HUMAN RESOURCE

MANAGEMENT
Managing Employees for Competitive Advantage

DAVID LEPAK
Rutgers

University

MARY GOWAN
Martha and Spencer Love School of
Business at Elon University

PEARSON

Pearson Education International

<1
c

MANAGING EMPLOYEES FOR COMPETITIVE ADVANTAGE

MANAGING EMPLOYEES
What's in a Name?

4 The Costs and Benefits of Managing HR

FRAMEWORK FOR THE STRATEGIC MANAGEMENT OF EMPLOYEES

PRIMARY HR ACTIVITIES

Work Design and Workforce Planning 8 Job Design 9 Workforce Planning 9 Managing
Employee Competencies 10 Recruitment 10 Selection 10 Training 11 Managing
Employee Attitudes and Behaviors 11 Performance Management 11 Compensation and
Incentives 12 Employee Benefits, Health, and Wellness 12 HR Activities Alignment 13

HR CHALLENGES

14

Challenge 1: Cultures Meeting Organizational Demands

14

Strategy 14

Company Characteristics 15

Organizational Cultures 15 Employee Concerns 15 Challenge 2: Environmental Influences 16

Labor Force Trends 16 Technology 17 Globalization 17 Ethics and Social Responsibility 18
Challenge 3: Regulatory Issues 18

THE PLAN FOR THIS BOOK

19

Chapters 2-3: HR Challenges 19' Chapters 4-5: Work Design and Workforce Planning 19
Chapters 6-8: Managing Employee Competencies 19 Chapters 9-12: Managing Employee
Attitudes and Behaviors 19 Chapters 13-14: Special Topics 20
Summary 21 Key Terms 21 H Discussion Questions 21 Learning Exercise 1 21
Learning Exercise 2 22 Case Study 1: The New Job 22 Case Study 2: Employees Love
Wegmans 23

PARTI

HR CHALLENGES 25
ORGANIZATIONAL DEMANDS AND ENVIRONMENTAL
INFLUENCES 26

THE IMPORTANCE OF CONTEXT

28

MEETING ORGANIZATIONAL DEMANDS

28

Strategy 30 Low-Cost Strategy and Managing Employees 31 Differentiation Strategy and Managing
Employees 31 Company Characteristics 32 Company Size 32 Stage ofDevelopment 32
Organizational Culture 33 Employee Concerns 34 Work /Life Balance 36 Justice 36

VII

Vlli

CONTENTS

ENVIRONMENTAL INFLUENCES

38

Labor Force Trends 38 The Aging Workforce 38 Demographic Diversity 40 Technology 41

Globalization 41 International Strategies 42 Global Factors 42 Implications of Global Factors on
Managing Employees 44 Ethics and Social Responsibility 44
Summary 47 Key Terms 48 Discussion Questions 48 Learning Exercise 1 48
Learning Exercise 2 48 Case Study 1: Sustaining Success at St. Stevens Community
College 49 Case Study 2: Globalization at Levi Strauss 49

REGULATORY ISSUES 50
EQUAL EMPLOYMENT OPPORTUNITY AND OTHER WORKPLACE LAWS
INTRODUCTION TO EQUAL EMPLOYMENT OPPORTUNITY

52

53

Protected Classifications 54 Bona Fide Occupational Qualification (BFOQ) and Business

Necessity 54 Discriminatory Practices 55 Disparate Treatment 55 Disparate Impact 56
Harassment 58 Retaliation 59
EQUAL EMPLOYMENT LEGISLATION

60

Equal Pay Act of 1963 (EPA) 61 Title VII of the Civil Rights Act of 1964 (CRA 64) 61 Race and
Color Discrimination 63 Religious Discrimination 64 Gender Discrimination 65 National Origin
Discrimination 66 Civil Rights Act of 1991 (CRA 91) 67 Age Discrimination in Employment Act
of 1967 (ADEA) 68 Americans with Disabilities Act of 1990 (ADA) 69
Pregnancy Discrimination Act of 1978 (PDA) 71
EEO RESPONSIBILITIES OF MULTINATIONAL EMPLOYERS
FILING PROCESS FOR DISCRIMINATION CHARGES
EXECUTIVE ORDERS AND AFFIRMATIVE ACTION
Executive Order 11246 (EO 11246)

72

72
73

73 Affirmative Action 73

RELATED EMPLOYMENT LEGISLATION

75

Immigration Reform and Control Act of 1986 (IRCA) 75 Family and Medical Leave Act of 1993,
2008 (FMLA) 75 Vietnam Era Veteran's Readjustment Act of 1974 76 Uniformed Services
Employment and Reemployment Act of 1994 76
FAIR EMPLOYMENT PRACTICES

77

EMPLOYMENT-AT-WILL AND WRONGFUL DISCHARGE

REGULATORY ISSUES AND COMPETITIVE ADVANTAGE

77
78

Summary 78 Key Terms 79 Discussion Questions 79 Learning Exercise 1 79

Learning Exercise 2 79 Case Study 1: A Case of Age and Gender Discrimination? 80
Case Study 2: Are Affirmative Action Plan Goals Evidence of Discrimination? 80
PART I PROSPERA EXERCISES

82

CONTENTS

PART

II

Work Design and Workforce Planning 83

e r JOB DESIGN AND JOB ANALYSIS

84

THE IMPORTANCE OF JOB DESIGN AND JOB ANALYSIS

JOB DESIGN

JX

86

88

Efficiency Approaches to Job Design 88 Motivational Approaches to Job Design 90 Changing

Job Tasks 91 Increasing Responsibility and Participation 92 Employee Teams 93 Which
Approach to Use? Balancing Efficiency and Motivational Approaches 94
JOB DESCRIPTIONS AND JOB SPECIFICATIONS
JOB ANALYSIS

94

96

Job Information 96 Observations and Diaries 97 Interviews 97 Questionnaires 98

Occupational Information Network (O*NET) 98 Job Analysis Techniques 98
JOB DESIGN IN PRACTICE: MEETING ORGANIZATIONAL DEMANDS

700

Strategy and Job Design 101 Job Design Approach Adopted 101 Breadth of Tasks, Duties, and
Responsibilities Performed 101 Company Characteristics and Job Design 101 Formalization of
Jobs 101 Breadth and Depth of Tasks 102 Culture and Job Design 102 Managerial Choices ofJob
Design Tactics 102 Employee Acceptance of Job Design Decisions 102 Employee Concerns and Job
Design 102 Perception of Fairness ofJob Duties 103 Need for Flexible Work Arrangements 103
JOB DESIGN IN PRACTICE: ENVIRONMENTAL INFLUENCES

104

Labor Force Trends and Job Design 104 Skill Availability to Perform Tasks 104 Job Design Decisions
for the Aging Labor Force 105 Technology and Job Design 105 Telecommuting 105 Virtual
Teams 106 Globalization and Job Design 106 Need to Address Cross-Cultural Issues 107
Relevant Labor Market 107 Ethics and Job Design 107 Concerns about Types of Tasks
Required 107 Attitudes Toward Physical Conditions ofJob Design 108
JOB DESIGN IN PRACTICE: REGULATORY ISSUES

108

Importance of Identifying Essential and Non-Essential Job Duties

Safety 109

109 Job Design and Employee

Summary 110 Key Terms 110 a Discussion Questions 110 H Learning Exercise 1 111
Learning Exercise 2 111 Learning Exercise 3 111 m Case Study 1: Home-Sourcing at Alpine
Access 111 Case Study 2: Rethinking Jobs at Ellers Technical Support Professionals (ETSP) 112
Appendix to Chapter 4 Standardized and Customized Approaches to Job Analysis
STANDARDIZED APPROACHES TO JOB ANALYSIS
Functional Job Analysis (FJA)

113

113 Position Analysis Questionnaire (PAQ) 115

113

CONTENTS

CUSTOMIZED APPROACHES TO JOB ANALYSIS

Critical Incidents Approach

116

116 Task Inventory Approach

116 Job Element Approach

116

WORKFORCE PLANNING 118

THE IMPORTANCE OF WORKFORCE PLANNING

WORKFORCE PLANNING

120

121

FORECASTING LABOR SUPPLY AND LABOR DEMAND

122

Internal Factors 122 Turnover 122 Employee Movements 124 Employee Productivity 125
Company Performance 126 Strategic Direction 126 External Factors 127 Local Labor
Market 127 Economic Conditions 127 Industry Trends 127
TACTICS FIRMS USE TO BALANCE THEIR SUPPLY AND DEMAND FOR LABOR

128

Labor Shortage Tactics 128 Employee Overtime 128 Outsourcing and Contingent Labor 130
Employee Retention 130 Employee Promotions, Transfers, and Demotions 130 New Hires 130
Labor Surplus Tactics 130 Layoffs 130 Attrition and Hiring Freezes 131 Early Retirement 131
Employee Promotions, Transfers, and Demotions 132
WORKFORCE PLANNING IN PRACTICE: ORGANIZATIONAL DEMANDS

732

Strategy and Workforce Planning / 132 Required Speed to Deal with Shortages and Surpluses 133
Critkality of Employee Groups 133 Company Characteristics and Workforce Planning 133 The
Relative Impact of Labor Shortages and Surpluses 133 Who Carries Out Workforce Planning 133
Corporate Culture and Workforce Planning 134 Likelihood of Firms Using Different Tactics 134
Employee Reactions to Workforce Planning Tactics 134 Employee Concerns and Workforce Planning 134
Employee Stress and Work/Life Balance Issues 134 Perceptions of Procedural and Distributive Justice 135
ENVIRONMENTAL INFLUENCES AND WORKFORCE PLANNING

735

Labor Force Trends and Workforce Planning 136 Availability of Internal and External Workers 136
Which Tactics to Use 136 Technology and Workforce Planning 136 The Number of Employees
Needed 137 The Types of Workers Needed 137 The Quality of Workforce Planning Forecasts 138
Globalization and Workforce Planning 138 Where the Workers Are 138 Which Workforce Planning
Tactics to Use 138 Ethics and Workforce Planning 139 Community Reactions to Workforce Planning
Tactics 139 How Companies Help Employees Cope 140
REGULATORY ISSUES AND WORKFORCE PLANNING
Requirements for Mass Layoffs and Plant Closings
Independent Contractor 141

740

140 Determining Who Is an Employee versus an

Summary 142 Key Terms 143 B Discussion Questions 143 Learning Exercise 1 143
Learning Exercise 2 144 Case Study 1: Planning for the Future at East Coast Bank 144
Case Study 2: The Turnaround at Ford 145
PART II PROSPERA EXERCISES

746

CONTENTS

PART

III

XI

Managing Employee Competencies 147

e r RECRUITMENT

148

THE PURPOSE OF RECRUITMENT

THE RECRUITMENT PROCESS
INTERNAL RECRUITMENT
Internal Recruitment Methods

750

757

752
152 Advantages and Disadvantages of Internal Recruitment

EXTERNAL RECRUITMENT

154

754

Advertising 155 Educational Institutions 157 Employment Agencies and Employee Search
Firms 158 Professional Associations 159 Temporary Employees 159 Employee
Referrals 159 Sourcing Applicants 159 Re-recruiting 160 Advantages and
Disadvantages of External Recruitment 160

MAXIMIZING RECRUITMENT EFFECTIVENESS

760

Preparing Recruitment Advertisements 161 Developing a Recruitment Value Proposition 161

Writing a Recruitment Message 162 Recruiters 164 Realistic Job Previews 164
Recruitment Follow-Up 164 Recruitment Effectiveness 165

RECRUITMENT IN PRACTICE: ORGANIZATIONAL DEMANDS

765

Strategy and Recruitment 166 Content of a Recruitment Message 166 Choice of Recruitment
Methods 166 Company Characteristics and Recruitment 167 Use of Internal versus External
Recruiting 167 Who Manages Recruitment 167 Culture and Recruitment 167 Recruitment
Value Proposition 168 Balance of Internal versus External Recruiting 168 Employee Concerns and
Recruitment 168 Appraisal of Recruitment Message 168 Perception of Fairness of the Process 169

RECRUITMENT IN PRACTICE: ENVIRONMENTAL INFLUENCES

769

The Labor Force and Recruitment 169 Target of Recruitment 169 How Much Recruitment Is
Needed 171 Technology and Recruitment 171 How Recruitment Is Managed 171 Skills
Recruited 172 Globalization and Recruitment 173 How Recruiting Is Done 173 Where
Recruiting Is Done 173 Ethics, Corporate Social Responsibility, and Recruitment 174 Value
Proposition Offered 174 Truth-in-Hiring 174 Targets of Recruitment 174

REGULATORY ISSUES AND RECRUITMENT

Content of a Recruitment Message

775

175 Recruiter Words and Actions

175 Record Keeping

176

Summary 176 Key Terms 176 Discussion Questions 177 Learning Exercise 1 177
Learning Exercise 2 177 Case Study 1: The Recruiting Game at L'Oreal 178 Case Study 2:
Enron: A Not So Happy Ending to a Good Recruiting Plan 178

CONTENTS

Appendix to Chapter 6 Metrics Used to Evaluate an Organization's Recruiting Effectiveness

YIELD RATIOS

179

179

COST-PER-HIRE

780

TIME-TO-FILL RATE

780

MANAGER FEEDBACK

780

BENCHMARKING BEST PRACTICES

787

SELECTION 182
EMPLOYEE SELECTION AND THE PERFORMANCE OF FIRMS
Selection Defined
PERSON-JOB FIT

784

184 How Employee Selection Processes Affect the Performance of Firms

185

786

STANDARDS FOR EFFECTIVE SELECTION PROCESS

787

Reliability 187 Validity 188 Unbiased 189 Candidates'Personal Characteristics 189

e Contrast Effect 189 Halo/Devil's Horns Effect 189 Impression Management 189
SELECTION METHODS: INITIAL SCREENING
Applications and Resumes

790

190 Screening Interview

SELECTION METHODS: FINAL SCREENING

192

192

Employment Tests 192 Ability Tests 192 Achievement/Competency Tests 193 Personality
Inventories 193 When to Use Employment Tests 194 Interviews 194 Unstructured
Interviews 195 Structured Interviews 195 Reference Checks, Background Checks, Credit Reports,
and Honesty Tests 196 Assessment Centers 199 Biodata 200 Drug Tests 200
Medical Examinations 200
CHOOSING AMONG SELECTION METHODS

207

Compensatory Approach 201 Multiple-Hurdle Approach

Choosing a Scoring Method 203

203 Multiple-Cutoff Approach

SELECTION IN PRACTICE: ORGANIZATIONAL DEMANDS

203

204

Strategy and Selection 204 Core Competencies 205 Selection Criteria for Person-Job Fit 206
Methods of Selection 206 Company Characteristics and Selection 206 Degree of Structure 206
Substance and Form of the Selection Process 206 Culture and Selection 207 Person-Organization
Fit 207 Promotion-from-Within Policy 208 Who Participates in the Selection Process 208 Employee
Concerns and Selection 208 Fair and Equal Treatment 208 Impact ofJob on Work/Life Balance 208

CONTENTS

SELECTION IN PRACTICE: ENVIRONMENTAL INFLUENCES

XJM

209

Labor Market and Selection 209 Types of Applicants Available 209 Willingness ofApplicants to Accept
Jobs 210 Technology and Selection 210 Technology and the Process of Selection 210 Verification
of Credentials 211 Globalization and Selection 211 Labor Market at Home 211 Labor Market
Abroad 212 Ethics and Employee Selection 213 Concerns about Privacy 213 Amount and
Type of Information Given to Applicants 213
SELECTION IN PRACTICE: REGULATORY ISSUES
Procedures for Using Selection Measures

273

214 Definition of an Applicant

214

Summary 215 Key Terms 215 Discussion Questions 216 Learning Exercise 1 216
Learning Exercise 2 216 Case Study 1: Selection at First Apparel 216 Case Study 2: Virtual
Selection at National City Corporation 217

Appendix to Chapter 7 Reliability and Validity 218

RELIABILITY
VALIDITY

278

278

Content Validity

218 Criterion-Related Validity

218 Construct Validity 219

TRAINING AND DEVELOPMENT

220

THE PURPOSE OF TRAINING AND DEVELOPMENT

Employee Orientation 223

222

Onboarding 224

TRAINING AND DEVELOPMENT DEFINED

224

DESIGNING AN EFFECTIVE TRAINING PROCESS

225

Part 1: Needs Assessment 225 Organization Analysis 225 Task Analysis 225 Person
Analysis 227 Part 2: Design 228 Instructional Objectives 228 Lesson Planning 228
Principles of Learning 229 Part 3: Implementation 230 Training Methods 231 Types of
Training 236 Part 4: Evaluation 238 Level 1: Reaction 238 Level 2: Learning 239 Level 3:
Behavior 239 * Level 4 and Level 5: Results and Return on Investment 240
CAREER DEVELOPMENT
Competency Analysis

240

241 Career Development Activities

241

TRAINING AND DEVELOPMENT IN PRACTICE: ORGANIZATIONAL DEMANDS

247

Strategy and Training 241 Level of Investment 242 Emphasis of Investment 243 Company
Characteristics and Training 243 Where Training Is Done 243 Who Handles Training 244 8 Type of
Training 244 How Training Is Provided 244 Culture and Training 245 Focus of Training 245
Employees Willingness to Participate in Training 245 Employee Concerns and Training 245
Fairness and Equity 245 Work/Life Balance 246

XIV

CONTENTS

TRAINING AND DEVELOPMENT IN PRACTICE: ENVIRONMENTAL INFLUENCES

246

Labor Market 246 Who Needs Training 246 Type of Training 247 Technology 247
Skills Inventories 247 Method ofDelivery 247 Communication of Options 247 Globalization and
Training 248 Where Training will be Offered 248 When Training will be offered 248 How Training
will be Offered 248 What Training will be Offered 249 Ethics and Training 249
Obligation to Train 250 Content of Training 250 Use ofTraining to Change Behavior 250
TRAINING AND DEVELOPMENT IN PRACTICE: REGULATORY ISSUES
Accessibility of Training and Employee Development Opportunities

257

251 Type of Training Needed 251

Summary 252 Key Terms 252 Discussion Questions 253 Learning Exercise 1 253
Learning Exercise 2 253 Case Study 1: Project Management and Next Steps at HP 253
Case Study 2: Quality and Customer Service at Michael's Coffee and Desserts 254
PART III PROSPERA EXERCISES

PART
c h

IV

256

Managing Employee Attitudes and Behaviors 257

PERFORMANCE MANAGEMENT 258

WHY PERFORMANCE MANAGEMENT IS SO IMPORTANT

PURPOSES OF PERFORMANCE MANAGEMENT

267

STEP 1: IDENTIFYING PERFORMANCE DIMENSIONS

267

STEP 2: DEVELOPING PERFORMANCE MEASURES

262

Valid Measures

263 Performance Measurement Standards

STEP 3: EVALUATING EMPLOYEE PERFORMANCE

260

263 Specificity

263

264

Individual Comparisons 264 Absolute Approaches: Measuring Traits and Behaviors 265
Attribute-Based Approaches 266 Behavior-Based Approaches 267 Results-Based Approaches 268
Sources of Performance Data 269 Supervisors 269 Co-Workers 270 Self-Appraisals 270
9
Subordinates 270 Customer Evaluation 270 360-Degree Appraisals 271 Weighting
Performance Criteria 271 Performance Measurement Errors 272
STEP 4: PROVIDING FEEDBACK

273

When to Appraise Employees 273 The Feedback Meeting 274 Separating Evaluation from
Development 274 Targeting Behaviors or Outcomes Rather Than the Individual 274 Being Balanced in
Your Appraisal 274 Encouraging Employee Participation 274
STEP 5: DEVELOPING ACTION PLANS TO IMPROVE EMPLOYEE
PERFORMANCE
274
Understanding the Causes of Poor Performance
Employees

276

Progressive Discipline

275 Taking Action

276

Positive Discipline 277

275 Disciplining

CONTENTS

ORGANIZATIONAL DEMANDS AND PERFORMANCE MANAGEMENT

XV

277

Strategy and Performance Management 278 Which Performance Dimensions are Emphasized 278
The Performance Evaluation Method Used 279 Company Characteristics and Performance
Management 280 Which Performance Evaluation Approach is Used 280 Who Carries Out the
Process 280 Culture and Performance Management 280 The Objective of the Performance
Management System 280 Which Evaluation Approach is Used 280 Effectiveness of Performance
Management Approaches 281 Employee Concerns and Performance Management 281 Perceptions
of Procedural and Distributive Justice 281 Employees' Responsiveness to Performance Feedback 282
Achieving Work/Life Balance 282

ENVIRONMENTAL INFLUENCES AND

PERFORMANCE MANAGEMENT
283
Labor Force Trends and Performance Management 283 Accuracy of Performance Evaluations 283
The Need to Evaluate Diversity Efforts 283 Technology and Performance Management 283 The
Performance Management Process 283 How Telecommuters are Evaluated 284 Globalization and
Performance Management 284 What is Evaluated 285 The Acceptability of the Performance
Management System 285 Who Provides Performance Data 285 Ethics and Performance
Management 286 Employees'Perceptions of the Performance Management System 286 How Employees
React to Surveillance and Monitoring 286 How Ethically Employees Behave at Work 286

PERFORMANCE MANAGEMENT AND REGULATORY ISSUES

Efforts to Reduce Discrimination in the Performance Management Process
Documenting Employee Performance 287

287
287 The Importance of

Summary 288 Key Terms 289 Discussion Questions 289 Learning Exercise 1 289
Learning Exercise 2 289 Case Study 1: A New System at Addillade and Partners 290 Case
Study 2: Kay Johnson at Human Capital Consultants (HCC) 290

COMPENSATING EMPLOYEES

PURPOSE OF COMPENSATION
TOTAL COMPENSATION
EQUITY THEORY

294

295

296

INTERNAL ALIGNMENT
Job Ranking

292

298

298 Job Classification

EXTERNAL COMPETITIVENESS

298 Point Method

299 Factor Comparison

300

307

Salary Surveys 301 Job Pricing 301 Company Pay Policy

Ranges 303 Broadbanding 304

PAY FOR INDIVIDUAL EMPLOYEES

305

303 Pay Grades and Pay

XVI

CONTENTS

ALTERNATIVE COMPENSATION APPROACHES

Skill-Based and Knowledge-Based Pay
Pricing 307

305

306 Competency-Based Pay

ADMINISTERING COMPENSATION

307 Direct Market

308

COMPENSATION IN PRACTICE: ORGANIZATIONAL DEMANDS AND COMPENSATION

308

Strategy and Compensation 309 Internal Value ofJobs 309 Compensation Mix 310 Company
Characteristics and Compensation 311 Ability to Pay 311 Type of Compensation 312 Culture
and Compensation 312 Priorities of a Firm's Compensation Policy 312 Employees'Expectations and
Attitudes toward Compensation 312 Employee Concerns and Compensation 312 Equity versus
Equality 313 Fairness of Rewards 313

COMPENSATION IN PRACTICE: ENVIRONMENTAL INFLUENCES AND

COMPENSATION
374

Labor Force Trends and Compensation 314 The Level of a Firm's Compensation 314 Forms of
Compensation Employees Desire 315 Technology and Compensation 315 Ease of Collecting Salary
Data 315 * How Compensation is Tracked and Delivered 315 * What is Considered Compensable Work 315
Globalization and Compensation 316 Where Pay Decisions are Made 316 Acceptableness of
Compensation 316 Pay Rates 317 Ethics/Social Responsibility and Compensation 317 What
Compensation Decisions Signal to Employees 317 Attitudes About the Living Wage and Comparable Worth 317

COMPENSATION REGULATIONS

378

Davis-Bacon Act 318 Walsh-Healey Public Contracts Act (PCA) 319 Fair Labor Standards Act
(FLSA) 319 8 Minimum Wage 319 Exempt versus Nonexempt Employees 319 Overtime 319
Child Labor 320 Recordkeeping 320
Summary 320 Key Terms 321 Discussion Questions 321 Learning Exercise 1
Learning Exercise 2 322 Case Study 1: An Ethical Dilemma? 322 Case Study 2:
Compensation at W.L Gore 323

INCENTIVES AND REWARDS

WHY ARE INCENTIVE PLANS IMPORTANT?
HOW INCENTIVES WORK
Theories of Motivation

322

324
326

327

327

TYPES OF INCENTIVE PLANS

328

Individual Incentive Plans 328 * Merit Pay Programs 328 Piecework Incentive Plans 329 Standard
Hour Plan 330 Awards 331 Sales Incentive Plans 332 Group/ Organizational Incentives 333
Team Incentive Plans 333 * Gainsharing Plans 333 Profit Sharing Plans 334 Ownership
Plans 334 Mixed-Level Plans 335 Executive Compensation: Pay and Incentives 335 What
Makes an Incentive Plan Effective? 336

CONTENTS

INCENTIVES IN PRACTICE: ORGANIZATIONAL DEMANDS

XVII

337

Strategy and Incentives 338 What is Rewarded 338 Which Incentive Plans are Used 338
Company Characteristics and Incentives 338 Feasibility of Different Incentive Plans 338 Impact of
Incentives on Employees 339 Culture and Incentives 339 Incentive Plans Managers Choose 339
Employees'Acceptance of Incentive Plans 339 Employee Concerns and Incentives 340 Fairness of
Incentive Plan Standards 340 Likelihood of Receiving Incentives 341 Acceptability of Incentive Payouts 341

INCENTIVES IN PRACTICE: ENVIRONMENTAL INFLUENCES

347

Labor Force Trends and Incentive Plans 342 Using Incentives to Increase Diversity 342 Desirability of
Different Rewards 342 Technology and Incentives 342 How Incentives are Managed 342 Incentive
Plans for a Virtual Workforce 343 Globalization and Incentive Plans 343 What is Rewarded 343
Acceptability of Incentive Plans 344 Ethics, Social Responsibility, and Incentive Plans 344 Ethical
Employee Behavior 344 How Employees and Communities View Executive Incentive Plans 345

INCENTIVES IN PRACTICE: REGULATORY ISSUES

Bias and Discrimination

345 Stock Option Backdating

345
346

Summary 346 a Key Terms 347 Discussion Questions 347 m Learning Exercise 1 347
Learning Exercise 2 347 Case Study 1: A New Incentive System at the Auto Dealer 348
Case Study 2: Executive Compensation at AB3D 348

EMPLOYEE BENEFITS AND SAFETY PROGRAMS

EMPLOYEE BENEFITS AND SAFETY PROGRAMS
BENEFITS AND SAFETY PHIILOSOPHY
MANDATORY BENEFITS
Social Security

352

354

354

354 Unemployment Insurance (Ul)

VOLUNTARY BENEFITS

350

355 Workers' Compensation Insurance

356

356

Health and Wellness Programs 356 Health Care Plans 357 Wellness Programs 361 Employee
Assistance Programs 363 Short-and Long-Term Disability Insurance 363 Accidental Death and
Dismemberment(AD&D) 365 Life Management Benefits 365 Paid Time Off 366 Educational
Assistance 366 Child Care and Elder Care 366 Long-Term Care Benefits 366 Life Insurance 367
Financial Planning 367 Legal Services 367 Retirement Benefits 367 Contributory and
Noncontributory Retirement Plans 368 Defined Benefit Pension Plans 368 Defined Contribution
Plans 369 Pension Protection Act of 2006 370 Retiree Health Plans 370

BENEFITS ADMINSTRATION
SAFETY PROGRAMS

370

372

Programs Related to the Occupational Safety and Health Act 372 Inspection Programs 372
Partnership Programs 372 Reporting Requirements 373 Workplace Violence Programs 373
Ergonomic Programs 373

XVill

CONTENTS

EMPLOYEE BENEFITS IN PRACTICE: ORGANIZATIONAL DEMANDS

374

Strategy, Benefits, and Safety Programs 374 Role of Programs in Total Compensation Package 374
Funds Available for Benefits 375 Company Characteristics, Benefits, and Safety Programs 375
Types of Benefits and Safety Programs 375 Availability of Programs 376 Company Culture,
Benefits, and Safety Programs 377 Employees'Attitudes Toward Their Firm's Benefits and Safety
Programs 377 Who Receives Nonmandatory Benefits 378 Employees'Concerns About Their Firm's
Benefits and Safety Programs 378 Perceptions of Fairness of the Firm's Benefits 378 Safety in the
Workplace 379
EMPLOYEE BENEFITS, AND SAFETY IN PRACTICE: ENVIRONMENTAL
INFLUENCES
379
The Labor Market and Benefits and Safety Programs 379 What Benefits Need to be Offered 379
Need for Safety Modifications and Training 379 Technology and Benefits and Safety Programs 380
How Benefits Information is Delivered 380 Telecommuting and Safety 380 Globalization and
Employee Benefits and Safety Programs 381 Types of Benefits Offered 381 Policies about Benefits
Equalization 382 Norms Relative to Safety 382 Ethics and Social Responsibility and Benefits and
Safety Programs 382 Management of Benefits 382 Comprehensiveness of Safety Programs 383
EMPLOYEE BENEFITS IN PRACTICE: REGULATORY ISSUES
What Happens When Workers Change Jobs

383

383 Protection of Employee Information

384

Summary 384 Key Terms 384 Discussion Questions 385 Learning Exercise 1 385
Learning Exercise 2 386 Case Study 1: Keeping Up with ACUITY 386 Case Study 2:
Creating a Safety Culture at Custom Transportation 386
PART IV PROSPERA EXERCISES

PART

388

V Special Topics 389

LABOR UNIONS AND EMPLOYEE MANAGEMENT

LABOR RELATIONS OVERVIEW

390

392

BRIEF HISTORY OF LABOR UNION MOVEMENT IN THE UNITED STATES

GOVERNMENT REGULATION OF LABOR UNIONS

392

394

Railway Labor Act of 1926 394 Norris-LaGuardia Act of 1932 395 Wagner Act (National Labor
Relations Act) 395 Employee Rights 395 Unfair Labor Practices 396 National Labor Relations Board
(NLRB) 396 Taft-Hartley Act of 1947 396 Union Membership 397 National Emergency
Strikes 398 Federal Mediation and Conciliation Service 398 Landrum-Griffin Act of 1959 398
TYPES OF UNIONS
Local Unions

398

399 International Unions

400

CONTENTS

THE UNION-ORGANIZING PROCESS

400

Role of Employees, Employers, and Union Organizers

COLLECTIVE BARGAINING
Good Faith Bargaining

401 Card Checks and Neutrality Agreements 401

402

402 Bad Faith Bargaining

402 Negotiating the Agreement 402

Preparing to Negotiate 402 Knowing the Interests of the Other Party

of Not Reaching an Acceptable Agreement 403

THE GRIEVANCE PROCESS

403

Understanding the Consequences

404

THE NLRB'S ROLE IN UNFAIR LABOR PRACTICES

DECERTIFICATION

XIX

405

405

CORPORATE CAMPAIGNS

405

PUBLIC-SECTOR LABOR RELATIONS

TRENDS IN LABOR RELATIONS
Changes in Union Activities
Trends 408

406

406

406 New Forms of Employee Organizations

407 Global

Summary 409 Key Terms 409 Discussion Questions 410 Learning Exercise 1 410
Learning Exercise 2 410 Case Study 1: Time for a Union at Starbuck's? 410 Case Study 2:
Not So Grand Morale at the Grand Limited Hotel 411

CREATING HIGH-PERFORMING HR SYSTEMS 412

PRINCIPLES OF HIGH-PERFORMING HR SYSTEMS

475

External Fit: Aligining HR Activities with HR Challenges 415 Internal Fit: Aligning HR Activities with
One Another 416 Deadly Combinations 417 Powerful Connections 417 Aligning HR Systems
and Employees' Contributions 417
MANAGING THE EMPLOYMENT PORTFOLIO
Strategic Value
Employees

419 Uniqueness

421 Job-Based Employees

419

420 Mapping Your Employment Portfolio

422

Contract Workers

EVALUATING YOUR HR SYSTEM: THE HR SCORECARD

Step 1: identify Your Firm's Strategic Performance Drivers

421 Core

422 Alliance Partners

422

423

424 Step 2: Evaluate Your Firm's External

Alignment 4 2 4 Translate the Strategic Performance Drivers into HR Deliverables 424 Evaluating the
Alignment of HR Deliverables with the Strategic Performance Drivers 425 S t e p 3: Evaluate Your Firm's
Internal Alignment 4 2 5 Evaluating the Alignment of the HR Practices with the HR Deliverables 425
Evaluating the Alignment Among the Firm's HR Practices 427

XX

CONTENTS

BUILDING YOUR OWN HIGH-PERFORMING ORGANIZATION

Customizing Your HR Scorecard 429 Being Consistent
Following Up on the Implementation of a Redesign 430

427

429 Being Specific

429

Summary 430 Key Terms 430 Discussion Questions 431 Learning Exercise 1 431
Learning Exercise 2 432 Case Study 1: The Puzzling Case at Digital Gaming 432 Case Study
2: People's Home Gadgets 433
PART V PROSPERA EXERCISES
REFERENCES
GLOSSARY

435
462

PHOTO CREDITS
NAME INDEX

471

472

COMPANY INDEX
SUBJECT INDEX

476
478

434