introduction to human resource...
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Topic 1: Introduction to human resource management
1 © NSW DET 2008
Introduction to human resource management
Reading
Topic 1: Introduction to human resource management
2 © NSW DET 2008
Contents
Introduction 5
What is management? 6
Planning 6
Organising 6
Leading 7
Controlling 7
What is human resource management? 8
HR management activities 9
Workforce planning and design 10
Staffing 10
Remuneration and benefits 10
HR administration 11
Employee relations 11
Organisational development 11
Employee support services 12
Benefits of effective HR service provision 13
HR service providers 15
Line managers 15
Centralised HR function 16
Decentralised HR function 17
Contract specialists 17
Strategic HR management 18
Levels of HR management 18
Growing need for strategic HR management 19
HR management and industrial relations 22
Australia’s industrial/employee relations framework 22
Stages in the development of Australian industrial/employee relations 23
Parties in the Australian industrial/employee relations system 25
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The bargaining framework in Australia 26
What legislation impacts on industrial/employee relations? 26
Types of employment relationships 27
Occupational Health and Safety 29
OHS legislation 29
HRM and OHS management 30
Workers’ compensation and rehabilitation 31
HR information systems 33
HR contingency planning 35
Labour turnover 36
Costs of labour turnover 36
Measuring labour turnover 37
Performance management systems 39
What is performance management? 39
Performance management goals 41
Performance management process 42
The performance appraisal process 44
Training and development 47
Implementing training programs 48
Implementing development programs 49
Appendix 1: The development of human resource management 51
The welfare and administration stage (1900 to 1940s) 51
The welfare and administration, staffing and training stage (1940s to mid-1970s) 52
Human resource management (mid 1970s to 1990s) 52
Human resource management in the new millennium 53
Appendix 2: Co-ordinating workers’ compensation and rehabilitation claims 54
The history of workers’ compensation and injury management in NSW 55
The employer’s legal responsibilities and role when a worker is injured 56
Reporting procedures and injury recording documentation 57
Common law and duty of care 60
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The workers’ compensation claims process 61
Injury management 63
Return to work programs 68
Dispute resolution 73
Prevention and workers’ compensation 75
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Introduction
The essential function of an organisation‘s Human Resources department is
to support the business objectives of the organisation by ensuring the
availability of appropriately skilled workers to meet the current and future
demands of the business. It does this through the following key functional
areas:
Workforce planning and design
Recruitment, selection and induction
Industrial/employee relations
Learning and development
Remuneration, recognition and reward
Occupational health and safety and injury management
Performance management
Human resource information systems and administration
Strategy and policy development
The reading notes that follow will introduce you to key HR functions.
If you are new to HR, or hoping to move into HR in the future, this
information will give you some background to what functions comprise HR,
their purpose and how they operate.
If you have had some experience working in the HR field, these may already
be familiar to you so take the opportunity to revisit and reflect as they
provide a context for the rest of the elements. They will also possibly
provide additional information and/or alternative approaches to what you
may be used to.
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What is management?
All managers – human
resource managers
included – need to be
competent in the four
essential management
functions:
planning
organising
leading
controlling.
As you‘ll see, human resources managers carry out these basic functions in
a particular and specialised way.
They also need to carry out specific HR management functions. These
functions relate to the key role they play in managing employee relations
and include: acquiring, developing, maintaining and terminating staff.
Planning Planning is the process of establishing objectives and deciding the necessary
steps to achieve those objectives. It asks: What needs to be done? What
results are expected? What is the timeframe for achievement? Who is
involved?
Human resources management involves planning for activities such as:
recruitment, training, career planning, succession and replacement.
Organising Once plans have been established, it is a manager‘s job to identify and
allocate resources so that goals can be achieved. This means determining
how the tasks are to be grouped, how they are to be completed and who is to
do the tasks and make the decisions. Work and adequate resources need to
be allocated, and people aligned in their efforts so that goals can be
achieved.
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HR practitioners demonstrate organising skills in many ways—for example,
when they design jobs that will enable the organisation to achieve its goals
and when they are involved in job analysis and in writing job descriptions.
Leading Managers also need to provide direction and guidance. As the strategic
value of human resources management gains recognition, HR managers are
increasingly becoming key members of senior management teams reporting
directly to the CEO. This recognises the contribution HR management can
make to the long-term planning and allocation of resources to ensure
organisational success. Many line managers and supervisors only have
expertise in their own specialist field e.g. production, sales, finance etc. In
many situations it is therefore incumbent upon the HR manager to take a
leadership role to broaden the decision making perspective by
demonstrating the HR management implications and potential contributions.
In addition to this organisational leadership role, human resources managers
are often required to lead sizeable HR departments, comprising both
generalist and specialist HR practitioners.
Controlling Control is the management function that ensures the organisation is kept on
track. It occurs after: goals have been set; plans put in place; decisions
made about when, who, and how the work will be done; and people trained
to do the tasks. Managers need to monitor progress towards goals, compare
actual performance against targets, and adjust or correct these when
necessary.
Establishing performance standards and measuring progress against goals is
an example of the control function. Deviations from the expected standards
may be corrected through training and development interventions. HR
managers are usually responsible for the design, implementation and
administration of appraisal and training/development systems.
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What is human resource management?
―The term Human Resource Management became popular in the 1980‘s and
signified a move away from Personnel Management. This move denoted
not only a name change, but a move away from an emphasis on operational
and functional activities, such as induction and training, to a strategic focus
where HR plans, objectives and strategies are aligned to business plans.‖
Dessler, Human Resource Management, 2004, p 11
Human Resource
Management (HRM) is
concerned with the ‗people‘
in an organisation. Every
organisation is made up of
people and relies on the
service, skills and motivation
of employees to achieve high
levels of performance. This
point recognises that whilst
employees may have the
required skills to perform
their job role, they may not fully contribute these unless their own needs are
recognised and adequately addressed.
Employees‘ development and commitment to the organisation, fostered
through positive employer-employee relationships, are essential to achieving
the organisation‘s strategic and operational goals. Ultimately, an effective
HRM seeks to create an environment of competitive advantage for an
organisation whilst meeting stakeholder needs.
The basic HRM functions include:
planning how many employees the organisation needs
deciding what type of skills the organisation needs
hiring appropriately skilled people
assessing, motivating and rewarding employee performance
organising and managing the human resource activities and
relationships.
The human resources manager and the functional and/or line managers in an
organisation are responsible for influencing and implementing pro-active
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and integrated practices to maximise the activities and effectiveness of
people.
HRM in Australia emerged in the mid to late 1970s in response to
organisational pressures to develop employees‘ skills and knowledge to
meet an ever-increasing competitive marketplace, both domestic and
international.
Previously, Personnel Management administered personnel activities such
as hiring and firing, handling labour negotiations, determining proper
compensation and administering benefits. However, the regulatory
landscape led to an increased awareness of the impact that people have on
organisational performance and the need to fully integrate personnel
planning into the overall organisational planning system.
More information…
For more historical perspective read Appendix 1: The development of
human resource management.
HR management activities In order to fulfil their managerial functions, both general and specialised,
the HR manager needs to be involved in many diverse activities.
We can classify these diverse HR management activities under seven main
areas or domains:
workforce planning and design
staffing
remuneration and benefits
HR administration
organisational development
employee relations
employee support services.
Though the specific terms used for classifying the main areas of HR may
vary, the structure of HR departments in many organisations reflects these
main HR activity groupings.
If there is only one dedicated HR professional, as in many small
organisations, this person may be involved in all of these activities to some
degree.
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Workforce planning and design Workforce design and planning involves the definition and arrangement of
work tasks based on the interaction of people, technology, and the tasks to
be performed.
This requires HR professionals to engage in activities such as:
HR planning
job analysis
organisational restructuring
job design
design and operation of information systems.
Staffing Staffing provides the organisation with qualified staff to meet the needs of
line management, and supports their efforts to achieve organisational
objectives.
It involves the flow of people into, through and out of the organisation.
Among the activities relevant to staffing are:
job analysis
recruitment and selection
orientation (induction) of new employees
promotion
outplacement
termination—in keeping with relevant legislation.
Remuneration and benefits This area of HR management assists the organisation to attract and retain the
employees it requires.
It involves any type of reward or benefit that may be available to employees,
such as:
job analysis
job evaluation
remuneration systems design
merit payments
profit sharing
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leave entitlements.
HR administration This area of HR has a significant impact on the satisfaction of employees on
a weekly or fortnightly basis, and is concerned mainly with:
job analysis
processing and payment of wages and salaries
calculation and notification of leave entitlements
personnel records, reports, and information systems.
Employee relations Employee relations experts assist line managers in optimising the
achievement of organisational objectives through a consistent and cohesive
approach to the following activities:
job analysis
award interpretation
collective bargaining
workplace agreements
dispute or complaint resolution
disciplinary action.
The activities may also include the many compliance requirements facing
organisations, such as:
occupational health and safety (OHS)
equal employment opportunity (EEO).
Organisational development This area of HR management is concerned with maintaining and improving
employee capability based on organisational and individual needs.
Activities or programs may include:
job analysis
training for managerial and non-managerial staff
career planning and development
succession planning
employee opinion and attitude surveys
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performance appraisal systems
assessment centres.
Employee support services HR practitioners in this area are involved in:
job analysis
employee communication and information services
employee assistance and counselling programs
child care services
emergency assistance
medical services
leisure activities.
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Benefits of effective HR service provision
Key point
It is important to recognise the contribution that good HR
management makes to an organisation, both in terms of employee
relations as well as organisational strategy.
The benefits of effective HR service delivery may be direct or indirect.
Direct benefits Indirect benefits
increased employee
satisfaction; higher morale
levels
increased retention of
employees; decreased
employee attrition rates
decreased absenteeism
multi-skilling of employees
fewer workplace conflicts
and disputes
increased productivity
fewer workplace accidents
and injuries
increased customer service
skills of employees
enhanced public image of the
organisation
skilled managers
clearly identified and
developed future leaders
lower labour costs
lower insurance premiums
higher levels of customer
satisfaction, greater return
rate of customers, and higher
spend rates
lower direct marketing and
advertising costs
attraction of high calibre job
candidates
increased profitability
increased return to
shareholders
potential increase in research
and development spending to
facilitate business expansion
increased competitive
advantage
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The extent to which HR can positively impact on business performance
depends on many factors, including the degree to which HR professionals
are willing and able to think and act strategically as well as operationally
and functionally. The attitudes of senior managers towards HR
management and their perceptions of the contributions that HR management
can make to overall business success are also very important.
More information…
If you would like to read more about the benefits of HR management, refer
to either of the textbooks below or those on the recommended texts list:
Banister, R & J Harding (2004) Human Resource Management: An
Introduction to the Australian Workplace, {Pearson Education
Australia Ltd, Frenchs Forest NSW
Seward, J & T Dein (2005) Australian Human Resource
Management, McGraw-Hill, Sydney.
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HR service providers
Key point
The effective provision of HR services depends primarily on the
skills and knowledge of HR practitioners, and the ways in which
HR service delivery is structured.
HR service delivery may be structured to include HR service providers who
are line managers, HR specialists and HR generalists who are either internal
or external providers—or a combination of all of these. The options
available for HR structures and the correct choice within each organisation
will be based on the strategies, structures, culture, size and politics of the
particular organisation.
The people who are primarily responsible for HR service provision differ
from organisation to organisation. Examples are:
Responsibility lies mostly with the line managers—either acting
alone or with centralised HR support.
The structure is a centralised one and consists of generalists or
specialists.
The structure is a decentralised one—consisting of generalists or
specialists.
The structure consists of centralised specialists and decentralised
day-to-day activities.
Responsibility lies mostly with contract specialists.
Line managers
As sole providers of HR services
Before the emergence of HR professionals, line managers assumed most of
the responsibility for functional and operational HR activities—activities
such as recruitment, selection, keeping of personnel records, technical
training, etc. As organisations and the management of people within them
become more complex, there is a need for a HRM professional to coordinate
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such activities, and for specialists to provide a strategic approach to HR
management.
Many line managers are already stretched undertaking their own line
responsibilities and often see HR management responsibilities as interfering
with their ability to provide their expertise in their own specialist field. This
often results in them not giving the necessary attention to their HR
management responsibilities. The result can be inappropriate employment,
underperformance, and disgruntled employees who may be difficult to
remove from the organisation.
With centralised HR support
This option is more common in smaller organisations with few HR
practitioners than in bigger organisations. Line managers essentially
perform all HR functions but have ongoing support from small, centralised
HR sections or single HR managers. This ensures the organisation keeps
abreast of changes in legislative requirements and there is centralised
control and accountability.
Centralised HR function
Generalists
All HR practitioners are grouped together at the head office level,
conducting, or advising on, all HR activities (eg, recruitment, training,
salary and payroll, leave, etc). The disadvantage of this option is that it is
detached from local or regional issues. It‘s also a case of inappropriate
acquisition of line manager functions.
Specialists
This structure differs from the preceding situation in that HR practitioners
specialise in particular activities (eg, a training section, a recruitment
section, or a separate payroll section). This structure is usually found only
in large organisations, and runs a number of risk: the development of
competitive HR ‗empires‘; a lack of integration of the specific HR
functions; and isolation from line management concerns. It can also be a
very costly option.
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Decentralised HR function
Generalists or specialists acting alone
This structure involves decentralising HR staff (both generalists and
specialist) to organisational business units or divisions to advise, administer
or conduct training and recruitment activities.
Generalists with centralised specialist support
This is the current trend in HR structures, especially in larger organisations,
as generalist HR staff are moved into the operating divisions. The generalist
HR staff are supported by head office specialists who largely take
responsibility for policy formulation and high-level decision-making.
Contract specialists Some organisations have begun to hire specialist consultants to carry out
some of their HR activities (eg, recruitment, training, and payroll). This can
have quality and economic advantages, but can also cause problems if the
consultant is not familiar with organisational culture, practices and
expectations.
Regardless of who provides HR services to an organisation, it is generally
accepted that effective providers, with the possible exception of technical
specialists, need to have spent a significant amount of time in line
management positions. This ensures they are familiar with the business
operations, and can relate to and have credibility with line managers.
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Strategic HR management
Levels of HR management What are the key responsibilities of HR management?
Key point
HR managers and practitioners need to make sure that the people
they employ can do the work the organisation needs done—and
that there are sufficient staff to get the work done.
In other words, there needs to be enough staff with the right skills in the
right jobs. Employing staff should also be cost-efficient. The skills should
be those that will enable the organisation to meet not only the organisation‘s
present needs but also its future needs—therefore, HR management should
know exactly where the organisation is headed in years to come, and also
what the external and internal labour markets will be like. The questions
HR management should research are: Will our organisation be able to match
future labour demand and supply? What strategies can we implement to
ensure this occurs?
To fulfil this responsibility, HR services need to be delivered at three
distinct levels:
strategic—focussing on high-level corporate and human resource
planning
operational—mainly concerned with action planning to meet present
labour needs
functional—involving transactional activities and processes designed to
ensure human resources are well-managed on a day-to-day basis.
In some organisations, a HR practitioner may be engaged in providing
services at mainly one level. For example, an HR clerical officer processing
leave applications and answering general personnel enquiries would
probably operate at the functional level. An organisation‘s senior HR
manager would operate mainly at the strategic level, ensuring that HR plans
were supportive of organisational goals. A learning and development
manager might operate at two levels:
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strategic level—to ensure training and development strategies equip
employees to meet future demands
operational level—to develop specific and relevant training
programs to meet current training needs.
Growing need for strategic HR management
Key point
In recent years, there has been a growing need for HR managers
to take a broader role in creating and executing the overall
organisational strategy and sustaining the organisation‘s
competitive advantage.
This strategic role requires HR professionals, particularly those who are in
management positions (or who aspire to be in these positions), to:
respond to a highly competitive workplace and global business
structures
be aware of and contribute to business strategic plans
work closely with line managers to develop and implement HR plans
focus on quality, customer service, productivity, employee involvement,
teamwork and workforce flexibility.
Strategic HR management requires HR practitioners to focus not only on
traditional HR activities, such as staffing and compensation, but on
outcomes.
It has been suggested that an effective HR department should not be defined
by what it does but by what it delivers. In other words, are the people it
deals with (eg, clients, investors, and employees) satisfied with the service
they receive?
The role of HR in improving business outcomes
Effective human resources management involves matching employee and
organisational needs, through the planning and provision of services that
focus on the achievement of business objectives. Desirable business
outcomes may include:
profitability
long-term economic viability
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business expansion
customer loyalty
employee satisfaction.
The future of HR management lies in its ability to assist the organisation in
improving business outcomes. It can do this in a number of ways,
including:
developing HR strategy aligned with business strategy
satisfying stakeholders
developing a supportive culture
developing an integrated and consistent approach to the management of
the organisation‘s human resources.
HR strategy aligned with business strategy
Strategic HR management requires the development of HR strategies that
are aligned with the overall business strategy. This can be done in two
ways:
1. HR managers are involved in the formulation of the organisation‘s
business strategy.
2. HR managers develop HR plans based on identified business needs.
Development of a supportive culture
HR can also assist in improving business outcomes by contributing to a
supportive organisational culture. Organisational culture includes the
common values, attitudes and behaviours that people within the organisation
share, and partly determines ‗the way we do things around here‘.
It is desirable for business success to foster a culture that is supportive of
and consistent with organisational vision and values, and goals and
objectives. Human resource policies and practices can play a key role in
signalling and encouraging behaviours that reflect certain values. For
example, the ways in which vacant positions are advertised may give strong
indications about an organisation‘s culture. Similarly, the ways in which
HR treats job applicants can tell much about acceptable behaviours within
the organisation.
If HR staff develop job advertisements that clearly state or infer particular
organisational values, and then demonstrate those values in the way they
relate to prospective employees, a powerful and consistent message is
communicated.
For example, an organisation may openly state in its vision and values that it
seeks to provide high levels of service to its customers, and advertise for
staff who enjoy working with customers and have excellent customer
service skills.
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HR staff who deal with job applicants by being polite, friendly, helpful, and
enthusiastic are demonstrating behaviours consistent with the organisation‘s
values and are contributing to the development of a supportive culture.
Thus, effective human resource management can contribute towards the
formation and maintenance of a supportive culture. Where cultures are not
supportive of an organisation‘s strategy, cultural change programs often
designed and facilitated by HR teams may be implemented to try to close
the gap between the existing and desired cultures.
An integrated approach to HR management
In order to contribute most effectively to an organisation‘s success, an
integrated, aligned and complementary approach between the various
components of the human resource management function is required. If
employees are selected, trained, evaluated and rewarded according to
similar criteria, then reinforcement and alignment of effort occurs and
productivity and morale are positively affected.
However, in organisations demonstrating ineffective HR practices, it is not
uncommon for employees to be selected according to one set of criteria,
trained according to others, and rewarded for demonstrating behaviours
seemingly unrelated to those criteria for which they have been selected and
trained. For example, a local bank may recruit its customer service officers
on the basis of their strong interpersonal skills. The bank‘s training
department also focuses on interpersonal skill development, but the line
manager rewards staff on the basis of their product knowledge.
For organisational strategy to be implemented and business objectives to be
achieved, there should be consistency and alignment between recruitment
and selection criteria, induction, training, appraisal, and rewards so that they
consistently influence behaviour.
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HR management and industrial relations
There are various
opinions about the
relationship between
human resource
management and
industrial relations.
Some suggest that
industrial relations
systems and their
traditions interfere with
or even prevent human
resource management
theories being used. Others consider that the management of human
resources incorporates the management of the industrial (or employee)
relations systems and practices.
Many Australian organisations realise that if they manage their employees
in ways that satisfy both organisational goals and employee needs, there is
little or no need to negotiate with industry unions.
National, industry and workplace contexts affect the ways that HRM and
Industrial Relations operate. In Australia, unions may be fully included in
formalising enterprise agreements or they may oppose the implementation
of HRM programs. HRM models, therefore, need to be flexible to
accommodate differing organisational needs and environments.
Australia’s industrial/employee relations framework Words and concepts can be confusing. Historically, Australia has used the
term ‗Industrial Relations‘ while Americans use ‗Labour Relations‘ and the
Rudd Labor Government‘s Federal legislation refers to ‗Workplace
Relations‘.
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What is industrial relations?
Industrial relations concerned with how individuals, groups, and
organisations determine the employment relationship between employers
and employees.
Industrial relations includes:
the interests and goals of the different parties
the degree of conflict between those interests
the power resources available to the parties as they pursue those
goals and interests.
In Australia for most of the last century these issues were undertaken at
industry rather than individual employee or even workplace level. They
were typically carried out between Unions, Employer Associations and
Government. However in the 1990‘s there was a change of focus from
industry-wide to a more ‗enterprise-based‘ approach. This was to enable the
different circumstances of businesses within an industry to be taken into
account when negotiating workplace conditions of employment. It also
aimed to give individual employees a greater say in these matters. In
addition it aimed to breakdown the concepts of one person one job and job
demarcation as well as enabling employee multi-skilling to become
acceptable workplace practice.
This change in focus, also lead to the rise and introduction of the notion of
Employee Relations within Australian organisations.
What is employee relations?
Industrial relations is primarily focused on negotiating conditions of
employment and resolving conflict between the parties at a high level
industry basis, whereas employee relations refers to a more consultative,
strategic management approach.
Employee relations is the practice of managing the employment relationship
within the context of employment law (i.e. all aspects of the common law
and statute law affecting this relationship).
Stages in the development of Australian industrial/employee relations
The first hundred years of European settlement – capitalism
introduced which saw craft guilds emerge between 1830 and 1850.
By the 1880s there were 200 unions. In response, employer
organisations began forming in the 1870s.
Unrest, economic depression and Federation 1890-1900 – strikes by
shearers, miners and maritime workers caused the protagonist to
look for a third party to intervene as a means of dispute settlement.
Emergence of ‗determinations‘ in Victoria an adversary-based
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system of conciliation (the negotiated settlement of disputes) and
arbitration (official enforcement by tribunal orders and directions) in
NSW and WA.
Federation‘s first fifty years (1901-1950) – a constitutional
amendment gave Federal Parliament power over aspects of
conciliation and arbitration - Section 51(xxxv).
The Conciliation and Arbitration Act was passed in 1904. In 1905,
the Court of Conciliation and Arbitration (now the Australian
Industrial Relations Commission – AIRC) started its work.
In 1927, the Australian Council of Trade Unions (ACTU) was
formed. ‗Closed shops‘, where union membership was compulsory,
and ‗preference‘ for unionists emerged. Employer associations also
grew.
Pressures for change 1951-1983 - a time of prosperity, ‗baby-
boomers‘ and industrial conflict. A separate industrial court was
established to interpret and enforce awards. In 1951, the AIRC took
on the new role of ratifying agreements instead of settling disputes.
From mid 1970s, the economy was sluggish and HRM was not
common or important. The centralised award based system of wage
fixation had problems.
The Hawke-Keating years 1983-1996 – wage Accords were
introduced. There ‗were a series of agreements between the ALP
government and the ACTU. Award restructuring commenced in
1987, with wage increases based on improved work practices in such
areas as multi-skilling, attendance-time flexibility and methods of
wage payment.
In 1993, amendments to the Industrial Relations Act allowed
employees to appeal against dismissals that were ‗harsh, unjust or
unreasonable‘.
The Howard Years 1996 – 2007 – the new Howard government
passed the Workplace Relations Act in 1996 which:
restricted union activity
weakened the role of AIRC in wage setting and dispute
resolution
promoted individual versus collective agreements
decentralised to workplace/enterprise level
changed aspects of the right to strike.
WorkChoices was introduced in May 2005. It was seen as the most
significant change to Australia‘s industrial/employee relations
landscape since 1904. WorkChoices was increasingly seen as unfair
and was a key issue in the defeat of the Howard coalition
government in the November 2007 federal election
The Rudd Labor Government 2007 to the present - elected on the
basis of restoring ―Your rights to work‖ and outlawing Australian
Workplace Agreements (individual contracts). However this much
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lauded change to Australian industrial relations practices will not be
implemented until 1 January 2010, with Australian Workplace
Agreements (AWAs) not outlawed until 2012. In the meantime a
new Workplace Relations Amendment (Transition to Forward with
Fairness) Bill 2008 has been introduced to mark the beginning of a
smooth evolution to the new Federal system.
This new bill prohibits new AWAs being ratified; establishes interim
Transition Employment Agreements; introduces a new no-
disadvantage test; extends the fixed term of notional agreements
preserving State awards; and empowers the AIRC to conduct a
process of award modernisation.
Parties in the Australian industrial/employee relations system There are three major parties that have been involved in developing the
Australian industrial/employee relations system. They are:
employees and their trade unions1
employers and their associations2
government.
Trade unions
Trade unions have played an important part in Australia‘s industrial
relations history. A modern definition by the Australian Bureau of Statistics
states that a trade union is:
"an organisation consisting predominantly of employees, the
principal activities of which include the negotiation of rates of pay
and conditions of employment for its members."
(http://en.wikipedia.org/wiki/Trade_union, viewed 20 October 2008)
Trade unions have traditionally operated on the principle of collective
bargaining, promoting this is necessary to ensure balance of bargaining
power between employers and employees.
Unions increasingly face the need to justify their relevance in the current
Australian industrial/employee relations environment.
Employers
Employer associations began to form in the mid nineteenth century in
response to tariff protection, and more formally in 1902 in response to the
setting up of wage boards.
1 Employees may negotiate directly with the employer and not use a trade union
2 Employers may negotiate directly with an employee or trade union and not be represented
by an employer association
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Examples of employer associations include:
the Business Council of Australia (established 1983)
the Australian Chamber of Commerce and Industry (ACCI).
Every employer association has a slightly different focus for its members
but most provide industrial services including award
advice/interpretation/representation and information, as well as other
services that promote/lobby on behalf of the industry or employers.
Government
At both state and federal levels, governments play a large role in employee
relations. It is often confusing and difficult as there are seven different
systems in Australia, each with their own law and tribunal. Only the
Victorian government, which took the lead and surrendered various powers
to the Commonwealth in 1997, has moved towards a national system.
Governments contribute to industrial/employee relations through:
passing legislation
maintaining administrative departments, courts, tribunals and offices
employing labour
managing the economy though its submissions on national wage
increases low-pay workers.
developing policy and participating in public relations to influence
changes in industrial relations practices e.g. excluding firms who fail
to obey legislation/codes of practice from government contracts.
The bargaining framework in Australia A complex mix of government legalisation, decisions of industrial tribunals,
managerial regulation and bargaining between employers and employees
have determined the terms and conditions for Australian employees.
Both industrial/employee relations and human resource management, to
varying extents, deal with human and organisational behaviour. Both the
current bargaining framework and that proposed place an emphasis on
organisations developing the negotiation and advocacy skills of its
HR/Employee Relations staff.
What legislation impacts on industrial/employee relations? Australia operates under both state and federal legislation, meaning that an
employee‘s employment conditions may be governed by:
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federal and state awards
federal certified agreements
Australian workplace agreements (AWAs) (being phased out at time
of writing)
state enterprise agreements and workplace agreements.
An employee and employer cannot ‗contract out‘ of the terms and
conditions of employment as stated in an award or agreement. An award
outlines minimum employment conditions for a particular
occupation/industry. Agreements between employers and employees also
state terms and conditions of employment and to be approved and must pass
the ‗no disadvantage‘ test. This ensures that minimum conditions are
maintained and employees are not disadvantaged or expected to sacrifice a
basic standard of employment conditions.
Types of employment relationships There are two types of employment relationships, employee and employer,
and principal and independent contractor.
An employee is required to serve and perform duties that fall within their
job description. Independent contractors do not serve as they usually run
their own business and do not take detailed directions from the principal in
order to perform their work.
At times, it is difficult to distinguish between these relationships due to the
changing nature of work. There has been an increase in the amount of
‗casual‘ employment, often referred to as the ‗casualisation‘ of the
workforce along with outsourcing of jobs to contractors. Home based
industries, working from home and the increased use of labour hire agencies
have also confused obligations and the type of employment relationships.
The employment relationship is an agreement for the employee to serve the
employer and the employer to remunerate the employee.
Even with awards and agreements setting minimum terms and conditions of
employment, the employment contract remains the primary source of the
rights and obligations of the employer and employee.
The different types of employment contracts are:
permanent employees - full-time or part-time employees who
accumulate leave and other benefits and continue working until they
or their employer terminates the relationship
o shift workers are employed on a permanent basis but work
hours in accordance with a roster. The different types of shift
rosters include fixed shift, rotating shift, alternating shift and
continuous shift.
fixed term or temporary employees - operate under contracts that
specify a start and end date.
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casual employees - engaged irregularly and often on a daily basis.
They are not guaranteed ongoing work and do not accrue leave and
other benefits, but are usually paid a loading to compensate for this.
Distinguishing between employee and contractor
As employment relationships have become blurred, the courts have
developed some tests to help determine this relationship. No one test will
ultimately determine the relationship, as it is usually a question of degree.
Despite the actual agreement between the parties as to whether they are an
employee or contractor, the courts may find differently.
Some of the main tests in distinguishing between an employee and
contractor are listed below:
the control test - the courts try to determine if ‗control‘ is present.
The control test is regarded as the most important test, and focuses
on the nature and degree of control a person exercises over the
service provider. The greater the control exercised, the more likely
the person providing the service is an employee.
The organisation test - tries to determine if the service provider has
their own business and is operating under it, or is in fact operating
and following the policy and procedures of the employer.
Generally, independent contractors have a registered business name, have
their own stationery and office premises and are responsible for their own
expenses and other equipment.
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Occupational health and safety
Occupational Health and Safety
(OHS) is a specialist HR function.
In larger organisations OHS may be
a separate functional unit
altogether. In some cases this
function will report to an
operational department with ‗dotted
line‘ responsibility to the HR
department. In such instances both
departments will share policies and
procedures and have similar
objectives and roles in managing
staff in a workplace.
―These activities occur within a framework of legislation that establishes
minimum standards and expectations regarding acceptable behaviour.‖
(CCH, Australian Master Human Resource Guide, McPherson‘s Printing
Group, Australia, 2002, p 4.)
Organisations, large and small are required to comply with this legislation.
In particular they must have an OHS Management System in place.
OHS legislation Diagram of the OHS legislative framework:
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Text alternative for this image: Flowchart: Level 1 is OHS Act, Level 2 is
Regulations, Level 3 is Codes of Practice and Standards.
OHS Act and OHS Regulation
The OHS Act 2000 and OHS Regulation 2001 are both law (legislation) and
must be followed. The Act tells you what to do and the Regulation expands
on how to do it. Codes of Practice and Australian Standards are guidance
notes on how to comply with the legislation and often give more specific
information.
HRM and OHS management
Key point
The primary objective of implementing OHS, as stated in the
legislation, is to ensure healthy and safe workplaces.
Developing and implementing an OHS management system (OHSMS) that
complies with OHS legislation requires intimate knowledge of the
operational activities of the workplace and OHS expertise. It is a time
intensive process and requires commitment from management and ongoing
consultation with the workforce, contractors, suppliers and where
appropriate, with other key stakeholders including customer groups.
Other elements of a robust OHSMS are:
developing key measures of OHS performance so that ongoing,
regular monitoring is in place
identifying best practice OHS performance in the industry/sector or
within specific job roles
evaluation of strategies and actions implemented to control
workplace risks
modifying strategies/actions to improve effectiveness.
OHS management is largely concerned with preventative strategies. Risks
will always exist in the workplace. The challenge however is to develop
strategies to either eliminate or minimise those risks. Control measures
which rely on people, such as administration and Personal Protective
Equipment (PPE), are not very effective as people are not always
predictable. For example, we get tired, distracted and sometimes may not
receive adequate training, supervision, or discipline.
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Even if we ensure a safe and healthy workplace through more effective
control measures (elimination, substitution, isolation and engineering), we
will always need administration (policies, procedures, training, supervision
and discipline) and PPE (protective footwear, gloves, hearing protection,
helmets etc). If we compare the functions of HRM and the control measures
that are required, it is easy to see how OHS management and HRM need to
be integrated.
To demonstrate the importance of this relationship, let‘s consider what
would happen if no-one was responsible for HRM or if they were not doing
their job well:
the most appropriate people for the job may not be selected
an inadequate grievance process may result in high rates of unfair
dismissal claims, angry or hostile situations, and increased employee
turnover
productivity and quality may be compromised as there is no
accountability by way of performance reviews or job analysis
ineffective interviewing and recruitment could result in
discrimination and EEO issues
there may be little structure or chance of career progression
legal prosecutions could be high under OHS and Industrial Relations
legislation
accidents and incidents could occur due to inadequate training,
supervision, reward and discipline
workers‘ compensation and other insurance premiums could be high
due to increased claims and associated costs
poor planning, safety and people management practices could affect
the organisation‘s profitability.
More information…
For those wishing to read further, the CCH text Planning Occupational
Health and Safety a guide to OHS risk management 7th
Edition,
McPherson‘s Printing Group, Australia, 2006,is an excellent resource for
HR/OHS practitioners.
Workers’ compensation and rehabilitation One result of the change in focus and status of OHS has been the rise in the
area of Workers‘ Compensation and Rehabilitation. Rather than as was the
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practice in the past, of paying out and terminating workers who have
suffered a workplace injury or health problem, workplaces are now expected
to take positive action to assist in the rehabilitation and return to work of the
affected employee. This tends to be a specialist field but often comes under
the broad banner of responsibility of the HR Manager. This alignment with
HR management makes good sense when it is considered the focus of
Workers‘ Compensation and Rehabilitation primarily recognises the value
and contribution of individual employees to their organisation and the wider
community.
More information…
For more information about this area by read Appendix 2: Co-ordinating
workers‘ compensation and rehabilitation claims. Please note, the reading
notes provided in Appendix 2 are quite detailed and explores the subject
matter in greater depth than required for this unit of competency.
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HR information systems
The traditional view of
the Human Resource
Information System
(HRIS) is that of
maintaining personal
records with information
based on payroll needs
rather than the full HRM
requirements.
Over the past fifty years,
technological change has
been significant. The
move from manual systems of recording and analysing personal data to
more sophisticated computerised systems has been driven by global and
competitive forces. The measurement and effectiveness of the human
resources of an organisation are crucial to maintaining competitiveness and
also profitability.
Every organisation will have differing needs and wants when it comes to a
HRM system and they must identify those before selecting, tailoring and
implementing a HRIS.
The following list of HRIS activities highlights the scope of the human
resource activities in an organisation:
resource planning and administration
payroll
record keeping and administration
leave entitlement administration
absenteeism and labour turnover
occupational health and safety
injury management system
competency and skills inventory
equal employment and affirmative action statistics
training and development planning and evaluation
employee data and relations
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performance management
job evaluation.
Flexibility is the key requirement of any HRIS. The financial controllers of
an organisation will need to quickly assess the impact of a 5% increase in
salaries across the organisation whereas the human resources area may wish
to find out how many employees, for example, speak Chinese. The typical
HRIS will need to produce non-standard reports as an organisation responds
to competitive pressures.
The following table outlines the various uses of a HRIS system:
Who Information What
Top Management Management information
for strategic planning, policy
formulation and decision
making
Summary reporting,
projections, human
resources planning and what
if analysis
Department and
Management Level
Management information
for tactical planning and
decision making
Exception and summary
reports, generation of ad-hoc
reports
Middle Management and
Supervisory Level
Management information
for day-to-day planning,
decision making and control
Regular reports and
generation of ad-hoc reports
Operational Level Transaction processing,
general inquiry facilities
Basic system processing –
personal records, training,
recruitment, etc
As the HRM process evolves within an organisation so must the HRIS
evolve so it can continue to support and add strategic value to the
organisation.
Increasingly, HRM is being held accountable for the value it adds to the
organisation.
A HRIS must be able to produce data and statistics to enable HRM
reporting, benchmarking and sharing best practice with internal and
external partners.
Value adding is the key outcome of any HRIS. An effective HRIS can
enable an organisation to achieve its objectives regarding people and in turn,
support the organisation‘s strategies and goals.
A critical factor in introducing a HRIS is to ensure it‘s compatibility with
the other IT and information systems already in existence i.e. that a
compatible computer language is used so they will be able to ‗talk‘ with
each other.
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HR contingency planning
Organisations need contingency plans to ensure they can continue operating
during situations of unexpected emergencies or occurrences.
The following table shows examples of potential contingency situations and
responses:
Situation Response
Armed hold up Define procedures and ongoing support
Computer malfunction or fire Develop recovery plans for information loss
Fire
Bomb threats
Gas leaks
Flood
Develop evacuation procedures
Unexpected permanent employee losses Develop process for succession and
recruitment planning
Temporary unexpected employee loss
because of illness or disaster-volunteering
work
Staffing response
Accidents Review action plan
Sudden increase in consumer demand or
workload
Recruit, overtime or reallocate employees
Global crisis Provide increased security locally
Source of table: Seward and Dein, Australian Human Resources
Management 2005, p 30.
In line with standard business practice, all forms of contingency planning
should be reviewed and updated regularly, tested where possible to ensure
appropriateness and fit with the organisation and communicated to relevant
stakeholders. Documented plans must be accessible to key personnel for
reference when responding to an identified emergency. Regular emergency
evacuation procedures should be carried out.
Developing relevant contingency plans can lead to a strategic advantage for
an organisation over its competitors who have no plans in place.
Responding in a structured and considered way is more effective than
relying on ad-hoc responses.
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Labour turnover
Labour turnover refers to the
movement of employees in and
out of an organisation. It can
indicate healthy workplace
activity or be a sign of an
unhealthy workplace.
Labour turnover can be
negative in two ways:
high turnover can be
costly to the
organisation and
directly affect
organisational
performance. Profits
can reduce and
succession planning becomes more difficult.
low turnover means that new ideas and personalities do not enter an
organisation. The existing employees may tend toward ‗group think‘
where employee stability and cohesion impedes innovation, as the
group does not consider all alternatives to find the best outcome.
Labour turnover occurs due to:
employer initiated termination: dismissal or redundancy
unavoidable reasons: retirement, illness, death, family relocation or
family issues
avoidable reasons: employee initiated career change, chasing
promotion and salary increase, personality conflict.
Costs of labour turnover
Key point
The costs associated with high labour turnover can turn an
otherwise competitive organisation into a struggling organisation.
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High employee absenteeism is an early indicator of emerging
high employee turnover and therefore absenteeism should be
measured and reported.
Direct costs of labour turnover: Indirect costs of labour turnover:
Replacement costs, i.e. Advertising,
interview time, selection and
induction
Processing and paying out
employees, including the cost of the
exit interview
Overtime to take up any shortage in
output
Training of new employees to
improve their productivity
Under-utilised resources
Lost sales
Lower service levels
Lower quality
Increased customer dissatisfaction
Late deliveries
Supervision time for induction
Lower morale
It is crucial that we identify the reasons, either single or multiple, for high or
low turnover as this will ensure maximum organisational productivity. In
most cases there are multiple reasons that can be identified through:
statistical analysis of age, gender, occupation, length of employment and
rostering arrangements
exit interview, both structured and unstructured
category of termination, voluntary or involuntary
surveying existing employees for opinions and attitudes.
After identifying the reasons for high turnover, we can implement remedies
to reduce this risk. For example, increase pay scales to remain competitive
with similar organisations and provide on the job education and career
opportunities to retain employees.
An appropriate labour turnover policy and procedure is essential to a
productive workforce.
Measuring labour turnover Businesses can readily measure and track the turnover ratio of staff through
the formula below. Statistics should be collected on all staff who leave the
organisation within a specified period. Quarterly measures enable the
organisation to quickly note any seasonal trends or take account of
differences when affected by specific organisational/labour market
activities.
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How to calculate turnover:
Text alternative for this image: Turnover equals total number of leavers over period
x 100 divided by average total number employed over period
More specific analysis should differentiate casual and fixed term staff from
permanently employed staff. Turnover within, for example, high cost work
units can also be tracked separately. Equally, work units with high turnover
which do not required any specialist skills and attract staff readily can be
separated out from other work units.
HR should develop trend data to better inform its attraction and retention
strategies and to inform reporting to the organisation on performance in this
area.
HR managers must be realists and accept that labour turnover will always
occur. The challenge is to minimise its occurrence particularly in relation to
high performing employees. Because of this inevitability HR managers
need to establish labour turnover standards against which to compare their
organisations outcomes. Comparative industry results enable you to make
comparison against your direct competitors. In addition labour turnover
ratios allow you to monitor and evaluate your organisational results over
time.
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Performance management systems
Managing staff performance is a
formal way of looking at staff
productivity and behaviour. It is
an ongoing process of
identifying, evaluating and
developing the work
performance of employees so
that organisational goals and
objectives can be achieved, and
at the same time benefit those
employees by rewarding and
enriching their working lives.
We will look at some processes
and tools to facilitate
performance management.
What is performance management? Performance management is the structured process that provides
information about individual output and behaviour.
It is an ongoing process of identifying, evaluating and developing the work
performance of employees so that organisational goals and objectives are
more effectively achieved while at the same time benefiting employees in
terms of recognition, receiving feedback, catering for work needs and
offering career guidance.
Performance management has two goals:
developing the individual
evaluating the individual.
The overall goal is to review and improve the general performance of the
organisation in a sustained manner by aligning employee and organisational
objectives. It also provides a consistent approach to reviewing employee
performance across the organisation.
A performance management system is comprised of the following
components:
job and role specification
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reward structures
selection of employees
induction and training
appraisal and assessment
employee feedback
goal setting.
As mentioned above, employees and the organisation must have shared
objectives. For this to be possible, the right employees are needed, in the
right environment with the right skills and knowledge. This can be created
through implementing a sound performance management system. The
following table provides an outline of the key concepts.
Performance Concept Meaning
Job Enrichment Vertical expansion of a job by
providing additional responsibilities.
The five main features of job
satisfaction are:
achievement
recognition
work itself
responsibilities
advancement.
Job Dissatisfaction Workers‘ visible or hidden
unhappiness with their workplace.
The five main points of job
dissatisfaction are:
company policy and
administration
supervision
salary
interpersonal relationships
working conditions.
Job Satisfaction Being satisfied with the workplace
in terms of extrinsic (money and job
securities) rewards and intrinsic
(feeling of achievement and
performance) rewards.
Industrial Democracy Is the spread of organisational and
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Performance Concept Meaning
decision-making power from
management to workers through
empowering workers.
Job Security The knowledge and confidence that
a position will exist in the future,
usually associated with quality and
productivity issues.
Job rotation Moving workers around or changing
their tasks in the workplace.
Job Enlargement Horizontal expansion of a job by
providing different work at the same
level of responsibility.
Worker Participation Involving workers in the decision
making about the workplace.
Quality of Work life Factors in the workplace to which
workers are entitled.
Performance management goals Developing the individual – through training, secondments, job
enrichment, transfers, promotions, management development
programs etc.
Performance improvement - promotes successful performance
and helps individuals overcome barriers.
Identifying potential - identifying possible career paths for
employees.
Feedback - providing information about expectations and
benchmarks against performance goals.
Human resource planning - Human resource planning looks at
the existing employees to identify training and development for
the organisation‘s future needs.
Communication - Two-way communication between
management and employees builds understanding and trust that
helps attain joint outcomes.
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Performance management process Diagram of the Performance management process:
Text alternative for this image: Hierarchy showing: Organisation’s Core Mission;
Planning – Strategic, Corporate, Workforce; Job design, definition, analysis;
Accountability; Job result areas; Counselling, Training and development, Career,
succession, planning, Identifying potential, Reward system.
Soruce: CCH, Australia, Master Human Resources Guide 2004/05, Sydney,
2004, p 430)
The above flowchart outlines the process of managing the performance of
individuals. Today, there is increased awareness of the relationship between
productivity and workplace stability, and management and employees‘
harmony and welfare.
Job analysis
Job analysis, accurate job descriptions and job specifications are important
for the selection of appropriately trained and experienced personnel. A
proper match between a job and employee capability is essential if the
organisation is to achieve its business goals. The organisation must have a
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thorough understanding of the demands of each role and the skills required
to perform at the required level. Job analysis provides the foundation for
developing this understanding. It is also fundamental to the performance
management process.
Job descriptions
A job description is a document that is derived from the job analysis. A job
description, also referred to as a position description, sets out the
responsibilities of the jobholder, what they actually do, why the job exists
and under what conditions it is preformed.
Job specifications
The job specification, also known as the person specification, is derived
from the job analysis. It identifies the skills, knowledge, abilities,
qualifications, experience, personal qualities and any special requirements
of the person needed to perform the job competently.
Performance management
Job analysis is essential to developing performance standards. Without this
information, we can‘t measure acceptable levels of performance. Well-
defined performance measures provide clearer guidelines about expectations
for individual performance and enable the Human Resource or Line
Manager to coach employees specifically in the areas they need to improve.
Training and development
The person specification defines the knowledge, skills and abilities required
for successful job performance. This means the Human Resource Manager
can develop training and development objectives, design programs and
determine whether an employee needs further training. In larger
organisations you may find this function referred to as Learning and
Development or Workforce Development.
Career planning and development
The HR Manager, mentor or other managers are better equipped to provide
career counselling, advice and planning if they have an accurate
understanding of the types of jobs available in the organisation.
Remuneration and benefits
If we determine the relative worth of a job, we make the process of salary
and benefits administration simpler and more equitable. Without this
information it is difficult to accurately estimate a job‘s worth to the
organisation or to make comparisons with jobs in the marketplace.
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Employee relations
Misunderstandings about job content and responsibilities are a major source
of industrial disputes between employers, employees and unions. Job
analysis provides the organisation with essential information to minimise
such disputes and grievance because it provides the information necessary to
make sound decisions about jobs and responsibilities.
Performance appraisal
Performance appraisal is part of a performance management system that
also consists of performance planning, continuous measuring and feedback,
regular realignment of key performance indicators and developmental
programs.
The information from a performance appraisal can assist with an employee‘s
future training and development, identify knowledge and/or skill gaps,
review wage and salary and develop a career pathway for potential
promotion.
Key point
The performance appraisal process should not be the sole
responsibility of the human resources area – it should be the
responsibility of all line managers and indeed all employees of
the organisation.
Note: The appraisers need to be adequately trained and prepared
for undertaking this task.
The performance appraisal process The performance appraisal process is a systematic, considered and face-to-
face discussion between the employer representative and the employee
about work performance, work goals, career aspirations and future
development.
The appraisal procedure is traditionally an annual process and is a formal
opportunity for discussing, documenting and planning work related issues.
The strategic goals of the performance appraisal system are:
encourage work performance, both to maintain a high standard of
performance or to improve the current standard of performance
acknowledge and recognise good performance
review past performance
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identify training and development needs
enhance communication and understanding between the employer
representative/employer and the employees
identify and establish future work goals through documenting a
learning and development plan.
The overarching goal of the performance appraisal process is to improve
performance, employee morale and organisational sustainability.
The process of reviewing performance will detect instances of
underperformance and manage that within its process. Underperformance is
more likely to be the result of unclear work goals for the individual, poor
supervision, skills training issues etc. These matters are core to the
performance management process.
On the other hand, ongoing poor performance i.e. where an employee does
not respond to endeavours to correct underperformance , whilst it may be
initially identified during a performance appraisal, will be managed
according to the organisation‘s separate managing poor performance
policies and procedures. Organisation‘s that do not have separate policies
may rely on relevant clauses in industrial awards/agreements to guide their
process. Where a remedial action plan has been agreed and is in place, the
performance management system may be utilised to monitor progress.
Poor performance must be dealt with expeditiously, using appropriate
counselling, grievance and disciplinary procedures that are fair, equitable
and accessible to everyone in the organisation. Managers need to be trained
in these or receive coaching when working through an issue to ensure policy
is followed.
At the same time employees also have a responsibility within this process.
Employment contracts are made on the basis of employees working at
expected standards of performance. Failure to do so, after procedural
fairness processes have been followed, provides a basis for employment
termination. This is an example where performance management interfaces
with the area of Industrial Relations.
Legislative issues
Performance management is a positive process that should benefit the
employees and the organisation. It should take place within a framework of
established policies and procedures that meet organisational requirements
and reflect the current legislation and industrial relations requirements. This
structured framework will not only ensure that employers meet their
responsibilities and comply with legislation but will also enable employees
to achieve their potential. For example:
if employees are benchmarked against vague standards or criteria
needed to perform a particular job, an employer may be in breach of
equal employment opportunity legislation.
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employers need to be mindful of privacy legislation when they are
collecting, evaluating and storing statistical data to determine future
human resource needs.
the occupational health and safety legislation requires an employer
to maintain a safe workplace, that is, one without risks to its
employees‘ health.
Record keeping and documentation
Record keeping and documentation of human resources processes are
essential for an organisation to meet its legislative requirements and for the
administration of performance management. Certain records (either in hard
copy or electronic format) must be maintained and the organisation should
establish a systematic approach to record keeping.
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Training and development
Training and
development is an
important part of any HR
function. It should be an
ongoing process aimed at
helping all employees
reach their full potential
by acquiring the
knowledge, skills and
attitudes relevant to their
work.
Training initiatives may cover a range of subjects, including:
general workplace policy and procedures
legislative responsibilities in areas such as OHS, EEO, grievance
handling, performance management and discipline
induction training for new or relocated employees
on-the-job training and workplace resources such as posters and
summary cards.
Training programs are useful tools for communicating information. Often,
programs are developed as part of the organisation‘s strategy for
implementing new policies and procedures. Training is a flexible solution.
It can be tailored to the audience so that different groups within the
organisation receive the information relevant to them.
At a management level, training can ensure that all supervisors know their
legislative obligations, role and responsibilities to implement policies and
procedures. At an employee level, it ensures the competence of the worker
to carry out tasks in keeping with the organisation‘s policies and procedures.
The training and development model that follows highlights areas that
determine the skills and knowledge requirements for a given job. It also
takes into account specific training considerations, such as:
target audience
location
training techniques
course design.
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Training and development model:
Text alternative for this image: Hierarchy showing: Job analysis, HR planning
needs, Legislative compliance, Needs analysis – organisation, jobs, employees,
Performance feedback system; Skills requirements – technical, conceptual,
interpersonal, management; Who to train – managers, employees, Where to train –
in-house, external, How to train – training strategies & techniques, Course design –
session plans, learning outcomes, learning styles.
Implementing training programs Training may take many forms. Here are some methods you might consider
when implementing a workplace training program:
Demonstrations Field visits
Workshops Lectures or presentations
On-the-job training Case studies or simulations
Computer instructions Interactive multimedia
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Action learning projects Self-paced learning
Implementing development programs
Key point
Development programs are designed for deeper knowledge and
skill acquisition. These programs have a longer-term focus and
may be in place over a period of months or even years,
depending on the individual development need.
Such programs are often linked with the performance management/appraisal
system and succession planning.
Succession planning is the process of identifying personnel with the skills or
potential to succeed to the position when the job incumbent leaves/is
transferred/promoted out of that position. For contingency planning
reasons, it is usual to have two personnel identified as possible future
incumbents of the position.
Programs may be designed for an individual or a small group of personnel,
such as graduates, or employees who have been identified with potential to
progress quickly in the organisation. Where a small group is involved, the
program usually has some flexibility to enable tailoring for individual
development needs.
Techniques for professional development that incorporate working with
others include:
Mentoring Coaching Buddy systems
Networking Support groups Discussion groups
Social groups Research Projects
Computer-assisted
programs
Seminars Conferences
Attending meetings Working parties Industry visits
Secondments Job exchanges Higher duties
appointments
This HR function is often a good indicator of an organisation‘s commitment
to the whole area of HR management. Good investment in and commitment
to the training and development function indicates management‘s perception
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that their employees are critical high potential assets rather than unavoidable
high costs.
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Appendix 1: The development of human resource management
HRM in Australia has evolved through the following stages:
Stage Time Period Development Stage
1 1900 to 1940s Welfare and administration
2 1940s to mid-1970s Welfare, administration, staffing and training—
personnel management and industrial relations
3 Mid-1970s to 1990s Human resource management
4 2000 to now Human resource management in the new millennium
Source: Nankervis et al, Human Resource Management, 2002, p 9
The welfare and administration stage (1900 to 1940s) During this period, Australia experienced a reasonably stable economy,
marketing its limited manufacturing and agricultural products in the United
Kingdom and Europe. The First World War and the Great Depression
disrupted Australian society. There was low unemployment up until the
1930s after which labour was readily available for employers. The trade
union movement focussed on issues of pay and working conditions.
During this period, supervisors, line managers and early specialists such as
recruitment officers, trainers or welfare officers were responsible for
personnel functions in organisations. These were a part of the overall
administration, and were restricted to wage/salary records, employee
welfare activities and disciplinary procedures. As a result, personnel
functions were largely fragmented. Early management theorists from
overseas had little impact in Australia until the 1940s. Structured reward
systems and ‗scientific‘ selection techniques, through job design, helped
refine personnel management practice by recruiting and placing skilled
employees. Management science contributed to performance management
programs and behavioural science added psychological testing and
motivational systems.
In 1927, A H Martin from Sydney University established the Australian
Institute of Industrial Psychology to promote the ideas of behavioural
scientists and industrial psychologists in Australia.
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The welfare and administration, staffing and training stage (1940s to mid-1970s) This period marked the beginning of a more professional and specialist
approach to personnel management in Australia. The Second World War
had a significant effect on business, the economy and the labour market for
those who stayed at home and those who went overseas.
Not only was there a labour shortage for essential industries during the
Second World War but there was also a corresponding increase in problems
with performance of existing employees. Australian industry employed
more women since men were in military service. Social, financial and
family pressures hindered productivity and output of employees and
recruiting became increasingly harder.
At the end of the war, returning soldiers flooded the labour market but often
with few work skills. Employers, encouraged by government initiatives and
their own post-war need for skilled labour in a developing economy, began
to focus on a wider range of personnel functions.
Some employers found that employee welfare services attracted employees
and ensured their continued productivity. Scientific management and
behavioural science techniques, such as psychological testing and structured
leadership training, were used in selection and training programs in some
Australian organisations, after trials in the United States and British armies
during the war. Specialists were employed to recruit, train and for welfare
activities, taking these functions away from line managers.
During the 1950s, the Commonwealth Employment Services (CES) was set
up to help employers obtain suitable employees, and the Institute of
Personnel Management Australia (IPMA) was developed which led to most
Australian states having personnel management courses. Unionism during
these decades focused on pay and work conditions, forcing personnel
activities to include industrial relations issues. The Conciliation and
Arbitration Act (1904) established national and state industrial relations‘
structures that were developed even further during this period.
However, the expanded range of personnel functions were separate
activities, performed without any consideration of their impact on the
overall organisation.
Human resource management (mid 1970s to 1990s) During the 1970s, the majority of Australian organisations experienced
turbulent business and economic environments. There was severe
competition from the United States and European organisations and
emerging Asian markets. Dramatic rises in the cost of oil products lead to
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increases in the cost of all goods and services and ultimately led to
substantial salaries and wages increases. The cost of employees became a
major issue for most organisations and triggered major organisational
restructuring and a clearer focus on the need for efficient and effective HR
management systems and processes. ‗Excellence‘ theories began to
influence the management of employees and IPMA and training institutions
became more sophisticated in their approaches, incorporating ‗Excellence‘
theories and Total Quality Management.
Personnel Management was becoming human resource management – a
change that meant integrating personnel functions and a strategic focus on
overall organisational effectiveness.
Australian HRM combined personnel management and industrial relations
activities and was affected by award restructuring and enterprise
agreements, increasing employment legislation and economic realities such
as declining trade with Britain and Europe and an increase in opportunities
within the Asian region.
This stage represents the integration of personnel management and
industrial relations into a co-ordinated and strategic approach to the
management of an organisation‘s employees – Strategic Human Resource
Management.
Human resource management in the new millennium HRM has been, and will continue to be, transformed as a consequence of
new technology, globalisation, and fundamental changes in the nature of
jobs and work. In Australia labour and skills shortages across the nation
together with generational change issues have and will continue to provide
organisational challenges and place high focus on establishing and
maintaining effective HRM practices.
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Appendix 2: Co-ordinating workers’ compensation and rehabilitation claims
Note:
You do not need to know the information in Appendix 2 for
completion of the unit BSBHRM401A – it is provided as additional
material for your information.
WorkCover NSW defines workers‘ compensation as providing ‗injured
workers with weekly payments to cover loss of earning capacity, payment of
medical expenses and vocational rehabilitation expenses, where necessary,
to assist them to return to work. All employers are required to have a
workers‘ compensation policy to protect them from financial claims when a
worker suffers a work related injury.‘ (www.workcover.nsw.gov.au)
Organisations need appropriate policies and guidelines for the
administration of workers‘ compensation. If a claim is made, the matter
needs to be resolved quickly. Employers should periodically review all
claims and use the findings to improve operations and train employees so
that there are fewer incidents in the future.
The philosophy behind injury management is intervention and/or
rehabilitation. The legislation is designed for early notification of injury
and a timely response to managing the injury.
An organisation must cover all employees with a workers‘ compensation
scheme appropriate to the state or territory in which it operates.
There are a number of stakeholders in the workers‘ compensation process,
each with roles and responsibilities in co-ordinating and managing claims
and injury management.
The role of the employer is to co-ordinate and manage workers‘
compensation claims and workplace injuries through effective claim
processes, including managing the injury and the injured worker. This is
achieved through human resource systems and a nominated workplace
injury management co-ordinator and/or staff member responsible for
administering the workers‘ compensation and injury management programs.
Integrated information systems are essential for managing workers‘
compensation.
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Employers should work closely with their insurer and the injured worker to
support the progress of a work-related injury and their worker‘s recovery.
The earlier a work-related injury is treated and managed, the more likely the
worker will recover. A return to work (RTW) plan, providing suitable work
duties, is essential for injury management as it allows workers to remain
useful, which helps both their recovery and motivation.
Rehabilitation is the centrepiece of all approaches to workers‘ compensation
claims. The overall plan is to get injured workers back to the workplace in a
condition that allows them to perform their normal duties or duties as
determined by either WorkCover or a medical practitioner.
Accident prevention covers accidents to an employer‘s property, materials,
production and equipment. It also covers injury prevention, which can be
associated with the above. The relationship between accident prevention
and workers‘ compensation depends on how proactive the company is in
managing its human risks.
Occupational health and safety (OHS), injury management and workers‘
compensation are constantly changing. Recently, we have seen significant
changes to both the OHS and injury management legislation in New South
Wales. These changes are partly about the time and manner of reporting
work related injuries and illnesses. Without monitoring, reviewing and
auditing injury and incident documentation, there is no way of measuring
performance in this area of management. There have also been changes to
workers‘ compensation legislation, in particular, a new scheme for
participating insurers.
The history of workers’ compensation and injury management in NSW The NSW Workers’ Compensation Act 1926 was the first NSW government
Act to provide rehabilitation, but it was not binding on either the employer
or injured worker. This meant that many workers were left with horrific
injuries, had no physical or vocational rehabilitation, and little prospect of
finding future work.
The NSW Workers’ Compensation Act 1987, which superseded the 1926
Act, makes rehabilitation its focal point.
Under this Act, rehabilitation became:
an obligation placed on the employer, and
an entitlement to injured workers.
This Act also emphasised paying regular benefits (weekly payments) rather
than a single lump sum. In the past, the worker only received a lump sum
payment after they had recovered.
Weekly payments recognised the social and economic advantage to the
injured worker and their dependants of maintaining their standard of living
while the worker was recovering and preparing to return to work.
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The NSW Workplace Injury Management and Workers’ Compensation Act
1998 extended injury management and rehabilitation to include:
treatment of injuries/illness
retraining
workers‘ compensation claims management
employment management practices.
This Act makes the employer, their workers‘ compensation insurer and an
injured worker‘s treating doctor responsible for managing the injury and
facilitating the employee‘s return to work as fast as possible, using a formal
injury management system.
Since the 1998 Act was introduced, there have been further Amendment
Acts proclaimed. These Acts have streamlined the workers‘ compensation
process and strengthened the responsibilities and duties of the employer,
insurer and treating doctor for early injury management of injured workers.
However, none have changed the underlining principles set down in the
1987 Act or the 1998 Act.
The employer’s legal responsibilities and role when a worker is injured The philosophy behind injury management is early intervention. This
means managing a worker‘s injury as soon as it occurs. In fact, before the
injury occurs. The company must allow easy access to information on
workers‘ compensation. The current legislation requires early notification
of injury and a timely response to injury management.
Employers who work closely with their insurer and the injured worker can
influence the progress of a work related injury and help their employee
recover. The earlier a work related injury is treated and managed, the more
likely the worker will recover quickly and have less time off work. The
main tool for injury management is providing suitable duties at work as this
helps workers remain useful, recover faster, be more motivated and keep a
positive attitude.
The benefits to an employer who offers suitable duties include:
lower workers‘ compensation premiums
productivity from the injured worker, even if at a lesser rate
positive attitudes in the workplace
some control over the worker‘s recovery.
Let‘s look at the reporting procedures and injury recording documentation
that an employer must complete when an injury occurs.
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Reporting procedures and injury recording documentation
Notice of injury
All employers must have an injury register, which is a document or file for
recording workplace injuries. Employers may be fined if they do maintain a
Register of Injuries. Employers must ensure that all workers are aware of
their obligations to report (document) workplace injuries and hazards. If a
worker sustains an injury or illness at work, they should report the injury or
illness to their immediate supervisor, and record this information in the
injury register and any other organisational documents required.
Notifying incidents and injuries to the appropriate authorities
From 1 September 2003, the way in which employers should notify serious
incidents and incidents were changed. WorkCover NSW has a publication,
which sets out the requirements; you can download it at
http://www.workcover.nsw.gov.au/Publications/WorkersComp/InjuryMana
gement/Pages/new_not_broch_1287.aspx
As employers are governed by the timeframes listed above, it is also
important that employees are informed of these requirements, and that
employees co-operate by notifying their supervisors or employer early,
following a workplace incident. For instance, if an employer is required to
notify their insurer within 48 hours, and an employee doesn‘t report an
incident until 24 hours after it happens, then it makes it difficult for an
employer to comply with WorkCover‘s timeframes.
Workers’ compensation claims
Before making a claim, the injured worker (or their representative) must
advise the employer that an injury has occurred, and provide medical
information in the form of a NSW WorkCover Medical Certificate. An
injured worker does not, in most cases, need to send a written claim form to
the insurer to receive workers‘ compensation. Instead, once the insurer has
been told of an injury (by the employer, the worker or a third party), the
following will occur:
provisional liability payments will start within seven (7) days (for
most injured workers).
the insurer will investigate the facts and decide to either continue or
stop further payments. Most of the information that the insurer
needs to make a decision about workers‘ compensation will be
available from the employer, the worker and the treating doctor.
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There are occasions, however, when a worker will need to submit a written
claim form, such as:
if the insurer requests one (for example, if the insurer is notified two
months after the injury)
if the worker needs weekly payments for more than 12 weeks or
medical expenses of more than $7,500
if the insurer decides not to start provisional liability payments, or
stops making provisional liability payments, and the worker
disagrees.
The employer must provide the name of their workers‘ compensation
insurer to all employees. This is usually in the form of a poster on
noticeboards and is also included as part of the Register of Injuries form, or
included in the Register of Injuries folder.
If an injury occurs, an employer must supply a workers‘ compensation claim
form, if requested by the injured worker. Alternatively, the employer can
provide this information to the insurer if a claim form is not required, as
mentioned above.
Workers‘ compensation insurance is compulsory. Fines and prosecutions
can occur if an organisation fails to obtain current workers‘ compensation
insurance.
It is also an offence to dismiss an injured employee within six months of
sustaining an injury/illness at work that leaves them incapacitated.
Forwarding information to the insurer
The employer must send the injured worker‘s WorkCover Medical
Certificate to the insurer within seven days of receiving it, and also forward
any ongoing Medical Certificates, receipts and accounts for medical or other
treatment, within seven days.
Examples of documentation
If the injury/illness keeps the worker away from work for less than 12
weeks, with medical expenses less than $7,500, the documentation required
by the insurer may only include:
employee‘s WorkCover NSW Medical Certificate/s
receipts and accounts for medical or associated expenses
a copy of the Injury Register or an organisation‘s Injury Notification,
which can be done electronically or by phone
If the injury/illness keeps the worker away from work for more than 12
weeks, with medical expenses greater than $7,500, the documentation
required by the insurer may include:
employee‘s WorkCover NSW Medical Certificate/s
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employee‘s Compensation Claim form, if requested
receipts and accounts for medical or associated expenses
employer‘s Report of Injury form.
Always keep a copy of every document that relates to a workers‘
compensation claim. Also, the employee is entitled to a copy of every
document they have signed.
Payment of benefits to workers
The insurer is legally obliged to start provisional liability payments to the
employee within seven days of being notified of the injury. This does not
mean the insurer has accepted liability for the claim. The insurer can choose
not to continue these payments if they have reasonable excuse. Further, the
insurer has 21 days from the initial notification to accept or deny liability for
the claim. Once the insurer has made a decision they must notify the
employer and employee by mail.
It is important to be fully aware of the documentation required to process a
workers‘ compensation claim. The areas of injury notification and claims
processing are quite complex.
What you should not do
You should not make any payment (medical and wages) to an injured
worker before you have received word from your insurer or delegate (loss
assessor) that they have accepted liability. To pay without advice from the
insurer is to accept liability on their behalf.
If forms are requested by an insurer, when completing any employer
documentation, you should not copy from the employee‘s report of the
incident. The employer‘s reports should be based on an incident
investigation. This shows the importance of having good incident, injury
and near miss reporting systems that help you obtain and record all relevant
information as soon as possible after the employee‘s injury.
Again if a form is requested, it is equally important that the employer does
not complete the employee‘s claim form. If the claim is litigated, the
employee may claim that they didn‘t complete the document or didn‘t
understand a particular section. When the claim is received it is checked
and the stakeholders are informed. Incomplete forms are returned for
correction.
To encourage employees to seek early treatment for workplace injuries,
there is a Statute of Limitation for reporting workplace injuries. This means
there is a timeframe for a worker making a claim. If a claim has not been
lodged within six months of the worker suffering an injury, the insurer will
investigate the claim, which will prolong the outcome and may cause
financial hardship and stress for the employee.
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Common law and duty of care Workers‘ compensation is part of an employer‘s ‗duty of care‘ in the way
they carry out their business. ‗Duty of care‘ is embodied in common law of
employment and negligence and fundamentally means that an employer is
legally obliged to take care to ensure that employees are not exposed to
unnecessary risks.
To perform their duty of care under common law, the employer must
provide:
reasonably competent employees to do the work
a sufficient number of employees to do the work safely
a reasonably safe place to do the work
proper plant and equipment to do the work
a reasonably safe system of work
safe entry and egress at the workplace.
The above duty of care principles are included in the Occupational Health
& Safety Act 2000 and the OHS Regulation 2001.
Employees also carry responsibilities under the Act and Regulation, and
must co-operate with the employer‘s efforts to comply with OHS
legislation, and take reasonable care for the health, safety and welfare of
others.
Common law provisions
A worker may be entitled to sue their employer for damages at common law
if the injury was caused by the negligence of the employer or a fellow
employee. Negligence is a failure to take reasonable care of the worker.
Damages at common law are generally paid as one lump sum, to cover past
entitlements and expected future entitlements.
The method of assessing losses under common law claims has changed with
the amendment of the workers‘ compensation legislation in late 2001. To
be able to seek damages under common law, an injured worker must have a
permanent physical impairment of 15% or more, using the WorkCover
guidelines for the evaluation of permanent impairment.
Only damages for past and future economic loss, due to loss of earnings,
may be awarded in a common law action. If a worker is successful in their
common law action, they cease to be entitled to any further compensation
under the 1987 Act; the amount of any weekly compensation already paid is
deducted from the damages awarded, and the worker cannot access any
further injury management.
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Workers’ compensation
Employers must indemnify their employees for losses legitimately incurred
while carrying out their work. Workers‘ compensation can provide income
and meet the medical and associated costs for those people who suffer
injuries, illnesses and diseases in the course of carrying out their work for
their employer. In other words the workers‘ compensation system provides
benefits for injured workers.
Workers‘ compensation is generally a no fault system. Under workers‘
compensation, negligence or contributory negligence is not an issue. The
major issue under workers‘ compensation is whether or not the injury or
illness is work related.
The workers’ compensation claims process There needs to be an injury, illness or disease before the injury management
process can start. Obviously not every workplace accident causes an injury,
but when an injury or illness does occur we must follow a formal reporting
process to start a workers‘ compensation claim. Some accidents happen
away from the workplace, such as on a work related journey and working
from home. These will follow the same process as those occurring in the
workplace.
Compensation is payable for a personal injury sustained on journeys to and
from work. This is from the boundary of the land where the worker lives
and their place of employment.
How to claim workers’ compensation
When claiming workers‘ compensation we need to follow a formal process.
The essential steps to start a claim are:
The worker reports the illness or injury to the employer as soon
as possible and fills out the organisation‘s injury register and
required documentation.
The worker sees a doctor. The doctor will provide a WorkCover
NSW Medical Certificate. The worker fills out their part of the
Medical Certificate and the doctor completes their part.
If the injury or illness is likely to keep the worker away from
their normal duties for more than 12 weeks, or $7,500 medical
costs are incurred, then the (written) workers‘ compensation
claim documents must be lodged with the insurer. Otherwise the
Medical Certificate and the organisation‘s injury register may be
the only documentation required to commence a provisional
liability claim.
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If required, the worker obtains the workers‘ compensation claim
forms from the employer or insurer and completes them.
The required forms and medical certificate are returned to the
employer as soon as possible. The employer then passes these
documents onto the insurer within the nominated time frames set
down in the legislation.
Once provisional liability payments have started (within 7 days),
or where the claim was investigated and then accepted, the
employer or insurer must pass on weekly payments to the injured
worker as soon a practicable. Under provisional liability, these
payments can continue up to 12 weeks or $7,500 medical
expenses and are then re-assessed.
The employer also needs to continue forwarding any medical
expense documents, or further Medical Certificates, to the
insurer within 7 days of receiving them.
The steps in injury management and workers’ compensation
This flowchart from National Disability Services sets out the steps for a
workers‘ compensation claim or injury management:
http://www.nds.org.au/nsw/ohs/Disability%20Safe_Workers%20Compensat
ion%20Injury%20Reporting_FINAL.pdf
Who is entitled to claim workers’ compensation benefits?
Only workers (the organisation‘s employees) can claim workers‘
compensation benefits, not contractors or sub-contractors. Section 4 of the
Workers’ Compensation Act 1987 defines a worker as any person who
enters into a contract of service or apprenticeship. Workers can be full-time,
part-time or casual.
Many guidelines are used to determine who is a worker. Some are:
is there a contract of service between worker and employer?
how is the worker paid (payroll or billing)?
who supplies the workers‘ tools, material and equipment?
who has control over the worker?
who has power to hire and fire the worker?
is there an industry award or workplace agreement between the
employer and worker?
Sometimes an employer thinks they have contractors working for them,
however, in a court of law, these contractors may be deemed as employees
and therefore are entitled to workers‘ compensation.
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Injury management The philosophy behind injury management is early intervention. This means
starting to manage a worker‘s injury as soon as it occurs. The current
legislation requires early notification of any injury, and a timely response to
injury management.
Employers who work closely with their insurer and the injured worker can
influence the progress of a work related injury and help their employee
recover. The earlier a work related injury is treated and managed, the more
likely that the worker will recover quickly and have less time off work. The
main tool for injury management is providing suitable work duties that will
help workers remain useful, recover faster, be more motivated and keep a
positive attitude.
The benefits to an employer who offers suitable duties include:
lower workers‘ compensation premiums
increased productivity from the injured worker
the development of positive attitudes in the workplace
some degree of control over the worker‘s recovery.
The employer‘s Return to Work Program should help organise suitable
duties.
Definition
Injury management is the term used for all activities associated with
ensuring an early, safe and durable return to work of injured workers when
they have sustained an injury at work.
Section 43 and 45 of the Workplace Injury Management & Workers‘
Compensation Act 1998, places obligations on workers‘ compensation
insurers to develop and implement an injury management (IM) program.
This program integrates all aspects of injury management.
Under section 52 of the1998 Act, the employer must have a Return to Work
(RTW) program. This program has to be consistent with the insurer‘s IM
program. The employer‘s RTW program incorporates the policy and
procedures the employer, or the employer‘s RTW co-ordinator must follow
when a workplace injury has occurred.
The employer or the RTW co-ordinator develops a RTW plan for employees
returning after an injury/illness.
Under Section 45 of the1998 Act, the insurer must develop an IM plan for
every worker who sustains a ‗significant injury‘. This plan ensures the
worker receives prompt, appropriate medical management and a planned
and managed return to work.
A ‗significant injury‘ is one that keeps a worker away from their normal
duties for more than seven consecutive days.
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These programs mean that the insurer and employer must have an injury
management system before an injury or illness occurs.
What is an injury management program?
Under Section 43 and 45 of the Workplace Injury Management & Workers’
Compensation Act 1998, each insurer is legally required to have an injury
management program. The insurer must ensure that each employer is aware
of their IM program and their obligations under the program.
An IM program is a coordinated and managed process that integrates all
aspects of injury management including treatment, rehabilitation, retraining,
claims management and employment practices. Injury management is a
process of combining processes and procedures to achieve a ‗timely, safe
and durable return to work‘ of the injured worker.
The IM program includes the policies and procedures that stakeholders must
follow. The employer, insurer, injured worker and treating doctor all have
legal obligations in an IM program.
Injury management plans
Injury management plans are created for individual workers who have
sustained a significant injury at work.
An IM plan co-ordinates and manages the treatment, rehabilitation and
retraining of individual workers who have sustained a significant injury at
work. The purpose of this plan is to achieve a timely, safe and durable
return to work for injured workers.
The insurer will develop the IM plan after contacting the worker, the
employer and the treating doctor/s. The Act requires that the insurer
produce an IM plan within three days of initial notification.
The insurer is responsible for developing both IM programs and IM plans.
Who are the stakeholders in injury management?
We have already looked at the documentation needed for successful injury
management. Now we‘ll consider the stakeholders in the injury
management process. Who are they and when are they required?
The four main stakeholders are:
Insurer
As you have read above, the insurer must have an injury management (IM)
program. When the employer advises the insurer that a worker has suffered
an injury, the insurance company must initiate action within three working
days. This includes contacting the injured worker, the employer and the
nominated treating doctor/s.
The insurer must then:
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establish an IM plan for the worker
provide the employer and worker with information about the IM plan
keep the employer informed of the significant steps taken or proposed
under the plan.
Other duties of the insurer include:
assessing the claim
making a decision about liability, and paying compensation in
accordance with the 1987 and 1998 Acts
offering advice on injury and claims management to progress the
settlement of the claim.
Employer
The employer must participate and co-operate in establishing the IM plan
and comply with any employer‘s obligations under the plan.
The employer must also provide suitable employment (suitable duties) for a
worker who has been incapacitated and is unable to return to pre-injury
work. As discussed above, the employer must produce a written RTW plan
in consultation with the injured worker and the nominated treating doctor/s.
The employer’s RTW co-ordinator
The RTW co-ordinator is an employee of an organisation who has been
specifically trained in the injury management process. Alternatively, they
may be engaged specifically for that purpose. Employers have the option of
sharing arrangements for employing a RTW co-ordinator (contact
WorkCover for further information on RTW co-ordinators shared/engaged
arrangements).
Employers who have a workers‘ compensation basic tariff premium over
$50,000 per annum must, by law, employ a person who is trained as a RTW
co-ordinator. This person manages and co-ordinates the injured worker‘s
return to work to ensure it is safe and durable. This can include:
processing and managing workers‘ compensation claims
communicating with the insurer
communicating with the nominated treating doctor about suitable duties
or the injury management/return to work plan
communicating with an accredited rehabilitation provider when
necessary
communicating with the injured worker and their supervisor to identify
suitable duties and sort out problems.
Injured worker
An injured worker must:
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participate and co-operate in the establishing the IM plan
comply with their legal obligations under the plan
nominate a treating doctor who will agree to participate in developing
the IM and RTW plans
authorise the nominated treating doctor to provide relevant information
to the insurer or employer for the purpose of the plans
make all other reasonable efforts to return to work with their pre-injury
employer, as soon as possible.
Nominated treating doctor
The nominated treating doctor is the doctor chosen by the injured worker,
usually their GP, to manage their injury and assist in their return to work.
The nominated treating doctor will help develop the IM plan and the RTW
plan. In some cases an organisation will have an arrangement with a doctor
who is seen as the ‗company doctor‘. The doctor can be appointed by the
company (company doctor); however, the worker always retains the right to
nominate their own treating doctor.
The nominated treating doctor is the professional who completes the
WorkCover NSW Medical Certificate that starts the process of injury
management.
Other parties
Occasionally other parties may be involved in injury management. They
include:
Injury management consultant
An injury management consultant is a doctor authorised by WorkCover to
provide advice to insurers, employers and treating doctors. They are usually
engaged when there is a disagreement about the duties suitable for a worker
returning to work. These consultants are experienced in occupational injury
management, and have good communication and mediation skills.
Approved medical specialist
An approved medical specialist is a specialist doctor appointed by the
president of the Workers‘ Compensation Commission to provide opinions
about ongoing liability, employability and the level of permanent
impairment.
There are two types of Workers‘ Compensation Commission Approved
Medical Specialists:
those involved in helping to resolve general medical disputes about the
worker‘s condition, such as causation, treatment options or fitness for
employment
those involved in resolving disputes about the evaluation and degree of
permanent impairment.
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Accredited rehabilitation provider
An accredited rehabilitation provider is a person accredited by WorkCover
to provide injured workers with occupational rehabilitation services to assist
them in returning to work. Rehabilitation providers are staffed with
occupational health professionals such as occupational therapists,
physiotherapists, rehabilitation counsellors, psychologists and ergonomists.
They can be contracted at any time, and take over and co-ordinate an injured
workers‘ IM and RTW plans. They liaise with the treating doctor, the
insurer, the employer or the employer‘s RTW co-ordinator, to undertake
workplace assessments, find suitable duties and monitor the employee once
they are back at work. Regular meetings are held between the worker, the
employer and/or the RTW co-ordinator to monitor the injured worker‘s
progress.
Benefits to employees
There are many benefits for injured workers when they participate in injury
management, including:
ongoing job security - employees may feel they are to blame for their
injury and fear that their employer will dismiss them or take other
punitive action. A RTW plan, offering a graded return to pre-injury
duties, may help allay this fear.
return to normal pay and other incentives such as overtime and penalty
rates - workers who normally receive overtime allowances or penalty
rates may face financial hardship when they are receiving workers‘
compensation benefits, which do not carry such extras. A graded return
to work may relieve financial pressures and allow injured employees to
concentrate on their recovery.
return to familiar surroundings, particularly if it is in the pre-injury job -
a worker who is able to quickly return to their normal work environment
requires less adjustment.
retraining in other tasks required by the organisation - an injured worker
with new knowledge and skills gives both the employee and employer
more flexibility in work tasks.
Benefits to employers
As discussed previously, injury management programs minimise workers‘
compensation costs for the employer. Some other benefits of injury
management to the employer include:
supporting the injured worker and facilitating their recovery affects the
morale of the whole workforce
reduced need to use other workers to cover for the injured worker‘s
absence, resulting in less overtime and associated costs
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flexibility of human resources - if the injured worker is retrained they
can be used in areas other than their pre-injury job.
ensuring the investment in the employee to date is not lost
Return to work programs In the same way that insurers have legal obligations, so do employers. The
employer must develop a written Return to Work (RTW) program that is
consistent with their insurer‘s IM program.
Employers must display this RTW program at the workplace. This program
outlines the general procedures that will apply for all workers if they are
injured at work, and the steps taken to provide rehabilitation and suitable
duties.
The program must address a series of rehabilitation commitments and
procedures. These commitments and procedures include appointing a RTW
co-ordinator, where required, providing suitable duties, consultation
between the employer and the worker, identifying accredited rehabilitation
providers and a dispute resolution process. The RTW program must be
developed in accordance with WorkCover guidelines and must be developed
within 12 months of becoming an employer.
The return to work plan
It is the duty of the employer to prepare the RTW plan. When an accredited
rehabilitation provider has been contracted, then they may prepare the RTW
plan for the injured worker. The plan relies on information from the treating
doctor/s about activities (suitable duties) to provide the worker with a safe
and durable RTW plan.
It is extremely important that the employer‘s RTW program and RTW plans
comply with the guidelines set down by WorkCover.
More information on Sec 38 & 40 can be gained from WorkCover‘s Guide
to Injury Management and Workers‘ Compensation.
Workers‘ compensation and rehabilitation are very technical and complex
areas to manage. The RTW co-ordinator must handle each case on its own
merits, as every case will be different.
Who is the return to work co-ordinator?
The key person in the management of workplace injury management is the
RTW co-ordinator. Their involvement, from the notification of the injury to
its final outcome, has an enormous bearing on the well being of the injured
employee, the success of the programs and plans, and the profitability of the
organisation. The RTW co-ordinator must be trained according to
WorkCover‘s guidelines.
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The legal requirements for a return to work co-ordinator
In New South Wales, employers‘ Workers‘ Compensation premiums are
divided in two categories:
Category 1 is for large employers with a Basic Tariff Premium of more
than $50,000.00 per annum
Category 2 is for small employers with a Basic Tariff Premium of less
than $50,000.00 per annum.
If you are a Category 2 employer, you are not required to employ a
designated RTW co-ordinator.
On the other hand, if you are a Category 1 employer you must have a
designated RTW co-ordinator, and WorkCover must certify their
appointment.
The role of the return to work co-ordinator
The RTW co-ordinator plays the key role in managing injury management
and workers‘ compensation.
From the notification of an injury, the RTW co-ordinator should set in place
a series of accountable events, namely:
communicating with the treating doctor/hospital
communicating with the insurer
developing a RTW plan outlining suitable duties
communicating with the injured employee‘s family
completing all necessary documentation
communicating with the injured employee
communicating with accredited rehabilitation providers
communicating with relevant unions
regularly monitoring the progress of RTW plans
communicating with internal employees (supervisors/managers)
regularly monitoring the costs of wages and treatment.
When the worker is away from normal duties for more than seven days, the
worker must nominate a treating doctor, who will co-ordinate all aspects of
treatment and RTW management. The RTW co-ordinator will liaise with
the nominated treating doctor to determine the worker‘s fitness for work and
to discuss suitable duties. The doctor will specify any restrictions about the
hours worked and/or activities the worker can perform. The RTW co-
ordinator develops a RTW plan based on the instructions of the nominated
treating doctor. The worker and their supervisor must agree with the RTW
plan, so that everyone is clear about the duties the injured worker is required
to do.
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If a worker unreasonably refuses to co-operate with their IM plan and their
employer‘s RTW plan, then the insurance company may reduce or stop their
weekly benefits.
We‘re now going to investigate the advantages in having a well functioning
injury management program, and how an organisation can prevent injuries
and accidents happening in the first place.
Confidentiality of injury management information
The employer and the RTW co-ordinator must manage all RTW plans in a
professional and confidential manner. They must ensure that information
regarding a worker‘s illness/injury is obtained with the worker‘s written
consent. The WorkCover Medical Certificate contains a section that gives
such consent for the nominated treating doctor to discuss injury
management with relevant parties.
All information is to be kept in strict confidence and should be stored
securely. Access to these records should be limited to personnel who have a
genuine need to know and only disclosed with the injured worker‘s explicit
consent.
Internal resources for return to work co-ordinator
Internal resources include:
the injured employee‘s immediate supervisor (or proposed supervisor in
the new position on suitable duties) who can suggest suitable duties for
the RTW plan
workplace engineers or maintenance employees who can design and/or
redesign work stations and any relevant equipment
health professionals such as OH physicians and the workplace nurse
who can help the employee meet their objectives; they can co-operate
with accredited rehabilitation providers or become part of the case
management team
OHS committee members and representatives who can also help select
suitable duties and communicate with the work force
union representatives who can communicate with members and resolve
disputes regarding duties allocation.
External resources for return to work Co-ordinator
There are a number of external resources available to the RTW Co-
ordinator. They include:
Accredited rehabilitation providers are the most prominent grouping in
managing ‗significant injury‘ cases. Usually they are multi-disciplinary
teams in health and allied fields such as:
OH physicians
OH nurses
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physiotherapists
occupational therapists
psychologists
ergonomists
hygienists
The RTW co-ordinator or the insurer can engage a rehabilitation
provider or the injured employee may choose their own provider. Their
role is to assess the injured employee and the work site. From their
assessment they can then develop a plan for the RTW of the injured
employee.
Occupational rehabilitation service providers must meet certain
standards for accreditation and their activities are monitored.
Employers must nominate accredited providers as part of their RTW
program. They must help them develop expert knowledge of the
workplace, the current rehabilitation procedures, and capacity to
provide appropriate duties for an injured worker.
Employers may discuss referral to a rehabilitation provider with their
insurer or they may make direct referrals for assessment.
nominated treating doctor - can influence the early return to work of an
injured employee. It is important that the lines of communication are
kept open at all times.
insurer - manages the workers‘ compensation portfolio on behalf of the
employer. Their role is to advise and assist employers in establishing a
Workplace Injury Program, and ensuring employers are aware of the
program‘s requirements. They also vet the progress of the claim, and
agree to pay for services outlined on the injury management plan.
interpreter services - for employees of culturally and linguistically
diverse (CALD) backgrounds, these services are very important to assist
injured employees with their rights and obligations in workers‘
compensation and rehabilitation. It is not advisable to use family
members, friends or fellow employees as interpreters.
WorkCover Authority - provides a range of advice and programs in
relation to workers‘ compensation and rehabilitation, particularly setting
guidelines and overseeing the management of claims, including training
and employment programs to help seriously injured workers who need
additional assistance to return to work. These include:
o work trials, which are short periods of work experience with
a host employer, to help the injured worker develop work
skills and/or upgrade their physical fitness in a suitable work
environment
o formal retraining which is required by an injured worker
when they cannot return to their previous job, and they do not
have other marketable skills to find suitable employment
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o financial assistance towards workplace, equipment or
modifications to assist an injured worker to resume their pre-
injury employment.
Rehabilitation providers usually apply for WorkCover assistance on behalf
of an injured worker. However, employers can apply for funding on behalf
of an injured worker to meet formal retraining costs and any workplace aids,
equipment or modifications. They must have relevant information to
support the request.
For example, under WorkCover‘s previous Job Cover Placement Program, a
new employer may have been eligible for a range of incentives when
employing a worker who has had a work-related injury. These incentives
included:
reimbursement of wages - employers received a subsidy of up to $300
per week for 12 weeks from their insurer to offset the cost of hiring and
training the new worker
premium exemption - wages paid to the new worker for the first 12
months of their employment were excluded from the calculation of the
employer‘s premium
second injury costs - if the worker suffered a work-related aggravation
or recurrence of their existing injury within the first 12 months of
employment, the employer was protected from the costs of the workers‘
compensation claim, and the employer‘s premium did not increase as a
result of the claim.
Incentive schemes are available, and change from year to year, so it can be
of benefit for an organisation to research these schemes.
The return to work process
All employees should know that if they are injured in the course of their
work, rehabilitation is part of their workers‘ compensation entitlement.
Management should advertise this through a Return to Work program, and
display a summary of the Workplace Injury Management and Workers’
Compensation Act in strategic locations at the workplace.
There are incentives in workers‘ compensation entitlements to encourage
employees to participate in RTW programs. If the employee chooses not to
participate in the RTW program, they may receive lower weekly benefits
and risk foregoing future compensation entitlements.
A RTW plan is most successful when the process starts as soon as possible
after an injury. The longer an injured worker has to wait for appropriate
rehabilitation, the less likely it is to be effective.
As covered previously in this topic, employers have strict timeframes for
reporting serious incidents and incidents to their insurer and/or WorkCover.
The employer must participate and co-operate with the insurer in developing
an injury management plan for every worker with a significant injury. This
plan will outline all the RTW activities and treatment services for an injured
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worker. The insurer is responsible for contacting the worker, employer and
treating doctor (if required) within three days of notification for all workers
with significant injuries. The employer and the worker must comply with
obligations imposed on them under the injury management plan - the insurer
will tell them their obligations and potential penalties.
The worksite, not the home, is usually the best environment to help injured
workers recover fully, along with medical management. The RTW co-
ordinator and provider, when used, should continually monitor and review
the progress of the injured employees according to the plan. They can then
adjust the plan in consultation with the injured employee and the treating
doctor. Monitoring and reviewing will continue until case closure, when
they have achieved the plan‘s goals.
Not every RTW plan will have a successful outcome; depending on the
circumstances some cases will be closed and a new one started. For
example, an employee has surgery after an injury and returns to work on
rehabilitation, but needs further surgery due to complications from the first
operation. A commitment to return to work means exploring every avenue
for a successful result to the satisfaction of the injured employee, RTW co-
ordinator, insurer, providers and other health professionals.
Dispute resolution
Internal methods of resolving disputes
We can resolve disputes internally in the same way that we manage
industrial relations disputes. If an employee on a RTW plan is concerned
about some part of their plan, they will first contact their supervisor. If they
cannot resolve the issue, they can refer the matter to the RTW co-ordinator.
If the co-ordinator cannot resolve the issue by consultation with the
employee, they might refer to the insurer. All insurers have injury
management staff who can assist the worker and employer with disputes or
problems. The insurer can also clarify administrative matters such as
weekly wages benefits.
It is important to try to resolve disputes internally before seeking outside
help. We can call upon interpreters, treating doctors, rehabilitation
providers, unions and, of course, the RTW co-ordinator, who is the
keystone.
It is important to discuss issues and consult with only relevant parties, as
involving fellow employees and managers may be intimidating or
threatening.
In resolving disputes, the RTW co-ordinator should carefully choose their
words and terminology, and make sure they give clear explanations to avoid
misunderstandings.
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External methods of resolving disputes
Injury management consultants - may be brought in when there is
disagreement over the suitability of selected duties offered by the employer.
These consultants are medical practitioners approved by the Workers‘
Compensation Advisory Council specifically for the purpose of reviewing a
worker‘s fitness for employment and the availability of suitable employment
at the workplace.
An injury management consultant‘s role is consultative, and not part of the
medical-legal process. Before reporting their findings they will contact the
worker‘s nominated treating doctor to discuss the situation, with the aim of
reaching an agreed course of action.
The treating doctor needs to be involved in the process, as their medical
certificate affects the insurer‘s decision about benefits payable. Restrictions
on the worker‘s activity will influence the suitable duties nominated in the
return to work plan.
Approved medical specialist - approved by the Workers‘ Compensation
Advisory Council to give an unbiased opinion when there are disagreements
on medical issues, including whether selected duties offered by an employer
are suitable or not. The worker, the employer or the insurer can use the
opinion of an Approved Medical Specialist to take action under the
Workers‘ Compensation Act 1998 in respect of payments of workers‘
compensation benefits.
Workers’ Compensation Commission - must sometimes make the final
decision in a dispute. This body replaced the Compensation Court in
January 2002, and is an independent statutory tribunal within the justice
system in New South Wales. The Commission provides a transparent,
flexible and independent forum for the appropriate, fair, just, timely and cost
effective resolution of workers‘ compensation disputes. It uses a system of
non-adversarial dispute resolution to directly involve the parties in an
accountable and accessible process.
The Workers‘ Compensation Commission has a President (who must be a
judge), two Deputy Presidents, a Registrar and Arbitrators, supported by
Approved Medical Specialists, who assess medical disputes for the
Commission, and other employees. The Arbitrators are legally qualified
and/or highly experienced in workplace injury management and are
responsible for trying to bring the parties to an agreed resolution. If this
does not happen, the Arbitrator then determines the case. The two Deputy
Presidents hear appeals from Arbitrators‘ decisions. The President also
hears appeals from Arbitrators‘ decisions and additionally determines points
of law.
For more information about the NSW Workers‘ Compensation Commission
visit their website www.wcc.nsw.gov.au
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Prevention and workers’ compensation
Intervention
As discussed above, intervention is one of the best strategies to identify
hazards that have the potential to harm. For example, consider the
employee with the sore arm. They may have complained to their supervisor
that their work was causing them discomfort. They may have even reported
their pain/discomfort to the first aid attendant and received nothing more
than an arm rub and a pill for pain relief.
Continual reports of minor incidents, pain and discomfort are early warning
signs that something is wrong in the workplace. If these signals are
continually ignored, the employee may think that the organisation doesn‘t
care about its workforce or about OHS. The longer the problem is ignored
the greater the chance of alienating the employee, to the point where they
are absent from work.
Good management practice ensures:
the problem is identified - in this case, repetitive movement and its cause
assessing the likelihood and potential of risk of further injury
control strategies to eliminate or reduce the risk.
If an employee is complaining about a sore arm, we might look at work
organisation such as changing the workstation layout and rotating the
employees on the task. Poor identification, reporting and recording systems
and a lack of training and education of the workforce may ultimately lead to
increased claims for workers‘ compensation. When an organisation reacts
to workers‘ compensation claims, it may head towards crisis management
on two fronts: coping with the costs of their failure of ‗duty of care‘, and
coping with the losses associated with workplace injury management and
workers‘ compensation.
We have studied the impact of workplace injuries on workers‘ compensation
costs. Many employers have found that neglecting their OHS
responsibilities has resulted in increased workers‘ compensation premiums.
In recent years, the NSW Government has worked closely with stakeholders
in the workers‘ compensation scheme to evaluate additional incentives to
adopting appropriate OHS and injury management systems.
Improvement to injury management systems
When an organisation measures performance, it can discover if it is:
proceeding to plan
working within given guidelines
collecting and recording relevant data
working within control parameters
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being effective in managing injuries and claims.
It is important to monitor, review and audit injury and incident
documentation in a timely manner. This should occur regularly and
systematically so that any changes are identified.
For instance, many organisations hold quarterly reviews with their fund
managers to discuss the status of the listed workers‘ compensation claims.
At these scheduled meetings, both parties exchange information on methods
to manage respective claims. New strategies can help improve the
management of a particular claim. An insurer may suggest at a meeting that
the employer use a ‗company‘ doctor, that is, a doctor who is familiar with
the organisation‘s work practices. This would mean that the injured worker
would be immediately examined, on site if necessary, rather than having to
find their own doctor. Note that the employer has the right to send an
injured employee to a ‗company‘ doctor, and the injured employee
maintains their right to attend their own doctor.
When reviewing the use of workplace accident report forms we must ask:
who completes the report?
who receives the report?
how will the report be used to develop remedial action to prevent further
accidents?
how will we ensure that remedial action is taken?
We can review the system to determine ways to make it more efficient.
Spot audits are sometimes used to ensure that the correct steps are followed.
These audits can pinpoint anomalies that we can address to improve the
system.
To summarise, legislation imposes certain time frames for reporting
workplace incidents and illnesses, and also imposes certain requirements
and timeframes for workers‘ compensation insurers themselves. Employers
and insurers must work together to implement injury management strategies,
according to WorkCover‘s guidelines and legislation. Any internal audit
should check compliance with these requirements.