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Chapter 1

MHR 523 Chapter Notes - Chapter 1: Human Resource Management, Balanced Scorecard, Market Environment

Human Resources
Course Code
MHR 523
Margaret Yap

of 3
MHR523 – Chapter 1
Human Resource Management – The management of people in organizations through
formulating and implementing human resources management systems that are aligned with
organizational strategy in order to produce the workforce competencies and behaviours required
to achieve the organization's strategic goals
Human Captial – The knowledge, education, training, skills, and expertise of an organization's
Balanced Scorecard – A measurement system that translates an organization's strategy into a
comprehensive set of performance measures
Human Resource Management Responsibilities:
Operational Responsibilities – include:
Serving as in-house consultants to managers
Offering advice on HR-related matters
Formulating HR policies and procedures
Strategic Responsibilities: Strategy is the company's plan for how it will balance its internal
strengths and weaknesses with external opportunities and threats in order to maintain a
competitive advantage. 2 key levels:
1. Formulating Strategy:
Environmental scanning – Identifying and analyzing external opportunities and threats
that may be crucial to the organization's success
2. Executing Strategy:
Employee Engagement – The emotional and intellectual involvement of employees and
their work
Environmental Influences on Human Resource Management
Internal Environmental Influences:
1 - Organizational Culture – The core values, beliefs, and assumptions that are widely
shared by members of an organization. Serves a variety of purposes:
Communicating what the organization “believes in and “stands for”
Providing employees with a sense of direction and expected behaviour (norms)
Shaping employees' attitudes about themselves, the organization, and their roles
Creating a sense of identity, orderliness, and consistency
Fostering employee loyalty and commitment
2 - Organizational Climate – The prevailing atmosphere that exists in an organization and its
impact on employee
3 - Management Practices – Have changed considerably over the last decade with many
HRM implications:
Empowerment – Providing workers with the skills and authority to make decisions that
would traditionally be made by managers
Boundaryless Organization Structure – A structure in which relationships (typically joint
ventures) are formed with customers, suppliers, and/or competitors, to pool resources for
mutual benefit of encourage cooperation in an uncertain environment
External Environmental Influences:
Economic Conditions – Affect supply and demand for products which impact the number
and types of employees required, as well as employers' abilities to pay wages and benefits.
Productivity – The ratio of an organization's outputs to its inputs
Primary Sector – Agriculture, fishing and trapping, forestry, and mining
Secondary Sector – Manufacturing and Construction
Tertiary Sector – Public administration, business services, finance, trade, etc
Labour Market Issues
Labour Unions – Once unions are established, management has less power
Contingent Employees – Workers who do not have regular full-time or part-time
employment status
Demographics – The characteristics of the workforce, which include age, sex, marital status,
and educational level
Diversity – Any attribute that humans are likely to use to tell themselves that someone is
different from them and thus includes race, gender, age, values, and cultural norms
Baby Boomers – Individuals born between 1946 and 1965 - just beginning to retire
Sandwich Generation – Individuals with responsibility for rearing young dependants as
well as for assisting elderly relatives who are no longer capable of functioning totally
Generation X – Individuals born between 1966 and 1980 – replacing boomers, view
command-and-control management styles with disdain
Generation Y – Individuals born since 1980 – just beginning to enter the workforce,
masters of technology, impatient and action-oriented
Diverse Groups
Visible and Ethnic Minorities – Proportion expected to continue growing at a faster pace
than the rest of the population
Women – Employment rate for women has grown steadily, while it has gradually
decreased for men
Aboriginals – Population is young and growing fast but still facing considerable
difficulty in obtaining jobs and advancing in the workplace
Disabled People – Experience the highest rates of unemployment although there are
virtually no performance differences
Technology – Labour intensive blue-collar and clerical jobs have decreased while technical,
managerial, and professional jobs are on the increase.
Government – There are 14 jurisdictions in Canada: 10 provinces, 3 territories, and Canada
Each province and territory has its own human rights, employment standards, labour
relations, health and safety, and workers' compensation legislation
Much commonality as well as variation across different jurisdictions
Globalization – The tendency of firms to extend their sales or manufacturing to new markets
Has led to more MNCs, so HR departments have had to tailor policies to fit different
A Brief History of Human Resource Management
Scientific Management – The process of “scientifically” analyzing manufacturing processes,
reducing production costs, and compensating employees based on their performance levels
Human Relations Movement – A management philosophy based on the belief that the attitudes
and feelings of workers are importantand deserve more attention.
Human Resources Movement – A management philosophy focusing on concern for people and
productivity. Involved four evolutionary phases:
Phase 1 – In the early 1900s, HRM was basically nonexistent. Personnel administrators
were in charge of payroll, hiring, firing, and benefits
Phase 2 – As the scientific management movement gained momentum after the Great
Depression, efficiency increased but wage increases did not, leading to various pieces of
legislation being enacted
Phase 3 – As a result of legislation passed during the 60s, 70s, and 80s regarding health and
safety, wages, and employee rights, “human resource management came to be.
Phase 4 – The strategic phase, where organizations must leverage human capital in order to
compete. Employees are viewed as firms' best competitive advantage.