Human Resource Management and Labour Relations (H600) ________________________ Agata Mirowska DeGroote School of Busine

1. Human Resource Management and Labour Relations (H600) ________________________Agata MirowskaDeGroote School of BusinessMcMaster University

2. Announcements • For section changes, go to the Academic Programs Office (1st floor of DSB) • See text website: • www.mcgrawhill.ca/college/schwind • check preface of text • Includes: • Multiple choice quizzes for each chapter • List of relevant HR webpages • E.g., HRPAO, HRDC, Ontario Ministry of Labour, etc • I’m working on getting the course up on ELM

3. Week Overview / Objectives • Course introduction, requirements • Introduction to HRM (definitions) • Challenges facing Canadian organizations • Exercise – Discussion re: challenges • Strategic HRM

4. What is HRM? • HRM – functional definition • “Is a set of interrelated functions and processes whose goal is to attract, socialize, motivate, maintain, and retain an organization’s employees” (Belcourt et al., 2002) • HRM – goal-based definition • “aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives” (Schwind et al., 2007) • HRM serves 3 primary constituencies: • The organization • Society • Individual employees • HRM is not an end in itself

5. Objectives of HRM Organizational Objectives to contribute to organizational effectiveness Human Resource Management Societal Objectives Employee Objectives human rights legal compliance long-term career goals

6. The HRM Professional Major competencies Yeung, Brockbank, Ulrich (1994)

7. The HRM Professional • CHRP • Certified Human Resources Professional designation • Requirements • Academic – coursework, etc. • Comprehensive exam • Recertification every 3 years • See www.hrpao.org

8. Challenges facing Canadian Organizations • Economic • Technological • Demographic • Cultural • Legal

9. Economic Challenges • Related challenges: • Recessionary Cycles • Global trade – international trade and competition with other markets • Need for productivity Improvement • More output with equal (or less) input • HR Implications • Need to contribute to international competence of workers (via training, etc.) • Potential workforce reductions – can result in job insecurity and negative effects on workers

10. Technological Challenges • Technology affects how work gets done • Computerization – increased flexibility • Automation – some hazardous/repetitive jobs being automated • HR Implications • Workers need to possess competencies related to technology • Job losses (layoffs, etc.) due to technology • Changes in how HR activities get done • E.g., internet recruiting

11. Demographic Challenges • Increasing # of women in the workforce • Account for 70% of the employment growth in Canada over last 20 years • Implications: Employment equity, child care, flexible work, etc. • Change in the types of work • Shift toward “knowledge” workers • Implications: different skill and training needs

12. Demographic Challenges • Educational attainment of workers • Higher education levels coupled with high illiteracy rates • Implications: productivity, safety • Aging workforce • Growing % of workforce is in higher age categories • Implications: retirement, job design, re-training, benefits, work schedules, etc. • More part-time, contract/contingent workers • Accounts for about 15% of all employment • Implications: more flexibility for organizations but raises issues of pay inequity, reduced employee loyalty

13. Cultural (Values) Challenges Text refers to 3 examples: • Attitudes toward work • Different expectations re: work and leisure • People want more flexibility, holiday time, etc. • Ethnic diversity (CI/CQ) • Immigration from numerous countries • Potential for conflicts of values, etc. but also opportunity to learn, expand • Attitudes toward government • Negative attitudes toward those in power – effects employment relationships

14. Legal Challenges • Numerous laws influence organizational (and HR) activities • Employment equity • Human rights laws • Charter of rights and freedoms • Safety legislation • Minimum Wage Acts

15. Exercise: Group Discussion • Choose two of the challenges facing HR managers (pp. 6-23 of text): • Economic • Demographic • Technological • Cultural • Exercise: What are the HR implications of those challenges? • Specifically, how do the challenges affect attracting, selecting, training, managing, and compensating employees (etc.)?

16. Challenges illustrate the need for a strategic approach to managing organizations…

17. Strategic HRM

18. Common Misconceptions about HR • HR is primarily an administrative function • HR has little strategic importance and does not represent a potential source of an organization’s competitive advantage • HR activities add to an organization’s expenses/costs but not to revenue generation

19. Common Misconceptions about HR “HR people aren’t the sharpest tacks in the box” “HR pursues efficiency in lieu of value” “HR is not working for you” “The corner office does not get HR” Keith. H. Hammonds, “Why We Hate HR”, August 2005, FAST COMPANY.

20. Overcoming these Misconceptions • HR can – and indeed should – play a key role in an organization’s strategy • There is increasing evidence that HR activities are associated with various indicators of organizational performance (e.g., ROI, profitability, stock prices) • $ put toward HR systems and activities should be viewed as investment rather than simply cost

21. What is Strategic HRM? • Strategic HRM • Integration of HRM systems to the overall mission, strategy, and success of the firm, while meeting the needs of employees and other stakeholders • The intentional use of HR systems to help an organization gain competitive advantage

22. Guiding Logic of SHRM • “HRM practices must develop employees’ skills, knowledge, and motivation such that employees behave in ways that are instrumental to the implementation of a particular strategy” (Bowen & Ostroff, 2004) • Contingency Perspective • Effectiveness of HRM system depends on contextual factors such as industry type, firm size, etc.

23. Organizational Mission & Goals Analysis Analysis of Organizational Strengths & Culture Choice & Implementation Of HR Strategies Analysis of Organizational Strategies Review & Evaluation of HR Strategies Steps in Strategic HRM Environmental Analysis

24. Aligning HR and Organizational Strategy • Use Porter’s strategies for illustration • Cost Leadership • Tight cost control, production efficiency, products designed for ease of manufacture, intense supervision of labour • Differentiation • Emphasis on marketing, product engineering, R&D, quality, technological innovation • Focus • Combination of cost leadership and differentiation directed a market segment

25. Cost Leadership Tight cost control Production efficiency Products designed for ease of manufacture Intense supervision of labour HR Strategies Clear job descriptions Detailed work planning Emphasis on technical skills Job-specific training Job-based pay Performance evaluations for control Example of Aligning HR and Organizational Strategy

26. Differentiation Emphasis on marketing Product engineering R&D Focus on quality Technological innovation Highly skilled labour HR Strategies Emphasis on innovation and flexibility Broad job classes Loose work planning Focus on recruitment, careful selection Team-based training Individual (skill)-based pay Performance evaluations for development Example of Aligning HR and Organizational Strategy

27. Wal-Mart vs. Costco • But, even firms using these strategies may not use the same HR practices. • Consider Costco and Wal-Mart (Sam’s Club, Wal-Mart’s warehouse retail stores) • Both use “Cost leadership” strategies, but have different values and emphases • See August 2006 issue of Academy of Management Perspectives

28. Facts about Wal-Mart’s Sam’s Club • Wal-Mart business model / strategy: • “Always Low Prices. Always.” • “Save money. Live better.” • Average hourly wage: $10.11 • Poor benefits • Does not permit unions

29. Facts about Costco • Costco business model / strategy: • Sell a limited number of items, keep costs down, rely on high volume, pay workers well, have customers buy memberships, and aim for up-scale shoppers, especially small business owners • And, don’t advertise • Average hourly wage: $17 • Substantial benefits • Permits unions

30. Wal-Mart vs. Costco • Wal-Mart: • secures low prices by insisting on low costs from suppliers and paying workers low wages with few benefits. • Turnover: 44% per year • Stock value over 5 years: minus 10% • Costco • emphasizes its Code of Ethics in its everyday business operations including respect for suppliers and employees • Turnover: 17% per year • Stock value over 5 years: plus 55%

31. Questions / Comments?