HRM & the External Business Environment

8/3/2019 HRM & the External Business Environment

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HRM & the External BusinessHRM & the External Business

EnvironmentEnvironment

Lecture 5Lecture 5

HRMT 2237HRMT 2237Semester 1, 2009Semester 1, 2009

Professor John CorderyProfessor John Cordery


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The Harvard HRM frameworkThe Harvard HRM frameworkStakeholder interests

Shareholders

Management

Employee groups

Government

CommunityUnions

Situational Factors

Workforce characteristics

Business strategy &

conditionsManagement philosophy

Labour market

Unions

Task technology

Laws & societal values

HRM Policy

ChoicesEmployeeinfluence

HR flows

Rewardsystems

Work systems

HR

OutcomesCommitment

Competence

Congruence

Costeffectiveness

Long-term

consequencesIndividual well-being

Organizationaleffectiveness

Societal well-being


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HRM policies & practices are affectedHRM policies & practices are affected

by 4 features of the external businessby 4 features of the external business

environmentenvironment SocialSocial

Societys norms about work & employmentSocietys norms about work & employment

PoliticalPolitical Political pressures (informal & institutional) on howPolitical pressures (informal & institutional) on howpeople are managedpeople are managed

LegalLegal

Statutory rights & responsibilities of employees andStatutory rights & responsibilities of employees andemployersemployers

EconomicEconomic

Local labour market conditions & economic pressuresLocal labour market conditions & economic pressureson organizationon organization


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Social factorsSocial factors

What in society lends status to individuals?What in society lends status to individuals?

Inconsistencies between social and organizational statusInconsistencies between social and organizational status

need to be avoided, or mitigatedneed to be avoided, or mitigated

High PDI High Preference for

Hierarchical RewardsVenezuela Venezuela

Saudi Arabia Saudi Arabia

Papua New Guinea Papua New Guinea

Angola Indonesia

Indonesia Angola

Singapore Singapore

France France

USA USA

Canada Canada

Australia Australia

Low PDI Low Preference for Hierarchical Rewards

Power-distance nationalcultural values andemployee preferencesfor hierarchy-based

rewards at Chevron


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What sorts of behaviors are discouraged/condoned?What sorts of behaviors are discouraged/condoned?

Resistance ToSelf-management

Resistance ToTeams

Resistance To

Self-managed

Teams

Power Distance

Uncertainty

avoidance

Perceived Values

CongruenceIndividualism

Perceived

Fairness of

Team Pay

-

Kirkman & Shapiro (1997, 1999)Kirkman & Shapiro (1997, 1999)


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What sorts of behaviors are discouraged/condoned?What sorts of behaviors are discouraged/condoned?

What are regarded as the social responsibilities ofWhat are regarded as the social responsibilities of

the firm?the firm? WORKWORK--LIFE BALANCELIFE BALANCE* flexible working for parents* flexible working for parents

* caring for children* caring for children

* teleworking* teleworking

* maternity leave and pay* maternity leave and pay* paternity leave and pay* paternity leave and pay

* adoption leave* adoption leave

* dependants' and urgent personal leave* dependants' and urgent personal leave

* parental leave* parental leave

* childcare provision* childcare provision


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What in society lends status to individuals?What in society lends status to individuals? What sorts of behaviors are discouraged/condoned?What sorts of behaviors are discouraged/condoned?

What are regarded as the social responsibilities ofWhat are regarded as the social responsibilities of

the firm?the firm?

What forms of organizational control are regardedWhat forms of organizational control are regarded

as legitimate and acceptable?as legitimate and acceptable?South Blackwater Coal Ltd (SBCL) employs 400 workers and is located approximately 900kmnorth-west of Brisbane at the heart of the Bowen Basin coal mining region of Queensland. Aspart of policy development to ensure a safer working environment, management and trade

unions were in the process of negotiating policies and procedures for drug-testing at the mine(in line with that of other mines in the region). Previously, testing only took place if staff wereinvolved in an accident. During this process, management found a used syringe on-site andtook this as prima facie evidence of illicit drug use in the workplace. Management immediatelymoved to install drug-testing procedures at the mine. Trade unions advised their members torefuse this blanket testing for drugs, at which point they were stood-down by the company. Afterone week and three visits to the Australian Industrial Relations Commission (AIRC) the case

was (theoretically) resolved. Holland P. (2003). Surveillance & Society 1(2): 204-209htt ://www.surveillance-and-societ .or

South Blackwater Coal Ltd (SBCL) employs 400 workers and is located approximately 900kmnorth-west of Brisbane at the heart of the Bowen Basin coal mining region of Queensland. Aspart of policy development to ensure a safer working environment, management and trade

unions were in the process of negotiating policies and procedures for drug-testing at the mine(in line with that of other mines in the region). Previously, testing only took place if staff wereinvolved in an accident. During this process, management found a used syringe on-site andtook this as prima facie evidence of illicit drug use in the workplace. Management immediatelymoved to install drug-testing procedures at the mine. Trade unions advised their members torefuse this blanket testing for drugs, at which point they were stood-down by the company. Afterone week and three visits to the Australian Industrial Relations Commission (AIRC) the case

was (theoretically) resolved. Holland P. (2003). Surveillance & Society 1(2): 204-209htt ://www.surveillance-and-societ .or


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Political FactorsPolitical Factors


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Political factorsPolitical factors What do governments expect?What do governments expect?

Minerals Council of Australia and Federal Government Memorandum of Understanding on IndigenousEmployment and Enterprise Facilitation (MoU) launched in June 2005. Establishes new workingarrangements between Government, industry and Indigenous communities, through:

* a collaborative and localised approach between Government, industry and Indigenous people, including:

* an emphasis on developing local partnerships that are resourced and empowered to develop local solutionsand build upon successful programs; and

* recognition that direct engagement with Indigenous people and building community responses are critical tothe success of the partnerships;

* increased collaboration within the minerals industry, rather than competition, in finding solutions with localIndigenous people and Government;

* development of overarching Regional Partnerships Agreements (RPAs) between industry, all levels ofGovernment and Indigenous communities, to achieve high-level alignment between the parties beforeconsideration of project details;

* development of an evaluation framework to assess the performance of the partnerships and theachievement of desired outcomes as identified by the regional partnerships

* a commitment to the effective communication of successes and learnings across Government, the mineralsindustry and within Indigenous communities.


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Political factorsPolitical factors

What do governments expect?What do governments expect?

What support can be obtained from theWhat support can be obtained from the

political system?political system?Public works schemes

Job search assistance

Training long-term

unemployedMass retraining for redundant

Training for young people

Business start-up assistance

Wage subsidies

Public works schemes

Job search assistance

Training long-term

unemployedMass retraining for redundant

Training for young people

Business start-up assistance

Wage subsidies

February 06, 2008MITSUBISHI workers will be handed millions ofdollars in Government assistance after thecarmaker announced the closure of its Adelaidemanufacturing plant.

More than 900 people will lose their jobs whenMitsubishi closes its doors in South Australia at theend of March.

Federal Industry Minister Kim Carr says Mitsubishiworkers will receive a $50 million assistancepackage, to be funded by the state and federal

governments and Mitsubishi.

February 06, 2008MITSUBISHI workers will be handed millions ofdollars in Government assistance after thecarmaker announced the closure of its Adelaidemanufacturing plant.

More than 900 people will lose their jobs whenMitsubishi closes its doors in South Australia at theend of March.

Federal Industry Minister Kim Carr says Mitsubishiworkers will receive a $50 million assistancepackage, to be funded by the state and federal

governments and Mitsubishi.


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political system?political system? What impediments are imposed?What impediments are imposed?

23 February, 2009

Chris Evans the Australian immigration minister said that dueto the current economic situation there will be a reduction inthe level of immigration to Australia. Chris Evans alsomentioned that six of Australia's trading partners are now inrecession. For the last ten years Australia has enjoyed miningboom which has kept unemployment at a thirty year low.

http://www.workpermit.com/news/2009-02-23/

23 February, 2009

Chris Evans the Australian immigration minister said that dueto the current economic situation there will be a reduction inthe level of immigration to Australia. Chris Evans alsomentioned that six of Australia's trading partners are now inrecession. For the last ten years Australia has enjoyed miningboom which has kept unemployment at a thirty year low.

http://www.workpermit.com/news/2009-02-23/


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political system?political system? What impediments are imposed?What impediments are imposed?

Are aspects of employment relations subjectAre aspects of employment relations subjectto centralized bargaining & negotiation?to centralized bargaining & negotiation?


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Political FactorsPolitical Factors

Conciliation & Arbitration SystemsConciliation & Arbitration Systems

yy A system whereby industrial parties are encouraged toA system whereby industrial parties are encouraged to

sort out their differences by means ofsort out their differences by means ofconciliationconciliation (with(with

the assistance of the industrial tribunal); however, whenthe assistance of the industrial tribunal); however, whenthis fails to produce a negotiated outcome the tribunalthis fails to produce a negotiated outcome the tribunal

may impose a binding decisionmay impose a binding decisionthat isthat is arbitrationarbitration..

yy Sometimes this system is calledSometimes this system is called compulsorycompulsory

conciliation and arbitrationconciliation and arbitrationbecause the industrialbecause the industrial

parties must come to conciliation if the other party (orparties must come to conciliation if the other party (or

the tribunal) calls for this to happen, and any decision isthe tribunal) calls for this to happen, and any decision is

binding on the parties.binding on the parties.


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Legal FactorsLegal Factors


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Legal factorsLegal factors

Legal environment in AustraliaLegal environment in Australia

StateState

Australian Conciliation and ArbitrationAustralian Conciliation and ArbitrationCommissionCommission

ConstitutionConstitution

Wages and conditionsWages and conditions

Contract of employmentContract of employment


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Legal factorsLegal factors What are statutory responsibilities of the organization?What are statutory responsibilities of the organization?

Federally, includes:Federally, includes:

Workplace Relations Act 1996Workplace Relations Act 1996

Workplace Relations Amendment (Transition to Forward with Fairness)

Act 2008

Fair Work Bill (to come into force 1 July, 2009)Fair Work Bill (to come into force 1 July, 2009)

Age Discrimination Act 2004Age Discrimination Act 2004

Disability Discrimination Act 1992Disability Discrimination Act 1992

Human Rights and Equal Opportunity Commission Act 1986Human Rights and Equal Opportunity Commission Act 1986

Race Discrimination Act 1975Race Discrimination Act 1975 Sex Discrimination Act 1984Sex Discrimination Act 1984

Privacy Amendment (Private Sector) Act 2000Privacy Amendment (Private Sector) Act 2000

Occupational Health and Safety (Commonwealth Employment) Act 1991Occupational Health and Safety (Commonwealth Employment) Act 1991

Safety, Rehabilitation and Compensation Act 1988Safety, Rehabilitation and Compensation Act 1988

Superannuation Guarantee (Administration) Act 1992Superannuation Guarantee (Administration) Act 1992


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What are statutory responsibilities of theWhat are statutory responsibilities of theorganization?organization?

What rights do workers have, individuallyWhat rights do workers have, individually

and collectively?and collectively?All full-time employees are protected by a key set of pay and conditions which cover:

* Guaranteed minimum wage rates* Maximum working hours* Four weeks annual leave* Two weeks personal/carers leave* One year unpaid maternity or paternity leave.

P

art-time employees get similar entitlements based on their hours of work. Casual employees areguaranteed minimum wage rates, casual loading and unpaid carers leave.

Employees cannot be sacked because of their race, gender, age, disability, religion, pregnancy, familyresponsibilities or trade union membership.

Employees have the right to join, or not join, a union.

Employees must be issued pay slips and have accurate and complete time and wage records kept by theiremployer.

All full-time employees are protected by a key set of pay and conditions which cover:* Guaranteed minimum wage rates* Maximum working hours* Four weeks annual leave* Two weeks personal/carers leave* One year unpaid maternity or paternity leave.

P

art-time employees get similar entitlements based on their hours of work. Casual employees areguaranteed minimum wage rates, casual loading and unpaid carers leave.

Employees cannot be sacked because of their race, gender, age, disability, religion, pregnancy, familyresponsibilities or trade union membership.

Employees have the right to join, or not join, a union.

Employees must be issued pay slips and have accurate and complete time and wage records kept by theiremployer. Source: http://www.workplaceauthority.gov.au


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Wages & ConditionsWages & Conditions

Australian Workplace Agreements (AWAs)Australian Workplace Agreements (AWAs)

Agreements negotiated directly between an employerAgreements negotiated directly between an employer

and employee(s), introduced under theand employee(s), introduced under the WorkplaceWorkplace

Relations Act 1996Relations Act 1996(WRA).(WRA).

AwardsAwards

Written determinations created by federal or stateWritten determinations created by federal or state

industrial tribunals, specifying the minimum terms andindustrial tribunals, specifying the minimum terms andconditions of employment, such as hours of work,conditions of employment, such as hours of work,

minimum pay and types of leave allowable.minimum pay and types of leave allowable.


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Wages & conditions (contd)Wages & conditions (contd)

Certified AgreementsCertified Agreements

Tend to cover only one workplace unlikeTend to cover only one workplace unlikeawards, which could potentially cover theawards, which could potentially cover thewhole of a national industry.whole of a national industry.

Workplace Authority (was OEAWorkplace Authority (was OEA))

A statutory body charged with the generalA statutory body charged with the generaloversight of AWAs.oversight of AWAs.


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Contract of employmentContract of employment

Contracts of service (i.e. employment)Contracts of service (i.e. employment)

Contracts for service(s) (i.e. work performed byContracts for service(s) (i.e. work performed bynonnon--employees)employees)

Challenge of Who is an employee?Challenge of Who is an employee?


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What are statutory responsibilities of theWhat are statutory responsibilities of theorganization?organization?

What rights do workers have, individuallyWhat rights do workers have, individually

and collectively?and collectively? What sorts of employment practices areWhat sorts of employment practices are

sanctioned?sanctioned?Labour Relations Legislation Amendment (WA) Act 2006The Act incorporates a reasonable hours of work clause into the MCE Act. The changes specify that the maximumnumber of hours of work for employees are:* the ordinary hours of work as specified in the employee's industrial instrument (award or employer-employeeagreement), or if there is no industrial instrument, 38 hours per week and reasonable additional hours.In determining whether the additional hours that an employee is required or requested by an employer to work arereasonable, a range of factors are to be considered. These include:* any risk to the employee's health and safety* the employee's personal circumstances (and family responsibilities)* the conduct of the operations or business, any notice given to the employee* any notice given by the employee of the employee's intention to refuse to work the additional hours

* whether any of the additional hours are on a public holiday, and* the employee's hours of work over the previous 4 weeks. Source: http://www.deacons.com.au/

Labour Relations Legislation Amendment (WA) Act 2006The Act incorporates a reasonable hours of work clause into the MCE Act. The changes specify that the maximumnumber of hours of work for employees are:* the ordinary hours of work as specified in the employee's industrial instrument (award or employer-employeeagreement), or if there is no industrial instrument, 38 hours per week and reasonable additional hours.In determining whether the additional hours that an employee is required or requested by an employer to work arereasonable, a range of factors are to be considered. These include:* any risk to the employee's health and safety* the employee's personal circumstances (and family responsibilities)* the conduct of the operations or business, any notice given to the employee* any notice given by the employee of the employee's intention to refuse to work the additional hours

* whether any of the additional hours are on a public holiday, and* the employee's hours of work over the previous 4 weeks. Source: http://www.deacons.com.au/


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Termination of employmentTermination of employment

Unfair dismissalUnfair dismissal

Generally refers to a situation where regard forGenerally refers to a situation where regard fora fair procedure (i.e. the right to hear of aa fair procedure (i.e. the right to hear of a

transgression and be given the opportunity totransgression and be given the opportunity to

defend oneself) has been ignored or where adefend oneself) has been ignored or where a

transgression itself does not reasonablytransgression itself does not reasonablysuggest dismissal as an appropriatesuggest dismissal as an appropriate

management response.management response.


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Equal employment opportunityEqual employment opportunity

lawslaws

The governments attempt to ensure that allThe governments attempt to ensure that all

individuals have an equal opportunity forindividuals have an equal opportunity for

employment, regardless of characteristicsemployment, regardless of characteristicssuch as race, colour, religion, sex orsuch as race, colour, religion, sex or

national origin.national origin.


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DiscriminationDiscrimination

Acts involving a distinction, exclusion,Acts involving a distinction, exclusion,

restriction or preference between onerestriction or preference between one

individual or group and another, whichindividual or group and another, which

has the purpose or effect of disadvantagehas the purpose or effect of disadvantageto one.to one.


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Discrimination (cont.)Discrimination (cont.)

Direct discriminationDirect discriminationWhen someone is treated less favourably on the basisWhen someone is treated less favourably on the basisof a particular characteristic (e.g. gender) thanof a particular characteristic (e.g. gender) thansomeone with a different characteristic insomeone with a different characteristic in

circumstances that are materially the same.circumstances that are materially the same. Indirect discriminationIndirect discrimination

When a compulsory requirement is attached to a jobWhen a compulsory requirement is attached to a job(which has nothing to do with the real performance of(which has nothing to do with the real performance ofthe job) which would prevent substantial proportionsthe job) which would prevent substantial proportionsof particular groups from being able to comply andof particular groups from being able to comply andthe individual in question cannot comply.the individual in question cannot comply.


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A man who has a physical disability complained that employees with disabilities, otherthan that disabilities acquired at work, were not eligible for overtime rosters. Thecomplaint was resolved when the employer apologized and compensated the employee

for lost overtime earnings.A woman complained that she had been discriminated against when she was notsuccessful in a job application after declining to provide some information in response tomedical question which she saw as broader than justified by the inherent requirements ofthe job. The complaint was resolved when the employer agreed to review its medicalchecks and take into account feedback on their extent.

A woman with a hearing impairment complained that she had been discriminated againstwhen a job offer as a customer support officer was withdrawn after a hearing test hadindicated she had less than 90% hearing. The complaint was resolved when theemployer apologized and advised that although 90% hearing was a functionalrequirement of the job this should have been assessed taking into account possiblereasonable adjustments, and the application should be re-considered accordingly.

A woman who has an anxiety disorder complained that her applications for advancementin a public sector position had been rejected because she had experienced two anxietyattacks in two years. The matter was resolved when the employer agreed to assist her indrafting a new application for advancement; to provide her with project work which wouldstrengthen her application; arrange for an independent committee to consider herapplication ; accept the application if this was recommended by the independentcommittee; and arrange training for relevant staff on mental health issues in the

workplace.

A man who has a physical disability complained that employees with disabilities, otherthan that disabilities acquired at work, were not eligible for overtime rosters. Thecomplaint was resolved when the employer apologized and compensated the employee

for lost overtime earnings.A woman complained that she had been discriminated against when she was notsuccessful in a job application after declining to provide some information in response tomedical question which she saw as broader than justified by the inherent requirements ofthe job. The complaint was resolved when the employer agreed to review its medicalchecks and take into account feedback on their extent.

A woman with a hearing impairment complained that she had been discriminated againstwhen a job offer as a customer support officer was withdrawn after a hearing test hadindicated she had less than 90% hearing. The complaint was resolved when theemployer apologized and advised that although 90% hearing was a functionalrequirement of the job this should have been assessed taking into account possiblereasonable adjustments, and the application should be re-considered accordingly.

A woman who has an anxiety disorder complained that her applications for advancementin a public sector position had been rejected because she had experienced two anxietyattacks in two years. The matter was resolved when the employer agreed to assist her indrafting a new application for advancement; to provide her with project work which wouldstrengthen her application; arrange for an independent committee to consider herapplication ; accept the application if this was recommended by the independentcommittee; and arrange training for relevant staff on mental health issues in the

workplace.http://www.hreoc.gov.au/disability_rights/decisions/conciliation/employment_conciliation.html

Human Rights & Equal Opportunity Commission

HRM & the External Business Environment

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