First Chapter

MBA In A Day

John Wiley & Sons

Chapter One

The process of recruiting, hiring, and retaining competent employees has always been an important part of any business. In the business world today, this function has become ever more complex and important. The business environment is forever changing, and managers and human resources departments must be flexible enough to adapt to these changes, including the evolving laws, demographics, and business strategies.

HUMAN RESOURCES PLANNING AND STRATEGY

Just like any other aspect of business management, planning and strategy development are the first items on the agenda when tackling a project. Managers, professionals, and entrepreneurs are often faced with the task of developing a plan for how human resources will be needed to meet short- and long-term goals and objectives. For example, a company is interested in expanding its production capacity with a new plant to serve its western U.S. markets. As part of the strategic planning for this new facility, a human resources component of this expansion will be essential.

In its simplest form, human resources planning starts by conducting an analysis of staffing needs throughout the organization. This could mean either assessing the current staffing requirements or projecting future requirements if changes areexpected. In either situation there are several questions that need to be answered and fully understood prior to the analysis.

1. What is the organization's strategic vision?

2. What are the short-term and long-term goals?

3. Are there any major changes in the market that will impact the organization's future?

4. What changes in staffing requirements, if any, are needed to support the strategic vision of the organization?

5. If changes are needed within the organization, what type of resistance can be expected to the changes?

Once these questions are answered, assessing the staffing requirements can be completed.

Assessing the staffing plans involves evaluating the human capacity needed to meet the goals and objectives of the organization, estimating the number of people needed for each department or role, and making adjustments as needed. This process does take a lot of experience and understanding of the specific business, but experienced managers should be able to make good assessments. If the managers are new to the industry, a good benchmark would be comparing the number of employees needed in similar organizations.

Signs that the current staffing needs are not in line with the condition of the organization:

•   Regular breakdowns in the process flows, which jeopardize relationships with clients and customers. These include missed deadlines, increased returns, decreased customer loyalty, and regular administration mistakes.

•   Frequent employee absenteeism and turnover caused by employees being overstressed, having poor morale, or looking for other employment.

•   Regularly occurring overtime caused by employees being overworked or given too much responsibility. Overworking employees can lead to burnouts and increased costs in the long run.

Once the staffing plan is developed that meets the current and future plans for the organization, job descriptions can be created. This process involves analyzing each job in the organization in order to generate a job description and job specifications, and then these are aggregated at a company-wide level. Job descriptions can be a very important management tool in some organizations. Some thought should be put into them due to the nature of employees using job descriptions to define and defend their actions or inactions. Job descriptions can be either a restraint or an open door for employees or teams.

The job analysis involves collecting sufficient information to form a complete understanding of what is entailed to perform the job. A job description lists the activities that the employee performs, as well as the skills and qualities that are needed to successfully meet the job objectives. Think of this stage of human resources planning as if you were a newly appointed coach of an expansion football franchise. You would identify first the positions you would need to complete the roster, then the qualities you would like for each player, specific to each position.

Once the job analysis and job descriptions are determined, this information can then be aggregated to form a human resource inventory to track what skills and capabilities need to be filled in to complete the human resources requirements.

When completed correctly, job descriptions can be a very important tool and can be used in many different functions, including:

•   Giving employees a gauge of how they will be evaluated within the organization.

•   Helping determine the compensation level for individual positions.

•   Establishing hiring criteria for specific positions, and giving candidates responsibility expectations.

A typical outline of a job description: Job Title: Specific title that would be included in an organizational chart. Overall Description: A brief description of the responsibilities an individual holding this position would have. Reporting To: List of person(s) to whom this position reports, and any subordinate positions. Duties: A detailed list of regular duties this position would be expected to perform. Requirements: A list of mandatory or preferred requirements for the position, including number of years of experience, certifications, and licenses. Criteria: A list of standards that will be used to evaluate the possible candidates, including specific skills, experience, or knowledge.

IMPLEMENTATION OF THE HUMAN RESOURCES PLAN

Once the planning part of the process is complete, the firm will set forth to implement that plan through the next set of human resource concepts and tactics: recruitment, selection, appraisal, rewards, and employee personal and professional development.

Recruitment

Recruitment is the process by which companies attract candidates to fill present and future positions, and the appropriate method varies from company to company. In most cases, the human resources department in the company will work together with managers in departments throughout the company or with others familiar with the personnel needs to determine a recruitment method and approach.

Many recruitment methods are available, including Internet and print advertisements, employee referrals, and outsourced agencies ("headhunter" executive placement firms, job placement agencies, etc.) that perform recruitment services for the company, either on a fixed-fee arrangement, much like a consulting relationship, or on a performance-based basis where the fee is a percentage of the employee's salary. In some cases, the employee will pay the fees associated with such outsourced services, but more often the company will pay these fees. Other recruitment tactics include job fairs and college recruiting and might involve a combination of several methods.

Employee Leasing and Outsourcing. In the past decade, the use of "employee leasing" and temporary, or project-based, outsourcing of human resource needs has become more prevalent. In this scenario, the company contracts with another company that provides the employees for a specific need or project. The contracted worker is an employee of the provider company, with the provider company responsible for payroll, employee taxes, benefits, and other employee-related expenses. The company hiring these contract employees is thus free of the associated bookkeeping and administrative costs of maintaining these employees on its payroll-it makes a single payment to the company from which it is leasing the employees, rather than paying the workers individually.

These leasing or outsourcing arrangements are attractive to new or emerging companies or mature companies that may be experiencing an unusual spike in demand, or some other kind of nonrecurring event, presenting a solution for a company that needs to modify its workforce capacity with some upside or downside flexibility.

Recruitment: Inside versus Outside the Company. One of the first questions the company's human resources department is likely to ask is whether to fill job needs internally or to look outside the company. Hiring internally allows the manager to choose from a known pool of talent and can minimize misperceptions among candidates about the actual requirements of the position. In addition, hiring from within can be cost-effective and provide motivation for existing employees.

Generally, it is advisable to look outside the company when specific skills are required for the position and existing employees may not be reasonably expected to train for or learn these skills. The decision to look outside the company tends to be more appropriate when there is a specific need to fill, such as technical requirements. Hiring from outside also helps to avoid the ripple effect of frequent internal staffing changes and the employee "musical chairs" syndrome that does not give staff time to mature into their respective jobs. (Though sometimes well-planned cross-training for different jobs within a company is a productive long-term strategy.)

Finally, recruiting outside the company can be an effective way to import experience and creativity or new ways of doing things. This infusion of outsider perspectives and approaches can infuse the company with a fresh look at its processes and systems.

Selection

The recruitment process just described will result in a pool from which to select the right employee-and this usually involves a combination of different selection methods in order to make the best employee selection decision.

Interviews and reference checks are the most commonly used, but other methods are available depending on the specific demands of the position. For example, background checks are appropriate when a position requires that the employee have significant customer interaction or if the prospective employee has a fiduciary involvement or responsibility with the company. Other selection methods include:

•   Skill performance tests/work samples-for example, a graphic artist may bring in a portfolio of past projects, or a data entry candidate may be given a simulated work assignment.

•   Personality tests-used especially in customer contact recruitment and selection (e.g., salespersons and customer service candidates).

•   Physical abilities tests-used in many job requirements where physical condition is an essential element in job productivity or success (e.g., a product installation or delivery job).

•   Drug tests-an increasingly used tool to ensure selection of candidates who do not involve themselves in chemical or substance dependency.

Interviewing. Face-to-face interviews can be extremely revealing but must be well prepared. The goal of an interview should be to learn whether the candidate has the competencies and technical skills that are most critical to the job, and questions should be prepared for each area. The interviewer's questions should focus on behaviors, not opinions, and may involve asking applicants to provide examples from their past experiences. Interviews provide an opportunity to read body language and the applicants' ability to "think on their feet," often replicating the realities of life on the job. Additionally, to ensure good fit with the culture of the company, an initial interview is often followed up by several more representing the other employees with whom the potential hire may work, as well as company representatives at different levels and areas within the company. An important step in the interview process is to check on a prospective employee's past performances by making inquiries to former employers and references. Four rules for more effective reference checks:

1. Ask the applicant to inform prior employers that you intend to contact them. Former managers are much more likely to provide useful information if they are aware beforehand that they will be contacted.

2. Open the call by describing the corporate culture of the organization. This provides some context for the previous employer's comments on the previous employee.

3. Reassure the previous employers that the information they provide will not determine the final hiring decision, but that your goal is to learn how best to manage the prospective hire.

4. Save formal questions such as dates of employment and title until the end of the call.

Employee Training and Development

It is one thing to be able to recruit and hire good employees, but to tap into and help them attain their full potential is just as or even more important. Training and development is an essential part of all organizations today. The main benefits of employee development and training:

•   Increases the value and capacity of the human assets of the company.

•   Provides an alternative to recruiting, by having qualified personnel to fill vacant positions.

•   Creates potential future leaders of the company.

•   Helps reduce employee turnover by keeping individuals motivated and interested in their positions with the possibility for advancement.

Orientation. Training should begin on day one of employment, with every employee given an orientation. Getting employees off to the right start is a very easy way to build a company that embraces learning and development. Most small companies do not have formal orientation programs, but rely on individuals finding their way when they first get hired. This seems to work fine in smaller organizations when there is more informal means of communication, but as organizations grow most have found that formal orientation programs are necessary to get employees up to speed and productive in a timely fashion.

Formal orientation programs can range from an hour to several days, and the level of orientation usually depends on the level of the positions. Whereas entry-level or unskilled labor will need very little orientation, experienced professionals will need quite a bit more to get up to speed with the organization. Each organization needs to define its own orientation needs and programs.

Continues...

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Excerpted from MBA In A Day by Steven Stralser Excerpted by permission.
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