SECTION B
(Answer ANY TWO questions for 60 marks)
Question 3
Read the case study below and answer the following questions.
Case study 1: Fairness and Human Resources Management: What do your Employees want?
The financial sector is one of the largest sector in the Australian economy, and the banking industry
accounts for more than half of the financial sector. Financial services organizations depend on their
employees to deliver superior customer service and to maintain successful customer relationships.
Treating employees fairly may lead to the operational success of financial services organizations. Fair
treatment also communicates that organizations are committed to their employees. Employees assess
their work experiences in terms of whether or not organizations show concern for them as individuals
and provide fair treatment. When employees perceive that human resources management (HRM)
decisions and procedures are fair and satisfactory, they can be expected to repay the organization by
forming positive attitudes toward it.
Twenty-nine senior, middle, and lower-level managers from one Australian bank in South Australia were
interviewed. All interviewees had direct involvement with HRM practices in the banking organization.
Interviewees were asked to name those HRM practices in which fairness would be most important.
Options included HR planning, recruiting, selection, compensation, promotion/career development,
performance management, and employee relations. The findings indicated that interviewees perceived
fairness to be most important in three main HRM areas: compensation (44.8 percent), performance
management (27.6 percent), and promotion/career development (27.6 percent).
“Compensation and performance management are areas where fairness is most important because these
two are linked together. | suppose it is about what you do and how you get rewarded. | think that’s where
the fairness becomes important—how you actually reward your people. Performance management goes
hand in hand with compensation and benefits.”
Interviewees claimed that compensation needed to be fair and transparent because employees
perceived that if they were exerting as much effort as others but getting fewer rewards, they became de-
motivated and their performance declined. Employees expect fair remuneration. It helps them to work
better if their organization compensates them according to their contributions and acknowledge them.
Moreover, employees with different needs accordingly should be given different benefits. Interviewees
also considered fairness in performance management important as it affected their opportunities for
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