Gulf Air - Organisational Behaviour and Human Resource Management - Example

Organisational Behaviour and Human Resource Management Name Class Unit Executive summary Gulf Air is the national airline for Bahrain established in the 1950s. This report gathers and critically analyse data for Bahrain air and draws conclusions and recommendations. The airline has an elaborate employee motivation system based on rewards and incentives. Research shows the airline uses Maslow’s pyramid hierarchy of needs, Adams equity theory, Hertzberg theory and expectancy theory in their motivation. The main problem with the airline motivation system is overreliance on financial incentives. This can hurt the firm profits and also affect motivation negatively in some cases. There is also need to enhance employee satisfaction and their multiple needs. This implies that there is still room for improvement in HRM. The airline incentives include payment by result, skill based pay and performance related pay. The airline has put in place bonus system as well as pensions for their employees. It’s recommended for the airline to reduce pat based incentives and enhance their profit sharing incentive system. The airline has made great steps in human resource management. There has been movement from personnel management to modern HRM. This is through valuing the employees as assets and motivating them. The airline has encouraged employees to join unions and reconciled HRM and Industrial relations by addressing the challenges. Training and development and resourcing are well implemented under the HRM. Key Performance Indicators are finance, customers, operations and colleagues. The airline has been able to keep their employee motivated and well developed for their career. There is need for improvement in HRM through adoption of Guest model. Use employee training and development should be in a manner that employee’ skills and abilities are improved. The airline should increase non-financial incentives to ensure employees are fully satisfied and risk of loss is reduced. Table of Contents Executive summary 2 Table of Contents 3 HUMAN RESOURCE Management 4 Gulf Air HRM 5 1. Motivation 5 1.1. Gulf Air Motivation Theory 5 1. 2. Problem Identification 10 1.3. Rewards and Recognition 11 1.4. Attainable Goals 12 1.5. Recommendation 12 2. Human Resource Management 14 2.1. HRM & Personal Management 14 2.2. HRM of Industrial Relation 15 2.3. HRM in Gulf Air 16 2.3.1. Training & Development 16 2.3.2. Computation 17 2.3.3. Performance or KPI 17 2.4. Resourcing 18 2.5. Development 18 2.6. Motivation 19 2.7. Reward 19 2.8. Recommendation 20 3. Conclusions 21 4. References 23 INTRODUCTION Gulf Air was founded in the year 1950 and is the national carrier for the kingdom of Bahrain. Gulf air has been able to establish itself as a strong brand being the pioneer airline in the region. The main objective for gulf air was to connect Bahrain with Middle East and the rest of the world. The airline has been committed to innovation and creativity with high commitment to the latest aviation technology (Gulf Air, 2016). Human resource is the most important asset in an organisation. This is due to fact that human resources give an organisation a competitive edge. Human resource management is essential to the survival of the organisation (Chan, Shaffer and Snape, 2004). Gulf air has been in the forefront in the management of their human resource. This is reflected by the airline good performance in the industry. This report analyses gulf air through analysing the means used to motivate the employees. There are recommendations based on arguments that are supported by theories. Through evaluating the HR activities at Gulf Air and considering the traditional and modern practices, the HR position is assessed. HUMAN RESOURCE Management Human resource management involves managing people in an organisation. The main aim is to maximise the employees’ performance. Human resource manager has a role of managing people within an organisation and keeping focus on policies and systems. The HR has a role of human resourcing, employee utilisation, perfoamcne and motivation, training and development among other functions (Wright and Boswell, 2002). Gulf Air HRM 1. Motivation Motivation refers to reasons that lead to a behaviour that is characterised by willingness and volition. There is intrinsic and extrinsic motivation. Intrinsic motivation involves; personal enjoyment, pleasure and interest. Intrinsic motivation has been the most desirable leading to better outcomes than extrinsic motivations (Frey and Osterloh, 2002). Motivation is essential for an airline to succeed. This has led to the airline using different motivational theories in their human resource management. The theories used are; Maslow pyramid hierarchy of needs, Adams equity theory, Hertzberg, reinforcement theory, Aldefer’s model and expectancy theory. 1.1. Gulf Air Motivation Theory Gulf Air has been able to motivate their employees leading to a great extent through different theories. Pay and conditions alone does not determine perfoamcne. Based on the needs theory, the airline has been motivating their workers. The airline ensures that they do not engage in practices which demotivate other employees. All employees are treated fairly to ensure that feelings of dissatisfaction and demotivation do not occur. The airline ensures that the employees are able to maintain equity between the inputs they bring to their jobs and the outputs they get. Fair treatment for all employees has created an environment where employees are motivated and fairness in co-workers relationship. The employees are not underpaid and their efforts are evaluated in a fair way at Gulf Air (Gulf Air, 2016). When employees feel that their inputs are well rewarded by the inputs, they become happy in work hence more motivated. When they feel that the ratio of inputs and outputs is less beneficial, they become demotivated. Hertzberg is one of the most compelling theories in motivation. The theory helps in splitting the demotivating factors from the motivating factors. Through use of Hertzberg theory, the airline has utilised seven principles. The principles are; removing some controls and ensuring accountability, enhancing accountability, assigning employees natural work units, giving employees additional authority, availing periodic reports to workers, use of specialised tasks and introducing challenging works in incremental manner (Herzberg, 1966). Fig.1, (Herzberg, 1966) The airline has realised that the employee performance is based on the guidance they receive. This is through learning process where employees are corrected when they make a mistake. The management has created a positive work relationship with the employees. This has led to better understanding in the organisation where employees are guided on the career path. The organisation has open communication channels which have created an open and safe working environment (Gulf Air, 2016). Gulf airlines utilises consultative leadership with an aim of motivating the employees. The leadership is goal oriented where employees are encouraged to actively participate. The leadership guides the employees towards attaining the goals in a consultative manner. The leadership has been commended for developing the workers talent and providing them with an appropriate working environment (Gulf Air, 2016). Based on the vroom expectancy theory, the main aim is to maximise pleasure and avoid pain (Isaac, Zerbe and Pitt, 2001). The efforts are separated from the performance and outcomes. Gulf air has designed their key job components to ensure that there is maximum motivation. Maslow theory states that people needs are based on a pyramid of hierarchies that is satisfied from the bottom to top. When there is unfulfilled needs in the lower of the pyramid, the person is inhibited from climbing to the next level of needs hierarchy. There are deficiency needs and growth needs. The deficiency needs includes psychology and safety while the growth needs includes self-actualisation and self-esteem. When these deficiencies are not well satisfied in the workplace, employee development is stifled. In the case of gulf air, it is clear that there is still a deficit in the deficiency needs. The airline has not been very active in providing the psychological needs to their employees. The main area where the airline has succeeded is enhancing self-esteem and sense of belonging which are the growth needs (Garg and Rastogi, 2006). Fig.2 (Isaac, Zerbe and Pitt, 2001) The management has a responsibility in ensuring that their employee’s deficiency needs are met. This implies that there must be safe working environment and adequate wages. This ensures that the employees are able to develop their full potential. When there is improper work environment, employees cannot develop to their full potential. This leads to frustration and reduced performance. The airline has worked in ensuring that there is job security through eliminating any threat of mass employees’ layoff. This has helped the employees to attain their higher growth needs (Gulf Air, 2016). In the workplace, the management has been recognising the varying needs for the employees. This is based on the Aldefer’s model where focusing on a single need at a time may not motivate the employees (Arnolds and Boshoff, 2002). Focusing on a single need at a time may lead to frustration regression principle which impacts the motivation (Garg and Rastogi, 2006). The airline has realised that if the growth needs are not provided to the employees there are chances that that will regress to the related needs. The airline has been utilising the reinforcement theory in their motivation. This is through rewarding behaviours which makes it possible to have repetition (Wright and Boswell, 2002). The employees are able to be rewarded based on their performance. The bonus packages that are offered by Gulf air are based on the employee performance. Of late, the airline introduced the incentive program where cash is used to motivate their employees. Through use of cash incentives, the airline has made it possible for employees to increase their innovation and creativity leading to higher productivity (Gulf Air, 2016). Fig.3, (Herzberg, 1966) 1. 2. Problem Identification Despite the success in the gulf air employee motivation program, there is still more room for improvement. The motivation program relies highly on the financial incentives to motivate their employees and their non-financial incentives are low. The airlines non-monetary incentives have been reduced while the monetary incentives have increased. This implies that the organisation utilises a lot of cash incentives. Research shows that monetary motivators do not last and employees tend to forget them in the long run. This makes Gulf Air to risk their employees’ losing motivation in the long run. The financial incentives are ruining the firm budget and can lead to high lose during the economic turndowns. If the firm reduces their financial incentives during the economic turndown, they risk their employees becoming discouraged and reducing productivity. Despite the airline commitment to meet their employee’s needs, there is still more to be done. The multiple needs of the employees are not fully met leading to risk of workforce becoming demotivated (Lauby, 2005). The employees’ sense of satisfaction needs to be addressed. 1.3. Rewards and Recognition Employee works hard and prioritises their actions based on the rewards they expect. Incentives are a great way to rewards the employees with an aim of encouraging them (Bowen, 2000). At gulf air, cash incentives are used to reward the employees’ efforts. The principle reward for the employees is salary as well as reward programs which are not part of the pay. This includes use of bonus system and pension schemes. Despite the use of the cash incentives at gulf air, the expenditure is high. There has been poor cost benefit analysis by the management on rewards and motivation (Bratton and Gold, 2012). Use of total reward system has been carried out at the airline where components such as learning and development are brought together with other aspects of the work to create a common benefit package. There is use of tangible rewards such as pay, bonuses and benefits. The intangible rewards utilised are learning experience and development though at lower level than tangible rewards (Lauby, 2005). The main aim of using the tangible rewards has been to maximise the positive impacts and enhance job engagement. Though use of total reward, it becomes possible to cluster different rewards to complement and reinforce each other. This has ensured greater impact, enhanced employment relationship, cost effectiveness, flexibility and talent (Wright and Boswell, 2002). The types of incentives used are; payment by result, skill based pay and performance related pay. Payment by result has come over wide criticism due to fact that it rewards quantity rather than quality. This may lead to reduced quality of service at Gulf air. Skill based pay involves giving employees pat based on the skills acquired. This leads to employees increasing their skills as they look for higher pay. The method encourages multitasking and flexibility in an organisation. In performance related pay, an employee is given a bonus for performing well in a task. This is based on measurable targets that are agreed by both the employer and the employee (Lauby, 2005). 1.4. Attainable Goals Gulf air can attain their performance goals through the right motivation methods. Employees are the main driver to attain the organisation goals. Gulf air goals have been based on attaining the best airline services and maintain their strong brand image. The airline has been working hard to attain its goals through human resource management. The airline continues to expand globally through addition of new destination and improving on their service delivery. The connection of Bahrain to other Middle East destinations and globally has been attained. The airline is operating one of the largest fleets in Middle East and world (Marvel, 2014). This has helped the airline to get connected in Europe, Asia and Middle Ease with over 25 countries destinations and a fleet of over 34 aircrafts (Gulf Air, 2016). 1.5. Recommendation It is important for gulf airlines to reduce their expenditure on financial incentives and utilise non-financial incentives more (Kumar, 2011). Financial incentive are closely tied to the firm budget hence affects profits. The management has to be very cautious with the monetary based motivation. The airline can implement programs that rewards employee based on non-monetary terms. This includes verbal compliments, acknowledgements and employee rotation (Bowen, 2000). The airline must understand that money will never be the ultimate motivator in an organisation. The management should reduce their bias on monetary rewards since the monetary motivators’ only lasts for a limited time and can also act as a demotivation (Romero and Kleiner, 2000). This is especially when the money as a reward is too high. It is important to note that as soon as money is predictable, it becomes an entitlement and hence not a motivator (Bratton and Gold, 2012). The management should not only think that motivation is only intrinsic and extrinsic. There is also a bias on the extrinsic rewards (Kumar, 2011). The airline should know that combinations of factors are required and not just one type of reward system. The management should make effort to combine different methods to come up with effective motivation. The failure of motivation can occur if the managers fail to identify the right method of motivating the employees. This implies that the airline management must work in recognising the right way to motivate the employees (Bowen, 2000). The airline needs to have a profit sharing scheme and also enhance information flow. The profit sharing method can be very successful since the employees will be working to increase the firm performance with an aim of higher profits (Tsai, Yen, Huang and Huang, 2007). The airline is also supposed to find the right balance between the company and individual based rewards. This is to ensure that employee’s do not feel unfairly rewarded (Frey and Osterloh, 2002). The rewards should be based on the individual performance to ensure there is fairness. Through use of more individual rewards in the airline which are linked to performance, it will become possible for the employees to perform specific tasks. Use of verbal and written acknowledgement is required since they are powerful motivators when applied well (Bowen, 2000). 2. Human Resource Management 2.1. HRM & Personal Management Human resource management is very crucial in an organisation. The role played by the human resource enables the organisation to gain a competitive advantage in the industry (Wright and Boswell, 2002). Gulf Air has been able to move from personnel management to human resource management. This has been attained in a gradual manner where some elements of personnel management are still seen in the current human resource management. Human resource management refers to a planned approach in people management with an aim of enhancing performance (Chan, Shaffer and Snape, 2004). The main aim of using HRM at gulf air has been to come up with an open, flexible management style where employees are motivated and developed to give the best to the organisation. To gain HRM at Gulf Air, there are main guiding principles in the HR department. The principles are; being a good employer, treating employees as the most valuable asset, recruiting and managing employees based on merits and management of staff as a responsibility of all in the management (Bratton and Gold, 2012). The main values at gulf Air are; being accountable, living within the airline means, managing for performance and developing a service culture. These values have made it possible to shape the culture of the organisation. The HRM has been able to bring the important values which include trust, teamwork and care (Wright and Boswell, 2002). This has made the airline to be considered as a good employer hence motivating the staff. Being one of the pioneer airlines in their region, gulf air utilised personnel management in their early phase. The airline has been moving away from PM through adopting a strategic view on managing the employees. This is through linking their HRM strategy with the corporate strategy. The commitment of employees is sought instead of their compliance. This is through use of rewards, training, appraisals and selection. Unlike in traditional PM management which is a domain for specialists, HRM has been highly owned by the managers (Chan, Shaffer and Snape, 2004). This is meant to foster integration in the airline. HRM has played a major role in the airline business strategy. This is through use of business strategy to determine the HRM strategy (Wright and Boswell, 2002). 2.2. HRM of Industrial Relation Gulf Air has made great steps in ensuring that the employees join the labour unions. The main aim has been to ensure issues of labour employment and organisation are addressed. The main unions are national labour Union of Gulf Air, Flight Attendants general trade union and Gulf Air Trade Union. The relationship between the HRM and IR has been faced by two concerns. The concerns are challenges of HRM to IR and the conflicts that occur between the two (Rao, 2010). The IR at Gulf air adopts a pluralistic outlook where the main relations covered are between the employer and employee and the employers, unions and state. The HRM has a unitarism approach between the management and employees. The pluralist outlook of the IR and unitarism outlook for the HRM has been posing some challenges. This has led to conflict of interests in some cases (Edwards, 2009). The airline has been working hard to reconcile the HRM with IR. The airline management has emphasized on the principle of fairness and equity. There have been advocacy for convergence of interests between the employers and employees. The IR has also been moving away from the adversarial roles towards collaborative relations. This has been mostly influenced by use of consultative procedures (Guest, 2011). 2.3. HRM in Gulf Air The HRM utilised at Gulf Air is between traditional and modern management with most of practices being in line with HRM instead of PM. HR department has been taking the roles of employee training and development, selection, motivation and planning among others. The airline has made great steps from the PM to HRM (Armstrong and Taylor, 2014). The employee is given the highest respect and treated as the most valuable asset. Majority of the policies by the HR are determined and developed centrally in the airline. The personnel in the sections are expected to implement the centrally agreed policies. The firm has also been adopting strategic HRM. This is especially in training, job appraisals and managing employees (Wright and Boswell, 2002). The airline has been able to achieve a lot through their HRM management. 2.3.1. Training & Development Training and development have been a major function of the HRM in the airline. This is based on the airline commitment to ensuring they have the best human resources. Human resources are the most valuable assets. The training programme is aimed at giving the employees systematic knowledge, attitudes and skills. The activity has helped the organisation a lot in effectiveness and profitability (Armstrong and Taylor, 2014). The airline conducts different employees’ development programmes for their manpower. Before training efforts are made to determine the employees’ needs in training. The program developed is in line with the needs which have already been identified (Lepak, Liao, Chung and Harden, 2006). The need for improved production has led to the airline to realise that they need to have effective training and employee development. The current employee training and development programme has led to development of competencies which includes human, technical and conceptual (Bratton and Gold, 2012). 2.3.2. Computation Gul air has set incentives apart from the basic salary. There is an incentive bonus plan that enables the employees to get a one week bonus after attaining the set target, two week bonus on break even and a monthly salary incentive when there is profitability. The amount given in the incentives is based on the firm performance in a given year. For example, an employee with a basic salary of $400 has bonuses added to the net salary (Gulf Air, 2016). The employee appreciation program is for the service staff. The staffs are awarded based on the nominations they get from the frequent flyer customers. The staff members who have the highest points are given a program prize. The actual value of the prize differs and is only disclosed to the service staff (Gulf Air, 2016). 2.3.3. Performance or KPI The airline key performance indicators are finance, customers, operations and colleagues (Parmenter, 2015). The finance indicator is measured using the operating margin. The airline has continued attaining a consistent strong financial performance for a long time. This has enabled the airline to provide adequate returns to shareholders and invest in future success. Customer recommendation is the measurement for the customer indicator. The recommendation has been used as a measure of success by the airline. This is through surveys which provide insights on customer views. Operations are indicated through the punctuality and Ready to Go. Use of robust operations has enabled the airline to meet their customers’ needs. This has created a cost effective airline business. Lastly, colleague involvement has been used to measure colleagues. The airline top performance is based on the engaged employees who are highly committed to their airline goals (Gulf Air, 2016). The employees are willing and ready to accept change to improve their service to customers (Bratton and Gold, 2012). This is enhanced through appropriate human resource management. 2.4. Resourcing This involves getting the right number of employees in the organisation with the right skills (Armstrong and Taylor, 2014). The HR department has ensured that the airline is capable of identifying and attracting the right employees. This is through analysing the resource and talent levels and coming up with plan. The airline takes into account the future demand, demographics and attrition (Bratton and Gold, 2012). There have also been extra strategies that manage sudden attrition in an airline. 2.5. Development The airline has a framework for helping their workers develop personal, organisational and knowledge skills. This is through the human resource development (HRD). The program involves employee training, career development, coaching, mentoring, organisation development and performance management (Wright and Boswell, 2002). This approach is aimed at developing the most superior workforce to ensure individuals are able to accomplish their goals and help the organisation to meet their set goals (Bowen, 2000). 2.6. Motivation As explained, gulf airline HR department have been committed to motivation for their employee. This is aimed at having the employee deliver the best results for the airline. The airline has utilised the theories for motivation such as Maslow’s and Hertzberg motivation theories. The airline has utilised monetary and non-monetary rewards. This is through bonuses, pay rise, incentives, and recognition. The airline has been working hard to ensure there is self-motivation among the employees. This is through creating a sense of accomplishment and achievement when employees attain personal and job goals (Armstrong and Taylor, 2014). The airline has been adopting public recognition of the best performing employees. 2.7. Reward The airline has a strategic system for rewarding their employees. The HR department addresses four areas of employee reward; benefits, pay, recognition and appreciation (Rynes, Gerhart and Minette, 2004). The elements are well aligned with the other corporate functions of the airline. The reward system is based on performance and behaviour. Performance is based on meeting the set goals while behaviour rewards those who have behaviours important to the company (Bowen, 2000). This includes those that enhance customer relationship. The reward system has contributed a lot to the airline performance. 2.8. Recommendation HR activities are highly related to the firm performance (Jiang, Lepak, Hu and Baer, 2012). This makes them a vital part in an organisation. Gulf Air HR activities require to be improved. The airline has to ensure that the HR systems used is in line with the firm competitive strategy. The symbiotic relationship that exists between the performance and HR activities must be maintained at all times (Marchington and Grugulis, 2000). The airline should use employee training and development in a manner that employees skills and abilities are improved. There is need to improve the employee motivation through adjusting the reward system (Armstrong and Taylor, 2014). There is need for the HR to improve employee satisfaction. This is through use of fair salary and goal oriented work (Rynes, Gerhart and Minette, 2004). There is also need for continuous skill development which will improve performance and ensure employee retention (Guest, 2011). There is need for the airline to develop a better incentive system. This is through additional incentives based on set targets. Currently, the airline has few non-financial incentives. There is need for non-financial incentives to be added which includes; flexible payments, job rewards and professional development (Lauby, 2005). The talent management programs must be tailored to enable the airline gain maximum output from the employees. The Guest model of human resource management can be very resourceful for the airline. This is through adopting the six analysis dimensions provided (Guest, 2002). It is evident that guest model of human resource management has not been well implemented by the airline. The airline is almost complete in their move from traditional PM management to modern HRM. This must be done with adherence to guest model to attain better results (Bratton and Gold, 2012). Fig.4, value of motivating factors http://chinalawflash.com/2013/12/10/law-management-and-retention-of-chinese-staff-doing-business-in-china/ 3. Conclusions Gulf Air has been able to make great strides in organisational behaviour and human resource management as analysed. The airline has been able to use different methods to motivate their employees. This is through use of monetary and non-monetary methods. The airline has provided their employees’ with a good working environment which has also helped in motivating them. It is recommendable for the airline to increase their focus on non-monetary incentives. This is due to fact that high focus on monetary incentives may hurt firm profits and also act against motivation. The airline has to continue moving away from PM to HRM in managing their human resource. This involves treating their employees as the most vital asset. There is also need to utilise the Guest model of human resource management. 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