Human resource management assignment 2

6 2

12
Incentive Pay

Case 12.1. Executive Compensation:
New Developments in Executive Compensation
Human resources leaders and compensation experts will always need to attract talented
managers to their corporations. However, newer laws are in place to help rein in large
executive salaries.

Sarbanes-Oxley (SOX) in 2002 has allowed the Securities and Exchange Commission
(SEC) to “claw back” executive pay and stock awards retroactively. SOX has mandatory
reporting requirements of all company perks, jets, country club memberships, and so on.1

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was
signed into federal law by President Barack Obama on July 21, 2010. Commonly
known as the Dodd-Frank, it requires that a public company present to its sharehold-
ers a plan to approve compensation, and “enhanced compensation” must be disclosed
to the SEC. The goal is to monitor executive compensation by making sure executives
are meeting performance-based goals.

The Dodd-Frank Section 953 requires additional disclosure about certain compen-
sation matters, including pay-for-performance and the ratio between the CEO’s total
compensation and the median total compensation for all other company employees.2

SOX and Dodd-Frank are very large laws that HR people might not be able to fol-
low on a daily basis. However, since the recession of 2008, there has been much more
attention paid to the large salaries executives receive.

Most large salaries come in the form of stock and stock options in the company.
CEOs are rewarded for their performance by receiving these stock options. For exam-
ple, CEO Larry Ellison of Oracle was paid $96 million in 2012 and $77 million in 2013
(he declined a performance bonus and took $1 in salary).

However, a study by professors found that, the more CEOs got paid, the worse their
companies did.3 One conclusion was that the CEOs became overconfident in their
abilities and made poor decisions. Another conclusion might be that they lost their
focus and motivation and found other pursuits outside the company to follow. For
example, Ellison is very active and a big supporter of yacht racing.

The clawback issue is still being pursued in 2015 as part of Dodd-Frank. The
SEC voted to propose a rule that would require exchanges to establish standards for

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Chapter 12 • Incentive Pay 6 3

revoking executive bonuses when companies restate earnings or make accounting
errors leading to the restatement of earnings, regardless of the executive’s fault.4 The
clawback window would extend for 3 years after the bonus was given.

There is also a call for improving the Sarbanes-Oxley legislation since it has been
more than 10 years since the regulation has been established. BoardProspects is an
online professional community dedicated to building better boards of directors for
private, public, and nonprofit organizations. Mark Rogers, the founder and chief exec-
utive, posts that the real problem with executive compensation starts with the board
of directors. He points at the collapse of Enron as a failure of the board of directors.
The board didn’t safeguard Enron shareholders and contributed to the collapse of
the seventh largest public company in the United States. The board allowed Enron
to engage in high-risk accounting, inappropriate conflict of interest transactions,
extensive undisclosed off-the-books activities, and excessive executive compensation.
Rogers claims that executive pay would be more reasonable if there were term limits
on how long a person can serve on a board, limits on the number of boards a person
can sit on at one time, and requirements for continuing education on governance as
part of his or her training.5

Case Questions

1. What is a clawback process in regard to
executive compensation?

2. How do the newer laws impact the job of
the HR person or compensation expert?

3. Why is the Dodd-Frank legislation so
important to executive compensation?

4. Why is Sarbanes-Oxley an important
part of HR?

5. What is the role of the board of
directors in setting executive pay?

Case 12.2. Trends and Issues in
HRM: The Giving Praise Model in Action
The first time David Shaker went to work and was paid was when he was 18 years
old. Although David did jobs such as raking leaves and shoveling snow, he was more
focused on playing sports than getting a part-time job. During his first year of college,
he found his first real job at a McDonald’s. The part-time job at McDonald’s taught
David almost everything he learned about business, and he has used it throughout
the rest of his life.

One such learning lesson at McDonald’s was in regard to compensation and
incentive pay. Individual incentives reinforce performance with a reward that is sig-
nificant to the person. At 18 years old, David was very happy with a minimum wage
of $1.65 and the benefit of a free meal for each shift he worked. Since David was
evaluated on his personal performance at the restaurant, it was pretty easy for his

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Part IV • Compensating6 4

manager Naino Leo to evaluate the quality, cleanliness, and service David provided
to customers. Plus, it was fairly easy to evaluate David since his job had a distinct
outcome (the quality and appearance of the cooked hamburger).

After David graduated from college in 1982, he took a marketing position with the
old AT&T. David was evaluated on the performance of the entire group of marketers
and their ability to sell expensive telephone systems to business customers. Group
incentives provide reinforcement for the actions of more than one individual within
the organization. The group evaluation at AT&T did promote teamwork because the
employees in David’s area had to work together to earn their bonus. Most of the team
members were loyal and trusted each other to complete the sales. However, the prob-
lem with teamwork at AT&T was that a few employees played the social loafer role.
That meant that they didn’t work nearly as hard and made fewer sales to customers.
These social loafers still expected to share in the bonus each employee would get if
the team met or went beyond their sales goal. A bonus is a lump sum payment, typi-
cally given to an individual at the end of a time period. Like all employees, David was
happy to get a “holiday bonus.”

David’s next step in his career path led him to Monarch Insurance, where he
learned all about the strengths and weaknesses of commission-based sales. A com-
mission is a payment typically provided to a salesperson for selling an item to a
customer, usually calculated as a percentage of the price of the item sold. In David’s
case, he sold insurance policies to employees at other companies as part of the ben-
efit those employees were offered. Thus, if David sold an employee from Company
ABC an insurance policy to protect his family in case of his death, then David
would earn a commission. Many salespeople are paid on a straight commission,
meaning that they get paid only if they sell an item. In David’s case, he was paid a
lower base salary, which was supplemented by commissions on his sales. David felt
his salary plus commission compensation structure was implemented properly, and
he enjoyed the motivation to increase his paycheck by making more sales. It was
important for David to treat customers properly (as he was trained at McDonald’s),
even if he made a smaller commission. He would rather see that the customers
got the correct life insurance policy. Commission sales can motivate salespeople to
want to earn the highest commission possible—even if it means that customers buy
more product than they actually need.

David felt fortunate that he never worked under a piecework or piece-rate plan.
However, he once took a tour of a toy factory, which was under a piece-rate plan, and
he watched the employees sorting pieces to include in a 72-piece set. The employees
working around the machine were quite calm and peaceful. They just kept inserting
bricks, such as the toy head for the person, into the set. When asked, the employees
said they were paid for each set of products that was made to the expected quality and
specifications. The employees also noted that they enjoyed job rotation and would
exchange seats around the machine and belts. That would allow the person to take
a different part and insert that part into a different spot in the box. The key for the
employees was to work at the proper pace so that they were not working too slowly
or too fast. Working too slowly could mean that you weren’t making enough of the
product. Working too fast could mean that you made mistakes because you didn’t
have enough time to be careful.

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Chapter 12 • Incentive Pay 6 5

But for all the different compensation plans that David experienced in his differ-
ent jobs, he was most happy when someone told him he was doing a good job. If the
customers said he was doing a good job . . . great! If a manager said he was doing a
good job . . . great! If his wife praised him about doing a good job—that was also great!

The Giving Praise Model has four steps. The first step is to tell the employee exactly
what was done properly. The second step is to tell the employee why the behavior
is important. The third step is to allow a moment of silence to give the employee a
chance to feel the impact of the praise. The fourth step is to encourage repeat perfor-
mance so the employee continues to do great work.

Upon reflection, David was always impressed with the praise he received at
McDonald’s from his boss Naino Leo. Naino gave praise fairly easily, and it didn’t cost
McDonald’s a penny! Managers who use praise will realize that it really works and that
employees work even harder to keep up the good work. At times, David did receive
praise for finishing his college education, selling telephones for AT&T, or selling an
insurance policy. But he also was a little sad that he never quite had the same praise
that he had received at 18 years old from his boss Naino.

Case Questions

1. How would you compare hourly wages,
having a salary, or being paid by
commission?

2. What is the benefit of the Giving Praise
Model?

3. Why do companies have a piece-rate
system?

4. What is the key step in the praise
model?

5. Which type of compensation incentive
would you be most likely to receive
if you stayed with the same company
for 20 years?

Notes

1. Nemer, Kirk D., “New 2015 Developments in Executive Compensation,” Executive Career
Insider, May 28, 2015, https://www.bluesteps.com/blog/executive-compensation-2015.

2. https://www.sec.gov/spotlight/dodd-frank/corporategovernance.shtml.
3. Adams, Susan, “The Highest-Paid CEOs Are the Worst Performers, New Study Says,” Forbes,

June 16, 2014, http://www.forbes.com/sites/susanadams/2014/06/16/the-highest-paid-ceos-
are-the-worst-performers-new-study-says/.

4. “SEC Proposes Executive Bonus ‘Clawback’ Rule,” ABA Banking Journal, July 1, 2015, http://
bankingjournal.aba.com/2015/07/sec-proposes-executive-bonus-clawback-rule/.

5. Rogers, Mark, “Sarbanes-Oxley 10 Years Later: Boards Are Still the Problem,” Forbes, July 29,
2012.

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6 6

13
Employee Benefits

Case 13.1. Statutory
Benefits: Companies Kicking Your
Spouse Off of Your Health Care Plans
Dennis Ferry works for Compatible Technology in its customer service department.
Dennis knows he will have to make plenty of decisions when open enrollment for his
company health plan, Health New England, rolls around July 1 each year. Dennis’s
health-care coverage was totally free for employees in 1982 when he was just out of
college. That was a long time ago—and health care in the United States has changed
dramatically.

Today, companies are looking to save as much money as possible when designing
a health-care program. Each employee who signs up for the company health-care
program can cost the company between $4,000 and $10,000 a year, depending on
the program selected. Of course, it would be nice to think that the companies (and
our government) are also trying to make sure we receive the best health care possible.

Dennis’s wife, Janice Ferry, is employed by LEGO. Dennis and Janice have three
daughters under 10 years old. As a family, they can expect to pay about $300 a month
for the plan offered by Compatible Technology. They can also expect a deductible
around $2,500 to $4,000. The Compatible health-care plan has a deductible of $2,500,
which means the Ferrys will have to pay $2,500 in actual medical costs for pharma-
ceutical drugs, office visits, hospital stays, and so on before they can expect to receive
“free” health service until July 1 rolls around again.

If Dennis worked for UPS, Janice would have to take health-care insurance from
her job at LEGO, since she would not be allowed to stay on the Compatible plan. That
would happen because UPS informed their employees that their spouses would be
dropped from their health-care plan if the spouse can obtain health care at his or her
own place of employment.1 This measure was taken as a reaction to the Affordable
Care Act (ACA). UPS expects to save money by avoiding paying the premiums for each
person on the plan. These premiums were implemented as part of the ACA.2

In Dennis’s case, he recently had to decide if he wanted to receive a $3,000 pay-
ment from his employer, Compatible Technology, to not take his health-care benefits.

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Chapter 13 • Employee Benefits 67

The $3,000 must be used to pay for a spouse’s health-care program. Thus, if Dennis
didn’t take Compatible’s health-care plan from Health New England, he would be paid
$3,000 to help pay for health-care benefits at LEGO, where his wife works. Proof of
the other health-care plan must be provided. In Dennis’s case, since his wife Janice
worked for LEGO with a generous health-care plan, they decided to take the offer
from Compatible for $3,000 and would apply it to a family plan offered by LEGO. This
appears to be a positive switch in plans, since even Compatible will be happy that it
will not have to pay its portion of Dennis’s health-care plan, which would be greater
than $3,000.

Case Questions

1. Approximately how much money would a
company spend on a health-care plan for
Janice as compared to her own cost?

2. What did UPS claim as the reason
for dropping spouses from its health-
care plans?

3. What decisions does Janice have to
make in regard to selecting her
health-care plan?

4. At UPS, what would be the result if
your spouse was forced to use his or
her own company plan?

5. What health-care plan are you
covered by at this time? Are you
working for a company and have you
accepted the company plan? Are you
on your parents’ plan, which you can
be covered on until age 26?

Case 13.2. Trends and Issues in HRM:
Managing New Laws Regarding Sick Leave
It might be surprising to know, but there is no general legal requirement that employ-
ers give employees sick leave in the United States. While most employers do give
employees some paid time off each year to be used for sick leave, the law does not
require employers to do so in most circumstances. Since there is no requirement under
federal law that employees be given sick leave, there also is no legal requirement that
sick leave, if given by an employer, be paid leave.

The following passage is from the U.S. Department of Labor.

Currently, there are no federal legal requirements for paid sick leave. For compa-
nies subject to the Family and Medical Leave Act (FMLA), the Act does require
unpaid sick leave. FMLA provides for up to 12 weeks of unpaid leave for cer-
tain medical situations for either the employee or a member of the employee’s
immediate family. In many instances paid leave may be substituted for unpaid
FMLA leave.

Employees are eligible to take FMLA leave if they have worked for their
employer for at least 12 months, and have worked for at least 1,250 hours over

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Part IV • Compensating6 8

the previous 12 months, and work at a location where at least 50 employees are
employed by the employer within 75 miles.3

An estimated 43 million people nationwide have no paid sick time. Employees
without time for sick leave often make up excuses to take time off or try to work when
they are sick. Employees also have to figure out what to do when their child is sick and
needs to stay home, when they need to go to their own doctor, or when they need to
help a sick relative.

However, cities and states are starting to propose and pass laws that provide work-
ers with sick leave time. A city of Pittsburgh councilman has proposed an ordinance
that allows employees to earn sick days based upon the number of hours they have
worked. The draft legislation allows 30 hours of work to equal 1 hour of sick time.
Employees cannot earn more than 72 hours of sick time in a year. Businesses with
fewer than 15 employees can limit sick time to 40 hours.4

Effective July 1, 2015, the state of Massachusetts passed the Earned Sick Time Law,
which provides 1 hour of sick time for 40 hours of work. Earned sick time is paid at the
employee’s normal rate of pay. Employers that have 11 employees or more must allow
their employees to earn and use up to 40 hours of paid sick time per calendar year.
Employees working for an employer with fewer than 11 employees can earn up to 40
hours of unpaid sick leave per calendar year. An employee may miss work (1) to care for
a physical or mental illness, injury, or medical condition affecting the employee or the
employee’s child, spouse, parent, or parent of a spouse; (2) to attend routine medical
appointments or those of a child, spouse, parent, or parent of a spouse; or (3) to address
the effects of domestic violence on the employee or the employee’s dependent child.5

Six and a half million people in California became eligible for paid sick leave for
the first time starting July 1, 2015. The Healthy Workplace Healthy Family Act of 2014
guarantees up to three days of paid sick leave for all California workers who work for
30 or more days within a year of becoming employed. The law will help employees in
the retail and fast food industry, since those employees often have young children and
often need to take sick time to tend to those children when they are ill.

Overall, as of July 2015, California, Connecticut, Massachusetts, and the District of
Columbia, as well as at least 18 cities, have laws mandating paid sick days.6

Case Questions

1. Is sick time part of paid time off benefits?

2. Do you believe that employees abuse
sick leave by using a “use it or lose it”
approach?

3. Does having a sick leave policy help
reduce overall stress?

4. Why doesn’t a national sick leave law
exist?

5. Does the company you (or your relative)
work for have a sick leave policy? If so,
what is that policy?

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Chapter 13 • Employee Benefits 69

Notes

1. Ponder, Crissinda, “Will Company Health Plans Drop Spouses?” Bankrate.com, http://www
.bankrate.com/finance/insurance/employer-health-plans-drop-spouses.aspx.

2. Greenhouse, Steven, “U.P.S. to End Health Benefits for Spouses of Some Workers,” New York
Times, August 21, 2013.

3. United States Department of Labor, “Work Hours: Sick Leave,” http://www.dol.gov/dol/topic/
workhours/sickleave.htm.

4. Zullo, Robert, “Pittsburgh Council to Introduce Paid Sick-Leave Legislation,” Pittsburgh Post-
Gazette, July 6, 2015, http://www.post-gazette.com/local/2015/07/06/Council-to-introduce-
paid-sick-leave-legislation/stories/201507030268.

5. http://smcattorneys.com/employment-law-update-massachusetts-sick-leave-law/.
6. Karol, Gabrielle, “California Paid Sick Leave Act Goes Into Effect July 1,” USA Today Network,

June 30, 2015.

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3 6

7
Training, Learning,

Talent Management,
and Development

Case 7.1. The Need for Training and
Development: Should You Use Massive
Open Online Courses (MOOCs) Such as Coursera
and Udacity to Recruit and Retain Talent?
Juan Salmeron graduated from Small-Town College two years ago and was excited
to land a job in customer service with AT&T. He rose quickly in stature at the local
AT&T office and became the go-to guy when someone needed to understand some
new technology.

After 2 years, Juan figured he was marketable and wanted to see if he could land a
larger position with another firm. He worked hard on his résumé, cover letter, refer-
ences, and copies of his college transcripts.

Juan interviewed well at California Mutual Insurance (CMI), and his dreams came
true! Juan was hired as a corporate trainer. His job responsibility was to teach the
insurance employees at CMI about how to use the latest technology to improve their
own performance on the job.

Thus, Juan had to develop a process to help teach the insurance employees about
technology in the workplace. The obvious option was to actually hold courses at
CMI’s headquarters. Realistically, Juan could offer two or three courses a week. But
each employee would have to leave desk and job duties to attend the face-to-face (F2F)
training courses.

Juan could also try to hire experts in technology topics, and they could then
develop a course to train the insurance employees. However, this would require extra
financial costs to hire the expert and videotape the lectures. Juan could also decide to
hold courses in a synchronous or asynchronous distance learning format. Synchronous

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Chapter 7 • Training, Learning, Talent Management, and Development 3 7

distance learning occurs when the trainer/teacher and his employees/pupils interact in
different places, but during the same time. Thus, students and the trainer might select
Tuesday night as the time when they hold the training class. The trainer could be on
his or her laptop computer at home, and the employees could access their training
course at night. On Tuesday night, there would be a specific class where the trainer
and all the students would meet online and discuss the material to learn. Synchronous
learning would require the trainer and employee to meet at a specific time.

Asynchronous distance learning occurs when the trainer and the employee interact
at different times. Students enrolled in an asynchronous course are able to complete
their work within a certain time period. Thus the employee would access the learning
site within a time period such as one week. The employee would review the material,
watch videos, and take any exams, as necessary. Thus, the trainer and employee would
have more freedom to complete assignments within a pre-established time period.

As a third option, Juan could use massive open online courses (MOOCs) offered by
online providers such as Coursera and Udacity. MOOCs are free online courses offered
by experts at no cost. MOOC course topics range from law, education, engineering,
management, and all areas of technology. As Coursera explains: “Coursera is an edu-
cation platform that partners with top universities and organizations worldwide, to
offer courses online for anyone to take, for free. Learners can choose from hundreds
of courses created by the world’s top educational institutions. Courses are open to
anyone, and learning is free.”1

For example, Juan could encourage his employees to take a course on Gamification.
Gamification is a course offered at the University of Pennsylvania, through Coursera,
and taught by Associate Professor Kevin Werbach from The Wharton School of
Business. The initial section of the course had 80,000 students followed by a section
of 63,000 students.2

Gamification is taught in four to eight weekly modules and is offered in different
languages. Gamification is the adaptation of digital game technology applied to human
resource and other business issues. Thus, Juan’s employees could learn to develop a
game, whereby their customers are rewarded points or in-game rewards for checking
their insurance policies, investment accounts, and so forth on a regular basis. The
goal is to make “the game” addictive so that customers check their own accounts on a
more regular basis. The idea is to simulate games such as Angry Birds where customers
actually want to check their accounts.

Many people in HR feel MOOCs could be a major part of recruiting, training, and
developing employees with online degree certifications.3 Udacity has a program that
allows employers to review the student résumés. Over 350 large organizations, such
as Facebook, have paid Udacity and Coursera to match them with high performing
students.4

MOOCs can have thousands of students sign up for a course online. Students often
earn a certificate for completing the course. HR departments can also develop their
own certificate or reward for their employees that complete a MOOC. Companies such
as AT&T are using Udacity’s MOOCs to train their employees in new areas of science
and technology. Starbucks offers employees free tuition to participate in Arizona State
University’s online courses.

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Account: s4264928

Part III • Developing and Managing3 8

Case Questions

1. Would Coursera or Udacity be a
viable option for all human resource
departments to train their employees?

2. Would HR be eliminating themselves
from their own job if they use Coursera?

3. Would MOOCs be a good recruiting
method for attracting top talent?

4. Should Juan use a synchronous or
asynchronous training format if he
decides to use a MOOC to train his
employees?

5. What are two advantages and two
disadvantages of gamification of
the HR functions?

Case 7.2. Talent Management and
Development: The Talented Harry Saunders’s
Career Development at the Big Buy Supermarket
Developing talented employees requires planning on the part of human resources.
The career of Harry Saunders is a good example. Harry progressed in his career by
using three options: formal education, experience, and employee assessment.

Harry’s father worked in the marketing department at The Big Buy Supermarket
chain in Florida. With a little help from his father, Harry was able to get a job as a bag-
boy during high school. Harry enjoyed using the cash register since he liked numbers.
Harry also displayed social skills since he liked talking to customers.

After high school, Harry went to college and tried different business majors until
he concentrated on accounting. Harry knew he had knack for numbers, and account-
ing came easy to him. After graduating from college, Harry was offered quite a few
positions to work for local and national accounting firms. At such a firm, he would
go on the road and conduct audits of his clients’ accounting books. He would travel
quite a bit—but he would be well paid and eventually would become a certified public
accountant (CPA).

However, the HR Department at The Big Buy had no desire to lose an employee it
felt had the potential to be a top-level manager. Thus, HR offered him a position in
the accounting department at a competitive salary with the CPA firms. Since Harry
liked working at The Big Buy, and even followed in his father’s footsteps, he accepted
the position.

HR departments are also interested in recruiting people who have completed
MOOCs. They were originally interested in students that completed a science- or
technology-related course. Tech-oriented companies such as Amazon, Facebook, and
Google have paid Udacity and Coursera to match them with their top students.

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Account: s4264928

Chapter 7 • Training, Learning, Talent Management, and Development 3 9

Harry enjoyed organizing the accounting department at The Big Buy for nearly a
decade. The supermarket chain grew to more than 100 stores. Harry felt he needed to
get a graduate degree in marketing to help further his rise in management. The Big
Buy offered 100 percent tuition reimbursement. It took Harry 2 years to complete his
MBA in marketing.

After 20 years in accounting, Harry felt he was tired of running the same old
accounting data. He was not as marketable as he once was because he had never
become a CPA. He also missed working directly with customers.

Thus, Harry contacted HR, and they worked closely with him to find a new spot
in the organization. Harry took a psychological test, which is a series of multiple choice
questions about what motivated Harry in a work environment. The test results indi-
cated Harry was equally happy working with data and people.

Harry was promoted to the new position of database marketing manager. In that
position, Harry would work with large amounts of sales data that were being generated
by the computer systems at the 100-plus stores Big Buy owned. Harry’s job would be to
analyze sales data to find products that were selling unusually well or poorly at each
of the stores. Harry hired two young computer science majors to run the computer
programs, sort the data, and help Harry make a weekly presentation to senior manage-
ment about the results of the data.

Harry felt a strong resurgence in his career. He was thrilled to be working with cus-
tomers again. He often visited stores to ask customers about various food items. He felt
this boots-on-the-ground strategy would help him to better understand the overall
sales data produced by his two employees back in the home office.

Harry became a popular speaker at supermarket conferences, as mining the data
from large computer systems was an increasingly important task for all supermarket
chains. Harry used his mathematical skills honed by a decade in accounting to under-
stand the trends in food shopping. Harry was the first person to create a grocery store
customer loyalty card, where shoppers paid $20 a year for the right to get lower prices
on selected products. The idea of shoppers paying for a membership to buy groceries
at a traditional supermarket was unheard of at the time Harry tested the idea. The
result was that the customers of The Big Buy loved paying for the card so they would
get lower prices on selected items throughout the store. Harry and his team could
better track customer purchases and buying habits because shoppers were using their
Big Buy card.

Harry took a few quiet moments to review his career by using the four stages of
career development: Exploration, Establishment, Maintenance, and Disengagement.
He felt fortunate to have started his career in the exploration stage by considering
different job opportunities after he finished college. He experienced the establish-
ment stage in his career by working in the accounting department for what felt
like a long time—20 years. He feels refreshed to have transferred to marketing and
has found the whole process of tracking customers a great part of the maintenance
stage in his continued career at The Big Buy. Harry also felt he was in no rush to
disengage from the company anytime in the near future. With the full support of
his wife, Harry plans on working at The Big Buy instead of taking any type of early
retirement offer.

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AN: 1945902 ; David Kimball.; Cases in Human Resource Management
Account: s4264928

Part III • Developing and Managing4 0

Case Questions

1. How did Harry and HR use formal
education to further his career?

2. How did employee assessment help
Harry to advance?

3. Explain how Harry went through
the career stages of Exploration,
Establishment, Maintenance, and
Disengagement.

4. What are some of the individual
and organizational consequences

that occurred as a result of the
organizational career planning process
at Big Buy?

5. Why did Harry’s attitude and
performance dramatically change after
changing from the accounting to the
marketing department?

Notes

1. https://www.coursera.org/about/.
2. McWilliams, Julie, “Coursera at Penn Surpasses One Million Enrollees,” Penn Current, May 9,

2013.

3. Quinn, Jody, “Mining the MOOC: HR Looks to Online to Recruit and Train Employees,”
Skilled Up.com, August 25, 2014.

4. Wheeler, Kevin, “Why MOOC’s Might Change Your Recruiting Methods,” ERE Media, March 4,
2014.

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Account: s4264928

41

8
Performance Management

and Appraisal

Case 8.1. Why Do We
Conduct Performance Appraisals?
Jennee LeBeau and the Case of the
Missing Performance Appraisal System
Jennee LeBeau was very excited to be hired as the director of human resources at
Sunshine Hotels. Her office was located at the Main Island Hotel. Jennee spent her
first year at Sunshine Hotels getting used to the processes used by HR. She spent most
of her time in her office at Main Island Hotels. She didn’t get to visit the other two
Sunshine Hotels very often. Jennee’s employees in HR like her hands-off supervisory
style. However, they also feel she would be an even better supervisor if she left her
office and interacted with the employees more often.

Jennee had spent the last 7 years as the assistant director of human resources for
a chain of 10 fast-food restaurants. She figured being in charge of HR for a growing
chain of three hotels would be similar to her experiences working in the fast-food
industry.

While working in her office, she noticed Sunshine Hotels didn’t conduct perfor-
mance appraisals. Jennee thought performance appraisals (PA) were a common pro-
cess in all companies. She was quite shocked at finding such a review process was not
in place at Sunshine Hotels since they have nearly 30 employees. She decided the hotel
chain was not overly concerned with evaluating employees in their first two hotels
since the employees were mostly family and friends. But the addition of a third hotel
has forced the Sunshine Hotel owners to create more HR policies, rules, and forms to
make sure they are following all the laws of HR.

Jennee did some research and found that a performance appraisal is an ongoing
process of evaluating employee performance. However, it is also a tool of the large

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Account: s4264928

Part III • Developing and Managing4 2

process of having a performance management system, which is the process of identify-
ing, measuring, managing, and developing the performance of the human resources
in an organization. Thus, a PA is really a mechanism to help evaluate employees so
they can develop into larger roles and to ensure the success of the company going into
the future.

The good news is that Jennee figured out she could start from scratch and develop
her own performance management system (PMS). She figured she could set up an
entirely new PMS. PAs of individuals could be part of an ongoing process of evaluating
employees.

Jennee has to decide what will be included in her new PMS. She wants the PA to
collect valid information. That means what she measures must be true and correct. She
wants to be sure to measure the performance process. Although Jennee wants to col-
lect valid information, she also has to be concerned that the process isn’t overly long
or costly. She figures she can keep costs lower by emailing the PA to each employee to
reduce mailing costs. She also wanted to use a multiple choice style PA so she could
easily quantify the results.

The PA also has to be reliable. She has to trust that the performance data collected
are consistent and that the PA works the same each time she uses it.

Jennee wants the employees to accept the process as important to their own career
development. Acceptability means that the use of PA is satisfactory or appropriate to
the employees that will use the PA to improve their work performance.

Jennee also wants to develop a process that would not be overly expensive or time
consuming to implement. If the PA is overly long to complete, then the manager and
employee will not use the PA as a tool to improve performance.

The PA has to be specific about an employee’s job performance so that it is a useful
instrument for improving areas that need development for that specific employee.

Another important goal is the PA has to help achieve the mission and goals of
Sunshine Hotels. Completing the PA process should help employees better understand
what Sunshine expects from them and how they can complete their own job to help
the company fulfill its mission.

Jennee is starting to realize that she has walked into a very large project in design-
ing a PMS from scratch. She is starting to realize she will need to organize a committee
to help develop the process, especially the PA form. In answering her own questions,
she realized she will be putting together a PA that Sunshine employees will be using
for the first time. Employees currently receive a straight raise across the board. If the
owners of Sunshine Hotels determine everyone deserves a 3 percent raise, then all
employees get the raise irrespective of their own work performance. A new perfor-
mance management system and performance appraisal process will most likely make
it easier to administer raises based on the rating each employee receives as part of the
process. However, the employees might prefer the across-the-board raises rather than
having to personally earn their raises.

Jennee decided to create a first draft of her performance appraisal form. She can
show this draft to her committee. The following is Jennee’s performance appraisal:

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Account: s4264928

Chapter 8 • Performance Management and Appraisal 4 3

PERFORMANCE APPRAISAL FORM

NAME:

HOTEL:

DEPARTMENT and JOB TITLE:

DATE OF APPRAISAL:

FROM: TO:

Employee Signature

Employer Signature

Exceptional Successful
Needs

Improvement Unsatisfactory

Demonstrates
Required Job
Knowledge

Quality of Work
& Productivity

Makes Effective
Decisions

Builds and
Maintains
Relationships
With Others

Communicates
Effectively

Exhibits
Supervisory
Abilities

Overall
Performance
Appraisal Plan
of Action

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Account: s4264928

Part III • Developing and Managing4 4

Case Questions

1. What is the real goal(s) of a performance
appraisal?

2. How can Jennee be sure to collect
valid and reliable data with her new
performance system?

3. How can Jennee get the employees to
accept the process as important to their
own career development?

4. Can Jennee develop a process that is
not overly expensive to conduct with
employees?

5. Complete the performance appraisal
form in the case using Jennee
LeBeau as the employee you are
rating. Assume you are Patrick Staal,
who is the chief financial officer (CFO)
who is rating Jennee’s first year of
performance.

EMPLOYEE PERFORMANCE APPRAISAL FORM

NAME: Jennee LeBeau

HOTEL: Main Island

DEPARTMENT & JOB TITLE: Director of Human Resources

DATE OF APPRAISAL:

FROM: January 1, 2016 TO: December 31, 2016

Employee Signature: Jennee LeBeau

Supervisor Signature: Patrick Staal

Exceptional Successful
Needs

Improvement Unsatisfactory

Demonstrates
Required Job
Knowledge

X

Quality of Work
& Productivity

X

Makes
Effective
Decisions

X

Builds &
Maintains
Relationships
With Others

X

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Account: s4264928

Chapter 8 • Performance Management and Appraisal 4 5

Exceptional Successful
Needs

Improvement Unsatisfactory

Communicates
Effectively

X

Exhibits
Supervisory
Abilities

X

Overall
Performance
Appraisal Plan
of Action

Jennee
LeBeau has
been the
Director
of Human
Resources
for the
last year.
She has
excellent
knowledge
of the
human
resource
concerns at
Main Island
Hotel.

As the
Director of
HR. Jennee
is well liked.
However,
there is
room for
improvement
since she
spends most
of the time in
her office.

Jennee
needs to
develop better
social skills.
Developing
better social
skills will
help her to
improve her
communication
and
supervisory
abilities.

Jennee will
participate in
team building
sessions to
improve her
communication
and
supervisory
skills.

Case 8.2. Performance Appraisal Problems:
The Trouble With Performance Systems
It is unfortunate that employees fear their performance appraisal since the goal of
a performance management system is to help employees develop. However, sitting
across a table from your manager and discussing your performance record is most
likely going to be a high-stress situation.

Janice Flahive didn’t look forward to her performance appraisal. As an advertising
salesperson for her local newspaper, the Miami News, it was Janice’s job to sell adver-
tising space in the newspaper. Her performance was mainly based upon how much ad
space she sold. Janice felt she should have also been evaluated on customer satisfac-
tion, creating new accounts, or developing relationships with prospective businesses
that could lead to future sales opportunities. Instead, Janice’s performance appraisals
usually ended up being a one-way communication process where her employer criti-
cized her for not selling enough advertising space.

The PMS process is full of potential problems if it is not administered properly.
Many of these problems occur because managers are not properly trained to administer

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Part III • Developing and Managing4 6

a performance management system. The lack of training can lead to “rating errors,”
where one manager grades employees easier than a fellow manager who is a tougher
grader. The result of inconsistent grading can lead to star employees receiving the
same grades as weaker employees.

Poorly trained managers do not provide continuous feedback to their employ-
ees. Feedback is provided only during the performance appraisal meeting. Managers
need to provide performance feedback more often and document their interactions
with the employee. It cannot be stressed enough that managers need to document,
document, and collect even more documentation on each employee under their
supervision. Documentation is needed to support strong employees for raises and pro-
motions. Even more important, documentation is critical if an employee needs to be
reprimanded or fired as a result of the performance appraisal.

Much in the manner of Janice’s experience, performance appraisals often fail to
critique the employee in all areas of performance. Janice’s job is in sales, which makes
it easier to evaluate her in that area since sales can be quantified—she either makes her
sales quota or she doesn’t. However, Janice still deserves to be evaluated on qualitative
areas such as customer service skills or leadership ability, which are often not able to
be quantified.

Janice’s performance appraisals should help her to develop into a better salesper-
son and potential management leader. It appears that Janice’s performance appraisal
is a meeting that tends to discuss her past performance. Instead, the meeting should
help Janice to develop a performance plan with specific goals for the coming year.

One of the more controversial rating systems is the ranking method. Ranking is a
performance appraisal method that is used to evaluate employees from best to worst.
At the Miami News, Janice’s office is evaluated using the ranking system. Since the
rank order is posted in the office, Janice knows she is currently seventh on the list of
10 employees. The list is as follows as it is displayed outside the human resources office:

1. Samuel Garcia

2. Rosa McGowan

3. Meghan Shotland

4. Albert Smithfield

5. Jerry Jones

6. Samantha Barron

7. Janice Flahive

8. Karreem Rush

9. Monique Wayne

10. Sarah Badlementi

Janice is concerned that her company will decide to keep the top three star employees,
try to develop the next three employees, and try to lay off the bottom four employees.

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Chapter 8 • Performance Management and Appraisal 47

Although there are many potential problems with a PMS that is not well organized,
such a system is still very much needed in all organizations. Dr. Samuel Culbert, pro-
fessor of management from UCLA, does not believe in the performance review; he
supports a performance preview. This would be where Janice and her manager would sit
down and together discuss how they can each help improve her overall performance.
Janice can write “I” statements such as, “I will increase the amount of time I spend
actually selling my products.” Or, her employer might say, “I will check in with Janice
on a monthly basis, instead of every six months.”1

Another option for improving the performance appraisal system is to develop a
team of people to review the employee. The traditional method is for the direct super-
visor to evaluate his or her own employee. However, a more comprehensive 360-degree
evaluation will analyze individual performance from many sides—from the supervi-
sor’s viewpoint, from subordinates’ viewpoints, from the customers’ viewpoints, from
peers’ viewpoints, and from a self-evaluation. Unfortunately, it will take extra time
and money to collect data from all the different people who would be involved in
that type of evaluation. However, the 360-degree evaluation might be worth the time
and effort to help the employee develop under the guidance of multiple stakeholders
instead of just the supervisor’s.

Case Questions

1. Why are there problems with most
performance management systems?

2. What is the potential problem with a
performance review conducted by a
team of managers?

3. Why is an “I” statement a good method
for developing a positive PA?

4. What are the positive and negative
aspects of using a ranking method at
Janice’s office at the Miami News?

5. What type of PA do you or did you have in
the company you work or worked for?

Note

1. Culbert, Samuel A., “Get Rid of the Performance Review! It Destroys Morale, Kills Teamwork
and Hurts the Bottom Line. And That’s Just for Starters,” Wall Street Journal, October 20,
2008.

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5 3

10
Employee and

Labor Relations

Case 10.1. Unions and
Labor Rights: Can Labor Unions
and Management Work Together?
Candice works in the human resources department for Familia Wireless, which is
a small chain of stores selling cellular wireless phones and a service center. Familia
employees are not unionized at this time. However, employees are unhappy with
salary, benefits, and the fact that the store is open until 1 a.m. to attract the nighttime
club crowd.

Candice previously worked for the Paper Coating Company (PCC), which manu-
factured paper coating adhesives. This type of paper is often used in greeting cards.
PCC was a unionized company. The employees voted in the IBEW (International
Brotherhood of Electrical Workers) to represent their 500 employees. The manage-
ment team at PCC then had to bargain with the union on hours, wages, vacation time,
insurance, and safety practices.1

Thus, Candice had the opportunity to observe one company that had a unionized
workforce and one company that did not have to worry about bargaining with a union.

She noted that employees at PCC had to pay dues to be in the union. The only way
for the union to survive is to have its members pay some of their wages (dues) to the
union to cover union expenses. Thus, not having a union or dues at Familia Wireless
helps employees save money.

On the other hand, she did notice that employees at PCC were threatened with
discharge or layoff and that the union fought to protect their jobs. So, it was nice to
have union representation when management thought a worker’s job performance
was not up to standards.

Still, Candice thought the key to deciding to have a union shop was based on the
quality of the management team. If there was a good management team in place at
your company, then you wouldn’t need union representation. You were already being
treated and compensated fairly.

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AN: 1945902 ; David Kimball.; Cases in Human Resource Management
Account: s4264928.main.eds

Part III • Developing and Managing5 4

However, if the management team was unfair in providing the correct wages, ben-
efits, and working conditions, then a union was a good idea since it could bargain for
improvement in these areas.

Candice felt she had a unique view from her spot in HR in both companies. She
found that employees of PCC didn’t really mind their union dues since the money was
automatically deducted from their paycheck. Of course, employees knew (or should
have known) they were paying union dues.

Candice worried that if PCC decided to close the company the union would not
be overly helpful. She assumed PCC would give the employees the 60 days’ notice
required by the Worker Adjustment and Retraining Notification Act (WARN). PCC
could also offer job retraining at the local community college. But, when PCC wanted
to close the company, there wasn’t much the union really could do to help employees.
Candice’s father was an IBEW union member because he worked for AT&T. When
AT&T wanted to close his AT&T office in Springfield, Massachusetts, and consoli-
date offices into a single location in Utah, he was asked to move to Utah or have his
employment terminated.

Candice had always heard of violent times in the history of management and
unions. Just recently, Candice had heard of Verizon employees who went on strike
in 2011 when Verizon tried to freeze pensions for current workers, offer fewer sick
days, and put an end to all job security provisions. A major area of concern for the
employees was the difference in unionization in the economy; unionization is high
in the old landline corded telephone business, but the new wireless cellular business
is mostly nonunionized. Employees went on strike for 2 weeks, and many deeply felt
the loss of their paychecks during the difficult economy. Verizon, however, received a
bad reputation because service was hindered for those 2 weeks.2

Chapter Questions

1. What law requires companies to provide
employees 60 days’ notice if they are
going to close?

2. Why would employees want to pay dues
to have a union?

3. Do employees need a union if the
management team is qualified to do a
good job on its own?

4. What is the role of human resources
if a company does have a union?

5. Do you think Familia Wireless will
unionize?

Case 10.2. Managing Conflicts:
How Can HR Help With Angry Employees?
Unfortunately, when two or more people work together for long periods of time, some
level of conflict will emerge. Functional conflict is a level of conflict that actually helps

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Chapter 10 • Employee and Labor Relations 5 5

each employee improve his or her overall performance. However, finding this bene-
ficial level is not an easy task. Too little conflict, and employees can become compla-
cent. Too high levels of conflict can create dysfunction that interferes with workplace
performance. A good manager will learn to tweak the office atmosphere to find the
proper level of conflict.

During times of conflict, a good manager will also find the conflict management
style that works for him or her or will change styles based upon the type of conflict.
At times the manager might use an avoiding, accommodating, forcing, negotiating,
or collaborative conflict management style. Avoiding a conflict is a passive style and
often leads to lose-lose situations since both sides lose when resolution of the conflict
is not likely. An accommodating conflict style means you passively let the other side
win the conflict and implement its solution. A forcing conflict style uses aggressive
behavior, such as authority, to threaten, intimidate, and call for majority rule when
you know you have the vote in your favor. Negotiating requires finding a compromise
that attempts to resolve the conflict through a give-and-take of the issues involved
until a solution is found. Last, a collaborative style requires working with the other
party in the conflict and finding an acceptable solution.

Unfortunately, managers will find it difficult to keep dysfunctional conflict from
entering their workplace. Brian Hoffman started his own appliance store designed to
provide builders with washers, dryers, refrigerators, and other appliances for a newly
built homes. His business grew to include selling appliances to the consumer market
through 10 retail outlets. Brian worked out of the main headquarters in Windsor. The
human resources, accounting, and marketing departments were also placed at the
headquarters.

Brian heard that two workers in his West Hampton store were arguing on the retail
floor in front of customers. He sent two HR employees to investigate the problem. It
turned out that the two employees had a long-standing problem about who would
receive customers as they entered the store. Since the retail employees worked on
commission, they both wanted to help customers and fought for them as they entered
the store. This was obviously an aggressive form of conflict that was resulting in You
Lose, I Win.

Brian asked his HR department to develop a program with which too high a level
of conflict could be resolved. Avoiding the problem did not seem like a good solution
since the problem was occurring at the point of greeting and helping customers. He
also didn’t want to force a solution onto the two employees. Ultimately, he wanted to
develop a collaborative solution where both parties would like the outcome.

HR decided to look at compensation solutions within a similar setting—selling
automobiles. As a growing appliance supplier, Brian’s company needed to establish
some rules and policies that weren’t needed when it was a small business. HR found
that car dealerships used a rotating process when customers arrived. Each salesper-
son would take the next customer as he or she arrived. If more customers arrived at
once than could be handled, then all sales personnel would do their best to handle
the overflow evenly.

HR also advised Brian to review the compensation system. A compensation sys-
tem based on salary instead of commission would also lessen the rivalry between
salespeople.

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Part III • Developing and Managing5 6

Fortunately, the new method of greeting customers was accepted by all retail floor
salespeople. The new compensation system based on salary versus commission was
being further evaluated.

Brian was satisfied with the results in the employee conflict situation. However,
he was concerned about future conflict situations. For example, it was becoming
more likely that his growing business would have to discharge employees for not
performing up to expectations. Was HR up to the task of processing employees out
of the company? Would those employees become violent? HR plays a support role in
these serious conflicts: HR can help improve communication between the manager
and the employee. HR can be a witness to the confrontation between the two parties.
HR can help the employee calm down and return peacefully to the job while looking
into the issue. Otherwise, HR can call security or police to help control the disturbed
employee.3

Brian asked HR to create a program to reduce workplace stress. He wanted to avoid
high-level conflict situations before they occurred. Brian also had the realization
that his little business was no longer little. There were employees in his business
he had never met. While he was busy selling and ordering appliances, HR was busy
hiring new employees. He decided to spend more time with HR before he built any
new retail sites.

Case Questions

1. Is all conflict bad?

2. What would be the difference between a
forcing style and a collaborative style to
resolve a conflict?

3. What is the role of HR in resolving
workplace conflicts among employees?

4. What is the role of HR in cases with a
potentially violent employee?

5. How can HR use the Conflict
Resolution Model?

Notes

1. Rowe, Randy Hicks, “What Challenges Do Unions Pose for Human Resource Manage ment?”
Houston Chronicle: Small Business, http://smallbusiness.chron.com/challenges-unions-pose-
human-resource-management-69221.html.

2. Greenhouse, Steven, “Verizon Workers Plan to End Strike, Agreeing to Revive Talks Toward
a Contract,” The New York Times, August 20, 2011, http://www.nytimes.com/2011/08/21/
technology/verizon-workers-end-strike-though-without-new-contract.html?_r=0.

3. Maurer, Roy, “When and How Should HR Step Into Violent Situations?” Society for Human
Resource Management, May 25, 2015, http://www.shrm.org/hrdisciplines/safetysecurity/
articles/pages/hr-violent-situations.aspx.

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4 8

9
Rights and Employee

Management

Case 9.1. Coaching,
Counseling, and Discipline:
HR’s Role—Document, Document, Document
Andrea Watson works in the small human resources department at ABC Fitness Center.
There are currently about 50 employees working at ABC Fitness. Andrea enjoys the
process of hiring and providing an orientation program for new employees. However,
she does not like the responsibility of firing employees when they do not fit into the
culture at ABC Fitness.

To overcome her own hesitation with firing employees, Andrea reviewed the coach-
ing process, counseling process, progressive discipline process, and the tests for just cause
used in disciplinary investigations. Andrea started to study and implement these pro-
cesses about 2 years ago at ABC Fitness.

ABC Fitness uses the coaching process to give employees feedback to improve their
performance over time. Coaching involves four steps: (1) describing the current perfor-
mance, or what is currently being done by the employee; (2) describing the desired
performance, or what the manager wants the employee to change; (3) getting a verbal
commitment from the employee to change; and (4) following up to make sure the
employee is behaving in the desired manner. Coaching is often associated with sports
coaches such as Mike Krzyzewski at Duke University or Bill Belichick with the New
England Patriots. However, coaching can be just as effective in a business situation
as in sports. Employees in every organization need to receive positive feedback and
support while doing their jobs.

Counseling is provided for employees who are not currently working at an accept-
able level. Guidance is provided to help get the employee back on track. Management
counseling involves giving the employee feedback so he or she knows a problem is
affecting job performance. Employees with severe personal problems can be referred
for help to the employee assistance program (EAP) to get assistance.

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Chapter 9 • Rights and Employee Management 49

Unfortunately, some employees just cannot get their work performance to an
acceptable level. Progressive discipline is then used to try to solve minor disciplinary
infractions. Progressive discipline is a series of steps to help provide discipline:

Step 1. Informal talk

Step 2. Oral warning

Step 3. Written warning

Step 4. Suspensions

Step 5. In some cases, demotion or transfer, or

Step 6. Dismissal

A key element in disciplinary investigations is just cause. Just cause is a set of
standards used to test for fairness in an organizational setting to ensure that any
disciplinary action taken has reasonable cause. The tests attempt to ensure that the
individual knew what the rules were, that there was reasonable evidence or proof that
the person violated or disobeyed the rules, and that, if the rules were violated, the
disciplinary action was appropriate and fair.

Andrea wasn’t sure if all of these processes were conducted in the case of Derek
Struble. Derek was an employee who worked at ABC Fitness for the last 20 years.
He didn’t exhibit the greatest level of enthusiasm with the health center’s fitness
members, but he was also never rude. He assisted fitness members whenever they
needed help.

Andrea reviewed Derek’s file and found he was in a graduate, nonprofit manage-
ment program, which was supported by ABC Fitness since it paid half the tuition.
His file contained limited documentation that Derek was at times not as “cheery” or
“happy” as one might expect at a fitness center. The file mentioned that Derek didn’t
generate enough personal fitness training, which members paid for and which helped
finance the fitness center.

Andrea was fairly sure Derek wasn’t fired due to gross negligence (such as leaving
the fitness members unattended). Nor was he fired due to serious misconduct, such as
hurting another employee or doing harm to the company. Actually, Derek was very
actively trying to recruit new members to the facility.

Thus, Andrea wished she had more documentation that would show that
Derek had been coached, counseled, or had even gone through progressive disci-
pline. She could find in the file only some notes that Derek could be more pleas-
ant and should improve the number of paid training sessions he conducted in the
fitness center.

Andrea was also concerned with the fact that Derek was 39 years old. The Age
Discrimination in Employment Act of 1967 prohibits discrimination against persons
40 years of age or older. Congress found that older workers were disadvantaged in their
efforts to retain employment and especially in regaining employment when released
from a job.1 Since Derek was 39, he was certainly very close to age 40 and could file a
lawsuit against the fitness center.

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Part III • Developing and Managing5 0

Andrea had a meeting scheduled with Derek later in the afternoon. Her major
thought was something her former director of human resources at her last job used to
say, “Document, document, document.”

Case Questions

1. Do you believe Derek received any of the
four steps in the coaching process?

2. Did Derek receive progressive
discipline?

3. Was there just cause to discharge Derek?

4. Would you, from what you know,
discharge Derek?

5. How would the Age Discrimination
in Employment Act of 1967 apply if
Derek was 40 years old?

Case 9.2. Trends and Issues in HRM:
Mindfulness—a Thoughtful Theory About Leadership
Astrubal Gonzalez worked as the food service manager at Big-Time Hospital in New
Haven, Connecticut. Unfortunately, the food at the hospital was viewed as terrible.
Still, since Astrubal’s food service was the only place in the hospital to get food, sales
were stable.

The CEO of the hospital, Jean Curry, wondered how she could improve the qual-
ity of the food in Big-Time Hospital. Her first priority was to create a change process
to help the food service employees who were in denial that their food quality could
be improved. She had to help them forget about the daily grind they had repeated
for years and learn a new way to do their jobs. She had to get past their resistance to
change and help them see that a modern food service operation could lift employee
morale around the hospital.

On the way to work on the train, Jean happened to read about an interesting lead-
ership theory called mindfulness. She thought mindfulness sounded like a process with
which the employees could develop a renewed sense of mission toward delivering bet-
ter food quality and service. She decided to contact human resources about exploring
mindfulness as a way to replace mindlessness.

The human resources department responded by researching mindfulness as soon
as it received the call from the CEO. If Jean Curry called, HR was certainly going to
respond. The first step required defining leadership and mindfulness.

Leadership is the process of influencing employees to work toward the achievement
of organizational objectives. In Jean’s case, she was the leader, and it was her idea that
using mindfulness might be the solution to motivating her food service personnel.

HR found out that mindfulness is an area of leadership study that has become more
popular in the last decade. There are numerous summits and conferences devoted
to teaching the process of mindfulness. Jon Kabat-Zinn, former professor at the
University of Massachusetts Medical School, describes mindfulness as “paying atten-
tion in a particular way: on purpose, in the present moment and non-judgmentally.”2

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Chapter 9 • Rights and Employee Management 51

By comparison, mindlessness refers to our subconscious, out-of-habit, or repe-
titious actions, placing limitations on what we can accomplish. A mindless worker
would rather continue the same steps and procedures used in the past at work.

Mindfulness enables employees to be fully aware of their mind, body, and spirit.
Mindful people are fully aware of what is happening around them. A mindful employee
has a high level of self-confidence, which gives the employee the belief that failures and
challenges can be overcome. Mindful people can visualize great change instead of plac-
ing limitations on what they can do to lead the organization.3

A mindful manager can lead the employees to reach higher levels of success. But
to do this, the mindful manager needs to learn to be compassionate, more self-confi-
dent, and an authentic leader. Recent organizations to embrace mindfulness include
Google, Harvard Business Schools, and the Seattle Seahawks football team in the NFL.4

Employees would most likely find it easier to enjoy mindlessness on a regular day
at work. However, an organization needs to strive for mindfulness every day at work to
help develop a company culture of innovation and creativity. Mindful employees look
for new ways to solve problems. To help develop mindful employees, HR needs to set the
standard by offering training on leadership concepts such as the benefits of mindfulness.
HR and managers in the different divisions can work together to model the behavior of
being mindful so that employees can learn to bounce back from failure, learn to be more
confident, and thus be actively aware of their surroundings at work and in their industry.

Jean decided she was going to also have to learn to use mindfulness if she expected
to have such a culture exist at her hospital. She had to exhibit behaviors that showed
she was innovative and creative. She wanted to be a leader who embraced everything
at work and shared the success with her employees.

After a series of training sessions led by HR, the food service personnel started to
feel more self-confident about their jobs. They were encouraged and wanted to cook
more creative lunch and dinner options. They were excited to see which new food
options were well received by the employees of the hospital. When a food item was
not well received, they didn’t get disappointed as they would have in the past. They
just used that experience as a learning situation. Their self-confidence and creativity
were evident in the variety of food they offered and the upbeat customer service
provided to their customers.

Jean was so excited about the results of implementing mindfulness that she was ready
to spread the leadership theory throughout the entire Big-Time Hospital organization.

Case Questions
1. How does mindfulness compare to

situational leadership?

2. How does mindfulness compare to the
definition of leadership?

3. What are some ideas about how human
resources can teach employees to be
more mindful?

4. Do you think Astrubal will find it easy
or difficult to become a mindful leader?

5. After mindful training, what could
Astrubal do to show he is a more
mindful manager?

6. How did Jean use the stages of the
change process?

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Part III • Developing and Managing5 2

Notes

1. http://www.eeoc.gov/laws/statutes/adea.cfm.
2. Garms, Erica, “Practicing Mindful Leadership,” Association for Talent Development, March 8,

2013, https://www.td.org/Publications/Magazines/TD/TD-Archive/2013/03/Practicing-Mindful-
Leadership.

3. Moua, Mia, “Mindfulness and Self-Efficacy,” Leading With Cultural Intelligence, http://catalog.
flatworldknowledge.com/bookhub/reader/5575?e=moua_1.0-ch04#moua_1.0-ch05_s04.

4. http://www.mindfulleader.org/#home.

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7 2

14
Workplace Safety,

Health, and Security

Case 14.1. Building a Human
Resources Information System While
Protecting Health Information From Cyber Attacks
Kendra Lewis was hired right out of college to support the human resources staff at
an insurance company in Orange County, California. It took Kendra about a year
to become familiar with all the paper forms that were completed by the employees
of the insurance company. One day her boss, Sam Cooke, told her they were going
to develop a Human Resources Information System (HRIS). Sam had very little idea
what was involved in an HRIS; he had only heard about the concept at a conference
that he recently attended. So Sam told Kendra to research what was involved in
such a system.

Kendra found that the age of technology had created the need to create an HRIS to
effectively coordinate everything related to human resources. A modern HRIS would
be a software solution that would create a database whereby her human resource
department could collect employee information; would create reports and analy-
ses about employee information; would store company-related documents, such as
employee handbooks; would track applications and résumés for open positions; and
would complete integration with payroll and other company financial software and
accounting systems so that employees would be paid properly.1 A modern HRIS con-
tains information about which benefits an employee selects; status changes, such as
promotions at work; and personal information.

To help track applicants and résumés for open positions, a modern HRIS automates
the application process by providing a standard application to candidates by way of
the Internet. The application and other related documents from the applicant can
then be stored on the HRIS. The search committee filling the open position can then
review applications online, using a company’s Intranet system. Search members can
use keyword searches to provide the HR manager with a first cut of suitable applicants
for a specific job.

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Chapter 14 • Workplace Safety, Health, and Security 7 3

The amount of information flowing through an HRIS regarding protected health
information (PHI) is increasing rapidly. Since Kendra’s insurance company is growing
rapidly, the data will grow accordingly given that the number of employees and their
dependents who apply for health care will increase on the company payroll.

Employee privacy regarding health insurance is an important issue when develop-
ing an HRIS. Human resource professionals like Kendra will need to be trained in the
Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Security
and Breach Notification Rules. As defined by the Office of Civil Rights, the HIPPA
Privacy Rule protects the privacy of individually identifiable health information. The
HIPAA Security Rule sets national standards for the security of electronically pro-
tected health information. The HIPAA Breach Notification Rule requires notification
following a breach of unsecured protected health information.2 Since Kendra and the
other HR office personnel will have electronic access to all employee information, the
need for following the rules of HIPPA will be increased, since it can be much harder to
protect electronic files than a paper file.

HR professionals need to understand that the protected health information (PHI)
entrusted to them is to be confidential at all times. Cautious employees are good
employees to hire in a human resource department. The need for trusted and confi-
dential employees in HR is critical.

HR should conduct a risk assessment to start the process of protecting the PHI.
The assessment can include protective measures already in place and those that are
missing. Part of the assessment must include an assessment of third-party suppliers,
such as the company that produces the employee checks or the company hired to be
the expert at managing the employer-sponsored health-care and retirement programs.
Kendra’s company uses BBG Health Service Provider to develop the company health-
care program and collect all employee funds related to health insurance. Kendra’s
company also uses Deluxe Check Writing Services to produce employee checks.
Deluxe and BBG are two examples of very important third-party suppliers to the
human resources department. Providers such as Deluxe and BBG must ensure the
safety of the employee data they use while providing their services.

Kendra found that an HRIS will require many high-tech solutions, such as soft-
ware selection and updates. Cyber security is the use of tools and processes to protect
organizational computer systems and networks. Professional and amateur hackers,
terrorist organizations, and even some governments are working to break into com-
pany computer systems for a variety of reasons. In 2015, two major breaches of U.S.
government databases holding personnel records and security-clearance files exposed
sensitive information of at least 22.1 million people. Exposed personal information
was hacked about federal employees, contractors, their families, and friends. U.S. offi-
cials have privately said that the intrusions were traced to the Chinese government.3

Although many high-tech solutions will be needed to safeguard employee data,
some simple solutions such as strong passwords and changing passwords on a regular
basis can help protect the HRIS and PHI. Employees and HR professionals can also be
careful not to leave unsecured laptops with employee data in unlocked areas.

Overall, an HRIS will allow the company to reduce its own paper needs, save time,
reduce stress, and create a more efficient process of helping employees with their sal-
ary and benefits. Kendra proposed to her boss that a committee should be formed so
that the system reflects the needs of all the stakeholders of the organization.

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Part V • Protecting and Expanding Organizational Reach74

Case Questions

1. What are the goals of a human
resources information system?

2. In comparison, what is the goal of
protected health information?

3. Why do HR professionals need
HIPPA training?

4. Why are third-party suppliers a
potential security risk?

5. What are some simple solutions
to help reduce cyber attacks
on PHI?

6. Who should Kendra consider to
be members on the committee
to develop the HRIS?

Case 14.2. Trends and Issues in HRM:
Future Trends in Human Resource Management
Past issues related to HRM will always be important to the future issues in HRM.
Topics such as legal issues involving the rights of employees, recruiting employees,
matching employees with jobs that fit their skill set, selecting employees, develop-
ing and training employees, evaluating the performance of employees, compensating
employees, providing employee health-care and retirement benefits, and developing
an HRIS to maintain all that information will all need to continue to improve. A grow-
ing area of importance to HR is providing workplace safety. Workplace safety is an
area that is of great concern; we want our employees to feel secure while performing
their jobs. We also want to make sure our employees are healthy so they can perform
their jobs and enjoy their lives.

From an HRM perspective, the goal might be to become a more powerful player
in the management of the organization. HR would like to be consulted on strategic
issues that are often associated with the finance or marketing areas. However, in
most companies, HR will always be considered a staff area as compared to the more
active line areas, such as marketing or finance. Still, with the increased diversity of
our workforce and the changes needed in employee skills, HR will certainly be a very
busy area of a company.

HR will be busy with topics such as how to incorporate technology into its func-
tions, how to analyze employee data produced by technology to help make HR
decisions, how to use social media to find talented employees, how to increase our
understanding of how diversity impacts our workforce, and how to address gener-
ational issues in the workplace caused by having up to five generations of people
working together.

These issues will certainly impact HR functions at all organizations. Prospective
employees will use social media (such as LinkedIn and Facebook) to find job openings.

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Chapter 14 • Workplace Safety, Health, and Security 7 5

Prospects will use social networks to develop relationships and a network of people to
help find job matches.

Prospective employees will have to be persistent in their search to find the com-
pany that is a good match. Employers will find it hard to stay competitive in their
industries as technology changes the workplace. For example, Hallmark Cards in
Enfield, Connecticut, will lay off 570 employees in 2016 and move its distribution
center to a single location in Liberty, Missouri.4 Only 400 employees were offered
in Missouri. Human resources will have to be involved in processing the employees
either to work in Missouri, to be retrained to work in a new industry, to prepare for an
early retirement, or to be helped through the unemployment process.

People will have to acquire skills that are needed by employers. Increasingly, com-
panies will contract out to training organizations that specifically train employees in
skills such as computer programming. People will often train themselves for free by
completing massive open online courses (MOOCs) to learn specific skills. The millen-
nial group will use their desire to learn and use technology to enter companies at the
same time as baby boomers exit companies and head into retirement.

The development of HRIS using massive computer power will increasingly replace
the paperwork typically associated with human resources. The only way to avoid
being eliminated by the computer revolution is to join it by making sure each one of
us is computer educated in our own career.

A great concern is the safety, health, and security of our workers while on the job.
The following workplace incidents, unfortunately, occurred with the past few months
of writing this text. A newscaster and her cameraman were killed by a bitter ex-televi-
sion reporter 2 years after he was fired.5 A student killed nine people when he attacked
a building at Umpqua Community College in Roseburg, Oregon.6 Fourteen people
were killed and 22 injured in a workplace massacre at the Inland Regional Center in
San Bernardino, California.7

People can become aware of workplace safety issues much faster than in the past.
The popularity of social media sites, such as Facebook and Twitter, have allowed peo-
ple to be aware of situations while they are happening. Social media can assist com-
panies in dealing with a situation where employees need information quickly and
accurately. Alert systems can provide immediate warnings to all people signed up to
receive alerts.

Violence in the workplace requires HRM to be proactive and to have policies and
procedures in place in case a violent situation does occur. A written policy addressing
workplace violence is the best preventive policy. It is important for HR people to take
action quickly and to address any individuals at work who show potential violent
behaviors and actions.

Organizations need to have a formal grievance process at work to allow frustrated
employees to air their complaints. The process will take time to develop, and it most
likely will involve many steps, since a well-written policy makes sure the employee
meets with all parties involved before reaching a formal grievance hearing. Demotions,
firing, and layoffs need to be handled in a professional manner and in all cases should
include helping the employee find a new place of employment that might be a better
fit for his or her talents.

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Part V • Protecting and Expanding Organizational Reach76

Case Questions

1. Will HR become more, less, or stay the
same in regard to its importance within
companies?

2. What is the role of technology in the
future of human resources?

3. What are some areas of HR that will be
important in the future of HR?

4. What other areas of HR do you
envision as being important in the
future of HR?

5. Research workplace violence that
has happened in your own local area
within the last year.

Notes

1. http://humanresources.about.com/od/glossaryh/a/hris.htm.
2. http://www.hhs.gov/ocr/privacy/.
3. Nakashima, Ellen, “Hacks of OPM Databases Compromised 22.1 Million People, Federal

Authorities Say,” The Washington Post, July 9, 2015.

4. Porter, Mikaela, and Mara Lee, “Hallmark to Close Enfield Warehouse, Eliminate 570 Jobs,”
Hartford Courant, July 7, 2015, http://www.courant.com/business/hc-enfield-hallmark-ware
house-close-20150707-story.html.

5. Sandoval, Edgar, Jason Silverstein, and Larry McShane, “TV News Reporter, Cameraman
Are Fatally Shot During Live Broadcast in Virginia; Suspected Shooter Posts Video of Attack,
Then Kills Himself,” New York Daily News, August 27, 2015.

6. Turkewitz, Julie, “Oregon Gunman Smiled, Then Fired, Student Says,” New York Times.com,
October 9, 2015.

7. Sanchez, Ray, Michael Martinez, and Doug Criss, “‘Pray for Us’: Calls, Texts Relay Horror of
California Mass Shooting,” CNN.com, December 2, 2015.

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7

2
Strategy-Driven Human
Resource Management

Case 2.1. The External Environment:
When State Government Offers Early Retirement
The external environment consists of a series of influences that originate outside the
organization and that the company cannot control. These external factors, which must
be considered when forming a strategy, include customers, competition, suppliers,
shareholders, society, technology, the economy, the labor force, and our government.

In regard to the external force of the government, we have come to expect our
government agencies to be complex, formalized, and centralized in terms of organi-
zational structure.

Government agencies are very large organizations that are normally very com-
plex. Complexity involves the way in which we divide the organization into differ-
ent segments. Government agencies are often organized into many different layers
of employees, which makes communication more difficult between the different
parts of the agency. Government agencies are often known to be very slow at making
decisions.

Government jobs are often standardized (formalization) within an agency, since
they have to make decisions based upon many policies, procedures, and rules.
Although these rules help employees to make routine decisions, they also stifle cre-
ativity since employees must also follow these rules.

Overall, government agency decision making needs to be made by top govern-
ment officials (centralization) to ensure the same decision is given to each citizen.
Centralization helps to maintain control and should also result in lower costs.

National, state, and local governments all set laws and regulations that businesses
must obey. Federal and state governments create opportunities and obstacles for busi-
nesses. Safety standards set by government agencies, such as the Occupational Safety
and Health Administration (OSHA), are meant to increase employee safety while in a
working environment. The Environmental Protection Agency (EPA) set standards to
reduce pollution. Although it can be expensive for a company to meet the standards

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Part I • 21st-Century Human Resource Management Strategic Planning and Legal Issues8

of these types of agencies, the laws are designed to improve our quality of life at work
and at home.

However, just like a for-profit company, the government has to be careful about
hiring people to work in its agencies. At times, the government can experience a defi-
cit and has to entice its employees to accept an early retirement program.

In Massachusetts, the state government had a primary goal of achieving budget
savings of $172 million by offering an early retirement incentive package. Governor
Charlie Baker and his people estimated that 4,500 state workers would take the incen-
tive. The actual number of people who applied for retirement was about 2,870.1 The
reduced number of employees who accepted the reduced early retirement program
might result in layoffs in state employees. However, the governor has promised to look
for other solutions besides layoffs.

The state wanted to use 20 percent of the savings to refill positions that were now
open. As an extra incentive, the state offered a $10,000 buyout to employees who were
eligible to retire. It appears that 100 fully ready to retire employees accepted the extra
$10,000 offer.2

The state of Massachusetts’s forecast for how many employees would take the
early retirement package should have considered multiple issues. For example,
Massachusetts had a record snowfall of 100 inches in the winter of 2015. The increased
amount of snowfall should have enticed more government employees to retire early
so they could move to a warmer climate. However, the people of Massachusetts are
used to snowy winters—fewer left the state, or their position with the government,
than expected.

Employees also are more likely to accept an early retirement program if they have
been preparing for their own retirement. If employees have saved money in prepara-
tion for their retirement, then they would be able to retire early since they will have
enough money in retirement. But employees who have not saved enough for their
retirement will need to continue to work to receive their salary.

Last, employees can have social reasons for working toward their proper retirement
age of approximately 66 years old. Many employees enjoy the job they do at work. The
job gives them motivation to wake up in the morning, to achieve something at work
that is meaningful and can help other people, they enjoy their salary level and bene-
fits package, and they enjoy the friendships of the fellow workers.

Enticing your employees to retire early from the company (or government) is lined
with many potential problems. Here are a few examples:

• A “brain drain” situation can occur if your best and most important employ-
ees take the early retirement package. Key knowledge toward running the
operation will be lost if your experienced employees decide to leave the orga-
nization early.

• A serious lack of talent can also happen if the number of people taking the early
retirement package is more than expected.

• There would be fewer employees left to deal with the face-to-face interactions
with customers if the middle-to-lower level state employees decided to take the
early retirement package.

• It will cost more money up front to entice people to want to retire early.

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Chapter 2 • Strategy-Driven Human Resource Management 9

Case Questions

1. Which force of the external environment
has the greatest impact on the state of
Massachusetts?

2. Which force would you select as the
second greatest impact on the state?

3. Should the state be concerned if more
than 4,500 employees elected to retire?

4. In regard to structure, how would
you consider the state with respect

to complexity, formalization, and
centralization?

5. If you were an employee of Zappos or
the state of Massachusetts, would you
take early retirement? Assume you
qualify for the extra $10,000 incentive.
You are currently 58 years old.

Case 2.2. HR Strategy:
Employees Matter at Costco
Costco is a wholesaler and a retailer—customers love to shop at Costco and buy con-
sumer goods in bulk packages. At the same time, the employees who work at Costco
are equally happy with their jobs at Costco. No wonder the company is ranked in the
2015 top 100 workforces.3

Organizational culture consists of the values, beliefs, and assumptions about appro-
priate behavior that members of an organization share. The former CEO at Costco, Jim
Sinegal, said, “When employees are happy, they are your very best ambassadors.”4
Although many companies say employees are their most important asset, there is
a special emphasis on employees at Costco. Sinegal is considered a hero at Costco
because he started out his career a bag boy, worked his way up to VP of merchandising
and operations, and eventually co-founded Costco in 1983.

There are plenty of stories of people buying a Costco rotisserie chicken for $4.99
and having no idea why Costco keeps the price so low. The price of a hot dog and soda
for $1.50 hasn’t changed since the mid-1980s. However, the $1.50 price is a symbol of
how much Costco cares about its customers; it keeps its price low so that customers,
who often drive quite far to reach a Costco store, have very affordable options to eat
while shopping at the store.5

Employees at Costco are also treated extremely well. Costco pays its employees
much higher than the minimum wage. The company also pays about 90 percent of
health-care benefits for full and part-time workers. There is a clear path provided for
employees to grow and develop with the company.

Competitive advantage (CA) is a key strategic topic often associated with Professor
Michael Porter from Harvard.6 Competitive advantage is the area of an organization
that is unique and keeps an organization ahead of its competitors. Determining the
competitive advantage for an organization is the job of management leaders. In the
case of Costco, competitive advantage lies in the ability to sell bulk packages of food

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Part I • 21st-Century Human Resource Management Strategic Planning and Legal Issues10

items at a lower cost per unit than traditional supermarkets. Of course, these food
items (along with nonfood items such as clothes, books, and videos) are stocked and
sold by extremely pleasant and helpful employees. The key to a competitive advan-
tage is to make sure it is a sustainable competitive advantage (SCA). An SCA would
mean the advantage the company has is not easily copied, outdated due to new inno-
vations or technology, or in general no longer having a valid competitive advantage.

With the goal of a SCA in mind, Porter also developed his Five-Force Model of
Competition.7 Porter’s five forces are Supplier Power, Buyer Power, Threat of New Entry,
Threat of Substitution, and Competitive Rivalry. In Costco’s case, Costco is such a
large retailer that it can buy large amounts of products, such as Coca-Cola and Oreo
cookies, that it can get items at the lowest possible cost. Plus, Costco has its own
brand name, Kirkland, which also increases its control over suppliers. In regard to
substitutions, there is really no replacement for food. However, the force of a Threat of
New Entrants is quite possible. For example, Amazon is the largest retailer online and
recently surpassed Walmart as the largest company in market value. Costco has to be
concerned that its customers will increasingly buy their food items online at Amazon
instead of going out to shop at a Costco store.

As one can see, in many industries, the competitive rivalry within an industry is
as great as at any time in the history of business. Thus, Costco will have to emphasize
its great face-to-face customer service offered at all of its stores. It certainly helps to
have pleasant people at their doors checking customers into and out of the store. Of
course, that is also a security check to make sure customers have their membership
on the way into the store and that they have a receipt for buying the products on the
way out of the store.

Based on personal experiences since 1991, the author’s family has bought grocery
and nongrocery items at Costco. We are loyal customers, and the employees are always
sincerely helpful 100 percent of the time. The level of service, including returning
any product that has ever been bought at Costco, is not found at any other retailer.
Costco’s focus on employee happiness translates to customer satisfaction. Happy
employees make happy customers.

Case Questions

1. Costco has impacted the retail shopping
industry. Use the Five-Force model to
outline how Costco impacted the grocery
and nongrocery marketplace.

2. How does Costco’s approach to human
resources provide it with a competitive
advantage?

3. How do Costco’s HR policies help the
company be successful?

4. Discuss how Costco creates a link
between employees and customers.

5. Does the mission of Costco impact HR?

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Chapter 2 • Strategy-Driven Human Resource Management 11

Notes

1. Associated Press, “Early Retirement Signups for Massachusetts State Workers Below Proje-
ctions as Deadline Nears,” FoxBusiness.com, June 12, 2015.

2. Schoenberg, Shira, “2,870 Sign Up for Early Retirement,” The Republican, June 13, 2015, 1.
3. “2015 Workforce 100: Ranking the World’s Top Companies for HR,” Workforce, May 22, 2015,

http://www.workforce.com/articles/21293–2015-Workforce-100-List.

4. “Employee Relations Best Practices: Costco’s Approach to HR,” i-Sight, http://i-sight.com/
resources/employee-relations-best-practices-costco/.

5. Tuttle, Brad, “Why Costco May Never Raise Prices on $4.99 Chickens, $1.50 Hot Dogs,” Time
.com, May 29, 2015.

6. Porter, Michael, “Competitive Advantage,” Free Press, 1998.
7. Airline, Katherine, “Porter’s Five Forces: Analyzing the Competition,” Businessnewsdaily

.com, February 18, 2015, http://www.businessnewsdaily.com/5446-porters-five-forces.html.

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5 8

11
Compensation Management

Case 11.1. Compensation Management:
How Does Wage Compression and Pay
Secrecy Affect Employee Motivation?
Marie was the vice-president of human resources for Envelope City, which is a small
manufacturing company that makes envelopes for the business market. The company
has been in existence for almost 100 years. But there are some problems that can occur
with being such an old business. For example, the organizational philosophy on wage
compensation most likely was set many years ago when the economic, technological,
and social conditions of the country were much different than they are today.

There are seven basic issues that make up the organizational philosophy on com-
pensation. First, Envelope City has to make an honest assessment of how much it can
afford and is willing to pay its employees. Second, Envelope has to decide what type
of compensation (base pay, wage add-ons, incentives, and benefits) it wants to offer.
Third, Envelope has to decide if compensation will be based on loyalty/tenure or if
employees will receive raises based on the quality of their work performance. Fourth,
a decision needs to be made whether compensation will be based upon a competency-
based system that involves the individual’s level of knowledge in a particular area
or based on the individual skills the person brings to work. Fifth, Envelope needs to
decide to pay employees at, above, or below wage levels that workers are receiving at
area competitors. Sixth, Envelope has to decide if it is going to allow wage compression
to occur between new and long-term employees. Last, Envelope has to decide if pay
secrecy (which means employees will not be aware of what each of them is actually
paid) will be used within the company.

Interestingly enough, Envelope City found that the last two issues—wage
compression and pay secrecy—caused some problems at the company. Wage com-
pression, in particular, is a major problem. Wage compression occurs when new
employees require higher starting pay than the historical norm, causing a narrow-
ing of the pay gap between experienced and new employees. The result is that new
employees are paid more than longtime employees who are equally talented and at
the same level in the organization, regardless of their many years of experience with
the company.

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Chapter 11 • Compensation Management 5 9

Marie experienced a form of wage compression as a teenager when she worked
at a fast food restaurant. At the time, back in the 1980s, she had worked hard at a
minimum wage of $1.60 per hour. She worked hard for 2 years to earn a dime raise.
However, shortly thereafter the minimum wage was increased to $3.20 per hour.
Marie lost her dime wage increase for good performance—she made only the mini-
mum of $3.20 per hour.

As a young adult in her twenties, Marie went to work for an oil company and
gained 5 years of experience in a human resources department. She then switched
jobs to work as the vice-president of human resources at Envelope City. She negoti-
ated a good contract that doubled her salary. However, her salary leap-frogged the
other vice-presidents at Envelope City. If her salary was disclosed to the other vice-
presidents, they would be very upset to know she was being paid as much or more
than the more experienced VPs who had worked at Envelope for many years.

Marie did not intend to create a situation where wage compression was going to
be a problem for her new HR department at Envelope City. She felt that the result of
her new employee contract (and other similar new employee contracts) was an unin-
tended consequence of Envelope City trying to be a more aggressive employer and
to pay new employees a competitive salary compared to the company’s competitors.

Another disadvantage of salary compression occurs when lower-level, nonmanage-
ment employees are paid as much, or more, than those in managerial positions.1 This
situation can quickly demotivate key managers.

The only good news about wage compression is that employees often keep their
own pay a secret. They are often afraid to compare salaries against each other in case
they find that they make less salary than their colleagues.

In 2010, nearly half of all workers were contractually required or encouraged to
not talk about their pay level with colleagues.2 On April 8, 2014, President Obama
signed an executive order prohibiting federal contractors, subcontractors, and feder-
ally assisted construction contractors from discriminating against employees or appli-
cants who ask other employees about their compensation.

However, pay secrecy might also be one of the reasons that women are paid only
77 cents on the dollar that men make in the same job. Organizations might use pay
secrecy to make it difficult for women to compare their salaries with men in similar
positions.

Case Question

1. Why does wage compression occur in
organizations?

2. How can pay secrecy affect employee
motivation?

3. Have you experienced wage compression
in your career?

4. Have you experienced pay secrecy?

5. Does President Obama’s executive
order impact employees at private
companies such as Envelope City?

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Part IV • Compensating6 0

Case 11.2. Trends and
Issues in HRM: What Motivates
Employees at Work? Expectations or Equity?
Edwidge was thrilled to get a new job at Stubbub soon after she graduated from college
with a 4-year degree in management. She was quickly thrown into the position of
customer sales and service, selling tickets to sporting events and concerts. After a few
months, Edwidge was still in customer service and wondered what her future looked
like at Stubbub. She was concerned that she was working very hard but wasn’t receiv-
ing a salary increase for all her efforts.

This was the first time in Edwidge’s life that she wondered why people go to work.
Edwidge liked to compare herself to other employees and to figure out whether she
was being treated equally. She noticed that all the new employees she started with
were working in customer sales and service.

Edwidge decided to look at a few motivation theories to see if they could help her
understand her job expectations. Victor Vroom proposed the expectancy theory in
1964 as it applies to motivation. Expectancy theory states that Edwidge’s motivation is
an outcome of how much an individual wants a reward (valence). Edwidge assesses the
likelihood that her effort will lead to expected performance (expectancy) and the belief
that the performance will lead to reward (instrumentality). Expectancy is Edwidge’s
faith that better efforts will result in better performance and rewards.3

Edwidge next looked at equity theory, which was developed by John Stacey Adams
in 1963. Adams proposes that Edwidge will be demotivated if she feels her inputs are
greater than the outputs she receives. If this happens, Edwidge might respond by
being demotivated, reducing her effort, and becoming an unhappy employee.4

Edwidge also researched the concept of comparable worth. Comparable worth is
similar pay for similar work. The concept of comparable worth holds that, if Edwidge
can compare her job, skills, responsibilities, and efforts with that of another man or
woman, and they are similar, then she should be paid a similar wage. This makes the
concept of comparable worth much broader than just equal pay for equal work. The
key to similar worth, from a legal standpoint, is to determine the value of a job while
also taking into account the supply and demand for a particular job.

One factor in the compensation system at Stubbub also caught Edwidge’s attention
while doing her research. She detected that pay secrecy was the normal practice at
work. She really didn’t know what the other employees were getting paid since this
information was heavily guarded. Edwidge thought protecting employee salaries was
the correct approach for companies to take, but it did make it hard to compare her pay
against other employees.

Case Questions

1. Do you think the expectancy theory
is correct in explaining what makes
Edwidge happy? Explain why or why not.

2. Do you think the equity theory does a
better job than the expectancy theory

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Chapter 11 • Compensation Management 61

Notes

1. Kochanski, Jim, and Yelena Stiles, “Put a Lid on Salary Compression Before It Boils Over,”
Society for Human Resource Management, July 19, 2013, http://www.shrm.org/hrdisciplines/
compensation/articles/pages/salary-compression-lid.aspx.

2. Women’s Bureau, “Fact Sheet,” U.S. Department of Labor Women’s Bureau, August 2014,
http://www.dol.gov/wb/media/pay_secrecy.pdf.

3. http://www.yourcoach.be/en/employee-motivation-theories/vroom-expectancy-motiva
tion-theory.php.

4. https://www.mindtools.com/pages/article/newLDR_96.htm.

of explaining what makes employees
happy?

3. If you worked in human resources, how
would you use positive reinforcement to
support employee development?

4. How does pay secrecy make it hard to
accept the equity theory?

5. How would Edwidge apply comparable
worth to her work situation?

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2 2

5
Recruiting Job Candidates

Case 5.1. The Recruiting Process: The Growth
of E-Recruitment in Recruiting Job Candidates
The most popular place to look for prospective employees used to be classified ads in
newspapers. However, electronic recruitment (e-recruitment) in the last few years has
certainly taken the number one spot for finding new employees.

What are the different type of e-recruitment platforms? They include websites
such as Facebook, Blogs, Google+, LinkedIn, Myspace, Podcasts, Twitter, YouTube, and
Monster.com. Each form of e-recruitment is a growing area for human resources to
find prospective employees.

Companies used to be able to communicate in a downward, one-way fashion when
the only real form of looking for prospective employees were newspaper advertise-
ments. Social media sites such as Facebook, Twitter, and LinkedIn create a more two-
way shared communication process. For example, one human resource manager likes
to review the LinkedIn account of upcoming interviewees. She likes to have a gen-
eral idea of what the interviewee looks like to help greet the person when he or she
arrives at the reception desk at her company. Employers and prospective employees
can engage in a dialogue by interacting online about the specific job opening. Even
simple e-mail exchanges, arranging the date and time for the interview, can create a
bond between the interviewer and the candidate.

Using social media as a recruitment tool does require considering many issues that
didn’t quite exist before the widespread use of the Internet. For example, a positive use
of social media would be a prospect who posts well-written responses using Twitter or
Facebook. Such people might show knowledge or an understanding of the industry for
which they are applying. For example, an applicant might demonstrate the knowledge
to be a sports information director if he or she demonstrates good writing skills and an
understanding of college athletics. A candidate who discusses Adobe Photoshop skills
and experiences would be a potentially good fit for graphic design positions.

However, just as with face-to-face interviews, the HR person wants to be careful about
the legal issues of conducting a search online. Monster.com suggests that HR people use
social media after the first live interview so they don’t make a quick judgment based on
what they see online. Plus, reviewing social media should be conducted at the same time
in the search process for each candidate to be fair in the evaluation process.1

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Chapter 5 • Recruiting Job Candidates 2 3

Unlike other platforms, such as Twitter or Facebook, LinkedIn focuses on the busi-
ness environment. LinkedIn has over 364 million members in 200 countries and ter-
ritories. There are over 39 million students on LinkedIn. People who go to LinkedIn
are interested in finding people they have worked with or would like to meet in regard
to their career. Each user maintains an account and approves connections with other
people. A user can ask to form a connection or, likewise, be asked to join someone
else’s connection. The list of connections can be used as a contact list, to follow spe-
cific companies, or to look for jobs, people, and business ideas.2

LinkedIn allows companies to create a job posting with a job description, experi-
ence required, and educational requirements. Employers can also reach out to specific
users to gauge their interest in a job opening. At the same time, individuals can choose
to contact the employer to help show their interest.

When creating a professional network online, the first step is for users to include a
picture that reflects that you are professional in your field. You want to portray your-
self as being a professional. Having an interesting but professional picture can attract
the attention of potential employers. For example, if you were looking for a writing
position, you might wear a large brim fedora hat to show you possess some creative
ideas that could be used in public relations and advertising positions.

Many companies have denied giving a job candidate a position because either they or
their friends have posted embarrassing photos or used improper language. A recent college
senior wasn’t offered a job at an accounting firm because of a picture posted by a friend on
Facebook. Although the picture was only of the two friends sharing a selfie and a drink, the
accounting firm felt the applicant would not be a proper fit.

A second piece of advice is to keep your status area updated with current work, edu-
cation, and experiences. Third, complete all pages about yourself to help prospective
employers learn about you quickly. And fourth, don’t just focus on your latest job. The
employer might like something you did in a previous job or charity where you donated
time.3 One recent applicant traveled throughout Europe right after college graduation.
Upon returning home, he was interviewed by two large insurance companies. The
insurance company recruiters were interested in him because he showed the ability to
travel overseas. The recruiters felt the ability to travel globally would be a valuable skill
for their insurance companies since they had operations in different countries.

Case Questions

1. Why is a newspaper classified as a one-
communication vehicle compared to a
two-way process, such as Twitter or
LinkedIn?

2. Why would the human resources
department of a company not like to use
Twitter, Facebook, or LinkedIn?

3. Why would human resources like to use
Twitter, Facebook, or LinkedIn?

4. Should college students have a
Facebook, Twitter, or LinkedIn
account?

5. Review your own Facebook, Twitter,
or LinkedIn account and indicate
which of them should be modified
before going on an interview.

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Part II • Staffing2 4

Case 5.2. Internal Versus External
Candidates: Which Candidate Is More Valuable?

Organizational Recruiting Considerations
Organizations need to build a list of internal employees who can be tapped when

high-level employees change companies, retire, or pass away. Much like a baseball
team, there must be good people on the bench in lower-level positions ready to take
the place of players/employees who are no longer able to do their job.

Internal recruiting involves filling job openings with current employees or peo-
ple the employees know. Promotion from within means the organization posts job
openings on company-wide e-mail, company newsletters, bulletin boards, and other
internal mechanisms to promote the open positions. Employee referrals are a second
type of internal recruiting. Referrals mean employees are encouraged to refer friends
and relatives to apply for a position.

The advantage of internal recruiting is that it increases employee commitment
and job satisfaction because employees feel they have an opportunity to advance in
the company; the employee already works for the company, which shows interest in
working at the company; the company already has knowledge of the employee’s work
habits; and it is often quicker and less costly than a full external search.

The disadvantage of searching to fill positions internally in the company is the
pool of potential applicants is much smaller; there may be better qualified applicants
in the external pool of prospects; employees will feel that they are guaranteed to fill
open positions, which will lead to a lack of new people who can provide new ideas
and creativity; and success in a lower-level position does not mean the employee will
be successful in the higher-level position.

External recruitment also has advantages and disadvantages when a company
is looking to fill a position. External recruiting sources include people who walk in
to the position either in-person or online, recruitment at high schools and colleges,
employment agencies that focus on finding talented employees to match with job
openings, and advertisements online, in newspapers, and through various media.

External recruitment will lead to new people being hired who should have inno-
vative ideas to operate the company. We can also find people who have experience in
the position we are trying to fill. However, new people might cause some disruption
in the way things are normally done, which can cause some conflict. External recruit-
ments can take more time and will cost more money than an internal search. Most
important, the internal candidate might have a nice looking résumé and references,
but the company has no real data to support the assumption the employee is a good
fit for the open position.

Amanda Clark is an internal candidate for an open assistant director position at
the nonprofit community center where she has worked for nearly 30 years. Amanda
has a bachelor’s degree in education and was a program director for teens for 9 months
of the year. She would then switch hats and become the summer camp director for the
remaining three months. She ran the youth theater group for the nonprofit commu-
nity center. She was also involved in finding 50 teenagers to participate in a summer
sport tournament. The list of tasks she completed is extensive and would be hard to
list in its entirety.

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Chapter 5 • Recruiting Job Candidates 2 5

However, Amanda had two male direct superiors. She always got along well with
the director, Bob Gold, and the assistant director, Mike Woods. Bob decided to retire,
and Mike was appointed to be the new director of the Community Center. Mike was
an internal candidate who had spent 25 years preparing to succeed Bob as director.

An external recruitment search began to find a new assistant director. This is
where the case becomes interesting. The nonprofit placed an advertisement to the
public in various local and national newspapers and websites looking for talented
external candidates. But Mike never looked for internal candidates, such as Amanda,
to be promoted to the assistant director position.

An external candidate, Sam Riddle, was hired after a lengthy 9-month search to fill
the position. Sam worked in a management position at a hardware store 1,500 miles
away. He created a hostile work environment, where at least half of the employees did
not appreciate his in-your-face management style.

At the same time, Amanda was sought out by a local for-profit competitor to run its
new youth facility. She would be in charge of the daycare facility and summer camp.
Feeling overlooked at the nonprofit community center, she was honored to be asked to
work at the local competitor only five minutes away. She accepted the job at the new
for-profit organization. As an external candidate, Amanda was sure she was selected to
use her experience and creativity to help build the for-profit youth facility.

At the nonprofit community center, Sam Riddle lasted about 3 years in his role as
assistant director. He apparently interviews very well, since he was promoted to be a
director at another facility within the organization.

Amanda used her great enthusiasm to build the daycare and camp at the new
for-profit company. She left after about a year due to the lack of ethics on the part of
management. The for-profit was a family-owned business that was generally well oper-
ated. However, there was one family member who helped manage Amanda’s facility
who was hard to manage and would routinely make mistakes, such as leaving children
unattended.

Amanda was fortunate to return to her original nonprofit organization and to
work part-time helping the programs that are most dear to her heart. She was paid an
hourly wage, instead of her previous full-time pay. She applied for the now vacant job
of assistant director. At this point, Amanda is unsure if she is considered an internal
or external candidate at the nonprofit community center.

Case Questions

1. Did the original nonprofit appear to
develop internal candidates?

2. If the agency didn’t develop internal
candidates, why do you think this would
happen?

3. Did the nonprofit develop and use its
bench strength?

4. At what point(s) was Amanda an
external candidate?

5. Is it better to hire from within or
outside your organization?

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Part II • Staffing2 6

Notes

1. Berkowitz, Melanie, “Social Media Recruiting: Understand the Legal Guidelines,” Monster.
com, retrieved September 19, 2015.

2. Archanal, L, V. G. Nivya, and S. M. Thankam, “Recruitment Through Social Media Area:
Human Resource,” ISOR Journal of Business and Management, 2014, pp. 37–41.

3. Kane, Libby, “8 Mistakes You Should Never Make on LinkedIn,” Forbes.com, March 4, 2013.

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12

3
The Legal Environment and

Diversity Management

Case 3.1. Major Employment Laws:
How Does an Increase in State
Minimum Wage Impact an Organization?
In any management position, you need a basic understanding of the major employ-
ment laws. If you are the manager of a company, such as Walmart, you have to under-
stand what is legal and what isn’t, or you may cost your employer money.

There are some laws that deal specifically with compensation issues. A major piece
of legislation was the Equal Pay Act of 1963, which requires that women be paid equal
to men if they are doing the same work. However, the oldest of the compensation
laws is the Fair Labor Standards Act (FLSA) of 1938. The FLSA covers minimum wages,
overtime issues, and child labor issues within the United States.

The federal minimum wage set by FLSA is currently $7.25 per hour. States cannot
set a minimum wage that is lower than the federal standard, but they are free to estab-
lish a higher one. The minimum rate in different states can be found at The National
Conference of State Legislators.1

President Obama has made increasing the minimum wage a priority during his
presidency. He believes that low minimum wages create “social inequality.” He has
called for a minimum of at least $10.10 per hour.2 Even still, there is little doubt this
increase will not be enough to help low-income people escape poverty. But it would be
progress, and it would help low-income people earn more money.

Employees, especially in the fast food industry, have been holding rallies across the
nation to increase the minimum wage. The rallying cry has been for $15.00 per hour
for a minimum wage. This is a fight for everyone who is paid minimum wage, not just
the fast-food industry.

For example, the city of Los Angeles voted in 2015 to increase its minimum
wage from $9 per hour to $15 per hour by 2020. The minimum wage rate will

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Chapter 3 • The Legal Environment and Diversity Management 13

be $10 in California in 2016 and $13.00 in 2017.3 More large cities are expected
to follow.

In New York, Governor Andrew Cuomo is siding with the minimum wage earners.
Cuomo rallied against McDonald’s and Burger King, where pay is so low that employ-
ees are forced to accept state assistance.4

Walmart has been at the center of the minimum wage rate for many years. Since
Walmart is the largest physical retailer in the world, it should have expected its wage
rate would be scrutinized by all the stakeholders of the organization.

In response, Walmart has increased its minimum salary to $9 per hour, which will
bump up to $10 by February 2016. Around 500,000 employees will receive the hourly
increase. It is hoped that the increases can help many Walmart employees who are
on state assistance. Walmart didn’t decide to suddenly be kind to its employees. Since
most states now have a rate higher than the federal minimum rate, Walmart made
the change because it was going to legally have to pay its employees the higher rate
in different states.

Human resources departments need to be prepared for the increase in minimum
wages. HR needs to understand its own business situation and build a business model
that will include higher minimum wages. Some companies, such as Costco, Ikea, and
The Gap already pay their workers above the federal minimum wage.5

HR also has to be concerned about wage compression between hourly employees
and supervisors. If the minimum rate rises high enough, the hourly workers could
be paid as high as, or even higher than, their supervisors and managers. This could
cause problems with employees, since they might rather be an hourly worker than of
a salaried employee.

The success of the rallies, the increase in state and local wages, and the decision
by large companies to increase their minimum wage is certainly positive news for the
lives of many Americans. But it is most likely that employers are also going to decide
to hire fewer employees since they will claim it is too expensive to hire the same
number of minimum wage employees as they currently hire. Consequently, it is possi-
ble that low-income, entry-level employees will have fewer job opportunities because
employers will try to reduce the number of employees they hire.

Case Questions

1. What law(s) apply to this case?

2. Will Walmart employ fewer minimum
wage employees to save money?

3. Will low-income employees need more
education and skills?

4. Will more college-educated prospective
employees be offered jobs at $15 per
hour instead of a salaried position?

5. What is your view on the increase in the
minimum wage? How has it affected
yourself at your own job?

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Part I • 21st-Century Human Resource Management Strategic Planning and Legal Issues14

Case 3.2. Diversity and Inclusion:
What’s the Difference?

Hilton Worldwide Named Top 50 Diversity Company
Diversity and inclusion are important concepts in ensuring that all human beings

in your organization are treated equally. Companies have learned that their employ-
ees should represent their customers. All companies sell their products and services
to an increasingly diverse population. Thus, the employee makeup of the firm should
also be diverse.

Diversity refers to all the ways we differ. Anything that makes us unique is part
of diversity. Inclusion involves bringing together and harnessing these diverse
forces and resources in a way that is beneficial.6 An organization needs to be aware
of the diverse nature of their organization, then create programs to help include
all the diverse groups to feel comfortable, wanted, and motivated to work for the
company.

Diversity is important and needed because, as the white population continues to
shrink and the minority population grows, selling your product to a variety of groups
increases sales, revenues, and profits. Embracing diversity means you will create new
business opportunities by having employees who look at the world from different
perspectives.

Human resources needs to be fully trained and aware of all the laws related to the
topic as applied in organizations. Thus, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act of 1990, the Age Discrimination Employment Act of
1967, and other laws need to be fully understood and implemented by HR employees.
HR should be involved in training employees to foster diversity and to be accepting
of ideas created by each group. HR can be the facilitator to help the organization stay
within the laws of discrimination and, at the same time, help foster a better under-
standing between employees from different backgrounds.

Hilton Worldwide was selected as DiversityInc’s Top 50 Companies for Diversity.7
Based upon DiversityInc’s research, the top 50 companies have 20 percent more
Blacks, Latinos, and Asians in management, and 13 percent more women.

Here are some reasons that Hilton Worldwide was selected as an above average
diversity company:

• “Diversity and inclusion are part of our DNA at Hilton,” said Christopher J.
Nassetta, president and CEO of Hilton Worldwide. “Like our hotels, our work-
force is global, and our success is driven by the passion and motivation of our
teams. Our culture and diversity in all its forms around the world makes our
organization strong and drives better results.”8

• Hilton Worldwide supports the LGBT community by participating in two of
the nation’s largest Pride festivals.

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Chapter 3 • The Legal Environment and Diversity Management 15

• Hilton has a National Minority Supplier Development Council Board of
Directors. Their goal is to help influence the development of Asian, Black,
Hispanic, and Native American suppliers and supplier diversity best practices.

• Hilton Worldwide was ranked on the Hispanic Business 2012 Best Companies
for Diversity list by Hispanic Business magazine. Hilton scored among the high-
est in restaurants and resorts.

• Hilton Worldwide offers excellent employee resource groups, including a group
for veterans and their spouses.

How does Hilton Worldwide do in passing the OUCH test? The OUCH test,
although not a legal test, is a good theory and rule of thumb as to what makes a fair
human resource decision. OUCH is an acronym for a decision that is objective, uniform
in application, consistent in effect, and related to the job.9 The OUCH test should be used
whenever considering any action that involves employees.

The “O” in OUCH means employment actions are made as objectively as possible.
Objective means the HR decision is based on fact, cognitive knowledge, or quan-
tifiable evidence in all cases. In comparison, employment actions should not be
based on something that is subjective, such as your emotional state, your opinion,
or how you feel in a certain situation.

The “U” in OUCH considers whether an employment action is being uniformly
applied to all employment decisions. For example, if one candidate for a manage-
ment position at Hilton has to take a written test as part of the job process, then
you also need to have all the applicants for the position complete the written test,
under the same conditions, to the best of your ability.

The “C” in OUCH considers whether the employment actions taken have signifi-
cantly different effects on one or more protected groups than it has on majority
group. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination
based on race, color, religion, sex, or national origin. Managers have to be careful
they don’t affect a protected group disproportionately with an employment action.
It is important for managers to show consistency in their employment actions.

The “H” in OUCH determines whether the employment action directly relates to
the primary aspects of the job in question. If the job of a manager at the Hilton
does not include serving coffee to employees in the morning, then the manager
cannot be hired or fired for not serving coffee.

On all accounts, a company like Hilton Worldwide, that is thought of as a Best
Company for Diversity, passes the OUCH test. Hilton has done an excellent job of
including all sorts of diverse groups (such as veterans and their spouses, Asian, His-
panic, and Black employees and suppliers, and the LGBT community) in its diversity
and inclusion programs.

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Part I • 21st-Century Human Resource Management Strategic Planning and Legal Issues16

Case Questions

1. What laws do you think might apply in
this case?

2. What is the difference between diversity
and inclusion?

3. What is the role of human resources in
fostering diversity?

4. Does Hilton Worldwide pass the
OUCH test?

5. Discuss different groups of people/
employees that would be considered
diverse.

Notes

1. National Conference of State Legislators, retrieved November 27, 2015, http://www.ncsl
.org/research/labor-and-employment/state-minimum-wage-chart.aspx.

2. Sahadi, Jeanne, “Will a Higher Minimum Wage Really Reduce Income Inequality?” CNN
Money, January 15, 2014.

3. Wattles, Jackie, “Los Angeles Is Now Largest City in America With $15 Minimum,” CNN
Money, June 14, 2015.

4. Bredderman, Will, “At Minimum Wage Rally, Cuomo Attacks Term ‘Income Inequality,’”
June 11, 2015, http://observer.com/2015/06/at-minimum-wage-rally-cuomo-attacks-term-
income-inequality/.

5. Patton, Carol, “Employers Embracing Wage Hike,” Human Resource Executive Online, October 13,
2014.

6. Jordan, T. Hudson, “Moving From Diversity to Inclusion,” Diversity Journal.com, March 22,
2011.

7. “Hilton Worldwide Named One of DiversityInc’s 2015 Top 50 Companies for Diversity:
Hilton Also Named a Top 10 Company for Supplier Diversity,” Hilton Worldwide.com,
April 24, 2015.

8. http://news.hiltonworldwide.com/index.cfm/newsroom/category/topic/732.
9. Hendon, John, “The Ouch Test: A Tool for Managing Your Employees,” Ask the HR Department.

com, 2013.

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18

4
Matching Employees and Jobs

Job Analysis and Design

Case 4.1. HR Forecasting:
Visier—Workforce Forecasting
For an organization to maximize productivity, HR must match the right people with
the right jobs. HR forecasting identifies the estimated supply and demand for the dif-
ferent types of human resources needed in the organization over some future period,
based on past and present demand.

Employment software specialist Visier Inc. helps companies complete their HR fore-
cast. Visier is an employment specialist located in Vancouver, British Columbia, and
San Jose, California. The company provides assistance and solutions to for improving
recruitment, retaining employees, and motivating employees.

Visier takes complex data (often called Big Data) and uses Cloud technology to
store and analyze workforce data. It then turns the data into sensible workforce strat-
egies. Led by CEO John Schwarz, Visier has successfully developed HR strategies with
Yahoo, Time Inc., ConAgra Foods, Nissan, and AOL.1

Using its special Workforce Intelligence process, Visier analyzes company data
to predict which valuable employees are most likely to leave the company, provide
insight into proper compensation levels, and discover recruitment sources that will
result in finding the most talented recruits.

Visier predicts that companies will start to look at the overall cost of human
resources, instead of just counting the number of people. Through its Workforce
Intelligence process, Visier will also help predict the impact of employee retirement
and how to best transfer employee skills to the next generation.

Visier has been so successful at helping companies organize their human
resources they have attracted $25.5 million in new financing from investors.2 Visier’s
software will bring even more big data analytical technologies to the human resources
market. HR software that analyzes HR needs such as job analysis, job descriptions,

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Chapter 4 • Matching Employees and Jobs 19

job specifications, job design and redesign, job simplification, and job expansion is
at least an $8 billion market.

Case 4.2. Succession Planning:
Developing Leaders at General Electric (GE)
Succession planning requires planning for a smooth transition from one key employee
to another in order to minimize disruption of the organization’s work. Even if you
own your own business, you eventually have to transfer ownership to the next gener-
ation. Having a succession plan is part of forecasting the future human resource needs
of a company. A well-thought-out succession plan can reduce risk within the com-
pany by making sure the company is being led by a top-notch executive. Staff morale
should be increased since the person selected currently works for the company. Hiring
an executive from within will show that all employees who work for the company
have the potential to be promoted.

GE was highly successful under the unique leadership that former CEO Jack Welch
provided. Welch was known for making brash statements to help motivate employees.
In an interview in the Los Angeles Times, Jeff Christian, the CEO of Christian Timbers
Inc., said of Welch,

The winners are the people who make hiring and keeping the best people a top
priority, and that’s exactly what Jack Welch did. . . . His primary strategic goal
was hiring the best people around, developing them and training them and
knowing who the stars were.3

On the other hand, Welch could be tough on his employees. He created what was
affectionately called “rank and yank.” His model was that the star employees (10%)
were encouraged to stay at GE. The middle 80 percent were considered the average
employee with potential growth and development. Welch felt the bottom 10 percent

Case Questions

1. Do you agree with using an employment
service such as Visier to help recruit,
train, and develop your employees?

2. Do you think an outside vendor such as
Visier can properly match prospective
employees with open jobs?

3. Do you think Visier can complete an HR
forecast for a company?

4. If you used Visier services, would you
expect to lay off employees?

5. Why is forecasting retirements
important in regard to the next
generation of employees?

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Part II • Staffing2 0

of employees should be encouraged to leave GE. The bottom 10 percent received
counseling on finding their next employer. Although the performance system was
often considered harsh, Welch felt it was transparent, and an honest approach to help
develop employees either at GE or another company.4

The classic case of succession planning took place at General Electric (GE) in 2001.
At that time, Jack Welch had been the CEO at GE for 20 years. Welch had set a suc-
cession plan in place by the mid-1990s. He created a list of 23 essential skills, charac-
teristics, and qualities a CEO should possess. He would move executives into different
positions and strategic business units in an effort to cross train his leaders in all areas
of the company. Jack was left with eight candidates who were all very qualified to run
GE or another large corporation.

Jeff Immelt was eventually selected to succeed Welch, and he has been at the helm
of GE for the last 14 years. The executives not selected were so talented they were
often chosen by other large corporations to be their CEO. Bob Nardelli went from GE
to CEO at Home Depot. He then went to Chrysler. Jim McNerny went from GE to CEO
of 3M, and then he moved to Boeing.

Jack Welch’s succession planning process is the model that many corporations
have used to replace CEOs. The process Welch created led to the creation of a “deep
bench” of talented executives to compete against each other in order to see who
would be the next CEO. The succession plan itself helped GE to develop its top-level
managers.

Welch also started the succession plan many years before he actually retired so he
didn’t have to rush to pick his successor. He challenged the executive candidates with
“stretch assignments” to see who could thrive in increasingly difficult situations. The
stretch assignments were projects the eight candidates were given beyond their normal
skills and abilities. Stretch assignments placed the candidates into new, larger, and
potentially uncomfortable projects and tasks in order to see who could learn to grow
into the next CEO at GE.

In the end, the succession planning process worked for the GE’s Board of Directors.
They were left with a CEO, Jeff Immelt, who has successfully led GE for many years.
Jack Welch retired from GE as planned and has continued to be a key speaker at con-
ferences and training seminars about how to motivate, develop, and promote human
resources.

Case Questions

1. Why do family businesses have to be as
concerned as large corporations about
succession planning?

2. Is succession planning part of
forecasting human resources?

3. Did Jack Welch place great value on
human resources at GE?

4. Why were the stretch assignments
important to the selection of the new
CEO at GE?

5. Find the CEO of a local company and
determine how long he/she has been
the CEO.

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Chapter 4 • Matching Employees and Jobs 2 1

Notes

1. www.visier.com.
2. Shieber, Jonathan, “Combining Big Data and Human Resources Nets Visier $25.5 Million,”

Tech Crunch.com, June 10, 2014.

3. Girion, Lisa, “GE Succession a Leadership Lesson,” Los Angeles Times, December 3, 2000.
4. Welch, Jack, “Jack Welch: ‘Rank-and-Yank’? That’s Not How It’s Done,” The Wall Street

Journal, November 14, 2013.

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2

1
The New Human Resource

Management Process

Case 1.1. The Changing
Role of Human Resources in
Organizations: The Curious Case of Zappos
In the 1980s, when you were interviewed or hired for a job you often met a person
from the company who worked in the Personnel Office. The Personnel Office was
viewed as a place where each employee filed the necessary forms to work at the
company.

The Personnel Office was considered a staff management area where you learned
about the policies and rules of being an employee at the company. Personnel was con-
sidered a staff management area, since they only advised line managers in some field of
expertise. For example, Personnel would have consultants with specialized experience
in accounting or providing input on legal issues to support the line managers that
were creating the product.

Fortunately, over the years the Personnel Office became known as the Human
Resources (HR) Department. HR has become a larger part of the strategic planning pro-
cess in many companies. The HR manager often helps to set policies and strategies in
relation to the workforce at an organization. At the same time, HR managers continue
to support line managers by constantly improving areas such as finding prospective
new employees, training employees, improving employee motivation, searching and
evaluating lower cost and higher quality health-care benefits, providing information
on retirement services, and many other activities designed to make sure employees are
able to complete their jobs.

Zappos, a very successful online retailer that sells shoes mainly to women, is an
example of a younger company that provides a modern approach to human resource
management. The human resources department at Zappos organizes unique events to
help celebrate the excitement at Zappos. To begin the process of working at Zappos,
the initial job interview is often conducted in an informal atmosphere to allow the

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Chapter 1 • The New Human Resource Management Process 3

prospective employee to feel comfortable. New employees are offered $2,000 if they
don’t want to stay with the company. Very few employees decide to leave the company
since they are excited to work for Zappos and their exciting CEO Tony Heish.1

Zappos has been so successful that it was purchased by Amazon in 2009 for over
$807 million. Zappos runs independently of Amazon to protect its unique human
resources department.2

Rebecca Henry is the former director of human resources for Zappos. She believes
the company consciously decides what the corporate culture needs to look like based
on ten core values. Each new employee is trained by an HR person on each of the
following ten values:

1. Deliver WOW Through Service

2. Embrace and Drive Change

3. Create Fun and a Little Weirdness

4. Be Adventurous

5. Be Creative and Open-Minded

6. Pursue Growth and Learning

7. Build Open and Honest Relationships With Communication

8. Build a Positive Team and Family Spirit

9. Do More With Less

10. Be Passionate and Determined, Be Humble3

The HR Department works with upper-level management to develop employee job
descriptions, the hiring process, on-the-job training, and the day-to-day work envi-
ronment based on these unique core values.

Zappos is always exploring new ideas to improve its human resources process.
For example, to improve the recruiting process, it has developed a social network
known as Zappos Insiders. Zappos Insiders allows prospective employees to interact
with current employees to see if they would be a good fit with the creative culture
at Zappos.4

Tony Heish’s latest idea is to make sure the people working at Zappos are truly
motivated to work at his company. All employees were offered the option to leave
the company with a severance package if they didn’t want to participate in a self-
management program. Self-management is a newer management idea that is based on
having agile workers. Employees learn to manage themselves and move from job to
job instead of staying with a single static job. The goal is for employees to give up tra-
ditional job titles and work on multiple tasks, rather than at a specific job. An employ-
ee’s job is constantly changing instead of being static.

Overall, 220 employees (14%) took the severance package offered by Heish to weed
out employees who wanted to change companies, who were ready for retirement,

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Part I • 21st-Century Human Resource Management Strategic Planning and Legal Issues4

or decided to leave for their own reasons. However, that also means 84 percent of the
remaining employees are employees who are motivated to make Zappos an even more
successful online retailer.5

Case 1.2. HRM Careers:
Five Growing Areas of Human Resources
What does it mean if you say you want to work in human resources? Actually, if you
can show a desire to work in HR, that is great! Too many students lack a focus on what
they specifically want to do for a job and a career. So, being able to say one wants to
work in HR shows that a student has scoped out an area he or she would like to learn
more about and gain experience in.

A person who would like to work in human resources can expect to work closely
with the other people in the organization. Thus, an HR employee needs to have good
people skills, as the HR job will be to take the lead in the management and maintenance
of the organization’s people. The HR person might find his or her job to be as delightful
as helping employees who have a new baby in their family or as sad as helping with
employees who leave the company, are laid off from the company, or even pass away.

Human Resources employees are increasingly asked to see the big picture of
the organization. They need to know where the company is going so they can hire
the appropriate people to fill those positions. For example, if a supermarket chain
decided to add gasoline stations to its stores, then the company might need to hire a
person who had experience in gasoline sales instead of—or along with—knowledge
of food sales.

The Bureau of Labor Statistics (BLS.gov) provides data on human resource manage-
ment jobs for the 2012 to 2022 range. Median pay in the field of human resources is
expected to be just under $100,000 per year, or $47.94 per hour. The data are based on
a person having a bachelor’s degree and 5 years of related work experience. Job growth

Case Questions

1. Should Tony Heish be concerned
that a large number of managers
and employees might reject self-
management, leave the company, and
accept a severance package?

2. What benefits or incentives do
employees experience at Zappos
that make them want to stay with the
company?

3. Does it appear the Human Resources
Department at Zappos is a staff or
a line area?

4. Does human resources at Zappos
create revenue for the organization?

5. If you were the HR manager at Zappos,
would you support the Zappos Insider
program as a reliable source of
acquiring new prospective employees?

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Chapter 1 • The New Human Resource Management Process 5

over the 10-year period is expected to be 13 percent, which is considered as fast as the
average growth in all occupations. The average job rate in all occupations is expected
to be 11 percent.6

HR jobs can be classified as either generalist or specialist. An HR generalist may
operate in many different areas of the discipline. A specialist focuses on a specific dis-
cipline of HR. Many smaller organizations have only one or two employees in their
HR office. The HR employees will have to be generalists inasmuch as they will have to
help employees in many different areas.

The following are the human resources positions that are expected to grow in the
next five years:

1. Compensation and Benefits Managers. The Bureau of Labor Statistics (BLS.gov)
explains that these managers plan, direct, and coordinate how much an organi-
zation pays its employees and how employees are paid. Benefits managers plan,
direct, and coordinate retirement plans, health insurance, and other benefits
that an organization offers its employees. For example, employees can select
a health-care plan for their family from the benefit manager. Employees will
then periodically ask questions about their plan throughout the year. The ben-
efits manager will end up answering questions regarding the deductible level
in the plan, which the family must pay before most medical services are free.
One plan, for example, may have a $4,000 deductible. That amount of medical
care money must be spent before services are reimbursed. Employees can also
ask the benefits expert for help with purchasing medical supplies via mail order
instead of using a local pharmacist. Salaries can range from $48,000 to $98,000,
depending on where you live.

2. Training and Development Specialists. The median wage for trainers was $56,000
in 2012. Training and development is the area of the company where employ-
ees receive education. Trainers need to have good communication skills, as they
lead training sessions on topics such as leadership, teamwork, and product-
specific information.7

3. Employment, Recruitment, and Staffing Specialists. These HR workers are employ-
ment specialists who screen, recruit, interview, and place workers. The goal
of staffing specialists is to get talented people interested in working for their
company. Mean wages are around $63,000 a year.

4. Human Resources Information (HRIS) Analysts. This person uses computer skills to
help ensure the data within the human resources department. They ensure the
integrity of the data, testing of system changes, and analysis of data flows for
process improvement.

5. Employee Assistance Plan (EAP) Managers. Many small to large businesses have an
EAP program to help employees with their personal health. EAPs can include
counseling for work-related stress, financial problems, and substance-abuse
problems. Wellness programs can include assistance with weight problems and
encourage physical fitness programs.

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Part I • 21st-Century Human Resource Management Strategic Planning and Legal Issues6

Case Questions

1. Which of the previous positions listed
deals with problems you might have
regarding your health-care program?

2. Which positions would be well suited
to someone who likes to make
presentations?

3. A person with computer skills would be
best suited for which position?

4. A person with social worker experience
would be well suited to which type of
position?

5. A person who would find, attract, and
assign people to a certain division
would have which job title?

Notes

1. McFarland, Keith, “Why Zappos Offers New Hires $2,000 to Quit,” Bloomberg Business,
September 16, 2008.

2. Hof, Rob, “Amazon.com Acquires Shoe E-tailer Zappos,” BusinessWeek, July 22, 2009.
3. Heathfield, Susan M., “20 Ways Zappos Reinforces Its Company Culture,” Humanresources.com.
4. Feffer, Mark, “The Democratization of Talent Management: How Technology and Gene-

rational Changes Are Transforming HR,” Society for Human Resource Management, April 7,
2015.

5. Feloni, Richard, “7% of Zappos Managers Quit After Recent CEO Ultimatum to Embrace Self-
Management or Leave,” Businessinsider.com, June 9, 2015.

6. http://www.bls.gov/ooh/management/human-resources-managers.htm.
7. http://www.bls.gov/ooh/business-and-financial/training-and-development-specialists.htm.

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2 7

6
Selecting New Employees

Case 6.1. The Selection Process:
Searching for a New Faculty Member . . .
What Step in the Selection Process Are We in Today?
There are many potential steps in the selection process to complete when conducting
a search process to fill an open position. Most important, companies need to follow
the Uniform Guidelines on Employee Selection Process (UGESP) to avoid discrimi-
natory hiring practices. The guidelines were designed to ensure that organizations
were using nondiscriminatory employment practices so they would be in compliance
under the Civil Rights Act of 1964, often referred to as Title VII.1

The following steps are part of a typical employee selection process:

1. Application and/or résumé collection and review.

2. Preliminary screening. May include a quick look into background check.

3. Organize initial interview with promising candidates.

4. Complete written and physical tests if necessary.

5. Secondary interviews for candidates who passed the first interview.

6. Detailed background check of references, criminal history, drug screening, and
web searches if appropriate to the position.

7. Position offered to selected candidate. If position is accepted, prospect is hired
and process is ended. If position is declined, search committee decides whether
to offer position to second highest rated candidate.

Small-Time College is looking for a good accountant that has the right personality-
job fit to complement its existing accounting faculty. Accounting positions often
require the accountant to work closely with financial statements, such as income

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Part II • Staffing2 8

statements and balance sheets. However, Small-Time College also wants to hire a pro-
fessor who likes to build close relationships with students and help them be involved
in donating time to nonprofit organizations. The college intends to hire a CPA to
be sure there is a good ability-job fit and hopes the new professor will have a good
person-organization fit, which means the new professor will fit into the culture of the
entire company.

The following are some of the selection steps taken at Small-Time College in its
search for a new full-time accounting professor.

1. A search committee is formed to search for the new accounting professor.
Professors from the Division of Business and a professor from outside the
division are included on the committee.

2. Search committee works together to write a job description and an advertise-
ment for the open accounting position.

3. HR places the advertisement in various media, such as Monster.com and
Higherjobs.com. The advertisement’s job was tailored to find qualified applicants
who could teach upper-level accounting courses on-campus and off-campus,
online and face-to-face, while also participating in college-wide activities.

ASSISTANT PROFESSOR OF ACCOUNTING

Apply for Position

Institution: Small-Time College

Location: Carlsbad, CA

Category: Faculty—Business/Accounting

Posted: 06/18/2016

Application Due: Open Until Filled

Type: Full Time

Assistant Professor of Accounting

The Division of Business at Small-Time College located in Carlsbad, CA, invites appli-
cations for the position of full-time, tenure track Assistant Professor of Accounting
Faculty position reporting to the Chair of the Division of Business.

This faculty position is primarily responsible for traditional and online course develop-
ment and instruction in the Accounting Bachelor of Arts Degree at the traditional based
campus programs, the online and F2F undergraduate off-campus degree completion
programs, and the Accounting track in the MBA program. Courses can include, but are
not limited to, Accounting Information Systems, Advanced Cost Accounting, Auditing,
and Financial Management. Potential graduate-level courses include Corporate Tax and
Nonprofit and Government Accounting.

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Chapter 6 • Selecting New Employees 2 9

The faculty member is also responsible for actively participating in all aspects of col-
lege community (teaching, scholarship, and service) in alignment with the faculty hand-
book and to serve a primary role in the governance and organization of the program,
including academic planning, curriculum development and review, advising and program
improvement.

Duties and Responsibilities

• Assumes responsibility for assigned course instruction online, off-campus, and
on-campus in both undergraduate and graduate courses.

• Facilitates learning and caring environment, which encourages critical thinking,
investigation, self-direction, and respect for the uniqueness of each individual.

• Leads and/or participates in course development, curriculum planning, implemen-
tation, and evaluation.

• Completes required CPE and maintains current license.
• Attends Business Club meetings with senior accounting students.
• Assists students in finding internships at local area CPA and other firms.
• Coordinates students to perform internship and community service at the Volunteer

Income Tax Assistance (VITA).
• Supports the collection of IACBE results related to the accounting students on cam-

pus and off-campus.
• Demonstrates knowledge of and implementation of the general education philosophy.
• Serves on College committees as appointed or elected.
• Participates in peer, self, and course review.
• Promotes the mission and purposes of the College in various internal and external

activities.
• Evaluates student progress and maintains appropriate records.
• Advises students in course-related matters and makes referrals to appropriate

resources.
• Remains current with the trends, issues, and practices in the discipline.
• Actively involved in professional development and scholarly activities.
• Assists the Chair of the department with administrative tasks as needed and

appointed.
• Participates in recruitment and retention efforts, specific to the program, as needed.
• Performs other duties as assigned.
• Contributes to the evaluation of student academic achievement and other evaluative

processes of the College.
• Adheres to College and System policies and procedures as indicated in the Faculty

Handbook, College policies, and in other applicable regulatory documents.
• Upholds, promotes, and demonstrates behaviors consistent with the Mission and

Core Values (Faith, Community, Justice, and Excellence) of the College.

Minimum Qualifications

CPA or CMA (current license) with a Master’s degree in the accounting field. Must have
significant experience in the field of accounting, possess effective oral and written
communication and interpersonal skills, documented excellence in online teaching,

(Continued)

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Part II • Staffing3 0

and be committed to the concepts of innovation and excellence in accounting education.
Candidate must maintain active and current membership in professional and commu-
nity organizations. The candidate must effectively use Microsoft Office Suite software
and other accounting software.

Preferred Qualifications

Doctorate degree (related field). College-level teaching experience in accounting and
experience with web-based course delivery and instructional technology are highly
desirable. Learning Management System experience preferred, Moodle experience
highly preferred. Ability to use Sage 50/QuickBooks and SAP software is very desirable.

To Apply

Send cover letter, transcripts, CV/résumé, a statement of teaching philosophy and con-
tact information for three (3) professional references (as Word or PDF attachments)
via email to: [email protected] or by regular mail to Dr. Maxwell Bannister, Chair of the
Division of Business, Small-Time College, 291 Golf Ball Street, Carlsbad, CA 01050.

Review of applications begins immediately and will continue until the position is filled.

(Continued)

4. Résumés (in education they are called CVs) are collected and distributed among
the committee members.

5. Preliminary screening requires weeding out the applicants who don’t meet the
minimum qualifications. The process includes a meeting to drop those candi-
dates who didn’t have a CPA or a Master’s in accounting. The next step could be
to drop those candidates who lack teaching experience. There is a great deal of
debate deciding on the top 10 candidates if you have a pile of about 100 appli-
cants. The top 10 applicants are then called by the HR Department to see if they
are still interested in the position and if they would be able to accept the position
within the salary range the professor is expected to be paid. The salary range is
determined by the salaries offered to similar faculty at Small-Time College.

6. Selection interviews: The top 10 candidates are often reduced to the top three
to five candidates if they are still interested in the position and the salary range.
The final five candidates are then called to arrange a date and time for their
initial interview. Sometimes, all the candidates are interviewed on the same
day. That makes a long day for the search committee and HR. Otherwise, it is
important to interview candidates in as few days as possible.

7. Conducting the interview actually starts before the actual interviews. The com-
mittee often creates a list of appropriate questions that will be asked to all appli-
cants. Each person on the committee often asks specific questions related to his
or her personal area of expertise (which could be teaching accounting courses,

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Chapter 6 • Selecting New Employees 31

experience advising students, or working with students on projects outside the
classroom). This ensures that all candidates are asked the same questions.

Once the interview begins, it is important to review the realistic job preview
(RJP) and make sure the candidate understands the nature of the job. The RJP is
a review of all of the tasks and requirements of the job, both good and bad. The
committee will want to make sure the candidates have as much information as
possible about the job so they are aware of the tasks to be completed if they are
offered the position.

8. Background checks (which can include reference checks, credit checks, crim-
inal background checks, and web checks) need to be used in a professional
and ethical manner. For example, reference checks should not be conducted
without the consent of the candidate. It is important to research only for rel-
evant data. There is no need to dig for information beyond the scope of the
search. Keep the search related to the specific information for the job that is
being filled.2

Reference checks often confirm a candidate did work at a previous organi-
zation. But it is important to understand that candidates don’t pick references
unless they are most likely going to give them a positive referral. Web searches
on sites such as LinkedIn have become more popular as a source for checking
the candidate’s background and references.

9. Selecting the candidate and offering the job often means the top two candi-
dates are asked to return for a second interview. They most likely will meet the
dean and Small-Time College president. The final decision normally rests with
the college president, who decides what is best for the college. Offering the
job to the candidate is not quite as simple as it sounds. The candidate might
decide to stay with his or her current employer or might disagree on salary, a
certain benefit, or even the job itself. If the first candidate decides not to accept
the position, the search committee, dean, and president have to decide if they
would like to offer the job to the second candidate or do an entirely new search.

Case Questions

1. What would be a good personality fit for
an accounting professor at Small-Time
College?

2. Should the preliminary screening
process result in a top 10 of applicants?

3. What is the role of the Uniform
Guidelines on Employee Selection
Process (UGESP)?

4. Which step did the case skip in regard
to the steps in the selection process?

5. Why are background checks harder to
conduct than it might appear?

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Part II • Staffing3 2

Case 6.2. Looking for
“Organizational Fit”: Walter’s
Unstructured Interview at Google
Walter was proud to earn his bachelor’s degree in computer science from Small-Time
College in California. That was almost three years ago, and he felt as if it was even
longer since the field of computer science changes so quickly.

Walter was able to find a nice “Comp Sci” job at Small-Time College. He inter-
viewed for the job and remembers the key questions were what his greatest strengths
(which he answered as programming skills) and his greatest weakness (he didn’t have
one prepared to discuss) were. Walter considered this a structured interview since
one of the interviewers from Small-Time College said she was responsible for asking
certain questions. After working for three years at Small-Time College, Walter felt he
had a good personality-job fit, since he was a valuable member of the Information
Technology Department. Walter also felt he had proven he had good ability-job fit,
since his three years of experience as a computer programmer at the college proved
he had the skills to complete the job. Most important, Walter felt he had a perfect
person-organization fit, since he was liked by everyone at the college and fit in very
well in the educational culture.

Recently, Walter was contacted by someone on LinkedIn to apply for a new posi-
tion at Google. Like everyone else, Walter had heard stories that Google was a great
place to work. He even watched the movie The Intern to get a better glimpse of what
takes place at Google.

Walter also researched the company (using Google Search) and found out Google
uses a unique way to find and match people with jobs at the amazing company.3

First, Google used its extremely creative way of thinking to create a vice- president
of people operations. Like most companies, Walter’s current employer calls this posi-
tion the vice-president of human resources.

Second, Google uses its data analysis skills to analyze vast amounts of data about
what works and what doesn’t work during the hiring process. One result they found
was that interviews had a zero relationship with the success the person actually had
on the job. Consequently, Google doesn’t believe in the traditional metrics used in
the hiring process. These traditional metrics include GPA, SAT scores, or the prestige
of college the candidate attended. Instead, creative companies like Google measure
a candidate on behaviors, such as their level of happiness, ability to work well with
other people, if they like a challenge, if they seek information, and if they are willing
to adapt.4

Walter spoke to the assistant in people operations and set up an interview for
one week later. He was warmly received by Google and quickly fell in love with
the colorful and wide open layout of the headquarters. In a casual and relaxed
atmosphere, he sat down with three different Google employees and basically
explained how he grew up in California and what led him down the path of
computer science.

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Chapter 6 • Selecting New Employees 3 3

Walter thought he might be asked one of those out-of-the-box interview questions,
such as how many gasoline stations would you expect to find in a city of 160,000
people. But his research also uncovered that Google felt these types of questions were
biased since they tended to just make the interviewer look smart since they had time
to work out the answers.

Since Walter wanted to be a good match, he went with the flow of the interview
and became much more relaxed than he could remember in his interview with his
current company. He expressed how he liked being happy at work, enjoyed program-
ming computers with a team of employees, and especially enjoyed interacting with
clients to help them solve their problems. Walter enjoyed the unstructured inter-
view and felt he was doing a good job interacting with the Google interviewers. He
expected the Google interview was going to a least be a semi-structured interview,
which would combine some preplanned and some unplanned questions. However,
the Google interviewers appeared to not have any prepared questions and instead
asked all unplanned questions.

Walter went on to explain how he had been promoted three times in three years
and enjoyed the challenge each positioned offered. He liked the “go for it attitude” at
his present employer. Walter also knew from his research that Google liked outgoing,
happy employees that worked well with their fellow workers and customers.

In the end, Walter did not get the job for reasons he never learned. Although
he was disappointed, he also knew that Facebook once turned down Brian Acton
for a job and he went on to co-found WhatsApp which he sold to Facebook for $19
billion.5 Walter hoped a similar fate was in his future and he could one day sell his
ideas to Google.

Walter went back to his current job with renewed passion and energy. He was
excited to have spent time at Google and hoped to bring back some of what he
learned and apply it to his own job and division. He also intended to work closer than
ever with his own Human Resources Department to look for opportunities in his
current company. He was hoping to find a “fast track” program that would speed up
his own development, so he could create a more open and creative company culture
along the way.

Walter always wondered what his life would have been like if he had been hired
by Google. He thought he was going to be an excellent fit in the Google organiza-
tional culture. He felt he had a good personality-job fit since he demonstrated in the
interviews that he was an outgoing computer programmer who would work well with
Google’s unique corporate culture. Walter also felt he was a great candidate in regard
to ability-job fit since his three years of experience in his current programming job
showed he could apply his technical skills as a computer programmer in a work envi-
ronment. Walter also felt he was a good person-organization fit since he would work
very well within Google’s creative-organizational culture. In the end, Walter was
happy to grow from the experience of trying to get a job at Google. He definitely had
more appreciation for his current job since his employer had been smart enough to
give him a job three years before. He was ready to repay that by doing an excellent
job going into the future.

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Part II • Staffing3 4

Case Questions

1. What do you think the vice president of
people actually does at Google?

2. Did Walter experience a structured,
semistructured, or unstructured
interview when he first left college?

3. What are your own greatest strengths
and weaknesses as a prospective
employee?

4. How would you answer if someone in
HR asked you an unstructured question
such as how many gas stations there are
in a city of 160,000?

5. Design a form to help Google compare
different candidates. HINT: You can
list some different names of people in
the rows. The column headings need
to represent the areas where Google
is looking for in an interview (Happy
Employees, Employees Willing to Take
on a Challenge, Creative Employees, etc.)

6. Why do you think Google felt Walter
was not a good organizational fit for
the company?

Notes

1. http://www.uniformguidelines.com/uniformguidelines.html.
2. Lu, Andrew, “5 Tips to Keep Reference Checks Legal,” FindLaw.com, December 12, 2012.
3. Nisen, Max, “Moneyball at Work: They’ve Discovered What Really Makes a Great Employee

at Work,” Business Insider, May 6, 2013.

4. Nisen, Max, “Google HR Boss Explains Why GPA and Most Interviews Are Useless,” Business
Insider, June 19, 2013.

5. Wood, Zoe, “Facebook Turned Down WhatsApp Co-Founder Brian Acton for Job in 2009,”
The Guardian, February 20, 2014.

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Human Resources Management Issues, Challenges and Trends:
“Now and Around the Corner”, pages 185–200.
Copyright © 2019 by Information Age Publishing
All rights of reproduction in any form reserved. 185

CHAPTER 9

MILLENNIAL WORKERS AND
THE EMPLOYEE ENGAGEMENT

PHENOMENON
Has the Wave Crested?

Angela N. Spranger and Sierra Chen

INTRODUCTION

The concept of employee engagement has become ambiguous, a work-related psy-
chological measure influenced by factors that scholars and researchers have focused
on identifying. While the realm of research scholars seeks to identify it, the ob-
vious effects of employee engagement, or, rather, disengagement are consistently
observed in the workplace. A recent Gallup survey suggested that only 13% of em-
ployees around the globe are engaged on the job and disengaged workers outnum-
ber engaged workers nearly two to one (Rana, Ardichvili, & Tkachenko, 2014).
Research is trailing behind a phenomenon that is dominating the workplace.

By determining the factors that can predict levels of employee engagement,
organizations can focus their efforts on active improvement. But, more impor-
tantly, by identifying employees’ expectations of the factors of employee engage-
ment, organizations can better understand the needs of their employees and tailor

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186 • ANGELA N. SPRANGER & SIERRA CHEN

their organizational goals directly toward those needs. In a 1990 study, Kahn ad-
dressed the deeper components of engagement (meaningfulness, safety, and psy-
chological availability) which form the basis of addressing what HR professionals
and executives can do to help ensure their associates feel seen, safe, and valued
(Spranger, 2015) in the workplace. These components of engagement create the
foundation of the psychological expectations of employees and, as a result, their
expectations of their managers and organizations.

In this chapter, we explore the employee engagement phenomenon to better un-
derstand the expectations of visibility (feelings or perceptions of being seen), safety,
and value as related to engagement, particularly regarding the expectations of mil-
lennials entering the workforce. By studying the engagement phenomenon and the
factors that impact it from the perspective of millennials and their expectations,
HR professionals and executives can determine areas of change that might inject
positive adaptation in their organizations. In this chapter, we seek to decrease the
ambiguousness of the concept of employee engagement by determining millennials’
expectations going into the workplace instead of focusing on their experiences in
the workplace or after the fact. A primary research question then is, what are millen-
nials’ expectations of visibility, safety, and value in the workplace? Secondarily, if
these expectations are not met, how does it impact their level of engagement?

LITERATURE REVIEW

Employee engagement is a phenomenon that is dominating the workforce and
organizational culture. It is a concept substantiated by a rigorous academic con-
versation, which has caught up with the initial leadership of the consulting and
practitioner community. As the significance of employee engagement becomes
more firmly set in organizational culture, the generations are shifting, raising new
questions about how an organization should best engage employees from differ-
ent stages of life. Baby Boomers, one of the largest generations in history, are
preparing to retire from the workforce while Millennials are flooding in with new
expectations, demands, and work habits. Organizations must brace themselves
for the changes that are about to occur, understanding how to engage millennials
who will, by 2025, make up about 75% of the workforce (Deloitte, 2014; Don-
ston-Miller, 2016). At its core, employee engagement manifests itself in the idea
that an employee who feels seen, safe, and valued in the workplace will be more
engaged. In this conceptual chapter, we emphasize the foundations of the term
“employee engagement,” and relate it to the current expectations of millennials as
a young, technologically advanced generation that will bring new ideas, but also
new expectations of visibility, safety, and value.

Defining Employee Engagement

Employee engagement is an ambiguous concept discussed by researchers, but
difficult to define in clear, concrete terms. However, there are several founda-

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Millennial Workers and the Employee Engagement Phenomenon • 187

tions for the concept on which my research was built. The first foundation was
Maslow’s Hierarchy of Needs in 1970, a straightforward, conceptual framework
for understanding the importance of fulfilling basic human needs (Kahn, 1990;
Shuck, Rocco, & Albornoz, 2011). This theory of motivation relies on a model
which arranges human needs in order of necessity, suggesting that higher-level
needs cannot be met until lower-level needs have been met. The needs are ar-
ranged in a pyramid shape, demonstrating the most critical needs to survival as the
lowest needs on the hierarchy according to foundational necessity.

The hierarchy’s bottom level represents an individual’s physiological needs;
the theory suggests that these are the most potent of needs for human survival.
This level includes needs such as food, water, and shelter (Shuck, Rocco, & Al-
bornoz, 2011). The next level is safety, which is the feeling of personal protection
and control over one’s life. This need provides a fundamental concept of the idea
of the importance of safety in the workplace. Humans have an inherent need to
feel in control over their lives and personally protected. It also includes the need
to feel a part of something bigger than oneself. Environments that do not foster
this element of safety may be overly competitive and cold, which discourages
relationship development and reduces productivity and innovation. In Kahn’s
employee engagement framework, safety promotes meaningfulness and psycho-
logical availability. According to Kahn, employees who do not feel safe become
cognitively, emotionally, and physically “paralyzed” (Kahn, 1990).

The need for love and belonging is closely intertwined with the need for safety,
as the need to develop relationships is especially prevalent in the workplace. Em-
ployees develop several relationships at work, all of which have the potential to
influence employees’ outcomes and experiences. Employees who interpret rela-
tionships with co-workers as positive are more likely to experience a positive
workplace climate, which leads to higher employee engagement (Shuck, Owen,
Manthos, Quirk & Rhoades, 2016). The importance of a mentor in the workplace
also reflects this shared need for love and belonging, while underscoring the need
to be seen and valued. Mentorship allows for more inexperienced employees to be
recognized by a more experienced employee or manager which makes them feel
included in the workplace.

Once the need to feel safe and experience love and belonging is satisfied, the
need for esteem becomes very relevant as employees work to achieve career goals,
manifesting the desire for respect and recognition. The need for self-actualization
finishes the hierarchy with a need to realize potential and “become everything
one is capable of becoming” (Maslow, 1970; Shuck, Rocco, & Albornoz, 2011).
According to Kahn, self-actualization, the need to realize potential, parallels em-
ployee engagement (Kahn, 1990). If the most basic needs such as physiological
needs, safety, love and belonging, and esteem needs are met, employees will be
more equipped to realize their potential by sharing their knowledge and creating
opportunities for other people.

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188 • ANGELA N. SPRANGER & SIERRA CHEN

Maslow’s Hierarchy of Needs represent some of the most basic human needs
that manifest themselves in humans and, therefore, organizations in which hu-
mans work and seek fulfillment. Employees within an organization are driven by
an inherent need to be seen, safe, and valued. When such constructs are fulfilled,
it enhances employee well-being and satisfaction in the workplace.

The second foundation for understanding employee engagement comes from
Kahn’s 1990 article which laid a psychological framework for employee engage-
ment. Kahn emphasized the fact that meaningfulness, safety, and availability are
all key factors in determining levels of engagement (Kahn, 1990; Shuck, Rocco,
Albornoz, 2011). Kahn defined meaningfulness as the “positive sense of return on
investments of self in role performance,” safety as “the ability to show one’s self
without fear or negative consequences to self-image, status, or career,” and avail-
ability as “the sense of possessing the physical, emotional, and psychological re-
sources necessary for the competition of work” (Kahn, 1990). According to these
three psychological constructs (meaningfulness, safety, and availability), Kahn
asserted that when individuals are engaged, they bring all aspects of themselves
(cognitive, emotional, and physical) to the performance of their work role. Thus,
employee engagement represents the “simultaneous employment and expression of
a person’s preferred self in task behaviors that promote connections to work and to
others, personal presence, and active, full role performance” (Kahn, 1990; Valentin,
Valentin, & Nafukho, 2015). Utilizing this psychological foundation, we can also
assign meaning to the difference between engagement and disengagement.

The concept of disengagement represents a clearly different phenomenon from
simply low levels of engagement. Kahn defined disengagement as the “uncou-
pling of selves from work roles; people withdraw and defend themselves physi-
cally, cognitively, or emotionally during role performances” (Kahn, 2010; Saks
& Gruman, 2014). Shuck, Zigarmi and Owen furthered this conversation by in-
troducing a study that showed engagement as an experienced and complex psy-
chological phenomenon that is experienced within the context of an employee’s
experience (2015). As it relates to this chapter, an employee who does not feel
seen, safe, and valued in the workplace will not be engaged. Additionally, the
level of that employee’s disengagement will depend on the degree to which he
or she perceives himself or herself as invisible, in danger, or of little value to the
company. Human resource management and HR development professionals may
engage employees by actively ensuring that they feel comfortable and appreciated
in the workplace. This is not to suggest that Millennials, or any other employees,
should be indulged or have policies and procedures relaxed to accommodate them
in the workplace. Nor do we suggest that employees can, or ought to, be made
to feel completely comfortable in the workplace at all times. Still, organizational
development initiatives that intentionally address employees’ needs to feel seen,
safe, and valued in the workplace will yield significant impacts on the organiza-
tion’s culture, and the individual and organizational outcomes that are a proven
result of high employee engagement.

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Millennial Workers and the Employee Engagement Phenomenon • 189

Maslach, Schaufeli, and Leiter (2001) furthered the development of the concept
of engagement by defining it as the opposite of burnout. By defining engagement as
“an energetic state of involvement with personally fulfilling activities that enhance
one’s state of professional efficacy,” the researchers characterized engagement by
energy, involvement, and efficacy (Saks & Gruman, 2014). If this is true, we can
add these components to our understanding of what engagement and disengage-
ment are and how they affect the workplace and organizational outcomes. In their
2001 article, Maslach, Schaufeli and Leiter researched the idea that engagement is
characterized by high levels of activation and pleasure, in that employees who are
engaged in work are less susceptible to burnout because stress factors are reduced
and replaced with satisfaction (Valentin, Valentin, & Nafukho, 2015).

Adding another dimension to the research on employee engagement, Macey
and Schneider focused on the idea that employees may be predisposed to certain
positive outlooks based on personality characteristics (Macey & Schneider, 2008;
Shuck, Rocco, & Albornoz, 2011). These researchers have proposed that positive
outlooks on the workplace may be based on innate personality characteristics and
suggested that employees with a proactive personality may be more likely to be
engaged in their work (Macey & Schneider, 2008; Shuck, Rocco & Albornoz,
2011). Instead of looking at employee engagement from an intrinsic, psychologi-
cal perspective, they focused their research efforts on the external manifestation
of internal employee satisfaction.

From this abbreviated summary of contemporary employee engagement re-
search, and using Maslow’s hierarchy of needs as a foundational concept, we
move to considerations of the actual, practical significance of employee engage-
ment. For this chapter, we define employee engagement as an employee’s in-
clination to both internally and externally express satisfaction in the workplace
according to an organization’s efforts to make their employees feel seen, safe, and
valued. We have taken Maslow’s hierarchy of needs as a psychological foundation
to address the factors that affect an employee’s motivation in the workplace. From
there, we incorporate the work of Kahn (1990) who explains employee engage-
ment as an employee’s perceptions of safety and meaningfulness combined with
his or her psychological availability (or, the amount of cognitive energy he or she
dedicates to the work). Finally, we acknowledge disengagement as a separate,
important phenomenon as noted by Kahn (2010), Saks and Gruman (2014), and
Maslach, Schaufeli and Leiter (2001).

THE SIGNIFICANCE OF EMPLOYEE ENGAGEMENT

There are several correlations and predictive relationships that can be observed
from high and low levels of engagement in the workplace. These include en-
hanced employee well-being, improved productivity, positive financial business
outcome, positive workplace climate, and reduced levels of burnout. Many orga-
nizations believe that employee engagement is a dominant source of competitive
advantage on the basic premise that happy/engaged employees will perform better

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190 • ANGELA N. SPRANGER & SIERRA CHEN

due to their connectedness to the organization (Saks & Gruman, 2014). Workers
who feel supported, safe, and provided opportunities for learning are more likely
to engage (Shuck, Rocco, & Albornoz, 2011).

In 2014, Kerns suggested that workforce engagement exerts an important in-
fluence on happiness and well-being in the workplace setting. Employees who
find their relationships with co-workers to be positive and trusting are more likely
to exhibit higher levels of performance (Shuck et al., 2016). Forret and Love
(2008) defined trust in coworkers as “holding confident positive expectations in
situations involving risk with coworkers” (p. 249). This workplace concept, trust,
has received significant attention in management research, leading to empirical
determination of its relationship to increased organizational commitment, overall
workplace trust, greater proactive behavior in the workplace, and lower intent
to quit. The researchers investigated the relationship of perceptions of justice as
independent variables (distributive, procedural, and interactional justice) to co-
worker trust and morale at the group level of analysis (Forret & Love, 2008). By
analyzing survey data gathered from 264 employees at six small companies in the
Midwestern U.S., Forret and Love controlled for gender, marital status, education,
position and company tenure.

Organizational justice as a concept overall is based on fairness perceptions.
Distributive justice is defined as perceived fairness of outcomes received, while
procedural justice is defined as perceived fairness of company procedures used to
determine those outcomes. Interactional justice is defined as the manner in which
results are explained. It addresses the “quality of interpersonal processes and
treatment of individuals (i.e., were they spoken to with sincerity and sensitivity)
as well as the extent to which the reasons behind the outcome are explained” (For-
ret & Love, 2008, p. 249). The three subconstructs of organizational justice are
interrelated but have been determined to be empirically distinct, accounting for
“unique incremental variance” (Forret & Love, 2008, p. 249). Distributive justice
predicts outcome satisfaction, withdrawal and OCB. It has also been associated
with job and pay satisfaction, satisfaction with management, trust in organiza-
tion and trust in manager. Procedural justice predicts of outcome satisfaction, job
satisfaction, performance, organizational commitment, withdrawal and counter-
productive work behaviors, cooperative conflict management, aggression towards
management, and trust in management. Interactional justice related to evaluations
of authority figures, job satisfaction, OCB, outcome satisfaction, commitment,
withdrawal behavior and performance. Additionally, it predicts supervisor rela-
tionship quality, intent to quit, and intent to reduce work effort.

Forret and Love (2008) found support for all of the hypotheses in their cross-
sectional field study, with positive associations and regression analyses show-
ing that each variable predicted trust. Longitudinal research would show how
justice perceptions influence coworker trust, but this cross-sectional self-report
survey study left room for common method variance. Forret and Love (2008)
made recommendations for increasing the subconstructs under organizational jus-

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Millennial Workers and the Employee Engagement Phenomenon • 191

tice perceptions, in order to increase trust and other organizational outcomes. To
improve perceptions of procedural justice, managers should ensure procedures
are fair, involve employee input, and allow for formal appeals mechanisms. Hu-
man resource managers can improve perceptions of distributive justice by helping
employees understand how organizational compensation works so that the em-
ployees understand reward allocation. Salary transparency, to the degree possible,
helps with this—understanding how salaries are set, visibility on the company’s
effort to eliminate salary inequality, and other compensation-related initiatives
will help improve distributive justice perceptions. Management should get a bet-
ter understand of what their employees actually view as rewards, or as stated
earlier in this chapter what motivates their employees, to make sure distribution is
fair. To improve interactional justice, managers must treat employees with respect
and dignity regardless of performance level, employing active listening without
defensiveness when questioned.

Simons (2002) also discusses the potential gap between leaders’ espoused and
enacted values, stating that organizational norms emerge from the employees’
experience of trust stemming from poor word / deed alignment in their leaders
and colleagues. In a conceptual paper investigating trust as a highly complex con-
struct which underpins the reciprocal commitments between employees and their
employers, Simons enumerates multiple behavioral antecedents which create
employee perceptions and combine with their interpretations of those behaviors,
leading to specific consequences of a concept Simons describes as behavioral in-
tegrity. Those consequences include specific individual-level organizational out-
comes, such as employee willingness to promote and implement change, intent to
stay, organizational citizenship behaviors, and employee performance (Simons,
2002). Identifying the definitions and interrelationships between trust, credibility,
psychological contracts, and hypocrisy, Simons suggests that behavioral integrity
represents a perceived, ascribed trait that shows consistent alignment between a
colleague or supervisor’s words and deeds. In this chapter, we connect employees’
perception of safety with the concept of trust in manager and trust in organization.
Further, we suggest that a high degree of trust in the workplace manifests as high
perceived value as well.

When employees are given opportunities to be seen and valued, such as train-
ing development opportunities, career development opportunities, resources and
benefits given by the manager, or mentorship opportunities, they will also be more
likely to engage (Rana, Ardichvili, & Tkachenko, 2014). These feelings of safety
and value/recognition in the workplace demonstrate a positive predictive correla-
tion between relationships and engagement. Kerns also suggested that engage-
ment stirs employee optimism about positively impacting products, services, and
quality, which increases the customer experience as well (Rana, Ardichvili, &
Tkachenko, 2014).

Employee engagement also has a correlation with several factors that are re-
duced when employees are adequately engaged in the workplace. Both theory

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192 • ANGELA N. SPRANGER & SIERRA CHEN

and practice support the clear predictive value of a culture of high engagement—
not just high engagement scores. Practitioner research such as the Gallup meta-
analysis of studies in 1997 popularized efforts to investigate the relationship of
“employee engagement” as a workplace phenomenon with business and work
unit profitability, productivity, employee retention, and customer satisfaction and
loyalty across 1,135 business units (Harter et al., 2006). Later, the concept of “em-
ployee passion” emerged, briefly, in practitioner research. Zigarmi, Blanchard,
Essary, and Houson (2017) suggests that employee passion encompasses such
empirical constructs as intent to stay, organizational commitment, job commit-
ment, discretionary effort, and employee endorsement. To have employee pas-
sion, certain organizational and job characteristics must exist: meaningful work,
autonomy, career growth, recognition, collaboration, fairness, connection to lead-
ers, and connection to colleagues. More recent scholarly research studies have
shown that high engagement leads to a decrease in theft, turnover, burnout, and
unhappiness (Kerns, 2014; Saks & Gruman, 2014). Researchers generally exe-
cute studies of employee engagement at the workgroup or business unit level of
analysis, because at this level the data are aggregated and reported generally to
maintain employees’ anonymity and confidentiality. Measurable outcomes at the
workgroup or business unit level of analysis include customer loyalty, profitabil-
ity, productivity, employee turnover, and safety statistics.

When employees are engaged and satisfied in feeling seen, safe, and valued by
their organization and employers, it promotes a sense of meaningfulness that al-
lows employees to view their role in the organization as valuable and worthwhile.
Employees need to have a sense of return on their cognitive and emotional invest-
ments before they are willing to fully engage with their work (Rana, Ardichvili, &
Tkachenko, 2014). When employees’ work and workplace give them satisfaction,
it discourages them from leaving the organization. Employees who do not feel
seen, safe, or valued in the workplace become cognitively and emotionally disen-
gaged, which leads to low productivity in the organization (Kahn, 1990).

EMPLOYEE ENGAGEMENT AND MILLENNIALS

According to recent Gallup surveys, millennials are the least engaged generation
in the workforce as organizations struggle to integrate different values and expec-
tations in a workplace that has been shaped by Baby Boomers and Generation X
(Adkins, n.d.; Rigoni & Adkins, n.d.). Around 86 million millennials will be in the
workplace by 2020, making up about 35% of the total workforce (Asghar, 2014;
Kurian, 2017). By 2025, the percentage will rise to millennials representing an es-
timated 75% of the workforce, as ten thousand Baby Boomers reach age 65 every
day in the United States and begin to retire (Dannar, 2013). As the Baby Boomers
retire, one of the largest generations in the United States will exit the workforce.
This leaves room for the Millennials to integrate themselves into those openings,
entering companies with expectations that differ dramatically from those of Baby
Boomers (Asghar, 2014).

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Millennial Workers and the Employee Engagement Phenomenon • 193

Surveys also show that 93% of millennials left their employer to change roles
and 21% say that they have changed jobs within the past year, which is signifi-
cantly more than the turnover rate of non-millennials (Adkins, n.d.; Rigoni &
Adkins, n.d.). As mentioned previously, one of the reasons that employee en-
gagement is significant to the effectiveness of a company is because productivity
increases profitability. However, when employees are disengaged, which triggers
high turnover, consultants estimate that it costs the U.S. economy $30.5 billion
annually (Adkins, n.d.).

Gallup found that only 29% of millennials are engaged at work, meaning that
only 29% are emotionally and behaviorally connected to their job and company.
On the other hand, 16% of millennials are actively disengaged, meaning that they
are actively working against the goals of the company and seeking to do damage
to it. This leaves the remaining 55% disengaged workers who are interested in
simply completing their tasks and leaving (Adkins, n.d.). Companies need to give
these workers reasons to stay, attracting, retaining, and engaging their employees
in the workplace so that they feel seen, safe, and valued. It is important to under-
stand the millennials’ levels of engagement now, before they make up the larg-
est portion of the workforce. By understanding the expectations that Millennials
bring to the workforce, companies can be more prepared and equipped to engage
them and ensure that they feel seen, safe, and valued in the workplace.

Who are the Millennials?

In an increasingly diverse, multigenerational workforce, the challenges of
navigating issues of communication and organizational commitment has garnered
increasing attention from Human resources professionals and executives, as well
as management scholars and researchers. Rodriguez (2006) stated that the big-
gest, most important factor driving executive level diversity and inclusion strat-
egy would be the need to engage all employees’ skills and creativity, and use
those assets to add value to the customer experience. The term “diversity” in itself
evokes the idea of differentiation in the workplace, and it is appropriate to identify
Millennials in the context of varying qualities, experiences, work styles and val-
ues that make individuals unique. Diversity factors may be surface level, such as
those which are visible and easily observed (age, race, gender, some disabilities)
or it may be deep level, involving religion, some disabilities, sexual orientation
and ethnicity. In the contemporary workforce the four dominant groups represent
the Veterans, or Traditionalists (those born before 1946), Baby Boomers (born
mid-1940s to mid-1960s), Generation Xers (mid-1960s to 1980), and Millennials
(1980 to 2000). The latest generation, Gen Z, has reached working age (those born
from 2000 forward) and will bring even more diversity and specific expectations
into the workplace.

The Veteran workers in the United States workforce are the survivors of
World War II and the Great Depression. They tend to hold great pride in and
loyalty toward American values, and have significant respect for authority and

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194 • ANGELA N. SPRANGER & SIERRA CHEN

chain of command. Baby Boomers, the children of the returning Veterans, value
work but see it as a competition, as they had to prove themselves at every level
of achievement they earned. Members of Generation X tend to desire feedback
and flexibility, which require clear communication. However, Gen Xers resent
close supervision and work to live, rather than operating under the need to prove
their dedication through long hours and high visibility. The Millennials are the
smartest, cleverest, healthiest, most wanted generation to have ever existed. They
are quickly bored by routine, confident, assertive, and friendly with their parents
(who may have adopted an overly-involved role in their lives, thus earning the
term “helicopter parent”) (Gurchiek, 2008).

There is an impending talent shortage, as the experienced individual contrib-
utors and managers of people from the Veteran and Baby Boomer generations
exit the workforce. Additionally, and worse, traditionally there has been a limited
transfer of knowledge between the groups. Gurchiek (2008) suggests that the gen-
erations rarely interact in the workplace, such that employee engagement, trust,
and commitment are difficult to establish. Members of different generations on
the same team may not recognize each other’s skills and work ethics, or value one
another’s perspectives.

As mentioned earlier, Millennials are those individuals who were born between
1980 and 2000, between the ages of roughly 20 to early 30s. This generation will
soon represent the largest portion of the American workforce (Asghar, 2014). Also
known as Generation Y, the millennials have been described as globally aware,
technologically sophisticated, ambitious, team-oriented, narcissistic, socially in-
ept, and lacking in work ethic (Asghar, 2014; Dannar, 2013; Gibson, Greenwood,
& Murphy, 2009). Millennials are curious, questioning and results oriented, a
generation that accepts diversity and is comfortable with instant communication
and social networking (Gibson et al., 2009). They have, however, been given
names like the “Look at Me” generation to describe their overly self-confident,
self-centered, disloyal, and unmotivated stereotypes (Myers & Sadaghiani, 2010).

A generation’s values and behaviors are a manifestation of the relationship
between parents, siblings, influential people, the media, and historical events that
have a significant impact during formative years (Danner, 2013). Events such
as 9/11, Columbine and other violent tragedies (such as school and theater mass
shootings), and celebrity scandals have shaped millennials’ culture and perspec-
tive, causing them to alter their expectations of companies for which they work
(Gibson et al., 2009; Schweitzer & Lyons, 2010). Growing up in a true global
economy, most members of the generation experienced instant gratification of
microwave cooking, news and entertainment in small bites from music television
videos, early exposure to personal computers and other digital tools. Millennials
have experienced many influential events and now have an emphasis on an ethical
business culture and an organization that lives out its values.

Technology is an integral part of the millennial identity as they are the first
generation to be in continual communication with a network of friends and fam-

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Human Resources Management Issues, Challenges and Trends:
“Now and Around the Corner”, pages 145–162.
Copyright © 2019 by Information Age Publishing
All rights of reproduction in any form reserved. 145

CHAPTER 7

A CONSIDERATION OF SOCIAL
MEDIA MOVEMENTS ON

GENDER-RELATED HR POLICY
Angela N. Spranger and Brenna Gonsalves

INTRODUCTION

This chapter summarizes a review of the literature and media in our investiga-
tion of the impact of social media phenomena on corporate human resource (HR)
management policies. The purpose of our efforts is to identify, first, if there has
been any significant impact on gender-related HR policies attributable to the
#MeToo, #TimesUp, or other social media movements. We seek to analyze how
current gender-related social media movements encourage changes in business
through HR policy. For this preliminary analysis, we seek to indicate what has
emerged thus far in the literature, summarize the pilot data from an initial case
study, offer implications for research and for practice, and outline next steps for
further consideration. In this chapter we assess current literature on the workplace
phenomena of harassment (both sexual and psychological), bullying, and gender
stereotypes that lead to discrimination. We also examine leadership style, percep-
tions and expectations in the context of implicit leadership theory.

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AN: 2006258 ; Ronald R. Sims.; Human Resources Management Issues, Challenges and Trends: ‘Now and Around the Corner’
Account: s4264928.main.eds

146 • ANGELA N. SPRANGER & BRENNA GONSALVES

Human Resource (HR) Management and Gender-Related Policy:
What We Know

In business, HR is the department that deals with all things personnel. That is,
HR helps drive, manage, and facilitate the employment life cycle, from recruiting
and onboarding to retirement or termination, including strategic HR planning,
performance management, training and development, and employee engagement.
As the thought leaders and culture monitors of the organization, HR represents
the cornerstone of creating change in the workplace. Through effective change
management, including organizational unlearning, HR can facilitate more effec-
tive team development (even when that means hiring outsiders or terminating
noncompliant team members who violate organizational norms) and use employ-
ee engagement initiatives that improve sensitivity and inclusiveness, thereby in-
creasing productivity and morale. HR management policies and training on those
policies can create cultural changes in a business if used properly.

Why Research This Problem Now?

Renowned leadership author and speaker Barbara Kellerman suggested that
the last ten years have ushered in an end to traditional leader-follower roles and
dynamics. Instead, grassroots movements and follower-initiated campaigns have
changed the geopolitical landscape and may have equal impact in corporate set-
tings (Kellerman, 2012). While there are many articles written about the social
impact of contemporary rights movements, there is no body of literature yet that
addresses the impact of these movements on business practices. The recent re-
surgence of gay rights, racial equality, and women’s rights movements has gath-
ered formidable momentum. Grassroots movements create roles of influence for
their initiators and organizers. Pride Marches, #BlackLivesMatter, and #MeToo
are changing the social and cultural landscape of America. Hashtags and trends
on social media outlets such as Twitter (also Instagram, Facebook, Reddit and
Tumblr) allow people all over the globe to lend their voices to common causes.
We seek to engage the human resources community in a dialogue that addresses
HR policy concerns in light of these social media phenomena, within a theoretical
framework.

Since 2016, several high-profile sexual harassment allegations were revealed
in various news outlets and on social media platforms, primarily from the en-
tertainment industry. Issues such as gay rights, racial inequality protests, and
women’s rights movements are not new to America. But in the last few years, ob-
servers have noted a significant shift from complacency to activism, particularly
in politics and the entertainment industry. These fields have received particular
attention in the media due to the myriad allegations of harassment by high-pro-
file male figures. For example, Donald Trump, Bill O’Reilly, Bill Cosby, Harvey
Weinstein, and Matt Lauer are all celebrities in the entertainment industry who
have been accused of sexual harassment or assault. Even after such allegations,

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A Consideration of Social Media Movements on Gender-Related HR Policy • 147

Trump successfully crossed over from entertainment into politics. O’Reilly main-
tained an unrepentant stance and continued to sell books and participate in online
and onscreen controversi es. Following the Weinstein allegations, more and more
women have publicized similar allegations accusing a multitude of celebrities,
from Ed Westwick to James Franco. The common thread is that these were all
workplace occurrences, and they did not appear to be stopping.

Even as we prepared this chapter, new reports emerged of major corporations
having been forced to address their gender-related harassment policies. Specifi-
cally, Nike has “struggled with their efforts to market to women, and they’ve had
a lot of talent leave the organization” (Wallace, 2018). Women in workplaces like
Fox News, NBC’s Today Show, and Nike’s corporate organization have chosen
the “exit” option when they finally tired of misogynistic behaviors, examples of
which included males who “constantly would berate women, talk down to wom-
en, interrupt,” demean women’s contributions, and perhaps worst and most per-
vasive, excuse other men’s disrespectful actions and behaviors. The unfortunate
component to these stories is that, as with Nike’s Wallace, often women make the
appropriate complaints to management and HR but receive either explicit or im-
plicit messaging from the company that indicates the woman herself is to blame,
has given mixed messages or otherwise invited the bad behavior, or is too sensi-
tive. Or, the messaging may be that it is too difficult to execute the organizational
unlearning—discipline, retraining, or termination—or the bad actors. Perhaps the
accused is a high value executive, top sales performer, or other “untouchable.”
Until the impact of bad behavior in the workplace affects the company’s bottom
line, often no change takes place. Certainly, Nike’s “in-house problems” have had
a significant impact on retail performance; in the United States market, Adidas
and Under Armour are “gaining on them” (Wallace, 2018).

In Wallace’s (2018) case after leaving Nike, though, there is a positive strain of
news emerging from the company:

Nike is in the midst of a company-wide overhaul. An informal survey of women at
the Oregon headquarters revealed complaints of pay inequity, inappropriate work-
place behavior and a lack of career advancement for women. The survey was deliv-
ered to CEO Mark Parker. He’s apologized to people who were excluded and called
them brave for speaking out.

In the first half of 2018, the President of the company announced his retire-
ment. The next day, the Vice President announced his departure. Then, five more
senior leaders, and then four more, so that the total in May of 2018 is 11 execu-
tives who have either chosen to or been required to leave the company. There is a
cultural overhaul taking place, and former Nike employee Wallace attributes it to
the #MeToo movement.

An additional unifying factor has been the widespread outpouring of support on
social media from female (and male) entertainment industry professionals. With
stars opening up about their traumas, more women across the country and around

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148 • ANGELA N. SPRANGER & BRENNA GONSALVES

the world have felt comfortable adding to the dialogue. Women who have expe-
rienced similar workplace hardships use the hashtags and trends to reclaim their
confidence and engage in the campaign to “feel seen, safe, and valued” (Spranger,
2015) in the workplace. These women of varying ages are standing up for what
they believe and exposing a workplace phenomenon that been, one might say, an
open secret for too long. And in some cases, the women raise legal complaints in
a timely fashion so that their offenders (and the organizations where they work)
may be held legally accountable.

As a result of these cases, some of which resulted in lawsuits and others which
negatively impacted the brand of the company, organizations can no longer afford
to ignore issues of potential gender discrimination or harassment. The #MeToo,
#NastyWoman, and #TimesUp campaigns paved the way for conversations in the
workplace. Have these conversations spread to industries other than entertain-
ment and news media? As in those industries, women in other sectors have begun
to initiate dialogue and point out the unfortunate statistics surrounding these un-
comfortable topics. Implicit leadership theories, stereotypes, and leadership per-
ceptions all create an image of what employees expect from women in leadership
roles, but this often unfairly creates a lose-lose scenario for women interested
in climbing the corporate ladder. Potential challenges to this moment of incred-
ible cultural shift include women’s perceptions of women in leadership roles, as
well as increased hesitation from men to engage in the dialogue for fear of being
misunderstood or, worse, accused. The findings of our preliminary and follow-on
studies may help executives and HR practitioners to craft more effective harass-
ment policies, or to create them where they do not exist. Additionally, our findings
may lead to compelling future research opportunities. Recommendations as well
as implications for HR practice are provided.

Assumptions

We assume that employees in any organizational context want to “feel seen,
safe, and valued” (Spranger, 2015). People want to feel like they are receiving
the proper amount of attention and care from their employers. They want to go
to work and only worry about work and not their safety. And, finally, they want
to feel like what they are doing is appreciated. This chapter is organized around
that concept, and will focus primarily on the idea of safety for purposes of clarity.
Also, we use the concept of being “seen” interchangeably with being “heard.”
Since the goal of social media movements is not so much being physically seen,
or visible, as with marches, we focus on the expressed concerns that amplify
employees’ voices and reasoning behind why they are speaking up, even using
anonymous identities online, for their voices to be heard. Last, some of the so-
cial media movements referenced have been highly politicized or are political in
nature (such as the #NastyWoman and #IAmANastyWomanBecause movement).
Our goal is not to examine the politics but to state the facts about the social media
movements and consider their impact on gender-related HR policy.

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A Consideration of Social Media Movements on Gender-Related HR Policy • 149

PRELIMINARY LITERATURE REVIEW

Well-known psychologist Abraham Maslow (1943), created a hierarchy of needs
showcasing the most important needs for humans. Maslow’s Hierarchy of Needs
(1943) labels safety needs as second only to physiological needs such as food, wa-
ter, and sleep. Unfortunately for women, these needs have never been met fully.
Sexual harassment at work, as well as bullying, create an environment for women
where they do not enjoy going to work every day nor do they feel safe.

Seen, but Not Safe. There are two primary forms of sexual harassment dis-
cussed in college classes and basic HR compliance workshops. The first, quid pro
quo, is the one that is usually thought of when considering sexual harassment-
“this for that.” In legal terms, this means “making sexual favors a condition of any
workplace opportunity” like hiring, promotion, a raise, etc. (Williams & Lebsock,
2018, p. 8). The second form is more ambiguous than quid pro quo: it is the hos-
tile work environment. Legally, this form of harassment must be unwelcome, the
environment created must be one that any reasonable person would consider to
be hostile, and it must be severe or pervasive. Recent HR textbooks separate the
hostile work environment into two categories; that of the environment created by
supervisors and management, and a separate category for a hostile work environ-
ment created by peers, colleagues, customers or suppliers. Sexist comments fall
under the category of hostile work environment, and 82% of women and 74% of
men have reported hearing sexist comments at work (Williams & Lebsock, 2018).
Regardless of type, the number of women who have been sexually harassed at
some point during their career fluctuates anywhere between 60–80% depending
on the study (Williams & Lebsock, 2018).

The prevalence of psychological harassment, or bullying, is equally dismal.
Bullying is a category of antisocial workplace behavior (AWB) that is, as yet, law-
ful under federal and state laws. Even California, the leading edge for employee-
friendly law, has yet to pass anything stronger than a mandate for employers to
provide training on abusive conduct. And “abusive conduct” is defined differently
in different states. New York’s definition seems comprehensive:

Abusive conduct means

acts, omissions, or both, that a reasonable person would find abusive, based on the
severity, nature and frequency of the conduct, including, but not limited to:

repeated verbal abuse such as the use of derogatory remarks, insults and epithets;

verbal, nonverbal or physical conduct of a threatening, intimidating or humiliating
nature;

or the sabotage or undermining of an employee’s work performance.

It shall be considered an aggravating factor if the conduct exploited an employee’s
known psychological or physical illness or disability.

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150 • ANGELA N. SPRANGER & BRENNA GONSALVES

A single act normally shall not constitute abusive conduct, but an especially severe
and egregious act may meet this standard. (Segal, 2015, p. 118)

Unfortunately (trust the lawyers to remind us of this), attempting to put too
fine a point on what bullying is may create too much of a restrictive work envi-
ronment, in which poor performers may use the threat of a bullying accusation
to prevent managers from holding them accountable for their behavior, attitudes,
outcomes and results.

All across the United States, bullying is legal—if the victim is targeted be-
cause she is a competitor, of if the bully behaves equally badly towards everyone
on his team. If and only if the bullying behavior is rooted in hostility towards an
individual’s protected class status such as “race, gender, religion, national origin,
age, sexual orientation or disability” (Segal, 2015). The best that a complainant
can do is document the situation carefully, and then if they feel they must termi-
nate the employment relationship they may be able to file a wrongful constructive
discharge claim based on the documented psychological harassment, or bullying.

Women who work in the service sector, or in low-wage jobs, are the most
vulnerable. Hotel housekeepers, late night janitorial staff, restaurant workers, etc.
are just a few examples of these types of jobs. In 2011, 37% of the Equal Employ-
ment Opportunity Commission (EEOC) complaints filed by women came from
the restaurant industry alone- and that was seven years ago. In 2014, in a sur-
vey conducted about women restaurant workers, 80% had been harassed by col-
leagues, almost 80% had been harassed by coworkers, 67% had been harassed by
managers, and 52% of these women were harassed on a weekly basis (Williams
& Lebsock, 2018). Unfortunately, the EEOC has not yet published information
regarding statistics on business women being harassed at work. An article from an
alternate source claims, that from 2005 to 2015 professional, scientific, technical
services, finance and insurance, and management made up 10.36% of all harass-
ment claims made to the EEOC regardless of gender (Stewart, 2017). While it is
less likely for people in business to be harassed overall, harassment at work is still
an issue that needs addressing.

Harassment is not the only workplace concern regarding safety. Bullying is
another continuous trend making women feel unwanted and unsafe at work. Bul-
lying is described by Spranger and Mitchell (2018) as “repeated attempts to tor-
ment, wear down, or frustrate another person; it further compromises treatment
that provokes pressures intimidates or otherwise causes discomfort” (p. 9). Over-
all, it is estimated that 54 million Americans have been bullied at some point in
their career (Kane, 2018). According to the Workplace Bullying Institute, 58%
of all bullying targets were women (Kane, 2018). In general, 68% of bullying is
same-gender, meaning women are more likely to bully women; women bullies
choose to target other women about 80% of the time (Kane, 2018). A survey from
UCLA in 2011 made up of 60,000 people, found that “women—even those who
were managers themselves—were more likely to want a male boss than a female
one” (Khazan, 2017, n.p.). This concept is reinforced by Spranger and Mitchell

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A Consideration of Social Media Movements on Gender-Related HR Policy • 151

(2018) who reported that “one study showed that 95% of women felt they were
undermined at some point in their career by other women (Ludwig, n.d., p. 7). In
a roundtable discussion about Sheryl Sandberg’s 2013 book Lean In, the concept
of the “impostor syndrome” was raised. This syndrome reflects women’s feel-
ings of being fake, artificial, undeserving or a fraud when they are recognized
for their hard work. Roundtable participants suggested that women need to take
Sandberg’s advice and “[o]wn your skills, ability, and work,” (Folz, 2015, p. 103)
while acknowledging that this phenomenon is a throwback to previous genera-
tions in the workplace. That is, while a woman may be highly qualified and ex-
perienced, she still gets evaluated on her looks by men as well as other women.
This leads to women questioning what they have to do to simply be recognized for
their contributions. And, other women in the dialogue identify more with the fear
of being perceived as aggressive or bossy rather than doubting their own skills
(Folz, 2015). Spranger and Mitchell (2018) also found that women feel women
leaders foster an environment of competition where women subordinates feel they
must compete more for promotions as well as both mentorship and development
opportunities.

Another way women feel unsafe at work is through sex discrimination. Dis-
crimination based on sex is not new for women in business, regardless of industry.
In 2014, 74.4% of all the sex discrimination complaints filed with the EEOC were
from women (U.S. Equal Employment Opportunity Commission, 2018). It is im-
portant to note that these numbers only come from complaints that have been filed
and do not accurately represent all of the instances of sex discrimination at work.
In the Lean In book, Sheryl Sandberg suggested that women at her company,
Facebook, can and should talk openly about their family planning goals. She even
stated that she had raised the issue in job interviews (Folz, 2015). Human resource
management professionals would cringe at the very suggestion of women being
asked about their plans to have children or adopt, as it harkens back to an era when
men were paid more because they “legitimately” had families to provide for and
women were judged as betraying their feminine duties if they wanted to work full-
time. In a roundtable dialogue about Sandberg’s book, several reacted strongly.
One said, “it scares the heck out of me to think of managers asking that type of
question,” another raised the specter of “legal repercussions,” and a third stated
that “as a compliance nerd, I wouldn’t recommend it to my managers. Primarily
because I don’t think that [the information] would be used as intended” (Folz,
2015, p. 104).

In the past, businesses paid settlements for harassment claims and swept any
other possible damages under the rug through non-disclosure agreements. Many
complaints went unreported because back then, it was the complainants (women)
who were fired after a claim was made. According to the Harvard Business Re-
view, Harvey Weinstein paid out settlements to eight of the women who filed ha-
rassment claims against him (Williams & Lebsock, 2018). Williams and Lebsock
state that “quiet settlements are now becoming harder to justify. The unceremoni-

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152 • ANGELA N. SPRANGER & BRENNA GONSALVES

ous firings and forced resignations of famous men demonstrate that companies are
moving away from that strategy” (2018, p. 6). With the help of movements like
#MeToo, silence is no longer afforded to companies and defendants intertwined
in harassment claims. Although more women are speaking up, the big difference
now is that they are being believed.

With statistics like these, it comes as no surprise that women do not feel safe at
work. Chances of being harassed or bullied at work and in life are incredibly high
for women. Women do not even feel supported by one another in their workplace-
preferring male bosses over female ones (Jonsen, Maznevski, & Schneider, 2010;
Spranger & Mitchell, 2018). Movements like #MeToo are forcing companies to
make changes to their policies and practices. Since women have not felt safe, and
the current environment created has given women an outlet to speak out, they are
using it. These trends, hashtags, marches, and movements are allowing women to
be both seen and heard.

Seen

Each of these movements has allowed women to speak up for something they
have been silenced by in the past.

Historically, it has been hard to win a sexual harassment suit, but rapidly shifting
public perceptions may change that. Seventy-eight percent of women say they are
more likely to speak out now if they are treated unfairly because of their gender.
About the same percent of men (77%) say they are now more likely to speak out if
they see a woman being treated unfairly. It’s a new day for a simple reason: Women
are being believed (Williams & Lebsock, 2018, p. 5)

The difference between now and then, is that now both the political environ-
ment and the media has created the perfect storm for women to rally together and
create a change. #MeToo, #NastyWoman, and #TimesUp are all distinct move-
ments focusing on different women’s social issues. Social media is giving women
an outlet to showcase how many people are being affected by harassment and
discrimination.

Few people know about the origins of #MeToo. Ten years ago, an activist
named Tarana Burke created a movement to empower young girls of color; this
was when #MeToo was created. However, the story behind this hashtag goes back
to 1996 when Burke was a youth camp director. A young girl asked to speak
with Burke after a bonding session among all girls. The young girl began to tell
Burke about her “stepdaddy” (her mother’s boyfriend) and the things he was do-
ing to her during such a vulnerable time in her development. Burke was so over-
whelmed with emotions, shocked and horrified, that she stopped the young girl in
the middle of her story and directed her to another counselor she thought “could
help her better” (Santiago & Criss, 2017). Burke could not bring herself to even
whisper the words “me too.” Later, Burke decided to help these young survivors
of sexual abuse, and sexual assault- to give them an outlet and a voice- she created

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A Consideration of Social Media Movements on Gender-Related HR Policy • 153

an organization dedicated to letting others know they were not alone (Santiago &
Criss, 2017).

The reason #MeToo has become so well-known is because on October 15th,
2017, actress Alyssa Milano encouraged users to use the hashtag. In light of the
Harvey Weinstein allegations, she tweeted this:

Later, Milano tweeted out #MeToo with a link to Burke’s organization, to fur-
ther spread knowledge of how to help. The hashtag took off, and people all over
the world were using the hashtag as a way to acknowledge that they were not
alone and they were no longer ashamed. An immediate bond was created among
these (mostly) women, and people could no longer ignore the growing number of
people who could relate to being sexually harassed, assaulted, or abused.

Within two days (from the Sunday Milano tweeted, to the Tuesday this article
was created), the hashtag was used 825,000 times on Twitter and over 4.7 mil-
lion times on Facebook (Santiago & Criss, 2017). “According to Facebook, more
than 45% of people in the United States are friends with someone who’s posted a
message with the words ‘Me too’“ (Santiago & Criss, 2017). Burke was amazed
by this viral movement, but hopes that it moves beyond that- “she wants sexual
violence or gender-based violence approached as a social justice issue” (Santiago
& Criss, 2017). Tarana Burke wants action and change.

#MeToo has inspired marches around the world. For years, Tarana Burke has
hosted survivors’ marches, leading them with a large sign saying “#MeToo” on
the front. Even though Harvey Weinstein was the reason behind Milano tweeting,
it is not just celebrities being affected by sexual violence. Women all over the
world have used the hashtag as a rallying cry to show other women that they are
not alone in this fight and that they are not the only ones being affected. Women
are demanding to be seen and heard because they are refusing to be silenced.

The #TimesUp movement is a mostly celebrity response to the Harvey Wein-
stein allegations. A ‘letter in solidarity’ was created called “Dear Sisters,” to bet-

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154 • ANGELA N. SPRANGER & BRENNA GONSALVES

ter explain what this movement stands for and what its goals are. One paragraph
reads:

Unfortunately, too many centers of power—from legislatures to boardrooms to ex-
ecutive suites and management to academia—lack gender parity and women do not
have equal decision-making authority. This systemic gender-inequality and imbal-
ance of power fosters an environment that is ripe for abuse and harassment against
women. Therefore, we call for a significant increase of women in positions of lead-
ership and power across industries. In addition, we seek equal representation, oppor-
tunities, benefits and pay for all women workers, not to mention greater representa-
tion of women of color, immigrant women, disabled women, and lesbian, bisexual,
and transgender women, whose experiences in the workforce are often significantly
worse than their white, cisgender, straight peers. The struggle for women to break
in, to rise up the ranks and to simply be heard and acknowledge in male-dominated
workplaces must end; time’s up on this impenetrable monopoly (Time’s Up, 2018).

As you can see, this movement has many goals and covers many topics. Over-
all, it is safe to say they are against discrimination based on gender, sexuality,
ability, and race. However, this movement may encounter problems with trying
to get more women in positions of power. Since women prefer male bosses over
female ones, it may be harder than assumed by this movement to get other women
on board with the idea of more women in leadership roles.

One of the most significant ways this movement showcased its solidarity was
at the Golden Globe Award ceremony in the winter of 2018, when celebrities
dressed in black to show their unity for the #TimesUp movement. At this event,
many female celebrities decided to bring women activists as their plus one to
use their celebrity for a cause. Actress Michelle Williams brought Tarana Burke;
actress Meryl Streep brought Ai-jen Poo, the director of the National Domes-
tic Workers Alliance (White, 2018). The actresses deferred to their ‘dates’ when
asked questions about why they chose to wear all black; to use the opportunity
in the spotlight for good and to help instigate conversations around the topic of
equality- especially in the entertainment industry (White, 2018).

With the help of these movements, women are now fighting to be seen and
heard. Since social media is so wide-spread and anyone can use it from anywhere,
women all over the world are coming together. They realize they are not alone and
becoming more comfortable speaking up for what they want. Women are refus-
ing to be silenced now and pushing hard for the causes they believe in so deeply.
With conversations surrounding harassment, degrading language, and equal pay
by both politicians and celebrities, women are making changes to the way they
are perceived and valued- especially at work. Many of the allegations brought
up through #MeToo occurred in some type of workplace, the “nasty” comment
was made to Hilary Clinton in her place of work (so to speak), and the Time’s
Up movement is focusing on the workplace and equality in pay, numbers, and
opportunities.

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A Consideration of Social Media Movements on Gender-Related HR Policy • 155

Valued

It is important to recognize that perception and value are inextricably inter-
twined. The ‘value’ one holds is based on other’s perceptions of that person, or
their perceived value. For women at work, their perceived value has been stifled
by stereotypes, perceptions of women leaders, and implicit leadership theories
(biases). While there are more women in leadership roles now than ever before-
for example, there are now 21 women in the Senate, more than there has ever
been- women are still being labeled and devalued at work (Pew Research Center,
2017). Women make up 52% of the United States total population, yet “only 20%
of the ‘C-suite,’ or top executive roles, are women” (Spranger & Mitchell, 2018).

Stereotypes- while not always accurate- can still create obstacles for women to
overcome. According to Jonsen, Maznevski, and Schneider (2010) “we stereotype
based on familiar women’s roles” (p. 551) such as mothers, nurses, and teachers.
Implicit leadership theories suggest that we have preconceived notions of a leader
that form our expectations of them. We expect women to be motherly, nurtur-
ing, and accommodating based on these stereotypes. However, “management jobs
have traditionally been understood as being constructed according to male norms
and thus creating difficulties for women” (Alewell, 2013; Kyriakidou, 2012, p. 4).
The management world is still dominated by men, and many “women have identi-
fied stereotypes as an important barrier to the most senior positions in business”
(Jonson, Maznevski, & Schneider, 2010, p. 552).

Studies have shown that people- regardless of gender, tend to assume a “lead-
er” has more male associated traits than female ones (Alewell, 2013; Jonson,
Maznevski & Schneider, 2010; Kyriakidou, 2012; Mendez & Busenbark, 2015).
“These stereotypes create psychological burdens that may contribute to their low
rates of self-promotion and concurrent underrepresentation” (p. 6) and make it
hard for any women to be successful in a leadership position (Spranger & Mitch-
ell, 2018). Their value as a leader is immediately decreased based on their gender.
Also, based on these stereotypes, if women

adhere to traditional “female” characteristics (e.g. nurturing/communal) they are
considered too nice and therefore not capable/competent. If they assume more “male
characteristics” (agentic) they are considered to be too harsh. Thus women who at-
tain leadership positions have to make a tradeoff between being liked vs respected.
(Jonson, Maznevski, & Schneider, 2010, p. 552)

Sandberg’s Lean In suggested that women should be more confident and asser-
tive, behaviors and attitudes more traditionally associated with male leaders, but
HR managers and executives know that the empirical differences between male
and female leadership are negligible. The feminine styles of leadership tends to
lead women to be “more willing to admit they don’t have all the answers at critical
times… more relational… more team-oriented… seeking to understand others…
showing the ability to think and then communicate” (Folz, 2015, p. 105).

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156 • ANGELA N. SPRANGER & BRENNA GONSALVES

Being a woman in a leadership role creates a “lose-lose” situation. Not only
do women have to compete against stereotypes and inaccurate perceptions, but
as mentioned earlier, they also compete against each other for opportunities in
the workplace (Spranger & Mitchell, 2018). Overall, it is a commonly-held idea
that perceptions of suitable leadership are indeed influenced by gender- and for
women, this is not a positive influence.

The effects of these stereotypes on women “include an undermined sense of
identity and belonging, and a decrease in motivation to succeed” (Spranger &
Mitchell, 2018). #MeToo and other gender-related movements have laid down
the groundwork for conversations surrounding these topics to be brought into
the workplace. These movements are fighting for stereotypes, perceptions, and
implicit theories to stop being barriers to women moving up the corporate ladder.
Their goal is to give women the same rights and opportunities as men at work and
in life.

IMPLICATIONS FOR HUMAN
RESOURCE MANAGEMENT PRACTICE

From a practitioner standpoint, there are many changes businesses can consider
in light of these movements to ensure their company is creating a fair and equal
workplace where everyone feels seen, safe, and valued. Harassment policies must
be carefully thought out, elucidated in an employee handbook that clearly states it
is not a contract, and then enforced with explicit complaint policies (Segal, 2015).
Additionally, it is important to ensure that everyone is well trained on the harass-
ment policy. Knowledge and training are pertinent for comprehension of the poli-
cies already in place. It is important employees already know the steps they are
required to take should anything happen while at work. Since it is not unlikely that
a woman will be harassed sometime in her career, it may be beneficial to educate
everyone on the many types of harassment. It is not just quid pro quo harassment;
there is also hostile work environment and psychological harassment, or bullying
that affect people’s working conditions and comfort. Setting the tone right away
leaves no room for the excuse “I didn’t know.” Writing down specific definitions
for harassment and bullying will leave no loopholes. For example, Segal (2015)
suggests that organizations should lay out a definition for what constitutes bul-
lying in their company, and specify what types of behaviors may be considered
bullying under that definition:

A policy prohibiting bullying should outline examples of behavior that might
constitute bullying, such as:

• Mean-spirited “joking” designed to exploit an employee’s perceived weak-
nesses.

• Discussing an employee’s performance problems with the employee’s
peers or subordinates.

• Yelling at an employee, whether alone or in front of others.

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A Consideration of Social Media Movements on Gender-Related HR Policy • 157

• Encouraging others to avoid an employee.
• Physical intimidation when speaking with an employee.
• Sabotaging an employee’s work.
• Insulting an employee’s family or friends. (Segal, 2015)

In the current political climate, an unfortunate consequence of the general cli-
mate of conversational incivility is that political images (a picture of the current or
previous president of the United States with his family, for example) evoke strong
feelings in employees, such that

And what about a policy restricting romantic relationships and dating among
coworkers? Such a policy may have value should a subordinate and a supervi-
sor become intimate—as with radio and media personality Tavis Smiley, who
lost his job at PBS due to “sexual harassment and dalliances with subordinates”
(O’Connell, 2018). Indeed, it would not be ideal to encounter a harassment lawsuit
at work because an intimate relationship deteriorated (Hunt, Davidson, Fielden &
Hoel, 2010; Mainiero & Jones, 2013; Smith, 2018). Cultural changes in business
often start with policy changes. Having hiring policies that address equality and
accountability will ensure minority groups, like women, are taken into equal con-
sideration. And, taking careful steps to avoid conscious and unconscious bias in
hiring decisions will aid greatly in preparing HR generalists and representatives,
Talent Acquisition specialists, and hiring managers for following through on eq-
uitable, accountable hiring processes. As Segal explains,

a white male manager may know that gender and race lawfully cannot be considered
in a hiring situation. But he, as a white man, may favor a white male candidate over
a woman of color based on how ‘comfortable’ he is with each of them, even though
he has no idea that his comfort level may relate to race and/or gender.

Unconscious bias, often referred to as implicit bias, is bias that we are unaware of.
It happens automatically and without any conscious thought process and is triggered
by our brain making snap judgments formed, at least in part, as a result of the mes-
sages that we received growing up, as well as our own experiences, culture, mass
media and other influences. (2017, p. 75)

To prevent the activation of implicit bias and action taken based on stereo-
types, HR professionals can encourage their peers and the managers in the orga-
nizations they serve to take the Harvard Implicit Awareness Test (IAT), to assess
individuals’ implicit bias in areas such as gender and sexual orientation, race,
religion, and age (Segal, 2017). Segal (2017) urges caution here though, HR pro-
fessionals should take care with bias testing, as the results of such an instrument
are discoverable in case of employment litigation.

Training. While mentioned earlier with regards to policy knowledge and types
of harassment, training is a second means by which changes can be made to busi-
ness culture. Training involving the awareness of implicit leadership theories ste-
reotypes, and perhaps even sensitivity training, might encourage employees to

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158 • ANGELA N. SPRANGER & BRENNA GONSALVES

be mindful of how they may play a role in making their women peers, and others
feel unseen and under-valued. Many people are unaware of the preconceived no-
tions/biases/stereotypes they bring into a situation. Having trainings to uncover
these biases may encourage cultural change in the workplace by holding people
accountable for their part. Sensitivity training follows the same idea; it is “train-
ing intended to sensitize people to their attitudes and behaviors that may unwit-
tingly cause offense to others, especially members of various minorities” (Google,
2018). Training like this will encourage self-reflection and hopefully start change.
A company can only change if the people within it are willing. At the most basic
level, businesses are groups of people working toward a common goal; if you can
get everyone invested in the same change- change will happen.

With the previously described trends in vocalizing complaints about harass-
ment in the social sphere, reputation management becomes a viable cottage indus-
try. Company executives may wonder about how their organization and its leaders
are represented on the social media platforms that matter to their investors, cus-
tomers, and potential high value employees. Rather than throw good money after
bad and escalate a commitment to poor, ineffective policies, executives would do
well to address the internal causes (and remedies) of harassment. Bottom line,
employees have grown weary of the apologies and public statements. They prefer
clearly stated policies, procedural steps, and action.

Procedures. How then can you take effective action to protect your company
and reassure employees? Employment lawyer Jonathan Segal (2018) suggests
that as a direct result of #MeToo, leaders review their sexual harassment policies
and at the same time audit the company’s complaint procedure. If the policy is the
roar, then the procedure is the teeth that help the organization back up its stated
values. One key point to emphasize is that it is not just the target of sexual harass-
ment who can, should, and must report the offensive behavior—immediately!—
but also anyone else who witnesses the conduct. Reporting systems should not be
“radio-button” restrictive, in that the employee must be able to enter the descrip-
tion of the behavior in his or her own words. It may be that more of your employ-
ees than you expect end up reporting “harassing conduct that is not unlawful” (p.
64). That actually benefits your company, because it reveals layers of data about
your organizational culture that you might not see otherwise. The policy and the
procedure should both cover all protected classes: racial, ethnic, religious, handi-
cap, age, “and other forms of harassing conduct” (p. 64), as well as the sexual and
psychological harassment.

A second key point, important to publish widely inside your organization, is
that you provide multiple points of contact for employees to report their concerns
about harassment policy compliance. An outside consultant can be contracted to
receive these complaints and relate directly back to your Chief Executive Officer,
Chief Compliance Officer, or other designated responsible party. At the very least,
a harassment complaint should be submitted to a chain manager or supervisor
and a compliance officer in HR. After all, it may be the supervisor or manager

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A Consideration of Social Media Movements on Gender-Related HR Policy • 159

causing the issue that results in the complaint! If your complaint procedure sends
the employee right back to them, it offers no safety or protection at all. There
are businesses that serve as third-party reporting services for large companies,
and consultants who can support small to medium-sized companies in this effort.
Such arrangements should require the consultant to provide a report to at least two
points of contact, both the executive client and HR. Between them, the accused
can be notified and appropriate action taken that incorporates the results and rec-
ommendations of the investigation.

A third key point is to define, clarify, and explain. That is, it will help your
employees to feel safe if they know what behaviors are unacceptable or prohib-
ited conduct. It may seem like micromanaging to have to specify such behav-
iors, but employees appreciate having clear guidelines. For example, a corporate
policy should specify that customers, vendors, and suppliers may be perpetrators
of sexually (or psychologically) harassing behavior. Psychological harassment is
known in the research literature and in current employment law as bullying. Un-
fortunately, while the phenomenon is well documented, no federal or state law
stands to make bullying an illegal act, and women, minorities, and members of
the LGBTQ community may fall victim to this form of harassment with no legal
recourse. Social media and electronic communications, both on and off the job,
both professional and “private,” may be tools used for harassment, so this should
be clarified and explained in your policy as well.

Fourth, an effective complaint procedure must clarify that not only do you
have a zero-tolerance policy for sexual harassment, but you must also have a zero
tolerance policy for retaliation or reprisal against the complainant. Your procedure
should include coverage for the complainant and any witnesses or others “associ-
ated with the complainant, such as a spouse” (Segal, 2018, p. 65). In both train-
ing programs and in investigations of real complaints, your company policy and
complaint procedure must state explicitly that even if it does not qualify as a legal
case, the behavior itself and any type of retaliation against the complainant are
absolutely forbidden. Segal states that “[t]he courts are flooded with cases where
employees’ harassment complaints were initially dismissed but the judges later
ruled that the ensuing retaliation claims had sufficient merit to proceed to trial”
(emphasis added) (Segal, 2018, p. 65).

Finally, when faced with a sexual harassment complaint, this is the point at
which your organization must “walk its talk,” and manifest its values. Actions
truly speak louder than words in this kind of situation—either you have a zero
tolerance policy for everyone, or you do not. The President of the company, the
Chief Financial Officer’s nephew, the HR manager, must all be equally suscep-
tible to the company policy, not just the frontline Supervisor, Planner, or Procure-
ment Specialist.

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160 • ANGELA N. SPRANGER & BRENNA GONSALVES

CONCLUSION

Women are now fighting to be seen because they have not felt safe and valued.
Using #MeToo, #NastyWoman, and #TimesUP, women are creating a unified
voice that can no longer be ignored by the public or by businesses. They want
their causes heard and their right to feel seen, safe, and valued back. Due to the
environment created by celebrities and politicians bringing topics of workplace
harassment, bullying, and stereotyping into the spotlight, women are feeling more
comfortable stepping forward and lending their experiences to these causes. Di-
rector and entertainment expert Steven Spielberg has shared many opinions sur-
rounding #MeToo and #TimesUp. Spielberg believes there should be a code of
conduct at work to eliminate sexual harassment (Blackmon, 2017). He is also
quoted saying,

[Time’s Up] is something that is going to change everything for the better… There is
always more to come, but the other thing we have to think about is this…Hollywood
and celebrity gets a lot of recognition, you can’t just think of this as a Hollywood
problem, this is a national problem and probably a global problem (Trendell, 2018,
n.p.).

This problem goes beyond actors and actresses. While these groups have been
instrumental in launching movements into the spotlight, it is now time to take
these proposed changes and apply them to the business world. Cultural change in
business is possible- you have to start at the very base level- the people. Where
better to start encouraging this cultural shift than the people who deal with person-
nel? Human Resources is an influential change agent in every business- changing
the policy, and increasing the training will change the people. With movements
like #MeToo in the spotlight, now is the time to start moving forward.

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Human Resources Management Issues, Challenges and Trends:
“Now and Around the Corner”, pages 81–101.
Copyright © 2019 by Information Age Publishing
All rights of reproduction in any form reserved. 81

CHAPTER 4

WATERING THE
ORGANIZATIONAL LANDSCAPE

Meeting Employee Needs
through HRM Flexibility

Alexandra E. MacDougall, Zhanna Bagdasarov, and M. Ronald Buckley

Change has always been with us, but it seems that the pace of change is
accelerating.

—Yehuda Baruch (2004, p. 58)

Today’s human resource professionals are tasked with meeting the needs of an
increasingly complex and diverse workforce. Socio-demographic changes such as
an aging workforce (Morris & Venkatesh, 2000), increased ethnocultural diversity
(Ng & Johnson, 2015), more women in the workforce, and an increasing num-
ber of dual-career households (Baltes, Briggs, Huff, Wright, & Neuman, 1999)
require that companies remain ahead of legislative mandates with HR-initiated
diversity and inclusion programs (Kelliher & Anderson, 2010). Growing expecta-
tions and felt pressure for work-life balance (Allen, Johnson, Kiburz, & Shockley,
2013), moreover, suggests that to remain competitive, firms need to be responsive
to workforce needs (Matz-Costa & Pitt-Catsouphes, 2010). Rapid technological

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