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Trends in Canadian human resource practices

Article · August 2000

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Sean A. Way James W. Thacker

Monash University (Australia) University of Windsor
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Way, S.A., & Thacker, J.W. (2000). Trends in Canadian Human Resource Practices. HR Professional, 17(4): 41-43.

TRENDS IN CANADIAN HUMAN RESOURCE PRACTICES

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,

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Way, S.A., & Thacker, J.W. (2000). Trends in Canadian Human Resource Practices. HR Professional, 17(4): 41-43.
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

Of those Using, % Used for

Overall
Method % Blue Lower Upper
Using Collar Management 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

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Way, S.A., & Thacker, J.W. (2000). Trends in Canadian Human Resource Practices. HR Professional, 17(4): 41-43.
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

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Way, S.A., & Thacker, J.W. (2000). Trends in Canadian Human Resource Practices. HR Professional, 17(4): 41-43.
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: 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.

PRECEDING ARTICLE SHOULD BE CITED AS FOLLOWS:

Way, S.A., & Thacker, J.W. (2000). Trends in Canadian Human Resource Practices. HR Professional, 17(4): 41-43.

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