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Chapter 16: Role of human resources

Introduction
Human resources are the process of managing employees in a workplace. It involves:
o reviewing the goals of the business
o rewarding valued employees
o Working within the legal framework that regulates the employment relationship.

Human resource management
Human resource management -The process of managing staff within an organisation. It focuses on the relationship between the
employer and the employee.

By being proactive and adopting a long-term think approach, managers may seek to affect and improve a diverse range of human
resource issues within the business. E.g. policies and practices, employment performance review techniques and training. The
business must also develop appropriate performance review measures to examine the effectiveness and efficiency of their
employees.

The benefits of adopting a long term (strategic) role to human resources include:
o The development of a highly qualified workforce
o The employment of a workforce relevant to the organisational needs of the business.

Interdependence with other key business functions
The operations function work closely with the human resource to ensure that the business has recruited staff with the relevant
skills experience.
The human resource is related to marketing as staff must be motivated and skilled to develop products. It is also through
marketing that businesses are able to determine the skills required for employees to produce the desired product.
The human resource is related to finance as budgets are often established that allocate funds towards training and workplace
education issues. Human resources must also work within these budgets to provide for the needs for its employees.

Outsourcing
Outsourcing- When a company takes a part of its business functions and gives it to another company to complete.
Some businesses lack funds to employ specialist human resource managers to manage the role of employment relations..
Some reasons for outsourcing are that it:
o Provides the ability to access staff whose specialty is human resource management. They would have a better
understanding of issues and can give advice on the best strategy.
o Allows managers to on the core business operations, this means that it can focus on production and attending to the
needs of its customers.
o The decision can generate cost savings as this reduces the need to employ full time staff for human relations.

Some issues with outsourcing human resources are:
o There is the chance that the company which was chosen may lack an understanding of the key aspects of the business.
E.g. business culture.
o The key relationship between staff and their line managers must continue to be developed within the business to ensure
that the work on relationships still has to be handled.

Contractors
Contractors- an external provider of services to a business. It may be an individual or a business.
Independent contractors exist in a situation where an individuals employment by one employer is not ongoing and an agreed fee
is paid for the service. It is also known as contract for services. E.g. builders, lawyers and electricians. They must provide their
own insurance. They are subjected to no government legislation.
Employee- position of employment is ongoing and will not be terminated once a task has been completed. They are subjected to a
negotiated wage or condition. Insurance and protection are provided by the employer. They are subjected to government
legislation.
Contract of service- Exists where an employee offers his or her services to an organisation on a regular basis and is subject to the
lawful control and authority of the employer
The law regards an employee to be a person who is subject to a contract of service.

Foreign contractors
Using global contractors as an external provider of services. It allows the Australian business to access the use of labour, without
having to consider such issues as minimum labour requirements, and OH&S.

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Chapter 17: key influences
Stakeholders
Stakeholders need to be considered apart from the employer and employee. Each stakeholder seeks to protect and promote its
own interests. They include unions, employers, society, employer organisations, employees and government organisations.

Employers
Employer- the individual or organisation that pays others to work for its business. They are often the owners and take
responsibility in the organisations goals.
In large businesses:
o Managers are voted by, from shareholders to take on this responsibility and to consult with the owners to develop
strategies.
o Human resource departments are also hired. Human resource departments are a specialist unit in a business that has as
its main role the management of the issues involved in the employment relationship. Their roles would include:
work with other departments to recruit the appropriate staff
implement a range of training and development programs to cater for the changing staffing needs.

Employees
Employee- an individual who provides his or her skills to a business in return for a regular source of income.
They were traditionally just workers, but are now considered in the decision making process.
Family-friendly practices such as childcare centres and flexibility in working times have been initiated. Workers can now work from
home.

Employer associations
Employer associations- organisations that aim to promote the interests of employers within the business environment.
They lobby governments to develop policies that enhance the interests of the employer and consult with governments on changes
to key policy issues. E.g. the Business Council of Australia and NSW Nurses Association.
The Australian Council of Trade Unions (ACTU) lobbies the government for improved working conditions and wage increases for
Australian employees.
National wage case- where trade unions, employers, employer associations and the federal government provide arguments to
Fair Work Australia on the appropriate level of increase to the minimum wage.
Shop steward- The unions representative in the workplace. They act as the first point of contact between the union and its
members.

Government organisations
Government organisations- establish the legal framework by which employers, employees and trade unions coexist and operate
within the employment relationship. Terms such as the ones below are considered:
o Awards- a legal document that specifies the minimum working conditions that apply to all people employed in a common
industry.
o Working conditions- the non-wage features of an employees workplace contract.
o Certified agreement - an agreement that is negotiated between an employer and all its employees.
o enterprise bargaining- the process of negotiating an enterprise agreement
o Better off Overall Test- a test by the Fair Work Australia to examine whether employees will be any worse off if they sign
a new wage agreement.
o Industrial dispute- a problem that arises between an employer and either a group of employees or an individual
employee at a workplace.
o Conciliation- Used when Fair Work Australia offers suggestions to help resolve an industrial dispute.
o Arbitration- a process involving a commissioner hearing the cases put forward by both parties in an industrial dispute and
then making a decision, which is legally binding on both parties.

Some Government organisations include:
o Fair Work Australia- an organisation established under the Fair Work Act 2009 (Cth). Their primary functions encourage
the prevention and settlement of industrial disputes between employers and employers through conciliation and
arbitration.

o Federal Court of Australia- a government federal organisation that acts as an avenue for appeal regarding decisions
made by the Fair Work Australia. They can impose fines

o The Human Rights and Equal Opportunity Commission- enforce federal government legislation on discrimination in the
workplace


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o The Equal Opportunity for Women in the Workplace Agency (EOWA). - to promote equal opportunity for women in the
workplace and administer the Equal Opportunity for Women in the Workplace Act 1999 (Cth).


Key influences on human resources
Society- workplace practices are reflective of behaviours that are upheld within society. Issues such as discrimination and
harassment are becoming publicised. Businesses must act consistent with the views of society.

Legal- The employment relationship is subject to considerable number of regulations and laws. The government has established
the legal framework by which employers and employees are encouraged to coexist cooperatively.

o Employment contract- a contract in the Australian workforce between an employer and their employee. The
employment contract is based on the employee offering his or her services on a regular basis and being subject to the
lawful control and authority of the employer. An employment contract creates rights and responsibilities for employers
and employees including a safe workplace, minimum wage and anti-discrimination.

o Duties of employers
Duty of care- a businesss legal obligation to provide all its employees with a safe and healthy workplace. The
skills, knowledge and tools must be provided. It also includes warning employees of risks.

Duty to pay the agreed wage- the legal obligation to pay the employee the correct, legal wage. Employees in a
contract must be paid the amount in the agreement.

Duty to provide work- the responsibility of the employer to provide a constant source of employment to its full-
time and part-time staff. Employees must be given the opportunity to leave the business with financial
compensation

Duty of employees- employees must offer their labour to a business

Duty to obey lawful instructions and commands- the employee is expected to follow the instructions of
supervisors and senior management. These instructions must be lawful.

Duty to work with skill- the employee will perform the task to the best of his or her ability.

Duty to disclose relevant information- employees need to provide the employer with information that will
affect their performance.

o Regulating the relationship between employers and employees
It is the role of industrial tribunals and organisations to ensure that stakeholders in the employment relationship
follow the rules and regulations outlined in this legislation.

o Minimum wage rates
A minimum wage - an employees minimum rate of pay for hours worked. Fair Work Australia is responsible for
ensuring that employers and employees cannot agree to a rate of pay that is lower than the normal.
Minimum wages are generally determined once per year by a specialist Minimum Wage Panel of Fair Work
Australia. They differ for adults according to experience and qualifications.
The current national minimum wage is $15 per hour or $569.90 per 38 hour week (before tax).

o Awards
Awards - legal document that outlines the minimum wages and working conditions for all employees working in
a particular industry.
They are established through negotiations between employers and associations.
Under the Fair Work Act, parties to a wage agreement may apply to Fair Work Australia to have the award
changed.

o Agreements
Agreements - a system that aims to meet the needs of individual businesses and their employees. E.g. certified
agreements and Australian workplace agreements.
Certified agreements- known as enterprise agreements are exclusive to a business and its employees.

o Types of employment contracts
Part time employment-an employee working a fixed set of hours per week, but usually less than those of a full-
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time employee. They are entitled to all benefits on a pro rata basis (the proportion of hours)

Permanent employment-a person who is provided with continuing employment within the organisation. They
work between 35 to 40 hours a week. They are entitled to four weeks holiday per week, 1.1 weeks leave and can
be given overtime for working more than the required amount.

Casual employment-employees employed by a business for short periods of time. They must work for a
minimum of between one to three shifts. They receive no holiday or sick leave entitlements. The employer can
choose when they work.

Fixed term contracts- the use of labour for only a specific period of time. Both parties are in agreement to this
time period.

o Occupational health and safety and workers compensation
Occupational Health and Safety Act- The Occupational Health and Safety Act 2000 (NSW) establishes the rights
and responsibilities of employers in the workplace in regards to employers and employees.

Workers Compensation Act and Workers Compensation and Workplace Injury Management Act- The Workers
Compensation Act 1987 (NSW), Workers Compensation and Workplace Injury Management Act 1998 (NSW)
govern the process of employees gaining financial compensation for injuries sustained at work.

Anti-discrimination legislation- anti discrimination laws such as Sex Discrimination Act 1984 (Cth), Racial
Discrimination Act 1975 (Cth), Human Rights and Equal Opportunity Commission Act 1986 (Cth) and the
Disability Discrimination Act 1992 (Cth) prohibit discrimination in the workplace. The Human Rights and Equal
Opportunity Commission protect the interests of the employee.

Economic
o Economic cycle
Business is the fuel that drives production, price changes, employment and our standard of living. The level of
economic activity in an economy is primarily determined by the level of consumer and business spending.

Employment is fundamental for all economies. If employees are confident about job security, then there is an
increased willingness to spend more of their income on consumer goods. This demands more labour as more
goods and services need to be produced.

o Impact of inflation
During periods of wage negotiations, employees will seek higher wages from employers due to inflation. This
leads to increases in the costs of production of any business. Workers would need to be sacked making staff
needing to increase their workload.

o Globalisation
Globalisation -the integration of the worlds economies into a single market where goods and services can be
traded with ease.
Due to more competition, workers are retrenched when their services are no longer needed.
Employees need to receive their legal entitlements if they are retrenched and workplaces must be free of
discrimination and harassment.

Technological
o Technology seeks to improve the quality of products and the efficiency with which they have been produced.
Positive aspects of Technology Negative impacts of technology
allows the business to develop more efficient
production techniques
fosters teamwork whereby staff become
mentors to colleagues through the process of
learning the new technologies
encourages the employee to deliver the
product/service in new and improved way
loss of employment as technology itself
employee resistance to change as the workforce
becomes reluctant to learning the use of new
technology
reduced employee morale as the workforce feels
their positions are less valued.

o Recent data has shown that the manufacturing sector is declining rapidly.



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Social
o Today, there are more multicultural workplaces and more working woman.
o Many employees want to achieve a balance between work and family.

Changing work patterns
Women now account for a greater proportion of the Australian workforce and are under-represented in
positions of power.
Technological developments have facilitated the considerable decline in employment in Australias
manufacturing sector.
There are fewer unskilled jobs available within the market.

Living standards
Less educated people, who lack skills and qualifications, may often be employed in industries with wage
rates that are low.
Many would be scared to challenge their employers for fear of losing their jobs.

Ethics and corporate social responsibility
CSR- the continuing commitment by companies to behave ethically and to contribute to economic development, while improving
the quality of life of the workforce and their families, as well as the local community and society at large
Stakeholders apart from shareholders include employees, customers, suppliers, community organisations and local communities.
Examples of CSR include investing in community projects, supporting research initiatives and adopting environmentally friendly
products.

How does human resources relate to CSR?
It enhances the reputation and standing of the business and may be used to promote recruitment of staff for the business.
Strategies to promote CSR within the workforce includes:
o promote effective affirmative action and anti-discrimination programs
o encourage staff to volunteer their time to participate in community-building activities.
o develop initiatives that reduce the businesss impact upon the environment


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Chapter 18: processes of human management
Introduction
Employment relations- the function that deals\ specifically with the relationships between the employer and the employees of
the business
The role of employment relations is to provide the business with the workforce that it requires. They also aim to find, attract,
develop and motivate the people who can provide services the business needs.

The human resource cycle
Human resource cycle- Acquisition, development, maintenance and separation of employees. It involves acquiring people with
skills for the job and the continued development of employees knowledge and capabilities. The cycle also involves providing
incentives for effective, reliable employees to remain motivated and stay with the business. There are 4 stages: acquisition,
development, maintenance and separation.

Acquisition
Acquisition- the stage in the human resource cycle that involves identifying staffing needs, recruitment and selection.
o In order to examine whether it has the appropriate staff to meet the firms needs, it needs to:
Identify the skills and number of employees required in the future
Analyse its existing workforce

o Identifying staffing needs- If staff cannot cope with changes, more employees are needed.
The job needs to be identified and analysed and a job description (a written statement describing the duties
tasks and responsibilities associated with the job) needs to be created.
A job specification (Written statement describing the key skills, experience and qualifications needed for a job)
must be made after.

o Recruitment- To accumulate a pool of potential candidates for a job. It is from this pool that the business must make its
selection. The business can fill a vacancy by recruiting applicants internally (from existing staff) or externally (from
outside the business).
Existing staff could receive a promotion, resulting in other staff to improve their performance.
The business can advertise externally for job applicants through methods such as:
outsourcing to private employment agencies
interviews on university campuses,
Trainee positions may be offered to HSC students to complete cadetship courses.

o Selection- A screening process in staff acquisition. The information gathered about job applicants is reviewed and the
most appropriate applicant is chosen. The individuals are assessed on their ability to interact with each other.The
process may involve:
Interviews
Application forms
written tests, such as mathematics or English

Staff development
Businesses need to develop the skills and capabilities of its staff to maintain its competitive advantage. Each business has different
cultures.

Induction a procedure which introduces the new employee to the business. It allows them to become familiar with the workings
of the firm.

Training
New employees should feel they know where they fit in and where the business is headed; that is, its goals. This enables them to
feel secure.

Training- any activities aimed at improving an employees present and future performance in the workforce. Some methods
include on-the-job training (traineeships, apprenticeships) and off-the-job training (TAFE and university courses).

Development
Development- involves preparing employees for future responsibilities within the organisation due to a change in the businesss
strategies or a growth in its size or market share.

Performance appraisals -A formal assessment of how well a person is working the persons strengths. It provides a basis for such
matters as future training needs, pay rises, promotions and possible further development.
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Training and development results in increased motivation of employees, greater business flexibility, and improved use of
technology and innovation.


Maintenance
Maintenance of databases
A database is used to maintain the records of a business, including its employee information.
A skills inventory is a database that contains information on the skills expertise and qualifications of the current staff. The
advantage of this register is to be able to call up or search for specific information when needed.

Maintenance of human resource staff
Staff can be maintained through:
o providing the working conditions and work environment that motivate staff to be increasingly productive, gain
satisfaction from their work

If staff remain loyal and stay, then the business:
o Increases productivity
o Improves morale among workers
o reduce the level of absenteeism

Monetary benefits
In Australia, minimum wage rates and minimum working conditions are set out in an award. Some firms provide over-award
payments in order to gain benefits from their staff.
Wages- received are based on hourly rates of pay and may include overtime payments
Salaries- involve an annual rate of pay, divided into equal pay periods.
Remuneration packages - the total pay or reward to workers and managers for their labour services and may include both
monetary and non-monetary benefits.

Some benefits include monetary, non-monetary and intrinsic rewards.
o Monetary benefits may be paid:
According to sales for instance, a real estate agent will receive a commission
Based on an individuals output payment of piece rates for fruit picking
As bonuses these are often paid at Christmas time or at the end of the
Through a shared ownership scheme- pay increases and the incentive of workers owning part of the business.
As fringe benefits examples are a company car
o Non-monetary benefits- greater job variety, more flexible working hours, increased status in the job or community, being
allowed to manage yourself or access to an employee-subsidised cafeteria.
o Intrinsic rewards- A reward that comes from within the person. In the case of employment, it could be the feeling of
satisfaction that comes with doing a job well.

Many people negotiate conditions in their contract with their employer. Some of the common benefits are:
o four weeks leave with full pay after working one year in the same job
o Australian workers on awards are entitled to 17.5% loading on their annual leave.
o after working full-time for the same firm for a continuous period of 10 years people are entitled to long-service leave,
which is at least eight weeks pay.
o Employees are currently entitled to have an additional 9% of their annual wage or salary paid into a superannuation
account.

Seperation
Separation - the ending of the employment relationship. It may come from either the employee or the employer.
Separation may be voluntary or involuntary.
o Voluntary separation- Voluntary separation may take the form of retirement, resignation or voluntary redundancy.
Retirement- When an employee retires, the employee has decided to give up full-time or part-time work. People
may retire due to ill health, lack of motivation, or leisure activities.

Resignation- when an employee leaves their jobs for reasons such as a need for change in their lives or moving
interstate. The employee needs to provide the employer with notice of the intention to leave.

Voluntary redundancy- where their existing job is no longer required by the firm and may have been offered a
redundancy package
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o Involuntary separation-where management decide which employees will no longer be required.
Involuntary redundancy- the termination of employment due to the firm closing down or the job no longer
being required due to rationalisation, restructuring or new technology. The Employment Protection Act 1982
(NSW) provides a minimum scale for severance payments for all permanent employees under NSW awards who
work for an employer with more than 15 employees.

Dismissal- occurs when the employer terminates an employees employment contract due to the unacceptable
conduct or behaviour of the employee. It can be an instant or summary dismissal or a dismissal after a series of
warnings.
Instant or summary dismissal - the immediate termination of the employees contract without notice.
E.g. theft, drunkenness

Dismissal after a series of warnings - follow incidents such as continual lateness or failing to perform
the duties as required. E.g. lateness or failing to perform duties.
o Workers may be classified as on probation or temporary.
Probation- where workers are often hired and given a probationary period of approximately 312 months to
prove themselves.

Temporary- those employed for short periods of time to replace an absent worker. This could be for one day or
several months.


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Chapter 19: strategies in human resource management
Introduction
Management should, however, seek to develop strategies that encourage and promote an effective and rewarding relationship
between staff and the business. Management should, however, seek to develop strategies that encourage and promote an
effective and rewarding relationship between staff and the business.

Leadership style
Leaders make decisions, develop strategies for the development of the business and interact with employees.
Leadership style - the manner and approach in which leaders of a business interact with staff. This is based on 3 factors:
o providing staff with directions
o implementing plans and organising staff
o motivating staff in a manner.

Types of leadership style
Kurt Lewin, a business theorist identified 3 styles of leadership, authoritarian, participative and Delegative.
o authoritarian leadership- Managers lead, based on the view that they are responsible for telling their employees what
they want done and how to accomplish the task. Employees cannot contribute to the decision making process. Decisions
must be made quickly.

o Participative leadership- Also known as democratic leadership. Participative leadership involves the leader including one
or more employees in the decision-making process. Employees are consulted about what to do and how to do it. They
encourage employees to become empowered.

o Delegative leadership- Also known as free-rein leadership. The leader allows the employees to make decisions.
Employees have the relevant knowledge and skills to make the decisions. Managers trust the ability of employees to
make the right decisions.

Job design
Job design - where managers develop and specify the work activities of individuals or groups within the business environment. It
involves the process of determining the type of tasks an employee needs to complete.
The objectives of effective job design seek to meet the needs of the business and the employee. The task must allow the
employee to work to achieving the objectives.

Job satisfaction and enrichment must be considered when designing a job.
o Job satisfaction - the extent to which employees are satisfied working in their current position within the business, while
job enrichment seeks to make use of employees talents and abilities within the workplace. It can be achieved through
job rotation.
Job rotation Where an employee is moved through a variety of tasks so as to increase their individual skill
development and minimise boredom associated with repetitive tasks.

o Job enrichment the extent a business develops tasks with the abilities of existing staff in mind. Job enrichment reduces
the boredom associated with many types of work.

Recruitment
Recruitment- where management seek to employ an individual for a vacancy that exists within the organisation.
Recruitment may be completed internally or externally.
o Internal recruitment -occurs when the position is filled by existing employees within the business.
Advantage: Incentive for staff to improve their performance, promotions as seen as a reward for effective work,

Disadvantage: Staff overlooked for the position may lose motivation

o External recruitment -occurs when the position is filled by an individual who has not yet worked for the business.
Advantage: Business is encouraging new ideas, new employees are not aware of existing issues.
Disadvantage: May take time to settle in, resentment from existing staff.

Some issues for the business to consider in the recruitment process are:
o The need to replace staff- management must consider if it able to spread the workload over existing employees. It may
lead to up skilling current employees and may save costs.

o recruitment firms it allows greater degree of expertise to be used in the process


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Training and development
Training and development- the means by which a business is able to provide its employees with an avenue to develop and
enhance their knowledge, skills and understanding of various activities related to the operations of the business.

Training may be informal or formal and it allows employees with an opportunity to acquire the skills and experience needed.
o Informal training -When an employee is either shown or modelled the correct skills through the use of a coach or
mentor, or learning the work on the job.

o Formal training -When an employee takes on a role similar to students within the organisation and are shown how to
apply themselves to the new operations of the business, then later assessed on their level of understanding.

Induction
Induction - the process of providing new employees with the knowledge and skills necessary to ensure they are familiar with the
organisation and day-to-day operations of the business
o Employees are given some history, company policies, work rules and a code of conduct.
o Employees are notified of leave arrangements, starting and finishing times, dress codes and union membership and
grievance handling procedures

Performance management
Performance management - the process of recognising the efforts and contributions of employees to their work.
It involves an ongoing process of communication between a supervisor and an employee. This communication process involves:
o the clarification of expectations
o the setting of employee workplace objectives
o providing feedback
o evaluating employee performance.

Some benefits of performance management are:
o the employee has an improved understanding of their role and what needs to be done.
o the employer is able to identify any problems earlier.
o performance review and improvement allows the employee to be aware of their personal goals.

There are 3 stages to performance management:
o Planning- this is focused on goal setting. Expectations are developed between the employer and the employee regarding
tasks. Goals are established between the employer and employee, but they must be realistic.

o Checking in- regularly observe an employees performance to provide feedback. This improves communication between
the management and employees and employee motivation through recognition and rewards.

o Assessment- process of measuring the employees performance against the objectives. They discuss employee
accomplishments and examine results against business and industry benchmarks.

Rewards
Rewards motivate all employees to work to their potential and cooperate with each other to achieve the goals of the business.
Some rewards are a legal entity such as superannuation, sick and annual leave.
Rewards can be financial or nonfinancial.
o Financial- additional monetary payments that are given to employees and are beyond the employees minimum legal
entitlements.

o Non-financial- non monetary benefits associated with the job itself such as fringe benefits, status-related benefits and
intrinsic rewards.

Individual or group.
Rewarding performance based on group achievement has benefits and negatives:
o Benefits
encouraging a greater sense of team work
employees become more motivated

o negatives
not all employees may apply equal effort
employees may have different personal goals
conflict may occur within the group

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Performance pay
Performance pay -the process of linking part of an employees income to their performance at work.
This concept recognises that employee motivation comes from financial benefits.
There are advantages and disadvantages of this concept:
o Advantage
Performance may improve as employees work more effectively.
it encourages unmotivated and inefficient individuals

o Disadvantage
the performance of employees may be difficult to measure for some jobs.
some employees may simply seek non-financial rewards.

Global
Cost, skills, supply
More companies are entering international markets by exporting their products overseas.
Access to a cheaper workforce that possesses the required skills will be a key consideration for a business.
The ability of labour to learn new skills will be affected by the countrys education system.

Workplace disputes
Dispute resolution processes
It depends on the willingness of stakeholders to cooperatively work together to reach a settlement where all parties are satisfied
with the final outcome.
The interests of employers and employees conflict at many times. Employers will seek to use the services of labour at the lowest
possible cost, while employees will attempt to gain the best possible income and working conditions.
Grievance- a dispute between parties.
Grievance procedures- the rules and procedures that employees, unions and employers must follow in order to resolve a dispute.

A grievance procedure policy:
o provides a clear outline of the issues
o illustrates the correct and appropriate processes when raising a complaint
o provides a mechanism that can be used to achieve a quick resolution of disputes

Negotiation
Negotiation- the first stage in the resolution of a dispute, it involves a discussion between both parties in an attempt to resolve
the dispute.
Collective bargaining - negotiations over workplace disputes within an organisation.
An employer association may also be called on to assist the employer with negotiations.

Mediation
Mediation- Occurs where an independent party with no ties to either stakeholder is asked to assist the conflicting stakeholders to
reach a settlement.

An independent party with no ties may assist the conflicting stakeholders to reach a settlement.

Conciliation
Conciliation - when the Fair Work of Australia acts as a mediator and offers suggestions in a dispute to resolve the problem.
While all parties must make every reasonable attempt to reach a settlement, the conditions of the agreement are not legally
binding.

Arbitration
Arbitration - the final stage of the dispute, it Involves a commissioner hearing the cases put forward by both parties in an
industrial dispute and then making a decision, which is legally binding on both parties.
The decision is legally binding on all parties.
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Chapter 20: effectiveness of human resource management
Indicators
An effective human resource management function is one where management and employees work well together in their efforts
to achieve the goals of the business.
The effectiveness of the relationship can be examined from perspectives such as, corporate culture, worker satisfaction, changes
in staff turnover, benchmarking in key variables, absenteeism, level of staff turnover and accidents.

Corporate culture
Corporate culture - the culture within an organisation. It relates to the values and beliefs within a business.
An effective corporate culture is one that is believed, demonstrated and acted upon by management and employees.

Benchmarking key variables
Benchmarking - the process of measuring an employees performance against established standards.
If employees are unable to meet performance goals on a regular basis, it will be clear that management must examine why this is
occurring.


Absenteeism
Absenteeism -employees being unable to attend work for reasons such as illness or family responsibilities.
Absenteeism is costly as it means that an employees work is not done. This places additional demands on existing staff and may
cause even greater hostility within the workplace.


Changes in staff turnover
Staff turnover - the rate at which employees leave a business.
A high level of staff turnover caused by voluntary separation is indicative of poor employment relations within a business.


Level of disputation
Obviously, the more disputes there are in a workplace, the less effective management is in managing the employment relations
function.
Employers would need to examine why the disputes are occurring and rectify the practices that cause disputes.


Accidents
All workplaces across Australia must be aware of potential hazards. Effective human resource management ensures that
occupational health and safety within a business is paramount.


Worker satisfaction
Worker satisfaction - whether employees are happy and contented and fulfilling their desires and needs at work.
Satisfied employees often work more efficiently and value the organisation that they work for