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What legal issues does Gemma need to take into account in designing a redundancy process?

Questions:

1. What legal issues does Gemma need to take into account in designing a redundancy process? Is Alan's suggestion of targeting people closer to retirement age a feasible approach?

2. How should Gemma configure the HRIMS to provide useful data about the company's workforce? What sorts of workforce data reports should the system generate?

3. What kind of HR planning process would be appropriate at this point in the company's development? Would a qualitative or quantitative approach be more effective? Why?

4. What would be the advantages and disadvantages of the company devolving or outsourcing operational and administrative HR functions? What should Gemma recommend and why?

This business report takes into consideration business acquisition as well as company’s plan for the year to come. Gemma, the HR manager of Wordsmith acquired Mainly Books which has 18 stores all across the globe. It was seen that, Mainly books struggled to have a competitive edge amongst the various major players and has inquired losses for the past three years. The acquisition of Mainly Books was considered to be as a strategically fit and become one of the leading book sellers worldwide.

Once the acquisition was done, various HR issues such as overstaffing, inappropriate balance between full time & part time workers, no separate HR functions are seen at Mainly Books, important employment issues are taken care by the store managers, payroll and recruitments functions are referred to as additional functions, no information management system makes it difficult for the employees to track the performance of the same.

Some of the legal issues which shall be kept in mind by Gemma while designing the redundancy process have been listed in this section of the business report.

Redundancy refers to the process of not using the duties of a particular employee in the organization. Once the position becomes redundant, the employee would either be referred to as retrenched (loses its job & not offered another) or redeployed (provided another job).

Some of the legal issues which shall be kept in mind by Gemma while designing the redundancy process have been referred as follows:

  • Consider various options & plan ahead: The first thing to be kept in mind while considering some positions to make redundant are the skills that are least required & what is required in the future to come. Redundancy is done for genuine reasons & the employer shall cat reasonable while doing the same (Ehrenberg, MacSherry, Sánchez & Sayej, 2010).

  • Use a fair selection criterion: The second legal issue which shall be kept in mind is the use of fair selection criteria. This means that, all the staff members should be kept updated so as to maintain trust & respect by using proper communication methods. It is a very important task to communicate between the employees as well as engage them in day to day chores in the organization (Karlsen, 2009). Proper communication & feedback refers to the key of successful working environment.

  • Consultation with the staff & union members: The third legal issue which shall be kept in mind by Gemma is to hold consultation with the staff & union members. This is made compulsory under the Fair Work Act 2009, that if there are more than 15 staff members to be redundant meetings shall be held & a draft shall be prepared for the same.

  • Choose between voluntary & compulsory redundancies: In various organizations, the employers are required to choose between voluntary & compulsory redundancies i.e. either people volunteer or the employer chooses whom to retrench (Shivarudrappa, Ramachandra & Gopalakrishna, 2010).

  • Prepare the redundant materials: The last legal issue which shall be taken into consideration is to prepare a checklist of redundancy. The employers shall keep in mind that, farewell shall be granted to the employees with respect. Some of the legal requirements which shall be kept in mind by the employers are:

  • Provide a minimum notice period to the redundant employees. It is a legal requirement for the employers to grant notice period unless & until the employer provide payment in lieu to the notice. If the employers do not provide a minimum notice period or insufficient notice period, then it would be regarded as breach of contract or agreement or a workplace agreement.

  • Checklist for redundancy package: Some of the things which shall be taken into consideration while making an employee redundant have been listed as follows:

  • Employment Separation Certificate stating that, the employment is ended & the reason for the same

  • Entitlements to be calculated till the last day listing on what basis the calculations have been done

  • An accurate statement of service

  • Followed by a farewell event

  • Final pay to the employees: On the last of the employment, the employees would be entitled for its final pay. These will include the following i.e.:

  • Outstanding wages

  • Accrued annual leave entitlements

  • Redundancy pay entitlements

  • Tax rules: There are some special tax rules in regards to certain payments at the time of redundancy. One should confirm with the tax officer regarding the eligible termination payments so as to clear all the dues for the employee.

  • Business in Transition Support (BiTS): The Business in Transition Support (BiTS) refers to a program which is designed for businesses that face redundancy & retrenchment.

Alan’s suggestion for targeting people closer to retirement age is not a feasible option. If Alan targets the people who are closer to their retirement age, it will be highly disgraceful. Instead of retrenching them the following measures shall be taken into consideration so as to avoid redundancy. They are as under:

  • Reduction in overtime

  • Allowing the senior citizens to take their long service leave

  • Allowing the senior citizens to take their accrued leaves

  • Reduction in the working hours on board leading to reduction in the pay

  • Stand downs

  • Reduction in the pay

Instead of targeting & removing the senior citizens, Alan shall practice phased retirement. In this type of redundancy, people who are getting closer to retirement shall be asked to reduce their working hours in progressive stages. This means that, with time the employees phase out into permanent retirement (Wilkinson & Kannan, 2013). For instance, the employee shall reduce its working days from 5-4 per week then after a year to 3 weeks and so on. With the number of working days getting reduced, the working hours shall also be reduced. Along with flexible working hours, work from home can also be one of the options to retain the employee as well as practice redundancy in future.|

Ways in which Gemma shall configure the HRIMS to provide useful data about the company’s workforce have been discussed as follows:

How should Gemma configure the HRIMS to provide useful data about the company's workforce?

2. Gemma should configure the HRIMS to provide useful data about company’s workforce. HRMS configuration with workbench shall be practiced by Gemma to provide useful data about the company’s workforce. Some of the added features with HRM configuration are:

  • Support the documents

  • Link directly to online training

  • Track or configure the related activities

  • Link to the latest release via The Oracle Support System

With the HRIMS, each business organization will be able to reflect the data, policies & processes. With the help of Oracle HRMS, seven functional areas are taken into consideration such as:

  • Payroll process management

  • HR information system

  • Talent management

  • Compensation management

  • Payroll processing

  • Time management

While starting with the configuration process, the first step is to decide as to what type of organization it is, based on the type of organization, the configuration model shall be selected. The models are as follows:

  • Single operating company in one country

  • Single operating company in multiple country

  • Multiple operating company in one country

  • Multiple operating company in multiple country

The models mentioned above will help the organization to meet the management as well as reporting requirements. By configuring with workbench, jobs can be defined in a well- organized manner. While defining the jobs, a detailed capability of the position can be done so as to represent the primary working roles of the positions. A unique structure shall be defined to the person in the post as well as the specific department it belongs to (Sekhri, 2010). Once the work has been defined, a proper structure for managing the payroll, compensation, benefits, etc shall be done. On the workbench home page, plan design of Oracle HRIMS Compensation and Benefits guide is to be created, salary & grade related pay shall be planned so as to maintain the grade structure. Once the organization defines a framework using a configuration Workbench, the organization can start with the proper management of payroll, compensation benefits, etc. Once the details regarding the payroll is managed via configuration workbench the full employee details, existing benefits enrollments, etc can be loaded.

The workforce data reports should the system generate have been defined as under. They are as follows:

  • HRIMS Administration

  • HRIMS Training Management

  • HRIMS Recruitment

  • HRIMS Compensation & Benefits

  • HRIMS Workforce Budgeting

  • HRIMS Workforce development & performance

  • HRIMS Workforce Costing

  • HRIMS Workforce Utilization

  • HRIMS Workforce Separation

  • HRIMS Workforce Productivity

  • HRIMS HR Reports

    3. The HR planning process: The HR planning process which would be appropriate at this point in the company’s development has been described in the following three stages i.e.:

  • First Stage: In the first stage of HR planning process, an effective ground work takes place. In this stage, the organization recognizes the HR department as a business partner as well as provides various avenues to act in a proactive manner. In this step, the HRM strategic steps are identified so as to formulate a business strategy. The business strategies might be the generic ones such as cost reduction, innovation & enhancement of the quality, employee satisfaction, and lack of motivation (Reichel &Lazarova, 2013).

  • Second Stage: The second step takes into consideration the various steps in the implementation of the HRM systems. The various HRM systems shall be taken into consideration such as training & development of the employees, performance management, conflict management, compensation, etc.

  • Third Stage: The final stage of the HR planning stage at wordsmith shall cater to the effectiveness of the HRM systems. The alignment of the various HRM systems with the business strategy shall contribute to the HRM systems in achieving the various HRM strategic objectives. It has been seen that, evaluation of the HRM systems is referred to as one of the most difficult tasks as most of the organizations are unaware i.e. what do they want, what are their expectations, efficiency of the HR processes, employee productivity, improved performance of the employees, etc (Quartey, 2013).

In HR planning process, both qualitative & quantitative approaches are effective to track the various day to day activities. Quantitative data are based upon the various statistics & qualitative takes into consideration the casual observations. With the help of both qualitative & quantitative approaches one can easily identify the various issues which impact the organization in a negative manner. Businesses use various quantitative data to gather information which would help to track the productivity of the same, such type of data can be utilized to rank the employees as well as provide ranks to the employees & promote the same. The quantitative data can also be used by the organizations to terminate the poorly performing workers. On the other hand, qualitative data refers to the observations done by the people working in the organization. Qualitative data such as recording one’s behavior, work habits, how a particular worker tackles the various obstacles to perform effectively. In most of the cases, both the quantitative & qualitative reports might be contradictory (McLaughlin & Mott, 2010). Therefore, both the reports shall be taken into consideration to come to a valid conclusion. There are cases where in based upon one of the reports, the individual is a hardworking worker whereas based on the other report the character of the employee is ruined. Hence, both the reports shall be studied carefully to make the HR decisions.

In any organization, the Human Resource department is required to perform a variety of functions. The main functions performed at the HR department are payroll decisions, tax filiation, employee benefits & medical benefits. In organizations which are in their first stage of development are unable to perform certain comprehensive tasks. Hence, in the initial stages of development HR department tends to outsource certain functions.

The advantages & dis-advantages of the company developing or outsourcing operational and administrative HR functions have been listed in this section of the report. They are as follows:

Advantages:

  • Cost savings: The first & foremost reason for any organization just like wordsmith outsourcing the HR department is due to the cost factor associated with the same. Outsourcing helps the HR department to reduce its costs by creating a nonrevenue back office expenses. A fully functional HR department requires an office space & highly trained officials. In the initial stages of development, small businesses find it feasible to outsource the HR function rather than use a large space of the office to create a new department (Glaister, 2013).

  • Development of the employee: Outsourcing the HR functions will help wordsmith in the development of the employee at large. The outsourced HR officials ensure that, the employees comply with the plans & policies lay down by the firm. The outsourcing firm monitors the performance of the employees periodically so as to see check their capability.

  • Risk management: Outsourcing some of the human resource activities help to minimize the risk at wordsmith. It has been seen that, employment & labor laws change regularly hence; it is quite a difficult task for the employees to stay abreast with the same. Outsourcing firms hire various HR personnel who stay abreast on various state & federal laws (Davis, 2012).

  • Efficiency: In order to maintain an effective & efficient workforce a productive workplace is critical. With the help of an advanced HR technology, outsourcing employees streamline the various HR functions such as payroll, employee benefits, performance management. With the help of an outsourcing team, it spends less time paper work and more time in improving the effectiveness of the employers (Bell, 2012).

  • Focus: Majority of the companies outsource their HR departments so as to get rid of the various distractions and concentrate on the core competencies itself. It is referred to as one of the most profitable options for start-up firms. With the help of outsourcing, the owners of the organization will not be concerned about certain time consuming tasks such as maintaining payrolls rather he or she can concentrate of marketing or sales activities.

Dis-advantages:

  • Poor performance: It has been seen that, most of the companies outsource their HR department to reduce costs. But, in order to reduce the cost the decreased quality of performance is provided by the outsourced party. The HR department takes into consideration the day to day activities any poor performance by the outsourced party might lead to a negative impact for the organization as a whole (Brown, 2010).

  • Recruitment problems: In most of the cases, the outsourced party is unaware regarding the culture of the organization and the need of the same. Therefore, while recruiting the employees due to lack of understanding a wrong or an inappropriate candidate might be recruited which does not match the requirement of the organization. The success of the organization totally relies upon the performance of the employees, if the employees are not capable enough they will affect the overall culture of the organization.

  • Loss of control: After outsourcing to a provider, executives might give too much control to the company’s HR functions. Too dependency & loss of control might create problems for the organization if outsourcing is no longer available with the company (Ben-Hur, 2013).

  • Information leaks: Outsourcing the HR departments function might lead to leakage of certain sensitive information of the organization. For any outsourced company to work in favor of the organization, some sensitive information is to be provided such as structure of the company, information of the product or service, etc (Baker, 2013).

    3. Recommendations:

Some of the recommendations for Gemma have been listed in this section of the report. They are as follows:

  • Gemma shall prepare a separate HR function which will take into consideration various aspects such as Payroll, managing performance of each employee
  • Gemma shall opt for a Human Resource Information Management System (HRIS). This will help the HR manager to have a detailed report of each & every employee
  • Proper HR planning process shall be followed while taking the most important decisions within the organization

References

Baker, T. (2013). The end of the performance review. Basingstoke: Palgrave Macmillan.

Bell, M. (2012). Book reveiw: Equality: The New Legal Framework. Social & Legal Studies, 21(1), pp.141-144.

Ben-Hur, S. (2013). The Business of Corporate Learning. Cambridge: Cambridge University Press.

Brown, P. (2010). The power of HR outsourcing. Strategic HR Review, 9(6), pp.27-32.

Davis, D. (2012). M&A integration--how to do it. Chichester, Sussex, UK: Wiley.

Ehrenberg, J., MacSherry, J., Sánchez, J. and Sayej, C. (2010). The Iraq papers. New York: Oxford University Press.

Glaister, A. (2013). HR outsourcing: the impact on HR role, competency development and relationships. Human Resource Management Journal, 24(2), pp.211-226.

Karlsen, E. (2009). Complementary protection for asylum seekers - overview of the international and Australian legal frameworks. [Canberra]: Parliamentary Library, Dept. of Parliamentary Services.

McLaughlin, V. and Mott, C. (2010). Leadership brand equity: HR leaders' role in driving economic value. Strategic HR Review, 9(4), pp.13-19.

Quartey, S. (2013). Implications of HR Outsourcing for HR Practitioners Work Behaviors: Evidence from the Mobile Telecommunication Industry in Ghana. International Business Research, 6(11).

Reichel, A. and Lazarova, M. (2013). The Effects of Outsourcing and Devolvement on the Strategic Position of HR Departments. Human Resource Management, 52(6), pp.923-946.

Sekhri, A. (2010). Human resource planning and audit. Mumbai [India]: Himalaya Pub. House.

Shivarudrappa, D., Ramachandra, K. and Gopalakrishna, K. (2010). Human resource management. Mumbai [India]: Himalaya Pub. House.

Stop bullying at work: strategies and tools for HR and legal professionals. (2010). Choice Reviews Online, 47(10), pp.47-5747-47-5747.

Wilkinson, T. and Kannan, V. (2013). Strategic Management in the 21st Century [3 volumes]. Santa Barbara: ABC-CLIO.

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