Commerce 2BC3 Human Resource Management and Labour Relations Winter 2010 DeGroote School of Business McMaster University 1

Commerce 2BC3 Intro to Human Resource Management Week 1 _________________________________ Dr. Teal McAteer DeGroote School of Business McMaster University 2

Announcements

• Complete and hand in Group Information Sheet • For section changes, go to the Academic Programs Office (1 st floor of DSB) • See text website: – www.mcgrawhill.ca/college/schwind – check preface of text • Includes: – Multiple choice quizzes for each chapter – List of relevant HR webpages • E.g., HRPAO, HRDC, Ontario Ministry of Labour, etc.

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Week Overview / Objectives

• Introduction to HRM and its functions • Challenges facing Canadian organizations – Exercise – Discussion re: challenges • Strategic HRM 4

What is HRM?

• •

HRM – functional definition

– “Is a set of interrelated functions and processes whose goal is to attract, socialize, motivate, maintain, and retain an organization’s employees” (Belcourt et al., 2002)

HRM – goal-based definition

– “aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives” (Schwind et al., 2007) •

HRM serves 3 primary constituencies

: – The organization – Society – Individual employees 5

HRM Organizational Objectives

• Primary objective of HRM is to contribute to organizational effectiveness • HRM is not an end in itself – Its role is to help the organization achieve its primary objectives – E.g., through selection, training, H&S Mg’t • Influenced by many factors – Industry characteristics, organization’s product or service, organization’s competitive strategy, etc.

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HRM Societal Objectives

• HRM must be socially responsible – Meet the needs and challenges of society – Narrowly - legal compliance – Broadly - concern with human rights, social responsibility, etc.

• Can be challenging when social concerns conflict with organizational goals – Examples??

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HRM Employee Objectives

• Assist employees in achieving personal goals – Short-term performance goals and long-term career goals • Can be challenging to balance individual and organizational goals – E.g., when training results in employees developing skills that are attractive to other organizations 8

The HRM Professional

• Major competencies: – Business mastery • Strategy, financial realities, customer orientation – Mastery of HRM tools • Staffing, training, compensation, etc.

– Change mastery – Personal credibility 9

The HRM Professional

• CHRP – Certified Human Resources Professional designation – Requirements • Academic – coursework, etc.

• Comprehensive exam • 3 years of relevant experience – See www.hrpao.org

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Challenges facing Canadian Organizations 1. Economic 2. Technological 3. Demographic 4. Cultural 5. Legal 11

Economic Challenges

• 2 related challenges: – Global trade – international trade and competition with other markets – Need for productivity Improvement • More output with equal (or less) input • HR Implications – Need to contribute to international competence of workers (via training, etc.) – Potential workforce reductions – can result in job insecurity and negative effects on workers 12

Technological Challenges

• Technology affects how work gets done – Computerization – increased flexibility – Automation – some hazardous/repetitive jobs being automated • HR Implications – Workers need to possess competencies related to technology – Job losses (layoffs, etc.) due to technology – Changes in how HR activities get done • E.g., internet recruiting 13

Demographic Challenges

•

Increasing # of women in the workforce

– Account for 70% of the employment growth in Canada over last 20 years – Implications: Employment equity, child care, flexible work, etc.

•

Change in the types of work

– Shift toward “knowledge” workers – Implications: different skill and training needs 14

Demographic Challenges

•

Educational attainment of workers

– Higher education levels coupled with high illiteracy rates – Implications: productivity, safety •

Aging workforce

– Growing % of workforce is in higher age categories – Implications: retirement, job design, re-training, benefits, work schedules, etc.

•

More part-time, contract, contingent workers

– Accounts for about 15% of all employment – Implications: more flexibility for organizations but raises issues of pay inequity, reduced employee loyalty 15

Cultural (Values) Challenges

• Text refers to 3 examples:

Attitudes toward work

– Different expectations re: work and leisure – People want more flexibility, holiday time, etc.

•

Ethnic diversity

– Immigration from numerous countries – Potential for conflicts of values, etc. but also opportunity to learn, expand •

Attitudes toward government

– Negative attitudes toward those in power – effects employment relationships 16

Legal Challenges

• Numerous laws influence organizational (and HR) activities – Employment equity – Human rights laws – Charter of rights and freedoms – Safety legislation – Minimum Wage Acts 17

Exercise: Group Discussion

• • Choose two of the challenges facing HR managers (pp. 6-23 of text): – Economic – Demographic – Technological – Cultural

Exercise: What are the HR implications of those challenges?

–

(e.g. implication of increased women in the workforce is increased need for flexible work arrangements)

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• Challenges illustrate the need for a strategic approach to managing organizations…

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Strategic HRM

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Common Misconceptions about HR • HR is primarily an administrative function • HR has little strategic importance and does not represent a potential source of an organization’s competitive advantage • HR is a “cost centre” – its activities add to an organization’s expenses/costs but not to revenue generation 21

Overcoming these Misconceptions

• HR can – and indeed should – play a key role in an organization’s strategy • There is increasing evidence that HR activities are associated with various indicators of organizational performance (e.g., ROI, profitability, stock prices) • $ put toward HR systems and activities should be viewed as investment rather than simply cost 22

What is Strategic HRM?

•

Strategic HRM

–Integration of HRM systems to the overall mission, strategy, and success of the firm, while meeting the needs of employees and other stakeholders –The intentional use of HR systems to help an organization gain competitive advantage 23

Guiding Logic of SHRM

• “HRM practices must develop employees’ skills, knowledge, and motivation such that employees behave in ways that are instrumental to the implementation of a particular strategy” (Bowen & Ostroff, 2004) • Contingency Perspective – Effectiveness of HRM system depends on contextual factors such as industry type, firm size, etc.

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Steps in Strategic HRM

1. Environmental Analysis 2. Organizational Mission and Goals Analysis 3. Analysis of Organizational Strengths and Culture 4. Analysis of Organizational Strategies 5. Choice and Implementation of HR Strategies 6. Review and Evaluation of HR Strategies 25

Aligning HR and Organizational Strategy • Use Porter’s strategies for illustration •

Cost Leadership

– Tight cost control, production efficiency, products designed for ease of manufacture, intense supervision of labour •

Differentiation

– Emphasis on marketing, product engineering, R&D, quality, technological innovation •

Focus

– Combination of cost leadership and differentiation directed a market segment 26

Example of Aligning HR and Organizational Strategy •

Cost Leadership

– Tight cost control – Production efficiency – Products designed for ease of manufacture – Intense supervision of labour •

HR Strategies

– Clear job descriptions – Detailed work planning – Emphasis on technical skills – Job-specific training – Job-based pay – Performance evaluations for control 27

Example of Aligning HR and Organizational Strategy •

Differentiation

– Emphasis on marketing – Product engineering – R&D – Focus on quality – Technological innovation – Highly skilled labour •

HR Strategies

– Emphasis on innovation & flexibility – Broad job classes – Loose work planning – Focus on recruitment, careful selection – Team-based training – Individual (skill)-based pay – Performance evaluations for development 28

Outcomes of Strategic HRM

• “When you align HR with organizational strategy, you’ll see growth in commitment, improved financial results, and find yourself better able to attract and retain the right people.” » (Paine, 1999) 29

Questions / Comments

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