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Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
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Keep on Truckin' School for Truck Drivers is proud of its training methods. Before its
students are ever allowed on the road with a big rig, they are taught safe driving
techniques with the help of sophisticated, computerized equipment that comes as close as
possible to duplicating real driving conditions, right down to the sights, sounds, bumps
and vibrations experienced on the road. Keep on Truckin' is using a training method
known as job replication.
Feedback: Job simulation is the use of sophisticated equipment to duplicate job conditions
and tasks so that trainees can learn skills before using them on the job.
138. Reggie is learning to be a carpenter by working alongside experienced carpenters.
After one more year of successful training, his union will classify Reggie as a
journeyman. Reggie is participating in an apprenticeship program.
Feedback: In an apprenticeship program a worker learns a skill by working alongside
experienced workers for an extended period of time. Unions frequently require new members
to serve as apprentices to assure excellence, and to limit entry into their profession. A worker
who successfully completes an apprenticeship program is classified as a journeyman.
139.
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Hector Cruz is receiving training in maintaining and repairing assembly line robots at a
school that uses equipment very similar to that used on his new job at Blast Off
Technologies. His classroom training is called vestibule training.
Feedback: Vestibule training is done in schools where employees are taught using equipment
that is very similar to what they will use on the actual job.
140. Iris Bloom accepted a management position at the Sustainable Plant Life Corporation.
In order to give her an appreciation of the different functional areas of her new company,
she is required to spend six weeks in each of five different functional areas of the
company, including production, research and development, accounting, marketing, and
the HR management department. This type of training is known as contingency
employment.
Feedback: Giving managers assignments in a variety of departments is known as job rotation.
141.
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Jim Marlowe currently holds the position of assistant manager in his firm's credit
department. He works closely with a more experienced manager to learn how to perform
all of the functions involved in credit management. Jim believes he will soon be
experienced enough to take over a senior position in his department. Jim has the benefit of
serving as an understudy.
Feedback: An understudy position allows a junior manager to work as an assistant to a
higher-level manager and learn the management functions needed to assume the higher-level
position. Understudy positions frequently have the term assistant or undersecretary in their job
title.
142. When Sally Miller was hired to a lower-level management position at Zinwick and
Associates, she was introduced to Wendy Hopper, and told that Wendy would be her
mentor. As a mentor, Wendy will coach and guide Sally, introduce her to the right people,
and be her organizational sponsor.
Feedback: A mentor supervises, guides, and coaches selected lower-level employees,
introduces them to the right people, and acts as their sponsor within the organization.
143.
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Several years ago, Drew's company sent him to Massachusetts Institute of Technology for
an intensive program of leadership and business communication training. Although
expensive, the firm was committed to investing in the development of key employees for
the purpose of retention and promotion. This type of managerial development is known as
off-the-job courses and training.
Feedback: Prestigious universities such as the University of Chicago, the University of
Michigan, and MIT offer intensive managerial training courses. This is off-the-job training
that firms are willing to invest in for employees with good potential to advance within the
company.
144. A performance appraisal is an evaluation in which the performance level of employees
is measured against established standards to make decisions about promotions,
compensation, additional training, or firing.
145. The primary reason that companies do performance appraisals is to improve worker
performance.
146.
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Establishing performance standards is a crucial step in the performance evaluation
process.
147. Most experienced workers have a clear idea of what is expected of them even if
managers do not communicate their expectations explicitly.
148. Because of legal implications, managers should not use the results of performance
appraisals to make decisions about promotions and compensation.
149. Performance standards should be understandable, measurable, and reasonable.
150.
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A performance appraisal provides an opportunity for employees to make suggestions
about how a particular task could be better performed.
151. The last step in the performance appraisal process is to discuss the results with the
employee.
152. Performance appraisals are very useful for new, inexperienced workers and first-line
managers, but have little value for top management.
153. Top level managers can benefit from having their performance evaluated by
subordinates.
154.
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An employment appraisal may include a 360-degree review, which is an appraisal that
includes job-related and non-job-related comments from a range of employees.
155. A 360-degree review will include the opinions of an employee's subordinates, as well
as those above him/her in the organization structure, and those who work alongside the
employee in comparable positions.
156. The main reason firms conduct performance appraisals is to establish a formal record
of job performance that will protect them from lawsuits filed by unhappy workers.
Feedback: The key word here is performance. The main purpose of a performance appraisal is
to improve employee performance.
157.
Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
One drawback of performance appraisals is that they cannot be completed for top
management because there is no one above this level of management to carry out and
evaluate the results.
Feedback: Today, performance appraisals rely on feedback from all levels, including
subordinates. Even top managers benefit from 360-degree reviews by peers and subordinates.
158. Even employees who work on a busy production floor need performance appraisals. If
the manager cannot conduct a closed-door appraisal session, the supervisor should
conduct these wherever he/she can find room.
Feedback: Performance appraisals should always be performed one on one and in a closed-
door session; and, never with other employees present.
159. Due to the secret nature of performance standards, employees are only permitted to
review these standards at the time when they receive their appraisal.
Feedback: When the manager sets the standards that will be the basis for employee
performance appraisals, those standards should be communicated with the employee, and the
employee should have the opportunity to offer feedback on any job-related responsibilities
that may not be clear.
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160. Early in the year, manager John Jacobs set reasonable, understandable, and
measurable performance standards and communicated these standards clearly to all team
members. Because of these efforts, he should be prepared for the next step in the appraisal
process.
Feedback: The first two steps in performance appraisal are establishing performance
standards and communicating them to subordinates. The third step is to evaluate performance,
and if the first two steps are done correctly, this step is relatively easy.
161. When she met with John to discuss his performance appraisal, Regina noted that John
had difficulty with managing his time on certain projects. One drawback of a performance
appraisal is that it does not allow for feedback during the evaluation process.
Feedback: The fourth step of the appraisal process is to discuss results with the employee and
the fifth step of the performance evaluation process is to take corrective action. These steps
provide managers with an excellent opportunity to offer constructive criticism and corrective
feedback to their employees, and also receive feedback from the employees.
162.
Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
Mollie Herndon is an office manager at Beaux Neaux Legal Services. The company's top
management recently announced it was adopting a 360-degree review process as part of
the performance appraisals of its office managers. Once this policy goes into effect,
Mollie can expect her evaluations to include feedback from both the managers above her
and the employees she supervises.
Feedback: A 360-degree review is so named because it calls for feedback from all directions:
up, down, and all around. In other words, opinions are gathered from workers above, below,
and at the same level as the worker being evaluated.
163. When Andrew administered the performance appraisals for his employees at
California Canines, a producer of upscale clothing and accessories for pets, he made
certain that he allowed at least one hour for each appraisal. He met with each employee in
his quiet office, and gave each an opportunity to prepare a self-improvement program. His
goal was to make each appraisal a positive experience for the employee. Andrew carried
out the suggestions of experts in performing effective performance appraisals.
Feedback: According to Figure 11.5, "Conducting Effective Appraisals and Reviews",
Andrew's strategies are good approaches that managers should take when conducting
performance appraisals.
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168. The long-term success of a firm often depends on its ability to control employee costs
and optimize employee efficiency.
169. One objective of a carefully managed compensation and benefit program is to retain
valued employees.
170. The Hay compensation system gives managers the flexibility to adjust pay for workers
to reflect the value of their contribution to the firm.
171. Blue collar and clerical workers are normally paid a salary.
172.
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In an ongoing study, Jay Schuster concluded that the best way to compensate members of
a team is to base each member's pay on her or his individual performance.
173. Skill-based pay is a method of compensating teams in which base pay is raised when
team members learn and apply new skills.
174. An advantage of a skill-based system of pay for compensating teams is that such a
system is easy to apply and administer.
175. Expenditures on fringe benefits have declined as a percentage of total payroll costs
over the past several decades.
176.
Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
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Fringe benefit payments account for about thirty percent of payroll costs today.
177. Employees sometimes prefer increases in fringe benefits rather than increases in
wages or salaries, because many fringe benefits are not subject to taxes.
178. On-site haircuts and free breakfasts are examples of soft benefits some firms provide
for employees.
179. A fringe benefits plan that allows employees to choose the benefits they want up to a
certain dollar amount is known as a soft benefit plan.
180.
Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
Many firms are now contracting with outside companies to administer their employee
benefits plans.
181. According to the Reaching Beyond Our Borders box in Chapter 11, human resource
managers will be able to count on the superiority of American business practices as they
help manage a global workforce.
182. One objective of a carefully managed compensation plan is to keep labor costs low. In
order to achieve this objective, a firm should strive to keep wages, salaries and benefits at
or below the compensation levels of its competitors.
Feedback: A well-managed compensation plan does strive to keep labor costs low. However,
this does not necessarily mean that a firm should strive to pay wages and salaries that are at or
below the level offered by competitors. Compensation is one of the main marketing tools that
companies use to attract employees. Offering low wages may make it difficult to compete for
the best employees. A carefully managed compensation and benefit program can help a firm
accomplish a variety of objectives: attracting the kinds of people the organization needs,
providing incentives for employees to work productively, keeping valued employees from
leaving for better-paying positions with competitors (or even starting their own business), and
maintaining morale by providing workers with some sense of financial security. These
objectives are not necessarily accomplished by paying low wages. Instead, they may enable
the firm to keep labor costs low by ensuring high productivity from a loyal workforce.
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183. According to the Reaching Beyond Our Borders box, titled, "Working Worldwide",
companies must consider a number of compensation related issues for employees who
work abroad. These may include currency conversion issues, special concessions such as
travel and housing allowances, differences in health care standards in different countries,
and even vacation benefits.
Feedback: As mentioned in the Reaching Beyond Our Borders box in Chapter 11,
compensation related issues include currency conversion issues, special concessions, health
care standards, vacation benefits, taxation issues, and overall business cultures abroad.
184. Recent trends suggest that the best way for firms to control labor costs is to focus on
limiting the growth of wages and salaries rather than controlling fringe benefits.
Feedback: Fringe benefits have grown faster than wages in recent years. U.S. companies now
pay an average of about $13,000 per employee in benefits. Moreover, fringe benefit packages
are becoming so complex that the cost of administering them has also become a major burden.
185.
Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
The reason that companies use the gain sharing pay system and the skill based pay system
to compensate teams of employees is that both are closely tied to profit performance.
Feedback: The skill based pay system is tied to the team's achievement of new skills that do
not necessarily translate into increased sales or profits. The gain-sharing system is tied to
quality improvements in operations, customer satisfaction ratings, and production
improvements, which we hope will translate into increased profits. There is a better chance
that increased profits can be attributed to quality improvements.
186. Highly compensated executives sometimes prefer fringe benefits such as club
memberships, company cars, and more vacation time, as opposed to higher salaries
because most often these benefits are not taxable income.
Feedback: Highly compensated executives that pay a higher percentage of their salary in
taxes sometimes prefer to receive added fringe benefits rather than higher pay.
187. Some firms have found that employees prefer cafeteria-style benefit plans. For these
plans, the employees vote on the benefits that they prefer, and only those benefits
receiving the highest votes are offered to employees.
Feedback: Cafeteria style plans permit employees to choose from a variety of benefits, up to a
maximum dollar amount.
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191. The Amabala Corporation is reorganizing to make more extensive use of teams. The
company plans to continue paying its workers based on their individual performance. This
approach is likely to maximize the success of the team by encouraging all team members
to exert their best effort.
Feedback: A study co-authored by Jay Schuster found that when pay to team members is
based strictly on individual performance it erodes team cohesiveness and makes it less likely
the team will meet its goals as a collaborative effort.
192. Employees at the MAX Card Company, a worldwide credit card business are
criticizing the company's fringe benefits package because it forces all employees to accept
the same benefits regardless of differences in their personal needs. In fact, they even offer
some soft benefits such as an on-site day care that over 80% of the employees are too
young or too old to use. MAX should consider a cafeteria style benefits plan.
Feedback: A cafeteria-style benefits plan allows employees to choose their own package of
benefits up to a specified dollar amount. For example, older employees might be allowed to
take most of their benefits in the form of increased pension payments, while employees with
young children could choose a benefits package that focused on day care.
193.
Chapter 11 - Human Resource Management: Finding and Keeping the Best Employees
Examples of soft benefits that a firm might offer are: onsite medical physician services,
and exercise centers.
Feedback: Soft benefits are the types of services that help employees achieve those types of
activities that take them away from work and family. In addition to the ones mentioned above,
some businesses offer dry cleaning services, day care services, shoe repair, haircuts, and
concierge services that will run errands for employees.
194. Flextime plans are popular with employees because they allow them to work fewer
hours while still earning the same income.
195. A common feature of flextime plans is the establishment of core times when all
employees are expected to be at their job stations.
196. Flextime plans are particularly well suited for workers on an assembly line.
