The Employment Cycle

Chapter 5
The human resource

management function —
UNCORRECTED PAGE PROOFS
the employment cycle

Why IT iS important
The promotional photo opposite is part of a recruitment drive for the Australian Navy. The
advertisement called for people interested in being trained as Maritime Warfare Officers to
serve in submarines. The 2014 Federal Government budget allocated $2.1 billion over 10 years
to recruit and retain Australian Defence Force personnel. Recruitment is only the first part of
the process. Keeping good employees is a significant task for managers in achieving the aims
of an organisation. In this chapter, you will learn about how businesses must plan for their
human resources needs before setting out to find the right person for the job. Once a person is
selected for a position, they must be ‘maintained’ in the workplace. Training and development
as well as ongoing feedback on work performance will assist both the employer and employee.
Termination of employment is the final phase of the employment cycle; it must also be
managed to ensure employees are treated fairly and within the law.
What you will learn

Key knowledge
Use each of the points below from the Business Management study design as a heading in your summary notes.
Establishment phase:
• human resource planning related to business strategy
• job analysis and job design
Termination phase: • types of recruitment methods and selection processes
• termination management, including • employment arrangements and remuneration
entitlement and transition issues
MANAGEMENT PRACTICES AND

PROCESSES ASSOCIATED WITH
THE KEY PHASES OF THE
EMPLOYMENT CYCLE
Maintenance phase:
• induction
• training and development
• recognition and reward
• performance management
Key skills
These are the skills you need to demonstrate. Can you demonstrate these skills?
• accurately use relevant management terms
• research related aspects of human resource management using print and online sources
• analyse business literature, information and data
• evaluate key aspects of human resource management theory
• apply human resource management knowledge and concepts to practical and/or simulated situations
• evaluate different practices and processes for managing human resources.
172 UNIT 4 • Managing people and change
c05TheHumanResourceManagementFunction—TheEmploymentCycle 172 17 September 2014 10:47 AM

Bupa Health Dialog — a top employer

Bupa Health Dialog, located in Melbourne, offers evidence-based wellness, prevention and
chronic disease management services to help meet the health needs of Australians.
The company has a very thorough recruitment and selection process, designed to
bring the very best people into the organisation. The process begins with a well-defined
job description, which outlines the requirements and challenges of the role, and a job
specification that details the key competencies expected. A detailed brief is provided to
the human resources team, who then commence the recruitment process.
Whenever possible, company policy is to recruit internally in order to provide existing
employees with a career path, as well as to maintain a good cultural fit. However, if no
suitable internal candidate is available, the HR team recruits externally using the Internet
and online recruitment agencies, such as SEEK, or newspaper advertisements.
After checking the resumes of applicants, the HR team will create a shortlist of
candidates to interview. The interview panel usually consists of HR team members and the
manager of the department requesting the position. The manager will be more interested
in the technical aspects while the HR people look more for an appropriate cultural fit.
Cultural fit is very important because Bupa is a people services organisation that has Brett Comer is the General
Manager of Bupa Health Dialog.
strong internal teams. It is essential that any new employee meets company expectations
As a senior manager, Brett knows
and is able to reflect the culture of the business. Positive business culture is one of Bupa
the importance of recruiting,
Health Dialog’s main competitive advantages. selecting and maintaining
During the selection process, the company uses psychometric (psychological) testing appropriate staff members.
for senior management positions or people working in specialist teams, such as its
nurses. They test factors such as intelligence, aptitude and personality characteristics. When recruiting new employees the
company is looking initially for the technical abilities to perform the job. Secondly, it is important that all new employees
display the right set of values: caring, customer-focused, accepts accountability, has an aspiration to develop and is prepared
to work in a team.
The company is very aware of skills shortages in the labour market and the potential difficulty of finding the right people,
so sometimes innovative strategies have to be used. One successful strategy, especially for nurse recruitment, is the company’s
Refer-a-Friend scheme, where employees can refer friends for a position. Should the referred person be successful, the
employee receives a $1000 bonus payment.
The human resource management function — the employment cycle • ChapTer 5 173

5.1 The establishment phase of the employment cycle —
human resource planning, job analysis and job design
Key CoNCepT Before advertising a staff position, an organisation needs to

plan its human resource requirements and determine what jobs need to be
filled and what those jobs entail.
an introduction to the
employment cycle
The employment cycle involves an organisation determining its employment needs
in line with its business strategy. Once employment needs are established, it’s time
to hire staff. Once staff are employed, steps need to be taken to ensure employees
are satisfied and productive. The final phase of the cycle is managing what happens
when employees leave the organisation. These three phases of the employment
cycle are summarised in the following diagram and table.
1. Establishment phase
• Staff planning in line with business

strategy
• Job analysis and job design
• Recruitment
• Selection
• Employment arrangements and
remuneration
3. Termination phase 2. Maintenance phase
• Termination management — • Induction

voluntary and involuntary • Training and development
• Entitlement and transition issues • Recognition and reward
The three phases of the employment • Performance management
cycle.
Phases of the human resource/staffing process and their related activities
Phase Activities
Stage one — establishment • Planning: identifying staffing needs, conducting job analysis (determining the exact nature
of the position to be filled) and job design (determining how the job is to be performed
and the material and equipment required to do the job)
• Recruitment: attracting people to apply for the position in the business, undertaking
internal and external recruitment
• Selection: choosing and hiring the most qualified; testing and interviewing
• Employment arrangements and remuneration: deciding on the type of employment
contract (arrangements) and ways of paying employees (remuneration)
Stage two — maintenance • Induction: acquainting new employees with the organisation and the jobs they will perform
• Training and development: teaching employees new skills, helping employees to learn
tasks associated with their jobs and to improve their skills
• Recognition and reward: monetary benefits (rewarding employees’ efforts through
financial compensation) and non-monetary benefits (rewards such as better conditions,
fringe benefits)
• Performance management: methods to improve both organisational and individual
employee performance

Phase Activities
Stage three — termination • Termination management: voluntary termination (dealing with employees leaving of
their own accord — retirement, resignation) and involuntary termination (dealing with
employees being asked to leave — retrenchment, dismissal)
• Entitlement and transition issues: payment of any outstanding benefits, such as sick or
annual leave, and providing support and counselling for dismissed employees
human resource planning

All organisations have to plan for the positions that inevitably become vacant. Human resource (HR) planning is the
Employees retire, resign or get promoted. Also, new positions develop as the busi- development of strategies to meet the
ness expands. Therefore, for most organisations, determining staffing needs is an organisation’s future human resource
ongoing process. needs.
Human resource (HR) planning in the establishment phase of the employment
cycle involves forecasting the number of employees available and the number of
qualified employees demanded in the
future. HR planning must be related
to business strategies. You will recall Increased use of self-scanning checkouts
that a business strategy is an action is reducing the number of checkout
that is taken to achieve an organisa- operators employed in the major
supermarket chains.
tion’s objectives. A common strategy
used in order to achieve the objective
of increased profitability may be to
reduce business costs. HR must fore-
cast the future demand for employees
and estimate the supply available to
meet that demand in order to avoid
having too many employees on the
payroll. If supply of employees is fore-
cast to be greater than demand, HR
will have to plan for a reduction of
the workforce. For example, large
supermarket chains in Victoria will
have to plan for the likely staffing
effects of customer self-scanning facil-
ities. With as many as six in ten shop- dId yoU KNoW?
pers now scanning their own Over the next decade, the workforce
supermarket items, chains such as will age considerably (often referred
Woolworths and Coles must plan for to as the ‘greying’ of the population)
what may inevitably mean a decrease in the number of checkout operators. as the post–World War II, ‘baby
Human resource planning that is related to the business strategy of the organ- boomer’ generation grows older.
isation has never been more important. Given the pace of today’s technology and Take, for instance, the nursing
the global economy we now operate in, organisations must respond to change profession. In 2001, the average
faster. If an organisation does not plan their human resource needs in line with age of both registered and enrolled
their business strategy, it is unlikely that the business will succeed. employed nurses was 42.2 years.
Human resource planning in the establishment phase of the employment cycle Now the average age of a nurse
requires that an organisation constantly monitor and plan: is around 50 years. It is therefore
• the number of employees required not surprising that in recent years
• their qualifications, including skills, previous experience and knowledge there has been a recruitment drive
• when and where these employees will be needed. to attract more people to become
Now that we understand that human resource management must be related to nurses, and many nurses from
business strategy, let us take a closer look at the establishment phase of the employ- overseas have been employed.
ment cycle in relation to job analysis and job design.

5.1 T
he establishment phase of the employment cycle — human resource planning,
job analysis and job design
Job analysis
Job analysis is the next step in determining an organisation’s human resource
Job analysis is the study of an needs. There is no sense in hiring people unless the organisation is clear about
employee’s job in order to determine what it is hiring them to do. In other words, the organisation must determine the
the duties performed, the time exact nature of a job before it can recruit the right person to do it. Job analysis is
involved with each of those duties, a systematic study of each employee’s duties, tasks and work environment. A job
the responsibilities involved and the analysis examines:
equipment required. • actual job activities
• the equipment used on the job
• specific job behaviours required
• working conditions
A job description is a summary of
what the worker will be doing — the
• the degree of supervision necessary.
role they will have in the organisation The job analysis for a particular position typically consists of two parts:
in terms of duties and responsibilities. 1 a job description: a written statement describing the employee’s duties, and
tasks and responsibilities associated with the job
A job specification will indicate 2 a job specification: a list of the key qualifications needed to perform a par-
the sort of person an organisation is ticular job in terms of education, skills and experience (see the figure below).
seeking in terms of personal qualities, Once staffing needs have been identified, an organisation is able to begin its
skills, education and work experience. recruiting procedures.
GRAPHIC DESIGNER (Ar tists)

John Wiley & Sons Australia, Ltd, a leading educational
publisher, wishes to appoint an experienced Graphic
Designer for its busy Art studio in McDougall Street.
This full-time position involves creating flyers, brochures,
Job posters, catalogues, advertising, stationery and web
description pages, along with book interior and cover designs.
The successful applicant will have excellent design skills
and can format supplied text both quickly and accurately.
Job A thorough knowledge of Adobe CS3 studio software
specification package for the Macintosh is vital. GoLive, PowerPoint,
or website design experience, as well as good English
skills, would be very advantageous.
Remuneration will be based upon experience. All
applications should be sent in writing by Monday,
3 October 2011 to: Manager, Design, John Wiley &
Sons Australia, Ltd, PO Box 1226, Milton QLD 4064.
Work samples / copies would be appreciated.
We are also calling for expressions of interest from Mac
artists with a thorough working knowledge of Illustrator
to perform casual or freelance work for our Art Dept.
John Wiley & Sons Australia, Ltd A.C.N. 009 673 081 is an Equal
Opportunity Employer which supports Affirmative Action.
An example of a job description and a job specification
Job design details the number, kind Job design

and variety of tasks that individual
Whereas job analysis concentrates on the work required for a job to be completed,
employees perform in their jobs. Jobs
job design details the number, kind and variety of tasks that individual employees
may be designed so they include a
variety of tasks to keep employees perform in their jobs. Good job design takes into consideration the satisfaction of
interested and motivated. the employee’s needs. In your school canteen, for instance, jobs may be divided
according to tasks, with one person handling food and another handling money

only. Alternatively, a single employee may do both tasks and may have other res-
ponsibilities such as ordering supplies, developing menus or cleaning the canteen.
Jobs that are designed so that they include a variety of tasks and give the employee
some decision-making responsibility are more likely to lead to greater job satis-
faction. Greater job satisfaction in turn may result in lower employee turnover.
To return to our example, if you were working in the canteen and were given
sole responsibility of cleaning, you may lack motivation and eventually look for a
job elsewhere.
Job design for motivation

In the past, jobs
specialisation — where
production was broken
down into distinct tasks
that were performed
by individual employees
— often resulted in
employee boredom and ❛ . . . intrinsic rewards
dissatisfaction. To counter
this effect, three job design
— the good feeling
approaches have been used that one gets from
based on intrinsic rewards
— the good feeling that Working in teams is another way of improving doing something
employee satisfaction. In autonomous work teams, the
one gets from doing
team decides how and what work will be carried out well. ❜
something well.
among its members. The team may work without direct
1. Job rotation: employees supervision.
switch, for a period of
time, from one job to another. This provides variety and gives employees a more
comprehensive view of the organisation or the production process.
2. Job enlargement: employees are given more things to do within the same job.
This provides job variety and a greater challenge for employees.
3. Job enrichment: employees are given more control and independence over how
they do their work. This makes the job more interesting and challenging and
provides motivating opportunities for self-satisfaction.
TeST your understanding 7 Undertake a job analysis for the position of Year 12
Business Management Student at your school and
1 Name the three phases of the employment cycle.
identify the key elements for consideration.
2 Outline why determining staffing needs is an
ongoing process.
apply your understanding
3 Predict the problems that could arise if a person
being hired does not possess the skills or attitudes 8 Why is it important to link business strategy to
required for the position. human resource planning?
4 Explain the relationship between a job analysis, a job 9 If you were redesigning a job, which job design
description and a job specification. approach discussed in the case study above would
5 Select three job advertisements from a newspaper you use? Justify your selection.
or online. Using the figure on page 176 as a guide, 10 ‘Job enrichment is just a fancy name for worker
distinguish between the job description and the job exploitation’. Discuss.
specification.
6 What is job analysis and why might well-designed
jobs lead to lower staff turnover?

5.2 The establishment phase of the employment
cycle — recruitment and selection
Key CoNCepT After the planning stage, the recruitment of staff commences
and usually involves a thorough and lengthy process to ensure that the best
person for the job is selected.
recruitment
Recruitment is the process of Recruitment is the process of finding suitable job applicants using advertisements,
attracting qualified job applicants from employment agencies and word of mouth. When an organisation decides to recruit
which to select the most appropriate staff, it may choose internal or external recruitment methods.
person for a specific job.
Internal recruitment
Internal recruitment (from within the organisation) involves considering present
employees as applicants for available positions. This often occurs when a person
is promoted, and it provides a strong motivation for current employees. Internal
searches are effective only if the organisation is substantial in size. An internal
search for a candidate allows an organisation to use its own employees’ skills. It
has the advantage of being low in cost and enables the organisation to select a
replacement who is familiar with its operation. Some organisations use employee
referral schemes. Potential candidates are identified and recommended by existing
employees. If a referral is successful, the employee will receive a referral bonus for
helping the organisation find the right person for the job.
External recruitment
A suitable applicant for a position may be found from outside the organisation
(external recruitment). A business will use external recruitment methods when it
wants to bring in people with new or different ideas and attitudes.
The recruitment method chosen will depend on the size of the organisation, the
type of position available and the nature of the labour force in the organisation’s
dId yoU KNoW? particular area. The figure below outlines the main sources of employees available
Attracting the right candidates to to an organisation.
the job is an ongoing process. Many
organisations actively seek to build Temporary/casual
their ‘employer brand’, creating an Advertisements services
image of their company as a great in the media
place to work for both current and
prospective employees. Recently,
recruiting company Hays conducted Schools,
MAIN SOURCES OF EMPLOYEES universities
an employment brand survey of Private employment/ FOR AN ORGANISATION
recruitment agencies or TAFE colleges
over 600 Australian jobseekers. The
results of the survey show that the
Government sector, ANZ, Virgin
and Telstra are most frequently Internal searches
nominated as organisations people Public employment agencies —
would like to work for. for example, Employment National
The main sources of employees for an organisation
Agencies
Temporary or casual employment agencies place people into positions for a short
period. Such placements are convenient when current employees are sick or on
leave. This type of service is often expensive. Most ‘temp’ agencies commonly
supply people for administrative positions.

Many organisations use private agencies or recruitment companies to source
suitable applicants for a position. This can be an expensive but effective method.
The agency does the preliminary screening of candidates and presents potential
employees who fit all the criteria of experience, education and training. Some
organisations may even enlist the services of a ‘headhunter’. A headhunter seeks
out a candidate to apply for a job. Headhunters are usually used to fill senior
management and executive roles.
Many jobs are advertised online. Organisations such as Seek Limited provide an
efficient way for job seekers to search online for jobs that meet their qualifications
and expectations. Employers and recruiters use organisations such as Seek to adver-
tise positions online, in order to reach a wide audience, although some employers
still choose the traditional method of advertising in the newspaper. Advertising
in the general media means that an organisation has to screen applicants, and then
proceed with interviews. This is often time consuming if
the organisation receives a large number of applications,
but it does prove effective in many cases and small to
medium-sized organisations often use this method.
‘Headhunters’ will usually be aware

of talented and experienced people
currently working in a number of different
businesses. They can help an employer
pick out a prospective employee, and
encourage that person to apply for the job.
Outsourcing the hunt for the right ❛ . . . employers see the

candidate advantage of using an
expert to make sure they
It is time consuming to advertise, screen and interview potential employees. Many
organisations use recruitment agencies as a way of decreasing the time involved in hire the best people.❜
searching for a new employee. They pay an agency
to interview candidates, and recommend a shortlist
of potential employees or an employee suitable
for the available position. Outsourcing of staff
recruitment is becoming popular with organisations.
As the skill shortage worsens, employers see the
advantage of using an expert to make sure they hire
the best people.
Community employment agencies are one
of the most common sources of employees for
organisations. Mission Australia is a community
employment agency. It competes with other
mainstream recruitment agencies for government
contracts by providing fee-free recruitment services.
Mission Australia Employment Solutions will attract

and screen candidates — including apprentices and
traineeships — without the fee of a private recruitment
agency.

5.2 The establishment phase of the employment cycle — recruitment and selection
Selection
Employee selection involves choosing Employee selection may be described as a screening or sifting process. It involves gath-
the candidate who best matches the ering information about each applicant for a position, and then using that information
organisation’s requirements. to choose the most appropriate applicant. Interviews, tests, physical examinations, and
referee and reference checks are all part of this process. In selecting staff, the idea is to
choose the most ‘appropriate’ person with the qualifications that best match the pos-
ition, rather than the applicant with the ‘most’ qualifications.
Employee selection can be an expensive process — not only in terms of the time
and effort put into the screening process, but also in terms of the costs of inappro-
priate selection.
dId yoU KNoW? A poor selection process leads to increased costs and lower productivity by
increasing:
The cost of a poor recruitment
• training costs, if poorly qualified staff are selected
decision is believed to cost around
• job dissatisfaction and labour turnover, if the organisation or the job does not
two or three times the annual salary
meet the expectations of candidates selected
of the person recruited.
• absenteeism rate, if staff feel inadequate on the job or feel under excessive work
pressure
• accident or defect rates, and fines or claims, if untrained staff are selected.
Selection options
Selecting a candidate for a position is an important decision. The decision maker
must choose appropriate devices for screening applicants, gradually ‘narrowing
the field’ until the most suitable person is found. Developing a short list of suit-
able applicants helps to limit the number of interviews to be conducted or tests and
checks to be carried out. The following devices can be used in the selection process:
• Application forms. Candidates outline information about themselves. The form
may be simple, requiring details such as name, address and contact number,
or it may require more detail about an applicant’s personal history, skills and
experience.
• Tests. These may be written or practical and are designed to assess aptitude,
intelligence or ability. They are not used by all industries, and they are not
always reliable as the sole indicator of an applicant’s suitability for a position.
Hiring the ‘wrong’ person for the job • Interviews. This is the most common device used in the selection process. The
can be a costly exercise.
interview must be well organised and structured, and common questions must
be used in each interview to ensure a consistent basis for selection.
• Background checks. The employer verifies the information on the application
form by contacting referees or agencies for information about an applicant’s pre-
vious experience, performance or record.
• Medical examinations. Some jobs require certain physical attributes. For example,
Victoria Police requires medical assessment as part of their background checks.
Selection interviews
The job interview is the most commonly used selection technique. Interviews pro-
vide an opportunity for the job seeker and the organisation to learn more about
each other. Interviewers ask questions to evaluate the candidate’s motivation, per-
sonality and attitudes. The interview also provides the candidate with the oppor-
tunity to find out more about the job.
Discrimination occurs when a policy
Unfortunately, discrimination sometimes occurs in the selection process. A female
or a practice disadvantages a person
candidate, for example, may mention during the interview that she has a number of
or a group based on a personal
characteristic that is irrelevant to the
small children. Her interviewer may then assume, mistakenly, that she would not be
performance of the work. available for night shifts or business-related travel. In addition, interviewers may be
unconsciously influenced by a candidate’s appearance. Occasionally, interviewers

After gathering information about each

applicant, an employer can select the
person who best suits the organisation’s
requirements.
may discriminate against candidates based on their age, where they live, the school
they attended or their sexual orientation. Interviewers may ask different questions
of various candidates, depending on the candidate’s appearance or other character-
istics. Discrimination in the interview process must be guarded against, because it may
contravene anti-discrimination or equal employment opportunity legislation.
After the interviews have been conducted and the checks and testing have been dId yoU KNoW?
performed, the most suitable applicant will be offered the position. That person is Much employee turnover in
the applicant that best meets the job specification, in terms of skills, qualifications Australia occurs in newly recruited
and experience. The organisation will usually wait for the successful applicant staff who have spent less than
to accept the position before informing the other applicants that they have been one year in the job. This reinforces
unsuccessful. This will help to avoid a potential problem, if the successful appli- research that suggests most
cant no longer wishes to accept the position. Australian management selection
The following figure summarises the steps in a typical selection process. processes are unplanned, subjective,
unsophisticated, highly susceptible to
Applications Screen Short list error and not supported by effective
received applicants candidates induction programs.
Offer job to Referee Interviews

candidate checks
Steps in a typical recuritment and selection process
TeST your understanding 5 Use the Job interview weblink in your eBookPLUS
to learn about effective interview techniques.
1 Identify the costs that may result from a poor
Then, working in groups of three, conduct a job
recruitment and selection process. Give examples. eBook plus
interview. One person adopts the role of a human
2 Discuss the strengths and weaknesses of recruiting
resource manager, and another adopts the role of
internally and recruiting from external sources.
the candidate for a position. The third person acts as
3 What is the purpose of a job interview?
an observer to assess the interview on the following
apply your understanding criteria:
(a) Was the interview effective?
4 You have recently been appointed as human (b) How could it be improved?
resource manager for a national clothing company. (c) What standards/criteria would you apply?
The organisation has a history of high staff turnover The student assessing could award a score out of 20,
and low morale. To correct these problems, you have giving a reason for the mark. All students should
decided to improve the recruitment and selection then change roles.
procedures. Outline the steps you might take to 6 Identify one advantage and one disadvantage of
identify potential capable employees. How would using a private recruitment agency.
you screen applicants?

APPLY YOUR SKILLS: Fairness in the employment process —
anti-discrimination
praCTISe • apply human resource management knowledge and concepts to practical

yoUr SKIllS and/or simulated situations
• evaluate different practices and processes for managing human resources.
anti-discrimination laws
Discrimination occurs when a person is disadvantaged because of a personal char-
acteristic such as their age or sex. Discrimination sometimes occurs in the recruit-
ment and selection process where a potential employee is not employed because
of personal characteristics that have no relevance to whether they can perform the
job or not. Discrimination may be direct or indirect (see the following figure). To
prevent discrimination and to avoid large fines, employers need to:
• comply with legislation, such as the Equal Opportunity Act 2010 (Vic)
• commit to a workplace free from discrimination
• write and communicate policies to prevent discrimination
• train managers and staff in cultural diversity issues, and about ways to prevent
or deal with discrimination
• appoint a grievance officer (designated person in the organisation that an
employee can talk to regarding discrimination) and specify grievance pro-
cedures involving issues such as sexual or racial harassment.
It is worth noting here that it may be acceptable to discriminate in particular
circumstances. For example, in employing males to clean male toilets. Employers
may apply for exemptions.
Direct discrimination Indirect discrimination

Treating a person or group less Treatment that seems fair but that
favourably than another person or has an unequal or unfair impact
group in similar circumstances. on one person or a group
compared with others.
Direct and indirect discrimination
Discrimination during family leave

In June 2013, a Melbourne wealth management company faced a discrimination claim
after it dismissed a new mother while she was on family leave, and refused to allow
her to return to work on a part-time basis. Ms Sarah Fillmore has been employed as a
client services manager by Carnbrea & Co., and in December 2012 took maternity leave
from the company. It was Ms Fillmore’s understanding that the company had agreed
for her to return to work part-time in mid-2013, but when she attempted to discuss the
details of her return she was told that the company had never agreed to this. Instead the
company wrote to her telling her that her employment would be terminated.

This case highlights the difficulties faced by many women
when they become pregnant. Many employers openly
discriminate against pregnant women, and do not respect

their rights to return to work following maternity leave. The
financial services industry apparently has a particularly bad
reputation in relation to this issue.
On 22 June 2013, the Australian Human Rights
Commission announced plans to hold a national enquiry
into discrimination against women who were pregnant
while working, and who faced discrimination when
returning to work following maternity leave. Data from
the Australian Bureau of Statistics revealed that in 2012
over 63 000 female employees felt they had experienced
discrimination in the workplace while pregnant. Of
these, 34 per cent reported they had missed out on
opportunities for promotion, while 32 per cent believed
they had not had access to training or development
opportunities offered to other employees. There were
even examples of women who had received inappropriate
or negative comments from managers and supervisors
Women make up 45 per cent of the workforce and 70 per
in relation to their pregnancy and their employment
cent of these women are of childbearing age. It makes good
prospects; a disturbing 28 per cent reported having had
sense for employers to develop policies that support the
this experience. needs of women during and after pregnancy.
TeST your understanding apply your understanding

1 Do you think discrimination has occurred in the 5 Read about the following case and comment on
following recruitment processes? Give reasons for whether you agree or disagree with the decision
your answer. made and why.
A Janine was told that it was rare for a female to be In the case Jordan v North Coast Area Health
able to cope with work down in the mine. Janine Service (No 2) [2005] NSWADT 258, a pregnant
did not get the job. woman had requested that she be given light
B Lai did not meet the qualifications required for duties. Her employer did not concede to her
the job and was sent a letter stating that she was request, saying that no alternative work was
unsuccessful in her job application. available and that a replacement worker could
C Renaldo was excited about the interview and not be provided. It was suggested that the
felt that he had a chance even though he employee take leave. The employee claimed that
was 60 years old. The interviewer was clearly she was discriminated against. It was found that
surprised that such an elderly applicant would the employer had indirectly discriminated against
even consider applying for the job. A letter the pregnant employee. The NSW Administrative
was sent outlining the reasons why Renaldo Decisions Tribunal said that the employer was
would not be considered for the next round of required ‘to do more in the circumstances than
interviews, and it stated that the company was to say, in effect, there is no policy [on how to
only considering applicants in a younger age deal with a move to light duties], there are no
bracket. vacancies, there’s no money [for a replacement
2 Explain in your own words what discrimination worker], and there’s no legal requirement’.
is, and why it is important that we have laws that Compensation of $7500 was awarded.
attempt to prevent it.
3 Undertake an internet search to find evidence that
suggests pregnant women are discriminated against
in the workplace.
4 What can HR managers do to ensure that their
recruitment and selection processes are not
discriminatory?

5.3 The establishment phase of the employment cycle
— employment arrangements and remuneration
Key CoNCepT Employers offer a variety of employment arrangements and ways

of paying employees (remuneration) to attract the right person for the job.
employment arrangements
Permanent employment Fixed-term employment Casual employment
Full-time Part-time Can be full- Agreed Usually No set

time or part- finishing date part-time working hours
time for employment or times
Usually 38 Agreed
hours per number of
week hours and Usually has similar entitlements Limited employment
working times to permanent for the term of entitlements
each week employment
Most secure form Least secure form

of employment of employment
Different employment arrangements

The different needs of organisations will determine the types of employment
arrangements offered to employees. Full-time permanent employment is the tra-
Full-time permanent employees
ditional method of employment for most people. Permanent full-time employees
have an ongoing employment contract usually work for between 35 and 38 hours per week, and are entitled to a set of
which includes all legally required 10 National Employment Standards (see p. 223 for more details). Most full-time
entitlements. employees are also employed under an Award, which lays down a set of minimum
wages and conditions (see pp. 222–3).
Part-time permanent employment Some employees may be offered part-time permanent employment, where they
involves working fewer ordinary weekly work for less than the ordinary full-time hours. Part-time employees have continuity
or monthly hours compared with full- of employment and similar entitlements to those of full-time employees. The differ-
time employees. ence is that their entitlements are calculated on a proportional basis. For example, if
a part-time worker is employed for three days out of five each week, he or she will be
paid 60 per cent of the full-time wage, and will accumulate annual leave, long-service
leave and sick leave entitlements at 60 per cent of the full-time rate.
While permanent employees are employed on an ongoing basis, a business
will sometimes offer employment on a fixed term contract. Wages and conditions
A fixed-term contract is where under these arrangements are usually similar to those of permanent employees, but
employment is offered for a specific the employment has a pre-arranged finishing date. Periods of employment from 3
period.
to 12 months are common with this type of arrangement, and this can suit a busi-
ness that may have specific employment needs for this period of time.
Casual employees are employed on
Another type of employment arrangement may involve an organisation employing
an hourly basis.
what are known as casual employees. Casual employees are employed on an hourly basis
and do not receive a range of entitlements (non-wage benefits) such as long-service leave
and sick leave. To compensate, casual employees are sometimes paid a loading — that is,
extra pay — on top of the normal full-time hourly rate. Part-time and casual employment
can provide workers with flexibility that allows for improved work–life balance.
In some cases, organisations may choose not to employ a person, but to engage
the services of a contractor. A contractor is not an employee of the organisation and

does not have the same rights as an employee. For example, contractors are typically
self-employed and are responsible for their own tax and superannuation payments. By
using independent contractors, companies bypass many of the requirements of a con- Remuneration is monetary payment
tract of employment, such as annual leave and sick leave entitlements. in return for the work an employee
performs.
remuneration
A wage is an hourly or weekly rate of
Remuneration refers to the financial payment an employee receives in return for pay.
working for an employer. These payments can be made in the form of a wage or a
salary. Remuneration is one factor in retaining productive and efficient employees who Employees who earn a salary are paid
are loyal and display a high degree of commitment to their work. Paying employees a fixed amount each year, which is
appropriately is important because it affects productivity by increasing employee motiv- then divided by 26 to give a fortnightly
ation, and lowering rates of absenteeism and staff turnover. While employee motivation salary, or by 12 to give a monthly
will be influenced by a broader issues than remuneration (see Chapter 4), an adequate salary.
level of pay is a necessary condition in attracting and retaining good employees.
Most industries are governed by Awards that set minimum remuneration levels Salary sacrifice is forgoing salary
for workers within those industries. In addition there is a national minimum wage, in order to receive another non-cash
which is the legal minimum that can be paid to any adult employee. Organisations benefit of equivalent value.
can pay their employees above these minimum levels, and can use some of the
following to provide additional incentives:
• financial incentives, such as bonuses, commissions and
allowances, which are paid when an employee achieves
specified goals
• other rewards, such as the use of a company car, laptop
computers, childcare facilities and holidays
• salary sacrifice (also referred to as salary packaging),
where employees sacrifice some of their salary to receive
a benefit such as a car. The item is often purchased out of
their pre-tax salary, making salary sacrifice an attractive
proposition for many employees.
The combination of a base wage and these types of extras form
what is referred to as a ‘remuneration package’. It is important
that any remuneration package is aligned with the strategic and
tactical goals of the organisation, and that additional bonuses are Executive remuneration has been under the spotlight ever since
genuinely earned by employees contributing to the achievement the recent global financial crisis. Previously, many executives
of those goals. In recent years, shareholders of some large public were given exorbitant incentive bonuses based on their
companies have been critical of executive remuneration pack- performance. Now, there has been a switch to guaranteed
financial packages instead of performance based remuneration.
ages that have rewarded senior managers excessively, even when
company performance has been poor.
TeST your understanding 5 The former Governor of the Reserve Bank had
this to say about how top executives have been
1 Not everyone works nine to five these days. List and
rewarded: ‘The biggest misdirected incentive was the
describe at least five different employment arrangements
performance-based pay structures which awarded
that can exist between the employer and employee.
massive bonuses to the management of financial
2 What other types of monetary rewards can be given
institutions on the basis of short-term profit results
to an employee over and above the base wage?
. . . Annual bonuses in the millions or tens of millions
3 What are the National Employment Standards and
of dollars were available to the most successful profit
how do they protect workers?
earners and, of course, were not returnable when
apply your understanding the short-term profits were lost in subsequent years.’
Comment on the pros and cons of offering top
4 What benefits may both the employer and employee executives exorbitant bonuses.
enjoy as a result of making more flexible work 6 Remuneration should reflect the responsibilities and
arrangements available to employees? skills required to do a job. Discuss.

EXTEND YOUR KNOWLEDGE: Employee remuneration —
wage and non-wage costs
Key CoNCepT The total cost of an employee is determined by the wage or

salary paid plus other non-wage (on-costs) employee expenses
As discussed on page 185, the remuneration package is the combination of mon-

etary and non-monetary benefits an employee receives in exchange for their labour.
An organisation will only employ someone if the return is greater than the cost.
The total cost of an employee is not solely the wage or salary paid. The employer
is also responsible for other employee expenses. These expenses are referred to as
On-costs (or non-wage benefits) on-costs (or non-wage benefits), which account for around 30 to 40 per cent of
are additional costs involved in hiring the total remuneration package. The main on-costs include:
an employee, above the cost of their • superannuation
wages, and include superannuation, • occupational health and safety
long service leave and workers’
• long service leave
compensation.
• sick leave
• holiday pay
• study leave
• parental leave
• workers’ compensation
• leave loading.
How much does an employee cost?

When employing new staff, there are many other costs that are not always taken into
account. The following case study reveals that these hidden costs quickly add up.
Cost breakdown Amount ($)

Base salary. This is usually expressed excluding any on-costs, such 50 000
as superannuation.
Superannuation. The employer must pay 9.5 per cent 4 750
superannuation for all employees earning more than $450 in a
calendar month.
Annual leave. Usually four weeks per year. This means that the 3 846
base salary is paid for 48 weeks’ work per year. Annual leave cost at
7.69 per cent (4 weeks/52 weeks).
Public holidays. There are about 10 public holidays in Australia 1 953
each year. This is 3.85 per cent (2/52).
Sick leave. Most awards provide for 10 days each year. This is 1 953
another 3.85 per cent.
Workers’ Compensation Insurance. The rate charged varies broadly 2 500
depending on the risk of the industry. In some instances, it can be
15 per cent. For this example, a rate of 5 per cent will be used.
Payroll tax. This state government tax is levied once an employer’s 2 425
dId yoU KNoW? annual payroll (including superannuation) exceeds a certain amount.
In Victoria, the threshold from July 2010 is $550 000, and the rate is
An extra amount, which is presently 4.85 per cent.
17.5 per cent, is added as a leave
Recruitment. The average cost of recruiting the base-grade 2 500
loading to an employee’s holiday pay. employee is about $5000. This includes the cost of recruiting,
The amount is calculated based on lost production and training the new employee. For this example,
the four weeks’ annual leave that assume the employee stays for two years.
each full-time, permanent employee
Total of on-costs 19 927
is entitled to.

The total on-cost for this ‘average’ employee
is $19 927. Organisations are responsible for
these costs and must budget accordingly.

Therefore, based on this case study, the total
cost of employing someone on a base salary of ❛ . . . the total cost of
$50 000 is $69 927.
The table deals with the most common
employing someone
on-costs for the ‘average’ employee. For on a base salary of
some employees, especially senior executives,
other on-costs can include fringe benefit tax, $50 000 is $69 927.❜
car allowance, housing subsidy, travel and
meal allowance, bonus fee and association
membership fees.
Superannuation — money for later, but

paid for now ❛ . . . all employers
Under the federal Superannuation Guarantee must make a financial
scheme, all employers must make a financial
contribution to a fund for employees’
contribution to a
superannuation (otherwise known as super) fund for employees’
that employees can access when they retire.
Employers are not required to provide superannuation. ❜
superannuation for employees aged under
18 years, employees that work 30 hours or
fewer per week, employees paid less than The aim of superannuation is to give
$450 per month and employees working employees a sum of money that they can
outside Australia. use upon retirement or if they become an
invalid. Superannuation can be given to an
The employer’s main obligation is to
employee’s nominated beneficiary, in the
make a financial contribution — presently,
event of the employee’s death.
9.5 per cent of an employee’s earnings for their
ordinary hours of work — to their employees’
superannuation account. As with taxation,
employers are required to keep records of all superannuation-related transactions,
including payments contributed, payroll and employee records, and the level of
entitlement of each employee.
TeST your understanding 6 Outline what the obligation of employers is towards

employees in relation to superannuation.
1 Refer to the first case study and calculate the
percentage on-costs represent of the base salary.
eXTeNd your understanding
2 Distinguish between ‘annual leave’ and ‘sick leave’.
3 Explain why on-costs are sometimes referred to as 7 ‘As an employer, I prefer to hire casual staff, because
‘hidden costs’ or non-wage costs. it reduces my recruitment and dismissal costs and
4 Identify some of the non-wage costs associated with other on-costs’. In small groups, brainstorm the
senior executives. advantages and disadvantages of employing casual
5 Unscramble the following on-costs, and then write a staff. Present your answer to the rest of the class.
sentence to explain their meanings.
(a) eelav gaoldni
(b) nnuepsnrtoiaau
(c) veale nnluaa

5.4 The maintenance phase of the employment
cycle — induction
Key CoNCepT Induction helps employees to adapt to their new organisation.

In this transition phase there are many new things to learn about how the
organisation operates and the processes that are used.
Beginning work in an organisation means meeting new people and learning how
everything works, and trying to create a good impression at the same time. Soon
Induction is a process of acquainting after candidates join an organisation, they go through the organisation’s induction
new employees with the organisation program. A well-prepared induction program can help an employee through this
— its history, structures, objectives, stressful transition period.
culture, policies and practices — and
the jobs they will perform.
The induction process
The process of induction (sometimes called orientation or even onboarding) introduces
new employees to the job and shows them where they can find the basics they need to
begin the job. An effective induction program is carefully planned to introduce new
employees to the job, their coworkers, the organisation and how it operates. Topics
covered in the induction program include information about the history of the organ-
isation, its culture, general conditions and benefits, training, safety and career paths.
Supervisors, coworkers and the human resources department may be involved
in the induction process. Research shows that most employees who leave an organ-
isation depart in the first six months, so the need for support is greatest when an
employee is new in a job.
INDUCTION CHECKLIST
Employee’s name: Position: Starting date:
About the organisation Tax file number declaration Occupational health and safety
Telephone and email address Sick leave Safety rules and procedures
Organisation chart Hours Safety regulations
History of the organisation Annual leave Protective clothing
Staff facilities Floor plans Lifting and handling
Superannuation Location of facilities — first aid Emergency procedures
Workers compensation room, canteen tea room, toilets, Tour of premises
Training and development staff notice boards Explanation of fire warning system
Welfare policies Work procedures Evacuation plan
Grievance procedures Job description Fire escapes
Conditions of employment Work instructions Restricted areas
Salary and wages Care of organisation’s property Feedback opportunities
Methods of payment Stock requisition Progress in job
Employment tax declaration Maintenance of equipment Performance appraisal
A sample induction checklist — some

subjects that might be covered in the
induction process The benefits of induction
A well-prepared induction program will:
• reduce stress and anxiety that may be associated with starting a new job
• build a new employee’s confidence in the job by:
− assisting the employee to feel part of the organisation
− helping to establish good working relations with coworkers and supervisors
• ensure greater awareness of major safety policies and procedures.

Starting a new job can feel like walking
a tightrope, but a good induction

process can take the fear out of the
experience.
❛ The induction
program provides
employees with a
greater understanding
of their role in the
Victoria Legal Aid — induction training organisation . . .❜
program
New employees at Victoria Legal Aid (an organisation that helps people
with legal problems) must participate in an induction training program. The
purpose of the program is to welcome new employees to the organisation
and ‘settle’ them into the workplace. The program provides employees
with a greater understanding of their role in the organisation and helps
employees to become familiar with their new workplace quickly, in order to
become productive as soon as possible.
The induction program starts with a broad introduction to the
Induction benefits employees and the
organisation by the managing director and divisional manager. Human resource business. The quicker an employee
issues will be discussed, in particular ergonomics and salary packaging. Computer becomes independent, the more likely
training and a visit to the VLA library are also included in the induction process. he or she will enjoy the job and stay
with the organisation.
TeST your understanding and when he would get paid. What his job
really entails? What the work environment
1 What is an induction program?
is like? Where the toilets and canteen are?
2 Why should organisations offer their new employees
Unfortunately, most of the day was focused on
an induction program?
how to beat the competition rather than what he
apply your understanding really needed to survive the first month.
C Grant enjoyed the induction. It gave him a real
3 In principle, induction programs reduce stress, feel for the place, but he did finish the day a little
easing the transition into the workplace for the new confused. He listened to at least three different
employee. Not all induction programs are run properly versions of how to approach his projects from
though. Describe the faults in the following cases. various staff members at different times.
A Joanne arrived at 9.30 am for her induction 4 Think back to a time when you started something
training but no one else was there. The learning new. It may have been a new year at school or you
and development manager finally turned up may have joined a group to learn something new.
with a bundle of manuals for her to read. He Explain the induction process that was used to help
said: ‘That should at least keep you going till you ease into the new situation, and comment on
lunchtime!’ whether or not it was beneficial.
B Lee had many questions he needed answered.
The basics included information such as: How

5.5 The maintenance phase of the employment cycle —
training and development
Key CoNCepTS Giving a person the right knowledge and skills to perform
their job effectively is what training is all about.
Development focuses on preparing the employee to take

on responsibilities within the organisation in the future and
often requires training.
an introduction to training and

development
Training and development are aimed at improving employees’ skills and abilities
— they are necessary for both personal and organisational growth. New employees
may need some training and development, depending on their level of experience.
Existing employees also need training and development to continually upgrade
Training generally refers to the process their skills. Training is teaching staff to perform their job more productively. Devel-
of teaching staff how to do their job opment is the process of preparing employees to take on more responsibilities in
more efficiently and effectively by the future through acquiring better knowledge and skills and gaining more experi-
boosting their knowledge and skills. ence in a particular area. Developing staff often involves training. It is interesting to
note that many employees expect their organisation to provide them with oppor-
Development refers to activities tunities to grow and learn and ultimately improve their employability.
that prepare staff to take on greater
responsibility in the future.
Training
The aim of training is to seek long-term change in employees’ skills, knowledge,
attitudes and behaviour in order to improve work performance in the organ-
isation. However, many organisations do not spend enough on staff training. This
is unfortunate because training and development benefit both the employee and
the employer. These benefits are listed in the table on the opposite page.
dId yoU KNoW?
Ford Australia claims that worker
training has led to halving
absenteeism and reducing labour
turnover.
Life is a continual learning curve and it doesn’t just stop when you’ve finished VCE. You may
go to university or you might start full-time work. In any case you will receive training to help
you gain knowledge and learn skills to work productively.

Importantly, a well-organised and well-presented training program develops and
maintains an organisation’s sustainable competitive advantage. Ongoing training for
all employees is becoming critical due to rapid technological change and global
competition — so critical that many organisations now promote the concept of

a learning organisation. A learning organisation is aware of its actions and its A learning organisation monitors
environment and tries to improve its understanding of the relationship between the and interprets its environment, seeking
two. All employees are involved in developing knowledge and insights that allow to improve its understanding of the
the organisation to continually grow and improve. interrelationship between its actions
and its environment.
Benefits of training
Benefits for employees Benefits for the organisation
Opportunity for promotion and self- Higher productivity through better job performance
improvement and more efficient use of human resources
Improved job satisfaction through Goals and objectives more effectively met
better job performance
A challenge — the chance to learn Reduced costs due to less labour turnover and
new things absenteeism, and fewer errors and accidents
Adaptability — greater ability to A more capable, ‘mobile’ workforce

adapt to and cope with changes
Technology creates the need for

ongoing training
It is the task of the human resource man-
ager to plan for the effective introduc-
tion of new technology. Training needs
must be identified well in advance of
any proposed technological implemen-
tation. This will ensure change happens
at a pace consistent with the capa-
bilities and expectations of the work-
force. It also means human resource
managers must constantly consider the
skills required by the workforce in the
future. The existing workforce must be
trained and, if very rapid technological
change demands it, retrained within a
short time. While training of employees
is often expensive, it cannot be ignored.
Untrained employees will often resist
new technology or not use it effectively.
Types of training Most major hospitals are integrating

A number of training methods are available to organisations: advanced technology into their
• Off-the-job experience: for example, classroom activities, simulations operations and thus have required
• On-the-job experience: for example, coaching, job rotation training for all employees.
• Action learning — learning by experience solving real workplace problems: for
example, NAB and IBM use this form of training
• Competency-based training — identifies skill strengths and areas where fur-
ther training is required
The human resource management function — the employment cycle • CHAPTER 5 191

5.5 The maintenance phase of the employment cycle — training and development
• Training within industry — specifically developing the skills of first-line

supervisors
• Corporate universities — organisations can also form partnerships with aca-
demic institutions to develop training: for example, Coles and Qantas have
forged partnerships with academic institutions
• Training technologies: for example, computer-based training (the computer
becomes a vehicle for learning), multimedia training, web-based training
(training via the Internet).
development
As discussed, developing employees is about preparing them for taking on more
dId yoU KNoW? responsibilities in the future. This is not only good for the employee but crucial for
the employer, who must plan for future human resource needs at both the man-
Training at the communications
agerial and entry levels. Effective development programs ensure staff are retained,
company Motorola is high on the
and that motivation and commitment are enhanced through promotion oppor-
agenda. Every Motorola employee
tunities for all employees over the longer term. Training is a big part of developing
must complete at least 40 hours of
staff and assisting them to reach their true potential.
training a year.
How an employee is developed in an organisation will depend on the organisa-
tion’s needs as well as the employee’s career stage. In the early stages of an employ-
ee’s career, the focus may be on gaining qualifications. As they move from one
employment area to another, younger employees focus on experiencing a variety
of roles to determine their interests and talents. Later, developing specialist or
managerial competencies may become important as employees move into senior
positions.
Programs aimed specifically at developing effective managers may focus on the
use of:
• job rotation — the employee experiences many different aspects of an organ-
isation. For example, a manager may move from one section of the business
to another, taking with them their management skills and applying them to a
different situation. In theory this is supposed to reduce boredom because the
employee is exposed to new situations and is given plenty of variety.
• mentoring — a mentor acts a bit like a coach, supporting the employee as they
learn. The employee is able to gain from the experience and skills of another
person in the organisation.
• formal business training — this may be done through programs such as the
Masters of Business Administration (MBA).
Succession planning focuses on Closely related to developing staff is the concept of succession planning. Suc-
preparing employees with potential cession planning is ensuring that there are managers in the organisation who can
to take on key management positions step into senior management positions, if for some reason a vacancy occurs. This
within the organisation in the future, is particularly important for many organisations, because some management roles
should the need arise.
require specific skills and a detailed knowledge of how the organisation operates. It
may take years of grooming the right person to ensure that when a senior manager
does move on, there is someone to take his or her place.

1 Distinguish between the terms ‘training’ and 4 What are the benefits to an organisation of
‘development’. promoting a ‘learning organisation’ concept?
2 Outline how training and development can benefit 5 Use the Succession planning weblinks eBook plus
both the employee and the employer. in your eBookPLUS to define succession
3 Distinguish between informal on-the-job training planning and state why many organisations
and formal off-the-job training. undertake succession planning.

recognition and reward
Key CoNCepT Recognising and rewarding employee performance is used as a

way for organisations to become more productive.
recognition and reward programs

When did someone last take time to praise you for a job well done and how did
it make you feel? In the workplace, an effective recognition and reward pro- Recognition and reward programs
gram should help to attract, retain and motivate employees. Recognition refers to aim at both acknowledging the work
acknowledging the fact that an employee has performed well. Acknowledgement an employee has done and providing
may involve giving the employee a reward, such as a bonus, in exchange for doing some sort of benefit, such as cash,
a good job. merchandise, travel or gift certificates,
in return for a job well done.
A recognition and rewards system can also reinforce strategies that will facilitate
change or support desirable corporate values, such as a focus on the customer.
For example, BHP Billiton offers employee awards in categories such as health,
safety, the environment and community to recognise employees who demonstrate
company values and go beyond their day-to-day job requirements to care for their
fellow employees, the community and the environment.
dId yoU KNoW?
A survey conducted by the company
RedBalloon found that employees
said they would contribute more
to their organisation if they were
rewarded for their efforts.
Recognition might just be a pat on

the back for a job well done. Many
organisations, though, now have formal
reward and recognition programs so
that employees who perform well are
rewarded and encouraged to continue
the good work.

5.6 The maintenance phase of the employment cycle — recognition and reward
Total reward system

Intrinsic rewards associated Extrinsic rewards associated

with job (non-monetary) with job (monetary/non-monetary)
Job Environment Direct (cash) Indirect (fringe benefits)

• Interesting work • Good policies and • Wages • Insurance
• Challenge practices • Salary • Holidays
• Responsibility • Leadership/supervision • Commissions • Child care
• Recognition/feedback is effective • Incentive and • Medical/health costs
• Promotion • Good relationships performance • Employee assistance
• Autonomy in job with coworkers – bonus plans • Flexible work schedules
• Sense of achievement • Safe and healthy work – share plan • Free legal advice
environment – pay increase • Personal loans at cheap
• Fair treatment – group proﬁt rates
• Club membership sharing • Moving expenses
• Social activities (gainsharing) • Training expenses/time
• Recognition, praise Non-cash off
• Individual awards • Company car
• Group awards • Parking space
• Discount purchases and
Features of reward systems privileges
Rewards can be monetary or non-monetary, and intrinsic or extrinsic (see the

Intrinsic rewards come from the task figure above). Intrinsic rewards are those that the individual derives from the task
or job itself, such as recognition or itself, such as a sense of achievement. Extrinsic rewards are those given or provided
feedback or a sense of achievement.
outside the job. They may be monetary (for example, incentive payments) or non-
monetary (for example, flexible work schedules).
Extrinsic rewards are outside the job
Sometimes organisations use profit sharing to reward their employees.
itself. They may be monetary or non-
monetary.
Employees may be offered shares, annual bonuses or performance payments
based on output, sales, profits or other indicators. Profit sharing or employee
share plans are often used to promote a culture that values quality, customer
service, participation or teamwork. Reward systems are also increasingly linked
to performance management through enterprise bargaining and individual
contracts.
Developing a recognition and

reward program
A reward system should aim to motivate staff and be equitable, clearly com-
municated, defensible, consistent, relevant, cost-effective and integrated with
corporate strategy. Managers can also link rewards with performance and skills
recognised in the marketplace, using job evaluations (based on job descrip-
tions, specifications and performance appraisals), comparison with other similar
employers and analysis of statistics and surveys compiled by recruitment
agencies.
Relating performance-based pay to teamwork may provide a clear focus for
employees and reward high-performing employees for their efforts. Some argue
that businesses may use performance incentive systems as a substitute for more
important motivation strategies, such as improved job design, employee partici-
pation and feedback to employees about their work.

The human resource manager can use many tools in developing a reward
system. For example, a grid or matrix could be drawn up to assess the objectives
of each reward and the overall effectiveness of the system, such as the one shown
in the following figure.

A rewards matrix for an organisation
Reward objectives
Employee Employee Individual Employee Company

Reward component attraction retention Productivity contribution security performance
Base salary ✓ ✓
Gainsharing plan ✓
Performance incentive ✓ ✓ ✓
Corporate profit share ✓ ✓
Superannuation ✓ ✓
Other benefits ✓ ✓
Career planning ✓ ✓ ✓
It is important to note that performance-based rewards may lead to problems,

if some individuals believe they work harder than others in teams without recog-
nition of their efforts. They may also lead to competition between workers, rather
than cooperation. For some employees, productivity or job performance may be
difficult to measure and reward. Employees must perceive the system as fair and
equitable, otherwise increases in industrial unrest or employee turnover may result.

1 Distinguish between ‘intrinsic’ and ‘extrinsic’ rewards 4 Read the following scenarios and state:
in each of the following examples: (i) the problems that can occur with this
(a) Chris’s new task in his role as chief research recognition and reward system
officer is to determine how the business can (ii) how each of these problems might be
grow online. He finds this an exciting challenge overcome.
and a change from his usual work. A Jamila was given the employee of the month
(b) Jane just loves working in an organisation that is award but Deanne said that was because she was
so caring and well managed. the boss’s favourite.
(c) In her new job, Louise is excited to find that she B Pete has given up trying because he thinks
has been given a car park in the building and he does not have a hope of ever receiving a
also a corporate discount card that entitles her to reward in his company’s recognition and reward
a 5 per cent discount on petrol. program.
2 What is ‘profit sharing’? Why is it used by C Jaz thinks that only those who are good at self-
businesses? promotion ever get the rewards. It is not about
3 Imagine you are conducting a survey into the the work done, it is about who can promote
effectiveness of an organisation’s system of rewards themselves the most.
and benefits. How would you evaluate the rewards 5 Comment on the following statement: ‘When
system? Identify the criteria you would use. people say they want reward and recognition they
really just want a pay increase and that’s all.’
6 Gainsharing is a group employee reward system where
the group shares the benefits of any productivity
improvements. Examples include the Scanlon Plan,
the Rucker Plan and Improshare™. Using the Internet,
research one of these gainsharing plans, stating its
main features and why it may be beneficial.

performance management
Key CoNCepT Managing how well an organisation performs relies on many

factors, such as its performance appraisal system; and the way the organisation
designs jobs, recruits and selects staff, trains staff and provides appropriate
reward and recognition.
performance management
Performance management focuses Performance management aims to improve both organisational and individual
on improving both organisational and employee performance by relating the organisation’s performance objectives to
individual performance through relating the employee’s performance objectives. For example, if a food company wishes to
organisational performance objectives increase market share, it might develop a new and exciting range of ‘heat and eat’
to individual employee performance
meals. The advertising manager would then have the task of promoting these new
objectives.
products, and his or her objective might be to create an advertising campaign that
increases sales by 10 per cent in the first year. In addition, sales representatives
would have a performance objective of selling 10 per cent more product than the
previous year.
Performance management is about improving

organisational and individual performance. If
individuals are performing well, chances are
the organisation should perform well too.
Performance management is about setting objectives that help the orginisation

achieve its overall objective. Effective performance management looks at whether
jobs are well designed and employees with the right skills are hired to undertake
Performance appraisal is the formal
assessment of how efficiently and
work. Training as well as appropriate reward and recognition programs also increase
effectively an employee is performing the likelihood that performance in the whole organisation is managed appropriately.
their role in the organisation. Managing an employee’s individual performance in the organisation is referred to as
performance appraisal, and it too is a crucial part of performance management.

Performance appraisal
Performance appraisal involves five main objectives:
1 to provide feedback from management to employees regarding work performance

2 to act as a measurement against which promotion and pay rises can be determined
3 to help the organisation monitor its employee selection
4 to identify employees’ training and development needs
5 to identify new objectives and put a plan in place to improve future performance. dId yoU KNoW?
If most employees continually perform below expectations, the organisation’s The recruitment firm Hudson found
recruitment and selection process may need to be changed, or extra training and that 42 per cent of Australian
development may be required. Although many managers are uncomfortable with employers did not have a way of
the idea of evaluating employees, effective performance appraisal is a crucial func- monitoring staff performance.
tion of good management.
Regular feedback equals successful

performance appraisal
While the end of the financial year provides organisations
with an opportunity to do a “stocktake” on their financial
performance, equally important, but often overlooked, are
regular reviews of the team’s performance.
It is often said employees are the most important asset.
If this is accepted, it would also stand to reason that people
leaders would also review the performance of their employees.
...
Performance reviews [or appraisals] are a key aspect of keeping
your team engaged and ‘buying in’ to what the business is
trying to achieve. However, for some – both people leaders and
employees — performance appraisals can be seen as a tiresome
and difficult process, but it need not be.
When both parties know what is expected of them, a
performance review should not contain any nasty surprises.
However, lack of clear expectations is often where problems begin.
Most employees have a strong work ethic and want to do well . . .
Notwithstanding, feedback from peers and people leaders is an important gauge for
what an employee is doing well and what areas need development.
❛ A monthly catch up is
It is important to remember that feedback should not happen only at the end of the a good starting point
year in the form of an official performance appraisal. Feedback should happen regularly
to ensure all parties are on the same page and any issues can be addressed quickly. to review not . . . only
. . . this four step process of performance management has traditionally worked
well for setting employees up to achieve the best possible results.
what is being achieved,
Step 1. Ensure expectations are clear, for no other reason than employees are
but also . . . how it is
typically more productive when they know what is expected of them and when. These being achieved.❜
expectations may be set on a weekly basis but also typically cover a longer term, say
half yearly or yearly. Some employers fall into the trap of assuming that their staff
know what is expected of them. As a people leader, it is your responsibility to be clear.
Step 2. Assess performance regularly. Some people leaders complete an annual
performance review and think their job as a people leader is done. Of course, an
annual performance review is important to discuss what has been achieved over
the year, but performance should be assessed on a regular basis to make sure
projects are on track, milestones are being met and any queries resolved. A monthly
catch up is a good starting point, to review . . . not only what is being achieved, but
also . . . how it is being achieved.
(continued)

5.7 The maintenance phase of the employment cycle — performance management
Step 3. Provide feedback on a regular basis. Ideally, you should not need a formal
catch up to provide feedback, but it is imperative that feedback is provided
when performance is assessed. Feedback should include recognition of the

effort, improvements and achievements throughout the past month, quarter or
year, which is an excellent motivator for many employees. This is also the time
to provide constructive feedback for development areas. Providing constructive
feedback to highlight and bridge performance gaps, if delivered in the right way,
can be equally motivating, as most employees want to continually improve their
knowledge and skills.
Step 4. Continuous development will keep employees engaged and will ultimately
result in increased productivity. Development planning looks not only at what the
employee needs to do to complete their current role, but also helps to up-skill them
for their next role. Development means different things to different people, but
typically encompasses learning new skills on the job, mentoring, new responsibilities
or stretch targets and formal courses.
Source: Extracts from ‘The benefits of performance reviews’,
www.probonoaustralia.com.au/news/2014/06/benefits-performance-reviews.
Common methods of appraisal

One widely used performance appraisal technique is management by objectives,
where the employer and employee discuss and agree on the objectives to be evalu-
ated. The employee’s progress is reviewed periodically and, if needed, corrective
measures are implemented.
There are other appraisal techniques, such as:
• Essay method. A manager keeps a journal on
each employee being appraised. Notes may
be restricted to specific aspects of job perfor-
mance, such as customer service, sales, per-
sonal presentation and cash register use.
• Critical incident method. This is similar to the
essay method except that the manager records
only exceptionally good or bad aspects of
work performance.
• Comparison method. Each employee is ranked
according to a list of predetermined perfor-
mance characteristics. This method often
incorporates statistical values as a means of
measurement. For example, a rating scale of
1 to 5 may be employed (1 being poor and
5 being excellent). This scale may be used to
For performance appraisals to be
assess knowledge, speed, accuracy, communication, interpersonal skills, oral and
effective, employees have to know
what is expected of them, how their written skills, personal presentation and administration techniques.
performance will be measured and No matter which appraisal technique is used, the results should be discussed
feel confident that their efforts will with the employee as soon as possible. The manager should explain both the
be recognised. positive and the negative aspects of an employee’s performance, encourage the
employee to continue with his or her positive behaviour, and let the employee
know what to do to be recognised as a more productive employee in the future.
Performance feedback is the Without this performance feedback, performance appraisals are a pointless
information provided to an employee exercise.
after a performance appraisal. The most crucial aspect of any performance appraisal method is for the process
to be completely objective. Performance based on the opinion of one person can
often be subjective and open to manipulation. The article opposite also sheds some
light on the recipe for a good appraisal system.

Surprise! It’s performance appraisal time
A performance appraisal should be the opportunity for a leader in an organisation

to set the development opportunities for their employees alight. It should be an
invigorating, refreshing occasion.
Admittedly, sometimes it may be a tough experience as some home truths are formally
shared about performance and leadership. But it should never, never be a surprise.
Many organisations fail the most rudimentary test of a good performance
appraisal system. The system becomes routine. A tick the box exercise that has as
much to do about developing people’s performance as macroeconomic theory has to ❛ A performance
do with customer service.
Performance appraisal systems that are routine and more about the system than
appraisal . . . should
the systemic and systematic development of people are a failure, and should be be an invigorating,
stopped and overhauled for the good of the organisation.
A good performance appraisal system will have coaching at the heart of its refreshing occasion. ❜
structure and application. If an organisation has not set about teaching their leaders
how to coach, it is not serious about having a performance appraisal system.
Not many people are naturally good coaches. They need to be trained. They need to
be able to comprehend that the appraisal is not about them, but about the employee.
The key to a successful appraisal is having the employee believe they have performance
gaps and that rewards will come through closing the gaps. Belief is a powerful motivator.
Source: Extracts from ‘Surprise! It’s performance appraisal time’,
www.changefactory.com.au.
TeST your understanding 10 Survey five people, asking them to respond to the
following statements. Collate the results as a class
1 Distinguish between performance management and
and write a paragraph about what the survey has
performance appraisal.
revealed about performance appraisal.
2 Read ‘Regular feedback equals successful
performance appraisal’. What are the benefits of a
regular informal catch up with employees? Yes No
3 How does the author of ‘Regular feedback
1 When appraising work,
equals successful performance appraisal’ believe
everyone should be
performance appraisals can contribute to ongoing
given the same score.
employee development?
4 Briefly outline four common methods used to 2 If the organisation as
conduct a performance appraisal. a whole has not made
5 Outline why it is important to provide feedback after a profit, no employee
a performance appraisal session. should receive a bonus.
6 Explain the benefits, both to an employer and an
employee, of a good performance appraisal system. 3 Poor performers should
7 According to the article ‘Surprise! It’s performance be sifted out and
appraisal time’, why do so many organisations fail sacked.
when it comes to providing a good performance
4 Pay increases
appraisal system?
should be linked
to good individual
apply your understanding performance.
8 Have you been asked to appraise your own learning
or performance? Research how self-appraisal could be 5 A good rating in a
used as a part of a performance appraisal process. performance review
9 Use the 360-degree feedback is more likely to
weblinks in your eBookPLUS to eBook plus reveal excellent self-
explain what this feedback is promotion skills than
and why it might be beneficial to anything else.
the employee and employer.

5.8 The termination phase of the employment cycle
Key CoNCepT The final stage in the employment cycle is the ‘termination
stage’, in which workers leave the workplace on a voluntary or involuntary basis.
This stage needs to be handled carefully and sensitively by the human resource
manager.
Termination of employment and

how it is managed
Gone are the days when a person would commence their full-time working life at
the age of 16 or 17, work for approximately 45 years, and then retire. Work patterns
and organisational operations have undergone radical change over the past two dec-
ades and this has dramatically altered the movement of people into and out of jobs.
Due to increased international competition, many organisations — large, medium
and small — have been forced to restructure. As a result, there has been a marked
increase in the number of voluntary and involuntary redundancies being offered.
Termination is the ending of the Termination of employment is when an employee leaves a particular work-
employment of an employee. place, ending the employment relationship. Termination of employment is usually
managed by the human resource manager, who must ensure that the employee is
treated both fairly and within the law.
There are many reasons why employees leave an organisation. However, it is
possible to classify the different types of separation into two broad categories: vol-
untary and involuntary (shown in the following figure).
Types of separation
Voluntary Involuntary
Retirement Retrenchment
Resignation Dismissal
Redundancy
Termination — voluntary and involuntary
Retirement
Retirement occurs when an employee Retirement is when an employee voluntarily leaves the workplace and the work-
decides to give up full-time or part- force. Until the mid-1980s, it was common for men to retire once they reached
time work and no longer be part of the 65 years of age and women when they reached 60 years of age. Since changes to
labour force. legislation in the 1990s, there has been no ‘official’ retirement age. People now can
choose when they would like to retire. A recent trend is for people to retire ‘early’
— that is, in their mid- to late 50s. The way businesses have approached employee
retirement has also changed. Today, many organisations provide advice and assis-
tance to employees to help them prepare for retirement.

An employee may leave an organisation for many reasons. If an employee is retrenched (laid
off) or dismissed, it can lead to feelings of disappointment and rejection. Fear of not getting
a replacement job and being able to pay the bills make termination difficult to bear for some
people.
Resignation
Resignation, or ‘quitting’, is a voluntary ending of the employment relationship.
Resignation is the voluntary ending of
People resign for a variety of reasons, including:
employment by the employee ‘quitting’
• the offer of a promotion with another business their job.
• to start their own business
• boredom with their present job
• a change of lifestyle.
Usually, the employee needs to give the employer sufficient notice of his or her
intention to resign. The length of notice varies from job to job, ranging from a few
hours for casual employees to a month for some professionals.
Whenever an organisation wants to downsize — that is, decrease the size of its
operation — it will not fill vacancies that have come about due to retirements and
resignations.
Redundancy — voluntary and involuntary

Redundancy occurs when the job a person does is no longer necessary, usually Redundancy occurs when a
due to technological changes, restructuring or a merger or acquisition. Unless person’s job no longer exists, usually
the existing employee can be retrained for another job, he or she will be made due to technological changes, an
redundant. organisational restructure or a merger
Redundancy can be either voluntary or involuntary. Voluntary redundancy or acquisition.
occurs when the organisation wishes to reduce either the size or the nature of its
workforce, and decides how many employees should be ‘let go’. Employees are
informed of the situation and given the opportunity to nominate themselves for

5.8 The termination phase of the employment cycle
voluntary redundancy. Involuntary redundancy occurs when an employee is asked

to leave the business against his or her will. In this case, the employee is not at
fault in any way; the decision to make the employee redundant is purely based on
the ongoing needs of the organisation.

Retrenchment occurs when a business Retrenchment is sometimes called redundancy, but there is a subtle difference
dismisses an employee because there between the two terms. Redundancy occurs due to the permanent elimination of
is not enough work to justify paying some jobs, because organisational or technological change has removed the need
them. for those particular skills. Retrenchment is employee termination due to lack of
sufficient work to keep the employee fully occupied. Retrenchment is a cyclical
phenomenon tied closely to the level of economic activity. The end result of both
retrenchment and redundancy is that the employee is out of a job.
The HR manager must be aware of the rights of an employee in relation to
redundancy and retrenchment, and must follow the correct procedures. These
procedures might include providing necessary information to the employee being
made redundant or retrenched, a consultation process, time off leading up to the
final day when the employee leaves, and organising redundancy pay (sometimes
referred to as severance pay). The amount of redundancy pay will usually depend
on how long the employee has been continuously employed in that workplace.
Other entitlements, such as payment for accrued annual leave or long-service leave,
may also be owing to the employee when they leave the organisation.
Dismissal
There will be occasions when the behaviour of an employee is unacceptable and it
then becomes necessary for an organisation to terminate the employment contract
Dismissal occurs when the behaviour of that employee. This is called dismissal. The most serious form of dismissal is
of an employee is unacceptable and summary dismissal — when an employee commits a serious breach of their employ-
an organisation terminates their ment contract. For example, an employee who is drunk at work or is found to have
employment. engaged in criminal activity may be summarily dismissed. If an employee is given
a summary dismissal, no notice is required. Another form of dismissal is referred
to as dismissal on notice, when an employee is not performing the job satisfactorily.
Poor performance may be identified during an appraisal or performance process.
The amount of notice (or payment given in lieu of notice) will vary depending on
a number of factors, such as whether the employee is governed by a particular
dId yoU KNoW? award or contract, the age of the employee and how long they have worked for the
An employment contract is legally
employer on a continuous basis.
binding. Therefore, employers must
Selecting staff for dismissal can be risky and requires awareness of legislation
terminate the contract in a legally and industrial agreements to avoid litigation and industrial action. Employees
compliant manner. Gone are the must be given proper notice and employers must comply with procedures estab-
days when a boss can simply shout: lished in law, including the unfair dismissal laws in the Fair Work Act 2009.
‘You’re fired!’ on a whim. To avoid misunderstandings, written warnings and/or notice is preferable.
Written confirmation of resignation is also preferable to verbal statements made
in the ‘heat of the moment’. This way, a lengthy unfair dismissal case can be
avoided.
Unfair dismissal is when an employee Unfair dismissal occurs when an employer dismisses an employee for discrimi-
is dismissed because the employer has natory reasons. This is an issue that both employers and HR managers need to
discriminated against them in some be aware of. Some examples of discrimination under Commonwealth workplace
way, such as firing someone because relations laws include dismissal because of:
she is pregnant.
• absence from work due to illness or injury
• either belonging or not belonging to a trade union
• race, colour, sex, sexual preference, age, disability, marital status, family res-
ponsibilities, pregnancy, religion, political opinions held, or nationality.
An employee who believes they have been unfairly dismissed may lodge an
unfair dismissal claim with an industrial tribunal.

dId yoU KNoW?
Many colloquialisms are used to
describe involuntary termination:

‘given the bullet’, ‘shown the front
door’, ‘fired’, ‘booted out’, ‘told to
pick up my pay and go’, ‘no longer
An inappropriate dismissal technique required’ and ‘given an offer I couldn’t
refuse’. They all have one feature in
Unfairly dismissed for rescuing a kitten common: the business requests that
the employee leave the organisation.
In August 2012, Fair Work Australia found that a cleaner who found a kitten at her
work and gave it to a friend was unfairly dismissed for doing so. Judith Montague
was working as a cleaner at student accommodation in Carlton when she found a ❛ Ms Montague’s
kitten that Melbourne City Council workers had been attempting to rescue from a
drain. She had been lead to believe that she would be allowed to keep the kitten if it employer had failed
escaped. However, when it was discovered she had taken the kitten, council workers
were upset she had done so, which resulted in her employer dismissing her.
to follow the Small
The Fair Work Australia Commissioner pointed out that Ms Montague’s employer Business Fair Dismissal
had failed to follow the Small Business Fair Dismissal Code by not issuing a warning
before dismissing her. He found the dismissal to be ‘harsh, unjust and unreasonable’ Code by not issuing
and ordered the employer to pay $3940 to Ms Montague.
The employer had offered Ms Montague two weeks pay in lieu of notice, and had
a warning before
later increased it to five weeks pay. Ms Montague pointed out that she had barely dismissing her.❜
worked since the dismissal, and had few prospects of gaining new employment.
More organisations are recognising that managers need to be trained to handle

dismissals in a way that:
• takes account of the legal and financial implications
• minimises the trauma for both parties
• does not have adverse effects on the morale of the remaining staff.

1 Explain the difference between voluntary and 5 Termination management is about managing the final
involuntary termination, giving examples of each. phase of the employment cycle, when the employee
2 Which of the following scenarios would most likely leaves. Give a general outline of the issues an HR manager
lead to summary dismissal? must be aware of when dismissing an employee.
A John bribed another employee not to tell 6 In August 2008, workers at SPC Ardmona in the
his manager that he had been accessing Goulburn Valley were informed that 60 retrenchments
pornographic websites during office hours. were to occur, because the strong Australian dollar
B Peter arrives for work totally drunk. He has just had meant a drop in exports, and there was a
been out to see a client, driving a company car. It fruit shortage due to the drought. The company
is the third time this week he has arrived in such a employed 450 workers in three plants in the region.
condition. SPC Ardmona chief executive, Nigel Garrard, said
C Jane is just not very good at her job. She at the time that initially the redundancies would be
frequently makes mistakes and does not have voluntary and workers would be offered deployment to
the knowledge or skills to perform the job different sites.
satisfactorily. (a) Explain what Nigel Garrard meant when he said
3 What are some of the entitlements of employees that initially redundancies would be voluntary.
who are made redundant or retrenched? (b) Predict the possible impact on staff who
4 In which situations would a dismissal be considered volunteer for redundancy and those who remain.
unfair? 7 Use the Termination of employment weblink in your
eBookPLUS to summarise the latest employee rights eBook plus
and rules that apply to termination of employment.

CHAPTER 5 review
eBook plus Summary

The establishment phase of the employment cycle — human
digital doc: resource planning, job analysis and job design

Glossary • The three phases of the employment cycle are establishment, maintenance and
Download a glossary of key termination.
terms from this chapter. • An organisation’s business strategy will dictate what human resources are needed to
Searchlight ID: DOC-5968 ensure organisational objectives are met.
• Job analysis involves defining what duties must be performed as well as factors such as
the time that will be required to complete the job and working conditions required.
• A job description outlines the duties involved in performing a particular job and a job
specification focuses on who is needed to do the job in terms of their knowledge, skills
and qualifications.
The establishment phase of the employment cycle —
recruitment and selection
• Recruitment involves attracting suitable applicants to apply for a job and selection
involves choosing the right applicant to fill the position.
• Internal recruitment involves choosing an applicant from within the organisation.
External recruitment involves recruiting from outside the organisation.
The establishment phase of the employment cycle —
employment arrangements and remuneration
• Employment arrangements vary and can include full-time work, part-time work and
casual work. Sometimes an organisation uses an independent contractor to perform
work. Employment arrangements may also vary in terms of where work is performed
and the hours that are worked.
• Remuneration refers to what the employee is paid in return for work and may include,
for example, base pay, bonuses and allowances.
The maintenance phase of the employment cycle — induction

• Induction is the first part of the maintenance phase in the employment cycle and
involves providing the employee with a good introduction to the organisation. Typical
topics covered in induction may include the history of the organisation, its culture,
safety and work processes.
The maintenance phase of the employment cycle — training and
development
• Training involves learning how to do a job more effectively. The aim is to increase the
person’s knowledge and skills.
• Development focuses on preparing the employee to take on more responsibility in the
future and can involve training.
The maintenance phase of the employment cycle — recognition
and reward
• Recognising employee achievement and providing monetary and non-monetary rewards is
aimed at keeping the employee motivated and working productively in the future.
The maintenance phase of the employment cycle — performance
management
• Performance management is about managing the performance of individual employees
and the organisation as a whole to ensure objectives are met. It involves good job
design and hiring the right people to perform well for the organisation, as well as
performance appraisal (monitoring the performance of the employee).
The termination phase of the employment cycle
• Termination of employment is the final phase of the employment cycle. An employee
may leave the organisation voluntarily through resignation, retirement or accepting
redundancy. Sometimes an employee will be forced to leave the organisation because
they have been made redundant or have been dismissed.

review questions eBook plus
TeST your understanding
digital docs:
1 Name the three stages of the employment cycle.
2 Why is HR planning important? Missing word
glossary quiz
3 How can a ‘job analysis’ be conducted?
Test your knowledge of key
4 Are the following part of a job description or job specification?
terms from this chapter.
(a) hours to be worked
Searchlight ID: DOC-5969
(b) number of years of experience
(c) the need for negotiation skills Crossword
(d) prepare weekly customer invoices Check your understanding
(e) conduct team meetings by completing this crossword
(f) ability to relate to others in the workplace on key concepts from this
5 What are three ways you could provide recognition for the efforts of your chapter.
employees? Searchlight ID: DOC-5970
6 A performance appraisal of a worker indicates a lack of computer competency. What
should the organisation do about this?
7 How would becoming a training organisation save the organisation money?
apply your understanding

8 After HR planning at the Melbourne Football Club, some job vacancies are to be
advertised.
(a) Prepare a job advertisement for ‘Head Trainer’ at the Melbourne FC.
(b) How and where would you advertise this position?
(c) What would you do once the applications have been received?
(d) How would you structure the interviews for this job? For example, number of
interviewees, who will conduct the interview, etc.
(e) What employment arrangements would you offer the successful applicant?
9 Compare ‘voluntary’ and ‘involuntary’ departures in terms of:
• how difficult each is for the organisation to manage
• effects on the company
• effects on the staff leaving
• effects on the staff remaining.
10 Read the following hypothetical case study and explain in one paragraph why
Natasha’s termination was handled inappropriately.
Natasha had been employed by Top Line Printers Ltd for 12 years. During this time,
she had worked at a number of different jobs in the factory. In her last position as
a clerk, she received a very poor assessment from her supervisor. He complained
about her performance and warned her that if it did not improve she might be
dismissed.
Prior to her job as a clerk, she worked in the graphic design section of the
organisation. Because she is a creative person, she enjoyed this work and received
many favourable comments from her customers. However, for economic reasons,
the graphic design section was closed and all the employees were given other jobs
within the company. Natasha was given the clerk’s job in the personnel records
section.
One Friday afternoon, she was called in to her supervisor’s office. She was
told that another supervisor had complained to him about her poor performance
and that her services were no longer required. Natasha was not aware of any
other complaint about her. She had never been given any written advice that her
service was unsatisfactory. However, the supervisor’s decision was final. She was
dismissed.

exam questions For additional
VCE examination
questions, go to
www.studyON.com.au
eBook plus
School-assessed coursework
digital docs:
Exam questions oUTCome 1
Complete your end-of-chapter analyse and evaluate practices and processes related to human
exam questions in Microsoft resource management.
Word.
aSSeSSmeNT task — structured questions
School-assessed coursework
Time allowed: 50 minutes
Complete your end-of-chapter
Marks allocated: 20 marks (the marks for each question are indicated at the end of each
school-assessed coursework in
Microsoft Word. question)
Conditions: closed book (no notes or textbooks may be used when completing
this task)

1 Explain the link between ‘performance appraisal’ and ‘training and
development’ of staff. 2 marks
2 What are three possible outcomes of a performance appraisal? 2 marks
3 Do you agree with these statements? Explain your response.

(a) The establishment phase of the employment cycle includes planning
HR needs, recruitment and training.
(b) Recruitment is best done from inside the organisation. 4 marks
4 Distinguish between the following terms:
(a) Dismissal and retrenchment
(b) Performance management and performance appraisal. 4 marks
5 Examine this advertisement and answer the questions that follow.
POSITION VACANT
DOMESTIC
LIVE-IN HOUSEKEEPER/CARER
A live-in position for a HOUSEKEEPER/
CARER is available in the Geelong
area with an elderly couple.
Duties include: preparation of mid-day
and evening meals, supervision of
personal care, light house duties,
transport locally and to Melbourne,
help with correspondence.
Essential: experience working with
elderly people, current first aid certificate,
current Victorian driver licence.
This position is 5 days a week and
includes a self-contained 1 bedroom
unit. Wages are negotiable.
For an information package and appli-
cation form please contact 5221 6262
and ask for Janice.
(a) List four other methods of advertising this position. 1 mark

(b) For the position of the housekeeper/carer, give an example of something
that could be listed in the job description and the job specifications.
Job description:
Job specifications: 2 marks
(c) Once the applications have been received by the Human Resource
Manager, explain the next step in the recruitment process. 2 marks
(d) Identify two reasons why it is important to select the ‘right person’
for the position advertised. 1 mark
6 List two examples of ‘on-the-job’ training and two examples of ‘off-the-job’
training.
On-the-job:
Off-the-job: 2 marks

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Chapter 5

The human resource

the employment cycle

What you will learn

MANAGEMENT PRACTICES AND

172 UNIT 4 • Managing people and change

c05TheHumanResourceManagementFunction—TheEmploymentCycle 172 17 September 2014 10:47 AM

Bupa Health Dialog — a top employer

c05TheHumanResourceManagementFunction—TheEmploymentCycle 173 17 September 2014 10:47 AM

Key CoNCepT Before advertising a staff position, an organisation needs to

filled and what those jobs entail.

• Staff planning in line with business

3. Termination phase 2. Maintenance phase

• Termination management — • Induction

Phases of the human resource/staffing process and their related activities

174 UNIT 4 • Managing people and change

c05TheHumanResourceManagementFunction—TheEmploymentCycle 174 17 September 2014 10:47 AM

human resource planning

c05TheHumanResourceManagementFunction—TheEmploymentCycle 175 17 September 2014 10:47 AM

GRAPHIC DESIGNER (Ar tists)

An example of a job description and a job specification

Job design details the number, kind Job design

176 UNIT 4 • Managing people and change

c05TheHumanResourceManagementFunction—TheEmploymentCycle 176 17 September 2014 10:47 AM

Job design for motivation

c05TheHumanResourceManagementFunction—TheEmploymentCycle 177 17 September 2014 10:47 AM

person for the job is selected.

The main sources of employees for an organisation

178 UNIT 4 • Managing people and change

c05TheHumanResourceManagementFunction—TheEmploymentCycle 178 17 September 2014 10:47 AM

‘Headhunters’ will usually be aware

Outsourcing the hunt for the right ❛ . . . employers see the

Mission Australia Employment Solutions will attract

c05TheHumanResourceManagementFunction—TheEmploymentCycle 179 17 September 2014 10:47 AM

180 UNIT 4 • Managing people and change

c05TheHumanResourceManagementFunction—TheEmploymentCycle 180 17 September 2014 10:47 AM

After gathering information about each

Offer job to Referee Interviews

Steps in a typical recuritment and selection process

c05TheHumanResourceManagementFunction—TheEmploymentCycle 181 17 September 2014 10:47 AM

praCTISe • apply human resource management knowledge and concepts to practical

Direct discrimination Indirect discrimination

Direct and indirect discrimination

Discrimination during family leave

182 UNIT 4 • Managing people and change

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discriminate against pregnant women, and do not respect

TeST your understanding apply your understanding

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Key CoNCepT Employers offer a variety of employment arrangements and ways

Full-time Part-time Can be full- Agreed Usually No set

Most secure form Least secure form

Different employment arrangements

184 UNIT 4 • Managing people and change

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Key CoNCepT The total cost of an employee is determined by the wage or

As discussed on page 185, the remuneration package is the combination of mon-

How much does an employee cost?

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