Published in Canadian HR professional, 2000, Aug/Sept.

Trends in Canadaian Human Resource Practices

Sean Way & James W. Thacker

Both academics and practitioners have recognised Human Resource Management (HRM) as a means of increasing organisational effectiveness, resulting in a competitive advantage. This view referred to as the resource based view has been based mostly upon data from the United States (US). Research by Thacker and Cattaneo, and later by Way and Thacker, indicate that the use of cutting edge Human Resource Practice (HRP) by Canadian Organizations tends to lag behind their US counter parts. There is quite a large quantity of US based data on HR trends but data specific to Canada is much scarcer. Therefore, the purpose of the paper is to report some current HRP and HR trends of Canadian organizations.

Reporting Relationship of Human Resource Manager

The reporting relationship of an organization’s top HR executive is an indication of the importance of the HR function to the organization. As the HR function gains importance in the organization it would be expected that the top HR executive would report to higher-ranking organization officers. The data suggests that, in 63.3 percent of the organizations, the top HR executive reports to: the Chief Executive, Operating Officer or to a Vice President with only HR and Industrial Relations responsibility. This percentage has remained the same since 1987.

Discipline and Education Level of the most Academically Educated Person in HR

As the HR function is seen as an important component to creating a competitive advantage, more sophisticated HR practices will be utilised. To administer these more sophisticated HR practices, it would be expected that, HR professionals with management related and higher levels of academic achievement would be needed in the HR function. Over a quarter (26.4%) of the organizations sampled reported that the most academically educated person in HR had a masters degree or better, and over two thirds of those without a masters degree had a bachelors degree or better (69.6%). Only three-percent reported not having a University degree. This is an increase from 1987 where 22 percent reported having no university degree. Sixty-two percent of the organizations sampled indicated that the most academically educated individuals “education discipline” was related to the HRM field, which is about the same as 1987.

Performance Appraisal Methods

Research has indicated that the performance appraisal can enable an organization to increase organizational performance. This is especially true when the performance appraisal is perceived as fair by employees being appraised and when the performance appraisal is linked to rewards. Performance appraisals are more likely to be perceived as fair if they are valid and reliable. Crownshaw has dichotomized performance appraisals into two categories (1) technically complex and (2) technically simple. Technically complex performance appraisals are more difficult to develop but are more reliable and valid than technically simple performance appraisals. Less than one-third (33.2%) of the respondents indicated using a technically complex methods of performance appraisal (BARS, MSS, FCS, and BDS).

Table One presents the usage of the different performance appraisal methods. The most commonly used performance appraisal methods were Work Planning and Review (WP&R) (51.3%), and Management by Objectives (MBO) (49.2%). In 1987 MBO was also very popular with 46% of respondents reporting its use. Use of WP&R however has increased substantially as it was reported used in only 4% of organizations in 1987 and 1992. Further examination of the data indicates that most organizations are using a combination of MBO and WP&R for middle management. This suggests an equal focus on both specific objectives (MBO) and the process used in obtaining objectives (WP&R). Two and a half percent of respondents in 1987, 3.1% in 1992 and 22% in this study reported using BARS, one of the more psychometrically sound performance appraisal methods.

The 360-degree feedback process is a useful performance appraisal method. It provides the employee being appraised with information on how they are perceived from a number of different people: supervisor, peers, subordinates, self, and sometimes customers. This process allows the employee to compare views of those they work with and their own beliefs. Ten percent of respondents indicated they used a 360-degree feedback process with input from peers, supervisor, subordinate, and self. Five percent of respondents indicated use of the 360-degree feedback process as above, but adding information from the customer.

Table One: Usage of Performance Appraisal Techniques

Method / Overall
%
Using / Of those using, % used for
Blue
Collar / Lower Management / Upper Management
Graphic Rating Scales / 10.6 / 65.0 / 75.0 / 75.0
Weighted Checklist / 10.2 / 60.0 / 35.0 / 30.0
Seminar / 3.8 / 57.1 / 85.7 / 85.7
Critical Incidents / 16.2 / 73.3 / 70.0 / 56.7
Behavioral Anchored Rating Scales / 21.7 / 55.0 / 85.0 / 70.0
Mixed Standard Scales / 3.8 / 85.7 / 85.7 / 42.9
Forced-choice Scales / 5.5 / 30.0 / 70.0 / 60.0
Behavioral Discrimination Scales / 2.2 / 75.0 / 50.0 / 25.0
Performance Distribution Assessment / 10.9 / 35.0 / 75.0 / 75.0
Paired Comparison / 6.0 / 45.5 / 90.9 / 72.8
Rank Ordering / 5.5 / 30.0 / 70.0 / 80.0
Management by Objectives / 49.2 / 20.4 / 76.3 / 94.6
Work Planning & Review / 51.3 / 45.4 / 77.3 / 72.2

Table two indicates the reasons for using performance appraisals. Although, performance appraisals are often linked to rewards and pay for the management levels. performance appraisals is most often used for professional development with all levels of employees. From Table 2 it is apparent that performance appraisals are used for both developmental and administrative (promotion, transfer, and pay increase) purposes. Any particular performance appraisal method is usually designed for effective use in one of these two areas, when discussing the appraisal supervisors should not discuss both developmental and administrative issues at the same time. As much time, as possible, should separate these two issues, as the focus is entirely different.

Table Two: Reasons for use of Performance

Level of Employee / Administrative / Development
Pay Increase
% / Promotion/Transfer
% / Professional Development
%
Blue Collar / 9.7 / 26.5 / 51.2
Lower Management / 68.7 / 62.7 / 51.2
Upper Management / 60.8 / 47.6 / 74.3

Regarding the issue of equity in the workplace, in the past twenty years many provinces have developed some type of equity legislation. With this legislation and the potential implications on selection and promotion, the type of employment equity practices implemented can be of key importance to organizations. Here we examined employment equity regarding females and visible minorities respectively. For females, Table 3A suggest that this is not perceived as an issue for management positions in 42.3% of organizations, and regarding non management positions employment equity was reported as not an issue in 46.8% of the responding organizations. In 1987 the percentages were substantially the same (40% and 46% respectively). Fast tracking and quota systems for females are presently used in 11.1% of organizations for management positions and 6.3% for non-management positions. This is slightly higher then reported in 1987 (6.6% and 3.8% respectively). As Table 3B indicates 36% of respondents encourage minorities to apply for management positions, this is approximately a 4% drop from 1992. Thirty nine percent of organizations encouraged minorities to apply for non-management positions, this is approximately a five percent drop since 1992. More respondents in this study than in the previous two studies utilized the use of fast tracking and quota systems for minorities in management positions. However, there has been a decrease in fast tracking and quota systems of minorities in non-management positions from 1992 to this most recent study.

Table 3A: Procedures Used with Women

Procedure / Management Positions
% / Non Traditional Positions
%
Quota System / 1.6 / 0.5
Fast Track / 9.5 / 5.8
Encourage / 46.6 / 41.1
Not an Issue / 42.3 / 46.8
Other / 0 / 5.8

Table 3B: Procedures used with Minority Group Members

Procedure / Management Positions
% / Non Management Positions
%
Quota System / 1.6 / 1.1
Fast Track / 4.2 / 2.6
Encourage / 35.8 / 39.2
Not an Issue / 52.1 / 50.2
Other / 6.3 / 6.9

In this present study we were interested in obtaining information that had not been included in the earlier two studies by Thacker and Cattaneo. We wished to gauge how popular some of the newer concepts and/or practices are.

About seventy-one (71.3) percent of the respondents have some form of formal training program in place, and training is available at all levels of employees by a high percentage of these organizations.

Table Four: Formalized Training

Level of Employee / %
Upper Management / 88.7
Middle Management / 93.6
Lower Management / 94.3
White Collar Professional / 90.1
White Collar Non-Professional / 90.8
Blue Collar Worker / 86.5

Approximately seventy-seven percent (76.8) of respondents stated that their organization used the team approach. Middle and Upper management utilized the team concept the most, Blue Collar the least (refer to Table Five). Of those organizations that indicated they utilized team concept only 18.9% had Blue-Collar self-directed teams.

Table Five: Organizations reporting use of the Team Approach

Level of Employee / %
Upper Management / 86.5
Middle Management / 88.7
Lower Management / 84.2
White Collar Professional / 80.5
White Collar Non-Professional / 78.9
Blue Collar Worker / 72.9

The increased use of the contingent workforce has gained a great deal of attention in the media recently. Over three-quarters (77.3%) of respondent reported using contract employees. White-collar workers were most affected by this type of employment (81.5%), and Blue-collar the least (37.8%). Though many respondents reported using contract and part-time employees, in a majority of these organizations these workers made up less than 5% of the organisations workforce (refer to Table Six).

Table Six: Percentage of Organizations with Less Than 5% Contingent Workforce

Level of Employee / %
Upper Management / 72.3
White Collar / 66.2
Blue Collar Worker / 63.2

*NOTE: Table Six refers to those respondents who answered yes, to the use of contract or part-time employees, in which less than five percent of workforce is made up of contract or part-time employees.

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