Download HRM - DeGroote School of Business

Human Resource Management
&
Labour Relations (H600)
Akanksha Bedi
DeGroote School of Business
McMaster University
1
Introduction to
Human Resource Management
&
Strategic HRM
2
Lecture Overview / Objectives

Why this course

Syllabus

Introduction to HRM and its functions

Challenges facing Canadian organizations
◦ Exercise – Discussion

Strategic HRM
3
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
H600

Text
◦ Canadian HRM by Schwind, Das, & Wagar
◦ Cost $119.95 (New) OR $90 (Used)

See text website
◦ www.mcgrawhill.ca/college/schwind

Includes
◦ Multiple choice quizzes for each chapter
◦ List of relevant HR webpages (e.g., HRPAO,
HRDC, etc.)

TA for the course: Mark Skowronski
([email protected])
5
Let’s review the syllabus

Two 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?

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?

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
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
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

Influenced by many factors
◦ Industry characteristics, organization’s product or
service, organization’s competitive strategy, etc.
10
HRM Societal Objectives

HRM 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 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
12
The HRM Professional
Major competencies
Yeung, Brockbank, Ulrich (1994)
13
Challenges facing Canadian Organizations
1.
2.
3.
4.
5.
Economic
Technological
Demographic
Cultural (Values)
Legal
14
Exercise: Group Discussion

Choose 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 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 Challenges

Technology 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 recruiting
17
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
◦ From agriculture & manufacturing to telecom &
service
◦ Shift toward “knowledge” workers
◦ Implications: different skill and training needs
18
Demographic Challenges

Educational attainment of workers

Aging workforce

More part-time and contingent
workers
◦ Higher education levels coupled with high illiteracy
rates
◦ Implications: productivity, safety
◦ Growing % of workforce is in higher age categories
◦ Org’s lose skilled / experienced workers
◦ Implications: retirement, job design, re-training,
benefits, work schedules, etc.
◦ Accounts for about 15% of all employment
◦ Implications: more flexibility for organizations but
raises issues of pay inequity, reduced employee loyalty
19
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
20
Legal Challenges

Numerous 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
23
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
24
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
25
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 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 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

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 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
◦ Internal staffing –
promotion from within
30
Example of Aligning HR and Organizational
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. Costco

Facts about Wal-Mart:
◦ Wal-Mart business model / strategy:
◦ “Always Low Prices. Always.”
◦ “Save money. Live better.”
Average hourly wage: $10.86
 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%
 Suggests that there is significant variability in HR
practices, etc. even within a particular strategic
category
Questions / Comments
35