Section B
[13]
Question 3
The financial sector is the third 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 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. I suppose it is about what you do and
howyou get rewarded. I think that's where fairness becomes important-howyou 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 acknowledges 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 career development and for bonus payments.
Performance management, however, has the potential to be subjective because it deals
with judgments. For instance, when a superior who acts as an appraiser or reviewer does
not believe or does not get along with staff, it may somehow affect employees'
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