Chapter 1: HRM Challenges and the Legal Context
What is human resource management?
Human resource management (HRM): An integrated set of processes, programs, and systems in an organization
that focuses on the effective deployment and development of its employees.
Human resource: Implies that people are as important to the success of the business as any other.
Employees: Covers contract workers, people from other organizations who are working on a project, or any
other similar working relationship.
What are the HRM processes and activities?
o Organizational, work, and job design: Determining what tasks need to be done in what order, with
what skill, and how individual tasks fit together in work units.
o Planning: Ensuring that people in the organization are the right people at the right time and place.
o Recruitment and selection: Sourcing, attracting, and hiring the people with the necessary skills.
o Training and development: Providing the resources to assist in developing the necessary knowledge
and skills in their job today and in the future.
o Performance management: Ensuring that there are appropriate mechanisms in place to provide
feedback to employees on a regular basis.
o Compensation (pay and benefit): Developing and administering pay and benefits programs that will
attract and retain employees.
o Occupational health and safety: Ensuring that the safety and health of employees are maintained.
o Employee and labour relations: Ensuring that there are positive and constructive relationships between
employees and their supervisors / managers / union representatives.
o Organizational development and learning (extension of training and development)
o High performance work groups or teams (extension of job design)
o Flexible work arrangements
o Human resource information and management systems (HRIS)
Why Study Human Resources Management?
To work with people, it is important to understand human behaviour and the various systems and practices
available to effectively make use of and to build a skilled and maintained workforce.
The line manager, as the key link between the employees and the organization, must be aware of economic,
technological, social, and legal issues that either help or hinder the employees’ ability to achieve success.
The employees and the public at large are demanding greater social responsibility from the employers, and
ignorance of these complaints will show in the company’s success. What is the Relationship between Line Managers and HR Professionals?
o Directly interact with the employees and is responsible for their effective contribution to the firm.
o Trusted the most by employees, and have a huge influence on the reasons employees stay with the firm.
o Must be front-and-center in identifying the gaps in skillsets
o Direct responsibility over a product or service.
o Primary role is to help equip the line manager with the best people practices for the success of the firm.
o Can offer service activities, such as recruiting and training, policy formulating and implementation.
o Can be employee advocate by listening to employee concerns and ensuring they are known.
o Require good business knowledge and problem solving and influence skills and personal credibility
o Integrate business skills, HR skills and skills in helping employees handle change so that their
organization can build and maintain a competitive advantage.
o Companies must find ways to develop and utilize the talents of employees so that they can reach their
greatest potential in terms of success for the company.
o Successful organizations equip their line managers with a good understanding of HRM by using an HR
professional unit or retaining expertise.
o Frequently, an organization with about 100 employees decides to have professional HR assistance.
o Even without an HR professional, the line manager is responsible for effective HRM.
What are the Current Business Challenges?
As we move forward in a global environment, business challenges change significantly from a few years ago.
o Canadian economy is primary built on exports (of natural resources). In 2008, Canadian exports were
valued at 450 billion dollars (40% of Canada’s GDP). However, Canada has been suffering in the
global market, and the economy shrank 3.4% by the end of 2008.
o Due to globalization, 70-80% of our economy is affected by international competition. To remain
competitive, companies must manage HR in the most productive and effective way possible.
o When managers decide on globalization, they must balance a complicated set of issues such as:
different geographies, cultures, laws and practices.
Survival of firms and business sectors:
o 75% of Canada’s GDP is exported to the US, and because of this, many firms were affected by the
Spike in prices of natural resources
Downfall of prices of company stocks
Lack of sufficient cash flow & mismanagement in American banks
Downfall in sales in the manufacturing sector o Companies have always had pressure to lower costs, and labour costs are the largest in most companies.
Approaches to lowering labour costs include:
Downsizing: Planned elimination of jobs
Often takes 6 – 18 months for a company to realize savings from downsizing
Some companies promote shorter work weeks, job-sharing, vacation without pay
Leadership must be respectful and communicative to make sure that the remaining
feel the wish to bring success to the company.
Outsourcing: Hiring outside the company or bringing in a company to perform tasks that
could be done internally. May be done to increase flexibility and decrease overhead costs.
Employee leasing: Employees are let go, then hired by a leasing company that contracts back
with the original company.
Technology and quality
o Advances in technology have improved process and quality, and reduce costs.
o The changing web-based technology is changing the qualifications needed including:
Creativity & Continuous improvement skills
Risk-taking ideas necessary for being entrepreneurial
Relationship building skills
o Human resources information system (HRIS):
A technology system that provides data for purposes of control and decision making
Includes broader applications such as producing reports, forecasting HR needs, assisting
strategic planning and career and promotion planning, and evaluating HR policies that are
useful for line managers and HR professionals to make the best decisions.
IT impacts HRM with:
o Automating and routine activities
o Alleviating administrate burden