Once all jobs in the organization have been identified, it is often helpful for communicating with employees to group the jobs into job families and display them on an organization chart. There are various ways of identifying and grouping job families.
JOB FAMILIES
A job family is a grouping of jobs having similar characteristics. In identifying job families, significant emphasis is placed on measuring the similarity of jobs. For instance, at one insurance company the HR director decided that jobs requiring specialized technical knowledge, skills, and abilities related to information systems (IS) should be viewed as a separate job family, regardless of the geographic locations of those jobs. Due to the nature of information systems jobs, attracting and retaining IS professionals was difficult, and special compensation programs were needed to match the compensation packages given by competing employers.
ORGANIZATION CHARTS
In many organizations, organization charts are developed. An organization chart depicts the relationships among jobs in an organization. Organization charts have traditionally been hierarchical, showing the reporting relationships for authority and responsibilities. In most organizations, the charts can help clarify who reports to whom. In developing typical organization charts, there are some general considerations:
1. Focus of chart: Label the chart to identify the scope of the chart, whether for a department, division, region, or the company as a whole.
2. Simplicity: Keep the chart as simple as possible, emphasizing primary lines of authority.
3. Titles: Use job titles, describing the job level and function, in each box on the chart. For example, the title of Director may not be sufficient. Where possible, indicate the area of responsibility, such as Director of Administration. Broader titles, such as General Manager or Secretary, need no further clarification.
4. Incumbents: Do not develop organization charts around existing people in
the organization. First identify the functions, and then add names of incumbents to the charts.
5. Jobs: Depict the jobs in organizational units as rectangular boxes.
6. Levels: Use vertical placement to depict the relative position of jobs at different levels in the organization. Use horizontal placement to show jobs having similar levels of authority in the organization.
7. Authority: Show direct lines of authority with solid lines, drawn vertically and horizontally as appropriate. For indirect or functional authority, use dotted lines.
In dynamic organizations the charts can become very complicated because dual reporting relationships may exist. For instance, a design engineer may report
to a project manager on a project while also reporting to the chief design engineer for technical review and supervision. This type of organization, often called a matrix organization, has grown in usage in recent years, particularly in professional practice and high-technology industries.
The third part of HR management being a strategic business contributor is to deliver HR services and activities in a cost-effective manner that ensures compliance with applicable laws and regulations. Based on a study of HR’s role in organizations, the study results show that the greatest amount of time and costs of HR management are concentrated at the administrative level. However, HR management adds the greatest value at the strategic level, and the administrative activities produce a limited value for the organization. Two
aspects that must be considered in this area are legal compliance and administrative systems.
ENSURING LEGAL COMPLIANCE Over the past thirty years numerous laws and regulations have been enacted at national, state, and local levels. Every year these regulations have been expanded due to regulatory actions and judicial decisions.
As a result, considerable time and effort must be spent by HR professionals and other managers in organizations ensuring that compliance with HR-related laws
and regulations occurs. Just to name a few, consider the following areas that must be managed daily by HR staff members.
l Equal employment l Family/medical leaves
l Sexual harassment prevention l Safety and health management
l Health benefit portability l Union contract grievances
l Pension compliance reporting l Disability accommodations
The role of HR is to ensure that the organization and its managers and employees know of these regulations, and that HR management reduces the legal liabilities and complies with the myriad regulations. With more and more people willing to file lawsuits, and more government enforcement agencies inspecting HR practices in organizations, it is crucial that HR management be done in ways that reduce the legal exposures faced by the organization.
DEMONSTRATING ADMINISTRATIVE EFFICIENCY A final part of HR management is
to deliver HR services and activities in a cost-effective and timely manner. Many HR professionals are aware that there is too much “administrivia” affecting HR. One study of senior-level HR executives found that 59% of their time is spent on administrative matters, and only 6% is spent on strategic issues with the remainder being operational in nature. But the HR executives indicated that they would rather spend only 6% on administration and 92% on strategy. Three trends in this area are currently affecting HR delivery systems.
First is the growing use of information systems to replace the manual record keeping and processing of HR data. There are numerous federal, state, and local laws requiring that organizations keep many different records on employees. The requirements are so varied that it is difficult to identify exactly what should be kept and for how long. Generally records relating to employment, work schedules, wages, performance appraisals, merit and seniority systems, and affirmative action programs should be kept by all employers who are subject to provisions of the Fair Labor Standards Act (FLSA). Other records may be required on issues related to EEO, OSHA, or the Age Discrimination Act. The most commonly required retention time for such records is three years. Throughout the book, details on the most important laws and regulations are presented in appropriate content sections.
Second, rather than HR information being centrally processed and controlled, it has been more dispersed, so that managers and employees can access HR data
themselves. The distribution of HR information has changed dramatically as a result of the widespread usage of e-mail, the Internet, distributed information processing, and other technology. However, with wider access has come the need for greater security to protect employee privacy of certain types of data and to preserve the integrity of the data from improper alteration.
A third trend is the growing use of outsourcing of HR activities. Increasingly, HR departmental functions are being examined to determine if outside providers can perform them more efficiently and at lower cost than when done internally.
Not reflected in those figures is the large number of employers that have outsourced payroll administration, which is often done by HR or accounting staff members. In summary, HR professionals must cost-justify their existence and administratively deliver HR activities efficiently and responsively. Otherwise, HR management is seen as a cost center that does not produce results for the organization.
Once a perk reserved for executives, many publicly held companies now offer stock options to rank-and-file employees. Small businesses do so to give their workers a sense of ownership, providing them with financial incentives to make their companies succeed.
About 9 percent of the 114 million private-sector employees in the United States hold stock options, and approximately 18 percent own company stock.
Offering employee stock options gives workers the chance to buy shares in their company at a specified price. The price, called the grant or strike price, should be pegged to the value of the stock when it is offered to employees. Employees have the option of buying the stock at a set price, also called exercising the option, after a period of time and then selling it when they choose.
A simple example: You offer an employee 10 shares in your company at $1 a share, for a total value of $10. Your employee buys the options when the stock reaches $3 a share, and immediately sells his or her shares on the market. The employee has made a profit of $20 before taxes.
Employees are not required to purchase their options, so if the stock price falls below the option price, they won't lose money. However, declining share prices often hurt employee morale. Although many dot-com companies in the 1990s offered stock options to compensate for lower salaries, options should only be given as investment perks because their worth will fluctuate.
Companies must list the options as expenses in financial statements when they are issued, which will probably hurt a company's earnings. Be careful to monitor when options are granted, vested and purchased by your employees. The SEC has investigated companies for improper stock granting practices.
A small business can offer different types of employee stock options:
• Incentive stock options. Employees only pay taxes on such options when they sell them. Workers also qualify for the 20 percent long-term capital gains tax if they sell the stock more than two years after they received options and one year after exercising the options.
• Non-qualified stock options. Employees generally pay higher taxes with these options. When employees exercise these options, they must pay income tax on the price difference between the market value of the stock and the grant price. Employers get a tax deduction on the difference.
• Restricted stock. Companies give employees a certain number of shares that they can sell after the company meets certain goals or after a period of time passes. Employees pay income tax on the earnings when the stock vests or they can pay tax when the options are issued.
It is important that an organization use clear and specific language in an Internet use policy. The policy should inform employees that:
a) Internet use and e-mail will be monitored;
b) tracking software will be used to monitor Internet use and e-mail;
c) electronic data, including all Internet, e-mail, and instant messaging files, are the property of the employer, not the employee;
d) the employee agrees that electronic data, including all Internet, e-mail, and instant messaging files, are not private and are subject to employer access
and review, whether in transit or in storage;
e) the organization’s policy applies to all electronic communications, whether sent or received;
f) computer equipment and networks owned by the organization should not be used for personal matters and is provided solely for work-related use;
g) content that is offensive, obscene, profane, indecent, tortious, defamatory, illegal, harassing, or disruptive (including pornographic material or material that is offensive regarding sex, gender, sexual orientation, age, religious beliefs, political beliefs, race, or ethnic origin) should not be created, accessed, or distributed in any way using computer equipment and networks owned by the organization;
h) creating, accessing, or distributing material referred to in paragraph using computer equipment and networks owned by the organization is an act of gross misconduct;
i) confidential information and trade secrets should not be externally distributed in any way using computer equipment and networks owned by the
organization without authorization;
j) copyrighted or streaming content material, including software, music, and video programs, should not be downloaded from the Internet using computer equipment and networks owned by the organization without a license to do so and proper organizational authorization;
k) the employee agrees that e-mail accounts used for work purposes may be audited by the employer regardless of whether the e-mail service is provided by the employer or otherwise;
l) the employee agrees any computer used for work purposes may be audited by the employer regardless of the location of such computer and regardless of whether the computer is provided by the employer or otherwise;
m) the employee agrees to decrypt messages when required to do so by the employer for the purposes of business audit;
n) passwords used in respect of company information systems do not imply a right to privacy and do not prohibit an employer from review of any electronic data owned by the company;
o) breach of the organization’s Internet use policy should be reported to a designated member of staff as soon as possible; and
p) breach of the organization’s policy will lead to disciplinary measures, up to and including termination.
Building trust between individuals within organizations is accomplished
through a series of sequential phases. Trust relationships move through three
developmental stages — calculative-based trust, knowledge-based trust, and
identification-based trust. It is important to understand what needs to occur in
each stage of trust development in order to effectively increase the level of trust between individuals.
Calculative-based trust is a stage where each potential interaction between two individuals is assessed as an independent value-based transaction. If the interaction is evaluated as beneficial to the trustor, he will engage in the transaction with the trustee. Every interaction is calculated to determine its potential value and if a positive outcome is forecast, the trust level increases incrementally based on the perceived magnitude of the transaction. If the interaction outcome is negative, the trust relationship is diminished proportional to the scale of the violation. The value or weight of each transaction is compared to the outcomes associated with maintaining the relationship.
In a calculative-based interaction, an individual can behave out of a
concern for retribution (deterrence) for not following through on an obligation.
Trust is sustained through the threat of punishment which motivates the trustee to a greater degree than the prospective of reward. Calculative-based trust, however, is quite tenuous and is highly susceptible to extinction of the
relationship based on a single flagrant action. In situations where the magnitude of the action is egregious, the trustor can ‘calculate’ that the relationship should not be sustained. Therefore, in calculative-based trust, the trust relationship can be completely severed if the trustor feels that the magnitude of the action is severe.
Knowledge-based trust is grounded in an individual’s degree of predictability. If the trustor can predict with a relatively high degree of certainty how the trustee will behave, the trust relationship will continue to grow. When behaviors can be anticipated, a degree of generalized expectancy occurs. The predictability of behavior, over time, derived from the accumulation of knowledge through experience with the other person, enhances trust .
Two key processes are necessary to build trust in the knowledge-based
trust phase. The first process, explicit communication, enables the parties to
express their thoughts, concerns, and expectations openly and honestly.
Explicit communication entails the use of verbal and non-verbal mechanisms
necessary to establish a common understanding and achieve shared knowledge
between the two parties. The second process, nurturing, involves a stylized
set of behaviors necessary to establish a richer connection and compatibility
between the individuals. During the second process, the trustor continues to
watch and listen to the trustee with whom he engages in explicit communication.
This encourages the trust relationship. Relationships within an organizational context are often knowledge-based. Trust, at the knowledge based level, is minimally affected by inconsistent behavior. If the trustee can adequately explain the reason for his behavior, the trustor is likely to accept the justification with little to no impact on the resultant trust level.
Identification-based trust is the third phase of a trust relationship. In this stage, the trustor and trustee can effectively understand and appreciate the other’s needs. This permits the trustor to function as the trustee’s agent. In this stage of trust development, both parties learn what really matters to each other, thus enabling them to eventually place the same degree of importance on those behaviors. In this stage, the individuals are able to understand one another without the need for protracted explicated conversations. The trustor and trustee are synchronized in understanding what is important to each other. Both individuals work consciously to be supportive of the other and are respectful of the other’s concerns. Very few relationships reach this stage of trust in an organizational setting because individuals often lack the time, energy, or interest necessary to achieve this highest level of trust.
Trust exists in a business relationship when three conditions are met:
(1) the parties risk losing too much if either individual behaves inappropriately;
(2) either individual can predict the other’s behavior well and can therefore protect against being deceived;
and
(3) both individuals have adopted the other’s preferences. Although trust is difficult to build, developing trust within organizations is facilitated through meeting conditions, understanding stages, and taking explicit actions consistent with the trust relationship phases.
The following is a list of some of the strategies companies are currently using to contend with recruiting and retention challenges:
1.Look for in-house talent. Companies trying to hire in a competitive market often overlook qualified employees within their organization. Hiring from within also sends a message to employees that they too can be promoted, which can help increase retention efforts.
2.Redesign jobs. If you are experiencing difficulty recruiting for particular positions, why not redesign the role. Consider converting a full-time job to two part time positions, modifying work hours, offering training, hiring for weekends only, or hiring an applicant or employee with less experience who has future potential. Simple changes can help you to cast a wider net and may even have some overall cost advantages to your company (e.g. lower benefit costs, starting salary, etc.).
3.Tap hidden talent. Consider benchmarking other similarly situated companies and tapping other hidden talent such as past employees, retired and older workers, disabled workers, etc.
4.Use marketing departments or firms. Much like selling your company’s products or services, recruiting in today’s tight market requires savvy marketing skills. Many companies are finding it advantageous to utilize the efforts of their in-house marketing team or an outside firm to develop recruiting campaigns and messages targeted toward the needs of specific candidates.
5.Use technology. Many companies have found that using job boards (i.e. find a job/post a job, worknepa.com, monster.com, hotjobs.com, etc.) can significantly increase the number of applications for a position. While this method can be an effective tool, be prepared to handle the barrage of resumes and provide relocation assistance. Don’t overlook the power of your own company’s web site either. To be effective, ensure your site is as hassle-free as possible for candidates to find and apply for jobs online.
6.Use recruiting and retention metrics. Metrics are the most commonly used building blocks upon which recruiting and retention decisions, strategies, and plans are built. Without these tools, it is impossible to develop meaningful strategies or determine the effectiveness of those strategies.
So what should you be measuring?
New hire quality - The hiring manager should determine this metric before recruiting is initiated. Thereafter, a performance assessment should be conducted during an employee’s first 90 to 180 days on the job. This is after the easiest and hardest periods of new hire assimilation and also before organizational influences typically impact the rating.
Source distribution - the number of job applicants and new hires per recruitment source.
Time to fill - This metric measures the number of days between when a new job requisition is opened and when a candidate accepts an offer.
Customer satisfaction - Most recruiting time is spent on filling positions while little, if any, time is spent on evaluating whether or not the candidate selected truly met the job qualifications. Gathering manager preferences prior to recruiting and evaluating staffing performance post hire will help to minimize turnover and enhance the quality of the hiring process.
Recruiting cost ratio - This ratio is more valuable than the traditional cost-per-hire metric because it takes into account more factors that affect cost (i.e. geographic differences, industry differences, functional differences, and differences in job level). Calculate the total recruiting costs and then divide by the total compensation recruited. Total costs are determined by adding fixed overhead recruiting expenses, source advertising fees, recruiting fees, internet posting fees, signing bonuses, travel, relocation, and visa expenses.
7.Offer telecommuting and flexible work scheduling. Telecommuting and flexible work schedules are rapidly becoming effective tools for tapping hidden talent. Potential advantages for employees include saving on transportation, parking, and clothing costs, less stress, and more flexibility to meet family care needs. Potential disadvantages include a lack of face-to-face contact and networking, employees may feel they are out of the mainstream, it can be difficult to draw boundaries between work and home life, and employees may lack discipline needed to work uninterrupted and efficiently.
Potential advantages for employers include expanded recruiting areas, reductions in overhead expenses, enhanced worker efficiency, and reductions in sick time expenses. Potential disadvantages include flexible schedules may be difficult to manage, employers must still comply with regulatory requirements governing telecommuter offices, some tasks are difficult to perform virtually, employees may be less efficient, and potential worker burnout may occur since most employees are constantly exposed to the work environment and tend to work far beyond a normal workday.
8.Leverage your benefits package. Keep your company’s benefits above industry standard and add new benefits as you can afford them. Educate employees about the cost and value of their benefits so they appreciate how well you are looking out for their needs. You can’t be an employer of choice without a good benefits package that includes standard benefits such as medical insurance, retirement, and dental insurance. Employees are increasingly looking for more cafeteria-style benefit plans in which they can balance their choices with those of a working spouse or partner.
9.Enhance Referral Programs. One of the most effective recruiting tools readily available to companies today is their current employees. They can recommend excellent candidates, assist in reviewing resumes and qualifications of potential candidates, and help interview people to assess their potential “fit” within your company. Employees who participate in the selection process are also more likely to be committed to helping the new employee succeed.
Other suggestions offered by industry experts include:
Develop relationships with individuals who can refer applicants such as realtors and property managers who may be aware of recently relocated spouses seeking employment
Offer extended or non-traditional hours in which eligible candidates may apply
Aggressively promote referral programs using your web site, stationary, and pay stuffers
Spark interest in your referral program through contests that offer a big prize such as a TV or a mini vacation.
Train employees to recruit for you. Teach them about the types of applicants you are searching for. Then provide them with a generous incentive plan to encourage their efforts.
Go to where applicants are. Do not wait for them to come to you.
10.Read resumes in teams. You will find that different people will focus on different aspects of a resume, whether it is a gap in employment history or the fact that the candidate can speak more than one language. Using teams is a great way to obtain multiple perspectives and also enable process resumes more quickly.
11.Use behavioral based interviewing techniques. Most interviewers hire a candidate because they like the person’s attitude in the interview.Evaluate a candidate’s cultural fit. Evaluating candidates solely on education and experience increases the likelihood they will leave the company. Many industry experts believe that companies miss the “cultural” preferences of the candidate when interviewing, which can result in an improper fit. For instance, if you’re a formal bureaucratic organization and the candidate prefers working in a more open, loosely structured environment, that person may have trouble adjusting. Finding out what kind of organization a candidate prefers and worked for successfully will help to minimize the likelihood of turnover.
12.Conduct background checks. Industry studies have shown that nearly one-third of applicants lie to some extent about their backgrounds, with the most commonly cited discrepancies being inaccurate employment dates and education completed. While you may only be able to confirm only basic information, it can still help to uncover even minor gaps and inconsistencies in information provided by the candidate.
13.Become known as a great place to work. Becoming known as a great place to work can help to increase your attract and retain qualified employees because prospective job candidates will believe employees before they believe your corporate literature. What constitutes a great place to work?
CREDIBILITY, RESPECT, FAIRNESS, PRIDE, TRUST, AND CAMARADERIE
Lack the employee benefit budget of a Fortune 500 company? There are employee benefit solutions to make your staff happy without breaking the bank.
Designing & administering an employee benefit plan is a complex undertaking. Your plan can cover regular benefits such as health care, vacation time, sick pay, and pension plans. How common are these benefits?
Common Employee Benefits
The most common employee benefits offered by small businesses are:
• Paid Vacations; Offered by 75% of small businesses.*
• Employee Health Insurance Plan;61%
• Paid Sick Leave;59%
• Disability Insurance;41%
• Education Reimbursement for Job;39%
• Pension Plan;30%
• Life Insurance;29%
• Dental Insurance;24% *
* provided to full-time staff with at least 1 year of service.
Offering employee benefits provides many paybacks to your small business. Number one is staff retention. An attractive employee benefit package will help recruit good employees and retain them as well. In addition, staff retention helps reduced turnover.
Employee benefits will have different levels of value depending on staff age, sex, and other factors. Talk to your staff to determine which benefits are most rewarding.
1. Direct Deposit: Provide your staff with the option of having their checks directly deposited into their bank account at any bank or credit. Direct deposit will save time and clear the funds faster.
2. Wellness Program: With the rising costs of health care, both employers and employees can take responsibility for the health system by participating in a wellness plan. Any form of fitness programs, smoking cessation, and stress reduction can improve employee absenteeism and overall productivity.
3. Company Discounts: An overlooked employee benefit to staff is the chance to buy company products or services at discount. Even if it's only one major item or an employee purchase day, your staff will appreciate this benefit.
4. Parking Privileges: Depending on employee commuting needs, parking privileges can cover payment of a monthly city transit pass or paying an amount of pre-tax payroll dollars for vehicle parking.
5. Business Cards & Title: Business cards with an employees name and title will offer an emotional appeal to staff. It may seem trivial, but your staff will enjoy the level of professionalism and pride that comes from having a business card.
6. Computer Loan Interest Free: Many employees will value the ability to buy a computer interest-free. Determine a limit of the dollar value of the computer on the plan. Set up an automatic payroll deduction. Make sure a formal agreement is signed in case the employee leaves the company.
7. Community Hours: Offer your employees a limit of regular pay hours in community service time. If a staff member wants to be involved in a volunteer event, have the company pick up the tab. You will win the hearts of the staff and community.
8. Education Plan: There is no doubt today's work force requires lifelong learning to keep pace with the changing demands of employment. Your small company may not be able to pay the tuition costs of an MBA program but some community college course reimbursement is affordable.
In developing your employee benefits program, compare your benefit package to competitors and solicit staff feedback. The best benefits are the ones desired by the workforce and are competitive in the marketplace.
