Chapter 17
Human Resource Policies
and Practices
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
17-1. Describe the value of recruitment methods.
17-2. Specify initial selection methods.
17-3. Identify the most useful substantive selection methods.
17-4. Compare the main types of training.
17-5. List the methods of performance evaluation.
17-6. Describe the leadership role of HR in organizations.
INSTRUCTOR’S RESOURCES
Instructors may wish to use the following resources when presenting this chapter.
Text Exercises
Career OBjectives: How Do I Fire Someone?
An Ethical Choice: HIV/AIDS and the Multinational Organization
Myth or Science?: “The 24-Hour Workplace Is Harmful”
Personal Inventory Assessment: Positive Practices Survey
Point/Counterpoint: Employers Should Check Applicant Criminal Backgrounds
Questions for Review
Experiential Exercise: Designing an Effective Structured Job Interview
Ethical Dilemma: Are On-Demand Workers Really Employees?
Text Cases
Case Incident 1: Getting A Foot In The Door
Case Incident 2: You May Be Supporting Slavery
Instructor’s Choice
This section presents an exercise that is NOT found in the student’s textbook. Instructor’s Choice
reinforces the text’s emphasis through various activities. Some Instructor’s Choice activities are
centered on debates, group exercises, Internet research, and student experiences. Some can be
used in class in their entirety, while others require some additional work on the student’s part.
The course instructor may choose to use these at any time throughout the class—some may be
more effective as icebreakers, while some may be used to pull together various concepts covered
in the chapter.
Web Exercises
At the end of each chapter of this Instructor’s Manual, you will find suggested exercises and
ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics on the
Web” are set up so that you can simply photocopy the pages, distribute them to your class, and
make assignments accordingly. You may want to assign the exercises as an out-of-class activity
or as lab activities with your class.
Summary and Implications for Managers
An organization’s human resource (HR) policies and practices create important forces that
greatly influence organizational behavior (OB) and important work outcomes. HR departments
have become increasingly integral in shaping the composition of the organization’s workforce.
First, as more organizations have turned to internal recruitment methods, HR departments have
taken the lead in creating online portals and other easy-access methods for candidates to learn
about the organization and be attracted to apply. Second, HR departments are involved in all
phases of selection: initial selection, substantive selection, and contingent selection. The greatest
increase in the involvement of HR in selection may be in the initial selection phase, wherein HR
professionals develop, monitor, and screen the great numbers of applications that are submitted.
However, HR involvement has increased in all areas of selection, and HR professionals are
responsible for understanding the applicable laws and guidelines to serve as an informed,
up-to-date resource for managers. In effective organizations, HR remains present throughout an
employee’s time with the organization. HR departments create and administer training and
development programs, and they set policies and practices with top management that govern the
performance evaluation system. HR serves in a leadership capacity with responsibilities
including the need to regularly communicate practices to employees, design and administer
benefit programs, manage work-life conflicts, and conduct mediations, terminations, and layoffs.
HR should bring an awareness of ethical issues to all stages of an individual’s experience with
the organization. Knowledgeable HR professionals are therefore a great resource to all levels of
the organization, from top management to managers to employees. Specific implications for
managers are below:
An organization’s selection practices can identify competent candidates and
accurately match them to the job and the organization. Consider assessment methods
that are most likely to evaluate the skills directly needed for jobs you are looking to
fill.
Use training programs for your employees to achieve direct improvement in the skills
necessary to successfully complete the job. Employees who are motivated will use
those skills for greater productivity.
Training and development programs offer ways to achieve new skill levels and thus
add value to your organization. Successful training and development programs
include an ethical component.
Use performance evaluations to assess an individual’s performance accurately and as
a basis for allocating rewards. Make sure the performance evaluations are as fair as
possible. As demonstrated in Chapter 7 in our discussion of equity theory, evaluations
perceived as unfair can result in reduced effort, increases in absenteeism, or a search
for another job.
Give your employees the opportunity to participate in their evaluations so they
understand the performance criteria and engage with the improvement process.
This chapter begins with a discussion of Starbucks’ commitment to reimburse employees for their college courses.
The message of this chapter is that human resource (HR) policies and practices—such as employee recruitment,
selection, training, and performance management—influence an organization’s effectiveness. Studies show that
managers—even HR managers—often don’t know which HR practices work and which don’t, so they constantly
experiment with techniques ranging from free tuition to stress-based interviews. Let’s discuss both new and
tried-and-true methods, and their effect on OB, beginning with the recruitment function.
BRIEF CHAPTER OUTLINE
I. Recruitment Practices
A. The first stage in any HR program is recruiting, closely followed by selection.
1. A selection system can only be as good as the individuals who apply in the first place.
B. Strategic recruiting has become a cornerstone for many companies, in which recruiting
practices are developed in alignment with long-term strategic goals.
C. As for defining “success” in recruiting, most research suggests that the best system
attracts candidates who are highly knowledgeable about the job and the organization.
1. Such candidates are likely to have a better fit between their skills and job
requirements, and to be more satisfied in the jobs they take.
2. Consistent with these findings, some of the most effective recruiting techniques
include internal referrals, internship programs, and other methods that give potential
applicants enough information to adequately evaluate the roles they may be
occupying.
3. Companies are increasingly turning away from outside recruiting agencies and
relying on their own executives and HR professionals for talent searches.
D. The most effective recruiters—internal or external—are well informed about the job, are
efficient in communicating with potential recruits, and treat recruits with consideration
and respect. They also use a variety of online tools, including job boards and social
media, to bring in applications.
II. Selection Practices
A. Introduction
1. The objective of effective selection is to match individual characteristics with the
requirements of the job.
B. How the Selection Process Works (Exhibit 17-1)
1. Applicants go through several sections: initial, substantive, and contingent.
C. Initial Selection
1. Initial selection devices are the first information applicants submit and are used for
preliminary rough cuts to decide whether the applicant meets the basic qualifications
for a job.
2. Application form
a. Not a good predictor of performance.
b. Good initial screen.
c. Apply online.
d. Care should be exercised on the questions included in an application to avoid
conflict with legal and ethical limitations.
3. Background checks
a. 80% of employees check references.
b. Rarely is useful information gained.
c. Letters of recommendation are another form of background check.
d. Many employers will now search for candidates online through a general Internet
search or through a targeted search on social networking sites.
e. Finally, some employers check credit histories or criminal records.
f. Despite the trend, because of the invasive nature of such checks, employers need
to be sure there is a need for them.
g. To further complicate matters, not checking can carry a legal cost.
III. Substantive and Contingent Selection
A. Introduction
1. Heart of the selection process.
2. Used after passing initial screening.
B. Written tests
1. Typical written tests are tests of intelligence or cognitive ability, personality, and
integrity.
2. Long popular as selection devices, they declined in use because between the late 1960
and mid-1980s they were characterized as discriminating, and they were not
validated.
3. Intelligence or Cognitive Ability Tests
a. Tests in intellectual ability, spatial and mechanical ability, perceptual accuracy,
and motor ability have shown to be moderately valid predictors for many
semiskilled and unskilled operative jobs.
b. Intelligence tests are particularly good predictors for jobs that require cognitive
complexity.
4. Personality Tests
a. Personality tests are inexpensive and simple to administer, and their use has
grown.
b. However, concern about applicants faking responses remain, partly because it’s
fairly easy to claim to be hard-working, motivated, and dependable when asked in
a job application setting even if it’s not accurate, and partly because applicants
aren’t always aware they are faking.
5. Integrity Tests
a. As ethical problems have increased in organizations, integrity tests have gained
popularity.
b. These paper-and-pencil tests measure dependability, carefulness, responsibility,
and honesty.
c. They have proven to be powerful predictors of supervisory ratings of job
performance and of theft, discipline problems, and excessive absenteeism.
6. Performance simulation tests
a. Although they are more complicated to develop and administer than written tests,
performance-simulation tests have higher face validity (which measures whether
applicants perceive the measures to be accurate), and their popularity has
increased.
b. The three best-known performance simulation tests are work samples, assessment
centers, and situational judgment tests.
c. Work sample tests
i. Hands-on simulations of part or the entire job that must be performed by
applicants.
ii. Work samples are increasingly used for all levels of employment.
d. Assessment centers
i. Assessment centers use a more elaborate set of performance simulation tests,
specifically designed to evaluate a candidate’s managerial potential.
e. Situational judgment tests
i. To reduce the costs of job simulations, many organizations have started to use
situational judgment tests, which ask applicants how they would perform in a
variety of job situations and compare their answers to those of
high-performing employees.
f. Realistic job previews
i. These job tryouts are given as a way to assess talent versus experience.
ii. They decrease turnover because both employers and new hires know what
they are getting into ahead of time.
7. Interviews
a. The interview continues to be the device most frequently used.
b. It seems to carry a great deal of weight.
c. The candidate who performs poorly in the employment interview is likely to be
cut, regardless of his/her experience, test scores, or letters of recommendation,
and vice versa.
d. This is important because of the unstructured form of most selection interviews.
i. The unstructured interview—short in duration, casual, and made up of
random questions—is an ineffective selection device.
ii. Without structure, interviewers tend to favor applicants who share their
attitudes, give undue weight to negative information, and allow the order in
which applicants are interviewed to influence their evaluations.
iii. To reduce bias, managers should adopt a standardized set of questions, a
uniform method of recording information, and standardized ratings of
applicants’ qualifications.
e. Interview effectiveness also improves when employers use behavioral structured
interviews, probably because these assessments are less influenced by interviewer
biases.
i. They require applicants to describe how they handled specific problems and
situations in previous jobs, based on the assumption that past behavior offer
the best predictor of future behavior.
ii. Panel interviews also minimize the influence of individual biases and have
higher validity.
f. Most organizations use interviews as more than a prediction of performance
device.
C. Contingent Selection Tests
1. Once an applicant has passed substantive selection (such as background checks,
interviews, etc.), the person is ready to be hired subject to a final check.
2. One common contingent method is a drug test.
3. Under the Americans with Disabilities Act, firms may not require employees to pass a
medical exam before a job offer is made.
IV. Training and Development Programs
A. Introduction
1. Skills deteriorate and can become obsolete.
2. U.S. corporations with 100 or more employees spent more than $125 billion on
formal training in a recent year.
B. Types of Training
1. Introduction
a. There are four general skill categories for training—basic, technical,
interpersonal, and problem solving skills—and civility and ethics training.
2. Basic skills
a. One survey of more than 400 human resources professionals found that 40 percent
of employers believe high school graduates lack basic skills in reading
comprehension, writing, and math.
b. Organizations find they must provide basic reading and math skills for their
employees.
3. Technical skills
a. Most training is directed at upgrading and improving an employee’s technical
skills.
b. Technical training is important for two reasons—new technology and new
structural designs.
c. Indian companies have faced a dramatic increase in demand for skilled workers in
areas like engineering for emerging technologies, but many recent engineering
graduates lack up-to-date knowledge required to perform these technical tasks.
d. As organizations flatten their structures, expand their use of teams, and break
down traditional departmental barriers, employees need mastery of a wider
variety of tasks and increased knowledge of how their organization operates.
4. Problem-solving skills
a. Problem-solving training for managers and other employees can include activities
to sharpen their logic, reasoning, and problem defining skills as well as their
abilities to assess causation, develop and analyze alternatives, and select
solutions.
b. Problem-solving training has become a part of almost every organizational effort
to introduce self-managed teams or implement quality-management programs.
5. Interpersonal skills
a. Almost all employees belong to a work unit.
b. Their work performance depends on their ability to effectively interact with their
coworkers and bosses.
6. Civility training
a. As human resource managers have become increasingly aware of the effects of
social behavior in the workplace, they have paid more attention to the problems of
incivility, bullying, and abusive supervision in organizations.
i. Examples of incivility include being ignored, being excluded from social
situations, having your reputation undermined in front of others, and
experiencing other actions meant to demean or disparage.
b. Researchers have shown that these forms of negative behavior can decrease
satisfaction, reduce job performance, increase perceptions of unfair treatment,
increase depression, and lead to psychological withdrawal from the workplace.
c. Managers can try to minimize incivility, bullying, and abusive supervision using
specifically targeted training.
d. Following a training intervention based on these principles, coworker civility,
respect, job satisfaction, and management trust have increased, while supervisor
incivility, cynicism, and absences decreased.
e. Thus, the evidence suggests that deliberate interventions to improve the
workplace climate for positive behavior can indeed minimize the problems of
incivility.
7. Ethics training
a. It is common for employees to receive ethics and values guidance incorporated in
new-employee orientations, developmental programs, or as periodic
reinforcements of ethical principles.
b. Critics argue that ethics are based on values, and value systems are fixed at an
early age.
c. Supporters of ethics training argue that values can be learned and changed after
early childhood.
d. Even if it could not, it helps employees to recognize ethical dilemmas, become
more aware of the ethical issues underlying their actions, and reaffirms an
organization’s expectations.
e. Ethic training also reaffirms an organization’s expectations that members will act
ethically.
C. Training Methods
1. Historically, training meant formal training. It is planned in advance and has a
structured format.
2. Organizations are increasingly relying on informal training.
a. Unstructured, unplanned, and easily adapted to situations and individuals.
b. Most informal training is nothing other than employees helping each other out.
3. Job Training. On-the-job training includes job rotation, apprenticeships, understudy
assignments, and formal mentoring programs.
4. The most popular is live classroom lectures.
5. Computer-Based Training. Recently, e-training (computer-based training) is the
fastest growing training delivery mechanism.
D. Evaluating Effectiveness
1. The effectiveness of a training program can refer to the level of student satisfaction,
the amount students learn, the extent to which they transfer the material from training
to their jobs, or the financial return on investments in training.
2. The success of training also depends on the individual.
3. The climate also is important: when trainees believe there are opportunities and
resources to let them apply their newly learned skills, they are more motivated and do
better in training programs.
4. After-training support from supervisors and coworkers has a strong influence on
whether employees transfer their learning into new behavior.
5. An effective training program requires not just teaching the skills but also changing
the work environment to support the trainees.
V. Performance Evaluation
A. What Is Performance?
1. In the past, most organizations assessed only how well employees performed the tasks
listed on a job description, but today’s less hierarchical and more service-oriented
organizations require more.
2. Researchers now recognize three major types of behavior that constitute performance
at work:
a. Task performance
b. Citizenship
c. Counter productivity
3. Most managers believe good performance means doing well on the first two
dimensions and avoiding the third.
B. Purposes of Performance Evaluation
1. Management uses evaluations for general human resource decisions, such as
promotions, transfers, and terminations.
2. Evaluations identify training and development needs.
3. They pinpoint employee skills and competencies needing development.
4. They provide feedback to employees on how the organization views their performance
and are often the basis for reward allocations including merit pay increases.
5. We will emphasize performance evaluation in its role as a mechanism for providing
feedback and as a determinant of reward allocations.
C. What Do We Evaluate?
1. Introduction
a. The criteria or criterion used to evaluate performance has a major influence on
performance.
i. The three most popular sets of criteria are individual task outcomes,
behaviors, and traits.
2. Individual task outcomes
a. If ends count, rather than means, then management should evaluate an employee’s
task outcomes.
3. Behaviors
a. It is difficult to attribute specific outcomes to the actions of employees in advisory
or support positions or employees whose work assignments are part of a group
effort.
b. We may readily evaluate the group’s performance, but if it is hard to identify the
contribution of each group member, management will often evaluate the
employee’s behavior.
c. Measured behaviors needn’t be limited to those directly related to individual
productivity.
4. Traits
a. Traits may or may not be highly correlated with positive task outcomes, but only
the naive would ignore the reality that such traits are frequently used in
organizations for assessing performance.
D. Who Should Do the Evaluating?
1. By tradition, the task has fallen to managers, because they are held responsible for
their employees’ performance.
2. But others may do the job better.
3. A recent survey found that about half of executives and 53 percent of employees now
have input into their performance evaluations.
4. In most situations, in fact, it is highly advisable to use multiple sources of ratings.
5. Any individual performance rating may say as much about the rater as about the
person being evaluated.
6. The latest approach to performance evaluation is 360-degree evaluations.
a. These provide performance feedback from the employee’s full circle of daily
contacts, from mailroom workers to customers to bosses to peers. (Exhibit 17-2)
b. The number of appraisals can be as few as 3 or 4 or as many as 25. Most
organizations collect 5 to 10 per employee.
7. Some allow employees to choose the peers and subordinates who evaluates them,
which can artificially inflate feedback.
a. There is clear evidence that peers tend to give much more lenient ratings that
supervisors or subordinates, and peers also tend to make more errors in appraising
performance.
E. Methods of Performance Evaluation
1. Written essays
a. The simplest method of evaluation is to write a narrative describing an
employee’s strengths, weaknesses, past performance, potential, and suggestions
for improvement.
b. No complex forms or extensive training is required, but the results often reflect
the ability of the writer.
2. Critical incidents
a. Critical incidents focus on those behaviors that are key in making the difference
between executing a job effectively and executing it ineffectively.
b. The appraiser writes down anecdotes that describe what the employee did that
was especially effective or ineffective.
c. A list of critical incidents provides a rich set of examples to discuss with the
employee.
3. Graphic ratings scales
a. Graphic rating scales refer to a set of performance factors, such as quantity and
quality of work, depth of knowledge, cooperation, loyalty, attendance, honesty,
and initiative.
b. The evaluator then goes down the list and rates each on incremental scales. The
scales typically specify five points.
c. Popular because they are less time-consuming to develop and administer and
allow for quantitative analysis and comparison.
4. Behaviorally anchored rating scales (BARS)
a. BARS combine major elements from the critical incident and graphic rating scale
approaches.
b. The appraiser rates the employees based on items along a continuum, but the
points are examples of actual behavior.
c. To develop the BARS, participants first contribute specific illustrations of
effective and ineffective behavior, which are translated into a set of performance
dimensions with varying levels of quality.
5. Forced comparisons
a. Forced comparisons evaluate one individual’s performance against the
performance of one or more. It is a relative rather than an absolute measuring
device.
b. The two most popular are group order ranking and individual ranking.
i. The group order ranking requires the evaluator to place employees into a
particular classification, such as top one-fifth or second one-fifth.
This method is often used in recommending students to graduate