Exam 10: Managing Human Resources

Domino's Pizza At Domino's Pizza, company-wide turnover is 158 percent. That means Domino's must recruit, hire, and train 180,000 people a year just to fill its company's 114,000 jobs. And, with that much turnover, you can't consistently produce a quality product. Making and delivering pizza may seem simple, but up the ante to making and delivering one million pizzas each night, as Domino's does, and all of a sudden it's not quite so easy, especially if you're always working with inexperienced employees. For instance, even a simple job like taking orders has a learning curve when you're taking 45 to 50 orders an hour. In fact, a new order taker usually requires 80 hours to become as reliable as an experienced one. Until they learn their jobs, new workers make lots of mistakes such as getting orders wrong, giving out the wrong change, and showing up at customers' homes with the wrong pizza. Those mistakes are costly in two ways. First, if the order is wrong, late, or missing, customers get angry and may not do business with you again. Indeed, according to the University of Michigan's American consumer satisfaction index, Domino's ranks in the bottom half of fast-food companies. Second, to right those wrongs, Domino's often says the pizza is free-"Our fault, no charge."-and that hurts profits. So much turnover is costly in other ways as well. For one thing, it costs time and money to find and hire new workers. Domino's estimates that it costs $2,500 to replace each hourly worker who leaves and $20,000 to replace a store manager. Then all those new workers must be trained, and that takes time and money. At Domino's, each new worker spends the first 30 days in training, learning to take orders, handle the cash register, make pizza dough, and, ultimately, how to make a pizza in less than a minute. When everything is considered, turnover is costing the company several hundred million dollars a year, or an astonishing 15 percent to 20 percent of revenues. The question, of course, is what to do about it. Robert Chabot, who owns RAM Pizza, a series of Domino's franchise stores, says, "This business is all about who you hire. It's about people: those who want to do it (good work)and those who don't." Consequently, Chabot relies heavily on employee referrals to first identify good job applicants. Chabot assumes that if current employees are satisfied with their jobs, they'll tell their family and friends about their positive work experiences, and those people will in turn want to work for him and RAM pizza (i.e., Domino's). He also pays employees $25 for each person they recommend who gets hired and then stays for 90 days. Domino's is also doing a much better job of screening and selecting potential managers. Anyone who wants to manage a Domino's store has to pass a 30-minute online test of their financial and management skills. If you're not familiar with financial concepts such as "break-even" and "cash flow," and you're not sure how to handle poorly performing employees (hint: yelling and screaming isn't the preferred answer), then you're unlikely to pass the test. Refer to Domino's. Anyone who wants to manage a Domino's store has to pass a 30-minute online test of their financial and management skills. Domino's uses ____.

____ is the form of sexual harassment in which employment outcomes such as hiring, promotion, or simply keeping one's job depend on whether an individual submits to sexual harassment.

What is sexual harassment? Identify the two kinds of sexual harassment from a legal perspective. Describe some frequent misunderstandings about sexual harassment. Specify steps that companies can take to make sure that sexual harassment laws are followed and not violated. Give one example of possible sexual harassment that you have heard or read about and explain which of the steps just described could have averted or resolved that situation more effectively.

WWYD Nick's Pizza & Pub Nick's Pizza & Pub, a two-restaurant business in northern Illinois, wanted to open five more restaurants. But expansion wasn't to be. Expenses were high because of an inability to control food and beverage costs. An economic downturn saw guest counts drop. In the end, with costs up, revenues down, and lending standards tightening, Nick's fixed up and grew the two existing restaurants. Following the success of a young employee who asked staff for ways to keep costs in line, Nick pulled together the staffs in both restaurants to share how and where the restaurants were earning revenue and incurring expenses. He then asked for their help on three key issues: pay, hiring, and training. Nick and his people addressed three human resource challenges at Nick's Pizza & Pub. Pay was the first. Nick's takes a sophisticated multipronged approach to compensating its employees. To start, Nick's alters basic pay by one dollar more than minimum wage, and for employees who work at least 30 hours a week, the company pays half the cost of their company-provided health insurance. And for nearly a decade, Nick's has had a profit-sharing plan for all 230 employees. Each month, if the restaurant meets its goals in four out of the five following areas, food costs, beverage costs, guest comments, employee turnover, and labor costs, Nick's employees split 80 percent of the profit sharing pot. Nick's also takes a unique approach to recruiting. From the start of Nick's interview process, managers are looking for signs of personal accountability. The initial screening interview is strict and eliminates 80 percent of applicants. The 20 percent of applicants who make it out of the first round of interviews then complete two more interviews. This time, however, to increase the reliability and validity of the interview process, two managers sit in on each interview, with one manager sitting in on both interviews for each applicant. Like the first round of interviews, the criteria are strict. One "no" vote, and you're not hired. If you aren't, you still receive a thank-you note and a coupon for a free pizza. During the interview process, hiring managers at Nick's ask each applicant the same job-related questions. New hires spend two days learning about the company's purpose, values, and culture in a training class called Nick's 101 during which they spend 4 hours in the kitchen learning how to make pizza. The next step is Nick's 201, in which employees are separated by job, kitchen, wait staff, or bar staff, and are trained in their specific job responsibilities. And to prove that they've mastered their jobs, each employee is encouraged to certify their skill level in the tasks contained in their job. For example, it usually takes pizza makers two to four weeks to become certified, whereby they can make a pizza on their own to Nick's standards. Pizza makers, however, can get certified in other kitchen jobs, such as salads and sandwiches. When they've been certified in three jobs, their pay goes up 75 cents an hour. Becoming certified in another three jobs, six in total, increases their ay by $1.25 an hour. And when a kitchen worker is certified in nine jobs, their pay will increase by $2.75 an hour. Refer to WWYD Nick's Pizza & Pub. Nick prefers to use __________ because of the _________ that job applicants otherwise provide in their responses.

Once a company finishes the downsizing process, it should never need to downsize again.

Human resource management (HRM)is the process of finding, developing, and keeping the right people for the company.

Domino's Pizza At Domino's Pizza, company-wide turnover is 158 percent. That means Domino's must recruit, hire, and train 180,000 people a year just to fill its company's 114,000 jobs. And, with that much turnover, you can't consistently produce a quality product. Making and delivering pizza may seem simple, but up the ante to making and delivering one million pizzas each night, as Domino's does, and all of a sudden it's not quite so easy, especially if you're always working with inexperienced employees. For instance, even a simple job like taking orders has a learning curve when you're taking 45 to 50 orders an hour. In fact, a new order taker usually requires 80 hours to become as reliable as an experienced one. Until they learn their jobs, new workers make lots of mistakes such as getting orders wrong, giving out the wrong change, and showing up at customers' homes with the wrong pizza. Those mistakes are costly in two ways. First, if the order is wrong, late, or missing, customers get angry and may not do business with you again. Indeed, according to the University of Michigan's American consumer satisfaction index, Domino's ranks in the bottom half of fast-food companies. Second, to right those wrongs, Domino's often says the pizza is free-"Our fault, no charge."-and that hurts profits. So much turnover is costly in other ways as well. For one thing, it costs time and money to find and hire new workers. Domino's estimates that it costs $2,500 to replace each hourly worker who leaves and $20,000 to replace a store manager. Then all those new workers must be trained, and that takes time and money. At Domino's, each new worker spends the first 30 days in training, learning to take orders, handle the cash register, make pizza dough, and, ultimately, how to make a pizza in less than a minute. When everything is considered, turnover is costing the company several hundred million dollars a year, or an astonishing 15 percent to 20 percent of revenues. The question, of course, is what to do about it. Robert Chabot, who owns RAM Pizza, a series of Domino's franchise stores, says, "This business is all about who you hire. It's about people: those who want to do it (good work)and those who don't." Consequently, Chabot relies heavily on employee referrals to first identify good job applicants. Chabot assumes that if current employees are satisfied with their jobs, they'll tell their family and friends about their positive work experiences, and those people will in turn want to work for him and RAM pizza (i.e., Domino's). He also pays employees $25 for each person they recommend who gets hired and then stays for 90 days. Domino's is also doing a much better job of screening and selecting potential managers. Anyone who wants to manage a Domino's store has to pass a 30-minute online test of their financial and management skills. If you're not familiar with financial concepts such as "break-even" and "cash flow," and you're not sure how to handle poorly performing employees (hint: yelling and screaming isn't the preferred answer), then you're unlikely to pass the test. Refer to Domino's. One new pay method Domino's implemented to combat its problems is a store-profitability bonus. On average, the store-profitability bonuses add 30 percent, or about $10,000, to the $32,000 base pay for the managers of Domino's stores that perform well. These bonuses are a form of ____.

Since interviews are especially good at assessing applicants' interpersonal skills, they work especially well together with cognitive ability tests, where the combination leads to even better selection decisions than using either alone.

Domino's Pizza At Domino's Pizza, company-wide turnover is 158 percent. That means Domino's must recruit, hire, and train 180,000 people a year just to fill its company's 114,000 jobs. And, with that much turnover, you can't consistently produce a quality product. Making and delivering pizza may seem simple, but up the ante to making and delivering one million pizzas each night, as Domino's does, and all of a sudden it's not quite so easy, especially if you're always working with inexperienced employees. For instance, even a simple job like taking orders has a learning curve when you're taking 45 to 50 orders an hour. In fact, a new order taker usually requires 80 hours to become as reliable as an experienced one. Until they learn their jobs, new workers make lots of mistakes such as getting orders wrong, giving out the wrong change, and showing up at customers' homes with the wrong pizza. Those mistakes are costly in two ways. First, if the order is wrong, late, or missing, customers get angry and may not do business with you again. Indeed, according to the University of Michigan's American consumer satisfaction index, Domino's ranks in the bottom half of fast-food companies. Second, to right those wrongs, Domino's often says the pizza is free-"Our fault, no charge."-and that hurts profits. So much turnover is costly in other ways as well. For one thing, it costs time and money to find and hire new workers. Domino's estimates that it costs $2,500 to replace each hourly worker who leaves and $20,000 to replace a store manager. Then all those new workers must be trained, and that takes time and money. At Domino's, each new worker spends the first 30 days in training, learning to take orders, handle the cash register, make pizza dough, and, ultimately, how to make a pizza in less than a minute. When everything is considered, turnover is costing the company several hundred million dollars a year, or an astonishing 15 percent to 20 percent of revenues. The question, of course, is what to do about it. Robert Chabot, who owns RAM Pizza, a series of Domino's franchise stores, says, "This business is all about who you hire. It's about people: those who want to do it (good work)and those who don't." Consequently, Chabot relies heavily on employee referrals to first identify good job applicants. Chabot assumes that if current employees are satisfied with their jobs, they'll tell their family and friends about their positive work experiences, and those people will in turn want to work for him and RAM pizza (i.e., Domino's). He also pays employees $25 for each person they recommend who gets hired and then stays for 90 days. Domino's is also doing a much better job of screening and selecting potential managers. Anyone who wants to manage a Domino's store has to pass a 30-minute online test of their financial and management skills. If you're not familiar with financial concepts such as "break-even" and "cash flow," and you're not sure how to handle poorly performing employees (hint: yelling and screaming isn't the preferred answer), then you're unlikely to pass the test. Refer to Domino's. Robert Chabot relies heavily on employee referrals to first identify good job applicants. In other words, Chabot uses ____.

Which of the following is an example of an objective performance measure?

Differentiate between internal and external recruiting. Provide two examples of each.

Piecework, sales commission, profit sharing, employee stock ownership plans, and stock options are common pay-variability options.

To improve traditional performance appraisal feedback sessions, it is recommended that managers ____.

WWYD Nick's Pizza & Pub Nick's Pizza & Pub, a two-restaurant business in northern Illinois, wanted to open five more restaurants. But expansion wasn't to be. Expenses were high because of an inability to control food and beverage costs. An economic downturn saw guest counts drop. In the end, with costs up, revenues down, and lending standards tightening, Nick's fixed up and grew the two existing restaurants. Following the success of a young employee who asked staff for ways to keep costs in line, Nick pulled together the staffs in both restaurants to share how and where the restaurants were earning revenue and incurring expenses. He then asked for their help on three key issues: pay, hiring, and training. Nick and his people addressed three human resource challenges at Nick's Pizza & Pub. Pay was the first. Nick's takes a sophisticated multipronged approach to compensating its employees. To start, Nick's alters basic pay by one dollar more than minimum wage, and for employees who work at least 30 hours a week, the company pays half the cost of their company-provided health insurance. And for nearly a decade, Nick's has had a profit-sharing plan for all 230 employees. Each month, if the restaurant meets its goals in four out of the five following areas, food costs, beverage costs, guest comments, employee turnover, and labor costs, Nick's employees split 80 percent of the profit sharing pot. Nick's also takes a unique approach to recruiting. From the start of Nick's interview process, managers are looking for signs of personal accountability. The initial screening interview is strict and eliminates 80 percent of applicants. The 20 percent of applicants who make it out of the first round of interviews then complete two more interviews. This time, however, to increase the reliability and validity of the interview process, two managers sit in on each interview, with one manager sitting in on both interviews for each applicant. Like the first round of interviews, the criteria are strict. One "no" vote, and you're not hired. If you aren't, you still receive a thank-you note and a coupon for a free pizza. During the interview process, hiring managers at Nick's ask each applicant the same job-related questions. New hires spend two days learning about the company's purpose, values, and culture in a training class called Nick's 101 during which they spend 4 hours in the kitchen learning how to make pizza. The next step is Nick's 201, in which employees are separated by job, kitchen, wait staff, or bar staff, and are trained in their specific job responsibilities. And to prove that they've mastered their jobs, each employee is encouraged to certify their skill level in the tasks contained in their job. For example, it usually takes pizza makers two to four weeks to become certified, whereby they can make a pizza on their own to Nick's standards. Pizza makers, however, can get certified in other kitchen jobs, such as salads and sandwiches. When they've been certified in three jobs, their pay goes up 75 cents an hour. Becoming certified in another three jobs, six in total, increases their ay by $1.25 an hour. And when a kitchen worker is certified in nine jobs, their pay will increase by $2.75 an hour. Refer to WWYD Nick's Pizza & Pub. Minimum wage is the starting point for______ decisions ant Nick's Pizza & Pub. ?

What makes an effective selection process? What are the steps in the common selection procedures used by companies? Which of these procedures would you recommend that a company use to hire managers? Explain the reasons for your recommendations.

Cognitive ability tests are also called aptitude tests.

Wrongful discharge is a legal doctrine that requires a manager to have the approval of the human resource manager to terminate employees.

Which of the following statements regarding downsizing is true?

To which of the following aspects of the human resource management process does U.S. Federal employment law apply?

Before beginning to recruit, organizations must ____.