AOS 2 - HUMAN RESOURCE MANAGEMENT

Employee engagement

the commitment that employees feel towards a business based on identifying with its values, vision and objectives and the way the business operates 

* **Benefits:** productivity will increase, lowered absenteeism, high job satisfaction

Human Resource Management (HRM)

The management of a wide range of responsibilities relating to the human (employees) function within a business in order to increase the efficiency of both employees and the business

how can HRM assist with the achievement of business objectives

- define HRM and business objectives

- HRM will ensure that a business has employed staff with relevant skills, ensuring appropriate employment agreements are in place and providing training, appraisals and motivation to employees on an ongoing basis

- By aligning employee objectives with those of the business, this allows both the business to grow and improve the likelihood of achieving their business objectives

Motivation

The willingness of a person to expend energy and effort in doing a job or task

Benefits of motivated employees

* Improved productivity - work efficiently  
* Strong culture
* Reduced staff absenteeism and staff turnover
* Achievement of objectives
* Higher customer satisfaction
* More engagement/new ideas & innovation

**THREE THEORIES OF MOTIVATION**

* Maslow’s Hierarchy of Needs
* Goal-setting theory (Locke and Latham)
* Four drive theory (Lawrence and Nohria)

Maslow’s Hierarchy of Needs

Representation of human needs in the form of a hierarchy

• lower-level needs must be satisfied before moving to higher level needs

• once a particular need is satisfied, the next level of need becomes a motivator for employees

Level in Hierarchy (top → bottom) - **Maslow’s Hierarchy of Needs (SESSP)**

1. Self-actualisation
2. Esteem
3. Social
4. Safety
5. Psychological

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* Once the level was satisfied the employee will be motivated by the next levels in the hierarchy
* Managers can identify where employees are on the hierarchy and implement strategies to satisfy the need to move employee up the hierarchy

Physiological

Basic needs such as water, food, air, shelter and other physical requirements

**HRM:**

* Satisfactory pay
* Job and income (wages or salary)
* not very motivating as it is an expected entitlement

Safety

need of security and protection from physical and emotional harm

**HRM:**

* Safe working conditions
* Job security
* OH&S, bullying policies
* Superannuation and insurance

Social

need of strong relationships, and belonging in peer groups

**HRM:**

* Friendly work associates
* Organised employee activities (parties, team dinner)
* Induction

Esteem

need of respect and recognition of achievements

**HRM:**

* Recognition & rewards (merit rewards)
* Promotions
* Job title and task responsibilities

Self-actualisation

Ultimate need of personal growth and self- fulfilment

**HRM:**

* Challenging work allowing for creativity
* Participative decision-making
* Opportunities for personal growth & advancement

Advantages - Maslow’s Hierarchy of Needs

* Allows management to develop an understanding of individual needs
* Provides managers a scaffold on how to motivate employees and the different strat
* Allows to increase motivation for all employees

Disadvantages - Maslow’s Hierarchy of Needs

* Does not account for variable (e.g: size of firm)
* People can have more than one need at a time
* hard and time-consuming to determine strat to target particular stages

Locke and Latham goal-setting theory

a theory of motivation that focuses on the process of setting and attaining goals 

5 Principles of Goal Setting (CCCFT)

* Clarity
* Challenge
* Commitment
* Feedback
* Task complexity

Clarity - Goal setting

setting clear measurable goals that link to the objectives and priorities of a business

• employee work will directly support and work towards the business being more successful

• allow for accurate measuring of their achievement and for rewards to be determined

E.g: achieving a number of sold products/service per month

Challenge - Goal setting

ensure that tasks will ‘stretch’ employees but not be too difficult and allow employees to receive feedback about their performance

• More challenging goals create higher levels of motivation / higher standard

• easy goals are demotivating

• Employees may be at different levels

Commitment - Goal setting

Commitment can be gained by:

• Manager setting goals collaboratively with employees (as a team)

• individuals setting their own targets

• would like to meet aim for per day, week, month

However, it is time-consuming

Feedback - Goal setting

• helps maintain momentum and keeps employee on track towards the goal

• help motivate employees as they understand how they are progressing

• Feedback should be constructive

• e.g: holding interim meetings/discussions of performance and sale levels

Task complexity - Goal setting

• providing opportunities for employees to improve and challenge their skills

• evaluating/comparing performance with target levels

• reward if objective is met but if not, provide training

Advantages - goal-setting theory

* motivate and improve their performance, thereby contributing to business objectives 
* Staff will perform at a higher standard due to their clear and specific goals, leading to a higher rate of productivity.
* Better relationships between management and employees, collaboratively set goals and provide feedback.

Disadvantages - goal-setting theory

* goals that are not challenging (or that are overwhelming) can become demotivating.
* Individual employee goals may clash with each other or with business objectives
* Employees may focus so intently on their goals that they ignore other aspects of their job.
* Failing to meet a goal could be detrimental to an employee’s confidence.

Four-drive theory

States there are four basic motivational needs that drive people’s emotions and behaviour

* the drives of each employee need to be accurately identified and met
* relative strengths of each drive varies and can change over time

four drives (ABLD)

* Acquire
* Bond
* Learn
* Defend

acquire - four drive

drive to gather basic and complex things such as necessities for survival and accomplishment/power

Strategies:

• Promoting employees internally rather than recruiting externally

• Develop a reward system and offering pay above industry standard for good performance

• Competitive pay

• Offering career advancement for high achieving employees

bond - four drive

driven to seek strong working relationships within the business, associated with respect and belonging

**Strategies**:

* Set up support programs
* Structuring work in teams
* Build a culture that values sharing
* Social gatherings
* Employee centred management styles

learn - four drive

drive to satisfy their curiosity and to develop an understanding of their environment

**Strategies**:

* Training and development to support growth and learning
* Interesting but challenging work
* Meaningful work with strong values

defend - four drive

driven to defend themselves, their family, friends, possessions, or accomplishments

Strategies:

• Have resolution processes in place / grievance procedures

• motivate staff through wanting to protect the business’ reputation, culture and vision against competitors

• open communication, ethical work practices

• Ensure performance evaluation are fair

Advantages - four drive theory

* The drives work independently, allowing management and employees to be flexible in the behaviours or strategies selected or implemented.
* adaptable to complicated environments or situations.
* improves behaviour, thereby improving performance and achieving objectives.

Disadvantages - four drive theory

* Too simplistic


* Drive to acquire can lead to comparison which can lead to demotivating people

Similarities of three theories of motivation - Hierarchy of needs & Goal setting theory

Both are based on intrinsic motivators (Maslow’s higher order of needs and, Locke and Latham’s challenging goals and commitment)

Similarities of three theories of motivation - Hierarchy of needs & Four drive theory

* Both require basic needs
* drive to defend is similar to need of safety
* drive to bond is similar to social needs

Similarities of three theories of motivation - Goal-setting & Four drive theory

* The drive to learn is similar to the goal-setting theory in that the employee would be challenged and learn from the ongoing feedback provided by the manager.
* Concept of achieving goals is similar to the drive to acquire (both sense of achievement)

Differences - Hierarchy of needs & Goal setting theory

* Maslow’s theory is based on a sequence whereas goal setting theory is not
* Goal-setting has a time frame when a goal is achieved whereas Maslow’s is ongoing motivation

Differences - Hierarchy of needs & Four drive theory

* Maslow’s theory is based on a sequence (must satisfy one level to move to the next one in the hierarchy) whereas 4 drive is not (act independently of each other)
* Maslow is based on 5 needs compared to 4 drives

Differences - Goal-setting & Four drive theory

* Individuals achieve one goal at a time whereas the business needs to provide opportunities to meet all drives in an individual
* The four drive theory is based on a range of innate drives that motivate individuals, whereas, Locke & Latham’s theory states the important attributes in goal-setting.

5 Motivation Strategies (PCTSS)

* Performance-related pay
* Career-advancement
* Training
* Support strategies
* Sanction stratagies

Performance-related pay (short-term)

where an employee receives a financial reward based on meeting or exceeding performance standards (short-term) (e.g: pay increase, bonuses, comissions)

motivational theories links:

• maslow’s esteem level

• drive to acquire

short term:

• considered an extrinsic reward

• encourages younger employees with minimum wages

long term:

• financial rewards become less important

• intristic motivation is needed instead (e.g: career advancement)

Advantages - Performance-related pay

• Can provide immediate motivation/productivity levels

• Rewards the best performer in the business (high job satisfaction)

• makes employees feel more recognised, increase morale

Disadvantages - Performance-related pay

* Generates a competition based culture
* A business may not be able to afford performance-related pay
* Not all employees motivated by pay

Career-advancement (long-term)

when an employee is given the opportunity to take greater responsibility in the business (long term)

benefits:

• Increased pay/remuneration - links to the drive to acquire, physiological level of Maslow

• Improved self-esteem - links to Maslow’s esteem level

• Challenge and experience for employee - links to goal-setting theory of challenge, self-actualisation level of Maslow, drive to learn

• Status - links to the drive to acquire

Examples of employee opportunities

• Job enlargement – making a job more challenging by combining various operations at a similar level (horizontal)

• Job enrichment – involves increasing depth of content as well as the degree of control the job holder has over their work, gains personal growth (vertical)

• Job rotation – broadens the knowledge an employee has and lessens the likelihood of disengagement (motivates)

Advantages - Career-advancement

* Helps business retain talented employees
* Motivates employees to quickly take on more responsibility in their workplace
* Employees can see a career path for themselves

Disadvantages - Career-advancement

* May cause resentment from those overlooked for promotion
* May create rivalries
* Difficult to promote all employees

Investment in training (long-term)

the process of teaching staff how to do their job more efficiently and effectively by boosting their knowledge and skills

Link to theories:

• four drive theory - drive to learn

• Show the business values them - Maslow’s social and esteem level

• feedback - feedback goal setting theory

short term:

• employees are valued and empowered → high job satisfaction/lower staff turnover

long term:

• employees who are highly skilled might leave for a better paying job

• therefore, provide job opportunities for employees

Advantages - Investment in training

* Immediate increase motivation when given opportunity to up skill
* Employee better skilled to complete their job tasks and duties
* job security for employees
* builds learning culture
* more capable workforce

Disadvantages - Investment in training

* Often expensive
* No guarantee the employee will remain in the business
* Demotivated if training-program inconveniences their work-life balance

On the Job Training

when employees need to learn a specific set of skills to perform tasks IN the workplace

methods of on the job training

• Coaching: provided by a supervisor or work colleague

• Role modelling: imitating the behaviour of a manager

• Apprenticeships: learning from an experienced co-worker

• Job rotation: broader experience and greater familiarity with business

Advantages - On the Job Training

• most cost-effective alternative, as no travel expenses or other costs are incurred

• familiar with environment, colleagues, and equipment required to do the job

• more intelligent and aware of the particular business operations occurring at the specific store

• Immediate feedback from more experienced colleagues is available

Disadvantages - On the Job Training

• The trainer may have to leave their own duties to carry out the training (decreases the rate of productivity and disrupts work flow as it requires such an interruption)

• Bad habits of older staff may be passed on to younger employees.

• The learning environment may be noisy, with distractions from other work activities.

Off the Job Training

when employees are sent out to a particular specialised training institution

Off the Job Training methods

* **Information presentation style:** lectures, material presented in a written/visual format
* **Information processing style:** E-training (online), allowing employees to complete coursework both while at work and in their own personal time.
* **Role play**: play roles on both sides to gain a greater understanding of a situation

Advantages - Off the Job training

* Availability of a wider range of skills and qualifications than those in the workplace
* provides networking with outside experts and specialists
* more effective with less workplace distractions

Disadvantages - Off the Job training

* May be too theoretical without access to workplace tools or equipment
* More expensive, with fees charged/ travel costs
* Lost working time while the employee is absent from the workplace

Support strategies (long-term)

The assistance provided by the business to help employees cope with difficulties that may impede their work performance (long-term)

strategies:

• Employee assistance programs

• Counselling/ Mentoring

• General managerial support

links:

• drive to bond

• Maslow’s safety and social need

Advantages - Support strategies

* Many forms of support
* help employees to develop meaningful professional relationships
* positively influence employee attitudes and help them in improving motivation

Disadvantages - Support strategies

* May be difficult to find reasons to support and encourage some employees
* Employees may become too dependent on the support service provided 
* Requires a business to have a positive corporate culture

Sanction strategies 

A form of penalty imposed on an employee for poor work performance (short-term)

Advantages - sanction strategies

* immediate motivation to improve their work performance
* quickly stops inappropriate behaviour of some employees

Disadvantages - sanction strategies

* Excessive emphasis on sanctions can reduce employee sense of belonging, and therefore has a negative impact on motivation
* May cause resentment in employees which may result in conflict between managers and staff
* Tends to act as only a short term motivator

Employee Development

the process designed to build up skills necessary for future work activities and responsibilities

Training needs analysis

diagnoses the current shortcomings and future challenges that need to be overcome through use of a training program

Levels of training needs analysis

* **Organisational:** training objectives should be concentrated 

**E.g:** a business changing its computer network and software applications would require a large-scale training program
* **Task:** Individual jobs and associated tasks required to perform those jobs are analysed to determine whether any specific skills are required for successful performance
* **Person:** Each employee is assessed to determine the type of training required. It results in training and development objectives being established.

Benefits of training (employee)

* Opportunity for promotion and self improvement
* Improved job satisfaction through better job performance
* Provides employees with challenge to learn new things
* Greater ability to adapt to and cope with changes

4 Performance Management Strategies (MPEE)

* Management by objectives (MBO)
* Performance appraisal
* Employee self-evaluation
* Employee observation

**importance:**

* employees work together to plan, monitor, and review objectives
* helps improve communication/contribution (e.g: performance appraisal)
* evaluates how effectively employees are fulfilling their responsibilities

MBO

a program where the manager and the employee collaboratively set clear objectives

1. Define organisational objectives: cover critical issues

2. Define employee’s objectives: key areas of responsibility

3. Monitoring of performance

4. Performance evaluation

5. Feedback: monitor and take corrective action

6. Appraisal: accomplishments are rewarded

MBO advantages & disadvantages

advantages:

- provides direction for both employees and business

- employees feel more valued and involved in goals

- improves communication

disadvantage:

- considerable paperwork involved

- time-consuming to set goals with managers and employees

Performance Appraisal

A performance appraisal is the process or method to measure an employee’s performance over a period of time

• used to report on the employee’s past performance and usually link directly to the objectives of the business or predetermined standards for employees in that role or position

Performance Appraisal - methods

• journal method, comparison method or critical incident method which provides information to management about employees with the potential for promotions or consideration for dismissals

• Targeted feedback after completing a task or project

• Rating scale (quantitative data)

• Critical incident method (performance)

  • information about significant incidents from observers with firsthand experience

performance appraisals - adv and dis

adv

- employees feel valued

- increase self-esteem of employees, increase self-morale

- improves relationship

dis

- time-consuming, hard for managers to communicate

- creates stressful environment for everyone

Employee self evaluation

where an employee assess their own performance related to predetermined objectives

• employees are assess their strengths and weaknesses and how they can improve their performance, assisting them to better understand their role in the business

• Ongoing documentation is important

Employee observation

where an employee's performance is evaluated by watching them in action

**Application:**

* 360 feedback from colleagues, supervisors, and subordinates
* using feedback from different stakeholders with direct contact with employee

Advantages - Employee observation

* Range of ideas and feedback
* Variety of opinions on the performance of employees
* comprehensive understanding of past and current performance

Disadvantages - Employee observation

* Time consuming
* Not always as valuable in assessing technical skills, or the achievement of objectives, as these may not always be fully understood by every participant in the process

4 types of termination (RRRD)

* Retirement
* Resignation
* Redundancy
* Dismissal

Retirement

when an employee decides to leave the workforce

Transition considerations: allow for gradual transition (e.g: reduce work hours), provide advice or counselling

Entitlements: Accrued benefits (e.g: annual or long service leave)

Resignation

the voluntary ending of employment by the employees quitting their job

• Entitlements

  • Payment for completed work and accrued benefits

  • Business is entitled to notice

Redundancy

when an employee leaves the business because their job no longer exists (either voluntary or involuntary)

usually occurs because:

• an employer is closing a business

• new technology is introduced

• business is relocating

Transition: outplacement services, training, career/financial advice

Entitlement: redundancy package/pay, notice, pay and benefits for work conducted, time off to attend interviews

redundancy package

Financial compensation and benefits

- includes severance pay, notice period, unused vacation days, and other entitlements

redundancy pay

a payment to the employees for losing their employment.

* stipulated in their employment agreement and is usually based on the amount of service they have given to the business

outplacement services

Organisations that specialise in redundancy and preparing employees to find work

* help write resumes for redundant employees, offer interview skills training and even find new employment opportunities

Definition / Advantages & Disadvantages - voluntary redundancy

employees make themselves redundant when given the option by their employer

**Advantages**

* Business’ productivity may potentially increase if the employee was ineffective at their job
* If the employee was constantly conflicting with others, corporate culture may improve

**Disadvantages**

* Loss of talent
* Cost of replacement / Impact on profit
* Decline in morale

Definition / Advantages & Disadvantages - involuntary redundancy

leaves the decision of the continuation of employment to the business

**Advantages**

* Reduction in costs (i.e. wages)
* Improving for the future
* Removing employee that was undertaking serious misconduct in the workplace

**Disadvantages**

* Loss of talent
* Decline in morale
* Increased pressure on performance of remaining staff
* Cost of replacement

Dismissal

when the behaviour of an employee is unacceptable and a business terminates their employment

Summary dismissal - when an employee commits a serious breach of their employment contract and can be dismissed immediately

On-notice dismissal - when an employee is not performing satisfactorily. They must give notice and an opportunity to improve their performance

• Transition: may introduce career transition services

• Entitlement: pay and accrued benefits for work performed

Workplace relations

the relationship between employers and employees in determining wages, employment conditions, and workplace disputes

5 participants in the workplace relations EHUEF

1. Employees
2. Human Resource Manager
3. Unions
4. Employer associations
5. Fair work commission (FWC)

Employees role (internal)

• Negotiation and voting on new agreements

• Take industrial action if required

• carry out their responsibilities

Human Resource Manager role (internal)

* Represent the employer in negotiation of new wage agreements and implement agreements (e.g: training)
* acts as a mediator between employees and and employers
* ensure legally binding safety net of awards are being met


* Liaise with employer associations, unions, and FWC

Unions role (external) - employee side

• Negotiation of new wage agreements on behalf of employees

• Advocate for employees, support and represent them in disputes

• Investigate breaches of law, discrimination laws and workplace safety law.

• Organise industrial action (e.g strikes)

• act as a provider of information for employees in regards to what their rights under this particular award entails

Employer associations role (external)

* Negotiation of new wage agreements
* Notifying and assisting employers with changes in legislation
* Advising or representing employers in workplace disputes

FWC role (external)

Australia’s independent workplace relations tribunal and those who make legally binding decisions

• creating awards for different industries / NES

• Providing a safety net of minimum wages and conditions for all employees (reviewed every 4 years)

• approve or disapprove proposed strikes (if approved, FWC needs to approve agreement when it is finally reached)

• checks to see if the agreement meets the BOOT before it is implemented

• hears the cases presented by parties and determine a resolution of workplace disputes

Better off overall test (BOOT)

* a test used by the Fair Work Commission to assess registered agreements and see if employees are better off compared to the relevant award

3 Federal Government bodies

1. **Fair Work Commission**
2. **Fair Work Ombudsman**: Promote compliance with the legislation through education, information and assistance
3. **Fair Work Division of the Federal Court of Australia**: resolve workplace issues in a less formal environment and deals with matters promptly and efficiently

4 Methods of determining wages and conditions of work NAEI

* National employment standards (NES)
* Awards
* Enterprise agreement
* Individual employment contract

NES

System for determining wages and conditions is set out in the fair work act 2009

* employee protection

11 NES

1. Maximum weekly hours
2. Requests for flexible working arrangements
3. Offers and requests in becoming a permanent employee
4. Parental leave and related entitlements
5. Annual leave
6. Personal/carer’s leave/compassionate leave
7. Community service leave
8. Long service leave
9. Public Holidays
10. Notice of termination and redundancy pay
11. Fair Work Information Statement (FWIS) and Casual Employment Information Statement (CEIS)

Awards

Legally binding documents that establishes the minimum wage and working conditions for employees who are in the same industry

- there are 122 industry awards and they are set and refined by the Fair Work Commission every four years.

Specifies:

• minimum wages, working conditions and overtime, holidays and leave, procedures for resolution of grievances, superannuation, annual leave