Human Resources

Human resources is about a quarter of the HSC course and can be examined in every section. The syllabus focus is the contribution of human resource management to business performance.

• Role of HRM: its strategic role, interdependence with other key business functions, and outsourcing (HR functions and using contractors, domestic and global).
• Key influences: stakeholders, legal, economic, technological, social, and ethics and corporate social responsibility.
• Processes of HRM: acquisition, development, maintenance and separation.
• Strategies in HRM: leadership style, job design, recruitment, training and development, performance management, rewards, global strategies, and workplace disputes.
• Effectiveness of HRM: the indicators used to judge it.

Human resource management (HRM) is managing the people in a business so they contribute as effectively as possible to its goals. Its strategic role is to plan the workforce, its skills and its culture so that they support long-term objectives and give the business a competitive advantage.

Interdependence

• Operations needs the right number of trained workers; job design and technology change what workers do.
• Marketing depends on skilled salespeople and service staff.
• Finance pays wages, on-costs and training, and HR decisions such as reducing turnover save money.

Outsourcing

Businesses can outsource HR functions (payroll, recruitment, training) to specialist firms, and can use contractors instead of employees, either domestic or global (for example offshore call centres or software developers). Benefits: flexibility, specialist skills, lower overheads. Drawbacks: less control and loyalty, loss of knowledge when contracts end, and legal risk if a 'contractor' is really an employee (sham contracting).

Stakeholders

• Employers and employees, whose interests overlap (business success) and differ (costs versus pay and conditions).
• Employer associations: represent and advise employers (for example industry groups and chambers of commerce).
• Unions: represent employees, bargain collectively and support members in disputes.
• Government organisations: the Fair Work Commission (the national workplace tribunal: makes and varies modern awards, conducts the annual wage review, approves enterprise agreements, deals with unfair dismissal and disputes) and the Fair Work Ombudsman (investigates and enforces compliance, educates employers and employees). In NSW, SafeWork NSW regulates work health and safety.
• Society: expects fair and safe treatment of workers.

Legal: the employment contract

The legal framework comes in layers. The NES is the floor: awards, enterprise agreements and contracts can add to it but not undercut it, and an agreement must leave employees better off overall than the award. Common law terms apply to every contract alongside these.

1. Common law: rights and obligations implied into every employment contract. Employees must obey lawful and reasonable instructions, act in good faith (faithfully and honestly), use care and skill, and account for money and property. Employers must pay wages, provide a safe workplace and work as agreed, and reimburse work-related expenses.
2. Minimum employment standards: the National Employment Standards (NES) in the Fair Work Act 2009, such as maximum weekly hours (38 plus reasonable additional hours for full-time employees), four weeks' annual leave, 10 days' personal/carer's leave, 10 days' paid family and domestic violence leave (since February 2023 for most employers), parental leave, public holidays, notice of termination and redundancy pay, and the right to request flexible working arrangements. Superannuation contributions became an NES entitlement in 2024.
3. Awards: modern awards set minimum pay and conditions for an industry or occupation (for example the General Retail Industry Award), made and reviewed by the Fair Work Commission.
4. Enterprise agreements: negotiated collectively between an employer and its employees (often with union involvement). The Fair Work Commission approves an agreement only if it passes the better off overall test (BOOT) against the relevant award and does not undercut the NES.
5. Other employment contracts: individual common law contracts (often for managers and professionals paid above the award), which must still meet the NES and any applicable award.

Recent changes (state the date if you use them): the right to request flexible working was strengthened in June 2023; superannuation became an NES entitlement in January 2024; employees gained a right to disconnect (to refuse unreasonable contact out of hours) from 26 August 2024, extended to small businesses from 26 August 2025; and intentional underpayment of wages became a criminal offence from 1 January 2025. The superannuation guarantee rose to 12% of ordinary earnings from 1 July 2025. From 1 July 2026, employers must pay super at the same time as wages (Payday Super), and funds must receive it within 7 business days.

Legal: work health and safety and workers compensation

Under the Work Health and Safety Act 2011 (NSW), a person conducting a business or undertaking (PCBU) must ensure, so far as is reasonably practicable, the health and safety of workers and others. This includes managing risks (eliminate hazards where possible, otherwise minimise them), safe equipment and systems, training and supervision, and consulting workers. Workers must take reasonable care for their own and others' safety. Since September 2024, NSW law has included an offence of industrial manslaughter for the most serious breaches.

Workers compensation is compulsory insurance that pays injured workers' medical costs and lost wages and supports their return to work. Employers must hold a policy.

Legal: anti-discrimination and equal employment opportunity

It is unlawful to discriminate on grounds such as sex, race, age, disability, pregnancy, marital status, sexual orientation or carer's responsibilities (federal laws such as the Sex Discrimination Act 1984 and Disability Discrimination Act 1992, and the Anti-Discrimination Act 1977 (NSW)).

• Direct discrimination: treating someone less favourably because of a protected attribute.
• Indirect discrimination: a rule that applies to everyone but unreasonably disadvantages a group (for example an unnecessary height requirement).

Equal employment opportunity (EEO) means making employment decisions on merit and removing barriers. Since December 2022, employers have had a positive duty to take reasonable steps to prevent sexual harassment, and employers with 100 or more staff report to the Workplace Gender Equality Agency.

Economic, technological and social influences

• Economic: in a downturn, unemployment rises and businesses cut hours or jobs; in a boom, skill shortages push wages up.
• Technological: automation and AI change the jobs and skills needed, allow remote work and require retraining.
• Social: changing work patterns (more part-time, casual, contract and remote work; the gig economy; workers wanting flexibility and work–life balance) and living standards (expectations of pay and conditions rise over time).

Ethics and corporate social responsibility

Going beyond legal minimums: fair pay throughout the supply chain, safe and inclusive workplaces, attention to mental health and wellbeing. Ethical treatment improves culture, reputation and the ability to attract staff.

• Leadership style: autocratic (the leader decides; quick but can lower morale), participative or democratic (staff are consulted; better commitment and ideas, slower), laissez-faire (staff decide; suits highly skilled, motivated teams). Match the style to the situation.
• Job design: general tasks (varied, more responsibility, more motivating) or specific tasks (narrow, repetitive, efficient but can be boring). Job rotation, enlargement and enrichment add variety.
• Recruitment: internal (promotion or transfer: cheaper, faster, motivating, but fewer new ideas) or external (larger pool, new ideas, but costlier and riskier); seeking general or specific skills.
• Training and development: current skills for the present job or future skills for career growth and change.
• Performance management: developmental (improving skills and planning careers) or administrative (information for decisions on pay, promotion or dismissal).
• Rewards: monetary (wages, bonuses, commission) or non-monetary (recognition, flexible hours, development); individual or group; performance pay (tied to results, such as commission, bonuses, profit sharing).
• Global strategies: weighing costs (lower wages offshore), skills (access to talent) and supply (availability of workers) when locating work around the world.
• Workplace disputes: caused by pay, conditions, job security, change or management style. Resolution: negotiation (between the parties), mediation (a neutral third party helps them reach their own agreement), grievance procedures (a business's formal internal steps for complaints) and courts and tribunals (the Fair Work Commission can conciliate and, in some cases, arbitrate with a binding decision).

Indicators:

• Corporate culture: shared values and behaviours; a positive culture supports performance.
• Benchmarking key variables: comparing HR measures with other businesses or past results.
• Changes in staff turnover: $\text{turnover}=\frac{\text{separations}}{\text{average employees}}\times 100$
• Absenteeism, accidents and levels of disputation: high levels point to poor morale, safety or relations.
• Worker satisfaction: measured by surveys and exit interviews.

Worked example. A clinic employs an average of 80 staff; 6 leave during the year. Turnover $=6÷80\times 100=7.5\%$ If similar clinics average 15%, the clinic is retaining staff well: a sign of effective HRM, and a saving in recruitment and training costs.

• Confusing employer associations with unions, or the Fair Work Commission with the Fair Work Ombudsman.
• Saying an enterprise agreement can pay less than the award or remove NES entitlements.
• Mixing up the processes (what HR does) with the strategies (how it chooses to do it).
• Confusing mediation (the parties decide) with arbitration (the third party decides).
• Quoting laws without dates, or using out-of-date ones ('WorkChoices' and AWAs no longer exist).

• In short answers, a stimulus about a business with high turnover or disputes wants you to diagnose the cause and recommend a matching strategy.
• In the business report, use the effectiveness indicators as your findings, compare them with benchmarks, and link each recommendation to an indicator it will improve.
• In an extended response, evaluate strategies with evidence from a real business, and use current legal facts with dates.

• Operations: job design, technology and retraining, WHS, overcoming resistance to change.
• Marketing: staff as the 'people' element of the service mix.
• Finance: wages and on-costs, the cost of turnover and injuries, performance pay.