Risk Management in a Workplace Environment - Heartbreak Hotel - Assignment Example

Heading: Risk Management Your name: Course name: Professors’ name: Date Executive Summary This report presents an in-depth discussion of risk management in a workplace environment with reference to Heartbreak hotel case study. The purpose of this document is to elaborate on the challenges that heartbreak employees face with regard to their daily job. It also provides the risks that these employees face such as workload, strains and heavy lifting, workplace safety, ignoring problems and health stress among others. ALARP principle and hierarchy of controls theory provides a fundamental guideline for the risk mitigation process that Heartbreak management should initiate to a reasonable extent. Scope of the paper is limited to analysis of the risk that the employees face and the possible solutions of the risk that these employees face. Legal issues related to employees is also discussed, the rationale for this is because human resource department is responsible for handling of the company’s employees who have legal attachment. These employees have the legal right of suing the company if the company violates its regulations. More so, the company could also dip into financial crisis if the performance of employees is compromised. Other areas of the company that are covered with respect to potential risk include marketing, finance and administration. In marketing, the greatest risk is loss or reputation. Social media can be strategic tool for disseminating negative information about the company. This is detrimental for the company’s image and reputation. In finance, the main risk is financial risk, this is basically because of the potential cost that employees will be paid for mistreatment, assault and workman compensation among others. The company can prevent this by observing employees related laws and acting more professionally. The risk associated with administration is inadequate employee’s knowledge as a result of poor training as well as limited produce and service knowledge. In order to deal with risk identification and mitigation, scenarios have been proposed. These five scenarios are; employee change of attitude, customer complains, increased sick off periods, high employee turnover and payment complains. All these scenarios are based on possible real life scenarios which can occur. The rationale for their choice is based on possible occurrence in Heartbreak hotel. It is recommended that Heartbreak hotel considers employees issues seriously in order to remain relevant in business. Considering that employees are the most important organizational assets, poor management can lead to poor performance and hence leading to enterprise failure. Heartbreak thus needs to address the risks it faces as an organization using ALARP principle meaning that the risks need to be as low as reasonably possible. Table of Contents Executive Summary 1 Introduction 4 Question 1 4 Risks Identified and their probabilities and Impacts 4 Too scared to claim 6 How management of risks can be complex 7 Question 2 7 Importance of Human side of Risk Management 7 Question3 8 Marketing: 8 Finance: 8 Administration: 8 Question 4 8 Question 5 9 Possible high impact risks 9 Prevention and Contingency 9 Recommendation and Implementation 10 Conclusion 10 Appendix 13 Introduction Organizations mainly fail because of inadequate consideration of employees issues. The overall risks that an organization faces increases if there are considerably many risks facing its employees. The human resource of an organisation is the greatest asset that it has; this is fundamentally because it contributes to the central functions of the company, without this vital asset, the company cannot simply operate. The major area of discretion in this work is about the risks surrounding the employee work environment. This study does risk management analysis by making use of the risk indicators such as the patterns of leave attendance, the incidents of sicknesses and injuries, employee satisfaction index and the salary payment. By using the Heartbreak Hotel, it also does practical rating of impact and probability of the risks. It then provides contingency plan appropriate for the risk management and scenario analysis results. More so, the effects of these risks to the organization are also discussed in order to give better recommendations. Question 1 Risks Identified and their probabilities and Impacts The conditions of work at the Heartbreak Hotel indicate that there are dangers associated with the welfare of the employees. The impacts of the risks can be rated in measurable scales of probability and the effect attached to the life welfare and production levels of employees (Roberts, 2011, p139). The risks have been identified as follows: Heavy lifting and strains Workload Workplace safety comes last Ignoring problems, silencing victims Too scared to claim Health risks of stress In assigning the measures for impact and probability, we set a scale of 1 to 5 where 1 in the probability scale means the incident is less likely to occur and 5 means the incident is most likely going to occur. In the impact scale, 1 means if the incident occurs, the impact will be extremely negligible and 5 means the impact will be great when the incident occurs. The high impact represents either loss of life or high amounts of financial losses (Hillson & Murray- Webster 2007, p.4). We can then assign ratings to the risks that have been identified as: Risk Probability Impact Heavy lifting and strains 3 2 Workload 4 5 Workplace safety comes last 4 5 Ignoring problems, silencing victims 3 4 Too scared to claim 4 4 Health risks of stress 5 5 Workload The main risk here is physical strain, the load of work that the employees handle is massive. They cannot easily cope with the situation considering the impact it has on their health. The work that these attendants do overwhelms them and hence making them more vulnerable to physical strain due to exhaustion. The work generally involves handling heavy things like linen and bucket full of cleaning water. ALARP principle and hierarchy of controls theory elaborates on the need to only allowing reasonable manual job which has no potential harm. Heavy lifting and strains The main risk in this case is physical injuries. The length of time in which the employees work exerts a lot of pressure on them. They constantly have to lift loads, which imparts a lot of straining impact in their lives. The welfare of these employees is at stake. They hold heavy equipment such as trolleys and buckets and spend a lot of energy, leaving them fatigued. At the end of the working exercise, employees suffer from back aches, headaches and painful limbs. Room attendants constantly have to bend while doing the floor mopping and washing curtains and carpets. According to ALARP principle and hierarchy of controls theory, such strenuous physical jobs should be reduced in order to reduce the risk of injuries(Hurd & Barcelona 2008, p.73). . Workplace safety comes last The main risk in this situation is accidents; this is basically because of the poor equipments used in the hotel. The attendants use unsatisfactory equipments, when this is coupled with the heavy workload and pressure from the management; the employees face an even tougher task that could easily lead to mistakes and hence increasing possibility of accidents. As evident from the emerging Melbourne Hotels, basic health and safety seem to have been disregarded; this situation has thus affected most Hotels in the region (Hurd & Barcelona 2008, p.72). ALARP principle requires employees to ensure as low risk of injuries as possible in the working environment. Ignoring problems, silencing victims The main risk in this case is life threatening health issues. Employees battle with OHS issues, the management and the immediate bosses actually neglect and bully employees to an extent of ridiculing them over their health status. The management also issue false report to medical panel about the time spent by employees working. This is a major concern because the medical panel do not get the correct information from the management. In one notable situation, an attendant is noted to be having a history of heart attack, with increased stress, this could be dangerous and could possibly lead to death. As opposed to the ALARP principle, the management clearly does not care about this and even make a joke out of the circumstance and deny the employee sick leave. This is a clear indication of a possible detrimental health risk in the Hotel (Clarke & Cooper 2004, p.13). Too scared to claim The main risk in this situation is failure to make a WorkCover claim, this is because employees are too scared to make the request, they fear for their jobs and hence preferring to remain silent about the issues that they face. As noted, most of the attendants do came to work despite their health status, others who suffered injuries fear to make claims. This is a major risk and also a major concern to the health status of the employees working in hotels. WorkCover is basically meant for employees who get injured in the course of their duty, failure to make these claims means that the employee is forced to use their savings for treating themselves and hence affecting them psychologically and financially. ALARP principle and hierarchy of controls theory requires that employer minimize risk at work environment and provide employees necessary claims. Health risks of stress The main risk at this stage is stress. Stress is caused by lack of job satisfaction and oppressive job environment coupled with workloads. A number of studies relate work stress with health issues (Scott, 2010). 73 percent of the respondents admitted to being stressed due to the amount of workload, this figure could be bigger in other Melbourne hotels; this is a major concern considering that stress is related to excessive workload. Some of the attendants admitted to be having poor appetite because of being overworked. This could be as a result of stress caused by excessive work. It is also known that stress decreases bodily immunity. ALARP principle and hierarchy of controls theory provides that employers ought to provide a conducive working environment in order to improve working conditions and stress. How management of risks can be complex The issue of risk management can be very complicated especially where the company does not intend to comply with the safety rules and welfare of the employees. It also becomes difficult when the management does not want to acknowledge the reality that risks are inevitable in every organization. The only way to simplify risk management process is by applying preventive measures because corrective measures can be very expensive to apply (Code of Practise 2011, p.14). Question 2 Importance of Human side of Risk Management Human aspect of risk management is very essential in the sense that the issue of human resource has a legal attachment including industrial actions. The legality that surrounds the binding contracts leads to serious consequences in the events of breaches. Secondly, human aspect of risk management has an attachment to the reputation and the goodwill of the organization (Demaria 2010, p.18). The performance of the hotel for example entirely depends on the efforts of employees at work. If the management of human resources is faulty, it will reflect on the overall performance of the company in contrast to the core objective and strategic plan. Failure to maintain a proper standard of human aspect of risk management leads to the emergence of various incidents in other areas, because human beings then become potential perpetrators of incidents such as theft, fights, riots and wanton destruction of resources. Question3 Marketing: The risk associated to marketing avenues is the loss of reputation. While social media is a vital advertisement tool, it has another side of it which is very dangerous to the existence of a company. Clients and consumers are usually swift in sharing their sentiments on the social media because of the freedom of expression that it offers, and the level of confidentiality. This is a risk for a company like the Heartbreak hotel because its employees can easily share the information on the social media and give the hotel a negative branding (Hillson & Murray- Webste 2007, p.7). Finance: Whenever a company breaches the service level agreement that it signed with its employees, it then begins to operate at a legal risk. This can be so costly because the employees have to be paid for the defamation, mistreatment, harassment and assault, workman compensation and career development issues. The company therefore has to observe the terms of contracts and avoid disobeying them. One way to eradicate financial risks is by prevention, especially by acting professionally towards the welfare of the employees (Carroll 2011, p.8). Administration: The risk in this case is employee’s inadequate knowledge. If a company employs staff without adequate knowledge, it requires holding several Training sessions to equip the employees with proper product and service knowledge. Operating with ignorant employees places a company at a risk of poor performance, lack of professionalism and destruction of the company image. Training the employees can be as costly considering that it as to be an indefinitely continuous process. As the company diversifies, it opens new needs for training (Erven 2012). Question 4 Scenarios are very important because they help identify a possible risk based and provide solutions to the risk. The five likely scenarios of predicting and avoiding risk are as follows. i. Employees change of attitude- this scenario could be as a result of less job satisfaction as a result of excessive workload and stress. Once this is noticed the employer needs to address it immediately. ii. Customer complains- This scenario could be as a result of attendant’s attitude, the employer needs to investigate the reason for this and possibly formulate better ways of motivating employees. iii. Increased sick off- This scenario could be as a result of poor equipments and excessive work leading to injury. The employer needs to use ALARP principle and reduce possible risk occurrences by creating better environment. iv. High employee turnover-this scenario could be as a result of poor job environment and wage. The employer needs to address this as the human resource of a company is the most important asset to the company. v. Payment complains- This scenario could be as a result of poor matching of workload and payments. The employer needs to match payments with work (Code of Practise 2011, p.14). Question 5 Possible high impact risks In the Heartbreak Hotel, the most possible high impact risks are related to the human resource welfare. This in turn relates closely to reputation and strategic factors of the Hotel. It exposes the Hotel to legal challenges that may be so costly and detrimental to its future image and position in the market. Considering the presence of social network, the hotel exposes itself to the greatest risk of losing its image that it has spent many years to build. Prevention and Contingency There is need for prevention of the possibility of occurrence of the risks in the Hotel. Since the risks are related to the employees, the impacts are definitely huge and can contribute to the downfall of the entire enterprise. The hotel needs to recognize the rights of every employee to receive what is rightfully theirs. The next very vital action is to observe the terms of reference and avoid breaching and intimidation. The Heartbeat Hotel has to realise that a company without reputation risks extinction from the market (Hutter & Power 2005, p.132). While it is not possible to eliminate all risks facing an organization, it is true that a company can effectively minimize the exposure to the risks. There is a certain amount of risk within which a company can comfortably exist. The cost of prevention is usually less than the cost of correcting already spoilt situations. The aim of the Hotel should be to minimize cost by avoiding preventable avenues of spending. Recommendation and Implementation There is need for prevention of the possibility of occurrence of the risks in the Hotel. Since the risks are related to the employees, the impacts are definitely huge and can contribute to the downfall of the entire enterprise (Erven 2012). The hotel needs to recognize the rights of every employee to receive what is rightfully theirs. The next very vital action is to observe the terms of reference and avoid breaching and intimidation. The Heartbeat Hotel has to realise that a company without reputation risks extinction from the market. While it is not possible to eliminate all risks facing an organization, it is true that a company can effectively minimize the exposure to the risks. There is a certain amount of risk within which a company can comfortably exist. The cost of prevention is usually less than the cost of correcting already spoilt situations. The aim of the Hotel should be to minimize cost by avoiding preventable avenues of spending. Conclusion In the Heartbreak Hotel, the most possible high impact risks are related to the human resource welfare. This in turn relates closely to reputation and strategic factors of the Hotel. It exposes the Hotel to legal challenges that may be so costly and detrimental to its future image and position in the market. Considering the presence of social network, the hotel exposes itself to the greatest risk of losing its image that it has spent many years to build. References Carroll, R 2011,Risk Management Handbook for Health Care Organizations, 3 Volume Set, John Wiley & Sons, Michigan. PP. 7-8. Accessed from http://books.google.co.ke/books?id=oXxfuGuVpWMC&pg=PT130&dq=risk+related+to+employees&hl=en&sa=X&ei=4dNKUcbsGsrEPIXqgJgL&ved=0CCIQ6AEwAA Clarke,S & Cooper, CL 2004, Managing the Risk of Workplace Stress: Health and Safety Hazards, Routledge, New York. PP.13-19 Accessed from http://books.google.co.ke/books?id=A9AoJWRhk8wC&printsec=frontcover&dq=Health+risks+of+stress+in+work&hl=en&sa=X&ei=idlKUYPXBc22PYLRgKgM&ved=0CCwQ6AEwAw#v=onepage&q=Health%20risks%20of%20stress%20in%20work&f=false Code of Practise 2011, How to manage work health and safety risks, How to manage work health and safety risks, How to manage work health and safety risks, p.2-27. Accessed from http://www.deir.qld.gov.au/workplace/resources/pdfs/manage-whs-risks-cop-2011.pdf Demaria, C 2010, The Human Side Of Risk Management, Swiss Business, May/June Accessed from http://www.360journal.com/CD/SWB_03_2010_018-019_Bank_Managment.pdf Erven, BL 2012, The Role of Human Resource Management in Risk Management, Accessed from http://www.extension.org/pages/15506/the-role-of-human-resource-management-in-risk-management Hillson,D & Murray- Webster, R 2007, Understanding and Managing Risk Attitude, Gower Publishing, Ltd., New York. PP. 4-10. Accessed from http://books.google.co.ke/books?id=VeMdki1LYEUC&printsec=frontcover&dq=How+management+of+risks+can+be+complex&hl=en&sa=X&ei=2tJKUZrvM8nuOt7ngfgD&ved=0CDQQ6AEwAg#v=onepage&q=How%20management%20of%20risks%20can%20be%20complex&f=false Hurd, AR & Barcelona, RJ 2008, Leisure Services Management, Human Kinetics 10%, London. PP. 72-75. Accessed from http://books.google.co.ke/books?id=liKTvdItAVoC&pg=PA73&dq=risk+identification+in+a+hotel&hl=en&sa=X&ei=zM5KUfDyH7TB7AbcjYDgBw&ved=0CCoQ6AEwAg#v=onepage&q=risk%20identification%20in%20a%20hotel&f=false Hutter,B & Power,M 2005, Organizational Encounters with Risk, Cambridge University Press, Sydney. Pp. P.132-136. Accessed from http://books.google.co.ke/books?id=wIfAU5exEPQC&printsec=frontcover&dq=How+management+of+risks+can+be+complex&hl=en&sa=X&ei=2tJKUZrvM8nuOt7ngfgD&ved=0CFEQ6AEwCA#v=onepage&q=How%20management%20of%20risks%20can%20be%20complex&f=false Roberts, P 2011, Effective Project Management: Identify and Manage Risks Plan and Budget Keep Projects Under Control, Kogan Page Publishers, London. P.139 Accessed from http://books.google.co.ke/books?id=7BDCtEj5syoC&printsec=frontcover&dq=how+to+manage+risks&hl=en&sa=X&ei=Td9KUdqZFIytPL3OgdgO&ved=0CE0Q6AEwCQ#v=onepage&q=how%20to%20manage%20risks&f=false Scott, EM, 2010, Chronic Job Stress is a Risk Factor for Heart Disease, Stress and Metabolic Syndrome October 11 2010 accessed from http://stress.about.com/od/stresshealth/a/jobstress.htm Appendix Probability: The likelihood that the risk incident will occur. Impact: The amount of loss that is expected out of the incident in the event that it occurs. Contingency: The methods used to mitigate the risks. Read More