1

H600Human Resource Management

and Labour Relations

Dr. Teal McAteer-EarlySpring 2006

Michael G. DeGroote School of Business

McMaster University

2

H600Intro to Human Resource Management

Week 1

_________________________________

Dr. Teal McAteer-Early

Michael G. DeGroote School of BusinessMcMaster University

3

Announcements

• Complete and hand in Information Sheet• 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.

4

Week Overview / Objectives

• Introduction to HRM and its functions

• The Human Asset- OB to HR link (understanding the connection between individual behaviour, job performance and satisfaction- Individual Assignment requirements

• Challenges facing Canadian organizations– Exercise – Discussion re: challenges

• Strategic HRM

5

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., 2002)

• HRM serves 3 primary constituencies:– The organization– Society– Individual employees

6

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, managing H&S

• Influenced by many factors– Industry characteristics, organization’s product or

service, organization’s competitive strategy, etc.

7

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??

8

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

9

The HRM Professional

• Major competencies:– Business mastery

• Strategy, financial realities, customer orientation

– Mastery of HRM tools• Staffing, training, compensation, etc.

– Change mastery– Personal credibility

10

The HRM Professional

• CHRP– Certified Human Resources Professional

designation– Requirements

• Academic – coursework, etc.• Comprehensive exam• 3 years of relevant experience

– See www.hrpao.org

11

Challenges facing Canadian Organizations

1. Economic

2. Technological

3. Demographic

4. Cultural

5. Legal

12

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

13

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

14

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

15

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 and contingent workers– Accounts for about 15% of all employment– Implications: more flexibility for organizations but raises

issues of pay inequity, reduced employee loyalty

16

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

17

Legal Challenges

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

18

Exercise: Group Discussion

• Choose two of the challenges facing HR managers (pp. 5-23 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)

19

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

20

Strategic HRM

21

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

22

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

23

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

24

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.

25

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

26

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

27

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

28

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

and flexibility– Broad job classes– Loose work planning– Focus on recruitment,

careful selection– Team-based training– Individual (skill)-based

pay– Performance evaluations

for development

29

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)

30

Questions / Comments