Enhancing team coordination along with Compensation employee relation

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Human Resource Management plays a key role in driving organizational productivity and hence enhancing profitability. It is highly likely that a better management could have a positive effect on the employee relationship, and indeed it is the sound relationship that drives the inbound communication among the employees of an organisation. The team coordination is a much debated topic for most of the organisations driven by the resilient aspects of human resource development namely compensation and employee relations.

The key objectives are to understand and inculcate the coordination skills in a team and hence adhere to the problems and benefits of compensation and employee relations externally as well as internally. In many cases poor team coordination has been a major cause in the lowered productivity of an organisation. There has to be greater knowledge among the employee of an organisation in relation to coordination and hence shifting from being a group into a team. The members of a group work randomly and are not coordinated and their personal interests are prioritized than the group itself. However, unlike a group, a team is coordinated and its members work for to benefit their team and themselves. To instil coordination among employees in an organisation, the Human Resource management formulates some strategies and policies to build a team and look after the benefits of the staff of an organisation.

Two of the aspects that greatly add up in building coordination among employees are the compensation and employees relations which brings consistency and transparency to the system, significant to gain trust of the employees. The compensation section of HRM looks into the matters of reassigning work, classifying the employees on the basis of pay, hiring temporarily. It also reflects upon the current market realities to the organisation and formulates bonuses in relation to criterion such as effective performance. The employee relations section is concerned mainly with the working environment that an organisation provides to its employees. Also it is concerned with relations among the top management and their subordinates. (Human Resource Management)

The generalised idea of the compensation policies of an organisation is the beginning to better employee relations and to maintain that conduct and synchronisation among the organisation and its HR standards, the departments of compensation and employee relation of HR in a company such as "Air Arabia" that plays a vital role. The company has been progressive, thanks to their newer approach that is leading them to profits and expansion giving them strong human capital to implement better HR practices. It is important to understand the company and its business before inspecting its HR policies and employee satisfaction. Thus, it would be better to analyse "Air Arabia" and understand the strategic management policies and fundamentals followed by the organisation. Then, it would be followed by studying the compensation methods employed and their effect on the employee relations.

Team Coordination and HRM

The US Coast Guard department conducts a program called the "Team Coordination Training" which has shown that about 60% of the errors in their functioning involving accidents and mishaps have shaped because of human error and lack of coordination. The reasons mainly included poor judgement, ineffective supervision and inattention. The skill to imbibe team coordination among the employees of an organisation is similar everywhere whether one deals with an organisation or an institution. Better employee relations and compensation policies could prove handy in improving coordination among employees and hence build a group into a team. (Team Coordination Training)

The team coordination, organisational structure and human resource management practices are linked to one another and hence an organisation's success or growth is directly governed by the balance which is administered because of such coordinated efforts. The various task coordination models which illustrate the market characteristics are vertical control, horizontal coordination and hybrid coordination. The human resource management is responsible for hiring, compensations, benefits, employee relations etc., and hence formulates policies and strategizes to coordinate the employees of an organisation to enhance productivity and also protect the employee's interests.

The greater the employee coordination in a team, the more is chances that it would rely on the horizontal coordination i.e., the employee relations and interaction between the top management and sub-ordinates would be better. Also the employees would play a vital role in decision making process.

The lesser the employee coordination, the more likely is the vertical control which implies that the top management would be involved in all decision making process and their interaction with the sub-ordinates would be unlikely.

Thus, team coordination plays a substantial role in enhancing productivity and bringing up the market value of an organisation. Hence, it is important to consider compensation and employee relations under HRM as an effective component which could tackle the problem of inconsistency and thus, structure the work environment. (T Kato, 2007)

About Air Arabia

Air Arabia was incorporated on 3rd February 2003 and began functioning from 28th October 2003. It started out as a Limited Liability company (LLC) and later on, transmuted into a Public Joint Stock company (PJSC). Since, then the organisation has shown tremendous growth in the areas of fleet, employee count, network and profitability. It is in a joint venture with Sharjah Airport which has enhanced its character of on-board products. Recently, a year ago the company began its operations from Casablanca, Morocco, the second hub for the aviation industry and also is interested in setting up a third hub in Egypt.

It is regarded as the first of its kind (Low Cost Carrier) to be operating in Middle East and North Africa region. Currently it has a widespread network over 57 destinations which is a remarkable feat considering its start of 5. Aviation Week also rewarded the organisation as top Low Cost Airline of 2009 for its resistance to recession and persistent growth. The company also has strong stand on the Dubai Financial Market, thanks to its large base of local and international investors. (Air Arabia Know us)

Vision and Mission of Company

The vision of the company is to be a leading budget airline in the world arena. Its vision reveals the purpose and the values of the organization. The company aspires to increase its global dominance in terms of reputation, profit margin, operational excellence, innovation and human capital. The company in the past six years has been pressing hard onto achieve its vision. The past of the company is the story of its success. Its policy of mergers and acquisitions has greatly reflected on its growth programme. The mission of the organization is to change radically the air travel in its limited realm of discourse. It is keen on formulating a business model and approach which caters to the need of its prime audience. The motto of the organization is to offer excellent and efficient services to its leaders, society, passengers and stockholders. The mission of the company greatly highlights its organisational purpose i.e., to be recognised as the best LCC in the world.

The aspiration of the organization is not random but highly organized and directional which has shown a constant increase in their profits and the quality of services offered by the company. The organisation has kept the interests of its employees in mind. The company has more than 1000 employees working presently growing rapidly adding to their abundant human capital. The company has been prospering and also shares a keen interest in the corporate social responsibility. It has by far managed to provide affordable air travel and also start the 'Charity Cloud School' which aims at providing better facilities in terms of education and health to the underprivileged people. Such an open step to the development of the society enables trust among its employees towards the organisation. The success of the organisation and huge profits even when hit by recession shows that the organisation is well structured and a hard working human capital. The continuous increasing human capital or employee base is because of sheer success and trust that is being dwelled in the minds of the employees. (airarabia.com Strategy)

Governance Practices

Air Arabia has been growing steadily and responsibly, thanks to its well-structured, controlled and administered policies and governance. The company supports and follows the international Corporate Governance Standards as guided by the resolution R/32 by Emirate securities and Commodities Authority.

The governance is nothing but set of practices a company employs. Air Arabia recognises these practices essential to provide a structured, controlled and directed relationship among its stakeholders and the top management and board of Directors. Such an approach has helped company pursue its objectives and implement policies determined to bring about progress to its current state.

The company adheres to the following standards:

The practices pursued by the Board of Directors and the top management must be standard and substantial.

The objectives and decisions undertaken to fulfil the objectives must be controlled in matters of environment and processes.

The agreements regarding transparency and revelation must be strictly followed.

The protection of stakeholders is the key to future development.

Air Arabia follows certain policies formulated to support the above standards:

Code of Ethics

Corporate Social Responsibility

Related Party Transaction Policy

Whistle Blowing Policy

Shareholder Communication Policy

Share Dealing Policy (Annual Report - Air Arabia, 2009)

Organizational Chart of Air Arabia

HRM in Air Arabia

The department of Human Resource in Air Arabia is headed by Rachel Abraham. She had earlier worked for Gulf News as an Assistant Personal and Administrative Manager. After joining Air Arabia in the year 2003, she worked in the company looking into the matters related to company policies, recruitment, performance management, employee relations, compensations and benefits, training and other HR issues. She has an extensive experience of over 10 years in relation with administrative services and human resource management. Since, she is known to have adequate knowledge of the UAE labour laws; the person of her stature is an asset to the organisation. Some of the HRM practices important in relation to team coordination are given below. (Management Team)

Compensations and Benefits

The compensation is related to wages/salary structure where the salary varies depending upon the designation, commission, merit and bonus availed by an employee. Air Arabia has a large number of employees in variety of designations and some are also paid bonus or commission depending upon the work they are involved in. Some of the many designations an employee at Air Arabia can hold are Performance Engineer, A320 Captain, A320 First Officer, Pilots, Cabin Crew, Cabin Crew Manager, Receptionist, HR Officer, Internal Auditor, HR Manager, Application Developer, Manger - Project Implementation and Production and many more.

Out of these many factors, let us study the compensation on the basis of designation which would further cover the bonus and incentives availed by an employee. Thus, the compensations and benefits availed by the employees are:

Captain

Compensations

Details of the Fixed Salary received by a Captain working for Air Arabia

First Officer

Salary/Flying Hrs on type

1000

1000 +

2000 +

Basic

15,500

16,500

20,000

Housing allowance

10,200

10,200

10,200

Transportation allowance

2,000

2,000

2,000

Uniform allowance

500

500

500

Total fixed Remuneration

28,200

29,200

32,700

(The Training period or the Internship done by a person who is not a permanent employee would receive the remuneration as specified in the first column corresponding to 1000 hrs.)

The wage or pay also varies depending upon the number of flying hours

Hours

Rate per Hr

1-25 hrs.

@ 30

26-50 hrs.

@ 60

51-75 hrs.

@ 120

76+ hrs.

@ 240

(110 credit block hours are equivalent to 84 flying hours)

in the flights of day time, 1 credit block hour's allowance would be paid per hour

in the flights of night time, 1.5 credit block hour's allowance would be paid per hour

an additional amount is being paid called the duty pay of 10 AED every completed hour of work

when an employee is called in off hours, then the employee is compensated with an amount of 280 AED

Benefits

Education Allowance - it is given for the education of children studying in or outside UAE of a working employee. However, the allowances vary as the amount given for a child studying in UAE is AED 100,000 and for one outside is AED 75,000. The applicable age of a child is from 4 to 18.

The officers can also have shares of the company worth AED 250,000. However, this is optional.

The loyalty is considered a charm in the organisation as every year a bonus is paid to the employee which starts with AED 500 and continues to grow as the services are continued by the employee towards the organisation.

Medial insurance is given to the family including three children and wife.

The employee is also covered under insurance scheme worth AED 250,000.

Bonus is given to the employee depending upon the work pursued by the employee

An end of service policy followed in UAE grants the employee an extra sum as one's services are terminated.

Annual leave of 45 days and annual tickets by Air Arabia are given for travel, hence offering beneficial travel allowances.

First Officer

Compensation

Details of the Fixed Salary received by a First Officer working for Air Arabia

First Officer

Salary/Flying Hrs on type

1000

1000 +

2000 +

Basic

15,500

16,500

20,000

Housing allowance

10,200

10,200

10,200

Transportation allowance

2,000

2,000

2,000

Uniform allowance

500

500

500

Total fixed Remuneration

28,200

29,200

32,700

The wage or pay also varies depending upon the number of flying hours

Hours

Rate per Hr

1-25 hrs.

@ 20

26-50 hrs.

@ 40

51-75 hrs.

@ 80

76+ hrs.

@ 160

in the flights of day time, 1 credit block hour's allowance would be paid per hour

in the flights of night time, 1.5 credit block hour's allowance would be paid per hour

an additional amount is being paid called the duty pay of 10 AED every completed hour of work

when an employee is called in off hours, then the employee is compensated with an amount of 220 AED

Benefits

Education Allowance - it is given for the education of children studying in or outside UAE of a working employee. However, the allowances vary as the amount given for a child studying in UAE is AED 75,000 and for one outside is AED 50,000. The applicable age of a child is from 4 to 18.

The officers can also have shares of the company worth AED 150,000. However, this is optional.

The loyalty is considered a charm in the organisation as every year a bonus is paid to the employee which starts with AED 350 and continues to grow as the services are continued by the employee towards the organisation.

Medial insurance is given to the family including three children and wife.

The employee is also covered under insurance scheme worth AED 250,000.

Bonus is given to the employee depending upon the work pursued by the employee

An end of service policy followed in UAE grants the employee an extra sum as one's services are terminated.

Annual leave of 45 days and annual tickets by Air Arabia are given for travel, hence offering beneficial travel allowances.

Cabin Crew

Compensation

Details of the Fixed Salary received by a Cabin Crew working for Air Arabia

The wage or pay also varies depending upon the number of duty hours

in the flights of day time, 1 credit block hour's allowance would be paid per hour

in the flights of night time, 1.5 credit block hour's allowance would be paid per hour

Benefits

The Medical insurance is given which is only for the employee.

Visa expenses are covered by the company for the employee only.

The annual leave of 30 days and an annual travel allowance is also given in form of free tickets for the family consisting of spouse and two children.

The bonus is given depending upon the performance of the employee.

The termination of services covers certain benefits as has been made mandatory by the UAE government.

Thus, compensations and benefits vary greatly as the designation changes. There was a noticeable difference in the compensation in terms of bonus and allowances of an employee designated higher to the one designated lower. This is based on the qualification of an employee and the work an employee is supposed to undertake. The benefits also are similar to the compensations with the higher management getting greater benefits than their sub-ordinates. (Careers in Air Arabia)

It is however important to note that even the lower level employees avail benefits covering their medical and insurance claims and gain bonus on working hard. Thus, the compensation and benefits provided by Air Arabia are at par with the international standards and governance policies formulated by UAE and the company. The compensation is given on the basis of job they do and even the minimal benefits cover the common benefits provided by any aviation industry.

Employee Relations

The Air Arabia follows an open policy to recruit its employees and does not discriminate among the applicants on any basis. Since, the industry is growing faster than ever; the recruitment process is quite flexible and also attractive for the most talented people of the aviation industry. The rapid development has generated a need for greater number of employees and the success has been to their advantage offering its employees with the best possible resources and benefits. Innovation and enterprise development are the key factors that drive the recruitment process as the company strives for expansion in all parts of the world. The open communication policy followed in the premises of this organisation is dwelling the airline industry with the best people around the globe who are creative and energetic as well. The selection policy does not discriminate the applicant on the basis of race, sex, religion, nationality, spoken language etc., hence the organisation enjoys a rich cultural and equally diverse. This has helped the company to expand to other areas in the world and indeed extend the charm of globalisation.

Recently the company introduced an "Online Recruitment System" which helped applicants apply for the jobs they considered themselves fit for, which is examined by the company officials later. People who meet the requirement are hired. Thus, the company is enjoying the promising power of information technology as well as making the process of recruitment much faster and robust.

(Annual Report - Air Arabia, 2009)

The figure above show the headcount growths i.e., increase in the number of employees hired over the years. Here the year 6 is 2009. Thus, a company which had begun with few employees and later went on to hire more than 1000 people shows that the growth has been steady and profound. Also, the count of the employees by recruited by the HR department is always up, even though the company faced the worst of the recessions in the year 2008. This shows the faith, trust and the bond of equality that the employees share with the organisation. The company adheres seriously to the problems of its stakeholders and society; this has helped it to establish itself effectively.

The internal environment of Air Arabia is rich and primarily focuses on building strong human capital, guided by top management team and providing exclusive benefits to its shareholders. The company is headed by Adel Ali who has been recognised as the 'Airline CEO of the year' 2008 and 2009. This has helped the organisation earn high level of transparency in their approach and expand their base. The stakeholders have earned rich dividends of over 10% in the recent years. The employees are sound and offer the company with resilient spectrum of global success making use of cutting edge technologies. The Charity Cloud Project started by the organisation was an effective step in their Corporate Social Responsibility programme. (Annual Report - Air Arabia, 2009)

Interview with Head of HRM

The interview with Rachel Abraham (Head of Human Resource Management), Air Arabia is as follows:

Air Arabia has been performing well over the past 6 years and has been profitable in spite of the recession. How has the company managed to do it?

The company follows a dynamic business model with a coordinated human capital which helps them to adapt to changing enterprise environment.

The strategy of the company was a clear indication of its strategic objectives. 'Pay less. Fly more' was an excellent idea incorporated in the aviation industry. The company since then saw a crucial increase in its profits and revenue generation. It is the first aviation industry to be included in the Dubai Financial Market where it improved on its share price and also provided its stakeholders with dividends of 10% per annum. The company has expanded at a higher rate over the past years and was merely affected by recession, thanks to its lower prices.

It is essential to remain on toes all the time because of the rapid changes that are seen in Low Cost Carriers. The ability to adapt to changing scenarios has helped the organisation cope up with recession. Thus, the company is well positioned to change or shift gears when required because of its well-structured and administered policies.

How would you illustrate the increasing competition in Middle East among the LCC's?

We had taken the initial step to introduce to the Arab world with such an alternative back in 2003. Such a compelling business strategy is quite lucrative and hence many of the airline companies have adopted the same but being the first has its advantage. We have had time to expand our reach to the outside world and hence give ourselves a brand name.

A better airline needs to improve its technology to cope with the changing world so that it could offer the best services at affordable prices and it must have the resources to implement the technology and run it. The company is in agreement with Airbus to provide 44 A320 aircrafts which gives a clear picture of their success story and spectrum of opportunities waiting to be unleashed. The Air Operators Certificate by Egyptian Civil Aviation Authority has opened a new door to their increasing global reach making Egypt as their new hub. Also, it has proved their worth and highlighted upon the employees who are talented and creative enriching their human capita.

Air Arabia Maroc was launched in the recent times. So, how's it going?

We had anticipated a market there for the LCC and also served as a passage to connect to the rest of the world. Hence, in terms of opportunities and accomplishments Air Arabia Maroc has been a smart business initiative for us.

The other major problem which an organisation faces when going outside one's own country is to find employees and hire the right one. This is because of the cultural differences that might prevail. However this matter was widely sought out in our case as we had already begun to hire people from all over the world. This gave us flexibility and also a rich culture among our employees. The global initiative taken by us was not wasted as we were prepared to deal with the other part of the world as we dealt with our own people. No out of the box change was required in the policies as they were dynamic enough to replicate to the change.

How important 'team coordination' is in your opinion and how have you managed to bring about possible changes in the company policies to reflect upon it?

Team coordination is of vital importance for not only the company's sake but also for the overall development of an employee. We take this matter to utmost sincerity and have laid out responsive governance practices to reflect upon it. I am specialised in the HR policies, payrolls, compensation and employee relations etc., hence with a decade old experience I have brought about better compensations and benefits to our employees. The basic benefits and allowance such as travel, medical, insurance cover, bonus etc., are covered by our company which has helped keep the young and talented minds around interested.

To build an organisation is to build its human capital. So how do you bring about this philosophy into Air Arabia and recruit the right people for the job?

There are a number of measures we undertake. Thanks to our newer online system of recruitment, the work gets easy and faster. Our employees undergo training before they become part of the company. This training process is more like an internship which helps them learn more about the company, its work and its policies. A person found fit for the job is hired later on as an employee.

To keep the people always interested we follow a policy of giving company shares to the employees. Thus they being our stakeholders they are our greatest assets and we hope that their growth is mirrored to the progress of the company and thus we shall be met by the highest level of operational excellence yet another year.

Conclusion

The company Air Arabia is a mere 6 years old which is quite less still has shown potential in its field by achieving exceptional feat over the years. By becoming the top performer in LCC for the year 2009, it is all set to beef up its brand name. The company has been exceptionally promising in implementing its business model in and out of UAE. The newer hub in Egypt is all set to connect them to the western countries mainly Europe for the time being.

The compensations and benefits provided by the company are at par with the western countries. The rich cultural diversity among its human capital is a reason to cheer for the organisation as it has managed to break the cultural barrier and move further encouraging globalisation and external contacts. The HR department is active and takes care of the policies that govern the organisation. The robust nature of the company and their dynamic approach which offers them greater flexibility is a boon for the employees working for them and is an attractive prospectus for the one's looking for jobs in this area.

Thus, Team coordination is important to build among the employees for a long and steady horizontal coordination. The HR policies such as compensation and employee relations have paved way for the same. The employee of today is smart and to attract a talented person to work for one's company requires changes in terms of policies, work environment and flexibility. The Compensation and benefits policy of HR is viable as it measures the employee performance and gives bonus to the deserving candidates. The more important thing to note is that the greater team coordination is helpful in applying sound judgement which is logical based on the available information. Thus, the standards set by an organisation must reflect upon the objectives of the company which must be well structured and governed. (Compensation Strategy)

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