Analyzing HRM Challenges in Hospitality, Banking, and Country Fire Authority

This report analyzes the key HRM challenges in the hospitality industry, banking sector, and country fire authority and provides recommendations to address these issues. It discusses issues such as workforce exploitation, assault, harassment, poor leadership, and misconduct and emphasizes the importance of proper strategies and HRM practices to improve services and efficiencies.

Assignment 3
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Executive summary
The aim of the assignment is analysing the different case studies in hospitality industry,
banking sector and authority of country fire and outline key human resource management
challenges affecting these industries. It goes on to analyse how these issues affect
managers, employees, and organisational efficiency. Then the report provides a
recommendation to adapt in the referenced sectors to address these problems. There are
five sections of this report, namely the introduction, hospitality, country fire authority,
banking, and the conclusion. It finds workforce exploitation, assault, harassment, poor
leadership and misconduct as major issues that affect the three sectors. Addressing these
challenges through proper strategies, enhancing HRM practices among other techniques is
important for these industries to improve their services and efficiencies.

1. Introduction
The report will explain and discuss the possible performance of the human resource
management (HRM) with the help of the provided case studies. The complex issues of the task
will be addressed using various academic and other sources that are used in the course. HRM
fails in these organizations which directly impacts the stakeholder and the staffs of the
organizations. The main issue is with the leadership ethics in the context of HRM that is affecting
the stakeholders and the staffs of these organizations. The possible recommendations of the
discussed issue will be outlines based on the research that will help and guide the HRM to
resolve the issues of the organizations. The report will talk about how the HRM would
contribute to the society by means of Corporate Social Responsibility and resolve the unethical
and wrong practices of these organizations.
2. Hospitality Industry
2.1. Key problems in the organisation
As an international eatery, Heston Blumenthal network is known to operate in various
offshore tax havens by the help of underpaid workers, according to The Sun-Herald and The
Sunday Age findings (Schneiders&Millar 2018). Chefs in the dinner time work for 100 extra
hours monthly without any payment. Permanent mid-level talented chefs earn very low (as
little as $ 15 to $ 17 an hour) regardless of hundreds of dollars paid per person for a meal for
two at high-end Australian restaurants. However, the official argues that there are no cases
of the under payment (Schneiders&Millar 2018). Tax avoidance is also witnessed when
Heston’s business shifts its expenses to the affiliated offshore organisation and use inter-
company loans. The key problem also include the long working hours. Permanent staff
(chefs) works for 65 to 80 hours per week which differs from the agreement which says that
a staff is bound to work for only 40 hours per week (Schneiders&Millar 2018).
Rockpool eatery also rip off the workers. The restaurants underpay their key workers who
work up to 70 hours per week even in unfavourable conditions (Schneiders& Millar, 2018).
According to The Age and The Sydney Morning Herald investigation, Rockpool put significant
pressure on vulnerable migrant employees who associate this practice as mental torture;
Workers also work for 15 to 20 hours extra without any payment (Schneiders&Millar, 2018).
According to Fairfax media, the entity also advised its employees to provide misleading
records of the working hours in contravention of workplace laws which is an unethical
behaviour and workers are prohibited from speaking about their safety (Schneiders&Millar,
2018). In addition to this, slavery affects the immigrant employees who require the help of
company lawyers to apply for their visa. This is done because of the immense fear of losing
the job that makes them vulnerable to exploitation, excessive work and significant
underpayment (Schneiders& Millar, 2018).
According to Ferguson (2017), blackmail, dishonest accounting and underpayment of
employees are the major challenges faced at 7-Eleven. Investigators relate the exploitation
of the workforce to the 7-Eleven’s business model, which means that the business is built on

the foundation of deception (Ferguson, 2017). On the outside, it appears to be a thriving
store that provides its customers with household items that they require. However, on the
inside inhumane treatment, act of slavery and exploitation is an ongoing activity that
thousands of employees are facing (Ferguson, 2017).
2.2. Explain how HRM is deteriorating this organisation, it’s staffs and other
stakeholders
These organisations, their workers and the stakeholders fail in many ways by not
maintaining its core roles. HRM failed to address the common problems of under paying the
employees that is affecting the staffs in the hospitality sector as outlined above.
Underpaying the workers is the worst mistake an employer can make because it
demotivates workers, reduces their productivity and makes it hard to attract and retain the
best talents (Macdonald, Bentham & Malone, 2018). This phenomenon is certainly caused
by unethical leadership. Brown, Trevino& Harrison (2006, p.126) argued ‘ethical leaders are
characterised as honest, caring and principled individuals who make fair and balanced
decisions’, and ethical leadership is ‘the demonstration of normatively appropriate conduct
through personal actions and interpersonal relationship’. In fact, from the investigation of
the media, it is obvious that the top management and HR department of these three
organisations acquiesce the situation of exploitation of the workers and wage fraud which
indicates that the leaders and managers of these businesses did not act as a ‘legitimate and
credible role model.’ (Brown, Trevino & Harrison, 2006, p.126). The HR mangers of the
companies also failed to provide the job security to the employees. For example: Rockpool
has failed to provide better working conditions for workers, causing workers to overwork
daily while not getting paid for their services properly as demonstrated above (Schneiders&
Millar, 2018). Many workers at Rackpool are taken to the hospital due to work-related
injuries and stress caused due to work load pressure (Schneiders& Millar, 2018). The
managers did not demonstrate honesty, trustworthy fairness and care towards their
employees (Brown, Trevino& Harrison, 2006).
At the organisational level, unethical practices of companies are linked to the poor strategy
human resource management (Armstrong, 2012). SHRM is the process where the managers
establish an organisation’s vision and mission and set specific performance objectives, and
design the corporate strategies to achieve these objectives with the distribution of relevant
human resources to execute the chosen action plans (Stone, 2013, p.25). One basic reason
of these companies’ rampant underpayment behaviour is because their HRM function failed
to align the corporate strategies to provide long-term strategic benefits and sustaining
productive strategies of the business (Singh, 2012). As a result of which Heston, Rockpool
and 7-eleven suffered loses financial service and reputational costs. The HR department of
these organisations did not launch any policy to deal with this aggressive, risk-taking,
unethical practice (Thompson, 2015).
2.3. Recommendations
To tackle the problems highlighted above, firstly, reward and recognition should be
introduced and staffs who did not receive their deserving pay should be paid back. HR
managers should follow the payment regulations outlined by Fair Work Act that says that

underpayment is illegal (Wheelwright, 2013). Secondly, these organisations should focus
more on the basics, like safety, security, work-life balance, work environment and benefits
rather than focusing on getting work done at the cost of worker’s damage, exploitation, and
underpayment (Bowen, Privitera& Bob, 2011). The industry should focus on its future goals.
They should be solution driven, understanding, caring and credible in their operations
(Mackenzie & Peters, 2014). Thirdly, the HR department needs to have ethical leaders in
these organisations through human resource development (HRD). Wang et al. (2017,
p.1175). HRD is ‘a mechanism that helps in shaping individual and group values and beliefs
and enhances the skills through learning-related activities to support the desired
performance of the host system’. Therefore, relevant training sessions should be held to
build the employee knowledge, skills and abilities needed to become an ethical leader.
Meanwhile, HR professionals must set a clear promotional policy that only qualified
employees and those who meet the ethical leadership scale would be promoted as
managers or leaders (Karimi-Majd, Mahootchi&Zakery, 2017). For example, ethical
leadership scale requires ethical leaders’ discipline (Brown, Trevino & Harrison, 2005). HR
managers must ensure that HRM is strategically aligned with the organisation’s overall
business goals to improve the operations, consumer satisfaction and financial performance
(Bilgundi, Kumar & Pai, 2013).
3. Country Fire Authority (CFA)
3.1. Key problems in the organisation
CFA encounters the following key problems. First, there is the challenge of workplace
harassment, discrimination, and bullying (Bowden, 2018). The management response to
these sexual assault allegation prohibited further reporting of such incidents as the
management aggressively rejected such reports (McKenzie&Baker, 2017). Sexually assaulted
women have been reported to attempt suicide and some workers had to seek professional
help to handle work-related stress, depression, suicidal ideation and anxiety due to poor
working conditions (McKenzie&Baker, 2017). Workers are reported to have consumed
alcohol in the workstation and thrown their co-workers into a water trough on several
occasions (Bowden, 2018). From Edwards (2017), four male co-workers brutalised a female
volunteer who was only 17 years old at Eaglehawk station, while others stood by and
watched this act. Moreover, the strong presence of nepotism and favouritism is found
within CFA according to the country fire authority’s survey (McKenzie&Baker, 2017).
3.2. Explain how HRM is failing this organisation, its staff, and other stakeholders
CFA’s human resource management has failed to formulate and develop key policies to
discourage and punish those who misbehave in the workplace. Workplace assaults at CFA
can be concluded as deficiencies of ethical leadership, cultivating unhealthy culture where
inappropriate behaviour and criminal conduct is embedded (Zoghbi-Manrique-de-Lara&
Viera-Armas, 2019). In fact, nepotism and favouritism are the major reasons of all of these
criminal conduct since poor behaving employees are under the protection of leaders. They
actually contribute to the bullying culture (Dinara, 2015). In addition, these two factors are
detrimental to the recruitment and selection process of the organisation. People are hired
because of their community ties rather than their qualifications and ability which
significantly damages the organisational cultures and lead to employee disengagement and

ultimately the turnover of the company (Carter, 2015). On the other hand, failing to
maintain a healthy and safe working environment is another ethical concern prevailing in
the organisation which includes in-disciplinary activities and alcoholic abuse (Edwards,
2017). HR professionals of CFA also failed to ensure the well-being of the employees to
meet the organisations’ strategic objectives.
3.3. Recommendations on how problems could be solved
CFA needs to develop strong executive commitment, supportive and aligned people
practices, strong ethics and culture, and highly engaged staff (Stone, 2013). Firstly, CFA must
develop a culture that supports young workers and inspires them to continue with good
work in the organisation, alcohol abused and workplace indiscipline should be addressed by
establishingclear guidelines and principles that focus on employees’ health, safety and
wellbeing (Gunningham & Sinclair, 2014). Meanwhile, a cross-communication with all
departments should be taken to deliver a consistent message that CFA is going to make a
zero tolerance policy to workplace misconducts such as bullying and protecting those who
engage in unprofessional practices (Uitzinger & Chrysler-Fox, 2018). Secondly, HR managers
must be at the forefront in promoting occupational health and safety by dismissing the
employees who have contributed to bullying and harassment immediately(Bowen, Privitera
& Bob, 2011).For instance, circumstance indicates in the article that the promotion did not
take properly, the CFA captain should be dismissed for his unethical behaviour. He failed to
discipline employees who violate ethical standards and he presented a bad example of how
to perform things in the terms of ethics (Edwards, 2017). Thirdly, instead of reliance in
nepotism and favouritism, the HR manager of CFA must make clear selection criteria which
include qualifications, knowledge, skills and abilities in making a decision to hire employees
(Dinara, 2015).
4. Banks
4.1. Key problems in the organisation
From Royal Commission, 61% of misconducts relate to banking (Royal Commission, 2019).
Life savings are lost at the hands of corrupt financial consultants. Life insurance claims are
also rejected, for instance, CBA sold outdated life insurance policies that made it impossible
to claim (Ferguson, 2017). Financial planning misconduct is also a major concern in the
banking sector, Ferguson (2017). Financial consultants cheat in exams, force the customer
into services and products to collect commissions and even forge documents and signatures
to get funds. Despite the greedy acts of these banks, questionable culture, and other
identified challenges running deep and wide in the banking sector, perpetrators go
unpunished as whistle-blowers take the punishment in their place (Ferguson, 2017).
Winner-take-all culture is suggested by Amazon, they are unwilling to share their spoils,
place shareholder ahead of employees, and top executives take the lion's share of spoils
which means low-paid staff in banking are excluded from stock grants and profit-sharing
(Schwartz & Corkery, 2018).

4.2. Explain how HRM is failing this organisation, its staff, and other stakeholders
Based on these case studies, the HRM has failed the banking sector, clients and other
stakeholders in many ways. In order to ensure the ethical code of conduct in the
organisation it is necessary to create ethical organisational culture and behaviours that are
important missions of HRM function. However, the functions of HRM of the Australian
banks involved in the scandals did not promote an ethical environment because the
scandals revealed are related to unethical conducts (Ferguson, 2017). For example, the 2013
Commonwealth Bank financial planning scandal contains a variety of unethical behaviours.
Instead of punishing the relevant employees, the bank leaders hide these behaviours for
them (Ferguson, 2017). Therefore, problems should be eliminated during the selection,
hiring and promotion process. Also, financial advisers engage in fraudulent behaviours such
as falsification of documents to gain access to funds as a result of failures in the HRM
systems which have failed to train and develop workers in the banking sector (Ferguson,
2017).In addition, HRM has failed to develop a proper remuneration model that ensure
equity in terms of sharing the spoils the banking organisations makes (Schwartz & Corkery,
2018).
4.3. Recommendations
Banks should determine appropriate approaches to tackle professional misconduct and
unethical leadership behaviours in their institutions (Stone, 2013). According to (Brown &
Trevino, p.597), ‘ethical leaders frequently communicate with their followers about ethics,
set clear ethical standards and use rewards and punishments to see that those standards
are followed.’ HR professionals should ensure that the leaders are well aware of these
standards and ask them to join the process of creating the proper policies and procedures
for dealing with the unethical behaviours. For instance, financial advisers who engage in
forgery, push consumers into products to gain commissions must be dismissed (Ferguson,
2017). The leader, who covered for this adviser and the top executives, who took an
unreasonable share of spoils should be suspended, pending to investigation because they
did not act ethically (Nankervis, Baird, Coffey &Shirlds, 2017). Hence, HR managers should
develop, monitor and maintain ethical culture in the organisation by introducing training
programs for leaders and employees to attend; ethical and moral responsibilities need to be
included in the job description in order to recruit managers and employees with ethical
behaviour (Stone, 2013). Moreover, a proper remuneration model that ensures equity of
sharing the spoils and fair payments needs to carry out in order to enhance the employee
motivation and productivity (Molineux, 2013).
5. Conclusion
In this report I have demonstrated a selection of the key HR concepts that are important. It
can be concluded from this research that each organisation needs to allow HRM to work
diligently and ethically to rectify the appalling treatment. Human resource development is
needed in certain areas like improving performance and morale, changing organisation’s
culture and implementing new policies. Adding to this, the recruitment, promotion and
training needs to be reviewed comprehensively. My final observation is that unless HRM

does what the theories suggest it to do, these organisations should either go out of business
or severely restructure in order to resolve the considerable problems of the organizations.
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