Chapter 10: Managing Human Resources P a g e | 1
Effective Management 7th Edition
Chapter 10: Managing Human Resources
Pedagogy Map
This chapter begins with the learning outcome summaries and terms covered in the chapter, followed by a
set of lesson plans for you to use to deliver the content in Chapter 10.
Lesson Plan for Lecture (for large sections)
Lesson Plan for Group Work (for smaller classes)
Assignments with Teaching Tips and Solutions
Highlighted Assignments Key Points
What Would You Do? What steps can a local pizza chain take to improve its HR
decisions?
Management Team Decision Students must decide whether employees should be allowed
to use social media at work.
Practice Being a Manager The first exercise gives students practice in navigating the
Chapter 10: Managing Human Resources P a g e | 2
Learning Outcomes
10-1 Explain how different employment laws affect human resource practice.
Human resource management is subject to the following major federal employment laws: Equal Pay Act,
Civil Rights Acts of 1964 and 1991, Age Discrimination in Employment Act, Pregnancy Discrimination
Act, Americans with Disabilities Act, Family and Medical Leave Act, and Uniformed Services
10-2 Explain how companies use recruiting to find qualified job applicants.
Recruiting is the process of finding qualified job applicants. The first step in recruiting is to conduct a job
analysis to collect information about the important work-related aspects of the job. The job analysis is
10-3 Describe the selection techniques and procedures that companies use when deciding which
applicants should receive job offers.
Selection is the process of gathering information about job applicants to decide who should be offered a
job. Accurate selection procedures are valid, are legally defendable, and improve organizational
10-4 Describe how to select appropriate training methods and evaluate the effectiveness of that
training.
Training is used to give employees the job-specific skills, experience, and knowledge they need to do
10-5 Discuss how to use performance appraisal to give meaningful performance feedback.
Most employees and managers intensely dislike the performance appraisal process. Some of the problems
associated with appraisals can be avoided, however, by accurately measuring job performance and
effectively sharing performance feedback with employees. Organizations should develop good
10-6 Describe basic compensation strategies and explain how they affect human resource
practice.
Compensation includes both the financial and the nonfinancial rewards that organizations give employees
in exchange for their work. There are four basic kinds of compensation decisions: pay level, pay
Chapter 10: Managing Human Resources P a g e | 4
10-7 Discuss three kinds of employee separations: termination, downsizing, and turnover.
Employee separation is the loss of an employee; separation can occur voluntarily or involuntarily. Before
firing or terminating employees, managers should give employees a chance to improve. If firing becomes
necessary, it should be done because of job-related factors, such as violating company rules or
Terms
360-degree feedback
adverse impact
employment benefits
employment references
profit sharing
quid pro quo sexual
Lesson Plan for Lecture
Pre-Class Prep for You: Pre-Class Prep for Your Students:
Review chapter and determine what points to
Read Chapter 10, bring book.
Warm Up Begin Chapter 10 by asking students what kind of decisions they think businesses need
to make regarding staffing. Write answers on the board or in a way that students can see
the list grow. Ask, How important do you think staffing decisions are? Why?
Content
Delivery
Lecture slides: Make note of where you stop so you can pick up at the next class
meeting. Slides have teaching notes on them to help you as you lecture.
Topics PowerPoint Slides Activities
10-1a Federal
Employment Laws
10-1b Adverse Impact and
10-1c Sexual Harassment
2: What Would You Do
3: Human Resource
Management
Laws
5: Federal Employment
Laws
6: Adverse Impact and
To illustrate adverse
10-2 Recruiting
10-2a Job Analysis and
Recruiting
10-2b Internal Recruiting
and External Recruiting
10: Recruiting and Job
Analysis
12: Job Description and
Job Specifications for a
Helicopter Pilot
Ask students when a com-
pany should use external
recruiting instead of
internal recruiting. Men-
tion that GE fills nearly 80
10-3 Selection
10-3a Application Forms
and Résumés
10-3c Selection Tests
10-3d Interviews
15: Selection
16: Application Forms
and Résumés
in Application Forms,
Interviews, or Other Parts
of the Selection Process
18: References and
10-4 Training
10-4a Training Methods
10-4b Evaluating Training
24: Training Methods
25: Training Objective
Training Method
26: E-Learning
27: Evaluate Training
To supplement your lecture
on this section, use
examples of well-known
corporate training, like
GEs Crotonville (GE
10-5 Performance
Appraisal
10-5a Accurately
10-5b Sharing
28: Accurately Measuring
Job Performance
29: Subjective
30: Sharing Performance
Chapter 10: Managing Human Resources P a g e | 7
10-6 Compensation
10-6b Employment
32: Compensation
Decisions
10-7 Employee
Separations
10-7b Downsizing
10-7c Employee Turnover
36: Terminating
Employees
Conducting Layoffs
39: Employee Turnover
Management Workplace 40: : Barcelona
Restaurant Group
Launch video in slide 40.
Questions on slide can
guide discussion.
Adjust lecture to include the activities in the right column. Some activities should be
done before introducing the concept, some after.
Chapter 10: Managing Human Resources P a g e | 8
Lesson Plan for Group Work
Pre-Class Prep for You: Pre-Class Prep for Your Students:
Review material to cover and modify the
lesson plan to meet your needs.
Depending on the activities you select and
how contextual you want them to be, you
will need to bring roughly one dozen wanted
ads or Internet job postings.
Read Chapter 10, bring book.
Warm Up Begin Chapter 10 by asking students what kind of decisions they think businesses need
to make regarding staffing. Write answers on the board or somehow so students can see
the list grow. Ask how important they think staffing decisions are.
Content
Delivery
Begin with Section 10-1 on Employment Legislation.
Break for the following activity:
“FMLA”
Divide students into teams of 3 4 students and give them the following scenario: a
middle-aged employee at a retail store is responsible for her disabled child and
elderly mother. She often takes time off to manage driving them to doctors and other
Segue into the sections on Finding Qualified Workers (Sections 10-2 and 10-3) by asking
students, How many of you have been to a campus or other job fair? What was it like?
Based on what you experienced, how difficult do you think it is to find qualified
workers? Why or why not?
There a couple of group activities you could use for this section. The first one involves
job descriptions, and the second, selection tests. Choose one, the other, or both.
“Job Descriptions”
Divide your class into groups of 2 3 students each. Have each group write a job
description and job specifications for one of the following positions:
Chapter 10: Managing Human Resources P a g e | 9
“Work Samples”
For this activity, divide your class into groups of 2 3 students each. Give each group a
list of job openings and have students design a brief work sample test, or tryout, for
that job. Some possibilities include:
Barista at Starbucks Plant manager for a DaimlerChrysler factory
Segue into content on Developing Qualified Workers (Section 10-4).
Lecture on Keeping Qualified Workers (Sections 10-5 and 10-6).
Break for the following group activity:
“Cost-Benefit of Benefits”
The text states that benefits cost companies $15,000 per employee, and account for
roughly 30 percent of payroll costs. Divide students into groups of 2 3 students;
assign each group to develop an argument either for or against the following
statement:
Both employees and employers would be better off if companies increased employee
As you finish your presentation on Employee Separations and present the material on
downsizing, consider using this example from Ford to discuss the overlap between
employee development and separation: When automotive employees are laid off for an
Ask students if they think this constitutes employee development or outplacement.
Remind students about any upcoming events.
Chapter 10: Managing Human Resources P a g e | 10
Assignments with Teaching Tips and Solutions
What Would You Do Case Assignment
What Really Happened? – Solution
NICK’S PIZZA & PUB
In the opening case, you learned that Nicks Pizza & Pub, a two-restaurant business in northern Illinois,
wanted to grow to five restaurants in the next five years. But, expansion wasnt to be. Expenses were high
because of an inability to control food and beverage costs. And, an economic downturn saw guest counts
drop by 20 percent ($1 million a year). In the end, with costs up, revenues down, and lending standards
tightening, the bank would not approve new construction loans. So rather than expanding, Nicks
Sensing that she was onto something, you pulled together the staffs in both restaurants to make a
financial presentation. After answering their questions, you asked for their help on three key issues: pay,
hiring, and training. With costs being an issue, are there ways to pay people more but link those increases
to the company’s profitability and workers doing their jobs better and staying longer? If so, how?
Effective compensation is critical to getting, developing, and then keeping talented employees, which is
the goal of any human resource management system. There are four basic kinds of compensation
decisions: pay level, pay variability, pay structure, and employment benefits. Pay-level decisions
Nicks takes a sophisticated multi-prong approach to compensating its employees, focusing on pay-level,
employment benefits, and pay variability.
Of the four kinds of compensation decisions, pay-level typically has the strongest link to employee
turnover. Pay-level decisions are about whether to pay workers at a level that is below, above, or at
current market wages. After conducting a job evaluation, most companies try to pay the going rate,
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Its with pay variability, however, that Nicks further distinguishes itself as a highly attractive place to
work, especially for the restaurant industry. For nearly a decade, Nicks has had a profit-sharing plan for
all 230 employees. Each month, if the restaurant meets its goals in four out of five areas (food costs,
beverage costs, guest comments, employee turnover, and labor costs) Nicks employees split 80 percent
of the profit sharing pot. But, to keep attention on all of the goals, the percentage increases or decreases
The last way in which Nicks uses pay variability is skill-based pay. As you learned in Chapter 9 on
teams, skill-based pay programs pay employees for learning additional skills or knowledge, thus
encouraging workers to acquire the additional skills they will need to perform multiple jobs within a team
and to share knowledge with others within their work groups. Youll learn more about how Nicks uses
skill-based pay in the last question about training.
Because hiring talented workers is key in the restaurant business, how should Nick’s redesign its
interview and selection process to do a better job of finding and keeping the best kitchen, wait, and bar
staff?
External recruiting is the process of developing a pool of qualified job applicants from outside the
company. Selection is the process of gathering information about those job applicants to decide who
should be offered a job. The goals of employee selection are to be accurate (select and hire the right
Chapter 10: Managing Human Resources P a g e | 12
Pizza on Purpose!
Nicks Pizza & Pub is a Purpose and values-driven company. We honor the people we work
with and the communities in which we do business. This allows us to maintain extremely low
team turnover, provide profit sharing for every member of our team, and create a fun, open work
environment.
Nick’s Pizza & Pub Values
We treat everyone with dignity and respect.
We are dedicated to the learning, teaching, and ongoing development of each other.
We have fun while we work!
We provide a clean and safe environment for our guests and team members.
We honor individual passions, and creativity at work and at home.
Nicks Pizza & Pub is always looking to add exceptional people to our growing team. If you
would like information about opportunities with us, please contact one of our restaurants directly.
Applicants are instructed to: Please read this cover sheet because its important to usand after you read
it, if this still feels like a place you want to be a part of, go ahead and fill out the application on the next
page. If this doesnt feel like a place for you, thats OKgo ahead and bring the application backno
problem!
While most recruiting and selection techniques are used to increase the number of applicants, the goal
here is to actually decrease the number by encouraging applicants who are not a good fit for Nicks
restaurants to self-select out before applying. According to Rudy Miick, of Miick & Associates, a
Chapter 10: Managing Human Resources P a g e | 13
The 20 percent of applicants who make it out of the first round of interviews then complete two more
interviews. This time, however, to increase the reliability and validity of the interview process, two
managers sit in on each interview, with one manager sitting in on both interviews for each applicant. Like
the first round of interviews, the criteria are strict. One no vote, and youre not hired. If you arent, you
still receive a thank-you note and a coupon for a free pizza.
Nicks further increases the validity of the interview by avoiding unstructured interviews, where
applicants are free to ask anything they want, and studies show that they do. For instance, because
interviewers often disagree about which questions should be asked during interviews, different
How well does the interview process work at Nicks? Ninety-six percent of those hired stay at least a
year, four times better than the industry average.
Finally, at most restaurants, training is simply shadowing experienced workers to see what they do. So,
what could be done at Nick’s to improve training that would help employees do their jobs better and to
continue learning and improving over time?
Training is used to give employees the job-specific skills, experience, and knowledge they need to do
their jobs or improve their job performance. To make sure training dollars are well spent, companies need
to determine specific training needs, select appropriate training methods, and then evaluate the training.
Needs assessments can be conducted by identifying performance deficiencies, listening to customer
complaints, surveying employees and managers, or formally testing employees skills and knowledge.
Selection of an appropriate training method depends on a number of factors, including the number of
people to be trained, the cost of training, and the objectives of the training.
Chapter 10: Managing Human Resources P a g e | 14
The next step is Nicks 201, in which employees are separated by job (kitchen, wait, or bar staff) and are
trained in their specific job responsibilities. And to prove that theyve mastered their jobs, each employee
is encouraged to certify their skill level in the tasks contained in their job. For example, it usually takes
pizza makers two to four weeks to become certified, whereby they can make a pizza on their own to
Nicks standards. Pizza makers, however, can get certified in other kitchen jobs, such as salads and
sandwiches. When theyve been certified in three jobs, their pay goes up 75 cents an hour. Becoming
certified in another three jobs, six in total, increases their pay by $1.25 an hour. And when a kitchen
worker is certified in 9 jobs, their pay will increase by $2.75 an hour.
Finally, employees who want to become trainers themselves can take Nicks 301. To become a trainer,
How well have Nicks compensation, interview, and training methods worked? By any standard, Nicks
Pizza & Pubs two locations are top-performing restaurants. First, employee turnover runs about 20
percent to 25 percent per year, which is extraordinarily low compared to the industry average of 200
percent per year. On average, a restaurant will have a net operating profit of 6.6 percent. By contrast,
Nicks operating profit is typically 14 to 18 percent. Each of Nicks restaurants brings in about $3 million
a year, putting him at the top of nearly all independent pizza restaurants.
But Nicks is successful by nonfinancial measures, too. During the middle of the recession, his staff
suggested introducing half-priced Mondays for the restaurant and half-priced Tuesdays for carryout.
Mondays and Tuesdays, which are traditionally the slowest days of the week, are now two of the busiest.
Customers, servers, and Nicks all benefit.
Management Team Decision
TO FACEBOOK OR NOT FACEBOOK
Purpose
The purpose of this case is to consider whether a company should use information gained from an
applicants personal website to make hiring decisions.
Setting It Up
Ask your students: How would you feel if you got rejected for a job because of what you posted on
Twitter last night?
Scenario
For the past six months, youve been heading a hiring committee in charge of hiring a new division
Chapter 10: Managing Human Resources P a g e | 15
But its almost all over now. After so many interviews and meetings and discussions, the committee
has settled on a candidate who everyone thinks is ideal for the jobIvy-league educated, lots of
management experience, a great personality, driven to succeed, and willing to learn. He was near the top
of your list when you began this process six months ago, and here he is now, in first place at the finish
line.
You head into the last hiring committee meeting with lots of relief. Not only are you happy that you
found the right person for the job, but youre really glad that this meeting is just going to be a formality.
No more debates or arguments about applicants work experiences, education, or hobbies. Just walk on in,
take a quick vote, and then make a call with the job offer.
But as you walk into the committee meeting, theres a strange vibe. Some people look quite worried,
So, here you are, faced with a split (and angry) committee. Theyre looking to you to break the
deadlockshould we hire this guy or move on to someone else?
Questions
1. What decision would you make? Would you hire this person or reopen the search?
Students responses will vary.
2. In your opinion, are companies justified in using an applicants Facebook or Twitter account
when considering him or her for a job?
3. Do you believe that a company should be concerned with how a potential employee spends his or
her personal time?
Students responses will vary. In general, though, students should offer their thoughts on the
Practice Being a Manager
LEGAL RECRUITING
Exercise Overview and Objective
This is an HR role-play exercise set in a hospital context. Students play roles as nursing shift managers