Module 1- Introduction to Human Resource Management (HRM) Flashcards
What is HRM and why does it matter?
…the management of people within organisations through systems, processes, procedures, policies and tools enabling employees to optimize performance and enhance organisational objectives.
Why does it matter?
Most organisations will argue that “people are our most valuable resource”
Labour costs are major cost item for org. often more than 50% of costs
Shift of HRM from administrative function to strategic business partner over past decades
Increased need for innovative HRM policies in light of talent shortage and move to knowledge economy
HR as major priority/focus area for CEOs on:
-Talent attraction and retention
-Employee performance
-Change management and leadership/management behaviours
-Employee attitude & morale
-Organisational culture
HR
job to get the talent for businesses
-labor cause increased over time 50-60% (benefits in this cost and has increased – 90’s used to be 15% of payroll now 45%)labor most expensive operation cost (lots of business)
-HR strategies can make or break a company
-still do important admin functions (like pension plans, etc.)– technology makes this much easier (lots can be automated)
What shapes HRM?
HR impacted by internal and external forces
-external developments become increasing important
-e.g. older demographic HR needs to learn to accommodate, multicultural
-legal/reg- Ontario and Quebec- day equity law- pay equal wage for work of equal value (analysis has to be done)
Internal focus in this lecture
Internal Forces
Org. Mission
Org. Goals & Objectives
Org. Culture
Choice of HRM Strategies
External Forces
Economic environment
Technology
Demographics & culture
Legal/regulatory constraints
Alignment with Organizations Mission, Goals & Objectives
Generic Business Strategies and Workplace Reality
-vital that any HR strategy is aligned with the overall business strategy of the organization
-organizations fall into different categories based on strategy
Generic Business Strategies
Typical generic strategies include:
a. Innovator/Differentiator:
Companies that focus on innovation; like google/apple, etc. offer products for the first time in the market –usually these products are expensive
b. Cost Leadership:
trying to achieve more with less; e.g. dollarama
c. Focus (certain market, product, etc.):
Target specific market; e.g. tool operating (high end safaris in Africa)
-companies may try to gain competitive advantage by focusing on being an innovator (or differentiator) or cost leadership of focus (offer very specific products)
Workplace Reality
Not all companies have a clearly stated strategy
Even if they do, they may combine different business strategies in different business units
Budgetary or regulatory constraints may interfere with any formal strategy
Simple HR strategy may be “we address problems as they arise” and hope for the best
Reality:
Adopt certain pieces of each strategy its not an either or
Most companies- have a dominant one that fall in a category
-even If have strategy might not use it or able to implement (budget cuts or changes might make difficult or regulatory might make it to expensive to implement)
Complexity- of strategy ranges from nonexistent to very complex/comprehensive (e.g. SAP)
Organizational Culture
Hierarchical
Top-down communication
Many pay levels
Rewards individual performance
Autocratic decision-making
Egalitarian
Organic communication
Fewer pay levels
Rewards team effort
Collaborative decision-making
Continuum – Not “either-or”
Peter Drucker** Remember
“Culture eats strategy for breakfast”
Quote means that a culture of an organization is much more important to a companies success than any formal strategy (which is then never executed or implemented in reality )
-e.g. prof task force good superior good communication (divide tasks efficiently to each other strengths) – very successful (the 3 of them had internal culture on the team that supported that type of activity)
-e.g. contrast – new boss very bossy (new role well –boss requested detailed reports but data wasn’t helpful b/c it changes )- in department culture poor b/c boss didn’t know what was doing
Hr transition agreements
Agreement by which one company on a temporary basis provides HR services to another company
Companies fall on a scale from being very hierarchical to very egalitarian
-hierarchal e.g. the bossy boss, military
-egalitarian; e.g. project in Africa, small tech start up
Culture matters b/c it directly translates into how things get done internally and how certain HR policies/practices will effect the implemented
Hierarchal
- top-down communication (must go along with)
-many different pay grades and differences between top and bottom
-focus in individual
-decisions are made at the top (don’t get experts views/opinions
-two way communication
-pay of employees often closer together
-more supportive of team work (group incentive plan – bonus depends on success of team
-decisions usually made as team, everyone opinion is heard and decision is based on what is best for company/organization
Each organization is somewhere on continuum not either or
Choice of HRM Strategies
Complexity and sophistication of HRM Strategies as well as HR department itself depends on org. size, complexity, market, stage in the org. life cycle and other factors.
HRM strategies are not static they need to evolve as the org. and the external environment evolves.
Common HR disciplines include (list not exhaustive):
Recruitment:
identify suitable candidates to join the organization
Compensation:
ensure employees are paid in line with comp. policy and in compliant manner
Employee Benefits:
define and set up benefit plans in line with total comp. strategy and employees needs
Workforce Planning :
determine future demand and supply of labour and identify gaps
Training and Development:
evaluate training/development needs and implement training programs
Equity/Inclusion/Diversity:
enhance EDI policies and practices throughout the organization
Occupational Health & Safety:
enforce compliance with OHS regulations and increase OHS awareness
-not all HR have all these also have others not on the list
Strategies
No such thing as a one size fits all HR strategy – depends on the complexity/size of the organization, which market it serves, type of organization and where it operates
-e.g. makes differences from HR standpoint if company is publicly traded or not; if public have obiligation to report certain executive compensations/disclosure; or unionized (need labor relations department
-if private don’t have that obligation –from HR perspective there is likely no dedicated executive compensation department in privately held organization while there might be in public; not unionized (type of organization has direct impact on how HR is set up, which policoes/practices have to adopt)
Profit vs non profit organization
-e.g. non profit might be short on cash so often pay isn’t great might have great advantage for employee (share similar values) , more flexibility with time off
Makes huge where operate (just saskatoon or provincially or nationally- things get more complex)
-e.g. 2000 employees easy in sk but nationally pretty easy too, but now global –makes it more complex (deal with dif language, laws, currency, enviro, cultures/customs etc.)
