Human Resource Management and Labour Relations (H600) ________________________ Agata Mirowska DeGroote School of Business McMaster University

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Human Resource Management and Labour Relations
(H600) ________________________Agata
MirowskaDeGroote 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
• Im 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 organizations 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
Employee Objectives
Societal Objectives
human rights
legal compliance
long-term career goals
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The HRM Professional
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

• 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 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
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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 organizations
  competitive advantage
• HR activities add to an organizations
  expenses/costs but not to revenue generation

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Common Misconceptions about HR
HR people arent 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.
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Overcoming these Misconceptions

• HR can and indeed should play a key role in
  an organizations 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
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Aligning HR and Organizational Strategy

• Use Porters 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, RD,
  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
• RD
• 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 (Sams Club,
  Wal-Marts warehouse retail stores)
• Both use Cost leadership strategies, but have
  different values and emphases
• See August 2006 issue of Academy of Management
  Perspectives

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Facts about Wal-Marts Sams 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

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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, dont advertise
• Average hourly wage 17
• Substantial benefits
• Permits unions

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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?