HRM Strategies to Address Coles Supermarket Underpayment Scandal

This report analyzes the Coles Supermarket underpayment scandal, examining the issue's implications from both employer and employee perspectives. It delves into the major themes, including wage theft and ethical breaches, and explores the perspectives of both Coles management and affected employees. The report applies various HRM models, such as Fombrun's cycle and SHRM models, to understand the situation and propose effective solutions. It also considers internal and external factors affecting the situation, such as leadership and communication. As an HR manager, the report suggests implementing strategies like scientific management theory, human relation theory, and labor process theory to resolve the issue. These strategies aim to improve employee relations, ensure fair payment practices, and minimize future occurrences of underpayment. The report concludes by emphasizing the importance of proactive HRM practices in addressing and preventing such issues, ultimately contributing to a more ethical and sustainable business environment. The report uses at least five high-quality journal articles to support its findings.

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Table of Contents
Introduction......................................................................................................................................2
Issue.................................................................................................................................................2
Link..................................................................................................................................................3
HRM model..................................................................................................................................3
SHRM models..............................................................................................................................4
Factors..........................................................................................................................................4
Perspective...................................................................................................................................5
Implications.....................................................................................................................................5
Resolving the issue..........................................................................................................................5
Conclusion.......................................................................................................................................6
Bibliography....................................................................................................................................7

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Introduction
Coles is known as the Australian supermarket, retail, and customer services chain.
Headquarter of the organization is in Melbourne. This organization was founded by George
Coles in 1914 in Collingwood. This organization operates more than 800 supermarkets
throughout Australia. This organization has more than 10000 employees and also provides online
shopping services (Patty & Powell, 2020). The following discussion will cover the issue on the
topic of Cole's supermarket underpayment scandal and the support of the HR manager to resolve
the issue.
Issue
It has been founded within the research that Cole’s supermarket is known as the second
biggest chain of grocery which underpaid the managers of stores for more than six years. The
organization's wages scandal has affected many big organizations and crimping half-year profits.
It has been founded within the research that the organization has underpaid five percent of
managers of supermarkets and liquor outlets. The organization had expected that $20m hit after
underpayment of management at supermarkets (Kaye & Jose, 2020).
The perspective of the employers was that business has the objective to make a great
place for work and apologize to employees that unintentionally affected, it was said by the CEO
Steven Cain within the statement (Druce, 2020). Further, he added that the amount may change
while a review into the back payments was ongoing. The organization implored to invest and
redirect the sources to confirm that employees paid properly and basic law within the
organization is followed. The underpayment provision of Coles prompted the federal government
to say that is will introduce the criminalized that is called wage theft and banning the individual
from being organization directors if presided over underpayment (The Guardian, 2020).
Employees have the perspective that it was disappointed disclosure of the organization
regarding the underpayment issues. This was still not clear that the company is required to
implement more efforts to motivate employees and improve their performance. Employees have
the perspective that the National Secretary of the organization will appear to be within the SDA
audit to provide the benefits (Hall, 2020).

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Link
It will be important to identify and solve business issues such as underpayment of wages
and effectively contribute to achieving long-term business goals.
HRM model
HRM models will remain effective for Coles. HRM models are effective to explain the
HR roles within the organization. Five HRM models explain the role of HR and how it adds the
values and how HR influences the business (Managementstudy, 2020). The following are HRM
models.
 Fombrun’s human source cycle model
This model will work for the HR management of Coles to make the appropriate strategies with
professionals, management, and labor force to handle the underpayment scandal issue. This will
help HR management to align the structure of organization, policies, and strategies with the
human resource system to handle the underpayment scandal.
 The Harvard framework regarding human resource management
This HRM model to solve the underpayment scandal within the Coles will focus on the many
situational factors like stakeholder’s interest, feedback approaches, and long-term process to gain
effective results.
 Guest’s model
This HRM model will help the department of HR in Coles to make the assumptions and start
particular strategies that bring positive results. This will work to develop integrated practices that
lead to an increase in the employees and organizational performance.
 Storey’s soft and hard HRM practices model
This HRM model will support the management of Coles to focus on the idea of tight strategic
control. The soft form of the model will help the business to focus and fill the gap between the
reality and rhetoric side of workplace management.

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SHRM models
SHRM presents the procedure to align the business strategies with the organization's
human resource practices. There are four types of SHRM models which are as follow which will
help the Coles management to handle the underpayment scandal.
 Organizational SHRM content models
There are two significant models known as Labelle and Wils. Labelle will be an important factor
for HRM management to implement the appropriate strategies to handle the underpayment
scandal. Wils will be influenced by the external and internal environment factors within the
Coles and make the strategies according to them.
 Functional SHRM content models
It includes the external fit in which practices of HRM fit the organization development stage and
internal fit present the HRM components and support each other.
 Organizational SHRM process models
This model will work for Coles to improve organizational effectiveness by integrating the
strategic planning and functions of management with the human resource to solve the
underpayment scandal.
 Functional SHRM models
This will be effective for HRM in Coles to determine the performance capability of the
organization through the appropriate management approach and assessment in advance.
Factors
External factors which will affect the Coles HRM to handle the underpayment scandal
are attitude, motivation, learning, roles, perception, and lifestyle, within the workplace. Internal
factors that will affect the Coles HRM to handle the underpayment scandal are communication,
behavior, and leadership.

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Perspective
Perspective on the relationship of employment will contribute to analyze the
underpayment scandal within the Coles through Unitarism, theory. Unitarism theory will help the
HRM of Coles to focus on one source of authority without the negotiations. This suggests that
centralized leadership will help Coles HR to function the work effectively.
Implications
Internal and external factors influence the behavior of employees and help to achieve the
desire organization objectives (Haider, et al., 2015).
 Lack of leadership and poor communication
Leadership and communication of the organization is work as internal influencers (Verma,
2013). Leadership in Coles is required more skills and knowledge to manage the work properly.
HRM within the Coles should direct leadership to work with proper communication. HRM
should implement the training programs to increase the communication skills and leadership
skills that lead to solving business issues such as the underpayment scandal.
 Lasso as the external factor affect behavior at work
External factors affect behavior within the workplace (Kagema, 2018). HRM within the Coles
should focus on the external factors as it affects the business at a large level and creates conflicts
that lead to the loss within the business. HRM to solve these kinds of issues should analyze the
business environment and focus on the appropriate methods such as workplace behavior,
positivity, creativity, and many more.
Resolving the issue
To resolving the issue as the HR manager will suggest and apply the scientific
management theory. This will help to implement effective management practices about
appropriate payments of work. It will also help to minimize the conflicts with the management
and improve the employee’s activities within the workplace (Cascio, & Boudreau, 2016). As an
HR will apply the management approaches to build a relationship with employees and seek to

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suppress the issues and ensure that management retains the knowledge and authority to do the
regular auditing regarding the management of books of accounts and payment to all employees.
Implement the human relation theory that helps to achieve self-fulfillment regarding
work and payment within the Coles. As an HR will develop the many training programs for the
personal well-being of employees and seeks to minimize the internal issues by developing a
sense of satisfaction within the organization and involve them with the regulation of work.
As an HR will apply the labor process theory which helps to draw the sociological
assumption by the presence of a class-based value system and serve a good relationship with
employees and organizations. This will increase the beneficial interest within the employees for
the organization and organization management will also work for the well-being of employees
by implementing the accurate process for increasing the facilities, services policies and payment
methods.
Conclusion
In the limelight of the discussion, it can be concluded that Coles faced the issues
regarding the underpayment of employees. Coles has implemented many strategies to solve this
kind of critical issues. Further discussion covers that as an HR applied the theories such as labor
process and human relation to circulate the business objectives and implement the effective
process to pay the employees according to their role and improve their skills by many programs.

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Bibliography
Cascio, W. F., & Boudreau, J. W. (2016). The search for global competence: From international
HR to talent management. Journal of World Business, 51(1), 103-114.
Druce, A. (2020, 02 18). Coles Flags $20m hit from wage underpayments. Retrieved from in
daily: https://indaily.com.au/news/business/2020/02/18/coles-flags-20m-hit-from-wage-
underpayments/
Haider, M., Rasli, A., Akhtar, C. S., Yusoff, R. B. M., Malik, O. M., Aamir, A., ... & Tariq, F.
(2015). The impact of human resource practices on employee retention in the telecom
sector. International Journal of Economics and Financial Issues, 5(1S), 63-69.
Hall, J. (2020, 03 25). Supermarket giant Coles reveals staff payment issues, sets aside $20
million to cover costs. Retrieved from News.com:
https://www.news.com.au/finance/business/retail/supermarket-giant-coles-reveals-staff-
payment-issue-setting-aside-20-million-to-cover-costs/news-story/
ed9a01f9d2d1200c7dcaa52cae4183f8
Kagema, D. N. (2018). Responsible Leadership and Sustainable Development in Post-
Independent Africa: A Kenyan Experience. The Journal of Values-Based
Leadership, 11(1), 9-10.
Kaye, B., & Jose, R. (2020, 02 18). Australia's Coles reports staff underpayment, flat first-half
profit. Retrieved from Reuters:
https://www.reuters.com/article/us-coles-grp-results/australias-coles-reports-staff-
underpayment-flat-first-half-profit-idUSKBN20C06U
Management study. (2020, 03 25). Human Resource Management Models. Retrieved from
managementstudyhq: https://www.managementstudyhq.com/hrm-models.html
Patty, A., & Powell, D. (2020, 02 18). The government tells companies to 'get a house in order'
after Coles workers underpaid. Retrieved from SMH:

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https://www.smh.com.au/business/companies/coles-store-managers-underpaid-20-
million-over-six-years-20200218-p541ry.html
The Guardian. (2020, 02 18). Coles underpaid workers by $20m over six years. Retrieved from
the guardian: https://www.theguardian.com/business/2020/feb/18/coles-underpaid-
workers-by-20m-over-six-years
Verma, D. (2013). Communication: Necessary Leadership Skills. Management Guru: Journal of
Management Research, (2), 95-101.