FREE ESSAY ON CANNINGTON

CANNINGTON

Cannington Remuneration Policy Investigation.
The organisation studied for the purpose of this investigation is Broken Hill Proprietary
/ Limited (B.H.P.). B.H.P. is Australia's largest company and was ranked 125th on the
fortune global 500 list of the worlds largest industrial companies in 1993. The company
was incorporated in 1885 and began mining silver , lead and zinc at Broken Hill in NSW 
Cannington is BHP's latest mine which is still yet to officially open, the mine was a
Greenfield site discovered in June 1990. BHP is currently evaluating a world class silver
lead and zinc deposit located in Cannington near McKinlay, North Queensland The company
currently hold a mining permit for 7660 hectares in the area, it is estimated to be the
largest silver mine in the world.
The general context of the policy is focused on the change of attitude between management
and staff on the Cannington site and the out come of the specific remuneration policy
will hopefully be to attract and retain a good team of employees in order to recognise
the value of the BHP workers and to extract maximum wealth from Cannington silver, lead
and zinc deposits.
By undertaking this investigation I hope to achieve a better understanding of the
remuneration policy and how and why the policy was changed in the beginning of the
Cannington project. I will also hope to achieve an understanding of future direction.
To complete this investigation I will use information about the previous and current
remuneration policies related to previous projects completed by BHP. I will also
investigate, the pressures involved to inspire the Human Resource Management Department
to change the policy, the new policy, and the desired effect the change is designed to
have on the current mining site. I will also explain the effect the remuneration policy
will have on structures and the effect it will have on activities of the business as well
as the evaluation process used by the management to ensure that these policies are
working.
I have obtained this information from a lecture given by Glenn Morrow the manager of the
Human Resource (H.R.M.)Dept. at BHP. Mr Morrow gave a speech on the organisation in which
I am investigating and also on the Cannington site in particular . He achieved this by
using overhead transparencies showing the objectives of the Cannington site, we were also
given a copy of all of the overhead transparencies in the form of a booklet.
The specific human resource management policy prior to change was effective in order for
past projects, but Cannington is different to all previous sites such as BHP Manganese,
BHP Iron Ore and BHP Australian Coal which were all examined and were not approved
because these previous policies were based on people living close to the workplace. The
second major reason these previous policies were not approved is because in the case of
Cannington B.H.P is the provider of transport, social recreation, and all meals because
Cannington has no local community as it is five hundred kms from the nearest town. The
old policy states that there is a base pay, site allowances depending on the danger in
the particular environment and for the inconvenience of being away from home, shift
allowances for evening and night shift workers. Bonuses for meeting deadlines such as
monetary and leave aiding, and annual leave pay outs vary depending the value of the
employee these bonuses for a valued member of staff can include transport and
accommodation paid holidays for contractors as well as officials and families of these
people.
Management perspective's on pressure for change in the Human resource management policy
include. All established remuneration policies are based on people living close to their
work place. All of the workers live at least five hundred kilometres away from Cannington
therefore it is impossible for workers to rely on personal transport to arrive at work
promptly in the early hours of the morning to start work. In response to the pressure
B.H.P. has supplied a twenty seater plane for transportation to assist in the commuter
Fly In Fly Out operation, which is free of charge to employees, on condition of this is
that all workers must work for fourteen days whilst working twelve hour shifts in a
twenty four hour mine and living on the Cannington site before being flown back to
Townsville. The employees will live in the companies newly built motel style bed sitter
apartments which are located five hundred to one thousand meters from the under ground
mine. At the end of the fourteenth day the workers return home for seven days break
before the next shift begins and the same procedures take place. Meals are supplied daily
in a common dining room B.H.P. ensures that employees will be as comfortable as possible
and taken care of . 
Another pressure involved is remoteness, workers wanted stability in their wage and BHP
wanted to attract the best so annual pay is offered to employees, this makes situations
such as self-sufficiency for employees and the families of employees possible, it also
motivates workers to stay on the work force because it is an aim of B.H.P. to promote
flexible and multi skilled employees who are in the long term valued as an asset to the
company, the employees that are multi skilled are also eligible to higher pay according
to specific qualifications. Multiskilling is important for all organisations because if
for any reason staff is short their would be a loss in productivity and costs of
re-hiring when interviewing takes place. Team pay will also be implemented for team
ideas, team solutions, routine and rise in production.
The evaluation of the comprehensiveness of the policy takes into account the polices
impact on other areas of the human resource management policy within the organisation,
such as Occupational Health and Safety. The Occupational Health and Safety policy states
that every six months all employees must stand a blood test to ensure that he or she is
not being over exposed to lead or any other toxins in the air. If the employee is proved
to being over exposed they will be classified as being unfit for mining conditions in the
interest of their own health and according to company standards, the employee who is over
exposed will be redeployed or relocated to another task at the companies expense
The evaluation policy also looks at training . Training is a compulsory company objective
so that workers are properly made familiar with any new or updated equipment or
technology and so that miltiskilling can be enforced in the workplace.
By enforcing multiskilling in the workplace all workers will be more aware of their
surroundings and in term more responsible for their designated areas of labour.
The hiring policy has also been evaluated in the sense that BHP will from now on only
require people with practical experience not just qualifications in the field, these
employees that are recruited will be paid accordingly to their practical experience. This
will ensure that multiskilling becomes an easier part of training and will in term
increase productivity and the effectiveness and punctuality of the tasks in hand and this
is reflected in the remuneration policy. 
A specific area of change to the remuneration policy includes the Activity structure
which includes facilities for employees, such as a twenty five meter Swimming Pool,
Volleyball Court, six hole Golf course and Cable TV The site is also equipped with Bed
sitter style apartments and a dining and meals area with a separate wet area where
alcohol is provided in moderation.. This is only what has been built so far, actual use
of the mine by employees in mid October will determine what other facilities are to come.
As result to the on-site contracts given to employees there is a change in structure,
B.H.P. will provide a counselling service to deal with stressed employees and also to
deal with the families of employees who are struggling with out their spouses. This
service will be beneficial if it is necessary and the service will be free of charge.
Another change in structure includes that BHP has included a Transport Co-Ordinate to
their staff list, this person will ensure the Fly In Fly Out program runs according to
plan.
The response of the remuneration policy for the Cannington site has uncovered that the
policy is expected to be highly successful in its new areas. The employee survey (will be
distributed every six months).
BHP prides its self on its three main goals Attraction- the ability to grow and use
skills to achieve a high outcome, Retention- the ability to retain employees for the
welfare of the employee and interim the welfare of the organisation, if BHP is able to
retain at least ninety five percent of their employees this area of the policy will also
prove the policy successful ; and Motivation- the individuals understanding of the
organisation and their contribution to team work. 
The policy response will also take note in the future of the productivity rate of the
steel being mined. The results will be compared to the average figures and figures
compared with competitors. If the policy is effective it should show a higher
productivity rate compared to the competitors, if the policy is not working the
productivity is expected to be at or below average. If the productivity rate reduces by
over five percent the policy will be a failure, in this case BHP will ensure that
employees in the area of fault will be required to attend extra training and the policy
will be reviewed thoroughly.
If the policy is taking effect and the majority of people are happy this will be clear
because the Unions will not have much to say.
Due to the change of the remuneration policy, people will work as part of the body of the
organisation, the employees will determine what the site is lacking and what has to be
evaluated, they will be given this opportunity with evaluation surveys which will be
distributed and carefully evaluated and considered once returned, these surveys will
consider work, recreation and living necessities. The experience and the evaluation of
surveys will benefit in the long run as the structure of the Cannington site will improve
in productivity and living standards. The plans on the site can also possibly be used as
a model for future projects. The evaluation is expected to be successful because
suggestions and opinions are in writing and not just word of mouth they are better
recognised. As result of these surveys employees and their families can feel more stable
knowing that their problems have been addressed formally by the management team. If
ninety five percent of the employees return a positive opinion (as expected) this will
indicate job satisfaction and the policy a success.
At the moment BHP maintains a fast growing production rate, and expects to keep on doing
so. In the future I believe the changes will be made in the area of rewards. Rewards will
be offered to those who perform at a worthy standard and for lengths of
service for the organisation. Annual welfare should also be offered to those who perform
above this company standard. In the future BHP will at some stage have to introduce
rewards and bonuses for targets met in the productivity and production line these rewards
and bonuses could include annual airfares or other rewards. If these introductions do
come in to action, BHP will need to employ more staff as the mine expands.
In every organisation there is room for improvement, and BHP is no exception to this. 
I believe that the likely future responses to the current Remuneration policy will
indicate that the policy is one of well being and will indicate a positive direction in
recruiting employees and the position BHP holds on the rich list.