HRM & the External Business Environment

Lecture 5 HRMT 2237 Semester 1, 2009 Professor John Cordery

The Harvard HRM framework

Stakeholder interests
Shareholders Management Employee groups Government Community Unions

HRM Policy Choices

Employee influence HR flows Reward systems Work systems

HR Outcomes
Commitment Competence Congruence Cost effectiveness

Long-term consequences
Individual wellbeing Organizational effectiveness Societal wellbeing

Situational Factors
Workforce characteristics Business strategy & conditions Management philosophy Labour market Unions Task technology Laws & societal values

HRM policies & practices are affected by 4 features of the external business environment
 

Social
Societys norms about work & employment

Political
Political pressures (informal & institutional) on how people are managed

Legal
Statutory rights & responsibilities of employees and employers

Economic
Local labour market conditions & economic pressures on organization

Social Factors

Social factors


What in society lends status to individuals?

Inconsistencies between social and organizational status need to be avoided, or mitigated

High PDI Venezuela Saudi Arabia Papua New Guinea Angola Indonesia Singapore France USA Canada Australia Low PDI

High Preference for Hierarchical Rewards Venezuela Saudi Arabia Papua New Guinea Indonesia Angola Singapore France USA Canada Australia Low Preference for Hierarchical Rewards

Power-distance national cultural values and employee preferences for hierarchy-based rewards at Chevron

Social factors
 

What in society lends status to individuals? What sorts of behaviors are discouraged/condoned?
Individualism Perceived Values Congruence

Resistance To Teams Resistance To Self-management

Power Distance

Perceived Fairness of Team Pay

Uncertainty avoidance

Resistance To Self-managed Teams

Kirkman & Shapiro (1997, 1999)

Social factors
  

What in society lends status to individuals? What sorts of behaviors are discouraged/condoned? What are regarded as the social responsibilities of the firm? WORKWORK-LIFE BALANCE
* flexible working for parents * caring for children * teleworking * maternity leave and pay * paternity leave and pay * adoption leave * dependants' and urgent personal leave * parental leave * childcare provision

Social factors
   

What in society lends status to individuals? What sorts of behaviors are discouraged/condoned? What are regarded as the social responsibilities of the firm? What forms of organizational control are regarded as legitimate and acceptable?

South Blackwater Coal Ltd (SBCL) employs 400 workers and is located approximately 900km north-west of Brisbane at the heart of the Bowen Basin coal mining region of Queensland. As part of policy development to ensure a safer working environment, management and trade unions were in the process of negotiating policies and procedures for drug-testing at the mine (in line with that of other mines in the region). Previously, testing only took place if staff were involved in an accident. During this process, management found a used syringe on-site and took this as prima facie evidence of illicit drug use in the workplace. Management immediately moved to install drug-testing procedures at the mine. Trade unions advised their members to refuse this blanket testing for drugs, at which point they were stood-down by the company. After one week and three visits to the Australian Industrial Relations Commission (AIRC) the case was (theoretically) resolved. Holland P. (2003). Surveillance & Society 1(2): 204-209 http://www.surveillance-and-society.org

Political Factors

Political factors


What do governments expect?

Minerals Council of Australia and Federal Government Memorandum of Understanding on Indigenous Employment and Enterprise Facilitation (MoU) launched in June 2005. Establishes new working arrangements between Government, industry and Indigenous communities, through: * a collaborative and localised approach between Government, industry and Indigenous people, including: * an emphasis on developing local partnerships that are resourced and empowered to develop local solutions and build upon successful programs; and * recognition that direct engagement with Indigenous people and building community responses are critical to the success of the partnerships; * increased collaboration within the minerals industry, rather than competition, in finding solutions with local Indigenous people and Government; * development of overarching Regional Partnerships Agreements (RPAs) between industry, all levels of Government and Indigenous communities, to achieve high-level alignment between the parties before consideration of project details; * development of an evaluation framework to assess the performance of the partnerships and the achievement of desired outcomes as identified by the regional partnerships * a commitment to the effective communication of successes and learnings across Government, the minerals industry and within Indigenous communities.

Political factors


What do governments expect?  What support can be obtained from the political system?
February 06, 2008
MITSUBISHI workers will be handed millions of dollars in Government assistance after the carmaker announced the closure of its Adelaide manufacturing plant. More than 900 people will lose their jobs when Mitsubishi closes its doors in South Australia at the end of March. Federal Industry Minister Kim Carr says Mitsubishi workers will receive a $50 million assistance package, to be funded by the state and federal governments and Mitsubishi.

Public works schemes Job search assistance Training long-term unemployed Mass retraining for redundant Training for young people Business start-up assistance Wage subsidies

Political factors


What do governments expect?  What support can be obtained from the political system?  What impediments are imposed?
23 February, 2009 Chris Evans the Australian immigration minister said that due to the current economic situation there will be a reduction in the level of immigration to Australia. Chris Evans also mentioned that six of Australia's trading partners are now in recession. For the last ten years Australia has enjoyed mining boom which has kept unemployment at a thirty year low.

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

Political factors


What do governments expect?  What support can be obtained from the political system?  What impediments are imposed?  Are aspects of employment relations subject to centralized bargaining & negotiation?

Political Factors
Conciliation & Arbitration Systems
y A system whereby industrial parties are encouraged to sort out their differences by means of conciliation (with the assistance of the industrial tribunal); however, when this fails to produce a negotiated outcome the tribunal may impose a binding decisionthat is arbitration. decision arbitration. y Sometimes this system is called compulsory conciliation and arbitration because the industrial parties must come to conciliation if the other party (or the tribunal) calls for this to happen, and any decision is binding on the parties.

Political factors


What do governments expect?  What support can be obtained from the political system?  What impediments are imposed?  Are aspects of employment relations subject to centralized bargaining & negotiation?  Are employees and employers politically organized and mobilized?

Legal Factors

Legal factors
Legal environment in Australia
State Australian Conciliation and Arbitration Commission Constitution Wages and conditions Contract of employment

Legal factors


What are statutory responsibilities of the organization?

Federally, includes:
Workplace Relations Act 1996 Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 Fair Work Bill (to come into force 1 July, 2009) Age Discrimination Act 2004 Disability Discrimination Act 1992 Human Rights and Equal Opportunity Commission Act 1986 Race Discrimination Act 1975 Sex Discrimination Act 1984 Privacy Amendment (Private Sector) Act 2000 Occupational Health and Safety (Commonwealth Employment) Act 1991 Safety, Rehabilitation and Compensation Act 1988 Superannuation Guarantee (Administration) Act 1992

Legal factors


What are statutory responsibilities of the organization?  What rights do workers have, individually and collectively?

All full-time employees are protected by a key set of pay and conditions which cover: * Guaranteed minimum wage rates * Maximum working hours * Four weeks annual leave * Two weeks personal/carers leave * One year unpaid maternity or paternity leave. Part-time employees get similar entitlements based on their hours of work. Casual employees are guaranteed minimum wage rates, casual loading and unpaid carers leave. Employees cannot be sacked because of their race, gender, age, disability, religion, pregnancy, family responsibilities or trade union membership. Employees have the right to join, or not join, a union. Employees must be issued pay slips and have accurate and complete time and wage records kept by their Source: http://www.workplaceauthority.gov.au employer.

Legal factors
Wages & Conditions Australian Workplace Agreements (AWAs) Agreements negotiated directly between an employer and employee(s), introduced under the Workplace Relations Act 1996 (WRA). Awards Written determinations created by federal or state industrial tribunals, specifying the minimum terms and conditions of employment, such as hours of work, minimum pay and types of leave allowable.

Legal factors
Wages & conditions (contd)
Certified Agreements Tend to cover only one workplace unlike awards, which could potentially cover the whole of a national industry. OEA) Workplace Authority (was OEA) A statutory body charged with the general oversight of AWAs.

Legal factors


Contract of employment
Contracts of service (i.e. employment) Contracts for service(s) (i.e. work performed by nonnon-employees) Challenge of Who is an employee?

Legal factors


What are statutory responsibilities of the organization?  What rights do workers have, individually and collectively?  What sorts of employment practices are sanctioned?
Labour Relations Legislation Amendment (WA) Act 2006
The Act incorporates a reasonable hours of work clause into the MCE Act. The changes specify that the maximum number of hours of work for employees are: * the ordinary hours of work as specified in the employee's industrial instrument (award or employer-employee agreement), or if there is no industrial instrument, 38 hours per week and reasonable additional hours. In determining whether the additional hours that an employee is required or requested by an employer to work are reasonable, a range of factors are to be considered. These include: * any risk to the employee's health and safety * the employee's personal circumstances (and family responsibilities) * the conduct of the operations or business, any notice given to the employee * any notice given by the employee of the employee's intention to refuse to work the additional hours * whether any of the additional hours are on a public holiday, and * the employee's hours of work over the previous 4 weeks. Source: http://www.deacons.com.au/

Legal factors
Termination of employment
Unfair dismissal Generally refers to a situation where regard for a fair procedure (i.e. the right to hear of a transgression and be given the opportunity to defend oneself) has been ignored or where a transgression itself does not reasonably suggest dismissal as an appropriate management response.

Legal factors


What are statutory responsibilities of the organization?  What rights do workers have, individually and collectively?  What sorts of employment practices are sanctioned?  What distinctions between workers are not permitted?

Equal employment opportunity laws



The governments attempt to ensure that all individuals have an equal opportunity for employment, regardless of characteristics such as race, colour, religion, sex or national origin.

Discrimination


Acts involving a distinction, exclusion, restriction or preference between one individual or group and another, which has the purpose or effect of disadvantage to one.

Discrimination (cont.)


Direct discrimination When someone is treated less favourably on the basis of a particular characteristic (e.g. gender) than someone with a different characteristic in circumstances that are materially the same. Indirect discrimination When a compulsory requirement is attached to a job (which has nothing to do with the real performance of the job) which would prevent substantial proportions of particular groups from being able to comply and the individual in question cannot comply.

Human Rights & Equal Opportunity Commission

A man who has a physical disability complained that employees with disabilities, other than that disabilities acquired at work, were not eligible for overtime rosters. The complaint was resolved when the employer apologized and compensated the employee for lost overtime earnings. A woman complained that she had been discriminated against when she was not successful in a job application after declining to provide some information in response to medical question which she saw as broader than justified by the inherent requirements of the job. The complaint was resolved when the employer agreed to review its medical checks and take into account feedback on their extent. A woman with a hearing impairment complained that she had been discriminated against when a job offer as a customer support officer was withdrawn after a hearing test had indicated she had less than 90% hearing. The complaint was resolved when the employer apologized and advised that although 90% hearing was a functional requirement of the job this should have been assessed taking into account possible reasonable adjustments, and the application should be re-considered accordingly. A woman who has an anxiety disorder complained that her applications for advancement in a public sector position had been rejected because she had experienced two anxiety attacks in two years. The matter was resolved when the employer agreed to assist her in drafting a new application for advancement; to provide her with project work which would strengthen her application; arrange for an independent committee to consider her application ; accept the application if this was recommended by the independent committee; and arrange training for relevant staff on mental health issues in the workplace.
http://www.hreoc.gov.au/disability_rights/decisions/conciliation/employment_conciliation.html