Human Resource Management

10th Edition
Chapter 13
INTERNAL EMPLOYEE RELATIONS

© 2008 by Prentice Hall 13-1

 HRM in Action: Continuous
Background Checking
• Not just for pre-employment any more
• Few employers are screening their
employees on an ongoing basis
• People and events are ever-changing
• Examples: Financial devastation, marital
collapse or a medical crisis can send a
person with the cleanest record over the
edge
© 2008 by Prentice Hall 13-2
Internal Employees
Relations Defined

Human resource
activities associated
with movement of
employees within firm
after they become
organizational
members

© 2008 by Prentice Hall 13-3

Internal Employees Relations
Activities
• Promotion
• Transfer
• Demotion
• Resignation
• Discharge
• Layoff
• Retirement
• Discipline
• Disciplinary action

© 2008 by Prentice Hall 13-4

 Employment at Will
• Unwritten contract created when
employee agrees to work for
employer
• No agreement as to how long parties
expect employment to last
• Approximately 2 of every 3 U.S.
workers depend almost entirely on
continued goodwill of employer
© 2008 by Prentice Hall 13-5
 Not Included

• Individuals with a contract for a

specified time period - collective
bargaining agreements between
labor and management and
teachers
• Whistleblowers

© 2008 by Prentice Hall 13-6

 Exceptions to Employment-at-Will
Doctrine
• Prohibiting terminations in violation of
public policy
• Permitting employees to bring claims
based on representations made in
employment handbooks
• Permitting claims based on the common-
law doctrine of good faith and fair dealing

© 2008 by Prentice Hall 13-7

 How Employers Can Protect
Themselves

• No statements suggesting job security or

permanent employment
• Avoiding statements during job interviews,
such as “You can expect to hold this job
as long as you want” - Could be
considered a contractual agreement
• A person should not be employed without
a signed acknowledgment of the at-will
disclaimer
© 2008 by Prentice Hall 13-8
 How Employers Can Protect
Themselves (Cont.)
• Clearly defining worker’s duties
• Providing good feedback on a regular
basis
• Conducting realistic performance
appraisals on a regular basis
• There is no law involving ethical
considerations for employment-at-will

© 2008 by Prentice Hall 13-9

Discipline and Disciplinary Action

• Discipline - State of employee

self-control and orderly
conduct
• Disciplinary action -Invokes
penalty against employee
who fails to meet established
standards

© 2008 by Prentice Hall 13-10

 Effective Disciplinary Action

• Addresses employee’s wrongful behavior,

not employee as a person
• Should not be applied haphazardly
• Not usually management’s initial response
to a problem
• Normally, there are more positive ways of
convincing employees to adhere to
company policies
© 2008 by Prentice Hall 13-11
The Disciplinary Action Process
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT

Set Organizational Goals

Establish Rules

Communicate Rules to Employees

Observe Performance

Compare Performance with Rules

Take Appropriate Disciplinary Action

© 2008 by Prentice Hall 13-12

Disciplinary Action

• Word discipline comes from

word disciple
• Translated from Latin, it
means, to teach
• Intent of disciplinary action
should be to ensure
recipient sees disciplinary
action as learning process
© 2008 by Prentice Hall 13-13
Approaches to Disciplinary
Action

• Hot stove rule

• Progressive
disciplinary action
• Disciplinary action
without punishment

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Hot Stove Rule

• Burns immediately
• Provides warning
• Gives consistent
punishment
• Burns impersonally
• Problem - All
situations are not the
same

© 2008 by Prentice Hall 13-15

 Progressive Disciplinary Action

• Ensure minimum penalty appropriate to

offense is imposed
• Model developed in response to National
Labor Relations Act (NLRA) of 1935
• Involves answering series of questions
about severity of offense

© 2008 by Prentice Hall 13-16

 The Progressive Disciplinary Approach

Improper Behavior
Yes
Does this violation warrant disciplinary No
No Disciplinary Action
actions?
Yes
Does this violation warrant more than No
Oral Warning
an oral warning?
Yes
Does this violation warrant more than a No
Written Warning
written warning?
Yes
Does this violation warrant more than a No
Suspension
suspension?
Yes

Termination
© 2008 by Prentice Hall 13-17
 Suggested Guidelines for Disciplinary Action

Offenses Requiring First, an Oral Warning; Second, a Written Warning; and

Third, Termination
Negligence in the performance of duties
Unauthorized absence from job
Inefficiency in the performance of job

Offenses Requiring a Written Warning; and Then Termination

Sleeping on the job Failure
to report to work one of two days in a row without notification Negligent
use of property

Offenses Requiring Immediate Termination

Theft
Fighting on the job
Falsifying time cards
Failure to report to work three days in a row without notification

© 2008 by Prentice Hall 13-18

 Disciplinary Action without
Punishment
• Process of giving worker time off with pay to
think about whether he or she wants to follow
the rules and continue working for company
• Employee violates rule, manager issues oral
reminder
• Repetition brings written reminder
• Third violation: Worker takes 1, 2 or 3 days off
(with pay) to think about situation
• Important all rules explicitly stated in writing

© 2008 by Prentice Hall 13-19

Problems in Administration of
Disciplinary Action
• Lack of training
• Fear
• The only one
• Guilt
• Loss of friendship
• Time loss
• Loss of temper
• Rationalization

© 2008 by Prentice Hall 13-20

 Disciplinary Action Advice

• Managers often avoid disciplinary action, even

when it is in company’s best interest
• Some managers believe that even attempting to
terminate women and minorities is useless
• Proper time and place to administer disciplinary
action
• Many supervisors may be too lenient early in
disciplinary action process and too strict later

© 2008 by Prentice Hall 13-21

 Grievance Handling Under
Collective Bargaining Agreement
• Grievance - Employee’s dissatisfaction or
feeling of personal injustice relating to
employment
• Grievance procedure - Formal, systematic
process that permits employees to
express complaints without jeopardizing
their jobs

© 2008 by Prentice Hall 13-22

 Grievance Procedure
• Assists management in seeking out
underlying causes of and solutions to
grievances
• Virtually all labor agreements include
some form of grievance procedure
• Normally well defined
• Usually restricted to violations of terms
and conditions of agreement
© 2008 by Prentice Hall 13-23
 General Principles for Effective
Grievance Administration

• Grievances should be adjusted promptly.

• Procedures and forms used for airing
grievances must be easy to utilize and
well understood by employees and their
supervisors.
• Direct and timely avenues of appeal from
rulings of line supervision must exist

© 2008 by Prentice Hall 13-24

 A Multiple-Step Grievance Procedure

Arbitrator

To Impartial
Third Party
President, Vice President for International Representative,
Labor Relations, etc. Local President, etc.

Plant Manager, Personnel Grievance Committee,

Manager, etc. Business Agent, etc.
Grievance
in Writing

First-Line Supervisor Union Steward

Oral
Presentation

Aggrieved Employee
© 2008 by Prentice Hall 13-25
 Arbitration
• Parties submit dispute to
impartial third party for binding
resolution
• Final step in most grievance
procedures
• Union and company select
arbitrator
• Courts will generally enforce
arbitrator’s decision
© 2008 by Prentice Hall 13-26
Factors Arbitrator May Use to Evaluate
Fairness of Managements Actions

• Nature of offense
• Due process and procedural correctness
• Double jeopardy
• Past record of grievant
• Length of service with company
• Knowledge of rules
• Warnings
• Lax enforcement of rules
• Discriminatory treatment
© 2008 by Prentice Hall 13-27
 Formats of Written Warnings

• Statement of facts concerning offense

• Identification of rule that was violated
• Statement of what resulted or could have
resulted because of violation
• Identification of any previous similar violations by
same individual
• Statement of possible future consequences
should violation occur again
• Signature and date
© 2008 by Prentice Hall 13-28
 Example of a Written Warning
Date: August 1, 2007
To: Judy Bandy
From: Wayne Sanders
Subject: Written Warning
We are quite concerned because today you were thirty minutes late to
work and offered no justification for this. According to our records, a similar
offense occurred on July 25, 2007. At that time, you were informed that
failure to report to work on time is unacceptable. I am, therefore, notifying
you in writing that you must report to work on time.
Please sign this form to indicate that you have read and understand this
warning. Signing is not an indication of agreement.

Name

Date
© 2008 by Prentice Hall 13-29
 Grievance Handling in
Union-free Organizations

• Most large and

medium sized
nonunion firms have
established formal
grievance procedures
• Means of resolving
complaints varies
© 2008 by Prentice Hall 13-30
 Trends & Innovations: Alternative
Dispute Resolution
• Procedure where employee and company
agree problems will be addressed by
agreed upon means ahead of time
• Arbitration, mediation, mini-trials, and
ombudspersons used
• Uses range from racial, gender, and age
discrimination to unfair firings

© 2008 by Prentice Hall 13-31

 Trends & Innovations: Alternative
Dispute Resolution (Cont.)

• Presidential EO requires federal agencies to (1)

promote greater use of mediation, arbitration,
early neutral evaluation, agency
ombudspersons, and other alternative dispute
resolution techniques, and (2) promote greater
use of negotiated rulemaking
• Circuit City v Adams - Greatly enhanced
employer’s ability to enforce compulsory
alternative dispute resolution agreements
© 2008 by Prentice Hall 13-32
 Ombudspersons

• Complaint officer with access to top

management hears employee complaints,
investigates, and recommends appropriate
action
• Impartial, neutral counselors give employees
confidential advice about problems ranging from
abusive managers to allegations of illegal
corporate activity
• Typically independent of line management and
reports near or at top of organization
© 2008 by Prentice Hall 13-33
 Termination

Most severe penalty; should be

most carefully considered
• Termination of nonmanagerial/
nonprofessional employees
• Termination of executives
• Termination of middle- and
lower-level managers and
professionals

© 2008 by Prentice Hall 13-34

 Termination of
Nonmanagerial/Nonprofessional
Employees

• If firm unionized,
termination procedure
well defined in labor
agreement
• Non-Union workers can
generally be terminated
more easily

© 2008 by Prentice Hall 13-35

Termination of Executives

• Economic
• Reorganization/downsize
• Philosophical differences
• Decline in productivity
• No formal appeals
procedure

© 2008 by Prentice Hall 13-36

Termination of Middle- and Lower-
Level Managers and Professionals

• In past, most vulnerable

and neglected group with
regard to termination
• Not members of union nor
protected by labor
agreement

© 2008 by Prentice Hall 13-37

Demotion as Alternative to
Termination

• Demotions used as
alternative to discharge
• Demotion is process of
moving worker to lower
level of duties and
responsibilities, usually
involving reduction in pay

© 2008 by Prentice Hall 13-38

 Transfers

• Lateral movement of
worker within
organization
• Should not imply that
person is being either
promoted or demoted

© 2008 by Prentice Hall 13-39

Transfers Serve Several Purposes
• Necessary to reorganize
• Make positions available in primary
promotion channels
• Satisfy employees’ personal desires
• Deal with personality clashes
• Becoming necessary to have wide variety
of experiences before achieving promotion

© 2008 by Prentice Hall 13-40

 Promotion

• Movement to higher level

in company
• One of the most
emotionally charged
words in human resource
management

© 2008 by Prentice Hall 13-41

Resignation

• Exit interview
• Advance notice
of resignation

© 2008 by Prentice Hall 13-42

Analyzing Voluntary Resignations

• Exit interview - Means of revealing

real reasons employees leave jobs
which is conducted before employee
departs company
• Postexit questionnaire - Sent to
former employees several weeks
after leave organization to
determine real reason the employee
left.
© 2008 by Prentice Hall 13-43
 Attitude Surveys: Means of
Retaining Quality Employees

Seek employee input to determine feeling

about such topics as:
• Work environment
• Opportunities for advancement
• Firm’s compensation system
• Their supervisor
• Training and development opportunities
© 2008 by Prentice Hall 13-44
Advance Notice of Resignation

• Would like 2 weeks

• Communicate policy to all
employees
• May pay employee for
notice time and ask
him/her to leave
immediately
© 2008 by Prentice Hall 13-45
Retirement

Many long-term
employees leave
organization
through
retirement

© 2008 by Prentice Hall 13-46

 A Global Perspective: Getting
Information to Support Disciplinary
Action
• Multinational companies face significant
challenges when they try to encourage
whistle-blowing across a wide variety of
cultures
• Number of cultural factors that discourage
international employees from reporting
misconduct
© 2008 by Prentice Hall 13-47
© 2008 by Prentice Hall 13-48