February 20, 2025

The legal environment is the most important element in the external environment for Human Resources Managers. Please research and report on two of the many

The legal environment is the most important element in the external environment for Human Resources Managers. Please research and report on two of the many HRM laws listed in your textbook. Please describe each law, the history of the law, and what its implications are. What is your reaction to the law? Has it helped you or someone in your life? Please cite all sources in MLA format; this should be 800 or more words.

Fundamentals of Management

Eleventh Edition

Chapter 9

Managing Human Resources and Diversity

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Learning Objectives (1 of 2)

9.1 Describe the key components of the human resource management process and the important influences on that process.

9.2 Discuss the tasks associated with identifying and selecting competent employees.

9.3 Explain how employees are provided with needed skills and knowledge.

After studying this chapter, you will be able to:

Describe the key components of the human resource management process and the important influences on that process.

Discuss the tasks associated with identifying and selecting competent employees.

Explain how employees are provided with needed skills and knowledge.

Learning Objectives (2 of 2)

9.4 Describe strategies for retaining competent, high-performing employees.

9.5 Discuss contemporary issues in managing human resources.

9.6 Explain what workforce diversity and inclusion are and how they affect the HRM process.

After studying this chapter, you will be able to:

Describe strategies for retaining competent, high-performing employees.

Discuss contemporary issues in managing human resources.

Learning Objective 9.1

Describe the key components of the human resource management process and the important influences on that process.

Human Resource Management

The management function concerned with getting, training, motivating, and keeping competent employees.

HRM = Right People, Right Place, Right Time

The quality of an organization is, to a large degree, determined by the quality of the people it employs. Staffing and H R M decisions and actions are critical to ensuring that the organization hires and keeps the right people. Getting that done is what human resource management (H R M) is all about.

HRM Process and Influences

Exhibit 9.1 The Human Resource Management Process

Exhibit 9.1 introduces the eight important H R M activities.

The first three activities in the H R M process address employment planning: adding staff through recruitment, reducing staff through downsizing, and the selection process.

Once you select competent people, you need to help them adapt to the organization and ensure that their job skills and knowledge are kept current—which is accomplished by the next two activities in the H R M process: orientation and training.

The last steps in the H R M process identify performance goals, correct performance problems if necessary, and help employees sustain a high level of performance over their entire work lives. The activities involved include performance appraisal, compensation and benefits.

Notice that the entire process in Exhibit 9.1 is influenced by the external environment. Many of the factors introduced in Chapter 2 directly affect all management practices, but their effect is felt most in managing the organization’s human resources because whatever happens to an organization ultimately influences what happens to its employees.

Long Description:

The process involves the following steps: Identification and selection of competent employees, adapted and competent employees with up-to-date skills, knowledge, and abilities, and competent and high-performing employees who are capable of sustaining high performance over the long term. A cyclical diagram around the process shows the following stages: Strategic human resource planning, recruitment and downsizing, selection, orientation, training and development, performance management, compensation and benefits, and safety and health. Identification and selection of competent employees lead to three stages: Strategic human resource planning, recruitment and downsizing, and selection. Adapted and competent employees lead to two stages: Orientation and training and development. Competent and high-performing employees lead to three stages: Performance management, compensation and benefits, and safety and health. The process takes the following elements into consideration: Environment, unions, work process, diversity, legislation, restructuring, and downsizing.

The Legal Environment

Exhibit 9.2 Major H R M Laws

The primary environmental force that affects an organization is the legal environment. H R M practices are governed by laws, which vary from country to country, and further vary within states or provinces. As a manager, it will be important for you to know what you legally can and cannot do.

The primary U.S. Laws affecting H R M are seen here in Exhibit 9.2, which reflects the federal government’s expansion of influence over H R M since the mid-1960s in the areas of equal employment opportunity and discrimination, compensation and benefits, and health and safety.

Since the mid-1960s, many state laws have added to the provisions of the federal laws. Therefore, today’s employers must ensure that equal employment opportunities exist for job applicants and current employees. Decisions regarding who will be hired, or which employees will be chosen for a management training program, must be made without regard to race, sex, religion, age, color, national origin, or disability.

Long Description:

The table shows three columns: Law or ruling, year, and description. The first type is equal employment opportunity and discrimination. The laws under this type are as follows. Equal Pay Act, 1963: Prohibits pay differences for equal work based on gender. Civil Rights Act, Title 7, 1964, amended in 1972: Prohibits discrimination based on race, color, religion, national origin, or gender. Age Discrimination in Employment Act, 1967, amended in 1978: Prohibits discrimination against employees 40 years and older. Vocational Rehabilitation Act, 1973: Prohibits discrimination on the basis of physical or mental disabilities. American with Disabilities Act, 1990: Prohibits discrimination against individuals who have disabilities or chronic illnesses; also requires reasonable accommodations for these individuals. The second type is compensation or benefits. The laws under this type are as follows. Worker Adjustment and Retraining Notification Act, 1990: Requires employers with more than 100 employees to provide 60 days’ notice before a mass layoff or facility closing. Family and Medical Leave Act, 1993: Gives employees in organizations with 50 or more employees up to 12 weeks of unpaid leave each year for family or medical reasons. Health Insurance Portability and Accountability Act, 1996: Permits portability of employees’ insurance from one employer to another. Lilly Ledbetter Fair Pay Act, 2009: Changes the statue of limitations on pay discrimination to 180 days from each paycheck. Patient Protection and Affordable Care Act, 2010: Health care legislation that puts in place comprehensive health insurance reforms. The third type is health and safety. The laws under this type are as follows. Occupational Safety and Health Act, OSHA, 1990: Establishes mandatory safety and health standards in organizations. Privacy Act, 1974: Gives employees the legal right to examine personnel files and letters of reference. Consolidation Omnibus Reconciliation Act, COBRA, 1985: Requires continued health coverage following termination, paid by employee.

Affirmative Action

Programs that ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups.

Trying to balance the “shoulds and should nots” of these laws often falls within the realm of affirmative action programs, which ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups, such as minorities and females. Although these regulations have significantly helped to reduce employment discrimination and unfair employment practices, they have also reduced management’s control over H R decisions.

Differences in H R M Laws

Canada

Mexico

Australia

Germany

H R M laws vary greatly among countries, so you need to know the laws and regulations that apply in your locale.

For example, Canadian H R M laws closely parallel those in the United States but Canada grants a larger degree of power for lawmaking to the individual provinces. As an example, discrimination on the basis of language is not prohibited anywhere in Canada—except in Quebec.

Once heavily unionized, unionization rates have been declining in Mexico. One hiring law gives employers 28 days to evaluate a new employee’s work performance, after which the employee is granted job security and termination is both difficult and quite expensive.

In Australia, discrimination laws were not enacted until the 1980s and generally apply to women (who need improved opportunities). Labor and industrial relations laws were overhauled in 1997 with the goal of increasing productivity and reducing union power.

The Workplace Relations Bill gives employers greater flexibility to negotiate directly with employees on pay, hours, and benefits and also simplifies federal regulation of labor–management relations.

German legislation requires companies to practice representative participation, the goal of which is to redistribute power within the organization, putting labor on a more equal footing with the interests of management and stockholders.

The two most common forms of representative participation are work councils and board representatives.

Work councils link employees with management. They are groups of nominated or elected employees who must be consulted when management makes decisions involving personnel.

Board representatives are employees who sit on a company’s board of directors and represent the interest of the firm’s employees.

Learning Objective 9.2

Discuss tasks associated with identifying and selecting competent employees.

Identifying and Selecting Employees

H R M Process:

Employment planning

Recruitment and downsizing

Selection

Supply and Demand aren’t just for economics—they’re

also important to H R M!

Every organization needs competent, talented people to do whatever work is necessary for doing what the organization is in business to do, so the first phase of the H R M process involves three tasks:

Employment planning

Recruitment and downsizing

Selection

Employment planning is the process by which managers ensure that they have the right number and kinds of people in the right places at the right times; people who are capable of effectively and efficiently completing those tasks that will help the organization achieve its overall goals.

This process translates the organization’s mission and goals into an H R plan that allows the organization to achieve those goals by:

Assessing current and future human resource needs.

Developing a plan to meet those needs.

Conducting Employee Assessments

How does an organization do a current H R assessment?

Why IS JOB ANALYSIS so important?

Job analysis results in: Job description

describes the job

Job specification

describes the person

Managers conduct an employee assessment by first reviewing the current human resource status through generating a human resource inventory, which generally lists the name, education, training, prior employment, languages spoken, capabilities, and specialized skills of each employee in the organization.

Another part of the assessment is job analysis, a process in which workflows are analyzed and the skills and behaviors necessary to perform jobs are identified. The job analysis helps determine the kinds of skills, knowledge, and attitudes needed to successfully perform each job. This information is then used to develop or revise job descriptions and job specifications.

A job description is a written statement that describes what a job holder does, how it’s done, and why it’s done. It typically includes job content, job environment, and conditions of employment.

The job specification states the minimum qualifications that a person must possess to perform a given job successfully. It identifies the knowledge, skills, and attitudes needed to do the job effectively. The job description and job specification are important documents as managers begin recruiting and selecting. They focus the manager’s attention on the list of necessary qualifications, assist in determining whether candidates are qualified, and help ensure that the hiring process does not discriminate.

Determining Future Employment Needs

Demand for human resources (employees) is a result of the demand for the organization’s products or services.

Needed! Outstanding Job Applicants!

Now . . . how do we get those?

The organization’s strategic direction determines future human resource needs.

Demand for employees comes from the demand for the organization’s products or services. Generally, managers attempt to establish the number and mix of people needed to reach that revenue by estimating total revenue. One exception is when there is a scarce supply of qualified candidates. This could limit the number of products produced or services provided—which decreases the amount of incoming revenue.

After assessing both current capabilities and future needs, managers can estimate shortages—both in number and in kind—and highlight areas in which the organization is overstaffed. Then they can develop a plan that matches these estimates and projects future employee needs and availability.

Once managers know their current staffing levels they can respond. If job openings exist, they can begin recruitment—that is, the process of locating, identifying, and attracting capable applicants. In contrast, if employment planning indicates a surplus, managers may want to reduce the labor supply and initiate downsizing or restructuring activities.

Recruiting Applicants

Exhibit 9.3 Recruiting Sources

SOURCE	ADVANTAGES	DISADVANTAGES
Internet/social media	Reaches large numbers of people; can get immediate feedback 92 percent of recruiters use social media when looking for potential candidates super 12	Generates many unqualified candidates
Employee referrals	Knowledge about the organization provided by current employee; can generate strong candidates because a good referral reflects on the recommender	May not increase the diversity and mix of employees
Company Web site	Wide distribution; can be targeted to specific groups	Generates many unqualified candidates
College recruiting/job fairs	Large centralized body of candidates	Limited to entry-level positions
Professional recruiting organizations	Good knowledge of industry challenges and requirements	Little commitment to specific organization

There are multiple sources of applicants, as seen here in Exhibit 9.3. The source used should reflect the local labor market, the type or level of position, and the size of the organization.

Most studies show that the best applicants come from employee referrals. Because the recommenders know both the job and the person being recommended, and want to protect their reputation, they tend to only refer well-qualified applicants. However, managers shouldn’t always opt for the employee-referred applicant when such referrals may not increase the diversity and mix of employees.

Handling Layoffs

Exhibit 9.4 Downsizing Options

OPTION	DESCRIPTION
Firing	Permanent involuntary termination
Layoffs	Temporary involuntary termination; may last only a few days or extend to years
Attrition	Not filling openings created by voluntary resignations or normal retirements
Transfers	Moving employees either laterally or downward; usually does not reduce costs but can reduce intraorganizational supply–demand imbalances
Reduced workweeks	Having employees work fewer hours per week, share jobs, or through furloughs perform their jobs on a parttime basis
Early retirements	Providing incentives to older and more-senior employees for retiring before their normal retirement date
Job sharing	Having employees, typically two part-timers, share one full-time position

In the past decade, and especially during the last several years, most global organizations, many government agencies, and some small businesses have been forced to shrink the size of their workforce or restructure their skill composition. Downsizing has become a relevant strategy for meeting the demands of a dynamic environment. While options can include firing or layoffs, other restructuring choices may be more beneficial to the organization.

Here in Exhibit 9.4 we see a summary of major downsizing options. Keep in mind that, regardless of the method chosen, employees suffer.

Selecting Job Applicants

Exhibit 9.5 Selection Decision Outcomes

The selection process seeks to predict which applicants will be successful if hired.

Any selection decision can result in the four possible outcomes shown in Exhibit 9.5.

A decision is correct when:

The applicant who was hired proved to be successful on the job, or

When the applicant who was not hired would not have been able to do the job.

When we reject applicants who would have performed successfully (called reject errors) or if we hired applicants who performed poorly (called accept errors).

Reject errors mean increased selection costs because more applicants have to be screened but can also open the organization to charges of employment discrimination.

Accept errors cost the organization in wasted training, the costs generated or profits forgone because of the employee’s incompetence, severance, and the additional recruiting and selection screening.

The major intent of any selection activity is to reduce the probability of making reject errors and accept errors while increasing the probability of making correct decisions. We do this by using reliable and valid selection procedures.

Long Description:

The later job performances are successful and unsuccessful. The selection decisions are reject and accept. The data from the matrix are as follows. Successful and reject: Reject error. Successful and accept: Correct decision. Unsuccessful and reject: Correct decision. Unsuccessful and accept: Accept error.

Reliability and Validity

Reliability:

The degree to which a selection device measures the same thing consistently.

Validity:

The proven relationship between a selection device and some relevant criterion.

If a test is reliable, any individual’s score should remain fairly stable over time, assuming that the characteristic being measured is also stable. To be effective predictors, selection devices must possess an acceptable level of consistency.

Any selection device that a manager uses must also demonstrate validity. Federal law prohibits managers from using any selection device that cannot be shown to be directly related to successful job performance. This constraint applies to entrance tests, too. Managers must be able to demonstrate that, once on the job, individuals with high scores on such a test outperform individuals with low scores. Consequently, the burden is on the organization to verify that any selection device it uses to differentiate applicants is related to job performance.

Selection Devices

How effective are tests and interviews as selection devices?

Tests . . . not just for school!

Managers use a number of selection devices to reduce accept and reject errors. The best-known include written tests, performance-simulation tests, and interviews.

Evidence shows that tests of intellectual ability, spatial and mechanical ability, perceptual accuracy, and motor ability are moderately valid predictors for many semiskilled and unskilled operative jobs in industrial organizations. However, an enduring criticism of written tests is that intelligence and other tested characteristics may not necessarily be good indicators of an applicant’s job performance.

This criticism has led to an increased use of performance-simulation tests, which are made up of actual job behaviors. The best-known performance-simulation tests are work sampling (a miniature replica of the job) and assessment centers (which simulate real problems one may face on the job). The former is suited to persons applying for routine jobs; the latter to managerial personnel.

Because its content is essentially identical to job content, performance simulation should be a better predictor of short-term job performance than written tests and should minimize potential employment discrimination allegations. Additionally, well-constructed performance-simulation tests are valid.

Effective Interviewing

How Can I Be a Good Interviewer?

TIPS FOR MANAGERS: Make interviews more valid and reliable!

Review the job description and job specification to help in assessing the applicant.

Prepare a structured set of questions to ask all applicants for the job.

Review an applicant’s résumé before meeting him or her.

Ask questions and listen carefully to the applicant’s answer.

Write your evaluation of the applicant while the interview is still fresh in your mind.

The interview is the most universal selection device, along with the application form. Interviews can be reliable and valid selection tools when structured, well organized, and limited to relevant questioning.

Research shows that potential biases can creep into interviews if they’re not well structured and standardized. The following are highlights from this research:

The interviewer tends to hold a stereotype of what represents a good applicant.

The interviewer tends to favor applicants who share his or her own attitudes.

The order in which applicants are interviewed will influence evaluations.

The order in which information is elicited during the interview will influence evaluations.

Managers can make interviews more valid and reliable by reviewing the job description and job specification to help assess the applicant; preparing a structured set of questions to ask all applicants for the job; reviewing an applicant’s résumé before meeting him or her; asking questions and listening carefully to the applicant’s answers; and writing an evaluation of the applicant while the interview is still fresh.

In behavioral or situation interview, applicants are observed not only for what they say but also for how they behave. Applicants are presented with situations and are asked to “deal” with the situation. Research shows that these behavioral interviews are nearly eight times more effective for predicting successful job performance than traditional interviews are.

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The legal environment is the most important element in the external environment for Human Resources Managers. Please research and report on two of the many

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