Revision Sheet

BMGT315 – Human Resources Management

Chapter 1
Introduction to Human Resource Management

Objective 1.1 What is Human Resource Management?

An organization consists of people (in this case, people like Upwork’s own in-house Web designers and
managers) with formally assigned roles who work together to achieve the organization’s goals. A
manager is someone who is responsible for accomplishing the organization’s goals, and who does so by
managing the efforts of the organization’s people.

Most writers agree that managing involves performing five basic functions:
●Planning: Establishing goals and standards; developing rules and procedures; developing plans and
forecasts
● Organizing. Giving each subordinate a specific task; establishing departments; delegating authority to
subordinates; establishing channels of authority and communication; coordinating the work of
subordinates
● Staffing. Determining what type of people should be hired; recruiting prospective employees; selecting
employees; setting performance standards; compensating employees; evaluating performance; counseling
employees; training and developing employees
● Leading. Getting others to get the job done; maintaining morale; motivating subordinates
● Controlling. Setting standards such as sales quotas, quality standards, or production levels; checking to
see how actual performance compares with these standards; taking corrective action as needed

Human resource management (HRM) is the process of acquiring, training, appraising, and
compensating employees, and of attending to their labor relations, health and safety, and fairness
concerns.

❖ Why Is Human Resource Management Important to All Managers?

- AVOID PERSONNEL MISTAKES: First, having this knowledge will help you avoid the
personnel mistakes you don’t want to make while managing. For example, you don’t want
● To have your employees not doing their best.
● To hire the wrong person for the job
● To experience high turnover.
● To have your company in court due to your discriminatory actions.
● To have an employee hurt due to unsafe practices.
● To let a lack of training undermine your department’s effectiveness.
● To commit any unfair labor practices.

-IMPROVING PROFITS AND PERFORMANCE: More important, it can help ensure that you get
results—through people. Remember that you could do everything else right as a manager—lay brilliant
plans, draw clear organization charts, set up modern assembly lines, and use sophisticated accounting
controls—but still fail, for instance, by hiring the wrong people or by not motivating subordinates. On the
other hand, many managers—from generals to presidents to supervisors—have been successful even
without adequate plans, organizations, or controls. They were successful because they had the knack for
hiring the right people for the right jobs and then motivating, appraising, and developing them

-YOU MAY SPEND SOME TIME AS AN HR MANAGER: Here is another reason to study this book:
you might spend time as a human resource manager.

-HR FOR SMALL BUSINESSES: And here is one other reason to study this book: you may well end
up as your own human resource manager.

❖ Line and Staff Aspects of Human Resource Management

Authority is the right to make decisions, to direct the work of others, and to give orders. Managers
usually distinguish between line authority and staff authority.
In organizations, line authority traditionally gives managers the right to issue orders to other managers or
employees. Line authority therefore creates a superior (order giver)–subordinate (order receiver)
relationship. When the vice president of sales tells her sales director to “get the sales presentation ready
by Tuesday,” she is exercising her line authority
Staff authority gives a manager the right to advise other managers or employees. It creates an advisory
relationship. When the human resource manager suggests that the plant manager use a particular selection
test, he or she is exercising staff authority.
On the organization chart, managers with line authority are line managers. Those with staff (advisory)
authority are staff managers.

❖ Line Managers’ Human Resource Management Responsibilities

line managers do have many human resource duties. This is because the direct handling of people has
always been part of every line manager’s duties. One major company outlines its line supervisors’
responsibilities for effective human resource management under these general headings:
1. Placing the right person in the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs that are new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working relationships
6. Interpreting the company’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9.Creating and maintaining departmental morale
10. Protecting employees’ health and physical conditions

❖ The Human Resource Department

In small organizations, line managers may carry out all these personnel duties unassisted. But as the
organization grows, line managers usually need the assistance, specialized knowledge, and advice of a
separate human resource staff. In larger firms, the human resource department provides such specialized
assistance.
Examples of job duties include:
●Recruiters: Use various methods including contacts within the community and print and online media to
search for qualified job applicants.
● Equal employment opportunity (EEO) representatives or affirmative action coordinators: Investigate
and resolve EEO grievances, examine organizational practices for potential violations, and compile and
submit EEO reports
● Job analysts: Collect and examine detailed information about job duties to prepare job descriptions. ●
Compensation managers: Develop compensation plans and handle the employee benefits program.
● Training specialists: Plan, organize, and direct training activities.
● Labor relations specialists: Advise management on all aspects of union– management relations.
❖ NEW APPROACHES TO ORGANIZING HR

However, what HR departments do and how they do it are changing. Because of this, many
employers are taking a new look at how they organize their human resource functions.

Most are “actively seeking to transform” how they deliver human resource services, largely by
adopting new HR technology tools (such as online training portals).

Many are using technology to institute more “shared services” arrangements. These create
centralized HR units whose employees are shared by all the companies’ departments to assist the
departments’ line managers in human resource matters.

Objective 1.3 Important Components of Today’s New Human Resource

Management

“Personnel management” is not new. Ancient armies and organized efforts always required
attracting, selecting, training, and motivating workers. But personnel tasks like these were mostly
just part of every manager’s job.

❖ Distributed HR and the New Human Resource Management

First, thanks to technologies like social media and cloud computing, more human resource
management tasks are being redistributed from a central HR department to the company’s
employees and line managers.76 For example, employees at Washingtonbased LivingSocial use a
digital tool called Rypple to comment on each other’s work.

Some experts say that if current trends continue, many aspects of HR and talent management may
become “fully embedded in how work gets done throughout an organization [distributed], thereby
becoming an everyday part of doing business

❖ Strategic Human Resource Management

A second pillar of HR today is that today’s human resource management is more involved in
longer-term, strategic “big picture” issues. We’ll see in Chapter 3 (Strategy) that strategic human
resource management means formulating and executing human resource policies and practices
that produce the employee competencies and behaviors the company needs to achieve its strategic
aims.

❖ Performance and Human Resource Management

Third, employers also expect human resource management to spearhead employee performance-
improvement efforts.87 Here HR can apply three levers. The first is the HR department lever. The
HR manager ensures that the human resource management function is delivering services
 efficiently. For example, this might include outsourcing certain activities such as benefits
management, and using technology to deliver its services more cost-effectively. The second is the
employee costs lever. For example, the human resource manager takes a prominent role in
advising top management about the company’s staffing levels, and in setting and controlling the
firm’s compensation, incentives, and benefits policies. The third is the strategic results lever.
Here the HR manager puts in place the policies and practices that produce the employee
competencies and skills the company needs to achieve its strategic goals.

❖ Sustainability and Human Resource Management

Fourth, in a world where sea levels are rising, glaciers are crumbling, and people increasingly
view financial inequity as offensive, more and more people say that businesses (and their HR
teams) can't just measure “performance” in terms of maximizing profits. They argue that
companies’ efforts should be “sustainable,” by which they mean judged not just on profits, but
also on their environmental and social performance as well.95 As one example, PepsiCo has a
goal to deliver “Performance with Purpose”—in other words, to deliver financial performance
while also achieving human sustainability, environmental sustainability, and talent sustainability.
PepsiCo wants to achieve business and financial success while leaving a positive imprint on
society.

❖ Employee Engagement and Human Resource Management

Fifth, employee engagement refers to being psychologically involved in, connected to, and
committed to getting one’s jobs done. Engaged employees “experience a high level of
connectivity with their work tasks,” and therefore work hard to accomplish their task-related
goals. Employers expect HR to help achieve employee engagement today.

❖ Ethics and Human Resource Management

Finally, ethics means the standards someone uses to decide what his or her conduct should be.
Regrettably, news reports are filled with stories of otherwise competent managers who have run
amok. For example, prosecutors filed criminal charges against several Iowa meatpacking plant
human resource managers who allegedly violated employment law by hiring children younger
than 16.
 Chapter 4
Job Analysis and The Talent management Process

Objective 4.1 Talent Management Process

We will define talent management as the holistic, integrated and results- and goal-oriented process of
planning, recruiting, selecting, developing, managing, and compensating employees. What does this
mean in practice? The manager who takes a talent management approach tends to take actions such as the
following:
1. He or she starts with the results and asks, “What recruiting, testing, training, or pay action should I take
to produce the employee competencies we need to achieve our company’s goals?”
2. He or she treats activities such as recruiting and training as interrelated. For example, the manager
knows that having employees with the right skills depends as much on recruiting and training as on
applicant testing.
3. Because talent management is holistic and integrated, he or she will probably use the same “profile” of
required human skills, knowledge, and behaviors (“competencies”) for formulating a job’s recruitment
plans as for making selection, training, appraisal, and compensation decisions for it.
4. And, to ensure the activities are all focused on the same ends, the manager will take steps to coordinate
the talent management functions (recruiting and training, for example). Doing so often involves using
talent management software.

4.2 The Basics of Job Analysis

What is Job Analysis?

Job analysis is the procedure through which you determine the duties of the company’s positions and the
characteristics of the people to hire for them.6 Job analysis produces information for writing
job descriptions (a list of what the job entails) and job (or “person”) specifications (what kind of people to
hire for the job). Virtually every personnel-related action— interviewing applicants, and training and
appraising employees, for instance—requires knowing what the job entails and what human traits one
needs to do the job well.

The supervisor or human resources specialist normally collects one or more of the following types of
information via the job analysis:
● Work activities. Information about the job’s actual work activities, such as cleaning, selling, teaching,
or painting. This list may also include how, why, and when the worker performs each activity.
● Human behaviors. Information about human behaviors the job requires, like sensing, communicating,
lifting weights, or walking long distances.
 ● Machines, tools, equipment, and work aids. Information regarding tools used, materials processed,
knowledge dealt with or applied (such as finance or law), and services rendered (such as counseling or
repairing).
● Performance standards. Information about the job’s performance standards (in terms of quantity or
quality levels for each job duty, for instance).
● Job context. Information about such matters as physical working conditions, work schedule, incentives,
and, for instance, the number of people with whom the employee would normally interact.
● Human requirements. Information such as knowledge or skills (education, training, work experience)
and required personal attributes (aptitudes, personality, interests)

Uses of Job Analysis:

-RECRUITMENT AND SELECTION Information about what duties the job entails and what human
characteristics are required to perform these duties helps managers decide what sort of people to recruit
and hire.
-EEO COMPLIANCE Knowing a job's duties is necessary for determining, for example, whether a
selection test is a valid predictor of success on the job. Furthermore, to comply with the ADA, employers
should know each job’s essential job functions—which requires a job analysis.
-PERFORMANCE APPRAISAL A performance appraisal compares an employee’s actual performance
of his or her duties with the job's performance standards. Managers use job analysis to learn what these
duties and standards are.
- COMPENSATION Compensation (such as salary and bonus) usually depends on the job’s required skill
and education level, safety hazards, degree of responsibility, and so on—all factors you assess through job
analysis. TRAINING The job description lists the job’s specific duties and requisite skills—thus
pinpointing what training the job requires.

4.3 Methods for Collecting Job Analysis Information

There are many ways (interviews or questionnaires, for instance) to collect job information. The basic
rule is to use those that best fit your purpose.

Before actually analyzing the job, keep several things in mind:

. ● Make the job analysis a joint effort by a human resources manager, the worker, and the supervisor.
The human resource manager might observe the worker doing the job, and have the supervisor and
worker complete job questionnaires. The supervisor and worker then verify the HR manager’s list of job
duties.
● Make sure the questions and the process are clear to the employees.
● Use several job analysis methods. For example, a questionnaire might miss a task the worker performs
just occasionally. Therefore it’s prudent to follow up the questionnaire with a short interview
 ❖ The Interview
Job analysis interviews range from unstructured (“Tell me about your job”) to highly structured ones with
hundreds of specific items to check off. Managers may conduct individual interviews with each
employee, group interviews with groups of employees who have the same job, and/or supervisor
interviews with one or more knowledgeable supervisors. Use group interviews when a large number of
employees are performing similar or identical work, since this can be a quick and inexpensive way to
gather information. As a rule, the workers’ immediate supervisor attends the group session; if not, you
can interview the supervisor separately. The interviewee should understand the reason for the interview.
There’s a tendency for workers to view such interviews, rightly or wrongly, as “efficiency evaluations.”
If so, interviewees may hesitate to describe their jobs accurately.

-STRUCTURED INTERVIEWS
Many managers use questionnaires to guide the interview. It includes questions regarding matters like the
general purpose of the job, supervisory responsibilities, job duties, and skills required.
PROS AND CONS:
The interview’s wide use reflects its advantages. It’s a simple and quick way to collect information.
Skilled interviewers can also unearth important activities that occur occasionally, or informal contacts not
on the organization chart. The employee can also vent frustrations that might otherwise go unnoticed.
Distortion of information is the main problem.14 Job analysis often precedes changing a job’s pay rate.
Employees therefore often view it as pay-related, and exaggerate some responsibilities while minimizing
others.

❖ Questionnaires
Having employees fill out questionnaires to describe their job duties and responsibilities is another
popular job analysis approach. Some questionnaires are structured checklists. Here each employee gets an
inventory of perhaps hundreds of specific duties or tasks (such as “change and splice wire”). He or she
must indicate if he or she performs each task and, if so, how much time is normally spent on each. At the
other extreme, the questionnaire may simply ask, “describe the major duties of your job.

Questionnaires have pros and cons. This is a quick and efficient way to obtain information from a large
number of employees; it’s less costly than interviewing dozens of workers, for instance. However,
developing and testing it (perhaps by making sure the workers understand the questions) can be time-
consuming. And as with interviews, employees may distort their answers.

❖ Observation
Direct observation is especially useful when jobs consist of observable physical activities—assembly-line
worker and accounting clerk are examples. However, it’s usually not appropriate when the job entails a
lot of mental activity (lawyer, design engineer). Nor is it useful if the employee only occasionally engages
in important activities, such as a nurse who handles emergencies. Reactivity—the worker’s changing
what he or she normally does because you are watching—is another problem.

Managers often use direct observation and interviewing together. One approach is to observe the worker
on the job during a complete work cycle. (The cycle is the time it takes to complete the job; it could be a
minute for an assembly-line worker or an hour, a day, or longer for complex jobs.) Here you take notes of
all the job activities. Then, ask the person to clarify open points and to explain what other activities he or
she performs that you didn’t observe.

❖ Participant Diary/Logs
Another method is to ask workers to keep a diary/log; here for every activity engaged in, the employee
records the activity (along with the time) in a log. Some firms give employees pocket dictating machines
and pagers. Then randomly during the day, they page the workers, who dictate what they are doing at that
time.

❖ Quantitative Job Analysis Techniques

Qualitative methods like interviews and questionnaires are not always suitable. For example, if your aim
is to compare jobs for pay purposes, a mere listing of duties may not suffice. You may need to say that, in
effect, “Job A is twice as challenging as Job B, and so is worth twice the pay.” To do this, it helps to have
quantitative ratings for each job. The position analysis questionnaire and the Department of Labor
approach are quantitative methods for doing this.

-POSITION ANALYSIS QUESTIONNAIRE: The position analysis questionnaire (PAQ) is a very

popular quantitative job analysis tool, consisting of a questionnaire containing 194 items.16 The 194
items (such as “written materials”) each represent a basic element that may play a role in the job.17 The
items each belong to one of five PAQ basic activities: (1) Having Decision-
Making/Communication/Social Responsibilities, (2) Performing Skilled Activities, (3) Being Physically
Active, (4) Operating Vehicles/ Equipment, and (5) Processing Information. The final PAQ “score”
reflects the job’s rating on each of these five activities.

❖ Online Job Analysis Methods

Employers also use online job analysis methods. Here the human resource department generally
distributes standardized job analysis questionnaires to geographically disbursed employees online, with
instructions to complete the forms and return them by a particular date.

Objective 4.4 Writing Job Descriptions

he most important product of job analysis is the job description. A job description is a written statement
of what the worker actually does, how he or she does it, and what the job’s working conditions are. You
use this information to write a job specification; this lists the knowledge, abilities, and skills required to
perform the job satisfactorily.

There is no standard format for writing a job description. However, most descriptions contain sections
that cover:
1. Job identification
2. Job summary
3. Responsibilities and duties
4. Authority of incumbent
5. Standards of performance
6. Working conditions
7. Job specification

• Job Identification
The job identification section (on top) contains several types of information. The job title specifies the
name of the job, such as inventory control clerk.

• Job Summary
The job summary should summarize the essence of the job, and should include only its major
functions or activities.

• Relationships
There may be a “relationships” statement that shows the jobholder’s relationships with others inside
and outside the organization
Example:
Reports to: Vice president of employee relations.
Supervises: Human resource clerk, test administrator, labor relations director, and one secretary.
Works with: All department managers and executive management.
Outside the company: Employment agencies, executive recruiting firms, union representatives, state
and federal employment offices, and various vendors.
• Responsibilities and Duties
This is the heart of the job description. It should present a list of the job’s responsibilities and duties.
This section may also define the jobholder’s authority limits.
Usually, the manager’s basic question here is, “How do I determine what the job’s duties are and
should be?” The answer first is, from the job analysis; this should reveal what the employees on each
job are doing now.

• Standards of Performance and Working Conditions

A “standards of performance” section lists the standards the company expects the employee to
achieve for each of the job description’s main duties and responsibilities.

Objective 4.5 Writing Job Specifications

The job specification takes the job description and answers the question, “What human traits and
experience are required to do this job effectively?” It shows what kind of person to recruit and for
what qualities you should test that person. It may be a section of the job description, or a separate
document.

• Specifications for Trained versus Untrained Personnel

Writing job specifications for trained and experienced employees is relatively straightforward. Here
job specifications tend to focus on factors such as length of previous service, quality of relevant
training, and previous job performance. The problems are more complex when you’re filling jobs
with untrained people (with the intention of training them on the job). Here you must specify qualities
such as physical traits, personality, interests, or sensory skills that imply some potential for
performing the job or for trainability.

• Specifications Based on Judgment

Most job specifications simply reflect the educated guesses of people like supervisors and human
resource managers. The basic procedure here is to ask, “What does it take in terms of education,
intelligence, training, and the like to do this job well?” How does one make such “educated guesses”?
You could simply review the job’s duties, and deduce from those what human traits and skills the job
requires

• Job Specifications Based on Statistical Analysis

 Basing job specifications on statistical analysis (rather than only judgment) is more defensible, but
it’s also more difficult. The aim is to determine statistically the relationship between (1) some
predictor (human trait such as height, intelligence, or finger dexterity), and (2) some indicator or
criterion of job effectiveness, such as performance as rated by the supervisor.

• Employee Engagement Guide for Managers

As noted earlier, the manager should not ignore, while writing the job specification, desirable on-the-
job behaviors that apply to almost any job but that might not normally surface through a job analysis.
Employee engagement is an example.
 Chapter 5
Personnel Planning and Recruiting

Objective 5.1 Workforce Planning and Forecasting

Workforce (or employment or personnel) planning is the process of deciding what positions the firm
will have to fill, and how to fill them. Its aim is to identify and to eliminate the gaps between the
employer’s projected workforce needs and the current employees who might be suitable for filling
those needs. The manager should engage in workforce planning before recruiting and hiring
employees. After all, if you don’t know what your employment needs will be in the next few months
or years, why are you hiring?
The basic workforce planning process:
First, review the client’s business plan and workforce data (for instance, on how revenue influences
staffing levels). This helps them understand how projected business changes may influence the
client’s headcount and skills requirements.
Second, forecast and identify what positions the firm will have to fill and potential workforce gaps;
this helps them understand what new future positions they’ll have to fill, and what current employees
may be promotable into them.
Third, develop a workforce strategic plan; here they prioritize key workforce gaps (such as, what
positions will have to be filled, and who do we have who can fill them?) and identify specific
(recruitment, training, and other) plans for filling any gaps.
Finally, implement the plans (for instance, new recruiting and training programs), and use various
metrics to monitor the process.

• Strategy and Workforce Planning

Workforce planning should be an integral part of the firm’s strategic planning process. For example,
plans to enter new businesses, to build new plants, or to reduce activities will all influence the
personnel skills the employer needs and the positions to be filled. At the same time, decisions
regarding how to fill these positions will require other HR plans, such as training and recruiting plans.
Like any good plans, employment plans are built on forecasts—basic assumptions about the future.
Here, the manager will usually need three sets of employment forecasts: one for personnel needs
(demand), one for the supply of inside candidates, and one for the supply of outside candidates.

• Forecasting Personnel Needs (Labor Demand)

How many people with what skills will we need? Managers consider several factors.8 Most
importantly, a firm’s future staffing needs reflect demand for its products or services, adjusted for
changes in its turnover rate and productivity, and for changes the firm plans to make in its strategic
goals. Forecasting workforce demand therefore starts with estimating what the demand will be for
your products or services. Short term, management should be concerned with daily, weekly, and
seasonal forecasts. The basic tools for projecting personnel needs include trend analysis, ratio
analysis, and the scatter plot.
TREND ANALYSIS Trend analysis means studying variations in the firm’s employment levels over
the past few years. For example, compute the number of employees at the end of each of the last 5
years in each subgroup (like sales, production, secretarial, and administrative) to identify trends.
Trend analysis can provide an initial rough estimate of future staffing needs. However, employment
levels rarely depend just on the passage of time. Other factors (like productivity and retirements, for
instance), and changing skill needs will influence impending workforce needs.
RATIO ANALYSIS Another simple approach, ratio analysis, means making forecasts based on the
historical ratio between (1) some causal factor (like sales volume), and (2) the number of employees
required (such as number of salespeople). For example, suppose a salesperson traditionally generates
$500,000 in sales. If the sales revenue to salespeople ratio remains the same, you would require six
new salespeople next year (each of whom produces an extra $500,000) to produce a hoped-for extra
$3 million in sales. Like trend analysis, ratio analysis assumes that things like productivity remain
about the same. If sales productivity were to rise or fall, the ratio of sales to salespeople would
change.
THE SCATTER PLOT A scatter plot shows graphically how two variables—such as sales and
your firm’s staffing levels—are related. If they are, then if you can forecast the business activity (like
sales), you should also be able to estimate your personnel needs.

• Managerial Judgement
Few historical trends, ratios, or relationships will continue unchanged into the future. Judgment is
thus needed to adjust the forecast.

Objective 5.3 Internal Sources of Candidates

Recruiting typically brings to mind LinkedIn, employment agencies, and classified ads, but internal
sources—in other words, current employees or “hiring from within”—are often the best sources of
candidates. Filling open positions with inside candidates has advantages. There is really no substitute
for knowing a candidate’s strengths and weaknesses, as you should after working with them for some
time. Current employees may also be more committed to the company.
Morale and engagement may rise if employees see promotions as rewards for loyalty and
competence. And inside candidates should require less orientation and (perhaps) training than
outsiders.
There are other advantages. External hires tend to come in at higher salaries than do those promoted
internally, and some apparent “stars” hired from outside may still disappoint. On the other hand, some
firms—particularly those facing challenges, such as McDonald’s—have done very well by bringing
in outsiders.
One study concluded that firms that hired their CEOs from inside rather than outside performed
better.
 Hiring from within can also backfire. Inbreeding is a potential drawback, if new perspectives are
required. The process of posting openings and getting inside applicants can also be a waste of time,
when the department manager already knows whom he or she wants to hire. Rejected inside
applicants may become discontented; telling them why you rejected them and what remedial actions
they might take is crucial.
There are some practical rules to use in determining whether to go outside or promote from within.
For example, if you need specific skills that aren’t currently available in your company, or have to
embark on a tough turnaround, or your current succession planning or skills inventory systems are
inadequate, it may be best to look outside. On the other hand, if your company is thriving and you
have effective succession planning and skills inventories, have the skills you need internally, and
have a unique and strong company culture, then look within.

• Finding Internal Candidates

Job posting means publicizing the open job to employees (usually by literally posting it on
company intranets or bulletin boards). These postings list the job’s attributes, like qualifications,
supervisor, work schedule, and pay rate.

Ideally, the employer’s internal-recruitment system therefore matches the best inside candidate
with the job. In practice, this doesn’t always happen.

Rehiring someone who left your employ has pros and cons. Former employees are known
quantities (more or less) and are already familiar with how you do things. On the other hand,
employees who you let go may return with negative attitudes.49 Inquire (before rehiring) about
what they did during the layoff and how they feel about returning.

Objective 5.4 Employee Engagement Guide for Managers

• Promotion From Within

Many employers encourage internal recruiting, on the reasonable assumption that doing so improves
employee engagement.
Example:
A manager interested in fostering his or her employees’ engagement can draw several useful guidelines
from FedEx’s system: show a genuine interest in your employees’ career aspirations; provide career-
oriented appraisals; have a formal jobposting system; see that your employees have access to the training
they need; and balance your desire to keep good employees with the benefits of helping them learn of and
apply for other positions in your company.
Objective 5.5 Outside Sources of Candidates

• Informal Recruiting and the Hidden Job Market

Many job openings aren’t publicized at all; jobs are created and become available when employers
serendipitously encounter the right candidates.

• Recruiting via the Internet

Most employers post ads on their own Web sites, as well as on job boards such as Indeed.com, Monster,
and CareerBuilder.
Job hunters can search for jobs by key word, read job descriptions and salaries, save jobs to a list of
favorites, e-mail job links, search for jobs nearby, and often directly apply for the job.
Virtual (fully online) job fairs are another option. Here online visitors see a similar setup to a regular job
fair. They can listen to presentations, visit booths, leave résumés and business cards, participate in live
chats, and get contact information from recruiters and hiring managers.

PROS AND CONS

Online recruiting generates more responses quicker and for a longer time at less cost than just about any
other method. And, because they are more comprehensive in describing the jobs, Web-based ads have a
stronger effect on applicant attraction than do printed ads.62 But, online recruiting has two potential
problems.
First is bias. Older people and some minorities are less likely to be online, so such recruiting may
exclude some older applicants (and certain minorities).
The second problem is Internet overload: Employers end up deluged with résumes.

• Using Recruitment Software and Artificial Intelligence

Internet overload means that most employers use applicant tracking software to screen applications.
Applicant tracking systems (ATS) are online systems that help employers attract, gather, screen, compile,
and manage applicants.

ARTIFICIAL INTELLIGENCE SYSTEMS: Employers also use artificial intelligence–based systems to

improve recruitment.70 Here the main focus is on automating the résumé analysis. To paraphrase one
expert, why read through 10,000 résumés if a machine can instantaneously find the top 20?

• Advertising
 While Web-based recruiting is replacing traditional help wanted ads, print ads are still popular.
For example, the local newspaper is often a good source for local blue-collar help, clerical employees,
and lower-level administrative employees.

• Employment Agencies
There are three main types of employment agencies: (1) public agencies operated by federal, state, or
local governments; (2) agencies associated with nonprofit organizations; and (3) privately owned
agencies.
-PUBLIC AND NONPROFIT AGENCIES
Every state has a public, state-run employment service agency. Some employers have mixed experiences
with public agencies. For one thing, applicants for unemployment insurance are required to register and to
make themselves available for job interviews. Beyond just filling jobs, counselors will visit an employer’s
work site, review the employer’s job requirements, and even assist the employer in writing job
descriptions.

-PRIVATE AGENCIES
Private employment agencies are important sources of clerical, white-collar, and managerial personnel.
They charge fees (set by state law and posted in their offices) for each applicant they place. Most are “fee-
paid” jobs, in which the employer pays the fee.

• Recruitment Process Outsourcers

Recruitment process outsourcers (RPOs) are special vendors that handle all or most of an employer’s
recruiting needs. They usually sign short-term contracts with the employer, and receive a monthly fee
that varies with the amount of actual recruiting the employer needs done.

• On-Demand Recruiting Services

On-demand recruiting services (ODRS) are recruiters who are paid by the hour or project, instead of a
percentage fee, to support a specific project.

• Offshoring and Outsourcing Jobs

Rather than bringing people in to do the company’s jobs, outsourcing and offshoring send the jobs
out. Outsourcing means having outside vendors supply services (such as benefits management,
market research, or manufacturing) that the company’s own employees previously did in-house.
Offshoring means having outside vendors or employees abroad supply services that the company’s
own employees previously did in-house.
• Executive Recruiters
Executive recruiters (also known as headhunters) are special employment agencies employers retain
to seek out top-management talent for their clients. The percentage of your firm’s positions filled by
these services might be small. However, these jobs include key executive and technical positions. For
executive positions, headhunters may be your only source of candidates. The employer always pays
the fees.

• Referrals and Walk-Ins

Employee referral campaigns are a very important recruiting option. Here the employer posts
announcements of openings and requests for referrals on its Web site, bulletin boards, and/or
wallboards. It often offers prizes or cash awards for referrals that lead to hiring.
Referral’s big advantage is that it tends to generate “more applicants, more hires, and a higher yield
ratio (hires/applicants).”124 Current employees tend to provide accurate information about their
referrals because they’re putting their own reputations on the line.
WALK-INS Particularly for hourly workers, walk-ins—direct applications made at your office—are
a big source of applicants. Sometimes, posting a “Help Wanted” sign outside the door may be the
most cost-effective way of attracting good local applicants.

• College Recruiting
College recruiting—sending an employer’s representatives to college campuses to prescreen
applicants and create an applicant pool from the graduating class—is important. Recently, the entry-
level job market has been the strongest it’s been in years, and historically, almost 40% of such jobs
have gone to recent college graduates.
One problem is that such recruiting is expensive.
The campus recruiter has two main goals. One is to determine if a candidate is worthy of further
consideration. Traits to assess include communication skills, education, experience, and technical and
interpersonal skills. The other aim is to make the employer attractive to candidates.
INTERNSHIPS Internships can be win–win situations. For students, they can mean honing business
skills, learning more about potential employers, and discovering one’s career likes (and dislikes).
Employers can use the interns to make useful contributions while evaluating them as possible full-
time employees. A study found that about 60% of internships turned into job offers.

• Military Personnel
Returning and discharged military personnel provide an excellent source of trained and disciplined
recruits.
 Chapter 6
Employee Testing and Selection

Objective 6.1 Why Employee Selection Is Important?

After reviewing the applicants’ résumés, the manager turns to selecting the best candidate for the job.
This usually means using the screening tools we discuss in this and the following chapter: tests,
assessment centers, interviews, and background and reference checks.
Of course, a candidate might be “right” for a job, but wrong for the organization.4 For example, an
experienced airline pilot might excel at American Airlines but perhaps not at Southwest, where the
organizational values require that all employees help out, even with baggage handling. Therefore,
while person–job fit is usually the main consideration, person–organization fit is important too.
In any case, selecting the right person is crucial for several reasons:
First, employees with the right skills will perform better for you and the company. Those without
these skills or who are abrasive or obstructionist won’t perform effectively, and your own
performance and the firm’s will suffer.
Second, effective selection is important because it is costly to recruit and hire employees.
Third, inept hiring has legal consequences. Equal employment laws require nondiscriminatory
selection procedures. And negligent hiring means hiring employees with criminal records or other
problems who then use access to customers’ homes (or similar opportunities) to commit crimes. In
one case, an apartment manager entered a woman’s apartment and assaulted her. The court found the
apartment complex’s owner negligent for not checking the manager’s background.

Objective 6.3 Types of Tests

• Tests of Cognitive Abilities

Cognitive tests include tests of general reasoning ability (intelligence) and tests of specific mental
abilities like memory and inductive reasoning.
-INTELLIGENCE TESTS Intelligence (IQ) tests are tests of general intellectual abilities. They
measure not a single trait but rather a range of abilities, including memory, vocabulary, verbal
fluency, and numerical ability.
-SPECIFIC COGNITIVE ABILITIES There are also measures of specific mental abilities, such as
deductive reasoning, verbal comprehension, memory, and numerical ability. Psychologists often call
such tests aptitude tests, since they purport to measure aptitude for the job in question.

• Tests of Motor and Physical Abilities You might also want to measure motor abilities, such as
finger dexterity, manual dexterity, and (if hiring pilots) reaction time.
 Tests of physical abilities may also be required. These include static strength (such as lifting
weights), dynamic strength (pull-ups), body coordination (jumping rope), and stamina.

• Measuring Personality and Interests

A person’s cognitive and physical abilities alone seldom explain his or her job performance. As
one consultant put it, most people are hired based on qualifications, but are fired because of
attitude, motivation, and temperament.45 Personality tests measure basic aspects of an applicant’s
personality. Industrial psychologists often focus on the “big five” personality dimensions:
extraversion, emotional stability/neuroticism, agreeableness, conscientiousness, and openness to
experience.

Neuroticism represents a tendency to exhibit poor emotional adjustment and experience negative
effects, such as anxiety, insecurity, and hostility. Extraversion represents a tendency to be
sociable, assertive, active, and to experience positive effects, such as energy and zeal. Openness
to experience is the disposition to be imaginative, nonconforming, unconventional, and
autonomous. Agreeableness is the tendency to be trusting, compliant, caring, and gentle.
Conscientiousness is comprised of two related facets: achievement and dependability.

• Achievement Tests

Achievement tests measure what someone has learned. Most of the tests you take in school are
achievement tests. They measure your “job knowledge” in areas like economics, marketing, or
human resources. Achievement tests are also popular at work.

Objective 6.4 Work Samples and Simulations

With work samples, you present examinees with situations representative of the job for which
they’re applying, and evaluate their responses.80 Experts consider these (and simulations, like the
assessment centers we also discuss in this section) to be tests. But they differ from most tests
because they directly measure job performance.

❖ Using Work Sampling for Employee Selection

The work sampling technique tries to predict job performance by requiring job candidates to
perform one or more samples of the job’s tasks. For example, work samples for a cashier may
include counting money.
The basic procedure is to select a sample of several tasks crucial to performing the job, and then
to test applicants on them.83 An observer monitors performance on each task, and indicates on a
checklist how well the applicant performs.
❖ Situational Judgment Tests

Situational judgment tests are personnel tests “designed to assess an applicant’s judgment
regarding a situation encountered in the workplace.
❖ Management Assessment Centers

A management assessment center is a 2- to 3-day simulation in which 10 to 12 candidates

perform realistic management tasks (like making presentations) under the observation of experts
who appraise each candidate’s leadership potential.

Typical simulated tasks include:

● The in-basket. The candidate gets reports, memos, notes of incoming phone calls, e-mails, and
other materials collected in the actual or computerized in-basket of the simulated job he or she is
about to start. The candidate must take appropriate action on each item. Trained evaluators review
the candidate’s efforts.

● Leaderless group discussion. Trainers give a leaderless group a discussion question and tell
members to arrive at a group decision. They then evaluate each group member’s interpersonal
skills, acceptance by the group, leadership ability, and individual influence.

● Management games. Participants solve realistic problems as members of simulated companies

competing in a marketplace.

● Individual oral presentations. Here trainers evaluate each participant’s communication skills
and persuasiveness.

● Testing. These may include tests of personality, mental ability, interests, and achievements.

● The interview. Most require an interview with a trainer to assess interests, past performance,
and motivation.

❖ Situational Testing and Video-Based

Situational Testing Situational tests require examinees to respond to situations representative of the
job. Work sampling (discussed earlier) and some assessment center tasks (such as in-baskets) are
“situational,” as are miniature job training (described next) and the situational interviews we address
in Chapter 7. The video-based simulation presents the candidate with several online or computer
video situations, each followed by one or more multiple-choice questions

❖ The Miniature Job Training and Evaluation Approach

Miniature job training and evaluation involves training candidates to perform several of the job’s
tasks, and then evaluating their performance prior to hire. Like work sampling, miniature job training
and evaluation tests applicants with actual samples of the job, so it is inherently content relevant and
valid.
❖ Realistic Job Previews
Sometimes, a dose of realism makes the best screening tool. For example, when Walmart began
explicitly explaining and asking about work schedules and work preferences, turnover improved. In
general, applicants who receive realistic job previews are more likely to turn down job offers, but
their employers are more likely to have less turnover and be more resilient.

❖ Choosing a Selection Method

The employer should consider several things before choosing a particular selection tool (or tools).
These include the tool’s reliability and validity, its practicality (in terms of utility analysis), applicant
reactions, adverse impact, cost, and the tool’s selection ratio.

Objective 6.5 Background Investigations and Other Selection Methods

❖ Why Perform Background Investigations and Reference Checks?

Most employers check and verify the job applicant’s background information and references. 4
Some employers also do ongoing due diligence background checks for current employees.

There are two main reasons to check backgrounds—to verify the applicant’s information (name
and so forth) and to uncover damaging information.106 Lying on one’s application isn’t unusual.
A survey found that 23% of 7,000 executive résumés contained exaggerated or false information.

❖ Using Preemployment Information Services

It is easy to have employment screening services check out applicants.

Authorizing background reports while complying with these laws requires four steps, as follows:

Step 1: Disclosure and authorization. Before requesting reports, the employer must disclose to the
applicant or employee that a report will be requested and that the employee/applicant may receive
a copy. (Do this on the application form.)
Step 2: Certification. The employer must certify to the background checking firm that the
employer will comply with the federal and state legal requirements— for example, that the
employer obtained written consent from the employee/ applicant.
Step 3: Providing copies of reports. Under federal law, the employer must provide copies of the
report to the applicant or employee if adverse action (such as withdrawing a job offer) is
contemplated.
Step 4: Notice after adverse action. If the employer anticipates taking an adverse action, the
employee/applicant must get an adverse action notice. The employee/applicant then has various
remedies under the law.

❖ Steps for Making the Background Check More Valuable

 There are steps one can take to improve the usefulness of the background information being
sought. Specifically:

● Include on the application form a statement for applicants to sign explicitly authorizing a
background check, such as:

I hereby certify that the facts set forth in the above employment application are true and
complete to the best of my knowledge. I understand that falsified statements or misrepresentation
of information on this application or omission of any information sought may be cause for
dismissal, if employed, or may lead to refusal to make an offer and/or to withdrawal of an offer.
I also authorize investigation of credit, employment record, driving record, and, once a job offer
is made or during employment, workers’ compensation background if required.

● Phone references tend to produce more candid assessments.

● Persistence and attentiveness to possible red flags improve results. For example, if the former
employer hesitates or seems to qualify his or her answer, don’t go on to the next question.

● Compare the application to the résumé; people tend to be more creative on their résumés than
on their application forms, where they must certify the information.

● Try to ask open-ended questions.

● Ask the references supplied by the applicant to suggest other references. You might ask each of
the applicant’s references, “Could you give me the name of another person who might be familiar
with the applicant’s performance?”

● Aim for “360” reference checking: A full picture requires contacting the person’s former
supervisors, colleagues, and subordinates.

❖ The Polygraph and Honesty Testing

The polygraph is a device that measures physiological changes like increased perspiration. The
assumption is that such changes reflect changes in emotional state that accompany lying.

-WRITTEN HONESTY TESTS Paper-and-pencil (or computerized or online) honesty tests are
special types of personality tests designed to predict job applicants’ proneness to dishonesty and
other forms of counterproductivity.

-Graphology is the use of handwriting analysis to determine the writer’s personality

characteristics and moods, and even illnesses, such as depression.

-HUMAN LIE DETECTORS Some employers use so-called human lie detectors, experts who
may (or may not) be able to identify lying just by watching candidates.
❖ Physical Exams

Once the employer extends the person a job offer, a medical exam is often the next step in
selection (although it may also occur after the new employee starts work). There are several
reasons for preemployment medical exams: to verify that the applicant meets the job’s physical
requirements, to discover any medical limitations you should consider in placement, and to
establish a baseline for future workers’ compensation claims. Exams can also reduce absenteeism
and accidents and detect communicable diseases.

❖ Substance Abuse Screening

Most employers conduct drug screenings, and many applicants are flunking the tests.156 The
most common practice is to test candidates just before they’re formally hired. Many also test
current employees when there is reason to believe they’ve been using drugs—after a work
accident, or with obvious behavioral symptoms such as chronic lateness. Some firms routinely
administer drug tests on a random or periodic basis, while others require drug tests when they
transfer or promote employees to new positions.

❖ Drug Testing

Legal Issues Drug testing raises numerous legal issues. Employees may claim drug tests violate
their rights to privacy. Hair follicle testing is less intrusive than urinalysis but can actually
produce more personal information: A short hair segment could record months of drug use.