978-1259912191 Chapter 10 Solutions Manual Part 1

Chapter Ten: Human Resource Management

Key Terms

Bonus: Similar to profit sharing, a reward offered to the employees based on their

performance. Typically, bonus systems are not as well defined as profit sharing; instead,

the level of reward is left to the discretion of the entrepreneur. (LO 10-3)

Commission: Payment by the entrepreneur of some percentage of sales, typically

associated with the compensation of sales representatives. (LO 10-3)

Discrimination: In the workplace, hiring, dismissal, level of pay, or promotions based

on race, color, gender, religious beliefs, or national origin of the employee. Such actions

are prohibited by federal and state laws. (LO 10-2)

Equity Theory: The theory that we all judge how we are treated relative to how we see

others being treated. (LO 10-3)

Fair Labor Standards Act (FLSA): The act that established a minimum wage for

workers. (LO 10-3)

Hourly Wage: The amount paid per hour for work performed. (LO 10-3)

Human Resources: As defined in economics, the quantity and quality of human effort

directed toward producing goods and services. (LO 10-1)

Hybrid compensation system: A compensation system where there is a salary along

with commission. (LO 10-3)

Job description: Document that describes the job that is to be filled. (LO 10-2)

OSHA: The Occupational Safety and Health Administration, which is charged with

protecting the health of workers. (LO 10-5)

Performance Review: Review by the entrepreneurial business owner of the

employees’ goals and outcomes on those goals over some given period. (LO 10-3)

Profit Sharing: An example of a 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. (LO 10-3)

Salary: A set amount of compensation for a given time period. (LO 10-3)

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Chapter Ten: Human Resource Management

Opening Vignette – “Olga Kay-Moosh Walks” – p. 185

Student responses will vary

Exercise 1 – p. 188

Student responses will vary

Exercise 2 – p. 190

Student responses will vary.

Exercise 3 – p. 192

Student responses will vary.

Ethical Challenge – p. 196

1. The questions that your partner is posing are illegal and can lead to legal action by

the candidate. There is no justification for the questions. Your partner should not be part

of the interviewing process.

2. It doesn’t matter. The questions should not be asked.

3. Thank the candidate for his candor and continue with legal questions. A candidate

may become leery of the company based on the type interview that is being conducted.

Review Questions – p.202

1. What means would you suggest to improve the process of hiring the right

people for a new business? Hiring a new employee should include the following

2. What elements should a good job description contain? The job description

3. What are the various ways to advertise a job opening? There are several ways to

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Chapter Ten: Human Resource Management

4. What means would you suggest to help avoid job discrimination? Job

5. What techniques improve the interviewing process? The interviewer should have

6. How can testing be used to improve the hiring decision? Testing candidates on

7. What is the best method for making an offer to a candidate? The owner may

8. How does compensation impact the ability to retain an employee? Employees

9. What legal issues are related to the retaining and firing of employees? The key

10. What benefits might be offered to new employees? Benefits may include paid

11. How are performance reviews related to employee retention? The performance

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Chapter Ten: Human Resource Management

12. Describe the impact that OSHA could have on a new restaurant operation. The

13. How does ADA affect retail organizations? Retail organizations need to provide

14. What is the impact on hiring decisions when the business is family owned and

Activities and Sample Assignments

1. Discuss the various methods of recruitment to hire qualified employees. How does

this recruitment process differ from that of a large firm? (LO 10-2)

2. Ask students to discuss the key concepts related to employee benefits. Why is

health care important to an employee of a small business? Ask students to express

their opinion of a government regulated health care system versus an employer

offered health care package. (LO 10-2)

3. Divide the students into groups of four. Assign the students to a specific job. Next,

ask students to discuss how they would advertise their available jobs in the following

categories. (LO 10-2):

a. Receptionist

b. Office Manager

c. Executive Director

d. Vice President

4. In groups, ask students to discuss how employee benefits can help to retain

employees. Next, ask students why small business owners should offer competitive

compensation and benefits. (LO 10-3)

5. Discuss discrimination in the workplace with the students. Ask students what a small

business owner can do to prevent discrimination. Why is this important? (LO 10-2)

6. Ask students their opinion of employee drug testing. Next, ask students if they

believe it is an invasion of their privacy. (LO 10-2)

7. In groups, ask students to discuss the Fair Labor Standards Act (FLSA). Next, ask

each group to summarize the various issues that can arise as they relate to legal

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Chapter Ten: Human Resource Management

issues with pay. What can the small business owner do to assure compliance with

this act? List responses on a flip chart or the blackboard. (LO 10-3)

Discussion Questions for Online/Hybrid classes

1. Summarize some of the human resource management issues that occur within a

family owned business. Discuss some of the specific obstacles that occur in family

owned businesses. What can the business owner implement to assure the

business runs in the owner’s absence? Be specific. (LO 10-6)

2. Why is workers’ compensation important to a new small business owner? (LO

10-5)

3. Discuss why human resource managers and small business owners document

employee positive and negative employee behaviors? (LO 10-3, 10-4)

4. Explain why benefits are an important part of employee compensation? (LO 10-3)

5. Discuss how small business owners retain employees. Discuss the different

compensation methods as they relate to a small business. (LO 10-3)

6. Explain how an employee with poor performance impacts a small firm. How does

it impact a larger firm? (LO 10-1)

7. Discuss the elements of human resources. Why are they important? (LO 10-1,

10-2, 10-3, 10-4, 10-5, 10-.6)

8. What is the Occupational Safety and Health Administration (OSHA)? Explain why

it is important to a business owner. Be specific. (LO 10-5)

9. What is unemployment compensation? Why do small business owners pay an

unemployment tax to help fund the system? (LO 10-5)

10.Discuss how performance reviews can help an employee to improve job

performance. Be specific. (LO 10-3)

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Chapter Ten: Human Resource Management

Discussion Questions for Online/Hybrid classes

1. Summarize some of the human resource management issues that can occur

within a family owned business. Discuss some of the specific obstacles that

occur in family owned businesses. What can the business owner implement

to assure the business runs in the owner’s absence? Be specific. (LO 10-6)

2. Why is worker’s compensation important to a new small business owner?

3. Discuss why human resource managers and small business owners

document employee positive and negative employee behaviors? (LO 10-3,

4. Explain why benefits are an important part of employee compensation? (LO

5. Discuss how small business owners retain employees. Discuss the different

compensation methods as they relate to the small business. (LO 10-3) It is

6. Explain how an employee with poor performance impacts a small firm. How

does it impact a larger firm? (LO 10-1) Any employee who does not perform

7. Discuss the elements of human resources. Why are they important? (LO

10-1, 10-2, 10-3, 10-4, 10-5, 10-6) The elements of human resources are hiring

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Chapter Ten: Human Resource Management

8. What is the Occupational Safety and Health Administration (OSHA)? Explain

why it is important to a business owner. Be specific. (LO 10-5) OSHA is

9. What is unemployment compensation? Why do small business owners pay

an unemployment tax to help fund the system? (LO 10-5) Unemployment

10.Discuss how performance reviews can help an employee to improve job

performance. Be specific. (LO 10-3) During a performance review, the owner

Lecture Links

Lecture Link 10.1: The ADA & the New Entrepreneur

(LO 10-5)

The authors in the text discussed how the various laws, rules and regulations affect the

new small business. One important law for a new small business owner to study is The

Americans with Disability Act (ADA). This is a civil rights law that prohibits the

discrimination against people with disabilities in their everyday activities (Government,

2009)i. It is a good resource that ensures a new small business owner complies with the

law.

Visit the ADA website at http://www.ada.gov and type in “ Business Connection Link” in

the search box at the upper right hand corner and review the data provided in order to

learn more about the ADA and how the laws mandate businesses to accommodate

those individuals with disabilities.

Lecture Link 10.2: The Attorney Relationship at the New Small Business

(LO 10-2)

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Chapter Ten: Human Resource Management

The authors in the text stressed the important reasons why a new small business owner

should establish a relationship with an attorney or other professional to assist the owner

with the needs associated with the business. The new small business owner explores

many new areas of the business that are regulated by laws and regulations.

An attorney is a valuable asset to a new small business owner. Visit the FindLaw

Lawyer Directory.at www.findlaw.com and search for an attorney in your area to assist

you with your new small business needs.

Lecture Link 10.3: The Entrepreneur & the EEOC

(LO 10-2)

The U.S. Equal Opportunity Commission (EEOC) is the agency charged with the

enforcement of federal laws as they relate to discrimination. The laws prohibit the

discrimination against job applicants and employees (Laws and Guidance)ii. Visit the

EEOC website at http://www.eeoc.gov/laws/ and study the resources that provide

pertinent data that relates to discrimination in the workplace.

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iADA Homepage. (2009). U.S. Department of Justice. http://www.ada.gov. Retrieved on

February 9, 2015.

iiLaws and Guidance. U.S. Equal Opportunity Commission. http://www.eeoc.gov/laws/. Retrieved on February

9, 2015.