Part 1: Nature of Human Resource Management

Chapter 1: Changing Nature of Human Resource Management

Prepared by Linda Eligh, University of Western Ontario

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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.
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Nature of Human Resource Management

Human Resource (HR) Management
The policies, practices and systems that influence employees behaviour, attitude and performance in the attainment of organizational goals.

Who is an HR Manager?
In the course of carrying out their duties, every operating manager is, in essence, an HR manager. HR specialists design processes and systems that operating managers help implement.

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HR Management Activities

Fig. 1-1

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Nature of Human Resource Management HR Activities:

Global forces and HR Management Strategic HR Management Equal Employment Opportunity Staffing

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Nature of Human Resource Management HR Activities (contd):

HR Development Compensation and Benefits Health, Safety, and Security Employee and Labour Relations

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Nature of Human Resource Management

Smaller Organizations and HR Management
Shortage of Qualified Workers

Increasing Competition Issues of Greatest Concern

Increasing Costs (Benefits)

Increased Wage Pressures

Legislative Changes

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Typical Division of HR Responsibilities: Training

Fig. 1-2

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Management of Human Capital in Organizations

Human Capital
The collective value of the capabilities, knowledge, skills, life experiences, and motivation of an organizational workforce.
Also known as intellectual capital. How to measure the strategic value of human assets?

Human Resources as Core Competency

A unique capability that creates high value and differentiates an organization from its competition.

HR competencies: a source of competitive advantage.

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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

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HR Management Challenges
1. Globalization of Business
Outsourcing and offshoring Global security and terrorism

2. Economic and Technological Changes

Occupational shifts from manufacturing and agriculture to service and telecommunications. Job growth primarily in IT and healthcare Workforce availability and quality concerns

Inadequate supply of workers with soft skills needed for knowledge jobs Significant shortage across Canada of tradespeople
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HR Management Challenges
3. Labour
Employee retention Growth of contingent workforce

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. Growth of information technology creating more virtual employees and other challenges

Technological shifts and the Internet

Employability Skills

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HR Management Challenges
4. Workforce Demographics and Diversity
Multiculturalism Visible minorities and diversity

20% of workforce born outside Canada with growing presence of visible minorities

More women in the workforce

Single-parent households, dual career couples, domestic partners, working mothers and family/childcare Significant numbers of experienced employees are retiring, changing to part time etc. Age discrimination
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Aging workers

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HR Management Challenges
5. Organizational Cost Pressures, Restructuring
Mergers and Acquisitions Right-sizingeliminating layers of management, closing facilities, merging with other organizations, and outplacing workers

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.

HR managers must work toward ensuring cultural compatibility in mergers.

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HR Management Roles
Administrative Role
Clerical and administrative support operations (e.g., payroll and benefits work)
Technology is transforming how HR services are delivered. Outsourcing HR services to reduce HR staffing costs

Operational and Employee Advocate Role

Champion for employee concerns
Employee crisis management Responding to employee complaints

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Changing Roles of HR Management

Fig. 1-4

Note: Example percentages are based on various surveys.

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HR Management Roles
Strategic Role
Contributing at the Table to organizational results HR becomes a strategic business partner by:
Focusing on developing HR programs that enhance organizational performance. Involving HR in strategic planning at the onset. Participating in decision making on mergers, acquisitions, and downsizing. Redesigning organizations and work processes Accounting and documenting the financial results of HR activities.

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Operational to Strategic Transformation of HR

Fig. 1-5

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HR Management Roles
Collaborative HR
The process of HR professionals from several different organizations working jointly to address shared business problems. Firms benefit from the expertise of other firms, without having the time and expense of developing some of their own HR practices.

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HR Technology
Human Resource Management System (HRMS)
An integrated system providing information used by HR management, in conjunction with other managers, in decision making. Purposes (Benefits) of HRMS
Administrative and operational efficiency in compiling HR data Availability of data for effective HR strategic planning

Uses of HRMS
Automation of payroll and benefit activities EEO/affirmative action tracking HR Workflow: increased access to HR information Employee self-service reduces HR costs.

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Figure Web 1-6: Based Web Systems Based Systems Fig. 1-6
Bulletin boards

What information will be available and what is information needed? To what uses will the information be put?

Data access

Employee self-service
Who will be allowed to access to what information? Web-based services and access

Extended linkage

When, where, and how often will the information be needed?

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Ethics and HR Management

Firms with High Ethical Standards
Are more likely to reach strategic goals. Are viewed more positively by stakeholders Are better able to attract and retain human resources.

Ethics and Global Differences

Different legal, political, and cultural factors in other countries can lead to ethical conflicts for global managers. Corruption of Foreign Public Officials Act

Prohibits Canadian firms from engaging in bribery and other practices in foreign countries.
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Ethics and HR Management

HRs Role in Organizational Ethics:
HR management plays a key role as the keeper and voice of organizational ethics.

What is Ethical Behaviour?

What ought to be done. Dimensions of decisions about ethical issues in management:
Extended consequences Multiple alternatives Mixed outcomes Uncertain consequences Personal effects

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CCHRA CHRP National Code of Ethics

.
1. Preamble
2. Competence 3. Legal Requirements 4. Dignity in the workplace 5. Balancing Interests 6. Confidentiality 7. Conflict of Interest

Fig. 1-7

CCHRA/CHRP

8. Professional Growth and Support of Other Professionals

9. Enforcement
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Ethics and HR Management

HRs Role in Organizational Ethics: Responses to Ethical Situations
Are guided by values and personal behaviour codes that include:
Does

response meet all applicable laws, regulations, and government codes? Does response comply with all organizational standards of ethical behaviour? Does response pass the test of professional standards for ethical behaviour?

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Examples of Ethical Misconduct in HR Activities

Fig. 1-8

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Ethics and HR Management

Ethical Behaviour and Organizational Culture:
Organizational Culture
The shared values and beliefs in an organization Common forms of unethical conduct:

Lying to supervisors Employee drug use or alcohol abuse Falsification of records

Fostering Ethical Behaviour

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

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HR Management Competencies and Careers Important HR Competencies

Strategic contribution to organizational success Business knowledge of the organization and its strategies Effective and efficient delivery of HR services Familiarity with HRMS technology Personal credibility
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Human Resources Professional Capabilities Profile

Fig. 1-9

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HR Management Competencies and Careers

HR Management as a Career Field HR Generalist
A person with responsibility for performing a variety of HR activities.

HR Specialist
A person with in-depth knowledge and expertise in a limited area of HR.

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Expected Earnings by Age for an HR Manager

Fig. 1-10

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HR Management Competencies and Careers

HR Professionalism and Certification Professional Involvement and Development
Involvement by HR Professionals in professional associations and organizations has become important because of the broad range of issues they face. Examples include:

Human Resources Professionals Association of Ontario (HRPAO) Canadian Public Personnel Management Association (CPPMA)

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HR Management Competencies and Careers

CHRP Designation
Administered by the Canadian Council of Human Resource Associations (CCHRA) in partnership with provincial Human Resources associations. Eligibility requirements vary by provincial associations, but the National Knowledge Exam (NKE) and Professional Practice Exam (PPE) is the same for everyone.

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