Easyjet Human Resource Strategy - Case Study Example

Easyjet HR strategy Contents Explain and justify why is the Service Profit Chain concept important for the organization, easy Jet to address this, making appropriate links back to the previous discussion on HR strategy. 3 What the organization should do using current theory and practice? 5 References 7 Explain and justify why is the Service Profit Chain concept important for the organization, easy Jet to address this, making appropriate links back to the previous discussion on HR strategy. Service Profit Chain is a relationship between the different factors that ultimately leads to the profitability of a service which includes customer loyalty and satisfaction, profitability, customer retention and customer productivity and efficiency. This chain provides a link between the profitability, customer loyalty, employee satisfaction, productivity and loyalty. The growth and profit of an organization are stimulated by the customer loyalty; this loyalty is a result of customer satisfaction (Aswathappa, 2013, pp.85-86). A customer satisfied by the value of services provided to them. Satisfied, productive and loyal employees provide this value for the customers. High quality support services of the organization and organizational policies that create employee satisfaction and ultimately the satisfied employees deliver the desired results to the customers. The service profit chain is as follows Effective internal service quality through job design, workplace design, employee selection, employee development, rewards and recognition for employees, and the tools for serving customers results in employee satisfied (Belobaba, Odoni and Barnhart, 2009, pp.98-100). These highly satisfied and loyal employees deliver the best productive results and also can be retained in the organization for a longer period of time. By using service profit chain concept the service leaders provides support to the employees as well as deliver appropriate services to the customers. Easy Jet is the fourth largest airline in the Europe and is the most successful low cost airlines. The mission statement of Easy Jet is to provide the customers with good value, safe, point to point air services (Brown and Grundy, 2012, p.78). Easy Jet aims at offering consistent and reliable product fares that are appealing to the business markets and leisure on a range of European routes. In order to achieve this company needs to use the concept of service profit chain in which the best services can only be delivered if the people working in the organization are happy with their work. The employee retention is very important in the highly competitive market place as in this case other low cost airlines also pop up any day so it requires holding on to the talent present in the organization. This concept of service chain enables a firm to provide technology and support to the front line workers, investment in people, revamped training and recruiting practices, compensation, rewards and recognition related to the performance of the employees at each and every level of the organization. This technique is very useful as it calibrates the impact of the employee satisfaction and retention on the loyalty and satisfaction of the employees as highly satisfied employees are more productive and deliver the best of services to its customers. These valued services retain the customers and enhances the profitability and growth of the organization (Heskett, Sasser and Wheeler, 2013, pp.167-168). Easy Jet aims at minimizing the overhead costs and maximizing the utilization of the aircrafts by providing point to point flights. Easy Jet adopts a low cost strategy by providing low fares to the customers, and maintaining a market share by competing on price which are much lesser than its competitors. Easy Jet eliminates the unnecessary costs of frill services which are expected by the customers on longer flights (Paauwe, 2004, p.105). This short haul routes concept of Easy Jet enables them to cut down on other service costs of frill services, baggage transfer and transit passenger assistance costs of the connecting passengers. Easy Jet’s point to point flying routes or short haul routes enable them to give more options to the customers to fly; they do not invest in unnecessary management on board for the frill services but offers refreshments at a nominal cost (Heskett, Sasser and Schlesinger, 2010, p.65). The concept of Easy Jet is not very appealing to those customers who are brand cautious and want something extra from whatever they purchase, this low fare airline is best suited for those who are less demanding by nature and wants the primary motive of reaching a place on time quickly be served. But this service also requires efficient training and development of the staff so that the customers do not feel inferior about the brand they are travelling by, since it is a service sector the staff and management has to be very particular about their gesture and behaviour to indicate the quality of the service being offered (Yee, 2007, p.93). Easy Jet wants to be the best low cost airline so this service profit chain will help it to realize that profits cannot be only generated through increasing the rate of service and by offering competitive price but by delivering quality service to the customers through efficiency in the work system .Easy Jet must be aware that in a highly competitive market it is essential not only to acquire new customers but also to retain the older ones as loyal customers increases more profitability for any firm. The key issues which makes the service profit chain concept essential for Easy Jet is though not in present scenario but it can face a competition from Ryan Air and other domestic air travel industry in the future if the customer loyalty and retention is not strong from the firm’s perspective (Armstrong, 2000, pp.76-77). The employees have to be highly productive and not compromise on the level of the service quality delivered by Easy Jet. The inflationary and weaker consumer confidence can be a threat for Easy Jet. In this scenario the service profit chain enables the company to understand what are the hidden desires of the customers so that they can retain them by providing the best of services and not cost cutting all the time. It will even help Easy Jet to design its internal quality system by hiring the right person for the right job, efficiently training them, giving rewards and recognition and ultimately making these employees satisfied with their job profile so that they are able to deliver the best of their capabilities (Dhar, 2008, pp.230-232). Easy Jet through this concept can adopt the policy that cost cutting and having competitive pricing is not the only tool to achieve success but they are internal and external factors that drives the success of the firm. What the organization should do using current theory and practice? The organisation is already following certain aspects of service profit chain by training the employees in a way that they have high commitments towards safety for a customer. This training is imparted throughout the organisation, from the management, to the cabin crew to the ground staff. The low fare airline and innovative ecommerce business aim at acquiring more of leisure customers. In order to become Europe’s best airline the company focusing on delivering low costs and maximizing margins. Easy Jet is aware of the fact that their success is because of the people but there is no such initiative to apprise the talent which makes them such a strong leader. By using this concept the organization should focus on more efficient job design. Like it has launched a new program Management Development Program to reveal the method of their corporate success and the impact of the role of the individual employee on the success of the firm. This initiative will help the employees to be more motivated towards their job as they know the degree to which they benefit the organization. Easy Jet has realized it lately that their people are the key behind their success (Paauwe, 2004, pp.34-36). They should develop more of review programs to praise the talents and understand the loopholes where their employees are lacking. Their employees have to be aware about all the external conditions that affects the business system and also has to be well informed about the success of the business so that the employees remain well satisfied with their job and be highly motivated to deliver the best. The motivation level can be achieved by giving fringe benefits, even a reward system should be there to keep a track on the people who serves the customer’s very efficiently. The performance of the employee should be marked on a grade scale to be aware of the talent and skilled personnel by the management. There is a lack in the after sales service, Easy Jet can offer some complimentary food or gifts to their regular customers this will help on to maintaining the old customer base. A proper track record of all its customers should be maintained by a separate department. A continuous training and assessment program of the employees will enable them to be more competitive. The customer’s desire should be detailed out through a survey at the time of flying with Easy Jet so that the company can fulfil the loopholes. The highly motivated employees will keep on delivering the best services to the employees and hence increase the customer satisfaction level which in turn will increase the profitability for the firm. References Aswathappa, K. 2013. Human Resource Management. New Delhi: Tata McGraw-Hill Education. Belobaba, P., Odoni, A., Barnhart, A. 2009. The Global Airline Industry. UK: John Wiley & Sons Brown, L., Grundy, T. 2012. Value-based Human Resource Strategy. UK: Routledge. Heskett, J. L., Sasser, W. L., Wheeler, J. 2013. The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage. USA: Harvard Business Press Heskett, J. L., Sasser, W. L., Schlesinger, L . A. 2010. The Value Profit Chain. Germany: Simon and Schuster. Yee, W. Y. 2007. An Empirical Study of the Service – Profit Chain. Hong Kong: Hong Kong Polytechnic University. Paauwe, J. 2004. HRM and Performance. Great Britain: Oxford University Press. Bhatia, S.K. 2007. Strategic Human Resource Management. New Delhi: Deep and Deep Publications. Armstrong, M. 2000. Strategic Human Resource Management. USA: Kogan Page Publishers. Dhar, R. A. 2008. Strategic Human Resource Management. New Delhi: Excel Books India. Read More