Seven Common Misconceptions

About Human Resource Practice

Research Findings Versus
Practitioner Beliefs
Group Member:Azlina Haji Omar
Khairul Bani Ismail
810928
Mohd Mahadzir Mohd Mohtar 810948
Noor Azam Alias
810962

Seven Common Misconceptions About Human Resource Practices

The Strategic
View of Human
Resources
Employees are human assets
Increase in value to organization and marketplace when
investments of appropriate policies & programs are applied
Effective organizations recognize that employees have value

Much as organizations physical & capital assets have value

Employees are valuable source of sustainable competitive
advantage

Seven Common Misconceptions About Human Resource Practices

Sources of Employee
Value

Seven Common Misconceptions About Human Resource Practices

Sources of Employee Value

Technical Knowledge
Markets, processes, customers, environment
Technical Knowledge
Markets, processes, customers, environment
Ability to Learn and Grow
Openness to new ideas
Acquisition of knowledge & skills
Decision Making Capabilities
Motivation
Commitment
Teamwork
Interpersonal skills, leadership ability

Seven Common Misconceptions About Human Resource Practices

Findings

HR practices directly related to profitability & market

value
Primary reason for profitability:
Effective management of human capital
Integrated management of human capital can result
in 47% increase in market value
Top 10% of organizations studied experienced 391%
return on investment in management of human
capital

Seven Common Misconceptions About Human Resource Practices

HR Value Chain

Seven Common Misconceptions About Human Resource Practices

Model for Management

Success

Strengthen key
relationships
Customers
Employees
Shareholders

Leverage downtime
Use variable-pay
Address
neglected areas:
Infrastructure
Marketing
Operations

Seven Common Misconceptions About Human Resource Practices

Model for Management

Success

Seven Common Misconceptions About Human Resource Practices

Seven Common Misconceptions

1.
2.

3.
4.

Conscientiousness is a better predictor of

performance than intelligence.
Companies that screen job applicants for values
have higher performance than those that screen
for intelligence.
Integrity tests dont work well in practice because
so many people lie on them.
Integrity tests have adverse impact on racial
minorities.

Seven Common Misconceptions About Human Resource Practices

Seven Common Misconceptions

5.

6.

7.

Encouraging employee participation is more

effective for improving organizational performance
than setting performance goals.
Most errors in performance appraisal can be
eliminated by providing training to managers on
how to avoid them.
If employees are asked how important pay is to
them, they are likely to overestimate its true
importance.

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Seven Common Misconceptions About Human Resource Practices

Seven Common Misconceptions:

Implications
1. Select new employees on both intelligence and
conscientiousness.
2. Assess intelligence and conscientiousness
before values.
3. Define the values that are important and assess
them through carefully developed, valid
procedures.
4. Use integrity tests with ability tests for high
predictability.

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Seven Common Misconceptions About Human Resource Practices

Seven Common Misconceptions:

Implications
5. Develop compelling goals; enlist participation
and support it through rewards.
6. Training and feedback are important, but errors
are difficult to eliminate. Top managers should
serve as role models in quality of performance
reviews.
7. Attitude surveys are subject to biases; study
behaviors as well as attitudes.

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Seven Common Misconceptions About Human Resource Practices

Effective HRM Practices

Employment Security
Selectivity in Recruiting
High Wages
Incentive pay
Employee Ownership
Information Sharing
Participation &
Ownership
Self-Managed Teams

Training & Development

Cross-Utilization &
Cross-Training
Symbolic Egalitarianism
Wage Compression
Promotion From Within
Taking the Long View
Measurement of
Practice
Overall Philosophy

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Seven Common Misconceptions About Human Resource Practices

Effective HRM Practices

Very few firms will engage in all

practices
While these practices are important for
success, there are other determinants
as well
Downsides exist

Requires more involvement and

responsibility than some employees want
Managers & others may resist them as well
Turnover may result
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Defensible Selection

What is validity?

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Defensible Selection

So how often do
these lawsuits
happen, anyway?

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Defensible Selection

Ehh..whats
the worst
thing that
could
happen?

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Defensible Selection

$
$

$
$

But validation is so expensive!

Average cost of content validation:

$5-20K

Median settlement in discrimination

case, 96-02:

$50-70K

Median 2003 compensatory

award in discrimination case:

$232K

Sources: Seberhagen (1990); Jury Verdict Research

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Defensible Selection

Firstreality
No selection system is perfect

Someone can always complain

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Defensible Selection

How to Protect Yourself

1. Job analysis, job analysis, job analysis

People will continue to measure the wrong things as

long as they fail to define what they want to measure.
- Guion (1998)

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Defensible Selection

How can I keep

up on all these
changes in the
law?

Electronic newsletters
www.elinfonet.com

www.ahipubs.com

hr.cch.com

www.blr.com

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Defensible Selection

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