HSC BUSINESS STUDIES HUMAN RESOURCES

ROLE OF HUMAN RESOURCE MANAGEMENT

Human resource management refers to the management of the total relationship between an employer and employee in the workplace. It includes functions such as recruitment, equal opportunity, training, development, separation and how they can be aligned to the business goals.

HRM is one of the most important business functions as staff costs are often more than 60 per cent.

STRATEGIC ROLE OF HUMAN RESOURCES

The strategic role of HR is to ensure that productivity of a business can achieve its fullest potential because the employees of the business are effective and efficient in the way they go about their tasks.

The benefits of adopting a strategic role to HR are the development of a highly skilled workforce and the employment of a workforce relevant to the organisational needs of the business

An increasing no. of business takes a strategic approach to HR by:

- Seeing an effective workforce as a way of adding values to all areas of the workforce- Focusing strategy to retain, reward and motivate effective and efficient workers to achieve

the business’ goals

Over the next decade, the major challenges for HR management are:

- Retaining and developing talented staff- Improving leadership- Managing the ageing population- Succession planning

INTERDEPENDENCE WITH OTHER KEY BUSINESS FUNCTIONS

HR and operations

The operations function & Human resources department work closely to ensure that the business has recruited staff with the relevant skills and experience necessary to produce the product. The human resource department will monitor the performance of employees involved in the production of goods and services and hence implement training and development initiatives

HR and marketing

Research gained from marketing provides an indication of the type of staff that needs to involved in bringing the product to the customer. HR needs to hire and train employees for marketing.

HR and finance

The information gathered from the finance function such as earnings, productivity and customer satisfaction provides tremendous insight into staffing needs of a business. HR is also required to hire and train competent staff in the finance department.

OUTSOURCING ***- HUMAN RESOURCE functions- USING CONTRACTORS – DOMESTIC, GLOBAL

Outsourcing refers to the contracting out of particular functions of the business to an external specialist in order to undertake one or more KBFs.

HR is the second most frequently outsourced function after information technology.

Reasons For Outsourcing the Human Resources Function

The Human Resources Function:

- Provides the ability to access staff whose specialty is HRM. These staff would have a better understanding of issues can advise the firm on the most appropriate strategy

- Allows managers to focus on the core business operations. This means the firm can focus on production & attending to the needs of its customers

- The decision can generate cost savings as this reduces the need to employ full time staff for Human relations

Issues with outsourcing the HRM

- There is the chance that the company which was chosen may lack an understanding of the key aspects of the business E.g. Business Culture

- The key relationship between staff and their line managers must continue to be developed within the business to ensure that the work on relationships still has to be handled

A contractor is an external provider of services to a business. It may be an individual or a business.

Contracting is generally recommended for non-core functions, allowing staff to focus on the broader aspects of managing a firm.

KEY INFLUENCES

STAKEHOLDERS – EMPLOYERS, EMPLOYEES, EMPLOYER ASSOCIATIONS, UNIONS, GOVERNMENT ORGANISATIONS, SOCIETY

Employers

Are individuals or organisations that pay others to work for their business. They are often the owners and take responsibility in the organisation’s goals. They are vital as they provide employment opportunities and determine wages and working conditions.

In large businesses:

- Managers are appointed by Shareholders to take on this responsibility & consult with owners to develop strategies

- Human resource departments are also hired. Human resource departments are a specialist unit in a business that has as its main role the management of the issues involved in the employment relationship. Their roles would include working with other departments to recruit the appropriate staff and implementing a range of training and development programs to cater for the changing staffing needs.

Employees

An individual who provides his or her skills to a business in return for a regular source of income. This may be full-time, part-time or casual.

They were traditionally just workers, but are now considered in the decision making process, hence allowing for increased motivation and workplace efficiency.

Currently, Employees are seeking a greater recognition of the role that leisure and family have in their lives. Thus employees, with the assistance of trade unions have encouraged employers to introduce a number of initiatives aimed at developing family-friendly practices (i.e. provision of childcare centres)

Employer Associations

- Organisations that aim to promote the interests of employers within the business environment.

- They lobby governments to develop policies that enhance the interests of the employers. Examples are the Business Council of Australia and NSW Nurses’ Association.

- Represent interest of employers in specific areas such as negotiations with employees and unions, and acting as lobby groups for the interest of their members.

Unions

- Organisations that represent groups of employees on issues such as pay and conditions, health and safety, and job security.

- Role is to provide support, advise and represent employees when making collective agreements, wage negotiations and industrial conflicts, and act as a pressure group to highlight workers’ concerns.

- Peak body is Australian Council of Trade Unions (ACTU).

Government Organisations

- Establish the legal framework by which employers, employees and trade unions coexist and operate within the employment relationship.

- Establishes independent organisations such as NSW Industrial Relations Commission and Fair Work Australia to support this legal framework. These organisations regulate and support HR to ensure compliance with the law.

{Fair Work Australia – Organisation established under the Fair Work Act 2009 (Cth). Their primary function is to encourage the prevention and settlement of industrial disputes between employers & employees through a process of conciliation and arbitration}

Society

- A stakeholder is an individual or group with an interest in an organisation and its activities. Society as a whole has an interest in the outcomes of HR processes in businesses.

- Issues such as discrimination and harassment are becoming publicised. Businesses must act consistent with the views of society.

LEGAL – THE CURRENT LEGAL FRAMEWORKo THE EMPLOYMENT CONTRACT – COMMON LAW (RIGHTS AND OBLIGATIONS OF

EMPLOYERS AND EMPLOYEES), MINIMUM EMPLOYMENT STANDARDS, MINIMUM WAGE RATES, AWARDS, ENTERPRISE AGREEMENTS, OTHER EMPLOYMENT CONTRACTS

o OCCUPATIONAL HEALTH AND SAFETY AND WORKERS COMPENSATONo ANTIDISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY

The employment relationship is subject to a considerable number of regulations and laws. Over the years, the government has established the legal framework by which employers and employees are

encouraged to coexist cooperatively. The current legal framework that governs most issues relating to employment in Australia is the Fair Work Act 2009 (Cth) and the Fair Work Regulations 2009 derived from the Act.

The employment contract creates obligations for both employer and employee, and all businesses operate within a legal framework of common law and statute law — that is, law passed by federal and state parliaments in Acts.

An employment contract is a legally binding, formal agreement between employer and employee.

An employment contract creates rights and responsibilities for employers and employees. These are enforceable by laws, such as those governing:

- a safe workplace etc.

Contracts can be contracts of service, which is the standard employer-employee relationship or contracts for service, where a contractor such as a builder will perform a specific job for a set time.

COMMON LAW – Rights and Obligations of Employers and Employees

The common law is developed by courts and tribunals.

Employee Employer

Obligations - Look out for employer interests

- Obey employer instructions (must be reasonable and lawful)

- Perform work with due care

- Disclose information they receive that is relevant to the employer as well as access to processes they invent.

- Pay employees fairly and as agreed in the contract

- Must not act to damage employee reputation or humiliate them, including providing honest future references

- Duty of Care (Reasonable care for the safety of employees) i.e Providing a safe work environment

Rights - To work in an environment that does not unreasonably damage their physical, emotional or mental well-being

- To dismiss employees in certain situations; must be wary of unfair dismissal laws though.

Statutes are laws passed by parliaments and they take priority over common law. They are often amended to reflect changing workplace conditions and government policy. The current statute law that establishes employment contracts is Fair Work Act 2009 (Cth), which provides a safety net of

enforceable minimum employment terms and conditions though the National Employment Standards.

Minimum Employment Standards – Fair Work Act provides a safety net of enforceable minimum employment terms and conditions through the National Employment Standards which sets out ten minimum workplace entitlements which apply to all employers and employees in the national workplace relations system. (Do we need to know the 10 Employment Standards?)

Minimum wage rates – Applies to employees not covered by awards or agreements whereby contracts must offer at least the minimum wage for it to be valid. The Minimum Wage Panel determines the minimum wage at national level for each industry, reviewing wage rates annually. The panel’s aim is to establish and maintain a safety net of fair minimum wages.

Awards are legally binding documents containing minimum terms and conditions of employment, in addition to any legislated minimum terms for an industry or occupation. They must contain the minimum employment standards and differ from industry to industry. Currently 15% of workers are covered by awards. The process for making an award requires lodgement of a dispute (‘paper’ or real) by a union or employer association, as the Constitution only allows for dispute settlement at the federal level.

Enterprise Agreements are collective agreements made at a workplace level between an employer and a group of employees about terms and conditions of employment. Enterprise agreements are the main way working conditions are determined in Australia and unions usually negotiate on behalf of employees. Under the national system employees must be better off under an enterprise agreement than the relevant award for it to be valid.

Other Employment Contracts:

o Part time employment - An employee working a fixed set of hours per week, but usually less than those of a full-time employee. They are entitled to all benefits on a pro rata basis (the proportion of hours).

o Permanent employment - A person who is provided with continuing employment within the organisation. They work between 35 to 40 hours a week. They are entitled to four weeks holiday per week, and can be given overtime for working more than the required amount.

o Casual employment - Employees employed by a business for short periods of time. They must work for a minimum of between one to three shifts. They receive no holiday or sick leave entitlements. The employer can choose when they work.

o Fixed term contracts - The use of labour for only a specific period of time. Both parties are in agreement to this time period.

o Flexible employment usually refers to independent contractors.

- The Occupational Health and Safety Act 2000 (NSW) establishes the rights and responsibilities of employers in the workplace in regards to employers and employees.

- Workers Compensation - The Workers Compensation Act 1987 (NSW), Workers Compensation and Workplace Injury Management Act 1998 (NSW) govern the process of employees gaining financial compensation for injuries sustained at work.

- Anti-discrimination legislation - Anti discrimination laws such as Sex Discrimination Act 1984 (Cth), Racial Discrimination Act 1975 (Cth), Human Rights and Equal Opportunity Commission Act 1986 (Cth) and the Disability Discrimination Act 1992 (Cth) prohibit discrimination in the workplace. Discrimination occurs when a policy or a practice disadvantages a person or a group of people because of a personal characteristic that is irrelevant to the performance of the work. The Human Rights and Equal Opportunity Commission protect the interests of the employee.

- Equal Employment Opportunity (EEO) refers to equitable policies and practices in recruitment, selection, training and promotion. EEO ensures that the best person for the job is chosen, the business gains the person with skills and abilities most appropriate to its needs, and a more positive work environment is promoted. Anti-discrimination Act 1977 (NSW) makes equal employment opportunity mandatory. The level of equity in a business is reflected in the extent to which women and minority groups have access to different occupations and positions within the business. It is also reflected in the grievances expressed or legal action undertaken on the grounds of discrimination or sex-based harassment.

Developing a code of practice and making equal opportunity awareness a criterion in promotion and performance appraisal are two of the practical strategies that can be used to improve affirmative action (Measures taken to eliminate direct and indirect discrimination) and gender equity.

ECONOMIC

Economic Cycle

Business is the fuel that drives production, price changes, employment and our standard of living. The level of economic activity in an economy is primarily determined by the level of consumer and business spending.

Employment is fundamental for all economies. Labour is derived demand (ie. Derived from the demand for goods and services)

In periods of strong economic growth there is an increased willingness for employees to spend more of their income on consumer goods. Hence, labour will be in strong demand and wages should improve, as more goods and services need to be produced. In a recession, opposite situation would occur.

During periods of wage negotiations, employees will seek higher wages from employers due to inflation. This leads to increases in the costs of production of any business. Workers would need to be sacked making staff needing to increase their workload.

Globalisation

- The integration of the world’s economies into a single market where goods and services can be traded with ease.

- Due to more competition, workers are retrenched when their services are no longer needed.

- Employees need to receive their legal entitlements if they are retrenched and workplaces must be free of discrimination and harassment.

TECHNOLOGICAL

- Technology seeks to improve the quality of products and the efficiency with which they have been produced

- Technology is a key influence on HR because:

o State of technology affects the labour needs of the business (i.e. loss of employment as technology itself becomes the main tool of production)

o Technological advances may mean fewer workers are required; this could affect the motivation and morale of the workforce

o New technology may require new skills meaning retraining existing workers and acquiring new workers. (Employee resistance to change as workforce becomes reluctant to learning the use of new technology)

o Influences the administration of HR management (online recruitment and employee databases) – Increased efficiency

SOCIAL – CHANGING WORK PATTERNS, LIVING STANDARDS

Australian workplaces are now characterized by greater diversity in terms of ethnic & cultural backgrounds and the desire by many employees to achieve a balance between work and family.

Changing Work Patterns

The way in which Australians work has changed considerably over the past 10 years.

Increase in casualisation, outsourcing and female employment gives managers more options ( i.e. labour is more flexible and plentiful)

Some trends in work patterns include:

o Increased female employment – Rising female participation rate (59% 2011) – Influence on workforce is reflected in increasing calls for work-life balance

o Workforce is now ethnically diverse

o More part time and casual employment

o More career changes

o Service jobs have become more common

o Population is ageing - likely to see a significant shortage of skills in the community over the next few years

Living Standards

Less educated people, who lack skills and qualifications, may often be employed in industries with low wage rates. Many of which would be scared to challenge their employers for fear of losing their jobs.

As living standards rise, workers and the society expects better working conditions as businesses have most likely profited from rising economic prosperity (e.g. higher wages, flexible work hours). It may also lead to a shrink in the size of the labour force in the short term as people return to studying which in the longer term produces a more skilled workforce.

ETHICS AND CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is defined as ‘The continuing commitment by companies to behave ethically and to contribute to economic development, while improving the quality of life of the workforce and their families, as well as the local community and society at large’.

Examples of CSR include investing in community projects (Encouraging staff to volunteer their time to participate in community-building activities), supporting research initiatives & adopting environmentally friendly products

Ethical business practices are those practices that are socially responsible, morally right, honourable and fair.

An ethical framework must be developed for the workplace, in collaboration with the major stakeholders. Key principles may include ensuring equity in workplace processes, legal compliance, and commitment to customers.

The benefits accruing from ethical practices include:

- Staff retention and absenteeism rates improve as staff feel more valued and motivated.- Business costs (such as recruitment and training) are reduced and business performance is

enhanced.

- There are significant marketing and business opportunities — best practice employers enjoy regular publicity in the media, in journals and on the internet.

Ethics and CSR can influence HR because: o The business is treated like a citizen as it exists in society as well as benefiting from

it and so it should not exploit society for profit, this is the logic behind the idea of CSR

o HR management must act in a way that is seen as ethical so that its public reputation doesn’t suffer

o CSR also pressures HR management to introduce strategies that value workers’ rights and wellbeing even if it means reduced profits

o HR management decisions can stir up emotions in the society and so by ignoring ethical influences the business may suffer reduced sales as society expresses its anger

o If a business consistently acts unethically, the government may step up regulations to prevent such behaviour

PROCESSES OF HUMAN RESOURCE MANAGEMENT

ACQUISITION

- The stage in the human resource cycle that involves identifying staffing needs, recruitment and selection.

- In order to examine whether it has the appropriate staff to meet the firm’s needs, it needs to:o Identify the skills and number of employees required in the futureo Analyse its existing workforce

- Identifying staffing needs- If staff cannot cope with changes, more employees are needed. o The job needs to be identified and analysed and a job description (a written statement

describing the duties tasks and responsibilities associated with the job) needs to be created. o A job specification (Written statement describing the key skills, experience and

qualifications needed for a job) must be made after.

- Recruitment- To accumulate a pool of potential candidates for a job. It is from this pool that the business must make its selection. The business can fill a vacancy by recruiting applicants internally (from existing staff) or externally (from outside the business).

o Existing staff could receive a promotion, resulting in other staff to improve their performance.

o The business can advertise externally for job applicants through methods such as outsourcing to private employment agencies, interviews on university campuses, and trainee positions may be offered to HSC students to complete ‘cadetship courses.

- Selection- A screening process in staff acquisition. The information gathered about job applicants is reviewed and the most appropriate applicant is chosen. The individuals are assessed on their ability to interact with each other. The process may involve:

o Interviewso Application formso Written tests, such as English

DEVELOPMENT

Training provides employees with the right knowledge and skills to perform their job effectively and efficiently.

Development refers to activities that prepare staff to take greater responsibility in the future. Developing staff often involves training.

The aim of training and development is to seek long-term change in employees’ skills, knowledge, attitudes and behaviour in order to improve work performance in the business.

Well-organised and well-presented training and development provides benefits for both the employee and the employer

Technology creates the need for ongoing training

It is the task of the human resource manager to plan for the effective introduction of new technology. Training needs must be identified well in advance of any proposed technological implementation. This will ensure change happens at a pace consistent with the capabilities and expectations of the workforce.

Types of Training

Methods of Training include:

Formal off-the-job training — E.g. classroom activities, Informal on-the-job training — E.g. coaching Action learning: learning by experience solving real workplace problems Competency-based training: identifies skill strengths and areas where further training is

required — E.g. medical education

Training should be viewed as an investment in the human capital of the business.

MAINTENANCE (Monetary/Non-Monetary benefits????)***

The maintenance element of the employment cycle is the provision of working conditions to encourage employees to remain with the business.

By retaining productive and efficient employees who are loyal and display a high degree of commitment to their work, a business is able to increase its productivity, achieve high levels of morale, lower the rate of absenteeism and reduce the costs of staff turnover.

A business can therefore offer a range of monetary and non-monetary benefits as compensation for their labour.

Compensation refers to the payment or benefits (or both) an employee receives in exchange for their labour.

The combination of monetary and non-monetary benefits is referred to as the remuneration package.

- Monetary rewards are financial incentives provided to complete a job. This includes overtime payments, over-award payments {Minimum wage rates & minimum working conditions are set out in an award}, superannuation, bonuses, share of profits, issuing of shares, commission, performance-based pay and fringe benefits such as a laptop.

- Non-monetary rewards include personal satisfaction gained from caring from others and making a difference, job enrichment from interesting tasks, leadership or educational opportunities and a positive work environment that has effective management

One very important non-monetary benefit of recent times is affordable daycare centres either within the business or subsidised by it. With changes to family lifestyles and work patterns, many businesses attempt to meet the personal needs of their employees

SEPARATION (*Need to redo voluntary and involuntary redundancy)***

> The final stage in the employment cycle is the ‘separation stage’, in which employees leave the workplace on a voluntary or involuntary basis. This stage must be handled carefully and sensitively by the human resource manager.

- Voluntary separation:

Is where the employee decides to leave the business on their own free will and includes:

O Retirement - The employee has decided to give up full-time or part-time work. People may retire due to ill health, lack of motivation, or leisure activities.

O Resignation - When an employee leaves their jobs for reasons such as a need for change in their lives or moving interstate. The employee needs to provide the employer with notice of the intention to leave.

O Voluntary redundancy - Where an employee’s existing job is no longer required by the firm, possibly due to changes in technology, a merger or takeover. These individuals may have been offered a redundancy package. (Employees nominate themselves for voluntary redundancy)

- Involuntary separation occurs when an employee is asked to leave the business against his or her will. Apart from involuntary redundancy, the two different types of involuntary separation are retrenchment and dismissal

> Involuntary redundancy - The termination of employment due to the firm closing down or the job no longer being required due to rationalisation, restructuring or new technology. There is a minimum scale for severance payments for all permanent employees under NSW awards who work for an employer with more than 15 employees.

> Retrenchment - is when a business dismisses an employee because there is not enough work to justify paying him or her. For example, when production levels are low, retrenchment notices will be given to selected employees.

> Dismissal - Occurs when the employer terminates an employee’s employment contract due to the unacceptable conduct or behaviour of the employee. It can be an instant or summary dismissal or a dismissal after a series of warnings. The reason for dismissal must be based on the employee’s conduct or ability to do the job.

Unfair Dismissal occurs when an employer dismisses an employee for discriminatory reasons (i.e. race, absence from work due to illness).

STRATEGIES IN HUMAN RESOURCE MNAGEMENT

Management should seek to develop strategies that encourage and promote an effective and rewarding relationship between staff and the business.

LEADERSHIP STYLE

Leadership style is the manner and approach in which leaders of a business interact with staff. This interaction is based on:

- Providing staff with directions - Implementing plans and organising staff- Motivating staff in a manner that promotes effective workplace performance

Kurt Lewin identified three different styles of leadership, each offering managers alternatives to the process of interacting with staff.

- Autocratic leadership - Managers lead, based on the view that they are responsible for telling their employees what they want done and how to accomplish the task. Employees cannot contribute to the decision making process. Decisions must be made quickly.

- Democratic leadership - Also known as participative leadership. Democratic leadership involves the leader including one or more employees in the decision-making process. Employees are consulted about what to do and how to do it. They encourage employees to become empowered.

- Laissez-faire leadership - Also known as free-rein or delegative leadership. The leader allows the employees to make decisions. Employees have the relevant knowledge and skills to make the decisions. Managers trust the ability of employees to make the right decisions.

JOB DESIGN – GENERAL OR SPECIFIC TASKS

Job design – Key strategy of HRM

Where managers develop and specify the work activities of individuals or groups within the business environment. It involves the process of determining the type of tasks an employee needs to complete.

The goals of job design are to:

- Satisfy the needs of the business with greater productivity from employees - Efficiency and quality in operations - Satisfying the workplace needs of employees.

General tasks – Employee is engaged in a variety of tasks which will help to overcome boredom. Moving from task to task can avoid health and safety issues.

Specific tasks – Business has increased performance. Employees become skilled at performing a few tasks and output is higher quality as a result. The disadvantage is that specific tasks become routine and boring.

RECRUITMENT – INTERNAL OR EXTERNAL, GENERAL OR SPECIFIC SKILLS

Recruitment (Fundamental aspect of HR) – where management seek to employ an individual for a vacancy that exists within the organisation.

Recruitment may be completed internally or externally

Internal recruitment occurs when the position is filled by existing employees within the business.

Advantages: It acts as an incentive for staff to improve their performance, promotions as seen as a reward for effective work, employee has existing understanding of the culture within the business

Disadvantage: Staff overlooked for the position may lose motivation

External recruitment occurs when the position is filled by an individual who has not yet worked for the business.

> Advantage: Business is encouraging new ideas, new employees are not aware of existing issues.

> Disadvantage: May take time to settle in, resentment from existing staff.

Some issues for the business to consider in the recruitment process are:

- The need to replace staff: Management must consider if it able to spread the workload over existing employees. This has the benefit of upskilling existing employees and cost savings for employer

- Use of specialised recruitment firms: This may allow a greater degree of expertise to be used in the recruitment process.

General skills are transferable from one job to another. Key general skills include flexibility, motivation, ability to work as a team/independently, leadership and ability to work under pressure. General skills are important because many jobs today require individuals to work independently and undertake many different tasks. HRM value these skills as they generally indicate the employee’s capacity and willingness to learn.

Specific skills are those that need specialist training at a school, TAFE, university or other accredited educational provider. Most businesses are concerned about skill shortages and still need to target employees with specific skills to fill gaps in their business.

TRAINING AND DEVELOPMENT – CURRENT OR FUTURE SKILLS

Training and development are an essential component to any successful business. They are the means by which a business is able to provide employees with an avenue to enhance their knowledge and understanding of various activities related to the operations of the business.

Training involves educating an employee in the skills and processes of the job they currently hold.

Training may take place through either formal or informal means

Formal training

When an employee takes on a role similar to students within the organisation and are shown how to apply themselves to the new operations of the business, then later assessed on their level of understanding. E.g. lectures, seminars

Informal training

When an employee is either shown or modelled the correct skills through the use of a coach or mentor, or learning the work on the job.

- Development involves selecting employees for educational programs that focus on future roles.

- If business is aiming to develop skills for current needs, training is appropriate but if the business is looking to the future, then development is appropriate.

Induction (If required)

Process of providing new employees with the knowledge and skills necessary to ensure they are familiar with the organisation and day-to-day operations of the business

- Most induction programs provide employees with some history of the org. , company policies and a code of conduct

- Employees are notified of leave arrangements, starting and finishing times, dress codes

PERFORMANCE MANAGEMENT – DEVELOPMENT OR ADMINISTRATIVE

Performance management refers to the process of recognising the efforts and contributions of employees to their work. It involves an ongoing process of communication between a supervisor and an employee

Some benefits of performance management are that the employee has an improved understanding of their role and what needs to be done, the employer is able to identify any problems earlier and performance review and improvement allows the employee to be aware of their personal goals.

Performance management is an ongoing process that can be describe through three key stages:

Planning: This stage is focused on goal setting. Expectations are developed between the employer and the employee regarding tasks. Goals are established between the employer and employee, but they must be realistic

Checking-in: An employer should regularly observe an employee’s performance to provide feedback. This improves communication between the management and employees and employee motivation through recognition and rewards.

Assessment: Is the process of measuring the employee’s performance against the objectives. They discuss employee accomplishments and examine results against business and industry benchmarks.

REWARDS – MONETARY AND NON-MONETARY, INDIVIDUAL OR GROUP, PERFORMANCE PAY***

A rewards system can reinforce strategies to facilitate change or support desirable corporate values, such as a focus on the customer.

Many businesses use a combination of monetary and non-monetary rewards so as to motivate all employees to work to their potential and cooperate with each other to achieve the goals of the business.

It is important to note that some rewards are part of their legal entitlements such as superannuation, sick and annual leave

- Monetary rewards are those reflected in pay or having financial value and are beyond the employee’s minimum legal entitlements. (financial incentives provided to complete a job) {ProVIDE EXAMPLES!!!)

- Non-monetary rewards are those that do not have a financial value, such as social activities, retirement planning or flexible work schedules.

Reward systems are also increasingly linked to performance management through enterprise bargaining and individual contracts

Individual or group rewards involve a team of workers sharing rewards for the performance of workplace tasks. There are many different schemes for group rewards but profit sharing, payment by result and bonuses are the most popular.

Rewarding performance based upon group achievement has a number of benefits ad negatives:

o Benefits

encourages a greater sense of team work

employees become more motivated

o Negatives

not all employees may apply equal effort

employees may have different personal goals

conflict may occur within the group

Performance Pay

Performance pay refers to the process of linking part of an employee’s income to their performance at work. As the employee reaches targets and demonstrates improved performance, they will be rewarded through increased pay.

This concept recognises that employee motivation comes from financial benefits.

Benefits of Performance Pay:

Performance may improve as employees work more effectively.

it encourages unmotivated and inefficient individuals to improve performance

Disadvantages of Performance Pay:

The performance of employees may be difficult to measure for some jobs as it is influenced by external factors i.e. attitudes of consumers

Some employees may simply seek non-financial rewards.

GLOBAL – COSTS, SKILLS, SUPPLY

Costs – Labour costs vary in different countries depending on size of workforce and available skill level. Labour costs depend on demand for workers in particular industries.

Skills – India has become a preferred source of global labour due to good literacy levels in English and technical skills. The South Korean workforce has good technical skills but is not proficient with English. India’s main advantage is information technology.

Supply - There are currently about 7 billion people in the world. The labour force is declining in advanced industrialized areas such as Europe and expanding in geographical areas such as Asia, Africa and North America.

WORKPLACE DISPUTESo RESOLUTION – NEGOTIATION, MEDIATION, GRIEVANCE PROCEDURES,

INVOLVEMENT OF COURTS AND TRIBUNALS

The process of resolving an industrial dispute can be complex & depends on the willingness of stakeholders to cooperatively work together to reach a settlement.

The interests of employers and employees conflict at many times. Employers will seek to use the services of labour at the lowest possible cost, while employees will attempt to gain the best possible income and working conditions.

NEGOTIATION

The first stage in the resolution of a dispute. It involves a discussion between both parties in an attempt to resolve the dispute.

Collective bargaining – Common term used to describe negotiations over workplace disputes within an organisation

Depending on the nature of the dispute, an employer association may also be called on to assist the employer with negotiations.

MEDIATION

Occurs where an independent party with no ties to either stakeholder is asked to assist and therefore may assist the conflicting stakeholders to reach a settlement.

This party could suggest ideas or present issues in an alternative way.

GRIEVANCE PROCEDURES

The rules and procedures that employees, unions and employers must follow in order to resolve a dispute. A grievance procedure policy:

o provides a clear outline of the issues

o illustrates the correct and appropriate processes when raising a complaint

o provides a mechanism that can be used to achieve a quick resolution of disputes

Conciliation - When the Fair Work of Australia acts as a mediator and offers suggestions in a dispute to resolve the problem. While all parties must make every reasonable attempt to reach a settlement, the conditions of the agreement are not legally binding.

Arbitration - The final stage of the dispute, it Involves a commissioner hearing the cases put forward by both parties in an industrial dispute and then making a decision, which is legally binding on both parties. The decision is legally binding on all parties.

{Involvement of courts and tribunals includes Fair Work Australia (FWA), the Australian Human Rights Commission & the NSW Industrial Relations Commission}

EFFECTIVENESS OF HUMAN RESOURCE MANAGEMENT

INDICATORSo CORPORATE CULTURE

o BENCHMARKING KEY VARIABLESo CHANGES IN STAFF TURNOVERo ABSENTEEISMo ACCIDENTSo LEVELS OF DISPUTATIONo WORKER SATISFACTION

An effective human resource management function is one where management and employees work well together in their efforts to achieve the goals of the business.

The effectiveness of the relationship can be examined from a number of perspectives

Corporate Culture

Corporate culture refers to the culture within an organisation. It relates to the values and beliefs within a business and directly impacts upon the relationship between management and employees.

An effective corporate culture is one that is believed, demonstrated and acted upon by management and employees.

Benchmarking Key Variables

Benchmarking is the process of measuring an employee’s performance against established standards (i.e. output per worker)

If employees are unable to meet performance goals on a regular basis, management must therefore examine why this is occurring. The reason may be a lack of motivation or that the staff are not adequately trained which could in turn lead to low productivity, poor quality product and consumer dissatisfaction.

Changes in Staff Turnover

Staff turnover refers to the rate at which employees leave a business. A high level of staff turnover caused by voluntary separation is indicative of poor employment relations within a business.

High staff turnover is costly to a business as it includes paying out a leaving staff member’s entitlements, conducting a selection process and training the new staff member. Moreover, the possibility of losing experienced and highly skilled staff to competitors.

Absenteeism

Absenteeism refers to an employee being unable to attend work for reasons such as illness or family responsibilities.

High levels of absenteeism disrupt work schedules, lead to lower productivity & involve a cost in replacing the worker.

This places additional demands on existing staff and may cause even greater hostility within the workplace.

Accidents

Workplace accidents can be measured in terms of the number per period etc. Effective HRM ensures that occupational health and safety within a business is paramount

Levels of Disputation

Monitoring the frequency and severity of industrial disputes in the workplace will give an indication of the effectiveness of grievance procedures and dispute resolution processes.

Effect of Disputes: The costs of industrial disputes and action increase the number of working days lost & lower productivity & staff morale.

Worker Satisfaction

An effective human resource management structure will implement strategies to measure worker satisfaction (i.e. surveys, group discussions)

Based on results, management must then examine methods to improve worker satisfaction (E.g. Leadership styles).

Satisfied employees often work more efficiently and value the organisation that they work for.