978-0078029165 Appendix B Part 1

Appendix B-1

| Appendix B – Chapter Exercises

CHAPTER 1 – CHAPTER EXERCISES

Chapter Exercise 1.1

An Interview with an HRM Specialist

Objective. The purpose of Exercise 1.1 is to give the student a personal feel for the role of an HRM

manager or specialist in an organization. The problems that are cited by the people interviewed

should reflect the trends discussed in Chapter 1.

Description. Students should be given a few weeks to set up and conduct the interviews. Due to the

nature of the exercise, the week in which you are going to cover Job Analysis (Chapter 4) is the most

appropriate time to collect Form 1.1.1, and conduct the group discussions in the context of the job

descriptions and job specifications for the personnel who are interviewed. These two products of job

analysis are covered in Chapter 4.

The exercise is easy to conduct at urban institutions and difficult in rural institutions unless the

professor allows telephone or e-mail interviews. The Directory of the Society for Human Resource

Management (SHRM) is an excellent source for telephone contacts. You can contact SHRM at

www.shrm.org. If your school has an SHRM liaison, he or she should have the Directory. Class

discussion should relate problems cited by the HRM people, directed toward the trends discussed in

Chapter 1.

This exercise can be combined with a written assignment that recommends specific HRM

interventions for problems identified within the organizations represented. For example, staffing

problems could be identified and attacked using better recruitment (Chapter 5) or more valid

selection techniques (Chapters 6). Performance management problems could be tackled with more

valid performance appraisal techniques tied to the strategic goals of the organization (Chapter 7) and

perhaps pay for performance systems (Chapter 11). Health care costs could be researched and

controlled through cost care management programs (Chapters 10 and 14). Labor realtions issues may

also be particuarly timely (Chapter 13).

Students should be given almost the full length of the course to submit a final set of

recommendations for HRM interventions although different interventions could be presented in a

working paper throughout the term.

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| Appendix B – Chapter Exercises

Procedure for Exercise 1.1

For Step 1, Part B of Exercise 1.1, groups of no more than 6 students should be assembled using a

that all group members can review all other student forms. As an alternative, students can be paired

We recommend that the instructor select spokespersons for Step 2. Each group should summarize the

range of HRM specialists interviewed, the range of problems described, and the activities the

organization is pursuing in response to the problems.

The variance in backgrounds and responsibilities of HRM professionals should be apparent after

discussion. As we discuss in Chapter 1, while there is an increase in the number of highly trained and

educated HRM professionals with advanced degrees in the subject or related disciplines (e.g., MBAs,

Problems Identified in the Survey Using Form 1.1.1.

Based on survey responses, service organizations in particular indicate considerable difficulties in

hiring and retaining skilled personnel. Health care costs are often cited as a major problem in service

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| Appendix B – Chapter Exercises

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performance management problems. Public sector HRM professionals lament over greater demand

for services, shrinking budgets, and hiring freezes.

A significant number of HRM professionals have indicated a lack of support or resistance from line

management. Many managers perceive HRM departments as reactive and often as obstacles to

getting things done. The most effective HRM departments and programs are those that are

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Table 1.1.1

Most Common Private Sector Problems

More common problems in service organizations are marked by an asterisk (*).

Ensuring compliance with regulatory agencies and laws (EEOC, ADA requirements, OSHA)

Lack of employee motivation*

Negligent hiring

Ineffective performance appraisals*

Increasing levels of teamwork

Most Common Public Sector Problems

Cost cutting/staff reductions

Workload increase/workforce freeze and reduction

Safety programs

Insufficient funding

Childcare

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| Appendix B – Chapter Exercises

Chapter Exercise 1.2

An Assessment of Customer Satisfaction

and the Relationship to HRM Activities

Objectives. The purpose of Exercise 1.2 is to relate HRM activities to customer satisfaction. The link

between particular HRM practices (the domains introduced in Ch 1) and meeting or exceeding

customer requirements will be discussed.

Description. Part A requires each student to write critical incidents regarding customer service and

satisfaction. Examples of both excellent and poor service are requested. Tables 1 and 2 present a

summary of results using Exercise 1.2. The most frequently cited causes for excellent and poor service

are presented from the perspectives of practicing HRM specialists and undergraduate or graduate

students. These groups were given incidents as written and then asked to speculate on the most

important “cause” of the good or bad incident.

Many critical incidents are written which focus on product quality, the assessment of which (as

described) is largely independent of the point of contact with an employee. Many students related

incidents involving poor products which customer representatives could do little or nothing about

regardless of the employees’ levels of motivation, ability or knowledge.

As discussed in Chapter 1, however, the instructor should point out that product quality can been

linked to HRM activities that may not be apparent to the student. SAS, the highly successful computer

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| Appendix B – Chapter Exercises

requirements is, of course, a major HRM responsibility. (This is a major point in Jeffrey Pfeffer’s book

on Competitive advantage) and a theme of this book.

However, for services (e.g., universities, hotels, restaurants, airlines, dry cleaners), it is clear that the

practices and selection ratios. Lower selection ratio (ratio of # of openings to # of applicants (lower is

better) is related to recruiting efforts and hiring practices are good or bad to the extent that they

predict success on the job and trainability. Organizations that have lower selection ratios combined

compensation. Students tend to believe that the company did something which created the

employee’s attitude or that the company failed to provide adequate training regarding the product or

service.

HRM specialists place relatively greater weight on personnel selection methods to improve the

organization in this area. There may be a more “can’t make a silk purse out of a sow’s ear” orientation

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customer-based market research, work design activities, and information systems as major

contributors to service quality as well (back to Pfeffer’s book).

Customer Satisfaction and Price

Many students write incidents in which they mention satisfaction in the context of price and we know

price enters into assessments of “customer value” (you expect a little more from the Ritz-Carlton than

Motel 6 or the Lexus dealer as opposed to your Ford Focus salesperson). Given this, the instructor

that customers include questions such as “is this made in America?” or “does this company do right by

its employees?” in their decisions to purchase equation the realized cost savings to foreign production

is reduced. To date, these types of questions have not been given much weight in the equation

relative to bottom-line price and actual product quality. Due to the political rhetoric on this issue,

however, the competitive advantage of domestic production could ultimately be enhanced. Review

the history of Levi Strauss for an illustration of this difficult issue.

The political fall-out of work outsourced or performed by contracted employees within the U.S.

should be far less onerous (if burdensome at all). However, the key question here is the effect of the

Appendix B-8

| Appendix B – Chapter Exercises

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only labor costs while ignoring the effects of the quality of products or services provided by

outsourced or contracted companies may be doomed to failure. Please note that many

downsizing/outsourcing programs do not meet their objectives and/or save as much money as

projected.

Table 1.2.1

Most Frequent Examples and Causes of Excellent Product/Service

SOURCE: HRM Specialists

Example/ Categories Causes

Actual product or service quality – (1)*market research, customer knowledge

Departmental communication/

cooperation – (2) job design, work teams

SOURCE: Students

Actual product or service quality – (1) knowledge of customer requirements

through market research

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| Appendix B – Chapter Exercises

Table 1.2.2

Most Frequent Examples and Causes of Poor Product/Service

SOURCE: HRM Specialists

Examples/ Categories Causes

Employee attitudes regarding

customer problems – (3)* personnel selection

(4) supervision

(5) training

Employee knowledge of product

– (6) distribution

SOURCE: Students

Employee attitudes regarding – (2) training

customer problems – (3) compensation

– (5) selection

delivery – (4) work design

– (6) distribution

* Number of HRM activity in parentheses represents rank ordering of the causes of customer

dissatisfaction with product or service across all examples or categories.

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| Appendix B – Chapter Exercises

Table 1.2.3

Mean Self & Peer Assessments

for Exercise 1-b

1. Not at all

SELF

PEER

TO WHAT EXTENT DID YOU (PEER):

4.2

4.1

1. Help to establish a clear course of action needed to complete the work?

3.9

3.7

2. Speak effectively in the group?

3.6

3.5

3. Argue persuasively for a point of view?

3.8

3.6

4. Present your point of view concisely?

3.5

3.6

5. Write clearly and concisely?

4.4

4.3

6. Show sensitivity to other group members?

4.0

3.9

7. Stimulate and guide group members toward resolution of the

assignment?

4.4

4.1

8. Listen carefully to other opinions and suggestions?

3.9

4.1

9. Analyze all pertinent information carefully before taking a position?

4.4

4.0

10. Display a willingness to state a position in a complex situation?

Appendix B-11

| Appendix B – Chapter Exercises

This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Exercise 1.2 Assessment Questions

1. Describe the experience you had in providing feedback on your designated discussant’s

performance. To what extent did you feel comfortable in that role?

Students tend to feel uncomfortable in providing feedback for a number of reasons. First, with the

short observation period and assessment period, they may be uncertain about the validity of their

2. How might that role be improved with better directions, better assessment devices, etc.?

Research in performance appraisal also shows that the extent to which the rater feels uncomfortable

in the process of giving performance feedback predicts the extent to which the rater makes relatively

3. How did you feel about receiving feedback on your group performance? To what extent did

you find the feedback helpful? How might that process be improved?

Students tend to feel more comfortable receiving feedback than providing it. Of course, the high

4. Did this exercise give you a better understanding of the relationship between HRM related

activities and customer satisfaction? Explain your answer.

One implication from this exercise should be that customer satisfaction in services is closely linked to

the performance of the contact employees. In the services, many workers typically perform their

major functions at the same time that the service is consumed by the customer and their

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| Appendix B – Chapter Exercises

This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

aspects of the product or service quality. HRM activities such as selection, training, compensation and

supervision are all critical activities related to the performance of these employees. Our survey work

also clearly show that issues related to work design, information systems analysis, and

customer-based analysis are critically related to customer perceptions of product and service quality.

HRM experts must maintain this customer-driven focus as they monitor the effectiveness of the

various HRM activities.

Appendix B-13

| Appendix B – Chapter Exercises

Chapter Exercise 1.3

HR Issues at Valley National Bank

Dave Ulrich

Objective. The major learning objective for Exercise 1.3 is to relate HRM activities to the competitive

strategies and advantages of the organization through a SWOT analysis. Effective HRM activities are

well integrated with the strategic plan of the organization and can create several competitive

advantages. This case describes a bank with potential for “technological” and “financial” competitive

advantages but has several HRM characteristics that presently exhibit “organizational capability”

disadvantages.

Description. VNB has an opportunity for immediate competitive advantage due to financial and

technological capabilities. However, organizational capability is such that the Bank could lose the

potential advantages of the aforementioned capabilities due to HRM problems. The additional $2

billion in assets and the innovative information tools may not be properly utilized without swift

interventions with regard to the Bank’s HRM practices.

Table 1.3.1 presents the chronological priority list of HRM issues requiring the accounting

1. Determine the critical competencies required in the context of the goals for the department and

2. Assess the extent to which the current incumbents possess these critical competencies;

3. Develop training or selection programs where there are discrepancies between competencies

required and competencies possessed by the incumbents; and concurrently,

4. Develop a compensation system commensurate with the competencies required for the positions

and the goals of the accounting department and VNB.

The first HRM area in need of action is to clearly define the requirements for the department and the

various job positions in the context of the specific goals for the department and the potential

competitive advantages to be exploited. One emphasis should be on a determination of the type and

After the critical competencies are determined, an assessment of incumbent knowledge should be

made for purposes of determining the compatibility of skills required with incumbents’ skills and,

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| Appendix B – Chapter Exercises

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assuming there is a discrepancy, the training and/or personnel staffing requirements needed to

eliminate the discrepancy.

As the necessary training or personnel selection procedures are being developed for solutions to the

discrepancies, a thorough study of the compensation system is now warranted. A process of linking

the reward system with the strategic plan should be pursued culminating in a modified salary

structure based on the new job descriptions.

No action should be taken with the current staff until these compensatory steps are accomplished

contributing to the strategic aspects of the departmental needs. A determination should be made on

the extent to which Carla Goodman’s past performance has been measured reliably, and whether her

knowledge and skills are compatible with the new departmental needs. While it appears her

technical skills may also be her strongest assets, Ms. Roberts should assess these skills relative to the

negative allegations. A determination should then be made of the extent to which the negative

litigation.

Similar analyses of personnel should also be followed for Mr. Williams and Ms. Lewis. After

competency requirements are determined, a reward system should be established which creates

internal equity among employees. Ms. Roberts should restructure the department with the

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| Appendix B – Chapter Exercises

Table 1.3.1

HRM Issues in Need of Attention (In order)

1. Determine the critical competencies required for the achievement of the strategic goals and

competitive advantages of the department and bank.

Domain: Organizational design.

2. Assess incumbent knowledge, skills, and abilities in all critical competencies and determine

any discrepancies.

3. Develop training and/or selection programs where there are discrepancies between

competencies required and competencies possessed by employees.

Justification: Assuming there are discrepancies in competencies, they must be eliminated through

training and selection.

4. (Same time as Step #3) develop a compensation system commensurate with the

competencies required for the positions and the goals of the department and VNB.

Justification: Present system creates major competitive disadvantage; key personnel underpaid,

others overpaid.

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| Appendix B – Chapter Exercises

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is presented which indicates sex discrimination, although an internal inquiry should be made

immediately.

Appendix B-17

| Appendix B – Chapter Exercises

Exercise 1.3 SWOT Analyses

Strengths

The bank is in the unique position of acquiring a large influx of capital. The company’s technical

Weaknesses

There are serious “organizational capability” issues that are clear weaknesses; personnel problems

abound in this organization. Some employees need to be reassigned. Others possibly need to be

Opportunities

With the acquisition of the bank, VNB is in a capital position to hire good people, train employees

Threats

The fundamental threat is the disarray of the HR function. Wage inequity could cause turnover.

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| Appendix B – Chapter Exercises

Exercise 1.3 Assessment Questions

1. Do you agree or disagree with the recommendation of Mr. Sterrett? Explain your position.

Is it lawful to cut employee pay as Mr. Sterrett’s recommends?

2. What other information would be helpful in preparation for recommending action to be

taken?

3. What steps would you take to determine the legality of your actions?

4. What is “unique” about VNB and how could the uniqueness give the bank a competitive

advantage?

The $2 billion in new assets and the technological software are the “unique” capabilities that can

5. Among the major activities of HRM (see Figure 1-3), what domain usually drives other HR

domains when significant organizational change is necessary?

Organizational design isssue are almost always what should be addressed first (see page 10). In

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| Appendix B – Chapter Exercises

Chapter Exercise

Exercise 2.1 – International HR Strategies: The Derivation of Policy

Brenda E. Richey

Objective

This exercise introduces the student to the complex compensation issues that face the multinational

firm. Concepts students should take away include the impact of culture on compensation systems, an

understanding of the factors that should be considered in setting up a compensation system in a

foreign subsidiary and the extent to which firm strategy may impact the appropriate level of

compensation system integration. The case can be used as a vehicle to discuss specific compensation

issues in a global setting and as a starting point for a wider discussion of the role of the global

economy on employees. The immediate issues facing O’Dell include both compensation levels and

the extent to which the home company compensation package is appropriate for the Indian

subsidiary. To resolve these issues, O’Dell is going to need to reconcile corporate needs and company

wide “best practices” with national differences.

Description

This exercise should take students 30 minutes to an hour to prepare by reading the case and to give

thoughtful answers to Form 2.1.1. This should stimulate students to think of all the HRM questions

that need to be addressed in organizations expanding into global operations.

Table 2.1.1

Answers for Form 2.1.1

1. How does culture affect the role of pay as a motivating force for workers? Would this issue

be raised differently in the United States?

The instructor may want to discuss the manner in which the compensation issues were raised in the

case. How employee satisfaction (or more importantly, dissatisfaction) is communicated may also

differ by country. In this exercise the issue is raised in a conversation that was “overheard” by one of

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| Appendix B – Chapter Exercises

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the extent and manner in which compensation serves as a performance motivator. These factors

suggest that it is difficult to develop a global compensation plan that is also the “ideal” for each nation

in which a firm operates.

2. What would be the advantages and disadvantages of using the existing LG compensation

package in India? How might it differ from a more typical Indian package? What additional

information would O’Dell need to make this decision?

Whether the existing compensation package is appropriate for the new subsidiary can only be

determined by considering both legal aspects and broader cultural factors that may determine what

will work in the new context. Adopting the existing package may seem to counter some of the

apparent dissatisfaction about compensation differences. It may also be argued that it will simplify

Typical items mentioned should include: Local laws on compensation; local taxes policies; national

norms on health care (is health care socialized or does the firm provide it; if socialized should the firm

provide a supplemental plan; does the firm or the individual usually pay the premiums); national

3. What other human resource issues might O’Dell need to be concerned about? Prepare a list

and explain how they might interact.

It is, of course, difficult to contemplate a compensation system that is not tied to the related HR

practices of selection, training, and performance evaluation. The most closely related issues in this

case would be performance evaluation. In the U.S. context, a relationship between employee