Introduction to Human Resources (HRM107)

Individual Report
HRM107
1

i. Issues
Stakeholder can be anyone who is affected by the outcomes of an
organisation (eg employees, government, suppliers, residents, creditors). It
can be an individual person to a whole organization. As we know the
stakeholder is affected by the outcomes of an organisation which clearly
indicates that the stakeholder has interest in the project (Renee B. Adams and
Amir N. Licht 2011). They are not bound to be in that project directly. They
can sponsor the project as well by indirectly involving in it. There are two
types of stakeholders external and internal. Internal are those who are present
in that organisation whereas external stakeholders are those who are not
present in the organisation. Stakeholders can have both negative influence
and positive influence on the project. They are the people involved in the
completion of the project. There are many key stakeholders in minimum
wage rate debate which are labour groups, business groups, government
groups, youth and community members. Minimum wage rate is the lowest
payment an employer can legally pay to his employee after hiring him/her. So,
it indicates us that employer cannot pay lower than this wage rate to his
workers. It varies from place to place. It was introduced to increase the
standard of living, reduce poverty and inequality (Colin Robinson 2008). For
the labour group their issue to raise their voice in this debate is if they are not
getting fair pay for the work they do. They are being exploited from their
employer. Usually the employer pays less to reduce the cost of production
and have more hours of work from his employee. Thus, resulting increase in
profit but if the minimum wage rate increases there is a chance that employee
might drop in the bigger tax bracket thus resulting in less actual income
earned. Whereas it is totally opposite in the eye of business groups as they
want to increase their profits they want less wage rate to lower their costs and
increase their profits but if there is increase in minimum wage rate it will
increase the price of the goods being manufactured thus will result decrease
in sale revenue. We also know if there is small number of workers, so the
distribution of workload will increase causing the employees to exhaust thus
resulting in poor quality of work. Small businesses are extremely reliant on
minimum wage rate to carry out its business tasks. The government group
2

knows that if they increase the wage rate the employment will be reduced due
to increase in costs if it is set above the market clearing wage. For youth their
pay is less than the adults, so they argue for their wage rates. They have to
pay for their fees and own needs. For community group they want their
standard of living to increase but if the price of goods increase they will be
affected. In Australia, up to 40 per cent of employees are directly or indirectly
affected by the Fair Work Commission’s (FWC) annual wage review (Bishop
2018).
ii. Analysis
The main issue faced by the employers is that if their minimum wage rate increases
it will trigger the cost of production of the business which in return will lead to
unemployment to maintain the level of profit predicted. This will cause
unemployment and lesser hours to work. If there is unemployment, it will cause
downfall in the quality of the manufacturing as the workload will increase on each
employee. If the wage rate increases, it will indirectly affect the community as the
prices of goods and services will increase which will result in lower standard of living
whereas if the wage rate is not changed or is lowered thus the businessman will
have more money to reinvest in his business and help the economy to grow through
expanding the business ( David R. Howell 2016). So, it indicates that minimum wage
rate cannot be set above the market clearing wages. Last year there was an
increase of 3.5% in the minimum wage rate which was seen as disincentive by the
Australian industry group chief executive Innes
Willox (Patty 2018). There issues can put the sustainability at risk. There are several
companies which were caught in committing fraud in increasing their profitability in
which one of the biggest names includes 7-eleven (Thornthwaite 2017, p. 263). They
were indulged in wage fraud which indicates that they crossed the social
sustainability. It happens when company fails to comply with the changes in the
wage rate. Consumers are now more aware and are willing to spend more money on
ethical companies, and many customers also call on businesses to be more
transparent in their practices and accountable to all stakeholders. The triple bottom
line is an important tool in supporting the sustainability goals. As the word triple
indicates itself that there are three dimensions which incorporates in this framework
3