Is Quantification the Right Approach? Midwest Corporation is a medium-sized conglomerate with 14 divisions: 3 in the hotel/restaurant business, 5 in furniture manufacturing, and 6 in the financial sector. In collaboration with a consultant, the HR department at corporate headquarters has developed a procedure to evaluate the health of each division's HR system. This procedure consists of three steps: 1. Using computerized record files, generate information on each division's turnover rate, absenteeism rate, number of grievances, accident rate, and number of equal opportunity complaints. 2. Compute an overall index of HR effectiveness for each division that summarizes all the information generated in Step 1. 3. Compute the difference between each division's overall HR effectiveness index (generated in Step 2) and the average overall HR effectiveness for all of Midwest's similar businesses. Thus, for example, the furniture manufacturing plant in Chattanooga, Tennessee, would be compared to all of Midwest's other furniture manufacturing plants. The HR director at Midwest's corporate headquarters has been able to persuade top executives that the appraisal and compensation of division executives should be based in part on the comparative computations done in Step 3. The goal, as the HR director sees it, is to hold division managers accountable for the effective use of human resources in each plant. Critical Thinking Questions 1. What are the advantages and disadvantages of Midwest's proposed three-step HR evaluation procedure? Explain. 2. Do you agree with the method being proposed at Midwest? If not, what alternatives would you suggest? 3. Is linking the HRM effectiveness score to division managers' performance appraisal and pay likely to have a positive or negative effect on these managers' behavior? Why or why not? Cooperative Learning Exercise 1. Form into groups of four to five students each. One student plays the HR director, the others division managers. The division managers have just recently heard about the HR director's proposal and have asked for a meeting to express their reservations about the plan. Play out that meeting