The Strategic Role of Human Resource Management
Human Resource Management (HRM) is the management of people in organizations to drive successful
organizational performance and achievement of the organization’s strategic goals. HR professionals must
manage the workforce by attracting, retaining, and engaging talent.
Human Capital is the knowledge, education, training, skills, and expertise of an organization’s workforce.
*Effective HR practices are related to better organizational performance.
Human Resource Management Responsibilities
Operational Responsibilities are where HR professionals hire and maintain employees and also
o Outsourcing is the practice of contracting with outside vendors to handle specified functions on
a permanent basis.
o These services include:
o analyzing jobs
o planning future workforce requirements
o selecting employees
o orienting and training employees
o managing compensation and reward plans
o communicating with employees (including counseling and disciplining)
Strategic Responsibilities is where HR professionals are focused on ensuring that the organization is
staffed with the most effective human capital to achieve its strategic goals.
o Strategy – 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
o increasingly, the HR department is being viewed as an equal partner in strategic planning
o HR specialists are expected to be change agents
o Role in Formulating Strategy
Environmental Scanning involves identifying and analyzing external opportunities and
threats that may be crucial to the organization’s success.
*Details regarding a successful incentive plan being used by a competitor, impending labour
shortages, and information about pending legislative changes are examples.
o Role in Executing Strategy
Strategy execution is typically the area where HR makes the biggest strategic
contribution (i.e. downsizing, flattening the hierarchy, redesigning jobs, etc.)
HR Professionals and line managers have a significant impact on employee turnover,
engagement and engagement so it is important that there is employee recognition,
developmental programs, and career-oriented performance appraisals.
o Measuring the Value of HR: Metrics
Need metrics to measure the effectiveness of HRM procedures by measuring results
Balanced Scorecard is a measurement system that translates an organization’s
strategy into a comprehensive set of performance measures.
Environmental Influences on HRM
Must monitor the environment on an ongoing basis, assess the impact of any changes, and be proactive in
responding to challenges.
External Environmental Influences
Economic Conditions: affect demand and supply for products and services and in turn has an effect on
the numbers and types of employees required as well as a company’s ability to pay for wages or benefits.
o Productivity – the ratio of an organization’s output (goods and services) to its inputs (people,
capital, energy, and materials)
o Must be able to produce more outputs with the same or lesser input levels as productivity rates
drop in Canada.
i. Employment Levels
ii.Productivity Levels iii.Growth of the service sector
o Primary sector – agriculture, fishing and trapping, forestry, and mining; represent 4% of jobs
o Secondary sector – manufacturing and construction; represent 19% of jobs
o Tertiary or service sector – public administrating, personal and business services, finance,
trade, public utilities, and transportation/communications; represents 77% of jobs
o Increasing workforce diversity by age, race, gender, sexual orientation, disabilities, generational
and demographic differences as