Notes

1. Start with the recognition that each individual “owns” his or her
career.
2. Create information and support for the individual’s own efforts for
development.
3. Recognize that career development is a relational process in which
the career practitioner plays a broker role.
4. Become an expert on career information and assessment
technologies.
5. Become a professional communicator about your services and the
new career contract.
6. Promote work planning that benefits the organization as a whole,
over career planning that is unrelated to organizational goals and
future directions.
7. Promote learning through relationships at work.
8. Be an organizational interventionist, that is, someone is willing and
able to intervene where there are roadblocks to successful career
management.
9. Promote mobility and the idea of the lifelong learner identity.
10. Develop the mind-set of using natural (existing) resources for
development.
11. Finally, HRD professionals must examine the employment practices
used by their organization, and determine the extent to which these
practice promote or work against the kinds of career management
behavior they want employees to engage in.

Career Development Practices and Activities

Organizations have a wide range of possible career development

tools and activities from which to choose. Some of these, such as self-
awareness workshops are intended primarily for career planning and
development, while others, such as recruitment, are a part of normal HR
management activities. A study of career development activities at large
organizations grouped career development activities into six categories:
employee self-assessment tools, organizational-potential assessment
processes, internal labor-market information exchanges, individual
counseling or career discussions, job matching systems, and development
programs.

197
Notes
Self-assessment Tools and Activities

Self-assessment activities, such as self-study workbooks or career

planning workshops, focus on providing employees with a systematic
way to identify capabilities and career preferences. Self-assessment is best
used as a first step in the process (i.e., at the stage of self-exploration)
rather than as the only activity in a career management program. Self-
assessment activities can be done by an individual alone, in groups, or in
some combination of the two. Effective self-assessment should (1) set the
stage for the self-assessment experience and (2) help an individual explore
his or her values, interests, skills, feelings, personal resources, goals for
timing, and decision-making styles. This information can help answer
questions such as “Who am I?” “What do I want in my life and my career?”
and “How Can I best achieve my career goals?”

Self-assessment workbooks provide information and a series of

exercises to help an individual discover his or her values, abilities, and
preferences. These workbooks can be purchased from a third party or
designed specifically for an organization. For example, Richard Bolles’
best-selling book What Color is Your Parachute? includes many self-
discovery exercises, along with information about various occupations and
job search skills. Similarly, Jqhn Holland’s The Self-Directed Search helps
an individual reader identify his or her interests and suggests possible
occupations that match these interests.

The advantages of self-assessment exercises developed by third-

party sources are that they are readily available and have been designed by
career development, experts. However, they are not designed to fit within
an organization’s specific HRD and career development strategy. The HRD
staff may need to make modifications, or develop supplementary material
to fill these gaps.

Workbooks designed to complement an organization’s overall

HRD strategy may do better at making employees aware of resources and
opportunities within the organization. Such workbooks can include a
statement of the organization’s career development policy and associated
procedures; information on the organization’s structure, career paths,
and job specifications; information about related training, education, and
development programs; and instructions on how employees can obtain

198
 Notes
further information, such as names, addresses, and phone numbers of
resource persons within the organization.

The activities included within a workbook can also be delivered

via computers and the Internet. For example, the U.S. Army uses a
microcomputer-based self- assessment system for officers called Officer
Career Information and Planning System (OCIPS), and the American
College Testing Program publishes a computer- based system called
DISCOVER.

Each of these programs provides career information and self-

discovery exercises similar to those found in workbooks. One of the
advantages of using self-assessment workbooks and computer programs is
that they can be completed at the employee’s convenience. However, it can
also be beneficial to provide self-assessment information in an interactive
group session where employees can share and discuss their insights. Career
planning and pre retirement workshops are well suited for this purpose.

Like other self-assessment approaches, career planning workshops

provide a structured experience in which participants develop, share, and
discuss personal information about their strengths, weaknesses, goals, and
values. Workshops can be made up of one or more sessions that focuses
on what career planning and management is all about. Self-discovery,
(reality testing of insights is gained during discussions with the facilitator
and other participants), identification of possible career directions and
opportunities, and career goal setting.

The advantages of workshops include the ability to reach many

people at once, opportunities to gain support from peers and to develop
networks, and exposure to other people’s ideas and reactions. In addition
the feedback from the facilitator and other group members may help the
individual recognize any self-deception or self- ignorance that might
go undetected if a self-assessment workbook were used alone. Potential
disadvantages include scheduling problems, difficulty in designing an
experience that suits for all the participants’ needs (especially if they come
from different organizational levels), and the possibility that some people
may be intimidated by the group setting.

199
Notes
Individual Counseling or Career Discussions

Individual career counseling involves one-to-one discussions

between the employee and an organizational representative. One survey
revealed that organizations primarily use HR professionals, supervisors,
or line managers as career counselors. Such counseling sessions can range
from brief, informal talks, to the annual performance evaluation discussion,
to a series of discussions with a manager or counseling professional.

Individualized counseling can answer a wide range of questions and

can either stand alone or supplement other career development activities.
The career counseling process can be viewed in three stages:

1. Opening and Probing — This stage establishes rapport and

determines the employee’s goals for the counseling session(s).
2. Understanding and Focusing — This includes providing assistance
in self- assessment and establishing career goals and strategies.
3. Programming — This stage provides support for implementing the
career strategy.

During this process, the counselor can suggest actions to the

employee and provide support and feedback about the ideas and results of
actions taken by the employee.

Counseling can be used for continuing employees as well as

employees who are approaching retirement, are about to be laid off, or
are terminated. Outplacement counseling focuses on assisting terminated
employee in making the transition to a new organization. The use
of outplacement counseling has become widespread since the 1980s,
especially in the wake of the downsizing, mergers, and acquisitions that
organizations experienced during this period. These sessions can focus on
job search skills, stress management, and career planning. Of all the forms
of individualized counseling, outplacement counseling is the most likely
to be performed by a counselor who is not an organization member. Many
consulting firms offer outplacement services for hire.

Preretirement counseling and workshops involve activities that help

employees prepare for the transition from work to nonwork. Retirement is
often filled with great uncertainty on both the personal and the financial

200
 Notes
level. Preretirement counseling programs typically involve discussions
about financial planning, social adjustment, family issues, and preparing
for leisure activities.

An important issue in individualized counseling centers on the

individual selected to be the counselor. In some ways, managers and
supervisors are well suited to serve as counselors. They are knowledgeable
about the organization and should be familiar with the employee’s
performance and his or her capabilities. In addition, they are in an ideal
position to offer support and to follow up on actions taken by the employee.
However, there are disadvantages in using the supervisors and managers
as career counselors.

First, unless they receive training in career development issues and

counseling skills such as listening, questioning, and clarification, they
may lack the skills to perform effective counseling. Second, even with
training some supervisors and managers lack the abilities and/or desire to
perform the task well. They may view it as an added burden and may not
be rewarded by the organization for performing it. Finally, employees may
be reluctant to discuss their career plans with current bosses or to take
advice from a non professional

If managers and supervisors are to be used as counselors, the following

steps should be taken:

1. Their role in the career development process must be clarified.

2. They must be trained to perform this role.
3. They must have the opportunity to discuss their own career
development concerns.
4. The role of counselor or developer should be incorporated into
the organizational reward system (e.g., included in managers’
performance evaluations).

One element of this approach has been used at Metropolitan Life,

where the performance evaluation process for managers and supervisors
includes an evaluation of how well they are doing in developing their
employees.

201
Notes
Internal Labor Market Information Exchanges and Job Matching
Systems

Employees engaged in career planning, need accurate environmental

information in addition to an accurate self-assessment. To this end,
the organization should provide employees with information about job
opportunities within the organization. Two commonly used methods for
doing this are job posting systems and the establishment of career paths.
Job posting is one of the most common career development activities.
It involves making open positions in the organization known to current
employees before advertising them to outsiders. In a typical job posting
program, the organization publishes the job description, job requirements,
pay range, and an application procedure for vacancies, and it provides a
form for employees to submit. The vacancies can be posted in a common
area, such as on a bulletin board reserved for that purpose. Increasingly,
such postings are done online, using the organization’s website or intranet.
Interested employees can then apply and be considered for the vacant
positions. Job posting systems are widely used in both government and
private organizations.

Job posting is a source of career information as well as a recruiting

and selection tool. Employees can learn skills and abilities which are
needed for various positions and can use that information as a springboard
for career development discussions and to establish career goals and
strategies. If they are administered openly and fairly, job postings can
help employees realize that they have a future in the organization, and
this can improve morale. However, job posting systems can also create
problems if employees suspect that only low-level or undesirable positions
are being posted, or if the job requirements listed are rigged to ensure that
an “inside” candidate is the only one qualified for a position.

A career path is a sequence of jobs, usually involving related tasks

and experiences that employees move through over time. For example, a
career path in a city police department may include the positions of patrol
officer, desk sergeant, lieutenant, captain, and chief of police. Career paths
communicate to employees possibilities for job movement. Together with
job descriptions and job specifications, these paths can aid the employee
in developing a career strategy.

202
 Notes
Career paths can be developed using either a traditional or a job/
behavioral approach. In the traditional approach, the career path represents
what has typically happened in the organization and usually represents
a consensus among managers about logical job movements within a
particular department. For example, if computer operators typically become
technical advisors before becoming supervisor, the career path will reflect
this. In the job/behavioral approach, the path is created by analyzing the
similarities and differences among jobs in the organization. For example,
if the positions of market research analyst and human resource research
analyst require similar skills, these jobs may be listed on the same career
path, even though they exist in different departments. The job/behavioral
approach can include jobs from throughout the organization and, as
a result, open up more possibilities for movement than the traditional
approach.

Some organizations use a dual career path or dual-track system in

which the Path to greater responsibility includes both management and
non-management tracks. The presence of non-management paths, with
relatively equivalent esteem and pay, can serve the needs of employees
who lack the skills or the desire to become managers. For example, the
Exploration Division of British Petroleum established dual career paths for
areas such as engineering and product development. Teams of managers
and employees established the system, and trained colleagues in how to
use the new system. Such an approach opens up more possibilities than the
traditional pyramid structure provides.

While career paths can help provide information to employees

about career progression possibilities, they may rely too heavily on what
the organization has typically done rather than on what it is likely to need
in the future. Given the changes in the career landscape that we noted
earlier in the chapter, vertical progressions may be unavailable, or they
may be shorter than what have traditionally been available, unappealing
to employees with spiral or transitional career concepts, or not in keeping
with the organization’s strategy and career culture. Therefore, career paths
should be developed within the context of each organization’s strategic
and human resource planning activities. In addition, care should be taken
to identify possible alternative paths such as lateral career movement. This
is included in the career grid approach, in which career grids, based on
job content, specify possible vertical and horizontal sequences of positions

203
Notes
employees may hold. The grids can communicate not only the potential
path but also the competencies required for each position in the paths
and developmental ideas for moving through these positions. From an
organizational viewpoint, this approach is beneficial in that it provide
skilled and valued employees (e.g., the organization’s top engineers
or accountants) with a career option that promises progression, while
allowing them to remain in their specialty area. It also provides a learning
and developmental incentive for employees who are not interested in
becoming managers.

Beyond using career paths and job posting, internal information

can also be supplemented by publishing booklets and flyers that inform
employees of career enhancement possibilities. Knowledge of available
resources such as upcoming training programs and tuition assistance
programs can help employees develop and implement their career
strategy.

Another source of internal labor market information is a skills

inventory. A skills inventory is a database that contains information about
employee skills, education performance evaluation, and career preferences.
It is often part of an organization’s human resource information system
(HRIS). HRD professionals can use this information during the needs
assessment phase to identify the capabilities of the workforce and
pinpoint any skill shortages that should be addressed. Skills inventory
information is usually collected from voluntary reports from employees.
Potential shortcomings of voluntary self-reports include the possibility
of incomplete, inaccurate, or outdated information, though the recent
growth in network and personal computer-based HRIS has made these
issues easier to deal with than they were earlier.

Organization Potential Assessment Processes

Organizations have a vested interest in ensuring that they have

individuals available who are ready to fill the key positions when these
positions become vacant. Many organizations evaluate the potential,
managerial, professional and technical employees. Those judged as highly-
potential employees can then be groomed” for these positions. Three
ways that potential assessment can be done through potential ratings,
assessment centers, and by succession planning.

204
 Notes
Potential ratings are similar to employee performance evaluations.
An employee’s manager or supervisor typically performs them. They
measure multiple dimensions, and include a summary or overall rating of
the employee’s potential for advancement. The main difference between
potential ratings and performance ratings is that potential ratings focus on
the future rather than the past or present. This method requires the rater
to judge whether an employee is likely to be successful in the job requiring
skills he or she may not currently use. Also, the results of potential
evaluations are unlikely to be made known to the employee. Ratings of
potential are subject to the same problems as performance evaluations
(i.e., rating errors and biases). Raters should be trained in the proper way
to conduct such an evaluation.

Assessment centers, which can be used as part of the employee

selection process, can also be used to assess potential for advancement.”
In an assessment center, small groups of employees perform a variety
of exercises while being evaluated by a group of trained assessors. The
exercises can include simulations, role-plays, group discussions, tests, and
interviews. The exercises should measure relevant skills and aptitudes for
a given position. The assessors are typically managers who are one or two
organizational levels above those being evaluated (assess). Assessors should
be specifically trained for this task. The assessors write a detailed report
on each assessee and usually make an overall judgment about the assessee’s
promotability. When used for developmental purposes, the intensive
assessment fallback is provided to the employee to increase self-awareness.
The feedback from a developmental assessment center can be used by
the employee to develop career goals and a plan for future development.
While career development assessment centers can be expensive to use,
they provide a rich source of data. Care should be taken in designing
assessment center procedures to include assessment of skills that can be
developed in a reasonable amount of time and to include exercises that
permit multiple opportunities to observe participants in each dimension.
Examples of this approach include developmental assessment centers at
AT&T and Kimberly Brothers Manufacturing Company.

Succession planning is a third way of conducting potential

evaluations. This process is most often done for upper-level management
positions. It requires senior managers to identify employees who should
be developed to replace them. Information generated during succession

205
Notes
planning may not be communicated to the employee. If potential
evaluations are made known to the employee and his or her superiors,
this information can be used to create a self-fulfilling prophecy. That is, if
managers believe the employee has a high potential for advancement, they
may be more likely to evaluate the person favorably and promote him or
her more quickly than actual performance warrants. If succession plans
are not communicated to the employee, the organization runs the risk
of a mismatch between the employee’s career plans and its plans for the
employee. Making this information available to the employee can ensure
that the employee develops realistic career plans and reduces the chances
that the person will refuse the position.

In the case of management development, the notion of succession

management can be seen as a way for succession planning to better
serve organizations in a rapidly changing environment. One of the main
properties of succession management is viewing the goal of the process as
one of creating a cadre of individuals who have the competencies needed
to work as part of a senior management team. Future competencies, in
the form of a “leadership template,” are used as the criteria toward which
group of individuals should be developed. The role of senior management
is not to identify specific individuals to replace them, but to identify
developmental opportunities, create challenging assignments that are
central to the business and create a team/network orientation, and mentor
and serve as role models for those who are being developed.

Developmental Programs

Career management includes job rotation, in-house programs,

external workshops and seminars, tuition assistance and reimbursement
plans, and mentoring programs, etc. These programs provide employees
with opportunities to learn new ideas and skills, thus preparing them for
future positions as well as introducing new challenges.

Job rotation involves assigning an employee to a series of jobs

in different functional areas of the organization. These assignments are
typically lateral rather than vertical moves, and can involve serving on
task forces or moving from line to staff positions. Job rotation is a good
way to introduce variety into an employee’s career. In addition, it provides
the employee with a chance to learn and use new skills and to better

206
 Notes
understand different organizational functions. It can also serve to help the
employee build networks within the organization, and be better prepared
for future promotion opportunities, when they become available.

Professional non-managerial employees were more interested

in rotation than others. With regard to implementing job rotation, care
should be taken to ensure that the job assignments in job rotation offer
developmental opportunities, rather than just the chance to do something
different.

Mentoring refers to a relationship between a junior and senior

member of the organization that contributes to the career development
of both members. Mentoring relationships can be important from both
a life development and a career development perspective. From a life
development perspective, recall from Levinson’s era approach to adult
development that young adults seek to establish meaningful relationships,
while middle-aged adults often want to make an impact on the generation
to follow them. From a career development perspective, the younger
employee wishes to become established in the organization, while the
middle-aged employee wants to remain productive at work. From either
perspective, the mentoring relationship serves the needs of both members.

The mentoring relationship serves both career and psychosocial
(e.g., social sup­ port) functions. The mentor provides the protégé
with career support — by opening doors, “teaching the ropes” of the
organization, creating potential opportunities to demonstrate competence,
enhancing visibility, and ensuring that the protégé has challenging work.
The protégé provides the mentor with a meaningful, mutually reinforcing
relationship that demonstrates the value and commitment of both parties
to the organization. The mentor has a chance to serve as a role model
and share what he or she knows with someone who can benefit from such
knowledge. In return, the mentor receives respect, support, and in many
cases, friendship.

In many organizations, mentoring relationships are formed as a

result of the parties’ mutual attraction. Some organizations, such as Apple
Computer, Federal Express, and the Federal Reserve Bank of Chicago, have
created formal mentoring programs in which mentors and protégés are
paired by the organization and provided with support for the relationship.

207
Notes
Research has shown that mentoring can yield numerous organizational
benefits, including facilitating the socialization of new members into the
organization, reducing turnover, minimizing midcareer adjustments,
enhancing transfer of beneficial knowledge and values, and facilitating the
adjustment to retirement.

Mentoring relationships are complex. While they serve a variety

of needs for both mentor and protégé, they are also subject to potential
limitations and problems. Limitations of formal mentoring programs
include the small number of mentor pairs that they can accommodate,
and such unintended negative consequence as dissatisfaction with the
relationship and negative feelings of those not involved in the program. It
is not clear whether informal mentoring is superior to formal mentoring
in terms of the depth and scope of the mentor-protégé relationship. While
one research study found that the protégés in informal relationships
received more career-related support and had better career outcomes,
another study found no difference. Recent research by Eby and colleagues
sought to understand negative experiences that protégés have with their
mentors.

It is also not clear as to the extent to which problems exist in

cross-gender mentoring relationships. Earlier writers suggested that such
problems exist. Researches supporting this contention has reported the
following findings:

1. Concern exists between the parties about intimacy and sexual

attraction.
2. There is an inclination for men and women to rely on sex-role
stereotypes.
3. Dissatisfaction with the role-modeling aspect of the relationship
may be felt.
4. The relationship is subject to public scrutiny (e.g., jealous spouses,
office gossip). Peer resentment may occur.

More recent studies have found no gender differences in the

amount of career mentoring that protégés receive. It may be that in male-
dominated occupations, gender role has more to do with differences in
the amount of mentoring received than biological sex. Recent researches

208
 Notes
also have found that women are as good as men to become mentors,
report intentions to mentor, and to see the costs and benefits of entering a
mentorship relations similarly.

Research on cross-racial mentoring suggests another source of

potential problems. Thomas found that black protégés with white mentors
reported less satisfaction with the mentoring relationship and less
support than did members of same-race mentoring relationships. Even
within same-race and same-sex mentoring relationships lack of support
from the organization and incompatibility of the parties can undermine
the relationship. For example, the way that participants in a cross-race
developmental relationship prefer to deal with racial issues affects the
dynamics of such relationships. When both parties share the same strategy
for addressing racial issues, the relationship has both career advancing
and psychosocial elements (i.e., it becomes closer and more personally
supportive). When the parties prefer different strategies for dealing
with racial issues, the relationship is primarily oriented toward career
advancement only, and lacks the psychosocial element.

Given the problems that can occur, some authors have questioned
the value of mentoring. Clawson stated that mentoring is not essential
and that employees can gain some of the same benefits by learning from
their current supervisors, while seeking sponsorship at the appropriate
time from someone else. Kram suggests that it may not be necessary for
employees to look for everything that mentoring can provide in a single
relationship. In addition, relationships with peers can also provide some
of the same functions that mentors do (e.g., information career strategies,
emotional support, personal feedback), and may be more suitable for
individuals without mentors or for those who do not want mentors. Recent
writing recommends the value of a mentoring network, where employees
foster relationships with multiple mentors.

Given the potential benefits for both the individual and the
organization, we believe mentoring is a viable and appropriate career
development strategy. If an organization chooses to develop a formal
mentoring program, three conditions seem to increase the chances of
success:

209
Notes
1. The program should be clearly linked to business strategy and existing
HR policies and practices, so as to increase the chances that potential
participants and senior management will accept and actively support
the program.
2. Core components of the program (objectives, guidelines, training
and education, communication strategy, monitoring and evaluation,
and coordination) should be designed for effectiveness rather than
expediency.
3. Voluntary participation and flexible guidelines are critical to success.
4. In addition, formal mentoring programs should be used as one part of
an organization’s overall development strategy. Mentoring should be
tied to strategic business needs and take advantage of natural learning
opportunities in the organization, as well as HR systems that encourage
mentoring.

Issues In Career Development

Several other issues are to be considered while formulating or

modifying an organization’s career development program. These include
generating career motivation, career plateauing, career development for
nonexempt workers, and career development without advancement. We
will discuss each of these issues briefly here.

Developing Career Motivation

Developing career motivation is a significant career management

goal. According to Manuel London, career motivation affects how people
choose their careers, how they view their careers, how hard they work in
them, and how long they stay in them. London sees career motivation as
a set of characteristics grouped into three facets: i) career resilience, ii)
career insight, and iii) career identity. Each of these facets is defined in
Table A person can have a high, moderate, or low level of career motivation
depending on his or her position in each of these categories. For example, a
person with high career motivation will continue to pursue career goals in
the face of obstacles and setbacks (career resilience), formulate and pursue
realistic career goals (career insight), and be highly involved in work and
aggressively pursue career goals (career identity).

210
 Notes
While career motivation is partly determined by an individual’s
life experiences, career activities and practices can help develop a person’s
career motivation. For example, self-awareness workbooks and personal
journals can be used to build career insight. Because career motivation
can affect both decision making and commitment to one’s career, it would
be beneficial for organizations to offer career development activities to
enhance such motivation. Table provides some suggestions for how this
can be accomplished.

1. Career resilience. The extent to which people resist career barriers

or disruptions affecting their work. This consists of self-confidence,
need for achievement, the willingness to take risks, and the ability
to act independently and cooperatively as appropriate.
2. Career insight. The extent to which people are realistic about
themselves and their careers and how these perceptions are related to
career goals. This includes developing goals and gaining knowledge
of the self and the environment.
3. Career identity. The extent to which people define themselves
by their work. This includes involvement in job, organization,
and profession and the direction of career goals (e.g., toward
advancement in an organization).

Definitions of the Three Facets of Career Motivation

Career motivation can be important in addressing the issues facing

workers who have lost their jobs because of downsizing, layoffs, or some
personal issues or setbacks. Efforts to redeploy such workers can be more
effective if career motivation issues are addressed, whether the methods
are government and community programs to assist unemployed workers
to obtain jobs, or retraining for displaced employees or joint union-
management retraining programs, or internal contingent workforces.
London offers a variety of suggestions concerning how managers and
executives can address career motivation issues to successfully redeploy
displaced workers, and how organizations can support career motivation
in older workers.

211
Notes
The Career Plateau

The pyramidal structure of many organizations together with a

shrinking number of management positions typically means that a time
will come in an individual’s career when he or she will no longer be able
to “move up” in the organization. In addition, career progress is not likely
to be a continuous upward journey, but rather one that includes periods
of movement and periods of stability. These factors contribute to what
has been termed as a career plateau. A career plateau has been defined as
“the point in a career where the additional hierarchical promotion is very
low”. Early writing on career plateaus suggested that this is a traumatic
experience for many employees (especially those who desire career
growth), accompanied by feelings of stress, frustration, failure, and guilt.
More recent writing suggests that a plateau can also be seen as a “time of
change, transition, reevaluation, and reflection”.

1. To support career resilience

a. Build employees’ self-confidence through feedback and.positive
reinforcement.
b. Generate opportunities for achievement.
c. Create an environment conducive to risk taking by rewarding
innovation and reducing fear of failure.
d. Show interpersonal concern and encourage group cohesiveness
and collaborative working relationships.
2. To enhance career insight
a. Encourage employees to set their own goals.
b. Supply employees with information relevant to attaining their
career goals.
c. Provide regular performance feedback.
3. To build career identity
a. Encourage work involvement through job challenge and
professional growth.
b. Provide career development opportunities, such as leadership
positions and advancement potential.
c. Reward solid performance through professional recognition
and/or financial bonus.

212
 Notes
Methods for Increasing Career Motivation

The empirical research on the consequences of career plateaus has

been mixed, with some verification of negative consequences of plateauing,
coupled with other data suggesting that employees at such a plateau can be
happy and productive. At least two explanations for these mixed findings
have been offered. First, Feldman and Weitz stated that the factors that
lead to a plateau affect the consequences of the plateau.

For example, if employees become plateaued because they lack the

skills and ability to advance, they will likely exhibit poor performance and
job attitudes. Alternatively, if the plateau occurs because of self-imposed
constraints or a low need for growth, the employee will continue to perform
well and have positive job attitudes.

Enrichment: Career Development Without Advancement

.
Many organizations find themselves faced with the prospect of
downsizing their workforces and reducing the numbers of management
positions in response to competition and changing business conditions.
However, even with fewer employees, organizations still have to engage in
career development activities, because HR needs will change as business
strategy and technology changes.

These forces increase the likelihood that organizations will have to

develop career development programs, without being able to offer upward
movement or the promise of job security as benefits to employees. Instead,
career development efforts will have to focus on enriching employees in
their current jobs or areas of expertise if they are to increase employee
satisfaction, maintain the skill base of the organization needs, and offer
employees a sense of career security by providing them with the best
chance of gaining meaningful employment if they are laid off.

Career development options within an enrichment strategy include:

1. Certification programs and mastery paths that specify selection

criteria and identify performance expectations, and training
requirements to move through various levels of expertise within a
job

213
Notes
2. Retraining programs
3. Job transfers or rotation
Enrichment programs raise the level of skills and professionalism
of the workforce, and they can increase employees’ sense of self-esteem
and self-determination in guiding their own careers. Given the changes
that are occurring in the organizational landscape, enrichment and
other career development practices that encourage self-determination,
continuous learning, and employability are especially important.

Delivering Effective Career Development Systems

It may be clear by now that any HRD program has the best
chance of succeeding if attention is paid to performing through needs
assessment, design, implementation, and evaluation. The same is true
for career development programs. Our earlier discussion highlights some
of the relevant issues in the design and implementation of an effective
system. Table provides a systematic approach to creating and delivering
an effective career development system.

Using this approach, it is critical to obtain senior management

support and to conduct and evaluate pilot programs before implementing
a full-blown program. Rapid changes in the environment (e.g.,
demographics, technology, and competition) have led to changes in
organizational operations, which then has an effect on employees (e.g.,
the advent of downsizing). Managing career development efforts well in
the current turbulent environment makes it even more important that
such activities be tied to an organization’s strategic plan. This means
that needs assessment data should include organization-level data on
goals, strengths, weaknesses, resource availability, organizational climate,
and on the current human resource plan. Career development, like all
HRD activities, should fit into the overall HR strategy. i.e. Recruitment,
selection, compensation, benefits, and HRD activities have an impact on
career development, and all can be used to facilitate the process.

HRD practitioners should also consider benchmarking their career

development practices by examining effective approaches used by other
organizations. Career development practices can also be benchmarked
through discussions with other professionals and visits to leading
organizations. Many organizations are finding that career management

214
 Notes
works best when activities are coordinated, within an integrated career
development system. Examples of organizations that have effectively used
this approach include 3M, Bechtel Group, Eastman Kodak Company, and
Boeing.

Identify Needs
1. Link career development to business strategy.
2. Align employee and organizational needs. Build a vision for change
Build a Vision for change
3. Build systems and link them to other management and HR
systems (e.g..,quality initiatives orientation, performance evaluation,
compensation).
4. Use a variety of tools and approaches.
Develop a plan for Action
5. Create a corporate infrastructure but implement career development
systems in individual business units or divisions.
6. Ensure line manager participation starting with system development
Implement for Impact and Longevity
7. Hold line managers accountable and give them the skills they need to
fulfill their responsibilities.
8. Follow up initial implementation with a series of activities that keep
career development salient (e.g., information sharing, career action teams).
Evaluate and Maintain Results
9. Evaluate.
10. Continuously improve the career development effort.
11. Maintain high visibility and ongoing communication of career
development.

Systems approach to creating a career development program

Adopted from Werner & DeSimone (2007). Human Resource Development, 4e. Thomson
South-Western.

Another issue in developing and delivering career development

215
Notes
activities is the attitude held by many people that career development is
primarily an individual’s responsibility, and therefore this is not a beneficial
area for organizational activity, this takes the individual responsibility
notion to an unhealthy extreme that could encourage employers to abdicate
any involvement in the career development process. This attitude must be
overcome if a career management system is to gain wide acceptance.

Summary

Career is best described as the pattern of work-related experiences

that is spread through course of a person’s life. Career development can
be defined as an ongoing process by which individual’s progress through
a series of stages, each of which is characterized by a relatively unique set
of issues, themes and tasks. Career model includes eight activities: career
exploration, awareness of self and environment, goal setting, strategy
development, strategy implementation, progress toward the goal, feedback
from work and non work sources, and career appraisal. Organization
oriented career management models share the idea that the organization’s
structure and needs should guide the organization’s career management
system. Career management includes job rotation, in-house programs,
external workshops and seminars, tuition assistance, reimbursement plans,
and mentoring programs. A career plateau has been defined as the point in
a career where the likelihood of additional hierarchical promotion is very
low.

The systematic approach for creating Career Development

Programme would involve; identifying needs, Building a vision for a
change, developing a plan for action, implement the plan for impact and
longevity analysis, evaluating and maintaining results.

Self Assessment Questions

1. ‘Evaluating HRD programs will enhance its effectiveness’ “Do you

agree with this statement? If yes state how is it?
2. Explain the models and framework of HRD evaluation
3. Discuss the methods of data collection
4. How do you evaluate the cost of training?
5. Discuss HRD applications

216
 Notes
6. What do you mean by Realistic Job Review? How does it help the
individual and organisation
7. Define career concepts
8. Define career development. Explain the career development model
9. What is meant by career planning and career management
10. Explain the stages of career development model
11. Describe a career development programs

CASE STUDY

Vikas Pvt. Ltd. An engineering firm with 50 years of success

behind it has become a household name in India for its quality products.
Although it had started its business in a modest way, it became a dominant
supplier and engineering and equipments of critical nature needed by the
transporter and engineering industries in a short span of 10 years. Later,
with the advent of industrial planning initiated by the government of
India, and by virtue of its position in the engineering business, it made
raped strides in many product lines, including electronic.
Mr. Vasudeva, an MBA from Harvard with a mechanical engineering
background, was in charge of the Mechanical Engineering section since
1964.He was promoted as the Chief Executive of the Division in 01 April
1974. This was in recognition of his outstanding contribution to the
development of new product lines, especially in the area of compressor -
cum- vacuum pumps. In fact, the firm earned a good name in the export
market and also bagged an export award during 1993-94. Moreover, Mr.
Vasudeva was known for his honesty, integrity, leadership and decisiveness.
He was brilliant engineer and always worked hard to be a step ahead
of his competitors in the field. He was virtually a think – tank and the
management were very proud of him.

For the last six months, he spent long hours redesigning the export
model-T compressor – cum- vacuum pump set. In his discussions with his
foreign collaborators, he was convinced that with a little more effort, the
company could successfully redesign the model, thus saving production
costs as well as improving the efficiency by 16 – 20 per cent. He depended
entirely on Mr., Hanuman, a foreman of exceptional ability and tenacity.
Moreover, Mr. Hanuman was good at human relations and commanded

217
Notes
respect from his immediate subordinates. Since the fabrication of the new
model was in its infancy, everyone concerned felt it undesirable to let
person working under him that this matter would not be brought to the
notice of Mr. Keshav, the new works manager and recent induction into
the company. They were one with their new job and always delighted in
any words of appreciation from their chief, Mr., Vasudeva, when he visited
the shop floor.

Mr. Keshav was young and energetic with a flair for Mechanical
Engineering products. He had no knowledge of management, but had
attended a few courses in material management and productivity control.
He always expected others to proper supervisory activities, knew his job
well and always expected others to perform their duties as scheduled. He
could never tolerate indiscipline. His colleagues had nicknamed him “the
real fire-brand” of the company.

One evening, before going home; Mr. Keshav went to the shop floor
where he found six machinists and helpers engaged in fabricating a spare
part of the pump set as per the order of Mr. Vasudeva. Mr. Keshav was
happy to see people working under him so involved in their working.

However, his enthusiasm vanished in morning visit when he saw

that, what they were engaged in was not a normal part of their work.
“Damn it. What the devil are you up to?” He asked in annoyance. The
workers were perplexed; they did not know what to say. However, Mr.
Hanuman soon appeared on the scene and explained the on-going project
and the benefits its success would bring.

The works manger got every angry with Hanuman and reprimanded
him severely. In fact, he was admonished in the presence of his subordinates
and technicians working on the shop- floor. Mr. Hanuman felt confused
and hurt. As though this was not enough he received a show cause notice
from the works manager demanding an explanation within 24 hours. This
was adding insult to injury. He had no alternative but to report to the
chief, but to his chagrin, he found that Mr. Vasudeva had already left on
foreign tour, and was expected back a month later.

Mr. Hanuman felt that he was approaching a dead end; harassed,
he went from pillar to post but no help or advice was forthcoming.

218
 Notes
Exasperated and hurt he went to the General Manager and handed in his
resignation letter. Mr. Hanuman was known for his honesty, simplicity and
hard work. Only by the dint of hard he developed his skills and risen to the
position of foreman from the level of an ordinary helper within a span of
10 years. His one weakness was that he was very sensitive and would never
compromise on issues affecting his personality and dignity. On the whole
he was respected by all. News of his resignation spread like wild fire. The
workers, technicians and others sympathetic to his cause were alarmed
and eagerly awaited the outcome.

Questions

1. Was the GM right in accepting Mr. Hanuman “s resignation?

2. Was it well advised to keep Mr. Keshav in the dark about the ongoing
project, especially since he was works manager?
3. Did Mr. Keshav act hastily in reprimanding Mr. Hanuman?
4. What action should be taken now?
5. What repercussion would this incident have on all involved?

CASE STUDY

Like several other HR systems at the Hotel Paris, the compensation

program was unplanned and unsophisticated. The company has a narrow
target range for what it will pay employees in each job category (front-desk
clerk, security guard, and so forth). Each hotel manager decides where to
start a new employee within that narrow pay range: The Company has
given little thought to tying general pay levels or individual employee’s pay
to the company’s strategic goals. For example, the firm’s policy is simply to
pay its employees a “competitive salary”, by which it means about average
for what other hotels in the city are paying for similar jobs.

Lisa knows that pay policies like these may actually run counter to
what the company wants to achieve strategically, in terms of creating an
extraordinarily service-oriented workforce. How can you hire and retain
a top workforce, and channel their behaviors toward high-quality guest
services, if you don’t somehow link performance and pay? She and her
team therefore turn to the task of assessing and redesigning the company’s
compensation plan. So, even a casual review by Lisa Cruz and the CFO

219
Notes
made it clear that the company’s compensation plan wasn’t designed to
support the firm’s new strategic goals.
The current compensation policies had also bred what one hotel
manager called an “I don’t care” attitude on the part of most employees.
What she meant was that most Hotel Paris employees quickly learned that
regardless of what their performance was, they always ended up getting
paid about the same as employees who performed better and worse than
they did.

Lisa and the CFO knew they had to institute a new, strategic
compensation plan. They wanted a plan that improved employee morale,
contributed to employee commitment, reduced employee turnover and
rewarded (and thus encouraged) the sorts of service-oriented behaviors
that boosted guest satisfaction. After meeting with the company’s CEO
and the Board, the CFO gave Lisa the go-ahead to redesign the company’s
compensation plan, with the overall aim of creating a new plan that would
support the company’s strategic aims.

Questions

1. Discuss the strategic integration of compensation plans at Hotel

Plans, which will influence employee performance.
2. Would you suggest Hotel Paris implement a competency-based pay
plan for its non-managerial staff?
3. Devise a ranking job evaluation system for the Hotel Paris’ non-
managerial employees (housekeepers, valets, front desk clerks,
phone operators, waitstaff, groundskeepers and security guards).

CASE STUDY

Vishal Components Limited manufactures a wide range of

automotive components. It has a workface of 1500 including 250
supervisors and executives. Performance appraisals of these employees are
being carried out annually. The parameter used for performance appraisal
is sense of responsibility, superiors’ dependability on subordinates,
initiative, regularity and punctuality, community activity and potential for
development to take higher positions. All these factors are given equal

220
 Notes
weight age .the performance appraisal has three objectives: to grant annual
increment, to determine promotability and to assess training needs.
In the year 2010-11, some supervisors and executives were not given
any increment because as per performance appraisal, their total scores were
below standard. The overall low scores were due to community activity
and potential for development which were given equal weightage along
with other factors. On the stoppage of annual increment, the aggrieved
supervisors and executives represented their case to the managing director
of the company and contended that the entire performance appraisal
system was faulty. They were very much against the inclusion of community
activity and potential for development in the performance appraisal
meant for giving pay raise. They argued that all aggrieved supervisors and
executives should be given regular annual increments and time-bound
promotions .The system would be more objective, air and free from undue
biases.

Questions

1. As human resource manager, how will you defend the existing

performance appraisal system of the company? Will you like to
incorporate changes, if any? If yes, what would be these changes
and why?
2. Should there be separate appraisal criteria for appraising supervisors
and executives? If yes, where are such differences needs?
3. What actions should be taken to the representation made by the
aggrieved supervisors and executives?

****

221
222
 Notes

UNIT IV

Unit Structure

Lesson 4.1 Employee Counselling and Wellness Services

Lesson 4.2 Employee Wellness and Health Program

Lesson 4.1 - Employee Counselling and Wellness Services

Learning Objectives

After reading this lesson, you may be able to

➢➢ Understand the Employee Counseling Services

➢➢ Elaborate on Employee Counseling Program
➢➢ Understand the Link Between Employee Counseling and Coaching
➢➢ Describe Employee Assistance Programs

Introduction

Rising healthcare costs are one of the reasons for which

organizations are so interested in helping employees with their personal
problems. In addition to reducing healthcare costs, employers’ efforts
to improve employees’ well-being are also purported to reduce workers’
compensation costs, tardiness, absenteeism, turnover, time lost in work
because of illness and injury, and accidents while enhancing morale,
loyalty, creativity, productivity, decision-making effectiveness in labor
relations, recruiting, and company image. Given the potential gains, it
is not surprising that organizations are looking for ways to enhance the
well-being of their employees. Another factor promoting organizational
interest in employees’ well-being is a shortage of skilled workers.

223
Notes
Employee Counseling Services

Organizations have adopted the HR strategy that it is better to

retain and help workers with problems than to discard them and be faced
with recruiting new ones. This extra attention to retaining employees has
persisted, even when many companies simultaneously face the need to
downsize some portion of their business. How are organizations addressing
the issue of employee well-being? In addition to traditional HR activities
like training and motivational programs, organizations are also making a
major investment in providing employee counseling services as a way to
promote employees’ well-being.

In the literature describing employee counseling services, the term

counseling has been used to refer to a variety of activities from informal
discussions with an employee to intensive one-to-one discussions with a
trained professional with a view of releasing the mental tension that has
affected an employees. Dale Masi’s four-part definition of mental health
counseling provides a good general description of some of the different
types of activities that are typically involved in this activity at the workplace:

(1) a relationship established between a trained counselor and the

employee; (2) thoughtful and candid discussion of personal problems
experienced by the employees; (3) an appropriate referral that secures the
necessary assistance; and (4) the provision of short-term counseling, when
a referral is not necessary.

Employee counseling services have existed since the turn of the

century For example, in 1917, Macy’s Departmental Store established an
employee assistance program to help workers in their personal problems,
and by 1920, over 100 of the largest companies in the United States employed
a welfare secretary, and a part of this individual’s responsibilities included
employee counseling. Recently, growth in wellness-related activities has
been explosive.

Estimates in the early 1990s suggested that there were over 20,000
employee assistance programs, which dealt with abuse and mental health
problems, and over 50,000 health promotion programs, which typically
focus on physical health and well-being.

224
 Notes
Employee Counseling as an HRD Activity

Employee counseling serves the same goal as any other HRD

activity: to ensure that each employee is a positive contributor to the
organization’s effectiveness, and that he or she will continue to contribute
in the future. Employee assistance and health promotion programs often
use the same techniques as other HRD interventions. These techniques
include workshops, role playing, behavior modeling, discussions,
lectures, coaching, and audiovisual presentations. In addition, the
process of delivering counseling services is the same as that of the other
HRD interventions, and includes needs assessment, planning/design,
implementation, and evaluation. Designing, delivering, and evaluating
employee counseling programs offer ample opportunity for HRD
professionals to use their expertise (i.e., the “core” systems framework).

The Link Between Employee Counseling and Coaching

Much of the focus of coaching analysis and discussion is on the

employee’s work performance, and how this can be improved. Clearly,
however, many work performance problems are related to employees’
personal lives, for example, an employee’s habitual tardiness may be linked
to that employee’s use of drugs or alcohol outside the work plane. The
focus of employee counseling is on addressing these personal problems,
particularly as they impact employee work performance. In reality,
coaching and counseling are often intertwined, as supervisors may find
themselves confronted with employee personal problems as they seek to
address a performance issue with an employee.

However, for most employee personal problems, especially those

that are more serious (e.g., depression, substance abuse), supervisors
are generally encouraged to provide early identification and referral to a
trained professional or counseling service, and do not try to solve or resolve
the employee’s problem by themselves. Most managers and supervisors are
not properly trained to deal with serious employee personal problems,
and there are also legal issues to consider employee counseling. A trained
professional is most likely to be aware of the legal issues involved, and to
ensure that any action taken with an employee comply with all relevant
laws and regulations.

225
Notes
An Overview of Employee Counseling Program

Organizations use a wide variety of activities and programs to

help ensure the emotional and physical health of their employees. These
activities range from health- risk appraisals to on-site counseling and stress
reduction workshops, as well as other ways to promote employee health.
They may take the form of a one-session discussion, or a series of sessions,
or an ongoing organizational activity. In this section, the components of a
typical program, the providers of such services, and characteristics of an
effective counseling program is discussed.

Components of the Typical Program

While employee counseling programs vary in terms of problems

addressed and specific techniques used, six activities are typical of such
programs: (1) problem identification, (2) education, (3) counseling, (4)
referral, (5) treatment, and (6) follow-up.

Problem Identification

Problem identification usually involves the use of a screening device

(e.g., a questionnaire or diagnostic test) and/or the training of employees
and supervisors in the identification of problems. For example, employees
may volunteer to have their cholesterol level assessed as part of a wellness
program, or supervisors may be trained to identify the behavioral patterns
that indicate possible. Table provides an example of a screening device
concerning alcohol use.

Questions

1. On average, how often do you drink beer, wine, liquor, or other

beverages containing alcohol?
2. How many drinks do you usually have? On days when you drink
(One drink equals a 12-ounce beer, a 4-ounce glass of wine, or a shot
of liquor.)
3. During the past thirty days, on how many days did you have five or
more drinks on the same occasion?
4. In the next six months, do you want to reduce the amount of alcohol
that you drink?

226
 Notes
Feedback

1. Low-risk drinking is using alcohol in a way that does not harm your
health. Research suggests that on any one day, more than four drinks
for men and more than three for women can cause problems. Having
more than twelve drinks a week can cause problems over time. Also
drinking alcohol every day may cause problems. Unless you limit
your intake to one drink each day, you are advised to drink no more
than four to five days a week.
2. Risk assessment categories:
c. Low risk — drink less than seven days a week and no more than
one to two drinks per occasion
d. Moderate risk — drink up to three to four drinks per occasion or
drink every day
e. High risk — usually or occasionally drink five or more drinks per
occasion

Education

Education typically includes providing information about the

nature, prevalence, likely causes and consequences of the problem, and
ways the problem can be prevented. For example, a program focusing
on hypertension (high blood pressure) might use pamphlets, videos, or
a lecture to raise employees’ awareness of the problem and how it can be
treated or prevented.

Counseling

A counseling involves a person with whom employees can discuss

difficulties and/or seek further help. The type of counseling can vary from
a frank discussion with a supervisor about work-related performance
problems to meeting with a mental health professional skilled in diagnosing
and treating for problems such as depression or substance abuse.

Referral

Referral involves directing the employee to the appropriate

resources for assistance. For example, an employee who shows signs

227
Notes
of cocaine addiction may be referred to a drug treatment facility that
specializes in treating for that addiction.

Treatment/Intervention

Treatment includes the actual intervention to solve the problem.

For example, a nutrition program may include cooking classes or the
offering of healthy foods in the cafeteria and nutritious snacks in vending
machines.

Follow-Up

As with any other HRD activity, some form of monitoring is needed

to ensure that the employee is carrying out the treatment and to obtain
information on employee progress. For example, if the employee agrees to
seek alcohol abuse treatment as part of an agreement to improve his or her
performance, it is necessary to determine whether the employee actually
attends and completes treatment.

Clearly, not all employee counseling programs make use of all the
six types of activities. Which activities an organization uses depends on
the type of problem addressed, the appropriate response to the problem,
and the resources the organization chooses to commit to the program.
Take the example of a program to address employee physical fitness.
One organization may choose to renovate part of its facility or build a
new structure to house a fitness center, complete with a trained staff,
locker room, showers, athletic courts, and exercise equipment. Another
organization may offer employees free or reduced-fee membership in a
local health club. An even less expensive option would be to make fitness
information available and encourage employees to exercise on their own
time.

Providing Service

An organization may offer a counseling program in-house or

contract it out. In- house (or on-site) programs involve using current
employees or hiring specialists, such as psychologists, social workers, or
other trained individuals, to operate the program. Each approach has a
number of advantages and disadvantages. Advantages attributed to in-

228
 Notes
house programs include (1) internal control of the program, (2) familiarity
with the organization (e.g., its policies, procedures, and workforce
characteristics), (3) better coordination of treatment and follow-up,
(4) a sense of ownership of the program, and (5) greater awareness and
credibility with supervisors. However, disadvantages of in-house programs
can include (1) real or perceived problems with confidentiality, (2) lack of
resources needed, (3) reluctance of some employees to use the service (e.g.,
a vice president of finance may be reluctant to go to a lower-level employee
to admit a drinking or marital problem), and (4) possible limitations in
staff skills and expertise.

An advantage of contracting the service out is that the organization

can rely on the services of trained professionals whose business is to treat
the problem in question. In addition, confidentiality may be easier to
maintain, cost may be lower, and there may be better identification and
use of community resources. Disadvantages include the lack of on-site
counseling, possible communication problems, and lack of knowledge of
the organization and its employees. The advantages and disadvantages of
both the approaches are discussed.

Characteristics of Effective Employee Counseling Programs

Communicating the program’s services to managers, supervisors,

and employees, and following up with them is critical in getting
organizational members to use it. For example, one survey found that
employee willingness to use an employee assistance program was related to
their familiarity with and trust in the program, and the personal attention
provided by it. Similarly, a study of four wellness programs found that
programs using systematic outreach and follow-up counseling were more
effective than those that did not.

It is also important that managers and supervisors receive training

in identifying problems and in how to counsel or refer employees to seek
treatment when needed. In many counseling programs, especially those
dealing with addiction and mental health, the supervisor’s role in helping
the employee seek treatment and supporting the treatment effort is critical
to success. Other necessary ingredients for an effective counseling program
include:

229
Notes
1. Top management commitment and support
2. A clearly written set of policies and procedures outlining the
program’s purpose and its function within the organization
3. Cooperation with local union (s), if they are present in the
organization
4. A range of care (e.g., referral to community resources, follow-up)
5. aAclear and well-enforced policy concerning employee
confidentiality
6. Maintenance of records for program evaluation
7. Health insurance benefit coverage for services
8. Family education

Employee Assistance Programs

Employee assistance programs (EAPs) are defined as “job-based

programs operating within a work organization for the purposes of
identifying troubled employees, motivating them to resolve their troubles,
and providing access to counseling or treatment for those employees who
need these services.” EAPs have their origins in the occupational alcoholism
programs begun in the 1940s. In the 1970s, they expanded to cover other
issues, particularly drug and other substance abuse issues. Since then,
EAPs have expanded their coverage to also help employees with mental
health issues, such as anxiety, depression, eating disorders, and compulsive
gambling, as well as other personal, marital, or financial problems that
may be affecting their work. Possible outcomes that may be affected by
EAPs include productivity, absenteeism, turnover, unemployment costs,
and treatment for substance abuse, accidents, training and replacement
costs, and insurance benefits.

Mental Health

Among the emotional and mental health issues commonly seen by

counselors in industry are the following:

1. Individual adjustment problems (neurosis to psychosis)

2. External factors such as battering, incest, rape, or crime
3. Sexual problems, including impotence
4. Divorce and marital problems

230
 Notes
5. Depression and suicide attempts
6. Difficulties with family or children
7. Sexual harassment in the workplace
8. Legal and financial problems

Mental health problems may be brought into the workplace from

employees’ personal lives, and work itself can lead to a decline in mental
health. Organizations are affected by employee mental health problems
in the form of absenteeism, poor work habits, low job satisfaction,
interpersonal conflicts, and indecisiveness.

1. EAPs are based on the premise that work is very important to people;
the work itself is not the cause of the employee’s problem. Consequently,
the workplace can be a means to get people help.
2. The supervisor plays a key role in getting help for the employee. Often,
however the supervisor denies the problem and even enables the
troubled employee. to continue the problem behavior. The supervisor
is critical in the confrontational process with the troubled employee.
Therefore, education is necessary to eliminate the supervisor’s tendency
to enable the employee by denying the problem.
3. Information about the employee’s job performance is extremely
important in diagnosis and treatment. It can be used to measure and
track whether treatment is successful.
4. Workplace peers and union stewards are very important; however,
they too can deny the problem and enable the employee to continue
the behavior. Teaching them to confront and consequently break the
denial barrier is an important element.
5. Job leverage is the key ingredient in helpling an imployee. The counselor
must be able to use this in conjunction with the supervisor.
6. EAPs concentrate on job performance issues. They are not intended to
be medical programs.
7. Cost-effectiveness is an important consideration and must be addressed
with upper management.

8. The EAP professional’s Knowledge about addiction is paramount.

Every EAP should be staffed by licensed professionals who are familiar
with addictions and other employee personal problems.

Conceptual framework for EAP

231
Notes
The EAP Approach to Resolving Employee Personal Problems

EAPs are based on the notion that work is very important to people
and that work performance should be used to identify employee personal
problems and motivate employees to seek help. Originally developed to deal
with alcohol abuse, the EAP approach assumes — as does the Alcoholics
Anonymous (AA) movement — that substance abusers will deny their
problem until they are faced with a crisis. From the EAP point of view, that
crisis is created by confronting the employee with evidence of substandard
work performance, meanwhile making counseling available and attempting
to motivate the employee to seek help. Although this may seem surprising,
Dale Masi states that the workplace is, in fact, an ideal place for employees
to receive treatment for mental health problems. Her argument is that
many of the obstacles for seeking help, such as transportation and time
off, are removed in the workplace. A conceptual framework for the EAP
approach is shown in above Table and Masi’s framework for delivering
mental health services is shown in above Table.

An important aspect of the modern treatment of substance abuse

and other personal problems in the workplace is that the employee
problem is operationally defined in terms of job performance, rather
than clinically defined in terms of addiction or psychiatric disorder. For
example, the patterns of behaviors that indicate a substance-abuse problem
typically include absenteeism, erratic performance, poor quality work,
poor judgment, and complaints by clients or customers. In most EAPs,
supervisors are trained to use the constructive confrontation approach
in dealing with troubled employees. This is, in fact, one of the seven
workplace practices that make up the “Core Technology” recommended
by the Employee Assistance Professionals Association. This strategy calls
for supervisors to monitor their employees’ job performance, confront
them with evidence of their unsatisfactory performance, coach them on
improving it, urge them to use the EAP’s counseling service if they have
personal problems, and emphasize the consequences of continued poor
performance. Constructive confrontation proceeds in progressive stages;
at each stage, employees must choose whether to seek help from the EAP,
manage their problems themselves, or suffer the consequences of their
actions.

232
 Notes
According to this approach, the supervisor need not, and perhaps should
not, say that the employee has a drug or alcohol problem. Rather, the
supervisor should treat the problem like any other performance problem
and leave it for the employee to seek help from the appropriate source.
With this approach, recommending that the employee contact an EAP
or other agency “if you need to” should be the extent of the supervisor’s
intervention.

However, referral by a supervisor is not the only method by which

employees may contact an EAP. Employees with personal problems may
contact the EAP directly “and receive counseling without the supervisor’s
knowledge. Some have argued that this is the preferred referral strategy,
because the employee receives help before job performance is affected.
It is also possible for one employee to encourage a peer with a problem
to seek help from an EAP. In fact, some success with Member Assistance
Programs (MAPs) has been reported, where union representatives are
actively involved in the administration of the assistance program. It
is argued that union representatives can intervene in a potential work
performance problem before it becomes severe enough that the employer
must deal with it.

The components of the typical EAP can vary in terms of

organizational policy, referral method, use of in-house and external
resources, types of problems treated, and staffing. In general, though, the
typical EAP consists of the following:

➢➢ A policy and procedures statement that makes clear the

responsibilities of both the organization and the employee
concerning health and personal problems impacting the job
➢➢ Employee education campaigns, which may include letters, poster
campaigns, or extensive training programs
➢➢ A supervisory training program that teaches problem recognition
and performance documentation
➢➢ Clinical service that may be provided by a professional in-house
staff, or by off-site or community agencies
➢➢ Follow-up monitoring to ensure real problem resolution has
occurred

233
Notes
The components of the typical EAP can vary in terms of organizational
policy, referral method, use of in-house and external resources, types of
problems treated, and staffing. In general, though, the typical EAP consists
of the following:

➢➢ A policy and procedure statement that makes clear the responsibilities

of both the organization and the employee concerning health and
personal problems impacting the job
➢➢ Employee education campaigns, which may include letters, poster
campaigns, or extensive training programs
➢➢ A supervisory training program that teaches problem recognition
and performance documentation
➢➢ Clinical services that may be provided by a professional in-house
staff, or by off-site or community agencies
➢➢ Follow-up monitoring to ensure real problem resolution has
occurred

1. Counseling in the workplace is short term. Long-term therapy is

appropriate in the community.
2. There are logistical as well as legal problems when families are included.
Although EAP programs often services to families, they are based on
self-referral and supervisory-referral.
3. The manager or supervisor is the key person in the client’s work life.
The work associates are similar to family members. The counselor
should learn their configuration and how these individuals interact
with and impact the employee.
4. The counselor assumes the role of a “broker” or go-between for the
employee between the supervisor and the therapist in the community.
5. The counselor should have skills in management consultation, that is,
meeting with supervisors to determine whether they have a problem
employee, advising them on a course of action, and supporting them
through the referral and after-care process.
6. Crisis counseling (to deal with emergency episodes such as suicide
attempts) should be available in the workplace.
7. The counselor must have special skills in “confrontation to break the
denial of the employee appropriately, especially the addicted person.

234
 Notes
8. Confidentiality is an even greater issue in the workplace thanit
is in a community mental health clinic or social agency because of
the uniqueness of the work setting. Competition for jobs, well as an
environment that does not necessarily understand employee’s personal
problems, mandate a clearly defined and enforced confidentiality
policy.
9. Record-keeping procedures need to be carefully developed and
delineated, so that employees are assured of their privacy. This is not
as necessary to explain to clients in a hospital or social agency, it is
accepted in such situations. Employees worry about who will read
their records (especially HR professionals ). The privacy Act, Alcohol
and Drug Regulations, and other relevant laws are guideposts that all
EAPs should follow to protect their employees.
10. The counselor must also design and implement educational programs
in the workplace.
11. The unique work system ( including HR and company physicians) can
be used to help the employee. The counselor needs to understand how
these systems work.
12. Counselor need to be able to work with labor unions in the workplace
as appropriate.

Stress management programs or interventions (SMIs) are defined as

“any activity, program, or opportunity initiated by an organization, which
focuses on reducing the presence of work-related stressors or on assisting
individuals to minimize the negative outcomes of exposure to these
stressors.” SMIs are a popular form of employee counseling program, with
roughly 40 percent of organizations estimated to have such interventions.
Companies such as John Hancock Insurance and General Electric have been
cited for their exemplary stress management programs. The techniques
used to treat stress vary widely, including education, time management
physical exercise, assertiveness training, biofeedback, meditation, and
communications training.

Summary

Rising healthcare costs are one reason organizations are so

interested in helping employees with their personal problems. Employee
counseling is a HRD activity which ensure that each employee is a

235
Notes
positive contributor to the organization’s effectiveness, and that he or she
will continue to contribute in the future. HRD interventions techniques
include workshops, role playing, behavior modeling, discussions, lectures,
coaching, and audiovisual presentations. Organizations use a wide variety
of activities and programs to help ensure the emotional and physical health
of their employees. It is also important that managers and supervisors
receive training in identifying problems and also as to how to counsel or
refer employees to seek treatment when needed.

****

236
 Notes

Lesson 4.2 - Employee Wellness and Health Program

Learning Objectives

After reading this lesson, you may be able to

➢➢ Understand the Meaning of Employee Wellness Programs

➢➢ Understand the Levels of Wellness Program
➢➢ Identify the Issues in Wellness Programs
➢➢ Describe Organizational Strategies

Introduction

Employee wellness programs (EWPs) or health promotion programs

(HPPs) are made up of activities that promote employee behavior and
organizational practices that ensure employee health and fitness. Unlike
disease prevention and health protection programs, HPPs and wellness
programs are based on the premise that wellness is more than the mere
absence of disease. These programs attempt to encourage individuals to
adopt lifestyles that maximize overall well-being.

While stress management may be a component of an HPP, HPPs

also deal with non stress issues, such as obesity and smoking cessation.
Interest in health promotion programmes and fitness is very high. It is
estimated that there are over 50,000 programs that promote the physical
fitness among employees, and the number is growing. According to a survey
by Hewitt Associates, the percentage of worksites that have implemented
at least some form of health promotion activity grew to 91 percent in 1997,
with wellness programs offered by 89 percent.

According to one national survey, some of the most common

health promotion activities are exercise/fitness, smoking cessation, stress
management, blood pressure education, and back pain problem prevention.

237
Notes
Levels of Wellness Program

O’Donnell describes three levels at which fitness and wellness

programs can be implemented.

They are

Level I programs primarily cover educational activities and may not

attempt to directly change employee behavior. Techniques used in Level I
programs include newsletters, posters, classes, and health screening.

Level II programs are those that attempt to bring about direct

behavioral change. The activities in such programs may include supervised
exercise classes, memberships in fitness centers, and classes on how to
properly perform physical work tasks, such as lifting.

Level III programs try to create an organizational environment
that helps employees maintain healthy lifestyles. Two widely publicized
examples of Level III programs are Johnson and Johnson’s Live for Life
program and Control Data’s Stay well program, which the company also
sells to other organizations. A recent survey of health promotion experts
emphasized the need to link health promotion efforts with an organization’s
goals and strategy.

Heirich and colleagues described ten dimensions of worksite wellness

programs. These dimensions are:

1. Establishing a constructive policy for wellness

2. Conducting wellness screening — health risk appraisals
3. Establishing working relationships with community resources
4. Referral of employees to treatment and health-improvement
interventions
5. Providing health-improvement interventions using a menu
approach
6. Outreach and follow-up counseling, done on a regular and ongoing
basis
7. Wellness events done for the entire organization
8. Consultation on worksite policies and systems, and organizational-
level changes

238
 Notes
9. Ongoing evaluation of the process used to carry out the wellness
program as well as any reductions in employees’ health risks
10. Periodic evaluation based on work performance and benefit use

Behavioral Change
Screening Programs Educational Programs
Programs

Annual medical exam Alcohol and drug use Exercise and fitness
Blood analysis Breast self-exam Aerobics

Cervical cancer Colon and

Cancer prevention Calisthenics
rectal cancer

Coronary disease
Diabetes Recreational sports
risk factors
Cardiopulmonary
Fitness assessment Competitive sports
resuscitation
Health fairs Weight control Weight training
Health-risk appraisal Exercise and fitness Exercise instruction

Height and weight First aid EAPs

High blood pressure Cancer detection Healthy back

Preemployment medical
Low back pain Self-defense
exams

Pulmonary function tests Nutrition Smoking cessation

Seat-belt use Stress management

Screening for job-specific
health Smoking cessation Weight loss

Stress Cooking classes

Activities in an employee wellness or HPP

In addition, they suggest two other important issues: turning fitness

centers into wellness centers, and involving employees’ family members in
the activities of the wellness program.

Table lists out activities that might take place in employee wellness
or health promotion programs. The sequence of events common to many
such programs can be described as follows:

239
Notes
The program begins with employee health screening, results of the
health screen are fed back to the employee in some type of counseling
sessions, Employees are advised to participate in one or more health
promotion activities consistent with their current health status, and
follow-up counseling and health assessment reinforces and maintains
employee involvement. Four common components of HPPs are exercise
and fitness, smoking cessation, nutrition and weight control, and control
of hypertension (high blood pressure).

Corporate exercise and fitness programs are among the most popular
employee well-being interventions, especially among large employers, 83
percent of employees who offer an exercise-for-fitness program. These
programs can supply a range of services for employees, from jogging trails
and on-site fitness centers to exercise breaks and company-sponsored
sports leagues. Companies such as Xerox, Kimberly-Clark, Goodyear Tire
and Rubber, Blue Cross of Indiana, and Tenneco have sponsored such
programs.

One of the driving forces behind the strong interest in exercise

and fitness programs is the evidence that the risk of developing coronary
heart disease, cancer, and other leading causes of death can be reduced
by adopting a healthy lifestyle. Unfortunately, it has been estimated that
10 percent of adults in North America engage in regular activity at a level
that could achieve or maintain cardio respiratory fitness. This is despite
the fact that even a modest increase in aerobic fitness beyond the level
of a sedentary middle-aged adult is related to a significant reduction in
the risk of dying prematurely. Organizations supporting fitness and health
programs expect to generate benefits such as a greater ability to attract
and retain employees, more positive employee attitudes, and increased
productivity through reduced absenteeism, turnover, and a heightened
physical capacity to perform work. Organizations also use fitness programs
as a way to cut rising health­care costs.

Organizations that use fitness programs should identify the needs

of all employees and provide incentives to ensure that those at greatest
risk also participate. Systematic outreach and follow-up counseling
have also been found to increase the effectiveness and cost-effectiveness
of fitness programs. Other aspects of an effective fitness and exercise
program include establishing goals and objectives, obtaining management

240
 Notes
commitment, hiring quality staff, developing an evaluation strategy, and
recruiting participants. Finally, it does not appear that a large investment
in equipment and facilities is needed. One review of worksite fitness
programs found that combining outreach, individual counseling, and a
supportive organizational environment with a moderately well-equipped
facility was an effective (and cost-effective) approach.

Smoking Cessation

Smoking is one of the most publicized health risks in society and in

the workplace. It has been amply demonstrated for some time that smoking
is linked to greater incidence of coronary heart disease, stroke, cancer, and
emphysema. Evidence continues to mount concerning the increased health
risks that befall on smokers, as well as nonsmokers exposed to cigarette
smoke (i.e., second­hand smoke). The additional annual cost of employing
smokers and allowing smoking in the workplace has been estimated to be
$2,853 per smoker.

Organizations have increased their sponsorship of smoking

cessation programs as a way to help employees, reduce costs, and provide
a safer workplace. In many cases, state and local laws banning smoking
in public areas have also prodded organizations to help employees quit
smoking. Fifty-nine percent of worksites with fifty or more employees,
and 85 percent of medium-sized and large worksites have a formal policy
that prohibits or severely restricts smoking in the workplace. A survey
of private worksites found that 35 percent of respondents had a smoking
cessation program. Organizations can either sponsor smoking cessation
programs in-house, as part of an EAP, stress management, or wellness
program, or can refer interested employees to an outside organization,
such as the American Cancer Society or a local hospital.

Nutrition and Weight Control Interventions

Overweight is defined as being 25 to 29.9 percent or more over

one’s “ideal” body weight (based on height and gender). Obesity is defined
by a body mass index (BMI) of 30 or more.

Over the past twenty years, the trends toward increasing obesity
in the Indian population are dramatic and troubling. Obesity has been

241
Notes
causally associated with musculoskeletal problems, hypertension, high
levels of blood sugar and cholesterol, and some forms of cancer. Because
of the health and cost consequences of obesity and because of employee
concerns about appearance, workplace weight control and nutrition
interventions are becoming more common.

Worksite weight control programs can be effective in helping

participants achieve short-term weight loss (that is, one to two pounds
per week), but their effectiveness with regard to long-term weight loss and
their health and productivity benefits have not been established. Similarly,
worksite nutrition and cholesterol programs can lead to short-term benefits
for participants (e.g., attitude and dietary change, decreased cholesterol
level), with more intensive programs that used individual counseling and
follow-up leading to better results.

In each of these types of programming, more and better conducted

studies can help establish causal links to improve health and behavior.
For example, results of two well-conducted, large-scale health promotion
programs have recently been reported. Both interventions led to reduced
fat intake and increased fruit and vegetable consumption. As is the case
with other health improvement programs, employee participation is an
important aspect of program effectiveness. It does seem to be the case that
competition serves to improve both participation and the success rate of
such programs.

Negative attitudes toward overweight individuals are widespread in

our society. A review by Mark Roehling demonstrated substantial evidence
of bias and employment discrimination against overweight people. There
are obvious psychological and economic implications here for overweight
individuals, but also potential legal implications for employers.

The point we would stress is that organizational efforts to assist

individuals in losing weight can be good and beneficial to both the employee
and the organization. However, organizations and their representatives
need to make sure that their nutritional and weight control interventions
are kept free of negative stereotypes and negative job outcomes for
participant’s unless the participant’s weight is truly related to their ability
to perform a given job.

242
 Notes
Control of Hypertension

Health problems linked to hypertension include a significantly

greater incidence of heart disease and stroke. Despite the potentially
devastating effects of hypertension, it can often be controlled through
exercise, weight reduction, medication, stress reduction, and a low-salt
diet. The high incidence of hypertension and the relative ease with which
it can be detected and controlled have made hypertension screening and
control programs popular in the work­place.

Organizations need not have a full-blown fitness or health

promotion program to help employees reduce hypertension. A typical
screening and control program may include:

➢➢ Provision of educational materials

➢➢ Blood pressure screenings to identify hypertensive employees
➢➢ Referral of such employees for treatment
➢➢ Installation of blood pressure screening equipment for employees
to use and monitor their own blood pressure
➢➢ Low-salt foods available in both cafeteria and vending machines
➢➢ Periodic monitoring of employee progress

Overall Effectiveness of Health and Wellness Programs

It is recommended that organizations have multiple components to

their health and wellness programs, that is, covering as many of the topics
as possible. A recent compilation of the results of over forty studies about
the impact of such programs demonstrated reductions in sick leave, health
plan costs, and workers compensation costs of over 25 percent.

Further, an average cost-benefit ratio of 5.93 was obtained,

suggesting that the benefits of such programs far outweigh the costs. This
is fairly impressive evidence of overall effectiveness. It would seem that the
challenge now is to get more organizations to implement such inclusive
wellness programs, and then to see more individuals take part in them.

243
Notes
Issues in Employee Counseling

Each of the employee counseling approaches discussed previously

is affected by a common set of issues, including effectiveness, ethical and
legal issues, responsibility, and unintended negative consequences.

Effectiveness of Employee Counseling Interventions

Several factors make it difficult for rigorous research to be

conducted on these topics. First, the personal nature of many problems
addressed by counseling, such as substance abuse and mental illness, may
make organizations reluctant to allow researchers access to the data needed.
Second, defining success and effectiveness for many of these problems is
a difficult task. In the case of alcohol abuse, for example, many programs
define alcoholism indirectly, in terms of changes in job behavior, rather
than directly, in terms of the volume or pattern of alcohol consumption.

Is an alcohol abuse program effective if treated employees return

to normal working patterns, even if the employees still drink? Similarly,
what period of time is suitable to establish that a problem has been solved?
Does a reduction of stress for six months signify success? The prevention
of relapse is a significant factor, whether in the case of weight control,
hypertension, or fitness interventions. The effectiveness can be defined
using multiple criteria, including cost-effectiveness, short and long-term
behavior and attitude changes, participation rates, and direct impact on
the cause of the problem. It would also be beneficial to conduct more
longitudinal studies that use multiple worksites and interventions and to
examine organizational-level interventions and outcomes.

Third, the reasons an organization has begun an intervention in the

first place may affect the research whether the research is done and how
effectiveness is defined. Some organizations launch employee counseling
programs because they believe it is the right thing to do or because
the program is consistent with the organization’s philosophy. Other
organizations implement such programs to enhance the organization’s
image, both internally and externally. Effectiveness data in these cases may
not affect whether the organization continues to offer the program; the
fact that the program is being offered is the key concern.

244
 Notes
One way to encourage organizations to evaluate their programs is
to provide a model that identifies the data needed for sound evaluation.
Gebhardt and Crump describe a strategy for evaluating wellness programs
that we believe could be used as a guideline for evaluating EAPs and SMIs
as well. Their strategy includes these steps:

1. Determine the demographics of the organization (age, sex, etc.).

2. Determine expected participation rates.
3. Estimate program start-up and maintenance costs needed to meet
objectives.
4. Implement a testing and tracking system to quantify program
outcomes.
5. Measure pre- and post program changes for relevant outcomes.
6. Analyze the program variables separately by relevant demographic
groups and by measuring participation versus nonparticipation in
the program.
7. Perform cost-benefit analysis of present and future benefits,
expressed in current rupee value.

Following this framework is not easy, as it is often hard to identify

all the costs and benefits of a program and to express them in economic
terms. However, conducting an evaluation based on this strategy can
provide the data needed to make informed decisions about the program.
Ethical issues in employee counseling

Two ethical issues relating to employee counseling services merit

discussion: confidentiality and the nature of participation (i.e., whether
mandatory or voluntary). Each is discussed here.

Confidentiality is a key concern in all types of employee counseling

interventions. All records of program utilization should be held in the
strictest confidence, and maintained separately apart from an employee’s
personnel file, and should be released only with the express permission of
the employee.

While data generated by participation in, for example, a nutrition

program may be less sensitive than that gained from a drug treatment

245
Notes
program, it is nevertheless important to guarantee the confidentiality of all
employee counseling records. Program policy statements should include
an explicit description of the confidentiality policy and the steps involved
in implementing it.

A second ethical consideration is whether the participation in a

counseling program should be voluntary or mandatory. While organizations
stand to gain greater benefits if all members of a target group participate in
a program (e.g., all smokers), Employees should have the right to determine
their lifestyle, and should not be forced to engage in behavior change other
than that relating to performance of their jobs. Even an employee with a
substance abuse problem should be free to choose whether and how to
deal with that problem. The organization can offer assistance in treating
the problem, but it should not attempt to force acceptance of treatment.
If the employee’s substandard performance does not improve after he or
she has had ample opportunity to improve, then the organization should
pursue its regular procedures concerning discipline and discharge.

Native Outcomes of Employee Counseling Programs

It is possible that participation in a counseling or fitness program can

have unintended negative consequences. This is particularly true of health
promotion programs. Some potential unintended negative consequences
could include (1) workers’ compensation cost increases; (2) employees
participating in fitness programs may experience scheduling problems,
increased fatigue and accidents, and lower performance; or (3) prohibiting
smoking may lead to conflicts between smokers and nonsmokers. There
is little research on this topic to guide organizations in making decisions.
Decision makers concerned about such consequences may find some help
by investigating the experiences of other organizations.

Organisational Strategies Based on Human Resources

Recognition has been growing that, under certain conditions,

human resources contribute to a competitive advantage for organizations.
People can have the core competency when they have special capabilities
to make decisions and be innovative in ways that competitors cannot
easily imitate. Having those capabilities requires selection, training, and
retention of good employees. An employee group without those special
abilities would not be as strong a basis for competitive advantage.

246
 Notes
The shared values and beliefs of a workforce are called organizational
culture. For people to be a core competency managers must consider the
culture of the organization because otherwise excellent strategies can be
negatived by a culture incompatible with those strategies. Further, the
culture of the organization, as viewed by the people in it, affects attraction
and retention of competent employee. Numerous examples can be given
for key technical, professional, and administrative employees leaving
firms because of corporate cultures that seem to devalue people and create
barriers to the use of individual capabilities.

Productivity as an HR-Based Strategy

The more productive an organization is the better is its competitive

advantage, because the costs to produce its goods and services are lower.
Better productivity does not necessarily mean more is produced; perhaps
fewer people (or less money or time) were used to produce the same
amount. A useful way to measure the productivity of a workforce is the total
cost of people per unit of output. In its most basis sense, productivity is a
measure of the quantity and quality of work done, considering the cost of
the resources used. It is also useful to view productivity as a ratio between
inputs and outputs that indicates the value added by an organization or in
an economy.

At the national level, high productivity leads to higher standards

of living, as shown by the greater ability of a country to pay for what
its citizens want. Increases in national wage levels (the cost of paying
employees) without increases in national productivity lead to inflation,
which results in an increase in costs and a decrease in purchasing power.

Organizations and Productivity: Productivity at the organizational

level ultimately affects profitability and competitiveness in a for-profit
organization, and total costs in a not-for-profit organization. Decisions
made about the value of an organization is often based on the productivity
for which it is capable.

Perhaps none of the resources used for productivity in

organizations are so closely scrutinized as the human resources. Many of
the activities undertaken in a HR system are designed to affect individual
or organizational productivity. Pay, appraisal systems, training, selection,

247
Notes
job design, and compensation are HR activities directly related with the
productivity.

A useful way to measure HR productivity is by considering unit

labor cost, which is computed by dividing the average cost of workers by
their average level of output. In using unit labor costs, one can see that a
company paying relatively high wages still can be economically competitive
if it can also achieve an offsetting high productivity level. Low unit labor
costs can be a basis for a strategy focusing on human resources.

Increasing Productivity: Most of the productivity improvement

efforts have focused on their workforces. The early stages included
downsizing, reengineering of jobs, increasing computer usage, and
working employees harder and longer. These approaches have been useful
in some firms. Some ideas for the next round in productivity improvements
include:

➢➢ Outsourcing: Contract with someone else to perform activities

previously done by employees of the organization.
➢➢ Making workers more efficient with capital equipment: Typically
the more money spent on equipment per worker, the greater will be
the output per worker.
➢➢ Replacing workers with equipment: Certain jobs are not done as
well by humans. The jobs may be mindless, physically difficult, or
require extreme precision. For example, a ditch is better dug by one
person operating a backhoe than by several workers with shovels.
➢➢ Helping workers work better: Replace outmoded processes,
methods, and rules. Also, find better ways of training people to
work more efficiently.
➢➢ Redesigning the work: Some work can be redesigned to make it
faster, easier, and possibly even more rewarding to employees. Such
changes generally improve productivity.

Quality and Service as HR-Based Strategies

Both high quality products, and/or extremely good service can

be strategic competitive advantages that have HR dimensions. Quality
of production must be considered as part of productivity, because one

248
 Notes
alternative might be to produce more products and services but of lower
quality. At one time, American goods suffered in the market as a result of
this trade-off. W. Edwards Deming, an American quality expert, stated that
getting the job done right the first time-through pride in craftsmanship,
excellent training, and an unwillingness to tolerate delays, defects, and
mistakes-is essential to quality production. However, attempts to improve
quality have worked better for some firms than for others.

Delivering excellent customer service is another approach to

enhancing organizational competitive performance. Service begins with
product design and includes interaction with customers, with the ultimate
goal of meeting customers’ needs. Some organizations do not produce
products but do only services. Service excellence is difficult to define, but
people know it when they see it. In many organizations, service quality
is affected significantly by the individual employees who interact with
customers.

Linking HR Planning and Strategy for Competitive Advantage

Many think that organizations decide on strategies and then HR

planning is done to supply the right number and kinds of employees.
However, the relationship should go deeper. Business strategies affect
HR plans. Consideration of human resources issues should be part of
the initial input to the strategy formulation process. For example, it may
be important to identify competitive advantage opportunities that fit
the existing employees or assess strategic alternatives given the current
capabilities of human resources. HR professionals should be doing
environmental scanning to know and pinpoint which skills are available
and which are not. HR professionals also should be able to estimate lead
times for adjusting to labor shortages or surpluses, because HR will be
involved in implementing any strategies that affect people.

To describe the relationship between the strategy and HR, two

basic strategies can be identified: cost-leadership and differentiation. An
example of a company following a cost-leadership strategy might be Wal-
Mart, and of the differentiation strategy it may be Intel or Microsoft. A
cost-leadership strategy may be appropriate in a relatively stable business
environment because it approaches competition on the basis of low price
and high quality of product or service. The differentiation strategy is

249
Notes
more appropriate in a more dynamic environment characterized by rapid
change and requires continually finding new products and new markets.
The two strategies may not be mutually exclusive, because it is possible
for an organization to use one strategy for one product or services and
another with others.

The cost-leadership strategy requires an organization to “build”

its own employees to fit its specialized needs. This approach needs a
longer HR planning horizon. When specific skills are necessary for a new
market or product, it may be more difficult to internally develop them
quickly. However, with a differentiation strategy, responsiveness means
that HR planning is likely to have a shorter time frame, and greater use of
external sources, (such as acquisition of another company with specialized
employees).

Summary

Employee wellness programs (EWPs) or health promotion programs

(HPPs) are made up of activities that promote employee behavior and
organizational practices that ensure employee health and fitness. Corporate
exercise and fitness programs are among the most popular employee well-
being interventions, especially among large employers. Organizations
that use fitness programs should identify the needs of all employees and
provide incentives to ensure that those at greatest risk also participate.
Each of the employee counseling approaches is affected by a common set of
issues, including effectiveness, ethical and legal issues, responsibility, and
unintended negative consequences. The more productive an organization
is, the better is its competitive advantage, because the costs to produce
its goods and services are lower. Consideration of human resource issues
should be part of the initial input to the strategy formulation process.

Self Assessment Questions

1. “Like any other HR activities the organizations are also making a

major investment in providing employee counseling services as a
way to promote employees’ well-being” Discuss
2. Explain the components of employee counseling program.
3. Describe employee assistance program

250
 Notes
4. What is meant by employee assistance programme? State its contents
and approaches.
5. What is meant by employee wellness program
6. What are the levels of wellness program
7. Discuss organizational strategies to improve the effectiveness of
human resources

CASE STUDY

Share options are a benefit normally reserved for directors. However

it was reported that motor components supplier UNI PART offered shop
floor workers the opportunity to participate in such a scheme.

The applied to all full time staff who had worked for the company
for over six months, who had received a satisfactory appraisal and whose
division has reached its 2007 targets. It was estimated that 2600 of the 3800
staff would be eligible. They were given option to buy a limited number
of shares, 5 to 10 depending upon service, at a 15% discount for everyone
bought at the market rate.

You may wish to consider the following points.

➢➢ How does the scheme compare with typical executive share option
schemes?
➢➢ What are the advantages and disadvantages of this approach?
➢➢ Does it penalize those who work for the division that has not
reached its target? for the reason that may be beyond an individual’s
control?

CASE STUDY

Suppose you are a Restaurant manager who is conducting a

coaching discussion with one of your servers about the server’s repeated
failure to complete store closing operations before leaving for the night.
You have conducted coaching analysis and have determined that the server
is able to complete this responsibility, that all obstacles to doing so have
been removed, and that this is an important part of a server’s job in your
restaurant.

251
Notes

a. Describe as to how do you get the server to agree that the problem
exists, and what you would do if the server refuses to acknowledge
that a problem exists
b. Describe the option available to you in dealing with this situation
c. Which option would you select? Support your choice

****

252
 Notes

UNIT V

Unit Structure

Lesson 5.1 Work Force Reduction, Realignment and Retention

Lesson 5.2 HR Performance and Benchmarking
Lesson 5.3 Diversity of Workforce

Lesson 5.1 - Work Force Reduction, Realignment and Retention

Learning Objectives

After reading this unit, you may be able to

➢➢ Understand the Meaning of Workforce Reduction and Realignment

➢➢ Understand the Meaning and Strategy for Retention of Human
Resource
➢➢ Evaluate the Determinants of Retention

Introduction

Planning is of little value if no subsequent action is taken. The

action taken depends on the likelihood of a human resources surplus or
shortage. A surplus of workers can be managed within a HR plan in a
variety of ways. But regardless of the means, the actions are difficult. 14.2
Workforce reductions and realignment

In this era of mergers, acquisitions, and downsizing, many workers

have been laid off or had their jobs eliminated due to closing of selected
offices, plants, and operations. It has been called “downsizing,” “rightsizing,”
“reduction in force” (RIF), and in many other terms as well, but it almost
always means cutting employees. “Lay-offs” come in response to a shortfall
in demand for products, while “downsizing” involves job reductions based
on a desire to operate more efficiently when the demand is strong.

253
Notes
Downsizing is a structural change that negates rehiring laid-off
workers. However, workers who are laid off (but not as part of downsizing)
may get their jobs back when demand picks up.

The outcome of downsizing is a bit clearer after many examples

and studies. Downsizing has worked for some firms, but it doesn’t generate
additional revenue. It only generates lower costs in the short term; “corporate
liposuction” one observer calls it. But when companies cannibalizes the
human resources they need to grow and innovate, disruption follows for
some time.

Senior executives still see layoffs as their first line defense against
an economic downturn, but some research suggests downsizing can
hurt productivity by leaving “surviving” employees overburdened and
demoralized. Loss of employees may mean a loss of informal knowledge of
how to handle specific problems and issues or how to respond to specific
customers or suppliers. However focusing on trimming underperforming
units or employees as part of a plan based on sound organizational strategies
may make sense. Such a plan often includes cutting capital spending.

Workforce realignment can occur in all forms as the HR Perspective

illustrates. Some common problems include demoralized managers,
lawsuits, sabotage, and a need for more security. Alternatives to layoffs
should be examined first to avoid negative repercussions for organizations.

The effects of Mergers and Acquisitions

Another cause for downsizing has been the proliferation of mergers

and acquisitions in many industries. One has to look at the financial or
telecommunications industry to see massive consolidation in the number
of firms. Some mergers occurred between two huge firms, such as British
Petroleum and Amoco or Norwest and Wells-Fargo banks, while others
have been smaller merges, such as the merger of two local hospitals. But a
common result of most mergers and acquisitions (M&As) is an excess of
employees once the firms have come to be combined. The wave of M&A
activity in the United States has often left the new, combined companies
with redundant departments, plants, and people. Because much of the
rationale for combinations is financial, eliminating employees with
overlapping responsibilities.

254
 Notes
Corporations that are closing facilities or eliminating departments
may need to offer financial transition arrangements. A transition stay
bonus is extra payment for employees, whose jobs are being eliminated,
thereby motivating them to remain with the organization for a period of
time.

Just as critical is the impact of job elimination on the remaining

employees, an AMA survey found that in 69% of the surveyed firms,
employee morale declined in the short term and 28% of the firms had
longer-term decline in employee morale after downsizing. Additionally,
resignations and employee turnover all increased substantially in the
year following the downsizing. These consequences of organizational
restructuring are crucial challenges to be addressed by HR management.

Managing Survivors of Downsizing

A common myth is that those who are still around after downsizing
in any of its many forms and so glad to have a job that they pose no
problems to the organization. However, some observers draw an analogy
between those who survive downsizing and those who survive wartime
but experience guilt because they were spared while their friends were
not. The result is that performance of the survivors and through- out the
organization are adversely affected.

The first major reduction in force (RIF) of workers ever undertaken

in a firm is often a major jolt to the employees’ view of the company.
Bitterness, anger, disbelief, and shock are common reactions. For those
who survive the cuts, the paternalistic culture and image of the firm as
a “lifetime” employer often is gone forever. Survivors need information
about why the actions had to be taken, and what the future holds for them
personally. The more the employees are involved in the regrouping, the
more likely the transition is to be smooth. Managers, too, find downsizing
situations stressful and react negatively for having to be the bearers of bad
news.

Downsizing Approaches

The need for downsizing has inspired various innovative ways of

removing people from the payroll, sometimes on a massive scale. Several

255
Notes
methods can be used when downsizing occur: attrition, early retirement
buyouts, and layoffs are the most common.

Attrition and Hiring Freezes

Attrition occurs when individuals who quit, die, or retire are

not replaced. With this approach, no one is sent out of a job, but those
who remain must handle the same workload with fewer people. Unless
turnover is high, attrition will eliminate only a relatively small number of
employees in the short run. Therefore, employers may use a method that
combine attrition with a freeze on hiring. This method is usually received
with better employee understanding then many of the other methods.

Early Retirement Buyouts

Early retirement is a means of encouraging more senior workers

to leave the organizations early. As an incentive, employers make
additional payments to employees so that they will not be penalized too
much economically until their pensions and Social Security benefits take
effect. The financial incentives of such voluntary termination programs,
or buyouts, entices employees to quit. They are widely viewed as ways to
accomplish workforce reduction without resorting to layoffs and individual
firings.

Buyouts appeal to employers because they can reduce payroll

costs significantly over time. Although it faces some up-front costs, the
organization does not incur the continuing payroll costs. One hospital
saved $2 for every $1 spent on early retirees. As noted, early retirement
buyouts are viewed as a more humane way to reduce staff then terminating
long-service, loyal employees. In addition, as long as buyouts are truly
voluntary, the organization is less exposed to age discrimination suits. One
drawback is that the employees the company wishes would stay, as well as
those it wishes would leave, can take advantage of the buyout.

Layoffs

Layoffs occur when employees are put on unpaid leaves of absence.

If business improves for the employer, then employees can be called
back to work. Layoffs may be an appropriate downsizing strategy during

256
 Notes
a temporary economic downturn in an industry. Nevertheless, careful
planning of layoffs is essential. Managers must consider the following
question: while resorting to layoffs.

➢➢ How are decisions made about who should laid off, using seniority
or performance records?
➢➢ How will callbacks be made if all workers cannot be recalled at the
same time?
➢➢ Will any benefits be given to workers who are laid off?
➢➢ If workers take other jobs, do they forfeit their callback rights?

Companies have no legal obligation to provide a financial cushion to

laid-off employees; however, many a companies do that. When a provision
exists for severance pay, the most common formula is one week’s pay for
every year of employment. Larger companies tend to be more generous.
Loss of medical benefits is a major problem for laid-off employees, but
under federal law displaced workers can retain their medical group
coverage for up to 18 months, and up to 36 months for dependents, if they
pay the premiums themselves.

Retention of Human Resources

Retention of employees has become a primary concern in many

organizations for several reasons. As a practical matter, with lower
turnover for every individual who is retained one person have to recruited,
selected, and trained. Also, organizational and individual performance
is enhanced by the continuity of employees who know their jobs, co-
workers, organizational services and products, and the firm’s customers.
One survey of supervisors and workers found that losing high performers
made it more difficult for organizations to reach their business goals. In
addition, continuity of employees provide better “employee image” for
attracting and retaining other individuals.

Importance of Retention

A survey of Chief Executive Officers found (26%) that they believe

the greatest contribution to organizational success over the next five years
will be to get and retain employee talent. For example, one technology

257
Notes
company with 5,000 employees, SAS Institute, determined that the
turnover cost of their highly skilled employees averaged $60,000 per
departure. By focusing on retention, the firm had an attrition rate of 17%
below the industry average, meaning that 850 fewer employees had to be
hired at an estimated “savings” of more than $50 million per year. SAS’s
focus on retention has allowed the organization to be more innovative with
its retention programs. SAS also found that increased employee retention
has contributed significantly to reaching its organizational goals.

Retention as Management Concern

Changes in economic conditions, along with the collapse of the

dot.com employment bubble and slowing of the growth of technology
firms, have led some to speculate that the emphasis on retention was a
temporary concern. However, an updated McKinsey & Company survey
found that 90% of those firms surveyed said it was more difficult to
retain talented individuals than it was several years before. Therefore, it
is imperative that organizations and managers recognize that retention
must be a continuing HR practice and a significant responsibility for
all supervisors and managers. Some firms, such as Mutual of Omaha,
American Express, and others, conduct retention training for managers.
Even more directly, firms evaluate managers and supervisors on retention
as part of their performance reviews. Hartford Life Insurance and other
firms tie managers’ performance reviews and bonuses to the retention and
attraction of employees. Also, more senior managers have stock options
linked to employee retention.

Retention Officer: Some employers have placed such a high
priority on employee retention that they have designated an individual
as the retention officer for the firm. One estimate is that 10% of large
U.S. firms have assigned at least one person to focus on retention. Often
an individual in the HR area is assigned a specific focus on retention to
ensure that it receives high priority and the multifaceted efforts are needed
to increase employee retention.

Why People Stay or Leave

Individuals stay or leave their jobs and organizations for many

reasons. Obviously, individuals who are terminated leave as per the order

258
 Notes
of the organizations. But the bigger issue in many organizations is why
employees voluntarily leave. One survey by McKinsey & Company, a large
international consulting firm, emphasized the importance of retention by
concluding that employers face “a war for talent.” The McKinsey studies
conducted several years apart found that the most critical factors affecting
the attraction and retention of managers and executives can be classified
into three areas. The area, key items, and percentage responses are listed
as follows:

Great Company

➢➢ Value and culture (58%)

➢➢ Well managed (50%)
➢➢ Company has exciting challenges (38%)

Great Job

➢➢ Freedom and autonomy (56%)

➢➢ Job has exciting challenges (51%)
➢➢ Career advancement and growth (39%)

Compensation and Lifestyle

➢➢ Differentiated pay package (29%)

➢➢ High total compensation (23%)
➢➢ Geographic location (19%)
➢➢ Respect for lifestyle (12%)

Several different studies provide some consistent patterns and

insights. Figure contains data from a SHRM Retention Practices Survey.
Notice that the first three factors with the highest percentages such as
career opportunities, competitive compensation/benefits, and poor
management, are controllable items in the sense that they are influenced
by organizational policies and practices. Of the remaining areas cited,
several of them are personal, less controllable by employers (relocation,
returning to school, etc.).

259
Notes
Retention Determinants

It has been recognized by both employers and employees that

some common areas affect employee retention. If certain organizational
components are being provided, then other factors may affect retention.
Surveys of employees consistently show that career opportunities and
rewards are the two most important determinants of retention. Finally, job
design/work factors and fair and supportive employee relationships with
others inside the organization contribute to retention.

Organizational Components

A number of organizational components influence individuals in their

decisions to stay or leave their employers. Organizations that have positive,
distinctive cultures and values have fewer turnovers, as the opening
discussion indicates.

Organizational Culture and Values

Organizational culture is a pattern of shared values and beliefs

that provides organizational members meaning and rules for behavior.
Numerous examples can be given for key technical, professional, and
administrative employees leaving firms because of corporate cultures
that seem to devalue people and create barriers to the use of individual
capabilities. In contrast, creating a culture that value people enables some
corporations to successfully attract and retain employees.

One corporation well known for its culture and values is Southwest
Airlines. The firm focuses considerable effort on instilling its values of
customer service and employee involvement through its HR efforts. These
efforts have yielded greater performance, retention of employees, and a
reputation as an “employer of choice” in the airline industry. Even after
the terrorist attacks in September 2001, Southwest was the only airline
that did not cut staff and significantly reduce its flights. The genius of
Southwest’s culture, founding CEO Herb Kelleher, has repeatedly stated
that showing respect for people is central to Southwest Airline’s culture.

One key organizational value that affects employee retention
is trust. One study of more than 600 employees found that trust and

260
 Notes
organizational values were noted as factors that influenced intentions of
employees to stay with their current employers. Employees who believe
that they can trust managers, co-workers, and the organizational justice
systems are much less willing to leave their current employers.

Organizational Strategies, Opportunities, and Management

Other organizational components that affect employee retention are

related to the strategies, opportunities, and management of the organization.
In some organizations external events are seen as threatening, whereas
others see changes as challenges requiring responses. The latter approach
can be a source of competitive advantage, especially if an organization is
in the growing, dynamic industry.

One factor affecting how employees view their organizations is

the visionary quality of organizational leadership. Often such vision is
demonstrated by having an identified strategic plan that guides the firm’s
response to changes. Organizations with clearly established goals that hold
managers and employees accountable for accomplishing results are viewed
as better places to work, especially by individuals wishing to progress both
financially as well as in career.

Job Continuity and Security

Many individuals have seen a decline in job security over the

past decade. All the downsizings, layoffs, mergers and acquisitions, and
organizational restructurings have affected employee loyalty and retention.
Also as co-workers experience layoffs and job reductions, anxiety levels of
the remaining rise. Consequently, employees start thinking about leaving
before they too get cut. On the other hand, organizations where job
continuity and security is high tend to have higher retention rates.

Job insecurity concerns generally increase as workers become

older because these individuals perceive they would have more difficulty
in finding employment that provides comparable pay, benefits, and
responsibilities. Even younger individuals have experienced some increase
in job insecurity due to the decline in employment at some dot.com and
high-technology companies.

261
Notes
Rewards and Retention

The tangible rewards that people receive for working come in the
form of pay, incentives, and benefits. Numerous surveys and experiences
of HR professionals reveal that one key to retention is to have competitive
compensation practices. Many managers believe that money is the prime
retention factor, 89% in one survey, and many employees cite better pay or
higher compensation as a reason for leaving one employer for and joining
with another. However, the reality is a bit more complex.

Pay and benefits must be competitive, which means they must be

“close” to what other employers are providing and what individuals believe
to be consistent with their capabilities, experience, and performance. In
fact, money may be a factor for some people leaving a job, but the other
factor may be why many stay.

Competitive Benefits

Another compensation issue affecting employee retention is

having competitive benefits programs. Offering health insurance,
retirement, tuition assistance, and many other benefits commonly offered
by competing employers is vital. Burger King, Pizza Hut, and Taco Bell
have learned the importance of competitive benefits. By introducing new
benefits, including retirement plans, health insurance, and other benefits
not previously provided, each of these fast-food firms have seen employee
turnover decline significantly. All three firms attribute the enhanced
benefits as contributing substantially to lower turnover rates. Employers
also are learning that having some benefits flexibility aids retention. When
employees choose how much and what benefits they will have from a
“cafeteria” of choices, given a set of money available from the employer,
the employees can tailor the benefits to their needs. By giving employees
greater choice, employees feel more “individual” and “in control”, thus
reducing their desire to move to another employer.

Special Benefits and Perks

A number of employers use a wide range of special benefits and

perks to attract and retain employees. One large Seattle Company has on-
site recreation clubs, discount travel programs, day-care centers, and other

262
 Notes
resource benefits for employees. At other firms concierge benefits provide
employees with assistance in personal matters at their places of work.
Some of the coverage benefits offered at work have included dry cleaning
pickup and drop off, car maintenance services in company parking lots,
coffee and latte kiosks, ATM machines in break rooms, along with many
others. By offering these special benefits and perks, employers hope to
reduce the time employees spend after work on personal chores and to be
seen as more desirable employers where individuals will remain for longer
stays.

Performance and Compensation

Many individuals expect their rewards to be differentiated from

others based on performance. For instance, if an employee receives
about the same pay increase and overall pay as others who have lower
productivity, more absenteeism, and work fewer hours, then the result
may be a feeling of “unfairness.” This may prompt the individual to look
for another job where compensation recognizes performance differences
exist. The results of a survey on rewards at work found that individuals
are more satisfied with the actual levels of their pay than the processes
used to determine pay. That is why the performance management system
and performance appraisal processes in organizations must be linked to
compensation increases.

To achieve greater performance links to organizational and

individual performance, a growing number of private-sector firms are
using variable pay and incentives programs. These programs in the form
of cash bonuses or lump sum payments are one mechanism used to reward
extra performance.

The growth of technology firms have highlighted another facet of

performance differentiation-giving employees’ incentives in the form of
stock options, organizational ownership, and other longer-term rewards.
Yahoo, Amazon.com, and other technology firms have made extensive use
of stock options for many employees. However, the collapse of their stock
prices in 2001 caused them to have to “re price” or lower the levels at
which the stock options were given, in order to retain employees.

263
Notes
Recognition

Employee recognition as a form of reward can be both tangible and

intangible. Tangible recognition comes in many forms, such as “employee
of the month,” perfect attendance, or other special awards.

Recognition also can be intangible and psychological in nature.

Feedback from managers and supervisors that acknowledge extra effort and
performance of individuals provides recognition, even though monetary
rewards are not given. For instance, a franchise firm for the widely known
KFC food chain uses both tangible and intangible recognition as part of
employee retention efforts. Employees who receive recognition cards from
either customers or co-workers can exchange them for movie tickets and
other rewards. Also, managers have been trained to make special efforts to
recognize employee performance and service.

Retention Interventions

Based on what the measurement and assessment data reveal,

a variety of HR interventions can be undertaken to improve retention.
Turnover can be controlled and reduced in several ways. During the
recruiting process, the job should be outlined and a realistic job preview
was presented, so that the reality of the job matches the expectations of the
new employee. By ensuring that the expectations of potential employees
match with what the organization is likely to offer, voluntary turnover may
be reduced.

Another way to eliminate turnover is to improve the selection

process in order to better match the applicants to the jobs. By fine-tuning
the selection process and hiring people who will not have disciplinary or
performance problems or whose work histories suggest higher turnover
potential. Employers can reduce turnover. Once selected, individuals who
receive effective orientation and training are less likely to leave.

Other HR factors are important as well. Compensation is important

because a competitive, fair, and equitable pay system can help reduce
turnover. Inadequate benefits also may lead to voluntary turnover, especially
if other employers offer significantly higher compensation levels for similar
jobs. Career development and planning can help an organization keep

264
 Notes
employees. If individuals believe they have few opportunities for career
development advancement, they are more likely to leave the organization.
Employee relations, including fair/nondiscriminatory treatment and
enforcement of HR policies, can enhance retention also.

Successful retention intervention efforts occurred at Deloitte &

Touche, a national accounting and consulting firm. An HR study at the firm
found that it was losing many talented women employees after several years
of employment with the firm. Because the firm had invested significant
time and funds in training and developing employees, a special program
throughout Deloitte & Touche was established to focus on retaining all
employees, especially women who had significantly higher turnover rates.
Key portions of the program include workshops on “Men and Women as
Colleagues,” enhanced career mentoring programs, revised family/work
policies and alternatives, and establishing a women’s leadership program.
Retention of all employees, including women, improved.

Summary

Downsizing is a structural change that negates rehiring laid-off

workers. A cause for downsizing has been the proliferation of mergers
and acquisitions in many industries. Attrition, early retirement buyouts,
and layoffs are the most common methods of downsizing. Surveys of
employees consistently show that career opportunities and rewards are the
two most important determinants of retention. Finally, job design/work
factors and fair and supportive employee relationships with others inside
the organization contribute a lot to the retention.

****

265
Notes

Lesson 5.2 - HR Performance and Benchmarking

Learning Objectives

After reading this unit, you may be able to

➢➢ Understand the Bench Marking Process

➢➢ Understand the Impact of Globalization on HRD
➢➢ Understand the Concept of Expatriate and Repatriate
➢➢ Describe Global Management Assignment

Introduction

One approach to assessing HR effectiveness is benchmarking,

which compares specific measures or performance against data on those
measures in other organisations adopting “best practices”. HR professionals
interested in benchmarking try to locate organizations that do certain
activities particularly well and thus become the “benchmarks.”

Benchmarking Analysis

When information on HR performance has been gathered, it must

be compared to a standard, which is a model or a measure against which
something is compared to determine its performance level. For example,
it is meaningless to know that the organizational turnover rate is 75% if
the turnover rates at comparable organizations are unknown. One means
for obtaining benchmarking data is through telephone calls, which then
may be followed up with questionnaires and site visits to benchmarking
partners. The common benchmarked performance measures in HR
management are:

➢➢ Total compensation as a percentage of net income before taxes

➢➢ Percent of management positions filled internally
➢➢ sales per employee
➢➢ Benefits as a percentage of payroll cost

266
 Notes
A useful way to analyze HR involves calculating ratios that can be
compared from year to year, thus providing information about changes in
HR operations. For example, one suggested series of ratios and measures
is shown in Figure.

HR Performance Area Method of Calculation

I. CEO’s priority numbers Whatever CEO sees as linked to
organizational strategic goals

2. Human value added Revenue

- Operating expense
- Pay and benefits
= Adjusted profit + Full time.
equivalent employees

3. Return on human capital invested Revenue

- Operating expense
- Adjusted profit
= Adjusted profit + Pay and benefits

4. Time to fill openings Total calendar days from each

requisition to accepted offer/
Number of openings filled
5. Turnover cost Cost to terminate
+ Cost to hire
+ Vacancy cost
+ Productivity loss
= Total + Employees lost

6. Voluntary turnover rate Total voluntary employee

separations /Total employees
7. Return on training (Dependent upon type of training
done)
8. Cost per employee hired Advertising expenses
+ Agency fees
+ Employee referral bonuses
+ HR recruiters pay and benefits
+ 10% misc. costs
= Total + Total number of employers
hired

267
Notes

9. Pay and benefits as % of operating Total pay and benefits expenditure

expense + Total operating expenses

10. Healthcare cost per employee Total healthcare benefits expenses

+Total number of employees

HR Business Performance Calculation

Effectiveness is best determined by comparing ratio measures

with benchmarked national statistics. The comparisons should be tracked
internally over time. For instance, the Society for Human Resource
Management (SHRM) and the Saratoga Institute have developed
benchmarks based on data from more than 500 companies, presented by
industry and by organizational size. The Saratoga Institute in Santa Clara,
California, surveys employers annually and compiles information that
allows individual employers to compare HR costs against national figures.

Return on Investment (ROI) and Economic Value Added (EVA)

Return on investment (ROI) and economic value added (EVA) are

two related approaches to measuring the contribution and cost of HR.
Both calculations are a bit complex, so they are just highlighted here.
Return on investment (ROI) shows the value of expenditures for HR
activities. It can also be used to show how long it will take for the activities
to pay for themselves. The following formula can be used to calculate the
potential ROI for a new HR activity:

ROI = C/A + B
Where:
A = Operating costs for a new or enhanced system for the time period
B = One-time cost of acquisition and implementation
C= Value of gains from productivity improvements for the time period

Economic value added (EVA) is a firm’s net operating profit after

the cost of capital is deducted. Cost of capital is the minimum rate of
return demanded by shareholders. When a company is making more than
the cost of capital, it is creating wealth for shareholders. An EVA approach
requires that all policies, procedures, measures, and methods use cost
of capital as a benchmark against which their return is judged. Human

268
 Notes
resource decisions can be subjected to the same analyses. Both of these
methods are useful, and specific information on them is available from
other sources.

Utility or Cost/Benefit Analyses In utility analysis, economic or

other statistical models are built to identify the costs and benefits associated
with specific HR activities. These models generally contain equations that
identify the relevant factors influencing the HR activity under study.

Impact of Globalization on HRD

There are a number of forces that together have led to world trade
increasing over 60% in the past decade. Some of the more prominent are
discussed below.

Global Population Changes

Throughout the world in the developed / Industrialized countries

such as the European Union (EU), Japan, and the United States, population
growth have become significant. In those areas an aging population and
declining birth have contributed to slower growth in the number of
workers and consumers. However, population in China, India, Africa, Latin
America, and other countries and regions continues to grow significantly.
To take advantage of this growth, firms throughout the world have
established operations, formed joint ventures, or merged with firms in
these countries. The prospect of billions of new consumers in the faster-
growing countries is driving global investments and operations. Consumer
demands for products from other countries are also driving globalization.
As examples, German and Japanese cars, French cosmetics, U.S. fast food,
Mexican beer, and Korean electronics are all available globally and desired
by consumers in many count

Global Economic Interdependence

Economic experts estimate that by 2020 the six largest economies

will be the U.S., China, Japan, Indonesia, India, and Korea. Firms based in
other countries are responding to these opportunities. Thus the economic
future of organizations throughout the world is linked to the growth of
the world economy. An example of this linkage is unrest, as has occurred

269
Notes
in Indonesia, Turkey, Argentina, and some other countries. This unrest
has affected stock markets throughout the world. Other examples of the
global economy can be seen by the effects of the economic stagnation in
Japan, the fall of the U.S. stock market, and results of international terrorist
acts at the U.S. World Trade Center. These examples indicate the level of
interdependence among the economies of individual countries.

Regional Alliances

The development of a number of regional trade and political

alliances also has contributed to globalization. The two most well-known
alliances are as follows.

North American Free Trade Agreement (NAFTA)

The United States, Canada, and Mexico recognized the importance

of world trade by eliminating barriers and working together by signing
the North American Free Trade Agreement (NAFTA). The Commission
on Labor Cooperation (CLC), established as part of NAFTA, reviews
complaints filed in the U. S., Canada, or Mexico regarding occupational
safety and health, child labor, benefits, and labor-management relations.
Discussions have held for expanding NAFTA to include other Latin
American countries also.

European Union (EU)

In Western Europe, efforts of several decades led to the creation

of the European Union. The economic integration of the countries in
the EU received a major push in 2002 with the introduction of the Euro
currency. The EU also has established labor and other standards, adopted
by individual EU countries, which has led to greater similarity of HR
practices in EU-based firms. Foreign firms operating in the EU have had
to comply with the requirements.

Global Communications

Another major contributor to globalization is the development

and evolution of telecommunications and technology that aids the rapid
transfer of information. Satellite technology has brought television and

270
 Notes
wireless telephone services to remote villages in Africa, India, China, and
Latin America. The world­wide growth in the use of the Internet has made
that people and firms can easily communicate and have access to huge
amounts of information and data.

Much of the communication on the Internet is in English. As the

global language of business, English allows easier communications and
information flow. In many countries students learn English as their second
language, and many foreign firms train their employees in English. For
instance, Telecom Italia provides English courses for its employees, and
several large Japanese global firms use English as their “business language.”

Staffing Global Assignments

Staffing global assignments involves selecting, placing, and locating

employees in other countries. The need for individuals who can provide
leadership in global organizations emphasizes the importance of global
staffing. According to several different surveys of large multinational
corporations, about 85% indicated a shortage of global leaders with the
capabilities required for success.

When staffing global assignments, cost is a major factor to be

considered. The cost of establishing a manager or professional in another
country can run as high as $1 million for a three-year job assignment. The
actual costs for placing a key manager outside the United States often are
twice the manager’s salary. For instance, if the manager is going to Japan,
the costs may be even higher when housing costs, schooling subsidies,
and tax equalization payments are calculated. Further, if a manager,
professional, or executive quits an international assignment prematurely
or insists on a transfer home, associated costs can be equal or exceeding
the annual salary. “Failure” rates of managers sent to other countries may
run as high as 40% to 50% in some firms or countries, and the reasons for
this failure are discussed later in this chapter.

Global organizations can be staffed in a number of different ways.

Each staffing option presents some unique HR management challenges.
For instance, when staffing the citizens of different countries, different
tax laws and other factors have to be applied. HR professionals need to be
knowledgeable about the laws and customs of each country. They must

271
Notes
establish appropriate payroll and record-keeping procedures, among other
activities, to ensure compliance with varying regulations and requirements.

Expatriate and Repatriate Support and Development

International employees typically are placed in three different

classifications, as discussed below.

Expatriates

An expatriate is an employee, working in an operation, who is

not a citizen of the country in which the operation is located, but is a
citizen of the country of the headquarters organization. Also referred to
as parent-country national (PCN). Expatriates are used to ensure that
foreign operations are linked effectively with the parent corporations.
Generally, expatriates are also used to develop global capabilities within
an organization.

Experienced expatriates can provide a pool of talent that can be

tapped as the organization expands its operations more broadly into even
more countries. For example, Japanese-owned firms with operations in the
United States have rotated Japanese managers through U.S. operations in
order to expand the knowledge of U.S. business practices in the Japanese
firms. The HR Perspective describe a research study on use of expatriates
who are parent-country nationals and host-country nationals to staff
global subsidiaries.

Host-Country Nationals

A host-country national is an employee working for a firm in an

operation who is a citizen of the country where the operation is located,
but where the headquarters for the firm are in another country. Using
host-country nationals is important for several reasons. One reason is that
the organization wants to establish clearly that it is making a commitment
to the host country and not just setting up a foreign operation. Host-
country nationals often know the culture, politics, laws, and business
customs better than an outsider knows. Tapping into the informal “power”
network may be important. Another reason to use host-country nationals
is to provide employment in the country.

272
 Notes
Third-Country Nationals

A third-country national is a citizen of one country, working in a

second country, and employed by an organization headquartered in a third
country. For example, a Indian citizen working for a British oil company as
a manager in Norway is a third country national. Staffing with use of third-
country nationals shows a truly global approach. Often, these individuals
handle responsibilities throughout a continent or region. For instance,
a major U.S.-based electronics company has its European headquarters
in Brussels, Belgium. Although most employees on the clerical staff are
Belgians, only about 20% of the professionals and managers are from
Belgium. Most of the rest, except for five U.S. expatriates come from other
Western European countries.

Possible Global Assignments

Decisions about how to staff global assignments vary based on the

nature, purpose, and length of the assignment. There are four different
types of global assignments requiring intercultural capabilities:

➢➢ For technical assignments, individuals are sent to do limited jobs

and then to return, which requires limited cultural skills.
➢➢ In functional assignments, individuals are sent for extended projects
or jobs but return upon completion of work, and some intercultural
skills are needed.
➢➢ For developmental assignments, individuals are sent to develop and
broaden their understanding of global operations and intercultural
understanding and skills are important.
➢➢ On strategic assignments, individuals are sent to fill critical strategic
jobs, requiring extended efforts, and intercultural understanding
and skills are critical to success.

The importance of intercultural capabilities increases as

assignments progress from technical to strategic. Also, the higher the
level of responsibility and longer the assignment, the more intercultural
capabilities are needed. Instead of making assignments for three years
long or more, global employers now find that shorter-term assignments
can be effective in reducing the “resistance” of assignees and their failure

273
Notes
rates. Short-term assignments of several months at a time create different
personal and family stresses than relocation for several years. Also, the
assignments provide global development experiences for employees
without disrupting the individuals’ careers. Different compensation
and lodging issues arise with shorter-term assignment. But success with
shorter assignments requires planning to address such issues as housing,
travel, return trips, compensation, and health and safety concerns.

Another means of providing global experience is through the use

of multi­cultural or transnational teams. These, teams may be temporary
or somewhat permanent, formed to solve a specific problem or to handle
ongoing activities. They often include headquarters representatives, host-
country nationals, and third-country nationals. They are useful not only
as potentially valuable business units, but also as development vehicles for
leaders.

Recruiting for Global Assignments

Recruiting employees for global assignments requires approaches

and understanding different from the typical recruiting efforts in a
home-country setting. The recruiting processes must consider cultural
differences, laws, and language considerations. For instance, in Eastern
Europe potential recruits like to work for European and U.S. firms, so
recruiters emphasize the “western” image. In Hong Kong recruiting ads
often stress success factors by showing “typical employees” of a firm
wearing expensive watches and stylish clothes.

The growth of the Internet has made global recruiting much more
accessible, particularly for individuals in search of professional management
jobs. Those individuals and more technologically knowledgeable
candidates can be reached using Internet advertising. Global search firms
also can be used to locate specialized global managerial talent.

Selection for Global Assignments

The selection process for an international assignment should

provide a realistic picture of the life, work, and culture to which the
employee may be sent. HR managers start by preparing a comprehensive
description of the job to be done. This description notes responsibilities

274
 Notes
that would be unusual in the home nation, including negotiating with
public officials; interpreting local work codes; and responding to ethical,
moral, and personal issues such as religious prohibitions and personal
freedoms.

Cultural Adjustment
Personal Characteristics
Cultural awareness
Flexibility and risk taking
Cultural adaptability
Emotional stability
Diversity acceptance
Ambiguity tolerance
Global experiences
Physical/stress coping

Successful
Global
Employees

Communication Skills
Organizational Requirements Language capabilities
Organizational knowledge Nonverbal awareness
Technical abilities Coaching and listening skills
Job-related skills Conflict resolution abilities

Figure shows the most frequently cited key competencies for successful global
employees.

Cultural Adjustment

Crucial to global success for individuals is how they adjust to the

cultural differences in their foreign assignments. Prior global experiences,
even foreign vacation travel, can be explored as part of the selection process
to gain insights on how culturally adaptable individuals are. Awareness
of cultural issues and differences and acceptance of diverse cultural and
customs are important areas to explore. Throughout the selection process,
especially in the selection interviews, it is crucial to assess the potential
employee’s ability to accept and adapt to different customs, management
practices, laws, religious values, and infrastructure conditions.

275
Notes
However, individuals with different cultural backgrounds must
be considered as well. For instance, the U.S. emphasis on assertiveness,
individualism, and independence may lead the U.S. interviewers to
expect applicants to exhibit those characteristics. But in some Asian
cultures deference to authority and conflict avoidance may result in Asian
candidates not displaying the “American characteristics” in selection
interviews. Therefore, if the candidates are to be placed in China or Japan,
the interviewers’ styles and expectations may need to be altered.

Organizational Requirements

Many global employers find that knowledge of the organization

and how it operates is as important as cultural adjustment factors in
determining global assignments success. Interacting with managers in
the home country, representing the firm in the foreign locations, and
managing foreign employees all require some understanding of the firm’s
products, services, organizational “politics,” and policies.

As with any job, the individuals must have the needed technical
abilities and meet the job-related KSAs to be successful in work. However,
simply meeting organizational requirements may not be sufficient for
ensuring global assignment success. For this reason, the selection process
for someone from inside the company must also assess the other factors
shown in Figure. For candidates from outside the organization, industry
knowledge may be helpful, but a realistic preview of the organization is
essential in order to determine person- organization fit.

Personal Characteristics

The experiences of many global firms demonstrate that the best

employees in the home country may not be the best employees in a global
assignment, primarily because of personal characteristics of individuals. A
number of identified personal characteristics contribute to the success of
global employment. The stress of living and working in foreign countries
requires people who exhibit emotional stability, adjusting to different
cultures as challenges, and enjoy the risks associated with those challenges.
Also, the physical demands of travel, jet lag, time zone changes, long work
hours, and frequent business meetings and dinners place significant stress
on global employees.

276
 Notes
During the selection process many global employers use personality
tests and other assessment in order to assess candidates’ suitability
for global assignments. For example, Motorola uses intelligence and
personality tests, as well as assessment centers and role-playing exercises
to assess potential candidates for global assignments. The importance
of assessing personality characteristics was underscored by a study that
found that extroversion, agreeableness, and emotional stability increased
the desire of expatriates to complete their global assignments.

Communication Skills

One of the most basic skills needed by expatriate employees is the

ability to communicate orally and in writing in the host-country language.
Inability to communicate in the local language may significantly inhibit
the success of an expatriate. Numerous firms with international operations
select individuals based on their technical and managerial capabilities and
then have the selected individuals take foreign language training.

But in any language, communication includes far more than simple

vocabulary. Nonverbal communications through greetings, gestures, pace,
and proximity all vary in different countries. Interacting with other people
through coaching and listening skills is at least as important as speaking
the language. Conflict resolution abilities are essential, particularly given
different cultural values regarding conflict. For example, in some Western
countries, the individual parties address conflicts directly and forcefully.
In many other cultures conflicts go un attended, and conflict resolution
often requires more time and extensive communications sensitivities.

Personal/Family Factors

The preferences and attitudes of spouses and other family members

also present major staffing considerations. Two of the most common reasons
for turning down international assignments are family considerations and
spouses’ careers. Many expatriates are married, and three-fourths of the
married expatriates are accompanied on overseas assignments by their
spouses and 60% bring children with them. Also, the growth in dual-career
couples complicates the transfer of international employees, particularly
with the work-permit restrictions which are common in many countries.
Notice that person/family concerns top the list, followed by factors related

277
Notes
to candidate selection and the job not meeting individuals’ expectations.
Since the personal/family factors play a large role in the success of global
employees, the selection process may include interviews of spouses,
partners, and even children. If significant resistance or opposition to
accepting a global relocation and adapting to different cultures will create
family conflicts, then there is a greater likelihood that the global employee
will not complete the assignment or will not be as successful.

Global Assignment Management

Once employees have been selected for international assignments,

continuing organizational support for the employees is crucial. The
intention of expatriates to quit and their commitment to their organizations
are affected by how they view the support given to them by their employers
That is why management of global assignments is so important As Figure
indicates, there are two major phases in the cycle of global assignment
management, The first phase is expatriation, in which an organization
prepares and sends global employees to their foreign assignments, once
the employee needs continuing support and development, as discussed
later in the chapter. Upon completion of this assignment repatriation
occurs. Repatriation involves planning, training, and reassignment of
global employees to their home countries. It should also be noted that if
the global employee is being sent to a third-country, then must begin as
part of repatriation actions.

Global Assignment Management Cycle

Adopted from Mathis & Jackson (2005). Human Resource Management, 10e. Thomson
South-Western

278
 Notes
Pre-departure orientation and training

The orientation and training that expatriates and their families

receive before departure significantly affect the success of the overseas
assignment. Unfortunately, various surveys have found that only 50% to
60% of global employers provide formal training programs for expatriates
and their families. When offered, most expatriates participate in this
training, which generally produces a positive effect on cross-cultural
adjustment.

The most common topics covered in pre-departure training are

Daily living conditions, Cultural customs, Business issues, Country history,
Geographical climate, Transportation and communication systems

Individuals selected to work outside their home countries need

answers to many specific questions about their host countries. Training in
various areas aids the adjustment of expatriates and their families to deal
with host-country counterparts. Training in customs and practices can
be especially valuable to individuals who will not live outside the home
country but will travel to other countries for business purposes.

Intercultural Competence Training

Growing number of global employers are providing intercultural

competence training for their global employees. Intercultural competence
incorporates a wide range of human social skills and personality
characteristics. There are three components of intercultural competence
require attention when training expatriates for global assignments:

➢➢ Cognitive: What does the person know about other cultures?

➢➢ Emotional: How does the person view other cultures and how much
sensi­tivity exists to cultural customs and issues?
➢➢ Behavioral: How does the person act in intercultural situations?

But knowing about the country and one’s abilities may not be
sufficient. A growing number of global employers are using training
methods that allow individuals to behave in international situations and
then receive feedback. One of the most popular methods in the Culture
Assimilator used worldwide, especially by European-based firms, the

279
Notes
Culture Assimilator is a programmed training and learning method
consisting of short case studies and critical incidents. The case studies
describe intercultural interactions and potential misunderstandings on
the part of expatriates and host-country nationals. Each case study centers
around some situation or difficulties experienced by an expatriate, a
host national, or both. The incidents are analyzed after the answers are
given and they are discussed and evaluated from the two viewpoints: the
original home-country culture and the target host-country culture. The
assumption behind Culture Assimilator training is that as the trainees
receive feedback on their responses, they begin to understand both the
cognitive and emotional facets of the target culture. This understanding
allows them to subsequently select more appropriate behavioral responses
during their global assignments.

Expatriate Support and Development

There are several areas that affect the cross cultural adjustment
process. To get global employees to their new assignments requires
planning relocation efforts including moving their possessions, selling
their existing homes, obtaining new housing, and other activities. Once
global employees arrive in the host country, they need assistance in
“settling in.” Arrangements should include someone to meet them and
assist them. Basics such as obtaining housing, establishing bank accounts,
obtaining driver’s licenses, arranging for admissions to schools for
dependent children, and establishing a medical provider relationship need
to be part of international relocation. But differences in culture, language,
and laws may complicate these activities in a foreign country. The sooner
the expatriates and their families establish a normal life, the better the
adjustment will be, and less likely that expatriate failure will occur (Figure
is given below).

Continuing Employee Communications and Support

Continuing home-office support helps to reduce premature

assignment departure. One of the greatest deterrents to accepting foreign
assignments comes from employees’ concerns that they will be “out of sight,
out of mind.” If they do not have direct and regular contact with others at
the corporate headquarters, expatriates can feel isolated and left out of
important company activities. The growth of the Internet and company

280
 Notes
intranets helps alleviate some of the communication concerns. Personal
contact through phone conversations also is important, but may be difficult
due to time zone differences and the quality of telecommunications
services in some lesser-developed countries.

Continuing Career Development

Many expatriates experience anxiety about their continued career

progression. Therefore, the international experiences of expatriates must
offer benefits to the employer and to the expatriate’s career. Firms sometimes
address this issue by inviting the expatriates back for development
programs and through regular interactions with other company managers
and professionals. Another useful approach is to establish a mentoring
system which matches an expatriate with a corporate executive in the
headquarters.

This executive talks with the expatriate frequently, ensures that
the expatriate’s name is submitted during promotion and development
discussions at the headquarters, and resolves any headquarters-based
problems experienced by the expatriate.

Repatriation

The process of repatriation, whereby expatriates are brought

home or moved to other global assignments, must address potential
difficulties that can arise when it is time to bring expatriates home. For
example, expatriates no longer receive the special compensation packages
often available to them during their assignments, which mean that the
expatriates experience a net decrease in total income, even if they receive
promotions and pay increases.

Back in the home organization, repatriate employees must readjust

to a closer working and reporting relationship with other corporate
employees. Often, expatriates have a greater degree of flexibility, autonomy,
and independent decision making than their counterparts in the United
States. Another major concern focuses on the organizational status of
expatriates upon return. Many expatriates have concerns about what jobs
they will have, whether their international experiences will be valued,
and how they will be accepted back into the organization. Unfortunately,

281
Notes
surveys reveal that almost half of expatriates feel that their employers do
a poor job of repatriation. To counter these concerns, some companies
provide career planning, the mentoring programs, and even guarantees of
employment upon completion of foreign assignments.

Expatriate Adjustment Stages

Adopted from Mathis & Jackson (2005). Human Resource Management, 10e. Thomson
South-Western

Summary

Benchmarking is the process which compares specific measures

or performance against data on those measures in other “best practices”
organizations. Return on investment (ROI) and economic value added
(EVA) are two related approaches to measuring the contributions and the
cost of HR. Global population changes, Global economic interdependence,
Regional alliances and Global communications have their impact on
HRD. Staffing global assignments involves selecting, placing, and locating
employees in other countries. International employees typically are
placed in three different classifications i.e. Expatriates, Host-Country
Nationals, and Third-Country Nationals. Recruiting employees for global
assignments requires approaches and understanding different from the
typical recruiting efforts in a home-country setting.

282
 Notes

Lesson 5.3 - Diversity of Workforce

Learning Objectives

After reading this unit, you may be able to

➢➢ Describe Cultural Diversity

➢➢ Cross Cultural Education and Training Programs
➢➢ Understand the Management of Diversity
➢➢ Describe HRD Programs for Diversified Employees

Introduction

In order to organizations to compete successfully in a global

economy, they must be able to attract and retain the best employees
possible. For most organizations, this means recruiting and hiring a
more diverse workforce. Organizations have recognized the demographic
changes that have occurred in the workforce over the past forty years. In
response to the civil rights and feminist movements, as well as the equal
employment legislation that began in the 1960s many organizations
established programs to facilitate the recruitment and retention of
qualified women and minorities. The inclusion of women, minorities, and
other underrepresented groups have made organizations more culturally
diverse.

Cultural Diversity

Cultural diversity is defined as the existence of two or more persons

from different cultural back ground in any single group or organization.
Most organizations are culturally diverse because their employees are
from different cultural subgroups (whether gender, race, ethnic origin,
etc.). But even if an organization is culturally diverse, it may not be aware
of or acknowledge this diversity.

283
Notes
Valuing Differences and Diversity Training

Barbara Walker, former manager of the International Diversity

Program at Digital Equipment Corporation, is credited with coining the
phrase “valuing differences” in the 1980s. Her approach was to create an
environment in which each person’s cultural differences are respected.
Valuing differences soon became popularized as diversity training. The
diversity training movement gained momentum when the Hudson Institute
published a report in 1987 that predicted that women and minorities
would represent 85 percent of all net new entrants in the labor force by
the year 2000. This prediction led to a sense of urgency by employers who
felt they were ill prepared to handle this kind of change. It also resulted
in the proliferation of diversity consultants and programs (e.g., cultural
sensitivity training), many of which came with a large price tag.

It is estimated that 72 percent of organizations conducted diversity

training in 2003. Diversity training programs vary in scope and length.
At one extreme there are one- to three-day programs for managers that
designed to transform them into culturally sensitive people. Most of these
are one-shot programs that have no follow-up to reinforce the issues raised
in training. For example, US WEST developed a diversity program that
includes two kinds of training: (1) a three-day program called managing
a Diverse Workforce for managers and union stewards and (2) a one-day
version called “The Value of Human Diversity” for the remaining 65,000
employees. Other organizations have used a different approach that include
a strategy to foster long-term cultural change. For example, Pacific Gas &
Electric created a program based on the assumption that a cadre of internal
trainers is needed to cultivate a multicultural organization. Employees are
selected to attend a six-day certification (“train-the-trainer”) diversity
awareness program and, upon graduation, are expected to champion
diversity in their day-to-day interactions with others.

Managing Diversity

Thomas defines managing diversity as “a comprehensive managerial

process for developing an environment (organizational culture) that works
for all employees.” This approach goes beyond both affirmative action and
valuing diversity because it focuses on building a positive environment for
everyone and on full utilization of the total workforce. It does not exclude

284
 Notes
women or minorities, nor does it exclude whites or males. It is an attempt
to create a level playing field for all employees without having regard for
cultural distinction. Coming to an agreement on the definition of diversity
can be a very difficult task, as many experienced trainers will attest.
However, one recent article defined it as “the commitment on the part
of organizations to recruit, retain, reward, and promote a heterogeneous
mix of productive, motivated, and committed workers including people of
color, whites, females, and the physically challenged.” To do this, managing
the diversity approach requires (1) a long- term commitment to change; (2)
substantive changes in organizational culture; (3) a modified definition of
leadership and management roles; (4) both individual and organizational
adaptation; and (5) structural changes.

The long-term commitment to change, particularly from top

management, is necessary to allow sufficient time and resources to bring
about a change in organizational culture. For example, Pillsbury has created
the three-year objectives for its division heads for managing diversify:

1. To develop and implement strategic plans for creating more

culturally diverse organizations
2. To increase leaders’ and managers’ knowledge and skills in managing
a culturally diverse workplace
3. To attract, motivate, and retain women and people of color

To achieve these objectives, managers must be totally committed

to the program. Commitment from key organizational members (top
managers, union leaders, etc.) is an important part of managing diversity.

A substantive change in culture is necessary if an organization

expects to change the underlying assumptions, values, and beliefs that
have fostered sexist and racist attitudes. Employees must learn to be more
understanding of language and cultural differences and be able to identify
and reject cultural stereotypes. Most organizations that have developed
managing diversity programs rely on education and training programs,
much as the valuing differences approach does. For example, organizations
like Avon, Apple Computer, and Xerox have made diversity education the
cornerstone of their managing diversity programs.

285
Notes
Modified definitions of leadership and management roles are
needed to accommodate the changes in organizational culture. Not only
is it important that management roles be redefined during the change
process, they may also be redefined as part of managing diversity program.
For example, managers may be required to serve as formal mentors to
one or more of the women and minorities in their organization. Other
organizations may require managers to lead a diversity core group. To
ensure that these roles are institutionalized, some organizations have
created a new corporate office for managing diversity. This office gives the
program high visibility, and ensures that all activities are coordinated.

Managing diversity requires both individual and organizational

adaptation, because as the organizational culture undergoes a redefinition
and begins to take on new characteristics, employees must be able to adapt
to these changes. How well the organization and its employees adapt to
this is highly dependent on the management and leadership of the change
process. Sufficient support systems must be available for people who are
not sure about what is expected of them and how to adapt to these new
expectations. For example, some employees may feel this program is
affirmative action under a new name. Managers must be able to reinforce
the point that a managing diversity favors no subgroup.

Structural changes are necessary to accommodate the changes in

management and leadership roles and changes in individual expectations.
For example, several structural changes within the HRD function may
need to be made. These include (1) developing new policies that support
the management of diversity initiative; (2) changing formal orientation
programs to place more emphasis on diversity issues; (3) developing
formal career development programs; (4) adding a diversity component
to some of the ongoing training programs, particularly management and
supervisory training; and (5) developing a diversity resource library for all
types of ongoing diversity programs.

Effectiveness of managing diversity programs

There is growing awareness of the need to address diversity issues.

Many organizations have achieved success with such programs. However,
a problem with managing diversity is the resistance of long- held attitudes
to change. Even when organizations bolster their change strategy with

286
 Notes
diversity education and training programs, there is no guarantee that all
employees will place the same value on learning about their own attitudes
and about other cultures, particularly if they feel they have nothing in
common with members of those cultures. The fact remains that people
tend to feel most comfortable among those with whom they have things in
common (e.g., common cultural attributes).

This perceived backlash should not be ignored in a process of forced

change. Resistance to change is rooted in personal values, beliefs, and
attitudes. To overcome this resistance, we feel that organizations should
consider introducing multiculturalism through a planned change strategy.
This would entail making use of theories and interventions. Further,
there is a growing body of work that provides guidance concerning how
organizations can manage diversity in a way that is strategic, proactive,
and more grounded in solid empirical and theoretical research than has
typically been true to date.

Cross-cultural Education and Training Programs

Globalization is increasingly being linked to diversity management

efforts. The argument is that a multicultural perspective is needed for
organizations to successfully compete in the global marketplace. To
prepare these individuals for their assignments, many organizations are
providing cross-cultural training. Most cross-cultural awareness training
programs deal with at least four elements:

1. Raising the awareness of cultural differences

2. Focusing on ways attitudes are shaped
3. Providing factual information about each culture
4. Building skills in the areas of language, nonverbal communication,
cultural stress management, and adjustment adaptation skills

To raise the awareness of cultural differences discussion should

focus on understanding the assumptions, beliefs, and values people have
about other cultures. Without first developing insight into these elements,
it will be difficult for people to value cultural differences. For example,
people from Japan and some other Asian countries may have difficulty
in assimilating with the aggressiveness that is common in many U.S.

287
Notes
workplaces. Without understanding these differences, Americans may
misinterpret the motive of a Japanese manager who is unwilling to confront
an American worker who has been overtly aggressive toward him.

Programs that focus on how attitudes are shaped help people to

understand how cultural stereotypes are formed and the destructiveness
of cultural bias. Even though people may understand cultural differences,
they may not understand how assumptions, values, and beliefs underlie
sexist and racist attitudes. For example, a male manager may take extra
effort to understand gender differences and learn to value women’s
contributions at the workplace. However, since there are a limited number
of female managers, he may assume that most women lack the desire
(or ability) to become managers. This assumption may result in his not
actively encouraging female subordinates in developing the skills needed
to qualify for a management position. This may serve to create a glass
ceiling. Without focusing on how these attitudes are developed, it will be
difficult to change them.

Providing factual information about each culture is necessary to

reinforce new assumptions, values, beliefs, and attitudes about different
cultures. When people are strongly ethnocentric i.e. feeling that their
culture is superior to others, training may be provided, with the goal of
reinforcing that every culture has its own unique and valuable experiences,
perspectives, and styles of approaching problems. There is empirical
evidence suggesting that cultural diversity brings together different
experiences, perspectives, and styles that can be used for approaching
problems and situations resulting in increased productivity. People need
to know what these strengths are and how they can help individual workers
and the organization to do a better job.

Programs that build skills in the areas of language, nonverbal

communication, cultural stress management, and adjustment adaptation
address critical interpersonal relations of employees both inside and outside
the organization. In order to establish effective relations with people,
they must learn as to how to communicate. Non­verbal communication,
including body language (e.g., gestures and handshakes), can be particularly
important. Part of the communication training effort should focus on
learning to understand cultural differences in body language and other
nonverbal communication when dealing with different cultural groups.

288
 Notes
Human resource development programs for culturally diversified
employees

The changing demographics of the workforce present both

opportunities and challenges to HRD professionals. One of the challenges
is seeking to remove all causes of discrimination. HRD professionals can
do at least two things. First, they must be willing to confront the underlying
assumptions, beliefs, and attitudes that foster bigotry and stereotyping that
exist within their organization. They can be advocates for people who are
the victims of discrimination and must be willing to fight for institutional
justice. Second, HRD professionals should examine their organization’s
practices in the areas of socialization, orientation, career development,
and sexual and racial harassment.

Socialization and Orientation

Socialization is the process by which an individual becomes

an insider through assimilation roles, norms, and expectations of the
organization. A new employee’s initial experiences in an organization are
particularly significant in influencing later decisions about career choices
and to re­main in an organization or not. For example, when learning
experiences are designed for new employees, the following issues should
be considered:

1. New employees (including women and minorities) may feel isolated

when their cultural differences prevent them from obtaining the
interesting and challenging work assignments that are needed to
learn important job-related skills and to qualify for promotions.
2. Women and minorities may experience additional stresses if they
feel they must become “bicultural” in order to be accepted by
coworkers in the majority group.
3. Women and minorities are sometimes held in higher standards
than other coworkers as they enter nontraditional occupations.

Failure to consider these issues can result in the loss of talented

employees

289
Notes
Some organizations have recognized the influences of cultural
differences on the socialization process and have taken steps to incorporate
them into their orientation and socialization practices. For example, Armco
Steel recognized that subtle attitudes and prejudices against women and
minorities had a negative effect on their upward mobility. Armco saw how
these attitudes and prejudices were manifested during the socialization
process. Specifically, it looked for ways in which existing employees could
serve as role models during the socialization process. Having role models
from one’s own race and gender can make it easier for new employees
to confront issues like sexism and racism without fearing reprisal from
coworkers

There is disagreement about the value of holding training and

orientation programs that are targeted to a segregated audience (e.g.,
women or minorities only) Some organizations believe that if the goal of
managing diversity is to get employees to work together, it is important
not to segregate women or minorities at any point in their development.
However, other organizations see such sessions as important in meeting the
special needs of these groups. Organizations like DuPont and GTE provide
additional classroom training for newly hired women, but the trend is to
avoid the impression of preferential treatment. Morrison and Von Glinow
have stated that, “Because women and minorities face special situations
as tokens, they may need to perfect certain competencies such as conflict
resolution.” While we agree that it may be beneficial for incoming women
and minorities to be given special awareness and training programs to
help them make the adjustment and deal with difficult cultural issues,
these programs should exist within an overall plan targeted toward all
employees to achieve the goal of multiculturalism.

Career Development

Most career development models and programs do not explicitly

deal with the special concerns of a culturally diverse workforce. Programs
that promote valuing differences and managing diversity can be useful
in creating a positive climate for career advancement. Although both of
these approaches rely on education and training to change some of the
underlying assumptions, values, and beliefs that sustain barriers like the
glass ceiling, only the managing diversity approach attempts to integrate
these efforts into the organizational strategy. For example, Jim Preston,

290
 Notes
former CEO of Avon, saw managing diversity as a significant part of his
organization’s business strategy, and stated that “if you are going to attract
the best . . . people into your organization, you’d better have a culture; you’d
better have an environment in which those people feel they can prosper
and flourish.”

Organizations can modify or create career development policies

and programs without using a managing diversity approach. However, if
sexist and racist attitudes are prevalent, an organization is less likely to
be successful using “traditional” career development techniques to help
advance the careers of women and minority employees. A “new” career
development program should include specific roles for managers (e.g.,
serving as mentors or advocates) and a formal role for HRD department
in monitoring the process.

Mentoring to Promote Diversity

Mentoring is a relationship between a junior and senior member

of the organization that contributes to the career development of both
members. There is some evidence to suggest that women see barriers to
mentoring because they feel that a male mentor might misconstrue their
request as a romantic or sexual gesture, are concerned about how others
feel about the relationship, and feel that the male mentor would reject
them.

In terms of minorities, a study found that the development of

minorities in organizations is affected by such things as the “absence of
mentors, less interesting or challenging work as a result of being in the out
group, and being left out of the informal social network.” This is supported by
research that has examined diversified mentoring relationships (i.e., those
made up of a majority member and minority member) and homogeneous
mentorship (i.e., those made up of both minority members and both
majority members). The findings show the following relationships:

➢➢ Minorities in homogeneous mentoring relationships receive more

psychosocial support (e.g., personal support, friendship) than those
in diverse mentoring relationships.
➢➢ Mentors are also better role models in homogeneous relationships.

291
Notes
➢➢ Psychosocial support existed in diverse relationship when both the
mentor and protégé showed the preferred strategy for dealing with
(racial) differences.

HRD professionals who design and implement mentorship
programs should be aware of these possibilities and attempt to construct
their programs in ways that maximizes the benefits and minimizes the
problems. Even though there are some inherent potential problems with
mentoring, the benefits outweigh the potential pitfalls, and that mentoring
should be part of the career development process.

Sexual and Racial Harassment Training

Reports of sexual harassment have remained high over the past

fifteen years. Organizations must take affirmative steps to deal with this
problem at the workplace. Recent court decisions make it clear that the
burden is on organizations to create a safe environment free from sexual
demands or hostile acts. Similar issues exist concerning racial and other
forms of harassment as well. For example, the Civil Rights Bureau for the
State of Wisconsin advocates a single organizational policy covering all
forms of workplace harassment.

A number of steps should be taken to implement training to reduce

workplace harassment. On the whole, the HRD process model discussed,
provides a framework for the issues that should be addressed in establishing
this sort of program. The four steps listed highlight some of the issues
specific to developing and delivering a sexual or racial harassment training
program:

1. Preparation of a policy and complaint procedure. Make sure the

harassment policy is up-to-date and can be understood by all
members of the organization. An appropriate policy should include
procedures for (1) defining the scope of responsibility, (2) prompt
and measured responses to claims of harassment, (3) authority to
address the issue, and (4) multiple avenues for filing complaints.
Some organizations have made the employees to sign a document
indicating that they have read and understood this policy.

292
 Notes
2. Assessment of the organizational climate. It is important to determine
if the organization is ready to accept the appropriate change,
particularly if such training is mandatory. Also, it is important to
survey the employees to see how they feel about harassment issues.
The data could be helpful for determining program content. For
example, if evidence shows that a number of supervisors try to
discourage formal complaints; the program may need to reinforce
supervisors’ legal responsibilities in this area.

3. Content of the training program. The program should describe

the current laws including interpretation of recent court decisions,
review of the organizational policy and procedures, communicate a
set of organizational standards of conduct, outline responsibilities
of supervisors, discuss methods of counseling or referring victims,
and address situations where harassment is likely to take place.

4. Selecting the trainer or trainers. Care must be taken in selecting

a trainer who has both expert knowledge of the law and an
understanding of the organizational politics. Many organizations
seek an outside consultant with legal experience in this area.

In addition, the issue of whether the training should be mandatory

or not should be assessed. As a rule, if there is sufficient evidence for
widespread harassment, training should be mandatory. These steps need
to be modified in situations where there is significant resistance to change.
If this is the case, organizations often take a more direct approach (e.g.,
zero tolerance) to ensure that this kind of discrimination is eliminated or
at least minimized.

Some organizations advocate zero tolerance, which suggests that

policies dealing with all forms of discrimination will not be accepted. In
this situation, the policies would probably include strong sanctions against
certain kinds of behavior, up to and including dismissal.

Even with a strong policy, however, it is recommended that training

and education be used as a vehicle for communicating the policy. The
long-term effectiveness of these kinds of interventions depends on the
continued commitment of top management.

293
Notes
Other Human Resource Management Programs and Processes

Many organizations have extended managing diversity programs

beyond HRD programs and processes by changing human resource
management (HRM) policies and programs to meet the special needs
of the new workforce. Through the development of affirmative action
and “diversity recruitment” programs, many organizations have been
able to develop effective recruitment methods that are more effective in
attracting qualified women and minority candidates. A growing number
of organizations are holding managers formally accountable for diversity
goals, for example, incorporating such goals into their performance
evaluation process.’ Further, the influx of women and minorities into
the workforce has led the organizations to modify some of their HRM
practices to meet the needs of a culturally diverse workforce. For example,
some organizations have devised flexible work schedules and child- care
programs directed at the growing number of working mothers who are
entering or reentering the workforce. IBM, after realizing that 30 percent
of its employees had child-care needs and an equal number had elder-care
responsibilities, revised its child-care program and established a program
for elder care.

Summary

Cultural diversity is defined as the existence of two or more

persons from different cultural groups in any single group or organization.
Managing diversity is a comprehensive managerial process for developing
an environment that works for all employees. Most cross-cultural awareness
training programs deal with raising the awareness of cultural differences,
focusing on ways attitudes are shaped, providing factual information
about each culture and building skills in the areas of language, nonverbal
communication, cultural stress management, and adjustment adaptation
skills. HRD professionals should examine their organization’s practices in
the areas of socialization, orientation, career development, and sexual and
racial harassment.

294
 Notes
Self Assessment Questions

1. What is meant Workforce reduction and realignment

2. Discuss the effects of Mergers and Acquisitions on employee
turnover
3. Explain the approaches of Downsizing
4. Discuss the determinants of employee retention
5. Define bench marking
6. How do you evaluate the cost of HR
7. Discuss the impact globalization on HRD
8. Explain global staffing
9. Explain classification of International employee
10. Explain the functions of HRD in the Global employment?
11. Define cultural diversity
12. Explain the cross cultural education and training programs
13. Explain HRD programs for managing diversity

CASE STUDY

In March 2006, some leading IT services companies in India such as

Wipro Technologies (Wipro) and IBM India dismissed several employees,
when they discovered that the information provided in the employees’
Curriculum Vitaes (CVs) was false. The companies also blamed some of
the recruitment agencies which had recruited the dismissed employees,
for helping them to fake their CV’s. These charges and allegations
highlighted the growing problem of fake CVs in the Indian job market. The
phenomenon of fake CVs was not just restricted to the software industry. It
was also prevalent in other sectors like ITeS, financial services, retail etc. It
was estimated that Rs 400 crores was spent by Indian companies for filling
200,000 jobs a year in these sectors and 10-12% of the selected candidates
had submitted false information in their CVs. However, the extent of
falsification was believed to be much higher in the IT and ITeS sectors as
they accounted for 50% of the 200,000 jobs and were highly attractive to
job seekers due to their high salary packages and other benefits.

The main areas for falsification were work experience, expertise

and skills, educational qualifications, and previous salary packages. It

295
Notes
was reported that in many cases the falsification of the CV’s was done
with active collaboration of recruitment agencies and at times even with
the knowledge and connivance of the company’s recruitment managers.
The boom in the Indian job market had resulted in the growth of the
recruitment industry and it was reported that 1,500 new recruitment
agencies were set up since 2004 to cater to the growing demand. The issue
of fake CVs highlighted concerns regarding the professional practices and
ethics of the recruitment agencies. Industries which used the services of
these agencies were concerned about the negative perceptions the issue
might create with customers based in foreign countries. They felt that this
problem, if unchecked, could negate India’s status as a favorable destination
for outsourcing of software and BPO services. The Executive Recruiters
Association (ERA), the association of the Indian recruitment industry,
expressed its regrets on this issue and promised strict action against the
erring member agencies.

1. Elucidate the problem in this case

2. State the ethical issues in this case.
3. Should the companies go for direct recruitment or outsource?
4. Suggest suitable methods for improving this situation

CASE STUDY

Automotive Components Limited is a major manufacturer of

automatic filters mostly used in automobiles of various types. It supplies
filters directly to automobile manufacturers in bulk quantity besides
supplying to the market for replacement .On one day two engineers from
a reputed engineering consultant came. They inspected the production
facilities and workshop; they came on the next two days also. During their
visit the atmosphere in the workshop was tense as the engineers made
several enquiries from the foreman of the workshop. Three days after the
last visit of these engineers a notice was put on the notice board asking the
workers to shut off motors and lights during the lunch break.

During the following week a rumor spread that the company was
not able to discharge its contractual commitments because of the technical
defects in the plant .Therefore a big order was likely to be cancelled
resulting into closure of the plant for some time. This period became quite

296