Human Resource Management
and Labour Relations (H600)
________________________
Agata Mirowska
DeGroote School of Business
McMaster University
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Announcements
• For section changes, go to the Academic
Programs Office (1st 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
• I’m working on getting the course up on ELM
2
Week Overview / Objectives
• Course introduction, requirements
• Introduction to HRM (definitions)
• Challenges facing Canadian organizations
– Exercise – Discussion re: challenges
• Strategic HRM
3
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
• HRM is not an end in itself
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Objectives of HRM
Organizational
Objectives
to contribute to
organizational
effectiveness
Human
Resource
Management
human rights
Societal
Objectives
legal compliance
Employee
Objectives
long-term career goals
The HRM Professional
Major competencies
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Yeung, Brockbank, Ulrich (1994)
The HRM Professional
• CHRP
– Certified Human Resources Professional
designation
– Requirements
• Academic – coursework, etc.
• Comprehensive exam
• Recertification every 3 years
– See www.hrpao.org
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Challenges facing Canadian
Organizations
1.
2.
3.
4.
5.
Economic
Technological
Demographic
Cultural
Legal
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Economic Challenges
• Related challenges:
– Recessionary Cycles
– 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 workers9
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
10
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
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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
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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 (CI/CQ)
– 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
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Legal Challenges
• Numerous laws influence organizational
(and HR) activities
– Employment equity
– Human rights laws
– Charter of rights and freedoms
– Safety legislation
– Minimum Wage Acts
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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?
– Specifically, how do the challenges affect
attracting, selecting, training, managing,
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and compensating employees (etc.)?
• 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 activities add to an organization’s
expenses/costs but not to revenue
generation
Common Misconceptions about
HR
“HR people aren’t the sharpest tacks in the
box”
“HR pursues efficiency in lieu of value”
“HR is not working for you”
“The corner office does not get HR”
Keith. H. Hammonds, “Why We Hate HR”, August 2005, FAST
COMPANY.
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
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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
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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
Environmental
Analysis
Organizational
Mission &
Goals
Analysis
Analysis of
Organizational
Strengths &
Culture
Analysis of
Organizational
Strategies
Choice &
Implementation
Of HR
Strategies
Review &
Evaluation of HR
Strategies
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
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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
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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
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Wal-Mart vs. Costco
• But, even firms using these strategies may
not use the same HR practices.
• Consider Costco and Wal-Mart (Sam’s Club,
Wal-Mart’s warehouse retail stores)
• Both use “Cost leadership” strategies, but
have different values and emphases
– See August 2006 issue of Academy of Management
Perspectives
Facts about Wal-Mart’s Sam’s Club
• Wal-Mart business model / strategy:
– “Always Low Prices. Always.”
– “Save money. Live better.”
• Average hourly wage: $10.11
• Poor benefits
• Does not permit unions
Facts about Costco
• Costco 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: $17
• Substantial benefits
• Permits unions
Wal-Mart vs. Costco
• Wal-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%
Questions / Comments?
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