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SIXTH CANADIAN EDITION

STEWART BELCOURT PEACOCK BOHLANDER SNELL

essentials of Managing

Human Resources 9 780176 570286

ISBN-10: 0-17-657028-4 ISBN-13: 978-0-17-657028-6

www.nelson.com

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SIXTH CANADIAN EDITION

ESSENTIALS OF MANAGING

HUMAN RESOURCES

EILEEN B. STEWART British Columbia Institute of Technology

MONICA BELCOURT York University

MELANIE PEACOCK Mount Royal University

GEORGE W. BOHLANDER Arizona State University

SCOTT A. SNELL University of Virgina

BK-NEL-STEWART_6CE-150330-FM.indd 1 27/01/16 2:14 PM

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Essentials of Managing Human Resources, Sixth Canadian Edition

by Eileen B. Stewart, Monica Belcourt, Melanie Peacock, George W. Bohlander, and Scott A. Snell

VP, Product and Partnership Solutions: Anne Williams

Publisher, Digital and Print Content: Jackie Wood

Executive Marketing Manager: Amanda Henry

Content Development Manager: Toula Di Leo

Photo and Permissions Researcher: Jessie Coffey

Production Project Manager: Jaime Smith

Production Service: Cenveo Publisher Services

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Cover Image: Diana Ong/Superstock/Getty Images

Compositor: Cenveo Publisher Services

COPYRIGHT © 2016, 2014, 2011 by Nelson Education Ltd.

Adapted from Essentials of Managing Human Resources, Fifth Canadian Edition, by Eileen Stewart, Monica Belcourt, Catherine Fitzgerald, George W. Bohlander, and Scott A. Snell, published by Nelson Education Ltd. Copyright ©2014.

Printed and bound in the United States of America 1 2 3 4 18 17 16 15

For more information contact Nelson Education Ltd., 1120 Birchmount Road, Toronto, Ontario, M1K 5G4. Or you can visit our Internet site at http://www.nelson.com

ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transcribed, or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, or information storage and retrieval systems— without the written permission of the publisher.

For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions. Further questions about permissions can be emailed to permissionrequest@cengage.com

Every effort has been made to trace ownership of all copyrighted material and to secure permission from copyright holders. In the event of any question arising as to the use of any material, we will be pleased to make the necessary corrections in future printings.

Library and Archives Canada Cataloguing in Publication

Stewart, Eileen B., 1943-, author Essentials of managing human resources / Eileen B. Stewart, Monica Belcourt, Melanie Peacock, George W. Bohlander, Scott A. Snell. — Sixth Canadian edition.

Includes index. ISBN 978-0-17-657028-6 (paperback)

1. Personnel management— Textbooks. I. Belcourt, Monica, 1946-, author II. Peacock, Melanie, author III. Bohlander, George W., author IV. Snell, Scott, 1958-, author V. Title. VI. Title: Managing human resources.

HF5549.E85 2016 658.3 C2015-906531-3

ISBN-13: 978-0-17-657028-6 ISBN-10: 0-17-657028-4

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To my son, Jason Robertson, his wife, Andrea Mclean, and my wonderful new grandson, Caleb Robertson, who continue to provide encouragement and support, and in memory of my husband Richard Robertson, who still is my inspiration—ES

To my husband, Michael, for making life so interesting—MB

To my darling husband Cam. I love the chapters of our life that we are writing during our journey together—MP

To my wife, Ronnie Bohlander, and to our children, Ryan and Kathryn—GB

To my wife, Marybeth Snell, and to our children, Sara, Jack, and Emily—SS

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Brief Contents

Preface xi Acknowledgments xiv About the Authors xv

PART 1: HRM TODAY 2

1 Exploring Why HRM Matters to All Employees 2 2 Operating Within the Legal Framework 36 3 Creating a Culture of Well-Being 72

PART 2: ATTRACTING AND SELECTING PEOPLE FOR THE ORGANIZATION 106

4 Defining, Analyzing, and Designing the Work 106 5 Planning for, Recruiting, and Selecting the Workforce 132

PART 3: DEVELOPING PEOPLE IN THE ORGANIZATION 172

6 Orienting, Training, and Developing Employees 172 7 Managing Employee Performance 206 8 Rewarding and Recognizing Employees 242

PART 4: RELATING TO EMPLOYEES WITHIN DIVERSE ENVIRONMENTS 280

9 Dealing with Management Rights, Employee Rights, and Discipline 280 10 Understanding Labour Relations and Collective Bargaining 318

PART 5: WORLD PERSPECTIVE 362

11 Learning About International Human Resources Management 362

Glossary 398 Name Index 403 Subject Index 405

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Preface xi Acknowledgments xiv About the Authors xv

PART 1: HRM TODAY 2

1 Exploring Why HRM Matters to All Employees 2 HRM Close-up 3 Introduction 4 What Is Human Resources Management? 4 What Are the HRM Processes and Practices? 5 Why Study Human Resources Management? 6 The Partnership of Line Managers and HR Professionals 7 Current Business Topics and the Impact on People in Organizations 9 Business Strategy and HRM Strategy 27 Summary 29 Need to Know 30 Need to Understand 30 Key Terms 30 Review Questions 30 Critical Thinking Questions 30 Developing Your Skills 31 CASE STUDY 1 Tim Hortons and Burgers—What’s Going to

Happen to a Canadian Icon? 31 CASE STUDY 2 Controversy in the Oil Sands 32 Notes and References 33

2 Operating Within the Legal Framework 36 HRM Close-up 37 Introduction 38 The Legal Background of HRM 38 Human Rights Legislation 41 Employment Standards Legislation 50 Labour Relations Legislation 51 Health and Safety Legislation and Workers’ Compensation 52 Employment and Pay Equity 53 Diversity 58 Organizational Ethics 61

Contents

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Summary 62 Need to Know 63 Need to Understand 63 Key Terms 64 Review Questions 64 Critical Thinking Questions 64 Developing Your Skills 65 CASE STUDY 1 Accommodation Using Google? 65 CASE STUDY 2 Is Genetic Testing for Work Purposes Ethical? 66 Appendix 67 Notes and References 68

3 Creating a Culture of Well-Being 72 HRM Close-up 73 Introduction 74 Organizational Culture and Its Importance 74 Employee Engagement 76 Creating a Healthy and Safe Work Environment 78 Building a Culture of Well-Being 95 Summary 100 Need to Know 101 Need to Understand 101 Key Terms 101 Review Questions 102 Critical Thinking Questions 102 Developing Your Skills 102 CASE STUDY 1 Culture and Healthy Organizations 103 CASE STUDY 2 Safety Concerns at the Grand Hotel 104 Notes and References 104

PART 2: ATTRACTING AND SELECTING PEOPLE FOR THE ORGANIZATION 106

4 Defining, Analyzing, and Designing the Work 106 HRM Close-up 107 Introduction 108 Defining Work 108 The Manager’s and the Employee’s Role in Defining Work 109 Uses of Information from Job Analysis 114 Designing the Job 118 Summary 127 Need to Know 128 Need to Understand 128 Key Terms 128 Review Questions 128 Critical Thinking Questions 128

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Developing Your Skills 129 CASE STUDY 1 But My Job Has Changed 129 CASE STUDY 2 What Should a New Manager Do? 130 Notes and References 131

5 Planning for, Recruiting, and Selecting the Workforce 132 HRM Close-up 133 Introduction 134 Human Resource Planning 134 Recruitment 138 Selection 147 Summary 165 Need to Know 166 Need to Understand 166 Key Terms 166 Review Questions 166 Critical Thinking Questions 167 Developing Your Skills 167 CASE STUDY 1 Why Aren’t They Interested? 168 CASE STUDY 2 It Isn’t Rocket Science! 168 Notes and References 169

PART 3: DEVELOPING PEOPLE IN THE ORGANIZATION 172

6 Orienting, Training, and Developing Employees 172 HRM Close-up 173 Introduction 174 Orientation 174 Training and Development: A Systems Approach 177 The Training Landscape 191 Career Development—Individual and Organizational Needs 195 Summary 199 Need to Know 200 Need to Understand 200 Key Terms 200 Review Questions 201 Critical Thinking Questions 201 Developing Your Skills 201 CASE STUDY 1 Welcome to the Jungle 202 CASE STUDY 2 Learning 2.0 at East Coast Tech Inc. 203 Notes and References 204

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7 Managing Employee Performance 206 HRM Close-up 207 Introduction 208 A Performance Management System 208 Management Practices 209 Steps in an Effective Performance Management System 213 Performance Reviews 217 Performance Review Methods 223 Performance Review Interviews 231 Summary 234 Need to Know 235 Need to Understand 235 Key Terms 236 Review Questions 236 Critical Thinking Questions 236 Developing Your Skills 237 CASE STUDY 1 Results Count! 238 CASE STUDY 2 Will a New Performance System Work? 238 Notes and References 239

8 Rewarding and Recognizing Employees 242 HRM Close-up 243 Introduction 244 Rewards as Part of Company Strategy 244 Determining Compensation 249 The Compensation Structure 256 Incentive Plans 259 Employee Benefits 261 Benefits Required by Law 264 Voluntary Employee Benefits 265 Summary 272 Need to Know 273 Need to Understand 273 Key Terms 273 Review Questions 273 Critical Thinking Questions 273 Developing Your Skills 274 Exercise 274 CASE STUDY 1 But Do Legislated Wage Rates Work? 275 CASE STUDY 2 What Are the Right Ingredients for a

Recognition and Rewards Program? 276 Notes and References 277

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PART 4: RELATING TO EMPLOYEES WITHIN DIVERSE ENVIRONMENTS 280

9 Dealing with Management Rights, Employee Rights, and Discipline 280 HRM Close-up 281 Introduction 282 Management Rights and Responsibilities 282 Employee Rights 283 Disciplinary Policies and Procedures 295 Appealing Disciplinary Actions 308 Summary 310 Need to Know 311 Need to Understand 311 Key Terms 311 Review Questions 311 Critical Thinking Questions 312 Developing Your Skills 312 CASE STUDY 1 What About My Privacy? 313 CASE STUDY 2 Can’t the Absence Be Ignored? 314 Notes and References 314

10 Understanding Labour Relations and Collective Bargaining 318 HRM Close-up 319 Introduction 320 The Laws Governing Labour Relations 321 Why Employees Unionize 322 How Employees Organize 325 Certification Procedures 329 How Unions Operate 332 The Collective Bargaining Process 337 The Collective Agreement 346 Grievance Procedures 349 Summary 355 Need to Know 356 Need to Understand 356 Key Terms 356 Review Questions 357 Critical Thinking Questions 357 Developing Your Skills 357 CASE STUDY 1 What Should the Union Do? 358 CASE STUDY 2 What’s Wrong with Tattoos? 359 Notes and References 360

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PART 5: WORLD PERSPECTIVE 362

11 Learning About International Human Resources Management 362 HRM Close-up 363 Introduction 364 Managing Across Borders 364 HR Planning, Recruiting, and Selecting 371 Training and Development 377 Rewards and Recognition 382 Performance Management 385 The Labour Environment Worldwide 387 Summary 390 Need to Know 391 Need to Understand 391 Key Terms 392 Review Questions 392 Critical Thinking Questions 392 Developing Your Skills 392 CASE STUDY 1 And the Show Goes On! 393 CASE STUDY 2 Is Global Competition Good? 394 Notes and References 394

Glossary 398 Name Index 403 Subject Index 405

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Preface The previous edition of Essentials of Managing Human Resources was published just as the global eco- nomic scene appeared to be recovering from what has been called the “Great Recession.” However, we seem to have: continuing global economic instability, skill shortages, mounting government debt, and intense global competition. Because of this, and the different expectations and values of the newer entrants to the workforce, organizations are very aware of the need to focus on their people: the people who make or break company success. Attracting and engaging scarce talent is not easy, but it must happen if the Canadian economy is to grow.

With this ongoing focus on the people in a company—the company’s “human resources”—it is important to understand what types of people practices are needed to create the engaged workforce. This book is written to help you understand HR “language”—the practices, processes, and systems necessary for the success of the people in the organization, and therefore, the success of the organiza- tion. For example, one of the more important systems in an organization is recruiting and selecting capable and skilled people.

This textbook builds on concepts you have learned or been introduced to in either a general management or a general organizational behaviour course. It is written for students who will become (or are) employees, supervisors and line managers, and HR professionals. Since the text covers the major human resources management processes and systems, it will provide a good overview if you are thinking about moving into the HR profession.

The book has been authored by experienced instructors recognized by students for many years for their excellence in teaching and facilitating learning. The authors are also active HR practitioners who share business stories throughout the text to make the materials interesting for students.

Essentials of Managing Human Resources is a shorter and a more relevant book for general busi- ness students with simpler language. It is important, however, to remember that the field of HR has its own jargon, or specialized language. Therefore, one goal of this book is to help you learn the termi- nology so that you can deal with HR issues in a more informed way.

Finally, this book is designed to cover all the materials you will need for a good general under- standing of all the HR activities in a company, as well as your role—whether you are an employee or a have the added responsibilities of a supervisor. It shows how theory applies to HR practices in the 21st century. Further, the book has stories about all types of organizations: profit, nonprofit/voluntary, and public-sector; unionized and non-unionized; and small and large.

WHAT’S NEW IN THE SIXTH EDITION Building on the continued success of the fifth edition, and incorporating suggestions from users of the text, the following changes have been made:

• Each chapter has content and questions that illustrate the integrated and strategic nature of human resources management.

• The vast majority of references have been updated, with 95% since 2014. • Figures, charts, and pictures in chapters have been updated. • The chapter on health and safety has been redesigned to focus on building a culture of well-being

with sections on organizational culture and employee engagement. • HRM Close-ups appear in each chapter. • At Work with HRM, HRM and the Law, and Ethics in HRM boxes are in each chapter and have

been revised for students. • There is updated content in all chapters to help students acquire the tools and skills to be suc-

cessful employees. • The text reflects current Canadian research from professional journals/periodicals and aca-

demic journals. • New cases that focus on Canadian companies are presented in each chapter. • Review Questions, Critical Thinking Questions, including ones relating to the HRM Close-up,

and Developing Your Skills materials in each chapter have been updated. • Additional websites are identified within each chapter.

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FEATURES OF THE BOOK Each chapter contains the following materials:

• Learning Outcomes are listed at the beginning of each chapter, with reference icons indicating the objective within the chapter.

• An HRM Close-up that relates a story about a supervisor’s experience in human resources man- agement opens each chapter.

• Toolkit boxes contain tools and resources for handling HR matters. • At Work with HRM boxes feature real-world applications relating to a specific topic with critical

thinking questions at the end. • HRM and the Law boxes help explain the legal implications of HR. • Ethics in HRM boxes highlight sensitive issues employees and supervisors might face. • An Emerging Trends box provides information about trends in relation to each chapter theme. • Key Terms appear in boldface and are defined in margin notes. The key terms are also listed at

the end of the chapter and in the Glossary. • Figures with graphs and research information appear throughout the chapters. • Illustrations reinforce points and maintain reader interest. • A Summary at the end of each chapter reinforces the learning objectives. • A Need to Know/Need to Understand box at the end of each chapter helps to identify key topics. • Review Questions and Critical Thinking Questions promote basic recall and stimulate critical

thinking questions for discussion. • Developing Your Skills contain both text-based and Web-based experiential exercises. • Two case studies in each chapter present current HRM issues in real-life settings that allow for

critical analysis. • Notes and References are included for further research and information. • Website addresses, indicated with an arrow symbol in the margin, are provided throughout

the text.

SUPPLEMENTARY MATERIALS

Instructor Resources The Nelson Education Teaching Advantage (NETA) program delivers research-based instructor resources that promote student engagement and higher-order thinking to enable the success of Canadian students and educators. Visit Nelson Education’s Inspired Instruction website at www. nelson.com/inspired to find out more about NETA.

The following instructor resources have been created for Essentials of Managing Human Resources, Sixth Canadian Edition. Access these ultimate tools for customizing lectures and presenta- tions at www.nelson.com/instructor.

NETA Test Bank This resource was written by Barbara Lipton. It includes multiple-choice questions written according to NETA guidelines for effective construction and development of higher-order questions. Also included are context-specific questions, true/false, and essay questions.

The NETA Test Bank is available in a new, cloud-based platform. Nelson Testing Powered by Cognero® is a secure online testing system that allows instructors to author, edit, and manage test bank content from anywhere Internet access is available. No special installations or downloads are needed, and the desktop-inspired interface, with its drop-down menus and familiar, intuitive tools, allows instructors to create and manage tests with ease. Multiple test versions can be created in an instant, and content can be imported or exported into other systems. Tests can be delivered from a learning management system, the classroom, or wherever an instructor chooses. Testing Powered by Cognero for Essentials of Managing Human Resources also be accessed through www.nelson.com/ instructor.

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NETA PowerPoint Microsoft® PowerPoint® lecture slides for every chapter have been created by Eileen Stewart, British Columbia Institute of Technology. There is an average of 25 slides per chapter, many featuring key fig- ures, tables, and photographs from Essentials of Managing Human Resources. NETA principles of clear design and engaging content have been incorporated throughout, making it simple for instructors to customize the deck for their courses.

Image Library This resource consists of digital copies of figures, short tables, and photographs used in the book. Instructors may use these JPEGs to customize the NETA PowerPoint or create their own PowerPoint presentations.

Videos Instructors can enhance the classroom experience with the exciting and relevant videos provided directly to students through MindTap (see below). They are also available to instructors at www.nelson.com/instructor. These videos have been selected to accompany Essentials of Managing Human Resources.

NETA Instructor Guide This resource was written by Eileen Stewart, British Columbia Institute of Technology. It is organized according to the textbook chapters and addresses key educational concerns, such as typical stumbling blocks student face and how to address them. Other features include lecture outlines, answers to end- of-chapters material, critical thinking questions, and notes of the end-of-chapter case studies.

MindTap Offering personalized paths of dynamic assignments and applications, MindTap is a digital learning solution that turns cookie-cutter into cutting-edge, apathy into engagement, and memorizers into higher-level thinkers. MindTap enables students to analyze and apply chapter concepts within rele- vant assignments, and allows instructors to measure skills and promote better outcomes with ease. A fully online learning solution, MindTap combines all student learning tools—readings, multimedia, activities, and assessments—into a single Learning Path that guides the student through the curric- ulum. Instructors personalize the experience by customizing the presentation of these learning tools to their students, even seamlessly introducing their own content into the Learning Path.

STUDENT ANCILLARIES

MindTap Stay organized and efficient with MindTap—a single destination with all the course material and study aids you need to succeed. Built-in apps leverage social media and the latest learning technology. For example:

• ReadSpeaker will read the text to you. • Flashcards are pre-populated to provide you with a jump start for review—or you can create

your own. • You can highlight text and make notes in your MindTap Reader. Your notes will flow into

Evernote, the electronic notebook app that you can access anywhere when it’s time to study for the exam.

• Self-quizzing allows you to assess your understanding.

Visit www.nelson.com/student to start using MindTap. Enter the Online Access Code from the card included with your text. If a code card is not provided, you can purchase instant access at the Nelson Brain site, NelsonBrain.com.

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ACKNOWLEDGMENTS This edition could not have happened without the hard work of many people, particularly the users of earlier editions. We are grateful to the supervisors and HR practitioners who have shared their stories and helped influence the thinking, and to all the individuals who shared their stories with us.

Many thanks to Simon Vaughan and to the featured individuals for their work on the HRM Close-ups.

The efforts of the Nelson Education team were excellent. Thanks to Anne Williams, Jackie Wood, and Toula Di Leo for their guidance, wisdom, and patience.

The authors and publisher also wish to thank those who reviewed this project during its development and provided important insights and suggestions:

Sonya Hunt, College of New Caledonia Grace O’Farrell, University of Winnipeg Alexandra Panaccio, Concordia University Carol Ann Samhaber, Algonquin College Barbara Sharp, British Columbia Institute of Technology Anne Zurowsky, Red River College

Our greatest thanks go to our families, particularly from those of the current co- authors: (Stewart and Peacock). Eileen Stewart is grateful to her son, Jason Robertson, daughter-in-law, Andrea McLean, and grandson, Caleb Robertson. They have provided help, support, research, and encouragement that were most welcome for the project to suc- ceed. Melanie Peacock is thrilled by the support that her husband, Cam, and children have provided. And the previous authors’ spouses—Michael Belcourt, Ronnie Bohlander, and Marybeth Snell—have also provided invaluable guidance and assistance. We are grateful to all of them for their enthusiasm and guidance.

Eileen B. Stewart British Columbia Institute of Technology

Monica Belcourt York University

Melanie Peacock Mount Royal University

George W. Bohlander Arizona State University

Scott A. Snell The Pennsylvania State University of Virginia

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ABOUT THE AUTHORS

Eileen B. Stewart Eileen Stewart continues to teach part-time at the British Columbia Institute of Technology (BCIT), where she was program head, Human Resource Management Programs, for a number of years. She is a senior human resources professional with extensive experience in all areas of human resources management (HRM), including labour relations in both the public and private sectors. As the HR executive, she has managed human resources units in several of British Columbia’s large public-sector organizations. With a diverse background that includes mining, banking, education, and municipal government, Ms. Stewart has a strong overall business orientation.

After receiving a B.A. in economics and commerce from Simon Fraser University, British Columbia, she joined Teck Mining as its first personnel manager. She then moved to BCIT, where she specialized in labour relations. She obtained her senior management experience at BCIT, as director of personnel and labour relations; the University of British Columbia, as director of human resources; and the City of Vancouver, as general manager of human resources.

While working full-time, Ms. Stewart completed her M.B.A. at Simon Fraser University. She currently teaches HRM courses at BCIT and continues to provide consulting services to private, public, and not-for-profit organizations.

Ms. Stewart is active in the HR community through her continued involvement with the Human Resources Management Association (HRMA). She was recognized by HRMA in 2012 with the Award of Excellence for the HR Professional of the Year and became an Honorary Life Member in 2015. She has also served as president of the HRMA, as well as in other executive roles, for several years. In addition to her professional involvement, she is Vice-Chair, Board of Directors, B.C. Women’s Hospital and Health Centre Foundation, and is on the Board of Directors, Community Living BC. Previously, she was chair of the Board of Directors, YWCA of Vancouver, and sat on its Board for many years.

Melanie Peacock Melanie Peacock is an Associate Professor at the Bissett School of Business at Mount Royal University and has been extensively involved in professional HR initiatives as a senior man- ager, independent HR Consultant, and educator. She obtained her Bachelor of Commerce degree from the University of Alberta, her M.B.A. from the Richard Ivey School of Business (University of Western Ontario), and her Ph.D. through the Faculty of Education at the University of Calgary.

As a senior manager in a variety of corporate environments, Dr. Peacock has led HR teams that create and implement numerous processes and systems that enable organiza- tions to engage their employees and achieve strong results. As well, Dr. Peacock is an active media contributor and commentator.

Dr. Peacock enthusiastically promotes the value of the CHRP designation to business colleagues and has served on the Board of Directors for the Human Resources Institute of Alberta. As testimony to her exceptional work within the HR profession, Dr. Peacock was recognized with the HRIA’s Distinguished Career Award in 2014. As well, in recognition of her instructional capabilities, Dr. Peacock was awarded the first Mount Royal Faculty Association Teaching Excellence Award in 2014.

Monica Belcourt Monica Belcourt is a retired professor of Human Resources Management at York University. Her research is grounded in the experience she gained as director of personnel for CP Rail, as director of employee development, National Film Board, and as a functional HR

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specialist for the federal government. Dr. Belcourt alternated working in Human Resources Management with graduate school, obtaining an M.A. in Psychology, an M.Ed. in Adult Education, and a Ph.D. in management. She also holds the designation Certified Human Resource Professional. Dr. Belcourt has taught HRM at Concordia, UQAM, McGill, and York, where she founded and manages the largest undergraduate program in HRM in Canada. She created Canada’s first degrees in human resources management: B.HRM, B.HRM (honours), and a Masters in HRM (www.atkinson.yorku.ca/mhrm).

As director of the International Alliance for HR Research, Dr. Belcourt manages these programs: the Research Forum in the Human Resources Professional; the Applied Research Stream at the annual conference; the HRM Research Quarterly; the best theses (M.A. and Ph.D.) awards program; and a funding program for HR research (www.yorku.ca/hrresall).

Dr. Belcourt is series editor for the Nelson Education Series in HRM, which includes nine texts to date: Managing Performance Through Training and Development, Occupational Health and Safety, Recruitment and Selection in Canada, Strategic Compensation in Canada, Strategic Human Resources Planning, Research, Measurement and Evaluation of Human Resources, An Introduction to the Canadian Labour Market Industrial Relations in Canada, and International Human Resources: A Canadian Perspective. Additionally, she is lead author of the best-selling book Managing Human Resources, published by Nelson Education, from which this text is adapted.

Active in many professional associations and not-for-profit organizations, Dr. Belcourt was the president (2003–2004) of the Human Resources Professionals Association of Ontario and serves on the national committee for HR certification. She is a past board member of CIBC Insurance and the Toronto French School. She is also a frequent com- mentator on HRM issues for CTV, Canada AM, CBC, The Globe and Mail, The Canadian HR Reporter, and other media.

George W. Bohlander George W. Bohlander is professor emeritus of Management at Arizona State University (ASU). He teaches undergraduate, graduate, and executive development programs in the field of human resources and labour relations. His areas of expertise include employ- ment law, training and development, work teams, public policy, and labour relations. He received his Ph.D. from the University of California at Los Angeles and his M.B.A. from the University of Southern California.

Dr. Bohlander is the recipient of six outstanding teaching awards at ASU and has received the Outstanding Undergraduate Teaching Excellence Award given by the College of Business at ASU. In 1996, Dr. Bohlander received the prestigious ASU Parents Association Professorship for his contributions to students and teaching.

Dr. Bohlander is an active researcher and author. He has published more than 40 arti- cles and monographs covering various topics in the human resources area: these range from labour–management co-operation to team training. His articles appear in such academic and practitioner journals as Labor Studies Journal, Personnel Administrator, Labor Law Journal, Journal of Collective Negotiations in the Public Sector, Public Personnel Management, National Productivity Review, Personnel, and Employee Relations Law Journal.

Before beginning his teaching career, Dr. Bohlander served as personnel admin- istrator for General Telephone Company of California. His duties included recruitment and selection, training and development, equal employment opportunity, and labour rela- tions. He was very active in resolving employee grievances and in arbitration preparation. Dr. Bohlander has also worked with such organizations as the U.S. Postal Service, Kaiser Cement, McDonnell Douglas, Arizona Public Service, American Productivity Center, Rural Metro Corporation, and Del Webb. He is also an active labour arbitrator. He continues to be a consultant to both public- and private-sector organizations.

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Scott A. Snell Scott A. Snell is professor of Business Administration at the Darden Graduate School of Business at the University of Virginia. During his career, Dr. Snell has taught courses in human resources management, principles of management, and strategic management to undergraduates, graduates, and executives. He is actively involved in executive educa- tion and serves as faculty director for Penn State’s Strategic Leadership Program as well as faculty leader for programs in human resources, developing managerial effectiveness, and managing the global enterprise. In addition to his teaching duties, Dr. Snell serves as director of research for Penn State’s Institute for the Study of Organizational Effectiveness.

As an industry consultant, Professor Snell has worked with companies such as Arthur Andersen, AT&T, GE, IBM, and Shell Chemical to redesign human resources systems to cope with changes in the competitive environment. His specialization is the realignment of staffing, training, and reward systems to complement technology, quality, and other stra- tegic initiatives. Recently, his work has centred on the development of human capital as a source of competitive advantage.

Dr. Snell’s research has been published in the Academy of Management Journal, Human Resource Management Review, Industrial Relations, Journal of Business Research, Journal of Management, Journal of Managerial Issues, Organizational Dynamics, Organizational Studies, Personnel Administrator, Strategic Management Journal, and Working Woman. He is also co-author of Management: The Competitive Edge, with Thomas S. Bateman. In addition, Dr. Snell is on the editorial boards of Journal of Managerial Issues, Digest of Management Research, Human Resource Management Review, and Academy of Management Journal.

Dr. Snell holds a B.A. in psychology from Miami University, as well as M.B.A. and Ph.D. degrees in business administration from Michigan State University. His professional associations include the Strategic Management Society, the Academy of Management, and the Society for Human Resource Management.

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Introduction What Is Human Resources

Management? What Are the HRM Processes and

Practices? Why Study Human Resources

Management? The Partnership of Line Managers

and HR Professionals Role of the Line Manager Role of the HR Professional The Ongoing Partnership

Current Business Topics and the Impact on People in Organizations

Topic 1: Global Economy Topic 2: Changes in Firms and Business

Sectors Topic 3: Technology and Quality Topic 4: Sustainability Topic 5: Human Capital and Talent

Management Topic 6: Demographic and Employee

Concerns Business Strategy and HRM Strategy

After studying this chapter, you should be able to

1 Define human resources management (HRM).

2 Identify the processes and practices of HRM.

3 Explain the importance of HRM to all employees.

4 Discuss the relationship between the line manager and the HR practitioner.

5 Describe current business topics and the impact on people in organizations.

6 Outline the key demographic and employee concerns.

7 Illustrate the link between business strategy and HRM strategy.

PART 1: HRM TODAY

1 Exploring Why HRM Matters to All Employees LEARNING OUTCOMES

OUTLINE

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"I need to help people understand the strategy and important business issues before new ideas can be implemented, all the time being positive and supportive of their need and ability to contribute with fresh thinking."

Tania Goodine always felt she’d like to manage people and develop a team. At university, she chose an undergrad degree in psychology, studied marketing, and then completed her M.B.A. Although her first job was as a marketing officer, Goodine soon headed up a team of her own and found herself doing two things she loves: marketing and people management.

At Libro Credit Union, with over 600 employees throughout southwestern Ontario, Goodine’s title is Executive Vice- President, Engagement. She has over- sight and responsibility for the brand of the credit union—its reputation in the community, its strategy and inno- vation, human resources, marketing, and communications.

In contrast to her early days at Libro, Goodine must now get work done through other people. Doing so means spending much of her day developing and coaching people, and helping to solve problems.

“It’s always worth it,” she says. “Investing time with people, no matter how chal- lenging the conversation, is always worth the time and effort. In a service business, all

you have are your people,” she says. “They are earning business and keeping business. Therefore all the human resources pro- cesses and programs we have in place are critical to our success as a company.”

Training at Libro is flexible, and employees complete programs at their own pace. Embracing individual differ- ences and developing people to their full potential is Goodine’s goal. “I believe people want to do a good job, and when they’re not, there’s almost always a legit- imate reason. Sometimes, it’s simply a training issue. It’s almost never that they’re unwilling,” she explains.

The newest employees sometimes provide the greatest challenges for Goodine. They come to the organiza- tion with fresh ideas and eagerness, and it can be a fine balance to harness an employee’s energy without shutting the person down.

“I need to help people understand the strategy and important business issues before new ideas can be implemented, all the time being positive and supportive of their need and ability to contribute with fresh thinking. Exploring social media is one example of that, where we work to establish business objectives and guide- lines to manage risk, and then I get out of the way of creative ideas!”

Libro has a prescribed performance management process involving regular feedback with staff. As a result, there are no surprises when it comes to evalu- ating how a person is doing in their job. “I also look for opportunities to have people hold a mirror up to themselves,” Goodine explains. “When employees can see a behaviour themselves, it makes learning and development so much easier.”

The most valuable advice Goodine received as a new manager was during a supervisory training session. A leader explained that everybody carries around a personal knapsack of issues they are dealing with. It is therefore important to recognize individual differences and vary your style accordingly. Sometimes a manager needs to be more direct, and sometimes a softer approach is needed. “Set the tone from day one,” says Goodine. “To get trust, you have to give it. Take the time to know people and try to connect in a genuine way.”

Tania Goodine, vice-president, Brand, Libro Financial Group.

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HRM CLOSE-UP

Source: Courtesy of Tania Goodine

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INTRODUCTION This book will introduce you to the field of human resources management. Human resources management is a business subject and it needs to be studied and understood within the business setting. It is possible that you are taking this course along with other business courses such as general management, economics, and organizational behaviour. All the information you learn in those courses will be applicable to your fuller understanding of human resources management.

Some of the important things to know and understand about business today are that we live in a global world, that there is constant change, and that any of a number of factors can impact the success of any business. The economy in Canada, and in the rest of the world as well, continues to struggle. And in Canada, competing forces affect the economy: a drop in the price of oil, a key export, sluggish consumer sales, and increases in housing and food.1 What happens in the economy has a direct impact on how many employees any organiza- tion hires. Without a healthy and prosperous economy, businesses won’t thrive and there will be fewer jobs available.

The managing of people in any organization remains key to the business agenda— perhaps even more so now. New phrases, such as “human capital,” “intellectual assets,” and “talent management,” have crept into business jargon to emphasize the value that the people in the organization have.

As Tania Goodine says in the HRM Close-up, it is important to recognize the indi- vidual differences of each employee and to adapt her style accordingly. But what is human resources management (HRM) and why is it important?

Just for a moment, imagine an organization without people. No employees, no super- visors, no managers, executives, or owners. It’s a pretty tough assignment. Without people, organizations would not exist. And while this idea may not be much of a revelation, it brings home the point that organizations are made up of people. Successful organizations are particularly good at bringing together different kinds of people to achieve a common purpose. This goal is the essence of human resources management. As students, you are the future of any organization—whether you become employees, supervisors, managers, or owners.

WHAT IS HUMAN RESOURCES MANAGEMENT? Human resources management is more than hiring, paying, and training people. Human resources management (HRM) is an integrated set of processes, practices, programs, and systems in an organization that focuses on the effective deployment and development of its employees. And it is important to remember that a change in one HRM practice has an impact on the other processes, practices, programs, and systems.

The word “employee” is also intended to cover a contract worker, a person from another organization who is working on a project, or anyone in another, similar working relation- ship. This expansion of the term is indicative of the new workplace that is far more fluid and flexible than the workforce 10 to 20 years ago.

Managers use a lot of words to describe the importance of people to their orga- nizations. The term “human resources” implies that people are as important to the success of any business as other resources, such as money, materials, machinery, and information.

What is human resources management (HRM)?

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Human resources management (HRM) An integrated set of processes, practices, programs, and systems in an organization that focuses on the effective deployment and development of its employees

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WHAT ARE THE HRM PROCESSES AND PRACTICES? Before there can be a discussion about why to study HRM, let’s look at the various individual systems and processes that fit together. While these will be examined individually, no process or practice is stand-alone, as there is overlap among all the areas.

1. Creating a culture of a safe and healthy work environment. Ensuring that the work envi- ronment creates a sense of well-being. Goodine and others in the company need to ensure their actions and behaviours create this.

2. Defining, analyzing, and designing work. Determining what tasks need to be done, in what order, with what skills, and how individual tasks fit together in work units. For example, in the HRM Close-up, Goodine has to ensure that the tasks are coordinated in a way to get the work done by her team. Creating high-performance work groups or teams is a form of defining and designing work.

3. Planning for, recruiting, and selecting the workforce. Ensuring that people in the orga- nization are the right people with the right skills at the right time in the right place which means sourcing, attracting, and hiring the people with the necessary skills and background. In the HRM Close-up, Goodine has to plan when it is necessary to add more staff and then find and hire the people who can best represent the company and do the work as expected.

4. Orienting, training, and developing employees. Providing the resources to assist employees in developing the necessary knowledge and skills to do their job today and in the future. Goodine indicated that training is in a flexible format and that she spends a good portion of each day coaching and helping staff develop to their full potential. Organization development and learning is the total impact of indi- vidual learning.

5. Managing employee performance. Ensuring that there are appropriate mechanisms in place to provide feedback to employees regularly. To ensure that the business objectives are being met, Goodine and Libro provide regular feedback so that there are no sur- prises during review time.

6. Rewarding and recognizing employees. Developing and administering a variety of rewards and recognition components, including pay and benefits, that will attract, retain, and engage employees. Being in the financial services business, Libro will need to ensure that its compensation program can attract and retain the calibre of staff it desires.

7. Relating to employees within diverse environments. Ensuring that there are positive and constructive relations between the employees and their supervisors or managers and/ or union representatives. Goodine notes that part of her job is to recognize individual differences in staff and adjust her management style accordingly.

These processes and activities and their relationship to the organization and the employees are shown in Figure 1.1. Throughout this text, you will also be provided with information that links organizational performance with the various people practices, thereby reinforcing the requirement to have HR processes that fit the organization. The collective set of these processes and activities, and how well they are linked with each other and the business, creates the setting for the business to be successful through its employees.

What are the HRM processes and practices?

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WHY STUDY HUMAN RESOURCES MANAGEMENT? To work with people in any organization, it is important to understand human behaviour and to be knowledgeable about the various systems and practices available to effectively use and build a skilled, knowledgeable, and motivated workforce. Managers must be aware of eco- nomic, technological, social, and legal issues that either help or hinder their ability to achieve organizational success. Employees need to understand what their work is, how they will be rewarded, and on what basis their performance will be measured.

You are the managers, team leaders, and employees of tomorrow: studying HRM will help you understand your roles and responsibilities in the organization and how your con- tribution makes the organizational successful.

In the process of managing human resources, increasing attention is being given to the individual needs of the employees. For example, Gen Y employees may be more motivated by money than Gen Z (or Millennials) employees.2 Likewise, Gen Z employees are less likely to have work as their sole focus, whereas Boomers make work the primary focus.3 Thus, this book will not only emphasize the importance of the contributions HRM makes to the organization but also show how, through good people management in an organization, the individual and our overall society are improved. Consider how you feel and behave if your work isn’t enjoyable and you don’t feel that you understand your role in the organization or that your work doesn’t appear to be valued. You might respond in a variety of ways, including being unconcerned about a customer complaint. By acting in this way, you are not contrib- uting to the success of the organization, which includes your own success. If enough people do this, our overall productive capacity as a society will decrease.

Why is HRM important to all employees?

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FIGURE 1.1 Overall Framework for HR

ORGANIZATION

HRM PROCESSES AND PRACTICES

Creating a safe and healthy work environment

Defining, analyzing, and designing work

Planning for, recruiting, and selecting the workforce

Orienting, training, and developing employees

Managing employee performance

Rewarding and recognizing employees

Relating to employees within diverse environments

BUSINESS TOPICS

Gl ob

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Changes in firm s

D em

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Sustainability

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THE PARTNERSHIP OF LINE MANAGERS AND HR PROFESSIONALS

Role of the Line Manager Managing people depends on effective leaders (supervisors and line managers). The leader is the key link between the employee and the organization. Therefore, the leader must have a thorough knowledge and understanding of contemporary HRM and how these practices influence the output of any organization. Although HR professionals may have responsibility for coordinating programs and policies pertaining to people-related issues, managers and employees themselves are ultimately responsible for making the organization successful. All line managers are people managers—not the HR professional or HR unit. It is through the effective leadership of the line manager or supervisor that the talent or “intellectual capital” of the organization is enhanced. Remember that it is the line manager who directly interacts with the employees and is responsible for their effective contribution to the organization. It is the manager’s role to develop their employees and make work a great place.4 Therefore, when an organization wishes to place an increased emphasis on the growth and development of its people, it is the line manager who is front and centre in identifying the gaps in any skill sets. It is only then that the HR practitioner can offer some ways and means of bridging the gap.

Readers of this book will become line managers, supervisors, and employees as well as HR professionals. This text is oriented toward helping people manage people more effectively and understanding the various HR processes, whether they become first-line supervisors, employees, or HR professionals. Students now preparing for careers in organizations will find that the study of HRM provides a background that will be valuable in any role. For example, an HR profes- sional can assist the supervisor in developing steps to improve the performance of a particular employee. The consequences for the supervisor of developing a poor approach could result in the employee either not improving the performance or the employee feeling unsupported or criticized by the supervisor’s approach. Likewise, it is important for the employee to know about managing their own performance and improving when necessary. In either situation, the pri- mary objective of improving performance would not be achieved.

Role of the HR Professional It is important for line managers to understand the role or function HR professionals play, whether these individuals are part of the organization or are external resources retained by the organization. HR practitioners are becoming more and more professional and are being trained with common bodies of knowledge and information. Besides knowing how to recruit and pay people appropriately, HR professionals need sound business knowledge, good problem-solving and influence skills, and personal credibility (trust and the ability to build personal relationships). The HR practitioner’s primary role in today’s organizations is to help equip the line manager with the best people practices so that the organization can be successful. HR professionals can provide service activities, such as recruiting and training. Further, they can be active in policy formulation and implementation in such areas as work- place harassment, healthy work environments, and change management. Lastly, an HR pro- fessional can be an employee advocate by listening to employee concerns and ensuring that the organization is aware of and responding to those concerns.

HR professionals are expected to fulfill their role by actively involving others in the organization, particularly the supervisors and managers, in the development and design of HR programs. For example, a company may want the HR professional to develop an overall recruitment approach to attract individuals with key skill sets. This approach would then generate a pool of applicants with the required skills. However, it would be the line manager who would actually select the best person from this pool.

What is the relationship between the line manager and HR practitioner?

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Dave Ulrich,5 a leading expert and author on human resources practices, states that an HR professional must be impactful and create value for the organization. Above all else, HR professionals must be able to integrate business skills, HR skills, and skills in helping employees handle change so that their organization can build and maintain a competitive advantage through its people.

The Ongoing Partnership As we next look at the competitive and social challenges facing any business, it is important to reinforce the idea that managing people is not something done in a back room or by HR professionals alone. It is important to remember that HR doesn’t tell managers what to do; and proactive managers know when to involve an HR professional. Managing people is every manager’s responsibility and obligation, and successful organizations are those that equip their line managers with a thorough understanding of good HRM practices—either through having an HR unit or retaining expertise when needed. Even without an HR pro- fessional, the manager is still responsible for effective human resources management.

In organizations that have an HR unit, HR managers usually assume a greater role in top-management planning and decision making. There are, however, organizations that see HR as more an administrative matter than a key business section.6 For HR to be seen as part of the business, it must have a solid understanding of the business and develop processes and practices that align with that business.7 A recent study conducted by Aon Hewitt indi- cated that organizations that focus efforts on being a great employer have better business outcomes.8 For additional information on this and other studies conducted by Aon Hewitt in this area, visit its website: www.aon.com.

Let’s reconsider the comments made by Goodine in the HRM Close-up. The organization has more than 300 employees and an HR unit with an HR manager. But many smaller organiza- tions often wonder when they should hire an HR professional. Frequently, when an organization has 75 to 100 employees, the owners or senior management may think it best to get professional assistance. Figure 1.2 shows what the relationship between HR and other business units might be in a small organization. Even smaller organizations, those with fewer than 75 employees, will frequently retain an independent HR practitioner; this is typically done through the owner or president, and the line manager may not have much interaction with the HR expert.

In the tourism industry, it is important to hire and retain capable people.

Aon Hewitt www.aon.com

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If Emily in Figure 1.2 needed to hire a customer service agent, she would work with Robert in confirming the job requirements, identifying possible recruitment sources, doing the final interviewing, and making the decision on which candidate to hire. Robert, on the other hand, would assist Emily as required, including the development of appropriate inter- view questions and conducting reference checks.

CURRENT BUSINESS TOPICS AND THE IMPACT ON PEOPLE IN ORGANIZATIONS Organizations such as the Conference Board of Canada (www.conferenceboard.ca), the Society for Human Resource Management (www.shrm.org), and McKinsey & Company (www.mckinsey.com) conduct ongoing studies of the most important competitive trends and issues facing firms. As we move forward in a new global environment, some of the business concerns are considerably different than they were just a few years ago.

1. global economy 2. changes in firms and business sectors 3. technology and quality 4. sustainability 5. developing human capital and talent management 6. demographic and employee concerns

Topic 1: Global Economy The Canadian economy is primarily built on exports, including those in natural resources such as oil, gas, mining, and forestry. Because of this, for years many Canadian companies have been involved in the global markets. As Canada has moved into other goods and ser- vices to export, many companies have created global operations or worked collaboratively with foreign companies to sell Canadian products. Canadian exports were valued at close to $440 billion in late 2014.9 This figure represents approximately 35% of Canada’s gross domestic product (GDP).10 At Work with HRM 1.1 provides insights about a number of Canadian companies that are successful in the global marketplace.

While many companies, such as Starbucks, Walmart, and Lowe’s, are coming to Canada to do business, some Canadian companies have acquired firms in other countries. An example is Brookfield, headquartered in Toronto and one of the largest owners/managers of office properties and renewable energy generating facilities.11

What are the current business topics?

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Sally Ohri

President XYZ Transporation

Jasmine Sandhu

Manager Finance

Emily Jones

Manager Customer Service

Robert Macintosh

Manager HR

Bill Robertson

Manager Delivery Systems

FIGURE 1.2 Relationship of HR to Other Business Units

Conference Board of Canada www.conferenceboard.ca

Society for Human Resource Management (SHRM) www.shrm.org

McKinsey & Company www.mckinsey.com

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The company recently acquired a large-scale gambling casino in Atlantic City and is investing heavily to induce people to come to that city for a full offering of entertain- ment as well as for gambling.12 But globalization is not just something of interest to large firms. While estimates vary widely, 70 to 80% of the Canadian economy is now affected by international competition. This means, for a small distributor in Kamloops, British Columbia, or a small manufacturer in Alliston, Ontario, that the competition today is no longer the distributor or manufacturer in the next town or province. Trade agreements that allow a freer flow of goods and services mean competitors may be located anywhere around the world. It also means companies that had been doing busi- ness in Canada can move to other countries that may have lower production costs. For example, Ford Motor Co. decided to build a new engine plant in Mexico, rather than in Windsor, Ontario, eliminating the creation of approximately 1,000 jobs.13

Global growth continues to be sluggish even though it has been several years since the financial crisis of 2008. Specifically, Canada’s growth is 1–2%; China is slowing; the EU is still soft; and the U.S. economy is only growing by 3%.14 Slow growth hampers a vibrant Canadian economy. More recently, there have been other issues: Target leaving the Canadian market; the continued slide of price of crude oil; the default of Greece to the EU Bank in summer of 2015; and the large drop in the Chinese stock market.15

Globalization Moving local or regional business into global marketplace

Many Canadian companies acknowledge that their success in the global marketplace is attributable to the people they have hired. Employers actively strive now to have work envi- ronments that make them eligible for “best employer” status. For example, Cactus Restaurants, a western Canada restaurant chain, received such an award for the largest in-house appren- ticeship pursuing Red Seal Certification. Firms such as Avison Young, E.C.S. Electrical Cable Supply, Robotec, and Hunter Amenities were honoured in early 2015 for being in the top 50 Best Managed Companies in Canada.

Avison Young, a Canadian-owned commercial real- estate venture, is proud of its investment in people. It pro- vides specialized training and workshops that allow its staff to provide exceptional service to the clients. Further, it highlights the importance of collaboration to achieve the best expertise and intellectual capital. It also believes that its culture of team orientation helps it keep the most tal- ented in the commercial real-estate business.

With operations as far away as Dubai, E.C.S. Electrical Cable Supply provides wire and cable products to specialty markets, such as shipping, mining, and critical life sup- port with portable cables. It is successful because its pro- fessionals have deep knowledge of the various industries

and superb customer service capabilities. To help with the deepening of its knowledge base, the company provides personal development and encourages everyone to take an active part in the company’s success.

Likewise, Robotec, a Quebec-based company that designs and manufactures innovative hydraulic systems that handle bulk solids or unusual items, provides equip- ment and service to projects in more than 20 countries. Because it employs people with specialized trades such as machinists, it actively recruits the best and then continues with their development to ensure that they stay.

Hunter Amenities, with headquarters in Burlington, Ontario, provides personal care products around the world. It attributes its success and growth to the dedica- tion, creativity, and skills of its employees. Hunter’s people are engaged because all the products are developed with the environment as part of the consideration.

CRITICAL THINKING QUESTIONS: 1. What other businesses in your geographic area have a

global marketplace? 2. What types of skills might their employees need for

them to continue being global players?

Sources: Adapted from “British Columbia’s Top Employers 2014,” The Vancouver Sun, February 2014; “Best Managed Companies 2015,” March 2015, accessed July 8, 2015, www.bestmanagedcompanies.ca/en/meetourwinners/Pages/GoldStandardWinners.aspx; and “About Us,” accessed July 9, 2015, www.hunteramenities.com/content/ company.

AT WORK WITH HRM 1.1 OUR GLOBAL SUCCESS: GREAT EMPLOYEES!

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Effect of Globalization on HRM When managers start to “go global,” they have to balance a complicated set of issues related to different geographies, cultures, laws, and business practices. Human resources issues underlie each of these concerns and include such things as identifying capable expatriate managers who live and work overseas; designing training programs and development opportunities to enhance the managers’ understanding of foreign cultures and work prac- tices; and adjusting compensation plans to ensure that pay schemes are fair and equitable across individuals in different regions with different costs of living.

So, while managing across borders provides new and broader opportunities for orga- nizations, it also represents a quantum leap in the complexity of human resources man- agement. Whether you are working for a large multinational company or a small parts distributor, HRM in other countries has an impact on you. Chapter 11 focuses on interna- tional human resources management.

Topic 2: Changes in Firms and Business Sectors While Canada exports its oil and minerals, much of Canada’s economy over the past several years has relied upon housing and consumer spending. For real growth, Canada will need to increase its exports.16 Currently, Canada is heavily dependent on the economic health of the U.S., since approximately 75% of Canada’s GDP is exported there.17 Of significance is the fact that the amount of crude oil to the U.S. has now exceeded 3 million barrels per day.18 However, the price of crude oil has been on a roller coaster—from a high of $110 in July 2014 to $78 in November 2014 to $33 in January 2016.19

Maintaining Canada’s ability to export large quantities of oil and gas isn’t easy, given the environmental concerns about extracting and shipping. There is huge public resistance to the Enbridge pipeline from Alberta to the British Columbia coast, and growing concern about TransCanada’s Energy East project from environmentalists, farmers, ranchers, and ordinary people concerned about their livelihood in Atlantic Canada.20

Changes to company ownership has seen some interesting outcomes. Sobeys, a grocery chain with headquarters in Nova Scotia, bought Safeway in 2014, making Sobeys one of two national grocery retailers.21 That same year, Hudson’s Bay Company bought Saks, LifeLabs Medical Laboratory bought CML, and TD Bank Group bought 50% of CIBC’s Aeroplan credit card portfolio.22 As companies change, so do the requirements for the capabilities of employees. Dealing with the consequences of changes impacts all HRM practices.

Small and medium-sized businesses continue to be the lifeblood of a healthy economy. Gravity Pope, a specialty shoe and clothing store headquartered in Edmonton, has grown from a small store in Edmonton to having stores in Calgary, Vancouver, and Toronto.23 A pub chain in Calgary that is noted for its craft beers recently announced it had entered into a joint venture to open a restaurant in Shanghai.24

Productivity and Managing Costs Companies continually look at ways to lower costs and improve productivity to maximize efficiency in order to be globally competitive. Labour costs are one of the largest expen- ditures of any organization, particularly in service and knowledge-intensive companies. Organizations have tried a number of approaches to lower costs, particularly labour costs. These include downsizing, outsourcing, and the use of contract employees, each of which has a direct impact on HR policies and practices.

Downsizing is the planned elimination of jobs. There is no company or business sector that hasn’t experienced downsizing at some point. More downsizing will occur when the economy is poor, but some might occur if the company decides to eliminate a product line or close a plant. For example, Saputo, a large dairy processor headquartered in Montreal, closed plants in both Alberta and the U.S. It moved the production elsewhere so that efficiencies could be increased and costs reduced.25 Almost 200 jobs will be lost. And as

Downsizing The planned elimination of jobs

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BlackBerry (formerly Research in Motion—RIM) tried to find its balance, it downsized 65 employees when it changed its app strategy.26

A number of lessons were learned in earlier downsizing situations, so organizations are being much more careful about changing operations. For a number of years, the general approach was to do an across-the-board reduction or to eliminate individuals on the basis of performance. However, research has identified that the why and how a company down- sizes can create negative views of how responsible the company is.27 Other lessons include communicating what is going to happen as soon as possible, being honest regarding why the downsizing occurs, treating everyone with respect, and being sure downsizing is the right solution.28

If jobs and employees have to be eliminated, the manner in which the action is taken also has to be carefully planned. As much attention needs to be paid to those people who will still be employed as to departing employees. It is the people who are still employed who will will make the company successful, so it is important that they feel the company has treated everyone well. It is also important that the remaining employees feel as if they matter; a good way to achieve this is to provide additional training and development opportunities.29

When Target announced it was leaving Canada, it created a fund that would guarantee severance payments to its 17,500 employees—a fund that would be safe from bankruptcy proceedings.30 Read HRM and the Law 1.1 to better understand the legal implications of shutting down a business.

Outsourcing and Contractors Outsourcing means hiring someone outside the company or bringing in a company to per- form tasks that could be done internally. Companies often hire the services of accounting firms, for example, to take care of financial services. Increasingly, activities such as main- tenance, security, catering, and payroll are being outsourced in order to increase the orga- nization’s flexibility and to lower administrative costs. For example, organizations such as Telus, Accenture, and IBM have business units that provide outsourced services ranging from technology support, management, and telephone operator services.31

And outsourcing can be a niche market for some entrepreneurs. Mindfield, a recruiting company in Vancouver, provides hourly workers for companies such as Canadian Tire, Sport Chek, Overwaitea Foods, and Mark’s Work Wearhouse. Its focus is on retail and small to medium-sized companies, and it uses state-of-the-art technology to recruit and assess skills for hiring and placement.32

While the use of outsourcing continues, there are examples of where outsourced work is returning to the home company. Sears Canada has established new call centres in Saskatchewan and Ontario, and brought the work back from the Philippines.33 It has done so to provide an improved level of customer satisfaction, particularly for repair calls. Likewise, American Express Canada returned some activities to Canada from other countries. Furthermore, in some cases, using outsourced services can help with a business transformation, such as is occurring in Russia, where outsourcing has not traditionally been done.34 However, since there is always a risk when outsourcing, here are some important things to examine:

1. What does the company want to outsource and why? 2. Who are the service providers and what will be the evaluation criteria? 3. What are the risks of outsourcing and how will the risks be mitigated?35

In addition to downsizing and outsourcing, organizations will hire contractors. Generally speaking, contractors are hired to do a specific job for a specific period of time and have more flexibility in relation to hours of work, work location, and how the work is done. Contractors are not covered by mandatory employment deductions such as income tax and employment insurance premiums. However, contractors are still required to report all income and then to pay appropriate taxes.36 The downside of using contractors is that they may not be as attached or committed to the work outcomes as an employee.

Outsourcing Contracting outside the organization for work formerly done by internal employees

Contractor A person hired by contract to perform a specific job and is not considered part of the employee base

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Topic 3: Technology and Quality Advancements in technology have enabled organizations to improve processes (both pro- duction and administrative), reduce costs, and improve quality. With computer networks, unlimited amounts of data can be stored, accessed, and used in a variety of ways, from simple record keeping to controlling complex equipment. The effect is so dramatic that, at a broader level, organizations are changing the way they do business. Use of the Internet to transact business for both large and small companies is now a way of doing business and is transforming the way traditional brick-and-mortar companies operate. For example, Amazon’s rise was based on its having only an online presence, with no storefront. It is now considered one of the tech giants of the world, as it not only sells books but also has devel- oped electronic readers and Wi-Fi speakers.37 Organizations are connected via comput- er-mediated relationships, and they are giving rise to a new generation of “virtual” workers who work from home, hotels, cars, or wherever their work takes them.

Headlines were made a few years ago when U.S. giant retailer Target moved into Canada and opened 133 retail stores in 2013. Then the shock occurred: in January 2015 Target announced that it had made a mistake by opening so many stores at once and had decided to close down its Canadian operations—all stores.

The financial and legal implications of the shutdown affected suppliers, customers, employees, investors, and creditors, and the decision was not made lightly. In making it, Target sought court-ordered protection from creditors with a $5.4 billion loss in its fourth quarter 2014. While employees knew that the business was not doing well, they were surprised that all stores would close. Many people, including customers, felt that only the ones doing poorly would close.

Only a few days after the announcement, Sears Canada publicly encouraged Target employees to apply for work with it. Sears also decided to do special events, such as local job fairs, to provide more opportunities for Target employees to consider it as an employer. An invitation was also extended to the Target head office people to meet with senior leaders of Sears. And within a few months, Lowe’s announced that it would take over 13 of the Target stores that would create about 2,000 jobs.

Unfortunately, many of the employees only worked part-time at minimum wage, and that can be difficult for them. On the other hand, since turnover in the retail sector is fairly high, these employees will have skills that can be used in places such as Home Depot, Walmart, and others mentioned above.

What is different is that Target has pledged to create a $70 million trust that will provide a minimum of 16 weeks of wages and benefits. Although the amount of severance was required by law, the trust fund was not, since it was seeking creditor protection. However, it acknowledged that it couldn’t make light of the decision and the impact on people, and felt it had to protect the employees. The courts approved the creditor protection, along with the trust. This was an unusual step; employees are frequently the last to be considered and the last to be paid in bank- ruptcy proceedings.

QUESTIONS: 1. Do you have a friend or family member who was

working at Target? If so, what were their reactions? 2. Do you think Target ought to have paid more compensa-

tion than the minimum required by law for terminating all the employees? Explain your answer.

Sources: Adapted from Solarina Ho, “Target to Discontinue Canada Operation,” Canadian HR Reporter, January 15, 2015, accessed July 9, 2015, www.hrreporter.com/ articleview/23257-target-to-discontinue-canada-operation; Andrea Hopkins, “Target Workers, Shoppers, Dismayed at Canada Pullout,” Canadian HR Reporter, January 15, 2015, accessed July 8, 2015, www.hrreporter.com/articleview/23265-target-workers-shoppers-dismayed-at-canada-pullout; Allison Martell, “Sears Offering Jobs, Discounts to Workers Affected by Target Exit,” Canadian HR Reporter, January 19, 2015, accessed July 8, 2015, www.hrreporter.com/articleview/23276-sears-offering-jobs-discounts- to-workers-affected-by-target-exit; “Lowe’s Gets 13 Target Canada Stores, Distribution Centre for $151 Million,” Canadian HR Reporter, May 11, 2015, accessed July 9, 2015, www.hrreporter.com/articleview/24321-lowes-gets-13-target-canada-stores-distribution-centre-for-151-million; Mark Gollom, “Target Store Closures: What Will Happen to 17,600 Employees?” CBC News, January 20, 2015, accessed July 9, 2015, www.cbc.ca/news/business/target-store-closures-what-will-happen-to-17-600-employees-1.2913118; “Target Canada Closure: What You Can Expect,” CBC News, January 15, 2015, accessed July 9, 2015, www.cbc.ca/news/business/target-canada-closure-what-you-can-ex- pect-1.2911902; and Jeff Gray and Tim Shufelt, “Rare Move Protects Employees,” The Globe and Mail, January 16, 2015, B7.

HRM AND THE LAW 1.1

CLOSING OPERATIONS AND TERMINATING 17,500 EMPLOYEES!

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The implications for HRM are at times mind-boggling. For example, in the early years, HRM was more administrative and spent much of its time on processing forms. Technology is now found in all the HR practices; and many of you may have already experienced this, such as when applying online for a job. Support is also provided to all employees through technology, including intranets. Information is now also widely available to everyone regarding employment matters or anything to do with HRM. Toolkit 1.1 provides helpful current website addresses regarding HRM.

In addition, cloud computing is a growing trend impacting the way organizations handle data and whether or not the company has in-house IT employees. There is even a suggestion that cloud computing can create organizations that are more agile and produce better business outcomes.38

Further, it is important to remember the impact technology and the Internet have had on the way people work. Specifically, people can live in one location and “work” in another, including their own home. This kind of work is called telecommuting, in which people may have their job structured to allow them to work from home and to work at any time. Staples Canada recently conducted a survey regarding how employees feel about telecom- muting. The survey revealed that 71% of employees consider telecommuting an important benefit, as it enables employees to have a better work–life balance.39 Staples’ use of telecom- muting gives it an advantage in recruiting talent.

Due to the new technology, the skills necessary to be successful are different. For example, this text provides you with weblinks for additional information. You can access www.workingincanada.gc.ca for information on trends in jobs and occupations, earnings, and work prospects in Canada. Likewise, some of you will get work after you finish school by posting your profile and/or résumé online at websites such as www.linkedin.com, www.monster.ca, www.workopolis.ca, and www.eluta.ca.

Figure 1.3 provides information about the skills important for contributing to innova- tion in the workplace.

Telecommuting Conducting work activities in different locations through the use of technology

The Internet offers employees and HR professionals a vast amount of resources for research, news, recruitment, and net- working with people and organizations. Listed below are some Internet sites related to the HR field. Their addresses (URLs) are printed here for reference, but once you get started, it’s easier to access the rest by following the links to related sites.

GENERAL HR SITES www.workforce.com This site posts articles regarding the latest trends and topics in human resources. It also provides links to HR spe- cialist consultants. www.hrreporter.com An excellent Canadian resource for current news, information on the latest trends and practices, expert advice, experiences, and insights from HR practitioners, research, and resources. www.hrVillage.com An excellent source of up-to-date human resources infor- mation, featuring online articles, discussion forums, book reviews, and links to related sites.

SPECIALIZED SITES www.canoshweb.org This site offers a variety of information regarding safety and health in the workplace, reports and statistics, and industry trends. It also provides online access to the workers’ com- pensation legislation in Canadian jurisdictions. www.esdc.gc.ca/en/jobs/workplace/index.page? This site provides online access to federal statutes and regulations, with links to provincial employment legislation. www.statcan.gc.ca The Statistics Canada site offers daily news updates, census information, and free tabular data on various aspects of the Canadian economy.

In addition to the above sites, this book’s website, http://www.nelson.com/student, provides useful and up-to-date links to accompany this text.

TOOLKIT 1.1 A GUIDE TO INTERNET SITES

Working in Canada www.workingincanada.gc.ca

LinkedIn www.linkedin.com

Monster.ca www.monster.ca

Workopolis www.workopolis.com

Eluta www.eluta.ca

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Quality Meeting customer expectations and providing excellent customer service are essential for any organization. In addition to focusing on internal management issues, managers must also meet customer requirements of quality, innovation, variety, and responsiveness. These standards often separate the winners from the losers in today’s competitive world. How well does a com- pany understand its customers’ needs? How fast can it develop and get a new product to market? How effectively has it responded to special concerns? “Better, faster, cheaper”—these standards require organizations to constantly align their processes with customer needs. Management approaches, such as quality management, Six Sigma, and Lean, outlined below, provide com- prehensive approaches to responding to customers. These have direct implications for HR: the requirement to hire staff that can work in teams, the necessity of having compensation systems that support quality objectives, and the need to have performance management systems that recognize the importance of customer satisfaction and service excellence.

FIGURE 1.3 Innovation Skills Profile 2.0

The Conference Board of Canada, as a nonprofit applied research organization, helps identify skills necessary to help organizations be more innovative and productive. Here are some of those skills:

Creativity, problem-solving, and continuous improvement skills—necessary to generate ideas • Seeking different points of view and exploring options

• Being adaptable

• Asking questions

• Putting forward own ideas

• Looking for surprising connections

Risk assessment and risk-taking skills—necessary for being entrepreneurial • Being comfortable when pursuing new opportunities

• Assessing and managing risk

• Keeping goals in sight

• Willing to experiment

• Learning from experiences

Relationship-building and communication skills—necessary to develop and maintain interpersonal relationships

• Engaging others

• Building and maintaining relationships in and outside the organization

• Sharing information

• Respecting and supporting other ideas

Implementation skills—necessary to turn ideas into capabilities, processes, products, and services

• Setting realistic goals

• Accessing and applying knowledge

• Using the right tools and technologies

• Using measurements to show the value of a solution

• Accepting feedback and learn from mistakes

• Being accountable

Source: Adapted from the Conference Board of Canada, Innovation Skills Profile 2.0 found at http://www.conferenceboard.ca/cbi/ innovationskills.aspx. Reproduced with permission from the Conference Board of Canada.

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The focus on quality began over 60 years ago with total quality management (TQM) and was based on a management philosophy that focused on understanding customer needs, involving employees, using fact-based decision making, communicating, doing things right the first time, and improving continuously.40 A number of studies, pioneered by management expert W. Edwards Deming, have demonstrated the strong positive link between a focus on quality and higher customer satisfaction.41

Companies such as Xerox, Hitachi, and Home Depot then adopted a more systematic approach to quality, called Six Sigma, which includes major changes in management philosophy and HR programs. Six Sigma is a statistical method of translating a customer’s needs into sep- arate tasks and defining the best way to perform each task in concert with the others. Six Sigma makes the improvements through measurement and data analysis.42 The approach can also be used for internal organizational processes that deal with internal “customers.” What makes Six Sigma different from other quality efforts is that it catches mistakes before they happen.

Lean is similar to Six Sigma, but it is a more inclusive organizational system of improvements that maximize customer value and minimize waste.43 It was pioneered by Toyota as a way to look at not just individual machines but the overall flow of the production through the total process.44 Since then, Lean has been used by many organizations from manufacturing to services. For example, the Saskatchewan healthcare system is using it to improve efficiency, quality, and cus- tomer service.45 Another expert believes Lean builds trust and fosters employee engagement.46

Benchmarking looks at the “best practices” in other companies, whether competitors or not. By looking at other companies, managers and employees can assess if something might be used in their organization to improve overall performance. For example, the University of Calgary has benchmarked how the practice of law is changing and how adults learn so that its law school can create “excellence in lawyering.”47

Key to all of these techniques are good and appropriate HR practices. One reason good HR practices are so essential to programs such as Six Sigma is that they help balance two opposing forces. Six Sigma’s focus on continuous improvement drives the system toward disequilibrium, while Six Sigma’s focus on customers, management systems, and the like provides the restraining forces that keep the system together. HR practices help managers balance these forces. Hence, the manager plays a key role in motivating employees to care about quality and helping the company foster a work environment that will allow employees to succeed in quality initiatives. Read At Work with HRM 1.2 to learn more about what organizations can do to become excellent at what they do.

Six Sigma A process used to translate customer needs into a set of optimal tasks performed in concert with one another Lean Organizational system of improvements that maximize customer value and minimize waste

Benchmarking Finding the best practices in other organizations that can be brought into a company to enhance performance

Lab technicians need technical skills as well as the ability to work with others.

The Baldrige Performance Excellence Program www.nist.gov/baldrige