Strategic Human Resource Management in Qantas - Case Study Example

Strategic Human Resource Management – Qantas [Name of the Student] [Name of the University] Strategic Human Resource Management – Qantas Introduction The Qantas airlines was founded in 1920 in Australia. It had been initially registered as the Queensland and Northern Territory Aerial Services Limited. Qantas constitutes one of the leading long distance airlines of the world, in addition to being one of the strongest Australian brands. It enjoys the redoubtable reputation of providing superlative safety, operational reliability, customer service, and engineering and maintenance[Qan15]. The Qantas Group is chiefly seized with transporting customers, via its airline brands Jetstar and Qantas. Furthermore, this group conducts subsidiary businesses, such as other airlines and specialist market operations. The Qantas Group furnishes international, domestic and regional airline services. The subsidiary businesses of the Qantas Group include Freight Enterprises and Qantas Frequent Flyer. The staff strength of this organisation is around 30,000, and approximately 93% of these individuals are based in Australia[Qan15]. History The development of Australian civil aviation and Qantas tend to be intertwined. Initially biplanes were employed for transporting a couple of passengers. At present Qantas provides Airbus A380s, and these transport 450 individuals across the world, on a daily basis. The major portion of the credit for this development has to be granted to human endeavour. In fact, a few indomitable individuals struggled against all odds to establish Qantas. The unstinting support of this airlines’ staff and customers ensured that it survived war and economic upheavals, and achieved the position of a pristine airlines of the world[Qan151]. In addition, the Darwin-Singapore sector was serviced from 26 February 1935, by the DH86 aircraft of Qantas. Subsequently, Qantas introduced Short C Class Empire flying boats [Qan152]. These aircraft traversed the Australia to England route. In addition, the formulation and implementation of several strategies, over time, has enabled Qantas to attain the status of a prominent player in the airline industry. To its credit, Qantas faithfully adheres to corporate ethics and the notion of fair competition[Far15]. HRM Strategies Some of the HRM challenges faced by organisations, in the competitive and international milieu, include the inveigling and retention of skilled employees, resolving diverse workforce problems, safety and wellbeing, and performance and reward management[Mon141]. The principal areas of HRM are recruitment and retention, training and development, motivation, leadership and management, communication, and productivity[aas12]. Recruitment and Retention Qantas’ recruitment of employees entails various issues such as diverse workforce, developing environmental awareness among them, and knowledge of international norms and legislation. In addition, employees should participate in projects, such as mitigating waste to landfill and sustainable procurement procedures. Hence, Qantas prioritises its recruitment issues to satisfy the above discussed criteria. Diversity For example, the Qantas Group attaches considerable importance to developing its diverse workforce. In addition, its workforce depicts considerable cultural diversity. Thus, its development and recruitment strategies consist of programmes that are aimed at attracting and retaining individuals from diverse cultural and personal backgrounds (Qantas Airways Limited, 2015). This is due to the vast cultural disparity among its customers, worldwide. A diverse workforce caters to the needs of the international clientele of Qantas. Safety The Qantas Group declares itself to be environmentally friendly. As such, Qantas provides the safest operating environment, at the domestic and global levels. Nevertheless, there is room for improvement, and the absence of serious safety incidents can engender a false sense of perfection. When the perception is that all the operations are being conducted optimally, there is great difficulty in introducing improvement on a continuous basis[Luc01]. Consequently, Qantas accords importance to environmental sustainability. As such, it adapts measures to reduce harm to the environment by adapting strategies, such as qualitative assessment and transparent reporting. As such, the Qantas Group has progressed from that of a provider of air taxi flights and joy rides to a major international airlines. The airlines industry is at once demanding and dynamic. In this milieu the Qantas Group has been growing continuously and successfully [Qan154]. This achievement has been attributed to its emphasis upon building and developing a team of skilled, experienced, and motivated people. Environment In addition, this organisation has acknowledged necessity for the support and involvement of its employees and suppliers for developing environmental awareness, capability and contribution. The Qantas Group has acknowledged that its employees have to ensure compliance with international norms and the relevant laws. Specifically, the concentration should be upon optimising fuel, water, and electricity consumption; mitigating waste to landfill; and improving the sustainable procurement procedures[Qan14]. This emphasis on HR recruitment criteria would help Qantas to have a knowledgeable workforce that can adapt to the complexity of the contemporary situation. Moreover, the employees of this organisation are exhorted to persistently attempt to reduce the environmental footprint of its business. In order to achieve this outcome, impacts and risks to the environment are managed appropriately, and every effort is made to comply with the various environmental laws. Furthermore, the Qantas Group reviews and formulates its environmental strategy on a regular basis[Qan14]. As such, the long term strategy of the Qantas Group is founded upon the following. First, qualitative assessment and transparent reporting of its environmental footprint. Second, investment in fuel efficient aircraft and advanced technologies. Third, occupying the vanguard of fuel conservation and activities related to the management of airspace. Fourth, active participation in the efforts of the airlines industry to develop aviation fuel that is sustainable[Qan14]. Advanced technologies and fuel efficient aircraft would enhance the chances of Qantas to emerge as the most environmentally friendly airlines. Motivation, Remuneration and Benefits Employees of the Qantas group enjoy several outstanding benefits. Some of these are enumerated in the sequel. First, opportunities are made available for concessional air fare. Second, paid maternity leave is provided for 12 weeks, and unpaid maternity leave for a maximum of two years. Third, paid paternity leave of a week is provided. Fourth, employees are granted10 days of carer’s leave per annum. Fifth, there are salary sacrifice programmes. Sixth, employees can avail themselves of a comprehensive health and wellbeing programme. Seventh, a free employee assistance programme is in place. Eight, discounts are available with respect to a wide range of products and services[Qan154]. The above mentioned remuneration and benefits provided by Qantas to its employees serves to motivate them to attain outstanding success. Communication A vastly superior communication strategy enabled Qantas to communicate dynamically with its employees and assess the correlation between the latter’s contribution and overall success of Qantas. With regard to these initiatives, the management team had to undertake the introduction of an organisational culture that was better suited to the private sector. This task called upon the management team to communicate intensively with the employees, and to emphasise the correlations between their contribution and the overall success achieved by Qantas[Aus99]. Another important initiative of Qantas was the employee share ownership scheme. It urged the employees to assume ownership for their work. A direct association was made between the performance of the company and the remuneration provided to the employees. This scheme served to highlight the manner in which individual contribution at the workplace related to the performance of the company, and finally to remuneration[Aus99]. In addition, a holistic view of Qantas was endorsed by the employee share ownership scheme. In 1995, Qantas was privatised, which served to significantly improve its profitability. The enthusiasm and motivation of its employees had a substantial and significant influence in achieving this tremendous success. A major component of this transformation was the employee share ownership scheme[Aus99]. The National Business Bulletin’s survey of 1999, disclosed that Qantas was the de facto image leader of the Australian corporate sector. This pride of place has been occupied by Qantas for ten years consecutively. Pilots Experienced and skilled flight crews and pilots ensure the safety of the aircraft and the success of the airlines. As such, the Qantas Group employs flight crews and pilots who have adequate ability, experience, and talent to address any situation. These individuals are rewarded for their dedication, performance, and skills by being provided with dynamic career benefits. In addition, they are provided with outstanding training, facilities, and continuous support from their air company[Qan153]. Training, continuous support from the employer, rewards and dynamic career benefits accorded by Qantas ensure an efficient and innovative workforce that can deal with any situation. Training and Development In addition, the Qantas Group obtains its extraordinary training from Qantas College. The latter is a registered training organisation that imparts focused quality training. In addition, this institute plays a major role in the development of skills in the travel industry. This organisation incorporates a comprehensive talent programme that concentrates upon new graduate talent, senior management talent, and developing leaders[Qan154]. Qantas attaches considerable importance to training employees, in order to transform them into leaders and a skilled workforce in the aviation industry. Other Jobs at Qantas As an Equal Opportunity Employer, Qantas provides a workplace that is diverse, promotes several charities, and supports environmental initiatives. In addition, Qantas takes a keen interest in the development of the arts, sports, and the youth of Australia[Qan155]. Another innovation by Qantas is its paid Instagram content, which portrays poignant scenes of Australians returning home after travelling to other places[Her141]. This diverse workforce discloses Qantas as a dedicated Equal Opportunity Employer that caters to the needs of different cultures of its global clientele. Aviation Market Liberalisation The decade commencing from 1990, has been witness to important changes in the aviation sector of Australia. These changes were with respect to the policy and regulatory framework. In Australia, the Two Airline Policy was rescinded in October 1990. This resulted in improved service and enhanced price competition. In 1992, the barrier betwixt domestic and international airline services was removed. At the same time, multiple designation was introduced in the bilateral air service treaties of Australia. Multiple designation was instrumental in generating more liberal approaches, in the context of negotiation of rights. In addition, aviation specific restriction on equity investments between airline operators, in Australia, was abolished[Kai03]. This enabled Qantas to acquire Australian Airlines. Strategic Planning The airline network of Qantas encompasses more than 1,000 destinations in 149 countries, spread over Australia, Asia, Pacific, Americas, Africa and Europe. Its partnership with Emirates has resulted in the leading airline partnership in the industry. As a result, the customers of Qantas are provided with a continuous international network, exclusive frequent benefits and a travel experience that is among the best in the industry[Qan15]. The Qantas Integrated Safety Management System (QISMS) consists of several Qantas Group polices, operational norms and programmes, and safety measures relating to the environment and the people. The QISMS is applicable to all the activities, employees, and sites of the Qantas Group. It has to be complied with in joint venture operations and activities, wherein the management responsibility is vested with Qantas[Qan09]. In addition, the pilots and flight crew of the Qantas Group of airlines possess exemplary skill, training and commitment. This provides the passengers with a safe and incident free journey. The selection of pilots by the Qantas Group airlines is on the basis of their talent, experience, and the capacity to address any untoward situation[Qan153]. These pilots are recognised and rewarded for their performance, dedication and skills, via active career progression, superlative training, facilities and continuous support. The Development of a Change Strategy in Qantas Between 1989 and 1993, Qantas had to address a number of issues that emerged from downsizing in 1990, the enterprise agreement of 1991, and the merger with Australian Airlines in 1992. However, Qantas negotiated in a brilliant manner with the unions and ensured that no significant dispute emerged from these issues. The changes to the workplace were based on industrial agreements[McD15]. This company regarded the training of employees as being critically important for providing exemplary customer service. In order to improve the efficiency of its employees, Qantas commenced an in-house MBA programme for its senior managers. At the same time, a postgraduate diploma programme for middle managers was implemented[McD15]. Thus, tangible skills were imparted and at a very low cost. Jetstar In May 2004, Jetstar had been established. It constituted a budget airline of the Qantas group. The objective of this group was to counter the threat posed to its profits by its competitor’s launch of the Virgin Blue carrier in 2000. The application of a dynamic choice mode of consumer preferences proved to be of great benefit to Jetstar, a subsidiary of Qantas [Rob121]. This enabled Jetstar to earn profits in the low-cost carrier area of commercial aviation. In order to improve its position, Jetstar had to change its pricing formats, service design, and develop effective communications. This required knowledge regarding the comparative position of Jetstar and the manner in which drivers and perceptions changed across the population. As such, it was necessary to continually comprehend the market and thereby evaluate customer needs and develop a strategy to address the same[Rob121]. A dynamic choice model based on these considerations was developed and implemented. The results were astonishing and Jetstar achieved a market share increase of 29%, in the very first year of application of the strategy proposed by this model[Rob121]. By the year 2009, Jetstar was contributing substantially to the profits of the Qantas group, and in the absence of Jetstar’s contribution, the Qantas group would have posted a significant financial loss[Rob121]. In addition, the developing competitive pressures have caused Jetstar and Qantas to resort to specific employment relations strategies. Thus, Qantas has transitioned from the ‘high road’ employment relations model to a model that incorporates the ‘high’ and the ‘low road’ approaches. Qantas has commenced to provide above average levels of training to employees, with a view to ensuring superior dedication towards the goals of the organisation[Sar13]. In a similar manner, Jetstar has started to distance itself from the ‘low road’ approach to employment relations. This approach had excluded trade unions and minimised costs. A negotiated collective agreement had been made with the Australian Federation of Air Pilots by Jetstar, in anticipation of a new regulatory regime[Sar13]. Qantas Marketing Analysis In order to achieve commercial success, Qantas established a new board and management group. This novel strategic step elevated the status of Qantas to further improve its position. In the year 1993, a new Board and management group had been installed. The priority of this new management had been to transform the airline into an organisation that was driven commercially. The norms to be adopted by it were to be determined on the basis of its performance with respect to the major Australian companies and foreign airlines. While engendering this change, the management of Qantas had to envisage the following tasks. First, it had to implement a sequence of improvements in the products, services, and operations of the company. Second, it had to alter the organisation culture[Aus99]. In order to improve customer services, the staff was provided with a series of training programmes and other benefits. Qantas experienced continuing improvements, on account of privatisation. Some of these were the introduction of yield management systems and computerised reservation. Moreover, there was an introduction of a disciplined cost reduction and avoidance programme, while preserving the reputation of Qantas for safety. The employment of competitive tendering assisted in improving service and reducing costs in several of the critical business areas, such as, airports, security, and in engineering and maintenance[Aus99]. Qantas Frequent Flyer Qantas’ Frequent Flyer policy is another innovative strategy that has rendered it much more customer friendly. In the year 1987, Qantas Frequent Flyer was launched, and over time it became extremely popular with the passengers. Qantas points had been earned by over 10 million members, via hundreds of partners. The goal of Qantas had always been to acknowledge and reward its members, whilst simultaneously generating value for its partners. During the past five years, the membership to Qantas Frequent Flyer has increased rapidly. As of the year 2013, these members had earned billions of Qantas Points and redeemed millions of rewards. In 2014, new partners and redemption options had been incorporated[Qan141] .This has increased the number of members significantly. In addition, Qantas has adopted employment relations strategies that promote dynamic bargaining with trade unions. These strategies circumvent collective agreements with trade unions by outsourcing some of the functions, in order to reduce costs. A hybrid employment model has emerged from the efforts of Qantas to restore wage rates and conditions ‘back to market’[Sar13]. As such, several Enterprise Bargaining Agreements were negotiated between Qantas and the trade unions. Since, 1992, Qantas has been successful in these negotiations. The successive agreements have placed considerable emphasis upon improved flexibility and the adoption of measures to improve productivity. There has been a tangible effort on the part of Qantas to communicate directly with the staff[Coo112]. The aim has been to improve the commitment of the staff towards performance, in order to enhance job security. Performance since Privatisation Subsequent to privatisation in 1995, Qantas has achieved significant success. This can be largely attributed to the enthusiasm and motivation of its employees and their keen interest to ensure the commercial objectives of the company. Another major contributor to this singular success has been the employee share ownership scheme. The outstanding success of Qantas has been discussed below. As a consequence of the employee share ownership scheme, Qantas achieved tremendous success after privatisation. Such success has been realised by Qantas, in the areas of financial performance, industrial relations, customer satisfaction, and productivity. The success of this scheme stems from the interlinking that it engenders between employee remuneration and the airline’s performance. As such, this is a very effective long term strategy, and it will be of great usefulness, as customer expectations and competition levels increase[Kai03]. As such, this is a very effective long term strategy, and it will be of great usefulness, as customer expectations and competition levels increase. Financial and Operational Performance A perusal of the above tabular display of results demonstrates that the operating revenue of Qantas increased by 13.5%. Moreover, the operating profit and value earning per share increased by 49%. Furthermore, there was an increase in productivity to the extent of 13%. These results were achieved in 1998, and the comparison was with regard to the results of the year 1995. The Asian financial crisis did not harm Qantas, which successfully improved its profitability[Aus99]. These results have to be viewed in the backdrop of the dismal performance of the majority of the other Asian carriers, during that period. Conclusion The contemporary position of Qantas as a leading Australian brand and airline, ensues form its reputation for providing excellent safety, operational reliability, maintenance and engineering, and customer service. Moreover, Qantas enjoys the reputation of being one of the largest employer in Australia. Attributes, such as safety, maintenance and reliable customer service have transformed Qantas into one of the leading airlines of Australia. The Qantas Integrated Safety Management System, entails several policies and programmes, which are aimed at the safety of the environment, as well as that of the customers. The statistics with regard to Qantas’ financial performance from 1995 to 1998, reveals that there was an increase in the operating revenues. In addition, there was improvement in profitability, despite the Asian economic crisis. The reasons for this success are innovativeness and commitment towards the safety of passengers, and its campaigns for the benefit of its partners. The active engagement of its employees and committed performance have rendered Qantas extremely strong in the industry. Qantas has made its employees comply with international norms and related legislation. Environment sustainability is another initiative undertaken by Qantas for protecting the environment. It implemented the employee share ownership scheme, in order to make its employees accountable for their works and the profitability of the company. It can be surmised that uncompromising commitment towards safety, employee involvement in ownership, and innovation to adapt to changing circumstances have made Qantas a leading company and force to reckon with in the airline industry. List of References Qan15: , (Qantas Airways Limited, 2015), Qan151: , (Qantas Airways Limited, 2015), Qan152: , (Qantas Airways Limited, 2015), Far15: , (Farrukh, 2015), Mon141: , (Monash University, 2014), aas12: , (aashwin, 2012), Luc01: , (Lucas & Edkins, 2001), Qan154: , (Qantas Airways Limited, 2015), Qan14: , (Qantas Airways Limited, 2014), Qan154: , (Qantas Airways Limited, 2015), Aus99: , (Australian Parliament House of Representatives, 1999), Qan153: , (Qantas Airways Limited, 2015), Qan155: , (Qantas, n.d.), Her141: , (Herbison, 2014), Kai03: , (Kain & Webb, 2003), Qan09: , (Qantas Group, 2009), McD15: , (McDonald & Millett, n.d.), Rob121: , (Roberts, Danaher, Roberts, & Simpson, 2012, p. 43), Rob121: , (Roberts, Danaher, Roberts, & Simpson, 2012, p. 44), Rob121: , (Roberts, Danaher, Roberts, & Simpson, 2012, p. 50), Rob121: , (Roberts, Danaher, Roberts, & Simpson, 2012, p. 51), Sar13: , (Sarina & Lansbury , 2013), Qan141: , (Qantas Loyalty, 2014), Coo112: , (Cook & Head, 2011), Read More