Happy New Year! Welcome to McGraw-Hill's January 2024 issue of HRM in the News, a newsletter designed specifically with you, the HRM educator, in mind.

This issue of HRM in the News provides several short cases on hot topics, issues, and developments in HRM and includes questions for students and notes for you. The short cases are cross-referenced to specific chapters in Human Resource Management: Gaining a Competitive Advantage and Fundamentals of Human Resource Management allowing you to use them to gauge student’s understanding and ability to apply chapter content to HRM problems and issues that companies are facing today. Be sure to ask your McGraw-Hill sales rep to see the new edition of Fundamentals which should be available soon. The author(s) are currently revising Human Resource Management: Gaining a Competitive Advantage so the new edition should be available for your Summer and Fall 2024 classes.

Chapter 1- Human Resource Management: Gaining a Competitive Advantage (HRM: Gaining a Competitive Advantage)

Chapter 4 -The Analysis and Design of Work (HRM: Gaining a Competitive Advantage)

Chapter 2 -Trends in Human Resource Management (Fundamentals of HRM)

Chapter 4 – Analyzing Work and Designing Jobs (Fundamentals of HRM)

Peanut Butter and Jelly at the Core of JM Smucker Business and Return-to-Work Policy

JM Smucker who is known for their jams, jellies, peanut butter, and other consumer products, corporate headquarters is located in a small town, Orrville, in northeastern Ohio. You may be familiar with one of their popular products, Uncrustables, frozen crustless sandwiches with various fillings (like peanut butter and jelly). Smucker has approximately 6,000 employees located worldwide, with 1300 at the corporate headquarters in Orrville.

Many companies have implemented return-to-work policies. Some, such as those announced at Meta Amazon, and Farmers Insurance, have been met with employee outrage, protests, and turnover. Similar to the human resource professionals at these and other companies, the Chief People Officer at Smucker had to successfully navigate a paradox: How could she tell corporate employees who were working completely remotely during the pandemic and were performing well that working offsite no longer worked? How could the company develop a return-to-work policy that made sense for both employees and the business? Smucker executives wanted employees on-site because they felt that employee relationships and connections were critical for the success of the business. Mark Smucker, the CEO commutes from his home in Akron, Ohio to Orrville each day – a forty-minute drive.

Company executives, including the Chief People Officer, first came up with a plan requiring employees’  on-site fifty percent of the time. They considered making it mandatory that employees work onsite three specific days each week. But they decided not to adopt that plan because they felt it was too rigid. The return-to-work plan they adopted is unusual but employees and managers like it and it benefits the business. Smucker’s expects corporate employees to work on-site as little as twenty-five percent of the time or six days per month. To hit that limit employees have to come into the office during twenty-two weeks each year (what are called “core weeks”). This allows employees to live anywhere in the US, paying their travel expenses to get to Orrville for the “core weeks”. Smucker publishes the core week schedule a year in advance to allow corporate staff, teams, and managers to plan.

Initially, some employees ignored the core week mandate but after reminders from company leaders convinced them to return to the office during that period. Now, offices at Smucker’s headquarters are almost full. Also, while they are in Orrville for the core weeks employees are working longer hours to meet with peers and clients. Company executives are also at headquarters during the core weeks. They try to keep times blocked off on their calendar to allow for spontaneous conversations. Although core weeks are very busy for all employees, company leaders believe the policy helps them recruit and hire talented employees who are interested in positions at Smucker but don’t want to live in northeastern Ohio. As a result, some corporate employees make the daily drive during core weeks from close cities such as Cleveland while others living in cities farther away such as Cincinnati and Pittsburgh drive to Orrville and stay overnight. Smucker chief marketing officer is in Orrville during the core weeks but spends the summer in New York, and lives most of the year in Connecticut and Vermont. A marketing vice president lives in San Francisco but commutes to Orville for the core weeks. She catches a flight to Cleveland and stays in a hotel close to Orrville. At the end of each core week, she flies back home.

There are several HR challenges with any return-to-wok policy that includes any type of hybrid work arrangement, i.e. both onsite and remote work. One of the HR challenges is ensuring that the company is appropriately withholding taxes from each employee's paycheck based on the percentage of their time spent on Orrville and at home. Employees are asked every business quarter to report how much work time they are spending at headquarters and at home. Other challenges include ensuring that the company culture is maintained, employee development remains on track, and ensuring employees are satisfied with the policy and engaged at work. Finally, HR is still responsible for providing services to employees and sharing expertise with managers who have to work onsite with no remote option. This includes food scientists and other specialists who use specialized equipment at the workplace and production workers who work in the plant that makes jams, jellies, and other products.

Mark Smucker is committed to evaluating the company work arrangement policy and making any needed adjustments. He doesn’t believe a hybrid work schedule is going to disappear any time soon because employees are used to working remotely and capable of using technology tools like Zoom and Microsoft Teams to interact and conduct meetings.

Sources: Based on C. Cutter, “A Return-To-Office Plan That Employees Actually Like”, The Wall Street Journal (August 26-27, 2023): B1, B4; J. Thier, “Smucker's return-to-office plan is a full embrace of remote work—with the big catch that it creates an entirely new kind of super-commuter” (August 29, 2023) from fortune.com, accessed January 3, 2024; L. Hahn, “What Every Hybrid Workplace Can Learn From Smucker”, (September 6, 2023), from reworked.co, accessed January 3, 2024.

Questions for Students

  1. How does the return-to-work policy support both business and employee needs?
  2. Which of the competencies needed by HR professionals do you believe were most critical for helping Smucker leaders decide which policy to adopt?
  3. What flexibility options should Smucker consider for its food scientists and manufacturing plant employees who are unable to work in a hybrid work arrangement?

Note for Instructors

This case can be used in numerous places in your course including as part of the introduction to the purpose and importance of HR issues, and HR competencies, or as a discussion of hybrid work arrangements. An excellent 3-minute video to accompany this case is https://www.youtube.com/watch?v=ms-hVv7x6LI&t=31s which is a CNN interview with Smucker Chief People Officer who discusses the core work schedule.

Chapter 1 – Human Resource Management: Gaining a Competitive Advantage (HRM: Gaining a Competitive Advantage

Chapter 13 – Employee Benefits (HRM: Gaining a Competitive Advantage)

Chapter 2 – Trends in Human Resource Management (Fundamentals of HRM)

Chapter 14 – Providing Employee Benefits (Fundamentals of HRM)

Supporting Employees Mental Health

Supporting employees’ mental health comes with costs such as having to hire outside consultants to identify and recommend programs, remodeling or building new facilities, or paying for services. Regardless, some companies are willing to absorb the costs, recognizing that mental health is a workplace crisis that deserves attention. NetWallet, a personal finance company, offers its employees four self-care days each year. Alma offers paid “time-off” days for employees who need to process traumatic events occurring outside the workplace. Linked-In and Adobe have provided employees with on-site respite rooms where employees can go to decompress when they feel the need to do so. Brightline Inc. offers virtual counseling to employees and their families. EnterpriseD8 Corporation covers the costs of employee’s subscriptions to an app that provides access to one-on-one therapy sessions and meditation exercises. General Dynamics Information Technology started its “How Are You Really?” campaign after an employee died by suicide. “How Are You Really?” raises mental health awareness and encourages discussions about what support, interventions, flexibility, and culture change employees need from each other and from the company. As a result, General Dynamics has reviewed workloads, allowed employees to take paid time off to rebalance their lives, and initiated flexible work schedules. Lincoln Financial Group’s “Be Well’ program publishes monthly well-being articles on the company’s intranet, distributes home mailers with reminders about discounts and digital mindfulness programs, and hosts quarterly wellness webinars focused on nutrition, stress management and preventative healthcare. Employees also have access to health coaching, wellness challenges, and preventative healthcare programs.

Questions for Students

  1. What advantages can companies gain by providing mental health benefits?
  2. What types of mental health benefits do you believe companies should provide? Provide a rationale for your recommendation(s)?

Sources:  T. Weiss, “Companies focus on mental health” The Wall Street Journal (April 19, 2023): A11; C. Borchers, “Discussing mental health is a work in progress”, Wall Street Journal (April 20, 2023): A14; J. Romsey, “As Workplace Mental Health Worsens, Employee Engagement Plummets”(July 5, 2023) from shrm.org. “Lincolns Be Well Program – Mental Health” from https://www.ragan.com/awards/workplace-wellness-awards.

Note for Instructor

An excellent source for information on mental health is Lyra,“2023 State of Workforce Mental Health” at www.lyrahealth.com (free download). An excellent five-minute video about mental health in the workplace is from the Department of Labor (see https://www.youtube.com/watch?v=C0lDJ7MLD30). The video opens by discussing the reality of mental health crisis in the workplace then moves to a discussion of barriers to mental health in the workplace, and what companies need to do to help employees deal with mental health issues.

Chapter 7 - Training (HRM: Gaining a Competitive Advantage)

Chapter 7 – Training Employees (Fundamentals of HRM)

HR Practices Benefit Both Low-Wage Workers and Their Employers

Many companies fail to recognize the importance of low-wage workers. Overall, it is estimated that low-wage workers represent twenty-five percent of the labor force. Due to the shortage of workers in low-paying service occupations in retail, hospitality, and health care companies have tended to rely on wage increases to attract and retain these employees. Low-wage workers in these occupations hold jobs such as food service, housekeeping, nursing assistants, and cashiers. Despite their low wages, these workers are the face of the company to the customer - products and services cannot be provided without them.

Although there is a lack of consensus on the actual dollar amount that identifies a low-wage worker in the US, one estimate is two-thirds or less of the median wage of workers in their prime working years, or approximately $17. 00 per hour or $35,000 per year. Keep in mind that many of the workers who receive the federal minimum wage or state minimum wage would be considered low-wage workers. The federal minimum wage is $7.25 per hour ($2.13 per hour for employees who can receive tips) but many states have established higher minimum wages. In many major US cities, an annual wage of $35,000 is likely insufficient for workers to cover rent, food, and other living expenses.

Paying higher than minimum wage has not been able to solve labor shortages or stem the high level of turnover of employees in low-paying service occupations. Typically, companies have failed to provide these employees with the full range of HR practices that could engage them, improve their productivity, and motivate them to stay rather than leave to seek a job that pays a few cents more. Rather, training, opportunities for career growth, and feedback tend to be provided for salaried workers rather than front-line employees.

Some companies are realizing that low-wage workers cannot be easily replaced, are strategically important for success, and want to improve their lives. Disney has invested in upgrading the skills of their low-wage workforce. Once they have worked for Disney for 90 days hourly workers can enroll in an education program that allows them to either earn a degree, a high school diploma, or a vocational skill. Disney pays all of their tuition costs and reimburses them for fees and books. Disney’s educational partners include North Carolina Agricultural and Technical State University (a historically black college), Johnson & Wales University which focuses on culinary skills, and several colleges and universities in California (e.g., California State University, Fullerton). Over ten thousand Disney employees are participating in the educational program and over 3500 have graduated. Disney has promoted over 2500 students internally due to the skills they have acquired from these educational opportunities. The educational opportunities are also helping Disney attract talent: Twenty-five percent of job applicants for hourly positions were motivated to do so because of the availability of education, training, and career development. After the vice president of Avanzar Interior Technologies, an auto supplier, found one of his employees homeless and sleeping in the factory parking lot so he would not be late for work, he decided to take action. A survey he conducted showed that in the previous three months, sixteen percent had experienced food insecurity, housing insecurity, and were unable to pay their bills. To help these employees the company has invested in mentors who are available to all employees. The mentors can coach employees on possible training options and promotion opportunities within the company.

Questions for Students

  1. Why do you think companies have not traditionally provided low-wage workers with training and growth opportunities beyond what they need to successfully perform their current job?
  2. What other training and development opportunities should Disney and Avanzar offer their employees?
  3. Should companies encourage and prepare managers to have career discussions with low-wage employees? Explain your answer.

Sources: J. Fuller & M. Raman, “The High Cost of Neglecting Low-Wage Workers”, Harvard Business Review (May-June 2023): 40-48; C. Behrens, “Ohio’s Minimum Wage to Rise in 2024”, The Columbus Dispatch (December 24, 2023): 2B; US Department of Labor, “Minimum Wage” from www.dol.gov, accessed December 24, 2023; A. Omeokwe, “Leverage Fades for Low-Wage Workers”, The Wall Street Journal (November 15, 2023): A2; “Who is the Low Wage Workforce?” (October 2, 2023) from www.workrisenetwork.org.

Note for Instructors

The 3-minute video “What low-wage workers want” at https://www.youtube.com/watch?v=TqQnq5T1ZG8 discusses the disconnect between what managers believe about frontline low-wage workers and what these workers want at work.

Chapter 1 – Human Resource Management: Gaining a Competitive Advantage (HRM: Gaining a Competitive Advantage)

Chapter 4 – The Analysis and Design of Work (HRM: Gaining a Competitive Advantage)

Chapter 2 – Trends in Human Resource Management (Fundamentals of HRM)

Chapter 4 – Analyzing Work and Designing Jobs (Fundamentals of HRM)

Meet Charlie

HomeServe USA Corporation, a home-repair service company, sells plumbing, heating, cooling, and electrical repair insurance plans to about five million customers in North America.

HomeServe is using an artificial intelligence-powered virtual agent known as Charlie that is based on a conversational AI platform from Google and other technologies. Machine-learning models are being used to review and analyze conversations between agents and customers. Machine learning uses data and algorithms to imitate the way that we learn, gradually improving its accuracy. In the case of HomeServe, AI can analyze the words and emotions or sentiments that customers are expressing, find patterns, and tell agents what to do next.

Charlie is currently used to assist HomeServe’s human agents. Charlie answers over eleven thousand phone calls each day, routes them to the appropriate departments, processes claims, and schedules repair appointments. The agent gets the calls that Charlie can’t understand. She monitors agents’ phone calls whispering to them when a customer is eligible for certain coverage plans. At the start of a phone call, she types on agents' screens to tell them why the customer is calling.

Charlie isn't universally liked by her human peers. She can be controlling and bossy, requiring agents to say specific words when they talk to customers. She sometimes routes callers to the wrong department. Sometimes she suggests unsolicited ideas for what agents should say to customers. For example, Charlie recently told a human agent that a customer wanted to enroll in a repair plan. She didn't understand that the man's water pipe had burst, that he was waiting for a repairperson to arrive, and was upset. When the human agent expressed his understanding to the customer (based on Charlie’s recommendation) that he wanted to enroll in a service repair plan the man became very angry. HomeServe management likes Charlie’s efficiency and customer satisfaction has increased since its use. They plan on expanding her capability by making her responsible for telling agents exactly what they should say and do next. Charlie will also start rating the human agent’s performance.

Questions for Students

  1. Do you think AI-powered agents like Charlie are best suited to work with expert experienced human agents, newly hired human agents, both, or neither? Explain your choice.
  2. Could Charlie ever replace human agents at HomeServe? Explain your position.
  3. Discuss the HR practices that are necessary to support the successful introduction and use of AI-powered agents like Charlie in the workplace.

Sources: IBM, “What is machine learning?”, from ibm.com/topics/machine-learning; L. Bannon, “AI Comes to the Office. It’s Bossy, Efficient & Dehumanizing”, The Wall Street Journal (February 18-19, 2023): B1, B4-B5.

Note to Instructors

An eight-minute video discussing customer service, call center work (first five minutes) and the use of AI (last three minutes) from CBS Sunday Morning, “How artificial intelligence is revamping customer call centers”, is available at https://www.youtube.com/watch?v=cFK4f1t63Co. The video could be shown in class before assigning students to teams and having them read the case and answer the questions.

Chapter 5 - Human Resource Planning and Recruitment (Human Resource Management: Gaining a Competitive Advantage)

Chapter 5 – Planning for and Recruiting Human Resources (Fundamentals of HRM)

Defending the Country: A Family Business? 

 Referrals are one of the best sources of recruits for several reasons, but at some point, can you have too much of a good thing? When it comes to military service, there is an increasing perception that the applicant pool from which the U.S. Armed Services draws from is too small and getting too narrow, especially when one evaluates this against the diverse skill set required to engage in modern combat on a digital battlefield – one that might involve drones, chemicals, and even nuclear weapons.

Concerning geography, the applicant pool is narrow when one considers the counties where recruits come from. Those who sign up for military service overwhelmingly come from counties in the South and a scattering of communities near military bases. The South, where the culture of military service runs deep and military installations are plentiful, produces 20 percent more recruits than would be expected, based on its population. In contrast, the Northeast, which has very few military bases and a lower percentage of veterans, produces 20 percent fewer. Military leaders have sounded the alarm over the growing gulf between communities that serve and those that have not for years, warning that relying on a small number of countries where the tradition of military service is deeply ingrained is unsustainable.

This narrow pool then becomes narrower when one considers that the single best predictor of who will consider joining the military is a person’s familiarity with the military, and the best predictor of this is whether or not the person has had family members who served. Thus, within a narrow range of counties, the pool becomes even smaller and focuses on a narrow set of families. More specifically, in 2019, 79 percent of Army recruits reported having a family member who served and in over 30 percent of the cases it was a parent. In a nation where less than 1 percent of the population serves in the military, this pool of applicants is getting very, very small and unrepresentative of the country as a whole. The Army alone needs to recruit close to 70,000 people a year and this is challenging when it is being staffed like a family business.

The Army is well aware that it cannot sustain recruitment numbers by relying on such a narrow applicant pool, and has tried to broaden its appeal with glossy advertisements on social media platforms. It has also tried to make inroads in more liberal communities where they emphasize the college benefits and career training in medical and tech fields. Using these kinds of tactics to expand the applicant pool is critical. As Anthony M. Kurta, secretary of Defense for personnel and Readiness has stated, “the lack of knowledge and the inability of the general population to identify with those who serve threatens our ability to recruit the number of quality youth with the needed skill sets to maintain our advantage.”

Sources: C. Woody, “The Army is Thinking about the Threat of Nuclear War Again and Wants to Make Sure it has the Right People to Deal with It, Business Insider, January 17, 2020; D. Phillips, “Who Signs Up to Fight? Makeup of U.S. Recruits Shows Glaring Disparity,” The New York Times Online, January 10, 2020; B. Kesling, “Army Deploys Videogames to Reach Recruits Amid Pandemic,” The Wall Street Journal Online, May 17, 2020; B. Kesling, “U.S. Army Tries New Recruiting Tactics After Missing Targets,” The Wall Street Journal Online, September 17, 2019. 

Questions for Students

  1. How is recruiting for the military qualitatively different than recruiting someone for a more traditional job or occupation?     
  2. How has the past success that the military has had recruiting from military families become a liability as the organization prepares for its future, and what can be done to get recruiters to become more risk-seeking when it comes to reaching out to different communities?   

Note for Instructors

The NBC News six-minute video “US military faces historic struggle with recruitment” from https://www.youtube.com/watch?v=ZJ8FtTBpqck  discusses why the military is having difficulty recruiting and impact on military effectiveness (military readiness). The PBS NewsHour eight minute video https://www.youtube.com/watch?v=ok5rur1vX3g discusses proposed solutions to the recruiting problem. You can use this video as a follow-up after discussing the questions and ask students to note the proposed solutions and evaluate which of them they believe will be most effective. If you have students who served in the military in your class you can ask them for their perspective on the recruiting crisis. For example, what’s attractive and unattractive about serving in the military?

Chapter 6 - Selection and Placement (Human Resource Management: Gaining a Competitive Advantage)

Chapter 6 – Selecting Employees and Placing Them in Jobs (Fundamentals of HRM)

All is Not at Well at Wells Fargo (Again)

Goals and timetables are often an effective means of getting hiring managers to increase the diversity of their hiring practices. Thus, the “Diversity Slate Policy” introduced at Wells Fargo seemed like a great idea. The policy required that half of the candidates who interviewed for any job that paid over $100,000 a year be female or non-white. It also called for interview panels that were diverse in terms of their composition. The company claimed the policy was in reaction to the George Floyd murder at the hands of the police; however, it also followed an $8 million settlement that the company paid out after the Department of Labor charged it with illegal discrimination against over 30,000 black applicants.

Regardless of the genesis of the policy, this was a good idea when it came to diversifying the company in theory. In practice, however, the program just became another entry on the long list of Wells Fargo’s ethical problems because it turned out that most of the diverse candidates who were interviewed were applying for jobs that were already filled. That is, 12 employees, as part of a New York Times investigation, testified that they were told to conduct fake interviews to pad the numbers that were going to be audited by the Department of Labor as part of the earlier discrimination finding. One of the managers, Joe Bruno, noted that the sham interviews were “inappropriate, morally wrong and ethically wrong,” but that those who failed to engage in the practice were at risk of losing their jobs.

The company claimed the Diversity Slate Policy was based on what they perceived as the successful application of this practice in the National Football League (NFL), under the title “The Rooney Rule.” However, had the company done their homework a little more closely, they would have learned that many black coaches in the NFL complained about the rule and eventually sued the league for conducting the exact kind of sham interview. Other companies such as Adobe, Best Buy, and Pinterest also found that the application of this rule – without actual evidence that members of protected groups were getting hired -- resulted in perceptions that it was all just useless window dressing.

Not surprisingly, the reaction to this unethical practice at Wells Fargo was swift and the New York Times reporting triggered yet another discrimination probe by federal prosecutors that week. The stock market also passed judgment on the news in the sense that the company’s stock dropped 5% in a single day. Finally, the damage that the company’s reputation took in the labor market is likely to be lasting, especially for the members of protected groups they claim to value.

Questions for Students

  1. Why do you think that an employer might be attracted to quotas for interviewees but not actual hires?    
  2. Short of outright quotas, what can organizations do to help hire a more diverse employee base and how can interviews be designed to accomplish this goal?    

Sources: E. Flitter, “At Wells Fargo, a Quest to Increase Diversity Leads to Fake Job Interviews, The New York Times Online, May 19, 2022; D. Reichl, “Wells Fargo is Under Federal Investigation for Conducting Fake Job Interviews of Minority Candidates, Fortune Online, June 9, 2022; E. Flitter “Wells Fargo Announces ‘Pause’ of Policy That Led to Fake Job Interviews,” The New York Times Online, June 6, 2022. 

Note for Instructors

A CBS News 8-minute video, “Wells Fargo accused of conducting fake interview by former employees”, at https://www.youtube.com/watch?v=s5OvwNFM98M can be used to accompany this case. A short two minute video from the Washington Post explaining the Rooney Rule is available at https://www.youtube.com/watch?v=gZweXqn8nhg.