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(a) schools.
ii. The individual ranking approach rank-orders employees from best to worst.
(a) This approach assumes that the difference between the first and second
employee is the same as that between the twenty-first and twenty-second.
(b) This approach allows for no ties.
(c) One parallel to forced ranking is forced distribution of college grades.
(d) Why would universities do this?
(i) As shown in Exhibit 17-3, the average GPA of a Princeton University
undergraduate has gotten much higher over time.
B. Improving Performance Evaluations
1. Introduction
a. The performance evaluation process is a potential minefield.
b. Evaluators can unconsciously inflate evaluations (positive leniency), understate
performance (negative leniency), or allow the assessment of one characteristic to
unduly influence the assessment of others (the halo error).
c. Some appraisers bias their evaluations by unconsciously favoring people who
have qualities and traits similar to their own (the similarity error). And, of course,
some evaluators see the evaluation process as a political opportunity to overtly
reward or punish employees they like or dislike.
d. A review of the literature and several studies on performance appraisals
demonstrates that many managers deliberately distort performance ratings in
order to maintain a positive relationship with their subordinates.
e. Although no protections guarantee accurate performance evaluations, the
following suggestions can make the process more objective and fair.
2. Use multiple evaluators
a. As the number of evaluators increases, the probability of attaining more accurate
information increases.
b. A set of evaluators judges a performance, the highest and lowest scores are
dropped, and the final performance evaluation is made up from the cumulative
scores of those remaining.
c. If an employee has had ten supervisors, nine having rated her excellent and one
poor, we can discount the value of the one poor evaluation.
3. Evaluate selectively
a. Evaluate only those areas in which you have some expertise.
b. Appraisers should be as close as possible, in terms of organizational level, to the
individual being evaluated.
4. Train evaluators
a. There is substantial evidence that training evaluators can make them more
accurate raters.
b. Most rater training courses emphasize changing the raters’ frame of reference by
teaching them what to look for, so everyone in the organization defines good
performance in the same way.
5. Provide employees with due process
a. The concept of due process increases the perception that employees are treated
fairly.
b. Three features characterize due process systems:
i. Individuals are provided with adequate notice of what is expected of them.
ii. All relevant evidence is aired in a fair hearing so individuals affected can
respond.
iii. The final decision is based on the evidence and is free from bias.
c. One technique organizations might consider to enhance due process is posting
appraisals online so employees can see their own performance scores exactly as
the supervisor enters them.
i. One company that did so found employees believed rater accountability and
employee participation were higher when appraisal information was available
online prior to appraisal interviews.
ii. It might be that raters were more sensitive to providing accurate ratings when
they knew employees would be able to see their own information directly.
C. Providing Performance Feedback
1. Managers are often uncomfortable discussing weaknesses with employees.
2. In fact, unless pressured by organizational policies and controls, managers are likely
to ignore this responsibility.
3. The solution to the problem is not to ignore it but to train managers to conduct
constructive feedback sessions.
4. An effective review—in which the employee perceives the appraisal as fair, the
manager as sincere, and the climate as constructive—can leave the employee feeling
upbeat, informed about areas needing improvement, and determined to correct them.
5. Appraisals should also be as specific as possible.
D. International Variations in Performance Appraisal
1. Let’s examine performance evaluation globally in the context of four cultural
dimensions: individualism/collectivism, a person’s relationship to the environment,
time orientation, and focus of responsibility.
2. Individual-oriented cultures such as the United States emphasize formal performance
evaluation systems more than informal systems.
3. In Korea, Singapore, and even Japan, the use of performance evaluation has increased
dramatically in the past decade, though not always smoothly or without controversy.
4. One survey of Korean employees revealed that a majority questioned the validity of
their performance evaluation results.
5. One recent study focused on the banking industry found significant differences across
countries in performance appraisal practices.
6. Formal performance appraisals were used more frequently in countries that were high
in assertiveness, high in uncertainty avoidance, and low in in-group collectivism.
7. Another study found that individuals who were high in power distance and high in
collectivism tend to give more lenient performance appraisals.
II. The Leadership Role of HR
A. Introduction
1. HR also plays a key leadership role in nearly all facets of the workplace environment,
from designing and administering benefit programs to conducting attitude surveys to
drafting and enforcing employment policies.
a. HR is on the front lines in managing adversarial employment conditions such as
work-life conflicts, mediations, terminations, and layoffs.
b. HR is on the scene when an employee joins and leaves, and all along the way.
2. HR departments uniquely represent both the employee’s and the company’s
perspective as needed.
a. Companies have only recently begun to recognize the potential for HR to
influence employee performance.
3. Because employers and employees alike benefit from strong human resource
practices, let’s consider some of the leadership functions of human resources.
B. Communicating HR Practices
1. Leadership by HR begins with informing employees about HR practices and
explaining the implications of decisions that might be made around these practices.
2. It is not enough to simply have a practice in place; HR needs to let employees know
about it. When a company successfully communicates how the whole system of HR
practices has been developed and what function this system serves, employees feel
they can control and manage what they get out of work.
3. The evidence supporting the contribution of communication and perception to HR
effectiveness is considerable.
a. For example, one study of different business units within a large food-service
organization found that employee perceptions of HR practices, rated at the
workgroup level, were significant predictors of OCB, commitment, and intention
to remain with the company, but the HR practices led to these positive outcomes
only if employees were aware they were in place.
4. The effectiveness of HR practices also depends on employee attitudes.
a. One review found that HR practices were more likely to lead to positive outcomes
when employees felt motivated.
5. Practices tend to be perceived differently in various business cultures.
a. For example, the use of educational qualifications in screening candidates seems
to be a universal practice, but aside from this, different countries emphasize
different selection techniques.
b. Structured interviews are popular in some countries and nonexistent in others.
6. Communication is the bridge for HR to demonstrate fairness intentions.
C. Designing and Administering Benefit Programs
1. The responsibility for designing and administering an organization’s benefit program
falls to the HR department, with input from executive management.
2. Ideally, a benefit program should be uniquely suited to the organizational culture,
reflect the values of the organization, demonstrate economic feasibility, and be
sustainable in the long term.
a. Such benefits will likely improve employees’ psychological well-being and
therefore increase organizational performance.
D. Drafting and Enforcing Employment Policies
1. Employment policies that are informed by current laws but go beyond minimum
requirements will help define a positive organizational culture and set high standards
for performance.
a. Policies differ from benefits in that they provide the guidelines for the behavior,
not just the working conditions.
2. Any policy must have enforcement to be effective. Human resource managers are
responsible for setting the organizational consequences of infractions, and often for
enforcing the policies as well.
3. Sometimes, human resource managers will need to take action even when the
employee’s direct manager may not agree, especially if compliance with the law is at
issue.
E. Managing Work-Life Conflicts
1. Work-life conflicts grabbed management’s attention in the 1980s, largely as a result
of the growing number of women, with dependent children, entering the workforce.
2. In response, most major organizations took actions to make their workplaces more
family friendly.
a. They introduced on-site childcare, summer day camps, flextime, job sharing,
leaves for school functions, telecommuting, and part-time employment.
3. But organizations quickly realized work-life conflicts were not limited to female
employees with children.
a. Male workers and women without children were also facing this problem.
b. Heavy workloads and increased travel demands, for instance, made it increasingly
hard for many employees to meet both work and personal responsibilities.
4. Organizations are modifying their workplaces with scheduling options and benefits to
accommodate the varied needs of a diverse workforce.
a. Employees at NestléPurina can bring their dogs into the office; SAS Institute has
on-site child care, a health care center, and a fitness center; and other firms offer
perks ranging from on-site laundry to food services and free child care.
b. Exhibit 17-4 lists some initiatives to help employees reduce work-life conflicts.
5. Time pressures aren’t the primary problem underlying these conflicts.
a. It’s the psychological incursion of work into the family domain and vice versa
when people are worrying about personal problems at work and thinking about
work problems at home.
b. This suggests organizations should spend less effort helping employees with
time-management issues and more helping them clearly segment their lives.
c. Keeping workloads reasonable, reducing work-related travel, and offering on-site
quality childcare are examples of practices that can help in this endeavor.
6. Not surprisingly, people differ in their preference for scheduling options and benefits.
a. Some prefer organizational initiatives that better segment work from their
personal lives, as flextime, job sharing, and part-time hours do by allowing
employees to schedule work hours less likely to conflict with personal
responsibilities.
b. Others prefer ways to integrate work and personal life, such as on-site childcare,
gym facilities, and company-sponsored family picnics.
F. Mediations, Terminations, and Layoffs
1. Human resource departments often take center stage when unpleasant events such as
disputes, substandard performance, and downsizing occur.
2. Employees need to be able to trust their human resource professionals to maintain
appropriate confidentiality and a balanced perspective.
3. Managers need to be able to trust HR, too, to know the laws and represent the
company’s perspective.
4. The HR human resource professional should be well trained in mediation techniques
and rely upon company policies to seek positive resolution.
a. Sometimes, human resource managers are integral to the termination process,
when employees are not able to resolve issues with management.
b. Termination processes are subject to union labor contracts and laws, which can
confound the situation.
i. In Spain, for instance, labor laws have traditionally protected older workers
with near-guaranteed employment.
5. For departing employees, the HR department is often the last stop on their way out
the door.
a. HR managers are thus in charge of leaving a favorable impression with the
employee and collecting helpful input from the exit interview.
b. This is never truer than when organizations terminate employees in layoffs.
c. Employees who think the layoff process was handled fairly are more apt to
recommend the company to others and to return to work if asked.
d. Employees who survive a layoff and stay employed with the company also
evaluate the fairness of the downsizing process, according to another study,
particularly in individualistic countries.
6. In sum, the role of HR is increasing for organizations worldwide, and top
management is realizing human resource leadership is needed to create the cultures
and positive business outcomes top corporations need to stay competitive.
III. Summary and Implications for Managers
A. An organization’s human resource (HR) policies and practices create important forces
that greatly influence organizational behavior (OB) and important work outcomes.
1. HR departments have become increasingly integral in shaping the composition of the
organization’s workforce.
B. 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.
C. Second, HR departments are involved in all phases of selection: initial selection,
substantive selection, and contingent selection.
1. 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.
2. 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.
D. In effective organizations, HR remains present throughout an employee’s time with the
organization.
E. HR departments create and administer training and development programs, and they set
policies and practices with top management that govern the performance evaluation
system.
F. 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.
G. HR should bring an awareness of ethical issues to all stages of an individual’s experience
with the organization.
H. 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:
1. 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.
2. 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 their greater productivity.
3. Training and development programs offer ways to achieve new skill levels and thus
add value to your organization. Successful training and development programs
include and ethical component.
4. 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.
5. Give your employees the opportunity to participate in their evaluations so they
understand the performance criteria and engage with the improvement process.
EXPANDED 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.
i. These also aren’t as useful as they may seem.
ii. Applicants select those who will write good things about them, so almost all
letters of recommendation are positive.
iii. In the end, readers either ignore them or read “between the lines” to try to find
hidden meaning there.
d. Many employers will now search for candidates online through a general Internet
search or through a targeted search on social networking sites.
i. The legality of this practice has come into question, but there is no doubt that
many employers include an electronic search to see whether candidates have
any history that might make them a dubious choice for employment.
ii. For some potential employees, an embarrassing or incriminating photo
circulated through Facebook may make it hard to get a job.
e. Finally, some employers check credit histories or criminal records.
i. A bank hiring tellers, for example, would probably want to know about an
applicant’s criminal and credit histories.
ii. Increasingly, credit checks are being used for nonbanking jobs.
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. Each work sample element is matched with a corresponding job performance
element.
iii. 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.
ii. Line executives, supervisors, and/or trained psychologists evaluate candidates
as they go through one to several days of exercises that simulate real
problems.
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.
ii. One study comparing situational judgment tests to assessment centers found
the assessment center was a better predictor of job performance, although the
difference was not large.
iii. Ultimately, the lower cost of the situational judgment test may make it a better
choice for some organizations than a more elaborate work sample or
assessment center.
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. The data are typically biased and often unrelated to future job performance.
iii. 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.
iv. To reduce bias, managers should adopt a standardized set of questions, a
uniform method of recording information, and standardized ratings of
applicants’ qualifications.
v. Training interviewers to focus on specific dimensions of job performance,
practicing evaluation of sample candidates, and giving interviewers feedback
on how well they were focused on job-relevant characteristics significantly
improves the accuracy of their ratings.
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.
i. Companies use them to assess applicant-organization fit.
ii. So in addition to evaluating specific, job-related skills, they are looking at
personality characteristics and personal values to find individuals who fit the
organization’s culture and image.
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.
a. Drug testing is controversial.
b. Many applicants think testing without reasonable suspicion is invasive or unfair
and say they should be tested on job performance factors, not lifestyle choices that
may not be relevant.
c. Employers might counter that drug use and abuse are extremely costly, not just in
financial terms but also in terms of people’s safety. They have the law on their
side.
d. The U.S. Supreme Court has concluded that drug tests are “minimally invasive”
selection procedures that as a rule do not violate individuals’ rights.
3. Under the Americans with Disabilities Act, firms may not require employees to pass a
medical exam before a job offer is made.
