Essay on "Personnel Management -- Poor"

Essay 7 pages (2213 words) Sources: 1+ Style: Harvard

[EXCERPT] . . . .

Personnel Management -- Poor personnel management between the employer and the employee (British Airways)

The current situation at airline operator British Airways is enhancing in severity as the relationship between employee and employer further weakens. The managers are on the one hand concerned with cost cutting and customer satisfaction, whereas on the other hand, the employees feel undervalued.

Sir Marshall Collins, former chairman at British Airways, once said: "in an industry like ours, where there are no production lines, people are our most important asset and everything depends on how they work as part of a team. This means that, to get the best results, managers have to care about how they (the employees) live and function, and not just about how they work and produce" (Boyd, 2003, p.67). Yet, something happened along the way and this way of treating the staff members was not fully implemented.

Today, the workers of the largest British airline operator, about 40,627 individuals (Hoovers, 2010), are growingly frustrated with their jobs. They feel not only undervalued, but simply mistreated. The staff members have even organized strikes with the intent of drawing a signal, but their outcomes have not been the one they had expected. A message was however sent in that the threat of strikes does manage to put the company in a negative light, element which should attract the attention of the leadership team. Given this context, a need for action becomes impending.

3. Poor personnel management at BA

3.1. Failure of personnel management

The general perception of British Airways is that of a large and strong company that cherishes its staff members as they understand the major role these pay in the satisfaction of the customers and the adjacent generation of profits. Yet, the recent events have pointed out to an opposite situation, in which the employer seems unable to adequately communicate with the staff members and fails to motivate them (and at times even de-motivates the employees), all to materialize in an untrustworthy relationship between employees and employer.

The lines below reveal several instances as evidence of the poor personnel management implemented by the British airline operator:

a)

The employer reserved the right to monitor the phone calls made by an employee, as well as verify the activity on the computer of the employees. This ability was restricted in 1994 as a result of union negotiations (Cimini and Muhl, 1994), but the matter remains conflicting through today. The fact that the employer is able to check the telephone calls made and the computer activity is in many cases a violation of individual privacy and sends the clear message that the company does not trust its employees and needs to constantly check on them.

(b)

The employees at British Airways are not guaranteed the future safety of their jobs. Such a contract was signed in 1990, but it only covered an estimated 1,400 of the employees and promised them job security throughout the duration of the contract (Cimini, 1990). The fact that the employees do not have a certainty they will be able to retire from their current workplace, or even that they will be able to count on the job to provide for their families, further enhances employee dissatisfactions.

(c)

Despite outspoken beliefs and support in a multicultural and diverse workforce, the expression of the personal beliefs by the staff members is often discouraged. Probably the most relevant example in this sense is the case of Nadia Eweida, who was initially prohibited from wearing her necklace cross (Russel, 2008).

(d)

During the third quarter of 2009, British Airways reported losses in the amount of $471 million (Air Finance Journal, 2009); these were just a new addition to an already set trend of negative financial results. The direct consequence of these losses was the implementation of a cost cutting strategy. It saw the cut of thousands of jobs, the freezing of employee payments and several others, such as asking the employees to work shorter hours or take unpaid leave (Teather, 2009). It is unnecessary to say that the plan to reduce expenditures was not welcomed by the staff, and that the relationship between the two parties further worsened.

As they observed that getting their problems resolved was not an easy task since the communications with the management were impeded, more and more employees at British Airlines joined the labor union. Frictions between the managerial team and the union did not tardy. As the union grew more powerful, it pressured the company to give in to staff demands. Yet, the company sought new ways of convincing the employees to work for them, under circumstances not of the most favorable for the staff.

3.2. The British Airways cabin crew Christmas strike

At the end of fiscal year 2009, the managerial team at British Airways assessed the company's financial results and concluded that the organization had taken a severe hit from the internationalized economic crisis. Additionally, the fact that they maintained high prices for premium service packages did not help make the company more appealing to the average income customer. As the financial stability became even more precarious, the executives at British Airways decided to develop and implement a strong cost cutting strategy. Among other things, it saw that some of the 2010 salaries would be frozen until the company regained part of its financial stability; that the cabin crew would be decreased and that the working hours would be reduced, to adjacently reduce the payments to the staff members (Wardell and Quinn, 2009).

Dissatisfied with the solution proposed by the executives, the cabin crew voted with a majority of 90% to go on strike in December, throughout the duration of 12 days, affecting as such the busy period of Christmas and New Year. The decision came after nine months of failed negotiations between the labor union and the British Airways executives, who now feared the damaging impacts upon the customers and the already unstable financial results. They as such went to court with the strike decision of the cabin crew and had it revoked. The estimated loss from the strike would have been of $73 million in profit and $420 million in revenues (Niththyananthan, 2009).

The judge based her injunction decision on the massive damage the strike would produce on both organization as well as public. She also refused the union the right to appeal. The ruling created content for the executives, but the labor union representatives argued that the dispute was not yet over. The union continually argues that they are open to negotiations, but these have yet to lead to a positive outcome.

In January 2010, the cabin crew at the British airline operator commenced discussions regarding another strike. This time, the employees promise to not go on strike during the busy Easter holyday, but the talks point out to the possibility of a strike sometime after the 1st of March, this year (Associated Press, 2010).

3.3. The disadvantages

There is a myriad of disadvantages encountered as the staff members of the company decide to go on strike. A first negative aspect is given by the very nature of the operations conducted by British Airways. When a manufacturing company goes on strike, it is still able to generate financial revenues through the sale of its already finished products. Still, for British Airways, going on strike implies the absolute cut of revenues: captains no longer fly the planes; desk clerks no longer sell tickets and make reservations and so on. In this line of thoughts then, the primordial concern refers to the financial stability of the company being jeopardized by the strike (Lavelle, 2006).

The second advantage refers to the negative image the strike creates for the public. British Airways is generally perceived as a respectable company that cherishes its staff members. Yet, the past events have not supported this perception. And regardless of the rightful overall interest in the general well-being of the entity, the cost-cutting strategy will not be understood by the general public as a necessary step, but as a selfish act on the part of the executives, who are trying to capitalize on the hard work of the employees, and the not even remunerate them.

The third set of disadvantages comes from the reaction of the British Airways customers. On the one hand, these will undoubtedly be dissatisfied with their flights being cancelled and their entire schedule being interrupted and will as such complain. On the other hand, a dissatisfied customer will no longer return for the services of the company, but will purchase those of competitive organizations. The strike then translates into lost financials and diminished competitive position.

Finally, a noteworthy element is the fact that a strike of such a magnitude proves the power of the labor union. In a context in which the multinational corporations seem unstoppable, the success of a strike reveals the weakness of the entity and creates a precedent of employee power over the company (Rothstein, 1997).

3.4. Suggestions for personnel management

In… READ MORE

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