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Chapter 1

BU354 Chapter Notes - Chapter 1: Pension, Absenteeism, Flattening

Course Code
Steve Risavy

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Chapter 1: The Strategic Role of Human Resources
Introduction to HRM
Human Resources Management (HRM)
Managing people in organizations to produce the workforce competencies
and behaviours required to achieve the operations strategic goals
Managing human capital: knowledge, education, training, skills, expertise
Responsible for ensuring the organization attracts, retains and engages the
diverse talent required to meet operational and performance commitments
made to customers and shareholders
It involves formulating and implementing HRM systems that are aligned with
the organization’s strategy in order to produce a workforce with the
competencies and behaviours that are required to achieve the organizations
strategic objective s
Evidence of strong relationship between recruiting efficiency and
organizational performance
oCompanies that fill vacancies faster reduce the disruption and lost
productivity associated with turnover
HRM problem currently in Canada is that three out of every ten senior
executive positions have no identified potential successors
Measuring the Value of HRM
Effective HR practices are related to better organizational performance
Measures need to reflect the quality of people and the effectiveness of HRM
initiatives that build workforce capability
oThey also provide critical information that can be linked to
organizational outcome
Bottom line is that effective human capital practices drive business outcomes
more than business outcomes lead to good HR practices
Balanced scorecard measurement system translates organizational strategy into
a comprehensive set of performance measures – this scorecard shows turnovers
and successes among the employees
Balances long-term and short-term actions and balances measure of success
relating to financial results, customers, internal business processes and
human capital management
Human Capital Index based on:
Recruiting excellence
Clear rewards and accountability
Collegial and flexible workplaces
Communications integrity
Prudent use of resources
HRM Responsibilities: Operational/Administrative
Objective: HR professionals hire and maintain employees and then manage
employee separation
(responsibilities may be outsourced)
oOutsourcing involves contracting with outside vendors to handle specified
business functions on a permanent basis
serving as administrative experts and employee champions
managing human capital lifecycle (selection, assimilation, development)
oselection and assimilation into the organization, development and
capabilities while working in the organization and transition out of the
consulting and offering advice
formulating policies and procedures and providing services
these can all be achieved by separating people into an HR group that can
solely focus on these issues
HRM Responsibilities: Strategic
Objective: HR is focused on ensuring that the organization is staffed with the
most effective human capital to achieve its strategic goals
serving as strategic partners and change agents
oinvolves developing 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
Role in formulating strategy
oenvironmental scanning – which involves identifying and analyzing
external opportunities and threats that may be crucial to the
organization’s success
oalso supplies information regarding the company’s internal strengths and
Role in strategy execution
oThis is the area where HR makes the biggest strategic contribution
oHR specialists are expected to be change agents who lead the
organization and its employees through organizational change
Making the enterprise more responsive to product/service
Flattening the pyramid, empowering employees and organizing
around teams – all help respond quickly to customers needs and
competitors challenges
oleading change, customer service, lowering labour costs, building
employee engagement (emotional and intellectual involvement of
employees in their work)
ostrategy has to be specific to that country
olower labour costs by introducing strategy to reduce turnover,
absenteeism and the rate of incidence of occupational illnesses and
oemployee engagement is the emotional and intellectual involvement of
employees in their work they drive desired organizational outcomes,
they go beyond what is required, understand and share the values and
the goals of the organization, enjoy collegial relationships, have
opportunities for growth, trust their leaders and regard the success of
the organization as their success
-operational focuses more on following policies where as strategic is more on
making policies
-strategic involves knowing how to maximize individual success to make the
organization successful
Internal Environmental Influences
Organizational Culture
ocore values, beliefs and assumptions
oshared by members of an organization
oculture is often conveyed through an organization’s mission statement,
as well as through stories, myths, symbols and ceremonies
ohaving a positive culture earns critical acclaim and has a positive
impact on recruitment, retention and productivity
oit also communicates what the organization “stands for”, provides
employees with a sense of direction, shapes employee attitudes about
themselves/organization/their roles, creates a sense of
identity/orderliness/consistency, and fosters employee loyalty and
Organizational Climate (explains how misbehavior can escalate)
oRefers to the prevailing atmosphere or “internal weather”
oits impact on employees
omajor factors influencing the climate are managements leadership
style, HR policies and practices, and amount and style of
organizational communication
othe type of power that exists is generally reflected in the level of
employee motivation, job satisfaction, performance and productivity