4 human resources

7/21/2019 4 Human Resources

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Role of HR Management

Strategic Role of HR Management

HR management is a strategic approach that incorporates all aspects of managing theemployer-employee relationship in the workplace in order to achieve the strategic

goals of the business

Since staff costs generally make up a minimum of 60% of business costs an

increasing number of businesses are taking a strategic approach to HR management

by!o Seeing an effective workforce as a way of adding value to all areas of business

performanceo "ocusing on the use of specific HR management strategies to retain reward

and motivate effective and skilled employees to achieve the business# goals

$he government has recently tried to assist businesses in becoming more competitive

by creating a more fleible legal framework for HR management

&n the near future the ma'or strategic challenges for HR management are!

o (hallenges of developing and retaining talented staff

o &mproving leadership development

o Managing the ageing workforce

o Succession planning

&n overall terms the strategic role of HR management is to ensure that the

productivity of a business or its output per person can achieve its fullest potential

because the employees are effective and efficient in the way they go about their tasks $he overall ob'ective of HR management is to develop an environment where the

chances of employees successfully carrying out their tasks in the business are as high

as possible

$his clearly places the focus of strategic HR management on the output or results that

the business and its employees achieve

&nterdependence with other )*"s

&n smaller businesses the general manager and employees may share HR

management responsibilities as well as other responsibilities *est fit area of HR management suggests a close relationship between HR and other

)*"s so long as they are all aligned with the business# overall strategy

HR contributes to operations through planning staffing needs ac+uisition training ,

development and conflict resolution since generally most employees of a business are

part of the operations function

Same goes for marketing in which HR should hire the most competent people to take

their products. to the target market

$he relationship between HR and finance goes two ways!

o HR provide finance with staff they need

o "inance give data to HR about which areas of the business are

underperforming


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/utsourcing

*usinesses outsource )*"s for many reasons!

o $o concentrate on core business activities

o $o reduce costs

o $o improve +ualityo $o reduce production times

o $o ensure compensation if a task is inade+uately performed

fter &$ HR is the second most outsourced )*"

1isadvantages of outsourcing HR include!

o (ost savings not always achieved

o 2mployee unrest

o 3ack of compatibility with eternal provider

o 3oss of control

o Reasons for outsourcing are unclear

&f a business decides to outsource HR it needs to establish clear ob'ectives through a

well-defined contract with the outside provider4 &t should also aim to make the

transition as smooth as possible

(ontract /" service 5 employee usually eclusivity clause

(ontract "/R service 5 contractor free to work for others once contract has been

completed or even several contracts at once

*usinesses may engage contractors because!

o $hey may wish to fill a temporary position

o "ewer on-costs

o

2mployment ceases once 'ob is done 7roblems with contractors may include!

o $ime lags

o 8o business loyalty

&t is best for businesses to use domestic contractors when outsourcing HR as there are

many legal re+uirement associated with HR as well as the issue of time 9ones which

may arise if HR is outsourced offshore

/ffshore outsourcing may be a viable option for global businesses with the

advantages including!o (ost advantages due to lower labour costs and echange rate differences

o :tilising specific skills and epertise

Influences on HR Management

Stakeholders in HR Management 7rocess


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2mployees and employers are obviously the two biggest stakeholders but are also

influenced by other stakeholders such as trade unions employer associations and

governments

&t is not uncommon for management to spend over half their day on HR matters

Recent legislation is encouraging negotiation of agreements and resolution of disputeswithin the business ; emphasising the role of employers in the HR management

process

Recent surveys of employees have founds that times more common than any other failure

&n recent times employees have generally become more educated have begun to

demand more challenging work and the process of churning has become much more

common

=>% of employees want to change 'obs in net year ?@A want a greater work-life

balance

$he casuali9ation of the workforce has seen many more younger female and older

workers struggle to gain access to employment

$here is a labour shortage looming due to the ageing population

Bs were abolished by )evin Rudd and collective bargaining has been re-

emphasised reducing some of the responsibility of individual employees in the

bargaining process

2mployer associations were originally created in ?C0D in response to trade unions

$heir main role is to act on behalf of employers in collective bargaining and industrial

tribunals@courts

:nlike unions HR and &R make up only a small part of the role of employerassociations

$rade unions are organisations formed by employees in an industry trade or

occupation

ustralian system for resolution of industrial disputes given trade unions an official

bargaining position in the making of industrial agreements ie collective agreements.

Rates of union membership are rapidly declining ?0% of ?>-=Dyo employees. with

rates of union membership highest among male public sector workers

&n response to declining membership rates trade unions are increasing the range of

services they offer to include such things as discounted legal representation and

superannuation

Reasons for declining membership include!

o (ommunity attitudes favour individual approach

o 7oor image in media

o 3egislative changes reducing union power

o (ollapse of central wage-fiing

o Elobalisation

o 7rivatisation of public businesses

o 1ecline in average workplace si9e

o Shift away from secondary 'obs and growth of tertiary industries

o Erowth in casual and part-time work


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Legislati

ve

Fair WorkAct 2009

Executiv

e

Govtdepartments and

IRregulations

udicial

!isputeresolution

t"roug"courts #tri$unals

o "eminisation of workplace

$he government plays several roles in relation to HR management and &R!

o 3egislator ; our elected representatives pass laws in parliament which provide

the legal framework for &R as well as courts and tribunals for dispute

resolutiono 2mployer ; federal and state governments employ almost ?@A of the entire

workforce and are often seen as pacesetter in &R eg introduction of 22/.o Responsible economic manager ; the government will at times take action to

preserve the economy that will have an adverse effect on &R such as laying off

public sector workerso dministrator of government policies ; the federal 1epartment of 2ducation

2mployment and Borkplace Relations responsible for implementing the

legislation they enacto (orporations power in s>? of the (onstitution allows the federal government

to legislate on &R for incorporated businesses and in recent times they haveused this to reduce the powers of &R tribunals and encourage decentralised

bargainingo $he "air Bork ct =00C (th. saw states surrender their &R powers to the

federal government ecept B. with the aim of creating a national system

simplifying the process for businesses spanning multiple states

Legislation and Test Cases

(onciliation and rbitration ct ?C0D (th. ; created (ommission with power to

prevent and settle industrial disputes

Harvester case ?C0F ; established basic wage

2+ual pay case ?C6C ; e+ual pay for e+ual work


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Racial 1iscrimination ct ?CF> (th. ; no harassment or discrimination on the basis

of race allowed in workplace

Seual 1iscrimination ct ?CGD (th. ; no harassment or discrimination on the basis

of se allowed in workplace

Borkplace Relations ct ?CC6 (th. ; revised framework for enterprise bargaining Borkplace Relations mendment ct ; etremely decentralised wage negotiations ie


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o /bey lawful and reasonable commands

o :se care and skill

o ct in good faith

$en 8ational 2mployment Standards established in =0?0!

o Ma AGhrs per week reasonable overtime hours

o Right to re+uest fleible working arrangements

o nnual leave

o 7arental leave

o 7ersonal leave

o (ommunity service leave

o 3ong service leave

o 7ublic holidays

o 8otice of termination , redundancy pay

o 7rovision of "air Bork info statement

Minimum wage is reviewed annually by "B currently I?>4>? per hour as at July

=0??.

/ver the past =0 years the awards system has been simplified dramatically with the

number of different awards going from over DA00 to 'ust ?== under "air Bork ct

modern award is an industry@occupation based award covering all private sector

employees within the industry@occupation and mandating minimum wages and

conditions

2nterprise agreements are collective arrangements made at a workplace level between

employer and a group of employees about pay and working conditions

$he "air Bork ct specifies three types of enterprise agreements!

o Single enterprise agreements ; ? employer and group of employeeso Multi-enterprise agreements ; = employers and group of employees

o Ereenfields agreements ; made by new enterprise before any people covered

by agreement are employed

)ey features of enterprise agreements include!

o (over pay and working conditions

o Must be approved by "B

o Must be e+ual to or better than award

o Ma length D years

o Must contain a fleibility and variation clause

Strict rules apply to bargaining process to ensure good faith from both partiesincluding!

o Serious attempt to negotiate in timely manner

o Eenuine considerations of 33 offers

&ndividual contracts of service eist when an employer and employee individually

negotiate a contract covering pay and conditions

&ndependent contractors aka consultants@freelancers undertake work for other under

a contract for service but do not have the same legal status as an employee

/ver the past decade there has been a steady increase in casual and permanent part-

time contracts


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Borkplace@/HS legislation is in the process of being made uniform across ustralia

to improve business productivity

&n 8SB the relevant legislation is the Bork Health and Safety ct =0?? 8SB.

$he ct dictates that employers are trained and supervised in their work

ll employees must have workers# compensation insurance and are also responsiblefor taking reasonable care for the health and safety of others

&n 8SB Bork cover is responsible for BHS@/HS matters including inspections

prohibition and improvement notices and matters pertaining to workers compensation

cases

(ommon law redress can be sought where the employer or another employee can be

sought where the employer or another employee has been negligent or breached their

duty of acre leading to serious in'ury or death

Borkplace discrimination occurs when a policy or procedure disadvantages a person

or group because of a personal characteristic is irrelevant to the performance of the

work

nti-discrimination legislation has been enacted to protect against employees from

direct and indirect discrimination in recruitment selection training promotion pay

termination and access to other benefits

Responsibility of employers to prevent discrimination includes!

o (omply with legislation including!

HR2/( ct ?CG6 (th.

ffirmative ction 22/ for Bomen. ct ?CG6 (th.

Se 1iscrimination ct ?CGD (th.

Racial 1iscrimination ct ?CF> (th.

nti-1iscrimination ct ?CFF 8SB.

o udit all policies and practices to ensure they are free from direct and indirect

discrimination

1espite this legislation almost 60% of discrimination cases relate to employment

matters

$he "air Bork ct introduces a range of formal informal and internal actions that

people who suffer workplace discrimination can take

*usinesses can promote a workplace free from discrimination by!

o Briting and communicating policies to prevent discrimination and harassment

including a code of conducto Eiving all employees clear access to these policies

o $raining HR management and staff in cultural diversity issues and pays to

prevent and@or deal with discriminationo Regular evaluation of anti-discrimination policies

22/ means that all employees and prospective employees have fair and e+ual access

to 'obs benefits and services provided by an employer

22/ aims to encourage the development of fair work practices unbiased management

decisions recognition and respect for the diversity of people and a better work

environment


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nti-1iscrimination ct ?CFF 8SB. makes e+ual employment opportunity

mandatory as it states that discrimination on the basis of race gender marital status

disability age or seuality is illegal

ustralian Human Rights (ommission ct ?CG6 (th. eplicitly mandates that

employers must ensure fairness in employment opportunities for everyone 1espite most businesses having affirmative action policies in place a =00G study by

2/B found that =A% of employees believe that the sees are not treated e+ually in

the workplace and D>% agreed that workplace can be or more years

Recent improvements in parental and carers leave benefits have seen increased female

participation in the workforce

Skills shortage in near future caused by ageing workforce will re+uire upskilling of

the population and continued growth in the role of women in the workforce

Somewhat contradictory to the issue of the ageing population is the trend towards

early retirement average age 'ust >A. however many of these retirees retire gradually

and@or return to part-time work later on

Elobal pressures from less-developed nations are threatening the hard-won benefits

that comprise ustralia#s high living standards however political parties recognise

their importance and are unlikely to remove them for economic benefit


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:nions will continue to challenge businesses who try to avoid ustralia#s many

benefits for full-time employment through offshore outsourcing and@or casuali9ation

and sub-contracting

2thics and (SR

$here are many benefits to a business of having ethical and legal practices in HR

management!o 7ositive business image and subse+uent marketing opportunities

o 22/lower turnover rates and absenteeism

o "ines claims and compensation costs reduced

o &mproved business performance

o Motivated and valued staff

o (ommunity support

o 7leasant working conditions

s a business sources its staff resources 81 customers from the community it is

vital that the business is seen as being ethically and socially responsible

ll businesses should establish an ethical framework in collaboration with ma'or

stakeholders including a code of conduct and code of ethics

Recent pressure to become competitive has seen an increase in precarious

employment as businesses try to reduce their biggest cost centre labour.

/ffshore outsourcing raises ethical concerns regarding child labour and poor labour

regulation overseas

*usinesses aiming to appear socially responsible will seek accreditation from

agencies such as 2thical (lothing ustralia and "air Bear "oundation both for $("industry.

:nfair 1ismissal

:nfair dismissal is when a worker has been dismissed or threatened with dismissal

and believes that this action is


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Anal%se

internal andexternal&actors

'orporate

o$(ectives #strateigc plan

!eterminevariances$et)een

pro(ected *Rsuppl% andpro(ecteddemand

Ac+uisition orseparation

o $he dismissal wasn#t complaint with the Small *usiness "air 1ismissal (ode

if the claim relates to a small business.

HR Process

HR cycle!

o c+uisition ; identify staff needs recruitment and selection

o 1evelopment ; training development and performance management

o Maintenance ; monetary and non-monetary benefits legal responsibilities

o Separation ; voluntary and involuntary

$wo ma'or aspects of HR should be planned in all businesses!

o Short and long term HR needs through HR inventory

o Strategy needed to meet these needs eg recruitment or downsi9ing.

c+uisition

Recruitment refers to the process of locating and attracting the right +uality and

+uantity staff to apply for employment vacancies at a suitable cost

2ffective HR ac+uisition involves!

o "air non-discriminatory selection policies

o ligning ac+uisition strategies with other strategies and more importantly

business goals

1evelopment

1evelopment involves enhancing the skills of an employee through training

mentoring coaching and performance management so they develop a career with the

business


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1evelopment needs change as an employee#s career develops eg early days focused

on new +ualifications later focus on managerial skills

n effective induction program allows a new employee to successfully ad'ust to the

'ob their co-workers and the businesso

Ma'ority of employees who leave a business do so in the first A monthshighlighting the importance of an effective induction program

$he aim of training is to seek long-term change in employee skills knowledge and

behaviour in order to improve their performance

round >0% of employees who have been with their current employer for K?=

months have received some kind of education or training

)ey features of an effective training program include!

o ssess 'ob business and individual needs

o 1etermine ob'ectives of training program

o (onsider and account for internal and eternal influences

o 1etermine and implement the processo 2valuate the program in terms of HR indicators

$oday organisational structures are flatter benefiting businesses through employee

ability to develop shared ides and solutions to problems

$his has however reduced promotional opportunities and as a result HR

management must implement strategies to motivate and retain staff eg!o Job enlargement ; increasing breadth of tasks in a 'ob

o Job rotation ; moving staff from one task to another over a set time period

o Job enrichment ; increasing an employee#s responsibilities

o Job sharing

o Self-managing teamso Mentoring and coaching

Mentoring and coaching are increasingly used to motivate and develop staff with

leadership potential

$he table below highlights the key differences between coaching and mentoring

M28$/R&8E (/(H&8E

"ocus 7reparation for future roles *uilding skills and overcomingweaknesses

Role "acilitator guide and friend Specific to work function assists in

individual goal setting

"unction 7rovide advice Share skills

$ime "rame 8il Specific time-frame

Structure :nstructured More structured

*enefits Mostly individual enhanced morale Mostly to business enhanced morale

7erformance appraisal is a process of assessing the performance of an employeegenerally against a set of criteria or standards


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&t is used to identify potential areas for mentoring coaching leadership development

of performance management to enable the employee to contribute most effectively to

the business

&nvolves D main ob'ectives!

o

7rovide employees with feedback regarding their performanceo ct as a measuring stick for pay and promotion purposes

o Help businesses monitor employee selection

o &dentify training and development needs

HR management must be aware of the fine line between effective useful performance

appraisals and demotivating criticisms

Some common performance appraisal tools include!

o /bservations by supervisors.

o 2mployee-supervisor interview

o Reward for performance based on ob'ectives

o (ritical incident methodo Eraphic rating system ; eg on a scale of ? to ?0

o 2ssay evaluation

o 7erformance ranking ; eg Mc1onald#s drive-thru

o A60 degree feedback ; anonymous feedback from peers and@or supervisors

Maintenance

Maintenance focuses on the processes re+uired to retain staff and manage their

wellbeing at work

Staff wellbeing is maimised through encouraging staff participation in decision

making and giving employees a degree of control over their work lives as well as

monetary and non-monetary benefits that suit both the employer and the employee

2ffective work relationships depend heavily upon the strength of a business#

communication system and poor communication is often reflected in workplace

conflict and high staff turnover and@or absenteeism

/ffice layouts can be designed to create spaces for people to meet together for work

purposes and during breaks

2mployees who participate in decision making are generally more committed to the

business

2mployee participation strategies may include!o Membership of an employee representative on the board of directors

o 7artial ownership

o Joint consultative committees

o (ollective bargaining

o 2mployee surveys and feedback from performance interviews

&n terms of compensation the business must observe its legal obligations eg

minimum wage or award.

$he compensation system serves to encourage employees to maimise their output

and will often offer inducements such as +uality and motivation


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,eparation

-oluntar%

Resignation

Retirement

-oluntar%redundan

c%

Involuntar%

!ismissal

Involuntar%

redundanc%

de+uate compensation is vital as if staff are underpaid turnover rates will rise and

the ac+uisition process can be of significant cost to the business

(ompensation must be fair and e+uitable both hori9ontally 81 vertically

&n terms of non-monetary benefits there are many things that businesses SH/:31

offer but there also certain things that businesses legally M:S$ offer egsuperannuation annual leave

o 8ational 2mployment Standards

*usinesses must carefully consider the value of non-monetary benefits in terms of

staff retention and workplace culture as they are often epensive and some attract the

employer paid fringe benefits ta eg air travel

round ?@A of employees cite work-life balance as a ma'or consideration in future

wok choices and employers are responding to this by offering fleible working

arrangements to attract and retain talented staff

ll employers are re+uired by law to ensure that HR procedures comply with eisting

legislation

ma'or focus of maintenance is for HR management to minimise risk eposure by

implementing a range of proactive and preventative strategies

Separation

/nce an employee reaches the age at which they are entitled to receivesuperannuation payments and@or the pension they will often make the decision to

permanently leave the workforce ie to retire.

$here is no standardised retirement age in ustralia however to be eligible for the

seniors pension one must be at least 6F years old

2mployees may resign for a number of reasons including!

o "inding a better 'ob

o Banting to temporarily leave the workplace eg mother caring for children

after parental leave.

&n most occupations an employee must give a month#s notice of their intent to

retire@resign however this varies depending on the 'ob in +uestion


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Loluntary redundancy is usually offered to employees nearing retirement age and it is

entirely at the discretion of the employee as to whether they accept the offer

Redundancy packages usually include!

o 7ayment for years# service

o 7ayout of any withstanding leave

o 7ayout@rollover of superannuation

&nvoluntary redundancy only differs in that the employee does not choose it and is

usually unrelated to performance but instead to a fall in demand from customers

2ntitlements are usually the same for voluntary and involuntary redundancy

1ismissal occurs when an employer terminates an employee#s position at the

business usually due to poor performance or serious misconduct

"or a dismissal to be deemed fair it is sufficient that an allegation of criminal activity

of /HS breaches has been lodged with the appropriate authorities

&f an employee is dismissed because of poor performance they M:S$ have been

given prior warning of being at risk of dismissal and the reason for the dismissalM:S$ relate to the employee#s ability to do their 'ob

HR Strategies

HR strategies include!

o 3eadership style

o Job design

o Recruitment

o $raining and development

o 7erformance management

o Rewards

o Elobal strategies

o Resolution of workplace

disputes

o 3eadership Style

$he leadership style adopted by a manager will depend on the type of business the

personality of the manager and the circumstances re+uiring leadership

utocratic leadership is usually found in businesses with a hierarchical structural and

classical-scientific management style

n autocratic leader!

o &s rigid in decision making with little to no employee participation

o :ses top-down communication

o 2stablishes defined lines of command

1espite its seeming anti+uity there are situations in which autocratic leadership will

benefit eg if a situation re+uires an immediate response

laisse9-faire manager eercises little to no control over their employees allowing

them to sort out their own roles and perform their work with little management

intervention $his approach in general leaves employees with a severe lack of direction


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&n situations where a manager is leading a team of skilled motivated staff who have

produced ecellent work in the past eg Eoogle research teams. the laisse9-faire

leadership style may be appropriate

democratic leadership style encourages the cooperation of employees and

management in the decision making process so as to make mutually beneficialdecisions

good democratic leader realises the benefits of employee participation but also

realises that there is a level of responsibility which cannot be delegated

$wo-way communication systems are vital for successful democratic leadership

1emocratic leadership is the most common leadership style among modern managers

o

o $otal management control Lery little

management control

o utocratic 1emocratic

3aisse9-faire

o

o Job 1esign

Job design refers to the process of designing the content of a 'ob and how it will

interact with other 'obs and employees so as to motivate and retain an employee and

achieve the business# goals

Job design has been long dependent on 'ob analysis which is a detailed analysis of all

tasks responsibilities personal attributes and relationships needed in a particular

position

(ore elements of a well-designed 'ob include!

o $ask

o (hallenge

o Lariety of tasks

o 1iscretion and degree of

autonomy

o "leibility

o Resources

o /pportunity for

achievemento Social interaction

Job design involves a number of steps!

o nalyse eisting work situation

o &dentify tasks to be performed

o &dentify needs of new employees

o 1ecide how the 'ob will fit in the business

o (onsult with key stakeholders

o S3/B3 implement changes

o &nclude progress review procedureso ssess and review performance discuss with employees


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(ommon methods of 'ob design include!

o Job rotation

o Job enlargement

o Job enrichment

o Semi-autonomous work groups

o "leible work structures

Recruitment

Recruitment is the process of locating and attracting the correct +uantity and +uality

of staff to apply for employment vacancies at an appropriate cost

Recruiting a diverse workforce is important in communicating effectively with a wide

customer base and demonstrating (SR

&nternal recruitment involves filling vacancies with people from within the business

while eternal is from outside

&8$2R83 - 1L8$E2S 2N$2R83 ; 1L8$E2S

Staff motivation due to promotion

prospects

*uilds commitment , loyalty

*usiness only needs to hire at base

level

2mployees are aware of business

culture

Recognises and rewards staff foreffort and achievement

(heaper and less chance of failure

Bider applicant pool

8ew ideas perspectives and skills

Save on training by hiring applicants

with specific skills wanted

1ilution of internal politics

More diversity in employment

*uilding of brand through publicity

&8$2R83 - 1&S1L8$E2S 2N$2R83 - 1&S1L8$E2S

Bill reinforce negative business

culture

Rivalry within business for positions

1emotivation of unsuccessful

applicants

8o added skills@value to the business

Risk of unknown staff

3ost productivity during orientation

and induction

Risk of legal claims

nimosity from internal applicants

Significant effort and time needed

Most businesses use a mi of internal and eternal recruitment to maimise

opportunities for new ideas and the use of eisting business epertise

ustralia has long had a skills shortage leading employers to increasingly recruit staff

with general skills and upskilling internally to give employees the specific skills they

re+uire

$raining and 1evelopment


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&t is important for businesses to undertake etensive training to overcome the skills

mismatch in the labour market

)ey features of an effective training program include!

o ssess the needs

o 1etermine the ob'ectives

o ccount for internal@eternal influences

o 1etermine the process

o 2valuate the program

2ffective development programs ensure that talented and eperienced staff are

retained by encouraging employees to take advantage of the opportunities to develop

a career with the business ie to promote staff retention.

$he rapidly changing nature of the workforce makes long-term training and

development decisions very difficult for businesses to plan especially when many

people in university will end up in careers that don#t yet eist

7erformance Management

7erformance management is a systematic process of evaluating and managing

employee performance in order to achieve the best outcomes for the business

1evelopmental performance management focuses on using performance data to

develop the skills and abilities of employees so as to improve their degree of

effectiveness in their role

dministrative performance management focuses on the collection of data to improve

the management of HR in terms of business actions rather than the business#

employees $he table below summarises the benefits of effective performance management for

both the individual and the business!

*:S&82S *282"&$S &81&L&1:3 *282"&$S

ssists with HR planning

&ndicates effectiveness of selection

processes

&dentifies needs in terms of

training@development and legal

compliance

2valuation of rewards program

&dentification of potential leaders

*uilds best practice culture

ssess rewards and benefits linked to

performance

*uilds self-efficacy as contributions

are recognised

&dentify strengths and@or weaknesses

/pportunity for employee to provide

feedback

Recognition and reward for initiative

"osters promotion on merit

7erformance management systems are often regarded as surveillance systems by

employees and are more effectively implemented when designed collaboratively with

key stakeholders including the employees themselves

Rewards Management

$here are D main ways of classifying rewards!


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o Monetary

o 8on-monetary

o &ntrinsic

o 2trinsic

Rewards differ from benefits in that they are increasingly performance-based whereas

benefits are available to all employeeso 2g end of year bonus is reward whereas company discount is benefit

$eam-based reward systems are becoming more popular as they encourage

cooperation and greater productivity however this can lead to free-riders

)ey issues to consider in designing individual reward systems include!

o 2ffect on performance of employee

o Significance of 'ob to business as a whole

o &ndividual@personal factors eg bargaining power group incentives

Reward system should aim to!

o Motivate staff

o *e e+uitable

o *e clearly communicated

o *e defensible

o *e relevant

o *e cost effective

o lign itself with business

strategy@goalso *e simple to understand

o *e consistently applied to

all employees


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o Elobal Strategies

Strong factors such as the high cost and skill shortage of ustralian labour are

pushing firms to operate on a global level for HR-related reasons

&n general terms it is much more common for firms to use lower-skilled labour in

those nations with lower labour costs as there is a perception of lower +uality in the

performance of highly-skilled labour offshore

business planning to epand overseas needs to consider whether it wishes to use a

polycentric ethnocentric or geocentric staffing approach!o 7olycentric ; parent nation remains responsible for HR management host

nation supply staffo Eeocentric ; uses staff with most appropriate skillset and building a pool of

management with global eperienceo 2thnocentric ; epand into overseas markets using staff from parent country

de+uate consideration must be given to training staff in +uality standards and

performance management if the business is seeking to operate overseas using a lower

cost structure

(ultural awareness and language training from all staff need to be implemented to

foster effective communication and positive relationships between employees

o Borkplace 1isputes

Borkplace disputes are conflicts within the business that affect the business#

operations

1isputes can be either between employees. and their employer or betweenemployees themselves

$he four main causes of workplace disputes are related to!

o Borking conditions

o 7ay rates

o Managerial policies@decisions

o Social@political factors

(overt workplace disputes are only recognised by the business itself and are

characterised by!o High rates of absenteeism

o 7oor productivity and performanceo High staff turnover ratios

(onversely overt workplace disputes involve some actions by the parties that clearly

demonstrates the disagreement such as!o Strikes ; particularly common in the public sector involves employees

withdrawing their labour until their demands or a compromise are meto 7icketing ; protests that take place outside the workplace usually during a

strike preventing the delivery of materials into the workplace as well as the

entry of non-union labouro 3ockouts ; occurs when employers close the entrance to the workplace and

refuse admission to the workers


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o Borking to rule ; employees only follow the specific eact instructions they

are issued eg teachers cease marking outside school hours

ll industrial disputes are made to enforce@resist a demand or epress a grievance and

are 8/$ related to any legal claim such as discrimination or bullying

$he key stakeholders involved in the resolution of industrial disputes are!o 2mployees

o 2mployers

o $rade unions

o 2mployer associations

o (ourts and industrial tribunals

Eovernment policy heavily influences dispute resolution as 3iberal governments tend

to take more of a free market approach whereas 3abor policies reflect the interests of

their political origins ; the trade unions

(ommon to both parties is the idea of dispute resolution at the workplace level as this

is more cost-effective in terms of money and time for all stakeholders however thecurrent 3abor government has focused on collective and enterprise bargaining rather

than individual bargaining

key re+uirement before any party can take protected industrial action ie industrial

action for which they cannot be fired. is that there is evidence that both parties have

attempted to bargain in good faith

Bhen an industrial dispute arises there are a number of ways in which it can be

resolved!o 8egotiation

o Mediation

o Erievance procedures

o &nvolvement of courts and tribunals

(onciliation

rbitration

(ommon law action

8egotiation is a method of dispute resolution whereby discussions between the parties

result in a compromise and an informal or formal agreement

ma'ority of industrial disputes are resolved through negotiation many of which the

public is never aware of because of the internal nature of negotiations

Mediation is the confidential discussion of issues in a non-threatening environment inthe presence of a neutral third party

$he third party can be agreed on by both parties or more often a representative from a

government agency such as "B

Mediation is growing in popularity as it provides a similar procedure to the

involvement to courts and tribunals without the ecessive cost and formality while

also maintaining confidentiality to protect the reputation of businesses and trade

unions

Erievance procedures are formal procedures usually contained within an award or

enterprise agreement that establish agreed processes for dispute resolution within the

workplace


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$hey are useful in reducing the risk of a minor disagreement progressing into a very

serious industrial dispute

$ypical steps in a grievance procedure are as follows!

o 2mployee and@or representative present complaint to supervisor

o Middle management handle complaint in a meeting with the concerned

employees. and@or their representatives.o $op management and@or specialist grievance committee handle complaint in a

meeting with the concerned employees. and@or their representatives.o Matter is referred to eternal mediation conciliation or arbitration

dispute may be resolved at any stage of the process however if it is not resolved it

progresses to the net stage of the process

Bhen a dispute has not been resolved through negotiation or mediation it may be

referred to "B who will usually appoint a conciliation member to hear both sides of

the dispute

(onciliation is a process whereby a third party is involved in helping two other partiesreach an agreement

&t differs from mediation in that it is much more formal and the third party has a

degree of epertise in the field of concern compared to a mediator

&f conciliation fails the final step in the dispute resolution is that of arbitration

rbitration is a dispute resolution process whereby a third party hears both sides of

the dispute and makes a legally binding decision to resolve the dispute

"B is the main government authority responsible for the conciliation and arbitration

of industrial disputes in ustralia

re+uirement of "B before they become involved in an industrial dispute is that the

business had and attempted to use its grievance procedures before referring the matter

to "B

(ommon law action is open to any party involved in an industrial dispute who may

make direct claims for damages caused by another party#s actions during the dispute

or for breach of contract resulting from such action

&f a party engages in industrial action such as picketing or a lockout during a non-

protected period the affected parties are able to apply to the Supreme (ourt or

"ederal (ourt for an in'unction to prevent unlawful interference with the business

(ommon law action comes at a significant monetary cost and as such is usually

viewed as a


22/26

i

n

a

n

ci

a

l

all parties who own an

agreement leading to

higher productivity fewer

disputes and lower

turnover@absenteeism rates (ost-cutting measures may

cause disputes but can also

be vital to the survival and

competitiveness of the

business

1amaged reputation

(losure and@or relocation

"amilies suffer significant

wage loss

High cost of legalrepresentation and fines to

businesses

o 7

e

r

s

o

n

a

l

&ssues of interest to

employees finally gain

employer attention

*etter work relationships

resulting from better

understanding of work

problems

Higher employee

motivation and

involvement

&ntensification of work due

to workplace restructuring

1ecreased 'ob security and

moral

&ncreased rates of

absenteeism accidents and

product defects

1egradation of working

relationships

o S

o

c

ia

l

Jobs can be saved in some

cases

Multiskilling of labour

through new trainingopportunities and career

paths

(ommunity bitterness

towards unions and@or

businesses

(ommunities disrupted byactions - O8$S dispute

6G000 passengers daily

o 7

o

l

i

t

i

c

a

l

Reform of workplace

conflict policies

7ublic attention to need for

worker protection

&mproved economic

performance as a result of

economic restructuring

"re+uent disruptive

conflict negatively impacts

on support for government

particularly near an

election

3oss of national income in

etended disputes can

affect economic growth

o E

l

o

b

a

l

Restructuring and changed

work practices often

increase international

competitiveness

3oss of eport income

during dispute may often

become a permanent loss

of eport market

o


23/26

oEffectiveness of HR Management

Bith managers reporting that labour costs account for over 60% of total costs and


24/26

o (reative perks such as health and training

o "leible and family-friendly practices

o High levels of training and mentoring

o (ulture of trust through transparency impartiality and e+uality

o (ollaboration in decision making at all levels

o "un atmosphere

$he aim of benchmarking is to compare the effectiveness of HR within the business to

other businesses or other internal divisions and then use this comparison as the basis

to initiate changes which aim to foster improvement in the area

$here are four main ways in which businesses can undertake benchmarking!

o &nformal benchmarking ; informal discussions with colleagues in other

businesses online research and attending conferenceso 7erformance benchmarking ; comparing business performance levels with

other businesseso

*est practice benchmarking ; using a structured process to compareperformance levels in specific areas with best practice businesses with the aim

of gaining skills and knowledge which can be used to modify organisational

processeso *alanced scorecard benchmarking ; used for measuring whether a business#

performance is meeting the ob'ectives established in the strategic plan

Most businesses do not rely solely on +uantitative data such as sales per employee

but also consider +ualitative information such as staff and employee feedback

HR audit can be used to systematically analyse and evaluate HR activities in a

number of ways through!o n outside consultant conducting research and identifying problems and

suggesting solutionso Management evaluating )7&s

o nalysis of legal compliance to determine any variance from legal

re+uirements

Ouantitative measures that can be used to benchmark the effectiveness of HR

management include!o Lariances in labour budgets

o $ime and money lost on in'uries and sickness

o (omparison of performance appraisals with targets

o 7ercentage of goals achieved

o 3evels of labour turnover

Oualitative evaluation involves detailed feedback and research on key issues

allowing 'udgements to be made about changes in behaviour or service +uality

Sources of such feedback may include!

o Middle management

o Surveys and focus groups of employees and customers

o 2it interviews

*usinesses must also consider domestic and global trends in HR management when

planning strategies for the improvement of HR management


25/26

Staff turnover refers to both the voluntary and involuntary separation of employees

from a business and is often shown as a % of total staff numbers

$he average staff turnover rate is around ?= to ?>% and fluctuates in accordance with

the economic cycle

&ndustries such as hospitality and hotels eperiencing etremely high turnover ratiosup to C0% per annum. highlighting the importance of benchmarking their turnover

against other businesses in their industry

"actors contributing to staff turnover can be categorised as pull factors eternal

factors attracting the employees. or push factors internal factors repelling employees.

$he costs of high labour turnover are +uite high including such things as redundancy

payouts and hiring@inducting@training new staff

&n addition to these financial costs there is also a loss of productivity service +uality

corporate skills and knowledge associated with high labour turnover

Some level of turnover is healthy as it brings new ideas which can stimulate

innovation however a ma'or increase in labour turnover is a warning sign of a larger

problem

bsenteeism is measured as the average rate of employee absences on an average

day without sick leave or other prior approval

High levels of absenteeism and@or lateness may indicate employee dissatisfaction

and@or workplace conflict

$he financial cost of absenteeism is somewhat obvious in that the firm will be

re+uired to employee more staff than it actually re+uires to cope with the high

absenteeism and this financial cost is amplified through the loss of productivity and

sales revenue associated with the disruption to work caused by high levels ofabsenteeism

round >4A% of ustralian employees eperience a work-related in'ury or illness

annually

lmost D00 claims for serious@permanent in'ury or fatality are made per day in

ustralia

2mployees in primary and secondary 'obs are much more likely to eperience

workplace accidents than professionals due to the physical nature of the work being

performed

/verall the direct and indirect costs associated with workplace accidents in ustralia

totals to approimately I60 billion each year

ll businesses must adopt a systematic legally compliant approach to managing HS

*est practice businesses will!

o Have regular safety audits and comprehensive safety programs

o *uild a culture of safety and effectively communicate about health and safety

o 7rovide careful induction and regular training for staff to ensure awareness of

health and safety ha9ardso (onsult employees and /HS personnel on the health and safety implications

of proposed changes to the business

$here are many often costly overt and covert manifestations of workplace disputesthan HR management must monitor and evaluate


26/26

"orms of industrial disputes that are not officially recorded include!

o Bork bans

o Bork to rule

o Eo slow

o Sabotage

HR management must attempt to keep any industrial disputes discreet as public

knowledge may be harmful to the business# reputation

(areful investigation should indicate whether a particular dispute relates to the

policies and processes of the business or to specific individuals who may re+uire

further training or development

/ngoing disputes are likely to be reflected in higher levels of staff turnover industrial

disputes and staff absenteeism

(onsultation with employees when considering changes to work practices is vital to

the avoidance of serious industrial disputes as managerial policy is one of the main

causes of industrial disputes in ustralia 1isputes are more common in larger businesses as relationships and communication

are less personal and there is a greater scope for distrust and misunderstanding

/ver two thirds of ustralian workers have never taken industrial action however

covert manifestations are much more common

2mployee satisfaction is a key factor in employee commitment 'ob performance and

staff turnover and is most often measured through employee surveys

2mployee feedback must be analysed confidentially and used by management to

track communicate and act upon any issues that are presented

7ay is rarely a significant factor in determining worker satisfaction unless there are

significant disparities in rates of pay within the business

2mployees who have good relationships with co-workers en'oy their work activities

receive relevant training and gain opportunities to grow are more likely to be satisfied

and remain with the business

2ffective leadership and +uality management are critical factors in employee

satisfaction and retention particularly with the widespread view that management

4 human resources

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