Woolworth Company in Australia - Role of HR in Solving Industrial Relations Issue - Case Study Example

Running Header: Industrial Relations Student’s Name: Instructor’s Name: Course Name & Code: Date of Submission: Table of contents Executive Summary …………………………………………………………………………… 3 Introduction …………………………………………………………………………………… 4 Organisational structure ……………………………………………………………………….. 4 Industrial relations issue ………………………………………………………………………..5 Stakeholders in the process …………………………………………………………………….6 Impact of employees and employees ………………………………………………………….8 Role of HR in solving industrial relations issue………………………………………………..8 Conclusion ……………………………………………………………………………………. 9 References ……………………………………………………………………………………. 10 Executive summary Industrial relations involve the bargaining of power between labour and capital. Labour law is therefore necessary to protect employees from inequality of power which is inherent in every employment relationship. This study discusses Woolworth Company in Australia and shows how industrial relations issue has affected the workplace. Having more that 17,000 product lines, Woolworth employees ensure smooth distribution, supply and provision of customer care services. It is therefore necessary for management to ensure that a good relationship is created between the employees and the employers. The company plays a significant role in these peoples’ lives and also in communities where the stores are located. This has therefore enabled the company to introduce methods of engaging with the stakeholders. Conflicts among workers are resolved through collective bargaining and if well managed it can result to a positive change. Trade unions influence unsatisfied workers to discuss their issues with the management in solving industrial relations issues for example by changing the remuneration system should be fair to all as well as the grading system. Industrial Relations Introduction Recent studies show a major problem in industrial relations involving a particular imbalance of power which lies between employers and employees. Australia’s competitive economy is supported by having a flexible workplace relations system that connects company productivity to compensation therefore promoting innovation and efficiency. Abowd and Kramarz (2003, pp. 499-530) describes that industrial relations involves bargaining of power between various interests such as labour and capital. It is therefore necessary for every government to introduce labour law with strict regulations which protect employees from inequality of power which is inherent in every employment relationship. This study discusses Woolworth Company in Australia and shows how industrial relations issue has affected the workplace. Organisational structure The Woolworth Company deals in retailing of various products especially food products and has continually used marketing intelligent in positioning itself in the market and to produce consumer needs. Woolworth current situation is that it is facing heightened competition from rival companies such as Coles. Kotler et al. (2006, p. 104) describes that this competition has resulted to the company not being capable of achieving its profit goals. The other factors that have led to slow profit growth of Woolworths include falling prices in consumer goods and reduced consumer spending. Rosemary (2009) describes that the food stores of Woolworths are said to be dominated by high income earners and more than 17,000 product lines have been set up to deliver the products. The number of staff present at the company is over 190,000 whose core business is to optimise delivery and provide essential services to the customers. Woolworth’s goal is to be recognised in the Australian retailing sector as a leader (Woolworths limited 2009). Industrial relations issue Industrial relations show a collective relationship between the organisational management and its workers. Industrial relations involve a collection of various aspects such as trade unions, collective bargaining and how workers participate in increasing organisational output. It could also mean settlement of grievances among workers and the interpretation of labour laws meant to protect workers welfare. Stone (2005) describes that the National Commission of labour (NCL) advocates for such concepts though it states that employees should be capable of conforming to the labour laws implemented as well as the rules in the code of conduct of the particular organisation. Having more that 17,000 product lines, Woolworth has employed a number of workers who ensure smooth distribution, supply and provision of customer care services. It is therefore necessary for management to ensure that a good relationship is created between the employees and the employers. Industrial relations is seen to affect the economic and the social goals of an organisation and in order to achieve this goals, management should ensure that workers’ well being is effectively maintained. Industrial relations encompass all the factors that influence individuals’ behaviour at work. Some of these factors include institution, character, methods and contents (Dubin 1998, p. 213). Institution refers to the employers, trade union and other federations and associations or even government bodies that directly and indirectly affect the smooth running of industrial relations. Some of these institutions come with power and authority and this tend to change the culture of the organisation and the employees belief. According to Dubin (1998) character involves the study of the role of trade unions, federations and association. It also involves councilors’ role, judges at labour court and tribunals set for advocating workers working conditions. The roles of these individuals affect industrial relations since they have a direct impact on the employees’ character. Methods on the other hand involve collective bargaining and the workers participation in the promotion of industrial relations. Lee (1996) describes that it involves disciplines procedure, machinery used in addressing workers grievances, mad techniques used in settling disputes among employees or between employees and their managers. Other methods used in solving disputes may also involve protesting, reorganisation or revisions of set policies. Contents include the reasons that would make employees feel unsatisfied with their job conditions such as due to poor pay, working hours, leave with wages, workers health condition and safety disciplinary actions used in a particular organisation. Such major factors cause disagreements among workers and their managers (Lee 1996). Stakeholders in the process The size of Woolworth and its reach shows that the operations in the company have an impact on customers, shareholders and staff members. The company plays a significant role in these peoples’ lives and also in communities where the stores are located. This has therefore enabled the company to introduce methods of engaging with the stakeholders. One is by setting up programs that seek input and advice. The groups also share and communicate business knowledge and mutual interests with other groups and individuals. The most important stakeholders in Woolworth include employees, shareholders, customers, suppliers, government and the wider community. The company, however, from time to time engage with both interest and advocacy groups in solving up industrial issues. According to Woolworths limited (2009) shareholder engagement is governed by the Corporations Act 2001 which regulates businesses in Australia. Woolworth therefore ensures that they comply with the laws by engaging and communicating with the shareholders. Their advice should be followed and concerns discussed where appropriate. A call centre is also provided that addresses shareholders issues about the company. Woolworth engages with the customers for example through proper identification of customers’ needs and formulating strategies that provide greater satisfaction such as best shopping experience. Several sources are used to understand the feelings of Australian customers such as in identifying retail trends. Suppliers of Woolworth draw up shared objective plans and are briefed on business goals. Suppliers are communicated to through ‘Trading Partner News’ which is a quarterly newsletter to ensure that they get up to date information about company strategies and goals. Woolworth engages with government by contributing to public policy, direct submissions and through the Australian National Retailers Association. Woolworths limited (2009) describes that having about 190,000 employees, Woolworth is among the largest employers in Australia. The company aims at ensuring that members remain in the team and view the company as a great environment. This is achieved through employee benefits and improving the working conditions for instance the company ensures employee retention by seeking to know employees issues. Finally, Woolworth contributes to the community through corporate responsibility for example it has a Sustainability Advisory Group that advice the community on environmental sustainability. The company also communicates its objective of building a good relationship among customers and the community as whole. There are three major perspectives that analyse workers relations. First, the organisation is seen as an integrated and harmonious family. In this management and other staff share a common goal and this is attained through mutual cooperation. This theory demands loyalty from all the employees and therefore they should be manageable and should apply all the aspects of the organisation. Creighton and Stewart (2000) states that the aspect of trade union does not apply since the employees are in loyalty with their employers and the relationship is considered as mutually exclusive. In this perspective, conflict and disagreements among workers is considered as a disruptive feature that hinders the organisation from development. In this power is applied by the top management who organises the workers activities and set rules and regulations to be followed. In the second perspective, the organisation is perceived as a powerful institution comprising of divergent sub groups. These groups are said to posses their own legal loyalty with different objectives and varying leaders. Some of the most dominant groups in this perspective are the organisational management and the trade unions. The management for example has different goals to achieve and is headed with particular leaders who are different from the goals of trade unions which aim at meeting the needs of employees. Stone (2005) describes that the role of management involve more of influencing workers to follow rules and coordinating them effectively and has less involvement in enforcing rules and controlling workers. Trade unions represent workers by ensuring that their needs are provided according to labour laws. Conflicts among workers are resolved through collective bargaining and if well managed it can result to a positive change. Trade unions influence unsatisfied workers to discuss their issues with the management and if the discussions do not work, other methods are used such as strikes or formations of tribunals. This perceives an organisation as a capitalistic society which consists of major division of interest. This division is applied in the capital and labour factors. Friedman and Wood (2002) show that in this perspective, industrial relations are seen as if it is against the capitalist society. There is perceived power inequality due to economic wealth which results from the capitalist system in the society. In this, conflict between employees and their employer is therefore inevitable. Trade union therefore has to intervene in order to respond to exploitation of workers through capital. Impact on employees and employers According to Stone (2005) industrial relations have a major impact on the performance of employees and employers. There has to be a new direction of the development of the concept of power as applied in employees’ relations. To solve the problem of power imbalance, the imperfections in product and labour markets should be reduced. These include barriers to entry into the labour market, restrictions on worker mobility, rigidity in wage fixing and finally the information asymmetry. Management should ensure that these factors are effectively managed as they affect the balance of power between employees and employers. Workers should be involved in decision making process to reduce information asymmetry. Management should also set a flexible wage rate system which should be according to the economic status of the state. Modernisation of organisations’ activities and systems has also increased crisis in the industrial relation. Though it is important to introduce employees’ rights which prohibit employers from exploiting them on the other hand expansion of these rights for example of individual workers has met various concerns. Various studies have shown that the employees’ rights may be misused in that they increase their bargaining power in the labour market. Once the employees’ power is increased, they might even harass their employers to provide them with conditions that would affect the organisational output (Dubin 1998). Role of HRM in solving industrial relations issue As a result of the environmental analysis, human resource managers have to determine the strategies needed in achieving the desired goals. The strategies set are used in addressing various issues such as development of talent pool, improving work environment or skills development. Monitoring, evaluating and reporting processes should also be used to solve industrial relations issues for example by assessing the performance outcomes of employees. HR should also understand talent management process and the various issues arising from attraction of employee skills and the importance of retaining these skills. This solves both short term issues and long term management issues. Industrial relations issues are also solved through diversity management between employees and employers. Schmidt and Hunter (1998) shows that diversity describes gender, ethnic back ground and race that every member in a group comprise. Some of the initiatives that promote employee diversity include; choosing minority groups and selecting individuals with high potentials that can be developed to a useful leader. Some of the issues and procedures monitored by the HRM include workforce planning issues, progression planning and staff skills plans. Other issues affecting workplace environment that are managed by the HRM include increase in motivation and fair treatment issues. Good working conditions for all workers should be provided. The remuneration system should be fair to all as well as the grading system. A performance management framework should be set up in order to ensure that employees work according to the purpose of the organisation (Smith and McKinlay 2009). Conclusion Human resource planning is valued in Woolworth Company as it develops industrial relations through critical evaluation and analysis. This is also important in developing effective leaders capable of leading the rest of the team members to achieve objectives of the organisation. HRMs develop these skills through analysis of competencies and balancing issues involving their work and their life. They also check whether there has been a shortage in specific occupational group for example during recruitment. The remuneration system should be fair to all as well as the grading system. Other trends that improve the industrial relations include improved technology, return on investment, globalisation advances and improved critical thinking. References Abowd, M & Kramarz, F 2003, The costs of hiring and separations, Labour economics, vol. 10, no. 5, pp. 499–530, viewed 15 June March 2011 Creighton, B & Stewart, A 2000, Labour law, An introduction, 3rd ed, Leichhardt, NSW, The Federation Press. Dubin, R 1998, The world of work, Industrial society and human relations, Prentice Hall, Englewood Cliff, p. 213. Friedman, S & Wood, S 2002, Employers’ unfair advantage in the United States of America, British Journal of Industrial Relations, vol. 40, no. 1, p. 113, viewed 15 June 2011 < http: // papers.ssrn.com> Kotler, P, Brown, L, Adam, S, Burton, S, Armstrong, G 2006, Marketing management, 7th ed., Pearson Prentice-Hall. Lee, E 1996, Globalization and employment, International Labour Review, vol. 135, no.5, pp. 45–98. Rosemary, R 2009, Woolies’ strategy a winner, Business Report, Australia. Schmidt, F & Hunter, J 1998, The validity and utility of selection methods in personnel psychology, Practice and theoretical implications of research findings, vol. 124, pp. 262-274. Smith, C & McKinlay, A 2009, Creative industries and labour process analysis, London: Palgrave. Stone, R 2005, Human resource management, 5th ed., John Wiley and Sons, Australia, p. 412-41. Woolworths limited 2009, Stakeholder engagement, Corporate responsibility report, viewed 15 June 2011, < http://woolworthscrr09.reportonline.com.au/stakeholder_engagement.php> Read More