Chapter 7 & 8 Questions on Economic and Management

QUESTIONS

 

1.  Define and compare the following types of cost: 

a.  Sunk Cost versus incremental cost

b.  Fixed cost versus variable cost

c.  Incremental cost versus marginal cost

d.  Opportunity cost versus out-of-pocket cost

 

13.  Overheard at the water cooler:  "I think our company should take advantage of economics of scale by increasing our output, thereby spreading out our overhead costs."  Would you agree with this statement ( assuming this person is not your boss)?  Explain.

 

PROBLEM 2

 

Mr. Lee operates a green grocery in a building he owns in one of the outer boroughs of New York City.  Recently, a large chemical firm offered him a position as a senior engineer designing plants for its Asian operations.  (Mr. Lee has a master's degree in chemical engineering.)  His salary plus benefits would be $95,000 per year.  A recent annual financial statement of his store's operations indicates the following:

 

__________________________________________________________________________

 

Revenue                    $625,000

Cost of goods sold       325,000

Wages of workers          75,000

Taxes, insurance,

maintenance, and

depreciation on

building                        30,000

Interest on business

loan (10%)                     5,000

Other miscellaneous

expenses                     15,000

  Profit before taxes     $175,000

______________________________________________________________________________

 

If Mr. Lee decides to take the job, he knows that he can sell the store for $350,000 because of the goodwill built with a steady clientele of neighborhood customers and the excellent location of the building.  He would still hold on to the building, however, and he knows he could earn a rent of $50,000 on this asset.  If he did sell the business, assume he would use some of the proceeds from the sale to pay off his business loan of $50,000.  He could then invest the differenc e of $300,000 (i.e., $350,000 -$50,000) and expect to receive an annual return of 9 percent.  Should Mr. Lee sell his business and go t work for the  chemical company?

In answering this quesiton, also consider the following information.

a.  In his own business, Mr. Lee works between 16 and 18 hours a day, 6 days a week.  He can expect to work between 10 and 12 hours a day, 5 days a week, in the chemical company. 

b.  Currently, Mr. Lee is assisted by his wife and his brother, both of whom receive no salary but share in the profits of the business.

c.  Mr. Lee expects his salary and the profits of his business to increase at roughly the same rate over the next 5 years.

 

CHAPTER 8 QUESTIONS

 

2.  Explain the importance of free entry and exit in the perfectly competitive market.  That is, if free entry and exit did not exist, what impact would this have on the allocation of resources and on the ability of firms to earn above-normal profits over time?

 

9.  "Economic profit" is a theoretical concept used to help explain the behavior of firms in competitive markets.  Suggest ways in which this concept can actually be measured.

 

11.  Explain why a price-setting firm will always set its revenue-maximizing price below the price that would maximize its profit.

 

PROBLEM 2

 

Indicate whether each of the following statements is true or false and explain why.

a.  A competitive firm that is incurring a loss should immediately cease operations.

b.  A pure monopoly does noot have to worry about suffering losses because it has the power to set its prices at any level it desires.

c.  In the long run, firms operating in perfect competition and monopolistic competition will tend to earn normal profits.

d.  Assuming a linear demand curve, a firm that want to maximize its revenue will charge a lower price than a firm that wants to maximize it profits.

e.  If P>AVC, a firm's total fixed cost will be greater than its loss.

f.  When a firm is able to set its price, its price will always be less than its MR.

g.  A monopoly will always earn economic profit because it is able to set any price that it wants to.

What could be certain useful recommendations can you share and or contribute so that the HK travel industry will totally integrate into the internet function base?

HK travel agencies have to keep standards and guidelines of operations through online sites and databases. The need for HK travel agency to set aside traditional means of doing travel agency work but to process and embrace modernism and utilize pc network and internet based activities such as online approval of tourists booking of flights and payments, e-payments to be appropriate. 

Strategic Planning and Implementation of Sony Ericsson

Part 1

Sony Ericsson, its resources and its competencies

 

In 2000 Ericsson and Sony established a London-based joint venture, Sony Ericsson, to exploit the opportunities of third generation mobile systems, whose implementation had begun in Japan. Ericsson's strategies were broadly emulated by its major competitors in the world telecom industry, including Nokia, the Canadian firm Nortel, the US firms Lucent, Cisco Systems, and Motorola, and Germany's Siemens, all of whom had telecom equipment sales in excess of $22 billion in 2000. These firms all moved, although at varying rates, to outsource production to contract manufacturers. They also progressively outsourced innovation to cheaper locations (Wallach 2005).

 

Resources

Sony Ericsson’s resources come from reliable suppliers and manufacturers.  The materials used in creating the products have to agree with the company’s greenheart process wherein most part of the product should be recyclable or harmless to the environment.

 

Financial

The funds can either come from the parent company or from other sources like investors. The budget will be used to pay for the different expenses of the firm. The budget will be used to pay for the rent expenses, the payment for all the employees, the cost of supplies used in creating the products, the cost of electricity, the cost of office materials and other costs or expenses.

 

Human

In providing excellent service to the clients, a company needs to have a dedicated staff that performs well and knows that the service they give to the client can help the company have a positive or negative image. The staff of the company is well trained to ensure that the best service can be given to the clients. The company makes sure that it hires promising individuals that can assist in the company’s task of reaching their goals.

 

Skill

The personnel of the Sony Ericsson are well skilled in creating and selling their products.  The company makes sure that they hire individuals who are skilled in management, manufacturing or selling.  The company also looks for various activities that will help them improve their skill.

 

Competencies

Core Capabilities

 

Sony Ericsson’s core competences include its highly advanced product, competitive products and concept of sustainability. Sony Ericsson makes use of its competences to achieve continuous growth and development

 

Distinct Capabilities

Sony Ericsson’s distinct capabilities include its ability to create products that costs lesser than other cell phone.  The company’s product cost less but it is durable like the other company’s products.

 

Scope

Capabilities

Sony Ericsson’s capabilities include its use of sophisticated technologies to create the best product. Sony Ericsson has commendable personnel that were well trained to create the best product and provide efficient service.

 

5m’s

Money

Sony Ericsson is well funded. The funds of the company come from its profits, capital and from investors. The company makes sure that its finances are well budgeted and will go directly to the division that needs it the most.

 

Minutes

Time is important for the Sony Ericsson. The company gives importance to time just like it gives importance to finances and human resources. The company has organized schedules that will ensure that products can be made at an appropriate time. The company makes sure that every member of the organization has a balance of work and rest.

 

Materials

Sony Ericsson’s materials come from reliable suppliers. The company keeps the materials in reliable storage areas. The company makes sure that its materials will not harm the environment and can still be recycled.

 

Manpower

Sony Ericsson makes sure that it hires the best personnel that have an idea on the cell phones and its related products. The company engages in online recruitment, personal recruitment and the use of third party to recruit and choose the personnel that fit their needs.   The company trains the personnel in accordance with their tasks and role. The company allows their personnel to attend seminars that will increase their knowledge on their forte. The company makes sure that the personnel are given an appropriate compensation based from their role and contribution to the firm. The company makes sure that all social benefits are received by the personnel.

 

Machines

The company makes use of the best machinery to create the products. The company has a research division that searches for the latest technology that will help them achieve efficiency and effectiveness in creating their products.  The machines are well maintained by a special group of personnel. The company makes sure that the machines are regularly checked for problems.

 

Implications on Management

The use of 5m’s makes it easier for the management to operate the firm. The use of 5m helps Sony Ericsson and its management to focus on strategizing and determining what acts will provide benefits to the company.  Through the 5m the management receives assistance in attaining the goals of the firm.

 

Current strategies of the company

The company is focused on the use of sustainable products. Sustainability is said to be the act of maintaining supplies for future generations.  Supplies do have its own limitation; it will run out of stock eventually. Through the use of sustainability companies can make sure that there can be supplies for the present and the future.  Sustainability goes with the need to have green supplies. The company makes sure that it uses sustainable supplies. The company makes sure that its supply will not run out.  The makes sure that the materials they use are recyclable and will not cause damage to the environment. To maintain the sustainability of supplies the firm makes sure that parts can be recycled.

 

Stakeholders

Internal stakeholders

The internal stakeholders of Sony Ericsson include the management of the company, employees and creditors. The Stakeholders’ impact on the governance of the firm is it affects the way the company is managed. It makes sure that the company performs well according to the stake holder’s standards.  The management of the firm is a stakeholder because the company’s success or failure is conjoined with the management’s success or failure.  The employees of the firm are stakeholders because the success or failure of the firm will impact their salary and its increase or decrease. The creditors are stakeholders because they contributed a certain amount that contributes to the financial resources of the company.

 

External stakeholders

The government, clients and potential investors are those groups that are external stakeholders to the company. The government is a stakeholder for the firm because they are the ones that checks if the company follows regulations and laws.  The government also observes for any negative effect for the company’s products. The clients are stakeholders because they are the ones that are affected by any changes initiated by the company.  The clients are the end destination for the product, thus they need to know what stages a product goes through before it reaches them. The potential investors are stakeholders because they observe the financial status of the company and use this as a basis for any transactions that they will do with the company.

 

Stakeholder’s strategy

            The stakeholders provide assistance in running the firm. They give a little feedback on how the firm should operate. The stakeholders give their opinion on the company and the condition it faces.

 

Future strategy for stakeholders

The future strategy for the stakeholder will focus on improving their relationship with the company. This can be done through the use of communication systems that will create a greater bond between the firm and the stakeholders. The communication strategy can be in the form of internet or other online system.

 

Governance Chain

Corporate governance is concerned with holding to account the modern corporation, whether it is a large or small holding company and subsidiaries, listed, private, government or non-profit entity. One influential interpretation of corporate governance is to find a way to maximize wealth creation in a manner that does not impose inappropriate costs on third parities or on society as a whole. Corporate governance application requires a system of checks and balances designed to define appropriately the parameters of authority through accountability (Kakabadse 2001). The following presents the governance chain for the company.

The key players include the stakeholders, board of directors and the employees. The stakeholders, board of directors and employees are the ones that will be affected by any change in management strategy.  Any changes in management strategy can affect the service given to the stakeholders. Any changes in the management strategy can alter the position and responsibility of the management team and the personnel. The beneficiaries of any change in the management strategy include the clients and the government. The clients are beneficiaries because any change in the management strategy can lead to better service to them and it can lead to the emergence of better products.  The government is a beneficiary of the change in the management strategy because they can now make business dealings with Sony Ericsson. The government can ask the company to make products that fits with their communication needs. This in turn can help the government provide better service to their constituents and deal better with outside forces.

 

Principal- Agent Theory

The management and the employees have a principal – agent relationship wherein the managers give fair treatment of the personnel. The managers make sure that the personnel acts as agents of providing service to clients.

 

Employee Unions

Worker Unions are vital because it gives personnel the chance to express his/her concern to other workers. The union can be used for one personnel to have better benefits and compensation from the firm. The management allows for unions and other groups that intend to unite the ideas and concerns of the personnel. The management makes sure that they respect any union that the employee has formed or joined.

 

Sony Ericsson ethics and Social Responsibility

Corporate responsibility is a pact for the mutual benefit between society that needs business for economic and social development, and business that needs a supportive business environment. It is also a pact between capital and management in modern companies, which has been as shaken up by some recent scandals where management disregarded the bond of transparency with shareholders (Dunning 2003).

 

a. within Sony Ericsson

Sony Ericsson has and believes in corporate responsibility. The company makes sure that it follows all laws and regulations in every country they operate in. It has procedures and processes that make sure that corporate responsibility is implemented not only in internal environment but within its suppliers and trading partners. Sony Ericsson gives much importance to their personnel; the company makes sure that the welfare of the personnel is given appropriate attention. 

 

b. what can still be improved

Sony Ericsson can improve its social responsibility by engaging in charitable works such as donation to charity or other non government institutions. They can even create a charity that will focus on a certain market. Sony Ericsson can improve its ethical standards by reviewing its current scandals and adjusting it towards the current situation. 

c. alternatives philosophy

Aside from the use of corporate responsibility and ethics, Sony Ericsson can make use of the fair competition philosophy wherein the company will make use of strategies that will be just and fair. The company will refrain from committing acts that are demeaning to fairness in the telecommunication industry. The company will refrain from engaging in unwanted acts against other cellular phone companies.

 

d. Freedmanism

Freedmanism is the belief in ideas such as Deontology, Utilitarianism, Teleology, Egoism and Ethical relativism. Deontology is the philosophy that focuses on the rightness or wrongness of intentions or motives behind action such as respect for rights, duties, or principles. Utilitarianism is the belief that the worth of an action is determined by its contribution to overall use of that action. Teleology is the belief that things are designed for or directed toward a final result.  Egoism is the idea that people should do that they think satisfies their self interest. Ethical Relativism is the belief that ethical ideas do not reflect objective and/or universal moral truths. All the ideas under Freedmanism relates to different characteristics of the personnel. The limitation of Freedmanism revolves on the contrasting characteristic of each belief under it. Deontology, Utilitarianism, Teleology, Egoism and Ethical relativism each have a characteristic that contrasts the other, the use of it under one philosophy can create confusion and does not help in making one productive and efficient.

 

The management strategy that will be changed

Expanding into additional segments, after reaching an acceptable market share position in the primary market is a prudent option. The common strategy is to penetrate with either line extensions or technology applications. It is an acceptable and logical move for a market leader particularly in a flat market. It's only advisable though if sufficient resources are available to penetrate the new segment and, providing sufficient management attention and resources are available to vigorously protect the primary segment (Paley 2006). The target market of the company involves almost all sectors of the society. The company aims to provide mobile products to young or old, boy or girl. The company as much as possible aims to reach all walks of life. This target market is a good source of income. The company has different strategies that can cater to the taste and appeal of such markets.  The change in management strategy will focus on increasing the market of the company. In increasing the market the company will need to make sure that the stores where its products are located will be in the most profitable places. The distribution stores for the products should be in places where clients can easily see the store and they can be encouraged to visit the store and buy products.  The distribution store should make sure that competition in the location they want to put up the branch will not be too heavy. The market of the company can still be expanded to accommodate the elder people market. The company can consider such clients as a different segment that should receive a different kind of product. They should also provide a different kind of mobile products for such market.

 

Part 2

Tradeoffs

The change in strategy would help the firm gain more clients and increase its income. The change in strategy would help the firm improve its status in its industry. The potential problem with changing the strategy is a situation wherein the firm would lose control over its current markets. The new market would keep the company busy and may cause it to neglect the older markets.

 

Nature of People

 

Purpose

Ambitions and objectives are formulated at three levels. For the long term, guiding objectives are important. For the short and medium term, a system of measurable objectives must be created. Finally, the actual missions are the concrete translation of those objectives to the social players involved (Keijzers 2004).  Communication is a key element of establishing focus, because employees usually perform better and accomplish more when they understand their role and how it relates to the bigger picture (Zwell 2000).   In setting the objective a clear picture of the internal and external environment was used by the firm. The environment showed the firm its weak points or problem areas. Through knowing its weak points the company was able to plan for future possibilities and future plan of actions. After the company knew its weak points it was able to create the objectives by determining the weak points or problem areas that should be given top concern and priority.  The company engaged in constant communication to determine what will be their objectives. To further identify the nature of the objective of the firm the lynch polygon will be used.

Lynch’s Polygon of purpose

Timing

Sony Ericsson’s plan for change should begin as soon as it has enough funds and resources to introduce the change. The company cannot wait for too long before it introduces the change because the new strategy might not fight the future situation.

 

Innovation

Sony Ericsson is one company that has proven its innovativeness through combining cell phones with walkman functionality.  The company can use such innovativeness to create more products that will be accepted by the market.

Value Added

The innovative nature of Sony Ericsson adds value to their products. If the company wants to show that they have value then they need to prove it by creating more innovative products and services.

 

Survival

Survival in the telecommunication industry can be achieved by innovation and the use of appropriate strategies. Sony Ericsson is already innovative, it just needs to make sure that it will use appropriate strategies or make new strategies to continue to survive in a competitive cell phone industry.

 

Growth

One goal of Sony Ericsson is continuous growth. The company has already risen from its humble beginnings but it still wants to reach better heights. To do that the company needs to focus on the new strategy and defend itself against competitive traps.

 

Brand

Apart from each other Sony and Ericsson has created a name for themselves in their respective industries. Together they have become one of the biggest cellular phone companies. With proper use of marketing strategies and the use of unique packaging, the company can still create a more unique brand that can create a huge impact on the cell phone industry.

 

Leadership

Sony Ericsson has good leaders that have guided them from their birth up to this day. The current and former leaders have helped the company make a name for itself in its field.  The leaders of the firm are one reason for its success and they are the ones that can truly guide the company to its objectives.

 

Stakeholders

The stakeholders are a vital group that contributes to the success of Sony Ericsson. Their guidance and assistance have helped the firm achieve its current status. Without the stakeholders the firm will lose its focus and will do things unnecessary for its survival.

 

Value and Lifestyle

The company has achieved its current status because it was able to maintain its value at the same time it introduced new trends that increased its value. The company has achieved a household status and is becoming a need rather than a want.

 

Knowledge

Sony Ericsson values the gathering and use of knowledge.  The company makes sure that through its research and development division it gathers the data that it needs to survive its environment. The company uses knowledge to innovate its products and services.

Time

Time is of the essence. All planned actions of Sony Ericsson should be implemented so that the company can reap its benefits and initiate changes if there is such a need for it.  The company cannot afford to delay the implementation of the new strategy since the new strategy was only made for the current situation of the firm.

 

Company Mission

 

Evaluation

An innovative organization must be led by a leader who develops and aligns the organization with the mission and vision, develops and maintains trust, ensures that coordinating and communicating occur, and encourages creativity and learning (Oden 1997).At the heart of the innovative culture lies the vision of the leader. This vision includes the broader sense of who the company is, why the company is doing this work, why it's important, the promises they have made to customers, and the code of conduct (Cook Jr. 2000). The mission and vision should definitely be consistent and supportive, but they will not be exactly alike since they serve two different purposes (Kanji 2002). Sony Ericsson’s mission statement concentrate on making sure that the company will produce the most attractive products.  This mission statement fits well with what the company is doing and showing to the public.  This mission statement can still be used to achieve the company’s overall goals.  Sony Ericsson has partly achieved its mission because it has created a wide array of eye catching products that are globally competitive and full of innovation.

 

Evaluation of mission statement against the five elements

 

Innovation

 

The mission statement of the firm has innovation as its core. The company innovates to achieve its mission. In every aspect of the firm, innovation is the concept deemed as most vital.

 

Brand

The company has made sure that it is known all over the world. The company has established itself on various parts of the world. This coincides with the firm’s mission of having a global identity.

 

Growth

The firm already has fully developed and grown it can be seen through its global brand. Sony Ericsson’s worldwide fame proves that the firm has achieved some basic goals and it has matured from its initial identity.

 

Stakeholders

The company works with the stakeholders in achieving growth and development. The stakeholders boost the company for it to achieve its goals and compete well in its industry.

 

Value and Lifestyle

Sony Ericsson wants to be attractive. They have achieved this mission through producing unique products that catches one’s attention.

 

References

Cook Jr., WJ 2000, The art and science of holistic

strategy, Quorum Books, Westport, CT.

 

Dunning, J 2003, Making globalization good: The moral

challenges of global capitalism, Oxford University Press,

Oxford, England.

 

Jones, G 2005, Multinationals and global capitalism: From

the nineteenth to the twenty-first century, Oxford

University Press, Oxford.

 

Kakabadse, A 2001, The Geopolitics of governance: The

impact of contrasting philosophies, Palgrave, New York.

 

Kanji, GK 2002, Measuring business excellence, Routledge,

London.

 

Keijzers, G 2004, Government and sustainable development,

Routledge, New York.

 

Nielsen, RP 1996, The politics of ethics: Methods for

acting, learning, and sometimes fighting with others in

addressing ethics problems in organizational life, Oxford

University Press, New York.

 

Oden, HW 1997, Managing corporate culture, innovation and

intrapreneurship, Westport, CT, Quorum Books.

 

Paley, N 2006, The manager's guide to competitive marketing

strategies, Thorogood, London.

 

Wallach, B 2005, Understanding the cultural landscape,

Guilford Press, New York.

 

Zwell, M 2000, Creating a culture of competence, Wiley, New

York.

 

 

Salary Survey

Salary Survey

Original Occupational Information

Drake International

Human Resources Director - Permanent full time

Description

                Our client, a Statutory Authority with a strong commercial focus, has an exciting opportunity to manage the organization’s human resources function. This is an important and exciting role in which you will take responsibility for delivering a successful HR function for approximately 200 employees, including permanent staff, contractors and consultants.

                Reporting to the Head of Corporate Services, you will be responsible for providing the systems, policies and processes to enable management to recruit and retain motivated and productive employees. This is a senior role where you will develop and maintain a strong human resource systems platform that provides the foundation for effectively managing the employees. This encompasses performance management, remuneration reviews, planning the corporate resources and ensuring the organization complies with all legal statutory requirements for its employees. You will build the skills, independence and confidence of the leadership team to ensure managers are empowered and capable of providing excellent management of their own teams.

                To be successful you will be tertiary qualified, with a commercial background and a proven track record in developing and implementing HR systems. Solid communication skills and being able to deliver to time, cost and quality will secure you this role.

Details:

Location: Melbourne, Victoria, Australia

Industries: Human Resources

Human Resource Manager

 

·  Inspire cultural development

·  Influence global success

·  Competitive Remuneration Package

            Working for this leading multi-national medical products and technologies business offers you a genuine opportunity to work for a company committed to making a positive contribution to people's lives. Underpinning this culture will be a Human Resources agenda mirroring the entrepreneurial spirit of the organization that creates an environment of innovation and thought leadership.

            Reporting to an inspirational HR Director and accountable for a culturally and operationally diverse client base, the HR Manager will form a central part of the businesses Management Team addressing business critical issues such as employee engagement, retention, strategic resourcing, and talent management. Your primary focus, however, will be to create an HR infrastructure that sets the foundations for continued employee, brand and organizational development.

            Having previously driven HR reform in an environment of multiple stakeholders and conflicting HR and business priorities, you will understand the importance of developing strong business relationships and ensuring management engagement. With an organizational commitment to the value of Human Resources, this role offers a genuine chance to influence business success

 

HR Consultant

            This high profile Australian Manufacturer is a major provider of products and services to most of the regions water, industrial process and infrastructure projects. The company works in close relationships, partnerships and alliances with the majority of the regions major companies to create ongoing value to the customers process.

            Reporting to the HR Manager, a new opportunity now exists for an experienced HR generalist. You will provide best practice initiatives working with line managers in order to achieve the organizations goals. This is an excellent opportunity for a commercially minded HR business partner who is looking to value add and partner closely with the business across all aspects of Human Resources.

            Degree qualified, you have a pragmatic, commercial and operational approach, thrive in a fast-paced environment, and are highly responsive to customer needs. You have excellent planning and prioritizing skills and are able to juggle competing priorities and demands across multiple customer groups.

 

 

 

 

 

Human Resources Officer

            Our client is a leading Australian private property development company who has achieved success through conceptualizing, developing and marketing projects in highly sought after locations. As an entrepreneurial organization they offer a full service including construction, property management, administration, sales and design which has led to building and construction awards since commencing business over 10 years ago.

            Due to company direction and impending growth the role of Human Resources Officer will report direct to the Human Resources Manager. Based in Mooloolaba, this role will be responsible for assistance in providing a proactive and strategic human resource function including change management, industrial relations, performance management, recruitment and training across all levels of the company.

            To be a member of the Human Resources team tertiary qualifications will be beneficial while working knowledge of current legislative trends is essential. Proven background in performance management and workforce planning will test your communication skills while assistance in achieving operational targets and monitoring satellite offices will be a major focus. Willingness to travel is required due to offices throughout Queensland.

            This is an opportunity to join a successful team within a dynamic privately owned organization and be involved in its strategic direction and growth. You will be rewarded with a competitive salary package, commensurate with experience, and an opportunity to utilize your knowledge while playing an integral function within the current team

 

 

 

 

Human Resources Coordinator

Lycopodium Engineering is a leading Australian consultancy in the design, development and construction of mineral processing and material handling projects in Australia and overseas. 

            Reporting to the Commercial Manager the Human Resources Coordinator will provide generalist advice and manage the HR team.

            The successful candidate will be responsible for coordinating all HR functions and providing generalist human resources advice and support to both line managers and employees. The main focus of this role will be maintaining and developing HR policies, procedures and systems as required by the business to ensure efficient, effective operations.

Primary responsibilities include:

·         To develop Human Resources systems appropriate to meet company needs

·         Review and improve HR policies and procedures

·         Advise on employment issues, ensuring compliancy with legislative requirements and adherence to Company policies and procedures

·         Oversee the Company’s recruitment function

·         Support and manage the transactional activities associated with the administration of HR policies, procedures and systems

            The successful applicant will have a minimum of five years experience in a similar role, a university degree in Human Resources (with a major in Industrial Relations or Employment Law preferred) as well as a strong working knowledge of HR related legislation.

            They must have excellent organizational skills and supervisory experience. The ability to demonstrate strong interpersonal skills and be process driven is a must.

            This is an exciting opportunity for an experienced and dedicated HR professional to take the next step in their career. 

 

Collated Survey Results

Salary Survey

            A salary survey is conducted on the five positions offered in the Human resource industry. The salary survey is based on the information gained from over 1700 companies throughout Australia and New Zealand. Table 1 below shows the results from the five positions in the human resource industry.

 

Table 1. Salary Survey on the Different Positions in the Human Resource Industry

Human Resource

HR

Director

HR Manager

HR Consultant/ Adviser

HR Officer

HR Coordinator/ Administrator

NSW - Sydney

200,000

110,000

80,000

65,000

50,000

VIC – Melbourne

200,000

100,000

75,000

55,000

50,000

QLD – Brisbane

160,000

90,000

67,500

50,000

40,000

SA – Adelaide

125,000

80,000

65,000

45,000

40,000

WA – Perth

125,000

85,000

70,000

50,000

40,000

NZ - Auckland

160,000

100,000

75,000

50,000

45,000

Average

161,666.67

94,166.67

72,083.33

52,500

44,166.67

Median

160,000

95,000

72,500

50,000

42,500

Source: Hays 2006 Salary Survey

 

            The table above shows the results of the salary survey in the five positions, HR Director, HR Manager, HR Consultant/Advisor, HR Officer, and HR Coordinator or Administrator, under the human resource industry in Australia.

            The standard working week in Australia is 38 hours per week or 7.6 hours per day, usually worked Monday to Friday. Work beyond that amount is overtime and attracts a premium ().

            From the results, the average salary of Human Resource Director is $161,666.67; the Human Resource Manager is $94,166.67; the Human Resource Consultant or Advisor is $72,083.33; the Human Resource Officer is $52,500; and the Human Resource Coordinator or Administrator is $44,166.67. The average is computed by taking the sum of the numbers divided by the number of items.

            The resulting median is $160,000 for the HR Director, $95,000 for the HR Manager, $72,500 for the HR Consultant/Advisor, $50,000 for the HR Officer and $42,500 for the HR Coordinator/Administrator. The median is computed by first rearranging the number in order from the lowest number to the largest and taking the two numbers in the middle of the series and getting the average of the two numbers.

 

Skills required

            HR Director

·         Ability to lead a team and communicate effectively in writing and verbally

·         Highly developed interpersonal skills and the ability to manage differing views

·         Demonstration of negotiation and mediation skills

·         The ability to develop a working relationship with external providers and industrial/employment associations

·         Sound knowledge and understanding of federal and state
employment legislation and its application

·         Effective management and administrative skills

·         possess strong leadership skills

·         possess strong negotiation and influencing skills

·         A strong attention to detail

·         The ability to prioritize and multi task

·         A keen sense of initiative

·         The capability to thrive under pressure

            HR Manager

·         Excellent interpersonal and communication skills including the ability to liaise and negotiate at all levels

·         Strong organizational and management skills

·         ability to coach and mentor line managers and empower them to take operational HR responsibility

·         Outstanding people management skills and capacity to lead a team

·         Personal approach and strong stakeholder management skills

           

 

            HR Consultant

·         Skills in the areas of analysis and problem solving, communication and presentation, time and project management, interacting, influencing and consulting at all levels and systems use.

·         positive and people oriented

·         Strong consulting skills and experience

·         Highly developed communication and interpersonal skills

·         Ability to work effectively in a team environment

·         Demonstrated compliance with relevant legislation and regulation

·         ability to relate at all levels of the organization is essential

·         enable you to build strong relationships, sound business acumen and strong influencing skills

·         strong attention to detail with proven ability to organize and coordinate across a number of sites

            HR Officer

·         Effective communication, organization and administrative skills

·         Understanding and knowledge of Generalist and contemporary HR Practices

·         Employee training and development skills

·         Ability to encourage and facilitate change in the workplace

·         a thorough understanding of state and federal legislation surrounding employment law and regulations

            HR Coordinator / Administrator

·         strong working knowledge of HR related legislation

·         Excellent organizational skills and supervisory experience.

·         ability to demonstrate strong interpersonal skills and be process driven

·         ability to make sound judgments and to solve problems

            According to  (1994), all wage and salary programs have their origins in the era of scientific management that is only now beginning to wane. The basic goal has been control. In connection with this, organization’s salary policy determines its pay level for individual or groups of jobs. It also determines the overall position of its salaries relative to the market. A basic policy issue in the private sector is the balance between internal and external or market considerations.

            Moreover, salary grades are rarely based solely on internal value. But rather, wage and salary programs, particularly in small companies, are based solely on the premise that salaries need to be aligned with prevailing labor market pay levels.           

            (1994) states that organizations are moving away from merely a highly specialized, skilled work force. The new emphasis is on employees who are flexible and able to perform more than one job. With typical salary reviews merit increases built into budgets. With the current restraints on budgets, merit raises are becoming an antiquated pleasantry. In the same way, guaranteed cost-of-living adjustments are growing less and less common.

            Performance measures are being coupled with a change in the way employees are paid (1994). More and more incentives are being designed for small groups, business units small enough to see the impact of any improvement in results. Managers are tying incentives to the outcomes over which their workers have reasonable control.

            Corporations have become sensitive to costs over the past several years. They have begun to place more emphasis on comparative labor costs and on market analyses. Moreover, there has also been emphasis on merit pay.

            The importance of performance and the linkage of pay to performance is a consideration that permeates salary management. Corporate performance management systems are often little more than an appraisal form to be completed at year end but everyone understands and accepts the importance of recognizing individual performance. The pay-for-performance philosophy serves as the foundation for virtually every corporate pay program.

            The traditional program concept is based on the value of a job. Once a job is defined in terms of duties and responsibilities, it is analyzed by Human Resource specialists who determine its "value" and assign it to a salary range (1994).

            Recently competency-based pay is being introduced (1994). In contrast to the connotation of the word, skill, which in common usage is limited to manual jobs, competency has a broader connotation that encompasses both cognitive and manual abilities. It also has more of a performance orientation. If an employee is competent, it normally means he or she can perform at high levels. Competency-based pay sends the message: "The more you can do, the more value you have. As you enhance your competence, we will recognize that with a higher salary." (1994) Competency-based pay is a future oriented policy.

            With the Australian workers, salary has also gone with what an individual can do and based on the competencies and the skill. The more difficult the job the more you are paid high. In addition it has also based on the market where the company is operating. Different levels of job comprise of different levels of salary.