introduction to human resource...

Topic 1: Introduction to human resource management

1 © NSW DET 2008

Introduction to human resource management

Reading


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Contents

Introduction 5

What is management? 6

Planning 6

Organising 6

Leading 7

Controlling 7

What is human resource management? 8

HR management activities 9

Workforce planning and design 10

Staffing 10

Remuneration and benefits 10

HR administration 11

Employee relations 11

Organisational development 11

Employee support services 12

Benefits of effective HR service provision 13

HR service providers 15

Line managers 15

Centralised HR function 16

Decentralised HR function 17

Contract specialists 17

Strategic HR management 18

Levels of HR management 18

Growing need for strategic HR management 19

HR management and industrial relations 22

Australia’s industrial/employee relations framework 22

Stages in the development of Australian industrial/employee relations 23

Parties in the Australian industrial/employee relations system 25


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The bargaining framework in Australia 26

What legislation impacts on industrial/employee relations? 26

Types of employment relationships 27

Occupational Health and Safety 29

OHS legislation 29

HRM and OHS management 30

Workers’ compensation and rehabilitation 31

HR information systems 33

HR contingency planning 35

Labour turnover 36

Costs of labour turnover 36

Measuring labour turnover 37

Performance management systems 39

What is performance management? 39

Performance management goals 41

Performance management process 42

The performance appraisal process 44

Training and development 47

Implementing training programs 48

Implementing development programs 49

Appendix 1: The development of human resource management 51

The welfare and administration stage (1900 to 1940s) 51

The welfare and administration, staffing and training stage (1940s to mid-1970s) 52

Human resource management (mid 1970s to 1990s) 52

Human resource management in the new millennium 53

Appendix 2: Co-ordinating workers’ compensation and rehabilitation claims 54

The history of workers’ compensation and injury management in NSW 55

The employer’s legal responsibilities and role when a worker is injured 56

Reporting procedures and injury recording documentation 57

Common law and duty of care 60


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The workers’ compensation claims process 61

Injury management 63

Return to work programs 68

Dispute resolution 73

Prevention and workers’ compensation 75


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Introduction

The essential function of an organisation‘s Human Resources department is

to support the business objectives of the organisation by ensuring the

availability of appropriately skilled workers to meet the current and future

demands of the business. It does this through the following key functional

areas:

Workforce planning and design

Recruitment, selection and induction

Industrial/employee relations

Learning and development

Remuneration, recognition and reward

Occupational health and safety and injury management

Performance management

Human resource information systems and administration

Strategy and policy development

The reading notes that follow will introduce you to key HR functions.

If you are new to HR, or hoping to move into HR in the future, this

information will give you some background to what functions comprise HR,

their purpose and how they operate.

If you have had some experience working in the HR field, these may already

be familiar to you so take the opportunity to revisit and reflect as they

provide a context for the rest of the elements. They will also possibly

provide additional information and/or alternative approaches to what you

may be used to.


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What is management?

All managers – human

resource managers

included – need to be

competent in the four

essential management

functions:

planning

organising

leading

controlling.

As you‘ll see, human resources managers carry out these basic functions in

a particular and specialised way.

They also need to carry out specific HR management functions. These

functions relate to the key role they play in managing employee relations

and include: acquiring, developing, maintaining and terminating staff.

Planning Planning is the process of establishing objectives and deciding the necessary

steps to achieve those objectives. It asks: What needs to be done? What

results are expected? What is the timeframe for achievement? Who is

involved?

Human resources management involves planning for activities such as:

recruitment, training, career planning, succession and replacement.

Organising Once plans have been established, it is a manager‘s job to identify and

allocate resources so that goals can be achieved. This means determining

how the tasks are to be grouped, how they are to be completed and who is to

do the tasks and make the decisions. Work and adequate resources need to

be allocated, and people aligned in their efforts so that goals can be

achieved.


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HR practitioners demonstrate organising skills in many ways—for example,

when they design jobs that will enable the organisation to achieve its goals

and when they are involved in job analysis and in writing job descriptions.

Leading Managers also need to provide direction and guidance. As the strategic

value of human resources management gains recognition, HR managers are

increasingly becoming key members of senior management teams reporting

directly to the CEO. This recognises the contribution HR management can

make to the long-term planning and allocation of resources to ensure

organisational success. Many line managers and supervisors only have

expertise in their own specialist field e.g. production, sales, finance etc. In

many situations it is therefore incumbent upon the HR manager to take a

leadership role to broaden the decision making perspective by

demonstrating the HR management implications and potential contributions.

In addition to this organisational leadership role, human resources managers

are often required to lead sizeable HR departments, comprising both

generalist and specialist HR practitioners.

Controlling Control is the management function that ensures the organisation is kept on

track. It occurs after: goals have been set; plans put in place; decisions

made about when, who, and how the work will be done; and people trained

to do the tasks. Managers need to monitor progress towards goals, compare

actual performance against targets, and adjust or correct these when

necessary.

Establishing performance standards and measuring progress against goals is

an example of the control function. Deviations from the expected standards

may be corrected through training and development interventions. HR

managers are usually responsible for the design, implementation and

administration of appraisal and training/development systems.


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What is human resource management?

―The term Human Resource Management became popular in the 1980‘s and

signified a move away from Personnel Management. This move denoted

not only a name change, but a move away from an emphasis on operational

and functional activities, such as induction and training, to a strategic focus

where HR plans, objectives and strategies are aligned to business plans.‖

Dessler, Human Resource Management, 2004, p 11

Human Resource

Management (HRM) is

concerned with the ‗people‘

in an organisation. Every

organisation is made up of

people and relies on the

service, skills and motivation

of employees to achieve high

levels of performance. This

point recognises that whilst

employees may have the

required skills to perform

their job role, they may not fully contribute these unless their own needs are

recognised and adequately addressed.

Employees‘ development and commitment to the organisation, fostered

through positive employer-employee relationships, are essential to achieving

the organisation‘s strategic and operational goals. Ultimately, an effective

HRM seeks to create an environment of competitive advantage for an

organisation whilst meeting stakeholder needs.

The basic HRM functions include:

planning how many employees the organisation needs

deciding what type of skills the organisation needs

hiring appropriately skilled people

assessing, motivating and rewarding employee performance

organising and managing the human resource activities and

relationships.

The human resources manager and the functional and/or line managers in an

organisation are responsible for influencing and implementing pro-active


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and integrated practices to maximise the activities and effectiveness of

people.

HRM in Australia emerged in the mid to late 1970s in response to

organisational pressures to develop employees‘ skills and knowledge to

meet an ever-increasing competitive marketplace, both domestic and

international.

Previously, Personnel Management administered personnel activities such

as hiring and firing, handling labour negotiations, determining proper

compensation and administering benefits. However, the regulatory

landscape led to an increased awareness of the impact that people have on

organisational performance and the need to fully integrate personnel

planning into the overall organisational planning system.

More information…

For more historical perspective read Appendix 1: The development of

human resource management.

HR management activities In order to fulfil their managerial functions, both general and specialised,

the HR manager needs to be involved in many diverse activities.

We can classify these diverse HR management activities under seven main

areas or domains:

workforce planning and design

staffing

remuneration and benefits

HR administration

organisational development

employee relations

employee support services.

Though the specific terms used for classifying the main areas of HR may

vary, the structure of HR departments in many organisations reflects these

main HR activity groupings.

If there is only one dedicated HR professional, as in many small

organisations, this person may be involved in all of these activities to some

degree.


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Workforce planning and design Workforce design and planning involves the definition and arrangement of

work tasks based on the interaction of people, technology, and the tasks to

be performed.

This requires HR professionals to engage in activities such as:

HR planning

job analysis

organisational restructuring

job design

design and operation of information systems.

Staffing Staffing provides the organisation with qualified staff to meet the needs of

line management, and supports their efforts to achieve organisational

objectives.

It involves the flow of people into, through and out of the organisation.

Among the activities relevant to staffing are:

job analysis

recruitment and selection

orientation (induction) of new employees

promotion

outplacement

termination—in keeping with relevant legislation.

Remuneration and benefits This area of HR management assists the organisation to attract and retain the

employees it requires.

It involves any type of reward or benefit that may be available to employees,

such as:

job analysis

job evaluation

remuneration systems design

merit payments

profit sharing


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leave entitlements.

HR administration This area of HR has a significant impact on the satisfaction of employees on

a weekly or fortnightly basis, and is concerned mainly with:

job analysis

processing and payment of wages and salaries

calculation and notification of leave entitlements

personnel records, reports, and information systems.

Employee relations Employee relations experts assist line managers in optimising the

achievement of organisational objectives through a consistent and cohesive

approach to the following activities:

job analysis

award interpretation

collective bargaining

workplace agreements

dispute or complaint resolution

disciplinary action.

The activities may also include the many compliance requirements facing

organisations, such as:

occupational health and safety (OHS)

equal employment opportunity (EEO).

Organisational development This area of HR management is concerned with maintaining and improving

employee capability based on organisational and individual needs.

Activities or programs may include:

job analysis

training for managerial and non-managerial staff

career planning and development

succession planning

employee opinion and attitude surveys


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performance appraisal systems

assessment centres.

Employee support services HR practitioners in this area are involved in:

job analysis

employee communication and information services

employee assistance and counselling programs

child care services

emergency assistance

medical services

leisure activities.


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Benefits of effective HR service provision

Key point

It is important to recognise the contribution that good HR

management makes to an organisation, both in terms of employee

relations as well as organisational strategy.

The benefits of effective HR service delivery may be direct or indirect.

Direct benefits Indirect benefits

increased employee

satisfaction; higher morale

levels

increased retention of

employees; decreased

employee attrition rates

decreased absenteeism

multi-skilling of employees

fewer workplace conflicts

and disputes

increased productivity

fewer workplace accidents

and injuries

increased customer service

skills of employees

enhanced public image of the

organisation

skilled managers

clearly identified and

developed future leaders

lower labour costs

lower insurance premiums

higher levels of customer

satisfaction, greater return

rate of customers, and higher

spend rates

lower direct marketing and

advertising costs

attraction of high calibre job

candidates

increased profitability

increased return to

shareholders

potential increase in research

and development spending to

facilitate business expansion

increased competitive

advantage


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The extent to which HR can positively impact on business performance

depends on many factors, including the degree to which HR professionals

are willing and able to think and act strategically as well as operationally

and functionally. The attitudes of senior managers towards HR

management and their perceptions of the contributions that HR management

can make to overall business success are also very important.

More information…

If you would like to read more about the benefits of HR management, refer

to either of the textbooks below or those on the recommended texts list:

Banister, R & J Harding (2004) Human Resource Management: An

Introduction to the Australian Workplace, {Pearson Education

Australia Ltd, Frenchs Forest NSW

Seward, J & T Dein (2005) Australian Human Resource

Management, McGraw-Hill, Sydney.


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HR service providers

Key point

The effective provision of HR services depends primarily on the

skills and knowledge of HR practitioners, and the ways in which

HR service delivery is structured.

HR service delivery may be structured to include HR service providers who

are line managers, HR specialists and HR generalists who are either internal

or external providers—or a combination of all of these. The options

available for HR structures and the correct choice within each organisation

will be based on the strategies, structures, culture, size and politics of the

particular organisation.

The people who are primarily responsible for HR service provision differ

from organisation to organisation. Examples are:

Responsibility lies mostly with the line managers—either acting

alone or with centralised HR support.

The structure is a centralised one and consists of generalists or

specialists.

The structure is a decentralised one—consisting of generalists or

specialists.

The structure consists of centralised specialists and decentralised

day-to-day activities.

Responsibility lies mostly with contract specialists.

Line managers

As sole providers of HR services

Before the emergence of HR professionals, line managers assumed most of

the responsibility for functional and operational HR activities—activities

such as recruitment, selection, keeping of personnel records, technical

training, etc. As organisations and the management of people within them

become more complex, there is a need for a HRM professional to coordinate


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such activities, and for specialists to provide a strategic approach to HR

management.

Many line managers are already stretched undertaking their own line

responsibilities and often see HR management responsibilities as interfering

with their ability to provide their expertise in their own specialist field. This

often results in them not giving the necessary attention to their HR

management responsibilities. The result can be inappropriate employment,

underperformance, and disgruntled employees who may be difficult to

remove from the organisation.

With centralised HR support

This option is more common in smaller organisations with few HR

practitioners than in bigger organisations. Line managers essentially

perform all HR functions but have ongoing support from small, centralised

HR sections or single HR managers. This ensures the organisation keeps

abreast of changes in legislative requirements and there is centralised

control and accountability.

Centralised HR function

Generalists

All HR practitioners are grouped together at the head office level,

conducting, or advising on, all HR activities (eg, recruitment, training,

salary and payroll, leave, etc). The disadvantage of this option is that it is

detached from local or regional issues. It‘s also a case of inappropriate

acquisition of line manager functions.

Specialists

This structure differs from the preceding situation in that HR practitioners

specialise in particular activities (eg, a training section, a recruitment

section, or a separate payroll section). This structure is usually found only

in large organisations, and runs a number of risk: the development of

competitive HR ‗empires‘; a lack of integration of the specific HR

functions; and isolation from line management concerns. It can also be a

very costly option.


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Decentralised HR function

Generalists or specialists acting alone

This structure involves decentralising HR staff (both generalists and

specialist) to organisational business units or divisions to advise, administer

or conduct training and recruitment activities.

Generalists with centralised specialist support

This is the current trend in HR structures, especially in larger organisations,

as generalist HR staff are moved into the operating divisions. The generalist

HR staff are supported by head office specialists who largely take

responsibility for policy formulation and high-level decision-making.

Contract specialists Some organisations have begun to hire specialist consultants to carry out

some of their HR activities (eg, recruitment, training, and payroll). This can

have quality and economic advantages, but can also cause problems if the

consultant is not familiar with organisational culture, practices and

expectations.

Regardless of who provides HR services to an organisation, it is generally

accepted that effective providers, with the possible exception of technical

specialists, need to have spent a significant amount of time in line

management positions. This ensures they are familiar with the business

operations, and can relate to and have credibility with line managers.


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Strategic HR management

Levels of HR management What are the key responsibilities of HR management?

Key point

HR managers and practitioners need to make sure that the people

they employ can do the work the organisation needs done—and

that there are sufficient staff to get the work done.

In other words, there needs to be enough staff with the right skills in the

right jobs. Employing staff should also be cost-efficient. The skills should

be those that will enable the organisation to meet not only the organisation‘s

present needs but also its future needs—therefore, HR management should

know exactly where the organisation is headed in years to come, and also

what the external and internal labour markets will be like. The questions

HR management should research are: Will our organisation be able to match

future labour demand and supply? What strategies can we implement to

ensure this occurs?

To fulfil this responsibility, HR services need to be delivered at three

distinct levels:

strategic—focussing on high-level corporate and human resource

planning

operational—mainly concerned with action planning to meet present

labour needs

functional—involving transactional activities and processes designed to

ensure human resources are well-managed on a day-to-day basis.

In some organisations, a HR practitioner may be engaged in providing

services at mainly one level. For example, an HR clerical officer processing

leave applications and answering general personnel enquiries would

probably operate at the functional level. An organisation‘s senior HR

manager would operate mainly at the strategic level, ensuring that HR plans

were supportive of organisational goals. A learning and development

manager might operate at two levels:


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strategic level—to ensure training and development strategies equip

employees to meet future demands

operational level—to develop specific and relevant training

programs to meet current training needs.

Growing need for strategic HR management

Key point

In recent years, there has been a growing need for HR managers

to take a broader role in creating and executing the overall

organisational strategy and sustaining the organisation‘s

competitive advantage.

This strategic role requires HR professionals, particularly those who are in

management positions (or who aspire to be in these positions), to:

respond to a highly competitive workplace and global business

structures

be aware of and contribute to business strategic plans

work closely with line managers to develop and implement HR plans

focus on quality, customer service, productivity, employee involvement,

teamwork and workforce flexibility.

Strategic HR management requires HR practitioners to focus not only on

traditional HR activities, such as staffing and compensation, but on

outcomes.

It has been suggested that an effective HR department should not be defined

by what it does but by what it delivers. In other words, are the people it

deals with (eg, clients, investors, and employees) satisfied with the service

they receive?

The role of HR in improving business outcomes

Effective human resources management involves matching employee and

organisational needs, through the planning and provision of services that

focus on the achievement of business objectives. Desirable business

outcomes may include:

profitability

long-term economic viability


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business expansion

customer loyalty

employee satisfaction.

The future of HR management lies in its ability to assist the organisation in

improving business outcomes. It can do this in a number of ways,

including:

developing HR strategy aligned with business strategy

satisfying stakeholders

developing a supportive culture

developing an integrated and consistent approach to the management of

the organisation‘s human resources.

HR strategy aligned with business strategy

Strategic HR management requires the development of HR strategies that

are aligned with the overall business strategy. This can be done in two

ways:

1. HR managers are involved in the formulation of the organisation‘s

business strategy.

2. HR managers develop HR plans based on identified business needs.

Development of a supportive culture

HR can also assist in improving business outcomes by contributing to a

supportive organisational culture. Organisational culture includes the

common values, attitudes and behaviours that people within the organisation

share, and partly determines ‗the way we do things around here‘.

It is desirable for business success to foster a culture that is supportive of

and consistent with organisational vision and values, and goals and

objectives. Human resource policies and practices can play a key role in

signalling and encouraging behaviours that reflect certain values. For

example, the ways in which vacant positions are advertised may give strong

indications about an organisation‘s culture. Similarly, the ways in which

HR treats job applicants can tell much about acceptable behaviours within

the organisation.

If HR staff develop job advertisements that clearly state or infer particular

organisational values, and then demonstrate those values in the way they

relate to prospective employees, a powerful and consistent message is

communicated.

For example, an organisation may openly state in its vision and values that it

seeks to provide high levels of service to its customers, and advertise for

staff who enjoy working with customers and have excellent customer

service skills.


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HR staff who deal with job applicants by being polite, friendly, helpful, and

enthusiastic are demonstrating behaviours consistent with the organisation‘s

values and are contributing to the development of a supportive culture.

Thus, effective human resource management can contribute towards the

formation and maintenance of a supportive culture. Where cultures are not

supportive of an organisation‘s strategy, cultural change programs often

designed and facilitated by HR teams may be implemented to try to close

the gap between the existing and desired cultures.

An integrated approach to HR management

In order to contribute most effectively to an organisation‘s success, an

integrated, aligned and complementary approach between the various

components of the human resource management function is required. If

employees are selected, trained, evaluated and rewarded according to

similar criteria, then reinforcement and alignment of effort occurs and

productivity and morale are positively affected.

However, in organisations demonstrating ineffective HR practices, it is not

uncommon for employees to be selected according to one set of criteria,

trained according to others, and rewarded for demonstrating behaviours

seemingly unrelated to those criteria for which they have been selected and

trained. For example, a local bank may recruit its customer service officers

on the basis of their strong interpersonal skills. The bank‘s training

department also focuses on interpersonal skill development, but the line

manager rewards staff on the basis of their product knowledge.

For organisational strategy to be implemented and business objectives to be

achieved, there should be consistency and alignment between recruitment

and selection criteria, induction, training, appraisal, and rewards so that they

consistently influence behaviour.


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HR management and industrial relations

There are various

opinions about the

relationship between

human resource

management and

industrial relations.

Some suggest that

industrial relations

systems and their

traditions interfere with

or even prevent human

resource management

theories being used. Others consider that the management of human

resources incorporates the management of the industrial (or employee)

relations systems and practices.

Many Australian organisations realise that if they manage their employees

in ways that satisfy both organisational goals and employee needs, there is

little or no need to negotiate with industry unions.

National, industry and workplace contexts affect the ways that HRM and

Industrial Relations operate. In Australia, unions may be fully included in

formalising enterprise agreements or they may oppose the implementation

of HRM programs. HRM models, therefore, need to be flexible to

accommodate differing organisational needs and environments.

Australia’s industrial/employee relations framework Words and concepts can be confusing. Historically, Australia has used the

term ‗Industrial Relations‘ while Americans use ‗Labour Relations‘ and the

Rudd Labor Government‘s Federal legislation refers to ‗Workplace

Relations‘.


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What is industrial relations?

Industrial relations concerned with how individuals, groups, and

organisations determine the employment relationship between employers

and employees.

Industrial relations includes:

the interests and goals of the different parties

the degree of conflict between those interests

the power resources available to the parties as they pursue those

goals and interests.

In Australia for most of the last century these issues were undertaken at

industry rather than individual employee or even workplace level. They

were typically carried out between Unions, Employer Associations and

Government. However in the 1990‘s there was a change of focus from

industry-wide to a more ‗enterprise-based‘ approach. This was to enable the

different circumstances of businesses within an industry to be taken into

account when negotiating workplace conditions of employment. It also

aimed to give individual employees a greater say in these matters. In

addition it aimed to breakdown the concepts of one person one job and job

demarcation as well as enabling employee multi-skilling to become

acceptable workplace practice.

This change in focus, also lead to the rise and introduction of the notion of

Employee Relations within Australian organisations.

What is employee relations?

Industrial relations is primarily focused on negotiating conditions of

employment and resolving conflict between the parties at a high level

industry basis, whereas employee relations refers to a more consultative,

strategic management approach.

Employee relations is the practice of managing the employment relationship

within the context of employment law (i.e. all aspects of the common law

and statute law affecting this relationship).

Stages in the development of Australian industrial/employee relations

The first hundred years of European settlement – capitalism

introduced which saw craft guilds emerge between 1830 and 1850.

By the 1880s there were 200 unions. In response, employer

organisations began forming in the 1870s.

Unrest, economic depression and Federation 1890-1900 – strikes by

shearers, miners and maritime workers caused the protagonist to

look for a third party to intervene as a means of dispute settlement.

Emergence of ‗determinations‘ in Victoria an adversary-based


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system of conciliation (the negotiated settlement of disputes) and

arbitration (official enforcement by tribunal orders and directions) in

NSW and WA.

Federation‘s first fifty years (1901-1950) – a constitutional

amendment gave Federal Parliament power over aspects of

conciliation and arbitration - Section 51(xxxv).

The Conciliation and Arbitration Act was passed in 1904. In 1905,

the Court of Conciliation and Arbitration (now the Australian

Industrial Relations Commission – AIRC) started its work.

In 1927, the Australian Council of Trade Unions (ACTU) was

formed. ‗Closed shops‘, where union membership was compulsory,

and ‗preference‘ for unionists emerged. Employer associations also

grew.

Pressures for change 1951-1983 - a time of prosperity, ‗baby-

boomers‘ and industrial conflict. A separate industrial court was

established to interpret and enforce awards. In 1951, the AIRC took

on the new role of ratifying agreements instead of settling disputes.

From mid 1970s, the economy was sluggish and HRM was not

common or important. The centralised award based system of wage

fixation had problems.

The Hawke-Keating years 1983-1996 – wage Accords were

introduced. There ‗were a series of agreements between the ALP

government and the ACTU. Award restructuring commenced in

1987, with wage increases based on improved work practices in such

areas as multi-skilling, attendance-time flexibility and methods of

wage payment.

In 1993, amendments to the Industrial Relations Act allowed

employees to appeal against dismissals that were ‗harsh, unjust or

unreasonable‘.

The Howard Years 1996 – 2007 – the new Howard government

passed the Workplace Relations Act in 1996 which:

restricted union activity

weakened the role of AIRC in wage setting and dispute

resolution

promoted individual versus collective agreements

decentralised to workplace/enterprise level

changed aspects of the right to strike.

WorkChoices was introduced in May 2005. It was seen as the most

significant change to Australia‘s industrial/employee relations

landscape since 1904. WorkChoices was increasingly seen as unfair

and was a key issue in the defeat of the Howard coalition

government in the November 2007 federal election

The Rudd Labor Government 2007 to the present - elected on the

basis of restoring ―Your rights to work‖ and outlawing Australian

Workplace Agreements (individual contracts). However this much


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lauded change to Australian industrial relations practices will not be

implemented until 1 January 2010, with Australian Workplace

Agreements (AWAs) not outlawed until 2012. In the meantime a

new Workplace Relations Amendment (Transition to Forward with

Fairness) Bill 2008 has been introduced to mark the beginning of a

smooth evolution to the new Federal system.

This new bill prohibits new AWAs being ratified; establishes interim

Transition Employment Agreements; introduces a new no-

disadvantage test; extends the fixed term of notional agreements

preserving State awards; and empowers the AIRC to conduct a

process of award modernisation.

Parties in the Australian industrial/employee relations system There are three major parties that have been involved in developing the

Australian industrial/employee relations system. They are:

employees and their trade unions1

employers and their associations2

government.

Trade unions

Trade unions have played an important part in Australia‘s industrial

relations history. A modern definition by the Australian Bureau of Statistics

states that a trade union is:

"an organisation consisting predominantly of employees, the

principal activities of which include the negotiation of rates of pay

and conditions of employment for its members."

(http://en.wikipedia.org/wiki/Trade_union, viewed 20 October 2008)

Trade unions have traditionally operated on the principle of collective

bargaining, promoting this is necessary to ensure balance of bargaining

power between employers and employees.

Unions increasingly face the need to justify their relevance in the current

Australian industrial/employee relations environment.

Employers

Employer associations began to form in the mid nineteenth century in

response to tariff protection, and more formally in 1902 in response to the

setting up of wage boards.

1 Employees may negotiate directly with the employer and not use a trade union

2 Employers may negotiate directly with an employee or trade union and not be represented

by an employer association

http://en.wikipedia.org/wiki/Trade_union


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Examples of employer associations include:

the Business Council of Australia (established 1983)

the Australian Chamber of Commerce and Industry (ACCI).

Every employer association has a slightly different focus for its members

but most provide industrial services including award

advice/interpretation/representation and information, as well as other

services that promote/lobby on behalf of the industry or employers.

Government

At both state and federal levels, governments play a large role in employee

relations. It is often confusing and difficult as there are seven different

systems in Australia, each with their own law and tribunal. Only the

Victorian government, which took the lead and surrendered various powers

to the Commonwealth in 1997, has moved towards a national system.

Governments contribute to industrial/employee relations through:

passing legislation

maintaining administrative departments, courts, tribunals and offices

employing labour

managing the economy though its submissions on national wage

increases low-pay workers.

developing policy and participating in public relations to influence

changes in industrial relations practices e.g. excluding firms who fail

to obey legislation/codes of practice from government contracts.

The bargaining framework in Australia A complex mix of government legalisation, decisions of industrial tribunals,

managerial regulation and bargaining between employers and employees

have determined the terms and conditions for Australian employees.

Both industrial/employee relations and human resource management, to

varying extents, deal with human and organisational behaviour. Both the

current bargaining framework and that proposed place an emphasis on

organisations developing the negotiation and advocacy skills of its

HR/Employee Relations staff.

What legislation impacts on industrial/employee relations? Australia operates under both state and federal legislation, meaning that an

employee‘s employment conditions may be governed by:


27 © NSW DET 2008

federal and state awards

federal certified agreements

Australian workplace agreements (AWAs) (being phased out at time

of writing)

state enterprise agreements and workplace agreements.

An employee and employer cannot ‗contract out‘ of the terms and

conditions of employment as stated in an award or agreement. An award

outlines minimum employment conditions for a particular

occupation/industry. Agreements between employers and employees also

state terms and conditions of employment and to be approved and must pass

the ‗no disadvantage‘ test. This ensures that minimum conditions are

maintained and employees are not disadvantaged or expected to sacrifice a

basic standard of employment conditions.

Types of employment relationships There are two types of employment relationships, employee and employer,

and principal and independent contractor.

An employee is required to serve and perform duties that fall within their

job description. Independent contractors do not serve as they usually run

their own business and do not take detailed directions from the principal in

order to perform their work.

At times, it is difficult to distinguish between these relationships due to the

changing nature of work. There has been an increase in the amount of

‗casual‘ employment, often referred to as the ‗casualisation‘ of the

workforce along with outsourcing of jobs to contractors. Home based

industries, working from home and the increased use of labour hire agencies

have also confused obligations and the type of employment relationships.

The employment relationship is an agreement for the employee to serve the

employer and the employer to remunerate the employee.

Even with awards and agreements setting minimum terms and conditions of

employment, the employment contract remains the primary source of the

rights and obligations of the employer and employee.

The different types of employment contracts are:

permanent employees - full-time or part-time employees who

accumulate leave and other benefits and continue working until they

or their employer terminates the relationship

o shift workers are employed on a permanent basis but work

hours in accordance with a roster. The different types of shift

rosters include fixed shift, rotating shift, alternating shift and

continuous shift.

fixed term or temporary employees - operate under contracts that

specify a start and end date.


28 © NSW DET 2008

casual employees - engaged irregularly and often on a daily basis.

They are not guaranteed ongoing work and do not accrue leave and

other benefits, but are usually paid a loading to compensate for this.

Distinguishing between employee and contractor

As employment relationships have become blurred, the courts have

developed some tests to help determine this relationship. No one test will

ultimately determine the relationship, as it is usually a question of degree.

Despite the actual agreement between the parties as to whether they are an

employee or contractor, the courts may find differently.

Some of the main tests in distinguishing between an employee and

contractor are listed below:

the control test - the courts try to determine if ‗control‘ is present.

The control test is regarded as the most important test, and focuses

on the nature and degree of control a person exercises over the

service provider. The greater the control exercised, the more likely

the person providing the service is an employee.

The organisation test - tries to determine if the service provider has

their own business and is operating under it, or is in fact operating

and following the policy and procedures of the employer.

Generally, independent contractors have a registered business name, have

their own stationery and office premises and are responsible for their own

expenses and other equipment.


29 © NSW DET 2008

Occupational health and safety

Occupational Health and Safety

(OHS) is a specialist HR function.

In larger organisations OHS may be

a separate functional unit

altogether. In some cases this

function will report to an

operational department with ‗dotted

line‘ responsibility to the HR

department. In such instances both

departments will share policies and

procedures and have similar

objectives and roles in managing

staff in a workplace.

―These activities occur within a framework of legislation that establishes

minimum standards and expectations regarding acceptable behaviour.‖

(CCH, Australian Master Human Resource Guide, McPherson‘s Printing

Group, Australia, 2002, p 4.)

Organisations, large and small are required to comply with this legislation.

In particular they must have an OHS Management System in place.

OHS legislation Diagram of the OHS legislative framework:


30 © NSW DET 2008

Text alternative for this image: Flowchart: Level 1 is OHS Act, Level 2 is

Regulations, Level 3 is Codes of Practice and Standards.

OHS Act and OHS Regulation

The OHS Act 2000 and OHS Regulation 2001 are both law (legislation) and

must be followed. The Act tells you what to do and the Regulation expands

on how to do it. Codes of Practice and Australian Standards are guidance

notes on how to comply with the legislation and often give more specific

information.

HRM and OHS management

Key point

The primary objective of implementing OHS, as stated in the

legislation, is to ensure healthy and safe workplaces.

Developing and implementing an OHS management system (OHSMS) that

complies with OHS legislation requires intimate knowledge of the

operational activities of the workplace and OHS expertise. It is a time

intensive process and requires commitment from management and ongoing

consultation with the workforce, contractors, suppliers and where

appropriate, with other key stakeholders including customer groups.

Other elements of a robust OHSMS are:

developing key measures of OHS performance so that ongoing,

regular monitoring is in place

identifying best practice OHS performance in the industry/sector or

within specific job roles

evaluation of strategies and actions implemented to control

workplace risks

modifying strategies/actions to improve effectiveness.

OHS management is largely concerned with preventative strategies. Risks

will always exist in the workplace. The challenge however is to develop

strategies to either eliminate or minimise those risks. Control measures

which rely on people, such as administration and Personal Protective

Equipment (PPE), are not very effective as people are not always

predictable. For example, we get tired, distracted and sometimes may not

receive adequate training, supervision, or discipline.


31 © NSW DET 2008

Even if we ensure a safe and healthy workplace through more effective

control measures (elimination, substitution, isolation and engineering), we

will always need administration (policies, procedures, training, supervision

and discipline) and PPE (protective footwear, gloves, hearing protection,

helmets etc). If we compare the functions of HRM and the control measures

that are required, it is easy to see how OHS management and HRM need to

be integrated.

To demonstrate the importance of this relationship, let‘s consider what

would happen if no-one was responsible for HRM or if they were not doing

their job well:

the most appropriate people for the job may not be selected

an inadequate grievance process may result in high rates of unfair

dismissal claims, angry or hostile situations, and increased employee

turnover

productivity and quality may be compromised as there is no

accountability by way of performance reviews or job analysis

ineffective interviewing and recruitment could result in

discrimination and EEO issues

there may be little structure or chance of career progression

legal prosecutions could be high under OHS and Industrial Relations

legislation

accidents and incidents could occur due to inadequate training,

supervision, reward and discipline

workers‘ compensation and other insurance premiums could be high

due to increased claims and associated costs

poor planning, safety and people management practices could affect

the organisation‘s profitability.

More information…

For those wishing to read further, the CCH text Planning Occupational

Health and Safety a guide to OHS risk management 7th

Edition,

McPherson‘s Printing Group, Australia, 2006,is an excellent resource for

HR/OHS practitioners.

Workers’ compensation and rehabilitation One result of the change in focus and status of OHS has been the rise in the

area of Workers‘ Compensation and Rehabilitation. Rather than as was the


32 © NSW DET 2008

practice in the past, of paying out and terminating workers who have

suffered a workplace injury or health problem, workplaces are now expected

to take positive action to assist in the rehabilitation and return to work of the

affected employee. This tends to be a specialist field but often comes under

the broad banner of responsibility of the HR Manager. This alignment with

HR management makes good sense when it is considered the focus of

Workers‘ Compensation and Rehabilitation primarily recognises the value

and contribution of individual employees to their organisation and the wider

community.

More information…

For more information about this area by read Appendix 2: Co-ordinating

workers‘ compensation and rehabilitation claims. Please note, the reading

notes provided in Appendix 2 are quite detailed and explores the subject

matter in greater depth than required for this unit of competency.


33 © NSW DET 2008

HR information systems

The traditional view of

the Human Resource

Information System

(HRIS) is that of

maintaining personal

records with information

based on payroll needs

rather than the full HRM

requirements.

Over the past fifty years,

technological change has

been significant. The

move from manual systems of recording and analysing personal data to

more sophisticated computerised systems has been driven by global and

competitive forces. The measurement and effectiveness of the human

resources of an organisation are crucial to maintaining competitiveness and

also profitability.

Every organisation will have differing needs and wants when it comes to a

HRM system and they must identify those before selecting, tailoring and

implementing a HRIS.

The following list of HRIS activities highlights the scope of the human

resource activities in an organisation:

resource planning and administration

payroll

record keeping and administration

leave entitlement administration

absenteeism and labour turnover

occupational health and safety

injury management system

competency and skills inventory

equal employment and affirmative action statistics

training and development planning and evaluation

employee data and relations


34 © NSW DET 2008

performance management

job evaluation.

Flexibility is the key requirement of any HRIS. The financial controllers of

an organisation will need to quickly assess the impact of a 5% increase in

salaries across the organisation whereas the human resources area may wish

to find out how many employees, for example, speak Chinese. The typical

HRIS will need to produce non-standard reports as an organisation responds

to competitive pressures.

The following table outlines the various uses of a HRIS system:

Who Information What

Top Management Management information

for strategic planning, policy

formulation and decision

making

Summary reporting,

projections, human

resources planning and what

if analysis

Department and

Management Level

Management information

for tactical planning and

decision making

Exception and summary

reports, generation of ad-hoc

reports

Middle Management and

Supervisory Level

Management information

for day-to-day planning,

decision making and control

Regular reports and

generation of ad-hoc reports

Operational Level Transaction processing,

general inquiry facilities

Basic system processing –

personal records, training,

recruitment, etc

As the HRM process evolves within an organisation so must the HRIS

evolve so it can continue to support and add strategic value to the

organisation.

Increasingly, HRM is being held accountable for the value it adds to the

organisation.

A HRIS must be able to produce data and statistics to enable HRM

reporting, benchmarking and sharing best practice with internal and

external partners.

Value adding is the key outcome of any HRIS. An effective HRIS can

enable an organisation to achieve its objectives regarding people and in turn,

support the organisation‘s strategies and goals.

A critical factor in introducing a HRIS is to ensure it‘s compatibility with

the other IT and information systems already in existence i.e. that a

compatible computer language is used so they will be able to ‗talk‘ with

each other.


35 © NSW DET 2008

HR contingency planning

Organisations need contingency plans to ensure they can continue operating

during situations of unexpected emergencies or occurrences.

The following table shows examples of potential contingency situations and

responses:

Situation Response

Armed hold up Define procedures and ongoing support

Computer malfunction or fire Develop recovery plans for information loss

Fire

Bomb threats

Gas leaks

Flood

Develop evacuation procedures

Unexpected permanent employee losses Develop process for succession and

recruitment planning

Temporary unexpected employee loss

because of illness or disaster-volunteering

work

Staffing response

Accidents Review action plan

Sudden increase in consumer demand or

workload

Recruit, overtime or reallocate employees

Global crisis Provide increased security locally

Source of table: Seward and Dein, Australian Human Resources

Management 2005, p 30.

In line with standard business practice, all forms of contingency planning

should be reviewed and updated regularly, tested where possible to ensure

appropriateness and fit with the organisation and communicated to relevant

stakeholders. Documented plans must be accessible to key personnel for

reference when responding to an identified emergency. Regular emergency

evacuation procedures should be carried out.

Developing relevant contingency plans can lead to a strategic advantage for

an organisation over its competitors who have no plans in place.

Responding in a structured and considered way is more effective than

relying on ad-hoc responses.


36 © NSW DET 2008

Labour turnover

Labour turnover refers to the

movement of employees in and

out of an organisation. It can

indicate healthy workplace

activity or be a sign of an

unhealthy workplace.

Labour turnover can be

negative in two ways:

high turnover can be

costly to the

organisation and

directly affect

organisational

performance. Profits

can reduce and

succession planning becomes more difficult.

low turnover means that new ideas and personalities do not enter an

organisation. The existing employees may tend toward ‗group think‘

where employee stability and cohesion impedes innovation, as the

group does not consider all alternatives to find the best outcome.

Labour turnover occurs due to:

employer initiated termination: dismissal or redundancy

unavoidable reasons: retirement, illness, death, family relocation or

family issues

avoidable reasons: employee initiated career change, chasing

promotion and salary increase, personality conflict.

Costs of labour turnover

Key point

The costs associated with high labour turnover can turn an

otherwise competitive organisation into a struggling organisation.


37 © NSW DET 2008

High employee absenteeism is an early indicator of emerging

high employee turnover and therefore absenteeism should be

measured and reported.

Direct costs of labour turnover: Indirect costs of labour turnover:

Replacement costs, i.e. Advertising,

interview time, selection and

induction

Processing and paying out

employees, including the cost of the

exit interview

Overtime to take up any shortage in

output

Training of new employees to

improve their productivity

Under-utilised resources

Lost sales

Lower service levels

Lower quality

Increased customer dissatisfaction

Late deliveries

Supervision time for induction

Lower morale

It is crucial that we identify the reasons, either single or multiple, for high or

low turnover as this will ensure maximum organisational productivity. In

most cases there are multiple reasons that can be identified through:

statistical analysis of age, gender, occupation, length of employment and

rostering arrangements

exit interview, both structured and unstructured

category of termination, voluntary or involuntary

surveying existing employees for opinions and attitudes.

After identifying the reasons for high turnover, we can implement remedies

to reduce this risk. For example, increase pay scales to remain competitive

with similar organisations and provide on the job education and career

opportunities to retain employees.

An appropriate labour turnover policy and procedure is essential to a

productive workforce.

Measuring labour turnover Businesses can readily measure and track the turnover ratio of staff through

the formula below. Statistics should be collected on all staff who leave the

organisation within a specified period. Quarterly measures enable the

organisation to quickly note any seasonal trends or take account of

differences when affected by specific organisational/labour market

activities.


38 © NSW DET 2008

How to calculate turnover:

Text alternative for this image: Turnover equals total number of leavers over period

x 100 divided by average total number employed over period

More specific analysis should differentiate casual and fixed term staff from

permanently employed staff. Turnover within, for example, high cost work

units can also be tracked separately. Equally, work units with high turnover

which do not required any specialist skills and attract staff readily can be

separated out from other work units.

HR should develop trend data to better inform its attraction and retention

strategies and to inform reporting to the organisation on performance in this

area.

HR managers must be realists and accept that labour turnover will always

occur. The challenge is to minimise its occurrence particularly in relation to

high performing employees. Because of this inevitability HR managers

need to establish labour turnover standards against which to compare their

organisations outcomes. Comparative industry results enable you to make

comparison against your direct competitors. In addition labour turnover

ratios allow you to monitor and evaluate your organisational results over

time.


39 © NSW DET 2008

Performance management systems

Managing staff performance is a

formal way of looking at staff

productivity and behaviour. It is

an ongoing process of

identifying, evaluating and

developing the work

performance of employees so

that organisational goals and

objectives can be achieved, and

at the same time benefit those

employees by rewarding and

enriching their working lives.

We will look at some processes

and tools to facilitate

performance management.

What is performance management? Performance management is the structured process that provides

information about individual output and behaviour.

It is an ongoing process of identifying, evaluating and developing the work

performance of employees so that organisational goals and objectives are

more effectively achieved while at the same time benefiting employees in

terms of recognition, receiving feedback, catering for work needs and

offering career guidance.

Performance management has two goals:

developing the individual

evaluating the individual.

The overall goal is to review and improve the general performance of the

organisation in a sustained manner by aligning employee and organisational

objectives. It also provides a consistent approach to reviewing employee

performance across the organisation.

A performance management system is comprised of the following

components:

job and role specification


40 © NSW DET 2008

reward structures

selection of employees

induction and training

appraisal and assessment

employee feedback

goal setting.

As mentioned above, employees and the organisation must have shared

objectives. For this to be possible, the right employees are needed, in the

right environment with the right skills and knowledge. This can be created

through implementing a sound performance management system. The

following table provides an outline of the key concepts.

Performance Concept Meaning

Job Enrichment Vertical expansion of a job by

providing additional responsibilities.

The five main features of job

satisfaction are:

achievement

recognition

work itself

responsibilities

advancement.

Job Dissatisfaction Workers‘ visible or hidden

unhappiness with their workplace.

The five main points of job

dissatisfaction are:

company policy and

administration

supervision

salary

interpersonal relationships

working conditions.

Job Satisfaction Being satisfied with the workplace

in terms of extrinsic (money and job

securities) rewards and intrinsic

(feeling of achievement and

performance) rewards.

Industrial Democracy Is the spread of organisational and


41 © NSW DET 2008

Performance Concept Meaning

decision-making power from

management to workers through

empowering workers.

Job Security The knowledge and confidence that

a position will exist in the future,

usually associated with quality and

productivity issues.

Job rotation Moving workers around or changing

their tasks in the workplace.

Job Enlargement Horizontal expansion of a job by

providing different work at the same

level of responsibility.

Worker Participation Involving workers in the decision

making about the workplace.

Quality of Work life Factors in the workplace to which

workers are entitled.

Performance management goals Developing the individual – through training, secondments, job

enrichment, transfers, promotions, management development

programs etc.

Performance improvement - promotes successful performance

and helps individuals overcome barriers.

Identifying potential - identifying possible career paths for

employees.

Feedback - providing information about expectations and

benchmarks against performance goals.

Human resource planning - Human resource planning looks at

the existing employees to identify training and development for

the organisation‘s future needs.

Communication - Two-way communication between

management and employees builds understanding and trust that

helps attain joint outcomes.


42 © NSW DET 2008

Performance management process Diagram of the Performance management process:

Text alternative for this image: Hierarchy showing: Organisation’s Core Mission;

Planning – Strategic, Corporate, Workforce; Job design, definition, analysis;

Accountability; Job result areas; Counselling, Training and development, Career,

succession, planning, Identifying potential, Reward system.

Soruce: CCH, Australia, Master Human Resources Guide 2004/05, Sydney,

2004, p 430)

The above flowchart outlines the process of managing the performance of

individuals. Today, there is increased awareness of the relationship between

productivity and workplace stability, and management and employees‘

harmony and welfare.

Job analysis

Job analysis, accurate job descriptions and job specifications are important

for the selection of appropriately trained and experienced personnel. A

proper match between a job and employee capability is essential if the

organisation is to achieve its business goals. The organisation must have a


43 © NSW DET 2008

thorough understanding of the demands of each role and the skills required

to perform at the required level. Job analysis provides the foundation for

developing this understanding. It is also fundamental to the performance

management process.

Job descriptions

A job description is a document that is derived from the job analysis. A job

description, also referred to as a position description, sets out the

responsibilities of the jobholder, what they actually do, why the job exists

and under what conditions it is preformed.

Job specifications

The job specification, also known as the person specification, is derived

from the job analysis. It identifies the skills, knowledge, abilities,

qualifications, experience, personal qualities and any special requirements

of the person needed to perform the job competently.

Performance management

Job analysis is essential to developing performance standards. Without this

information, we can‘t measure acceptable levels of performance. Well-

defined performance measures provide clearer guidelines about expectations

for individual performance and enable the Human Resource or Line

Manager to coach employees specifically in the areas they need to improve.

Training and development

The person specification defines the knowledge, skills and abilities required

for successful job performance. This means the Human Resource Manager

can develop training and development objectives, design programs and

determine whether an employee needs further training. In larger

organisations you may find this function referred to as Learning and

Development or Workforce Development.

Career planning and development

The HR Manager, mentor or other managers are better equipped to provide

career counselling, advice and planning if they have an accurate

understanding of the types of jobs available in the organisation.

Remuneration and benefits

If we determine the relative worth of a job, we make the process of salary

and benefits administration simpler and more equitable. Without this

information it is difficult to accurately estimate a job‘s worth to the

organisation or to make comparisons with jobs in the marketplace.


44 © NSW DET 2008

Employee relations

Misunderstandings about job content and responsibilities are a major source

of industrial disputes between employers, employees and unions. Job

analysis provides the organisation with essential information to minimise

such disputes and grievance because it provides the information necessary to

make sound decisions about jobs and responsibilities.

Performance appraisal

Performance appraisal is part of a performance management system that

also consists of performance planning, continuous measuring and feedback,

regular realignment of key performance indicators and developmental

programs.

The information from a performance appraisal can assist with an employee‘s

future training and development, identify knowledge and/or skill gaps,

review wage and salary and develop a career pathway for potential

promotion.

Key point

The performance appraisal process should not be the sole

responsibility of the human resources area – it should be the

responsibility of all line managers and indeed all employees of

the organisation.

Note: The appraisers need to be adequately trained and prepared

for undertaking this task.

The performance appraisal process The performance appraisal process is a systematic, considered and face-to-

face discussion between the employer representative and the employee

about work performance, work goals, career aspirations and future

development.

The appraisal procedure is traditionally an annual process and is a formal

opportunity for discussing, documenting and planning work related issues.

The strategic goals of the performance appraisal system are:

encourage work performance, both to maintain a high standard of

performance or to improve the current standard of performance

acknowledge and recognise good performance

review past performance


45 © NSW DET 2008

identify training and development needs

enhance communication and understanding between the employer

representative/employer and the employees

identify and establish future work goals through documenting a

learning and development plan.

The overarching goal of the performance appraisal process is to improve

performance, employee morale and organisational sustainability.

The process of reviewing performance will detect instances of

underperformance and manage that within its process. Underperformance is

more likely to be the result of unclear work goals for the individual, poor

supervision, skills training issues etc. These matters are core to the

performance management process.

On the other hand, ongoing poor performance i.e. where an employee does

not respond to endeavours to correct underperformance , whilst it may be

initially identified during a performance appraisal, will be managed

according to the organisation‘s separate managing poor performance

policies and procedures. Organisation‘s that do not have separate policies

may rely on relevant clauses in industrial awards/agreements to guide their

process. Where a remedial action plan has been agreed and is in place, the

performance management system may be utilised to monitor progress.

Poor performance must be dealt with expeditiously, using appropriate

counselling, grievance and disciplinary procedures that are fair, equitable

and accessible to everyone in the organisation. Managers need to be trained

in these or receive coaching when working through an issue to ensure policy

is followed.

At the same time employees also have a responsibility within this process.

Employment contracts are made on the basis of employees working at

expected standards of performance. Failure to do so, after procedural

fairness processes have been followed, provides a basis for employment

termination. This is an example where performance management interfaces

with the area of Industrial Relations.

Legislative issues

Performance management is a positive process that should benefit the

employees and the organisation. It should take place within a framework of

established policies and procedures that meet organisational requirements

and reflect the current legislation and industrial relations requirements. This

structured framework will not only ensure that employers meet their

responsibilities and comply with legislation but will also enable employees

to achieve their potential. For example:

if employees are benchmarked against vague standards or criteria

needed to perform a particular job, an employer may be in breach of

equal employment opportunity legislation.


46 © NSW DET 2008

employers need to be mindful of privacy legislation when they are

collecting, evaluating and storing statistical data to determine future

human resource needs.

the occupational health and safety legislation requires an employer

to maintain a safe workplace, that is, one without risks to its

employees‘ health.

Record keeping and documentation

Record keeping and documentation of human resources processes are

essential for an organisation to meet its legislative requirements and for the

administration of performance management. Certain records (either in hard

copy or electronic format) must be maintained and the organisation should

establish a systematic approach to record keeping.


47 © NSW DET 2008

Training and development

Training and

development is an

important part of any HR

function. It should be an

ongoing process aimed at

helping all employees

reach their full potential

by acquiring the

knowledge, skills and

attitudes relevant to their

work.

Training initiatives may cover a range of subjects, including:

general workplace policy and procedures

legislative responsibilities in areas such as OHS, EEO, grievance

handling, performance management and discipline

induction training for new or relocated employees

on-the-job training and workplace resources such as posters and

summary cards.

Training programs are useful tools for communicating information. Often,

programs are developed as part of the organisation‘s strategy for

implementing new policies and procedures. Training is a flexible solution.

It can be tailored to the audience so that different groups within the

organisation receive the information relevant to them.

At a management level, training can ensure that all supervisors know their

legislative obligations, role and responsibilities to implement policies and

procedures. At an employee level, it ensures the competence of the worker

to carry out tasks in keeping with the organisation‘s policies and procedures.

The training and development model that follows highlights areas that

determine the skills and knowledge requirements for a given job. It also

takes into account specific training considerations, such as:

target audience

location

training techniques

course design.


48 © NSW DET 2008

Training and development model:

Text alternative for this image: Hierarchy showing: Job analysis, HR planning

needs, Legislative compliance, Needs analysis – organisation, jobs, employees,

Performance feedback system; Skills requirements – technical, conceptual,

interpersonal, management; Who to train – managers, employees, Where to train –

in-house, external, How to train – training strategies & techniques, Course design –

session plans, learning outcomes, learning styles.

Implementing training programs Training may take many forms. Here are some methods you might consider

when implementing a workplace training program:

Demonstrations Field visits

Workshops Lectures or presentations

On-the-job training Case studies or simulations

Computer instructions Interactive multimedia


49 © NSW DET 2008

Action learning projects Self-paced learning

Implementing development programs

Key point

Development programs are designed for deeper knowledge and

skill acquisition. These programs have a longer-term focus and

may be in place over a period of months or even years,

depending on the individual development need.

Such programs are often linked with the performance management/appraisal

system and succession planning.

Succession planning is the process of identifying personnel with the skills or

potential to succeed to the position when the job incumbent leaves/is

transferred/promoted out of that position. For contingency planning

reasons, it is usual to have two personnel identified as possible future

incumbents of the position.

Programs may be designed for an individual or a small group of personnel,

such as graduates, or employees who have been identified with potential to

progress quickly in the organisation. Where a small group is involved, the

program usually has some flexibility to enable tailoring for individual

development needs.

Techniques for professional development that incorporate working with

others include:

Mentoring Coaching Buddy systems

Networking Support groups Discussion groups

Social groups Research Projects

Computer-assisted

programs

Seminars Conferences

Attending meetings Working parties Industry visits

Secondments Job exchanges Higher duties

appointments

This HR function is often a good indicator of an organisation‘s commitment

to the whole area of HR management. Good investment in and commitment

to the training and development function indicates management‘s perception


50 © NSW DET 2008

that their employees are critical high potential assets rather than unavoidable

high costs.


51 © NSW DET 2008

Appendix 1: The development of human resource management

HRM in Australia has evolved through the following stages:

Stage Time Period Development Stage

1 1900 to 1940s Welfare and administration

2 1940s to mid-1970s Welfare, administration, staffing and training—

personnel management and industrial relations

3 Mid-1970s to 1990s Human resource management

4 2000 to now Human resource management in the new millennium

Source: Nankervis et al, Human Resource Management, 2002, p 9

The welfare and administration stage (1900 to 1940s) During this period, Australia experienced a reasonably stable economy,

marketing its limited manufacturing and agricultural products in the United

Kingdom and Europe. The First World War and the Great Depression

disrupted Australian society. There was low unemployment up until the

1930s after which labour was readily available for employers. The trade

union movement focussed on issues of pay and working conditions.

During this period, supervisors, line managers and early specialists such as

recruitment officers, trainers or welfare officers were responsible for

personnel functions in organisations. These were a part of the overall

administration, and were restricted to wage/salary records, employee

welfare activities and disciplinary procedures. As a result, personnel

functions were largely fragmented. Early management theorists from

overseas had little impact in Australia until the 1940s. Structured reward

systems and ‗scientific‘ selection techniques, through job design, helped

refine personnel management practice by recruiting and placing skilled

employees. Management science contributed to performance management

programs and behavioural science added psychological testing and

motivational systems.

In 1927, A H Martin from Sydney University established the Australian

Institute of Industrial Psychology to promote the ideas of behavioural

scientists and industrial psychologists in Australia.


52 © NSW DET 2008

The welfare and administration, staffing and training stage (1940s to mid-1970s) This period marked the beginning of a more professional and specialist

approach to personnel management in Australia. The Second World War

had a significant effect on business, the economy and the labour market for

those who stayed at home and those who went overseas.

Not only was there a labour shortage for essential industries during the

Second World War but there was also a corresponding increase in problems

with performance of existing employees. Australian industry employed

more women since men were in military service. Social, financial and

family pressures hindered productivity and output of employees and

recruiting became increasingly harder.

At the end of the war, returning soldiers flooded the labour market but often

with few work skills. Employers, encouraged by government initiatives and

their own post-war need for skilled labour in a developing economy, began

to focus on a wider range of personnel functions.

Some employers found that employee welfare services attracted employees

and ensured their continued productivity. Scientific management and

behavioural science techniques, such as psychological testing and structured

leadership training, were used in selection and training programs in some

Australian organisations, after trials in the United States and British armies

during the war. Specialists were employed to recruit, train and for welfare

activities, taking these functions away from line managers.

During the 1950s, the Commonwealth Employment Services (CES) was set

up to help employers obtain suitable employees, and the Institute of

Personnel Management Australia (IPMA) was developed which led to most

Australian states having personnel management courses. Unionism during

these decades focused on pay and work conditions, forcing personnel

activities to include industrial relations issues. The Conciliation and

Arbitration Act (1904) established national and state industrial relations‘

structures that were developed even further during this period.

However, the expanded range of personnel functions were separate

activities, performed without any consideration of their impact on the

overall organisation.

Human resource management (mid 1970s to 1990s) During the 1970s, the majority of Australian organisations experienced

turbulent business and economic environments. There was severe

competition from the United States and European organisations and

emerging Asian markets. Dramatic rises in the cost of oil products lead to


53 © NSW DET 2008

increases in the cost of all goods and services and ultimately led to

substantial salaries and wages increases. The cost of employees became a

major issue for most organisations and triggered major organisational

restructuring and a clearer focus on the need for efficient and effective HR

management systems and processes. ‗Excellence‘ theories began to

influence the management of employees and IPMA and training institutions

became more sophisticated in their approaches, incorporating ‗Excellence‘

theories and Total Quality Management.

Personnel Management was becoming human resource management – a

change that meant integrating personnel functions and a strategic focus on

overall organisational effectiveness.

Australian HRM combined personnel management and industrial relations

activities and was affected by award restructuring and enterprise

agreements, increasing employment legislation and economic realities such

as declining trade with Britain and Europe and an increase in opportunities

within the Asian region.

This stage represents the integration of personnel management and

industrial relations into a co-ordinated and strategic approach to the

management of an organisation‘s employees – Strategic Human Resource

Management.

Human resource management in the new millennium HRM has been, and will continue to be, transformed as a consequence of

new technology, globalisation, and fundamental changes in the nature of

jobs and work. In Australia labour and skills shortages across the nation

together with generational change issues have and will continue to provide

organisational challenges and place high focus on establishing and

maintaining effective HRM practices.


54 © NSW DET 2008

Appendix 2: Co-ordinating workers’ compensation and rehabilitation claims

Note:

You do not need to know the information in Appendix 2 for

completion of the unit BSBHRM401A – it is provided as additional

material for your information.

WorkCover NSW defines workers‘ compensation as providing ‗injured

workers with weekly payments to cover loss of earning capacity, payment of

medical expenses and vocational rehabilitation expenses, where necessary,

to assist them to return to work. All employers are required to have a

workers‘ compensation policy to protect them from financial claims when a

worker suffers a work related injury.‘ (www.workcover.nsw.gov.au)

Organisations need appropriate policies and guidelines for the

administration of workers‘ compensation. If a claim is made, the matter

needs to be resolved quickly. Employers should periodically review all

claims and use the findings to improve operations and train employees so

that there are fewer incidents in the future.

The philosophy behind injury management is intervention and/or

rehabilitation. The legislation is designed for early notification of injury

and a timely response to managing the injury.

An organisation must cover all employees with a workers‘ compensation

scheme appropriate to the state or territory in which it operates.

There are a number of stakeholders in the workers‘ compensation process,

each with roles and responsibilities in co-ordinating and managing claims

and injury management.

The role of the employer is to co-ordinate and manage workers‘

compensation claims and workplace injuries through effective claim

processes, including managing the injury and the injured worker. This is

achieved through human resource systems and a nominated workplace

injury management co-ordinator and/or staff member responsible for

administering the workers‘ compensation and injury management programs.

Integrated information systems are essential for managing workers‘

compensation.

http://www.workcover.nsw.gov.au/


55 © NSW DET 2008

Employers should work closely with their insurer and the injured worker to

support the progress of a work-related injury and their worker‘s recovery.

The earlier a work-related injury is treated and managed, the more likely the

worker will recover. A return to work (RTW) plan, providing suitable work

duties, is essential for injury management as it allows workers to remain

useful, which helps both their recovery and motivation.

Rehabilitation is the centrepiece of all approaches to workers‘ compensation

claims. The overall plan is to get injured workers back to the workplace in a

condition that allows them to perform their normal duties or duties as

determined by either WorkCover or a medical practitioner.

Accident prevention covers accidents to an employer‘s property, materials,

production and equipment. It also covers injury prevention, which can be

associated with the above. The relationship between accident prevention

and workers‘ compensation depends on how proactive the company is in

managing its human risks.

Occupational health and safety (OHS), injury management and workers‘

compensation are constantly changing. Recently, we have seen significant

changes to both the OHS and injury management legislation in New South

Wales. These changes are partly about the time and manner of reporting

work related injuries and illnesses. Without monitoring, reviewing and

auditing injury and incident documentation, there is no way of measuring

performance in this area of management. There have also been changes to

workers‘ compensation legislation, in particular, a new scheme for

participating insurers.

The history of workers’ compensation and injury management in NSW The NSW Workers’ Compensation Act 1926 was the first NSW government

Act to provide rehabilitation, but it was not binding on either the employer

or injured worker. This meant that many workers were left with horrific

injuries, had no physical or vocational rehabilitation, and little prospect of

finding future work.

The NSW Workers’ Compensation Act 1987, which superseded the 1926

Act, makes rehabilitation its focal point.

Under this Act, rehabilitation became:

an obligation placed on the employer, and

an entitlement to injured workers.

This Act also emphasised paying regular benefits (weekly payments) rather

than a single lump sum. In the past, the worker only received a lump sum

payment after they had recovered.

Weekly payments recognised the social and economic advantage to the

injured worker and their dependants of maintaining their standard of living

while the worker was recovering and preparing to return to work.


56 © NSW DET 2008

The NSW Workplace Injury Management and Workers’ Compensation Act

1998 extended injury management and rehabilitation to include:

treatment of injuries/illness

retraining

workers‘ compensation claims management

employment management practices.

This Act makes the employer, their workers‘ compensation insurer and an

injured worker‘s treating doctor responsible for managing the injury and

facilitating the employee‘s return to work as fast as possible, using a formal

injury management system.

Since the 1998 Act was introduced, there have been further Amendment

Acts proclaimed. These Acts have streamlined the workers‘ compensation

process and strengthened the responsibilities and duties of the employer,

insurer and treating doctor for early injury management of injured workers.

However, none have changed the underlining principles set down in the

1987 Act or the 1998 Act.

The employer’s legal responsibilities and role when a worker is injured The philosophy behind injury management is early intervention. This

means managing a worker‘s injury as soon as it occurs. In fact, before the

injury occurs. The company must allow easy access to information on

workers‘ compensation. The current legislation requires early notification

of injury and a timely response to injury management.

Employers who work closely with their insurer and the injured worker can

influence the progress of a work related injury and help their employee

recover. The earlier a work related injury is treated and managed, the more

likely the worker will recover quickly and have less time off work. The

main tool for injury management is providing suitable duties at work as this

helps workers remain useful, recover faster, be more motivated and keep a

positive attitude.

The benefits to an employer who offers suitable duties include:

lower workers‘ compensation premiums

productivity from the injured worker, even if at a lesser rate

positive attitudes in the workplace

some control over the worker‘s recovery.

Let‘s look at the reporting procedures and injury recording documentation

that an employer must complete when an injury occurs.


57 © NSW DET 2008

Reporting procedures and injury recording documentation

Notice of injury

All employers must have an injury register, which is a document or file for

recording workplace injuries. Employers may be fined if they do maintain a

Register of Injuries. Employers must ensure that all workers are aware of

their obligations to report (document) workplace injuries and hazards. If a

worker sustains an injury or illness at work, they should report the injury or

illness to their immediate supervisor, and record this information in the

injury register and any other organisational documents required.

Notifying incidents and injuries to the appropriate authorities

From 1 September 2003, the way in which employers should notify serious

incidents and incidents were changed. WorkCover NSW has a publication,

which sets out the requirements; you can download it at

http://www.workcover.nsw.gov.au/Publications/WorkersComp/InjuryMana

gement/Pages/new_not_broch_1287.aspx

As employers are governed by the timeframes listed above, it is also

important that employees are informed of these requirements, and that

employees co-operate by notifying their supervisors or employer early,

following a workplace incident. For instance, if an employer is required to

notify their insurer within 48 hours, and an employee doesn‘t report an

incident until 24 hours after it happens, then it makes it difficult for an

employer to comply with WorkCover‘s timeframes.

Workers’ compensation claims

Before making a claim, the injured worker (or their representative) must

advise the employer that an injury has occurred, and provide medical

information in the form of a NSW WorkCover Medical Certificate. An

injured worker does not, in most cases, need to send a written claim form to

the insurer to receive workers‘ compensation. Instead, once the insurer has

been told of an injury (by the employer, the worker or a third party), the

following will occur:

provisional liability payments will start within seven (7) days (for

most injured workers).

the insurer will investigate the facts and decide to either continue or

stop further payments. Most of the information that the insurer

needs to make a decision about workers‘ compensation will be

available from the employer, the worker and the treating doctor.

http://www.workcover.nsw.gov.au/Publications/WorkersComp/InjuryManagement/Pages/new_not_broch_1287.aspx

http://www.workcover.nsw.gov.au/Publications/WorkersComp/InjuryManagement/Pages/new_not_broch_1287.aspx


58 © NSW DET 2008

There are occasions, however, when a worker will need to submit a written

claim form, such as:

if the insurer requests one (for example, if the insurer is notified two

months after the injury)

if the worker needs weekly payments for more than 12 weeks or

medical expenses of more than $7,500

if the insurer decides not to start provisional liability payments, or

stops making provisional liability payments, and the worker

disagrees.

The employer must provide the name of their workers‘ compensation

insurer to all employees. This is usually in the form of a poster on

noticeboards and is also included as part of the Register of Injuries form, or

included in the Register of Injuries folder.

If an injury occurs, an employer must supply a workers‘ compensation claim

form, if requested by the injured worker. Alternatively, the employer can

provide this information to the insurer if a claim form is not required, as

mentioned above.

Workers‘ compensation insurance is compulsory. Fines and prosecutions

can occur if an organisation fails to obtain current workers‘ compensation

insurance.

It is also an offence to dismiss an injured employee within six months of

sustaining an injury/illness at work that leaves them incapacitated.

Forwarding information to the insurer

The employer must send the injured worker‘s WorkCover Medical

Certificate to the insurer within seven days of receiving it, and also forward

any ongoing Medical Certificates, receipts and accounts for medical or other

treatment, within seven days.

Examples of documentation

If the injury/illness keeps the worker away from work for less than 12

weeks, with medical expenses less than $7,500, the documentation required

by the insurer may only include:

employee‘s WorkCover NSW Medical Certificate/s

receipts and accounts for medical or associated expenses

a copy of the Injury Register or an organisation‘s Injury Notification,

which can be done electronically or by phone

If the injury/illness keeps the worker away from work for more than 12

weeks, with medical expenses greater than $7,500, the documentation

required by the insurer may include:

employee‘s WorkCover NSW Medical Certificate/s


59 © NSW DET 2008

employee‘s Compensation Claim form, if requested

receipts and accounts for medical or associated expenses

employer‘s Report of Injury form.

Always keep a copy of every document that relates to a workers‘

compensation claim. Also, the employee is entitled to a copy of every

document they have signed.

Payment of benefits to workers

The insurer is legally obliged to start provisional liability payments to the

employee within seven days of being notified of the injury. This does not

mean the insurer has accepted liability for the claim. The insurer can choose

not to continue these payments if they have reasonable excuse. Further, the

insurer has 21 days from the initial notification to accept or deny liability for

the claim. Once the insurer has made a decision they must notify the

employer and employee by mail.

It is important to be fully aware of the documentation required to process a

workers‘ compensation claim. The areas of injury notification and claims

processing are quite complex.

What you should not do

You should not make any payment (medical and wages) to an injured

worker before you have received word from your insurer or delegate (loss

assessor) that they have accepted liability. To pay without advice from the

insurer is to accept liability on their behalf.

If forms are requested by an insurer, when completing any employer

documentation, you should not copy from the employee‘s report of the

incident. The employer‘s reports should be based on an incident

investigation. This shows the importance of having good incident, injury

and near miss reporting systems that help you obtain and record all relevant

information as soon as possible after the employee‘s injury.

Again if a form is requested, it is equally important that the employer does

not complete the employee‘s claim form. If the claim is litigated, the

employee may claim that they didn‘t complete the document or didn‘t

understand a particular section. When the claim is received it is checked

and the stakeholders are informed. Incomplete forms are returned for

correction.

To encourage employees to seek early treatment for workplace injuries,

there is a Statute of Limitation for reporting workplace injuries. This means

there is a timeframe for a worker making a claim. If a claim has not been

lodged within six months of the worker suffering an injury, the insurer will

investigate the claim, which will prolong the outcome and may cause

financial hardship and stress for the employee.


60 © NSW DET 2008

Common law and duty of care Workers‘ compensation is part of an employer‘s ‗duty of care‘ in the way

they carry out their business. ‗Duty of care‘ is embodied in common law of

employment and negligence and fundamentally means that an employer is

legally obliged to take care to ensure that employees are not exposed to

unnecessary risks.

To perform their duty of care under common law, the employer must

provide:

reasonably competent employees to do the work

a sufficient number of employees to do the work safely

a reasonably safe place to do the work

proper plant and equipment to do the work

a reasonably safe system of work

safe entry and egress at the workplace.

The above duty of care principles are included in the Occupational Health

& Safety Act 2000 and the OHS Regulation 2001.

Employees also carry responsibilities under the Act and Regulation, and

must co-operate with the employer‘s efforts to comply with OHS

legislation, and take reasonable care for the health, safety and welfare of

others.

Common law provisions

A worker may be entitled to sue their employer for damages at common law

if the injury was caused by the negligence of the employer or a fellow

employee. Negligence is a failure to take reasonable care of the worker.

Damages at common law are generally paid as one lump sum, to cover past

entitlements and expected future entitlements.

The method of assessing losses under common law claims has changed with

the amendment of the workers‘ compensation legislation in late 2001. To

be able to seek damages under common law, an injured worker must have a

permanent physical impairment of 15% or more, using the WorkCover

guidelines for the evaluation of permanent impairment.

Only damages for past and future economic loss, due to loss of earnings,

may be awarded in a common law action. If a worker is successful in their

common law action, they cease to be entitled to any further compensation

under the 1987 Act; the amount of any weekly compensation already paid is

deducted from the damages awarded, and the worker cannot access any

further injury management.


61 © NSW DET 2008

Workers’ compensation

Employers must indemnify their employees for losses legitimately incurred

while carrying out their work. Workers‘ compensation can provide income

and meet the medical and associated costs for those people who suffer

injuries, illnesses and diseases in the course of carrying out their work for

their employer. In other words the workers‘ compensation system provides

benefits for injured workers.

Workers‘ compensation is generally a no fault system. Under workers‘

compensation, negligence or contributory negligence is not an issue. The

major issue under workers‘ compensation is whether or not the injury or

illness is work related.

The workers’ compensation claims process There needs to be an injury, illness or disease before the injury management

process can start. Obviously not every workplace accident causes an injury,

but when an injury or illness does occur we must follow a formal reporting

process to start a workers‘ compensation claim. Some accidents happen

away from the workplace, such as on a work related journey and working

from home. These will follow the same process as those occurring in the

workplace.

Compensation is payable for a personal injury sustained on journeys to and

from work. This is from the boundary of the land where the worker lives

and their place of employment.

How to claim workers’ compensation

When claiming workers‘ compensation we need to follow a formal process.

The essential steps to start a claim are:

The worker reports the illness or injury to the employer as soon

as possible and fills out the organisation‘s injury register and

required documentation.

The worker sees a doctor. The doctor will provide a WorkCover

NSW Medical Certificate. The worker fills out their part of the

Medical Certificate and the doctor completes their part.

If the injury or illness is likely to keep the worker away from

their normal duties for more than 12 weeks, or $7,500 medical

costs are incurred, then the (written) workers‘ compensation

claim documents must be lodged with the insurer. Otherwise the

Medical Certificate and the organisation‘s injury register may be

the only documentation required to commence a provisional

liability claim.


62 © NSW DET 2008

If required, the worker obtains the workers‘ compensation claim

forms from the employer or insurer and completes them.

The required forms and medical certificate are returned to the

employer as soon as possible. The employer then passes these

documents onto the insurer within the nominated time frames set

down in the legislation.

Once provisional liability payments have started (within 7 days),

or where the claim was investigated and then accepted, the

employer or insurer must pass on weekly payments to the injured

worker as soon a practicable. Under provisional liability, these

payments can continue up to 12 weeks or $7,500 medical

expenses and are then re-assessed.

The employer also needs to continue forwarding any medical

expense documents, or further Medical Certificates, to the

insurer within 7 days of receiving them.

The steps in injury management and workers’ compensation

This flowchart from National Disability Services sets out the steps for a

workers‘ compensation claim or injury management:

http://www.nds.org.au/nsw/ohs/Disability%20Safe_Workers%20Compensat

ion%20Injury%20Reporting_FINAL.pdf

Who is entitled to claim workers’ compensation benefits?

Only workers (the organisation‘s employees) can claim workers‘

compensation benefits, not contractors or sub-contractors. Section 4 of the

Workers’ Compensation Act 1987 defines a worker as any person who

enters into a contract of service or apprenticeship. Workers can be full-time,

part-time or casual.

Many guidelines are used to determine who is a worker. Some are:

is there a contract of service between worker and employer?

how is the worker paid (payroll or billing)?

who supplies the workers‘ tools, material and equipment?

who has control over the worker?

who has power to hire and fire the worker?

is there an industry award or workplace agreement between the

employer and worker?

Sometimes an employer thinks they have contractors working for them,

however, in a court of law, these contractors may be deemed as employees

and therefore are entitled to workers‘ compensation.

http://www.nds.org.au/nsw/ohs/Disability%20Safe_Workers%20Compensation%20Injury%20Reporting_FINAL.pdf

http://www.nds.org.au/nsw/ohs/Disability%20Safe_Workers%20Compensation%20Injury%20Reporting_FINAL.pdf


63 © NSW DET 2008

Injury management The philosophy behind injury management is early intervention. This means

starting to manage a worker‘s injury as soon as it occurs. The current

legislation requires early notification of any injury, and a timely response to

injury management.

Employers who work closely with their insurer and the injured worker can

influence the progress of a work related injury and help their employee

recover. The earlier a work related injury is treated and managed, the more

likely that the worker will recover quickly and have less time off work. The

main tool for injury management is providing suitable work duties that will

help workers remain useful, recover faster, be more motivated and keep a

positive attitude.

The benefits to an employer who offers suitable duties include:

lower workers‘ compensation premiums

increased productivity from the injured worker

the development of positive attitudes in the workplace

some degree of control over the worker‘s recovery.

The employer‘s Return to Work Program should help organise suitable

duties.

Definition

Injury management is the term used for all activities associated with

ensuring an early, safe and durable return to work of injured workers when

they have sustained an injury at work.

Section 43 and 45 of the Workplace Injury Management & Workers‘

Compensation Act 1998, places obligations on workers‘ compensation

insurers to develop and implement an injury management (IM) program.

This program integrates all aspects of injury management.

Under section 52 of the1998 Act, the employer must have a Return to Work

(RTW) program. This program has to be consistent with the insurer‘s IM

program. The employer‘s RTW program incorporates the policy and

procedures the employer, or the employer‘s RTW co-ordinator must follow

when a workplace injury has occurred.

The employer or the RTW co-ordinator develops a RTW plan for employees

returning after an injury/illness.

Under Section 45 of the1998 Act, the insurer must develop an IM plan for

every worker who sustains a ‗significant injury‘. This plan ensures the

worker receives prompt, appropriate medical management and a planned

and managed return to work.

A ‗significant injury‘ is one that keeps a worker away from their normal

duties for more than seven consecutive days.


64 © NSW DET 2008

These programs mean that the insurer and employer must have an injury

management system before an injury or illness occurs.

What is an injury management program?

Under Section 43 and 45 of the Workplace Injury Management & Workers’

Compensation Act 1998, each insurer is legally required to have an injury

management program. The insurer must ensure that each employer is aware

of their IM program and their obligations under the program.

An IM program is a coordinated and managed process that integrates all

aspects of injury management including treatment, rehabilitation, retraining,

claims management and employment practices. Injury management is a

process of combining processes and procedures to achieve a ‗timely, safe

and durable return to work‘ of the injured worker.

The IM program includes the policies and procedures that stakeholders must

follow. The employer, insurer, injured worker and treating doctor all have

legal obligations in an IM program.

Injury management plans

Injury management plans are created for individual workers who have

sustained a significant injury at work.

An IM plan co-ordinates and manages the treatment, rehabilitation and

retraining of individual workers who have sustained a significant injury at

work. The purpose of this plan is to achieve a timely, safe and durable

return to work for injured workers.

The insurer will develop the IM plan after contacting the worker, the

employer and the treating doctor/s. The Act requires that the insurer

produce an IM plan within three days of initial notification.

The insurer is responsible for developing both IM programs and IM plans.

Who are the stakeholders in injury management?

We have already looked at the documentation needed for successful injury

management. Now we‘ll consider the stakeholders in the injury

management process. Who are they and when are they required?

The four main stakeholders are:

Insurer

As you have read above, the insurer must have an injury management (IM)

program. When the employer advises the insurer that a worker has suffered

an injury, the insurance company must initiate action within three working

days. This includes contacting the injured worker, the employer and the

nominated treating doctor/s.

The insurer must then:


65 © NSW DET 2008

establish an IM plan for the worker

provide the employer and worker with information about the IM plan

keep the employer informed of the significant steps taken or proposed

under the plan.

Other duties of the insurer include:

assessing the claim

making a decision about liability, and paying compensation in

accordance with the 1987 and 1998 Acts

offering advice on injury and claims management to progress the

settlement of the claim.

Employer

The employer must participate and co-operate in establishing the IM plan

and comply with any employer‘s obligations under the plan.

The employer must also provide suitable employment (suitable duties) for a

worker who has been incapacitated and is unable to return to pre-injury

work. As discussed above, the employer must produce a written RTW plan

in consultation with the injured worker and the nominated treating doctor/s.

The employer’s RTW co-ordinator

The RTW co-ordinator is an employee of an organisation who has been

specifically trained in the injury management process. Alternatively, they

may be engaged specifically for that purpose. Employers have the option of

sharing arrangements for employing a RTW co-ordinator (contact

WorkCover for further information on RTW co-ordinators shared/engaged

arrangements).

Employers who have a workers‘ compensation basic tariff premium over

$50,000 per annum must, by law, employ a person who is trained as a RTW

co-ordinator. This person manages and co-ordinates the injured worker‘s

return to work to ensure it is safe and durable. This can include:

processing and managing workers‘ compensation claims

communicating with the insurer

communicating with the nominated treating doctor about suitable duties

or the injury management/return to work plan

communicating with an accredited rehabilitation provider when

necessary

communicating with the injured worker and their supervisor to identify

suitable duties and sort out problems.

Injured worker

An injured worker must:


66 © NSW DET 2008

participate and co-operate in the establishing the IM plan

comply with their legal obligations under the plan

nominate a treating doctor who will agree to participate in developing

the IM and RTW plans

authorise the nominated treating doctor to provide relevant information

to the insurer or employer for the purpose of the plans

make all other reasonable efforts to return to work with their pre-injury

employer, as soon as possible.

Nominated treating doctor

The nominated treating doctor is the doctor chosen by the injured worker,

usually their GP, to manage their injury and assist in their return to work.

The nominated treating doctor will help develop the IM plan and the RTW

plan. In some cases an organisation will have an arrangement with a doctor

who is seen as the ‗company doctor‘. The doctor can be appointed by the

company (company doctor); however, the worker always retains the right to

nominate their own treating doctor.

The nominated treating doctor is the professional who completes the

WorkCover NSW Medical Certificate that starts the process of injury

management.

Other parties

Occasionally other parties may be involved in injury management. They

include:

Injury management consultant

An injury management consultant is a doctor authorised by WorkCover to

provide advice to insurers, employers and treating doctors. They are usually

engaged when there is a disagreement about the duties suitable for a worker

returning to work. These consultants are experienced in occupational injury

management, and have good communication and mediation skills.

Approved medical specialist

An approved medical specialist is a specialist doctor appointed by the

president of the Workers‘ Compensation Commission to provide opinions

about ongoing liability, employability and the level of permanent

impairment.

There are two types of Workers‘ Compensation Commission Approved

Medical Specialists:

those involved in helping to resolve general medical disputes about the

worker‘s condition, such as causation, treatment options or fitness for

employment

those involved in resolving disputes about the evaluation and degree of

permanent impairment.


67 © NSW DET 2008

Accredited rehabilitation provider

An accredited rehabilitation provider is a person accredited by WorkCover

to provide injured workers with occupational rehabilitation services to assist

them in returning to work. Rehabilitation providers are staffed with

occupational health professionals such as occupational therapists,

physiotherapists, rehabilitation counsellors, psychologists and ergonomists.

They can be contracted at any time, and take over and co-ordinate an injured

workers‘ IM and RTW plans. They liaise with the treating doctor, the

insurer, the employer or the employer‘s RTW co-ordinator, to undertake

workplace assessments, find suitable duties and monitor the employee once

they are back at work. Regular meetings are held between the worker, the

employer and/or the RTW co-ordinator to monitor the injured worker‘s

progress.

Benefits to employees

There are many benefits for injured workers when they participate in injury

management, including:

ongoing job security - employees may feel they are to blame for their

injury and fear that their employer will dismiss them or take other

punitive action. A RTW plan, offering a graded return to pre-injury

duties, may help allay this fear.

return to normal pay and other incentives such as overtime and penalty

rates - workers who normally receive overtime allowances or penalty

rates may face financial hardship when they are receiving workers‘

compensation benefits, which do not carry such extras. A graded return

to work may relieve financial pressures and allow injured employees to

concentrate on their recovery.

return to familiar surroundings, particularly if it is in the pre-injury job -

a worker who is able to quickly return to their normal work environment

requires less adjustment.

retraining in other tasks required by the organisation - an injured worker

with new knowledge and skills gives both the employee and employer

more flexibility in work tasks.

Benefits to employers

As discussed previously, injury management programs minimise workers‘

compensation costs for the employer. Some other benefits of injury

management to the employer include:

supporting the injured worker and facilitating their recovery affects the

morale of the whole workforce

reduced need to use other workers to cover for the injured worker‘s

absence, resulting in less overtime and associated costs


68 © NSW DET 2008

flexibility of human resources - if the injured worker is retrained they

can be used in areas other than their pre-injury job.

ensuring the investment in the employee to date is not lost

Return to work programs In the same way that insurers have legal obligations, so do employers. The

employer must develop a written Return to Work (RTW) program that is

consistent with their insurer‘s IM program.

Employers must display this RTW program at the workplace. This program

outlines the general procedures that will apply for all workers if they are

injured at work, and the steps taken to provide rehabilitation and suitable

duties.

The program must address a series of rehabilitation commitments and

procedures. These commitments and procedures include appointing a RTW

co-ordinator, where required, providing suitable duties, consultation

between the employer and the worker, identifying accredited rehabilitation

providers and a dispute resolution process. The RTW program must be

developed in accordance with WorkCover guidelines and must be developed

within 12 months of becoming an employer.

The return to work plan

It is the duty of the employer to prepare the RTW plan. When an accredited

rehabilitation provider has been contracted, then they may prepare the RTW

plan for the injured worker. The plan relies on information from the treating

doctor/s about activities (suitable duties) to provide the worker with a safe

and durable RTW plan.

It is extremely important that the employer‘s RTW program and RTW plans

comply with the guidelines set down by WorkCover.

More information on Sec 38 & 40 can be gained from WorkCover‘s Guide

to Injury Management and Workers‘ Compensation.

Workers‘ compensation and rehabilitation are very technical and complex

areas to manage. The RTW co-ordinator must handle each case on its own

merits, as every case will be different.

Who is the return to work co-ordinator?

The key person in the management of workplace injury management is the

RTW co-ordinator. Their involvement, from the notification of the injury to

its final outcome, has an enormous bearing on the well being of the injured

employee, the success of the programs and plans, and the profitability of the

organisation. The RTW co-ordinator must be trained according to

WorkCover‘s guidelines.


69 © NSW DET 2008

The legal requirements for a return to work co-ordinator

In New South Wales, employers‘ Workers‘ Compensation premiums are

divided in two categories:

Category 1 is for large employers with a Basic Tariff Premium of more

than $50,000.00 per annum

Category 2 is for small employers with a Basic Tariff Premium of less

than $50,000.00 per annum.

If you are a Category 2 employer, you are not required to employ a

designated RTW co-ordinator.

On the other hand, if you are a Category 1 employer you must have a

designated RTW co-ordinator, and WorkCover must certify their

appointment.

The role of the return to work co-ordinator

The RTW co-ordinator plays the key role in managing injury management

and workers‘ compensation.

From the notification of an injury, the RTW co-ordinator should set in place

a series of accountable events, namely:

communicating with the treating doctor/hospital

communicating with the insurer

developing a RTW plan outlining suitable duties

communicating with the injured employee‘s family

completing all necessary documentation

communicating with the injured employee

communicating with accredited rehabilitation providers

communicating with relevant unions

regularly monitoring the progress of RTW plans

communicating with internal employees (supervisors/managers)

regularly monitoring the costs of wages and treatment.

When the worker is away from normal duties for more than seven days, the

worker must nominate a treating doctor, who will co-ordinate all aspects of

treatment and RTW management. The RTW co-ordinator will liaise with

the nominated treating doctor to determine the worker‘s fitness for work and

to discuss suitable duties. The doctor will specify any restrictions about the

hours worked and/or activities the worker can perform. The RTW co-

ordinator develops a RTW plan based on the instructions of the nominated

treating doctor. The worker and their supervisor must agree with the RTW

plan, so that everyone is clear about the duties the injured worker is required

to do.


70 © NSW DET 2008

If a worker unreasonably refuses to co-operate with their IM plan and their

employer‘s RTW plan, then the insurance company may reduce or stop their

weekly benefits.

We‘re now going to investigate the advantages in having a well functioning

injury management program, and how an organisation can prevent injuries

and accidents happening in the first place.

Confidentiality of injury management information

The employer and the RTW co-ordinator must manage all RTW plans in a

professional and confidential manner. They must ensure that information

regarding a worker‘s illness/injury is obtained with the worker‘s written

consent. The WorkCover Medical Certificate contains a section that gives

such consent for the nominated treating doctor to discuss injury

management with relevant parties.

All information is to be kept in strict confidence and should be stored

securely. Access to these records should be limited to personnel who have a

genuine need to know and only disclosed with the injured worker‘s explicit

consent.

Internal resources for return to work co-ordinator

Internal resources include:

the injured employee‘s immediate supervisor (or proposed supervisor in

the new position on suitable duties) who can suggest suitable duties for

the RTW plan

workplace engineers or maintenance employees who can design and/or

redesign work stations and any relevant equipment

health professionals such as OH physicians and the workplace nurse

who can help the employee meet their objectives; they can co-operate

with accredited rehabilitation providers or become part of the case

management team

OHS committee members and representatives who can also help select

suitable duties and communicate with the work force

union representatives who can communicate with members and resolve

disputes regarding duties allocation.

External resources for return to work Co-ordinator

There are a number of external resources available to the RTW Co-

ordinator. They include:

Accredited rehabilitation providers are the most prominent grouping in

managing ‗significant injury‘ cases. Usually they are multi-disciplinary

teams in health and allied fields such as:

OH physicians

OH nurses


71 © NSW DET 2008

physiotherapists

occupational therapists

psychologists

ergonomists

hygienists

The RTW co-ordinator or the insurer can engage a rehabilitation

provider or the injured employee may choose their own provider. Their

role is to assess the injured employee and the work site. From their

assessment they can then develop a plan for the RTW of the injured

employee.

Occupational rehabilitation service providers must meet certain

standards for accreditation and their activities are monitored.

Employers must nominate accredited providers as part of their RTW

program. They must help them develop expert knowledge of the

workplace, the current rehabilitation procedures, and capacity to

provide appropriate duties for an injured worker.

Employers may discuss referral to a rehabilitation provider with their

insurer or they may make direct referrals for assessment.

nominated treating doctor - can influence the early return to work of an

injured employee. It is important that the lines of communication are

kept open at all times.

insurer - manages the workers‘ compensation portfolio on behalf of the

employer. Their role is to advise and assist employers in establishing a

Workplace Injury Program, and ensuring employers are aware of the

program‘s requirements. They also vet the progress of the claim, and

agree to pay for services outlined on the injury management plan.

interpreter services - for employees of culturally and linguistically

diverse (CALD) backgrounds, these services are very important to assist

injured employees with their rights and obligations in workers‘

compensation and rehabilitation. It is not advisable to use family

members, friends or fellow employees as interpreters.

WorkCover Authority - provides a range of advice and programs in

relation to workers‘ compensation and rehabilitation, particularly setting

guidelines and overseeing the management of claims, including training

and employment programs to help seriously injured workers who need

additional assistance to return to work. These include:

o work trials, which are short periods of work experience with

a host employer, to help the injured worker develop work

skills and/or upgrade their physical fitness in a suitable work

environment

o formal retraining which is required by an injured worker

when they cannot return to their previous job, and they do not

have other marketable skills to find suitable employment


72 © NSW DET 2008

o financial assistance towards workplace, equipment or

modifications to assist an injured worker to resume their pre-

injury employment.

Rehabilitation providers usually apply for WorkCover assistance on behalf

of an injured worker. However, employers can apply for funding on behalf

of an injured worker to meet formal retraining costs and any workplace aids,

equipment or modifications. They must have relevant information to

support the request.

For example, under WorkCover‘s previous Job Cover Placement Program, a

new employer may have been eligible for a range of incentives when

employing a worker who has had a work-related injury. These incentives

included:

reimbursement of wages - employers received a subsidy of up to $300

per week for 12 weeks from their insurer to offset the cost of hiring and

training the new worker

premium exemption - wages paid to the new worker for the first 12

months of their employment were excluded from the calculation of the

employer‘s premium

second injury costs - if the worker suffered a work-related aggravation

or recurrence of their existing injury within the first 12 months of

employment, the employer was protected from the costs of the workers‘

compensation claim, and the employer‘s premium did not increase as a

result of the claim.

Incentive schemes are available, and change from year to year, so it can be

of benefit for an organisation to research these schemes.

The return to work process

All employees should know that if they are injured in the course of their

work, rehabilitation is part of their workers‘ compensation entitlement.

Management should advertise this through a Return to Work program, and

display a summary of the Workplace Injury Management and Workers’

Compensation Act in strategic locations at the workplace.

There are incentives in workers‘ compensation entitlements to encourage

employees to participate in RTW programs. If the employee chooses not to

participate in the RTW program, they may receive lower weekly benefits

and risk foregoing future compensation entitlements.

A RTW plan is most successful when the process starts as soon as possible

after an injury. The longer an injured worker has to wait for appropriate

rehabilitation, the less likely it is to be effective.

As covered previously in this topic, employers have strict timeframes for

reporting serious incidents and incidents to their insurer and/or WorkCover.

The employer must participate and co-operate with the insurer in developing

an injury management plan for every worker with a significant injury. This

plan will outline all the RTW activities and treatment services for an injured


73 © NSW DET 2008

worker. The insurer is responsible for contacting the worker, employer and

treating doctor (if required) within three days of notification for all workers

with significant injuries. The employer and the worker must comply with

obligations imposed on them under the injury management plan - the insurer

will tell them their obligations and potential penalties.

The worksite, not the home, is usually the best environment to help injured

workers recover fully, along with medical management. The RTW co-

ordinator and provider, when used, should continually monitor and review

the progress of the injured employees according to the plan. They can then

adjust the plan in consultation with the injured employee and the treating

doctor. Monitoring and reviewing will continue until case closure, when

they have achieved the plan‘s goals.

Not every RTW plan will have a successful outcome; depending on the

circumstances some cases will be closed and a new one started. For

example, an employee has surgery after an injury and returns to work on

rehabilitation, but needs further surgery due to complications from the first

operation. A commitment to return to work means exploring every avenue

for a successful result to the satisfaction of the injured employee, RTW co-

ordinator, insurer, providers and other health professionals.

Dispute resolution

Internal methods of resolving disputes

We can resolve disputes internally in the same way that we manage

industrial relations disputes. If an employee on a RTW plan is concerned

about some part of their plan, they will first contact their supervisor. If they

cannot resolve the issue, they can refer the matter to the RTW co-ordinator.

If the co-ordinator cannot resolve the issue by consultation with the

employee, they might refer to the insurer. All insurers have injury

management staff who can assist the worker and employer with disputes or

problems. The insurer can also clarify administrative matters such as

weekly wages benefits.

It is important to try to resolve disputes internally before seeking outside

help. We can call upon interpreters, treating doctors, rehabilitation

providers, unions and, of course, the RTW co-ordinator, who is the

keystone.

It is important to discuss issues and consult with only relevant parties, as

involving fellow employees and managers may be intimidating or

threatening.

In resolving disputes, the RTW co-ordinator should carefully choose their

words and terminology, and make sure they give clear explanations to avoid

misunderstandings.


74 © NSW DET 2008

External methods of resolving disputes

Injury management consultants - may be brought in when there is

disagreement over the suitability of selected duties offered by the employer.

These consultants are medical practitioners approved by the Workers‘

Compensation Advisory Council specifically for the purpose of reviewing a

worker‘s fitness for employment and the availability of suitable employment

at the workplace.

An injury management consultant‘s role is consultative, and not part of the

medical-legal process. Before reporting their findings they will contact the

worker‘s nominated treating doctor to discuss the situation, with the aim of

reaching an agreed course of action.

The treating doctor needs to be involved in the process, as their medical

certificate affects the insurer‘s decision about benefits payable. Restrictions

on the worker‘s activity will influence the suitable duties nominated in the

return to work plan.

Approved medical specialist - approved by the Workers‘ Compensation

Advisory Council to give an unbiased opinion when there are disagreements

on medical issues, including whether selected duties offered by an employer

are suitable or not. The worker, the employer or the insurer can use the

opinion of an Approved Medical Specialist to take action under the

Workers‘ Compensation Act 1998 in respect of payments of workers‘

compensation benefits.

Workers’ Compensation Commission - must sometimes make the final

decision in a dispute. This body replaced the Compensation Court in

January 2002, and is an independent statutory tribunal within the justice

system in New South Wales. The Commission provides a transparent,

flexible and independent forum for the appropriate, fair, just, timely and cost

effective resolution of workers‘ compensation disputes. It uses a system of

non-adversarial dispute resolution to directly involve the parties in an

accountable and accessible process.

The Workers‘ Compensation Commission has a President (who must be a

judge), two Deputy Presidents, a Registrar and Arbitrators, supported by

Approved Medical Specialists, who assess medical disputes for the

Commission, and other employees. The Arbitrators are legally qualified

and/or highly experienced in workplace injury management and are

responsible for trying to bring the parties to an agreed resolution. If this

does not happen, the Arbitrator then determines the case. The two Deputy

Presidents hear appeals from Arbitrators‘ decisions. The President also

hears appeals from Arbitrators‘ decisions and additionally determines points

of law.

For more information about the NSW Workers‘ Compensation Commission

visit their website www.wcc.nsw.gov.au

http://www.wcc.nsw.gov.au/


75 © NSW DET 2008

Prevention and workers’ compensation

Intervention

As discussed above, intervention is one of the best strategies to identify

hazards that have the potential to harm. For example, consider the

employee with the sore arm. They may have complained to their supervisor

that their work was causing them discomfort. They may have even reported

their pain/discomfort to the first aid attendant and received nothing more

than an arm rub and a pill for pain relief.

Continual reports of minor incidents, pain and discomfort are early warning

signs that something is wrong in the workplace. If these signals are

continually ignored, the employee may think that the organisation doesn‘t

care about its workforce or about OHS. The longer the problem is ignored

the greater the chance of alienating the employee, to the point where they

are absent from work.

Good management practice ensures:

the problem is identified - in this case, repetitive movement and its cause

assessing the likelihood and potential of risk of further injury

control strategies to eliminate or reduce the risk.

If an employee is complaining about a sore arm, we might look at work

organisation such as changing the workstation layout and rotating the

employees on the task. Poor identification, reporting and recording systems

and a lack of training and education of the workforce may ultimately lead to

increased claims for workers‘ compensation. When an organisation reacts

to workers‘ compensation claims, it may head towards crisis management

on two fronts: coping with the costs of their failure of ‗duty of care‘, and

coping with the losses associated with workplace injury management and

workers‘ compensation.

We have studied the impact of workplace injuries on workers‘ compensation

costs. Many employers have found that neglecting their OHS

responsibilities has resulted in increased workers‘ compensation premiums.

In recent years, the NSW Government has worked closely with stakeholders

in the workers‘ compensation scheme to evaluate additional incentives to

adopting appropriate OHS and injury management systems.

Improvement to injury management systems

When an organisation measures performance, it can discover if it is:

proceeding to plan

working within given guidelines

collecting and recording relevant data

working within control parameters


76 © NSW DET 2008

being effective in managing injuries and claims.

It is important to monitor, review and audit injury and incident

documentation in a timely manner. This should occur regularly and

systematically so that any changes are identified.

For instance, many organisations hold quarterly reviews with their fund

managers to discuss the status of the listed workers‘ compensation claims.

At these scheduled meetings, both parties exchange information on methods

to manage respective claims. New strategies can help improve the

management of a particular claim. An insurer may suggest at a meeting that

the employer use a ‗company‘ doctor, that is, a doctor who is familiar with

the organisation‘s work practices. This would mean that the injured worker

would be immediately examined, on site if necessary, rather than having to

find their own doctor. Note that the employer has the right to send an

injured employee to a ‗company‘ doctor, and the injured employee

maintains their right to attend their own doctor.

When reviewing the use of workplace accident report forms we must ask:

who completes the report?

who receives the report?

how will the report be used to develop remedial action to prevent further

accidents?

how will we ensure that remedial action is taken?

We can review the system to determine ways to make it more efficient.

Spot audits are sometimes used to ensure that the correct steps are followed.

These audits can pinpoint anomalies that we can address to improve the

system.

To summarise, legislation imposes certain time frames for reporting

workplace incidents and illnesses, and also imposes certain requirements

and timeframes for workers‘ compensation insurers themselves. Employers

and insurers must work together to implement injury management strategies,

according to WorkCover‘s guidelines and legislation. Any internal audit

should check compliance with these requirements.

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