HRM Business Studies

7/30/2019 HRM Business Studies

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o Human resource management is the management of the relationship between an employerand employee in order to achieve the businesses strategic roles.

o Strategic approach to managing employees: Add value to business performance through an effective workforce Use strategies to retain, reward and motivate skilled employeesThe role of the human resource manager is to decide how the employment relationship

will be best managed so that it is cost-effective, achieves the businesss goals andcontributes to the bottom line.

The role of the human resource function is to link individual performance withcorporate strategy.

The function of the human resource management teams depends on:- Business size- Nature of business- The level of industrial action and unionisation in the industry/businesso Human resource management assists with managing staff and building a culture that is

aligned with the business goals

Outsourcing refers to the transfer of a business function to an external service provider.Businesses turn to outsourcing to:


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Outsourcing allows firms to focus on their core business functions. Outsourcing can also be used to review business practices and implement new strategies

to transform the business using consultants with no agenda.

Mainly used for processing functions which are repetitive and easily measured results. Risks include cost overruns, difficulty coordinating activities and monitoring quality.

Contractor: a person or company that undertakes a contract to provide materials or labor toperform a service or do a job.

Subcontractor: a business or person that carries out work for a company as part of a largerproject.

Form of outsourcing Features

Labourhire/employment

agency

Workers leased to host company Superannuation, insurance and workers compensation

managed by employment agencyDependent

contractors

Workers are dependent contractors where theemployment agency acts as a middle man

Dont have control over their working procedures and areprevented from subcontracting their work and workingfor multiple clients

Independent

contractors

Sole traders operate their own business and set ownterms and conditions

Engaged by a client under a commercial contract toperform the service without the legal status of anemployee

Make own superannuation, insurance and workerscompensation agreements

Outsourced suppliers Supply goods and services to a range of businesses Are owner managers who supervise their own employees Control their own work procedures and can work for

multiple clients Manage superannuation, insurance and workers

compensation arrangements for their employees

o Avoids the need to employ additional staff.o Provides businesses with flexibility - non-permanent arrangemento May also be used for fresh ideas and perspectives.o Negatives: expertise/internal capabilities might be lost through the outsourcing of

functions, problem solving skills diminished


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o Businesses are under pressure from global competition so use offshore contractorso Also used to get more acquainted with overseas market before expansion.o 2 forms of outsourcing:

Process outsourcing: easily measured and documented work e.g. customercomplaints, payroll management

Project outsourcing: found in human resources, design, research. Involvesgreater use of intellectual property and strategies, business knowledge,

operates in a longer time frame difficult to measure, cant predict level ofquality: More risk.

Risks of global outsourcing:o Difficulty controlling quality and reliability of serviceo Cultural differences such as language issues impacts customer serviceo Security issues such as sharing of confidential company information and client poachingo Dealing with foreign legal systemso High labour turnover esp. call centres

Advantages:

Improve quality Save costs Expand capacity/flexibility Access experts Help in managing complex issues

Disadvantages:

Quality may fall Hidden costs Costs may increase Reduce business learning through reliance on experts Loss of security and confidentiality of information Less integrated organisation


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- Constantly dealing with human resources management- Negotiate agreements and resolve disputes at the individual workplace.- Employers have gained more power to make agreements relevant to the individual

workplace enterprise

- Practice of moving frequently from one job to another is becoming more common.Businesses that want to keep and motivated skilled employees need to make more of aneffort: i.e. training plants, rewards, and greater employee involvement.

- Aging populating structure means future labour shortages: government is consideringextending working life of population


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- Act on behalf of employers in collective bargaining sessions and before industrial tribunals,courts, commissions

- Provide advice on issues such as:o Awardso Unfair dismissalso Discrimination issues

- Negotiate agreements- Lobby governments with the views of employers

- Organisations that represent employees in efforts to improve wages and the workingconditions

- Have an official bargaining position in the making of industrial agreements- Now expanding range of services for more members i.e. free/discounted legal service,

superannuation schemes, income protection against illness or accidents

- Legislator: Government makes laws that provide the legal framework for industrialrelations.

- Employer: Federal and state governments employ almost one third of Australian workers.Have introduced practices such as maternity leave that are eventually adopted in privatesector

- Responsible economic manager: ensures non-inflationary stable economic growth and ahigh standard of living for all Australians

- Governments are trying to reduce the powers of industrial tribunals and encouragebargaining in the workplace.


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- Created a national system that simplified industrial relations so employers werent forced tonegotiate under multiple jurisdictions.

Statuteso Statutes are laws made by federal and state parliamentsRequire employers to:

o Meet OH&S requirementso Maintain workers compensation insuranceo Provide employees with superannuation, annual and long service leaveo Make sure workplace is free from discrimination

Some of these laws:

Sex discrimination act 1984 Industrial relations reform act 1993 improved safety net provisions for employees,

improved arrangements for direct bargaining and protection against unfair dismissal

FAIR WORK ACT 2009

o Gives employers and employees the same workplace rights/responsibilitiesregardless of what state they are in

o New framework includes: 10 national employment standards provide protection to employees Annual national wage case sets minimum wage Protection from unfair dismissal Modern awards (industry or occupation based award) 122 modern awards replace thousands of previous state and federal ones

Industrial tribunals and courtso Enforce laws established by governmentso Fair work Australia makes sure the bargaining process/industrial action occurs in

accordance with the lawo Its main roles are:

Settling disputes Supervising the making of agreement + awards Award simplification Handling unfair dismissal cases

Federal Court Handles cases relating to industrial action and breaches of awards and orders by

tribunals Imposes penalties relating to discrimination under industrial and human rights

legislation


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Voters are most interested in their employment Global competition increases the pressure on businesses so they are using contractors -

leads to structural unemployment in the communities left behind

Community demands for safety and wellbeing and elimination of discrimination at workhave increased.

o Legislation covers: Employment contracts and agreements Dispute settling methods Human rights Employee welfare OH&S legislation and superannuation funds

o Changing community expectations on social justice is reflected in legislation andwork practices

o Employment contract is a legally binding agreement between employer and employee

key featuresof an

employmentcontract

superannuation

duties

hours

locations

bonuses

salary/wages


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Employer Obligations

o Paymentof income and expenses incurred as a result of performing the worko Meeting requirements of industrial relations legislation:

Ensuring workers are protected against discrimination and unfair dismissalo Duty of care: Employers are legally bound under OH&S act.

Employee obligations

o Obey lawful and reasonable commands made by the employer. Reasonable = notdangerous or illegal

o Use care and skill in the performance of their work activitieso Act in good faithif you switch jobs dont go telling the other employer confidential

information

o Base rate of pay for ordinary hours determined by: Award or agreement the employee is on OR the national minimum wage

o Set by Fair Work Australia panel. When determining the minimum wage, the followingfactors must be taken into consideration: Economy performance Living standards and needs of low income earners Equal pay for work of equal or comparable value


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o Awards are legally binding documents about terms and conditions of employees for anindustry or occupation Minimum wages Redundancy entitlements Flexible working arrangements Hours of work Rest breaks SuperannuationMaking awards:

o Collective agreements made at a workplace level between an employer and groups ofemployees about terms and conditions of employment

o Alternative to modern award Single enterprise agreement: made by a single employer and a group of employees Multi-enterprise agreement: made between 2 or more employers and groups of

their employees. This occurs if they share funding, operate collaboratively and have acommon regulatory system. E.g. group of hospitals

Greenfields agreement: Enterprise agreements for a business thatdoesnt employanyone yet. Made with one or more relevant unions.


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Enterprise agreements cover:

Rates of pay Overtime Hours of work Personal and annual leave Any matters related to the relationship between employer and employee How the agreement will operate and an expiry date

o Must be approved by Fair Work Australia who must be satisfied that the agreement: Everyone involved agrees with it Better off compared with the current modern award Does not include any unlawful terms Includes a dispute settlement procedure Employees were able to be represented by a bargaining representative during the

negotiation of an agreement

Individual common law employment contracts

When an employer and an employee negotiate a contract covering pay andconditions Cover employees not on federal agreements or state agreements More common in non-union enterprises property and business services

professional/managerial level

Independent contractors

Undertake work for others butarent employees Undertake a contract, service or project for another business and work for multiple

clients Tend to have a set term or specific project for their contract Control their own work, superannuation, tax, insurances and leave

Contracts for casual work

Casual employees are in employment that is short term, irregular, uncertain Paid on hourly basis Casual workers reduce costs for recruitment dismissals and other on-costs (sick,

holiday leave, superannuation etc) Fluctuating income, no training/promotions, less committed to work

Part-time contracts

29% employees are part-time this can be attributed to GFC - reducing hours Have continuing employment contract and work less than 35 hours per week Have access to employee entitlements but on a pro rata basis (in proportion to how

much they work compared to full time workers)

Employers must ensure employee welfare: By providing supervision in their work By maintaining the site in a safe condition


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By ensuring the goods being produced will not cause injuries or damage health^ Can be fined if they dont

WorkCover inspectors can inspect the workplace and issue improvement/prohibitionnotices

WorkCover must be notified of any deaths or serious injuries in the workplace, and anyplans to carry out dangerous work

Workers compensation

All employers must: Take out insurance Establish w/ insurer and doctor an injury management plan and return to work

plan for all injured workers Premiums are linked to the frequency and size of claims

Compensation is paid for: Loss of wages for time off work Medical expenses and the cost of associated travel and modifications to home Permanent impairment of a part of the body

Not payable ifits employees own faultCommon law redress

Employees can take action against an employer when the employer or another employee has beennegligent if the employee has a permanent body impairment of more than 15%. These claims areheard in court.

Discrimination occurs when a policy or practice disadvantages a person because of apersonal characteristic that has nothing to do with their work performance

Businesses can eliminate discrimination by: Having policies and code of conduct to prevent discrimination Training managers and staff in cultural diversity issues and ways to prevent or deal with

discrimination Appointing grievance officer and having specific procedures Regularly evaluating effectiveness of policies, workplace culture and action taken to resolve

complaints

EQUAL EMPLOYMENT OPPORTUNITY

Ensures best person for job is chosen and promotes positive work environment Level of equity is reflected in how many women/minority groups have access to different

positions in business and the grievances undertaken on the grounds of discrimination Employers with more than 100 employees must report annually on equal opportunity

programs they develop in consultation with employees and progress achieved.

Strategies to improve equity:o Developing a policy statement and informing all staff that a program has been

initiatedo Monitor and evaluate employment statistics, policies and industrial agreementso Keeping all staff informed of opportunities within the business


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The economic cycle

Demand for labour determined by demand for goods and services Labour shortages = higher wages Unions may use bargaining power to demand significant wage increases, which may then

put upward pressure on costs and prices, creating inflation.

Structural change Refers to the change in the nature and pattern of a production of goods and services within

an economy i.e. level of services compared to other sectors Growth leads to emphasis on recruitment, selection and remuneration industrial issues Aging population - flexible staffing arrangements

Globalisation

o Globalisation has increased the level of international competitiono Businesses have to compete with subsidiaries of TNCs need to outsource non-core

functions or subcontract in order to compete effectivelyo There is a need to attract and retain good core staff and continually improveo Training in the management of a multicultural workforce with differing approaches to

authority and the role of groups/individuals is increasing.

o Technological change = improvements in productivity, communication and competitiono Creates new jobs, makes others redundanto Businesses are restructuring as networks offshore and using virtual teams using video

technologyo Businesses can operate anywhere, any time and access employees at homeo Increases need for training programs and protocols to make sure balance is maintained

Growth in part time and casual work, some workers want flexibility and balance, for others it is aresult of the GFC

Career flexibility and job mobility

o 44% have been with current employer for more than 5 yrso Need new skills and training for new jobso Employees leave full-time positions after developing special skills to become

independent contractors

Rising female participation rate

o Because of improvements in parental and carers leave conditions and better work lifebalance - 59% in aus

Ageing of the workforce

o Will lead to a shortage of skillso Flexible working arrangements job share, part time are important to keep workforceo Businesses need to implement HRM strategies to transfer skills to remaining workforce


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o Removing discrimination of older workers and providing opportunities to update skillsand offer health programs

o OH&S, regular wage increases, performance bonuses, fringe benefits, leave andsuperannuation benefits

o Companies who excessively outsource and casualise workforce are challenged by unionso Casualised workers suffer from higher levels of stress due to difficulties purchasing assets

and having an unstable incomeo Blurring of home and work life because of technologyo Lack of support for carers in the community - governments have responded by

implementing legislation to provide carers leave, job share, part time and flexible workinghours

o Australians are concerned about:o Income inequality: between male and female and how growth in wages is behind

profit growth.o Casualisation of the workforceo Lack ofwork life balance

CSR refers to a business decision to take an ethical approach to their operations to benefitthe wider community

o Lack of ethics and CSR can lead to poor morale, low productivity and industrial disputeso Business depends on community as a source of customers, resources and staffo Customers will eventually find out which businesses are acting ethicallyo Ethical framework should be developed:

o Code of conduct and Code of ethicso Staff retention and absenteeism rates improve when staff feel valuedo ^ costs are reduced and business performance is enhancedo Best practice employees enjoy regular publicityo Legal compliance, OHS costs etc reducedo Improved performance

Working conditions

o Providing training opportunitieso Offering equitable rewards and benefits subject to clear criteriao Flexible working hours and promoting work life balanceo Staff collaborationo Businesses under pressure to save on labour costs reflected in growth of precarious

employment part time and casual.o Concerns about worker exploitation: demonstrate CSR by undertaking factory audits and

working with agencies to support ethical practices in local and offshore operationso E.g. businesses in clothing industry seek accreditation from agencies like ethical

clothing Australia


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Recruitment, selection and placemento Recruitment is the process of attracting the right quantity/quality of staff to apply for

employment vacancieso Employee selection involves using info about applicants to choose the best employeeo Need to give applicants a realistic understanding of their jobo Use recruitment/selection strategies that are aligned with business needs e.g. if

business wants to increase gender equity it needs to put more females on theselection panel and have equitable benefit packages, training and promotion

opportunities

Enhances employee skills through:o Further professional learningo Mentoring or coachingo Performance appraisal and management

Induction

Introduces employees to job, business, co-workers

Gives employees positive attitude to job Builds employee confidence Explains the major safety policies Helps establish good working relationships

Training

Training is a long term change in employee skills, knowledge and behaviour to improvework performance

Essential to overcome business weakness and maintain staff commitment Helps a business adapt to change and stay ahead of competition

A training program should:1. Assess needs of individual, job and business2. Determine the goals of the training program for the business, job and individual.3. Consider internal and external influences

Internal: employee attitudes to training, the resources available to operate the program andstaffing.External: any new research on relevant training issues and government programs orsupport available for training

4. Determine the process of the training program what will actually be involved (where,whatstaff, how its gonna be implemented)

5. Evaluate training program Tests/Surveys Performance appraisal Benchmarking of key indicators like defects, customer complaints and accident rates


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Organisational development

Team and project based structures are common This allows employees to develop shared ideas and solutions to problems This structure reduces promotion opportunities so HR managers need to find other ways

to motivate staff:o Job enlargement: increasing the breadth of tasks in a jobo Job Rotation: multiskilling moving staff from one task to anothero Job enrichment: increasing responsibilities of an employeeo Self management teams roles and decisions determined by their memberso Mentoring and coaching experienced staff member provides advice and support

to developing employees

Mentoring Coaching

Focus Individual life developmentpreparing them for future roles

Performance enhancement by buildingskills, overcoming weaknesses andresolving specific issues

Role Personal relationship, like a friend.Guides individual by sharing adviceand experience.

Specific to employees job, assistshim/her in setting goals and achievingthem.

Function Provides advice that may assist inimproving the way employeemanages issues.

Shares skills, knowledge and techniquesrelevant to employee needs.

Structure Unstructured More structured

Performance appraisal

A process of assessing the performance of an employee against criteria Evaluates strengths, weakness and opportunities for development Used to see if the employee deserves to be promoted and their value to the business Involves 4 main objectives:

o Providesfeedbackto employeeso Acts as a measurement against which promotion and pay rises are determinedo Helps businesses monitor their employee selectiono Identifies training and developmentneeds

Performance appraisal tool Advantages Disadvantages

Behaviour observation scales supervisor observes andrecords evidence of behaviourand performance over time

Allows ongoing collection ofrange of evidenceProvides feedback easily

May focus too much onnegativesOpen to personalityclashes/bias

Interview Can be flexible and detailed

Allows for questions anddiscussion

Employee may struggle to be

open b/c employer can beintimidating

Management by objectivesobjectives set for employee andrewards awarded according toperformance

Rewards achievementGoal setting motivatesemployees to work moreefficiently

Rating criteria may be set toohigh or too lowOpen discussion can be limitedas supervisor has rewardpower


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Maintenance of staff involves looking after their wellbeing, effective communication andcomplying with responsibilities.

Maximise staff wellbeing by getting them to participate in decision making process Support work life balance and offer flexible job roles job sharing, multiskilling, part time

Communication and workplace culture

Poor communication reflected in conflict and turnover rates = negative workplace culture Methods of communication:

o Team meetings between managers, supervisors and employeeso Suggestion boxes, surveys, staff newsletters, social functions, emails

Recognition of staff achievements, trust and constructive criticism importantEmployee participation

Employees are trained to make on the spot decisions, solve problems or provide incentives,to retain customers

Improves communication, empowers employees and develops their commitment toimproving efficiency

Effective participation is fostered through regular team meetings to discuss customerfeedback and company issues build a sense of shared purpose and company identity

Participation strategy Explanation

Participation throughmembership on the boardof directors

Allows an employee to represent staff on the board however thiscould lead to employee becoming alienated from other employees.

Participation throughownership

Employees buy shares = increased commitment however this couldlead to a conflict of interest as ownership and participation involvedifferent objectives.

Joint consultative

committees.

Formally established groups consisting of employees and

management representatives. Provide management with the viewsof employees on a range of issues, enhancing communication andimproving productivity.

Participation in collectivebargaining.

I.e. when developing an enterprise agreement.Allows all parties to make an effort to resolve issues throughreconciliation and conciliation learn from each other andnegotiate outcomes beneficial for everyone.

Benefits

Flexible working arrangements Paid training opportunities Travel allowances Health insurance Company car

Businesses need to look at the value of these benefits in terms of staff retention and workplaceculture because they are expensive and may attract a FBT fringe benefits tax (tax paid on certainbenefits provided to employees).


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Flexible and family friendly work arrangements

Important to attract and retain talented staff who want a work life balance. Also creates apositive image of the firm in the community.

Typical flexible working conditions include:

Flexible remuneration optionsFlexible working hoursJob sharingWork-from-home arrangementsFamily leave

Family unfriendly workplace costs:

AbsenteeismHigher turnoverLower morale because of increased stressPotential for court action failure to comply with EEO and unfair dismissal legislation

Legal compliance and corporate social responsibility

Bullying and sexual harassment cause high levels of staff stress, absenteeism, turnover, andlow productivity and morale.

Human resource managers need to implement a range of strategies in health and safety,anti-discrimination and conflict resolution.

Problems that arise over misconduct in employment relationships, particularlyregarding sexual harassment, bullying and discrimination, can be very costly anddamaging to the business and destroy individuals.

Bullying can be minimised by:

Inducting and training employees in company policy, procedures to deal with bullying, andconsequences

Providing training to increase cultural awareness Having mentoring or buddy systems for new and young employees

Voluntary: resignation, relocation, voluntary redundancy or retirement. Involuntary: contract expiry, retrenchment or dismissal.

To avoid claims of discrimination, involuntary separation must be managed in compliance withlegislation.Acceptable situations for redundancy:

Closure of the workplace site Completion of the project on which the employee worked Lack of contracts or orders for work

Documented evidence required e.g. The companys financial statements.

When determining who will be retrenched you need to consider:

Length of service Standard of performance


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Dismissal

Summary dismissal is an instant form of dismissal that applies to employees involved inserious misconduct, such as theft.

Fair Work Australia will determine whether the reasons are well founded, and whether theemployer has investigated/allowed the employee to respond to the allegations.

In recent years, businesses have tried to reduce costs through reducing staff numbers,flattening management structures and using more technology contributes to industrialdisputes and unfair dismissal claims.

In the case of poor performance, businesses are required to:

Give employees a written warning Give them advice and support so they have the opportunity to improve

In the case of redundancy, the employer may be asked to show that:

There was no appropriate work available within the organization The employee was consulted about alternative redeployment options in the business.

Unfair dismissal

Documentation of processes undertaken is also required to avoid claims ofunfair dismissal. An unfair dismissal occurs where an employee makes an unfair dismissal remedy

application and Fair Work Australia finds that:

The dismissal was harsh, unjust or unreasonable Was not a case of genuine redundancy

Employees are able to claim unfair dismissal if:

The business has more than 15 employees who have been employed for more than sixmonths.

The processes for dismissal have not been carried out correctly.The remedy for a claim is either reinstatement or max 6 months pay compensation.An employer has the right toobjectto a claim on the basis that it is:

Not submitted in an appropriate time frame Not reasonably likely to succeed That the person making the claim is not eligible.

Many businesses avoid these risks by hiring casuals and contractors. Other businesses included jobdescriptions, probation periods and measurable targets to allow for dismissal of staff in their jobcontracts.They are keen to avoid unfair dismissal claims, as they create negative publicity and low morale.For many it is easier to settle the claim, regardless of whether or not it is valid.


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1. Authoritative approach focuses on planning, organising and controlling.2. The behavioural approach sees management as leading, motivating and communicating

democratic leadership style.3. The contingency approach uses the most appropriate approach depending on the situation.

Leadership style When the style works best

Directive

Emphasis on immediatecompliance from

employees

Dictatorial, coercive

In a crisis, to kick start a turnaround or with problem employees

Visionary

Emphasis on long termvision and leadership

Authoritative, bigpicture

When changes require a new vision, or when clear direction is needed

Affiliative

Emphasis on thecreation of harmony

To build consensus or to get input from employees

Participative Democratic Emphasis on group

consensus and

generating new ideas

To build consensus or to get input from employees

Job design

Job design is designing what an employee specifically has to do in the job and how it will interactwith other jobs and employees.

^ Dependent on job analysis analysis of all the tasks, responsibilities, personal attributes neededin a position.

Job design involves a number of steps:1. Analyse the existing work situation2. Identify technical, managerial and administrative tasks to be performed3. Decide how the job will fit in with the work group4. Consultwith key stakeholders and modify as required5. Implement changes slowly, provide training, use feedback to modify6. Assess and review progress, discuss with employees.

Job design methods

Jobs can be flexibly shaped to fit the changing needs of the business

Job design is also a useful method in developing the knowledge and leadership skills ofemployees identified for future promotion in succession planning.

Succession planning is more efficient when employees are interdependent and cross- skilledthrough job rotation, job enrichment, job enlargement, semi-autonomous work groups and flexiblework structures.

Specialisation in job design involves jobs being broken down into specialist skills areas in order toimprove knowledge and skills.


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Job specialisation tends to be more repetitious and boring, and there is less social interaction orsharing of ideas with other employees, and often no identifiable end product.

The most visible aspect is the job advertisement. Recruiting a diverse workforce is important in communicating effectively with a wide customer

base and in demonstrating corporate social responsibility

A poor selection process leads to increased:

Training costs Job dissatisfaction, lower performance, industrial unrest/labour turnover The absenteeism rate if staff feel inadequate for the job Accident or defect rates, fines Claims of discrimination if the process is not undertaken appropriately.

Internal recruitment

Sources include employees, former applicants and former employees, word of mouth, email.External recruitment

Newspaper advertisements, referrals through recruitment agencies, company websites, tradeunions, professional associations, radio and television.

Internal recruitment - advantages External recruitment advantages

Builds commitment, loyalty and motivation Wider applicant poolEmployees already know the culture andoperations

New ideas, perspectives and skills introduced tobusiness better for innovation and problemsolving

Recognises and rewards staff for achievement Get specific skills save on trainingCan lead to a succession of promotionopportunities

You can shape the new employee to suit thebusiness

Cheaper than external recruitment less chance ofhiring shitty staff as you already know them

Internal recruitment - disadvantages External recruitment - disadvantages

Little value added, no new skills Takes a lot of effort and timeCan lead to rivalry for positions Risk of unknown staff, also employee may not get

along with internal rivalsOften attracts a significant number of internal

applicants, need to manage unsuccessful

applicants who will be demotivated

Lost productivity in initial phases of orientation andinduction phase

General skills Many businesses focus on attracting staff with skills and behaviours that are a good cultural fit for

their business.

The job can then be customised to suit the recruits who can be trained for the specific role. Key general skills include flexibility and versatility, social confidence, motivation, ability to work

as a team or independently, leadership and decision-making styles.

Increasingly, as online recruiting grows, businesses use their websites to promote their brand, thevalues and culture of their business.

^ Widens the pool of potential talent available to a business.


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Specific skills

Many businesses are recruiting overseas or using outsourcing and overseas recruitment toovercome skill gaps in their businesses.

There is a significantshortage developing in more highly skilled and professional areas Employee poaching is frequently used to gain skilled workers

Development is focused on enhancing the skills of the employee in line with the changing needs of thebusiness.

In choosing the nature of training and development, businesses need to evaluate:o The needs of the businesso The supply of these skills in the economyo The changing nature of work

Businesses need to see which skills they can develop internally and which they need to recruit.Businesses will need to consider these options:

Invest in further in-house training and development Recruitstaff for specific skills Retain women through flexible work structures such as telecommuting Share staffwith other firms Outsource functions to specialist firms or agencies, even overseas

Performance management is a process ofevaluating and managing employee performance in order toachieve the best outcomes for a business.

The two steps of performance management are:

Evaluating an individuals performance. Using that information to develop the individual.

Focused on using data to develop the individual skills and abilities of employees

Achieved through year round periodic feedback and shared discussion that is empathetic and goalfocused.

Provides information that can be used by management for planning in training, development,rewards and pay levels.

The focus is on collecting data to manage the HRM function more efficientlyBenefits of effective performance management

Benefits for the business Benefits for the individual

Assists with human resource planning Comparison of contribution to organization and

performance against agreed standardsEvaluation of rewards and benefits program Helps assess rewards and benefits linked to

performanceIdentifies and documents poor performance, andlinks it with training and improvement strategies

Identifies strengths and weaknesses, creatingopportunities for training and development,coaching or mentoring

Helps identify, motivate and retain talented staff forleadership succession

Fosters promotion on merit

Shows the effectiveness of current selectionprocesses and whether staff recruited match the

Creates opportunity for employee to providefeedback


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cultural fit and skills required for the organization

Effective performance appraisal systems set clear standards in advance, against which performance can be:

measured, rewarded and plans for improvement developed.

How to have effective performance management:

Have clear job descriptions Provide appropriate induction, training and development, so staff are competent Provide regular and constructive feedback Reward employees for their achievements Use employee feedback to assess the effectiveness of the performance management system

Intrinsic rewards are those that the individual derives from the task or job itself, such as a sense ofachievement.

Extrinsic rewards are those given or provided outside the job.

Rewards related to individual performance can lead to conflict and rivalry if not managedproperly.

Group incentive schemes are often used to support a team-based culture.Key issues to consider in designing a reward and benefits system include:

Economic conditions supply and demand for labour Rewards and benefits of competitors Union power Profitability of the business.

Performance related incentive plans for above standard performance, bonuses, commissions,production-related incentives

Job related role and level of responsibility, scope of supervision, base pay, interpersonal skills,knowledge, experience, value to the company

Reward systems that are not fair lead to conflict, loss of trust and motivation, and higher levels of labourturnover.

The high costand shortage of supply ofskilled labour in Australia push businesses to operate globally.Offshore skilled labour is not always available as required due to high levels of demand for them.Issues for offshoring and outsourcing:

o Risking qualityo Business regulations in that countryo Political stabilityo Language skills

Businesses may wish to diversify into new products and services, requiring different skills.If seeking to operate using a lower cost structure, training in quality standards and performancemanagement will change. Compliance with overseas labour market regulations, cultural awareness andlanguage training for all staff is essential.


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A polycentric staffing approach uses host-country staffing with parent-country staff in corporatemanagement.

Good: helps the company access good market knowledge, is cost efficient, and satisfies local pressurefor employment

Bad: limits management experience for host-country staff.A geocentric staffing approach uses the most appropriate staff for a particular role and location.

Good: you get lots of managers with global experience Bad: This can be a complex and expensive policy due to local employment regulations, relocation and

retraining costs.

An ethnocentric approach uses parent-country staff in its business.

Bad: limits business ability to interact with customers and learn from overseas markets.

Disputes can be very costly financially and to a business reputation and relationship with itsemployees.

Workplace conflicts lead to higher levels of absenteeism, low productivity, legal claims and high staffturnover.

An industrial dispute is a disagreement over an issue or group of issues between an employer and itsemployees, which results in employees ceasing work. Strikes are when workers stop working and aim to attract publicity and support. Lockouts occur when employers close the entrance to a workplace and refuse admission to the

workers.

Lockouts have been used to promote concession bargaining, to push employees to sign individualagreements, and in response to strike action.

Pickets are protests that take place outside the workplace. Unionists stop the delivery of goods andtry to stop the entry of non-union labour into the workplace.

The major causes of disputes:Remuneration: wages, allowances, entitlements and superannuation.Employment conditions: working hours, leave, benefitsJob security issues: retrenchment of employees, downsizing, restructuring, use of contractors,

outsourcingHealth and safety: physical working conditions, workers compensation provisions, protective

clothing and equipment.


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Dispute resolution has been heavily influenced by government policies.The current focus is on collective and enterprise-based bargaining not individual.Before industrial action, there must also be proof of bargaining in good faith.

Negotiation is when discussions between the parties result in a compromise and a formal orinformal agreement.

Mediation is the confidential discussion of issues in a non-threatening environment, in the presence ofa neutral, objective third party such as Fair Work Australia.

Reduces the risk of disputes escalating and leading to expensive legal costs or industrial action.

Grievance procedures are formal procedures, generally written into an award or agreement, that stateagreed processes to resolve disputes in the workplace.

Conciliation and arbitration

oConciliation is a process where a third party is involved in helping two other parties reach anagreement. The conciliation member calls a conference and attempts to help both sides reach an

role of keystakeholdersin resolvingworkplacedisputes

employers andmanagers: use

grievanceprocedures andnegotiate

agreements withemployees to

resolve disputes.

employerassociations:

provide informationand support to

employers, assist innegotiations with

unions andrepresent

employers in

tribunals

trade unions:represent employeesin disputes from the

shop floor to thenational level,negotiate withmanagement,

represent employeesin tribunals

governments:provide the

institutions, policyand legislative

framework for theresolution of

conflict. investigatebreaches oflegislation


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agreement.oIfconciliation fails the matter may be referred to arbitrationo Arbitration is a process where a third party hears both sides of a dispute and makes a legally binding

order to resolve the dispute.oOrders may end a restrictive work practice or behaviour, such as a lockout, or require a secret ballot

of union members if strike action is proposed.

Benefits and costs of workplace disputes

Types of benefit/cost Benefits of industrial conflict Costs of industrial conflict

Financial Lost production and salesadversely affect a firms

income and levels of debt, andreputation may be damagedSome firms may close orrelocate. Other businessesdependent on firms in disputecan be affected.Legal representation andfines = $

Personal Conflict helps workers to gainmanagements attention on major issues

that may have caused dissatisfaction for along time.Better work relationships resulting from aclearer understanding of work problems.Greater employee involvement andmotivation may result from negotiatedchanges and improvements in training.

Stress created throughchanges due to restructuringof the work place.Working relationships maysuffer as a result of conflict.Absenteeism, accidents anddefect rates can increase.Rumours of downsizing causefear, lowering morale.

Social OH&S issues can be reducedIntroduction of multiskilling, new trainingops and career paths that benefit everyoneCommunity/employee welfare improved bychanged practices.

Verbal and physical abuseDemonstrations can disruptcommunities


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Indicators are performance measures used to evaluate the business, team or individual, such asdollar sales achieved per employee per year.

Benchmarking is a process in which indicators are used to compare business performance betweeninternal sections of a business or between businesses.

Indicators are gathered in human resource audits. A human resource audit is used to evaluate HR policiesand practices in order to identify problems and develop solutions.

The indicators that reveal a workplace has a poor corporate culture include:

High staff turnover Poor customer service High levels of absenteeism Accidents Disputes Internal conflict

Good workplace culture involves: Flexible and family friendly practices Culture of trust High quality relationships High levels of training and mentoring Fun atmosphere Collaboration in decision making

Benchmarking may provide useful information about the businesss human resources, but may focus

excessively on costs rather than what is actually being achieved.

Informal benchmarking: any strategies such as networking (interacting with other people toexchange information) through informal discussions with colleagues in other businesses, researchingbest practice online and attending conferences.

Performance benchmarkinginvolves comparing the performance levels of a process/activity withother businesses.

Best practice benchmarkinginvolves comparing performance levels with those of a best practicebusiness in specific areas.

Balanced scorecard benchmarking: It benchmarks key performance variables with targets alignedwith the strategic plan to see if business is meeting its objectives.

Quantitative measuresKey variables often include:

Variances in labour budgets. Increases are most likely due to poor planning of staffing needs, higherunscheduled absenteeism, staff turnover rates.

Costs of injuries and sickness. Can be due to poor training and lead to higher insurance premiums,and risks of fines and claims.

Performance appraisals completed compared with targets Percentage of goals achieved.


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Levels of labour turnover.Qualitative evaluationQualitative evaluation involves detailed feedback and research, allowing judgements to be made aboutchanges in behaviour or quality of service provided.Sources surveys and focus groups about workplace culture, relationships at work, and the quality ofcustomer service and leadership.

Analysis of industrial disputes and the issues raised may provide useful feedback about issues suchas health and safety, rewards and benefits, and relationships in the workplace.

Feedback from performance appraisals provides information useful in evaluating and planningtraining, recruitment and selection, development, rewards, and separation processes.

Feedbackfrom supervisors, consultative committees, customers and employees in organisationalsurveys provides useful insight into worker satisfaction, empowerment and customer service.

Businesses need to benchmark their turnover against that of other businesses in the industry anddetermine the type of staff leaving and why

The costs of high labour turnover involve payouts for entitlements, hiring, inducting and trainingnew staff.

Productivity and service quality, corporate skills and knowledge are lost, particularly if there hasbeen poor succession planning. Some level of turnover is considered healthy in businesses, as new ideas are brought in and often

stimulate innovation in work practices.

Absenteeism is measured as the average rate of employee absenteeism, on an average day, withoutsick leave or leave approved in advance.

High levels of absenteeism and/or lateness may indicate that workers are dissatisfied or that there isconflict within the workplace

Revenue is lost as work is disrupted and can lead to lower productivity and higher labour costs.

Best practice businesses:

Have regular safety audits Build a culture of safety using visible policy statements, safety signs and reminders Provide careful induction and regular ongoing training for staff

They save on compensation claims, absenteeism, lost work time, replacement costs for damagedequipment, and improve their image to customers.

Overt manifestations:

Employees: Pickets Strikes Work bans and boycotts Work to rule

Management: Lockouts Dismissals, retrenchments

Covert:

Employees:

Absenteeism High labour turnover rates

Theft and sabotage Reduced productivity Lack of cooperation


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Management:

Discrimination Harrassment Exclusion from decision making

Work bans a ban or boycott is a refusal to work overtime, handle a product, piece of equipment, ora refusal to work with particular individuals

Work-to-ruleemployees refuse to perform any duties additional to the work they normally arerequired to perform.

Go slow employees work slow, causing customer complaints, and a backlog of work. Sabotage vandalism, and internal theft. Intended to harm or destroy the image of a firm

Surveys help employers measure and understand how staff feel about work, management and the businessculture.Undertaken using:

Paper surveysOnline pollsFocus groups

External consultants Exit interviews.

Effective leadership is one of the most important influences on employee satisfaction, particularly whenemployees feel:

o Recognised and encouragedo Management is transparento Promotion is merit basedo Communication is honest and respectful.

HRM Business Studies

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