Chapter 11: Human Resources Management

Overview of Human Resource Management (HRM)

• Definition of HRM: Human Resource Management (HRM) is the strategic practice of managing an organization's workforce to achieve its goals effectively and efficiently. It encompasses recruitment, training, development, and retention of employees to align skills and contributions with organizational objectives.

• Scope of HRM Functions: HRM involves workforce planning, performance management, employee relations, compensation and benefits, labor law compliance, and fostering a positive organizational culture.

• Starbucks Case Study: Howard Schultz, former CEO of Starbucks, emphasizes that employees are the public face of the company; every dollar of sales passes through their hands. Positive interactions drive customer retention, while negative encounters can lose customers permanently. Starbucks' strategy involves attracting, developing, and retaining quality employees to maintain a competitive advantage.

• The Goal of HRM: By focusing on both employee well-being and organizational needs, HRM aims to maximize performance, satisfaction, and productivity, driving overall business success.

The Human Resource Planning Process

• Definition: Strategic human resource planning is the process of developing a plan to satisfy an organization's HR needs, ensuring the right number of people with the right skills are available at the right time.

Key Steps in the HR Planning Process

1. Analyze Organizational Objectives and Strategy: Understand business goals (e.g., expansion, new products) to forecast future HR needs. This involves anticipating requirements based on business growth, market conditions, technology, and regulations.

2. Assess Current Workforce: Conduct an inventory of current employees, assessing skills, qualifications, experience, and potential. This identifies talent shortages, skill gaps, or excess capacity.

3. Forecast HR Demand and Supply: Predict future needs based on growth, turnover, and retirement. Assess internal and external labor availability.

4. Develop HR Strategies: Plan for hiring, internal promotions, training programs to close skill gaps, and succession planning for leadership roles.

5. Implement HR Strategies: Launch recruitment drives, development programs, or restructuring. Ensure adequate resources ($\text{budget, time, materials}$) are available.

6. Monitor and Evaluate HR Plans: Regularly review progress to ensure alignment with goals. Assess whether outcomes like reduced turnover or improved productivity are achieved.

7. Revise and Update Plans: Update plans as conditions evolve, incorporating lessons learned from previous cycles.

Forecasting Human Resources Needs

• Definition: HR forecasting is the process of predicting staffing changes over time to ensure successful operations.

• Steps to Forecasting:

  1. Identify currently available human resources (Supply).

  2. Predict resources needed to achieve objectives (Demand).

  3. Measure the gap between the two (Shortage or Surplus).

• Addressing Disparities:

  • Shortage (Demand > Supply): Hire more workers, encourage extra hours, subcontract work, or introduce labor-saving initiatives.

  • Surplus (Supply > Demand): Attrition (not replacing workers who leave), encouraging early retirement, layoffs, or firing (as a last resort).

• Benefits of Forecasting: Optimizes staffing levels, controls labor costs, reduces risks of understaffing/overstaffing, and supports professional development.

Human Rights and Employment Law

Canadian Human Rights Act (CHRA)

• Scope: Applies to federal organizations and federally regulated industries (e.g., banks, telecommunications).

• Section 3: Prohibits discrimination based on race, national or ethnic origin, colour, religion, age, sex, sexual orientation, gender identity or expression, marital status, family status, genetic characteristics, disability, or conviction for a pardoned offence.

• Section 11: Guarantees equal pay for work of equal value in the same establishment.

• Enforcement: The Canadian Human Rights Commission (CHRC) investigates complaints and may refer cases to the Canadian Human Rights Tribunal (CHRT). Decisions are enforceable in the Federal Court.

Canada's Charter of Rights and Freedoms (CCRF)

• Scope: Part of the Constitution; applies to interactions between individuals and all levels of government (federal, provincial, territorial).

• Section 15(1): Protects the right to equal treatment regarding employment regardless of race, national/ethnic origin, colour, religion, sex, age, or disability.

Provincial Legislation: Ontario Human Rights Code (OHRC)

• Scope: Applies to private businesses and public services within Ontario. It covers five social areas: employment, housing, services, unions/vocational associations, and contracts.

• Note: The CHRA and OHRC cannot apply simultaneously; only one has jurisdiction depending on whether the entity is federally or provincially regulated.

Additional Employment Laws

• Canada Labour Code (CLC): Governs employment standards (hours, wages, holidays), health and safety, and industrial relations for federal workplaces.

• Employment Equity Act (EEA): Requires federal employers to actively remove barriers for four designated groups: Women, Indigenous peoples, persons with disabilities, and visible minorities.

• Occupational Health and Safety Act (OHSA): Ensures safe working conditions. Rights include the right to refuse unsafe work. Provincial variations include WorkSafeBC (British Columbia) and LSST (Quebec).

• Other Acts: Accessible Canada Act (ACA), Accessibility for Ontarians with Disabilities Act (AODA), and the Pay Equity Act (Ontario).

The Recruitment and Selection Process

Recruitment vs. Selection

• Recruitment: The broad effort of identifying and attracting suitable candidates to apply for openings.

• Selection: The specific focus on evaluating and choosing the best candidate from the applicant pool.

Job Analysis and Planning

• Job Description: A document listing the duties and responsibilities of a position.

• Job Specification: A document listing the qualifications (skills, knowledge, abilities) needed for the job.

Sourcing Strategies

• Internal Recruiting: Promoting from within. Pros: Positive signal to staff, reward for performance, candidate is a "known quantity," cheaper. Cons: Leaves another vacancy to fill.

• External Recruiting: Hiring from outside. Pros: Fresh ideas and skills. Cons: Necessary for entry-level or niche skill sets.

• Publicizing Jobs: Corporate websites (Starbucks "Job Centre"), campus recruiting, internships, employment sites (LinkedIn, Indeed, Workopolis), and social media.

• LinkedIn Statistics: It has $1 \text{ billion}$ members in over $200$ countries. Over $90\%$ of recruiters report hiring someone from LinkedIn.

Contingent Workers

• Types: Independent contractors, consultants, freelancers, on-call workers (e.g., substitute teachers), and temporary workers (temps).

• Pros: better control of labor costs, flexibility for busy/slow periods, ability to "try out" workers.

• Cons: Increased training costs, decreased loyalty, potential for lower productivity.

The Selection Process: Successive Hurdles Approach

1. Initial Screening: Reviewing applications/resumes and conducting brief interviews ($< 30 \text{ minutes}$).

2. Employment Testing:

   • Wonderlic Personnel Tests: Assess cognitive ability, motivation potential, and knowledge/skills.

   • Numerical/Verbal Reasoning: Used by companies like Ford Motor to objectively assess diverse candidates.

   • Personality Questionnaires: Used by McDonald's to determine "fit" for the organization.

3. Selection Interview: In-depth discussion of skills and interests. May involve realistic job situations (e.g., handling a disgruntled customer). Illegal questions in Canada include physical traits (eye color, height, weight).

4. Physical Exams and Drug Testing:

   • Canada: Pre-employment drug testing is generally considered discriminatory unless there is a Bona Fide Occupational Requirement (BFOR), specifically for safety-sensitive positions.

   • USA: More common in transportation and healthcare.

5. Background and Reference Checks: Verifying legal history and professional credentials. Fraudulent credentials typically result in termination.

6. Decision to Hire: Systematically evaluating scores to find the best fit.

Employee Orientation and Training

New-Employee Orientation

• Common Emotions: Nervousness, confusion, loneliness, imposter syndrome, and stress.

• Employer Pitfalls: Failing to set up workspace, failing to provide feedback mechanisms, or failing to share clear goals.

• Purpose: Introduce policies, procedures, history, and culture to improve retention.

Types of Training

• Case Studies.

• Coaching/Mentoring.

• Technology-based Learning (eLearning).

• Instructor-led Training.

• Interactive Training.

• On-the-job Training.

• Video-based Training.

Training Investment and Costs

• US Statistics (2023): Average spend of $\$954$ per employee; average $57$ hours of training per year. Small companies spend more ($\$1,420$) than large ones ($\$481$).

• Canadian Investment: Modest spend of approximately $\$240$ per employee annually. Higher investment in utilities and finance; lower in retail and oil/gas.

• Compliance Training: Teaches safety, accident prevention, and standards for a healthy working environment.

Performance Appraisal

• The Three-Step Process:

  1. Set goals, expectations, and criteria (quality, quantity, dependability).

  2. Complete written evaluations at the end of the period.

  3. Meet with the employee to discuss results and suggested improvements.

• Purpose: Discussion of performance, documentation for salary/promotion, and aligning individual goals with organizational objectives.

• 360-Degree Feedback: Feedback from all directions—supervisors, subordinates, coworkers, and customers. Utilized by Google, Netflix, and Nissan.

Inclusion, Diversity, Equity, and Accessibility (IDEA)

• Diversity: Presence of a wide range of people (ethnicity, religion, age, gender, orientation).

• Equity: A process ensuring access to the same opportunities by acknowledging unequal starting places/barriers.

• Inclusion: Designing policies/spaces to ensure different identities feel valued and welcomed.

• Accessibility: Making environments usable for as many people as possible. It is about usability, context, and compliance.

• Indigenous Inclusion: Following the Truth and Reconciliation Commission's Calls to Action (2015). Companies engage with Indigenous culture and offer financial support for community organizations.

Retaining Employees and Job Redesign

Job Redesign Strategies

• Job Rotation: Rotating employees through different tasks to reduce tedium and cross-train staff.

• Job Enlargement: Adding tasks at a similar skill level to provide variety.

• Job Enrichment: Adding tasks that increase responsibility and opportunity for growth (e.g., transitioning "secretaries" to "administrative assistants").

Work-Life Balance and Flexible Arrangements

• Remote Work (Telecommuting): Working from home. $40\%$ of Canadian jobs can be done remotely. $85\%$ in finance/insurance vs. $4\%$ in agriculture.

• Flextime: Allowing employees to choose starting and quitting times within specific guidelines.

• Compressed Workweek: Working longer hours over fewer days (e.g., four $10\text{-hour}$ days).

• Job Sharing: Two people splitting one full-time position.

• Employee Assistance Programs (EAPs): Confidential support for personal issues.

Professional Examples of Retention Perks

• BASF Canada: Tops up parental leave to $100\%$ of salary for up to $17$ weeks; offers a $\$400$ fitness subsidy.

• KPMG LLP: Provides $50$ hours of paid personal time annually; offers emergency backup dependent care and the equivalent of $1.25\%$ of salary for home gym equipment.

Workplace Culture

• Elements Employees Value (MIT Sloan/CultureX): Feeling respected, supportive leadership, alignment with values, job security, and quality of reorganization.

• Impact of Happiness: Happiness in the workplace can raise productivity by $12\%$.

• Toxic Work Culture Signs: Disrespect, lack of diversity, unethical behavior, cutthroat environments, hostility, and job insecurity.

Compensation and Benefits

• Wages vs. Salary: Wages fluctuate based on hours; salaries are steady and often include better advancement opportunities.

• Piecework: Pay based on quantity produced.

• Commission: Percentage paid on sales closed (real estate, sales).

• Bonus Plans: Annual income added based on individual/company performance. Cisco Systems uses this to reward performance rather than seniority.

• Profit-Sharing: Payments based on company net profit. Canadian Tire's plan has existed since the late 1960s; profits average about $10\%$.

• Stock-Option Plans:

  • WestJet: Employees can purchase shares up to $20\%$ of gross salary; company matches contribution.

  • Starbucks: "Bean Stock" program for both full- and part-time employees.

• Benefit Costs: Average premium is $15\%$ of payroll for small businesses; up to $30\%$ for large companies.

Employment Termination

• Voluntary Termination (Resignation): Employee chooses to leave. Reasons include seeking higher salary, better management, or more challenge. Exit interviews are used to identify internal problems.

• Involuntary Termination: Employer ends the relationship due to poor performance, policy violations, or economic downsizing. Best practice involves written documentation to demonstrate "just cause."

Unions and Collective Bargaining

• Union: A group of workers negotiating as a unified entity via Collective Bargaining.

• Labor Tactics:

  • Strike: Collective work stoppage.

  • Picketing: Protesting outside the workplace.

  • Boycott: Organising the public to refuse products/services.

  • Lockout: Employer prevents workers from entering until an agreement is reached.

• Dispute Resolution: Mediation (neutral third party, voluntary) or Arbitration (neutral third party, binding).

• Challenges to Unionizing: Fear of retaliation, lack of awareness, diverse workforce needs, and employer resistance.

• Union Examples:

  • CUPE: Canada's largest union, $750,000$ members.

  • OPSEU/SEFPO: Approx. $180,000$ members in Ontario.

  • UFCW Canada: over $250,000$ members; over $40\%$ are under age $30$.

• Union Membership Stats (2019/2020): Canada ($29.4\%$), Ireland ($25.4\%$), USA ($10.3\%$), Philippines ($8.5\%$), Malta ($41.9\%$).