Turksh Arlines Human Resource Strategies - Case Study Example

Boxall,Purcell and Wright identfied three domains of HRM, using the strategic domain and one other of your choice identify and critically evaluate the human resource strategy of an organisation with which you are familiar.  The case of Turkısh Aırlines HRM strategic and international approach By: TABLE OF CONTENTS 1.0 Introduction 1.1 Overview of Turkish Airlines 1.2 Human Resource Problems Facing The Turkish Airways 1.3 Human Resource Strategy of Turkish Airways 2.0 Conclusion and Recommendation 1.0Introduction Human Resource Management (HRM) is of strategic importance to all organisations. HRM do not only create competitive advantage for the organisation but is the force underpinning organisation’s success1. No wonder, the way HRM practices and policies take shape also affects the employee’s experiences of work and the employment relationship2. Within the mainstream HRM literature, there is a long tradition of research arguing that in order to make an optimal contribution to firm performance, HRM policies and practices should be integrated both with firm strategy, so-called vertical strategic integration and with each other, so-called horizontal integration3. Paul Ilsles best fit model attached in the appendix lay emphasis on this. In present day organisation, because any discussion about how an organisation’s succeeds or fails ultimately comes back to the way individuals are managed, Academics and Practitioners agree that as the dynamics of competition accelerates, people are perhaps the only truly source of competitive advantage4. According to, Turner, Keegan & Hueman (2006:317), for an organisation to be effective and successful, the human resource management functions must be integrated into the various organisational strategy. According to this model, the HRM functions its goals and aims, need to be aligned with the strategy of the organization. Here emphasis is both on the on projects and routine products and services and where the job requirements are well defined and stable. Today, with the increasing researchers desires to demonstrate the importance of an effective human resource policy on organisation performance research has shifted from a micro level that previously dominated research interest to a more general, strategic macro level5. The term human resource management is not new. It has been widely used by scholars and managers to refer to the set of policies designed to maximize organizational integration, employee commitment, flexibility and quality of work6. Jackson & Shuler (2002) referred to it as an umbrella term that encompasses (a).specific human resources practices such as recruitment, selection and appraisal and (b). formal human resource policies which directs and partially constrain the development of specific practices and in all, it comprise a system that attracts develops, motivates and retains those employees who ensure the effective functioning and survival of the organisation. Against this background this paper aims at evaluating the human resource management strategies of the Turkish Airlines. Part two of the paper presents an overview of Turkish airlines with it human resource challenges. Part three presents the human resource management strategies of the airlines and the last section presents the conclusion and recommendation. 1.1 Overview of Turkish Airlines According to the company corporate report (2007), Turkish Airlines, Inc is the main national airline of Turkey with head quarter based in Istanbul. The airline operates a network of schedules services to 123 domestic cities, serving a total of 155 airports. It destination flights include Africa, Europe, Asia and the United States. In addition, as stated in the (2007) company’s report, it operates a network of scheduled services to 123 international and 32 domestic cities. According to the company’s statistics, in 2006 and 2007 it carried 17 million and 19.7 million passengers with total revenues of US$2.3 and US$3 billion, respectively (2007 company’s Report). To be able to serve the global market, the airline has around 12,000 employees. Most of the employees are multilingual, coming from different countries with different ethnicity. The airline also operates scheduled services from 34 airports in Turkey though 25 of them handle domestic flights only. Turkish Airlines is the leader of domestic market with the help of its low-cost spin-off company AnadoluJet. Its rivals are Onur Air, Pegasus, SunExpress (half-owned by Turkish Airlines) and Atlasjet (Company Report 2007).. 1.2Human Resource Problems Facing The Turkish Airways Turkey airline is the largest domestic flight company, a market leader in the country. As one of the market leaders in the flight industry, the company is highly reputed among customers and has established a high level of credibility and goodwill in the domestic flight market. The staff is highly competent in their respective profession and departments. However, as identified from existing research , certain issues pertaining to the human resource department to this organisation remains a puzzle. These problems include:- Poor communication and lack of information flow between the various departments, Lack of job satisfaction, headhunting of key staff members by competitors, weak organisational structure, weak reward strategy and organisational culture and the absence of training and career development for all the staff. While the main issue of finding reputable international staff remains an issue, the company has adopted a number of human resource management strategies of late. The company has neglected the soft sides of its business, that of the organisational culture. Today, culture is a core competence of an organisation. Culture being the taking for granted assumptions used to be absent in the company’s routines, procedures, staff training and opportunities for individuals to take care of individual needs are absent. While this has been resolved, it has created a high level of trust and commitments amongst workers. The entire business requires direct interaction with the customers, and it is through a strong culture that cost can be reduced. The recent establishment of career advancement track for workers, performance reward systems, supportive work environment, and defined duties for workers has pushed the organisation into a situation of being up to date with the market demands, though some key personnel are being head hunted by competitors. 1.3 Human Resource Strategy of Turkish Airways According to Sveiby (1997) a key to retaining personnel in knowledge based-organisation is ensuring that employees had the opportunities to work on interesting projects with interesting careers challenges clearly defined. At Turkish airlines, the very first priority for the employees is making the working environment a memorable and enjoyable one. According to one of the employees, “the work place is forming a new social group, workers spend about 65% of their day at the work place, our priority is to let them enjoy, feel relax while they work”. From a review of the company webpage, the Human resource department of the Turkish airlines tends to be very goal/employee oriented and one can deduce that the management believes that conducive workplaces are an argument against competitiveness. According to Sveiby (1997), organisations under such a situation should create and incorporate healthier psychological work environments. This was the same position echoed by Gilbreath (2008) when the researcher postulates that, healthy psychological environments contribute to career conduciveness. According to Gilbreath (2008), creating strong HRM policies requires creating a strong psychological environment in which employees can thrive. Such an environment requires conducting stress audit, monitoring the work of the environment, matching people and work environment and using teams of employees and researchers to study the work environment. The Turkish Airline should eliminate unnecessary stressors (e.g., poor job design, ineffective supervisor behaviour, poor communication, mismatches between employee’s skills and job demands). The Human Resource department can also facilitate this through greater involvement, employee’s autonomy, physical comfort, organisational security and recognition. At the Turkish airline, there is no substitute for these as security of its activities have increased with regard to terrorist treats. To be critically useful to management, Ellis et al(2007) argue that an overall HRM framework should capture and integrate various functions and also clarify how various aspect of HRM add value to an organisation. Gilbreath supported this argument when the researcher calls for organisation facing communication and job satisfaction problems to institutes good fit between employees and their work environment. Under good fit theory, demand ability fit, suppliers value fit, self concept jobs fit and person group fit should be primary for workers integration and commitments. At the airlines, the employee’s recruitment and retention strategies lay emphasis on this. One factor that affects the implementation of HRM practices that has received significant attention is culture. Culture can be defined at different levels that range from the group to the organization to the national level (Erez&Earley, 1994). Culture comprises values and norms that guide individuals’ behavior. Many view organizational practices and theories as culturally bound (Adler, 1997; Hofstede, 1980) which would mean that the values of a country should be compatible with a management practice for it to result in employee motivation. The company has a strong culture, defined by a hierarchy, routines, procedures values and norms (Company Report 2007) Kotter (1995), in his article “Why transformation efforts fail”, argues that, the bad outcome of most change efforts is caused by the management’s failure to take the company through a series of important change steps. According to the author, these failures are caused by generally underperforming management rather, the researcher postulates that, there is little experience out there when it comes to organisational change processes and as he states; “Even capable people often make at least one big error”7. It is important to recall here that, one big problem identify with “The airline” was resistance to change. According to Kotter, successful organisation implementing change process needs to follow and adopt his eight-step model for transforming organisation. This model includes establishing a sense of urgency, forming a powerful guiding coalition, creating a vision, communicating the vision etc. Cobb Gnyawali & Offstein (2006:315) argued that while effective human resource management and policies have, indeed, been linked to strategic outcomes, human resource management theory has yet to link human assets and HR practices directly to the building blocks of strategy and competitive behavior. Accordingly, their model of strategic human resources links both micro and macro literature streams “The resource base view of the firm infers that firms create competitive advantage by implementing unique combinations of resources and business practices that are difficult (or impossible) for competitors to imitate” from this viewpoint, Human resource practices are key components of overall firm strategy. In fact, the success of some well-known firms has been attributed attributed to their HR practices as a competitive advantage (e.g. Southwest Airlines and SAS)8. When faced with conflicting priorities and guided by the rational behind investment theory effective human resource policies need to be put in place to gain employees commitment, flexibility and for creating a “core resources” and competitive advantage to sustain performance9. According to Piercy ( 1995) the larger the gap between a companys employees and customers perception concerning both service product and service delivery the smaller the probability of satisfying the customers. If properly implemented, HR compliance is a process. Its a way of defining proper individual and group behaviors, and assuring that laws and policies are understood and followed. This means you must know the laws and develop appropriate policies in relation to these laws10. Compliance also means you and your managers need to communicate these policies to the troops, along with your expectations for adherence and the consequences for nonadherence11. The latter requires specific investigative and punishment procedures. Effective HR compliance programs have been instituted in to the airline activities. Compliance has to start at the top and trickle down to all levels, so everyone in the company knows that the workplace must be kept safe and discrimination wont be tolerated. So far, many researchers have been able to recommend the following methods as a pathway towards effective human resource development. Keep abreast with the laws. Human resource policies changes most often and to be on the safe side requires organisation to be responsive to current laws and their environment. This will enable the organisation develop appropriate policies and facilitate communication with employees. At the Turkish airlines, the routines procedures and values lay emphasis on this. The next step will be for the organisation to hire human resource professionals with the skills and talents to forge ahead with compliance measures. In the absence of this organizations should contract with human resource consultants12. The airline has a strong human resource department, and do not make use of agency personnels. Organizations are also called upon to develop a handbook that meets their respective human resource needs and which can be expanded subsequently. The human resource department should make sure new policies are reviewed with the lawyer prior to implementation13. Another important factor can be drawn from agency theory. Aligning the interest of the principal and the agents requires a fair play where neither the principal nor the agents are worst off. Cobb Gnyawali & Offstein (2006:6) see strategic human resource planning and policies as vital and primary to an organisations survival. To make this a success, these researchers on their work “A strategic human resource perspective for firm’s competitive behaviour” refer to human capital as a full range of knowledge, skills, and abilities an individual can use to produce a given set of outcomes and at the “upper echelon of the organization, human capital is usually deployed to scan the internal and external environment, process information, solve problems or recognize and seize opportunities”. Drawing from Portals five forces framework, Cobb Gnyawali & Offstein (2006) postulate how internal human assets and human resource practices of a firm help drive the specific competitive activities that result into market advantage. 2.0 Conclusion and Recommendation The purpose of this paper was to investigate the human resource management strategies of Turkish Airlines. Judging the human resource management strategies of Turkish Airlines with the work of leading experts in the field of Human resource management strategies, we found out that, At Turkish airlines management has created a conducive environment, with more workers participation, career succession planning, career relevant training, greater opportunities for higher roles, job satisfaction, trust and commitment to enhance employees commitment and satisfaction.. If these findings are properly implemented by other organisations, a number of benefits could be achieved which include developing a set of shared values, reducing costs when the relationship finishes and increasing profitability as a greater number of end users customers are retain. References Gilbreath, B., (2008). Creating Career-Conducive Organizations. A primary intervention approach. Advances in Developing Human Resources, 2008-10 Kotter, John. P., (1995). ‘Leading Change: Why Transformation Efforts Fail’, Harvard Business Review, Vol. 73, Issue 2, p59 Sveiby KE. (1997). The new organizational wealth: managing and measuring knowledge-based assets. San Francisco: Berrett-Koehler; 1997. Turner, R. Keegan, A & Hueman, M., (2006). Human Resource Management in a Project-Oriented Company. A Review. International Journal of Project Management 25 (2007) 315-323 Youndnt, A. M., & Snell, A. S., (1995). Human Resource Management and firm performance: Testing a contingency model of Executive controls. Journal of Management. Vol.21, No. 4, 711-737 Cobb T.A, Gynyawali R.D, & Offstein H.(2006) A strategic human resource perspective of firm competitive behavior. Human Resource Management Review Volume 15, Issue 4, Pages 305-318 Doty H. D., & Delery, E. H (1996). Modes of Theorizing in Strategic Human Resource Management: Tests of Universalistic, Contingency, and Configurationally Performance Predictions. The Academy of Management Journal, Vol. 39, No. 4 (Aug., 1996), pp. 802-835 Guilding C., Warnken J., Ardill A., and Fredline L., (2003). An agency theory perspective on the owner/manager relationship in tourism-based condominiums. Tourism management 26 (2005) 409-420 Heneman et al., (2000). Human resource management practices in small and medium sized enterprises: Unanswered questions and future research perspectives, Entrepreneurship, Theory and Practice pp. 11–26. Huselid, A. M., (1995).The Impact of Human Resource Management Practices on Turnover, Productivity, and corporate Financial Performance. The Academy of Management Journal, Vol. 38, No. 3 pp. 635-672 . Grehart, B. & Becker B., (1996). The Impact of Human Resource Management on organizational performance: Progress and Prospects. The Academy of Management Journal, Vol. 39, No. 4 (Aug., 1996), pp. 779-801 Jackson E.S., & Shuler S. R., (2002). Strategic Human Resource Management. Katz, D. & Kahn, R. (1992) Measuring Innovation in OECD and Non-OECD Countries: Selected Seminar Papers - Page 249 Jackson E. S., Schuler S. R., & Sparrow, P., (1994). Convergence or divergence: human resource practices and policies for competitive advantage worldwide. The International Journal of Human Resource Management, Volume 5, Issue 2 May 1994 , pages 267 – 299 Jensen Michael C., (2003): Theory of the Firm Residual claims, and organisational forms. Cambridge, Massachusetts London, England Malow S., (2006) Human resource management in smaller firms: A contradiction in terms. Human Resource Management Review Volume 16, Issue 4, Pages 467-477 Exploring the Intersection of HRM and Entrepreneurship Poole, M., (1999). Human Resource Management and Industrial organisation Critical perspective on business and management Read More