Cannington Remuneration Policy Investigation. Theorganisation studied for the purpose of thisinvestigation is Broken Hill Proprietary / Limited(B.H.
P.). B.H.P. is Australias largest company andwas ranked 125th on the fortune global 500 list ofthe worlds largest industrial companies in 1993.
The company was incorporated in 1885 and beganmining silver , lead and zinc at Broken Hill inNSW Cannington is BHPs latest mine which is stillyet to officially open, the mine was a Greenfieldsite discovered in June 1990. BHP is currentlyevaluating a world class silver lead and zincdeposit located in Cannington near McKinlay, NorthQueensland The company currently hold a miningpermit for 7660 hectares in the area, it isestimated to be the largest silver mine in theworld. The general context of the policy isfocused on the change of attitude betweenmanagement and staff on the Cannington site andthe out come of the specific remuneration policywill hopefully be to attract and retain a goodteam of employees in order to recognise the valueof the BHP workers and to extract maximum wealthfrom Cannington silver, lead and zinc deposits.Byundertaking this investigation I hope to achieve abetter understanding of the remuneration policyand how and why the policy was changed in thebeginning of the Cannington project. I will alsohope to achieve an understanding of futuredirection. To complete this investigation I willuse information about the previous and currentremuneration policies related to previous projectscompleted by BHP. I will also investigate, thepressures involved to inspire the Human ResourceManagement Department to change the policy, thenew policy, and the desired effect the change isdesigned to have on the current mining site.
Iwill also explain the effect the remunerationpolicy will have on structures and the effect itwill have on activities of the business as well asthe evaluation process used by the management toensure that these policies are working. I haveobtained this information from a lecture given byGlenn Morrow the manager of the Human Resource(H.R.M.
)Dept.at BHP. Mr Morrow gave a speech onthe organisation in which I am investigating andalso on the Cannington site in particular . Heachieved this by using overhead transparenciesshowing the objectives of the Cannington site, wewere also given a copy of all of the overheadtransparencies in the form of a booklet. Thespecific human resource management policy prior tochange was effective in order for past projects,but Cannington is different to all previous sitessuch as BHP Manganese, BHP Iron Ore and BHPAustralian Coal which were all examined and werenot approved because these previous policies werebased on people living close to the workplace. Thesecond major reason these previous policies werenot approved is because in the case of CanningtonB.
H.P is the provider of transport, socialrecreation, and all meals because Cannington hasno local community as it is five hundred kms fromthe nearest town. The old policy states that thereis a base pay, site allowances depending on thedanger in the particular environment and for theinconvenience of being away from home, shiftallowances for evening and night shift workers.Bonuses for meeting deadlines such as monetary andleave aiding, and annual leave pay outs varydepending the value of the employee these bonusesfor a valued member of staff can include transportand accommodation paid holidays for contractors aswell as officials and families of these people.
Management perspectives on pressure for change inthe Human resource management policy include.Allestablished remuneration policies are based onpeople living close to their work place. All ofthe workers live at least five hundred kilometresaway from Cannington therefore it is impossiblefor workers to rely on personal transport toarrive at work promptly in the early hours of themorning to start work. In response to the pressureB.H.P.
has supplied a twenty seater plane fortransportation to assist in the commuter “Fly InFly Out” operation, which is free of charge toemployees, on condition of this is that allworkers must work for fourteen days whilst workingtwelve hour shifts in a twenty four hour mine andliving on the Cannington site before being flownback to Townsville. The employees will live in thecompanies newly built motel style bed sitterapartments which are located five hundred to onethousand meters from the under ground mine. At theend of the fourteenth day the workers return homefor seven days break before the next shift beginsand the same procedures take place.Meals aresupplied daily in a common dining room B.
H.P.ensures that employees will be as comfortable aspossible and taken care of . Another pressureinvolved is remoteness, workers wanted stabilityin their wage and BHP wanted to attract the bestso annual pay is offered to employees, this makessituations such as self-sufficiency for employeesand the families of employees possible, it alsomotivates workers to stay on the work forcebecause it is an aim of B.H.P. to promote flexibleand multi skilled employees who are in the longterm valued as an asset to the company, theemployees that are multi skilled are also eligibleto higher pay according to specificqualifications. Multiskilling is important for allorganisations because if for any reason staff isshort their would be a loss in productivity andcosts 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 thepolicy takes into account the polices impact onother areas of the human resource managementpolicy within the organisation, such asOccupational Health and Safety. The OccupationalHealth and Safety policy states that every sixmonths all employees must stand a blood test toensure that he or she is not being over exposed tolead or any other toxins in the air. If theemployee is proved to being over exposed they willbe classified as being unfit for mining conditionsin the interest of their own health and accordingto company standards, the employee who is overexposed will be redeployed or relocated to anothertask at the companies expense The evaluationpolicy also looks at training .Training is acompulsory company objective so that workers areproperly made familiar with any new or updatedequipment or technology and so that miltiskillingcan be enforced in the workplace. By enforcingmultiskilling in the workplace all workers will bemore aware of their surroundings and in term moreresponsible for their designated areas of labour.The hiring policy has also been evaluated in thesense that BHP will from now on only requirepeople with practical experience not justqualifications in the field, these employees thatare recruited will be paid accordingly to theirpractical experience.
This will ensure thatmultiskilling becomes an easier part of trainingand will in term increase productivity and theeffectiveness and punctuality of the tasks in handand this is reflected in the remuneration policy.A specific area of change to the remunerationpolicy includes the Activity structure whichincludes facilities for employees, such as atwenty five meter Swimming Pool, Volleyball Court,six hole Golf course and Cable TV The site is alsoequipped with Bed sitter style apartments and adining and meals area with a separate wet areawhere alcohol is provided in moderation.. This isonly what has been built so far, actual use of themine by employees in mid October will determinewhat other facilities are to come. As result tothe on-site contracts given to employees there isa change in structure, B.H.P. will provide acounselling service to deal with stressedemployees and also to deal with the families ofemployees who are struggling with out theirspouses.
This service will be beneficial if it isnecessary and the service will be free of charge.Another change in structure includes that BHP hasincluded a Transport Co-Ordinate to their stafflist, this person will ensure the Fly In Fly Outprogram runs according to plan. The response ofthe remuneration policy for the Cannington sitehas uncovered that the policy is expected to behighly successful in its new areas.
The employeesurvey (will be distributed every six months). BHPprides its self on its three main goalsAttraction- the ability to grow and use skills toachieve a high outcome, Retention- the ability toretain employees for the welfare of the employeeand interim the welfare of the organisation, ifBHP is able to retain at least ninety five percentof their employees this area of the policy willalso prove the policy successful ; and Motivation-the individuals understanding of the organisationand their contribution to team work. The policyresponse will also take note in the future of theproductivity rate of the steel being mined. Theresults will be compared to the average figuresand figures compared with competitors.If thepolicy is effective it should show a higherproductivity rate compared to the competitors, ifthe policy is not working the productivity isexpected to be at or below average. If theproductivity rate reduces by over five percent thepolicy will be a failure, in this case BHP willensure that employees in the area of fault will berequired to attend extra training and the policywill be reviewed thoroughly.
If the policy istaking effect and the majority of people are happythis will be clear because the Unions will nothave much to say. Due to the change of theremuneration policy, people will work as part ofthe body of the organisation, the employees willdetermine what the site is lacking and what has tobe evaluated, they will be given this opportunitywith evaluation surveys which will be distributedand carefully evaluated and considered oncereturned, these surveys will consider work,recreation and living necessities. The experienceand the evaluation of surveys will benefit in thelong run as the structure of the Cannington sitewill improve in productivity and living standards.The plans on the site can also possibly be used asa model for future projects. The evaluation isexpected to be successful because suggestions andopinions are in writing and not just word of mouththey are better recognised.As result of thesesurveys employees and their families can feel morestable knowing that their problems have beenaddressed formally by the management team. Ifninety five percent of the employees return apositive opinion (as expected) this will indicatejob satisfaction and the policy a success.
At themoment BHP maintains a fast growing productionrate, and expects to keep on doing so. In thefuture I believe the changes will be made in thearea of rewards. Rewards will be offered to thosewho perform at a worthy standard and for lengthsof service for the organisation. Annual welfareshould also be offered to those who perform abovethis company standard.
In the future BHP will atsome stage have to introduce rewards and bonusesfor targets met in the productivity and productionline these rewards and bonuses could includeannual airfares or other rewards. If theseintroductions do come in to action, BHP will needto employ more staff as the mine expands. In everyorganisation there is room for improvement, andBHP is no exception to this.
I believe that thelikely future responses to the currentRemuneration policy will indicate that the policyis one of well being and will indicate a positivedirection in recruiting employees and the positionBHP holds on the rich list. Bibliography:.