Business Studies in Action: HSC Course 3rd edition
Chapter summaries
Topic 4: Employment relations
Chapter 15 Effective employment relations

Most organisations that are successful in the long term maintain a balance
between concern for success (expansion and profit) and regard for their
employees.

Well-managed employees ensure efficient and effective use is made of their
skills, time and working relationships.

Effective employment relations provide the competitive edge as similar raw
materials, technology and business systems become common to all organisations
in a global marketplace.

Managing employment relations effectively involves the following activities:
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Human resource planning: determining future needs, and changes to the
internal and external environment.
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Recruitment: locating and attracting the right quantity of staff to apply for
employment vacancies or anticipated vacancies.
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Selection: gathering information about each applicant for a position and
then using that information to choose the most appropriate applicant.
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Placement: locating the employee in a position that best suits the needs
and utilises the skills of the individual.
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Training and development: training develops skills, knowledge and
attitudes; development focuses on enhancing the skills of the employee to
allow them to accept promotion within the organisation.
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Rewards management: the provision of monetary and non-monetary
rewards.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary Page 1
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Conflict resolution: the constructive use of conflict and dispute
resolution.
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Legal compliance: abide by the appropriate legislation such as
occupational health and safety (OH&S).
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Separation: employees leaving the organisation. This needs to be handled
properly to avoid claims of discrimination.

Functional communication systems are vital for effective employment relations.
This involves:
1. Grievance procedure: system to deal with workplace complaints.
2. Worker participation: employee involvement in decision-making.
3. Team briefings: managers and employees meet to discuss issues. Quality
circles and semi-autonomous teams assist in this process.

Rewards can be monetary or non-monetary, and intrinsic (sense of personal
achievement) or extrinsic (rewards given outside the job itself such as incentive
payment).

An effective rewards management system should attract, retain and motivate
employees, and be equitable.
Non-monetary rewards
Monetary rewards
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Interesting work
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Wage and salary
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Challenge
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Incentive bonus
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Responsibility
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Fringe benefits
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Satisfaction
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Profit sharing
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Recognition
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Commission
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary Page 2

Effective training and development improves employee performance and
productivity.

An effective induction program introduces new employees to the job, their coworkers, the organisation and its culture.

Ongoing training is critical due to technological change and global competition,
leading many organisations to promote the concept of a ‘learning organisation’
within the business.

Key features of an effective training program include:
Step 1: Assess the needs (needs analysis).
Step 2: Determine the objectives of the training program.
Step 3: Consider the internal and external influences.
Step 4: Determine the training process
Step5: Evaluate the training program.

Training can be formal, informal, off-the-job or on-the-job.

Development assists employees to cope with added responsibility and
accountability. It prepares employees for promotion.

Flexible working conditions enable employees to balance work and family
responsibilities. Family-friendly programs include:

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childcare
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family support
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family leave
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flexible working hours.
Flexible remuneration agreements can be used as a motivational tool and tied to
the achievement of key performance indicators. Agreements can include:
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profit-sharing
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productivity sharing.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary Page 3

Flexible working hours are a common feature of enterprise agreements and
individual contracts.

An employment/human relations audit can be used to evaluate the employment
relations activities and their effectiveness.

Quantitative measures relate the effectiveness to costs and profits.
Benchmarking – comparing business performance against industry standards –
can be used to achieve world’s best practice.

Qualitative measures provide feedback on changes in behaviour or improved
quality of service provided.

Measures of effective employment relations include:
1. Level of staff turnover – the rate at which employees leave the business.
2. Absenteeism – failure to report for work without leave being approved.
3. Industrial disputes – direct employee industrial action such as strike, work
ban, go-slow.

High rates of these measures indicate ineffective employment relations.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary Page 4