2 PART 1 Human Resources Management in Perspective

THE STRATEGIC ROLE OF HUMAN

RESOURCES MANAGEMENT
human resources management Human resources management (HRM) refers to the management of people in
(HRM) The management of people organizations. Human resources professionals are responsible for ensuring that the organ-
in organizations to drive successful
organizational performance and ization attracts, retains, and engages the diverse talent required to meet operational and
achievement of the organization’s performance commitments made to customers and shareholders. Their job is to ensure
strategic goals. that the organization finds and hires the best individuals available, develops their tal-
ent, creates a productive work environment, and continually builds and monitors these
Watch on MyManagementLab human assets. They have the primary responsibility for managing the workforce that
Patagonia: Human Resources Management
drives organizational performance and achieves the organization’s strategic goals.1
More specifically, HRM involves formulating and implementing HRM systems
(such as recruitment, performance appraisal, and compensation) that are aligned with
the organization’s strategy to ensure that the workforce has the competencies and
HR Competency behaviours required to achieve the organization’s strategic objectives. It is crucial that
10100 the HR strategy be aligned with the company’s strategic plan (see Figure 1.1).
Just as important as the financial capital that is required for an organization to
operate, the knowledge, education, training, skills, and expertise of a firm’s workers
human capital The knowledge, represent its increasingly valuable human capital. More and more organizations are
education, training, skills, and exper- awakening to the importance of human capital as the next competitive advantage.2
tise of an organization’s workforce.
Research studies over the past two decades have confirmed that effective HR practi-
HR Competency ces are related to better organizational performance.3 Organizational benefits range from
employee empowerment to extensive training that affects the productivity of employees.4
10200
The resource-based view of the firm suggests that human resource practices contribute
to the development of embedded knowledge of a firm’s culture, history, processes, and
EVIDENCE-BASED HR context, which are non-imitable.5
More specifically, three HR practices (profit sharing, results-oriented performance
appraisal, and employment security) have strong relationships with important accounting
measures of performance (return on assets and return on equity).6 High-performance
HR practices (comprehensive employee recruitment and selection procedures, incentive

FIGURE 1.1 Linking Company-Wide and HR Strategies

Company’s competitive environment

Economic, political, demographic,
competitive, and technological trends

Company’s strategic plan

For example
Company’s strategic situation #

we expand geographically?
#


#
ersify?

Company’s internal strengths

and weaknesses
Company’s HR (and other functional)
strategies
What are the basic courses of action
Organizational performance HR will pursue to ensure that the recruiting,
selecting, training, appraising, and
compensation systems support the
company’s strategic plan?

Source: © Gary Dessler, Ph.D., 2007.

 CHAPTER 1 The Strategic Role of Human Resources Management 3

compensation and performance management systems, and extensive employee involve-

HR Competency ment and training) have a positive relationship with turnover, productivity, and corpor-
10600 ate financial performance (gross rate of return on capital).7

Why Is Human Resource Management Important

to All Managers?
Perhaps it’s easiest to answer this by listing some mistakes managers don’t want to make.
For example, no manager wants to:
hire the wrong person for the job
experience high turnover
have employees work below performance expectations
waste time with useless interviews
have the company taken to court because of discriminatory actions
have the company cited under federal occupational safety laws for unsafe practices
have some employees think their salaries are unfair relative to others in the organization
allow a lack of training to undermine a department’s effectiveness
commit any unfair labour practices
In addition, throughout one’s career, he or she may spend time as a HR manager. About
one-third of the top HR managers in Fortune 100 companies moved to HR from other
functional areas.8 Reasons given include the fact that such people may give the firm’s HR
efforts a more strategic emphasis, and the possibility that they’re sometimes better equipped
to integrate the firm’s human resource efforts with the rest of the business.9 For example,
Pearson Corporation (which publishes this book) promoted the head of one of its publish-
ing divisions to the role of Chief Human Resource executive at its corporate headquarters.
HR is critical in large and small organizations. More than two in every three people
working in the private sector in Canada as of 2012—about 7.7 million out of 11.3
million—work for small firms.10 Statistically speaking, therefore, most people gradu-
ating from university, college, or private training programs in the next few years either
will work for small businesses or will create new small businesses of their own, usually
HR Competency without a designated HR department. Thus, entrepreneurs, employees, and managers
20600 in small businesses should know the nuts and bolts of human resource management.

A BRIEF HISTORY OF HRM

HRM has changed dramatically over time and has assumed an increasingly strategic
role. The demands on HR staff and expectations regarding their role have evolved as
HRM has changed. HR practices have been shaped by society’s prevailing beliefs and
attitudes about workers and their rights, which have evolved in three stages.

Scientific Management: Concern for Production

scientific management The Frederick Taylor was the driving force behind scientific management, the process of
process of “scientifically” analyzing “scientifically” analyzing manufacturing processes, reducing production costs, and com-
manufacturing processes, reducing
production costs, and compensating pensating employees based on their performance.11 As a result, management practices
employees based on their perform- in the late 1800s and early 1900s emphasized task simplification and performance-based
ance levels. pay. Such incentives were expected to lead to higher wages for workers, increased profits
4 PART 1 Human Resources Management in Perspective

for the organization, and workplace harmony. Taylor’s views were not accepted by all
management theorists. For example, Mary Parker Follett, a writer ahead of her time,
advocated the use of self-management, cross-functional cooperation, empowerment,
and managers as leaders, not dictators.12

The Human Resources Movement: Concern

for People and Productivity
human resources movement HRM is currently based on the theoretical assumptions of the human resources
A management philosophy focusing movement. Arriving at this joint focus on people and productivity involved four
on concern for people and
productivity. evolutionary phases.13

Phase 1
In the early 1900s, HRM—or personnel administration, as it was then called—played
a very minor or non-existent role. During this era, personnel administrators assumed
responsibility for hiring and firing (a duty formerly looked after by first-line super-
visors), ran the payroll department, and administered benefits. Their job consisted
largely of ensuring that procedures were followed.

Phase 2
As the scientific management movement gained momentum, operational efficiency increased
but wage increases did not keep up, causing workers to distrust management. The
resulting increase in unionization led to personnel departments serving as the primary
contact for union representatives. Following the depression of the 1930s, various pieces
of legislation were enacted, including a minimum wage act, an unemployment insur-
ance program, and protection of workers’ right to belong to unions. Legal compliance
was subsequently added to the responsibilities of personnel managers. During the 1940s
and 1950s, personnel managers were also involved in dealing with the impact of the
human relations movement. Orientation, performance appraisal, and employee relations
responsibilities were added to their job.

Phase 3
The third major phase in personnel management was a direct result of government
legislation passed during the 1960s, 1970s, and 1980s that affected employees’ human
rights, wages and benefits, working conditions, health and safety, and established penal-
ties for failure to meet them. The role of personnel departments expanded dramatically.
They continued to provide expertise in such areas as compensation, recruitment, and
training, but in an expanded capacity.
Technological advances resulted in outsourcing much of the operational HR activ-
outsourcing The practice of ities. Outsourcing involves contracting with outside vendors to handle specified busi-
contracting with outside vendors to ness functions on a permanent basis. Although using outside experts to provide employee
handle specified business functions
on a permanent basis. counselling and payroll services has been common for many years, the outsourcing of
other specific HR functions, including pension and benefits administration, recruitment,
management development, and training, has become increasingly common.14
For example, Air Canada, CIBC, BMO Financial Group, Hewlett-Packard Canada,
IBM Canada, Calgary Health, and TELUS have all outsourced part or all of their
administrative HR functions. During the latter part of this era, the term “human
resources management” emerged. This change represented a shift in emphasis—from
maintenance and administration to corporate contribution, proactive management, and
initiation of change.15
 CHAPTER 1 The Strategic Role of Human Resources Management 5

Phase 4
The fourth phase of HRM is the current phase, where the role of HR departments has
evolved to that of helping their organization achieve its strategic objectives.16 HR activ-
ities have become ubiquitous, where not only the HR department but also every line
manager has responsibilities related to employees as they move through the stages of the
human-capital life cycle: selection and assimilation into the organization, development
of capabilities while working in the organization, and transition out of the organiza-
tion. Figure 1.2 highlights core job requirements that are found in non-HR roles that
were traditionally limited to the HR department, thus providing further evidence for
the permeation of HR skills throughout the organization. Thus, to succeed in their
respective roles all potential managers must be aware of the basics of HR.
HR professionals often serve as subject-matter experts or in-house consultants to
HR Competency line managers, offering advice on HR-related matters, formulating HR policies and
20500 procedures, and providing a wide range of HR services.

FIGURE 1.2 Traditional HR Responsibilities in Non-HR Roles

Chief Executives
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Information Technology Project Managers

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General and Operational Managers

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First-Line Supervisors of Police and Detectives

š LQIRUPSHUVRQQHORIFKDQJHVLQUHJXODWLRQVDQGSROLFLHVLPSOLFDWLRQVRIQHZRU
DPHQGHGODZVDQGQHZWHFKQLTXHVRISROLFHZRUN
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Chefs and Head Cooks

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š GHWHUPLQHSURGXFWLRQVFKHGXOHVDQGVWDIIUHTXLUHPHQWVQHFHVVDU\WRHQVXUHWLPHO\
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6 PART 1 Human Resources Management in Perspective

Operational and Strategic Aspects of Human

Resource Management
All managers are, in a sense, human resource managers, because they all get involved
in recruiting, interviewing, selecting, and training their employees. Yet most firms also
have a human resource department with its own top manager. How do the duties of this
human resource manager and department relate to the human resource duties of sales
and production and other managers? Answering this requires a short definition of line
authority The right to make versus staff authority. Authority is the right to make decisions, to direct the work of
decisions, direct others’ work, and others, and to give orders. Managers usually distinguish between line authority and
give orders.
staff authority.
line authority The authority ex- In organizations, having what managers call line authority traditionally gives
erted by an HR manager by directing managers the right to issue orders to other managers or employees. Line authority there-
the activities of the people in his or
her own business unit, department, fore creates a superior (order giver)–subordinate (order receiver) relationship. When the
or service area. Vice-President of sales tells his or her sales director to “get the sales presentation ready
by Tuesday,” he or she are exercising line authority. Staff authority gives a manager
staff authority Staff authority gives
the manager the right (authority) to the right to advise other managers or employees. It creates an advisory relationship.
advise other managers or employees. When the human resource manager suggests that the plant manager use a particular
selection test, he or she is exercising staff authority.
line manager A manager who
is authorized to direct the work of On the organization chart, managers with line authority are line managers.
subordinates and is responsible Those with staff (advisory) authority are staff managers. In popular usage, people
for accomplishing the organization’s tend to associate line managers with managing departments (like sales or production)
tasks.
that are crucial for the company’s survival. Staff managers generally run departments
staff manager A manager who that are advisory or supportive (like purchasing and human resource management).
assists and advises line managers. Human resource managers are usually staff managers. They assist and advise line man-
agers in areas like recruiting, hiring, and compensation.
In small organizations, line managers may carry out all these personnel tasks
unassisted. But as the organization grows, line managers need the assistance, specialized
knowledge, and advice of a separate human resource staff. The human resource depart-
ment provides this specialized assistance.

Human Resource Manager’s Duties

A recent national survey of HR professionals identified five critical pieces of knowledge
EVIDENCE-BASED HR required by HR professionals today. Presented in priority order, they are business acu-
men, an understanding of employment law and legislation, talent management, broad
HR Competency HR knowledge, and employee–labour relations knowledge.17
The results align with an overall trend of increased expectations of HR profession-
10600
als, suggesting that there are core capabilities that those responsible for HR activities
(within the HRM department and outside of it) must secure to help deliver value to
the organization.

Credible Activist A core HR contribution is that of being both credible (respected,

listened to, trusted) and active (takes a position, challenges assumptions). Both of these
qualities are required to help an organization optimize the value added from its human
resources.
The activist role is shared with non-HR positions as well. For example, a recent
study conducted by Monster.com found that 73 percent of CEOs spent more than
25 percent of their time on talent-related activities, with three in every five identifying
employee satisfaction/engagement as a key goal for their job, and three of every four
EVIDENCE-BASED HR identifying retention of high-performing employees as one of their goals.18
 CHAPTER 1 The Strategic Role of Human Resources Management 7

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P I A
PERSONAL INVENTORY ASSESSMENT

Learn About Yourself Culture and Change Steward The ability to appreciate, help shape, and articulate an
Leading Positive Change
organization’s corporate culture includes understanding, guiding, and reacting to both
internal and external stakeholder expectations. HR staff has a responsibility to shape
and support a culture of change as well as develop programs, strategies, or projects to
P I A
embed desired change throughout the organization.
PERSONAL INVENTORY ASSESSMENT
Intense global competition and the need for more responsiveness to environmental
Learn About Yourself changes put a premium on employee engagement, the emotional and intellectual
Effective Empowerment and
Enagagement
involvement of employees in their work, such as intensity, focus, and involvement
in their job and organization. Engaged employees drive desired organizational out-
employee engagement The emo-
comes—they go beyond what is required; understand and share the values and goals
tional and intellectual involvement of the organization; perceive that there are opportunities for growth, development,
of employees in their work, such as and advancement; enjoy collegial relationships with managers and co-workers; trust
intensity, focus, and involvement in
their leaders; and regard the success of the organization as their success.20 According
his or her job and organization.
to an analysis of a Hewitt Associates database (over 4 million employees from almost
1500 companies), there is a strong positive relationship between engagement and
EVIDENCE-BASED HR organizational performance (sales growth and total shareholder return).21

Talent Manager and Organizational Designer As traditional

linear career paths change, the importance of an HR professional’s
ability to effectively manage human resources has become more
critical as employees enter, exit, or move up, down, or across the
organization. In this vein, HR specialists must embed theory, re-
search, and practice into the processes, policies, and structures of
an organization.
HR professionals and line managers play a pivotal role in lowering
cartoonresource/Fotolia

labour costs, the single largest operating expense in many organiz-

ations, particularly in the service sector. Doing so might involve
introducing strategies to reduce turnover, absenteeism, and the rate
of incidence of occupational illnesses and injuries. It could also
mean adopting more effective recruitment, selection, and training
8 PART 1 Human Resources Management in Perspective

programs. At one international tire manufacturing firm, adopting a behaviour-based inter-

view strategy as the basis for selection of entry-level engineers resulted in savings of $500
000 in three years. These savings were due to lower turnover, lower training costs, and
improved capabilities of the engineering staff because of a better fit.22

Strategy Architect HR professionals significantly contribute to strategy by inte-

grating internal stakeholder and external stakeholder expectations. Through identify-
ing, forecasting, and facilitating organizational responses to an ever-changing internal
workforce and often volatile external pressures, HR plays an active role in the estab-
lishment and execution of overall strategy.
strategy The company’s plan Traditionally, strategy—the company’s plan for how it will balance its internal
for how it will balance its internal strengths and weaknesses with external opportunities and threats to maintain a com-
strengths and weaknesses with
external opportunities and threats to petitive advantage—was formulated without HR input. But today HR professionals
maintain a competitive advantage. are increasingly involved in both formulating and implementing organizational strategy.
A survey of over 1100 corporate managers in Canada found that three-quarters of them
strongly believe that the HR function contributes significantly to the overall success of
EVIDENCE-BASED HR their company and view having an HR professional on staff as a strategic advantage.23
Operational Executor Leading HR researcher Brian Becker says, “It isn’t the content
of the strategy that differentiates the winners and losers, it is the ability to execute.”24
change agents Specialists who HR specialists are expected to be change agents who lead the organization and
lead the organization and its employ- its employees through organizational change. Making the enterprise more responsive
ees through organizational change.
to product or service innovations and technological change is the objective of many
management strategies. Flattening the pyramid, empowering employees, and organiz-
P I A ing around teams are ways in which HRM can help an organization respond quickly to
PERSONAL INVENTORY ASSESSMENT
its customers’ needs and competitors’ challenges.
Policy drafting, adaption, and implementation, as well as employees’ administrative
Learn About Yourself needs, were traditional roles that HR fulfilled. In recent years the efficiency in dealing with
Comfort with Change Scale
operational issues has significantly improved through the use of technology, shared servi-
ces, or outsourcing. However, much of the expertise in operational aspects of employee-
related policies remains largely within the HR professional’s realm of responsibility.
Business Ally Organizational goal setting and development of business objectives is
highly dependent on external opportunities or threats. HR professionals, together with
environmental scanning other organizational managers, play a role in what strategic planners call environmental
Identifying and analyzing external scanning, which involves identifying and analyzing external opportunities and threats
opportunities and threats that may be
crucial to the organization’s success. that may be crucial to the organization’s success. These managers can also supply com-
petitive intelligence that may be useful as the company formulates its strategic plans.
Details regarding a successful incentive plan being used by a competitor, impending
labour shortages, and information about pending legislative changes are examples.
HR professionals can also add value to the strategy formulation process by supply-
ing information regarding the company’s internal strengths and weaknesses, particularly
as they relate to the organization’s workforce. HR professionals not only understand
the value and social context of the business, but they are also increasingly relied on to
determine how an organization should be structured and how work can be integrated
to ensure financial success.

REORGANIZING THE HRM FUNCTION

The evolution of HR is far from done. HR’s transformation has been underway for
several years, but progress has been somewhat inconsistent because of lack of senior
management support and the fact that many non-HR managers still view HR as a cost
 CHAPTER 1 The Strategic Role of Human Resources Management 9

start at the executive level (execu- force with an increasing use of

tives develop the mission and vision contingent workers. The issues
academic viewpoint that essentially drive the organiza- of what this means for retention,
tional strategy), but all stakeholders information security, intellectual
(employees, managers, specialists) property, and the impact on the
facilitate the execution of that vision or labour force composition requires
mission. We rely on people to express consideration.
the values required to meet the goals IV. Intrepreneurship: Innovation within
and objectives of the organization, the organization requires an explor-
which involves alignment of culture, ation of what kinds of infrastructure
incentives, process, and practices
Dr. Rick Hackett

we need in place to support new

that often permeate through HR. information and innovation.
2. What are some of the hot topics being 3. Why should those who manage human
researched in the world of HRM now, resources in an organization use aca-
which existing and future managers demic articles in peer-reviewed jour-
Identification: Dr. Rick Hackett,
should know about? nals to inform their decisions?
Professor and Canadian Research Chair
in Organizational Behaviour and Human I. Data Analytics: In recent years Pressing demands of the day-to-day
Performance, and Fellow of Canadian there has been a lot of discussion job requirements make it hard for
Psychological Association of big data, specifically about practitioners to manage information
how we can harness the volume overload. Instead, researchers should
Affiliation: DeGroote School of Business, of data accessible through HR work with media teams at their re-
McMaster University systems. Big data in HR changes search centres (e.g., universities,
Focus: Executive/managerial assessment, in real time, it’s dynamic, with government agencies) or develop in-
leadership, HR recruitment, testing, constantly changing algorithms. dustry-oriented papers to communi-
selection, work attitudes, absenteeism, II. Technology for Performance cate information in a meaningful way
and performance assessment. Management: This is linked with outside of the research community.
data analytics, but addresses Recent research grant applications
1. In your expert opinion, who is respon-
how we harness technology to have started asking about plans for
sible for managing the added value
make HR more effective. For ex- research dissemination, but we can
associated with human resources ample, HRIS requires packages also build in incentive systems to
(employees) in an organization? tailored to the needs of special- recognize research communicated in
My one-word answer: Everyone. ized workers. practitioner forums.
Responsibility for managing em- III. Contingent Workforce: Organiz- Source: Reprinted by permission from Dr. Rick
ployees in an organization might ations have a smaller core work- Hackett.

centre. Many HR professionals need to acquire more broad-based business knowledge

and skill sets to be considered and respected as equal business partners by other exec-
utives in the company.25 In a few organizations HR remains locked in an operational
mode, processing forms and requests, administering compensation and benefits, man-
aging policies and programs, and overseeing hiring and training.26 Many HR experts
(industry and academic) realize the changing the face of HR. Dr. Rick Hackett’s per-
spectives of the profession and hot topics for the future are highlighted in the Expert
Opinion box above.
Many employers are changing how they organize their human resource functions.
For one thing, the traditional human resource organization tends to divide HR activities
into separate “silos” such as recruitment, training, and employee relations for the whole
company. IBM split its 330 000 employees into three segments for HR purposes: exec-
utive and technical employees, managers, and rank and file employees. Separate human
resource management teams (consisting of recruitment, training, and pay specialists, for
instance) focus on each employee segment. This helps to ensure that the employees in
each segment get the specialized testing, training, and rewards they require.27
10 PART 1 Human Resources Management in Perspective

There are other configurations as well.28 For example, some employers create trans-
actional HR teams. These teams provide specialized support in day-to-day HR activities (such
as changing benefits plans), usually through centralized call centres and through outside
vendors (such as benefits advisors). Specialized corporate HR teams assist top management in
top-level issues such as developing the personnel aspects of the company’s long-term stra-
tegic plan. Embedded HR teams have HR generalists (also known as “relationship managers”
or “HR business partners”) assigned to functional departments like sales and production.
They provide the selection and other assistance the departments need. Centres of expertise are
HR Competency like specialized HR consulting firms within the company. For example, one might provide
10300 specialized advice in organizational change to the company’s department managers.

Evidence-Based Human Resource Management

evidence-based HRM use of A major contribution of HRM is making decisions based on evidence-based HRM.
data, facts, analytics, scientific rigor, This is the use of data, facts, analytics, scientific rigour, critical evaluation, and critically
critical evaluation, and critically
evaluated research/case studies to evaluated research/case studies to support human resource management proposals, deci-
support human resource manage- sions, practices, and conclusions.29 Put simply, evidence-based human resource manage-
ment proposals, decisions, practices, ment means using the best-available evidence in making decisions about the human
and conclusions.
resource management practices you are focusing on.30 The evidence may come from
actual measurements (such as, how did the trainees like this program?). It may come from
existing data (such as, what happened to company profits after we installed this training
program?). Or, it may come from published research studies (such as, what does the research
literature conclude about the best way to ensure that trainees remember what they learn?).
Throughout this book, we will show you how managers can use evidence to make better
HR Competency human resource management decisions, by highlighting areas of research that are instru-
20600 mental to the HRM realm. This is identified in the margins where needed.

Measuring the Value of HR: Metrics

Today’s HR professionals need to be able to measure the value and impact of their organ-
metrics Statistics used to measure ization’s human capital and HRM practices. The use of various metrics, or statistics, to
activities and results. measure the activities and results of HR is now quite common. Traditional operational
measures focused on the amount of activity and the costs of the HR function (such as
number of job candidates interviewed per month, cost per hire, and so on), but today’s
measures need to reflect the quality of people and the effectiveness of HRM initiatives
that build workforce capability. These new measures provide critical information that
can be linked to organizational outcomes like productivity, product or service quality,
sales, market share, and profits. For example, the percentage of first-choice job candidates
accepting an offer to hire indicates the strength of the organization’s employment brand
EVIDENCE-BASED HR in the marketplace and directly affects the quality of the workforce.31
balanced scorecard A meas- Many organizations are using the balanced scorecard system that includes
urement system that translates measures of the impact of HRM on organizational outcomes. The balanced scorecard
an organization’s strategy into a
comprehensive set of performance approach translates an organization’s strategy into a comprehensive set of performance
measures. measures. It includes financial measures that tell the results of actions already taken.
It complements the financial measures with operational measures of organizational,
business unit, or department success that will drive future performance. It balances
long-term and short-term actions and measures of success relating to financial results,
customers, internal business processes, and human capital management.32 For example,
one measure relating to HRM is the percentage of senior management positions with
fully job-ready successors ready to move up.
 CHAPTER 1 The Strategic Role of Human Resources Management 11

GROWING PROFESSIONALISM IN HRM

Today, HR practitioners must be professionals in terms of both performance and
qualifications.33 Every profession has several characteristics: (1) a common body of know-
ledge; (2) benchmarked performance standards; (3) a representative professional association;
(4) an external perception as a profession; (5) a code of ethics; (6) required training cre-
dentials for entry and career mobility; (7) an ongoing need for skill development; and (8) a
need to ensure professional competence is maintained and put to socially responsible uses.
The Canadian Council of Human Resources Associations (CCHRA) is a national/
certification Recognition for federal-level organization with over 40 000 members that manages certification for
having met certain professional human resource professionals. The CCHRA is a national body through which all prov-
standards.
incial HR associations are affiliated (certification is administered through provincial HR
associations), and is in turn a member of the World Federation of People Management
Associations (WFPMA). In addition, there is an International Personnel Management
HR Competency Association of Canada (IPMA-C), which is a national association for public-sector and
20500 quasi-public-sector HR professionals.
Similar to other professional designations, such as Chartered Accountant (CA) and
Professional Engineer (P.Eng.), there are three different levels of certification in human
Canadian Council of Human
Resources Associations resources in Canada: Level 1—Certified Human Resource Professional (CHRP),
www.chrp.ca Level 2—Certified Human Resource Leader (CHRL), and Level 3—Certified Human
Resource Executive (CHRE) (See Figure 1.3). This three-level structure of certification
World Federation of People
Management Associations is relatively new (2015) and replaces a two-level certification model. The CCHRA gov-
www.wfpma.com erns provincial HR associations (which manage these certifications) to ensure national
consistency of the certifications. The Expert Opinion box on the next page highlights
the professionalization of HR, from the perspective of the vice-president of regulatory
affairs at the Human Resources Professionals Association (HRPA).
The old model evaluated expertise based on 187 required professional capabilities
(called RPCs), while the new model evaluates expertise in nine different function
areas (see Figure 1.4 for a complete list) plus five enabling competencies (Strategic
and Systems Thinking, Professional and Ethical Practice, Critical Problem-Solving and
HR Competency Analytical Decision Making, Change Management and Cultural Transformation, and
10300 Communication, Conflict Resolution, and Relationship Management).

FIGURE 1.3 HR Professional Certifications

CHRP CHRL CHRE

Level I Level II Level III

Certified HR Certified HR Certified HR

Professional Leader Executive

Entry Level Professional Executive

Designation Designation Designation

Source: Based on HRPA’s CHRP Designations, www.hrdesignations.ca.

12 PART 1 Human Resources Management in Perspective

Work done by it must be suffi- 3. What are the challenges HR pro-

ciently important to society, re- fessionals need to be aware of and
industry viewpoint quire advanced knowledge to do how can we overcome these weak-
it well, and have perceived risk nesses?
or consequences to the organiz-
Internally, we are not as disciplined
ation or stakeholders when indi-
as we need to be, and, externally, we
viduals in the profession do not
haven’t convinced others (e.g., exec-
have the required competencies.
utives) that there is a unique body
II. The professional has to act as of knowledge required to succeed
part of a profession, which in- in this profession. This is not a chal-
volves both developing the in- lenge unique to the HR profession,
stitutions and identities of a
Dr. Claude Balthazard

but we can overcome this by having

profession, as well as convincing an emphasis on a strong academic
the public that this is the vase. foundation of knowledge.
This is an iterative process. We don’t want to trade experi-
2. What are the benefits of professional- ence for a critical, holistic, and
ization at an individual level? analytical understanding of the
Identification: Claude Balthazard (Ph.D., HRM realm. In engineering or law,
There are self-serving motivations,
C.Psych., CHRP), Vice-President of for example, one cannot become a
as well as self-actualization benefits.
Regulatory Affairs at the Human Resour- professional based on experience
For the self-serving motivations, there
ces Professionals Association (HRPA) alone. The fact that the old process
is evidence that earning potential in-
(last updated in 2001) had a sin-
Focus: HRPA’s Privacy Officer, plus creases, career trajectories change
gle level for certification was also
ensuring registration and certification or accelerate, and perceived status
problematic. The recent changes
processes at HRPA meet regulatory and (self) increases with professionaliza-
with three levels of certification help
technical standards tion. From a more self-actualization
reflect the full breadth and scope
perspective, people want to maxi-
1. What do you consider key elements to of HR’s contribution to an organiza-
mize their contributions to society
the professionalization of a discipline? tion and our society.
and an organization through applying
I. An occupation has to have the a higher level of professionalism or Source: Reprinted by permission from Claude
potential to be a true profession. expertise. Balthazard.

FIGURE 1.4 HR Competency Model: Nine Functional Areas

1. Workforce Planning &

Talent Management
Organizational 2. Labour & Employee
Relations
3. Total Rewards

4. Professional Practices
5. Organizational
Team based Effectiveness
6. Labour and Employee
Relations

7. Learning & Development

8. Health, Wellness, & Safe
Individual Workplace
9. HR Metrics, Reporting, &
Financial Management

Source: Based on HRPA’s Competency Framework, www.hrdesignations.ca.

 CHAPTER 1 The Strategic Role of Human Resources Management 13

TABLE 1.1 Median Pay for All HR Titles: Comparison by Major Cities
Median Pay without Median Pay with Financial Difference
City and Province CHRP ($,000) CHRP ($,000) (as a % of non-CHRP salary)

9DQFRXYHU%&   

&DOJDU\$%   
:LQQLSHJ0%   
7RURQWR21   
0RQWUHDO4&   
Source: “Fuel for HR Careers—The 2013 Market Value of CHRP Certification.” PayScale. Retrieved from http://www.hrpa.ca/documents/chrp_2013_
infographic_lg.pdf, Human Resources Management Association.

Overall, it appears that the labour market rewards professionalism and designa-
tions (including, but not limited to the CHRP designation). Information regard-
ing differences in pay for CHRP and non-CHRP HR jobs in Canada is provided
in Table 1.1.
Other important associations for HR specialists include the Canadian Industrial
Relations Association; WorldatWork, for compensation and rewards issues; health
and safety associations, such as the Industrial Accident Prevention Association, the
Construction Safety Association, and Safe Communities Canada; and the Canadian
Society for Training and Development.
In addition to the international- and national-level broad HR designations, a ser-
ies of more specialized or specific professional designations in Canada allows those
who may be interested in specialized areas to gain recognition for a deeper level of
subject-matter expertise, as per Table 1.2. The Association of Professional Recruiters
offers a Registered Professional Recruiter designation (RPR). The Board of Canadian
Registered Safety Professionals offers a Canadian Registered Safety Professional
designation (CRSP). The Canadian Management Professional Association offers
a Canadian Management Professional designation (CMP). The Canadian Payroll
Association offers the Payroll Compliance Practitioner (PCP) and Certified Payroll
Manager (CPM) designations. The National Institute of Disability Management and
Research offers the Certified Return to Work Co-ordinator (CRTWC) and Certified
Disability Management Professional (CDMP) designations.34 This list is not exhaust-
HR Competency ive, but it does demonstrate the professionalism and recognition of certification in the
10300 HR discipline.

Simulate on MyManagementLab Ethics

Management and Ethics
The professionalization of HRM has created the need for a uniform code of ethics,
HR Competency as agreement to abide by the code of ethics is one of the requirements of maintaining
professional status. Since what is ethical or unethical is generally open to debate (except
20200
in a few very clear-cut cases such as wilful misrepresentation), most codes do not tell
employees what they should do. Rather, they provide a guide to help employees dis-
P I A cover the best course of action by themselves.35 Increasingly, HR departments are being
PERSONAL INVENTORY ASSESSMENT
given a greater role in providing ethics training and monitoring to ensure compliance
with the code of ethics. Some organizations have such a commitment to ethics that
Learn About Yourself
they have a full-time ethics officer. On the other hand, a 2008 survey of Ontario HR
Ethical Leadership Assessment
professionals found that 78.2 percent had been coerced into doing something morally
or legally ambiguous at least once in their careers.36
14 PART 1 Human Resources Management in Perspective

TABLE 1.2 Professional HR Designations in Canada (as of 2006)

Designation Holders
Designation in Canada

&HUWLILHG+XPDQ5HVRXUFHV3URIHVVLRQDO &+53 

*URXS%HQHILWV$VVRFLDWH *%$ 
5HJLVWHUHG3URIHVVLRQDO5HFUXLWHU 535 
&HUWLILHG3D\UROO0DQDJHU &30 
&HUWLILHG(PSOR\HH%HQHILWV6SHFLDOLVW &(%6 
3D\UROO&RPSOLDQFH3UDFWLWLRQHU 3&3 
&HUWLILHG&RPSHQVDWLRQ3URIHVVLRQDO &&3 
5HWLUHPHQW3ODQV$VVRFLDWH 53$ 
&DQDGLDQ0DQDJHPHQW3URIHVVLRQDO &03 
,QWHUQDWLRQDO3HUVRQQHO0DQDJHPHQW$VVRFLDWLRQ 
,30$ bş&HUWLILHG3UDFWLWLRQHU
5HJLVWHUHG$VVHVVPHQW6SHFLDOLVW 5$6 
&HUWLILHG7UDLQLQJDQG'HYHORSPHQW3URIHVVLRQDO &7'3 
5HJLVWHUHG3URIHVVLRQDO7UDLQHU 537 
&RPSHQVDWLRQ0DQDJHPHQW6SHFLDOLVW &06 
*OREDO5HPXQHUDWLRQ3URIHVVLRQDO *35 37
6HQLRU3URIHVVLRQDOLQ+5 63+5 37

Source: Reprinted by permission of Canadian HR Reporter. © Copyright Thomson Reuters Canada Ltd.,2009,
Toronto, Ontario

An Ethical Dilemma
The most prevalent ethical issues confronting Canadian
organizations today pertain to security of information,
employee and client privacy, environmental issues, govern-
Can or should an employee reveal information that was dis-
ance, and conflicts of interest.37 The major reasons for the
closed in confidence about a troubled co-worker, and if so,
under what circumstances? failure of ethics programs to achieve the desired results are
lack of effective leadership and inadequate training. Positive
outcomes associated with properly implemented ethics pro-
grams include increased confidence among stakeholders, such as clients, partners, and
employees; greater client/customer and employee loyalty; decreased vulnerability to
EVIDENCE-BASED HR crime; reduced losses due to internal theft; and increased public trust.38
social responsibility The implied, In recent years, the concept of social responsibility has frequently been dis-
enforced, or felt obligation of man- cussed as an important manifestation of ethics. A company that exercises social respons-
agers, acting in their official capaci-
ties, to serve or protect the interests ibility attempts to balance its commitments, not only to its investors but also to its
of groups other than themselves. employees and customers, other businesses, and the community or communities in
which it operates. Mountain Equipment Co-op (MEC) is an example of a company
that considers socially responsible approaches to all aspects of its business—selecting and
designing products, manufacturing MEC-brand products, transporting products and
people, greening operations, engaging employees, equipping members, supporting the
community, driving economic performance, and governing the co-operative. It exam-
ines every aspect of a product’s life cycle from a social responsibility perspective, from
the resources that go into making and shipping it, to the satisfaction of the employees
and the members who take the products home.39
 CHAPTER 1 The Strategic Role of Human Resources Management 15

ENVIRONMENTAL INFLUENCES ON HRM

There are numerous external and internal environmental influences that drive the stra-
tegic focus of HRM. To be effective, all managers, including those with responsibility
for HR, must monitor the environment on an ongoing basis, assess the impact of any
HR Competency changes, and be proactive in responding to such challenges. Table 1.3 illustrates the
10100 major external and internal environmental influences on HRM.

External Environment Influences

Six major external environmental influences on HRM will be discussed: economic
conditions, labour market issues, technology, government, globalization, and environ-
mental concerns.

Economic Conditions
Economic conditions affect supply and demand for products and services, which,
in turn, have a dramatic impact on the number and types of employees required as
well as on an employer’s ability to pay wages and provide benefits. When the econ-
omy is healthy, companies often hire more workers as demand for products and services
increases. Consequently, unemployment rates fall, there is more competition for quali-
fied employees, and training and retention strategies increase in importance. Conversely,
during an economic downturn, some firms reduce pay and benefits to maintain workers’
jobs. Other employers are forced to downsize by offering attractive early retirement and
early leave programs or by laying off or terminating employees. Unemployment rates rise
and employers are often overwhelmed with applicants when vacancies are advertised.
productivity The ratio of an organ- Productivity refers to the ratio of an organization’s outputs (goods and services)
ization’s outputs (goods and services) to its inputs (people, capital, energy, and materials). Canada’s relatively low produc-
to its inputs (people, capital, energy,
and materials). tivity growth rate is of concern because of increasing global competition. To improve

TABLE 1.3 External and Internal Environmental Influences on HRM

External Internal

Economic Conditions:DIIHFWVXSSO\DQG Organizational Culture:YDOXHVEHOLHIVDQG

GHPDQGIRUSURGXFWVLPSDFWLQJTXDQWLW\ QRUPVRIRUJDQL]DWLRQDOPHPEHUV
DQGTXDOLW\RIHPSOR\HHVUHTXLUHGDQGDELOLW\
WRSD\JLYHEHQHILWV
Labour Diversity:SURWHFWHGJURXSV Organizational Climate:WKHDWPRVSKHUHŖV
YLVLEOHHWKQLFPLQRULWLHVZRPHQ$ERULJLQDO LPSDFWRQHPSOR\HHPRWLYDWLRQMRE
GLVDEOHG DQGJHQHUDWLRQDOGLIIHUHQFHV SHUIRUPDQFHDQGSURGXFWLYLW\
WUDGLWLRQDOLVWVEDE\ERRPHUV*HQ;HUV
*HQ<HUV 
Technology:FRQWUROOLQJGDWDDQGSULYDF\ Management Practices:RUJDQL]DWLRQDO
VWUXFWXUHDQGHPSOR\HHHPSRZHUPHQW
Government:DELGLQJE\SURYLQFLDODQG
QDWLRQDOVWDQGDUGV
Globalization:PDQDJLQJWKHZRUNIRUFH
LQDQLQWHQVHK\SHUFRPSHWLWLYHJOREDO
HFRQRP\
Environment: PDQDJLQJVXVWDLQDELOLW\DQG
FRUSRUDWHVRFLDOUHVSRQVLELOLW\
16 PART 1 Human Resources Management in Perspective

productivity, managers must find ways to produce more outputs with current input
primary sector Jobs in agriculture, levels or use fewer resources to maintain current output levels. In most organizations
fishing and trapping, forestry, and
mining. today, productivity improvement is essential for long-term success.
Employment trends in Canada have been experiencing dramatic change. The pri-
secondary sector Jobs in manu- mary sector, which includes agriculture, fishing and trapping, forestry, and min-
facturing and construction.
ing, now represents only 4 percent of jobs. Employment in the secondary sector
tertiary or service sector Jobs (manufacturing and construction) has decreased to 19 percent of jobs. The sector that
in public administration, personal and has grown to represent 77 percent of jobs, dominating the Canadian economy, is the
business services, finance, trade,
public utilities, and transportation/ tertiary or service sector, which includes public administration, personal and
communications. business services, finance, trade, public utilities, and transportation/communications.
Since all jobs in the service sector involve the provision of services by employ-
ees to individual customers, effectively managing and motivating human resources is
critical. Although there are some lesser-skilled jobs (in housekeeping and food servi-
ces, for example), many service-sector jobs demand highly knowledgeable employees.

HR by the Numbers Labour Market Issues

Increasing Workforce Diversity Canada’s workforce is among
Workforce Diversity in Canada the most diverse in the world. Diversity refers to the attributes
that humans are likely to use to tell themselves, “that person
Visible and Ethnic Minorities
is different from me.” These attributes include demographic
200 the number of different ethnic origins reported in
2011 in Canada41 factors (such as race, gender, and age) as well as values and
cultural norms.40 The HR by the Numbers box above dem-
6.3 m the approximate number of people who identified
onstrates the diversity in Canada’s workforce and focuses on the
themselves as a visible minority in 201142
four protected groups: visible and ethnic minorities, women,
Women Aboriginals, and persons with disabilities.

31% thethe primary

percentage of women in Canada who are now
43
breadwinner in dual-earner couples Generational Issues Another aspect of diversity is gen-

11.8 m ages of 15 to 65 in Canada

the number of women between the working erational differences. There are four generations in the
44
workplace, and nearly half of all Canadians say they have ex-
perienced a clash with workers older or younger than them-
Aboriginals selves. On the other hand, about one-quarter of workers say
18.2% theare youths
percentage of Aboriginals in Canada who
45 they don’t notice age differences, and another one-quarter
between the ages of 15 to 24
think this situation provides an excellent learning oppor-
20.1% between 2006 to 2011
the increase in the Aboriginal population tunity. Table 1.4 outlines attitudes, key characteristics, and
46
expectations of the four generations.
Persons with Disabilities
Education Approximately 54 percent of Canada’s population
50% the higher unemployment rate experienced by
disabled persons compared to the able-bodied has some post-secondary education (trades, college, or univer-
population47 sity).49 Given the higher expectations of the better-educated
labour force, managers are expected to ensure that the talents
17% the lower income experienced by disabled persons
compared to the able-bodied population48 and capabilities of employees are fully utilized and that oppor-
tunities are provided for career growth.
Simulate on MyManagementLab On the other hand, a startlingly high proportion of Canadians (26 percent) have
Human Resources & Diversity
only marginal literacy skills, meaning their ability to understand and use printed
and written documents in daily activities to achieve goals and to develop knowledge
Watch on MyManagementLab and potential is limited. A frightening reality is that inadequate reading and writing
CH2MHill: Diversity skills have replaced lack of experience as the major reason for rejecting entry-level
candidates.50 Figure 1.5 provides a recent breakdown of literacy levels in Canada.
Functional illiteracy is exacting a toll not only on individual social and economic
EVIDENCE-BASED HR opportunities, but also on organizations’ accident rates and productivity levels.
 CHAPTER 1 The Strategic Role of Human Resources Management 17

TABLE 1.4 The Four Generations

Traditionalists Baby Boomers Generation X-ers Generation Y-ers
1922–1945 1946–1964 1965–1980 1981–2000

Notes *UHZXSLQDQHUDRI 7KHODUJHVWJURXSLQWKH 7KLVJURXSJUHZ %HJLQQLQJWRHQWHUWKH

KDUGVKLSLQFOXGLQJ ZRUNIRUFH*UHZXSLQD XSDVGLYRUFHUDWHV ZRUNIRUFH([SHFWWR
DZDUDQGWKH*UHDW WLPHRIPDMRURSWLPLVPDQG VN\URFNHWHG)LUVW FKDQJHMREVIUHTXHQWO\
'HSUHVVLRQ FKDQJHDPLGVWWKHPRRQ WHFKQRORJ\OLWHUDWH
ODQGLQJDQGWKHZRPHQŖV JHQHUDWLRQ
PRYHPHQW
Attitudes, š /R\DOW\ š 2SWLPLVP š ,QGHSHQGHQFH š &RQILGHQFH
Values, and š 5HVSHFWIRUDXWKRULW\ š ,QYROYHPHQW š 6HOIUHOLDQFH š 'LYHUVLW\
Expectations š 'HGLFDWLRQ š 7HDPRULHQWHG š 3UDJPDWLVP š &LYLFGXW\
š 6DFULILFH š 3HUVRQDOJURZWKDQG š 6NHSWLFLVP š 2SWLPLVP
š &RQIRUPLW\ JUDWLILFDWLRQ š ,QIRUPDOLW\ š ,PPHGLDWHDFFHVV
š +RQRXU š <RXWKIXOQHVV š %DODQFH WRLQIRUPDWLRQDQG
š 3ULYDF\ š (TXDOLW\ VHUYLFHV
š 6WDELOLW\ š &DUHHUIRFXVHG
š (FRQRPLF
FRQVHUYDWLVP
Key š &RPSOLDQW š 'ULYHQWRVXFFHHG š )OH[LEOHDQG š &ROOHFWLYHDFWLRQ
Characteristics š 'HWDLORULHQWHG š 7HDPSOD\HU DGDSWDEOH š ([SUHVVLYHDQG
š +DUGZRUNLQJ š 5HODWLRQVKLSIRFXVHG š &UHDWLYH WROHUDQWRIGLIIHUHQFHV
š )LVFDOO\IUXJDO š (DJHUWRDGGYDOXH š (QWUHSUHQHXULDO š (DJHUWRDFFHSW
š 7UXVWZRUWK\ š 3ROLWLFDOO\VDYY\LQWKH š 0XOWLWDVNHU FKDOOHQJHV
š 5LVNDYHUVH ZRUNSODFH š 5HVXOWVGULYHQ š ,QQRYDWLYHDQG
š /RQJWHUPIRFXVHG š &RPSHWLWLYH š ,QGLYLGXDOLVWLF FUHDWLYH
Source: Loyalty Unplugged: How to Get, Keep & Grow All Four Generations. Reprinted by permission from Adwoa K Buahene.

FIGURE 1.5 Literary Levels of Canadians (16–64 years old)

Level 1: 14.6% of Canadians

This level represents individuals with very low levels of literacy skills. They
may be unable to follow written instructions at work or determine correct
measurements required for task completion.

Level 2: 27.3% of Canadians

This level includes individuals who can comprehend material that is is simple
and straightforward. While they can read, they generally score poorly on tests
involving reading. They can cope on a non-complex, daily level, but face
difficulty with more complex demands, such as learning new job skills.

Level 3: 38.6% of Canadians

The majority of Canadians are at the level 3 literacy level. This skill level
involves the ability to integrate multiple sources of information, or solve
complex problems.

Level 4 & 5: 19.5% of Canadians

This is the highest literacy level. Individuals at this level have higher-order
information processing skills.

Source: Adapted from The Conference Board of Canada, “All Signs Point to Yes: Literacy’s Impact on
Workplace Health and Safety,” September 2008, p. 4.
18 PART 1 Human Resources Management in Perspective

Non-Standard or Contingent Workers The labour market has undergone major

contingent/non-standard
workers Workers who do not have structural changes with the growth of contingent (or “non-standard”) work-
regular full-time employment status. ers, that is, workers who do not fit the traditional definition of permanent, full-time
employment with the same employer on an indeterminate basis. These non-traditional
workers are often used by companies to provide flexible,
An Ethical Dilemma on-demand labour, without the same guarantees for continued
employment, employee development, or benefits that regular
The maintenance department supervisor has just come to you, full-time employees are given.
the HR manager, voicing concern about the safety of two of The forms of employment involving part-time, fixed-
her reporting employees whom she recently discovered to be term, temporary, home, and standby workers; those who
functionally illiterate. What are your responsibilities to these have more than one job; and the self-employed have become
employees, if any? so significant numerically that they now affect about one-
third of the workforce. More women fall into this category
51
than men. Non-standard work is often poorly paid, offers little or no job security,
and is generally not covered by employment legislation. The HR by the Numbers
box below identifies some core metrics associated with the use of contingent workers
in Canada.

HR by the Numbers Technology

52 From Twitter to Facebook to videoconferencing setups that
Increased Use of Contract Workers
make it seem like everyone is in the same room, there is a
377 readers of HR Reporter and members of HRPA polled wide range of technology available to organizations today.
have seen an increase in the use of contract work- All of this technology can make working in and managing
63% ers in their organization in the last five years a dispersed workforce easier and can enable people to work
identify that contract workers in their company anywhere and everywhere. The workplace of today includes
51.2% receive no benefits at all “hotels, cafes and conference venues, as well as public areas
of lounges and airports.”53 However, it has also brought
23.6% feel company does not have well-defined pro-
cesses in place to manage contract workers new concerns as the line between work and family time has
become blurred.54
Questions concerning data control, accuracy, the right to privacy, and ethics are
at the core of a growing controversy brought about by the new information tech-
nologies. Sophisticated computerized control systems are used to monitor employee
speed, accuracy, and efficiency in some firms. More firms are also monitoring employee
email, voice mail, telephone conversations, and computer usage, and some now mon-
itor employee behaviour using video surveillance.55

Government
Various laws enacted by governments have had and will continue to have a dra-
matic impact on the employer–employee relationship in Canada. One of the factors
that makes employment law in Canada so challenging is that there are 14 different
jurisdictions involved. Each of the ten provinces and three territories has its own
human rights, employment standards, labour relations, health and safety, and workers’
compensation legislation. In addition, about 10 percent of the workforce (includ-
ing employees of the federal government and Crown corporations, chartered banks,
airlines, national railways, and the Canadian Armed Forces) is covered by federal
employment legislation.
Although there is some commonality across jurisdictions, there is also consider-
able variation. Minimum wage, overtime pay requirements, vacation entitlement, and
grounds protected under human rights legislation, for example, vary from one province/
territory to another. Furthermore, some jurisdictions have pay equity and employment
 CHAPTER 1 The Strategic Role of Human Resources Management 19

Hints TO ENSURE LEGAL equity legislation while others do not. This means that companies with employees in
COMPLIANCE more than one jurisdiction have different rules applying to different employees. There
are, however, certain laws that apply to all employers and employees across Canada,
such as employment insurance and the Canada/Quebec Pension Plan.

Globalization
globalization The emergence of a The term globalization refers to the emergence of a single global market for most
single global market for most prod- products and services. This growing integration of the world economy into a single,
ucts and services.
huge marketplace is increasing the intensity of competition and leading most organiza-
tions to expand their operations around the world.56 Firms in other parts of the world
are also seeing human resources as a source of competitive advantage.
There are increasing numbers of multinational corporations—firms that conduct a
large part of their business outside the country in which they are headquartered and that
locate a significant percentage of their physical facilities and human resources in other
countries. For example, Toyota has a large market share in the United States, Europe,
and Africa, and is the market leader in Australia. Toyota has factories all over the world,
manufacturing or assembling vehicles like the Corolla for local markets. Notably, Toyota
has manufacturing or assembly plants in the United States, Japan, Australia, Canada,
Indonesia, Poland, South Africa, Turkey, the United Kingdom, France, and Brazil, and
has recently added plants in Pakistan, India, Argentina, the Czech Republic, Mexico,
Malaysia, Thailand, China, and Venezuela.57
Globalization means that HR professionals need to become familiar with
employment legislation in other countries and need to manage ethical dilemmas
when labour standards are substantially lower than those in Canada. Companies
doing business in sub-Saharan Africa, for example, have to deal with a high death
HR Competency rate among employees with AIDS. Some are paying for antiretroviral drugs to keep
20200 their employees alive.58

Environmental Concerns
Environmental concerns have suddenly (some might say finally) emerged as an issue
for people, particularly the younger generations.59 Sustainability, climate change,
global warming, pollution, carbon footprints, extinction of wildlife species, eco-
system fragility, and other related issues are increasingly important to people around
the world. There is increasing evidence that interest in environmental issues is motiv-
ating the behaviour of employees, and that they are concerned about whether they
work for environmentally responsible companies. Companies like Fairmont Hotels
have made environmental stewardship a priority for almost 20 years. They have found
that developing a reputation as an environmental leader and demonstrating corporate
social responsibility have not only helped them to gain market share, but have also
been a strong employee retention tool.60

Internal Environment Influences

How a firm deals with the three internal environmental influences of organizational
culture, organizational climate, and management practices has a major impact on its
ability to meet its objectives.

organizational culture The core Organizational Culture

values, beliefs, and assumptions that
are widely shared by members of an Organizational culture consists of the core values, beliefs, and assumptions that are
organization. widely shared by members of an organization. Culture is often conveyed through an
 20 PART 1 Human Resources Management in Perspective

HR Competency organization’s mission statement, as well as through stories, myths, symbols, and cere-
monies. It serves a variety of purposes:
10400
t
communicating what the organization “believes in” and “stands for”
P I A t
providing employees with a sense of direction and expected behaviour (norms)
PERSONAL INVENTORY ASSESSMENT
t
shaping employees’ attitudes about themselves, the organization, and their roles

Learn About Yourself

t
creating a sense of identity, orderliness, and consistency
Company Culture Assessment t
fostering employee loyalty and commitment
All managers with HR responsibilities play an important
role in creating and maintaining the type of organizational
culture desired. For example, they may organize recognition
ceremonies for high-performing employees and be involved
in decisions regarding symbols, such as a logo or the design
of new company premises. Having a positive culture has a
BlueSkyImage/Shutterstock

positive impact on employer branding, recruitment, reten-

tion, and productivity.

Organizational Climate
Organizational climate refers to the prevailing atmos-
phere, or “internal weather,” that exists in an organiza-
Employees in fast-food establishments are taught how to provide courte- tion and its impact on employees.61 It can be friendly or
ous, efficient customer service. unfriendly, open or secretive, rigid or flexible, innovative
or stagnant. The major factors influencing the climate are management’s leadership
organizational climate The
prevailing atmosphere that exists in style, HR policies and practices, and the amount and style of organizational communi-
an organization and its impact on cation. The type of climate that exists is generally reflected in the level of employee
employees. motivation, job satisfaction, performance, and productivity. HR professionals play a
empowerment Providing workers key role in helping managers throughout the firm establish and maintain a positive
with the skills and authority to make organizational climate.
decisions that would traditionally be
made by managers.
Management Practices
Management practices have changed considerably over the past decade, with many
P I A HRM implications. For example, the traditional bureaucratic structure with many levels
PERSONAL INVENTORY ASSESSMENT of management is being replaced by flatter organizational forms using cross-functional
teams and improved communication. Since managers have more people reporting to
Learn About Yourself
Personal Empowerment them in flat structures, they cannot supervise their employees as closely and employee
Assessment empowerment has greatly increased.

CHAPTER SUMMARY
1. Human resources management (HRM) refers to the 2. The major stages in the evolution of management think-
management of people in organizations. Strategic ing about workers were (1) personnel administration,
HRM involves linking HRM with strategic goals and which was administrative and task oriented, (2) scientific
objectives to improve business performance. In more management, which focused on production, and (3) the
and more firms, HR professionals are becoming stra- human resources movement, in which HRM provided
tegic partners in strategy formulation and execution. expertise on a wide range of issues in house, while
 CHAPTER 1 The Strategic Role of Human Resources Management 21

task-based work became increasingly outsourced, and (4) separations. The second is the more recent strategic
human resource partnership, in which it was recognized category, where HR is focused on ensuring that the
that organizational success is linked to operational and organization is staffed with the most effective human
strategic management of labour. capital to achieve its strategic goals.
3. Activities of employee management, empower- 5. There are numerous professional designations that
ment, training, and guidance are often shared will boost a career trajectory in human resources. The
between managers in the organization (execu- most basic of these is the Canadian Human Resources
tive and line managers) and HR professionals. Professional (CHRP). However, additional designa-
Therefore, managers, executives, and HR person- tions exist that are important and may be influential
nel are all influential in effective human resources in building expertise and careers in management or
management. human resources management.
4. Human resources activities are now being seen as 6. A number of external factors have an impact on
falling into two categories. The first is the traditional HRM, including economic factors, labour market
operational (administrative) category, where HR hires issues, technology, government, globalization, and
and maintains employees and then manages employee environmental concerns.

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KEY TERMS
authority (p. 6) line authority (p. 6)
Baby Boomers (p. 17) line manager (p. 6)
balanced scorecard (p. 10) metrics (p. 10)
certification (p. 11) organizational climate (p. 20)
change agents (p. 8) organizational culture (p. 19)
contingent/non-standard workers (p. 18) outsourcing (p. 4)
employee engagement (p. 7) primary sector (p. 16)
empowerment (p. 20) productivity (p. 15)
environmental scanning (p. 8) scientific management (p. 3)
evidence-based HRM (p. 10) secondary sector (p. 16)
Generation X-ers (p. 17) social responsibility (p. 14)
Generation Y-ers (p. 17) staff authority (p. 6)
globalization (p. 19) staff manager (p. 6)
human capital (p. 2) strategy (p. 8)
human resources management (HRM) (p. 2) tertiary or service sector (p. 16)
human resources movement (p. 4) Traditionalists (p. 17)