Business Studies Human Resources Management

Employment Contract

A legally-binding formal work agreement between an employer and an employee.

common law

law made by judges through their judicial decisions, not through specific statutes. Right and responsibilities of employees

statute law

legislation that has been passed through Parliament and the constitution. These laws covers the nature of employment contracts and agreements; dispute setting methods; protection of human rights in employment and employer responsibilities for tax payments on behalf of employees.

- minimum standards of employment

- minimum wage

- awards

- enterprise agreements

- individual contracts

Name 3 examples of statute law (legislation)

- Fair Work Act 2009 (Cwlth) - minimum wage

- Work Health and Safety Act 2011 (NSW)

- Superannuation Guarantee Act 1992 (Cwlth)

- Various Anti-discrimination legislations to do w age, sex, race, disability.

what are the duties of employers? (common law)

- Duty of care (WHS NSW 2011)

- Duty to pay the agreed wages (FWA 2009)

- Duty to provide work

What are the duties of employees? (common law)

- Duty to obey lawful instructions and commands

- Duty to work with skill/best ability

- Duty to work w/ care (i.e not be negligent)

- Duty to disclose relevant information related to workplace/employer

- Act in good faith, confidentiality and best interests of the employer

Fair Work Act 2009 (Cwlth) - Statute

- ensures minimum wage ($24.10) - not industry specific tho unlike awards which is industry specific.

- leaves (sick, annual, maternity/paternity)

- Ensure workplace agreements that undermine the safety net of FWA.

- Help employees balance work and life commitments by offering flexible working arrangements

- Enable fairness at work and prevent discrimination in the workplace•

- Achieve productivity and fairness by emphasising workplace-level collective bargaining between the employer and employees and their representative

Awards (modern awards) - Statute

are legally binding documents determined by the Fair Work Commission. They define working conditions, procedures for the resolution of disputes and set wage rates and non-wage entitlements for employment in a particular industry.

National Employment Standards - (Statute)

Maximum weekly hours of work

● Flexible working arrangements for parents who need to manage children and work

● Parental leave

● Annual leave

● Compassionate/Personal/carer's leave

● Community service leave

● Long-service leave - entitlement for additional days off of long-time workers. (10-7 yrs)

● Paid public holidays.

● Four weeks' notice for termination and up to 16 weeks redundancy payment

● Provision of a fair work information statement - PDF for 'knowing your rights'.

What are the other terms for 'Enterprise Agreements?

Agreements (Business-based agreements)

Certified Agreements - must be passed through FWC and weighed out w original award.

Collective Agreements

Advantages of Enterprise agreements

- Helps with acquisition (above the bare minimum (awards) --> competitive advantage/incentive for employees to stay

Disadvantages of Enterprise agreements

- must be negotiated between employer and employee w/conflicting interests

- only good for a limited amount of time

- Must be submitted to FWC for approval w/ risk of rejection

- Can take long time for final approval

What does industrial action/dispute/relations/legislations mean?

Employer/employee relationships

enterprise agreements - satute

collective agreements made at a workplace (enterprise) level between an employer and trade unions about terms and conditions of employment. Can be tailored --> strategic role of HR

4 types of employment contracts

part-time, permanent, casual, or fixed-term.

Part-time

Employees working a fixed set of hours per week but usually less than full time. They ay choose to work additional hours but are entitled to all the benefits of full time staff.

Casual

Employees employed by business for short periods of time. They must work minimum between 1-3 shifts. Regularity of employment is subject to employer's demands. Entitled to 1.5 times wage but do not receive holiday or sick leave.

Fixed term

Contracts which are sued by businesses that require the use of labour only for a specific amount of time. Both parties agree to this time period and can only be altered with mutual consent.

Permanent

Employee is provided with continuing employment and work between 35-40 hrs per week. Can go overtime. enitled to leaves.

Impact of employment laws on businesses

HR management must understand new laws and ensure they are compliant. HR must ensure that it keeps up to date with changes to labour laws in every country and in every state in which it has employees.

- Make sure all employees are paid correctly

Work Health & Safety Act 2011 (NSW), (WHS)

Covers the health and safety of employees, employers and self-employed.

- Employers must provide a safe system of workers compensation insurance

- All employees must be protected by worker's compensation insurance

(SIRA NSW) --> State Insurance Regulatory Authority or iCare

- Health and safety committees must be formed to ensure safety is maintained.

- Safe Work NSW inspectors may enter the workplace and undertake inspections

- Employees must abide by all safety guidelines and if they fail to comply, face penalties.

- Employers can be fined for breaches, corporations face fines up to $550, 000

- Employees can also face penalties due to negligence.

Impact of WHS on HR

To ensure safety is addressed, businesses will have to comply with these policies and procedures. This will also increase compliance costs, will reduce time and money lost due to workplace accidents and employees will feel safer, so motivation and productivity will rise, benefiting the business.

Workers Compensation Act 1987 (NSW)

Insurance to cover workers in the case of workplace injury.

- Prevent accidents

- provide financial assistance to workers who are injured

- compensate injured employees

- rehabilitate workers so they can return to work where possible

Anti-Discrimination

To prevent discrimination when a policy or practice disadvantages a person or group due to a personal characteristic that is irrelevant to the performance of work.

- Australian Human Rights Commission Act 1986 (Cwlth)

- Workplace Gender Equality Act 2012

race, sex, age, religion, physical/mental disability, martial status, carer responsibilities, political opinion, pregnancy.

Impact of Anti-discrimination and Equal Employment Opportunity (EEO)

- Committing to a workplace free from discrimination

- Having a code of conduct

- Making sure all policies and procedures are accessible to all employees

- training managers and staff in cultural diversity issues and ways to prevent or deal with discrimination

- appointing a grievance officer and specifying grievance procedures involving harassment

- regularly evaluating policies, workplace culture and action taken to resolve complaints.

Impact on HR

There are THREE main leadership styles:

1. Democratic

2. Autocratic

3. Laissez-faire approach

Autocratic (directive) approach

This leadership style is characterised by rigid decision-making with little/no participation of staff, limited flexibility and high levels of authority and obedience up the chain of command

Behavioural approach

these see managers as leading, motivating and communicating. This leadership style encompasses encouraging employee participation in decision-making, establishing effective two-way systems of communication, including feedback, and allowing for greater flexibility and negotiation of goals and tasks

Laissez-faire approach

managers exercise little control over their group, leaving them to sort out their own roles and perform their work without managing or participating in this process. This is effective for highly motivated and skilled teams.

Job Design

is the process of designing the content of a job and how it will interact with other jobs and employees, so as to motivate and retain an employee and achieve the business's goals

Job analysis

is an ongoing process, which is a detailed analysis of all the tasks, responsibilities, personal attributes and reporting relationships needed in a position

Job rotation

employees move from one job to another on a rotating basis. This leads to staff being multi-skilled and creates greater flexibility. However, this may still be repetitive and boring

Job enrichment

given more challenging tasks, responsibility, autonomy and decision-making power. However, this may over extend the employee, leading to burn out

Job enlargement

employees given additional tasks to increase variety and challenge involved in their position. However, this may overload an employee, and problems may arise if employees are not properly trained.

Advantages of specialisation

improve knowledge and skills, to increase output, to reduce errors and labour costs, and to control quality

Disadvantages of specialisation

may, however, bore employees and health issues can arise from repetitive movements

Advantages of internal recruitment

cheap relative to external recruitment, motivates all staff as they see development opportunities, and helps build employee commitment and loyalty

Disadvantages of internal recruitment

leads to rivalry for positions, and often there are a myriad of internal applicants who may become demotivated if rejected for the position

Advantages of external recruitment

wider applicant pool, prospective employees have new ideas, perspectives and skills

Disadvantages of external recruitment

lost productivity during induction, new employee may not fit the workplace culture/be accepted by employees

General skills

basic workplace skills; often transferable from one job to another e.g. the ability to work independently and communication skills. Businesses must choose individuals with general skills that fit their workplace culture

Specific skills

skills acquired through specialist training. Usually businesses seek such individuals due to skill shortages to fill gaps in their business. Employee poaching is frequently used to obtain the correct individua

training

aims to develop skills, knowledge and attitudes that lead to superior work performance in the job an employee currently holds

Development

is focused on enhancing the skills of the employee to upgrade their skills in line with the changing and future needs of the business. Such individuals usually aspire to fill managerial positions in the future

Performance appraisal can be either DEVELOPMENTAL or ADMINISTRATIVE:

Administrative: data/information collected is used in planning human resource functions e.g. rewards, benefits

Rewards - monetary

financial incentives provided to an employee for completing a task. These are often extrinsic e.g. incentive payments

Rewards - non-monetary

those rewards that do not have a financial value, such as flexible working hours. These may be either intrinsic e.g. the sense of achievement an employee derives from completing a job, or extrinsic e.g. holidays

Individual:

rewards given to individuals rather than groups - monetary or non-monetary. Useful when teamwork is not involved

Groups

rewards given to groups of individuals when performing tasks together. E.g. gain-sharing plans, whereby the benefits of success are reflected in rewards for teams, such as shares, cash bonuses or annual bonuses

Performance pay

is a system where a portion of an employee's (or group of employees') pay is handed over or not awarded unless certain results are achieved

Polycentric:

staffing approach that uses host country staffing with parent country staff in corporate management at its headquarters

Geocentric:

staffing approach that uses staff with the most appropriate skillset for a particular role and location, and builds a pool of managers with global experience

Ethnocentric:

staffing approach that uses parent-country staff in its organisation.

Negotiation

a method of resolving disputes when discussions between the parties result in a compromise and a formal or informal agreement

Mediation

the confidential discussion of issues in a non-threatening environment, in the presence of a neutral, objective third party. The third party is often a tribunal or government agency. This is a cost-effective method of dispute resolution

Courts and tribunals

all parties involved in an industrial dispute may take COMMON LAW ACTION and sue another for damages. Parties may also refer cases to the Fair Work Commission.

Conciliation

a process where a third party is involved in helping two other parties reach an agreement

Grievance procedures

formal procedures, generally written into an award or agreement, that state agreed processes to resolve disputes in the workplace. E.g. supervisor → middle manager, and so on. These help reduce the risk of an issue rapidly becoming a serious dispute

Arbitration

the process where a third party hears both sides of a dispute and makes a legally binding decision to resolve the dispute.

INDICATORS are performance measures that are used to evaluate organisational or individual effectiveness

These can then be compared to best practice businesses or internal divisions to determine weaknesses and strengths in a process called BENCHMARKING

Where Indicators are found

Indicators are gathered during HUMAN RESOURCE AUDITS, which are diagnostic tools used to evaluate HR policies and practices in order to identify problems and develop solutions in an attempt to rectify problems

CORPORATE CULTURE

is a series of values, ideas and norms that are shared by the people involved in a business

Corporate culture may be evaluated as an indicator of effectiveness by the 'internal process approach,' which encompasses elements such as:

A positive work climate, Team spirit, group loyalty and teamwork, Confidence, trust and communication, Interaction between the business and its parts

Purpose of Benchmarking

The purpose of benchmarking key variables, e.g. human resources planning and separation/termination rates, is to compare a business's performance in specific areas against other similar businesses or divisions, or against 'best practice' business. The business then initiates changes which foster improvement

Benchmarking usually occurs after a human resources audit, which may be performed externally or internally. Benchmarking may be undertaken in ways including:

1. Informal benchmarking

2. Performance benchmarking

3. Best practice benchmarking

4. Balanced scorecard benchmarking

1. Quantitative

2. Qualitative

Two types of data used for benchmarking

Quantitative

these demonstrates the actual effect of indicators in economic terms i.e. in terms of costs and profits e.g. variances in labour budgets, which reveal poor planning of staffing needs, higher unscheduled absenteeism, and so on

Qualitative

involves detailed feedback and research on key issues, which allows judgements to be made about changes in behaviour or quality of service provided. E.g. feedback from supervisors, consultative committees, customers and employees in organisational surveys provides useful insight into worker satisfaction, empowerment and customer service

Key Indicators of effectiveness

Staff Turnover, Absenteeism, Job Dissatisfaction, Lost Time Injury Frequency Rates,

STAFF TURNOVER

refers to the separation of employees from an employer, both voluntary and involuntary, through dismissal or retrenchment. It is often shown as a percentage of total staff numbers

ABSENTEEISM

refers to employee absences, on an average day, without sick leave or leave approved in advance

Job dissatisfaction

Stress

Internal conflict

High levels of absenteeism are very costly to business. High levels of absenteeism and lateness may indicate:

Occupational health and safety indicators are benchmarked internationally using a number of indicators, such as:

Lost Time Injury Frequency Rates:

lost-time injuries are events that result in a fatality, permanent disability or time of one day/shift or more lost from work. The formula is: Number of lost-time injuries x 1,000,000/Total hours worked in accounting period

Acquisition

the process of attracting and recruiting the right staff for roles in the business.

Development

the process of developing and improving the skills, abilities and knowledge of staff, through induction, ongoing training and further professional development.

Maintenance

the process of managing the needs of staff for health and safety, industrial relations and legal responsibilities, including compensation and benefits, of all staff.

Separation

the process of employees leaving voluntarily, or through dismissal or retrenchment processes

Recruitment

the process of locating and attracting the right quantity and quality of staff to apply for employment vacancies or anticipated vacancies at the right cost.

Employee selection

involves gathering information about each applicant and using that information to chose the most appropriate applicant.

Placement

involves locating the employee in a position that best utilises the skills of the individual to meet the needs of the business.

Job Enlargement

involves increasing the breadth of tasks in a job.

Job Rotation

involves moving staff from one task to another over a period of time in order to multiskill employees

Job enrichment

involves increasing the responsibilities of a staff member.

Job Sharing

occurs when two or more people share the same job.

Performance Appraisal

a process of assessing the performance of an employee, generally against a set of criteria or standards.

Fringe Benefits Tax

is a tax employers must pay on certain benefits they provide to their employees.

Workpace Bullying

a form of harassment involving unwelcome and uninvited behaviour that is offensive to 'reasonable' people.

Redundancy and Retrenchment

refer to employees losing their jobs, where the employee's job or work no longer needs to be done. It may be due to a lack of work, a restructuring in the business or being replaced by technology.

Unfair Dismissal

occurs where an employee is dismissed by their employer and they believe the action is harsh, unreasonable or unjust

Employer Associations

organisations that represent and assist employer groups.

Log of Claims

list of demands made by workers (often through their union) against their employer.

Trade Unions

are organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and working conditions of their members.

Statutes

are laws made by federal and state parliaments.

Modern Award

an industry or occupation based award, which covers all private sector employers and employees who perform work that falls within their scope.

Awards

are legally enforceable, formal agreements, made collectively between employers and employees and their representatives at the industry level. They are determined by an industrial court or tribunal and set out minimum wages and conditions of employees.

Award Simplification

is the process of reducing the number of matters in each award eliminating inefficient work practices.