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Human Resource Management and Labour Relations (H600)

________________________Agata Mirowska

DeGroote School of BusinessMcMaster 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

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Week Overview / Objectives

• Course introduction, requirements

• Introduction to HRM (definitions)

• Challenges facing Canadian organizations– Exercise – Discussion re: challenges

• Strategic HRM

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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

HumanHumanResourceResource

ManagementManagement

OrganizationalOrganizationalObjectivesObjectives

EmployeeEmployeeObjectivesObjectives

SocietalSocietalObjectivesObjectives

Objectives of HRM

to contribute to organizational effectiveness

legal compliance

human rights

long-term career goals

The HRM Professional

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Major competencies

Yeung, Brockbank, Ulrich (1994)

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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. Economic

2. Technological

3. Demographic

4. Cultural

5. 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 workers

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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

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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, and compensating employees (etc.)?

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

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Strategic HRM

•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”

Common Misconceptions about HR

Keith. H. Hammonds, “Why We Hate HR”, August 2005, FAST COMPANY.

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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.

Steps 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

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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

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%

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Questions / Comments?