Evaluation of HRM practices and policies in Rio Tinto
As per the opinion of Taamneh, Alsaad and Elrehail (2018), HRM practices are significant in the growth and performances of the organization. HRM practices, policies and strategies are further crucial to manage the human resources present in the organization to multiply the productivity through enhancing the performances. The present study has aimed to evaluate the HRM scenario in Rio Tinto present in Australia. Here, the company policies have been evaluated considering the strengths and weaknesses of the policies. The effectiveness of the policies and strategies has been analysed by concentrating on the business strategy of the organization. Further, the study has presented recommendations in this regard to facilitate the company HRM practices to attract better growth in Rio Tinto present in Australia.
Rio Tinto present in Australia is engaged in the metals and mining industry present in Australia. The organization was found on 1873 and further operating in 35 global countries (Riotinto.com, 2022). The company is operating with 49400 international human resources to attract better performances (Statista Research Department, 2022). The company is further continuing its business activities in 17 mines from the Western Australia, 5 mainstream iron ore items, 4 port terminals and 3 solar salt operations (Riotinto.com, 2022). It is observed that, till 2020, the company was the third-leading diamond production company in the world after ALROSA and De Beers. The company is now consisting of a total brand value of 3.3 billion USD. (Statista Research Department, 2022). In 2021, the company has attracted revenue of 63.5 billion USD and the net income of the company consists of near about 21.1 billion USD (Statista Research Department, 2022). Further, the company is leading success in the China in a better way compared to other countries. The highest earning product group of the company is Iron ore. The company is focussing on sustaining the environment and communities while performing the business operations (Riotinto.com, 2022).
As opined by Rodon, Keeling and Boutet, (2021), in terms of HRM practices, Rio Tinto involving all the new mines is attracting Fly-in fly-out practices to manage the human resources in the present regard. This practice further attracts temporary workforce for the mining activities in different locations. As argued by Marques, Lopes and Gonçalves (2021), this practice attracts temporary journeys of the human resources to abroad to fulfil the requirement of the company. It is limited with the issues of work quality, family life, performances and job dissatisfaction. MyVoice program entitled by the company is further essential to inform regarding sudden risks (Riotinto.com, 2022). The company is engaged with employee empowerment initiative to upgrade the technical staffs that are further beneficial to attract better motivation among the employees to attract excellence in the performances (Riotinto.com, 2022). The organization has further involves zero fatalities in the HRM practices to confirm safety of the workers. The company has established a safety-first culture by using automation to remove people from the high-risk works. The company has further involved a diverse work culture by empowering the women roles in the company. 21.6% of the total workforce is women, 36.4% of them are board of directors, and 25% of executive committee, 27.4% are in senior leadership role (Riotinto.com, 2022). As evaluated by Stanford (2020), diversity in gender roles in the organization and inclusion emphasize the organizational culture to attract better success. Thus, it can be said that Rio Tinto is attracting better growth through the diversity and inclusion in the organization. Further the company has attracted diverse culture in the employee base involving 31 of the indigenous workers including 20 leadership roles (Riotinto.com, 2022). As evaluated by Paruchuri and Asadullah (2018), diverse workforces are effective to attract innovation in the business innovation to attract better growth. Further eSAT score has been introduced by the company to measure the employee satisfaction rate. This is further beneficial to address the job retention issues in an organization. Workplace safety has been focused by the company to attract better advantages in retaining the talents in the organization. To establish an equal pay structure, the company has ensured to reduce the gender pay gap in 2021 compared to 2020 that is less than 1.5% compared with the male. As explained by Abaker, Al-Titi and Al-Nasr (2018), equal pay scale in an organization reflect the organizational culture that further promotes better productivity. Rio Tinto has initiated to maintain equality in the pay structure that will further resulted in better productivity by the human resources.
Analysis of the effectiveness of HRM strategies on organizational growth
Figure 1: Revenue growth of Rio Tinto
(Source: Garside, 2022)
As per the vision of Anwar and Abdullah (2021), Effective HRM practices positively influence the revenue of an organization. Thus, the effectiveness of the HRM practices by Rio Tinto can be measured through the revenue growth of the company. It has been further observed that in 2021 Rio Tinto’s sales revenue was 63.4 billion compared to 44.6 billion in 2020 (Garside, 2022). Therefore it can be said that, the company’s change initiatives in the HRM practices are benefiting the company by enhancing the productivity through the effective HRM practices.
Figure 2: Increased number of employees in Rio Tinto
(Source: Statista.com, 2022)
As explained by Mira, Choong and Thim (2019), HRM through offering different practices are effective to increase the number of employees and their satisfaction. It is observed by the above-mentioned study that Rio Tinto has attracted 49,345 human resources compared to 46,810 employees in 2017 (Statista.com, 2022). The increased numbers of the employees are further resulted through the change strategies in the organization such as reducing the gender gap in pay structure, ensuring better safety and so on. As analysed by Jind?ichovská and Eckert (2021), Rio Tinto has been observed to attract effective talents and commitments from the employees. This scenario is further indicating the high satisfaction rate of the employees by the changed HRM practices engaged by the organization.
Recommendation 1: The Company is recommended to ensure fair salary practices
It is observed from the study that recently the company has reduced the gender gap in the pay structure. Further, the company is recommended to ensure fair salary structure depending on the job role to attract equality in the organizational culture.
Recommendation 2: Rio Tinto is needed to engage training to establish a better diverse culture in the organization
While managing the diverse cultured workforces, Rio Tinto has been recommended to ensure training programs to cope with the different cultures. Better communication and tolerance toward other cultures are facilitated through the training process. By knowing different cultures the company will be able to attract better effectiveness in establishing a diverse work culture.
Conclusion
In conclusion, the company is identified with several effective HRM practices such as eSAT, reducing pay gaps depending on gender diversity, diverse workforce management and so on. Further, Fly-in fly-out practices by Rio Tinto has been analysed with a risk of job dissatisfaction among the employees. On the other hand, it is found that the company has engaged better safety measures for the employees to ensure better health and safety for the employees. Further the study has analysed the revenue growth and increased numbers of employees in the organization to evaluate the effectiveness of HRM practices. Further, the study has recommended engaging training to ensure smooth conversation while managing diverse workforce. It has further suggested ensuring fair salary practice while managing diverse workforce in terms of gender, ethnicity and culture.
Reference List
Abaker, M.O.S.M., Al-Titi, O.A.K. and Al-Nasr, N.S., 2018. Organizational policies and diversity management in Saudi Arabia. Employee Relations: The International Journal.
Anwar, G. and Abdullah, N.N., 2021. The impact of Human resource management practice on Organizational performance. International journal of Engineering, Business and Management (IJEBM), 5.
Garside, M., 2022. Rio Tinto: total revenue 2021 | Statista. [online] Statista. Available at:
<https://www.statista.com/statistics/272615/rio-tinto-revenue-since-2001/> [Accessed 25 April 2022].
Jind?ichovská, I. and Eckert, E., 2021. Social Responsibility of Mining Companies at a Time of COVID-19: Dear Shareholders!. Sustainability, 14(1), p.350.
Marques, N.S., Lopes, M.P. and Gonçalves, S.P., 2021. Positive Psychological Capital as a Predictor of Satisfaction With the Fly-In Fly-Out Model. Frontiers in Psychology, 12.
Mira, M., Choong, Y. and Thim, C., 2019. The effect of HRM practices and employees’ job satisfaction on employee performance. Management Science Letters, 9(6), pp.771-786.
Paruchuri, H. and Asadullah, A.B.M., 2018. The Effect of Emotional Intelligence on the Diversity Climate and Innovation Capabilities. Asia Pacific Journal of Energy and Environment, 5(2), pp.91-96.
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Rodon, T., Keeling, A. and Boutet, J.S., 2021. Schefferville revisited: The rise and fall (and rise again) of iron mining in Québec-Labrador. The Extractive Industries and Society, p.101008.
Stanford, F.C., 2020. The importance of diversity and inclusion in the healthcare workforce. Journal of the National Medical Association, 112(3), pp.247-249.
Statista Research Department, 2022. Topic: Rio Tinto. [online] Statista. Available at:
<https://www.statista.com/topics/4492/rio-tinto/#dossierKeyfigures> [Accessed 25 April 2022].
Statista.com, 2022. Rio Tinto: number of employees 2021 | Statista. [online] Statista. Available at:
<https://www.statista.com/statistics/272483/rio-tinto-number-of-employees-since-2006/> [Accessed 25 April 2022].
Taamneh, A., Alsaad, A.K. and Elrehail, H., 2018. HRM practices and the multifaceted nature of organization performance: The mediation effect of organizational citizenship behavior. EuroMed Journal of Business.
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