Commonwealth Bank of Australia is one of the largest commercial banks across the worlds. There are around 16.6 million customers with 6.2 million are using digital channels. The net profit of the organisation is amounted $9,881 million as per the Annual report of 2017 (commbank.com.au., 2018). As a matter of fact, there are approximately 51,800 Commonwealth Bank employees employed across 11 countries around the world. Based on this understanding, it can be argued that the company evidently has a strong business encapsulation in the international market. According to the Annual report of the Commonwealth Bank in 2017, it can be argued that the annual earning was amounted $26 billion (commbank.com.au., 2018). However, there are a number of issues that the company is suffering in recent time due to lack of transparency in the banking structure and the data breach in the bank that damaged the image of the company extensively. In addition to this, issues regarding the Human Resource Management were also considered to pose serious threat to the employee satisfaction of the company.
In this context, the report incorporates some issues by pointing out the poor workplace culture, unprofessional termination and lack of training facilities. The role of the HR management is to create better environment for the benefit of the employees and also follows the aims and objectives of the company. As a result of that, the report includes some efforts in terms of recommendations so that it will generate some strategies to mitigate the issues.
Poor workplace culture
Toxic workplace culture is considered to be one of the major threat in the Australian banking sector. As far as the working culture of Australian Commonwealth Bank is concerned, there are huge number of issues regarding the HRM policies that create problem regarding the workplace culture in the organisation. The former CEO of Commonwealth Bank, Ian Narev had found four critical issues that contributed to the malfunctioning of the workplace culture (Gray, 2017). According to the Australian Bank’s culture in 2014 it can be argued that the culture and leadership are the most crucial factors that hampered the business orientation of the company (afr.com, 2017). As a matter of fact, the employees did not feel safe to speak up and it caused a communication gap between the management and the employees. In this regard, it can also be asserted that the malfunctioning in the workplace culture in Commonwealth Bank of Australia is strongly intertwined with the incident of replacement of four consequent directors. Moreover, the investigation conducted by Australian Prudential Regulation Authority (APRA) also condemned the weak workplace culture in Australian Commonwealth Bank for the money laundering issue (apo.org.au., 2018). These continuous change in the high authority also affected the lower rungs as the employees became sceptical about their job assurance.
In this context, the Configurational theory can be identified as an important aspect. As per this theory, the HR system can perform more effective way by intertwining the organisational objectives with the aims and goals of the HR department. According to Kurtovic and Hasimbegovic (2015) it can be argued that the purpose of the Configurational theory is to cater an effective environment where the Human Resource Manager is dedicated to deal with the organisational objectives in an extensive manner. In response to that, a relationship between the HR department and the higher authority has to be developed that demarks in one hand the objectives and missions of the organisation and on the other hand let the HR department inform about the objectives so that they can shape their planning accordingly (Tzabbar, Tzafrir & Baruch, 2017). In this context, the term “Holistic” is very important as the HR management follows the notion of holistic principles. As far as the definition of “holistic” is concerned, it can be advocated that the role of the holistic is to apply all suitable views and practices with the purpose to achieve the expected common goals (Ruži?, 2015). However, in terms of the business organisation, this common goals are obviously inculcate the perception of common purpose and objectives. Putting the HR management in such a condition so that they can deliver their expertise in order to bring better outcome and increase the profit in a robust manner.
In this regard, there are various approaches regarding the Configurational theory of HRM practices but each of the theory covers up the basic perception of making an amicable relationship between the HRM and the senior management. There are the classical, neo-classical and the behavioural approaches that coincided with the scientific practice of Human resource Management. Therefore, it is the responsibility of the managers to take adequate measures in order to ventilate their ideas, concepts in a more combined approach that can serve the purpose of the organisation. According to Hsiao et al. (2015) the elements of the Configurational theory is resembled with the mixed or hybrid concept of procuring benefits for not only the Human Resource managers but also creates a healthy environment for the corporate organisations so that those companies can also get the light of possible profits. In fact, as in his research Saridakis, Lai and Cooper (2017) pointed out that the better workplace environment or culture facilitates better market capitalisation and moreover it also caters some important developments for the future profitability of the companies as well.
It has been seen in case of the Australian Commonwealth Bank that the company was alleged with intentional and deliberate termination of employment. In this respect, the government agencies of Australia had started investigation regarding this and found out that there were more than 7000 part time employees working in the Australian Commonwealth Bank owed millions of dollars unpaid for superannuation entitlements. As per the research carried out by (McCauley, 2015) it was considered to be one of the greatest number of lowest paid workers since 2009. As a result of that the Fair Work Commission of Australia started further investigations and got the information that bank had received legal advice on the 9.5% super underpayment and plans (McCauley, 2015). This incident proved that the Hu8man Resource Management of the organisation was not in such strong enough to fight back for the payments of the non-permanent staffs.
This was not the only issue that hampered the job satisfaction of the employees. In case of the medical and health facilities the employees of the Australian Commonwealth Bank were suffered with huge number of deprivation from the company‘s end. In a report presented by the ABC News it was claimed that the an employee of Australian Commonwealth Bank who was suffering with mental breakdown did not enjoy his insurance covering due to the lack of cooperation of the company and he had to wait for several years to get his money back (Letts, 2017). This was considered to be an unethical as well as unscrupulous behaviour practised by the organisation that violated the norms and regulations underlined by the Australian Securities and Investments Commission. The CommInsure practice that the Australian Commonwealth Bank has practised, is full of misery and does not clarify the terms and conditions of the Insurance provisions. This was purely a misleading act regarding the HR management of the company (afr.com, 2017).
In this regard, the Hard Model is considered to be the effective framework that encompasses both the traditional approach of the HRM and the soft versions as well that control the management perspective regarding the HRM. This theory puts intensive focus on the tight strategic control, an economic model, managing human resource through commitment and the cohesion. According to Veloso, Tzafrir and Enosh (2015) it can be asserted that the role of this model is to clear out the specific role of the Human Resource Management and connects it with the management intentions so that there will be a cooperation and connection between the management and the higher authority (Rahman, Tabassum & Sultana, 2017). In this context, the role of the HRM is to identify the essential norms and regulations of the Australian government regarding the process of employment and the legislative framework that facilitates a better environment that meet the purposes of both the employees and the organisation (Thunnissen, 2016).
On the other hand, Dalton and Bingham (2017) showed that the role of the hard model is to set the norms on the basis of rights and benefits of the employees as it is mentioned in the government regulations. Moreover, the HRM is also responsible to give support to the interests of the employees in case of any breach from the end of the organisation regarding the payment and job related issues. As per the research conducted by Harley (2015) it can be argued that the hard model can be treated as an economic resource or commodity or a new technology that is dedicated to develop a framework for the benefits of the employees. Rules, regulations, supervision, disciplinary actions are labelled as the intricate part of the HR management (Tzabbar, Tzafrir & Baruch, 2017). Therefore, it is the responsibility of the HR Management to take initiatives for the benefits of the employees and ensure their safety on the basis of the organisational objectives.
Moreover, it can be argued that the training facilities in the banking and financial sectors are very important in order to make a better and effective business operation environment. In response to this, in Australian banking and financial sector there are a number of issues regarding the training and induction of the employees. As per the research carried out by Gray (2017) it can be stated that due to lack of understanding of the importance and significance of the training program the bank staffs face severe challenges and as a result of that the service quality became curtailed. In this regard, the role of the HR managers are essential because the HRM department is entitled to foster any training program requirement.
Based on this understanding, the same issue can be identified in the process of the Australian Commonwealth Bank. It had been reported that the bank deliberately practiced bias training facilities that hampered not only the purpose of the training but also created severe challenges to the diverse workplace environment. The worst incident that was happened in Australian Commonwealth Bank was related to the data breach in the bank accounts of approximately 335,000 customers with a transaction amount of 4.5 million USD (apo.org.au, 2018). This was an act of lack of ethical consideration that the company had possessed in its course of operation. In response to that the Australian Securities and Investments Commission initiated an investigation in accordance with the money laundering and fraudulent in Australian Commonwealth Bank. As per the report of the ASIC, it can be asserted that there were lack of understanding and the negligence regarding the importance of training and as a result of that it became a severe problem for the organisation to maintain firm security of the customer accounts (McCauley, 2015).
The Contingency theory is considered to be an effective framework in this regard. According to Aust, Brandl and Keegan (2015) it can be advocated that the relationship between the relevant independent variable and the dependent variable to influence the ownership, location, technology and intensity of capital. In this context, the role of the HRM is extensive and significant as well. As per the research conducted by Marler and Parry (2016) it can be stated that in course of time the HRM practice also transformed its orientation in a robust way and therefore, it became important for the HR departments to deal with other activities beyond the traditional work culture. Different policies and strategies coupled with alternative methods to involve the employees in the operation process more intense manner. In addition to this, the role of the HRM is also associated with the intention to communicate with the operation managers and the senior authority to confirm any kind of further requirement of training. In this regard, Johnson and Szamosi (2018) advocated that the principles and practices of the organisations is to manage its human resources in an effective and elaborate manner so that it will generate more profit for the organisation. Henceforth, it requires some methods and proceedings related to managing the employees. Training and induction are identified as one of the methods that can create difference in the organisational operational management. Moreover, it can be stated that in the financial sectors proper knowledge and understanding regarding the financial matters and adequate knowledge of the market and consumer behaviour. In fact, training on the basis of the technology and therefore, the HRM must resemble with the notion of training and induction in order to create a better operational framework for the organisation.
In this regard, there are certain recommendations that are beneficial to make the International HRM practice more effective. The recommendations are as follows,
Conclusion
Therefore, in a conclusion, it can be argued that there are number of issues related to the organisational framework of Commonwealth Bank of Australia. The report identifies a number of issues in this regard such as the lack of organisational culture, dearth of technological advancement and irrational termination practice. The HRM department is responsible to address these issues however in case of the Commonwealth Bank of Australia the HR managers were failed to resolve the problems. In response to this, the report highlights some recommendations that are based on the given issues in order to resolve intensively.
References
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apo.org.au. (2018). Prudential Inquiry Into The Commonwealth Bank Of Australia. Retrieved from https://apo.org.au/system/files/143271/apo-nid143271-730691.pdf
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commbank.com.au. (2018). Annual Report 2017. Retrieved from https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/annual-reports/annual_report_2017_14_aug_2017.pdf
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