Changing the Way We Change Organizations - Assignment Example

Aviation HRM Task Explain the role and function of a Human Resources department utilising academic theory to illustrate your points. INCLUSION IN THE BUSINESS STRATEGY OF THE STRATEGY FOR THE MANAGEMENT OF HUMAN RESOURCES It is obvious that the management of human resources was created to serve certain purposes. In order this can be achieved, a specific strategy should be followed. What is this strategy There are three approaches on the issue: the contingency approach, the approach of the University of Harvard, the political approach and the process of change (The Warwick Business School Model-WBSM). The contingency approach This approach argues that people should be managed with less cost and be developed to the maximum extent so as to meet the objectives of the company. To achieve the above the policies chosen by each firm, in terms of selection, performance appraisal, rewards and development of manpower, play a key role. But this approach ignores other factors that influence the behaviour of workers such as design and organization of work and employee relations. The University of Harvard approach (the Harvard Model) The second approach attaches great importance to the factors, actions and decisions affecting the organization-employee relationship and tries to satisfy all the stakeholders (management, shareholders, society, etc.). To achieve this it is necessary to develop the following basic policies: human resource flow, reward systems that satisfy all employees, influence the employees to take responsibility and efficient working systems. The policy approach and the process of change (The Warwick Business School Model) In WBSM approach it is necessary to take into account both the increasing complexity of the environment and the need to define the role of the Human Resources department due to the fact that the line managers get involved in the actual actions of the HRM department. Ultimately, the new trend is to link the personnel policies with the political objectives of the company, and to deal with the impact of strategic decisions in the administration of human resources and not simply to deal with operational problems. At the same time, the executives motivate and encourage so as everybody will dedicate themselves to the company and its objectives. A feature of the new trend is also the shift of the negotiation of union workers from the national level at the enterprise level and indeed the trend is, each worker to be treated separately in terms of working conditions and not en masse, as was common until recently. THE IMPORTANCE OF HUMAN RESOURCES FUNCTION It was reported earlier that the environment in which businesses operate is highly competitive and a business in order to survive must respond to new data. (globalization, new technologies, continuous effort to innovate, the collapse of economic borders, etc.). For businesses today, human resources can play a key role and create a sustainable competitive advantage for the them, provided the new strategy of Human Resource Management is based on the flexibility of working conditions, namely: the ability of workers to take up and carry out a wide range of responsibilities (operational flexibility) the possibility of different contract types (numerical flexibility), flexibility in working hours, and remuneration based on individual performance and skills of each employee (flexible payment). Naturally, the Human Resources Management follows a specific strategy having certain goals. The primary goal is to improve productivity through the solution of personnel problems, cooperation with executives and participation of them. In parallel, an effort to improve the quality of the workplace takes place, HRM ensures the firm complies with all conditions of the requirements of the legislative framework, and special importance is given to the efficient use of employees in order to achieve sustainable competitive advantage. The aim therefore is to provide flexible personnel that can and will have opportunities to exploit innovative ideas. DUTIES OF THE HUMAN RESOURCES DEPARTMENT The human resources department in order to achieve the company objectives it should implement a series of actions, as follows: Human resources planning i.e. exploring the labour market, the needs of enterprise and staff mobility, recording the knowledge of personnel and knowledge of relevant legislation, Selecting and attracting capable and qualified staff, after having previously taken into consideration specific organizational factors, such as education of the participants in the process, Training and staff development, in other words, the diagnosis of training needs, selecting training methods, trainees and trainers, the coordination of this process and the determination of costs, Evaluating employees, whereas selection processes, assessors, procedures take place, Remuneration of personnel, using modern systems, based on previous assessments and on a market survey on the fees incurred by the Board, Protect workers health and safety, through information and training and through programs to improve the quality of life in the workplace, and finally Negotiation of working relations. The role, therefore, of the Human Resources department y is to link its operation with the business strategy, namely to involve personnel in the design of company policy. Simultaneously, it must provide effective procedures and solutions for all issues that managers and line workers face, to facilitate them, and it should not neglect to introduce innovative methods of utilizing human resources. ORGANIZATION OF HUMAN RESOURCES DEPARTMENT It is obvious that in order that the HRM department fulfils its role effectively, it must first be decided whether the policy for the development of human resources will be concentrated in top management or it will be decentralized at all management levels(this is defined as Location of decision making). On the other hand, it should be defined who is the manager responsible for human resources, since Human Resources Management concerns the personnel of an enterprise and at the same time the structure of the department should also be defined. The structure depends on the size of the company. In small companies (up to 100 people) there is usually one executive who is responsible for all procedures related to human resources, while in larger firms (more than 150 people) there is usually a Human Resources department, staffed with qualified people. In summary, the Organization of the Human Resources Department includes: The way for decision-making Determining Manager of Human Resources Department Defining the organizational structure of the Department The staffing of the Department Inclusion of HRM Department in the organizational chart and determining its relationship with the other department. Task 2 What do you understand by the term 'Motivation' as it relates to Human Resource Management You should give relevant examples from the aviation industry. Motivation is the internal drivers of human conduct that aim to fulfil human objectives and therefore satisfy human needs. Employees working depends on two factors: knowledge and skills and people's will to perform. It concerns "I can and I want". One of the basic roles of HRM and top executives is to make employees to want to perform. The need for motivating employees in order to be more efficient comes from the fact that in the existing model of culture (production and consumption), work is defined by others, it is often not interesting, and the value created by it, is entirely and directly obtained by employees. The first basic motivation technique is the connection of employee performance with relevant rewards (financial and nonfinancial). This connection employs the concept of recognizing and rewarding the employee for his/her results and his/her contribution to the objectives of the organization. A key dimension of the practice of linking performance with rewards is certainly the economic one. This is implemented in practice by linking the financial remuneration to the employee's performance. Another aspect, however, of the link between performance and reward is the recognition and reward that is done without financial instruments. A key element here is to recognize and reward the employee through the behaviour of his/her supervisor and the company itself. The praise and other symbolic acts are practices that enable the person to perform better and feel loyal or committed to the goals. Southwest Airlines will be taken as an example. Southwest Airlines is considered to be a high-morale company having a CEO that is thought to be one of the best leaders.The company has been ranked second in Fortune's 100 Best companies to work for. Southwest Airlines motivates and rewards its employees based on group efforts and results. This way, it does not promote individualistic values. Employees own 8% of the company which is a high motivation factor for improving business performance. Apart from profit sharing, the company offers competitive salaries and insurance benefits. The flexible-benefits program at Southwest is known as BenefitsPlus. It is a medical insurance plan that offers apart from typical medical care, dental and vision care, and a multi-faceted dependent-life insurance. Employees can match the offering benefits according to their personal needs. They get a monthly allowance in order to purchase it. If they want more then they have to pay it themselves. Southwest workforce is represented by eight unions. In addition, the company has created a newspaper called BenefitsPlus in order to communicate benefits to employees. This effort has been proved successful since 25% of the employees enrolled in the plan.(http://findarticles.com/p/articles/mi_m3495/is_n7_v37/ai_12787147/) The company offers various other perks such as free airfaire for employees and their families all over the world. Southwest Airlines abolished dress code and it has various programs on rewarding its employees for loyalty, performance, personal motivation and job satisfaction. As a result of the above, the company receives a minimum of 100,000 job applicants, and it has the lowest rates in employee leaving the company, absenteeism and tardiness. (http://www.vault.com/nr/newsmain.jspnr_page=3&ch_id=402&article_id=19258&cat_id=1123) Task 3 Using the case studies provided together with a variety of journals and texts from your own research complete the following tasks for ONE company listed below; - Virgin Atlantic - Southwest Airlines - BAA - Ryanair - El Al - Singapore Airlines - Lufthansa - Alitalia A) An assessment of the current business environment within the aviation industry (industry growth predictions, competitor activity, regions for expansion, costs, labour relations etc) Aviation industry is highly capital - intensive. The aviation industry, for the period 2004-2024, will grow at CAGR of 5.6%.The market share of mature markets (US, Europe) will go down from 61% in 2005 to 52% in 2025.India, Middle East and China are emerging markets although India and Middle East are regulated markets that hinder new foreign entrants. Niche aviation marketing is further developed in particular air taxis, boutique catering. US Aviation industry is getting better after the dip in 2000 but employee and fuel cost have put a pressure on profits. As a result, various companies have been restructured in order to minimize costs. United Airlines had negotiated with trade unions on wage cutting and Delta Airlines had restructured deals in order to avoid bankruptcy. The competition among large airlines and low-cost carriers has been increased. In addition, large airlines face labour costs. The high fuel prices in 2008 have squeezed the industry which in addition is characterized by overcapacity. US individual consumption expenditure for US airlines is expected to grow at a rate of 3% for the years 2008-2013. First Research Industry Growth Rating The First Research Industry Growth Rating depicts the expected aviation industry growth in comparison to other industries. "Demand: Large business travel segment Require effective marketing Risk: Slow economy cuts business travel " (http://www.hoovers.com/southwest-airlines/--ID__11377,FRIC__173--/free-co-competition.xhtml) The second mature market UK has an aviation industry that corresponds to 520,000 jobs and 11.4 billion pounds to the GDP (2004).Tourism and increased trade from countries outside European Union support UK aviation industry. China will become the third largest market after US and UK. In China there is an absence of regional network something that has changed with the Olympic Games in 2008. Chinese airlines do not cover Western China so this represents an opportunity for other airlines.( http://www.zinnov.com/presentation/Global_Aviation-Markets-An_Ananlysis.pdf) Regarding marketing data and customer satisfaction according to the American Customer Satisfaction Index the airline satisfaction is very low. United Airlines and Delta had very low scores. The index score is 56, United got very low rates, Delta got a 59 and Southwest Airlines scored 76. Southwest Airlines still remains the leader in customer satisfaction, profitability and employee motivation programs. Delta, in order to catch up with Southwest, it has invested a lot of money ($190) for employee incentives but with no success so far. (http://www.motivationstrategies.com/Motivation_Strategies_Update_-_June__First.736.0.html) Southwest Airlines' major competitors are: AMR Corp, Continental Airlines and JetBlue.(http://www.hoovers.com/southwest-airlines/--ID__11377--/free-co-factsheet.xhtml) Southwest Airlines' organization is quite unorthodox. It is due to Herb Keller's general leadership style. Its organization looks like upside-down pyramid whereas the upper management is at the bottom and the front line employees , who are the experts, are at the top. Management decision can be taken by everyone not just the top management. Employees are encouraged to talk and think freely. Southwest commitment to people is also shown by the fact that it does not have a Human Resources Department but a People and Leadership department show us to show its respect to the three ps: people, personalities and personal. Southwest Airlines offers low prices. Competition in the particular industry is increasing and since a lot of companies downsize this means that they will have to compete for the same market. B) On the basis of your research, what advice on the subject of Human Resource Management would you give to your chosen company's chief executives for the period 2009-2012 Human Resource Management belongs to the top management of a company i.e. it participates in the design of corporate strategy. First of all, I would have to remind the company's competitive advantages which are mainly : low prices, satisfied customers and employees. Low prices are very much appreciated by customers since they value cheap ways of travelling rather than having direct-routes or in-flight meals. Southwest Airlines is a company that is still growing so instead of looking at other ways to improve, it has to focus on its core competencies and develop them further. In terms of customers, it would have to better serve customers through improved routing, less delays and easy accessibility. Regarding now Human Resources itself. Southwest is known for its exceptional leadership and "funky" culture. According to researches for the company, the following have been found out. "Southwests most distinctive organizational competency is its ability to build and sustain relationships characterized by shared goals, shared knowledge, and mutual respect." Her research has found that over time, Southwest has developed 10 organizational practices for building high performance relationships-these guiding practices are: (1) leading with credibility and caring, (2) investing in frontline leadership, (3) hiring and training for relational competence, (4) using conflicts to build relationships, (5) bridging the work/family divide, (6) creating boundary spanners, (7) measuring performance broadly, (8) keeping jobs flexible at the boundaries, (9) establishing partnerships with the unions, and (10) building relationships with suppliers. Each of these practices is designed to build relationships of shared goals, shared knowledge, and mutual respect within the company and with its external partners, and together they have enabled Southwest to achieve industry-leading levels of both quality and efficiency".( http://www.hr.com/SITEFORUMt=/contentManager/onStory&e=UTF-8&i=1116423256281&l=0&active=no&ParentID=1119278056120&sort=Price&StoryID=1133218999211) The above suggestions provide a very useful tool for the formulation of human resources strategy for the years 2009-2012. Top management should go on leading with care. On the other hand, front line employees have to be further trained in order to enhance their leadership capabilities. Hiring new employees has to follow the same path i.e. employees with leader and proactive personality should be hired. Part of the training program will be conflict management and this will include all management levels. In order to keep employees happy and not burnout, it is important to create a flexible working schedule so it can cover effectively their needs and bridge the work/family divide. On the other hand, relationships with the existing trade unions should be further enhance. Existing perks should remain since these contributed a major deal to Southwest's employee success and they should be in combination with internal communication programs. The above will enable Southwest to maintain its existing success and keep its leader position in the future. References Internet Motivation Strategies. Available from:, Accessed [April 23 2009] Zinov LLC. (2007). Global Aviation Analysis.Available from:, Accessed [April 24 2009] Books Axelrod, R.H., Block P. (2002), Terms of Engagement: Changing the Way We Change Organizations, Ingram Pub Services. Bedeian, A. G., Gleuck W. F. (1983), Management, Dreyden Press, Chicago. Bryman, A. (1992), Charisma and Leadership in Organizations, Sage, London. Gannon, M. J. (1982) , Management: An Integrated Framework, Little, Brown, Boston. Goleman D. (2000), " Leadership that gets results", Harvard Business Review, March - April 2000. Read More