Book summary “Management”: summary

Introduction

You face the complex challenge of organizing people, processes, and resources to achieve strategic business goals. Modern workplaces demand that you navigate rapid technological changes, global competition, and evolving workforce expectations while maintaining high performance.

Management requires executing five core functions known collectively as the management process, with human resource management specifically targeting staffing, training, and employee relations. Mastering these principles allows you to align HR practices with strategic goals and build sustainable organizational success.

Gary Dessler explains the systematic methods required to recruit, develop, and retain top talent within legal and ethical boundaries. The book examines how you can transform human resource activities from administrative tasks into strategic drivers of performance.

• How do you implement legally defensible selection procedures?
• What methods translate business strategy into specific employee behaviors?
• How do you design training programs that measurably improve productivity?

1. Introduction to Human Resource Management

Managing requires executing five core functions known collectively as the management process. Human resource management specifically targets the staffing function, focusing on acquiring, training, appraising, and compensating employees while addressing labor relations, health, safety, and fairness.

Managing requires executing five core functions known collectively as the management process, with human resource management specifically targeting staffing.

To succeed as a manager, you must master the specific activities that comprise each function:

• Planning: Establish goals and standards, develop rules, procedures, plans, and forecasts.
• Organizing: Assign specific tasks to subordinates, establish departments, delegate authority, set communication channels, and coordinate work.
• Staffing: Determine required personnel types, recruit, select, set performance standards, compensate, evaluate, counsel, and train employees.
• Leading: Motivate subordinates, maintain morale, and get others to accomplish tasks.
• Controlling: Set standards like sales quotas or production levels, compare actual performance against standards, and take corrective action.

Line managers hold direct authority to issue orders to subordinates, whereas human resource managers hold staff authority to advise and assist. Authority is the right to make decisions, direct work, and give orders. Line managers are directly responsible for accomplishing organizational tasks, while human resource managers provide specialized support in areas such as recruitment, hiring, and compensation.

The workforce is undergoing major demographic shifts, characterized by increasing diversity, an aging population, and a shortage of younger replacement workers. Projections indicate that the proportion of white workers is declining while Asian and Hispanic segments are growing. From 1992 to 2024, the percentage of the U.S. workforce classified as white drops from 85% to 77%. The percentage of the U.S. workforce classified as Asian rises from 4% to 6.6% between 1992 and 2024. The percentage of Hispanic origin workers in the U.S. workforce rises from 8.9% to 19.8% between 1992 and 2024. Furthermore, the retirement of baby boomers creates labor gaps, prompting organizations to hire older retirees, recruit foreign workers through specialized visa programs, and adapt to millennial and Generation Z preferences. Workers aged 55 and older leap from 11.8% of the workforce in 1992 to 24.8% in 2024. U.S. employers bring in about 85,000 foreign workers per year under H-1B visa programs. China's senior army officers face challenges getting millennial-aged volunteers and conscripts to shape up.

The expansion of the gig economy has created a vast contingent workforce of freelancers, independent contractors, and on-demand workers. Platforms like Upwork and Uber allow companies to utilize non-traditional workers on demand rather than maintaining large permanent employee bases. About 25% of workers do not have regular jobs, representing roughly 60 million gig workers in the USA alone. Uber was signing up almost 30,000 new independent contractor drivers per week. Virgin America used contractors rather than employees for baggage delivery, reservations, and heavy maintenance before combining with Alaska Air Group.

2. Equal Opportunity and Diversity

Federal equal employment opportunity laws prohibit discrimination in hiring and employment, requiring organizations to maintain defensible selection procedures. Title VII of the 1964 Civil Rights Act created the Equal Employment Opportunity Commission to investigate job discrimination complaints and take legal action on behalf of complainants. The commission consists of five presidentially appointed members who serve five-year terms. It has thousands of staff members and is empowered to investigate complaints, seek conciliation agreements, and initiate lawsuits when agreements fail.

Employment practices must be job-related if they cause a disparate impact on protected classes, and the burden of proof rests on the employer.

Chief Justice Burger ruled that overt discrimination is not required for a violation to occur; employers only need to show that fair-looking practices operating in a discriminatory manner are a business necessity tied to job performance. Willie Griggs successfully sued Duke Power Company over a high school diploma requirement for coal handlers that was not related to job success and negatively impacted Black applicants.

The Americans with Disabilities Act prohibits employment discrimination against qualified individuals with physical or mental impairments and requires reasonable accommodations. The law applies to employers with 15 or more workers. Employers must provide accommodations unless it causes an undue hardship, while qualified individuals must be able to perform essential job functions with or without accommodation.

A Walmart door greeter with a bad back requested a stool to sit on, but the court agreed with Walmart that standing was an essential job function for maintaining an aggressively hospitable manner.

Follow these practices regarding disability discrimination:

• Do not deny a job to a disabled person if he or she is qualified and able to perform the job's essential functions.
• Make a reasonable accommodation unless that would result in undue hardship.
• In general, you may not make preemployment inquiries about someone's disability before making an offer.
• Itemize essential job functions on the job descriptions.
• Do not accept misconduct or erratic performance, even if linked to a disability.

Sexual harassment under Title VII encompasses unwelcome sexual advances that create an intimidating, hostile, or offensive work environment or dictate employment terms. Proving harassment involves establishing quid pro quo threats or demonstrating a hostile environment created by supervisors, coworkers, or nonemployees through severe or pervasive conduct. In Burlington Industries v. Ellerth and Faragher v. City of Boca Raton, the Supreme Court ruled that employees could win suits without suffering tangible job actions if threats or hostile environments occurred. The EEOC recently received 6,758 sexual harassment charges, with 16.6% filed by men.

Take these steps to address sexual harassment:

• Take all complaints about harassment seriously.
• Issue a strong policy statement condemning such behavior.
• Take steps to prevent sexual harassment.
• Train supervisors and managers to increase their awareness of the issues, and discipline managers and employees involved.

The EEOC enforces discrimination laws through a structured process involving charge filing, investigation, and potential conciliation or litigation. When a discrimination charge is filed, the EEOC serves notice to the employer within 10 days and investigates to determine reasonable cause within 120 days. If reasonable cause is found, the EEOC attempts conciliation before potentially bringing a civil suit or issuing a right-to-sue notice. The EEOC recently received 91,503 private-sector discrimination charges in a single fiscal year.

Effective diversity management requires top leadership commitment and systemic changes rather than superficial or mandatory programs. Managing diversity involves maximizing potential advantages while heading off problems like prejudice and bias. Successful programs start at the top, assess the situation, provide voluntary education, change management systems, and evaluate results. At SAP, the Chief Learning Officer replaced a traditional diversity training program with the year-long Leadership Excellence Acceleration Program to better advance women into leadership. SAP set a 25% target for leadership positions held by women, utilizing a global business network of 8,000 female employees.

3. Strategic HR Management and Performance

Strategic human resource management aligns HR policies and practices with the company's overarching strategic goals to produce necessary employee behaviors.

Rather than merely handling administrative tasks after strategy is set, HR managers participate directly in formulating and executing strategies to cultivate required competencies and skills. You can implement this approach by following these specific steps:

• Set the firm's strategic aims
• Pinpoint the employee behaviors and skills needed to achieve these strategic aims
• Decide what HR policies and practices will enable the production of necessary employee behaviors and skills

When Yahoo wanted to improve innovation and productivity, its HR manager helped institute policies like eliminating telecommuting and offering 16 weeks of paid maternity leave.

The strategic management process involves auditing the current business, analyzing internal strengths and weaknesses alongside external opportunities and threats, formulating a new business direction and vision, setting goals, choosing strategies, executing them, and evaluating results. PepsiCo added healthy products like Quaker Oats and Gatorade to its lineup to fulfill its vision of Performance with Purpose.

A high-performance work system combines specific HR policies and practices to promote organizational effectiveness and superior employee performance.

High-performing companies typically pay higher median wages, offer extensive training, utilize validated selection tests, rely on self-managing teams, and share operational and financial information with employees. In a study of 17 manufacturing plants, high-performance plants paid median wages of $16 per hour compared to $13 per hour for all plants. Such companies had 37 qualified applicants per position compared to 8 in lower-performing companies. They also hired 30 percent of employees based on a validated selection test compared to 4 percent in lower-performing companies. Furthermore, they provided 117 hours of new employee training compared to 35 hours, with 95 percent of employees receiving regular performance appraisals compared to 41 percent.

Employee engagement drives performance, productivity, and profitability by fostering a high level of connectivity and commitment to work tasks. Engaged employees work as if they own the company. Gallup surveys indicate business units with the highest engagement have an 83 percent chance of performing above the median, while those with the lowest have a 17 percent chance. Highly engaged employees average 7.5 days of lost productivity per year compared to about 14 days for disengaged employees. Companies with highly engaged employees also achieve 26 percent higher revenue per employee. Gallup notes that 30 percent of employees are engaged, 50 percent are not engaged, and 20 percent are actively disengaged.

Employers apply data mining and statistical analysis to employee records, survey feedback, performance appraisals, and internal social media to address retention, hiring, and management quality. Best Buy used talent analytics to determine that a 0.1 percent increase in employee engagement led to a more than $100,000 rise in a store annual operating income. Google analyzed backgrounds and performance to identify flight risks. Cisco improved its retention rate from 65 percent to 85 percent and saved nearly $50 million in recruitment, selection, and training costs.

Kia UK implemented a six-step engagement program involving measurable objectives, leadership development, employee recognition, improved internal communications, employee development plans, and aligned compensation policies. Following $10.6 billion of debt in July 1997, Kia UK faced 31 percent employee turnover in 2006, creating a direct cost of 600,000 British pounds. The new strategy reduced turnover to 15 percent in 2007, 5 percent in 2008, and below 2 percent by the end of 2009, while cutting recruitment and turnover costs by more than 400,000 British pounds within two years.

4. Job Analysis and Talent Management

Job analysis serves as the foundational procedure for determining duties, skill requirements, and human qualifications needed for positions.

Job analysis gathers information on work activities, behaviors, tools, performance standards, context, and human requirements. The primary outputs are job descriptions and job specifications, which serve as the foundation for recruitment, training, appraisal, and compensation. You follow a structured process to complete this work reliably.

• Step 1: Identify the use to which the information will be put
• Step 2: Review relevant background information about the job
• Step 3: Select a representative sample of positions to focus on
• Step 4: Analyze the job using standard methods
• Step 5: Verify the information with the worker and immediate supervisor
• Step 6: Develop a job description and job specification

A job description should systematically detail what a worker does, how it is done, and working conditions, typically covering seven key sections. Pearson Education and the U.S. Department of Labor provide sample forms illustrating how to structure these descriptions. Employers must clearly identify essential job functions in job descriptions to ensure compliance with the Americans with Disabilities Act.

Competency models replace rigid task lists by defining clusters of interrelated attributes required for employees to succeed in flattened hierarchies. Daimler opened a high-tech factory in Alabama using just-in-time inventory and teamwork, relying on competency-based job analysis rather than strict job duties so employees could rotate freely within their teams. This approach was later adopted in South Africa, Brazil, and Germany.

Workforce planning uses demand and supply forecasting techniques to identify and eliminate gaps between future organizational needs and available talent. Valero Energy created a labor supply chain system with statistical forecasting models, reducing time-to-fill from over 120 days to under 40 days and cutting cost per hire from $12,000 to $2,300.

5. Personnel Planning and Selecting Employees

Selecting employees requires achieving person-job fit through valid testing, structured interviews, and careful background investigations.

Managers use a historical ratio model called the recruiting yield pyramid to calculate the exact volume of recruitment leads needed to fill a specific number of job openings. A company needing 50 entry-level accountants uses historical ratios of 6 leads to 1 invite, 4 invitees to 3 interviews, 3 interviews to 2 offers, and 2 offers to 1 hire to determine it must generate 1,200 leads.

Promoting from within boosts employee engagement and morale, but requires a structured tracking system to ensure fair consideration of internal candidates. FedEx utilizes a promotion-from-within policy rooted in founder Frederick Smith's philosophy, supported by an online system called JCATS where applicants receive numerical scores based on performance and tenure. PriceWaterhouseCoopers in Hungary uses an online simulation game called Multipoly to give applicants a realistic preview of the work environment and boost applicant flow.

Help wanted advertisements should be constructed using the AIDA framework to maximize response quality and align applicant expectations with job realities. The New York City Children's Services Administration used realistic ads warning workers about strange buildings, dangerous neighborhoods, and unhinged individuals, which successfully improved retention.

Application forms serve as an initial screening tool to evaluate substantive qualifications, stability, and growth, but must comply strictly with equal employment opportunity laws. Researchers analyzing accounting job openings sent fictitious candidate profiles and found that qualified applicants whose letters revealed a disability were chosen 26% less frequently for follow-up.

The Basics of Testing and Selecting Employees

Selection tools must demonstrate both reliability, meaning consistency of scores, and validity, meaning the test actually measures what it purports to measure. Personnel tests are classified into cognitive abilities, motor and physical abilities, personality and interests, and achievement tests. A call center saw its 90-day attrition rate fall from 41 percent to 12 percent after implementing applicant testing.

Outback Steakhouse uses a personality assessment test as part of its preemployment process to hire social, meticulous, sympathetic, and adaptable employees. Assessment centers use simulations like the in-basket, leaderless group discussions, and individual presentations to evaluate candidates over two to three days under expert observation.

You must follow proper screening steps:

• carefully scrutinize all information supplied by the applicant, such as unexplained gaps in employment;
• get the applicant's written authorization for reference checks, and check references;
• save all records and information you obtain about the applicant;
• reject applicants who make false statements of material facts or who have conviction records for offenses directly related and important to the job in question;
• take immediate disciplinary action if problems arise.

Conducting an effective interview requires a systematic multi-step approach focused on standardization and job-relevant questions. Background investigations and reference checks are essential tools for verifying applicant claims and uncovering damaging records. A man was awarded $56,000 after being turned down for a job because a former employer called him a character.

Toyota uses a rigorous 20-hour, six-phase screening process for manufacturing team members to evaluate teamwork, problem-solving, and commitment to continuous improvement, helping screen out candidates who lack high engagement potential.

6. Training, Development, and Performance Management

Systematic training processes and objective performance appraisals drive continuous employee improvement and organizational productivity.

You must build training programs by following the ADDIE five-step training process model. Companies spent $1,252 per employee on direct training and learning in one recent year. Walgreens established Walgreens University offering over 400 programs to align training and HR policies with its strategic shift into in-store health clinics and flu shots.

• Analyze the training need.
• Design the overall training program.
• Develop the course (actually assembling/creating the training materials).
• Implement training, by actually training the targeted employee group using methods such as on-the-job or online training.
• Evaluate the course's effectiveness.

Performance appraisal requires a three-step cycle to set standards, assess actual performance, and provide feedback. You must protect appraisals from rater errors like the halo effect, central tendency, and strictness problems. At a Ball Corporation metal packaging plant, management trained leaders on setting daily goals, distributed team scorecards, and provided coaching, resulting within 12 months in an increase of 84 million cans produced, a 50% reduction in customer complaints, and over $3 million in return on investment.

• Base the performance review on observable job behaviors or objective performance data, and on the job description
• Use a standardized performance review procedure for all employees
• Let the employees know ahead of time how you’re going to conduct the reviews
• Make sure you have had frequent opportunities to observe the employee's job performance
• Make sure you understand the appraisal procedure to use
• Consider your personality
• Be consistent
• Document the appraisal review process and results
• Discuss the appraisal results with the employee
• Let the employee provide input regarding your assessment of him or her
• Indicate what the employee needs to do to improve
• Have your own supervisor evaluate the appraisal result
• Include an appeals mechanism

10 Key Ideas

1. Managing requires executing five core functions known collectively as the management process, with human resource management specifically targeting staffing.
2. Employment practices must be job-related if they cause a disparate impact on protected classes, and the burden of proof rests on the employer.
3. Strategic human resource management aligns HR policies and practices with the company's overarching strategic goals to produce necessary employee behaviors.
4. Job analysis serves as the foundational procedure for determining duties, skill requirements, and human qualifications needed for positions.
5. Selecting employees requires achieving person-job fit through valid testing, structured interviews, and careful background investigations.
6. Systematic training processes and objective performance appraisals drive continuous employee improvement and organizational productivity.
7. A high-performance work system combines specific HR policies and practices to promote organizational effectiveness and superior employee performance.
8. Selection tools must demonstrate both reliability, meaning consistency of scores, and validity, meaning the test actually measures what it purports to measure.
9. You must build training programs by following the ADDIE five-step training process model.
10. Performance appraisal requires a three-step cycle to set standards, assess actual performance, and provide feedback.