Chapter 3 Environmental Influences on HRM

Environmental Scanning- systematic monitoring of trends affecting the organization to identify trends that might affect the formulation and implementation of both organizational and HR strategies.

Stages to Analyzing external environment:
*Scanning- identify early signals of changes and trends in the environment (ambiguous, incomplete and unconnected information).
*Monitoring- following some key indicators that may affect the organization (absenteeism rate due to certain illness).
*Forecasting- Project possible impact of a monitored trend on the organization.
*Assessing- attempting to describe the impact of a monitored trend on the organization and making judgment of the probability of each of several possible outcomes.

Sources of Information
Publications: HR professionals actively scan Canadian newspapers, business publications, and HR magazines, journals and newsletters. However, reading U.S. publications can also act as an early warning signal for Canadian HR professionals.
Professional Associations: Canadian HR professionals and executives belong to a number of organizations that piblish newsletters and updates on current events.
Conferences and Seminars: Most professionals keep current and even ahead of emerging trends by attending conferences, seminars, and workshops in Canada and the United States.
Professional Consultants: Organizations that have an active interest in understanding the influence of potential trends often hire consultants to research or interpret these trends for them.

Methods of Forecasting
1. Trend Analysis - method that attempts to foecast future personnel needs based on extrapolating information from historical changes in one or more organizational indices
2. Delphi Technique - forecasts and judgments of a selected group of experts are solicited and summarized in an attempt to determine the future
3. Impact Analysis - method in which past trends are analyzed by a panel of experts who then predict the probability of future events
4. Scenario Planning - creating future scenarios that differ radically from those created by extrapolation of present trends

Competitive Intelligence: is a formal approach to obtain information about your competitors. The simplist method is to study their websites for information about their strategies and plans for product launches. Information gathered through competitive intelligence methods must be subjected to two evaluation questions: Is the source reliable, and what is the likelihood of the information being correct?

COPS-Canadian Occupational Projection System provides up to ten year projection of Canadian economy and human resource needs. COPS projects expected imbalances (between supply and demand of human resources) by occupation and type of education.

Challenges in Environmental Scanning include the inability to accurately predict the future and to decide which issues are the most important to HR.

Almost everything can influence organizational and HR strategies, therefore HR strategists will monitor some factors more closely because they are closely related to HRM:
  • Economic Climate
-unemployment rate
-cost of fuel
-value of dollar
-public debt
  • Globalization
Political and Legislative Factors
  • Technological Factors
  • Demographic Factors
    • Demographics - The study of population statistics, eg. age, gender, family status. education, economic status, labour market.
    • Labour Market - Is the area from which an organization recruits its employees. It is the most demographic factor and may include: unemployment rate; geographic migration; graduation rates; local, provincial, federal, global regions.
  • Social and Cultural Factors
    • Increasing environmental awareness
    • Low fertility rates
    • More households without children that with children
    • Expanding seniors markets for goods and services, especially health-care related

Stakeholders: Groups of people who have vested interests in an organization's decisions.
  • groups tend to have interest in projects, policies, or outcomes of a decision
  • sometimes called "constituent groups" - follow actions and lobby to have thier interest satisfied
  • stakeholders affect strategy formulation.

*These groups have an influence on the organizations' strategy. They have an interest in the projects, policies or outcomes of an organization's decisions. Stakeholders will affect strategy formulation and often organizations will often adapt their strategies to accomodate stakeholders. Stakeholders have expectations on the HR function which can influence HR strategy and practices.*
Examples of stakeholder groups:
  • Board of Directors and Senior Executives: (Creators of the vision, mission, strategy and objectives of the organization) Most interested in workforce implications of strategic options such as restructuring, outsourcing, mergers and acquisitions, expanding internationally, succession planning and leadership development.
  • Senior Managers: (Responsible for the execution of the strategy and organizational performance) Most interested in HR programs and practices that affect performance: workforce planning & utilization, incentive compensation, training and development, and performance management systems.
  • Supervisors: (Responsible for management of employees and their ability to meet organizational goals) Most interested in recruitment, selection, compensation, training and development, coaching and policy development. Their needs are often based on individual employee issues.
  • Employees: (Want their requests fulfilled quickly, efficiently, confidentially, and fairly) Most interested in HR policies on compensation, training, and development, health and safety, and overall working conditions.
  • Unions: Most interested in HR practices around job security, income security, working hours and inflation protection.

Interesting demographics article. Note that Gen Y's are called Millenials in this article.

Relating to this week's discussion question, I have included an article from Harvard Business Review, May 2010 regarding how to motivate and retain your top talent.

Another link to this week's discussion question regarding retaining Gen "Y employees.

Competitive Intelligence-is a formal approach to obtain information about competitors. Two important questions:
1. Is the source reliable?
2. What is the likelihood of the information being correct?

Interesting article on Generation Y in the workplace and what is important to them,9171,1640395,00.html

Chapter 3 Discussion question 3 pg 77
How has the increasing price of fuel impacted your life, how will it impact the working patterns of employees, what policies should HR develop in anticipation of the continuous costs of commuting?
For me personally, the cost of fuel has had a huge impact on my life and on my workplace. We live in a rural area and have to commute to work. My husband works in London and drives 120 kms 6 days a week. I commute 40 kms 5 or 6 days a week. It's a small town so we have to travel to shop, visit family or for entertainment. It makes you think before you travel any distance for any non-work related activity.
I work at a racetrack. It is in a rural area. Everything we do revolves around fuel; from racing cars, to the machinery maintaining the facilty, to the staff commuting to work and the spectators and competitors attending the events.
The working patterns of employees will change. People will seek jobs closer to home. Because my organization is a seasonal business we may have a harder time attracting and retaining qualified employees that have to commute any distance.
In general, HR can adapt by offering transportation alternatives (car pooling, shuttles), increased telecommuting and schedule flexibility to attract and retain employees.

Understanding the different workforces within your company, Gen Y's needs compared to those of the baby boomers.
Gen Y's have different values to Baby Boomers. Personal growth is more important than company loyalty. Employers need to take this into account when considering positions and opportunities within the company.

Technological Factors and the impact this has on our businesses and workforce. I worked for a company that took a line of workers and teminated them all. They then installed a robot. In the end the impact on the balance of the staff was lack of engagement thus productivity went down. As well the robot more time not working then it did costing the company more then if they kept their workers.

This is an interesting article from regarding the shifting marketplace and the multigenerational workplace...enjoy!

Furthermore to the discussions on motivating the Gen Y demographic, the following article looks at how the Telus company has changed their benefit programs to adapt to the needs of their employees;