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HRM107: Introduction to Human Resource Management LECTURE ONE What is HRM?
-‐ Focus is on managing people within the employer-‐employee relationshipà Vital as if it doesn’t work there are negative effects for a business
-‐ Specifically, it involves the effective and productive use of people in order to achieve an organisations strategic business objective and goals
-‐ HRM is concerned to resolve key issues such as: o Quantity and quality of employees required now and in the future
to satisfy or exceed organisation objectives—recruitment and selection
o Strategies most effective in attracting, choosing and efficiently incorporating employees into the organisation
o Keeping well chosen employees productive, satisfied and motivated to contribute to organisational growth and effectiveness-‐ reward systems taking account of differences
o Strategies required to ensure that all HR activities are linked and accountable—making HR managers accountable for incidences that happen
Challenges for HRM Today:
-‐ The need for more skillsà SHRM -‐ Technological advanced -‐ Managing the talent—doesn’t always stay and can move on due to
competition -‐ There is more expected of us
Stages in the Development of HRM:
-‐ Stage 1: welfare & administration-‐ 1900’s-‐1940’s o Managing people if they were looked after—personal involvement
with no link to business -‐ Stage 2: Welfare, administration, staffing and training-‐ 1940’s-‐1970’s
o Restructuring, increase in unemployment and a lot of discontent in the work place
o Trying to get the best out of employees through rewards to do more—driven by goals and targets
-‐ Stage 3: HRM & SHRM-‐ 1970’s-‐1990’s o Change of games socially and economically
-‐ Stage 4: SHRM into the future-‐ 1990’s-‐now o How to manage and discuss ramifications etc.à where are we
now-‐ the need to respond quickly and culture where the organisation is going
Stage 3: from Personnel Management to HRM
-‐ Shot of personnel management and HRM comparison -‐ Change of value in managing people -‐ Personnel= welfare
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-‐ HRM or people performance/management/culture -‐ Manage people to expect commitment
Personnel Management HRM Time and Planning perspective
Short term, reactive Long term, proactive, strategic and integrated
Psychological contract Compliance Commitment Control systems External controls Self-‐control Employee relations perspective
Pluralist, collective, low trust
Unitarist, individual, high trust
Preferred structure/system
Bureaucratic/mechanic centralised, formal/defined roles
Organic, devolved, flexible roles
Roles Specialised/professional Largely integrated into the management
Evaluation Criteria Cost minimalism Maximum utilisation (human assist accounting)
The Changing ‘Psychological Contract’
-‐ The employment contract comprises a set of overlapping contracts—the legal, social and psychological
-‐ Increasing emphasis on the psychological contract between organisations and their employees
-‐ Refers to expected trust, loyalty, reward—an employers belief and expectation with an understanding of human motivation for fostering feelings and happiness
-‐ Employee engagement is linked to a strong, positive psychological contract—if ones job is right but they aren’t right for the team—honesty is vital with communication
-‐ Vital to have knowledge of legislation and implications due to breakdown in the psych. contract à to have knowledge of the human psychy in the workplace
Conceptualising HRM
-‐ Emphasis on the human or resource -‐ Harvard model
o External impacts on organisations o
-‐ Soft & Hard HRM o Soft= emotion and economic, maintaining wellbeing and the psych.
contract o Hard= goals, objectives, output, evaluation, etc.
§ Need a balance of both for good business practice -‐ Relationship with Industrial Relations (IR) -‐ Strategic HRM
o Designed first opposed to being reactionary -‐ Unitarism and pluralism
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Characterising Approaches to HRM as Hard & Soft -‐ Hard HRM focuses on:
o The rational, quantitive and strategic aspects of managing human resources
o Effective utilisation of human resources to achieve org/al goals o Integrating HR policies with business strategy
-‐ Soft HRM focuses on: o A more humanistic approach-‐ emotional intelligence o While emphasising the strategic integration of HR and Business
Strategy, it also views competitive advantage as something which relies on human beings in the organisation with superior knowledge, commitment, job satisfaction and motivation
o The aim is to generate resourceful employees through HRM via employee involvement and empowerment
-‐ The role is to work with managers and to not limit, but invest time so a team can reach its goals
Strategic HRM (What it is today)
-‐ A strategy is the means by which an organisation seeks to meet its objectives and through deliberate choices
-‐ Being strategic normally involves: o A deliberate choice, a decision to take course of action rather than
reacting to circumstances o It focuses on significant long term goals rather than day-‐to-‐day
operational matters -‐ SHRM emphasises the need for HR plans and strategies:
o To be formulated within the context of overall org/al strategies and objectives
§ Supporting goals and being responsive to change, etc. § To the changing needs of the society and the ability to
change with the times o To be responsive to the changing nature of the organisations
environment o Organisations have to change so HRM needs the right people at the
right time HRM and Industrial Relations (IR)
-‐ Different views of the relationship between HRM and IR are based on views that experts in each field have of the other e.g.:
o For some in IR § HRM is an area of management competency within the
broader field of IR § HRM poses a threat to IR e.g. soft HRM may reduce the need
for unions o For some in HRM
§ IR is a threat because industrial relations systems and traditions interfere with HRM strategy – constraining labour market conditions and rates
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§ IR is a subsystem of HRM and hence HRM involves managing IR
§ IR is just part of the total environment within which HRM operates
-‐ Both HRM & IR however need to work closely together Strategic HRM
-‐ Several types of linkages between HRM and Business Strategy have been identified:
o Accommodative: § HR strategy follows business strategy-‐ accommodating the
existing needs which the business strategy generates o Interactive:
§ A two-‐way communication process in which HRM contributes to, and then reacts to, corporate strategies
o Fully integrated: § The HR specialist is involved as a partner in the overall
strategic process in both formal and informal interactions with the highest levels of management—value as a service
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International Strategy and the Role of HRM -‐ Growth -‐ Retrenchment -‐ Stability -‐ A combination of growth, retrenchment and stability -‐ International strategies:
o A global strategy o A multi-‐domestic strategy o A transnational strategy
-‐ HR needs to extend strategy overseas and to sustain/maintain HRM and Stakeholders
-‐ HR managers must identify major external and internal influences that will impact on the organisation and management of its human resources
-‐ External influences o Political o Legal o Environmental o Technological o Cultural o Demographic o Social o Business o Economic o IR
-‐ Internal influences o Organisational mission/purpose o Organisational objectives
§ Strategies § Culture § Structure § Systems
Principles of Strategic HRM-‐ The 9 C’s
-‐ Comprehensiveness o All areas of people matched closely to business goals
-‐ Coherence o HR activities integrated into a meaningful whole
-‐ Control o Control system in place
-‐ Communication -‐ Credibility
o Staff trust top management and their strategies -‐ Commitment
o Employees motivated to achieve org/al goals -‐ Continuous -‐ Creativity
o As a basis for competitive advantage -‐ Cost effectiveness
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Crisis and Sceptics of Strategic HR -‐ Debate about the extent to which HRM has become a strategic area of
management -‐ SHRM theory assumes that senior managers and HR specialists have the
managerial capacity and commitment to engage in broad and long-‐term planning
-‐ Research evidence suggests that SHRM has been constrained by several factors:
o Status of HR practitioners e.g. representation on boards and senior executive committees;
o Lack of acceptance of HRM by senior mangers o Limits to ability of HR practitioners to establish a strategic
approach and influence. Why? § Issues such as difficulty demonstrating credibility and
contribution HR makes to performance HRM roles, functions and competencies
-‐ HR practitioners operate at 3 distinct levels: o Strategic
§ Involved in corporate and HR planning o Operational
§ HR and managers collaborate for develop action plans and formulate HR policies and procedures
o Functional § Line managers implement policies and procedures to
ensure effective people management Six Functions of Human Resource Management
-‐ Recruitment and selection -‐ Performance management -‐ Remuneration, pay & condition -‐ IR -‐ Training and development -‐ Workplace, health and safety
The Core HR Functional Areas
-‐ Job analysis and evaluation -‐ HR planning -‐ Recruitment and selection -‐ Performance management -‐ HR development -‐ Motivation and retention -‐ Remuneration -‐ Benefits -‐ IR -‐ OH&S -‐ EEO or Diversity management -‐ Negotiation and conflict resolution -‐ HRM monitoring and evaluation
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Ethics of HRM -‐ Integrity -‐ Legality -‐ Proficiency -‐ Professional loyalty -‐ Confidentiality
Summing Up
-‐ What human resource management is -‐ How HRM has evolved -‐ The key ways of conceptualising HRM -‐ The concept of strategic HRM and the relationships between business
strategy and HR policy and practice -‐ The core activities involved in managing people -‐ The place of ethics within HRM
LECTURE TWO The Context of HRM
-‐ HRM is influenced by and in turn influences factors such as technology, laws, social values and economic condition that exist outside the organisations, as well as internal factors such as the organisation’s culture, strategy, structure and systems
SHRM & The Role of the Environment (Page 84)
-‐ Is a business shredding or having to grow? -‐ Planning? Skill shortage? -‐ HRM have to respond to problems accordingly
Internal Influences:
-‐ Strategies: an organisations objectives influence the type of people it requires, HRM policies, culture & structure
-‐ Culture: values, beliefs, assumptions & rituals tell employees how things are don in which behaviour is rewarded
-‐ Structure: influences how jobs are designed, decisions are made, things get done, employees required
-‐ Systems: how compatible it is with accounting, production, services & distribution system
Gerry Johnston’s Cultural Web
-‐ The paradigm: o Rituals and routines o Stories: how we work here, what we do that makes us belong o Power structures o Symbols o Organisational structures o Control systems: e.g. talking about above or below the line
behaviour
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A Quick Stock-‐Take of External Influences (page 69) -‐ Political: political ideologies can range from supporting an interventionist
approach with extensive government regulation of HRM to one of minimal involvement
o Neo-‐liberal: (e.g. gender differences and confidence etc.) approaches support individualism-‐ contractualism have laid the foundations for our legislation
-‐ Legal: laws and regulations regarding hours of work, holidays, EEO, sexual harassment, health and safety, privacy, terminations, etc.à impact on HRM policy and practice e.g. the Fair Work Act
-‐ Environmental: e.g. government and community concernsà affect job design, health and safety industrial relations and the image of an organisation as an employerà flexibility e.g. one paid day of volunteering
External Influences
-‐ Technological: the level of technological advancement and pace of changeà affect the job design, recruitment, selection, remuneration, health and safety, motivation à can be downside which causes more stress as we are accessible for communication through technology more readily available
-‐ Cultural: historical background, values, norms and languageà all influence employee views on the role of HRM and specific aspects of HRM such as rewards, motivation, communication, employee involvement
-‐ Social: changing values and attitudes towards issues such as dress, work, minorities, unions, management, social mobility, status, job security and quality of lifeà affect every aspect of HRMà changing social values, casual Fridays e.g., policies can be integrated for values, minorities should be welcomed as they offer strengths
Fundamental Patterns of Cultural Difference
-‐ Communication styles -‐ Attitudes towards conflict -‐ Approaches to completing tasks -‐ Decision-‐making styles -‐ Attitudes towards disclosure -‐ Approaches to knowing
-‐ Below the surface:
o Beliefs o Values o Perceptions o Expectations o Attitudes o Assumptions
§ Values over and underneath the service Cultural Frameworks:
-‐ High Context Cultures (Asia): o Individual relationships-‐ long lasting
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o Shared codes important for communication o Authority responsible for subordinates therefore reciprocal loyalty
expected o Agreements verbal not written o Insiders/outsiders regarded differently o Cultural patterns are slow to change
-‐ Low context cultures (US & Europe)
o Relationships more transient; culture= heterogeneous o Messages expected to be explicit; directness is valued o Authority is diffused to an extent o Agreements are written not verbal o Insiders/outsiders are less distinguished o Cultural patterns change faster
-‐ Hofstede’s dimensions of culture
o Power distance-‐ hierarchy: the extent to which less powerful members of society accept that power is distributed unequally
o Individualism vs. collectivism-‐ society and legislation: is everyone expected to look after themselves and their families or are people integrated into ‘in-‐groups’ that are expected to care for all members
o Masculinity vs. femininity: masculinist cultures tend to value achievement and success more highly than caring for others and quality of life
o Uncertainty avoidance-‐ risk adverse vs. not (western societies): the extent to which members are socialised to not accept ambiguity nor tolerate uncertainty about the future
-‐ Elaborated by Bond’s identification of Confucian dynamism:
o Long term (China, HK, Taiwan, Japan & Korea) o Or short term orientation (Australia, NZ, US, UK & Canada)
-‐ Qualifications of Hofstede:
o Based on one company (IBM) only o Short guard against the ‘ecological fallacy’ – individual behaviours
cannot be ‘read-‐off’ from culture External influences
-‐ Economic: for instance, economic activity, unemployment rates, public vs. private ownership, availability of credit, levels of taxes, degrees of economic planning à influence recruitment, remuneration, labour turnover, industrial relations etc.
o Global economic for the GFC-‐ the companies that fell through are most likely the ones that were poorly managed
-‐ Industrial relations: factors relating to IR, such as the organisational climate, government policies, degrees of unionisation, role of industrial tribunals, employee commitment and quality of work lifeà shapes job
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design, absenteeism, labour turnover, industrial disputes and the way pay and conditions are set in the organisation
o Fair work act—giving back to employees-‐ impacted HR to manage people at different times, have to treat employees fairly—the asset of business
-‐ Demographic: characteristics of the external labour market such as numbers, geographical distribution, age, sex, literacy, skill and education levels have a crucial impact on HRM. E.g. ageing populations, increasing participation of women
o Legislation and work act for flexibility-‐ harder to get a job over the age of 45+
Globalisation
-‐ Described as ‘the increased pace of economic interconnectedness between different countries’ (Nankervis, 2011, pg. 46)
-‐ Critical issue: what effect does the global economy and specific events such as the global financial crisis have on strategic human resource management
-‐ You cannot walk now in a HR job in a business and not face managing business overseas—the way that business operates oversees today; ideas want to be shared.
-‐ Challenges of Global HR Management o Bonuses designed to reflect cultural variances between different
operations within the organisation e.g. Bayer -‐ Standardisation of Work Practices
o Depends on: § Receptivity of local workforce to adhere to corporate norms
of behaviour § Effectiveness of expatriates as agents of socialisation § Whether localisation is timely (not just prompted by cost
consideration) § Appropriate to the local environment (Singapore, not
Qatar—2 different religious cultures/ work ethics) -‐ Issues for HRM:
o The increasing competitiveness and complexity of markets and operating environments influences the types of hr strategies and policies developed
o Globalisation is allowing skilled labour to move like capital across the world in search of the best compensation and other prospects
o Growing foreign ownership of firms—brings with it different management cultures, legal traditions, etc.
o International treaties and protocols (and questions of implementation and compliance)
o Diffusion of HRM practices within companies and between countriesà offices overseas and be conscious of HR practices overseas
o Reason for globalisation—the competitiveness in outsourcing anything that can be done on a lower wage
o Companies incentivising moving to keep good people and skills
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o Foreign ownership—more acceptance-‐ now welcome to boost our economy
-‐ Global Workforces and Global Operations o We need to be accepting and work overseas if needed o Think global, act local—universal manager, skills, behaviours? o Think of issues in the big picture but act in an appropriate manner
for locality -‐ Globalisation and hyper-‐competition: the impact on HR
o Number of reasons to suggest that effective implementation likely to become more important
o Markets becoming increasingly competitive and subject to disruptive change
§ Shorter product and industry life cycle § Conditions undermine value of current resources and
capabilities o Successful firms likely to be those that can respond rapidly to
(short term) opportunities that appear § I.e. those that rapidly develop and more importantly
implement changes in strategic direction § Sometimes called ‘dynamic capabilities’-‐ the ability to
rapidly respond to change à organisations need to adopt it to be dynamic and change
§ Markets also becoming more complex and increasingly competitive
§ Organisations need to be able to adopt—HR development and the training needed for it
The Australian Economy
-‐ Critical factors include: o Fluctuation in response to global and domestic factors; o Changes in industry and occupational structures e.g.
§ Decline in agricultureà rise in importance of manufacturing
§ Relative decline in manufacturing à rise of service sector § The ‘new’ economy:
• More flexible organisational forms • Onshore and offshore providers (banks,
telecommunications, manufacturing and medical providers)
• Internet services and virtual organisations § Jobs occurring now that didn’t exist 20 years ago § More emphasis on past time education to reach the
workplace earlierà all about the economy and developing it early
Development of Knowledge Economy
-‐ Context: must be familiar with the history of Australian economy -‐ Historical perspective: agrarianà industrialà knowledge based
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-‐ Depriving value from skill and commitment rather than tangible products produced
-‐ E.g. IBM produced 50% revenue from service divisions rather than product divisions (hardware)
-‐ Impact in Australia: o Primary sector (agricultural/mining) o Secondary sector (mfg) o Tertiary sector (provision of services) e.g. financial, law,
hospitality New Ways of Working
-‐ Design of jobs has significantly changed: o The self seeking worker-‐ no longer aligned to the organisation o Increase in casualization of workers (8.3 million workers in 2007
(27%)) o Outsourcing: contracting out non-‐core functions of organisation),
ensuring control on quality? Impact on organisational culture? Issues of trust?
o Telecommuting: work disseminated back to workers home. Problems: monitoring, impact on Elton Mayo’s work, maintaining social/work divide
o High rate in casualization, high rate of workers not engaged, virtual worlds—linking offices all over with conferences and board room meetings
Sustainability/Climate Change
-‐ Developed out of notions of Corporate Social Responsibility (CSR) -‐ The problem? People/organisations are using up the earths natural
resources much quicker then they can be replaced -‐ Ecological footprint modelling—the current population’s demand on the
planet has tripled in 30 years -‐ Why do HR managers need to worry?
o Internal and external stakeholders demand more responsible for environmental and social governance
o Organisations more attractive to investment funds o Impact on share value? -‐ Direction wanted to go, to respond to CSR,
networking, the way we are seen & deliver value to organisations o HR strategies need to deliver value to the firm through sustainable
work practices Changing Demographic Characteristics
-‐ Ageing population—to manage with legislation and expecting organisations to manage
-‐ Intergenerational conflict—found generations co-‐existing in the workplace
-‐ Declining fertility rates-‐ a drop in the population therefore a skill shortage but more people are needed
-‐ Declining mortality rates-‐ we are living longer therefore want to work longer
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-‐ Increased female participation rates in the workforce—equal gender contribution—gone is the predominate male worker; 47% of workforce are women
-‐ Global war of talent= huge issue of HR HR Policy & Planning Issues Linked to Demographic Changes
-‐ Workforce attraction and retention e.g. an outcry in W.A. for workers with a skill shortage in the mining industry—how can we attract the right candidates, and keep them?
-‐ Age and gender discrimination-‐ e.g. female dominated environment-‐-‐ > change inside to welcome the outside
-‐ Flexible working hours—not a matter of deserving them; is it acceptable to a business?
-‐ Work-‐life/work-‐family balance—catch= technology; we cannot escape it and are constantly tied and on guide
-‐ Career management-‐ how do organisations manage workers who don’t want to stayà rewarding and managing our careerà know what’s on offer and desired path-‐ through reward and training
Women & Work
-‐ The ‘Male Breadwinner Model’: o The ‘ideal’ worker o Harvester judgement 1997 o The context of early decisions of wages—changed; now much of
HR needs to be aware of -‐ Shift to dual earner families
o Woman now constitute approx. 47% of the total workforce o Approximately 48% of mothers now in paid work (including 45%
of mothers with children under 6 years) -‐ Increased emphasis on:
o Family friendly, diversity and work-‐life policies o Maternity and parental leave provisions o Improving women’s representation in senior management and
boards o Emerging recognition that a one size fits all response is not
sufficient Changing Nature of Work & Employment
-‐ Flexibility: o Numerical: workforce divided into:
§ CORE workforce § Periphery or contingent workforce § Functional § Working time § Considerable debate over who benefits from the new
flexibility -‐ Working hours:
o Longer and harder o Non-‐standard working week
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o 12-‐ hour shifts o Evidence of work intensification and increased stress on home and
families -‐ Casualization:
o Via casual employment, agency hire sub-‐contracting etc. o Short & long term employment o Limited access to benefits and leave o Deteriorating skill base
-‐ The New Employment Contract: o Individualised agreements and fixed-‐term contracts o Effects on job security o Negotiable entitlements o Scaling down of employee entitlements over time o N.B. Fair Work Act (2009) national employment standards and
other provisions Summing Up
-‐ Key features of the internal and external environment which influence HRM
-‐ The changing context in which HRM operates—globally and domestically, economically, politically and socially—has contributed to HRM’s rapidly changing role and its emergence as a key strategic partner in management
-‐ HR practitioners need to continue to be responsive to changes in the organisations environment
-‐ HR needs to become a more integral part of Org strategy design LECTURE THREE Employment Relationships, Industrial Relations & HRM
• Looking at the basic concepts of IR & how it relates to SHRM Objectives:
-‐ IR & how it differs from HR-‐ an institutional analysis, employers and connections with trade unions—mediating conditions of work
HRM & IR:
-‐ The term IR is used to describe the formal relationships between employers and trade unions or other collective groupings of employees, together with the institutional arrangements that arise from those relationships
-‐ Other terms used to cover broadly the same subject include employment relationships, employee relations and workplace relations
-‐ The relationship is often uneasy & contested -‐ For many HR practitioners, IR specifically refers to management of
employment relationship with a unionised workforce (pg. 83 TB) -‐ HR managersà to be effective— need to understand IR and all that it
covers; dynamics, contradictions & tensions of E.R
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What is the Employment Relationship? -‐ An economic exchange-‐ an agreement between the employer and
employee or the sale of the employee’s potential to work o What you get for giving up your time to work
-‐ A power relationship—whereby the employee agrees to submit to the authority and direction of the employer
o To mediate this is common law duties—open ended and don’t draft for everything – mediating control and dispute resolution with the evolution of employment law with awards
-‐ It is also a continuous and open-‐ended contract: o Employees can modify and restrict their actual work effort; o Employees can combine collectively to challenge managerial
authority The Employment Relationship
-‐ The multidimensional nature of the employment relationship creates the potential for conflict between the parties-‐ industrial conflict-‐ over such issues as wages, employment conditions and managerial prerogatives
-‐ This gives rise to IR systems which are the ‘rules, regulations and institutions that govern the employment relationship and which set the terms and conditions of work and employment’
-‐ Is interdependent in nature – e.g. to some extent, employers must seek a cooperative relationship with workers to gain their consent
o Workers have an interest in the organisations viability o When employees take a strike action—must have a formal action
of approval where as employers don’t -‐ HRM influences and is influenced by this system. HR practitioners must
work within the regulatory framework it provides Approaches to Industrial Relations
-‐ What is a frame of reference: o Refers to a persons perspective on the world o Comprises the assumptions, values, beliefs and convictions we use
to interpret and understand events in the world around us -‐ The effect it has:
o It determines: § How we expect people to behave § How we react to peoples actual behaviour and, § The methods we chose when we want to change that
behaviour -‐ Frames of reference and the employment relationship:
o Frames of reference determine how managers manage, how employees respond and what other societal groups think
-‐ Theories embedded are assumptions of how parties will interact
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Approaches to IR: -‐ Unitarist:
o IR is grounded in mutual cooperation, team work, and a sharing of common objectives
o There are no legitimate conflicting interests—conflict is pathological
o Trade unions are regarded as competitors for employee commitment and cooperation, interfering with managements’ right to manage
-‐ Pluralist: o Organisations are a coalition of competing interest groups—it is
managements role to mediate those interests o Unions are legitimate representatives of employee interests o A strong union movement is a necessity o Stability in IR is product of concessions and compromises between
management and unions o Recognition of competing interestsà sees trade unions as
legitimate actors -‐ Radical or Marxist:
o Conflict between employee and employers is inevitable product of competing interests each in our society
o Trade unions are logical employee reaction to exploitation and part of political process to fundamentally change society;
o HRM is manipulative and exploitative of employees Strategic Employment Relations: The Influence of Law
-‐ Suggest employers choose to avoid trade unions -‐ Australian workplace agreements/awards (AWA’S) -‐ HR-‐ designing systems within these frameworks and laws that allow them
Employment Relations
Avoidance Accommodation Cooperation
Compliance Power and responsibility for maintating the business are concentrated in management while diminishing the union’s role
The parties acknowledge conflicting interests of employees and employers; emphasis on achieving equitable outcomes
The parties place joint emphasis on mutual goals and integrative potential, as well as on increasing the “size of the (resource) pie”
Commitment New plant set-‐ups at Greenfield sites
Evidence of parties experimenting with quality circles and other forms of employee participation programs
Emphasis is on cooperative partnerships, manifested in joint structures and processes for sharing power and responsibility
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The Parties in Australian IR: -‐ State & Federal Governments -‐ Industrial tribunals
o Fair work Australia mediates interests and ensure work gets complete
-‐ State and federal employers -‐ Employer associations
o Lobby groups -‐ Trade unions -‐ Employees
Governments & IR:
-‐ Legislation: fair work actà regulating dispute management -‐ Employer: -‐ Tribunals:
-‐ Since 1904 in Australian, the formal IR system has had a rich history
involving government-‐ sanctioned compulsory conciliation and arbitration – a unique, centralised system for resolving conflicts and setting work rules
-‐ During the 1980’s, pressures to increase flexibility ad efficiency led to changes in IR laws that shifted the emphasis:
o From employer-‐union bargaining to individual negotiations; and o From national/industry-‐level bargaining to the work place level
-‐ This culminated in the highly controversial Work Choices legislation which seemed to shift power dramatically towards the employer
-‐ Work Choices was replaced by the Fair Work Act (2009) -‐ Prior Trade Unions had a capacity to get an award and tribunal passed -‐ Under Fair Trade—they cannot arbitrate-‐ unless parties give tribunals
and power to do so -‐ HR—all about sorting out issues without external influenceà about
choice Unions & the Union Movement
-‐ Trade Unions: o An organisation, consisting predominately of employees, the
principal activities of which include the negotiation of rates of pay and conditions of employment for its members (ABS definition)
o There are approximately 130 unions in Australia. They work both independently, and in a coordinated way-‐ as a movement through the peak body, the Australian Council of Trade Unions
o They still play an important role, however stagnating and not as influential today
Unions & the Union Movement
-‐ Approximately 19% of the 10 million employees in Australia are members of a union (known as union density)
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-‐ In 1954, 59% of Australia’s workforce was unionised. Between 1990 and 2008, density declined from 40.5% to just under 20%, but the slide has recently been arrested
-‐ Union density contains the following patterns: o A higher proportion in the public sector than the private sector o Higher rates of unionisation among full-‐time, than part-‐time
workers o Higher unionisation levels for men than women o Highest rates of unionisation in power, water and gas supply;
transport and government; administration and defence sectors Unions & the Fair Work Act, 2009
-‐ Industrial Association: the term used to describe the organisations that may represent either employees or employers;
-‐ Freedom of association: the rights of employees to belong or not belong to a union. The FW Act provides that employees are free to:
o Belong or not belong to a union o Be represented or not by a union o To participate or not in lawful industrial activities
-‐ Unions are not defined as parties to agreements but are covered by the agreement if they participated in the negotiations
-‐ Negotiation provisions under FWA is between employment—focus on HR approach and not heavily union based
-‐ Law is reflecting a unitarist approach as is the Australian economy Employers & Employer Associations
-‐ In the past-‐ employers formed employer associations to represent them in multi-‐employer bargaining and before industrial tribunals
-‐ The emphasis of enterprise bargaining on single employer bargaining has left to a shift in the role of employer associations more to assisting individual employers
-‐ Employer associations also provide services in training, award interpretation, legislation updates, HRM, dispute handling and how to counter union activity
-‐ With changing political and union environments, employers have adopted varying tactics:
o Some have become increasingly aggressive with unions, while adopting individualised employment contracts with employees
§ E.g. some key mining employers o Others have worked towards greater employee commitment with
union cooperation § E.g. NAB (International Frame of Reference with unions)
o Something mediated due to the current state of law Industrial Relations Processes
-‐ The processes of IR deal with the mechanisms for establishing wages and employment conditions and handling industrial disputes. Processes include:
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o Collective bargaining-‐ the process of negotiating between management and groups of employees and/or their unions;
§ The method used to resolve conflicts of interest between unions and employers
o Conciliation-‐ the process of a third party such as the current national tribunal, FWA assisting management and unions to reach an agreed settlement, an alternative may be private mediation;
o Arbitration-‐ the process of a third party such as FWA making a judgement
-‐ Traditionally, decisions of the AIRC relating to wages and conditions were called arbitrated awards. Negotiated agreements which the tribunal ratified were called consent awards
-‐ Modern awards now for one of the basic foundations of wages and conditions under the FWA 2009
-‐ Two main types of bargaining: collective & enterprise bargaining o Collective: agreement by employers and unions on the general
terms under which employees would consent to work § At the enterprise level and principle of GFB; collective
bargaining is the key process in the current Australian industrial relations regime
o Enterprise: bargaining that occurs at the enterprise level and with the concerns of the enterprise in mind
§ Agreement is between an employer and the unions that are most likely to represent the new employees.
The Bargaining Framework
-‐ Collective bargaining has been the customary way of settling many industrial disputes in Australia
o Previously, the national tribunal (formerly the AIRC) encouraged parties to try to resolve a dispute by direct negotiation before getting involved in the conciliation process. Arbitration was a last resort option
-‐ The arrangements by which the terms and conditions of work and the employment relationship are determined—are know as the bargaining framework
o Establishes the ‘rules of the game’ and ‘rules of the parties’. These are usually laid down by legislation
Good Faith Bargaining: Reflecting an Integrative Approach?
-‐ Agreement making is still framed between an employer and individual employee
-‐ Trade unions have no inherent privilege over other bargaining representatives that an employee may appoint
-‐ However the re-‐insertion of Good Faith Bargaining (GFB) obligations may lead to a convergence in theory and practice
-‐ Expects that the parties will attend the meetings arranged, will provide information and respond to proposals in a timely manner and will also give genuine consideration to the proposals from the parties in negotiation
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Possible Outcomes?
-‐ Enhance the coverage of collective bargaining -‐ Educate parties about best bargaining principles -‐ Provide industries with strong union coverage to consolidate their
position -‐ Allow individual employees to exercise their rights to enhance workplace
democracy However…
-‐ Will GFB encourage a shift towards a ‘high road’ approach by employers? -‐ Can you legislate for commitment? -‐ Will this new era of collective agreement making be about identifying
common interests and new solutions or will it be about taking back ‘lost ground’?
-‐ Recent industrial action figures The Australian Bargaining Framework Legislation Fair Work Act 2009 Institutions Fair Work Australia (encompassing the Fair Work Ombudsmen
and the Fair Work Division of the Federal Court) Participants Employers, employer associations, employees, unions Processes Collective bargaining, ‘GFB’, determinations for low-‐paid workers
in special circumstances Instruments National Employment Standards (NES), modern awards and
enterprise agreements (union & non-‐union) Summing Up
-‐ Industrial relations and HRM are both concerned with the relationships between employees and employers at work
-‐ For HRM practitioners, the IR system—its participants, the framework, frames of reference and the systems outputs—provide a continuous source of regulation and influence over HRM policy and practice
-‐ An understanding of this system is therefore crucial to the effective management of people
LECTURE FOUR HRM & THE LAW Objectives:
-‐ Examine the two main sources of legal obligations in the employment relationship-‐ the common law and the statute law
-‐ Explore the range of HRM issues which are subject to legal regulation -‐ Provide an introduction to the national industrial law system – the Fair
Work Act (2009) and its main provisions -‐ Consider the implications for HR policy and practice
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Sources of Legal Obligations: -‐ The HR profession must be familiar with the legal framework which
governs the employer/employee relationship and the legal issues which arise within employment relationships;
-‐ Law in Australia originates from two main sources: o Common law-‐ created by judges on previous cases e.g. bullying and
harassment in the workforce where managers as well as business’ can be fined
o Statute law-‐ created by parliament-‐ a response to issues in society and the economy
Defining the Employment Relationship
-‐ What is the ER? —Can be a blur; but is important to establish as it could be a subcontract otherwise
-‐ The rules and process peculiar to the employer and employee -‐ It is becoming increasingly difficult to tell who an employee is. Some
factors however include: o The right to exercise detailed control over the individual o If the worker is ‘integrated’ into the hirer’s organisation o If the worker is required to wear a uniform o If taxation is deducted from the worker’s pay o If the individual receives benefits such as sick leave or holiday pay
Sources of Legal Obligations
-‐ Two main areas of common law – where judges have made decisions pertinent to employment – contract law and negligence
-‐ Statute law: o Labour law-‐ governs the individual employment relationship o Industrial law-‐ regulates collective relationships; o Discrimination law; o OH&S laws;
§ Now W, H&S to standardise across all states of AUS o Other e.g. child employment, public sector employment
-‐ Employers have a duty of care Sources of Legal Obligations: Common Law -‐ Contracts of employment provide essential aspects of the employment
relationship; -‐ Workplace policies: may regulate virtually every aspect of employment
e.g. discipline, confidentiality, EEO, termination, etc. • They are not rules—but guidelines to change culture
to motivate and put a framework o Do policies form part of the contract of employment?
§ If the contract requires the employee to abide by the terms of company policies then those policies are incorporated into the contract and are enforceable
-‐ The common law also establishes the duties of both employers and employees which exist at law independently of the contract e.g.
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o The employer’s duty to pay an employee wages and to give reasonable notice of termination, etc.
o The employee’s duty of obedience, good conduct and act with fidelity and good faith
§ No longer obedience used however—but to be honest and open
Sources of Legal Obligations: Statute
-‐ Federal and state-‐based employment law also regulates employment relationships and industrial relations
-‐ The FWA aims to provide a unified system of industrial law in Australia. Some employees remain covered by state-‐level industrial law, where their employer is not a national system employer covered by the FWA
-‐ The FWA is the current major federal industrial legislation. It replaced the Workplace Relations Amendment (Work Choices) Act 2005. However the Commonwealth government’s intervention dated from the Conciliation & Arbitration Act (1904).
-‐ Used to be on individual awards—frustrating with interstate offices etc, -‐ Conciliation was mediation of employee/employer matters
Important of Contract & Policies The Legislation-‐ A Brief History
-‐ Federal & State Industrial Relations Systems: o Commonwealth Court of Conciliation and Arbitration est. 1904 o State governments established their own industrial tribunals or
wages boards o These bodies presided over a highly centralised and regulated
system of employment law § Very little decisions in the workplace
o Awards covered the majority of workers (80% until the late 1980’s & up to 15% more influenced by awards) [it wasn’t efficient in the end however]
o Minimum rates of pay and conditions were set by awards where approx. 96% of disputes were settled by consent awards
o National wage cases and test cases established major changes in wages and conditions across the board
§ Standardise no more—based on skills today Phase of Reform from mid-‐1980’s 1) Coordinated or managed decentralism (1987-‐1990)à change of economy with financial decline 2) Coordinated flexibility (1991-‐1996) e.g. Awards. – Based on skill knowledge; not just age—flexibility and rotating hours 3) Fragmented flexibility (1997-‐2006)à work choices turned over—siding with employer too heavily (parliament) 4) Unified national system (2006-‐2009)
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5) Now re-‐balancing the power in the employment relationshipà pluralist approach: a number of ideas conflicting—looks at conflict as positive and negative—opposed to unitarist with all the same ideas and unions; there are many parties on board A Fragmented Approach to Regulation – A snapshot from Qantas
-‐ The legacy of The Workplace Relations Amendment (Work Choices) Act 2005
-‐ Re-‐assertion of managerial prerogative -‐ Legislation premise on both parties ‘choosing’ the most appropriate form
of industrial agreement for their particular circumstances -‐ Problem—inequality in bargaining power, especially for ESL -‐ Problem? — Bargaining provisions based on a contact model of
agreement making it ‘take it or leave it’ basis. Labour markets and individuals do not always make choices that maximise their utility
-‐ Outcome: o ‘An Irish Stew’ (Alan Joyce, CEO of Qantas) of strategies to deal
with sections of the business -‐ Result: union, non union and Individual agreements based on strength of
industrial actors across the business -‐ Evidence of a compliance/avoidance strategy
o Flying under the radar—only completing tasks and becoming manipulative
-‐ Encouraging small business’ to give employees a lack of protection for unfair dismissal, etc,
-‐ Lack of power for ESL—as they are just greatful to have a job The Fair Work Act-‐ Institutional Structure
-‐ Australian Fair Work Act has office of ombudsmen—structured federally as a national legislation
-‐ Fair Work Act Institution o Fair Work Australia
§ Including the minimum wage panel o Office of the Fair Work Ombudsmen
§ Including Fair Work Inspections o Fair Work Divisions of the Federal Court & Federal Magistrates
Court Fair Work Act-‐ Main Provisions
-‐ Fair Work Australia (pt 5-‐1) and the Fair Work Ombudsman (pt 5-‐2) -‐ Minimum wages set (pt 2-‐6) -‐ 10 minimum conditions-‐ NES standards e.g. for redundancy money &
rewards -‐ Good Faith Bargaining (s2228) -‐ Protected industrial action (pt 3-‐3)à a process via legislation -‐ Union rights of entry (pt 3-‐4) -‐ Types of agreements (s172) -‐ Unfair dismissal regime -‐ Small business code (for some provisions varied for small businesses)
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The National Employment Standards—provides a floor of minimum conditions: -‐ 10 National Employment Standards -‐ Fair Work Act (2009) Part 2-‐2
o Maximum hours of work o Requests for flexible working arrangements—heavily weighted for
family e.g. students may be more likely to be rejected for extended leave due to full time study
o Parental leave o Annual leave o Personal/carer’s leave o Community service leave e.g. for jury duty o Long service leave o Public holiday work o Notice of termination and redundancy pay o A Fair Work Information Statement à every new job must
incorporate this Additional Instruments of Regulation
-‐ Modern Awards (FWA Part 2-‐3) o May include 10 conditions of employment o Reviewed every four years o Apply to all employees they traditionally applied to (income
threshold) -‐ Enterprise Agreements (FWA Parts 2-‐4)
o Can be single, multi-‐enterprise or greenfields agreement o Employees must vote to accept o Must satisfy ‘better off overall’ test o Must not contravene NES o Override award once made
-‐ Unfair Dismissal (FWA Part 3-‐2) o Protection against ‘Unfair Dismissal’ are defined as in S.385
§ Poorly presented in Work Choices which Fair Work Act helps out
Good Faith Bargaining
-‐ Attending and participating meetings -‐ Disclose relevant information a timely manner; -‐ Respond to proposals made by others bargaining representatives -‐ Give genuine negotiation/consideration to proposals of bargaining
representatives -‐ Refrain from ‘capricious’ or ‘unfair’ conduct that undermines freedom of
association or collective bargaining -‐ Recognising elected bargaining representatives
Importance of Enterprise Agreements
-‐ Workplace agreements: a legally enforceable industrial instrument (outside the realm of private law) negotiated between an employer and employees (or their representatives including trade unions)
-‐ E.g. Macquarie University Enterprise Agreement
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-‐ Why have an agreement? o Not happy with award provisions (not tailored to specific
conditions of each enterprise) o Secure a number of working conditions e.g. wage rates o Having all employment related issues, entitlements and processes
regulated into one document Modern Awards
-‐ Modern awards reduced and simplified previous awards -‐ The modern award conditions with the 10 NES form the safety net of
working conditions for all employees of the national system (the 10 NES are non-‐negotiable)
-‐ Much more stream-‐lined & not as heavy -‐ Enterprise agreements operate in addition to the above but must not
undercut the minimum conditions -‐ Enterprise agreements must meet the Better off Overall Test (BOOT)—
new contracts cannot surpass being anything less. Legal Issues for HRM
§ As HR-‐ we have to discuss matters, constantly remind managers of right conduct and demonstrate through training
-‐ Occupational Health & Safety o At state and federal level, governments have introduced legislation
obliging employers to responsible for occupational heath and safety
o Currently, there is a move to unify all OH&S regulation nationally -‐ Discriminatory treatment of employees
o State and federal Discrimination Law potentially touches every functional area of HRM –e.g. recruitment, selection, opportunities for promotion, training & development, etc.
-‐ Legal issues in relation to termination o Termination is regulated both by statute and common law o Regulation pertains to various elements of the right to hire &
fire—including reasons for termination, procedures, notice of termination payments required, complaint mechanisms and remedies for unfair or wrongful termination
State Legislation-‐ State Level Workplace Relations Legislation NSW QLD SA WA TAS VIC Principal Acts
Industrial Relations Act 1996
Industrial Relations Act 1999
Fair Work Act 1994 Power to be referred to the Commonwealth
Industrial relations Act 1979 Minimum conditions of Employment Act 1993
Industrial Relations Act 1984
Power referred to the commonwealth: Fair Work (Commonwealth Powers) Act 2009 (VIC)
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Labour Relations Reform Act 2002
Fair Work State Referral and consequential and Other Amendments Act 2009
State IR Legislation – associated matters Public Sector Public
Sector Employment & Mngmnt Act 2002
Public Service Act 2008
Public Sector Mngmnt Act 1995
Public Sector Mngmnt Act 1994
State Service Act 2000
Public Admin Act 2004
Leave & Holidays
Annual Holidays Act 1944 Long Service Leave Act 1955
Holidays Act 1983
Holidays Act 1910 Long Service Leave Act 1982
Long Service Leave Act 1958 Pub & Bank Hols Act 1972
Long Service Leave Act 1976
Pub Hols Act 1983 Long Service Leave Act 1992
OH&S and Worker’s Comp.
OH&S Act 2000 Workers Injury Mgmnt & workers comp Act 1998
Workers Health & Safety Act 1995 Workers Comp & Rehab Act 2003
OHS & Welfare Act 1986 Workers Rehab & Comp Act 1986
OH&S Act 1984 Workers comp & injury Mngmnt Act 1981
OHS & Welfare Act 1995 Workers Rehab & Comp Act 1988
OH&S Act 2004 Workers Comp Act 1958
Discrimination
Anti Descrimination Act 1977
Anti Descrimination Act 1991
Equal Op Act 1984
Equal Op Act 1984
Anti Descrimination Act 1998
Equal Op Act 1995
Implications for HRM
-‐ Some questions for HR managers to consider: o Does the organisation meet the NES? o What will be the nature of the relationship with unions? o Has the psychological relationship with employees been affected
by events of the recent past? For example, by the organisations response to Work Choices, the global financial crisis, redundancies or executive pay levels?
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o Does the organisation have policies and processes in place to consider requests from employees to change working arrangements? Should the working arrangements of the organisation be reviewed in any case?
o Does the culture of the organisation support male and female employees who take unpaid parental leave?
o How equal are pay rates in the organisation? o Is there a need to include a dispute resolution procedure?
Summing Up
-‐ Law governs the relationship between an employer and employee. These legal obligations arise from contracts, legislation, statutory agreements, awards and the common law
-‐ HR managers need to understand and comply with the legislation, and have an awareness of legal obligations owed by employers and employees to minimise an organisations exposure to disputes and litigation.
LECTURE FIVE Human Resource Planning Objectives
� To define human resource planning (HRP) and understand its crucial relationship with strategic organisational planning.
� Examine the nature and role of the human resource management information system (HRMIS) in HRP and SHRM
� Develop an understanding of the techniques of HRP and the advantages and disadvantages of the HRP process.
The Need for HR Planning
• Other than English, the most commonly spoken languages in Australia are Chinese and Italian
• The increasing cost of skilled IT personnel has forced India’s largest software provider to hire 5000 employees in Mexico
• According to the UN, more than 190 million people live outside their country of birth
• 20 years ago, 10% of Australians were born overseas, today that figure is 25%
• An estimated 60% of Chinese university graduates are unable to find a job because they lack marketable skills
• Japan will have 30% fewer inhabitants by 2050 and more than 1 million 100 year olds
• By 2020 China will have 40 million more men of marriageable age than women
• By 2050 population of Singapore could be fourth oldest in the world – after Macau, Japan and Korea
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Human Resource Planning and SHRM � HRP – sometimes called ‘workforce planning’ is:
¡ The bridge between HR strategies and HR functions. ¡ The process through which organisational goals are translated into
HR goals concerning staffing levels and allocation. � HRP ensures that organisations have the right people in the right place,
with the right skills, at the right time. � HRP guides the long-‐term resourcing of people in organisations – the
acquisition, use and development of human capital and knowledge assets. The People Resourcing Function Strategic Alignment
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Workforce or Human Resource Planning
} HR planning had its origins in manpower planning: } The Manpower Planning field had adopted a highly rationalized
approach – labour market analysts; } The field emphasised quantitative techniques and sophisticated
statistical modelling – but developed a credibility problem. } Over time, a diagnostic approach developed alongside the modelling:
} HR planners emphasised the need to diagnose the real reasons for mismatches in supply/demand.
} They used a mix of qualitative and quantitative techniques. HR Planning
} HRP involves: } Forecasting labour requirements for an organisation; } Predicting likely sources } Environmental scanning } Development of objectives and goals } Formulating the necessary steps to meet needs ie developing an
integrated set of policies and programs. } Evaluation of the planning process.
HR Planning Failure
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HRP asks the Following Questions:
} What are the strategic drivers impacting on the business over the next 5-‐10 years?
} What are the requirements to meet the Business Plan? } What work needs to be done to achieve these outcomes? } What organisational structure would best meet this need? } What are the high level capabilities required to successfully do the
work? } How can these capabilities be acquired and/or developed in the
workforce in the short, medium and long term? } How can these requirements be best met with current financial
resources? } What are the capabilities of the current workforce? Are they near
retirement or going on leave? } What are the consequences of not engaging in workforce planning
to meet future strategic directions? Stages of HR Planning
o Stage 1-‐ Analysis
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§ Involves the analysis of environmental factors, organisational direction, internal workforce and external workforce e.g. external/internal SWOT analysis
o Stage 2-‐ Labour Demand Forecasting § Forecasting is the method used to determine the demand
for human resources to help predict areas within the organisation where there will be future labour shortages or surpluses.
§ Forecasting involves statistical (quantitative) and/or judgmental methods based on qualitative analysis.
§ Demand forecasts are developed around specific job categories and skill areas relevant to the organisation’s current and future state.
§ Once the job categories or skills are identified, information will be sought to help predict whether the need for people with those skills or people in that job category will increase or decrease in the future.
§ Methods used include: • Managerial judgments – to obtain informed
estimates • Trend analysis – based on historical and current
personnel data in the organisation – establishes trends in retirements, resignations, dismissals etc.
• Time series analysis – eg projecting how many teachers will be needed in 2020; seasonal work flows in hospitality industry.
• Work studies – eg where new tasks/processes to be introduced.
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• Scenario planning and simulations • Correlating business data -‐ sales predictions,
projected turnover • Using the future budget as the starting point –
working back from costs – to meet goals, how many people at what cost are required/ affordable
o Stage 3-‐ Labour Supply Forecasting And Analysis
§ Supply forecasts are used to predict worker flows and availabilities.
§ There is a need to look at: § What labour resources are or will be needed and when; § Whether to use internal or external sources; § How much can the organisation rely on internal supply –
which skills and experience may not be obtainable internally;
§ What external sources will be utilised. § Methods for forecasting internal supply include:
• Calculating likely future turnover rates – the wastage analysis
Number of leavers in specified period x 100 Average number employed in same period
• Why are organisation-‐wide turnover rates of limited value?
§ Cohort analysis • Survival rate calculated for each cohort eg year of
hiring § Internal promotion analysis
• To calculate statistical probability that vacancies at each level will be filled internally
o Eg Markov model – mapping statistically what happens to each employee hired as a basis for establishing future needs.
§ Succession or replacement charts § Skills inventories § Markov Model
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§ Methods for forecasting external supply include: o Most labour markets are local: employers are
interested in trends within ‘travel to work area’.
o Statistics (more/less relevant for national and international labour markets) include
§ General population density § Population movements in and out of
area § Age distribution § Social class § Unemployment rates § School leavers § Proportion with higher education § Skill levels § Numbers in post-‐school
training/education for specific skills § Number of employers competing for
their services
o Stage 4-‐ Establishing the Demand/Supply Gap § Based on the forecasts for supply and demand the
organisation can compare the figures to determine whether there will be a shortage or surplus of labour for each job.
§ Determining expected shortages and surpluses allows the organisation to plan how to address these challenges.
§ Usually a balance needs to be reached between recruiting for immediate needs and recruiting for internal training, development or promotion.
o Stage 5 – GOAL SETTING AND STRATEGIC PLANNING
§ The purpose of setting goals is to focus attention on any problems and address these.
§ Goals should include specifics about what should happen with a job category or skill area and the timetable for when goals should be achieved.
o Stage 6 – MANAGING A LABOUR SURPLUS OR SHORTAGE
§ Options for reducing a labour surplus include: • Downsizing • Pay reductions • Demotions • Transfers • Work sharing • Retirement • Natural attrition • Retraining
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§ Options for avoiding an unexpected labour shortage include:
• Internal labour market strategies: • Overtime • Retrained transfers/promotions • Secondment • Turnover reduction • ‘Soft’ HRM eg career development; work and family
policies. § External labour market strategies:
• New external recruits • Temporary & casual employees – Note debate about
‘flexibility’ and whether use of flexible employment options is conscious choice in place of long-‐term HR planning.
• Outsourcing • Internships
§ Other: • Technological innovation
Reasons Why Systematic HR Planning Is Carried Out By Only A Minority Of Firms
-‐ Hostility to use of statistical techniques in place of managerial judgment;
-‐ The belief that HR planning while desirable is not essential to org/al effectiveness;
-‐ Prevalence of short-‐term outlooks among managers who do not believe their careers will be enhanced by long-‐term activities like HR planning;
-‐ Practical problems associated with inadequate historical data on which to base forecasts;
-‐ Ignorance of existing HR planning techniques; -‐ Devolution of responsibility for managing people – makes HR planning
impractical; -‐ Complexity and turbulence of business environment.
Human Resource Information Systems (HRIMS) • Early HRIMS were manual • More flexible, comprehensive information systems have
developed as combined result of: o Technological change o The growing complexity of government requirements for
reporting on workforces, payroll data etc. o Market in complete HRIMS software providers.
• HRIMS increasingly used as strategic tool for HR planning and SHRM generally.
• Emergence of web kiosks and employee kiosks • Facilitates more cost-‐efficient management of low value-‐added HR and
payment activities.
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Benefits & Features of HRIS
Scope of HRIS HRIMS Data: can include aggregated data on all aspects of the employment relationship
• Improved planning and program development 1
• Faster information processing 2
• Improved response times 3
• Decreased administrative and HR costs 4
• Accuracy of information 5
• Enhanced communication at all levels 6
• industrial awards, HR policies, salary, leave…
Administrative
• personal and job histories, records on recruitment and selection…
Operational
• all the above plus wastage, staff positions, labour market trends…
Strategic reasons
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The Purpose of HR Strategic Plan -‐ Business Drivers
o Sales Growth o Profit Growth o Customer/ Marketplace Focus o Leadership o Innovation o Quality
-‐ People Imperatives o Recruitment of high quality staff o Motivation of staff to deliver high performance o Reward and recognition for high performance o Development of staff to their potential o Retention of quality staff o Optimal utilisation of staff o Development of an adequate supply of leaders for future growth
Legal Issues with HRIMS
-‐ Confidentiality -‐ who has access? o Keys and codes
-‐ Protection of data -‐ Ethical issues -‐ Outsourcing -‐ Data ownership
Summing Up
-‐ HR planning affects all HR activities and is the strategic link between organisational and HRM objectives.
-‐ The measure of effectiveness of HR planning is whether the right people are available in the organisation at the right place and the right time.
-‐ HRIMS are enabling increasing accuracy and sophistication in HR forecasting and analysis.
LECTURE SIX Recruitment & Attraction of Talent Objectives
• The strategic nature and role of the recruitment process; • The contribution of job analysis to strategic recruitment; • Methods of effective job analysis; • Principal recruitment sources and techniques and when these might
be best utilised; • Advantages and disadvantages of internal and external recruitment
strategies • The emerging use of e-‐recruitment as a vital element in the evolution
of e-‐business
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Strategic Recruitment • Recruitment – the process of seeking and attracting a pool of qualified
applicants for a job vacancy. • A Strategic approach to recruitment includes:
o Questioning the need for recruitment: § Is a new appointment necessary? § Would some other change reduce the need to recruit?
o Establishing the business case for recruitment (see slide 5); o Evaluate effectiveness of existing recruitment methods; o Feed evaluation back into discussion of planned approach to
recruitment. Establishing the Business Case
• Key questions to ask: o Is there a business case to support this action? o Can the job be filled within the organisation? o Does the job need to be filled? Eg
§ Can the job’s functions or responsibilities be reallocated, modified or eliminated entirely? Can we afford to fill this position at this time?
o Is the cost justified? § What does recruitment cost?
• Recruitment consultancies typically charge upwards of 20% of first year salary of recruit; executive/search firms 30-‐40% of salary.
• Upwards of $2500 per head at entry levels • Between 15-‐20% of HRM department’s workload
each year. The Importance of Job Analysis
• Job analysis is: o The critical building block of the recruitment process. o The process of:
§ Gathering detailed information about jobs. § Establishing the essential criteria for job performance and
translating these into the qualities required.
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Job Analysis Methods
1. Observation 2. Interview existing jobholders and supervisors 3. Work diaries (relies heavily on the job holder to record activities
conscientiously) 4. Critical incidents logs 5. Equipment descriptions and training manuals 6. Questionnaires & checklists
a. Eg position questionnaires, job or task inventories etc. i. Eg McCormick’s Position Analysis Questionnaire (PAQ) (1987)
ii. The Work Profiling System – Saville and Holdsworth (1997) – separate questionnaires for: managerial/professional, service and administrative; and manual and technical. [www.shl.com]
7. Focus group discussions 8. ‘Experts’.
Job Analysis
• Job Analysis INFORMATION includes: o Job identification – title, dept, level o Tasks, duties and responsibilities to be performed o Relationships – superordinates, subordinates etc o Outputs/end results of job o Performance standards/objectives o Knowledge, skills and abilities (KSAs) o Competencies
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o The desirable and essential personal requirements to fill the job: § Physical requirements, intelligence, qualifications,
experience and expertise § Personality, disposition, special aptitudes and interests.
o Working conditions – workspace and employment conditions o Equipment used in job o Other information – transfer opps, training available etc.
Competencies
• Definition: o ‘A competency refers to an area of personal capability that enables
employees to successfully perform their jobs by achieving outcomes or accomplishing tasks’. (Noe and Winkler, Employee Training and Development)
• Competencies usually fall into two categories: behavioural/attitudinal and technical. Examples include:
o Communication skills o Aptitude for people management o Team skills o Customer service skills o Result-‐orientation o Problem-‐solving
• Required competencies vary by organisation & industry: • Eg Moloney (2000) – • ‘For companies launching on the internet, experiencing rapid market
growth and change, competencies such as breadth of vision, opportunism and drive will be important. For firms rethinking their strategy in the face of stiff competition – competencies such as mental toughness, attention to detail and prudence will be crucial.’
• Note, that in Australia, competency is also used in another way in HRM -‐ a competency standard is an industry-‐determined specification of performance which sets out the skills, knowledge and attitudes required to operate effectively in employment
o Example: Nursing Profession § http://www.anf.org.au/nurses_gp/resource_03.pdf
Job or Position Descriptions
• After the job analysis and competencies have been selected, the Job or Position Description is then drafted.
• A Position Description (PD) is a document, which reflects the purpose, accountabilities, and duties of a job.
• A PD should provide the reader with a good understanding of the role by providing information that clarifies and describes the job, its functions, and environment and reporting relationships.
• Traditionally contained o Title o Identification o Accountability statement o Roles and goals
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o Authority o Environment
• Today often contains o Title o Identification o Org. Chart of accountability processes o Position purpose o Competency requirements o Key outcomes o KPIs
Internal Sources of Recruits
-‐ Direct appointment or promotion by management -‐ Lateral transfer e.g. job rotation or secondment -‐ Internal advertising via intranet, memo, bulletin board -‐ Rehiring former staff
External Sources of Recruits
Forms of Advertising
-‐ Daily/weekly newspapers -‐ Professional/specialist journals -‐ Radio and TV eg defence forces -‐ Cinema advertising -‐ Internet
o Specialist recruitment sites eg MyCareer.com.au o Private recruitment agency sites o Company websites – ‘career @.’
• Newspapers • Professional journals Adver&sements • Job network • Private consultants Recruitment agencies • Seek out candidates with qualifica=ons that match requirements of client firm Execu&ve search firms • Secondary schools • University (undergraduates and graduates) Educa&onal ins&tu&ons • Employees refer poten=al applicants • Quality of applicants is generally high Employee referrals • Acknowledge applica=ons • Treat with courtesy and respect
Unsolicited applica&ons and résumés
• May offer placement services as part of their members benefits Professional organisa&ons • Possible source for applicants especially in blue-‐collar jobs and some professional jobs Unions • A senior employee is contracted for a set period of =me or to undertake a specific project
Execu&ve leasing and contrac&ng
• e-‐cruitment is the online recruitment process via the internet Online recruitment
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Choosing Recruitment Methods -‐ Precisely how will the recruitment approach used hit its target
audience? -‐ How will the method affect the organisation’s image in the labour
market? -‐ Time constraints – what is a tolerable delay in filling vacancies? -‐ Volume of applications the method is likely to yield & ability of HR
dept to administer them effectively. -‐ What are the potential advantages and disadvantages of
external recruitment? Internal recruitment? Recruitment Policies and Plans
o Organisations that engage in strategic recruitment typically develop a Recruitment Policy Statement and a more detailed Recruitment Framework or Plan:
o The Policy Statement: § Provides a broad, general statement of policy. § Defines and outlines the organisation’s recruitment
objectives and culture. § It may include definitions, scope, principles, responsibilities
and procedures and principles – in relation to such matters as EEO, hiring people with disabilities, acknowledging applications etc
o Example: o http://www.careers.qantas.com.au/Careers/Human-‐Resources.aspx
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o Recruitment Frameworks or Plans provide a more detailed statement of policies and procedures.
§ It covers such details as: § Who you need to engage for each stage of the process § If you need to seek approval to create a new role § Where you will go to attract candidates § If you require a panel § Which tools you will use in the screening stage § How you can provide and maintain candidate care § How feedback and final sign offs will be obtained § How long the recruitment process should take
o Example: o http://www.hyndburnbc.gov.uk/downloads/R&S_Framework_40
8.pdf Attracting Applicants—branding
-‐ In order to attract the right applicants some companies use ‘employer branding’ to convey their personality and image to potential employees and to attract top talent.
-‐ Company branding can attract talent by creating a unique (selling) proposition for potential employees and attract key talent.
-‐ What are the arguments in support of employment branding? How does it assist in recruitment? o It helps to attract people by:
§ Communicating a company's culture, values and beliefs. § Reflecting the personality of the company. In short, it
defines what makes the company unique and what it stands for.
§ Communicating to potential employees what it is like to work for the organisation and why long-‐term employees are retained.
o It helps to attract people with the ‘right fit’ with the organisation. o It also helps convince existing staff that it is an attractive place to
work – through the leadership shown, open communication and other elements.
LECTURE SEVEN Effective Employee Selection Strategic Selection
-‐ Selection is the process by which the company decides who will and will not be allowed in the organisation
-‐ The selection process involves making decisions about the appropriateness of individual applicants for specific jobs
-‐ The 3 most commonly used sources of information about job candidates are: o Application forms and resumes o Interviews o Background investigations e.g. references and police checks
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-‐ Additional techniques often relied upon: o Medical examinations o Selection tests
The Concept of ‘Fit’
-‐ Finding the best person or person with the best fit depends on what fit means in the context:
-‐ Best fit can refer to: o Job fit-‐ the best person for the job o Organisational fit-‐ the best person for the organisation in terms of
culture and value fit. Validation of Selection procedures
-‐ A decision to hire (or not to hire) requires that those making the decision clearly identify the criteria that distinguish successful from unsuccessful job performance AND use only predictive measures of job success that are valid and reliable.
Validity
-‐ The extent to which a technique used measures what it claims to measure-‐ often with reference to job-‐relatedness o I.e. test predicts ability to perform the job and not matters
unrelated to the job -‐ Two ways to test a techniques validity
o Criterion validity-‐do those who do well on this selection method also do well on the job and those who perform poorly on the test, also perform poorly on the job
o Content validity-‐ does the test constitute a fair sample of the content of the job? (Fair =random and comprehensive sample) e.g. a keyboard test used to hire a word processing operator.
Reliability
-‐ This refers to consistency-‐ of scores obtained by the same person when retested with the identical test or equivalent
-‐ Ways of estimating consistency or reliability o Retest estimate-‐ administer same test to same people at different
points in time o Equivalent form estimate-‐ administer one test and then an
equivalent form at later time o Internal consistency-‐ measured by administering a test and then
assessing the degree to which responses to items measuring the same characteristics vary. Eg. Ten questions about a person’s interest in working out of doors—same verdict?
Other Criteria for Effective Selection Process
-‐ Generalisability o Refers to validity over time, and for different context and people
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samples § E.g. is the psychological test for a nurse at a large hospital
valid for a small hospitial -‐ Utility
o Is the method effective in enhancing the selection decision-‐making § E.g. for sales representative-‐ is it worth investing in
personality tests to identify relative degrees of extraversion -‐ Legal and ethical
o E.g. use of medical, integrity, drug and other tests may be excluded under privacy laws
Factors that undermine the effectiveness of Interviews
-‐ Perceptual flaws associated with the process e.g.: o Expectancy effect-‐ expectations formed from a candidates CV and
application o First impressions o Candidate-‐order error o Influence of non-‐verbal behaviour o Stereotypes o Attraction bias and cloning effect o ‘Halo’ and ‘horns’ effect o Applications impression management
-‐ Interviewer skills o Effective structuring of interview o Framing questions e.g. avoiding multiple, leading or embarrassing
questions o Telegraphing expected answers o Listening ability o Eliciting sufficient responses o Retention (recall) and interpretation of responses
Interviews
-‐ Interviews are popular with employers; a clear majority state that the interview is the most important tool for them in making selection decisions
-‐ The traditional view is that interviews serve the following purposes: o Obtain predictive evidence as to likely behaviour; o Enables employer to attempt an assessment of personality,
competencies, appearance and manner of applicant o Employer can confirm, discuss and expand on details recorded in
application and resumes -‐ Interviews are however poor predictors of future job performance -‐ What function do they serve?
o Are employers attracted by relatively low costs? Do they discount the research evidence? Are they simply unaware of the evidence?
o Herriott (1989) identified three key functions that selection interviews serve:
§ Mutual preview function: the opportunity to meet face-‐to-‐
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face and exchange information unrelated to prediction of performance e.g. socialization function
§ Negotiation function: enables other negotiations to occur e.g. start dates, terms and conditions of employment etc. and suitable candidates persuaded to take job
§ Public relations exercise—creates good will for the organization especially as people expect to be interviewed.
Selection Tests
-‐ Provide information about candidate skills, abilities, experience, personality, reasoning ability and other characteristics that can be used to predict role performance.
-‐ Test providers: o Internal o Consultants o Assessment centres
Personality or psychometric tests
-‐ Dominant view is that there are five basic psychological constructs or traits that form the building blocks of personality o Extroversion/Introversion—the extent to which we enjoy
socializing, excitement and change o Emotional stability-‐ the extent to which we exhibit tension and
anxiety o Agreeableness-‐ the extent to which we avoid conflict and exhibit
good nature, warmth and compassion o Conscientiousness-‐ the extent to which we are well organized,
concerned with meeting deadlines and making the implementation of plans
o Openness to experience-‐ the extent to which we are imaginative, and flexible and view new experiences positively
-‐ Are these categories problematic? o E.g. if you were assessing agreeableness-‐ are all the elements in the
definition equally desirable in a candidate? -‐ Examples of personality tests e.g. the Thematic Apperception Test
(TAT) o TAT is a projective psychological test. o It taps a subjects unconscious to reveal repressed aspects of
personality, motives and needs for achievements, power, intimacy and problem-‐solving abilities
o Procedure: properly known as the picture interpretation technique-‐ subject is shown a standard series of provocative yet ambiguous pictures which the subject is asked to tell a story about:
§ What has led up to the event shown § What is happening at that moment § What are the characters feelings and thinking § What the outcome of the story was
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Critically Analysing Selection Tests (with a focus on personality tests)
-‐ Advantages: o Tests provide hard, specific criteria which facilitates comparisons
among applicants o They provide objective evidence to justify decisions-‐ decisions
have appearance of being rational and scientific o They provide insights and explanations for behaviour o Tests counterbalance interview processes
-‐ Disadvantages: o They provide imperfect indications of people/organisation fit-‐
reliance on tests assumes that: § Managers can identify the components of org/person fit; § Tests can measure these components; § Responses cannot be faked
o Tests lack validity – few links between particular personal qualities and job performance
o Lack of reliability and capacity to predict future performance e.g. will personality test provide same results if repeated in the same person
o Costly o Raise ethical and legal questions
§ E.g. discrimination against groups not used as the reference population
Assessment Centres
-‐ Intensive and comprehensive process incorporating a number of methods into one process
-‐ Usually involves: o Group of 10-‐12 candidates o Tested over 1-‐3 days o Include a range of work samples/simulations as well as
personality tests, aptitude tests and a panel interview -‐ Advantages: flexibility to introduce test of relevance, extensive
opportunity for observation -‐ Limitations: cost-‐ e, g. Involves a candidate and assessor ration of 2-‐1;
costs to develop tests; accommodating candidates for the period; number of staff involved (senior managers to observe, assessment centre staff, hospitality staff)
Reference Checking
-‐ Key issues in reference checking include: o Mediocre validity and reliability of references e.g highly subjective,
flawed in various ways (tendency to give good references) o Compliance with privacy laws; o Defamation risk o What procedures/policies should organisations have to ensure
these problems are minimised?
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§ Requirement to obtain explicit signed authority from applicant to do background checks;
§ Pursue only relevant reference data that pertains to the job/performance in question
Reaching a Selection Decision
-‐ Accept or reject? à Systematic considerationà realistic job preview
The Selection Report
-‐ Some organisations require reports to outline the thinking of the sectors and steps taken in making the decision
-‐ The report serves three major functions: o Documents necessary information for the ultimate decision-‐maker
to make a reasoned decision o Demonstrates compliance with policy and statutory requirements
such as equal opportunity legislation o Can be used as a basis for feedback to candidates
-‐ Selection report can be used as a review tool, providing information on a company’s recruitment and selection processes to feedback into continuous improvement
The Cost of Getting it Wrong:
-‐ Direct and indirect costs -‐ Further recruitment and selection -‐ Opportunity -‐ Impaired recruitment -‐ Loss of other key staff
Week 8-‐ No Classes
LECTURE 9 Developing Human Resources Global Thoughts on HRD
-‐ Korean matchmaking agencies demand graduation and employment certificates from singles to calculate their desirability rating
-‐ Asian students make up almost 1/3rd of enrolments at the top 20 US business schools
-‐ OECD estimates that if Australia raised its skill and education levels to the same levels as those of the US, its GDP per capita would be 4-‐7.5% higher
-‐ Girls who stay longer in school tend to marry later, have children later and have more skills
-‐ Less than 40% of HK’s university students believe they are good enough to sustain HK’s competitiveness as an international business centre
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-‐ 1/3 of international students who graduate from Australian universities are judged to be less than competent in English
Triggers to HRD
-‐ Business strategy o Renewal of competitive edge o Changes in product design o Changes in manufacturing process o Changes in management systems o Offering new services/changing consumer demands (life
insurance) o Improving quality of existing services and products o Refocusing strategy of the organisation and culture (change)
The Human Resource Development Function*
-‐ HRD – the acquisition of knowledge, skills and behaviour to enhance employees’ present and future effectiveness in an organisation
-‐ Few organisations implement HRD strategically – most simply react to emergent needs
-‐ Contemporary concept of the learning organisation o Places strong emphasis on the strategic use of HRD to enhance
intellectual/human capital-‐ and hence the ongoing contribution of people to an organisations goals
o A learning organisation is one in which people at all levels, individuals and collectively, are continually increasing their capacity to produce results that serve to achieve their shared vision
§ Encourages emphasis on growth of the person-‐ managing one as the resource
§ A role will never remain the same for a period of work The Learning Organisation
-‐ An organisation that: o Continually improves by rapidly creating and refining the
capabilities required for future success’ o Facilitates the learning of all its members and continually
transforms itself o Is skilled at creating, acquiring, and transferring knowledge and at
modifying its behaviour to reflect new knowledge and insights § Part of a good organisation is by joining with other areas to
broadening knowledge where mentoring is the key Benefits of a Learning Organisation
-‐ Systematic problem solving-‐ relying on TQM type techniques -‐ Experimentation – the systematic search for new knowledge and
continuous improvement (circles of excellence) -‐ Learning from past experiences-‐ the ‘Santayana principle’ – need
debriefing to fully understand implications
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-‐ Learning from others SIS (steal ideas shamelessly) aka benchmarking – pitching position in market standards—looking at other company inductions to observe competition
-‐ Kaizen-‐ continual improvement of a systematic structure to see one’s growth and improvement
-‐ Transferring knowledge quickly and efficiently through the organisation e.g. by seconding people with new skills within the organisation
Strategic HRD
-‐ Vital for HRM -‐ If planned well-‐ it will not fall over -‐ Strategic approach to HRM:
o Aligns training and development with corporate objectives e.g. providing the best customer service
o Begins with induction – key point to orient the company and environment
o Proves a multi-‐layered system of training and development to build human capital
o Incorporates a commitment to lifelong learning o Extents do include career management (succession planning)—
rolling out shadow plans and organisational charts o Links performance appraisal and award systems to completion of
training and development activities § Development plans-‐ appraisals along side but separate
therefore D.P are not always developed efficiently Training & Development
-‐ Training aims to improve current job performance—it refers to activities that teach employees how to better perform their present job i.e. immediate skills/knowledge
-‐ Development involves those activities that prepare an employee for future responsibilities-‐ the acquisition of new experiences, knowledge, skills and attitudes
-‐ Training = short term; development = on-‐going for the future Induction or Orientation
-‐ A good induction program contains o Orientation to physical facilities – what the business does o Orientation of the organisation-‐ showing how employees fit into
the team and how their role fits with strategy and goals of company
o Orientation – immediate collegues; key organisational relationships
o Health and safety information o Explanation of terms and conditions of employment and personnel
policies o Details of organisational history, products and services, culture
and values
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§ How it has grown o A clear outline of job and role requirements o Staff benefits, values, and participation in the community o Organisational chart-‐ benefit—to know how you fit in and see the
bigger picture o “The formal process of familiarising new employees with the
organisation, their job and the work units” o Reasons for induction:
§ Continuous process § Cooperative endeavour § Careful planning checklist § Focus on what’s important § Sample orientation program § Reduce employee anxiety § Follow up and evaluation
HRD-‐ An Instruction Systems Approach
-‐ The instruction systems approach-‐ essentially a strategic approach -‐ Emphasises:
o Beginning with an HRD needs analysis § Identifies what is needed at that time
o Formulating instructional objectives o Design of learning experiences based on adult learning principles
and learning theories o Delivery/implementation o Evaluation
-‐ It should be strategic -‐ Manages the investment – the people and development -‐ Needs analysis to thoroughly asses what is required in training and
development Strategic HRD
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Training Needs Analysis (TNA)
Learning Styles and Methods
-‐ Research on learning styles and strategies suggests that people learn in very different ways-‐ people have different preferences in relation to how they gather, select and process information
-‐ When designing training and development programs, HRD practitioners need to consider matching techniques to the learning needs of employees
-‐ Need to be able to adjust and adapt to this – structure t&d accordingly -‐ Daniel Kolb (1984) and Honey & Mumford (1992) proposed four basis
models of learning -‐ They suggested that effective learners use all four methods but the
emphasis may vary for each
Honey & Mumford’s Typology -‐ Activist-‐ prefers doing and experiencing (concrete experience)
o Responds most positively to situations offering challenge, to include new experiences and problems, excitement and freedom in their learning
-‐ Reflector-‐ observes and reflects (reflective observation) o Respond most positively to structured learning activities where
they are provided with time to observe, reflect and think, and allowed to work in a detailed manner
-‐ Theorist – wants to understanding underlying reasons, concepts and relationships (abstract conceptualisation) o Responds well to logical, rational structure and clear aims, where
they are given time for methodical exploration and opportunities to question and stretch their intellect
-‐ Pragmatist – likes to have a go try things to see if they work (active experimentation)
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o Responds most positively to practically-‐based, immediately relevant learning activities, which allow scope for practice and using theory
Preconditions for Learning & Development
-‐ Employee readiness: maturity and experimental factors; background knowledge and skills o Times when motivated and other with competing stressors
-‐ Employee motivation o Individuals recognise the need to acquire skills and knowledge;
continuing desire to learn -‐ Development: why do individual employee’s attitudes towards T&D
and career management vary? o Life cycle stages:
§ Work-‐family conflict issues § Dual career issues § Levinson et al (1978) Model of Adult Development-‐ divides
adulthood into early, middle and late stages-‐ transition phases between each
o Orientation to work e.g. instrumental orientation ‘living for the job’ o Individuals view of career e.g. traditional linear career, portfolio
career, spiral careers Methods of HRD
-‐ Useful way for distinguishing various approaches to HRD: o Developing non-‐managerial employees capacities
§ On the job and off the job o Developing managerial employees capacities
§ On the job and off the job Benefits of on-‐the-‐job training
§ On the job: conducted by supervisor or senior employee, hands-‐on experience, builds relationships, can lack formal structure, poor training skills can impede effectiveness
-‐ Ease of organising and administering training -‐ Lower costs associated with training -‐ Timely planning and implementation -‐ Emerging performance problems quickly recognised and addressed
Developing non-‐managerial employees/capacities: off the job
-‐ Conference or other discussion methods -‐ Classroom and laboratory training -‐ E-‐learning -‐ Simulation methods -‐ Apprenticeships and internships
Developing Managers and Supervisors: one-‐the-‐job experiences
-‐ Coaching and mentoring -‐ Understudy assignment -‐ Shadow executive
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-‐ Job rotation -‐ Lateral transfer -‐ Project and committee assignments -‐ Staff meetings
Off-‐the-‐job Experiences
-‐ Conferences, seminars and workshops -‐ Case studies -‐ In-‐basket training -‐ Leaderless group discussions -‐ Role-‐playing -‐ Management games -‐ Outdoor learning and adventure training -‐ University and TAFE education
Generation Y and New Graduates
-‐ Trends in employee learning: -‐ Greater emphasis on experiential learning -‐ More tailored forms of training -‐ More mentoring and coaching -‐ Customized career paths – ‘portfolio’ careers -‐ Providing ‘people skills’ -‐ Internationalization of graduate recruitment and development
HRD-‐ Career Management -‐ Major forces for career development programs:
o Competition for promotion o Constant innovation in technology o More competitive but scarce labor markets o Corporate rightsizing and restructuring
§ Simplifications/operational excellence o Implications for employee commitment and loyalty
Career Management and Mentoring -‐ Mentors are established managers who can advise and encourage
junior employees; -‐ Mentors offer:
o Career support (sponsoring, coaching, protecting) o Psycho-‐social support (counselling, role model)
-‐ Mentoring is effective when the mentee's goals and objectives are established clearly from the beginning. Establishing clear outcomes will assist both parties in maximising the potential benefits that may develop from the mentoring relationship.
-‐ Features of the mentor relationship Executive Career Management
-‐ Programs often include: o Specialist knowledge in operational and strategy development.
This may include:
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§ Strategic finance § Futures and inference thinking § Mergers and acquisitions § Marketing
-‐ Personal development in the areas of stress management, leadership etc.
-‐ Opportunities to experience executive roles – e.g. board meetings – ‘onboarding’, shadowing etc.
-‐ Mentoring Evaluation of the Training Function
-‐ Management will believe the money spent on T & D is worthwhile only if programs add measureable value.
-‐ It is therefore critical that HR managers assess and communicate the benefits of all HRD interventions.
-‐ There is a range of measures of HRD effectiveness including: o Reactions of participations – often called ‘happy sheets’ o Tests of learning accomplished o Measures of behavioural change in the workplace eg improved on-‐
the-‐job performance o Hard data on productivity, quality, sales and other measures of the
bottom line – the return on in investment (ROI) question. LECTURE 10 Managing Performance Defining Performance Management
� Performance management is the process through which managers ensure that employee activities and outputs are congruent with the organisation’s goals.
� It includes defining, facilitating and encouraging performance, measuring performance, feeding back performance information and managing poor performance.
� Our focus is on performance review or appraisal, and the processes of workplace counselling and discipline.
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Who Does the Assessing? -‐ Supervisor Review -‐ Self-‐Review -‐ Peer review -‐ Subordinate aor upward review -‐ 360 degree review
Establishing Performance Standards
� Relevance to job � Freedom from contamination � Reliability � Relate to both quality and quantity of output � Quantifiable and measurable � Able to identify individual contributions
Two Main Methods
� Individual rating scales and comparison methods � Eg rating forms, mixed standard scales, behaviourally
anchored rating scales. � Outcome-‐oriented approaches
� Eg Management by objectives, Balanced Scorecard Behaviourally Anchored Rating Scales (BARS)
� Descriptions of behaviour placed along a scale or continuum � Identification of dimensions of performance in terms of specific
behaviours � Five to ten vertical scales � Critical incidents � Reduction of rating error
Management by Objectives
� Performance judged by success in achieving objectives established in consultation with superiors
� Focus on goals rather than activities or traits � Strategic system which begins and ends with organisational goals and
objectives � Criticisms:
� Lengthy and costly � Short-‐term measurement � Lack of mutual goal setting � Encourages instrumental goal-‐oriented behaviour
Elements of Effective Performance Appraisal
� Top management support and commitment � Technique is valid and perceived to be fair
� Eg standards are job-‐related, consistent application through organisation,
� Effort made to minimise sources of rater error in appraisals;
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� Appraisal is not simply a set of judgments about performance but also emphasises employee growth and development and the setting of new goals;
� Effective feedback depends on: � The manager’s knowledge of the employee’s job and performance; � The managers support of the employee; � Involvement of the employee in the discussion; � A constructive, not destructive approach:
� Recognising effective performance through praise; � Focusing on solving problems � Focusing on the behaviour or results, not the person
Typical Rating Errors Common to Performance Reviews
-‐ Halo error -‐ Leniency or strictness error -‐ Error of central tendency -‐ Recency error -‐ Stereotyping
Importance of Training the Assessors
� How their understanding of the purposes for which appraisals will be used influences assessors approach the task.
� Training builds consistency � Training reduces subjective error by developing understanding of sources
of rater error � Improves effectiveness of feedback process
Effective Performance Appraisal
� Factors associated with managerial motivations: � Managers act in a political context; � Managers have their own goals – incl. Personal survival and
advancement à that may not include giving accurate appraisals. � Managers often have an interest in conflict avoidance – leading to
inflated appraisals. � Managers may also be motivated to ‘do down’ talent individuals
who threaten them, hobble the chances of rivals etc. � See criticisms of performance management in ‘Review
performance anxiety’ in AFR, Ineffective Performance
� Managing ineffective performance involves: � Determining the source or cause � Deciding on a course of action � Taking further action if it persists
Counselling
� Focus is on work performance � Confidentiality is crucial � Requires a problem-‐solving approach
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� Supervisor must � Communicate standards � Investigate gaps between standards and performance � Detect the source of the problem � If a personal problem, refer employee to qualified counselor
Employee Assistance Programs
� Wide ranging policies, procedures and actions for problems � Can extend beyond work performance � Principle of the total person � Confidential � Reactive and proactive � Professional counseling
� Critics � Evaluation � Is it appropriate for counselling to be provided in-‐house rather than by an
independent consultant? � Do you think on-‐line counselling is likely to work?
Disciplinary Systems ‘… A genuine attempt to ensure that expected employee behaviour and performance are maintained to required organisational standards.’ (Nankervis, Compton, Baird and Coffey, 2011 p.378)
� Recognise and correct unacceptable work practices � Early diagnosis and modification of worker behaviour � Employee rights
� Due process & Procedural justice � Outcome fairness
� Follow formal policies and procedures
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� Four basic steps of action:
1. Documentation 2. Investigative interview 3. Progressive discipline 4. Correction or dismissal
LECTURE 11 Strategic Rewards Management Impact of Rewards
• Understand the need to link remuneration policies and practices with an organisation’s strategic business objectives
• Identify key objectives of employee remuneration • Explain the mechanics of common job evaluation systems • Describe the concept of incentive remuneration and why its use is
spreading • Explain why an organisation provides benefits to its employees
Total Reward System
Vroom’s Expectancy Theory
� Expectancy theories of motivation make the fundamental point that our ongoing motivation at work is affected by the expectations we form and our experience of whether these are met over time.
Attract
the right people at the right time for the right jobs, tasks
or roles
Retain
the best people by satisfying their
work-‐related needs and aspirations and recognising & rewarding their contributions
Develop
the required workforce capabilities by recognising and
rewarding employees for knowledge, skill and ability enhancement
Motivate
employees to contribute to the best of their
capability by recognising and rewarding high individual and group
contributions to meeting the organisation's strategic objectives
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� The expectancy theory of motivation focuses on outcomes (not needs like Abraham Maslow/Herzberg).
� Vroom, hypothesises that in order for a person to be motivated that effort, performance and motivation must be linked. He proposes three variables to account for this: Valence, Expectancy and Instrumentality.
Expectancy
� Expectancy is the belief that increased effort will lead to increased performance i.e. if I work harder then this will be better. This is affected by such things as:
� Having the right resources available (e.g. raw materials, time) � Having the right skills to do the job � Having the necessary support to get the job done (e.g. supervisor support,
or correct information on the job) Instrumentality
� Instrumentality is the belief that if you perform well a valued outcome will be received i.e. if I do a good job; there is something in it for me. This is affected by such things as:
� Clear understanding of the relationship between performance and outcomes – e.g. the rules of the reward ‘game’
� Trust in the people who will take the decisions on who gets what outcome � Transparency of the process that decides who gets what outcome
Pay Determination in Australia
� Reward strategies and practices are influenced by the external environment
� From 1904 – conciliation and arbitration system dominated wage determination. Wage standards for the majority were strongly shaped by award determinations since 1904 eg Harvester judgment, skill allowances etc
� From 1991, there was shift towards decentralised pay-‐setting through agreement-‐making at enterprise level
� WorkChoices 2005. � Fair Work Act 2009 – the Minimum Wage Panel of Fair Work Australia
reviews and sets the minimum wages for national system employees. � For most workers, Modern Awards and enterprise agreements currently
base wages on the minimum wage as modified. � There is no limit to how much an organisation may pay above those
minima.
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Types of payment
Benefit Plans
� Mandatory benefits � Provision for employee economic security � Include such benefits as superannuation, workers’ compensation,
and various forms of paid leave. � Voluntary benefits � Enhance an organisation’s ability to attract and retain high-‐value
employees and offer employees a more appealing ‘value proposition’
� Includes such benefits as company cars, self-‐education, computers, mobile phones, subsidized meals, discounted mortgages, and salary sacrificing for school fees, cars and gym membership.
� Development of the Cafeteria Benefit Scheme – individualised baskets of benefits
Performance Based Pay
Base pay • The foundational or }ixed component of employee remuneration -‐ this is generally regarded as the pay best suited to addressing the objectives of staff attraction and retention
Bene}its • Financial entitlements that directly supplement the cash base pay, including employer contributions to superannuation, low interest loans, school fee assistance etc.
Performance-‐related pay • Also known as incentive plans, these are }inancial rewards given in recognition of past performance and in order to reinforce and enhance future performance
The case for: � PBP motivates behaviour – according to
Organisational Behaviour theories (eg Agency, expectancy, and goal setting theories) all emphasise the centrality of employee cognitive processes to understanding and managing the relationship between rewards and task motivation.
� Performance-‐related rewards operationalise the ‘equity’ norm of distributive justice;
� Reduce the need for other types of management control;
� Signal key desired behaviours – therefore focusing effort in desired directions;
� Supports a performance-‐oriented culture and entrepreneurial behaviours.
The case against: � Incentives undermine intrinsic interest in the job; � Financial rewards can motivate people to pursue
one thing above all else; � Rewards can damage intrinsic motivation; � Rewards rupture cooperative work relationships
and encourages destructive, competitive behaviour; � Rewards ignore underlying reasons for work
problems; � Rewards discourage risk-‐taking; � Performance incentives lead to an entitlement
mentality; � Send symbolic message that management believes
employees will not perform without material incentives.
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Critical Issues with Performance pay
� The behaviour/performance LINK must be clear; � Pay increases must follow immediately on performance for connection to
be apparent; � The process for determining payment entitlement and amounts must be
valid and reliable; � Implications for psychological contract
� The importance of trust � Equity and fairness � Expectancy theory – what is essential is relative levels compared
to past and future expectations and peers; Design/Implementation for HR
� Equity and fairness � Equity Theory:
� People evaluate the fairness of their situations by comparison with other people.
� Key concepts: � Distributive justice (also distributive fairness). The
perception that rewards is distributed in relation to contribution.
� Procedural justice (also procedural fairness) – a focus on the methods used to determine the outcomes.
� Expectancy theory and reward attainment � Secrecy
� Should individual remuneration be secret or open to scrutiny? Pay Secrecy
Strategic Reward Alignment
1. Preparing a statement of reward philosophy and strategy 2. Determining total reward mix 3. Determining remuneration levels 4. Ensuring strategic fit or alignment 5. Communicating the deal
Advantages 1. Reduces pressure on pay increases; 2. Facilitates personalised rewards and incentives; 3. Eliminates need for mgmt to defend decisions
publicly; 4. Can facilitate motivation; 4. Curtails costs of mistakes; 5. May generate constructive competitive
behaviour.
Disadvantages 1. Generates distrust in payment system; 2. May create unconstructive competitive
behaviour; 3. May impede teamwork; 4. Reduces morale -‐ people generally over-‐
estimate the differentials; 5. Reduces morale where workers perceive
unmet expectations or inequities.
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Link to Performance � The concept of pay for performance often has strong employee support -‐
the actual implementation of schemes often lack support (designing proper metrics and ‘fair’administration)
� 1. Goal setting stage eg meaningful targets (based on what is easily measured or what is important? Can encourage dysfunctional behaviour)
� 2. Evaluation stage -‐ subjectivity in appraisal and undermining development
� 3. Linking evaluation to pay -‐ how much is in the ‘pot’. Is there enough to make meaningful distinctions
Potential Negatives in PRP
� Concerns about equity, procedural and distributive justice � Some research suggests strong link between negative views and
organisational commitment (Psychological Contract) � *Pfeffer claims that, despite their popularity, most plans share two
attributes: They absorb vast amounts of management time and resources, and they make everyone unhappy.
*The Human Equation: Building Profits by Putting People First, Harvard Business School Press, 1998). LECTURE 12 Occupational Health & Safety and Employee Wellness The Extent of the Problem
-‐ There are 2900 work-‐related deaths and 650, 000 work-‐related injuries in Australia each year
-‐ The workplace-‐related deaths include 240 fatalities p/a with an average of 50 deaths in the construction industry alone
-‐ Direct and indirect costs – e.g. accidents and deaths in the construction industry cost $100 million p.a., and almost 50,000 weeks of lost working time.
-‐ Potential Hazards o Physical factors e.g. noise, electricity, non-‐ergonomic furniture o Chemical agents or other hazardous substances eg asbestos o Workplace organisation e.g. loading procedures, repetitive actions. o Stress o Violence or physical or psychological harm from work colleagues
Perspectives of O, H&S
� Medical model ¡ An emphasis on diagnosis and treatment rather than the
prevention of illnesses and disease ¡ Medical or physical approaches often seem narrowly focused or
unable to fully explain causes or to devise suitable preventative strategies
¡ Occupational Epidemiology
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� Research ‘epidemics’, or the incidence of diseases and illnesses in workplaces, and attempt to establish their causes and solutions
¡ Industrial Psychology � The study of employees’ psychological reactions to their
workplaces � Focus on individual workers – Michael Quinlan argues this
undervalues structural causes. ¡ Industrial Sociology
� The study of interpersonal communications and relationships in the workplace
� Attributes many OHS issues to aspects such as lack of work control over their work, production imperatives, associated reward (and bonus) systems etc.
¡ Ergonomics and Occupational Hygiene � Aim to eliminate risks and improve productivity by
modifying the physical arrangements and conditions of the workplace
� Criticised for having an overly narrow focus and causative approach.
Employee Wellness
� OHS concentrates on identifying physical and psychological hazards and risks and their prevention or elimination.
� Another strategic intervention by HRM includes wellness programs. � The aim of wellness or wellbeing programs is:
¡ To encourage employees to maintain their fitness and health. ¡ Reduce employee’s risks of heart disease and cancer.
� These programs include broad preventative programs concerned with overall employee lifestyle issues eg need for regular exercise, weight control, proper nutrition – through nutrition education, exercise schedules, meditation classes, volunteering programs.
Union Approaches
¡ ACTU vision 2005–2015 Support employers, employees and all those in the supply chain to develop cultures and attitudes, and accept responsibilities, that achieve safer places of work and safer methods of working so that Australian workplaces are free from death, injury and disease
¡ Cooperating with governments to harmonise the present state and federal OHS laws towards standard national OHS legislation
HRM & OH&S
� Since the 1980s, state and federal legislation has been enacted concerning specific occupational risks and hazards as well as more comprehensive OHS legislation. The three planks of this legislation are:
� Prevention � Compensation
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� Rehabilitation � National ‘model’ Workplace Health and Safety Act under
negotiation from 2008 -‐ to replace inconsistent state and territory regimes with a single OHS system
� NOTE: New Federal Workplace Health and Safety Act 2011 (Cth) has now been enacted
� Each jurisdiction will be required to enact laws that mirror the model national Act.
� What responsibilities does legislation raise for HR managers? � These range from:
� Strategic level of current issues, legislation to new work processes � Operational level from presence on workplace committees to
support and advice � Administrative level can range from coordination of collection of
statistics to secretarial support for committees OH&S Law
• 1970s concern with costs • UK influence (self-‐regulation) dominant over US (standards and
penalties) • The ‘Robens model’ (1972) UK • The Williams Report (1981) NSW
• Principal elements of Australian system are: � Self-‐regulation, with active involvement of employers, unions and
government. � Duty of employers to provide a ‘safe system of work’. � Workplace-‐based tripartite committees with responsibilities to
provide training, inspections, consultation, information, issue provisional improvement notices, order that unsafe work ceases etc.
• Recent amendments in NSW and ACT to introduce offences of industrial manslaughter against negligent employers and senior managers.
Workers Compensation and Rehabilitation Legislation
� State and federal legislation – Australia has 10 systems in operation: what are the implications of this for employees?
¡ Differences in coverage mean workers may be covered for compensation in one jurisdiction but not in another.
� More than 300,00 Australian employees lodge workers compensation claims annually.
� HRM managers need to: ¡ Undertake comprehensive analysis of accidents and workers’
compensation trends; ¡ Develop programs to address the various OHS mgmt issues
involved – eg? ÷ Risk management. ÷ Build effective relationships with rehabilitation and
insurance providers. ÷ Effective and comprehensive safety training,
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÷ Consultation on work design and redesign ÷ Efficient rehabilitation programs which ensure workers
return to work as quickly as possible � How does this sit with the Fair Work Act 2009 (Cth):
¡ See General Protection provisions, particularly Pt 3.1, Division 5, and Section 351. Temporary absence from Work
Issue 1-‐ Accidents at work
� Need to be able to: ¡ Assess extent and costs to industry and society (imprecise) ¡ Identify cause and build in prevention ¡ Develop an effective framework for prevention and mgmt
� Accident reduction involves: ¡ Comprehensive safety policies ¡ Specialist OHS function ¡ Safety awareness, prevention and training programs ¡ Medical, first aid and workers’ compensation systems ¡ Fire drills, protective clothing and equipment ¡ Safety incentive and prevention programs ¡ Accident investigation and analysis
Issue 2-‐ Smoking in the workplace
� The most heated OHS issue of the late 1980s and the 1990s � More and more companies have implemented workplace-‐smoking
policies. � Reasons for smoke-‐free policies:
¡ Financial ¡ Legal ¡ Health ¡ Corporate image
� Smoke free policies include bans on smoking, access to ‘quit’ programs, and the distribution of health promotion literature.
Issue 3-‐ Occupational Stress
� Increased pressure on employees – work intensification, information overload, organisational change etc
� Prominent source of legal action � Series of research studies linking work factors to stress � No agreed definition of stress:
¡ Definitions focus on the cause, responses, individual worker and their environment.
¡ Physiologically, it is the body’s reaction to a perceived threat that requires either a fight or flight response.
� Symptoms – fatigue, exhaustion, indigestion, high blood pressure, insomnia, inability to relax, increased drug use, physical or emotional breakdown, ‘burnout’.
� NB not all stress is destructive…
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Managing Stress � Implement a preventative strategy – including a stress diagnostic system
and regular evaluation. � Stress management programs � Training individual employees to manage stress symptoms effectively � Eg Relaxation, exercise, diet, talk, planning and time management,
delegation etc � Employee counselling � Specific prevention measures � Eg stress reduction programs – incl. improving supervisory skills,
reallocating workloads �
Issue 4-‐ Workplace Bullying
� Bullying is: ¡ ‘The systematic persecution of a colleague, subordinate or
superior, which, if continued, may cause severe social, psychological and psychosomatic problems for the victim’. (Einarsen, D. 1999, in the Int/al Journal of Manpower)
� Research by Sheehan et al (2002) in HR Monthly, estimates workplace bullying costs Australian employers $6-‐$13 bill p.a.
� What forms does bullying take? ÷ Persecuting or ganging up on an individual ÷ Making unreasonable demands or setting impossible work
targets ÷ Making restrictive or petty work rules ÷ Constant intrusive surveillance ÷ Shouting or abusive language ÷ Physical assault ÷ Open or implied threats of demotion or dismissal ÷ Online bullying?
� Consequences: ¡ For the victims
÷ Depression, anxiety, decreased commitment, job satisfaction
÷ Psychological and physical ill-‐health ¡ For the organisation include:
÷ Reduced efficiency, productivity and profitability ÷ Adverse publicity ÷ An unsafe work environment ÷ Increased absenteeism, sick leave and staff turnover ÷ Costs associated with counselling, legal action and
compensation Issue 5-‐ Potential Hazards of Mobile Phones
� No conclusive research evidence but some studies link exposure to electromagnetic radiation to both the incidence of lymphoma and their rate of growth.
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� Further research is currently being undertaken both domestically and internationally
� Emerging OHS issues include: ¡ Work intensification & stress of 24/7 phone access. ¡ Potential flammability of mobile phones near petrol; ¡ Accidents caused by their use while driving; ¡ Implications for costs within organisations?
Risks of International Travel
� Increased terrorism � Medical conditions such as deep vein thrombosis; severe acute respiratory
syndrome; bird flu and swine flu. � Stress – fatigue, jetlag, disruption of normal body rhythms, cancelled
flights, lost baggage, robberies, missed family functions, family confrontations regarding infidelity
� Employers advised to: � Monitor levels of travel required � Develop alternatives � Establish codes of practice � Discuss risks personally � Examine and communicate levels of insurance and workers’
compensation entitlements Managing OH&S Programs
� Top management commitment � Cohesive approach to promotion, communication, training and
development activities � Adequate protective and medical/first aid facilities � Risk management, recording, analysis and development systems � Consultative and monitoring mechanisms � Integrated approaches
