"The MGMT Solution," Vocabulary from Chapter 11

The general effect of this body of law, which is still evolving through court decisions, is that employers may not discriminate in employment decisions on the basis of sex, age, religion, color, national origin, race, or disability.

The only time that sex, age, religion, and the like can be used to make employment decisions is when they are considered a bona fide occupational qualification. Title VII of the 1964 Civil Rights Act says that it is legal to hire and employ someone on the basis of sex, religion, or national origin when there is a bona fide occupational qualification (BFOQ) that is “reasonably necessary to the normal operation of that particular business.”

It is important to understand, however, that these laws apply to the entire HRM process and not just to selection decisions (e.g., hiring or promotion). These laws also cover all training and development activities, performance appraisals, terminations, and compensation decisions.

Labor laws regulate the interaction between management and labor unions that represent groups of employees. These laws guarantee employees the right to form and join unions of their own choosing.

The Occupational Safety and Health Act (OSHA) requires that employers provide employees with a workplace that is “free from recognized hazards that are causing or are likely to cause death or serious physical harm.”

Disparate treatment, which is intentional discrimination, occurs when people, despite being qualified, are intentionally not given the same hiring, promotion, or membership opportunities as other employees because of their race, color, age, sex, ethnic group, national origin, or religious beliefs.

If no motive can be established, then a claim of disparate treatment may actually be a case of adverse impact. Adverse impact, which is unintentional discrimination, occurs when members of a particular race, sex, or ethnic group are unintentionally harmed or disadvantaged because they are hired, promoted, or trained (or any other employment decision) at substantially lower rates than others.

Quid pro quo sexual harassment occurs when employment outcomes, such as hiring, promotion, or simply keeping one’s job, depend on whether an individual submits to being sexually harassed.

A hostile work environment occurs when unwelcome and demeaning sexually related behavior creates an intimidating, hostile, and offensive work environment.

To be judged job related, recruitment, selection, training, performance appraisals, and employee separations must be valid and be directly related to the important aspects of the job, as identified by a careful job analysis.

Internal applicants represent a “known commodity,” relieving some of the risk of making a bad hiring decision.

A career path is a planned sequence of jobs through which employees may advance within an organization.

External recruitment methods include advertising (newspapers, magazines, direct mail, radio, or television), employee referrals (asking current employees to recommend possible job applicants), walk-ins (people who apply on their own), outside organizations (universities, technical/trade schools, professional societies), employment services (state or private employment agencies, temporary help agencies, and professional search firms), special events (career conferences or job fairs)

Plus, Internet job listings generate nine times as many resumes as one ad in the Sunday newspaper.

Therefore, managers should verify the information collected via resumes and application forms by comparing it with additional information collected during interviews and other stages of the selection process, such as references and background checks

Unfortunately, previous employers are increasingly reluctant to provide references or background check information for fear of being sued by previous employees for defamation.

When previous employers decline to provide meaningful references or background information, they put other employers at risk of negligent hiring lawsuits, in which an employer is held liable for the actions of an employee who would not have been hired if the employer had conducted a thorough reference search and background check.

Next, ask applicants to sign a waiver that permits you to check references, run a background check, or contact anyone else with knowledge of their work performance or history.

When you’ve finished checking, keep the findings confidential to minimize the chances of a defamation charge.

Always document all reference and background checks, noting who was called and what information was obtained. Document everything, not just information you received. To reduce the likelihood that negligent hiring lawsuits will succeed, it’s particularly important to document even which companies and people refused to share reference checks and background information.

Specific ability tests are also called aptitude tests because they measure aptitude for doing a particular task well.

Cognitive ability tests measure the extent to which applicants have abilities in perceptual speed, verbal comprehension, numerical aptitude, general reasoning, and spatial aptitude. In other words, these tests indicate how quickly and how well people understand words, numbers, logic, and spatial dimensions.

Biographical data, or biodata, are extensive surveys that ask applicants questions about their personal backgrounds and life experiences.

Work sample tests, also called performance tests, require applicants to perform tasks that are actually done on the job.

Assessment centers use a series of job-specific simulations that are graded by multiple trained observers to determine applicants’ ability to perform managerial work. Assessment centers often last two to five days and require participants to complete a number of tests and exercises that simulate managerial work.

The primary advantage of structured interviews is that comparing applicants is much easier because they are all asked the same questions.

Needs assessment is the process of identifying and prioritizing the learning needs of employees. Needs assessments can be conducted by identifying performance deficiencies, listening to customer complaints, surveying employees and managers, or formally testing employees’ skills and knowledge.

Performance appraisals are used for four broad purposes: making administrative decisions (e.g., pay increase, promotion, retention), providing feedback for employee development (e.g., performance, developing career plans), evaluating human resource programs (e.g., validating selection systems), and for documentation purposes (e.g., documenting performance ratings and decisions based on those ratings).

A popular alternative to graphic rating scales is the behavior observation scale (BOS). BOS requires raters to rate the frequency with which workers perform specific behaviors representative of the job dimensions that are critical to successful job performance.

Involuntary separation occurs when employers terminate or lay off employees. Voluntary separation occurs when employees quit or retire.

Above-market wages can attract a larger, more qualified pool of job applicants, increase the rate of job acceptance, decrease the time it takes to fill positions, and increase the time that employees stay.

Pay-variability decisions concern the extent to which employees’ pay varies with individual and organizational performance. Linking pay to performance is intended to increase employee motivation, effort, and job performance. Piecework, sales commissions, profit sharing, employee stock ownership plans, and stock options are common pay-variability options.

Proponents of stock options argue that this gives employees and managers a strong incentive to work hard to make the company successful.

The basic idea behind hierarchical pay structures is that large differences in pay between jobs or organizational levels should motivate people to work harder to obtain those higher-paying jobs.

If problems continue, the employees should again be counseled about their job performance, what could be done to improve it, and the possible consequences if things don’t change (such as a written reprimand, suspension without pay, or firing).

Wrongful discharge is a legal doctrine that requires employers to have a job-related reason to terminate employees.

In other words, like other major human resource decisions, termination decisions should be made on the basis of job-related factors such as violating company rules or consistently poor performance.

To avoid laying off employees with critical or irreplaceable skills, knowledge, and expertise, get input from human resources, the legal department, and several levels of management.

Early retirement incentive programs (ERIPs) offer financial benefits to employees to encourage them to retire early. Companies use ERIPs to reduce the number of employees in the organization, to lower costs by eliminating positions after employees retire, to lower costs by replacing high-paid retirees with lower-paid, less-experienced employees, or to create openings and job opportunities for people inside the company.

By contrast, dysfunctional turnover, the loss of high performers who choose to leave, is a costly loss to the organization.