Canadian Human Resource Management (2022) PDF

Page i CANADIAN HUMAN RESOURCE MANAGEMENT A STRATEGIC APPROACH THIRTEENTH EDITION Dr. Hermann F. Schwind Saint Mary’s University Dr. Krista Uggerslev Northern Alberta Institute of Technology Dr. Terry H. Wagar Saint Mary’s University Dr. Neil Fassina Okanagan College Page ii Published by...

Page i CANADIAN HUMAN RESOURCE MANAGEMENT A STRATEGIC APPROACH THIRTEENTH EDITION Dr. Hermann F. Schwind Saint Mary’s University Dr. Krista Uggerslev Northern Alberta Institute of Technology Dr. Terry H. Wagar Saint Mary’s University Dr. Neil Fassina Okanagan College Page ii Published by McGraw Hill 145 King Street West, Suite 1501 Toronto, Ontario, Canada, M5H 1J8 Telephone: 1-800-565-5758 Website: www.mheducation.ca Canadian Human Resource Management, Thirteenth Edition Hermann F. Schwind, Krista Uggerslev, Terry H. Wagar, Neil Fassina ISBN-13: 978-1-26-088143-1 ISBN-10: 1-26-088143-1 Copyright © 2022 by McGraw-Hill Ryerson Limited In the case of photocopying or other reprographic copying, seek a licence from The Canadian Copyright Licensing Agency (Access Copyright). For an Access Copyright licence, visit www.accesscopyright.ca or call toll-free to 1-800-893- 5777 1 2 3 4 5 6 7 8 9 TCP 28 27 26 25 24 23 22 Printed and bound in Canada Senior Director of Product, Canada: Rhondda McNabb Senior Manager, Content & Product Development: Denise Foote Portfolio Manager: Amy Clarke-Spencley Marketing Manager: Emily Park and Kaylee Houde Content Developer: Veronica Saroli Product Team Associate: Christine Albert Supervising Editor: Jack Whelan Permissions Editor: Monika Schurmann Copy Editor: Laurel Sparrow Production Coordinator: Jason Stubner Interior Designer: David Montle Cover Design: Dianne Reynolds Cover Image: Sylvia Elzafon Page Layout: Straive Printer: Transcontinental Printing Group ALL RIGHTS RESERVED. NO PART OF THIS BOOK MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS, ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPYING, RECORDING OR BY INFORMATION STORAGE AND RETRIEVAL SYSTEMS, WITHOUT PERMISSION IN WRITING FROM MCGRAW HILL. Fictitious names of companies, products, people, characters and/or data that may be used herein (in case studies or in examples) are not intended to represent any real individual, company, product or event. ISBN-13: 978-1-26-088143-1 ISBN-10: 1-26-088143-1 eISBN-10:1-26-503403-6 Page iii About the Authors DR. HERMANN F. SCHWIND Dr. Schwind is Professor Emeritus (Human Resource Management) at Saint Mary’s University in Halifax. He received his Ph.D. from the University of British Columbia, B.B.A. and M.B.A. degrees from the University of Washington, and mechanical and industrial engineering degrees from German institutions. He has 15 years of industrial experience and has taught as Visiting Professor at the University of Ottawa; at Sophia University in Tokyo; and at the Institute for International Studies and Training in Fujinomiya, a Japanese management training centre. Dr. Schwind was a founding member and vice-president of the British Columbia Society for Training and Development, president of the Halifax and District Personnel Association (1984/86; now the Human Resource Association of Nova Scotia), and president of the Administrative Science Association of Canada. His research and publications focused on performance appraisal, training and development, motivation and compensation, and cross-cultural management. He also worked as a human resource consultant for 25 years. DR. KRISTA UGGERSLEV Dr. Krista Uggerslev is the Applied Research Chair in Leadership and Talent at the Northern Alberta Institute of Technology. She holds Ph.D. and M.Sc. degrees in Industrial and Organizational Psychology from the University of Calgary, and was a tenured Associate Professor in the Asper School of Business at the University of Manitoba. In her research, Dr. Uggerslev is a co-founder of metaBUS, creating Big Data tools for locating, curating, and synthesizing scientific research to propel the speed of science and disseminate information for evidence-based practice. Her research has appeared in the world’s top academic journals in applied psychology and business and has been presented to national and international audiences, including NATO. In her consulting work, Dr. Uggerslev provides guest lectures on topics related to leadership, talent management, and demographic and economic changes in Canada and has developed and validated employee selection and performance appraisal systems for private, public, and non-profit organizations. DR. TERRY H. WAGAR Terry H. Wagar is a Professor of Human Resource Management/Industrial Relations at Saint Mary’s University in Halifax. He has also taught at the University of South Australia, Wilfrid Laurier University, and the University of Western Australia. Dr. Wagar’s degrees include an M.B.A. from the University of Toronto, a Master of Industrial Relations from Queen’s University, an LL.B. from the University of Ottawa Law School, and a Ph.D. in labour relations, human resource management, and statistics/research methods from Virginia Tech. Dr. Wagar has been a visiting scholar/professor at several universities, including Flinders University of South Australia, University of Kentucky, University of Waikato, Queen’s University, and the University of Western Australia. His research has been published in Canada, the United States, Europe, Asia, Australia, and New Zealand. DR. NEIL FASSINA Dr. Neil Fassina is the president of Okanagan College and former president of Athabasca University. He was also the provost and vice-president academic and dean of business at NAIT. He received his Ph.D. in management from the Rotman School of Business at the University of Toronto and his B.Sc. in psychology from the University of Calgary. He is a Chartered Professional in Human Resources (CPHR) and a Designated Corporate Director (ICD.D) through the Institute of Corporate Directors. In his research, Dr. Fassina addresses questions related to the areas of applied decision making—such as negotiations and strategic decision making—as well as social exchange relationships and talent management. As an educator, Dr. Fassina delivers seminars and workshops on effective negotiation strategies, strategic planning, governance, conflict management, and communications, among other human resource–related topics, to clients at all levels of private, public, and not-for-profit organizations. Page iv Letter to Students Dear Student, This book has a history of using orchestra themes as a cover picture. A high performance organization can be compared to a well-managed symphony orchestra, made up of dedicated individuals united in a common purpose and under the guidance and leadership of a conductor. Creating that high-performance organization begins with effective human resource management. Like the conductor of the orchestra, the HR professional takes responsibility for seeing the whole become larger than the sum of its parts. Through strategic planning, thorough recruitment, careful selection, onboarding, ongoing training, helpful feedback, and progressive rewards, the HR professional can help create an efficient organization and a positive work environment. In this thirteenth edition, an orchestra is again featured on the cover of the book. This time, the photo captures musicians from the Dallas Symphony Orchestra (DSO). Like all of us who have been going through the COVID- 19 pandemic, the musicians at DSO have learned to adapt and be conscious of the needs of humankind. As a diverse group, they’ve drawn upon technologies ranging from simple face masks to digital tools that foster the creation of enriching digital experiences. The same trends impact the practice of HR, and you’ll find current advances reflected in the content, examples, and “how to” steps used throughout this book. Each chapter in this book includes many common elements, such as learning objectives, terms for review, discussion questions, and a short case incident. Within all chapters, you will find a Spotlight on HRM box. These timely articles illustrate a manager’s or consultant’s point of view on HR or offer a sharing of practical HR experiences relevant to the chapter. Each chapter also contains a Spotlight on Ethics, where an ethics issue relevant to the chapter content is raised. Photos of real job situations offer insights into work environments the book is discussing. Cartoons add some humour to the otherwise quite serious content. The References provide you with the sources for the information given in the chapter. They can also be used as a starting point for more detailed research. There is a short case and two in-depth cases associated with each chapter. The short cases are intended to be a quick read before launching into the practical application of material from the chapter. Each chapter has an independent case focusing on individual and relevant contexts and a running case, which is available on Connect. The cases provide discussion questions for application and reflection of the chapter content within the case contexts. If you have any feedback regarding the readability of the textbook or suggestions on how we could improve the next edition, please contact Krista Uggerslev via the email address given below. Good luck with your studies! [email protected] Page v Brief Table of Contents PART 1 The Strategic Human Resource Management Model 1. CHAPTER 1 Strategic Human Resource Management PART 2 Planning Human Resources 1. CHAPTER 2 Job Analysis and Design 1. CHAPTER 3 Human Resource Planning PART 3 Attracting Human Resources 1. CHAPTER 4 Legal Requirements and Diversity, Equity, and Inclusion 1. CHAPTER 5 Recruitment 1. CHAPTER 6 Selection PART 4 Placing, Developing, and Evaluating Human Resources 1. CHAPTER 7 Onboarding, Training and Development, and Career Planning 1. CHAPTER 8 Performance Management PART 5 Motivating and Rewarding Human Resources 1. CHAPTER 9 Compensation Management 1. CHAPTER 10 Employee Benefits PART 6 Maintaining High Performance 1. CHAPTER 11 Managing Employee Relations  1. CHAPTER 12 Ensuring Health and Safety at the Workplace 1. CHAPTER 13 The Union–Management Framework References Glossary Index Page vi Table of Contents 1. PART 1 The Strategic Human Resource Management Model 1. CHAPTER 1 Strategic Human Resource Management Learning Objectives What Is Human Resource Management? Making Human Resource Management Strategic Spotlight on Ethics: What Is a “Right” Behaviour? The Organization of Human Resource Management Today’s Human Resource Management Professional The Framework Used in This Book Spotlight on HRM: Human Capital: A Key to Canada’s Competitiveness Summary Terms for Review Review and Discussion Questions Short Case1-1: Human Resource Decision Making at Canada Importers Ltd. Case Study: DigiTech: Connecting Organizational Strategy to Human Resource Strategy 1. PART 2 Planning Human Resources  1. CHAPTER 2 Job Analysis and Design Learning Objectives Uses of Job Analysis Information Steps in the Job Analysis Process Job Description Job Specifications Job Performance Standards Spotlight on HRM: Job Descriptions Can Help Meet New Hires’ Expectations of the Job Competency Models Spotlight on Ethics: Job Design, Supply Chain, and Company Values Job Design Job Analysis in the Gig Economy Summary Terms for Review Review and Discussion Questions Short Case 2-1: Maritime Wooden Boats Case Study: Starbright Casino: Using Job Analysis for Job Rotation and Redesign 1. CHAPTER 3 Human Resource Planning Learning Objectives Relationship of Human Resource Planning to Strategic Planning The Human Resource Planning Process Forecasting Labour Demand The Supply of Human Resources Spotlight on Ethics: Cutting Costs Program Measurement and Evaluation Human Resource Information Systems The Role of Data and Analytics in Advancing Strategic HRM Human Resource Accounting Spotlight on HRM: Emergent Human Resources Trends That Were Accelerated by the COVID-19 Pandemic Summary Terms for Review Review and Discussion Questions Short Case 3-1: Temporary Foreign Workers Case Study: InfoServe: Planning for Human Resource Needs 1. PART 3 Attracting Human Resources 1. CHAPTER 4 Legal Requirements and Diversity, Equity, and Inclusion Learning Objectives Which Employment Laws Apply? Human Rights Legislation Page vii Spotlight on Ethics: A Weighty Problem Privacy Legislation Workplace Policies Spotlight on HRM: Considerations for a Social Media Policy Diversity, Equity, and Inclusion in Canadian Workplaces Summary Terms for Review Review and Discussion Questions Short Case 4-1: Climbing the Ladder Case Study: Metro School District: Born at the Wrong Time? 1. CHAPTER 5 Recruitment Learning Objectives Strategic Importance of the Recruitment Function Constraints on Recruitment Applying for a Job Recruitment Methods Advertising Spotlight on Ethics: Amazon Scrapped Artificial Intelligence Recruiting Tool After Discovering It Was Biased Against Women Spotlight on HRM: Recruiting Digitally Choosing Recruitment Sources Evaluating the Recruitment Function Summary Terms for Review Review and Discussion Questions Short Case 5-1: RecruitRight Case Study: Crown and Bull Pub: Screening Job Applicants Based on Applications and Social Media 1. CHAPTER 6 Selection Learning Objectives Strategic Significance of the Selection Function Spotlight on Ethics: Posting an Ad for a Job That Does Not Exist Steps in the Selection of New Employees Employment Interview Spotlight on HRM: Resume Assistant Tool Connects to LinkedIn’s Job Openings Right From Microsoft Word Evaluating the Selection Summary Terms for Review Review and Discussion Questions Short Case 6-1: A Selection Decision at Empire Inc. Case Study: Trajectory Investments: Evaluating the Selection Process in a New Region 1. PART 4 Placing, Developing, and Evaluating Human Resources 1. CHAPTER 7 Onboarding, Training and Development, and Career Planning Learning Objectives Strategic Importance of Onboarding, Training, and Development Onboarding Training Spotlight on HRM: Five Steps for Onboarding New Employees Virtually Employee Development Evaluation of Training and Development Spotlight on Ethics: Was It Really That Good? Career Planning and Management Summary Terms for Review Review and Discussion Questions Short Case 7-1: Interest Inventories for Career Planning Case Study: Calico Industrial Furniture: A New Career Planning Initiative 1. CHAPTER 8 Performance Management Learning Objectives Introduction to Performance Management Performance Appraisal Purpose The Performance Appraisal Process Page viii Spotlight on HRM: Management by Objectives at Agilent Technologies Spotlight on Ethics: Evaluating Your Boss’s Performance Communicating Feedback Talent Management Summary Terms for Review Review and Discussion Questions Short Case 8-1: The Malfunctioning Regional Human Resource Department Case Study: Start Up Central: Performance Appraisal Issues 1. PART 5 Motivating and Rewarding Human Resources 1. CHAPTER 9 Compensation Management Learning Objectives Total Compensation Model Objectives of Compensation Management Determining Base Pay Spotlight on Ethics: Job Evaluation and the Wage Gap Variable Pay Pay Equity Spotlight on HRM: What Can Employers Do to Address Gender Pay Inequity? Pay Secrecy Summary Terms for Review Review and Discussion Questions Short Case 9-1: Compensation Administration at Reynolds Plastic Products Case Study: Greener Environmental Services, Inc.: Flexible Benefit Program 1. CHAPTER 10 Employee Benefits Learning Objectives The Objectives of Benefits Legally Required Benefits Spotlight on Ethics: Today’s Decisions Can Become Tomorrow’s Dilemmas Voluntary Benefits Spotlight on HRM: Four Steps to Building a Successful Financial Wellness Program Flexible Benefits and Emerging Employee Assistance Programs Management of Voluntary Benefit and Service Programs Summary Terms for Review Review and Discussion Questions Short Case 10-1: Low Uptake on Benefits at Blueprint Technologies Case Study: Aptech Medical Laboratories: Flexible Benefit Program 1. PART 6 Maintaining High Performance 1. CHAPTER 11 Managing Employee Relations Learning Objectives Strategic Importance of Employee Relations Practices Effective Employee Communication Employee Counselling Employee Discipline Dismissal Employee Rights Spotlight on HRM: Termination Time Employee Involvement Spotlight on Ethics: The Ethics of Employee Monitoring Job Security, Downsizing, and Employee Retention Summary Terms for Review Review and Discussion Questions Short Case 11-1: The High-Involvement Workplace Dilemma Case Study: Doan v. City of New Halidart: Carl Doan Background 1. CHAPTER 12 Ensuring Health and Safety at the Workplace Learning Objectives Workplace Injuries and Health Hazards Federal and Provincial Safety Regulations Page ix Responsibility for Health and Safety Spotlight on Ethics: A Question of Safety Workplace Stress Spotlight on HRM: Safety Issues in Planning for a Pandemic or Emergency Other Contemporary Safety Issues Occupational Health and Safety Strategy Summary Terms for Review Review and Discussion Questions Short Case 12-1: Safety at Petro-Plus Quick Stop Case Study: Perth Metro Transit 1. CHAPTER 13 The Union–Management Framework Learning Objectives Why Employees Seek Union Representation Labour Unions: Goals and Structure Trends in Union Membership The Impact of Union Representation Spotlight on HRM: Moving Toward Cooperation? The Legal Environment The Collective Bargaining Process Spotlight on Ethics: Ethics and Refusing to Work Negotiating a Collective Agreement Administering the Collective Agreement Public Sector Bargaining Human Resource Practices in the Union Environment Implications of Union Avoidance Approaches Managing in a Union Environment Summary Terms for Review Review and Discussion Questions Short Case 13-1: My Work Was Done! Case Study: Traveller Inn Hotels: Labour Management Relations WE Connections Cases References Glossary Index Preface Page x We believe that human resources will play a critical role in determining the success of Canadian organizations in the twenty-first century. —THE AUTHORS Teachers and students ultimately determine the value of any textbook. Canadian Human Resource Management: A Strategic Approach is no exception. Its twelfth edition passed the test of the marketplace by earning adoptions and re-adoptions in more than 70 colleges and universities in Canada and by becoming the bestselling HR text in this country. The book’s thrust on presenting the key concepts, issues, and practices of this exciting field without being encyclopedic, its practical focus, and its emphasis on readability have endeared it to hundreds of instructors and thousands of students in Canada. Equally gratifying to the authors is that a large number of students retained this book for their professional libraries after course completion, suggesting that they found it to have real value. Balanced Coverage We attribute the book’s popularity to its balanced coverage of both theory and practice, and of both traditional materials and emerging concerns. Regardless of their orientation, readers will sense our belief that people are the ultimate resource for any employer. How well an organization obtains, maintains, and retains its human resources determines its success or failure. And the success or failure of our organizations shapes the well-being of every individual on this planet. The increasing speed of technological advances and growing globalization mean that managers operate in a more complex and dynamic setting that is also much more interdependent. Training in human resource management (HRM) will become even more critical in this new setting. The thirteenth edition of Canadian Human Resource Management: A Strategic Approach builds on the strengths of the twelfth edition. The book is divided into six parts.  Part 1: The Strategic Human Resource Management Model introduces the strategic model that will be used as a guide through all chapters. Part 2: Planning Human Resources describes the two pre-hiring processes, analyzing the jobs in question and planning for future staff needs. New job options have to be integrated into the organization as part of the planning process. Part 3: Attracting Human Resources covers the legal aspects of any hiring decision and discusses recruitment and selection processes and the management of a diverse workforce. Part 4: Placing, Developing, and Evaluating Human Resources discusses the importance of preparing employees for new challenges through training and development and providing timely performance feedback. Part 5: Motivating and Rewarding Human Resources reviews the many ways HR can contribute to a more effective organization through a fair and equitable compensation system and proficient benefits administration. Creating a motivating environment is another responsibility of HR. Part 6: Maintaining High Performance brings up the issues related to workplace safety, which is of concern to every manager. This concern has to be conveyed to all employees through an effective communication system. Good interpersonal relations require appropriate and fair discipline procedures. This part also discusses in detail the union–management framework, union organizing, collective bargaining, and collective agreement administration. Updated in the Thirteenth Edition The chapters in the new edition have been streamlined and organized for easier reading and retention of material by students. The focus of the text continues to be the strategic contribution of the HR function in organizations; but an explicit recognition of the relationship between HR strategies, tactics, and systems has been incorporated into the model and throughout the text material. Within this format, both present and emerging concerns of a significant nature are highlighted. Key terms are bolded and an extensive glossary of HR terms is included at the end of the text. This edition thoroughly covers Canadian employment and human rights legislation with many recent legal precedents and policies. A number of trends and potentially promising HR strategies have been incorporated into appropriate chapters of the new edition. HR has recently played a more important role in the overall strategy of companies. This trend is strongly reflected in the new edition. Page xi All chapters have been updated. Information on employment standards, human rights (especially in the area of gender and sexual diversity, people with disabilities, and Indigenous peoples), and privacy legislation with related statistics and demographics is the latest available. New work options not only provide organizations with opportunities to be more effective but also offer employees more flexible work opportunities, better suited to their needs. Growing internationalization of companies and international trade are reflected in the contexts and examples throughout the text. In this edition, we have integrated global and international content into each chapter. The text provides over 100 examples and anecdotes of Canadian and global firms—private and public, local and national, and large and small. In this edition, short cases are offered for each chapter to complement the individual chapter cases. These cases touch upon recent and important issues within the topic in varied contexts and circumstances. Chapter-by-Chapter Changes Chapter 1: Introduces a new framework for the content presented in the book, and updates to all figures to be current with the latest Canadian workplace trends. Chapter 2: Includes a new Spotlight on Ethics, short case, and photos. Chapter 3: A new short case and two longer cases provide students with current and relevant scenarios faced by HR practitioners, highlighting the balancing act of HR supply and demand. Chapter 4: Significant revisions including a new chapter outline, learning objectives, Spotlight on HRM, Spotlight on Ethics, and short case to reflect the current state of the legal environment surrounding HR practice in Canada. The content is expanded to reflect the increasing importance of diversity, equity, and inclusion in Canadian workplaces and the role of HR policies to guide practice. Chapter 5: Canadian companies from across the country as well as global companies (e.g., Facebook, Google) continue to appear prominently. A new Spotlight on Ethics and short case are provided. Chapter 6: New Spotlights on HR and Ethics, short case, and photos situated in research and guidance on selection practices bring the chapter material to life. Chapter 7: Provides new and revised figures, the addition of learning theory, further streamlining of content, and a new short case. Chapter 8: Includes a new Spotlight on Ethics on evaluating your manager’s performance, enhanced clarity and conciseness of content, and revised figures. Chapter 9: New framing around the total compensation approach, revised and new figures, well-known company examples, and removal of some advanced compensation material make this chapter yet more relevant. Chapter 10: Boutique-style benefits options and benefit provider options now available to Canadian employers are highlighted. A new short case and figures show how benefit practices are used by employers.  Chapter 11: New examples expand on the Canadian context and bring the employee relations concepts in the chapter alive. Chapter 12: A new health and safety case builds on the previous 11 chapters. A new individual chapter case highlights how judgment in a critical moment can lead to safety risks. Chapter 13: New cases give students the opportunity to examine a union drive in a workplace and reactions of HR and management to the union drive. A new individual chapter case provides students with the opportunity to examine grievances in a hotel chain. Key Features In addition to new features, important key features from previous editions have been retained. Cases—The text features an individual case and a running case anchored to material for every single chapter. The individual chapter cases highlight unique HR contexts and the strategic role of HR in today’s organizations. Available on Connect, the WE Connections cases feature a tech start-up that is struggling with human resources management challenges as the company continues to grow. Both of the cases allow the student to further learn about how HR can make a significant contribution to organizational success and growth through the application of chapter content. Page xii Spotlights—All chapters provide a Spotlight on HRM, focusing on an emerging practice, issue, or HR opportunity. Some Spotlights from previous editions have been retained at the request of reviewers; the new ones reflect current trends and practices. Ethics Box—A significant feature is the Spotlight on Ethics, in which an ethics issue relevant to the chapter content is discussed. Research—To assist students in making optimal use of online resources for more information on HR topics, HR-related websites are provided throughout the text and hotlinked in the ebook. To facilitate classes, discussion questions are included at the end of every chapter. In-Text Glossary—Important terms and concepts are highlighted with boldface type in the text and also defined in the text in the margins, allowing students to find critical definitions at a glance. All terms appearing in boldface are referenced in the Terms for Review section at the end of each chapter. They can also be found in the Subject Index, highlighted in a secondary colour. Finally, a full list of glossary terms is also provided in the end matter of the text. Figures—Charts and diagrams are included to illustrate relevant ideas and concepts. Terms for Review—All important terms and buzzwords are included. This is an excellent tool for self-testing. Learning Objectives—This useful tool enables students to gauge their progress and understanding while working through each chapter. End-of-Chapter Summaries—The authors provide an abbreviated version of the main ideas, theories, and strategies of each chapter. Review and Discussion Questions—These questions test students’ understanding of the chapter material and suggest topics for class or group discussions. Short Cases—Short Cases provide the opportunity to test students’ understanding of concepts and their impact on the organization, and opportunities for small group and class discussions to apply the chapter concepts. Subject Index—All chapter topics are indexed by subject. Glossary terms and page references are included in a secondary colour. References—Specific cases and other source references are gathered at the end of the text for more detailed research purposes. Glossary—The most comprehensive glossary in the HR field—over 300 items— completes the book, allowing students to find definitions of most HR terms and concepts. Human Resource Competencies Page xiii The Chartered Professional in Human Resources (CPHR) designates a nationally recognized level of achievement within the field of human resources in Canada for all provinces and territories except Ontario (see HRPA below). Certification with the CPHR signifies that the candidate demonstrates core competencies in the HR profession. The table below identifies the nine HR specific competencies for the CPHR which were updated in late 2021, along with the corresponding chapters where information about these disciplines is covered. CPHR Competencies HR Specific Competency Chapter Employee and Labour Relations 4, 11, 13 Total Health and Wellness 4, 10, 12 Inclusion, Diversity and Human Connections 4, 5, 6, 7, 8, 11 Total Rewards 9, 10 Learning, Development and Succession 1, 2, 3, 7, 8 Planning 1, 2, 3, 5, 6, 7, Workforce Planning and Mobility 8 HR Technology and Analytics 1, 3, 4, 5 Innovation 1, 3 Organizational Change and Development 1, 3, 7 The Human Resources Professional Association, which certifies Ontario HR professionals with the Certified Human Resources Practitioner designation, also identifies a competency framework for HR. The HRPA Human Resources Professional Competency Framework identifies nine competencies. The corresponding chapters in this textbook for the HRPA's organizational effectiveness competency are noted in the table below. HRPA Competencies HR Professional Competency Framework Chapter Strategy 1 1, 2, 3, 7, Organizational Effectiveness 8 Labour & Employment Relations 4, 11, 13 Learning & Development 7 Human Resources Metrics, Reporting, & Financial 3, 4 Management Professional Practice all Workforce Planning & Talent Management 2, 3, 7, 8 Health, Wellness, & Safe Workplace 10, 12 Total Rewards 9, 10 Award-Winning Technology Page xiv McGraw Hill Connect® is an award-winning digital teaching and learning solution that empowers students to achieve better outcomes and enables instructors to improve efficiency with course management. Within Connect, students have access to SmartBook®, McGraw Hill’s adaptive learning and reading resource. SmartBook prompts students with questions based on the material they are studying. By assessing individual answers, SmartBook learns what each student knows and identifies which topics they need to practise, giving each student a personalized learning experience and path to success. Connect’s key features also include analytics and reporting, simple assignment management, smart grading, the opportunity to post your own resources, and the Connect Instructor Library, a repository for additional resources to improve student engagement in and out of the classroom. Instructor Resources for Schwind, Canadian Human Resource Management, 13e Instructor’s Manual Microsoft® PowerPoint® Presentation Slides Test Bank Videos Application-Based Activities Comprehensive Test Bank Within Connect, instructors can easily create automatically graded assessments from a comprehensive test bank featuring multiple question types and randomized question order. Test Builder Available within Connect under the Library tab, Test Builder is a cloud-based tool that enables instructors to format tests that can be printed or administered within an LMS. Test Builder offers a modern, streamlined interface for easy content configuration that matches course needs, without requiring a download. Test Builder allows you to: Access all test bank content from a particular title Easily pinpoint the most relevant content through robust filtering options Manipulate the order of questions or scramble questions and/or answers Pin questions to a specific location within a test Determine your preferred treatment of algorithmic questions Choose the layout and spacing Add instructions and configure default settings Manager’s HotSeat Videos This resource allows students to watch real managers apply their years of experience to management and organizational behaviour issues. Students assume the role of the manager as they watch the video and then answer multiple-choice questions following the segment. The Manager’s HotSeat Videos are ideal for group or classroom discussions. Application-Based Activities The Connect Application-Based Activities are highly interactive and automatically graded application- and analysis-based exercises wherein students immerse themselves in a human resources environment, analyze the situation, and apply their knowledge of management strategies. Students progress from understanding basic concepts to assessing and solving complex real-world scenarios. Writing Assignments The Writing Assignment tool delivers a learning experience to help students improve their written communication skills and conceptual understanding. As an instructor, you can assign, monitor, grade, and provide feedback on writing more efficiently and effectively. Remote Proctoring & Browser-Locking Capabilities New remote proctoring and browser-locking capabilities, hosted by Proctorio within Connect, provide control of the assessment environment by enabling security options and verifying the identity of the student. Seamlessly integrated within Connect, these services allow instructors to control students’ assessment experience by restricting browser activity, recording students’ activity, and verifying that students are doing their own work. Instant and detailed reporting gives instructors an at-a-glance view of potential academic integrity concerns, thereby avoiding personal bias and supporting evidence-based claims. McGraw Hill & Online Consortium Partnership The Online Learning Consortium (OLC) is a higher education community dedicated to advancing quality digital teaching and learning experiences. McGraw Hill has partnered with the OLC to create a Quality in Online Learning Certification for our implementation team and Digital Faculty Consultants (DFCs). This certification teaches McGraw Hill Digital Success Consultants and DFCs research-backed best practices on how to build, facilitate, and assess online courses. Page xv Because learning changes everything.® Effective. Efficient. Easy to Use. McGraw Hill Connect is an award-winning digital teaching and learning solution that empowers students to achieve better outcomes and enables instructors to manage their course more efficiently. For Instructors Enhance your unique voice Connect makes it easy to deliver an engaging course with seamless LMS integration, mobile access to the digital textbook, a variety of assignment types, and reporting features that show how your students are progressing. Our trusted, high-quality course materials help students develop critical higher-level thinking skills while allowing you the flexibility to tailor your course. Study time made personal Incorporate adaptive study resources like SmartBook 2.0 into your course and help your students be better prepared in less time. Learn more about SmartBook 2.0’s powerful personalized learning experience at www.mheducation.ca/smartbook Support at every step McGraw Hill ensures you are supported every step of the way. From course design and setup to instructor training, LMS integration and ongoing support, your Digital Success Consultant is there to make your course as effective as possible. For Students Effective tools for efficient studying Connect is designed to make you more productive with simple, flexible tools that maximize your study time. With everything you need in one place, Connect makes it easy to read your digital eBook, complete assignments, and stay on track with an integrated calendar. Study anytime, anywhere Download the ReadAnywhere app to access your eBook or SmartBook 2.0 assignments on the go, online or offline. The app automatically syncs with Connect to ensure you’re always up to date. Learning for everyone McGraw Hill works directly with your institution’s Accessibility Office to meet the learning needs of all students. Reach out to your Accessibility Office or visit www.mheducation.ca/accessibility to learn more. Learn more at www.mheducation.ca/connect Page xvi Acknowledgements Writing a textbook requires the cooperation and support of many people. Canadian Human Resource Management is no exception. We are thankful to the many students, instructors, researchers, and practitioners who have used and commented on our last edition. Ultimately, it is the users of a book who can tell us about what we did right in the past and what we should do in the future. We hope the readers will find this thirteenth edition even more useful in teaching and learning about human resource management. A very special thank-you goes to Amy Clarke-Spencley, Veronica Saroli, Jack Whelan, Laurel Sparrow, and Monika Schurmann, who, with their special expertise, guided us toward a better product. And, finally, we would like to express our deeply felt thanks to those who assisted us in many tangible and intangible ways: Hermann, Ruth, Neil, Leslie, and Krista. Hermann F. Schwind Krista L. Uggerslev Terry H. Wagar Neil E. Fassina Part 1 The Strategic Human Resource Management Model As a strategic business partner, the human resource function helps organizations and their employees attain their goals. This section explores some of the pressures and opportunities faced by organizations and outlines how strategic human resource management provides a framework from which success can be built and sets the frame for the rest of this book. Page 1 Chapter 1 Strategic Human Resource Management The only vital value an enterprise has is the experience, skills, innovativeness, and insights of its people. LEIF EDVINSSON1 Page 2 LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. LO1 Discuss the objectives of human resource management. 1. LO2 Identify the steps in the strategic management of human resources. 1. LO3 Explain how human resource departments are organized and how they function. 1. LO4 Discuss the role of human resource professionals in today’s organization. Consider for a moment the impact that organizations have on your daily life. From the products you consume, to the services you use, to the post- secondary institution you are attending, the vast majority of your time is spent interacting with organizations and their products or services. One element ties all of these organizations together: people. People are at the core of all social organizations—from the sole proprietor who owns and operates a small coffee shop to an organization like Shopify with a market capitalization value of over $100 billion.2 It is individuals and teams that create the goals, the innovations, and the accomplishments for which organizations are praised. They create work environments that win awards, such as Deloitte’s award for “Canada’s Best Managed Companies.” From the organization’s perspective, people are resources. They are not inanimate resources, such as land and capital; instead, they are human resources. Without them, organizations would not exist. At the beginning of the 1960s, the National Aeronautics and Space Administration (NASA) was trying to figure out how to build a spacecraft that would allow humans to return safely to Earth.3 At the time, an aeronautical engineer named Charles Yost developed what was called “slow spring back foam.” This product was later adapted and is now referred to as “memory foam” and is found in football helmets, airline seats, and pillows. Although NASA’s balance sheet did not list its human “assets,” these resources were at work. Before the foam discovery, a casual observer would have considered NASA’s tangible infrastructure as the company’s most important asset. With each discovery and innovation necessary to enable space travel, NASA’s assets continued to grow. A keen observer would note that neither the tangible assets nor the innovation would be of great value without capable people to manage them. Amazingly, today NASA faces similar challenges; however, rather than returning from the moon safely, a major innovation challenge is how to return humans safely from Mars4 and simultaneously partnering with private organizations like SpaceX for human space flight.5 Page 3 Organizational success depends upon careful attention to human resources. An organization’s strategies are dependent on the people brought together to create them. In turn, the success of an organization relative to these strategies is dependent upon the practices used to organize and lead human resources. Some of the best managed and most successful Canadian organizations are those that effectively make employees meet societal challenges creatively. LO1 What Is Human Resource Management? To understand what human resource management is, we need to first consider why people come together to form organizations. In short, organizations bring people together in a coordinated manner to accomplish goals or objectives that could not be accomplished by a single individual. The goals that organizations set may be as varied as the organizations themselves. Many organizational goals, however, may be categorized into economic (e.g., profit, shareholder value), social (e.g., ethical practices), and environmental (e.g., reduction of carbon footprint) goals. For an organization to achieve its goals, employees must engage in actions and behaviours that move the organization toward accomplishing them. If employees do not contribute to an organization’s goals—or worse, they engage in behaviours or actions that move the organization away from its goals—the organization will stagnate and potentially fail. This principle applies to all forms of organizations—including for-profit, not-for-profit, social, governmental, and non-governmental organizations (NGOs), to name a few. At its core, human resource management is the leadership and management of people within an organization using systems, methods, processes, and procedures that identify, select, motivate, and enable employees to achieve outcomes individually and collectively that enhance their positive contribution to the organization’s goals. Thus, human resource management is not an end in itself; it is a means of structuring the organization to facilitate and enable the organization to achieve its objectives. The role of human resource management is therefore critical to the success—indeed, even the very survival—of the organization. The Difference Between Human Resource Management and a Human Resource Department Before moving on, it is important to differentiate between the field of human resource management and a human resource department. Although human resource management is central to all organizations, not all organizations will have a dedicated human resource department. The field of human resource management thus focuses on what leaders and managers should do regarding organizing human resource systems, policies, and procedures. These systems, in turn, create value by facilitating and enabling employees to achieve individual goals that in turn contribute to corporate or organization goals.6 A human resource department, on the other hand, is a specialized group with the primary focus of ensuring the most effective use of human resource systems across an organization to enhance employee performance and accomplish organizational goals. The contribution of a human resource department should be kept at a level appropriate to the organization’s needs and resources. In a new venture or micro-business, for example, human resource management may be performed by the entrepreneur or one individual who has numerous other duties within the organization. As the organization grows, it may decide to hire a professional human resource manager or human resource specialist. Within large- scale organizations, it is not uncommon to have numerous people dedicated to organizing human resource practices. However, resources are wasted when the human resource group is more or less sophisticated than the organization demands. A 2015 study conducted by Bloomberg BMA found that HR teams tend to comprise approximately 1.6 human resource staff for every 100 employees in organizations smaller than 250 employees. That number changes to about 0.6 human resource staff per 100 employees in organizations over 2,500 employees.7 See LO3 later in this chapter for further details on the structure of human resource departments. Page 4 Regardless of the size of an organization and whether or not the organization has a human resource department, the responsibility for the day-to-day management of human resources most often rests with individual managers throughout the organization. As a result, all leaders and managers must be familiar with the fundamentals of human resources. Human resource management as a specialist function evolved from very humble beginnings. Inseparable from key organizational goals, product-market plans, technology and innovation, and an organization’s strategy, the field of human resource management comprises numerous activities—many of them discussed in depth throughout this textbook. Although each topic within human resources is addressed individually, it is important to recognize that the activities within human resource management are all interconnected. Figure 1-1 highlights some of this interconnectedness. When a change is made to one activity or system, it often has an impact on another activity. For example, if an organization acts to engage long-term employees in order to prevent them from leaving, it may spend fewer dollars recruiting and hiring new employees.8 In order for human resource management systems, practices, and activities to be effective, leaders must consider how changes may affect the system overall. FIGURE 1-1 The Interconnectivit y of Human Resource Management Activities Table Summary: Summary LO2 Making Human Resource Management Strategic Human resource management must operate within the framework of an organization. Like other activities, human resource management activities must contribute to the organization’s goals and performance.9 In response to a growing call for accountability, recent decades have witnessed increased attention to strategic human resource management. Strategic human resource management seeks to recognize that the choice and integration of human resource tools will depend on what the organization is trying to achieve. As a strategic business tool, the human resource management activities must anticipate, align with, and contribute to the organization’s strategies. Similar to any other investment made by an organization, financial, technological, and infrastructure investments made in human resource systems, processes, and tools need to create a return on that investment that exceeds the investment itself. An organization’s strategy is similar to a game plan: It involves large-scale, future-oriented, integrated ideas and initiatives to achieve organizational goals and respond to uncertain and competitive environments facing the organization. In part, a strategy identifies how the organization will change and create long- term sustainable value given the environment the organization is in.10 Strategies can vary significantly, even within the same market. Walmart uses the slogan “Save money. Live better.”11 As a result, Walmart tends to follow a low-cost strategy. Target’s slogan, on the other hand, is “Expect more. Pay less.”12 As a result, Target tends to follow a value-based strategy. Page 5 In some cases, strategies may even differ within a company. For instance, Toyota uses the slogan “Let’s go places,” which is focused on innovation. Lexus, Toyota’s luxury vehicle division, focuses on quality, as indicated by its slogan, “The relentless pursuit of perfection.”13 Strategic human resource management is the process of vertically integrating the strategic direction of an organization into the organization’s choice of human resource management systems and practices to support the organization’s overall mission, vision, strategies, and performance. Simultaneously, strategic human resource management is a value-driven, proactive focus on how best to deploy and horizontally integrate the various sub-fields of human resource management to enable an organization of any size to achieve its strategic goals. We start with a discussion of strategic human resource management because it lays a foundation from which the topics discussed throughout this textbook can be integrated into a human resource (HR) system. At the core, HR strategies and tactics must be mutually consistent and must reflect the larger organizational mission and strategy. Even the best-conceived strategies may fail if they are not accompanied by sound human resource programs and procedures. Costco Wholesalers has a strategy based partly on high volume and value- based sales. To support this strategy, it has few people on the retail floor to help shoppers and instead employs a large number of cashiers to process orders more quickly. This could be compared to Holt Renfrew, which has a strategy based partly on high quality and high-value products. As such, Holt Renfrew employs proportionately more sales associates, to assist shoppers in product choice, and fewer cashiers. By integrating corporate strategies with the choice of HR practices, HR managers can remain proactive and anticipate challenges or problems both inside and outside the organization, and make adjustments before they impact the organization or its people. The challenge facing HR leaders is that often the human resource strategy needs to be put in place before the corporate strategy can be successful. That is, the HR strategy needs to be implemented so that the right people are in the right place at the right time to initiate the corporate strategy. Marriot Hotels & Resorts uses gamification to recruit potential Millennial employees. Alternatively, Zappos offers successful job candidates $3,000 to leave the recruitment process. The aim is to invite candidates who are not going to stay long term to exit the company early. Those who do not take the exit offer (which is 97 percent of candidates) have a better understanding of the corporate culture.14 The strategy of attracting talent through gamification is an example of how proactive strategies can meet the needs of organizations. Recent trends demonstrate the increased use of artificial (or augmented) intelligence and machine learning (AI/ML) in areas such as recruitment to ensure that job postings and resumé reviews are devoid of unconscious bias.15 Understanding the forces that may impact organizations and their strategies is critical in strategic human resource management and will be discussed later in this chapter. Just as each member of an organization is expected to generate positive contributions to accomplishing an organization’s goals, so too is every HR system. That is, each and every HR system, practice, process, or tactic should generate value for the organization. The challenge for HR managers is to understand that, within a system of people, a decision to change one thing will often have an impact on other HR practices or activities. Moreover, these decisions are often influenced by the organization and its environment. To this end, HR managers need to be able to integrate and synthesize information about an organization, its environment, its culture, and its strategies to make the most effective HR decisions for the organization: A number of organizations are installing workout facilities within their physical space. At first glance, this may appear to be simply a cost centre for an organization with respect to the installation and ongoing maintenance and operation of the facility. A closer consideration, however, may reveal increased employee morale, decreased expenses associated with sick days and health benefits, and a time savings for employees, who no longer need to leave the office early to drive to a gym. Page 6 Although HR managers must be consistently strategic in their mindset, HR issues are also dominating corporate strategic priorities. Consider first that employee salaries may account for more than 50 percent of the operating expenses in some organizations.16 Complicating matters are findings such as those in a 2013 study in the United States suggesting that actively disengaged employees cost the U.S. economy $450–550 billion a year.17 As a result, the expectations for HR groups are regularly on the rise: KPMG’s 2020 CEO outlook was completed in two waves because of the COVID-19 health crisis. When asked about their outlook in summer 2020, CEOs ranked talent risk as the primary threat to organizational growth,  citing the need to keep employees engaged, connected, and feeling safe; 73 percent of CEOs also noted that remote work has widened their talent pool.18 To meet these demands, HR teams and senior leaders in HR need to be strategic business partners who are able to make evidence-informed recommendations and decisions that enable individuals and teams to create more value for the organization. The gradual shift to strategic HR is evidenced by the 62 percent of senior HR leaders now reporting to the CEO or president of the organization.19 Understanding the Strategic Human Resource Management Process To be effective, an organization’s human resources strategy and associated system of processes and practices should be formulated after careful consideration of an organization’s environment, mission and objectives, strategies, internal strengths and weaknesses, and culture. For purposes of discussion, the human resource strategy formulation and implementation process will be broken down into five major steps, as outlined in Figure 1-2. Alternative sources may provide different stages and descriptions. Regardless, the logic remains consistent: Know what you are aligning to, understand your external and internal environment, make decisions, and evaluate the decisions. FIGURE 1-2 A Model of Strategic Human Resource Managemen t Table Summary: Summary Step 1: Organizational Mission, Vision, and Strategy Analysis The way in which an organization defines its mission often significantly influences human resource strategies. A mission statement specifies what activities the organization intends to pursue and what course is charted for the future. It is a concise statement of “who we are, and what we do” and gives an organization its own special identity, culture, and path of development. Page 7  Two similar pork producers may have varying missions. One may define the mission as “to be a sustainable pork producer,” whereas the other may define it as “to be a leading pork producer.” The associated strategies are likely to show significant differences. Apart from finding efficient ways to raise hogs, the first producer may also seek ways to improve the effectiveness and safety of manure recycling or seek strategies to raise antibiotic-free hogs, while the focus of the second producer may be expansion and profitability. Each will have an impact on HR practices such as talent acquisition. As defined earlier, an organization’s goals outline what specifically an organization seeks to achieve in a specific time period. Similar to a mission, an organization’s goals will also have a dramatic impact on human resource practices. The emergence of environmental, social, and governance (ESG) standards used by socially conscious investors20 is paired with organizations’ identifying unique goals related to environmental standards such as company waste and social standards such as ethical supply chains. Building on the example above of the sustainability focused pork producer, one might consider a social goal to be an inclusive organization. This goal would impact internal processes related to workplace equity, diversity, and inclusion, which are often led by HR specialists. Finally, a thorough analysis of an organization’s strategies is also critical in deciding on the appropriate array of HR practices. Energy companies who have identified strategies to enter the hydrogen market to curb emissions21 would need to work with their HR teams to identify the knowledge, skills, and abilities to carry out these strategies and determine whether internal or external talent is needed to achieve them. Many organizations are also now including specific strategies that directly consider their employees. For example, many organizations have set as a strategy to become one of Canada’s “Best Managed Companies.”22 The setting of corporate strategies directly related to HR is a growing trend as HR professionals continue to demonstrate their strategic value. Regardless of an organization’s strategic direction, human resources are required to formulate and fulfill the organization’s strategies. In all cases, the HR strategies should be chosen for their ability to enable the successful completion of the organization’s strategies. In some cases, a single HR strategy may be used to accomplish different corporate strategies. Consistent with the setting of corporate mission, goals, and strategies, HR managers must consider how the external environment will influence their decisions. This is the focus of the second step. Step 2: Environmental Scan Through careful and continuous monitoring of economic, social, and labour market trends, and by noting changes in governmental policies, legislation, and public policy statements, effective human resource management will be able to identify environmental threats and opportunities that in turn serve as a foundation for new actions. Some of these environmental forces facing Canadian organizations today are listed in Figure 1-3. For discussion purposes, the forces facing a Canadian organization (especially those affecting human resource management) can be grouped under five headings: economic (e.g., recession), technological (e.g., automation), demographic (e.g., workforce composition), sociocultural (e.g., ethnic diversity), and legal (e.g., changing laws). The first four forces will be discussed in this chapter. The critical importance of legal compliance for the HR function warrants a more elaborate review of the subject matter. Hence, this topic is discussed in detail in Chapter 4. FIGURE 1-3 Major Forces Facing Canadian Organization s Table Summary: Summary Page 8 Economic Forces Economic Force: Economic Cycles The first of four critical economic forces is economic cycles. Economies go through boom and bust business cycles. The Canadian economy is no exception. In today’s globally connected world, strengths and misfortunes originating in one economy are soon passed on to others. HR professionals must consider economic cycles when designing practices, policies, and the broader HR system. For instance, HR managers face special challenges during a recessionary period, as they often have to carry out the unpleasant task of planning, communicating, and implementing employee layoffs or terminations. Often, wage concessions have to be sought from labour for the sheer survival of the firm. Workforce morale, by and large, is low during a recessionary period; supplementary employee counselling may become necessary. At times, the entire organization may assume a crisis management posture, which creates new challenges for the HR manager with respect to policy formulation, communication, and implementation. The challenges are equally daunting coming out of a recession, as HR managers consider how best to grow the organization’s talent base. During growth cycles, organizations may be faced with the opportunity to recruit employees with a different skill set than those who may have been let go during the recessionary cycle. By the middle of 2020, Canada’s economy was shrinking at an unprecedented pace. According to the Ministry of Finance, the economy was contracting at over 5.8 percent per annum, a far cry from the 3.5 percent growth in 2017 and the 1.6 percent growth in 2019.23 Note that boom and bust cycles may not be the same across the country. For instance, the manufacturing sector in Southern Ontario often cycles based on the value of the Canadian dollar against the American dollar. The energy sector in Alberta, on the other hand, tends to vary based on the price of crude oil on the world market. This results in localized challenges for finding or shedding talent. Thus, HR managers need to consider economic forces at the local, national, and international level—which are discussed next. The COVID-19 pandemic further complicated the numerous challenges associated with adapting to traditional economic cycles. For much of 2020 and 2021, HR leaders needed to also adapt to the rapid closing and reopening cycles of businesses to account for national, provincial, and civic states of emergency, health orders, and community expectations. By April 2020, 3 million Canadians had lost their jobs and an additional 2.5 million had experienced COVID-19 related absences from work. Within nine months, the overall number had fallen to 1.1 million Canadians being out of work due to economic shutdowns.24 Despite a more positive outlook into 2022, the speed of the economic recovery in Canada as a result of the COVID-19 pandemic remains quite fluid. The Department of Finance projects that the estimated growth of 4.8 percent in 2021 may be tempered to 2.9 percent if health restrictions escalate. Far less volatility is expected in 2022.25 Economic Force: Global Trade International trade has always been critical to Canada’s prosperity and growth. Canada ranks high among exporting nations: on a per capita basis, we export much more than either the United States or China.26 The combination of a relatively small population, a large natural resource base, and a positive currency gives Canada an international trade advantage. Although our ability to compete in the international marketplace has been generally strong, Canada’s competitiveness has fallen. In 2011, Canada was the twelfth most competitive nation in the world; in 2019, we were ranked fourteenth (Figure 1-4).27 FIGURE 1- 4 How Competitiv e Is Canada Compared to Other Nations? Table Summary: Summary  SOURCE: Based on data from The Global Competitiveness Report 2019, Klaus Schwab, World Economic Forum. The ever-growing shift toward the global marketplace forces organizations to consider how they manage their employees. The emergence of open borders has presented newer opportunities to Canadian firms and professionals—resulting in both an increase in Canadians working abroad and an increase in economic immigration to Canada. Canada currently accepts over 341,000 immigrants per year; of these, approximately 58 percent are economic immigrants.28 Progressive HR practices and new government policies may be critical to meeting these growing realities. Indeed, the Canadian government is looking to increase immigration to Canada in an attempt to boost the economy as our population ages, with a focus on economic immigration as compared to family- or refugee- based immigration.29 As of 2020, permanent and non-permanent immigration accounted for over 80 percent of Canada’s population growth.30 Page 9 Economic Forces: Productivity and Innovation Improvement Productivity refers to the ratio of an organization’s outputs (e.g., goods and services) to its inputs (e.g., people, capital, materials, and energy). Productivity increases as an organization finds new ways to use fewer resources to produce its output. For example: A restaurant may seek to improve productivity by using fewer ingredients in recipes (reduction in raw materials) or by asking a server to also clear, clean, and reset tables (increase in responsibility and associated reduction in the need for additional staff). Alternatively, the restaurant may seek to increase the number of outputs by having more people come to the restaurant. The latter, however, may require increased marketing efforts, which would result in an increase in inputs. In a business environment, productivity optimization is essential for long-run success. Through gains in productivity, managers can reduce costs, save scarce resources, and enhance returns. In turn, improved returns enable an organization to provide better pay, benefits, and working conditions. The result can be a higher quality of work life for employees, who may then be more likely to be motivated toward further improvements in productivity. HR professionals contribute to improved productivity directly by finding better, more efficient ways to meet their objectives and, indirectly, by improving the quality of work life for employees. Unfortunately, optimizing productivity is not simply a matter of increasing outputs or decreasing inputs. In either case, the employees must adapt how work is done. As a result, a major challenge facing Canadian leaders is optimizing productivity while maintaining a high quality of engaged work life for the employees. Moreover, strategic human resource management seeks to address more than just financial productivity.31 Some of the strategies to address productivity will be discussed in Chapter 3. What is worrisome today is the gap between the productivity levels of Canada and its biggest trade partner, the United States.32 For over a decade, U.S. productivity has been consistently outpacing ours. Canada is steadily losing its ability to innovate and create wealth compared with other countries. According to the Conference Board of Canada, Canada is ranked ninth of 16 peer countries of the Organisation for Economic Co-operation and Development.33 Even more troubling is that, without enhanced management skills, something enabled through HR, the future is not likely to shift. If Canada is to improve—even maintain—its competitiveness, innovation on two fronts, namely people management and technology, is a must. Page 10 Among peer nations, Canada receives a poor rating for the number of patents filed per capita. Indeed, we are 15 of 16. Japan and Switzerland are ranked number 1 and 2.34 Without innovation, productivity differences tend to increase. As such, without innovation, Canadian employers and their HR professionals will be faced with the challenge of creating additional productivity improvements. As a progressive HR strategy, numerous organizations are starting to recruit or develop innovative staff to create a culture of innovation within the organization. Economic Force: Knowledge Workers Over the last 20 years, employment in primary and extractive industries (such as mining and fishing) has remained relatively constant or even dropped, whereas service, technical, and professional jobs have increased. The relative contribution to Canada’s employment in various industries is shown in Figure 1-5. Service industries such as education, health care, tourism, trade, and public administration make significant contributions to our national wealth today. FIGURE 1- 5 Employmen t by Industry in Canada Table Summary: Summary  SOURCE: Adapted from Statistics Canada, “Labour Force Characteristics by Industry, Annual, (×1000)” 2020, Table 14-10-0023- 01. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410002301 The move away from extractive industries increases the need for innovation. In part, it creates an environment that requires not only knowledge workers, but individuals who bring innovative thinking to their organization. Knowledge workers form the basis of a knowledge-based economy grounded in the production, distribution, and use of knowledge and information. Indeed, modern economies are becoming dependent on knowledge, information, and highly skilled individuals.35 A 2018 study by the Business Development Bank of Canada noted that 39 percent of small and medium-sized business were having difficulty finding new workers, and that these pressures would be present for at least a decade. Interestingly, the same study found that companies with strong HR policies had less difficulty.36 Page 11 The ability of organizations to find, keep, and continually retrain these workers might spell success in the coming years. This is not only a trend in North America. China has taken great strides toward moving from a production-based to a knowledge-based economy.37 Moreover, some have even signalled that the term knowledge workers needs to be changed to learning workers.38 With an increased reliance on knowledge workers, organizations also start to face challenges associated with employees hiding and withholding knowledge.39 A further challenge facing HR professionals in a growing knowledge-based economy is that educational attainment is not keeping pace. For instance, UNESCO found that governments are having difficulty keeping up with the pace of growth in higher education.40 Technological Forces Technological Force: Connectivity and Work Design Connectivity influences organizations and the way people work. Canada has witnessed the rapid growth of connectivity and access to high-speed information transmission systems affecting almost all walks of life. In December 2016, the Canadian Radio- television and Telecommunications Commission declared that access to high- speed Internet should be a base service for all Canadians.41 An unprecedented degree of connectivity has changed the way we work, play, study, and even entertain ourselves. Access to information has affected the way several organizations conduct their business. Nevertheless, Canada lags behind a number of developed nations in technology development and use. Approximately 91 percent of Canada’s population has access to the Internet.42 A key challenge, however, is that only 37 percent of rural households and 24 percent of Indigenous community households have access to Internet that is considered “high speed” compared to 97 percent of urban homes.43 Connectivity brings considerable flexibility into when and where work is carried out in that it enables remote work arrangements. In 2016, more than 19 percent of Canada’s working population worked from a nontraditional workplace, such as their home.44 That percentage jumped to nearly 40 percent of employees in April 2020 because of pandemic restrictions.45 Pre-pandemic, TELUS had arranged for half of its 30,000 employees to be able to work from home if they chose. In its teleworking pilot test, TELUS found that having 170 employees working from home saved 114 tonnes of greenhouse gases and 14,000 hours of traffic time. In the same pilot, TELUS found that morale as well as productivity increased as a result of telecommuting.46 Remote work is not without its HR challenges, however. For instance, a challenge related to remote work is how an organization can best ensure that the employee’s home workstation is safe. Inequality among job types and sectors also becomes a significant challenge in that not all jobs can be accomplished remotely, thereby creating further inequalities between individuals.47 Not all jobs lend themselves to less traditional workspaces; but with the advances in technology, virtually any job—or any part of a job—that involves work that is independent of other people and special equipment could be performed away from the workplace. Careful planning, training, and piloting may be required before remote work arrangements are rolled out in an organization, as managing from a distance is simply different from managing in person.48 As a platform for communication and interaction, the Internet has had a profound impact on human resource management activities. Social networking sites, video- sharing sites, wikis, blogs, and other interactive opportunities allow users to own and control data as well as add value to the applications they use. This has resulted in rapid adoption of social media for HR purposes and simultaneously created the need for policies about the limitations of social networking within organizations. See the Spotlight on Ethics for an example. Connectivity has also created a greater focus on cybersecurity.49 With employees working distally, the probability of data breaches is climbing. From a strategic human resource perspective, many organizations have taken to hiring cybersecurity experts to not only protect their sensitive data but also make attempts to breach their security systems in an effort to better protect their data. Technological Force: Automation Automation continues to be a technological force and opportunity that has affected Canadian organizations and their human resource management practices. Organizations tend to mechanize or automate for speed, reliability, or flexibility. Competition from other countries has made it imperative that we improve the speed of our manufacturing practices if we want to stay competitive. Page 12 By moving to a mechanized process, better service may be provided to the customer through increased predictability and reliability in operations and higher standards of quality in production. Machines, software, and algorithms do not go on strike, nor do they ask for raises. Mechanization allows for flexibility in operations. In several automated production facilities, even small production batches become economically viable since the time, cost, and effort involved in changing setups are minimal. The ability to produce small batches, in turn, enables a firm to focus on the needs of different customers and market segments and speed up delivery schedules. Shapeways is an organization that specializes in rapid prototyping and small- batch production through three-dimensional printing in materials such as plastic and metal. Mechanization and automation are not without HR challenges. Negative union attitudes toward mechanization are a barrier to the introduction of technology in the workplace. Automation may result in a smaller workforce together with fewer opportunities for socialization on the job. To use expensive technology effectively (during automation), more and more manufacturing facilities may find it necessary to schedule two or three shifts a day. In addition, the technologies used in industries such as additive manufacturing may require highly skilled designers, operators, and technicians. Improvements in technology and automation have helped the British Columbia lumber industry. Interestingly, while automation has led to job losses in some roles, British Columbia’s forest industry is facing a talent shortage due to retirements and technology advances. Thus, automation has created an environment in which there are too many employees and too few employees simultaneously, just for different segments of the industry.50 In some cases, however, mechanization is seen as a solution to labour shortages. The farming industry in the United States, as an example, is experiencing a labour shortage. As a result, companies are turning to mechanization as a solution.51  Courtesy of NeuroArm, University of Calgary. Robots are increasingly being used in places not yet seen before. The neuroArm developed at the University of Calgary is a surgical robotic system that is controlled by a surgeon working at a computer and guided by continuous magnetic resonance images. The technology employed by different firms shows considerable variation. In organizations such as a large steel factory or lumber mill, the production processes are fairly routine. In these organizations, improving the predictability of operations assumes great importance. This often requires HR managers to focus more on the predictability of employee performance (e.g., by providing explicit job descriptions and job-specific training, and by focusing on performance monitoring). In contrast, in firms with nonroutine production processes (such as advertising firms and software developers), flexible HR practices that foster creativity, innovation, and entrepreneurship may add more value. Technological force: data and analytics Related to both connectivity and automation is the growing impact of data and analytics in the workplace. Due to AI/ML and rapidly increasing computing power, companies are facing a significant shift in the role that data and analytics play in the workplace. HR professionals, in turn, must be able to support the organization’s data and analytics talent needs and also embrace the role of analytics to support the HR function. A 2017 report suggested that 71 percent of companies consider people analytics to be a high priority.52 Ultimate Software is producing an artificial intelligence based technology to assess employee engagement in real time. More effective knowledge management—the process of capturing organizational knowledge and making it available for sharing and building new knowledge—has been another outcome of digital information systems. It has given rise to potentially boundless information.53 Intranets and integrated information systems help store and access information quickly and accurately. Information management systems capture an incredible amount of digital information about an employee, giving rise to human resource data analytics.54 For instance, such systems can store what the employee learns during various training programs (or over a time period) and give evidence of performance improvement. When the annual performance interview is conducted, managers can identify the on-the-job competencies of an employee. Page 13 Even the field of HR is being shaped by big data trends. For instance, metaBUS is a technology-based research hub that is seeking to bring together and synthesize every correlation within the field of human resources over a 25-year period to enable HR practitioners to make better data- informed decisions about their practices and systems.55 Demographic Forces The demographics of the labour force describe the composition of the workforce: the education levels, the age levels, the percentage of the population participating in the workforce, and other population characteristics. While demographic changes occur slowly and can be predicted in most instances, they still exert considerable influence on organizational decisions. Each demographic change will have a different impact on the choice of human resource practices and activities, but may also have an additive effect. As a result, HR managers must consider demographic shifts both in isolation and as an integrated system. Demographic Force: Gender Balance While the figures that follow refer to gender, one must recognize from an inclusiveness lens the importance of differentiating biological gender (or sex at birth) from gender identity and gender expression. An understanding of demographic forces in sex at birth, gender identity, and gender expression will serve human resource professionals in their pursuit to create inclusive workplaces. For example, a recent job fair in Toronto focused on the transgender community.56 As of 2020, Canada’s labour force consisted of almost 19.9 million people aged 15 years or older, up from 15.8 million in 2000.57 In 2020, 47 percent of the workforce had been assigned female at birth.58 Moreover, the participation rate of biologically female in health care and professional, scientific, and technical services also continues to grow (see Figure 1-6). More women than men tend to work part-time (see Figure 1-7). FIGURE 1- 6 Distributio n of Biological Gender in the Workforce by Industry Table Summary: Summary SOURCE: Adapted from Statistics Canada, “Labour Force Characteristics by Industry, Annual,” 2020, Table: 14-10-0023-01. FIGURE 1-7 Labour Force Employed Full-Time and Part- Time by Biologica l Gender  Table Summary : Summary SOURCE: Adapted from Statistics Canada, “Labour Force Characteristics by Sex and Detailed Age Group, Annual,” Table 14-10- 0327-01. Page 14 Demographic Force: Educational Attainment A look at the educational attainment of Canadian workers presents an intriguing picture. The educational attainment of Canadians has increased dramatically over the past several years and is expected to maintain its upward trend (see Figure 1-8). FIGURE 1- 8 Number of People in the Canadian  Workforce by Their Highest Level of Educationa l Attainment Table Summary: Summary SOURCE: Adapted from Statistics Canada, “Unemployment Rate, Participation Rate and Employment Rate by Educational Attainment, Annual,” Table 14-10-0020-01. Population on y-axis in thousands. According to one study, 65 percent of jobs will require higher education.59 More specifically, 35 percent will require a degree, whereas 30 percent will require a diploma. In 2016, 54 percent of Canadians aged 25–44 years were post-secondary graduates.60 Over 28 percent of Canadians aged 25 or above hold a university degree or better (the corresponding figure in 2002 was less than 10 percent).61 Educational attainment is not equal across demographics, however. For instance, 23 percent of Indigenous peoples living off reserve aged 25–64 have a diploma and 10.9 percent have a degree. Degree attainment among Indigenous peoples living on reserve is 5.4 percent.62 While degree attainment for women who are married or living in a common-law relationship is 39 percent, the percentage is only 20.4 percent for single mothers with a degree.63 Because someone has achieved some level of higher education also does not imply that they will participate in the labour force. Approximately 80 percent of individuals with a degree and 76 percent of individuals with a certificate actively participate in the labour market.64 Consequently, HR professionals actively seeking to create diverse, equitable, and inclusive work environments may face growing challenges in the sourcing of future talent if educational attainment is used as a primary recruitment hurdle. Primary and secondary education systems play a key role in generating the new supply of skills needed by our post-industrial society. By and large, Canadian schools appear to be ready for this task. In one study, approximately 30,000 students from more than 1,000 Canadian schools were compared on their mathematical and scientific literacy with students in 31 other countries. Canadian students performed well compared to others, ranking second in reading, seventh in science, and eighth in mathematics. In a majority of provinces, students’ performance in reading, science, and mathematics placed these provinces among the top-ranked countries.65 The disturbing news, however, is that 48 percent of Canadians aged 16 or over fall below adequate levels of literacy.66 Not only do such low literacy rates reduce the overall productivity levels in our industries, but they may also be a major contributor to safety violations and accidents. Moreover, as the nature of work shifts to that of knowledge-based industries, the demand for individuals with post-secondary education will outpace the rate at which people attain a post- secondary education. About 17 percent of women and 19 percent of men drop out of school before they graduate high school.67 It is estimated that currently more than 5.2 million Canadians lack a basic school certificate or diploma.68 Page 15 Some of the more progressive employers have recognized workplace literacy as a serious issue and have taken proactive action to minimize its adverse consequences. For instance, HR professionals are encouraged to use accessible and plain language in communications.69 Faced with this disheartening prospect, the Corporate Council on Education identified a set of “employability skills” consisting of basic academic skills (e.g., communication, thinking, learning), personal management skills (e.g., positive attitudes and behaviours, ability to accept responsibility, adaptability to new challenges), and teamwork skills (e.g., ability to work with others, ability to lead a team). These skills were considered to be the foundation skills for employability in the future.70 Demographic Force: Aging Population One of the issues for human resource managers is what Maclean’s termed our old age crisis.71 In 1996, about 28 percent of the population (or almost 7.6 million Canadians) were more than 50 years old. The proportion of the population in the age group 65 and over is now expanding rapidly, reinforced by a low birth rate and longer life expectancy. In 2020, people aged 65 and over (those likely leaving the workforce) formed 18 percent of the population. By 2060, this proportion will increase to 25.7 percent. Conversely, the age category between 15 and 30 years old (those entering the workforce) will decrease from 18.9 percent in 2020 to 17.36 percent of the population over the same time frame.72 In short, human resource professionals will face an ever-increasing trend of more people leaving the workforce than entering it. This is because the average age of the Canadian population has been steadily increasing (see Figure 1-9). Like economic cycles, the impact of population aging is different depending on your location. In 2020, the provinces with the highest proportion of the labour force aged 65 and over were Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, all between 19.7 and 22.3 percent compared to 18 percent for Canada as a whole.73 At the other end of the scale, Nunavut had only 4 percent of its population over the age of 65 in 2020. FIGURE 1-9 Projected Populatio n of Canada by  Age Category Table Summary: Summary SOURCE: Adapted from Statistics Canada. “Projected Population, by Projection Scenario, Age and Sex,” as of July 1, Table 17-10-0057-01, (×1,000) Population on y-axis in thousands. The exact consequences of this trend for the human resource management function are hard to predict. An increasingly hectic scramble for jobs (especially in the traditional sectors) may be one consequence. This is because the fear of post-retirement poverty (fuelled by uncertainty about government-sponsored pension plans and the recent volatility in the stock market) may motivate employees to hold on to their current jobs. This may create unprecedented bottlenecks in professional and unionized industries. That said, older workers may face ageism in technology jobs.74 Page 16 According to Statistics Canada, the age of retirement has been on the rise since the 2000s. The average age for retirement in 2000 was 61.6, whereas the same number in 2020 was 64.5.75 Pressures for expanded retirement benefits, variable work schedules, coordination of government benefits (e.g., Canada/Quebec Pension Plan benefits) with company benefits, and retraining programs are just a few of the challenges that await HR specialists in the future. This effect is compounded by recent changes to the Old Age Security (OAS) pension program. Phased in by 2029, workers will have to wait until they are 67 to claim OAS benefits. One major challenge facing Canadian organizations is retaining older, more experienced, and skilled employees whose expertise is in demand in the labour market. The past view of people as expendable cogs who are responsible for managing their own careers has encouraged employees to leave their employers as soon as a better opportunity emerges elsewhere. To retain older workers, employers have to show respect and appreciation, facilitate career growth within the organization, offer flexible work and opportunities to telecommute, and recognize their skills and experience.76 It is important to keep in mind that, while Canadians often look to retire, there is no mandatory retirement age. An aging population affects many HR functions, especially recruitment and selection, job design, training, appraisal, and compensation and benefits administration. The availability of retirees provides an opportunity to employers who are looking for experienced part-time employees. The reduction in the supply of young workers (a staple source of recruits by many fast-food restaurants and grocery chains) may be compensated by the availability of older workers willing to work part-time. Experienced and highly motivated retirees may be a welcome source of recruits for employers and nonprofit/voluntary agencies searching for persons who can accept supervisory responsibilities. The age crisis is not limited to older generations. A declining youth population— those under age 25—entering the workforce has implications for Canada on a global scale. While Canada’s youth population is falling in relation to the population overall, developing economies, such as India, are experiencing an increase in the youth population relative to the population overall. Page 17 Demographic Force: Generational Shift In today’s workplace, leaders may interact with up to five generations—Generation Z, Generation Y (Millennials), Generation X, baby boomers, and traditionalists.77 With birth years starting in 2010, Generation Alpha is not far away from the workplace.78 This generational diversity creates an interpersonal dynamic for all leaders regardless of age in that they must be aware of the different motivators for each of the generations and be able to tailor activities to different age demographics. Generation X employees, for example, who are born between 1966 and 1980, are not averse to hard work, place a premium on work–life balance, and like to be active participants in decision making.79 They are likely to show disdain for a “command and control” culture and are likely to have more loyalty to their profession and competency building than to their employers. Some writers claim that Gen Xers think of work as a job while boomers view it as a career. Xers are unfazed by power and authority; boomers are impressed and attracted by it. Xers mistrust most business practices; boomers instituted many of them. Xers are self-reliant; boomers are team- oriented.80 Quickly becoming the dominant generations in the labour market are Generation Y and Generation Next (or Gen Z), and they are qualitatively different from Gen X: Generation Y may not respond well to traditional management practices. While it is risky to overgeneralize about any group, significant numbers of Gen Ys seek continuous learning, ongoing feedback, teamwork, up-to-date technology, security, respect, and work–life balance. Their biggest fear is boredom. Gen Z, on the other hand, will have characteristics of fiscal conservatism and greater transparency expectations.81 Generational shifts in North America are also having complex implications for HR managers that are somewhat outside their control. For example, certain industries will be facing an impending skilled trades shortage in part because of the increasing average age of the skilled trade worker and in part because of challenges attracting young people to the skilled trades in post-secondary education. Sociocultural Forces SocioCultural Force: Diversity and Social justice As cultural values change, HR departments discover new challenges. Several sociocultural forces face Canadian managers. In the section that follows, we will briefly highlight the role of diversity, equity, and inclusion in Canadian workplaces as an important consideration in the formulation of HR strategy. We recognize, however, that we cannot provide a full account of the domain in this context. Ethnicity is a significant dimension of diversity in the workplace. In 1971, Canada became the first country to declare multiculturalism as a state policy.82 By 2016, the Canadian population was made up of over 250 ethnic origins.83 The coexistence of numerous national, racial, and ethnic groups, each with its unique cultural and social background, makes Canadian society a cultural mosaic.84 Economic immigrants have often acted as engines of economic growth in Canada, while shifts in the country of origin of immigrants have added to this country’s cultural diversity and richness. © Shutterstock/Rawpixel.com Canada’s workplaces become more and more diverse as visible minorities are encouraged to maintain their unique cultural heritage. What potential conflicts can develop because of this “encouragement”? Unlike the American notion of the “melting pot,” Canada has encouraged each ethnic minority to maintain its unique cultural heritage to form part of the Canadian cultural mosaic. Canada is no longer a two-language nation; millions of Canadians have neither English nor French as their mother tongue.  Today, over 3.6 million Canadians are referred to as allophones, which literally means “other speaking.” For example, today, more Canadians speak Mandarin than Italian, and it is the most common nonofficial language.85 Page 18 For the practising manager, this cultural diversity simultaneously brings additional opportunities and challenges. Often, it is HR’s responsibility to maximize the beneficial outcomes and minimize the challenges posed by an ethnically diverse workforce. A large focus of current HR practices is to create inclusive work environments in which differences are embraced and leveraged for the betterment of the organization. As Canadian society turned the corner into the 2020s, several social justice movements drew increased attention to the role of systemic racism in the workplace. The continued inequalities articulated by social justice advocates for Indigenous, Black, and other racialized people of colour attributed to systemic bias (both unconscious and conscious) have become central to numerous equity, diversity, and inclusion initiatives in the workplace.86 Adding complexity to the importance of diverse, equitable, and inclusive workplaces human resource professionals need to consider numerous potential impacted groups including, but not limited to, sex at birth, gender and gender identity, sexual orientation, age, physical ability, language, mental wellness, language, religion, and socioeconomic status. A number of these will be discussed in Chapter 4. socioCultural Force: Ethics There is a great demand today for more ethical conduct of business. The unethical practices of several large companies— including Bre-X, Enron, and WorldCom—underscored the social costs of unethical and fraudulent business practices. Businesses, especially big corporations, have been accused of acting totally out of self-interest and furthering the interest of a few members of top management. In recent years, a variety of unethical practices have been reported, including creative accounting, insider trading, securities fraud, excessive payments made to top management not reflective of their contributions, bribery, and kickbacks. Indeed, greed and short- term orientation accompanied by creative accounting played no small role in the stock market meltdown and the acceleration of personal bankruptcies in 2008.  A global survey indicated that nearly 75 percent of respondents had felt pressure to compromise their standards at work.87 The most important ethical issues confronting Canadian firms today would seem to relate to sexual harassment, cyber espionage, avoiding conflicts of interest and maintaining honest governance, employee and client privacy, environmental protection, and security of information.88 This has resulted in many Canadian firms instituting a code of ethics or code of conduct for their employees. Over 70 percent of the responding firms in a survey89 had also instituted a program to promote ethical values and practices. Needless to say, the HR department will be a key player in this important activity. Page 19 Spotlight on ETHICS What Is a “Right” Behaviour? Ethics are moral principles that guide human behaviours and are often based on a society’s cultural values, norms, customs, and beliefs, which means that different cultures and even individuals within the same society have widely varying standards of behaviour. How are we to differentiate “right” from “wrong” or “good” from “bad”? There are no simple answers. Many adopt one of the following postures in dealing with such ambiguous situations: 1. Universalist approach: Persons who embrace this view assert that some moral standards are universally applicable. In other words, regardless of society or place, a wrong act (such as killing, stealing, or lying) is wrong. There are no exceptions to moral