Chapter 12- Human Resource Management
Chapter 12- Human Resource Management
Overview of Human Resource Management (HRM)
Definition of HRM: Human Resource Management is the formal process of determining human resource needs and executing the following functions to achieve organizational goals:
Recruiting employees.
Selecting the right candidates.
Developing employee skills and potential.
Motivating the workforce (discussed further in Chapter 11).
Evaluating performance.
Compensating employees through wages and benefits.
Scheduling employees.
Strategic Role: HRM is no longer just about hiring and firing personnel. It is a strategic contributor to organizational success, ensuring all activities align with organizational goals while operating within the legal environment.
The Shift to a Knowledge Economy: Increased attention is being paid to HRM due to the major shift from traditional manufacturing to service-oriented and high-tech manufacturing industries. These sectors require highly technical job skills, necessitating the retraining of workers for more challenging roles.
Human Resource Challenges and Trends
Technological Disruption: Jobs are being significantly altered by technology, specifically Artificial Intelligence (AI).
Global and Political Uncertainty: Managers must navigate uncertainty in global politics affecting labor markets.
Demographic Shifts: Organizations deal with a multigenerational workforce and a growing percentage of new workers who lack formal education or preparation for modern jobs.
Labor Market Imbalances:
Shortages of trained workers in specific growth areas such as biotechnology and green technology.
Overseas or declining industries often have a large number of trained workers facing displacement.
Evolving Attitudes: There is a significant shift in worker attitudes toward work-life flexibility.
Determining Human Resource Needs: The Five-Step Planning Process
Prepare a Human Resources Inventory: This involves collecting data on the organization’s current employees, including names, ages, education (e.g., languages spoken), specialized skills, training, and capabilities pertinent to the organization.
Prepare a Job Analysis: This is a study of what is done by employees in various job titles. It yields two critical documents:
Job Description: A statement about the job itself. For a Sales Representative, this includes the primary objective (selling products in Territory D), duties (servicing accounts, maintaining relationships), and specific responsibilities (introducing new products, negotiating shelf space, stocking shelves).
Job Specifications: A statement about the person. This outlines the ideal characteristics, such as being bilingual, self-motivated, having a valid driver's license, two years of sales experience, and a diploma or degree in Business.
Assess Future Human Resources Demand: Because technology changes rapidly, training programs must often be initiated long before an actual vacancy or need is apparent.
Assess Future Human Resources Supply: The labor force is constantly shifting; it is aging and becoming more technically oriented.
Establish a Strategic Plan: The final plan must address recruitment, selection, training, evaluation, compensation, and career management.
The Recruitment Process
Definition: Recruitment is the set of activities used to obtain the right number of qualified people at the right time. The objective is to create a pool of qualified applicants.
Challenges in Recruitment:
Internal policies demanding promotion from within.
Union contracts and constraints.
Low wage offerings making it hard to attract or retain talent.
Cultural Fit: Modern emphasis on corporate culture, teamwork, and participative management means candidates must fit the leadership style, not just possess technical skills.
Sources of Employees:
Internal Sources: Transfers, promotions, employee recommendations, retrained employees, and department reorganizations.
External Sources: Personal applications, public and private employment agencies, management consultants, new graduates, former employees, part-time applicants, competing organizations, union organizations, advertisements (Internet, social media, newspapers), job fairs, and internships/co-operative education.
Selecting and Hiring Employees
Selection Process: Gathering information and deciding who to hire under legal guidelines. It is an expensive process but vital for organizational interests.
Five Steps in Selection:
Obtaining complete application forms.
Conducting initial and follow-up interviews.
Giving employment tests.
Conducting background investigations.
Obtaining results from physical exams (where applicable).
Establishing trial or probationary periods.
The Gig Economy and Contingent Workers
Definition of Gig Economy: An informal labor market characterized by temporary, short-term, or contract work.
Contingent Workers: Employees who do not have regular, full-time employment. Companies use them to address varying needs for labor rather than hiring full-time staff.
Employee Training and Development
Training vs. Development: Training refers to planned activities providing skills for the current job. Development focuses on improving productivity by increasing long-term ability.
The Three-Step Program:
Assessing organizational needs and employee skills.
Designing training activities.
Evaluating effectiveness.
Common Training Methods:
Orientation: Initiates new employees into the organization, introducing them to supervisors, policies, and values.
Onboarding: A series of events (including orientation) that helps new hires understand how to be successful and how their work contributes to the business.
On-the-Job Training (OJT): Learning by doing or imitating others at the workplace.
Apprentice Programs: Working alongside an experienced worker to master a craft (e.g., bricklaying/plumbing); some include classroom training.
Off-the-Job Training: External or internal programs away from the workplace for personal or professional development.
Online Training: Technology-driven training that allows many employees to participate simultaneously from different locations.
Vestibule Training: Near-the-job training in a classroom using equipment similar to that used on the job to learn safety and methods.
Job Simulation: Using equipment that duplicates exact job conditions so trainees can learn skills before attempting them on the job.
Management Development and Networking
Management Development: The process of training and educating employees to become effective managers and monitoring their progress. Key skills required include listening, empathy, time management, planning, and human relations.
Development Programs: Include on-the-job coaching, understudy positions, job rotation, and off-the-job courses.
Networking: Establishing and maintaining contacts (informal development) within and outside the organization.
Mentorship: A mentor is a corporate manager who supervises, coaches, and guides lower-level employees, acting as an organizational sponsor.
Performance Appraisals and Compensation
Performance Appraisal: Managers measure effectiveness, efficiency, and alignment with standards to guide decisions on pay, promotions, or termination.
Six Steps of Appraisal:
Establish standards.
Communicate standards.
Evaluate performance.
Discuss results.
Take corrective action.
Use results to make decisions.
Compensation Systems: Used to attract and retain talent. Types include:
Salary, Hourly Wage, and Day work.
Piecework systems and Commission plans.
Bonus plans, Profit-Sharing, and Gain-Sharing plans.
Cost-of-Living Allowances (COLAs) and Stock Options.
Cafeteria-style Benefits: Flexible plans where employees choose benefits up to a specific dollar amount.
Scheduling and Career Management
Scheduling Plans:
Flextime: Freedom to choose work hours, often including "core time" when everyone must be present.
Compressed Workweek: Working full hours in fewer days (e.g., 4 days instead of 5).
Home-based Work: Benefits employers by limiting absences and saving money; allows employees flexibility for personal tasks.
Job Sharing: Two part-time employees sharing one full-time job.
Movement through the Company:
Promotion: Internal promotion improves morale and is cost-effective.
Termination: Managed during downsizing or restructuring.
Retirement: Early retirement benefits can be used to entice older workers to retire, which may increase the morale of remaining staff.
Loss of Employees: Organizations should use exit interviews conducted by outside experts to learn why people leave.
Legal Environment and Human Rights
Key Legislation:
Federal: Canada Labour Code (Industrial relations, OHS, Labour Standards), Canadian Human Rights Act, and PIPEDA (privacy).
Provincial: Workers' Compensation, Human Rights, Labour Standards, Trade Union Act, and FOIPOP.
Pay and Employment Equity:
Duty to Accommodate: Employers must accommodate employees to the point of "undue hardship."
Gender Wage Gap: Canadian women earn an average of cents for every dollar men earn. Transparency in pay practices is a suggested solution.
Employment Equity: Designed to increase opportunities for four designated groups identified as victims of past discrimination.
Reverse Discrimination: Discriminating against a majority group (e.g., white males) through policies designed to correct previous discrimination against minorities.
Disabilities: Legislation prohibits discrimination based on physical or mental disabilities.