Weekly Schedule

Week 1 – Strategic Management

- Overview of the textbook

o
- Strategic management
o Refers to the organization, the corporation, and the business
 Different lines of business
 Corporate strategy determines what those lines of
business do. It guides them
- Strategic human resources management
o Strategic management of people within organizations affects
importation organizational outcomes such as survival,
profitability, customer satisfaction levels and employee
performance
- A need for strategic HRM
o Managers need to examine HR implications of their
organizational strategies, as well as the various terms used to
define strategy and its processes
o HRM programs and policies enable and align to meet
organizational strategies
- Strategy 1
o The formulation of organizational objectives, completive scopes,
and action plans for gaining advantages
o Plan for how the organization intends to achieve its goals
- Descriptions of strategy: overview
o Common terms


 Strategic intent – aspirational plans, overarching
purpose or intended direction of travel needed to
reach an organizational goal
 Strategy formulation – the process of establishing
goals and determining the proper plan of action to
achieve said goals
 Each step flows into the next with a cyclical pattern
forming
- Strategy strategic intent, strategic planning
o Strategy – a declaration of intent
o Strategic intent – a tangible corporate goal; a point of view about
the competitive positions a company hops to build over a decade
o Strategic planning – the systematic determination of goals and
the plans to achieve them
- Formulation, implementation, objectives
o Strategy formulation – process of conceptualizing the mission of
an organization, identifying the strategy, and developing long-
term performance goals
 o Strategy implementation – those activities that EEs and
managers of an organization undertake to enact the plan and to
achieve the performance goals
o Objectives – the goals or the end
- Plans and policies
o Plans – the product of strategy, the means to an end
o Strategic plan – a written statement that outlines the future goals
of an organization, including long term goals
o Policies – broad guidelines to action, which establish parameters
or rules
- Strategic planning and predicting the future
o Planning for the long term is difficult
o Strategic planners look at 3-5 year terms
o Plans are formulated to be somewhat flexible so they can
respond to change in the environment
o Strategic planning is a dynamic process
- Events to stimulate change in strategy
o New CEO
o Threat of a change in ownership
o External intervention
o Performance gap
o Strategic inflection point
- Strategic process
o
- Basic strategies
o Corporate
 Organizational level decisions that focuses on long term
survival


 Restructuring strategies
o Turnaround
 An attempt to increase the viability of an
organization
o Divestiture
 The sale of a division or part of an
organization
o Liquidation
 The termination of a business and the
sale of its assets
o Bankruptcy
 A formal procudre in which an appointed
trustee in bankruptcy takes possession of
 a business’ assets and disposes of them
in an orderly fashion
 Growth strategies
o Incremental
 Can be attained by expanding the client
base, increasing products or services,
changing the distribution networks or
using tech
o International
 Seeking new customers or markets by
expanding internationally
o Acquisition
 The purchase of one company by another
o Mergers
 Two organizations combine resources and
become one
o Business
 Plans to build a competitive focus in one line of business
 The determination of the basic long term goals and
objectives of an organization and the adoption of courses
or action and the allocation of resources necessary to
achieve the goals
 Concerns itself with how to build a strong competitive
position
 A business strategy is the action plan for a single line of
business to gain competitive advantage
- Stability strategies
o Maintenance strategies where companies do not wish to see
their companies grow and so their strategic HRM practices
remain constant
- The strategic planning process
1. Establish the mission, values and vision
o Mission statement – an articulation of the purpose fo the
organization and the values it creates for customers
o Vision statement – defines an organization long term goals
uniting the organization’s efforts
o Values – the basic beliefs tht govern individual and group
behaviour in an organization
2. Develop objectives
 o The management team develops short term objectives to realize
its high level mission, vision and value
o Objectives are an expression in measurable terms, of what an
organization intends to achieve
o Hard goals vs soft goals
 Hard goals always include numbers usually relative to the
previous year’s performance or to competition
3. Analyze the external environment
o Managers must be aware of threats and opportunities in the
external environment
o By scanning and monitoring tech, laws and regulations, and
other relevant factors, managers can make reactive and
proactive changes to the strategic plan
4. Identify the competitive advantage
o The characteristics of a firm that enable it to earn higher rates of
profit
 Resources that allow a firm to perform more effectively and
efficiently than other fall into 3 categories
 Tangible assets
 intangible assets
 capabilities
5. Determine the competitive position
6. Implement the strategy
7. Evaluate the performance
- Emerging capability
o Agility
 The organization’s capacity to respond, adapt quickly and
thrive in changing environments and the ability of
organizations to build and reconfigure
o Persistence
 The ability to bounce back from difficulty and absorb, learn
and even re-invent
- The resource-based view: VRIO analysis
o To sustain competitive advance, resources and capabilities must
meet 4 criteria:
 They are valuable to the firm’s strategy
 They are rare
 They are inimitable
 They can be organized by the firm
 - SWOT
o An analysis tool for analysing a company’s resource capabilities
and deficiencies
 Strengths
 Weaknesses
 Opportunities
 Threats
- Porter’s generic competitive strategies
o Low cost provider strategies
o Broad differentiation strategies
o Best cost provider strategies
o Focused or market niche sstrategy based on lower cost
o Focused or market niche strategy based on differentiation
- Benefits of strategy formulation
o Clarity
o Coordination
o Efficiency
o Incentives
o Adjustments
o Change
o Career development
- Errors in strategic planning
o Relegating the process to official planners and not involving
execs, managers and EEs, resulting in no buy in
o Failing to use the plan as the guide to making decisions and
evaluating performance
o Failing to align incentives and other HR policies to the
achievement of the strategy
- Understanding the process
o It is the essential first step to creating an HR strategy that makes
sense for the organization
o By understanding strategies and business needs, HR
professionals move from and admin role to a strategic partner
role

Week 2: Aligning HR with Strategy

- Human Resources Management
 o Overarching HR philosophies that specify the values that inform
an organization’s policies and practices
o Formal HR policies that direct and partially constrain the
development of specific practices, such as to increase workforce
diversity
o Specific HR practices such as recruitment, selection, and
appraisal
o HRM is continually positioned with Organizational strategy,
policies and culture
- Strategic HRM
o The management of HR philosophies, policies and practices to
enable the achievement of the organizational strategy
o These philosophies, policies and practices form a system that
attracts develops, motivates and trains employees, who ensure
the survival and effective functioning of the organization and its
members
- Strategic HR contributions
o Strategic HR researchers and practitioners know that HRM can
make strategic contributions to organizations
o The implementation of high performance HR systems has
significantly predicted various organizational performance
indicators
- Resource based view – a reminder from Ch. 1
o A resource that provides a sustained competitive advantage
because its culture is valuable, rare and very difficult to imitate
or substitute
o HR can be difficult for competitors to imitate
 The best human resources are rare
 Their value can be hard to substitute

Note that each theory has its pros and cons and can lead to deliberaly
different results

- Contingency perspective
o Is explained by human capital and behavioural theories
o Refers to the need to modify HR strategies relative to the
business and organizational strategies
o Indicates that fit, interaction or alignment between human
resource management (HRM) strategies and organizational
strategy have a great effect on effective performance.
 Suggests that an organization's most suitable management
style depends on the context or environment.
- Human Capital theory
o The collective sum of employees’ attributes, experiences,
knowledge, and commitment invested in the organization
o Classical economists view the firm as having control over 3 types
of resources in the production of goods and services
 Land
 Labor or human capital
 Capital
- Human capital is an intangible asset
o Human capital is an intangible asset that also includes:
 Knowledge
 Education
 Vocational qualifications
 Professional certifications
 Work-related experience
 Competence of an organization’s employees
- Human Capital value added
o The value added of human capital investments or the human
capital ROI can be calculated by:


- Behavioural theory
o Different HR strategies are required to influence the diverse
behaviours of employees.
o The purpose of HR practices is to shape employee behaviour.
o The HR department is asked to define and develop the
behaviours necessary to achieve organizational capabilities of
innovation, speed, and accountability.
- Strategic HR planning options
o HRM issues are often cited as a threat to an organization’s ability
to execute strategy.
o Free will, complex behaviours, and human capital make
effectively planning and managing human resources extremely
difficult.
- Additional Strategic HR planning options
o Forecasting supply and demand of human resources
 o Tailoring HR policies and practices to the organizational needs of
the future
- Strategic HR planning
o HR planning is the most important long-term HR priority for
Canadian organizations.
o HR must demonstrate real value in its ability to deliver the
behaviours needed to enable organizational strategy.
- Importance of strategic HR planning
o Two reasons strategic HR planning is important:
 Employees help an organization achieve success because
they are its strategic resources.
 An HR planning process results in improved goal
attainment.
- Employees as strategic resources
o HR planning ensures human assets are managed and matched to
the organizational strategy
o Keeping employees’ skills current
o Ensuring employees’ skills will enable the organization to
implement its strategy
- Improved goal attainment
o Strategic HRM can improve an organization’s performance.
o Focuses employees on important missions and goals of the
organization.
o Increases motivation and performance; lowers absenteeism and
turnover; and heightens stability, satisfaction, and involvement.
- Linking HR processes to strategy
o Aligning HR strategy with business strategy can be done in one
of the following ways:
 Start with organizational strategy and then create HR
strategy
 Start with HR competencies and then craft corporate
strategies based on these competencies
 Apply a combination of both in a form of reciprocal
relationship
- Corporate strategy leads to HR strategy
o HR planning views HRM programs as flowing from corporate
strategy.
- Low cost provider strategy
 o Costs are an important element of this strategy, so labour costs
are carefully controlled for all HR functions.
- Differentiation strategy
o A differentiation strategy will offer something unique and
valuable to its customers.
o The differentiation is perceived to be of value to customers while
keeping costs down.
o A differentiation strategy calls for innovation and creativity
among employees
o HRM is affected in fundamentally different ways in organizations
that want to use employees’ brains rather than their limited
(mainly manual) skills.
- HR competencies lead to business strategy
o An organization cannot implement a strategy if it does not have
the necessary human resources.
- Reciprocal interdependency
o A reciprocal interdependency exists between HR strategy and
business strategy.
o Both strategies influence each other.
o Changes to one type of strategy will require changes to the other
type.
o HR should build its strategy by acknowledging the main issues
facing the business.

- Concurrent strategy
o Requires concurrent strategy formulation
o Strategy development is conducted at the same time that HRM
issues are considered
o HR professionals play a more strategic role, moving from outsider
to insider status
o HR manager is no longer the auditor, but a partner and problem
solver
- Strategic partnering
o CEOs want HR to be business people first, then HR leaders.
o CEOs wish that HR executives would be less concerned with
narrow HR policies and processes and focus on answering the
question:
 “Do we have the organization design and people to achieve
our plan?”
 o There is still some discrimination aimed at HR managers from the
other functional managers because of the perception that HR
deals only with people as opposed to strategy.
- Becoming more strategic
o HR departments are restructuring in order to be able to do the
basics right while enhancing the performance of business units
and supporting strategic moves.
o HR must become a business partner.
- Human resources as business partner
o A HR business partner (HRBP) is a member of the HR team who is
assigned to represent human resources in specific business units,
working directly with the leadership of the units in a consulting
and coaching role.
- Matrix HR model
o “Matrix HR model” or “shared services model” encompasses four
distinct HR roles:
o corporate HR, which oversees the organization’s overall HR
function;
o shared service centres, which carry out the routine, standardized
HR transactions (e.g., payroll, relocation);
o “Matrix HR model” or “shared services model”
encompasses four distinct HR roles:
 Corporate HR
 Shared service centres
 Centres of expertise (COEs)
 Embedded HR in the person of the HRBP
o Corporate HR oversees the organization’s overall HR function.
o Shared service centres carry out the routine, standardized HR
transactions (e.g., payroll, relocation).
o Centres of expertise (COEs) where HR specialists create and
manage corporate HR programs (e.g., learning and development,
leadership, wellness).
o Embedded HR in the person of the HRBP works directly with line
managers to ensure that HR programs and processes are aligned
with, and contribute to, the business strategy of individual
business units.
- HR strategy differentiation
o Firms with more than one business strategy are likely to have
more than one approach to HR strategy.
 o Different divisions are responsible for realizing different aspects
of the strategy.
 Employees in different divisions may be encouraged to
display different behaviours through appropriate HR
practices.
- Characteristics of an effective HR strategy
o External fit
 HR programs must align with or fit the overall strategy of
the organization.
o Internal fit
 HR must fit with other functional areas, such as marketing,
and among all HR programs.
- Agility
o An agile organization has a set of values and methodology that
emphasize a continuous process of experimentation, feedback,
and improvement to maximize customer value.
o HR is not static.
o There needs to be a tight fit between business and HR strategies.
- Evolutionary HR
o There is a need to be fluid to adapt to changing circumstances.
o It can be thought of as evolutionary HR:
 Sensing and responding to changes so that HR practices
align with changing organizational needs and
circumstances.
- Measuring results

o
- Summary
o L.O. 2.1 Strategic HRM is a set of distinct but interrelated
philosophies, policies, and practices with the goal of enabling the
organization to achieve its strategy.
o L.O. 2.2 HR strategy is embedded in theories of the resource-
based view of the firm and in contingency perspectives, including
the behavioural perspective, and the human capital approach.
o L.O. 2.3 HR planning has been identified by executives as the
most important long-term HR priority for organizations.
 o L.O. 2.4 By involving HR in discussions of strategic policies, an
organization has a better chance of being effective in the
implementation of these policies.
o L.O. 2.5 Aligning HR strategy with the corporate strategy
(external fit) and with other functional strategies (internal fit) is
important to the achievement of results.

Week 3: Environmental influences on HRM/

The HR forecasting process
- Environmental scanning
o This is the systematic monitoring of the major factors influencing
the organization to identify trends that might affect the
formulation and implementation of both organizational and HR
strategies.
o A lack of environmental scanning is often what gets
organizations into major trouble.
o Once successful, there is a tendency for organizations to sit back
on their laurels and assume that success will support the status
quo.
 Managers sometimes forget that constant monitoring of
the external environment is essential because an
organization does not exist in isolation.
- Stages of analysis
o The analysis of the external environment consists of these
stages:
 Scanning
 Monitoring
 Forecasting
 Assessing

- Sources and methods

o HR professionals rely on many sources of information, including:
 Business publications and media
 Professional associations
 Conferences/workshops
 Professional consultants
 Research journals
 o It is important for managers to keep up-to-date on organizational
trends inside and outside of their industries.
- Methods of forecasting
o HR professionals use several methods to generate predictions
about the future or extrapolate from current events to determine
their impact on HR practices.
- Scenario based HR planning
o Four-step approach:
 Assess business scenarios and how they may play out over
a five-year term.
 Assess the firm’s HR readiness and possible challenges.
 Identify HR’s strengths and weaknesses, employee needs,
and threats.
 Identify HR initiatives and programs that must be
undertaken to deal with threats and opportunities.
- Competitive intelligence
o A formal approach to obtain information about competitors
o Information gathered through competitive intelligence methods
must be subjected to two evaluation questions:
 Is the source reliable?
 What is the likelihood of the information being correct?
o Are there opportunities to breach organizational ethics while
attempting to obtain information about competitors?
- Challenges in Environmental scanning
o Inability to:
 Accurately predict the future
 Isolate what really is important to HR

- Isolating critical from insignificant

o Four criteria have been suggested for identifying significant
trends:
 Are there ripple effects?
 How profound are the impacts on people’s priorities, roles,
and expectations?
 How large is the impact scope?
 Will the changes endure over time?
 o Few trends exist in isolation
- Environmental factors
o Economic climate
o Globalization
o Political and legislative factors
o Technology
o Demographics
o Social and cultural factors
- Economic climate
o Unemployment rate
o Cost of fuel/commuting
o Value of the Canadian dollar
o Public debt
o Interest rates
o Gig economy
- Globalization
o The growth in flow of trade and financial capital across borders.
o It affects sovereignty, prosperity, jobs, wages, and social
legislation.
o One in five jobs in Canada is related to international trade.
o Related issues
 Globalization issues include the following:
 Crisis management
 Vacation in cases of terrorism
 Civil war
 Outbreak of infectious diseases
 Impacted by increasing global supply chains and
compatible technologies
- Political and legislative factors
o Provincial and federal governments influence organizations by:
 Emphasizing tax cuts
 Providing tax incentives to develop jobs
 Increasing job-training opportunities
 Creating balanced labour legislation
o Decisions not governed by law are usually governed by morals or
ethical codes.
o There is always a lag between what is occurring in the business
community and legislative changes.
- Technology
 o HR technology encompasses software and hardware that
automates HR tasks.
o There is an increased use of artificial intelligence to replace
human work and workers.
o The Fourth Industrial Revolution
 It conceptualizes rapid changes in technology, industries,
and societal patterns and processes in the twenty-first
century due to increasing interconnectivity and smart
automation.
- Demographics
o The study of population statistics, including:
 Labour market
 Diversity
 Generational differences
o Recent workforce trends include dramatic reduction in semi-
skilled workforce
- Social and cultural factors
o Right to privacy: Laws and regulations in effect, but still
questions as to employer’s moral right to monitor employee
activities
o Work–life balance: Quality time with families while pursuing a
career, desire to have better quality of life: elder care, child care,
flextime, telecommuting, reduced hours, part-time hours, job
sharing
o Contingent workers: Aimed at part-time, seasonal, temporary,
and contract employees
 Constituent groups: Groups of people who have an interest
in the projects, policies, or outcomes of an organization’s
decisions, including board of directors, senior
management, supervisors, employees, unions
- Remote work and contingent workers
o Remote Work
 Accelerated by COVID-19 pandemic
o Contingent Workers
 Aimed at part-time, seasonal, temporary, and contract
employees
o Constituent groups
 Groups of people who have an interest in the projects,
policies, or outcomes of an organization’s decisions,
 including board of directors, senior management,
supervisors, employees, unions
- Responding to external factors
o Most organizations examine the following two factors to
determine which are the most important trends that may affect
them:
 The probability of these trends actually occurring
 The likely impact of each of these trends on the
organization
- Proactive approach
o HR managers are not passive observers; they want to participate
and to influence the trends.
o Some organizations will lobby for legislative changes and shape
perceptions.
o Organizations can use a SWOT analysis to determine the impact
of the business environment on the organization.
- Summary
o L.O. 3.1 Environmental factors have varying degrees of
influence on organizations.
o L.O. 3.2 HR professionals can use a variety of methods to
forecast the future or extrapolate from current events to
determine the impact on HR practises.
o L.O. 3.3 Challenges in environmental scanning include trying to
isolate the critical issues from the insignificant trends.
o L.O. 3.4 HR strategists keep an eye on a variety of
environmental factors, including the economic climate; the
political and regulatory environment; and issues concerning
technology, demographics, and social and cultural values and
norms.
o L.O. 3.5 Constituent groups such as shareholders, unions,
customers, and executives contribute strongly to the formulation
and implementation of strategy.
o L.O. 3.6 HR professionals need to assess the importance and
severity of the trends and respond proactively.
- HR forecasting
o This is the process of ascertaining the net requirement for human
capital by determining the demand for and supply of human
resources now and in the future.
- Strategic importance of HR forecasting
o Most beneficial when demand is high for jobs, particularly for
specialized jobs
o Can ensure the necessary human capital is available to the firm,
despite its scarcity in the labour market
- Reducing HR costs
o Effective HR forecasting focuses on a comparison between the
organization’s current job-related knowledge, skills, abilities, and
other characteristics (KSAOs) that workers must have to perform
successfully in the position and those desired in the workforce of
the future.
- HR forecasting as a proactive process
o Increases the number of viable policy options available to the
organization
o Enhances flexibility
- Increasing Organizational Flexibility
o Predicated on trends, assumptions, scenarios, and various
planning time horizons
 Encourages the development of a wide range of possible
HR policy options and programs
o Each of the HR programming options are ranked, subjected to
cost–benefit analyses, and allocated organizational resources
after careful examination
- HR gaps and surpluses
o HR gap
 Insufficient human capital to meet operational needs
o HR surplus
 Organization has more human capital than needed
- Macro business forecasting process
o Must align with overall organizational business goals
o Eliminates possibility that HR policies will veer away from
organization’s overall operating and production policies
o Business forecasting process establishes overall organizational
objectives, which are input into HR forecasting process
- Organizational requirements and HR
o Desired organizational goals and objectives must take priority
over all issues concerning HR resource scarcity and
implementation issues.
o The first step in the process is the calculation of organizational
requirements.
- Source of human capital
o Determining the source of human capital (the availability or
supply of workers) is done only once the process of evaluating
human capital requirements for current and future time horizons
has been finalized.
- Job analysis
o It is a systematic process for determining the critical knowledge,
skills, abilities, and other attributes (KSAOs) that are relevant to
performance in a particular job.
o Job analysis is the source for job descriptions.
- Critical KSAOs
o The critical KSAOs required for a job are the basis for determining
the following:
 Selection requirements
 Training needs
 Performance evaluation
- Job analysis Vs competency modeling
o Job analysis
 Arrives at a very detailed, granular set of job requirements
o Competency modelling
 Less detailed, and outcomes are more abstract than KSAOs
- Value of human capital
o Types of human capital
 Generic human capital:
 Competencies, knowledge, skills, and abilities that
are held by individual employees and that are useful
to the firm
 Firm-specific human capital:
 Competencies, knowledge, skills, and abilities that
employees possess based on their tacit knowledge,
and learned from experience and through mentorship
in the organization
  Human capital generally comes to the firm in the form of
generic human capital, which over time develops into firm-
specific human capital.
- Human capital stock and flow
o Human capital stock:
 This is the amount of any specific form of human capital
that is available to the firm at any given time.

o Human capital flow:

 This is the change in the stock of human capital over time.
 Factors that affect the flow of human capital include
terminations, promotions, lateral movements, and
demotions.
- Job requirements Vs task requirements
o Organizations are beginning to move away from the job to align
human capital with specific tasks.
o Using the job as the unit of analysis for human capital
requirements might be becoming redundant.
- Project management and human capital planning
o Projects are generally worked on by a team of experts with skills
that are relevant to producing the desired outcome.
o The outcome of the project is usually related to increasing value
for the customer or supporting some aspect of the business
function.
- Waterfall and agile project management
o Waterfall
 A traditional approach to project management in which the
main goals are established at the outset of the project
o Agile
 A flexible, step-by-step approach to project management
that allows for rapid innovation and learning to be
incorporate into a project
- Scrum project management
o This is a form of Agile project management that is intended to
help plan and schedule the activities necessary to complete a
particular objective.
- Analyzing key human capital
o Strategic Forecasting
  Human capital needs flow from strategic business
challenges.
 The question of human capital needs is derived from
asking how human capital can be used to solve a business
problem
o Four designated groups include people of Aboriginal descent,
women, persons with disabilities, and members of visible
minorities.
- Categories for human capital requirements
o Specialist/Technical/Professional Workers
o Diversity/Equity/Inclusion
o Managers and Executives
o Recruits

- Forecasting process
o Determine the staffing needs by skills, skill levels, or jobs.
 This macro-level activity begins with a thorough
understanding of the organization’s strategy and
environmental scanning in order to determine the relevant
pieces of information and types of analyses that are most
suited to what is being forecast.
o Perform the analyses to determine the number of required
employees.
 This involves an assessment of in-house skills and other
internal supply characteristics as well as determining the
demand requirement that must be met from external
sources. The type of analysis can be qualitative or
quantitative, and the focus of the analysis can range from
simple headcounts to strategic scenario planning. Methods
of forecasting the demand for and supply of human capital
will be discussed in Chapter 5, Determining HR Demand,
Chapter 6, Ascertaining HR Supply, and Chapter 7,
Succession Management.
o Create a budget to determine the costs involved in fulfilling the
stated organizational requirements.
o Put HR programs and policies into place to ensure that the
demand and supply requirements are met, and track the results.
  Measures of production, efficiency, employee performance,
or group performance may be used to assess the results of
the forecasting process (Chuler and Walker 1990, 4–19).
- Forecasting requirements
o Demand forecasting:
 The process of determining the organization’s requirement
for specific forms of human capital
o Supply forecasting:
 The process of determining the source or sources of human
capital to satisfy the organization’s demand
- Forecasting methods
o Survey the business line for their anticipated needs.
 This method includes subjective decisions such as personal
rules of thumb (e.g., a line manager may have a seasonal
forecast rule of thumb that sales staff requirements double
in the summer months).

o Norm-based rules.
 This is a very common method of forecasting in which
existing assumptions based on historical data are used to
create ratios of production or sales amounts to human
capital needs. This category includes trend analysis, which
will be discussed more in Chapter 5.
o Time series– and regression-based models.
 These types of models are largely based on objective data
such as sales levels, marketing efforts, and seasonality or
historical demand, and are able to incorporate more
information than norm-based rules in determining the
forecast.
o Mathematical and econometric models.
 While these types of models can be relatively simple and
straightforward, they can also become quite complex (refer
to HR Planning Notebook 4.6.2 for more discussion around
the use of simple versus complex forecasting models).
Examples of models in this category include Markov
models, simulations, and structural equation modelling.
These models are highly data driven, and can incorporate a
large number of assumptions and variables. This allows for
 very sophisticated modelling, but requires a relatively high
degree of expertise in constructing the analysis, and is
dependent on the quality of the data that are used in the
model. A primary benefit of artificial intelligence such as
IBM’s Watson is that complex models such as these will
eventually become easier to construct so that little or no
specialized mathematical or statistical knowledge will be
necessary to perform these types of analyses.
o Qualitative models.
 This category of models is based on human judgment, and
includes methods such as the Delphi Technique, focus
groups, Nominal Group Technique, and scenario planning. A
primary benefit to qualitative models is that human
judgment may be best suited when a high degree of
uncertainty exists or if the data or expertise is not
available to construct a quantitative model. For example,
the automobile industry and its movement toward electric-
powered vehicles and autonomous vehicles carries many
questions around how automobile manufacturers should
focus their human capital. Should research and design
resources be moved away from gasoline and diesel-
powered vehicles and toward these newer technologies
and, if so, how much should be invested in these newer
technologies? These decisions are based on many factors
such as management preferences, consumer demand,
government involvement in building new infrastructure to
accommodate new technology, and broader economic
trends. Such decisions are probably best made using
qualitative methods.
o Advent of artificial intelligence (AI) will impact methods of
forecasting into the next decade
- HR forecasting Time Horizons
o Current forecast:
 The current forecast is the one being used to meet the
immediate operational needs of the organization. The
associated time frame is up to the end of the current
operating cycle, or a maximum of one year into the future.
o Short-run forecast:
 The short-run forecast extends forward from the current
forecast and states the HR requirements for the next one-
 to two-year period beyond the current operational
requirements.
o Medium-run forecast:
 Most organizations define the medium-run forecast as the
one that identifies requirements for two to five years into
the future.
o Long-run forecast:
 Due to uncertainty and the significant number and types of
changes that can affect the organization’s operations, the
long-run forecast is by necessity extremely flexible and is a
statement of probable requirements given a set of current
assumptions. The typical long-run forecast extends five or
more years ahead of the current operational period (Bechet
and Walker 1993, 1–16; Walker 1980).
- Predictions and projections
o Prediction
 A single numerical estimate of HR requirements associated
with a specific time horizon and set of assumptions
o Projection
 Incorporates several HR estimates based on a variety of
assumptions
o Envelope
 The range of plausible values of a prediction based on a
given set of assumptions
- Scenarios and contingency plans
o Scenarios
 Proposed sequences of events with their own set of
assumptions and associated program details
o Contingency plans
 Implemented when severe, unanticipated changes to
organizational or environmental factors completely negate
the usefulness of the existing HR forecasting predictions or
projections
- Reconciling Net HR requirements
o Forecast for human capital demand is compared to the forecast
of required human capital supply
o A gap or shortfall in supply of human capital requires addressing
internal movement, external hiring, or a combination of both
- Addressing surplus
 o A surplus in the supply of human capital can be addressed
through various HR policies and programs, such as job sharing,
attrition, or a hiring freeze, in order to reduce the size of the
workforce.
- Summary
o L.O. 4.1 The advantages of instituting effective forecasting
procedures include reducing the costs of HR, increasing the
flexibility of the organization, ensuring a close link to the process
of business forecasting, and ensuring that the requirements of
the organization take precedence over other specific issues.
o L.O. 4.2 Job analysis and competency modelling is important
when establishing the necessary knowledge, skills, abilities, and
other attributes required to implement the firm's strategic plan.
o L.O. 4.3 According to human capital theory, investments in
human capital take time to produce financial or productivity-
based returns to the firm. This is because human capital
generally enters the firm in the form of generic human capital,
which develops over time into firm-specific human capital.
o L.O. 4.4 A project is any type of temporary assignment that is
intended to result in a product, service, or policy.
o L.O. 4.5 Some job groups—executives or specialist/technical
employee groups, especially those with hot and critical skills, for
example—attract special attention in the HR demand and supply
reconciliation process.
o L.O. 4.6 Many factors influence the forecasting process,
including internal organizational features and external factors
that influence the firm.
o L.O. 4.7 Flexibility in the programs HR managers use to balance
human capital demand and supply is necessary.

Week 4: Determining HR demand

- Forecasting Demand
o HR demand refers to the firm’s future need for human capital,
the types of jobs, and the number of positions that must be filled
for the firm to implement its strategy.
o The demand for human capital is determined by the strategic
and operational requirements of the firm or business unit.
 o The demand for talent begins with the firm’s strategy, and flows
from the value-generating activities of the firm.
- Role of job analysis in forecasting demand
o Job analysis provides the organization with a prioritized list of
duties, tasks, and the (knowledge, skills, abilities, and other
attributes) KSAOs required to perform those tasks.
- Certainty in forecasting
o Some quantitative models are based on what is known about
existing relationships between a level of consumer demand or
production, where a forecast already exists.
- Accuracy in Forecasting
o Accuracy in forecasting can be improved by including more
factors that contribute to the changes in demand.
o Quantitative models are better when forecasting demand in
stable markets when there is a high degree of certainty in the
relationship between the demand for labour and the indicators of
that demand.
- Volume and complexity of available data
o As the volume and complexity of data that are available
increase, quantitative models can deal with higher levels of
uncertainty.
o But when levels of uncertainty become very high, qualitative
models become preferable.
- Quantitative methods
o Trend/Ratio analysis
 Trend analysis
 Useful to forecast labor requirements
 Ratio analysis
 A straightforward method of examining the
relationship between an operational index and the
demand for labour
 Can be used to calculate demand requirements for
direct labour and indirect labour
 Commonly used by many organizations
 Could calculate ratio of sales to employees, the
number of units produced, the number of clients
serviced, or production (i.e., direct labour) hours
 5 steps for effective ratio analysis
 o Select the appropriate business/operational
index
o Track the operational index over time
o Track the workforce size over time
o Calculate the average ratio of the operational
index to the workforce size
o Calculate the forecasted demand for labour
o Time series models
 Uses past data to predict future demand
 Can be a simple moving average or a weighted moving
average, or can use exponential smoothing
o Correlation
 Correlation
 Describes the strength of a relationship between two
variables
 Shared variance
 Defines how much one variable can be predicted by
the other variable
o Regression analysis
 This is a forecasting method that extrapolates from
historical trends.
 Regression models help HR planners to use large amounts
of organizational data.
 These models can be easily adapted to reflect
organizational changes or new assumptions, and are a
good choice for short-term, medium-term, and long-term
forecasts.
 Regression Analysis and Linear Relationships
 Presupposes that a linear relationship exists between
one or more independent (causal, or predictor)
variables, which are predicted to affect the
dependent (criterion) variable, future HR demand for
human capital
o Structural equation modelling (SEM)
 A statistical technique that permits the testing of multiple
relationships simultaneously in a theoretically derived
model
  Forecasters can develop a model of labour demand based
on their own theory as to what factors may be driving
demand
 Requires more data observations than regression

o Machine learning and artificial intelligence (AI)

 Artificial intelligence and machine learning enable the
ability to find patterns in large amounts of data that would
otherwise not be detectable
 Artificial intelligence and machine learning tools:
 Categorization methods
 Prediction methods
 Neural networks
 Random forests
- Qualitative models
o Preferable when there is a large degree of uncertainty
o Useful when no formal planning exists, and no formal data
collection occurs
- Management survey
o Direct managerial input is the most commonly used method for
determining workforce requirements.
o Managers anticipate their needs over the near term, and submit
requests based on their knowledge of and past experience with
the business.
- Scenario planning
o Often used to develop organizational strategy
 o Participants envision possible future conditions in which the
organization might operate
o Requires participants to challenge existing assumptions and
generate vivid pictures of possible future states

o Scenario planning process

 Propose the forecasting question about the future state of
the firm or environment
 Generate a list of factors that are likely to influence the
outcome in question
 Sort the factors into naturally occurring groups and rank
the groups according to their importance to the main
question and the ability of the firm to control the factor
 Select the two groups of factors that are likely to have the
strongest and most unpredictable impact on the question
and create four quadrants
 Name and describe in story form each of the resulting
quadrants
 Suggest the skills, competencies, and organizational
requirements that would be necessary for the firm to be
able to operate in each of these four worlds
 Generate a demand forecast necessary to fulfill the firm’s
requirements in each of the four worlds
- Delphi technique
o A process in which the forecasts and judgments of a selected
group of experts are solicited and summarized in an attempt to
determine the future HR demand
 Advantages
 Avoids many of the problems associated with face-to-
face groups, including reluctance on the part of
individual experts to participate
o Due to (1) shyness, (2) perceived lower status
or authority, (3) perceived communication
deficiencies, (4) issues of individual dominance
and groupthink.
 Disadvantages
 Time and costs
 Results cannot be validated statistically
 Selection of experts can skew the results
  Potentially insufficient attention given to developing
criteria due to having too narrow a scope of experts

- Nominal group technique

o Long-run forecasting technique utilizing expert assessments
- HR budgets
o Quantitative, operational, or short-run demand estimates that
contain the number and types of jobs required by the
organization as a whole and for each subunit, division, or
department
- Staffing table
o HR budget process produces a staffing table
 o Information about a set of operational assumptions or levels of
activity
o Total HR demand requirement for operational or short-run time
periods
- Combining qualitative and quantitative methods
o Two basic methods can both be used in order to test the
reliability of the forecast
- Summary
o L.O. 5.1 While demand forecasts will never be exact, the
dramatic increase in the kinds of data available to HR planners
today offers the potential to increase the precision (and
complexity) of quantitative demand models.
o L.O. 5.2 Quantitative models are most useful when the past is
expected to be a good predictor of the future.
o L.O. 5.3 Qualitative methods range from a single manager’s
estimate to methods that challenge current assumptions like
scenario planning, to models that increase the validity and
reliability of expert judgments such as Delphi technique and
nominal group technique.
o LO. 5.4 Demand forecasts are imperfect. HR planners must
understand the assumptions that form the basis of their forecasts
and the sensitivity of the forecast to deviations from these
assumptions.

Week 5: Ascertaining HR supply

- Internal Human Capital
o Existing employees who can be retrained, promoted, transferred,
or otherwise redeployed to fill anticipated future HR
requirements
- External human capital
o Members of the workforce not currently employed by the firm,
who are currently undergoing training, working for competitors,
members of unions or professional associations, in a transitional
stage, between jobs, or unemployed
- Strategic analysis
o Uncovers the most important tasks or activities at the
organizational level required to implement the value proposition,
and the critical knowledge, skills, abilities, and other attributes
 (KSAOs) or competencies necessary to perform those tasks or
inferred activities
- Gap analysis
o Compares the KSAOs/competencies that are present within the
organization with those that are necessary to implement the
value proposition; adjustments to the organization's stocks of
human capital and HR practices may be made

- Employee segmentation
o The grouping of employees based on characteristics that are
relevant to the employee experience such as career preferences,
demographics, work–life preferences, or benefits
- Skills gap
o A situation in which the supply of a particular form of human
capital available to the firm is inadequate to address the demand
- Skills inventories
o A method for modelling the supply of human capital that
includes:
 Personal information
 Education, training, skill competencies
 Work history
 Performance ratings
 Career information
 Hobbies and interests
- Management inventories
o A method for modelling the supply of human capital that
includes:
 A history of management or professional jobs held
 A record of management or professional training courses
and dates of completion
 Key accountabilities for the current job
 Assessment centre and appraisal data
 Professional and industry association memberships
- Markov Models
o Produce a series of matrices that detail the various patterns of
movement to and from the various jobs in the organization,
including:
 Remaining in the current job
 Promotion to a higher-classified job
  A lateral transfer to a job with a similar classification level
 Exit from the job
 Demotion
o Markov Model Determinants
 The number of employees who move annually, and over
specified time periods, between various job levels
 The number of external hires that are required by the
organization, and where the specific jobs are needed
 The movement patterns and expected duration in specified
jobs associated with patterns of career progression for
employees in the organization
 The number and percentage of all starters at a particular
job level who will successfully attain a future target job
level by a specified time period
- HR planning using the Markov Model
o Collect historical data on mobility rates between jobs in the
organization (many organizations collect data on turnover rate,
promotion rate, and rates of lateral transfers and demotions).
o Based on these data, develop matrices to forecast future
movement between jobs.
o Use the forecasts of the model to analyze HR policies and
programs and instigate the necessary adaptive measures.
- Linear Programming and Simulation
o A complex mathematical procedure commonly used for project
analysis in engineering and business applications; it can
determine an optimum or best-supply mix solution to minimize
costs or other constraints
o Simulation relaxes the requirement for linear relationships, but at
the expense of greater dependency on the assumptions around
the algorithms used to calculate the forecasts
- Movement Analysis
o A technique used to analyze the chain or ripple effect that
promotions or job losses have on the movements of other
employees in an organization
- Vacancy Model
o Also known as renewal or sequencing model
o Analyzes human capital flows throughout the organization by
examining inputs and outputs at each hierarchical or
compensation level
- Substitution and Other Gap Strategies
o In the event of a gap, firms must hire externally in the short
term.
o Long-term strategies include
 Outsourcing the extra requirement,
 Focusing on retention strategies to reduce voluntary
terminations,
 Increasing training and development efforts to further
develop the internal labour pool, and
 substituting human efforts with automation.

- Bullwhip Effect
o Occurs when errors in estimating the supply of human capital are
amplified along the supply chain, resulting in large overestimates
of hiring needs
- Effective Employee Retention Policies
o Forming a “retention task force” to include HR professionals, line
unit managers, and senior executives
o Reinforcing employee loyalty and performance by “promoting
from within” wherever possible
o Measuring turnover on an ongoing basis at corporate, division,
and local levels, utilizing multiple measures
- Other Effective Employee Retention Policies
o Holding line managers responsible for retention
o Reviewing and addressing compensation and working condition
issues before they become issues for dissatisfaction that prompt
employees to leave the organization
- Summary
o L.O. 6.1 Job analysis is an important tool for uncovering the
important and job relevant KSAOs/competencies for a job.
o L.O. 6.2 Organizations cannot rely solely on government
programs and market forces to ensure an adequate supply of
human capital.
o L.O. 6.3 Skills and management inventories contain information
that allows a detailed analysis of the current workforce to
determine whether the organization can meet the demand for
replacement from current employees in the organization.
 o L.O. 6.4 While any forecasting method will lead to error, it is
important for planners to understand the potential sources of
error in forecasting supply, and to monitor past forecasts and
forecasting methods in order to continuously improve forecasting
practices.

Week 6: Succession Management

- Succession management defined
o The systematic process of determining critical roles within the
organization, identifying and evaluating possible successors, and
developing them for these roles.
- Succession management and talent management
o Might be viewed as part of the talent management process of an
organization that focuses on the flow of employees, from
selection to career management to exit, through the
organization.
- Succession management as critical activity
o Organizations must view succession management as a critical
activity aligned with the organization’s business strategy.
o The effective implementation of succession management has
been linked to these outcomes:
 Retention of key talent
 Increase in shareholder value
 Reduced senior executive turnover after succession
- Succession management focus
o Succession management consists of a process of identifying
employees who have the potential to assume key positions in the
organization, and preparing them for these positions.
- Pipeline of talent
o There must be a pipeline of talent for the most critical roles:
 CEO
 Senior management team
  Critical roles based on long-term value to the organization
o Start by identifying the "mission critical positions“, those
executives whose departure would seriously impact the
organization.
- Evolution of succession management
o Replacement planning
 The process of identifying short-term and long-term
emergency backups to fill critical positions
o Replacement planning has evolved into succession management
by:
 Broadening the focus
 Expanding the time horizon
 Creating a talent pool of replacements
 Improving the evaluation system
- Broader focus
o The promotion of one employee causes a ripple or chain effect,
as subsequent employees are promoted to fill the sequential
openings

o
- Time horizon
o The traditional planning approach was concerned with immediate
and short-term replacements.
o This short time perspective does not allow for the intake or
career management of those with different skills in growth areas.
- Time horizon for succession management
 o Succession management looks at a longer term (after ensuring
that immediate replacements are in place) and focuses on a
future of two years or more.
- Talent pools
o Groups of employees, often identified as high-potential
individuals, are trained and developed to assume greater
responsibilities within the organization.
o Organizations cannot rely on single individuals or a small group
of employees for their succession plans.
- Talent pools and talent segmentation
o The talent pool is considered a corporate resource and is not the
property of individual organizational units.
o Talent segmentation, the identification of employees who are
critical to the success of the organization, is expected to become
as important as customer segmentation.
- Internal candidates
o Known to the organization
o Increased commitment and retention
o Preservation of corporate culture
o Increased knowledge of organization, people, and processes
o Cost savings on recruitment and selection
- External candidates
o May have better skills to lead the organization through a major
transformation or change in strategy
o Bring new knowledge and skills to the organization
- Rating system
o In a succession management approach, several raters give
current evaluations on an employee’s performance.
o Most companies use 360-degree feedback mechanisms and
feedback from mentors and coaches.
- Succession management process
o Align succession management plans with strategy
 Management development must be linked to business
plans and strategies
 Strategic connection is important
 Organizations must start with the business plan
o Identify the skills and competencies needed to meet strategic
objectives
  The skills and competencies of successful managers can be
identified using the following:
 Job-based approach
 Focuses on duties, skills, job experience, and
responsibilities required to perform the job
 Not adequate since jobs change rapidly
 Competency-based approach
 Focuses on measurable attributes that differentiate
employees who are successful from those who are
not
 Hard and soft skills
 Produces more flexible employees
 Types of competencies
o Core competencies
o Role or specific competencies
o Unique or distinctive competencies
o Identify high-potential employees
 High-potential employees consistently and significantly
outperform their peer groups in a variety of settings and
circumstances.
 These are employees with roles and skills that are seen as
critical to the organization's success, or that deliver a
disproportionate level of value.
 The best predictor of future performance is past
performance.
o Provide developmental opportunities and experiences
o Monitor succession management
 Monitoring can include measurement of:
 Increased engagement scores
 Increased positive perceptions of development
opportunities
 High-potential employees’ perceptions of the
succession management process
 Higher participation in developmental activities
 Greater numbers involved in the mentoring process
- Approach to identifying managerial talent
o Temporary replacements
o Replacement charts
o Strategic replacement
 o Talent management culture
- Techniques for assessing employee potential
o Assessing employees to identify high-potential candidates must
be done fairly and accurately:
 Performance appraisals
 Assessment centres
 Human resources management systems (HRMS)
- Management development methods
o Promotions
o Job rotations
o Special assignments and action learning
o Formal training and development
o Mentoring and coaching
- Measuring succession management successes
o Select HR Metrics (identified as lag measures) assess the
following:
 Increased average number of candidates
 Reduced average number of positions having no identified
successors
 Increased percentage of managers with replacement plans
 Increased percentage of key positions filled according to
plans
 Increased ratio of internal hires to external hires
 Increased retention rates of key talent
 Increased percentage of positive job evaluations after
promotion
 More positive assessment of the quality of preparedness
for new roles
 Increased number of bosses skilled as talent developers
- Employee role in succession management
o An employee’s relationship with any organization is not
permanent.
o Today’s career model may be perceived as a transactional one in
which benefits and contributions are exchanged for a short
period.
o If loyalty to any organization still exists, it is to the professional
organization, to a network of peers, and to certifiable credibility
that confers collegiality and respect.
 o Organizations must take into consideration employee aspirations
and goals
- Managing talent the HR role
o HR should own the talent management process in order to
mitigate three types of risk to an organization:
 Vacancy risk
 Readiness risk
 Transition risk
- Summary
o L.O. 7.1 Executives in any organization must develop the next
generation of leaders.
o L.O. 7.2 The process of identifying short-term and long-term
emergency backups to fill critical positions is known as
replacement planning.
o L.O. 7.3 The following steps are included in the five-step model
of effective succession management: (1) align succession
management plans with strategy; (2) identify the skills and
competencies; (3) identify high-potential employees; (4) provide
developmental opportunities and experiences; and (5) monitor
succession management.
o L.O. 7.4 Organizations are shifting to a competency-based
approach in which individuals' capabilities are prioritized.
o L.O. 7.5 Employees with talent are those who can make a
difference in the performance of the organization.
o L.O. 7.6 The five management development methods each have
advantages and disadvantages.
o L.O. 7.7 There are difficulties in measuring the success of a
management succession plan.
o L.O. 7.8 The employee’s role in the succession management
process is important, as is HR's role.

Week 7: Information Technology for HR

Planning
- Information Technology
o The hardware and software, including networking and
communication technologies, involved in storing, retrieving, and
transmitting information
- Impact of technology
 o The HR department is the custodian of employee information
o IT provides better data storage, information retrieval, and tools
for analysis
 Capabilities that help alleviate the burden of transactional
activities
 Allows more time and resources to be dedicated to
strategic roles of business partner and change agent
- Technology and HR functions
o Greater efficiencies, higher productivity, and reduction in
performing repetitive tasks in functional areas such as:
 Recruitment and selection
 Training
 Performance appraisal
 Employee self-service
- Service delivery models
o HR may consolidate its services into an internal HR service
centre and operate the centre with its own HR practitioners
o Web-based HR
 Allows service delivery that pushes employees and
managers into making transactions
- Enterprise portals and self-service
o Enterprise portals
 Knowledge communities that allow employees from a
single or multiple companies to access and benefit from
specialized knowledge associated with tasks
 Single site for employees to access HR services
o Self-service
 A technology platform that enables employees and
managers to access and modify their data via a web
browser from a desktop or centralized kiosk
- Different solutions for different needs
o IT can be leveraged to better manage several activities involved
in HR planning.
o There is a diversity of software solutions for HRM and HR
planning.
o Organizations may favour a comprehensive human resource
information system (HRIS) or a specialty product focused on a
single area, such as applicant tracking.
- Human Resources Information System (HRIS)
 o A comprehensive across-the-board software system for HRM that
includes subsystems or modules
o Provides access to a large database through a variety of modules
that automate diverse functions
 An integrated solution that includes several subsystems or
modules, such as recruitment and selection, time and
attendance management, payroll, training and
development, and pension administration
- Specialty products
o Software solutions for specific specialized applications that may
or may not interface with the main database
o Address specific needs, as they are focused on a single area of
HRM
 Compensation planning, workforce scheduling, managing
training and e-learning, and applicant tracking
- Enterprise solutions
o Enterprise resources planning (ERP)
 Commercial software systems that automate and integrate
many or most of a firm’s business processes
 May be on-premise or cloud-based
 (Of digital data) stored, managed, and processed on
a network of remote servers hosted on the Internet,
rather than on local servers or personal computers
o Provide solutions that are based on software that integrates data
from diverse applications into a common database
- Relational database
o Can share information across multiple tables or files, which
allows the same information to exist in multiple files
simultaneously
o Ensures that administrative units may readily share information
and communicate with one another, and encourages the
enforcement of uniform policies and procedures throughout the
company
- Big data
o The integration of digitized data from multiple sources and in
multiple formats, including structured and unstructured data
o May comprise large, unstructured, and unrelated data sets that
can be difficult to analyze
o Commonly measured in petabytes or larger measures
  One petabyte is the equivalent of 1,000 terabytes
o Types of big data
 Structured data
 Any form of data that can be organized into columns and
rows
 Unstructured data
 Include the various kinds of files you might have on
your computer
 Examples: text documents, email or text messages,
audio, presentations, geotags, images, or videos
o Five pillars of big data
 Provide insight into the tools needed to get the most value
out of the investment made in collecting, storing, and
analyzing big data when seeking to evaluate an
organization's readiness for it
 Pillars of big data
 1. Volume
 2. Velocity
 3. Variety
 4. Veracity
 5. Value
- Artificial intelligence and machine learning
o A software-based ability to demonstrate learning and decision
making
o By giving software a creative objective, the machine attempts
millions of self-directed simulations until it achieves an
appropriate outcome
o Data security is a growing concern, particularly as the volume of
data stored increases
- Ethics and big data
o Artificial intelligence (AI) lacks transparency around the decision
rules that it develops
o AI cannot explain the decisions it arrives at
o Issues of liability and operational risks emerge
- HR metrics and HR analytics
o HR metrics and HR analytics applications address the challenge
of getting business intelligence for strategic decision making.
- Business intelligence
 o The applications and technologies for gathering, storing,
analyzing, and providing access to data to help users make
better business decisions
- HR metrics
o Summary measures of HR outcomes that are relevant to the
performance of the HR function; example metrics include the
cost of recruitment, time-to-hire, and turnover rate
- HR analytics
o Empirical approaches such as statistical analyses or experiments
that reveal the outcomes of HR practices or processes
- Domain of HR analytics
o Descriptive analytics
 Describe what happened
o Predictive analytics
 Make inferences based on existing data to describe what
could happen
o Prescriptive analytics
 Describe what should happen
- Uses of HR analytics
o Predicting the probable success of a candidate
o Identifying and quantifying the physical risks to employees
o Identifying workforce characteristics that contribute to fraud
o Measuring employee engagement and predicting turnover
o Identifying obsolete departments and or positions
- Maximizing the benefits of HR metrics
o HR dashboard
 An aggregation of useful or relevant HR metrics or
performance indicators that provide a summary snapshot
of performance
o Key performance indicators (KPIs)
 A snapshot measure of system performance that
demonstrates the success of strategy implementation in
terms of cost, quality, or time
 KPIs that are best to include in an HR dashboard are those
that demonstrate the extent to which the HR function is
addressing strategic needs, and those that are improving
service quality and efficiency
- Other aspects of IT for HR training
o IT supports these HR planning functions:
  Workforce management and scheduling
 Forensic reporting
 Ensuring data security
 Phishing is the fraudulent practice of sending emails
purporting to be from reputable companies in order
to induce individuals to reveal personal information,
such as passwords and credit card numbers
- Evaluating HR technology
o User satisfaction and system usage are important indicators of
HRIS success
o Technology acceptance
 Extent to which users intend or actually use technology as
a regular part of their job
- Sample technology effectiveness items
o Attitude
o Usefulness
o Information satisfaction
o System satisfaction
o Information quality
o System quality
- Conduct a needs analysis
o Systematic needs analysis collects information about the
organization, its technical environment, and the needs of its HR
department.
 It is important to consider the information processing
needs of the HR function.
o When needs are clearly determined, it is possible to measure
whether those needs have been addressed by technology.
- Summary
o L.O. 8.1 Technology continues to have a transformative impact
on HRM, particularly in the areas of recruitment and selection,
training, performance appraisal, and employee self-service.
o L.O.8.2 An organization's choice of technological solutions for
HRM issues is often guided by access to organizational resources
and requirements.
o L.O. 8.3 As data from different sources and in different formats
become more available and accessible, the methods for dealing
with the increasing complexity are becoming more reliant on
computers and artificial intelligence.
 o L.O. 8.4 HR metrics are useful to demonstrate a snapshot of
costs, efficiency rates, or other summary measures of HR
practices.
o L.O. 8.5 Information technology can play an important role in
developing workforce schedules and in monitoring the warning
signs of compliance or safety issues.

Week 8: change management/downsizing and

restructuring
- Can HR lead change?
o Change management is a requisite competency for the practice
of HR.
 Strategic positioner
 Credible activist
 Paradox navigator
 Communicator
 Systems thinker
- Why is organizational change important?
o Organizational change lies at the heart of the planning process.
o Organizations are dynamic, constantly growing or contracting
and responding to changes.
o The planning process anticipates organizational resource
requirements in response to organizational change using a
variety of methods to forecast demand and supply, and by
connecting resource requirements with strategic and operating
imperatives.
- The increasing pace of change
o Higher levels of uncertainty in today’s business environment
o Unprecedented levels of economic, political, and environmental
uncertainty
o Ability to manage change effectively to outperform slower, less
change-capable competitors
o Important management role is to create and direct strategy, and
manage change
- Levels of change
o Societal level
 Economic and environmental issues are strong drivers of
change
 o Industrial level
 Change follows an S-curve pattern
o Firm Level
 Occurs as a result of demands from constituent groups
- Multiple levels of change
o Change is an ongoing state.
o Organizations do not always change when they should.
o Even when they do change, they often experience failure.
o Up to 70 percent of organizational change efforts fail.
- Models of organizational change
o The term system refers to a set or arrangement of parts that
interact to form a whole.
o Open system
 A system that receives inputs from its external
environment.
o Organizations comprise multiple subsystems that interact with
the external environment, and with one another.
- Organizations as open systems
o Open system
 A system that receives inputs from its external
environment
o Open systems are input-throughput-output systems
 Take or receive inputs from their environment
 Transform or convert those inputs
 Output the finished products or services back to the
environment
- Importance of feedback
o Organizations must use feedback to determine whether or not
they are achieving their goals and strategic purpose.
o Negative feedback
 Information that tells whether the system is achieving its
goal
o Positive feedback
 Information that a system uses to determine if its purpose
is suited for its environment
- Single loop learning
o The attempt to solve a problem using a single strategy, without
examining the validity of the problem itself
 o Permits the organization or individual to proceed according to the
status quo
o Can impede change efforts, particularly when change requires
new or different goals
- Double loop learning
o A method of learning that involves questioning current
assumptions, examining a problem from different perspectives,
and questioning the validity of the problem
o Encourages participation in decision making and open expression
of conflicting views, using valid information, and widespread and
open testing of evaluations
- Recognizing the need for change
o One of the most difficult stages in the change process
o Requires that a need to change is identified
o Requires that the need is broadly felt among all participants
o Without full buy-in from all concerned parties, change efforts
likely to fail
- Diagnosing what needs to be changed
o Organizational change is complex
o Models of organizational change deal with the diagnosis of what
needs to change by examining:
 Leadership of the change process
 Overall purpose of the change
 Degree of planning involved in the change process
- Planning and preparing for change
o Change intervention that is most successful depends on:
 Organization culture
 Leadership
 Timeline available for the change to be implemented
 Purpose of the change
- Implementing the change
o Successful change leaders use complex social networks and their
political skills to achieve their desired outcome.
o Social networks
 These are the networks of ties that an individual has with
other individuals.
- Sustaining the change
o Implementing organizational change also requires a firm-wide
approach to enable the change process.
 o Changes require organizational learning and experimentation in
order to plot a successful change path.
o Steps must be taken to ensure that the organization does not slip
back into its pre-change mode.
o Change will likely not endure if it does not fit with the firm’s
culture, or is not incorporated into existing mental models of how
things work within the organization.
- The four elements of the planned model of change
o Field theory
 Attempts to understand and change individual or group
perceptions and behaviours
 Seeks to understand the interdependent forces that act on
individuals or groups that motivate them toward certain
courses of action or restrain them from others
 Life-space
 Needs, goals, and intentions that maintain an
individual’s or group’s set of behaviours in a given
situation such as home life or work life
 Forces acting on a life-space are always changing but form
a state of status quo
 Status quo can be changed by altering the forces that
make up the life-space
o Group dynamics
 Groups can be assembled for a specific purpose or task or
can form spontaneously around a common cause
 Groups form norms that specify what kinds of behaviours
are expected or permitted in the group
 Organizational change could be achieved only by changing
behaviours at the group level
o Action research
 An iterative trial-and-error process of discovery that
involves diagnosing a problem, planning a solution, acting
on the solution, evaluating the results of the actions,
learning from the outcomes, and asking new questions
o The three-step model
 Main component of the planned model of change
 Primary change framework for this chapter
 The model is far from static in its consideration of
organizational change
 Three step model of change
  Step 1: Unfreezing
o Initial stage of organizational change
o Development of a shared understanding
among concerned parties that a particular
change is necessary
o Process requires three conditions:
 Disconfirmation of the validity of the
status quo
 Inducing survival anxiety
 Creating psychological safety
 Step 2: Moving
o Second stage of a change process
o The unfreezing and moving stages of the three-
step model parallel the action planning process
o Trial-and-error process of taking action to move
the firm through the intended change
o Organizations must develop a culture in which
mistakes are accepted as part of the learning
process.
o Organizational cultures that do not accept
mistakes or that punish employees for
mistakes will lead to defensive routines and
single-loop learning.
 Step 3: Refreezing
o Third and final stage
o Putting policies, practices, and structures in
place to establish new norms around the
change
o Unless there are new group norms and routines
to support behaviours, changes will regress
back to their pre-changed state
- Force field analysis
o A framework for analyzing a problem that seeks to identify all the
relevant factors and people that are acting to either sustain the
current state or to move away from the current state
o Purpose is to analyze a condition and to plan corrective actions
- Planned change approach
o Popular approach is Kotter’s eight-step model
o Many similarities to Lewin’s model
 o The first three stages:
 Establishing a sense of urgency
 Forming a guiding coalition
 Creating a vision to mirror Lewin’s unfreezing stage
o The next four stages move the change process, and even include
the reiterative nature of cycling between unfreezing and moving
by:
 4. Communicating the vision
 5. Empowering others to act on the vision
 6. Planning for and creating short-term wins
 7. Consolidating improvements and producing more
change
o The final stage
 8. Institutionalizing new approaches
- Emergent change
o Organizations are complex systems, and relationships in such
systems tend to be nonlinear and highly interconnected, which
leads to unintended consequences.
o These characteristics evoke a process that is much more chaotic
than the carefully controlled nature of the planned approach to
change.
- Chaos theory
o Complex systems are based on some form of order, but can
behave in unpredictable ways.
o The unpredictability results from the many interactions of the
system variables and the consequences of differences in the
initial states of those variables.
o Chaos theory provides a frame for understanding how a broadly
defined goal such as “to improve customer service” can provide
the basis on which successful change can be patterned.
- Chaordic organization
o Term coined by Dee Hock
o Chaordic is a combination of the words chaos and order
o Describes a management style whereby firms focus less on
structure and control, and more on a guiding purpose
- Organizational learning
o An approach to learning that applies double-loop learning and an
attempt to understand how the entire system may be affected by
change
 o Allows knowledge from any individual in the organization to
become incorporated into the firm’s culture and processes
- Personal mastery and mental models
o Personal mastery
 Understanding of one’s purpose and the development of a
personal vision
o Mental models
 Internal representation of the way things work that
influence the causal attributions that we make
- Shared vision and team learning
o Shared vision
 What do we want to create?
 Is the bonding element that brings together and focuses
the efforts of employees to pursue personal mastery in
ways that are relevant to the goals of the firm
o Team learning
 The interaction of individual ideas and efforts toward a
team objective that results in outcomes that exceed the
capabilities of any individual on the team
 Open dialogue the most important element of team
learning
- Systems thinking
o Views change issues within the framework of the entire
organization
o Helps to understand the underlying causes of problems and the
potential outcomes of change initiatives
- Clarifying and communicating values
o The HR function plays a very important role in ensuring that the
need for change is understood throughout the firm.
o Senior management must communicate the need to change the
status quo.
o HR demonstrates how the new state and the process for moving
to that state is consistent with the firm’s values.
- Training, education and organizational learning
o The HR function is responsible for developing each of the
dimensions of organizational learning.
o HR builds a culture of learning within the organization.
- Technology and organizational change
 o Digital technology has the capacity to influence change
management efforts by giving the organization:
 Greater adaptiveness for faster knowledge acquisition and
learning
 Higher levels of personalization to ensure that all
individuals understand the importance and purpose of the
change
 An increased the level of communication among those for
whom change efforts are relevant
- Summary
o L.O. 9.1 Organizations are complex, open systems that both
influence and are influenced by their environment.
o L.O. 9.2 Most models of planned organizational change share
the same basic attributes, which begin with recognizing a need
to change, diagnosing what needs to change, implementing the
required change, and then making the changes part of a new
way of working.
o L.O. 9.3 The planned model of change provides practitioners
with all the tools required to understand how to implement
change.
o L.O. 9.4 The planned approach to change shows us that change
is often dynamic and complex.
o L.O. 9.5 Organizational learning is a process that begins with the
adoption of learning goals rather than achievement goals.
o L.O. 9.6 At their root, both the planned and emergent
approaches to change share an emphasis on the importance of
learning, of having a shared sense of purpose, and of being able
to adapt the change implementation as it progresses.

- The down sizing phenomenon

o Popular in the 1990s and resurfaced aggressively with the global
financial crisis in 2008
o Firms can become too “lean,” and downsizing may cut into the
muscle of the organization
o A number of the reductions have been characterized as
“mean”—destroying the lives of victims of cutbacks and leaving
a demoralized and frightened group of downsizing survivors
o COVID-19 pandemic has major impacts on staffing levels and the
future of work
- Downsizing strategy
o Strategy to improve an organization’s efficiency by reducing the
workforce, redesigning the work, or changing the systems of the
organization
o Some questions to ask:
 Should cuts be targeted or across the board?
 Will the firm’s stock price increase or decrease when the
firm announces a major layoff or restructuring?
 Should an employer carry out all of the cuts at once or
stage them over a period of time?
- Downsizing
o A set of activities undertaken to improve organizational
efficiency, productivity, and/or competitiveness that affect the
size of the firm’s workforce, its costs, and its work processes
o Types of downsizing strategies:
 Workforce reduction
 A short-term strategy to cut the number of
employees through attrition, early retirement or
voluntary severance packages, layoffs, or
terminations
 Work redesign
 A medium-term strategy in which organizations focus
on work processes and assess whether specific
functions, products, and/or services should be
eliminated
 This strategy eliminates functions, groups, or
divisions and all the associated bureaucracy.
 It also redesigns tasks that employees do with the
focus on efficiency: doing more with less.
 Systematic change
 A long-term strategy that changes the organization’s
culture and attitudes, and employees’ values, with
the goals of reducing costs and enhancing quality
- Types of restructuring strategies
o Portfolio restructuring
 Involves changes to the organization’s business portfolio
 Includes changes in the mix and/or percentage makeup of
the organization’s businesses, including divestures and
acquisitions
o Financial restructuring
  Includes financial changes such as reducing cash flow or
increasing levels of debt
o Organizational restructuring
 Any major reconfiguration of internal administrative
structure that is associated with an intentional
management change program
 Both portfolio and financial restructuring are important, but
the chapter will focus on organizational restructuring
- Why do organizations downsize
o Declining profits
o Business downturn
o Increased pressure from competitors
o Organizational merger
o New technology/ robotics/digitization
o Reduce operating costs
o Decrease levels of management
o Get rid of employee “deadwood”
o Major disruption, such as COVID-19
- Alternatives to downsizing
o Short-term
o Hiring freeze
o Mandatory vacation
o Reduced workweek
o Reduced overtime
o Reduced salaries
o Facility shutdowns
o Employees’ ideas for cost reductions
o Extending reductions in salaries
o Voluntary sabbaticals
o Lending employees
o Exit incentives
- The future of work
o Jobs are being dramatically altered due to several factors, such
as artificial intelligence (AI) and computerization.
o Technological progress should lead to increased productivity.
o Job losses and greater income equality are also likely.
- AI and job loss
o According to a Brookfield report, 42 percent of Canadian jobs are
at risk of being lost due to automation.
 o The occupations most at risk are retail salesperson,
administrative assistant, food counter attendant, cashier, and
transport truck driver.
o The occupations at least risk include management, teaching,
science, technology, engineering, and math.
o Brookfield Institute for Innovation + Entrepreneurship suggested
that about 42% of Canadian jobs are at risk of being lost due to
automation.
o Organisation for Economic Co-operation and Development’s
projection was 38% and the C.D. Howe’s estimate was 35%.
- The intelligence revolution
o Factors that shape the future of work:
o The concept of a job has been fundamentally changed
o Machines learn faster than humans
o Technologies converge, creating new opportunities for people
and machines
o Technological change results in wide and deep disruption across
professional fields
o Emergence of new workforce that is project-specific, and made
up of freelancers and consultants
- COVID-19 and the intelligence revolution
o Acceleration of replacing employees with technology
o Employers searching for ways to reduce operating costs and
minimize workplace infections
o According to economist Daniel Susskind:
 “The pandemic has created a very strong incentive to
automate the work of human beings” (Semeuls 2020).
o A 2021 McKinsey Global Institute report indicated that about one
in four U.S. workers (or about 45 million people) would lose their
current jobs as a result of automation.
 Jobs may undergo considerable change.
- The amazon effect
o Retail industry is being revolutionized by the “Amazon” effect
o Consumer shift from in-store to online shopping
o Increased e-commerce
- Inplacement and outplacement
o Inplacement
 Reabsorbing excess or inappropriately placed workers into
a restructured organization
 o Outplacement
 Providing a program of counselling and job-search
assistance for workers who have been terminated
- Ethical considerations
o Downsizing may infringe on principles of distributive, procedural,
and interactional justice
o Communication during a downsizing is often mismanaged
o Managers may use and abuse information as a source of power
or choose to conceal or distort information regarding the
financial status of the business
o Downsizing may have negative impacts on laid-off employees,
survivor employees, and the downsizers.
- Perceptions of justice
o Distributive justice
 The fairness of the downsizing decision
o Procedural justice
 Procedures or rules used to determine which employees
will leave or remain with the organization
o Interactional justice
 The interpersonal treatment employees receive during the
implementation of the downsizing decision
- The psychological contract
o An unwritten commitment between employers and their
employees that historically guaranteed job security and rewards
for loyal service
o An individual worker’s perception of the agreement he or she has
with the employer
- Responsible restructuring
o Resulting from waves of pandemic-related layoffs
 The actions, practices, and strategies adopted by
organizations to ameliorate the negative effects of
redundancy
o The four key responsibilities
 Regulatory
 Procedural
 Communication
 Employment
- Planning for downsizing
o Key issues:
  Determining how many people will lose their jobs.
 Determining who will be let go.
 For example, will the decision be made on the basis
of seniority, performance, or potential?
 Determining how the reduction will be carried out.
 For example, to what extent will the organization use
attrition, early retirement or voluntary severance
programs, and layoffs or termination? The
approaches to workforce reduction vary in the terms
of the degree of protection to employees and the
time it takes to implement the reductions.
 Determining the legal consequences.
 For example, organizations often ignore or are
unaware of legal requirements when downsizing the
workforce. Some areas of law to consider include the
law of wrongful dismissal, employment standards
legislation, trade union law, existing collective
agreement provisions, and human rights legislation.
 Designing current and future work plans.
 This issue represents a key challenge for the
organization and is frequently neglected.
 Implementing the decision.
 Implementation includes elements such as the
communication of the termination decision, the
timing of the decision, security issues, severance
payments, outplacement counselling, and
communications with remaining employees.
 Performing follow-up evaluation and assessment of the
downsizing efforts.
 Although this step is critical, it is often ignored in
many organizations.
- Adjusting to job loss
o The expectation of lifetime employment with one organization no
longer exists
o Workers should prepare for a multiorganizational career
o Job loss leads to tremendous pain and difficulties for those
impacted by it:
 Emotional
 Financial
 Physical
  Mental
- Helpful organizational practices
o Advance notification of layoffs
o Severance pay and extended benefits
o Education and retraining programs
o Outplacement assistance
o Clear, direct, and empathetic announcement of layoff decisions
o Consideration of HR planning practices that represent
alternatives to large-scale layoffs
- Impact on survivors of a downsizing
o Perceptions of job insecurity
o Impaired well-being
o Increased stress
o Higher levels of burnout
o Mental distress
o Lower work and supervisor satisfaction
o Negative attitudes and behaviours:
 In a number of downsizings, employees who retain their
jobs report increased job insecurity, fear, stress, and
burnout. They may also experience lower self-confidence
and self-esteem, reduced job satisfaction, and lower
commitment to the organization. Not surprisingly, these
factors may lead to increased turnover, absenteeism, and
lateness.
o Reduced performance capabilities:
 There is growing evidence that it is not necessarily the
poor performers who leave the downsized organization. Of
particular concern is the fear that the best employees will
leave, because quality workers are more attractive to other
firms. This result undermines the HR activities of the
organization.
o Lower organizational productivity:
 Negative employee attitudes and behaviour, in conjunction
with lower performance capabilities, may destroy or
markedly harm team activities and result in lower
productivity
- Survivor reactions
o Negative attitudes and behaviours
o Reduced performance capabilities
 o Lower organizational productivity
 Due to negative employee attitudes and behaviour, in
conjunction with lower performance capabilities
- Impact on the downsizers
o Research shows negative impact on managers participating in
the process
 Social and organizational isolation
 Decline in personal health and well-being
 Increase in family-related problems
o Downsizers develop mechanisms to distance themselves
emotionally, physically, and cognitively from the task
- Financial performance and downsizing
o Linked to both superior and inferior financial performance
o Link between organizational performance and downsizing is
complex
o It is difficult to make comparisons, because authors don’t use
similar measures of performance, and each defines downsizing
somewhat differently.
o Successful (as measured by better financial performance) when
firms have higher levels of slack (excess resources, which can
include inventory, working capital, and people), the downsizing is
broadly based (i.e., the focus not only is on reducing the number
of people but also involves organizational redesign), and the
approach to downsizing is proactive (planned out rather than in
response to declining performance). In addition, financial
performance may also vary depending on whether the rationale
for the downsizing was excused-based or justification-based
- Downsizing consequences and strategies
o It is critical that the HR department play a very active role in the
early stages of formulating a downsizing strategy.
o Senior management has to take an aggressive, visible, and
interactive role.
o Serial downsizers had the poorest scores when considering
changes in employee satisfaction.
- Consequences of downsizing
o High human costs
o Psychological trauma
o Reduced employee commitment
o Lower performance among employees
 o Job insecurity
- Reputation for corporate social performance
o The firm’s reputation for principles, processes, and outcomes in
relation to the social impact of the firm’s operations
o One of the most important intangible assets of a business and an
important source of competitive advantage
- Downsizing and employee safety
o Job satisfaction levels are related to safety motivation.
o Downsizing creates job insecurity associated with low levels of
job satisfaction.
 Perceptions of job insecurity are associated with both a
greater likelihood of experiencing an accident and a
reduced probability of accident reporting.
- Downsizing strategies
o Cutting the number of people in an organization is not a quick
fix.
o Care and planning must go into the decision.
o Focus should be on rightsizing – establishing a shared vision of
the organization and a clearly stated strategy supported by
management, understood by employees, and involving a sense
of “ownership” by members of the firm.
- Strategic downsizing
o Comprehensive planning for change
o
o Proper communication of the plan
o Credibility of the organization with employees, customers,
suppliers, and other stakeholders
o Consideration and compassion both for employees who are
terminated and for those remaining
- Effective approaches to downsizing
o Downsizing should be initiated from the top but requires hands-
on involvement from all employees.
o Workforce reduction must be selective in application and long-
term in emphasis.
o Special attention should be paid both to those who lose their jobs
and to the survivors who remain with the organization.
o Decision makers should identify precisely where redundancies,
excess costs, and inefficiencies exist and attack those specific
areas.
 o Downsizing should result in the formation of small, semi-
autonomous organizations within the broader organization.
o Downsizing must be a proactive strategy focused on increasing
performance.
- Role of HR in downsizing and restructuring
o Advising on restructuring the organization to maximize
productivity and retain quality performers
o Developing skill inventories and planning charts to evaluate the
impact of a downsizing on HR needs and projected capabilities
o Communicating the downsizing decision effectively
o Evaluating the downsizing program after completion
- Labor relations issues
o Collective agreement often outlines the procedures to be
followed in the event of a reduction of bargaining unit employees
o Labour–management relations and co-operation can be affected
by downsizing
o Many downsizing programs have destroyed positive labour-
relations programs
- Summary
o L.O 10.1 HR planning plays an important role in the
development and implementation of an effective downsizing
strategy.
o L.O. 10.2 Workforce reduction, work redesign, and systematic
change are all examples of downsizing strategies.
o L.O. 10.3 Organizations decide to downsize for several reasons,
such as declining profits, the introduction of labour-saving
technology, or merging with another employer. During COVID-19,
widespread layoffs were commonplace.
o L.O. 10.4 Artificial intelligence and rapid technological changes
are having dramatic effects on the nature of work.
o L.O. 10.5 When embarking on a downsizing, careful planning is
essential. Be sure and consider both inplacement and
outplacement issues.
o L.O. 10.6 It is important to not forget about the employees who
remain with the organization (the "survivors") after the
downsizing is completed.
o L.O. 10.7 Many downsizings fail to meet senior management's
financial expectations and are frequently associated with lower
financial performance.
 o L.O. 10.8 Many downsizings have fallen far short of achieving
the goals that senior management expected.
o L.O. 10.9 Unionized employers contemplating downsizing must
follow the collective agreement and are advised to discuss their
plans with union leadership.

Week 9: Strategic HRM/Mergers and

Acquisitions
- Key challenges
o Fast growing international economies
o Challenges include socioeconomical, political, and technological
factors
o Entering growing economies and new markets means greater
business opportunities for Canadian firms
o A wide range of strategic and operational HR challenges
- Workforce diversity
o Human resource management systems must consider and
accommodate the needs of an increasingly diverse labour force
and tailor international HR policies and practices
- Diversity issues in Canada
o Increased number of older workers
o Employees with disabilities
o Gender identities
o Ethnic and cultural differences
- Employment legislation
o HR managers face a complex legislation framework
o
o When crossing national borders, Canadian HR managers
encounter additional, host-country employment legislation
- Employee security
o HR support structures include:
 Risk assessment processes
 Precautionary actions and procedures
 Contingency planning
- Strategic international HR planning
o Strategic international HR planning includes:
 Projecting global competence supply
  Forecasting global competence needs
 Developing a blueprint to establish global competence
pools within companies
- Research areas of focus

o
- Strategic international HRM
o Human resources management issues, functions, policies, and
practices that result from the strategic activities of multinational
enterprises and that affect the international concerns and goals
of those enterprises
- The domestic stage and strategy
o Internationalizing by exporting goods abroad as a means of
seeking new markets
- The multidomestic stage and strategy
o Subsidiary
 A company that is controlled by a parent company
o Multidomestic strategy
 A strategy that concentrates on the development of foreign
markets by selling to foreign nationals
o Adaptive IHRM approach
 HRM systems for foreign subsidiaries that will be consistent
with the local economic, political, and legal environment
- The multinational strategy
o Multinational strategy
 Standardizing the products and services around the world
to gain efficiency
- MNC Exportive IHRM approach
o Transferring home HRM systems to foreign subsidiaries without
modifying or adapting to the local environment
 o Advantage
 HR managers at headquarters have a tried-and-true HR
system and can readily implement it efficiently in
subsidiaries in other countries
o Disadvantage
 Local environment will not have been considered in the HR
system, and the fit with the local system will be missing,
which might cause problems for the subsidiaries’
management
- The global stage
o Global strategy
 Introducing culturally sensitive products in chosen
countries with the least amount of cost
o Fitting this global business strategy is an integrative IHRM
approach
 Combines home HR practices with local practices and
involves selecting the most qualified people for the
appropriate positions no matter where these candidates
come from
- Key HR practices and processes
o International assignments:
 Involve placing home-country nationals in the host country
for a period of time; may be put into place for a variety of
reasons
o Two categories of international assignments:
 Strategic control
 Intended to retain the culture, structure, and decision
processes of the home-country firm
 Transfer of knowledge and skills
 Intended to bring necessary skills to the host-country
firm
- Types of international assignments
o Virtual global assignment
o Frequent flyer
o International commuter
o Short-term assignment
o Expatriate assignment
o Expatriate diversity
o Permanent transfer
- Human Capital Demand and Supply
o Planners must forecast the demand for human capital and the
supply of human capital, calculate the gap, and put HR practices
in place to ensure that the firm has an adequate supply of
human capital to operate.
o Political, economic, social, legal, and regulatory issues that may
be relevant to the business must be taken into account.
- Forecasting demand for labor
o Forecasting the demand for labour in an international setting
presents unique challenges.
o The Conference Board has identified four major areas of focus for
workforce planning in an international context:
 understanding and interpreting local labour market data;
 issues relating to external human capital demand and
supply;
 the environment; and
 flexible labour practices.
- Local labor market data
o Planners seek out data sources to confirm whether or not local
labour market can support the firm’s operational needs.
o Governments produce these types of analyses to
 help foreign and domestic businesses;
 help the countries’ citizens to understand where issues of
demand and supply are leading to gaps or surpluses; and
 make policies to ensure a strong labour market.
- External human capital demand and supply
o The mix of home- and host-country employees will be
determined by the balance between the strategic needs of the
firm, the availability of host-country human capital, and the costs
associated with providing home-country employees when host-
country human capital is not available.
- The environment
o Deciding where to locate a business in a foreign country is
determined by the availability of the necessary resources and
the proximity to customers.
- Flexible labor strategy
o Flexible labour strategies include the types of working
relationships that the firm can have with its employees, such as:
 Telecommuting
  Flexible work hours
 Job sharing
 Part-time
 Contract
- International recruitment
o Home-country nationals (HCNs)
 Individuals from the subsidiary country who know the
foreign cultural environment well
o Parent-country nationals (PCNs)
 Individuals from headquarters who are highly familiar with
the firm’s products and services, as well as with its
corporate culture
o Third-country nationals (TCNs)
 Individuals from a third country who have intensive
international experience and know the corporate culture
from previous working experience with corporate branches
in a third country
- International selection
o Three dimensions of cross-cultural competencies:
 Self-maintenance competencies
 The capability to -substitute sources of reinforcement
when necessary and deal with alienation and
isolation
 Relationship competencies
 The capability to develop and ¬maintain
relationships with home-country nationals (HCNs)
 Perceptual competencies
 The capacity to understand why foreigners behave
the way they do, to make correct attributions about
the reasons or causes of HCNs’ behaviour, and to
correct those attributions when they prove incorrect
- Labor relations
o International HR managers must understand:
 The types of unions that exist in a country (union structure)
 Rate of unionization in that country
o Four types of unions can be identified:
 Industrial
 Craft
 Conglomerate
 General
- Pre-assignment training
o Cross-cultural training (CCT) for global managers and their
accompanying relatives plays a crucial role in the pre-assignment
process.
o The well-being of expatriates and their families in the local
country depends largely on how well they were prepared for the
global assignment.
- Expatriate training and development focus
o Cultural competence
 Motivation and positive attitudes toward intercultural
values and situations
o Interpersonal competence
 Networking, relationship building, empathy, and diplomacy
skills
o Intrapersonal competence
 Confidence, resilience, and tolerance for ambiguity
o Global business competence
 Understanding the host country business environment,
ability to adapt to local business practices, ability to share
knowledge across international business settings
- Guidelines for effective training
o Training planning
o Training contents
o Training approaches
o Treating the international assignment as on-the-job training
- Post-assignment activities
o Repatriation
 The PCNs, TCNs, or even HCNs finish their overseas
assignment and come back to their home headquarters or
home subsidiaries
o Reverse culture shock
 Feelings of anxiety, uncertainty, and disorientation upon
reintegration into one’s home country and culture
- Career development
o There are two primary issues related to career development for
global managers:
 The international assignment is one step in the career
development plan.
  With subsequent assignments, it is important to make use
of the KSAOs developed internationally.
- Summary
o L.O. 11.1 International expansion into new markets present
unique challenges to human capital planning.
o L.O. 11.2 There are several ways in which a company can
expand internationally.
o L.O. 11.3 International assignments can take different forms.
o L.O. 11.4 International human capital demand and supply
decisions must take into consideration the additional
complexities of whether to source human capital from the host
country, the home country, or elsewhere; and how the local
environment may influence the way jobs are structured or tasks
are performed.
o L.O. 11.5 It is important to train expatriate employees
beforethey embark on an international assignment.

- Merger definitions
o Merger
 A consolidation of two organizations into a single
organization.
o Horizontal merger
 The merging of two competitors. These mergers typically
are subject to review by regulators who fear monopoly
power in the marketplace.
o Conglomerate merger
 Occurs when one company merges with another but
the two companies have no competitive or buyer–seller
relationship. In other words, they are in different
businesses competing in different markets.
o Vertical merger
 Occurs when a buyer and a seller merge to achieve the
synergies of controlling all factors affecting a company’s
success, from the production of raw goods to
manufacturing to distribution and retail sales.
o Acquisition
 The purchase of an entire company or a controlling interest
in it
 o Consolidation:
 The joining of two or more organizations to form a new
company
o Takeover
 One company acquiring another company
- Strategic benefits
o Operating synergy
 The cost reduction achieved by economies of scale
produced by a merger or acquisition
o Vertical integration:
 The merger or acquisition of two organizations that have a
buyer–seller relationship
o Horizontal integration:
 The merger or acquisition of rivals
o Companies merge for three reasons:
 Strategic benefits
 Financial benefits
 Needs of the CEO or managing team
- Financial benefits
o Reduce the variability of the cash flow
o Use funds generated by their own mature (or cash cow)
businesses to fund growing businesses
o Tax advantages
o Acquisitions provide speedy access to new markets and
new capabilities
o Company is undervalued
o Organizations expect to reduce the variability of the cash flow of
their own business. An organization lowers its risk by putting its
“eggs in different baskets.” However, a counterargument
suggests that executives cannot manage unrelated businesses
and must focus on and protect the core business from
competitive and environmental pressures. The suggested
wisdom is to put eggs in similar baskets.
o Organizations expect to use funds generated by their own
mature (or cash cow) businesses to fund growing businesses.
However, some experts argue that the advantages of using one
division to fund another division might be risky in the long run.
Labelling one business in the portfolio a “cash cow” and another
a “star” has negative effects. Employees in the “mature”
 business might feel neglected, as resources are poured into the
star, and may reduce those employees’ commitment to
production and innovation. Management might misjudge which
businesses have potential for market share increases and which
do not There may be tax advantages to the takeover, which vary
by country. Considerable tax losses in the acquired firm may
offset the income of a parent company. • It is expensive to enter
new markets and to develop new products. Acquisitions result in
more rapid market entries than internal innovation and product
development do. They provide speedy access to new markets
and to new capabilities, as exemplified by pharmaceutical
companies that purchase biotechnology companies for their
scientists and patents.
o Astute corporations may analyze the financial statements of a
company and decide that the company is undervalued. By
acquiring the company, and sometimes by merging it with the
administration already in place, a company can achieve financial
gains. However, the success of the valuation-driven acquisition
depends on timing economic cycles.
- Management needs
o Managers seek to acquire firms for personal motives
o Economic gains are not the primary consideration
o Incentives or payoffs given to CEOs if they engage
in acquisition behaviour
o Managers may pursue their personal interests at the expense of
stockholders
o Often the motives of executives can be deemed unconscious
o Some managers make decisions only to prove their capabilities.
o Other studies link personality factors such as the need for power
in making management decisions.
o Also note that alongside of power and influence, there is a role
for ego in mergers as well.
- Merger methods
o Hostile takeovers
 Dramatic and complex; one company takes over control of
another
o Poison pills
 Right of key players to purchase shares in the company at
a discount, making the takeover extremely expensive
 o White knights
 Buyers who will be more acceptable to a targeted company
o Pac-Man
 Defensive manoeuvre where the targeted company makes
a counteroffer for the bidding firm
- The success rate of mergers
o About 40–60 percent of mergers fail
o Approximately 15 percent of all mergers and acquisitions (M&As)
successfully achieve the financial goals that were envisioned
o Best success rates are with similar businesses rather than
dissimilar ones
o A large firm can absorb a small firm in a relatively
inconsequential fashion.
o The merger of two large firms generates more problems.
- Reason for M&A failures
o Integration difficulties
o Inadequate evaluation of target
o Large or extraordinary debt
o Inability to achieve synergy
o Too much diversification
o Managers overly focused on acquisitions
o Too large an acquisition
o Difficult to integrate different organization cultures
o Reduced employee morale due to layoffs and relocations
- Impact on HR
o Takeovers result in human displacement
o Costs of losing best staff difficult to measure
o M&As cause:
 Increases in employee insecurity
 Lower levels of satisfaction at work
 Less effective commitment
 Loss of trust in the firm and its top managers
 Self-interest survival tactics
 Job loss
- Communication channels during a merger
o Goals of a good communication strategy:
 Provide information through multiple channels (structural)
 Allay the anxiety faced by employees during the transition
period (psychological)
 o Communication strategy must provide both employer and
employee perspectives to support both employer and employee
perspectives
 Structural mechanics and psychological impact
- Cultural issues in mergers
o Culture:
 The set of important beliefs that members of an
organization share
 These beliefs are often unspoken
 Is shaped by a group’s shared history and experience
- M&A Culture Options
o Cultural pluralism: The partners co-exist.
o Cultural integration: The partner organizations blend current
cultures together.
o Cultural assimilation: One company (usually the acquirer)
absorbs the other.
o Cultural transformation: The partner companies abandon key
elements of their current cultures and adopt new norms.
- Challenges of merging 2 cultures
o Merging two cultures is difficult
 Consider a rule-bound company merging with a “cowboy”
culture company
 Consider an entrepreneurial culture merging with a rules-
and authority-based culture
o Difficulty in merging two cultures is increased when the merger is
between companies from two different countries
- Blending of cultures
o Blending of cultures can take years
o Companies need to identify differences and ensure employees
are aware of them
o Cultural clarification activities are helpful:
 “How do we view our organization’s culture?”
 “How do we view the other side’s culture?”
 “How do we think the other side views our culture?”
- HR planning in M&As
o M&A planning moves beyond the traditional concepts of HR
planning for several reasons:
 The contingency plan
 HR due diligence
  The transition team
- The contingency plan
o The plan should identify the contact person and the merger
coordinator
o The plan should outline the chain of command, communication
methods, procedures, and negotiation skills training
- HR due diligence
o Due diligence:
 A process through which a potential acquirer evaluates a
target firm for acquisition, including the review of:
 Collective agreements
 Employment contracts
 Executive compensation contracts
 Benefit plans and policies
 Incentive, commission, and bonus plans
o Due diligence also includes the review of:
 Pension plans and retirement policies
 WSIB statements, claims, assessments, and experience-
rating data
 Employment policies
 Complaints: employment equity, health and safety,
wrongful dismissal, unfair labour practices, certification,
and grievances
- Transition teams
o Appoint a transition team to deal with:
 Urgency
 Information gaps
 Stress
o HR policy review might uncover complementary, duplicated, or
contradictory HR policies for the merger companies
o The transition team is of vital importance to the successful
transition toward a merged company.
o The goals of the transition team are to:
 Retain talent
 Maintain productivity
 Select individuals for the new organizations
 Integrate HR programs
 Begin the process of integrating cultures
- Making merger management an HR core competence
 o Core competencies allow companies to differentiate
themselves from their competition by developing an integrated
set of unique and valuable capabilities
 Acquisition and merger management could be a
core competence for HR
 Managing capabilities across the entire M&A process
o Provides four key advantages for firms:
 Establishing an M&A process within a firm makes the
practice repeatable.
 Management can identify and build M&A talent strength
across each process stage.
 A set of M&A tools and templates can be applied during
each stage.
 Once a high level of integrated M&A competence is
established in the firm, other firms will find it difficult to
match the same combination of M&A talent, tools, and
execution.
- Impact of the merger on HR functions
o Mergers affect each of the following functions:
 Selection
 Two of the most critical issues for HR are related to:
o Retention
o Reduction
 Compensation
 Compensation decisions for the merged company
include:
o Which company’s plan should be adopted?
o Conducting a cost–benefit analysis of the
benefits, package by package
 Performance appraisal
 During a merger, employees undergo stress, and
productivity can be expected to drop
 Focusing on long-term goals may be difficult, so
these should be substituted with short-term goals
 Employee behaviour post-merger can be modelled
into three categories:
o Not knowing: Remedied by more
communication
o Not able: Solution is training
 o Not willing: A strong case for performance
management through feedback and incentive
 Training and development
 After the strategic plan has been developed, an
inventory of the KSAOs needed to align with the
strategy should be undertaken
 Managers and peers may need additional training in
the role of coach and counsellor to deal with post-
merger behaviours
 Employees need training for stress reduction and
relaxation techniques
 Labour relations
 Collective agreements will require the purchaser to
continue the employment of all unionized employees
with identical conditions of employment
 Collective agreements must be read to determine
what provisions exist for job security and what the
notification periods are for layoffs and terminations
 Unions should be informed and involved from the
outset of the merger so that they can make valuable
contributions
- Post-merger changes in employment status
o Demotion
 Under the new organizational structure, some employees
are given less responsibility, less territory, or fewer lines
due to amalgamation
o Competition for the same job
 Some companies force employees to compete for their old
jobs
o Termination
 Some employees are let go after the first performance
assessment
- Evaluation of success
o Success can be measured via:
 Financial measures
 Customer service metrics
 Human capital metrics
 Operational measures
- Summary
 o There are many financial and human impacts of mergers.
These results of mergers are not always as positive
as expected, particularly the anticipated financial benefits.
o The culture of the previously separate companies and the
new merged company is the most important predictor of
merger success.
o The most important contribution that HR professionals can
make towards the success of a merger is to develop a
contingency plan, conduct a due diligence review, and appoint a
transition team.
o There are three types of mergers: horizontal
mergers, vertical mergers, and conglomerate mergers.
o Mergers are undertaken to provide a strategic benefit, a financial
benefit, or to fulfill the psychological needs of the managers.
o The financial and employee effects of a merger can be
devastating.
o Culture is the most important predictor of merger success.
o The merger has an impact on each of the functional areas of HR.
There are three types of mergers: horizontal
mergers, vertical mergers, and conglomerate mergers.
o Mergers are undertaken to provide a strategic benefit, a financial
benefit, or to fulfill the psychological needs of the managers.
o The financial and employee effects of a merger can be
devastating.
o Culture is the most important predictor of merger success.
o The merger has an impact on each of the functional areas of HR.

Week 10: Outsourcing/HR assessment and

analytics
- Outsourcing
o Contractual relationship for the provision of business services by
an external provider
o Occurs when an organization contracts with another organization
to provide services or products of a major function or activity
- HR offshoring (HRO)
o Outsourcing done in a foreign country
 o Activities outsourced to other countries in order to lower costs
and improve quality
- Outsourcing functions
o Characteristics of potential outsourcing functions include being:
 Rule-based
 Repetitive
 Frequently undertaken
 Predictable
 Able to be fully or partly automated with technology
 Able to be delivered by remote sites
o Outsourced HR functions
 Compensation:
 Payroll
 Benefits
 Compensation administration
 Pension
 Recruitment and Selection:
 Advertisements
 Screening of applications
 Testing
 Reference checking
 Preliminary interviews
 Executive salary negotiations
 Exit interviews
 Training:
 Program delivery
 Program design and development
 Training consulting
 Training needs analysis
 Program evaluation
 Strategic planning for training and development
 Administration
 Training policies
 Health and Safety:
 Employee assistance programs
 Wellness programs
- Retain or outsource HR functions
o Impact of retaining all HR functions in-house:
 Enhanced trust
 More competency development
  Clearer strategic focus
o Impact of outsourcing some HR functions:
 Decrease in flexibility
 Slowdown in processing time of transactional work
 Decrease in job satisfaction among HR managers
- Major reasons for outsourcing
o Financial savings
 Cost reductions created by outsourcing transactional
functions
 Lower salaries/wages paid to outsourced workers
 Economies of scale through third-party providers
o Strategic focus
 Employers decide to focus on core competencies
 Activities traditionally performed internally
 Activities critical to business success—core work
contributes directly to the bottom line; non-core work
doesn’t
 Activities creating current or potential competitive
advantage
 Activities that will influence future growth or
rejuvenation
o Access to advanced technology
 Organizations want to improve technical service.
 Technology enables a company to reduce transaction time.
o Improved service levels
 Quality is improved.
 Service focus improves flexibility, response, and
performance.
 External counselling services provide increased
confidentiality.
o Access to specialized expertise
 Experts understand the complex laws and regulations
required in HR
 Use of experts reduces the risks and liabilities for
organizations
 Access to best practices
o Organizational politics
 Outsourced function is not as visible as an in-house
department performing the same tasks
  Outsource to get rid of a troublesome department with
employees who are underperforming
 Outsourcing reduces head count
- Benefits to Canada
o Most Canadians benefit by lower costs of consumer goods.
o Canadian incomes have also benefited by the productivity gains
achieved through global competition.
o Canada helps to alleviate world poverty by employing millions of
workers through outsourcing arrangements.
- Risk and limitations of outsourcing
o Projected benefits versus actual benefits
o Service risks
o Employee morale
o Security risks
o Reduced value
- Projected benefits versus actual benefits
o 50 percent found that it was more expensive to manage the
outsourced activity than originally expected.
o Incompatible systems and client demands are the reason for
excessive costs.
- Service risks
o Contractual arrangements dictate which services will be
provided.
o Flexibility is limited in terms of adding new features or changing
service levels.
o 25 percent reported a decrease in customer service compared
with the in-house service, and a less personal relationship with
their own employees.
- Employee morale
o Primary risk in outsourcing is the effect on employee morale and
performance
o Employees can feel displaced, resentful, alienated, and anxious
o Disintegration of an organization’s culture
o Organizations that outsource face a backlash
- Security risks
o Information leaks
o Important for software development with intellectual property
concerns
o Loss of confidential employee data
- Reduced value
o Extreme levels of outsourcing hollow out a company
o An organization experiences a reduced capacity to generate
profits or innovate
o Vendor may sell the acquired know-how and company secrets to
a competitor
o Outsourcing routine low-value tasks may not result in the
remaining HR staff becoming focused on more strategic high-
value work
- Management of outsourcing
o Outsourcing must be subjected to a cost–benefit analysis
o Preparation for outsourcing includes the following:
 Develop meaningful benchmarks and data
 Develop change management skills
 Develop contract and performance management skills
 Develop communication channels and skills
- Selecting the vendor
o Once outsourcing has been selected, the organization needs to
do the following:
 Inform the staff of the affected function
 Prepare a request for proposal (RFP)
 Invite internal and external bids
 Establish a team to evaluate these bids
- Negotiating the contract
o Customize and negotiate the outsourcing contract
o Set performance standards or penalty clauses for the outsourcing
company
o Establish benchmarks for service expectations
 Response time
 Response cost
 Customer satisfaction ratings
- Monitoring the agreement
o Most frequent issues arising out of outsourcing:
 Poor service definition
 Weak management processes
- Policy options to limit outsourcing
o Short-term government policies
 Labelling that identifies country of origin
 Tax incentives to manufacture in Canada
 o Longer-term policies
 Increase investment in education to increase Canadian
intellectual capital
 Invest in research and innovative ways to manufacture and
reduce costs
- Summary
o L.O. 13.1 Outsourcing refers to the contractual arrangement
wherein one organization provides services or products to
another.
o L.O. 13.2 Organizations tend to outsource functions and
programs that are rule-based, repetitive, frequently undertaken,
and can be automated.
o L.O. 13.3 The advantages of outsourcing include the reduction
of costs; the increased energy and time to focus on an
organization’s core competencies; access to technology and
specialized expertise, both of which result in increased levels of
service; and the political advantages of removing a troublesome
function or reducing head count.
o L.O. 13.4 Managing the contractual arrangement with the
service provider is the key to optimizing the benefits and
minimizing the risks.

- The importance of evaluating HRM

o Measurement of the HR function is critical for improving both the
credibility and the effectiveness of HR.
- Resistance to HR measurement
o Some HR managers resist measuring their work, due to:
 Lack of integration of HRISs with each other and with
operational systems
 Limited knowledge of measurement models and limited
skills to measurement design
 Main reason HR is not measured is that there is no
standard way of measuring
o HR function needs to develop a set of analytic measures that can
be used to describe, predict, and evaluate the quality and impact
of HR practices
- Reasons for measuring HRM effectiveness
o Labour costs are most often a firm’s largest controllable cost
 o Employee performance can be rewarded objectively
o Organizations have legal responsibilities to ensure compliance
with laws governing the employer–employee relationship
o Evaluations determine which HR practices are effective
o Measuring and benchmarking HR activities result in continuous
improvements
o Audits will bring HR closer to the line functions of the
organization
o Data will be available to support resource allocations
o Investors want the information
o Using measures to demonstrate the contribution of HR leads to
HR being welcomed at the boardroom table
- The 6C model of HRM impact
o Compliance
 Ensure that organizational practices comply with the law
and ethics in areas such as:
 Health and safety
 Employment equity
 Industrial relations
 Employer–employee relationships
o Client satisfaction
 Organizations are tracking their success by measuring
customer satisfaction.
 Managers are turning to client or constituent group
perceptions about the effectiveness of HR performance.
 Advantages of measuring client satisfaction
 Measuring client satisfaction reminds the HR
department that it provides a service to the clients
and must meet their expectations.
 Surveying clients about their unmet needs increases
the credibility of the HR function.
 It is important to survey the constituent groups
before, during, and after a change program.
 Methods of measuring client satisfaction
 Information can be gathered from clients in several
ways:
o Informal feedback
o Surveys
o Critical incident method
  Problems measuring client satisfaction
 High expectations of clients
 Conflicting expectations
 Professional affiliations

o Culture management
 Highly effective organizations seek to influence employee
attitudes through the development of an appropriate
culture that will support optimum performance.
 Culture
 A set of important beliefs that members of a
community share
 Attitudes
 Perceptions or opinions about organizational
characteristics
o Cost control
 Labour components in service organizations are an
organization’s single largest expense
 This cost represents up to 85 percent of the
expenses in white-collar organizations.
 Three ways to reduce labour expenses by reducing the size
of the labour force:
 Technology
 Outsourcing
 Downsizing
o Contribution
 Identify and evaluate HR’s contribution
 Beyond its use of financial resources, HR must contribute
to the bottom line
 HR practices can affect organizational performance via:
 Increased knowledge, skills, and abilities
 Improved motivation
 Reduced shirking
 Increased retention of competent employees
o Collect and convert
 Gathering data on employees to predict future behaviour
 HR designs programs to change or modify employee
behaviour
 Using data to solve a people problem
  Big data analysis uses software to identify
meaningful patterns in a set of data about employees
- Increasing efficiency
o Efficiency
 Results achieved compared to resource inputs
o Measures of efficiency
 Time, such as time to process a claim
 Volume, such as number of people interviewed
 Cost, such as cost per training hour
- Cost of employee behavior
o Each of these HR costs can be measured, benchmarked,
managed:
o Absenteeism
o Turnover
 Includes termination, replacement, lost revenues, learning
curve, and productivity losses
o Occupational injuries
o Illnesses
- Financial measures
o Survival
o Profits or return on investment
 ROI: Return on investment
 ROE: Return on equity
- Measures of managerial perceptions of effectiveness
o Non-financial measures need to be used that are organizationally
dependent:
 Management’s assessment of the organization’s
performance relative to its competitors
 Achievement of one group’s political objectives at the
expense of a competing group
 Adaptation of an organization to its environment
- HR analytics
o An evidence-based approach for making better decisions about
employees and HR policies, using a variety of tools to report HR
metrics and to predict outcomes of HR programs
o An emerging science that has great potential for the
management of human resources
o An important tool for reducing employee turnover and cultivating
a positive company culture
- Workforce analytics
o Evidence-based management:
 How HR metrics, such as turnover and employee
engagement, are used to describe the workforce
 Identification of metrics that are valid and reliable
- Steps in the HR analytic process
o Determine constituent group requirements
o Define HR research and analytics agenda
o Identify data sources
o Gather data
o Transform data
o Communicate intelligence results
o Enable strategy and decision making
- HR analysts
o HR analytics capabilities are strategically positioned in terms of
organizational structure
o Skills most valued for analysts working with big data:
 High-level technical skills
 Strong interpersonal skills
- Ethics of HR analytics
o Ethical concerns include:
 Operationalizing bias and discrimination
 Behaviour shaping
 Threatening privacy or autonomy through tracking and
surveillance
 Creating inconvenience or income insecurity
 Reducing performance/people to numbers
- Future of HR analytics
o HR professionals are generating data establishing the
effectiveness and efficiency of HR programs
o HR data is tightly linked to operational data
 Data is used to drive programs to meet organizational
objectives
- Approaches to measuring HRM practices
o Activity-based measures
 The number of employees completing training
 The number of employees hired
o Costing measures
 The cost of training programs
  The cost per hire
o Client satisfaction
 The manager has a problem solved
 The HR department processes information quickly
- Cost-benefit analysis
o Cost–benefit analysis
 The relationship between the costs of a program and its
benefits
o Direct costs
 The hard costs that can be measured by expenditures
o Indirect costs
 The soft costs whose value can be estimated but not
measured easily by financial expenditures
- Utility analysis
o Utility analysis
 A method of determining the gain or loss that results from
different approaches
o A tool that calculates the costs and probable outcomes of
decisions
o Assists HR managers in making choices between the usefulness
of programs
- Auditing
o A measurement method that assesses progress against a plan
o An important management control method to evaluate an
organization’s performance and effectiveness of HR management
o Audits keep the HR department on track
 The primary tool to assess current performance in order to
develop action plans and future goals
- Benchmarking
o A process that can enhance organizational performance by
establishing standards against which processes, products, and
performance can be compared and improved
o Four sources for benchmarking:
 Internal
 Competitive
 Sector
 Best-of-breed organizations
- The HR scorecard
o Balanced scorecard
  A balanced set of measures to show contribution to
organizational performance
o Assumes that financial measures alone do not capture
organizational performance
o Assumes that successful business satisfies the needs of
investors, customers, and employees
- Measuring the worth of employees
o Great slogans like “Employees are our greatest assets” indicate
the importance of employees’ human capital for organizational
success.
o Human capital includes employees’ knowledge, skills,
capabilities, and attitudes.
o Assessing the worth of intellectual capital or human capital in an
organization is incredibly complex.
- Universality of best practices
o HRM must be measured against unit goals, not against some
generality such as growth or profits.
o Aligning HR practices with an organization’s strategy will result in
greater performance than the method of copying other HR
strategies.
- Separation of cause and effect
o HR professionals need to be able to understand the link between
HR activities and results.
o Leading indicator
 anticipates, predicts, or affects the future.
o Lagging indicator
 represents information that results from an event or a
change.
- Successful measurement
o HR has to overcome the following hurdles in development of
successful HR metrics:
 Identify measures that are grounded in research and
theory, and are practical
  Gaining acceptance of these measures by constituent
groups
 Applying these measures consistently and over time
- Reporting to boards of directors and shareholders
o External constituent groups want to know the human capital
numbers, as these are often linked to the future performance of
the organization.
- Summary
o L.O. 14.1 Workforce analytics enables managers to make better
decisions about employees and HR programs.
o L.O. 14.2 The 6C model for measuring HR effectiveness has six
areas: compliance with laws and regulations, client satisfaction,
culture management, cost control, contribution, and collection
and conversion of big data into insights to predict employee
behaviour.
o L.O. 14.3 Methods to measure the impact of HRM include cost–
benefit analysis, utility analysis, and audits.
o L.O. 14.4 There are challenges in measuring HR effectiveness:
Overall organization goals might not be applicable to all
branches or subsidiary companies, it is difficult to relate cause
and effect, and some HR professionals do not see the benefit in
such measuring.
o