Chapter 1 – The Challenges of HRM
The legal framework of employment and the various HR practices will be relevant no
matter what is occurring in the economy.
Human resources management (HRM) is the integrated set of processes, programs,
and systems in an organization that focuses on the effective deployment and development
of its employees.
The word “employee” includes contract workers, people from other organizations who
are working a project, or another similar working relationship.
The term “human resources” implies that people are as important to the success of a
business as resources like money, materials, machinery, and information.
It is imperative that managers ensure they manage their human resources in the most
productive, efficient, and effective way possible.
HRM Processes and Activities
1. Organizational, work, and job design – determining what tasks need to be done, in
what order, with what skills, and how individual tasks fit together in work units.
2. Planning – right people, right skills, right time, right place.
e.g. plan when to add more staff
3. Recruitment and selection – sourcing, attracting, and hiring the people with the
necessary skills and background.
e.g. find and hire people who can best represent the company and do the work
4. Training and development – assist employees in developing the necessary knowledge
and skills to do their job today and in the future.
e.g. spending time coaching and helping employees develop to their full potential
5. Performance management – provide feedback to employees on a regular basis.
6. Compensation (pay and benefits) – pay and benefits programs that will attract and
7. Occupational health and safety – ensuring that the safety and health of employees are
8. Employee and labour relations – ensuring that there are positive and constructive
relations between the employees and their managers and/or union representatives.
e.g. recognize individual differences in employees and adjust management style
Emerging HR Areas
1. Organizational development and learning (extension of training and development)
2. High-performance work groups or teams (extension of job design)
3. Flexible work arrangements (ways to engage employees and address demographic
4. HRIS – human resource information systems.
Page 1 of 7 Current Business Challenges Human Resources Management
Global economy HRIS
Survival of firms and business sectors Organizational, work, and job design
Technology and quality Planning
Environment and climate change Recruitment
Developing human capital and talent Selection
management Training and development
Demographic and employee concerns
Compensation (wages and benefits)
Health and safety
Role of the Line Manager
The line manager is the key link between the employee and the organization.
Must have a thorough knowledge and understanding of contemporary HRM and
how it affects the output of an organization.
Directly interacts with the employees and is responsible for their effective
contribution to the organization.
Directly responsible for the product or service.
Managers and employees are ultimately responsible for making the organization
Direct managers are more trusted by employees over other managers and have a huge
influence on why employees stay with the organization.
e.g. The company wants to place an increased emphasis on the growth and development
of its employees. The line manager is front-and-centre in identifying gaps in skill sets,
and then the HR practitioner offers ways of bridging the gap.
HR professionals are staff who help and support the line manager. They have partial
functional/legitimate authority in HR areas to recognize employees.
Role of the HR Professional
HR professionals’ primary role is to help equip the line manager with the best people
practices so that the organization can be successful.
Know how to recruit and pay people appropriately.
Need sound business knowledge, good problem-solving and influence skills, and
Provide service activities, such as recruiting and training.
Active in policy formulation and implementation in areas like workplace
harassment, healthy work environments, and change management.
Advocate employees by listening to their concerns and ensuring the organization
is aware of and responding to these concerns.
Page 2 of 7 Actively involve others in the organization, particularly managers, in the
development and design of HR programs.
e.g. The company wants the HR professional to develop an overall recruitment approach
to attract individuals with key skill sets. This would then generate a pool of applicants
with the required skills, which the line manager selects from.
Must focus on delivering value to the organization’s stakeholders – the line managers,
employees, and investors.
Must be able to integrate business skills, HR skills, and skills in helping employees
handle change in order to build and maintain a competitive advantage through its people.
The Ongoing Partnership
Every manager’s job is managing people.
The key is to find ways to develop and utilize the talents of employees so that they reach
their greatest potential.
If there is a HR unit:
HR professionals provide guidance and assistance as internal consultants to the
line manager or to help design and deliver programs and services to better equip
employees, supervisors, and managers to contribute to organizational success.
HR processionals have a critical role to play in facilitating the success of
managers by leveraging best practices across the organization.
HR managers assume a greater role in top-management planning and decision
Current Business Challenges
1. Global economy
2. Survival of firms and business sectors
3. Technology and quality
4. Responses to environment and climate change
5. Developing human capital and talent management
6. Demographic and employee concerns
Challenge 1: Global Economy
Canadian economy primarily built on exports, valued at over $450 billion and accounting
for 40% of Canada’s GDP.
Example of Canadian company in global marketplace: Nortel Networks. It went into
bankruptcy in February 2009 due to years of mismanagement which allowed competition
to become more prominent.
Globalization: Moving local or regional business into global marketplace. (i.e.
partnering with global firms and using IT to coordinate distant parts of business)
Globalization creates pressures for managers to effectively manage people.
Page 3 of 7 Issues:
a) Identifying capable managers overseas
b) Designing training programs and development opportunities to enhance
understanding of foreign cultures and work practices
c) Adjusting compensation plans to ensure pay schemes are fair and equitable in
different regions with different costs of living
Challenge 2: Survival of Firms and Business Sectors
During the current recession, the U.S. banking system had trouble accessing funds and
therefore companies had trouble borrowing money to keep operations going.
Without sufficient cash flow, coupled with declining sales and revenue, many companies
are in survival mode. (e.g. oil, gas, mining, manufacturing industries)
Companies are pressured to lower costs and improve productivity to maximize efficiency.
Downsizing: The planned elimination of jobs.
It’s important to have a well-designed downsizing approach since it takes 6-18 months to
realize the savings from job cuts.
Examples: voluntarily work less with reduced pay, laying off everyone for a very short
period of time, job sharing, extended vacation without pay.
Attempting to minimize the impact on individuals while dealing with financial realities is
in the longer term best interests of everyone.
Outsourcing: Contracting work outside the organization that was formerly done by
internal employees. Saves money, time, and resources. (e.g. accounting, payroll)
Also increases organization’s flexibility and lowers overhead costs.
Employee leasing: Employees are let go and then hired by a leasing company that