BSBOPS502 - Manage Business Operational Plans Learner Guide

Learner Resource
BSBOPS502
Manage business operational plans
Precision Group (Australia)
Level 13, 269 Wickham St, Fortitude Valley 4006
Email: info@precisiongroup.com.au
Website: www.precisiongroup.com.au
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BSBOPS502 – Mnage business operational plans (Release 1)
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BSBOPS502 – Manage business operational plans
2 Learner Resource Produced 28 August 2020

© Precision Group (Australia)
Version Control & Document History
Date Summary of modifications Version
Version 1 final produced following assessment

28 August 2020 1.0
validation.
3
Learner Resource Produced 28 August 2020
Table of Contents
ABOUT THE BUSINESS SERVICES TRAINING PACKAGE ...................................................... 6
ABOUT THIS UNIT OF COMPETENCY ............................................................................ 8
CHAPTER 1: ESTABLISH OPERATIONAL PLAN................................................................. 9

1.1 Research, Analyse and Document Resource Requirements ........................................ 10
1.2 Develop Operational Plan in Consultation with, and with Approval from, Relevant
Stakeholders ........................................................................................................................ 16
1.3 Develop Contingencies for Operational Plan ............................................................... 28
Activity 1 ........................................................................................................................... 36
Key Points: Chapter 1 .......................................................................................................... 38

Chapter 1 – ‘True’ or ‘False’ Quiz ........................................................................................ 39
CHAPTER 2: MANAGE RESOURCE ACQUISITION .......................................................... 40

2.1 Confirm that Employees are Recruited and Inducted According to the Organisation’s
Human Resources Management Policies, Practices and Procedures................................ 41
2.2 Confirm that Physical Resources and Services are Acquired According to the
Organisation’s Policies, Practices and Procedures............................................................. 47
2.3 Identify and Incorporate Requirements for Intellectual Property Rights and
Responsibilities in Related to Acquisition of Resources .................................................... 55
Activity 2 ........................................................................................................................... 59


CHAPTER 3: MONITOR AND REVIEW OPERATIONAL PERFORMANCE ................................ 63
3.1 Assess Progress of Operational Plan in Achieving Profit and Productivity Plans and
Targets ................................................................................................................................. 64
3.2 Identify Areas of Under-Performance, Recommend Solutions and Take Prompt Action
and Rectify the Situation..................................................................................................... 71
3.3 Plan and Implement Relevant Processes for Ongoing Monitoring and Confirm that
Support is Provided for Individuals and Teams ................................................................. 78
3.4 Negotiate Recommendations for Variations to Operational Plans and Gain Approval
from Designated Persons .................................................................................................... 81
Activity 3 ........................................................................................................................... 82

SUMMARY .......................................................................................................... 86
REFERENCES ........................................................................................................ 87
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About the Business Services Training Package
The BSB Business Services Training Package covers a diverse range of industries and occupations.
Business Services covers a range of cross-industry functions and services supporting the commercial
activities of all industries.
Defining Qualifications
When units of competency are grouped into combinations that meet workplace roles, they are called
qualifications. These qualifications are aligned to the Australian Qualifications Framework (AQF). Each
qualification will have ‘packaging rules’ which establish the number of core units, number and source
of elective units and overall requirements for delivering the qualification.
Delivery and Assessment of Qualifications

RTOs must have the qualifications (or specific units of competency) on their scope to deliver nationally
recognised training and assessment. RTOs are governed by and must comply with the requirements
established by applicable national frameworks and standards. RTOs must ensure that training and
assessment complies with the relevant standards.

Qualification Training Pathways
A pathway is the route or course of action taken to get to a destination. A training pathway is the
learning required to attain the competencies to achieve career goals. Everyone has different needs
and goals, and therefore requires a personalised and individual training pathway.
Foundation Skills
Foundation Skills are the non-technical skills that support the individual’s participation in the
workplace, in the community and in education and training.
Australian Core Skills Framework (ACSF)

This Assessment meets the five ACSF core skills as described in the Foundation Skills mapping.
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About this Unit of Competency
BSBOPS502 - Manage business operational plans

This unit standard BSBOPS502 Manage Business Operational Plan covers the skills and knowledge
required to develop and monitor the implementation of a business operational plan. Success in doing
so would help foster efficient and effective workplace practices resulting from properly managed
operational plans.
This unit applies to those who manage the work of others and operate within the parameters of a
broader strategic and/or business plan.
This Learner Resource is broken up into three elements. These include:
1. Establish operational plan
2. Manage resource acquisition
3. Monitor and review operational performance
At the end of this training, you will be asked to complete an assessment pack for this unit of
competency. You will need to access a supervisor, a manager, or your assessor who can observe you
perform project or workplace tasks and verify your competency or performance.
On competent completion of the assessment, you must have demonstrated skills and knowledge
required to manage business operational plans.

Chapter 1: Establish Operational Plan
The key to a successfully executed task is a properly established plan. Thus, the first element in
managing your business operational plan is establishing this plan. Doing so would involve multiple
steps as well as various people. Moreover, the development of your plan requires the consideration
of several factors to ensure that your plan is as well-made as it can be.
This chapter delves into the details of this process, further dividing it into four sub-chapters that serve
as the steps of this stage. First, you must research, analyse and document your resource requirements.
After this, you will develop your operational plan. This will be done by consulting with and seeking
approval from your relevant stakeholders.
Once you have accomplished these tasks, you will then develop contingencies for your operational
plan. Finally, you will need to explain the plan you develop to the relevant work teams.
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1.1 Research, Analyse and Document Resource Requirements
An Operational Plan (OP) is a detailed plan that provides a clear picture of how a team would
contribute to the achievement of the organisation’s strategic goals. Before you look into the process
of establishing this plan, you must first look into the different resource requirements involved in its
creation and differentiate it from other types of plans.
1.1.1 Business Planning

Business planning attempts to bring a new idea to fruition within an organisation. Such a plan
needs to be divided up into sections which would allow the business managers to understand
what you are trying to accomplish and the direction that you will take to get there. You will find
an example on the simulated business Bounce Fitness website under the Documents tab.
Two plans involved in business planning are the strategic plan and the operational plan. A
strategic plan is responsible for setting the direction of an organisation. Through this plan, goals
and objectives are devised, and the strategies in achieving these are identified. Likewise, this
plan takes into account the goals and priorities of the stakeholders. By its very nature, this plan
does not cover the day-to-day tasks and activities involved in running the organisation but
merely serves as a general guide for management.
The objectives presented in the strategic plan – strategic objectives – are essentially the long-
term organisational goals which help transform the organisation's mission statement from a
broad vision to specific and feasible plans and projects. Strategic objectives set benchmarks for
success. They are designed to be measurable and realistic manifestations of the organisation's
mission statement. Usually, strategic objectives are developed as part of an organisation's two-
to four-year plan. These objectives also guide management in decision-making.
On the other hand, an operational plan presents highly detailed information that directs
employees in performing the day-to-day tasks and activities necessary in running the
organisation. It presents information that both the management and staff can and should
frequently refer to as they carry out their daily work. There are four key pieces of information
that can be found in your operational plan. These are:
What Who
the strategies and/or tasks the people responsible for each
that must be undertaken strategy and/or task
When How much

the timelines during which the the financial resources to be
strategies and/or tasks must be allocated for the completion of
completed each strategy and/or task

Like strategic objectives, operational objectives set benchmarks for success. However,
operational objects do so on a daily, weekly, or monthly basis. Operational objectives, which
are also referred to as tactical objectives, are specifically designed to break down a strategic
goal into workable tasks that organisational members can perform. For instance, a strategic
goal of a 30 per cent increase in revenue would require the completion of several operational
objectives, such as the development and execution of an effective advertising strategy.
Just like strategic objectives, operational objectives must be specific, measurable, attainable,
relevant and time bound. The most significant difference between the two lies in the timeframe.
While operational objectives are short-term goals that have a narrow focus, strategic objectives
are long-term goals and are too broad to be used for daily operations. Despite this key
difference, however, they are closely related and must be jointly used.
An organisation is unlikely to achieve a strategic objective if it fails to translate it into workable
operational objectives effectively. Likewise, operational objectives will not be cohesive if they
are not aligned with the strategic objectives. In other words, strategic objectives only become
functional when they are translated into operational objectives, and operational objectives only
become effective when they are designed to serve a strategic objective.
1.1.2 Operational Plan Models and Methods

Your operation plan concerns the specific procedures and processes that happen from the
lowest level of the organisation. Given their detailed nature and broad usage, it is important to
note the different operational plan models you can employ.
 Single-use Plans
As suggested by their name, these plans are intended to be used only once. Single-use
plans involve activities that won't be repeated and have an expiration date.
Some examples of single-use plans include:
o Creating a monthly budget
o Developing an advertisement to boost product sales for the quarter
 Ongoing Plans
Plans that are designed for long-term use and built to withstand the test of time are
called ongoing plans. Unlike single-use plans, these plans are intended to be used
repeatedly. As such, ongoing plans are not fixed and would undergo changes when
necessary.
Some examples of ongoing plans include:
o Outlining an employee's annual performance goals
o Setting your department’s annual sales goals
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Likewise, there are key methods that you must remember to employ in the creation of your
operational plan. These include:
 Project Evaluation Review Technique (PERT)
This method involves the use of charts and tools to visually represent the projected
timeline of a project. PERT analyses the overall timeframe of a given project and goes
into all its elements, identifying the time it would take to complete specific tasks. The
main advantage of employing this method is that it allows for variations in planning.
 Critical Path Method (CPM)
This method considers the most crucial tasks in a given project that need to be
performed for the project to be considered successful. It specifically considers the order
in which tasks must be done and uses this information to determine the duration of the
project. It focuses on the longest sequence of tasks in a given project – your critical
path. This method enables you to plan sufficiently for the projected duration of your
project and consider what you ought to do should there be delays.
1.1.3 Resource Requirements

There are three types of resources that should be considered when establishing an operational
plan – human resources, physical resources, and services.
 Physical Resources
Physical resources are any resource that you can buy, feel and touch. To account for
these, make a list of everything that you need and try to make a list of the costs of each.
This can allow you to account for how much the production processes are likely to cost.
The major types of resources, along with their associated costs, are as follows:
Major Types of Physical Resources
Resource Description
Rent; rates; service costs (heating, lighting, cleaning, security)

Premises
and structural alterations
Costs of purchase, hire or lease; insurance, running costs (service,

Equipment
repair)
Costs of purchase, hire or lease; insurance, road tax; running

Vehicles
costs (service, repair)
Costs of purchase, cost of storage (any special requirements for

Raw Materials
refrigeration or hazardous substances)

 Human Resources
Aside from the physical resources, you must also account for the cost of the people that
exist within the organisation. You will be spending money on wages, salaries and other
forms of remuneration – this may, in fact, be a huge part of your budgetary expenses.
Even acquiring new employees can be a significant expense; you need to account for
the costs of recruiting such as:
o Advertising in newspapers and other media
o The time and organisation associated with recruitment
o The cost of running interviews and associated testing
o Insurance
Each of these costs may be significant when you are introducing new processes, which
may require new staff, into a business. Try to be as accurate as you can with any costing
that you make. Look back on previous processes of recruitment and selection and
attempt to determine how much they cost you.
 Services
Along with physical and human resources, services are the third type of resource
requirement you must account for. This type of resources may be overlooked because
most organisations source all their services internally (i.e. through in-house staff).
However, outsourcing, which is the process of entrusting certain functions and
processes to individuals from outside the company, is also a common practice that has
proven to be effective and efficient. Some of the most commonly outsourced services
include:
o Customer service and phone support
o Bookkeeping and accounting
o Tax filing and preparation
o Payroll processing
o Social media management
o Creative work (e.g. content writing, digital marketing campaigns)
o Computer programming, web design and optimisation
o Research and development
o Event management
o Human resources, hiring, training
o Engineering (e.g. architectural, electrical, structural or mechanical)
o Manufacturing and production
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o Legal services
o Healthcare services
o Cleaning services
o Security
Your organisation may not require all these services listed above. However, these must
be considered in your operational plan as necessary.
1.1.4 Other Considerations in Creating an Operational Plan

Along with your resource requirements, there are several other considerations you must make
in creating your operational plan. Keeping these in mind will ensure the feasibility of your OP.
Capital
Now that you have an indication of the resources that you may need to make your plan a reality,
it is time to determine exactly how much money you will need and how you might fund it.
Financing the plan can be accomplished in several ways, so you need to look at the types of
costs that make up your budget.
First, consider your fixed costs. This is the cost of actually acquiring the new equipment that
you will need to make the plan happen. What land, buildings and machinery might you need?
Then you need to consider those variable costs that allow you to actually put the plan into action
on an ongoing basis. This might include wages, power, rent, telephone and any other working
expense. These need to be covered by your initial financing until such a time that the
organisation begins to pay its own way.
Your budget should be broken down into monthly or quarterly periods, which allow you to step
back and look at how different times of the year may affect your expenses. Winter, for example,
may require extra power for heating in the factory or shop. Training expenses are likely to be
greatest during the first month or two, and after that, will reduce significantly.
Forecast the amount of money you expect to bring in monthly and compare this to your
expenses. If you are not expecting to make a profit, this is capital that will need to be funded in
some way to get the operation off the ground.
When you are preparing a new plan, you may want to paint as rosy a picture as you possibly
can. You want people to say, ‘that looks great, let’s do it!’ However, from a business planning
point of view, this can be a recipe for disaster. If you overpromise and underdeliver, you are
going to be left wanting or needing more resources to actually get the plan back on track.
This means that it is better to be realistic about where you expect costs to be rather than
promise too much and find yourself short of essential resources during the crucial initial
months. Use your resources wisely and ensure that you have enough, so you do not find
yourself seeking more.

Budget
A budget is a statement that represents estimated income and expenditure during a specific
time period in the future. In an organisation, budgets are used to forecast the revenues and
expenses based on set business goals. Given that such goals may change, budgets are usually
compiled and re-evaluated periodically, and they undergo adjustments as necessary.
Essentially, the budget serves as management’s quantitative expression of organisational plans
for an upcoming time period. You will find that different levels of the organisation are involved
in preparing budgets. However, it is the master budget that serves as the overall financial plan
for a specific time period. Within the master budget, there are two budgets necessary in
operational planning. These are:
 Operating budget – the planned sales and operating sales of an organisation
 Financial budget – financing plans (e.g. borrowing, leasing, cash management)
If properly formulated, your budget can serve as a planning and control system of your
organisation. This is because the budget documents both the goals and performance objectives
of your organisation in financial terms. Through the implementation of your budget, your plans
would then be utilised and monitored accordingly. For instance, the implementation of your
annual budget would set your yearly plans and goals. To determine your relative success in
achieving your set goals, your monthly reports would compare the budgeted results with the
actual results you have come up with.
Budgeting is concerned with two major functions of management, namely planning and
controlling. Your budget is a document that formalises your plan. However, as seen above, its
use does not end once it has been formulated. Your budget is implemented periodically and is
an effective means of controlling operations. Relating to the example in the previous paragraph,
if a monthly report finds that the actual results during a month are not at par with budgeted
results, management is likely to further investigate the situation and take the corrective actions
necessary in controlling operations.
Timeframes
In developing an operational plan, two timeframes must be considered – current and projected
(i.e. what will be needed in the future for a given period).
When you are writing an operational plan, it is important to consider several factors regarding
your business. You might look at financial performance, market environment, inventory, the
product mix that you are offering, and more. The products and services being offered are of
particular importance to most plans. Businesses exist to sell products or services, so it is critical
that you outline the way that an operational plan will impact how products or services are
offered. A plan may involve new products being introduced, old products being discontinued or
even the mix of products on offer being altered. If any of these are present in your plan, you
need to examine the impact that they will have on the plan’s introduction.
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You also need to convey information on each major issue that you foresee within the plan. The
users of your plan want to know that you have carefully considered the implications of the plan
and how they may impact on how the market perceives your products and services. It is,
therefore, extremely important that you can demonstrate that you have considered these.
Think about things such as personnel needs, resourcing requirements, changes to machinery,
the need to employ contractors, and more. The more that you can detail to your end-user about
the performance of your organisation and the way that the plan will impact on this
performance, the more favourable the plan as a whole will seem.
1.2 Develop Operational Plan in Consultation with, and with Approval from, Relevant
Stakeholders
Every organisation exists to create value for its stakeholders. To effectively determine what value is
necessary, an organisation’s management must understand the needs, wants, and expectations of
their stakeholders. Consultation is a process that enables management to effectively do this. In the
process of developing your plan, it is therefore important to have a fundamental grasp of not only the
content of your plan but also the process of consulting with your stakeholders in developing these.
1.2.1 Drafting the Operational Plan

An operational plan should exist for the same length of time as the strategic plan but should be
reviewed regularly to make sure progress is being made towards achieving the objectives. If
necessary, priorities can be revised.
The actual design and order of your plan may vary significantly from this, depending on the
actual work that needs to be undertaken. In fact, in some organisations, they can be called
‘action plans,’ ‘annual plans,’ ‘management plans,’ or, as mentioned previously, ‘tactical plans.’
Additionally, your organisation may have a format of its own that they require you to use. If this
is the case, you must comply. The business world can be a tremendously complex environment.
When you consider that this environment is further complicated by continuous legislative
change, the challenges of constructing, implementing and appropriately managing a plan over
time cannot be understated. Seeking the advice of specialists can provide the knowledge and
expertise that will assist you on the path to achievement.
Most organisations require that approval is gained before plans can be implemented. This
approval may come from management teams, the board of directors or council. Organisations
would also need to report to external authorities such as various regulatory or government
agencies; for example, such as the Australian Taxation Office.

Policies, Practices, and Procedures
Developing an operational plan begins with understanding the organisation’s policies, practices
and procedures that directly relate to the OP. These could include purchasing policies, policies
relating to preferred suppliers, quality policies and many others. You will find many business
policies and procedures on the simulated business website of Bounce Fitness by clicking on
either the Policies or Procedures tabs.
Parts of an Operational Plan

Usually, a standard operational plan would include:
Strategies
•How will the objectives in the strategic plan be achieved?
Actions
•What are the key actions that need to be undertaken (in detail) to achieve each strategy?
•These should be prioritised to give an indication of which actions need to be completed at
which stage of the plan.
oTimeframes
•What are the due dates for each action?
Resources
•What are the financial, material and human resource implications for the organisation?
oResponsibility
•Who is responsible for completing the actions?
oPerformance indicators
•How will you know if you have successfully completed each action?
oRisk management
•What is the possibility that elements of the plan will be unsuccessful? How can you
manage this?
oCommunication plan
•How will the plan be communicated to ensure maximum benefit?
oReview of plan
•How do you ensure that the plan remains current and will be monitored for progress?
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Key Performance Indicators
Key performance indicators (KPIs) are an important element in your operational plan. KPIs are
tools that are used to provide a quantitative measure of performance against predefined
targets. They represent the critical factors that must be met for a project to be considered
successful. The actual measures that you use may vary significantly from organisation to
organisation, but there are some key measures which are commonly used, such as:
 Achievement of a certain level of sales
 Achievement of a certain level of customer satisfaction
 Achievement of a specific rate of return
Your KPIs need to be an accurate reflection of your organisation’s mission and vision. Without
this alignment, you may find that you are unable to conclusively show that your plan is actually
working in the interests of the organisation as a whole. In terms of timeframe, KPIs are not one-
shot or short-term; they are generally medium to long term in nature. They need to align with
organisational goals, be measurable and consistent, and have an element of being time-based.
Let’s look at each of these statements in a little more detail:
 Align with Organisational Goals
Think about the overall organisational goals carefully. If your organisation has an overall
goal of becoming a socially equitable organisation, you may have measures that
examine charitable contributions reaching 5% of profit or environmental performance
measures. An organisation whose principal focus is on being highly profitable will need
measures of after-tax profit and shareholder equity. A non-profit will have different
goals and indicators than a for-profit organisation. The KPIs must be relevant to the
work the organisation is undertaking.
 Are Measurable
The value in any KPI is its ability to show you where you are working well and where
problems exist. This can only be done by ensuring that each measure selected is
quantifiable and can actually be measured in some way.
Saying that you want to be the most popular organisation in Australia is a lofty goal, but
one which is not able to be easily quantified. Adding an actual measure such as ‘To have
95% of people in Australia recognise our logo’ is a goal that can be measured through
survey methods.
 Are Consistent
KPIs must also be consistent. You cannot change the way you define profit from ‘before-
tax profit’ to ‘after-tax profit’ on a whim as this will make a huge difference when it
comes to comparing your results from year to year. KPIs should change as little as
possible from one period to the next. Any change should be minor; if you are continually
moving the bar, the organisation will have difficulty in actually reaching it, as all the
plans behind the KPI will have to change to meet the new goals.

 Are Time-Based
Your KPIs must integrate the significant timeframes into their formation. These would
include the long-term ones which concern overall goals and the short-term ones which
are more project-based. There is no point in coming up with KPIs if these are not bound
by time. If you do not have set deadlines for meeting your targets, you cannot
effectively measure them. Therefore, you must give great consideration to time and
factor it in as you write your KPIs.
Aside from setting KPIs that are SMART, you may also like to note alternative approaches for
writing effective KPIs. These include:
CLEAR FAST
Your KPIs should be: Your KPIs should be:
• Collaborative – encourage • Frequently discussed – should
cooperation and teamwork stay relevant and not stagnant
• Limited - specific and achievable • Ambitious – difficult but not
within a set timeframe impossible to achieve,
encourages you to aim high
• Emotional - aligned with passions
• Specific – detailed, concisely
• Appreciable – can be broken
written
down and allocated
• Transparent – visible to and
• Refinable – open to modifcation
openly shared with others
as necessary
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After having developed an effective set of KPIs for your organisation – ones that align with
organisational goals and are measurable, consistent and time-based – you can begin the process
of measuring and evaluating your overall performance. The KPIs give both the employees and
management within your organisation clear guidance regarding where you are headed and
what you ought to do to be successful. They should be displayed prominently so that all staff
are kept abreast of what they need to do to achieve the organisational objectives. This allows
you to ensure that everything your team does is focused on meeting or exceeding those KPIs.
1.2.2 Recruitment and Induction Strategies

Two processes central to human resource management, recruitment and induction, ought to
be outlined in your operational plan. It is vital that your plan has set guidelines on how you
intend to recruit and induct employees, and you use these to check if your current processes
are indeed at par with the standards you have set.
Employee Recruitment
Much has changed in terms of the methods of recruiting and hiring employees. Likewise, the
strategies you must employ to ensure that you hire the best and most fit people have evolved.
Of these, here are a number that you ought to consider:
 Your employer brand
One of the most fundamental methods of ensuring that you attract excellent applicants
is ensuring that you have a compelling and attractive brand. Before you even begin to
recruit new employees, ensure that you know what your company stands for and what
makes it stand out. Highlight and bank on these. Among all the recruitment strategies,
this is the most difficult and expensive one. It costs a great deal of money to improve
and maintain excellent company branding. However, there is a great return on
investment for this.
 Insights and data
The technological advancements of today have empowered people to be more data-
driven, and this is something you can use to your advantage during your recruitment
process. Use application tracking systems to track metrics such as application
completion rate, candidate response rate, qualified candidate rate, cost and time per
hire to understand and analyse your potential candidates. Moreover, focus on the
insights you find and use these to improve your processes.
 Innovation
In relation to the last strategy, it is important to be open to innovation in all aspects,
including recruitment. For instance, some organisations have replaced the
commonplace full recruitment process with simplified versions by skipping the CVs and
proceeding with tests. This skill-based approach saves time and resources while still
remaining relevant and at par with set policies and regulations.

 Job postings
There are many ways to strategically improve your job postings. For one, ensure that
you are maximising your available platforms. Look into niche job boards where you can
more specifically target the kind of candidates you want to attract. You should also
ensure that the postings themselves are well-written, concise, and compelling. Make it
easy to read, in line with your brand, and interesting for your potential candidates.
Provide just the right amount of information to pique their interest without
overburdening them.
 Passive candidates
Passive candidates are those people who may not be presently seeking jobs but have
the skills and experiences that you seek. Instead of keeping them at bay, make it a point
to engage with them. They may not apply for your company right now, but they may
eventually reach out to you and seek work. Likewise, you may never know if they would
want to leave their current jobs for your company and are just looking for the right
opportunity to do so.
 Employee referral
Seeking new employees through your present employees may prove to be an effective
recruitment strategy. This banks on the fact that your employees themselves are living,
breathing brand ambassadors who know and understand your company from the inside
out. Moreover, your employees would know their peers well enough to acknowledge if
they would be a good fit for your company. Setting up an employee referral policy that
includes bonuses for your employees may be a great way to encourage your employees
to make referrals.
 Interviews
Interviews are a central aspect of your recruitment process that must constantly be
improved. Too often, candidates who liked both the role and organisation that they
applied for would not continue with their application if they did not particularly enjoy
their interview experience. To avoid this, train your interviewers to speak with
confidence and engage potential applicants. Likewise, ensure that the questions
involved in your interview are all meaningful and avoid cookie-cutter ones.
 Past applicants and employees
Reaching out to past applicants and employees may be a strategy not often considered.
However, there may be times when your most ideal candidate failed to make the cut
for circumstances that neither of you could’ve controlled. Instead of closing your doors
completely, open yourself up to the idea of reaching out to past applicants who fit the
criteria but simply didn’t make the cut before or had other reasons for declining an offer
in your company as well as past employees who left the company in good terms and
has likely enhanced their professional experience since they left. Among your potential
applicants, these are most likely to pass your standards. Moreover, their background
with your company will enable easier hiring and induction.
21
Induction Programs
When a new employee starts in an organisation, they must be allowed to take part in an
effective induction process. This would have several benefits for both the employee and the
organisation.
An effective induction process helps ensure that new employees:
 Become productive more quickly
 Comprehend the policies and procedures of the organisation
 Understand the performance standards of their job
 Stay with the organisation (reduced turnover)
 Recognise the health and safety issues relevant to their workplace
 Understand the organisational culture.

Induction programs must be structured in such a way that they allow employees to receive the
information they require when they start working. Some organisations have a documented
induction process, and this includes the provision of induction manuals and copies of relevant
policies and procedures.
Each induction program must specifically be designed to suit the needs of both the organisation
and the new employee. However, the following matters are usually covered in an induction
program:
 Introduction by team leader or direct manager, to team members and other employees
 Organisational chart
 Organisational culture
 Team roles and responsibilities
 Standard operating procedures (SOPs), performance standards and expectations of
new employee
 Organisational guidelines which govern and prescribe operational functions such as the
acquisition and management of human and physical resources
 Undocumented practices in line with organisational practices
 Work times
 Business layout
 Security issues and access
 WHS procedures
It is vital to ensure that you are aware of your organisation’s induction process before new
employees start. By inducting your employees properly, you will find that they contribute more
effectively to your team.
On the website of the simulated business of Bounce Fitness, you will find a wide range of
recruitment and induction documents under the tabs Policies, Procedures and Documents.
Further Reading
The Fair Work Commission is an independent body that regulates employment
conditions and focuses its efforts on work-related concerns of employees. You
may visit their site to learn more about the FWC and ensure that your
recruitment and induction processes are aligned with their standards.
Fair Work Ombudsman
23
1.2.3 Purpose of Consultation
Anyone who is developing a plan ought to consult with everyone that would be affected by it.
This is because consultation plays a three-fold purpose. This is:
 To invite stakeholders to inform management what value they want (i.e. their needs,
wants and expectations) so the organisation can determine how to provide this value;
 To invite stakeholders to comment on management plans which provide the value
stakeholders are seeking; and
 To address any concerns that stakeholders may still have and that management has not
taken into account when developing its strategic and operational plans.
It is widely acknowledged that a plan made without proper consultation with stakeholders is
likely to fail. If you formulate an operational plan without consultation, you are putting your
organisation at a disadvantage for two reasons. First, bypassing the consultation process is
essentially failing to take advantage of all the knowledge and expertise available and relevant
to you. Second, failing to consult with your stakeholders would make them feel left out. This
would create negativity toward the emerging plan. Moreover, it could ultimately endanger the
relationships you have with your stakeholders.
For instance, formulating a budget for a department without consulting with the employees
within that department may be pointless. How would you know that you are not allocating too
much or too little funds? Likewise, you should not construct a plan for a new program without
consulting with the people who would be the users of this program. If you do, you are in danger
of wasting your time, energy and resources for a plan that might not be executed or received
well.
1.2.4 Determining Your Relevant Stakeholders

In the process of consulting with your stakeholders, you must first determine who you must
reach out to. Consultation should include all relevant personnel, namely:
 Colleagues
 Specialist resource managers
 Employees at the same level
 More senior managers and other managers
 Work health and safety committee/s
 Other people with specialist responsibilities
 Supervisors
 Union or employee representatives

Among these stakeholders, the first two merit further discussion. Your colleagues consist of
your workmates. Of all the people listed above, these are likely to be most relevant to you
because they will be the ones who would be most affected by your operational plan. The plan
you develop would likely affect their daily work life. On the other hand, specialist resource
managers are trained specialists with knowledge and expertise in seeking resources. They will
be the ones you reach out to as you acquire resource requirements for your operational plan.
1.2.5 Determining Communication Channels

Consultation is an active process in which management engages with its stakeholders through
various communication channels. These channels include:
 Focus groups – selected stakeholders would be invited to attend a meeting or a series
of meetings to discuss relevant matters.
 Invitation to send a written response – stakeholders would be invited to submit their
comments and suggestions in writing.
 Informal meetings – during social gatherings, management would mingle with
stakeholders and seek out their insights.
 Open meetings – stakeholders would be invited to attend an open meeting (i.e. a
meeting that is open to all) to discuss relevant matters.
25
 Surveys – stakeholders would be asked to complete a survey (i.e. in writing or online).
 Email/intranet communications, newsletters, or other processes and devices that
would provide employees with the opportunity to contribute to both team and
individual operational plans
 Mechanisms that could be used to give feedback to the work team in relation to
outcomes of the consultation
 Interviews, brainstorming sessions
1.2.6 Escalation Points

In any undertaking, there will always be problems and issues that would arise. When these
occur in the process of developing your operational plan, the necessity for escalation may
emerge. By definition, escalation is the process of bringing up an issue to a higher authority. It
is a proactive risk communication technique that seeks quick resolution by reaching out to the
necessary persons atop the hierarchy.
For the most part, escalation is perceived negatively, and this is mostly because of the potential
backlash it can have on the person who escalates an issue. However, it may be necessary,
especially when an issue is taking too long to be resolved and the delay this causes ends up
affecting other activities in the project. Some scenarios when it is most necessary to escalate
an issue include:
 Unclear decision-making
At times, the decision-making process may not be clear. This would especially be
apparent when there is an overlap in the decisions that need to be made. During these
moments, it is best to escalate your concern to your supervisors or higher-ups.
 Unbreakable silos
The silo mentality refers to the unwillingness to cooperate with other teams outside
one's own. This can be a barrier to achieving results when you need to collaborate with
people outside your team, but they refuse to. When this happens, it is best to reach out
to these people's direct supervisor or line management.
 Uncontrollable changes
There would be times when a stakeholder would demand changes that are too difficult
or too many to handle. When this happens, you may be not only overwhelmed but also
unable to keep up, realistically speaking. As such, it is best to escalate this concern to
your bosses so they themselves can speak to your stakeholders.

 Unrealistic expectations
Similar to the situation above, sometimes your stakeholders may be expecting more
than you can ever hope to deliver. If you are unable to manage their expectations
yourself, it may be time to escalate this problem to your bosses so they can do so
themselves.
 Unmanageable politics
Politics is inevitable in every project and organisation. When you are fortunate, this
won't impact you negatively and would work to your advantage. However, at times, the
power play may directly impede the progress of your project. Escalating this kind of
issue may be tricky because you might end up surrounded by people who are on the
same side. In such situations, you must tread carefully. Reach out to your supervisor
and ensure that in your escalation, you present and stick to the facts.
1.2.7 Presenting Your Plan

To enable your stakeholders to understand key issues and how these should impact on the
organisation, a presentation of your plan is necessary. This provides an opportunity for
feedback and adjustments before final submission. During your presentation, verbal agreement
or ‘agreement in principle’ can often be reached; this would then be subject to adjustments. It
is important to remember that both style and substance are important in gaining approval. As
such, the way in which you present your plan may greatly affect its likelihood to be approved.
Operational plans must be formally signed off by people with the delegated authority. Signed
copies should then be kept on file as formal records and be provided to the parties responsible
for implementing the plan.
27
1.2.8 Information Sources
Throughout the development and presentation of your plan, you will need to make use of key
information sources. These will enable you to come up with an operational plan that is relevant
to your organisation. Some of the sources you must take note of include:
 Resource requirement specialist
This kind of specialist will help you with the process of determining the resources you
would need for your operational plan. Their expertise would ensure that you are able
to effectively and efficiently acquire your resources.
 Business records
It is important to always look back at your existing records to find key figures and trends.
Such data would help you come up with a feasible plan that is grounded on the right
information.
 Marketing data
Along with internal records, it is vital that you do your research on current trends and
developments in the industry and the market relevant to your business. This will ensure
that the operational plan you develop is up-to-date and significant in the bigger picture.
 Other specialists
Finally, it pays to consider the help of other subject experts who can give advice on
specific aspects of your plan. These would include the likes of your financial and
business analysts.
1.3 Develop Contingencies for Operational Plan

No matter how foolproof you think your plan is, there will always be circumstances you cannot
completely avoid or prepare for. To address these, it is important to develop contingency plans.
Planning is all about looking at what you want to happen and making sure that it does. No matter how
well you make your plan, there will always be issues that crop up that will take you off track and things
that you need to work on to make sure that you achieve all your goals. Since a plan involves matters
that have not happened yet, they also include areas where you have had to assume certain
information. What if the assumptions you based your plan on never eventuate? What do you do then?
What if the bank doesn’t give you a loan? What if interest rates rise too quickly? What if your factory
burns down? What if ...?
Contingency planning is all about asking, ‘What if?’ It’s about considering what could potentially
happen and evaluating the risk of it occurring. Moreover, it’s about exploring possible consequences
should the worst happen, and using this knowledge as a way of planning around such events should
they occur.

Let’s look at an example. You ask the bank to lend you money to allow you to put your plan into action.
Your calculations show that an interest rate of 6.5% would let you make a profit and at 7% you could
still break even. What would you do if the interest rate the bank charges increases to 9%? What impact
would this have and how would you work around it?
Contingencies occur all the time in business; it is the planning you do to get around the situation that
is most crucial. Consider your SWOT (strengths, weaknesses, opportunities and threats) analysis and
look at the weaknesses and the threats in particular. These will show you where contingencies might
occur. A major new business opening up in your market is a threat which you may need to write a
contingency plan around – how will you react to this situation? Add heavy promotion? Reduce prices
on key lines?
Financial contingency problems can be added into your financial statements by adding relevant
comments or by having a set of financial figures that reflect the lowest possible figures as well as the
most likely. Your discussion and action plans within your business planning documents could also
reflect this information. You might, for example, add comments to your staffing sections about certain
situations and how you would react in them. You might say that if the market changes, you may need
an extra two staff members to achieve your desired results and comment on the financial implications
of such a situation.
Contingency planning is useful, but often, you cannot look at everything. There are so many things
that could go wrong, and you need to consider:
 The things that are most likely to happen

 The things that could potentially have the highest level of impact on the plan as a whole.
1.3.1 Contingency Planning Models and Methods

There are different models you can use in contingency planning. Among these, those that merit
discussion include:
1. Prevention, Preparedness, Response and Recovery Model (PPRR)
This model makes use of the emergency management cycle which essentially takes into
consideration the four phases involved in preparing for and addressing the occurrence
of risks. The model establishes plans to minimise losses caused by a risk event. This is
done through the identification of the risk events (i.e. incidents) that could occur.
The emergency management cycle begins with prevention, meaning the actions that
are done in the hopes of mitigating risk. The phase is then followed with preparedness,
which is essentially all the actions that are done to keep the organisation prepared for
the emergence of risk at any point in time. The third phase in the cycle is response, and
this involves the immediate intervention done once a risk event occurs. Finally, the
cycle ends with the recovery phase, where the organisation would undergo
reconstruction after the occurrence of a risk event before the cycle starts again.
29
2. Robson Risk Management Model
This model takes a holistic approach to assessing and managing potential risks that you
may encounter. It is composed of five interconnected components, namely:
 Personal Risk Perception
 Risk Identification
 Risk Assessment
 Risk Strategies
 Risk Evaluation
This method is inclusive and unbiased, taking into consideration as many perspectives
as possible in understanding risks. This model also highlights the necessity of resources
in preparing for risks and executing your contingency plans.
Like any other plan, working on your contingency plan requires much effort. Though there is no
one way to create contingency plans, there are several key steps you ought to perform in the
process of making your plan. These are:
1. Identify resources.
Just like your operational plan, your contingency plan would have resource
requirements. Determine what these are and then prioritise them based on their
relative importance to the project.
2. Determine key risks.
Identify the areas where you are most vulnerable and the events or situations that
could negatively affect your undertaking. In doing this step, it is important to involve
relevant stakeholders, especially your work teammates, staff and immediate
supervisors. Schedule brainstorming sessions with them. You may also seek subject
experts or consultants who would enable you to better understand the things that
could cause problems along the way.
During this step, it would be helpful to employ a mind map in organising the risks you
determine from brainstorming with your stakeholders.

Mind Map for Determining Risks
Identified Risk
Type of
Risk
Identified Risk
Identified Risk
Possible Type of
Identified Risk
Risks Risk
Identified Risk
Identified Risk
Type of
Risk
Identified Risk
Types of risks would pertain to what the scope or concern of your risk is (i.e. resources,
environment, time), and identified risks would refer to the specific events or scenarios
that you are anticipating. An example of this filled up map would be:
Delay in schedule
Time
Change in set deadline
Possible
Risks
Earthquake
Environment
Forest fires
31
3. Prioritise risks.
After listing all the possible risks, prioritise them based on the level of threat they pose.
A tool that would help you in this step is the Risk Probability and Impact Matrix. It is a
tool that determines the relative level of your risks based on their probability of
occurring and likely impact should they occur.
Risk Probability and Impact Matrix
High Probability
Scenario 1 Scenario 2
Scenario 3 Scenario 4
Low Probability
Low Impact High Impact
4. Create contingency plans.
During this step, you will now note the courses of action you plan to take should your
identified risks occur. It is crucial to keep in mind that all your efforts are towards
ensuring that you can maintain and return to regular operations after the event has
occurred and impacted your undertaking. It is also during this step that you would need
to consider communications, timelines and responsibilities of employees.
There are several methods of creating contingency plans, but using a simple table
format would make it most organised and digestible.
Contingency Plans
Risk Probability Impact Preparation Response
Scenario 1 High/mid/low High/mid/low What actions What actions

will you do will you do
Scenario 2 High/mid/low High/mid/low before the after the
event? These event?
Scenario 3 High/mid/low High/mid/low
would include
Preventive
Scenario 4 High/mid/low High/mid/low
measures.

5. Share your plan.
After completing your plans, finalise them, seek approval, and then make them available.
Make sure that they can easily be accessed by your stakeholders as needed.
6. Revisit your plan.

Keep in mind that things are constantly changing. This means that you may never have
to employ the contingency plans that you have made. It is, therefore, important to note
that your contingency plans are not set in stone. As such, it is important to review your
plans from time to time. Revise and update them as necessary so they continue to
remain relevant and useable.
“In life, as
in football,
you won’t
go far
unless you
know
where the
goalposts
are.”
Arnold H. Glasgow
33
1.4 Explain Plan to Relevant Work Teams
Now that you have established your plan, it is of vital importance that you explain this plan to the
people it would be of use to. Specifically, relevant work teams would need to understand the plan
so they can effectively employ it.
The fact is that there is no one set way of explaining an operational plan. This is because different
people have different levels of understanding and concern for your plan. However, calling for a
meeting to present your plan to relevant work teams would be an effective method of explaining
your plan to them. In doing so, there are steps that you can follow. These are:
1. Schedule the meeting
Formalise your meeting by sending out invitations to the relevant attendees. This can be
done via email, but you can also mention it verbally or make physical posts about it in your
announcement boards. During this step, you would also need to make logistical
arrangements for the meeting and prepare the necessary materials for your presentation.
Remember to give attendees enough time to prepare for the meeting, and don't simply
announce it once the meeting is drawing near. Moreover, it would aid you to know who
would be present so that you can note how you would present your information in such a
way that everyone would understand.
2. Establish your background and provide conceptual tools
Once you are in the meeting, remember not to immediately start by explaining the actual
plan. Instead, begin with establishing the background and context necessary for
understanding the purpose of your operational plan. Likewise, provide basic knowledge
that is necessary for understanding your plan. Highlight key terms and provide clear
definitions for these. It is important to first build a steady foundation to ensure that
everyone is on the same page.
3. Compare and contrast, describe your plan
As you delve into the meat of the meeting, remember to properly contextualise your
discussion and make it digestible for your audiences. Use past plans as a reference point for
explaining the current plan, making comparisons and analogies as necessary. Highlight
changes and the reasons for this. Moreover, make sure the employees can recognise why
this operational plan is essential and, if applicable, preferred or superior to others.
4. Connect your audience to the plan
As you continue to explain your plan, ensure that you are able to help employees connect
with it. In essence, this means they should be able to understand the relevance of the plan
to them. Shape your presentation in such a way that it speaks directly to your audience. For
instance, you can note how they were involved in the process of building this plan (i.e.
consultations) and highlight how their contributions are reflected in the final output. It is
important that they recognise how the operational plan has personal value to them as this
would make them more likely to welcome the plan with open arms and make good use of
it.

5. Allow your audience to ask questions
During or after the meeting, encourage your work teams to make inquiries and give
comments about the plan. Keep in mind that how you respond to the questions you receive
will make an impact on them. Given this, it is best to plan for the questions and concerns
that may arise during the meeting beforehand. Think through these and try to develop
concise and honest responses to each of them. By preparing in advance, you will eliminate
your anxiety and boost your confidence in the plan.
6. Provide supplementary materials to reinforce your plan
Give your relevant work teams the necessary materials that would help them better
understand your operational plan. For instance, you can provide handouts that outline the
contents of your plan before the meeting begins so they can refer to these throughout the
meeting. Moreover, you can continue giving supplementary materials after the meeting.
Examples of this would be regular emails, guides, posters, wallpapers and screensavers, and
employee reviews that are relevant to the plan. This is to remind employees of the
operational plan and to ensure that they do not simply forget about it once the meeting
has concluded.
Further Reading
You will find an example of an Operational Plan on the simulated business website
of Bounce Fitness under the Documents/Administrative tab.
35
Activity 1
Work as a team to complete an operational plan for the construction of Noah’s Ark. Labour will be
supplied by Noah and his wife and their three sons, Ham, Shem, Jepheth, and their wives.
Use the chart following to record your plan. You have 30 minutes.
Activity Objective Resources Procedures Responsible When? KPI

What is to Why will Where will How will it Person
be done? we do it? it be done? be done? Who will do
it?

Notes
37
Key Points: Chapter 1
• Always research, analyse and document resource requirements and develop an
operational plan in consultation with relevant personnel, colleagues and specialist
resource managers.
• Develop and/or implement the consultation processes as an integral part of your
operational planning process.
• Ensure the development and presentation of proposals for resource requirements
is supported by a variety of information sources and seek specialist advice as
required.
• Develop contingency plans for your operational plan.
• Obtain plan approval from relevant parties.
• Present and explain the plan to relevant work teams.

Chapter 1 – ‘True’ or ‘False’ Quiz
Tick ‘True’ if the statement is correct, and ‘False’ if not. True False
The most important difference between a strategic and an operational

objective is its time frame; operational objectives are short-term goals,
while strategic objectives are longer-term goals.
Strategic objectives are specific and short term enough to be considered

usable in everyday time and asset allocation.
Fixed costs are the costs of actually acquiring the new equipment that
you will need to make the plan actually happen.
Your performance indicators need to be an accurate reflection of your

organisational mission and vision.
Operational objectives are still usually too broad to make sense as a

specific set of daily tasks or weekly projects.
Physical resources are any resource that you can buy, feel and touch.
When it comes to gaining approval, the way you present your materials
is just as important as the content itself.
Consultation should involve all relevant personnel, colleagues and

specialist resource managers, employees at the same level or more
senior managers, other managers, work health and safety committee/s
and other people with specialist responsibilities, supervisors and or
union or employee representatives.
Contingencies rarely occur in business; it is the execution you do to get

around the situation which is most important.
Business planning attempts to bring a new idea into fruition within an

organisation.
39
Chapter 2: Manage Resource Acquisition
Now that you have gone through the basics of your operational plan, you can move on to the next
step. Resources are an important part of your organisation, and you need to be sure that the resources
you have are being acquired and managed properly.
This chapter delves into the details of how you manage your resource acquisition. The process is
further broken down into three sub-chapters that serve as key steps of this stage. First, you must
confirm that employees are recruited and inducted according to the organisation’s human resources
management policies, practices and procedures.
After this, you must likewise confirm that your physical resources and services are acquired according
to the organisation’s policies, practices and procedures. Finally, you will need to identify and
incorporate requirements for intellectual property rights and responsibilities in recruitment and
acquisition of resources and services.

2.1 Confirm that Employees are Recruited and Inducted According to the Organisation’s
Human Resources Management Policies, Practices and Procedures
The most important resource of any organisation is its people. Given this, it is vital to ensure that your
employees are properly managed in accordance with the rules set in place. These rules refer to the
various policies, practices and procedures that guide the organisation and its operations. In the
context of human resource management, the policies, practices and procedures serve as the basis of
how you handle your employees. It is especially important to note the policies, practices and
procedures relating to recruitment and induction as these are fundamental to the strategies you have
in your operational plan.
2.1.1 Policies and Procedures

Policies are made by organisations to ensure that members and stakeholders act responsibly
and make rational and well-informed decisions. These help an organisation remain consistent
in its approach to decision-making and problem-solving across the organisation’s locations (if
applicable). For staff members and stakeholders to understand their responsibilities in the
organisation, it is crucial that policies and procedures are both adopted and clearly
communicated to everyone.
On the other hand, procedures are meant to assist employees in implementing policies. If
policies are rules that tell you what ought to be done, procedures are the logical steps that tell
you how you ought to enact or implement these policies.
Recruitment and Induction

The policies and procedures in place for recruiting and inducting employees are both internal
and external in nature. There are laws in place to ensure that employees are properly sourced
and treated, and there are also company-based policies that delve into the specifics of your
hiring processes.
Your recruitment and induction policies and procedures should be clear and concisely written.
This will serve as your basis for the procedures and strategies you have in your operational plan.
Although there is no clear-cut formula for writing your policies and procedures, some things
you may want to check and ensure the presence of in your policies include:
 Purpose and Scope
Your policies must clearly identify your purpose for hiring employees. This must be
aligned with your vision, mission, and goals. Moreover, the scope of your recruitment
and induction must be established to ensure that all the subsequent efforts you make
remain relevant and necessary. Having a clear and well-written policy that establishes
both purpose and scope will enable you to have procedures that are also clear, well-
written and relevant.
41
 Guidelines
Policies must define the guidelines that must be kept in mind as you recruit and induct
your employees. These will serve as the foundation for your procedures. The guidelines
should cover your considerations for hiring a new employee, an overview of your
process for acquiring and training the employee, and the general flow of approval for
your processes. Your subsequent procedures should likewise be detailed versions of
your policies that delve into the details of your processes.
 Non-bias and Merit
In relation to your selection and hiring guidelines, you must ensure that the guidelines
you put in place are fair and unbiased. You should not exclude otherwise viable
candidates on the basis of sex, gender, race, religion, etc. You should instead focus on
the merit of your candidates and seek out the right candidates instead of merely trying
to fill a position.
Workplace Harassment, Victimisation, and Bullying
In this regard, a discussion on workplace harassment, victimisation, and bullying is
in order. Workplace harassment, victimisation, and bullying refer to the abuses or
misuses of power which are characterised by aggressive behaviour or actions that
humiliate, intimidate, and/or undermine an individual or group. Such actions may
cause emotional damage, reduce morale, and ultimately cause the loss of trained
and talented employees. They are unacceptable and must not to be tolerated under
any circumstances.
Federal and state anti-discrimination and equal opportunity laws are in place to
protect you from harassment and victimisation, including those due to:
 Age
 Breastfeeding or pregnancy status
 Being a union member (or not)
 Career status
 Disability or impairment
 Gender and gender identity
 Marital status
 Sexual activity
 Sexual orientation
 Physical features (excluding ‘accessories’ like tattoos or piercing)
 Political activity or belief
 Race
 Religious belief

Harassment is behaviour that a person does not want or reciprocate. More
specifically, it refers to behaviour towards an individual or a group of individuals,
that may or may not be based on any of the above attributes. It is repeated
behaviour that manifests less favourable treatment towards a person and is
considered both unreasonable and inappropriate in the workplace. It degrades,
embarrasses, or scares the victim under circumstances wherein a reasonable
person would have anticipated the possibility that the one being targeted would be
humiliated, offended, or intimidated by their conduct.
Workplace harassment often involves a misuse of power. It may occur when an
authoritative figure intentionally undermines or destroys the confidence and self-
esteem of an individual or group. Moreover, it can also occur if someone is working
in a ‘hostile’ or intimidating environment.
Harassment may be either subtle or overt. This includes, but is not limited to, the
following:
 Abusive and offensive language, shouting
 Allocation of humiliating or demeaning tasks
 Constant unreasonable criticism regarding work or performance (often
about petty or insignificant matters)
 Deliberate alienation, exclusion, or isolation of a staff member
 Electronic harassment (e.g. through email or SMS)
 Hazing or bastardisation (e.g. harmful or humiliating initiation rituals)
 Inappropriate comments about personal appearance
 Sabotaging a person’s work
 Sarcasm or ridicule
 Setting impossible deadlines with unrealistic expectations of one’s work
 Spreading gossip or false and malicious rumours, intending to harm a
person
 Threatening gestures or actual violence
 Confidentiality
It is important to protect the identities and information of your potential and new hires
throughout the process. Even if some applicants end up not being able to make the cut,
you must respect and protect their privacy. Your policies should note this and ensure
that no information is leaked unnecessarily. Moreover, your processes themselves
ought to be secured and kept private. Digital security, which refers to the ways you
ensure that your data and systems are protected from any attacks, intrusions or
unauthorized access at all times, must be a priority concern. You must be fully equipped
with the tools and knowledge that will enable you to safeguard your information from
any external threats.
43
Privacy Act 1988
In this regard, the Privacy Act 1988 (Privacy Act) merits discussion. The Privacy Act is
an Australian law that regulates the handling of personal information on individuals.
This involves the collection, storage, use, and disclosure of personal information as
well as the access to and correction of this information. Moreover, the Privacy Act
includes:
 13 Australian privacy principles which would apply to the handling of
personal information by most Australian and Norfolk Island Government
agencies along with some private sector organisations; and
 Credit reporting provisions which apply to the handling of credit-related
personal information which credit providers are allowed to disclose to
credit reporting bodies for inclusion on individuals’ credit reports.
Additionally, the Privacy Act:
 Regulates the collection, storage, disclosure, security, use and disposal of
individuals’ tax file numbers;
 Permits the handling of health information for the purpose of health and
medical research in certain circumstances when researchers cannot seek
individuals’ consent;
 Allows the Information Commissioner to approve and register enforceable
app codes developed by an app code developer or the Information
Commissioner directly;
 Permits a small business operator, who would otherwise not be subject to
the Australian privacy principles (apps) and any relevant privacy code, to
opt-in to being covered by the apps and any relevant app code; and
 Allows for privacy regulations to be made.
Further Reading
For more information on the Privacy Act, visit the site below.
The Privacy Act

Employment Conditions
As has been previously mentioned, there are both internal and external considerations for
recruitment and induction policies and procedures. In terms of external considerations, there
is a nationwide system in place that serves to ensure that employees are fairly treated by their
employers from start to end. This system includes national standards for all employees,
legislation and regulations (e.g. occupational health and safety, pension and payments), and
organisations (e.g. Fair Work Ombudsman and Fair Work Australia. Key points to consider
regarding your employment conditions include:
 Forms of employment
There are different forms of employment with varying levels of flexibility and stability.
The form of employment a person would opt for would be based on what they and their
employer would mutually require. Some common forms of employment include full-
time, part-time, and contract workers.
 Employment standards
By law, all employees in Australia are entitled to terms and conditions that are outlined
by the national employment standards. These include entitlements like weekly working
hours, leaves and requests pertaining to working arrangements.
 Occupational health and safety system
All organisations are required to ensure a safe workplace that meets national
requirements. Moreover, state and territory laws are in place to further delve into
occupational health and safety concerns. Part of your obligation to your new
employees, therefore, is ensuring work health safety and protective equipment as
necessary.
Work Health and Safety Act 2011 (WHS Act)
In this regard, the Work Health and Safety (WHS) Act merits discussion. The WHS
Act is a piece of legislation designed to ensure a safe and healthy workplace. It also
helps reduce the number of workplace injuries by giving all staff members
responsibilities. Everyone (i.e. employers, self-employed people, those in control of
work premises, machinery and substances, designers, manufacturers, suppliers and
workers) has an obligation to workplace health, safety and welfare.
Though the details vary from state to state, Australian WHS legislation is generally
aimed at:
 Providing and maintaining a safe working environment and secure systems
of work
 Providing employees with information on health, safety and welfare in the
workplace.
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Likewise, employees also have responsibilities under health and safety laws. These
include:
 Following instructions and rules in the workplace; and
 Working and behaving in ways that are safe and do not risk the health and
safety of anyone in the workplace.
Should you fail to comply, you can be disciplined by your employer or be prosecuted
under the health and safety law within your state or territory.
Further Reading
Access the WHS Act 2011 (Queensland) through the link below.
Work Health and Safety Act 2011
 Compensation and taxes

Both national and state and territory laws are in place to govern employees’
compensation. In your recruitment and hiring processes, you are especially concerned
about your obligation to your new staff members. This would include taxes and payroll.
2.1.2 Practices and Best Practices

Practices refer to the systems used in organisations in regular operations. These are the
accepted, normal, and customary ways of engaging in business. On the other hand, ‘best
practices’ refers to the human resource systems in place that positively and most effectively
impact the organisation. Some best practices that are relevant to you include:
 Selective hiring
Your organisation’s hiring practices are a reflection of its mission, vision, and goals. The
most important thing to note in hiring is that you ought to have a level of selectiveness.
This means that you do not simply hire people to fill vacancies. Rather, you ought to
hire the right people who are fit for the job. Every organisation wants to have the best
employees because this builds competitive advantage and ensures that goals are more
effectively and efficiently met.
 Training
Once you have hired the right people, you must ensure that you take care of them. In
this regard, investing resources in training your employees is key. From their orientation
and onboarding, you must ensure that you empower your people to be their best.
Develop relevant skills to ensure that they continue to grow within your company. Aside
from the benefits this will produce on an organisational level, this is beneficial for your
employees on an individual level. Seeing their growth would inspire them to
continuously remain committed to the company and its goals as doing so enables them
to reach their own goals as well.

 Performance-based compensation and bonuses
Fair compensation is important for any employee. If you hire the right people in your
organisation, it is all the more important that you compensate them properly. Provide
above-average compensation for your people to encourage them to stay committed to
their work. In order to ensure that this compensation is not put to waste and that your
people continue to add value to your company, you should set up measures and
indicators of their performance and use these as the basis of the compensation they
receive. This will likewise keep them in check and ensure that they work effectively and
efficiently.
Additionally, if you want to increase the quality of work, it would be beneficial for you
to set up performance-based bonuses. This means that if employees go above and
beyond the minimum expected outcomes, they will be rewarded. This practice would
encourage as well as condition them to work more effectively.
2.2 Confirm that Physical Resources and Services are Acquired According to the
Organisation’s Policies, Practices and Procedures
As with human resources, you must ensure that the acquisition of your physical resources and services
is in line with the policies, practices and procedures in place. In this regard, two processes merit
discussion. These are procurement and purchasing.
2.2.1 Procurement
Procurement is the business function that concerns the research and preparation necessary
before making a purchase. This guides the purchasing process and is required in all subsequent
engagements involved in resource acquisition. Procurement involves the nitty-gritty details
necessary in resource acquisition and includes setting up contracts and having the authority to
engage with the necessary suppliers. Key aspects of procurement include:
 Category management
This aspect of procurement looks into what you are going to source and what different
kinds of resources you require. These kinds of resources include:
o Direct resources – all materials involved in the creation of your finished product
o Indirect resources and services – all resources and services necessary for
getting your finished product to the market
o IT services – the systems and software necessary in the creation and
distribution of your product
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 Sourcing
This aspect of procurement is concerned about setting up supply, specifically locating
and determining places for acquiring your resource requirements. Most importantly,
the main concern of this aspect of procurement is finding the best quality of supplies
for the least amount of money so as to maximise and efficiently utilise your funds.
 Supplier relationship management
This is the human side of procurement that deals with and engages with people,
specifically suppliers who are necessary for the procurement process. This aspect is
concerned with maintaining and improving relations with suppliers to ensure that your
organisation can consistently and continuously get the best value for its money.
Procurement Process
Like most other processes, there is no one set or fixed process for procurement. However, each
procurement procedure has commonalities and key steps that are typically followed. These are
fundamental to the process and are likewise essential to note in your operational plan. A typical
procurement process would involve the steps outlined in the figure below.
Steps in the Procurement Process
6. Make
1. Identify the
arragements for 7. Perform quality
necessary
receiving assurance
goods/services
goods/services
5. Come to an
8. Analyse results
2. Look for suppliers agreement
and margins
(i.e. contract)
3. Request
4. Negotiate with
proposals/
suppliers
quotations
Generally speaking, the procurement process is relatively straightforward. It involves good

planning, research, as well as human relations and negotiation skills. However, it is important
to note that in the process outlined above, the actual negotiation and purchase of the goods or
services are steps linked to purchasing, a function discussed below.

2.2.2 Purchasing
As seen in the standard procurement process shown above, purchasing is indeed a subset of
procurement. While procurement is concerned with making all the necessary preparations that
precede the acquisition of a resource, purchasing is all about actually executing those plans and
acquiring the necessary goods or services. In other words, it is all about negotiating the deal
and making the purchase.
Purchasing is the business function responsible for buying raw materials, parts, machinery,
supplies, and all other goods and services that are used in the production system – from paper
clips to steel bars and industrial robots to computers. Likewise, the purchasing department is
responsible for all machinery, raw materials, supplies and services used by an organisation.
Without the appropriate strategy, purchasing can become overwhelming, so it is vital to
develop a successful purchasing strategy.
The first step in developing a purchasing strategy is to link it to the organisational objectives. To
accomplish this, strategy development must be a formal process. It is suggested that a formal
steering committee identify specific steps, such as market analysis, milestones and deliverables.
The result will be a strategy with well-defined goals which can then be further developed and
implemented with appropriate procedures and processes.
This strategy of establishing purchasing against organisational goals involves making sure that
every staff member in your organisation is familiar with the way things need to operate and
that they understand how this strategy will bring about benefits for them. By demonstrating
how purchasing strategies are aligned with overall organisational strategies, employees are in
a better position to understand why you are doing what you are doing and you are more likely
to receive support for the strategies. For instance, let’s say you decide to use a single supplier
for all of your office supplies. You can demonstrate how this will reduce shipping costs and
result in more significant discounts being offered. As you develop purchasing strategies, you
need to carefully consider how they will contribute to organisational objectives.
This synergy between organisational and purchasing strategy can be quite difficult to achieve.
This may be because different functions within an organisation operate with quite different
goals but finding a common thread (such as cost reduction) can be the key to this integration.
Think, for example, of where your service delivery is aiming to provide higher levels of customer
satisfaction. If you can demonstrate that ‘just in time’ purchasing strategies will lead to quicker
delivery times, you can link purchasing methods and strategies to your customer service goals
and objectives.
Attempt to build a set of purchasing priorities within the organisation. Look for areas where
purchasing strategies can lead to efficiencies in other parts of the organisation. The better you
can show the organisation working as a whole rather than as disparate functions, the more you
will be able to build commitment towards the specific strategies.
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Working across functions within an organisation (especially for purchasing, which does tend to
cross several different functions within any organisation) is very important when determining
strategies which can assist multiple functions. Think again about your preferred supplier
example; how can this help achieve organisational objectives? By ensuring the supplier that
they are your sole supplier, they are more likely to offer a benefit such as premium support.
The major difficulty with such a program of the strategy lies when you are looking at functions
where there are not significant links into other functions. Here, you may find it quite challenging
to find the strategic advantages associated with cross-functional strategies.
Linking to Supply Chain Objectives

Once you have found these critical links between overall strategies and the strategies
associated with specific purchasing programs, you need to take things one step further and
develop these strategies in ways that support the entire supply chain within the organisation.
Think about how the decisions you make will impact future decision-making. Does your
technology purchasing help your office become the office of the future – by having alliances
with organisations that will enable you to build systems that are effective in the future? Building
these alliances with specific suppliers can be particularly useful in that they allow an
organisation to offer you their insights and new offerings, and you can communicate your needs
to particular employees within the organisation. Large companies may have the ability to drive
product developments in their supplier if there is a strong enough pull from them in terms of
their needs.

Success Factors
Like any strategy or plan, purchasing needs to address those factors that it considers critical
enough to be seen as being KPIs. How do you know your purchasing strategy is working, and
how can you be sure that your purchasing is meeting its cross-functional goals? Look to build
solid relationships with suppliers and even the supplier’s suppliers to build this strong
relationship and allow you to determine when success is being achieved.
Success in terms of purchasing is more than just the price you are paying – it is the total cost of
your purchasing, including costs associated with freight, wait and lead times, loss of sales, and
many other factors. Look at how you will measure success – is it just the cost or will you need
to look at the long-term goals before you can show your strategies as being successful? Will you
need to look beyond the initial investment in your major purchasing to a point in the future
where the plan is completely paid back before success can be properly determined?
As previously mentioned, purchasing strategies are cross-functional in nature. They involve
more than just the purchasing staff; working with other departments is critical. Some of the
more common systems and departments that interact with purchasing include:
 Human Resources
The human resources department will provide you with the right people to run your
purchasing department. They can assist you in finding people with the right skills,
experience and knowledge to drive your purchasing strategies and achieve the desired
results.
 Information Systems
Purchasing systems often rely heavily on information technology to be successful –
particularly where some systems need to be used by a wide range of users. Bringing
your IT department on board to support any such system is critical to success.
 Organisational Structure
The structure within your organisation must operate in such a way as to facilitate the
acquisition of staff and provide for the flow of information between departments.
 Measurement Systems
Success factors need to be carefully considered so that the impact of your purchasing
strategy can be monitored.
How Far Will It Go?

Your operational plan will rely on purchasing methods in some form or another. The higher the
reliance on resources within a plan, the more critical the success of purchasing strategies will
be. Physical resources and purchasing become most vital when you are looking at a
manufacturing organisation, where ensuring supplies are available in the right place at the right
time can mean the difference between an order being made and an order being lost.
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Purchasing is a process; it needs to have a specific series of steps which must be made for things
to happen correctly. You might look at evaluating this process to ensure it runs smoothly within
the organisation, or you might try to shift the processes that are currently in place to ensure
they meet your overall strategy goals more efficiently. You may need your purchasing staff to
work alongside others within the organisation to better understand their specific processes
before purchasing processes can be written. Understanding how manufacturing is completed
can drive the methods used to purchase inventory, for example.
Every industry is also different. Lead times vary greatly depending on the type of product or
supply you are sourcing and having an understanding of how these are brought to market can
be very important in writing supply strategies. Technology is also constantly changing, so
understanding the impact specific technologies may have in the process is also important. Think
about the difference between purchasing a new computer network and a new desk as an
example. One manufacturer is constantly changing their product so staying up to date is
extremely important. The other will not change quickly at all.
Types of Purchasing Decisions
Now that you have learned how to develop strategies for purchasing, take a look at the four
major types of purchases that you are likely to make.
1. Small Purchases
This includes any purchase that is made within a department rather than by a
purchasing officer. You will generally pay for these types of purchases using petty
cash, and the purchases will generally be for amounts less than about $100 (or
whatever your petty cash allowance is). It will be up to the individual manager to
decide on a supplier, place the order and manage the process.
2. Regular Purchases
In regular purchases, the buyer in the purchasing department buys goods and
services on behalf of the requesting department. Although the procedures for these
various classes of purchases generally cover getting the products and services to
the requesting departments, the accounting department can pay for the items only
after it has been notified by the requesting department how much of the supplied
items are of the requested quality.
3. Large Unique Purchase Methods
One of the key functions of the purchasing department or purchasing officer is
building an interface between the technical specialists in the department or
workgroup needing a resource and the suppliers who could potentially supply it. In
these types of purchases, price is often not the deciding factor in the selection of
an appropriate supplier. Instead, you will look at the ability to deliver quality goods
and services on a timely basis and to meet the unique technological and business
needs of your organisation or specific operational plan.

4. High Volume Continuous Supply Methods
When materials are purchased in high volume to be continuously supplied
throughout the month or year, purchasing officers tend to issue requests for
quotations to several potential suppliers. When a supplier is selected (based on
price, quality and ability to supply at desired levels) a blanket purchase order that
covers the materials to be purchased for the entire year is issued. The authorisation
for this level of purchase should come directly from the need for the materials in
the production budget. These are often prepared months in advance and cover long
periods.
2.2.3 The Role of Policies, Practices and Procedures

Much like in human resources, there is a need to align organisational policies, practices and
procedures with your resource acquisition processes. These are fundamental in guiding the
direction, method and means through which you engage in any operation. Moreover, the
procurement and purchase of your physical goods and services ought to be reflected in your
operational plan. The strategies and processes discussed above are part and parcel of what
should be seen in your operational plan.
It is likewise important to recognise the overarching relationship that guides resource
acquisition, operational planning, and organisational policies, practices and procedures. All of
these are rooted in your organisational goals, which are the basis and guiding force for the
policies, practices and procedures you have set in place. These policies, practices and
procedures are necessary mechanisms that will enable you to successfully align your
operational plan with your organisational goals. Finally, resource acquisition is a key operation
within your organisation that you must plan for and ensure alignment with organisational goals
by checking them against existing policies practices, and procedures being followed.
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Fair trading laws
One example that shows how policies, practices, and procedures are relevant to your resource
acquisition process is seen through the fair trading laws. At both a national and local level, these
laws are in place to protect both your business and your stakeholders from unfair trading
practices. Along with industry codes of practice, fair trade laws are in place in order to ensure
that all businesses operate fairly and engage in healthy competition. Moreover, they ensure
your customers that they are protected and properly informed at all costs. It is important that
you are aware of both the rights and obligations of your business. One key piece of legislation
that merits further discussion is the Competition and Consumer Act 2010.
Competition and Consumer Act 2010 (CCA)
This is a national law that regulates trading in the country to ensure that businesses deal
with their customers, competitors and suppliers properly. Moreover, the act makes it illegal
for businesses to limit or prevent competition.
The act discusses the following key points:
 Collective bargaining
 Company mergers and acquisitions
 Industry codes
 Industry regulation
 Price monitoring
 Product labelling
 Product monitoring
 Unfair market practices
The act is administered and enforced by the Australian Competition and Consumer
Commission, with the aid of state and territory regulators.
Further Reading
The Fair Trading Act 1989 regulates trade practices and the supply of goods
and services in Queensland. Access the Act through the link below.
Fair Trading Act 1989

Environmental Issues
Another example that shows how policies, practices and procedures are related to the resource
acquisition process is in terms of environmental issues. Modernisation and commercialisation
have created problems for the environment. Everything from air and water quality to denuding
of forests is affected. Given this, all business projects are subject to environmental influences.
It is, therefore, of vital importance that the environmental influences involved in your
operations are determined at the onset so that you can incorporate the appropriate measures
to address these and build them into your operational plan.
Further Reading
To learn more about environmental issues, you may check the official website
of the Australian Bureau of Statistics’ report linked below.
Environmental Issues: Energy Use and Conservation
2.3 Identify and Incorporate Requirements for Intellectual Property Rights and
Responsibilities in Related to Acquisition of Resources
Intellectual property (IP) refers to the set of rights given to individuals for the protection of their idea
or invention. A fundamental understanding of these is essential to your business, specifically with
regard to your resources and services which are your business assets. Protecting your intellectual
property can give you a competitive advantage. Doing so will keep others from infringing upon the
products, services and processes unique to your business. In addition, IP rights are themselves
business assets as they can be sold and licensed.
2.3.1 Legislation and Regulations

Legislation pertains to the act of making or enacting laws. Whenever people talk about ‘the
legislation,’ they are referring to a law or a body of laws. The legislation within a state or
territory is the body of laws specifically enacted to control and administer the state or territory.
Regulations – also referred to as ‘rules’ or ‘administrative law’ – pertain to how the legislation
is applied. For the most part, regulations are specific in nature. They are administrative ‘rules’
that describe rights as well as allocate responsibilities. Regulations can take many forms. For
instance, they can be:
 A self-regulating mechanism for an industry (e.g. a trade association)
 Legal restrictions established by a government authority
 Social regulations (e.g. ‘norms’, co-regulation, or market regulation)
 Actions of conduct imposing sanctions such as a fine.
55
Every organisation is subject to various laws, regulations, and Codes of Practice requirements.
You must make yourself familiar with all relating to your organisation and its production.
Fortunately, Australia has a number of laws pertaining to intellectual property. This means that
your business assets can be protected by law. Moreover, IP Australia is generally responsible
for intellectual property matters. As outlined by the Australian Trade and Investment
Commission, key IP laws and procedures include:
 Patent protection
The manufacture, use, and/or selling of an invention can be protected under an
Australian patent. Moreover, you can use the patent to license a third party to
manufacture an invention after agreeing on terms and conditions. There are two types
of patents granted in the country. These are:
o Standard patent
This patent lasts for up to 20 years (25 years for pharmaceutical substances).
The invention that claims a standard patent must be new, differing from
existing technology. It must involve an inventive step, meaning it cannot be
easily produced by an expert from the field in which it belongs. Moreover, the
invention must ultimately be useable in an industry.
o Innovation patent
This patent lasts up to eight years. It is meant to protect inventions with
relatively short market lives (e.g. computer-based inventions). Unlike a
standard patent which requires an inventive step, inventions that claim an
innovative patent must include an innovative step. This exists when there is a
substantial difference from the invention it innovates from, and this difference
greatly improves the function and use of the previous invention.
Further Reading
IP Australia has a detailed guide to understanding patents and the process of
applying for one. Their site will provide you with information on this.
Understanding patents

 Trade mark protection
A trade mark is a sign or symbol you use to distinguish your business, goods, and/or
services from others available in the market. Businesses may register their respective
trade marks as marketing tools. Once this is done, their registered trade marks will be
legally protected. This means that others cannot use your brand.
Further Reading
IP Australia has a useful step-by-step guide to understanding trade
marks and applying for their protection. Their site will provide you
with detailed information on such.
Understanding trade marks
 Domain name registration

A domain name refers to the internet site address that directs and grants access to your
website. Every domain is different, and you can register yours under national law.
Addresses that end with ‘.au’ are officially administered and regulated by the .au
Domain Administration (auDA). To register, you must select a domain name that is
available and meets the policy for domain name eligibility and allocation.
Further Reading
The auDA has a guide to domain name registration you may find
useful.
Domain Name Registration
 Design protection
For as long as legislative requirements are met, you can apply for the protection of a
variety of designs. This includes a single design, a single design that relates to several
products, or multiple designs. IP Australia has a specific division for the registration of
designs – the Designs Office.
Further Reading
More information regarding the process of design protection and
registration is available on IP Australia’s website.
Understanding designs
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 Copyright protection
The fifth and final element that merits discussion is copyright protection. Unlike those
discussed above, automatic copyright protection exists in Australia under the national
legislative framework. With some exceptions, no specific or additional registration is
required to protect your material. By design, national copyright law protects the
creation of new material. Moreover, Australia is a signatory to several international
conventions on copyright.
2.3.2 Intellectual Property and Your Operational Plan

Throughout your operational plan, intellectual property will prove to be a significant point of
discussion. This is because every business has discoveries, creations and processes unique to it,
and all these are assets that ought to be protected so they do not get stolen or used without
permission.
In recruitment as well as in the acquisition of your resources, your processes will further reveal
the value of intellectual property rights. First, in your recruitment, a part of your process would
involve getting your candidate to sign an employment contract. This is a step that comes later
in the recruitment process, once they have been fully assessed and you have decided that they
are fit to work in your organisation. In their contract, there ought to be a clear section that
discusses intellectual property in the context of the job and the organisation they are about to
enter.
More often than not, this clause would simply state that any findings or inventions made in the
duration of their employment would be credited to the organisation, as it is by virtue of the
resources made available to them through the organisation that they have come to such a
discovery. This clause would also include a clear indication that the materials, processes and
other resources that the employee would use as they complete their work tasks would be
exclusively utilised for official work-related purposes only. Should the employee need to use
this for unofficial or non-work-related functions, they must first ask for permission formally.
Likewise, when it comes to physical resource acquisition, it is important that the resources you
acquire remain protected. Have rules and regulations set up to remind employees of the proper
use of resources and ensure that no misuse of such would occur. This is especially important
when you are in the process of sourcing the materials that fall under direct resources, as these
are the key resources involved in the creation of the products your business sells. For services,
it is important that the content and processes accessed by personnel remain protected as well.
Once more, clear rules and regulations ought to be set up and made available to the relevant
personnel.

Activity 2
Purchasing strategy development is often cited as a trend facing management
professionals. Ask yourself the following questions to determine if the foundational
building blocks are in place in your organisation to address purchasing strategy
development successfully. Discuss the following with your training group.
 What training or qualification do purchasing and supply management professionals
in your organisation need so that they can make educated decisions regarding the
purchasing strategy as it relates to the supply market?
 How does senior management demonstrate active support for the implementation
of new purchasing strategies?
 Does the organisation possess common goals and measures which the strategy will
support? What are they?
 Are tactical activities handled or automated by internal users so that purchasing
and supply management professionals can devote time to strategic initiatives?
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Notes

• Ensure that employees are recruited as well as inducted within the organisation’s
human resources management policies, practices and procedures.
• Assure that physical resources and services are acquired in accordance with the
organisation’s policies, practices and procedures.
• Recognise and incorporate the requirements for intellectual property rights and
responsibilities in recruitment and acquisition of resources and services.
• Bear in mind the local and national legislation in your acquisition of resources and
services. Ensure that you strictly adhere to these.
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Procurement and purchasing are two completely separate functions.
The form of employment a person would opt for would be based on what
they and their employer would mutually require.
By law, all employees in Australia are entitled to terms and conditions

that are outlined by the national employment standards.
No specific or additional registration is required to copyright your

material.
Purchasing is a business function that is responsible for buying raw

materials, parts, machinery, supplies, and all other goods and services
used in the production system.
Intellectual property are liabilities that are costly to your business.
Purchasing strategies do not need to be communicated. Most of the

time, these are already understood and recognised by your staff
members.
Purchasing strategy must link to organisational objectives.
Small purchases are often made from petty cash.

Chapter 3: Monitor and Review Operational Performance
The final element in managing your business operational plan is monitoring and reviewing the
operational performance that results from its implementation. Like any other endeavour, the
management of your operational plan does not end once it is put in place. Checks and balances must
occur to ensure that your plan is being used appropriately and is able to meet its set objectives.
This chapter discusses the monitor and review of your operational performance in detail, further
dividing it into four sub-chapters that serve as the steps of this stage. You start the monitoring and
review of your operational performance by assessing the progress of operational plan in achieving
profit and productivity plans and targets. You will then identify areas of under-performance and
likewise recommend solutions and take prompt action to rectify the situation as necessary.
Once you have accomplished these, you will need to plan and implement relevant processes for
ongoing monitoring and confirm that individuals and teams are provided with the support that they
need. Finally, your monitoring and review process will conclude with negotiating recommendations
for variations to operational plans. These recommendations would require the approval of designated
persons.
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3.1 Assess Progress of Operational Plan in Achieving Profit and Productivity Plans and
Targets
Earlier in the process, you established relevant objectives and criteria for acceptable performance.
Your operational plan is concerned above achieving these goals and objectives. In assessing if these
are met, you must begin a review of the system you have, and from this review determine the system’s
effectiveness and whether any improvements need to be made. In doing so, it is essential to have a
fundamental understanding of profit, productivity plans and targets. These three would indicate your
relative success and progress towards attaining your goals.
Profit is the figure that represents the amount of earnings that exceed your expenses at a given period.
In essence, this is equivalent to your net income. To calculate it, you must simply subtract all the
expenses you’ve had from your gross income.
On the other hand, productivity plan is a type of plan specifically designed to improve productivity
levels. Within an organisation, the strategic plan and the operational plan are recognised as elements
that make up this productivity plan.
Finally, targets are feasible, small-scale goals that are aligned with larger-scale and long-term goals
and objectives of your organisation. Success in reaching targets is what drives success in your business.
Examples of targets would include weekly and/or monthly sales quotas and quarterly budget targets.
All three concepts are related and play a key role in your operational plan. Targets are your starting
point; they are the objectives you attempt to work towards. Productivity is process-based; it serves as
an indicator of how effectively your resources are being used in order to achieve your set objectives.
Lastly, profit is output-based; they represent the financial aspect of your objectives which indicates
how much you have earned at any given time period.
3.1.1 Using Key Performance Indicators

As mentioned in the first chapter, key performance indicators (KPIs) are tools that are used to
provide a quantitative measure of performance against predefined targets. In determining if
you have successfully earned profit, maintained productivity, and met your targets, it is
important to have KPIs in place. These three indicators have different relationships with KPIs,
as will be discussed below. Most importantly, being able to understand and integrate these
concepts will help you effectively measure your success in relation to your overarching goals
and objectives set in your operational plan.
Targets and KPIs

Most people would confuse targets and KPIs, using the terms interchangeably. However, there
is a fundamental difference between the two. While KPIs are digestible metrics that help you
understand how well you are performing, targets are the defined small-scale goals that your
KPIs ought to work towards.

Below is an example that illustrates the difference:
Strategic Objective
• Increase employee satisfaction
Key Performance Indicator
• Reduced employee absenteeism
Target
• Reduce employee absenteeism by 20% by December 2020
In essence, your strategic objective serves as the foundation of your KPI, and your target is the
specified goal that you intend to meet.
“Progress has little to do

with speed, but much to do
with direction.”
Source Unknown
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Profit and KPIs
The most common function of KPIs is to measure and improve productivity and profit. Using
KPIs to determine progress and success in earning profit is beneficial as it promotes
accountability, provides support in decision-making, and helps you gauge the performance of
your employees. Some examples of KPIs relevant to determining progress in achieving profit
include:
Sample KPIs for Profit in Different Industries
Childcare Industry
• Occupancy percentage per month
Construction Industry
• Number of new sales enquiries per month
Medical Industry
• Patient waiting time (in minutes)
Real Estate Industry

• Market share percentage (in local market)
Productivity and KPIs
Along with profit, productivity is the most common factor KPIs attempt to measure. There are
many facets of productivity that a KPI can measure, but the most important ones would include:
Effectiveness Levels
• It is important to know how much time your employees spend

actually working on tasks and getting things done. They should use
office hours effectively and not let the time waste away simply
daydreaming, browsing through social media, and taking more breaks
than necessary. A feasible KPI for this is an 84% level of effectiveness
per day.
Efficiency Levels
• To supplement employee effectiveness, it is important that they are

also working efficiently. It is, therefore, important to measure how
long it takes for your employees to complete work tasks so you can
determine in which aspects they can be further trained.
In measuring your productivity-based KPIs, you can use tracking applications and software
available.

3.1.2 Budgets in relation to Profit and Productivity
One objective of budgeting is to provide a basis for measuring actual performance. Such is
worth doing if action will be taken as a result. In too many an organisation, the production of
results compared to budget is viewed as the end of the process. However, if no action would
be taken on the basis of management accounts, there is little value in producing them and even
less in wasting management time discussing these.
To understand the relevance of budget in relation to both profit and productivity, there are a
number of financial terminologies you ought to understand.
Profit and Loss Budgets

For measuring profit and determining if you are able to meet your profit-related objectives, the
profit and loss budget merits discussion. This type of budget is used to define and forecast the
income and expenses of your business for an upcoming time period, often the upcoming
financial year. It helps you set targets and provides you with an operational platform.
To create your profit and loss budget, you must align it with your strategic and operational
plans. Moreover, it is advised that you use past profit and loss statements, figures, and pertinent
financial information in ensuring feasibility and accuracy in your budgeting. Once your budget
has been finalised and approved, you must continuously monitor its usage throughout the set
time period. If you have made a budget for the financial year, check monthly figures and results.
It is essential that you observe the profit-related variances that would emerge. Variances refer
to the differences or changes that would occur in your figures through time. Some key variances
you must note include:
 Revenue Variances
Observe your total revenue and the individual figures that relate to it. Check if some of
these line items generate more revenue than others and determine if the revenue
you’ve generated is more or less than what you had projected.
With this, try to figure out what reasons would cause such a result. Could it be emerging
trends? Is there a need for you to take action? Contextualise this and determine what
can be done to make more profit.
 Cost of Goods Sold Variances
These variances would include labour, material and other project costs that fall under
the ‘direct resources’ discussed in Chapter 2.2. Like your revenue variances, you ought
to check if your figures are more or less than what you had projected.
If your expenses were higher than expected, what can be done to lower expenses? If
they were lower, what initiatives or factors did you take that led to this?
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 Gross Profit Variances
Gross profit refers to what you have earned for your work. Check if you made more or
less than you projected and try to understand the factors that led up this result. Much
like revenue variances, your figures could indicate emerging trends that you need to
consider. If so, you must act accordingly and adjust your forecasts.
If you earned less than expected, determine the reasons for this and find actionable
ways of correcting or preventing what could have gone wrong. If you earned more, try
to determine what led to this and bank on these factors to continuously increase your
growth. Moreover, don’t forget to celebrate with your team. You deserve it!
 Expense Variances
Finally, expenses concern the costs you have had to allocate for general operations,
administration, marketing, research and development, and the like. Should you find
that you have variances in this category, it is important to determine the nature of this
expense. Was it a one-time expense or is it something you should expect and plan for
in the future? Is it worth the investment, and should you continue to invest in it?
Calculating Productivity
Productivity measures the efficiency of a person, machine or organisation in producing useful
outputs (i.e. goods and services). Along with profit, this is the principal goal of most any
organisation. Moreover, the achievement of such is used to determine the progress of an
operational plan. For you to fully assess the relative success of your plan in relation to achieving
profit, productivity and set targets, it is essential to employ an integrative approach that
involves technical and financial perspectives.
Productivity is usually measured using the following formula:
Productivity = Quantity produced / Amount of resources used
To simplify this even further, you may notice that there are two sides to the productivity
equation – the amount of production and the amount of resources used. Productivity varies in
the amount produced relative to the amount of resources used. The productivity of each
resource can and should be measured.
To determine levels of productivity, you can use measures such as the following:
 Capital – the number of products produced divided by the asset value
 Materials – the number of products produced divided by dollars spent on materials
 Direct labour – the number of products produced divided by direct labour-hours
 Overheads – the number of products produced divided by dollars spent on overheads

Such measures are not perfect. For example, the measure of materials productivity includes
price. This is generally not desirable, but there is no other practical way to combine the many
different units of measurement for the diverse materials used in production. Although such
measures of productivity have their shortcomings, they do provide a starting point for tracking
productivity so that managers are aware of productivity trends.
In the past, when labour cost was the predominant cost of production, productivity was only
measured by the output per hour of direct labour. Today, however, there is a need to look
beyond merely direct labour costs and develop a multi-factor perspective. Our view of
productivity must be towards improving the productivity of all the factors of production –
labour, capital, materials and overhead.
The trouble with measuring productivity through output direct labour hours only is that the
productivity of one factor can easily be increased by replacing it with another factor. For
example, if a factory that previously bought castings and machined them in-house decides to
purchase the castings pre-machined, then the company can lay off skilled workers and sell the
machine tools. What happens to productivity? The output will remain the same, but the number
of workers will fall so that labour productivity will increase. Capital productivity will also
increase because the investment will be less, and production levels will be unchanged. Still,
materials productivity will decline because the value of purchased materials will increase while
productivity levels will not change. By merely looking at one aspect of the productivity equation,
therefore, you are getting a false view of the overall productivity of a business. In order to fully
understand the productivity of the firm in relation to its resource use, you must combine several
productivity measures.
In order to establish whether or not your current production process is operating at its most
efficient for your business, you need to develop review systems against which you can compare
your current performance. Any variances between your ‘ideal’ results and your ‘actual’ results
should be carefully examined to determine the reason.
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Earlier in the development process, you examined the need to develop measurable objectives.
It is at the review stage where these measures become increasingly important. These objectives
can be used as a form of ‘ideal result’; that is a result which is closest to a situation which would
be the best you could hope for given the current resources being used. You may also find it
useful to obtain historical data on productivity within your firm; this may assist in making the
objectives you are striving for more realistic. Although it is impossible to get data from your
competitors to use as a means of analysis, you may be able to obtain industry-wide figures from
the trade association which covers your industry. In essence, these may be useful in establishing
how well you compare to similar companies.
You then use the formula mentioned earlier to determine the actual productivity of your firm.
You may decide to sample productivity at various stages of the production process, and over a
number of different days to get a broader view of current productivity rather than just a
snapshot of the situation at one particular point. Look at conducting regular reviews of
productivity. You may decide to conduct such an analysis once a month, or even more
frequently. The key to remember is that you are gathering actual data on the productivity of
your firm.
The final stage involves comparing the actual results with your desired results and then
evaluating how well you are meeting the current objectives of your organisation in terms of
productivity. You ought to determine the variance using a percentage difference of where you
want the organisation to be on each productivity measure. The higher the percentage figure
obtained, the worse the variance is. There are two types of variance figure you can obtain,
namely positive variances and negative variances.
Positive variance
•Occur when you perform above the level of productivity you have set in your
firm’s objectives
•Generally a positive sign that your production processes are working as they
should but you must ensure that the productivity measure is not masking
other problems
Negative variance
•Indicative of a problem within the production process

•Data must be analysed to establish the cause of the variance. Seek input from
your team members for possible causes and recommendations for
improvement.
Continually reviewing the production processes is vital as it means that you can ensure the
productivity levels that you desire are firstly achieved. Once you have achieved the desired
levels, you must then ensure that they are maintained by regularly reviewing the production
processes.

Further Reading
You will find sample budget templates and actual financial information on the
simulated business website of Bounce Fitness under the Documents tab.
3.2 Identify Areas of Under-Performance, Recommend Solutions and Take Prompt Action
and Rectify the Situation
Under-performance is a common and unavoidable issue you will encounter in working within any team
or organisation. To lessen its occurrence and address it, you must have a fundamental grasp of the
concept. This will enable you to recognise it at its roots and therefore effectively deal with it using
tried and tested methods.
For this discussion, the Fair Work Ombudsman website provides sufficient information on the
appropriate management of under-performance issues. As such, passages from the site will be
integrated to enable a more well-informed approach in learning about under-performance.
3.2.1 Under-Performance Defined

Underperformance of the Operational Plan
In terms of your operational plan, under-performance occurs when you are unable to
successfully achieve the operational objectives that have been set. In particular, under-
performance of your operational plan manifests in the failure to:
 Achieve profit
 Execute productivity plans
 Meet targets
Underperformance of Employees
Your employees’ performance is closely related to the performance of your plan. According to
the Fair Work Ombudsman, under-performance or poor performance, is exhibited in the
following ways:
 Unsatisfactory work performance, that is, a failure to perform the duties of the position
or to perform them to the standard required
 Non-compliance with workplace policies, rules or procedures
 Unacceptable behaviour in the workplace
 Disruptive or negative behaviour that impacts on co-workers.
Although closely related, underperformance and misconduct are not the same. Misconduct
refers to serious misbehaviour of employees (e.g. theft, assault). These behaviours may warrant
instant dismissal, so it is best to seek proper advice before taking definitive action should they
occur.
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Documenting Performance
Although it seems simple enough, documenting performance proves to be a difficult task. You
may sometimes be tempted to simply base your record on a single memorable incident which
you associate with your employees or on the most recent interactions you have had with them.
However, documenting performance is a serious undertaking that you must devote time and
effort to – no matter how tempting it may be to simply rely on your memory. Here are steps to
keep in mind so that you may effectively do so:
1. Be specific
Being specific means properly labelling your entries with pertinent details (i.e. date,
time) and being as detailed as possible in your records. For instance, instead of saying
that your employee was absent three times, note the three dates for each instance as
well as the reasons that were given for these absences. In documenting performance
for your operational plan, you must be especially detail-oriented. Your assessment of
the relative progress and success of your plan would be heavily reliant on the quality of
your records.
2. Focus on observations
For any record, it is important to stick to the facts and leave out any assumptions that
are unwarranted. In terms of your plan, this means avoiding rumours and petty drama
that may be circulating during its execution as well as personal rants about the plan.
For employees, this means you should avoid writing about irrelevant details on the
employee’s personal life, theories you’ve made in an attempt to explain their
behaviours, and unwarranted opinions regarding your employee.
3. Include both positive and negative points
In the spirit of fairness, you must remember to record the good and the bad points. For
your plan, this means that you should highlight both the failures and achievements you
have encountered throughout its execution. For employees, this means noting both
good and bad behaviours they have displayed. This would include their positive
contributions to the team, the project standards and deadlines they met and failed to
meet, their instances of tardiness and absences, your personal interactions with them.
4. Track and note trends
In your process of writing, you may begin to see patterns of recurring behaviour in your
employees as well as results or relationships between or among certain elements of
your plan. Note these by flagging or highlight them and then discuss them later on as
necessary.

5. Be concise
Although you ought to be specific and detailed in your logs, don’t write lengthily and
unnecessarily. Remember to focus on making the most crucial points and add details
only as necessary, leaving out the comments that may not have any merit.
6. Avoid bias
It is important to check your use of language and ensure that you are not showing bias
towards or against the employees whose performance you are assessing, or anyone
involved in your operational plan. This is especially significant when you find that you
are unintentionally being prejudiced against them. Avoid bias at all costs.
3.2.2 Reasons for Under-Performance

The Fair Work Ombudsman notes the following as the most common reasons employees
perform poorly:
 Lack of or unclear workplace policies, procedures, goals and standards
 Interpersonal differences
 Mismatch between employee’s capabilities and the job’s required skills
 Lack of feedback on employee’s performance
 Lack of personal motivation, low morale in the workplace and/or poor work
environment
 Personal issues such as family stress, physical and/or mental health problems
or problems with drugs or alcohol
 Cultural misunderstandings
 Workplace bullying.
More often than not, employees may be unaware of their own poor performance. It is,
therefore, your job to promptly and appropriately deal with cases of under-performance upon
recognising such. Failure to do so may have grave consequences in the future, negatively
affecting both your employee and your business as a whole.
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3.2.3 Managing Under-Performance
Although dealing with under-performance can be challenging for both employees and
employers, it is crucial to address the issue properly. Organisations must provide managers with
sufficient support and resources that would empower the proper management of under-
performance. For instance, training such as role-play workshops can be put in place.
Operational Plan Management

Once you have evaluated the progress of the operational plan, you should identify any areas
where improvements could be made. These improvements should be in the form of a series of
recommendations. These should be the course of action that you believe is most appropriate
for your organisation to make to improve the work plans. Whenever your system does not meet
the required standards or objectives (as set by the performance measures and criteria you
developed earlier), you should establish one or more recommendations to correct this problem.
These recommendations should be concrete and include a practical course of action that
management should consider using to address the given problem.
After you have drawn your conclusions from the given data, you will be left with a list of
conclusions that state whether or not your organisation’s system has met the required
standards. For each performance criteria that has not been met, you should begin an analysis
of why such was not met. In order to achieve this, you may need to seek input from internal
and external consultation.
Where you have such performance gaps, it’s important that you try to establish a cause. In
doing so, you may find that the cause is related to other parts of the organisation, rather than
merely being a fault with the system. It is crucial when looking at gaps in performance that you
establish cause and effect relationships. What this means is that you have found a performance
gap, and this is the effect of some cause. You need to be able to determine that cause and
demonstrate that the cause has a detrimental effect on the system as a whole. If you are unable
to establish this, your recommendations may be seen as a costly way of fixing a non-existent
problem.
The improvements you decide to make should be recommended based on the analysis of
several factors:
 Operational Implications
How will the proposed changes influence the organisation’s procedures and policies?
Will any additional training need to be provided? Think carefully about how the changes
you are recommending will affect other parts of the organisation, and how things are
done.
 Risk
Whenever changes are made, or a new system is introduced into an organisation, there
is always an element of risk. What is the risk that the recommendation will cause further
problems? Think through the risk and determine whether the reward (in terms of actual
improvements) outweighs the risk of its implementation within the existing system.

 Feasibility
How feasible are the improvements, given the budget and resources that you have
been allocated? Does your organisation have the expertise to implement the system
appropriately? Can the improvement actually be made to work given the current state
of the organisation?
If the recommendations that you make would require changes to the actual work plan itself, it
is vital to establish timelines for this to happen. It should be implemented in a timely fashion,
rather than allow current problems to exist in the system any longer than they have to. You
must also carefully document changes, ensuring that all staff are aware of them, and know
where they can find details of the changes if they require this information.
Employee Management
Under-performance issues come in different forms. As such, it is important to explore various
options for improving performance (e.g. use of continuous feedback). Generally speaking,
however, effective management of under-performance can be done with a clear system in
place. In this regard, the Fair Work Ombudsman site puts forth a five-step guide to dealing with
under-performance.
Steps in Managing Employee Under-Performance
Identify the problem
Monitor Assess and analyse

performance the problem
Meet with the

Jointly devise a
employee to discuss
solution
the problem
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1. Identify the Problem
You must understand the key drivers of both performance and under-performance
within your organisation. Likewise, ensure that you are able to determine the problem
at hand with both accuracy and specificity.
2. Assess and Analyse the Problem
You should make note of the following:
 The gravity of the problem
 The length of time the problem has existed
 The gap between what you have expected and what is being delivered.
Once this has been accomplished, set a meeting with your employee so you can discuss
the problem. Remember to properly inform them about the nature and details of the
meeting so they can prepare. Allow them to bring along a person for support if
necessary (i.e. a person of their choosing or a union member).
3. Meet with the Employee to Discuss the Problem
Ensure that the meeting is private and comfortable for you and the employee. Then,
begin the discussion by clarifying the problem. At this point, the employee should
clearly recognise the issue, why it is considered such, and how it affects the workplace.
You should then discuss the desired outcomes and proceed to openly talk about the
problem at hand. Listen to what your employee has to say and note the important
points they make.
It is important that you remember the following during this process:
 Focus on the issue and not the person
 Investigate the issue and try to determine why it exists
 Clarify details as necessary
 Remain calm and encouraging towards your employee
 Make a summary to ensure that you understand each other properly.
4. Jointly Devise a Solution
Should it be feasible to do so, devise a solution with your employee. This is beneficial
since doing so would involve them and give them a stake in the solution, making them
more likely to follow it. In doing this, you must remember to:
 Ask questions and encourage the exploration of their ideas
 Emphasise your common ground
 Focus on the positive possibilities
 Stay on track
 Offer your employee assistance as necessary.

With the help of your employee, come up with a performance agreement or action plan
that would:
 Reflect a shared understanding of expectations
 Clarify the employee’s responsibilities
 Include strategies for their career development and training
 Include timeframes
 Reinforce the value of the employee’s role.
After this, set a date for a follow-up meeting to review the employee’s progress and
performance.
Remember to keep a record of all the discussions and agreements you make. This would
help you keep track of their performance and may also be used as evidence should you
need to take legal action on the matter.
Helpful hint
In writing your solution, use simple language that both you and the employee can
understand. For example, if ‘KPI’ isn’t part of everyday language, avoid using it.
5. Monitor Performance
Continue to monitor your employee’s performance. Even if their performance is no
longer an issue, you may find it useful to meet and discuss their progress. Provide
positive and negative feedback and continue to work with them to ensure that they
continue to maintain and improve their performance.
If their performance does not improve, it may be time to take more serious actions (i.e.
counselling, issuing formal warnings). If the issue cannot be resolved, they may
ultimately need to be terminated.
3.2.6 Termination of Employment

In the final step in managing under-performance, termination of employment is mentioned as
a last-ditch option you may use if an employee’s performance does not improve to an
acceptable standard. Once again, the Fair Work Ombudsman’s site discussion of this will be
helpful to note.
As the site suggests, you cannot dismiss your employees in circumstances that are ‘harsh, unjust
or unreasonable’. Remember to be fair to your employees, especially when you are about to
terminate their employment. In this case, you must provide clear reasons for their termination
and a chance for them to respond to these.
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Notably, businesses with fewer than 15 employees are covered by special dismissal
arrangements that vary from those that apply to larger organisations. As detailed by the Fair
Work Ombudsman’s site, the special arrangements that apply to employers with fewer than 15
employees are:
 Employees will need to have worked for the business for 12 months in order to be
eligible to make a claim for unfair dismissal, and
 If a small business employer adheres to the Small Business Fair Dismissal Code and
the dismissal of their employee is not harsh, unjust or unreasonable, then the
dismissal is considered fair.
You should also ensure that you provide the employee with their entitlements, such as their
notice of termination and any annual leave that they have accrued.
Further Reading
Managing under-performance is considered a best practice. To learn more about
best practices, you may read through the Fair Work Ombudsman’s guide linked
below.
Best Practice Guide: Managing underperformance
3.3 Plan and Implement Relevant Processes for Ongoing Monitoring and Confirm that
Support is Provided for Individuals and Teams
Up to this point, you have thoroughly examined the process of improving your plan. In the process of
doing so, you may find that your employees would need further support in order to improve their
performance. It is, therefore, important that you plan and implement processes to monitor and
support them. There are three strategies that you can use on an ongoing basis to help employees
perform satisfactorily.
3.3.1 Coaching
In the context of the workplace, coaching is about equipping employees with sufficient
knowledge, opportunities and tools necessary for them to develop and become effective. Many
experts in both business and the academe would agree that coaching is a critical leadership and
management competency, and it is invaluable to any organisation. Employees who undergo
coaching better grow and develop themselves, therefore ensuring the improvement of
employee performance.
Coaching takes place in a relatively short timeframe (usually 6 months to a year), and coaches
would have a specific goal for their coachees. However, the relationship may last longer at times
if their set goals would take longer to achieve.

Although it is neither therapy nor counselling, the process of coaching is integrative and draws
from some key concepts in both, as well as uses specific management skills and competencies.
Coaching is performance-driven, and it is a method that aims to help improve a coachee’s
performance.
A coach would have a specific area of expertise, and this is an area where the coachee would
need improvement. Coaches would then share their own skills and knowledge in order to help
employees improve themselves in the specific areas of concern.
A key factor in this process is feedback. Coaches provide feedback that is honest and specific,
intending to assist the employee in finding ways of improving their current levels of
performance.
3.3.2 Mentoring
Mentoring is a method that is used to help employees who show promise. However, that
promise is not backed up by performance. This often is due to personal problems as well as the
lack of confidence or motivation.
The mentor is an individual who is more experienced at the job and who can offer a place to
turn to for both guidance and assistance. The mentor is seen as a role model for the mentee,
who is a less-experienced employee that needs support. This support comes in the form of the
knowledge, skills, expertise and advice that the mentor imparts in the hopes of benefitting both
the mentee and the company in the long run.
Unlike coaching, mentoring is more long-term. Relationships between mentors and mentees
would often last at least a year or much longer. Through mentorship, employees are able to
develop skills that would enable them to improve their overall work performance. More than
this, however, the development-driven nature of mentorship provides mentees with an
opportunity for holistic growth that would benefit both the company and their professional
growth.
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3.3.3 Training
If a problem is related to lack of knowledge in a specific skill, training becomes an essential tool.
Unlike coaching and mentoring, this strategy is reliant on formal and technical knowledge that
can be taught to or learned by the employees in order to help them improve their work
performance.
Some of the most common and useful examples of training include:
 Formal Instruction
This type of training involves a lecture-style learning method. Trainees would be in a

classroom setting and would be taught by an expert regarding the concepts and
processes that they ought to learn. Given the set-up, trainees are more empowered to
ask their teachers questions and clarify points they don’t understand.
 On-the-job Training
This type of training involves an employee learning how to perform a task by actually
working on it. Trainees will be tasked to do set tasks while receiving help and guidance
from an expert. This form of training is deemed to be advantageous since it allows
trainees to learn from actual experience.
 Simulation
This type of training is quite similar to on the job training. However, instead of actually
asking employees to perform the set tasks, they will be asked to work on tasks similar
to that which they would encounter in the workplace. This form of training may be
especially helpful for those in sales.
 Self-directed Learning
This fourth type of training relies on the trainee to learn about the necessary skills and
tasks by themselves. Companies would simply provide the necessary materials (i.e.
manuals, supplementary videos, training courses). This main advantage of this method
is that it empowers the employee to teach themselves and learn at their own pace.

3.4 Negotiate Recommendations for Variations to Operational Plans and Gain Approval
from Designated Persons
Few projects run exactly according to plan. As such, it is vital to be open to variations to your
operational plans. Procedures and strategies should be established for managing changes to the
original project plan.
These changes may arise from:
 Variations to or refinement of stakeholder or organisational requirements
 The eventuation of risks identified in the project brief
 Project targets being exceeded
 Unforeseen difficulties
Regardless of the reasons for these changes, what is important is that your stakeholders are involved
in the process of managing and dealing with all possible changes to the operational plan. Just as you
have kept your stakeholders engaged from the very beginning, you must continue to ensure that they
are part of any processes that you would encounter during the implementation of your operational
plan.
It is vital that in your process of addressing the changes that arise, your stakeholders play an active
role in making the necessary decisions. Inform them of the need to make adjustments and encourage
them to stay involved in the process of dealing with these.
Making Recommendations
The improvements you decide to make should be recommended based on several reasons. When
negotiating with stakeholders, you should, therefore, keep in mind the following:
 Operational Implications
 Risk
 Feasibility
Gaining Approval
To gain approval from the relevant persons for the recommendations you make, you must simply
recall the process of consultation outlined in section 1.2. In this section, it was discussed that
consultation with relevant stakeholders is something that must be done before, during, and after your
operational plan is made and is put in place.
Given the fact that any recommendations to the OP would be made after it has been put in place, you
must just continue to communicate and consult with the necessary stakeholders, so they are made
aware of the progress, effectivity, and success of your plan. Likewise, should there be a need to make
adjustments, you must clearly explain why the need for such has arisen so that they may understand
and approve the changes you want to implement.
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Activity 3
Jon’s wages are tied to his productivity. His base wage is $10 an hour. This week he worked 42
hours, and his performance was found to be 105% of the expected performance for a week. What
should his pay be?
Do you think this form of incentive would improve performance in your workplace?

Notes
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• Develop, monitor and review both performance systems and processes to assess
your progress in achieving profit and productivity plans and targets.
• Analyse and interpret budgets and financial information to monitor and review
profit and productivity performance.
• Identify areas of under-performance and take prompt and sufficient action to
rectify the situation.
• Plan and implement systems to ensure that employees are supported and taught
to use organisational resources effectively, economically and safely.
• Develop and implement the necessary systems to ensure that procedures and
records associated with documenting performance are managed in accordance
with organisational requirements.

Productivity = Amount of resources used / Quantity produced
Productivity can be used to measure performance in a range of areas.
Productivity measures are not perfect, but they help you gain awareness
on productivity trends and how to go about these.
Productivity within your organisation is dependent on both the

machinery that you utilise and upon the staff within that organisation.
Worker pay = Number of hours worked * Actual hourly pay
The trouble with measuring productivity through only output direct

labour hours is that the productivity of one factor can be increased by
simply replacing it with another factor.
There is no need to change anything about your operational plans at any

point in time.
The methods used to gather information should be aimed directly at

obtaining the type of information required to determine whether your
objectives are being met.
Work measurement involves using various techniques to obtain direct

measurement of the work.
85
Summary
“The world rewards

those who take
responsibility for
their own success.”
Curt Gerrish
This unit of competency has been about how to make and manage an operational plan – ensuring that
it reaches all goals and objectives that you have set. Being able to do so successfully is crucial to your
success as a manager. To assess your competency in executing this task, you must see to it that you
have been able to:
 Develop a plan that lists all resources required, and provides all necessary information for
implementing the plan
 Identify key performance indicators that will allow you to monitor the process and ensure it
is working effectively
 Hire all the staff required to undertake your plan
 Acquire all physical resources that are needed for the plan to be implemented
 Monitor your processes to ensure they are meeting requirements
 Make any adjustments to your plan to keep its performance high.
Managing an operational is an on-going process of improvement. The better your plan is formulated,
the more effective it will be. As a result of this, the rest of the process will be easier to implement.

References
These are some references that we feel may be of assistance to you in completing the Assessment for
this unit of competency:
• 7 human resource best practices | A mini-guide to HRM. (2019, March 13). Digital HR Tech
Blog. https://www.digitalhrtech.com/human-resource-best-practices/
• A guide to escalation in project management. (2018, October 16). Project-Management.Com.
https://project-management.com/a-guide-to-escalation-in-project-management/
• Adams, D. (n.d.). Recruitment, selection & induction policies. Smallbusiness.Chron.Com.
Retrieved April 29, 2020, from https://smallbusiness.chron.com/recruitment-selection-
induction-policies-18493.html
• Alternatives to setting SMART goals. (2019, January 8). Project Manager Success.
https://projectmanagersuccess.com/career/smart-goals-alternatives/
• Australian employment conditions. (2019). Austrade.Gov.Au; Australian Trade and Investment
Commission. https://www.austrade.gov.au/International/Invest/Guide-to-
investing/Running-a-business/Employing-people-in-Australia/Australian-employment-
conditions
• Australian intellectual property laws. (2019). Austrade.Gov.Au; Australian Trade and

Investment Commission. https://www.austrade.gov.au/International/Invest/Guide-to-
investing/Running-a-business/Understanding-Australian-business-regulation/Australian-
Intellectual-Property-laws
• Cavinato, J. L., & Kauffman, R. G. (2000). The purchasing handbook : a guide for the purchasing
and supply professional. Mcgraw-Hill.
87
• Certo, S. C. (1997). Supervision : quality, diversity, and technology. Irwin.
• Cohen, G. (2016, September 7). 13 key steps to communicating your strategic plan. AchieveIt.
https://www.achieveit.com/resources/blog/13-key-steps-communicating-strategic-plan
• Davis Fogg, C. (1999). Implementing your strategic plan: how to turn “intent” into effective
action for sustainable change. BookSurge Publishing.
• Emergency management: Prevention, preparedness, response & recovery. (2015). Resilient
Community Organisations. https://resilience.acoss.org.au/the-six-steps/leading-
resilience/emergency-management-prevention-preparedness-response-recovery
• Fair trading laws. (2018, August 24). Australian Government.
https://www.business.gov.au/products-and-services/fair-trading/fair-trading-laws
• Fisher, C. (n.d.). What is the difference between goals & targets in business? Small Business -
Chron.Com. Retrieved April 30, 2020, from https://smallbusiness.chron.com/difference-
between-goals-targets-business-62268.html
• Ghosh, P. (2019). Top 10 employee recruitment strategies for 2019 to hire the best talent. HR
Technologist. https://www.hrtechnologist.com/articles/recruitment-onboarding/top-
employee-recruitment-strategies/
• Hamel, G. (n.d.). Examples of training in the workplace. Small Business - Chron.Com. Retrieved
May 1, 2020, from https://smallbusiness.chron.com/examples-training-workplace-
37697.html
• Harrin, E. (2017, June 26). 5 scenarios where you should escalate an issue - PMO perspectives
blog. Strategy Execution. https://www.strategyex.co.uk/blog/pmoperspectives/5-scenarios-
where-you-should-escalate-an-issue/
• How to document employee performance. (2009, May 18). Business Management Daily.
https://www.businessmanagementdaily.com/4936/how-to-document-employee-
performance/
• How to set the right targets for KPIs – Top target-setting tips for successful metrics. (n.d.).
Bernard Marr & Co. Retrieved April 30, 2020, from
https://www.bernardmarr.com/default.asp?contentID=1334
• Hughes, K. (2019, April). How to make a contingency plan. ProjectManager.Com.
https://www.projectmanager.com/blog/contingency-plan
• Intellectual property rights and responsibilities. (n.d.). Etienne Lawyers. Retrieved April 30,
2020, from https://etiennelawyers.com/intellectual-property/
• Isaac, L. (2019). Managing operations: What is consultation? Leoisaac.Com.
http://www.leoisaac.com/operations/top050.htm

• King, S. (n.d.). Profit & Loss by Budget Performance Report: Why It’s Worth Your Time.
GrowthForce. Retrieved May 1, 2020, from https://www.growthforce.com/blog/profit-loss-
by-budget-performance-report-why-its-worth-your-time
• Managing underperformance. (2019). Fair Work Ombudsman.

https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/best-practice-
guides/managing-underperformance
• Mayhew, R. (2012). Functions & practices of human resource management. Small Business -
Chron.Com. https://smallbusiness.chron.com/functions-practices-human-resource-
management-59787.html
• Mentoring in the workplace. (2016, May 3). Leadership Management Australia.
https://leadershipmanagement.com.au/mentoring-in-the-workplace/
• Monitoring recordkeeping performance. (2019, February 14). New South Wales State Archives
and Records.
https://www.records.nsw.gov.au/recordkeeping/advice/monitoring/recordkeeping-
performance
• Most commonly outsourced services. (2017, November 13). Outsourcing Insight.

https://www.outsourcinginsight.com/outsourced-services/
• Petryni, M. (2011). Difference between strategic & operational objectives. Small Business -
Chron.Com. https://smallbusiness.chron.com/difference-between-strategic-operational-
objectives-24572.html
• Procurement process flow | A guide to procurement in business. (2019, July 25). Codeless
Platforms. https://www.codelessplatforms.com/blog/procurement-process-flow/
• Program evaluation and review technique (PERT). (2018). Inc.Com.

https://www.inc.com/encyclopedia/program-evaluation-and-review-technique-pert.html
• Robson, L. (2016, August 3). A creative approach to risk management: The Robson risk
management model. Special Events. https://www.specialevents.com/blog/creative-
approach-risk-management-robson-risk-management-model
• Types of patents. (2016, May 29). IP Australia.
https://www.ipaustralia.gov.au/patents/understanding-patents/types-patents
• Webster, A. (n.d.). What is a productivity plan? Small Business - Chron.Com. Retrieved April
30, 2020, from https://smallbusiness.chron.com/productivity-plan-19095.html
• What is a business contingency plan | A step-by-step guide. (2019, August 2). Creately Blog.
https://creately.com/blog/business/business-contingency-plan-templates/
• What is a profit and a loss budget? (n.d.). Examples. Retrieved May 1, 2020, from
https://www.examples.com/business/profit-and-loss-budget.html
89
• What is procurement vs. purchasing? (n.d.). Logistics Bureau. Retrieved April 30, 2020, from
https://www.logisticsbureau.com/what-is-procurement-v-purchasing/
• What is profit? (n.d.). My Accounting Course. Retrieved April 30, 2020, from
https://www.myaccountingcourse.com/accounting-dictionary/profit
• What is recruitment policy and procedure and its ambition | hrhelpboard. (2017).
HrHelpboard. https://www.hrhelpboard.com/hr-policies/recruitment-policy.htm
• What KPI will improve your profit? (n.d.). Pitcher Partners. Retrieved April 30, 2020, from
https://www.pitcher.com.au/news/what-kpi-will-improve-your-profit
• Why workplace coaching and why now? (2017). Integral Development.
https://www.integral.org.au/about/resources/why-workplace-coaching-and-why-now
• Zivkovic, M. (n.d.). 11 Recruitment Strategies to Attract Top Talent in 2020 - Toggl Blog.
Toggl.Com. Retrieved April 30, 2020, from https://toggl.com/blog/recruitment-strategies
• Zust, C. (2018). Know the difference between coaching and mentoring | the center for
corporate and professional development | kent state university. Kent State University.
https://www.kent.edu/yourtrainingpartner/know-difference-between-coaching-and-
mentoring

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2 Learner Resource Produced 28 August 2020

Date Summary of modifications Version

Version 1 final produced following assessment

ABOUT THIS UNIT OF COMPETENCY ............................................................................ 8

CHAPTER 1: ESTABLISH OPERATIONAL PLAN................................................................. 9

Key Points: Chapter 1 .......................................................................................................... 38

CHAPTER 2: MANAGE RESOURCE ACQUISITION .......................................................... 40

Key Points: Chapter 2 .......................................................................................................... 61

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Key Points: Chapter 3 .......................................................................................................... 84

Delivery and Assessment of Qualifications

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Australian Core Skills Framework (ACSF)

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1.1.1 Business Planning

When How much

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1.1.2 Operational Plan Models and Methods

1.1.3 Resource Requirements

Rent; rates; service costs (heating, lighting, cleaning, security)

Costs of purchase, hire or lease; insurance, running costs (service,

Costs of purchase, hire or lease; insurance, road tax; running

Costs of purchase, cost of storage (any special requirements for

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1.1.4 Other Considerations in Creating an Operational Plan

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1.2.1 Drafting the Operational Plan

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Parts of an Operational Plan

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1.2.2 Recruitment and Induction Strategies

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1.2.4 Determining Your Relevant Stakeholders

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1.2.5 Determining Communication Channels

1.2.6 Escalation Points

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1.2.7 Presenting Your Plan