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B. Pay Structure: Managers have to establish a pay
structure for the different jobs in the organization.
1. A pay structure clusters jobs into categories
reflecting their relative importance to the
organization and its goals, levels of skill required,
and other characteristics.
a. Pay ranges are established for each job
category. An individual employees’ pay within
job categories is then determined by factors such
as performance, seniority, and skill levels.
b. Large U.S. corporations tend to pay their top
managers higher salaries than do European or
Japanese counterparts.
c. There also is a much greater pay differential
between employees at the bottom and those high
in the hierarchy in U.S. companies.
2. Concerns have been ranged over whether it is
equitable or fair for CEOs of large companies in
the U.S. to make huge sums when their
companies are restructuring or laying off a good
portion of their workforces.
C. Benefits: Organizations are legally required to
provide mandated benefits to their employees,
including worker’s compensation, Social Security,
and unemployment insurance.
1. Workers’ compensation provides employees
with financial assistance if they are unable to
work because of a work-related injury or illness.
2. Social Security provides financial assistance to
which benefits best suit the employees.
Chapter 12 – Building and Managing Human Resources
6. Other organizations offer cafeteria-style
benefit plans that let employees themselves
choose the plan they want.
7. More and more mangers are viewing benefits
as a way to attract and retain valued employees.
VII. Labor Relations
Labor relations are the activities that managers
engage in to ensure that they have effective
working relationships with labor unions that
represent their employees’ interests.
1. Although the U.S. government has created and
enforced laws regulating employment, some
workers believe that a union will help ensure that
their interests are fairly represented in the
organization.
2. In 1938, the government passed the Fair Labor
Standards Act, which prohibited child labor and
made provision for minimum wages, overtime
pay, and maximum working hours. In 1963, the
Equal Pay Act mandated that men and women
performing equal work receive equal pay. In
1970, the Occupational Safety and Health Act
mandated procedures for managers to follow to
ensure workplace safety.
A. Unions: Unions exist to represent workers’ interest
in organizations.
1. The U.S. Congress passed the National Labor
Relations Act of 1935 that made it legal for
workers to organize into unions to protect their
rights and interests.
2. The Act also established the National Labor
Relations Board to oversee union activity. The
variety of reasons.
LO 12-6: Understand the
role that labor
relations play in
the effective
management of
human resources.
POWERPOINT SLIDE 12-39
TO 12-42
Chapter 12 – Building and Managing Human Resources
or they may be dissatisfied with management
and find it difficult to communicate their
concerns.
4. Some workers are reluctant to join unions for a
variety of reasons.
a. There is a perception that union leaders are
corrupt, while others feel that belonging to a
union might not do them much good.
b. Employees may not want to be obligated to
do something against their will, such as
strike.
c. Also many employees realize that although
unions can be a positive force in
organizations, sometimes they can be a
negative force, impairing organizational
effectiveness.
5. The percentage of U.S. workers represented by
unions today is smaller than in the 1950s.
a. Although union influence in manufacturing
1. Once an agreement that union members
support has been reached, union leaders and
managers sign a contract spelling out its terms of
that agreement.
Chapter 12 – Building and Managing Human Resources
Lecturer Enhancer 12.1
Lecturer Enhancer 12.2
SCREENING EXECUTIVE LEVEL APPLICANTS
James Baughman was imprisoned for stealing money from student funds while he was a high school
principal. He lied about earning a doctorate at Stanford. He eventually became director of recruitment for
Lucent Technologies.
Max Phillips & Son fired Al Dunlap in 1973 after only seven weeks of employment. Three years later, he
was fired by Nitec Paper Corporation, which soon went broke, over allegations of financial fraud. Twenty
years later, he surfaced as chairman and CEO of the Sunbeam Corporation.
George O’Leary lied on his resume about earning a master’s degree in education from New York
University. He lied about lettering in football for three years at the University of New Hampshire. He
later was hired as Notre Dame’s football coach.
How does this happen? “Sometimes companies don’t screen executive-level applicants as closely as they
1. Dig deeper with executive candidates by going beyond the standard security check to perform
LECTURE ENHANCERS
12–25
2. Don’t rely upon search firms to conduct a thorough background check. Thorough background
3. Don’t have interviewers conduct the background checks. They may become prejudiced and ask
questions differently about a candidate whom they liked, according to Hahn. For example, instead
of asking a reference if there is anything in a person’s history that would prevent you from hiring
them, you might say, “There are not problems with this person, right?”
Adapted from “Who are You Really Hiring,” by Shari Caudron, Workforce, November 2002 and “Screening Out
Bad High-level Hires, by Michelle Rafter, Workforce Management, May 2004.
Lecturer Enhancer 12.2
MEMORABLE JOB INTERVIEWS
The world’s largest temporary personnel service for accounting, bookkeeping and information systems,
Accountemps, recently conducted a nationwide survey of executives about the most unusual job interview
they ever conducted. Some of the results:
• “The applicant apologized for being late, said he accidentally locked his clothes in his closet.”
• “The applicant walked in and inquired why he was here.”
• “Shortly after sitting down, she brought out a line of cosmetics and started a strong sales pitch.”
• “When asked about loyalty, the applicant showed a tattoo of his girlfriend’s name.”
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Lecture Enhancer 12.3
THE COMPLICATED LEGACY OF HENRY FORD
Henry Ford founded the Ford Motor Company in 1903, producing an inexpensive, all-purpose car, the
Model T. His company grew rapidly after the Model T became an instant success. The close relationship
he enjoyed with his skilled workers deteriorated as he installed the assembly line and hired unskilled
workers. In 1913, dissatisfaction among workers resulted in worker turnover of over 380 percent in one
year alone. A small number of workers joined the International Workers of the World, which served as an
outlet for the workers’ hostility.
During this early period, Ford instituted other worker benefits that were revolutionary. He created a
But Ford was inconsistent in his dealings with his workers. During the 1920s, Ford instituted a cost-
saving campaign. The assembly line was increased in speed so that workers performed their jobs in less
time. Discipline was strict and workers were driven to work as hard as possible. Even the Sociology
Department was disbanded. The Ford Service Police, a 3,000-person group, was created to enforce the
speed-up of work and other discipline measures. Workers who were involved in union activities were
often physically assaulted.
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In May 1937, the UAW began its campaign to unionize Ford. Walter Reuther headed the campaign and
planned to distribute circulars to Ford workers on their way home. The union members stationed
themselves on a bridge over a road leading to the Ford Rouge River plant. Ford Service Police ordered
them to leave, and when the union supporters started to comply, the police attacked them. The Battle of
the Bridge ended with Reuther and several others, including women, requiring hospitalization.
Notes for Topics for Discussion and Action
DISCUSSION
1.Discuss why it is important for human resources management systems to be in sync with an
organization’s strategy and goals and with each other.
Human resources management systems include recruitment and selection, training and development,
performance appraisal and feedback, pay and benefits, and labor relations. These systems need to be
2.Discuss why training and development are ongoing activities for all organizations.
Training focuses primarily on teaching organizational members how to perform their current jobs and
helping them acquire the knowledge and skills they need to be effective performers. Development focuses
on building organizational members’ knowledge and skills so that they will be prepared to take on new
Chapter 12 – Building and Managing Human Resources
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3.Describe the type of development activities that you think middle managers are most in need of.
Managers need development activities to help them adjust to new responsibilities and challenges in
today’s organizations. Many organizations have downsized, and managers need to be able to perform
many duties and functions within an organization. For this reason, managers need to be exposed to a
4.Evaluate the pros and cons of 360-degree performance appraisals and feedback. Would you like your
performance to be appraised in this manner? Why or why not?
5.Discuss why two restaurants in the same community might have different pay levels.
Chapter 12 – Building and Managing Human Resources
Two restaurants in the same community might have different pay levels if they are pursuing different
6. Interview a manager in a local organization to determine how that organization recruits and selects
employees.
Joan Scott is a manager of a local branch of a large bank. She is responsible for recruiting and selecting
the tellers that will be employed at the bank. Recruitment involves development of a pool of qualified
candidates for open positions. Selection is the process by which Jill determines the relative qualifications
of the job applicants and their potential for being good performers in the teller position.
AACSB: Analytic
Analyzing Human Resources Systems
Think about your current job or a job that you had in the past. If you have never had a job, then interview
a friend or family member who is currently working. Answer the following questions about the job you
have chosen.
BUILDING MANAGEMENT SKILLS
12–30
1. How are people recruited and selected for this job? Are the recruitment and selection
procedures that the organization uses effective or ineffective? Why?
2. What training and development do people who hold this job receive? Are the training and development
appropriate? Why or why not?
3. How is performance of this job appraised? Does performance feedback contribute to motivation and
high performance on this job?
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Supervisors also monitor the number of training sessions that lifeguards attend, and the physical
conditioning that each lifeguard completes during the month. This is a more objective appraisal because it
4.What levels of pay and benefits are provided for this job? Are these levels of pay and benefits
appropriate? Why or why not?
AACSB: Analytic
1. Either individually or in a group, think about the ethical implications of managers becoming friendly
with subordinates.
MANAGING ETHICALLY