for future jobs. Business and training goals must be aligned and training must be managed as strategic investment in human capital. Training can Copyright © 2019Pearson Canada Inc.

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help firms to compete and can generate higher levels of employee commitment. However, in recent years firms have reduced investments in training.

Teaching Tip: Use articles regarding skills shortages to debate the pros and cons of reduced training investment, especially in light of these skills shortages in Canada.

1. Training and Learning Training is essential a learning process that takes place through one or more of three learning styles: auditory, visual, and kinesthetic. Training effectiveness can be enhanced by identifying learning styles and personalizing the training accordingly. Four best practices are to: a. Make the material meaningful – provide an overview, use visuals and examples, organize logically, and link to familiar terms and concepts b. Enable transfer of new skills and behavior – replicate setting and provide multiple opportunities for practice, training mangers first and employees second, provide rewards for completion AND integration of training back on the job c. Motivate the trainee – provide realistic practice, allow self-pacing, recognition achievement/effort, and use technology to engage learners d. Prepare the trainee – create perceived need for training in minds of participants and provide preparatory information Teaching Tip: Survey the students about whether they have ever received preparation before receiving training. How would this have made a difference, if any to their attitude and behaviour before, during, and after training?

Teaching Tip: Have students explore the Institute for Performance and Learning website (www.performanceandlearning.ca) to see the different certifications available to training professionals.

Legal Aspects of Training Human rights legislation requires equal opportunity to receive training; discrimination in terms of not providing access to a training program must be based on valid grounds (e.g. literacy). On the other hand, employees who refuse a lawful and reasonable order to attend a training program may be considered to have abandoned their position. Organizations must ensure that training is adequate or could risk being charged with negligent training, if an employee subsequently harms a third party.

Teaching Tip: What are the legal issues around requiring employees to participate in training outside of work hours and whether training should be paid or unpaid?

2. Introduction to Training Process

the

Five-Step

A typical training program consists of five steps beginning with needs analysis, followed by instructional design, validation with a small representative audience (pilot), implementation, and concluding with evaluation.

III. STEP 1: TRAINING NEEDS ANALYSIS Training needs must be analyzed for both new hires and existing employees. Training may not necessarily be the solution if an existing employee has a performance issue. The training needs of new hires are assessed through task analysis, whereas training needs of current employees are assessed through performance analysis.

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1. Task Analysis: Assessing the Training Needs of New Employees Task analysis involves a detailed study of a job to identify the skills and competencies it requires so that an appropriate training program can be instituted. If up to date job descriptions and job specifications are readily available these will provide the necessary information, but some employers supplement these with a task analysis record form. a. Task analysis record form provides specific detail on sub-tasks in order to determine required knowledge, competencies, and suitable training environment. Some new hires may already be proficient in some areas.

2. Performance Analysis: Determining the Training Needs of Current Employees Performance analysis means verifying that there is a performance deficiency and determining whether that deficiency should be rectified through training or through some other means (such as transferring the employee). Training can help to solve a “can’t do” problem but not a “won’t do” problem.

3. Training Objectives After identification of training needs, training objectives should be set that are concrete and measurable. Objectives specific what the trainee should be able to do after successfully completing the training program, and provide a focus for both trainer and trainee.

IV. STEP 2: INSTRUCTIONAL CURRICULUM DESIGN

and

Once needs and objectives have been established then the training program can be designed by considering whether the training will be programmed or informal and selecting the medium ranging from traditional to e-learning training techniques.

a. Programmed learning – presents questions/facts/problems, allows learner response, provides feedback on accuracy of answers; can be done through textbook or computer, reduces training time by 1/3, self-paced but less is learned in accelerated mode than from traditional textbook b. Teaching Tip: Note that the interactive web quizzes that come with most textbooks are examples of programmed learning Informal learning – learning from colleagues through unplanned interactions, 2/3 of industrial training takes place this way d. Classroom training – still primary method of corporate training in Canada, quick and simple for knowledge dissemination to large groups, has evolved into blended learning (integrated instructor-led and online e-learning components) e. On-the-job training – “hands-on”, relatively inexpensive, immediate contribution to business, facilitates learning through quick feedback

c.

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Apprenticeship training – learn from “master”, critical for skilled trades

g. Job instruction training – listing of each job’s basic tasks along with key points to provide step-by-step training for employees (what, how, why), useful in manufacturing but being superseded by behaviour modelling (Ch. 9) in service industry E-E-learning – electronic dependent or web-based learning is now commonly used by Canadian organizations – ideal for adult learners to do at their own pace. learning is delivery and administration of learning opportunities and support via computer, networked, and web-based technology to enhance employee performance and development; allows for more flexible, personalized, and cost-effective training; can promote life-long learning instead of just episodic learning; requires good instructional design and high trainee motivation; enhanced by human interaction in online environment; mobile training now being offered via smartphones.

Three types of e-learning are computer-based, online, and electronic performance support systems (EPSS). a. Computer-based training – multimedia simulations, role plays, CBT more common in Canada than USA; accessible 24/7; facilitates instructional consistency, mastery of learning, flexibility and trainee motivation b. On-line training – providing training via Web costs 50% less than classroom training, flexible, engaging, but requires content management, sound educational strategy, learner support, and system administration. 50% - 90% of online courses are not completed by learners; blended learning better than pure online c. Electronic performance support systems (EPSS) are computer-based job aids, or sets of computerized tools and displays that automate training, documentation, and phone support; faster than traditional manuals, reduces need to memorize multiple specific solutions; maximizes impact of training because material is always available

h. Audiovisual techniques – CDs and DVDs– more expensive, good for showing sequences and special/unusual events, and for training mass or remote audiences; three options – buy existing product, make your own, or work with production company; i. videoconferencing – using A/V equipment to reach two or more distant groups

j.

Vestibule or simulated training – training employees on special off-the-job equipment (actual or simulator), whereby training costs and hazards can be reduced and regular operations are not disrupted

2. E-learning V.

STEPS 3 AND 4: VALIDATION AND IMPLEMENTATION

Validation means doing a pilot study or “run through” with a small group to assess learning, identify issues, and make revisions before large scale implementation. Implementation can be handled by professional trainers or in-house trainers who attend train-the trainer workshops to get up to speed Copyright © 2019Pearson Canada Inc.

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on new material and/or new methods.

VI. STEP 5: EVALUATION OF TRAINING It is important to assess the return on investment in human capital made through training by assessing whether the training achieved pre-set objectives. Effective training if reflected by transfer of training, which is the application of the skills acquired during the raining program into the work environment and the maintenance of these skills over time. Keys to ensuring that training is transferred back to the job are:  assessing trainee ability, aptitude and motivation for upcoming training  trainee involvement in instructional design  management support  frequent feedback and opportunities for practice  positive reinforcement  goal-setting and relapse-prevention techniques Profitable companies spend the most on training and those rated as being among the 100 best companies to work for in Canada spend the most per employee. However, the effectiveness of training has to be evaluated in a disciplined manner, ideally through controlled experimentation (pre-test and post-test, control group) 1. Training Effects to Measure Four basic categories of training outcomes can be measured: a. Reactions –Did the trainee think the training was worthwhile b. Learning – facts, principles, skills c. Behaviour – same, better or worse than before d. Results – organizational metrics (sales, turnover, productivity, quality, and so on) I. CAREER PLANNING AND DEVELOPMENT A career is a series of work-related positions, paid or unpaid, that help a person to grow in job skills, success, and fulfillment. Facilitating career planning has become a critical strategic issue for CEOs and board of directors, as well as HR executives. HRM activities play an important role in career planning and development, which is a deliberate process through which a person becomes aware of personal career-related attributes and the lifelong series of activities that contribute to his or her career fulfillment. Career planning can play a significant role in retaining employees in the organization and reducing turnover of valued workers.

Teaching Tip: Reinforce the fact that unpaid (volunteer work, unpaid internships) are career builders.

Some research evidence shows that unpaid experience that has built job-relevant skills is valued by employers, especially for those who have not had the opportunity for extensive paid work experience.

II. EMERGENT APPROACHES TO CAREER DEVELOPMENT In the early stages of career development research, career patterns were assumed to be stable, predictable, linear, and based on hierarchies. Age-based career stages and personality-based occupational preferencess were seen as determining factors. New, more dynamic and holistic Copyright © 2019Pearson Canada Inc.

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approaches to career development are emerging with a focus on lifelong learning, flexibility and adaptability.

1. New Approaches to Career Development As job transitions became increasingly common in the early twenty-first century, occupational prospects and linear career patterns became less definable and predictable. The new approach sees the person (not the organization) as the primary stakeholder in a dynamic and holistic career development process that includes lifelong learning, flexibility, and adaptability. The new approach begins with identification of skills and aptitudes for various jobs/occupations. a. Identify skills and aptitudes – education-based skills, experience-based skills, general aptitude test battery (GATB) b. Identify career anchors – concerns or values that a person will not give up (Schein): eight anchors, of which one may be dominant: technical/functional, managerial competence, creativity, autonomy/independence, security, service/dedication, pure challenge, and lifestyle Technical/Functional - their career decisions enable them to remain and grow in their chosen technical or functional fields, rather than go into general management.

Managerial Competence - show a strong motivation to become managers, convinced by past experience that they have the skills and values required to rise to high responsibility generalmanagement positions requiring analytical, interpersonal, and emotional competence.

Creativity – often successful entrepreneurs who have a need to build or create something that is entirely their own.

Autonomy and Independence - driven to be on their own, many also have a strong technical/functional orientation. Often become consultants, business professors, freelance ewriters, or proprietors of a small retail business.

Security - mostly concerned with long-run career stability, will do what it takes. to maintain job security, a decent income, and a stable future (retirement program and benefits). Geographic security, maintaining a stable, secure career in familiar surroundings more important than pursuing superior career choices. Organizational security letting employers decide what their careers should be.

Service/dedication - need to do something meaningful in a larger context. Information technology has made global problems, such as the environment, overpopulation, and poverty, highly visible (growing number of people) Pure challenge - define their career in terms of overcoming impossible odds, solving unsolved problems, and winning out over competitors (small number of people).

Lifestyle - define their careers as part of a larger lifestyle integrating two careers and two sets of personal and family concerns (growing number of people).

Teaching Tip: You can use this as an in-class exercise (individual), then do a show of hands to illustrate that not everyone has the same career anchors. Alternatively you can have them assess someone else to Copyright © 2019Pearson Canada Inc.

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see if they can figure out what that person’s career anchor is (family member, friend). c. Focus on life trajectories – person builds life and career simultaneously, often seeking worklife balance; involved shifts in career development thinking:     

From traits and states (internal factors) to context (external factors) From prescriptive to process – frequent job change, no more single lifelong choice From linear to non-linear – career plans require more frequent updating From scientific facts to narrative evaluations – employees self-assess, interpret and make meaning of their own life experiences From describing to modelling – career forecasting has to model different configurations and monitor interacting variables

Teaching Tip: Ask students to differentiate between “job hopping” and having progressive work experiences that contribute to a career. How can you show evidence of the latter on your résumé?

2. Roles in Career Development The individual has primary responsibility for their career Individual’s entrepreneurial goaloriented approach needs four key skills: self-motivation, independent learning, effective time and money management, and self-promotion through networking, an organized process of arranging and conducting face-to-face meetings to mutually share information with colleagues and contacts, plus individuals that they recommend. Support roles played by manager and employer help to maintain employee commitment.

Manager’s role is to provide timely and objective performance feedback, offer developmental assignments and support, and participate in carer development discussions (clarify plans, generate career options, link to resources and options). Employer’s role is to provide career-oriented training and development opportunities, offer career information and career programs, and give employees a variety of career options.

Teaching Tip: Assign students to do a personal networking chart as preparation for class by considering who they know and then asking those people who they know, who have experience in a particular occupation or occupation related field. For example, their friend’s father or their neighbour’s daughter may be an accountant or work as an administrative assistant for an accountant. Alternatively, they can use their social network (Facebook) to find out who knows an accountant, or an engineer, or a certain type of healthcare provider.

III. MANAGING INTERNAL EMPLOEE MOVEMENT Transfers and promotions are significant career-related decisions that mangers make on an ongoing basis.

Making Promotion Decisions Employers must decide on the criteria on which to promote employees while maintaining employees’ motivation, performance, and commitment. Three key decisions to be made include: a. Decision 1: Is seniority or competence the rule? – in union settings seniority is the rule unless there is a substantial difference in abilities Copyright © 2019Pearson Canada Inc.

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b. Decision 2: How is competence measured? – past performance and/or potential; use valid tests and assessment centres for identifying executive potential c. Decision 3: Is the process formal or informal – often informal (secret and based on personal connections), but formal (published policies, criteria, procedures) ensures all qualified employees are considered (Ch. 5 - skill inventories, replacement summaries, replacement charts) and performance-promotion link is strengthened Teaching Tip: Ask students if they know the basis on which people are promoted to higher level positions in their organization (e.g. who gets to be crew chief/team leader).

DISCUSSION BOXES

WORKFORCE DIVERSITY: Career Development for Older Workers (p. 145) If an employer doesn’t pay attention to the career development of staff as they approach age 60, it won’t have the benefit of their productivity during their second middle age. As second middle-agers could be organizational gold (less absenteeism, fewer accidents, higher job satisfaction, stronger work ethic. Practical career development strategies for older workers include: adopting a new attitude; provision of career counselling; investing in training and development; and honouring the need for work/life balance.

ETHICAL DILEMMAS Is it ethical to withhold information from an incoming executive about critical problems that he or she will face? (p. 151) Most will argue that doing so is not only unethical, but is not in the best interests of the company or its employees. Withholding information about critical problems can have very high costs associated therewith, since it may lead to ineffective decisions, needless delays, interpersonal conflicts that could have been avoided or even turnover shortly after hire. Ideally a realistic view of the situation should have been provided during recruitment and selection to ensure that the best person to handle the challenges was hired. Superior candidates would also have asked about the issues that they would be facing. On the other hand, the organization may limit the information provided until after hire to protect itself from having confidential information find its way to competitors.

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KEY TERMS apprenticeship A situation in which the learner/apprentice studies under the tutelage of a master craftsperson, blending classroom instruction with on-the-job training. (p. 140) auditory learning – Leaning through auditory methos such as talking and listening (p. 136) career A series of work-related positions, paid or unpaid, that help a person to grow in job skills, success, and fulfillment. (p. 144) career anchor A concern or value that you will not give up if a choice has to be made. (p. 145) career development The lifelong series of activities that contribute to his or her career fulfillment. (p.

144) career planning The deliberate process through which a person becomes aware of personal careerrelated attributes. (p. 161) 144) controlled experimentation Formal methods for testing the effectiveness of a training program, preferably with a control group and with tests before and after training. (p. 143) employee onboarding (orientation) A procedure for providing new employees with basic background information about the firm and the job. (p. 130) job instruction training (JIT) The listing of each job's basic tasks, along with key points, in order to provide step-by-step training for employees. (p. 141) learning organization An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights. (p. 129) negligent training Occurs when an employer fails to adequately train an employee how subsequently harms a third party. (p. 137) networking An organized process whereby the individual arranges and conducts a series of face-toface meeting with her or her colleagues and contacts, plus individuals that they recommend. (p. 147) performance analysis Verifying that there is a performance deficiency, and determining whether that deficiency should be rectified through training or through some other means (such as transferring the employee). (p. 139) programmed learning A systematic method for teaching job skills that involves presenting questions or facts, allowing the person to respond, and giving the learner immediate feedback on the accuracy of his or her answers. (p. 139) reality shock (cognitive dissonance) The state that results from the discrepancy between what the new employee expected from his or her new job, and the realities of it. (p. 131 socialization The ongoing process of instilling in all employees the prevailing attitudes, standards, values, and patterns of behaviour that are expected by the organization. (p. 130) Copyright © 2019Pearson Canada Inc.

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task analysis A detailed study of a job to identify the skills and competencies it requires so that an appropriate training program can be instituted. (p. 138)

training The process of teaching employees the basic skills/competencies they need to perform their jobs. (p. 135) transfer of training Application of the skills acquired during the training program into the work environment, and maintenance of these skills over time. (p. 143) vestibule or simulated training Training employees on special off-the-job equipment, as in airplane pilot training, whereby training costs and hazards can be reduced. (p. 142) visual learning – Learning through visual techniques such as through pictures and print (p. 136) videoconferencing Connecting two or more distant groups by using audiovisual equipment. (p. 142)

REVIEW AND DISCUSSION QUESTIONS (p. 169) 1. Prepare an onboarding checklist for your current or most recent job.

Refer to content of onboarding programs on page 1 3 1 - 1 3 2 . Specify who will be responsible, what, where and when each part of onboarding will occur.

2. Choose a task you are familiar with – such as mowing the lawn or using a chat room – and develop a job instruction training sheet for it.

The JIT sheet should cover, what, how and why for each step, not just what or how. The sheet should be very detailed, assuming that the individual does not know the nature of the job 3. Ali Khan is an undergraduate business student majoring in accounting. He has just failed the first accounting course, Accounting 101, and is understandably upset. Explain how you would use performance analysis to identify what, if any, are Ali's training needs.

The first thing that needs to be determined is if this is a "can’t do" or a "won't do" situation, which is the heart of performance analysis (p. 138-139). It is possible that, as a first-year student, Ali has spent too much time socializing and not enough time studying. This would indicate a need for training on studying skills and setting priorities. It is also possible that Ali really does not have the basic skills that he needs in order to be successful in this course, something that could be assessed through testing.

The first step is to compare his performance to others or to a standard (e.g. class grades, answers to exam questions). If knowledge gaps or skill deficiencies in using a particular method are apparent, then remedial training or courses would be appropriate. A third possibility is that Ali simply does not have the interest or natural inclinations for success in the accounting field, which could be determined through interest and aptitude testing. If this is the case, training is not appropriate; rather, Ali should be counselled to change majors.

4. Think about a job that you have had in the past. For this job, identify which training technique was used and reflect on reasons why you think that system was used. Next, select a different training technique from the chapter that you think would have been good to use, providing a justification as to why this would be a suitable technique.

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Most students will have experienced on-the-job training and believe this is the best way to go.

However, there is a role for other techniques that also have advantages (e.g. not reliant on trainer, more consistent and flexible). The emphasis should be on a mix of techniques and quite likely blended learning (traditional face-to-face and e-learning).

5. Describe why career planning and development has become more strategically important. Give a brief outline of what organizations are doing to take a more strategic approach in this area. (p.

144) Due to the aging workforce and shifts in occupations and employment patterns, increasing competition for talent is expected to create a serious challenge for retaining high-potential employees. New graduates have high expectations of their employers and will leave if not given developmental opportunities. Increased need for employees who are interested in global carer, in virtual work and in carer that involve continuously changing technology. Other talent shortages include local leadership in Asia Pacific and an impending managerial shortage in many countries due to Baby Boomer retirements. Career planning and development programs can help attract new employees and maintain employee commitment while developing competencies that support the organization’s strategy.

6. What is a career anchor? For each of the five career anchors explain why you think each is important today? (p. 145-146) A career anchor is a concern or value that an individual will not give up if a choice has to be made.

Schein identified eight career anchors: a. Technical/Functional - their career decisions enable them to remain and grow in their chosen technical or functional fields, rather than go into general management. b. Managerial Competence - show a strong motivation to become managers, convinced by past experience that they have the skills and values required to rise to high responsibility generalmanagement positions requiring analytical, interpersonal, and emotional competence. c. Creativity – often successful entrepreneurs who have a need to build or create something that is entirely their own. d. Autonomy and Independence - driven to be on their own, many also have a strong technical/functional onboarding. Often become consultants, business professors, freelance e writers, or proprietors of a small retail business. e. Security - mostly concerned with long-run career stability, will do what it takes. to maintain job security, a decent income, and a stable future (retirement program and benefits). Geographic security, maintaining a stable, secure career in familiar surroundings more important than pursuing superior career choices, whereas, organizational security means letting employers decide what the employees’ careers should be. f.

Service/dedication - need to do something meaningful in a larger context. Information technology has made global problems, such as the environment, overpopulation, and poverty, highly visible (growing number of people)

g. Pure challenge - define their career in terms of overcoming impossible odds, solving unsolved problems, and winning out over competitors (small number of people).

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h. Lifestyle - define their careers as part of a larger lifestyle integrating two careers and two sets of personal and family concerns (growing number of people).

CRITICAL THINKING QUESTIONS (p. 150) 1. "A well-thought-out onboarding program is especially important for employees (like many recent graduates) who have had little or no work experience.” Explain why you agree or disagree with this statement.

Onboarding programs are important for all employees. New employees can suffer from a significant amount of anxiety during the first few days on the job, as they find themselves in an environment and culture with which they are not familiar. Those with little job experience, however, may find it especially difficult to adjust to the job and work environment without an effective onboarding program, since they may have very unrealistic expectations, having had little basis for comparison, and are more likely to suffer from reality shock than individuals with more prior work experience. A well-developed onboarding program can help to socialize such employees, and introduce them to important organizational values and norms, such that their chances of easing smoothly into the organization are significantly increased. (p. 147-148) 2. What do you think are some of the main drawbacks of relying on informal on-the-job training for teaching new employees their jobs? (p. 140) The main drawbacks related to informal OJT include:  not every employee will get the same basic information; in fact, some may not get basic, fundamental information  the quality of the training is highly dependent on the training skills of the employee who supervises the OJT, and that person's skills and training are usually not in the area of training  the new employee may get false information or inappropriate socialization depending on who is assigned responsibility for providing the training  OJT – whether formal or informal – is not suitable in many cases. Sometimes, for example, it is too costly or dangerous to train employees on the job.

3. Most training programs are not formally evaluated beyond a reaction measure. Why do you think employers do not measure the impact of training on learning, behaviour, and results more often? (p.

143-144) Reaction measures are easy to obtain through end-of-session surveys, and are handled by HR, whereas controlled experimentation requires advance planning, development of pre-tests and post-tests and more involvement by front-line supervisors and managers. Learning evaluation knowing beforehand what the desired level of knowledge/skill should be after training. In addition, learning evaluations are most valid if control groups are used, which raises issues about who gets training first and who gets to be the control group. Behavioural evaluation requires cooperation of the workplace that may involve time and commitment from supervisors.

Finally, desired results achieved through training have to be chosen a priori based on established linkages to knowledge/skills, but are influenced by many variables other than the training. Often organizations are unclear about their reasons for training, and if a thorough needs assessment is not carried out, the evaluations at the three levels beyond reaction cannot be conducted.

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4. Would you tell high-potential employees that they are on the “fast track”? How might this knowledge affect their behaviour? How might the behaviour of employees who are disappointed in not being included in management development activities be affected?

Telling employees that they are on the fast track might motivate them to contribute at an even higher level but, in some cases, could make them become complacent and actually contribute less thinking that promotion is guaranteed. They may also start treating other employees differently. Telling employees that they are not on the “fast track” may be a relief to some with technical/functional orientations who are not seeking advancement to general management positions. However, employees who believe they have the skills and aptitudes to perform well in higher roles may be demotivated and leave the organization if other types of developmental activities are not offered by the organization.

5. How do you think employees are going to respond to the new focus on career planning, given the emphasis in recent years on “being in charge of your own career”?

The emphasis on entrepreneurial career planning would be embraced by those who are not satisfied waiting for the organization to determine their fate, but could be very frightening for those without the four key skills: self-motivation, independent learning, effective time and money management, and self-promotion through networking. Organizations need to provide opportunities and support for both types of employees through training and career planning programs.

EXPERIENTIAL EXERCISES (p. 151) 1. Obtain a copy of an employee handbook from your employer or from some other organization. Review it and make recommendations for improvement. (p.131-133) Answers to this question will vary depending on the size of the organization from which the employee handbook was obtained. Handbooks prepared by corporate head offices may be quite elaborate. When the head office is in the U.S., the handbook may not have been rewritten for Canadian employees, thus containing material that is not applicable.

While reviewing the handbook, students should keep in mind its purpose in the onboarding process.

One thing that students should look for is whether steps have been taken to ensure that the handbook contents do not represent a contract. Hints to ensure legal compliance found on page 198 include:  Using disclaimers to make it clear that statements of company policies, benefits, and regulations do not constitute the terms and conditions of an employment contract, either express or implied.  Avoiding statements that could be viewed as legal and binding commitments, such as “No employee will be fired without just cause.”

A common error when preparing employee handbooks is not keeping the intended audience in mind.

The literacy levels of the audience must be considered, as well as clarity and use of jargon.

Because handbooks can become quickly outdated and printing revisions can be costly, some firms provide their “handbook” online, rather than in print-based format.

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2. Working individually or in groups, prepare a training program for a job that you currently hold or have had in the past.

The material presented on pages 135-144, will assist students in developing a training program. Helpful hints on writing job descriptions can be found in Chapter 4.

This exercise is fairly straightforward, and will provide students with an opportunity to work through the process of developing a training program and selecting the training technique(s) that best fit the situation. To avoid lengthy delays over which job to work on, you can assign each group a familiar job (e.g. restaurant server, supermarket cashier, or lifeguard) 3. In small groups of four to six students, complete the following exercise.

WestJet has asked you to quickly develop an outline of a training program for its new reservation clerks. Airline reservations clerks obviously need numerous skills to perform their jobs. (You may want to start by listing the job’s main duties, using the information provided below). Produce the requested training outline, making sure to be very specific about what you want to teach the new clerks, and what methods and aids you suggest using to train them.

Duties of Airline Reservation Clerks: Customers contact airline reservation clerks to obtain flight schedules, prices, and itineraries. The reservation clerks look up the requested information on the airline’s flight schedule systems, which are updated continuously. The reservation clerk must deal courteously and expeditiously with the customer, and be able to quickly find alternative flight arrangements that provide the customer with the itinerary that fits his or her needs. Alternative flights and prices must be found quickly, so that the customer is not kept waiting, and so that the reservations operations group maintains its efficiency standards. It is often necessary to look under various routings, since there may be a dozen or more alternative routes between the customer’s starting point and destination.

Conduct a needs assessment as outlined in pages 138-139. Develop the learning objectives (p. 138) and determine how you will evaluate the training (pages 1 4 3 - 1 4 4 ). Based on outcomes from the needs analysis, select the training techniques (pages 138-142). Note that the timeline is very tight, so validation will have to be streamlined. Given this job, it would be high risk to just implement without a small pilot study. Evaluate the training results and revise the course.

4. Working in groups of four to six students, complete the following exercise: Determine who in your group knows how to make paper objects such as cranes, boxes, balloons, ninja darts, fortunes, boats, etc. Select one person who is willing to be a Subject Matter Expert (SME) to assist your group in developing an on-the-job training program to make one product.

Using the expertise of your SME, develop, document and validate a training plan to make the chosen product.

Modify the documented plan as required after your pilot. Ensure that everyone in your group has a copy of the plan and can reliably make the product to standards. Once this is accomplished, each group member will pair up with a member of another group that made a different product. Each person in the resulting dyads will train his or her partner on how to make the products using the training plan and sample he or she created.

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Debrief the exercise as instructed.

The purpose of this exercise is to give students the opportunity to work through an entire training development and implementation simulation in one hour. The only materials required are 8 ½ by 11 inch pieces of paper. If you can provide coloured paper, this adds to the fun. As students begin the training and documentation advise them that they can document in a way that makes most sense for them, using both words and illustrations. The first run training and documentation takes between 35 and 45 minutes. The one-on-one training usually takes 10 - 15 minutes.

Debrief: Ask students to individually answer the following questions that may be written on the board or posted on a PowerPoint slide:  What did they find difficult in the initial learning and documentation session? Some may have felt overwhelmed with trying to learn a new skill and document at the same time.  What did you like about the way the first trainer (SME) did the training? What would you have preferred be done differently?  Was your training plan full and complete?  What was different about learning in groups and individually?  What did you like about the way the second trainer (SME) did the training? What would you have preferred be done differently?  What are the most important insights and questions you are taking away from this exercise about developing and implementing training?

5. Review the Web site of a provider of management development seminars, such as the Canadian Institute of Management. Obtain copies of recent listings of seminar offerings. At what levels of management are its seminar offerings aimed? What seem to be the most popular types of development programs? Why do you think that is the case?

Depending on the source from which information is obtained, there may be a wide variety of development offerings. They are likely primarily aimed at middle- or upper-level managers, although some organizations offer programs suitable for entry-level managers. The Human Resources Professionals Association of Ontario, for example, offers a wide variety of seminars on topics ranging from "Interviewing Skills for Selection and Appraisal" to "Benchmarking the HR Function" to "HR Applications on the Internet.”

The most popular programs may cover any number of different subjects. According to Canadian training expert David McQuaig: “In a world of increased volatility and instability, there is only one absolute certainty: more people will need more training for more jobs than ever before in history. A survey of top executives in 23 countries found that management development and increasing employee knowledge through training are considered to be the twin pillars for future business success. A 1999 Conference Board of Canada survey found that job-specific technical skills training, professional skills training, and computer literacy/applications training are the top three areas for training in Canadian companies.

Most seminars involve a lecture format, supplemented by a question-and-answer session or small group discussions. The reason for the popularity of the lecture format is the ease of offering the program; the ability to offer it to much larger groups, thereby increasing the profitability of the program; and the fact that most people are accustomed to the lecture format.

6. Review all positions you have ever held. Below each position, identify core knowledge, skills, and abilities that you learned in each position. Next, identify a career you would like to be actively engaged in over the next three years. Under the future career, outline core knowledge, skills, and Copyright © 2019Pearson Canada Inc.

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abilities the position would require. Now reflect on your own career trajectory to highlight your history of skill development and identify any gaps that may exist for you to advance to your desired career in the future.

Students can draw on both paid and unpaid positions in order to identify patterns over a longer period of time. Students may need to make very specific items more general in order to see patterns of knowledge, skill and ability development. E.g. volunteer tutoring and being a shift/team leader both involve skills in teaching and training others. In terms of assessing KSAs for future careers students can look up job descriptions and job specifications on the HRSDC National Occupational Classification (see Ch. 4).

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CHAPTER 7 PERFORMANCE MANAGEMENT LEARNING OUTCOMES EXPLAIN the five steps in the performance management process.

DESCRIBE five performance appraisal methods and the pros and cons of each.

DISCUSS the major problems inhibiting effective performance appraisals.

DISCUSS 360-degree appraisal from multiple sources.

DESCRIBE the three types of appraisal interviews.

DISCUSS the future of performance management.

CHAPTER SUMMARY Performance management is the process encompassing all activities related to improving employee performance, productivity, and effectiveness. In contrast, performance appraisal is a formal, relatively infrequent process in which an employee’s performance is evaluated along a predetermined set of criteria that is quantified via a formal performance score.5 Performance appraisals are used for a variety of decisions such as training recommendations, merit based pay increases, promotion, or termination decisions.

The five steps in the performance management process are: defining performance expectations; providing on-going feedback and coaching; conducting performance appraisal and evaluation discussions; determining performance rewards or consequences; and conducting development and career opportunities discussions. Performance appraisal methods include: graphic rating scales, alternation ranking, paired comparison, narrative forms, forced distribution, critical incidents, behaviourally anchored rating scales (BARS), and management by objectives (MBO). Appraisal problems include validity and reliability issues, unclear standards, halo and recency effects, distribution errors (central tendency, strictness, or leniency), and appraisal and similar-to-me biases. Who should be involved in the appraising? The options include the supervisor, the employee being appraised, peers, committees and/or subordinates. The use of 360-degree feedback which gathers and consolidates ratings from different sources (supervisor, self, peers, subordinates, and customers) has grown rapidly. Formal appraisal discussions take one of three forms: satisfactory-promotable, satisfactorynot promotable, or unsatisfactory-correctable. Action plans are developed accordingly. Appraisals can be difficult task for managers; training can help to improve the quality of the performance appraisal dialogue between manager and employee and increase satisfaction.

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LECTURE OUTLINE I.

THE STRATEGIC IMPORTANCE OF PERFORMANCE MANAGEMENT

Performance management is the process encompassing all activities related to improving employee performance, productivity, and effectiveness (goal setting, pay for performance, training and development, career management, and disciplinary action). Effective performance management can fulfill three main purposes: align employee actions with the organization’s strategic goals, help to change organizational culture, and provide input in to other HR systems, such as career development and remuneration (compensation). In contrast, performance appraisal is a formal, relatively infrequent process in which an employee’s performance is evaluated along a predetermined set of criteria that is quantified via a formal performance score.5 Performance appraisals are used for a variety of decisions such as training recommendations, merit based pay increases, promotion, or termination decisions.

II. THE PERFORMANCE MANAGEMENT PROCESS The five steps in the process are: (Fig. 7.1 p. 153)  defining performance expectations and goals  providing on-going feedback and coaching  conducting performance appraisal and evaluation discussions  determining performance rewards/consequences  conducting development and career opportunities discussions.

III. STEP 1: DEFINING PERFORMANCE EXPECTATIONS Defining performance expectations and goals is a critical step in employees’ understanding how their work makes a contribution to achieving business results. Job performance consists of two dimensions; task performance reflects direct contributions to job-related processes, whereas contextual performance reflects indirect contributions by improving a range of supportive behaviours that go beyond those specified for the job (e.g. helping, displaying positive attitude).

Performance expectations need to be legally defensible, clear and measurable, communicated to employees and supported by the organization. Expectations cannot discriminate directly or indirectly against anyone on protected grounds (gender, age, disability, and so on). In global companies performance appraisal criteria may need to be modified to be consistent with cultural norms and values.

Teaching Tip: Use the Global HRM Discussion Box (p. 155) to provide a specific example of cultural differences.

Teaching Tip: Ask students to draw on their past experience to come up with a quick list of other contextual performance behaviours– behaviours that make the work go smoothly and make working there more enjoyable.

IV. STEP 2: PROVIDING ONGOING COACHING AND FEEDBACK Traditionally, performance appraisals were conducted annually, in formalized processes, but some .

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businesses environments are more dynamic and need to engage in more frequent or timely assessments of employee performance. There is an ongoing evolution in performance management in Canadian companies, with over 50 percent of organizations making changes to their performance management systems in the last three years. There is an increased focus on coaching (A process for improving work performance, in a frequent contact, hands-on process aimed at helping employees improve performance and capabilities. It requires the manager to give guidance, encouragement, and support to an employee, and the employee to assume the role of a learner. A focus on developing people requires more frequent and informative conversations and coaching by managers, rather than annual reviews. Effective managerial coaching requires thinking, informing, empowering, assessing, advising, being professional, caring, developing others, and challenging employees for continuous improvement.

V. STEP 3: PERFORMANCE APPRAISAL AND EVALUATION DISCUSSION The performance appraisal itself is generally conducted with the aid of a predetermined and formal method to increase validity and reliability and to reduce error and bias.

1. Formal Appraisal Methods a. Graphic rating scale – rating on traits or duties, b. Alternation ranking method – best vs. worst trait rating, c. Paired comparison method – between employees trait rating (see Fig. 7.2 p. 158) d. Forced distribution method – set % of ratings must fall into each rating category e. Critical incident method – desirable & undesirable behaviours f. Narrative forms – written description of issue, goals, solutions) g. Behaviourally anchored rating scales (BARS) – more descriptive rating scale focused on behaviours not traits (see Fig. 7.3, p. 160) h. Management by Objectives (MBO) – assessment of progress against specific, measurable goals All of these methods have advantages and disadvantages (see Table 7.2 p. 167).

Teaching Tip: Consider assigning one of the experiential exercises (p. 1 7 6 ) as class preparation followed by small group, in-class discussion and debrief. Alternatively, or in addition, have students comment on the method(s) of performance appraisal used in organizations where they work/have worked. For added interest, and if time allows, hold a short discussion on whether the performance of volunteers in non-profit organizations should be evaluated.

2. Mixing the Methods Most firms combine several appraisal techniques in order to offset disadvantages of single methods Ultimately no one single solution is best for all performance management systems.

Determining factors include resource constraints (time, money, and people) and organizational factors (budget, turnover, strategy).

VI. STEP 4: DETERMINE PERFORMANCE REWARDS/CONSEQUENCES 2. Some time after the performance review has taken place, the manager should use the salary planning guidelines to determine the appropriate rewards or consequences, comparing actual performance against the defined levels. Performance rewards are given through merit pay or extra payment such as a cash bonus. The two most important aspects used to determine the appropriate reward/consequence are achievement of goals and how the employee meets the .

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3. defined standards. Further detail on compensation and rewards is provided in Chapter 8.

4.

I. STEP 5: CAREER DEVELOPMENT DISCUSSION 5. Follow these steps to ensure the performance appraisals have the desired effect and are legally defensible.

Let the employee know that his or her performance is unacceptable, and 6. explain your minimum expectations. Ensure that your expectations are reasonable. Let employees know that warnings play a significant role in the process of establishing just cause; employees must be warned and told that discharge will result if they continue to fail to meet minimum standards. Ensure that you take prompt corrective measures when required; failure to do so could lead to a finding that you condoned your employee’s conduct. Avoid sending mixed messages, such as a warning letter together with a “satisfactory” performance review. Provide the employee with a reasonable amount of time to improve performance. Be prepared to provide your employees with the necessary support to facilitate improvement.

7. Formal Appraisal Discussions The essence of a performance appraisal is the feedback provided in a one-on-one conversation called the formal appraisal discussion. However, discussions are often avoided by supervisors and managers who have not been trained to provide constructive feedback and deal with defensive employees.

Teaching Tip: Ask students to work in pairs or groups to share their experiences with performance appraisal – non-existent, just given a rating, or actually received constructive and useful feedback.

8.

Types of Performance Appraisal Results 3. Types of Interviews—There are three basic types of formal appraisal discussions, each with its own objectives. a. Satisfactory – promotable: Easy, discuss career plans and develop specific action plan for educational and professional development b. Satisfactory – not promotable: not as easy, goal is to maintain satisfactory performance often through valued incentives (e.g. time off, small bonus, verbal recognition, additional decisionmaking authority) c. Unsatisfactory – correctable: can be difficult, goal is to lay out action plan to resolve unsatisfactory performance Teaching Tip: Ask whether there should be a fourth category of unsatisfactory – uncorrectable 4. Preparing for the Formal Appraisal Discussion There are three things to do in preparation for a formal appraisal discussion/interview:   

Assemble the performance data, compare to performance standards, review past appraisals Prepare the employee – give at least a week to review own performance, analyze problems, read over job description, formulate questions and comments Find a mutually agreeable time and private place and allow plenty of time (non- supervisory < 1 hr, supervisory 2 -3 hours) .

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Teaching Tip: Collect data from students on how long their appraisal interview was and where it took place. Graph the data and present at the start of the next class or post on the learning management system.

5. Performance Appraisal Problems and Solutions Because of the high stakes (raises, careers and peace of mind) performance appraisal tends to be an emotional and difficult experience for both managers and employees. The result is often dishonest appraisals, avoidance of appraisals, and serious concerns about the fairness of the process. According to several studies, the majority of organizations view their performance management systems as ineffective. Many problems are associated and can be fixed with the design of the appraisal system. a. Validity and reliability – relevant to the job, cover all aspects of the job, be specific, produce consistent ratings (see also Ch. 5) b. Rating scale problems – 7 main problems  Unclear performance standards (see Table 7.1, p. 165)  Halo effect – other ratings influenced by rating on one trait  Central tendency – only using centre of scale  Strictness/leniency – only using top or bottom of scale  Appraisal bias – allowing individual differences to influence ratings (e.g. gender, age, disability, race, and so on)  Recency effect – using only recent performance as basis for ratings  Similar-to-me bias – giving higher rating based on rater-ratee similarity Teaching Tip: Uncover students’ understanding of these problems by having them make the connection to grading. Students often believe that there is a forced distribution system in play and complain about strict or central tendency grading (no one can get an “A”). Link back to the workplace by discussing the impact on employees when they question the quality of the rating process and the raters.

6. How to Avoid Appraisal Problems There are at least four ways in which managers can minimize the impact of appraisal problems:    

Make appraisers aware of appraisal problems Provide training in accurate rating and effective appraisal discussions Choose the right appraisal tool (see Table 7.2, p.167) Use multiple raters to hopefully offset biases or idiosyncrasies, responsibility for rating is diffused so easier to give poor rating

7. The Use of Technology in Performance Appraisals Over the past few years, web-based performance management has become a mainstream practice, even in medium and small organizations. Basic benefits include ability to keep computerized notes on each employee and combine notes with trait ratings to generate .

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written text for each part of the appraisal. Other benefits include higher completion rates, clearer direction to and support from employees, better information for managers and executives through advanced reporting capabilities, and succession planning tools.

Technology has also enabled electronic performance monitoring (EPM) where supervisors track and capture performance data electronically through computer networks, wireless audio or video links, GPS devices, and monitoring of customer service phone calls.

Teaching Tip: Have students list as many ways as possible that their supervisor can find out what they are doing, how much they are doing, and where they are using electronic monitoring. For instance, security cameras can also capture retail clerk activity. Discuss the pros and cons of electronic monitoring.

8. Who Should Do the Appraising Although supervisors are the traditional source of performance appraisals, there are several other options. a. Supervisors – easy, makes sense, is in position to observe, is responsible for performance b. Self – opportunity valued by employees, sometimes inflated, more accurate if asked to rate oneself vs. others, may accentuate differences between rater and rate c. Peers – often more opportunity to observe at more revealing times, “logrolling” problem where collusion results in high ratings, can improve perceptions of open communication, motivation, group cohesion and satisfaction, especially in self-managed teams d. Committees – group of supervisors, more reliable, fair and valid e. Subordinates – observers of managerial performance, employee-identified or anonymous “upward feedback” helps identify and solve problems, especially valuable for developmental purposes, simply knowing you will be appraised can raise performance f.

360-Degreee Appraisal – feedback collected from multiple different sources (see Fig. 7.4, p. 171), evidence of effectiveness is mixed 360-degree feedback was originally used only for training and development but is now used for performance management and pay as well. This is important support for coaching, leadership development, succession planning, rewards and recognition.

Reasons for rapid growth in 360-degree approach  Flatter organizations employ more open communication climate  Fits goals of continuous learning  Meaningful in today’s reality of complex jobs and matrix and team structures  Enhances perceptions of fairness “jury” versus a “judge” Several common features of 360-degree systems are:  Confidential and anonymous  Completed by appropriate parties (those with knowledge of performance)  Use custom-designed questionnaires linked to strategy, vision, and values  Information compiled into individualized reports .

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Advice for using 360-degree feedback  Have performance criteria developed by a representative group familiar with job  Be clear about who will have access to reports  Provide training for all supervisors, raters, and rates  Assure all raters that their comments will be kept anonymous  Plan to evaluate the 360-degree feedback system for fine-tuning.

Teaching Tip: As preparation for class, ask students to use their social network (family and friends) to find someone who has gone through a 360 degree appraisal process either as an appraiser or as the person being appraised, and ask them if they would share their thoughts on the process.

I.

LEGAL AND ETHICAL ISSUES IN PERFORMANCE MANAGEMENT

Ethics should be the bedrock of performance management; “tell people where they stand and be straight with them”. Factors that promote a legally defensible process include:    

Using job analysis to create job performance standards Using this information to develop/purchase behavioural rating instruments Providing definitive performance standards to all employees Using clearly defined individual dimensions of job performance

 Avoiding abstract trait names if using graphic rating scale  Employing subjective supervisory ratings as only one component of appraisal  Training supervisors to use rating instruments properly and minimize bias  Allow regular contact between appraisers and employees being evaluated  Having more than one appraiser conduct independent appraisals  Using formal appeal mechanisms and review of ratings by upper-level managers  Documenting all evaluations and reasons for any termination decision Providing corrective guidance to assist poor performers in improving their performance

II. THE FUTURE OF PERFORMANCE MANAGEMENT Recent research indicates that effective performance management involves:     

Linking business goals and strategy Showing leadership and accountability at all organizational levels Closely tying appraisal results to reward and recognition outcomes Investing in employee development planning Having an administratively efficient system with sufficient communication support

The key success factor for effective appraisals is the quality of the dialogue between manager and employee.

DISCUSSION BOXES Global HRM: Performance Appraisal Criteria in China (p. 155) The use of performance appraisal has increased in China since 1978, but performance appraisal criteria .

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differ from those in the west. Reflecting the Confucian view achievement is a function of effort rather than ability; as such, the attitudes and moral character of a person have been regarded as highly relevant to performance. However, researchers discovered that, when given a list of appraisal criteria from both eastern and western style appraisals, Chinese workers picked three factors that were very acceptable, including work dedication, efficiency and teamwork. Thus, the researchers demonstrated that carefully selected criteria can be applicable across cultures.

STRATEGIC HR: Jaguar Land Rover Formal Appraisal Discussion Training. (p. 164) When Indian conglomerate Tata took over carmaker Jaguar Land Rover in 2008 the performance management process was redesigned, with one component being new performance appraisal training for its 1500 managers. Managers were coached on specific techniques for managing the formal appraisal discussion including: “say what you see”, empathy, “broken record”, active listening, questioning, reassurance, nonverbal communication, and calm, even tone and pace.

ETHICAL DILEMMAS Is it fair to factor in employee self-ratings in 360-degree performance appraisal when we know that these appraisals tend to be inflated? (p. 172) While it is true that employees value the opportunity to participate in performance appraisal factoring in self-ratings makes a great deal of sense. Employees are more likely to accept and act upon the results if they have had the opportunity to provide input. Furthermore, since other raters may have a strictness bias, which may “balance out” the final evaluation results, resulting in composite ratings that are more reliable, fair, and valid. The difference between employee self-ratings and others ratings can be a useful point of discussion, as some employees are not aware of how they are perceived by others.

KEY TERMS 360-degree appraisal A performance appraisal technique that uses multiple raters including peers, subordinates, supervisors, and customers. (p. 171) alternation ranking method Ranking employees from best to worst on a particular trait. (p. 158) appraisal bias The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings that these employees receive. (p. 166) behaviourally anchored rating scale (BARS) An appraisal method that aims to combine the benefits of narratives, critical incidents, and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance. (p. 159) central tendency A tendency to rate all employees in the middle of the scale. (p. 165) contextual performance An individual’s indirect contribution to the organization by improving the organizational, social, and psychological behaviours that contribute to organizational effectiveness beyond those specified for the job (p. 154)

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critical incident method Keeping a record of uncommonly good or undesirable examples of an employee's work-related behaviour and reviewing it with the employee at predetermined times. (p. 159) electronic performance monitoring (EPM) Having supervisors electronically monitor the amount of computerized data an employee is processing per day and thereby his or her performance. (p. 168) forced distribution method Predetermined percentages of ratees are placed in various performance categories. (p. 158) formal appraisal discussion An interview in which the supervisor and employee review the appraisal and make plans to remedy deficiencies and reinforce strengths. (p. 162) graphic rating scale A scale that lists a number of traits and a range of performance for each. The employee is then rated by identifying the score that best describes his or her level of performance for each trait. (p. 156) halo effect In a performance appraisal, the problem that occurs when a supervisor's rating of an employee on one trait biases the rating of that person on other traits. (p. 165) management by objectives (MBO) Involves setting specific measurable goals with each employee and then periodically reviewing the progress made. (p. 161) paired comparison method Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating the better employee of the pair. (p. 158) performance appraisal A formal, relatively infrequent process in which an employee’s performance is evaluated along a predetermined set of criteria that is quantified via a formal performance score (p. 153) performance management The process encompassing all activities related to improving employee performance, productivity, and effectiveness. (p. 153) recency effect The rating error that occurs when ratings are based on the employee’s most recent performance rather than performance throughout the appraisal period. (p. 166 similar-to-me bias The tendency to give higher performance ratings to employees who are perceived to be similar to the rater in some way. (p. 166) strictness/leniency The problem that occurs when a supervisor has a tendency to rate all employees either high or low. (p.166) task performance An individual’s direct contribution to their job –related processes. (p. 154) unclear performance standards An appraisal scale that is too open to interpretation of traits and standards. (p.165) REVIEW AND DISCUSSION QUESTIONS (p. 175) 1. Describe the five steps in the performance appraisal process. (p. 153-162) The five steps are:  Defining performance expectations  Providing ongoing feedback and coaching .

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2. Explain how to ensure that the performance appraisal process is carried out ethically and without violating human rights laws. (p. 172-173) In order to ensure that the performance appraisal process is carried out ethically and without violating human rights laws:  keep well documented performance records and performance appraisal feedback  let employees know where they stand and be straight with them  conduct a job analysis to ascertain characteristics required for successful job performance  incorporate these characteristics into a rating instrument tied to specific job behaviours  ensure definitive performance standards are provided to all  use clearly defined individual dimensions of job performance  use different kinds of ratings  train supervisors  ensure appraisers have regular contact with appraisees  use multiple appraisers  use formal appeal mechanisms and reviews  document all decisions  provide corrective guidance 3. Discuss the pros and cons of using different potential raters to appraise a person's performance. (p. 169-172) Immediate Supervisor Pros: The supervisor has easy access to the employee and knows the employee’s work. Cons: Supervisors are prone to rater errors.

Peers Pros: Effective in predicting future management success, high correlation between peer and supervisor ratings, more opportunity to observe ratees, and to observe them at more revealing times than supervisors.

Cons: Logrolling; all the peers simply get together to rate each other high.

Rating Committees Pros: Using multiple raters can be advantageous. While there may be a discrepancy in the ratings made by individual supervisors, the composite ratings tend to be more reliable, fair, and valid. When there are variations in raters' ratings, they usually stem from the fact that raters often observe different facets of an employee's performance; the appraisal ought to reflect these differences.

Cons: This method is very time-consuming.

Self Pros: Employees value the opportunity to participate in performance appraisal more for the opportunity to be heard than for the opportunity to influence the end result.

Cons: Employees usually rate themselves higher than they are rated by supervisors or peers.

Appraisal by Employees (Subordinates) Pros: When conducted throughout the firm, the process helps top managers diagnose management styles, identify potential "people" problems, and take corrective action with individual managers as required. Such employee ratings are especially valuable when used for .

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developmental rather than evaluative purposes. Managers who receive feedback from employees who identify themselves view the upward appraisal process more positively than do managers who receive anonymous feedback.

Cons: Employees (not surprisingly) are more comfortable giving anonymous responses, and those who have to identify themselves tend to provide inflated ratings.

360-Degree Appraisal Pros: The 360-degree approach supports the activities of performance feedback, coaching, leadership development, succession planning, and rewards and recognition. This method is also more meaningful in today's reality of complex jobs, with matrix and team reporting relationships.

A 360-degree appraisal can be perceived as a jury of peers, rather than the supervisor as a single judge, which enhances perceptions of fairness.

Cons: significant investment of time required for it to function successfully. There are few data on the effectiveness of 360-degree feedback, and some organizations have abandoned it for appraisal purposes because of negative attitudes from employees and inflated ratings.

4. Describe two examples of important techniques managers may use during a formal appraisal discussion (p. 163).

Follow these steps: assemble the data, prepare the employee and find a mutually agreeable time and place and allow plenty of time.

5. Explain how to handle a defensive employee in a formal appraisal discussion. (p. 191- 192) Important points to remember when faced with a defensive employee in a performance appraisal interview are: recognize defensive behaviour as normal; never attack a person’s defences; postpone action; and recognize human limitations.

CRITICAL THINKING QUESTIONS (p. 175-176 1. Assume you are presenting to an upper-year group of business students and one student asks the question, “Which performance appraisal system is the best?” How would you respond to that question?

Most firms combine several appraisal techniques in order to offset disadvantages of single methods (see Table 7.2 p. 1 6 7 ). Ultimately no one single solution is best for all performance management systems. Determining factors include resource constraints (time , money, and people) and organizational factors (budget, turnover, strategy).

2. How can the problem of inconsistency between managers who are rating workers be solved, or at least diminished? Make two or more suggestions.

To eliminate or minimize rater inconsistency, there are many strategies that can be used. Rater training is one. Making raters aware of rating scale problems is essential, since understanding the problems can help to prevent them. Improving appraisal accuracy also requires reducing outside factors, such as union pressure and time constraints.

Other recommendations to improve accuracy of ratings include:  Conducting a job analysis to ascertain characteristics required for successful job performance and using this information to create job performance standards. .

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          

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Incorporating these characteristics into a rating instrument, preferably BARS. Providing definitive performance standards to all raters and ratees.

Using clearly defined individual dimensions of job performance, rather than undefined global measures.

Avoiding abstract trait names (for example, “loyalty” or “honesty”) when using a graphic rating scale, unless they can be defined in terms of observable behaviours.

Employing subjective supervisory ratings (essays, for instance) as only one component of the overall appraisal process.

Training supervisors to use the rating instrument properly, providing instructions on how to apply performance appraisal standards, and ensuring that subjective standards are not subject to bias.

Ensuring that appraisers have regular contact with the employee being evaluated.

Having more than one appraiser conduct the appraisal, and conduct all such appraisals independently, whenever possible. This process can help to cancel out individual errors and biases.

Utilizing formal appeal mechanisms and a review of ratings by upper-level managers.

Documenting evaluations and reasons for any termination decision.

Providing corrective guidance to assist poor performers in improving their performance, where appropriate.

3. What are the challenges of the coaching method, where feedback is given more frequently and informally? Identify possible solutions to these challenges.

Communication needs to be frequent, ongoing and the supervisor needs to recognize the performance rather than rate it. The manager is called on to give guidance, encouragement and support and the employee needs to be an active learner – new roles for both. Coaching requires thinking, informing, empowering, assessing, advising, being professional, caring, developing employees and challenging 4. Some HR professionals avoid using BARS given that it is so time-consuming to develop. How could the development steps be streamlined?

Note: specific development steps appear are not in the fourth edition of the text. Instead, other ideas for making the development of BARS more efficient are to use slightly more generic BARS available from consultants and other assessment providers and modify to suit the organization and its specific jobs. HR professionals could also use their social networks to see if any of their contacts have BARS for benchmark jobs. Using pre-determined BARS for most jobs (with customization) and just creating original BARS for unique jobs could help to streamline the process.

5. Do you agree with the use of annual performance reviews? Why or why not?

Students can discuss coaching versus annual appraisals. There are pros and cons to each. Have the students identify jobs that are better suited to annual appraisals and jobs that are suited for coaching.

6. How might a supervisor handle a situation in which negative appraisals in the past have caused an employee to undervalue his or her performance?

From one appraisal to the next, the supervisor has a key function to provide the employee with a reasonable amount of time to improve performance. Perhaps more important, he or she should provide active support to facilitate improvement. In this connection, the supervisor could provide frequent constructive feedback and schedule periodic (monthly or quarterly, for example) conversations to review performance and agree on targets for the next period.

Once the employee’s work has improved, the supervisor should clearly communicate this to the .

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employee in order to clarify the employee’s perceptions of the value of his/her performance. It may be that the negative appraisals were related to political issues or personality differences with a former boss, which may have caused the employee to undervalue his/her work effort. A new supervisor may evaluate the employee’s work more positively and may need to provide extra positive reinforcement through ongoing verbal recognition of the employee’s good work in order for the employee to enhance his/her perceptions about the value of his/her work.

7. Discuss how employees might respond to the proposed implementation of electronic performance management systems, such as call monitoring, and so on. How might an organization deal with employees’ reactions?

Employees might refuse to work under such conditions and quit or initiate a grievance. Good change management practices such as explaining the benefits to both the organization and employees, educating employees on how the system functions and uses to which the resulting data will be put are primary responses to employees concerns and should be put in place before the technology is implemented 8. How might a supervisor deal with an extremely defensive yet productive member of his or her team in the event of having to deliver the “improvement portion” of the employee’s performance appraisal?

What techniques would the supervisor need to use to maximize the efficacy of the appraisal and reduce the defensibility of the employee?

In order to deal with this situation, the supervisor should;  Recognize that defensive behaviour is normal  Never attack a person’s defences  Possibly postpone action  Recognize human limitations What this translates to is giving the person time to digest the information, sending them off with a written evaluation, and possibly setting up a follow-up meeting. In between meetings the person may have a better opportunity to reflect on their own performance (if this step was not included in the preparation for the initial meeting and consult with valued others. Hopefully they will come back with a more balanced perspective and some questions, which should be encouraged. For these types of people there often needs to be repeated stressing of their positive contributions, as they pay more attention to negative information.

EXPERIENTIAL EXERCISES (page 176) 1. Working individually or in groups, develop a graphic rating scale for a retail sales associate and a fast-food restaurant manager. Reflect on the types of biases that your scale introduces inadvertently, and discuss the challenges you faced when developing the scale.

To answer this question, students must first identify the main duties and responsibilities of each of the jobs, and then establish an appropriate traits and behaviours related to different levels of each trait.

Table 7.1 (p. 165) can help students to avoid the common pitfall of lack of clarity in performance standards in graphic rating scales.

Appraisal criteria might include reliability, quality of work, amount of initiative, problem-solving skills, and significance of contribution to the firm, among numerous other things. Further criteria used for rating a fast food restaurant manager could include speed and accuracy of budget and accounting, .

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management of employees, as well as customer-relations skills.

Biases could include all – validity issues, reliability issues, unclear performance standards, halo effect, central tendency, strictness/leniency, appraisal bias, recency effect and similar-to-me bias.

Challenges may include not knowing the tasks and associated behaviours to accomplish the tasks of the 2 jobs. A starting point may be to have the students visit the National Occupational Classification (NOC) to see some job descriptions. Another challenge may be in not knowing how to recognize when the biases are creeping in and affecting the ratings. Having multiple raters may help minimize this issue.

2. Working individually or in groups develop over a week, develop a set of critical incidents covering the classroom performance of one of your instructors. Categorize the critical incidents to identify themes within activities that are viewed positively and negatively. Expand on this identification by assessing how the one-week period may be affecting the results and what differences you would have expected had you selected a different week within the year to conduct the assessment.

The critical incident method is described on p. 159 (see also Table 7.2, p. 167). Students should make sure they keep a log of both desirable and undesirable examples, and be as specific as possible in describing the behaviour of their instructor. There are some limitations to this exercise. Critical incidents recorded over a one-week period may reflect recent performance that is not representative (the recency effect). To be effective, examples of performance must be recorded over the entire appraisal period (typically one year).

However, the exercise will provide students with an opportunity to observe and record examples of particularly effective and/or ineffective performance and to see how such information can provide concrete data on which to base an appraisal, specific examples to explain why performance is not meeting standards, and ways in which it can be improved.

3. Working in groups, using the NOC job description for cafeteria staff at a local university or college, develop a b e h a v i o u r a l l y a n c h o r e d r a t i n g s c a l e w i t h f i v e t o e i g h t i t e m s for the job of a chef within the cafeteria. Identify why your prioritized the items that you did.

4. Once you have drafted your form, exchange forms with another student or group. Critique and suggest possible improvements to the forms. Then with your revised form in hand, develop statements of behavioural incidents for two of your rating scale items to address the following circumstances: • • •

the employee has achieved outstanding results the employee meets acceptable standards the employee has performed very poorly in this aspect of the job

Be prepared to share and critique statements developed by other students. Debrief the exercise as directed.

The purpose of this exercise is to give the students practice in developing factual and specific performance feedback. It usually takes 55-60 minutes to complete including a large class debrief of some of the feedback statements.

Debrief: Ask students to volunteer some of their feedback statements for large class critique. Make sure to get examples covering all three circumstances. If necessary, ask students how they would feel if they were a professor receiving the feedback as presented.

Many times, the students err by making personal judgements about character and personality rather .

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than focusing on behaviour. Teaching Tip: To help students understand behaviours, have them search online for Competency Dictionaries. Many universities and government departments have competency dictionaries online. Typically, each skill is defined and effective behaviours that demonstrate that skill are listed.

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PART FOUR: TOTAL REWARDS CHAPTER 8 STRATEGIC PAY PLANS LEARNING OUTCOMES EXPLAIN the strategic importance of total rewards.

DEFINE pay equity and EXPLAIN its importance today.

EXPLAIN in detail each of the three stages in establishing pay rates.

DISCUSS competency-based pay.

EXPLAIN under what conditions it is best to use an incentive plan.

COMPARE the three types of organization-wide incentive plans.

CHAPTER SUMMARY There is a new term emerging among HRM compensation professionals: employee value proposition (EVP). The employee value proposition may be defined as the total value an employee receives from the employer, including compensation, benefits, career management, workplace/lifestyle, and employee pride. It defines the commitment the company will make to develop the employee in exchange for the effort the employee puts in to benefit the company. A total rewards approach considers individual reward components as part of an integrated whole to determine the best mix of rewards that are aligned with business strategy and provide employee value, all within the cost constraints for the organization. Establishing pay rates involves three stages: job evaluation (determining the relative worth of jobs), conducting market wage and salary surveys, and combining job evaluation and market wage/salary survey data through a wage curve. Ideally pay rates should ensure internal and external equity. Compensable factors (e.g. skill, effort, responsibility, and working conditions) are used to compare jobs; jobs of approximately equal value are combined into pay grades for pay purposes. In contrast, competency-based pay plans provide employee compensation based on the skills and knowledge that they are capable of using, rather than the job that they currently hold.

Compensation for managers includes salary, benefits, short-term incentives, long-term incentives and perquisites. Out-of-line and red-circle wages must be addressed, as must situations of systemic pay inequity (e.g. where women make less than men for comparable worth jobs). Organizations have used a combination of fixed and variable pay (cash bonus/incentives, profit-sharing, gainsharing, team-based incentives, and so on) to achieve the organization’s strategy for a long time. A major challenge is to determine what incentives are appropriate in a given circumstance. Organization-wide incentives (e.g. profit-sharing, stock ownership, gainsharing) attempt to make employees think like owners. Incentive plans are particularly appropriate when units of output are easily measured, employees can control output, the effort-reward relationship is clear, work delays are under employees’ control, and quality is not paramount.

LECTURE OUTLINE I.

THE STRATEGIC IMPORTANCE OF TOTAL EMPLOYMENT REWARDS

There is a new term emerging among HRM compensation professionals: employee value proposition (EVP). The employee value proposition may be defined as the total value an employee receives from the employer, including compensation, benefits, career management, workplace/lifestyle, and employee .

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pride. It defines the commitment the company will make to develop the employee in exchange for the effort the employee puts in to benefit the company. Borrowed from the marketing concept of customer value proposition, it has become a significant consideration as globalization and demographic changes continue to influence the attraction and retention of an organization’s human talent in the second decade of the twenty-first century. Simply put, the employee value proposition asks the question, “Why would the people our organization needs want to join, perform well and stay?”

Total employment rewards refer to an integrated package of all rewards (monetary and nonmonetary, extrinsic and intrinsic) gained by employees arising from their employment (see Fig. 8.1, p.

179). A total rewards approach recognizes how the business environment has changed (e.g. more virtual, knowledge-based, and service-based) and attempts to determine the best mix of rewards that are aligned with business strategy and that provide employee value, within the cost constraints of the organization.

1. The Five Components of Total Rewards The five components of total rewards are: compensation, benefits, work-life programs, performance and recognition, and development and career opportunities.

Teaching Tip: A s k s tudents w hat they w ant i n thei r c ompensati o n pac kag e. .

II. MONEY AND MOTIVATION Organizations have used financial incentives for over 100 years. Today’s effects to achieve the organization’s strategy through motivated employees include fixed pay that is independent of performance (e.g. base pay, consistent allowances) and variable pay, which is tied to performance/productivity (e.g. cash bonuses/incentives, profit-sharing, gainsharing, team-based incentives, and so on). More than 84% of Canadian employers have one or more variable pay plans in place (see Figure 8.2, p. 1 8 0 ); the advantages of performance-based pay are that it controls base pay inflation and provides a “line of sight” between individual jobs and organizational success, making employees think more like partners in the business. Merit pay: two basic characteristics – raise (permanent addition to salary) given at designated time of year and is based exclusively on individual performance.

Advantages: performance-linked compensation can be effective while giving same raise may reduce effort (will get raise regardless of contribution) Disadvantages: often not necessarily tied to performance, validity of performance-appraisal system essential, despite performance differences supervisors minimize differences between employees in computing raises to avoid problems, everyone thinks they are “above-average” performers and should get big raise, can rapidly increase salary budget.

Recent research reveals that base pay is regarded by employees and employers as a leading factor in attraction and retention and the most effective attraction strategy was offering competitive base salaries, and the top reason for turnover among employees was dissatisfaction with cash compensation.

Opportunities for advancement, work–life balance programs, and competitive benefits programs are also used by over 70 percent of Canadian companies to attract talent.

Teaching Tip: Remind students that the purpose of rewards is to attract, retain, motivate and engage employees. Engagement refers to a positive emotional connection to the employer and a clear understanding of the strategic significance of the job, which results in discretionary effort on the part of the employee. Research shows competitive base pay helps to attract employees, .

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but career opportunities are what make them stay (as long as the cash compensation is satisfactory).

Ask students what engages them to commit and stay with an organization.

III. BASIC CONSIDERATION IN DETERMINING PAY RATES Four basic considerations influence the formulation of any pay plan: legal requirements, union issues, compensation policy, and equity.

1. Union Influences on Compensation Decisions Historically, wage rates have been the main issue in collective bargaining, but other issues (e.g. time off with pay, income security during layoff, cost-of-living adjustments, and pensions) are also important. a. Union attitudes towards compensation decisions – suspicion about validity and motives behind job evaluation systems, involvement of union is critical to acceptability of pay decisions, pay determination processes can be reviewed by Industrial Relations Board Teaching Tip: Compare pay rates for unionized and non-unionized workers doing the same job and use this as a launching pad to discuss pay implications of privatization of government services.

2. Compensation Policies Internally set policies include where to set pay levels relative to the market (leader or follower), assume an “art-maker” position, basis for salary increases, probationary pay, overtime (outside of legislated), and pay during vacations, jury duty, military service and other leaves of absence. Determining factors include business strategy and cost of various types of compensation.

3. Perceptions of Equity Internally and Externally External equity is ensured when employees perceive their pay as fair given the pay rates in other organizations (for same or similar jobs) and helps to attract and retain employees.

Internal equity is when employees perceive their pay as being fair given the pay rates of others in the organization (in same, similar, and dissimilar jobs) and helps to promote job satisfaction and motivation.

Teaching Tip: Students and younger workers often equate physical activity “busyness” with worth.

Have students debate the commonly heard complaint that managers are overpaid asdbecause they just sit in their office doing nothing.

4. Legal Considerations in Compensation a. Employment/Labour Standards Acts (Canada Labour Code) – governs minimum wage, overtime pay, vacation pay, statutory holiday pay, termination (severance) pay b. Pay Equity Acts – must use gender-neutral job evaluation system, pay for femaledominated jobs that are equal in value to male-dominated jobs must be increased c. Human Rights Acts – prohibited grounds alone cannot explain differences in pay d. Canada/Quebec Pension Plan – mandatory employer and employee contributions .

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e. Other legislation affecting compensation – worker’s compensation laws, Employment Insurance Act (no-fault termination, maternity leave, parental leave, compassionate care leave) Teaching Tip: Have students research and compare the legal standards in various provinces/territories and/or with various American states. Discuss the rationale for having a minimum wage and the contention that increasing the minimum wage will result in organizations hiring fewer workers (fixed wage budget).

IV. PAY EQUITY Pay equity requires that equal wages be paid for jobs of equal value, as determined by gender- neutral job evaluation techniques. Historically, the average pay for Canadian women has been considerably lower than that for men, and although it has closed somewhat over time the gap persists, even for women with same qualifications doing the same work as male colleagues. Factors such as differences in hours worked, experience levels, education levels, and level of unionization contribute to the gap along with systemic discrimination. Organizations sometimes claim that female and male jobs are not easily comparable, but the Supreme Court does not support this position. Fights for back pay can be very lengthy.

V. ESTABLISHING PAY RATES In practice, the process of establishing pay rates that are both externally and internally equitable requires three stages: internal job evaluation, conducting external wage/salary surveys, and combining the results of the first two stages to determine actual pay rates.

1. Stage 1: Job Evaluation Job evaluation involves a systemic comparison to determine the relative worth of jobs within a firm, usually by focusing on benchmark jobs, which are critical to the firm or commonly found in other organizations. Relative worth can be established intuitively through ranking methods or by looking at levels of compensable factors, which are fundamental elements of a job. 

Compensable factors – skill, effort, responsibility, and working conditions is most common set, alternative factors are know-how, problem solving, accountability, and working conditions, may need different factors for different departments, groups or units but use same set for comparing jobs within that dept./group/unit . Challenging if an organization has a large number of jobs but relatively easy in smaller organizations.



Job evaluation committee – diverse group (including employees, HR staff, managers, and union representatives), ensure fair and comprehensive representation of each job



Classification method – also known as grading method, categories jobs into classes (different level similar jobs) or grades (similar level dissimilar jobs) based on grade/group description



Point method –identify compensable factors and sub-factors, determine factor weights and degrees, assess the degree of each factor present in the job, then calculate overall point value (See Table 8.1, p. 187)

Teaching Tip: Having students go through a simple point method example can make it much easier to .

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grasp the concepts of compensable factors, degrees and relative worth. Consider using Experiential Exercise # 3, on p. 229. Other organizations you could use include car dealerships, high-end salons (receptionist, trainee stylist/hair washer, colourist, and stylist) or restaurant (chef, sous-chef, server, dishwasher, bartender).

2.

Stage 2: Conduct a Wage/Salary Survey A good wage/salary survey provides specific wage rates for comparable jobs; formal written questionnaire surveys are the most comprehensive. Information on what others are paying for the same or similar jobs can be obtained through any or a combination of: 

Formal and informal surveys by the employer – phone survey, conversations at professional meetings, formal written surveys.



Commercial, professional, and government salary surveys – e.g. Statistics Canada (see Table 8.2, p. 189), Toronto Board of Trade, Towers Watson, Mercer, Certified General Accountants and Professional Engineers Ontario.



Salary survey interpretation and use – large organizations participate on average in 11 surveys and use 7 in setting own compensation practices, watch for upward bias

Teaching Tip: Recruiters and hiring managers complain about students who are unrealistic about what they will make after graduation, so having them do a salary survey on their chosen occupation (or one they think may be a possibility) could have high value in terms of managing expectations as well as showing them how to find and compare salary surveys.

Have students explore the site , PayScale Canada.

3. Stage 3: Combine the Job Evaluation and Salary Survey Information to Determine Pay for Jobs The final stage is to assign pay rates to each pay grade, or job (if classes or grades not used), using a wage curve, which is a graphic description of the relationship between the value of the job (# points) and the average (market) wage paid for the job (see Fig. 8.3, p.190). 

Developing rate ranges – pay ranges reflect a series of steps or levels within a grade (see Table 8.3, p. 1 9 1 ), employees are placed somewhere in the range for their job based on experience and performance (see Fig. 8.4 p. 191)



Broadbanding - reducing the number of salary grades and ranges to include a wider range of jobs and salary levels, increases flexibility and accommodates boundaryless jobs



Correcting out-of-line rates – current wages/salaries may be too high or too low, if low then raise, if high then red circle and freeze until other jobs catch up, transfer or promote individual, or freeze, try to transfer/promote, if unsuccessful then cut pay

VI. PAY FOR KNOWLEDGE Pay-for-knowledge based systems are known as competency-based pay (managers and professionals) and skill-based pay (manufacturing). Pay for range, depth and types of knowledge that employees may be capable of using, rather than for the job that they hold.  Core competencies - knowledge and behaviours that all employees must exhibit (e.g. .

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customer service orientation). 

Functional competencies - specific to a particular occupation/organizational function (e.g. negotiation skills for salespeople).



Behavioural competencies – expected behaviours

Competencies can add flexibility but must be directly important, currently relevant, objectively measurable, and ideally obtained from on-the-job training (not classroom education). Pay for competencies should not replace or overshadow pay for performance.

VII. DEVELOPING EFFECTIVE INCENTIVE PLANS There are two major practical considerations in developing an effective incentive plans: when and how.

1. When to Use Incentives Goals need to be reasonable and achievable but not too easy, implement with management support, employee acceptance and supportive culture (teamwork, trust, and multi-level involvement), use when units of output can be measured, job is standardized, workflow is clear and delays are few or consistent     

Performance pay cannot replace good management Firms get what they pay for – watch for unintended consequences “Pay is not a motivator” – only buys temporary compliance Rewards rupture relationships – pursuit of individual rewards over teamwork Rewards may undermine responsiveness – focus on keeping status quo not making or responding to change

2. How to Implement Incentive Plans Seven principles that support effective implementation and lead to superior business results.       

VIII.

Pay for performance tied to critical business goals Link incentives to other activities (e.g. career development challenging opportunities) Link incentives to valued measurable competencies Match incentives to company culture (vision, mission, operational principles) Keep group incentive clear and simple Overcommunicate when it comes to recognizing value of employee contributions Meaningful work can be as much or more motivating than financial rewards

TYPES OF INCENTIVE PLANS

There are several types of incentive plans; incentives can be offered at individual, group, and organization-wide levels. Incentives can be formal or informal and monetary or non- monetary.

While there may be some common elements, plans often differ depending on the type of employee (e.g. operating, executive/managerial, salespeople, and professionally qualified employees. .

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IX. ORGANIZATION-WIDE INCENTIVE PLANS Most employers have incentive plans in which virtually all employees can participate.

1. Profit-Sharing Plans Most or all employees receive share of company profits (cash plan or cash and deferred benefits). Although limited in Canada (only 14% of employers) they are easy to administer and have tax advantages for employees. However, there are “line of sight” issues (weak link between individual effort and company performance), they produce one-time productivity improvement, and annual payout is less effective.

2. Employee Share Purchase/Stock Ownership Plan (ESOP) ESOPS are more popular than profit-sharing (approx. 60% of Canadian publically traded companies); believed to create sense of ownership and commitment. Cash contributions (employee, and sometimes employer) used to fund a trust which purchases shares of company stock (open-market or treasury stock). Stock distributed when employee leaves the company or on annual basis. Value of shares is taxable benefit to employees but can create tax problems if not vested or shares drop in value.

3. Gainsharing Plans Incentive plan that engages many or all employees in a common effort to achieve a company’s’ productivity objectives – any resulting cost-saving gains are shared among employees and the company (e.g. Rucker and impro-share plan). Straightforward and works well in stable organization with predictable goals and measures of performance. Most cost- savings are generated in yearly years “low-hanging fruit”. Payouts can vary by employees’ base salary and collective bargaining agreements.

Incentives for Individuals The Annual Bonus More than 90% of Canadian firms provide an annual bonus, which can be the same as, less than or more than the bonus received in the previous year. a. Eligibility – key position, salary level cut-off point, salary grade b. How much to pay out (fund size) – total allocation: non-deductible formula or deductible formula c. Determining individual awards – discretionary or target-based, individual, split-award or multiplier (product) method Teaching Tip: Have students debate the Ethical Dilemma (p. 220) about the basis for manager/executive bonuses. Linking back to performance appraisal errors (Ch. 7), what types of discrimination might come into play if bonuses are discriminatory.

RetentionIncentives Because short-term incentives can produce counterproductive behaviours (e.g. artificially keeping costs down, falsifying income records), many organizations also use long-term .

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incentives to influence executive decision-making and promote long-term growth perspective.

There are many types of long-term incentives of varying popularity (see Fig. 8.5 p.222). a. Stock options – right to buy stated # of shares in future at today’s price, often requires vesting period, popular but can be worthless due to factors outside of executives’ control, originally targeted at managers and highly skilled workers but now being used for nonmanagers and non-executives, seen as less effective and efficient than direct share ownership and distort true value of company (not reflected in financial statements) Teaching Tip: Have students look at the 3 year stock price history for a company of interest to see what the effect would have been of being granted stock options 3 years ago. Would the stock options have increased in value, maintained value, or become less valuable. b. Plans providing share “units” – granted specified # of units whose value is equal to and fluctuates with stock price, subject to certain conditions – performance share unit, restricted share unit, and deferred share unit plan.

Incentives for Groups or Teams Special rewards are needed to help groups and teams meet their goals 

INCENTIVES FOR SALESPEOPLE

Sales compensation plans have typically relied on incentives (e.g. commissions), but this varies by industry. Plans can range from 100% salary to 100% commission, but many organizations use a combined approach.

1. Salary Plan – fixed salary with small awards/prizes, better fit for prospecting, customerrelationship building, and account servicing, especially in technical industries (e.g. aerospace), predictable income and expenses, facilitates transfers, can be demotivating to highperforming salespeople because of seniority criteria 2. Commission Plan – paid only for results, attracts high performers, selling investment is reduced, easy to understand and compute, but puts too much focus on making sale at any cost, can create wide variation in income between individuals and over time, pure commission associated with higher turnover 

Incentives for Operations Employees

Several incentives plans are particularly well-suited for use with operations employees, such as those doing production work. 

Piecework Plans

Piecework is the oldest, and still most commonly used, incentive plan. Earnings are tied directly to what the worker produces either amount or amount per given period of time. Job evaluation is used to determine production standards for units/hour or units/day. Three types of piecework plan are straight piecework (no guarantee, solely on amount), guaranteed piecework (minimum wage regardless of quantity plus bonus), and differential piece-rate (percentage premium for extra production). .

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Advantages: simple to calculate, easily understood by employees, appear equitable in principle, and powerful because rewards are tied to performance.

Disadvantages: disliked by employees due to employers raising of production standards to suppress wages, standards need to be revised every time jobs are re-evaluated, and because production standards predict income – decreases interest in improving quality, job rotation, learning new technology/equipment, doing preventative maintenance of equipment, or helping other workers (if individual plan). 

Team or Group Incentive Plans

Due to the disadvantages of piecework plans, many organizations have switched to team or groupbased incentive plans, where standards are set for the group, rather than the individual.

There are three ways of implementing team/group-based plans:   

Measure output of each member and reward group members based on output of a) highest producer, b) lowest producer, average production.

Measure output of whole group – everyone gets same reward based on group output Choose measurable but broader definition of group performance that the group can control e.g. total labour hours per final product – everyone gets same reward for group achievement

Rationale: many jobs are interrelated not independent, reinforces group planning, problem solving and collaboration, reduces jealously, makes members indebted to each other, and encourages sense of cooperation, especially in terms of on-the-job training for new group members.

Disadvantages: less effective at motivating individual employees because weaker link between individual effort and reward. Need high levels of communication about plan specifics and strong worker involvement in design and implementation. 

Incentives for Senior Managers and Executives

Senior managers and executives receive both short-term and long-term incentives based on divisional and corporate profitability. There are five elements in an executive/managerial compensation plan: salary, benefits, short-term and long-term incentives and perquisites. : 3. Combination Plan – provide advantages of both salary and commission plans, some guaranteed income but less incentive, can be complicated (e.g. base pus percentage of profits plus percentage of sales)

Teaching Tip: Have students contact companies as prospective employees to find out how salesperson compensation works in different industries (e.g. furniture, automotive, retail) – what is the base salary, what is the commission rate on sales, and how often is commission paid.

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DISCUSSION BOXES

Strategic HR Generational Preferences in Rewards, Recognition, and Incentives: Rewards (p. 196) The workforce today is comprised of member of three distinct age groups. In developing incentive programs employers should consider the demographics of their workforce; understanding these groups will help determine the most attractive incentive program approach. From oldest to youngest, four generations currently in the workforce who have different incentive preferences are Boomers, Generation X and Generation Y (Millenials).

ETHICAL DILEMMAS What should employers do when there is a shortage of a certain type of skill and they cannot attract any workers unless they pay a market rate above the maximum of their salary range for that job? How should other jobs (without a skill shortage) in the same company in the same salary range be paid? (p. 190) The preferred strategy when dealing with skills shortages is to offer higher pay to attract and retain employees in the skills-shortage occupations. In order to maintain internal equity, other jobs in the same salary range should be paid within-range rates. As soon as the skills shortage is over, within-range rates are once again paid to those occupations. To accomplish this without resorting to demotivating pay cuts, “red circling” is generally used, whereby the pay rates of such overpaid employees are typically frozen until general salary increases bring the pay range up to encompass their salaries.

Is it ethical to provide potentially large bonuses to managers and executives on a purely discretionary basis, not necessarily related to performance? (p. 199) Providing bonuses, regardless of size on a purely discretionary basis has several problems, most of which have to do with perceptions of fairness. First, discretionary bonuses may be awarded based on favouritism, which demotivates other employees. Second, discretionary bonuses for managers and executives are likely to be viewed negatively by employees if their own bonuses are based on performance. Most would argue that providing potentially large bonuses is problematic, because subjective standards can be inappropriately high or unacceptably low. It is far more appropriate to establish a performance-based bonuses for every position, tailoring them as needed to the level and nature of the job. The higher the position, the more is awarded based on organizational and unit performance, the lower the position, the more is awarded based on individual and group performance; a combined approach is often the most effective.

Is it fair to compensate sales employees on a 100-percent commission basis with no financial security? (p. 203) In some jurisdictions (such as British Columbia), it is illegal to compensate outside sales employees on a 100-percent commission basis without providing a guaranteed minimum wage. Even in jurisdictions in which this is not the case, many would argue that it is neither ethical nor desirable to have a compensation system with no guaranteed minimum amount covering basic living expenses. .

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Research has shown that turnover is higher with 100% commission plans and a salesperson’s income can vary greatly from period to period and is often dependent on factors outside of their control e.g. product competition, pricing decisions, and territory potential. These are some indicators that the system is unfair or perceived as unfair.

On the other hand, if an incoming employee prefers a 100% commission scheme, and understands exactly how the plan will work then there is nothing unfair about it at all.

Is it right that CEOs earn enormous amount of money when most employees are getting small increases each year (sometimes even less than inflation)? (p. 205) This question should provoke hot debate. Those in favour of egalitarianism will argue that large pay differentials are demotivating and are totally inappropriate in firms that stress teamwork and employee empowerment. Others will argue that CEOs deserve to earn a great deal because they have a much larger impact on company performance, survival, and profitability than do other employees. If differentials are not large enough, there will be no motivation to obtain the KSAs required to assume such jobs. In addition, to attract and retain high-calibre employees, the pay must be attractive enough to compensate for the high risk and high stress involved KEY TERMS benchmark job A job that is critical to the firm’s operations or that is commonly found in other organizations. (p. 183) broadbanding Reducing the number of salary grades and ranges into just a few wide levels or “bands,” each of which then contains a relatively wide range of jobs and salary levels. (p. 192) capital a c c u m u l a t i o n p r o g r a m s L o n g -term i n c e n t i v e s m o s t o f t e n r e s e r v e d f o r s e n i o r executives. (p. 200) classes Groups of jobs based on a set of rules for each class, such as amount of independent judgment, skill, physical effort, and so forth. Classes often contain similar jobs. (p. 185) classification/grading method A method for categorizing jobs into groups. (p. 185) compensable factor A fundamental, compensable element of a job, such as skill, effort, responsibility, and working conditions. (p. 184) differential piece-rate plan A plan by which a worker is paid a basic hourly rate plus an extra percentage of his or her base rate for production exceeding the standard per hour or per day. It is similar to piecework payment but is based on a percentage premium. (p. 203) employee share purchase/stock ownership plan (ESOP) A trust is established to hold shares of company stock purchased for or issued to employees. The trust distributes the stock to employees on retirement, separation from service, or as otherwise prescribed by the plan. (p. 197) employee value proposition The total value an employee receives from the employer, including compensation, benefits, career management, workplace/lifestyle, and employee pride. (p. 178) external equity When an employee perceives his or her pay as fair given the pay rates in other organizations. (p. 182) .

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fixed pay Compensation that is independent of the performance level of the individual, group, or organization. (p. 179) gainsharing plan An incentive plan that engages employees in a common effort to achieve productivity objectives and share the gains. (p.197) grade/group description A written description of the level of compensable factors required by jobs in each grade. Used to combine similar jobs into grades or classes. (p. 204) grades Groups of jobs based on a set of rules for each grade, where jobs are similar in difficulty but otherwise different. Grades often contain dissimilar jobs. (p. 185) green circle pay rate A rate of pay that is below the pay range minimum. (p. 192) guaranteed piecework plan The minimum hourly wage plus an incentive for each piece produced above a set number of pieces per hour. (p. 203) internal equity Employees perceives his or her pay as fair given the pay rates of others in the organization. (p. 182) job evaluation A systematic comparison to determine the relative worth of jobs within a firm. (p. 183) job evaluation committee A diverse group (including employees, HR staff, managers, and union representatives) established to ensure the fair and comprehensive representation of the nature and requirements of the jobs in question. (p. 184) merit pay (merit raise) Any salary increase awarded to an employee based on his or her individual performance. (p.179) pay equity Providing equal pay to male-dominated job classes and female-dominated job classes of equal value to the employer. (p. 183) pay grade Comprises jobs of approximately equal value. (p. 1888) pay ranges A series of steps or levels within a pay grade, usually based on years of service. (p. 190) piecework A system of pay based on the number of items processed by each individual worker in a unit of time, such as items per hour or items per day. (p. 203) point method A job evaluation method in which a number of compensable factors are identified, the degree to which each of the factors is present in the job is determined, and an overall point value is calculated. (p. 185) profit-sharing plan A plan whereby most or all employees share in the company's profits. (p. 196) red circle pay rate A rate of pay that is above the pay range maximum. (page 192) stock option The right to purchase a stated number of shares of a company stock at today's price at some time in the future. (p. 200) straight piecework plan A set payment for each piece produced or processed in a factory or shop. (p. .

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203) team or group incentive plan A plan in which a production standard is set for a specific work group, and its members are paid incentives if the group exceeds the production standard. (p. 204) total employment rewards An integrated package of all rewards (monetary and non-monetary, extrinsic and intrinsic) gain by employees arising from their employment. (p. 178) variable pay Any plan that ties pay to productivity or profitability. (p. 179) wage curve A graphic description of the relationship between the value of the job and the average wage paid for this job. (p. 190) wage/salary survey A survey aimed at determining prevailing wage rates. A good salary survey provides specific wage rates for comparable jobs. Formal written questionnaire surveys are the most comprehensive. (p. 188)

REVIEW AND DISCUSSION QUESTIONS (p. 207) 1. What are the five components of Total Rewards? (p. 178-179, Fig 8.1) Total employment rewards are defined as an integrated package of all rewards (monetary and nonmonetary, extrinsic and intrinsic) gained by employees arising from their employment. The five components are: 1. Compensation – direct financial payment includes wages, salaries, incentives, commissions, and bonuses.

2. Benefits – indirect payments in the form of financial benefits such as employer-paid insurance and vacations.

3. Work/life programs – flexible scheduling, telecommuting, child-care programs, and so on.

4. Performance and recognitions – this category includes pay for performance and recognition programs.

5. Development and career opportunities – focuses on planning for the advancement and/or change in responsibilities to best suit individual skills, talents, and desires. Tuition assistance, professional development, sabbaticals, coaching and mentoring opportunities, succession planning, and apprenticeships are all examples of career-enhancing programs.

2. Describe what is meant by the term “benchmark job.” (p. 183-184) A benchmark job is a job commonly found in other organizations and/or a job that is critical to the firm's operations. Benchmark jobs are used to anchor the employer's pay scale. These jobs act as a reference point around which other jobs are arranged in order of relative worth.

3. Identify and describe one of the basic considerations in determining pay rates in an .

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organization (p. 182).

The basic considerations include union influences (wages and benefits) through collective bargaining; compensation policies (determined whether a company wants to be a leader or a follower); perceptions of internal and external equity (fairness) and legal considerations (federal and provincial legislation) 4. What are the pros and cons of the following D i s c u s s o n e a d v a n t a g e a n d o n e d i s a d v a n t a g e o f t h e f o l l o w i n g job evaluation methods – ranking, classification, , and point method? (p. 184-188).

Ranking Pros: simplest job evaluation method; easy to explain; takes less time to accomplish than other methods.

Cons: there is a tendency to rely too heavily on "guesstimates"; provides no yardstick for measuring the value of one job relative to another; the "whole job" approach to ranking, which is often used, cannot be used by employers covered by pay equity legislation. Instead, separate rankings must be completed for each of four compensable factors (skill, effort, responsibility, and working conditions), and judgment used to combine the results. Furthermore, jobs must be ranked across clusters or departments, not separately.

Classification (or Grading) Evaluation Method Pros: most employers usually end up classifying jobs anyway, regardless of the job evaluation method that they use. They do this to avoid having to work with and price an unmanageable number of jobs; with the job classification method, all jobs are already grouped into several classes.

Cons: It is difficult to write the class or grade descriptions, and considerable judgment is required in applying them.

Point Method Pros: Extends the factor comparison method by quantifying the differences between jobs. This method involves a quantitative technique that is easily explained to and used by employees, and provides a yardstick for measuring relative value differences between jobs.

Cons: It can be difficult and time-consuming to use this method and to effectively train the job evaluation user group. Many organizations opt for a plan developed and marketed by a consulting firm.

In fact, the availability of a number of ready-made plans probably accounts in part for their wide use.

5. Explain the term “competencies,” and explain the differences among core, functional, and behavioural competencies. (p. 192-193) Competencies are defined as individual knowledge, skills, and behaviours that are critical to successful individual or corporate performance.

Core competencies describe knowledge and behaviours that employees throughout the organization must exhibit for the organization to succeed, such as “customer service orientation” for all hotel .

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employees.

Functional competencies are associated with a particular organizational function, such as “negotiation skills” for salespeople, or “safety orientation” for pilots.

Behavioural competencies are expected behaviours such as “always walking a customer to the product they are looking for rather than pointing.”

7. Explain the intention of pay equity of legislation. (p. 183)

The purpose of pay equity legislation is to redress systemic gender discrimination in compensation for work performed by employees in female-dominated job classes. Pay equity requires that equal wages be paid for jobs of equal value or “worth” to the employer, as determined by genderneutral (that is, free of any bias based on gender) job evaluation techniques.

To date, pay equity has been found to reduce the wage gap in Ontario to some extent.

However, although legislation has narrowed the wage gap, it has not eliminated it, and there is still no explanation other than systemic discrimination for much of the 30 percent gap that still persists. In 2001, the federal government set up a task force to study its legislation and to propose changes to improve the effectiveness of the legislation in ensuring pay equity. The task force concluded in 2004 that the complaint-based model currently in place had not proved to be an effective means of achieving the goal of equal pay for work of equal value, and recommended that new pay equity legislation be enacted to require employers to develop a pay equity plan. No legislative changes have resulted to date.

8. Describe the three basic issues to be considered when awarding short-term management bonuses (p. 198-199) The three basic issues to be considered when awarding short-term management bonuses are (1) eligibility, (2) fund size, and (3) how to determine individual awards.

Eligibility can be decided by position, by salary level, or salary grade. Fund size is often either a straight percentage of the company’s total net income or net income exceeding a certain predetermined level, but there are no hard-and-fast rules. Individual awards can be discretionary, but typically a target bonus is set for each eligible position and adjustments are then made for greater or less than targeted performance. A decision must also be made as to whether the bonus will be based on individual performance, team performance, or some combination of these.

9. Identify two supporting reasons for offering long-term incentives to an organization’s executive staff. (p.

200-201).

Long-term incentives, also known as Retention Incentives, are intended to motivate and reward top management for their contributionto the firm’s long-term growth and prosperity. Their intention is for managers to take the long-term perspective in decision-making. They are also intended to encourage executives to stay long-term with the organization. Common long-term bonsues include stock options, performance and deferred share plan units.

A stock option is the right to purchase a specific number of shares of company stock at a specific price during a period of time. The option holder hopes to profit by exercising his or her option to buy the shares in the future but at today’s price. The assumption is that the price of the stock will go up. In .

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Canada, only 75 percent of the gain on exercising the options is taxable. Thus, stock option plans are often seen as a cash windfall with no downside risk but unlimited upside potential.

Stock options have been criticized in recent years as the motive for short-term managerial focus and questionable accounting practices. The issuance of an excessive amount of options can dilute share value for shareholders and create a distorted impression of the true value of a company.

10. Discuss the relative merits of compensating sales staff through a (i) salary only, (ii) commission only, and (iii) combined salary and commission plans. (p. 202-203) A salary plan works well when the main sales objective is prospecting (finding new clients) or when the salesperson is mostly involved in account servicing, such as developing and executing product training programs for a distributor’s sales force or participating in national and local trade shows.

Jobs like these are often found in industries that sell technical products.

A commission plan is appropriate when the firm wants to pay for results, and only for results. This generally occurs in situations in which sales costs are proportional to sales, not fixed, and there is a desire to focus on making a sale, rather than on prospecting and cultivating long-term customers. The straight commission plan provides salespeople with the greatest possible incentive, and there is a tendency to attract high-performing salespeople.

Combination plans are appropriate when the firm wants to direct its salespeople's activities by detailing what services the salary component is being paid for, and use a commission component to provide a built-in incentive for superior performance.

11. In your view, what is a key reason employee incentive plans do not succeed?

Incentive plans may fail if: 1. Efforts and rewards are not directly related.

2. Employees lack the necessary tools, equipment, and training.

3. The plan is too difficult, such that employees can't understand it and/or calculate their rewards.

4. Instructions are ambiguous; communication is poor; the standards are viewed as unfair, are too high or low, or are not specific enough.

5. The standards have not been guaranteed, leading to employee distrust; no guaranteed hourly base rate has been established; workers' support has not been attained.

6. There is poor management.

7. Too much emphasis has been placed on financial rewards and not enough on other motivators, such as opportunities for achievement and psychological success; or emphasis has been placed on the wrong measures.

CRITICAL THINKING QUESTIONS (p. 207-208) 1. Media reports identify significant compensation levels for Canadian corporate CEOs, at the same time as low corporate performance ratings or employee layoffs. Should anything be done about this? If “yes,” what are your suggestions?

The discussion for for this question can include values of organizations and individuals and even the values of Canada. It can include the problems with pay for performance (p. 184-185) and the need to review and improve how these are implemented. It may include examining short versue long-term orientations by the firms and by the management team. .

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2. What are some of the potential reasons that gender-based pay discrimination is so hard to eradicate?

The main reason that gender-based pay discrimination is hard to eradicate is the difficulty in completely identifying all of the factors that lead to gender-based pay discrimination. Women have different patterns of employment than men. They tend to work part-time more often, even in professional occupations (physicians, lawyers, accountants), have longer breaks in employment, and are often concentrated in female-dominated occupations (e.g. daycare workers). When examining the reasons why women who have the same occupation and same pattern of employment as men there are two factors 1) discrimination by employers in setting salaries for female-dominated jobs and initial salary offers and raises for women (based on stereotypical beliefs), and 2) women not asking for as much as men. Both of these factors work against women over time as merit raises are compounding so after 5 – 10 years the difference can be substantial.

3. A major consulting firm recently launched a new "project managers” incentive plan. Basically, senior managers in the company were told to award $ 50000 raises (not bonuses) to about 40 percent of the project managers in their team based on how good of a job they did in managing people on their projects, meeting deadlines, and the number of projects each project manager was responsible for that year. There were no additional criteria provided, given the wide variance in projects and teams that the consulting firm secures in a given year. What are the potential advantages and pitfalls of such an incentive program? What areas of support or concern do you think project managers might have with the incentives? What areas of support or concern do you think senior managers might have with the incentives?

The advantages of such a plan are that it will focus the project managers’ attention on strategic activities (leading a team, meeting deadlines) and it will explicitly recognize differences in scope of responsibility (# of projects). Therefore it should be perceived as fair. The disadvantages of such as plan are that omitted criteria, such as client satisfaction, are also strategically important and may receive less attention. In addition, although meeting deadlines is objective, managing people on their projects is a lot more subjective unless specific validated measures are developed and implemented across the board. Some project managers may also lean towards making their team happy or rushing projects through and let up on other standards (e.g. quality of work, learning requirements, and so on).

Project managers should support the plan because it focuses on key elements of their job and has a compounding effect on their salary, but may be concerned about lack of specifics in terms of measuring some of the elements. They may also be concerned about the weights given to # of projects as this is outside of their control One project manager might have just a single very complex project whereas someone else has many minor projects.

Senior managers will support performance-based incentives that are aligned with strategic objectives, but would probably prefer to have a bonus rather than a merit pay (raise), because it does not inflate base salary. Project managers have to earn a bonus each and every year, but once they have a fairly high salary a raise is much less motivating. Senior managers may also be concerned that the incentives are just based on team results and are not connected to organizational results. They would probably prefer a scheme where the majority of the incentive is on team results but the rest is based on organizational results. In addition, they have to have a valid way to identify the top 40% of their project managers so that the plan is acceptable to those who do not receive a bonus. The senior managers may prefer to have a scheme where top managers get the most, but there is a sliding scale for those who achieved most of their objectives, and then nothing for those who were poor performers. Under the planned scheme, 60% of their project managers will get nothing. .

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4. In making strategic pay policy decisions in a company, should the HR compensation specialist favour internal or external equity in wage and salary rates among employees?

A crucial factor in determining pay rates is the need for equity, specifically external equity and internal equity. Research has indicated that employee perceptions of fairness are one of the two key conditions for effective reward programs. Externally, pay must compare favourably with rates in other organizations or an employer will find it hard to attract and retain qualified employees. Pay rates must also be equitable internally: each employee should view his or her pay as equitable, given other pay rates in the organization.

5. Do you think it is a good idea to award employees merit raises? Why or why not? If not, what approach would you take to incentive compensation?

Merit pay or a merit raise is any salary increase that is awarded to an employee based on his or her individual performance. It is different from a bonus in that it represents a continuing increment, whereas the bonus represents a one-time payment. If not controlled, the compounding effect of merit pay can rapidly inflate the organization’s compensation budget within a few years, which may not be affordable.

Merit pay is appropriate in situations where; employees' individual efforts can be fairly and accurately evaluated or measured; there is a valid performance appraisal system in place; and supervisors have been properly training in performance appraisal techniques. In such cases, a merit pay plan can and does improve performance. However, merit pay can backfire if: (1) The validity of the performance appraisal system is in question. Since appraisals are viewed as unfair, so too will the merit pay that is based on them.

(2) Supervisors often give most employees about the same raise, either because of a reluctance to alienate some employees, or a desire to give everyone a raise that will at least help them stay even with the cost of living.

(3) Every employee thinks he or she is an above-average performer; being paid a below- average merit increase can thus be demoralizing.

Another merit pay option is to award lump-sum merit pay based on both individual and organizational performance. The company's performance, measured by rate of return or sales divided by payroll costs, for example, is weighted equally with the employee's performance, as measured by his or her performance appraisal. Thus, an outstanding performer would still receive a lump-sum award even if the organization's performance were marginal. However, employees with unacceptable performance would receive no lump-sum awards even in a year in which the organization's performance was outstanding.

The advantage of this approach is that it forces employees to focus on organizational goals like profitability and improved productivity. The drawback is that it can reduce the motivational value of the reward by reducing the impact of the employee's own performance on the reward.

6. Recognition can take many forms. Prepare a list of some forms of recognition that would be particularly motivational for Millenial(Ge Y) employees, and explain why you have chosen them.

Rewards that work for M il le ni a l ( Gen Y) include relationship enhancers such as electronic communications equipment, home entertainment items, and dining experiences; personalized rewards where they can choose colours and accessories; and charitable rewards such as time off to .

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volunteer for non-profit organizations and charitable donations made in their names.

The reasons for choosing this type of recognition is because Generation Y employees are masters of technology and are more comfortable with authority and independence.

EXPERIENTIAL EXERCISES (page 208) 1. Visit the Starbucks Canada website, and find examples of compensation incentives offered to its employees. Using information in this chapter, prepare a rationale to support any of these incentive plans.

What would you add as an additional pay incentive option for the company? Why? Specifically, students should search for “Your Special Blend” Starbucks Canada. There they will see Partner Perks, Recognition programmes, stock plans and many, many benefits. It will be interesting to see what they would add to the list.

2. You have been asked by the owner of your medium-sized import and export company (200+ people) to develop a way to standardize pay ranges for different jobs in the company. He says he is tired of employees complaining about the pay they get compared to others and is concerned that if he does nothing someone will complain about inequitable pay practices. Outline the steps you will follow to do this. Make sure to give a rationale for the type of job evaluation system you propose as well as for the method you suggest to obtain comparable salary data. The jobs he is most concerned about are • sales representative • shipping and receiving manager • multilingual contract negotiator • accounts receivable clerk • shipping clerk.

The purpose of this exercise is to give students the opportunity to think about and experience developing a standardized pay system for a smaller organization as well as consider which type of job evaluation might be best suited to this situation. You could start with a simplistic ranking and “gut feel” approach in class then cover the point method and have them use the point method for these jobs as homework to be taken up in the next class or as a graded group exercise. Alternate exercises: this exercise can be done individually, in pairs or small groups. Debrief and ensure that students have thought through all of the ramification of the choices they have made.

3. You are the HR manager in a large construction firm headquartered in Edmonton. Most of your administrative staff members are also in Edmonton. You have regional and local site offices across the country. Draft a memo to employees about your company’s new pay for knowledge and skills policy. Make sure to document at least one fully complete section on how this policy will be administered. Your professor may give you some ideas on what might be considered or you may create your own circumstances under which pay for knowledge and skills will be applied.

Their pay for knowledge/skills policy memo should explain why the organization is offering pay for knowledge/skills, expectations around using knowledge/skills (not just acquiring credentials/certificates), relationship to and fit with other compensation policies (e.g. pay for performance), who is eligible, what types of knowledge/skill are eligible, how the program will be administered, and how they can get more information (intranet, brochure, FAQ on HR webpage).

4. Working individually or in groups, develop an incentive plan for each of the following positions: web designer, hotel manager, and used-car salesperson. What factors had to be taken into .

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consideration?

Plans should identify specific behaviours and results that are strategically important for each position. Incentives for the web designer should focus on responsiveness, timeliness, and a relevant measure of the quality of the work (functionality and appearance). Incentives for the hotel manager should relate to sales, cost-control and customer satisfaction as well as employee capabilities. Salesbased incentives are the obvious choice for the used car salesperson, but some measure of customer satisfaction, repeat business, customer referral would ensure that a high pressure approach is not being used or that inappropriate claims about the vehicle are not being made.

5. Using the Internet, locate a news media article on a national or provincial pay equity issue in Canada.

Based on the situation described in the article, explain how a “green circle pay rate” solution would help to resolve the pay equity issue seen in the media account.

Underpaid employees should have their wages raised to the minimum of the rate range for their pay grade, assuming that the organization wants to retain the employees and has the funds. This can be done either immediately or in several steps. Pay rates of underpaid are sometimes referred to as green circle pay rates.

Such rates are typically associated with a need for pay equity adjustments. Pay rates of overpaid employees are often called red circle pay rates, and there.

.

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CHAPTER 9 EMPLOYEE BENEFITS AND SERVICES

LEARNING OUTCOMES EXPLAIN the strategic role of employee benefits.

DESCRIBE seven government-mandated benefits.

EXPLAIN why the cost of health insurance benefits is increasing and how employers can reduce these costs.

DESCRIBE the two categories of pension plans and the shift that is occurring in their relative popularity.

DISCUSS three types of personal employee services and six types of job-related services offered to employees.

EXPLAIN how to set up a flexible benefits program.

CHAPTER SUMMARY The strategic importance of benefits (indirect financial payments) is increasing in the post-jobsecurity era. Strategically aligned benefits can attract and retain the right people to achieve business objectives. Six major government-mandated benefits are: EI, C/QPP, workers’ compensation, vacations/holidays, leaves of absence, and termination pay. Health insurance costs are rising due to new drugs, increased drug use, and reduced provincial coverage. Organizations are responding by increasing employee portion, restricting covered drugs, implementing health/wellness plan, and offering health spending accounts. Two categories of pension plans are defined benefit and defined contribution. Three types of personal employee services are credit unions, counselling services, and employee assistance plans. Six types of job-related services are subsidized child-care, eldercare, subsidized transportation, food services, educational subsidies, and family friendly benefits. The flexible benefits approach allows the employee to put together his or her own benefit plan, subject to total cost limits and the inclusion of certain compulsory items.

LECTURE OUTLINE

I. THE STRATEGIC ROLE OF EMPLOYEE BENEFITS Employee benefits and services can be defined as all the indirect financial payments that an employee receives during his or her employment. In an era of modest salary increases, benefits have become even more important, but also more costly for organizations (37% of payroll, compared to 15% in 1953). Administering government-mandated and employer-sponsored benefits is a highly specialized and also increasingly expensive task. Research indicates that benefits matter to employees and that, if they are aligned with business strategy, can help to attract and retain the right people to achieve business objectives, although most employees do not realize the value or cost of their benefits.

Teaching Tip: As class preparation have students get a life insurance quote for a $ 100,000 policy and for a year of basic health insurance (not including dental). .

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II. GOVERNMENT-MANDATED BENEFITS Canada has one of the world’s finest collections of social programs to protect its citizens when they cannot earn income. The following plans are funded through employer and employee contributions, along with general tax revenues. (Table 9.2 p. 212) 1. Employment Insurance (EI) Employment insurance is a federal program intended to provide temporary financial assistance to eligible person (contributor with minimum hours of work in specified period of time, willing and able to work) who experience interruption to their work through no fault of their own EI is funded by contributions from both eligible employees (through payroll deduction) and employers (1.4 times employee contribution).

Benefit received is generally 55% of average earnings during last 14 – 45 weeks of qualifying period or maximum weekly rate; payable for up to 45 weeks; claimants must demonstrate active job search and are permitted to work part-time; SUB pays up to 90% of wage (approved by Canada Employment Insurance Commission).

Teaching Tip: Discuss the rationale, and the pros and cons of allowing individuals on EI to work part-time in addition to collecting benefits.

2. Pay on Termination of Employment Employment/labour standards legislation requires that employees whose employment is being terminated by the employer be provided with termination pay (severance pay and/or pay in lieu of reasonable notice) when they leave. a. Reasonable advance notice periods – written notice unless on contract or fired for just cause, varies across jurisdictions but often one week per year of employment to specified maximum; notice can be replaced by pay in lieu of reasonable notice Severance pay – While it is common in everyday conversation to hear the terms “termination pay” and “severance pay” used interchangeably, the latter term has specific application under law. Severance pay is a one-time, lump sum statutory payment at time of termination, based on the employee’s length of service with the employer; it is paid in addition to pay in lieu of reasonable notice. Only employees in Ontario and the federal jurisdiction may be eligible for severance pay, and only in certain termination situations (no other jurisdictions mandate severance pay). Ontario (1 week’s pay for every year of employment, to max. 26 weeks), subject to certain employment and employer conditions; Federal jurisdiction (greater of two days’ worth of wages for every year of employment or a total of five days wages. b. Pay for mass layoffs – 5 provinces require additional pay for layoffs of more than 50 employees, 2 provinces set threshold at 10 or more employees longer time to reemployment; rationale is longer time to re-employment.

Teaching Tip: As class preparation or as a follow-up assignment, have students research Canadian news stories to find out how much severance pay was given to workers at companies who permanently laid off their workforce. .

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3. Leaves of Absence All provinces and territories and the federal jurisdiction require unpaid leaves of absence to be provided to employees in certain circumstances (e.g. maternity/parental leave, adoption leave, bereavement leave, compassionate care leave). Amounts vary by jurisdiction, parental leaves can sometimes be split between partners but upon return from maternity, parental or adoption leave the employee is entitled to old or similar job. Clear procedures and forms are essential, and medical certificates should be obtained to support medical leaves. Costs of offering leaves of absence include temporary workers, training costs for replacement workers and lost productivity.

Teaching Tip: Have students look up the federal and provincial family medical/compassionate care leave of absence policies and compare them to each other.

Teaching Tip: Have students look up the Employment Standards Act of Ontario to see its various leaves offered (e.g., Critically Ill Child Care and Crime-Related Death/Disappearance) 4. Canada/Quebec Pension Plan (C/QPP) Introduced in 1966, C/QPP provides working Canadians with a basic level of financial security on retirement or disability via one of three types of benefits: retirement pensions (25% avg. earnings), disability benefits (75% of pension benefit earned), or survivor benefits (lump sum and monthly pensions). Self-employed are included, but casual and migrant workers are excluded.

C/QPP benefits are portable and adjusted to inflation in line with CPI. Contributions made by employees are matched by employers, based on earnings up to “year’s maximum pensionable earnings”.

5. Workers’ Compensation Workers’ compensation provides sure and prompt income and medical benefits to victims of workrelated accidents or illnesses or their dependents, regardless of fault. Specifics vary by province/territory but in all cases employee and employer cannot sue each other. Employers pay full cost of premiums, provincial/territorial boards determine and collect payments, determine rights to compensation and pay benefits to injured workers or to the families of workers killed on the job. Benefits include payment of medical and rehabilitation expenses, as well as income benefits while off work. All benefits are non-taxable. a. Controlling workers’ compensation costs – renewed focus on accident prevention, safety and health programs, rehabilitation programs (physical therapy and career counselling), and increased opportunities for modified work 6. Vacations and Holidays Labour/employment standards legislation sets out a minimum amount of paid vacation that must be provided to employees, usually two weeks per year; however, the requirements vary by jurisdiction, and the actual number varies from employer to employer, based on what they want to offer over the minimum.

The number of paid (statutory) holidays also varies by jurisdiction, from 5 days to 9 days.

Teaching Tip: Given the diverse religious composition of Canada’s workforce, some have suggested that religion-based holidays (e.g. Good Friday, Christmas Day) should become optional instead of mandatory holidays, allowing more flexibility to take holidays that fit your own religious tradition (e.g. Yom Kippur, Hanukkah, Eid). Hold a debate (in-class, short written paper, or .

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Twitter).

7. Paid Breaks There is also mandated, paid and unpaid time off requirements within a work day at provincial/territorial and federal levels. Contrary to popular belief, coffee or other rest breaks in addition to an eating period are not government mandated. Payment often depends on whether the employee is free to leave the workplace.

Teaching Tip: Many young workers are unaware or feel uncomfortable asking for their statutory required break, and often end up working long hours without a break. Survey your students to find out if their employers provide mandatory breaks.

III. VOLUNTARY EMPLOYER-SPONSORED BENEFITS Although they are not required to do so, employers often provide many other employee benefits. Many of these benefits offer great value because they can be purchased by the employer at a much lower cost than if individual employees had to purchase it on their own. (Figure 9.1 p. 239) 1. Life Insurance Virtually all employers provide and 100% fund group life insurance plans that provide life insurance equal to about two years of salary for their employees, regardless of health or physical condition. Employees can buy additional life insurance; other types of insurance coverage include accidental death and dismemberment or critical illness insurance.

2. Supplementary Healthcare/Medical Insurance Most employers provide their employees with supplementary healthcare/medical insurance (over and above provincial healthcare plans) for non-work-related injuries accidents and illnesses.

Employees must pay a deductible (small amount) before benefits begin, but in many cases the plan premiums are paid entirely by the employer. a. Reducing health benefit costs – dramatically increasing costs (See Fig. 9.2, p. 240) due to expensive drugs, rising drug use by aging population; solutions include increasing amount by paid by employees (increase premiums, reduce coinsurance levels, change coverage), publish restricted list of drugs (generics vs. name brand, proven vs. new), health promotion (newsletters, wellness programs, counselling), and flexible healthcare spending accounts (HCSA) b. Retiree health benefits – often exceed costs for active employees, early retirees use extensively before govt. healthcare starts at 65, not required to be pre-funded, at risk if business fails; reduce cost by increasing deductibles, tightening eligibility requirements, and reducing maximum payouts Teaching Tip: The ethical dilemma on p. 221 deals with retiree health benefits.

3. Short-Term Disability Plans and Sick Leave Plans Short-term disability plans provide for continuation of all or part of an employees’ earning when the employee is absent from work because of non-work-related illness or injury. Medical certification usually required is absence greater than 2 – 3 days, and coverage reduces over .

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time and cease when employee returns to work or qualifies for long-term disability.

Sick-leave plans grant full pay for a specified number of permissible sick days – usually up to about 12 per year; most jurisdictions require a couple of unpaid days of sick leave. Many employees use sick leave as vacation extension or come to work sick if there is a buyback or payout plan for unused sick days.

4. Long-Term Disability Long-term disability insurance is aimed at providing income protection or compensation for loss of income (50 – 75% of base pay), because of long-term illness or injury that is not work-related; usually starts when sick leave or short-term disability is used up. Number of LTD is rising sharply due to chronic illnesses more common in aging workforce. Disability management programs are priority to get workers safely back to work; key elements include prevention, early assessment and intervention, monitoring and managing absences, early and safe return-tow work policies, and on-going contact with the employee. Three most common approaches to returning disabled workers to work are: reduced work hours, reduced work duties, and work-station modification based on an evaluation of the worker’s physical capabilities. a. Mental health benefits – leading cause of short-term and long-term disability claims in Canada (e.g. depression), annual cost of $ 51 billion Canadian (underestimated due to underreporting), challenges in addressing mental health issues (Fig. 9.3, p. 224) Teaching Tip: Have your students check out the World Health Organization’s reports on Mental Health. Also, have them look at the resources at the organization called Mental Health Works.

5. Sabbaticals Uncommon but provide employees with time off for rejuvenation or pursuit of a personal goal; usually unpaid, but can be fully or partially paid by employer; used to retain high valued employees especially those at risk of burnout; employees maintain job security and seniority.

6. Retirement Benefits Pre-funded employer-sponsored pension plans are intended to supplement and employee’s government-sponsored retirement benefits (C/QPP). Pension fund assets have grown considerably but laws restrict investment in foreign securities. a. Two categories of pension plans – with a defined benefit pension plan benefits are predetermined, whereas with defined-contribution plans only the contributions are specified, benefits are only known when an annuity is purchased upon retirement.

Two other types of defined contribution plans are group registered retirement savings plans (group RRSP) which are funded by the employee and deferred-profit sharing plan (DPSP) which is funded by the employer; these two plans are popular in Canada because no tax is paid until employee’s death or termination of employment (see Table 9.3, p. 225).

Pension planning is complicated for both employer and employee; employers must educate and inform (but not advise) plan members about pension investments or face lawsuits. Economic recessions shrink values of pension funds causing defined contribution members to defer retirement and defined benefit plans to become “endangered species” due to need for major increase to company contributions to adequately fund pension obligations. .

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When designing a pension plan there are several legal and policy issues:  Membership requirements – min. # of years of service  Benefit formula (defined benefit plans) – final or average earnings  Retirement age – often “30 and out” but mandatory retirement prohibited under human rights legislation  Funding – contributory or non-contributory (employer only)  Vesting – employees right to employer contributions and earnings on those contributions  Portability – transfer to new employer’s pension plan or roll over into a locked-in RRSP

Teaching Tip: Should an employer with a pension plan that covers employees in several provinces give each group the minimum vesting and portability benefits for their province or take the most generous of these and provide it to all employees? (p. 227) Since internal equity is a key compensation issue, most will argue that the company pension plan should be standardized across jurisdictions. Doing so will also make it easier for the firm to encourage transfers and/or promotions from the firm’s facilities in one jurisdiction to those in another jurisdiction.

b. Phased retirement Using reduced workdays or shortened workweeks can ease labour shortage while helping retiring employees maintain income levels with a combination of employment and pension income. Varies by jurisdiction. (Fig. 9.4 p. 248)

Teaching Tip; Discuss the pension problem facing many countries, which had its roots in unsupported assumptions about population growth in the 1950s – 1970’s. Why didn’t population rates remain stable? What are the consequences of raising the eligible age to receive retirement benefits? c. Supplemental employee retirement plans (SERPs) The Income Tax Act has not changed the maximum pension benefit permissible under the act (for tax deductibility of plan contributions) since 1976, resulting in pension benefits being less than benefit formula would otherwise provide; tends to affect executives and other high earners. Supplemental employee retirement plans (SERPs) provide the difference, ¾ of employers provide them but not all are pre-funded.

IV. EMPLOYEE SERVICES Although vacations, paid holidays, insurance and retirement benefits account for the largest portion of an organization’s benefits costs, many employers also provide a range of services to help employees with personal and work-related issues.

1. Personal Services Personal services are intended to help employees with work-life balance, with personal issues that might affect work, and provide a sense of overall well-being. .

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a. Credit unions – membership-based financial institutions, offer accounts and loans at favourable rates b. Counselling services – financial, family, career, job placement ,pre-retirement, legal c. Employee assistance plans (EAPs) – confidential counselling or treatment for mental health, marital/family, work-life balance, stress, legal problems, substance abuse, or other addictions; significant increase after recession of 2008; help reduce absenteeism and disability costs; assess quality of external EAP providers d. Other personal services – social and recreational opportunities, company goods and services 2. Job-Related Services Job-related services are provided to help employees perform their jobs more effectively and efficiently. Help to reduce absenteeism, increase productivity, job satisfaction, and organizational commitment. a. Subsidized childcare – referrals to community providers, on-site childcare, childcare for mildly ill children, and emergency backup childcare b. Elder Care – flexible hours, support groups, counselling, free pagers, adult daycare, referral services to locate community services, education and compassionate care leave c. Subsidized employee transportation – public transit, carpooling/shuttles/buses d. Food services – cafeterias/dining facilities, coffee wagons, vending machines e. Educational subsidies – tuition refunds, expense reimbursement, in-house educational programs; some cover all courses, some just directly job-related courses 3. Executive Perquisites Executive perquisites (perks, for short) are usually given to only a few top executives; include cars and/or chauffeurs/drivers, use of company properties, corporate jet, management loans, salary guarantees “golden parachutes”, financial counselling, relocation benefits, security systems, executive dining rooms, legal services, tax assistance, liberal expense accounts, club memberships, season tickets, credit cards, physical fitness programs, concierge services, and subsidized education for their children.

Teaching Tip: Use the ethical dilemma on pg. 232, to capture students’ attitudes about executive perquisites. Have them take the perspective of a front-line employee, a rising manager, and a current senior manager (executive).

V. FLEXIBLE BENEFITS PROGRAMS Research conducted over 30 years ago found that an employee’s choice of benefits is influence by his/her age, marital status and sex. Flexible benefit programs recognize that what one employee finds as attractive may be unattractive to another. In 1980 there weren’t any flexible plans, but by 2005, 41% of Canadian employers offered them, and 85% have or plan to implement one soon.

There are advantages to both employers and employees. Communication and employee co-operation are critical issues; face-to-face communication supplemented by a company website is the recommended approach.

VI. BENEFITS ADMINISTRATION Benefits administration is a challenge even in small companies (e.g. keeping track of each .

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employee’s employment status and making changes). Software packages and outsourcing to a benefits administration provider can make the process more efficient, more consistent and generate enhanced service.

1. Keeping Employees Informed Correct information must be provided to all employees in a timely, clear manner, but especially to the large number of people approaching retirement. Pension legislation dictates information disclosure to plan members and their spouses. Real-time e-statements, electronic pension booklets and pension-modelling tools available through the company’s website can help employees understand their benefits and plan their lives more effectively. This information is not only beneficial for current employees but for attracting talent and reinforcing how the company values its staff so increases retention.

DISCUSSION BOXES

GLOBAL HRM: Defined Benefit Pension Problems and Solutions Around the World (p. 226) Many countries designed generous defined benefit social security programs between 1950 and 1970, based on assumptions of a stable population. However, declining populations have meant that younger employees are subsidizing older ones, which is not sustainable. Solutions have included increasing contribution rates, raising the normal retirement age to 67, and moving to defined contribution plans. Pension planning is complex for workers moving across multiple jurisdictions (e.g. European Union, Canadian provinces) due to a patchwork of legislation that needs to be simplified.

ETHICAL DILEMMAS Should it be the employer’s responsibility to cover health-care costs for early retirees until they become eligible for government health-care benefits at age 65? (p. 221) While it can be argued that there are no legal or ethical obligations to do so, failing to cover healthcare costs for early retirees until they become eligible for government health-care benefits at age 65 will decrease the attractiveness of early retirement windows. Since many firms have been using early retirement incentives as a means of downsizing and/or restructuring without having to lay off or terminate employees, and of creating more opportunities for their younger employees to enhance their ability to retain such workers, failing to do so is not in the employer’s best interests.

Should the use and applicability of executive perks be made available to employees who do not qualify for these benefits? (p. 232) Many will no doubt say that executive perquisites should say that perks should be available throughout the organization in order to enhance engagement within the organization by nonexecutive employees.

It is important to remember that perks generally are provided as an incentive to attract and retain talented people as well as to facilitate productivity in their roles.

Therefore, benefits and perks will often reflect to difficulty in attracting and retaining such talent.

However, many firms are no longer offering perks that highlight differences in position and status, .

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such as executive dining rooms, executive apartments, company planes, and full-time chauffeurs for high-ranking employees, since such perks can hinder teamwork and cooperation. This is especially true in organizations with a flat structure and/or team-based design.

KEY TERMS Canada/Quebec Pension Plans (C/QPP) Programs that provide three types of benefits: retirement income; survivor or death benefits payable to the employee's dependents regardless of age at time of death; and disability benefits payable to employees with disabilities and their dependents. Benefits are payable only to those individuals who make contributions to the plans or to their family members. (p.215) coinsurance The percentage of expenses (in excess of the deductible) that are paid for by the insurance plan. (p. 220) deductible The annual amount of health/dental expenses an employee must pay before insurance benefits will be paid. (p. 219) deferred profit-sharing plan (DPSP) A plan in which a certain amount of company profits is credited to each employee's account, payable at retirement, termination, or death. (p. 225) defined benefit pension plan A plan that contains a formula for determining retirement benefits. (p.

224) defined contribution pension plan A plan in which the employer's contribution to the employees' retirement fund is specified. (p. 229) disability management A proactive employer-centred process that coordinates the activities of the employer, the insurance company, and health-care providers in an effort to minimize the impact of injury, disability, or disease in a worker’s capacity to successfully perform his or her job. (p. 211) employee assistance plan (EAP) A company-sponsored program to help employees cope with personal problems that are interfering with or have the potential to interfere with their job performance, as well as issues affecting their well-being or the well-being of their families. (p.229 ) employee benefits Indirect financial payments given to employees. They may include supplementary health and life insurance, vacation, pension plans, education plans, and discounts on company products. (p. 211) employment insurance (EI) A federal program intended to provide temporary financial assistance to eligible persons who experience interruption to their work through no fault of their own. (p. 212) flexible benefits programs Individualized benefits plans to accommodate employee needs and preferences. (p. 232) group life insurance Life insurance provided at lower rates for all employees, including new employees, regardless of health or physical condition. (p. 218) pay in lieu of reasonable notice A lump-sum equal to an employees’ pay for the notice period provided .

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to employees who cease working immediately.(p. 213) pension plans Plans that provide income when employees reach a predetermined retirement age. (p.

223) phased retirement An arrangement whereby employees gradually ease into retirement using reduced workdays or shortened workweeks. (p. 227) portability A provision that employees who change jobs can transfer the lump-sum value of the pension they have earned to a locked-in RRSP or their new employer's pension plan. (p. 2227) severance pay Payable by employers under Ontario and/or federal jurisdiction to employees terminated for reasons other than cause, in addition to the reasonable notice payment or period. S pay is often based on the employee’s length of service and other factors (such as the total size of the annual company payroll). (p. 213)

short-term disability and sick leave Plans that provide pay to an employee when he or she is unable to work because of a non-work-related illness or injury. (p. 222) supplemental employee retirement plans (SERPs) Plans that provide the additional pension benefits required for employees to receive their full pension benefits in cases where their full pension benefits exceed the maximum allowable benefits under the Income Tax Act. (p. 228) vesting A provision that employer money placed in a pension fund cannot be forfeited for any reason. (p. 227) workers' compensation Workers' compensation provides income and medical benefits to victims of work-related accidents or illnesses or their dependents, regardless of fault. (p. 2215) REVIEW AND DISCUSSION QUESTIONS (p. 235) 1. Name and describe the benefits(s) offered by two government-mandated employee benefits programs. (p. 212-218) There are a variety of government-mandated benefits. Students may discuss Employment Insurance (EI) which is a federal government program intended to provide temporary financial assistance to eligible persons who experience interruption to their work through no fault of their own. Students may discuss pay on termination of employment; or leaves of absence or the Canada/Quebec Pension Plan (CPP/QPP) or Workers Compensation or vacations and holidays and/or paid breaks.

2. Explain the difference between sick leave plans and short-term disability plans. (p. 222) Short-term disability plans (also known as salary continuation plans) provide a continuation of all or part of an employee's earnings when the employee is absent from work due to non-workrelated illness or injury. These plans often provide full pay for some period of time (often two or three weeks) and then gradually reduce the percentage of earnings paid as the period of absence lengthens. The benefits cease when the employee returns to work or when the employee qualifies for long-term disability. Such plans are sometimes provided through an insurance company. .

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Sick leave plans operate quite differently from short-term disability plans. Most sick leave policies grant full pay for a specified number of permissible sick days – usually up to about 12 per year (often accumulated at the rate of one day per month of service). Newfoundland, the Yukon, Quebec, and the federal jurisdiction require sick leave (unpaid) as a minimum standard. The problem is that while many employees use their sick days only when they are legitimately sick, others simply utilize their sick leave as extensions to their vacations, whether they are sick or not. Also, seriously ill or injured employees get no pay once their sick days are used up.

3. Why are long-term disability claims increasing so rapidly in Canada?

This trend is expected to accelerate as the average age of the workforce continues to rise, because the likelihood of chronic illnesses, such as arthritis, heart disease, and diabetes, increases with age. Therefore, disability management programs with a goal of returning workers safely back to work are becoming a priority in many organizations. For example, employers are beginning to put more effort into managing employees with episodic disabilities, which are chronic illnesses such as HIV, lupus, multiple sclerosis, arthritis, and some cancers and mental illnesses that are unpredictable. These employees may have long periods of good health followed by unpredicted episodes of poor health.

4. Explain the difference between a defined benefit and a defined contribution pension plan. (p.

224-226) Changes from defined benefit to defined contribution are primarily done to reduce the long term company liability for pensions. The risk is transferred to the employee.

5. Explain the pros and cons of flexible benefits from both an employer and employee perspective. (p. 232-233) Flex benefit plan benefit the employer by them only paying their portion for coverage that employees actually want and use. Employees have benefits that suit them and their lifestyles. Cons are that the employers have more administration to deal with because nothing is standard and employees have be knowledgeable about picking their benefits to ensure they end up with the coverage they need.

Sometime they might have to any more that their benefits credits to get what they want.

6. What are two reasons that support the delivery of online communication of employee information to Millennials?

As we saw in Chapter 1, Millennials are tech-savvy and value immediate access to information and services. Online communication appeals to their technical skills and their need for quick access to information and services.

CRITICAL THINKING QUESTIONS (p. 235) 1. You are applying for a job as a manager and are at the point of negotiating salary and benefits.

What questions would you ask your prospective employer concerning benefits? Describe the benefits package you would try to negotiate for yourself.

In addition to asking questions regarding the types of benefits offered by the firm, other than those required by law, the employee would ask for details regarding coinsurance amounts, deductibles, .

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and maximum payouts. The employee would also inquire about the type of pension plan offered, as well the issues of vesting and portability. The employee would request a copy of the benefits handbook, so that s/he could read through it at his or her convenience, and indicate that they would call if they had any specific questions.

The benefits package that the employee would try to negotiate would include any life, health, disability, or pension benefits not provided as part of the regular package; generous vacation entitlement (such as five weeks after one year of service); a golden parachute clause; a comprehensive educational subsidy/educational leave program; and some perks such as an expense account, company car, company credit card, a reserved parking spot, a spacious office with windows and a view, a private secretary, and a physical fitness club membership. The employee would also try to arrange for an annual bonus and profit sharing.

2. What is the key difference to the employer and the employee between a defined benefit and a defined contribution pension plan sponsored by the employer?

In the defined benefit play the employee knows ahead of time what his or her retirement benefits will be on retirement but with the defined contribution plan, the employee cannot be sure of his or her retirement benefits until retirement. From the perspective of the employer, the defined contribution plan would be the recommended plan. This plan only specifies what contribution the employer will make to a retirement fund set up for the employee. It does not define the eventual benefits amount, only the periodic contribution to the plan. Most organizations have adopted defined contribution plans because the company is not tied to providing a specified amount. Therefore, the financial burden on the company is less if a defined contribution is adopted. There is a risk towards the employee in a defined contribution plan because if the company faces serious financial difficulties or goes bankrupt, the employee will not receive further contributions from the employer.

3. You are the HR consultant to a small business with about 40 employees. Currently the business offers only the legal minimum number of days for vacation and paid holidays, and legally mandated benefits. U s i n g i n f o r m a t i o n f r o m t h e V o l u n t a r y E m p l o y e r - S p o n s o r e d Benefits section (p.218-228) what are three benefit choices you would offer to employees? Why? Before making specific recommendations, the employees should be surveyed regarding their preferences in order to ensure additional benefits will aid in building employee commitment and enhancing retention. Cost issues would also have to be taken into consideration.

Since most employees today find time off with pay to be a particularly attractive benefit, and since family-friendly benefits and health promotion are becoming more and more important, recommendations would likely include granting additional vacation, a few extra paid holidays, providing a nutritious food service (such as having a coffee truck visit twice per day, or installing some vending machines with healthy snacks), and granting some sick days/personal leave days. Life insurance and accidental death and dismemberment insurance should also be considered, since these are extremely inexpensive yet highly valued benefits, as well as a supplementary health-care plan.

If offered on a cost-shared basis, such a plan could be quite affordable. An educational subsidy plan, designed to encourage employees to upgrade their skills and qualifications, should also be considered since such plans benefit both employees and the employer.

4. Name and explain two specific steps an employer may use to control health benefits costs in their company (p. 219-22). .

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Steps include the following: have employees pay more of the costs by increasing their premiums, increasing deductibles, reducing company co-insurance , lowering annual maximums on some services, eliminate coverage for spouses, private hospital rooms and other benefits. Employers can publish a restricted list of drugs that will be paid and/or use generic drugs. Health promotion is another strategy. Risk assessment programs could be implemented. Finally, health care spending accounts (HCSA) can be offered.

5. Based on details seen in the Employee Services section of the chapter, what are three personal or jobrelated services that would appeal to you as an employee? Why? Students can choose from among the following: credit unions, counselling services, employee assistance programmes, social and recreational services, subsidized child care, elder care, subsidized transportation services, food services and/or educational subsidies.

EXPERIENTIAL EXERCISES (p. 235) 1.Using your favourite search engine, locate the federal or a provincial government website dealing with maternity and parental leave benefits. Identify three important facts about such leaves of absence that an HR staff member should know when consulting with employees in their company.

Students can look at length of time for maternity leave and parental and adoption leaves in their province or for the federal government; what are the guarantees upon return to work; when can a mother begin maternity leave and who can take the leave (e.g., are surrogate mothers allowed to take maternity leave).

The federal government has introduced new parental leave benefits in 2018. Be sure students explore those changes.

2. Locate a “benefits calculator” website on the Internet, and explore the employer and employee premium costs for mandatory government benefits and voluntary employer-sponsored plans.

There are many that they can find on the internet. You may want some to focus on Child and Family benefits and others on EI Maternity and Parental benefits.

3. In a small group, locate several websites that outline the advantages and disadvantages of a flexible benefit plan for employees. Then collaborate with group members to build a strong case for adopting such an employee benefits approach, while at the same time raising important factors that may concern company leaders regarding this benefits strategy.

Have the students look at both the employers’ and the employees’ perspectives.

.

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PART FIVE: BUILDING EFFECTIVE EMPLOYEE–EMPLOYER RELATIONSHIPS

CHAPTER 10 OCCUPATIONAL HEALTH AND SAFETY LEARNING OUTCOMES ANALYZE the responsibilities and rights of employees and employers under occupational health and safety legislation.

EXPLAIN WHMIS legislation.

ANALYZE in detail three basic causes of accidents.

DESCRIBE how accidents at work can be prevented.

DISCUSS six major employee health issues at work and RECOMMEND how they should be handled.

EXPLAIN why employee wellness programs are becoming increasingly popular.

CHAPTER SUMMARY Employers, supervisors, and employees share joint responsibility for workplace health and safety, including exercising “due diligence”, communicating and enforcing policies, and participation on joint health and safety committees. Organizational cultures that promote collaboration, open communication and trust increase the safety climate and safety performance in the workplace.

Organizations want to control workers’ compensation costs as this is the often the most expensive benefit provided by an employer. Occupational health and safety legislation is jurisdiction specific. Joint Health and Safety committees provide a non-adversarial atmosphere in which management and labour can work together to ensure a safe workplace. Employees have three key rights: to know about workplace safety hazards, to participate in the OH & S process, and to refuse unsafe work. WHMIS is a Canada-wide mandated system that protects workers through labelling, MSDS, and training on how to store and handle hazardous materials and substances. Three basic causes of accidents are chance occurrences, unsafe conditions, and unsafe acts by employees; other contributing factors are the job itself, the work schedule, and the psychological climate. Accidents can be reduced by a) reducing unsafe conditions by removing hazards and b) reducing unsafe acts through HR selection, placement, education and training, positive reinforcement, top-management commitment, and monitoring work overload and stress. Emerging OH & S issues are substance abuse, job-related stress, repetitive strain injuries, workplace toxins, viral pandemic, workplace smoking, and workplace violence. Ergonomics and employee wellness programs (e.g. fitness, smoking cessation, and so on) reduce costs for sickness and disability claims, workers’ compensation costs, and absenteeism.

LECTURE OUTLINE I.

STRATEGIC IMPORTANCE OF OCCUPATIONAL HEALTH AND SAFETY

Employee health, safety, and wellness management are important determinants of employee perceptions regarding fair treatment by the organization; perceptions that affect service provided to clients and customers. Health, safety, and wellness also help to reduce lost-time injury rates and change widespread beliefs that workplace accidents are inevitable. Organizational cultures that promote collaboration, open communication and trust increase the safety climate and safety

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performance in the workplace. Organizations want to control workers’ compensation costs as this is the often the most expensive benefit provided by an employer.

1. Controlling Workers’ Compensation Costs These are often the most expensive benefit provided by an employer (avg. Ontario injury $ 59 000); indirect costs about four times direct costs. WC premiums are proportional to WC claims record.

Teaching Tip: have students use the small business safety calculator (see Entrepreneurs & HR Discussion Box, p. 238) to estimate costs for a variety of small businesses e.g. auto shop, metal fabricating shop, restaurant, retail store. a. Before the accident – remove unsafe conditions, screen out accident-prone for job workers, establish safety policy and loss control goals b. After the accident – facilitating the employee’s return to work – provide first aid, get medical aid, soothe worker, document the accident, file reports, encourage speedy return to work.

Three C”s of disability management – commitment, collaboration, creativity based on functional abilities evaluation (FAE) conducted by health professional II. BASIC FACTS ABOUT OCCUPATIONAL HEALTH AND SAFETY LEGISLATION All provinces, territories, and the federal jurisdiction have occupational health and safety (OH &S) legislation based on the principle of joint responsibility.

1. Purpose OH & S laws across Canada fall into three categories; general rules, rules for specific industries, and rules related to specific hazards; regulations that accompany each law (act) are very complex Provisions differ significantly across jurisdictions but have the following basic features in common.

2. Responsibilities and Rights of Employers and Employees Employers are responsible for exercising “due diligence” – taking every reasonable precaution to ensure health and safety of workers; includes filing accident reports, maintaining records, ensuring safety rules are enforced, using progressive discipline, and posting safety notices and legislative information.

Employees are responsible for taking reasonable care for their own and co-workers’ safety, including wearing protective clothing & equipment and reporting any contravention of OH & S law or regulations. Three basic employee rights are: to know about workplace safety hazards, to participate in OH& S processes, and to refuse unsafe work, if “reasonable cause”.

Teaching Tip: The law calls for employees to “tell on” their co-workers. Have students identify situations in which they would or wouldn’t feel comfortable reporting a co-worker to management.

3. Joint Health and Safety Committees (JHSC)

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A JHSC is a non-adversarial group composed of management and labour (min. 50% workers) that make regular inspections, evaluate hazards, investigate complaints and accidents, promote health and safety measures, and implement solutions. At least one management and one worker member must be certified in OH & S through a provincial training program.

Teaching Tip: There is a least one, if not many JHSCs at most colleges/universities. Have students locate and review the college/university’s OH & S webpage (most likely under Human Resources) to find out how many there are, who the members are, and look over minutes of their meetings (if available).

4. The Supervisor’s Role in Safety Laws impose a personal duty and specific obligation on supervisors to advise and instruct workers, ensure reasonable precautions are taken, minimize risk of injuries or illnesses and enforce safety rules, but instilling a desire to work safely in all workers is the best approach.

Teaching Tip: Have students describe the health and safety actions taken by their immediate supervisor (past or present). Did they think the supervisor really fulfilled their role under the law?

5. Enforcement of Occupational Health and Safety Laws Government inspectors have power to carry out safety inspections (periodic or unscheduled) without a warrant. They can issue orders to stop work, stop using tools, install first aid equipment, and stop emission of contaminants. Penalties consist of fines and/or jail terms for individual managers, corporate executives and company directors. Bill C-45 “corporate killing” law imposes criminal liability on persons who direct others and fail to ensure an appropriate level of safety.

6. Occupational Health and Safety and Other Legislation OH & S legislation has to work hand-in-hand with human rights legislation, which is often difficult, because alcohol or substance abuse addictions are disabilities under human rights laws, as are the right to wear religious clothing or artifacts that might be a safety hazard. Employers also have to keep track of amendments to the legislation such as Bill 168 (June 2010) which requires a more comprehensive approach to preventing and dealing with workplace violence.

III. WHAT CAUSES ACCIDENTS There are three causes: chance occurrences, unsafe conditions, and unsafe acts. By far unsafe acts are the major contributors to workplace injuries.

1. Chance Occurrences Are difficult or impossible to predict so are more or less beyond management or employee control. Employers should not confuse these with situations such as tornadoes or earthquakes, where protective measures can be put in place, even though outcomes cannot be guaranteed.

2. Unsafe Conditions

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Are characteristics of the situation and Include improperly guarded equipment, unsafe storage of materials, improper illumination, improper ventilation, and a work environment that is conducive to workplace violence. Other work-related factors are inherently dangerous jobs, challenging work schedules (long or night shift), and negative psychological climate, along with temporary stress factors.

3. Control of Toxic Substances Most OH & S laws require basic precautions with respect to toxic substances of any kind (chemicals, biohazards, physical agents). The Workplace Hazardous Materials System (WHMIS) is a co-operatively developed, Canada-wide system designed to protect workers by providing information about hazardous materials or substances in the workplace.

WHMIS has three elements: labelling of hazardous material containers (see Fig. 10.1, p 243); material safety data sheets (MSDS) which also outlines procedures for safe handling and employee training in identifying WHMIS symbols, reading WHMIS supplier and workplace labels, and reading and applying the information on MSDS. Teaching Tip: Before, during, or after class have students walk around campus and find as many different WHMIS symbols as they can, and where safely possible find out what specific substances are found in each location 4. Unsafe Acts Are caused by employees not the situation, and may override otherwise safe conditions. Include throwing materials, operating at unsafe speeds, making safety devices inoperative, using unsafe procedures, taking unsafe positions, lifting improperly, and acting irresponsibly with others.

Teaching Tip: Have students describe workplace accidents they have seen or experienced and classify them into caused by unsafe conditions versus those caused by unsafe acts. Is there a connection between the two causes?

5. Personal Characteristics Personal characteristics are associated with predisposition to certain behaviours tendencies that can lead to behaviours that increase the incidence of accidents (see Fig. 10.2, p. 244). Accident proneness is not situational than dispositional, but certain characteristics increase the situational risk. a. Vision – poor vision increases accidents in transport and machine operator jobs b. Literacy – low literacy increases accidents due to lowered comprehension of safety materials and tendency to be employed in more dangerous jobs c. Age - accidents most frequent in 17 – 24 age range d. Perceptual versus motor skills – slower thinking skills impair ability to react Teaching Tip: Use the Workforce Diversity Discussion Box (p. 246) to discuss health and safety of young workers. Survey students as to safety education and training received in summer jobs.

IV. HOW TO PREVENT ACCIDENTS 1. Minimizing Unsafe Conditions

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Although only 4% of accidents can be attributed to unsafe conditions, this is the first line of defense and includes job redesign, removal of physical hazards, and ensuring personal protective equipment is worn and worn properly.

2. Reducing Incidence of Unsafe Acts This is the second basic approach and includes the following four actions. a. Selection testing – screen physical abilities, Employee Reliability Inventory, demonstrate jobrelated skills b. Top-management commitment – involved on regular basis, priority in meetings, high rank for Safety Officer, financial bonuses for safety improvements c. Training and education – should be required for all, allow input into program design, include practical evaluation of training, safety posters (especially graphical vs. text) d. Positive reinforcement – safety goals, data collection and reporting, on-the-spot praise and recognition, Facilitating an employee’s return to work - three C”s of disability management – commitment, collaboration, creativity based on functional abilities evaluation (FAE) conducted by health professional Teaching Tip: The ethical dilemma on p. 248 raises the issue of English as Second Language (ESL) workers and their right to know.

V. OCCUPATIONAL HEALTH AND SAFETY CHALLENGES IN CANADA 1. Substance Abuse Effects are severe on worker and work (quality and quantity), safety is compromised, but conflicting legal obligations (disability rights versus due diligence). In a 2016 study, almost three in four Canadian employers surveyed had a formal drug and alcohol policy. Drug and alcohol testing only legal under three conditions,  Test is rationally connected to performance of job  Test was adopted in honest and good-faith belief in is necessity for legitimate workrelated purpose (not to get rid of “undesirables’)  Test is reasonably necessary to the accomplishment of the work-related purpose Random drug tests are unjustifiable as are arbitrary alcohol testing (selected employees) except in safety-sensitive positions. “For cause” or “post-incident” testing is acceptable in specific circumstances, leading to accommodation but not immediate dismissal. Supervisors should ask and observe, document and follow-up, and refer the employee to available services. Four techniques for dealing with substance abuse are discipline, discharge, in- house counselling, and referral to an outside agency; discharge only used after repeated attempts at rehabilitation have failed.

1. Mental Health in the Workplace 2. Two-thirds of companies underestimate the prevalence of mental illness in the workplace. Mental health issues are the leading cause of both short- and long-term disability.

While some stress is good, excessive workplace stress is a pervasive problem that is getting worse and has serious consequence for employer (lost productivity, increased absenteeism and turnover) and employee (anxiety, depression, anger, cardiovascular disease, headaches, and accidents).

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Mental health issues are the leading cause of both short-term and long-term disability claims, but physical safety often given much higher priority. Stress is underestimated but signs are often obvious (). Two sources of stress are environmental factors (high demands/low control and/or high mental & physical effort/low rewards) and personal factors (Type A personality, selfesteem, tolerance for ambiguity, personal crises). a. Reducing job stress – sleep, proper eating, taking breaks/vacations, changing jobs, getting counselling, daily planning, taking advantage of EAP, treating employees fairly, giving more control over work and clarifying task and expectations b. B u r n o u t – total depletion of physical and mental resources; solutions – break patterns, get away periodically, reassess goals, think about approach to work, reduce stress c. Workers’ compensation and stress-related disability claims – post-traumatic stress benefits but limited chronic stress benefits, “psychotoxic” jobs, lawsuits for “poisoned environments” 3. Repetitive Strain Injuries RSIs are rapidly becoming the most prevalent work-related injury – “overuse” injury suffered by knowledge workers and others. RSI’s are caused by one or more factors: repetitive actions, high pace, awkward or fixed positions, forceful movements, cold temperatures, and insufficient recovery time. These must be treated as all other workplace hazards. a. Ergonomics – art of fitting workstation and work tools to individual; ergonomic workstations and training increase productivity and efficiency, as well as reduce injuries, but best defense is short breaks and stretches. b. Video display terminals – short0term eye problems, eyestrain, eye soreness, backaches and neck aches, psychological distress, RSI (e.g. carpal tunnel syndrome), ergonomic changes needed including vision remedies (anti-glare screens and pre-placement vision exams) Teaching Tip: Have students take a photo of their work station at home (desk, bed, whatever) and if possible a photo of themselves at work. Have them exchange photos and point out potential ergonomic enhancements. Students can also do a little online research to find out the costs of ergonomic furniture and accessories (keyboard rests, wrist rests, ergonomic keyboards, and so on).

4. Workplace Toxins The leading cause of work-related deaths around the world is cancer, but carcinogen removal is costly and unions have delayed on taking action. New chemicals and substances are being introduced without testing. Firefighters can now get workers’ compensation for specific cancers.

5. Workplace Smoking Smoking leads to higher healthcare and disability costs for employers and lower productivity and increased accidents for employees who smoke, not to mention risks from second-hand smoke for co-workers. Smoking interacts with other carcinogens to greatly increase risk of lung cancer.

Smoking bans and smoking cessation programs are protecting the non- smoking Canadians (80%).

Teaching Tip: Given all of the evidence regarding the negative effects and costs of smoking, maybe organizations should just hire non-smokers. Have students research the law to find out if there is any organization, industry, or jurisdiction (in Canada or elsewhere) where you can refuse to hire smokers.

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6. Viral Pandemic Recent major influenza outbreaks have created awareness that a major viral pandemic is inevitable, but although many are aware, few are prepared. Organizations need a plan for isolation in order to reduce transmission (e.g. telecommuting, remote worksites, quarantine, business shutdown). Pandemic preparation should address prevention, containment, response to employee work refusals, creation of pandemic team, premises security, sickness/disability, coverage, leaves for family care, and restriction of visitors to company premises. Multi-channel communication is essential including union consultation. Provisions for extra unpaid leave are coming into law.

7. Violence at Work Workplace violence is defined by the International Labour Organization (ILO) as incidents in which an employee is abused, threatened, or assaulted in circumstances relating to work; violent acts include harassment, bullying, intimidation, physical threats, assaults, and robberies. Most violence, especially physical assaults, comes from members of the public, rather than co-workers, and is particularly prevalent for women in healthcare professions (see Fig. 10.3, p. 258). a. Workplace violence and the law – laws cover physical and sometimes psychological violence; employers liable for hiring violent individuals and not responding to violent incidents, but criminal record checking is limited under human rights legislation b. Prevention and control of workplace violence – several concrete steps such as:      

Identifying jobs with high risk of violence Instituting a workplace violence policy Creating a healthy work environment Heightening security measures Providing workplace violence training Improving employee screening

VI. EMPLOYEE WELLNESS PROGRAMS There are three elements in a health workplace: the physical environment, the social environment, and health practices. Employee wellness programs take a proactive approach to all these areas of employee well-being, as opposed to EAPs which are reactive. Promoting and enabling wellness has many benefits. A focus on wellness is expected to increase in the next 25 years driven by a shrinking workforce, an increase in postponed retirement, increased awareness of mental health, and medical and technological advances. Wellness initiatives often include stress management, nutrition and weight management, smoking cessation programs, tai chi, heart health, physical fitness and workstation wellness through ergonomics.

DISCUSSION BOXES WORKFORCE DIVERSITY: Guiding Young Workers in Health and Safety (p. 246) The Canadian Centre for Occupational Health and Safety suggests that accidents and injuries to young workers could be reduced through four steps: assigning suitable work, understanding young workers,

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providing training, and effective supervision.

STRATEGIC HR: Fidelity Investments Canada Focuses on Employee Health (p. 250).

Fidelity promotes a safe and healthy workplace by having two workstations that are walking stating for employees to keep active while on conference calls and provides support for family issues through an EAP ENTREPRENEURS AND HR: Small Business Safety Calculator (p. 238) Statistics from Ontario’s WSIB show that job fatality rates of small businesses are 6.7 times higher than those for larger businesses and lost-time injury rates are 10 percent higher. Through their website the Industrial Accident Prevention Association (IAPA) provides a free small business safety calculator to help businesses identify and quantify incident costs, investigation costs, damage costs, replacement costs, and productivity costs.

ETHICAL DILEMMAS Is it ethical to provide safety training in English to immigrant workers who speak little English, in order to reduce costs? (p. 248) It is not ethical to provide safety training in English to immigrant workers who speak little English. The purpose of safety training is to protect the health and safety of the firm’s employees, reduce safety-related costs, and prevent any legal action against the company. It is rather pointless to go through the motions of providing training, knowing that those in the program who speak little English will learn little or nothing from it. Doing so is definitely not living up to the employer’s “due diligence” responsibilities under occupational health and safety legislation.

Furthermore, while there might be short-term cost savings involved in providing training in English only, accidents are extremely costly – in terms of human suffering, workers’ compensation expenses, training replacement workers, or potential lawsuits. Occupational health and safety legislation requires that employers take “all reasonable precautions” to protect the health and safety of its workers, which would include offering safety training and providing safety materials in the most common languages. Visual/graphic materials are often an effective way to overcome language issues.

Is it ethical for an organization or company to create high work volume and uncertain job demands employees during economically volatile times, if they plan to lay off the employees? (p. 253) It is not ethical for an organization or company to create high work volume and uncertain job demands employees during economically volatile times, if they plan to lay off the employees.

Employees will generally understand uncertainty and volatility. Most of the time, employees will be willing to take on a heavy workload during volatile or uncertain times with the expectation of continued employment and more normal workload when the environment in which the employer operates stabilizes. If a firm anticipates workload in excess of an ongoing norm for a period of time, the use of temporary workers should be considered rather than hiring people on an ongoing basis when the employer knows that the workers will be laid off when the period of volatility ends.

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KEY TERMS burnout The total depletion of physical and mental resources caused by excessive striving to reach an unrealistic work-related goal. (p. 254) due diligence Employer’s responsibility regarding taking every reasonable precaution to ensure the health and safety of their workers (p.239) employee wellness program A program that takes a proactive approach to employee health and wellbeing. (p. 260) ergonomics An interdisciplinary approach that seeks to integrate and accommodate the physical needs of workers into the design of jobs. It aims to adapt the entire job system 0 the work, environment, machines, equipment, and processes, - to match human characteristics. . (p. 255) lost-time injury rate Measures any occupational injury or illness resulting in an employee being unable to fulfill the work full work assignments, not including any fatalities (p. 237) occupational health and safety legislation Laws intended to protect the health and safety of workers by minimizing work-related accidents and illnesses. (p. 238) reasonable cause A complaint about a workplace hazard has not been satisfactorily resolved, or a safety problem places employees in immediate danger (p.239) repetitive strain injuries (RSIS) Activity-related soft-tissue injuries of the neck, shoulders, arms, wrist, hands, back, and legs. (p. 255) Workplace Hazardous Materials Information System (WHMIS) A Canada-wide legally mandated system designed to protect workers by providing information about hazardous materials in the workplace. (p. 242)

REVIEW AND DISCUSSION QUESTIONS (p. 262) 1. Discuss the purpose of occupational health and safety legislation and who the agents responsible for enforcing it are. (p. 237-241) The purpose of these laws is to protect the health and safety of employees at work by legislating general health and safety rules, rules for specific industries, and rules related to specific hazards.

Provisions of occupational health and safety legislation differ significantly across Canada, but most have certain basic features in common, including designated responsibilities and rights of employers and employees, joint health and safety committees, and enforcement procedures.

In all Canadian jurisdictions, occupational health and safety law provides for government inspectors to periodically carry out safety inspections of workplaces. Safety inspectors may order a variety of actions on the part of employers and employees, including orders to stop work, stop using tools, install first aid equipment, and stop emission of contaminants. Penalties consist of fines and/or jail terms. Governments across Canada are increasingly turning to prosecutions as a means of enforcing health and safety standards. An amendment to the Criminal Code has been introduced which is called “corporate killing,” which imposes criminal liability on corporate decision-makers who fail to ensure that their company maintains an appropriate level of safety.

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2. Explain the differences and similarities in the employer, supervisor, and employee roles and responsibilities in maintain safe workplace conditions. (p. 239-240) Most jurisdictions impose a personal duty on supervisors to ensure that workers comply with occupational health and safety regulations, and place a specific obligation on supervisors to advise and instruct workers about safety. Safety-minded managers must aim to instil in their workers the desire to work safely. Minimizing hazards is important, but no matter how safe the workplace is, there will be accidents unless workers want to and do act safely. Of course, supervisors try to watch each employee closely, but most managers know this will not work. In the final analysis, the best (and perhaps only) alternative is to get workers to want to work safely. Then, when needed, safety rules should be enforced.

Most safety experts agree that safety commitment begins with top management. Without the full commitment at all levels of management, any attempts to reduce unsafe acts by workers will meet with little success. The first-line supervisor is a critical link in the chain of management. If the supervisor does not take safety seriously, it is likely that those under him or her will not either.

Employee responsibilities and role include: Know about workplace safety hazards Participate in health and safety process Refuse unsafe work if they have reasonable belief that the work is dangerous (p. 239) 3. Explain factors that contribute to unsafe acts, and identify how these factors can be controlled to reduce unsafe working conditions. (p.243-246) Personal characteristics (personality, motivation, and so on) serve as the basis for certain "behaviour tendencies" such as the tendency to take risks and undesirable attitudes. These behaviour tendencies in turn result in unsafe acts such as inattention and failure to follow procedures. It follows that such unsafe acts increase the probability of someone having an accident. The person who is accident prone on one job may not be on a different job – accident proneness is situational. In fact, many human traits have been found to be related to accident repetition in specific situations: Vision: Vision is related to accident frequency for many jobs. For example, passenger car drivers, intercity bus drivers, and machine operators who have high visual skills have fewer injuries than those who do not.

Age: Accidents are generally most frequent between the ages of 17 and 28, declining thereafter to reach a low in the late fifties and sixties.

Literacy: The risk of accidents is higher for employees who cannot read and understand machinery operating instructions, safety precautions, equipment and repair manuals, first aid instructions, or organizational policies on workplace health and safety.

Perceptual versus Motor Skills: Where a worker's perceptual skill is equal to, or higher than, his or her motor skills, the employee is a relatively safe worker. But where the perception level is lower than the motor skills level, the employee is accident prone, and his or her accident proneness becomes greater as this difference increases.

4. Describe how to reduce workers’ compensation costs, both before and after an accident. (p.238)

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Before the accident, firms should remove unsafe conditions, screen out employees who might be accident prone for the job in question (without violating human rights legislation), and establish a safety policy and loss-control goals.

After the accident, the employer should provide first aid and make sure that the worker gets quick medical attention, should make it clear that he or she is interested in the injured worker and his or her fears and questions, document the accident, file any required accident reports, and encourage a speedy return to work. Some people believe that the most important and effective thing an employer can do to reduce costs is to develop an aggressive return-to-work program, including making light-duty work available. Functional abilities evaluations are an important step in facilitating the return to work. This evaluation determines the level of disability so that the worker can either go back to his or her original job or be accommodated.

5. Explain the four traditional techniques for dealing with substance abuse. (p. 252) The four traditional techniques for dealing with substance abuse are: 1. Discipline 2. Discharge – this is used only after repeated attempts at rehabilitation have failed.

3. In-house counselling – can be offered by the employer’s medical staff, the employee assistance plan, or agencies such as AA 4. Referral to an outside agency 6. Analyze the legal and safety issues concerning workplace toxins. (p. 256-257) The leading cause of work-related deaths around the world is cancer, and hundreds of Canadian workers die from occupational cancer each year. Cancer-causing agents in the workplace are not being significantly reduced, as it is costly for employers to do so and unions have placed a higher priority on wages and benefits. In Manitoba, the workers’ compensation law provides benefits to firefighters who develop any of five specific job-related cancers, and this law could set a precedent for other occupations and other jurisdictions.

7. Explain factors contributing to violence at work and explain how to reduce these factors. (p.

258-260) Several concrete steps can be taken by employers to reduce the incidents of workplace violence. These include identifying jobs with high risk of violence; instituting a workplace violence policy; creating a healthy work environment; enhancing security arrangements; improving employee screening; and training for violence reduction.

CRITICAL THINKING QUESTIONS (p. 262 1. What is your opinion on the question “Is there such a thing as an accident-prone person?”

How can organizations manage occupational health and safety in an organization if the answer is yes? If it is no?

Based on the material presented in this chapter, the evidence seems fairly conclusive that there is no such thing as an accident-prone person and that accident proneness is situational. Human traits that have been found to be related to accident repetition in specific situations include vision, age, and perceptual versus motor skills. Therefore accident prevention measures outlined in the text are appropriate.

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2. Young people have a disproportionately high number of workplace accidents. In your opinion what factors have impacted this statistic? Why do you think that is? What role does the organization play in reducing workplace accidents among younger employees? What role do younger employees play in reducing workplace accidents?

The students typically have many good answers for this question and many of them have stories about workplace incidents they have seen or experienced.

For many this is a reminder of the TV, bus shelter and newspaper ads they have seen.

Typical responses will include – we think we are invincible, nobody warns us of hazards, we fool around a lot This leads into a discussion of some of the high profile accidents that have killed or permanently injured young workers.

3. Develop guidelines for determining the point at which to terminate an employee who shows tendencies of violence in the workplace? Assess a situation from the position of kitchen staff at a large restaurant. Reminder: Your guidelines must stay within legal limits and should also be realistic.

A decision to terminate an employee should be based on the following:  an act of violence on or off the job  erratic behaviour evidencing a loss of perception or awareness of actions  overly defensive, obsessive, or paranoid tendencies  overly confrontational or antisocial behaviour  sexually aggressive behaviour  isolationist or loner tendencies  insubordinate behaviour with a suggestion of violence  tendency to overreact to criticism  exaggerated interest in war, guns, violence, mass murders, catastrophes, and so on  the commission of a serious breach of security  possession of weapons, guns, knives, or like items at the workplace  violation of privacy rights of others such as searching desks or stalking  chronic complaining and the raising of frequent, unreasonable grievances  get-even attitude The firm should institute a workplace violence policy, heighten security measures, and provide workplace violence training. Having taken these steps, the appropriate course of action will depend on the nature of the offence. An act of violence on the job, insubordinate behaviour with a suggestion of violence, the commission of a serious breach of security, possession of a weapon, and violation of privacy rights of others are offences that justify immediate termination of employment following a fair and impartial investigation and ensuring that the individual’s due process rights are protected.

4. You notice that one of your employees consistently comes in to work on Monday morning nursing a hangover. For most of the morning, she appears distant and reclusive? Do you approach her to discuss the situation, or do you feel that it is an invasion of privacy?

You cannot confront her directly with accusations of alcohol use but you can ask how she is feeling and document any observations of unusual behaviour. If she is unfit for work she can be sent home and a written warning should be put in her file and she should be made aware of the number of warnings that the company will tolerate. You can suggest that if she needs support for any issues she should feel free to use the confidential EAP. You cannot diagnose alcohol addiction but have to remember that if she has an addiction she is protected by human rights legislation, because addiction is viewed as

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a disability in Canada.

5. Given the disappointing progress in reducing workplace injuries and deaths, do you think that the “corporate killing” law should be used more aggressively?

The Criminal Code was amended in 2004 to introduce a criminal offence commonly known as “corporate killing,” which imposes criminal liability on “all persons” who direct the work of other employees and fail to ensure an appropriate level of safety in the workplace. Criminal Code convictions can be penalized by incarceration up to life in prison and unlimited fines.

Statistics show that on average more than three Canadians die each working day. Over the years, these numbers have continued to increase despite various laws and regulations that have been introduced with the aim of reducing such deaths. Therefore, it would be wise to bring in a law that imposes criminal liability upon the employer and the supervisors. It is the duty of employers to ensure the health and well-being of their employees and to provide a safe environment to work in. While employers are held accountable for workplace injuries and deaths, employees too will have to be held accountable. Even if the employer provides a safe work environment, or has workplace policies and regulations to prevent injuries and accidents, if employees do not adhere to them then it is difficult to avoid such situations. Therefore, it’s necessary to consider how such laws can also be extended to hold the employees accountable, and what consequences they have to face if investigations reveal that employee negligence caused an accident that resulted in a death.

6. Assume that you have an employee working in your company who has been treated several times already for substance abuse through the company counselling program. Today, the manager found him “stoned” again, trying to operate a piece of equipment in an unsafe manner. The manager just came to you and said “Fire him! I’ve had enough! He’s not only endangering himself, but other workers.” The company has a no substance use while at work and zero tolerance for arriving at work in an impaired state policy that all employees are aware of and have signed off on as part of the code of conduct. What steps can/should your company take in this circumstance?

This is a tricky situation as addiction is considered a disability. In this case, taking all documentation of what the company has done so far to support the employee and getting legal advice on the chances of succeeding in terminating the employee without a wrongful dismissal claim is a good idea. As for dealing with the manager, reinforce that addiction is a disability and must be treated as such.

Obviously the worker must not be allowed to continue endangering himself or others. Your option in the meantime might be to transfer him to another less risky task. Discharge is an option but only if all the steps have been taken to assist the worker and the whole process has been documented including repeated written warnings.

EXPERIENTIAL EXERCISES (p. 263) 1. In a group of four to six students, spend about 30 to 45 minutes in and around one of the buildings on your campus identifying health and safety hazards. Research whether or not these unsafe conditions violate the applicable health and safety legislation. Develop recommendations to enhance building safety for each location and debrief your colleagues on these recommendations.

Unsafe conditions are the mechanical and physical conditions that cause accidents. Students should focus on physical aspects such as defective equipment, poor lighting, unsafe storage of hazardous

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materials, and inaccessibility of fire exits. The provincial/territorial safety council and/or the health and safety committee members at the college or university should be able to provide a copy of the applicable health and safety legislation for students’ reference. Note: By law, the legislation should be posted in English and the majority language of the workplace.

2. Review a workplace-violence consulting website and contact a workplace violence consultant.

Gather information on what advice is provided to clients on preventing workplace violence, and ask for a sample workplace violence policy. Prepare a brief presentation to the class on your findings.

The material on workplace violence in the text can be used to guide students' questions, and to organize the information obtained from the workplace violence consultant. Key aspects of workplace violence prevention include training, employer policies, security measures, employee screening, and behaviour management techniques. The Canadian Centre for Occupational Health and Safety is a good resource as well.

3. On your own, identify the workplace hazards that might be present in the following workplaces:      

car repair and auto body shop home renovations supplies and equipment storage area live concert venue health clinic dealing with homeless people office with many employees working on computers and paper files chemical plant finished product storage area.

4. Think about what these companies can and should do to ensure that their employees are safe at work.

Once you have completed your own list of answers, work with a group of four or five students to compare your lists. Brainstorm other hazards and solutions.

The purpose of this exercise is for students to think about hazards they may never have thought about before in the context of workplace that they may take for granted. Students typically miss the following hazards that may be found in office environments that they tend to think are “safe” places: unsecured filing cabinets and shelving, communicable diseases. For each one of the scenarios there are many hazards that can be identified and discussed. Sometime students have personal experience of them.

This is an opportunity to remind students of the proper way to load a filing cabinet and secure them since many of them will be working in an office in the future.

Solutions include good housekeeping to prevent slips and falls, protective clothing, footwear, gloves, eyewear and facemasks, ergonomic workstations, restricted access to certain locations, 5. Conduct an Internet search on Canadian websites to find a material safety data sheet (MSDS) for chlorine laundry bleach for home use. What have you learned that you did not know Students should be able to compare the type and quality of the information presented. They should also be able to extrapolate what they have learned to other workplace environments.

6. Depression has been described as a “clear and present danger” to business, as it manifest itself in alcoholism, absenteeism, injury, physical illness, and lost productivity. Estimates suggest that an employee with depression who goes untreated costs the company twice what treatment costs per year. A Harvard University study projects that, by 2020, depression will become the biggest source of lost workdays in developed countries.; the World Health Organization predicts

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that depression will rank second as a cause of disability on a global basis by the same year. Young workers (aged 15 to 24) are most at risk.

7. Assuming the role of a career counsellor to newly hired graduates in a large retail company (Costco, Walmart, and so on), explain the employee and employer outcomes of stress and depression in an informed and actionable way.

Students should develop materials (talk, posters, presentation, webpage, brochure) that will get the attention of the target group in a way that is informative but not condescending, that makes young workers more tolerant of mental health issues, makes those with mental health issues feel valued and comfortable in seeking support, and that has practical suggestions on what to do if they are experiencing depression and how to help others who may be experiencing depression.

CHAPTER 11 MANAGING EMPLOYEE SEPARATIONS: FOUNDATIONS OF EMPLOYEE ENGAGEMENT, COMMUNICATION, AND TURNOVER MANAGEMENT LEARNING OUTCOMES DEFINE voluntary and involuntary turnover and explain the impact of each turnover method.

ANALYZE important HR considerations in ensuring fairness in dismissals, layoffs, and terminations.

DEFINE wrongful dismissal and Discuss the requirements for termination pay, including reasonable notice and severance pay where applicable.

DISCUSS the three foundations of a fair and just disciplinary process.

EXPLAIN various techniques for ensuring effective employee communication in organizations to help manage turnover.

EXPLAIN the six steps in the termination interview.

CHAPTER SUMMARY HR considerations, whether turnover is voluntary or involuntary, are ensuring sufficient talent is still available and turnover costs are minimized. Three prerequisites for a fair and just disciplinary process are rules and regulations, progressive penalties, and an appeals process.

Employees who are dismissed without just cause must get reasonable notice and compensation. Employees may file wrongful dismissal or constructive dismissal suits if they believe the employer has not followed the law or breached the employment contract.

Termination interviews should be carefully planned and executed. Organizational factors can increase employment engagement, which can improve productivity, retention, customer service, and financial performance. Techniques for effective employee communication include suggestion programs, employee opinion surveys, and communication from management.

When organizations have restructured from doing layoffs to mergers the results have not proven to be consistent in achieving the desired financial results. Factors such as survivor syndrome, supplemental unemployment benefits and termination pay have contributed to these results.

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LECTURE OUTLINE I.

THE IMPORTANCE OF MANAGING EMPLOYEE SEPARATIONS

The role of HRM is often overlooked in managing employee engagement and communication during a time of employee separation (dismissals, layoffs, quits, resignations, and so on). Who leaves, how they are treated, the cause/nature of the exit, and how remaining employees perceive the process and events all impacts the long-term sustainability of the organization.

II. MANAGING TURNOVER Improperly managed employee exits incur lost costs for the organization, disrupt normal operations, and, in the case of mass exits, derail the focus on larger strategic issues. Turnover is termination of an individual’s employment and the reasons are varied; exits come from both voluntary turnover (e.g. quitting or retiring, or resigning) and involuntary turnover (dismissal/firing or layoff). Organizational tenure is negatively related to quitting, being dismissed or being laid off. Those in “white collar” managerial and administrative positions are also less likely to be laid off, but higher education increases the probability of quitting, as does employment in the service sector.

1. The Cost of Turnover Canadian statistics for the period 1978 – 1985 showed that 30 – 40% of employees were affected by temporary or permanent separation. Over 50% of Canadian organizations admit that they experience difficulties recruiting and retaining talent, which is problematic given that the costs of turnover range from 150% to 250% of salary. Turnover costs can be grouped into four main components:  Separation costs – cost of exit interviews, administrative costs, separation/severance pay  Vacancy costs – increased overtime, temporary workers, loss of sales  Replacement costs – recruitment, selection, relocation expenses, administrative costs  Training costs – formal and informal 2. Voluntary Turnover Voluntary turnover presents an immediate challenge, because it is employee-initiated and therefore often unexpected. It can be functional (bad performers leave) or dysfunctional (good performers leave). The individual-level predictors of voluntary turnover are: low organizational commitment, low role clarity, low tenure, high role conflict, and low overall job satisfaction. Age and marital status are negatively correlated with voluntary turnover, but education is positively linked to voluntary turnover.

Teaching Tip: Ask students how they think is most likely to leave, good or bad performers, and explain why and the ultimate outcome if you don’t manage turnover.

The group- and organizational-level predictors of voluntary turnover are: suboptimal hiring practices, difficult managerial style, lack of recognition, lack of competitive compensation systems, and toxic workplace environments. Unexplained reasons are grouped under the term “hobo phenomena”. While unexpected in terms of specific departures, trends and early

.

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warnings of pending voluntary turnover can be identified through exit interviews, staff surveys and annual HR reviews.

Teaching Tip: Ask students to contact (call or text) a friend or relative who has quit a job in the last year and ask them if it was just one reason or a combination of reasons and what they were. In many cases there is a “final straw”, but the seeds were sown much earlier. a. Quits – voluntary resignation, no legislative requirement for notice period, most often caused by low job satisfaction combined with perceived ease of employment, “cradle to grave” with one organization is gone. (Table 11.1 p. 266) b. Retirement – mandatory retirement was abolished in Canada, avg. age 60 in public sector and 62 in private sector, range 40 – 87+, retirees on call and phased retirement used to manage labour shortage and knowledge transfer, employers required to help with retirement planning (e.g. pre-retirement counselling for groups and individuals) Teaching Tip: China still has a mandatory retirement age for men (55) and a slightly lower one for women (50) but there is fierce debate going on as to whether this should be abolished, modified or maintained. Have students, as class preparation or a follow-up exercise, find an article about the issue that explains the background and why change is being suggested but also resisted. If you have students from China who are willing to speak on the issue ask them in advance to prepare a short 5 minute information session with examples of family members.

3. Involuntary Turnover Involuntary turnover is employer-initiated termination of an employee, usually for performance reasons, but can also be for economic/financial pressures to downsize the organization. Dismissal for performance should not occur until all reasonable steps have been taken to rehabilitate or salvage the employment relationship (through discipline). A fair and just process has three foundations: a. Rules and regulations – written descriptions of unacceptable behaviours/actions (employee handbook, employee orientation, code of conduct) Progressive discipline – a formal system to correct employee performance where penalties increase as the severity and frequency of undesirable behaviours or performance increases such as verbal warning, written warning (s), suspension (paid/unpaid), dismissal, must include appeals process (Figure 11.1 p. 270) b. Dismissal for just cause – no severance, no notice period, no additional payments beyond what has been earned (e.g. wages/salary, earned vacation), onus of proof is on management, examples include disobedience, incompetence, dishonesty, fighting, persistent absence or lateness, employee theft and fraud, and insubordination.

Insubordinate behaviours include direct disregard of supervisor’s authority, deliberate defiance of policy/rules/regulations/procedures, public criticism of supervisor, contemptuous displays of disrespect, disregard for chain of command, participation in/leadership of an employee mutiny.

Teaching Tip: Have students discuss how insubordination is/was dealt with in the places where they have worked/currently work. Use the Ethical Dilemma (p. 2 7 0 ) to decide how to handle situations that are related to prohibited grounds (family status). .

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c. Layoff – temporary withdrawal of employment for business/economic reasons, aka “downsizing/rightsizing/reduction in workforce”; three conditions: no available work, short-term expectation, intent to recall when work reappears; standard seniority-based process for unionized workers, non-standard process for non-unionized workers; Alternatives to layoffs include: voluntary pay reduction, vacation scheduling, voluntary time off, contingent employees, and work-sharing programs.

Teaching Tip: The text defines layoff in terms of temporary separation, but organizations often lay off workers for years with what seems to be no clear vision of when work will once again become available. Some may claim it is to avoid having to pay severance. Is it fair to keep employees in “limbo” like this?

1. Providing Reasonable Notice In Canada, the employer-employee relationship is governed by an employment contract (in writing or based on mutual understanding); this is different from “at will” employment in USA. If contract has end date the employee cannot be dismissed before the end of the contract without just cause, if not (implied contract reasonable notice is needed for either party to terminate the contract. Employees who terminate without notice can be subject to reimbursement fees.

Reasonable notice legislation: Laws that require employers to notify employees in the event that they decide to terminate employees through layoffs (i.e., without just cause). Minimum notice varies according to the size of the layoffs, with smaller layoffs requiring minimum notice based on employee tenure and mass layoffs requiring minimum notice based on total layoff.

Employers wish to avoid layoffs. New approaches are being used, such as voluntary reductions in pay, concentrate vacations in slow times, employees volunteer to leave and work-sharing programmes.

Wrongful dismissal occurs when reasonable notice is not given (except in cases of termination for just cause) and group termination laws call for a longer notice period for mass terminations (e.g. 10 or more, or 25 or more, depending on jurisdiction). Generally speaking, for reasonable notice is 3 – 4 weeks per year of service (more than legal minimum, typical max. 24 months); conditional lump-sums are paid if employee is to cease work immediately. a. Bad-Faith Damages – employers must be candid, reasonable, honest and forthright, not misleading, untruthful or unduly insensitive; applies only to extreme conduct and financial compensation is remedy (Supreme Court, 2008) b. Punitive Damages – for harsh and vindictive treatment of an employee or damages for aggravated or mental distress due to lack of notice; applies only in exceptional cases and for malicious and outrageous wrongful acts Teaching Tip; Have students consult past issues of the Law Reporter section of the Canadian HR Reporter (and possibly other source) to gather recent examples of wrongful dismissal cases (see below).

2. Avoiding Wrongful Dismissal Suits .

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Wrongful dismissal accusations content that the termination was in violation of relevant law (e.g. human rights), the contract of employment (implied or explicit), or the employers’ own dismissal procedures. Steps for avoiding wrongful dismissal suits include:       

Use employment contracts with termination clause and probation period (often 90 days, during which the employee can be dismissed without cause) Document all disciplinary action Have proof for all cases of just cause dismissal Avoid dismissal on birthdays or holidays Use termination letters in all cases, with written settlement offer (if applicable) Schedule termination interviews in a private location and a time of day that minimizes contact with other employees while removing personal belongings Include two members of management (one can be HR) in the termination meeting

Teaching Tip: Ask students if they have seen dismissed employees have to do the “walk of shame” or whether the dismissal was done in private – the employee just disappeared. Use the Ethical Dilemma (p. 277) to discuss misleading reference letters.

If a wrongful dismissal suit is made – carefully review the claim first and investigate for other improper conduct; retain an employment lawyer and ask for a legal opinion on the case’s merits; provide all relevant facts and documentation to the lawyer and discuss letter of reference; avoid allegations of cause (if none exists) and defamatory statements, consider offer to settle or mediation (save time and money) Teaching Tip: Have students contact DIFFERENT employment lawyers to find out the hourly fees and minimum # of hours generally involved in a wrongful dismissal claim. What are some ways that small firms can ensure they have money for a lawyer if they are sued for wrongful dismissal? Yes, this is a finance question in an HR course!

III. Employee Engagement and FAIRNESS IN EMPLOYEE SEPARATIONS Employee engagement is a positive, fulfilling, work-related state of mind characterized by vigour, dedication and absorption (a heightened emotional and intellectual connection), resulting in additional discretionary effort. One of the most effective drivers of employee engagement is effective, honest, and open, and ideally face-to-face communication.

Unfair treatment of terminated employees can produce a “vendetta effect” (increased wrongful dismissal claims) and also affects surviving co-workers. Organizational justice has three components: distributive justice (same behavior, same outcome?), procedural justice (fair/unbiased processes), and interactional justice (maintains dignity and respect). Effective management of employees’ separations includes reasonable notice for exiting employees and maintaining employee engagement of survivors.

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1. Suggestion Programs Provide opportunities for employees to offer well-informed, thoughtful, and creative suggestions on a whole range of organizational issues; implemented suggestions can be accompanied by cash rewards.

2. Employee Opinion Surveys Many firms also administer periodic anonymous employee opinion surveys (e.g.

Employee Feedback System (EFS); work best if done regularly and results communicated to participants.

Employee blogs are another way to obtain feedback, but need clear blogging policy.

Teaching Tip: This is a great opportunity to warn students about the potential consequences of venting about your boss, your co-workers, and/or your organization on social media.

3. Communication from Management Management communication includes traditional newsletters and presentations, but also videos, email, intranets, and senior manager blogs.

Teaching Tip: Survey students to find out how their company communicates, and whether they receive or pay attention to communications from senior management. Do they know the name of their company’s CEO and would they recognize him/her if they walked through the door?

4. The Termination Interview One of the most difficult managerial tasks; employee show disbelief and can act violently, even if ample warnings were provided. Guidelines for the termination interview include:  Plan the interview for a day early in the week (not Friday or pre-holiday, pre-vacation day)  Get to the point  Briefly describe the situation (3 – 4 sentence explanation of reason for termination)  Listen, be ready for any one of five major reactions: hostility & anger, defensive bargaining, formal controlled manner, stoic façade, tears & sadness  Review all elements of severance package and reference letters; avoid additional promises  Identify the next step (e.g. where to go now, who to contact with follow-up questions) Teaching Tip: Discuss why it is so important (for all parties) to have two members of management in the interview. Role plays of termination interviews are a great way to see if students can respond effectively to each of the different reactions.

Easing the pain of Labour Surplus Management – Restructuring organizations from layoffs to mergers have not proven to be consistent in achieving the desired financial results. Factors such as survivor syndrome, supplemental unemployment benefits and termination pay have contributed to these results.

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ETHICAL DILEMMAS

Is it ethical to apply disciplinary action in cases of ongoing absenteeism and tardiness due to family responsibilities? What other approach could be used? (p. 270) While firms cannot function if there are employees who are frequently late or absent, most will agree that disciplinary action should be a last resort, especially in cases where the underlying reason is family responsibilities or something of a similar nature, and not simply a lack of employee commitment or sense of responsibility to the firm.

The approach taken will need to be individualized, based on the employee’s circumstances and needs. Sometimes, for example, a leave of absence may be the best solution – until the crisis at home has been resolved. In other situations, flexible hours or working shorter hours for a period of time may assist the employee to more effectively balance his or her work and family responsibilities.

Is it ethical to “buy out” an undesirable employee with severance pay and a good letter of reference in order to avoid prolonged wrongful dismissal litigation, even if you know the letter is misleading to potential future employers? (p. 277.)

While many firms choose to “buy out” an undesirable employee with severance pay to avoid prolonged wrongful dismissal litigation, most students will argue that providing such an employee with a good letter of reference that will be misleading to potential future employers is not ethical. Although the firm should not stand in the way of the terminated employee’s future employment, deliberately misleading future employers is not an appropriate strategy to adopt. If the employee is insistent that he or she will not accept the severance package unless the firm agrees that it will not provide negative reference information, it is far better to agree that the firm will adopt a “no reference” policy for this particular employee, rather than supplying misleading information that could result in negligent hiring on the part of another firm.

How much time, effort, and money should firms devote to helping “surviving” employees deal with downsizing? With mergers and acquisitions?

Given the profound effects on people and the organizations, much time, effort, money and resources should be utilized to assist survivors.

KEY TERMS

dismissal Involuntary termination of an employee's employment. (p.269) dismissal for just cause An employer-initiated termination based on an employee’s poor behaviours, in these situations, no severance, reasonable notice periods, or additional payments beyond what he employee has already earned are owed. (p. 269) distributive justice Fairness of a decision outcome. (p. 274) employee engagement The emotional and intellectual involvement of employees in their work, such as intensity, focus, and involvement in his or her job and organization. (p .274)

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employee opinion surveys Communication devices that use questionnaires to ask for employees’ opinions about the company, management, and work life. (p. 276) group termination laws Laws that require an employer to notify employees in the event that they decide to terminate a group of employees. (p.272294) insubordination Wilful disregard or disobedience of the boss's authority or legitimate orders; criticizing the boss in public. (p.271) interactional justice Fairness in interpersonal interactions by treating others with dignity and respect. (p.274) involuntary turnover Employer-initiated termination of employment, such as dismissal or layoff. (p. 266) layoff The temporary withdrawal of employment to workers for economic or business reasons. (p. 271) phased retirement Potential retirees gradually reduce the number of hours worked per week over time. (p. 268) pre-retirement counselling Counselling provided to employees some months (or even years) before retirement, which covers such matters such as benefits advice, second careers, and so on. (p. 268) procedural justice Fairness of the process used to make a decision. (p. 274) progressive discipline A formal system to correct employee performance where penalties increase as the severity and frequency of undesirable behaviours or performance increases (p.

270) quitting Voluntary employee-initiated resignation. (p. 267) reasonable notice legislation Laws that require employers to notify employees in the event that they decide to terminate employees through layoffs (i.e., without just cause). Minimum notice varies according to the size of the layoffs, with smaller layoffs requiring minimum notice based on employee tenure and mass layoffs requiring minimum notice based on total layoff (p. 272) retirees on call A program where retirees can continue to work on a part-time or as needed basis post-retirement. (p. 268) severance pay Payable by employers under Ontario and/or federal jurisdiction to employees terminated for reasons other than cause, in addition to the reasonable notice payment or period.

Severance pay is often based on the employee’s length of service and other factors (such as the total size of the annual company payroll). (p. 279) survivor syndrome A range of negative emotions experienced by employees remaining after a major restructuring initiative, which can include feelings of betrayal or violation, guilt, or detachment, and can result in stress symptoms, including depression, increased errors, and reduced performance. (p. 278)

supplemental unemployment benefits (SUBs) A top-up of EI benefits to bring income levels .

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closer to what an employee would receive if on the job. (p. 278) termination interview The interview in which an employee is informed of the fact that he or she has been dismissed. (p.277) termination pay Payment of wages from the employer to the employee at the time of involuntary termination for reasons other than cause. The amount paid must meet the minimum-notice-period payments established by labour legislation (if payment is given in lieu of reasonable notice) or follow guidelines established in common law precedent. (p. 278) turnover The termination of an individual’s employment with an organization. (p. 265) voluntary turnover Employee-initiated termination of employment, such as quits, retirement, or resignation. (p.266) wrongful dismissal An employee dismissal that does not comply with the law or does not comply with a written or implied contractual arrangement. (p.272)

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REVIEW AND DISCUSSION QUESTIONS (p. 280) 1. Explain why organizations today are concerned with voluntary turnover. (p. 266-268) Voluntary turnover is employee initiated, so often comes unexpectedly disrupting succession plans and business operations. In addition, exiting employees may be leaving for competing firms and the organization may lose the best and brightest, who have knowledge and skills that are difficult to replace.

2. Describe the issues of reasonable notice in layoffs and how it relates to employee perspectives of fairness or intent to file wrongful dismissal lawsuits. (p. 272-273) In Canada employers cannot lay off workers “at will”, and group termination laws call for a longer period of notice when large groups of employees are being laid off, in recognition of the challenges that they may face in obtaining new employment. Springing a layoff on a group of workers is subject to a wrongful dismissal suit in regards to a collective bargaining agreement (if unionized), or an implied or explicit employment contract. This would be seen as procedural and possibly interactional injustice and research shows that unfair treatment tends to increase the number of wrongful dismissal claims.

3. Explain how fairness in employee termination can be ensured, particularly the prerequisites to progressive discipline guidelines. (p. 269-270) The purpose of discipline is to encourage employees to adhere to rules and regulations. Courts have repeatedly articulated the rights of employees to fair treatment not only during the term of employment, but also during the discipline and termination process. A fair and just discipline process is based on three foundations: rules and regulations which address things like theft, drinking on the job, and insubordination; a system of progressive penalties which includes steps such as verbal warnings, written warnings, suspension, and discharge; and an appeals process to ensure that discipline is meted out fairly and equitably.

4. What are the various steps in the termination interview? (p.277278) Guidelines for the termination interview include:  Plan the interview for a day early in the week (not Friday or pre-holiday, pre-vacation day)  Get to the point  Briefly describe the situation (3 – 4 sentence explanation of reason for termination)  Listen, be ready for any one of five major reactions: hostility & anger, defensive bargaining, formal controlled manner, stoic façade, tears & sadness  Review all elements of severance package and reference letters; avoid additional promises  Identify the next step (e.g. where to go now, who to contact with follow-up questions) 5. Discuss some of the issues that should be covered when communicating effectively with employees in the organization. (p. 278-298) Communication with employees should be honest, open, and forthright, use multiple modalities (newsletters, presentations, videos, blogs, and so on), and provide a feedback channel for employees to communicate.

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CRITICAL THINKING QUESTIONS (p. 280) 1. Should a company consider providing termination packages to employees who have ongoing disciplinary problems rather than taking the time and effort to go through the progressive discipline process?

The answer to this depends on the nature of the disciplinary problem at hand. For example, some disciplinary issues require immediate termination such as theft, insubordination, violence at work, etc. On the other hand, most disciplinary issues are performance related such as absenteeism, failing to meet job expectations, etc. If employees are going through such issues, it is important to consider progressive disciplinary action before providing a termination package. It’s important to bring to the attention of the employee what the issues are and give him/her a chance to improve performance levels.

There are situations where employees get disgruntled when progressive disciplinary action is taken. Some employees do not respond positively to such action and can create trouble within the team environment they are in. If this happens, it is best to terminate employment because further action can lead to further deterioration of performance/morale from the part of the employee, which can create a negative work environment for other employees and a decline in general employee morale and performance.

2. Assume that in one department of your organization the voluntary turnover rate is double the rate that other departments have. What factors might contribute to this? What issues would you investigate? Is voluntary turnover necessarily bad and in need of correction?

Factors that might explain differences in rate of turnover include: age of workers in that department, management style, type of occupation, and the status of that department in the organization. The proportion of retirement age and also relatively young workers would predict higher turnover. People in that department might be “jumping ship” because of a toxic manager.

Alternatively, if the workers in that department are in high demand in the external labour market then they may be leaving for better opportunities elsewhere, possibly going with a popular manager who took a job elsewhere and wants their team with them. Last, but not least, turnover could be high because this is a low status department and people take jobs in this department in order to gain organizational/work experience but “post out” as soon as they can. Voluntary turnover is not necessarily bad if good people are staying with the organization in other roles and people who are not a good fit are leaving. However, too much “churn” is disruptive to business operations and customer satisfaction. Those left behind have to take on additional work until the replacement is hired and is up to speed.

3. Discuss the options presented as alternative to layoffs. Which of these would appeal to you, your family members, and friends? Why? What challenges do these alternatives pose to organizations?

Alternative to layoffs include:  Voluntary reduction in pay, voluntary time off, use of contingent workers, HRSDC’s Work Sharing Program.  Student preferences will vary.

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The challenges to organizations include: too many people wanting to take voluntary time off at the same time, inability to determine how workers will be needed for one week to the next.

EXPERIENTIAL EXERCISES (p. 280-281) 1. Working individually or in groups, obtain copies of the student handbook for a college or university and determine to what extent there is a formal process through which students can air grievances. Would you expect the process to be effective? Why or why not? Based on contact with students who have used the grievance process, has it been effective?

Answers to this question will vary according to the college or university handbook chosen. Most educational institutions have a formal student appeals process, although in some, it only pertains to grades. In assessing the program's effectiveness, helpful hints can be found in the textbook. For example, is the grievance process accessible to every student? Is it easy to use and are students encouraged to use it? Grievance procedures can only be effective if there is an atmosphere of trust, complainants are guaranteed due process, steps and time limits are specified, confidentiality is guaranteed to the greatest extent possible, and there is provision for impartial investigation.

2. Working individually or in groups, determine the nature of the academic discipline process in your college or university. Does it appear to be an effective one? Based on this chapter, should any modification be made to the student discipline process?

Most educational institutions have a formal academic discipline policy and procedure. To determine its effectiveness and assess whether any modifications are required, the textbook should be used for reference. An effective discipline process is based on clearly specified rules and regulations, a system of progressive penalties, and an appeals process.

3. A computer department employee made an entry error that ruined an entire run of computer reports. Efforts to rectify the situation produced a second batch of improperly run reports. As a result of the series of errors, the employer incurred extra costs of $2,400, plus a weekend of overtime work by other computer department staffers.

Management suspended the employee for three days for negligence, and also revoked a promotion for which the employee had previously been approved.

Protesting the discipline, the employee stressed that she had attempted to correct her error in the early stages of the run by notifying the manager of computer operations of her mistake. Maintaining that the resulting string of errors could have been avoided if the manager had followed up on her report and stopped the initial run, the employee argued that she had been treated unfairly; she was being severely punished but the manager had not been disciplined at all even though he had compounded the problem. Moreover, citing her “impeccable” work record and management’s acknowledgment that she had always been a “model employee,” the employee insisted that the denial of her previously approved promotion was “unconscionable.”

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(a) In groups, determine what your decision would be if you were the arbitrator. Why? (Your instructor will inform you of the actual arbitrator’s decision when you discuss this exercise in class.) (b) Do you think that the employer handled the disciplinary situation correctly? Why? What would you have done differently?

Answers to this question will require an understanding of the aspects of fair disciplinary procedures.

A fair and just discipline process involves due process, which means that the accused is entitled to a fair and thorough investigation. Such an investigation would confirm or contradict the employee’s assertion that she had tried to correct the error by reporting the problem to her manager and that he had failed to follow up.

Another element of a fair and just discipline process is a system of progressive penalties that are reasonably related to the misconduct and to the employee’s past work history. A three-day suspension and the loss of a promotion would be considered severe disciplinary action for an employee with an exemplary work record up to this incident. In addition, imposing a suspension and the loss of a promotion means that the employee was, in effect, punished twice for the same error. The fact that the manager did not receive any type of discipline may also lead one to believe that discipline is not applied in a consistent or non-discriminatory manner.

An arbitrator would rule that the discipline imposed was far too harsh, given the employee’s past record, her attempt to correct the problem in the early stages, and her manager’s failure to follow up on her report. On the other hand, the employer incurred substantial costs because of the employee’s error, something that deserves to be penalized. To determine an appropriate penalty, the arbitrator would take into consideration the way in which similar incidents have been handled in the past.

In this particular case, management testified that other employees had been issued three-day suspensions for similar infractions in the past, testimony that the union did not challenge. Given all of the above facts, the arbitrator upheld the three-day suspension, but ordered that the employee be awarded the promotion for which she had previously been approved.

4. You are HR manager for a small company that has just bought another company in your field. You learned of the purchase only when you were asked to attend a meeting this morning. Somehow, between now and noon tomorrow, you must come up with a plan to communicate the purchase to both your and the other organization’s employees. What do you think will be the main concerns of employees in each company? Describe your first steps and the plan for the transition period between now and the closing date of purchase.

Many students will expect that this situation will occur exactly as stated, few will question why the HR manager would not have had some input into the HR ramifications of the purchase prior to the agreement being reached but this is an important point as it speaks to the relation of HR to other roles in this organization.

As this purchase is a surprise to you, it is likely to be a surprise to the employees and they are likely to be most concerned about the specific ramification for them, how their job will be impacted and their own job security, particularly since both companies are in the same field.

The communication must be straightforward in addressing their concerns in an honest fashion. .

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That said, you must first gain a clear understanding of what this purchase means and what changes to the business operations are anticipated by management. Employees should be reassured that they will be informed of upcoming changes. If possible, reassure employees about their position in the company and their value to the company, but this can only be done if there will not be redundancies. Otherwise, inform people how changes will be determined and what the next steps will be. Set up an interactive mechanism to address employee concerns and any rumours that start. If growth opportunities exist, definitely highlight this Given that you have not been in the loop yourself, this will be a challenge but the communication must be honest and as open as possible, otherwise the organization risks building distrust and cynicism among employees

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CHAPTER 12 LABOUR RELATIONS LEARNING OUTCOMES DISCUSS the key elements of Canada’s labour laws.

OUTLINE the five steps in the labour relations process.

DESCRIBE the five steps in a union organizing campaign.

OUTLINE the three ways to obtain union recognition.

DESCRIBE the three steps in the collective bargaining process.

EXPLAIN the typical steps in a grievance procedure.

DESCRIBE the impact that unionization has had on human resources management.

CHAPTER SUMMARY Canada’s labour laws provide a common set of rules for fair negotiations, which helps to prevent labour disputes from inconveniencing the public. Tripartite labour relations boards balance employees’ rights with employers’ management rights. The five steps in the LR process are: employees’ decision to seek collective representation, union organizing campaign, official union recognition, negotiation of collective agreement, and day-to-day contract administration. The five steps in the organizing process include: employee-union contact, initial meeting, formation of in-house organizing committee, organizing campaign, and outcome (certification, recognition, or rejection). Three means of recognition are voluntary recognition, regular certification, and a pre-hearing vote. Three steps in the collective bargaining process are negation preparation, face-to-face negotiation, and obtaining approval of negotiated agreement. Third party assistance and strike/lockout or interest arbitration may also be needed. A grievance begins in writing to the immediate supervisor, then to an HR/LR specialist, then to senior management, and, if necessary to an arbitrator for final and binding rights arbitration.

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LECTURE OUTLINE I.

INTRODUCTION TO LABOUR RELATIONS

Workers join labour unions to influence HR policies and practices (pay, benefits, and so on), to achieve greater control over jobs, greater job security, improve working conditions, increase job satisfaction and meet needs for affiliation. Labour relations involve ongoing interactions between labour union representatives and management in organizations. Collective agreements (union contract) negotiated through a collective bargaining process dictate terms and conditions of employment for members of a bargaining unit, reducing managerial discretion and flexibility. Labour relations (LR) strategy can be one of union acceptance or union avoidance (union substitution or union suppression).

1. Canada’s Labour Laws Canada’s labour laws have two general purposes, which are to:  Provide a common set of rules for fair negotiations  Protect the public interest by preventing the impact of labour disputes from inconveniencing the public Common characteristics of LR legislation across jurisdictions are:  Union certification procedures  Minimum term of one year for collective agreements  Strike and lockout procedures  Prohibition on strikes and lockouts during the life of a collective agreement  Requirement for final and binding arbitration in rights (interpretation) disputes  Prohibition on “unfair practices” by labour and management  Establishment of a tripartite labour relations board (LRB) or equivalent 2. The Labour Movement in Canada Today Two distinct philosophies have been seen throughout the history of the union movement: business unionism and social (reform) unionism. Business unionism’s primary goal – obtain economic benefits and improvement treatment for its members (business unionism).

Social (reform) unionism is involved in influencing government policies.

Teaching Tip: Have students look up different labour union websites to see what type of policy issues they are working on for their members.

3. Types of Unions Worker Type: craft unions and industrial unions Geographical scope: local, national, and international Labour congress affiliation: CLC, CSN/CNTU, AFL-CIO The basic unit of the labour movement in Canada is the union local, formed in a particular location. A union local serves as an administrative unit of a provincial, national, or international union. A union steward represents members of a local bargaining unit (e.g. UNIFOR Local 555) and interacts with HR and front-line supervisors.

Teaching Tip: Many of the large unions (e.g. UNIFOR, Teamsters) are representing members from .

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industries unrelated to their original membership base. Have students pick an occupation and find out what union is representing them in labour negotiations.

4. Membership Trends 28.8% of Canadian employees were unionized (2014), but declining trend (See Table 12.1, p.286); part of reason is decline of manufacturing, increase in service sector and more effective HR practices. Canadian decline less than other countries due to 3 factors: a. Global competition – unions have made concessions in Canada to keep jobs b. Demographics – retention of aging workforce achieved through management. concessions – unions are taking aim at youth and visible minorities c. Unionization of white-collar employees – service sector, public sector, educational sector Teaching Tip: The CBC produced a great set of interactive charts that track changes in union membership up to 2011 (e.g. by industry, by sector, by gender, by age, and so on). http://www.cbc.ca/news/interactives/labour-demographics/

II. THE LABOUR RELATIONS PROCESS The five steps to the LR process are shown in Fig. 12.1 (p. 289) and described below.

Step 1: Desire for Collective Representation Three reasons why individuals join unions are: dissonance-based reasons (unmet expectations), utility-based reasons (cost-benefit), and political-ideological reasons.

Demographics are not a consistent predictor except for those over 60 and black workers. Wage rates are higher for unionized workers and help females achieve pay equity. Dissatisfaction plus powerlessness beliefs are strongest influences.

Teaching Tip: Generate a lively debate on recent actions by teachers unions. Why do these otherwise fairly well paid workers feel they need collective representation? What are their issues?

Step 2: Union Organizing Campaign Five steps involved in a union organizing process are:  Employee-union contact  Initial organizational meeting (which occurs outside of the workplace)  Formation of an in-house organizing committee  The organizing campaign including authorization cards  The outcome (certification, recognition or nothing) a. Signs of organizing activity – disappearance of lists/directories, increased pay/benefits inquiries, questions about position on unions, increase in complaints, change in lunch/coffee groups, increased popularity of informal leaders, cessation of conversation, change in behaviour towards management, strangers in parking lot, union materials (table 12.2, p.

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b. Employer response to an organizing campaign – often led by HR (with external advice), supervisory training is essential, obtain union info and plan communication strategy, do not violate employer rights (e.g. no unexpected wage hikes or promotions, no mandatory antiunion meetings) Step 3: Union Recognition There are there ways that a union can obtain recognition and bargaining rights can also be terminated. a. Voluntary recognition – rare, union acceptance strategy (saves time and money) b. Regular certification – automatic certification by LRB based on sufficient authorization cards (four out of every 5 applications), or representation vote supervised by LRB c. Pre-hearing votes – used when evidence of unfair labour practices early in campaign d. Termination of bargaining rights – decertification through worker application (secret- ballot vote) held by LRB or union declines to represent anymore (termination on abandonment) Step 4: Collective Bargaining Collective bargaining is the process by which a formal collective agreement is established between management and labour. Good faith bargaining involves communication & negotiation, matching proposals with counter-proposals, and making every reasonable effort to arrive at an agreement. a. Preparation for negotiations – planning bargaining strategy & process, assembling data (economic & bargaining trends, past grievances, past items not previously achieved, current wage rates and benefits, competitor actions, costs), and formation of negotiation team who presents initial proposal (Figure 12.2 p. 294) b. Face-to-face negotiations  Location – generally neutral and offsite plus extra room for caucus sessions  Frequency & Duration – as often & as long as either/both parties desire  Initial session – establishes climate, involves exchange of demands (if not already done) and establishment of rules & procedures  Subsequent sessions – arguments for own demands, arguments against others’ demands, resolution can only be reached if demands fit within bargaining zone (see Figure 12.3, p. 2 9 5 ). Three types of bargaining: distributive, integrative, or mutual gains (interest-based); latter requires more training and is difficult to implement but becoming more popular The contract approval process – reduced to memorandum of settlement for submission to constituent groups; to senior management team for approval and to bargaining unit members for ratification (secret ballot vote often required). Then formal collective agreement is written up in full.

Copies of the new collective agreement are produced for union local members as well as managers in the organization.

c. Third-party assistance and bargaining impasses – as needed conciliation and/or .

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mediation may be used, and conciliation is often required before strike/lockout.

Strike often requires a strike vote by members to signal support for possible strike.

Members can also picket or boycott to put pressure on management. Strikes are illegal during a collective agreement and at any time for essential workers.

Lockouts are not common in Canada but are legally permissible – can affect both unionized and non-unionized workers.

Arbitrators (single or 3 person board) can investigate an interest dispute and through interest arbitration impose a final and binding settlement regarding the terms of a collective agreement; used in back-to-work cases and for essential workers who cannot strike. d. The collective agreement: Typical provisions  Union recognition clause  Union security/check off clause (closed shop, union shop, modified union shop, maintenance-of-membership arrangement, Rand formula, open shop)  No-strike-or-lockout provision  Management rights clause  Arbitration clause Teaching Tip: The ethical dilemma on p. 301 deals with the Rand formula.

Step 5: Contract Administration The bulk of labour-management relations occur through day-to-day contract administration, because differences of opinion arise regarding application and interpretation of the collective agreement. a. Seniority – unions favour seniority (objective) over merit/ability to avoid favouritism b. Discipline – requirement for proof of just cause for disciplinary action, issues include both whether misconduct occurred and whether penalty/sanction was appropriate c. Grievance resolution and rights arbitration – a grievance is a written allegation of contract violation filed by either individual member or the union (policy grievances) settled through multi-stage grievance procedure (see Fig. 12.4, p. 304) Grievances related to interpretation or administration of the collective agreement are known as rights disputes and if not resolve internally are resolved through rights arbitration, which can involve more or less severe penalties.

III. THE IMPACT OF UNIONIZATION ON HRM A union has an impact on the way in which managers perform their HR responsibilities; when union leader are treated as partners, they can provide a great deal of assistance with HR functions.

Unionized organizations tend to have an LR specialist or section, and in large firms a labour relations or industrial relations division is set up separate from the HR division. Management has less freedom but more responsibility for understanding and administering the agreement include more documentation in the case of grievances and hearings. All HR policies must be consistent with the collective agreement; union representatives are often involved in policy formulation. .

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DISCUSSION BOX SUMMARIES WORKFORCE DIVERSITY: Collective Agreement Puts Aboriginals First (p. 285) This box describes the impact collective agreement at Voisey’s Bay Nickel Company that ensures that the Innu and Inuit people, regardless of whether or not they are employees, are always first in line whenever a position, a training opportunity, or a promotion comes up. It also discusses the effects of the Impacts and Benefits Agreements (IBAs) on Aboriginal benefits, training, and employment opportunities. This ensures skill development and retention of wages in the local community.

STRATEGIC HR: UFCW’s Social Media Campaign to Educate Young Canadian Workers (p. 286) UFCW (United Food and Commercial Workers Canada) represents more than a quarter of a million Canadians working in every sector of the food industry, in retail, health care, hospitality, security, financial services and related manufacturing sectors of the economy. They have a number of educational programmes aimed at young workers, such as Incite SAME and internships. They use various social media such as Twitter, Facebook, Instagram and so on.

Teaching Tip: Have students look up and report on these programmes through the various social media sites.

ETHICAL DILEMMAS Knowing that head office plans to close the facility should a unionization bid be successful, how should you as a manager respond to inquiries from employees about the impact of a union? (p. 291) The best course of action is to answer honestly, stating the belief that the firm wishes to remain unionfree and restate the benefits of being a non-unionized worker. If you are not a senior manager then you should not comment on plans to close the facility as this may or may not actually happen.

If employees ask about closure rumours they should be referred to Human Resources who will work with senior management to prepare a response. Employers have the right to hold an optional meeting to inform employees of the benefits of staying non-unionized but are not allowed to make threats or promises.

Is it ethical for a firm to close the establishment during a labour dispute if that results in non-striking employees being laid off? (p. 300) A strike situation is never easy on an employer. Strikes cause serious losses to business in terms of loss of production, loss of valued clients, loss of reputation, and many more. If the bargaining power of the union is high during a strike situation, the employer will be at a disadvantage and that could potentially lead to serious financial losses which could threaten the viability of the business. If a company is unable to sustain itself during a strike, it may decide to close the business resulting in the loss of jobs for those employees who were not involved in strike action. Though this is unfair on the part of the employees, the company has the right to decide whether it wants to continue the business.

However, this should be done as a last resort. One could also argue that non-unionized workers should be aware that the presence of unionized colleagues means that they could be affected by labourmanagement relations.

Given the fact that some workers have religious or other objections to unions, is the Rand formula ethical? (p. 301) .

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The Rand formula is the most popular union security arrangement. It does not require union membership, but does require that all members of the bargaining unit pay union dues. It is a compromise arrangement that recognizes the fact that the union must represent all employees in the bargaining unit and should therefore be entitled to their financial support, but also provides the choice to join or not join the union. As a result, those who have religious or other objections to unions have the option of joining or not joining the union subject to them paying union dues, which can be considered as a fair compromise. Because gains such as salary/wage increases benefit everyone in the bargaining unit the union cannot allow free-loaders.

KEY TERMS arbitration The use of an outside third party to investigate a dispute between an employer and union, and to impose a settlement. (p. 300) authorization card A card signed by an employee that indicates his or her willingness to have the union act as his or her representative for purposes of collective bargaining. (p. 290) bargaining unit The group of employees in a firm, plant, or industry that has been recognized by the employer and certified by a Labour Relations Board (LRB) as appropriate for collective bargaining purposes. (p. 283) bargaining zone The area defined by the bargaining limits (resistance points) of each side, in which compromise is possible, as is the attainment of a settlement satisfactory to both parties. (p. 295) boycott An organized refusal of bargaining unit members and supporters to buy the products or use the services of the organization whose employees are on strike, in an effort to exert economic pressure on the employer. (p. 298) business unionism The activities of labour unions focusing on economic and welfare issues, including pay and benefits, job security, and working conditions. (p. 284) caucus session A session in which only the members of one’s own bargaining team are present. (p. 294) certification The procedure whereby a labour union obtains a certificate from the relevant LRB) declaring that the union is the exclusive bargaining agent for a defined group of employees in a bargaining unit that the LRB considers appropriate for collective bargaining purposes. (p. 292) collective bargaining Negotiations between a union and an employer to arrive at a mutually acceptable collective agreement. (p. 283) collective bargaining agreement (union contract or CBA) A formal agreement between an employer and the union representing a group of employees, regarding terms and conditions of employment. (p. 283) conciliation The often mandatory use of a neutral third party who has no direct input on the negotiation process to help an organization and the union representing a group of its employees communicate more effectively with the aim of coming to a mutually satisfactory collective agreement. (p. 297) .

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craft union Traditionally, a labour organization representing workers practising the same craft or trade, such as carpentry or plumbing. (p. 284) decertification The process whereby a union is legally deprived of its official recognition as the exclusive bargaining agent for a group of employees. (p. 293) distributive bargaining A win–lose negotiating strategy, where one party gains at the expense of the other. (p. 295) grievance A written allegation of a contract violation, filed by an individual bargaining unit member, the union, or management. (p. 303) industrial union A labour organization representing all workers eligible for union membership in a particular company or industry, including skilled trades people. (p. 284) integrative bargaining A negotiating strategy in which the possibility of win–win, lose–win, win– lose, and lose–lose outcomes are recognized, and there is acknowledgement that achieving a win– win outcome will depend on mutual trust and problem solving. (p. 296) interest arbitration The imposition of the final terms of a collective agreement. (p. 300) interest dispute A dispute between an organization and the union representing its employees over the terms of a collective agreement. (p. 300) labour–management relations The ongoing interactions between labour unions and management in organizations. (p. 283) labour union (union) An officially recognized association of employees, practising a similar trade or employed in the same company or industry, who have joined together to present a united front and collective voice in dealing with management. (p. 283) local A group of unionized employees in a particular location. (p. 285 lockout Temporary refusal of a company to continue providing work for bargaining unit employees involved in a labour dispute, which may result in closure of the establishment for a time. (p. 299) mediation The often voluntary use of a neutral third party who has direct input on the negotiation process to help an organization and the union representing its employees to reach a mutually satisfactory collective agreement. (p. 297) memorandum of settlement A summary of the terms and conditions agreed to by the parties, which is submitted to the constituent groups for final approval. (p. 297) mutual gains (interest-based) bargaining A win–win negotiating approach, based on training in the fundamentals of effective problem solving and conflict resolution, in which the interests of all stakeholders are taken into account. (p. 296) picket Stationing groups of striking employees, usually carrying signs, at the entrances and exits of the struck operation to publicize the issues in dispute and discourage people from entering or leaving the premises. (p. 298) pre-hearing vote An alternative mechanism for certification, used in situations in which there is .

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evidence of violations of fair labour practices early in the organizing campaign. (p. 292) ratification Formal approval by secret-ballot vote of the bargaining unit members of the agreement negotiated between union and management. (p. 297) representation vote A vote conducted by the LRB in which employees in the bargaining unit indicate, by secret ballot, whether or not they want to be represented, or continue to be represented, by a labour union. (p. 292) rights arbitration The process involved in the settlement of a rights dispute. (p. 303) rights dispute A disagreement between an organization and the union representing its employees regarding the interpretation or application of one or more clauses in the current collective agreement. (p. 303) seniority Length of service in the bargaining unit. (p. 302) social (reform) unionism Activities of unions directed at furthering the interests of their members by influencing the social and economic policies of governments at all levels, such as speaking out on proposed legislative reforms. (p. 284) strike The temporary refusal by bargaining unit members to continue working for the employer. (p. 298) strike vote Legally required in some jurisdictions, it is a vote seeking authorization from bargaining unit members to strike if necessary. A favourable vote does not mean that a strike is inevitable. (p. 298) unfair labour practice A contravention of labour relations legislation by an employer, a union, or an employee (p. 284) union local A group of unionized employees in a particular location. (p. 285) union security clause The contract provisions protecting the interests of the labour union, dealing with the issue of membership requirements and, often, the payment of union dues. (p. 300) union steward A union member elected by workers in a particular department or area of a firm to act as their union representative. (p. 285) wildcat strike A spontaneous walkout, not officially sanctioned by the union leadership, which may be legal or illegal, depending on its timing. (p. 299) REVIEW AND DISCUSSION QUESTIONS (p. 306) 1. Explain the difference between a craft union and industrial union. (p. 284-285) All the early trade unions in Canada were craft unions—associations of persons practising the same craft or trade (for example, carpenters or bricklayers). Examples in today’s workforce include the United Association of Plumbers and Pipefitters or the Ontario Nurses’ Association. An industrial union is a labour organization comprising all the workers eligible for union membership in a particular company or industry, irrespective of work performed such as Unifor.

2. Explain how either globalization or demographic challenges are influencing today’s union movement in Canada (p. 288) .

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Challenges facing the union movement today are global competition and changing demographics.

Unions have had to make concessions in order to keep jobs in Canada, but management has also had to make concessions to retain an aging skilled workforce. Globalization is transforming the dynamics of labour relations in Canada such that employers are being forced to become more militant, and unions are struggling to maintain their influence at the bargaining table. Some unions face the difficult choice of negotiating concessions or watching jobs go to lower-cost countries. The focus of union collective bargaining efforts must align with the workplace demographics. The aging of the workforce and pending labour shortage affect unions as well as HR managers. It has been suggested that unions and management may need to work together to attract and retain workers. Unions have been making inroads with young workers and visible minorities.

3. Describe two key signs that managers should watch for as indications of a possible union organizing campaign. (p. 291)  disappearance of employee lists or directories.  more inquiries than usual about benefits, wages, promotions, and other HR policies and procedures.  questions about their opinions of unions.  an increase in the number or nature of employee complaints or grievances.  a change in the number, composition, and size of informal groups at lunch and coffee breaks.  the sudden popularity of certain employees (especially if they are informal leaders)  the sudden cessation of employee conversation when a member of management approaches, or an obvious change in employees’ behaviour towards members of management, expressed either formally or informally the appearance of strangers in the parking lot the distribution of cards, flyers, or pro-union buttons.

4. Using Figure 12.2 in the text, explain why three management or three union issues seen in this diagram may be important negotiating points in an upcoming round of collective bargaining. (p. 294) Students have a number of different and overlapping issues that they can discuss.

5. Explain how two union security clauses help to “secure” the ongoing presence of a union in a company. (p 300-301) Union security clause is the contract provisions protecting the interests of the labour union, dealing with the issue of membership requirements and, often, the payment of union dues. There are 6 forms of union security clauses: 1. Closed shop is the most restrictive form of union security. Only union members in good standing may be hired by the employer to perform bargaining unit work. This type of security clause is common in the construction industry.

2. Union shop – membership and dues payment are mandatory conditions of employment.

Although individuals do not have to be union members at the time that they are hired, they are required to join the union on the day on which they commence work or on completion of probation.

3. Modified union shop – the individuals who were bargaining unit members at the time of certification or when the collective agreement was signed are not obliged to join the union, although they must pay dues, but all subsequently hired employees must do both.

4. Maintenance-of-membership arrangement – individuals voluntarily joining the union must remain members during the term of the contract. Membership withdrawal is typically permitted during a designated period around the time of contract expiration. Dues payment is generally mandatory for all bargaining unit members.

5. Rand formula is the most popular union security arrangement. It does not require union membership, but does require that all members of the bargaining unit pay union dues. It is a .

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compromise arrangement that recognizes the fact that the union must represent all employees in the bargaining unit and should therefore be entitled to their financial support, but also provides the choice to join or not join the union.

6. Open shop is a type of security arrangement whereby union membership is voluntary and nonmembers are not required to pay dues.

6. Explain two forms of third-party intervention known as conciliation and mediation. Then, differentiate when interest arbitration and rights arbitration are used in the labour management process as seen in Figure 12.1 in the text. (p. 297-298, 300, 303) Conciliation is the use of a neutral third party to help an organization and the union representing a group of its employees to come to a mutually satisfactory collective agreement.

The only means available to a conciliator to bring the parties to an agreement is through persuasion.

The conciliator is not permitted to have any direct input into the negotiation process or to impose a settlement. Mediation is the use of a neutral third party to help an organization and the union to come to a collective agreement. A mediator role is active and is permitted to have direct input into the negotiation process but unable to impose a settlement. On the other hand, arbitration is the use of an outside third party to investigate a dispute between an employer and union and to impose a settlement. The arbitrator’s decision is final and binding and cannot be changed or revised.

Interest arbitration is the position of the final terms of a collective agreement. They settle interest disputes regarding the terms of a collective agreement. This is legally mandated for workers who are not permitted to strike. Rights arbitration is the process involved in resolving grievances relating to the interpretation or administration of the collective agreement.

CRITICAL THINKING QUESTIONS (p. 307) 1. Are unions relevant in today’s world? Suggest two reasons in favour or two reasons against their role in contemporary workplaces. Students might discuss the ongoing need for recognition of diversity, equity and equality in the workplace given the impact of globalization and demographic changes in Canada. They might discuss that managers do still have poor practices and not every organization has an HR department so need a union to ensure rights are being met. They might discuss there is no longer a need given the increase of government legislation that employers must follow, the required pay and benefits requirements. Also, employees know more than ever before due to the internet and social media what counterparts are receiving in other organizations so HR needs to ensure that their companies are offering similar pay and benefits.

2. “If supervisors communicate effectively with employees, deal with their concerns, and treat them fairly, employees are far less likely to be interested in forming or joining a union.” Do you agree or disagree with this statement? Why? The work environment that is least conducive to unionization is one that is participative and where the company acknowledges the individual, and where managers understand their obligations to workers. Even the most experienced union organizer will find it difficult to organize a well-managed, successful organization. Firms in which supervisors ignore employee well- being and treat employees unfairly are more likely to support a union movement. Employees often aim to overcome their individual lack of power and improve their quality of work life by organizing a union and bargaining with the employer collectively.

Additional evidence to support this statement can be found in numerous research studies. Key reasons .

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for unionizing include: job dissatisfaction, especially with pay, benefits, and working conditions; lack of job security; unfair or biased administration of policies and practices; perceived inequities in pay; and lack of a desired amount of influence or participation in work- related decisions. While supervisors do not determine the compensation package, they are responsible for planning labour needs, selecting employees, orienting and training employees, managing compensation, ensuring effective two-way communication, ensuring fair treatment, appraising performance fairly, handling complaints and grievances fairly, and ensuring compliance with human rights and occupational health and safety legislation.

3. Two possible approaches to labour relations are union acceptance and union avoidance.

Determine which of these strategies seems to have been adopted in a firm in which you have been employed or with which you are familiar. Provide evidence to back up your answer.

This question can be modified to ask them to interview someone who works in a unionized firm or a firm in which employees tried to form a union. Answering this question requires an understanding of the material on management’s labour relations strategy. Managers in firms choosing a union acceptance strategy view the union as the legitimate representative of the firm's employees. This strategy is likely to result in labour–management cooperation and a harmonious working relationship. Managers select a union avoidance strategy when they believe that it is preferable to operate in a non-unionized environment. There are two approaches that firms can adopt to avoid unionization – one proactive (union substitution) and the other employing hardball tactics (union suppression). Union substitution, also known as proactive HRM, involves being so responsive to employees' needs that there is no incentive to unionize. Managers ensure that the treatment employees receive, as well as their pay, benefits, and working conditions, are equal to or better than that in comparable unionized firms. Firms adopt a union suppression approach when there is a desire to avoid a union at all costs. "Hardball tactics,” which may or may not be legal, are employed to prevent a union from organizing the firm's employees or to get rid of an existing union.

4. As the l a b o u r r e l a t i o n s specialist, what steps would you take in order to prepare the firm and management team if you believed that a strike was a possible outcome of the upcoming negotiations?

It is important to identify what key areas under negotiations could lead to potential strike action, and prepare to address those issues with fairness. The management team needs to be prepared in terms of looking at the following areas: how well informed the union is in regards to the financial situation of the company. If the union believes the company is financially sound yet refuse a pay increase the strike action can be a possible outcome. The management team should look into the past relationship between the union and the management and grievances that have come up during the term of the agreement. These could give an insight to the kinds of issues the union wants addressed. The management team should identify skilled negotiators if they are expecting possible strike action. It’s important to advise management in regards to the legal environment – i.e. some provinces allow the use of temporary workers during strike action, which favours the employer in carrying out its businesses without the normal workforce, or whether the union is required to take a strike vote.

5. As the HR manager how would you handle a situation in which a supervisor has knowingly violated the collective agreement when scheduling overtime?

The supervisor must be called to account for a deliberate violation of the collective agreement. They must be made aware that they do not have the flexibility of a non-union environment, and that such violations can result in grievances that can cost the company money (penalties and legal costs). This should be handled as a disciplinary offense with further violations subject to stronger penalties or .

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termination.

EXPERIENTIAL EXERCISES (p. 307) 1. Assume that you are the vice-president of HR at a relatively new non-union firm that has been experiencing rapid growth. In view of the management team’s desire to remain non-union, you have been asked to prepare a report to the other senior management team members, making specific recommendations regarding strategies that the firm should adopt to help to ensure that the employees will have no desire to unionize. Identify two key recommendations to your plan.

Research studies have demonstrated that the desire to unionize results from a combination of worker dissatisfaction and the belief that collective action is the only means of changing the factors causing the dissatisfaction. Answers to this question should incorporate the various factors associated to workers’ desire to unionize. The material on union substitution provides strategies and guidelines for firms wishing to avoid unionization.

2. Look at two union websites, and locate information on union organizing campaigns. Which union does a better job in clearly explaining this important process to workers who may be worried about risks associated with unionizing their company?

You might suggest that the look up the unions mentioned in the chapter such as Unifor, the Teamsters, CUPE, UFCW and so on.

3. Select a provincial government website dealing with labour relations. Locate an FAQ page on this site, and identify three things you learn to increase your knowledge of labour relations. Share your findings with another student or in a class presentation.

Teaching Tip Be sure students do different provinces and not just their own.

Using the Negotech search tool on the Government of Canada website (http://negotech.labour.gc.ca/cgibin/recherche-search/nego/index.aspx?GoCTemplateCulture=en-CA), compare and contrast the following provisions of two collective agreements: union recognition, management rights, union security, grievance procedures, and arbitration clauses. What do you think led to the differences? Which contract do you think in its entirety is better for employees? Why? Teaching Tip Have students work in teams to do this activity and then present their findings

5. Read the following scenario and then, based on the role your team has been assigned by your instructor and the preparation time allowed, develop a negotiating strategy, including your bargaining zone that you think will enable you to reach a fair and reasonable outcome for all parties.

Before coming to the bargaining table, pick a chief negotiator for your team. Negotiate a settlement.

Scenario ABC manufacturing is a large multinational machinery and heavy equipment manufacturer. The last two years have been very difficult, with more competition coming from offshore companies whose labour costs are much lower than those in Canada. The company is losing money and is considering .

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whether to lay off workers in one or more of its Canadian plants, perhaps opening a new plant in Mexico or somewhere else in Central America. The union contract is up and negotiations will begin soon.

The purpose of this exercise is to give the students a brief “Taste” of the negotiation process. It takes about one hour to complete, although some negotiations go faster than others.

Have students form groups of 4-5 and give them their “role’ assignment, making sure there are an equal number of groups.

Remind students to develop a comprehensive strategy for their team and also to consider what the other side may come to the table with.

Send one set of negotiators (either all management groups or all union groups) outside the room to work independently for about 15-20 minutes to develop their strategy and bargaining zone.

While half of the class is out of the room set up the tables so that the teams can face each other across a table when they are all back in the room.

Debrief: Did you come to an agreement that satisfied both interests?

What was easy about this exercise? Difficult?

What have you learned from this very brief exercise about union negotiations?

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PART SIX: GLOBAL ISSUES IN HUMAN RESOURCES MANAGEMENT CHAPTER 13 MANAGING HUMAN RESOURCES IN A GLOBAL BUSINESS

LEARNING OUTCOMES EXPLAIN how global movement of labour has an impact on HRM in Canada.

DESCRIBE the influence of intercountry differences on the workplace.

EXPLAIN how to improve global assignments through employee selection.

DISCUSS the major considerations in formulating a compensation plan for international employees.

DESCRIBE the main considerations in repatriating employees from abroad.

DISCUSS challenges immigrants to Canada face and IDENTIFY the role of multiple stakeholders in ensuring successful integration of talent in Canada.

CHAPTER SUMMARY

Globalization affects HR in two significant ways 1) international recruitment, retention and relations and 2) integration of immigrants who come to Canada. Intercountry differences include cultural factors (e.g. power distance, individualism/collectivism, and gender egalitarianism), economic systems, labour cost factors, and industrial relations factors. Global relocation strategies must consider all aspects of HRM and take a balance sheet approach to help expatriates maintain their standard of living. Repatriation problems are common but can be minimized through repatriation agreements, home-country sponsors/mentors, career counselling, return trips and reorientation programs. Newcomers to Canada are often underemployed; issues include lack of Canadian experience, limited transferability of foreign credentials and English/French language skills.

This further exacerbates the skills shortage faced by Canadian employers. Solutions include modifications to recruitment and selection procedures to assess immigrant skills, use of apprenticeships, partnerships with assessment centres and, educating employers, recruiters, and managers about how to recognize and interpret skills from another country.

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LECTURE OUTLINE I.

THE GLOBALIZATION OF BUSINESS AND STRATEGIC HR

Globalization of business is now the norm and companies need to market and mange overseas operations. Workforce mobility programs focus on managing the recruitment, relocation, and retention of employees who completed work-related task and activities outside of the core or primary head office or region of the company. In addition, special programs target expatriates who are going overseas and immigrants who have come to Canada.

Teaching Tip: Use a “show of hands” to illustrate how many students are or have a family member who is/was an immigrant. Ask if anyone knows someone who has worked overseas, even on a shortterm basis (e.g., working while backpacking round the world).

II. HOW INTERCOUNTRY DIFFERENCES AFFECT HRM Companies who operate only within Canada’s border have the luxury of dealing with a relatively limited set of variables that influence HR policies and practices, but the same is not true when a company operates in more than one country. Companies need to decide if HR policy and practices need to be modified in light of: 1. Cultural Factors Differences in cultural values (e.g. power distance, individualism/collectivism, and gender egalitarianism) have HR implications for training, pay, promotions and selecting expatriate employees who will be able to operate effectively within that culture.

Teaching Tip: As a refresher for students who have already taken an Organizational Behaviour course or for those who haven’t, have students go to Dr. Geert Hofstede’s website (http://geert- hofstede.com), click on “National Culture” to read about the five dimensions on which cultural values differ, and select a few pairs of countries for comparison purposes.

2. Economic Systems Capitalist (free enterprise), socialist, and communist economies require slightly different HR policies and practices.

3. Legal Systems Labour laws vary considerably around the world (e.g. age discrimination protection, termination requirements, and health and safety laws). Where laws are similar enforcement may still vary.

4. Labour Cost Factors Differences in labour costs may also produce differences in HR practices (e.g. degree of investment in training and development or use of pay for performance programs). See Table 13.1, p.

311 for comparisons among various countries.

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5. Industrial Relations Factors The relationship among workers, unions, and the employer can vary dramatically from country to country affecting HRM practices in terms of worker voice and representation in labour disputes.

6. Summary Intercountry variations complicate the task of selecting, training, and managing employees abroad and make the job of expatriate manager more difficult.

Teaching Tip: Provide (or have students create) a list of socialist and communist countries, and then have them locate a guide to HR for each country on the Web and identify notable differences in HR practices and HR legislation.

III. GLOBAL RELOCATION The number of expatriates working abroad is continuing to increase and includes traditional expatriates as well as “global nomads” and previously underrepresented female expatriates.

Relocation policies are becoming more flexible, but family issues are a major issue in reluctance to accept an expatriate assignment, along with financial concerns. Pressing challenges for organizations include:      

Candidate identification, assessment and selection Cost projections Assignment letters Compensation, benefits, and tax programs Relocation assistance Family support

Teaching Tip: Have students write down a list of three countries (besides their home country) where they would consider working and three countries where they would refuse an international assignment. Discuss the factors that come into their decision.

Teaching Tip: Does your school have an exchange programme? Have students research their school’s exchange programme.

Teaching Tip: Does your school have the student group known as AIESEC? Have the students research this organization and its local and international chapters.

1. Why Expatriate Assignments Fail The cost of expatriate assignment failure (early return) can reach a million dollars, but can be mitigated by more careful selection of and more support for expatriates (and their families).

Reasons for expatriate failure include being lower in desired personality traits (extroversion, agreeableness, and/or emotional stability), lacking desire for expatriate career, family pressures, expatriate nationality (Canadians are more adaptable than Americans), and length of the assignment. Solutions include shorter assignment length with family remaining at home as well as strong support for every expatriate employee. .

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Teaching Tip: Organizations tend to screen for the current job and not for future jobs, but expatriate failure might be reduced if management candidates were screened for cross-cultural personality and aptitude when they first applied for a job with the organization (even straight out of college/university). Have students debate the pros and cons of early screening compared to leaving the screening until much later in the person’s career.

Teaching Tip: Have students investigate the hassle factors identified in the Expert Opinion Box (p.314) (https://www.ivey.uwo.ca/internationalbusiness/research/hasslefactor/ ).

IV. CONSIDERATIONS IN GLOBAL HRM Considerations include careful screening, special training, and formulation of international HR policies for compensation and labour relations.

1. Global Staffing Policy The three international staffing policies are ethnocentric (home country managers), polycentric (host country managers), and geocentric (best manager for position regardless of country of origin).

Teaching Tip: Consider using the Ethical Dilemma on p. 316.

2. Selection for Global Assignments International managers can be home country expatriates, locals (host country), or thirdcountry nationals (from a country other than home or host). These days most managerial positions are filled by locals due to lower cost, availability and government pressure/regulations. However, expatriates are still used when specific technical competence is needed that is not available locally, when an overseas assignment is being used as a developmental opportunity for a high potential employee, and as a means of exerting control through enforcement of organizational policies and culture.

3. Orienting and Training Employees for Global Assignments In-depth, careful cross-cultural training helps to create realistic expectations, which facilitates cross-cultural adjustment. A four step approach to cross-cultural training includes: (Figure 13.1 p.

317)    

Level 1 – awareness of cultural differences Level 2 – link between attitude and behaviour, especially unfavourable stereotypes Level 3 – factual knowledge about the target country Level 4 – skill-building (language including non-verbal, adjustment and adaptation skills)

In addition, leadership development opportunities (rotating assignments, management development centres, high-level classroom programs) help overseas executives hone their functional and leadership skills for a global economy.

Teaching Tip: Have students contact local companies who are doing business overseas to find out how they prepare their employees for cross-cultural business interactions, whether they are just dealing with overseas suppliers or are being sent on an overseas assignment. .

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4. International Compensation International compensation management can present some unexpected and complicated problems, due to the need to have compensation be both integrated and differentiated.

While executive pay plans are becoming more uniform around the world, the general policy is to pay expatriates according to home country compensation levels (see Figure. 13.2, p. 318), with allowances for cost-of-living differentials. a. The balance sheet approach – equalizes purchasing power, maintains standard of living b. Variable pay – now common in many countries c. International EAPs – provide mental health support/treatment to expatriates and families Teaching Tip: Consider using the Ethical Dilemma on p. 318.

5. Performance Appraisal of Global Managers Several issues complicate the task of appraising an expatriate’s performance, such as who does the appraisal and local events that impact performance in ways not visible to home country managers.

V. REPATRIATION Repatriation is the process of moving the expatriate and his or her family back home, and can often be more difficult than going abroad. Up to half of expatriates leave the organization following repatriation, often taking their new knowledge and skills to the competition.

Repatriation problems include fears of having been “out of sight, out of mind”, placement in mediocre/makeshift jobs upon return, loss of executive perquisites, more rapid promotion of those who stayed behind, task of picking up old friendships and starting new schools. Steps to avoid these problems include:       

Writing repatriation agreements Assigning a sponsor Providing career counselling Keeping communication open Offering financial support Developing reorientation programs Building in return trips

Teaching Tip: Have students find and share repatriation stories from expatriates on the Web and identify what the most common issues were that these people faced upon their return. In addition, they can research local or regional companies to find out about their repatriation programs.

VI. MANAGING GLOBAL WORKERS WITHIN CANADA Successful integration and utilization of immigrants and foreign workers Is essential to Canada’s economy, but many are underemployed (overqualified but in lower wage positions) or unemployed.

Main obstacles to employment are: .

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Barrier 1: Lack of Canadian Experience Two in every three new immigrants fails to find employment in their field. Solutions include:  educating employers, recruiters, and hiring managers in recognition and interpretation of skills from different countries  providing clear descriptions of required experience in job descriptions, and offering opportunities to demonstrate skills in simulated/field setting  using apprenticeships and providing opportunities to write certification examinations  partnering with industry-based assessment centres to develop bridging programs Barrier 2: Poor Transferability of Foreign Education or Training Licensing bodies of certain trades and professions may not accept foreign-obtained certification and employers have difficulty assessing foreign education in a meaningful way. Prior learning assessment and recognition (PLAR) methods can help because they standardize the recognition of skills and abilities.

Barrier 3: Lack of Literacy Skills Literacy is the ability to identify, understand, interpret, create, communicate, compute, and use printed and written materials associated with varying contexts. Employees must be able to express themselves in the official language(s) of the country they are employed in, but only three in every five immigrants report that they can speak English very well and only one in five can speak French.

Roughly 45% of new immigrants participate in English language training once employed and 10% are trained in French after employment. Language abilities increase likelihood of gaining employment, advancing in an organization, and closing the wage gap.

Teaching Tip: Have students research immigration trends in the local area and if/how these have changed over the past ten years. Bring in or have students contact local community groups who assist immigrants in finding employment to obtain concrete and local examples of success stories and also ongoing challenges in the local community.

Teaching Tip: Depending on the class, consider developing a service learning activity where students proofread and provide feedback on cover letters and résumés, as well as help with mock interviews for a local immigrant support group.

DISCUSSION BOX SUMMARIES

ETHICAL DILEMMAS How ethical is it for a multinational organization to recruit expatriate staff for managerial positions when similarly qualified staff can be identified in the host country? (p. 316) The demands of the assignment may be such that an expatriate manager is required, due to a high need for organizational knowledge, not just technical knowledge and skills. It may also be an essential developmental assignment, in which case opportunities should be offered to high potential host country staff to also gain international experience. In many situations it would not only be ethical to appoint host country staff to managerial positions, but it also would make sense to optimize on local .

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knowledge and experience.

Is it ethical to pay expatriates using the balance sheet approach when local staff at the same level receives far less compensation? (p. 318) Some students may argue that, in absolute terms, it may be unethical to use the balance sheet approach for expatriate staff compensation.

Expatriate staff tends to be an assignment for a finite period of time, with the expectation of returning to their home country, so the pay difference is temporary. In comparison to host country staff, expatriates may have established financial commitments that require a certain level of income, and without an assurance of financial continuity and maintenance of a comparable standard of living it would be difficult to attract employees to take on international roles. Also, they are dislodged from their normal social environment of (extended) family and friends, and from their cultural environment. As such, a higher level of compensation can be arguably ethical. Where organizations are open to assigning local staff to other expatriate offices and apply the same principles in a transparent and even-handed way, their ethical position would be strengthened.

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KEY TERMS balance sheet approach Expatriate pay based on equalizing purchasing power across countries. (p.

318) ethnocentric staffing policy Policies that align with the attitude that home-country managers are superior to those in the host country. (p. 315) expatriate Employees who are citizens of the country where the parent company is based, who are sent to work in another country. (p. 309) expatriate assignment failure Early return of an expatriate from a global assignment. (p. 313) geocentric staffing policy Policies that align with the belief that the best manager for any specific position anywhere on the globe may be found in any of the countries in which the firm operates. (p.

316) immigrant A person residing in Canada who was born outside of Canada (excluding temporary foreign workers, Canadian citizens born outside of Canada, and those with student or work visas). (p. 309) polycentric staffing policy Policies that align with the belief that only host-country mangers can understand the culture and behaviour of the host-country market. (p. 315) repatriation Process of moving the expatriate and his or her family back home from the foreign assignment. (p. 319) workforce mobility The focus on managing the recruitment, relocation, and retention of employees who complete work-related tasks and activities outside of the core or primary head office or region of the company. (p. 309)

REVIEW AND DISCUSSION QUESTIONS (p. 326) 1. Specifically, what are some of the uniquely international activities that an international HR manager typically engages in? (p. 312-313) From a practical point of view, an international HR manager has to address issues such as: 

Candidate identification, assessment, and selection. In addition to the required technical and business skills, key traits to consider for global assignments include cultural sensitivity, interpersonal skills, and flexibility.



Cost projections. The average cost of sending an employee and family on an overseas assignment is reportedly between three and five times the employee’s pre-departure salary; as a result, quantifying total costs for a global assignment and deciding whether to use an expatriate or a local employee are essential in the budgeting process.



Assignment letters. The assignee’s specific job requirements and associated pay will have to be documented and formally communicated in an assignment letter. .

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

Compensation, benefits, and tax programs. There are many ways in which to compensate employees who are transferred abroad, given the vast differences in living expenses around the world. Some common approaches to international pay include home-based plus a supplement and destination-based pay.



Relocation assistance. The assignee will probably have to be assisted with such matters as maintenance of the person’s home and automobiles, shipment and storage of household goods, and so forth.



Family support. Cultural orientation, language training, education assistance, and emergency provisions are just some of the matters to be addressed before the family is shipped abroad.

That is just the tip of the iceberg. Cross-cultural, technical, and language training programs will probably be required. The complex and differentiated tapestry of labour laws and rules from country to country, and provisions for re-assimilating the expatriate when he or she returns home, are some of the other issues that must be addressed.

2. Explain three broad global HR challenges. (p. 312-315, , , 319-320) Three broad global challenges are:  Workforce mobility programs to manage recruitment, relocation, and retention of employees who complete work-related tasks and activities outside of the core or primary head office/region. 

Reducing expatriate assignment failure and managing repatriation



Integrating immigrants and foreign workers into the Canadian labour market by overcoming experience barriers, education/training credential barriers, and literacy barriers.

3. Discuss the reasons why expatriate assignments fail and what is being done to reduce the failure rate. (p. 313-315 The students should cover the following points:  Poor selection of candidates  Poor support  Family resistance.

Companies can help potential expats by:  Providing language and cultural training  Providing a “buddy”  Ensure the spouse will be supported and/or busy in the new environment  Provide realistic information about the assignment and the new location  Provide a return to home country protocol  Ensure required personal development opportunities are available 4. How does compensation of an expatriate differ from that of a home-office manager? How can some of the unique problems of compensating the expatriate's be avoided? (p. 317) While the base salaries may be similar, the total compensation of expatriates is often higher that homeoffice managers due to the need to cover differences in cost-of-living and to provide various allowances to the expatriate and their family. The balance sheet approach equalizes purchasing power .

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across countries eliminating any perception of “more money for same job”.

5. Describe five actions that can be taken by expatriate managers in other countries to increase their personal safety.

Suggestions that can be gleaned from the Web include:  take general training about travelling and living abroad, and specific information about the country or region they are going to  arrive at airports as close to departure time as possible and wait in areas where they are not easily observed  install security systems at home and on the car  vary departure and arrival times and take different routes to and from work  keep current on crime and other problems by regularly checking travel advisory services and consular information sheets  remain confident at all times 6. What are the three biggest obstacles to securing full employment of immigrants and foreign workers in Canada? How can these be managed? (p. 321-325) The three barriers to full employment of immigrants and foreign workers are lack of Canadian experience, lack of recognition for foreign credentials, and literacy issues in regards to the official languages of the new country. Solutions include:      

educating employers, recruiters, and hiring managers in recognition and interpretation of skills from different countries providing clear descriptions of required experience in job descriptions, and offering opportunities to demonstrate skills in simulated/field setting using apprenticeships and providing opportunities to write certification examinations partnering with industry-based assessment centres to develop bridging programs using PLAR methods to assess skills and abilities acquired elsewhere offering language training in English and/or French

7. Why is the issue of underemployment of foreign-trained persons important to Canadian employers? (p. 321-322) Immigrants are necessary to offset with an aging Canadian workforce and a talent shortage in many occupations. However, many immigrants cannot find positions in their field and end up in positions for which they are overqualified, and cannot use the knowledge and skills that helped them obtain entry into Canada. Helping them to move into more suitable positions by overcoming barriers (see Review Question # 6) can help organizations be more competitive on the global market.

CRITICAL THINKING QUESTIONS (p. 326) 1. You are president of a small business. In what ways do you expect that being involved in an international business activity will affect human resources management (HRM) in your business?

Being involved in international business activity will require that cultural, economic, labour cost, and industrial relations differences be taken into account. Depending on countries chosen from which to purchase goods and/or services and/or to which to supply goods and/or services, differences in these factors have the potential to affect virtually every aspect of HRM. If there is a decision to open a branch facility in another country, the following HRM issues will have to be addressed: international staffing policy; candidate identification, assessment, and selection; employee orientation and training; compensation and benefits; performance appraisal; international industrial relations; .

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ensuring safety and fair treatment abroad; and perhaps repatriation issues.

2. A firm is about to send its first employees overseas to staff a new subsidiary. The president asks why such assignments fail, and what can be done to avoid such failures. Write a memo in response to these questions.

In a recent survey, the reasons reported for expatriate failure differed between the U.S., European, and Japanese multinationals. For American multinationals, the reasons in descending order of importance included inability of spouse to adjust, managers' inability to adjust, other family problems, managers' personal or emotional immaturity, and inability to cope with larger overseas responsibility. Managers of European firms emphasized only the inability of the manager's spouse to adjust as an explanation for the expatriate's failed assignment. Japanese firms emphasized (in descending order) inability to cope with larger overseas responsibility, difficulties with new assignment, personal or emotional problems, lack of technical competence, and finally, inability of spouse to adjust.

Factors identified by Canadian firms as important to expatriate success include flexibility, language ability, and family adjustment.

These findings underscore a truism regarding selection for international assignments, namely that it is usually not inadequate technical competence but family and personal problems that undermine the international assignee. Thus, to avoid such failures, international managers should be screened for traits that predict success in adapting to what may be dramatically new environments. A list of such expatriate selection traits would include: job knowledge and motivation; relational skills; flexibility/adaptability; extracultural openness; and family situation. The most important of these is family situation. Adaptability screening is generally recommended as an integral part of the expatriate selection process. A realistic job preview should be provided, as well as extensive orientation and training.

3. What can an organization do to ensure that the skills acquired on an international assignment are utilized when an employee returns to his or her home country?

Refer to page 338-339 which lists a number of steps that can be taken by multinationals to avoid many of the repatriation problems. Regarding the use of skills acquired on an international assignment, there are a number of ways that an organization can use them. Depending on the structure of the organization, the returning employee can be assigned to the geographical department to support/supervise the overseas area that he or she has just left; some line positions can be reserved with a prerequisite of overseas experience; similarly promotions to some or all senior positions can require foreign experience. Returning employees can also provide significant contributions in training and mentoring roles.

4. How would you assess the credential of foreign-trained persons? What agencies are available for you to contact?

Prior learning assessment and recognition (PLAR) methods can be used to assess foreign credentials because they standardize skills and abilities. Agencies would include Human Resource Skills Development Canada (HRSDC) as well as local immigrant support groups and local colleges and universities. They may also be organizations who specialize in the assessment and interpretation of foreign credentials. Several provinces have formal credential evaluation processes in place.

5. What obstacles to successful integration of global talent do you think exist in your company?

What solutions can you recommend to overcome these obstacles?

Answers to this question will depend on the students’ familiarity with what has taken place in the past .

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and with current practices. Some students may have little to no knowledge in this area but can instead contact a local company or immigrant support group.

EXPERIENTIAL EXERCISES (p. 327) 1. Choose three traits that are useful for selecting international assignees, and create a straightforward test (not one that uses pencil and paper) to screen candidates for these traits.

The most important trait is family willingness to support the international posting, but this is more effectively assessed through interviews than paper and pencil testing. The traits for which screening tests are to be devised should be extracultural openness, flexibility/adaptability, and relational skills. There are numerous types of tests that would be appropriate, including work sampling, a leaderless group discussion, some type of management game, an individual presentation, and a role-play or simulation exercise, all of which should involve some sort of cross-cultural situation (e.g. business etiquette situation, business negotiation situation, family problem). Employee biographies can also provide evidence of interest in international travel and language abilities.

2. Describe the most common approach to formulating expatriate pay. Use a library source to determine the relative cost of living in five countries this year, and explain the implications of such differences for drafting a pay plan for managers being sent to each country.

The most common approach to formulating expatriate pay is to equalize purchasing power across countries, a technique known as the balance sheet approach. The basic idea is that each expatriate should enjoy the same standard of living he or she would have had at home. With the balance sheet approach, four main home-country groups of expenses – income taxes, housing, goods and services, and reserve – are the focus of attention. The employer estimates what each of these four expenses is for the expatriate's home country, and also what each is expected to be in the expatriate's host country. Any differences are then paid by the employer.

In practice, this usually boils down to building the expatriate's total compensation around five or six separate components. For example, base salary will normally be in the same range as the manager's home-country salary. In addition, however, there might be an overseas or foreign service premium.

This is paid as a percentage of the executive's base salary, in part to compensate the manager for the cultural and physical adjustments he or she will have to make. There may also be several allowances, including a housing allowance and an education allowance for the expatriate's children.

Income taxes represent another area of concern. In many cases a Canadian manager posted abroad may have to pay not only Canadian taxes, but income taxes to the country to which he or she is posted as well.

Answers to this question will vary depending on the particular countries researched.

3. Either in pairs or groups of four or five, develop an outline for an initial four-hour crosscultural training program. What training resources, tools, and processes might you use? Be prepared to give a rationale for your program.

The purpose of this exercise is for students to develop an appreciation for the complexities involved in designing and developing a time limited cross cultural training program and selecting those topics that should be dealt with first.

This exercise will take about 1 hour and 15 minutes to complete. The plans will vary by group. .

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4. Review some of the employers in your local area. What programs or approaches do they have to help recruit and evaluate international talent? If required, contact the company representatives to develop a stronger understanding of the company practices towards ensuring that immigrants are given equal opportunities for employment.

One purpose of this exercise is for students to learn about local community (not-for-profit) agencies who assist various groups, such as new Canadians, Indigenous people, youth, seniors, people with disabilities).

Have the students search for community services directory and add their city/town’s name. For Toronto, go to www.211toronto.ca. For Hamilton, go to the Red Book of Hamilton (http://informationhamilton.ca/redbook) or Information Hamilton (https://informationhamilton.ca/) as examples .

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