BUSINESS MANAGEMENT

AREA OF STUDY TWO- MANAGING EMPLOYEES

The Relationship Between Employees and Business Objectives

LINKING BETWEEN EMPLOYEES AND ACHIEVING BUSINESS OBJECTIVES [5]

- Business objectives are STATEMENTS OF DESIRED GOALS OR SPECIFIC ACHIEVEMENTS that a business aims to
achieve, which in turn provide direction for the business and subsequent actions.
- Of all of a business’ stakeholders, EMPLOYEES IN PARTICULAR ACT VITAL FOR THE ACHIEVEMENT OF
BUSINESS OBJECTIVES
 Which is any individual who was hired by an employer to do a specific job
- It is therefore important that effective relationships are created between management and employees, as a business’
SUCCESS CAN BE ATTRIBUTED TO THE PROPER DAILY MANAGEMENT OF EMPLOYEES
- EMPLOYEES ARE RESPONSIBLE FOR ACHIEVING BUSINESS OBJECTIVES as they hold a role in the production
process for either manufacturing a product or providing a service.
- Therefore, in ensuring a business’ success this INVOLVES BALANCING THE OBJECTIVES OF THE BUSINESS with
the objectives and aspirations of the employees, as it is in turn important to ensure they are performing at their best
possible potential.

HOW MANAGEMENT OF EMPLOYEES CAN ACHIEVE BUSINESS OBJECTIVES (PROFIT) [6]

- This is MAINTAINED THROUGH HUMAN RESOURCE MANAGEMENT, otherwise denoted as HR, whose role is to
manage the internal relationships between a business and its employees by assuring the workplace remains a positive
and diverse work environment.
- Good HR management ensures that the RIGHT AMOUNT OF ADEQUATELY TRAINED AND MOTIVATED STAFF IS
AVAILABLE so that an organisation can pursue its objectives at any given time
- A business will usually SET OBJECTIVES THAT RELATE TO ITS SURVIVAL, GAINING AND GROWING MARKET
SHARE AND BEING PROFITABLE.
- The HR MANAGER CAN ASSIST IN ACHIEVING THIS OBJECTIVE by ensuring that:
 all employees have adequate product knowledge about what they are selling
 conducting regular performance appraisals to identify areas for improvement.
- This is FURTHER ACHIEVED VIA:
 Aligning employee and business objectives
 Motivating employees leads to higher productivity
 Training employees (eg. Customer service training) > sales go up > market share
increases
- This will increase the sales that the business receives and therefore ASSISTS THE ORGANISATION IN ACHIEVING ITS
OBJECTIVE for increasing profit.

Motivation
MOTIVATION
WHAT IS MOTIVATION [6]

- Motivation refers to the INDIVIDUAL INTERNAL PROCESS that dicttates THE WILLINGNESS OF A PERSON TO
EXPEND ENERGY and effort in doing a job or task.
- Motivation within businesses is therefore seen as THEIR DRIVE TO EXERT HIGH LEVELS OF EFFORT TO REACH
BUSINESS OBJECTIVES
- As such the greatest WORK PERFORMANCE DERIVES FROM THEIR SUBORDINATES where this is one of the most
important management functions due to the way in which high levels of MOTIVATION RESULTS IN INCREASING
RATES IN PRODUCTIVITY whilst also achieving the satisfaction of employees.

- Thus, TO INCREASE PERFORMANCE HR EXISTS TO ENSURE THAT

 jobs are correctly designed
 a system of rewards are in place
 that the business is structured in a way that allows employees to work in the most
optimal conditions.
- For a manager to gain the greatest work performance they must be able to understand THE MOTIVATIONS OF
EMPLOYEES TO THEN IMPLEMENT THE RIGHT CLIMATE TO ENHANCE IT
- This is generally met where employees see the direct correlation between ACHIEVING BUSINESS OBJECTIVES HELPS
THEM IN ACHIEVING THEIR OWN PERSONAL GOALS.
THEORIES OF MOTIVATION
MASLOW’S HIERARCHY OF NEEDS [3]

DEFINE [3]
- Abraham Maslow’s developed a THEORY OF MOTIVATION THAT REPRESENTS HUMAN NEEDS
 in the form of a pyramid or hierarchy in contending that PEOPLE ACT TO SATISFY THEIR UNMET
NEEDS.
- Abraham Maslow developed a five-stage Hierarchy of Needs, proposing that for high-level motivation or self-actualization
to occur, MORE FUNDAMENTAL NEEDS MUST FIRST BE ADDRESSED.
- As such he believes that WITHIN ALL INDIVIDUALS EXISTS A HIERARCHY OF FIVE NEEDS, of which dictate an
individual’s behaviour.

HOW DOES THIS EFFECT THE BUSINESSES? [3]

- Maslow’s theory is important because it suggests the idea that ORGANISATIONS HAVE TO CREATE WORKPLACES
THAT
 attempt to satisfy all the needs of an employee
 and cannot simply attempt to motivate through providing for lower level needs such as adequate pay.
- ONCE SERVICED THIS LEVEL OF NEED IS NO LONGER EFFECTIVE in motivating an employee’s behaviour and as
such, the higher level needs to be pursued.
- A business should therefore OFFER DIFFERENT INCENTIVES TO WORKERS in order to help them fulfil each need in
turn and progress up the hierarchy in the recognition of the differing ways in which workers are motivated

EVALUATION OF MASLOW’S THEORY [2]

- COST-EFFECTIVE FOR THE BUSINESS, in that little emphasis is on money as a motivator (no need for increases in
wage / salary or for remunerations)
- Can be TIME-CONSUMING AND DIFFICULT TO IDENTIFY the actual needs of employees

MASLOW’S HIERARCHY OF NEEDS AND ITS RELATIONSHIP TO MANAGING EMPLOYEES (HRM) [5]

1. PHYSIOLOGICAL NEEDS [3]

- According to Maslow’s hierarchy of needs, the most BASIC HUMAN NEEDS ARE PHYSIOLOGICAL NEEDS
 needs for food
 shelter
 clothing for themselves or for their families.
- MOTIVATE A PERSON TO FIND A JOB as if these requirements are not met, the body cannot continue to function.
- An employer can provide for this need through PROVIDING THE SUBORDINATE WITH A JOB OR SATISFACTORY
PAY FOR SURVIVAL

2. SAFETY NEEDS [4]

- Once physical needs are satisfied, SECURITY OR SAFETY TAKES PRECEDENCE.
- This involves security and safety in being PROTECTED FROM PHYSICAL OR EMOTIONAL HARM
- An employer can provide for safety through stability and consistency in JOB SECURITY AND SAFE WORKING
CONDITIONS

3. SOCIAL NEEDS [3]

- At Maslow’s third level are SOCIAL NEEDS OR NEEDS FOR BELONGING and for giving and receiving friendship and
love
- This is because AFTER INDIVIDUALS HAVE TAKEN CARE OF THEMSELVES PHYSICALLY, they can address their
needs to share and connect with others.
- An employer can provide for this through SUPPORTIVE MANAGEMENT AND THE ABILITY FOR TEAMWORK within
the company through
 friendly work associates
 organised employee activities.

4. SELF-ESTEEM [4]
- At the fourth level in Maslow’s hierarchy are esteem needs, which represent the NORMAL HUMAN DESIRE TO BE
VALUED AND VALIDATED BY OTHERS through recognition of accomplishment and achievement.
- Satisfaction of these needs is REFLECTED IN FEELINGS OF SELF-WORTH, which refers to the regard and acceptance
one has for oneself.
- An employer can PROVIDE FOR THIS NEED THROUGH GIVING AN EMPLOYEE:
 responsibility
 promotions
 merit rewards
  pay linked to a status of position

5. SELF ACTUALISATION [3]

- Finally, at the highest level in Maslow’s hierarchy are self-actualization needs, or needs for fulfillment, FOR LIVING UP TO
ONE’S POTENTIAL, and for using one’s abilities to the utmost as determined by Abraham Maslow
- Self-actualization may OCCUR AFTER REACHING AN IMPORTANT GOAL OR OVERCOMING A PARTICULAR
CHALLENGE.
- An employer can PROVIDE THIS THROUGH:
 challenging work allowing for creativity
 participative decision making
 providing for personal growth and advancement within the business

GOAL SETTING THEORY (LOCKE AND LATHAM)

DEFINE [6]
- In the late 1960s, Edwin Locke and Gary Latham developed the Goal Setting Theory
 as A PROCESS THEORY OF MOTIVATION PLACES EMPHASIS on the importance of setting or
attaining goals on employee engagement or motivation
- The goal-setting theory is REFERRED TO AS AN OPEN THEORY in that it can be INDIVIDUALISED TO MOTIVATE
INDIVIDUALS SPECIFICALLY in the belief that goal setting leads to:
 increased effort
 task focus
 persistence
 and in turn can be used to motivate an individual employee or a team.
- This DISPLAYS THE POSITIVE RELATIONSHIP between clearly identified goals and appropriate feedback with the
motivation and performance of employees.
- Thus, this theory centres on MOTIVATING PEOPLE BY GIVING THEM THE OPPORTUNITY TO ACHIEVE GOALS and
receive appropriate feedback.
- The EMPLOYEE’S DESIRE TO PERFORM THE GOAL THEREFORE PROVIDES THEM WITH MOTIVATION and
increases and sustains the employee’s performance over time.
- According to Locke and Latham, there are FIVE GOAL SETTING PRINCIPLES THAT SHOULD BE APPLIED TO AN
INDIVIDUAL’S PERSONAL AND TEAM GOALS.

BENEFITS [3]
- Likely to result in higher levels of financial success
- Higher productivity and lower staff turnover rates or absenteeism
- Team goals improve group cohesion and collaboration

HOW CAN MANAGERS IMPLEMENT IT

- In order to use this motivation theory a MANAGER WOULD NEED TO SET GOALS IN CONJUNCTION WITH THEIR
EMPLOYEES
 that are specific and challenging
 as well as a set time period to which feedback would take place by the end of the time permitted to achieve
the goal.

PRINCIPLES OF THE GOAL SETTING THEORY [5]

CLARITY IN GOAL SETTING [3]

- For goals to be motivating, the SMART principle must be adopted so that GOALS OWN CLARITY so that individuals and
teams are aware of the outcome they’ve set to achieve.
- This allows for the ACCURATE MEASURING OF ACHIEVEMENT AND OUTLINES THE REWARDS to be gained upon
completion.
- AMBIGUITY OR COMPLEXITY MAKES IT HARDER for people to understand goals, whereby in turn being demotivating.

CHALLENGING BUT ACHIEVEABLE [4]

- Locke’s research showed that the MORE DIFFICULT AND SPECIFIC A GOAL IS, THE HARDER PEOPLE TEND TO
WORK to achieve it.
- The CORRECT BALANCE NEEDS TO BE ACHIEVED when setting goals, as it has been found that goals that are either
too easy or too difficult can have a negative impact on both motivation and performance
- This is because PEOPLE ARE OFTEN MOTIVATED BY SOMETHING THEY HAVE NOT ACHIEVED BEFORE
- However, there is NO POINT SETTING A GOAL THAT IS BEYOND AN EMPLOYEE’S CAPACITY to achieve as this
would just set them up for failure and ultimately demotivate them.
 SECURE COMMITMENT [3]
- To ensure that an employee is committed to achieving a personal goal, they need to be INVOLVED, FULLY
UNDERSTAND AND AGREE TO THE GOAL BEING SET.
- This is generally secured when the involved EMPLOYEE AND MANAGER MEET TO DISCUSS and formulate the goal
together, such as through a consultative or participating management style.
- Goals are SET BY THE EMPLOYEE AND THE EMPLOYER IN CONJUNCTION WITH EACH OTHER, as this allows the
commitment to the goal to motivate the employee, as they have had some input into its creation.

PROVIDE FEEDBACK [4]

- For individuals to be motivated by goals they need to UNDERSTAND HOW THEY ARE DOING in relation to them, and
thus managers should GIVE ADVICE AND FEEDBACK
- This allows for:
 achievements to recognised
 a DETERMINANT OF HOW WELL THE EMPLOYEE OR TEAM is progressing
towards achieving goals
- Regular feedback PROVIDES OPPORTUNITIES for expectation clarification and goal difficulty adjustment
- Locke and Latham argue that the subsequent feedback on the goals and recognition for effort WILL INCREASE THE
MOTIVATION THAT COMES FROM THE GOALS THEMSELVES, leading to improved performance as a result.

COMPLEXITY OF TASK [3]

- Leaders should set goals at the right level of complexity as a goal that is TOO COMPLEX AND OVERWHELMING WILL
NATURALLY HAVE A NEGATIVE IMPACT on employee morale that consequently decreases productivity/motivation
levels.
- For this reason, GOALS MAY BE BROKEN UP INTO SMALL MULTIPLE ‘SUB-GOALS’ that less difficult to complete
and comprehend.
- This is because SINGLE GOALS SET FOR HIGHLY COMPLEX TASKS LEADS TO A LACK OF ACCOMPLISHMENT
where job dissatisfaction and a lowering of employee engagement ensues.

FOUR DRIVE THEORY (LAWRENCE AND NOHRIA)

DEFINE [6]
- In 2001, Paul Lawrence and Nitin Nohria developed the FOUR DRIVE MODEL OF EMPLOYEE MOTIVATION
 which identified four basic MOTIVATIONAL NEEDS THAT ACT TO DRIVE PEOPLE
 as acquired over time from human evolutionary past.
- The model is a HOLISTIC WAY OF LOOKING AT EMPLOYEE MOTIVATION beyond the typical “pay” model
 where MOTIVATION IS DESCRIBED IN TERMS OF A SET OF NEEDS
 that the level to which these needs are satisfied directly affects a worker’s emotions and behaviour
- Each individual employee will have all of these drives and therefore in order to employ this motivation theory, a manager
MUST BE ABLE TO STIMULATE ALL OF THESE DRIVES WITHIN EMPLOYEES

- Leaders can begin to influence and start to fulfil each of these drives by USING SOME OF THE SYSTEMS AND
PROCESSES they already have in place.

- CHANGES AND ENHANCEMENTS TO THOSE SYSTEMS CAN HELP the organisation become one in which
employees can satisfy their drives and become highly motivated

CONDITIONS OF THE FOUR DRIVE THEORY [6]

- Should ONE DRIVE DOMINATE, AN IMBALANCE CAN OCCUR between the personal and business outcomes.
 For instance, should an employee’s drive to acquire become too strong, this may lead to a situation of
being overcompetitive, and in turn CAUSING A UNBALANCED PERSONAL AND COMPANY
OUTCOMES
- Although, the relative STRENGTHS OF EACH DRIVE WILL DIFFER WITHIN EACH INDIVIDUAL they act independently
of each other, unlike the hierarchy of needs
- However, this also means that ONE DRIVE CANNOT BE SUBSTITUTED FOR ANOTHER as, this is an open theory in
that it is individualised to suit the circumstantial drives of a specific individual.
 For instance, paying employees a large wage or salary will SATISFY THEIR DRIVE TO ACQUIRE, WHILE
IT WILL IGNORE THEIR DRIVE TO BOND.
- As such an important aspect of this theory INVOLVES BALANCING ALL FOUR OF THESE DRIVES so that they
complement each other

DRIVES [4]
- THE NEED TO ACQUIRE, which may stem from both basic (necessities) and complex (commodities of status,
accomplishments and power) needs achieved through monetary awards to improve performance
 - THE NEED TO BOND, referring to the need to find, connect and seek others (family, peers, groups, as part of the
business / association or the nation). Feelings of belonging translate into pride however may plummet if the business were
to do something to betray this pride
- THE NEED TO DEFEND, stemming from the natural instinct to defend persons, property, accomplishments, beliefs and
ideas against external threats that directly link to people’s fear and resistance to change achieved through encouraging a
welcoming and supportive workplace
- THE NEED TO COMPREHEND, where people need to make sense of the world around them so as to then contribute to it
achieved through providing opportunities for new skills. For this reason, learning and work are both able to engage and
energise employees

WHAT DO GREAT LEADERS DO ACCORDING TO THE 4 DRIVE THEORY? [5]

INTRO [2]
- While many of these motivations are inherently in a company, EFFECTIVE MANAGERS MUST BE ABLE TO
CONTINUOUSLY PERPETUATE SPECIFIC CONDITIONS to be individualised to the satisfaction of all four drives within
each employee.
- This can include
 Focus on all 4 drives
 Individualise motivation
 Communicate effectively
 experiment

FOCUS ON ALL 4 DRIVES: [4]

- It is important to understand that efficient work and processes can be hindered in the occurrence of the imbalance of these
four drives.
- As such, if one of the four drives are weaker, or one particularly dominates, an imbalance can occur between the personal
and business outcomes
- Research shows that weakness in fulfilling one of the 4-Drives impedes a company or leader’s capabilities to perform on
all the other 3 drives.
- If a leader wants to be great, it is important then for a leader to ensure that they are identifying and addressing any issues
that perceived in any of the four drive areas.

INDIVIDUALISE MOTIVATION: [3]

- To maximise motivation it is imperial to consider the unique 4-drive motivational profile of each individual employee.
- Research on this shows that different demographics and personalities respond differently to the four drives where each
employee is motivated by the four drives at differing levels. 
- Where the demographic background effects which of the drives most valued by a business’ employees, effective leaders
must be able to distinguish these differences and thus individualise circumstances to cater to these distinct needs.

COMMUNICATE EFFECTIVELY: [3]

- Leaders need to be able to effectively communicate how their systems, policies and structure align with the four drives. 
- In essence, they need to be able to make evident that their activities and conducts are in turn satisfying one or
more of the drives
- For instance, a leader could discuss the reason that they are sponsoring a community service event is not only to help the
community (drive D) but also to provide an opportunity for employees to get to know each other and their families (drive B)
and to give them a chance to learn a new skill (drive C). 

EXPERIMENT: [4]
- Great leaders need to constantly look for ways or innovations to which enhance each of the four drives. 
- This is an ongoing commitment that requires leaders to be focused on looking for different ways in which they can provide
the opportunities for employees to satisfy their needs. 
- To maximise motivation, good leaders should implement new structures and processes and evaluate the way in which it
functions. 
- This is done through CHANGES AND ENHANCEMENTS TO THOSE SYSTEMS IN PLACE, which can help the
organisation become one in which employees can satisfy their drives and become highly motivated

COMPARING MASLOW AND LOCKE AND LATHAM

SIMILARITIES [3]
- Locke and Latham state that goals should be CHALLENGING, which is similar to Maslow’s step of self-actualisation
involving challenging work
- For Locke and Latham’s theory there is an EMPHASIS ON THE COLLABORATION IN THE SETTING OF GOALS
between employees and management, due to a need for an employee to assist in the creation of their own goals.
- This can be seen as SIMILAR TO ESTEEM NEEDS IN THE MASLOW’S HIERARCHY where the employee should be
given responsibility over their own work.
 DIFFERENCES [2]
- Locke and Latham provide a GOALS-BASED THEORY, WHEREAS MASLOW PROVIDES A NEEDS-BASED theory
- Locke and Latham employees have the SAME MOTIVATION, in that they will be motivated towards the achievement of
goals, while according to Maslow, each employee will be MOTIVATED DIFFERENTLY depending on where they currently
sit in the hierarchy

COMPARING LAWRENCE AND NOHRIA AND LOCKE AND LATHAM

SIMILARITIES [2]
- Both Locke’s and Latham and Lawrence and Nohria argue that employee MOTIVATION IS CAUSED BY A DRIVE TO
COMPREHEND as present in their respective motivation theories
- Both argue that the SAME ASPECTS WILL MOTIVATE ALL EMPLOYEES by goal setting or stimulating all four drives
respectively

DIFFERENCES [2]
- Locke and Latham present a GOAL BASED THEORY, whereas Lawrence and Nohria presents a NEED BASED
THEORY.
- Locke and Latham argue that goal setting will MOTIVATE EVERY EMPLOYEE IN A SIMILAR WAY, while Lawrence and
Nohria argue that EACH DRIVE WILL BE PRESENT TO A DIFFERENT LEVEL in each individual employee

COMPARING MASLOW AND LAWRENCE AND NOHRIA

SIMILARITIES [2]
- Both of these theories UNDERTAKE A NEEDS-BASED APPROACH
- Both theories DISCUSS THE NEED TO HAVE RELATIONSHIPS WITH CO-WORKERS FOR MOTIVATION, where
Maslow depicts the need to belong and Nohria proposes the drive to bond

DIFFERENCES [2]
- MASLOW STATES THAT MOTIVATION IS SYSTEMATIC in which each employee will move up levels in a hierarchy of
needs, whereas Lawrence and Nohria argue that EACH EMPLOYEE MUST HAVE ALL FOUR DRIVES stimulated at the
same time for motivation to occur
- Lawrence and Nohria argue that there is ALWAYS USE FOR ALL FOUR DRIVES TO MOTIVATE EMPLOYEES, but in
contrast Maslow argues that ONCE A NEED IN THE HIERARCHY HAS BEEN ACHIEVED IT WILL NO LONGER BE
ABLE TO ACT AS A MOTIVATOR for employees

Motivation Strategies
STRATEGIES [1]

DEFINE [2]
- It is important that businesses ensure that the KNOWLEDGE GAINED FROM THE VARIOUS MOTIVATION THEORIES
IS TURNED INTO PRACTICAL APPLICATIONS for the business so as to improve business performance and
productivity through MOTIVATED EMPLOYEES WHERE THIS ASPECT IS IMPORTANT FOR THE ACHIEVING OF
BUSINESS OBJECTIVES.
- STRATEGIES that can lead to a more motivated workforce are: [5]
 establishing a performance-related pay system
 career advancement
 investing in training
 providing support
 sanction

PERFORMANCE RELATED PAY [5]

DEFINE [3]
- This is a SALARY SYSTEM whereby an individual is positioned within a pay band ACCORDING TO HOW WELL THEY
WORK in which financial rewards are given to employees whose work has reached or gone above a set standard.
- Thus, if their OUTPUT HAS EXCEEDED THE PREDETERMINED STANDARDS both in number and quality of outputs,
they will receive additional pay where INCREASED PERFORMANCE COULD BE RECOGNISED AND REWARDED IN
MONETARY FORMS.
- In this way, performance-related pay USES REWARDS TO ACT AS A MOTIVATOR for an employee so that they align
their efforts more closely to the objectives of their employer.

SHORT-TERM [3]
- Short-term, as it is immediate as the BONUS MAY BE PAID DURING THE NEXT PAY CYCLE
- The prospect of performance related pay will LEAD TO PEAKS IN PRODUCTIVITY in the short term
- Given that this involves immediate financial reward, in the SHORT TERM EMPLOYEES ARE MOTIVATED TO ACT
QUICKLY in order to receive benefits faster, whereby maximising productivity.
 LONG-TERM [4]
- Performance CAN ONLY BE IMPROVED SO MANY TIMES before maximum productivity is reached
- People who have worked for an organisation for a lengthy period and have already achieved higher pays, are less likely to
be motivated by this strategy in the long term as THEY LOOK FOR OTHER things like esteem/personal growth
- In the long term, PRODUCTIVITY MAY DROP OFF FROM THE INITIAL PEAK, especially if the goals were too difficult to
begin with
- People might SET EASY DISENGAGING GOALS to receive a quick reward, which won’t motivate them moving into the
future

ADVANTAGES [4]
- Performance-related pay can ACT AS A MOTIVATOR FOR EMPLOYEES whose work directly relates to their output,
which can be QUANTITATIVELY MEASURED.
- Provides a DIRECT FINANCIAL REWARD to an employee as a tangible way of recognising achievement
- Encourages goal setting to be not too hard where there is a CLEAR CRITERION ON WHAT NEEDS TO BE DONE
- Is GOAL FOCUSED which can improve productivity levels

DISADVANTAGES [3]
- In the quest for additional pay, SAFE WORK PRACTICES AND THEREFORE QUALITY MAY BE SACRIFICED to
increase quantity
 For instance, PRODUCTION LINES MAY BE SET TO RUN AT UNSAFE SPEEDS and protective safety
equipment may not be used.
- Many businesses now operate on a team-based structure and thus this WOULD GENERATE A ‘PERFORMER’
CULTURE, which can lead to jealousy and lower morale levels or teamwork if a business decides to reward one individual
team member only.
- REDUCES EQUALITY IN EMPLOYEES’ PAY especially if ONE MEMBER OF THE TEAM IS NOT SEEN TO BE
PULLING THEIR WEIGHT, to equally reward all team members can lead to friction within that work group

CAREER ADVANCEMENT [5]

DEFINE [3]
- This is the MOTIVATIONAL VALUE BEHIND A CLEAR CAREER PATH, and the motivation strategy of using promotion
as a way to gain a higher level of work from an employee
- Promoting employees to POSITIONS THAT INCLUDE MORE RESPONSIBILITY OR AUTHORITY IS A MOTIVATIONAL
TOOL that can be used by managers as the POSSIBILITY OF JOB PROMOTION ACTS AS A LONG-TERM INCENTIVE
as employees will feel confident in a business that gives opportunity advancement.
- For this reason, businesses will have TRANSPARENT POLICIES AND PROCEDURES, BASED ON REWARD AND
RECOGNITION of the individual merit and performance of its employees, IN ADMINISTERING PROMOTIONS and
managing their job or career advancements.

SHORT-LONG-TERM [3]
- The idea of career advancement COULD INSPIRE INDIVIDUALS WHEN WORKING ON A SHORTER-TERM PROJECT
(ie; if I do this well there’s a prospect of moving up)
- When someone else is promoted, THIS MAY ACT TO TEMPORARILY INCREASE THE PRODUCTIVITY and
commitment of another (this may drop off after a while though)
- Promotions as a motivator are SHORT-TERM AS IT IS NOT POSSIBLE TO REGULARLY PROMOTE someone due to
limited higher positions

LONG-TERM [4]
- Promotion is a long-term motivator as the idea of advancing is something that will always motivate people particularly in
the seek to advance within the business
- PEOPLE STAY IN THESE POSITIONS LONG-TERM with increased pay associated with promotion
- Potential to PROVIDE LONG-TERM GOALS which is useful as there is no continuous need to update motivation to
ensure it remains motivative.
- Through limited advancement opportunities, COMPETITION MAY EXIST BETWEEN EMPLOYEES OF WHOM MAY BE
DEMOTIVATED through being overlooked and thus in the long-term this strategy will be ineffective

ADVANTAGES [5]
- ACTS AS A REWARD to employees for their past performance
- HELPS THE BUSINESS TO RETAIN its talented employees, intellectual property and continuity of knowledge
- Opportunity to INCREASE EMPLOYEE’S CONTRIBUTION to the business
 - SATISFIES HIGHER LEVELS OF MASLOW’S THEORY
- Potential to PROVIDE LONG-TERM GOALS which is useful as there is no continuous need to update motivation to
ensure it remains motivative.

DISADVANTAGES [4]
- As these provide long-term goals employees may LOSE FOCUS ON BUSINESS AND TEAM OBJECTIVES WHERE
THIS BECOMES DEMOTIVATING in reaching for goals that can be so far in the future.
- Through limited advancement opportunities, COMPETITION MAY EXIST BETWEEN EMPLOYEES OF WHOM MAY BE
DEMOTIVATED through being overlooked
- Creates FEELING OF UNREST IF PROMOTION WAS NOT WARRANTED or not carried out in a fair and equitable
manner
- Employee’s level of PRODUCTIVITY MAY DECREASE AS THEY NOW HAVE BROADER RESPONSIBILITIES due to
their job being enlarged

INVESTMENT IN TRAINING [5]

DEFINE [4]
- EMPLOYEES GAIN SKILLS AND JOB KNOWLEDGE through training and job experience where this is important so as
to perform their job tasks properly and better.
- This involves the use of investment in training as a motivational strategy stems from the idea that employees can be
MOTIVATED THROUGH THE WORK THAT THEY DO, AS WELL AS THE MONEY THAT THEY MAKE.
- This would allow employees to increase their skills and therefore, potentially MOTIVATE THEM TO WORK HARDER in
their positions.
- This can INCLUDE BOTH ON THE JOB AND OFF THE JOB TRAINING.

SHORT -TERM [3]

- Can be BOTH A SHORT-TERM AND LONG-TERM MOTIVATOR
- IMMEDIATE RESULTS as new skills can be put into effect after training, and thus creates instantaneous motivation in the
short term
- Can IDENTIFY ERRORS OR AREAS WHERE THE BUSINESS IS LACKING in the short term; and then fix them

LONG-TERM [2]
- TRAINING CAN BE ONGOING AND SO STAFF REMAIN AT THE BUSINESS as they know training will continue and
they will develop where this is motivating in the long term this shows the business is showing they want to invest in its
employees by training them.
- If up-skilled employees are NOT GIVEN OPPORTUNITIES TO USE THESE SKILLS IT LEADS TO DISENCHANTMENT
in the future

ADVANTAGES [3]
- Training and coaching provide ideal opportunities for employees to feel that they are CONTRIBUTING TO BUSINESS
OUTCOMES.
- By creating an environment that ENCOURAGES LEARNING AND SHARING KNOWLEDGE, which positively assists in
team building and the overall health of the business, thus CREATING A POSITIVE CULTURE that aids in motivating
employees
- Creates a SENSE OF LOYALTY AND ATTACHMENT TO THE BUSINES in demonstrating that the business wants to
advance their careers.

DISADVANTAGES [3]
- Training, however, will not lead to employees being motivated IF THE BUSINESS HAS INEFFICIENT SYSTEMS or non-
performing equipment that result in poor performance,
- Similarly, if employees have been placed in JOBS FOR WHICH THEY ARE UNSUITABLE, TRAINING WILL NOT ACT
TO MOTIVATE THEM.
- In addition, if a business invests in training with the intention of it acting to motivate employees, but then DOES NOT
FOLLOW THROUGH BY PROVIDING THE EMPLOYEES WITH SUITABLE OPPORTUNITIES to use the newly
acquired skills, those employees could become demotivated and thus leave the business.

SUPPORT [5]
DEFINE [3]
- Support is a POSITIVE MOTIVATIONAL TOOL, THAT LINKS EMPLOYERS AND EMPLOYEES together through a
relationship of mutual trust and respect and motivates employees to WORK HARDER BECAUSE OF THE SUPPORT that
they have from their employers.
- These employees will BE MORE MOTIVATED TO WORK DILIGENTLY AS THEY FEEL PROUD of the business they
work for and are committed to the values and beliefs of the business.
- THIS POSITIVE ATMOSPHERE AND CORPORATE CULTURE HAVE THE ADDED BENEFIT to the business of
motivating employees to continue working at that business.

SHORT-TERM [3]
 - Providing support CAN ACT AS BOTH A SHORT-TERM AND A LONG-TERM MOTIVATOR
- IMMEDIATE RESPONSE AS SUPPORT OVERCOMES IMMEDIATE CONCERNS where this motivates employees to do
undertake tasks
- If you are given immediate support in a task (ie; let’s do it together) you are going to be motivated to do it immediately

LONG-TERM [2]
- In the SHORT TERM, AS POSITIVE MOTIVATIONAL TECHNIQUES ARE INEFFECTIVE motivational techniques as
they don’t provide a short term gain, however in turn they are BENEFICIAL IN THE LONG TERM as employees will be
motivated to work at a more consistently high level for a longer period of time
- People are more likely to ENGAGE WITH LONG-TERM INITIATIVES IF THEY FEEL LIKE THEY HAVE THE SUPPORT
they need in approaching new/difficult tasks

ADVANTAGES [4]
- Employees who feel supported or valued by their manager or a mentor within the business ARE LIKELY TO WORK
MORE DILIGENTLY
- Support in the form of EMPLOYEE ASSISTANCE PROGRAMS (EAP) CAN PROVIDE CONFIDENTIAL ASSISTANCE to
employees who are experiencing problems that may be affecting their level of performance
- Support DOES NOT HAVE TO COST THE BUSINESS MONEY
- Support contributes to increased feelings of respect, and thus a POSITIVE CORPORATE CULTURE

DISADVANTAGESSS [4]
- May take LONG TIME TO SEE BENEFITS DEVELOP
- May be DIFFICULT TO FIND REASONS TO SUPPORT – if they are doing wrong things
- Support RELIES ON MANAGER EXERCISING GOOD COMMUNICATION skills
- CONFIDENTIAL NATURE OF AN EAP can mean that a manager may not be aware of the problems being experienced
by the employee

SANCTIONS
DEFINE [5]
- Sanctions are a NEGATIVE MOTIVATIONAL TECHNIQUE, through motivating employees to work harder via sanctions
for the work that they have not accomplished up to the standard that was necessary.
- SOME EXAMPLES of sanctions include
 Reprimand
 Disciplinary counselling
 Dismissal
- Issuing sanctions, or penalties, have been a TRADITIONAL WAY OF MOTIVATING EMPLOYEES to increase their
performance.
- Some employees may NEED TO BE MOTIVATED BY DISCIPLINE RATHER THAN BY CONTENT AND CHALLENGE.
 As often THESE EMPLOYEES WILL NOT TAKE THEIR WORK TASKS SERIOUSLY UNTIL THEY ARE
THREATENED with some form of sanction for their unacceptable or inadequate performance.
- Although, SANCTIONS AND COERCION ARE ONLY EFFECTIVE IN THE SHORT-TERM and are rarely able to change
an under-performing employee into a high-performing one.

SHORT-TERM [1]
- Sanctions are effective in the short term as if employees are addressed regarding their behaviour in a negative context,
they are MOTIVATED TO CHANGE IT IMMEDIATELY OR ARE QUICK TO RESPOND TO THESE SANCTIONS

LONG-TERM [2]
- Sanctions are damaging in the long term as FEAR MAY NOT BE A FAVOURABLE MOTIVATOR FOR LONGER
PERIODS AS THIS DESTROYS EMPLOYER AND EMPLOYEE RELATIONSHIP, creates anxiety or tension and makes
employee feel devalued
- Furthermore, once the fear is allayed over time, the EMPLOYEE IS LIKELY TO GO BACK TO THEIR OLD WORK
HABITS, whereby diminishing motivation

ADVANTAGES [3]
- Sanctions can ACT AS A SHORT-TERM MOTIVATOR for some employees
- The fear created by sanctions may bring some other under-performing employees into line, WHEREBY MOTIVATING
EMPLOYEES TO IMPROVE PERFORMANCE FOR THE NEXT TIME.
- Those Who Are UNDERPERFORMING OR REDUCE PRODUCTIVITY ARE NOW OUT OF THE BUSINESS

DISADVATNAGES [4]
- Imposing sanctions ACTS ONLY AS A POTENTIAL SHORT-TERM MOTIVATOR
- Can cause RESENTMENT AMONG EMPLOYEES; POSSIBILITY OF DISPUTE OR LEGAL ACTION following
imposition of sanctions
- This DOESN’T SUPPORT EMPLOYEES TO MAKE MISTAKES AND LEARN
- This DESTROYS EMPLOYER AND EMPLOYEE RELATIONSHIPS, making employees feel devalues and thus builds
long term resistance
Training
TRAINING
OUTLINING

WHY WE NEED TRAINING [2]

- In a fiercely competitive global economy, it is IMPERIAL THAT EMPLOYEES
 not only own technical skills for their current working environment
 but must also have the ability to be innovative to help the business succeed in the future.
- As such, businesses must now CONCENTRATE ON PROVIDING A LEARNING ENVIRONMENT for their employees
 so that they are able to develop this skill
 where training gives opportunity for experienced workers to extend or update their skills and knowledge
 so as to perform better in their current roles due to familiarity with the work
environment

WHAT IS TRAINING AND DEVELOPMENT [3]

- Training is the process of PROVIDING AN EMPLOYEE WITH JOB-SPECIFIC KNOWLEDGE OR SPECIFIC SKILLS
needed to perform a particular job more effectively and efficiently.
 Includes on the job and off the top training
- For TRAINING TO BE EFFECTIVE, IT MUST BE:
 tailored to the individual
 linked to job performance
 provide feedback, in order to reinforce the advances employees have made
 provide opportunities for employees to utilise the new skills they had learnt in their training
- Whilst development usually refers to PREPARING EMPLOYEES, often at management level, for longer-term
opportunities with a more general future-oriented focus

THREE LEVELS OF ANALYSIS TO DETERMINE WHAT IS REQUIRED [3]

- Three levels of analysis are used to determine what is required:

 ORGANISATIONAL ANALYSIS - the entire business is analysed to determine where training activities
should be concentrated to best achieve its strategic objectives.
 TASK ANALYSIS - the individual jobs and tasks required are analysed to determine whether any specific
skills are required for success
 PERSON ANALYSIS - each employee is assessed to determine what individualistic training is required.
 This analysis results in training and development objectives being established

PRINCIPLES OF TRAINING [5]

- Performance appraisal of an existing employee may determine that an individual needs training in any of the following
areas:
 BASIC SKILLS: grammatical, maths, safety, reading, listening or writing skills
 (SOCIAL) AWARENESS: equal employment opportunity, workplace diversity, risk management, sexual
harassment and bullying
 TECHNICAL, JOB-SPECIFIC SKILLS: computer software course, product knowledge, OH&S compliance,
customer service
 INTERPERSONAL SKILLS: communication, human relations, leadership, employee relations,
collaboration and teamwork
 BROADER, CONCEPTUAL SKILLS: strategic planning, operational planning, organisational design and
policy skills, decision-making skills

ON THE JOB TRAINING

DEFINE [2]
- On the job training is the training that occur at the workplace which is conducted by an expert from within the business or
sourced externally
 As commonly associated with new employees
- This occurs when employees NEED TO LEARN A SPECIFIC SET OF SKILLS TO PERFORM TASKS in the workplace,
 usually TAKEN PLACE IN THE PHYSICAL WORKING ENVIRONMENT
 to use the necessary equipment, machinery and documents present in the actual work environment.

WHAT DOES IT CONSIST OF? [5]

- COACHING, TUTORING / MENTORING that is provided by a supervisor or work colleague

- ROLE-MODELLING in which employees imitate the behaviour of a manager / supervisor / work colleague
- APPRENTICESHIP where an employee learns from an experienced person
 - PARTICIPATION in planned work activities, special assignments, committees
- JOB ROTATION within or between departments to provide broader experience and greater familiarity with the entire
business and its operations

ADVANTAGES [4]

- Employees practice UNDER THE SUPERVISION OF MORE EXPERIENCED STAFF acting as their coach or mentor
- Training is TAILORED TO MEET THE SPECIFIC NEEDS of the business
- MOST COST-EFFECTIVE WAY to train because there is no need to pay for an outside course provider

DISADVANTAGES [3]

- QUALITY OF TRAINER MAY VARY if mentor / coach is not trained in how to act in this role
 Bad habits may be passed down
- Mentor / coach may CRAM TOO MUCH INFORMATION IN ONE TRAINING SESSION which can be counter-productive
- Bringing an external trainer into the workplace who, while they have knowledge and skills, MAY BE COMPLETELY
UNFAMILIAR with the equipment and working practices at that business

OFF THE JOB TRAINING [4]

DEFINE [2]

- Off the job training is the process that involves SENDING INDIVIDUALS OR GROUPS OF EMPLOYEES TO AN
EXTERNAL SPECIFIC SPECIALISED TRAINING INSTITUTE such as that of a university or TAFE college
 so that employees can gain
 a specialised qualification (typically awarded as a certificate)
 or a specialist provider with PARTICULAR KNOWLEDGE RELEVANT TO AN
INDUSTRY, TYPE OF EQUIPMENT OR PRODUCT.

WHAT DOES IT CONSIST OF? [4]

- INFORMATION PRESENTATION STYLE in which lectures are held for a large number of attendees with little opportunity
for interaction (virtual)
- INFORMATION PROCESSING STYLE where specialists from inside and outside the business are involved in conference
and discussion groups.
 Can be conducted online as ‘e-training’
 Coursework may be completed both at work or in their won personal time
- SIMULATIONS – visual games and case studies used to model real-life situations
- ROLE PLAYS – acting out an industrial dispute

ADVANTAGES [3]

- Can PROVIDE FORMALLY RECOGNISED QUALIFICATION

- A wider range of SKILLS AND QUALIFICATIONS ARE AVAILABLE that can be TAUGHT/LEARNED FROM
SPECIALISTS AND EXPERTS
- Provides opportunity for NETWORKING AND INFORMATION SHARING with employees from other businesses or peer
groups with similar requirements

DISADVANTAGES [3]

- Employees after ACQUIRING THE QUALIFICATIONS MAY BE TEMPTED TO LEAVE the business to find work
elsewhere, possibly for higher pay
- MORE EXPENSIVE if paying course fees, transport and possibly accommodation
- LOST WORKING TIME AND POTENTIAL OUTPUT from employees while on training course

Performance Management
PERFORMANCE MANAGEMENT [11]
DEFINE [4]

- Performance management is the system as a VITAL PART OF A MANAGER’S ROLE undertaken by any business
 in an attempt to improve organisational, functional and individual performance
 through LINKING WITH AND ACHIEVING ITS OVERALL AND INDIVIDUAL OBJECTIVES.
- It is a CONTINUOUS PROCESS of evaluating
 HOW EFFECTIVELY EMPLOYEES ARE FULFILLING THEIR RESPONSIBILITIES
 And CONTRIBUTING TO THE ATTAINMENT OF BUSINESS OBJECTIVES.
 - The results of individual employees will help the relevant group or business unit to achieve its objective where
EMPLOYERS AND EMPLOYEES CAN WORK IN CONJUNCTION
 to monitor the employee progress and correct anything that is not being done well
 as well as providing a chance to recognise what an employee is excelling in.
- Therefore, it is IMPORTANT THAT THERE IS TRANSPARENT COMMUNICATION between management and
employees
 as achieved through conducting frequent reviews and more realistic objectives as measured by
the level of performance attained.

MANAGEMENT BY OBJECTIVES

DEFINE [4]
- A management by objectives (MBO) systematic approach involves the appraiser (manager) and the Appraisee
(subordinate/employee) JOINTLY SETTING AND MONITORING INDIVIDUALISED OBJECTIVES for a specified amount
of time
- This system therefore requires GOALS RELATING TO THE EMPLOYEE’S AREA OF RESPONSIBILITY
 to which their PERFORMANCE IS MEASURED AGAINST AT THE BEGINNING OF THE
REVIEW PERIOD
- Resultingly, through cooperatively setting objectives MBO is RELIANT ON PARTICIPATIVE GOAL SETTING, where
goals are achieved and set for individual employees in adherence to the mnemonic SMART mechanism.
- Therefore, the PERFORMANCE MANAGEMENT COMES INTO EFFECT IN REGARD TO MEASURING
PERFORMANCE AGAINST THOSE OBJECTIVES and assessing what the employee has achieved, whereby
accomplishments are rewarded.

WHY IS MBO EFFECTIVE [3]

- Therefore, employees are actively involved in the goal-setting activity, which as a result they are MORE LIKELY TO
UNDERSTAND their responsibilities and the results expected of them
 in the recognition of their contributions of their activities towards overall goals of the business.
- This allows for efficiency in that both individual and business goals are completed, CREATING A CLOSE
RELATIONSHIP in the way employees are managed and allows for employee engagement and consequently, motivation.
- The practice is advantageous in that BOTH MANAGER AND EMPLOYEES ARE AWARE OF THE EXPECTED
OBJECTIVES and standards and gives opportunity for career development if found that the employee would be valuable
in other respects.

HOW CAN MBO BE EFFECTIVE [2]

- To be effective, management by objectives also NEEDS MANAGERS TO BE AWARE OF THEIR EMPLOYEES’
PROGRESS in achieving their objectives
 where if required they may offer assistance, additional resources or training to assist in
achieving the set goals where otherwise targets are likely to be missed.
- EMPLOYEES ALSO NEED TO TRACK THEIR OWN PROGRESS AGAINST OBJECTIVES, as this will then assist in the
appraisal process.

APPRAISALS [2]

DEFINE [5]
- A performance appraisal is:
 the formal assessment for measuring HOW EFFICIENTLY AND EFFECTIVELY AN
EMPLOYEE IS PERFORMING in their role in the business over a set period of time
 and the subsequent provision of feedback to employees
 and establishment of plans to improve performance.
- It MEASURES CURRENT PERFORMANCE AGAINST EXPECTED PERFORMANCE and focuses on the strengths and
weaknesses of the employee.

HOW OR WHEN ARE APPRAISALS CARRIED OUT [5]

- Typically, this process WILL INVOLVE AN INITIAL MEETING between management and employees
 that is advantageous in the employee receiving a chance to discuss improvements relating to
the workplace.
- Furthermore, APPRAISALS OCCUR THROUGH:
 the arrangement of regular reviews
 discussions between the manager and employee
 determination of measurements or standards of performance
 and an agreement on plans for future development and improved performance.
- FORMAL OR SYSTEMATIC APPRAISAL usually occurs on an annual basis or on the completion of a major work project
or assignment
 - However these assessments DO NOT HAVE TO STRICTLY BE EMPLOYED IN A FORMAL OR SYSTEM-BASED
SITUATION
 where appraisals may be performed on an informal basis THROUGH ORAL OR WRITTEN
FEEDBACK
 where this immediate evaluation can be judiciously and objectively used to
 either affirm and encourage or rectify an undesirable situation before it gets worse.
- To carry out an appraisal, 3 MAIN OBJECTIVES MUST BE MET where it should
1. Act as a measurement for performance, particularly against which promotion and pay rises can be decided
2. Provide feedback from management to employees regarding work performance
3. Establish plans in helping the organisation monitor employee selection, identify the needs to employees
relating to training and development to in turn adjust objectives.

SELF EVALUATION

DEFINE [2]
- Most businesses that adopt a performance management system incorporate self-evaluation to which an employee is
REQUIRED TO SELF-ASSESS ELEMENTS OF BOTH:
 their performance relating to their predetermined objectives
 and their contribution to their business team or unit.
- Often these results WILL DIFFER FROM THOSE EVALUATED BY THE MANAGER
 which creates opportunity for two-way communication between the parties
 which allows for engagement and assistance
 as the manager gives insight into the employee’s perceptions, strengths and
weaknesses.

WHY IS SELF EVALUATION EFFECTIVE? [3]

- THUS, FOR AN EMPLOYEE
 it provides them with an active and engaged role in the performance management process
 and assists them to be more driven to achieve their targets.
- SIMILARLY, IT GIVES THE MANAGERS THE AVENUE TO
 gain insight into the employee’s perceptions of their performance
 while also gaining an understanding of the strengths and weaknesses that the employee
perceives they have.
- As a result, AN EMPLOYEE IS ABLE TO REFLECT ON THEIR INDIVIDUAL PERFORMANCE and how it may improve
with additional training or development programs
 which such OPPORTUNITY IS ENABLED BY THE MANAGER
 in the indication that measure of PERFORMANCE IS CONCORDANT BETWEEN MANAGER
AND EMPLOYEE.

EMPLOYEE OBSERVATION

DEFINE [2]
- If a business wants to gain a BROADER, MORE OBJECTIVE PERSPECTIVE ON THE PERFORMANCE OF AN
EMPLOYEE and their strengths and areas for development
 they may implement a 360-degree multisource feedback process in OBSERVING THEM AND
THEIR WORK HABITS, to make an assessment.
- Employee observation allows for a more OBJECTIVE ASSESSMENT THAT CAN HELP OVERCOME any
 Bias
 Tension
 or a clash of personalities that may currently exist between a manager and employee.

HOW AND WHY IS IT CARRIED OUT [4]

- This 360-degree multisource feedback process INVOLVES A NUMBER OF OPINIONS
 that is collected on a regular basis from people who work with the employee
 that is inclusive of
 managers
 colleagues
 subordinates
 customers
 so as to give a broader perspective
- When USING THIS METHOD OF PERFORMANCE MANAGEMENT, IT IS BEST:
 not to allow the employee to realise that the manager is monitoring their performance
 as this is likely to have an effect on the way they they conduct themselves
- To assist businesses wishing to adopt employee observation as one of their performance management strategies
COMPUTER SOFTWARE HAS BEEN DEVELOPED TO AUTOMATE the 360-degree feedback process.
 - Through this, a manager is also more likely to SEE THINGS THAT CAN HAVE A CONSTANT EFFECT ON EMPLOYEE
PERFORMANCE
 such as a printer that is constantly malfunctioning

Termination
TERMINATION
DEFINE [2]
- Termination refers to the ending of the employee contract and overall relationship, to which a subordinate leaves a
particular workplace resulting from employer or employee decisions.
- The relationship may be terminated either by voluntary or involuntary methods.
 VOLUNTARY – quitting, retirement
 INVOLUNTARY – entrenchment, dismissal

HOW IS TERMINATION CARRIED OUT ETHICALLY [2]

- This is usually managed by the HR manager where it is important to ensure that all terminations are conducted correctly to
ensure legal compliance while also acting in an ethical manner.
- Regardless of whether the employee is leaving the business voluntarily or involuntarily, the employer is obligated to
provide the subordinate with any mandatory pay and a detailed statement of their termination entitlements, whilst the
employee must return any company property in their possession.

VOLUNTARY [4]

DEFINE [2]
- voluntary termination when an employee decides to leave a business either by resigning to go to another job or by retiring
from the workforce
- Regardless of whether the employee is resigning or retiring, they are entitled to receive from their employer their accrued
entitlements, such as payment of untaken annual leave and long service leave.

RESIGNATION [4]
- Resignation is a voluntary termination to which an employee decides to leave a business, generally to take up another
position.
- Prior to leaving, an employee must notify the employer in writing, through a period of notice, of their intention to resign and
advise the ending date.
 As indicated by SECTION 117 of the FAIR WORK ACT 2009 which specifies the requirement
for notice of termination or payment in lieu
- An exit interview is recommended, as it helps to highlight and solve if there are any problems in that business that have
led to dissatisfaction causing the resignation and that may need to be rectified by the business to resolve and minimise
any future resignations.

RETIREMENT [5]
- Retirement is voluntary termination where an employee decides to leave the workplace and the paid workforce altogether,
generally as an end to a person’s working life.
- This avenue is typically associated with senior employees however can also be executed by younger employees if they
decide they no longer need to or are unable to work due to health conditions.
- The employee must advise their employer in advance of their intention to retire as per a period of notice where often the
end date is negotiated between the parties.
 As indicated by SECTION 117 of the FAIR WORK ACT 2009 which specifies the requirement
for notice of termination or payment in lieu
 - For long-serving employees, this allows the business to make arrangements for a farewell function to be held to recognise
the employee’s contribution to the business.

IMPACT OF VOLUNTARY TERMINATION [6]

- The impact of employees voluntarily leaving a business can be felt in the following ways:
 loss of talent
 cost of replacement
 decline in morale
 breakdown of effective teams
 productivity could increase or decrease (depending on the effectiveness of the departing
employee)

INVOLUNTARY [3]

RETRENCHMENT + REDUNDANCY [8]

- Generally, retrenchment is usually linked with redundancy.

- [4] Redundancy is the termination of employment by an employer where an employee is redundant when there is no
longer sufficient work for them to perform because the particular job they perform is no longer needed or requires fewer
people to complete it.
- Redundancies occurs when a person’s job no longer exists usually due to:
 changes or introduction of technology or automation
 an internal organisational restructure
 poor economic activity
 the duties of a position are reallocated to other employees
 the business merges with or is acquired by another business
- Redundancy must be carried out in a lawful manner in accordance with the NATIONAL EMPLOYMENT STANDARDS
(NES) that requires an employee be advised of the reasons for termination, a period of notice within a minimum allotted
timeframe as per the FAIR WORK ACT 2009 and redundancy payments. [2]
 As indicated by SECTION 117 of the FAIR WORK ACT 2009 which specifies the requirement
for notice of termination or payment in lieu
 Further referred to within SECTION 119 of the FAIR WORK ACT 2009, outlining the entitlement
to redundancy pay
- Redundancy can be voluntary or involuntary.
 Voluntary redundancy can occur when the business wishes to reduce size of
workforce, and informs employees or situation, giving them the opportunity to
volunteer to be made redundant
 Involuntary redundancy is not due to the decisions or actions of an employee but
rather to suit ongoing needs of the business

- [3] ‘To be retrenched’ is the expression used to describe retrenchment what occurs to an employee when their job
becomes redundant.
- It is essential that if a business is retrenching an employee it is carried out in a lawful manner.
- Is essentially the same as redundancy, except redundancy occurs due to the permanent elimination of a job, whereas
retrenchment is due to a lack of sufficient work for that employee

DISMISSAL [10]
- Define [4] – Dismissal is the termination of an employment contract due to unsatisfactory work performance or illegal
behaviour, typically resulting from incompetence or indiscipline following a failure in appropriate counselling or disciplinary
procedures
- A business must ensure that it has conducted appropriate counselling and disciplinary procedures before a dismissal
takes place.
- When dismissing employees, an employer must provide a written notice of termination and a reason for termination so as
to ensure that no bias affected the decision.
 The period of notice is based on the number of years of continuous employment by the
employee
- As indicated by SECTION 117 of the FAIR WORK ACT 2009 which specifies the requirement for notice of termination or
payment in lieu
 - [2] In the case of an employee committing a serious breach of their employment contract such as being drunk at work or
engaging in criminal activity, it is referred to as summary dismissal meaning the dismissal is immediate.
- As such summary dismissals require no notice; however they still must be paid entitlements

- [4] Where an employee is performing poorly or unsatisfactorily, they receive a dismissal on notice, in which to avoid
misunderstanding, written warnings and notice are preferable.
- The amount of notice depends on things such as awards, length of employment and age of employee.
- Employees should be warned if their work performance is unsatisfactory prior to being dismissed.
- As indicated by SECTION 117 of the FAIR WORK ACT 2009 which specifies the requirement for notice of termination or
payment in lieu

UNFAIR DISMISSAL [2]

- Unfair dismissal is when an employee is dismissed in a harsh, unjust or unreasonable manner, particularly for
discriminatory reasons.
- Unfair dismissal may occur if an employee is dismissed because of [5]
 Absence from work due to illness
 Either belonging to or not belonging to a trade union
 Pregnancy
 Race
 Sexual orientation

HOW CAN AN EMPLOYEE DEAL WITH UNFAIR DISMISSAL [5]

- In an instance where an employee believes that their employment has been terminated unfairly, they are eligible to lodge
a claim with an industrial tribunal or make an application to THE FAIR WORK COMMISSION (FWC) so as to be
compensated or reinstated.
- THE FAIR WORK ACT 2009 takes measures to protect employees from unfair dismissal and provides a way for
employees to take legal action against their employer if they think they were unfairly dismissed.
 This is specified through SECTION 351 to which ‘an employer must not take adverse action
against … an employee … because of the person's” individual circumstances.
- In order to be viable for compensation, they employee must have:
 Completed the minimum employment period of one year (small business) or six months (for
other employers)
- If the application is found legitimate, the FWC will employ dispute resolution methods to resolve the matter, first through
conciliation in which parties attempt to reach a mutual agreement before arbitration is held where the FWC makes a final
binding decision in regard to the evidence both the employer and employee present.
- The FWC may:
 Order the employer to reinstate the employee
 Compensate them for up to 26 weeks pay

ENTITLEMENTS [5]

- These refer to benefits and payments an employee receives when their employment is terminated of which some must be
given to employees as required by law, and some as part of their contract or out of the goodwill of the organisation
- When an employment relationship ends, employees are entitled to: [4]
 [automatic] remuneration (wages or salary) that the business still owes
 [automatic] accrued annual leave
 [if applicable] their long service leave entitlements
 [redundant] severance or redundancy entitlements
- With regard to voluntary and involuntary termination entitlements can include
 Retirement: pay out of any unused annual leave or sick leave
 Resignation: pay out of any unused annual leave or sick leave
 Redundancy/Retrenchment: usually a redundancy ‘package’ which involves a pay-out
of a certain amount
 Dismissal: pay out of any unused annual leave or sick leave
- In the event that an employee is uncertain or believes they have not received all of their entitlements, they can apply to the
Fair Work Ombudsman to investigate and take action to make sure that all their legal entitlements are actually paid.
- Should an employer be found to not have complied with their obligations, they may be liable to a penalty for each
contravention.

TRANSITION ISSUES [4]

DEFINE [1]
 - This refers to the support and information that employees may need when their position is terminated

RETIREMENT [4]
- Employees who are retiring from the paid workforce often need assistance in organising their finances such as through
superannuation advice, financial planning. pension entitlements, investments and information on government benefits.
- Guidance may also be needed to ease them into their change in lifestyle or connect them with opportunities to give back
to the community through volunteering, as employees may find it difficult to completely cut themselves off from the
business world.
- In order to make this change easier, ‘transitioning’ has become a trend among senior employees in which they continue
working however reduce the number of their working hours in the lead up to their retirement.
- This can prove advantageous both for the business and the employee as the business can build this into their succession
planning and use the skill and knowledge of the transitioning employee to mentor their replacement.

RETRENCHMENT – OUTPLACEMENT [5]

- When employees are being retrenched, outplacement services are a type of specialised assistance involving career
counselling or the provision of assistance for employees with job seeking by the business
- Initially, the work involves counselling to counteract the negative feelings associated with retrenchment which then
progresses to skill development in how to look for employment opportunities.
- Thus the individual employee is assessed on what assistance they require, through retraining as some may need direction
with resume writing and interview techniques, where the costs associated with this service are borne by the former
employer.
- In recognition of the need to support workers to manage the change that occurs when they have been made redundant
due to structural unemployment issues, has introduced a Stronger Transitions package.
 This aims to assist retrenched workers due to structure unemployment, to be put on the pathway
to finding new jobs and taking advantage of labour market opportunities.
 Thus retrenched employees are automatically entitled to redundancy packages as per the
National Employment Standards (NES) as regulated by the Fair Work Ombudsmen.
- These efforts in assisting the employee with their transition into another business can be seen as rewarding the employee
for their loyal service, sending a message to its current staff that they care for their people.
 EXAMPLE – this is best demonstrated through Toyota and Holden

OTHER [3]
- RESIGNATION: Employer’s reference or statement of employment that can be used for future employment
- DISMISSAL: Formal explanation of reasons for dismissal, perhaps counselling
- Whenever an employee leaves, an exit interview is recommended, as it helps to highlight and solve if there are any
problems in that business that have led to dissatisfaction causing the resignation and that may need to be rectified by the
business to resolve and minimise any future resignations.

Workplace Relations
WORKPLACE RELATIONS
DEFINE [3]
- workplace relations historically referred to as industrial relations or employee relations is, concerned with the contractual,
emotional, physical and practical relationship or communication between employer and employee in the establishment of
conditions of employment and the resolution of disputes.
- Workplace relations involves their total interplay regarding all aspects of their working relationship, either through direct
dealings and negotiation or via the use of an intermediary, such as a trade union or employer association.
- Overseeing workplace relations is a key responsibility of the human resources department, with HR specialists
responsible for development and implementation of a workplace relations policy that regulates
 Conditions of employment
 Establishing wages
 Setting workplace grievances

WHY IS IT IMPORTANT [4]

- Businesses aim to establish positive workplace relations as these are vital to the achievement of efficient productivity and
the minimisation of waste, whereby this gives the business a competitive advantage.
- The aim in workplace relations is to achieve an optimum working relationship between the employees and management
that will create optimum worker and business productivity levels, leading to greater business competitiveness.
- Good workplace relations enhance workplace productivity through development of motivated, effective and highly skilled
employees.
 - The state of workplace relations within a business is therefore crucial to its chances of survival in an increasingly
competitive world economy.

BASIC CAUSE OF DISPUTES BETWEEN EMPLOYERS AND THEIR EMPLOYEES [3]

- Conflict may arise when, in pursuing business objectives, differences exist between what employers want and what
employees want
- Employers and their employees usually have different viewpoints as to how profits generated through their productive
efforts should be shared or distributed.
- Employers wishing to promote business growth seek capital reinvestment in the business and payment of dividends to
shareholders, while employees tend to seek better pay and working conditions.

HOW TO ACHIEVE GOOD WORKPLACE RELATIONS [2]

- The facilitation of positive, productive relationships with employees as typically achieved through decentralised
management styles such as the participative approach
 to management improves productivity and employee commitment to the business due to feelings
of value and employee input.
- Workplace relations are optimised when:
 Commitment of both management and employees to achieve objectives
 Creates a common purpose
 Promotes teamwork
 Allowing employees to feel their contribution is valued
 Builds employee trust
 Develops loyalty
 Treating employee complaints in a serious manner
 Prevents more serious problems in future
 Effective communication skills
 Employees may empathise with management
 Provision of fair pay and working conditions
 Recognises achievement
 Creates a positive workplace atmosphere

Participants in Australian Workplace Relations

PARTICIPANTS [4]
TRADE UNION AND EMPLOYEES

DEFINE
- [3] A trade union is an organisation formed by employees, typically from the same or of a similar industry, that collectively
protect common interests in matters relating to their employment in a particular industry.
- Thus trade unions protect worker’s rights in representing union members by developing existing or creating new
employment agreements, so as to ensure that employers are abiding by them.
- In turn, trade unions with the aim of getting the best possible deal for the employees that they represent typically seek to
improve wages and working conditions

- [3] An employee is an individual who was hired by an employer to do a specific job.

- These people maximise their pay and job security and achieve a good work and life balance.
- Nowadays, on average employees are more educated than they have been historically, and demand greater autonomy
and involvement in decision making at their workplace

WHAT DO THEY DO? [4]

- The Australian trade union movement originated in the late nineteenth century
 arising as a consequence of the poor working conditions experienced by many employees at the
time.
- By mobilising and uniting groups of employees, trade unions in turn achieve significant improvements in wages and
working conditions for Australian workers such as
 annual leave
 pensions
 superannuation, maternity leave and parental leave.
- Employees who choose to join a union pay an annual subscription fee.
- The union then will:
 Negotiate and bargain on their behalf during the collective bargaining process
 Argues employee’s cases during hearings that determine awards
  Provides support and advice to local union workers at the workplace level
 Provides assistance and support to individual workers
 Offer services, information and facilities to members on matter relevant to their
workplace situation
 Acts as official spokesperson to the media on behalf of union members

HOW UNION MOVEMENT WORKS WITH INDUSTRIES [3]

- Members of a union at a worksite elect, from among themselves, a union
representative whose role it is to liaise with management and the union executive
regarding workplace relations issues.
- The elected union representative liaises with management and union executive
regarding workplace issues
- For workers in Victoria, there are two key union organisations:
 THE AUSTRALIAN COUNCIL OF TRADE UNIONS (ACTU)
is the national peak body of the Australian union movement
as formed in 1927
 to which represents trade union in the media and
during negotiations at a national level
 representing the union movement in dealings with
the government and at Fair Work Commission
hearings.
 THE VICTORIAN TRADES HALL COUNCIL (VTHC)
implements the ACTU policy within Victoria, in this way
ensuring that the ACTU is being enforced.

POSITIVE EFFECT OF UNIONS [3]

- Since the 1980s there has been a significant decline in Australian trade union membership.
- This is in part due to businesses interacting more with their employees, who have a greater opportunity to take an active
role in the negotiation of wages and conditions due to the rise of enterprise agreements and individual employment
contracts.
- These legal documents safeguard worker’s rights and are able to be criticised if found poor on review.

EMPLOYER ASSOCIATIONS AND EMPLOYERS [3]

DEFINE [6]
- [4] Employer associations are organisations that represent and assist employer groups of who make up such
associations e to promote a common interest in workplace relations issues, representing their interests on employee
related issues.
- They sometimes take part in employee relations on behalf of the employer and publicly represent them to the media
- They share information and provide mutual support much in the way that trade unions do for employees.
- They were originally created by employers in response to the employee membership of unions, and as such share
information and provide mutual support towards employers, much in the way that trade unions do for employees

- [2] Employers offer jobs to employees and expect loyalty, effort and commitment to the business.
- They handle employee relations issues on a daily basis and as such develop programs, train and skill up staff and will hire
specialists to be involved in the negotiation of pay and working conditions.

TYPES [1]
- There are three types of employer associations:
 INDUSTRY ASSOCIATIONS – are made up of employers from the same industry
 PROFESSIONAL ASSOCIATIONS – are made up of members of a profession
 BROAD-BASED OR PEAK BODIES – are comprised of large numbers of employers from
varied industry types

ROLE [4]
- Their role is to:
 Represent employers in Industrial Relations Commission cases
 Represent employers during collective bargaining over wages and conditions
 Advise employers of their rights and obligations
 Acts as a spokesperson for members of their organisation as a bloc

HUMAN RESOURCE MANAGER

DEFINE [1]
 - Human resources, otherwise connoted as HR, is the functional area, that is responsible for the people within the
organization by managing the overall relationship the business has with its employees

ROLE [3]
- These people represent the organisation at its most basic level in the area of employee and workplace relations.
- Human resources managers play a crucial role in workplace relations
 whose employee relations specialists’ primary function is to liaise closely with other departments
 to create harmonious and productive workplaces, staffed by motivated, skilled and fulfilled
employees.
- They have the function to: [3]
 Negotiation with employees and / or representatives (unions) regarding workplace relations
issues, such as establishment of collective agreements through enterprise bargaining
 Acting as an intermediary between employees / unions and senior management
 dealing with the disputes and grievances that may arise out of employee relations

THE GOVERNMENT AND THE FAIR WORK COMMISSION [2]

DEFINE [2]
- The federal government is able to exert an enormous influence on Australian workplace relations through the enactment
of legislation, as interaction between employers and employees can have significant repercussions for both the Australian
economy and the general public
- A wide range of laws have been passed that directly affect the employer–employee relationship, and how WR is
conducted, particularly in areas such as:
 OH&S
 Equal opportunity and guidelines relating to pay and working conditions for employees
 Management of workplace disputes

FAIR WORK INSTITUTIONS [12]

- The FAIR WORK ACT 2009 established three independent government bodies to oversee and operate the Australian
system of workplace relations:
 Fair Work Commission
 Fair Work Ombudsman
 Fair Work Division of the Federal Court and Federal Circuit Court of Australia

- [2] The Fair Work Commission (FWC) is Australia’s national workplace relations tribunal or industrial court and owns
jurisdiction, is an independent body with the power to decide matters of fact, over all disputes arising from workplace
relations.
- They are responsible for the function of a range of areas involving:
 Creating and maintaining a safety net of minimum wages and working conditions that all agreements must
abide by
 Which are set out in 122 industry and occupations awards.
 dealing with unfair dismissal
 Providing assistance with and resolving collective and individual workplace disputes.
 Providing support for enterprise bargaining, ensuring the process is fair

- [3] The office of the fair work ombudsman promotes compliance with the FAIR WORK ACT 2009 and other related
employment legislation, awards and registered agreements.
- They perform this through their role to:
 appoint inspectors to monitor compliance
 take enforcement action through the courts when necessary
 provide advice and education on the pay rates and workplace conditions that
employees are entitled to.
- The ombudsman act as:
 A point of contact for information
 A function able to assess and investigate complaints and suspected breaches of
workplace legislation, awards and registered agreements
 Can act on the behalf of employees in court proceedings to enforce employee rights
and obligations

- [3] Fair work division of the federal circuit court of Australia is a division of the federal court located in all major cities
and regional centres in Australia that owns jurisdiction in hearing disputes arising from breaches of the FAIR WORK
ACT, such as unfair dismissal.
- This division aims to resolve workplace issues in a less formal environment so as to deal with matters promptly and
efficiently.
 - Decisions reached through this decision are able to be appealed before the federal court appellate jurisdiction, which is
the final avenue of appeal in industrial matters

Awards and Agreements for Determining Wages and Conditions of Work

AWARDS AND AGREEMENTS
INTRO [2]

- There are systems in place that establish employee wages and conditions, as per the FAIR WORK ACT 2009.
- The fair work ombudsman and fair work commission are responsible for the monitoring and enforcement of minimum
entitlement requirements.

NATIONAL EMPLOYMENT STANDARDS

DEFINE [3]
- The FAIR WORK ACT 2009 sets out 10 minimum employment entitlements whereby providing employees with
preventive measures of minimum terms and conditions that employers must met, known as the National Employment
Standards (NES).
- Awards, employment contracts or enterprise agreements cannot provide for conditions that are less than or contravene
with the entitlements stated by the NES, such as providing less than the national minimum wage.
- All employees are automatically and legally entitled to the NES.

STANDARDS [10]
- The NES are the minimum standards of employment and cover:
1. MAXIMUM WEEKLY HOURS
 38hrs per week, plus reasonable additional hrs
 As per SECTION 62 of the FAIR WORK ACT 2009
2. REQUESTS FOR FLEXIBLE WORKING ARRANGEMENTS
 certain employees (students and those with sicknesses) can request a change in their working
arrangements
 As per SECTION 65 of the FAIR WORK ACT 2009
3. PARENTAL LEAVE AND RELATED ENTITLEMENTS
 up to 12 months unpaid leave per employee, the right to request an additional 12 months leave
 As provided for by SECTION 70 of FAIR WORK ACT 2009
4. ANNUAL LEAVE
 four weeks paid leave per year, plus an additional week for some shift workers
5. PERSONAL / CARERS LEAVE AND COMPASSIONATE LEAVE
 up to 10 days per year paid personal / carer’s leave
 As provided for by SECTION 97 of FAIR WORK ACT 2009
6. COMMUNITY SERVICE LEAVE
 unpaid leave for voluntary emergency management activities and up to 10 days paid leave for
jury service
7. LONG SERVICE LEAVE
 paid leave for employees who have been with the same employer for a long time
8. PUBLIC HOLIDAYS
 an entitlement to a day off on public holidays, unless reasonably requested to work
9. NOTICE OF TERMINATION AND REDUNDANCY PAY
 up to four weeks’ notice of termination and up to 16 weeks redundancy pay
10. FAIR WORK INFORMATION STATEMENT
 a document must be provided to all new employees

AWARDS [2]

DEFINE [3]
- Industry-wide awards are the legally binding minimum requirements that set out minimum wages and conditions for
employees that are set out and apply for a specific industry, such as pay and length of shifts in nursing.
- These do not apply when a business has an enterprise agreement or utilises other registered agreement with its
employees.
- They meet the 10 national employment standards and developed at the industry level by the Fair Work Commission of
which reviews awards every four years and are legally enforceable to ensure that finances are able to support an
adequate standard of living, taking into account inflation of commodities

WHAT DOES IT COVER [5]

- They also establish terms of employment for various occupations and levels in a particular industry, with 122 industry and
occupation awards that cover most Australian employees.
- There is an individual flexibility clause, which states that employers and employees can make an individual agreement to
suit their needs, but it cannot disadvantage employees.
- There is wage equality and transparency across an industry.
 - During the negotiation process there is stability and predictability
- Awards cover: [5]
 Minimum wages
 Working conditions and overtime
 Meal breaks
 Holiday and leave
 Penalty rates and allowances

ENTERPRISE OR COLLECTIVE AGREEMENTS

DEFINE [6]
- An enterprise agreement is a written collective agreement made with direct negotiation between employer and groups of
employees with their chosen representative usually, a trade union
 To determine the terms and conditions of employment reached through the negotiation process
of enterprise bargaining.
- Provides less wage equality and transparency across industry
- This is conducted at workplace level rather than industry level that allows for these agreements to be more flexible and
tailored to meet the individualistic needs of employers / employees.
- An enterprise agreement must be ratified/approved by a majority vote of employees affected and negotiations must be in
good faith.
- It must also be registered and approved by the Fair Work Commission who will reinstate it if the following criteria are me
 The no disadvantage test applies where employees to be covered must be better off
overall than under the relevant modern award
 No unlawful terms included
 The agreement runs for a specified time of up to four years
 A dispute settlement procedure is included
- Once an enterprise agreement is in place, both employer and employees are legally bound to adhere to it.

INDIVIDUAL EMPLOYEE CONTRACTS [5]

- Individual contracts is an agreement negotiated between an employer and one employee to which they may sign a legal
agreement with their employer regarding their own wages and conditions of employment.
- The no disadvantage test applies where employees to be covered must be better off overall than under the relevant
modern award
- Like any other contract, it is legally enforceable, as they cannot be below the minimum conditions stipulated under the Fair
Work Act
- For such a contract to be legally valid, the provisions must not contravene with the conditions set out in the NES or in
other relevant awards or enterprise agreements. It is estimated that 40% of Australian employees are in an individual
employment contract.

NATIONAL MINIMUM WAGE ORDERS [1]

- Set by the Fair Work Commission, the national minimum wage is reviewed annually and automatically applies to all
Australian employees acting as a safeguard for those not covered by an award or enterprise agreement.

DIFFERENCE BETWEEN COLLECTIVE AGREEMENTS AND INDIVIDUAL CONTRACTS

Distinguish between collective agreements and individual contracts and explain what an employer would need to be
careful of if they are going to use either one.

- A collective agreement is where employment arrangements are decided at a workplace level, between the employer and a
group of employees.
- In contrast, an individual contract is negotiated between an employer and an individual employee, and therefore the
distinguishing factor between these two types of agreements are the number of employees they apply to.
- When negotiating either collective agreements or individual contracts, an employer and employee should keep in mind the
‘no-disadvantage’ test, which means that whilst employees can negotiate their own contracts outside of the industry-wide
awards, their cannot be any part of the contract that will make an employee worse off than they would be under the award.
SIMILARITIES [3]

- Both methods of determining wages and conditions and involves FWC

- Include participation of bargaining agent, such as unions
- Both must meet 10 National Employment Standards

DIFFERENCES [5]

- The distinguishing factor between these two types of agreements are the number of employees they apply to.
- When negotiating either collective agreements or individual contracts, an employer and employee should keep in mind the
‘no-disadvantage’ test
 which means that whilst employees can negotiate their own contracts outside of the industry-
wide awards, their cannot be any part of the contract that will make an employee worse off than
they would be under the award.
- Awards are industry-wide, agreements made at workplace level between in employee and employer
- For awards, unions must make submission to FWC when awards is being revised, for agreements union may be directly
involved in negotiation
- Agreements have additional wages etc. because they have to be ‘better-off overall’

Workplace Conflict and Dispute Resolution

DISPUTE RESOLUTION PROCEDURES
DEFINE [6]

- Conflict refers to disputes, disagreements or dissatisfaction between individuals or groups which in a workplace situation
is most likely to occur between employees and management
- As employers and employees own their own contrasting different perspectives as to how profits should be distributed
among the business, this causes disputes to arise concerning capital investment, dividends and working conditions.
- Complaints may also relate to calculation of wages, working conditions and hours, management policies or major
workplace change, job security and workload issues, personality conflicts or in cases of disciplinary action like workplace
bullying.
- If a dispute cannot be resolved at the workplace level, it may be necessary to involve a third party to assist in resolving the
matter.
- All businesses must have dispute resolution procedures in place that parties follow to resolve conflicts which are a formal
systematic process to, that permit employees to put forward complaints about matters that affect them and their work.
- Most modern awards and enterprise agreements must contain a dispute resolution clause to ease instances of complaint.

TYPES OF DISPUTE RESOLUTION METHODS [4]

- Disputes may be found solved in four different ways:

GRIEVANCE PROCEDURE [3]

- Outside any dispute resolution methods, an organisation must always have a grievance procedure in place.
- Grievance procedures are a formal orderly system whereby the employee and the employer can resolve matters relating
to complaints about wages, hours, working conditions or disciplinary action, with aims of achieving a negotiated outcome
without a third party not affiliated with the business
- It involves a hierarchal structure where the employee can have numerous meetings, moving up the rungs of management
until the dispute is solved

MEDIATION [3]

DEFINITION [4]
- Is a structured negotiation process involving an outcome where the issue is outsourced
- through which an independent third part known as a mediator assists the parties involved to identify and assess the
options that are open to them.
- The mediator facilitates the discussion between the two disputing parties
 to allow them to reach their own mutually beneficial agreement and resolve the dispute
 without offering any input or imposing a decision.
 in order to attempt to resolve the dispute.
 - Mediation is a more cost-effective alternative to a judicial determination on the parties where a court setting would be
required, however as such the agreement would not be legally binding.

EFFECTIVE [3]
- Less expensive and more informal than a court process as it doesn’t involve court or lawyer fees
 Therefore encourages parties in dispute to try to resolve their own conflict with the assistance of
third parties,
- As such because of a requirement for a mutually beneficial agreement, they are both more likely to leave satisfied with the
process and the decision.
- Further advantageous as the promotion of a win-win situation to which the parties in dispute come to their own agreement,
provides avenue for ongoing relationship

INEFFECTIVE [2]
- Not appropriate for cases with a power imbalance, as the decision made may be jeopardised
 As this may result in a potentially unfavourable outcome for the party who does not have power
under that situation
 Leading to a result reflecting the imbalance of bargaining power.
- Aren't legally binding and as such there are few repercussions if one party fails to hold up their part of the agreement

CONCILIATION [1]

DEFINITION [2]
- Conciliation may occur if mediation fails
- where an independent third party assists the parties with proficient, specialised knowledge through advice and potential
resolutions

ARBITRATION [6]

SIMILAR TO MEDIATION/CONCILIATION [3]

- is a process that utilises an impartial third party who oversees the discussion between the parties.
- Both are more inexpensive relative to a court case
- Less strict rules of evidence and procedure compared to courtrooms.

DIFFERENCES TO MEDIATION/CONCILIATION [3]

- It is more formal as evidence is presented to the arbitrator as opposed to a round table discussion.
- Mediator/conciliator cannot impose an outcome
- Arbitrator will make one of behalf of the parties if they are unable to do so.

DEFINITION [3]
- refers to a fairly more formal method of industrial dispute resolution
- involving an independent legally trained arbitrator, usually someone issued by or a commissioner of the Fair Work
Commission
- The arbitrator determines how the dispute is to be resolved where they listen to both arguments and evidence, and in
doing so, imposes a final, legally binding decision on behalf of both parties.

APPROPRIATE [4]
- More serious disputes needing an enforceable decision for more serious disputes
- In situations where one party is less likely to cooperate
- Where there is no ongoing relationship between the parties
- Allows for finality and closure in the case.

EFFECTIVE [3]
- Arbitration is effective as it is a less formal method than the courts
 not adhering to strict rules of evidence/procedure yet still providing a legally binding and enforceable decision
- Thus there are repercussions if one party does not abide by the agreement
- More useful and fair option if there is a power imbalance as decision is imposed upon both parties.

INEFFECTIVE [3]
- The ability to appeal any decision made in arbitration is limited
 Success is rare
 Therefore, any fault or dissatisfaction with the arbitrator’s decision cannot typically be reviewed or reversed.
- Can impose a decision, leading to a win-lose scenario and hence ongoing relationships are likely to be negatively
impacted by the proceedings
- More costly than mediation