Chapter 2

The context of human

resource management

jcu.edu.au
 Objectives
• evaluate the current global and national
economic and political context and the
implications for strategic human resource
management (SHRM)

jcu.edu.au
 Introduction
• The SHRM model highlights the need to adopt a
flexible, agile and strategic perspective when dealing
with the external environments of organisations.

• In the past decade, there have been significant shifts

in the economic environment and the sociopolitical
context in which HRM and business organisations
operate. Some of these changes present new
problems and others present intensified challenges for
strategic human resources management.

jcu.edu.au
 Globalisation

• Described as `the increased pace of economic and cultural

interconnectedness between different countries’.
– p. 57 of the textbook

jcu.edu.au
 The global economic - context
• The interconnectedness of countries has deepened
considerably in the past two decades

• Australia and free trade agreements

• Investor-state dispute settlements (ISDS) provisions

• Labour migration

• Impact of the Global Financial Crisis on HRM

jcu.edu.au
 The Australian economy
• Fluctuations in response to global and domestic factors.
• Although the Australian economy has performed
comparatively well, the current contraction of the
Chinese economy, among other factors, has put
pressure on Australia to restructure its economy away
from mining.
• In 2015:
• inflation was 1.5 per cent
• unemployment was just above 6 per cent
• approximately 65.1 per cent of Australians were
reported to be either in employment or actively
looking for work.

jcu.edu.au
 Changes in industry and occupational
structures

jcu.edu.au
 Changes in the workforce and
the nature of employment

• Age distribution:
• ageing population
• declining fertility rates
• low mortality rates
• changes in workforce participation rates.

jcu.edu.au
 HR policy and planning issues

• Age discrimination
• Intergenerational conflict
• Work–life balance

jcu.edu.au
 Women and work

• ‘Male breadwinner model’

– Harvester decision of 1907

• The dual-earner family is now the norm

jcu.edu.au
 Women and work (cont.)

jcu.edu.au
 Women and work (cont.)

jcu.edu.au
 Women and work (cont.)

• Work and family

• blurred boundaries
• debates: Pocock versus Hakim versus Rapoport et al.

• Maternity and parental leave

• paid and unpaid
• legislation, bargaining and as a retention strategy.

jcu.edu.au
 Women in senior management and on
boards
• Women in management:
• the percentages: 27.4 per cent of key management
positions and just 16.4 per cent of board positions
are filled by women
• legislation
• pay inequity.

jcu.edu.au
 Rising education levels
• Australia’s society is now more educated and better-
skilled
• HR challenges

jcu.edu.au
 Changing work and employment patterns –
flexibility
• The concept of flexibility has become the driving force for
the restructuring of many organisations.
• Fair Work Act 2009 and flexible work arrangements.
• Shrinking proportion of permanent employees.
• Three main forms of flexibility: numerical, functional and
hours of working time.

jcu.edu.au
 Changing work and employment
patterns
•Longer and harder
•Non-standard working week (for
Working example, 12-hour shifts)
hours •Work–life strategies
•Part-time employment

Non- •Numerical flexibility

standard •Increased casualisation
employment

jcu.edu.au
 The political context
• Restructuring
• Significant changes to Australia’s industrial relations
system
• Neo-liberal political policies emphasise:
• individualism
• contractualism
• choice
• voluntarism.

jcu.edu.au
 Summary

• Globalisation
• Key demographic changes
• Human resource management’s rapidly changing role and
responses
• The political context is always important in Australia

jcu.edu.au