CHAPTER ONE: STAFFING MODELS AND STRATEGY
Learning Objectives * Define staffing and consider how, in the big picture, staffing decisions matter * Review the five staffing models presented, and consider the advantages and disadvantages of each * Consider the staffing system components and how they fit into the plan for the book * Understand the staffing organization model and how its various components fit into the plan for the book * Appreciate the importance of staffing strategy, and review the 13 decisions that staffing strategy requires * Realize the importance of ethics in staffing, and learn how ethical staffing practice is established
Introduction
* Staffing is a critical organizational function concerned with the acquisition, deployment, and retention of the organization’s workforce. * Staffing is arguably the most critical function underlying organizational effectiveness, because “the people make the place,” because labor costs are often the highest organizational cost, and because poor hiring decisions are not easily undone. * Five models * The first model shows how projected workforce head-count requirements and availabilities are compared to determine the appropriate staffing level for the organization. * The next two models illustrate staffing quality, which refers to matching a person’s qualifications with the requirements of the job or organization. * The person/job match model is the foundation of all staffing activities; the person/organization match model shows how person/job matching should extend to how well the person will also fit with the organization. * The core staffing components model identifies recruitment, selection, and employment as the three key staffing activities and it shows that both the organization and the job applicant interact in these activities. * The final model, staffing organizations, provides the entire framework for staffing and the structure of this book. It shows that organizations, human resources (HR), and staffing strategy interact to guide the conduct of staffing support activities (legal compliance, planning and job analysis) and core staffing activities (recruitment, selection, and employment); retention and staffing system management are shown to cut across both types of activities. * 13 strategic staffing decisions that confront any organization; several of the decisions pertain to staffing levels, and the remainder to staffing quality * Staffing ethics—the moral principles and guidelines for acceptable practice
THE NATURE OF STAFFING
The Big Picture * Organizations are combinations of physical, financial, and human capital. * Human capital refers to the knowledge, skill, and ability of people and their motivation to use them successfully on the job. * The term “workforce quality” refers to an organization’s human capital. The organization’s workforce is thus a stock of human capital that it acquires, deploys, and retains in pursuit of organizational outcomes such as profitability, market share, customer satisfaction, and environmental sustainability. * Staffing is the organizational function used to build this workforce through such systems as staffing strategy, HR planning, recruitment, selection, employment, and retention. * National Level: 112+ million collective workforces of US organizations (down from a peak of 140 million-2005) with employees spread across nearly 7.5 million work sites. * 18% of employees in work sites of fewer than 20 employees, * 31% in work sites between 20 & 500 employees * 51% in work sites over 500 employees * Great Recession (2007-2009): There were more than 4 million new hire transactions nationally each month, or over 50 million annually. * For most organizations, a workforce is an expensive proposition and cost of doing business. It is estimated that an average organization’s employee cost (wages or salaries and benefits) is over 22% of its total revenue. The percentage is much greater for organizations in labor-intensive industries—the service-providing as opposed to goods-producing industries—such as retail trade, information, financial services, professional and business services, education, health care, and leisure and hospitality. Since service-providing industries now dominate our economy, matters of employee cost and whether the organization is acquiring a high-quality workforce are of considerable concern. * A shift is gradually occurring from viewing employees as just a cost of doing business to valuing employees as human capital that creates competitive advantage of which is driven by highly knowledgeable employees with fine-tuned customer service skills, have a definite and hopefully long-term leg up on their competitors. The competitive advantage derived from such human capital has important financial implications. * In addition to direct bottom-line implications, an organization’s focus on creating an effective selection system also has more indirect implications for competitive advantage by enhancing employees’ well-being and retention.
Definition of Staffing * Staffing is the process of acquiring, deploying, and retaining a workforce of sufficient quantity and quality to create positive impacts on the organization’s effectiveness.
Implications of Definition
Acquire, Deploy, Retain * Acquisition activities involve external staffing systems that govern the initial intake of applicants into the organization. These involve planning for the numbers and types of people needed, establishing job requirements in the form of the qualifications or KSAOs (knowledge, skill, ability, and other characteristics) needed to perform the job effectively, establishing the types of rewards the job will provide, conducting external recruitment campaigns, using selection tools to evaluate the KSAOs that applicants possess, deciding which applicants are the most qualified and will receive job offers, and putting together job offers that applicants will hopefully accept. * Deployment refers to the placement of new hires in the actual jobs they will hold, something that may not be entirely clear at the time of hire, such as the specific work unit or geographic location. Deployment also encompasses guiding the movement of current employees throughout the organization through internal staffing systems that handle promotions, transfers, and new project assignments. Internal staffing systems mimic external staffing systems in many respects, such as planning for promotion and transfer vacancies, establishing job requirements and job rewards, recruiting employees for promotion or transfer opportunities, evaluating employees’ qualifications, and making job offers to employees for new positions. * Retention systems seek to manage the inevitable flow of employees out of the organization. Sometimes these outflows are involuntary on the part of the employee, such as through layoffs or the sale of business unit to another organization. Other outflows are voluntary in that they are initiated by the employee, such as leaving the organization to take another job (a potentially avoidable turnover by the organization) or leaving to follow one’s spouse or partner to a new geographic location (a potentially unavoidable turnover). Of course, no organization can or should seek to completely eliminate employee outflows, but it should try to minimize the types of turnover in which valued employees leave for “greener pastures” elsewhere—namely, voluntary-avoidable turnover. Such turnover can be very costly to the organization, as can turnover due to employee discharges and downsizing. Through various retention strategies and tactics, the organization can combat these types of turnover, seeking to retain those employees it thinks it cannot afford to lose.
Staffing as a Process or System * Staffing is a process that establishes and governs the flow of people into the organization, within the organization, and out of the organization. Organizations use multiple interconnected systems to manage the people flows. * Planning * Recruitment * Selection * Decision making * Job offer * Retention systems * (Occurrences or actions in one system inevitably affect other systems.)
Quantity and Quality * Staffing the organization requires attention to both the numbers (quantity) and the types (quality) of people brought into, moved within, and retained by the organization. * The quality element refers to having enough people to conduct business, and the quality element refers to having people with the requisite KSAOS so that jobs are performed effectively. It is important to recognize that it is the combination of sufficient quantity and quality of labor that creates a maximally effective staffing system
Organization Effectiveness * Staffing systems exist and should be used to contribute to the attainment of organizational goals such as survival, profitability, and growth. A macro view of staffing like this is often lost or ignored because most of the day-to-day operations of staffing systems involve micro activities that are procedural, transactional, and routine in nature. While these micro activities are essential for staffing systems, they must be viewed within the broader macro context of the positive impacts staffing can have on organization effectiveness. * Leadership talent is at a premium, with very large stakes associated with new leader acquisition. Sometimes leadership talent is bought and brought from the outside to hopefully execute a reversal of fortune for the organization or a business unit within it. Organizations also acquire leaders to start a new business units or ventures that will feed organizational growth. The flip side of leadership acquisition is leadership retention. A looming fear for organizations is the unexpected loss of a key leader, particularly to a competitor. The exiting leader carries a wealth of knowledge and skill out of the organization and leaves a hole that may be hard to fill, especially with someone of equal or higher leadership stature. The leader may also take other key employees along, thus increasing the exit impact. * Organizations recognize that talent hunts and loading up on talent are ways to expand organization value and provide protection from competitors. Such a strategy is particularly effective if the talent is unique and rare in the marketplace, valuable in the anticipated contributions to be made (such as product creations or design innovations), and difficult for competitors to imitate (such as through training current employees). Talent of this sort can serve as a source of competitive advantage for the organization, hopefully for an extended time period. * Talent acquisition is essential for growth even when it does not have such competitive advantage characteristics. As hiring has steadily picked up since the Great Recession ended, many companies are scrambling to staff positions in order to keep up with demand. * Finally, for individual managers, having sufficient numbers and types of employees on board is necessary for the smooth, efficient operation of their work units. Employee shortages often require disruptive adjustments, such as job reassignments or overtime for current employees. Underqualified employees present special challenges to the manager, as they need to be trained and closely supervised. Failure of the underqualified to achieve acceptable performance may require termination, a difficult decision to make and implement.
Staffing System Examples Staffing Jobs Without Titles * W.L. Gore & Associates: associates and sponsors-you get to be a team leader if your team asks you to lead them * Egalitarian, entrepreneurial approach Pharmaceutical Industry Managers * Pfizer: hiring employees who can jump from one position to another, focus less on job descriptions and more on general competencies that will translate from job to job Management Trainees * Enterprise Rent-A-Car: relies heavily on recruiting recent college graduates. (8000-9000 a year) New hires enter Enterprise’s management training program, where they learn all aspects of running a branch, from taking reservations, picking up customers, developing relationships with car dealerships and even washing cars. Promotions from within and strictly performance based. * Strategies: recruiting from an internship program of approx. 1000 students a year, attending college recruitment fairs, using its website to highlight its performance-driven culture as well as employee testimonials, and devoting a large percentage of its television advertising to the NCAA basketball tournament that occurs each March and has a high college viewership. –Communications are essential
STAFFING MODELS
Staffing Quantity: Levels * The quantity or head-count portion of the staffing definition means organizations must be concerned about staffing levels and their adequacy. If head-count requirements match availabilities, the organization will be fully staffed. If requirements exceed availabilities, the organization will be understaffed, and if availabilities exceed requirements, the organization will be overstaffed.\Making forecasts to determine appropriate staffing levels and then developing specific plans are the essence of planning. Begin understaffed means the organization will have to gear up its staffing efforts, starting with accelerated recruitment and carrying on through the rest of the staffing system. It may also require developing retention programs that will slow the outflow of people, thus avoiding costly “turnstile” or “revolving door” staffing. Overstaffing projections signal the need to slow down or even halt recruitment, as well as to take steps to reduce head count, perhaps through early retirement plans or layoffs.
Staffing Quality: Person/Job Match * The person/job match seeks to align characteristics of individuals with jobs in ways that will result in desired HR outcomes. Casual comments made about applicants often reflect awareness of the importance of the person/job match. * First, jobs are characterized by their requirements (e.g., interpersonal skills, previous budgeting experience) and embedded rewards (e.g., commission sales plan, challenge and autonomy). Second individuals are characterized by their level of qualifications (e.g., few interpersonal skills, extensive budgeting experience) and motivation (e.g., need for pay to depend on performance, need for challenge and autonomy). Third, in each of the previous examples the issue was likely degree of fit or match between the characteristics of the job and the person. Fourth, there are implied consequences for ever match. * 1.3: * First: The view is that the positive interaction of individual and job characteristics creates the most successful match. Thus a person with a given package of KSAOs is not equally suited to all jobs, because jobs vary in the KSAOs required. Likewise, an individual with a given set of needs or motivations will not be satisfied with all jobs, because jobs differ in the rewards they offer. Thus, in staffing, each individual must be assessed relative to the requirements and rewards of the job being filled. * Second: the model emphasizes a dual match of KSAOs to requirements and motivation to rewards. Both matches require attention in staffing. By ignoring or downplaying the motivation/rewards portion of the match, the organization may have difficulty getting people to accept job offers (an attraction outcome) or having new hires remain with the organization for any length of time (a retention outcome). It does little good to identify the likely high performers if they cannot be induced to accept job offers or to remain with the organization * Third: job requirements should be expressed in terms of both the tasks involved and the KSAOs needed to perform those tasks. Most of the time, it is difficult to establish meaningful KSAOs for a job without having first identified the job’s tasks. KSAOs usually must be derived or inferred from knowledge of the tasks. An exception to this involves very basic or generic KSAOs that are reasonably deemed necessary for most jobs, such as literacy and oral communication skills. * Fourth: job requirements often extend beyond task and KSAO requirements. Matching an individual to these requirements must also be considered when staffing the organization. * Finally: the matching process can yield only so much by ways of impacts on the HR outcomes. The reason for this is that these outcomes are influenced by factors outside the realm of the person/job match. Retention, for example, depends not only on how close the match is between job rewards and individual motivation but also on the availability of suitable job opportunities in other organizations and labor markets. As hiring begins to improve and unemployment continues to drop, organizations are likely to face increased retention pressures as other opportunities present themselves to employees that were not previously present when economic conditions were poorer.
Staffing Quality: Person/Organization Match * Often the organization seeks to determine how well the person matches not only the job but also the organization, in addition to how well they match the specific job’s requirements and rewards. * Exhibit 1.4 * Organizational values are norms of desirable attitudes and behaviors for the organization’s employees. Ex: honesty and integrity, achievement and hard work, and concern for fellow employees and customers. * New job duties are tasks that may be added to the target job over time. Organizations desire new hires who will be able to successfully perform these new duties as they are added.
Staffing System Components
Staffing Organizations Organization, HR, and Staffing Strategy Support Activities Core Staffing Activities Staffing and Retention System Management
STAFFING STRATEGY
Staffing Levels Acquire or Develop Talent Hire Yourself or Outsource External or Internal Hiring Core or Flexible Workforce Hire or Retain National or Global Attract or Relocate Overstaff or Understaff Short- or Long-term Focus
Staffing Quality Person/Job or Person/Organization Match Specific or General KSAOs Exceptional or Acceptable Workforce Quality Active or Passive Diversity
STAFFING ETHICS
PLAN FOR THE BOOK