Chapter 1 The Strategic Role of Human Resources Management
Human Resource Management (HRM) -Refers to 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 organizations strategic goals.
HR Professionals job is to ensure:
o The company hires the best individuals available
o Develop and nurtures their talents
o Create a sustaining productive work environment
o Monitor and build the human assets
o They have the primary responsibility for managing the workforce that drives organizational performance
Human Capital - The knowledge, education, training, skills, and expertise of an organizations workforce.
Human Capital Index:
30 measures that are summarized down into these 5:
1. Recruiting excellence
2. Clear rewards and accountability
3. Collegial and flexible workplaces
4. Communications integrity
5. Prude use of resources (lowering costs)
Measuring the impact of HRM
The HR function must account for the return on resources invested in human capital. HR Professionals should be able to
measure the value and impact of their organization human capital and HRM practices.
Traditionally it focused on the size and cost of the HR function (such as absenteeism rates, cost per hire etc.) now its about
the quality of people and effectiveness of HRM initiatives that build workforce capability. These new practices are related
better to organizational performance.
Balance Scorecards a measurement system that translates an organizations strategy into a comprehensive set of
Their activities fall into 2 categories.
Operational/Adminstrative: HR professionals hire and maintain employees and the manage employee separation.
Strategy the companys plan for how it will balance its internal strengths and weakness with external opportunities and
threats in order to maintain a competitive advantage.
Operational (Admin Work)- follow policies Strategic make policies
Hiring and maintaining employees Ensuring staff has the most effective human
capital to achieve strategic goals
Managing employee separations Requires HR staff to be change agent
Consulting/ Offering advice Strategy formulation: environmental scanning
Formulating policies and procedures Strategy execution: leading change
All operational work MAY be outsourced if the
company chooses. This way they can focus more
on strategic activities.
Environmental Scanning identifying and analyzing external opportunities and threats that may be crucial to the
Strategy Execution is typically the area where HR makes the biggest strategic contribution.Hr specialists are expected to be
change agents who lead the organization and its employees to organizational change. Leading change, customer service,
lower labour costs, building employee engagement (emotional and intellectual) Example: downsizing, training programs,
instituting pay-for-performance programs.
Page 1 of 53 ENVIRONMENTAL INFLUENCES ON HRM
Internal Environmental Influences
Internal influences has a major impact on HRM and its ability to meet its objectives in three areas:
o It consists of core values, beliefs and assumptions that are widely shared by members of an organization.
o Culture serves a variety of purposes:
What the company believes in and stands for
Setting the norms a sense of direction and expected behaviour
Shapes attitudes about ones self, the organization and ones roles
Creates identity, order and consistency
Fosters employee loyalty and commitment
o All managers with HR duties plan an important role in creating and maintaining the type of organizational
culture that is desired for everyone.
o Refers to the prevailing atmosphere that exists in an organization and its impact on employees.
o Are the people nice? Is it laid back or a hurry-up feeling.
o Major influences come from
Managements leadership style
HR policies and practices
Style of organizational communication
o Current Climates are reflected by
Levels of employee motivation
o Provides workers with skills and authority to make decisions that would normally be made by managers.
o This is done by have flatter organizational forms using cross-functional teams
o This makes employee empowerment more common.
Boundaryless Organizations are emerging
Typically in joint ventures, relationships are formed with customers, suppliers, and/or competitors, to pool
resources for mutual benefit or encourage co-operation in an uncertain environment.
EXTERNAL ENVIRONMENTAL INFLUENCES
Unemployement levels Supply and demand levels affect the # and type of employees required for hire, as well as
the employers ability to pay wages and benefits.
Productivity refers to the ratio of an organizations outputs (goods and services) to its inputs (people, capital,
energy and materials)
o To improve productivity, managers must find a ways to produce more outputs with current input levels or
to use fewer resources to produce current output levels.
o In successful organizations today, productivity improvement is essential for long term success.
Growth service sector
o Primary sector(agriculture, fishing, trapping/forestry etc.) is 4% of all jobs.
o Secondary sector(manufacturing/construction) has decreased to 20% of all jobs
o Tertiary/Service sector(admin, personal/business services, finance, trade, etc.) has grown to represent 76%
of all jobs.
Page 2 of 53 Workforce isssues
Labour Union Movement
o Causes management to have less power to implement HR policies especially when dealing with unionized
o Unions influence HR policies to make sure that their employees who are not part of the union receive equal
or better conditions than those being negotiated by unions. Because if they dont then those employees will
end up joining the union.
Use of Contingent Employees
o They are employees who do not have full-time/part-time employment status.
o Often poorly paid, no job security, people are trying to change the laws so that contingent workers get the
same legal protection as other workers.
Demographic Trends and Increasing Workforce Diversity
Diversity refers to any attribute that humans are likely to use to tell themselves, that person is different from me,
and thus includes race, gender, age, values, and cultural norms.
o The single most important factor governing the size and composition of the labour force is population
Population Growth (Impact of immigration)
o It is virtually zero in Canada.
o Huge competition internationally for people with skills
Generation X (Generation Y)
Education Level (Differences in literacy levels)
Increasing workforce diversity: visible and ethnic minorities, women, aboriginal peoples, person with disability
These are all included under diversity, but listing notes for each category would not benefit your studying habits, because
most of this information is all self explanatory. If you want to take a look, its all on page 12.
See what I mean:
o Baby boomers (1946-1965)
Beginning to retire. Seniors will increase from 13% to 25% of the popn by 2031.
Children and Seniors per 100 people = 61: 100
o Sandwich Generation
Stuck raising their own kids and caring for their elderly parents
Employers being flexible with work hours because of this.
Also add in eldercare benefits
o Generation X (1966-1980)
This group views command and control management styles with disdain and belives that security comes from
skills rather than company loyalty.
Gen Xers are economically conservative and dont trust institutions.
They provide companies with out of the box thinking.
o Generation Y (1980- Present)
Baby boomers kids. They are now beginning to enter the workforce.
Good with technology, authority and diversity.
However they are impatient and action-oriented.
Increase in technical/ professional jobs
Decrease in traditional blue collar jobs
Labour force training has not kept pace with changing technological demands
Union concern about job displacement and health hazards, because of the dangers of some jobs and robotic