CHAPTER 10

Strategic Human
Resource Management

Pamela S. Lewis
Stephen H. Goodman
Patricia M. Fandt
Copyright 2004 by South-Western, a division of Thomson Learning.
All rights reserved.

Slides Prepared by
Zulema Seguel

Learning Objectives

slide 1 of 2

1. Identify and explain the components of the

strategic human resource management process.
2. Define job analysis and explain its importance.
3. Explain the role of forecasting in human resource
planning.
4. Summarize the different recruiting techniques used
by organizations.
5. Clarify the major employee selection methods.
6. Explain the different types of employee training.

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52

Learning Objectives

slide 2 of 2

7. Describe the role of performance appraisals in

the organization.
8. Explain how compensation and benefits are
used in organizations.
9. Describe the key factors of the legal
environment in which human resource
management functions.
10. Explain the importance of labor management
relations.
11. Clarify the primary challenges of SHRM in
the multinational organization.
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52

Strategic Human
Resource Management (SHRM)
Job Analysis
Forecasting
Staffing
Training
Performance Appraisal
Compensation
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52

Job Analysis
A job analysis refers to studying a job in
order to understand what is needed to help
the job holder perform a job successfully.
Knowledge
Skills
Abilities
Attitudes

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52

Job Description and Specification

A job description explains the job in terms of:
Tasks
Behavior
Responsibilities

A job specification lists what is needed to

perform the job successfully.

Specific knowledge
Skills
Abilities
Employee characteristics

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52

Forecasting
Demand Forecasting
Determining the number of employees that
the organization will need at some point in
the future as well as the knowledge, skills,
and abilities that these employees must
possess.

Supply Forecasting
Determining what human resources will be
available, both inside and outside the
organization.

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52

Recruitment
The process of finding and attracting job
candidates who are qualified to fill job
vacancies.
Internal recruitment
Identifying candidates from inside the
organization and encouraging them to
apply for jobs that are vacant.
External recruitment
Advertising for and soliciting applicants
from outside the organization.
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52

Selection
Selection is the process of evaluating and
choosing the best qualified candidate from the
pool of applicants recruited for the position.
It entails the exchange of accurate information
between employers and job candidates to
optimize the person-job match.
Although organizations usually make these
decisions, applicants also self-select by
choosing to join, not to join, or to leave,
organizations according to their individual
needs.
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52

Validity and Reliability

To select the right person for a job, any
method used to make an employment
decision must demonstrate validity and
reliability.
Validity requires that the method accurately
measure or predict what it is intended to
measure or predict.
Reliability means that the method must
measure, or predict, the same thing each time
it is used.
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10 52

Selection Methods
Application forms and resumes
Tests
Interviews
Physical exams and drug tests

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Application Forms and Resumes

Application forms and/or resumes are usually
the first sources of information about a potential
employee.
Applications and resumes usually record the
applicants desired position and job-related
qualifications and experience.
Both serve as prescreening devices to help
determine whether an applicant meets the
minimum requirements of a position.
Both also allow for preliminary comparisons
with the credentials of other candidates.
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Selection Methods
Application forms and resumes
Tests
Interviews
Physical exams and drug tests

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13 52

Tests
Tests help pick the best candidate for the
position.
There are three categories of tests:
Written tests
Performance tests
Personality or personal tests

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Written Tests
Test the applicant in a variety of areas:
Knowledge
Ability
Skill
Intelligence
Interest

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Performance Tests
Performance tests require the job
candidate to actually perform it the job,
usually in a small part or for a short time.
There are two common types of
performance tests:
Work samples
Assessment centers

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16 52

Work Sample Performance Tests

Work samples are more appropriate for jobs that
are more routine and/or more specific.
If work samples are designed and selected well,
then the persons performance in the work
sample should accurately predict their
performance on the job.
Work samples do show high validity scores,
especially when compared to written aptitude,
personality or intelligence tests.

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17 52

Assessment Center Performance Tests

Assessment centers are usually more
appropriate to judge a candidates predicted
performance in a more complex job.
The candidate typically is presented with a
fairly large number and varying types of tasks
to do (sometimes more than can reasonably be
done).
The intent of the assessment center is to judge
how a candidate would behave and perform in
selected tasks to predict performance on the job.
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18 52

Personality or Personal Tests

Judge whether a person fits into the
organization.
The goal is to hire people who already
have characteristics and attitudes that
are line with the core values of the
organization and its culture.
It is assumed that it is easier to teach a
person the details of a job than it is to
teach him or her to change deeply help
attitudes or change personality
characteristics.
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19 52

Selection Methods
Application forms and resumes
Tests
Interviews
Physical exams and drug tests

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Interviews
Interviews are relatively formal, in-depth
conversations conducted for the purpose of
assessing a candidates knowledge, skills and
abilities
Interviews also provide the candidate information
about the organization and potential jobs.
Interviews tend to have low validity.
While many people conduct interviews, few are
trained in how to do them well.
Interviews also tend to be fairly informal and no
two are alike which raises issues with reliability.
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21 52

Interview Guidelines

slide 1 of 2

To increase the validity and reliability of an

interview:
Base the interview questions on a complete
and current job analysis.
Ask precise, specific questions that are job
related.
Avoid biases, making snap judgments,
stereotyping, or looking for only negative, or
only positive, information.
Be careful about having a perception, or
stereotype, of what the good candidate is.
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22 52

Interview Guidelines

slide 2 of 2

Be careful about making up you mind about

the applicant in the first several minutes, as is
usually the case.
Avoid questions that can lead to
discrimination.
Keep written records of the interview.

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Realistic Job Preview

The interviewer explains to the applicant
what the job really requires rather than
giving just the positive points of a job or
company and avoiding the negative.

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24 52

Selection Methods
Application forms and resumes
Tests
Interviews
Physical exams and drug tests

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25 52

Physical Exams and Drug Tests

A physical exam is intended to ensure that a
person is physically able to carry out certain job
requirements.
A physical exam can also be used to enroll
employees in fringe benefits such as health, life,
or disability insurance.
Drug tests, while controversial, are used by
many companies for both hiring and for
continued employment.
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Training
A planned effort to assist employees in
learning job-related behaviors in order to
improve performance.
Companies train employees in an effort to
prepare them to work toward achieving the
goals and objectives of the organization.

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Types of Training Programs

Orientation
Technical training
On-the-job training
Management development
programs

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Performance Appraisal
A systematic process of evaluating employee
job-related achievements, strengths,
weaknesses, as well as determining ways to
improve performance.
Uses of performance appraisal information:
Motivation
Personnel movement
Training
Feedback for improvement and personal
development
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29 52

Rating Performance
Behavior-oriented approaches
Results-oriented
approaches

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Behavior-Oriented Approaches
Behavior-oriented approaches to
performance appraisal focus on assessing
employee behavior.
The approach is based on the idea that
certain behaviors will lead to successful
performance on the job.
Two commonly used methods are:
Graphic rating scales
Behaviorally-anchored rating scales
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Graphic Rating Scales

Assess employees on a series of
performance dimensions such as:
Initiative
Tardiness
Accuracy of work

Performance dimensions on a graphic rating

scale tend to be fairly general.
As a result the scales are relatively flexible
and can be used to evaluate individuals in a
number of different jobs.
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32 52

Behavioral-Anchored
Rating Scales (BARSs)
BARSs are similar to graphic rating scales,
but they use more detailed examples of job
behaviors to represent different layers of
performance.
The BARSs approach relies on job analysis
information to describe a range of desirable
and undesirable behaviors for each
performance dimension.

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Rating Performance
Behavior-oriented approaches
Results-oriented
approaches

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Problems with Performance Appraisal

Halo Effect
Rater Patterns
Contrast Error
Regency Error

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Halo Effect
Occurs when a manager rates an
employee high or low on all items
because of one characteristic.
For example, an employee that is good at
handling customer complaints may
receive high ratings in all other areas of
work, just because the rater is impressed
with the employees skills in this area.

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36 52

Rater Patterns
Occurs when a rater develops a pattern in
his or her ratings of employees.
Central tendency occurs when the rater
judges all employees as average, even
though their performance varies.
A leniency-severity error occurs when
the rater is unjustifiably easy or harsh in
evaluating employee performance.

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37 52

Contrast Error
The tendency to rate employees relative to
each other rather than to performance
standards.
For example, if almost everyone in a group
is doing a mediocre job, then a person
performing somewhat better may be rated
as excellent because of the contrast effect.

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38 52

Recency Error
Occurs when a manager bases an evaluation
on the employees most recent performance.
This is typically a problem when the
evaluations are not frequent enough for the
rater to recall performances over a long
period of time.

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39 52

Organizational Rewards
Organizations must reward employees for
doing good work, for helping achieve the
goals and mission of the organization.
Frequently, when the work reward is used,
we think of money.
However, there are very important nonmonetary rewards the employees are also
seeking from their work.

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Direct Compensation
Base pay
Refers to wages and salaries employees
receive in exchange for performing their
jobs.

Incentives
Compensation beyond base pay used to
attract, retain, and motivate employees.
Bonuses, commissions, profit-sharing plans,
stock options.
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Indirect Compensation
Benefits
Rewards employees receives as part of their
employment relationship with the organization.

Benefit categories
Required and voluntary security
Retirement
Time-off
Insurance and financial
Social and recreational
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Designing Equitable Reward Systems

Compensation designers are concerned with three
sources of fairness expectation:
External Fairness
Is the pay for the job fair in one organization relative
to the pay for the same job in other organizations?
Internal Fairness
Is the pay for the job within the organization fair
relative to the pay of other jobs in the same
organization?
Employee Fairness
Is the pay fair relative to what coworkers are making
on the same job?

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Legal Environment of SHRM

Federal and state laws specify requires,
acceptable and prohibited employment practices.
These place constraints on recruitment, selection,
placement, training and other human resource
activities.
We will look at four prominent legal issues facing
SHRM today.

Important laws
Affirmative action
Workforce diversity
Sexual harassment

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Important Laws
Equal employment opportunity (EEO) laws prohibit
the consideration of race, color, religion, national
origin, or gender in employment decision-making.
In addition, there are laws prohibiting employment
decisions based on biases against qualified
individuals with disabilities and the elderly.
An exception to discrimination based on the
protected areas listed above is a bona fide
occupational qualification which means the
determination not to hire is based on job analysis,
not personal attitude, opinion, bias or stereotype.

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Affirmative Action
The legal requirement that federal
contractors, some public employees and
private organizations under court order for
short term remedies must actively recruit,
hire, and promote members of minority
groups and other protected classes if such
individuals are underrepresented in the
organization.

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Workforce Diversity
Demographic changes in the work
force have forced organizations to
introduce new SHRM programs,
beginning with the recruiting and
hiring of diverse individuals.
Diversity can be a competitive
advantage if people in an organization
are accepting of diverse perspectives
and issues and are taught to work well
together.
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Sexual Harassment
Sexual harassment refers to actions that are
sexually directed, are unwanted, and subject the
worker to adverse employment conditions.
Two major forms of sexual harassment :
Quid pro quo harassment refers to conditions where
sexual compliance is required for job-related benefits
and opportunities such as pay and promotion.
Hostile environment harassment refers to
conditions where the victim does not suffer any
tangible economic injury but workplace conduct is
sufficiently severe to create an abusive working
environment.

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Labor-Management Relations
The formal process through which labor
unions represent employees to negotiate
terms and conditions of employment,
including:
Pay
Hours of work
Benefits
Other important aspects
of the working environment
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Challenges of SHRM
in Multinational Organizations
Multinational organizations face greater diversity
in their work force and, as a result, must develop
an SHRM system that is flexible and adaptable to
a wide variety of cultural situations.
Managing expatriate personnel can be especially
challenging in terms of selection, training and
compensation.
An expatriate is an organizational member
who is a citizen of the country in which the
organization is headquartered but is assigned
to facility in another country.
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50 52

Implications for Leaders: SHRM

slide 1 of 2

Recognize that strategic human resource management

is a critical element of the strategic planning process
and is essential for long-term organizational success.
Keep in mind that job analysis is essential in order to
understand what knowledge, skills, abilities, and
attitudes each job requires.
Carefully evaluate both internal and external sources
for recruiting people.
Base all SHRM decisions on job-related criteria and
not on racial, gender or other unjustified bias.

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Implications for Leaders: SHRM

slide 2 of 2

To keep pace with rapid changes in technology,

be sure to upgrade the knowledge and skill base
of employees through training programs.
Develop equitable pay systems, unbiased
performance appraisals, and equal access to
training opportunities.
Be innovative in scheduling work, designing
jobs, and rewarding employees so that you can
respond effectively to the changing composition
and needs of the work force.
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