Part 1 book “Exploring management” has contents: Managers and the management process - everyone becomes a manager someday, management learning - great things grow from strong foundations, managers as decision makers - there is no substitute for a good decision, plans and planning techniques - get there faster with objectives,… and other contents.
www.downloadslide.net www.downloadslide.net www.downloadslide.net Now with: ORION, An Adaptive Experience WileyPLUS is a research-based, online environment for effective teaching and learning WileyPLUS builds students’ confidence because it takes the guesswork out of studying by providing students with a clear roadmap: • what to • how to it • if they did it right It offers interactive resources along with a complete digital textbook that help students learn more With WileyPLUS, students take more initiative so you’ll have greater impact on their achievement in the classroom and beyond Now available for For more information, visit www.wileyplus.com www.downloadslide.net Based on cognitive science, WileyPLUS with ORION provides students with a personal, adaptive learning experience so they can build their proficiency on topics and use their study time most effectively Unique to ORION, students BEGIN by taking a quick diagnostic for any chapter This will determine each student’s baseline proficiency on each topic in the chapter Students see their BEGIN individual diagnostic report to help them decide what to next with the help of ORION’s recommendations For each topic, students can either STUDY, or PRACTICE Study directs students to the specific topic they choose in WileyPLUS, where they can read from the e-textbook or use the variety of relevant resources available there Students can also practice, using questions and feedback powered by ORION’s adaptive learning engine Based on PRACTICE the results of their diagnostic and ongoing practice, ORION will present students with questions appropriate for their current level of understanding, and will continuously adapt to each student to help build proficiency ORION includes a number of reports and ongoing recommendations for students to help them MAINTAIN their proficiency over time for each topic MAINTAIN Students can easily access ORION from multiple places within WileyPLUS It does not require any additional registration, and there will not be any additional charge for students using this adaptive learning system ABOUT THE ADAPTIVE ENGINE ORION includes a powerful algorithm that feeds questions to students based on their responses to the diagnostic and to the practice questions Students who answer questions correctly at one difficulty level will soon be given questions at the next difficulty level If students start to answer some of those questions incorrectly, the system will present questions of lower difficulty The adaptive engine also takes into account other factors, such as reported confidence levels, time spent on each question, and changes in response options before submitting answers The questions used for the adaptive practice are numerous and are not found in the WileyPLUS assignment area This ensures that students will not be encountering questions in ORION that they may also encounter in their WileyPLUS assessments ORION also offers a number of reporting options available for instructors, so that instructors can easily monitor student usage and performance WileyPLUS with ORION helps students learn by learning about them.TM www.downloadslide.net {FOURTH EDITION Exploring Management John R Schermerhorn, Jr Ohio University with contributions from Susan Berston City College of San Francisco www.downloadslide.net VICE PRESIDENT & EXECUTIVE PUBLISHER EXECUTIVE EDITOR CONTENT EDITOR EDITORIAL ASSISTANT DIRECTOR OF MARKETING SENIOR MARKETING MANAGER MARKETING ASSISTANT DESIGN DIRECTOR COVER AND INTERIOR DESIGNER SENIOR CONTENT MANAGER SENIOR PRODUCTION EDITOR SENIOR PRODUCT DESIGNER EDITORIAL OPERATIONS MANAGER MEDIA SPECIALIST SENIOR PHOTO EDITOR PHOTO RESEARCHER COVER PHOTO EXPLORE YOURSELF PHOTO TIPS TO REMEMBER PHOTO MANAGER’S LIBRARY PHOTO STEPS FOR FUTHER LEARNING—BUILD PHOTO STEPS FOR FUTHER LEARNING—GET PHOTO STEPS FOR FUTHER LEARNING—DO PHOTO George Hoffman Lisé Johnson Jennifer Manias Jacqueline Hughes Amy Scholz Kelly Simmons Marissa Carroll Harry Nolan Thomas Nery Dorothy Sinclair Erin Ault Allison Morris Yana Mermel Elena Santa Maria Mary Ann Price Susan McLaughlin © FrankMay/dpa/Corbis © Greg Epperson/iStockphoto © Helder Almeida/iStockphoto © Nikki Bidgood/iStockphoto © Cubens 3d/Shutterstock © Stuart Miles/Shutterstock © Sergey Nivens/Shutterstock ® This book was typeset in 11/14 Kepler Std Regular at Aptara , Inc and printed and bound by Courier/Kendallville The cover was printed by Courier/Kendallville This book is printed on acid free paper ϱ Founded in 1807, John Wiley & Sons, Inc has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations Our company is built on a foundation of principles that include responsibility to the communities we serve and where we live and work In 2008, we launched a Corporate Citizenship Initiative, a global effort to address the environmental, social, economic, and ethical challenges we face in our business Among the issues we are addressing are carbon impact, paper specifications and procurement, ethical conduct within our business and among our vendors, and community and charitable support For more information, please visit our website: www.wiley com/go/citizenship Copyright © 2014, 2012, 2010, 2007 John Wiley & Sons, Inc All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, (201)748-6011, fax (201)748-6008, website http://www.wiley.com/ go/permissions Evaluation copies are provided to qualified academics and professionals for review purposes only, for use in their courses during the next academic year These copies are licensed and may not be sold or transferred to a third party Upon completion of the review period, please return the evaluation copy to Wiley Return instructions and a free of charge return shipping label are available at www.wiley.com/go/returnlabel If you have chosen to adopt this textbook for use in your course, please accept this book as your complimentary desk copy Outside of the United States, please contact your local representative ISBN 13 978-1-118-62019-9 Printed in the United States of America 10 www.downloadslide.net ■ I once again dedicate this book to the person who lovingly helps me explore and appreciate life’s wonders: My wife, Ann J.R.S www.downloadslide.net ■ About the Author DR JOHN R SCHERMERHORN JR is the Charles G O’Bleness Emeritus Professor of Management in the College of Business at Ohio University where he teaches undergraduate and MBA courses in management, organizational behavior, and Asian business He earned a PhD degree in organizational behavior from Northwestern University, after receiving an MBA degree (with distinction) in management and international business from New York University and a BS degree in business administration from the State University of New York at Buffalo Dr Schermerhorn’s teaching and writing bridges the gap between the theory and practice of management He has won awards for teaching excellence at Tulane University, The University of Vermont, and Ohio University, where he was named a University Professor, the university’s leading campus-wide award for undergraduate teaching He also received the excellence in leadership award for his service as Chair of the Management Education and Development Division of the Academy of Management Dr Schermerhorn brings a unique global dimension to his scholarship He holds an honorary doctorate from the University of Pécs in Hungary, awarded for his international scholarly contributions to management research and education He served as a Visiting Fulbright Professor at the University of Botswana, Visiting Professor of Management at the Chinese University of Hong Kong, on-site Coordinator of the Ohio University MBA and Executive MBA programs in Malaysia, and Kohei Miura Visiting Professor at the Chubu University of Japan Presently he is Adjunct Professor at the National University of Ireland at Galway, a member of the graduate faculty at Bangkok University in Thailand, and Permanent Lecturer in the PhD program at the University of Pécs in Hungary Educators and students alike know Dr Schermerhorn as author of Management 12e (Wiley, 2013) and senior co-author of Organizational Behavior 12e (Wiley, 2012) His many books are available in Chinese, Dutch, French, Indonesian, Portuguese, Russian, and Spanish language editions Dr Schermerhorn has also published numerous articles in publications such as the Academy of Management Journal, Academy of Management Review, Academy of Management Executive, Organizational Dynamics, Journal of Management Education, and the Journal of Management Development Dr Schermerhorn is a popular guest speaker His student and faculty workshop topics include tensions and innovations in business education, high engagement teaching and the millennial generation, global perspectives and student learning, and textbook writing and scholarly manuscript development vi www.downloadslide.net ■ Author’s Message { DEAR READER: Welcome to Exploring Management, Fourth Edition I hope you find it a useful and engaging learning resource for your management course You’ll quickly see that it is a bit different from traditional textbooks, hopefully in a positive way It has all the content you expect, but • The writing voice is “personal”—you are an important part of the conversation • The presentation is “chunked”—short reading sections are followed by study guides • The content is “live”—pages are full of examples, news items, situations, and suggestions that make management real I like to say that Exploring Management reflects how much I have learned from my students about what they value, where they want to go, and how they like to study and learn It’s also a reflection of my desire as an instructor and author to bring the real world into the management class, engage students in interesting discussions of timely topics, and offer meaningful assignments and projects that promote critical thinking In short, I want the study of management to add value to your life Take a minute to look at the book’s design and flip some pages to get a feel for my writing style and pedagogy Does it leave you inspired and enthusiastic about your management course? Does it cause you to think about how management affects your everyday living? Does it give you confidence that you can develop the skills needed for a successful career? And, does it help you understand how well-managed organizations can make a positive difference in society? Please join me in using Exploring Management, Fourth Edition, to help make your management course a great learning opportunity, one that offers lifelong benefits I believe you’ll find the experience rich with lasting personal and professional value Have a great course, and enjoy working with your instructor Sincerely Prof John R Schermerhorn, Jr Ohio University vii www.downloadslide.net ■ ||| Preface What makes Exploring Management different? Students tell me over and over again that they learn best when their courses and assignments fit well in the context of their everyday lives, career aspirations, and personal experiences I have written Exploring Management Fourth Edition, to meet and engage the new generation of students in their personal spaces It uses lots of examples, applications, visual highlights, and learning aids to convey the essentials of management It also asks students lots of thought-provoking questions as they read My hope is that this special approach and underlying pedagogy will help management educators find unique and innovative ways to enrich the learning experiences of their students ■ Exploring Management offers a flexible, topic-specific presentation The first thing you’ll notice is that Exploring Management presents “chunks” of material to be read and digested in short time periods This is a direct response to my classroom experiences where I, and my students, find typical book chapters cumbersome to handle Students never read more than several pages in Exploring Management before hitting a “Study Guide” that allows them to bring closure to what they have just read This chunked pedagogy motivates students to read and study assigned material before attending class And, it helps them perform better on tests and assignments Topics in the book are easily assignable and sized just right for a class session Although presented in the traditional planning, organizing, leading, and controlling framework, chapters can be used in any order based on instructor preferences Many options are available for courses of different types, lengths, and meeting schedules, including online and distance-learning formats It all depends on what fits best with course objectives, learning approaches, and instructional preferences ■ Exploring Management uses an integrated learning design Every chapter opens with a catchy subtitle and clear visual presentation that quickly draws students into the topic Th e opening Management Live vignette links chapter topics with popular culture examples from movies and television Key learning objectives are listed in Your Chapter Takeaways while What’s Inside highlights five interesting and useful chapter features—Explore Yourself, Role Models, Ethics Check, Facts to Consider, and Manager’s Library Each chapter section begins with a visual overview that poses a Takeaway Question followed by a list of Answers to Come These answers become the subheadings that organize section content The section ends with a Study Guide This one-page checkpoint asks students to pause, and check learning before moving on to the next section The Study Guide elements include— • • • • • Rapid Review—bullet-list summary of concepts and points Terms to Define—glossary quiz for vocabulary development Be Sure You Can—checkpoint of major learning outcomes for mastery Questions for Discussion—questions to stimulate inquiry and prompt class discussions Career Situation: What Would You Do?—asks students to apply section topics to a problem-solving situation ■ Exploring Management makes “flipping” the classroom easy “Flipped” classrooms shift the focus from instructors lecturing and students listening, to instructors guiding and students engaging The first step in doing the flip is getting students to read and study assigned materials before class When they come to class prepared, the instructor has many more options for engagement The chunked presentation, frequent Study Guides, and integrated learning design of Exploring Management help greatly in this regard Success in flipping the classroom requires a good short quiz and testing program to assure student learning Exploring Management is nicely integrated with the advanced WileyPLUS online environment (see p x) to make this easy And, the viii www.downloadslide.net 248 EXPLORING MANAGEMENT enis izgi/iStockphoto { ONLY 3% OF HRM EXECUTIVES GIVE “A” GRADES TO THEIR FIRMS’ PERFORMANCE MEASUREMENT SYSTEMS Facts to Consider ■ Human Resource Executives Worry About Performance Measurement A survey of human resource executives published in the Wall Street Journal reveals they aren’t pleased with the way managers in their organizations performance reviews Some are so concerned that they suggest dropping reviews altogether Among survey findings: • 30% of the HR executives believed that employees trust their employer’s performance measurement system • 40% rated their performance review systems as B, and only 3% rated them as A • Many were concerned that managers aren’t willing to face employees and give constructive feedback The critical-incident technique keeps a log of someone’s effective and ineffective job behaviors 360Њ feedback includes superiors, subordinates, peers, and even customers in the appraisal process A multiperson comparison compares one person’s performance with that of others • Many also complained that employees don’t have a clear enough understanding of what rates as good and bad performance YOUR THOUGHTS? Performance measurement is often a hot topic these days as things like “merit pay” and “performance accountability” are discussed in many job settings Based on your experience, what should be done about it? Is it really possible to have a performance measurement system that is respected by all? Can a performance review be accomplished in ways good for employers and workers alike? The critical-incident technique keeps an actual log of a person’s effective and ineffective job behaviors Using the case of the customer service representative again, a critical-incident log might include this positive example: “Took extraordinary care of a customer who had purchased a defective item from a company store in another city.” Or, it might include this negative example: “Acted rudely in dismissing the complaint of a customer who felt that we mistakenly advertised a sale item.” Not all performance reviews are completed only by one’s immediate boss or team leader In 360؇ feedback, superiors, subordinates, peers, and even internal and external customers are involved in the appraisal of a jobholder’s performance.36 New technologies even allow such feedback to be offered online in real time, rather than just periodically An example is Rypple, a Cloud-based program that allows users to post feedback questions in 140 characters or less One might ask, for example, “What did you think of my presentation?” or “How could I have run that meeting better?” Rypple compiles the anonymous responses and sends 360Њ-type feedback to the person posting the query.37 Some performance appraisals use multiperson comparisons to avoid tendencies to rate everyone “about the same.” Instead, reviewers are asked to rate and rank people relative to one another These multiperson comparisons can be done by rank-ordering people from top to bottom in order of performance achievement, with no ties allowed They can be done by paired comparisons that first evaluate each person against every other and then create a summary ranking based on the number of superior scores Or, they can be done by a forced distribution that places each person into a frequency distribution with fixed performance classifications—such as top 10%, next 40%, next 40%, and bottom 10% www.downloadslide.net Human Resource Management ||| ■ 249 Chapter 10 Retention and career development provide career paths It seems a no-brainer that employers are foolish after a successful recruitment campaign to neglect efforts to retain the best employees for as long as possible Yet many fail the test Sometimes it’s a problem with compensation and benefits But often it’s an issue of career development—the process of managing how a person grows and progresses from one point in a career to the next After initial entry, career paths can take off in many directions Lots of choices will have to be made about promotions, transfers, training, mentors, higher degrees, even alternative employment and eventual retirement Ideally, the employer and the individual work closely together in making these choices Procter & Gamble’s global human resources officer, Moheet Nagrath, says his company builds career tracks to match individual goals with company needs If someone wants to become a top manager someday, the company will plot career moves through jobs in various brands as well as domestic and international assignments “If you train people to work in different countries and businesses,” he says, “you develop a deep bench.”38 With more people now changing jobs frequently and working as independent contractors and freelancers, career development is becoming more and more a personal responsibility This means that we each have to be diligent in career planning, the process of systematically matching career goals and individual capabilities with opportunities for their fulfillment It involves regularly asking and answering such questions as “Who am I?” “What can I do?” “Where I want to go?” and “How I get there?” { Career development is the process of managing how a person grows and progresses in a career Career planning is the process of matching career goals and individual capabilities with opportunities for their fulfillment MANAGERS SHOULD BE THOROUGHLY PROFESSIONAL IN ALL ASPECTS OF HUMAN RESOURCE MANAGEMENT Explore Yourself ■ Professionalism Chances are that your school has a student branch of the Society for Human Resource Management It’s a great example of how professionalism plays a role in management When students work together on SHRM projects, they are not just learning HRM techniques and practices They are also learning to behave with internalized commitments to external standards All managers should show professionalism in their own areas of expertise and work responsibility And, of course, they should be thoroughly professional in all aspects of human resource management discussed in this chapter—from recruiting and selecting new hires, to training and developing them, to appraising performance, to handling issues like compensation and work-life balance Get to know yourself better by taking the self-assessment on Performance Appraisal Assumptions and completing the other activities in the Exploring Management Skill-Building Portfolio www.downloadslide.net 250 EXPLORING MANAGEMENT { Fast Future: How the Millennial Generation Is Shaping Our World by David Burstein Manager’s Library THE MOST GLOBALLY MINDED AND CONNECTED OF ALL? Members of the Millennial generation, known as Generation Y, have grown up in the midst of explosive technological growth, as well as global change and turmoil And, they hold attitudes about work and life that can be quite different from those of their parents The fascination with Millennials has many, including those who manage them, trying to understand just who these ambitious young people are and what matters most to them Millennials draw their fair share of criticism, living with labels like “spoiled,” “entitled,” and “impatient.” Yet, they are having quite an impact on business, technology, politics, and beyond They are also at the forefront of causes and issues ranging from climate crisis to education and poverty to immigration to marriage equality In his book, Fast Future: How the Millennial Generation is Shaping Our World (2013, Beacon Press), David Burstein—a Millennial thought leader and author—portrays his cohort through well-crafted eyes With the desire to accurately describe his generation, Burstein conducted extensive research and interviewed a broad range of Millennial peers His book paints a picture of a diverse, tech-savvy, and empowered generation of young people whose story needed to be told, as he says, “in our own words.” The book’s title, Fast Future, focuses attention on the environment in which Millennials have come of age—global awareness, constant connectedness, and many available media platforms in which to share their lives and personal stories Burstein believes Millennials not only understand the new “operating system” that governs the world in which they live, but they are also continuing to script it in new variations Despite facing one of the country’s worst recessions in history at the start of their careers, they seem quite able to seamlessly navigate the challenges faced Why? Burstein claims it’s because they know the rules and have the right tools In his words, Millennials like himself are “masters of and can operate in this fast-changing future world there are more things we can than things we cannot.” REFLECT AND REACT Does Burstein’s view of the Millennial generation seem accurate? What else could you add to his story line? Why are Millennials often judged and labeled a bit harshly by older generations? Some, perhaps many, Millennials reject the need to have a traditional career They seem more interested in creating, adapting, and moving in and out of different career options Does this apply to you? Some suggest that we should view a career as something to be rationally planned and pursued in a careful step-by-step fashion Others argue for flexibility, allowing a career to unfold along different pathways as we respond to unexpected opportunities But think about it A well-managed career will probably include elements of each A carefully thought-out career plan helps point you in a clear direction; an eye for opportunity helps fill in the details as you proceed along the way Are you ready? www.downloadslide.net Human Resource Management ■ Chapter 10 251 STUDY What Are the Essential Human GUIDE Resource Management Practices? Takeaway 10.2 Terms to Define Assessment center Behaviorally anchored rating scale (BARS) Career development Career planning Coaching Critical-incident technique Employee value proposition (EVP) Graphic rating scale Mentoring Multiperson comparison Rapid Review • Recruitment is the process of attracting qualified job candidates to fill vacant positions; realistic job previews try to provide candidates with accurate information on the job and organization • Assessment centers and work sampling that mimic real job situations are increasingly common selection techniques • Orientation is the process of formally introducing new employees to their jobs and socializing them to the culture and performance expectations • Training keeps workers’ skills up to date and job relevant; important training approaches include coaching and mentoring • Performance appraisal methods include graphic rating scales, behaviorally anchored rating scales, the critical-incidents technique, 360Њ feedback, and multiperson comparisons • Employee retention programs try to keep skilled workers in jobs and on career paths satisfying to them and beneficial to the employer Questions for Discussion Performance review Is it realistic to expect that you can get a realistic job preview during the interview process? If a new employer doesn’t formally assign someone to be your coach or mentor, what should you do? What are some of the possible downsides to receiving 360Њ feedback? Person-job fit Be Sure You Can Person-organization fit • • • • • • • Orientation Performance appraisal Realistic job preview Recruitment Reliability Reverse mentoring Selection Socialization 360Њ feedback Validity Work sampling list steps in the recruitment process explain realistic job previews illustrate reliability and validity in employment testing illustrate how an assessment center might work explain the importance of socialization and orientation describe coaching and mentoring as training approaches discuss strengths and weaknesses of alternative performance appraisal methods Career Situation: What Would You Do? After taking a new job as head of retail merchandising at a department store, you are disappointed to find that the salesclerks are evaluated on a graphic rating scale It uses a simple list of traits to gauge their performance You want to propose an alternative and better approach that will make performance reviews really valuable Your boss says: “Give me a plan.” Exactly what will you suggest in your proposal, and how will you present it to the salesclerks as well as the boss? www.downloadslide.net 252 EXPLORING MANAGEMENT Takeaway 10.3 What Are Current Issues in Human Resource Management? ANSWERS TO COME ■ ■ ■ ■ ■ Today’s lifestyles increase demands for flexibility and work-life balance Organizations use more independent contractors and part-time workers Compensation plans influence employee recruitment and retention Fringe benefits are an important part of employee compensation packages Labor relations and collective bargaining are closely governed by law “Hiring good people is tough,” starts an article in the Harvard Business Review The sentence finishes with “keeping them can be even tougher.”39 The point is that it isn’t enough to hire and train workers to meet an organization’s immediate needs They must also be successfully nurtured, supported, and retained When the Society for Human Resource Management surveyed employers, it learned that popular tools for maintaining a quality workforce included flexible work schedules and personal time off, as well as competitive salaries and good benefits—especially health insurance.40 ||| Work-life balance involves balancing career demands with personal and family needs Today’s lifestyles increase demands for flexibility and work-life balance E-mail from working dad to team members—“Folks, can I propose a slight change? I decided to work from home this morning so I could take my toddler to day care and help my wife with our newborn May I suggest a conference call? Dial-in information below.”41 Fast-paced and complicated lifestyles raise concerns about work-life balance You have or will soon encounter it as the balance—or lack of balance—between the demands of careers and personal and family needs.42 Not surprisingly, the “family-friendliness” of an employer is now frequently used as a screening criterion by job candidates It is also used in “best employer” rankings by magazines such as Business Week, Working Mother, and Fortune Work-life balance improves when we have flexibility in scheduling work hours, work locations, and even such things as vacations and personal time off This helps manage both personal needs and work responsibilities The results can be good for both the individual—greater job satisfaction, and the employer—less intention to leave.43 About four out of five employees say they would like the work-at-home or telecommuting option and consider it a “significant job perk.”44 But, employers also worry that too much flexibility disrupts schedules and causes a loss of important face-to-face work time.45 Marisa Mayer, Yahoo!’s CEO, was willing to face criticism when she decided to disallow telecommuting Her reasoning was that working from home detracted from Yahoo!’s collaborative culture and ability to innovate.46 Employers have many options for increasing job flexibility and work-life balance Some directly help workers handle family matters by providing such www.downloadslide.net Human Resource Management ■ Chapter 10 253 things as on-site day care and elder care Some have moved into innovative programs that include work sabbaticals—Schwab offers four weeks after five years’ employment; unlimited vacation days—Netflix lets workers take as many vacation days as they want; purchased vacation time—Xerox allows workers to buy vacation days using payroll deductions; and on-call doctors—Microsoft sends doctors to employees’ homes to keep them out of emergency rooms.47 The accounting firm KPMG goes so far as to keep a “wellness scorecard” on employees to see if they are missing vacations or working too hard If so, they are contacted by supervisors to discuss work patterns and ways to slow down.48 ||| Organizations are using more independent contractors and part-time workers Don’t be surprised if you are asked some day to work only “as needed,” as a “freelancer,” or as an independent contractor This means you are expected to work for an agreed-upon period or for an agreed-upon task, and without becoming part of the permanent workforce You may be paid well, but there’s no job security Another trend, and the source of most new jobs being created in the U.S economy, is the growing use of temporary and part-time workers We call them contingency workers because they supplement the full-time workforce by Julie Jacobson/AP { Independent contractors are hired on temporary contracts and are not part of the organization’s permanent workforce Contingency workers work as needed and part-time, often on a longer-term basis AFTER THE FIFTH TIME OF LENGTHY DELAYS AT LOS ANGELES INTERNATIONAL AIRPORT, GOLDBERG HAD AN “AHA MOMENT.” Role Models ■ Family Values Lead CEO Dave Goldberg to Survey Monkey If you’ve ever created or taken an online survey using Survey Monkey, you know how good it feels to say goodbye to paper questionnaires and the accompanying task of tallying and making sense of results All of the Fortune 100 companies agree—they’re users too Dave Goldberg, CEO of Survey Monkey, has grown the Web survey solutions and analytics provider to over 12 million registered users worldwide He and his wife, Sheryl Sandberg, Chief Operating Officer of Facebook, are a well-known power couple with two young children Already a successful entrepreneur and venture capitalist, Goldberg had family in mind when he decided to join Survey Monkey, founded by Ryan Finley In an article entitled “Hard Choices,” he tells Business Week that when his wife joined Facebook and knowing her job would require some travel, he decided to pass up a number of other opportunities and go with Survey Monkey He wanted at least one parent to be at home with the children every night For a while Goldberg commuted from Los Angeles to Silicon Valley But after the fifth time of lengthy delays at Los Angeles International Airport, he had an “aha moment.” More was needed to balance his work-life equation Goldberg moved Survey Monkey from Portland, Oregon to Silicon Valley, giving him greater flexibility and more time with family Matching career demands with personal and family needs is what work-life balance is all about—and specifically what Goldberg and wife Sheryl Sandberg work hard to accomplish For her part, Sandberg set off quite a stir in the tech world when she admitted to an interviewer that she leaves work daily at 5:30 p.m to be home for dinner with her family “I did that when I was at Google, I did that here, and I would say it’s not until the last year, two years that I’m brave enough to talk about it publicly,” she says WHAT’S THE LESSON HERE? Employers have become increasingly aware that “balance” is important to today’s employees Goldberg and Sandberg have found ways to balance things as senior executives But, what can a regular worker and dual-career couple do? Is asking for flexibility and respect for family life something to hide or be ashamed of in today’s competitive work environment? What will your priorities be when it comes to the worklife balancing act? www.downloadslide.net 254 EXPLORING MANAGEMENT working as-needed and part-time, often on a long-term basis Their increasing presence in the workforce leads some to say a “permanent temp economy” is the new reality for job hunters.49 And, employers tend to like it because contingency workers are easy to hire and fire to control costs and respond to cyclical demand.50 BusinessWeek sums the employer’s advantage in hiring part-timers this way: “easy to lay off, no severance; no company funded retirement plan; pay own health insurance; get zero sick days and no vacation.”51 Things can be a lot less rosy for the part-timers They may be paid less than full-timers, experience stress due to their temporary job status, and lack access to benefits such as health insurance, pension plans, and paid vacations Gerry Grabowski of Pittsburgh knows the downside and the upside firsthand But with initiative he turned a temporary job in real estate into a full-time one Says Grabowski: “A lot of people say it’s a raw deal, and I guess it can be But if I were an entrepreneur, I would never a straight hire I would use a contractor or temp first.”52 ||| Pay! It may be that no other work issue receives as much attention And, the trend in compensation today is largely toward “pay-for-performance.”53 Pay increases for those on a merit pay system are based on some assessment of actual performance A high merit raise sends a positive signal to high performers, whereas a low one sends a negative signal to poor performers The notion is that this encourages both to work hard in the future Although the pay-for-performance logic makes sense, merit systems are not problem free In many ways they are only as good as the methods used to measure Jacopo Raule/Getty Images Merit pay awards pay increases in proportion to performance contributions Compensation plans influence employee recruitment and retention { $96.1 MILLION FOR ONE YEARS WORK! CEOs EARN 354 TIMES MORE THAN THE AVERAGE WORKER Ethics Check ■ CEO Gets $96.1 Million Pay Package That’s $96.1 million for one year’s work by the way! The person behind the paycheck is Oracle CEO Larry Ellison Is something wrong here? Or, is this a motivator to make your career plan a real success story? Richard Trumka, president of the AFL-CIO, thinks CEO pay is way out of whack His organization is the largest federation of trade unions in the United States, 56 unions in all, and it’s a voice for workers Trumpka says: “They struggle every day to make ends meet, their wages are stagnant, their companies are trying to take away their health care and pensions, and they’re angry.” Little wonder that he and his organization are critical of big executive paychecks The AFL-CIO reports that while CEOs of the largest firms took in an average of $12.3 million in 2012, the average worker in their firms earned just $34,645 In simple math, the CEOs outearned the workers by 354 times That’s a bit less than the 525 times reported in 2000, but a lot more than the 42 times in 1980 By comparison, Trumpka’s pay as president of AFL-CIO was 8.7 times the average worker’s pay, a total of $302,000 YOU DECIDE Can you justify the super pay earned by CEOs like Larry Ellison? Is it right that CEO pay is so much higher in proportion to that earned by workers in general? Trumka has asked for regulations to enforce a Wall Street reform rule that requires companies listed on stock exchanges to reveal CEO versus worker pay comparisons Do you support his position? Should caps be put in place on CEO pay? Or, is CEO pay better left to market forces and kept outside regulatory oversight? www.downloadslide.net Human Resource Management ■ 255 Chapter 10 performance And this is a problem A survey reported by the Wall Street Journal found that only 23% of employees believed they understood their companies’ systems.54 Typical questions are: Who assesses performance? Suppose the employee doesn’t agree with the assessment? Is the system fair and equitable to everyone involved? Is there enough money available to make the merit increases meaningful for those who receive them? 401(K) HEALTH When Brian Bader attended an orientation for his new tech-support job at Apple, he and others were SHARING PAY FOR OPTIONS told not to discuss their pay with co-workers With curiosity aroused, he learned from break time chats that CASH VISION most everyone was getting between $10 and 12 an FLEXIBLE BENEFITS SHARING INSURANCE hour His $12 pay compared well But just three months FITNESS CENTER MEMBERSHIP later he quit after getting a pay raise Even though DISABILITY his performance was rated twice that of the lowest PAY INSURANCE INSURANCE performer, the raise was just 20% higher “It irked me,” STOCK he said, “why am I not seeing double the pay?”55 While some employers struggle with merit pay plans, others use them well If you are one of the high-performing employees that Applebee’s managers want to retain, you might be on the receiving end of “Applebucks”— small cash awards that are given to reward performance and raise loyalty to the firm.56 This is an example of bonus pay—one-time or lump-sum payments to emBonus pay plans provide one-time payments based on ployees based on the accomplishment of specific performance targets or some other performance accomplishments extraordinary contribution, such as an idea for a work improvement Perhaps you will someday receive a letter like one sent to two top executives by Amazon.com’s chairman Jeff Bezos “In recognition and appreciation of your contributions,” his letter read, “Amazon.com will pay you a special bonus in the amount of $1,000,000.”57 In contrast to giving outright bonuses, profit sharing distributes to employees Profit sharing distributes to employees a proportion of net a proportion of net profits earned by the organization in a performance period profits earned by the Gain sharing extends the profit-sharing concept by allowing groups of employorganization ees to share in any savings or “gains” realized when their efforts result in measurGain sharing allows employees able cost reductions or productivity increases.58 to share in cost savings or Yet another merit pay approach is to grant employees stock options linked to productivity gains realized by their efforts their performance.59 Stock options give them the right to buy shares of stock at a future date at a fixed price Employees holding options gain financially when the Stock options give the right to purchase shares at a fixed price stock price rises above the original option price; they lose when it moves lower in the future Some companies “restrict” the stock options so that they come due only after designated periods of employment This practice is meant to tie high performers to the employer and is often called the golden handcuff PLANS GAIN INSURANCE STOCK PERFORMANCE PROFIT BONUSES DENTAL MERIT EMPLOYEE ||| OWNERSHIP Fringe benefits are an important part of employee compensation packages Benefits! They rank right up there with pay as a way of helping to attract and retain workers How many times does a graduating college student hear, “Be sure to get a job with benefits!”?60 An employee’s fringe benefits include nonmonetary forms of compensation such as health insurance and retirement plans And, they can be a hot button in conversations about work today Benefits, especially medical insurance and retirement, can add as much as 20% or more to a typical worker’s earnings, but the cost to employers can increase faster than the cost of wages and salaries Fringe benefits are nonmonetary forms of compensation such as health insurance and retirement plans www.downloadslide.net 256 EXPLORING MANAGEMENT Zumba at work? More Employers and Employees Dance to the Tune of Wellness Benefits Want to take a work break? Try employer-sponsored Zumba True NBC NewsWire/Getty Images enough More and more employers are focusing their benefits contributions on things that can help the bottom line, and employee wellness is one of them That’s why employees at Dallas/Forth Worth International Airport get their Zumba class as a perk Other benefits include “lunch and learn” seminars on healthy eating and handling chronic diseases As just one measure of success, the airport notes that the number of sick days fell by 47% in a year Employer surveys also show increasing use of work-at-home policies, lactation rooms, legal counseling, and paid or subsidized off-site fitness Family-friendly benefits help employees achieve better work-life balance Flexible benefits programs allow choice to personalize benefits within a set dollar allowance Employee assistance programs help employees cope with personal stresses and problems A labor union is an organization that deals with employers on the workers’ collective behalf Fringe benefits costs are a major worry for employers Many are attempting to gain control over health care expenses by shifting more of the insurance costs to the employee and by restricting options in choosing health care providers Many are offering wellness programs and encouraging healthy lifestyles as a way of decreasing health insurance claims As pointed out earlier, many are also hiring part-timers to minimize benefit costs or avoid them altogether A variety of family-friendly benefits are designed to help employees with work-life balance These include child care, elder care, flexible schedules, and parental leave among others Also popular are flexible benefits that give employees budgets to choose a set of benefits that best meet their needs There are also employee assistance programs that help with troublesome personal problems, such as dealing with stress, counseling on alcohol and substance abuse, domestic violence and sexual abuse, and family and marital difficulties ||| Labor relations and collective bargaining are closely governed by law Labor unions are organizations to which workers belong and that deal with employers on the workers’ behalf They act as a collective “voice” for their members, one that wouldn’t be available to them as individuals Historically, this voice of the unions has played an important role in American society And even though unions are often associated with wage and benefit concerns, workers also join unions because of things like poor relationships with supervisors, favoritism or lack of respect by supervisors, little or no influence with employers, and failure of employers to provide a mechanism for grievance and dispute resolution.61 The average percentage of workers in the United States who belong to unions has been on the decline Figures show that 11.3% of workers overall now belong to unions versus 14.9% in 1996 The percentage of public-sector workers who belong to unions— teachers, police, firefighters, and local government employees—now stands at 35.6% of workers versus 6% in the private sector.62 What you think? Does the decline in private-sector union membership mean that workers have pretty much decided they www.downloadslide.net Human Resource Management ■ don’t need union representation anymore? Just what explains the downword trend? And, why is union membership increasing in the public sector? Unions negotiate legal contracts affecting many aspects of the employment relationship for their members These labor contracts typically specify the rights and obligations of employees and management with respect to wages, work hours, work rules, seniority, hiring, grievances, and other conditions of work The front line in labor-management relationship is collective bargaining, the process that brings management and union representatives together in negotiating, administering, and interpreting labor contracts During a collective bargaining session, these parties exchange a variety of demands, proposals, and counterproposals Several rounds of bargaining may take place before a contract is reached or a dispute resolved Sometimes the process breaks down, and one or both parties walk away The impasse can be short or lengthy, in some cases leading to labor actions that can last months and even years before agreements are reached One of the areas where unions and employers can find themselves on different sides of the bargaining issue relates to so-called two-tier wage systems These are systems that pay new hires less than more senior workers already doing the same jobs Agreeing to a two-tier system in collective bargaining isn’t likely to be the preference of union negotiators At a Goodyear factory in Alabama where a twotiered system is in place, one of the high-seniority workers says: “If I was doing the same job, working just as hard and earning what they make, I’d be resentful.”63 But, the management side offers a counter argument Getting a two-tier agreement in the labor contract can help keep the firm profitable and retain jobs in America that would otherwise be lost to foreign outsourcing Such agreements are now in place at all the big U.S automakers.64 When labor-management relations take on the adversarial character shown in Figure 10.2, the conflict can be prolonged and costly for both sides That’s not good for anyone, and there is quite a bit of pressure these days for more cooperative unionmanagement relationships Wouldn’t it be nice if unions and management would work together in partnership, trying to address the concerns of both parties in ways that best meet the great challenges and competitive pressures of a global economy? What unions can to make things difficult for management Picket—post and carry signs ‚ complaining about the employer s treatment of workers A labor contract is a formal agreement between a union and an employer about the terms of work for union members Collective bargaining is the process of negotiating, administering, and interpreting a labor contract Two-tier wage systems pay new hires less than workers already doing the same jobs with more seniority What managers can to make things difficult for unions Lockout—refuse to let employees come to work Strike—refuse to come to work ‚ Boycott—refuse to buy employer s products or services and ask others to the same 257 Chapter 10 UNIONS UNIONS AND AND MANAGEMENT MANAGEMENT AS AS ADVERSARIES ADVERSARIES Strike-breakers—hire nonunion workers, called “scabs,” to ‚ strikers jobs Injunction—get a court order requiring that strikers come back to work FIGURE 10.2 What Happens When Labor–Management Relations Become Adversarial? When union and management representatives meet in collective bargaining, it would be nice if things were always cooperative Unfortunately, they sometimes turn adversarial, and each side has weapons at its disposal to make things hard for the other Unions can resort to strikes, boycotts, and picketing Management can use lockouts, strike-breakers, and court injunctions to force strikers back to work Although each side can find justifications in defense of using such tactics, they can also come with high price tags in terms of lost worker earnings and company profits www.downloadslide.net 258 EXPLORING MANAGEMENT STUDY What Are Current Issues in Human GUIDE Resource Management? Takeaway 10.3 Terms to Define Rapid Review Family-friendly benefits • Complex job demands and family responsibilities have made work-life balance programs increasingly important in human resource management • Compensation and benefits packages must be attractive so that an organization stays competitive in labor markets • Labor unions are organizations to which workers belong and that deal with employers on the employees’ behalf • Collective bargaining is the process of negotiating, administering, and interpreting a labor contract • Labor relations and collective bargaining are closely governed by law and can be cooperative or adversarial in nature Fringe benefits Questions for Discussion Gain sharing Are we giving too much attention these days to issues of work-life balance? Can a good argument be made that merit pay just doesn’t work? Given economic trends, is it likely that unions will gain in future popularity? Bonus pay Collective bargaining Contingency workers Employee assistance program Flexible benefits Independent contractors Labor contract Labor union Merit pay Profit sharing Stock options Two-tier wage systems Work-life balance Be Sure You Can • define work-life balance and discuss its significance for the human resource management process • explain why compensation and benefits are important in human resource management • differentiate bonuses and profit sharing as forms of performance-based pay • define the terms “labor union,” “labor contract,” and “collective bargaining” • compare the adversarial and cooperative approaches to labor-management relations Career Situations: What Would You Do? You have become aware of a drive to organize the faculty of your institution and have them represented by a union The student leaders on campus are holding a forum to gather opinions on the pros and cons of a unionized faculty Because you represent a student organization in your college, you are asked to participate in the forum What will you say, and why? www.downloadslide.net PTER 10 CHA Human Resource Management TP ■ Chapter 10 259 TestPrep 10 Answers to TestPrep questions can be found at the back of the book Multiple-Choice Questions Human resource management is the process of , developing, and maintaining a high-quality workforce (a) attracting (b) compensating (c) appraising (d) selecting A is a criterion that organizations can legally justify for use in screening job candidates (a) job description (b) bona fide occupational qualification (c) realistic job preview (d) BARS programs are designed to ensure equal employment opportunities for groups historically underrepresented in the workforce (a) Realistic recruiting (b) Mentoring (c) Affirmative action (d) Coaching Which of the following questions can an interviewer legally ask a job candidate during a telephone interview? (a) Are you pregnant or planning to soon start a family? (b) What skills you have that would help you this job really well? (c) Will you be able to work at least ten years before hitting the retirement age? (d) Do you get financial support from a spouse or companion who is also a wage earner? An employment test that yields different results over time when taken by the same person lacks (a) validity (b) reliability (c) realism (d) behavioral anchors Which phrase is most consistent with a recruiter offering a job candidate a realistic job preview? (a) “There are just no downsides to this job.” (b) “No organization is as good as this one.” (c) “I can’t think of any negatives.” (d) “Here’s something you might not like about the job.” Socialization of newcomers occurs during the step of the staffing process (a) orientation (b) recruiting (c) selection (d) advertising The assessment center approach to employee selection uses on to evaluate a candidate’s job skills (a) intelligence tests (b) simulations and experiential exercises (c) 360Њ feedback (d) formal one-on-one interviews The selection technique known as asks a job candidate to actually perform on the job for a period of time while being observed by a recruiter (a) mentoring (b) work sampling (c) job coaching (d) critical incident testing www.downloadslide.net 260 EXPLORING MANAGEMENT 10 The purpose of performance review is being addressed when a manager describes training options that might help an employee improve future performance (a) development (b) evaluation (c) judgmental (d) legal 11 When a team leader must rate 10% of team members as “superior,” 80% as “good,” and 10% as “unacceptable,” this is an example of the approach to performance appraisal (a) graphic (b) critical-incident (c) behaviorally anchored rating scale (d) forced distribution 12 What is one of the reasons why employers are hiring more part-time or contingency workers? (a) It’s hard to get people to work full-time anymore (b) Part-timers are known to work much harder than full-timers (c) Full-time employees don’t have up-to-date job skills (d) It’s easy to hire part-timers when you need them and let them go when you don’t 13 Whereas bonus plans pay employees for special accomplishments, gain-sharing plans reward them for (a) helping to recruit new workers (b) regular attendance (c) positive work attitudes (d) cost reductions that have been achieved 14 An employee with family problems that are starting to interfere with work would be pleased to learn that his employer had a(n) plan (a) employee assistance (b) flexible benefits (c) comparable worth (d) stock options 15 When representatives of management and a labor union meet and negotiate the terms of a new labor contract, this process is known as (a) boycotting (b) collective bargaining (c) 360Њ feedback (d) profit sharing Short-Response Questions 16 Why is orientation important in the HRM process? 17 How does mentoring work as an on-the-job training approach? 18 When is an employment test or a performance appraisal method reliable? 19 How the graphic rating scale and the BARS differ as performance appraisal methods? Integration and Application Question 20 Sy Smith is not doing well in his job The problems began to appear shortly after Sy’s job changed from a manual to a computer-based operation He has tried hard but is just not doing well in learning how to use the computer to meet performance expectations He is 45 years old and has been with the company for 18 years Sy has been a great worker in the past and is both popular and influential among his peers Along with his performance problems, you have also noticed that Sy is starting to sometimes “badmouth” the firm Questions: As Sy’s manager, what options would you consider in terms of dealing with the issue of his retention in the job and in the company? What could you by way of career development for Sy, and why? www.downloadslide.net Human Resource Management ■ 261 Chapter 10 Stepsfor FurtherLearning C H A P T E R BUILD MARKETABLE SKILLS DO A CASE ANALYSIS GET AND STAY INFORMED Take advantage of Cases for Critical Thinking ■ CHAPTER 10 CASE SNAPSHOT: Silicon Valley’s “Chief Executive Mom” / Sidebar on New Workplace Perks BUILD MARKETABLE SKILLS EARN BIG CAREER PAYOFFS! Don’t miss these opportunities in the Skill-Building Portfolio ■ SELF-ASSESSMENT 10: Performance Review Assumptions Test your judgment when assessing others make the best of performance management ■ CLASS EXERCISE 10: Upward Appraisal Sometimes feedback has to flow up with practice, you can get better at it ■ TEAM PROJECT 10: The Future of Labor Unions Union membership is on the decline does this mean all is well in the workplace? Many learning resources are found at the end of the book and online within WileyPLUS Before becoming CEO of Yahoo!, Marissa Mayer was best known for her senior role at Google, where she spent 13 years She was Google’s 20th employee and the company’s first female engineer Her move to Yahoo! had a compensation package valued at over $100 million over five years The company had struggled through a series of CEOs, and she came in with high expectations But, she wasn’t only challenged to turn around the one-time Internet sweetheart; she also became a new mom Considered by industry observers as a last-chance savior for Yahoo! Mayer’s early moves as CEO were closely watched And, her status as a new mother created some fairly interesting buzz as well DO A CASE ANALYSIS STRENGTHEN YOUR CRITICAL THINKING! Dig into this Hot Topic ■ GOOD IDEA OR NOT? Teammates may know you best Should they pay you as well? Tradition is that managers or team leaders make final pay raise decisions But times may be changing in our crowdsourcing world GET Picture this Fifteen members of a work team log into to an online exchange run by their employer Their AND STAY INFORMED task is to distribute a pool of 1200 stock options as anMAKE YOURSELF nual bonuses to their teammates The only rule is that VALUABLE! they can’t give any to themselves Each person’s final bonus options are the sum of what other team members give them When the exchange closes each individual gets notified of their bonus awards and the distribution of bonuses awarded in the team—no names attached The example is real It’s from a San Francisco start-up called Coffee & Power The pay practice was initiated by entrepreneur and co-founder Philip Rosedale The idea is that because teammates know one another best, they also know who deserves to be recognized at bonus time Those in favor of the practice might say that by giving the bonus decisions to the team, it empowers members who get to invest in and reward one another for performance and contributions One Coffee & Power employee says the approach “lets me reward people that management may not always recognize.” Those against the practice might say it’s a bit like having students give each other grades on a team project There’s too much room for results to be manipulated according to friendships and perceived “need.” Too often, performance falls by the wayside as an award criterion Final Faceoff You’ve surely done peer evaluations in teams and perhaps even assigned grades to team members What’s your take on the Coffee & Power approach to bonuses? Does this use of technology really dig down to the level of truly rewarding individual contributions to team performance? Or, is it a practice that might open up more problems than it’s worth? www.downloadslide.net “I have a dream,” said Martin Luther King, Jr., and his voice has traveled from the steps of the Lincoln Memorial in Washington, D.C., on August 28, 1963, across generations Like other visionary leaders, he communicated shared dreams and inspired others to pursue lofty goals Flip Schulke/Corbis ... them 11 5 Planning improves focus and action orientation 11 6 Planning improves coordination and control 11 7 Planning improves time management 11 7 5.2 What Types of Plans Do Managers Use? 12 0 •... Ambiguity 10 Performance Review Assumptions 11 Least Preferred Co-Worker Scale 12 Stress Test 13 Two-Factor Profile 14 Team Leader Skills 15 Feedback and Assertiveness 16 Diversity Awareness 17 Global... Walk 10 The Future of Labor Unions 11 Leadership Believe-It-or-Not 12 Difficult Personalities 13 CEO Pay 14 Superstars on the Team 15 How Words Count 16 Job Satisfaction Around the World 17 Globalization