Chapter 1
 Human resources management - the process of managing human talent to achieve
an organization’s objectives
 Human resources specialists design application forms, interview formats, amount
of money being paid to employees, benefits, bonuses, training, work conditions
Competitive Challenges and Human Resources Management
1. Going Global
 Globalization – the trend toward opening up foreign markets to international trade
and investment
 Corporate social responsibility – the responsibility of the firm to act in the best
interests of the people and communities affected by its activities
Effects of Globalization on HRM
 HRM have to determine the knowledge and skills of foreign workforces and figure
out how best to hire and train them
 Must also relocate managers and other works to direct the efforts of a foreign
workforce
2. Embracing New Technology
 Computer networks (storing & retrieving data), and internet (business transactions
through e-commerce)
 Virtual workers – those who work from home, in hotels, in their cars, wherever
their work takes them
From Touch Labour to Knowledge Workers
 Knowledge workers – workers whose responsibilities extend beyond the physical
execution of work to include planning, decision making, and problem solving
 Advanced technology explains the shift from touch labour to knowledge workers,
where employee responsibilities expand to include a richer array of activities
Influence of Technology in HRM
 Human resources information system (HRIS) – a computerized system that provides
current and accurate data for purposes of control and decision making
 HRM is a powerful weapon for lowering costs, increasing productivity, speeding up
response times, and improving decision making and customer service
 When an effective HRIS is implemented the biggest advantage gained is that HR
personnel can concentrate more effectively on the firm’s strategic direction instead
of on routine tasks (i.e. forecasting personnel needs, planning for career/employee
promotions, evaluating the impact of the firm’s policies) – help improve the firm’s
earnings and strategic direction
3. Managing Change
 Change is a core competency of organizations especially in highly competitive
environments
Types of Change
 Reactive change – change that occurs after external forces have already affected
performance
 Proactive change – change initiated to take advantage of targeted opportunities
Managing Change through HR
 Successful change rarely occurs naturally or easily
 Some of the major reasons as to why change efforts fail come down to HR issues:
o No sense of urgency
o Not creating powerful coalition to guide the effort
o Lack leaders who have a vision
o Lack leaders who communicate the vision
o Not removing obstacles to the new vision
o Not systematically planning for/creating short term “wins”
o Declaring victory too soon
o Not anchoring changes in the corporate culture
 People resist change because it requires them to modify/abandon ways of working
that have been successful or familiar to them
 To manage change those in HR need to envision the future, communicate this
vision to employees, set clear expectations for performance, and develop the
capability to execute by reorganizing people and reallocating assets
 These key elements are built into successful organizations change management:
o They link the change to the business strategy
o They create quantifiable benefits
o They engage key employees, customers, and their suppliers
o They integrate required behaviour changes
o They lead clearly, unequivocally and consistency
o They invest to implement and sustain change
o They communicate continuously and personally
o They sell commitment to the change, not communication about the change
4. Managing Talent, or Human Capital
 Human capital – the knowledge, skills and capabilities of individuals that have
economic value to an organization
 Human capital has a tremendous influence on an organization’s performance
Human Capital and HRM
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To build human capital, managers must develop superior knowledge, skills and
experience within their workforce
If a valued employee leaves a company, they take their human capital with them
Efforts to empower employees and encourage their participation and involvement
more fully utilize the human capital available
Developmental assignments can be a valuable way of facilitation knowledge
exchange and mutual learning
Effective communication is instrumental in sharing knowledge and making it widely
available throughout the organization
HR managers play an important role in creating an organization that understands
the value of knowledge, documents the skills and capabilities available to the
organization, and identifies ways of utilizing that knowledge to benefit the firm
5. Responding to the Market
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Managers must meet customer requirements of quality, innovation, variety and
responsiveness
“Better, faster, cheaper”
Total Quality Management, Six Sigma, and HRM
 Total Quality Management (TQM) – a set of principles and practices whose core
ideas include understanding customer needs, doing things right the first time, and
striving for continuous improvement
 Six Sigma – a process used to translate customer needs into a set of optimal tasks
that are performed in concert with one another
 Six Sigma – systematic approach to quality and includes major changes in
management philosophy and HR programs
 Six Sigma can have a powerful effect on the quality of products, the performance of
customer service, and the professional development of employees
 The importance of HR to Six Sigma begins with the formation of teams, and extends
to training, performance management, communication, culture, and even rewards
Reengineering and HRM
 Reengineering – fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in cost, quality, service and speed
 Reengineering is a more radical approach to process redesign
 Requires managers to start from scratch in rethinking how work should be done,
how people/technology should interact, how organizations should be structured
 How is it related to HRM?
o HR issues drive change and reengineering requires that managers create an
environment for change
o Reengineering efforts depend on effective leadership and communication
processes, two other areas related to HRM
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Selection, job descriptions, training, career planning, performance appraisal,
compensation, and labour relations (HR) are all candidates for change to
complement and support reengineering efforts
6. Containing Costs
 Increasing pressures on companies to lower costs and improve productivity to
maximize efficiency
 Organizations are taking many approaches to lower labour-related costs
(downsizing, outsourcing, off shoring and engaging in employee leasing)
Downsizing
 Downsizing – planned elimination of jobs
 Instead of layoffs, other alternatives are early retirement, voluntary severance and
attrition
 Has become a tool continually used by companies to adjust to changes in
technology, globalization, and the firm’s business direction
 Some firms benefit from layoffs, some don’t
 Advocates of no-layoff policies note that layoffs may backfire after taking into
account some hidden costs like:
o Severance and rehiring costs
o Accrued vacation and sick day payouts
o Pension and benefit payoffs
o Potential lawsuits from aggrieved workers
o Loss of corporate memory and trust in management
o Lack of staffers when the economy rebounds
o Survivors who are risk averse, paranoid, and political
 Companies that avoid downsizing get some important benefits from these policies:
o A fiercely loyal, more productive workforce
o Higher customer satisfaction
o Readiness to snap back with the economy
o A recruiting edge
o Workers who aren’t afraid to innovate, knowing their jobs are safe
 To approach downsizing more intelligently, companies have made special efforts to
reassign and retrain employees for new positions when their jobs are eliminated
(consistent w/ the notion that employees are ASSETS, human capital)
Outsourcing, Offshoring, and Employee Leasing
 Employment relationship between companies and employees has shifted from
relationship-based to transaction-based
 Outsourcing – contracting outside the organization to have work done that formerly
was done by internal employees
o Evidence of the trend that people are choosing to work freelance, on a contract
basis or part-time
Hire someone outside the company to perform tasks that could be done
internally
o Changing the way HR departments operate
o Has become one of the most important HR trends
Offshoring – the business practice of sending jobs to other countries
o Global sourcing
o Cost reduction is the motivating factor
o Hidden costs can ruin most/all the profits gained from offshoring: finding
foreign vendors, productivity lost during transition, domestic layoff costs,
language difficulties, foreign regulatory challenges, political/economy instability
o Offshoring decisions is made by top managers without HR’s initial input, if HR
was enabled to have a say they could carefully address issues and minimize
problems
Employee leasing – the process of dismissing employees who are then hired by a
leasing company (which handles all HR-related activities) and contracting with that
company to lease back the employee
o Popular with small companies
o Professional employer organizations (PEO) – typically larger company that takes
over management of a smaller company’s HR tasks and becomes a co-employer
to its employees
o PEO’s perform all HR duties of an employer, they provide employees with
benefits that small companies cant effort
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Productivity Enhancements
 Overemphasis on labour costs may make productivity enhancement issues seem
insignificant
 Employee productivity is the result of a combination of employees’ abilities,
motivation, and work environment, and the technology they have to work with
 Managers may find that increasing investment in employees (raising labour costs)
may lead to even greater returns in enhanced productivity
 The job of the HR manage in the future is more curcuial because of the rapid
investment in technology, people are working more hours than ever and any
additional productivity will hav to come form enhanced ability of employees, their
motivation and their work environment
Demographic and Employee Concerns
Demographic Changes
The Diversity Challenge
 The majority of Canadians are immigrants or descendants of early generations of
immigrants who arrived in Canada
 To accommodate the shift in demographics, many organizations have increased
their efforts to recruit and train a diverse workforce
Age Distribution of Employees
 Imbalance in age distribution of the labour force has significant implications for
employers
 Some companies have a good portion of their employees nearing retirement
 Another problem that accompanies age imbalances in the workforce is called the
echo boom effect
 The echo boomed or Generation Y (those born in 1980s or 1990s) account of 19% of
Canada’s workforce and are highly education, techno-savvy, team oriented, and
adaptable
o This situation challenges the ingenuity of managers to develop career patterns
for employers to smooth out gaps in the numbers and kinds of workers
o Managers will have to develop procedures to ensure that work groups
composed of different age groups learn to work together
Gender Distribution of the Workforce
 Educational attainment of women is increasing relative to men
 Employers who want to attract the talent that women have to offer are taking
measures to ensure that women are treated equally in the workplace (promotions
and compensation)
 Employers also need to accommodate working parents through parental leaves,
part-time employment, work schedule flexibility, job sharing, telecommunicating,
and child/elder care assistance
Rising Levels of Education
 Some of the fastest growing sectors of employment have been in areas requiring
higher levels of education
 While the complexity of jobs is increasing, the skills gap is huge and widening
 Trade workers and those with degrees are in great demand and this problem will
only worsen as the baby boomer generation retires
 HR departments will have to offer higher compensation to attract qualified
candidates and recruiting and selection systems will have to function more
competitively in order to identify talent
 Managing diversity – being aware of characteristics common to employees, while
also managing employees as individuals
o Critical to HR operations (i.e. women and minorities)
o Supporting, nurturing, and utilizing their differences to the organization’s
advantage
Cultural Changes
 Culture affects people’s behaviour on the job and the environment within an
organization, influencing their reactions to work assignments, leadership styles and
reward systems
 Cultures are continually changing and HR policies/procedures must be adjusted to
cope with this change
The Changing Nature of the Job
 Self-employment numbers are up
 Full-time permanent job era has disappeared
 Nonstandard jobs have taken over – part-time, temporary, contract work (30% of all
employment)
Employee Rights
 Federal law has made changes for rules for management of employees by granting
them some rights
o Equal employment opportunity
o Union representation if desired
o Safe/healthful work environment
o Pension plans regulated by government
o Equal pay for men and women performing the same job
o Privacy in the workplace
Concern for Privacy
 HR managers recognize the importance of discretion in handling information about
employees
 The Personal Information Protection and Electronic Documents Act (PIPEDA) is a
federal law that deals w/ the collection, use and disclosure of personal information
Changing Attitudes toward Work
 Personal fulfillment, self expression, balance between work and family are key
factors in job attitudes
 Most people tend to focus on finding interesting work and may pursue multiple
careers rather than being satisfied with just “having a job”
 HRM has become more complex than it was when employees were only concerned
with economic survival
Balancing Work and Family
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Because of the new familial roles (two-wage-earner/single parent family),
organizations find it necessary to provide employees w/ more family-friendly
options.
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“Family friendly” – term that includes unconventional hours, daycare, part-time
work, job sharing, pregnancy leave, parental leave, executive transfers, spousal
involvement in career planning, assistance with family problems and telecommuting
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Family friendly companies have to balance the benefits they provide to families vs.
their single employees
The Partnership of Line Managers and HR Departments
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Successful organizations combine the experience of line managers with the expertise
of HR specialists to develop and utilize the talents of employees to the greatest
potential
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HR mangers work with line mangers to address people-related issues of the
organization
Responsibilities of the Human Resources Manager
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Advice and counsel
o
serves as an in-house consultant to supervisors, managers, and executives
o
can be an invaluable resource for making decisions
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Service
o
recruiting, selecting, testing, planning and conducting training programs
o
hearing employee concerns and complains
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Policy formulation and implementation
o
propose and draft new policies or policy revisions to cover recurring problems or
to prevent anticipated ones
o
monitor performance of line departments and other departments to ensure
conformity w/ established policies, procedures and practices
o
resource to whom managers can turn to for policy interpretation
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Employee advocacy
o employee advocate – listens to employees, concerns and representing their
needs to managers
o effective employee relations provide support structure when changes interfere
w/ daily activities
Competencies of the Human Resources Manager
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Business Mastery
o need to know the business of their organization thoroughly
o understand the company’s economic/financial capabilities to develop the firm’s
strategic direction
o HR professionals must develop skills at external relations focused on customers
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HR Mastery
o HR professions are the organization’s behavioural science experts
o Staffing, development, appraisal rewards, team building and communication
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Change Mastery
o HR professionals have to manage change processes so that HR activities are
effectively merged w/ the business needs of the organization
o Involves interpersonal and problem-solving skills
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Personal Credibility
o must establish this through their internal and external customers
o earned by developing personal relationships with customers, demonstrating firm
values, standing up for one’s own beliefs, and being fair-minded in dealing with
others
Role of the Line Manager
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Managing people depends on effective supervisors and line managers
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HR managers – responsibility for coordinating programs and policies pertaining to
people-related issues, managers and employees – ultimately are responsible for
performing these functions