Human Resource ManagementHuman Resource Management & &

Labour Relations (H600)Labour Relations (H600)

Akanksha BediAkanksha BediDeGroote School of BusinessDeGroote School of Business

McMaster UniversityMcMaster University

1

Introduction to Introduction to Human Resource ManagementHuman Resource Management

& &Strategic HRM Strategic HRM

2

Lecture Overview / Lecture Overview / ObjectivesObjectivesWhy this course

Syllabus

Introduction to HRM and its functions

Challenges facing Canadian organizations◦Exercise – Discussion

Strategic HRM

3

Why this course?Why this course?This course provides a basic knowledge

of the key aspects of managing human resources in domestic and multinational organizations, emphasizing the link between human resource policies and practices and organizational strategy.

Topics include human resource planning, job analysis, staffing, the legal environment, training, performance appraisal, compensation, employment relations, labour relations, and recent developments and future trends.

4

H600H600Text

◦Canadian HRM by Schwind, Das, & Wagar

◦Cost $119.95 (New) OR $90 (Used)See text website

◦www.mcgrawhill.ca/college/schwindIncludes

◦Multiple choice quizzes for each chapter◦List of relevant HR webpages (e.g.,

HRPAO, HRDC, etc.)TA for the course: Mark Skowronski

(skowrom@mcmaster.ca)5

Let’s review the syllabusLet’s review the syllabusTwo group assignments (each

worth 20%)◦Phase1: HR component (Due March

4th)◦Phase II: LR component (Due March

25th) One presentation (worth 10%)Midterm Exam (worth 25%)Key Learnings Test (worth 25%)

6

Why study HRM?Why study HRM?People (human resources) are

the essential resource of all organizations

These human resources create organizational innovations and accomplishments

Organizational success depends upon careful attention to human resources

7

What is HRM?What is HRM?

HRM – functional definition◦ “Is a set of interrelated policies, practices, and

programs whose goal is to attract, socialize, motivate, maintain, and retain an organization’s employees” (Belcourt et al., 2005)

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

8

HumanHumanResourceResource

ManagementManagement

OrganizationalOrganizationalObjectivesObjectives

EmployeeEmployeeObjectivesObjectives

SocietalSocietalObjectivesObjectives

Objectives of HRMObjectives of HRM

to contribute to organizational effectiveness

legal compliance

human rights

long-term career goals

HRM Organizational HRM Organizational ObjectivesObjectivesPrimary 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

Influenced by many factors◦ Industry characteristics, organization’s

product or service, organization’s competitive strategy, etc.

10

HRM Societal ObjectivesHRM Societal ObjectivesHRM must be socially responsible

◦Contribute to meeting the needs and challenges of society

◦Narrowly - legal compliance◦Broadly - concern with human rights,

environmental and social responsibility, etc.

What are examples of when social concerns may conflict with organizational goals?

11

HRM Employee ObjectivesHRM Employee ObjectivesAssist 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

12

The HRM ProfessionalThe HRM Professional

13

Major competencies

Yeung, Brockbank, Ulrich (1994)

Challenges facing Canadian Challenges facing Canadian OrganizationsOrganizations

1. Economic2. Technological3. Demographic4. Cultural (Values)5. Legal

14

Exercise: Group Exercise: Group DiscussionDiscussionChoose two of the challenges facing

HR managers (pp. 6-22 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)

15

Economic ChallengesEconomic Challenges

2 related challenges:◦Global trade – international trade and

competition with other markets◦Need for productivity improvement

Often competing in markets with lower wages, etc.

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

16

Technological ChallengesTechnological ChallengesTechnology has changed how work gets

done◦Computerization – internet; increased

flexibility◦Automation – greater speed, predictability,

flexibility◦Some hazardous/repetitive jobs being

automated

HR Implications◦Workers need to possess competencies

related to technology◦New technology = job losses and job

creation◦Changes in how HR activities get done

E.g., internet recruiting17

Demographic ChallengesDemographic ChallengesIncreasing # 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 ◦From agriculture & manufacturing to

telecom & service◦Shift toward “knowledge” workers◦ Implications: different skill and training

needs18

Demographic ChallengesDemographic ChallengesEducational attainment of workers

◦ Higher education levels coupled with high illiteracy rates

◦ Implications: productivity, safety

Aging workforce◦ Growing % of workforce is in higher age

categories◦ Org’s lose skilled / experienced workers◦ 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

19

Cultural (Values) Cultural (Values) ChallengesChallengesText 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

20

Legal ChallengesLegal ChallengesNumerous laws influence

organizational (and HR) activities◦Employment equity◦Human rights laws◦Charter of rights and freedoms◦Safety legislation

21

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

22

Strategic HRM Strategic HRM

23

Common Misconceptions about Common Misconceptions about HRHR

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 activities add to an organization’s expenses/costs but not to revenue generation

24

Overcoming these Overcoming these MisconceptionsMisconceptionsHR 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

25

What is Strategic HRM?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

26

Guiding Logic of SHRMGuiding 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.

27

Steps in Strategic HRMSteps in Strategic HRM

EnvironmentalEnvironmentalAnalysisAnalysis

EnvironmentalEnvironmentalAnalysisAnalysis

OrganizationalOrganizationalMission &Mission &

GoalsGoalsAnalysisAnalysis

OrganizationalOrganizationalMission &Mission &

GoalsGoalsAnalysisAnalysis

Analysis ofAnalysis ofOrganizationalOrganizational

Strengths &Strengths &CultureCulture

Analysis ofAnalysis ofOrganizationalOrganizational

Strengths &Strengths &CultureCulture

Analysis ofAnalysis ofOrganizationalOrganizational

StrategiesStrategies

Analysis ofAnalysis ofOrganizationalOrganizational

StrategiesStrategies

Choice &Choice &ImplementationImplementation

Of HROf HRStrategiesStrategies

Choice &Choice &ImplementationImplementation

Of HROf HRStrategiesStrategies

Review & Review & Evaluation of HR Evaluation of HR

StrategiesStrategies

Review & Review & Evaluation of HR Evaluation of HR

StrategiesStrategies

Aligning HR and Organizational Aligning HR and Organizational StrategyStrategy

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 29

Example of Aligning HR and Example of Aligning HR and OrganizationalOrganizationalStrategyStrategyCost 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◦ Internal staffing –

promotion from within

30

Example of Aligning HR and Example of Aligning HR and Organizational StrategyOrganizational Strategy

Differentiation◦ Growth◦ Innovation◦ Decentralization◦ Emphasis on

marketing◦ Product engineering◦ R&D◦ Focus on quality◦ Highly skilled labour

HR Strategies◦ Broad job classes◦ Flexible work

planning◦ Focus on recruitment,

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

based pay◦ Performance

evaluations for development

◦ External staffing

31

Wal-Mart vs. CostcoWal-Mart vs. Costco

Facts about Wal-Mart: ◦Wal-Mart business model / strategy:◦“Always Low Prices. Always.”◦“Save money. Live better.”

Average hourly wage: $10.86Poor benefitsDoes not permit unions

Facts about CostcoFacts about CostcoCostco business model / strategy:

◦ Sell a limited number of items, keep costs down, rely on high volume, pay workers well, have customers buy memberships, and aim for up-scale shoppers, especially small business owners

◦ And, don’t advertise

Average hourly wage: $17Substantial benefitsPermits unions

Wal-Mart vs. CostcoWal-Mart vs. CostcoWal-Mart:

◦ secures low prices by insisting on low costs from suppliers and paying workers low wages with few benefits.

◦ Turnover: 44% per year◦ Stock value over 5 years: minus 10%

•Costco emphasizes its Code of Ethics in its everyday

business operations including respect for suppliers and employees

Turnover: 17% per year Stock value over 5 years: plus 55% Suggests that there is significant

variability in HR practices, etc. even within a particular strategic category

Questions / CommentsQuestions / Comments

35