Practice in Human Resource Management and Employment Relations

Problem Based Learning

The Mack Organisation (MO) is a health insurance company headquartered in Sydney. It has offices located through the country and employs over 180 individuals. The firm's human resource department includes a compensation administration section that consists of two individuals, one of whom is you - you've just been hired to replace a person who resigned.

MO has several different wage structures, including one for executives and one for clerical personnel. The firm is non-unionised because of its ‘paternalist' culture and emphasis on unitarist approaches; a situation management would like to retain. There is no enterprise bargaining agreement; rather the company relies on the relevant award. All salaries are above the award minimum rates.

Employee salaries directly relate to the work they do and how well they do it. Two major factors work together to establish the salaries payable for various jobs - job evaluation and salary ranges. Job evaluation is a method of measuring the relative worth of each job in the organisation compared to all the other jobs, based on an objective analysis of the duties and responsibilities of the position.

MO's job evaluation process is as follows: A description that defines the function of the job and lists the major duties performed is written for each job. Each description is then evaluated by a standing committee of managers from various areas of the organisation who have a broad knowledge of the jobs that exists throughout the organisation. Their evaluation is based on "yardsticks", including knowledge requires freedom of action, accountability, contacts with employees and customers, physical effort required, unusual working conditions, research responsibilities, and supervision or management responsibilities. Based on these yardsticks, the job is assigned a point value. By listing all positions according to their point value, the relative worth of each position is established. There hasn't been a formal job evaluation for years but, at least according to the Director HR/ER, jobs haven't generally changed.

Based on the total points in a job evaluation, jobs are assigned to a grade level. Each grade has an entry or minimum salary and a maximum salary payable for the jobs in that grade; the amounts between the entry and maximum salary comprise the salary range for the grade.

Usually employees begin at the bottom of each salary grade. Employees are considered for a merit increase after six months of satisfactory service. After this, they may receive an annual merit increase on completion of satisfactory service. There are a total of six possible merit increases. Cost-of-living increases are granted periodically by the organisation to all employees, usually in line with changes to the award.

The organisation's current wage structure for clerical personnel is shown below.

Most clerical workers are women.

The Director of HR/ER wants to use your appointment and obvious HRM competencies (you recently graduated with a MHRM from the University) to reflect on the appropriateness of the current compensation approach for clerical personnel and make appropriate evidence-based recommendations using a number of recent emails (set out below) as a guide. They've also asked that you prepare draft responses to each email for their approval. In doing this task you may believe that some additional information is needed before a final decision on an email item can be made; if so, explain what is required.

Your report should be not longer than 2,000 words (excluding references). The draft responses to the emails need to be included as a separate appendix.

This PBL was adapted from ‘Developing Effectiveness in Human Resources'.

Referencing style, APA 6th citation style, in-text references in the report is essential.