Geographic-Based
Organization Structure
President
U.S. and Latin European Asian
Canada America Division Division
Division Division
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Advantages and Disadvantages of
the Divisional Approach
Advantages Disadvantages
Coordination among different Duplication of resources by
business functions two or more departments
Improved and speedier Reduced specialization in
service occupational skills
Accountability for Competition among divisions
performance
Development of general
manager and executive skills
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Matrix Organization Structure
President
Vice President Vice President Vice President Vice President
Finance Operations Manufacturing Sales and
Marketing
Region A
Manager © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Region B
Manager
Region C
Manager
McGraw-Hill
Advantages and Disadvantages of
the Matrix Approach
Advantages Disadvantages
Efficient utilization of scarce, Employee frustration and
expensive specialists confusion as a result of the dual
chain of command
Flexibility that allows new
projects to start quickly Conflict between product and
functional managers over
Development of cross- deadlines and priorities
functional skills by employees
Too much time spent in
Increased employee meetings to coordinate decisions
involvement in management
decisions affecting project or
product assignments
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Coordination Mechanisms
Meetings Organization-wide
Reward Systems
Task Forces and Teams
Liaison Roles
Organizational Culture Integrating Managers
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Organization Design
The selection of an organization structure that
best fits the strategic goals of the business.
Basic organization designs:
Mechanistic
Organic
Boundaryless
These designs incorporate vertical and horizontal
structural elements.
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Organization Design (continued)
As business strategy changes, so do the structural
elements of organization design.
Strategic factors that affect the choices of
organization design:
Organization capabilities
Technology
Organization size
Environmental turbulence
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Mechanistic, Organic, and
Boundaryless Designs
Mechanistic Organic Boundaryless
Rigid hierarchical relationships Collaboration (both vertical and Collaboration (vertical, horizontal,
horizontal) customers, suppliers, competitors)
High formalization Low formalization Low formalization
Top-down communication Informal communication Informal communication
Centralized decision authority Decentralized decision authority Decentralized decision authority
Narrowly defined specialized Broadly defined flexible jobs Broadly defined flexible jobs
jobs
Emphasis on teams that also may
Emphasis on individuals working Emphasis on teams cross organization boundaries
independently
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Redesigning Organizations
Merger
Acquisition
Divestiture
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Applications of Management
Perspectives—For the Manager
Organization structure provides sources other than
formal authority for a manager to get things done.
One source of power is the recognition of how the
resources that a unit or department controls can
contribute to organization performance.
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Applications of Management
Perspectives—For Managing Teams
One way to strengthen the culture of a team is to
organize a ceremony that exemplifies what the
team values.
Ceremonies reinforce specific values and create
bonds among employees by allowing them to
celebrate the achievements of the team or of
individual team members.
Ceremonies celebrate high-performing employees
and help build cohesion among team members.
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Applications of Management
Perspectives—For Individuals
Make yourself indispensable by anticipating your
boss’s need for support and by providing it without
being asked.
Look for ways to show loyalty by speaking well of
your boss to others.
Develop a trusting relationship by being
dependable, consistent, and honest.
Keep your boss well informed.
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© 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
10
Human Resource Management
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
After reading this chapter, you should be able to:
Determine appropriate responses to major changes in the
environment affecting human resources.
Comply with the legal framework governing human resources.
Develop tactics to implement desired human resource
strategies.
Prepare a staffing program to recruit and select the best
applicants.
Establish orientation, training, and career development
programs to enhance employees’ contributions to the firm.
Implement an effective performance appraisal program to
capitalize on employees’ strengths and reduce employees’
weaknesses.
Develop a reward system to attract, retain, and motivate
employees.
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McGraw-Hill Dealing effectively with
human resource (HR)
issues is essential for all
managers.
The human resource staff
supports managers in
carrying out HR
responsibilities.
© 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Skills for Managing Human Resources
Congruency
Skills
Performance Hiring Skills
Appraisal Skills
Pay Allocation Training Skills
Skills
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Environment of Human Resources
Workforce Globalization
Diversity
Unions Legislation
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Key Federal Legislation and Regulations
Affecting Human Resources
Social Security Act (1935) Occupational Safety and Health Act
Wagner Act (1935) (1970)
Fair Labor Standards Act (1938)
Taft-Hartley Act (1947) Vocational Rehabilitation Act (1973)
Landrum-Griffin Act (1959)
Equal Pay Act (1963) Health Maintenance Organization Act
Title VII of Civil Rights Act (1964) (1973)
Executive Order 11246 (1965)
Age Discrimination in Employment Employee Retirement Income
Security Act (1974)
Act (1967)
Wage Garnishment Act (1968) Vietnam-Era Veterans Readjustment
Act (1974)
Privacy Protection Act (1974)
Pregnancy Discrimination Act (1978)
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Key Federal Legislation and Regulations
Affecting Human Resources (continued)
Job Training Partnership Act Family and Medical Leave Act (1993)
(1982) Health Insurance Portability and
Consolidated Omnibus Budget Accountability Act (1996)
Reconciliation Act (1985) Small Business Job Protection Act
Immigration Reform and Control (1996)
Act (1986) Fair Credit Reporting Act (1970,
Worker Adjustment and 1996)
Retraining Act (1988)
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Drug-Free Workplace Act (1988)
Employee Polygraph Protection
Act (1988)
Americans with Disabilities Act
(1990)
Civil Rights Act (1991)
McGraw-Hill
Discrimination
Employment Key HR Protected
at Will Legislative Issues Class
Sexual Affirmative
Harassment Action
BFOQ Disparate
Treatment
Adverse Impact
Job
Relatedness
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Unions
Membership has been declining steadily (13% in
2003)
Factors contributing to this decline:
Strong employer challenges to unions
Plant closures
International competition
Shrinking manufacturing sector
Labor Contract: Written agreement between union
and management that specifies pay schedule, fringe
benefits, COLA, and the like.
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Unions (continued)
Union-related legislations:
The Wagner Act (1935) – created the NLRB
The Taft-Hartley Act (1947) – specified a set of unfair labor
practices by unions along with the remedies
The Landrum-Griffin Act (1959) – requires each union to report its
financial activities and the financial interests of its leaders to the
Department of Labor
In the U.S., labor relations are characterized by:
Business unionism
Job-based unionism
Collective bargaining
Voluntary contracts
Adversarial relationships
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Human Resource Management Process
Strategic HR
Planning
HR Tactics
Staffing Orientation Training Career
Development
Performance
Appraisal Compensation
and Benefits
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Strategic Human Resource Planning
(SHRP)
The development of a
vision about where the
company wants to be and
how it can use human
resources to get there.
The ultimate objective of
SHRP is a sustained
competitive advantage.
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Human Resource Planning
Product Labor Internal Labor External Labor
Demand Productivity Market Market
Labor Demand Labor Supply
Conditions and Select Responses
1. Labor demand exceeds labor supply 2. Labor supply exceeds labor demand
Training or retraining Pay cuts
Succession planning Reduced hours
Promotion from within Work sharing
Recruitment from outside Voluntary early retirements
Subcontracting Inducements to quit
Use of contingent workers Layoffs
Use of overtime 3. Labor demand equals labor supply
Replacement of quits from
inside or outside
Internal transfers and
redeployment
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Staffing Process
Recruitment – the process of
generating a pool of qualified
candidates for a particular job.
An effective recruitment effort
should create a pool of qualified
applicants.
Selection – the screening
process used to decide which of
the applicants to hire.
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Validity and Reliability of Selection Tools
Validity is how well a technique used to assess
candidates is related to performance on the job.
Validity can be demonstrated by:
Content Validity
Empirical Validity
Reliability is a measure of the consistency of results
of the selection method.
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Application Letters of Ability Tests
Forms Recommendation
Performance SELECTION Personality
Simulation Tests TOOLS Tests
Psychological Honesty Tests
Tests
Interviews Physical Exams
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Orientation
Helps new employees to:
Learn more about the company
Learn what is expected of them in the job
Reduce the initial anxiety of a transition
Become familiar with co-workers
Learn about work rules and personnel policies
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Employee Training
Training is a planned effort to
provide employees with
specific skills to improve their
performance.
Effective training can also
improve morale and increase
an organization’s potential.
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The Training Process
Needs Assessment Develop and
Conduct Training
• Organization Needs
• Task Needs • Location
• Person Needs • Presentation
• Type
McGraw-Hill Evaluation
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Training Presentation Techniques
Slides and Computer-
Videotapes Assisted
Instruction (CAI)
Classroom
Lectures
Simulations
Cross-functional Vestibule Virtual Reality
Training Training
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Career Development
Long-term effort in which the
organization helps employees
utilize their full potential.
Involves three major phases:
Assessment
Direction
Development
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The Career Development Process
Assessment Direction
• Promotability forecasts
• Succession planning
• Individual career counseling
• Job posting systems
• Career resource centers
McGraw-Hill Development
• Mentoring
• Coaching
• Job rotation
• Tuition assistance programs
© 2004 The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill Performance Appraisal
Performance appraisal has
three important objectives:
Two-way communication
between supervisors and
employees.
Constructive feedback to
employees in order to capitalize
on strengths and reduce
weaknesses.
Help managers decide who
should be paid more based on
contribution.
© 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Approaches to Performance Appraisal
Judgment Approaches Measure Approaches
Relative judgments Traits
Absolute judgments Behaviors
Behavioral anchored
rating scales
Outcomes
MBO
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Compensation
Employees are paid for their
contributions to the company.
The three key objectives of the
compensation system are to:
Attract high-quality workers from
the labor market.
Retain the best employees the
company already has.
Motivate employee performance.
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Components of Total Compensation
Total Compensation
Base Compensation Pay Incentives Indirect Compensation /
Benefits
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Compensation System Should:
Fit the firm’s strategic objectives
Fit with the firm’s characteristics and environment
Achieve internal equity (perception of fairness)
Achieve external equity
Be based on employee contributions
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Applications of Management
Perspectives—For the Manager
Most management problems are a result of poor
human resource practices.
Indicators that something is wrong with HR practices:
Inability to recruit top talent
Loss of key employees to competitors
Costly lawsuits
Low innovation by employees afraid of taking risks or with
outdated skills
Little concern for quality
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Applications of Management
Perspectives—For Managing Teams
Employees working in teams often take over HR
functions that have traditionally come under the
purview of supervisors.
Evaluation of team members
Allocation of rewards
Staffing decisions
Organizing work flow of the team
The firm needs to provide adequate support so
that teams are able to perform these HR functions.
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Applications of Management
Perspectives—For Individuals
Your success depends on your ability to take
advantage of the HR opportunities the firm offers.
It is your responsibility to make the ―right moves‖
to position yourself well.
Use appraisal feedback constructively
Take courses to keep your skills current
Learn the key criteria for promotion and pay allocation
decisions
Join teams that best complement your interests
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Chapter
11
Managing Employee Diversity
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Learning Objectives
After reading this chapter, you should be able to:
Monitor labor force trends and their implications.
Recognize the advantage and challenge of diversity in the
workforce.
Resolve the unique problems and issues confronted by
different employee.
Capitalize on employee diversity as a source of competitive
advantage.
Develop and implement human resource management
programs that best use the talents of a diverse employee
population.
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Effective management of diversity is good as
well as necessary for business because:
Changes in technology and competition
make diverse thinking a necessity.
Minorities make up a majority of the
labor market in many parts of the
country.
To be competitive, firms need to retain
and motivate minority employees.
Global expansion and increased global
customers means firms need the help of
executives who can function in different
cultures.
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Diversity
It describes a wide spectrum differences
between people.
Groups of individuals share
characteristics that distinguish them from
other groups.
The differences between groups are
smaller than the differences within
groups.
Classifying people into group types often
leads to false stereotypes because it
incorrectly assumes that group averages
apply to all individuals in the group.
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Skills for Managing
Employee Diversity
Heterogeneous team
skills
Interpersonal
flexibility skills
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Advantages of Employee Diversity
Market Access International
Competition
Team Performance Multiplicity of Points
of View
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