Cannington Remuneration Policy Investigation.
The organisation studied for the purpose of this investigation is Broken Hill Proprietary / Limited (B.H.P.). B.H.P. is Australia’s largest company and was ranked 125th on the fortune global 500 list of the worlds largest industrial companies in 1993. The company was incorporated in 1885 and began mining silver , lead and zinc at Broken Hill in NSW
Cannington is BHP’s latest mine which is still yet to officially open, the mine was a Greenfield site discovered in June 1990. BHP is currently evaluating a world class silver lead and zinc deposit located in Cannington near McKinlay, North Queensland The company currently hold a mining permit for 7660 hectares in the area, it is estimated to be the largest silver mine in the world.
The general context of the policy is focused on the change of attitude between management and staff on the Cannington site and the out come of the specific remuneration policy will hopefully be to attract and retain a good team of employees in order to recognise the value of the BHP workers and to extract maximum wealth from Cannington silver, lead and zinc deposits.
By undertaking this investigation I hope to achieve a better understanding of the remuneration policy and how and why the policy was changed in the beginning of the Cannington project. I will also hope to achieve an understanding of future direction.
To complete this investigation I will use information about the previous and current remuneration policies related to previous projects completed by BHP. I will also investigate, the pressures involved to inspire the Human Resource Management Department to change the policy, the new policy, and the desired effect the change is designed to have on the current mining site. I will also explain the effect the remuneration policy will have on structures and the effect it will have on activities of the business as well as the evaluation process used by the management to ensure that these policies are working.
I have obtained this information from a lecture given by Glenn Morrow the manager of the Human Resource (H.R.M.)Dept. at BHP. Mr Morrow gave a speech on the organisation in which I am investigating and also on the Cannington site in particular . He achieved this by using overhead transparencies showing the objectives of the Cannington site, we were also given a copy of all of the overhead transparencies in the form of a booklet.
The specific human resource management policy prior to change was effective in order for past projects, but Cannington is different to all previous sites such as BHP Manganese, BHP Iron Ore and BHP Australian Coal which were all examined and were not approved because these previous policies were based on people living close to the workplace. The second major reason these previous policies were not approved is because in the case of Cannington B.H.P is the provider of transport, social recreation, and all meals because Cannington has no local community as it is five hundred kms from the nearest town. The old policy states that there is a base pay, site allowances depending on the danger in the particular environment and for the inconvenience of being away from home, shift allowances for evening and night shift workers. Bonuses for meeting deadlines such as monetary and leave aiding, and annual leave pay outs vary depending the value of the employee these bonuses for a valued member of staff can include transport and accommodation paid holidays for contractors as well as officials and families of these people.
Management perspective’s on pressure for change in the Human resource management policy include. All established remuneration policies are based on people living close to their work place. All of the workers live at least five hundred kilometres away from Cannington therefore it is impossible for workers to rely on personal transport to arrive at work promptly in the early hours of the morning to start work. In response to the pressure B.H.P. has supplied a twenty seater plane for transportation to assist in the commuter "Fly In Fly Out" operation, which is free of charge to employees, on condition of this is that all workers must work for fourteen days whilst working twelve hour shifts in a twenty four hour mine and living on the Cannington site before being flown back to Townsville. The employees will live in the companies newly built motel style bed sitter apartments which are located five hundred to one thousand meters from the under ground mine. At the end of the fourteenth day the workers return home for seven days break before the next shift begins and the same procedures take place. Meals are supplied daily in a common dining room B.H.P. ensures that employees will be as comfortable as possible and taken care of .
Another pressure involved is remoteness, workers wanted stability in their wage and BHP wanted to attract the best so annual pay is offered to employees, this makes situations such as self-sufficiency for employees and the families of employees possible, it also motivates workers to stay on the work force because it is an aim of B.H.P. to promote flexible and multi skilled employees who are in the long term valued as an asset to the company, the employees that are multi skilled are also eligible to higher pay according to specific qualifications. Multiskilling is important for all organisations because if for any reason staff is short their would be a loss in productivity and costs of re-hiring when interviewing takes place. Team pay will also be implemented for team ideas, team solutions, routine and rise in production.
The evaluation of the comprehensiveness of the policy takes into account the polices impact on other areas of the human resource management policy within the organisation, such as Occupational Health and Safety. The Occupational Health and Safety policy states that every six months all employees must stand a blood test to ensure that he or she is not being over exposed to lead or any other toxins in the air. If the employee is proved to being over exposed they will be classified as being unfit for mining conditions in the interest of their own health and according to company standards, the employee who is over exposed will be redeployed or relocated to another task at the companies expense
The evaluation policy also looks at training . Training is a compulsory company objective so that workers are properly made familiar with any new or updated equipment or technology and so that miltiskilling can be enforced in the workplace.
By enforcing multiskilling in the workplace all workers will be more aware of their surroundings and in term more responsible for their designated areas of labour.
The hiring policy has also been evaluated in the sense that BHP will from now on only require people with practical experience not just qualifications in the field, these employees that are recruited will be paid accordingly to their practical experience. This will ensure that multiskilling becomes an easier part of training and will in term increase productivity and the effectiveness and punctuality of the tasks in hand and this is reflected in the remuneration policy.
A specific area of change to the remuneration policy includes the Activity structure which includes facilities for employees, such as a twenty five meter Swimming Pool, Volleyball Court, six hole Golf course and Cable TV The site is also equipped with Bed sitter style apartments and a dining and meals area with a separate wet area where alcohol is provided in moderation.. This is only what has been built so far, actual use of the mine by employees in mid October will determine what other facilities are to come. As result to the on-site contracts given to employees there is a change in structure, B.H.P. will provide a counselling service to deal with stressed employees and also to deal with the families of employees who are struggling with out their spouses. This service will be beneficial if it is necessary and the service will be free of charge. Another change in structure includes that BHP has included a Transport Co-Ordinate to their staff list, this person will ensure the Fly In Fly Out program runs according to plan.
The response of the remuneration policy for the Cannington site has uncovered that the policy is expected to be highly successful in its new areas. The employee survey (will be distributed every six months).
BHP prides its self on its three main goals Attraction- the ability to grow and use skills to achieve a high outcome, Retention- the ability to retain employees for the welfare of the employee and interim the welfare of the organisation, if BHP is able to retain at least ninety five percent of their employees this area of the policy will also prove the policy successful ; and Motivation- the individuals understanding of the organisation and their contribution to team work.
The policy response will also take note in the future of the productivity rate of the steel being mined. The results will be compared to the average figures and figures compared with competitors. If the policy is effective it should show a higher productivity rate compared to the competitors, if the policy is not working the productivity is expected to be at or below average. If the productivity rate reduces by over five percent the policy will be a failure, in this case BHP will ensure that employees in the area of fault will be required to attend extra training and the policy will be reviewed thoroughly.
If the policy is taking effect and the majority of people are happy this will be clear because the Unions will not have much to say.
Due to the change of the remuneration policy, people will work as part of the body of the organisation, the employees will determine what the site is lacking and what has to be evaluated, they will be given this opportunity with evaluation surveys which will be distributed and carefully evaluated and considered once returned, these surveys will consider work, recreation and living necessities. The experience and the evaluation of surveys will benefit in the long run as the structure of the Cannington site will improve in productivity and living standards. The plans on the site can also possibly be used as a model for future projects. The evaluation is expected to be successful because suggestions and opinions are in writing and not just word of mouth they are better recognised. As result of these surveys employees and their families can feel more stable knowing that their problems have been addressed formally by the management team. If ninety five percent of the employees return a positive opinion (as expected) this will indicate job satisfaction and the policy a success.
At the moment BHP maintains a fast growing production rate, and expects to keep on doing so. In the future I believe the changes will be made in the area of rewards. Rewards will be offered to those who perform at a worthy standard and for lengths of
service for the organisation. Annual welfare should also be offered to those who perform above this company standard. In the future BHP will at some stage have to introduce rewards and bonuses for targets met in the productivity and production line these rewards and bonuses could include annual airfares or other rewards. If these introductions do come in to action, BHP will need to employ more staff as the mine expands.
In every organisation there is room for improvement, and BHP is no exception to this.
I believe that the likely future responses to the current Remuneration policy will indicate that the policy is one of well being and will indicate a positive direction in recruiting employees and the position BHP holds on the rich list.
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