MGN410 Case Short Article/Blog

Your real world briefs

Your client is Advance Energy.Advance Energy has a strategy document which positions it into the future.

Research problem

Your topic of discussion is - Work Skills and Routines.

In the light of Advance Energy's strategic target for the employment relationship you are to investigate the research on employment relations and aspects of employment and consider how you (as HR adviser) might help Advance Energy reach its employment relations target.

1.Define your term/s.

2.Investigate the literature around employees and aspects of their employment relationship and your chosen issue. You are aiming for evidence (statistics and quality academic literature) to inform your suggested strategies.

3.Develop specific research question/s and related data sources.

Your task

4.As an individual, you should write (in a journal post/blog with references), explaining why the issue is important and providing advice to Advance Energy about the issue.

THE CASE STUDY

Advance Energy, Australia:Structured for a new strategic employment relationship

Bathurst-based Advance Energy was formed in 1995 as a company from five monopolistic suppliers of electricity in central and far western New South Wales. In the deregulated national energy market, it competes with both inter-national and interstate corporations for a market share. Prior to 1995, consumers could buy electricity only from their local state-owned authority. When the industry was restructured in 1997, separate corporations became responsible for the generation, transmission, distribution and sale of electricity. Customers were no longer confined to regional suppliers and, so, became 'contestable'.

Facing the final phase of deregulation in the electricity supply industry in 2001, Advance Energy sought to increase its market share, from being one of the smallest suppliers to one of the top three in the Australian energy market. Its mission is to be the service provider of choice in the Australian energy industry. In 1997/98, it had an annual turnover of $225 million and employed over 500 people in Sydney, regional New South Wales, and Victoria.

Advance Energy's task environment is marked by strong competition. All suppliers of electricity must buy power from the National Grid, every half hour, at the prevailing price at the time. This places a demanding requirement on any energy supplier to be able to predict accurately the demand for power by its customers, especially for those which operate with fixed price contracts. Financial margins are slim, and profits are sustained on productivity gains via cost cutting (with a lean management structure), worker team empowerment and close attention to strategic, tactical and operational planning and control.

Advance Energy also tries to be 'a good corporate citizen'. Retaining depots in small country towns is seen as expensive but justifiable in terms of public and market relations. Twenty (20) per cent of the company's customer base is Aboriginal, and the company attempts to foster the employment of a similar proportion of Aboriginals in its work force but the rate is currently on 3.65%. Its Aboriginal trainee program, for which it won a commendation in the 1997 Premier's Public Sector Awards, is one measure it has introduced to help build up a staff profile that reflects its customer base. It also encourages staff to broaden their personal cultural awareness and to further their skills through education and training.

However, the key to Advance Energy's success is its relationship with its customers. It carefully benchmarks its success rate in obtaining customers who could choose to use another provider ('contestable' customers) and enthusiastically pursues new customers through careful marketing, service and follow up. The structure of the organization mirrors this strategy and operational process: it is relatively flat, with wide spans of control and empowerment of employees to make whatever decisions are necessary to meet customer needs. The nature of its electricity supply (having to buy power every half hour based on predictions of demand) keeps management planners' eyes firmly on the ball.

In terms of its structure, Advance Energy has focused on creating a flat structure with an emphasis on customer service and profitability, as well as on better internal communication and enhanced external communication. Deliberate efforts have been made to bring the corporate culture into line with the new competitive environment. Each customer has an account manager empowered to take action to satisfy customer needs. Managers are given maximum responsibility and accountability. The organizational structure corresponds to a classical functional model, with general managers for customer delivery areas in addition to general managers of networks, sales and marketing, finance and regulatory affairs, business development and strategy, organizational development, and information services. The general managers, the Managing Director and the Manager Corporate Communications constitute the executive management team.

Advance Energy's Human Resource Team is faced with new and interesting problems in building a new style of employment relationship contract with its staff. New technologies mean new work skills and work routines are constantly under development with the range of work and the discretion at work changing in most roles particularly those dealing with new technologies.Initial research shows that many of the jobs are upskilling toward high discretion jobs with a wide range of tasks often performed through teams of workers functioning with considerable independence in what are high performance teams, while some jobs such as those less connected to technology may at times be deskilled to low discretion work, such as cleaning and maintenance. With the high pressure of the energy industry there are implications for employee wellbeing and the potential for some forms of informal behaviors as employees respond to alienating tendencies at work. Further the importance of employee representation in the workplace is of growing importance to the HR manager who sees this aspect of employee voice providing an important strategic means for HR to contribution to the good corporate citizenship being developed within this organization. In addition, the growing number of new employees from an indigenous background mean there may be a potential for bias or discrimination between employees and between employees and management in some cases.Some elements of the community have been so disadvantaged in the past that special measures may need to be developed to address any past disadvantage and/or work and life issues in a regional community.The energy sector remains one of the least gender diverse sectors in the economy, despite recent efforts to promote and encourage women's participation. Women face structural and cultural challenges and the lack of women in leadership positions in the clean-energy sector compounds the difficulty in recruiting and retaining female leaders. Only 12% of its management team is female; while 83% of its support staff are female.The organization admits that it has never undertaken or considered any gender pay gap analysis.

The Enterprise Agreement for this organization is now out of date and new negotiations are underway.An example of the old Agreement is available with this case for your perusal.

The ASU is Australia's largest union in the energy/electricity industry. The energy and water industries have seen a movement away from government control to a mix of privatized and corporatized entities facing competition that is a mix of state corporatized authorities, private-public partnerships, private water and sewerage treatment plants and local government water authorities/departments. The industries have attracted the attention of Federal and State governments in their pursuit of deregulation, cost efficiency and public-sector reform. This has created avenues for private sector participation, consultants and privatization. Such trends are not unique to Australia but, as in the names and owners of the private sector participants, follow a worldwide trend of reform of utilities.This means the ASU deals not only with public sector departments, corporatized authorities, local government but also the private sector participants including international utility companies. This is a global trend, and the ASU is not alone. International best practice, bench marking against utilities in other Australian States and internationally are commonly pursued by companies and consultants in their drive for efficiency, to stretch governments' budgets further or the pursuit of profit for shareholders.Utilities industry workers need representation, assistance in organising and campaigning to get the message across to management, owners and the community - that's where the ASU comes in.