Question:
Discuss about the Human Resource Practice of Woolworths.
Human resource management is the practice to handle the human resource within an organisation and HR department tries to manage the employee performance towards the organisational strategic objectives. In addition, Conflict of interests is a very common issue in the business sector and both the public and private sector face this issue quite frequently. If the conflicts are not managed properly, the productivity of the organisation gets hampered. OECD (Organisation for Economic Co-operation and Development) avers that the conflict between the organisational management and employees could inappropriately affect the performance of the official duties and responsibilities (Oecd.org 2017).
This study will focus on a situation as stated above and questions related to this situation where conflict has arose in a real-world business situation. This study will delineate the conflict situation within the organisation and the eternal issue between employer and employees. The ethical and professional behaviour to defend this situation will also be discussed in this report.
Woolworths Supermarket is a famous Australian supermarket and it is owned by Woolworths Limited. Along with Coles, the retail giant Woolworths create a duopoly in the supermarket industry in Australia. Woolworths has more than 990 stores in all over the Australia and New Zealand. The stores sell vegetables, packaged fruits and foods, meat and necessary things like beauty products, magazines, household products and much more. Woolworths Supermarket started its journey in the year 1942 in South Wales and headquarter of the organisation is in Bella Vista New South Wales. The CEO of the organisation is David Banducci and revenue of the organisation touched 44 billion AUD in the year 2016 (Woolworths.com.au 2017). Woolworths provides special importance in supply chain management as, without the supply chain, the organisation will not manage the product flow in the retail stores. Supply chain management helps the supermarket in boosting the customers’ services and it can reduce the operation cost. Operation costs within retail can decrease purchasing cost and reduce production cost, it can also decrease in total supply chain costs. From the supply chain and warehouse, Woolworths has the benefits of protection of the products, protection of the goods from theft and climatic conditions. Woolworths stores the raw materials for future production and surplus products also stores in Warehouses.
According to The Age news, on 9th August 2015, Woolworths faced the issues of workers strike over employees’ hire casualisation (Mentioned in the new article: https://www.theage.com.au/victoria/woolworths-laverton-workers-strike-over-labour-hire-casualisation-20150809-giv9au.html.) On 9th August, more than 200 striking workers had blocked the trucks from leaving and entering the warehouse at Leverton, in Melbourne’s west. Woolworths sells liquor also and it has a special department that manages the liquor distribution. The employees at Leverton at the liquor distribution centre started protesting at 4 am on Monday. The anger had been rising among the employees in Woolworths, related to labour hire casualisation in warehouse and supply chain (Theage.com.au 2015). On the last few days, a group of employees met with the management of Woolworths in order to solve the labour-hire casualisation as Woolworths used an external agency in order to hire the casual employees. The employee-group asked the management to take the disciplinary actions in case of anyone involved in the illegal practice of external agency picket (Theage.com.au 2015).
On the other side, Woolworths had been trying to seek the orders to break the picket and the organisational management had been delaying in putting the stop of the issues at the Fair Working Commissions. The employees had been very worried as the notice came from the external agency as a surprise to the employees and they could lose the employment all of a sudden. One of the employees from negotiation team averred that the National Union of Workers had already claimed the introduction of the labour-hire breaching an agreement in the year 2014. While talking with the Woolworths management, the spokesperson declared that external labour-hire firm had made partnership with Woolworths in order to recruit the casual labours. The Woolworths spokesperson had said that they were not going to put any changes in retention and recruitment policy. Moreover, the industrial action had been disappointing that time and Unions and Employees could not address the concerns. The picket had threatened the labours of the Woolworths and the external agencies also put threat to stop supply of groceries and liquor also. The picket also made the situation worse by stating that more than 600 permanent labours could face the unemployment issues in Melbourne North. Woolworths did not check the situation correctly and the decision of stripping off more than 600 employees from the warehousing operation made the wound worse (Theage.com.au 2015). However, the spokesperson in Woolworths commented that Woolworths tried to invest more in the opening of new stores in Victoria and they shifted the employees in those stores.
Woolworths’ employees had been protesting about the same issues for two years before the strike occurred and the group of employees tried to negotiate over the key employment problem in Collective Enterprise Agreement. The employees of Woolworths took the industrial stance in order to solve the issue of labour hire casualisation and the employees tried to find solution in a constructive way. That time, Woolworths had more than 197,000 registered staff members. The employees had interest in improving their conditions by striking on Monday and the employees had taken this step out of complete frustration. The casual warehouse employees of Woolworths took the step as they were just pushed into a corner and only one option left to walk off the job. Employees raised the issue of labour hire casualisation and the rights of casual employees to have the permanent positions within the orghanisation with contract. The employees also raised the issues of rates of pay for the casual workers and conditions in which they had to work in Woolworths. As mentioned by Watson (2013), employees highlighted the ratios of use of casual workers in Woolworths and security in tenure of employment for the casual workers. The casual employees had been facing the issue regarding the lack of transparency in recruiting of the casual employees and the Woolworths’ management commitment towards the stable workforce.
In case of some of the Australian organisations, the management tries to do 100% outsourcing in case of employees from the hiring agencies. The main elements of casualisation that provide benefits to the organisation are minimum wages, no fringe benefits for the hired labours, contract-based working, no job security and reduced payroll (Reddy et al. 2015). The employees do not have the longer services and they do not have long leave also. Woolworths took the casual workers as it provided profit to the organisation as the organisation did not need to give extra wages to the employees. Woolworths had found this casualisation of hired labour was one of the easy path and quick way to generate the revenue. According to Bourelle (2014), in Australian scenario, in the meat industry, this casualisation happens more and employees do not have any security in the job. Woolworths used the labour-hire arrangement s a triangular relationship with the employees as employees were hired as an employee or by an independent agency (Miller 2014). This resulted that the employees are supplied by the third party and the security in a job depends on the willingness of the third party. In the warehouse of Leverton, the employees were continuously requesting to make them permanent and they were threatened to lose the job.
The conflicts between employees and business management always pose a negative impact on the business performance. As stated by Watson (2013), casualisation has always been an element of unemployment in Australia as the employers embraced this flexible option in business. In casual workforce, the employers can reduce manpower depends on workflow and the employers can also detain the employees if they want. In the business concept, JIT (Just in Time) approach can be taken as the business entity wants to provide goods in response to the demand and not in the apprehension of the demands (Toscano 2017). Therefore, Woolworths’ management faced the challenge in keeping the employees as a permanent basis in warehouse sector and supply chain. The permanent workforce in idle time was not being a good option for Woolworths. This figure was same on that contemporary time as almost a quarter of all employees in Australian workforce reported being causal workforce (almost 23.2%) (Huang 2015). When the employees had a strike on Monday, the production of that day got hampered as employees were frustrated. With the frustration of the employees, management of Woolworths took the decision to think over the matter. Woolworths had a set of rules and negative influence of the business had influenced the brand image. The stressed and worried employees did not put forward the productivity and business organisation had faced the mental health issue from the employees.
The employees desired not to work effectively if their wishes and demands did not get fulfilled. The business objectives and productivity of the organisation got hampered for some days till the management provided a green signal to negotiate over the issues. It was difficult for the Woolworths to look forward without the management of supply chain and warehousing (Frederickson and Rohr 2015). On the other side, it was difficult for the employees to stop the work and responsibilities for a long time. The productivity and brand image of the organisation was in danger and the ethical business policy of the organisation had not been followed perfectly. At that time, growing use of casual labours was predominant and the Woolworths could have been provided certainty of for the casual labours.
In the Woolworths, HR department is very important as the human resources of the organisation are large in numbers. In minimising the conflict issues of the employees against the organisational management, HR department can play the role of negotiator. In this case of Woolworths, the HR department could not redesign the policy of the organisation; however, they could negotiate with the employees to bring out the solution. In pluralistic nature of organisational culture, the most of the critics viewed that conflict represents the dissimilarities of the organisations’ opinions (Klein et al. 2013). On that sitiation, the HR department could give a memo for show cause, suspend the concerned person, restrict his involvement in the official matter and curtail his scope for promotions. Since penalty is the first option for any company to handle a situation like this. It raises a threat to the other employees so that they are restricted from involving in any such conflicts of interest. However, in the grievance of the employees, HR department could understand the demands of the employees are valid or viable or not. The employees’ demands could be incompatible with the organisational goals. As opined by Fawkes (2014), conflict resolution is all about the decision-making of particular case, HR department of Woolworths made understood the management the needs of the employees and their grievance.
HR department could transfer the employees to another department or another location to curtail the relationship with the other employees in order to minimise the rage among emoloyees. HR department of the organisation might arrange a session with the affected employees to know about the exact reason for this type of conflict and the resultant behaviour and may try to dig down deep to know about the loopholes of their policies regarding code of conduct and code of ethics. As suggested by Carrese et al. (2015), HR department could also arrange a training session for the employees on a regular basis to remind them about the company’s policies. In case of Woolworths’ strike of the employees, HR managers needed to conceptualise all the unequal outcomes of the casualisation of hire employees. In recruitment and selection of the employees, HR managers could stop using external agencies for hiring and they could themselves manage the recruitment process.
The HR department of Woolworths could arrange a session with the warehouse employees who were involved in the conflict of interests and must try to know the exact reason for such a behaviours and showed them organisational policy. According to the feedbacks of the employees, the HR department could try to change its code of conduct and code of business ethics. In this process, the HR department could set some guidelines to reduce the workplace conflicts. It must be having some already set code of conducts and ethics for all the employees.
Woolworths’ HR managers could start new recruitment policy apart from the third party external recruitment and it might have pacified the employees. The employees of the Leverton needed the security that time and the HR managers could ensure that recruitment policy of the organisation would be changed and management was thinking about this. New recruitment policy would help the employees and HR managers themselves would arrange the recruitment and selection.
The HR department could ensure all the employees in Leverton that they would be permanent in no time and HR department was talking with management in this note. The employees of Leverton in warehousing could stop the strike as the being permanent could solve the casualisation issue in the organisation. The management had to bear the extra wages for that matter, however, the sudden rage of the employees could be solved by ensuring the security in the job.
Woolworths made the contract with the employees when they came to the organisation. HR department could make a new set of organisational policies that would ensure a permanent job, security in the workplace and right wages for the employees. This approach of the HR department in Woolworths could decrease the rage of the employees during the strike. Furthermore, the company could have changed some business strategies and ethics to avoid the similarity incidences with the rival company (Bourelle 2014). It is a challenging task and quite time to consume as well as involves financial investments.
In case of Woolworths in solving the strike issue, the HR department could ensure the job security for the casual contract employees with giving some fringe benefits. The employees were deprived as they were not treated as equal to permanent employees. Giving dignity to job security in the workplace could solve the issues for employees (Apsc.gov.au 2017). The HR department of Woolworths is always responsible for maintaining the professionalism and ethical behaviour among the employees. These help in developing effective workplace habits, which assist the employees and the organisation in the long run to improve the productivity. In Woolworths, the conflict of interest is a deviation from the workplace ethics and professionalism from the management. In these situations, the group or the individual acted according to their own interest and ignores the organisational interest. In addition, honesty, respect, fairness and responsibility towards the work and the organisation construct the business ethics. Woolworths could have adopted some formal rules and regulations and these are called the code of ethics.
Conclusion
It has been observed from the analysis that Woolworths had issues in casualisation of employees and they had malpractice in profit-making and wages of the employees. Conflict of interest is a big issue in any organisation and it could lead to a downfall in productivity and in the reputation of the organisation in the long run. Although in some cases, conflicts of interests have contributed in the generation of new ideas and direction for businesses, it has majorly affected some businesses also in terms of quality, corruption, unethical practices and reputation. Such behaviour creates a negative impact on the work culture of the organisation. However, the HR managers could change the organisational policy by ensuring the job security to the employees.
References
Apsc.gov.au, 2017. In whose interests?: Preventing and managing conflicts of interest in the APS – APSC. Apsc.gov.au. Available at: https://www.apsc.gov.au/publications-and-media/current-publications/in-whose-interest [Accessed on 14 Nov. 2017].
Bourelle, T., 2014. New perspectives on the technical communication internship: Professionalism in the workplace. Journal of Technical Writing and Communication, 44(2), pp.171-189.
Carrese, J.A., Malek, J., Watson, K., Lehmann, L.S., Green, M.J., McCullough, L.B., Geller, G., Braddock III, C.H. and Doukas, D.J., 2015. The essential role of medical ethics education in achieving professionalism: the Romanell Report. Academic Medicine, 90(6), pp.744-752.
Fawkes, J., 2014. Public relations ethics and professionalism: The shadow of excellence. Routledge.
Frederickson, H.G. and Rohr, J.A., 2015. Ethics and public administration. Routledge.
Huang, P.H., 2015. How improving decision-making and mindfulness can improve legal ethics and professionalism. JL Bus. & Ethics, 21, p.35.
Klein, P.G., Mahoney, J.T., McGahan, A.M. and Pitelis, C.N., 2013. Capabilities and strategic entrepreneurship in public organizations. Strategic Entrepreneurship Journal, 7(1), pp.70-91.
Luce, E.A., 2015. Conflicts of interest.
Miller, S., 2014. Trust, Conflicts of Interest, and Fiduciary Duties: Ethical Issues in the Financial Planning Industry in Australia. Capital Failure: Rebuilding Trust in Financial Services, p.305.
OECD, 2014. Managing Conflict of Interest in the Public Service. oecd.org. Available at: https://www.oecd.org/gov/ethics/48994419.pdf [Accessed on 14 Nov. 2017].
Reddy, A.A., Rani, C. and Reddy, G.P., 2015. Labour scarcity and farm mechanisation: A cross state comparison. International Journal of Management, 3(4), pp.45-67
Toscano, N. 2017. Woolies workers strike over labour hire casualisation. The Age. Available at: https://www.theage.com.au/victoria/woolworths-laverton-workers-strike-over-labour-hire-casualisation-20150809-giv9au.html [Accessed on 15 Nov. 2017].
Watson, I., 2013. Bridges or traps? Casualisation and labour market transitions in Australia. Journal of Industrial Relations, 55(1), pp.6-37.
Woolworths.com.au. 2017. Woolworth Supermarket Available at: https://www.woolworths.com.au/ [Accessed on 15 Nov. 2017].
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