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Chapter Ten: Human Resource Management
Table of Contents
Brief Chapter Outline...............................................................................................2
Chapter Outline and Lecture notes..........................................................................3
Key Terms................................................................................................................ 9
Suggested Text
Responses………………………………………………………………………….. 11
Class Activities and Sample Assignments.............................................................14
Discussion Questions for Online/Hybrid classes....................................................15
Lecture Links......................................................................................................... 18
Lecture Link 10.1: The ADA & the New Entrepreneur.........................................18
Lecture Link 10.2: The Attorney Relationship at the New Small Business..........19
Lecture Link 10.3: The Entrepreneur & the EEOC..............................................20
Bonus Internet Exercises.......................................................................................21
Bonus Internet Exercise 10.1: OSHA & the New Entrepreneur...........................21
Bonus Internet Exercise 10.2: Entrepreneurs Promote a Drug-Free Workplace. 22
Bonus Internet Exercise 10.3: Entrepreneurs & Unemployment Insurance (UI). 23
Critical Thinking Exercises..................................................................................... 24
Critical Thinking Exercise 10.1: A Society of Human Resource Managers..........24
Critical Thinking Exercise 10.2: The Entrepreneurial Interview Checklist for
Success.............................................................................................................. 26
Critical Thinking Exercise 10.3: The Job Descriptions at the New Small Business
........................................................................................................................... 28
Bonus Cases.......................................................................................................... 30
Bonus Case 10.1: Performance Reviews at the Small Business.........................30
Bonus Case 10.2: Health Care Expenses at the Small Business.........................32
Bonus Case 10.3: A Recent Workers’ Compensation Lawsuit............................34
Endnotes............................................................................................................... 35
Brief Chapter Outline
I. Learning Objectives (text page 185)
IM 10-1
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter Ten: Human Resource Management
.
Explain the elements of human resources.
Discuss the process of hiring employees.
Analyze the means for retaining employees.
Determine the pertinent aspects of employee probation and firing.
Understand Broad Coverage Regulations and Laws
Distinguish the unique aspects of human resources within a family business.
II. The Elements Human Resources (text page 187)
Learning Objective 10-1: Explain the elements of human resources.
III. The Process of Hiring Employees.(text pages 187 through 193)
Learning Objective 10-2: Discuss the process of hiring employees.
IV. The Means for Retaining Employees (text pages 193 through 197)
Learning Objective 10-3: Analyze the means for retaining employees.
V. The Pertinent Aspects of Employee Probation and Firing Employees (text page
198)
Learning Objective 10- 4: Determine the pertinent aspects of employee probation
and firing.
VI. Broad Coverage Regulations and Laws (text pages 198 through 200)
Learning Objective 10–5: Understand Broad Coverage Regulations and Laws
VII. The Unique Aspects of Human Resources Within a Family Business (text pages
200 and 201)
Learning Objective 10-6: Distinguish the unique aspects of human resources
within a family business
VIII. For Review (text page 202)
Chapter Outline and Lecture notes
1. Learning Objectives (text page 185)
Explain the elements of human resources.
Discuss the process of hiring employees.
Analyze the means for retaining employees.
Determine the pertinent aspects of employee probation and firing.
IM 10-2
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter Ten: Human Resource Management
Understand Broad Coverage Regulations and Laws
Distinguish the unique aspects of human resources within a family business.
2. The elements of Human Resources
Learning Objective 10-1:Explain the elements of human resources
A. Defining human resources (text page 187)
i. As defined in economics, it is the quantity and quality of
human effort directed toward producing goods and services
B. Actions required of owner
i. Hiring employees
ii. Job descriptions
iii. Job advertisements
iv. Discrimination
v. Interviews
vi. Testing
vii. Job offers
C. Employee retention
i. Compensation and benefits
ii. Wages and hours requirements
iii. Performance Reviews
D. Difficult employees
i. Probation
ii. Firing
3. The Process of Hiring Employees (text pages 187 through 193)
Learning Objective 10-2: Discuss the process of hiring employees
A. Job description
i. Document that describes the job that is to be filled
1. In writing
ii. Includes skills and capabilities
iii. Written to share job information with potential employee
B. Job advertising
i. Notify college placement offices
ii. Notify trade associations
iii. Notify employment agencies
iv. Post help wanted signs
v. Place help wanted add (expensive) in a newspaper or online
vi. Conduct job recruiting to attract high-skilled employees
IM 10-3
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter Ten: Human Resource Management
vii. Anything written should be concise and oriented toward basic
information needed for an applicant to evaluate the position
viii. Ask for a resume and a list of references
1. Avoid discrimination
a. In the workplace it includes hiring, dismissal, level of
pay, and promotions based on race, color, gender,
religious beliefs, or national origin of the employee.
Such actions are prohibited by federal and state laws
C. Interview
i. Information to be gotten from the application and interview
1. Name, address, telephone numbers (home, cell), e-mail
address
2. Addresses for the past three years
3. Social security number (SSN)
4. Driver’s license number and state of issue
5. Previous and related work history
6. Date available to work
7. Position for which candidate is applying
8. Referral source
9. Education and training
10.Professional organization memberships
11. Record of any conviction
a. Details of the conviction
12.Proof of citizenship
a. Proof of authorization to work in the United States
13.References
ii. Discrimination topics to be avoided
1. Age
2. Race
3. Disability
4. Gender
5. National Origin
6. Religion or creed
iii. Check references
iv. Consider background check
D. Testing
i. Included in applicant decision process
ii. Drug-free workplace
iii. Conflict of employee rights
iv. Consult an attorney to avoid employee rights issues
v. Skill testing
vi. Basic requirement of a position
vii. Personality tests
IM 10-4
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter Ten: Human Resource Management
E. The offer and response
i. Select candidate
ii. Extend offer
iii. Negotiations
iv. Candidate accepts offer
v. Candidate denies offer
vi. Put offers in writing after the offer is agreed by candidate
vii. Position is closed when candidate returns offer in writing
4. The Means for Retaining Employees (text pages 193 through 197)
Learning objective 10-3: Analyze the means for retaining employees
A. Compensation
i. Equity theory
1. The theory that we all judge how we are treated relative to
how we see others being treated
2. Systematic reviews
a. Consider how employees perform relative to their job
objectives
b. Plan for future employee growth through experience
and training
c. Define objectives for the next year
d. Award pay raise
3. Hourly wage
a. The amount paid per hour for work performed
4. Salary
a. A set amount of compensation for a given time period
i. Commission
1. Some percentage of sales, typically
associated with the compensation for
sales representatives
ii. Hybrid compensation systems
1. A compensation system where there is a
salary along with commission
2. Profit sharing is an example of hybrid
compensation system. The firm may set
some relatively low level of salary but
offer to share a percentage of the profits
at the end of the year or some other
period of time with the employees
3. Bonus system is similar to profit sharing
IM 10-5
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter Ten: Human Resource Management
a. A reward offered to employees
based on their performance
b. Bonus systems are not as well
defined as profit sharing; instead,
the level of reward is left to the
discretion of the entrepreneur
B. Legal issues with Pay
1. Fair Labor Standards Act (FLSA)
1. Establishes a minimum wage for workers
2. It standardizes the minimum wage
3. Cities may have “living wage” requirements which may
be higher than the FLSA minimum wage
4. It specifies that nonexempt employees who work over 40
hours per week are to be paid at the rate of time and half
5. It does not permit compensatory time
6. It regulates the age children can work
C. Benefits
i. Paid vacations
ii. 401(k) plan
iii. Paid holidays
iv. Medical care
v. Retirement plans
vi. Sick leave
vii. Life insurance
D Performance reviews
i. The review done by the entrepreneur of the employee’s goals and
outcomes on those goals over some given period
5. The Pertinent Aspects of Employee Probation and Firing (text page 198)
Learning Objective 10-4: Determine the pertinent aspects of employee probation
and firing.
A. Develop paper trails
i. A poor performing employee should be documented
ii. Failure to document can result in lawsuit
iii. Investigates legitimate reasons for the poor performance
iv. Allow the employee time to correct the performance issue
v. If needed contact an attorney for advice
vi. Non-compete agreements or secrecy agreements signed by an
employee when hired may prevent problems later
IM 10-6
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter Ten: Human Resource Management
6. Broad Coverage Regulations and Laws (text pages 198 through 201)
Learning Objective 10-5: Understand Broad Coverage Regulations and Laws
A. Worker’s Compensation
i. Laws designed so that employees who are disabled or injured while
on the job are provided with some type of compensation
B. The Occupational Safety and Health Administration (OSHA)
i. Charged with protecting the health of workers
C. Unemployment Compensation
i. Financial assistance for some period of time to those people who
lose their jobs through no fault of their own; provided in every state
by law
D. The Americans with Disabilities Act (ADA)
i. Covers firms with 15 employees or more
ii. Requires that each and every business provide unfettered access
to all disabled people
iii. Requires ramps, elevators and Braille signs as appropriate
iv. Requires special accommodations for employees who need
physical adaptations to work at the firm
v. Cities or States may have requirements beyond ADA requirements
7. The Unique Aspects of Human Resources Within a Family Business (text pages
200 and 201)
Learning objective 10-6: Distinguish the unique aspects of human resources
within a family business
a. Human resource issues are still important
b. Hiring is not done the same as with traditional hiring practices
c. Such hiring does not eliminate discrimination issues
d. Discipline creates ruptures in the family structure
e. Succession planning can be tricky in a family business
a. Choose the successor
b. Prepare the successor
c. Allow a son or daughter to handle the business decisions before
considering retirement
d. Sibling rivalry may cause problems
8. For Review (text page 202)
IM 10-7
Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
