Part 1: Nature of Human Resource
Management
Chapter 1: Changing Nature of Human
Resource Management
Prepared by Linda Eligh, University of Western Ontario
Copyright © 2008 by Nelson, a division of Thomson Canada Limited.
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Learning Objectives
After you have read this chapter, you should be able to:
1. Define HR management and identify the seven
categories of HR activities.
2. Discuss management of human capital in
organizations.
3. Discuss four challenges facing HR today.
4. Describe how the major roles of HR management are
being transformed.
5. Identify the purposes and uses of HR technology.
6. Discuss why ethical issues affect HR management.
7. Explain the key competencies needed by HR
professionals and why certification is important.
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Nature of Human Resource Management
• Human Resource (HR) Management
 The policies, practices and systems that influence
employees’ behaviour, attitude and performance in
the attainment of organizational goals.
• Who is an HR Manager?
 In the course of carrying out their duties, every
operating manager is, in essence, an HR manager.
 HR specialists design processes and systems that
operating managers help implement.
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HR Management Activities
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Fig. 1-1
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Nature of Human Resource Management
HR Activities:
Global forces and HR Management
Strategic HR Management
Equal Employment Opportunity
Staffing
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Nature of Human Resource Management
HR Activities (cont’d):
HR Development
Compensation and Benefits
Health, Safety, and Security
Employee and Labour Relations
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Nature of Human Resource Management
Smaller Organizations and HR Management
Shortage of
Qualified
Workers
Increasing
Costs
(Benefits)
Increasing
Competition
Issues of
Greatest
Concern
Increased
Wage
Pressures
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Legislative
Changes
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Typical Division of HR Responsibilities: Training
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Fig. 1-2
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Management of Human Capital
in Organizations
• Human Capital
 The collective value of the capabilities, knowledge,
skills, life experiences, and motivation of an
organizational workforce.
Also known as intellectual capital.
 How to measure the strategic value of human assets?

• Human Resources as Core Competency
 A unique capability that creates high value and
differentiates an organization from its competition.

HR competencies: a source of competitive advantage.
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HR Management Challenges
Most prevalent challenges facing HR management:
1. Globalization of Business
2. Economic and Technological Changes
3. Labour
4. Workforce Demographics and Diversity
5. Organizational Cost Pressures and
Restructuring
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HR Management Challenges
1. Globalization of Business
 Outsourcing and offshoring
 Global security and terrorism
2. Economic and Technological Changes
 Occupational shifts from manufacturing and
agriculture to service and telecommunications. Job
growth primarily in IT and healthcare
 Workforce availability and quality concerns


Inadequate supply of workers with soft
skills needed for “knowledge jobs”
Significant shortage across Canada of
tradespeople
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HR Management Challenges
3. Labour
 Employee retention
 Growth of contingent workforce

Increases in temporary workers, independent
contractors, leased employees, and part timers
caused by need for flexibility in staffing, more
difficulties in firing regular employees, and
reduced legal liability for contractors.
 Technological shifts and the Internet

Growth of information technology creating more
“virtual” employees and other challenges
 Employability Skills
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HR Management Challenges
4. Workforce Demographics and Diversity
 Multiculturalism
 Visible minorities and diversity

20% of workforce born outside Canada
with growing presence of visible minorities
 More women in the workforce

Single-parent households, dual career
couples, domestic partners, working
mothers and family/childcare
 Aging workers


Significant numbers of experienced
employees are retiring, changing to part time etc.
Age discrimination
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HR Management Challenges
5. Organizational Cost Pressures, Restructuring
 Mergers and Acquisitions
 “Right-sizing”—eliminating layers of management,
closing facilities, merging with other organizations,
and outplacing workers


Intended results are flatter organizations, increases in
productivity, quality, service and lower costs.
Costs are “survivor mentality”, loss of employee loyalty, and
turnover of valuable employees.
 HR managers must work toward ensuring
cultural compatibility in mergers.
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HR Management Roles
• Administrative Role
 Clerical and administrative support operations (e.g.,
payroll and benefits work)
Technology is transforming how HR services are delivered.
 Outsourcing HR services to reduce HR staffing costs

• Operational and Employee Advocate Role
 “Champion” for employee concerns
Employee crisis management
 Responding to employee complaints

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Changing Roles of HR Management
Fig. 1-4
Note: Example percentages are based on various surveys.
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HR Management Roles
• Strategic Role
 “Contributing at the Table” to organizational results
 HR becomes a strategic business partner by:
Focusing on developing HR programs that enhance
organizational performance.
 Involving HR in strategic planning at the onset.
 Participating in decision making on mergers, acquisitions,
and downsizing.
 Redesigning organizations and work processes
 Accounting and documenting the financial results of HR
activities.

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Operational to Strategic Transformation of HR
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Fig. 1-5
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HR Management Roles
• Collaborative HR
 The process of HR professionals from several
different organizations working jointly to address
shared business problems.
 Firms benefit from the expertise of other firms,
without having the time and expense of developing
some of their own HR practices.
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HR Technology
• Human Resource Management System (HRMS)
 An integrated system providing information used by HR
management, in conjunction with other managers, in
decision making.
 Purposes (Benefits) of HRMS
Administrative and operational efficiency in compiling HR data
 Availability of data for effective HR strategic planning

 Uses of HRMS
Automation of payroll and benefit activities
 EEO/affirmative action tracking
 HR Workflow: increased access to HR information
– Employee self-service reduces HR costs.

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Figure
Web1-6:
Based
WebSystems
Based Systems
Fig. 1-6
 Bulletin boards

What information will be available and what is information
needed?
 Data access

To what uses will the information be put?
 Employee self-service
Who will be allowed to access to what information?
 Web-based services and access

 Extended linkage

When, where, and how often will the
information be needed?
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Ethics and HR Management
Firms with High Ethical Standards
 Are more likely to reach strategic goals.
 Are viewed more positively by stakeholders
 Are better able to attract and retain human resources.
• Ethics and Global Differences
 Different legal, political, and cultural factors in other
countries can lead to ethical conflicts for global
managers.
 Corruption of Foreign Public Officials Act

Prohibits Canadian firms from engaging in bribery and other
practices in foreign countries.
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Ethics and HR Management
HR’s Role in Organizational Ethics:
HR management plays a key role as the “keeper and
voice” of organizational ethics.
• What is Ethical Behaviour?
 What “ought” to be done.
 Dimensions of decisions about ethical issues in
management:
Extended consequences
 Multiple alternatives
 Mixed outcomes
 Uncertain consequences
 Personal effects

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CCHRA CHRP National Code of Ethics
Fig. 1-7
.
1. Preamble
2. Competence
CCHRA/CHRP
3. Legal Requirements
4. Dignity in the workplace
5. Balancing Interests
6. Confidentiality
7. Conflict of Interest
8. Professional Growth and Support of
Other Professionals
9. Enforcement
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Ethics and HR Management
HR’s Role in Organizational Ethics:
• Responses to Ethical Situations
Are guided by values and personal behaviour “codes”
that include:
Does
response meet all applicable laws, regulations, and
government codes?
Does response comply with all organizational standards of
ethical behaviour?
Does response pass the test of professional standards for
ethical behaviour?
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Examples of Ethical Misconduct in HR Activities
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Fig. 1-8
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Ethics and HR Management
Ethical Behaviour and Organizational Culture:
• Organizational Culture
 The shared values and beliefs in an organization
 Common forms of unethical conduct:



Lying to supervisors
Employee drug use or alcohol abuse
Falsification of records
• Fostering Ethical Behaviour




A written code of ethics and standards of conduct
Training on ethical behaviour for all employees
A means for employees to obtain ethical advice
Confidential reporting systems for ethical misconduct
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HR Management Competencies
and Careers
• Important HR Competencies
Strategic contribution to organizational
success
Business knowledge of the organization and
its strategies
Effective and efficient delivery of HR services
Familiarity with HRMS technology
Personal credibility
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Human Resources Professional Capabilities Profile
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Fig. 1-9
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HR Management Competencies
and Careers
HR Management as a Career Field
• HR Generalist
 A person with responsibility for performing a variety of
HR activities.
• HR Specialist
 A person with in-depth knowledge and expertise in a
limited area of HR.
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Expected Earnings by Age for an HR Manager
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Fig. 1-10
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HR Management Competencies
and Careers
HR Professionalism and Certification
• Professional Involvement and Development
 Involvement by HR Professionals in professional
associations and organizations has become important
because of the broad range of issues they face.
 Examples include:


Human Resources Professionals Association of
Ontario (HRPAO)
Canadian Public Personnel Management
Association (CPPMA)
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HR Management Competencies
and Careers
• CHRP Designation
 Administered by the Canadian Council of Human
Resource Associations (CCHRA) in partnership with
provincial Human Resources associations.
 Eligibility requirements vary by provincial
associations, but the National Knowledge Exam
(NKE) and Professional Practice Exam (PPE) is the
same for everyone.
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