Rio Tinto Case
GROUP RESEARCH PAPER (Wk. 11)
HRM activities: OH&S and Diversity
Case study: Rio Tinto
In the face of an economic downturn and an environment of increased competition, Human Resource Managers (HRMs) must link traditional HR activities with the organisation’s overall strategic objectives. It is crucial that HRMs are change agents and manage employees effectively to ensure that work is carried out productively. Diversity and Occupational Health and Safety (OHS) activities should not be considered add on objectives within an organisation. Instead, they should be the central focus of managers and leaders within industries, such as Rio Tinto. It is important that during a time of slow economic growth that these activities are not compromised for the achievement of short-term profit objectives. Furthermore, it is crucial that HRMs conjure relevant and beneficial methods of guaranteeing that these activities help to counter the …show more content…
recent decline of commodity prices. The purpose of this essay is to address the concern of the low growth rate for the Australian economy and assess ways in which HRMs can use diversity and OHS activities to facilitate the achievement of their strategic objectives. The relevance of diversity will be assessed followed by ways in which Rio Tinto are acting to achieve set goals for diversity within the organisation. The piece will identify the findings of academic literature regarding the relationship between safety and motivation. Finally, external forces that can act to compromise these key HRM activities will be addressed and factors that need to be monitored identified. These external forces include social factors within Rio Tinto and government laws and regulations that can impact upon the sector’s operations. Employees are one of the last distinguishing niche opportunities of global organisations and therefore it has been identified that investment in diversity and OHS will lead to increased productivity and consequently profitability.
The Reserve Bank is currently predicting a relatively low rate of growth for the Australian Economy. This prediction particularly relates to the Australian resource industry. A major contributory factor to this forecast is the decline in mineral prices, especially that of iron ore which has fallen nearly 20% in the past 6 months (Indexmundi, 2014). This fall in commodity price has led to a reduction in revenue for organisations such as Rio Tinto. This places a significant emphasis on reducing operating expenses to maintain shareholder profitability. Cost cutting can involve the area of OHS, increasing the risks for employees on an everyday basis which is likely to lead to an increase in workplace injuries (Chen & Zorigt, 2013). Reducing recruitment of new staff or even freezing recruiting all together may be another way an organisation seeks to cut their operating costs. In the case of Rio Tinto, such a cut in recruitment would affect their organisational goal of increasing diversity in the workplace. Strategic management of HRM activities such as diversity and OHS can result in organisations gaining a competitive advantage in their industry. This advantage is particularly important in times of low economic growth to ensure the future success of the organisation. HR managers should resist the short-term temptation to cut costs associated with diversity and OHS activities in the workplace as this could negatively affect the achievement of strategic objectives in the long-term.
Rio Tinto, like many other international organisations, aims to attract and embrace the cultural diversity of its workers in order to achieve a competitive advantage. Diversity involves “difference or unlikeness” and in an organizational context managers must seek to use race, ethnic and demographic differences to facilitate the achievement of strategic objectives. (Stone 2014, p. 708). Effective diversity management can lead to a healthy working environment that ensures the social needs of employees, such as acceptance by others and a feeling of inclusiveness and support, are met. Furthermore, this will lead to the benefits of countering the confines of “group-think,” will involve reaching a wider pool of talent and facilitates the development of new and innovative ideas (Stone, 2014). It is integral that global organisations pursue diversity as it is positively correlated with higher work performance and competitive advantage (Stone, 2014). However, poor management of diversity can have the opposite effects. If not properly managed diversity can give rise to discrimination, a poor work environment, abuse and isolation which can be detrimental to workers health and commitment (Stone, 2014). Thus it is crucial that HRMs train and develop employees in diversity management in order to reap the benefits of a diverse workforce. HRM managers should also invest in attracting employees from a variety of backgrounds with different skill sets. For example, Rio Tinto could increase the number of indigenous Australians trained and employed within their sites (Kapelus, 2002). By engaging in socially responsible and ethical behavior, organisations are better able to attract the “best talent” by forming a positive reputation and becoming an “employer of choice” (Stone, 2014). Consequently, an investment in diversity management will lead to the achievement of long-term objectives.
Rio Tinto has recognised the need to focus on the diversity of its workers. In order for the needs of employees to be met, diversity management must not involve a one size fits all approach but must distinguish between different categories of employees and focus on their differing needs. Identifying areas where diversity is lacking and then looking at how this can be addressed by meeting the needs of these underrepresented employees is essential. Rio Tinto “value diversity highly” however suffer from a lack of gender diversity (Rio Tinto, 2009, p. 12). Women make up only 19% of Rio Tinto’s total workforce (Rio Tinto website, 2014a). Therefore it can be argued that Rio Tinto’s diversity management strategy is failing to meet the needs of female employees. Rio Tinto, however, assert that they have a commitment to diversity and have implemented a number of initiatives to encourage gender diversity within the workforce (Workplace Gender Equality Agency, 2013). These include a number of leadership development programs for women, role modelling of successful women in the mining industry, and the provision of flexible working arrangements such as part-time employment, job-sharing, phased retirement, working from home and flexible working hours (Workplace Gender Equality Agency, 2013). However, challenges to meeting the needs of women in the resource sector remain, such as having to work in a male dominated industry and the nature of working conditions such as fly-in, fly-out (FIFO) arrangements may not suit women with family responsibilities. Thus these continuing issues need to be addressed in order for the needs of female employees to be met.
A secure and safe working environment is crucial, as there is consistency within literature that upholding OHS standards is positively correlated with productivity and efficiency (Stone, 2014). In fact, the relationship between safety and motivation is not a new development in HR theory. Safety needs have been integrated into traditional motivation models, such as Maslow’s hierarchy of needs and Hertzberg’s two factor theory (Stone, 2014). According to Maslow’s needs hierarchy theory, the need for a safe and healthy working environment is a “lower-order need” (Stone, 2014). This means that after the basic physiological needs for food, water, shelter etc are met, unless an employee’s safety needs are satisfied, it is not possible to meet the higher order social, esteem and self-actualisation needs (Stone, 2014). Effective management of OHS provides many benefits to an organisation including “less absenteeism, higher productivity, lower health benefit costs, reduced workers compensation charges, lower labour turnover and increased attraction as an employer of choice” (Stone, 2014, p. 670). However, from an employee perspective, it also has the ability to meet their safety needs. Importantly, it is employees who are directly affected by OHS; it is their lives and limbs at risk when OHS management fails them (Gunningham, 2008). There may be some benefit in looking at the specific safety needs of older workers, as these are likely to differ from younger workers. The literature suggests that there are a number of factors which impact on effective OHS management such as investment, the integration of OHS management with other management systems and total quality management and organisational culture (Chen & Zorigt, 2013). Worker participation, that is the involvement of employees in the identification, assessment and control of workplace hazards, is also important (Gunningham, 2008).
Rio Tinto operates in the mining industry, which is one of Australia’s most dangerous industries with a fatality rate double that of the national average (Gunningham, 2008). In Western Australia, 5% of the workforce is employed in the mining industry, however over 25% of workplace fatalities that occur in the state are within the mining sector (Gunningham, 2008). The main types of occupational illness Rio Tinto’s employees suffer from are related to musco-skeletal disorders, noise-induced hearing loss and stress (Rio Tinto, 2014c). There are also specific OHS concerns Rio Tinto faces in relation to the culture of FIFO workers which will be discussed in more detail below. Rio Tinto emphasise that they are “committed to an incident and injury free workplace” and “committed to protecting health and well-being” (Rio Tinto, 2009, p. 11). As such, there are a number of OHS management strategies that Rio Tinto are implementing in order to meet the health and safety needs of their employees. They have an integrated safety approach focusing on reduction of injuries, elimination of fatalities and catastrophic safety risk management (Rio Tinto, 2014b). Rio Tinto are also focusing on strengthening safety leadership and creating a positive safety culture of “zero harm” (Rio Tinto, 2014b). These programs have helped Rio Tinto reduce their all injury frequency rate by 20% over the last 5 years demonstrating that Rio Tinto are striving to meet their employee’s safety needs (Rio Tinto, 2014b). Rio Tinto also have a custom-built Health, Safety, Environment and Quality (HSEQ) management system which has led to an increase in employee’s awareness of health issues and improvements in performance (Rio Tinto, 2014c). In particular, Rio Tinto achieved a 68% reduction in cases of occupational illness per 10,000 employees between 2008 and 2013 (Rio Tinto, 2014c). Rio Tinto, also support their employees to lead a healthy lifestyle to reduce the health-related risks of fatigue, stress and obesity. They recognise that as their workforce ages, muscoskeletal conditions and heart disease will become more common. In 2013, Rio Tinto developed a fatigue semi-quantitative risk assessment (SQRA) tool, used bio-mathematical modelling to improve shift roster designs and quantify actual fatigue risk and other health related factors (Rio Tinto, 2014c). They also conducted a mental health review to look at differences between their current mental health strategy and global best practice.
The social factor of the external environment incorporates community expectations in areas such as work-life balance, status, race, and job security. Social expectations are that organisations will support and promote diversity within the workplace. The resource industry is more affected by social factors than other industries due to the isolated nature of their worksites. Aside from high risk activities, a major concern of HRMs within this sector may include a culture of FIFO workers. This involves employees who travel to a “remote work site” for a designated period of time away from where they normally reside (Stone, 2014, p. 671). Evidence suggests that the FIFO environment leads to higher levels of “violence, drunkenness and drug taking” (Stone, 2014, p. 671). This culture also sets a foundation for poor health including smoking and obesity (Stone, 2014, p. 672). In addition, the deficit of diversity amongst workers, such as gender or ethnicity, can give rise to unhealthy work behaviours. Male dominated remote towns are known for having high levels of prostitution and adult entertainment, which highlights the increased risk of sexual harassment within the workplace compared with that of other industries. The reduction in the use of FIFO arrangements and equalisation of the gender ratio could assist in reducing the number of employee mental health issues. Achieving a healthy work-life balance is becoming a strong value within society.
Legal and regulatory factors from the external environment are another influence on the HR activities of a company such as Rio Tinto. HRMs must adhere to laws regarding discrimination and equal employment opportunity. In order for a company to succeed, these areas, as well as other laws must be taken into serious consideration and dealt with efficiently. According to Rio Tinto, they are a company that is committed to providing a workplace that is free from any form of discrimination, harassment and victimization. As such, Rio Tinto aims to embed equal employment opportunity (EEO) and anti discriminatory practices into every aspects of the companies operations by creating their own policies (Human Resources Policy, n.d) The main purpose of EEO laws is to ensure that everyone has an equal opportunity of getting employed and being promoted in an organization. All individuals are covered under EEO laws. However, whether a company actively engages in these laws and abides by them is not clear in many industries. EEO laws are designed to protect people from being discriminated in terms of gender, age, ethnic, race etc. (Stone, 2014). Rio Tinto aims to provide a fair and meritorious workplace in all employment related systems, procedures and policies in order to develop a workplace free from harassment as well as discrimination (Human Resources Policy, n.d). As explained earlier, women make up only 19% of Rio Tinto’s total workforce (Rio Tinto website, 2014a). Thus, it is questionable if Rio Tinto is meeting its obligations under these laws. However, it is argued by Rio Tinto that women are not employed in on-site work because of local gender stereotypes, giving rise to the gap in the men to women ratio in the mining industry (Rio Tinto, 2013). In order to regain control as a world leader in the mining industry, Rio Tinto has to diversify itself in terms of hiring and promoting a somewhat equal number of women employees in comparison to men in order to achieve a competitive advantage. It is important that HRMs ensure that within a global organisation, they maintain an ethnocentric orientation toward OHS needs globally. This should be done instead of a polycentric approach that may try to cut costs within other overseas plants where OHS policies are not as strict as Australia. By maintaining a universal high standard of OHS standards, Rio Tinto can maintain a superior standing amongst competitors.
Another legal concern that must be monitored is sexual harassment.
Sexual harassment comes in many forms including physical, verbal or visual. Any unwelcome or uninvited conduct of a sexual nature that a normal person would find disturbing, humiliating or offensive will be deemed as sexual harassment. This may include uninvited physical contact, sexual comments, intrusive questions as well as staring or leering (Fredman, 1997). In order to avoid this issue, Rio Tinto has set up a professional counseling service through the ‘Employee Assistance program’ for employees of Rio Tinto who believe that they have been subjected to any form of this inappropriate behavior. (REF?) In 2012, Kylie Thompson, a secretary in Rio Tinto claimed to have been sexually harassed by her manager (Rusell, 2012). This still being investigated and is a perfect example that sexual harassment is indeed an issue for Rio Tinto. Rio Tinto needs to be sure to enforce stronger sexual harassments regulations to uphold a positive and reliable reputation within the
industry.
Diversity and OHS play a significant role within organisations and can determine the success or failure of an organization’s strategic objectives. It has been identified that embracing diversity can lead to new and innovative thinking, a positive working environment and reduce the threat of sexual harassment. In addition, ensuring OHS policies are upheld can facilitate the achievement of motivation and commitment from workers. It is essential that even within times of slow growth industries maintain a long-term perspective and do not cut costs to achieve a short term boost in profitability. Rio Tinto have identified and facilitated opportunities to embrace diversity and OHS through programs such as their leadership program for women and creation of a semi-quantitative risk assessment (SQRA) tool. However it has been recognised that they must maintain a close focus on these HR activities in order to achieve their set out objectives of a safe and diverse workforce. HRM must also closely monitor the external environment that can involve social and legal forces. By acknowledging these aspects of the environment Rio Tinto can establish and sustain a reputable name within the industry. Therefore a holistic approach to ensuring diversity and OHS needs are met within the organisation can lead to competitive advantage and the achievement of strategic objectives in spite of the economic climate.
WORD COUNT: 2743
REFERENCES:
Australian Government Workplace Gender Equality Agency. (2013). Women in Non-traditional Roles: Rio Tinto Iron Ore Case Study. Retrieved 4 May, 2014 from https://www.wgea.gov.au/sites/default/files/Rio_Tinto_case%20study_new%20template_tag.pdf
Chen, J. & Zorigt, D. (2013). Managing occupational health and safety in the mining industry. Journal of Business Research, 66: 2321-2331.
Child Family Community Australia (CFCA). (2014). Fly-in fly-out workforce practices in Australia: The effects on children and family relationships (CFCA Report No. 19 2014). Melbourne, Australia. Meredith, P., Rush, P. & Robinson, E.
Fredman, S. (1997). Women and the law. New York: Oxford University Press
Gunningham, N. (2008). Occupational Health and Safety, Worker Participation and the Mining Industry in a Changing World of Work. Economic and Industrial Democracy, 29(3): 336-361. Doi: 10.1177/0143831X08092460
Human Resources Policy. (n.d.). In Working with Rio Tinto Alcan. Retrieved from http://www.weipatownoffice.com/appendix_13___equal_employment_opportunity_policy.pdf
Indexmundi. (2014, May 24). Iron Ore Monthly Price. Retrieved: May 24, 2014, from http://www.indexmundi.com/commodities/?commodity=iron-ore
Kapelus, P. (2002). Mining, corporate social responsibility and the “community”: The Case of Rio Tinto, Journal of Business Ethics 39(2), pp. 275-296.
Stone, R. J. (2014). Human Resource Management (8th ed.) Milton Qld, Australia: John Wiley & Sons.
Rio Tinto. (2009). The way we work. Retrieved 4 May, 2014 from http://www.riotinto.com/documents/The_way_we_work.pdf
Rio Tinto. (2013). Why human rights matter. Retrieved 12 May, 2014 from http://www.riotinto.com/documents/ReportsPublications/Rio_Tinto_human_rights_guide_background_reader-English_version.pdf
Rio Tinto. (2014a). Investing in, and engaging, our workforce. Retrieved 4 May, 2014 from http://www.riotinto.com/sustainabledevelopment2013/social/people.html
Rio Tinto (2014b). Building a zero harm culture. Retrieved 4 May, 2014 from http://www.riotinto.com/sustainabledevelopment2013/social/safety.html
Rio Tinto (2014c). Minimising health risks in the workplace. Retrieved 4 May, 2014 from http://www.riotinto.com/sustainabledevelopment2013/social/health/managing-occupational-health-risks.html
Rusell, M. (2012). Secretary jailed for $340K mining-giant theft. The Age. Retrieved from http://www.theage.com.au/victoria/secretary-jailed-for-340k-mininggiant-theft-20120622-20s2r.html
Whitley, A. (2011, August 29). Loneliness Dogs the Well-paid Aussie Miner. Bloomberg Businessweek, p17.
HRM activities: OH&S and Diversity
Case study: Rio Tinto
In the face of an economic downturn and an environment of increased competition, Human Resource Managers (HRMs) must link traditional HR activities with the organisation’s overall strategic objectives. It is crucial that HRMs are change agents and manage employees effectively to ensure that work is carried out productively. Diversity and Occupational Health and Safety (OHS) activities should not be considered add on objectives within an organisation. Instead, they should be the central focus of managers and leaders within industries, such as Rio Tinto. It is important that during a time of slow economic growth that these activities are not compromised for the achievement of short-term profit objectives. Furthermore, it is crucial that HRMs conjure relevant and beneficial methods of guaranteeing that these activities help to counter the …show more content…
recent decline of commodity prices. The purpose of this essay is to address the concern of the low growth rate for the Australian economy and assess ways in which HRMs can use diversity and OHS activities to facilitate the achievement of their strategic objectives. The relevance of diversity will be assessed followed by ways in which Rio Tinto are acting to achieve set goals for diversity within the organisation. The piece will identify the findings of academic literature regarding the relationship between safety and motivation. Finally, external forces that can act to compromise these key HRM activities will be addressed and factors that need to be monitored identified. These external forces include social factors within Rio Tinto and government laws and regulations that can impact upon the sector’s operations. Employees are one of the last distinguishing niche opportunities of global organisations and therefore it has been identified that investment in diversity and OHS will lead to increased productivity and consequently profitability.
The Reserve Bank is currently predicting a relatively low rate of growth for the Australian Economy. This prediction particularly relates to the Australian resource industry. A major contributory factor to this forecast is the decline in mineral prices, especially that of iron ore which has fallen nearly 20% in the past 6 months (Indexmundi, 2014). This fall in commodity price has led to a reduction in revenue for organisations such as Rio Tinto. This places a significant emphasis on reducing operating expenses to maintain shareholder profitability. Cost cutting can involve the area of OHS, increasing the risks for employees on an everyday basis which is likely to lead to an increase in workplace injuries (Chen & Zorigt, 2013). Reducing recruitment of new staff or even freezing recruiting all together may be another way an organisation seeks to cut their operating costs. In the case of Rio Tinto, such a cut in recruitment would affect their organisational goal of increasing diversity in the workplace. Strategic management of HRM activities such as diversity and OHS can result in organisations gaining a competitive advantage in their industry. This advantage is particularly important in times of low economic growth to ensure the future success of the organisation. HR managers should resist the short-term temptation to cut costs associated with diversity and OHS activities in the workplace as this could negatively affect the achievement of strategic objectives in the long-term.
Rio Tinto, like many other international organisations, aims to attract and embrace the cultural diversity of its workers in order to achieve a competitive advantage. Diversity involves “difference or unlikeness” and in an organizational context managers must seek to use race, ethnic and demographic differences to facilitate the achievement of strategic objectives. (Stone 2014, p. 708). Effective diversity management can lead to a healthy working environment that ensures the social needs of employees, such as acceptance by others and a feeling of inclusiveness and support, are met. Furthermore, this will lead to the benefits of countering the confines of “group-think,” will involve reaching a wider pool of talent and facilitates the development of new and innovative ideas (Stone, 2014). It is integral that global organisations pursue diversity as it is positively correlated with higher work performance and competitive advantage (Stone, 2014). However, poor management of diversity can have the opposite effects. If not properly managed diversity can give rise to discrimination, a poor work environment, abuse and isolation which can be detrimental to workers health and commitment (Stone, 2014). Thus it is crucial that HRMs train and develop employees in diversity management in order to reap the benefits of a diverse workforce. HRM managers should also invest in attracting employees from a variety of backgrounds with different skill sets. For example, Rio Tinto could increase the number of indigenous Australians trained and employed within their sites (Kapelus, 2002). By engaging in socially responsible and ethical behavior, organisations are better able to attract the “best talent” by forming a positive reputation and becoming an “employer of choice” (Stone, 2014). Consequently, an investment in diversity management will lead to the achievement of long-term objectives.
Rio Tinto has recognised the need to focus on the diversity of its workers. In order for the needs of employees to be met, diversity management must not involve a one size fits all approach but must distinguish between different categories of employees and focus on their differing needs. Identifying areas where diversity is lacking and then looking at how this can be addressed by meeting the needs of these underrepresented employees is essential. Rio Tinto “value diversity highly” however suffer from a lack of gender diversity (Rio Tinto, 2009, p. 12). Women make up only 19% of Rio Tinto’s total workforce (Rio Tinto website, 2014a). Therefore it can be argued that Rio Tinto’s diversity management strategy is failing to meet the needs of female employees. Rio Tinto, however, assert that they have a commitment to diversity and have implemented a number of initiatives to encourage gender diversity within the workforce (Workplace Gender Equality Agency, 2013). These include a number of leadership development programs for women, role modelling of successful women in the mining industry, and the provision of flexible working arrangements such as part-time employment, job-sharing, phased retirement, working from home and flexible working hours (Workplace Gender Equality Agency, 2013). However, challenges to meeting the needs of women in the resource sector remain, such as having to work in a male dominated industry and the nature of working conditions such as fly-in, fly-out (FIFO) arrangements may not suit women with family responsibilities. Thus these continuing issues need to be addressed in order for the needs of female employees to be met.
A secure and safe working environment is crucial, as there is consistency within literature that upholding OHS standards is positively correlated with productivity and efficiency (Stone, 2014). In fact, the relationship between safety and motivation is not a new development in HR theory. Safety needs have been integrated into traditional motivation models, such as Maslow’s hierarchy of needs and Hertzberg’s two factor theory (Stone, 2014). According to Maslow’s needs hierarchy theory, the need for a safe and healthy working environment is a “lower-order need” (Stone, 2014). This means that after the basic physiological needs for food, water, shelter etc are met, unless an employee’s safety needs are satisfied, it is not possible to meet the higher order social, esteem and self-actualisation needs (Stone, 2014). Effective management of OHS provides many benefits to an organisation including “less absenteeism, higher productivity, lower health benefit costs, reduced workers compensation charges, lower labour turnover and increased attraction as an employer of choice” (Stone, 2014, p. 670). However, from an employee perspective, it also has the ability to meet their safety needs. Importantly, it is employees who are directly affected by OHS; it is their lives and limbs at risk when OHS management fails them (Gunningham, 2008). There may be some benefit in looking at the specific safety needs of older workers, as these are likely to differ from younger workers. The literature suggests that there are a number of factors which impact on effective OHS management such as investment, the integration of OHS management with other management systems and total quality management and organisational culture (Chen & Zorigt, 2013). Worker participation, that is the involvement of employees in the identification, assessment and control of workplace hazards, is also important (Gunningham, 2008).
Rio Tinto operates in the mining industry, which is one of Australia’s most dangerous industries with a fatality rate double that of the national average (Gunningham, 2008). In Western Australia, 5% of the workforce is employed in the mining industry, however over 25% of workplace fatalities that occur in the state are within the mining sector (Gunningham, 2008). The main types of occupational illness Rio Tinto’s employees suffer from are related to musco-skeletal disorders, noise-induced hearing loss and stress (Rio Tinto, 2014c). There are also specific OHS concerns Rio Tinto faces in relation to the culture of FIFO workers which will be discussed in more detail below. Rio Tinto emphasise that they are “committed to an incident and injury free workplace” and “committed to protecting health and well-being” (Rio Tinto, 2009, p. 11). As such, there are a number of OHS management strategies that Rio Tinto are implementing in order to meet the health and safety needs of their employees. They have an integrated safety approach focusing on reduction of injuries, elimination of fatalities and catastrophic safety risk management (Rio Tinto, 2014b). Rio Tinto are also focusing on strengthening safety leadership and creating a positive safety culture of “zero harm” (Rio Tinto, 2014b). These programs have helped Rio Tinto reduce their all injury frequency rate by 20% over the last 5 years demonstrating that Rio Tinto are striving to meet their employee’s safety needs (Rio Tinto, 2014b). Rio Tinto also have a custom-built Health, Safety, Environment and Quality (HSEQ) management system which has led to an increase in employee’s awareness of health issues and improvements in performance (Rio Tinto, 2014c). In particular, Rio Tinto achieved a 68% reduction in cases of occupational illness per 10,000 employees between 2008 and 2013 (Rio Tinto, 2014c). Rio Tinto, also support their employees to lead a healthy lifestyle to reduce the health-related risks of fatigue, stress and obesity. They recognise that as their workforce ages, muscoskeletal conditions and heart disease will become more common. In 2013, Rio Tinto developed a fatigue semi-quantitative risk assessment (SQRA) tool, used bio-mathematical modelling to improve shift roster designs and quantify actual fatigue risk and other health related factors (Rio Tinto, 2014c). They also conducted a mental health review to look at differences between their current mental health strategy and global best practice.
The social factor of the external environment incorporates community expectations in areas such as work-life balance, status, race, and job security. Social expectations are that organisations will support and promote diversity within the workplace. The resource industry is more affected by social factors than other industries due to the isolated nature of their worksites. Aside from high risk activities, a major concern of HRMs within this sector may include a culture of FIFO workers. This involves employees who travel to a “remote work site” for a designated period of time away from where they normally reside (Stone, 2014, p. 671). Evidence suggests that the FIFO environment leads to higher levels of “violence, drunkenness and drug taking” (Stone, 2014, p. 671). This culture also sets a foundation for poor health including smoking and obesity (Stone, 2014, p. 672). In addition, the deficit of diversity amongst workers, such as gender or ethnicity, can give rise to unhealthy work behaviours. Male dominated remote towns are known for having high levels of prostitution and adult entertainment, which highlights the increased risk of sexual harassment within the workplace compared with that of other industries. The reduction in the use of FIFO arrangements and equalisation of the gender ratio could assist in reducing the number of employee mental health issues. Achieving a healthy work-life balance is becoming a strong value within society.
Legal and regulatory factors from the external environment are another influence on the HR activities of a company such as Rio Tinto. HRMs must adhere to laws regarding discrimination and equal employment opportunity. In order for a company to succeed, these areas, as well as other laws must be taken into serious consideration and dealt with efficiently. According to Rio Tinto, they are a company that is committed to providing a workplace that is free from any form of discrimination, harassment and victimization. As such, Rio Tinto aims to embed equal employment opportunity (EEO) and anti discriminatory practices into every aspects of the companies operations by creating their own policies (Human Resources Policy, n.d) The main purpose of EEO laws is to ensure that everyone has an equal opportunity of getting employed and being promoted in an organization. All individuals are covered under EEO laws. However, whether a company actively engages in these laws and abides by them is not clear in many industries. EEO laws are designed to protect people from being discriminated in terms of gender, age, ethnic, race etc. (Stone, 2014). Rio Tinto aims to provide a fair and meritorious workplace in all employment related systems, procedures and policies in order to develop a workplace free from harassment as well as discrimination (Human Resources Policy, n.d). As explained earlier, women make up only 19% of Rio Tinto’s total workforce (Rio Tinto website, 2014a). Thus, it is questionable if Rio Tinto is meeting its obligations under these laws. However, it is argued by Rio Tinto that women are not employed in on-site work because of local gender stereotypes, giving rise to the gap in the men to women ratio in the mining industry (Rio Tinto, 2013). In order to regain control as a world leader in the mining industry, Rio Tinto has to diversify itself in terms of hiring and promoting a somewhat equal number of women employees in comparison to men in order to achieve a competitive advantage. It is important that HRMs ensure that within a global organisation, they maintain an ethnocentric orientation toward OHS needs globally. This should be done instead of a polycentric approach that may try to cut costs within other overseas plants where OHS policies are not as strict as Australia. By maintaining a universal high standard of OHS standards, Rio Tinto can maintain a superior standing amongst competitors.
Another legal concern that must be monitored is sexual harassment.
Sexual harassment comes in many forms including physical, verbal or visual. Any unwelcome or uninvited conduct of a sexual nature that a normal person would find disturbing, humiliating or offensive will be deemed as sexual harassment. This may include uninvited physical contact, sexual comments, intrusive questions as well as staring or leering (Fredman, 1997). In order to avoid this issue, Rio Tinto has set up a professional counseling service through the ‘Employee Assistance program’ for employees of Rio Tinto who believe that they have been subjected to any form of this inappropriate behavior. (REF?) In 2012, Kylie Thompson, a secretary in Rio Tinto claimed to have been sexually harassed by her manager (Rusell, 2012). This still being investigated and is a perfect example that sexual harassment is indeed an issue for Rio Tinto. Rio Tinto needs to be sure to enforce stronger sexual harassments regulations to uphold a positive and reliable reputation within the
industry.
Diversity and OHS play a significant role within organisations and can determine the success or failure of an organization’s strategic objectives. It has been identified that embracing diversity can lead to new and innovative thinking, a positive working environment and reduce the threat of sexual harassment. In addition, ensuring OHS policies are upheld can facilitate the achievement of motivation and commitment from workers. It is essential that even within times of slow growth industries maintain a long-term perspective and do not cut costs to achieve a short term boost in profitability. Rio Tinto have identified and facilitated opportunities to embrace diversity and OHS through programs such as their leadership program for women and creation of a semi-quantitative risk assessment (SQRA) tool. However it has been recognised that they must maintain a close focus on these HR activities in order to achieve their set out objectives of a safe and diverse workforce. HRM must also closely monitor the external environment that can involve social and legal forces. By acknowledging these aspects of the environment Rio Tinto can establish and sustain a reputable name within the industry. Therefore a holistic approach to ensuring diversity and OHS needs are met within the organisation can lead to competitive advantage and the achievement of strategic objectives in spite of the economic climate.
WORD COUNT: 2743
REFERENCES:
Australian Government Workplace Gender Equality Agency. (2013). Women in Non-traditional Roles: Rio Tinto Iron Ore Case Study. Retrieved 4 May, 2014 from https://www.wgea.gov.au/sites/default/files/Rio_Tinto_case%20study_new%20template_tag.pdf
Chen, J. & Zorigt, D. (2013). Managing occupational health and safety in the mining industry. Journal of Business Research, 66: 2321-2331.
Child Family Community Australia (CFCA). (2014). Fly-in fly-out workforce practices in Australia: The effects on children and family relationships (CFCA Report No. 19 2014). Melbourne, Australia. Meredith, P., Rush, P. & Robinson, E.
Fredman, S. (1997). Women and the law. New York: Oxford University Press
Gunningham, N. (2008). Occupational Health and Safety, Worker Participation and the Mining Industry in a Changing World of Work. Economic and Industrial Democracy, 29(3): 336-361. Doi: 10.1177/0143831X08092460
Human Resources Policy. (n.d.). In Working with Rio Tinto Alcan. Retrieved from http://www.weipatownoffice.com/appendix_13___equal_employment_opportunity_policy.pdf
Indexmundi. (2014, May 24). Iron Ore Monthly Price. Retrieved: May 24, 2014, from http://www.indexmundi.com/commodities/?commodity=iron-ore
Kapelus, P. (2002). Mining, corporate social responsibility and the “community”: The Case of Rio Tinto, Journal of Business Ethics 39(2), pp. 275-296.
Stone, R. J. (2014). Human Resource Management (8th ed.) Milton Qld, Australia: John Wiley & Sons.
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