This paper attempts to present a detailed analysis of the factors affecting the productivity level of the United Airlines Hong Kong office, with focus on the front line customer service staff of the airport in the check-in counter and boarding gate. The research was conducted in order to provide possibilities as to how to improve the airline’s productivity and gain a consistent competitive advantage over all the other airline companies in the region. According to , a former CEO of Greece's Olympic Airways, for the last fifty years, the airlines industry was characterised by continued and rapid growth in demand for its services, yet has remained only marginally profitable. This paradox has no simple explanation, but overcoming this contradiction for the individual airline means matching supply and demand for its services in a way which is both efficient and profitable (2002). In essence, this is the premise of airline management and planning.
Terrorism attacks, recently the 9-11 attacks in the United States five years ago, airline bankruptcies and the steady increase of oil prices have affected the industry that has necessitated the call for innovations within the business environment of air travel. Such bankruptcy concern has, in fact, affected the airline at discussion. United Airlines filed for bankruptcy in 2002 ( 2006), claiming to have lost $2.14 billion in 2001 on revenues of $16.14 billion. The bankruptcy court approved the restructuring plan on January 20, 2006, clearing the way for United to exit bankruptcy on February 1, 2006, and finally return to normal operations. ( 2006). However, the filing is not a unique case, because as of 2006, 50% of the US airline industry including major players such as Delta and Northwest, have also filed for bankruptcy (Bisignani 2006).
United Airlines[2] operates more than 3,700 flights a day on United®, United Express® and Ted® to more than 210 U.S. domestic and international destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C. With key global air rights in the Asia-Pacific region, Europe and Latin America, United is one of the largest international carriers based in the United States. United is also a founding member of Star Alliance, which provides connections for customers to 842 destinations in 152 countries worldwide. The firm is held by United Airlines Corporation, whose current CEO is . As of July 31, 2006, United is the world's second-largest airline in terms of revenue-passenger-kilometers (behind American Airlines), fourth-largest in terms of total operating revenues (behind Air France-KLM, American Airlines, and Delta Air Lines), and fourth-largest airline in terms of total passengers transported behind American Airlines, Delta Air Lines and Southwest Airlines ( 2006). United has roughly around 57,00 employees, approximately 100 of which are in the Hong Kong office.
CHAPTER 2 CURRENT BUSINESS OPERATIONSThe current state of the airlines industry has raised some serious questions as to whether the air travel business will stay on or collapse. Each and every company in the airlines industry is hurting from the continuous increase in fuel costs, terrorist attacks and bankruptcy. In January 30 of the current year, United exited its state of bankruptcy after being in that condition for three consecutive years. The United State’s second-largest airline still is losing massive amounts of money and faces a difficult year because of fierce competition and the high price of fuel ( 2006). Standard and Poor's senior airline credit analyst said that the company is not likely to make any money this year but can continuously narrow their losses every year in bankruptcy (2006). Recently in July 16 of this year, United Airlines announced after months of speculation that it would be moving its headquarters from suburban Elk Grove Village to the Chicago Loop. The Top 350 Executives will be moving to 77 Wacker Drive. The Elk Grove Village campus will be known as the Operations Center (2006).
The following sections enumerates and analyzes the strength, weaknesses, opportunities and weaknesses of United Airlines in an attempt to further understand the current situation of the air travel firm.
2.1 StrengthsA major strength of United is their length of stay in the airlines industry. With more than seventy years of experience in the commercial aviation industry, United airlines has managed to surmount numerous roadblocks and issues which would normally bring down a company to its knees. Another strength of the company lies in their willingness to innovate on equipment and services. Despite of financial crises, United claimed to have updated its business with innovations such as interline electronic ticketing service, airport gate readers and providing customers with flight information via a proactive paging service and invested in more technology to make travel easier and the airport experience less of a hassle (2006).
There hasn’t been a lot of good news for the company in the past years, as they are bombarded with financial problems and controversies right and left, but one has to admire the firm’s resilience in the face of these adverse conditions. Although the internal conditions are not so supportive of the current state of United, as there are reports of employee dissatisfaction with how the company is treating them, United is somehow managing to keep itself afloat, even if it is barely keeping itself above the water. As evidence, it has afforded to exit the bankruptcy state after being in that condition for three years. Even though there is still a huge of room for improvement, being able to overcome the particular hurdle is one proof that, given sufficient time, it could be able to bounce back from the slump that it is in now. In a statement by Richard Aboulafia, airline analyst at the Teal Group Corp, pertaining to United Airlines, ‘One of their greatest strengths just might be that they are too big to fail’ (2006). Another airline consultant tells Reuters, ‘Fundamentally, the airline is obscenely strong. The future belongs to legacy carriers like United’ (2006). These observations from the airlines experts are taken as positive signs by the company in their struggle to recover from the setbacks of the three-year state of bankruptcy.
2.2. WeaknessesThere are a number of internal weaknesses that contributes to the fact that the United Airlines is on a flailing state. One leading weakness is low employee morale. ‘Psychologists and sociologists have long recognized the importance of relative pay effects in the determination of worker productivity’ (2002). According to The Journal columnist , ‘The tension matters to travelers because labor troubles typically spill into airplanes and terminals, with unhappy employees delivering unhappy service’ ( 2006a). , spokesperson for United’s 16,500 flight attendants, said that the company will never realize its potential under Tilton’s management team ( 2006). This bitterness on the part of the United employees, according to, ‘stems from two wage and benefit cuts during bankruptcy. New labor contracts went into effect in May 2003 that reduced labor costs by $2.56 billion annually for six years. United completed a second round of labor cuts in July 2005 to save an additional $700 million annually in labor costs’ (2006). They also have been given permission ‘to default on $6.6bn ([pounds sterling] 3.6bn) in pension plans, leaving 120,000 of its employees to rely on the government (in this case, the Pension Benefit Guaranty Corporation) for their retirement benefits’ (2005). This low employee morale results to low productivity and a high turnover rate of staff, which costs the company extra.
The apparent lack of trust in Tilton’s management is proving to be a source of weakness for the company. Generally, workers who do not trust their superiors are more cynical and less cooperative than those employees who have confidence in the management. This represents a major weakness on the part of the United Airline’s management, their inability to maintain credibility in the eyes of their employees, resulting to lack of trust. Much of what can be controlled by restructuring has been done ( 2005a), and there is general uncertainty as to whether the United management has the ability to pull through in the face of skepticism and difficulties.
2.3. Opportunities
As with any other business in the same field, there are realms of possibility for United. One opportunity is to cut labor costs by outsourcing and spreading flights out throughout the day, according to
2006). Outsourcing jobs for one, according to the United management, can save the company a lot. With regards to their meteorologists, ‘United tells the meteorological union, Transport Workers Union of America Local 540, [that] it can save $700,000 to $1 million by outsourcing their jobs’ (
2005b). This option is laid out for the airline to take or reject, as there are risks in outsourcing and spreading flights throughout the day will depend on the flight seasons. Another opportunity is to improve their passenger services. There have been negations against United’s claim that their passenger services are on excellent form. A statement by asserting that they have one of the best operating records in the industry - in on-time departures, baggage handling, fewest customer complaints and other areas to outpace the industry in unit revenue (Lopez 2006) have been contradicted by September 2006 statistics from the US Department of Transportation's . Therefore the company has the opportunity to better their passenger services in such areas as flight arrivals and baggage handling in order to decrease the number of customer complaints whose rash in the recent times could affect the organizational image as a whole. CEO is positive about the possibilities that lay ahead of the firm: ‘We have achieved a great deal in our restructuring to reposition this company and build upon our assets, an unrivaled global network and our dedicated employees. We can be better. We are in a very competitive industry, and we take nothing for granted’ (2006).
Another opportunity, as stated by , is the opportunity to innovate. Technology will help airline companies in taking advantage of this opportunity, as cutting edge-equipment and state-of-the-art planes are constantly being developed in order to provide ways to safely and inexpensively move people and goods around the world (2006). This year, the company offers flight discounts to passengers (2005) and they have the opportunity to increase their marginal profits through such means. As evidenced by a 2000 mega-merger of Arlington-based US Airways and United Airlines Incorporated and by current speculation of a Continental Airlines-United merger ( [2006] ‘Continental and United appear to complement each other well from a route standpoint. Continental is strong in the South and into Latin America, while United has a powerful presence in the West and throughout Asia), there is an opportunity for United to further expand their business horizon in China by a joint venture with Air China. Currently, the latter carrier is partnered with United, together with All Nippon Airways, Asiana Airlines, Australian Airlines, Lufthansa, Scandinavian Airlines System and Varig. This strategic alliance with other carriers assists the concerned airlines in penetrating individual markets through the regional carrier partners. Not only will United expand the scope of their market through venturing jointly with Air China, their partnership will also provide a cooperative effort in developing a common information technology platform. On the part of the United employees, spokeswoman for United’s flight attendants Sara dela Cruz said to the Denver Post that they have been preparing for a potential merger since 2004 in the hopes that it would bring additional jobs or the chance for contracts with better pay and benefits (2006).
2.4. Threats
If there are opportunities, there are also threats for United Airlines. One is the continuous rise of fuel costs, which has added to the overall operational costs of not only the particular company in discussion, but all the other air travel firms as well. Fuel expenses of United Airlines amount to around 27% of their costs, the second largest expense behind labor (2005c). In 2004 alone, an estimated $1 billion was added to United’s expenses due to rising jet fuel prices (2004). Last year, the Elk Grove-based company predicted that jet fuel would cost $1.48 a gallon this year before revising its estimate to $1.81 a gallon last week. Also last year, ‘United predicted it would break even if fuel remained at $1.48 a gallon, but the revised estimate would increase operating costs by an additional $885 million’ ( 2006). This had made the airline’s aim to be profitable while competing with fares of discount carriers harder to achieve. As , chief economist for Air Transportation Association admitted to, ‘There's not much more that can be done. I think we (as an industry) will come out of this fit, but it just will be painful getting there’ ( 2005a).
Fierce competition has hurt and will continue to hurt the company’s chances of being able to recover from their previous losses. As the airlines industry is on a state of crisis, the contest is set on its most vicious level, with every company in the field trying to outdo each other to get a bigger share of the market. Cheaper flying rates, enhanced in-flight services, more efficient land crew and improved overall customer services are abound, which United must strive to equal or better the competitors so that they could stay ahead of the pack, or even just to survive cutthroat rivalries. Also, rivals have begun contradicting United’s attempts to recover from the bankruptcy. One example is blockage of a $1.6 billion loan guarantee from the Air Transportation Stabilization Board that the company applied for in 2004 by an unnamed rival carrier. Financial Times published the summary of a 65-page document sent to the transportation board by the competitor and in it, the rival airline asserted that there is no ‘reasonable assurance’ that United will be able to repay a $1.6 billion loan and its revenue projections don't take into account market share loss to low-cost carriers (2004).
CHAPTER 3 OBJECTIVES OF THE PROJECTThis paper focused on one of the more immediate concerns of the United Airlines: unproductive workers. This project aims to analyze the current productivity situation of United Airlines and consequently present recommendations for its improvement. Its primary objective is to give recommendations to improve the level of productivity of the United Airlines Hong Kong check-in counter crew and boarding gate staff. These two areas of carrier service were picked from a number of areas in the airline, as they are the most visible areas in an airport. They are also areas in which most passengers have complaints about.
United is currently struggling financially, fresh from their three-year state of bankruptcy. That problem that United is facing right now results to more difficulties for the firm, some of which are employee discontent, lack of enough resources to fully implement their planned strategies that involve the purchase of advanced technological equipment designed to improve how the airlines is currently doing business and a rash of passenger complaints due to internal factors which would otherwise be remedied if the company is not experiencing such financial difficulties currently. With the present situation, United is poised in taking advantage of every available measure in order to create calm skies ahead of them. Defensive tactics aimed at reducing internal weaknesses and avoiding environmental threats are on top of their priorities list.
Improving internal weaknesses to take advantage of external opportunities comes next. The firm is also trying to use goals to motivate people rather than to control them, in order to subsequently boost their staff’s morale. On the customers’ part, they will also attempt to create a customer-responsive culture that conveys a sense of identity and belongingness. To speed up the efficiency and productivity is also a main goal, in order to strengthen their ability to face the crisis head on and sustain the revenue earning potentials. These objectives are targeted to alleviate the current plight of United Airlines in hopes of not going through a bankrupt state over again. Commented , director of the Chaddick Institute for Metropolitan Development, University, Chicago, ‘United has to cut more costs, increase productivity and widen its profit margins. They need to accelerate the timetable, and they have to find a way to get a 10 to 15 percent premium (over costs) out of their customers because they can't live on the 7 percent discounters get’ (2004).
CHAPTER 4
FACTS AND FINDINGS
A 2006 staff climate survey with a sample of 80 United staff is facilitated in order to determine the general perception of the employees with respect to the statements provided in the survey form. Since there is a prevailing lack of employee confidence in the United Airlines’ management ability to improve the current situation, it was decided that the best people who would know about the situation are the United employees themselves. Scoring is based on a 4-point Likert Scale where 1= strongly agree; 2= agree; 3= disagree; and 4= Strongly disagree. It must be noted that scores above 2.5 are positive. The 8 lowest scoring statements in 2006 are as follows:
1
Improvement to staff resting room facilities
2.28
2
Feedback system to supervisor
2.1
3
Encouragement/support by my superiors
2.3
4
Buy-in recognition system
1.9
5
Workload distribution
1.98
6
General dissatisfaction on current roster arrangement
1.97
7
I believe the current communication channels within the department are adequate
2.08
8
The current performance management system
2.23
Table 1. 8 Lowest Scoring Employee Concerns
The results presented in the table are some of the areas in which the employees of United feel that the management should give attention to. The staff resting room facilities, according to the respondents, is in need of major improvements, as they say that it is one of the most frequently used staff facility within the company. The feedback system to the department supervisor, according to the survey participants, is not as effective as can be anticipated. Encouragement and support from the superiors is also a source of employee concern. There is general belief within the United employee circles that they are not receiving ample support from the management. , president of Nelson Motivation Inc. in San Diego, California claimed in one of his articles that ‘Buy-in is critical to the success of any recognition program’ (2003). It is another aspect in which the United employees want the management to look into, as they are not satisfied with the current recognition system. Workload distribution is also seen to pose problems for the United workers. It is because workload is unequally distributed and does not equate to proper compensation due to the recent downsizing done by the United management in an effort to save the business from closure. Whichever way, the respondents agreed that it is indeed one facet of their work that is not appropriately given consideration to. There is also general dissatisfaction on the current roster agreement. Likewise, there is consensus among the employees that present communication channels are inadequate, contributing to the already poor relationship between employees and management. Finally, as voiced out in a number of interviews, , spokesperson for United’s flight attendants, stated that they are not satisfied with the current performance management system.
In the United Airlines site, the Hong Kong airport’s check-in information is as follows:
- Ticket counter hours of operation: 7:00am-9:30pm
- Customers with checked baggage should arrive 90 minutes before flight departure (2 hours if traveling internationally)
- Security line information
- Peak Times: 7:30am-8:30am, 9:30am-10:30am
- Peak Days: Sunday, Friday, Saturday
- Peak line wait: 20 minutes
- Off-peak line wait: 5 minutes
An Easy Check-In system, which the company claims to save time by avoiding line waits and having the passengers’ boarding pass ready for security checkpoints, is currently being offered to US-based domestic flights but as of the moment, the Hong Kong office is yet to experience such service. As for the boarding aspect, ‘United Airlines has unveiled new “automated boarding equipment” that it says will reduce the amount of time it takes fliers to get on and off its planes. United put its first of the five devices in place at its Denver hub on Thursday. The Y-shaped jet bridges connect to both the front and back of its narrow-body aircraft, allowing fliers at both ends of the plane to board and exit simultaneously’ (2006b). Called the DoubleDocker, the equipment links the gate to both doors in an effort to limit the time its planes sit on the ground. The Elk Grove Township-based airline said it plans to expand the use of the jet bridge to other airports but offered few specifics other than to say it is in discussions with other facilities ( 2006). This, like the Easy Check-In system, is not yet offered in the Hong Kong location.
The new boarding system in the United is similar to that of US airways, where they board customers in window seats first, followed by middle seats and then the aisle in an attempt to speed up the boarding process. ‘United now groups passengers at the gate according to their seat's letter designation. The carrier boards window passengers first, followed by those in middle and aisle seats. Passengers traveling in pairs or groups are kept together. Its boarding is now four to five minutes faster, saving the company about $1 million a year, says Robin Urbanski, a spokeswoman’ (2006). The new system has this effect on the airline: ‘Faster boarding means planes can get back in the air more quickly, both reducing delays and allowing airlines to squeeze more revenue-producing flying time out of their aircraft. Southwest cites its open boarding process – which it says allows for faster boarding – for helping to keep its operations efficient ( 2006c).
In addition to the above passenger services, Roger Fillion stated that ‘United has deployed more than 3,000 hand-held scanners in the U.S. It is adding wireless capabilities to them, so its computers are updated as soon as a tag is scanned, rather than waiting until a handler returns from his work and plugs his scanner into a computer. Although baggage-handling had been a growing problem for many years, United says its incidence of mishandled bags in February was at its lowest since 1984’ (2002). United spokesman says, ‘We have real-time information for where every bag is located. If a bag doesn’t show up where it’s supposed to, it’s easier to work backward to locate the bag and reunite it with the customer (2002). United received 345 passenger feedbacks from January to June 2006. Out of these, 126 or 36% were compliments while the remaining 219 or a majority of 64% were negative comments.
Although those stated above is the current case for United, the rash of passenger complaints are still very much visible. Some of the more common customer complaints are: (1) check-in processing time; (2) staffs’ attitude; (3) staffs’ politeness. All these complaints have a common denominator: employees’ outlokk towards their work. As a result of their discontent and distrust in the management, their work output is affected, as evidenced by the passenger complaints. It seems that United employees do not exhibit full eagerness when in front of their passengers, mainly due, at least according to them, to their not-so-conducive work environment.
CHAPTER 5
DISCUSSION
The facts and findings mentioned in Chapter 4 raised some serious issues in human resources management. Generally, United employees exhibit displeasure on how they are being treated by the carrier’s management. Much of the disgruntlement is directed towards the CEO . Academic theories have been found to support the knowledge that in order to improve employee performance, the management has to increase employee satisfaction first. The issue therefore, is focused on how to increase employee satisfaction on their work that would benefit the workers per se, while at the same time increasing productivity, which will benefit the United Airlines organization in turn. The US-based carrier has financial problems, but in order to get to there, Tilton’s management has to attend to internal matters first, not only because they have the responsibility of meeting their workers’ need, but more importantly because this affects the overall productivity of the firm. It is therefore imperative that the term ‘morale’ and ‘productivity are defined first, as they are the central issues at hand, which are affected by the subsequent factors that will be discussed in detail later in this paper. Various experts on the human resource management subject define morale in a number of ways. Morale ‘can be viewed as the attitude of an individual, group, or organization with regard to the function or task at hand’ ( 1992). According to , morale ‘concerns members' affective or emotive responses to the organization -- their general sense of well-being and enthusiasm for collective endeavors’ (1983). Morale encompasses constructs like intrinsic motivation, job satisfaction, experienced work meaningfulness ( 1975), organizational commitment ( 1979), and pride in one's work ( 2001). There are a lot of other definitions of morale that has been given in academic theory but the three meanings above fit the need of the discussions below. From these three, it will be derived that morale is a mind-set that affects how the workers respond to their responsibilities within the organization. Productivity, when technically defined, ‘is a measure of economic efficiency which shows how effectively economic inputs are converted into output. Productivity is measured by comparing the amount of goods and services produced with the inputs that were used in production’ ( 2006). This chapter will take the lowest scoring concerns of employees in the survey conducted within United as a point of discussion and theories relating to those concerns will be discussed in the following sections.
5.1. Workplace Facilities
In the survey, the employees felt that the condition of their resting room facilities needs improvement. In management studies, it is found out that the management of human resources is made much easier if the physical environment is geared to the needs and productivity of the individuals the organization employs (1979). The physical conditions of the work environment affect the enthusiasm of the workers in the performance of their respective duties and responsibilities within the organization. Attendance to this aspect of work by the management signifies the administration’s commitment to providing an environment contributing to high employee satisfaction, thus, high morale. In the context of United workers assigned in the boarding gate and the check-in counter, being constantly subjected to face high-strung and demanding flight passengers is not an easy job. The environment in which they are in require it to be as stress-free as possible. In the case of the rest room facilities, once the employees feel the need for a break from their exhausting work, they would naturally seek refuge in that particular area. Finding that it is not as conducive to resting as it could have been had the management given more attention to it, the employee then loses interest in taking the much-needed break. Consequently, stress could build up, and a number of studies ( 1990; 1999) have shown that stress decreases worker productivity. To this view, it must be recognized that the state of physical working conditions is relative to the level of productivity of people in the workplace.
5.2. Feedback System
Feedback is defined as the information people receive about their performance (London 2003). It is ‘the activity of providing information to staff members about their performance on job expectations’ ( 1990). According to Norman Hill, people need to know what is expected of them if they are to perform well and similarly they also want to know when they are not performing properly, but they want to know in a way that does not force them to swallow their pride or lose their self-respect (1984). The United respondents to the survey felt that the feedback system is not as effective as anticipated. There are two ways to interpret the previous statement: it’s either that they are not given adequate feedback regarding their job performance or they are given feedback but in an approach that is not agreeable to them. Generally, it is difficult for superiors to play the dual role of coach and judge that is required in most organizations (1984). The employees of United should allow for that. However, this is no excuse for their superiors to neglect their duty of providing feedback regarding the worker’s performance. According to , employees' reactions to feedback will depend on how the feedback is presented and on the readiness and ability of each employee to understand the feedback and change (2003). The role of the superior in-charge of giving feedbacks, then, is to determine what approach to use in delivering the feedback for it to have the greatest use for both the employee and the superior. ‘Feedback is such an integral part of the management process that every manager should develop methods for getting and giving useful feedbacks’ (1984).
5.3. Encouragement/Support
asserts that employees are less focused on the immediate paycheck if they feel they work in an organization that encourages growth and provides opportunities for training and education and skill improvement (2001). Simply put, they are more motivated to work if the work environment is encouraging and supportive of the workers. A quality of relationship between the workers and the superiors has been evidenced to affect the productivity rate of the former. report that employees with a higher quality of relationship with their bosses report higher levels of job satisfaction (1982) and commitment to the organization (1990) than do employees in lower quality relationships. According to , ‘The problem of low self-efficacy among people in the workplace leads to low productivity, low morale, low participation, less creativity and innovation, and high labor turnover’ (2004). The feeling of self- efficacy of the employees is thus important in contributing to increasing their productivity level. Superiors have the role of making their subordinates realize their self worth through such means as encouragement and support. The workers in United Airlines have related in the survey results that there is not ample encouragement and support from the airline management, contributing to the worker’s low level of productivity.
5.4. Recognition System
The need for people to feel positive about themselves is fundamental, as shown clearly from ordinary experience, as well as from applied research (1984). Recognition makes employees feel valued and appreciated, it contributes to higher employee morale, increases organizational productivity, and can aid in recruitment and retention (‘). The Baudville site gave five pointers to inspire management buy-in: (1) Tell them why it is important; (2) Have a recognition plan to present; (3) Ask for commitment; (4) Give them specific action steps; and (5) Provide recognition materials and tools to get started (2001). These suggestions may help in convincing the management that there is a need for employee recognition, especially in the case of United Airlines, where employee morale is low that measures for a better recognition system is imperative if the management wants to increase the level of employee productivity which would ultimately aid in getting out of the United financial crisis.
5.5. Workload Distribution
Workload has been shown to have an effect on performance and stress. ‘It is a common belief that heavy workloads lead to elevated stress and reduced efficiency. Unfortunately, the relation between workload and stress (as well as workload and performance) has received scant attention in the literature. What few studies do exist tends to use non-experimental, cross-sectional, and correlational methods. One influential model is Karasek job strain model. Tests of this model using correlational methodology have shown that the combination of low decision latitude and high job demands were associated with mental strain and job dissatisfaction and cardiovascular disease’ (1999). Downsizing was one of the strategies adopted by United to cut costs in the face of the financial crises. As there have been massive lay-offs in the recent history of United, the survivors of this downsizing have shouldered the responsibility of those who were unfortunate enough to be laid-off. The distribution of workload is therefore not as balanced as before. Fewer people with the same amount of work to do have further affected the morale of United workers. A serious look at devising approaches in order to justly allocate work among the remaining United employees is deemed important by respondents to the survey.
The contingency theory developed by Fred Fiedler is based on efforts to match leadership styles to the task situation. This theory may be adopted by the United management in distributing workload to the present employees of the carrier. As cited in described leader situations according to three task elements: leader-member relations, task structure, and position power. Leader-member relations may be good or bad. Tasks may be structured or unstructured. Leaders may have high or low position power. He suggested that these factors created a continuum of situations ranging from highly favorable to leadership, to highly unfavorable to leadership. Leaders with high task orientations, such as authoritarian or directive styles of leadership, are more successful when the situations are either very favorable or very unfavorable to the leader. The middle ranges of somewhat favorable, according to Fiedler, are best matched to a leader with a more relationally orientated style, such as is often found in democratic leadership styles’ (2003). During times of crisis, this contingency theory proves useful in that a shift in the leadership style may be called for under circumstances that are not normally encountered by the company. Through such means as determination of an effective style of leadership suited to the particular situation that the firm is facing, in this case a United Airlines financial crisis, the airline management could then proceed to the delicate task of distributing workload, which the employees would enthusiastically and willingly carry out.
5.6. Employee-Employer Agreements
The survey revealed that there is general dissatisfaction on the current roster agreement of the company. INSERT THE ACTUAL ROSTER AGREEMENT HERE. This is in response to the already small number of employees who cannot handle work hours exceeding the usual allowed by law, thereby refusing to work overtime, which subsequently caused the numerous United flight delays and cancellations. In retaliation, the management suspended several employees who refused to work overtime; particularly machinists who did not want to work overtime. An amiable roster agreement between the carrier’s management and its employees is still to be reached. The company unions are nevertheless hopeful that something can be arranged soon, if everyone in the organization were to cooperate in bringing United out of its current financial crisis. Ultimately, the reaching of an agreeable roster arrangement will lead to employee satisfaction, which will result to higher employee morale and lastly, to increased productivity.
5.7. Communication Channels
‘The study of organizational communication focuses on processes of interaction, means by which members create shared meaning, and strategic coordination of goal-oriented activities. Organizational communication is not something that transpires within a "box" (the organization) but rather what happens between people who are members of an organization or outsiders who interact with them’ (2000). Apparently, a majority of the survey respondents agreed that the communication channels set up within United Airlines is somewhat inadequate when compared to their needs to communicate with the management about their concerns. Helen Logan advised employers ‘to set up proactive channels of communication whereby staff has an opportunity to collectively express opinions on major company developments, and through which employers can communicate with them’ (2005). Catherine Avery also believed that clear channels of communications ‘have to be drawn, with ample opportunity for resolution of complaints’ (1997). Establishing a definitive communication channel within the United Airlines firm could potentially help facilitate easier communication flow, thus fostering an atmosphere of trust.
5.8. Performance Management System
According to (1999), a common characteristic of organizations that fail to achieve satisfactory results is their inability to secure employee commitment and buy-in to their strategic business goals and objectives. From the analysis of United Airlines, this maybe the exact reason why they are having a hard time recovering from their financial losses, in spite of the meager improvements that they are bringing out in the open. Open opposition from the employee unions, particularly the flight attendant’s union represented and spoken for by , is evident in how they attack every management decision that the company has made since the time United began to severe its harmonious working relationships with its employees. Ordinarily, the management expects trust and confidence from their employees.
But like respect, these two should be earned. As stated succinctly by ‘Top executives can usually expect both overt respect and obedience from their employees and managers. After all, the executives have the power to fire them. But whether or not the leaders earn their trust is a different issue, and executives ignore the difference at their peril. Without trust, the corporate community is reduced to a group of resentful wage slaves and defensive, if not ambitious, managers. People will do their jobs, but they will not offer their ideas, or their enthusiasm, or their souls. Without trust the corporation becomes not a community but a brutish state of nature, a war of all against all in which employment tends to be nasty, brutish, and short’ (2003).
United’s primary responsibility maybe in the business of answering the transportation needs of the people, but the medium through which the management achieves such responsibility is through its people. Therefore, the success or failure of accomplishing such duty depends chiefly on the management’s ability to work through their people. The (1996) model of organizational trust identifies the four dimensions of trust most broadly supported in various literatures: (a) competence in organizational leadership and the organization as a whole; (b) openness and honesty, including sincerity of communication; (c) concern for organizational members from their leaders; and (d) reliability, defined as the expectation for consistent, dependable behavior, including congruency between words and actions (2001). Other researches have described the relationship between trust in the management and organizational effectiveness and satisfaction (1996; 1996).
From these academic theories, it can be gleaned that the management of a performance system within the company is only possible if initial measures to gain back the employees’ confidence in the United management will be executed. Only when such confidence is gained back can the management start focusing on improvement of their current performance management system. predicted that the future of high performance systems will involve: (1) invention of a diverse team contributed by highly trained specialists in strategy development, compensation systems, skill/temperament assessment, training, MBO implementation, statistical analysis or operations methodology; (2) more, not fewer, staff and consulting experts, not just industrial or production engineers and cost accountants to maintain discipline of work and material flow but also experts in marketing, R&D, finance and operations strategies, experts in legal, social and environmental constraints, experts in assessment of human skill and temperament, experts in learning/training methods, experts in communications; (3) designating operating personnel as the court of final appeals in evaluation of problem solutions meaning that workers at the point of production or service delivery must be accountable for high performance goals, experienced in the basic processes required for their achievement, skilled or multi-skilled as necessary, and trained in operations basics; (4) scrupulous avoidance of the trap of trying to buy loyalty or effort and instead investing heavily in new or enhanced skills, and will pay fairly against market for high worker productivity; and (5) serving the customer's expectation for low-cost, high-quality customized product and service delivery within an operations context of work as significant personal self-expression (1993). Essentially, for a high performance management system to be effective and serve its purpose, teamwork within the organization must be developed. This can only be possible with fully functional communication channels within the firm.
CHAPTER 6 CONCLUSIONAfter in-depth analysis of human resources theories and how they relate to the current United Airlines employees’ situation, this paper found out that most academic literature on the subject point out to the management’s responsibility in the light of the circumstances. Although the employees’ level of productivity is a result of their own actions, there are undeniably external factors that largely affect how they perform on the job. These factors are both controllable and force majeure in nature. The latter, which commonly mean extraordinary events or forces that are beyond the control of the airline management, are things that the United employees have to live with. But there is no excuse for failure to do something about controllable external factors, and in it lays the main responsibility of the management to their workers. Conditions such as the physical environment in which the employees are working in and the communication environment within the firm are wholly manageable factors that theory and experience point out influence employees’ level of productivity. The survey results point out that the morale of the randomly selected respondents were low, due to such concerns that are not attended closely to by the United management such as the condition of rest room facilities, feedback system, encouragement and support form supervisor, buy-in recognition system, workload distribution, current roster arrangements, communication channels and the system of performance management. From these concerns do this paper derive the following recommendations, points which aim to boost the United employees’ morale and consequently increase the level of their productivity for the good of both the company and the workers as well.
CHAPTER 7
RECOMMENDATIONS
Companies can increase productivity in a variety of ways. In the ‘Productivity’ article entry found in , ‘the most obvious methods [of increasing productivity] involve automation and computerization which minimize the tasks that must be performed by employees. Recently, less obvious techniques are being employed that involve ergonomic design and worker comfort. A comfortable employee, theory maintains, can produce more than a counterpart who struggles through the day’ (2006). It is in these less obvious techniques that the recommendations are focused, coupled with more traditional employee empowerment method, which the United Airlines company can opt to adopt in the process of improving employee morale.
Job-enrichment programs should be given to employees. ‘Job enrichment is a motivational strategy that emphasizes motivating the worker through the job itself’ (.). Providing trainings, workshops and the like to develop and strengthen employee skills to handle unplanned incidents, customer services. These may eat part of the company’s budget, as those activities are hardly free, but in the long run, the return on investments will be enormous, as employees who feel that they are being valued by the management by sending them to skill-upgrading programs which will contribute not only to the growth of the company but also to their personal growth as well. Also, people who appreciate the importance of the acquisition of new skills will be more interested in doing their functions in the more effective and efficient ways that those programs would provide, that would pave way for job simplification. Job rotation, or the temporary lateral movement of employees in the organizational structure in order to become more or less familiar with the duties of their co-employees can also be applied. This fosters an environment in which no one is indispensable that could help a lot in situations where there is a shortage of skills in a particular period of time.
A review of the existing performance appraisal system is imperative to determine its loopholes, inaccuracies and ineffectiveness. By doing such, the management could then formulate a performance evaluation system which would help them better understand their employees, identify the areas of their strength and weaknesses and subsequently implement measure to build on the said strengths and improve on the weaknesses. A clear performance standard, the accuracy of ratings and the avoidance of leniency error are some of the many products of an improved performance appraisal system. An improvement of the current communication channels within the organization is also called for. Viable mechanisms for handling employee complaints and concerns must be developed in the process of improving the channels. pointed out that the hard costs of operating formal performance appraisal systems are measured in billions of dollars annually and that the soft costs might be even higher (1997). He specified that there are direct and indirect expenses associated with the following activities involved in performance appraisal: (1) preparing appraisals; (2) setting goals and objectives; (3) conducting interim and annual performance reviews; (4) reviewing at higher levels appraisals written at lower levels; (5) designing, printing, copying, filing, and distributing appraisal forms; (6) designing and communicating the appraisal process; (7) training supervisors, managers, and executives in the appraisal process; and (8) handling post-appraisal appeals, grievances, and lawsuits. These associated expenses will form part of the company’s investment in the process of developing a better performance appraisal system. As with the job-enrichment programs, this investment will prove worthy in the long run.
Management effectiveness must also be particularly reviewed. A management style that fits the needs of the United people must be formulated by the top management, in application of the contingency theory. There is also the need to maximize the impact of the management’s authority in facing the various concerns expressed by their people. In line with this, it is recommended that the management build a corporate culture wherein authority is respected and recognized by everyone within the organization. Holding open forums and adopting a participative method of decision-making are only two of the ways in which a trustful environment can be fostered. This process of managing effectively is not achieved in a short period of time and certainly not with a few tried and tested management theories. The United Airlines management must have an armful of strategies and tactics to realize this end. As the airlines business is fast-paced, there is also the need to constantly update such strategies and tactics to the changing demands of the airlines environment.
CHAPTER 8
IMPLEMENTATION
With respect to the job-enrichment programs to be implemented by the company, the human resources department will have to administer this program as they are the organizational department most equipped with the knowledge and resources needed in order to put job-enrichment programs into reality. The details of the program should be communicated to the people concerned, namely the airlines employees and their respective supervisors. There will be a need for training laboratories, new equipment and hours allocated for training which the employees would use to its full advantage. In the actual program phase, the employees will undergo skill-enhancing and upgrading activities such as training to be proficient in the use of the newly-acquired equipment to hasten the process of checking passengers in and boarding them on the plane, additional lectures for being polite to and mindful of clients and such other activities that the human resource department sees important in aid of the job-enrichment program. Finally, after the program, an evaluation by the trainers is important, to find out if such trainings conducted have positively influenced the mind-set of the employees and if they benefited from it. Through such evaluation, the human resources department will also be able to identify the areas where there is a most need for attention, thereby helping them in formulating and planning for future programs.The employee recognition program should consist of the determination if there should be an increase in the current compensation packages being offered to the employees. In this process, measures must be taken to ensure that there is a strong pay and performance relationship in the United organization. As suggested by the Business Research Lab, some recognition tools might include dinner certificates, a trophy or a plaque, cash bonuses, pizza party thrown in the recipient's honor, or for an entire group that has done a great job, bonus miles for airlines, a "top achiever" ribbon, a reserved parking space, an extra paid day off and movie passes (2005). An effort on the part of the management to issue circulars, give out notes, e-mails or voicemails to employees deserving of recognition should sufficiently show the workers that their efforts are being appreciated by the management and will therefore be motivated to perform better in the hopes that they will be recognized again in the future for a job well done. The recognized employees will also be a model for those who have not been recognized yet, inspiring them to do better so that they, too, may be recognized.
REFERENCES
EXECUTIVE SUMMARY
This paper presented a detailed analysis of the factors affecting the productivity level of the United Airlines Hong Kong office, with focus on the front line customer service staff of the airport in the check-in counter and boarding gate. The main objective of this document is to provide recommendations on how to sufficiently increase the productivity rate of the United employees. A number of factors have resulted to the decline of the airlines industry in general, and United Airlines was one of the casualties of this decline. In the current management’s effort to bring the carrier back on its feet, this paper presented a number of human resources theories and related them to the current business situation of United. Consequently, this in-depth analysis led to the recommendations and implementation at the later part of the paper. In the light of the bankruptcy state that the company had just emerged out of, measures had to be taken to fully improve the condition of the firm and maintain their competitive advantage over the other airlines company operating on an international level. A SWOT analysis of the United Airlines organization brought out important factors that significantly affected the turn out of this study. The results of the survey were also presented and analyzed as the groundwork for the discussions, which included the various human resources theories and how they relate to the current conditions of the firm. It was also pointed out that the morale of the randomly selected respondents were low, due to such concerns that are not attended closely to by the United management such as the condition of rest room facilities, feedback system, encouragement and support form supervisor, buy-in recognition system, workload distribution, current roster arrangements, communication channels and the system of performance management. After in-depth analysis of human resources theories and how they relate to the current United Airlines employees’ situation, this paper found out that most academic literature on the subject point out to the management’s responsibility in the light of the circumstances. Some of the major recommendations included the facilitation of a job-enrichment program, formulation of better and more effective communication channels and feedback system and the evaluation of the current performance appraisal system.
SECTION INDEX
Executive Summary
Chapter 1
Introduction ………………………………………………… 1-2
Chapter 2
Current Business Situation ……………………………… 3
SWOT Analysis ……………………………………. 3-10
Chapter 3
Objectives of the Project ………………………………… 10-11
Chapter 4
Facts and Findings ………………………………………. 11-16
Table 1 (8 Lowest Scoring Employee Concern) …….. 12
Chapter 5
Discussions ……………………………………………….. 16-27
Chapter 6
Conclusion ………………………………………………… 27-28
Chapter 7
Recommendations ………………………………………. 28-31
Chapter 8
Implementation ………………………………………….. 31-33
List of References ………………………………………………. 33-38
0 comments:
Post a Comment