Theory Assessment

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Theory Assessment
Question 1:
You are assessing the performance of a regional personnel manager, Julia. There has recently been a forced-redundancy program at her location and, as a consequence, there have been three complaints about her handling of the redundancy process. In two cases, legal action has been threatened. A summary of the complaints and her response to each of them follows:
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a. Complaint from John: She told me that they had to let me go because I was the eldest in my section. I think this isage discrimination. I’m going to sue.

Response from Julia: I told John that, as there were forced redundancies and that he was closest to retirement, that he would be least financially affected of his workgroup. Further, after taking account of tax breaks and superannuation law, the actual monetary impact for him would be very minor, whereas his colleagues are all substantially younger and would be more affected. His work performance was no better or worse than that of his colleagues. For these reasons he was selected for forced redundancy.

b. Complaint from Sue: I was told that since there were forced redundancies and that I was just a majority race person in the workforce, I would be let go. This is ‘reverse’ discrimination. I’m going to sue.

Response from Julia: Sue’s complaint is essentially true; her performance was not outstanding, and I’ve got diversity targets to reach, so I’m using the forced redundancies to improve our workplace diversity index.

c. Complaint from Trang: I’m being fired because I’m Vietnamese. My performance assessments in the last two years are only bad because I’m Vietnamese – my English is not so good, but I deal very well with the Vietnamese-speakingcustomers, which almost nobody else can.

Response from Julia: Trang’s performance has been sub-standard since his engagement three years ago, and his last two year’s performance assessment records confirm this. This was the sole basis for selecting him for redundancy. This was clearly explained to Trang, but he does not accept it.

In your understanding (and accepting all statements as true until further investigation), has the regional personnelmanager acted properly in handling the redundancies, bearing in mind national and state local Anti-Discrimination, Diversity and Equal Opportunity legislation?
Is there any counseling which should be given to Julia to improve her future performance?

Question 2:
You are assessing the performance of the NSW regional operations manager, Tom. Tom (and the regional financial manager, Roger) has a high staff turnover in his section, so he is frequently engaged in recruitment, especially for clerical personnel who look after product ordering. He usually conducts the interviews together with Roger, and the successful candidates are channeled to operations or finance according to their skills and current openings.

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The quality of the candidates employed by this process has been, in general, very good and this is partially responsible for the high turnover as these staff tend to move on to other sections or locations. Unfortunately, both Tom and Roger have continuously failed to reach their workplace diversity targets and there has been some grumbling about their unorthodox interviewing techniques.

The regional personnel manager, Julia, has reported that Tom and Roger usually start an interview asking applicants what Rugby team they support and what they think about the latest test cricket match. Tom says that this is just his way of getting candidates away from the standard, practised interview responses – he doesn’t care which team they follow. Nevertheless, Julia is concerned that there might be a gender, cultural and racial bias in this interview approach.

Is there a problem with this interview technique, bearing in mind national and state Anti-Discrimination, Diversity and Equal Opportunity legislation?

Is there another approach to managing the recruitment interview process which you would recommend for Tom and Roger?

Question 3:
Your performance assessment process is being assessed by your regional HR manager. She tells you that your last three years’ performance assessments have consistently ranked female employees as having lower performance than their male counterparts in the same jobs. This has resulted in a drift in relative salaries, to the point where, on a job-by-job basis, there are now no female employees paid as much as the lowest paid male employee and that this is an indicator of strong gender bias.

You respond that you have assessed performance systematically on evidence gathered from agreed KPIs and that any apparent gender bias arises coincidentally from the fact that your female employees are simply not performing up to the same level as the male employees. She replies that the KPIs themselves might be inducing bias.
Discuss whether statistical analysis of performance that indicates potential gender bias, is a reliable indicator of true bias, bearing in mind national and state Anti-Discrimination, Diversity and Equal Opportunity legislation.

Question 4:
What are three objectives that you would include in the performance-management process?

Case Study Assessment
Task
Human resource managers must be able to develop the elements of a performance management system based on current performance, the human resource management strategy and the agreed components of the performance management system. In this assessment students are required to demonstrate that they understand the strengths and weaknesses of different potential elements of the components of a performance management system.

The assessment requires students to respond to a scenario described for Pasifika Petroleum Company and a request from their boss to develop a performance management system and furnish him with a report recommending a design and explaining the rationale.

From the Pasifika Petroleum scenario you receive, design a performance management system with the minimum components:
• recruitment and induction
• job description
• formal feedback
• reward and recognition
• learning and development.
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Complete a report outlining your recommendations for each component and explaining the rationale for the design elements of each component.
1. Read the scenario below.
2. Design a performance management system compatible with the HRM strategy of the organization.
3. Document the procedure with timeframes.
4. Write a report discussing the merits of the chosen and alternative approaches.
5. Make a recommendation and outline the rationale for the recommendation.

Ensure that these elements are addressed:
• A rewards and recognitions system that allows specific skills to be recruited and retained while maintaining equity for the existing employees.
• Elements that will encourage the development of local employees to the level of management.
• Elements that will correct the current performance shortfalls.
• Elements that enable managers to manage more effectively.
• Alignments with the overall goal of Pasifika Petroleum and the HRM strategy.
• Ease of implementation versus return.
• An understanding of the strengths and weaknesses of performance management system components in relation to delivery of an organisation’s overall strategy and HRM strategy.

Pasifika Petroleum Company has been operating in the small island nation of Pasifika for 75 years.
Pasifika has a population of 700,000 people. Forty-five percent of the population are descendants of an Indian immigrant working population, 50% are indigenous and 5% are mixed race, expatriates and other nationalities.
Company performance and organisation
The split of employees by ethnicity is:
• 55% Pasifika indigenous
• 40% Indian
• 5% expatriate and other races.

The age profile is:
• 15% over the age of 55
• 35% between the ages of 45 and 55
• 32% between the ages of 35 and 45
• 13% between the ages of 25 and 35
• 5% under the age of 25

The gender profile is:
• 25% women
• 75% men
Expatriates fill four of the five recently expanded management team positions in Pasifika Petroleum, the exception being the operations manager who is a Pasifikian. Indian employees fill 58% of middle management positions and indigenous employees fill 78% of frontline supervisory positions.

Performance issues
Pasifika Petroleum has known performance issues. They are:
• The lost time injury frequency ratio remains stubbornly high at 35 lost time injuries per million man hours worked. This is three times the industry average.

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o There is evidence from safety audits that not all unsafe acts and unsafe conditions are reported and that Pasifika’s Permit to Work system for hazardous jobs is not being followed at all times resulting in higher risk operations than is achievable.
• Pasifika Petroleum has been unable to spend its capital budget for two years in a row and the level of spending to date for this financial year has been 60% of where it should be if it is to complete its spend this year.
o Pasifika Petroleum gets an automatic return of 15% on its total capital employed in the government pricing formula and capital not spent is income not earned in the pricing formula.
• Credit has increased steadily over the last two years to now stand at 38 days sales outstanding against a target of 20 days. The key issue appears to be a reluctance of sales people to ask for money in case they offend someone who may be related (Pasifikian and Indian culture) or someone who holds a higher communal rank (Pasifikian culture).
• Sales have not hit target for three quarters in a row. The sales force comprises three people. Two regularly hit their targets while Jetani, who has been in sales one year, has not been able to hit target since he started.
• Financial and operational audits have revealed two serious non-conformances each of the last three years and it has taken more than 12 months to correct the non-conformances.
Other issues
Engineering skills are in short supply in Pasifika as students must enrol in overseas universities to complete an engineering degree. Often students do not return to Pasifika and those that do command higher salaries than Pasifika’s current salary bands allow.

Most Pasifika people are passive, but not all. There is a divide between passive people who live with an ‘old’ mindset and modern, usually younger people who have a modern mindset and are more likely to be assertive about their role and responsibilities.

Most Indian men are assertive and most Indian women are passive, but again, not all. The more educated people from both races are more likely to be more assertive. Average gross domestic product (GDP) per capita is US$20,000 per annum.

Current performance management system
Appraisals are completed annually, however, only 35% are completed on time and a further 25% are completed up to two months late. Forty percent are not completed at all. Managers are not given constructive feedback by the general manager about the importance of completing appraisals on time as he knows ‘how busy people are’.

Salaries are increased in line with consumer price index (CPI) movements as are the salary bands. Exceptional performance can earn an employee an increase in salary above CPI movement. However, the exceptional increases over the last few years have generally been confined to senior management and some middle managers.

Employees have been terminated for issues such as theft; however, no-one can remember the last time anyone was terminated for poor performance. It is against the culture of Pasifikians to apportion blame to an individual.

Training is sporadic and mainly confined to product knowledge and an annual working safely seminar run by an American safety management expert.
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Human resource strategy
Joe Boss has been appointed the new General Manager and has recently added you to the management team as HR Manager. Joe’s ambition for Pasifika Petroleum is to increase net profit by 50% in three years by increasing market share, introducing new products and decreasing the current cost of doing business.

Joe believes that there is a need for a performance management system to be implemented as part of an overall HRM strategy that:
• Rewards results and rewards the attainment of competence.
• Manages the poor performance and poor behaviour creating a culture where performance and positive behaviour are valued strongly.
• Recruits the best people for the job irrespective of racial origin, age or gender.
• Improves the skills of Pasifika employees through recruitment and learning and development.
• Aims to replace two expatriate managers within five years with local managers.
Joe Boss has asked you to design a performance management system for Pasifika Petroleum. He has asked you to consider different design elements for each component and make a report on your final design explaining why you chose some design elements over others.
Joe wants you to design the performance management system comprising the minimum component set:
• recruitment and induction
• job description
• formal feedback
• reward and recognition
• learning and development.

Practical Assessment
Human resource (HR) managers must be able to design and gather support for performance management systems which align not only with the human resource management (HRM) strategy but with the overall strategy of the business. HR managers must be able to implement the system they have designed.

This assessment requires students to design a performance management system for a section or division in their company or another company and to implement at least one component of the performance management system.
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Students are required to work with an organization to:
• Analyze their business and human resource management strategy.
• Design (or redesign) a performance management system that assists in the delivery of their business and human resource management strategy.
• Present the performance management system to the management of the business and get support for the implementation of the performance managements system.
• Implement one or more of the components of the performance management system in the role of an HR Manager.

1. Agree the organization to involve with your assessor. If students do not have access to an organization, the assessor will provide one.
2. Interviews #1:
a. Interview senior managers to understand their business strategy.
b. Interview human resources management to understand their human resource management strategy.
i. If the organization does not have a human resources manager interview the general manager/CEO
ii. If the organization does not have a formal HRM strategy determine what it should be from interviews with senior management.
3. Stakeholder and risk analysis:
a. Complete an analysis of key stakeholders and the high impact risks and accompanying risk treatment options.
4. Meeting #1:
a. Students review their understanding of the HRM strategy with senior management.
b. Students review their understanding of the range of employment conditions.
5. Design the performance management system and get sign off from senior management.
6. Meeting #2:
a. Students explain how the components of the performance management system align with HRM strategy and are suitable for the range of employment conditions.
b. Students review the draft performance management system with senior management.
c. Students seek approval to implement at least one component of the performance management system.
i. this may take a third meeting if revision of the performance management system presented to senior management is necessary.
7. Design the implementation plan and get sign off from your assessor and the General Manager/CEO.
8. Implement the component(s) selected:
a. Design and implement communication tools to advise appropriate managers of what they need to implement and how it will be implemented.
b. Design a training program for managers in the methods used in the component chosen for implementation.
c. Have managers complete a training evaluation form.
9. Create a report describing:
a. The process undertaken to design a performance management system.
b. The business strategy and HRM strategy the performance management system supports.
c. The performance management system design.
d. The implementation plan.
e. The training process and summary of content.
f. The evaluation of the training.
g. The results of the implementation process.
h. An analysis of what the student would do differently next time.
10. Submit the report to the assessor at the agreed time.

You must provide:
• a report on the analysis design and implementation of a performance management system
• summaries of interviews
• stakeholder and risk analyses
• minutes of meetings
• evaluation forms.

Your assessor will be looking for:
• Knowledge of the design elements of each component of a performance management system.
• Ability to identify key stakeholders and gather their support or negate their opposition.
• Ability to align the components of a performance management system with an HRM and business strategy.
• Effective planning of the implementation identifying key stakeholders and risks.
• Effective design and implementation of training in the methods comprising the component chosen for implementation.
• Effective implementation of at least one component of the performance management system.

Your answer should not exceed 2000 words in total for the whole assessment; i.e, Theory, Case study and the practical assessment. Answer to all the questions is important, not word count.

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