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Unformatted text preview: 14:25 EEO legislation, Civil Rights Act GINA – Genetic Information Disparate impact, treatment, adverse impact Pregnancy Discrimination Immigration Reform & Control Act Civil Rights Act of 1991 Understanding the Legal and Environmental Context of HRM 2­1a: Equal Employment Opportunity As part of Lyndon Johnson's attempt in the 1960s to create the "Great Society," Congress passed an avalanche of legislation aimed at ensuring equal employment opportunity (EEO) in the workplace. These laws were specifically designed to eradicate certain types of employment discrimination that had been all too common–discrimination based on race, color, sex, religion, national origin, age, and disability. These categories are referred to as protected classifications because they are protected from discrimination by EEO laws. Subcategories of people within each protected classification are referred to as protected groups . For example, "male" and "female" are the protected groups within the protected classification of "sex." EEO legislation affords protection to all protected groups within a protected classification, not just the minority groups. Thus, discrimination aimed at a man is just as unlawful as that aimed at a woman. The lone exception to this rule concerns the use of affirmative action programs, which, under certain circumstances, allow employers to treat members of certain protected groups preferentially. We discuss this issue later in the chapter. EEO Laws The major EEO laws are summarized in Exhibit 2­1. Each prohibits discrimination based on an individual's protected classification. These laws differ from one another primarily in terms of the specific protected classifications covered. Exhibit 2­1. EEO Laws Civil Rights Act of 1964 (Title VII) Title VII of the Civil Rights Act (CRA) of 1964 covers organizations that employ 15 or more workers for at least 20 weeks during the year. This law prohibits discrimination that is based on the protected classifications of race, color, religion, national origin, and sex. Specifically, the law states that: e for an employer to fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individ , because of such individual's race, color, religion, sex, or national origin. The CRA of 1964 is probably the most valuable tool that employees have for remedying workplace discrimination because it covers the greatest number of protected classifications. If a court determines that discrimination has occurred, the victim is entitled to relief in the form of legal costs and back pay (i.e., the salary the person would have been receiving had no discrimination occurred). For instance, let's say that a woman sues a company for rejecting her application for a $25,000 per year construction job because the company unlawfully excludes women from this job. The litigation process takes two years and, ultimately, the court rules in the applicant's favor. To remedy this discrimination, the court would require the company to pay her legal fees and grant her $50,000 in back pay (two years' salary). The Civil Rights Act of 1964 has had an enormous impact on the HRM practices of many companies, forcing them to take a close look at the way they hire, promote, award pay raises, and discipline their employees. As a result of this self­ scrutiny, many firms have changed their practices, making them more systematic and objective. For instance, most firms now require their supervisors to provide detailed documentation to justify the fairness of their disciplinary actions, and many firms are now more cautious with regard to their use of employment tests that restrict the employment opportunities for certain protected groups. Civil Rights Act of 1991 As the 1990s approached, the impact of the CRA of 1964 began to fade. A number of Supreme Court decisions in the mid­ to late 1980s made discrimination claims more difficult for employees to substantiate. To put more "teeth" into the law, Congress amended it by enacting the Civil Rights Act (CRA) of 1991 . Its major provisions are summarized in Exhibit 2­2. Exhibit 2­2. Summary of Main Provisions of the Civil Rights Act of 1991 Purposes To provide appropriate remedies for intentional discrimination and unlawful harassment in the workplace To codify the concepts of "business necessity" and "job related" To provide statutory guidelines for the adjudication of disparate impact suits under Title VII of the CRA To expand the scope of relevant civil rights statutes in order to provide adequate protection to victims of discrimination Damages in Cases of Intentional Discrimination Right of Recovery In an action of intentional discrimination (disparate treatment) filed under the CRA of 1964, the Vocational Rehabilitation Act (VRA), or the Americans with Disabilities Act (ADA), the complaining party may recover punitive, as well as compensatory, damages. Punitive damages would be allowed if the discriminatory practices were engaged in with malice or reckless indifference to the legal rights of the aggrieved individual. Limitation Compensatory damages are awarded for future financial losses, emotional pain, suffering, inconvenience, mental anguish, and loss of enjoyment of life. Punitive damages are awarded for punishment. The total damages shall not exceed – $50,000 for firms employing 15­100 employees – $100,000 for 101­200 employees – $200,000 for 201­500 employees – $300,000 for 500+ employees Jury Trial–Either party may demand a trial by jury to determine the appropriate compensatory or punitive damages. Burden of Proof in Disparate Impact Cases A disparate impact case of discrimination is established when either of the two following conditions are met: It is demonstrated that a company uses a particular employment practice that causes disparate impact and fails to demonstrate that the challenged practice This 1991 amendment expands the list of remedies that may be awarded in a discrimination case; the employer now has more to lose if found guilty of discrimination. In addition to legal fees and back pay, an employer may now be charged with punitive and compensatory damages (for future financial losses, emotional pain, suffering, inconvenience, mental anguish, and loss of enjoyment of life). The "cap" for these damages ranges from $50,000 to $300,000, depending on the size of the company. Employees are entitled to such damages in cases where discrimination practices are "engaged in with malice or reckless indifference to the legal rights of the aggrieved individual" (e.g., the employer is aware that serious violations are occurring, but does nothing to rectify them). Moreover, the CRA of 1991 adds additional bite to the 1964 law by providing a more detailed description of the evidence needed to prove a discrimination claim, making such claims easier to prove. This provision is discussed in more detail later in the chapter. The CRA of 1991 also differs from the 1964 law by addressing the issue of mixed­motive cases . This type of case is one in which an employment decision, such as hiring or promotion, is based partly on a "legitimate" motive and partly on a discriminatory one. For instance, a company rejects the application of a woman because she behaves in an "unladylike manner": She is "too aggressive for a woman, wears no makeup, and swears like a man." The company is concerned that she would offend its customers. The employer's motives are thus mixed. Its concern about offending customers is a legitimate motive; its stereotyped view of how a "lady" should behave is a discriminatory one. The CRA of 1991 states that mixed­motive decisions are unlawful. That is, a hiring practice is illegal when a candidate's protected group membership is a factor affecting an employment decision, even if other, more legitimate factors are also considered. Thus, if the "unladylike" applicant can prove to the court that her rejection was based, at least in part, on the employer's stereotyped view of how a woman should behave, she would win the case. Pregnancy Discrimination Act of 1978 The Pregnancy Discrimination Act (PDA) of 1978 amends the CRA of 1964 by specifically including discrimination against women based on pregnancy, childbirth, or related medical conditions. It states that employees who are unable to perform their jobs because of a pregnancy­related condition must be treated in the same manner as employees who are temporarily disabled for other reasons. A review of PDA court decisions published in 2003–2004 uncovered the following types of cases: The employee was fired because her pregnancy caused excessive absences. The employee was fired, or the applicant was rejected, because her pregnancy was expected to cause excessive absences, especially during critical business periods. The employee was fired because she was expected to become less committed to her job once the baby was born. The employee was not reinstated to her old job following maternity leave because her replacement performed the job better. The employee was fired because her pregnancy prevented her from performing certain important duties. In their decisions, the courts ruled that employers are not required to grant pregnant women preferential treatment. For instance, pregnant employees must meet the same attendance standards as the other employees. However, employers violate the PDA when they base employment decisions on stereotyped views regarding pregnancy, such as the view that pregnant women will become less committed to their jobs once their babies are born. Immigration Reform and Control Act of 1986 The Immigration Reform and Control Act (IRCA) of 1986 prohibits discrimination based on national origin and citizenship. Specifically, the law states that employers of four or more employees cannot discriminate in the selection of any individual (other than an illegal alien) because of that person's national origin or citizenship status. In addition to being an antidiscrimination law, this act makes it unlawful to knowingly hire an unauthorized alien. At the time of hiring, an employer must require proof that the person offered the job is not an illegal alien. Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act (ADEA) of 1967 is intended to protect "older workers" (i.e., ages 40 and older) from age discrimination. The ADEA, which applies to nearly all employers of 20 or more employees, promotes the employment of older persons based on their ability, rather than age. Note that the ADEA protects only "older" individuals from discrimination; people under 40 are not protected. The act also prohibits employers from giving preference to individuals within the 40 or older group. For instance, an employer may not discriminate against a 50­year­old by giving preference to a 40­year­old. Americans with Disabilities Act of 1990 (Title I) The Americans with Disabilities Act (ADA) of 1990 "provides a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." The employment implications of the act, which are delineated in Titles I (private section) and II (public sector) of the ADA, affect nearly all organizations employing 15 or more workers. According to the act, an individual is considered disabled if he or she has a physical or mental impairment that substantially limits one or more of the individual's major life activities, such as walking, seeing, hearing, breathing, and learning, as well as the ability to secure or retain employment. To win a complaint, an individual who has been denied employment because of a disability must establish that, with accommodation (if necessary), he or she is qualified to perform the essential functions of the job in question. To defend successfully against such a suit, the employer must demonstrate that, even with reasonable accommodation, the candidate could not perform the job satisfactorily, or it must demonstrate that the accommodation would impose an undue hardship. The ADA defines "undue hardship" as those accommodations that require significant difficulty to implement or significant expense on the part of the employer. An example of an ADA case would be one in which an employee is fired because of frequent absences caused by a particular disability. The employee may argue that the employer failed to offer a reasonable accommodation, such as a transfer to a part­time position. The employer, on the other hand, may argue that such an action would pose an undue hardship in that the creation of such a position would be too costly. ADA issues are discussed in greater detail in Chapter 6, "Selecting Applicants," and in Chapter 13, "Meeting Employee Safety and Health Needs." Interpreting EEO Laws It is clear from the preceding discussion that an employer may not discriminate on the basis of an individual's protected group membership. But exactly how does one determine whether a particular act is discriminatory? Consider the following examples: Case 1: A woman was denied employment as a police officer because she failed a strength test. During the past year, that test had screened out 90 percent of all female applicants, but only 30 percent of all male applicants. Case 2: A woman was denied employment as a construction worker because she failed to meet the company's requirement that all workers be at least 5' 8" and weigh at least 160 pounds. During the past year, 70 percent of the female applicants, but only 20 percent of the male applicants, had been rejected because of this requirement. Case 3: A female accountant was fired despite satisfactory performance ratings. The manager claims she violated company policy by moonlighting for another firm. However, the manager was heard making the comment, "Women don't belong in accounting, anyway." Case 4: A male manager fired his female secretary because he thought she was too plain looking, replacing her with a woman who, in his opinion, is much prettier. We know that the Civil Rights Acts of 1964 and 1991 prohibit sex discrimination. However, knowing that sex discrimination is unlawful provides very little guidance in these cases. For instance, how important are the intentions of the employer? How important are the outcomes of the employment decision? In the first two cases, the employers' intentions seem to be noble–the male and female applicants were judged according to the same standards. However, the outcomes of the employment decisions were clearly disadvantageous to the women. In the third case, the employer's intentions appear questionable, because the manager obviously has a bias against female accountants. However, the outcome seems fair. After all, she did violate the company policy. In the fourth case, the employer's intentions are clearly biased, but the outcome did not adversely affect women in the sense that another woman replaced the employee. To determine whether an EEO law has been violated, one must know how the courts view the concept of discrimination. In actuality, the courts recognize two different types of discrimination: intentional and unintentional. Intentional Discrimination Referred to as disparate treatment discrimination, this type of discrimination is defined as treating people unfairly based on their membership in a protected group. For example, the firing of the female accountant in Case 3 is an example of disparate treatment because the discharge was allegedly triggered by the supervisor's bias toward female accountants. However, the employers' actions in Cases 1 and 2 would not be classified as disparate treatment because there was no apparent intent to discriminate. The employers judged all applicants according to the same criteria; it just so happened that fewer women than men met those criteria. Although disparate treatment is often the result of an employer's bias or prejudice toward a particular group, it may also occur as the result of trying to "protect" the group members' interests. For instance, consider the employer who refuses to hire women for dangerous jobs in order to protect their safety. Although the intention might be noble, this employer would be just as guilty of discrimination as one with less noble intentions. What about Case 4, where a secretary was fired for being "too plain"? Would this be a viable case of disparate treatment? The answer is "no" if the bias displayed by the manager was directed at appearance, not sex. Appearance is not a protected classification. The answer is "yes" if the appearance standard were being applied only to women; that is, the company fired women but not men on the basis of their looks. Unintentional Discrimination Called disparate impact , this type of discrimination is defined as any practice without business justification that has unequal consequences for people of different protected groups. Disparate impact discrimination would occur, for instance, if an arbitrary selection practice (e.g., an irrelevant employment test) resulted in the selection of a disproportionately low number of females or African­ Americans. The key notion here is "arbitrary selection practice." If the selection practice were relevant or job related, rather than arbitrary, the employer's practice would be legal, regardless of its disproportionate outcome. For example, despite the fact that the female applicants were rejected at a higher rate than male applicants in Cases 1 and 2, the employer's actions would still be lawful if theselection criteria (e.g., the strength test and height and weight requirements) were deemed to be job related. Later in the chapter, we discuss how the courts make such a determination. As it turns out, strength tests are much more likely to be considered job related than height and weight requirements. Thus, the employer would probably win Case 1 and lose Case 2. Discrimination and the Courts Ultimately, the courts decide whether a specific action of an employer is lawful. Employers must thus understand the decision­making process of the courts in order to be able to gauge the legality of their HRM practices. When hearing a discrimination case, the courts first require that the plaintiff (i.e., the employee or applicant filing the discrimination complaint) establish a prima facie case of discrimination. Prima facie is a Latin phrase meaning "first appearance." To establish a prima facie case, the plaintiff must present evidence that makes the employer's actions appear discriminatory. For example, an African­American applicant who is denied a job could establish a prima facie case by proving that he or she is qualified for the job. At first appearance, this action seems discriminatory. Rejecting a qualified minority is exactly the kind of thing that a biased employer would do. When a plaintiff establishes a prima facie case, the court does not automatically find the employer guilty. It simply means that the complainant has been able to establish the merits of his or her case sufficiently enough for the courts to agree to look into the matter further. The burden then shifts to the employer to rebut the case by presenting evidence that justifies the fairness of its actions. For instance, the employer could win its case by convincing the court that the qualified African­ American was rejected because the person selected for the job was even more qualified. Establishing a Prima Facie Case of Intentional Discrimination A prima facie case of disparate treatment may be established in a number of ways. The most commonly used approaches are described in the following paragraphs. The particular approach used depends on the nature of the case and the type of claim filed, that is, disparate treatment or disparate impact. A plaintiff's case can be strengthened by using more than one type of evidence. Restricted Company Policy A prima facie case of discrimination is automatically established when the plaintiff proves that the company has a formal policy that restricts the selection of an entire protected group. An example of such a policy would be one issued by a police department that states that no one over the age of 35 will be considered for the job of police officer. Thus, all people in the protected group of 40 and above would be barred from consideration. Discriminatory Remarks A plaintiff can also establish a prima facie case by producing evidence that certain biased remarks were made by an employer (orally or in writing) regarding the protected group in question. This type of evidence recently forced Texaco to settle a multimillion­dollar lawsuit when a group of its executives were "caught on tape" making derogatory statements about the company's African­American employees, plotting ways in which the company could prevent their promotions. The McDonnell­Douglas Test Plaintiffs do not always have such blatant evidence regarding an employer's intent to discriminate. For instance, suppose a 52­year­old male applicant is rejected for a job and believes that his advanced years triggered this rejection. However, there is no specific company policy banning older workers, nor have any derogatory comments been made about older workers. How would this individual establish a prima facie case? The Supreme Court has developed a test (in the case of McDonnell­Douglas v. Green) that is used to infer the presence of discriminatory intent when more direct evidence of discrimination is lacking. Called the McDonnell­Douglas test (see Figure 2­1), it requires the plaintiff to show that he or she: Belongs to the protected group in question. Has applied for and is qualified for the job for which the employer was seeking applicants. Was rejected. After rejection, the position remained open or was filled by someone who was not a member of that protected group. Figure 2­1. The McDonnell­Douglas Test The courts modify this test when employees contest decisions that do not involve hiring. For instance, when contesting a discharge decision, steps 2–4 are modified in the following way: 2. Has performed the job satisfactorily. 3. Was discharged. 4. After the discharge, the position remained open or was filled by someone who was not a member of that protected group. The McDonnell­Douglas test is further modified when applied to age discrimination cases by changing step 4 to read, ". . . the position remained open or was filled by someone who is substantially younger than the claimant." The 52­ year­old male in question could thus establish a prima facie case by proving that he was qualified for the position and yet it was left open or filled by a person who was substantially younger than him, even in cases where the replacement is over 40. Establishing a Prima Facie Case–Unintentional Discrimination In the disparate treatment cases described in the previous paragraphs, the courts seek evidence of employer bias. In disparate impact cases, bias is not an issue. Therefore, the courts seek a different type of evidence. Specifically, the courts try to determine whether the HR decision being contested differentially impacts the various protected groups. The most common test of this effect is referred to as the four­fifths rule . The Four­Fifths Rule The four­fifths rule helps the courts determine whether between­group differences in hiring rates are large enough to be important. It is calculated by comparing the hiring rate of the "disadvantaged" protected group (i.e., the group claiming discrimination) with the rate of the "advantaged" group. (If there is more than one advantaged group, the group with the highest passing rate is used for comparison purposes.) A prima facie case of discrimination is established when the hiring rate of the former group is less than four­fifths of the latter group. To determine whether the hiring rate of a protected group satisfies the four­fifths rule, an employer should identify the protected group with the highest hiring rate and multiply that rate by .8. For instance, if 20 white males applied for a job and 10 were selected, the hiring rate would be 50 percent. Fifty percent multiplied by .8 is 40 percent. The four­fifths rule would be violated if any other protected group's hiring rate were less than 40 percent. For example, a prima facie case of sex discrimination would be established if the hiring rate for men were 80 percent, while the rate for women were 50 percent. In this instance, the needed hiring rate for women would be 80 x .8, or 64 percent, well above the actual rate of 50 percent. Rebutting a Prima Facie Case–Intentional Discrimination If the plaintiff succeeds in establishing a prima facie case of disparate treatment, the burden shifts to the employer to rebut that case. The type of evidence necessary to achieve this aim depends on the nature of the prima facie case. Restricted Company Policy When the employer has a policy that excludes an entire protected group, its only viable option is the use of a BFOQ defense . The term BFOQ refers to "bona fide occupational qualification." When using a BFOQ defense, the employer argues that it purposely discriminated against all members of a protected group for one of the following four reasons (see Figure 2­2): All or nearly all: All or nearly all of the members of that group are incapable of performing the job in question. Authenticity: To be "authentic," the employer must limit its hiring to members of a particular protected group, thus excluding all others. For example, an "authentic" Japanese restaurant would use a BFOQ defense to justify its practice of hiring only Japanese servers. Victoria's Secret would use this defense to justify its exclusion of male models. (Men would not look "authentic" wearing women's undergarments.) Propriety: It would be improper to hire members of one or the other sex for a particular job (e.g., hiring a woman to work as an attendant in a men's rest room). Safety: The employment of an older worker would put the worker or others at risk. For example, commercial airlines will not employ pilots over the age of 60 because such pilots pose a greater risk of causing an accident than do younger pilots. Figure 2­2. The BFOQ Defense At one time, employers attempted to justify the exclusion of women from jobs traditionally held by men by using the all or nearly all rule. For example, women were often excluded from jobs that require above­average strength (e.g., police officer, firefighter, construction worker) because women are generally weaker than men. The courts, however, do not condone this type of BFOQ defense. They mandate that each applicant be evaluated according to his or her ability. Employers' attempts to invoke the other BFOQ defenses (authenticity, propriety, and safety) have occasionally been successful. Hooter's restaurant, for instance, successfully used the "authenticity" defense to justify its policy of excluding male servers; the restaurant claimed that the use of scantily dressed female servers was essential for maintaining its image as a "sexy" restaurant. The "safety" defense has been successfully used in age­related cases where firms were able to prove that safety­related skills (e.g., vision or reaction time) diminish with age and that employing people over the maximum age would thus pose a safety risk to themselves or others. We discuss this issue further in Chapter 6, "Selecting Applicants." Discriminatory Remarks Discriminatory remarks are considered strong evidence of bias. If a plaintiff can prove that such remarks have been made, the employer will lose the case unless it can successfully argue that the remarks were not very derogatory (e.g., calling a 62­year­old employee "Good old Charley"). The employer can also try to argue that the person who made the remarks had no influence on the hiring decision. The McDonnell­Douglas Test When a prima facie case has been established on the basis of the McDonnell­ Douglas test, theemployer's burden is to present evidence showing that its employment decision was based on legitimate, nondiscriminatory reasons. For instance, the employer could show that an applicant's rejection was due to the fact that the selected candidate was more qualified. Once an employer has convinced a court that the reason for its employment decision was, indeed, legitimate, the plaintiff could still win the case. To do so, the plaintiff must prove that the reason offered by the employer was merely a pretext or an excuse; the "real" reason for the action was discrimination. For example, suppose an employer discharged a black employee for an unauthorized absence. Although such a reason would appear to be legitimate and nondiscriminatory, the plaintiff could prove that this reason is merely a pretext by demonstrating that several white employees had been guilty of the same infraction, and yet were not fired. Rebutting a Prima Facie Case–Unintentional Discrimination To defend itself against a violation of the four­fifths rule, a firm must demonstrate that the procedure in question is a business necessity. The issue of how to establish a business necessity defense is discussed in Chapter 6, "Selecting Applicants." For now, we quote the Supreme Court's decision in Watson v. Fort Worth Bank: employment criteria must bear more than an indirect or minimal relationship to job performance . . . the criteria mus fectively. Evidence may include formal validation studies, expert testimony, and prior successful experience. [emphas According to the CRA of 1991, when several selection devices are used, only those causing the disparate impact must be justified. For example, all applicants take a written test and are interviewed. Women do just as well as men on the test, but do more poorly on the interview. Women are thus hired at a lower rate than are men. In this instance, the employer must justify the business necessity of the interview, but not the test. The lone exception to this rule occurs when the "elements of a respondent's decision­making process are not capable of separation for analysis, [then] the decision­making process may be analyzed as one employment practice." For example, an employer ranks each applicant by subjectively combining information derived from application blanks, interviews, and reference checks. Because the weight or importance of the separate elements cannot be specified, it is impossible to discern which selection instrument caused the disparate impact. In this instance, the employer must then justify the business necessity of each selection device. Disparate treatment discrimination is defined as any practice without business justification that has unequal consequences for people of different groups. Choose True or False. True False Title VII of the Civil Rights Act of 1964 only applies to organizations that employ 20 or more workers for at least 15 weeks during the year. Choose True or False. True False ADA ­ . Essential functions vs non­essential functions of the law ­ Prima Fascia requirement (p. 32) ­ Intentional vs unintentional discrimination ­ Utilization analysis ­ A utilization analysis is a statistical procedure that compares the percentage of each protected group for each job category within the organization to that in the available labor market. If the organizational percentage is less than the labor market percentage, the group is classified as being "underutilized." For example, the percentage of professionals within the organization who are women would be compared to the percentage of professionals in the available labor market who are women. The organization would classify women as being underutilized if it discovered, for instance, that women constitute 5 percent of the firm's professionals and yet constitute 20 percent of the professionals in the available labor market. Chapter 5 – p108 Recruitment on competitive advantage ­ To attain (or maintain) competitive advantage, an organization must successfully compete with other organizations in its recruitment efforts. Specifically, the HRM department must ensure that its recruitment efforts reach a sufficient number of qualified applicants, and it must take action to enhance the likelihood that the best applicants will accept their job offers. The Los Angeles United School District accomplished the latter aim by making the process user­friendly and royally treating the top candidates. Qualified individuals cannot join an organization if they do not know about existing job openings. One way to ensure a sufficient number of qualified candidates, then, is to locate these individuals and notify them of available opportunities. Notifications should capture candidates' attention and stimulate their interest in applying for positions. The achievement of this aim may, at times, require innovation on the part of an employer, as illustrated in On the Road to Competitive Advantage 5­2. Core personnel vs contingency ­ Core versus Contingency Personnel Many companies have begun to adopt the strategy of staffing their positions with both core personnel and contingency personnel. Core personnel consist of employees who are hired in the "traditional" manner; that is, they are placed on the organization's payroll and are considered "permanent employees." Contingency personnel perform work for the company, but they are not included on the organization's payroll. Rather, they are employed by a supplier agency and are "loaned" to the firm on a temporary basis for a fixed fee. The supplier pays the workers' salaries and benefits. Supplier agencies fall into three categories: labor leasors , temporary employment agencies , and independent contractors . Leased and temporary employees work side by side with core employees, often in the same jobs. Leased employees differ from temporary ones mainly in terms of their length of employment; contracts run longer for leased employees. Individuals secured through independent contractors, on the other hand, differ from the other contingency personnel in that they are selected to perform an entire function. For example, companies frequently contract all their maintenance work through a skilled­trades contractor. The use of contingency personnel is rapidly escalating. According to a 2001 Department of Labor survey, there are now 8.6 million independent contractors in this country and 1.2 million temps, together constituting over 7 percent of the U.S. workforce. There are now over 7,000 temporary staffing firms, and these firms are being used at an increasing rate by nearly all companies. Seventy­two percent of employers are now employing at least one contingent worker. As one team of experts notes: If the current trend continues, typical large corporations of the future may consist of a relatively small core of permanent employees, with the remainder of the workforce composed of individuals hired for specific, temporary assignments. Four advantages result from the use of contingency personnel. One is that this practice provides management with the flexibility to control fixed employee costs. Unlike core workers, the number of contingency workers can be easily increased or decreased according to the rise and fall of business conditions. Another advantage is that the use of such personnel relieves a company of many of its HRM burdens. The supplier handles the administrative work associated with payroll, insurance administration, and benefits. The supplier also screens and hires the workers. A third advantage is cost savings. Contingency workers cost less than core personnel because the supplier pays certain overhead costs, such as payroll and insurance. Noel Ice Company, for instance, was able to reduce its monthly health coverage costs from $112 to $87 per employee through the use of employee leasing. The fourth advantage is that the contingency workers who excel at their jobs can be offered core positions. Companies can minimize their risk of making a poor hiring decision by giving contingency workers a trial period before hiring where they can "show their stuff." The use of contingency personnel is not without its disadvantages, however. When beginning their job assignments with a company, contingency employees may need a considerable amount of orientation and training regarding company procedures and policies. This raises questions regarding the cost­effectiveness of this approach. Another problem is the possibility that, compared to core employees, contingency workers might be less loyal or committed to the "host organization." The use of contingency personnel could also lead to problems stemming from the fact that these individuals often receive better wages than core personnel for performing the same work. This inequity could cause resentment among the core workers. In general, firms should use contingency workers in these types of situations: Certain types of hard­to­find expertise are required. Companies are trying to staff new offices in geographic areas far from main headquarters. Companies are trying to staff positions to work on projects in which unusually high risk factors may jeopardize a company's existing workers' compensation rates. Internal versus External Recruiting As it hires core personnel, an organization must decide whether to recruit them internally or externally. That is, the company must decide whether to fill its vacant jobs with current employees or with applicants from outside the organization. In most firms, external recruitment is limited primarily to entry­level jobs. Jobs above the entry level are usually filled with current employees through promotions. Promotion possibilities often enhance morale and motivation because they give employees a chance to advance their careers within the company. One study, for example, found that promotional opportunities led to reduced turnover, increased job satisfaction, and better job performance. Other advantages of internal recruitment over external are as follows: The qualifications of internal candidates are already well known to the employer. Internal recruitment is less expensive. Job openings can be filled more quickly through internal recruitment. Internal candidates are more familiar with organizational policies and practices, and thus require less orientation and training. Internal recruitment can lead to problems, however. When a position becomes vacant, many employees may be considered for that slot. Most, of course, will be rejected, and some of the rejectedcandidates may become resentful. One study, for instance, found that employees who were denied promotions reported greater feelings of inequity and had higher rates of absenteeism than their promoted counterparts. Another potential problem associated with internal recruitment occurs when workers are promoted into supervisory positions in the units in which they were already working. These individuals must now assume a new role with their past coworkers, and difficulties often arise as past friends become subordinates. Despite potential hazards associated with internal recruitment, most jobs are filled in this manner. External recruitment for jobs above the entry level is usually restricted to situations such as these: An outsider is needed to expose the organization to new ideas and innovations. No qualified internal candidates apply. The organization needs to increase its percentage of employees within a particular underutilized group. According to management expert Ken Jordan, ensuring fairness is the key to implementing a successful internal recruitment system. His specific recommendations are presented in Taking a Closer Look 5­1. Career dev. Systems on p121 Steps in the recruiting process Chapter 12 Why unions are the way they are today. Taft­Hartely Act Pg363 In 1947, the NLRA was amended by the Labor–Management Relations Act (Taft­ Hartley Act) . At the time, the American public was somewhat disenchanted with unions, primarily because of an epidemic of strikes following World War II. Congress wanted to impose restraints on organized labor. The Taft­Hartley Act tried to restore a balance of power between employers and unions. The act made it possible for union members to rid themselves of their union by means of a decertification election . It also specified a set of unfair union labor practices, including: Coercing employees who are trying to exercise their collective bargaining rights Pressuring employers to discriminate against an employee or applicant because he or she is not a union member Refusing to bargain in good faith with an employer Forcing employers to pay for unneeded services, such as hiring more employees than are needed The Taft­Hartley Act also gave the president of the United States the right to intervene in national emergency strikes (i.e., strikes that affect an entire industry in a way that imperils national health or safety). The president may prohibit workers from striking for 80 days, thereby giving the parties further opportunity to resolve any problems standing in the way of signing a collective bargaining agreement. Last, the Taft­Hartley Act allowed states to pass legislation that would outlaw closed shops , companies that require union membership as a condition of employment. In "right­to­work states," open shops are the rule. Employees covered by the contract do not have to join the union nor may they be assessed a fee for the union representation from which they benefit. Union membership is thus purely voluntary. Twenty­two states, identified in Figure 12­1, have passed right­to­work legislation. Mandatory vs bargaining item Agreement systems ­ administering bargaining systems ­ Administering a Collective Bargaining Agreement After the union and the employer have negotiated a collective bargaining agreement, they are bound by its terms for the duration of the contract. Because the parties are likely to interpret contract provisions differently, disputes often arise. Therefore, both sides need some mechanism to fairly interpret the language of the agreement in specific situations. Grievance Systems Defined Contract disputes are resolved through a grievance system . Grievance systems are contractual provisions included in almost all collective bargaining agreements that provide due process for claims of contract violations. A grievance , which can be filed by either employees or employers, is an allegation that contract rights have been violated. Consider the following example: Suppose that a contract contains a provision that states that an employee will only be discharged for "just cause." A union member by the name of Mary Stevens insults her immediate supervisor in front of a number of other workers and managers. The company may believe that it has just cause for firing Mary; Mary may believe that such an extreme disciplinary action is unjust. This incident is likely to result in the union filing a grievance on behalf of Mary. Common grievance issues include the following: Discipline and discharge Work assignments Employment decisions Production standards Working conditions Imposition of new rules Role of Grievance Systems in Union–Management Relations Grievance systems play at least two important roles in union–management relations. First, they provide a forum in which disagreements concerning violations of contract rights can be adjudicated. Thus, neither party must threaten or actually carry out some economic intimidation (e.g., a strike by the union or a lockout by the employer) in order to resolve the matter. Indeed, most contracts ban strikes and lockouts while the collective bargaining agreement is in force. Second, grievance systems influence the way workers view organized labor. A survey of approximately 1,500 American workers revealed that grievance handling was considered the most important union activity. The anticipation of assistance in resolving grievances has been found to differentiate workers who vote for union certification from those who vote against it. How Grievance Systems Operate Typically, grievance systems incorporate three steps, although four­step procedures are not uncommon. Figure 12­4 depicts these steps. The first step is the informal stage of the system during which the union steward (an employee who is elected to represent coworkers), the complainant, and the complainant's immediate supervisor try to resolve the matter before it is written up and becomes an official grievance. Succeeding steps in the system almost always involve higher level representatives of the union and employer. grievance system ­ Employees' grievances are often triggered by their managers' actions. The grievance may involve, for instance, an "unfair" performance appraisal, an unreasonable assignment, or perceived favoritism. These types of complaints can turn into formal grievances if the manager handles them improperly. When faced with this type of situation, you should follow these steps: Make an appointment to discuss the problem unless the problem is urgent and must be addressed immediately. One reason for setting a time for another meeting is that you may be busy and thus unable to give the employee your full attention. This practice also gives the worker, who may be feeling very angry or upset, a chance to calm down. Do not become defensive, even if the complaint has no foundation. When an employee complains to you about something you have done, do not attempt to "win" by successfully countering each argument with one of your own. Rather, view the situation as a problem that the two of you must work together to solve. Even when you feel the complaint has no foundation, you should respond empathetically. Show your interest through nonverbal behavior, such as posture (lean back with your arms uncrossed), facial expression, and eye contact. Let the person blow off some steam. Give the worker an opportunity to "get it all out" without interruption. Employees will often calm down a bit after they have gotten their complaint off their chest. In some cases, just being able to express negative emotions to the boss will be enough to satisfy an employee. Set ground rules, if necessary. If the worker begins verbally attacking you, it is probably a sign that he or she is more interested in hurting you than in solving a problem. When this happens, set some ground rules by calmly stating, "I'll be happy to discuss this problem with you, but we need to set some ground rules first. Let's stay away from any personal attacks." Redirect from accusations to specific behaviors. To transform a personal complaint into a joint problem, you must redirect the conversation from general accusations to descriptions of specific behaviors. Ask for details about actions that form the basis for the complaints. For instance, if charged with favoritism, ask for specific examples. Check your level of understanding by summarizing the employee's main points and asking if your summary is correct. Agree with some aspect of the complaint without accepting all of its ramifications. Demonstrate your concern for the employee by identifying aspects of the employee's complaint with which could can agree. This response demonstrates your understanding of their point of view and your willingness to be reasonable: "You're right; I did give Tom an easier assignment than I gave you. Here's why . . ." If you cannot identify any areas of agreement, agree with the employee's perception of the problem: "I can understand why you thought I was playing favorites." Or "I can see why you would think that." Ask for suggestions of acceptable alternatives. Change the tone of the conversation from negative to positive by asking the employee to suggest a specific solution rather than trying to determine who is right and wrong. For instance, ask: "What can I do in the future, so that this won't happen again?" 14:25 14:25 ...
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This note was uploaded on 03/08/2011 for the course ENC 1101 taught by Professor Kurner during the Spring '08 term at FIU.

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