Chapter 1; LO2: Understanding the Strategic Human Resource Management Process

Step 1: Organization Mission, Goals, and Strategy Analysis
Mission statement
Generic Strategies
Mission statement
Generic Strategies
outlining the purpose, long-term objectives, and activities the organization will pursue and the course for the future.
Generic Strategies
Cost leadership strategy
Differentiation strategy
Focus strategy
Cost leadership strategy
strategy to gain competitive advantage through lower costs of operations and lower prices for products.
Differentiation strategy
strategy to gain competitive advantage by creating
Focus strategy
strategy to gain a competitive advantage by focusing on the needs of a specific segment of the total market.
Step 2: Environmental Scan
Economic (recession)
Technological (automation)
Demographic (workforce composition)
Cultural (ethnic diversity)
Legal (changing laws) *not until C4*
Economic Forces
Economic Cycles
Global Trade
Productivity and Innovation Improvement
Economic Cycles
§ Recessionary period= planning, communicating, implementing employee payoffs
§ Wage concessions have to be sought from labor for the sheer survival of the firm.
Workforce morale by and large is low during a recessionary period
Global Trade
§ The combination of a relatively small population and a large natural resource base gives Canada an international trade advantage.
§ Open borders > newer opportunities to Canadian firms and professionals > Canadians working abroad and increase in economic immigration to Canada
Productivity and Innovation
Increases as an organization finds new ways to use fewer resources to produce its output. Gains in productivity can reduce costs, save scarce resources, and enhance profits.
Without innovation, productivity difference tend to increase
Productivity: ratio of organization’s outputs (goods/services) to its inputs (people, capital, materials, and energy).
Technology Forces
Flexible Work Design
Flexible Work Design
§ Technology influences organizations and the way people work.
§ Telecommuting (working from home) has been found to cut employee stress and boost worker productivity in several instances, while also reducing the costs of operations.
§ Increase in working distally can lead to a climb in data breaches.
the process of capturing organizational knowledge and making it available for sharing and building new knowledge.
§ Social networking sites, video-sharing sites, wikis, blogs, and other interactive opportunities allow users to own and control data as well as add value to the applications they use.
Knowledge management
the process of capturing organizational knowledge and making it available for sharing and building new knowledge.
§ (Definition) The shift toward converting work that was traditionally done by hand to being completed by mechanical or electronic devices.
§ Can provide better customer service through increased predictability, and reliability in operations and higher standards of quality in production
§ Allows for flexibility in operations
§ Automation may result in a smaller workforce together with fewer opportunities.
Demographic Forces
Gender Balance in the Workforce
Shift toward Knowledge Workers
Educational Attainment of Workers
Aging Population
Generational Shift
Gender Balance in the Workforce
§ Education levels, age levels, the percentage of the population participating in the workforce
§ Demographic changes: changes in the demographic of the labour force that occur slowly and are usually known in advance
Shift toward Knowledge Workers
§ There is a shift from employment in primary and extractive industries (mining/fishing) to service, technical, and professional jobs.
§ Knowledge workers: members of occupations generating, processing, analyzing, or synthesizing ideas and information (scientists and management consultants)
Educational Attainment of Workers
Educational attainment
Employability Skills
Educational attainment
the highest educational level attained by an individual worker, employee group or population
Employability Skills
□ Basic academic skills (communication, thinking, learning)
□ Personal management skills (positive attitudes and behaviours, ability to accept responsibility, adaptability to new challenges)
□ Teamwork skills (ability to work with others, ability to lead a team)
Aging Population
§ The fear post-retirement poverty (fuelled by uncertainty about government-sponsored pension plans and the recent volatility in the stock market which eroded the savings of many Canadians) may motivate employees to hold on to their current jobs.
Can create unprecedented bottlenecks in professional and unionized industries
Generational Shift
§ Generation Xers are not averse to hard work and are active participants in decision making
□ Likely to show disdain for a “command and control” culture and more loyalty to their profession
§ Gen Yers seek continuous learning, ongoing feedback, teamwork, up-to-date technology, security, respect, and work-life balance
Biggest fear is boredom
Cultural Forces
Cultural forces
Cultural mosaic
Cultural forces
cultural differences among employees or changes in core cultural or social values occurring at the larger societal level
Cultural mosaic
Canadian ideal of encouraging each ethnic, racial, and social group to maintain its own cultural heritage, forming a national mosaic of different cultures
Unethical practices
□ Creative accounting
□ Insider trading
□ Securities fraud
□ Excessive payments made to top management not reflective of their contributions
Bribery kickbacks
What Is a “Right” Behaviour?
Universalist approach
Situational approach
Subjectivist approach
□ Universalist approach: some moral standards are universally applicable. Regardless of society or place, a bad act (killing/stealing) is bad.
□ Situational approach: what is good or bad depends essentially on the situation or the culture surrounding the actor. While killing is bad, there may be situations in which this act is justified.
□ Subjectivist approach: the individual decision maker facing a situation determines what is right and wrong after considering all aspects of the situation. Based on personal values and preferences. Depends on their upbringing, current circumstances, values, and beliefs.
Six Stages of Moral Development: Lawrence Kohlberg
(Stage 1) Obedience and Punishment Stage
(Stage 2) Reciprocity Stage
(Stage 3) Interpersonal Conformity Stage
(Stage 4) Law and Order Stage
(Stage 5) The Social Contract Stage
(Stage 6) Universal Ethical Principles Stage
(Stage 1) Obedience and
the only reason for a person to perform the “right” act at this is obedience to others who have the power to punish
(Stage 2) Reciprocity Stage
individual enters into reciprocal agreements with others so that he or she receives the greatest good or reward. Individual is willing to take actions that others want him or her to take.
(Stage 3) Interpersonal Conformity Stage
what is “right” is determined by expectations of others whoa re close to the individual. Close relatives, friends, and other “reference groups” help the individual identify the “right” action in any setting.
(Stage 4) Law and Order Stage
doing one’s duty and obeying society’s rules is considered the “right” behaviour at this stage.
(Stage 5) The Social Contract Stage
the individual goes beyond the minimal standards established by laws and rules. “The greatest good of the greatest number” in the society is the maxim that guides the individual’s behaviour at this stage
(Stage 6) Universal Ethical Principles Stage
guided by high moral principles. People are to be treated as ends in themselves, not just means to one’s ends or even to the ends of a whole group or society. People ae considered as inherently valuable and to be treated in the right way. Very few individuals reach this level.
Step 3: Analysis of Organizational Character and Culture
○ Organization character: the product of all an organization’s features- people, objectives, technology, size, age, unions, policies, successes, and failures.
○ Highly formal bureaucracy that is structured along functional lines (marketing, finance, production, etc.), HR’s role is often to preserve the existing division of work through clear job descriptions, hiring of specialists for each division, and introducing training systems that foster functional expertise
○ Organizational culture: the core beliefs and assumptions that are widely shared by all organizational members.
Step 4: Choice and Implementation of Human Resources Strategies
Give consideration to both internal and external environments because they give opportunity for the HR to evaluate potential HR practices an activities and whether each is viable.
Identify, secure, organize, and direct the use of resources both within and outside the organization
Planning Human Resources
□ Enables determination of demand and supply of various types of HR in the firm
□ Systematic review of the current state of HR practices
Identification of needed HR processes, tools, and activiti
Attracting Human Resources
□ Meet all legal requirements (equal employment opportunity laws)
□ Selection process is a series of specific steps used to decide which recruits should be hired, and aims to match job requirements with an applicant’s capabilities
Placing, Developing, and Evaluating Human Resources
□ New employees need to be oriented to the organization’s policies and procedures and placed in their new job positions
□ Performances appraisals give employees feedback on their performance and can help HRD identify future training needs
Motivating Employees
□ If employees are performing well, they must get compensation
□ Determined by internal work procedures, climate, and schedules
Maintaining High Performance
□ Well-established employee relations practices, including good communication between managers and employees, standardized disciplinary procedures, and counselling systems
Step 5: Review, Evaluation, and Audit of Human Resources
○ Organization must be examined regularly to ensure their continued appropriateness
○ Program evaluation helps the firm to fine tune its practices to even abandon some actions that do not seem to have performance potential
Human resource audit
an examination of the HR policies, practices, and systems of a firm to eliminate deficiencies and improve ways to achieve goals
Benefits of audit
§ Align the HRD’s goals with larger organizational strategies
§ Uncovers better ways for the department to contribute to societal, organizational, and employee objectives
§ Ensures timely compliance with legal requirements
§ Discloses how well managers are meeting their HR duties
§ Uncovers critical HR problems and possible solutions
§ Reduces HR costs through more effective procedures
§ Provides specific, verifiable data on the HRD’s contributions
§ Stimulates uniformity of HR policies and practices
§ Review and improve the HRD’s information system
§ Enhances the professional image of the department’s among various stakeholders
Areas covered in audit
§ Human rights legislation
§ Job analysis information
§ Recruiting
§ Training and orientation
§ Performance appraisals
§ HR controls
§ HR plans
§ Compensation and administrations
§ Selection
§ Career development
§ Labour-management relations
HR audits
HR grows more important each year because..
§ Failure to comply with equal employment or safety laws subjects the organization to lawsuits
§ “People costs” are significant because pay/benefits are a major operating expense
§ Life
Critical resource (not capital but information and knowledge and expertise)