Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
2013
Business
Management
Privatisation: Selling public sector (government businesses) to the private sector. E.g. Qantas, Commonwealth Bank, Telstra
Business Environments
Internal environment: factors intrinsic to an organisation that can influence change, over which management has control over.
It includes: Owners/shareholders, board of directors & management; employees; organisational structure; corporate culture.
Operating Environment: External factors that directly interact with the business and its operations. It Includes: Customers,
Competitors, Suppliers, Regulatory Bodies, Trade Unions, Lobby / Pressure Groups, Financial Institutions.
Macro Environment: the range of factors that can influence the operation and performance of an organisation, over which it has
no control. It includes Economic, Government/Political, legal, technological, Global, Social and Environmental
Economic the level of impact on a business by economic changes such as a depreciating dollar
Governmental/Political change in government brings about changes in policies. E.g. Liberal government policies
Legal organisations have to comply with laws and regulations in areas such as OH&S, Equal employment opportunity
Technological Businesses have to respond to advantages offered by technological development to stay competitive
Global Global economy means organisations cannot ignore foreign competition
Social increased female work participation, changing dimension of families, ageing workforce
Environmental organisations are under pressure to take care of the environment. E.g. Samsung uses recyclable
packaging for their products
Evaluation of Performance
Efficiency is the way an organisation uses resources to achieve its objectives (doing things right).
Effectiveness is the degree to which an organisation achieves its objectives (doing the right things).
Productivity: A quantitative measure of efficiency. The level of output obtained from a set level of input. E.g. the number of
mobile phones produced per week
Performance Indicators (PIs): a set of measures that helps a company determine if it is reaching its performance and
operational objectives.
All PIs should be comparative and may be compared to:
Changes in PIs over time for example, did the rate or amount increase or decrease over the past year?
Other organisations or benchmarks in the industry sector
Benchmarks: level of quality or achievement used as a standard of comparison for others
Budgets, estimates or targets set by the organisation
Performance Indicators
Number of sales
Percentage of market share: Percentage or share of the market held by an organisation based on sales revenue
Net profit figures
Productivity and rate of productivity growth increased productivity indicates an efficient use of resources
Level of staff turnover number of people leaving the organisation
Level of job satisfaction through staff satisfaction survey
Customer satisfaction levels through customer survey
Number of workplace accidents
Level of waste reducing waste will reduce production costs and may result in fewer non-renewable resources used
Number of customer complaints
Number of faulty products relates to quality control
Staff absenteeism cost to a business in terms of less productivity. High levels may indicate job dissatisfaction
Profit is not the only thing that is important to business. Being socially responsible in the community should cover issues such as
waste management and pollution (Carbon emissions).
Being socially responsible in the workplace should consider issues of staff turnover, absenteeism and workplace accidents.
Incidents relating to these factors can often indicate attitudes of managers or employees. Ethics knowing of whats right and
wrong.
Triple Bottom Line (Analysis): Considers the Social and Environmental impacts and financial performance of an organisation.
(People Planet Profit) PPP
Role of Management
Management structure: The ways in which parts of an organisation are formally arranged to link management, employees and
function together to achieve objectives.
E.g., departments in a Myers store, or the downward flow of objectives from the Chief Executive
Hierarchical structure: different levels of management and staff, with higher levels exercising greater authority and control.
Hierarchical structure has three levels of management:
Senior or Executive Management top level and has responsibility for strategic (long term planning)
Middle Managers in charge of a designated department or organisational division. E.g. store manager for Coles. In charge
of tactical planning
Front-line Managers supervisors, team leaders or leading hands responsible for day-to-day operations.
Features of an organisational management structure
Division of labour (who does what)
Division of employees into departments or divisions (segmentation), referred to as horizontal differentiation
Chains of command, control and authority, referred to as vertical differentiation
Patterns of decision making
Hierarchical structures use specialisation, with workers becoming expert in a particular activity
Flatter structures encourage employees to become multi skilled to increase motivation, productivity and flexibility
Chain of command, control and authority
Authority: the power and status to pass commands down an organisation
Span of control: number of people reporting directly to one manager or supervisor
Communication Channels upward (employee to management), downward (management to employee) or lateral (same level)
Hierarchical management (organisational) structure
Employees arranged into layers, or levels with power increasing the further up the hierarchy
Rigid lines of communication, with mostly downward communication
Clearly identifiable organisational positions
Clearly definable span of control exists for each manager
Centralised decision making, with management making decisions and passing on instructions to those below them. This is
referred to as line authority: authority that relates to the main tasks of an organisation
principle of unity of command, where each employee is directly responsible to one manager
Bureaucratic structure
Advantages
Quick decision making since less people are involved
Top level managers exercise a great deal of control which is ideal for managers using more autocratic styles
Disadvantages
Discourages creativity and innovation
inflexible and less responsive to change
Front-line employees receive less satisfaction from their jobs, increasing staff turnover rate
Flatter Organisational Structure: organisational structure that has a wide span of control, few management levels and a short chain
of command.
Effects of a flatter structure:
Fewer levels of staff between manager & employees shorter, improved communication paths.
Employees actively involved in decision making improves empowerment and worker motivation.
Uses employee knowledge, skills, experience & potential for innovation.
Greater workplace flexibility and response to change.
Reduction in operating costs due to management downsizing
Fewer status distinctions, such as offices encourages team work to achieve common goals.
Increases training and multiskilling of employees.
Disadvantages
employees lack a specific boss to report to which creates confusion
Forms of Hierarchical organisational structures
Functional
Geographic (Divisional)
based on functions performed,
based on divisions according to
e.g. finance, marketing
location e.g. general manager for
Advantages
Asia
Advantages
High level of
specialisation
Experts in their
countries
functional area are
very productive
Narrow departmental
focus
Product-based (Divisional)
Employees are grouped together
according to the product they
make or sell. E.g. retail store
departments for mens clothing,
womens clothing, electrical
Advantages
employees have
experience in their
department
Disadvantages
Customer-based (Divisional)
Departments based on types of
customers dealt with by a group
of employees
Advantages
complex structure
difficulties in effective
communication due to
complex structure
Divisional structure: employees are grouped according to product, service, customer or geographic region. It allows for greater
flexibility to adapt to environmental changes and allows for encouragement of the cooperation between departments and
communication between functional areas. There are also specialists in charge of divisions allowing for best practice (a method of
comparing performance of one organisation against the leading firms and taking on board their practices) in these areas. However
there is the possibility of duplication of work and rivalries between divisions. The structure only works if clear communication is
established between divisions.
Consequences of less hierarchical organisational structures
Delayering (reorganisation by removal of layers of management)
Decentralised decision-making: where workers are given responsibility for decision making in their own areas.
Traditional versus Contemporary organisational structure
Elements of structure
Traditional hierarchical structure
Communication
Downward
Communication channels
Slow, unresponsive to change
Decision making
Centralised
Delegation
Downward
Management style
Autocratic
Layers in structure
Multilayered
Span of control
Narrow
Division of labour
Specialisation
Roles and responsibilities
Clear and narrow
Departmentalisation
Well defined
Outsourcing
Limited
Contemporary structure
Multidirectional
Shorter communication paths
Decentralised
Downwards and lateral
Consultative/participative
Fewer layers
Broad
Multi skilled
Greater autonomy
Cross-departmental teams
Non-core functions
Matrix Structure: a structure that places managers and employees into project teams that cut across functional or departmental
lines, and requires them to report to both functional and task management
Advantages are: improved communication channels, reduction in interdepartmental rivalries, and greater level of crosspollination of ideas, with employees exposed to different perspectives of those in other departments
Disadvantages structure is complex so employees may take time getting used to it.
Network Structure: Organisational structure where functions are outsourced to other organisations; the core organisation exerts
control via outsourcing contracts.
Advantages - being flexible and ready to adapt to changes in consumer demand.
Disadvantages heavy dependence on technology and can cause problems in communication if computers crash
Corporate Culture: The shared values and beliefs of an organisation, which can influence the actions and decision making style
of managers and employees.
Corporate Culture is:
A pattern of shared basic assumptions
Developed and shared by the group
Representative of past success
Taught to new employees as the correct way of thinking, feeling and doing
How to recognise corporate culture
Company policies & objectives
Physical environment colour scheme, architecture
Organisational structures and management styles
Organisational processes
Rituals & symbols what is celebrated.
How people address each other
Language
Documentation brochures & logos
Differences in corporate culture
Degree of risk taking and innovation
Attention to detail
People orientation- Wants and needs of employees when making decisions. E.g. work-life balance
Task or process orientation - Is focusing on results or how the results were obtained more important?
Team orientation
Level of Competitiveness
Emphases on ethical and social responsibilities
Diversity among employees skills, ideas, ratio of males to female,
Age of the organisation older organisations may have more traditional practices
How do employees learn organisational culture?
Rituals: these are the things that express and reinforce the key values and expectations of the organisation. It may be
recognition and award ceremonies, or weekly Friday afternoon drinks.
Stories: these may be stories about significant events or people, including things such as the organisations founders
Empowerment: this is transmitted to staff by managers who positively reinforce appropriate behaviour. This may be a
positive comment such as well done or great effort.
Communication formal or informal
Material symbols represent status such as larger offices for senior managers
Increased productivity A committed employee that feels valued may have higher productivity
Greater employee work ethic
Reduced staff absenteeism & turnover
Reduced cost of recruitment and training
Great profitability
Positive public perception loyal staff will provide better customer service
Effect on performance
Often employees work harder to achieve organizational goals if they consider themselves to be part of the corporate
culture.
Different cultures operating in one company can also impact employee performance. For example, if the organization
maintains a reserved talk when necessary culture, employees may work accordingly.
Setting objectives
SWOT Analysis
Strength internal characteristic that contributes to the realisation of the
organisations mission. E.g. strong reputation/brand, excellent product/service,
skilled workforce, market share increasing
Weakness internal characteristic that negative influences the functioning of
the organisation. E.g. poor reputation, outdated product/service, toxic culture
Opportunity external fact or development that can contribute to the
realisation of the organisations mission. E.g. changing customer needs,
development of new products/services, new technologies
Threat external fact or development that can have substantial negative effect
on an organisations performance. E.g. competitors, changes in customer
preferences, economic factors, restrictive government policies
Tactical Planning
Formal, medium term (1-2 year) planning undertaken by middle management to implement the organisations strategic
plan.
Responding to changes internally or externally
Allocation of resources in order to achieve the organisations objectives.
Operational Planning
Daily, monthly or up to one year basis by lower-level supervisors and managers.
Detailed level of planning that implements strategies to ultimately achieve specific objectives
Controlling: ensures that plans are being implemented appropriately and alerts managers to any deviations from the plan so
corrective action may be instigated. Controlling is directly related to planning
Steps in Controlling
1. Setting a standard target or objective
2. Measuring performance is done through observation, performance indicators
3. Identifying and investigating any deviations
4. Making changes where necessary to ensure that the objectives are being achieved
Types of controls - Financial controls (accounting system to track where money is going), establishing performance standards, Time
controls (ability to produce a certain number of products per day to meet demand), cost controls
3.
4.
5.
6.
7.
Management
Styles
Features
Autocratic
Persuasive
Advantages
Managers make
decisions then
persuade workers
of the benefits of
those decisions
Same as
autocratic, except
it places some
value on
employees
contributions
Consultative
quick decision
making made by
one person
suits high risk
decisions
employees have a
clear idea about
what they have to
achieve
Participative
Disadvantages
discourages teamwork
as employees opinions
are not used
does not allow for open
communication
low motivation and job
satisfaction, as workers
are not empowered
too task-focused, with
insufficient regard for
people with needs
creates feeling of unease
no input from
workers into
decision-making
process
opportunities for
employee
initiative
overlooked,
leading to low
levels of
motivation and
job satisfaction
Decentralised
Orientation or focus
toward people.
Belief that motivation of
employees related to an
understanding of how to
satisfy employees broad
range of needs.
Decentralised decision
making, with
management and
employees working
together
Multidirectional
communication
Manager demonstrates
trust and faith in ability of
employees
Increased morale
Employees feel sense of
ownership and
empowerment as they
are now decision makers
Decision making
improved at lower to
middle levels because
employees are involved
in decisions related to
them
Open communication
Empowerment and
coaching encourages
opportunities for
employee development
Conflict between
employees who question
ability of co-workers
Some workers prefer to
have their level of
productivity linked to
money rather than job
satisfaction
Time-consuming to seek
involvement of groups
Conflict may arise when
there are varying
viewpoints
Laissez-faire
Management style: manner and approach of providing direction, implementing plans and motivating people.
Contingency management approach: use of range of variables to determine the most appropriate management style required
to attain organisational goals in different types of situations.
Management Skills
A skill is the ability to do something well,
gained through training and experience.
Management styles and skills need to work
together to achieve objectives
Communication
Interpersonal communication sharing
information between 2 people
Organisational communication sharing
information with large numbers of
people
Forms of communication: reading (written data like emails), verbal written (expressing thoughts and ideas through
emails, word documents), verbal oral (talking to people to spread information and gain feedback)
Delegation: passing of authority down the hierarchy to perform tasks or make decisions; responsibility remains with the person
delegating
Formal authority: influence or authority derived from position in the organisation (legitimate power)
Steps in the delegation process
1 Analysis the tasks to be delegated need to be determined
2 Appointment involves nominating the subordinate to whom the task is to be allocated
3 Briefing involves defining the task(s) that are to be delegated
4 Control the progress of the delegated tasks needs to be monitored and encouragement given to those undertaking the task
5 Appraisal the process needs to be reviewed and revised.
Benefits of delegation
Promotes a smooth flow
Saves time by freeing management to be involved in more important tasks
Gives opportunity for training and development
Interrelated skills with delegation: job analysis, establishment of performance standards, setting checkpoints and deadlines,
appropriate recruitment and selection of people, good communication skills, task assessment and feedback
Manager problems with delegation: Insecurity, being shown up by a subordinate, disorganisation, lack of trust/faith in
subordinates, doing the job themselves, desire for power, subordinates lack confidence
Decision-making and problem-solving
Problem Solving: systematic approach to finding and implementing a course of action to correct an unsatisfactory situation.
Negotiation - Process by which one party seeks to obtain something it wants from another party, e.g. employee seeking pay
increase from employer
Core Negotiation Skills: Define objectives, explore the possibilities, prepare well, listen actively and question, prioritise clearly
Steps for successful negotiation
preparation
establish a
positive
working
atmosphere
make the
proposal
responding to
the proposal
establishing
positions
record
information
and confirm
understanding
Team leadership - When a group works together to complete a task; it requires workers to be multi skilled and allows for worker
empowerment
Manager abilities
Coach / mentor function
Encouragement of contributions to achieve objectives
Building cohesion and trust
Facilitating resolution of problems
Managing team dynamics and relationship
Time management
The efficient utilisation of work time, which involves setting and prioritising tasks, allocating time and avoiding timewasting activities.
Systematic approach to Time management
1. List the objectives
2. Rank the objectives
3. List the activities to achieve the objectives
4. Assign activity priority
5. Schedule activities
Stress management: reducing level of stress (physical, mental or emotional strain or tension occurring in response to adverse
influences and capable of affecting physical health)
Factors leading to stress: workload, coping with organisational change, interpersonal conflict, poor management
practices, lack of communication ,bullying
Steps to alleviate work-place stress: provide support, assess workload and clarify work roles, implement change in a
consultative manner, establish training and conflict resolution, promote work life balance, counselling, social
participation (gym, yoga)
Analytical: Ability to analyse or study the nature of a given situation or set of circumstances
Technical: Based on knowledge and proficiency in a specialised field e.g., accounting, legal, marketing, IT
Emotional Intelligence: competencies that allows us to perceive, understand and regulate emotions in ourselves and others
Golemans 7 Elements of EI:
Self-Awareness understanding moods, emotions, personal drivers and how they affect others
Self-regulation think before acting
Motivation passion to work for reasons beyond money or status
Empathy treat people according to their emotional reactions
Social Skills managing relationships and building networks and rapport with others
Intuitiveness able to arrive at clear decisions and drive their implementation
Conscientiousness commitment in pursuing an ethical solution to a difficult issue
Effective management
1. Convey the vision
2. Set the example behaviour that reflects the values and standards you want for the organisation
3. Mentor provide environment where it is safe to learn
4. Promote creativity
5. Be a storyteller talk about peoples strengths
6. Manage by excellence focus on what is being done right, show interest in the work of others
7. Offer feedback
8. Use rewards recognise desired behaviours and make an effort to increase their frequency
9. Create a culture of participation allow participation in decision making
10. Empower staff be concerned with their learning and development
Inputs
Transformation
process
Outputs
Facilities
Location
Quantity of production
Labour resourcing
Sourcing of technology
Services
Intangible. Quality levels are more difficult to measure
Production and consumption often occurs simultaneously
Difficult to store; however record of service is maintained
Often specifically provided to meet individual requirements
Higher degree of customer contact established
performed
Productivity can be improved if the amount of input decreases for the same amount of output or if the amount of
output increases for the same amount of input
Productivity can also be improved by communication between employees and managers, automating work processes,
the type of management style and the improvement of facilities.
Organisations that are more productive are able to be more competitive.
Business competitiveness is the ability of an organisation to sell products against other businesses in a given market.
If operations are being managed efficiently,, costs will be minimised and quality will increase
Examples of productivity measures can include: Units of production produced per employee
Optimising Operations
Facilities design and layout (floor plan)
Factors that influence the location and design decisions can include: product or service, volume of output required, actual
amount of physical space and location, process to be undertaken (closed or virtual) and appropriate type of layout.
Optimising the use of physical space insufficient workspace will result in blockages. A large workspace will hinder productivity
if people have to move long distances.
Optimising use of equipment easily accessible, reliable and operational
Regular maintenance program multiskilling workers to ensure maximum utilisation of equipment. Maintenance will cost time,
labour and parts but will avert downtime
Location of raw materials stocks and finished products must be accessible and time wasted in locating and moving inputs will
reduce productivity
Layout of plant and equipment linking processes and stages of production so that needs are met.
Types of Layout
Fixed position/project layout: product remains in a fixed position with required resources taken to the product. E.g.
Construction Company building a skyscraper
Advantages: greater flexibility, enabling manufacture to exact specifications and High quality built into production process
Disadvantages: expensive as it is time-consuming and needs high labour
Product layout: equipment is used for a single purpose along a production flow line. The product progresses along the line in a
continuous flow.
Advantages: costs are reduced in the long run
Disadvantages: expensive to setup and staff may become bored with repetitive work
Process/functional layout: pieces of equipment with like equipment are grouped together; the product is taken to each piece of
equipment
Lean manufacturing: efficient management of the production process with the aim of achieving minimum use of resources.
Closed factory: production is carried out within the four walls of factory site.
Virtual factory: productive operations are outsourced to other places at a lesser cost.
Methods of Production
Project/Job Process involves the production of one item from start to finish.
Batch Production involves the production of different types of products in batches, where products in each batch go through the
whole production process together.
Continuous production involves automaton where standardized inputs are put through standardized processes in order to
produce the required output in large volumes. Assembly line is used.
Continuous flow production involves a high volume process that runs non-stop, the product goes through the same sequence of
processes continually. Printing press etc.
Mass Customisation: combines the latest technology with multi-skilled employees using a production line to create wide range
of products. Few components are varied to allow for customisation.
Cell production: is a new form of flow production in which workers are divided into teams. It aims to motivate employees
through friendly competition.
Service industries
E-commerce allows business transactions to occur using the internet. E.g. Ebay
Computerisation has reduced operating costs and made significant time economies
Mobile phone internet access on mobile devices improves communication. This offers many potential productivity
gains, greater workplace flexibility and employee work-life balance as employees are no longer tied to a workstation.
Communication via the internet has enabled cost savings as employees can work from home, saving office overheads.
Materials Management: a strategy involved in the planning, organising, leading and controlling of the materials or inputs used
in the operations process which is about transforming inputs to outputs in a manufacturing or service organisation.
Inventory: the holding or storage of raw materials, component parts, work in progress or finished goods
Inventory takes up storage and is a cost. The aim is to ensure that the right quantities of parts/material are available
and that there are sufficient finished products to satisfy demands.
Inventory management necessitates decisions about how much to order (quantities to replenish), timing or ordering (when to
order) and control of the stock security system.
Aspects of inventory management
Reliable inventory system that determines what items to order, in what quantities.
Inventory control that determines how and when to store items and can track movement of raw materials while
protecting against loss due to theft or damage.
Computerised inventory records improve the accuracy of recording and reduce stock damage and loss.
Just in Time (JIT) inventory system that aims to avoid holding any stocks (inputs or finished goods); suppliers arrive just as
needed and finished products are immediately dispatched or sold.
Key Elements of JIT
1. Reduce costs through minimising amounts of inventory that must be held at any one time
2. Small quantities of inputs delivered more frequently to meet immediate requirements
3. Kanban method employed where orders are placed in response to needs further up the line. Inventory only replaced as
it is used.
4. Employees identify wasteful work practices and eliminate these continually
Supply Chain Management the range of suppliers from which an organisation purchases materials and resources
Supplier lead time is important as some suppliers will require prior warning of requirements
Planning in order to know exact amounts of materials required.
Anticipate possibility of future price rises or falls caused by seasonal variations, changes in Australian dollar
System must be established to keep inventory at required levels and avert loss.
Critical:
Quality Management
Quality: the degree of excellence in a good or service and its ability to satisfy the customer
Quality control: process of checking the quality standards of work done or quality of raw materials or component parts
Quality control stages
1. Establishment of quality benchmarks/standards. Set out attributes that will be checked and standards to be met.
2. Carry out inspections of product performance. Use analaysis and sampling techniques
3. Compare results of inspections with established standards/benchmarks. Reject products that fail to meet standards
4. Correct processes/procedures in order to prevent defects recurring. Reappraisal of performance standards may occur.
Quality assurance: The process through which an organisation achieves a level of quality in the goods and services they
produced that is defined by an independent body. It aims to build quality into work processes, thereby avoiding errors before
they occur. It involves the use of ISO standards and the right to use these provides confidence to stakeholders and has a
competitive advantage in globalised markets over non-certified competitors.
People required to look at their work as being one step in a continuous process rather than as in isolation to the rest of
the organisation
The way to improve quality is to ascertain who the customer is and what they need and improve the process to meet
this need
You are always looking for a better way of doing things
Customer Focus - Finding out exactly what the user needs and wants, and ensuring the process provides it.
Defect Prevention
TQM tries to prevent defects before they arise rather than relying on inspection to find them after they occur
Universal Responsibility
Quality is everybodys responsibility. Everyone should be concerned with seeking ways to improve the quality of their
own product or service.
Environmental management system: series of policies and practices that focuses on an organisations approach to
environmental issues.
An EMS will affect:
How well an organisation will meet its ethical obligations in regard to effect on both the natural and social
environments
Efficiency of the operations systems. Environmentally friendly practices and processes usually involve reduction of
waste and cleaner production processes that use fewer inputs
Employees
Commitment did the HRM policies enhance employee identification with and their attachment to their job and
organisation? High level of commitment results in greater loyalty, increased team work
Competence did the HRM policies attract, retain, motivate and develop employees with abilities, skills and knowledge
to achieve objectives?
Cost effectiveness how have personnel related costs been reduced? Eliminating all unnecessary work, reducing
compensation and benefit costs, reducing staff turnover and absenteeism.
Congruence agreement between management and employees, different employee groups
Adaptability - is the organisation ready for change?
Performance - has HRM contributed to employees increased performance and productivity?
Job satisfaction do employees now have more positive attitudes and feelings? Job satisfiers may be pay, promotion
opportunities, fringe benefits
Employee motivation are employees motivated to achieve goals?
Employee Expectations
Employees expectations
To be paid a fair wage
Finish work on time
To gain satisfaction from the work they do
To receive positive feedback
To be given assistance when necessary
To have time off (e.g. maternity, illness)
To work within a professional and respectful environment
Working in a Safe and healthy work environment
Negotiating flexible working arrangements
Opportunity for promotion
Employers expectations
To achieve organisational objectives
To have employees complete their work
That the employee has some job satisfaction
That employees act in a professional and loyal manner
That customers are given good customer service
Employees arrive and leave on time
That employees do not deliberately sabotage the business
That employees comply with health and safety policies and
procedures
To have work completed on time
That employees are courteous and respectful
Conditions of employment: what an employer has agreed to give an employee in return for their work.
General Expectations
-
Different generations have different work expectations. E.g. Gen Y tend to be more demanding for career
advancement, pay rises and time off but they are tech savvy and have a lot of enthusiasm.
Conditions of employment and the work-life balance
-
Organisations that are working towards creating work-life balance will provide family and parental leave (paid or
unpaid), Child care, flexible work hours, part time work or job share
Flexible work practices: work practices that allow employees to balance work and family responsibilities
Advantages: Reduced recruitment costs as staff turnover will reduce, retaining valued employees who would otherwise
leave and higher staff morale and increased productivity for employees as they are more focused.
Occupational health and safety
Employers must maintain a safe workplace such as fire exits not blocked.
Adequate facilities such as clean toilets, drinking water and hygienic eating areas
Job security
Many organisations have had more contractors/casual staff or have reduced permanent full time employment to parttime.
Huge impact on motivation of employees as well as their feelings of loyalty and commitment
Motivation: the desire or drive to work well; process of ensuring that there is continuing commitment to a common set of
goals or a single goal
Abraham Maslow (Hierarchy of needs)
Level in hierarchy
1. Physiological needs
What it means
Basic needs like food, water, air, shelter
2.
Safety needs
3.
Social needs
4.
Esteem needs
5.
Self actualisation
needs
Relevance to HRM
A job
Rumeneration (pay)
Job security
Benefits
Promotion, recognition
Fredrick Herzberg
Herzbergs two-factor theory of motivation: hygiene theory; two significant and different classes of factors. The lower level
needs are hygiene factors and the higher level needs are motivators.
Hygiene
Environment in which you work physical conditions, pay, status. These will provide general
satisfaction or prevent dissatisfaction but no motivation
Motivation
Sense of recognition, achievement, challenge. These will provide high motivation, satisfaction
and strong commitment
Hygiene factors are easily satisfied and adding more of these will not motivate an employee long term
The factors that lead to positive job attitudes do so because they satisfy the individual's needs for self -actualisation in
his work (LIKE TO MASLOW)
Managers can apply Herzbergs theory
1. Hygiene factors that act to dissatisfy an employee must be eliminated
2. You need to help them find satisfaction e.g. removal of poor company policies, meaningful work
3. Create satisfaction by introducing motivating factors associated with the work; e.g. creating work that is rewarding
and matches the skills and abilities of the employee
Locke said that motivation comes from having clear goals & good feedback
Goals need to be SMART (Specific, Measurable, Achievable, Relevant, Time Bound)
Application of the goal-setting theory approach involves participation between managers and subordinates at every
level.
Management by Objectives (MBO) where each persons major areas of responsibility are defined in terms of
measurable expected results. MBO focuses the efforts of all members to achieving personal and organisational goals.
Establishment phase
Human resource planning: planning for future needs, taking into account both internal activities and factors in the external
environment.
Factors or trends affecting HRM
Structural changes in the labour market
Work patterns are changing
Length of working life is changing
Change in skills and education expectations
HRM must plan to assist the organisation to:
Recruitment Methods
Internal notice boards, memos, intranet, newsletter, recommendations
External advertising (newspapers), electronic recruiting (seek.com.au), government employment agencies, outplacement firms
Selection
Selection: process undertaken to decide whether to make a job offer to a candidate
Receipt of application polite to acknowledge any application
Initial Screening eliminates applicants who do not possess the skills required for the position. A
Short list of potential applicants to interview is created.
Interviews common selection technique where questions are asked based on the job
description and specification
Testing
Psychometric testing provides a scientific component to recruitment. Can include aptitude test
(IQ based), personality and motivation questionnaires
Competency testing undertaken by using business games such as role play or simulation
exercises to judge how the applicant will handle various work situations
Physical Examination to find out whether the applicant is physically capable to perform the job
Background investigation reference checking
HRM can conduct checks by contacting former supervisors, colleagues or using social
media such as Facebook
Advising applicants of outcome position officially offered to successful applicant and
unsuccessful applicants advised of their non-success
Employment contract: formal written agreement between employer and employee, setting out
the legal obligations of each party; an informal or oral agreement may also be entered into
Types of employment
Permanent full-time basis continuing contract of employment where employee will receive salary or wages, leave
entitlements and superannuation
Permanent part-time basis continuing contract but fewer hours than full-time basis
Casual basis short term work and paid on a daily or hourly basis. Dont receive benefits such as sick leave
Fixed term basis for project work or to replace employees absent on long-service leave
Arrangements relating to pay and working conditions
Award: agreement that sets out minimum terms and conditions of employment relating to an industry
Employee collective agreement agreement between an employer and employees, setting out terms and conditions of
employment
Union collective agreement: agreement between employer(s) and a Union(s) that sets out terms and conditions of
employment; an agreement may cover businesses run by more than one employer
Remuneration: The amount a person is compensated (paid) for performing work tasks (job)
Types of remuneration
Wages
Salary annual figure payed on a monthly or fortnightly basis.
Salary packages used for senior positions which includes pay and fringe benefits (bonus pay, company car)
Benefits paid maternity leave, alternative work arrangements, life insurance, extra superannuation
Maintenance phase
Role is to ensure the organisation retains productive employees who are loyal and committed to the organisation
Performance appraisal: determining how well employees have performed their jobs, providing feedback and establishing
plans to improve performance. Usually involved with existing employees
Induction: process of introducing new workers to their place of work, their job role, their colleagues, supervisors, management and
corporate culture.
Purpose is to create a sense of belonging (socialisation process), communicate organisational values and beliefs, provide
information about job tasks and to create a favourable impression about the organisation (public relations)
Non-financial rewards
Promotion, opportunities to work on special projects
Career development, study leave, extra paid leave
Staff recognition awards, praise for job well done
Expense accounts (not included in salary)
Performance management: system used to improve organisational, functional and individual performance through linking
objectives of each; it assesses all phases of the employment cycle
Used to report on past performance of both the organisation and the individual employee, in that it:
Management by Objectives
setting specific, measurable objectives with an employee then reviewing their performance
Advantage of both manager and employee being aware of expected objectives and standards
Comparative standards
Employees performance is compared to or ranked against another employee
Relies on global judgement of the employees performance and does not highlight any specific strengths or weaknesses
Absolute standards
Independent evaluation of an employees performance by their manager
Manager required to make honest and informed statements about the employees performance
Causes problems as there is no control over areas chosen for appraisal and is time-consuming and difficult to compare
employees.
Critical Incidents
Appraiser/manager recording observations or events of good or poor employee performance.
Termination Phase
Voluntary termination methods
Resignation: voluntary termination that occurs when an employee leaves the workplace, usually to go to another job.
Retirement: voluntary termination when an employee decides to leave the paid workforce.
Impacts of voluntary termination
Loss of talent
Cost of replacement
Decline in morale
Breakdown of effective teams
Productivity increase or decrease (depending on effectiveness of departing employee)
Dismissal: termination of employment usually due to poor work performance or illegal behaviour
Employer required to provide employee with a notice of termination and a reason for termination
Period of notice is based on the number of years of continuous employment
Positive and negative effects on an organisation from involuntary termination
Positive cutting of non-productive employees, reduction in costs, change in organisations structure
Negative loss of talent, decline in morale, breakdown of effective teams, increased pressure on performance of remaining staff
Termination management
Outplacement services
-
Services provided to assist employees who have been retrenched to gain new work and cope with retrenchment
Providing this service sends a message to remaining staff that the organisation cares about its employees
Transition Services - Provided to employees who are retiring and need assistance to organise their finance (superannuation,
pension), lifestyle planning and volunteering activities
Exit interviews can be used to gain feedback from employees as they are likely to be open about their problems. Managers
should take this feedback and use it to resolve problems and reduce staff turnover.
conflict resolution using negotiation to fix problems after they had occurred
centralised system: where awards (pay and working conditions) were determined by a central body (AIRC) relating to an
industry
AIRC (Australian Industrial Relations Commissions) established industrial awards which set out minimum conditions of
employment for employees doing a particular job
Industrial rewards had blanket coverage across all Australian workplaces of the type specified. This caused inflexibility, as
the needs of particular workplaces and employees could not be met.
Awards covered areas such as: pay rates, working conditions, meal breaks, holidays and leave
Characteristics
Orientation
Who makes them?
Individual contract
Decentralised
Employer and individual
employee
Negotiated between parties
Content
FWA determined
Pay and working conditions
Duration
Up to 4 years
Annual rate
Applies to
Industrial action and
dispute resolution
Role of union
Protection provided
toe employees
Individual employee
Both parties would have terms in
contract relating to dispute
resolution and contract
cancellation
None
Clauses written into individual
contract
Contracts enforceable through
courts
Grievance procedure: formal, systematic process that permits employees to complain about matters that affect them and their
work
Form of Industrial action
Passive resistance
Work to rule
Boycott
Stop-work meeting
Picket line
Strike
lockout
Explanation
Lack of cooperation to complete tasks, absenteeism
Workers refuse to do anything more than the bare minimum required
Employees refuse to do something to deal specifically with someone
Employees hold meeting during working hours to discuss an issue. Productivity ceases
Employees physically demonstrate outside the premises of their employer.
Employees withdraw their labour and production ceases. E.g. teachers strike
Employer/management not allowing workers to enter a plant or building to work
Initiated by
Employees
Employees
Employees
Employees
Employees
Employees
Employer
Commitment to the achievement of organisational objectives creates sense of common purpose and teamwork
Allowing employees to feel their contribution is valued. A participative management style facilitates this.
Treating employees and their complaints seriously
Promotion of the concept that change is essential will assist in creating a more flexible mindset towards reform.
Effective communication skills and methods help avert industrial dispute. Management taking time to explain reasoning
behind decisions gives employee an opportunity to see things from the point of view of management.
fair pay and working conditions and recognition of employee achievement creates positive workplace atmosphere
Maintenance of good working relationships between management and union officials.
fair and accessible grievance procedures will decrease chance of dispute
participative and open management styles will always improve relationships within a workplace
Change Management
Change: any alteration to an organisation and/or its work environment.
This occurs because of pressures placed on the organisation to make adjustments to its structures, activities, policies,
behaviours, processes and culture.
Internal environment: activities, functions and pressures that occur within an organisation over which it has control.
External environment (operating and macro): all elements outside an organisation that will act as pressures or forces on its
operation
Internal pressures as a source of change
Corporate culture changing negative culture by training of employees, changing methods for promotion
Policies new laws may require a policy to be changed. E.g. changes to OH&S laws require new policies
Management can influence the direction and progress of an organisation through management skills/style
Employees can exert pressure for changes to areas such as training, performance appraisal and policies
Operating environment pressures as a source of change
Customers organisation must keep up with changing customer preferences
Suppliers problems with a supplier will not allow organisations to produce its products as inputs are not available
Competitors changes may be required if competitors change their business practices, to maintain competitiveness
Creditors development of secure lines of credit enables efficient operation
Unions exert pressures for change in collective agreements which affects wages and working conditions
Macro environment pressures as a source of change
Economic business activity (more people employed means more demand for products as people have more income),
inflation interest rates, unemployment, value of Australian dollar
Political changes to laws, change in government brings about changes in laws (E.g. 2013 Federal election)
Social and demographic changes in attitudes, values and lifestyles. Demographics (E.g. women with children In workforce
creates need for increased childcare facilities, flexible work hours)
Technological increased use of computers and internet, growth of e-commerce will require an organisation to change
International pressures global economy affects organisations. E.g. Global financial crisis
Geographic Silicon Valley puts pressures on government as they may demand taxation breaks as they control most of the
supply of microchips. Puts pressure on other manufacturers of computer hardware
Environmental pressures increasing awareness of effects of economic activity on environment. Organisations have to
become more environmental responsible using waste management practices, reduction of carbon emissions
Force field analysis (Kurt Lewin): looks at forces that are
either driving movement towards a goal or change (Driving
forces) or blocking movement towards a goal or change
(Restraining forces)
Driving forces: forces affecting a situation that are pushing in a
particular direction and are supporting the goal or proposed
change
Restraining forces: forces acting to restrain or decrease the
driving forces for change; these may include apathy, hostility,
and poor maintenance of equipment
Lewins model steps
1. Define the target of change
2. Identify which are driving forces and which are
restraining forces
3. Analyse the forces that can be changed
4. Develop an action plan on what can be changed
Pressure or
force for
change
Management
and
management
styles
Employees
Time
Competitors
Organisational
inertia
Legislation
Cost
Productivity
Organisational inertia: lack of ability of an organisation to react to internal and external pressures for change
8.
Establish a sense of urgency. Inspire people to move, make objectives real and relevant. A SWOT analysis can be used to
identify possible opportunities and threats that could arise from implementing change.
Assemble a group of people who will lead the organisation through the changes. It is important that the organisation gets
the right people with the right emotional commitment, mix of skills and levels
Create a vision for the organisation necessary to establish a simple vision and strategy to focus on emotional and creative
aspects necessary to drive service and efficiency.
Communicate the vision to all within the organisation. It is critical that as many people as possible understand and accept
the vision and strategy.
Empower others to act on the vision and remove any obstacles that may undermine the change process. Important to
create a situation that allows constructive feedback and support from leaders.
Plan to achieve short-term gains and wins rather than aim for large instant changes. It is also important to finish current
stages and celebrate this before moving on.
Consolidate all of the changes and develop employees who can help the change. As small goals are achieved, others need
to be set and strived for so that the change process becomes continuous and the momentum remains. Each success
provides an opportunity to build on what went right and identify what can be improved. Dont give up and press harder
after first success.
Institutionalise new approaches and create a new culture. Reinforce connections between the new behaviour and changes
and organisational success. It is important to reinforce the value of successful change via recruitment, promotion and
appointment of new change leaders. By weaving change into corporate culture, it is likely that the new change will become
a way of life for the organisation.
Coercion and threats to employees who do not agree with the change
Manipulation of the situation e.g. details left out
Autocratic management style where employees are told what to do and there is little or no opportunity for discussion
Low-risk practices are more likely to be successful in the long-term and allow for all stakeholders within the organisation to feel
valued as their ideas and feelings are heard.
As the use of technology increases, organisations and employees need to change the way they work
Advantages
Saves time and money as information can be collected quickly
Disadvantages
Technology can be seen as a substitute for labour. Many jobs,
particularly in clothing manufacturing have disappeared as these
tasks can now be done by automated technology
Can lead to de-skilling of employees and some employees on
production lines may find the work unskilled.
Use of technology can have high costs. The purchasing, developing,
training required and continued IT support can be expensive.
Operations management
Organisation in general
Benefit or cost
Some jobs and departments are no longer required; others are new