How Could a Company Reduce Its High Rate of Absenteeism - Assignment Example

of the of the How Could a Company Reduce Its High Rate of Absenteeism? Acknowledgements I would like to take this opportunity to thank Mr. Tom Horton, President of American Airlines, whose cooperation has been instrumental in making this report possible. I would also like to thank my class instructor for giving me such an interesting project where I could study a real life business problem and use theory to find a solution to it. The experience has been enlightening. Name of the Writer ------------------------------------------------------------------------------------------------------------------------------------- Introduction to the Company For the purpose of this project, I have selected American Airlines Corp. to report on. The company is the fourth largest airline company in the world and is headquartered in Fort Worth, Texas. Notwithstanding its size, it has been experiencing absenteeism problems. The company was founded in 1930 as American Airways; however the first flights commenced in 1934. American Airlines operates out of four hubs in the USA- one each at JFK, Miami, O’Hare and Los Angeles Airports, while its headquarters remains at Dallas Forth Worth Airport. American Airlines has a fleet of 621 aircraft as of December 2010. Tom Horton is the President and Gerard Arpey is the current CEO. Executive Summary American Airlines is one of the most reputed airlines in the USA. However due to its sheer size, it has had its share of problems. Among these, absenteeism has been reported a key factor affecting its service delivery. Through this project, I seek not only to find the reasons behind this unfortunate circumstance; I also attempt to find the reasons and to try to solve the problem by applying the theories of management and organizational behavior towards this end. I hope I have impressed upon at least some employees the value of honest and true service and the need to cut down absenteeism to the very minimum. ------------------------------------------------------------------------------------------------------------------ PRIMARY RESEARCH Interview Questionnaires Name: Year of Birth/ Age: Gender: Position Held: Date/Year of Joining American Airlines: Permanent Address: Contact Number: 1. Absenteeism has been identified as one of the key problems affecting American Airlines’ service levels today. What is your viewpoint about this? 2. In your personal opinion, what are the main reasons behind the problem of absenteeism at American Airlines? 3. If you were the CEO, Head of Human Resources, or at a senior position in the Company, what steps would you take to solve the problem? 4. Can you think of other contributing factors that influence the rate of absenteeism at American Airlines? 5. What do you think that American Airlines needs to do in order to motivate you and other employees to work more honestly and as a team to improve service levels, efficiency and effectiveness at American Airlines? 6. Do you believe that a person can be motivated by outside factors, or does the motivation level and work attitude of employees emanate primarily from the inside? 7. How do you regard the work atmosphere and culture of the organization? Is it open to suggestions and improvements or a closed hierarchical structure? 8. If you could give one worthwhile suggestion to the top management about how to improve current working conditions, what would it be? (Thank you for your support and assistance. I assure you that this information will be kept strictly confidential, and will not be shared with anyone except my class teacher and fellow students for the purpose of my assignment). ---------------------------------------------------------------------------------------------------------------- Observations (Checklists) In addition to talking to people, making observations can be a good source of primary research on a problem. Since I was looking at the causes of absenteeism and wanted to correct the situation, I chose to relax in front of the American Airlines Customer Service Counter one afternoon and observe service attitudes in action. I had prepared the following checklist for this purpose: 1. Service with a smile and a positive attitude: (Rating 1 least, 5 average, 10 excellent) 2. Professionalism displayed through wearing of uniform, tone of voice and customer dealing: (Rating 1 least, 5 average, 10 excellent) 3. Morale and work attitude determined through demeanor, conduct with passengers, willing to hear them out before interruption and displaying patience and calm: (Rating 1 least, 5 average, 10 excellent) 4. Dealing with interruptions, new situations and customer misunderstandings: (Rating 1 least, 5 average, 10 excellent) 5. Average time taken to serve a customer: (Rating 1 least, 5 average, 10 excellent) From the rating of the checklists, I have observed that while the person at the counter tried to be patient on most occasions with most customers, I could see that she became agitated in one or two situations and took help from a male standing behind her to resolve the situation with the customer. An informal chat with the male after hours established that she had been overworked because another service representative had not turned up, and she had to work two days in a row because of that. Keeping in mind her long hours, I could imagine how she felt being overworked. Analysis of Local Competitors Local competitors of American Airlines, like US Airways for example have also been impacted by the increasing cost of fuel, flight security enhancements, aging fleets and FAA regulations. However, US Airways has stripped down its operations to retain only the most lucrative flights within the USA. Outside of the USA, US Airways has chosen to form strategic alliances with other airlines as part of the Star Alliance network, and can thus be assured of good passenger utilization rates en-route to destinations served by Iberia, Lufthansa and other partners in the Star Alliance network. This also reduces flight times and working hours, contributing to greater employee satisfaction. Like American Airlines, US Airways is also working on improving their fleet and the training and development of their staff. SECONDARY RESEARCH Although the national unemployment rate remains at 9.6 percent or thereabouts, figures have indicated that the economy is showing some signs of a rebound to pre-depression levels. Figures within the airline industry show that Southwest Airlines has made a profit of US$ 112 million in the quarter Jan-Mar 2010, up from US$ 91 million in Oct-Dec 2009. Meanwhile Delta, United and US Airways have also posted profits. Despite the difficulties associated with air travel, people still prefer to use air routes to get to their destinations in the fastest time and best shape possible. It is estimated that a 1 percent increase in income levels contributes to a 5 percent increase in air travel bookings. Taking all these factors into account, Boeing is also planning to increase its production level to 35 units per month by 2012 (investopedia.com). Business Motivation Theories Among the best known and most used business motivation theories for tackling employee motivation problems of which absenteeism is a symptom, are Maslow’s Hierarchy of Needs Theory and Herzberg’s Hygiene or Two Factor Theory and they are most certainly applicable here. The first thing is that if the employees are overworked because of lack of proper administrative controls and nothing is said to the absenting staff, obviously it will have its toll both physically and mentally on the overworked staff members and she will air out her grievances to management and if nothing is being done, let some team off on the unfortunate customers as well. Proper sleep and mental relaxation are very necessary for a human being to perform, especially if the job has long hours and involves a high pressure activity like customer dealing. Herzberg’s Two Factor or Hygiene Theory also points out to positive factors that can motivate an employee on the job, while also informing us that the absence of some basic factors can result in dissatisfaction among the employees. Conclusions and Recommendations We have gone through the research and analysis process of tracking the reasons for absenteeism at American Airlines, one of the key players in the US airline industry as well as that of the world. It is hoped that using the theories and research provided, American Airlines can shake off this problem and re-emerge with better and more enhanced levels of service in the future, helping it retain its position in the industry. Bibliography Pinkasovitch, A. Rebounding Airline Industry? Accessed on 02 May 2011 at http://stocks.investopedia.com/stock-analysis/2010/rebounding-airline-industry-luv-dal-uaua-cal-lcc-ba-mcd0730.aspx Read More