CHAPTER 1 - CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT

CHAPTER 1 - CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT

2011 © by Nelson Education Ltd. 1

CHAPTER

1

CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT

Learning Objectives

After you have read this chapter, you should be able to:

Define HR management and identify the seven categories of HR activities.

Discuss the management of human capital in organizations.

Discuss four challenges facing HR today.

Describe how the major roles of HR management are being transformed.

Identify the purposes and uses of HR technology.

Discuss why ethical issues affect HR management.

Explain the key competencies needed by HR professionals and why certification is important.1 2 3 4 5 6 7 NOTE: For Complete File, Download link at the end of this File 1 / 4

2011 © by Nelson Education Ltd. 2

CHAPTER 1: CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT

Chapter Overview

• HR management is the direction of organizational systems to ensure that human talent is used

effectively and efficiently to accomplish organizational goals. HR management activities can be grouped as follows: strategic HR management; equal employment opportunity; staffing; HR development; compensation and benefits; health, safety, and security; and employee and labour relations. All organizations need HR management, but larger ones are more likely to have a specialized HR function.

• There are four types of assets in organizations: physical, financial, intangible, and human. Human

assets should be seen as human capital, which is the collective value of the capabilities, knowledge, skills, life experiences, and motivation of an organizational workforce. A core competency is a unique capability that creates high value and differentiates an organization from its competition.

• Four major HR challenges faced by managers and organizations now and in the future are the

globalization of business, economic and technological changes, workforce demographics and diversity, and organizational cost pressures and restructuring. Some important considerations relate to the costs of international outsourcing, global security and terrorism, occupational shifts and quality concerns, growth in contingent workers, an aging workforce that will result in a shortage of workers, and the competitive pressures that have resulted in the closing of facilities and the resultant layoffs of workers.

• HR management must fulfill three roles: (1) administrative, (2) operational and employee advocate,

and (3) strategic. HR roles are being transformed by technology, outsourcing, and the need for HR to become a more strategic contributor. Some major issues for HR stems from the increase in outsourcing of human resources.HR must play an active role in understanding the business, while at the same time acting as an employee advocate. One of the major challenges for HR relates to its role as a strategic business partner. HR can increase its strategic role of a partner as it continues to collaborate with other managers about strategic business issues.

• HR technology in the form of Human Resources Management Systems (HRMS) helps improve

administrative efficiencies and expand information for strategic HR planning. An HRMS can be designed and implemented in several ways. An HRMS serves two major purposes in an organization: administrative and operational efficiency and effectiveness. The increased use of HRMS by HR departments has allowed HR to transform its role from a purely administrative role to one that can focus more on business strategy and the alignment of HR strategies to help the organization better meet its goals of profitability.

• Ethical behaviour is crucial in HR management, and HR professionals regularly face a number of

HR ethical issues. Particular issues can arise with compensation, employee relations, staffing, and equal employment. Corporate scandals have shone the light on the importance of dealing with ethics, and HR plays a key role in ensuring ethical behaviour in an organization. Key to ensuring ethical 2 / 4

CHAPTER 1 - CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT

2011 © by Nelson Education Ltd. 3 behaviour is to have a written code of conduct, training for all employees, mechanisms to deal with issues or questions, and confidential reporting.

• The five areas of competencies needed by HR professionals are strategic contribution, business

knowledge, HR delivery, HR technology, and personal credibility. Current knowledge about HR management is required for professionals in the HR career field, and professional certification has grown in importance for HR generalists and specialists. Human resources is recognized as a professional field, and therefore, an accredited designation known as the CHRP (Certified Human Resources Professional) exists in Canada. The national certification standards are both knowledge- and capabilities-based.

This chapter provides an overview of Human Resource Management by describing seven

important considerations:

• Nature of HR Management,
• Management of Human Capital in Organizations,
• HR Management Challenges,
• HR Management Roles,
• HR Technology,
• Ethics and HR Management, and
• HR Management Competencies and Careers.

A conceptual model is presented in Figure 1-1 that shows that HR management is composed of seven interlinked activities that are significantly impacted by external forces (legal, political, economic, social, cultural, technological, and global). These seven activities are identified and briefly described: (1) strategic HR management, (2) equal employment opportunity, (3) staffing, (4) talent management, (5) total rewards, (6) health, safety, and security, and (7) employee and labour relations.

Chapter Outline and Instructor Notes

Suggested Content Coverage

For many organizations, talented employees are the cornerstone of a competitive advantage.Designing systems to effectively manage people with their needs, expectations, quirks, legal rights, and high potential is a challenge. Human Resource Management focuses on doing just that.

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HR Headline: What Do HR Managers Do?

What HR managers actually do on a weekly basis varies significantly from what you might see or read in the media or what is reported in academic sources. Also, what one HR manager does might vary significantly from another HR manager depending on the industry, the corporate structure, the needs of the organization, and individual competencies. The text has a partial list of what one HR manager in a 700-employee firm dealt with during one week.

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CHAPTER 1 - CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT

2011 © by Nelson Education Ltd. 4 The list illustrates the variety and the range of activities that an HR manager might be involved in over a short time frame.

Questions for Discussion:

• Which of the listed activities are examples of the strategic role for HR? Which are

examples of the operational or employee advocate role for HR?

• How many of these listed activities deal with different functional areas of HR such as

EEO, staffing, HR development (training), compensation and benefits, health/safety/security, and employee/labour relations? Are some areas represented more than others? Why do you think this might be true?

• Do you think this list is typical of an HR manager in a 700-employee firm? Why or why

not? What would be some factors that could change the nature of the activities that an HR manager might do in a 700-employee firm during one week?

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1.1 NATURE OF HUMAN RESOURCE MANAGEMENT

Human Resource (HR) management is defined as “the policies, practices and systems that influence employee’s behaviour, attitude and performance in the attainment of organizational goals.”

• HR Activities - Figure 1-1 – HR Management Activities illustrates the elements of the

external environment including technological, global, environmental, cultural/geographic, political, social, legal, and economic. It is within this context that HR responsibilities are carried out and the seven sets of HR activities are influenced.

Suggested Group Activity: This exercise will help students to get to know others in the class, begin the process of participating in classroom discussions, and help to introduce the chapter topic.

Instructions:

• Ask each student to introduce themselves to the person sitting next to them, and spend about

one minute getting to know each other.

• Each person should then reflect on the organization where they are currently employed, or

about a recent place of employment. Each student should then examine Figure 1-1 and the HR categories shown, along with the activities listed under each category. Each student should then select one category and explain to their partner whether the HR activities listed there were performed in their workplace, and how such activities may have impacted them personally on the job. In addition, have them discuss how such activities might have influenced employee’s behaviour, attitude and performance in that particular organization.

• Next each student should consider if certain HR activities were lacking in any way and how that

may have impacted their enjoyment or lack of enjoyment on the job, or their personal development in that workplace. (An optional next step is to have each pair introduce themselves to another pair and then compare notes on their initial discussions. Are their similarities?)

• Debrief, asking several groups for examples in various categories. Emphasize the importance of
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