Part 1 Nature of Human Resource Management Chapter

Part 1: Nature of Human Resource Management Chapter 1: Changing Nature of Human Resource Management Prepared by Linda Eligh, University of Western Ontario Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 1– 1

Learning Objectives After you have read this chapter, you should be able to: 1. Define HR management and identify the seven categories of HR activities. 2. Discuss management of human capital in organizations. 3. Discuss four challenges facing HR today. 4. Describe how the major roles of HR management are being transformed. 5. Identify the purposes and uses of HR technology. 6. Discuss why ethical issues affect HR management. 7. Explain the key competencies needed by HR professionals and why certification is important. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 2

Nature of Human Resource Management • Human Resource (HR) Management Ø The policies, practices and systems that influence employees’ behaviour, attitude and performance in the attainment of organizational goals. • Who is an HR Manager? Ø In the course of carrying out their duties, every operating manager is, in essence, an HR manager. Ø HR specialists design processes and systems that operating managers help implement. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 3

HR Management Activities Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Fig. 1 -1 4

Nature of Human Resource Management HR Activities: ØGlobal forces and HR Management ØStrategic HR Management ØEqual Employment Opportunity ØStaffing Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 5

Nature of Human Resource Management HR Activities (cont’d): ØHR Development ØCompensation and Benefits ØHealth, Safety, and Security ØEmployee and Labour Relations Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 6

Nature of Human Resource Management Smaller Organizations and HR Management Shortage of Qualified Workers Increasing Costs (Benefits) Increasing Competition Issues of Greatest Concern Increased Wage Pressures Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Legislative Changes 7

Typical Division of HR Responsibilities: Training Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Fig. 1 -2 8

Management of Human Capital in Organizations • Human Capital Ø The collective value of the capabilities, knowledge, skills, life experiences, and motivation of an organizational workforce. v Also known as intellectual capital. v How to measure the strategic value of human assets? • Human Resources as Core Competency Ø A unique capability that creates high value and differentiates an organization from its competition. v HR competencies: a source of competitive advantage. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 9

HR Management Challenges Most prevalent challenges facing HR management: 1. Globalization of Business 2. Economic and Technological Changes 3. Labour 4. Workforce Demographics and Diversity 5. Organizational Cost Pressures and Restructuring Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 10

HR Management Challenges 1. Globalization of Business Ø Outsourcing and offshoring Ø Global security and terrorism 2. Economic and Technological Changes Ø Occupational shifts from manufacturing and agriculture to service and telecommunications. Job growth primarily in IT and healthcare Ø Workforce availability and quality concerns v v Inadequate supply of workers with soft skills needed for “knowledge jobs” Significant shortage across Canada of tradespeople Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 11

HR Management Challenges 3. Labour Ø Employee retention Ø Growth of contingent workforce v Increases in temporary workers, independent contractors, leased employees, and part timers caused by need for flexibility in staffing, more difficulties in firing regular employees, and reduced legal liability for contractors. Ø Technological shifts and the Internet v Growth of information technology creating more “virtual” employees and other challenges Ø Employability Skills Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 12

HR Management Challenges 4. Workforce Demographics and Diversity Ø Multiculturalism Ø Visible minorities and diversity v 20% of workforce born outside Canada with growing presence of visible minorities Ø More women in the workforce v Single-parent households, dual career couples, domestic partners, working mothers and family/childcare Ø Aging workers v v Significant numbers of experienced employees are retiring, changing to part time etc. Age discrimination Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 13

HR Management Challenges 5. Organizational Cost Pressures, Restructuring Ø Mergers and Acquisitions Ø “Right-sizing”—eliminating layers of management, closing facilities, merging with other organizations, and outplacing workers v v Intended results are flatter organizations, increases in productivity, quality, service and lower costs. Costs are “survivor mentality”, loss of employee loyalty, and turnover of valuable employees. Ø HR managers must work toward ensuring cultural compatibility in mergers. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 14

HR Management Roles • Administrative Role Ø Clerical and administrative support operations (e. g. , payroll and benefits work) v Technology is transforming how HR services are delivered. v Outsourcing HR services to reduce HR staffing costs • Operational and Employee Advocate Role Ø “Champion” for employee concerns v Employee crisis management v Responding to employee complaints Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 15

Changing Roles of HR Management Fig. 1 -4 Note: Example percentages are based on various surveys. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 16

HR Management Roles • Strategic Role Ø “Contributing at the Table” to organizational results Ø HR becomes a strategic business partner by: v Focusing on developing HR programs that enhance organizational performance. v Involving HR in strategic planning at the onset. v Participating in decision making on mergers, acquisitions, and downsizing. v Redesigning organizations and work processes v Accounting and documenting the financial results of HR activities. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 17

Operational to Strategic Transformation of HR Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Fig. 1 -5 18

HR Management Roles • Collaborative HR Ø The process of HR professionals from several different organizations working jointly to address shared business problems. v Firms benefit from the expertise of other firms, without having the time and expense of developing some of their own HR practices. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 19

HR Technology • Human Resource Management System (HRMS) Ø An integrated system providing information used by HR management, in conjunction with other managers, in decision making. Ø Purposes (Benefits) of HRMS v Administrative and operational efficiency in compiling HR data v Availability of data for effective HR strategic planning Ø Uses of HRMS v Automation of payroll and benefit activities v EEO/affirmative action tracking v HR Workflow: increased access to HR information – Employee self-service reduces HR costs. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 20

Figure Web 1 -6: Based Web. Systems Based Systems Fig. 1 -6 Ø Bulletin boards v What information will be available and what is information needed? Ø Data access v To what uses will the information be put? Ø Employee self-service v Who will be allowed to access to what information? v Web-based services and access Ø Extended linkage v When, where, and how often will the information be needed? Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 21

Ethics and HR Management Firms with High Ethical Standards Ø Are more likely to reach strategic goals. Ø Are viewed more positively by stakeholders Ø Are better able to attract and retain human resources. • Ethics and Global Differences Ø Different legal, political, and cultural factors in other countries can lead to ethical conflicts for global managers. Ø Corruption of Foreign Public Officials Act v Prohibits Canadian firms from engaging in bribery and other practices in foreign countries. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 22

Ethics and HR Management HR’s Role in Organizational Ethics: HR management plays a key role as the “keeper and voice” of organizational ethics. • What is Ethical Behaviour? Ø What “ought” to be done. Ø Dimensions of decisions about ethical issues in management: v Extended consequences v Multiple alternatives v Mixed outcomes v Uncertain consequences v Personal effects Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 23

CCHRA CHRP National Code of Ethics Fig. 1 -7 . 1. Preamble 2. Competence CCHRA/CHRP 3. Legal Requirements 4. Dignity in the workplace 5. Balancing Interests 6. Confidentiality 7. Conflict of Interest 8. Professional Growth and Support of Other Professionals 9. Enforcement Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 24

Ethics and HR Management HR’s Role in Organizational Ethics: • Responses to Ethical Situations ØAre guided by values and personal behaviour “codes” that include: v. Does response meet all applicable laws, regulations, and government codes? v. Does response comply with all organizational standards of ethical behaviour? v. Does response pass the test of professional standards for ethical behaviour? Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 25

Examples of Ethical Misconduct in HR Activities Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Fig. 1 -8 26

Ethics and HR Management Ethical Behaviour and Organizational Culture: • Organizational Culture Ø The shared values and beliefs in an organization Ø Common forms of unethical conduct: v v v Lying to supervisors Employee drug use or alcohol abuse Falsification of records • Fostering Ethical Behaviour Ø Ø A written code of ethics and standards of conduct Training on ethical behaviour for all employees A means for employees to obtain ethical advice Confidential reporting systems for ethical misconduct Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 27

HR Management Competencies and Careers • Important HR Competencies ØStrategic contribution to organizational success ØBusiness knowledge of the organization and its strategies ØEffective and efficient delivery of HR services ØFamiliarity with HRMS technology ØPersonal credibility Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 28

Human Resources Professional Capabilities Profile Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Fig. 1 -9 29

HR Management Competencies and Careers HR Management as a Career Field • HR Generalist Ø A person with responsibility for performing a variety of HR activities. • HR Specialist Ø A person with in-depth knowledge and expertise in a limited area of HR. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 30

Expected Earnings by Age for an HR Manager Copyright © 2008 by Nelson, a division of Thomson Canada Limited. Fig. 1 -10 31

HR Management Competencies and Careers HR Professionalism and Certification • Professional Involvement and Development Ø Involvement by HR Professionals in professional associations and organizations has become important because of the broad range of issues they face. Ø Examples include: v v Human Resources Professionals Association of Ontario (HRPAO) Canadian Public Personnel Management Association (CPPMA) Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 32

HR Management Competencies and Careers • CHRP Designation Ø Administered by the Canadian Council of Human Resource Associations (CCHRA) in partnership with provincial Human Resources associations. Ø Eligibility requirements vary by provincial associations, but the National Knowledge Exam (NKE) and Professional Practice Exam (PPE) is the same for everyone. Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 33