Impacts of Cut Penalty Rates on KFC Australia's HR Planning, Job Design, and Quality of Work Practices

Running head: STRATEGIC HUMAN RESOURCE MANAGEMENT1
Strategic Human Resource Management
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STRATEGIC HUMAN RESOURCE MANAGEMENT 2
Introduction
The first KFC restaurant in Australia began operations in 1968 – at a place called
Guildford, in Sydney. The firm has struggled through to time to achieve success. However, we
currently serve more than 1.5 million customers every week across 700 restaurants globally. For
a long time, the company operates successfully with the competitors in shadows on how the
company manages to remain successful in the dynamic market for such a long time (Flabbi,
Macis, Moro & Schivardi, 2014).
Nevertheless, the Australian fast food industry is fast growing in the global spectrum.
Over the past few years, campaigns on consumer health awareness have altered the way
businesses operate in the Fast Food and Takeaway Services industry in the country. There is a
case of increased awareness about the nutritional content of food offered in fast food stores and
restaurants such as KFC (Gerdeman, 2012). Therefore, consumers are smarter and choose
healthier food options thereby affecting industrial demands. KFC, on the other hand, has made
appropriate responses by introducing healthier, premium food choices with less sugar, fat, and

STRATEGIC HUMAN RESOURCE MANAGEMENT 3
salt. Most importantly, KFC offers good, higher quality options on the offered dishes. KFC then
expects an increase in its revenue by 3.9% come 2020 (Ellison & Mullin, 2014, p. 679).
Talking of changes in the hospitality and tourism industry in Australia – one of which
KFC is part; associated stakeholders decreed a cut of the penalty rates for overtime and public
holiday workers. However, such changes on the penalty rates have detrimental effects on KFC’s
casual and permanent workers who work during public holidays, in the evenings and night hours,
as well as on Sundays. Concerning the imposed charges and changes made in the industry's legal
framework, this paper will look into the impacts of such legal, environmental factors on:
- KFC’s HR planning
- Job design
- The quality of organization work practices
Otherwise, this paper will also justify appropriate recommendations that KFC Australia needs to
undertake towards negotiating with the concerned stakeholders to amend the imposed penalties.
Impacts of Cut Penalty Rates on the job design, HR planning, and quality of work
practices of KFC Australia
i) Analysis of Award-Reliant Workers
The average number of workers employed by KFC in Australia is approximately 2, 500
between 2017 and 2018. In Sydney, however, the fast food industry – between 2017 and 2018,
recorded approximately 290,000 workers. A broader research outcome showed that the period
between 2017 and 2018 marked close to 490,000 retail workers who are non-managerial as well
as another 220,000 managerial workers in the industry – within Australia as a country. Currently,

STRATEGIC HUMAN RESOURCE MANAGEMENT 4
KFC has close to 800 award-reliant workers. Out of the total population that is close to 3,000
workers, about 1,200 work on Sundays, representing close to 46% of total workers in the
company.
ii) Key Findings through the Perspectives of the KFC’s HR
After a thorough close up an overview of the associated impacts of such cut penalty rate
changes, the HR establishes that:
- Up to 2,000 workers in the firm are working under the awards on which such changes
are proposed.
- About 1 in 3 non-managerial workers are not part of the EBAs and will face the
impacts of the changes proposed
- The proposed changes will affect about 52% of female workers and 48% of male
workers.
- Both part-time and full-time employees working on an 8-hour shift on Sunday will
face the impacts of the changes made. Such employees are likely to lose at least
$90.90 every full change on Sundays.
- The changes will most likely, affect employees that earn the least amounts including
students and employees relying on operating on the weekends.
iii) Modeled Financial Impacts on the Affected Employees
The HR, in its deliberations on considering the revocation of such changes, has given an
outline regarding the importance of finding the lives of many workers at stake because of the
changes. As mentioned before, most of the employees who are affected by the FWC decisions
are low earners (Matsa & Miller, 2013, p. 141). Most of the workers are parents that return to the