Human Behavior in Organizations - A Look at JetBlues Policies - Case Study Example

Human Behavior in Organizations: A Look at JetBlue's Policies JetBlue Airways, which was founded in 1999, was one of the best-funded start-ups in the aviation industry with a capitalization of $130 million. Envisioned by David Neeleman, JetBlue was to be a company that provided quality service at affordable rates to its passengers as well as a competitive but empowering environment for its employees. In line with his vision, he sought to work with some of the best managers to work with him in developing the company and its core values of: Safety, caring, Integrity, Fun and Passion. Ann Rhoades became the Executive Vice President of his Human Resource department and with the rest of the company's management team; they created an environment that fit in with the unique values that they had envisioned. Human Resources: Making Sure People Fit Within the Laws The work environment at JetBlue was such that it espoused the importance of team culture within its environs. Ardently against the unionization of its employees because they believed this be divisive, they came up with employee packages that was tailor-fitted to the employee's needs but which still operated on the standard of equality. Having a varied workface and aiming to employ at least 5000 employees by 2004, the company works well within the statutes of the national labor laws by ensuring that its employees are not discriminated against by their gender, sex, color, religion or national origin in accordance with Title VII of the Civil Rights Act of 1964. They have even gone the extra mile beyond what the Equal pay Act of 1963 was asking by ensuring that part-time employees received medical, 401K, profit sharing and double pay if they work on holidays (Gittel and O'Reilly, 2001, p. 11). In emphasizing safety as on e of the core values of JetBlue, they have assured that they work well within the standards set by the US Department of Labor in the Occupational Safety and Health Act of 1970 (OSH Act) whereby the safety of employees are assured by following set standards to ensure that employers are providing safe and healthful workplaces. This is emphasized further in the company orientation where Ann Rhoades tells employees that to be safe and to provide safe service to its customers, employees should be free of drugs and alcohol. JetBlue's airplanes were also the first national carrier to install bulletproof, dead bolted cockpit doors on all of its aircraft, even before the Federal Aviation Administration mandated it after the aftermath of September 11 (Judge 2001). Because JetBlue is highly selective about its hiring process (they hired only 1,700 people out of the 100,000 that applied in 2003 (Salter 2004)) and also of the fact that at JetBlue, they value an individual's 'fit' within the company, promotions have to be done through the use of in-house talent. In fact, JetBlue's management team had been established with a modified from of internal recruitment in that Neeleman hired people who were already very familiar with the industry. Another example is when JetBlue's pilots, felt happy enough with their posts that they recruited their friends from other companies. However, like all other companies JetBlue still undergoes the regular hiring process of advertising for talent to join its pool of workers (external recruitment method). A single local advertisement for recruitment agents in Salt Lake City generated a waiting list of 2,500 interested applicants. These people, like the rest of the other applicants JetBlue screens, go through a thorough process of interviews and a committee of these interviewers have to agree with one another before they hire someone. The effect of these internal and external recruitment methods of JetBlue is to thoroughly ensure that they find the right people for the jobs that they are offering. Hiring people from within the aviation industry as in the case of JetBlue's management team ensured that these people were already well versed with the industry's comings and goings. Dave Barger their President and COO spent ten years running Continental Airways, Ann Rhodes, who heads the Human Resources Team, came from Southwest Airlines, while Al Spain, Vice-President of Flight Operations, was recruited from Continental where he used to be a line pilot. Needless to say, promoting people who have been with the company and who have proven themselves to 'fit' within the JetBlue culture offers the added advantage that they would not have to re-train this person and inculcate in him the values of JetBlue. Recruiting from within the company creates opportunities for promotion among the ranks, thus creating a highly motivating environment for its employees. In terms of its external recruitment, the advantage with JetBlue is that it has a wide base of individuals to choose from. As previously mentioned, it has 2,500 people on a waiting list just for the position of reservation agent in Salt Lake City alone. Because they emphasize 'fit' within the company as a key to maintaining their smooth operations, the wide database of people give the members of JetBlue's People Team, the chance of finding and hiring people with great attitudes to work with them. They can turn down a candidate who they think does not fit into their company culture as in the case of the pilot who was not hired because of his arrogance or of the mechanic who was hired because he showed that he had the 'integrity' to be part of JetBlue's team. Hiring the Right People Barbara Shea, a colleague of Ann Rhoades, looks at her job at JetBlue as 'hiring people with great attitudes'. People without previous experience in the aviation industry have a chance of becoming hired if they pass the series of interviews set by the People Team. All of the personnel of JetBlue undergo this rigorous interview process before they are hired by the company. Using the five values of the company: 'safety, caring, integrity, fun and passion,' people being interviewed are asked to recall incidents in the past where they had exhibited a particular behavior related to the company values - the mechanic demonstrating his integrity (when he refused to sign off a flight and caused delays) and the pilot, who by his answers showed his arrogance. Finding pilots who were especially comfortable with computers and who fit in the JetBlue environment was a primary goal for its People Team because all their pilots undergo very expensive ($ 30,000) seven - week training for qualification on the A320. With this kind of investment, it is imperative that they find someone who would stay with the company for an extended period of time. Performance appraisals Most companies do performance appraisals regularly in order to evaluate the quality of work done by their employees. It is the gauge by which a person's effectiveness is measured. According to Bacal (2003), several factors influence a performance appraisal: aptitude, skill level, job understanding, choice to expend effort, choice of degree of effort to expend, choice to persist and outside factors. A person's aptitude refers to his native ability to perform the task - in the case of JetBlue's pilots, "Are they able to fly planes" Skill level refers to an ability to learn to perform a task within the limits of the person's aptitude: "How well will the pilots learn to fly the A320" A person's understanding of the task tells us if he knows what is expected of him. Ifthis clear communication is lacking, no amount of skill or motivation willbring about effective performance. The pilot who knows that he is expected to reduce turn around time to less than thirty minutes will be able to perform this task because he knows this is what is expected of him. Sometimes a person may have the skill, aptitude and understanding but choose not to expend the effort because of environmental or other factors. An unhappy pilot may absent himself habitually because he is unhappy with the pay he receives. Performance appraisals are also influenced by a person's choice of degree of effort to expend. An employee may be putting ina limited amount of effort and therefore producing inferior results. A person's choice to persist also influences a person's performance appraisal because "performance requires that effort be initiated and sustained over time" or because of outside factors beyond the individual's control such as the organization itself hindering the employee's performance. The 360-degree feedback At JetBlue, Ann Rhoades had introduced the 360 - degree feedback evaluation (called the 320 degree evaluation in deference to their A320s). This is a relatively new evaluation method whereby an employee receives feedback from his or her supervisor and four to eight peers, reporting staff members, co-workers and customers. It helps the individual understand how his effectiveness as an employee, co-worker, or staff member is viewed by others (Heathfield 2003). According to Heathfield (2003), correctly used, the 360-degree feedback provides the following: 1. Improved Feedback From More Sources: Provides well-rounded feedback from peers, reporting staff, co-workers, and supervisors. This can be a definite improvement over feedback from a single individual. 360 feedback can also save managers' time in that they can spend less energy providing feedback as more people participate in the process. Co-worker perception is important and the process helps people understand how other employees view their work. 2. Team Development: Helps team members learn to work more effectively together. (Teams know more about how team members are performing than their supervisor.) Multirater feedback makes team members more accountable to each other as they share the knowledge that they will provide input on each members' performance. A well-planned process can improve communication and team development. 3. Personal and Organizational Performance Development: 360-degree feedback is one of the best methods for understanding personal and organizational developmental needs. 4. Responsibility for Career Development: For many reasons, organizations are no longer responsible for developing the careers of their employees, if they ever were. Multirater feedback can provide excellent information to an individual about what she needs to do to enhance her career. Additionally, many employees feel 360-degree feedback is more accurate, more reflective of their performance, and more validating than prior feedback from the supervisor alone. This makes the information more useful for both career and personal development. 5. Reduced Discrimination Risk: When feedback comes from a number of individuals in various job functions, discrimination because of race, age, gender, and so on, is reduced. The "horns and halo" effect, in which a supervisor rates performance based on her most recent interactions with the employee, is also minimized. 6. Improved Customer Service: Especially in feedback processes that involve the internal or external customer, each person receives valuable feedback about the quality of his product or services. This feedback should enable the individual to improve the quality, reliability, promptness, and comprehensiveness of these products and services. 7. Training Needs Assessment: Multirater feedback provides comprehensive information about organization training needs and thus allows planning for classes, cross-functional responsibilities, and cross-training Overall, there are many advantages fro using the 360-degree feedback as had been mentioned above. Used correctly, it provides the evaluator with a clearer picture of the individual he is evaluating because he gets to see the person from another person's perspective. This helps him better determine what needs to be improved. In the case of JetBlue, Barbara Shea used it to discuss with a person to describe how this individual's lack of fit with the company has cost her job. Compensation and benefits Several factors influence the determination of an employee's compensation, all of which fall under two major categories: those mandated by law and those that are discretionary. One of these factors relates to the individual's position or responsibility within the company. A position that carries higher weight such as that of a Chief Operations Officer mandates a higher compensation than that of a part-time ramp worker. A individual's educational degree is also considered as a factor by most companies. A mechanic with an Aviation Engineering degree and license will be given a higher pay grade than a technician with a associate degree in technology. The position's market value is also another factor. Full time flight attendants at JetBlue receive higher compensation than a newly graduated student who opts for a short term (one year) contract with JetBlue. The skill and experience that an employee brings to the company also plays a factor. Pilots with more flight hours rate a higher pay rate than a new graduate who has had only a few hundred hours under his belt. In terms of discretionary benefits, these usually refer to the benefits that are not mandated by the law for the company to provide. Included in this are vacation, sick leaves, provision of company insurance, holidays, 401K, pension, child care, car plans, housing loans, carpool memberships, etc. In the case of JetBlue where compensation packages are highly customized for the individual, these discretionary benefits translate to a lack of a probationary period, where benefits are paid from day one of hiring, medical, personal time off rather than the conventional holiday, double pay for working on holidays, stock options for those who want it, profit sharing benefits, medical, 401k, and telecommuting. Looking at the Future The future for JetBlue is promising. In a bid to employ more than 5000 employees by 2004 and to further expand their business in an otherwise 'shrinking industry, JetBlue stands as an icon of hope for the future of the aviation industry. It is the hope of its leaders that it will be able to sustain all of their efforts and continually hone their practices to perfection so that they can continue to live by their values of safety, caring, integrity, fun and passion. References: Gittel, J. H.& O'Reilly, C. (2001). JetBlue Airways: Starting from Scratch. The Harvard Business School, 9-801-354, 1-18. Heathfield, S. (2003). 360 Degree Feedback: The Good, the Bad, and the Ugly. Retrieved August 12, 2005 from http://humanresources.about.com/library/weekly/aa042501a.htm Judge, P. (2001). How Will Your Company Adapt New York, NY : Fast Company. Retrieved August 12, 2005 from http://pf.fastcompany.com/magazine/53/adaptability.html Salter, C. (2004). On the Runway. New York, NY : Fast Company. Retrieved August 12, 2005 from http://pf.fastcompany.com/magazine/82/jetblue_neeleman.html US Equal Employment Opportunity Commission (n.d.). Retrieved August 15, 2000 from http://www.eeoc.gov/ Read More