An Effective HR System: Employment Opportunity Law - Research Paper Example

and number] of paper] [Facilitator's submitted] Human Resource One needs to be aware of the basics of federal equal employment opportunity law so that one can extend HR systems that are dependable with legal requirements and make HR decisions that are legally defensible. Violating equal employment opportunity law can be very costly. Workers who claim that they've been discriminated against are winning many of their cases, and the financial awards they are getting are making employers gasp. In November 2000, Coca-Cola agreed to pay $192 million to settle charges of racial discrimination brought by a group of African American workers, and one is seeing multimillion-dollar verdicts even in cases involving a single employee. And that's just the financial cost-imagine the cost to one's company's reputation that can result from discrimination charges. (Sparrow, 2004) As one learns about equal employment opportunity law, one will see that employment laws generally emphasize what one cannot do as a manager. As long as a company's practices do not violate equal employment opportunity law, it's left up to the company's management to decide how to best recruit, select, and just generally manage workers. In other words, a legally defensible HR system is only the foundation of an effective HR system, not the endpoint. Once got the basics of equal employment opportunity law, one can build on that and discuss HR practices that are legally defensible and effective. The legal environment in the United States operates on multiple levels. At the highest level are federal laws. But there are also laws operating at the state and local levels. These state and local laws are generally consistent with the federal laws. However, many states and localities have passed equal employment opportunity legislation that offers workers greater protection than federal law. For instance, while federal equal employment opportunity legislation does not protect workers from discrimination based on sexual orientation, many states and localities do offer that protection. Organizations operating in the United States, regardless of their country of incorporation, must fulfill with federal equal employment opportunity laws. U. S. companies with offices or plants in foreign locations must comply with both U. S. and host-country requirements in their overseas locations. All these laws are administered by the Equal Employment Opportunity Commission (EEOC). The EEOC is the federal agency responsible for enforcing equal employment opportunity law and hearing employee complaints. A person, who thinks that he or she has been discriminated against, and wants to file a formal claim against the offending company, first has to go to the EEOC. If the EEOC thinks the claim has some merit, the agency will try to help the two parties to reach a mutually agreeable settlement. If a settlement cannot be reached, the EEOC can pursue the case in court on behalf of the claimant, or can give the claimant permission to pursue the case on his or her own. During the 2001 fiscal year, the EEOC received 80,840 charges of discrimination. (Sparrow, 2004) With that many claims to investigate, there's no way that the EEOC could possibly shepherd each of those individual claims through the legal system. Instead, the EEOC emphasizes out-of-court agreements and only takes direct legal action in cases that are likely to have a major impact; class action suits that affect a large number of people or are likely to set a legal precedent for future cases. The agency's function in investigating discrimination claims can lead some managers to think of their relationship with the EEOC as primarily adversarial-especially if they've found themselves facing the agency's representatives in a courtroom. However, a key part of the EEOC's mission is preventing discrimination claims from occurring in the first place. Therefore, the EEOC plays a huge educational role in helping businesses to understand the law and avoid claims of discrimination. The EEOC helps businesses to interpret the law by developing guidelines and recommendations about how to develop human resource management systems that stay inside the law. (Sparrow, 2004) The EEOC holds training programs that help employers to understand how to stay within the law. One of the major challenges for a manager is recruiting new workers. Recruitment starts when need for staff arise. Recruitment is basically a process of developing a pool of people from which one screen people. One wants to attract a pool of high quality applicants so that one can select those who have the best fit to one's jobs and one's company. But where are these applicants How does one find them In general, the best recruiting method (or combination of methods) for one's hiring needs is the one that quickly delivers the highest proportion of quality applicants without breaking the bank. A HR manger should always keep the following criteria in mind: Cost. Keeping costs down without sacrificing quality is always a managerial concern. The cost of recruiting varies widely across methods, ranging from inexpensive newspaper ads to costly headhunter fees. Why pay Mercedes prices if a domestic compact will do the job Speed. Recruiting new workers can sometimes move at lightning speed and sometimes at a snail's pace. So one thing one needs to consider is how quickly one needs new workers to be on board. Diversity. As a company grows, managers need to be sure that their recruiting practices are consistent with equal employment opportunity requirements. In addition, hiring new workers who differ from current workers in demographics, backgrounds, and experience may bring fresh ideas and innovation into the workplace. Different recruiting methods access different subsets of the labor force, and one's choice of recruiting method may have important consequences in terms of the diversity of the resulting applicant pool. Efficiency. Let one introduces a concept called the yield ratio. For each recruiting method, a yield ratio can be calculated in the following way: Yield Ratio = number of hirable applicants through method 1/ total number of applicants recruited through method 1 (Gilley, 2000) In the first set of recruiting methods (External Recruiting Methods), a manager's attention is focused outside the company- making people outside the company aware of available openings. In the second set of recruiting methods (Internal Recruiting Methods), a manager is more focused on advertising available positions to people already associated with the company-current workers, current customers, or former workers. Constraints of Recruitment Image of the company Attractiveness of job Company policies Governmental influence Recruitment cost Channels of Recruitment Present workers (through internal transfers) Existing data bank of workers Internal announcements Educational institutions News Paper Add Employment agencies We should advertise in the newspaper and/or contact an employment agency only when all the other methods of recruitment fail to provide the required person. If one's recruiting efforts are successful, one will find in the luxurious position of being able to select new hires from a pool of interested applicants. But how does one identify the applicants with the highest potential for success on the job As with recruiting, it's important to first establish some criteria for evaluating selection methods. In general, when one evaluates the relative effectiveness of selection methods, one needs to consider both the cost of using the method and the accuracy of decisions resulting from the method. As a manager, one should be concerned about these criteria for both practical and legal reasons. On the practical side, one would like to identify a selection method that identifies the best candidates at the lowest cost. On the legal side, evidence regarding the accuracy of one's hiring methods is one's first line of defense if one's selection methods are ever accused of being discriminatory. The most accurate selection decisions result from using selection methods that have high validity. Validity is a term used to describe whether the selection method accurately measures aspects of the applicant that are likely to be associated with job performance. There are three common forms of validity: Criterion-related validity. Criterion-related validity is the extent to which a selection method predicts on-the-job success. Suppose one hired 100 workers last year. During the hiring process, applicants took a cognitive ability test. Six months after hiring, supervisors rated each employee's overall performance on the job. Now one have two pieces of information about each employee-their pre-hire score on the cognitive ability test, and their post-hire job performance rating. The cognitive ability test has high criterion-related validity if scores on the cognitive ability test are strongly associated with the supervisors' ratings of performance. Usually, criterion-related validity is measured by a correlation coefficient-a statistical index of the strength of an association between two measures that can range from -1 to +1. (Gilley, 2000) Positive correlation coefficients indicate that scores on the two measures (in our instance, the pre-hire test score and the post-hire supervisory rating) covary in the same direction: The higher the employee scored on the cognitive ability test, the higher the supervisory rating (and, conversely, the lower the employee scored on the test, the lower the supervisor rating). However, it can also be desirable to have negative correlation coefficients. For instance, higher cognitive ability test scores may be associated with lower turnover: The higher the employee scored on the cognitive ability test, the less likely he or she was to leave the company in the first year (and, again, the lower the employee scored on the test, the more likely he or she was to leave the company). The critical thing is the absolute value. In practice, correlation coefficients in the .5.6 ranges indicate very high levels of criterion-related validity. Content validity. Content validity is the extent to which a selection method directly samples the knowledge and skills needed to perform a job. For instance, a selection method for a secretarial position would have high content validity if the applicants were screened using a test that measured typing and filing skills. There's no standard statistical test for content validity-instead, content validity is assessed by asking experts to make an informed judgment as to whether the selection method accurately reflects on-the-job behavior. (Poe, 2001) Construct validity. In both of the previous types of validity, one was comparing the selection method to on-the-job behavior. But, in construct validity, one evaluates the selection method by comparing it to other methods that are supposed to be measuring the same thing. We want to be sure that the selection method is measuring something that it's supposed to be measuring, so one compares it to other methods that are already accepted measures of that "something." For instance, everyone would agree that being an accountant requires skill working with numbers. Let's say that one has developed a new selection method for hiring accountants that measures numerical ability. (Bernstein, 2002) One would demonstrate that my test has construct validity by showing that applicants' scores on my new test were statistically associated with other indicators of numerical ability. In their Uniform Guidelines on Employee Selection Methods, the EEOC recognizes all three forms of validity as reasonable ways of evaluating the accuracy of a selection method. However, in practice, criterion related validity is used more frequently than the other two types-in part because statistical measures of criterion-related validity make it possible to directly compare the predictive accuracy of different methods. If one is interested in using a standardized test in one's selection method, the test's publisher should provide one with information about the test's criterion-related validity when it has been used to select workers in other companies. As a manager, one should also be concerned about content validity. Content validity, remember, describes the extent to which the selection method reflects skills and behaviors actually used on-the-job. Job applicants who take a test with high content validity are likely to see the test as a reasonable way of identifying the best candidates. However, as tests become more exotic (e.g., if the test asks obscure questions, or seems to invade the applicant's privacy), job applicants are more likely to see the test as inappropriate-even if the test has high criterion-related validity. Applicants who take tests that are not clearly job-related are likely to react negatively. They may develop an unfavorable impression of the company, and decide they no longer want to be considered for the job. In extreme cases, they may even challenge the legitimacy of the selection method in court. References Bernstein, A. (May 20, 2002), Too many workers Not for long. Business Week, 127-130. Gilley W. Jerry, Maycunich Ann, (2000), Organizational Learning, Performance, and Change: An Introduction to Strategic Human Resource Development, Perseus Books, pp 103-113. Poe, A. C. (April, 2001), Hiring in the hinterlands. HRMagazine, 81-88. Sparrow Paul, Brewster Chris, Harris Hilary, (2004), Globalizing Human Resource Management, Routledge, pp 18-29, 67-75. Read More