Human Resources

Human Resources

1. Strategic Role of HRM

   • Human Resource Management- refers to the management of the total relationship between an employer and employee.
   • Strategic Role of HRM- is to ensure that the productivity of a business or its outputs per person can achieve its fullest potential because the employees of the business are effective and efficient in the way they go about their tasks.
   • The major strategic challenges for human resource management are: - Improving leadership development - Managing an ageing workforce - The increased role of technology - Ethics and corporate social responsibility - Increased contracting out (outsourcing) of employment

2. Outsourcing

   • Outsourcing- involves the use of third party specialist businesses. It aims to take advantage of the specialist-skills provided by them and to achieve a reduction in labour costs
     • Outsourcing is often used to obtain a superior service, better functional quality and a lower cost service than would be provided internally.
       • Major areas being outsourced in Australia (domestic outsourcing) are: - Property and facilities management - Financial processes such as payroll, admin support services etc - Human resource functions
         • CASE STUDY: McDonald’s- Mcdonald’s australia outsources a company called SafetyWorks to help comply with workplace health and safety requirements. This ensures all stores are better equipped to meet legal mandates and safe work practices.
   • - Human Resource Functions
     • Outsourcing allows firms to focus more on their core business as they grow, while experts in human resources assist by planning for growth, development and management of staff during this phase.
   • Using Contractors - Domestic, Global
     • Contractor- is an external provider of services to a business. It may be an individual or a business.
     • Contractors are primarily used by most businesses to create costs savings or to access greater expertise and capabilities to improve competitiveness
     • Contractors are particularly used for processing functions. Although there are many successful examples of outsourcing, there are risks which increase as the proportion of a firm’s activities are outsourced. The major risks include: → Cost overruns (or cost increase) → Loss of quality → Difficulty coordinating activities → Difficulty monitoring quality → Performance in outsourced activities
     • Domestic Subcontracting - Very common today and avoids the need to employ additional ‘in-house’ staff, along with all the overhead expenses involved. Allows firms to focus their resources on essential business activities, leaving some of the detailed support or compliance related activities to experts, such as payroll management or order fulfilment
       • CASE STUDY: SEEK- Specific aim to connect hirers with candidates and candidates to job opportunities. Also provides insight into labour markets and provides insight into local labour markets and provides research into employment trends. QANTAS- Qantas uses domestic subcontractors to create cost savings, access greater expertise and improve its competitiveness. Qantas outsources its domestic voice, data and domestic services to Telstra. They have outsourced its data centres, its mainframe and midrange computing operations and project management to IBM.
     • Global Subcontracting- Many firms under pressure from global competition, and more recently the global recession, turned to offshore contractors in India and the Philippines to reduce costs. Outsourcing may take two forms: Process outsourcing - dominant form of outsourcing of repetitive, easily measured and documented workProject outsourcing - most commonly found in areas such as Human resources, marketing, design , IT and research. Involves much greater use of intellectual property and strategic business knowledge
       • CASE STUDY: QANTAS- Qantas uses subcontractors to create cost savings, access greater expertise and improve its competitiveness. For example Qantas contracts some maintenance jobs overseas to Singapore and New Zealand. They outsourced its IT applications support and maintenance to 2 companies in India.

3. Key Influences

   • Stakeholders- are any individual or group that has common interest in or is affected by the actions of an organisation. Stakeholders have common interest in the survival and success of the business
   • Types of Stakeholders
     • 1. Employers- are those who exercise control over employees, have responsibility for the payment of wages and/or salaries and have the power to dismiss employees
     • 2. Employees- are workers under the control of an employer. This control includes the workplace location, the way that the work is to be performed and the extent to which supervision will be exercised.
       • CASE STUDY: QANTAS- Qantas employs over 28000 full time employees including pilots, other flight crew, cabin crew and ground and administration staff.
     • 3. Employer associations- are organisations that represent and assist employer groups. They are usually respondents to the awards covering the employees of their members, and covering employers in the same or related industry. They assisted employers in formulating policies and processed logs of claims served on their members by unions.
       • CASE STUDY: QANTAS- is a member of the australian international airlines operation group which is affiliated with the Australian Chamber of Commerce and Industry. This employer association operates on a national and international level making sure that the concerns of Qantas are presented to government at the federal level and to the community at large
     • 4. Unions - are organisations that represent groups of employees on issues such as pay and conditions, health and safety, and job security. The role of the union is to support, advise and represent employees when making collective agreements and in wage negotiations and industrial conflicts, to advise them on their legal rights and responsibilities, and to act as a pressure group to highlight worker’ concerns.
       • CASE STUDY:The Transport Workers Union (TWU)- The TWU represents more than 90000 working men, women and owner-operators in Australia across a range of industries. The role of TWU is to promote the interests of its members in securing better pay, conditions and safety. QANTAS- Has a highly unionised workforce. The employees are represented by 18 different unions including the Australian Manufacturing Union, the Australian Workers union, The Transport Workers union, etc. Qantas trade unions have played a major role in controlling and resolving disputes and negotiating enterprise bargaining agreements
     • 5. Government Organisations- Over time they have significantly affected the industrial relations system as a result of their key roles as follows: Legislator, Employer, Responsible economic manager, Administrator of government policies on industrial relations, Representative of Australia in the international arena, in foreign affairs, trade and international labour matters.
       • Statutes- are laws made by federal and state parliament. For example, laws relating to employment conditions These statutes provide the framework for awards and agreements and the resolution of disputes and require employers to: Meet work health and safety requirements Maintain workers’ compensation insurance, provide all employees with superannuation, annual leave and long-service leave, ensure all employment practices in the workplace are free from discrimination on the basis of age, sex, physical or mental disability, marital status, family responsibility, pregnancy, union membership, political opinion, race or social origin.
         • Awards- are legally enforceable, formal agreements made collectively between employers and employees and their representatives at the industry level. Award Simplification- is the process of reducing the number of matters in each award and eliminating inefficient work practices
         • Federal Court Judicial Power- refers to the power of courts to interpret and apply laws. Is a judicial court Under the constitution, only courts have the judicial power to determine disputes about existing rights and to make decisions about these matters It handles cases related to industrial action and breaches of industrial laws, interprets industrial legislation, and is able to impose penalties for the breach of an award or order, and discrimination or victimisation under industrial and human rights legislation.
       • CASE STUDY: QANTAS- governments enact employment relations legislation. Key legislation governing employment relations for qantas includes the Fair Work Act, Corporations Law, Work Health and Safety Act and Workers Compensation. McDonalds- Australian Taxation Office - The ATO is interested in the Goods and Services Tax collected by McDonald’s Australia, this income tax paid by the company (and franchisees) and also the tax on the wages of employees. State Government- Around Australia, they collect payroll tax and administer WHS legislation through such agencies as Safe Work NSW.
     • 6. Society - In 1948, the General Assembly of the United Nations passed the Universal Declaration of Human Rights, recognising the importance of work to people’s lives and the need for fair and just conditions and rights for those at work. Although members of the community have no direct influence on the relationship between employer and employees within the workplace, it is widely accepted that workplace practices are reflective of behaviours that are upheld within society
       • CASE STUDY: McDonald’s- They have created employment for millions of people worldwide. They have greatly influenced eating habits in many places.

4. Legal

   • The Current Legal Framework - The employment contract creates obligations for both employer and employee and all businesses operate within a legal framework of common law and statute law, that is passed by federal and state parliaments in Acts. Legislation covers the nature of employment contracts and agreements; dispute-settling methods; protection of human rights in employment; and employer responsibilities for tax payments on behalf of employees. Changing community and worker expectations on social justice, safety and environmental issues are increasingly reflected in legislation and work practices.
     • Social Justice- involves businesses being responsible or behaving in a fair and ethical manner towards their employees, customers and the broader community. Employee welfare is provided for through WHS legislation and specific legislation such as the Superannuation Guarantee, under which all employers are obliged to pay superannuation contributions for employees, whether or not they are on awards. Has shifted from a strongly centralised industrial relations system to a decentralised and more fragmented system today, based on bargaining at the workplace level. Centralised Industrial Relations System- is a collectivist approach in which disputes are referred to industrial tribunals, such as the Fair Work Commission, for conciliation and arbitration. Decentralised Industrial Relations System-employers and employees negotiate wages and working conditions in the individual workplace, through collective or individual bargaining and without the involvement of tribunals.
   • The Employment Contract- is a legally binding, formal agreement between employer and employee. A written contract gives more protection to both parties than a verbal contract, as disputes often occur over contracts if working arrangements are not clear and it is one person’s word against another. Usually employment contracts will be of two forms: contracts of indefinite duration and contracts of a fixed term. Contracts of an indefinite duration: Most common type of employment contract and allow for the employee to remain employed by the business until either the employee or the employer gives notice that they wish to terminate the employment. Contracts of a fixed term: Are ones that expressly define a date or upon completion of a specific task
   • Common Law- is developed by courts and tribunals. Unlike statutes, it is not made by a parliament. Under common law, judges make decisions based on the facts of a case, guided by precedent. Both parties (employers and employees) have basic obligations in any employment relationship, regardless of whether it is in a formal or informal contract. The obligations of each party are reflected in the rights of the other party.
   • Minimum Employment Standards - They must be provided by employers and state minimum conditions for employees. 1. Maximum weekly hours of work 2. Requests for flexible working arrangements 3. Parental leave and related entitlements 4. Annual leave 5. Personal/Carers leave and compassionate leave 6. Community service leave 7. Long Service Leave 8. Public Holidays 9. Notice of Termination and Redundancy 10. Provision of Fairwork information statement
   • Award- is a determination that explains the legally enforceable minimum terms and conditions that apply to a business or industry. The contents of modern awards are as follows: Base pay rates, Conditions and requirements for different types of employment, Overtime and penalty rates, Allowances Leave and leave loading, Hours of work, Requirements for annual wage or salary arrangements, Superannuation entitlement Conditions and procedures for consultation, representation and settling disputes Outworkers, Redundancy conditions Modern awards have a ‘flexibility term’ that allows employers and employees to negotiate changes to some of the conditions in the modern award. These are called Individual Flexibility Arrangements.
   • Enterprise Agreements Enterprise agreements- are collective agreements made at a workplace level between an employer and a group of employees about terms and conditions of employment. Collective agreements- are made between a group of employees and an employer or group of employers.

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