Workforce Planning and Employment

THE HRCI TEST SPECIFICATIONS FROM THE HUMAN RESOURCE DEVELOPMENT FUNCTIONAL AREA COVERED IN THIS CHAPTER INCLUDE:

• Ensure that workforce planning and employment activities are compliant with applicable federal laws and regulations.
• Identify workforce requirements to achieve the organization's short- and long-term goals and objectives (for example: corporate restructuring, workforce expansion or reduction).
• Conduct job analyses to create and/or update job descriptions and identify job competencies.
• Identify, review, document, and update essential job functions for positions.
• Influence and establish criteria for hiring, retaining, and promoting based on job descriptions and required competencies.
• Analyze labor market for trends that impact the ability to meet workforce requirements (for example: federal/state data reports).
• Assess skill sets of internal workforce and external labor market to determine the availability of qualified candidates, utilizing third party vendors or agencies as appropriate.
• Identify internal and external recruitment sources (for example: employee referrals, diversity groups, social media) and implement selected recruitment methods.
• Establish metrics for workforce planning (for example: recruitment and turnover statistics, costs).
• Brand and market the organization to potential qualified applicants.
• Develop and implement selection procedures (for example: applicant tracking, interviewing, reference and background checking).
• Develop and extend employment offers and conduct negotiations as necessary.
• Administer post-offer employment activities (for example: administer drug/alcohol and fitness for work testing, execute employment agreements, complete I-9/E-Verify process, coordinate relocations, and immigration).
• Develop, implement, and evaluate orientation and on-boarding processes for new hires, rehires, and transfers.
• Develop, implement, and evaluate employee retention strategies and practices.

  

• Develop, implement, and evaluate the succession planning process.
• Develop and implement the organizational exit/off-boarding process for both voluntary and involuntary terminations, including planning for reductions in force (RIF).
• Develop, implement, and evaluate an affirmative action plan (AAP) as required.
• Develop and implement a record retention process for handling documents and employee files (for example: pre-employment files, confidential/medical files, and benefits files).

In today's fast-paced business environment, human resource (HR) professionals must be able to “turn on a dime,” adjusting workforce plans and employment activities to meet the changing needs of their organizations. Workforce Planning and Employment (WFP) is the functional area of the human resource body of knowledge (BOK) that tests your knowledge of workforce planning and the associated employment activities of staffing, retaining, and exiting employees from the organization. The workforce planning process identifies skills and timelines for acquiring the employees needed to achieve organization goals; staffing is the process by which HR professionals work with line management to locate, hire/transfer, and integrate new employees into existing workgroups. Once employees are hired, activities include ensuring that talented individuals in the organization are identified, developed, and retained so they're available to move into positions of greater responsibility as organizational needs evolve. The final function of WFP, organizational exits, includes voluntary exits (those due to resignations or retirements) and involuntary exits (those occurring due to mergers, outsourcing, terminations for cause, and so on). This chapter reviews the PHR and SPHR responsibility and knowledge requirements for WFP, including the impact of federal legislation, regulation, and case law on these activities.

Let's begin with the federal laws and regulations that govern employment relationships.

Federal Employment Legislation

Over the years, all three branches of the federal government have participated in regulating the ways employers interact with their employees. Congress has enacted legislation, the Executive Branch has promulgated regulations, and the courts have adjudicated cases to clarify the legislation and regulation created by the other two branches. Table 4.1 describes the types of employment activities covered by some form of federal regulation. Understanding these various laws, regulations, and cases is a key element in the development and implementation of compliant workforce plans and activities.

TABLE 4.1 Federal legislation governing WFP activities

The following sections describe the civil rights legislation and executive orders that affect employment activities. Other government requirements listed are reviewed in the section or chapter where they're most relevant to daily HR practice.

Civil Rights Legislation

Although several pieces of civil rights legislation were enacted between 1866 and 1963, the Civil Rights Act of 1964 is regarded as the milestone for modern equal employment opportunity. This sweeping legislation impacted many areas of American life, and Title VII of the act was dedicated to providing equal employment opportunities for all Americans. Title VII has been amended several times to expand coverage to areas not covered in the original act of 1964.

Title VII of the Civil Rights Act of 1964

Title VII of the Civil Rights Act of 1964 introduced the concepts of protected classes and unlawful employment practices to American business. Unlawful employment practices are those that have an adverse impact on members of a protected class, which is a group of people who share common characteristics and are protected from discriminatory practices. Title VII established the basis for two types of unlawful practices, disparate treatment and disparate impact. Disparate treatment happens when employers treat some candidates or employees differently, such as requiring women to take a driving test when they apply for a job but not requiring men to take the test when they apply for the same job. Practices that have a disparate impact on members of protected classes seem fair on their face but result in adverse impact on members of protected classes, such as requiring all candidates for firefighter positions to be a certain height. Although the requirement applies to all candidates equally, Asian and female candidates who might otherwise qualify for the position are eliminated because they're generally shorter than male candidates of other races.

The act identified five protected classes: race, color, religion, national origin, and sex. It also defined the following unlawful employment practices:

• Discriminatory recruiting, selection, or hiring actions
• Discriminatory compensation or benefit practices
• Discriminatory access to training or apprenticeship programs
• Discriminatory practices in any other terms or conditions of employment

Legitimate seniority, merit, and piece-rate payment systems are allowable under Title VII as long as they don't intentionally discriminate against protected classes.

Title VII allowed for limited exceptions to its requirements, some of which are listed here:

• Bona fide occupational qualifications (BFOQs) occur when religion, sex, or national origin is “reasonably necessary to the normal operation” of the business.
• Educational institutions weren't originally subject to Title VII.
• Religious organizations may give preference to members of that religion.
• A potential employee who is unable to obtain, or loses, a national security clearance required for the position isn't protected.
• Indian reservations may give preference to Native Americans applicants and employees living on or near the reservation.

Title VII created the Equal Employment Opportunity Commission (EEOC) with a mandate to promote equal employment opportunity, educate employers, provide technical assistance, and study and report on its activities to Congress and the American people. The EEOC is the enforcement agency for Title VII and other discrimination legislation.

Amendments to Title VII

Title VII was amended in 1972, 1978, and 1991 to clarify and expand its coverage.

Equal Employment Opportunity Act of 1972

Created in 1972, the Equal Employment Opportunity Act (EEOA) provides litigation authority to the EEOC in the event that an acceptable conciliation agreement can't be reached. In those cases, the EEOC is empowered to sue nongovernmental entities, including employers, unions, and employment agencies.

The EEOA extended coverage of Title VII to entities that had been excluded in 1964:

• Educational institutions
• State and local governments
• The federal government

In addition, the EEOA reduced the number of employees needed to subject an employer to coverage by Title VII from 25 to 15 and required employers to keep records of the discovery of any unlawful employment practices and provide those records to the EEOC on request.

The EEOA also provided administrative guidance for the processing of complaints by providing that employers be notified within 10 days of receipt of a charge by the EEOC and that findings be issued within 120 days of the charge being filed. The EEOC was empowered to sue employers, unions, and employment agencies in the event that an acceptable conciliation agreement couldn't be reached within 30 days of notice to the employer. The EEOA also provided protection from retaliatory employment actions for whistleblowers.

Pregnancy Discrimination Act of 1978

Congress amended Title VII with the Pregnancy Discrimination Act (PDA) of 1978 to clarify that discrimination against women on the basis of pregnancy, childbirth, or any related medical condition is an unlawful employment practice. The act specified that pregnant employees should receive the same treatment and benefits as employees with any other short-term disability.

Civil Rights Act of 1991

The Civil Rights Act (CRA) of 1991 contained amendments that affected Title VII, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA) in response to issues raised by the courts in several cases that were brought by employees based on Title VII. The CRA is discussed later in this chapter, as are the cases that led to this legislation.

Age Discrimination in Employment Act of 1967

According to the preamble, the purpose of the ADEA is to “promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; to help employers and workers find ways of meeting problems arising from the impact of age on employment.”

The ADEA prohibits discrimination against persons 40 years of age or older in employment activities including hiring, job assignments, training, promotion, compensation, benefits, terminating, or any other privileges, terms, or conditions of employment. The act applies to private businesses, unions, employment agencies, and state and local governments with more than 20 employees. As with Title VII, the ADEA provides for exceptions to the act:

• BFOQs that are reasonably necessary to business operations
• The hiring of firefighters or police officers by state or local governments
• Retirement of employees age 65 or older who have been in executive positions for at least 2 years and are eligible for retirement benefits of at least $44,000 per year
• Retirement of tenured employees of institutions of higher education at age 70
• Discharge or discipline for just cause

The act also provides that any waiver of rights must be written in an understandable manner and refer specifically to the waiver requirements contained in the ADEA. Any waiver of rights is valid only if valuable consideration, usually some form of payment, is exchanged and must include the following elements:

• Advice to consult with an attorney before signing the agreement
• A period of not less than 21 days to review and consider the agreement
• A period of no less than 7 days during which the agreement may be revoked

Additional requirements are needed for waivers made in connection with exit incentives or other termination programs, such as a reduction in force or layoff that involves more than one employee. In addition to the preceding requirements, the waiver must provide protected individuals with no less than 45 days to consider the agreement and

• A list of the eligibility factors for the group or individuals affected by the employment action
• A list of the job titles and ages of all individuals participating in the program as well as those who weren't selected for the program

Individuals who think they have been subjected to an unlawful employment practice must file charges with the EEOC, which has federal enforcement responsibility for the ADEA, or with the state equal employment agency (if one exists for the location where the incident occurred). Timely filing of charges is essential for complainants, because the EEOC won't investigate charges that aren't made according to the guidelines described in this chapter.

Americans with Disabilities Act of 1990

The Americans with Disabilities Act (ADA) of 1990 was based in large part on the Rehabilitation Act of 1973 (discussed in the section “Federal Contractors, Subcontractors, and Agencies” later in this chapter), and it extended protected-class status to qualified persons with disabilities. Employment discrimination is covered by Title I of the act and identifies covered entities as employment agencies, labor unions, joint labor-management committees, and employers with 15 or more employees (including those who work on a part-time or temporary basis) for each working day in each of 20 weeks in the current or previous calendar year. Excluded from coverage are the federal government and 501(c) private-membership clubs. The ADA prohibits discrimination in job application procedures; the hiring, advancement, or discharge of employees; employee compensation; job training; and other terms, conditions, and privileges of employment.

The ADA requires covered entities to make reasonable accommodation to develop employment opportunities for qualified persons with disabilities in two areas:

• Facilities should be accessible to persons with disabilities.
• Position requirements may be adjusted to accommodate qualified persons with disabilities.

The ADA allows that accommodations constituting an undue hardship to the business aren't required and defines undue hardships as an accommodation that places an excessive burden on the employer. The act identifies the factors to be considered in determining whether an accommodation is an undue hardship by looking at the cost, the financial resources of the organization, the size of the organization, and other similar factors.

In 2008, Congress enacted the ADA Amendments Act of 2008, which took effect on January 1, 2009. According to language in the amendment, Congress took the action to clarify the intention of the original legislation, which was to make the definition of “disability” consistent with the way the courts had defined the term under the Rehabilitation Act of 1973. In fact, court interpretations under the ADA had “narrowed the broad scope of protection” originally intended. The amendment more clearly describes the intent of Congress in the following areas:

Broadly Defines “Disability” A disability is a physical or mental impairment that causes substantial limitation to one or more major life activities for an individual, a record of impairment for an individual, or an individual who is regarded as being impaired.

Defines “Major Life Activity” The amendment defines major life activities in two areas: general activities and major bodily functions. Table 4.2 lists activities Congress cites in the law as examples but isn't meant to be a complete list.

Ignores Mitigating Measures Congress directs that, except for “ordinary glasses or contact lenses,” mitigating measures such as medication, prosthetics, hearing aids, mobility devices, and others may not be used to limit the definition of disability for an individual.

Clarifies the Definition of “Regarded As” This amendment requires that individuals who are able to demonstrate that they have been the subject of prohibited activities under the ADA, whether or not they actually have some type of impairment, are protected by its requirements.

Explicitly Authorizes the EEOC to Regulate Compliance The amendment mandates the EEOC to develop and implement regulations and guidance for employers to follow, specifying the inclusion of a definition for “substantially limits” that is consistent with the intent of Congress in the legislation.

Prohibits “Reverse Discrimination” Claims The amendment clearly states that individuals without disability may not use the ADA to file claims of discrimination when disabled individuals receive favorable employment actions.

A key element of ADA compliance is the requirement to engage in an interactive process with disabled individuals requesting a reasonable accommodation that will enable them to perform essential job functions. This process is described in Chapter 8, “Risk Management.”

TABLE 4.2 Major life activities

General Activities	Major Bodily Functions
Caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, breathing, learning, reading, concentrating, thinking, communicating, working	Functions of the immune system, normal cell growth, and functions of the digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive systems

Civil Rights Act of 1991

The purpose of the Civil Rights Act (CRA) of 1991, as described in the act itself, is fourfold:

• To provide appropriate remedies for intentional discrimination and unlawful harassment in the workplace
• To codify the concepts of “business necessity” and “job related” articulated by the Supreme Court in Griggs v. Duke Power Co. and in other Supreme Court decisions prior to Wards Cove Packing Co. v. Atonio
• To confirm statutory authority and provide statutory guidelines for the adjudication of disparate impact suits under Title VII of the Civil Rights Act of 1964
• To respond to recent decisions of the Supreme Court by expanding the scope of relevant civil rights statutes in order to provide adequate protection to victims of discrimination

Amendments contained in the CRA affected Title VII, the ADEA, and the ADA. One of the issues addressed is that of disparate impact, first introduced by the Griggs v. Duke Power case in 1971. Disparate impact occurs when an employment practice, which appears on its face to be fair, unintentionally discriminates against members of a protected class. The CRA places the burden of proof for discrimination complaints on the complainant when there is a job-related business necessity for employment actions. When an individual alleges multiple discriminatory acts, each practice in itself must be discriminatory unless the employer's decision-making process can't be separated, in which case the individual may challenge the decision-making process itself. The CRA also provides additional relief for victims of intentional discrimination and harassment, codifies the concept of disparate impact, and addresses Supreme Court rulings over the previous few years that had weakened equal employment opportunity laws.

The CRA made the following changes to Title VII:

• Provided punitive damages when employers engage in discriminatory practices “with malice or with reckless indifference”
• Excluded back-pay awards from compensatory damages
• Established a sliding scale for compensatory and punitive damages based on company size, as shown in Table 4.3
• Provided that any party to a civil suit in which punitive or compensatory damages are sought may demand a jury trial
• Expanded Title VII to include congressional employees and some senior political appointees
• Required that the individual alleging an unlawful employment practice is in use prove that it results in disparate impact to members of a protected class
• Provided that job-relatedness and reasonable business necessity are defenses to disparate impact and that if a business can show that the practice doesn't result in disparate impact, it need not show the practice to be a business necessity
• Provided that business necessity isn't a defense against an intentional discriminatory employment practice
• Established that if discrimination was a motivating factor in an employment practice it was unlawful, even if other factors contributed to the practice
• Allowed that if the same employment decision would have been made whether or not an impermissible motivating factor was present, there would be no damages awarded
• Expanded coverage to include foreign operations of American businesses unless compliance would constitute violation of the laws of the host country

TABLE 4.3 CRA limits for total punitive and compensatory damages

Number of employees*	Maximum damage award
15–100	$50,000
101–200	$100,000
201–500	$200,000
501 +	$300,000
*Number of employees in each of 20 or more weeks in the current or preceding calendar year.

Genetic Information Nondiscrimination Act of 2008

When research into the use of human genomic information made it possible to identify genetic predisposition to particular diseases, many people became uncomfortable with the idea of information so personal being made available to insurance companies or employers that could use it for discriminatory purposes. For more than 10 years, Congress worked on legislation that would prevent that from happening. President George W. Bush signed the resulting legislation, the Genetic Information Nondiscrimination Act (GINA), into law in May 2008.

GINA prohibits employers from unlawfully discriminating against employees or their family members in any of the terms or conditions of employment included in Title VII. The act defines genetic information as the results of genetic tests for employees and their family members or as information about genetic diseases or disorders revealed through genetic testing.

The act makes it unlawful for employers to request, require, or purchase genetic information but doesn't penalize them for inadvertently obtaining the information. GINA allows employers to obtain the information for wellness or health programs they offer when the employee authorizes access to the information in writing. In those cases, the information obtained through genetic testing may be provided only to health-care professionals or board-certified genetic counselors providing services to employees. This information may be provided to employers only in aggregate form that doesn't identify specific employees.

Employers may request the information as required by the Family and Medical Leave Act (FMLA) or similar state laws but may use it only as required by those laws. Employers can also use genetic information if federal or state laws require genetic monitoring of biological effects from toxic substances in the workplace, but only if the employee receives written notice and provides informed, written consent to the monitoring and the monitoring complies with federal and state laws. Any test results may be provided to employers only in aggregate form without identifying individual information.

The DOL issued a request for comments on the implementation of GINA prior to beginning the rule-making process. The submission period ended in December 2008, and the DOL began evaluating regulatory needs with the Department of Health and Human Services and the Treasury Department because aspects of the law impact agencies in those departments as well.

Federal Contractors, Subcontractors, and Agencies

The employment legislation described in previous sections doesn't always apply to agencies of the federal government, but discrimination in these entities is prohibited by executive orders and other legislation.

Rehabilitation Act of 1973, Sections 501, 503, and 505

The Rehabilitation Act of 1973 was enacted to expand the opportunities available for persons with physical or mental disabilities. The employment clauses of the act apply to agencies of the federal government and federal contractors with contracts of $10,000 or more during a 12-month period. Section 501 addresses employment discrimination, while section 505 details the remedies available for those who have been subjected to unlawful employment practices. The EEOC has enforcement responsibility for section 501. Under section 503, individuals with disabilities who think a federal contractor has violated the requirements of the Rehabilitation Act may also file complaints with the DOL through the Office of Federal Contract Compliance Programs (OFCCP).

Vietnam Era Veterans' Readjustment Assistance Act of 1974

EEO and affirmative action protection for veterans who served during the Vietnam War are provided by the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), which applies to federal contractors or subcontractors with contracts of $25,000 or more. The act requires federal contractors to list all job openings with state employment agencies unless they are for senior-level management positions, positions that will be filled from within, or positions lasting 3 days or less. State employment agencies are required to give priority to Vietnam-era veterans when providing referrals to these openings.

A Vietnam-era veteran is one who meets specific criteria related to having served on active duty between August 5, 1964, and May 7, 1975. The act provides additional protections for special disabled veterans who have disabilities rated at 10, 20, or 30 or more percent who are entitled to compensation from the Department of Veterans Affairs.

Executive Orders

Executive orders (EOs) are presidential proclamations that, when published in the Federal Register, become law after 30 days. EOs have been used to ensure equal employment opportunities are afforded by federal agencies and private businesses that contract or subcontract with those agencies. Executive orders relating to equal employment issues are enforced by the OFCCP:

Executive Order 11246 This EO, established in 1965, prohibits employment discrimination on the basis of race, creed, color, or national origin and requires affirmative steps be taken in advertising jobs, recruiting, employing, training, promotion, compensation, and terminating employees.

Executive Order 11375 Created in 1967, EO 11375 amended EO 11246 and expanded coverage for protected classes to include discrimination on the basis of sex.

Executive Order 11478 This order, written in 1969, again expanded the scope of EO 11246 by adding handicapped individuals and persons 40 years of age or older to the list of protected classes.

Executive Order 12138 In 1979, with the implementation of EO 12138, the National Women's Business Enterprise policy was created. This EO also required federal contractors and subcontractors to take affirmative steps to promote and support women's business enterprises.

Executive Order 13087 This EO from 1998 expanded coverage to include sexual orientation.

Executive Order 13152 This EO added “status as a parent” to the list of protected classes first identified in EO 11246. Written in 2000, it protects those who must care for an “individual who is under the age of 18 or who is 18 or older but is incapable of self-care because of a physical or mental disability” from employment discrimination. The order broadly defines a parent as a biological, adoptive, foster, or stepparent; a legal custodian; one who is acting as a parent; or one actively seeking legal custody or adoption of a child.

Executive Order 13279 This EO limited the impact of EO 11246 on faith-based and community organizations providing social services as federal contractors or subcontractors.

Two levels of compliance are required by EOs. The first level, which prohibits employment discrimination and requires contractors to take affirmative action in employment actions, applies to contracts totaling $10,000 or more in a 12-month period.

The second level of compliance, for contractors with 50 or more employees who have contracts of $50,000 or more, requires that a written Affirmative Action Plan (AAP) be developed within 120 days from the origination of the contract with the OFCCP, the agency charged with enforcing EOs.

Annual EEO Survey

Working together, the EEOC and the OFCCP developed a reporting format designed to meet statistical reporting requirements for both agencies. This form, known as the EEO-1, must be filed on or before September 30 of each year using employment data from any pay period during July, August, or September of that year. All employers who meet the following criteria must complete the report:

• Private employers subject to Title VII with 100 or more employees, except the following:
  • State and local governments
  • Primary and secondary school systems
  • Institutions of higher education
  • Indian tribes
  • Tax-exempt private membership clubs (other than labor organizations)
• All federal contractors or subcontractors with more than 50 employees, which
  • Have contracts, subcontracts, or purchase orders of $50,000 or more or
  • Are depositories of government funds in any amount or
  • Are financial institutions issuing and paying U.S. savings bonds and notes

Report Types

EEO-1 reports may be submitted electronically or on paper. Employers with operations at a single location or establishment complete a single form, but for those who operate multiple locations, employment data is reported on multiple forms:

Headquarters Report Employment data for the principal office of the organization is reported on the Headquarters Report.

Locations with 50 or More Employees A separate Establishment Report is required for each of these locations.

Locations with Fewer Than 50 Employees Locations with fewer than 50 employees may be reported on an Establishment Report or on an Establishment List. The Establishment List provides the name, address, and total number of employees for each location with fewer than 50 employees along with an employment data grid combining this data by race, sex, and job category.

Consolidated Report Data from all the individual location reports is combined on the Consolidated Report. The total number of employees on this report must be equal to data submitted on the individual reports.

Parent corporations that own majority interest in another corporation report data for employees at all locations, including those of the subsidiary establishments.

Race and Ethnicity Categories

Revisions to the race and ethnicity reporting categories were effective with the reports due on or after September 30, 2007. Prior reports required employees to be reported in one of five categories; the revision expanded this to seven:

• Hispanic or Latino
• White (not Hispanic or Latino)
• Black or African-American (not Hispanic or Latino)
• Native Hawaiian or Other Pacific Islander (not Hispanic or Latino)
• Asian (not Hispanic or Latino)
• American Indian or Alaska Native (not Hispanic or Latino)
• Two or More Races (not Hispanic or Latino)

The OFCCP prefers that whenever possible, employees should be encouraged to self-identify their race and ethnicity. This normally occurs during the application/interview process, and the information is kept confidential from hiring managers and other interviewers. If a company hasn't included this in its application process but has grown to 100 or more employees and needs to complete its first EEO-1, it may ask its current employees to voluntarily self-identify and add such forms to the application process going forward. If applicants or employees choose to not self-identify, the employer is allowed to make a good-faith selection.

Job Categories

The EEO-1 report requires employers to group jobs into job categories based on the average skill level, knowledge, and responsibility of positions within their organizations. These categories were also revised for reporting periods beginning in 2007:

• Executive/Senior Level Officials and Managers
• First/Mid-Level Officials and Managers
• Professionals
• Technicians
• Sales Workers
• Administrative Support Workers
• Craft Workers
• Operatives
• Laborers and Helpers
• Service Workers

Data Reporting

To assist employers in categorizing their employees for the report, the EEOC describes each of the revised race/ethnicity and job categories at http://www.eeoc.gov/employers/eeo1/qanda-implementation.cfm. For each job category, employers report the total number of male and female employees according to their ethnicity and race. Figure 4.1 shows a sample of the revised EEO-1 form.

FIGURE 4.1 EEO-1 report from 2007

As previously mentioned, information collected on the EEO-1 report is the result of collaboration between the EEOC and OFCCP. The EEOC uses the race/ethnicity and job categories for statistical analysis; they also form the basis for the information in AAPs submitted to the OFCCP.

Affirmative Action Plans

The components of an AAP are determined by the OFCCP and, in a revision effective December 13, 2000, include the items described in Table 4.4.

TABLE 4.4 Components of an AAP

AAP Component	Description
Organizational profile	Employers choose the format that works best: organizational display (traditional organization chart) or workforce analysis (listing of job titles from lowest to highest paid)
Job group analysis	Places job titles with similar duties and responsibilities into groups for analysis
Placement of incumbents in job groups	Lists percentages of minorities and women in each job group
Determination of availability	Reports demographic data on the labor pool for each job group
Comparison of incumbency to availability	Compares protected classes employed in each job group with availability of protected classes in the labor pool
Placement goals	Sets reasonable goals to address underrepresentation of protected classes in the workforce
Designation of the person responsible for implementation within the business	Assigns responsibility for achieving placement goals in the AAP to a person with access to the executive team in the business
Identification of problem areas	Requires analysis of employment processes to determine where barriers to equal opportunity exist
Action-oriented programs	Requires modification of current employment practices to remove barriers to opportunity
Periodic internal audits	Requires periodic review of employment activity with management and reports to executives on actions taken to improve results

It may be helpful to refer to the sample while reading the following explanations of the various components:

Organizational Profile The organizational profile looks at how employees are placed in specific job titles and may be presented as a traditional organization chart or as a workforce analysis. The workforce analysis lists job titles from the lowest to the highest paid within each department or work unit. For each title, the wage rate or salary grade is identified, along with the EEO-1 category, job group, and total number of employees holding that title. The analysis also breaks down the total number of employees into the number of males and females of the seven EEO-1 racial/ethnic descriptions (Hispanic, White, Black or African-American, native Hawaiian or other Pacific Islander, Asian, American Indian or Alaska native, and two or more races).

Job Group Analysis The job group analysis organizes jobs into groups established for the EEO-1 report. For this report, employers list all of their job titles that fall into each job group, as well as the number of employees in the job group, and identify the associated EEO-1 category.

Placement of Incumbents in Job Groups This report lists each job group with the total number of incumbents in each group. The total is broken down into the number and percentage of females and the number and percentage of minorities in each group.

Determination of Availability For each job group, the AAP shows how many minorities or women with the required skills are available externally (within a “reasonable recruiting area”) and the percentage of minorities or women available internally for promotion, transfer, or training into the job group. This report identifies the source used to gather the information (most often the most recent Census data for external hires and the internal source for promotable employees), the weight placed on the source, the reason for the weighting, and the statistics adjusted based on the weight assigned.

Comparison of Incumbency to Availability This information is most easily presented as a chart showing each job group with the percentage of female and minority incumbents compared to the availability.

Placement Goals Placement goals are required if the comparison of incumbency to availability indicates that women and/or minorities are underrepresented in a job group. Underrepresentation is determined by the 80 percent rule, described in the section “Uniform Guidelines on Employee Selection Procedures” later in this chapter.

Designation of Responsibility for Implementation This section of the AAP provides the titles of employees with affirmative action responsibility and details the scope of responsibility for each title.

Action-Oriented Programs Problem areas are identified and corrective actions planned by the employer are described as part of the Action Oriented Program section of the AAP. The action plans include specific steps to be taken along with timelines to correct the identified problem areas.

Periodic Internal Audits The last section of the AAP describes how the responsibilities detailed in the Designation of Responsibility for Implementation section will be monitored within the organization.

Strategic Workforce Planning

The goal of strategic workforce planning is to ensure that qualified employees are available when the organization needs them. An effective workforce planning process is based on the following:

• Workforce goals and objectives that forecast the organization's future workforce needs
• Job analysis and description that identifies the knowledge, skills, and abilities needed to meet the future needs
• Identification of qualified employees beginning with the organization's current workforce demographics
• Translating the goals and objectives into tactical staffing plans to build the future workforce

The workforce plan resulting from this process provides the framework for targeting and prioritizing future staffing requirements, remaining flexible enough to allow HR to respond rapidly to changing business needs.

Workforce Goals and Objectives

During the strategic planning process discussed in Chapter 3, “Business Management and Strategy,” organization leaders make decisions about how to achieve business goals and objectives that provide a competitive advantage, improve the level of business performance, and add value to stockholders. Chapter 3 discussed organizational design decisions that occur as part of the strategic planning process. Depending on the goals established by the plan, these decisions affect workforce planning in different ways:

Reengineering The goal of reengineering is to realign operations in a way that adds value to customers. For workforce planning, this may mean eliminating jobs in some areas and adding jobs in others.

Corporate Restructuring Corporate restructuring looks at individual units in the organization to reduce or eliminate redundancy or bureaucratic processes in order to reduce costs and increase production. For workforce planning, this means reducing the workforce or reassigning employees to new jobs.

Mergers and Acquisitions In some cases, business leaders make a decision to acquire products and market share by purchasing other companies instead of building them internally. One result of a merger or an acquisition is reducing labor costs as economies of scale allow jobs to be combined or eliminated.

Divestitures When the strategic plan includes a decision to divest an operating unit, this can mean eliminating jobs or transferring employees to a new operating entity. The effect on workforce planning can be twofold: reducing the workforce in the divesting organization and, if appropriate, performing due diligence to determine whether to transfer employees to the new entity.

Offshoring/Outsourcing In most cases, offshoring or outsourcing decisions result in a workforce reduction or transfer of employees to other jobs. When employees are acquired by an outsource provider, they're terminated from the organization and hired by the new company.

Workforce Expansion An organization may decide to expand its workforce in order to accomplish business objectives. For example, if the strategic plan calls for increasing sales by 15 percent, leaders may determine that achieving that goal requires increasing the sales force.

Workforce Reduction Whether necessitated by a restructuring, a merger, an acquisition, or in response to loss of market share, reducing labor costs is a painful result of some business decisions. There are many examples of workforce reductions in the business environment, including the job losses that occurred during the dot-com bust of 2000–2001 and the financial market meltdown beginning in 2008.

One thing is certain: human resource professionals must be ready to respond rapidly to changes in business workforce requirements with a road map that produces employees who possess the talent needed by the business to achieve its goals. This road map is built on the jobs that need to be performed and the individuals who will perform those jobs.

Job Analysis and Description

As described in detail in Chapter 2, job analysis provides the foundation for identifying the knowledge, skills, and abilities (KSAs) needed to achieve specific results in an organization. Historically, HR professionals compile this information into job descriptions, which are then used to identify individuals who possess the needed KSAs for different positions. The strategic selection process begins by identifying the qualifications necessary to do each job in the organization. A successful recruitment and selection process is dependent on this process from which the hiring criteria is established, pre-employment tests are written, and proper hiring decisions can be made. The HR department's ability to influence the decision-making process based on person-to-job fit is critical and, when combined with the knowledge of the employee(s) currently doing the work and their supervisor, a powerful and relevant resource.

Retention and promotion opportunities are also identified through the job analysis process. Creating depth in each position allows for the advancement of employees who are potentially overqualified to do their current jobs or who desire career advancement in their chosen field. Retention is improved when employees are properly compensated for the type of work they're doing. For example, a pay imbalance can occur when evolved job duties aren't properly accounted for. Conducting a skills inventory of the internal workforce and matching it to the current requirements of the job(s) will allow for the proper application of the existing talent and/or the development of current employees through education, on-the-job training (OJT) experience, or training.

In the staffing process, more information is always better. Hiring managers and potential candidates make decisions that are more effective when all the particulars about a job are known. In addition to the information in Chapter 2, the following criteria have particular relevance for the staffing process:

Job Competencies Job competencies guide interviewers in formulating questions that elicit information beyond specific tasks and responsibilities assigned to a specific job. This information helps determine how well a candidate will fit into a particular work group and contribute to organization goals. Core competencies may be developed for traits the organization values and would like to see in all its employees, such as teamwork, communication, or customer focus. Job-specific competencies are related to a specific role in the organization. For example, a job with management responsibilities may include competencies for developing subordinates, leadership, and strategic thinking.

Essential Job Functions Well-defined essential job functions are important in the recruiting process to ensure that the organization complies with equal employment opportunities for all candidates, particularly those with disabilities.

Job Specifications Job specifications are another tool for interviewers, helping to further define expectations for performance. Candidates also use them to evaluate their interest in the position and assess how well they will be able to perform if hired.

The ability to update the job competencies, essential functions, and job specifications should be a post-analysis function that is properly planned for and maintained. For example, some companies update the competencies, functions, and specifications each time the position becomes open or on an annual basis sorted by department. These types of processes account for changes or updates to job duties and outputs without having to complete an organization-wide job analysis all at once, which can be time-consuming and disruptive to day-to-day operations.

Qualified Employees

Organizations have three options for locating the talent they need to achieve business goals: internal transfers or promotions, external hires, and alternative staffing methods. HR professionals evaluate the options by deciding which option is best in a given situation. Are there sufficient skills within the organization that can be redirected to the new requirements through transfers or promotions? Is it best to bring in full-time employees? Will some other staffing alternative provide the best solution? Let's take a brief look at these alternatives and discuss the strategic implications of each source.

Internal Talent

The first place to look for qualified employees to fill future needs is among those who already work for the organization. There are a number of advantages to filling jobs internally or “promoting from within.” Management has an opportunity to evaluate candidates and determine their suitability for advancement over an extended period of time as they perform current duties, and the possibility of future promotion can encourage employees to maintain a high level of performance. Investing in employees through learning and development and then providing advancement opportunities for them communicates to employees that the organization values and rewards their contributions. When promotion from within is an organization policy, most external hiring is done at the entry level; this allows employees to become acclimated to the organization culture and operating procedures early in their careers, leading to greater success when they move into positions with greater responsibility.

Of course, some disadvantages are associated with relying solely on promotion from within to fill positions of increasing responsibility:

• There is the danger that employees with little experience outside the organization will have a myopic view of the industry.
• Although the morale of those promoted will be high, employees who have been passed over or lost out on promotions may have lower morale and be less motivated in performing their jobs.
• When several people are being groomed for promotion, the competition can lead to a breakdown in teamwork and jockeying for political position.
• If the organization lacks diversity in its workforce, overreliance on promoting from within can perpetuate the imbalance.
• Reduced recruiting costs will be offset by an increase in training costs to prepare employees for positions with increased technical responsibilities or for supervisory or management positions.

External Talent

At some point, organizations need to look outside for new employees. Even if the organization has a policy or practice of promotion from within, entry-level positions must be filled as employees are promoted or transferred. There are, of course, advantages to bringing new people into the organization:

• Experienced professionals bring new ideas with them and can revitalize operations.
• It's usually easier and more cost-effective to hire individuals with highly specialized skills than it is to develop them within the organization.
• If there is an urgent need for someone with particular skills, it's usually faster to hire those skills than to provide on-the-job training.
• Looking outside the organization to fill positions provides opportunities to increase the diversity of the workforce.

Looking outside the organization also has several disadvantages:

• Current employees who have been passed over for promotion will very likely have lower morale.
• It's always difficult to know how someone from outside the organization will fit into an existing team.
• The new hire is an unknown. Until the person begins doing the job, it's very difficult to know what their performance level will be.

Alternative Staffing Methods

To expand the pool of available candidates with the desired skills, it's often wise to consider alternative staffing methods. A wide range of alternatives provides varying levels of flexibility to the organization. Particularly when staffing needs require specialized skills or when the labor market is tight, these methods can provide access to highly qualified candidates who might otherwise be unavailable to the organization:

Telecommuting Due to advances in technology, telecommuting, which allows employees to work at home and connect to the office electronically, has become a viable solution for individuals who don't want to commute or who have other reasons to work at home. Aside from the benefits telecommuting employees enjoy, reducing the number of employees required to be at the office each day can allow employers to reduce overhead costs as well as contribute to reductions in energy consumption and traffic congestion.

Job Sharing Job sharing is an alternative that allows two people with complementary skills to share the duties and responsibilities of a full-time position.

Part-Time Employees Part-time employees are those who work less than a regular workweek. This staffing strategy can be a cost-effective solution for organizations needing particular skills on an ongoing but not full-time basis.

Internships Internship programs are usually designed to give students opportunities to gain experience in their chosen fields prior to graduation. Successful programs provide meaningful work and learning experiences for the students, including opportunities to meet with senior executives. The student gains a valuable learning experience, and the organization benefits by developing low-cost access to employees and the chance to observe the intern's performance prior to making an offer for full-time employment.

Temporary Workers The temporary worker category covers a wide range of flexible staffing options:

Contract Workers Contract workers provide another solution for acquiring talent. There are two types of contract workers:

Professional Employer Organization A professional employer organization (PEO) operates as the organization's HR department. The PEO becomes the employer of record and then leases the employees back to the organization. PEOs provide full-service HR, payroll, and benefit services and can provide a cost-effective solution that enables smaller companies to offer benefits comparable to those offered by much larger organizations.

Outsourcing Outsourcing moves an entire function out of the organization to be handled by a company specializing in the function. For example, human resource outsourcers (HROs) may be used for one or more HR functions, such as benefits administration or recruiting. This solution can be beneficial by allowing the organization to focus on its basic business operations and potentially reduce costs.

Translating Organization Goals into Staffing Plans

Translating strategic workforce goals and objectives into a tactical action plan is accomplished with the use of a staffing needs analysis. This tool is used to determine the numbers and types of jobs forecasted in the organization's strategic plan. Figure 4.2 depicts a typical staffing needs assessment.

FIGURE 4.2 Staffing needs analysis

The strategic plan identifies two key pieces of information for HR: the work that needs to be done and how many people are needed to do it. That information forms the objective for the staffing needs analysis and identifies the information to be collected:

Collect Data Workforce planning provides an opportunity for HR professionals to build key relationships within their organizations, demonstrating the value they can add to the business. Business-unit managers are the ones, of course, who establish the goals and objectives for their individual work groups. During this planning phase, HR can assist these managers to identify the KSAs that will be needed to execute those objectives as well as the number and timing of people required.

At this time, HR also collects information about current employees who may be ready to assume new tasks and responsibilities and any training needed to prepare them for new roles. Organizations fortunate enough to have a robust human resource information system (HRIS) can use that tool to further analyze the current workforce.

Identify Gaps Building on the data collected from individual business-unit managers, HR develops a comprehensive list of the KSAs required to meet future needs for the organization. Factored into this list should be contingencies for retirements or unexpected resignations of current employees based on prior history of turnover, transfers, and promotions. Comparing the required KSAs with the current capabilities of the workforce identifies the gaps that will need to be filled and provides the data needed to analyze the best way to fill those needs, whether internally, externally, or by using alternative staffing methods.

Analyze Options Once the list of numbers, types, and timing of future openings is available, HR identifies options for filling the positions, whether from internal transfers or promotions, external hires, or the use of alternative staffing methods.

Select/Implement Solutions Conducting a cost/benefit analysis of the options identified in the previous step provides a means for comparison between the available options.

Evaluate Results After the solution has been implemented, an evaluation of its success is conducted to ensure that it meets the needs of the organization.

Labor Market Analysis

Conditions in the labor market affect the ability of an organization to hire the qualified individuals it needs. A labor market analysis looks at various economic indicators and other factors that impact the availability of those individuals:

Economic Indicators A variety of economic measures are used in labor market analysis. The Bureau of Labor Statistics (BLS) collects data from employers throughout the United States and makes this information available on its website. Some of the measures useful in analyzing the labor market include the unemployment rate, occupational outlook, demographics, and wages by area and occupation. In 2001, BLS introduced the Job Openings and Labor Turnover Survey (JOLTS), which analyzes open positions, hiring statistics, and terminations.

Industry Activity Another important factor to consider in a labor market analysis is the industry situation. Are new competitors entering the market? Is an existing competitor ramping up to produce a new product? Is a competitor losing market share and laying off employees? Activity within an industry affects an organization's ability to obtain qualified individuals to fill job openings.

Labor Market Categories Depending on specific job requirements, the labor market most often falls into one of three broad categories:

A useful labor market analysis for a particular organization includes data that is relevant to the needs of the organization and the types of employees and skills it's seeking to hire.

Staffing Programs

The workforce plan and staffing needs analysis have identified the jobs to be filled, when they're needed, where they're located, and the KSAs and competencies needed for successful performance. The job descriptions and specifications for successfully recruiting qualified candidates are in place. A review of internal demographics indicates if past recruiting efforts have resulted in a diverse workforce or whether it's necessary to explore alternative ways to promote diversity in the organization. Armed with this information, the process of finding qualified candidates for open positions can begin. The question now becomes where to find the appropriate people to fill the gaps.

Sourcing and Recruiting Candidates

The sourcing and recruiting of qualified candidates to fill open positions is critical to the success of any organization. Sourcing and recruiting functions may be combined into one position or, in large organizations or during periods of intense hiring, may be split. Sourcing provides names and contact information for potential candidates in the active and passive markets. Active job seekers are seeking work and often attracted through traditional advertising methods (see the section “External Recruiting”). Passive candidates are those who aren't currently looking for work, so locating them requires additional research, such as identifying professional associations or organizations that are likely to employ individuals with similar skills. Recruiting is the process of creating interest about open positions in an organization and seeking candidates who possess the necessary qualifications to successfully fill them.

Recruiting Strategies

An effective recruiting strategy is ongoing. Even during times when few positions are open, continuing to communicate with potential candidates, educational institutions, search firms, and other sources can help shorten the time needed to fill positions when they do occur and result in better service to internal customers.

Employer Brands

Defining the employer's brand identity sets the stage for many aspects of the recruiting process. Each organization has a brand identity in the marketplace, whether or not it has been consciously developed. The reputation established with employees, current and former, along with the way the organization presents itself in the general marketplace, contribute to the brand. Because the information is out there, HR can take a leading role in defining the brand so that it's an accurate reflection of where the company wants to be and can be used in the recruiting process.

Simply developing a catchy PR campaign isn't enough to make an effective employer brand. For a brand to be useful in attracting high-quality employees to the organization, it must first match the reality of working in the organization and describe what is unique about it. When that happens, every employee becomes an ambassador, creating interest among friends, neighbors, former colleagues, or others in working for the organization.

Building an employer brand begins with identifying unique elements of the organization culture. What values are important to the company? How are employees treated? Is the company on the leading edge in its industry? Is risk-taking encouraged or frowned on? Are employees involved in the decision-making process? Is the performance-management process perceived to be fair? Do employees receive regular feedback? How does the company respond to economic downturns? These are some of the considerations that become part of the brand. An accurate brand message gives candidates an idea of what it would be like to work in the organization and positively influences retention. If the employer has differentiated its organization as an employer of choice with a clearly defined message about the benefits of working there, then attracting the quality of candidates desired by the organization becomes less difficult. It's critical, however, that the “official” brand message is an accurate reflection of the organization. To ensure that this is the case, an employee survey can be conducted to find out whether current employees perceive the organization the way the brand portrays it. If there is a discrepancy, the organization can choose whether to adjust the brand message or make operational changes that address the differences between employee perceptions and the branding message.

An effective employer brand that accurately portrays the organization culture benefits the organization in any economic climate. During times of economic growth when high-quality employees are in great demand, the brand both attracts and retains them. In an economic downturn, the brand becomes a vehicle for fostering communication and improving morale.

Total Reward Packages

An organization's total rewards philosophy affects its ability to attract qualified candidates. This strategy is a key element in the organization's recruiting strategy because it directly affects how well it will be able to attract and retain employees with the KSAs it needs. Chapter 6 discusses the philosophies in detail, but in general terms, organizations interested in acquiring the “best and brightest” candidates, or candidates with unique and highly desirable skills, employ a philosophy of leading the market, paying a premium to attract candidates. This philosophy, of course, may require the financial ability to pay at a premium. Organizations that may not be financially able to pay a premium but want to hire qualified employees compete with a philosophy of meeting the market, meaning they pay the average market rate. Some organizations decide to lag the market by paying below the market rate. This may be a financial necessity (such as an early-stage company or a nonprofit organization) or a conscious decision on the part of management if, for example, jobs require little or no skill or training and employees are easily replaced.

Recruiting Methods

During the process of creating job competencies, descriptions, and specifications, HR works with line managers to ensure that the job requirements are accurately presented. In the recruiting process, HR works with line managers to create a candidate profile so that applicants who go through the selection process fit the requirements of the position. In developing this profile, line managers often want to describe an “ideal candidate” who possibly even exceeds the requirements of the position. It's up to HR to work with line managers in developing candidate profiles that are realistic, given the working conditions and salary range offered for the position. At the same time, it's also effective to work with line managers to develop alternatives to the candidate profile, possibly substituting years of experience for education requirements or lowering experience requirements if the experience is in the same industry. This expands the pool of available candidates and increases the chances of success in the recruiting process.

With the job description and candidate profile in hand, HR is able to determine the best sources for qualified candidates. Choosing appropriate sources for candidates depends on how available the specific KSAs are in various labor markets, along with workforce diversity issues that need to be addressed in the hiring process. In general terms, the labor market used to recruit candidates depends in large part on the scarcity of the KSAs needed—the scarcer the KSAs, the larger the labor market to reach and the greater the recruiting budget.

Internal Recruiting

Once the organization has decided to fill positions internally, there are several methods for communicating information about the openings to employees. A skills inventory is an HR management tool used to collect and store a wealth of information that would otherwise be obtained only after many hours of research by HR staff. An effective skills inventory collects information on special skills or knowledge, performance appraisals, fluency in foreign languages, educational qualifications, previous experience in or outside of the company, credentials or licenses that may be required, and any continuing education employees have obtained through training classes, seminars, or educational institutions. When collecting this information is one of the functions of an automated HRIS system, obtaining a report with detailed information about the internal talent pool can be accomplished in minutes. When replacement and succession plans are in place, conversations with potential candidates can take place over a period of time, often during performance reviews and goal-setting sessions.

Once possible internal candidates for openings are identified using the skills inventory, replacement chart, or succession plan (both described shortly), two methods are used to publicize current openings throughout an organization:

Job Posting A job posting is an internal job announcement that provides basic information about the opening, including the title; a brief description of the competencies, duties, responsibilities, and specifications; the salary range; and the application procedure.

Job Bidding Job bidding provides a means by which interested employees express interest in a position before it's available. This gives the supervisor and HR department an opportunity to review the job qualifications with the employee, provide training opportunities, let the employee gain additional experience if needed to meet the position requirements, and add the employee's name to the replacement or succession plan as appropriate.

Succession Planning

A well-thought-out succession plan identifies individuals in the organization who have the talent and ability to move into management and executive positions in one to five years. Once these individuals are identified, development plans are created to ensure that they're mentored and have opportunities to obtain education, training, and experience in areas that will enhance their ability to move into senior positions when the organization needs them.

Organizations might also choose to develop, implement, and use a replacement chart. This tool is useful at all organization levels and helps HR and line managers identify staffing needs by categorizing current employees in one of four categories:

Ready for Promotion Employees in this category demonstrate the KSAs to assume additional responsibilities and are ready to move forward in the organization.

Develop for Future Promotion This group includes employees who are proficient in their current positions and, with additional training opportunities and experience, will be ready to move forward in the organization.

Satisfactory in Current Position These employees are proficient in their current positions but don't demonstrate the KSAs or interest to assume greater responsibility in the organization.

Replace Employees are placed in this category for a variety of reasons, such as transfer or promotion, impending retirement, short-term disability, or unsatisfactory performance.

External Recruiting

Once it has been decided that the appropriate method for filling positions is to hire from outside, a number of factors must be considered. Particularly when the skills needed by the organization are in short supply in the labor market, the organization must find ways to effectively publicize its openings to appropriate candidates.

A variety of recruiting methods can be considered for finding new employees. The appropriate method depends on the type of employee needed by the organization in a particular situation. This means that a number of methods may be used in a single organization at any given time:

Media Sources Until the advent of Internet job boards, the most prevalent means for recruiting was newspaper advertising; for some jobs it's still the preferred method. Advertising jobs on the radio is used much less often than newspaper ads, but it can be effective if a company is trying to fill a large number of positions in a short period of time. Television advertising is rarely used to advertise individual positions; when used, it's most often by agencies that accomplish a dual purpose with the ads—attracting candidates and soliciting clients.

Internet Job Boards and Community Sites Advertising open positions on Internet job boards has become prevalent in recent years, particularly for positions in high-technology companies. Its popularity as a recruiting source is growing because it's often more cost-effective than traditional media advertising. A downside for employers using this method is that some job seekers are indiscriminate when responding to posted jobs, which results in a large number of resumes from unqualified applicants that must be sorted through to find appropriate candidates.

Social-Media Recruitment Social media is quickly becoming a cost-effective way to recruit for many staff positions. A Society for Human Resource Management (SHRM) research spotlight reported that in 2011, more than 50 percent of the companies polled were using social media sites to recruit. In another report, the popular Internet job board CareerBuilder stated that its mobile device career site had a 400 percent growth rate in 2010, with a 350 percent increase of applicants who stored their resumes on their iPhones. This same CareerBuilder study reported that organizations that posted a short video with the job information had a 34 percent higher application rate than those who posted jobs without video.

These behaviors indicate that the current and future workforce continues to be online and mobile, marking a need for HR to respond. One example of a type of corporate response is the use of an applicant-tracking system. This outsourced activity involves hiring a social-media recruiting service that tracks how many times an employee refers a job through their personal network. The originating employee and the final referring “friend” both share a referral bonus. Other examples of social-media recruiting and selection activity include the use of the following:

• School alumni sites
• Personal networks used to mine passive and active job seekers, such as LinkedIn, Facebook, and Twitter
• Corporate social-media campaigns
• Search engine optimization (SEO) ranking, brand management, and career sections on web pages
• Mobile technology
• Job alerts and mobile-friendly web pages
• Videos
• Job postings with video
• Virtual interviewing
• Skype and GoToMeeting

To review the additional findings of the SHRM report, visit www.shrm.org/research, and search for the “SHRM Research Spotlight: Social Networking Websites and Staffing” research paper. To view the additional statistics from CareerBuilder, visit www.careerbuilder.com/JobPoster/Resources/page.aspx?pagever=ReportsAndeBooks&sc_cmp2=JP_THS_Reports.

Company Websites Most companies with a web presence have a “career” or “opportunities” page on their websites where they post current openings. When combined with recruiting software that requires applicants to enter their own information into the recruiting database, this recruiting method can greatly reduce the time spent wading through resumes from applicants who don't qualify for positions.

Colleges and Universities Colleges and universities are a good source for entry-level hires in areas such as accounting, engineering, and human resources. An effective college recruiting program capitalizes on school ties by sending alumni to the campus as recruiters. Recruiters are carefully chosen for their enthusiasm about the students as well as for the company. Key factors for recruiting success are delivering informative presentations about the organization and being honest about the job opportunities currently available in the organization. College recruiting has become a reliable source for locating minority applicants in recent years.

Job Fairs Job fairs are events designed to bring employers and job seekers together in a single location. This format gives employers a chance to meet many potential job applicants in a short period of time. Including line managers and other employees with HR reps in the booth gives job seekers an opportunity to talk directly to hiring managers and find out about the organization without going through a formal interview process.

Alumni Employees Building and maintaining professional relationships with former employees who left in good standing and on good terms can be a cost-effective, worthwhile source for re-recruiting. Particularly if they enjoyed their experience in the organization, they may be enticed to return if an appropriate opportunity presents itself, and they can be good sources for referrals.

Previous Applicants Often during the recruiting process, a recruiter may remember a candidate who wasn't the best fit for one position but left an impression as someone who would be good elsewhere in the organization. Maintaining professional contact with such individuals can pay off when an appropriate position becomes available.

Employee Referrals Current employees are a great resource for potential candidates. Recommendations from this source can result in long-term hires, because employees will remain longer with a company where they have established a social network. Moreover, a referral program that provides nominal cash awards after the new hire has remained with the company for a specific period of time (normally 90 to 180 days) encourages such referrals and keeps cost per hire under control.

Vendors and Suppliers Individuals who provide goods or services to the company are often aware of potential candidates for openings. Particularly when there has been a longterm relationship, the vendor is aware of the organization's culture and needs and may prove to be a good source for applicants.

Labor Unions In union environments, the union hiring hall can be a good source for qualified employees.

Professional Associations Relationships developed in connection with attendance at professional association functions or conferences often provide leads for qualified applicants. In addition, many associations provide job-posting opportunities on websites or sell job advertisements in their publications.

Employment Agencies Each state has an agency dedicated to providing services to job seekers, including job counseling and training opportunities. There is no charge for employers to list job openings with the agency, which then screens, tests, and refers appropriate candidates. Contingent employment agencies generally focus on jobs in a specific profession or job category, such as accounting professionals or administrative employees. Fees, paid by the employer only when a candidate is hired, are usually based on a percentage of the first year's salary and vary widely with different agencies. The fee is often negotiable. Retained employment agencies are often referred to as headhunting firms or executive search firms. When these agencies are engaged by an organization, a fee for recruiting services is paid whether or not any of the candidates are hired. A retained search firm is generally used for executive-level positions; these firms specialize in sourcing candidates from the passive labor market.

Walk-in Candidates Candidates may come into the business in person to fill out applications and apply for jobs.

Where you search for candidates depends on your analysis of the availability of the specific KSAs in the various labor markets. Where you look for candidates also affects the cost of the recruiting effort as well as how much you must pay to attract the right candidate.

Uniform Guidelines on Employee Selection Procedures

The Uniform Guidelines on Employee Selection Procedures (UGESP) were jointly developed by the EEOC, the Civil Service Commission (CSC), the OFCCP, and the DOJ to assist employers in complying with requirements of Title VII, EO 11246 (as amended), and other federal EEO legislation. Specifically exempted from the UGESP are requirements under the ADEA and the Rehabilitation Act. The UGESP states that any selection tool that has an adverse impact against a protected class is discriminatory unless the employer can show that the tool is both job-related and a valid predictor of success in the position. The UGESP directs that if employers have access to more than one selection tool, the tool that has the least adverse impact is the one to be used. Records are to be kept by sex, race, and ethnic group, using categories consistent with the EEO-1 report (Hispanic, White, Black or African-American, native Hawaiian or other Pacific Islander, Asian, American Indian or Alaska native, and two or more races) and EEO reporting purposes.

One report required by the UGESP is a determination of whether selection procedures have an adverse impact on one or more protected groups. An adverse impact occurs when the selection rate for a protected class is less than 4/5ths, or 80 percent, of the selection rate for the group with the highest selection rate. This is often referred to as the 4/5ths rule or the 80 percent rule. Table 4.5 illustrates an adverse-impact calculation.

TABLE 4.5 Calculating adverse impact

In this example, the company advertised 100 openings. Applications were received from 255 males and 395 females for the position. Adverse impact is calculated as follows:

1. For each group, divide the number of applicants hired by the total number of applicants:

   Males: 48 ÷ 255 = 19%

   Females: 52 ÷ 395 = 13%

2. Multiply the highest selection rate by 80%:

   Males: 19% × 80% = 15%

3. Compare the selection for the other group(s) to determine whether adverse impact has occurred:

   Females: 13%

   Males: 15%

In this example, female applicants were adversely impacted by the selection process.

Applicant Tracking

The UGESP require employers to keep records of individuals who apply for open positions based on their sex and race/ethnicity as previously described for the EEO-1 report. In 1974, the UGESP defined an applicant as “...a person who has indicated an interest in being considered for hiring, promotion, or other employment opportunities. This interest might be expressed by completing an application form or might be expressed orally, depending on the employer's practice.”

As the Internet grew into an increasingly important factor in the recruitment and selection of new employees, it became clear that an additional definition was needed. In October 2005, the UGESP were amended to include the definition of an Internet applicant as meeting these criteria:

• The employer has acted to fill a particular position.
• The individual has followed the employer's standard procedures for submitting applications.
• The individual has indicated an interest in the particular position.

Candidate Selection Tools

The result of the recruiting phase of the employment process should be resumes and application forms from job seekers hoping to be selected for the position. Screening these hopeful candidates to find those who best meet the needs of the position begins with establishing procedures that ensure equal employment opportunities.

Communicating with Applicants

HR departments are often criticized for ignoring job applicants. Although a large volume of applications makes it difficult to personally contact each person who expresses interest in a position, many companies use an “autorespond” email to acknowledge receipt of electronic resumes and applications and let candidates know that they will be contacted if selected for the interview process. Mail or in-person applications can be similarly acknowledged with preprinted postcards carrying the same message.

Recruiters need to stay in contact with candidates who move forward in the process until they have been removed from consideration, and then a final, respectful communication that they're no longer being considered is appropriate. These communications can be made in writing, but candidates who have made it to the final round of interviews deserve a personal call. This allows job seekers to move forward in their job searches and leaves them with a favorable impression of the HR department and the organization.

Screening Tools

The goal of the assessment process is to narrow the candidate pool into a manageable group including those candidates most qualified for a position. A variety of tools are used to assess candidate qualifications.

Resumes

Many organizations rely on candidate resumes as a first step in the assessment process. Although they generally contain relevant information, it can be difficult to compare qualifications of different candidates because of the lack of uniformity of style and content. Resumes generally present information about the applicant in the most favorable light and don't always contain all the information necessary to determine whether the applicant is qualified for the position. For those reasons, having all applicants complete an employment application is a good practice.

Employment Applications

Because application forms are considered employment tests by the EEOC, employers must be certain that the information requested on them is both job related and a valid predictor of success in the position. A key benefit to using a standard application form is the inclusion of a statement signed by the applicant stating that the information contained in the document is true and complete. This statement can be useful in the event that an employer becomes aware of misstatements or discrepancies subsequent to hiring a candidate.

There are four basic types of application forms to consider using; one will suit the needs of the specific position or organization:

Short-Form Employment Application As its name implies, the short-form application is less extensive than other application forms. The term short is relative—it describes application forms that range from one to five pages. Short-form applications are often used by employees who are applying for transfers or promotions and are useful for prescreening candidates or for positions with minimal skill requirements.

Long-Form Employment Application The long-form application provides space for additional information related to the job requirements, such as advanced degrees and longer employment histories.

Job-Specific Employment Application If the organization hires a substantial number of employees for positions with similar requirements, the application form can be designed to gather specific information related to the position or profession. This type of form would be appropriate for teaching, scientific careers, or volume hiring in similar professions.

Weighted Employment Application The weighted application form was developed to assist recruiters in evaluating candidate qualifications. The form is developed using the job description; aspects of the job that are more important for success are given higher weights than other, less critical requirements. Weighted applications tend to reduce bias in the screening process, but they're expensive to maintain because they must be redesigned whenever job requirements change.

Screening Interviews

After reviewing the application forms and choosing those applicants who meet the job specifications and candidate profile, the recruiter conducts screening interviews to decide which candidates will be forwarded to the hiring manager. The purpose of these interviews is to both discover facts about the candidate and provide information about the position. The recruiter can assess the candidate's interest in the position and begin the process of determining which candidates are the best fit for the requirements. Screening interviews may be conducted by telephone or in person, and are relatively short, lasting from 15 to 30 minutes.

Selection Tools

Once HR has screened the applicants for a position and narrowed the candidate pool to those who meet job requirements and fit the candidate profile, the next step in the process of selecting the best candidate for the position begins. This may include several elements, such as an in-person interview, a realistic job preview, an in-box test, or participation in an assessment-center process. By far the most common selection tool is an in-depth interview conducted by hiring managers and others who know what the successful candidate will need to do in the position. The best interview process begins with an interview strategy.

The purpose of an interview strategy is twofold. First, it ensures that everyone on the interview team knows the candidate profile as well as what requirements the hiring manager has for the job. Second, when several interviewers will be interviewing candidates for a position, it ensures that everyone is using the same criteria to evaluate candidates. During the strategy-development phase, HR professionals work with hiring managers to decide the appropriate type of interview for the position.

Conducting Effective Interviews

Job interviews are stressful situations for interviewers and candidates alike. The interviewer has a very short period of time to determine whether the candidate is the best choice for the position, and the candidate wants to make a good impression with the ultimate goal of obtaining a job offer. To reduce the stress and improve the chances of obtaining the information needed to make the best hiring decision, preparing for the interview is essential. HR can assist interviewers in this process by providing advice on structuring an effective interview and developing an interview strategy:

Select the Interview Team HR's role in selecting the interview team is to work with the line manager to ensure that everyone who needs to be involved in the interview process is involved. In a team environment, it may be appropriate for all members of the team to participate; in other situations, employees from other business units who have frequent contact with the person in the position may be invited to participate in the process, along with employees who are knowledgeable about the work to be done.

Hold a Pre-interview Strategy Meeting Conducting a pre-interview strategy meeting with the interview team provides an opportunity for the hiring manager to share what will be required of the successful candidate and to ensure that all interviewers are on the same page for the interviews. Topics for discussion can include the job description, specifications, and competencies. At this time, a discussion of the type of interview to be conducted and of common interview biases is also appropriate. This is a good opportunity for HR to share best interview practices with interviewers, such as not making notes on the application form or resume, and to review appropriate interview questions.

Complete Candidate Evaluation Forms During the pre-interview strategy discussion, HR can review the candidate evaluation form with the interview team. This form provides consistency in the interview process by providing interviewers with a list of topics to cover during the interview. The form is useful in rating candidates on job requirements and acts as a reminder of what to discuss during the candidate-evaluation phase of the selection process.

Conduct Interviews Interviewers should prepare to meet the candidates by reading the application forms or resumes and making notes of any items that need explanation. During the interview, the candidate should be treated with dignity and respect, beginning with starting the interview on time and giving full attention to the candidate during the course of the interview. Setting the candidate at ease in the first few minutes will set the stage for a productive and informative interview. Providing a clear explanation of the organization's mission, values, and culture; details concerning the position; and what will be expected of the successful candidate early in the interview gives prospective employees a context in which to answer questions. Listening carefully to the candidate's answers, taking notes as appropriate, and following up on points that need clarification indicate a genuine interest in what is being said and encourage an open and honest exchange. Be honest with candidates about the workplace environment, and give them time to ask their own questions. End the interview with an explanation of the next steps in the process.

Evaluate Candidates When everyone on the interview team has met with all of the candidates, a final meeting takes place. During this meeting, the interviewers review the candidate-evaluation forms and share their thoughts on each candidate.

Types of Interviews

Several types of interviews are available for selecting candidates. Not all of them are appropriate for every situation, and it's up to HR to counsel the hiring manager on what will work best in each situation:

Behavioral Interviews These interviews are based on the premise that past behavior is the best predictor of future behavior. This interview type asks candidates to describe how they have handled specific situations in previous jobs or life experiences. Candidates are expected to be able to describe a situation or problem, the actions they took to resolve it, and what outcome resulted. Interviewers skilled in this type of questioning are able to drill down into the answers to determine the candidate's depth of experience.

Directive Interviews As the name implies, a directive interview is very much controlled and guided by the interviewer, with a predetermined set of questions asked of all candidates.

Nondirective Interviews In this interview style, the interviewer asks broad questions and allows the candidate to guide the conversation. This style may produce a great deal of information relating to the candidate's qualifications; but it's difficult to ensure consistency in questions for all candidates, and that can become a problem during the candidate-evaluation phase, as well as in substantiating or defending the final hiring decision.

Patterned Interviews A patterned interview is structured to cover specific areas related to the job requirements. The interviewer covers each area with all candidates but may ask different questions of them.

Panel Interviews In a panel interview, several interviewers interview the candidate at the same time.

Structured Interviews A structured interview is similar to a directed interview: a list of questions is prepared in advance and used for all candidates.

Stress Interviews In some positions, such as airline pilots, law enforcement officers, and astronauts, employees encounter highly stressful situations on a regular basis. A stress interview subjects candidates to an intimidating situation to determine how they will handle stress in the position.

Question Guidelines

Equal opportunity legislation and regulations described earlier in this chapter require that questions asked of candidates during the selection process be constructed to obtain only job-related information. Some topics may never be a consideration in a selection decision, such as race. Others, such as age, are BFOQs that may be asked in a nondiscriminatory manner (for example, state laws may require that a bartender be at least 21 to serve alcoholic beverages). Table 4.6 illustrates appropriate and inappropriate ways to obtain job-related information in an interview.

TABLE 4.6 Appropriate and inappropriate job-related questions

Inappropriate Interview Questions	Appropriate Interview Questions
Affiliations
What clubs or social organizations do you belong to? Do you go to church?	Do you belong to any professional or trade associations or other organizations that you think are relevant to this job?
Age
How old are you? When did you graduate from high school?	Are you 18 or older? Can you, after employment, provide proof of age?
Arrest Record
Have you ever been arrested?	Have you ever been convicted of_________? (Name a crime that is plausibly related to the job in question.)
Disabilities
Do you have any disabilities? Have you had any recent or past illnesses or operations? If yes, list them and give dates when these occurred. How's your family's health? When did you lose your vision/arm/hearing? How did it happen?	After reviewing the job description, are you able to perform all the essential functions of the job, with or without accommodation? Any job offer will be made contingent on a medical exam. Are you willing to undergo one if we offer you a job?
Marital/Family Status
What is your marital status? With whom do you live? What was your maiden name? Do you plan to have a family? When? How many children will you have? What are your child-care arrangements?	Are you willing to relocate?* This job requires frequent travel. Are you willing and able to travel when needed?* Is there anything that will prevent you from meeting work schedules?*
Military Service
Were you honorably discharged? What type of discharge did you receive?	In what branch of the armed services did you serve? What type of training or education did you receive in the military?
National Origin/Citizenship
Are you a U.S. citizen? Where were you/your parents born? What is your race? What language did you speak in your home when you were growing up?	Are you authorized to work in the United States? What language(s) do you read/speak/write fluently? (Acceptable if related to essential functions.)
Personal
How tall are you? How much do you weigh? Would working on weekends conflict with your religious beliefs?	This job requires the ability to lift a 50-pound weight and carry it 100 yards. Are you able to do that? This job will require work on the weekends. Are you able to do so?
*Acceptable if asked of every candidate.

Interviewer Bias

Any interviewer may bring preconceived ideas or biases into an interview situation; these can have an unintended impact on the hiring decision. The following list includes some of the types of interview bias that can occur. Once interviewers are aware of these, it's possible to reduce their impact on the selection process:

Average/Central Tendency The average bias becomes apparent when the interviewer has difficulty deciding which candidate is best and rates them all about the same.

Contrast The contrast bias occurs when an interviewer compares candidates to each other or compares all candidates to a single candidate. For example, if one candidate is particularly weak, others may appear to be more qualified than they really are.

Cultural Noise Cultural noise bias occurs when candidates answer questions based on information they think will get them the job—what they think the interviewer wants to hear. For example, a candidate who has been an individual contributor may tell an interviewer that they prefer working as part of a team if the interviewer stresses teamwork as a key job requirement.

First Impression This bias can work either for or against a candidate, depending on the interviewer's first impression. A candidate who is very nervous and stutters during the first few minutes of the interview may be viewed as less qualified even if during the remainder of the interview they're poised and well spoken.

Gut Feeling The gut feeling bias occurs when the interviewer relies on an intuitive feeling that the candidate is a good (or bad) fit for the position without looking at whether the individual's qualifications meet the criteria established by the job specifications and candidate profile.

Halo Effect The halo effect bias occurs when the interviewer evaluates a candidate positively based on a single characteristic. For example, a candidate's self-confident attitude may overshadow a lack of experience in a particular requirement.

Harshness/Horn Effect Harshness bias, or the horn effect, occurs when the interviewer evaluates a candidate negatively based on a single characteristic.

Knowledge-of-Predictor Knowledge-of-predictor bias occurs when the interviewer is aware that a candidate scored particularly high (or low) on an assessment test that has been shown to be a valid predictor of performance.

Leniency Leniency bias occurs when an interviewer tends to go easy on a candidate and give a higher rating than is warranted, justifying it with an rationalization.

Negative Emphasis The negative emphasis bias occurs when the interviewer allows a small amount of negative information to outweigh positive information.

Nonverbal Bias Nonverbal bias occurs when an interviewer is influenced by body language. For example, a candidate who frowns when answering questions could be rated negatively even though the answers were correct.

Question Inconsistency Question inconsistency bias occurs when an interviewer asks different questions of each candidate. Although this is acceptable to a certain extent in order to delve more deeply into each candidate's qualifications, there is no baseline for comparison if there are no questions that were asked of all candidates.

Recency The recency bias occurs when the interviewer recalls the most recently interviewed candidate more clearly than earlier candidates.

Similar-to-Me The similar-to-me bias occurs when the candidate has interests or other characteristics that are the same as those of the interviewer and cause the interviewer to overlook negative aspects about the candidate. For example, an interviewer who played college football may select a candidate who did so even though the candidate's qualifications aren't the best for the position.

Stereotyping The stereotyping bias occurs when the interviewer assumes a candidate has specific traits because they are a member of a group. For example, an interviewer may assume that a woman would not be able to successfully perform in a job that requires frequent lifting of packages weighing 50 pounds.

In-depth interviews are the cornerstone of the selection process, used in virtually all hiring decisions. However, interviews aren't the only tool available for candidate selection. Equally important information that adds different perspectives to candidates can be obtained by using realistic job previews, in-box tests, and assessment centers.

Realistic Job Preview

A realistic job preview (RJP), designed to give candidates an accurate picture of a typical day on the job, provides an opportunity for them to self-select out if the job isn't what they expected it would be. This increases the chances for success on the job, thereby reducing turnover. Depending on the type of job, the RJP can take many forms, including observing a current employee doing the job (as in a call center environment, for example), a simulated experience of the job, or a video presentation about the organization, work environment, and co-workers. A tour of the workplace is another way to provide candidates with an idea of what it would be like to work in the organization. These techniques, either singly or in some combination, can provide candidates with realistic expectations of the job and the organization.

In-Box Test

An in-box test provides candidates with a number of documents describing problems that would typically be handled by an employee in the position, with instructions to prioritize the problems and/or decide how the problems should be handled. Candidates are evaluated on the appropriateness of their decisions as well as on the length of time it takes for them to complete the test.

Assessment Centers

Assessment centers are characterized by multiple tests designed to measure different aspects of the job. Generally used to assess candidates for management potential and decision-making skills, they have been demonstrated to be valid predictors of success on the job. Used extensively by state and local governments and large organizations for assessing internal candidates for promotion, their use is limited due to the high cost of conducting them. Typical assessments include interviews, testing and problem-solving skills, in-basket tests, leaderless group discussions, and role-playing exercises.

Candidate Testing Programs

The use of pre-employment tests has become more prevalent in recent years. These tests take many forms and have a variety of purposes. The key issue to keep in mind with regard to employment tests is the requirement that they must be job-related and, should they be challenged by an EEOC complaint, defensible as valid predictors of success in the position. Candidates for PHR/SPHR certification should be aware of the following types of selection tests:

Aptitude Tests These tests are designed to measure an individual's knowledge and ability to apply skills in various areas, such as mathematics, typing, language, and reasoning. Properly constructed aptitude tests have been shown to be valid predictors of job success.

Cognitive Ability Test (CAT) CATs measure an individual's ability to analyze and solve problems and draw conclusions from a set of facts. They also measure an individual's potential for learning, thinking, and remembering.

Personality Test Personality or psychometric tests assess how a candidate will “fit” into a specific job. If, for example, an employer uses a personality test that has shown particular characteristics to be valid predictors of success in sales positions, and an applicant doesn't reflect those characteristics when tested, the test would indicate an area to be explored with the candidate prior to making the hiring decision.

Integrity Tests Also known as honesty tests, integrity tests assess a candidate's work ethic, attitudes toward theft and drug and alcohol use, and similar traits. According to the EEOC, professionally developed integrity tests don't create an adverse impact for protected classes as long as the tests are administered equally to all candidates.

Psychomotor Assessment Tests A psychomotor assessment tests an individual's coordination and manual dexterity.

Physical Assessment Tests Physical assessment tests are used to determine whether candidates are physically capable of performing specific job duties. The tests generally require that tasks be completed within a predetermined period of time and most often simulate activities that regularly occur on the job. A common physical assessment test is one that is given to potential firefighters to ensure that they're capable of lifting and carrying heavy weights for predetermined periods of time in a variety of circumstances.

As previously discussed, a key requirement for selection tools is that they be both related to specific job requirements and valid predictors of successful job performance. To determine whether a specific employment test meets those criteria, employers must ensure that tests are both reliable and valid.

Reliability and Validity

The UGESP requires that selection tests be reliable and valid predictors of success on the job.

Reliability

Reliability measures whether a test or other measurement produces consistent results so that, over time, the scores won't vary greatly. Test reliability is enhanced by several factors, including wording instructions and test questions clearly. Providing optimal conditions for administering the test contributes to its reliability, as does making sure it's long enough to accurately test the candidate's knowledge.

Validity

Validity considers the characteristics being measured by a test and whether the test is measuring the characteristic accurately:

Content Validity Content validity is the simplest of the three validation measures. Job analysis is a key element of the content-validity process, which confirms that a selection procedure samples significant parts of the job being tested. For example, a driving test given to a delivery person who would drive a truck 80 percent of the time if hired for the job is a test with content validity.

Construct Validity Construct validity determines whether a test measures the connection between candidate characteristics and successful performance on the job. According to the DOL, construct validity is a method of testing that measures an applicant's abstract future behaviors. In order for a test to be legally defensible, it must show that it measured the proper characteristic, and that it accurately predicted future success on the job.

Criterion Validity A criterion is a trait or work behavior that is predicted by a test. Criterion validity is established when the test or measure either predicts or correlates the behavior:

Pre-employment Inquiries

Pre-employment inquiries or background checks cover a range of activities designed to ensure that candidates who receive employment offers are who they represent themselves to be during the selection process. Information collected during these processes should be protected from inappropriate dissemination and, at the appropriate time, disposed of in a way that ensures its security. Pre-employment inquiries verify information collected from candidate resumes and/or interviews during the selection process. Some of the information is relatively easy to verify, such as educational degrees and previous employment, and provides insight into earlier educational and employment experiences.

Pre-employment inquiries may also include a check of the candidate's financial records, driving record, and any previous criminal behavior, depending on the type of job. Any background or reference check conducted by a third party is considered to be a consumer report and is therefore subject to requirements of the Fair Credit Reporting Act (FCRA). When employers conduct their own reference checks, those requirements don't apply.

Reference Checks

An organization may ask for several types of references from potential employees. Types of references may include the following:

Employment References To make an informed decision about a potential employee, employers should obtain all the information they can from previous employers. Information collected during the reference-checking process includes previous employment history, dates, job titles, and type of work performed. Many employers are reluctant to provide more information than this for privacy reasons, but as long as the information is factual and given in good faith, most states consider it “qualifiedly privileged,” which protects the employer from legal action. It's desirable to obtain additional information about the employee's work habits and interpersonal skills and find out if the employee is eligible for rehire.

Educational References Depending on the position applied for and the length of time since graduation, some employers request high-school, college, and post-graduate transcripts to verify the accuracy of information presented during the selection process.

Financial References Financial references are generally used only when candidates will be handling large sums of cash. As with all other selection tools, a financial reference must be shown to be job related and a valid predictor of success in the position. When required, financial references, generally provided by credit-reporting agencies, are subject to requirements of the federal FCRA.

Criminal Record Checks

Criminal record checks can uncover information about substance abuse, violent behavior, and property crimes such as theft and embezzlement. Because private employers don't have access to a central database that collects information from every level of government (federal, state, county, and local), it can be difficult to do a comprehensive check. When applicants have lived or worked in several states, counties, or municipalities, records in each jurisdiction must be checked to ensure completeness.

Negative information obtained through criminal record checks should be carefully reviewed on a case-by-case basis, considering all of the relevant information:

• How does the type of crime relate to the position applied for?
• How recent was the conviction?
• How old was the applicant when the conviction occurred?
• What is the level of risk to customers, co-workers, and others in the workplace if the applicant is hired?

Criminal record checks are considered consumer investigations and must comply with related FCRA requirements.

When an employer considers making an adverse hiring decision based on negative information received in an investigative consumer report, the applicant must be notified in writing and given a chance to respond. Should the negative information be the result of a mistake, the applicant can provide information to clear the record. If the employer decides to proceed with the adverse action, the applicant must receive a second written notice stating that the adverse action has been taken.

Negligent Hiring

Negligent hiring occurs when an employer knew or should have known about an applicant's prior history that endangered customers, employees, vendors, or others with whom the employee comes in contact. Employers can prevent negligent-hiring lawsuits by carefully checking references and running background checks for all candidates. Once an employer finds out about such a history, the employer is obligated to safeguard others who come in contact with the individual during the workday by taking whatever action is necessary to maintain a safe work environment.

To defend themselves against claims of negligent hiring, employers can demonstrate that they exercised due diligence in the hiring process by taking the following steps:

• Conducting reference checks with previous employers
• Obtaining reports from the Departments of Motor Vehicles in the states where the applicant has lived or worked
• Verifying the validity of the applicant's Social Security number
• Conducting criminal record checks
• Verifying the validity of any government-issued licenses, such as a medical or engineering license issued by a state
• Conducting drug-screening tests

Polygraph Tests

The use of polygraph tests in the employment process is limited by the Employee Polygraph Protection Act (EPPA).

Medical Examinations

As with all other assessment tools, medical examinations are allowable after extending a job offer or conditional job offer if their purpose is job related and they're required of all candidates. These exams are used to ensure that the employee will be fully capable of performing the requirements of the job and, in some cases, may be part of an employer's health and safety program. Under the ADA, employers may make a job offer conditional on a medical examination before the candidate begins working as long as all applicants for positions in the same job category must undergo the exam. If the offer is rescinded as a result of the medical exam, the employer must be able to demonstrate that the job requirement eliminating the candidate from consideration is related to a business necessity.

Drug-Screening Tests

Studies conducted by the Occupational Safety and Health Administration (OSHA) indicate that drug-screening programs reduce job-related accidents. Substance abuse is also linked to reduced productivity.

Drug-screening tests are specifically excluded from the ADA's medical-examination requirement and may be required prior to extending an offer.

Employment Offers

The post-interview strategy meeting has been concluded, the references have been checked, and results of the pre-employment tests are in. The hiring decision has been made, and it's time to extend an offer. After discussion with HR, the hiring manager contacts the successful candidate and extends a verbal offer; or, in some organizations, HR may be responsible for extending verbal offers. When the verbal offer is accepted, a written offer agreement is prepared.

Employment Agreements and Contracts

Employment relationships in many states are subject to the common law concept of employment-at-will, meaning that the relationship can be ended at any time by either party with or without a reason (more information about employment-at-will and other common law concepts is included in Chapter 7, “Employee and Labor Relations”). As a result, few employees today work under employment contracts. In most cases, the relationship is defined in an offer letter that is composed after negotiations are complete.

Making and Negotiating Offers

One of the goals of the selection process is to collect information from candidates about their expectations for cash compensation, benefits, and other terms and conditions of employment that may be appropriate to the position. When it's time to make an offer, these expectations are incorporated into the decision-making process of crafting the offer. Prior to making the offer, any required approvals are obtained, along with approval for any “wiggle room” should the candidate come back with a request for a higher salary or increased benefits. Once the verbal negotiations are complete, the written agreement can be completed.

Offer Letters

The offer letter should be prepared immediately upon acceptance of the verbal offer by the candidate. The standard offer letter should be reviewed by the corporate attorney to ensure that its provisions don't compromise the organization and that it contains the terms of the offer as well as any contingencies that apply, such as a medical exam, a background check, or proof of the right to work in the United States. The salary offer should be stated in an hourly or monthly amount. The offer should state clearly that the organization is an at-will employer and that only the terms and conditions of the offer contained in the offer letter are valid. Finally, there should be a reasonable time frame for returning a signed acceptance of the offer.

Care should be taken to ensure that any promises of benefits or special conditions agreed on by the hiring manager are included in the offer letter so there is no ambiguity about the complete offer.

Employment Contracts

An employment contract binds both parties to the agreements contained in the contract. Contracts are generally reserved for senior-level managers and professionals such as doctors and teachers, and can cover a wide range of topics. Any areas of the employment relationship not specifically covered in the contract are subject to common law. Some standard clauses seen in employment contracts include the following:

Terms and Conditions of Employment This clause covers the start date and duration of the contract and, if the contract is for a set period of time, includes any automatic extension agreements.

Scope of Duties General and specific duties and responsibilities are covered by this clause. The duties can be part of the contract, or the job description may be incorporated into the agreement as an addendum. Expectations for performance are included here as well.

Compensation The compensation package is described in this clause, which includes the base salary, any bonus and incentive agreements, auto or telephone allowance, company car, or other agreements.

Benefits and Expense Reimbursements Items covered by this clause include disability and health insurance benefits and retirement plans. The extent of and conditions for expense reimbursements are also described here.

Nondisclosure of Proprietary Information Requirements for the maintenance of confidentiality with regard to proprietary information are included here, along with noncompete language and requirements for the return of company property when the employment relationship ends.

Nonsolicitation Agreement This clause sets forth agreements that limit the employee's ability to solicit customers, vendors, and employees during the course of the contract and for an agreed-on period of time after the contract ends.

Advice of Counsel A clause advising the employee to seek legal counsel prior to signing the contract is often included.

Disability or Death The employer can include a clause that states what happens to the agreement in the event of the disability or death of the employee.

Termination Clause The termination clause sets forth conditions that would lead to a termination for cause, such as inability to perform, neglecting the duties of the position, misconduct, violations of company policy, or other egregious acts.

Change of Control A change of control clause protects the employee's job and compensation in the event of a reorganization, an acquisition, or a merger, for a specified period of time.

Post-offer Employment Activities

When the offer has been accepted, the transition from candidate to employee begins. At this stage, employees form their first impressions about what it will be like to work in the organization. During this time, employers can take steps to begin the relationship positively by including employees in special events that may be scheduled prior to their first day, and providing them with information that will help them become productive more quickly and begin assimilating into the work group.

Relocation Practices

In some circumstances, employers may be willing to pay the costs of relocating an employee or an applicant. When that occurs, HR may manage the process. Elements of relocation packages that can be negotiated include a company-paid trip for the spouse and family to see the area and look for a new home, assistance with selling the old and/or purchasing the new home, payment of moving expenses, assistance with a job search for the spouse in the new area, and a guarantee of the sale price of the old house if it doesn't sell.

Relocation is an activity that lends itself to outsourcing. Some organizations contract with moving companies that include relocation assistance as part of the moving package, and there are also professional organizations that manage the entire process for the organization and the family. These companies can provide property-management services, home inspections, real-estate attorneys or title companies, home appraisals, moving companies, and, in some cases, corporate living situations for short-term job assignments. This can be a cost-effective solution that saves time for in-house staff.

Immigration Processes

In 2003, enforcement responsibility for the Immigration and Nationality Act (INA) of 1952 and its amendments was transferred to the U.S. Citizenship and Immigration Services (USCIS), an agency of the Department of Homeland Security. The INA and its amendments control immigration policy for the United States established by the following:

INA of 1952 and Amendment of 1965 The purpose of the INA was to simplify the multiple laws that previously governed U.S. immigration policy. As established by previous legislation, immigration quotas continued to be set on the basis of national origin.

Following the trend of equal opportunity established by the Civil Rights Act of 1964, the 1965 amendment eliminated national origin, race, and ancestry as bars to immigration and changed the allocation of immigrant visas to a first-come, first-served basis. The amendment also established seven immigration categories with the goals of reunifying families and giving preference to those with specialty skills that were needed in the United States.

Immigration Reform and Control Act (IRCA) of 1986 IRCA was enacted in 1986 to address illegal immigration into the United States. The law applied to businesses with four or more employees and made it illegal to knowingly hire or continue to employ individuals who weren't legally authorized to work in the United States. Unfair immigration-related employment practices were defined as discrimination on the basis of national origin or citizenship status.

Employers were required to complete Form I-9 for all new hires within the first 3 days of employment and to review documents provided by the employee that establish identity or employment authorization or both from lists of acceptable documents on the Form I-9. IRCA requires employers to maintain I-9 files for 3 years from the date of hire or 1 year after the date of termination, whichever is later, and allows, but doesn't require, employers to copy documents presented for employment eligibility for purposes of complying with these requirements. The act also provides that employers complying in good faith with these requirements have an affirmative defense to inadvertently hiring an unauthorized alien. Substantial fines for violations of both the hiring and recordkeeping requirements were provided in the law. Failure to maintain acceptable Form I-9 records is subject to fines of not less than $110 (per USCIS) or more than $1,100 for each employee without a completed form available upon request to an authorized agent of the USCIS. In addition for penalties assessed for missing or incomplete I-9 forms, IRCA established fines for unauthorized employees. Table 4.7 outlines the fines for hiring violations under IRCA.

TABLE 4.7 IRCA fines

Violation	Amount of Fine
First	Not less than $375 or more than $3,200 for each unauthorized employee
Second	Not less than $3,200 or more than $6,500 for each unauthorized employee
Third	Not less than $4,300 or more than $16,000 for each unauthorized employee

In addition to the fines listed, employers who knowingly hire unauthorized workers are subject to fines of $3,200 per employee and/or 6 months imprisonment.

Until 2005, IRCA required employers to store I-9 forms on one of three types of media: paper, microfilm, or microfiche. Passage of HR 4306, which was signed into law by President George W. Bush, allows employers to store I-9 forms in PDF files or other electronic formats.

E-Verify E-Verify is a free service offered through the USCIS. It's a tool that helps employers comply with IRCA's requirement that employers must verify the identity and employment eligibility of new employees. The employer accesses E-Verify through the Internet, inputs basic information gleaned from the Form I-9, and receives a near-instant “employment authorized” or “tentative nonconfirmation” (TNC) reply from the website. The employer then prints the results. A TNC result gives the employee more information about the mismatch and a statement of their rights and responsibilities under the law. It's important to note that an employer may not terminate an employee for the initial TNC; it's only when they receive a final nonconfirmation that an employer may terminate under E-Verify.

To get started in the program, employers must first enroll their company, sign a Memorandum of Understanding (MOU) reviewing their obligations and acknowledging their understanding of the terms of enrollment, and commit to using E-Verify for every new employee at the affected hiring site. Under federal law, employers may designate the use of E-Verify to certain locations, although this may be restricted under some state laws.

Immigration Act of 1990 The Immigration Act of 1990 made several changes to IRCA, including adding the requirement that a prevailing wage be paid to H-1B immigrants to ensure that U.S. citizens didn't lose jobs to lower-paid immigrant workers. The act also restricted to 65,000 annually the number of immigrants allowed under the H-1B category and created additional categories for employment visas, as shown in Table 4.8. In 1996, the number and types of documents to prove identity and eligibility to work were reduced.

TABLE 4.8 Employment visas

Visa	Classification
	Visas for Temporary Workers
H-1B	Specialty occupations, DOD workers, fashion models
H-1C	Nurses going to work for up to three years in health professional shortage areas
H-2A	Temporary agricultural worker
H-2B	Temporary worker: skilled and unskilled
H-3	Trainee
	Visas for Temporary Workers
J-1	Visas for exchange visitors Visas for intracompany transfers
L-1A	Executive, managerial
L-1B	Specialized knowledge
L-2	Spouse or child of L-1
	Visas for Workers with Extraordinary Abilities
O-1	Extraordinary ability in sciences, arts, education, business, or athletics
	Visas for Athletes and Entertainers
P-1	Individual or team athletes
P-1	Entertainment groups
P-2	Artists and entertainers in reciprocal exchange programs
P-3	Artists and entertainers in culturally unique programs
	Visas for Religious Workers
R-1	Religious workers
	Visas for NAFTA Workers
TN	Trade visas for Canadians and Mexicans

Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996 This act reduced the number and types of documents allowable to prove identity, employment eligibility, or both in the hiring process and established pilot programs for verification of employment eligibility.

Employee On-Boarding and Orientation Programs

Formal on-boarding and orientation programs are composed of two elements: a general introduction to the organization as a whole and a job-specific orientation. HR often has responsibility to provide the organization orientation, including information about the mission, goals, and values, and answering general questions. The job-specific orientation is conducted or overseen by the hiring manager and provides information specific to the department and position, sets performance expectations, and ensures that the new hire knows where to go for assistance when needed. These programs are an important part of a new hire's introduction to the organization. In many organizations, daily events move so quickly that new employees are sometimes left to fend for themselves without understanding what they're supposed to do or how to get help when they need it. The on-boarding and orientation programs help ensure that new employees have the support they need to be successful. HR helps to bridge the gap between the more administrative orientation activities to the more robust introduction that make up the activities of on-boarding.

An example of a long-term on-boarding activity is socialization. This includes efforts such as the assignment of an internal mentor or peer-to-peer support for training. Buddy programs are sometimes used to provide additional, informal support to new employees. Buddies are employees in good standing with enough time on the job to be familiar with how things work in the organization and can answer questions or direct the new employee to a person with the answers.

As with any successful HR program, scheduled follow-up to measure successful entry is an important component of the on-boarding process. Functional follow-up may include completion of enrollment in a benefits plan or the verification of receipt of an identification badge or working phone extension. A less functional but no less important follow-up activity may be to schedule a meeting within the first 30 days to discuss how the job is matching with the employee's initial expectations. The most effective on-boarding activities take place over an extended period of time with regularly scheduled follow-ups that provide opportunities to check in with the employee and provide support as needed.

Organization Exit/Off-Boarding Processes

Organization exits happen in one of two ways: employees choose to leave of their own volition (resignations and retirements), or they're asked to leave in one way or another (termination, downsizing, or layoff). Organization exits are stressful. Even when the employee has chosen to leave and is exiting on good terms, issues arise for the organization in replacing the employee or allocating duties to remaining co-workers. Co-workers can be affected by the change as well, so developing an exit process that reduces stress and builds a smooth transition will pay off in many ways. Most significant for HR is the positive message a smooth transition sends to employees who remain in the organization.

Voluntary Exit Processes

Employees voluntarily exit the organization by either resigning or retiring. Resignations occur when an employee decides to leave the organization and pursue other opportunities. For HR, resignations present few legal issues, but they do require decisions about replacement or reassignment of work that may lead to promotions or transfers of other employees, all of which affect the workforce planning process. Resignations require HR to ensure that any outstanding loans or advances are repaid to the organization or arrangements are made for that to happen. If the employee provided 72 hours notice, final payment of all wages due, including any unused accrued vacation or PTO, must be paid at the time of departure. In addition, Consolidated Omnibus Budget Reconciliation Act (COBRA) and Health Insurance Portability and Accountability Act (HIPAA) notices must be provided for departing employees. (COBRA and HIPAA requirements are covered in detail in Chapter 6.)

Planned retirements occur when an employee decides to stop working full time and pursue other interests. HR can provide preretirement counseling to prepare employees for the transition from the structure provided by full-time work to unstructured time for pursuing other activities in leading a full and rewarding life. Employee Assistance Programs (EAPs) are excellent sources for this type of counseling and assistance. (EAPs are covered in detail in Chapter 6.)

Before an employee leaves the company, an exit interview should be conducted to gather relevant feedback. An effective exit interview provides an opportunity for employees to communicate information to the organization about why they decided to leave, what improvements the organization could make to enhance the employment experience, and any specific issues that need to be addressed. If the employee is one who has been a significant contributor and whom the organization would consider rehiring in the future, this would be the time to leave the door open for that possibility. Ideally, a third party conducts exit interviews so that employees feel free to be candid. A number of organizations provide this service, most often as a telephone or online interview. Collecting and evaluating this data over time will help identify possible problem areas that, if resolved, can reduce unwanted and costly turnover.

Involuntary Exit Processes

Involuntary exits occur as the result of either performance problems or changing business needs. Performance problems and terminations resulting from those issues are discussed in Chapter 7. This chapter discusses issues related to downsizing, which occurs as businesses change strategic direction or react to economic situations. There are a number of issues to consider in this process, beginning with legal notice requirements.

Worker Adjustment and Retraining Notification (WARN) Act of 1988

The WARN Act was passed by Congress in 1988 to provide some protection for workers in the event of mass layoffs or plant closings. The act requires that 60 days advance notice be given to either the individual workers or their union representatives. The intent of Congress was to provide time for workers to obtain new employment or training before the loss of their jobs occurred. The WARN Act is administered by the DOL and enforced through the federal courts.

Employers with 100 or more full-time employees or those with 100 or more full- and part-time employees who work in the aggregate 4,000 hours or more per week are subject to the provisions of the WARN Act. The employee count includes those who are on temporary leave or layoff with a reasonable expectation of recall.

The WARN Act established that a mass layoff occurs when either 500 employees are laid off or 33 percent of the workforce and at least 50 employees are laid off. A plant closing occurs when 50 or more full-time employees lose their jobs because a single facility shuts down, either permanently or temporarily. In cases where the employer staggers the workforce reduction over a period of time, care must be taken that appropriate notice is given if the total reductions within a 90-day period trigger the notice requirement.

The WARN Act also established rules on notice. For instance, notice is required to be given to all affected employees or their representatives, the chief elected official of the local government, and the state dislocated worker unit. Notice requirements vary according to which group they're being sent to, but they must contain specific information about the reasons for the closure, whether the action is permanent or temporary, the address of the affected business unit, the name of a company official to contact for further information, the expected date of closure or layoff, and whether bumping rights exist.

The WARN Act provides for three situations in which the 60-day notice isn't required, but the burden is on the employer to show that the reasons are legitimate and not an attempt to thwart the intent of the act:

• The faltering company exception applies only to plant closures in situations where the company is actively seeking additional funding and has a reasonable expectation that it will be forthcoming in an amount sufficient to preclude the layoff or closure and that giving the notice would negatively affect the ability of the company to obtain the funding.
• The unforeseeable business circumstance exception applies to plant closings and mass layoffs and occurs when circumstances take a sudden and unexpected negative change that couldn't have reasonably been predicted, such as the cancellation of a major contract without previous warning.
• The natural disaster exception applies to both plant closings and mass layoffs occurring as the result of a natural disaster, such as a flood, an earthquake, or a fire.

Once the organization has determined whether compliance with WARN Act requirements is necessary, decisions regarding a reduction in force (RIF)—also commonly referred to as a layoff—can be made. Planning and conducting an RIF is stressful for managers, who must decide which employees will be asked to leave the organization, and even more so for employees, who usually figure out that layoffs are coming long before the management announcement. Maintaining productivity in a workforce that is waiting to find out whether they will have jobs is a challenging prospect. During these times, honest communication with employees is essential, and management should provide as much information as possible before actual layoff decisions are complete. Once the layoff has occurred, open and honest communication is still essential, because remaining employees struggle with feelings of anger that their co-workers had to leave the company, “survivor guilt” because they're still employed, and dissatisfaction or work overload if they're now asked to take on the work of the employees who left the company.

Making Layoff Decisions

As managers struggle with decisions about who will go and who will stay, the focus of those decisions must be on what is necessary for the business. Documenting the business reason for the decision clearly and unambiguously is essential in case the decision is challenged on the basis of disparate impact or other equal opportunity requirements.

Managers often look to layoffs as a way to remove low performers. If this is the route taken, documentation of the method used to determine who these employees are is necessary. Performance appraisals are often used for this purpose.

Severance Offering a severance package to departing employees helps ease the shock of unemployment. Severance packages must be consistent, based on a rationale that ensures equity to all departing employees. Severance amounts can be based on seniority, employee classes, or some combination of the two.

Outplacement Outplacement services are used to transition employees who are leaving the company, most often as the result of a downsizing or layoff. These services assist employees with updating resumes, preparing for interviews, and searching for new jobs. They're often provided in a group-seminar setting for individuals who have been terminated as part of a mass layoff.

State or local unemployment offices, as well as Workforce Investment agencies, may provide outplacement assistance as well, including on-site meetings with impacted employees.

Executive outplacements may occur as the result of a merger or an acquisition and may include additional benefits, such as headhunting services and one-on-one counseling. Providing outplacements for other employees can be a great help in finding new jobs or in coping with the change in circumstances. Continuing the EAP for a finite period of time for laid-off workers is another way to assist them in coming to terms with a job loss.

Unemployment Insurance If the RIF or layoff meets WARN notice thresholds, the state unemployment office will be aware of the pending layoff. Whether or not that is the case, HR should ensure that employees are clear about their eligibility for unemployment benefits and how to apply for them. Most states provide pamphlets explaining the requirements, which are distributed at the time of the layoff.

Conducting the Layoff Meeting

During the layoff meeting, managers should communicate the message unambiguously and with compassion. If the layoff decision is a permanent one, employees should be advised that they won't be called back to work; if there is a possibility for rehire, they should be advised of the time frame in which that may occur. Employees should be given adequate time to gather personal items prior to leaving but shouldn't be allowed to hang around indefinitely, because this negatively impacts productivity and is hard on the morale of employees who will be staying with the organization. Once the termination meetings have been conducted, it's important that management meet with the remaining employees to answer questions and provide reassurance.

Easing the Transition

Whether a termination decision will affect a single employee or a group, it's one of the most difficult decisions managers face. Even so, the difficulty and discomfort experienced by management is far less than that of the employees who are losing their jobs and wondering how long it will take to find a new job and how they will make ends meet in the meantime.

Many state governments provide programs through the agencies designated to provide employment or reemployment services. The federal government contributes to these efforts with funding for training or retraining displaced workers. Two of these programs are the result of the Workforce Investment Act and the Trade Adjustment and Assistance Act:

Workforce Investment Act (WIA) The creation of WIA was a collaborative effort between the DOL and Congress, resulting in a job-training program designed to improve worker skills for jobs in the twenty-first century. WIA programs are designed to achieve three goals:

• Improve workforce quality
• Enhance national productivity and competitive ability
• Reduce reliance on welfare

The foundation of the program is its One-Stop service-delivery centers, which were established to provide a full range of services for workers and employers. These centers can include education services, skills assessment and training, job-search counseling and support, mentoring, and access to job-search information, and are generally managed by state and local governments.

Trade Adjustment Assistance (TAA) In 2002, Congress established the Trade Adjustment Assistance (TAA) program to assist workers who lose their jobs as the result of an increase in imported goods. Eligibility for the program requires a group of three or more workers to submit an application to the DOL Division of Trade Adjustment Assistance (DTAA). DTAA determines whether the group meets eligibility requirements and, if so, issues a certification. The group must meet three requirements to be certified:

• Workers must have been laid off or had their hours and pay reduced by 20 percent or more.
• The employer's sales and/or production levels must have declined.
• The loss of jobs must be due in large part to increased imports.

Once the DTAA certifies that a group is eligible for the program, individual workers may apply for services and benefits that are available at one of the local One-Stop service centers established by WIA. Retraining and reemployment services available under the TAA program include up to 104 weeks of training, trade readjustment allowances (TRAs) for up to 52 weeks of training after unemployment benefits are exhausted, reimbursement of job-search expenses, and relocation allowances.

Records Management: The Life Cycle

Every employment-related activity in the scope of human resources receives or generates a record. The specific retention, storage, and destruction of these records make up the records life cycle.

Establishing the Policy

An effective records-management policy should be focused on defining controls. This includes controlling the creation, access, legibility, retrieval, use, retention, and destruction of each record.

A records-retention policy should include a description of the employment documents covered by the policy (defining what is a record), a control system for limiting access and ensuring availability upon demand or need (description of maintenance or use), and a schedule for retention and eventual destruction by record type.

An HR professional should have a firm understanding of theory and application related to developing and implementing a records-retention process. In addition to being a best practice, records retention is required by several federal laws. For example, the Civil Rights Act of 1964 requires that employers with at least 15 employees must retain applications and other personnel records relating to hires, rehires, tests used in employment, promotion, transfers, demotions, selection for training, layoff, recall, terminations, and discharge for 1 year from making the records or taking the personnel actions. See Table 4.9 for more examples of the types of records that are generated by functional area of HR.

Proper Disposal

In June 2005, the FTC issued a disposal rule related to the destruction of consumer information. This rule covers employment records related to sensitive personal information (Social Security numbers, medical history), consumer credit, references, and background searches. It directs affected companies to destroy covered records in a manner that protects against “unauthorized access to or use of the information.” The FTC describes the following as acceptable methods for compliance. Employers may:

• Burn, pulverize, or shred papers containing consumer report information so that the information cannot be read or reconstructed;
• Destroy or erase electronic files or media containing consumer report information so that the information cannot be read or reconstructed;
• Conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information consistent with the Rule...

TABLE 4.9 Types of records generated by HR

You can find the final Rule in its entirety on the FTC's website: www.ftc.gov/os/2004/11/041118disposalfrn.pdf

Electronic Storage

Technology has influenced many HR practices, not the least of which is records retention. Before deciding to electronically store records, an HR professional must consider the specific regulatory requirements of the law(s) governing record retention, security, access, and legibility. A good example of the considerations for the electronic storage of records is given by the USCIS related to storing the Form I-9 electronically:

Metrics: Measuring Results

WFP functions lend themselves more readily to measurement than some other areas of HR:

Business Impact Measures In addition to the return on investment (ROI) measures discussed in Chapter 2, employee productivity is a key measure for business impact in the WFP function. Productivity metrics are calculated by dividing total output (expressed in revenue dollars or [in manufacturing industries] by a measure of inventory output) by the number of employees. This metric can be calculated for the whole organization or by work groups, depending on specific information needs.

Tactical Accountability Measures A number of established metrics can be used to measure HR's tactical accountability in WFP. Some of the more common include the following:

Accession Rate The accession rate measures the number of new employees against the total number of employees. This measurement is useful for determining the types of HR programs needed to manage and support the workforce. Accession rate is calculated by dividing the total number of new employees by the number of employees at the end of the previous measurement period.

Quality of Hire To calculate a quality-of-hire metric, HR must first develop criteria to identify what constitutes a quality hire. This information includes accurate job descriptions, assessment tools that accurately identify the best-qualified candidates, clear communication of expectations to new hires, and pre-established criteria to measure performance. The measurement is often based on performance ratings made by hiring managers after observing employees on the job.

Cost per Hire Cost per hire is a common metric but is often calculated without including all the costs associated with a hire. For example, a meaningful cost-per-hire calculation includes costs for advertising; in-house recruiter time to review resumes and screen candidates, and/or recruiter fees; HR staff salary; salaries for hiring managers and other members of the interview team; assessment tests; pre-employment inquiries; administrative costs; and any other costs involved in hiring a new employee. The metric is calculated by dividing the total costs by the number of hires for the measurement period.

Time to Hire The time-to-hire metric is calculated from the date a job is posted to the date a job is accepted by the new employee.

Replacement Cost Replacement cost per employee can be an eye-opener for managers and executives. In addition to the costs calculated for the cost-per-hire metric, this measurement also includes costs for training, lost productivity, temporary replacements, overtime for employees who fill in while the position is vacant, and others. These costs can easily reach 300 percent of annual salary for the position.

Turnover Analysis One of the most commonly used metrics, turnover analysis, is calculated by dividing the average number of total employees for the measurement period by the number of employees who exited the organization. This measurement can be calculated in a variety of ways to meet specific organization needs. Some variations include calculating on a monthly or annual basis and calculating turnover for voluntary separations only or for different business units in the organization.

Global Considerations

As businesses of all sizes become increasingly global, American companies find themselves employing all or part of their workforce in positions overseas. In addition to the planning steps discussed previously, there are a number of additional factors to consider for an international workforce, beginning with determining in which labor market(s) the company will recruit its employees. There are three possible areas:

• The home or parent country is the domicile of the company, where its corporate headquarters are located. Employees who originate from the home country are known as expatriates or parent-country nationals (PCNs). Employees returning from a host country assignment are called inpatriates, often requiring acclimation and reorientation to their home country workplace.
• The host country is the country wherein the corporation is operating, or is planning to operate, a business unit. Employees originating from the host country are known as host-country nationals (HCNs). Although this may seem to be a solution with few problems, there can be many unexpected issues to resolve, including those related to compensation and cultural differences.
• Employees from any country other than the home or host country are known as third-country nationals (TCNs). Experienced TCNs who are familiar with the organization's culture and business practices are most often used to set up a new business unit in a neighboring country. This can be an advantageous situation for the business because it's less expensive than relocating an expatriate.

It's important to understand the international staffing strategies that can be used in building the global workforce. Multinational corporations use four basic strategies in making these decisions:

Ethnocentric The ethnocentric approach is one in which all key management positions are filled by expatriates. The benefits of an ethnocentric approach include the ability of the organization to maintain control of its business units and ensure that business is conducted in accordance with corporate mandates. Communication with the home office is made easier because the expatriate is familiar with the organization's culture and business practices. International assignments also provide opportunities to develop individuals who are part of the succession plans for senior management roles.

This approach is often taken during the startup phase of a business unit to ensure that organizational standards are maintained or when there is a real or perceived lack of management talent available in the host country labor market. Although this approach encourages a cohesive culture throughout the organization, it focuses on the home country/parent organization and doesn't take into consideration local customs and business practices. This can lead to misunderstandings and create ill will between the local government and the company.

Polycentric A polycentric approach fills corporate positions in the home country with expatriates, whereas management positions in the host country are filled by HCNs. This approach can have a positive impact by showing a commitment to the host country and generating goodwill for the business, but it doesn't afford upward mobility for top managers in the host country. The business benefits, because it's less expensive to hire local employees—even at top dollar—than it is to fill international positions with expatriates. However, it can also limit communication between business units in the different locations and result in animosity between the home and host country business units because of differences in cultural practices and compensation levels between countries.

Regiocentric A regiocentric approach takes a somewhat larger operational view than does the polycentric. It covers a trade region such as the European Union and has managers move between business units in different countries in the region.

Geocentric The geocentric approach seeks to place the best-qualified person into each position, regardless of their country of origin. As a result, the business builds an international management team whose members are able to move into and address issues in any geographic area.

Once the company has decided which approach best suits its strategic goals and culture, HR has many complex issues to address. There are a myriad of laws, customs, and local practices to be dealt with that often conflict with home-country practices, and it's important to understand the impact of these issues when evaluating international workforce needs.

Expatriate issues in workforce planning fall into three main categories:

Cost The costs of sending employees to work in foreign countries can be substantial, in some cases as much as three times the annual salary. The additional costs are the result of factoring in expenses for moving families and minimizing the cultural adjustment for employees and their families. Another contributory cost comes from adjustments to pay that may be needed to keep employee salaries whole and retain their equity in the company. In addition, it's often necessary to subsidize schooling costs, taxes, and housing costs.

Foreign Business Practices The way business is done in foreign countries can be significantly different from the way business is done in the United States. Candidates for expatriate jobs must receive training on the culture and practices of the country to which they will be assigned to be successful in their positions and to avoid unintentionally offending those with whom they're working, thereby straining business relationships. It's important as well to provide training on laws governing U.S. business practices in foreign countries, particularly the Foreign Corrupt Practices Act (FCPA), which prohibits American businesses from proffering bribes in order to obtain contracts or encourage foreign bureaucrats to get things done in a timely fashion.

Cultural Acclimation Cultural acclimation can be difficult not only for the employee but also for the employee's spouse and children, and often results in the resignation of the employee or insistence on transfer back to the home country. Another issue is that although women are accepted in business leadership positions in the United States and other countries, cultural difficulties can be encountered in countries that are unaccustomed to viewing women in leadership roles. This issue alone can become a huge conflict, with EEO requirements to provide equal access to training and upward mobility at odds with the ability to do business in a country unaccustomed to dealing with women in powerful positions.

As evidence of the increasing significance of human resource expertise in global work environments, HRCI has developed a certification specifically for professionals who manage global HR needs on a regular basis. The Global Professional in Human Resources (GPHR) Exam certifies professionals with expertise in this area in greater detail than the SPHR exam. SPHR candidates can expect to be tested on their general knowledge of international HR practices and the impact of a global workforce on organization needs.

Summary

When strategically tied to the organization's vision, mission, and goals, planning for workforce needs is a key element of success. HR professionals must provide expertise for management in deciding whether to aggressively develop current employees for future growth in the organization, hire candidates from the outside, or use alternative staffing methods to accomplish the work that needs to be done. Understanding the implications of each approach allows HR to guide management in making decisions that best suit the organization's needs, culture, and values.

Identifying candidates who not only have the best KSAs for the job but whose personal goals, ambitions, and qualities also complement the needs of the organization requires HR professionals to be keenly aware of the organization's strategic direction. Providing opportunities to all qualified candidates opens up the labor pool available to the organization and includes candidates with a great deal to offer who might not have been considered in the past.

An effective hiring process begins with using sources that produce a pool of candidates with diverse backgrounds who have the required KSAs, continues with screening the candidates with a fair and equitable process designed to find the best match for the organization, and concludes by welcoming them with orientation programs that assist them in becoming productive members of the team. Having an effective organizational exit process in place eases the transition for employees who remain with the company as well as for those who are leaving. When downsizing decisions are made fairly and equitably, voluntary exits are treated with respect, and terminations for poor performance are handled with due process, remaining employees respond with greater loyalty and commitment to organizational goals.

HR professionals can show that they understand the fundamental needs of business by making recommendations and decisions based on quantifiable measures. Being able to show, for example, how much a bad hiring decision costs the organization in terms of the direct and indirect costs of hiring, training, and replacing employees demonstrates to management that effective HR management has a positive effect on the bottom line.

Exam Essentials

Be able to develop and implement a strategic workforce plan. A strategic workforce plan provides a framework for HR professionals to ensure that the right people with the right qualifications are available at the right time to achieve the organization's goals.

Be able to conduct a staffing needs assessment. A staffing needs assessment determines which KSAs are needed to meet future strategic goals and where training efforts (if filling jobs internally) or recruiting efforts (if hiring from the outside) should be focused.

Be able to develop a succession plan. A succession plan identifies high-performing individuals in the company who have the capability to take on positions at the senior and executive management levels. Once the individuals have been identified, they're coached, mentored, and provided with training opportunities to prepare them for greater responsibility.

Understand the Affirmative Action Plan process. An AAP is required to be filed by companies with federal contracts of $50,000 or more per year and 50 employees. The plan identifies how many incumbents in different job classifications are members of protected classes and compares that information to the availability of protected classes in the labor market.

Be able to develop job requirements from a job analysis. A job analysis provides the information to develop the job competencies, job descriptions, and test specifications necessary to both identify what needs to be done on a daily basis and recruit effectively for the best candidate to fill the position.

Be able to identify recruitment methods. Depending on the level of experience and skill being sought, there are a variety of methods to consider in the recruiting process. HR professionals must understand which methods will produce the candidates who are most appropriate to fill positions at different levels.

Be able to establish and implement selection procedures. Effective selection procedures help ensure that candidates selected for the organization meet all the job requirements and are the best fit for the position. Interviewing, testing, realistic job previews, and assessment centers help organizations determine whether the candidate is the right fit for the job. Reference checks ensure that the candidate has performed successfully in previous positions.

Understand the implications of federal immigration policy. Immigration laws were designed to protect American workers while encouraging the immigration of highly educated and skilled workers for jobs requiring high-level KSAs. Employers may hire noncitizens only when they can demonstrate that no American citizens with the necessary qualifications are available. When noncitizens are hired, they must be paid the prevailing wage for the position.

Be able to conduct post-hire activities. HR activities conducted during the post-hire phase have implications for the long-term success of new hires. It's important to understand the ramifications of employment offers and ensure that the new employee has all the necessary information to be successful. An effective orientation will make new employees feel welcome, introduce them to the company, and provide information on company policies.

Be able to create the organization exit process. HR professionals must develop fair and equitable processes for downsizing and laying off employees and be aware of legal notice requirements that must be followed when applicable. Resignations and retirements require that HR conduct exit interviews and create processes that provide for timely replacement of exiting employees.

Review Questions

You can find the answers in Appendix A.

1. The marketing director needs to hire a replacement for the marketing coordinator, who is being promoted. The position has changed quite a bit since the last time the job was advertised, and the director is looking to HR to assist in redefining the job requirements so the recruiting process can begin. Which of the following would not be used in determining the job requirements?
   1. Job competencies
   2. Job description
   3. Job specifications
   4. Candidate profile
2. Which of the following is not a BFOQ?
   1. A synagogue hiring a new rabbi requires that the rabbi be Jewish.
   2. A lingerie catalog hires only female models.
   3. A retail store in a predominantly Asian neighborhood advertises for Asian clerks.
   4. A swimming club requires that the men's changing-room attendant be male.
3. The court case that identified adverse impact as an unlawful employment practice was which of the following?
   1. Griggs v. Duke Power Co.
   2. Albemarle Paper v. Moody
   3. Washington v. Davis
   4. Taxman v. School Board of Piscataway
4. To determine the numbers and types of jobs necessary to realize business goals, HR must assess the KSAs available within the organization during a staffing needs analysis. What other factor is necessary to complete the assessment?
   1. The KSAs needed to achieve future goals
   2. The tasks, duties, and responsibilities for the work
   3. The KSAs available in the local labor market
   4. The organization's core competencies
5. Your New Orleans plant has an opening for a controller, and four candidates have been selected for interviews. Jack, the son of a plant employee, worked as an accountant for two years to put himself through the Wharton Business School and recently earned his MBA. Richard is a CPA with eight years of experience in a public accounting firm. Susan also has a CPA and has worked as an accounting manager in the corporate office of a large corporation in the same industry. Jane does not have a CPA or MBA but has worked as controller of a smaller local competitor for eight years. After interviewing all four candidates, the general manager told you that he wants to hire Jack because he shows promise. You know from previous conversation with the GM that he also worked his way through college. Which of the following biases could be influencing the GM's decision?
   1. Knowledge-of-predictor
   2. Halo effect
   3. Similar-to-me
   4. Gut feeling
6. Please refer to the following table for this question. A company advertised for 100 sales representative positions. They received 650 applications and hired the 100 employees as follows:

   

   Which group has the highest selection rate?

   1. Black
   2. Asian
   3. Caucasian
   4. Hispanic
7. Please refer to the following table for this question. A company advertised for 100 sales representative positions. They received 650 applications and hired the 100 employees as follows:

   

   In which groups has adverse impact occurred?

   1. Hispanic and Caucasian
   2. Caucasian and Black
   3. Hispanic and Native American
   4. Native American and Black
8. An Affirmative Action Plan must be completed by employers that meet which criteria?
   1. Private employers with 25 or more employees
   2. Government contractors and subcontractors with contracts of $10,000 or more in a 12-month period
   3. Government contractors with contracts of $2,500 or more in a 12-month period
   4. Government contractors with 50 or more employees and contracts of $50,000 or more each year
9. When a reduction in force occurs, the ADEA allows that protected employees may waive their rights under some circumstances. For the waiver to be valid, the protected employee must be allowed how long to review and consider the agreement?
   1. 7 days
   2. 21 days
   3. 45 days
   4. 180 days
10. Which of the following is not required by IRCA?
    1. That an I-9 form be completed for all new hires within 3 days of hire
    2. That employers comply with IRCA in good faith
    3. That I-9 forms be maintained for all employees
    4. That copies of documents presented for employment eligibility be maintained
11. In a self-audit of your employee's I-9 forms, several errors were found. These errors included incomplete sections, questionable documents accepted for verification, and over-documentation. Of the following corrective and prevention strategies, which should you recommend to your employer?
    1. Training for employees
    2. Recertification of all I-9 forms
    3. Enrollment in E-Verify
    4. Requesting updated documents from affected employees
12. Electronic storage of records must include specific controls to ensure which of the following?
    1. Online retrievability on demand
    2. No unauthorized access
    3. Ease of use
    4. Collaboration with an HRIS system
13. Strategic recruitment activities include all of the following except which one?
    1. Labor market analysis
    2. The design of total rewards packages
    3. Employee referral programs
    4. Defining the employer brand
14. Which of the following is a requirement of the Uniform Guidelines on employee selection procedures?
    1. Any selection tool that results in discrimination based on a protected class characteristic is unlawful.
    2. All selection tools must be job related and valid predictors of future success.
    3. Application forms must be the same for all employment classifications within the organization.
    4. Internet recruiting efforts are excluded from applicant-tracking requirements.
15. Which of the following acts requires federal contractors or subcontractors with contracts of $25,000 or more to list all nonsenior management job openings with state employment agencies?
    1. The Rehabilitation Act of 1973
    2. Executive Order 11375
    3. Executive Order 11246
    4. The Vietnam Era Veterans' Readjustment Assistance Act of 1974
16. With in the first 90 days of his employment, a security guard physically assaulted an alleged shoplifter. Upon investigation, it was found that he had been previously convicted of a violent crime, but the employer failed to conduct a background check. This is an example of which of the following?
    1. A violation of the Privacy Act of 1974
    2. Negligent hiring
    3. Failure to report
    4. A criminal act
17. Which of the following is the correct definition of “a major life activity” under the Americans with Disabilities Act?
    1. A physical or mental impairment
    2. Any activity that cannot be mitigated
    3. General activities and major bodily functions
    4. A physical or mental impairment that require the use of supplemental medication or prosthetics
18. Professionals, craft workers, and laborers/helpers have what in common?
    1. They are all job categories on the EEO-1 report.
    2. They are all classifications for defining exempt workers.
    3. They are all examples of types of labor unions.
    4. They are all examples of protected-class individuals.
19. Which of the following definitions is correct for the term job bidding?
    1. An internal job announcement
    2. Allowing contractors to submit requests for proposals
    3. The means by which internal employees can express interest in a job prior to it becoming available
    4. Ranking job applicants based on their comparative qualifications
20. Which of the following interview questions is unlawful?
    1. If you were an animal, what kind of animal would you be?
    2. Are you a U.S. citizen?
    3. Tell me about a time you disagreed with your boss about a course of action.
    4. Any job offer made will be contingent on a medical exam. Are you willing to undergo one if we offer you the job?