Name: Gavan Sharples

VCE Business Management

Unit 3 AOS 2
School Assessed Coursework

Reading time: 10 minutes

Writing time: 75 minutes

Structure of SAC

Number of questions Number of questions to be answered Total marks

4 4 40

 Students are to write in blue or black pen

 Students are permitted to bring into the room: pens, pencils, highlighters, erasers, sharpeners and rulers.
 No calculator is allowed in this SAC.

Materials supplied
 Question and answer book
 Business Management task words
 Additional space is available at the end of the book if you need extra paper to complete an answer

Instructions
 Write your name in the space provided at the top of this page.
 All written responses must be in English.

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 Instructions

Answer all questions in the spaces provided. Extra space is located at the back of the booklet if required.

Question 1 (11 marks)

Extra Fizz is a manufacturer of soft drinks which are distributed throughout Australia. The business has always had
only a small percentage of market share in a market that is dominated by two large companies. In an attempt to
increase market share at the start of 2018, the CEO invested more money into sales and marketing. However,
despite attractive remuneration packages and high commissions, low motivation and high levels of staff turnover in
the sales and marketing department has made it difficult for the business to achieve any progress towards its
ambition, with market share remaining stagnant at 5% since the start of 2018. Furthermore, employees had
received few training opportunities.
a. Explain one form of training management at Extra Fizz could implement to improve the performance of sales
and marketing employees. 3 marks

In order to improve the performance of employees, Extra Fizz could incorporate off-the-job training into
employees’ work. Off-the-job training methods such as workshops, lectures and conferences can provide
employees with the chance to learn and implement new knowledge and skills in the workplace.
Opportunities such as these will increase employee motivation, as they fulfil the employee’s drive to
learn. Equipping employees with the tools to better complete their job will also increase their efficiency
and performance.
Attending off-the-job training will also allow employees to gain expertise that is sourced externally to the
business. Implementing and considering new information sourced externally from the business is valuable
in the decision-making process in a business, as it allows businesses to make more informed decisions.

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b. Locke and Latham’s goal setting theory has been recommended to motivate employees at Extra Fizz. Describe
this theory and explain how management at Extra Fizz could use it to improve employee motivation and reduce
staff turnover in the sales and marketing department. 5 marks

Locke and Latham’s goal setting theory is a theory that suggests that goals that are relevant to
employees have the ability to motivate employees. The principals of the theory include setting goals
that are challenging, clear and consider task complexity. The theory additionally states that employees
should be committed to the goal, which can be achieved by having some input into the decision
making. Providing feedback to employee’s as they are completing this goal, as well as after they have
achieved the goal is also a key part of motivating employees and keeping them on the right track.

A way in which management at Extra Fizz could implement this theory into the workplace could
involve asking employees for input into goals, to ensure their commitment to the goals. When an
employee’s input is used when making business decisions, they are more likely to feel valued and
have a better sense of belonging within the business, which would both increase motivation levels,
and decrease staff turnover.

Another way in which management at Extra Fizz could implement this theory into the workplace
could be setting goals that are clearer. It does not seem as if management has communicated to the
employee’s what the specific goals are. If employees had a clear outline of a common goal to work
towards, they would likely be able to work both more efficiently and be more motivated towards
accomplishing a common goal with their peers.

c. Apart from investment in training, justify one motivation strategy which could result in improved performance
of sales and marketing staff. 3 marks
Support is the most relevant motivation strategy to use in this case study. Support is the individual assistance and
services that are aimed at helping employees cope with problems that are negatively affecting their work
performance and personal life. Support systems include Employee Assistance Programs (private counselling) and
mentoring.

Support is the most relevant motivation strategy because of the high levels of staff turn-over and low levels of
employee motivation at the business. Performance-related pay is irrelevant at the business, as large remuneration
packages are already implemented. Due to the high levels of staff turn-over at Extra Fizz, it is clear that employees
do not feel valued at the business, and or, they are having struggles at the business. Implementing a support
program at the business such as an EAP could help to resolve struggles employees may have with business.
Creating a program like this would also likely let employees know that the business does care about their mental
wellbeing. When employees feel valued, their motivation is likely to increase. This motivation increase will likely
have a positive impact on employee performance.

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Question 2 (15 marks)
Gordon Track is the manager of Toot Toot, a manufacturer of train sets for kids in Australia which was established
in 2002. Whilst the business was a leader in the market up until 2016, sales and profit figures have declined in
recent years as increased competition from global competitors has made market conditions difficult. Furthermore,
Gordon is concerned that the business’ employees are not working to their full potential, with Toot Toot’s
reputation for quality and employee productivity both decreasing. Gordon has made it a priority to improve
employee performance. In addition, he has set the following objectives for Toot Toot:
 To increase profit by 10% in the next two years
 To enhance their level of environmental sustainability
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 To improve customer satisfaction ratings in relation to product quality

a. Explain how the effective management of employees could help Toot Toot to improve their level of
environmental sustainability.
Effective management of employees increases employee productivity and decreases any unnecessary waste that the
business may be creating, which would lead to an improvement on the business’s level of sustainability
b. Describe one performance management strategy. Explain how this strategy can help the employees at Toot
Toot in reaching their full potential.
4 marks

Employee Observation is a performance management strategy that involves a manager observing an

employee or group of employees while performing their jobs. This performance management strategy
is helpful when trying to assess an employee’s actual performance and behaviour in the workplace in
real time, rather than relying on performance reports.

Observing the behaviour and work of employees will allow the managers at Toot Toot to better
understand their workers strengths and weaknesses. This will allow the managers to make necessary
adjustments to the workplace and the business’s employees in order to maximise the efficiency of the
business. For example, by observing the quality of the output of specific employees, managers can
identify the employees that might need more training. This will allow the business to help it’s
employee’s to reach their full potential.

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c. Whilst Toot Toot’s employees are currently on the industry award, Gordon is considering moving the business’
employees to an enterprise agreement.

Distinguish between an award and an enterprise agreement. Justify which option would be most appropriate in
helping the business to achieve its profit goal in the next two years. 5 marks

An industry award is the minimum payment and conditions for a particular industry set by the Fair Work
Commission of Australia, whereas enterprise agreements are the pay and conditions established by a business, and
only apply to the employees of that business. An enterprise agreement needs to either meet or exceed the pay and
conditions of an industry award.
An industry award cannot be changed by any other body than the Fair Work Commission, whereas any business
can change their own enterprise agreement, on the grounds that they meet or exceed the industry awards.
In order to achieve Toot Toot’s goal of profit, the most appropriate action to take is to leave workers on the industry
award. Having an enterprise agreement can increase the expenses of a business due to increase wages and more
employee benefits such as longer paid leave. If the business wants to increase its profit by 10% in two years, not
having these extra expenses will make this goal much more achievable for the business.
d. Explain the role of each of the following workplace relations participants if the business moves from an award
to an enterprise agreement: 4 marks
 Union
 Fair Work Commission
When discussing a new enterprise agreement, Unions play a key role representing the workers point of view. With
the significant power that Union’s hold, due to both funding and size, they are the main power within industries that
negotiate to create better working conditions and pay for employees. In relation to a business switching from an
award to an enterprise agreement, Unions will try to get the best possible pay and conditions for the workers in the
new enterprise agreement. It is likely that a business will not be prepared to facilitate these conditions, and so,
managers and members of the Union will have to either negotiate a fair medium, or instead move towards other
means of dispute resolution such as mediation and or arbitration.
The Fair work commission has the responsibility to set
Question 3 (10 marks)
Giuseppe’s Pizza and Pasta is a popular Italian restaurant located in Carlton. Situated in Lygon Street, it is known
as one of the busiest restaurants in Melbourne and employs 8 chefs and over 100 employees. Whilst the business
has high rent costs, the prime location and popularity of the business has always resulted in high profit figures.
Since early 2020; however, the business has been severely impacted by COVID-19. Whilst Giuseppe’s Pizza
remained open for take away, this was only a minor source of revenue for the business and the high cost of rent
meant Giuseppe had no choice but to make more than half of the business’ employees redundant.

a. Define redundancy. 2 marks

Redundancy is a form of termination in which a person’s job or position within a business seizes to exists and
the person is no longer need. Redundancy generally happens when a business goes through a major
restructuring and or when the business itself shuts down. A business is obligated to give its employees notice
that they are being made redundant, pay them for any paid leave they may have not taken, and set them up onto
a redundancy package.

b. Compare redundancy and dismissal. 2 marks

Redundancy is a form of termination in which a person’s job seizes to exist, whereas a dismissal is a form of
termination in which a person is selected to be terminated by management at the business. A key difference
between the two is that when a person is dismissed, the business has to hire another person to fill the position
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 of the employee that has been dismissed, whereas another person does not need to be hired when an employee
is made redundant.

c. Explain the employee entitlements of the redundant employees. 2 marks

Employees who are made redundant have certain entitlements that a business is obligated to award the
employees.
These include getting notice of their redundancy in advance from the business, being paid for any paid leave
that may not have been taken and receiving a redundancy package from the business.

d. Evaluate the appropriateness of Giuseppe’s Pizza and Pasta providing transition services for their redundant
employees in the current situation.
A consideration that Giuseppe’s Pizza will have to make when making its employees redundant is whether or not
they provide them with transition services. Transition services exist in order to help redundant employees move
forward in their career. For example, transition services such as outplacement can help employees to seek for new
jobs.
Transition services have many benefits for both the business and the employee. They allow employees to move
forward with their career into new areas, as well as meet new employers, discover new businesses and workplaces
that they could join. Having transition services will also benefit the business, as providing transition services could
be considered as a corporate social responsibility, which could improve the image and reputation of the business.
However, transition services are an extra expense that the business must take on and can subtract from the profit of
the business. The business is not legally obligated to provide these services either, so any expenses associated with
transition services are unnecessary.
Because a business is not legally obligated to provide redundant employees with transition services, and because
the COVID pandemic is likely to take a large hit on the business’s profits, not having to make any additional
expenses associated with transition services will allow the business to make marginally higher profit to allow them
to stay afloat during the pandemic. Therefore, it is most appropriate that Giuseppe’s Pizza does not provide
transition services to redundant employees.

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Question 4 (4 marks)
Sicher Airlines is a German airline that operates in the Australian domestic market. The airline has routes to all
capital cities in Australia. Currently, the Sicher Airlines baggage handlers are in negotiations for a new enterprise
agreement. However, with the current COVID-19 pandemic, Sicher Airlines is not prepared to meet the wage
increase demands of the baggage employees, and management have even expressed their desire to move to the
industry award. The negotiations have broken down and the employees are taking industrial action in the form of a
strike.
Discuss the possible effectiveness of arbitration as a method of dispute resolution given the current situation at
Sicher Airlines. 4 marks

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Extra space for responses

Clearly number all responses in this space

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