$BHP Group Ltd (BHP.US)$/$BHP Group Ltd (BHP.AU)$announced a 20% reduction in employee incentives after failing to meet its performance goals for the fiscal year.

What Happened:  The world's largest miner was hit with a $2.5 billion impairment charge on its nickel business in Western Australia and additional costs related to the Samarco dam disaster in Brazil.

The docking of incentives upset some BHP employees, who contacted the Australian Financial Review.

This is not the first time BHP has reduced employee incentives. In 2019, the company cut incentives by 20% following a train derailment in Western Australia and a fatality at the Saraji coal mine in Queensland.

These incidents and equipment failures at other sites significantly reduced then-CEO Andrew Mackenzie's annual pay. Last year, CEO Mike Henry pledged to prioritize safety measures after yet more worker deaths.

Why It Matters: The company reported a significant first-half profit hit. To cut costs, the company disbanded certain global corporate teams and froze hiring across various divisions, further exacerbating internal challenges.

BHP also fell short of its goal for year-on-year growth in female employees, hindering its progress towards achieving gender balance by 2025.

Australian labor policies such as the "same job, same pay" mandate add another layer of complexity to BHP's situation. With 32,350 of its 49,000 global employees based in Australia, these policies significantly influence the company's labor costs and operational flexibility. The requirement to pay labor-hire workers the same as permanent employees could further strain BHP's financials.

Adding to the company's challenges, the Western Mine Workers Alliance (WMWA) is pressuring BHP to offer more flexible working arrangements to over 1,100 workers. The WMWA, a coalition of the Mining and Energy Union and the Australian Workers Union, has advocated for more balanced rosters at BHP's operations in Western Australia.

"Rosters have been an issue for many members at Area C for some time, and WMWA welcomes BHP's decision to try and address one of our members' bargaining claims before formal negotiations even start," the WMWA stated, per The Nightly's report.