Fundamentals of Human Resource Management 7th Edition By Noe - Test Bank

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The process of human resource planning consists of three stages: forecasting, goal setting and strategic planning, and program implementation and evaluation. The first step in human resource planning is forecasting.

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An organization might use trend analysis, constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year. These statistics are called leading indicators. Leading indicators are objective measures that accurately predict future labor demand.

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Statistical models almost always have to be complemented with subjective judgments of experts. There are simply too many “once-in-a-lifetime” changes to consider, and statistical models cannot capture them.

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A transitional matrix is a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period.

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The second step in human resource planning is goal setting and strategic planning.

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The purpose of setting specific numerical goals is to focus attention on the problem and provide a basis for measuring the organization’s success in addressing labor shortages and surpluses. The goals should come directly from the analysis of labor supply and demand.

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Downsizing reduces labor surpluses quickly; however, this action may cause the highest amount of suffering among employees who survive the job cuts.

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Work sharing is one of the options that can be used to avoid a labor surplus.

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The negative effect of downsizing is especially high among firms that engage in high-involvement work practices, such as the use of teams and performance-related pay incentives.

TRUE

Downsizing leads to a loss of talent, and it often disrupts the social networks through which people are creative and flexible.

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The most widespread methods for eliminating a labor shortage are hiring temporary and contract workers and outsourcing work.

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Temporary employment offers lower costs to organizations. Using temporary workers frees the employer from many administrative tasks and financial burdens associated with being the “employer of record.”

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In the context of employing temporary and contract workers, if the person providing the service is a contractor and not an employee, the company is not supposed to directly supervise the worker.

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Contracting with another organization to perform a broad set of services is called outsourcing.

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To ensure success with an outsourcing strategy, companies should avoid outsourcing any work that is proprietary or requires tight security.

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When implementing an HR strategy, the organization must hold some individual accountable for achieving the goals. That person also must have the authority and resources needed to accomplish those goals.

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The steps in a workforce utilization review are identical to the steps in the HR planning process.

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In general, all companies have to make decisions in three areas of recruiting: personnel policies, recruitment sources, and the characteristics and behavior of the recruiter.

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Personnel policies influence the characteristics of the positions to be filled. Recruitment sources influence the kinds of job applicants an organization reaches. And the nature and behavior of the recruiter affect the characteristics of both the vacancies and the applicants.

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Personnel policies influence the characteristics of the positions to be filled. Recruitment sources influence the kinds of job applicants an organization reaches. And the nature and behavior of the recruiter affect the characteristics of both the vacancies and the applicants.

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Referrals are people who apply for a vacancy because someone in the organization prompted them to do so. Direct applicants are people who apply for a vacancy without prompting from the organization.

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Many of the people reading classified ads are either over- or under-qualified for the position.

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In contrast to public employment agencies, which primarily serve the blue-collar labor market, private employment agencies provide much the same service for the white-collar labor market.

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The recruiter affects the nature of both the job vacancy and the applicants generated.

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Research suggests that realistic job previews have a weak and inconsistent effect on turnover.

Organizations need to carry out human resource planning so as to meet business objectives and gain advantage over competitors. To do this, organizations need a clear idea of the strengths and weaknesses of their existing internal labor force.

The first step in human resource planning is forecasting. In personnel forecasting, the HR professional tries to determine the supply of and demand for various types of human resources.

The primary goal of forecasting is to predict which areas of the organization will experience labor shortages or surpluses.

Statistical methods capture historic trends in a company’s demand for labor. Under the right conditions, these methods predict demand and supply more precisely than a human forecaster can using subjective judgment. But many important events in the labor market have no precedent. When such events occur, statistical methods are of little use.

Trend analysis refers to constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year. These statistics are called leading indicators.

Leading indicators are objective measures that accurately predict future labor demand. They might include measures of the economy (such as sales or inventory levels), actions of competitors, changes in technology, and trends in the composition of the workforce and overall population.

A transitional matrix is a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period. It answers two questions: “Where did people who were in each job category go?” and “Where did people now in each job category come from?”

A transitional matrix is a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period. A transitional matrix answers two questions: “Where did people who were in each job category go?” and “Where did people now in each job category come from?”

A transitional matrix is a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period. A transitional matrix answers two questions: “Where did people who were in each job category go?” and “Where did people now in each job category come from?”

Besides looking at the labor supply within the organization, the planner should examine trends in the external labor market. The planner should keep abreast of labor market forecasts, including the size of the labor market, the unemployment rate, and the kinds of people who will be in the labor market. Important sources of data on the external labor market are published by the Labor Department’s Bureau of Labor Statistics.

The second step in human resource planning is goal setting and strategic planning.

In this scenario, Jonathan is most likely using the downsizing strategy to deal with the company’s labor surplus. Downsizing delivers fast results to reduce labor surplus. However, the amount of suffering caused to employees is high in this strategy.

Although downsizing causes high employee suffering, in this scenario, the company should use downsizing to reduce its labor surplus. Yienze Inc. is facing severe losses and downsizing will also help save it from further financial difficulties.

Transfers can be used as a strategy to avoid the Wisconsin labor surplus. Early retirement and hiring freezes are slow options, which do not fit the parameters Betty has set. The remaining strategies are relatively fast, but pay reductions and demotions cause high amounts of suffering, while transfers only cause a moderate amount of suffering.

In this scenario, the company should use a work-sharing strategy, which will immediately reduce costs while causing less suffering to employees than layoffs would. Also, the company will still have workers in place when the work on new contracts begins.

Bob has eight months to deal with the labor surplus problem. Therefore, he should use the hiring freeze strategy to deal with the surplus. It yields results slowly, causes less suffering for the employees, and achieves the objective of reducing the labor surplus.

Brendan and Angela should consider natural attrition, which is when people leave an organization on their own. Unlike the other strategies, which produce fast results, natural attrition happens slowly. If two employees continue to leave the organization per month, Brendan and Angela will reduce the labor surplus within two years.

Both the natural attrition and early retirement strategies yield slow results and cause low suffering to the employees.

In this scenario, Carmella must use temporary employees to deal with labor shortage problems. Hiring temporary employees is relatively inexpensive, and it helps in dealing with sudden and temporary labor shortages.

To handle a labor shortage, one option organizations typically pursue is hiring temporary employees. In this option, the speed of results is high, and the ability to eliminate the strategy at a later date is high.

In this scenario, Errol should hire temporary workers. This strategy can be implemented quickly, ensuring Errol will avoid a labor shortage. This strategy is also gives Errol flexibility because it is easy to change after implementation; once the holiday season is over Errol can let the temporary workers go.

Both the overtime and outsourcing strategies yield fast results and are easy to change after implementation, i.e., they have high revocability.

Organizations benefit from hiring and retaining employees who provide a core competency—that is, a set of knowledge and skills that make the organization superior to competitors and create value for customers.

Organizations are most likely to benefit from hiring and retaining employees who provide a core competency—that is, a set of knowledge and skills that make the organization superior to competitors and create value for customers.

Although downsizing has an immediate effect on costs, much of the evidence suggests that it hurts long-term organizational effectiveness. This is especially true for certain kinds of companies, such as those that emphasize research and development and where employees have extensive contact with customers.

The negative effect of downsizing is especially high among firms that engage in high-involvement work practices, such as the use of teams and performance-related pay incentives. As a result, the more a company tries to compete through its human resources, the more layoffs hurt productivity.

Downsizing is the planned elimination of large numbers of personnel with the goal of enhancing an organization’s competitiveness. Downsizing leads to a loss of talent, and it often disrupts the social networks through which people are creative and flexible.

Organizations may not take (or even know) the steps that can counter these reactions—for example, demonstrating how they are treating employees fairly, building confidence in the company’s plans for a stronger future, and showing the organization’s commitment to behaving responsibly with regard to all its stakeholders, including employees, customers, and the community.

An alternative to downsizing that is seen as a way to spread the burden more fairly is cutting work hours, generally with a corresponding reduction in pay. This is a more equitable way to weather a slump in demand.

The average age of the U.S. workforce is increasing. But even though many baby boomers are reaching traditional retirement age, indications are that this group has no intention of leaving the workforce soon. Reasons include improved health of older people, jobs becoming less physically demanding, insufficient savings, high levels of debt, lack of pensions, enjoyment of work (especially in the higher-paying occupations), and laws against age discrimination.

Another popular way to reduce a labor surplus is with an early-retirement program. Under the pressures associated with an aging labor force, many employers try to encourage older workers to leave voluntarily by offering a variety of early-retirement incentives. The more lucrative of these programs succeed by some measures. Research suggests that these programs encourage lower-performing older workers to retire.

In a phased-retirement program, an organization can continue to enjoy the experience of older workers while reducing the number of hours that these employees work, as well as the cost of those employees.

The most widespread methods for eliminating a labor shortage are hiring temporary and contract workers and outsourcing work.

Temporary and contract workers may not be as committed to an organization as the permanent employees in an organization.

Temporary employment is popular with employers because it gives them flexibility they need to operate efficiently when demand for their products changes rapidly.

Outsourcing refers to contracting with another organization to perform a broad set of services.

Outsourcing refers to contracting with another organization to perform a broad set of services.

Organizations use outsourcing as a way to operate more efficiently and save money. They choose outsourcing firms that promise to deliver the same or better quality at a lower cost.

Organizations use outsourcing as a way to operate more efficiently and save money. They choose outsourcing firms that promise to deliver the same or better quality at a lower cost. One reason they can do this is that the outside company specializes in the service and can benefit from economies of scale. Costs also are lower when the outsourcing firm is located in a part of the world where wages are relatively low.

Outsourcing may be a necessary way to operate as efficiently as competitors, but it does pose challenges. Quality-control problems, security violations, and poor customer service have sometimes wiped out the cost savings attributed to lower wages.

Organizations facing a labor shortage may be reluctant to hire employees, even temporary workers, or to commit to an outsourcing arrangement. Especially if the organization expects the shortage to be temporary, it may prefer an arrangement that is simpler and less costly. Under some conditions, these organizations may try to garner more hours from the existing labor force, asking them to go from part-time to full-time status or to work overtime.

Under some conditions, organizations may try to garner more hours from the existing labor force, asking them to go from part-time to full-time status or to work overtime. Employers see overtime pay as preferable to the costs of hiring and training new employees. The preference is especially strong if the organization doubts that the current higher level of demand for its products will last long. Overtime therefore is best suited for short-term labor shortages.

The final stage of human resource planning involves implementing strategies and evaluating outcomes.

Implementation that ties planning and recruiting to an organization’s strategy and to its efforts to develop employees becomes a complete program of talent management. Today’s computer systems have made talent management more practical.

In this scenario, Nazir is carrying out the recruiting process. An activity carried on by an organization with the primary purpose of identifying and attracting potential employees is referred to as recruiting.

In human resource management, recruiting consists of any practice or activity carried on by an organization with the primary purpose of identifying and attracting potential employees. It thus creates a buffer between planning and the actual selection of new employees.

Recruitment sources influence the kinds of job applicants an organization reaches.

An organization’s personnel policies are its decisions about how it will carry out human resource management, including how it will fill job vacancies. These policies influence the nature of the positions that are vacant. According to the research on recruitment, it is clear that characteristics of the vacancy are more important than recruiters or recruiting sources for predicting job choice.

Pay is an important job characteristic for almost all applicants. Organizations have a recruiting advantage if their policy is to take a “lead-the-market” approach to pay—that is, pay more than the current market wages for a job.

Employment at will is an employment principle, which holds that if there is no specific employment contract saying otherwise, the employer or employee may end an employment relationship at any time, regardless of cause.

In this scenario, the relationship between John and the company is based on the employment-at-will policy. This policy holds that if there is no specific employment contract stating otherwise, the employer or employee may end an employment relationship at any time.

Due-process policies formally lay out the steps an employee may take to appeal an employer’s decision to terminate that employee.

Due-process policies formally lay out the steps an employee may take to appeal an employer’s decision to terminate that employee. Job applicants are more attracted to organizations with due-process policies, which imply greater job security and concern for protecting employees, than to organizations with employment-at-will policies, which hold that if there is no specific employment contract saying otherwise, the employer or employee may end an employment relationship at any time.

Besides advertising specific job openings, organizations may advertise themselves as a good place to work in general. Advertising designed to create a generally favorable impression of the organization is called image advertising.

Advertising designed to create a generally favorable impression of the organization is called image advertising. Image advertising is particularly important for organizations in highly competitive labor markets that perceive themselves as having a bad image. Research suggests that the image of an organization’s brand influences the degree to which a person feels attracted to the organization. This attraction is especially true if the person’s own traits seem to match those of the organization. Publicity is not paid advertising, but in this example, it is communication that serves a similar purpose: creating a favorable impression of the company.

Job posting refers to communicating information about a vacancy on company bulletin boards, in employee publications, on corporate intranets, and anywhere else an organization communicates with employees.

Job postings refer to the process of communicating information about a job vacancy on company bulletin boards, in employee publications, on corporate intranets, and anywhere else an organization communicates with employees.

To promote from within involves recruiting employees who already hold other positions in the organization—that is, using internal sources. Organizations recruit existing employees through job posting, or communicating information about the vacancy on company bulletin boards, in employee publications, on corporate intranets, and anywhere else the organization communicates with employees.

Filling vacancies through internal recruiting is generally cheaper and faster than looking outside the organization.

Internal recruitment sources generate applicants who are well known to an organization. In addition, these applicants are relatively knowledgeable about the organization’s vacancies, minimizing the possibility they will have unrealistic expectations about the job.

People who apply for a vacancy without prompting from an organization are referred to as direct applicants.

Referrals are people who apply for a job vacancy because someone in the organization prompted them to do so.

Most direct applicants have done some research and concluded there is enough fit between themselves and the vacant position to warrant submitting an application, a process called self-selection. Self-selection, when it works, eases the pressure on the organization’s recruiting and selection systems.

Referrals fall under the category of external sources of recruitment. Referrals and direct applications cost much less than formal recruiting efforts and are among the best sources of new hires. The major downside of referrals is that they limit the likelihood of exposing an organization to different viewpoints. Furthermore, sometimes referrals contribute to hiring practices that are or that appear unfair, an example being nepotism, or the hiring of relatives.

Nepotism is the practice of hiring relatives. This is often considered an unfair practice and can result in resentment among employees.

A drawback of the big job websites is that they can provide too many leads of inferior quality because they are so huge and serve all job seekers and employers, not a select segment.

For managers or professionals, an employer may use the services of a type of private agency called an executive search firm (ESF). People often call these agencies “headhunters” because, unlike other employment agencies, they find new jobs for people almost exclusively already employed. ESFs serve as a buffer, providing confidentiality between the employer and the recruit.

For managers or professionals, an employer may use the services of a type of private agency called an executive search firm. For job candidates, dealing with ESFs can be sensitive. Typically, executives do not want to advertise their availability, because it could trigger a negative reaction from their current employer. ESFs serve as a buffer, providing confidentiality between the employer and the recruit. That benefit may give an employer access to candidates it cannot recruit in other, more direct ways.

On-campus interviewing is the most important source of recruits for entry-level professional and managerial vacancies.

In terms of evaluating the quality of a recruitment source, a yield ratio expresses the percentage of applicants who successfully move from one stage of the recruitment and selection process to the next.

To compute the cost per hire, find the cost of using a particular recruitment source for a particular type of vacancy. Then divide that cost by the number of people hired to fill that type of vacancy (200,000 ÷ 5 = 40,000).

In this scenario, the cost per hire would allow Gilbert to compare the costs of different recruitment sources. To compute this amount, Gilbert should find the cost of using a particular recruitment source for a particular type of vacancy. Then he should divide that cost by the number of people hired to fill that type of vacancy. A low cost per hire means that the recruitment source is efficient; it delivers qualified candidates at minimal cost.

To compute the cost per hire, find the cost of using a particular recruitment source for a particular type of vacancy. Then divide that cost by the number of people hired to fill that type of vacancy. With this method, the cost per hire for referrals was $5,000 ($15,000 ÷ 3 = $5,000), which is lower than the $15,000 cost per hire for the employment agency ($75,000 ÷ 5 = $15,000).

A yield ratio expresses the percentage of applicants who successfully move from one stage of the recruitment and selection process to the next.

According to some studies, applicants perceive HR specialists as less credible and are less attracted to jobs when recruiters are HR specialists. The evidence does not completely discount a positive role for personnel specialists in recruiting. It does indicate, however, that these specialists need to take extra steps to ensure that applicants perceive them as knowledgeable and credible. In general, applicants respond positively to recruiters whom they perceive as warm and informative.