How mature are your HR practices?

Questions are often asked about the value of HR to an organisation and the level of influence that the HR function has on overall business direction and decision-making.

More recently, with the disclosures of corporate malpractice and unethical executive conduct in the finance industry in particular, there are significant questions about the culture of the organisations concerned and, by extension, as the culture custodians, where were HR in all of this.

The truth is that HR can look very different in different organisations and is more often than not reflective in style of the mindset of senior management. Is the focus compliance or is it about real employee engagement? Is it about risk management and enforcement or is it about leadership and values-based behaviour? Or is it just a processing function administering operational procedures and conflict transactions?

Where does HR sit on the scale of maturity in your organisation?

Back in 2005,we developed a maturity model based on our experience in dealing with hundreds of organisations and this 4C model is a core part of our consulting and coaching offerings. While in our consulting, we focus on “People and Culture”, you can apply the methodology to any business function.

Here is what it looks like:

C1 = Commitment: this is the ground floor, the point at which an organisation makes a specific commitment through a vision statement or a values statement or a set of goals in a business plan or a policy statement or a contract which sets out an obligation that the business commits to.

C2 = Capability: this involves the organisation investing in the resources needed to give life to the commitment including the right people, processes, tools and equipment.

C3 = Competency: here the organisation has invested in the learning and support that people need to effectively play their part in utilising the resources and they are delivering good outcomes in the area of the commitment.

C4 = Culture: where the commitment has been fully embedded in everyday activity in practice, people believe it and they are consistently delivering high performance outcomes.

A lot of the organisations that we have worked with in our compliance activities are at C1 to C2 level and a significant number are quite limited in the breadth or range of commitments that they have made in real terms. Managing people is an ongoing challenge for these businesses.

Then there are the others who aspire to be employers of choice and really get the connection between employee engagement and wellbeing and high performance. With the right leadership, a positive mindset and values driven behaviours, those aspirations can be realised. Our 4C framework provides a simple and effective roadmap for getting there.

If you look at the people and culture practices in your organisation, where do you sit on the 4C scale?

6 tips on effective communication

Why is it that, whenever you conduct an employee survey or business diagnostic, communication comes up as one of the key areas for improvement?

In part, it is because we are human and we each deliver and receive and interpret information in our own individual way.

In part, it can be because, as business owners and managers, we are technically competent in what our businesses do but we are not necessarily trained or skilled in communication techniques.

In part, it is also because, in any business, the timely and accurate flow of the right information to the right people is critical for getting work done efficiently and optimising job satisfaction for the people involved.

In part, it can be because we don’t think through the actions that we are taking or changes that we are implementing by consciously considering who is affected and needs to be communicated with.

And, in part, it can be because in the everyday hurly burly of running a business, we can forget to communicate or have trouble listening to others who have something to say that is significant for them.

So what can you do to improve communications in your business?

  1. Project positivity from the top.
  • Be honest and transparent
  • Be clear about the purpose
  • Set good practice standards in policies (not just consequences for breaches)
  • Ensure that all of your managers/leaders believe the message and “sing from the same hymn book”
  • Be timely
  • Be responsive
  • Celebrate successes
  1. Define the audience on 3 levels

Tailor your message to people to take account of:

  • Whole of business communications (what everyone needs to know)
  • What particular teams might need to know about the impact for them and
  • What individuals need to know about the impact for them

Consider other stakeholders as well eg customers, suppliers, contractors, etc and what you need to tell them if they are (potentially) affected in some way

  1. Build it into project management
  • Identify stakeholders in each project up front
  • Identify key points and messages to be given in the project
  • Build these communications into the project plan
  • Make sure it happens
  • Review the effectiveness of communications as part of the review process on project completion.
  • Learn from that and continuously improve
  1. Validate understanding

This is about ensuring that the people concerned “get the message” and know what it means for them. It is really just a question of asking them what it means for them, ensuring they understand and observing what is happening in practice

  1. Give your people genuine voice

This is probably the improvement opportunity that comes up most often in employee surveys and there are lots of options such as:

  • Set up a staff consultative committee or representative workplace improvement team
  • Do regular employee surveys to get people’s views and spot check progress
  • Have a publicly committed to improvement plan for people and culture
  • Ensure that you have trusted and effective grievance and suggestions processes in place
  • Give people regular and balanced feedback about how they are going
  1. Make sure you have the capability

Continuously work on your communication processes and skills as a core business competency that impacts critically on all aspects of running a business.

If you don’t have the strengths internally, look externally to get help in communications design, positive policy writing and coaching for people in your business who play key roles in communications.

The spin offs are higher efficiency, happier people and a more profitable business.

Ridgeline HR offers a variety of coaching, consulting and contracting services to assist businesses with consultation and communication requirements and enquiries can be directed to Peter Maguire on 0438 533 311 or email pmaguire@ridgelinehr.com.au.  

 

FWO audit finds over 40% of employers not compliant

The Fair Work Ombudsman has just released its latest audit report on campaigns run in the Dandenong and Warrnambool – Otway Ranges regions.

In the Dandenong campaign, 253 businesses in Dandenong, Dandenong South, Keysborough, Noble Park and Springvale were audited with the following findings:

  • 42% were not compliant on some count
  • 26% were not paying their employees correctly
  • 23% were not compliant with payslip and record keeping requirements
  • $428,676 in underpaid wages was recovered for 185 employees from 46 businesses

In the Warrnambool – Otway Ranges campaign, 251 businesses in Camperdown, Colac and Warrnambool were audited with findings of:

  • 41% were not compliant on some count
  • 28% were not paying their employees correctly
  • 21% were not compliant with payslip and record keeping requirements
  • $195,656 in underpaid wages was recovered for 200 employees from 48 businesses.

Across the two campaigns, the Fair Work Ombudsman issued 56 notices of various sorts including 15 infringement notices which can involve on-the-spot fines of up to $6,300 per offence.

Businesses that commit serious offences can be up for prosecution and penalties of up to $630,000 per offence for a corporation and $126,000 per offence for an individual.

If you haven’t verified that your business is compliant with Fair Work requirements, you should get professional advice from a competent workplace relations advisor.

That is something that we can help you with.

Ridgeline HR’s Peter Maguire is visiting Warrnambool on 18 – 19 April 2018 to present a briefing to local members of the Civil Contractors Federation on Fair Work and other compliance requirements for employers. He can be contacted on 0438 533 311 by any employer in the area looking for assistance of this sort.

Is an enterprise agreement right for your business?

It is now over 25 years since enterprise bargaining became an option in the Australian industrial relations system, first introduced via the Prices and Incomes Accord between first the Hawke and then the Keating Governments and the ACTU.

Unfortunately, over the years, unions and employers with unionised workplaces have dominated the enterprise bargaining space and there are few examples of genuine change delivering benefits for both employers and their people. They have really been just about negotiation of over award pay and conditions.

That is why many corporates are stepping away from enterprise agreements now – they don’t see them as offering productivity and flexibility benefits, notwithstanding the fact that they don’t see modern awards as positive alternatives either.

So why would any employer want to have an enterprise agreement today?

Ridgeline HR Practice Leader, Peter Maguire, who has been involved in enterprise bargaining since the early 1990s, offers some options for you to consider:

  1. “The first enterprise agreement that I negotiated was nominally about pay and conditions but what it was really about for me was enshrining a requirement that any matter requiring a vote by employees had to be by secret ballot. Why? Because the women who made up most of the workforce were intimidated by a small group of males backed by male hierarchy in the union and the blokes would hold sway if the vote was just by a show of hands. The union said the agreement wouldn’t get up – the secret ballot delivered an 87% approval by employees. We gave the women their voice and they backed us and that was a significant cultural change for them and the business.”
  2. “25 years ago, I participated in the process that developed the so called skills based classification structures that grace our modern awards today. The reality is that those structures were primarily the product of  industrial relations negotiations so they were mostly flawed from the outset. The world of work has also changed dramatically since then and it should be no surprise that they are not a great fit with the skill sets and talent hierarchies that exist in lots of businesses today. So, if your business is paying your people significantly above award, why wouldn’t you put in place the classification and pay structure that makes sense for your business and your people in today’s world.”
  3. “There are some award provisions that are just wrong. For example, the Building and Construction General On-site Award has an Industry Specific Redundancy Provision that gives employees who leave after their first year ‘other than for reasons of misconduct or refusal of duty’ a redundancy payment of up to 8 weeks’ pay. In the civil construction industry that means that a Plant Operator or Labourer or Traffic Controller would receive that benefit if they resign or are sacked on other grounds eg performance grounds. Other staff in civil construction such as engineers, administrative people, truck drivers etc don’t get those benefits. That is just not right or fair and can be addressed by including the National Employment Standard on redundancy for all employees regardless of business size and employee occupation.”
  4.  “The pay structures in some awards are extremely complex with a combination of base rates, allowances, penalty rates and loadings and, in some cases, specific clauses on annualisation of salaries all of which can be hard for small business owners to get their heads around. An enterprise agreement can help to make that all a lot simpler by redefining how all of that works in simple and easily understood terms and in the context of normal business operations. For example, you might typically work a 40  hour or 45 hour or 50 hour week and would like to be able to just pay a flat rate or an annual salary for doing that. That can be done in an enterprise agreement by striking flat rates that factor in all of monetary award rates, loadings and allowances with a caveat that, if you go outside the prescribed arrangement, there are extras that come into play and they are defined in the agreement as the exception rather than the rule. This ensures that your people are still better off overall and you know just what you need to do to safeguard that outcome and stay compliant.” 
  5. “Principals in supply chains and head contractors on major projects like to be assured that they will not be subject to operational disruptions caused by protected industrial action. That assurance can come from the delivery partners or sub-contractors having their own current enterprise agreements and this provides a resultant advantage when your business is bidding competitively for work.”
  6. “Enterprise agreements sit in the public domain on the Fair Work Commission’s website and so serve as both a demonstration of your business’s compliance with workplace laws and your value proposition as an employer. This sends positive messages to both the labour market and the regulator. ” 

So perhaps there are some benefits to having an enterprise agreement after all.

If you would like to explore the opportunities that enterprise agreements offer, give us a call.

 

Lessons from the 2017 Corporate Health and Wellbeing Summit

I recently attended the Corporate Health and Wellbeing Summit in Sydney and thought that I would share some of the key learnings from what were a great set of presentations.

I have selected three – one from a regulator’s perspective, one from a manager’s perspective and one from a consulting psychologist.

Lucinda Brogden, Commissioner,

National Mental Health Commission

 Lucy presented some startling statistics on mental health and its impact on productivity such as:

  • About 1 million Australians live with depression and about 2 million live with anxiety
  • 8 Australians (of whom 5 are men) die of suicide every day
  • Mental health conditions cost Australian businesses $10.9 billion per year
    • Compensation claims: $145.9 million
    • Absenteeism: $4.7 billion
    • Presenteeism: $6.1 billion

She recommended 6 ways in which businesses can improve mental health in the workplace:

  1. Smarter work design
  2. Promoting and facilitating early help seeking and early intervention
  3. Building a positive and safe work culture
  4. Enhancing personal and organisational resilience
  5. Supporting recovery
  6. Increasing awareness of mental illness and reducing stigma.

Stephen Scheeler, Former CEO, Facebook ANZ

Stephen spoke about the challenges he had joining the organisation in his 40s when the average age of Facebook employees is 26. He said he had been there about a week when the HR Manager gave him some feedback “You need to smile more, don’t look so serious”.

He also spoke about the importance of being positive in line with the values of the organisation which was going through massive change e.g.:

  • Revenue of $1.58b in 2012 to $27.6b in 2016
  • Facebook users from 0.9b in 2012 to 2.0b in 2016

Steve cited this comment by Facebook Chief Operating Officer, Sheryl Sandberg as a real indicator of their attitude to their people:

“Bring your whole self to work. I don’t believe we have a professional self Monday through Friday and a real self the rest of the time. It is all professional and it is all personal.” 

Dr Aaron Jarden, Psychologist, South Australian Health and Medical Research Institute

 Aaron described his goals as follows:

“Within an organisational setting, it’s to enable organisations to invest in creating more rewarding, happier jobs for their people. To create positive workplaces where people are able to do meaningful and enjoyable work that taps into their greatest strengths and their most important goals. To capitalise on the unique intellectual and personal strengths of each employee by focusing less on getting employees to do their work and fixing problems and more into promoting excellence by enabling them to do good work; their best work.

He advocates that one size does not fit all and workplaces should be looking to utilise peoples’ strengths to optimise engagement, job satisfaction and productivity.

Aaron introduced the audience to a free strengths survey tool (VIA Survey of Character Strengths which can be accessed at http://www.viacharacter.org/www/Character-Strengths-Survey) as a way for people to identify their key strengths.

I recently participated in an exercise using this survey tool in a committee of volunteers and found it to be very useful in identifying my key strengths, comparing mine to those of others on the Committee and looking at how we can best deploy each others’ key strengths to get optimal results.

Aaron emphasised that positive leadership is crucial – “Leadership involvement was cited as the most effective factor for a successful wellbeing program by 59 percent of employer respondents. (State of Workplace Wellbeing Survey).”

In 2018, Ridgeline HR will be launching a Better Workplaces Project which will utilize positive psychology principles and a strengths-based approach to achieving improvements in employee wellbeing, engagement and productivity.

Contact Peter Maguire on 0438 533 311 or email pmaguire@ridgelinehr.com.au if you would like more information.

Changing gears for a winning culture

There is plenty of research out there that tells us that the 1900’s command and control approach to management just doesn’t work in the modern world where change is constant and people want answers and results now.

If we are going to get true employee engagement and high performance with today’s and future generations, we need to fundamentally change the management model to one based on leadership and values-based behaviours that deliver trust and inspiration rather than just process control and risk management which really only deliver compliance. This is what study after study tells us.

It means business leaders need to change gears and in doing so reimagine their business culture and language from:

  • human resources to human beings
  • risk control to trust
  • process control to relationship optimisation
  • management to leadership
  • tasks to behaviours
  • outputs to outcomes
  • compliance to engagement
  • command to inspiration
  • structure to flexibility
  • reactive to resilient

It is a big adjustment and it is easy to fall back into the traditional management norm that has been drummed into us for all those years.

That is why it is so important to have a clear vision about where you are going and clear values and behaviours that say how you are going to go about doing that and then holding everyone accountable for modelling those every day, most importantly yourself.

Be prepared to challenge and be challenged, listen to what your people have to say and learn from that. It is amazing what a difference it can make to performance, engagement, innovation and wellbeing.

Ready to change gears?

 

What might the new casual conversion provisions mean for business?

As part of the 4 yearly review of modern awards, the Fair Work Commission has decided to insert casual conversion provisions into the 85 modern awards that currently do not have provisions of this sort.

These provide a right for casual employees engaged on a regular and systematic basis to apply for conversion to full-time or part-time employment subject to a number of conditions as follows:

  • a qualifying period of 12 calendar months;
  • a qualifying criterion that the casual employee has over the qualifying period worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time employment provisions of the relevant award;
  • the employer must provide all casual employees (whether they become eligible for conversion or not) with a copy of the casual conversion clause within the first 12 months after their initial engagement; and
  • a conversion may be refused on the grounds that:
    • it would require a significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment in accordance with the terms of the applicable modern
      award, or
    • it is known or reasonably foreseeable that the casual employee’s position will cease to exist, or
    • the employee’s hours of work will significantly change or be reduced within the next 12 months, or
    • on other reasonable grounds based on facts which are known or reasonably foreseeable.

Please note that, at this point in time, awards have not been varied and the decision is therefore not operational.

Where this decision differs from  casual conversion provisions that are already in other modern awards is that:

  • the qualifying period is commonly 6 months rather than the 12 month period stated in the new decision
  • the relevant awards have a statement that an employer “must not unreasonably refuse” a request for conversion but there is no reference to the sorts of circumstances that might reasonably justify refusal (as set out in the new decision)
  • there are some variances in procedural requirements between the old and the new
  • existing casual conversion provisions continue to have force.

So what does it all mean?

Regardless of the industry you are in, every employer who has casual employees working regular and systematic hours over a prolonged period of time should review those arrangements and consider whether the past/existing working pattern and foreseeable future working pattern would justify conversion to full-time or part-time employment.

There is also a concern that, while an employee in a small business (less than 15 employees) is not eligible to make a claim of unfair dismissal until they have completed 12 months service (or 6 months in the case of larger businesses), there could be a spike in General Protection/Adverse Action claims where an employee exercises or intends to exercise their right to request casual conversion and perceives that they are disadvantaged because of that request or intention (eg in reduction of hours, variation of shifts to interrupt a regular working pattern or even discontinuation of employment). There is no qualifying period for these types of claims so employers beware.

The final point that we wish to make here is that security of employment is a significant issue in our community today and that is a key factor in attracting and retaining good people who’ll do a good job for you. If you want a great business, trust them and give them that security.

Fair Work changes from 1 July 2017

There are a number of changes that have come into being from 1 July 2017 as a result of the 2016-2017 Annual Wage Review which increased the National Minimum Wage and award rates by 3.3% and other decisions made by the Fair Work Commission.

The Fair Work Ombudsman has produced an up to date set of Pay Guides for all modern awards which can be accessed here.

These guides have also factored in the first phase of reductions in penalty rates that have occurred in a number of retail and hospitality industry awards but please note that unions have appealed that decision and these proceedings commenced in the Federal Court this week.

Additionally, the following flow on increases have occurred.

The High Income Threshold

The new High Income Threshold is $142,000 per annum.

Employees who accept an employer guarantee of annual earnings of greater than this amount do not have access to the unfair dismissal jurisdiction.

This also raises the maximum compensation that can be awarded in an unfair dismissal case to $71,000 (6 months’ wages).

Fair Work Information Statement

Under National Employment Standards, all new employees must be provided with a Fair Work Information Statement which explains a range of workplace rights and where to go for assistance with those.

This has been updated and the new version that must be provided to new employees from 1 July 2017 can be accessed below.

Fair-Work-Information-Statement – 010717

Penalties for Fair Work Breaches

The maximum penalties for breaches of the Fair Work Act 2009 and modern awards have been increased to:

  • For corporate entities, $63,000 per offence
  • For individuals, $12,600 per offence

It should be noted that, in legislation currently before the Parliament (which is now in recess), these penalties are targeted to increase tenfold.

 

Ridgeline HR educating young people on workplace rights

This morning, we ran the first of our “Your Workplace Rights” briefings for secondary students and first up were Year 10 students at Melba College about to go out on work experience.

The briefing covered pay and conditions, National Employment Standards, Modern Awards and Enterprise Agreements and the roles of the Fair Work Commission and the Fair Work Ombudsman. The presentation included links to online information resources, tools and calculators that anyone can use to be better informed about their rights, entitlements and obligations.

This pro bono service has been launched for all Maroondah secondary schools as part of our contribution to improving community wellbeing in the City of Maroondah.

Penalty rates decision to be phased in

The Fair Work Commission has announced transitional arrangements for implementing the recent decisions to reduce penalty rates for work on Sundays and Public Holidays across a variety of awards.

Sunday penalty rates

The reductions in Sunday penalty rates are being phased in in annual instalments over 3 to 4 years depending on the award and are timed to occur on 1 July at the same time as any increases in award wages occurring from the Annual Wage Review process. The schedule for each award is as follows.

Fast Food Industry Award 2010

Full-time and part-time employees – Level 1 only

1 July 2017: 150 per cent > 145 per cent

1 July 2018: 145 per cent >135 per cent

1 July 2019: 135 per cent >125 per cent

Casual employees (inclusive of casual loading) – Level 1 only

1 July 2017: 175 per cent > 170 per cent

1 July 2018: 170 per cent > 160 per cent

1 July 2019: 160 per cent > 150 per cent

Hospitality Industry (General) Award 2010

Full-time and part-time employees

1 July 2017: 175 per cent > 170 per cent

1 July 2018: 170 per cent > 160 per cent

1 July 2019: 160 per cent > 150 per cent

Casual employees – unchanged at 175% including casual loading

General Retail Industry Award 2010

Full-time and part-time employees

1 July 2017: 200 per cent > 195 per cent

1 July 2018: 195 per cent > 180 per cent

1 July 2019: 180 per cent > 165 per cent

1 July 2020: 165 per cent > 150 per cent

Casual employees (inclusive of casual loading)

1 July 2017: 200 per cent > 195 per cent

1 July 2018: 195 per cent > 185 per cent

1 July 2019: 185 per cent > 175 per cent

Pharmacy Industry Award 2010

Full-time and part-time employees

1 July 2017: 200 per cent > 195 per cent

1 July 2018: 195 per cent > 180 per cent

1 July 2019: 180 per cent > 165 per cent

1 July 2020: 165 per cent > 150 per cent

Casual employees (inclusive of casual loading)

1 July 2017: 225 per cent > 220 per cent

1 July 2018: 220 per cent > 205 per cent

1 July 2019: 205 per cent > 190 per cent

1 July 2020: 190 per cent > 175 per cent

Public Holiday penalty rates

This decision effects the above 4 awards plus the Restaurant Industry Award 2010.

In all of these awards , the penalty rate for work on a public holiday is changed with effected from 1 July 2017 to

Full-time/part-time:  225%

Casual:  250%

One of the reasons given for phasing in the Sunday penalty rate cuts over such a prolonged period was that “take home pay” orders would not be an available option for workers whose take home pay was reduced as a result of implementation of this decision. The FWC’s rationale is that annual wage increases will significantly, if not totally, offset reductions in penalty rates.

This is likely to be a factor in future Annual Wage Reviews.

It is understood that some unions may seek judicial review of the penalty rates decision and, should that occur, it is possible that implementation could be further delayed.