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Chapter 1

Chapter 1 – The Strategic Role of Human Resources Management.docx

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Human Resources
MHR 523
Pat Sniderman

Chapter 1 The Strategic Role of Human Resources Management Human Resources Management - The management of people in organizations to drive successful organizational performance and achievement of the organizations strategic goals - Refers to the management of people in organizations - Involves formulating and implementing HRM systems (such as recruitment, performance appraisal, and compensation) that are aligned with the organizations strategy in order to ensure that the workforce has the competencies and behaviors that are required to achieve the organizations strategic objectives - Human Capital: the knowledge, education, training, skills, and expertise of an organizations workforce - Research studies over the past 15 to 20 years have confirmed that effective HR practices are related to better organizational performance - Example) Four seasons is popular for friendliness, customer-oriented, philosophy: creating a culture and work ethic based on the golden rule, which would give employees a framework within to which to pursue the creation of a superior international service culture Human Resource Management Responsibilities - Two Categories: o Operational (administrative): HR professionals hire and maintain employees and then mange employee separations, requires HR staff to be administrative experts and employee champions o Strategic: HR is focuses on ensuring that the organization is staffed with the most effective human capital to achieve its strategic goals, requires HR staff to be strategic partners and change agents Operational versus Strategic HR Operational Strategic Skills Concepts Administrative tasks Planning Reactive Proactive Collecting metrics/measurements Analyzing metrics/measurements Working to achieve goals and objectives Setting the goals and objectives Following the laws, policies, and procedures Interpreting, establishing, and revising the laws, policies, and procedures Employee focus Organizational focus Explaining benefits to employees Designing benefit plans that help the organization achieve its mission and goals Setting up training sessions for employees Assessing training needs for the entire organization Recruiting and selecting employees Workforce planning and building relationships with external resource Administering the salary/wage plan Creating a pay plan that maximizes employees productivity, morale, and retention Always doing things the same way Recognizing that there may be better ways of doing things; recognizing how changes affect the entire organization not just HR Works within the organizational culture Attempts to improve the organizational culture Operational Responsibilities - Analyzing jobs, planning future workforce requirements, selecting employees, orienting and training employees, managing compensation and reward plans, communicating with employees (counseling and disciplining) - Ensuring fair treatment, appraising performance, ensuring employee health and safety, managing labour relations and relationships with unions, handling complaints and grievances, ensuring compliance with legislation affecting the workplace - Outsourcing: The practice of contracting with outside vendors to handle specified functions on a permanent basis Strategic Responsibilities - Strategy: The companys plan for how it will balance its internal strengths and weaknesses with external opportunities and threats (SWOT) in order to maintain a competitive advantage - More HR professionals are now devoting their time to helping their organization achieve its strategic objectives - One of todays most critical strategic business challenge is an HR challenge building the leadership pipeline. - Role in formulating strategy o Organizations are viewing the HR dpmt as an equal partner in the strategic planning process o HR function contributes significantly to the overall success of a company o Environmental scanning: identifying and analyzing external opportunities and threats that may be crucial to the organizations success o HR professionals can add value to the strategy formulation by supplying info regarding the companys internal strengths and weaknesses, particularly as they relate to the organizations workforce - Role in executing strategy o Is an area where HR makes the biggest strategic contribution o Involved in downsizing and restructuring strategies through establishing training and retraining programs, arranging for outplacement services, instituting pay-for-performance plans, and helping to redesign jobs o HR specialists are expected to be change agents who lead the organization and its employees through organizational changeo The competitive strategy may involve differentiating the org from its competitors by offering superior customer service through workforce o HR professionals and line managers play important role in lowering labour costs, the single largest operating expense in many organizations o Intense global competition and the need for more responsiveness to environmental changes put a premium on employee engagement, the emotional and intellectual involvement of employees in their work Measuring the Value of HR: Metrics - Metrics: statistics used to measure activities and results - Traditional operational measures focused on the amount of activity and the costs of the HR function, todays measures need to reflect the quality of people and the effectiveness of HRM initiatives that build workforce capability - Balanced scorecard: a measurement system that translates an organizations strategy into a comprehensive set of performance measures o Includes financial measures that tell the results of actions already taken Environmental Influences on HRM External Environmental Influences - Economic Conditions o Affect supply and demand for products and services o Dramatic impact on the number and types of employees required as well as on an employers ability to pay wages and provide benefits o Productivity: the ratio of an organizations out
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