HSC Business Studies Jimmy Ngo Year 12 - 2013

10.4HSC topic: Human resources RIPESStudents learn about:dtyuRole of human resource managementstrategic role of human resources Human resource management refers to the management of the total relationship between an employer and employee in order to achieve the strategic goals of the business. HRM is often used as a substitute term for industrial, employment or workplace relations. It is a strategic approach that incorporates all aspects of managing the employer-employee relationship in the workplace including functions such as recruitment, development, etc. Thus, enhancing the firms ability to gain a sustainable competitive advantage. HRM sees employees as assets rather than costs & encourages open communication + goal orientation. Staff costs are generally at least 60% of operational costs. Recently, governments have tried to assist firms in becoming more competitive by creating more flexible legal framework for HRM.interdependence with other key business functions The HR department works closely with operations to ensure that the business has employed staff with the relevant skills and experience necessary for the production of goods + services. A major role of HR is to hire and train employees for the marketing function, employing staff members skilled in developing products which meet the needs + wants of customers. Finance works with human resources in terms of being used to measure performance, gathering data on earnings, productivity and customer satisfaction which reflect the staffing and development needs of the business. Line managers are responsible for the management of staff contributing to the prime function if the business e.g. production manager, service manager, sales manager, etc. outsourcinghuman resource functionsusing contractors domestic, global Outsourcing - the use of outside firms to undertake one or more key business functions. Globalisation & technological change have increased the pressures to be competitive. Often used to obtain better functional quality + lower cost service than would be provided internally. Outsourcing, especially offshore (global subcontracting) significantly reduces costs for some firms. Major areas outsourced in AU are facilities/property management, financial processes (e.g. payroll, internal auditing) and most commonly human resources functions. Top outsourcing reasons (from most to least) reduce costs [productivity], focus on core functions, improve quality, increase speed to market, foster innovation & conserve capital. Human resource functions allows firms to focus on core functions when HR functions like recruitment, training and induction of staff are outsourced. Outsourcing also used to review business practices + implement strategies to transform the business. Common HR areas outsourced for review + development include change management & benchmarking. A contractor is an external provider (individual or business) of services to a business. Primarily used to create cost savings or access greater capabilities to improve competitive advantage. Contractors are particularly used for processing business functions. Contracting generally recommended for non-core functions, allowing staff to focus on broader aspects of firm management. Major risks include cost overruns (increase), quality loss, difficulty in coordinating activities, and difficulty in monitoring quality + performance in outsourced activities. In 1 major AU firm, outsourcing maintenance to avoid industrial problems led to loss of its competitive advantage. Previously proactive in managing maintenance but became more reactive in hands of its contractors + breakdowns in production proved to be costly. Most common forms of outsourcing - labour hire/employment agencies, dependent contractors, independent contractors & outsourcing suppliers.

Domestic subcontracting allows firms to focus their resources on essential business functions, leaving some of detailed support or compliance-related activities to specialists. Thus, allows firm to acquire benefits of new perspectives such as leadership development. It is very commonly used nowadays + firm avoids need to employ additional in-house staff, along with all the overhead expenses involved. Contracting/subcontracting carries risks including the potential loss of direct customer contact, which may impact on long term sales. Where internal capabilities are lost through outsourcing functions, the timelines + effectiveness of communication & problem solving may be diminished, particularly if critical incident or breakdown occurs. Global subcontracting during last decade, due to global competition + the GFC, many firms turned to offshore contractors in India & the Philippines to reduce costs. Others used outsourcing to eventually operate in new foreign markets, to get more acquainted with market needs before expanding with a greater presence in the market. Process outsourcing dominant form of outsourcing of repetitive, easily-measured and documented work (e.g. recruitment, multi-country payroll management, complaints, etc.) Project outsourcing most commonly found in areas such as HR, marketing, design, IT & research. Involves much greater use of intellectual property + strategic business knowledge; tends to be long-term, difficult to measure & quality cannot be fully anticipated more risk. Global outsourcing carries risks including difficulty controlling the quality + reliability of service, cultural differences (language), security issues (sharing confidential info), lack of remedies for breach of contract (under foreign legal systems), often high labour turnover & high quality staff may be replaced by less qualified staff (declined quality of service). Potential advantages include expand flexibility/capacity, cost savings, access new networks, allows business to focus resources on main functions, train staff & improve legal compliance. Potential disadvantages include less integrated organisation, hidden costs, loss of security + confidentiality, reduce business learning through reliance & less direct client contact. Disadvantages need to be weighed up against benefits (cost savings + better productivity).Key influencesstakeholders employers, employees, employer associations, unions, government organisations, society Stakeholders are people who have an interest or concern in the business, and in this case, the human resources process. They have common interests in the survival and success of the business; though have differing views which may bring up conflict. Employers and employees are the major stakeholders in a business. An employer, for legal purposes exercises control over employees, has responsibility for payment of wages and holds the power to dismiss employees. They are involved in developing programs that focus on improving business performance. Employers responsibilities are increasing as recent legislation encourages them to negotiate agreements + resolve disputes in workplace. But, employers have been widely criticised in many management surveys for failing to address issues in effectively managing employees. Under recent legislation, employers have gained more power to make agreements relevant to individual workplace/enterprise. Not all employers support government policy enough to engage in full confrontation with unions + employees, as costs of such engagement may be high, with prolonged industrial disputes. An employee is a worker under an employers control. Control may involve the location of the workplace, the way in which work is performed and the degree of supervision involved. On average, employees are more educated + skilled than in the past. Businesses hoping to retain qualified staff need to be committed to developing staff + training plans, rewards & opportunities for greater employee involvement. Around 1/3 of employees are keen to get more work-life balance. Changing structure of work over last decade has affected employees access to work. E.g. inexperienced young people struggle to obtain full-time jobs especially in services sector. Labour shortages are looming due to ageing population in AU so prospects for older & younger workers + women are improving. Under Labor Governments Fair Work Act 2009, collective bargaining is encouraged + expected to reduce some of the more unpopular trade-offs workers were forced to accept under Liberals Work Choices. Employer associations are organisations that represent and assist employer groups. They are usually respondents to the award (which is cited in the awards) covering the employees of their members, and covering employers in the same or related industry. Examples AiG (AU Industry Group), AU Medical Association, ACCI, etc. Originally created by employers as counter-party to unions, to represent employers in the creation of awards through the conciliation + arbitration system established in 1904. Assisted employers in formulating policies + processed logs of claim served on their members by unions. A log of claims is a list of demands made by workers (often through union) against their employers. These demands cover specific wages & conditions. Employers may also serve a counter-log of claims on the union. Today, their main role is to act on behalf of employers. They also: Provide advice on matters such as awards, unfair dismissals & discrimination issues. Make submissions to safety net wage cases + negotiate agreements. Lobby governments + other organisations with views + interests of employers, industries & trade. Unlike unions, they represent employers on a broader range of issues. Like employers, their objectives are similar, and include increasing profit, minimising costs & being competitive. Trade unions are organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of their members. Union membership peaked at 51% in 1976, falling to 46% of all employees in 1986. It has fallen dramatically ever since reaching the current level of 20% of the workforce. Major reasons for the decline in union membership are globalisation, recent legislative changes, privatisation of public businesses and the growth of service industries. Trade unions work with employees to demand for better wages and working conditions, job security and participation on decisions. Their activities can give rise to workplace disputes which can result in industrial action taking place in order to reach their objectives. Over time, government organisations have significantly affected the industrial relations system as a result of their key roles, as follows: Legislator: pass laws in parliaments, which provide legal framework for industrial relations. Legislation had led to growth of judicial system & institutions + processes used by employers & employees to conduct bargaining + resolve disputes. Employer: employ almost 1/3 of AU workers (e.g. teachers, police force). Often regarded as pacesetters of responsible IR relation policies (such as introduction of maternity leave). Responsible economic manager: operating at macro-level, they are keen to ensure non-inflationary, stable economic growth & high employment/living standards. At times, there may conflict between economic goals which impact IR. E.g. cut spending through reductions in the size of public sector workforce to reduce budget deficit increases unemployment). Administrator of government policies on industrial relations: through established agencies & departments, governments are able to implement legislation they enact. Representative of AU in the international arena, in foreign affairs, trade and international labour matters: AU is a foundation member of the ILO & represented on its governing body. Social justice legislation passed = related to discrimination & human rights. Governments have attempted to increase powers to regulate IR system through use of External Affairs + Corporations powers given under Constitution of Australia. Following abolition of Work Choices legislation, came the introduction of the FWA act. To simply IR + improve efficiency, national system of IR = created since 2007 under Labor. Statutes are laws made by federal and state parliaments; for example, laws relating to employment conditions. These provide framework for awards + agreements, the resolution of disputes & require employers to meet OH&S requirements, maintain workers compensation insurance, provide all employers with superannuation + annual or long-service leave, ensure employment practices in workplace are free from discrimination & give each new employee (covered by national IR system) a Fair Work Information statement (employee rights). Examples of federal legislation include - Fair Work Act 2009, Workplace Relations Act 1996, and Sex Discrimination Act 1984. Governments also establish agencies to monitor these regulations, including Fair Work Australia, Anti-Discrimination Board & Equal Rights for Women Agency. The national IR system, implemented under the FWA 2009, is administered by the Federal government. It covers all employees of constitutional corporations (foreign corporations + trading or financial corporations formed within limits of the Commonwealth) in all states & most private employees formerly covered under state awards + most private employers. Key elements of new framework include ten National Employment Standards (NES) developed to provide basic protections to employees & protection against unfair dismissal. The 122 modern awards is an industry/occupation-based award which covers all private sector employers + employers who perform work that falls within their scope. They replace all existing national system awards (except those applying to a single enterprise). They do not cover employees earning higher incomes. Industrial tribunals exist at federal + state levels to enforce laws established by government. Fair Work Australia is a tribunal with primary functions like settling disputes through conciliation, supervising the making of agreements or awards + awards simplification, hearing appeals & handling unfair dismissal cases. Awards are legally enforceable, formal agreements made collectively between employers + employees & their representatives at industry level (determined by an industrial court or tribunal + set out minimum wages & conditions employees). Award simplification - process of reducing the number of matters in each award & eliminating inefficient work practices. Minimum Wage Panel is responsible for hearing annual wage cases + setting minimum wages for employees in the national workplace relations system. Under the Constitution, the Federal Court of AU has judicial power (interpret + apply laws) to determine disputes about existing rights & make decisions about these matters. It handles cases relating to industrial action & breaches of industrial laws, interprets industrial legislation & is able to impose penalties for breach of an award or order (e.g. discrimination). SOCIETY has a number of expectations regarding employment conditions. In 1948, the General Assembly of the UN, consisting then of 56 countries, passed the Universal Declaration of Human rights recognising importance of work to peoples lives + need for fair & just conditions + rights for those at work. Community demands for safety + wellbeing at work have increased over recent decades, as has pressure to eliminate discrimination against female, indigenous and disabled members in the workforce. For businesses, it means balancing between need to reduce its biggest cost (labour), as global competitive pressures increase, and the needs of employees (particularly those with dependent families). legal the current legal frameworkthe employment contract common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contractsoccupational health and safety and workers compensation antidiscrimination and equal employment opportunity The current legal framework which influences HRM consists of statute law, law created by parliament, and common law, laws made by judges in courts. Changing community + workers expectations on social justice (involves firms having being responsible or behaving in fair + ethical manner towards employees, customers & broader community), safety & environmental issues are increasingly reflected in legislation. AU has shifted from a strongly centralised IR system (collectivist approach in which disputes are referred to industrial tribunals, like FWA, for conciliation + arbitration) in 1980s to more decentralised IR system (employers + employees negotiate wages & working conditions in workplace, through collective/individual bargaining without tribunal involvement). The current legal framework is enforced by Fair Work Australia, which was introduced due to the Fair Work Act 2009. They act as the nations workplace relations tribunal, carrying out a range of functions including the provision of a safety net of minimum conditions, facilitating in good faith for enterprise bargaining, regulating the taking of industrial action and resolving workplace disputes through conciliation, mediation and arbitration. It is the role of the employers and employees to gain conditions above the award through negotiation, and then sign into a contract. The employer aims to improve productivity and flexibility and the employee aims to improve the benefits received. An employment contract is a legally binding, formal agreement between employee and employer. These contracts set out the rights and obligations that both the employee and employer have to uphold, as well as how the employee will be rewarded and the work requirement and conditions they will receive. Common law is developed by courts and tribunals - has established various rights & responsibilities for employers + employees. Under it, obligations the employer has includes: Providing work Meaning that they are not allowed to stand down employees when there is no work, and must pay correct wages even if work is not provided. Payment of income Are required to pay the income stipulated in the award, enterprise agreement and contract, and reimburse employees for expenses obtained during work. Meeting industrial relations legislation Providing a workplace and work practices (like equity policies) free from any form of discrimination, adhering to legal requirements, and ensuring that workers are protected against unfair dismissal. Equity in the workplace is the provision of equal opportunities for all employees to gain access to jobs, training & career paths in the workplace. Duties of Care Employers are bound under various state and federal Occupational health and safety acts to provide reasonable care for the safety of employees. Additionally, employees also have obligations including: Obeying lawful and reasonable commands When they do not obey commands they are at risk of dismissal. Reasonable orders do not expose employees to harm. Performing their job with care and skill Not behaving in a negligent manner. Act in good faith - must not disclose confidential information/trade secrets to another employer (especially to a competitor when changing jobs). The National Employment Standards set out in the Fair Work Act contain 10 minimum standards that employers must comply with: Maximum weekly hours of work 38 hours a week as well as reasonable additional hours. Requests for flexible working conditions In the case of parents and carers to allow them to meet their family commitments. Parental leave Up to 12 months unpaid leave plus the right for another 12 months. Annual leave 4 weeks paid leave per year. Personal/Carers/Compassionate leave 10 days paid leave, and two days unpaid carers leave if required, and 2 days compassionate paid leave if required. Community service leave Unpaid leave for voluntary emergency activities and up to 10 days paid leave for jury service. Long Service leave A transitional entitlement for employees. Public holidays Paid day off for public holidays. Notice for termination and redundancy pay - Up to four weeks notice of termination and up to 16 weeks redundancy pay. Provision of a Fair Work Information Statement Provided by employers to address major employment matters and bodies. Awards are legally binding documents containing minimum conditions for an industry or occupation, addressing issues like work flexibility, pay rates, overtime & penalty rates. Award coverage is high in hospitality, retail & community services. An employees base rate of pay is either determined by an award or agreement that covers the employee, or the national minimum wage to $589.30. Fair Work Australia reviews the national minimum wage and awards annually through National Wage Cases and takes into consideration of the performance of the national economy and relative living standards. Enterprise agreements are collective agreements made at a workplace level between an employer and a group of employees about the terms and conditions of employment. Collective agreements are made between employee(s) (or unions) and employer(s). There are three types of enterprise agreements under the Fair Work Act 2009: Single-enterprise agreements Made by a single employer and a group of employees. Used when employees are engaged in a joint venture. Multi-enterprise agreements Made by two or more employers and a groups of employees. Used when employees share common funding and work collaboratively. Greenfields agreement Agreements made by one or more relevant unions. The key features of enterprise agreements are: Covers rates of pay, penalty rates and overtime, allowances, hours of work, personal and annual leave, any matters related to the relationships between the employer, employees and representative organisation involved, and how the agreement will operate, including the expiry date. Enterprise agreements must be approved by Fair Work Australia, who must be satisfied that a general agreement has been made is better than the relevant modern award. The better off overall test (BOOT) requires that each of the employees to be covered by the agreement is better off overall than under the relevant modern award. Individual contracts exist when an employer and an individual employee negotiate a contract covering pay and conditions. These contracts are more common in the private sector, particularly by a non-union enterprise, and at a professional and managerial level. The conditions they provide need to equate with the minimum provisions of related awards. They may be verbal or written. Many are informal and offer much less protection for both parties than other agreements. Independent contractors, often known as consultants or freelancers, undertake work for multiple clients; however, they do not have the legal status of an employee. Their contract duration has a set term or once a specific project is completed. During this time, they control their work and can delegate others. A contractor carries out the risk of the job, including covering their own superannuation, tax and leaves. Casual employees have contracts with employers for short-term, irregular or seasonal work. Due to their lack of entitlements, they often receive a 20-25% loading for extra pay. They are entitled to some benefits if employed regularly. Many employers prefer casuals as it reduces costs for recruitment/dismissals & on-costs (additional costs involved in hiring employees above the cost of their wages. These costs traditionally add around 25% of cost of wage & include sick leave, holiday leave, leave loading, superannuation, retirement & redundancy payments). Part-time employees work less than 35 hours a week and have access to employment entitlements though on a pro-rata basis. The Work Health and Safety Act 2011 (NSW), replacing the National Occupational Health and Safety Commission Act (1985) states that: Employers must ensure the health, safety and welfare at work for all employees by providing a safe system of work. All employers must take out workers compensation insurance. Employers must ensure that employees are not exposed to safety risks. Ensuring employees who engage in bullying will be fined. WorkCover inspectors may inspect the workplace. WorkCover must be notified of any serious injuries or deaths in the workplace. Safe Work Australia was established to conduct research and develop national standards, codes of practice and common approaches to WHS/OHS legislation. They have worked with the state governments to harmonise WHS laws. An ideal business will undertake regular safety audits, benchmark their performance and implement comprehensive safety programs. These WHS laws have been implemented to ensure that employees are given a safe environment to work in. Workers compensation provides a range of benefits to an employee suffering from an injury or disease related to their work. It is also provided to families of injured employees when the injury/disease was caused by, related to, their work. When an accident occurs, the employer has a legal obligation to ensure the injured worker receives all medical and rehabilitation care & does not suffer from loss of income, otherwise they are at risk of the employee claiming compensation or suing under common law. Workers compensation is an ethical issue face by businesses, and the implementation of laws ensure that employees are not disadvantaged if they receive work related injuries. 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 work. Anti-discrimination are the measures taken into stopping the unjust treatment of groups of people based on demographic factors. Anti-discrimination legislation has been enacted to protect employees from direct and indirect discrimination in all aspects of the human resources process. Employers need to therefore comply with this legislation and audit all policies and practices to ensure they do not discriminate. There are many forms of legislation implemented to deal with this, including: Sex Discrimination Act 1984 (Cwlth) Anti-Discrimination Act 1977 (NSW) Affirmative Action (Equal Employment Opportunity for women) Act 1986 (Cwlth) Agencies are also available to support and monitor the legislation, and this includes the Australian Human Rights Commission and the Anti-Discrimination Board (NSW). Businesses can eliminate discrimination through implementing a number of strategies such as writing and communicating policies, making sure there policies and procedures are clearly documented, and training managers and staff about issues of cultural diversity. 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 concept allows everybody to have the same opportunity. Employers with more than 100 employees that all have received a higher education must develop an affirmative action program and submit a report to the Equal Opportunity for Women in the Workplace Agency to ensure that it complies with EEO legislation. The aim of this program is to remove discriminatory employment barriers and promote equality. Affirmative action refers to measures taken to eliminate direct and indirect discrimination, and for implementing positive steps to overcome the current and historical causes of lack of equal employment opportunity for women. To improve equity in the business, managers can implement strategies such as: Develop a code of practice to communicate a business commitment to EEO. Benchmarking to analyse the effectiveness of the business EEO strategies. Implementing a system to gather, monitor and evaluate statistics on employment.economic Economic cycle refers to the fluctuations in the level of economic growth due to either domestic or international factors. Derived demand demand for labour (employees) is determined by demand for goods + services within the economy. During periods of economic growth, if labour shortages occur, employers compete for employees by offering higher wages. Unions may use their stronger bargaining power to demand significant wage increases, which then puts upward pressure on costs + prices. Thus, this causes inflation (which is a constraint on economic growth). During economic downturns, the demand for goods + services falls. So firms are forced to reduce the size of their workforce & limit their ability to provide large wage increases. Structural change refers to a change in the nature and pattern of production of goods and services within an economy. This includes a significant growth in the level of services in an economy compared to other sectors. Structural change occurring in the economy has led to rapid employment growth in services sector (accounts for 86% of total employment). Employment is growing in industries like property, business, retailing, trades, tourism, educational services, hospitality & community + personal services. Traditionally, some of these were dominated by women. As sectors develop, recruitment, selection & remuneration have become important industrial issues. With an ageing population, flexible staffing arrangements, retention & mentoring increase in importance. Effective training + staff empowerment are critical to business success in such customer-based service industries. In manufacturing, removal of protection (tariffs + quotas) has increased business exposure to international competition. Subsequent fall in manufacturing employment has been hastened by rapid technological change. Globalisation refers to the integration between different countries and the increased impact of international influences on all aspects of life and economic activity higher profitability. Reduced protection has increased competitive pressures on businesses since TNCs now reside with domestic firms. Many firms outsource their non-core functions offshore or subcontract production to effectively compete. Firms are increasingly prepared to relocate production units in places where dispute levels, labour and regulatory costs are lower. Increasing role for international organisations (e.g. ILO) + trade blocs (e.g. EU & WTO) to promote trade between countries that adhere to social justice principles.technological Technological change is the major source of improvements in productivity, communication & competition between businesses. It has accelerated structural change, created new jobs whilst made others redundant. Changes and improvements in technology continually increase the costs of training and retraining staff. This has negative implications in the short term, though the use of new technology can improve productivity and lower costs in the long run. Businesses can restructure and re-engineer their networks, allowing them to be offshore due to electronic communication. Additionally, technology has also allowed many employees to work at home.social changing work patterns, living standards Social influences are the attitudes, beliefs, and values that society holds that influence human resources, and this includes changing work patterns and living standards.CHANGING WORK PATTERNS Over last 2 decades, there has been dramatic growth in part-time + casual work, largely due to growth in finance, retail, hospitality & community service industries. Most part-time workers do not want additional hours but rather work that offers flexibility in balancing their work & personal lives. By May 2010, men employed part time = 17% while women = 46%. Career flexibility and job mobility have increased. Around 14-16% of employees are considered job mobile & only 44% of full-time employees have work for current employer for more than 5 years. Most mobile are aged 20-24, AU born, of English speaking background, and found in retail or hospitality industries. Many leave full-time positions after developing specialist skills + experience to become independent contractors or consultants. Increasing feminisation of workforce = reflected in rising female participation rate (refers to proportion of women aged 15-69 employed or actively seeking work) 59% in 2011. Their influence on workforce is reflected in increasing calls for work-life balance & recent improvements in parental + carers leave conditions. Ageing of the workforce refers to the growth in the average age of the population due to sustained lower fertility and increasing life expectancy. As a result, there are proportionally fewer children under 15 in the population, and more in older age groups. Likely to see significant shortage of skills in community over the next few years. Flexible working arrangements will be critical in utilising thus this ageing population, particularly women, who are concentrated in health, education & society + culture. Businesses + governments will need to respond by enhancing the skills of the population & create incentives to encourage staff to postpone retirement. Early retirement the average age of retirement from full-time work has increased & is 53, however, participation in part-time work is much higher suggesting older employees using gradual withdrawal approach to retirement. Most common reasons are eligibility for superannuation or for health reasons.

LIVING STANDARDS Australians have very high living standards - such include OH&S, regular wage increases, performance bonuses, fringe benefits, and leave & superannuation benefits. However, there are firms which seek to undercut conditions through excessive outsourcing + casualisation of workforce or by shifting operations offshore to reduce costs this will be challenged by unions keen to avoid erosion of employees living standards. A 2010 report, Shifting Work and Working Life in Australia, prepared for the ACTU, indicates that there been major concerns for Australians about living standards + working life over the last few years. They are concerned about issues regarding increasing income inequality in AU, casualisation of workforce, increasing pressure to manage finances in lives as governments retreat from welfare + encourage individual responsibility & work-life balance.ethics and corporate social responsibility Ethics and corporate social responsibility refers to the obligation where a business has to work with the full range of stakeholders to assist in the betterment of society. Ethical business practices are those practices that are socially responsible, morally right, honourable and fair. Unethical practices can lead to low productivity or industrial disputes. Many firms are realising the benefits of a more committed workforce and good public reputation achieved through embracing ethical principles of CSR. Socially responsible, ethical employer recognises that: Good working conditions + environment should motivate + retain staff, performance = maximised when staff feel valued + rewarded for efforts, an effective workplace benefits from strong relationships + teamwork & a high level of CSR is crucial for a good public image. Ethical framework must be developed for workplace, in collaboration with major stakeholders may include a code of conduct and a code of ethics. A code of conduct is a statement of acceptable and unacceptable behaviours in a business. A code of ethics is a statement of a firms values and principles. Benefits accruing from ethical practices are increasingly evident form research and include: Staff retention + absenteeism rates improve as staff feel more valued + motivated. Business costs are reduced + business performance is enhanced. Significant marketing + business opportunities best practice employers enjoy regular publicity in the media, in journals & on the internet. Best practice refers to business practices that are regarded as the best or of highest standard in industry. Working conditions ethical employer are expected to achieve safe + fair working conditions that improve the welfare of employees. This is achieved through: Compliance with social justice + industrial legislation covering all aspects of HRM. Improving communication and fostering teamwork + empowerment of staff. Establishing a code of practice for customers, employees and suppliers. A code of practice is a statement of principles used by a business in its operations. It generally refers to practices that are seen as ethical or socially responsible. Global competitive pressures has been reflected in rapid growth of precarious employment predominantly casual + part-time leading to loss of job security, long shifts and no leave entitlements reducing living standards of employees. Exploitation of adult workers through outsourcing + subcontracting locally and offshore is often raised as a major ethical issue. Many people are concerned about the nature of child labour globally, even though the business is saving on costs. Ethical businesses have demonstrated CSR through strategies through strategies such as regularly undertaking audits of their factories abroad and working with agencies to support ethical practices in their local + offshore operations. E.g. In clothing industry, traditionally renowned for sweatshops, firms seek accreditation from agencies like Ethical Clothing AU. Processes of human resource management It is crucial that the HRM functions & processes are aligned with the strategic direction of the business. Two major HR aspects need to be planned in all businesses: Short + long-term HR needs for the business, through a HR inventory of the business. Needs are influenced by business development plans & strategy, nature + location of development & external factors government policies, economic, technological change, social trends, etc. Strategy needed to meet these needs may include recruitment, downsizing, outsourcing specific programs to build new capabilities, improve competitiveness & transform culture.acquisition Acquisition is the process of attracting and recruiting the right staff for roles in a business. Initially, business must identify the need of recruiting to see whether it would be efficient + better for the business, or if training existing employees will be better. This is a major factor due to employing new staff into the business can incur significant costs. Management need to determine whether the benefits outweigh the costs & other alternatives. Acquiring the suitable staff is critical in managing HRM processes. It involves analysing: Internal environment particularly business goals + culture. The focus may be on cost containment, growth, downsizing, improved customer service/quality, etc. It influences the demand for specific skills & helps define types of staffs suitable for the firms culture. External environment includes economic conditions, competition, technology, and legal, political, and social factors. Once needs are determined, options are considered including managing for shortage or surplus of staff. Job analysis/design is required to meet needs of new positions they are undertaken through staff interviews, observations & reports from performance appraisals + evaluations. Job specifications can then be developed for applications through recruitment. Recruitment is the process of locating and attracting the right quantity and quality of staff to apply for employment vacancies or anticipated vacancies at the right cost. Employee selection involves gathering information about each applicant and using that information to choose the most appropriate applicant. Effective recruitment (either internal or external) + employee selection involves A fair, non-discriminatory and legally compliant selection policy and process. Ensure that they hire motivated applicants which have goals and values which are aligned with the business and its culture. Implementing placement strategies to ensure that the applicant maximises the productivity of the business. Placement involves locating the employee in a position that best utilises the skills of the individual to meet the needs of the business.development Development is the process of developing and improving the skills, abilities and knowledge of staff, through induction, ongoing training and further professional development. Research shows that employees who feel competent in performing their jobs and are recognised for their achievements are more motivated and satisfied at work. Development focuses on enhancing employees skills through: Further professional learning, mentoring or coach and performance appraisal + management to allow them to take advantage of opportunities to develop a career with the business. Development in the long term will reduce costs (through increasing labour productivity) and therefore increase profitability. An induction program is planned to introduce a new employee to the job, their co-workers, the business & its culture. Most employees, who leave a business, depart in the first three months so the need for support is greatest when employee is new. A well-prepared program gives employees a positive attitude to job/firm, builds confidence, stresses major safety policies + procedures & their applications & helps establish relationships with co-workers. Ultimately, it is training given to new employees to enable them to do their job effectively. The aim of training is to seek a long-term change in employees skills, knowledge, attitudes and behaviour in order to improve work performance (productivity) in the business. A businesss ability to remain competitive can be affected by the extent of offered training. The key features of an effective training program includes the following:1. Assess the needs of the individual (e.g. skills), of the job (competencies required) and of the business (culture, goals, etc.). Assess if skills + knowledge need to be further developed.2. Determine the objectives of training program for the business, job and individual. Management input + support at this stage is critical to a successful training program.3. Consider the influences. Internal include attitude of employees to training, staffing, financial & physical resources available to operate program. External includes any new research on relevant training issues & government programs or support available for training. 4. Determine the process that is: the content of the training program, learning principles to be applied (including participation, repetition, demonstration & feedback), learning methods to be applied (such as lectures), location of training program (on or off-site) & the participants involved employees, supervisors, HR managers & external consultants.5. Evaluate the program strategies include tests + surveys, both prior to training + after training, performance appraisals, benchmarking of key indicators, etc. Evaluation can be done over time in terms of changes in key indicators (e.g. cost of sales, sales volumes, etc.) Today, organisational (development) structures are less hierarchal and flatter in structure. Flatter structures may have improved employee autonomy and efficiency but have reduced promotional opportunities. HR managers need to use strategies to retain talented staff: Job enlargement increasing the breadth of tasks in a job. Job rotation (multiskilling) moving staff from one task to another over a period of time. Job enrichment increasing the responsibilities of a staff member. Job sharing where two people share the same job. Self-managing teams in which roles + decisions are determined by their members. Mentoring and coaching where a leader or more experienced member of staff provides advice and support to another person developing skills in the area. Mentoring and coaching are increasingly used to motivate + develop staff with leadership potential. Mentoring is a mutually agreed role, which suits experienced staff keen to transfer knowledge & skills through succession planning. It is more focused on building a personal relationship that encompasses the life experience of both parties. Often those being mentored select their mentors + are free to accept or reject advice offered. Coaching is focused on improving skills + performance & on helping individual manage specific work roles more effectively. Coaches may be provided by the business or may be sought by those seeking further development.

Performance appraisal is a process of assessing the performance of an employee, generally against a set of criteria or standards. It is a systematic process is used to assess an employees suitability for promotion and their potential value to the businesss success. Performance appraisal involves four main objectives: To provide feedback from management to employees regarding work performance. To act as a measurement against which promotion and pay rises can be determined. To help the business monitor its employee selection. To identify employees training and development needs. If most employees continually perform below expectations, recruitment + selection process may be need to be changed or extra training + development may be required. Although many managers are uncomfortable with evaluating employees, effective performance appraisal is a crucial function of good HR management. Appraisals need to have criteria that are job related, the appraising staffs have been trained and there is no discrimination in the process. Employees more likely to value a performance appraisal if they are allowed to discuss their performance + challenge their evaluation.maintenance Maintenance is the process of managing the needs of staff for health and safety, industrial relations and legal responsibilities, including compensation and benefits, of all staff. In HRM, maintenance focuses on the processes needed to retain skilled staff. Staff wellbeing is maximised through encouraging staff to participate in decision making & giving employee some control over their work lives. Employee participation strategies include involvement in teams, collective bargaining, workplace surveys + activities these fosters involvement in decision making. Offering family-friendly programs that support work-life balance is critical in workplaces such as telecommuting, part-time work & flexible working hours.COMMUNICATION AND WORKPLACE CULTURE Effective HRM depend heavily on the strength of a businesss communications systems. Poor communication is reflected in workplace conflict + high turnover rates. Common methods of communication are regular team meetings between managers, or supervisors, and employees; staff bulletins + newsletters and social functions. Email is often criticised for being source of misunderstandings + tension if protocols are not established for constructive communications + timelines for feedback. Strategies that focus on building trust + direct communication between people are critical in preventing conflicts & escalating issues. Communication should help in building a positive workplace culture.EMPLOYEE PARTICIPATION Firms encourage employee participation to improve communication, empower employees & develop their commitment to improving quality + efficiency. Businesses benefit from employee experience + knowledge on job, and improvements they suggest are often critical to a businesss competitiveness + success. More effective participation is fostered through regular team meeting/briefings to discuss customer feedback, company trends & issues these build shared purpose + firm identity. Other strategies include participation through membership of board of directors, joint consultative committees & employee surveys + feedback from performance interviews.BENEFITS May be monetary or non-monetary and extent of benefits available will reflect the resources of the business & the nature of its activities. Typical benefits include flexible working arrangements, paid training opportunities, travel allowances, health insurance, subsidised gym membership, housing & company car. Firms carefully consider value of these benefits in terms of retention of staff + workplace culture, as they are expensive + some attract an employer-paid fringe benefits tax (FBT). Fringe benefits tax (FBT) is a tax employers must pay on certain benefits they provide to their employees or their employees associates such as a family member. It is based on the taxable value of the various fringe benefits provided. Benefits considered for FBT include airline transport, housing loans, car parking, etc. Westfield AUs benefits study assistance, online textbooks, business improvement awards. FLEXIBLE AND FAMILY-FRIENDLY WORK ARRANGEMENTS Around 1/3 of AU employees cite need for work-life balance as major consideration in future work choices. Employers are responding with more flexible working arrangements to attract + retain staff. Such arrangements are reflected in the New Employment Standards. Flexible working conditions allow firms to work more efficiently or allow employees to better balance work & family responsibilities. Typical flexible working conditions are: Remuneration (reward) options, flexible working hours, career break schemes, job sharing, work-from-home arrangements, family leave and part-time work arrangements. Family-friendly programs are effective in retaining staff in longer term as they recognise the interdependence of work & family life + reduce problems involved in managing family responsibilities. Such programs also create a positive image of the firm in the community.

LEGAL COMPLIANCE AND CORPORATE SOCIAL RESPONSIBILITY Employers are required by law to ensure that HR procedures and policies comply with existing legislation, including anti-discrimination, OH&S, taxation, IR & agreements. Bullying + sexual harassment (along with workplace conflict + high workloads) are causes of stress at work causes high levels of absenteeism, turnover, low productivity and morale. Major focus of maintenance is for HR managers to minimise the exposure of the business to risk by implementing a range of proactive + preventative strategies in health + safety, anti-discrimination & conflict resolution. Bullying is common in industries with high numbers of vulnerable employees such as apprentices, young staff or migrant workers. It can be minimised by: Providing information about workplace bullying cover common forms (e.g. verbal abuse). Inducting + training employees in company policy, procedures to deal with bullying and consequences of bullying. Providing training to increase cultural awareness. Promoting culture that is based on open communication, respect, fairness and trust. Having a member of staff (appointed by the staff) to handle complaints + grievances.separation Separation is the process of employees leaving voluntarily, or through dismissal or retrenchment processes. Voluntary separation may take the form of resignation, relocation, voluntary redundancy or retirement. Involuntary separation may take the form of contract expiry, retrenchment or dismissal. Involuntary separation should comply with legislation, awards & agreements. Redundancy and retrenchment refer to employees losing their jobs, where the employees job or work no longer needs to be done. It may be necessary due to a lack of work, as in the case of a fall in demand for a product or service, or the position may have been restructured or replaced by technology. Acceptable situations for redundancy include closure of the workplace site, completion of project on which employee worked, lack of contracts or orders for work, downturn in consumer demand or need to reduce staff due to financial difficulties in business. Matters in determining who is retrenched length of service, performance standard, future potential and whether some staff are willing to leave voluntarily. Managers should consult with staff prior to termination & support them with outplacement to ensure a smooth transition that does not adversely affect remaining workers morale.

DISMISSAL & UNFAIR DISMISSAL Dismissals are a form of separation where employees do not act in good faith and are removed from the business. Summary dismissal is an instant form of dismissal that applies to employees involved in gross or serious misconduct such as theft. Termination for misconduct must meet the test of being fair + reasonable, given the circumstances. FWA will generally determine whether reasons were sound & whether employer had made reasonable efforts to investigate allegations + allowed employee the right to respond to the allegations. Dismissal can be based on poor performance or redundancy due to organisational restructuring, a downturn in business or technological change making job redundant. Recently, businesses have tried to minimise costs & improve productivity through reducing staff numbers, flattening management structures & making greater use of technology widespread restructuring + managerial policies have contribute to industrial disputes. In terms of dismissing an employee due to poor performance, businesses need to: Give employees written warning about their poor performance over a period of time. Give them advice + support so they have the opportunity to improve. Notify employees of reason for termination & an opportunity to respond. In the case of redundancy, employer may be asked to show that: Employees job was no longer needed; that the redundancy is genuine. There was no appropriate work available elsewhere within the organisation. Employee consulted about alternative redeployment options in the business. Unfair dismissal occurs where an employee is dismissed by their employer and they believe the action is harsh, unreasonable or unjust. Selecting staff for dismissal can be risky + requires awareness of legislation & industrial agreements. Documentation of processes undertaken is also required to avoid claims of unfair dismissal. Fair Work AU provides these grounds for such claims for employees. Unfair dismissal occurs where an employee makes a remedy application and FWA finds that: The dismissal was harsh, unjust or unreasonable. The dismissal was not a case of genuine redundancy. The dismissal was not consistent with Small Business Fair Dismissal Code where the employee was employed by a small business. Employees are able to claim unfair dismissal if: Business has more than 15 employees [full-time or equivalent] who have been employed for more than 6 months. This includes casuals with 6 months service. Processes for dismissal have not been carried out correctly. Employer has the right to object to a claim on the basis that it is frivolous, not submitted in an appropriate time frame, not reasonably likely to succeed, not a case of unfair dismissal or that the person making the claim is not eligible. Firms can be badly hit by such claims many have found need for procedural approach frustrating, particularly the need to give employees time to improve after the warning. Many businesses have preferred to avoid risk by hiring casuals + contractors. Others have tightened employment contracts & included job descriptions, probation periods & measurable targets to allow for dismissal of staff if required. They are keen to avoid unfair dismissal claims which create bad publicity lose customers. For many, it has been regarded as cheaper and less time consuming to settle claim, regardless of whether or not it is valid. The separation process is important in HRM as not complying with legal standards can have serious financial consequences.Strategies in human resource managementleadership style The classical authoritative, autocratic (directive) approaches focuses on planning, organising and controlling. In this approach there is no role for contributions by employees in terms of making decisions, and the leadership is best used when decisions must be made quickly and when management has suffice information to solve the problem. This style is usually used in low skilled jobs where employee input is not needed. This maximises productivity for businesses. The behavioural approach is most commonly seen in a participative or democratic leadership style and sees management as leading, motivating and communicating. Participative leadership is where emphasis is placed on group consensus and in generating new idea, and is used when the knowledge and skill of staff are valued and may suggest effective ideas. Delegative leadership is where management allows employees to make decisions in some aspects. This is used when managers trust their staffs ability to make the right decisions due to their skill and knowledge. The use of this leadership style allows for employees to feel valued within the business. The contingency approach uses the most appropriate approach depending on the situation and changes in circumstances. It is evident that employees in AU do not appreciate constant supervision of their work, as occurs in an authoritarian/directive management style. AU managers use a range of styles that incorporate elements from most management styles and are more focused on achievement + performance. Most appropriate uses shown below:Leadership StyleAppropriate use for style

Directive [autocratic] - Emphasis on immediate compliance from employees.In a crisis, to kick start a turnaround or with problem employees.

Visionary [authoritative]- Emphasis on long-term vision & leadershipWhen changes require a new vision or when a clear direction is needed.

Affiliative emphasis on the creation of harmony.To build buy-in or consensus or to get input from valuable employees.

Participative [democratic] emphasis on group consensus and generating new ideas.To build buy-in or consensus or to get input from valuable employees.

Pacesetting emphasis on accomplishment of tasks to high standards.To get quick results from a highly motivated and competent team.

Coaching [developmental] emphasis on the professional growth of employees. To help an employee improve performance or to develop long-term strengths.

AU managers are different to those overseas in that they are not common users of autocratic approaches, since AU tends to have more of an egalitarian culture. job design general or specific tasks Offering an interesting job is the first step in recruiting + retaining talented staff. Job design - process of designing the content of a job and how it will interact with other jobs and employees, so as to motivate and retain an employee and achieve the businesss goals. Job design has long been dependent on job analysis which is an ongoing process which is a detailed analysis of all the tasks, responsibilities, personal attributes and reporting relationships needed in a position. Employees are more motivated & likely to share ideas if they have autonomy, have clear task identity, are well trained & feel competent, and receive feedback that allows them to be recognised and develop further. Feedback is demotivating when it is controlling, although feedback that is informative and constructive is motivating. Employees motivated when they are able to plan, schedule & determine how to do a job. Job design involves a number of steps:1. Analyse the existing work situation using observation, feedback & organisational data.2. Identify technical, managerial & administrative tasks to be performed.3. Identify needs + aspirations of employees for new positions.4. Decide how the job will fit in with the work group.5. Consult with key stakeholders + modify as required.6. Implement changes slowly, provide training, consult & use feedback to modify.7. Include procedures for review of progress.8. Assess + review progress, discuss with employees. Job design is a useful method in developing the knowledge & leadership skills of employees identified for future promotion in succession planning. The common job design methods are:

Specialisation in job design involves jobs being broken down into specialist skills areas in order to improve knowledge + skills, to increase output, to reduce errors & labour costs and to control quality. Job analysis is crucial in selecting tasks and designing such jobs. Job specialisation on its own rarely leads to greater challenges or job satisfaction, as word tends to be more repetitive & employees have little input into their work. There is less social interaction or sharing ideas with others & often no identifiable end product. Heavy specialisation is believed to reduce the ability to absorb knowledge & may even limit knowledge sharing. In a specialised approach, management assumes greater control.recruitment internal or external, general or specific skills Recruitment is the process of locating and attracting the right quantity and quality of staff to apply for employment vacancies or anticipated vacancies at the right cost. Effective recruitment + selection allow the most appropriate applicant to be selected. A diverse workforce would include employees from diverse cultural and ethnic backgrounds, who were able to demonstrate the ability to speak in more than one language, and to demonstrate cultural awareness and sensitivity in their interactions with people from other cultures. As businesses become more global in orientation, recruiting a diverse workforce at all levels is becoming more important in communicating effectively with a wide customer base & in demonstrating CSR which is highly valued by consumers + employees. Poor recruitment process leads to increased costs + lower productivity by increasing: Training costs [unqualified staff], industrial unrest, labour turnover & absenteeism rates, etc. Internal recruitment involves filling job vacancies with people from within the business. Sources include employees, former applicants + employees, and they may be invited to apply through intranet postings, word of mouth, etc. A popular source = employee referrals. External recruitment involves filling job vacancies with people from outside the business. Obtaining employees through traditional methods such as advertisements or referrals. The fastest growing recruitment methods today are via social networking sites like FB. Some firms cite online company videos as having response rates of up to 18%, far exceeding that of other recruiting strategies. This is important for firms that constantly recruit staff.

GENERAL SKILLS General skills, attitudes and behaviour allow employees to be good cultural fit for firms. Key general skills include flexibility + versatility, social confidence, positive attitude, motivation, ability to work as a team or independently, leadership and decision-making. They are important since many jobs today require individuals to work independently & undertake various tasks. General skills are now generally more service-orientated, making social + information skills increasingly important.SPECIFIC SKILLS Most businesses concerned about skill shortages & target employees with specific skills to fill in gaps within the firm. Such skills may be developed through education and training. Many businesses are recruiting overseas or using outsourcing to overcome skill gaps, particularly through skilled migration programs such as the 457 temporary programs. Employee poaching is the practise of enticing employees to work for another business.

training and development current or future skills Training aims to develop skills, knowledge and attitudes that lead to better performance. Training is critical in AU today as businesses report big labour market problems including shortage of skilled labour, mismatch between skills needed and skills available, etc. Development is focused on enhancing the skills of the employee to upgrade their skills in line with the changing and future needs of the business. Encourages employees to take advantage of opportunities to develop career with the firm. Business benefits by retaining employees skills & gaining a competitive advantage. In choosing nature of training + development, firms need to use systematic process to evaluate the needs of the business, supply of skills in economy, demand for such skills & changing nature of work + general pattern of employment. Businesses will need to consider these options in terms of training and development: Invest in further in-house training and development, recruit staff for specific skills, retain experts who retire on part-time basis, retain women through flexible work structures, share with other firms or do work for other firms (insourcing), outsource functions to specialist firms, sponsor overseas migrants for areas of major shortages and build alliances. Insourcing refers to delegating a job to someone within the business, as opposed to someone outside the business. Future jobs in AU such as robotics or genetic counselling will require future skills. The business has to make a decision when implementing a training program whether to train their employees current or future skills. By training and developing their current skills, the business can improve the quality and productivity of their activities, therefore reducing costs in long term. By preparing employees for work in the future, although being more expensive, encourages individuals to develop long term careers with the business, protecting them from skill shortages.performance management developmental or administrative Performance management is a systematic process of evaluating and managing employee performance in order to achieve the best outcomes for a business. Value of performance management includes: assess legal compliance, justify staffing decisions, identify training + development needs, provide feedback + recognition, assess performance against standards & identify opportunities for productivity improvement. The two objectives of performance management are evaluating an individuals performance and using that information to develop the individual. Performance appraisal + management systems are designed to meet 2 purposes for a business developmental and administrative. DEVELOPMENTAL: using data to develop individual skills + abilities of employees, so they improve effectiveness in roles, overcome weaknesses & are prepared for promotion. Best achieved through periodic feedback + shared discussion that is empathetic + goal focused. ADMINISTRATIVE: provides information, often following an annual appraisal, which can be used by management for planning in HR functions such as training or development. The focus is on collecting data to manage HRM function more efficiently.BENEFITS OF EFFECTIVE PERFORMANCE MANAGEMENT

Performance appraisal + performance management systems often regarded as surveillance systems and are dreaded by employees. They are more readily accepted by employees when they are designed collaboratively with key stakeholders. Effective performance management is fostered when businesses: Have clear job descriptions, match people with the right skills to the role & culture of business and set mutually agreed goals + performance standards. Provide appropriate induction, training & development so staff can experience growth. Provide effective training for those leading performance appraisal & management. Provide regular + constructive feedback so staff can improve, provide opportunities for internal promotion and provide support, mentoring or coaching to support staff. Recognise & reward employees for their achievements and use employee surveys/feedback.rewards monetary and non-monetary, individual or group, performance pay Rewards management is key strategy in attracting, motivating and retaining employees. Monetary rewards are those reflected in pay or having financial value. Non-monetary rewards are those that do not have a financial value, such as social activities or retirement planning. 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 itself. They may be monetary, for example incentive payments, or non-monetary, for example flexible work schedules. Intrinsic rewards associated with job (non-monetary) include job aspects (such as interesting work, promotion, and autonomy in job) + environment (like social activities or recognition). Extrinsic rewards (monetary/non-monetary) include direct rewards (wages, salaries, bonus plans) or indirect rewards (fringe benefits insurance, holidays, company car, etc.) Rewards are to be distinguished from benefits which are available to all members of staff. Reward systems are increasingly linked to performance management through enterprise bargaining and individual contracts. In conclusion, an effective reward system is equitable, clearly communicated, relevant, cost effective, simple to administer and aligned with the businesss goals.INDIVIDUAL OR GROUP REWARD Rewards are often related to individual performance. For group rewards, all individuals are dependent on others and efficient workplace systems to achieve high-quality performance. Increasing use of group and team-based structures have increased need for cooperation and made it difficult to distinguish individual performance. Group incentives schemes are often used to support a team-based culture. Gain-sharing plan involves the benefits of improvements ad success (such as productivity improvements, cost savings and sales or profit increases) being reflected in rewards for teams such as shares, cash bonuses or annual bonuses. Team-based reward system can result in free-riders who contribute little to the performance of the team but receives the reward nevertheless. A HR manager can assess the overall effectiveness of systems through a grid, matrix or table.Rewards ComponentReward Objectives

Base SalaryAttract and retain

Gain-Sharing PlanProductivity

Performance IncentiveRetain and individual contribution

Corporate Profit ShareAttract and company performance

SuperannuationAttract and retain

Other BenefitsRetain and employee security

Career PlanningEmployee security, productivity and retain.

Key issues to consider in designing a rewards/benefits system in terms of business include: Business strategy, economic conditions, organisational objectives of rewards, rewards of competitors, relevant awards + agreements, NES, union power and profitability of business. Key issues to consider in designing a rewards/benefits system for individual employees are: Performance related incentive plans for performance above standards or criteria, bonuses, piece rates, commissions and production-related incentives. Job related role + level of responsibility, scope of supervision, base pay, interpersonal skills, knowledge & skills, experience and value to company (e.g. links with key clients). Other individual considerations group incentives, employees values (e.g. job flexibility vs. career planning), specific job conditions and their individual bargaining power. Unclear or unfair reward systems, or where employees believe there has been favouritism, can lead to internal conflict, loss of trust + motivation and higher levels of labour turnover.PERFORMANCE PAY Performance pay is where wages and salaries are linked to the individual performance in achieving measurable goals. By using this method the business motivates employees, thus improving performance by giving the incentive that higher performing employees will be more appropriately rewarded.global costs, skills, supply There are strong factors pushing businesses to operate globally like the high cost of skilled labour in Australia and a shortage in the supply of skilled labour. Offshore skilled labour is available but not always available as required in desired locations or quantities, due to high levels of demand for lower cost labour in regions of lower wage nations. The rapid growth of global outsourcing of routine + repetitive tasks illustrates the potential for businesses to develop strategies that access lower cost labour, modern telecommuting technology and work practices, while complying with regulations & pay scales in overseas. China, India and the Philippines [with less stringent regulations] are popular for outsourcing. In addition to labour costs, issues like business risk, infrastructure, language skills are important influences on the choice of location for offshoring + outsourcing. A business planning to expand overseas needs to consider whether it wishes to use a: A polycentric staffing approach uses host-country staffing with parent-country staff in corporate management at its headquarters. Although, this helps the company access good market knowledge, is often cost efficient, and satisfies local pressure for employment opportunities, it may limit management experience for host-country staff. A geocentric staffing approach uses the staff with the most appropriate skillset for a particular role and location, and builds a pool of managers with global experience. This can be a complex and expensive policy, however, due to local employment regulations, relocation and retraining costs. An ethnocentric approach uses parent-country staff in its business. This may limit its ability to interact with customers and learn from overseas markets. If a business is seeking to operate using a lower cost structure, training in quality standards and performance management will need to be updated. Compliance with overseas labour market regulations is critical to avoid issues with local governments and disruptions to the business. workplace disputes resolution negotiation, mediation, grievance procedures, involvement of courts and tribunals Disputes are conflicts, disagreements or dissatisfaction between individuals and/or groups. Disputes may be informal, formal, overt (e.g. lockout) or covert (e.g. absenteeism) and can be costly to businesses at time of the dispute but also its reputation + employees. Covert disputes are conflicts that are only recognised by the business itself. Employers + HR managers need to be aware of & respond to workplace conflicts as they can progress to legal actions such as formal (and overt) claims of harassment or bullying. Workplace conflicts also lead to other problems such as higher levels of absenteeism, low productivity, legal claims and high staff turnover, which may be even more costly in long run. 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 refer to situations in which workers withdraw their labour. They are most overt form of industrial action and aim to attract publicity and support for the employees case. Strike action is more common in public sector and in the mining sector. Lockouts occur when employers close the entrance to a workplace and refuse admission to the workers. In some lockouts, management attempt to avoid a picket line of workers. Pickets are protests that take place outside the workplace (associated with strike). Unionists stop the delivery of goods and try to stop the entry of non-union labour into the workplace. Legal claims for matters such as discrimination or bullying are not included in these disputes. The major causes of disputes recognised by the ABS are disputes relating to negotiation of awards and enterprise agreements. These issues typically include disputes about: Remuneration (e.g. wage), employment conditions & job security issues (e.g. retrenchment). Matters outside agreements also cause disputes, for example: Health + safety, managerial policy (a common cause), union issues & political/social protests.RESOLUTION OF DISPUTES The key stakeholders involved in resolving disputes including employees, employers, governments, trade unions, employer associations, courts and industrial tribunals. Other stakeholders are the Human Rights Commission (federal) - [monitors + reviews how legislation to human rights is implemented. It can investigate and conciliate complaints about discrimination in employment opportunities or persons treatment in workplace. Refers complaints of sex discrimination in awards + agreements for determination to Federal Court] - and Anti-discrimination boards (state) - [work closely with Human Rights + Equal Opportunity Commission to ensure disputes about discrimination are resolved through provision of information, investigation and conciliation. Can refer cases to Administrative Review Tribunal for determination]. Each stakeholder must attempt to bargain in good faith which means the parties meet regularly with a willingness to reach an agreement. Dispute resolution in AU has been heavily influenced by government philosophies + evolving policies on industrial relations. The Liberal Party = more supportive of free market principles while AU Labor Party policies = more representative of political base - the trade unions. Negotiation is a method of resolving disputes when discussions between the parties result in a compromise and a formal or informal agreement. This process can benefit involved parties by increasing their knowledge of company policy, businesss objectives, workers concerns and issues involved in implementing change. Most AU disputes are resolved by negotiation without the intervention of a third party. In such cases, employees return to work following industrial action for pre-determined period. Mediation is the confidential discussion of issues in a non-threatening environment, in the presence of a neutral, objective third party. The third party may be independent and agreed on by key parties in dispute, or representative from business, tribunal or government agency such as Fair Work Australia. As an alternative dispute resolution technique, it is increasingly popular in Australia since it allows parties to become empowered by resolving their own disputes and reduces risk of disputes escalating or 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. Most businesses have established formal process (now required in modern awards + other agreements) by which issues and complaints can be handled. Effective grievance procedures require full description of complaint to be made by employee with the complaint. The person the grievance is made against should be given details of allegation + an opportunity to provide their views. The process may deal with individual or collective issues, and matters such as changes being implemented in the workplace that will affect or cause conflict between staff. It is a useful strategy for resolving issues before they escalate.INVOLVEMENT OF COURTS AND TRIBUNALS Industrial disputes that escalate to level of courts + tribunals are most likely to occur when they have passed nominal expiry date or negotiations have failed. When dispute has not been resolved through negotiation at workplace, it may be referred to Fair Work AU who will appoint a conciliation member to hear both sides. Conciliation is a process where a third party is involved in helping two other parties reach an agreement. The conciliation member may require all parties to continue negotiations on some aspects, reduce the influence of the dispute, or develop other strategies to resolve the dispute. If conciliation fails, the matter may be referred to arbitration. Arbitration is the process where a third party hears both sides of a dispute and makes a legally binding decision to resolve the dispute. A member or panel of members hears both sides of the dispute in a more formal, court-like setting. A judgement, like an order, is handed down based on merits of evidence that becomes legally binding on all parties. Orders may end restrictive work practice or behaviour or require secret ballot of union members if strike action is proposed. Fair Work AU can order that staff be reinstated or that parties return to tribunal later for further negotiations. Orders are decisions that require employees or employers to carry out a direction from the tribunal. They may be inserted in awards of agreements. Common law action is open to any party involved in or affected by industrial action. Parties may make direct claims for damages caused by the parties taking the action, or for breach of contract resulting from such action. Employer may ask state Supreme Court or Federal Court for stop order to prevent unlawful interference with the employers trade of business. But, action is costly + generally considered last resort. Common law in civil courts available to those on individual common law contracts of employment disputing matters not covered by legislation or award.BENEFITS AND COSTS OF WORKPLACE DISPUTES

Effectiveness of human resource managementindicators corporate culturebenchmarking key variableschanges in staff turnoverabsenteeismaccidentslevels of disputationworker satisfaction Indicators are performance measures that are used to evaluate organisational or individual effectiveness. Benchmarking is a process in which indicators are used to compare business performance between internal sections of a business or between businesses. This is then used as a basis for improvement. Indicators gathered + collated in HR audits. A human resource audit is a diagnostic tool used to evaluate HR policies and practices in order to identify problems and develop solutions in attempt to rectify problems. The most commonly used key performance indicators benchmarked for the effectiveness of HRM include financial indicators for each member of staff (sales per employee), labour productivity (output per employee) and the syllabus indicators. For indicators to be of value, results must be communicated and acted upon by management in improvement plans.CORPORATE CULTURE A corporate culture refers to the values, ideas, expectations and beliefs shared by members of the business. Effective workplace culture is derived from the quality of a businesss communications systems and participation of employees in decision making. Businesses experience success, through a positive workplace culture, as shown in indicators like lower staff turnover, better customer service, low levels of absenteeism + disputes, etc. Strategies for business culture include building trust and those that value employees ideas. BENCHMARKING KEY VARIABLES Benchmarking is the comparing of the business performance (in terms of HRM, the effectiveness of recruiting, training and productivity) with set standards. The purpose of benchmarking is to compare a businesss performance in specific areas against other similar businesses or divisions, or against best practice businesses. The aim is then to initiate changes to foster improvement. Methods of benchmarking are: Informal benchmarking includes any strategies such as networking through informal discussions with colleagues in other businesses, undertaking visits to 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 other best practice businesses in specific areas using a structured process to gain skills and knowledge and to modify organisational processes. Balanced scorecard benchmarking is used for measuring whether the activities of a business are meeting its objectives established in the strategic plan. It benchmarks key performance variables with targets aligned with the strategic plan. The approach used for benchmarking needs to be chosen for its suitability to the businesss needs + resources as it can be a very costly & time-consuming process. Benchmarking may focus excessively on costs rather than long-term performance of HR. HR AUDITS can be used to systematically analyse and evaluate HR activities and their effectiveness. This audit can be performed in a number of ways: Performance of divisions against another is benchmarked then compared to industry to determine areas of weakness + for improvement. An outside consultant conducts research to analyse problems + suggest solutions. Legal compliance analysis undertaken to determine areas of variance form laws + company policies. Also, evaluation of key performance variables by management. Management by objectives (MBO) approach used to determine areas of poor performance. QUANTITATIVE MEASURES should be able to demonstrate the actual effect of indicators in terms of costs & profits. Key variables often include: Variances in labour budgets (significant increase in labour budget costs indicate inefficiency). Time lost/costs of injuries or sickness (rising costs indicate health + safety issues). Percentage of goals achieved and levels of labour turnover. E.g. of Key HR benchmarks return on human investment ratio, total separation rate, etc. QUALITATIVE EVALUATION involves detailed feedback + research on key issues, which allows judgments to be made about changes in behaviour or quality of service provided. Sources of info are management feedback, surveys & focus groups about workplace culture. Major variables that are benchmarked for continuous improvement include: Increasing absenteeism + labour turnover rates, analysis of industrial disputes + issues raised provides useful feedback, feedback from performance appraisals and stakeholders. CHANGES IN STAFF TURNOVER Staff turnover refers to the separation of employees from an employer, both voluntary and involuntary, through dismissal or retrenchment. [often shown as a % of total staff numbers] Staff turnover in AU averages around 12-15% annually (fluctuates with business cycle) with around half being voluntary turnover due to resignation + retirement. In assessing significance of turnover, it is important for firms to benchmark their turnover against that of others in industry and to determine type of staff leaving + their reasons. A common issue, which results in high staff turnovers, is a poor business culture caused by ineffective HR strategies such as job design, rewards management, and training. However, staff may leave to seek new opportunities or promotion as result of skills developed in a particular industry may not be negative reflection on current workplace. Costs of high labour turnover are great as they involve high costs through payouts for entitlements, hiring, inducting & training new staff. Productivity + service quality, corporate skills & knowledge are lost, particularly if there has been poor succession planning.ABSENTEEISM Absenteeism refers to employee absences, on an average day, without sick leave or leave approved in advance. High levels of absenteeism may indicate worker dissatisfaction or conflict within workplace. In terms of lost revenue, such unofficial expressions of conflict may be even more costly to firms than official + overt forms of conflict. Firms need to have much higher staffing levels to cope with high absentee levels. Thus, revenue is lost from disrupted work = leads to lower productivity + higher labour costs.ACCIDENTS Around 5.3% of AUs 12mil employees experience work-related injury or illness each year. According to Safe Work AU, in 2010 there was 132 000 workers compensation claims for serious work-related injuries or illnesses involving 1 week or more off work, a permanent incapacity or fatality. Equates to a rate of 14.1 claims of serious injury per 1000 employees. Most common types of workplace fatalities are associated with road crashes, particularly for tradesmen + transport workers while injuries are associated with lifting, pushing and pulling objects or being hit by objects. Total cost of work-related injuries and death in AU is more than $60 billion per year in direct and indirect costs. OH&S indicators are benchmarked internationally using various indicators such as: Lost Time Injury Frequency Rates (LTIFRs). A lost-time injury is an event that results in a fatality, permanent disability or time of one day/shift or more lost from work.

Safe Work AU rates based on accepted workers compensation claims that involved the loss of 1 or more working weeks (termed serious claims). To minimise accidents, firms can implement best business practices like: Regular safety audits + comprehensive safety programs and use data to improve, build a culture of safety (using visible policy statements, safety signs and reminders) and provide careful induction + regular ongoing training for staff to ensure they are aware of safety rules. LEVELS OF DISPUTATION The levels of disputation in a workplace indicate the strength of relationships between the workplace and their employees. A high level can attract media attention or move through the legal system, affecting the firms reputation and overall profits. Although strikes + lockouts are officially recorded indicators of industrial disputation, there