Challenges for IHRM in Commonwealth Bank of Australia

This report discusses the challenges faced by HRM in Commonwealth Bank of Australia, including poor workplace culture, unprofessional employee termination, and lack of training facilities. The report also provides recommendations to mitigate these issues. The role of HR managers in creating a better environment for employees and aligning with company objectives is emphasized.

Running Head: CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
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1CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
Executive Summary
The Commonwealth Bank of Australia is considered to be one of the renowned financial sector
across the world. However, there are a number of issues that the HRM in Commonwealth Bank
of Australia has faced in respect to the international human resource management. The issues are
related to the poor workplace culture, irrational employee termination and lack of training
facilities. Therefore, the report also delivers some recommendations regarding the illustrated
issues and tries to mitigate the problem. Therefore, it is concluded that HR managers must have
an understanding of the employee interests as well as get acknowledged with the company
objectives and it creates a better environment for the Commonwealth Bank of Australia.

2CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Poor workplace culture................................................................................................................4
Unprofessional employee termination.........................................................................................6
Lack of training facilities.............................................................................................................8
Recommendation...........................................................................................................................10
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

3CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
Introduction
Commonwealth Bank of Australia is one of the largest commercial banks across the
worlds. There are around 16.6 million customers with 6.2 million are using digital channels. The
net profit of the organisation is amounted $9,881 million as per the Annual report of 2017
(commbank.com.au., 2018). As a matter of fact, there are approximately 51,800 Commonwealth
Bank employees employed across 11 countries around the world. Based on this understanding, it
can be argued that the company evidently has a strong business encapsulation in the international
market. According to the Annual report of the Commonwealth Bank in 2017, it can be argued
that the annual earning was amounted $26 billion (commbank.com.au., 2018). However, there
are a number of issues that the company is suffering in recent time due to lack of transparency in
the banking structure and the data breach in the bank that damaged the image of the company
extensively. In addition to this, issues regarding the Human Resource Management were also
considered to pose serious threat to the employee satisfaction of the company.
In this context, the report incorporates some issues by pointing out the poor workplace
culture, unprofessional termination and lack of training facilities. The role of the HR
management is to create better environment for the benefit of the employees and also follows the
aims and objectives of the company. As a result of that, the report includes some efforts in terms
of recommendations so that it will generate some strategies to mitigate the issues.

4CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
Discussion
Poor workplace culture
Toxic workplace culture is considered to be one of the major threat in the Australian
banking sector. As far as the working culture of Australian Commonwealth Bank is concerned,
there are huge number of issues regarding the HRM policies that create problem regarding the
workplace culture in the organisation. The former CEO of Commonwealth Bank, Ian Narev had
found four critical issues that contributed to the malfunctioning of the workplace culture (Gray,
2017). According to the Australian Bank’s culture in 2014 it can be argued that the culture and
leadership are the most crucial factors that hampered the business orientation of the company
(afr.com, 2017). As a matter of fact, the employees did not feel safe to speak up and it caused a
communication gap between the management and the employees. In this regard, it can also be
asserted that the malfunctioning in the workplace culture in Commonwealth Bank of Australia is
strongly intertwined with the incident of replacement of four consequent directors. Moreover, the
investigation conducted by Australian Prudential Regulation Authority (APRA) also condemned
the weak workplace culture in Australian Commonwealth Bank for the money laundering issue
(apo.org.au., 2018). These continuous change in the high authority also affected the lower rungs
as the employees became sceptical about their job assurance.
In this context, the Configurational theory can be identified as an important aspect. As
per this theory, the HR system can perform more effective way by intertwining the
organisational objectives with the aims and goals of the HR department. According to Kurtovic
and Hasimbegovic (2015) it can be argued that the purpose of the Configurational theory is to
cater an effective environment where the Human Resource Manager is dedicated to deal with the
organisational objectives in an extensive manner. In response to that, a relationship between the

5CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
HR department and the higher authority has to be developed that demarks in one hand the
objectives and missions of the organisation and on the other hand let the HR department inform
about the objectives so that they can shape their planning accordingly (Tzabbar, Tzafrir &
Baruch, 2017). In this context, the term “Holistic” is very important as the HR management
follows the notion of holistic principles. As far as the definition of “holistic” is concerned, it can
be advocated that the role of the holistic is to apply all suitable views and practices with the
purpose to achieve the expected common goals (Ružić, 2015). However, in terms of the business
organisation, this common goals are obviously inculcate the perception of common purpose and
objectives. Putting the HR management in such a condition so that they can deliver their
expertise in order to bring better outcome and increase the profit in a robust manner.
In this regard, there are various approaches regarding the Configurational theory of HRM
practices but each of the theory covers up the basic perception of making an amicable
relationship between the HRM and the senior management. There are the classical, neo-classical
and the behavioural approaches that coincided with the scientific practice of Human resource
Management. Therefore, it is the responsibility of the managers to take adequate measures in
order to ventilate their ideas, concepts in a more combined approach that can serve the purpose
of the organisation. According to Hsiao et al. (2015) the elements of the Configurational theory
is resembled with the mixed or hybrid concept of procuring benefits for not only the Human
Resource managers but also creates a healthy environment for the corporate organisations so that
those companies can also get the light of possible profits. In fact, as in his research Saridakis, Lai
and Cooper (2017) pointed out that the better workplace environment or culture facilitates better
market capitalisation and moreover it also caters some important developments for the future
profitability of the companies as well.

6CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
Unprofessional employee termination
It has been seen in case of the Australian Commonwealth Bank that the company was
alleged with intentional and deliberate termination of employment. In this respect, the
government agencies of Australia had started investigation regarding this and found out that
there were more than 7000 part time employees working in the Australian Commonwealth Bank
owed millions of dollars unpaid for superannuation entitlements. As per the research carried out
by (McCauley, 2015) it was considered to be one of the greatest number of lowest paid workers
since 2009. As a result of that the Fair Work Commission of Australia started further
investigations and got the information that bank had received legal advice on the 9.5% super
underpayment and plans (McCauley, 2015). This incident proved that the Hu8man Resource
Management of the organisation was not in such strong enough to fight back for the payments of
the non-permanent staffs.
This was not the only issue that hampered the job satisfaction of the employees. In case
of the medical and health facilities the employees of the Australian Commonwealth Bank were
suffered with huge number of deprivation from the company‘s end. In a report presented by the
ABC News it was claimed that the an employee of Australian Commonwealth Bank who was
suffering with mental breakdown did not enjoy his insurance covering due to the lack of
cooperation of the company and he had to wait for several years to get his money back (Letts,
2017). This was considered to be an unethical as well as unscrupulous behaviour practised by the
organisation that violated the norms and regulations underlined by the Australian Securities and
Investments Commission. The CommInsure practice that the Australian Commonwealth Bank
has practised, is full of misery and does not clarify the terms and conditions of the Insurance

7CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
provisions. This was purely a misleading act regarding the HR management of the company
(afr.com, 2017).
In this regard, the Hard Model is considered to be the effective framework that
encompasses both the traditional approach of the HRM and the soft versions as well that control
the management perspective regarding the HRM. This theory puts intensive focus on the tight
strategic control, an economic model, managing human resource through commitment and the
cohesion. According to Veloso, Tzafrir and Enosh (2015) it can be asserted that the role of this
model is to clear out the specific role of the Human Resource Management and connects it with
the management intentions so that there will be a cooperation and connection between the
management and the higher authority (Rahman, Tabassum & Sultana, 2017). In this context, the
role of the HRM is to identify the essential norms and regulations of the Australian government
regarding the process of employment and the legislative framework that facilitates a better
environment that meet the purposes of both the employees and the organisation (Thunnissen,
2016).
On the other hand, Dalton and Bingham (2017) showed that the role of the hard model is
to set the norms on the basis of rights and benefits of the employees as it is mentioned in the
government regulations. Moreover, the HRM is also responsible to give support to the interests
of the employees in case of any breach from the end of the organisation regarding the payment
and job related issues. As per the research conducted by Harley (2015) it can be argued that the
hard model can be treated as an economic resource or commodity or a new technology that is
dedicated to develop a framework for the benefits of the employees. Rules, regulations,
supervision, disciplinary actions are labelled as the intricate part of the HR management
(Tzabbar, Tzafrir & Baruch, 2017). Therefore, it is the responsibility of the HR Management to

8CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
take initiatives for the benefits of the employees and ensure their safety on the basis of the
organisational objectives.
Lack of training facilities
Moreover, it can be argued that the training facilities in the banking and financial sectors
are very important in order to make a better and effective business operation environment. In
response to this, in Australian banking and financial sector there are a number of issues regarding
the training and induction of the employees. As per the research carried out by Gray (2017) it can
be stated that due to lack of understanding of the importance and significance of the training
program the bank staffs face severe challenges and as a result of that the service quality became
curtailed. In this regard, the role of the HR managers are essential because the HRM department
is entitled to foster any training program requirement.
Based on this understanding, the same issue can be identified in the process of the
Australian Commonwealth Bank. It had been reported that the bank deliberately practiced bias
training facilities that hampered not only the purpose of the training but also created severe
challenges to the diverse workplace environment. The worst incident that was happened in
Australian Commonwealth Bank was related to the data breach in the bank accounts of
approximately 335,000 customers with a transaction amount of 4.5 million USD (apo.org.au,
2018). This was an act of lack of ethical consideration that the company had possessed in its
course of operation. In response to that the Australian Securities and Investments Commission
initiated an investigation in accordance with the money laundering and fraudulent in Australian
Commonwealth Bank. As per the report of the ASIC, it can be asserted that there were lack of
understanding and the negligence regarding the importance of training and as a result of that it

9CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
became a severe problem for the organisation to maintain firm security of the customer accounts
(McCauley, 2015).
The Contingency theory is considered to be an effective framework in this regard.
According to Aust, Brandl and Keegan (2015) it can be advocated that the relationship between
the relevant independent variable and the dependent variable to influence the ownership,
location, technology and intensity of capital. In this context, the role of the HRM is extensive
and significant as well. As per the research conducted by Marler and Parry (2016) it can be stated
that in course of time the HRM practice also transformed its orientation in a robust way and
therefore, it became important for the HR departments to deal with other activities beyond the
traditional work culture. Different policies and strategies coupled with alternative methods to
involve the employees in the operation process more intense manner. In addition to this, the role
of the HRM is also associated with the intention to communicate with the operation managers
and the senior authority to confirm any kind of further requirement of training. In this regard,
Johnson and Szamosi (2018) advocated that the principles and practices of the organisations is to
manage its human resources in an effective and elaborate manner so that it will generate more
profit for the organisation. Henceforth, it requires some methods and proceedings related to
managing the employees. Training and induction are identified as one of the methods that can
create difference in the organisational operational management. Moreover, it can be stated that in
the financial sectors proper knowledge and understanding regarding the financial matters and
adequate knowledge of the market and consumer behaviour. In fact, training on the basis of the
technology and therefore, the HRM must resemble with the notion of training and induction in
order to create a better operational framework for the organisation.

10CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
Recommendation
In this regard, there are certain recommendations that are beneficial to make the
International HRM practice more effective. The recommendations are as follows,
 Talent management or employee branding is considered to be an important aspect that the
international HRM should maintain. It can be defined that talent management is related to
the commitment of the HRM to recruit, hire and retain talented and efficient employees
so that they can generate more profit and benefits for the organisation. In this regard, it
can be argued that the talent management process is a business strategy that the
organisations are followed in terms of retain talented employees. Therefore, it is also
important for the organisation to conduct training programs in order to make an efficient
business environment.
 As a matter of fact, it is also essential for the international HRM to manage an
international workforce. There are number of measures that can be taken into
consideration in order to emphasis on the process of making better international
workforce. In fact, the notion of international workforces is highly related to the diverse
work culture that was absent in the Commonwealth Bank of Australia. In fact,
discriminatory practices and hostile workplace environment are detrimental for yielding
more profit for the organisation. Henceforth, it is important for the international HRM to
deal with all these essential factors and set up a better relationship between the employees
and senior management.
 In addition to this, maintaining the global performance standards is also considered to be
an important aspect on which the companies must fix their focus on. In this context, the
international Human Resource managers are played a significant role in order to conduct

11CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
training and induction in a continuous way. Therefore, it is also important for the
Commonwealth Bank of Australia to establish such a continuous framework to develop
better operational engagement. Moreover, it is also effective to make such effort through
which the companies are enable to assess the performance quotient of the employees.
Conclusion
Therefore, in a conclusion, it can be argued that there are number of issues related to the
organisational framework of Commonwealth Bank of Australia. The report identifies a number
of issues in this regard such as the lack of organisational culture, dearth of technological
advancement and irrational termination practice. The HRM department is responsible to address
these issues however in case of the Commonwealth Bank of Australia the HR managers were
failed to resolve the problems. In response to this, the report highlights some recommendations
that are based on the given issues in order to resolve intensively.

12CHALLENGES FOR IHRM IN COMMONWEALTH BANK OF AUSTRALIA
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