The dynamics of employment relations in British Airways - Essay Example

?Executive Summary The project brings forth the dynamics of employment relations in British Airways. Analysis of the present industrial relationship in the organization reveals poor bargaining power of employees which leads to the frequent occurrence of organizational conflicts. One of the prominent conflicting issues is that of the cabin crew and their demands with regards to payments and work structures. The attempts made by the management to withdraw pay travel compensation towards employees participating in strikes also led to conflicts between management and trade unions. Workers have consistently engaged in strikes which has incurred huge losses for the company. It has been recommended that management must incorporate greater participation and empowerment of employees in decision making. This can be done throughout all networks of British Airways through regular meetings and workshops. Employees can be given the freedom to give their views about work procedures. Also in case of incorporating changes it is essential to have the confidence of employees in order to meet their demands. Table of Contents Executive Summary 1 Introduction 3 Findings 4 Employment Relations in the organization 4 Suitability of employment relations with current and emerging trends 5 How employment relations help drive organization performance 8 Organization’s evaluation of employee engagement 11 Recommendations 12 Action Plan- Design of practices that enhance, measure, and monitor engagement and outcomes within the organization 12 Conclusion 15 Reference 17 Bibliography 18 Introduction Employment relations refer to the collective and individual dimensions of labour and the associated buying and selling of this labour power. However, fundamentally the definition of employment relations does not remain restricted to the field of trade unions, government agencies and employer’s associations or processes of collective bargaining; it rather focuses on employment relationships. Poole (1986) has rightly defined the scope of employment relationships as a discipline concerning the systematic and organised study of all the aspects of employment relationships in the organizations. This relationship is generated when an employee sells his capacity of work in exchange for wages and other benefits. It also considers the potential disagreement between employees and employers and considers the broader context in which organizations operate, influence of the broader nature of economic activities, analyses the basis of conflicts and accommodations between employers and employees and develops interdisciplinary approaches based on ideas and concepts derived from sociology, psychology or even economics (CIPD, 2011, p.2-3). This assignment analyses the various employee engagement strategies and employment relations strategies in British Airways and the associated policies and practices implemented by the organization. This is done in the context of suitability or fitness of these strategies with the present and emerging trends of business. The use of these strategies and their impacts in driving organizational performance and productivity are analysed in the project. The project also analyses whether and how British Airways evaluates the performance of its employees. Based on this analysis suitable recommendations are provided with regards to the current employment relationship strategies in the organization. This is done to ensure they are strategically beneficial for the organization and are cost effective too. Finally an action plan is provided with clearly defined processes and practices along with the likely outcomes they could generate for the organization. Findings Employment Relations in the organization British Airways began its existence within the public sector and had majority of its characteristics in tandem with employment relations of the public sector organizations. The organization was highly unionised and recognised sixteen separate trade unions. One of these was BALPLA (British Airlines Pilots Association). This union particularly emphasised on the strategic influence of the environment on British Airways. Additionally the organization was also known for it’s well established and distributed collective bargaining framework having British Airways as the major player on the side of the negotiating body, the NJCCAT and also with the consultative forum at the company level. Collective bargaining in British Airways has always been a complex, fragmented and sectional. The approach of the management towards employees has been defined by Blyton and Turnbull (1998) as being highly pragmatic and opportunistic. However, during the 1980s the organization realised the need for changing its strategic focus and also ensured to remain in close association and cooperation with the organization’s unions. It tried to incorporate a cultural change within the organization and for this it required cooperation of the unions and thus tried to maintain fair relationships with them. The strength of collective bargaining in the company gets reflected through the fact that during the period of strategic change it was essential for the company to operate through a dual arrangement, consulting and communicating with the unions and staffs in order to ensure their support and cooperation. The company tried to bring about a change in its long established and traditional forms of union based communication channels. Thus during the 1980s efforts were directed towards changing the employment relations strategy in the organization along with reorganization of collective bargaining of the company too. The organization made efforts to create a better working environment after the cabin crew dispute. This was important to gain competitive advantage for the company through the provision of quality services and ensuring good customer relationships (Upchurch, 2009, p.2). The high performance workplace paradigm created an environment which was encouraging towards high employee productivity. It seeks to create an environment which is socially responsible and nurtures positive corporate branding too. The organization operated through three trade unions which represented colleagues through the entire company’s business. The idea was to work collaboratively and constructively with colleagues as well as their representatives with the aim to improve performance and productivity. The company implemented new working practices at the terminals. This was successfully done with efforts to direct the colleague’s engagement with the involvement of the company’s recognised trade unions. Another key aspect of the feature was the incorporation of local incentive plans for the terminal jobs (British Airways, 2009, p.7). Suitability of employment relations with current and emerging trends Industrial relations in British Airways have been subject to continuous change because of the turbulent conditions and business environment in which it works. Also with the changes in the labour market conditions it has been compelled to restructure its industrial relations strategies. With the resignation of Bob Ayling, the Chief Executive of the company it was essential for British Airways to restructure its strategies. The company attempted to incorporate a job cut involving around 60000 redundancies. This called for entering into ‘partnership’ arrangements with the trade unions of the company (Eiroonline, 2000). Industrial relations also fell short of meeting cost standards during the 1980s when the organization incurred tremendous losses. It also lost a great deal of its reputation as a reliable airline and its costs exceeded more than most of its competitor airlines. The company prepared for privatisation under the Conservative Thatcher Government which primarily seeked to develop the human resource management practices of the company. This was coupled with a profit linked pay scheme and team working and team building. It also implemented the sustained cost cutting program which was known as the ‘survival plan’. This confronted with opposition with the organization’s trade unions and kept them from participation with the changes. Even though the organization tried to improve relations with the trade unions through continuous, open and regular communications it failed to gain their motivation and cooperation. Collective bargaining was not used as an instrument in the process and unions realized that they would end up being in disadvantageous positions in the process. The management’s attempt to disallow collective bargaining for ensuring cooperation from the trade unions seems to be a failure (Eiroonline, 2000). Employment relationships in British Airways have been a combination of both sustainable practices as well as short term non sustainable practices. Since its creation through the merger of BEA and BOAC during the early 1970s, the organizational culture of the company has been materialistic and bureaucratic in nature. Employee relations were such that workers had little or no bargaining powers which tended to exploit them. As a result employees tended to remain frustrated with their positions and terms in the organization which reflected through their work performance and productivity. Passengers gradually experienced poor service quality from its company’s employees which affected British Airway’s productivity and performance in the market. It gradually lost its competitive position to some of the new arrivals and competitors. Thus it is seen that employment relations in British Airways have been inappropriate for adapting to the changing business conditions and circumstances. In fact the existing employment relationships can be attributed for the loss in the company’s position in the market substantially (Upchurch, 2009, p.3). Some of the previous industrial relations strategies taken by the management of the company has been particularly destructive and has deteriorated the competitive position of the organization considerably. For example, in 2005, under the decision of Gate Gourmet, a wildcat action was undertaken the organization’s trade unions. In this the decision to not renew contracts of the 670 numbers of workers was taken and they were also replaced with agency staffs. This created a strike by the unions, which is estimated to have cost the company around ?30 million and created disruption for as many as 100,000 numbers of passengers. British Airways even ended up getting involved in civil rights dispute when one of its employees was forbidden from wearing a necklace which happened to be a religious symbol though it was not a cross. This shows poor framework of employment policies of the organization which tends to take away the minimum rights of employees. Because of poor bargaining power of employees, unions have remained indifferent and uncooperative of the company’s policies which have indirectly great loss for the company in terms of poor productivity and high costs. British Airways tried to implement salary changes within its workforce. Relations between the organization and Unite have also been turbulent. Cabin crews threatened to implement a strike because of this and the management was compelled to call off the strike immediately. This also generated a loss of ?8 million. The ballot of strike actions received high degree of support. This created a slight change in the employment relations in British Airways. Management tried to provide greater participation of union through negotiations in order to generate confidence. Consistent efforts to undermine unions and union activities from the part of the management have failed and have created loss for the company in the long run. Thus it is seen that employment relations strategies have been neither productive nor reliable. In the emerging global labour market, workforces have been gaining greater support and participation in management decision making. However, employee participation and empowerment in British Airways seems to be very low. Thus poor bargaining powers coupled with low empowerment for employees and low participation in the decision making have been characteristic features of employment relations in British Airways which have accounted for its huge loss and low productivity in the competitive market (Upchurch, 2009, p.4). How employment relations help drive organization performance Despite the challenges faced by British Airways, it has been instrumental in generating improvement in operational performance by restructuring its employment relations strategies. This included creating new work practices in the terminals for providing between work culture and environment for the workforce. One of the major features of this agreement was to engage the participation of colleagues and involvement of the company’s trade unions. Better employment relations were also established through implementation of local incentive plans for many of the terminal based jobs. This inevitably made a difference to the performance levels of employees. Better work conditions coupled with better wage and salary structures and greater empowerment of employees in the functioning and operation reflected through better performance levels and productivity. The company continues to work hard towards fostering positive relationship with the representatives of its flying community. These relations would play the key role in future while handling crisis and tackling challenging circumstances for the company (British Airways, 2009, p.41). The organization continuously remains in contact with unions through regular meetings to keep them informed about the developments and also to diffuse problems and challenges at early stages. The organization’s positive employment relations attempts get reflected through the agreement with pilots in the year 1999 which promised them to provide job security in exchange of accepting changes in work procedures and practices with the idea to improve productivity of the organization (Eiroonline, 2000). Changes in employment relations were brought about with the idea of creating a high performance business which could be possible only through the creation of an inspiring and rewarding workplace in which talented people could perform to their best abilities and meet the needs of customers and society at large. A high performance leadership system was also incorporated which identified the right talent for leaders and provided them with the right tools and infrastructure for continuing development. In 2009, the “Dignity at Work” procedures were started for the purpose of tackling harassment and bullying at the workplace through internal mediators. One of the most important components of its industrial relations approach was incorporation of targets which needed to be fulfilled by all departments and all employees were required to complete the company’s online training course (Upchurch, 2009, p.5). British Airways have particularly tried to implement an organization-driven employment relations approach. This approach has been particularly effective in improving organizational performance and productivity. In this the industrial relations specialists have been removed from the general human resource structure of the organization and responsibilities of employment relations have been rested on the line managers. A conventional style of management cognizant of autonomy of trade unions would help to predict the extent to which managements could negotiate with unions with regards to any change and also the willingness to refer to a third party for arbitration or mediation. This implies regular consultation between staffs and management regarding operational feasibility towards the proposed changes within the regulated environment (Upchurch, 2009, p.6). The flight consultative arrangements have been particularly effective in removing barriers and hurdles in services which caused disruption in services because of bad weather conditions, volcanic ashes. The management’s attempt to resolve disputes regarding reduction of costs and changes in wage structures and working conditions could be settled peacefully in this process. New working arrangements were implemented for the cabin crews. The huge disagreement which rose between the unions representing cabin crews and the management could be resolved considerably through this process (Upchurch, 2009, p.6). Some of the steps taken by management included creation of a new and fresh fleet of cabin crew staffs, removal of seniority and increment based pays, the incorporation or introduction of performance based and merit based pays and also restructuring of the line of authority of the cabin crew staffs. With the introduction of the new set of industrial regulations, policies and structures and providing greater freedom of opinion to the trade unions and allowing greater participation from their side, the management could reduce major barriers existing between them and the unions. Further work processes were streamlined and wastages and hurdles could be removed to a considerable extent. This reflected through greater efficiencies and progress in the functioning of the company and better delivery of services towards customers. Employment relations have been particularly effective in drawing up organization performance and productivity (Upchurch, 2009, p.6). Organization’s evaluation of employee engagement British Airways has been a depiction of poor employee engagement program. One of the major efforts made by the organization in this context is the check in wildcat strike in which a very friendly atmosphere of workers was transformed into a group of resentful militants overnight. This happened because the company wanted to implement to implement a computerised staffing system. Even though the system which existed at that time was bizarre, yet it was efficiently run by the staffs themselves. Even though they were paid enough, they remained loyal to their employer as they were extremely content with this flexibility in the system. Staffs had created an arbitrage system in which if one of them took a leave or required a scheduled time off, they would call upon some other staff that would be available to take over their shift. The system was disorganised but worked well for the organization. However, British Airways felt that the management had lost control over their staffs completely. Poor communication system coupled with lack of understanding triggered a deadlock in the work processes leading into a huge strike posed by employees. Employees worked for very wages just because the system offered them great flexibility. However, British Airways took away this flexibility from them and triggered the occurrence of strike in exchange. Poor employee engagement strategies on the part of British Airways get revealed through the fact that implementing a change in the system was not communicated to employees beforehand. Employee’s views or suggestions were also not attained in the process. It was essential for the management to communicate the changes to employees before implementing them. Lack of scheduled meetings between unions and managements or workshops on the new work procedure designs depict that the company has employed minimum employee engagement programs. A large majority of the workforce in British Airways currently remains disengaged or alienated in the present approach taken by the management. An important aspect of employee engagement is the fact that people value and put respect to the work that they do and also enjoy the same for their success in the organization. However, British Airways has a history of not allowing their workforce to be placed in their choice of activities and implementing procedures strictly laid down by the management. This has created resentment among them and compelled them from staying disengaged from their regular activities. The resulting effect shows through falling performance and productivity of the workforce and the organization at large. Employee engagement necessarily means that it is essential that before implementing any change the management must provide a direction and guideline to the workforce to lead them through the change. Otherwise employees are left disengaged and aloof from the organization (Smith, 2008). Recommendations Action Plan- Design of practices that enhance, measure, and monitor engagement and outcomes within the organization The first recommendation is to improve conditions at the workplace for British Airways which have been considerably poor since the last few years. The company’s attempt to introduce dignity at the workplace can be further upgraded and monitored continuously. Under this strategy each and every department can be rested with targets to ensure accountability of the senior level members in particular. The organization can lay down a detailed and range of mechanisms for resolving organizational conflicts arising at the workplace and prevention of unacceptable behaviour from employees. Mediation can be used for handling workplace conflicts between employers and employees. The company can employ and mediators and harassment advisors for the purpose of handling relationship issues at the workplace. Harassment advisors would have the role of offering advice, guidance and support towards colleagues who were experiencing bullying and harassment at the workplace. They would primarily aim to resolve such conflicts informally. Additionally regular meetings must be set between unions and management for the discussion of organizational strategies and for embedding the culture which supports principles of dignity at the place of work. One of the most frequent causes of conflicts between employers and employees at British Airways is on safety and security issues. Thus one of the main priorities of the management would be to bring safety for employees. A safety management system can be put in place for supporting the company for complying with the all the relevant regulations. This must also be supported by a comprehensive monitoring system which would be responsible for reporting all the safety incidents and take such actions which are necessary. A corporate safety plan would be set and implement continuous improvement targets. The performance of the plan would be continuously reviewed in meetings and monitored (British Airways-1, 2010, p.41). British Airways can particularly engage and implement an employee engagement program. This can be achieved only through systematic and correct application of skill, knowledge, resources aimed at delivering the overall business strategies of the organization. It must also be aimed to create a modern and contemporary workforce where change can be embedded into the culture. It is crucial to develop and train responsible staffs and make them recognise their responsibility towards the brand known as British Airways. Employees must realise that they would have the job only if they learnt to put forth their customer’s needs before their needs. Their primarily responsibility would be to serve the interests of customers and catering to their changing needs. Particular emphasis could be provided for resolving conflicts of cabin crews and avoiding such conflicts further in future. Cabin crew are supposed to be the most crucial and important front office staffs in any airlines operation in terms of the satisfaction of customers and corporate brand experience. In fact their aesthetic and emotional labour is said to be the central point of an airline’s relationship with customers. They are not only responsible for determining the customer’s experience but also the willingness of the customers to avail the airlines experience repeatedly. Thus it is important that the decisions of cabin crews must be considered in case of any changes in wages or working conditions. Considering the demands of cabin crews could be more beneficial than confronting opposition from their side in the forms of strikes which could incur huge loss for the organization. The provision to pay travel concessions for staffs in Unite participating in strikes could be maintained as it spread chances of conflicts in other areas as well. It is important to realize that undertaking strikes fall under the compliance of industrial relations in organizations and it is not anything illegal. Disciplinary actions were taken by British Airways against people taking part in strikes. It is recommended that such disciplinary actions be withdrawn and must be prohibited in future too. Instead of taking disciplinary actions against them, it is important that British Airways considers their proposal. It is also important to negotiate with them with regards to changes in work structures and conditions. Instead of imposing restrictions it is essential that attain their commitment and loyalty towards the management. Change in wage structures can be replaced with linking pays with performance. This would help to ensure that performance standards were high and maintained in the organization. Performance based pays would not only help to attain and improve work performance of cabin crews but also motivate them to perform better. An incentive system could be incorporated within the salary structures which would be based on targets. This would ensure high motivation level of employees and also better performance and productivity in the organization. Employees must be made to feel recognised within the organization. Employee engagement programs scan be conducted through regular workshops and meetings in which the management would discuss with the trade unions regarding the organization vision and the direction they were seeking to proceed towards. However, workers’ views, advice and participation must be attained during such discussions. It must necessarily be a two-way discussion in which employees can be free to put forth their ideas before the management (British Airways-1, 2010, p.41). Conclusion Employee relations at British Airways have always been in conflict since the inception of the organization. A wide ranges of incidents and the consequent actions taken by the management show failure of the organization to employ favourable employment relations practices in the organization. This has resulted in poor performance and low productivity of employees and the organization at large. Initially the organization operated through a large number of trade unions under which workers enjoyed participation, empowerment and flexibility at the workplace. They felt recognised in the organization and valued too. However, the system of activities gradually transformed and the management tried to inflict restrictions among the workforce which ended up in strikes, costing the company huge losses. Inadequate and insufficient meetings with trade unions on changes in work structures or norms at the workplace are characteristic features of the company. Workers remain uninformed about the decisions taken by the management which leaves them disengaged. This was mainly due to the fact that British Airways was running at losses and there was a need for making changes in the organizations culture and structures. However, this was not possible without the participation and empowerment of employees. An attempt to do so without the willingness of employees generated a resentful workforce, poor efficiencies and organizational conflicts. It is recommended that the management enters into peaceful negotiations with trade unions regarding work related issues and ensures meeting the workers demand in exchange of their confidence and participation in the changes. Regular meetings and workshops must be incorporated which would keep the workers well informed and updated about the management’s decisions and also allow them to put forth their views before the management. Moreover, instead of implementing changes in wage structures it is recommended that a performance based system of pay can be incorporated. A pay scheme linked with performance would not only ensure high productivity level of employees but also motivate them. This would reflect through the organizational performance and productivity too (Johnson, 2004, p.78). Reference British Airways. (2009). The way we run our business. [Pdf]. Available at: http://www.britishairways.com/cms/global/microsites/ba_reports0809/pdfs/Workplace.pdf. [Accessed on April 11, 2012]. CIPD. (2011). The Employment Relationship. [Pdf]. Available at: http://www.cipd.co.uk/NR/rdonlyres/333391D9-A8E3-4AC7-A4E1-50B8ECE66E38/0/9781843982685_sc.pdf. [Accessed on April 11, 2012]. Eiroonline. (2000). Industrial relations at British Airways - setting a new course?. [Online]. Available at: http://www.eurofound.europa.eu/eiro/2000/04/feature/uk0004168f.htm. [Accessed on April 11, 2012]. Johnson, M. (2004). Rules of Engagement. CIPD Publishing. Smith, D. (2008). Spending on employee engagement set to rise in 2009. [Online]. 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