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

  1. 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.

  2. 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.

  3. Assess Future Human Resources Demand: Because technology changes rapidly, training programs must often be initiated long before an actual vacancy or need is apparent.

  4. Assess Future Human Resources Supply: The labor force is constantly shifting; it is aging and becoming more technically oriented.

  5. 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:

    1. Obtaining complete application forms.

    2. Conducting initial and follow-up interviews.

    3. Giving employment tests.

    4. Conducting background investigations.

    5. Obtaining results from physical exams (where applicable).

    6. 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:

    1. Assessing organizational needs and employee skills.

    2. Designing training activities.

    3. 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:

    1. Establish standards.

    2. Communicate standards.

    3. Evaluate performance.

    4. Discuss results.

    5. Take corrective action.

    6. 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 8989 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.