Impact of Employment Relations and HRM Issues on Recruitment of Managers in ANZ Bank

This report analyzes the impact of employment relations and HRM issues on the recruitment of managers in ANZ Bank. It discusses the background of the banking industry, HRM challenges, and the recommendations of the Royal Commission.

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Contents
Introduction................................................................................................................................................2
Business and employment background in the banking industry........................................................3
HRM issues...............................................................................................................................................4
Questions...................................................................................................................................................6
Conclusion...............................................................................................................................................14
References..............................................................................................................................................15
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Introduction
This report is written with the intent to explain the impact of the employment relations
and human resource management issues of ANZ bank on the recruitment of the
managers from the other countries to work in the Australian Banking industry in 2019.
The main purpose of this report is to analyze the final reports of the royal commission
into the misconduct, superannuation and financial services industry. The report begins
with some background information regarding the banking business and employment
background as per the royal commission final reports. There are many human resource
management issues involved in ANZ banking which will influence the working of the
managers in Australia in 2019. The main body of this report includes some of the
answers of questions with regard to the royal commission’s final report on the
misconduct, superannuation and financial services. All these answers basically
represent the responses of the federal government and banking industry towards the
recommendations of the royal commission. This report also outlines how these
recommendations given in the royal commission’s final report are meaningful for the
employment and human resource management in the banking industry.
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Business and employment background in the banking industry
The largest part of the Australian financial system is the Banking sector as there are
more than 147 authorized deposit-taking institutions (ADI’s) accountable for 55% of the
assets of the Australian financial institutions. The Banking industry in Australia is
dominated by the four major banks including Westpac, Commonwealth, Australia and
New Zealand and National Australia Bank. From the last many years, employees are
assumed as the most important assets for the organization. Australia and New Zealand
Bank (ANZ) is the third largest bank in Australia founded in the year 1834. The business
of ANZ is serving more than 5 million customers with the help of more than 28,000
employees. The values of the company are to build a sustainable future for the
business, staff members and customers. The ANZ business operates in many other
countries such as in Asia, the UK and the United States. Talking about the management
team of this bank, then Mr. Shayne Elliott is the Chief executive officer and Mr. David
Gonski is the Chairman of the bank. ANZ is the public company that offers a wide range
of banking and financial services to the customers including retail, corporate,
commercial and business customers(Verrender, 2019).
Looking at the support given by the banks to its employees, then there are many
programs, approaches and standards. ANZ has provided traineeship and worked
successfully with the Aboriginal employment schemes. Also, ANZ bank believed in the
equality and their main motive is to recognize and reward the excellent talent and offer
great opportunities for the people with disabilities. ANZ adopted a strategy named as
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ANZ’s group diversity strategy according to which diverse and inclusive workforce will
be recognized as the assets of the company and they play essential roles in achieving
the objectives of the bank. The approach of the bank towards the responsible growth is
to follow the code of conduct, values and behaviors(Hayne, 2018). This growth of the
bank is possible with the support of the policies and guidelines, staff training and
education of the employees. it is said by the Banking management team in their report
that the success of the business is highly dependent on the diverse, engaged and
inclusive workforce who are the main pillars of the banking industry and deeply
understand the customers and communities and build strong relationships with
them(Dorney, 2019).
HRM issues
There are number of challenges are faced by the HR department of ANZ bank that affects the
recruitment of the managers from other countries. First of all, banking sector is facing a
challenge of new regulations and new banking policies that affects the recruitment processes as
people show less interest if those rules and regulations are not in favor of employees.
Furthermore, the political changes to human resources management are very difficult to analyze
and complex in nature. The political environment of country has the direct impact on the political
environment under which the human resource management of an organization operating all its
functions. The political backgrounds include the work contracts, external regulations and labor
laws which changes with the change in the political environments. Some of the changes that
observed in ANZ bank by the changes in political environment includes:
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1. The mobility of the human resources becomes more that rendered the loyalty and
organizational commitment irrelevant and enhances the role of the managers from
different countries to perform and focus on the strategic functions.
2. The shift has been found from performance related pay to result oriented pay because
of the changes in the economic circumstances and new work methods.
3. The regulatory restrictions on the bonuses payment by the government and new
regulations results in the movement of the managers from one country to another
country.
Second major challenge in banking is the proposed changes in the remuneration code which
shows changes in the bonus deferral, clawback and tougher financial sanctions. The
difference in the remuneration code in different countries has the different impact on the
recruitment of managers. There remuneration in Australia for manager is more than the Asian
countries for the same work that they performed in Asian markets. Similarly, the low
remuneration for employees has the negative impact on the recruitment of the new talent in
the organization.
Moving further, the lack of employee relations in the banks also have influence the working
of the managers. The poor relations with the employees and treating them with bad and strict
behavior always discouraged the people and leads to high employee turnover situations. The
retention of the employees becomes difficult because of changes in the regulations and poor
working relationships. There are many issues that faced by the ANZ in relation to the human
resource management such as misconduct by the employees, retention of employees,
technological development in the banking sector and incentives structures and
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superannuation policies. According to the reports of Royal Commission conduct in the
banking superannuation and financial services industry, misconduct and superannuation
risks are some of the most complex challenges faced by the banking industries. Royal
Commission has given some recommendations to financial service industry to bring some
changes in the regulations and guidelines in relation to the issues like misconduct(Tobin,
2019). This report Uncovers a range of issues which has a great impact on the stakeholder's
trust and investments. The issues observed in the Royal Commission report are listed
below:
 The level of conflict of interest was found and it is very challenging because of
the lack of ethical remuneration structures in the organizations and constant
focus on the personal goals.
 The separation Between the duties of marketing of financial products and the
provision of financial advice was not found in the banking sector
 There was a lack of transparency with regard to the information on financial
products because of which reasons customers were not able to choose the right
product as per their new requirements.
 There was no action taken against the parties who broke the laws and
regulations of the government with regard to the operations of financial
services(Grant, 2018).
Therefore, according to the Royal Commission reports, it is must for the financial
advisor reforms to ensure that employees comply with all relevant laws. The
recommendation given by the Royal Commission with regard to the misconduct by the
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financial advisors is that in case of any breach in law compliance, then financial
Advisors or the institutions have the responsibility to clearly inform to the regulators and
take action against the misconduct. The Impact of these recommendations on other
managers is that it will help in improving the integrity and responsibility of the financial
market and more importantly managers can restore the trust among its
clients.Furthermore, it is also observed in the Royal Commission report that the main
source of conflicting of interest arises from the advice fee charged from my super
accounts. The action suggested by the Royal Commission is to ban the advice see as it
does not serve any kind of purpose to the members of MySsuper accounts(Jennett,
2019). The impact of this action will be the greater transparency to clients.
Questions
1. What did the Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry have to say about
misconduct in the banking sector in Australia?
The Royal Commission report into misconduct, superannuation and financial services
has been released on 4th February 2019 by the Commissioner Haynes which provides
the 76 recommendations with regard to the different issues in the financial industry. All
these recommendations are provided to regulators for further actions. The Main
purpose of this report is to simplify the laws and bring some changes in the culture and
remuneration of the Employees and to manage the conflict of interest(Williams, 2019).
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The Royal Commission report has found misconduct in the banking and financial
service sector which is serious human resources management issues and it is below
the Expectations of the community standards. With the help of case study
examples, Heyne found the failure of the system because higher priorities are given to
the profits instead of the consumer interests. This conduct has been driven by
remuneration practices and policies of the Australian banking organization. According
to the Royal Commission report this conduct ignores the basic standards of honesty, so
it is important to consider all the important matters for the betterment of the banking
industry.
Commissioner also expressed his viewpoints with regard to the prevention of this
misconduct in the organization in future. According to Commissioner Hayne, it is
suggested that the existing legal Framework should be simplified instead of adding
some extra regulations in it. According to the Commissioner, simplifying the laws in the
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existing legal Framework will help to provide efficient, honest and fair services to the
customers(Ngo, 2019).
2. How did the federal government respond to the recommendations of this
Royal Commission?
It is observed that the government is taking action on all the 76 recommendations
provided by the Royal Commission final report misconduct, superannuation and
financial services industry. In the report of Commissioner Hayne, there are many
actions that already been taken by the government, has been discussed and
recognized. The government response towards the recommendation of the Royal
Commission is positive as the principal focus is on restoring the trust and delivering
quality and better services to the consumers(Australian Government, 2019).
Also, the government has the main motive is to take action against the misconduct and
giving attention to the interest of the consumers. The responses shared by the
government with regard to the recommendations of Commissioner Hayne have been
explained in four key ways. First, the government agrees to take action against the
recommendation to strengthen and expand the protection for customers, small
businesses and rural communities. Secondly, the government also wish to raise
accountability and Governance standards. The enhancement of the effectiveness of the
regulator is the third way to advance the interest of consumers. Royal Commission
report also provided the remediation for the organization that harmed by the misconduct
which is very beneficial to promote the interest of consumers by the
government(Deloitte, 2019).
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There are 76 recommendations given by the Royal Commission report which also
includes recommendations for misconduct and superannuation shown in the below
table along with the government response to these recommendations:
Recommendation Government response
Recommendation 2.9 misconduct by
Financial Advisors
According to this recommendation, all the
Australian financial services licence
holders should follow some steps
misconduct by financial Advisors:
1. enquire about the advisor's
misconduct to the full to determine
its nature
2. Inform clients and regulators with
regard to the activity of the advisor
that has engaged in misconduct.
The government agrees with
Recommendation of the Royal
Commission as the government will
reinforce this to provide new directions to
the ASIC.
Recommendation 3.2: Not deducting
advice fees from my super accounts
According to the report it is recommended
to ban the deduction of any advice fee
Government shows its agreement with
regard to the prohibition of deduction of
fees from my super account excluding
intra fund advice(Remeikis, 2019).
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from Mysuper account.
3. How did the federal Opposition respond to the recommendations of this
Royal Commission?
Some of the opposition responses also found on the recommendations of this royal
commission as the federal government did not found it logical to sit again for the two
weeks in March to bring changes in the regulatory frameworks due to these
recommendations of the Banking royal commission. According to the Defence minister
Christopher Pyne, there will be a need at least 40 pieces of legislation and coalition to
implement these recommendations in the right way (SBS, 2018). However, the federal
government said that they need time to bring these changes as all the
recommendations provided by Commissioner Hayne. The complexity and time
consuming are the opposite responses shared by the federal government towards the
royal commission recommendations(Schneeberger, 2019).
4. How did the banking industry respond to the recommendations of this
Royal Commission?
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Most stakeholders and the banking industry generally shared a positive response
towards the Recommendation of the royal commission and welcoming them into the
banking sector. There are many financial organizations that shared their responses
with regard to the Royal Commission recommendations. First of all, the financial
planning Association said that they working proactively with the government to address
its recommendations and also adds the need for the building trust among the clients
and strong consumer protection. The organization AMP is also ready to work
constructively with the government regulator and other bodies to implement all these
changes suggested by the Royal Commission with the objective to meet the best
interest of customers. Furthermore, the Commonwealth Bank also released a statement
with regard to this recommendation in which it’s acknowledging the need for changing
regulatory frameworks for the betterment of the banking industry resolving the human
resource management issues(Huxley, 2019).
APRA and ASIC are two regulatory authorities and different in their roles and nature.
The APRA is the Australian prudential regulation authority(APRA) which is supervisor of
the banks, superannuation industry and various life insurance companies. On the other
side, ASIC is the authority that regulates the working and conduct of Australian
companies and financial markets. Both these organizations also show the positive
response towards the recommendations of the Royal Commission. They also believed
that to handle the misconduct in the organization, it is must to enquire about the
situations and also give an opportunity to the employees to speak freely about their
problems. Also, the deduction of the extra advisory fees from the accounts of the
employees is appreciated by APRA and ASIC(Khadem, 2019).
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5. What, if anything, do these recommendations mean for employment in the
banking industry?
The impact on the job market in the banking industry has been noted and it revealed
that there is a huge demand for the risk and compliance workers. The workforce in
many financial sectors has been decreased after the reinforcement of the rule of no
commissions, no fees and no exemptions. The National bank of Australia is the greatest
example which shows the reduction of 4000 employees from 33,422 employees. The
recommendations provided by the royal commission are very meaningful and affecting
employment in the banking sectors. The rate of employee retention is decreased
because of these strict legal frameworks of the banking organizations. On the other
side, it is very useful for the employees that they need to hold only one account and will
not have to pay the extra amount or fees for these super accounts. This creates job
security among the employees and also reduces stress. The banking industries after the
introduction of these recommendations will seek for the candidates who possess the
skills in conduct and advice and have knowledge about the service commission
models(Team, 2019).
6. What, if anything, do these recommendations mean for the practice of
human resource management in the banking industry?
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The Royal Commission report into misconduct, superannuation service industry is found
to be very useful for the resource management practices in the banking industry as
there are many lessons that HR professionals can learn from these 76
recommendations. According to the Royal Commission report, it is illustrated that the
employees are the most important sources of organizational risks. It is analyzed that the
recommendations are given by the Royal Commission effective mechanism for people
to speak clearly with regard to the misconduct activities. In comparison to the historical
times, misconduct either not been identified or appropriately penalized but employees
did not get an opportunity to speak up freely and safely. The banking industry can adjust
its HR governance model according to the Royal Commission HR themes and by
applying the articulations of culture. Royal Commission reflected that the culture should
be shared values and norms that shaped the behaviors and mindsets of the people. It
is suggested that the organization need to set up clear expectations regarding the
behavior of the employees(Wilks, 2019). This will Help the employees to behave
according to the code of conduct and they will participate in the training and educational
programs of the organization to increase its knowledge about the culture of the
organization, appropriate behavior Expectations of the company. The recommendations
are given in the commission also reflected that the HR governance model should be
appropriately implemented and complied with the regulatory frameworks. There
should be an involvement of the field audits and reporting to the senior management in
the HR governance model. The Commissioner also made a point in the report that
executive remuneration and culture going side by side (Fickling, 2019).
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Conclusion
According to the reports of Royal Commission conduct in the banking superannuation
and financial services industry, misconduct and superannuation risks are some of the
most complex challenges faced by the banking industries. Royal Commission has given
some recommendations to financial service industry to bring some changes in the
regulations and guidelines in relation to the issues like misconduct. All these
recommendations are provided to regulators for further actions. The Main purpose of
this report is to simplify the laws and bring some changes in the culture and
remuneration of the Employees and to manage the conflict of interest. The
recommendations are very useful for the employees that they need to hold only one
account and will not have to pay the extra amount or fees for these super
accounts(Knaus, 2019). This creates job security among the employees and also
reduces stress. The Royal Commission report into misconduct, superannuation service
industry is found to be very useful for the resource management practices in the
banking industry as there are many lessons that HR professionals can learn from these
76 recommendations. According to the Royal Commission report, it is illustrated that the
employees are the most important sources of organizational risks. It is analyzed that
the recommendations given by the Royal Commission effective mechanism for people
to speak clearly with regard to the misconduct activities(Clench, 2019).
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References
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Government response to the Royal Commissioninto Misconduct in the Banking,
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1.pdf
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affects-hr
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