Human Resources Management of Jet Red Airline Company - Case Study Example

Human resources management Case Study Report Name Professor Institution Course Date Human resources management Case Study Report Executive summary This report assesses the human resource challenges and issues that Jet Red Airline Company is facing, their corporate culture and how best these factors can be improved. Jet Red is an Airline company operating in Australia with intentions to expand in Asia. The company organized a board meeting involving top management to discuss various human resource factors affecting the company. Among the people present who gave their views on the situation at the company are the managing director James Miller, chief financial officer Abdul Safi, human resource director Nalena Shuresh, operations director Angela Wong and engineering director Nick Campbell among others (Stone 2013, p.50). Table of Contents Human resources management Case Study Report 2 Executive summary 2 Table of Contents 3 1.0 Introduction 4 3.0 Meaning of corporate culture 6 3.1 Red Jet’s corporate culture 6 4.0 Improving Jet Red employee engagement 7 5.0 Challenges and strategies 8 5.1 Expansions into Asia 8 5.2 Changing the corporate culture 9 5.3 Improving productivity 10 5.4 Reducing costs 10 6.0 Conclusion 11 7.0 Reference 11 1.0 Introduction In present competitive business industry, airline and tourism sectors remain the world’s fastest growing industries. As the change in the business platform, human resource managers are compelled to use different strategies to remain relevant and to sustain competition (Balogun 2006, p.31). According to Sturdy & Grey (2003, p.657) high cost of maintaining employees and others expenses has forced managers to cut the size of their workforce and look for other ways of reducing these expenditures further. The process of downsizing and also reducing employee’s salary and change in general has been met with resistance. This is what has also happened to Jet Red Airline Company, and it is from this perspective that report is drawn. This report assesses the human resource challenges and issues that Jet Red Airline Company is facing, their corporate culture and how best these factors can be improved. 2.0 HR challenges and issues identified from the case study With globalization in business arena, airline industry players like Jet Red Airline Company are facing various issues and challenges like such as high cost base, bureaucratic public sector culture, uncompetitive labor practices, high wages and salaries in the industry, resistant trade unions and political factors (Stone 2013, p50). According the managing director James Miller, Jet Red is facing higher cost base compared to their competitors, bureaucratic public sector culture full of inefficiencies, irrational thinking and complex policies (Stone 2013, p.50. Miller challenged the board that the company is highly unionized, a restrictive labor practices and high salaries in the highly competitive industry yet their performance is declining. He cautioned them that if the situation is not contained, the company will be facing bankruptcy. These issues were acknowledged by operations director Angela Wong and told the board that expand into the Asian market, cut the number of employees, do away with unprofitable practices, outsource maintenance and reduce company debt. Just as usual in any change process various stakeholders were expected to resist because job losses, poor work-life balance and lack of credibility. Human Resource Director Nalena Shuresh observed that trade unions are likely to lead on resistant on the argument that Jet Red Airline Company is paying less salary while forcing the joblessness (Stone 2013, p.50). Employee retention has normally been an issue which challenges human resource managers, that is retaining talented workforce who are satisfied enough to remain with the organization. However, techniques that HR employs to keep its employees need going the extra mile in ensuring that the workforce is completely engaged, keen concerning their work and recognized for the inputs to the success of the organization(Stone 2005, p.363). The engineering director Nick Campbell was also concerned with how the political situation may make the change process difficult to achieve (Stone 2013, p.51). He argued that the prime minister of Australia in his campaign promise to protect the right of trade unions and he’s likely to stand with them on the matters of employees’ lay-offs. Wilkinson et al (2004, p.303) argues that the political framework is one of the most difficult to assess, due to its powers to shape the platform of the employment relations and owing to its impacts on the other perspectives. In this situation the trade unions and employees were going to get the backing of the prime minister making the company not to enjoy the political context in Australia. 3.0 Meaning of corporate culture Corporate culture is defined as the collective values, standards, attitudes and beliefs that define an organization and its members (Cameron & Mora 2003). Corporate culture is based on organizational goals, structure, strategies to labor, clients, investors and entire society. Cameron, KS & Mora (2003) contend that frequently, corporate culture is shown, not specifically described, and grows logically over time from the collective attributes of the individual the organization hires. A company's corporate culture will be demonstrated in its dress code, office arrangement, the benefits, of the employees, hiring decisions, turnover, and treatment of employees and customers, customer satisfaction and other operations aspects. 3.1 Red Jet’s corporate culture Evident in this Jet Red case study is the managing director Miller’ indication to the company as a bureaucratic public sector culture, uncompetitive labor practices (Stone 2013, p.50) In addition, uncompetitive labor practices Jet Red has promoted less motivation at the company, less career development and less competition in the way both company and employees carry out their work. There is also poor work-life balance and high turnover affecting the company and this can be seen in the result (Stone 2013, p.50). The cost base and shares are increasing, employees are receiving better yet no good performance is being posted. According to Konrad (2006) “Mintzberg has emphasized the significance of value and reward as an ideological stimulus which motivate people to workplace”, on the contrary, at Jet Red employees are rewarded in terms of salary but not in terms of value. Their value of the employee to the company is not recognized and this is manifested with regard to lay-offs and less engagement. Un-engaged employees tend to be physically present during operations but in the real sense they are mentally absent from the organization (Konrad 2006). The workforce are less motivated and do not mind about their organization. They simply come to work to register hours. 4.0 Improving Jet Red employee engagement According to Wilkinson et al. (2004, p.303), "Employee Engagement is a considerable level of negative or positive emotional attachment of an employee to their work, organization and colleagues that deeply impacts their motivation to gain knowledge and perform at workplace". Culture of less involvement worries the human resource director Nalena Shuresh, and she says they need to engage their employees more so as to accept change (Stone 2013, p. 50). The involvement culture puts a higher value on satisfying the demands of the workforce, and the company might be attributed by a concerned, family-kind atmosphere. Wan (2007, p.307) claims that employee engagement forms part of workforce retention. This includes the classic contexts of organizational commitment and job satisfaction. To make certain of higher employee engagement in a company is not a task of putting together the best tools of operation but part of HRM which is about staffing, satisfying and motivating the demands of employees at work (Sandberg & Targama 2007). Majority of organizations focuses more on the monetary factor of reward as the key motivating element that improves employee engagement and commitment to an organization. As a manager of Jet Red I will use both traditional rewards, like compensation and benefits, but also combine it with rewards of emotional nature like individual growth, forming a high-performance group, serving for a common goal and recognizing employees for their achievements. As a manager I will explain to the employees why change is needed in the organization if the company is to remain in the business competition. In this process blame game for the bad performance is usually avoided because this can only lead to backlash (Sandberg & Targama 2007). The employees’ opinions will also be allowed so as to feel part of the company. Engaging them and also allowing their views will make sure they understand the problems the company is facing and why new systems have to be brought into place. Communication is a very important factor in running a success organization. In a company where there is normally a breakdown of communication there seems to be lack of coordination and understanding between management and employees (Balogun 2006, p.29). As a manager, I will review the communication channel so as to improve the relationship between managers and the workforce. 5.0 Challenges and strategies 5.1 Expansions into Asia Globalization enables international boundaries vanish and enlarging competition in different markets (Balogun 2006, p.33). Even as companies become globalized, they face various challenges that if not addressed properly and on time can force the company to close its distribution centers in other countries. Jet Red as one of the companies which intends to expand into the Asian market faces stiff competition, cultural differences, labor market challenges and technological challenges. Some of the strong competitors that the company faces are Emirates airlines, Dubai Air, All Nippon Airways, Air India and Virgin Australia among others. These companies have a well established capital base and loyal customers, and this will make it very difficult for Jet Red to compete. Therefore, even the company intends to reduce the number of workforce, they must retain the high performing ones and have the global mindset to attract the customers and deliver quality service (Stone 2005, p.363). On cultural diversity, strong engagement and training is needed to prepare Jet Red employees on how to handle the situation in the Asian market. However, one thing that stands out in the company is that they pay the best salary in the market. This serves as a motivation factor; what is needed now is to use emotional form of rewards which will increase motivation and hence high performance. In addition, they need to assure its employees on job security because even the ones remaining might not perform well at the global stage due to fear of job loss (Wan 2007, p.316). 5.2 Changing the corporate culture Changing organizational culture can be a very complex objective to achieve, not just due to the fact that culture is mostly implied and not communicated, but for the reason that once created, patterns, shared values and interpretations are hard to modify (Cameron & Mora 2003). This also includes the salary and terms at work. However, change is a slow but sure process. Therefore, in the corporate culture in organization like Red jet management must engage its employees on the steps that corporate culture change will be in motion. Balogun (2006, p.36) posits that the strategy of making change here is to explain to everyone involved what change is needed and what it implies to the organization. The management has also to communicate the corporate change by giving examples of where it has worked. 5.3 Improving productivity From the case study, all the board members have emphasized on the performance if they have to do well in the Asian market. The truth of the matter is that Red Jet has not been doing well despite paying the highest salary in the industry (Stone 2013, p.53). To improve, the employees have to be engaged and be reminded of the organizational goals and objectives. According to theory X, as human resource manager I will insist on the supervision, punishment and rewards as a way of improving performance. As the company taps into the Asian market, training required for employees to deal with challenges that may affect their performance. Red jet must create a people based culture and put into consideration the idea of everybody in the company for the general productivity. 5.4 Reducing costs With the rising cost of fuel airline and expenses companies must put different strategies to help reduce the expenditures lest they make a loss (Sandberg & Targama 2007). One of such companies is Jet Red which is battling with a high cost base, dropping shares, higher salaries to its employees yet they are posting dismal performance. The company is contemplating reducing the number of employees and only considering profitable routes (Stone 2013, p.50). This may be a good idea, however reducing the number of employees might result to inefficiencies and slow rate of work. As they do this, they should retain higher performing employees who can maximize profit while lowering the expenditures. On the other hand, reducing the salary may lead to less motivation and finally high turnover (Wilkinson et al 2004, p.311). It is also advisable for the company to consider acquisition rather than building new offices in the Asian market as this will reduce cost. 6.0 Conclusion In conclusion, it is evident that organizational performance is not realized only through paying employees higher salaries, but also through emotional rewards like career development and ideal work-life balance. Red jet company’s board is reminded that unless they change employees’ management policies, bureaucratic corporate culture, and complex labor practices and emphasize on the need for training, the company may not do well in Asian market. All these need to move to the bottom level through all layers of the structure of the organization. 7.0 Reference Balogun, J 2006, Managing change: steering a course between intended strategies and Unanticipated outcomes, Long Range Planning, Vol. 39, p. 29–49. Cameron, K & Mora, C 2003, Corporate culture and financial success of mergers and acquisitions, Working paper, University of Michigan Business School. Konrad, A 2006, Engaging Employees through High-Involvement Work Practices, Ivey Business Journal. Sturdy, A & Grey, C 2003, Beneath and beyond organizational change management: exploring alternatives, Organization, Vol. 10, No. 4, p. 651–62. Sandberg, J & Targama, A 2007, Managing Understanding in Organization, London, Sage Stone, R 2013, Managing Human Resources, 4th, John Wiley & Sons, Milton, Queensland Stone, R 2005 Managing human resource, John Wiley & Sons, pp.363 Wan, H 2007, Human capital development policies: enhancing employees’ satisfaction, Journal of European Industrial Training, p 297-322. Wilkinson, et al 2004, Changing patterns of employee voice, Journal of Industrial Relations, Vol. 46, No. 3, p. 298–322. Read More