The Human Resource Department of an Airline Company

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Table of Contents

Introduction
Roles and functions of the human resource department
Motivation by the Human Resource Department
Singapore Airlines
Human Resource Management Strategy for 2012-15
Conclusion
References

Introduction

One of the key pillars of any company or business organization is the human resource department. This is the department that is tasked with managing human capital, the most important asset that a business organization has. For a business organization to be successful, it must have a functional and highly efficient human resource management team.

The core functions of the human resource department are generally the same for any company or business regardless of the size or line of business (Porter, 1985). In a business organization setting like that of an airline company, the human resource department serves as a link between the employees and the top management.

The department is supposed to ensure that it gets the right people and make them help the company achieve its goals and objectives. Workers in the aviation industry, just like any other sector of the economy, need to be motivated for them to contribute maximally to the company they are serving, and the human resource department of that company has a leading role to play to ensure that this is the case.

Roles and functions of the human resource department

The aviation industry is an extremely sensitive and highly volatile industry that has a lot of competition. The industry is heavily influenced by outside forces that constantly cause a lot of changes to the way the business is run. The nature of the business means that airline companies regularly are swallowed by larger companies or merge in order to stay afloat.

Most of them declare bankruptcies on a regular basis. The industry is heavily influenced by uncontrollable factors like the geopolitical and economic situations in the countries in which they operate. The human resource managers in this industry have to provide the human capital for this ever-changing environment.

Since the needs of the airline company will keep changing constantly, the first task of the human resource department is to come up with a system that evaluates the needs of the company on a regular basis, and then to base their recruitment drive on this. The airline industry has many different levels of positions like executives, pilots, stewards and the maintenance crew. The human resource department must know how to recruit competent staff to fill these positions.

To help achieve this, clear lines of communication must be established with each department in order to learn of their specific needs and use that as the basis for recruiting new staff. Once the new employees have been recruited, it is the work of the human resource department to train them appropriately and give them the necessary skills and knowledge they will require to serve the company in various departments.

The human resource department should also come up with a functional strategic plan that can be employed in case of an actual work stoppage, which can arise from employee strike or a drastic event like a crash or hijacking. There is new human resource technology that is being introduced in the industry to help standardize operations, and the use of such technology may lead to cutting back on some positions in the human resource department.

Due to the volatile nature of the airline industry, most employees at any level are usually concerned about job security. The human resource department must form a working relationship with the unions and open up clear communication channels so that most employee issues are dealt with accordingly before they get out of hand.

There is now human resource software that can handle the various functions of the department in an automated and standardized way. These functions include recruitment and staffing, training, technology and call center support.

The biggest human relations issue faced by the human resource department is the threat, or the carrying through, of an employees’ strike by any section of the company’s workers due to dissatisfaction with the current terms of employment or the uncertainty of their job positions. This is usually a very sensitive area that can cause a lot of interference with their airline company’s operations if the parties cannot come to an agreement quickly.

It is therefore imperative that the human resource department puts in place a plan to handle such a scenario and come up with a quick solution without causing considerable harm to the company’s operations. Outsourcing is becoming quite common in the airline industry, and the human resource department now has the additional task of dealing with private independent contractors.

This includes reviewing bids, setting up contract agreements with the help of the legal department, and working closely with the human resource department of the private contractor to ensure that they are meeting the needs of the airline for which they have been hired.

Motivation by the Human Resource Department

In order to ensure that the airline staff members keep on delivering excellent service, the human resource department must find ways of motivating the employees so that they give their best to the company (Shostack, 1984). The company, through the human resource department, should come up with reward systems that have been shown to be good motivators for employees.

By properly motivating and rewarding highly productive employees, the company will be able to, not only get the best out of them, but to retain them as well. The human resource department must put in place systems for recognizing excellence and general positive performance. These systems must be in line with the company’s desired performance outcomes.

The best incentive for getting great performance from employees is to reward those who achieve this. The rewards can be in the form of salary increments, end of year bonuses, equities, holiday offers, awards, flexible working hours, promotions and career development (Singh, 1984). These incentives will bring a sense of satisfaction from the employees if they are implemented professionally in a fair and balanced manner.

Motivation also comes from company awards for excellence and using newsletter designed to motivate the employees. If the company’s employees are properly motivated, it will be easier for the company to retain them, and this is good for the stability of the company. It also inspires loyalty from the employees and a sense of identity with the airline company.

The working environment also plays a big role in the motivation of employees. This is evident in the management style adopted by the company (Chan, 2000a). Organizations that use the old hierarchical command and control structure create environments that discourage employees from taking initiative and thus end up performing below par.

This leads to lower customer satisfaction with the airline’s services. Companies need to come up with ways of gaining commitment from employees, and they can shape up their culture through better treatment of employees are paying attention to their needs and opinions. These measures can translate into improved productivity among employees and will make them gain a sense of empowerment.

Successful airline companies put a lot of emphasis on clear communication channels between the employees and the top management. Lack of communication is one the major causes of low morale and low job satisfaction. Other causes include lack of respect, pay discrepancies and distrust of management (Chong & Chian, 2007).

The airline company, through its human resource department, should monitor and get feedback on the opinions of their employees and their unions so that they know what is going on and how to solve it before it gets out of hand. Some of the top airline companies regularly survey their employees and unions to get their perceptions and invite ideas on how the company should be run.

Southwest Airlines is known to employ an internal marketing strategy that uses employee focus groups to generate new ideas. The unions are usually encouraged to look into problems and propose solutions to the top management. The company is also known for promoting employee-centered values though a strong emphasis on teamwork, community and serving others.

The employees are made to feel that they are part of a cause, and they feel empowered to really make positive changes at work and to their customers. By making the employees part of the solution, they will feel that their issues and concerns are being addressed appropriately.

If the employees of an airline company are treated well and properly motivated, they will in turn treat the customers better (Chang, Yeong & Loh, 1997). It has been established that they way that employees are treated will determine the quality of service they deliver to customers.

Successful airlines usually pay attention to detail, include their employees in collective decision-making and are open to new ideas. Creating such a working environment for employees will be a big motivational factor that will significantly enhance their productivity and service delivery.

Singapore Airlines

The airline industry has been going through tough times of late. Apart from the industry factors like overcapacity and intense rivalries, airline companies have had to contend with a myriad of socio-economic factors like terrorism concerns, escalating oil prices, the European ash cloud, the Asian tsunami amongst others. All these factors have had a negative impact on profitability, and many airline companies have been posting losses on a regular basis.

The outlook remains bleak, and the industry is usually considered one of the worst performing by many expert analysts (Doganis, 2006). In this environment, Singapore Airlines has stood out as one of the few companies that have continued to perform well by industry standards.

Singapore Airlines has never posted an annual loss, which is very impressive in this volatile industry (Heracleous, Wirtz & Johnston, 2004). This impressive performance is based on excellent service delivery and innovation. The company has positioned itself as a premium carrier and in doing so, puts more emphasis on profitability rather than size.

The use of information technology is one of the main features of the company’s plans for increasing efficiency and improving service delivery to customers. The IT functions have been outsourced to IBM and this has brought in the much-needed efficiency.

Singapore Airlines put a lot of emphasis on rigorous service design and development. The company has a service development department that is tasked with designing and testing any changes before they are introduced (Chan, 2000b). The department has to ensure that any service innovation being introduced is fully supported by the relevant procedures. The company values innovation and has integrated it into all its programs.

This innovation takes the form of small but constant increments rather than a radical approach. This way, the company is able to deliver to the customer’s satisfaction while still remaining cost effective (Clemons, Gu & Spitler, 2002). The Product Innovation Department constantly studies the trends in customer lifestyles and preferences, and gives 3-5 year predictions on what is expected to happen so that the company can tailor its service delivery along those lines.

Singapore Airlines strives to be the leader in coming up with innovations especially those that touch on customer service, and is quick to catch up on any areas that other airline companies have led in like revenue management systems. Any new proposal is put through a thorough cost-benefit analysis before being implemented (Heracleous & Wirtz, 2008).

The company has a reward system for paying bonuses based on how profitable the company has been for that year. The airline’s team concept involves the formation of small groups of 13 crewmembers who will work together for at least two years. This enables them to bond and develop a sense of togetherness in their endeavors for excellent service delivery.

The fact that Singapore is located strategically in the middle of Southeast Asia contributed a lot to the success of the airline in terms of operation routes Wirtz & Johnston, 2001). It came up with innovative products and services that quickly put it ahead of the competition in the region and helped in carve a significant market niche.

The company encourages personal initiative and creativity from its employees, with special emphasis on satisfying the needs of the customer. The company values customer feedback and use it to form the basis for customer service delivery and innovations.

Human Resource Management Strategy for 2012-15

For a company that has enjoyed considerable success in the industry, there are several human resource management strategies that can be implemented to ensure that it maintains its excellent reputation and consolidates its position as the best airline in its business niche. The first step should be a thorough analysis of the current business environment for the airline industry and identifying major points like expected challenges, changing trends, competitors’ strategies and the company’s goals and aspirations (Holtbrugge, 2004).

The success of the company means that the strategies put in place are working and should therefore be strengthened and improved. The human resource department should play a significant role in this. First, the company should aim to retain the employees who have been instrumental in bringing its current success. This can be achieved through salary increments, promotions and bonuses at the end of the year.

The employees also need to be more involved in decision-making process and policy formulation so that they feel truly part of the airline family (Ruan, 2006). This being primarily a service industry, the role played by the employees is directly crucial to the success of the company, and if the employees are happy then the customers will get excellent service and the company will perform well.

The recruitment exercise for new employees should be tailored to meet the needs of the company as it prepares to face the next four years or so. This will be based on the strategic plan that has been laid out that aims at consolidating the company’s position and image and expanding into new growth areas. The new recruits must be thoroughly trained on the core values that have enabled the company to enjoy such admirable success so far.

For example, the company has done well in cultivating the image of the ‘Singapore girl’ that is associated with the stewards of the airline. Currently, everyone in the company, including senior management, has a training and development plan with clear goals.

The training should not only focus on functional skills for the industry but also on positive personal and interpersonal skills. Refresher courses are also necessary for the employees to be up to date with the latest innovations in the industry and any new concepts that are aimed at helping the airline perform better.

The human resource department should integrate newer and more efficient technologies into their operations for better service delivery (Costa, Harned & Lundquist, 2002). This also includes training all current and new personnel on how to use the new technologies to enhance service delivery.

The company should also think about diversifying into related areas to help it ensure high quality service delivery on all fronts. Some of these related operations include aircraft maintenance, airport management and catering. By imparting the same business values and strategies on its subsidiaries, Singapore Airlines is able to benefit from the synergy while getting high quality and reliable supportive services.

Despite the success of Singapore Airlines, the company happens to have some strong critics. Most of the critics and competitors point out that much of the success has been realized based on the support of the Singapore government and favorable environmental factors.

The industrial climate in Singapore is considered friendlier than anywhere else in the world, and this has helped the company to implement some policies that would have caused friction for other airlines (Heracleous, Wirtz & Pangarkar, 2008). There have been some less than impressive acquisitions by the company. This is one area that the top management will have to address to minimize on operational costs.

Conclusion

The aviation industry is faced with so many problems, most of which are beyond its control. Some of these problems include the threat of terrorism, rising fuel costs and natural disasters like tsunamis and ash clouds. For an airline company to succeed in such an environment, it must have strong foundations. The human resource department of any airline company is expected to play a significant role in bringing this success.

This involves hiring and training highly competent individuals and imparting in them core success values of the company. The employees also have to be motivated enough so that they serve the company to their best and keep the customers happy. Successful airline companies like Singapore Airlines have strong policies as regards human resource management.

They have various ways of keeping their employees and customers happy. They have also set up strong business structures that guide the success of the company. As they approach the near future in this uncertain industry, Singapore Airlines should concentrate on consolidating its position as market leader in its category by having a highly innovative and efficient human resource department.

References

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Chan, D 2000, The story of Singapore Airlines and the Singapore Girl, MCB UP Ltd, Singapore.

Chang, ZY, Yeong, WY, & Loh, 1997, ‘Critical success factors for Inflight Catering services: Singapore Airport Terminal Services’ practices as management benchmarks’. The TQM Magazine, Vol 44, pg 32-37.

Chong, M & Chian, L K, 2007,The Role of Internal Communication and Training in Infusing Corporate Values and Delivering Brand Promise: Singapore Airlines’Experience Palgrave Macmillan Ltd, London.

Clemons, E K, Gu, B & Spitler, R 2002, Hyper-Differentiation Strategies: delivering value, retaining profits. Routledge, New York.

Costa, P, Harned, D, Lundquist, J 2002, ‘Rethinking the aviation industry’, McKinsey Quarterly, 89–100.

Doganis, R 2006, The Airline Business, 2nd edn, Routledge, Abingdon.

Heracleous, L, Wirtz, J & Johnston, R 2004, ‘Cost-effective service excellence: Lessons from Singapore airlines’, Business Strategy Review.

Heracleous, L, Wirtz, J & Pangarkar, N 2008, Managing human resources for service excellence and cost effectiveness at Singapore Airlines, Emerald Group Publishing Ltd, Singapore.

Heracleous, L, & Wirtz, J 2008, Strategy and organization at Singapore Airlines:Achieving sustainable advantage through dual strategy, Elsevier Ltd, Singapore.

Holtbrugge, D 2004, Management of International Strategic Business Cooperation:Situational Conditions, Performance Criteria, and Success Factors, Wiley Periodicals Inc, Chicago.

Porter, ME 1985, Competitive Advantage: Creating and sustaining superior Performance, Free Press, New York.

Ruan, B 2006, Singapore Airlines Ltd, Glass Lewis & Co, London.

Singh, K1984, Successful strategies-the story of Singapore airlines(SIA), Pergamon Press Ltd, New Jersey.

Shostack, GL, 1984, ‘Designing services that deliver’, Harvard Business Review Vol 62 (1), 133–139.

Wirtz, J, & Johnston, R 2001, Singapore airlines: What it takes to sustain service excellence – A senior management perspective, NUS Business School, Singapore.

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