At HRwisdom we encourage you to be proactive and seek the right information to successfully manage staff.

In today’s HRwisdom blog post, we draw your attention to an excellent industry update by HR expert Ron Jones.

In his latest update, Ron has pointed out a subtle change in employment law which can have a big impact on small businesses in Australia.

The Fair Work Act has defined a small business as one with fewer than 15 employees. Employees may be full time, part time or casuals employed on a regular and systematic basis.

An employee of a small business is unable to pursue a claim for unfair dismissal unless he or she has been employed for at least 12 months.

A small business is also exempted from paying redundancy benefits in the event that the business makes an employee’s position redundant.

These measures have been introduced to assist small business growth and development and to help insulate them from some of the costs which would impede that growth.

Under the provisions of the Act, it is anticipated that as business grow, they will be able to meet the same costs as larger businesses.

However, the definition of small business has another twist . . .

As Ron Jones points out, the implications for many businesses are significant and will force a complete reassessment of the cost structures which apply to the organisation.

If you run a small business then you really must check out the latest legislative change and see how it exposes your business to unfair dismissal risks.

To see what’s changed, read Ron’s latest blog posting here: Right Work Advice

To see more of Ron’s invaluable commentary, visit his guest HRwisdom blog Q&A session here: HR Advice

HRwisdom

Many Australian businesses still face uncertain times.

An recent article in The Australian newspaper described the potential threat of a GFC 2 resulting from the debt-ridden economies of Europe.

At HRwisdom we are very much focussed on being proactive and taking positive planning steps (and we’ll talk more soon about some excellent employee retention tools you can use).

However, for those businesses in Australia which may be suffering or trying to manage their costs very closely, we have put together an excellent free HR resource which explains:

How To Manage Redundancies Without Destroying All Employee Goodwill

In this HRwisdom resource, we have turned to industry expert Jacqui Alder to offer practical advice to businesses facing this difficult issue.

In this redundancy information we look at:

• What are the advantages and disadvantages of offering voluntary redundancies versus conducting forced redundancies/involuntary redundancies?
• What are the steps involved in the redundancy process?
• How to select people for involuntary redundancy?
• How to communicate throughout the redundancy process?
• Should you march someone out immediately when making them redundant?
• How can you implement redundancies without destroying all employee goodwill?
• A case study.

You can access the information via the home page sign-up:  redundancy information

Kind regards,

HRwisdom

The recent debacle at Toyota which has seen the company lose a reported $155 million per week has been widely reported. With continuing product recalls around the world, the losses are estimated to have caused an astonishing $30 billion loss in Toyota’s valuation on the stock market.

At HRwisdom we always focus on ideas and practices that can actively improve or protect a business. Today, we refer you to an excellent analysis of how poor HR policies and staff management practices potentially led to the $30 billion loss at Toyota.

The Eight Bad Staff Management Practices

In his excellent analysis, John Sullivan lists the eight bad staff management practices that contributed to Toyota’s massive downfall.

1. Rewards and recognition — The purpose of any corporate reward process is to encourage and incentivise the right behaviors and to discourage the negative ones. It’s important for the reward process to incentivise the gathering of information about problems. It’s equally important to reward employees who are successful in getting executives to take immediate action on negative information. Key questions — Were rapid growth (sales have nearly doubled recently) and “lean” cost-cutting recognized and rewarded so heavily that no one was willing to put the brakes on growth in order to focus on safety? Were the rewards for demonstrating error-free results so high that obvious errors were swept under the table?
2. Training — The purpose of training is to make sure that employees have the right skills and capabilities to identify and handle all situations they may encounter. Toyota is famous for its four-step cycle — plan/do/check/act — but clearly the training among managers now needs to focus more on the last two. In addition, in an environment where safety is paramount, everyone should have been trained on the symptoms of “groupthink” and how to avoid the excess discounting or ignoring of negative external safety information. Key question — If Toyota’s training was more effective, would the managers involved have been more successful in convincing executives to act on the negative information received?
3. Hiring — The purpose of great hiring is to bring on board top-performing individuals with the high level of skills and capabilities that are required to handle the most complex problems. Poorly designed recruiting and assessment elements can result in the hiring of individuals who sweep problems under the rug and who are not willing to stand up to management. Key questions — Did Toyota have a poorly designed hiring process that allowed it to hire individuals who were not experienced in the required constructive confrontation technique? Were their hires poor learners that did not change as a result of company training?
4. The performance management process — The purpose of a performance management process is to periodically monitor or appraise performance, in order to identify problem behaviors before they get out of hand. If the performance measurement system included performance factors to measure responsiveness to negative information, Toyota wouldn’t be in turmoil today. Key questions — Was the performance appraisal and performance monitoring process so poorly designed that they did not identify and report groupthink type errors? Did Toyota’s famous high level of trust of its employees go too far without reasonable metrics, checks, and balances? Did HR develop sophisticated metrics that produced alerts to warn senior managers before minor problems got out of control?
5. The corporate culture — The role of a corporate culture is to informally drive employee behaviors so that it closely adheres to the company’s core values. Because these errors occurred under difficult driving conditions, it’s hard to blame the production group, which has a well-known reputation for Six Sigma quality in its construction. The negative reports came to functions like government, risk analysis, corporate and customer satisfaction. As a result, it is the culture within the corporate offices that need to be more closely monitored rather than assuming that the culture was aligned. It appears that the corporate culture created leaders so concerned with “saving face” and so adverse to negative publicity, that they for years postponed making the announcement of a massive recall. Key questions — Did HR’s failure to measure or monitor the corporate culture contribute to its misalignment? Was the corporate culture (the Toyota Way) so biased toward positive information that employees learned not to make waves, in spite of their professional responsibility to be heard on safety issues?
6. Leadership development and succession planning — The purpose of leadership development and succession planning processes are to ensure that a sufficient number of leaders with the right skills and decision-making ability are placed into key leadership positions. It is likely that the leadership development and the promotion process both failed to create and promote leaders who were capable of confronting problems and making difficult decisions. Key question — Was the leadership process at Toyota so outdated that it produced the wrong kind of leaders with outdated competencies, who could not successfully operate in the rapidly changing automotive industry?
7. Employee Retention — The purpose of a retention program is to identify and keep top performers and individuals with mission-critical skills. Key question — Did the retention program ignore people that brought up problems and as a result, did these whistleblowers often leave out of frustration?
8. Risk assessment — Most HR departments don’t even have a risk assessment team whose purpose is to both identify and calculate risks caused by weak employee processes. Clearly HR should have worked with corporate risk management at Toyota in order to ensure that employees were capable of calculating the long-term actual costs of ignoring product failure information. Key question — Should HR work with risk-assessment experts and build the capability of identifying and quantifying the revenue impacts of major HR errors, including a high hiring failure rate, a high turnover rate among top performers, and the cost of keeping a bad manager or employee?

Final Thoughts from John Sullivan

Toyota’s problems are not the result of a single individual making an isolated mistake, but rather due to a companywide series of mistakes that are all related to each other. So many corporate functions were involved, including customer service, government relations, vendor management and PR, that one cannot help but attribute the crash of Toyota to systemic management failure. Unfortunately, in this case, the famous Japanese saying is true. “The nail that stands out” was not encouraged to be different, but instead it was “pounded down” to conform.

The key lesson that others should learn from Toyota’s mistakes is that HR needs to periodically test or audit each of the processes that could allow this type of billion-dollar error to occur.

For more staff management advice and HR ideas you can join our mailing list or get your HR templates and Employee Retention information now.

Kind regards,

HRwisdom Support

The Fair Work Act has led to many headaches and concerns in businesses all over Australia. The clock is ticking and the countdown has begun for the major changes to employment law which will directly affect you and your employees.

As part of our ongoing commitment to helping Australian employers manage their staff even better during these challenging times, we recently provided our free subscribers with the opportunity to ask your own specific Fair Work Act questions to our guest expert, Ron Jones.

As a very experienced and knowledgeable management consultant, Ron is heavily involved in resolving IR and HR issues for organisations struggling to cope with the ambiguities of the Fair Work Act changes.

Ron has studied the changes and believes there are two major areas of concern: a new set of National Employment Standards and the award modernisation process.

Specific Fair Work Questions Answered

You may want to know:

• Does the Fair Work Act apply to us?
• We already have an employment agreement in place – can’t we just keep using this?
• Does this mean that our letters of offer and employment contracts no longer apply?
• What exactly do we need to do before 1 January 2010?

What Were The Questions Answered?

To see the Fair Work Act questions answered by Ron, all you need to do is to scroll down to the Comments section of this specific blog posting (if you can’t see the Comments section at the bottom, you may need to click on the top title of this post first).

Share Learnings With Colleagues

Do let your friends and colleagues know about this set of questions and answers. They’ll benefit from Ron’s insights and the whole HRwisdom community can learn from the online HR discussion. The link is:

http://blog.hrwisdom.com.au/2009/10/fair-work-act-questions-ask-an-expert/

Remember that there have been many additions and updates made to the HRwisdom HR documents for the Fair Work Act. You can access the documents now here: HR Advice.

Kind regards,

HRwisdom Support

Browse the HRwisdom Library for redundancy letters, redundancy forms and redundancy templates.

In a recent HRwisdom blog posting on practical advice on how to terminate employees, we examined some of the legal aspects of termination and making staff redundant.

Thanks to our partnership with Business Essentials, we can bring you a free short, sharp audio interview with a legal expert on how to avoid staff retrenchments.

In this free interview, you’ll hear plenty of ideas and legal advice about how to avoid out-and-out staff retrenchments during tough economic times.

Part-time roles or job-sharing, for example, are more palatable than laying off staff members altogether but they’re not without risk.

You’ll learn about the benefits and the legal traps of some of the ways of avoiding staff retrenchments.

To hear the interview, just click on redundancy interview and scroll through the Human Resources section.

Kind regards,

HRwisdom Support
Browse the HRwisdom Library for redundancy letters, redundancy forms and redundancy templates.

Click to browse the HRwisdom Library

Regardless of the current stage of any economic cycle, many businesses face financial or operational pressures that may lead to HR manning issues and subsequent employee redundancies.

HRwisdom recently asked one of its contributors, Jaqui Alder, for her advice on making employees redundant. Jacqui is a consultant with extensive and diverse experience across Human Resources, change management, organisational development, retrenchment and industrial relations.

Redundancies Interview – Parts 1 and 2

In Part 1 of the redundancies interview with Jacqui Alder, we will take a look at the advantages and disadvantages of offering voluntary redundancies versus conducting forced or involuntary layoffs.

In Part 2 of the interview, we examine the process required to properly implement employee redundancies.

More Valuable Information Available To You Now . . .

As a proactive member of the HRwisdom community, you can also gain free access to all sections of the employee redundancy interview which examines important aspects such as:

• Part 1. Voluntary vs Involuntary Redundancy.
• Part 2. Managing the Redundancy Process.
• Part 3. How to Preserve Employee Goodwill When Making Employees Redundant.
• Part 4. How to Communicate and Manage the Departure (including a review of the dreaded “instant walk-out” of the employee vs the employee working out their notice period).
• Part 5. Case Study on Managing Employee Redundancies.

One Quick Step To Access All Parts Of The Redundancy Interview . . .

If you would like free access to the other parts of the information-packed redundancy interview, all you need to do is come back to this blog posting and contribute to the HRwisdom community by posting a comment on this blog page (click the Register option and you can choose your own user name and your email address is not displayed).

Share your comments, thoughts or experience so that other HRwisdom community members can benefit from the dialogue.

We’ll then email you the details to access all of the interview sections (including the case study on how to manage employee redundancies and communication with those laid off) - as simple as that.

To hear Parts 1 & 2 of the interview (Part 1: Voluntary Redundancy vs Involuntary Redundancy and Part 2: Managing the Redundancy Process), click here:
How To Manage Employee Redundancies

As always, make sure you are on the general HRwisdom mailing list so we can let you know about the next great free resource to help you manage employees.

We look forward to hearing from you soon on this blog page.

HRwisdom Support

Click to browse the HRwisdom Library

HRwisdom.com.au is a free HR resource site dedicated to helping you find good staff, hire good staff, manage good staff, and keep good staff.

When you click on any of the individual blog posting titles, you’ll see a number of options to share the HRwisdom article with your friends and colleagues.

To keep up to date with excellent free staff management ideas and all the latest tips and tools, be sure to join our free HR advice community via our home page and keep checking back to this blog for updates.

Enjoy your free resources.

HRwisdom