fundamentals ofHuman Resource Management 4th editionby R.A. .docx

fundamentals of
Human Resource Management 4th edition
by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright
CHAPTER 2
Trends in Human Resource Management
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All
Rights Reserved.
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This chapter describes major trends that are affecting human
resource management.
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What Do I Need to Know?
Describe trends in the labor force composition and how they
affect human resource management.
Summarize areas in which human resource management can
support the goal of creating a high-performance work system.
Define employee empowerment and explain its role in the
modern organization.
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After reading and discussing this chapter, you should be able to:
2
What Do I Need to Know? (continued)
Identify ways HR professionals can support organizational

strategies for quality, growth, and efficiency.
Summarize ways in which HRM can support organizations
expanding internationally.
Discuss how technological developments are affecting human
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3
Explain how the nature of the employment relationship is
changing.
Discuss how the need for flexibility affects human resource
management.
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More than ever, organizations today must be able to respond
creatively to uncertainty and change.
4
The Labor Force
Internal Labor Force
An organization’s workers
Its employees
The people who have contracts to work at the organization
The internal labor force has been drawn from the external labor
market.
External Labor Market
Individuals who are actively seeking employment.

The number and kinds of people in the external labor market
determine the kinds of human resources available to an
organization.
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The term labor force is the general way to refer to all the people
willing and able to work.
For an organization, the labor force consists of;
Internal Labor Force
External Labor Market
HR professionals need to be aware of trends in the composition
of the external labor market because these trends affect the
organization’s options for creating a well-skilled, motivated
internal labor force.
5
Change in the Labor Force
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Human resource professionals need to be aware of trends in the
composition of the external labor market, because these trends
affect the organization’s options for creating a well-skilled,
motivated internal labor force.
The key trends are:
An aging workforce
A diverse workforce
Skill deficiencies of the workforce
6
An Aging Workforce

A Diverse Workforce
Skill Deficiencies of the Workforce
Figure 2.1: Age Distribution of U.S Labor Force, 2008 and
2018
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The Bureau of Labor Statistics (BLS) has projected that from
2008 to 2018, the total U.S. civilian labor force will grow from
154 million to 167 million workers.
Figure 2.1 highlights the changes to the labor force
Some of the expected change involves the distribution of
workers by age.
From 2008 to 2018, the fastest-growing age group is expected to
be workers 55 and older.
The 25- to 44-year-old group will increase its numbers slightly,
so its share of the total workforce will fall.
And young workers between the ages of 16 and 24 will actually
be fewer in number.
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HRM Implications of the Aging Workforce

HR professionals will spend much of their time on concerns
related to retirement planning, retraining older workers, and
motivating workers whose careers have reached a plateau.
Organizations will struggle with ways to control the rising costs
of health care and other benefits.
Many of tomorrow’s managers will supervise employees much
older than themselves.
Organizations will have to find ways to attract, retain, and
prepare the youth labor force.
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There are several practical implications of the aging workforce.
HR professionals will spend much of their time on concerns
related to retirement planning, retraining older workers, and
motivating workers whose careers have reached a plateau.
Organizations will struggle with ways to control the rising costs
of health care and other benefits.
Many of tomorrow’s managers will supervise employees much
older than themselves.
Organizations will have to find ways to attract, retain, and
prepare the youth labor force.
8
As more and more of the workforce reaches retirement age,
some companies have set up mentoring programs between older
and younger workers so that knowledge is not lost but passed
on.
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Ask the students: “How does the company benefit from these
mentoring programs?”
9
Figure 2.2: Projected Racial/Ethnic Makeup of the U.S.
Workforce, 2018
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Another kind of change affecting the U.S. labor force is that it
is growing more diverse in racial, ethnic, and gender terms.
As Figure 2.2 shows, the 2018 workforce is expected to be 79
percent white, 12 percent black, and 9 percent Asian and other
groups.
The fastest growing category is expected to be Asian and “other
groups” because of immigration and birthrates above the
national average.
In addition to these racial categories, the ethnic category of
Hispanics is growing equally fast, and the Hispanic share of the
U.S. labor force is expected to reach 18 percent of the total in
2018.
More women are in the paid labor force than in the past, and the
labor force participation rate for men has been slowly declining.
By 2018, the share of women in the labor force is expected to
reach about 47 percent.
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Figure 2.3: HRM Practices That Support Diversity Management
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Throughout the text and subsequent presentations, the authors
will show how diversity affects HRM practices.
For example, from a staffing perspective, it is important to
ensure that tests used to select employees are not unfairly
biased against minority groups.
From the perspective of work design, employees need flexible
schedules that allow them to meet non-work needs.
In terms of training, it is clear that employees must be made
aware of the damage that stereotypes can do.
With regard to compensation, organizations are providing
benefits such as elder care and day care as a way to
accommodate the needs of a diverse workforce.
Successfully managing diversity is also critical for companies
that compete in international markets.
11
Skill Deficiencies in Workforce
A = True B = False
Use of computers to do routine tasks has changed the kinds of
skills needed by employees.
A college degree is not as important as it once was.
U.S. production jobs require intelligence and skills as much as
strength.
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Use of computers to do routine tasks has changed the kinds of
skills needed by employees.
True - The increasing use of computers to do routine tasks has
shifted the kinds of skills needed for employees in the U.S.
economy.
A college degree is not as important as it once was.
False - Most organizations are looking for educational
achievements and a college degree is a basic requirement for

many jobs today.
U.S. production jobs require intelligence and skills as much as
strength.
True, workers often must operate sophisticated computer-
controlled machinery, monitor quality levels, and work as part
of a team requiring emotional intelligence, as well.
In general, employees must be able to handle a variety of
responsibilities, interact with customers, and think creatively.
The gap between skills needed and skills available has:
Decreased ability to compete because they sometimes lack the
skills to upgrade technology, reorganize work, and empower
employees.
Skill Deficiencies of the Workforce
Today, employers are looking for:
mathematical skills
verbal skills
interpersonal skills
computer skills
The gap between skills needed and skills available has
decreased companies ability to compete.
They sometimes lack the capacity to upgrade technology,
reorganize work, and empower employees.
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Today’s employees must be able to handle a variety of
responsibilities, interact with customers, and think creatively.
To find such employees, most organizations are looking for
educational achievements. A college degree is a basic
requirement for many jobs today.
Some companies are unable to find qualified employees and

instead rely on training to correct skill deficiencies.
Other companies team up with universities, community
colleges, and high schools to design and teach courses ranging
from basic reading to design blueprint reading.
13
High-Performance Work Systems
Organizations that have the best possible fit between their:
social system (people and how they interact); and
technical system (equipment and processes).
Key trends occurring in today’s high-performance work
systems:
reliance on knowledge workers
the empowerment of employees to make decisions
the use of teamwork
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HRM is playing an important role in helping organization’s gain
and keep an advantage over competitors by becoming high-
performance work systems.
Organizations must make full use of their people’s knowledge
and skill, to meet customer demands for high quality and
customized products. Skilled HR management can help
organizations do this.
There are three key trends occurring in today’s high-
performance work systems:
Reliance on knowledge workers
The empowerment of employees to make decisions
The use of teamwork
These trends are discussed on the slides that follow.
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Knowledge Workers
Employees whose contribution to the organization is specialized

knowledge, such as:
knowledge of customers
knowledge of a process
knowledge of a profession
They are especially needed for jobs in:
health services
business services
social services
engineering
management
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The high-growth jobs discussed in Chapter 2 and shown on the
next slide generally require specialized knowledge.
To meet their human capital needs, companies are increasingly
trying to attract, develop, and retain knowledge workers.
Knowledge workers are in a position of power, because they
own the knowledge that the company needs in order to produce
its products and services. They must share their knowledge and
collaborate with others in order for their employer to succeed.
15
Top 10 Occupations for Job Growth
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This slide lists the 10 occupations expected to gain the most
jobs between 2008 and 2018.
Of the jobs expected to have the greatest percentage increases,
most are related to healthcare and computers.
The fastest-growing occupations are: biomedical engineers,

network systems and data communications analysts, home
health aides, personal and home care aides, and financial
examiners. Many of these occupations require a college degree.
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Test Your Knowledge
Ensuring that knowledge workers will share information and
store it so that it is easily retrieved by others is the concern of
which of the following HR activities.
Turnover
Employee Empowerment
Knowledge Management
Employee Selection
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Ensuring that knowledge workers will share information and
store it so that it is easily retrieved by others is the concern of
which of the following HR activities.
Turnover
Employee Selection
Answer – C – knowledge management
Giving employees responsibility and authority to make
decisions regarding all aspects of product development or
customer service.
Employee Engagement
Full involvement in one’s work and commitment to one’s job
and company.

This is associated with:
higher productivity
better customer service
lower employee turnover
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To completely benefit from employees’ knowledge,
organizations need a management style that focuses developing
and empowering employees.
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Teamwork
The assignment of work to groups of employees with various
skills who interact to assemble a product or provide a service.
Work teams often assume many of the activities traditionally
reserved for managers:
selecting new team members
scheduling work
coordinating work with customers and other units of the
organization
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Modern technology places the information that employees need
for improving quality and providing customer service right at
the point of sale or production.
As a result, the employees engaging in selling and producing
must be able to make decisions about how to do their work.
One of the most popular ways to increase employee
responsibility and control is to assign work to teams.
Teamwork can motivate employees by making work more
interesting and significant.
19

Test Your Knowledge
Sharon is a very smart and conscientious worker. Lately, she
has felt that her ideas were disregarded and she was denied
autonomy in completing her work. This situation is probably
caused by a lack of
Turnover
Teamwork
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Sharon is a very smart and conscientious worker. Lately, she
has felt that her ideas were disregarded and she was denied
autonomy in completing her work. This situation is probably
caused by a lack of
Turnover
Teamwork
Answer – “A”
Figure 2-4: Strategic Business Issues Affecting HRM
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HR professionals are increasingly being asked to use their
knowledge of the business and of human resources to help the
organization develop strategies and align HRM policies and
practices with those strategies.

Figure 2.4 summarizes the strategic issues facing human
These issues will be discussed on the slides that follow.
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Total Quality Management (TQM)
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To compete in today’s economy, companies need to provide
high-quality products and services.
If companies do not adhere to quality standards, they will have
difficulty selling their product or service to vendors, suppliers,
or customers.
Therefore, many organizations have adopted some form of total
quality management (TQM).
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TQM is a companywide effort to continuously improve the ways
people, machines, and systems accomplish work.
The TQM approach provides guidelines for all the
organization’s activities, including HRM.
TQM Core Values
Methods and processes are designed to meet the needs of
internal and external customers.
Every employee in the organization receives training in quality.
Quality is designed into a product or service so that errors are

prevented from occurring.
The organization promotes cooperation with vendors, suppliers,
and customers to improve quality and hold down costs.
Managers measure progress with feedback based on data.
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Mergers and Acquisitions
HRM should have a significant role in carrying out a merger or
acquisition.
Differences between the businesses involved in the deal make
conflict inevitable.
Training should include developing conflict resolution skills.
There is a need to sort out differences in the two companies’
practices with regard to compensation, performance appraisal,
and other HR systems.
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Often organizations join forces through mergers (two companies
becoming one) and acquisitions (one company buying another).
HRM should have a significant role in carrying out a merger or
acquisition:
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Figure 2.5: Number of Employees Laid Off During the Past
Decade
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Downsizing presents a number of challenges and opportunities
for HRM.
In terms of challenges, the HRM function must “surgically”
reduce the workforce by cutting only the workers who are less
valuable in their performance.
Achieving this is difficult because the best workers are most
able (and often willing) to find alternative employment and may
leave voluntarily before the organization lays off anyone.
Figure 2.5 illustrates the magnitude of the downsizing problem.
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Reengineering
A complete review of the organization’s critical work processes
to make them more efficient and able to deliver higher quality.
Involves reviewing all the processes performed by all the
organization’s major functions.
This includes human resources management.
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Rapidly changing customer needs and technology have caused
many organizations to rethink the way they get work done.
Therefore, many organizations have undertaken reengineering.
26
Reengineering (continued)
Reengineering affects human resource management in two ways:
The way the HR department itself accomplishes its goals may
change dramatically.
The fundamental change throughout the organization requires
the HR department to help design and implement change so that
all employees will be committed to the success of the
reengineered organization.

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Employees may need training for their reengineered jobs.
The organization may need to redesign the structure of its pay
and benefits to make them more appropriate for its new way of
operating.
It also may need to recruit employees with a new set of skills.
27
Outsourcing
Outsourcing – the practice of having another company (a
vendor, third-party provider, or consultant) provide services.
Outsourcing gives the company access to in-depth expertise and
is often more economical as well.
HR departments help with a transition to outsourcing.
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Many organizations are increasingly outsourcing business
activities.
Many HR functions are being outsourced. One recent study
suggests that 8 out of 10 companies outsource at least one
human resource activity.
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Expanding into Global Markets
Offshoring
Moving operations from the country where a company is
headquartered to a country where pay rates are lower but the
necessary skills are available.
The International Labor Pool
Hiring at home may may involve selection of employees from
other countries.

The beginning of the 21st century has seen significant
immigration.
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To survive, companies must compete in international markets.
Companies must develop global markets, keep up with
competition from overseas, hire from an international labor
pool, and prepare employees for global assignments.
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Figure 2.6: Where Immigrants to the U.S. Came from in 2008
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In 2008, over 1.1 million people obtained permanent resident
status in the U.S.
Figure 2.6 shows the distribution of immigration by continent of
origin.
Employers in tight labor markets (i.e., computer science,
engineering, and information systems) are especially likely to
recruit international students.
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International Assignments
Besides hiring an international workforce, organizations must
be prepared to send employees to other countries.
This requires HR expertise in selecting and preparing employees
for international assignments.
Employees who take assignments in other countries are called
expatriates.
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Table 2.1:
New Technologies Influencing HRM
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Advances in computer-related technology have had a major
impact on the use of information for managing human resources.
Table 2.1 describes some of the technologies that may be
included in an organization’s human resource information
system (HRIS).
32
Human Resource Information System (HRIS)
A computer system used to acquire, store, manipulate, analyze,
retrieve, and distribute information related to an organization’s
human resources. An HRIS can:
support strategic decision making
help the organization avoid lawsuits
provide data for evaluating programs or policies
support day-to-day HR decisions
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Table 2.1 (on the previous slide) describes some of the new
technologies that may be included in an organization’s HRIS.
33
Electronic Human Resource Management (e-HRM)

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HRM activities have moved onto the Internet.
34
e-HRM: the processing and transmission of digitized HR
information especially using computer networking and the
Internet.
e-HRM has the potential to change all traditional HRM
functions.
Self-Service: System in which employees have online access to
information about HR issues and go online to enroll themselves
in programs and provide feedback through surveys
Table 2.2: Implications of e-HRM for HRM Practices
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E-HRM has the potential to change all traditional HRM
functions.
Table 2.2 shows some major implications of e-HRM.

Privacy is an important issue in e-HRM. A great deal of
information is confidential and not suitable for posting on a
Web site for everyone to see.
35
Change in the Employment Relationship
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Technology and the other trends described in Chapter 2 and in
this presentation require managers at all levels to make rapid
changes in response to new opportunities, competitive
challenges, and customer demands.
These changes are most likely to succeed in flexible, forward-
thinking organizations, and the employees who will thrive in
such an environment need to be flexible and open to change as
well.
In this environment, employers and employees have begun to
reshape the employment relationship:
A new psychological contract
Flexibility
Flexible staffing levels
Flexible work schedules
36
A New Psychological Contract
Flexibility
Flexible Staffing Levels
Flexible Work Schedules

The Nature of the Employment Relationship is Changing
The employment relationship takes the form of a “psychological
contract” that describes what employees and employers expect
from the employment relationship.
In the traditional version, organizations expected employees to
contribute time, effort, skills, abilities, and loyalty in exchange
for job security and opportunities for promotion.
Today, organizations’ needs are constantly changing.
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37
The Nature of the Employment Relationship is Changing
(continued)
Today, organizations are requiring top performance and longer
work hours but cannot provide job security.
Instead, employees are looking for:
flexible work schedules
comfortable working conditions
greater autonomy
opportunities for training and development
performance-related financial incentives
This requires planning for flexible staffing levels.
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Flexibility: A Family-Friendly Work Arrangement
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The Need for Flexibility Affects HRM
Organizations seek flexibility in staffing levels through
alternatives to the traditional employment relationship:
outsourcing, temporary, and contract workers
flexible work schedules – including shortened work weeks
allowing employees to adjust work hours to meet personal and
family needs
moving employees to different jobs to meet changes in demand
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40
Summary
An organization’s internal labor force comes from its external
labor market
In the U.S., this labor market is aging and becoming more
racially and ethnically diverse.
Organizations must recruit from a diverse population, establish
bias-free HR systems, and help employees understand and

appreciate cultural differences.
HRM can help organizations find and keep the best possible fit
between their social system and technical system.
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41
Summary (continued)
Job design and appropriate systems for assessment and rewards
have a central role in supporting employee empowerment and
teamwork.
Employee empowerment means giving employees responsibility
and authority to make decisions regarding all aspects of product
development or customer service.
HRM must design jobs to give employees latitude for decision-
making and interpersonal skills.
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42
Summary (continued)
HR professionals should be familiar with the organization’s
strategy and may even play a role in developing the strategy.
Specific HR practices vary according to type of strategy.
Organizations with international operations hire employees in
foreign countries where they operate, so they need knowledge of
differences in culture and business practices.
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43
Summary (continued)
Information systems have become a tool for more HR
professionals, and often these systems are provided through the
Internet.
Online information sharing enables employee self-service for
many HR needs.
The employment relationship takes the form of a “psychological
contract” that describes what employees and employers expect
from the employment relationship.
The traditional employment relationship is changing.
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44
Summary (continued)
Organizations seek flexibility in staffing levels through
alternatives to the traditional employment relationship.
Organizations also may seek flexible work schedules.
Shortened workweeks
Adjust work hours as a way for employees to meet personal
needs
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45

fundamentals of
Human Resource Management 4th edition
by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright
CHAPTER 5
Planning for and Recruiting Human Resources
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All
Rights Reserved.
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Chapter 5, Planning for and Recruiting Human Resources,
examines factors that influence the supply and demand for
labor, and, in particular, focus on what human resources
managers can do in terms of planning and executing human
resource policies that give their firms competitive advantage in
a dynamic environment. Two of the major ways that societal
trends and events affect employers are through (1) consumer
markets, which affect the demand for goods and services, and
(2) labor markets, which affect the supply of people to produce
goods and services. In some cases, the market might be
characterized by a labor surplus. In other cases, the market may
be characterized by a shortage of labor.
Reconciling the difference between the supply and demand for
labor presents a challenge for organizations, and how they
address this will affect their overall Competitiveness. There are
three keys to effectively utilizing labor markets to one’s
competitive advantage. First, companies must have a clear idea
of their current configuration of human resources. In particular,
they need to know the strengths and weaknesses of their present
stock of employees. Second, organizations must know where

they are going in the future and be aware of how their present
configuration of human resources relates to the configuration
that will be needed. Third, where there are discrepancies
between the present configuration and the configuration
required for the future, organizations need programs that will
address these discrepancies. Under conditions of a labor
surplus, this may mean creating an effective downsizing
intervention.
Under conditions of a labor shortage, this may mean waging an
effective recruitment campaign. Chapter 5 looks at tools and
technologies that can help an organization develop
and implement effective strategies for leveraging labor market
“threats” into opportunities to gain competitive advantage.
1
What Do I Need to Know?
Discuss how to plan for human resources needed to carry out
the organization’s strategy.
Determine the labor demand for workers in various job
categories.
Summarize the advantages and disadvantages of ways to
eliminate a labor surplus and avoid a labor shortage.
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2
Describe recruitment policies organizations use to make job
vacancies more attractive.
List and compare sources of job applicants.
Describe the recruiter’s role in the recruitment process,
including limits and opportunities.

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3
The Process of Human Resource Planning
Organizations should carry out human resource planning so as
to meet business objectives and gain a competitive advantage
over competitors.
Human resource planning compares the present state of the
organization with its goals for the future
Then identifies what changes it must make in its human
resources to meet those goals
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Trends and events that affect the economy also create
opportunities and problems in obtaining human resources.
To prepare for and respond to these challenges, organizations
engage in human resource planning – defined in Chapter 1 as
identifying the numbers and types of employees the
organization will require to meet its objectives.
4
Figure 5.1: Overview of the Human Resource Planning Process
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Figure 5.1 shows the human resource planning process.
The process consists of three stages:
Forecasting

Goal setting and strategic planning
Program implementation and evaluation
5
Forecasting
Forecasting: attempts to determine the supply and demand for
various types of human resources to predict areas within the
organization where there will be labor shortages or surpluses.
There are three major steps to forecasting:
Forecasting the demand for labor
Determining labor supply
Determining labor surplus or shortage
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The first step in human resource planning is forecasting.
The primary goal is to predict which areas of the organization
will experience labor shortages or surpluses.
6
Forecasting the Demand for Labor
Trend Analysis
Constructing and applying statistical models that predict labor
demand for the next year, given relatively objective statistics
from the previous year.
Leading Indicators
Objective measures that accurately predict future labor demand.
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Usually an organization forecasts demand for specific job
categories or skill areas.
After identifying the relevant job categories or skills, the
planner investigates the likely demand for each.

The planner must forecast whether the need for people with the
necessary skills and experience will increase or decrease.
There are several ways of making such forecasts.
7
Determining Labor Supply
Transitional matrix: a chart that lists job categories held in one
period and shows the proportion of employees in each of those
job categories in a future period.
It answers two questions:
“Where did people in each job category go?”
“Where did people now in each job category come from?
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Once a company has forecast the demand for labor, it needs an
indication of the firm’s labor supply.
8
Table 5.1: Transitional Matrix – Example for an Auto Parts
Manufacturer
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Table 5.1 is an example of a transitional matrix.
Matrices such as this one are extremely useful for charting
historical trends in the company’s labor supply.
9
Determining Labor Surplus or Shortage
Based on the forecasts for labor demand and supply, the planner
can compare the figures to determine whether there will be a
shortage or surplus of labor for each job category.

Determining expected shortages and surpluses allows the
organization to plan how to address these challenges.
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Issues related to a labor surplus or shortage can pose serious
challenges for the organization.
10
Goal Setting and Strategic Planning
The purpose of setting specific numerical goals is to focus
attention on the problem and provide a basis for measuring the
organization’s success in addressing labor shortages and
surpluses.
The goals should come directly from the analysis of supply and
demand.
For each goal, the organization must choose one or more human
resource strategies.
Organizations should retain and attract employees who provide
a core competency (what makes it better than competitors)
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This is the second step in human resource planning as shown in
the middle of Figure 5.1.
11
Options for Reducing a Surplus
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12

Downsizing
Pay reductions
Demotions
Transfers
Work sharing
Hiring freeze
Natural attrition
Early retirement
Retraining

As the average age of many workers in skilled trades grows, the
coming demand for workers in many trades is expected to
outstrip supply in the United States. There is a potential for
employers in some areas to experience a labor shortage because
of this.
5-‹#›
5-‹#›
Ask students:
“How can HR prepare itself for this reality?”
“What should be done now to avoid the shortage?”
13
Options for Avoiding a Shortage
5-‹#›
5-‹#›
14
Overtime
Temporary employees
Outsourcing
Retrained transfers

Turnover reductions
New external hires
Technological innovation
Table 5.2: HR Strategies for Addressing a Labor Shortage or
Surplus
5-‹#›
5-‹#›
This table describes each option for managing labor shortages
and surpluses in terms of important factors to consider. These
factors are speed, amount of suffering caused, and ability to
change later.
15
Test Your Knowledge
A public accounting firm of 250 employees realizes they have a
surplus of 15 support personnel (not auditors). What should

they do?
Hire temporary workers
Offer early retirement
Downsize people in those positions
Wait for attrition and implement a hiring freeze for those
positions
5-‹#›
5-‹#›
16
A public accounting firm realizes they have a surplus of support
personnel (not auditors). What should they do?
Hire temporary workers
Offer early retirement
Downsize people in those positions
Wait for attrition and implement a hiring freeze for those
positions
There may be more than one good answer depending on the
student’s rationale. D would have the least negative impact but
may take a long time. “B” Early retirement would likely entice
more than just support personnel and perhaps more than just 15
people which could cause a labor shortage. Downsizing would
be fast but could create morale problems and a poor public
image although with the small numbers this may not be much of
a problem.
“A” is not appropriate until the surplus is managed.
Implementing and Evaluating the HR Plan
When implementing the HR strategy, the organization must hold
some individual accountable for achieving the goals.
That person must also have the authority and resources needed
to accomplish those goals.

Regular progress reports should be issued.
The evaluation of results should not only look at the actual
numbers, but should also identify which parts of the planning
process contributed to success or failure.
5-‹#›
5-‹#›
For whatever HR strategies are selected, the final stage of
human resource planning involves implementing the strategies
and evaluating the outcomes.
This stage is represented by the bottom part of Figure 5.1.
17
Applying HR Planning to Affirmative Action
Workforce Utilization Review: a comparison of employees in
protected groups with the proportion that each group represents
in the relevant labor market.
The steps in a workforce utilization review are identical to the
steps in the HR planning process.
The organization must assess current utilization patterns, then
forecast how they are likely to change in the near future.
If the analyses forecast underutilization of certain groups, then
goals and a plan will be established.
5-‹#›
5-‹#›
Meeting affirmative action goals requires that employers carry
out an additional level of human resource planning aimed at
those goals.
The organization looks at the representation of subgroups in its
labor force.
18

Recruiting Human Resources
The role of human resource recruitment is to build a supply of
potential new hires that the organization can draw on if the need
arises.
Recruiting: any activity carried on by the organization with the
primary purpose of identifying and attracting potential
employees.
5-‹#›
5-‹#›
The goals of recruiting (encouraging qualified people to apply
for jobs) and selection (deciding which candidates would be the
best fit) are different enough that they are most effective when
performed separately, rather than combined as in a job
interview that also involves selling candidates on the company.
19
Figure 5.2: Three Aspects of Recruiting
5-‹#›
5-‹#›
All companies have to make decisions in three areas of
recruiting:
Personnel policies
Recruitment sources
Characteristics and behavior of the recruiter
These aspects of recruiting have different effects on whom the
organization ultimately hires.
This is shown in Figure 5.2.
20
Personnel Policies
Several personnel policies are especially relevant to

recruitment:
5-‹#›
5-‹#›
An organization’s personnel policies are its decisions about how
it will carry out human resource management, including how it
will fill job vacancies.
Each of these strategies have a particular set of pros and cons.
Policies should be evaluated as to their ability to support the
organization’s long-term strategy.
21
Internal versus external recruiting
Lead-the-market pay strategies
Employment-at-will policies
Image advertising

Image advertising, such as in this campaign to recruit nurses,
promotes a whole profession or organization as opposed to a
specific job opening.
This ad is designed to create a positive impression of the
profession, which is now facing a shortage of workers.
5-‹#›
5-‹#›
22
Recruitment Sources: Internal Sources
Job Posting: the process of communicating information about a
job vacancy:
On company bulletin boards
In employee publications
On corporate intranets
Anywhere else the organization communicates with employees
5-‹#›
5-‹#›
Another critical element of an organization’s recruitment
strategy is its decisions about where to look for applicants.
The total labor market is enormous and spread over the entire
globe.
23
Advantages of Internal Sources
It generates applicants who are well known to the organization.
These applicants are relatively knowledgeable about the
organization’s vacancies, which minimizes the possibility of
unrealistic job expectations.

Filling vacancies through internal recruiting is generally
cheaper and faster than looking outside the organization.
5-‹#›
5-‹#›
For the employer, relying on internal sources offers several
advantages:
24
One in Three Positions Are
Filled with Insiders
5-‹#›
5-‹#›
In a survey of large, well-known businesses, respondents said
about one-third of positions are filled with people who already
work for the company and accept a promotion or transfer.
25
Recruitment Sources: External Sources
5-‹#›
5-‹#›
Despite the advantages of internal recruitment, organizations
often have good reasons to recruit externally. For entry-level
positions and perhaps for specialized upper-level positions, the
organization has no internal recruits from which to draw. Also,
bringing in outsiders may expose the organization to new ideas
or new ways of doing business.
26
Direct applicants

Referrals
Advertisements in newspapers and magazines
Electronic recruiting
Public employment agencies
Private employment agencies
Colleges and universities

Figure 5.3: External Recruiting Sources – Percentage of
Employees Hired
5-‹#›
5-‹#›
Figure 5.3 shows which of the external sources of recruiting are
used most among large companies surveyed.
According to the survey results shown in Figure 5.3, the largest
share (about one-fourth) of new employees hired by large
companies came from referrals, and the next largest share
(almost 21 percent) came from direct applications made at the
employer’s Web site.
27
Evaluating the Quality of a Source
Yield Ratios
A ratio that expresses the percentage of applicants who
successfully move from one stage of the recruitment and
selection process to the next.
By comparing the yield ratios of different recruitment sources,
we can determine which source is the best or most efficient for
the type of vacancy.

Cost Per Hire
Find the cost of using a particular recruitment source for a
particular type of vacancy.
Divide that cost by the number of people hired to fill that type
of vacancy.
A low cost per hire means that the recruitment source is
efficient.
5-‹#›
5-‹#›
There are few rules that say what recruitment source is best for
a given job vacancy.
Therefore, it is wise for employers to monitor the quality of all
their recruitment sources.
28
Table 5.3:
Results of a Hypothetical Recruiting Effort
5-‹#›
5-‹#›
Table 5.3 shows how the yield ratio and cost per hire measures
are used by HR professionals.
29
Your Experience
In your last job search, what was your experience with a
recruiter or other point of contact before you were offered the
job?
Lousy, I didn’t take the job
Lousy, but I took the job anyway
Great, but I didn’t take the job
Great, I took the job

The experience wasn’t memorable.
5-‹#›
5-‹#›
30
In your last job search, what was your experience with a
recruiter or other point of contact before you were offered the
job?
Lousy, I didn’t take the job
Lousy, but I took the job anyway
Great, but I didn’t take the job
Great, I took the job
The experience wasn’t memorable.
Use this question as a starting point to discuss the factors that
contributed to taking the job or not and to what extent the
recruiter or point of contact had on that decision.
Follow-up with a series of “why” questions for those who
responded to each option.
Recruiter Traits and Behaviors
5-‹#›
5-‹#›
The third influence on recruitment outcomes is the recruiter –
including this person’s characteristics and the way he or she
behaves.
The recruiter affects the nature of both the job vacancy and the
applicants generated.
31
Characteristics of the Recruiter

Behavior of the Recruiter
Enhancing the Recruiter’s Impact
Recruiter Characteristics and Behavior
True = A False = B
Applicants respond more positively when the recruiter is an HR
specialist than line managers or incumbents.
Applicants respond positively to recruiters whom are warm and
informative
Personnel policies are more important than the recruiter when
deciding whether or not to take a job.
Realistic job previews should highlight the positive
characteristics of the job rather than the negative.
5-‹#›
5-‹#›
32
The recruiter affects the nature of both the job vacancy and the
True=A; False=B
Applicants respond more positively when the recruiter is an HR

specialist than line managers or incumbents.
False – applicants tend to respond more positively to someone
who is currently in the job or a manager.
Applicants respond positively to recruiters whom are warm and
informative
True - In general, applicants respond more positively to
recruiters whom they perceive as warm and informative.
Personnel policies are more important than the recruiter when
deciding whether or not to take a job.
True - For affecting whether people choose to take a job, the
recruiter seems less important than an organization’s personnel
policies that directly affect the job’s features.
Realistic job previews should highlight the positive
characteristics of the job rather than the negative.
False - Realistic job previews provide background information
about job’s positive and negative qualities.
Figure 5.4:
Recruits Who Were Offended by Recruiters
5-‹#›
5-‹#›
Figure 5.4 quotes applicants who felt they had extremely bad
experiences with recruiters. Their statements provide examples
of behaviors to avoid.
33
Enhancing the Recruiter’s Impact
Recruiters should provide timely feedback.
Recruiters should avoid offensive behavior.
They should avoid behaving in ways that might convey the
wrong impression about the organization.
The organization can recruit with teams rather than individual

recruiters.
5-‹#›
5-‹#›
Researchers have tried to find the conditions in which recruiters
do make a difference. Such research suggests that an
organization can take several steps to increase the positive
impact that recruiters have on job candidates.
Through such positive behavior, recruiters can give
organizations a better chance of competing for talented human
resources.
34
Recruiting Exercise (1 of 2)
You are the regional HR director of the restaurant chain (e.g.,
Ruby Tuesday’s or TGI Fridays) and responsible for recruiting
all staff for the restaurants in your region.
One of the stores in your region needs to hire servers.
5-‹#›
5-‹#›
35
Questions for discussion are on the next slide.
Recruiting Exercise (2 of 2)
What knowledge, skills, and abilities are required for the
positions you are recruiting?
Will your sources of applicants be internal, external, or both?
Explain.
What recruiting strategies will you use?
What metrics will you use to measure your success?
5-‹#›

5-‹#›
36
Have them think about this as individuals for a couple of
minutes and then work together with a partner to develop an
approach.
1. This job should be familiar to them so they should have a
good list of KSAs
2. Consider the right source based on the necessary
qualifications of the employee. Also, consider promoting hosts
to be a server if possible?
Costs should be a consideration as well as reach in terms of
diversity.
What will they want to keep track of to measure their success?
Job performance, time to hire, cost per hire, yield ratios, etc.
Summary
The first step in human resource planning is personnel
forecasting. Through trend analysis and good judgment, the
planner tries to determine the supply and demand for various
human resources.
The next step is to determine the labor demand for workers in
various job categories. Analysis of a transitional matrix can
help the planner identify which job categories can be filled
internally and where high turnover is likely.
5-‹#›
5-‹#›
37
Summary (continued)
To reduce a surplus, downsizing, pay reductions, and demotions
deliver fast results but at a high cost in human suffering that

may hurt surviving employees’ motivation and future recruiting.
To avoid a labor shortage, requiring overtime is the easiest and
fastest strategy.
Internal recruiting generally makes job vacancies more
attractive because candidates see opportunities for growth and
advancement.
5-‹#›
5-‹#›
38
Summary (continued)
Lead-the-market pay strategies make jobs economically
desirable.
Internal sources are usually not sufficient for all of an
organization’s labor needs.
Through their behavior and other characteristics, recruiters
influence the nature of the job vacancy and the kinds of
5-‹#›
5-‹#›
39
BUSINESSWEEK CASE: A Critical Shortage of Nurses
The United States is facing a severe nursing shortage. Already,
an estimated 8.5 percent of U.S. nursing positions are unfilled—
and some expect that number to triple by 2020 as 80 million
baby boomers retire and expand the ranks of those needing care.
Hospital administrators and nurses' advocates have declared a
staffing crisis as the nursing shortage hits its 10th year.

So why aren't nurses paid more? Wages for registered nurses
rose just 1.34 percent from 2006 to 2007, trailing well behind
inflation. The answer is complicated, influenced by hospital
cost controls and insurance company reimbursement policies.
But another factor is often overlooked: Huge numbers of nurses
are brought into the United States from abroad every year. In
recent years nearly a third of the RNs joining the U.S.
workforce were born in other countries.
Critics say this is a short-term solution that could create long-
term problems. The influx of non-U.S. nurses allows hospitals
to fill positions at low salaries. But it prevents the sharp wage
hike that would encourage Americans to enter the field, which
could solve the nursing shortage in the years ahead. “Better pay
would signify to society that nursing is a promising career,”
says Peter Buerhaus, a professor of nursing at Vanderbilt
University. “It’s a critical factor in building the workforce of
the future.”
The U.S. market for nurses is a reflection of how labor markets
can change with globalization. With new technology and the
increasing movement of workers, labor markets are no longer
local or even national. Supply and demand don't work quite as
they did in the past. Shortages in one market aren't corrected
with higher prices if supply comes from another.
Pay isn't the only issue. Difficult working conditions and
understaffing also deter qualified people from pursuing the
profession. But average annual wages for registered nurses (one
of the most highly trained categories) is now just under $58,000
a year, compared with a $36,300 average for U.S. workers
overall. And it’s clear that qualified American nurses see that as
not enough: 500,000 registered nurses are not practicing their
profession—one-fifth of the current RN workforce of 2.5
million and enough to fill current vacancies twice over.
Hospitals insist the U.S. shortage is too severe to address
simply with money. Carl Shusterman, an immigration lawyer in
Los Angeles, says he has 100 hospital clients that have 100
vacancies apiece. With two- to three-year waiting lists to get

into nurse-training programs in the United States, pressure to
import nurses won't abate, he says, adding, “Even if we could
train more nurses and pay them more, we'd still need to import
them.”
Raising pay has successfully attracted nurses in the past,
however. To remedy a shortage that developed in the late 1990s,
hospitals started hiking wages in 2001—and added 186,500
nurses from 2001 to 2003. Some advocates draw a direct link
between wages and recruiting. A 2006 study by the Institute for
Women’s Policy Research concluded, “Increasing pay for nurses
is the most direct way to draw both currently qualified and
aspiring nurses to hospital employment.”
While nurses' advocates say better pay is critical, they also
argue that working conditions must improve if the United States
is to cultivate an enduring nursing workforce. “You will draw in
some people with a good pay raise, but you won't necessarily
get them to stay,” says Cheryl Johnson, a registered nurse and
president of the United Association of Nurses, the largest
nurses' union in the United States. “Almost every nurse will tell
you that staffing is a critical problem. The workload is so great
that there’s not time to see how [patients are] breathing, give
them water, or turn them to prevent bedsores. The guilt can be
unbearable.”
Whatever mix of better wages, better working conditions, and
foreign workers hospitals employ, solving the nursing shortage
in the long run will require solutions on several fronts. “Nurses
are getting more organized, but major change isn't going to
happen overnight,” says Suzanne Martin, a spokeswoman for the
United Association of Nurses, noting that other groups “would
prefer to keep things as they are.”
5253
SOURCE: Excerpted from Moira Herbst, “A Critical Shortage
of Nurses,” BusinessWeek, August 29, 2007, downloaded from
General Reference Center Gold, http://find.galegroup.com.

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