Human Resource Policy Plan - Case Study Example

A Report on Human Resource Policy Plan Name: Course: Institution: Tutor: Report on Human Resource Policy Statement: Case Study of Virgin Australia Airlines Step One: Mission Statement Analysis for Virgin Australia Introduction Virgin Australia is an Australian–based company engaged in the air transport industry and is the second largest airliner in the country. The airliner was established in early 2000s and is based in Brisbane, Queensland. Initially, the airline offered seven return flights between Sydney and Brisbane daily using two aircrafts, but following the collapse of the rival airliner, Ansett, Virgin Australia moved in to fill the gap and has strategically grown steadily to serve about 30 cities throughout Australia. Using the cost leadership approach, the company has gradually expanded the range of flights and aircraft size to match the rising domestic market (Virgin Atlantic Website, 2008). Mission Statement The company’s mission statement objective is to deliver innovative and best flying experiences to all people. To achieve this, the company consistently provides its customers with good value, safe and point-to-point air travel services. The company’s other mission objective is to offer and effect consistent, affordable and reliable services that appeal to both leisure and business travelers in the Australian market. This objective is achieved by developing and establishing strategic relationships with customers. Additionally, Virgin Australia is committed to delivering comfortability and has passion for safety. The company prides of offering high quality services and on meeting customer needs (Virgin Atlantic 2008). Virgin Australia seeks to achieve the following strategic priorities in the short to medium term; i. To offer the lowest airfare among all Australian airlines. This objective will help stimulate demand for the company’s services and will be achieved by targeting fare-conscious business and leisure travelers. ii. To provide the best services to customers amongst all companies. The airliner seeks to achieve this objective by developing products, services and deals which will attract and retain customers in a long-term relationship. iii. To have the largest market share in domestic flights in Australia. This will enable the company achieve strong revenue growth and build on key competencies for exploring international markets. Internal and External Factors Affecting Virgin Australia’s Strategic Plans and Human Resource Needs The most important external factor that is likely to impact adversely on Virgin Australia’s strategic plan is the high competition in the Australian air travel industry. The company’s main competitors are Qantas, T-Jet, Tiger Airways and other smaller airliners. The competition has caused continuous price wars among industry players thereby lowering revenues. The company is also affected by occasional bouts of economic recession, which affects the company’s ability to meet human resource needs. For instance, the 2007 global economic crisis prompted the company to suspend recruitment of new employees due to reduced business operations. The company has a relatively weak management team compared to its main rival Qantas. The company has not diversified its business fully to check the effects of the air travel industry’s ever-changing human resource needs. Despite the setbacks, Virgin Australia has a relatively strong financial position and a committed customer support team. The company’s good flying record and low cost airfares are impressive internal strengths than it can capitalize on to offer excellent human resource needs to its employees. In addition, the company operates modern, efficient and superior aircrafts and has formed strategic alliances with leading airliners such as the Sky Team Alliance. Formation of the alliances was a strategic initiative by the company’s management to reduce competition and hence increase market share. The issue of environmental sustainability is an important consideration for the airliner. The company’s management has plans to launch bio-diesel carriers, which will not only help address environmental issues but also reduce operation costs in the long term. The financial benefits of the reduced costs can be channeled to development of best human resource management issues such as training and development of employees (Van Lerberghe, Adams & Ferrinho, 2003). Implications of the Internal and External Environment Factors on the Company’s Human Resource Policy The Australian airline industry is one of the most volatile in the country. The industry’s ways of doing business are constantly changing, largely due to external factors such as political and economic situations and customer behaviors and perceptions. Accordingly, human resource managers are faced with the challenge of articulating staffing needs with the ever-changing trends in the industry (Grant, 2010). Because air travel needs are constantly in a state of flux, the foremost step that human resource managers should take is to establish a policy system that facilitates regular evaluation of staffing needs and recruitment based on the identified needs (Pfister, 2009). Within the air travel industry and in Virgin Australia, there is a wide range of levels of positions from pilots to executives, from maintenance personnel to stewardesses. Human resources managers can only satisfy the staffing needs if they can enhance communication between departments. This will facilitate assessment of each department’s human resource needs and help in developing recruitment plans based on relevant needs (Martinez & Stuart,2004; Tyson, 1997). The competitive nature of the air travel industry means that human resource managers should create opportunities for employees to learn. Staff training and development is essential to the ongoing success of any organization. The process helps articulate people resources with an organization’s core strategic objectives and mission, which in turn adds up to competitive advantages. According to Pfister (2009) staff development is an essential aspect of modern human resource management and provides a framework for employees to develop their organizational and personal skills, abilities and knowledge. Primarily, the focus of staff development is to nurture the most superior workforce, which can help a company accomplish its work goals in the most efficient manner. This consideration has become a principal aim behind establishment of various staff development programs in the air travel industry (Marchington & Grugulis, 2000). The second implication is that human resource managers must develop contingency plans for reacting to shortage of employees, whether it occurs as a result of employee strike or a drastic event such as airline crash. In fact, employee shortages can result in severe cutbacks in some human resource positions (Appelbaum, Bailey, Berg & Kalleberg, 2000). The plans should be aimed at maintaining current employees and recruiting highly experienced and skilled workers. Therefore, the plans should address such important issues as job satisfaction, training and development and compensation. According to Herzberg, Snyderman and Mausner (2003), the greatest challenge a human resource manager in the air travel industry can face is the threat of employee strike. It is important for human resource managers to ensure that employees are satisfied with the terms of their current positions and the future implications of their work relationship. Huselid, (1995) has asserted that air travel companies have to contend with rising labor costs. In fact, airlines have to spend about 40% of their operating expenses on labor costs. Most of the employees in the industry are highly professional and experts in their respective careers. Most of them are also unionized and hence it is of importance for human resource managers to develop strategies for slashing the company’s revenues to offer competitive pay packages to employees. In an attempt to slash operating expenses, human resource managers may have to develop initiatives for outsourcing. For instance, non-union workers can be appointed to clean aircrafts. This can significantly reduce labor costs and hence add to a company’s revenue strengths. It is imperative for human resource managers in any company or industry to have plans in place for handling worst-case scenarios and which allow for quick resolution of human resource issues with minimal harm to the company’s operations (Rondeau & Wagar, 2001). Human resource managers also have the challenge of facilitating internal mobility and career development for employees. Mobility function can be effected by developing various formal and informal programs which for instance encourage promotions after a certain period of time. This move can be effective strategy for a large employer like Virgin Australia. Essentially, mobility and advancement opportunities create an atmosphere of loyalty and job satisfaction, which are important aspects of positive human resource practices (Richardson & Thompson, 2000). Step Two: Development of Human Resource Policy and Plan Introduction The human resource policy statement shall address the implications of staffing and employee training and development. The two implications are critical to realization of strategic human resource objectives and it is, therefore, necessary that they are addressed in the policy statement. Human Resource Policy Statement Virgin Australia is committed to achieving organizational growth through people. The company accepts its corporate social and ethical responsibilities and its obligation to conduct business in accordance with the applicable human resource policies. The company will achieve its strategic business objectives by adopting the policy of best human resource management practices. The primary objectives of the company’s human resource policies are to ensure that; i. Employees are selected and recruited into the company based on their attitudes, competencies, skills and aptitude. ii. Employment relationships are based on fairness, mutual trust and equality of opportunity for all employees. iii. The integrity of employees is respected by fellow employees and managers. iv. Communication between employees and management are mutually accepted as honest and open. Strategic Human Resources plan a) Background to the Policy Plan The development of policy plan has been necessitated by the impact of various internal and external factors on the company’s human resource management efforts. Primarily, the policy plan is an expression of the company’s commitment to the human resource management needs of employees and a guide for action to development of health personnel. The policy describes the priorities that the company aims to achieve and the main strategies to be implemented in order to attain the objectives. In addition, the policy provides a framework through which human resource activities can be implemented and coordinated (Singh, 2008). b) Objectives of the policy plan The policy plan provides direction on how to manage and coordinate employee training in Virgin Australia. The plan outlines possible sources of funds to enable the company provide adequate budgetary support to employee development and training. In addition, the plan gives guidelines on how to build institutional and individual capacity for improved performance. c) Strategic Alignment With The Strategic Management Plan, Ethical Considerations and Assumptions The policy plan will assist in proper planning of training and development programs to ensure adequate and continued supply of relevant skills and knowledge to the company. As such, the plan will streamline the processes, activities and procedures associated with the following human resource areas: i. Employee development and training needs assessment. ii. Selection of trainees. iii. Industrial attachment. iv. Succession planning. The underlying assumptions of the plan are: i. All human resource needs can and should be met for effective service delivery. ii. It is possible to identify cost-effective means for addressing the human resource needs of an organization. iii. Company resources are utilised in accordance to the relative levels of the needs to be satisfied. The main issues of ethical concern to be considered when implementing the plan include terms of employment, remuneration and benefits, health and safety and labour relations (Wellmaker, 2002). The issues will be articulated to align well with the company’s strategic human resource objectives. The progressive impact of policy implementation will be monitored continuously on the basis of the following deliverables: quantity and quality of employee performance, timeliness and punctuality, cost-effectiveness of employee efforts, employee creativity; adherence to policy and behavior change (Stavroua, Brewster & Charalambous, 2010). Functional Human Resource Plan for Staffing and Employee Training and Development i. The overall policy objective of the plan is to develop and maintain a well structured and coordinated human resource management system that will facilitate acquisition of relevant skills and make employees contribute effectively to the company’s strategic objectives. ii. The human resource department shall generate and provide the management with analytic information for assessing the adequacy of skills and knowledge required for attaining the company’s strategic objectives. iii. For effective assessment of employee training and development needs, each functional department shall develop and maintain skills inventory for their staff. iv. The human resource development shall provide training in the specific areas that need development on an annual basis and as need arises. v. All employees shall be eligible for training at least five days a year. The personnel in the managerial care shall undertake training in project implementation and policy formulation. vi. Induction and orientation of new employees shall be conducted to familiarise new employees with the job environment and requirements. Induction training will be conducted within three months of employees joining the company and shall apply to both senior management and junior employees. vii. The human resource department shall liaise with the finance department to secure funds for implementing human resource policies. The two departments shall work closely in monitoring employee remuneration and benefit needs. References Appelbaum, E., Bailey, T., Berg, P. & Kalleberg, A. (2000). Manufacturing advantage: Why high-performance work systems pay off. Ithaca. New York: Cornell University Press. Grant, R. (2010). The concept of strategy, chapter 1 in Contemporary strategy analysis, 7th edition, London: John Wiley and Sons Ltd., pp. 3-30 Herzberg, F., Snyderman, B & Mausner, B., (2003). The motivation to work. New Jersey: John Wiley & Sons. Huselid M. (1995). The impact of human resource management practices on turnover, productivity and corporate financial performance. Academy of Management Journal, 38(3), pp. 635-672. Martinez Lucio, M. & Stuart, M. (2004). Swimming against the tide: social partnership, mutual gains and the revival of 'tired' HRM. International Journal of Human Resource Management, 15, pp. 410-424. Marchington, M. &Grugulis, I. (2000). 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