BSBHRM505 Manage remuneration and employee benefits
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4.BSBHRM505Assessment1Learner.docxBSBHRM505 Manage remuneration and employee benefits
(Present options)
Submission details
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Students Name |
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Student ID |
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Group |
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Assessor’s Name |
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Assessment Date/s |
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The Assessment Task is due on the date specified by your assessor. Any variations to this arrangement must be approved in writing by your assessor.
Submit this document with any required evidence attached. See specifications below for details.
Performance objective
Demonstrate the skills and knowledge required to analyse strategic and operational plans in order to present remuneration and benefit options to management.
Assessment description
Develop tworemuneration and benefits strategy options based on information provided in the Exclusive Foods case study.
Procedure
1. Review the Exclusive Foods case study.
2. Review information provided in your Student Workbook and other reference materials as required.
3. Complete a written report detailing two remuneration and benefits strategy options that will provide for the needs of Exclusive Foods.
4. Ensure all areas detailed in the quality specifications below are included in the strategy.
Note: Assessment Task 2 builds upon the strategy options developed for this task. Ensure that you adequately save and retain your work for further use in Assessment Task 2.
Specifications
You must provide:
· a written report using Microsoft Word.
Your assessor will be looking for:
· the strategic goals of each remuneration strategy
· the features of each remuneration strategy
· factors have been taken into consideration in regards to current practice and possible developments in the market and legislative parameters including:
· short-term business needs
· medium- to long-term considerations.
· explanation of the features of each option and comparison of the:
· strengths and weaknesses of each option
· advantages and potential disadvantages to Exclusive Foods of each option.
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Candidate: I declare that this work has been completed by me honestly and with integrity and that I have been assessed in a fair and flexible manner. I understand that the Institute’s Student Assessment, Reassessment and Repeating Units of Competency Guidelines apply to these assessment tasks. |
Signature: ___________________
Date: ____/_____/_____ |
Case study: Exclusive Foods
Welcome and Introduction
Welcome to Exclusive Foods
You have just been appointed to our management team as Human Resources Manager.
· Exclusive Foods operates a chain of 17 retail outlets in NSW.
· Exclusive Foods has grown from a small family business started in the 1970s to a business employing around 350 people.
· Our corporate office is in Sydney, NSW. All administrative functions including sales planning, operations management, financial management and human resource management are conducted at these premises.
· Each of the 17 stores has a manager appointed to run the day-to-day operations of the business.
General background
Exclusive Foods has undergone many changes in the past ten years and particularly in the past three years. Rapid expansion from the Sydney metropolitan region to larger regional sites such as Newcastle, Wollongong, and Bathurst has characterised the changes occurring in recent years.
Exclusive foods cater to a niche market looking for highquality fresh and organic foods and ingredients not found in traditional supermarkets. Each store offers a high level of service with staff available to assist customers select the finest meat, produce and dry goods on the market. The stores also stock high-end cookware and utensils, cookbooks and wine.
We have always had a strong operational focus which has helped the business to grow, not only in size but in reputation and profitability. This growth, which has been our strength, has also raised our awareness that we may be failing to adequately consider the ‘people’ side of the business.
In the past two years, Exclusive Foods has faced growing pressure from competitors who are entering the market. We believe our product, pricing, marketing and administrative systems are suitable and competitive, however we are aware that attracting and retaining qualified staff has become more difficult.
Your management of the HR function will be a critical factor which determines whether or not we achieve our goals.
Staff turnover statistics and exit interview data indicate that staff feel dissatisfied with their remuneration and benefits packages and are consequently leaving the company for employment which offers them greater rewards. This is perceived as a threat to Exclusive Foods on a number of levels.
Firstly, increasing competition in the specialised food business has led to greater employment opportunities, particularly for skilled workers such as retail managers, accounting personnel and experienced senior sales personnel.
Secondly, Exclusive Foods has built its reputation by having staff that are highly trained in product knowledge and wines. This degree of product knowledge takes many months to develop and is what differentiates us from our competitors.
The directors feel it is imperative that we take a fresh approach with regard to our people management so that we can position ourselves as an employer of choice to attract the most qualified personnel.
The planned expansion of the company will require a strong and loyal workforce and your role is to review our current situation and make recommendations for improvement.
Other considerations
Financial analysts have predicted an economic downturn in two to three years based on local and global trends.
The directors are concerned that Exclusive Foods may not be prepared for the impact this might have on the business and the achievement of its strategic goals.
Exclusive Foods – Goals and objectives
The senior management team has developed a five-year plan for the growth of the business. This plan incorporates both strategic and operational plans.
Strategic plan
Exclusive foods will increase its market share and profits by expanding operations into Victoria and the ACT over the next five years.
Our vision
Exclusive foods will be a one stop shop for high quality food, and cooking needs with an exclusive range of products for gourmet cooks.
Our mission
Exclusive foods will be the retailer of choice for customers seeking the best quality and range of food, wines and cooking supplies not available in traditional supermarkets.
Operational plan
Specific objectives:
1. To implement remuneration and benefits plan to meet the needs of the employees in line with current market rates and conditions, organisational policies and legal requirements within the next six months.
2. To open an Exclusive Foods Store in Canberra within 12 months.
3. To open an Exclusive Foods Branch in Melbourne by within 18 months.
4. To increase net operational profits by 7% within 24 months.
Action plan for specific objective 1: Improve remuneration
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Action |
Accountability |
By when |
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Review current remuneration and benefits plan. |
HR Manager |
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Consult with employees to identify satisfaction levels/areas of dissatisfaction. |
HR Manager |
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Consult with Finance Manager on organisational requirements relating to labour costs. |
HR Manager Finance Manager |
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Consult with senior management to clarify their expectations. |
HR Manager Senior Management Team |
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Undertake a market rate survey to identify industry standards. |
HR Manager |
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Review legislative requirements relating to remuneration and benefits. |
HR Manager |
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Review performance management system and how remuneration and benefits are aligned. |
HR Manager |
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Develop a remuneration and benefits strategy. |
HR Manager |
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Present options to the senior management team/board. |
HR Manager |
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Amend as necessary to meet organisational policies. |
HR manager |
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BSBHRM505 Manage remuneration and employee benefits
BSBHRM505 Learner Instructions 1
Version 1.0 Page 1 of 10
Organisational structure
BSBHRM505 Manage remuneration and employee benefits
BSBHRM505 Learner Instructions 1
Version 1.0 Page 6 of 6
Current remuneration and benefits
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Position |
Salary/Wages |
Benefits |
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Managing Director |
$200,000 P/A Salary Employment contract |
$5,000 for every 1% increase net profit over budget (capped at $50K P/A) Fully maintained company vehicle for sole use. |
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Finance Manager |
$120,000 P/A Salary Employment contract |
$2,000 for every 1% increase net profit over budget (capped at $30K P/A) Fully maintained company vehicle for sole use. |
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Operations Manager |
$120,000 P/A Salary Employment contract |
$2,000 for every 1% increase net profit over budget (capped at $30K P/A) Fully maintained company vehicle for sole use. |
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Marketing and Sales Manager Human Resources Manager Food Quality Manager |
$95,000 P/A Salary Employment contract |
No performance-based incentives or benefits. |
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Store Managers Buyers |
$70,000 P/A Employment contract |
$500 for every 1% increase net profit over budget (capped at $25K P/A). |
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Training Manager Compliance Officer Accounts Manager |
$70,000 P/A Employment contract |
No performance-based incentives or benefits. |
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Payroll Officer |
$850.00 per week |
As per entitlements under the Clerical and Administrative Employees (State) Award. |
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Payroll Clerk |
$770.30 per week |
As per entitlements under the Clerical and Administrative Employees (State) Award. |
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Retail Sales Assistants |
$580.26 per week |
As per entitlements under the Shop Employees (State) Award (AN120499-NSW). |
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Profit and Loss |
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Exclusive Foods Pty Ltd |
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For Year Ending June 30, 2009 |
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(all numbers in $000) |
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Current month |
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Year-to-date |
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Amount |
% of Sales |
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Amount |
% of Sales |
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Revenue |
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Gross Sales |
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$500 |
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$2,500 |
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Less Sales Returns & Allowances |
200 |
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500 |
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Net Sales |
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$300 |
100% |
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$2,000 |
100% |
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Cost of Sales |
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Beginning Inventory |
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$350 |
117% |
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$240 |
12% |
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Plus Goods Purchased/Manufactured |
120 |
40% |
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900 |
45% |
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Total Goods Available |
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$470 |
157% |
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$1,140 |
57% |
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Less Ending Inventory |
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360 |
120% |
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360 |
18% |
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Total Cost of Goods Sold |
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$110 |
37% |
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$780 |
39% |
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Gross Profit (Loss) |
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$190 |
63% |
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$1,220 |
61% |
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Operating Expenses |
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Selling |
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Salaries & Wages |
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$35 |
12% |
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$130 |
7% |
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Commissions |
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12 |
4% |
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80 |
4% |
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Advertising |
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10 |
3% |
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60 |
3% |
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Depreciation |
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14 |
5% |
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120 |
6% |
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Other |
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5 |
2% |
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30 |
2% |
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Total Selling Expenses |
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$76 |
25% |
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$420 |
21% |
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General/Administrative |
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Salaries & Wages |
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$12 |
4% |
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$130 |
7% |
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Employee Benefits |
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3 |
1% |
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31 |
2% |
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Payroll Taxes |
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2 |
1% |
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23 |
1% |
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Insurance |
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2 |
1% |
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1 |
0% |
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Rent |
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12 |
4% |
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23 |
1% |
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Utilities |
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2 |
1% |
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30 |
2% |
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Depreciation & Amortisation |
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1 |
0% |
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16 |
1% |
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Office Supplies |
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1 |
0% |
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8 |
0% |
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Travel & Entertainment |
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2 |
1% |
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4 |
0% |
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Postage |
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1 |
0% |
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11 |
1% |
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Equipment Maintenance & Rental |
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4 |
1% |
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49 |
2% |
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Interest |
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2 |
1% |
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31 |
2% |
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Furniture & Equipment |
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1 |
0% |
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10 |
1% |
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Total General/Administrative Expenses |
$45 |
15% |
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$367 |
18% |
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Total Operating Expenses |
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$121 |
40% |
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$787 |
39% |
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Net Income Before Taxes |
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$69 |
23% |
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$433 |
22% |
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Taxes on Income |
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22 |
7% |
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135 |
7% |
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Net Income After Taxes |
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$47 |
16% |
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$298 |
15% |
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Extraordinary Gain or Loss |
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$0 |
0% |
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$0 |
0% |
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Income Tax on Extraordinary Gain |
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0 |
0% |
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0 |
0% |
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Net Income (Loss) |
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$47 |
16% |
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$298 |
15% |
Employee feedback
Through information gathered from exit interviews, focus groups and word of mouth within Exclusive Foods, the following information has emerged. These are presented in no particular order.
· Retail and clerical workers feel they are underpaid compared to employees doing similar work in other businesses.
· There is no link between hard work and good performance and monetary rewards.
· There are no mechanisms for individuals to negotiate conditions to meet their specific needs – everyone is lumped together.
· Standard pay rates don’t recognise individual experience or ability.
· Family life is ignored – money isn’t everything.
· Training and promotional opportunities don’t really exist.
· Career development doesn’t really happen.
· The company is seen as ‘all profit’ and no ‘people focus’.
· Limited roster flexibility.
· Executives and management have concerns about their packages compared to people doing similar roles in other companies.
· No pay increases except for CPI adjustments have been made in the last three years.
· The company is seen as ‘old fashioned’ and not progressive in the way it manages its people.
· Some employees are unclear about their entitlements to allowances, penalty rates, leave, etc.
· Casual employees don’t see the company as a long-term career opportunity.
Direction from the senior management meeting
As a result of meeting between yourself (the HR Manager) and the Senior Management team, you have developed an understanding of the organisation’s policies, procedures and goals with regards to its remuneration and benefits strategies.
The following points have been made.
General
· Exclusive Foods is aware that it has not addressed the ‘people’ side of the business appropriately in the past.
· As the business grew, focus was placed on keeping costs down and no effort was put into developing remuneration and benefits strategies and plans.
· The major concern in the past was to ensure all legal requirements were met – minimum standards under modern awards.
· No benchmarking or salary reviews have been undertaken.
Future directions
· Exclusive Foods would be open to negotiating an enterprise agreement.
· Senior management are not willing to spend in excess of 19% of sales on wages.
· There is concern about turnover in management levels as well as wages; staff and senior management would like to ensure they are remunerated competitively.
· The company is willing to accept a financial cost for the first year in order to address inequities but would also like to see other remedies or options employed to attract and retain staff on an ongoing basis – not just larger pay rates.
· Senior management are questioning the link between performance management and remuneration and benefits and would like to have a more defined process in place.
· The financial manager has made it clear that the remuneration and benefits plan should take into consideration costs to the business and individuals as:
· Fringe Benefits Tax
· other tax implications – e.g. bonus payments, superannuation payments.
Managing Director
Finance Manager
Accounts Manager
Payroll Officer
Operations Manager
Marketing and Sales Manager
Human Resources Manager
Food Quality Manager
Payroll Clerk
Buyers (5)
Compliance Officer
Accounts Clerks (5)
Store Managers (17)
Retail Sales Assistants
Training Manager
BSBHRM505 Learner Instructions 1
Version 1.0 Page 10 of 10
