And the award goes to…

The Productivity Commission’s (PC) draft report into Australia’s workplace relations framework does not look set to make major changes to the country’s idiosyncratic system of award wages, much to the chagrin of business.

The old saying goes that a good compromise is one that leaves all parties equally unhappy.

And by that yardstick the PC would appear to be on track – with unions preparing to protest planned cuts to Sunday penalty rates, and growing frustration among employer groups over minimal changes to the country’s complex wage awards system.

The commission’s highly-anticipated, 1000-page draft report into the workplace relations framework was released in August and received a lukewarm response all round. But this muted reception crystalised into more strident criticism from employer groups, who had hoped to see the review tackle Australia’s system of 122 awards.

The Business Council of Australia, which initially welcomed the draft, has been outspoken in calling for greater change. In late August BCA chief executive Jennifer Westacott issued a call to action in a strongly-worded speech at Sydney University1. Westacott said the PC had put awards in the too-hard basket and urged a re-think before the final report, due in November.

“To tell companies … to work around an overly complex, conflict-driven system is simply not a modern, forward-looking proposition,” she said.

The BCA advocates narrowing and eventually doing away with awards – which set out pay rates across 122 different work areas – in favour of economy-wide rates for casual, overtime, penalty and shift work.

The commission’s draft report acknowledged Australia’s award system was idiosyncratic but said it was necessary to set benchmarks against which the relative fairness of enterprise bargains and individual contracts could be measured.

BCA’s Ms Westacott also criticised the enterprise bargaining system, which she said resulted in some agreements restricting a manager’s ability to mobilise their people.

In a nod to these concerns, the draft report states: “There are grounds for changes to the Fair Work Act to limit the capacity of (workplace) agreements to regulate the use of contractors and labour hire.” 2

But on the whole, the commission’s draft report concluded only minor, rather than major, changes were needed to a workplace relations framework which it concluded was functioning well.

The PC expressed surprise more small businesses were not using individual flexibility arrangements which allow an employee and employer to negotiate bespoke terms and conditions. It concluded many had not heard of them.3

Perhaps of most interest to SMEs is that the PC recognised constraints on small businesses negotiating individual and collective agreements and has floated the idea of a new type of employment contract – the enterprise contract – which could offer more flexibility.

The proposed enterprise contract would sit somewhere between individual flexibility arrangements (which, while versatile, were costly for small enterprise to strike with each staff member) and enterprise bargains (which could be daunting).

The enterprise contract, as proposed in the draft report, would allow employers to vary an award for entire classes of employees (level 1 retail employees, for example) without having to negotiate with each party individually, or to form an enterprise agreement.4

The enterprise contract could be drawn up without input from employees and could be offered to new employees as a condition of employment, with existing employees having the choice of retaining existing conditions or adopting the new contract.

The commission held a series of public hearings around the country in September and was seeking more input from stakeholders on this proposal before delivering its final report, slated for the end of November.

Draft report key findings

  • Australia’s workplace relations system was not dysfunctional but there was room for improvement. The system needed renovation, not a knockdown and rebuild.
  • By global standards, Australia’s labour market was good, with multiple forms of employment agreements providing flexibility and low levels of industrial activity. Nevertheless, the system could be tweaked to stop manipulations, such as aborted or brief stoppages designed to cause administrative headaches for employers. Similarly, unfair dismissal laws needed refining so procedural errors alone did not result in sacked employees being reinstated or compensated.
  • The nature of work had changed, with about a third of Australia’s workforce working a Saturday or Sunday each week. Penalty rates were needed to compensate for working unsociable hours, but they should also reflect changing norms and consumer demand.
  • The Fair Work Commission could be too legalistic in its approach to determining awards – weighing the opposing arguments of lobbyists, rather than collecting its own data. History and precedence was given too much weight. Similarly, the Fair Work Act and the FWC could sometimes put procedure above substance, to the detriment of common sense.
  • Partisan appointment processes for FWC members could lead to inconsistent decisions. A formalised process was needed.
  • So-called greenfields agreements, struck between unions and new enterprise before any employees have been hired, were becoming more common and problematic. The current system could give unions undue power to stall large capital-intensive projects with sensitive timelines. The PC proposed three options if negotiations were not finalised within three months:
    1. Keep negotiating.
    2. Request the FWC arbitrate between the last offers of both union and employers.
    3. Submit the employer’s offer for FWC approval with a 12-month expiry, at which point the business would have hired employees and they can take charge of normal enterprise bargaining.

Key draft recommendations:

    • Sunday penalty rates – that are not part of overtime or shift work – should be set at Saturday rates for the hospitality, entertainment, retail, restaurants and cafe? industries (it is recommended this be done with 12 months’ notice of introduction).
    • The Fair Work Act 2009 should be amended to replace the BOOT (Better Off Overall Test) with a simpler no-disadvantage test for enterprise and individual agreements.
    • An information kit should be prepared and distributed to small businesses to increase awareness of individual flexibility arrangements for staff.
    • An independent panel (established by state and federal authorities) should select a shortlist of candidates for appointment to the FWC. The final appointment would then be made by the federal Employment Minister. The positions of president, vice president, deputy president and commissioner should be five-year terms with the possibility of reappointment after performance reviews.
    • A minimum standards division should be established as part of the FWC to specifically handle minimum wage and modern award reviews.

1 – Kingsley Laffer Memorial Lecture, Sydney University Wednesday August 13, 2015
2 – Workplace Relations Framework, Productivity Commission Draft Report, Australian Productivity Commission, August, 2015, p 34.
3 – Workplace Relations Framework, Productivity Commission Draft Report, Productivity Commission, August, 2015. Page 36.
4 – Workplace Relations Framework, Productivity Commission Draft Report, Productivity Commission, August, 2015. Page 37.

AFG staff donate to support Yarloop community after fires

In a show of support, AFG held a fundraiser allowing staff to generously donate to those who suffered losses in this month’s Yarloop tragedy.

We were very proud to see many staff contributing their baking skills as well as the high level of donations.
AFG will generously match every dollar donated by staff.

You can find information on how you can donate and support?Yarloop residents at?The Lord Mayor’s Distress Relief Fund?website.

Post holiday? How to get your staff and your business back on track

We gather some tips from an expert on banishing back-to-work blues and getting your staff off to a flying start post a long break such as Christmas.

Whether it’s a few days or a few months, breaks such as Christmas can make it difficult to get back into the swing of things when staff return to work. But as a business owner?or manager, how do you get your staff re-focused and engaged without coming across as a whip-cracking killjoy?

Management Consultancy International founder Denise Meyerson said it was important to remember everyone was different and while some staff would return energised and raring to go, others would be dragging their heels. The faster you got everyone back on the same page, the faster your workplace would be back in full swing.

Meyerson’s tips for banishing back-to-work blues are based on psychological research of what drives motivation in the workplace: feeling connected to and valued by colleagues, a sense of regularly making progress towards clear goals and unexpected rewards for performance. At the start of a new year, there are a few practical and simple things all managers can do to hit these triggers, Meyerson said. “It isn’t big budget, and some of it might sound trivial, but it can make a massive difference.”

The first thing Meyerson did for her staff each year was to leave a welcome back gift on every desk. It shouldn’t be expensive – perhaps just a chocolate – but it should be accompanied by a personal note, saying you look forward to a great year in 2016.

The second thing she aimed to do each year was to seek out staff members for an individual welcome back chat. “You’ve got to be a little bit careful about ‘how was your holiday’ because some people might not have had the best holiday season,” she cautioned. “But be a little accommodating of the office chit-chat, instead of just thinking that they have to sit down at their desk, turn on their email and get going.”

Getting staff to reconnect with each other on their return to work was also pivotal. “Just a little morning tea, or order in pizza for lunch – something like that to socially connect people again.” While it was, essentially, a social event, the impact these positive staff interactions could have on commitment and productivity was immense. “If you feel included, you feel more engaged and that, whether you want to or not, makes you feel happier and more motivated to work.”

And lastly, as the start of a new year was a natural time for reflection and goal-setting, it was helpful to reflect on the achievements of 2015 and focus on plans for 2016. “You can do a really nice little retrospective – this is what worked well last year, so here are our priority items for the next three months,” she said. Similarly, if the Christmas break fell in the middle of a long-term work project, a meeting to recap and acknowledge the last year’s progress, while focusing on the next steps would get staff back on task faster.

And when it came to maintaining staff motivation throughout the year, it hinged on regular social interactions – so people felt connected to their workplace – along with clear, achievable short-term work goals.

These goals do not need to be linked to pay or promotions, as the sense of having completed a task was intrinsically motivating. “The sense that they have made progress is the strongest glue you have that binds people back into a workplace.” Interestingly, for those paying the wages, money is not necessarily a long-term motivator.

As Arnold Schwarzenegger once joked: “Money doesn’t make you happy. I now have $50 million, but I was just as happy when I had $48 million.” However silly, there is a grain of truth in the quip. A 2010 study found that once you reach a certain level of income — in this case, an annual salary of US$75,000 – a higher salary did not correlate with any increase in general happiness.

Belinda’s key work motivators

  • Clear expectations: when employees are set clear goals and expectations they function much more effectively. Research has shown that when staff understand what is expected of them, they are better able to operate from the prefrontal cortex area of the brain, which governs complex decision-making and moderates social behaviour. Without clear expectations, the limbic system — which operates on instinct and emotion (such as fear or anger) — takes over.
  • A sense of belonging and connection: fostering respectful social interactions and a sense of camaraderie makes staff feel engaged and committed. When a team environment is not inclusive, or there is open disharmony, performance – and therefore profit – drops.
  • Unexpected rewards: surprise rewards, no matter how large or small, are particularly gratifying and motivating for staff. Make sure you take the?time to celebrate successes. Gratitude can go a long way to keeping staff engaged and motivated, particularly in repetitive jobs without clear career paths. They should always be linked to performance so they feel earned. Employers should aim to under-promise and over-deliver. Doing the opposite can sap morale and motivation.

 

Courtesy Belinda Brosnan, HR Junction

Mortgage Index for the final quarter of 2015

HOMEOWNERS STEP UP AS INVESTORS EXIT

Australian Finance Group (ASX: AFG) has today released its Mortgage Index for the final quarter of 2015.

Investors have continued their retreat from the market with the latest figures showing investor lending had fallen from 40% of total loans processed early in the calendar year to 31% in the last quarter. Gains in both refinancing (36% to 38% of total loans) and upgrader (30% to 35%) categories led to a 7% lift in the total number of home loans processed by AFG for the December quarter compared to the same lending period in 2014.

The figures were led by upward swings in Victoria of 17.69% and New South Wales at 12.23% with a surge in South Australia of 13.41%. These positive results offset a flat market in Queensland at 0.85%, and a decline in the Northern Territory -21.7%, in a comparatively smaller market. WA dipped, -9.55% reflecting a cooling housing market in that state.

AFG General Manager Sales and Operations Mark Hewitt said the final quarter of 2015 painted a fitting picture of the year that was. “2015 was a year of adjustment for both borrowers and lenders. A shift in requirements for lenders set down by regulators saw many changes to lending policy and interest rates resulting in a level of confusion amongst borrowers. This has made the role of the broker even more important for Australians looking to buy homes.

As foreshadowed by AFG’s Competition Index late last month, the number of people keen to fix their loans is on the rise. A long period of low interest rates has many people predicting an upward swing may be on its way in 2016.

As the year drew to a close fixed rate lending lifted by nearly 3% to 14.2% of the product mix. This figure, as a percentage of AFG’s overall volume saw its first increase since the final quarter of 2013.

Download full report: Mortgage Index for the final quarter of 2015

It’s a brand new year, the perfect time to set new business goals

The New Year is a time for reflection and resolutions. But when it comes to setting business goals, make sure you’re not setting yourself up for failure. Most business owners know goals are important. But how can you make sure your New Year business resolution will keep you motivated all year and not be forgotten by February?

HR Junction managing director Belinda Brosnan specialises in helping businesses, owners and managers foster a high-performance work culture. Her approach is based on neuroscience, coaching and helping managers play to their employees’ strengths.

While Brosnan said the New Year was a natural time for reflection and goal-setting, she had a few tips to make sure you were inspired not daunted.

  • BE REALISTIC “You can’t lie to your own brain,” Brosnan said. “So sometimes when people say things like, I’m going to be fit and skinny by March, what your brain does is say, ‘Well, that won’t be happening’,” she said. This resulted in people giving up before they had started because the task felt impossible. Goals should be reframed around making progress, learning or growing. So if you say, ‘I’m going to get stronger and fitter every week,’ that will be something that the brain thinks, ‘You know what, I think I can do that’,” she said. It didn’t mean goals should be vague, or wishy-washy, it just meant they should be aimed at making small regular progressions. For example, growing your business 10 per cent could be reframed as: I will connect with two new business prospects each fortnight. “The key is small and achievable wins,” Brosnan said.
  • THINK SHORT-TERM You may have a long-term goal, but the most effective way to achieve it was to break the journey into smaller steps, Brosnan said. It not only made it seem more achievable?but celebrating each small step along the way motivated you to achieve more. It was human nature, Brosnan said, to leave things until the last minute if you had a distant deadline. “People won’t keep their eye on a goal unless you break it up into regular intervals of things we need to achieve along the way. Shorter time frame focus is a big part of keeping people focused and engaged,” she said. In the same vein, scheduling regular catch-ups with staff members to address any issues or concerns as they arose was much more effective than leaving it until annual performance reviews.
  • TRY A THEME INSTEAD OF A GOAL “Often the goal-setting aspirations of the New Year puts a lot of pressure on people,” Brosnan said. “We often set all these goals and we say we’re going to do it and within a week it’s gone. So one of the things I’d say to people is identify a word or theme for the year that’s really important to you. For example, in my first year working in my own business, my theme for the year was ‘be brave’ and I looked at how that applies to not only my work, but my health, my friendships, finances and relationships. So sometimes those things can be very motivating because they give you a clear focus – that’s the benefit of this process.”
  • INCLUDE YOUR STAFF You may have a goal or vision for your business – but do your staff know about it? Do they understand it? Involving others in your goal setting could have the dual effect of both encouraging you to follow through, together with making others feel ownership of the goal. “For example, I have one client who had some great ambitions for the year, but when we ran a team session, his staff had no idea about some of those plans for the business, ‘‘Brosnan said. “Particularly with small businesses, what I observe is that often the owners are so busy doing all of their planning for the business that they forget to bring their people along for the ride.”
  • CELEBRATE THE MILESTONES “Sometimes we’re so busy and focused on getting the job done, we don’t stop to celebrate our success,” Brosnan said. “We get something done and go straight on to the next thing.” Feeling you are making progress towards a goal is important and marking small achievements on the journey towards your goals helps do this.
  • MAKE IT A GOAL TO GET ACROSS GRANTS It’s easy for a busy business owner to miss some of the grants and assistance packages available to them. New Year is a great time to see what is available and when you need to apply. To help you get across things with minimum effort, the Federal Government operates a Grant Finder search. This links to details of everything from simple packages for free national job advertising, to grants for small business that will directly benefit their local communities. Go to Grant Finder and type in your industry, for example, ‘real estate’ and search grants and assistance packages available to you. You can narrow your search by state, or business area – for example, training, research and development, or loans. In September last year, the government also launched its Open for Business website. It touts the potential benefits for small business, covering off on a raft of Free Trade Agreements Australia has signed in recent years.