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o Human resource management is the management of the relationship between an employer and employee in order to achieve the businesses

strategic roles. o Strategic approach to managing employees: Add value to business performance through an effective workforce Use strategies to retain, reward and motivate skilled employees The role of the human resource manager is to decide how the employment relationship will be best managed so that it is cost-effective, achieves the businesss goals and contributes to the bottom line. The role of the human resource function is to link individual performance with corporate strategy.

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

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

Outsourcing allows firms to focus on their core business functions. Outsourcing can also be used to review business practices and implement new strategies to transform the business using consultants with no agenda.

Mainly used for processing functions which are repetitive and easily measured results. Risks include cost overruns, difficulty coordinating activities and monitoring quality. Contractor: a person or company that undertakes a contract to provide materials or labor to perform a service or do a job. Subcontractor: a business or person that carries out work for a company as part of a larger project. Form of outsourcing Labour hire/employment agency Dependent contractors Features Workers leased to host company Superannuation, insurance and workers compensation managed by employment agency Workers are dependent contractors where the employment agency acts as a middle man Dont have control over their working procedures and are prevented from subcontracting their work and working for multiple clients Outsourced suppliers Sole traders operate their own business and set own terms and conditions Engaged by a client under a commercial contract to perform the service without the legal status of an employee Make own superannuation, insurance and workers compensation agreements Supply goods and services to a range of businesses Are owner managers who supervise their own employees Control their own work procedures and can work for multiple clients Manage superannuation, insurance and workers compensation arrangements for their employees

Independent contractors

o o o o

Avoids the need to employ additional staff. Provides businesses with flexibility - non-permanent arrangement May also be used for fresh ideas and perspectives. Negatives: expertise/internal capabilities might be lost through the outsourcing of functions, problem solving skills diminished

o Businesses are under pressure from global competition so use offshore contractors o Also used to get more acquainted with overseas market before expansion. o 2 forms of outsourcing: Process outsourcing: easily measured and documented work e.g. customer complaints, payroll management Project outsourcing: found in human resources, design, research. Involves greater use of intellectual property and strategies, business knowledge, operates in a longer time frame difficult to measure, cant predict level of quality: More risk. Risks of global outsourcing: o Difficulty controlling quality and reliability of service o Cultural differences such as language issues impacts customer service o Security issues such as sharing of confidential company information and client poaching o Dealing with foreign legal systems o High labour turnover esp. call centres Advantages: Improve quality Save costs Expand capacity/flexibility Access experts Help in managing complex issues Disadvantages: Quality may fall Hidden costs Costs may increase Reduce business learning through reliance on experts Loss of security and confidentiality of information Less integrated organisation

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

Practice of moving frequently from one job to another is becoming more common. Businesses that want to keep and motivated skilled employees need to make more of an effort: i.e. training plants, rewards, and greater employee involvement. Aging populating structure means future labour shortages: government is considering extending working life of population

Act on behalf of employers in collective bargaining sessions and before industrial tribunals, courts, commissions Provide advice on issues such as: o Awards o Unfair dismissals o Discrimination issues Negotiate agreements Lobby governments with the views of employers

Organisations that represent employees in efforts to improve wages and the working conditions Have an official bargaining position in the making of industrial agreements Now expanding range of services for more members i.e. free/discounted legal service, superannuation schemes, income protection against illness or accidents

Legislator: Government makes laws that provide the legal framework for industrial relations. Employer: Federal and state governments employ almost one third of Australian workers. Have introduced practices such as maternity leave that are eventually adopted in private sector Responsible economic manager: ensures non-inflationary stable economic growth and a high standard of living for all Australians Governments are trying to reduce the powers of industrial tribunals and encourage bargaining in the workplace.

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

Statutes o Statutes are laws made by federal and state parliaments Require employers to: o Meet OH&S requirements o Maintain workers compensation insurance o Provide employees with superannuation, annual and long service leave o Make sure workplace is free from discrimination Some of these laws: Sex discrimination act 1984 Industrial relations reform act 1993 improved safety net provisions for employees, improved arrangements for direct bargaining and protection against unfair dismissal FAIR WORK ACT 2009 o Gives employers and employees the same workplace rights/responsibilities regardless of what state they are in o New framework includes: 10 national employment standards provide protection to employees Annual national wage case sets minimum wage Protection from unfair dismissal Modern awards (industry or occupation based award) 122 modern awards replace thousands of previous state and federal ones Industrial tribunals and courts o Enforce laws established by governments o Fair work Australia makes sure the bargaining process/industrial action occurs in accordance with the law o Its main roles are: Settling disputes Supervising the making of agreement + awards Award simplification Handling unfair dismissal cases Federal Court Handles cases relating to industrial action and breaches of awards and orders by tribunals Imposes penalties relating to discrimination under industrial and human rights legislation

Voters are most interested in their employment Global competition increases the pressure on businesses so they are using contractors leads to structural unemployment in the communities left behind Community demands for safety and wellbeing and elimination of discrimination at work have increased.

o Legislation covers: Employment contracts and agreements Dispute settling methods Human rights Employee welfare OH&S legislation and superannuation funds o Changing community expectations on social justice is reflected in legislation and work practices

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

superannuation

salary/wages duties

key features of an employment contract

bonuses

hours

locations

Employer Obligations o Payment of income and expenses incurred as a result of performing the work o Meeting requirements of industrial relations legislation: Ensuring workers are protected against discrimination and unfair dismissal o Duty of care: Employers are legally bound under OH&S act. Employee obligations o Obey lawful and reasonable commands made by the employer. Reasonable = not dangerous or illegal o Use care and skill in the performance of their work activities o Act in good faith if you switch jobs dont go telling the other employer confidential information

o Base rate of pay for ordinary hours determined by: Award or agreement the employee is on OR the national minimum wage o Set by Fair Work Australia panel. When determining the minimum wage, the following factors must be taken into consideration: Economy performance Living standards and needs of low income earners Equal pay for work of equal or comparable value

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

o Collective agreements made at a workplace level between an employer and groups of employees about terms and conditions of employment o Alternative to modern award Single enterprise agreement: made by a single employer and a group of employees Multi-enterprise agreement: made between 2 or more employers and groups of their employees. This occurs if they share funding, operate collaboratively and have a common regulatory system. E.g. group of hospitals Greenfields agreement: Enterprise agreements for a business that doesnt employ anyone yet. Made with one or more relevant unions.

Enterprise agreements cover: Rates of pay Overtime Hours of work Personal and annual leave Any matters related to the relationship between employer and employee How the agreement will operate and an expiry date o Must be approved by Fair Work Australia who must be satisfied that the agreement: Everyone involved agrees with it Better off compared with the current modern award Does not include any unlawful terms Includes a dispute settlement procedure Employees were able to be represented by a bargaining representative during the negotiation of an agreement

Individual common law employment contracts When an employer and an employee negotiate a contract covering pay and conditions Cover employees not on federal agreements or state agreements More common in non-union enterprises property and business services professional/managerial level Independent contractors Undertake work for others but arent employees Undertake a contract, service or project for another business and work for multiple clients Tend to have a set term or specific project for their contract Control their own work, superannuation, tax, insurances and leave Contracts for casual work Casual employees are in employment that is short term, irregular, uncertain Paid on hourly basis Casual workers reduce costs for recruitment dismissals and other on-costs (sick, holiday leave, superannuation etc) Fluctuating income, no training/promotions, less committed to work Part-time contracts 29% employees are part-time this can be attributed to GFC - reducing hours Have continuing employment contract and work less than 35 hours per week Have access to employee entitlements but on a pro rata basis (in proportion to how much they work compared to full time workers)

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

By ensuring the goods being produced will not cause injuries or damage health ^ Can be fined if they dont WorkCover inspectors can inspect the workplace and issue improvement/prohibition notices WorkCover must be notified of any deaths or serious injuries in the workplace, and any plans to carry out dangerous work

Workers compensation All employers must: Take out insurance Establish w/ insurer and doctor an injury management plan and return to work plan for all injured workers Premiums are linked to the frequency and size of claims Compensation is paid for: Loss of wages for time off work Medical expenses and the cost of associated travel and modifications to home Permanent impairment of a part of the body Not payable if its employees own fault

Common law redress Employees can take action against an employer when the employer or another employee has been negligent if the employee has a permanent body impairment of more than 15%. These claims are heard in court.

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

Businesses can eliminate discrimination by: Having policies and code of conduct to prevent discrimination Training managers and staff in cultural diversity issues and ways to prevent or deal with discrimination Appointing grievance officer and having specific procedures Regularly evaluating effectiveness of policies, workplace culture and action taken to resolve complaints EQUAL EMPLOYMENT OPPORTUNITY Ensures best person for job is chosen and promotes positive work environment Level of equity is reflected in how many women/minority groups have access to different positions in business and the grievances undertaken on the grounds of discrimination Employers with more than 100 employees must report annually on equal opportunity programs they develop in consultation with employees and progress achieved. Strategies to improve equity: o Developing a policy statement and informing all staff that a program has been initiated o Monitor and evaluate employment statistics, policies and industrial agreements o Keeping all staff informed of opportunities within the business

The economic cycle Demand for labour determined by demand for goods and services Labour shortages = higher wages Unions may use bargaining power to demand significant wage increases, which may then put upward pressure on costs and prices, creating inflation. Structural change Refers to the change in the nature and pattern of a production of goods and services within an economy i.e. level of services compared to other sectors Growth leads to emphasis on recruitment, selection and remuneration industrial issues Aging population - flexible staffing arrangements Globalisation o Globalisation has increased the level of international competition o Businesses have to compete with subsidiaries of TNCs need to outsource non-core functions or subcontract in order to compete effectively o There is a need to attract and retain good core staff and continually improve o Training in the management of a multicultural workforce with differing approaches to authority and the role of groups/individuals is increasing.

o Technological change = improvements in productivity, communication and competition o Creates new jobs, makes others redundant o Businesses are restructuring as networks offshore and using virtual teams using video technology o Businesses can operate anywhere, any time and access employees at home o Increases need for training programs and protocols to make sure balance is maintained

Growth in part time and casual work, some workers want flexibility and balance, for others it is a result of the GFC Career flexibility and job mobility o 44% have been with current employer for more than 5 yrs o Need new skills and training for new jobs o Employees leave full-time positions after developing special skills to become independent contractors Rising female participation rate o Because of improvements in parental and carers leave conditions and better work life balance - 59% in aus Ageing of the workforce o Will lead to a shortage of skills o Flexible working arrangements job share, part time are important to keep workforce o Businesses need to implement HRM strategies to transfer skills to remaining workforce

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

o OH&S, regular wage increases, performance bonuses, fringe benefits, leave and superannuation benefits o Companies who excessively outsource and casualise workforce are challenged by unions o Casualised workers suffer from higher levels of stress due to difficulties purchasing assets and having an unstable income o Blurring of home and work life because of technology o Lack of support for carers in the community - governments have responded by implementing legislation to provide carers leave, job share, part time and flexible working hours o Australians are concerned about: o Income inequality: between male and female and how growth in wages is behind profit growth. o Casualisation of the workforce o Lack of work life balance

CSR refers to a business decision to take an ethical approach to their operations to benefit the wider community o Lack of ethics and CSR can lead to poor morale, low productivity and industrial disputes o Business depends on community as a source of customers, resources and staff o Customers will eventually find out which businesses are acting ethically o Ethical framework should be developed: o Code of conduct and Code of ethics o Staff retention and absenteeism rates improve when staff feel valued o ^ costs are reduced and business performance is enhanced o Best practice employees enjoy regular publicity o Legal compliance, OHS costs etc reduced o Improved performance Working conditions o Providing training opportunities o Offering equitable rewards and benefits subject to clear criteria o Flexible working hours and promoting work life balance o Staff collaboration o Businesses under pressure to save on labour costs reflected in growth of precarious employment part time and casual. o Concerns about worker exploitation: demonstrate CSR by undertaking factory audits and working with agencies to support ethical practices in local and offshore operations o E.g. businesses in clothing industry seek accreditation from agencies like ethical clothing Australia

Recruitment, selection and placement o Recruitment is the process of attracting the right quantity/quality of staff to apply for employment vacancies o Employee selection involves using info about applicants to choose the best employee o Need to give applicants a realistic understanding of their job o Use recruitment/selection strategies that are aligned with business needs e.g. if business wants to increase gender equity it needs to put more females on the selection panel and have equitable benefit packages, training and promotion opportunities

Enhances employee skills through: o Further professional learning o Mentoring or coaching o Performance appraisal and management Induction Introduces employees to job, business, co-workers Gives employees positive attitude to job Builds employee confidence Explains the major safety policies Helps establish good working relationships Training Training is a long term change in employee skills, knowledge and behaviour to improve work performance Essential to overcome business weakness and maintain staff commitment Helps a business adapt to change and stay ahead of competition A training program should: 1. Assess needs of individual, job and business 2. Determine the goals of the training program for the business, job and individual. 3. Consider internal and external influences Internal: employee attitudes to training, the resources available to operate the program and staffing. External: any new research on relevant training issues and government programs or support available for training 4. Determine the process of the training program what will actually be involved (where, what staff, how its gonna be implemented) 5. Evaluate training program Tests/Surveys Performance appraisal Benchmarking of key indicators like defects, customer complaints and accident rates

Organisational development Team and project based structures are common This allows employees to develop shared ideas and solutions to problems This structure reduces promotion opportunities so HR managers need to find other ways to motivate staff: o Job enlargement: increasing the breadth of tasks in a job o Job Rotation: multiskilling moving staff from one task to another o Job enrichment: increasing responsibilities of an employee o Self management teams roles and decisions determined by their members o Mentoring and coaching experienced staff member provides advice and support to developing employees Mentoring Individual life development preparing them for future roles Personal relationship, like a friend. Guides individual by sharing advice and experience. Provides advice that may assist in improving the way employee manages issues. Unstructured Coaching Performance enhancement by building skills, overcoming weaknesses and resolving specific issues Specific to employees job, assists him/her in setting goals and achieving them. Shares skills, knowledge and techniques relevant to employee needs. More structured

Focus Role Function Structure

Performance appraisal A process of assessing the performance of an employee against criteria Evaluates strengths, weakness and opportunities for development Used to see if the employee deserves to be promoted and their value to the business Involves 4 main objectives: o Provides feedback to employees o Acts as a measurement against which promotion and pay rises are determined o Helps businesses monitor their employee selection o Identifies training and development needs Performance appraisal tool Behaviour observation scales supervisor observes and records evidence of behaviour and performance over time Interview Advantages Allows ongoing collection of range of evidence Provides feedback easily Disadvantages May focus too much on negatives Open to personality clashes/bias Employee may struggle to be open b/c employer can be intimidating Rating criteria may be set too high or too low Open discussion can be limited as supervisor has reward power

Can be flexible and detailed Allows for questions and discussion Management by objectives Rewards achievement objectives set for employee and Goal setting motivates rewards awarded according to employees to work more performance efficiently

Maintenance of staff involves looking after their wellbeing, effective communication and complying with responsibilities. Maximise staff wellbeing by getting them to participate in decision making process Support work life balance and offer flexible job roles job sharing, multiskilling, part time

Communication and workplace culture Poor communication reflected in conflict and turnover rates = negative workplace culture Methods of communication: o Team meetings between managers, supervisors and employees o Suggestion boxes, surveys, staff newsletters, social functions, emails Recognition of staff achievements, trust and constructive criticism important Employee participation Employees are trained to make on the spot decisions, solve problems or provide incentives, to retain customers Improves communication, empowers employees and develops their commitment to improving efficiency Effective participation is fostered through regular team meetings to discuss customer feedback and company issues build a sense of shared purpose and company identity Participation strategy Participation through membership on the board of directors Participation through ownership Joint consultative committees. Participation in collective bargaining. Explanation Allows an employee to represent staff on the board however this could lead to employee becoming alienated from other employees. Employees buy shares = increased commitment however this could lead to a conflict of interest as ownership and participation involve different objectives. Formally established groups consisting of employees and management representatives. Provide management with the views of employees on a range of issues, enhancing communication and improving productivity. I.e. when developing an enterprise agreement. Allows all parties to make an effort to resolve issues through reconciliation and conciliation learn from each other and negotiate outcomes beneficial for everyone.

Benefits

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

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

Flexible and family friendly work arrangements Important to attract and retain talented staff who want a work life balance. Also creates a positive image of the firm in the community. Typical flexible working conditions include: Flexible remuneration options Flexible working hours Job sharing Work-from-home arrangements Family leave Family unfriendly workplace costs: Absenteeism Higher turnover Lower morale because of increased stress Potential for court action failure to comply with EEO and unfair dismissal legislation Legal compliance and corporate social responsibility Bullying and sexual harassment cause high levels of staff stress, absenteeism, turnover, and low productivity and morale. Human resource managers need to implement a range of strategies in health and safety, anti-discrimination and conflict resolution. Problems that arise over misconduct in employment relationships, particularly regarding sexual harassment, bullying and discrimination, can be very costly and damaging to the business and destroy individuals. Bullying can be minimised by: Inducting and training employees in company policy, procedures to deal with bullying, and consequences Providing training to increase cultural awareness Having mentoring or buddy systems for new and young employees

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

To avoid claims of discrimination, involuntary separation must be managed in compliance with legislation. Acceptable situations for redundancy: Closure of the workplace site Completion of the project on which the employee worked Lack of contracts or orders for work Documented evidence required e.g. The companys financial statements. When determining who will be retrenched you need to consider: Length of service Standard of performance

Dismissal Summary dismissal is an instant form of dismissal that applies to employees involved in serious misconduct, such as theft. Fair Work Australia will determine whether the reasons are well founded, and whether the employer has investigated/allowed the employee to respond to the allegations. In recent years, businesses have tried to reduce costs through reducing staff numbers, flattening management structures and using more technology contributes to industrial disputes and unfair dismissal claims. In the case of poor performance, businesses are required to: Give employees a written warning Give them advice and support so they have the opportunity to improve In the case of redundancy, the employer may be asked to show that: There was no appropriate work available within the organization The employee was consulted about alternative redeployment options in the business. Unfair dismissal Documentation of processes undertaken is also required to avoid claims of unfair dismissal. An unfair dismissal occurs where an employee makes an unfair dismissal remedy application and Fair Work Australia finds that: The dismissal was harsh, unjust or unreasonable Was not a case of genuine redundancy Employees are able to claim unfair dismissal if: The business has more than 15 employees who have been employed for more than six months. The processes for dismissal have not been carried out correctly. The remedy for a claim is either reinstatement or max 6 months pay compensation. An employer has the right to object to a claim on the basis that it is: Not submitted in an appropriate time frame Not reasonably likely to succeed That the person making the claim is not eligible. Many businesses avoid these risks by hiring casuals and contractors. Other businesses included job descriptions, probation periods and measurable targets to allow for dismissal of staff in their job contracts. They are keen to avoid unfair dismissal claims, as they create negative publicity and low morale. For many it is easier to settle the claim, regardless of whether or not it is valid.

1. Authoritative approach focuses on planning, organising and controlling. 2. The behavioural approach sees management as leading, motivating and communicating democratic leadership style. 3. The contingency approach uses the most appropriate approach depending on the situation. Leadership style Directive Emphasis on immediate compliance from employees Dictatorial, coercive Visionary Emphasis on long term vision and leadership Authoritative, big picture Affiliative Emphasis on the creation of harmony Participative Democratic Emphasis on group consensus and generating new ideas When the style works best In a crisis, to kick start a turnaround or with problem employees

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

To build consensus or to get input from employees To build consensus or to get input from employees

Job design Job design is designing what an employee specifically has to do in the job and how it will interact with other jobs and employees. ^ Dependent on job analysis analysis of all the tasks, responsibilities, personal attributes needed in a position. Job design involves a number of steps: 1. Analyse the existing work situation 2. Identify technical, managerial and administrative tasks to be performed 3. Decide how the job will fit in with the work group 4. Consult with key stakeholders and modify as required 5. Implement changes slowly, provide training, use feedback to modify 6. Assess and review progress, discuss with employees.

Job design methods Jobs can be flexibly shaped to fit the changing needs of the business Job design is also a useful method in developing the knowledge and leadership skills of employees identified for future promotion in succession planning. Succession planning is more efficient when employees are interdependent and cross- skilled through job rotation, job enrichment, job enlargement, semi-autonomous work groups and flexible work structures.

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

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

The most visible aspect is the job advertisement. Recruiting a diverse workforce is important in communicating effectively with a wide customer base and in demonstrating corporate social responsibility

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

Internal recruitment Sources include employees, former applicants and former employees, word of mouth, email. External recruitment Newspaper advertisements, referrals through recruitment agencies, company websites, trade unions, professional associations, radio and television. Internal recruitment - advantages Builds commitment, loyalty and motivation Employees already know the culture and operations Recognises and rewards staff for achievement Can lead to a succession of promotion opportunities Cheaper than external recruitment less chance of hiring shitty staff as you already know them Internal recruitment - disadvantages Little value added, no new skills Can lead to rivalry for positions Often attracts a significant number of internal applicants, need to manage unsuccessful applicants who will be demotivated External recruitment advantages Wider applicant pool New ideas, perspectives and skills introduced to business better for innovation and problem solving Get specific skills save on training You can shape the new employee to suit the business

External recruitment - disadvantages Takes a lot of effort and time Risk of unknown staff, also employee may not get along with internal rivals Lost productivity in initial phases of orientation and induction phase

General skills Many businesses focus on attracting staff with skills and behaviours that are a good cultural fit for their business. The job can then be customised to suit the recruits who can be trained for the specific role. Key general skills include flexibility and versatility, social confidence, motivation, ability to work as a team or independently, leadership and decision-making styles. Increasingly, as online recruiting grows, businesses use their websites to promote their brand, the values and culture of their business. ^ Widens the pool of potential talent available to a business.

Specific skills Many businesses are recruiting overseas or using outsourcing and overseas recruitment to overcome skill gaps in their businesses. There is a significant shortage developing in more highly skilled and professional areas Employee poaching is frequently used to gain skilled workers

Development is focused on enhancing the skills of the employee in line with the changing needs of the business. In choosing the nature of training and development, businesses need to evaluate: o The needs of the business o The supply of these skills in the economy o The changing nature of work Businesses need to see which skills they can develop internally and which they need to recruit. Businesses will need to consider these options: Invest in further in-house training and development Recruit staff for specific skills Retain women through flexible work structures such as telecommuting Share staff with other firms Outsource functions to specialist firms or agencies, even overseas

Performance management is a process of evaluating and managing employee performance in order to achieve the best outcomes for a business. The two steps of performance management are: Evaluating an individuals performance. Using that information to develop the individual.

Focused on using data to develop the individual skills and abilities of employees Achieved through year round periodic feedback and shared discussion that is empathetic and goal focused.

Provides information that can be used by management for planning in training, development, rewards and pay levels. The focus is on collecting data to manage the HRM function more efficiently

Benefits of effective performance management


Benefits for the business Assists with human resource planning Evaluation of rewards and benefits program Identifies and documents poor performance, and links it with training and improvement strategies Helps identify, motivate and retain talented staff for leadership succession Shows the effectiveness of current selection processes and whether staff recruited match the Benefits for the individual Comparison of contribution to organization and performance against agreed standards Helps assess rewards and benefits linked to performance Identifies strengths and weaknesses, creating opportunities for training and development, coaching or mentoring Fosters promotion on merit Creates opportunity for employee to provide feedback

cultural fit and skills required for the organization Effective performance appraisal systems set clear standards in advance, against which performance can be: measured, rewarded and plans for improvement developed. How to have effective performance management: Have clear job descriptions Provide appropriate induction, training and development, so staff are competent Provide regular and constructive feedback Reward employees for their achievements Use employee feedback to assess the effectiveness of the performance management system

Intrinsic rewards are those that the individual derives from the task or job itself, such as a sense of achievement. Extrinsic rewards are those given or provided outside the job.

Rewards related to individual performance can lead to conflict and rivalry if not managed properly. Group incentive schemes are often used to support a team-based culture.

Key issues to consider in designing a reward and benefits system include: Economic conditions supply and demand for labour Rewards and benefits of competitors Union power Profitability of the business.

Performance related incentive plans for above standard performance, bonuses, commissions, production-related incentives Job related role and level of responsibility, scope of supervision, base pay, interpersonal skills, knowledge, experience, value to the company Reward systems that are not fair lead to conflict, loss of trust and motivation, and higher levels of labour turnover.

The high cost and shortage of supply of skilled labour in Australia push businesses to operate globally. Offshore skilled labour is not always available as required due to high levels of demand for them. Issues for offshoring and outsourcing: o Risking quality o Business regulations in that country o Political stability o Language skills Businesses may wish to diversify into new products and services, requiring different skills. If seeking to operate using a lower cost structure, training in quality standards and performance management will change. Compliance with overseas labour market regulations, cultural awareness and language training for all staff is essential.

A polycentric staffing approach uses host-country staffing with parent-country staff in corporate management. Good: helps the company access good market knowledge, is cost efficient, and satisfies local pressure for employment Bad: limits management experience for host-country staff. A geocentric staffing approach uses the most appropriate staff for a particular role and location. Good: you get lots of managers with global experience Bad: This can be a complex and expensive policy due to local employment regulations, relocation and retraining costs. An ethnocentric approach uses parent-country staff in its business. Bad: limits business ability to interact with customers and learn from overseas markets.

Disputes can be very costly financially and to a business reputation and relationship with its employees. Workplace conflicts lead to higher levels of absenteeism, low productivity, legal claims and high staff turnover. An industrial dispute is a disagreement over an issue or group of issues between an employer and its employees, which results in employees ceasing work. Strikes are when workers stop working and aim to attract publicity and support. Lockouts occur when employers close the entrance to a workplace and refuse admission to the workers. Lockouts have been used to promote concession bargaining, to push employees to sign individual agreements, and in response to strike action. Pickets are protests that take place outside the workplace. Unionists stop the delivery of goods and try to stop the entry of non-union labour into the workplace. The major causes of disputes: Remuneration: wages, allowances, entitlements and superannuation. Employment conditions: working hours, leave, benefits Job security issues: retrenchment of employees, downsizing, restructuring, use of contractors, outsourcing Health and safety: physical working conditions, workers compensation provisions, protective clothing and equipment.

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

employers and managers: use grievance procedures and negotiate agreements with employees to resolve disputes.
governments: provide the institutions, policy and legislative framework for the resolution of conflict. investigate breaches of legislation

role of key stakeholders in resolving workplace disputes

employer associations: provide information and support to employers, assist in negotiations with unions and represent employers in tribunals

trade unions: represent employees in disputes from the shop floor to the national level, negotiate with management, represent employees in tribunals

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

Mediation is the confidential discussion of issues in a non-threatening environment, in the presence of a neutral, objective third party such as Fair Work Australia. Reduces the risk of disputes escalating and leading to expensive legal costs or industrial action.

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

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

agreement. o If conciliation fails the matter may be referred to arbitration o Arbitration is a process where a third party hears both sides of a dispute and makes a legally binding order to resolve the dispute. o Orders may end a restrictive work practice or behaviour, such as a lockout, or require a secret ballot of union members if strike action is proposed. Benefits and costs of workplace disputes Types of benefit/cost Benefits of industrial conflict Financial Costs of industrial conflict Lost production and sales adversely affect a firms income and levels of debt, and reputation may be damaged Some firms may close or relocate. Other businesses dependent on firms in dispute can be affected. Legal representation and fines = $ Stress created through changes due to restructuring of the work place. Working relationships may suffer as a result of conflict. Absenteeism, accidents and defect rates can increase. Rumours of downsizing cause fear, lowering morale. Verbal and physical abuse Demonstrations can disrupt communities

Personal

Social

Conflict helps workers to gain managements attention on major issues that may have caused dissatisfaction for a long time. Better work relationships resulting from a clearer understanding of work problems. Greater employee involvement and motivation may result from negotiated changes and improvements in training. OH&S issues can be reduced Introduction of multiskilling, new training ops and career paths that benefit everyone Community/employee welfare improved by changed practices.

Indicators are performance measures used to evaluate the business, team or individual, such as dollar sales achieved per employee per year. Benchmarking is a process in which indicators are used to compare business performance between internal sections of a business or between businesses. Indicators are gathered in human resource audits. A human resource audit is used to evaluate HR policies and practices in order to identify problems and develop solutions.

The indicators that reveal a workplace has a poor corporate culture include: High staff turnover Poor customer service High levels of absenteeism Accidents Disputes Internal conflict Good workplace culture involves: Flexible and family friendly practices Culture of trust High quality relationships High levels of training and mentoring Fun atmosphere Collaboration in decision making

Benchmarking may provide useful information about the businesss human resources, but may focus excessively on costs rather than what is actually being achieved. Informal benchmarking: any strategies such as networking (interacting with other people to exchange information) through informal discussions with colleagues in other businesses, researching best practice online and attending conferences. Performance benchmarking involves comparing the performance levels of a process/activity with other businesses. Best practice benchmarking involves comparing performance levels with those of a best practice business in specific areas. Balanced scorecard benchmarking: It benchmarks key performance variables with targets aligned with the strategic plan to see if business is meeting its objectives. Quantitative measures Key variables often include: Variances in labour budgets. Increases are most likely due to poor planning of staffing needs, higher unscheduled absenteeism, staff turnover rates. Costs of injuries and sickness. Can be due to poor training and lead to higher insurance premiums, and risks of fines and claims. Performance appraisals completed compared with targets Percentage of goals achieved.

Levels of labour turnover. Qualitative evaluation Qualitative evaluation involves detailed feedback and research, allowing judgements to be made about changes in behaviour or quality of service provided. Sources surveys and focus groups about workplace culture, relationships at work, and the quality of customer service and leadership. Analysis of industrial disputes and the issues raised may provide useful feedback about issues such as health and safety, rewards and benefits, and relationships in the workplace. Feedback from performance appraisals provides information useful in evaluating and planning training, recruitment and selection, development, rewards, and separation processes. Feedback from supervisors, consultative committees, customers and employees in organisational surveys provides useful insight into worker satisfaction, empowerment and customer service.

Businesses need to benchmark their turnover against that of other businesses in the industry and determine the type of staff leaving and why The costs of high labour turnover involve payouts for entitlements, hiring, inducting and training new staff. Productivity and service quality, corporate skills and knowledge are lost, particularly if there has been poor succession planning. Some level of turnover is considered healthy in businesses, as new ideas are brought in and often stimulate innovation in work practices.

Absenteeism is measured as the average rate of employee absenteeism, on an average day, without sick leave or leave approved in advance. High levels of absenteeism and/or lateness may indicate that workers are dissatisfied or that there is conflict within the workplace Revenue is lost as work is disrupted and can lead to lower productivity and higher labour costs.

Best practice businesses: Have regular safety audits Build a culture of safety using visible policy statements, safety signs and reminders Provide careful induction and regular ongoing training for staff They save on compensation claims, absenteeism, lost work time, replacement costs for damaged equipment, and improve their image to customers.

Overt manifestations: Employees: Pickets Strikes Work bans and boycotts Work to rule
Covert: Employees: Absenteeism High labour turnover rates

Management: Lockouts Dismissals, retrenchments

Theft and sabotage Reduced productivity Lack of cooperation

Management: Discrimination

Harrassment Exclusion from decision making

Work bans a ban or boycott is a refusal to work overtime, handle a product, piece of equipment, or a refusal to work with particular individuals Work-to-rule employees refuse to perform any duties additional to the work they normally are required to perform. Go slow employees work slow, causing customer complaints, and a backlog of work. Sabotage vandalism, and internal theft. Intended to harm or destroy the image of a firm

Surveys help employers measure and understand how staff feel about work, management and the business culture. Undertaken using: Paper surveys External consultants Online polls Exit interviews. Focus groups Effective leadership is one of the most important influences on employee satisfaction, particularly when employees feel: o Recognised and encouraged o Management is transparent o Promotion is merit based o Communication is honest and respectful.

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