The Strategic Role of Human Resource Management
Human Resource Management (HRM) is the management of people in organizations to drive successful organizational performance and achievement of the organization’s strategic goals. HR professionals must manage the workforce by attracting, retaining, and engaging talent.
Human Capital is the knowledge, education, training, skills, and expertise of an organization’s workforce.
*Effective HR practices are related to better organizational performance.
Human Resource Management Responsibilities
Operational Responsibilities are where HR professionals hire and maintain employees and also manage separations. o Outsourcing is the practice of contracting with outside vendors to handle specified functions on a permanent basis. o These services include: o analyzing jobs o planning future workforce requirements o selecting employees o orienting and training employees o managing compensation and reward plans o communicating with employees (including counseling and disciplining)
Strategic Responsibilities is where HR professionals are focused on ensuring that the organization is staffed with the most effective human capital to achieve its strategic goals. o Strategy – the company’s plan for how it will balance its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage o increasingly, the HR department is being viewed as an equal partner in strategic planning process o HR specialists are expected to be change agents o Role in Formulating Strategy
Environmental Scanning involves identifying and analyzing external opportunities and threats that may be crucial to the organization’s success.
*Details regarding a successful incentive plan being used by a competitor, impending labour shortages, and information about pending legislative changes are examples.
Role in Executing Strategy
Strategy execution is typically the area where HR makes the biggest strategic contribution (i.e. downsizing, flattening the hierarchy, redesigning jobs, etc.)
HR Professionals and line managers have a significant impact on employee turnover, engagement and engagement so it is important that there is employee recognition, developmental programs, and career-oriented performance appraisals.
Measuring the Value of HR: Metrics
Need metrics to measure the effectiveness of HRM procedures by measuring results
Balanced Scorecard is a measurement system that translates an organization’s strategy into a comprehensive set of performance measures.
Environmental Influences on HRM
Must monitor the environment on an ongoing basis, assess the impact of any changes, and be proactive in responding to challenges.
External Environmental Influences
Economic Conditions: affect demand and supply for products and services and in turn has an effect on the numbers and types of employees required as well as a company’s ability to pay for wages or benefits. o Productivity – the ratio of an organization’s output (goods and services) to its inputs (people, capital, energy, and materials) o Must be able to produce more outputs with the same or lesser input levels as productivity rates drop in Canada.
i. Employment Levels ii. Productivity Levels
o o o
iii. Growth of the service sector
Primary sector – agriculture, fishing and trapping, forestry, and mining; represent 4% of jobs
Secondary sector – manufacturing and construction; represent 19% of jobs
Tertiary or service sector – public administrating, personal and business services, finance, trade, public utilities, and transportation/communications; represents 77% of jobs
Workforce Issues o Increasing workforce diversity by age, race, gender, sexual orientation, disabilities, generational and demographic differences as there will be less workers taking over the jobs of the baby boomers; education and functional