Chapter 1 Strategic Human Resource Management
What is Human Resource Management?
● Leadership and management of people using systems, methods, processes, and
procedures that enable employees to optimize their contribution.
● Supports and enables organizations to:
➔ Meet short and longterm economic, social, and environmental goal.
Organizational Goals:
1. Economic : e.g., profit, shareholder value
2. Social : e.g., ethical practices
3. Environmental : e.g., reduction of carbon footprint
★ For organizations to meet these goals, employees must engage in actions and
behaviours that move the organization toward accomplishing them
Strategic Human Resource Management
● Linked to the strategic needs of an organization
➔ Corporate, business, & functional levels
● HR strategies and tactic must be mutually consistent
● HR strategies need to be consistent with organizational priorities
Proactive HRM
Proactive vs. Reactive
● Proactive : decisionmakers anticipate problems and challenges and take action before a
problem exists.
● Reactive : decisionmakers respond to problems rather than anticipate them
Step 1: Organizational Mission, Goals, and Strategy
● Mission statement
● Cost leadership strategy
● Differentiation strategy
● Focus strategy
Step 2: Environmental Scan
1. Economic
2. Technological
3. Demographic
4. Cultural
5. Legal
Four Critical Economic Forces
1. Economic cycles
2. Global trade
, 3. Productivity improvement
4. Global competitiveness
Economic Force: Economic Cycles
● Canadian economy goes through b oom and bust cycles
● During recessionary periods: layoffs, wage concessions, lower morale
Economic Force: Global Trade
● International trade has always crucial
● Canada ranks high among exporting nations
● Canadian jobs and economic prosperity depend upon international trade
Economic Force: Productivity and Innovation Improvement
● Productivity improvement is essential for longterm success
● U.S. productivity has been outpacing Canada
innovation
● Without , productivity differences tend to increase
Productivity = Outputs (goods and services) / Inputs(e.g. people, capital, materials, energy)
Technological Force: Flexible Work Design
● Unprecedented degree of technology
➔ Changed the way we work, play, study, and entertain ourselves
➔ Access to information has affected the way organizations do business
● Technology has brought flexibility
➔ Telecommuting
Technological Force: Connectivity
● Knowledge Management
➔ Sharing and building new knowledge
● Information management systems
● Internet has a profound impact on HR activities
➔ Social networking sites
➔ Videosharing
Technological Forces: Mechanization
● Organizations automate to:
➔ Increase speed
➔ Provide better service
➔ Increase predictability
➔ Achieve higher standards of quality
➔ Increase flexibility
● May use robots to replace boring or hazardous jobs
Demographic Force: Gender Balance in the Workplace
, ● Nearly 48% of the workforce are women (2015)
● Women accounted for 70% of employment growth in the last 20 years
● Raises importance of:
➔ Child care / Workfamily balance
➔ Dual career families
➔ Employment equity
Demographic Force: Shift Towards Knowledge Workers
● Shifts from primary/extractive industries to service, technical, and professional jobs
➔ All services combined account for more than 75% of GDP
● Knowledge workers have been the fastest growing type of workers
Demographic Force: Aging Population
● Average age of the workforce is increasing
➔ Impending “old age crisis”
➔ Aging population
Demographic Force: Generational Shift
● Baby Boomers, Generation X, and Generation Y are qualitatively different workers
➔ Need to understand that people have different expectations from their workplaces
interpersonal dynamic
➔ Generational diversity creates and for all leaders
Cultural Force: Diversity
● Diversity
culture mosaic
➔ Canadian society is a
➔ Canada encourages maintaining unique culture and heritage vs. U.S. “melting
pot”
Cultural Force: Ethics
● Ethics
➔ Ethical conduct of business is an important issues
➔ Managers must understand ethical perspectives and consider ethical implications
Step 3: Analysis of Organizational Character and Culture
● Human resource strategies should be formulated only after a careful look at the
organization’s character
➔ Employees, objectives, technology, size, age, unions, policies, successes,
failures
● Each organization has a unique culture
Step 4: Choice and Implementation of Human Resource Strategies
● HR must continuously focus on 5 groups of activities:
1. Planning Human Resources
, 2. Attracting Human Resources
3. Placing, Developing, and Evaluation Human Resources
4. Motivation and Rewarding Human Resources
5. Maintaining High Performance
Step 5: Review, Evaluation, and Audit of Human Resource Strategies
● Strategies should be examined periodically in consideration of changing factors
(technology, environment, etc.)
● Human Resource Audit
● HR departments must focus on looking to the future i.e. proactive
The Organization of HRM
small organization
● HR Department in a
➔ Separate HR department emerges when HR activities become a burden
➔ Often emerges as a small department or individual reporting to middlelevel
manager
The Organization of HRM
● Large HR Department
➔ As the organization grows, the HR department usually grows in
impact/complexity
➔ Specialists are added
➔ Vice President titles used
The Service Role of the HR Department
● Staff authority
➔ HR departments are service departments
➔ Authority to advise, not direct
● Line authority
➔ Possessed by managers of operating departments i.e. authority to make
decisions
● Functional authority
➔ HR department may be provided authority to make decisions e.g. deciding types
of benefits
Today’s HR Professional
● Enormous growth in the number of HR managers: HR had been slow to evolve into a
profession
● Competencies for HR Managers: Mastery of HRM Tools, Change Mastery, Personal
Credibility
● CCHRA is a collaborative effort of HR associations: Coordinates national designations
CHRP
What is Human Resource Management?
● Leadership and management of people using systems, methods, processes, and
procedures that enable employees to optimize their contribution.
● Supports and enables organizations to:
➔ Meet short and longterm economic, social, and environmental goal.
Organizational Goals:
1. Economic : e.g., profit, shareholder value
2. Social : e.g., ethical practices
3. Environmental : e.g., reduction of carbon footprint
★ For organizations to meet these goals, employees must engage in actions and
behaviours that move the organization toward accomplishing them
Strategic Human Resource Management
● Linked to the strategic needs of an organization
➔ Corporate, business, & functional levels
● HR strategies and tactic must be mutually consistent
● HR strategies need to be consistent with organizational priorities
Proactive HRM
Proactive vs. Reactive
● Proactive : decisionmakers anticipate problems and challenges and take action before a
problem exists.
● Reactive : decisionmakers respond to problems rather than anticipate them
Step 1: Organizational Mission, Goals, and Strategy
● Mission statement
● Cost leadership strategy
● Differentiation strategy
● Focus strategy
Step 2: Environmental Scan
1. Economic
2. Technological
3. Demographic
4. Cultural
5. Legal
Four Critical Economic Forces
1. Economic cycles
2. Global trade
, 3. Productivity improvement
4. Global competitiveness
Economic Force: Economic Cycles
● Canadian economy goes through b oom and bust cycles
● During recessionary periods: layoffs, wage concessions, lower morale
Economic Force: Global Trade
● International trade has always crucial
● Canada ranks high among exporting nations
● Canadian jobs and economic prosperity depend upon international trade
Economic Force: Productivity and Innovation Improvement
● Productivity improvement is essential for longterm success
● U.S. productivity has been outpacing Canada
innovation
● Without , productivity differences tend to increase
Productivity = Outputs (goods and services) / Inputs(e.g. people, capital, materials, energy)
Technological Force: Flexible Work Design
● Unprecedented degree of technology
➔ Changed the way we work, play, study, and entertain ourselves
➔ Access to information has affected the way organizations do business
● Technology has brought flexibility
➔ Telecommuting
Technological Force: Connectivity
● Knowledge Management
➔ Sharing and building new knowledge
● Information management systems
● Internet has a profound impact on HR activities
➔ Social networking sites
➔ Videosharing
Technological Forces: Mechanization
● Organizations automate to:
➔ Increase speed
➔ Provide better service
➔ Increase predictability
➔ Achieve higher standards of quality
➔ Increase flexibility
● May use robots to replace boring or hazardous jobs
Demographic Force: Gender Balance in the Workplace
, ● Nearly 48% of the workforce are women (2015)
● Women accounted for 70% of employment growth in the last 20 years
● Raises importance of:
➔ Child care / Workfamily balance
➔ Dual career families
➔ Employment equity
Demographic Force: Shift Towards Knowledge Workers
● Shifts from primary/extractive industries to service, technical, and professional jobs
➔ All services combined account for more than 75% of GDP
● Knowledge workers have been the fastest growing type of workers
Demographic Force: Aging Population
● Average age of the workforce is increasing
➔ Impending “old age crisis”
➔ Aging population
Demographic Force: Generational Shift
● Baby Boomers, Generation X, and Generation Y are qualitatively different workers
➔ Need to understand that people have different expectations from their workplaces
interpersonal dynamic
➔ Generational diversity creates and for all leaders
Cultural Force: Diversity
● Diversity
culture mosaic
➔ Canadian society is a
➔ Canada encourages maintaining unique culture and heritage vs. U.S. “melting
pot”
Cultural Force: Ethics
● Ethics
➔ Ethical conduct of business is an important issues
➔ Managers must understand ethical perspectives and consider ethical implications
Step 3: Analysis of Organizational Character and Culture
● Human resource strategies should be formulated only after a careful look at the
organization’s character
➔ Employees, objectives, technology, size, age, unions, policies, successes,
failures
● Each organization has a unique culture
Step 4: Choice and Implementation of Human Resource Strategies
● HR must continuously focus on 5 groups of activities:
1. Planning Human Resources
, 2. Attracting Human Resources
3. Placing, Developing, and Evaluation Human Resources
4. Motivation and Rewarding Human Resources
5. Maintaining High Performance
Step 5: Review, Evaluation, and Audit of Human Resource Strategies
● Strategies should be examined periodically in consideration of changing factors
(technology, environment, etc.)
● Human Resource Audit
● HR departments must focus on looking to the future i.e. proactive
The Organization of HRM
small organization
● HR Department in a
➔ Separate HR department emerges when HR activities become a burden
➔ Often emerges as a small department or individual reporting to middlelevel
manager
The Organization of HRM
● Large HR Department
➔ As the organization grows, the HR department usually grows in
impact/complexity
➔ Specialists are added
➔ Vice President titles used
The Service Role of the HR Department
● Staff authority
➔ HR departments are service departments
➔ Authority to advise, not direct
● Line authority
➔ Possessed by managers of operating departments i.e. authority to make
decisions
● Functional authority
➔ HR department may be provided authority to make decisions e.g. deciding types
of benefits
Today’s HR Professional
● Enormous growth in the number of HR managers: HR had been slow to evolve into a
profession
● Competencies for HR Managers: Mastery of HRM Tools, Change Mastery, Personal
Credibility
● CCHRA is a collaborative effort of HR associations: Coordinates national designations
CHRP
