Business management UNIT 3 AOS2B

define performance management

process used to improve business and employee performance through relating business performance objectives with those of individual employees.

what are the 4 performance management strategies

Management by objectives, Appraisals, Self-evaluation, Employee observation

define management by objectives

a strategy that aims to improve the performance of the business by clearly defining objectives that are agreed to by both management and employees

what is the 4 step process of management by objectives

1. define business objectives

2. Manager and employee collaboratively set individual goals that align with the business objectives

3. evaluate employee performance in terms of achievement of goals

4. provide feedback to employees to help them improve their performance and determine whether further training is required

define appraisals

the method by which the job performance of an employee is documented and evaluated against pre-determined standards

define self evaluation

a form of self assessment where the emplyoyees appraise their own performance against set objectives

define employee observation

involves gathering a variety of opinions an on individuals performance

what are the 4 types of termination

Retirement, Redundancy, Resignation, Dismissal

define termination

where the working relationship ends due to the employee leaving the business

reasons that may lead to termination

-tough financial times for the business requiring cost reduction

-developments in technology

-changing consumer trends

-ageing workforces

define resignation

when the employee decides to leave the business due to unhappiness with the job, moving location, receiving a better offer, wanting to change career, etc

entitlement considerations for resignation

-employees need to give a period of notice before they leave

-annual leave and long service leave must be paid out

transition considerations for resignation

-exit interview may be conducted where the manager asks questions about why the employee is leaving

-business may write a reference or recommendation that is positive

define retirement

Retirement is when a person chooses to leave a business completely and permanently with plans to no longer be part of the business

entitlement considerations of retirement

-employees must give a period of notice

-accrued benefits like annual and long service leave must be paid out

transition considerations of retirement

-to assist the major change in the persons life, business may offer transition services eg. counselling, superannuation or investment advice

-lifestyle planning

define redundancy

when an employee's job no longer exists, either because there is no longer a need for the job to be performed or because the business experiences financial difficulties

what are the two types of redundancy

voluntary and involuntary redundancy

entitlement considerations for redundancy

-redundancy packages: financial payment based on how long they have worked at the business, calculated based on wage and years of service

-employees are entitled to time off work to attend job interviews and look for new employment

any accrued benefits must be paid out

transition considerations for redundancy

-businesses must support employees as redundancy is a big change, doing this by providing counselling, career counselling, assistance in writing resumes, outplacement services and/or extra training to enhance their employability

define dismissal

when an employee is forced to leave the business for issues such as poor performance or serious breach of conduct

what are the two types of dismissal?

summary dismissal and on notice dismissal

entitlement considerations for dismissal

-employees are entitled to full payment for the notice period given

-employers need to comply with the unfair dismissal legislation to ensure they do not dismiss an employee for discriminatory reasons eg. absence due to illness or injury, union membership, race, age, sex, disability, religion, sexual preference

-any accrued benefits must be paid out, including annual and long service leave

transition considerations for dismissal

-business may offer transition services to employees going through dismissal

-support may be needed for other employees

what are the positives of employees involuntarily leaving

-culling of non productive employees

-reduction in costs eg. wages

-change in structure of the business

-removing of any employees that undertake serious misconduct at the workplace

what are the negatives of employees involuntarily leaving

-loss of talent

-decline in morale

-breakdown of effective teams

-increased pressure on performance of remaining staff

define workplace relations

area of business that manages the relationship between the employer and the employees with respect to issues related to wages, conditions of employment and workplace disputes

what are the 5 participants in the worplace

human resource managers

unions

employer associations

employees

fair work commission

who are human resource managers

responsible for managing the relationship between employees and the business

what are the roles of human resource managers

-represent the employer in negotiations of new wage agreements

-participate in the resolution of disputes

-implement agreements

-liaise with employer associations, unions and the FWC

who are employees

those that work in the business in exchange for remuneration, usually a wage.

what are the roles of employees

-work towards the achievement of business objectives

-voting on terms and conditions contained in a proposal agreement

-carrying out tasks in their job description and following company policy to avoid disciplinary action

-voting for or against industrial actions

who are employer associations

organisations that provide advice and support to employers to help them better understand their obligations in the workplace assistance where possible

what are the roles of employer associations

-assisting in disputes between the business and employees may include advising on workplace relations legislation or being a representative for employers during negotiations

-staying up to date with changes in law and offer support and advice on how to adapt to these changes

-help connect members that can gain a mutual benefit from eachother

-provide human resource services. eg. training and recruitment support

who are unions

organisations that aim to preserve and/or advance the wages and working conditions of employees and to protect their rights

what are the roles of unions

-negotiating new wage agreements on behalf of employees

-offer advice to employees to help connect members that can gain a mutual benefit from each other

-support and represent employees in disputes

-organise industrial actions (eg. strike)

who are the fair work commission

australia's national workplace relations tribunal. operates under the Fair Work Act to ensure that the rights and responsibilities of employers and employees are fulfilled

what are the roles of FWC

-set national minimum working standards

-establish Awards

-approve and monitor enterprise agreements

-respond to serious workplace issues

-act as an arbitrator/mediator in workplace issues

-approve or disapprove industrial action

what are employees wages and conditions determined by

awards, enterprise agreements, individual employment contracts

define awards

are legally binding minimum requirements for wages and conditions applying to specific industries.

who are awards created by

the FWC

define enterprise agreements

sets out the wage and conditions that will apply to the employees in one business or group of businesses. must comply with the NES and any relevant awards. once an agreement is reached by both parties, it must be approved by the FWC

define Individual employer contracts

legal agreement between an employer and an individual employee regarding their wages and conditions. must comply with the NES, relevant awards, etc.

what are some advantages of awards

-stability and predictability in the negotiation process

-businesses do not have to divert resources into negotiating agreements

-avoids conflict at the enterprise level that may arise from negotiation

-gives a level playing field for employment conditions

what are disadvantages of awards

-less flexible to the needs of individual businesses

-hard to build in individualised productivity incentives

-some strong unions can exercise a large degree of influence

-no incentive for local employer-employee relations

what are some advantages of agreements

-more flexible to the needs of individual businesses

-easier to build in individualised productivity incentives

-large incentive for good employer-employee relations

-can agree to a wider range of terms of agreement that is allowed under an award

what are some disadvantages of agreements

-less wage equality and transparency across an industry

-time consuming to negotiate agreements

-generally more expensive to implement than awards

-negotiation diverts resources from core business

similarities between awards and agreements

-both set wages and conditions for employees

-both comply with the National Employment Standards (NES)

differences between awards and agreements

-awards are set by the FWC whereas agreements are negotiated by the business and employees (or unions) and then approved by the FWC

-awards set the wages and conditions for an industry whereas agreements set the wages and conditions for a business or group of businesses

-agreements are more expensive for businesses as wages and conditions must be above the relevant award

define workplace dispute possible reasons they may arise

conflict between workplace participants as a result of a disagreement. may be due to negotiation of a new wage agreement, harassment/bullying issues, health and safety issues, job security, discipline issues, managerial policies

types of industrial action that can take place if a dispute escalates

strike- employees remove themselves from the workplace for a period of time

lockout- business refuses to let employees attend work

work ban- a ban placed on the type of work or piece of equipment

work to rule- employees only perform tasks listed specifically in their job description and dont perform any extra duties

what are the two types of industrial actions

protected industrial action- any action taken by either party to a dispute that has been approved by the FWC

unprotected industrial action- action taken by either party that had not been approved by the FWC

define the dispute resolution process

the steps taken that disputing parties follow in order to resolve a disagreement and reach a resolution

what are two common methods of dispute resolution

mediation and arbitration

define mediation

dispute resolution method where an independent third party will aim to facilitate a resolution between the two disputing parties. The third person is agreed to by the parties. Mediator only facilitated communication, and does not offer suggestions or make any decisions

define arbitration

involves an independent third party hearing arguments from both disputing parties and making a legally binding decision on the outcome. FWC in its role as an independent tribunal, runs arbitration hearings.

advantages of mediation

-disputing parties can come to their own agreement in mediation and are more likely to be happy with the outcome

-relationships can be maintained in mediation

-mediation is low cos and therefore more accessible

disadvantages of mediation

-no guarantee that the dispute will be resolved

-process can be time consuming that results in a delayed decision

-mediation does not result in a legally binding decision therefore dispute may not be resolved as parties do not need to honour the resolutions made

advantages of arbitration

-guarantees an outcome to the dispute

-outcome is legally binding and enforceable

-process is often quicker than mediation

disadvantages of arbitration

-often more expensive than mediation

-decision is taken away from the parties, meaning one or both parties may be unhappy

-relationships may be harmed

similaritites between mediation and arbitration

- both resolve disputes outside of court

- both save time and money

- both are private and confidential

differences between mediation and arbitration

- mediation helps businesses negotiate and agree whereas arbitration gives the final say to an arbitrator

- arbitration rulings are binding whereas mediation agreements only bind if both parties agree

- mediation has no imposed decision but arbitration rulings are hard to appeal