Change and Continuity in European Airlines - Case Study Example

 Change and Continuity in European Airlines The purpose of this essay is to critically demonstrate the eleven functions of the Human Resource Management as used in the British Airways. The eleven functions, namely the HR planning, Job Analysis, Job design, Recruitment, Selection and Induction, Performance Appraisal, Training and Development, Motivation, Career Planning and Development, Payment and Development, Payment and Reward and Employee Welfare, constitutes the Human Resource Management Program of the BA and this is what is shown in the paper. Discussing each of the functions in detail, the paper concentrates on the strengths and weaknesses of each of the policies. Also, the paper makes some recommendations as to what steps should the BA be taking such that the Human Resource Management Program of the Airways is as strong as possible. Introduction The British Airways was founded in 1924 and at that time was called the Imperial Airways. (British Airways) It operated under the name of the Imperial Airways until 1935 after which several small companies merged with it to form the BA Limited. The 1930s was the time for the shift from the market economic system to the command economic system. This economic shift had an impact on the BA too as it was nationalized in 1939, according to BA (1938), to become the British Overseas Airways Corporation (BOAC). It remained the same till 1972 when the BOAC and the British European Airways (BEA) combined together to unite under the BA as Gaskell (1999) relates. According to Corke (1986), the slogan of the BA is to be the ‘The World’s Favourite airline’ and it has done a lot to meet the slogan it initially set. The BA operates in around 94 countries and has around 49,957 employees worldwide. It provides services that include Passenger Air, Cargo Air and Corporate Travel Services. Morrell (2007) states that in the year 2006, the BA held assets that were around $21.43 billion. Also, the BA ranks to be the 587th in the global list of companies according to the Forbes magazine, and number 442 in the Fortune 500 companies. Since the BA has to keep up with the standards that are accepted globally in terms of reliability, comfort for the customers, and more importantly to achieve the goal for which it was basically created that is to be the World’s Favourite Airline, it has to concentrate on the importance of its work culture. A work culture accounts for around eighty percent of the performance management in an organisation. Therefore in order to achieve its respective goals, the BA has stressed the importance of the human resource management. Of course, there have been certain strengths and weaknesses of the policies that have been adopted by the airline. However, overall the attitude of BA towards the HRM has been a positive one. The recent problems that the airline face do depict another story. The paper now concentrates on the eleven different functions of the HRM as taken by the BA and discusses the strengths and weaknesses of each respectively. 1) HR Planning According to Grugulis and Wilkinson (2001), the HR planning has been the most important for the BA. This is because the planning or the management is equivalent to the task of establishing control over the meaning of the work rather than its execution of ‘converting’ workers to the corporate ‘faith’ The HR planning policy of the BA has been a significant one. In the 1970s and the 1980s, according to Ayling and Wash (2009), the BA was performing disastrously. It comprised of an old fleet that was responsible for its uncomfortable journeys and was also famous for its unpunctuality as Gurulis and Wilkinson (2001) relate. Warhurst (1995) argues that the productivity of the BA was fairly low than most of its competitors. Beset by industrial crises, the organization was also reporting financial losses that accumulated to around £140 million in the year 1981. Blyton and Turnbull (1998) also state that the staff discomfort and the customer dissatisfaction was something very common. However in the year 1996 everything changed. The HR planners of the BA recognized the fact that without the satisfaction and comfort of the workers, the quality of the services that were to be provided could not be improved. It is for this reason that it took initiatives that encouraged the remodelling of the staff attitudes and the focus on the customer care. A lot of emphasis was put in the planning of certain programs like the Putting People First, the Managing People First, and the Leadership 2000. It was made sure that in the planning process, due importance would be given to the customers, the staff and the mangers alike. Despite the extensive HR planning of the Airways there were many limitations in the policy. The first one was that it lacked structure. It is true that there was an emphasis on the human resource management and a lot of money and time was spent on the HR planning. However, the Airways did so by cutting the salaries of some of its staff members. As a consequence, the staff members in working for the BA decreased in 1983 from 1981 by around forty percent. Further, the most important thing to consider for the HR planning was to carry out the process of developing a new culture that was relevant to the 1980s and 1990s. In this goal the HR planners were successful to some extent. However, the problem was that most of this was considered redundant. According to Anthony (1994), competitive success was not very well recognized at that time where the markets were still dominated by the negotiation skills of the Airlines. As a consequence, the HR planning objectives that were aimed at the competitive success failed. Another reason according to Colling (1995) is the fact that the BA was the only dominant airline in Britain and faced little competition on certain routes. Therefore the emphasis on the planning for competitive success was actually very premature. The rest of the flaws of the HR planning would be discussed in much detail in the respective under the headings of each of the following functions. Recently the weakness of the HR planning of the BA was fairly evident because around 12000 protested against the organization. According to Rothwell and Konnidar (2010) the lack of planning of the process enraged the employees further. The consequence was that the talks failed completely. The HR planning sector here should have first considered the effects on people before taking an action. Also, they should have formulated the plan in such a manner that they should have convinced the people rather than forcing them. 2) Job Analysis According to Barsoux and Manzoni (1997), the BA has also focused on the area of job analysis so as to improve performance. In the past, attempts have been made to identify the key requirements and the objectives of each job, be it a manager’s one or a staff attendant’s one. As will be discussed much later under the heading of motivation, the defining of clear objectives for the staff, especially the subordinate is one aspect that has been quite well established. H owever, there is a lot that has to be done by the BA. So far there has been no formalized program according to which the Airways operate for the process of the Job Analysis. The defining of clearer jobs is one aspect that BA actually needs to focus on. This can be done by holding special sessions where the subordinates and the managers can sit together and discuss what should be done to achieve a particular common goal. 3) Job Design Job Design is recognized by the BA as something that actually affects the motivational levels of the employees as Fineman (2000) relates. Despite the realization of this fact, there has been little in the companies past that could add to the function of Job design. There have been certain attempts that have motivated the staff and the employees in general to work according to a set job design in order to achieve certain objectives. However, it has not been much. The Airways needs to take particular action regarding the ways that can be used to attain objectives. Holding personalized meetings with the employees can ensure that the voice of every one is heard and the job design is not something that has to be imposed. 4) Recruitment, Selection and Induction The recruitment selection and induction process of the Airways has been carried out in such a manner, according to Dalton (1996), that there has been a lot of stress on the need for neutrality in the process. In the past the process had often been biased. However, presently it claims to be much unbiased. A reason for this may be the fact that the militaristic atmosphere of the organization has been developed into the one where every one is held responsible and accountable. The ‘Passenger Group Coordinator’ program for instance ensured that the people were hired only on the basis of their personal qualities as Pfeffer (1998) relates. There have been, however, instances where the ‘neutrality’ of the BA was compromised. A recent example is that of the strike that is prevalent. According to the employees the recruitment and selection policy is not fair where those that are related to the officials are preferred. The BA really does need to be fair. This can be done by discussing the promotion or the selection of individuals clearly. 5) Performance Appraisal The main objective of the BA is to create an incentive for the staff and the managers to work hard and this is done by the granting of performance appraisals. In the past the Airways introduced certain programs like the Awards for Excellence and Employee Brainwaves in order to praise publicly the ones who were working hard for the achievement of goals. Apart from this, however, nothing much was and has been done. The BA needs to hold awards like the ‘Best Staff’ or the ‘Best Manager’ for every department such that no particular person feels left out and a certain department acts as a family closely knit together. 6) Training and Development The training and development program of the BA has also been very important and extensive. The ‘Putting People First’ program that was launched in 1983 by the BA CEO Colin Marshall was a huge success. The program was originally intended for the staff that had to have direct contact with the customers. However it became so popular that it was attended by all the 40000 employers that were present at that time that is in the year 1986. The aim of the training program was to discourage the militaristic and deterministic culture that had always dominated the airways before. This was done so that the staff members could operate more productively. The staff members were trained to be uniform and were put into cross cultural groups. This was done so that the behaviours of the staff members could be modified. The people who attended the training program, which was free of cost, were taught how they could increase their productive potential by coping with stress. According to Young (1989), they were taught what they could actually ‘get out of their lives.’ Certain badges were used that stated ‘we are putting people first’ so that the main message of the training program could be reiterated. The CEO was very active in the program as he participated in the question and answer sessions with the staff members. This was done so that the staff members felt engaged in the process according to Georgiades and Macdonnell (1998). The CEO shared in the training program his own experiences and in 1983, he also helped serve breakfast to the customers according to Höpfl (1993). This was done so that the attitudes of the staff members could be developed in a manner that was consistent with the HR policy of the BA. Apart from the PPF, there was another program that was launched too. It was called the Managing People First. This was launched so as to train the managers on the same lines as the staff. The purpose of this action was to make the mangers realize that they like the staff members were people who needed attention. This program was also a source of motivation for the managers. A lot of other programs were also introduced in order to train the people so that they could look into their lives and realize what they actually wanted. The training and development programs of the BA have been very popular. However there have been a lot of flaws too. The first and the foremost as was discussed earlier was the absence of structure in the training and development programs. Also, Willmott (1993) argues that the change of the culture of the BA has been both manipulative and totalitarian. The BA needs to concentrate on benefiting of the individuals in real terms rather than just changing the attitudes of the staff. The programs should not be a ‘show’ of how much the organization cares for the individuals rather it should have genuine motives behind every training and development program. 7) Motivation According to Georgiades and Macdonnell (1998), the policy of the BA regarding the motivation of the staff members has been four-fold. The first has been the focus on clarity and helpfulness. Under this policy, the objectives that are to be fulfilled by the subordinates are clearly defined. This is done so that the subordinates are not very confused about what they have to do and are actually motivated to work once they know what they have been assigned. The giving of clear cut decisions and the providing of help, care and trust to the subordinates once they are facing a difficult time. The second in the menu of practices has been the promoting of achievement which is basically done by the discussing of personal views about different topics. The third was the emphasis on the team work. A lot of importance was given to the process of influencing each other through personal experiences and thereby developing a certain bond that unified the employees. The fourth aspect of the policy of motivation was the stress on the care and stress for the employees. The above mentioned policy has been different because it does not require the company to pay rewards to the employees. Rather, the focus is on the development of human emotions that result in motivation. It should however be mentioned here that the staff was usually manipulated as Ogbonna (1993) states through the policy of motivation. Often there were groups that were formed among the staff with the senior staff members being left out. The isolated members had little to be motivated about and so generally there was a lack of team work. Further the policy, once again, lacked structure as it was not properly defined. The BA should adopt a certain framework that should ensure that the above mentioned policies are duly followed rather than just stressed. It should have a board that should carry out surveys constantly to deduce the motivational levels of the people. This is a lengthy process but it would help the employers get an idea of the motivation. If this step had been taken, the recent crisis would not have resulted. 8) Career Planning and Development The Career planning plans of the BA also seems to have not been fully defined. The Airways does recognize the fact that career planning is important so that the staff members are satisfied with their respective jobs and the future of the jobs as Schnider and Bowen (1995) relate. However, less money has been spent on the hiring of proper career counsellors. The BA needs to invest in the hiring of career counsellors so that the workers are sure about what they are doing with their future. 9) Payment and Development It is true that the Airways have also spent a lot on the development of programs so as to improve the quality of its services. According to Colling (1995), the BA has invested in control system, terminal facilities and aircraft. Computer reservations have also been introduced so that the customers are more comfortable and use the Airlines with a lot of ease. Through the computer reservations, the customers did not have to wait in queues in order to get tickets. The payment that has been done with respect to the development of the infrastructure has led to the Airways being more popular in the eyes of the customer. However, what is a matter of concern is the fact that the payment is done through the cutting costs by cutting jobs. According to Siek (2010) around 70 million Euros were actually cut by firing people. This should not be done. 10) Payment and Reward In order to motivate the staff and the employees in general the BA has also help the payment and reward important. Apart from performance appraisals, the managers have also been rewarded almost an extra 20 % of their salaries. Some have also been paid a 50: 50 on the completion of projects. However, the giving of payment rewards has been limited and usually constricted to managers. 11) Employee Welfare As mentioned above, the BA has tried to improve the welfare of its employees be it financially or psychologically. Programs like the PFF have been designed to improve the welfare by helping with the coping of stress etc. Also, the increases of the pensions and financial rewards are something that has been very noticeable. Despite this, there is a lot that needs to be done in order to deal with the problem of the isolation and the job security of the employees. It should be made sure that none of the employees is fired before being warned as was done on in the 1980s and has been done recently. Conclusion To conclude, the BA is a perfect example of an organization that has concentrated on the need for the eleven functions of the HRM. Despite its efforts however there are some areas that do require a lot of focus on the part of the authorities. The recent strike has been an example of the inefficiency of the Human Resource Management on the part of the BA. The firing of people to cover up for the competition, the increasing fair costs, and the increasing passenger number is not a very profound argument. The performance lately has been very disappointing. The BA needs to learn from its past and need s to focus a lot on the human resource management. References Anthony, P. (1994). Managing Culture Buckingham. Open University Press. Ayling, R. and Wash, W. (2009). 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