Performance Management Practices Deployed by Emirates Airlines - Case Study Example

Assignment: Performance Management Practices A report on Performance Management Practices deployed by Emirates Airlines Student’s Name: Course Code: Date of Submission: Introduction In 1974, some countries in the Gulf Cooperation Council (GCC) came together and established a joint flag carrier called Gulf Air. Dubai was one of the Governments in this joint venture. This was not to work for long as the Gulf Air demanded that the Dubai Government abandon its open skies policy. The Dubai Government did not give in to the demands of Gulf Air and as a result Gulf Air reduced its operations from and to Dubai by two thirds between 1984 and 1985 in both frequencies and capacities (Nataraja and Al-Aali, 2011). This coupled with the fact that other airlines we unable or unwilling to fill the gap, Dubai’s then ruler Sheik Maktoum bin Rashid Al-Maktoum convened a committee of experts with the aim of setting up a home carrier for Dubai. Thus, in 26th June 1985 Emirates was born as a limited liability entity by an Emiri Decree by the ruler with the injection of US$10 million by the Government as start-up capital. On the 25th of October 1985 Emirates’ first flight took off (Nataraja and Al-Aali, 2011; Plunkett, 2009). Emirates airlines on that day started out with two aircrafts, Airbus 300 B4 and a leased Boeing 737. This essay will therefore analyse the performance management practices utilized by emirates airlines. Emirates Airlines Management Practices Emirates has grown to boast a fleet of 230 aircraft flying over 140 destinations in more than 80 countries around the globe (Emirates, 2015a). The airline boasts of more than 50,000 employees in all its subsidiaries and is owned by the Dubai Government through the Emirates Group. The airline’s vision is to build and maintain market leadership in the aviation industry that is beyond the conventional track (Abdulkaree, 2012). In order to achieve this vision, the airline has set some goals and objectives within its ranks the main ones being; to position emirates as a global airline and the carrier of choice to the Gulf and the Middle East and points beyond, to promote Dubai as one of the most modern, progressive, safe and technologically advanced commercial centres in the Middle East, to showcase the airline’s outstanding and award-winning service levels, in-flight experiences, profitability, fleet, safety record and global reputation and to focus on the airline’s highly professional and seasoned senior management to create a leadership position in the aviation industry (Abdulkaree, 2012). Emirates airlines’ corporate strategy has always been to cut a niche for itself as far as the Middle East aviation market is concerned. But this outlook has been expanded to a greater perimeter basing on its recent undertakings under the Emirates Group. Starting out as an airline, Emirates has expanded the scope of its businesses with a target of 156 aircraft in 2010 Emirates airline has expanded to operating in more than 59 countries. It also has a department, Emirates SkyCargo, which is a shipping company. Other markets that have been explored include under the umbrella Emirates Group include tours and travel, hotels and resorts, security under Emirates Transguard. It has also opened up training opportunities by the starting of Emirates Aviation College; Dnata is also one of its subsidiaries charged with the responsibility of airport ground work services. Mercator is an IT firm also associated with Emirates concerned with providing IT solutions for the air travel industry (Plunkett, 2009). Emirates airlines has also played a big role in the Corporate Social Responsibility with sponsorships in sports which has seen it sign sponsorship deals with big football names in Europe such as Arsenal, Real Madrid among others (Emirates, 2015b). The sponsorships are not only in football but other sports such as rugby, motor sports, tennis, golf, cricket and horse racing. With its Emirates Airline Foundation it provides humanitarian, philanthropic aid and services for children in need. This is aimed at improving the lives of the children through provision of education, food, health and housing (Emirates, 2015c). The same foundation also sponsors travel expenses for doctors, engineers, surgeons and other professionals who intend to carry humanitarian aid and missions. This is done under donate miles scheme. This approach of corporate social responsibility gives the company an international outlook and appeals to a majority. Most of the success of Emirates Airlines can be attributed to the strategy adopted by the company which is the open skies policy where Emirates Airlines has not so far subscribed to any airline alliance. Indicating that this would give in to red tapes when making decisions to progress (Rai, 2011). The Emirates Airlines are of course on the right track towards their long term strategy of becoming the world’s largest and best airline because they concentrates their efforts on customer satisfaction and not on competition. With this same approach Emirates airlines have enjoyed success even in the most turbulent times especially during the 9/11 terrorist attack in the US which led to most airlines staring huge losses in the face. But Emirates Airlines escaped unscathed, it actually made profits (Jammoul, 2015). For the continued success that Emirates Airlines have been enjoying can also be attributed to well planned and executed strategies by the team of Emirates Airlines Employees. The management practices at the airline giant have also been at their best. This has gone a long way in ensuring profits year in year out for the airline. The giant airline has heavily invested in the development of its employees in terms of education. This provision of education does not only place the place at a position to perform their jobs effectively but also equips them with knowledge that prepares them for life elsewhere should they decide to leave the giant airline. This approach has made it possible for the airline to maintain its employees for long periods of time. To be precise, over 20% of the current Emirates Airlines have been with the company for close to ten years or more that is 11, 300 employees and 5% of the employees have been with the company for more than 20 years, that is 2, 700 employees (Emirates Group, 2014). Emirates airlines afford their flight attendants an opportunity to acquire new skills that boost their confidence in carrying out their duties. The attendants are at peace because the airline even caters for their well-being even after they leave the company. This is because within the ranks of the airline, the attendants are trained in new skills that will be relevant on the ground once they leave the company. The Emirates Airline has incepted an ICDL programme for their air cabin crew staff to equip them with new skills in helping the diversify their competencies so that the probability of getting a job outside Emirates Airline is increased should they opt to exit Emirate Airlines (ECDL, 2015). This was started in 2008 and the aim of the programme was to attract staff into the company. This was made possible by the fact that employees would feel safe if they are assured of transferable skills even if they have to leave. The airline giant also within its ranks has established Emirates Aviation College which has integrated an ICDL programme as part of the course (ECDL, 2015). Emirates also operate a flight training academy in association with the Canadian company, CAE, (Abed, 2005). Emirates in its commitment to developing the employee through training, it has gone further and partnered with Plateau, a leading provider of talent management software in order to boost the performance of her employees through e-learning. Plateau is charged with the responsibility of delivering and managing online learning to support the training and development of the airline’s employees, customers and partners (HR, 2007). This aspect of investing in training of its workforce impacts the airline together with its stakeholders in a beneficial manner by making employees ready for the job and thus become effective on the job hence cutting costs and maximising profits. This also improves the public image of the company revealing it as conscious of its employees by considering their long term welfare by equipping them with skills that will proof beneficial even after they have left the company. The Plateau facilitated e-learning platform also proves beneficial to the stakeholders because it enables access of information at an instant by just pressing a button. The negative effect of this management practice can be in terms of employees quitting the airline after gaining the extra skills and also it proves expensive to foot the training expenses. Another management practice that has proved working for the Emirates airline is their reward system. Their reward system is both monetary and non-monetary (Emirates Group, 2015). The remuneration of Emirates Airlines is in accordance with the labour laws existing in the employees’ native countries and at the same time the salaries are benchmarked with those of reputable airlines. The cash elements enjoyed by the staff include a competitive basic salary and the salaries vary based on the position, knowledge and competencies of the employees, the company also provides accommodation for its employees and transport allowance. Other cash benefits are dependent on the role and employee’s unique circumstance. They include profit share scheme where part profits are apportioned to employees, exchange rate protection where 50% of the basic salary is shielded from adverse exchange rate fluctuation between the UAE Dirham and the native currency of the employee and professional specialist allowance paid for additional roles to recognise the specialist of the employee in carrying out those roles. The non-cash elements inherent in the reward system of Emirates Airline include annual leave allowance, end of service gratuity. Others under this category include leave tickets given to employees to approved leave destinations. These tickets also cover the eligible dependants of the employees. There is also the education support allowance where dependants of senior employees’ tuition fee are catered for, personal life and accident cover, Medical and dental provision, Provident fund, government pension scheme, concessional travel benefits, emirates card which enables employees to enjoy huge discounts in their purchases, interest free car loans, telephone allowances (Emirates Group, 2015). This impressive reward system employed by the Emirates has benefits to both the employees and the company as a whole because a well remunerated employee performs better hence high profits. Well taken care of employees through remuneration and other types of rewards are always psychologically stable and hence making them effective in their roles. Unstable employees can cause disasters, a good example is the deliberate plunging of flight 9525 German Wings into the French Alps by psychological unstable co-pilot. The impressive scheme seems costly but it is what has put Emirates Airline where it is currently (Plunkett, 2009). The performance management for Emirates airline begins from their planning and recruitment processes. Employees of Emirates airline are drawn from 100 different nationalities (Emirates Group, 2014). This particular management practice has made the airline to have an international outlook instead of a regional outfit. The airline has its roots in Muslim backed background but it has come out to be the airline of the majority. It has appealed to many people derived from varying cultural backgrounds. This has been successful simply because of the diversity of the airline’s employees who come from also varying cultural backgrounds. This cultural mix is an advantage to the airline in that it also makes it easier for the employees to handle most of the airline’s customers who are also drawn from different backgrounds in terms of religion, culture, beliefs, norms and values. Another merit of having employees from different backgrounds has given the airline an image of a non-discriminatory company and hence a global outlook and this draws many to fly with the company. This aspect also points out that the people at the helm of the company are competent and aware of the tides inherent in the ocean where they operate their political ventures. It also points out to stakeholders that the investment of the company is beneficial hence the need to invest more. The Emirates Airlines as part of its management practices monitors the performance of its workforce and other resources by coming out with an annual report in all aspects and most importantly the financial aspect. In those reports, it shows the company having improved in terms of profits as compared to the previous year. This monitoring and evaluation exercise is very important in the sense that it enables the airline to plan ahead. It also helps the airline to set new targets, programs and strategies. They also check on what did not work out and make necessary corrections for efficiency of the same in the future. For instance the 2013-14 annual report indicates that the profit margin was in excess 3.9% compared to the profit in the preceding year, 2012-13 (Emirates Group, 2014). The management at Emirates monitors and evaluates the results of its undertakings including the airline enterprise to help in making decisions about resource allocation and performance assessment (Nataraja and Al-Aali, 2011). This monitoring and evaluation also portrays the financial position of the firm. This is a very important aspect piece of information for stakeholders because it helps them to make investment decisions. Conclusion In the year 2009, the airline industry had an uphill task navigating the challenges of the time which included skyrocketing oil prices, global recessions, fierce price-cutting, shattering consumer confidence etc. Emirate Airline was in the midst of all these but it held out remarkably well against all these and declared a profit of $964 million. This remarkable performance by the Emirates can be attributed to its policies and strategies as well as the performance management practices employed by the company which emphasizes on quality and not quantity. Some of these practices include handsome reward systems, open recruitment processes, monitoring and evaluation among others. But the airline needs to do more in employee welfare by allowing them to join unions. The success of the Emirates Airlines can also be attributed to its starting strategy and principles in that matter. The ruler of the Dubai government of the time, 1985, agreed to the setting up of emirates airline on two conditions; one being that they emphasize on quality and not quantity and the second one being that there won’t be any more funding from the government except for the $10 million start-up capital. This propelled it to greater heights. References Abed, A.L.et al. (2005). The United Arab Emirates year book. Abu Dhabi. Trident Press. Abdulkaree, A. (2012). Copy of Emirates Airlines. Retrieved from Prezi website: https://prezi.com/dqsg-qbhd2-h/copy-of-emirates-airlines/ ECDL. (2015). Emirates Airlines. Retrieved from the ecdl website: http://www.ecdl.org/media/EmiratesAirlines1.pdf Emirates. (2015a). The Emirates Story. Retrieved from the Emirates website: www.emirates.com/english/about/the_emirates_story.aspx Emirates. (2015b). Emirates Sponsorships. Retrieved from the Emirates website: http://www.emirates.com/english/about/emirates-sponsorships/sponsorships.aspx Emirates. (2015c). The Emirates airline Foundation. Retrieved from the Emirates website: http://www.emirates.com/english/about/emirates_airline_foundation/emirates_airline_fou ndation.aspx Emirates Group. (2014). Annual Report 2013-14: Going further. Retrieved from the Emirates website: http://content.emirates.com/downloads/ek/pdfs/report/annual_report_2014.pdf Emirates Group. (2015). Emirates Group Careers. Retrieved from the Emirates website: http://www.emiratesgroupcareers.com/english/Careers_Overview/opportunities/emp_ben efits.aspx HR. (2007). Emirates Group selects Plateau systems for Enterprise-wide learning management. Retrieved from the HR website: http://www.hr.com/SITEFORUM?&t=/Default/gateway&i=1116423256281&application =story&active=no&ParentID=1119278002800&StoryID=1183400273058&xref=https% 3A//www.google.com/ Jammoul, A. (2015). The Strategic Diagnosis: Emirates Airlines. 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