978-0078029165 Appendix B Part 2

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Appendix B-21

| Appendix B – Chapter Exercises

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employee traits (loyalty, honesty, hard work, and similar characteristics rather than specific

outcomes), to seniority, or to group as opposed to individual performance.

Planning and forecasting

How many engineers will he need and for which projects? How soon does he need them

and how long will take them to obtain the skill level necessary? When does he need to

start recruiting in order to get the people in place by the time he needs them?

Recruiting

How are the engineers and workers currently recruited in India (and the U.S)? How can he

become an employer of choice so that he has a large number of highly qualified applicants

for each engineering position both in India and the U.S.? (This is another characteristic of

HPWS.)

Selection

Once he has the candidates, how can he ensure he has made the best match for the

employee, the organization and the customer?

Training

How can he provide the training necessary to improve the skills of the Indian team that will

lead to the higher productivity and improved quality he is looking for? How can he

Other compensation

What are the current benefits offered in both the U.S. and in India? Are there government

regulations in India in regards to those benefits (i.e. mandated health care)? Do additional

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| Appendix B – Chapter Exercises

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benefits matter to Indian workers? Do additional benefits attract and sustain the best

talent in India as they do here in the U.S.?

Health and Safety

What (if any) entity such as OSHA does India have that is chartered with employee health

and safety? How can he make sure his employees will participate in keeping a healthy

work environment? (Another aspect of an HPWS.)

4. How do these issues relate to the strategic choices that the firm has made? Does the

analogy to a manufacturing firm seem appropriate?

Firms operating internationally vary in the extent to which they integrate systems globally. In some,

subsidiaries operate on a stand alone basis, adapting closely to the host country norms. In others,

subsidiary operations are coordinated with those of the parent company and other subsidiaries to

form a global network with more standardized systems. (The standard may either be an expanded

version of the home country standard or one specifically developed to apply on a global basis). The

extent of integration will usually be related to strategic choices made by the firm. In this case, tension

Appendix B-23

| Appendix B – Chapter Exercises

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

Chapter Exercise 2.2

Going Global with Marriott Corporation

Dave Ulrich

Objectives. The major objective of Exercise 2.2 is to emphasize how HRM practices can create and

sustain competitive advantage through “organizational capability.” Marriott’s goal is to become the

“employer of choice” and the future employee perspective on this matter is relevant. The key issue in

this exercise is to determine how Marriott could achieve this goal at a minimum cost so that a

financial, competitive disadvantage is not created while making Marriott the “employer of choice.”

Description. The unique, financial capabilities of the Marriott Corporation provide an opportunity for

competitive advantage. In order for Marriott to continue its growth, it should adopt several actions

that will contribute to the creation and endurance of an “employer of choice” image and to increase

international expansion.

BACKGROUND

Traditionally, both financial management and customer service are emphasized. These two priorities

help Marriott deliver services that are cheaper and better. The third priority has been to be the

“employer of choice.” Being the “employer of choice” is essential to providing the excellent service

Marriott customers have received in the past and expect when they stay at a Marriott property. It is

also essential in order to deliver the services better.

a) It cuts cost. With over 100,000 employees at Marriott even after big cuts in 2008 and

2009, a reduction of turnover rate (e.g. 1 or 2%) through better HR practices can save

| X

Customer | X

Satisfaction | X

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c) HR, not capital, becomes scarce resource in the 1990s (baby bust, aging workforce,

diverse workforce, etc.). Managing HR competencies becomes much more uncertain

and critical than before.

Low |

In the 21st Century, human resources will become increasingly scarce in the U.S. as a result of

demographic changes. Marriott’s operation is quite labor intensive. In 2008, the Department of Labor

ranked the hospitality industry as one of the fastest growing sectors but also reported in 2009 that

The second major factor in this company’s success has been Marriott’s efforts to meet its goal of

becoming the provider of choice, or the preferred provider, in the hotel industry. In guest-satisfaction

surveys, Marriott consistently ranks at the top. To meet guest demands, Marriott has initiated a

number of programs aimed at maintaining its preferred-provider status, such as: Concierge service,

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self-sustaining commitment to outstanding customer service. To be consistent with Marriott’s

provider-of-choice philosophy, management set the goal of becoming the employer of choice. Being

Marriott put every category of spending under review in 2009, reduced headcount, and left

noncritical open positions unfilled. Marriott now waives co-pays for most preventive health care.

METHODOLOGY TO MEET “EMPLOYER OF CHOICE” GOALS

The first order of business is to study the population of new employees and get a reliable measure of

what they prefer in a job and a career. Marriott has studied recent college graduates to determine the

relative importance of the various options to be considered. Surveys were distributed and interviews

were conducted for purposes of gathering data on this subject. Marriott would then study these data

and run some cost figures for purposes of determining what is financially feasible to do. For example,

Recent graduates also expressed a strong interest in a career development program that described

the progression of a Marriott employee in the system. Marriott studied the normal progression of

graduates and developed a realistic program for career development. A brochure describing the

program was developed with a clear stipulation that normal career progression does not constitute an

employment contract or long-term commitment. College graduates also prefer compensation systems

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Another component of the new pay for performance system was the installation of an employee

stock ownership plan (ESOP). Such an option would foster a more personal interest in the job and the

company. In addition, it would create a consciousness of the company and at the same time give the

employee a sense of worth, as he or she would also be an “owner.”

The development of incentive systems was pursued with a maximum of employee involvement,

another organizational characteristic that had strong appeal to recent graduates. Employee focus

groups were established to participate in the evaluation of operations and the development of the

criteria to measure performance.

In conclusion, by striving to establish and maintain an image of the “employer of choice,” Marriott

sought to create “organizational capability” as a competitive advantage. The actions they have taken

were based on a study of job preferences by recent graduates. A similar method should be applied to

its international goals to be the “employer of choice.”

Exercise 2.2 Assessment Questions

1. To what extent do the recommendations made by your group generalize to organizations

other than Marriott? If they do not generalize, why not?

The methodology recommended (i.e., to study the preferences of potential employees) generalizes to

2. To what extent are the recommendations unique to international expansions and

international operations?

The recommendation to study the preferences of potential employees is not unique to international

operations. However, since the surveys are distributed locally and the responses will have each

country’s local flavor as well as each region and city will have its local culture highlighted. The

recommendation on increasing local direct compensation is not unique to international operations

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What competitive advantage principle did you consider in compiling your priority list?

Improve staffing practices?

a) Reduce turnover rates through incentive systems. If workers work up to 1/2 year, some gifts

are provided (e.g., walkman). If workers work for an even longer period, more valuable gifts

Enhance its recruitment capacity

Marriott has unique community development programs that could bring additional potential

candidates for their positions. Two of Marriott’s programs in particular are ideal for this tie in. The

first is its educational program that has been started in many countries. This program could help train

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Explain how you would go about researching the problems with expatriate attrition and

performance and difficulties in repatriation.

A survey of expatriates regarding those issues would be beneficial. If done correctly, the survey would

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EXERCISE 2.3

International Assignment Problems at XYZ Corporation

* Contributed by Dr. Stephanie Thomason

1. Why were expatriate managers returning early from their international assignments? What

could Sheila do to remedy this situation?

Expatriates were returning early because they or their family members had a difficult time adjusting

to the local cultures in which they were immersed. The number one complaint, that the spouse had

2. What steps should Sheila take to establish a repatriation program?

Some steps include:

• Provide a realistic job preview that includes a discussion of interpersonal, organizational, and

cultural factors. A discussion with colleagues who share similar experiences would be helpful,

along with a frank discussion of some of the organizational and cultural issues that may present

problems.

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| Appendix B – Chapter Exercises

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• Consider a gradual reduction in benefits upon repatriation

• Include family members in discussions of lifestyle changes

• Ensure that international experience is capitalized upon following repatriation

• Ensure that repatriated executive moves upward in firm (considering performance, of course)

3. XYZ is currently using a balance sheet approach to compensation. Should the company

consider other alternatives, such as localization or cafeteria-style benefits?

Localization is a viable alternative and is often used to reduce costs (GRTS, 2008), yet variations in the

levels of development and typical local salaries between countries suggest that this alternative may

not be attractive to expatriates from developed countries working in developing countries. Many

4. What country-level factors should Sheila consider when developing an international

compensation plan?

Country-level factors include:

• Economy, inflation, and currency. For example, high inflation recently in China has caused some

tension for many expatriates (GRTS 2008)

• Social and cultural factors. Cultural values, such as those from Hofstede (2001), may relate to

preferences for performance-based pay, team-based pay, etc.

5. Should Sheila consider phasing out the extended benefits over time following repatriation to

the United States? If so, how much time?

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| Appendix B – Chapter Exercises

6. What can Sheila do to reduce the “out of sight, out of mind” perceptions of expatriate

managers?

7. What can Sheila do to reduce the “reverse culture shock” of expatriates and their families?

A number of alternatives exist:

• Benefits transition schedule

• Support in job placement for spouses

8. What can Sheila do to address the concerns of locals who feel that expatriates’ pay is

excessive, given their own pay?

To address this concern, Sheila might consider surveying the locals to determine how they feel about

their pay. To whom do they compare are their pay when considering its fairness? Peers within the

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CHAPTER 3 – CHAPTER EXERCISES

Chapter Exercise 3.1

Zimpfer v. Palm Beach County

Objectives. The purpose of this exercise is to introduce the student to types of evidence, which are

considered in an age discrimination case, and to provide a framework for evaluating the

organization’s reactions to this claim. An actual case is presented and the student must take a

position on the alleged violation of the ADEA and the position the organization should take in the

matter.

Description. This case cuts to the heart of the ADEA. The author of the textbook (Bernardin) served

as the expert witness in this case for the plaintiff. The analysis presented in Exhibit 3.1.3 is the actual

data presented in the case. This is an excellent group exercise since there will be considerable

disagreement as to whether there is clear evidence of age discrimination and what steps the

organization should take. Table 3.1.1 presents the results and implications of the case.

The key question in this case is whether age was a determinative factor in the decision not to hire Mr.

Zimpfer. While the industrial psychologist’s resume analysis seemed to indicate that Mr. Zimpfer may

have been more qualified for the position than Mr. Merriman, there was no evidence presented

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| Appendix B – Chapter Exercises

Form 3.1.1

1. Was Mr. Zimpfer a victim of illegal age discrimination according to ADEA and case law?

Explain your position. Cite relevant court cases to justify your position. If you are

undecided, explain why.

The short answer to the question is no. The sine qua non of age discrimination cases is whether age

was the determinative factor in the personnel decision. While the data compiled in Exhibit 3.1.3

made a case that poor personnel decisions may have been made, nothing is presented which

2. What (if any) further information should be ascertained before the county fully understands

the legal implications of its actions?

The missing ingredient in this case is the performance data on Mr. Zimpfer. The attorney

representing the defending county asked the expert if Mr. Zimpfer’s performance on the various

relevant tasks was a factor that could and should be considered by the county and, of course, the

3. Who has the ultimate burden in proving age discrimination in this case and what is that

burden?

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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.

4. What policies should the county adopt to reduce the possibility of age discrimination suits in

the future?

A process of selection such as that adopted by the expert but which incorporates any actual job

5. Could Palm Beach County be vuilnerable to a future ADEA lawsuit using using “disparate

impact” theory? If so, who would have the ultimate burden in such a case and what would

the burden be? What critical Supreme Court ruling is relevant to this question?

Palm Beach county could be vulnerable to ADEA lawsuits based on disparate impact due to the 2005

Supreme Court decision in Smith v. Jackson. In addition to Smith v. City of Jackson (03-1160) 544 U.S.

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Chapter Exercise 3.2

Goebel et al. v. Frank Clothiers

Objectives. The purpose of Exercise 3.2 is to illustrate the role of statistics in Title VII cases and to

the plaintiffs (16 out of 36 positions were filled with African-Americans). Connecticut also made final

decisions that were quite favorable to blacks. However, as in Connecticut v. Teal, the adverse impact

analysis established a prima facie case of discrimination against Mr. Goebel and others at the first

hurdle in the selection process. Using the four-fifths rule at this step, adverse impact was found

against blacks.

But the Supreme Court ruled in Connecticut v. Teal (1982) that the “bottom line” is not an

acceptable legal defense in such a case. Rather, the “job relatedness” argument must be

made for any step where “prima facie” evidence is presented. Thus, in Connecticut v. Teal,

the burden was on the defendant to prove the test was “job related” even though the state

had actually promoted a proportional number of African–Americans. “

The burden of proof then shifts to Frank Clothiers; Frank must show the intelligence test is “job

related.” The key questions with regard to the “job relatedness” of the test are as follows:

1. Is there a job analysis that can justify the use of the test?

2. Is there any evidence of content or empirically– based validity for the test from

either this particular setting or somewhere else where a similar job is performed?

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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.

The answers to these questions are critical for determining the appropriate action the organization

should take (these issues are examined in great detail in Chapter 6). Table 3.2.1 presents

recommended answers for each of the questions on Form 3.2.1.

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Table 3.2.1

Form 3.2.1

Answers

1. Were Mr. Goebel and other African-American applicants victims of racial discrimination

because of the hiring policies of Frank Clothiers? Explain your position and cite all relevant

Supreme Court decisions. If you cannot take a definitive position, explain what information

you require to be able to take a position.

The data presented indicates prima facie evidence of discrimination at the step in which Mr. Goebel

2. Is there evidence of disparate impact against African Americans in the decisions that were

made? Illustrate how the “80 percent rule” can be used with the data in Exhibit 3.2.1 and

whether there was a violation of this rule.

There is a clear violation of the four-fifths rule at Step 1 of the selection process. While 49% of the

3. If disparate impact is evident, what step should the defendant take next? Provide specific

recommendations.

The defendant must either develop an argument (hopefully based on the data) that the test is valid or

endeavor to settle the case. Since the plaintiff will follow this line, a study is needed which explores

the use of alternative methods of selection that are “job related” and either as valid or more valid,

but which do not result in as much (if any) adverse impact. The need for the particular cut-off score,

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| Appendix B – Chapter Exercises

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which resulted in a violation of the four-fifths rule should also be examined. Could the cut-off score

be lowered to eliminate the adverse impact?

From page 66- “Evidence of a significant correlation between test scores and job performance is

considered ideal to support an argument of job relatedness. HRM specialists conduct such studies

routinely to evaluate the use of a test or selection procedure.”

From page 65- “Remember that these statistical data establish only prima facie evidence of

discrimination. The employer still has the opportunity to prove “job relatedness” and/or “business

necessity” for the practice or procedure. Such statistical analysis can also be used in

disparate treatment cases to buttress a claim of intentional discrimination and a “pattern

and practice” of such discrimination.”

From page 66- “Could the company “borrow” a validity study based on data collected in several other

organizations? Called validity generalization (VG) studies and based on meta-analytic

research, there are now many studies based on the correct assumption that the mean of several

correlational studies is probably a strong basis for concluding that there is a valid relationship

4. An associate of the Personnel Department proposes that Frank should continue to use the

examination but that the test scores should be interpreted by the ethnic classification of the

test taker. For example, raw scores on the exam would be converted to percentages within

ethnic classification. With such a procedure, African-Americans taking the test who receive

the exact raw score as whites would receive a higher percentage score on the exam because

of the within-ethnic interpretation. He argues that this procedure would enable Frank to

continue using a valid and useful test while avoiding adverse impact (Mr. Goebel would have

advanced to the interview with this approach). Take a position on this recommendation.

From page 65- “The practice of race (and gender) norming was outlawed by the Civil Rights Act of

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5. Gordon Howe, a white male, scored 48 on the WPT and was interviewed but not hired.

Does Mr. Howe have a possible Title VII lawsuit? Could whites who were interviewed but

not hired file a Title VII class-action lawsuit?

Mr. Howe may have a case. The process of making final decisions should be analyzed since the 80%

rule works both ways. The data seem to indicate an 80% rule violation at the interview stage. The

6. Can “disparate impact” theory be used in cases involving subjective selection processes like

interviews? What Supreme court case supports your position?

Subjective selection processes such as interviews are subject to “disparate impact” theory lawsuits

(Watson v. Ft. Worth Bank & Trust, 1988). See page 68. “This decision is of course critical for