Background of Queensland Railways Privatization
Question:
Discuss About The Managing Human Resource Privatization Of Queensland Rail?
Queensland Railway is the only railways owned by the state that has not been privatized. It is a business generating a revenue of $2 Billion every year and is a provider of services including 1) Services of freight and logistics 2) commuter passenger services and long distance travel services 3) narrow, standard and dual gauge track access for network 4) expert services that are railways specific (QTLC, 2015). Despite the pressure from the central government for its privatization, the Queensland government holds the complete ownership of Queensland Railway. However, the Queensland government has finally decided to go ahead with the privatization. This report has been written with the intent to serve as a background briefing report for a human resource manager who has been relocated from National Rail to Aurizon, Australia. He will be overseeing the privatization of Queensland Railway and will be managing the people during this process. This essay provides the reader with an insight of the current work environment of Queensland Railway and will try to paint a picture of the entire privatization process as it is expected to go about (Commonwealth of Australia, 2016). This essay also covers the possible outcomes and impact that privatization is going to have on the workforce and the work culture. There are a number of human resource management issues and the issues related to employee relations that are going to impact the work of the new manager taking charge of the Human Resource Management (Strachan, 2017). He will have to take care of all these issues and handle them by being the representative and the face of the employees of Queensland Railway. All these issues that are going to come up during and due to the privatization of Queensland Railway are covered in this report to help the new HR manager with the management of the workforce in the new location (RTBU Queensland Branch, 2008).
The rail transport and its responsibilities were initially with the states as they managed their respective railway lines. Each of the Australian states managed and developed their rail network independently from the rest of the stated and without any interruption from the central government. With the onset of liberalization of the rail transport industry began the privatization of the railways (Vowles, 2010). The first railways to get privatized was the line in New Zealand in the year 1993. Which was followed by all the Australian states and by the year 2002, all the state owned railway network were privatized except for the Queensland Railway which still continues to be a state owned entity. The privatization of these networks has had both positive and negative effects on the railways. The privately owned railways are able to provide better service to the people, specifically when travelling across state borders by having a more consolidated working. The railway transportation industry in Australia has been transformed with the privatization and due to this pressure has been mounting on the Queensland State Government and the Queensland Railway to opt for privatization just like the rest of the rail networks (Wiltshire, 2010). The Queensland Railway has battled with the idea of privatization for about 25 years now. They have fought against the pressure from the Federal Government and continues to remain a wholly state government owned railway line. However, due to the increase in pressure from the competitors in the form of the privately held railway lines from the rest of the states and reducing profit margins, the business has been depressed for Queensland Railway (QR National Limited, 2016). The Queensland Government has decided to privatize Queensland Railway in its current position as a vertically integrated business with the trains and the tracks complete to Aurizon. Aurizon Holdings Limited will be a rail freight company to which the assets of the Queensland Railways will be transferred (Williams, et al., 2005).
Privatization Elements and Human Resource Planning
A state owned enterprise is the strongest image of the society and the privatization of a state owned entity can have a profound effect on the human resource of the organization. There is no database of comprehensive listing of these impacts, but a number of studies have proven that privatization changes the work environment of the organization completely and there are a number of changes regarding the employment patterns of the workforce that get affected due to it. The privatization elements shape the strategies of growth of the business and the methods that the investors use to make profits from the operations of the organization. All these factors play a role in the Human Resource Planning for the organization and determine the course of Human Resource management (Quiggin, 2010). This report primarily focuses on the impact of privatization on the Human Resource Performances and Planning for Queensland Railway as it proceeds with its privatization. Governments, both federal and state, look up to the private sector for management and finance. The privatization of Queensland Railway is expected to cause redundancies in the system on a wide scale. This indicates job cuts in addition to the natural attrition for the employees. This has been a point of concern for the employees since long and as the privatization process commences, it is going to get even worse (Fraser, 2010). Although the state of Queensland has signed a pre-privatization employment agreement with Aurizon, they can terminate that agreement at any time after the stalling of the workplace bargaining. Privatization results in change of process and doing away with the old activities. The additional workforce will also lead to inefficiency and ineffective working in the highly competitive private commercial market. Aurizon might also go for a restructuring of the processes and the working of Queensland railway which will further cause job redundancies and layoffs. Aurizon is going to invest in the infrastructure for further improving the services of Queensland Railways, and they are going to expect a high return for all the investment made (O’Sullivan, 2016). Workers employed with Queensland Railways are aware of the possible outcomes and the union leaders are therefore already campaigning against the privatization. The people working there are upset anticipating the future and as a new manager deployed to manage the Human Resource of Aurizon, one needs to be wary of the possible outcomes and be planned with the ways to handle this (David & Williams, 2005).
Impact of Aurizon’s Privatization of Queensland Rail on the Workforce
The Queensland Rail and its privatization is going to have an organization wide impact on the working processes and the operations of the railways. The Queensland Rail recognizes their workforce as their greatest asset and they work towards providing their employees a productive and collaborative environment. They are aware that the only way for an organization to achieve their operational and strategic objectives is to take the people along. Once Aurizon takes over the operations, however, things are going to change. The situation of the trade unions becomes weak once a private entity takes over the state operations of the firm. This is a major reason why the trade unions are against privatization of public assets. There will be organization wide job insecurity and difference in the way of work. Some of the major issues that the employees of Queensland Rail are going to face with the decision of privatization are the changes in job roles, the autonomy of the organization, changes in the skill requirements due to differences in the work process and the employment generation pattern for the organization. Privatization of operations reduces the autonomy of planning and performing the assigned roles and responsibilities. The employees under the new work environment will experience less freedom and will be micromanaged towards the completion of their assigned duties. There will be more challenges in the roles assigned as the work environment of a public sector is very different from that of the private sector. The employees may see more challenges coming their way and their jobs may become tougher (Ludlow, 2016). The privatization to Aurizon will also increase the job insecurity among the employees dramatically. There are already high chances of loss of jobs as Aurizon has announced a number of changes in the processes and the functioning of the rail freight once it acquires it. The private entities also tend to make a shift to contract labor to reduce the accountability and labor costs. This will result in requirement of more diverse skills in addition to the ones possessed by the employees currently and job losses for the current employees. The requirement of advanced skills might also result in the generation of employment, however the organization will most likely shuffle the existing workforce in the organization keeping in mind the pre-privatization employment contract (Carey, 2017). There is going to be no major impact on the remuneration and compensation of the existing employees as they are going to continue with the similar job only under the name of a different organization now. Privatization influences the relations that the organization has with the other organizations in the industry. The industrial relationships of Queensland Rail are going to take a major turn once it gets privatized. Aurizon would like to operate in the way private organizations generally do which is very different from a state owned entity. The grievance handling process for the organization will probably become more efficient and faster as is observed in the private organizations generally. The private organizations take misconducts very seriously and have stricter rules and regulations regarding these (The National Academies of Sciences, 2012). There has been a drastic drop observed in the number of grievances and issues registered once an organization undergoes privatization and the same is expected from Queensland Rail.
Impact on Organization-wide Working Processes and Operations
The manager from the National Rail UK is being transferred to Aurizon, Australia in the wake of the ongoing privatization of Queensland Rail. There is a lot of turbulence in the processes of the industry at present and this is going to stay this way for some time now. In addition to the international change in the environment, there are a number of challenges that the manager will be facing. All the possible challenges that privatization of Queensland Rail to Aurizon may have on the Human Resource of the organization have already been specified in the earlier section of the report. This section is going to explain ways these impacts can be cushioned and how the manager can handle these in an effective and efficient manner without causing an organization wide chaos. When privatization becomes a requirement for the development of the organization, the industry and the country, the decision is based on the assumption that the state owned organizations are not that efficient or profitable. Although there exists no empirical evidence to prove it, this has been going on for decades now and privatization has been embraced by countries all over the world. When privatization of the firms happens, there comes a huge difference in the way the organizations had been operating earlier and how they operate once a private entity decides to run it (Clara, 2010). The difference is not just in the organizational operations, but also the employee management and human resource management practices. The discussion and decision making during privatization is mostly centered towards the macroeconomic functions and efficiency of the organization. The human resource of the organization and their management is the topic which is generally overlooked during the privatization process (Missouri, 2014). It is important to note here that the efficiency of any organization depends on the production of goods and services by the firm. For this, the technical, commercial, financial and human resources must work in a synchronized manner. For Queensland Rail, the organization and the decision makers at this time must study and try to manage the expectations, perceptions, work behavior and performance of the employees to keep the transition process smooth. The managers must take care of the Human Resources in order to achieve their strategic objectives. The objective that the organization aims to achieve through privatization is the allocation and technical efficiency which will ultimately lead to improved performance (MIT, 2012). The organization Aurizon needs a workforce that is committed, concerned and competent. Therefore, the capacity and willingness of the employees of Queensland Rail play a very important role in the privatization and the post privatization performance of Aurizon. At the same time Aurizon also needs Human Resource Management policies that help in the effective and productive use of their employees. The first step that the HR manager needs to take for this is elevating the personnel concerns and concerns of the human resource of the organization to a strategic level and recognize how important the employees are in the attainment of the organizational goals. They also need to design the strategy to manage the employees and improve their capacity to perform by motivating them and making them willing to perform with the changed strategic vision. Layoffs are sensitive tasks to deal with. The manager must be aware and prepared with the legal formalities when laying off employees. Good records of these legal proceedings and the conversations during this process must be kept and maintained for future reference. The manager must ensure that the scheduled layoffs during the privatization process are carried out by having appropriate and timely communication of the process in place. The department of Human Resource Management and the immediate managers of the employees being laid off must be notified of the decision and they must administer the process carefully and diligently. Any post layoff action required to be carried out must be taken care of by the HR department only. The data for employees laid off must be maintained and the employees should be informed of any future projects where their help might be needed. The organization can also train the employees for the skills required for carrying out the changed system and processes. Before the layoffs, the manager must also converse and work with Labor Unions to inform the appropriate people as to why layoffs are taking place, how affected positions were identified, which alternatives to layoff, if any, were considered, etc. All these questions must be addressed before the commencement of the process and the managers must ensure that the process is not delayed due to this. A complex layoff situation like the one with Aurizon must be handled and carried out with a lot of precautions and carefulness (Lieber, 2009). The organization must first collect all the required information and design an effective plan for staff reduction. The communication plan to convey the message and provide them with all the required information must also be in place. The seniority and job skills must be studied and assessed to ensure that the positions for which the layoffs are to be conducted are identified correctly. The impact of the layoffs on the organizational work and performance and on the morale of the employees who continue to work with the organization should also be understood. Any possible obstacles to the process must be identified and planned for in advance. The employees must be informed about the availability of information, guidance and resources that they can make a use of. All this will ensure that the entire process is administered carefully and as per the proper procedure.
Challenges for the New HR Manager
Conclusion
The railway transportation industry in Australia has been transformed with the privatization and due to this pressure has been mounting on the Queensland State Government and the Queensland Railway to opt for privatization just like the rest of the rail networks. The Queensland Railway has battled with the idea of privatization for about 25 years now. They have fought against the pressure from the Federal Government and continues to remain a wholly state government owned railway line. However, due to the increase in pressure from the competitors in the form of the privately held railway lines from the rest of the states and reducing profit margins, the business has been depressed for Queensland Railway. The Queensland Government has decided to privatize Queensland Railway in its current position as a vertically integrated business with the trains and the tracks complete to Aurizon. Aurizon Holdings Limited will be a rail freight company to which the assets of the Queensland Railways will be transferred. This report primarily focuses on the impact of privatization on the Human Resource Performances and Planning for Queensland Railway as it proceeds with its privatization. Governments, both federal and state, look up to the private sector for management and finance. The privatization of Queensland Railway is expected to cause redundancies in the system on a wide scale. This indicates job cuts in addition to the natural attrition for the employees. This has been a point of concern for the employees since long and as the privatization process commences, it is going to get even worse. As a former manager of Human Resources with the National Rail United Kingdom, the manger is now expected to manage the Human Resource of Aurizon. This comes with the challenges of changes in the organizational policies and processes and the proposed losses of job of the employees. This report is a briefing report for the new manger outlining the issues that might come up during the process and the ways to handle them.
References
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