Ch8. Human Resources and Organizational Management — HR and OB for the Consulting Exam

HR Management Framework

HR Planning:
Demand forecasting vs. supply forecasting
Adjust hiring, training, and deployment to close gaps

Recruiting:
Internal sourcing: promotion, lateral transfers
External sourcing: open recruitment, executive search

Selection:
Application → Testing → Interview → Medical screening
Ensure validity and reliability of each selection tool

Training and Development:
OJT (On-the-Job Training): learning while performing the actual job
Off-JT (Off-the-Job Training): classroom or structured group instruction

Performance Appraisal and Compensation

Performance Appraisal:
MBO (Management by Objectives): set goals, evaluate attainment
360-Degree Feedback: input from supervisors, reports, peers, and customers
BARS (Behaviorally Anchored Rating Scales)

Compensation Systems:
Job-based pay: tied to the value of the job
Seniority-based pay: tied to years of service
Performance-based pay: tied to results (incentive pay)
Mixed: base salary + performance bonus

Benefits:
Legally mandated: social security, unemployment insurance, workers' compensation
Supplemental (voluntary): housing assistance, education reimbursement, health programs

Motivation Theory

Content Theories (what motivates):
Maslow — Hierarchy of Needs (5 levels):
  Physiological → Safety → Social → Esteem → Self-Actualization
Herzberg — Two-Factor Theory:
  Hygiene factors (remove dissatisfaction) vs. Motivators (create satisfaction)
McGregor — Theory X/Y:
  X = assume workers avoid work → control; Y = assume workers seek work → autonomy

Process Theories (how motivation works):
Vroom — Expectancy Theory: Motivation = Expectancy × Instrumentality × Valence
Adams — Equity Theory: compare input-to-output ratios against a reference person
Goal-Setting Theory: specific, challenging goals drive higher performance

Reinforcement Theory:
Positive reinforcement: reward desired behavior to repeat it
Negative reinforcement: remove aversive stimulus to repeat behavior
Punishment: suppress undesired behavior

Leadership Theory

Trait Theory:
Leaders possess innate characteristics (intelligence, charisma)

Behavioral Theories:
Ohio State Studies: Initiating Structure vs. Consideration (two dimensions)
Blake & Mouton: Managerial Grid

Situational / Contingency Theories:
Fiedler: match leadership style to situational favorableness
Hersey & Blanchard: adjust leadership style to follower readiness (maturity)

Transformational Leadership:
Inspire through vision, intellectual stimulation, and individual consideration
Contrasted with Transactional Leadership (contingent reward, management-by-exception)

Key Concept Cards

Maslow — 5 Levels ★★★★★ : Physiological → Safety → Social → Esteem → Self-Actualization. Memory hook: the pyramid — base to peak

Herzberg — Two-Factor Theory ★★★★★ : Hygiene factors (e.g., salary, working conditions) remove dissatisfaction but do not create motivation. Motivators (e.g., achievement, recognition, growth) create genuine satisfaction. Memory hook: hygiene = dissatisfaction removal; motivators = satisfaction creation

OJT vs. Off-JT ★★★★☆ : OJT = learning at the workstation. Off-JT = learning in a classroom or structured program away from work. Memory hook: OJT = On = at the job

Practice Quiz

Q. Under Herzberg’s Two-Factor Theory, why can a pay raise fail to motivate employees?

Salary is a hygiene factor. When a hygiene factor is deficient, it causes dissatisfaction. When adequate, it merely removes dissatisfaction — it does not generate motivation. True motivation requires motivating factors: achievement, recognition, meaningful work, responsibility, and growth opportunities. A pay raise produces a short-term effect. Sustained motivation must come from the work itself.

Q. What are the advantages and limitations of 360-degree feedback?

Advantages: multi-perspective input, reduces the distortions of single-rater bias, captures collaboration and interpersonal competencies. Limitations: subject to friendship bias or retaliation, time- and resource-intensive, difficult to interpret conflicting feedback. Effective as a developmental tool; riskier when directly tied to compensation decisions.