Japanese Airlines – A Case Study in Strategic Human Resource Management

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The world we live in is constantly faced with many new challenges that must overcome to survive in which business world is one of them. Changes in the world have affected many companies and industrial activities to develop and able to adapt in various kind of nature (Kearns, 2010). The most effectively modified to profit in the business world would be the approaching to human resource sector. For the past decades, human work force have been using like an operating machines, working hard and harsh. But in the present world, human work force can be call the most valuable assets for the business world, presenting as a company core competency and the force that would drive an organization to archives goals (Pate & Beaumont, 2006). Management in human resource currently have create and issues within the corporations, also as for the activating the service sector, in which the quality of interaction between costumers and service providers is very important for the success in the business activity. Airline companies have increase on the human resource strategies and policies to make use of them in the company values (Heracleous & Wirtz, 2009). This essay presents the most relevant human resource management practices to be adopted by JAL to cope up with the various problems.

According to Kearns(2010), "For most of the 20th century, the number of tasks and levels in large organizations grew incrementally, with new job and career opportunities to full-time employees". Opening the phase of 21st century have been about fundamental changes as because of many factors include global developments on technological and economical, also in labor market trends as well as the need of flexibility (Holbeche, 2009). As such, organizations have to temporary cancel some of their operations or closing the facilities. Need for cost reduction, plus speed and flexibility have made an organization to decrease a full-time employee's result in temporary employment. Global labor market trend is constantly facing an extensive transformation in which cause difficulty in recruiting an employee and to maintain quality workers (Hunter, 2006). Hence, private and public organizations are becoming reliant on alternative employee work patterns. The first step to be taken at JAL is to realistically analyze the current state of all HR-related matters and to develop a concept for its future development. This will revolve around the issues of market changes in coming years and the company's skills and core competences.

The management of people in the airline company is complicated by the pro-cyclical nature of the industry and the proportion and malleability of labor costs (Boswell, Bingham & Colvin, 2006). These factors have combined to necessitate cost cutting and to insure that those cuts are often focused on the labor. Competent management of people in airline is extremely important. Pilots occupy a position of considerable bargaining power and have not been averse to exercising that power. Flight crew is also an extremely valuable commodity for airlines due to their extensive training and their scarcity (Harvey & Turnbull, 2006). It is imperative, then, management generates a committed and satisfied flight crew community.

As per Kearns (2010), "The business plan should include a description of organizational structure, including management and human resources capabilities, philosophy and needs, the number of employees intended to hire, how to manage them and the estimated personnel costs". The objective of the HR action plan at JAL should be to build JAL's institutional capacity, productivity, and efficiency by effectively managing its most important asset, its staff. At the core of the HR action plan are measures to enhance and update HR management to attract, motivate and retain high-quality staff with the technical skills, behaviors and values needed to implement Strategy. This can be achieved by recruiting and developing staff with full commitment to JAL's mission and the proactive attitudes essential for adapting to a changing environment; providing stable and clear mid- and long-term employment with more clearly defined career expectations; and offering an enabling environment in which staff can fully realize their potential to produce high-quality products and services (Ruefli, 2007).

Given this relatively long-term employment model and the dynamic region in which JAL operates, the knowledge and skills sets of JAL staff need to be relevant and up to date. Recognizing the importance of keeping staff's technical skills sets current, JAL must in turn provide more learning opportunities. This will also support one of the thrusts of Strategy; enhancing JAL's knowledge products and services. A key element in providing such an enabling environment will be for JAL to adopt best HR management practices so its staff and stakeholders recognize that HR is being managed properly and in full support of Strategy. These will include offering attractive and competitive conditions that are in line with those at comparator organizations; implementing HR actions based on performance and merit that are fair, reasonable, transparent and consistently practiced; and providing career development and learning opportunities to enable staff to develop and continually upgrade their skills in an evolving environment (Miles & Mangold, 2005). Collectively, these measures are expected to address most of the issues highlighted by staff. These included career development and progression, performance management, staff development, salary and benefits, work-life balance. More effective communication with staff to manage the change is essential for JAL to achieve the intended impact for all actions.

In order to define a framework for development, SWOT (strengths, weaknesses, opportunities, threats) and PESTLIED (political, economic, social, technological, legal, international, environmental and demographic changes) analyses are helpful for JAL (Hamill, 2006). Customer and employee surveys can provide important information about the various stakeholders' interests. Analyses of competitors indicate current market position. But how does the company want to position itself on the market in the future? A vision helps the company define its aims and objectives (Doherty, 2005). This way, JAL can decide whether it wants to focus on price, innovation or customer relations. When the company has developed visions and aims based on upcoming challenges, they can check what skills already exist. They can then compare the current situation with future requirements using such tools as a qualifications matrix or a dynamic training requirement analysis (Holbeche, 2009). FAQs at such a time for JAL are: "What should our employees do differently in the future," and "Why are not they doing this already?" But one also asks, "what distinguishes a good employee from a bad one?'

At JAL, the human resource functions need to be called as the 'People Department'. Recognizing that the people are the competitive advantage, there is a need to deliver the resources and services to prepare the people to be winners, to support the growth and profitability of the company, while preserving the values and special culture of JAL. The importance of HR should be reflected in every human resource function. Recruitment, selection, training, performance management, compensation, benefits and labor relations all should be supportive to JAL's business strategy (Heracleous & Wirtz, 2009).

As a manager of a human resources department, diversity initiatives, team building, and leadership development would be very important parts of the strategy (Pate & Beaumont, 2006). There are several reasons for this. The goal is to keep the best and most energetic people with the company. Develop leadership can work along with personal goals with corporate goal and improve the trust to the organization. It also shows a sincere effort to improve the individual. Team building helps improve a sense of belonging and loyalty to the company. Many people who are known to each other and have common interest tend to work better together (Miles & Mangold, 2005). This will make an environment in JAL where it is pleasant to work and where employees are more inclined to help each other, especially during a crisis.

Safe and happy workplace make employees feel good to be there. Each individual is given importance and provide security that give them motivation to stay on. This usually can be achieved by surveys to be able to find out the satisfied level of the employees (Hamill, 2006). Open Management Employees dislike the feeling of not knowing the state of what happening in the company. They would feel more motivated when they have part in discussion of company policies, sales, clients, contracts, and objectives (Ruefli, 2007). This encourages participative management. Ask the employees for ideas on how to improve would make them think more creative. Being open about everything related to company, will help building trust and motivated the employees in JAL. Open management policy and be use and practice using several tools.

Good performance should be reward, such as bonuses or giving other compensation for well done job. With this reward system organization would not be struggle to keep up with attrition rate (Ruefli, 2007). Even if it is employee's job, completion in an appropriate and acceptable manner would create a more profitable profit, and this also can boost up the staff morality (Hunter, 2006). These incentive can be use at JAL, individual or at team level, this have been observe that this works, getting the best out of employees. Still the reward should not be given without reason unless it is for annual bonuses. Doing so would reduce the perceived value of bonuses (Kearns, 2010).

It is a well known for HR managers that hiring managers would try to begin the hiring process for a candidate that only have little idea of what exactly they are looking for (Boswell, Bingham & Colvin, 2006). Even when job description is available for them to refer to, they must be kept on reminded to use it as a reference tool or else they are wasting everybody's time. Hiring managers must review what it is that they are looking for. Each year, requirement and criteria change. It is necessary to post all jobs that is vacant on company website so that everyone knows about it can apply for that some might be qualified (Harvey & Turnbull, 2006). Candidate must need to conduct on behavior and technical test first, and then telephone screening, next as for face-to-face interview. The first advantage of testing is that there are no surprises later about their abilities. It make recruiting process tighter and more quality quantified and having constant process make recruiting consistent across all departments (Doherty, 2005).

JAL should publicly explain almost every detail of the practices to be used to select employees. In theory, any company could attempt to copy the process and claim it as their own, but it would probably fall for a number of reasons. At JAL, much more energy and time should be expanded on the process. To find the right people, they should spend the money up front on the selection process, in the belief that it will become worthwhile over time (Ruefli, 2007).

What should managers at JAL look for in the selection process? The approach should place great emphasis on hiring based on attitude. The search should be for something that considers to be elusive and important: a blend of energy, humor, team spirit, and self-confidence. These key predictors should be used at JAL to indicate how well applicants will perform.

There should be centralized process that will help the organization as the applicants will have to go to one place and specialists trained in selection techniques can assist in the process of deciding which candidates should be hired and where they ought to be placed. JAL should keep the line managers and other employees involved in the process, and doing so will benefit the company for a number of reasons. Employees who will get the opportunity to contribute in the selection of their team members will become more committed to helping them succeed, and the process will also give them a sense of urgency (Pate & Beaumont, 2006). The involvement of all levels of management and employees along with the HR department in the selection and placement process will help in building a strong network of employees. Thus, it will help JAL in providing the right attitude and service to its customers.

There should be sound procedures in place for any level of selection, be it in the form of personality tests, interviews, or other assessments (Ruefli, 2007). The selection and placement decisions, however, should be ultimately made by a combined panel of line managers and specialized representatives from the 'People Department'. These decisions will seem to be made with the full participation of present employees in the spirit of true partnership.

There should be great emphasis on specialization and training. The training of new hires should be focused on building relational competence as well as functional expertise. Each new hire should receive classroom training and on-the-job training (Boswell, Bingham & Colvin, 2006). Orientation should include ample exposure to JAL's culture. Training should be broadly focused so that the new employees understand the jobs of other JAL staffers they may have to interact with. This will help employees to understand how their job fits and they can support others, consistent with the team aspect of the culture.

At JAL, sharing of information such as contact and financial information with employees is a must so that they would understand the decision that has been made (Doherty, 2005). Passing this process, employees learn about the business, which is more than just a creative subject. This involves making a strategic decision to allow on contracts that are along with business and strategic business models (Hamill, 2006). People have knowledgeable and understand where money comes from and go to. They know what happen at bonus time and why it does or doesn't get paid out. People become more knowledgeable about business and feel more importance about their contribution and impact (Ruefli, 2007). Employees have changed their focus on just their job to the whole company. The importance of labor relation cannot be underestimated in any company (Harvey & Turnbull, 2006). As the JAL employees' union members and IASCO employees were not have the union less bargaining power. Pay and benefits of all employees should be specified through the collective bargaining.

JAL began to hire non-Japanese employees and pay labor wages. All employees should be paid equally at or above-market pay. It should introduce the profit sharing plan. Stock purchase plan should be introduced which will allow employees to purchase stock shares from payroll deductions at a discount (Miles & Mangold, 2005). JAL should provide attractive benefits packages. Employees should receive medical insurance, dental insurance, vision coverage, life insurance, long-term disability insurance, dependent care, adoption assistance and mental health assistance (Doherty, 2005). This will let employees to know how much they are valued by helping them in times of need, be it with financial assistance or something else. Moreover, there should be job security. JAL should not have a layoff and it will help the employees to realize that job security is an important benefit provided by JAL.

Paying bonuses or having any kind of variable compensation plan can be either an incentive or a distraction, depending on how it is administered and communicated (Pate & Beaumont, 2006). Bonuses should be giving out in a way that the employees understand that this payment is due to the company hits a certain level of profitability. Then the criteria of giving out can be base on team success and individual success. It is based on performance, criteria is consistent for everyone, it is related for the employees to the success of the company, brings the necessity profit into reality, creating people to focus more on team (Harvey & Turnbull, 2006). JAL should incorporate profit sharing, stock options, other non financial-based incentives, and a great communication plan for when a bonus plan is there.

JAL's employees' evaluations should be based on demonstrating the spirit of outrageous customer service. Managers who will give an employee superior performance ratings must include documentation of actual examples of exemplary customer service that warranty the rating. Performance measures to be used should be cross functional (Kearns, 2010). This will motivate cooperation rather than competition. At most of the airlines, delays are attributed to specific units such as fueling, cleaning or baggage handling. At JAL, delays should be tied to the entire team or process, reducing blame shifting, and encouraging employees to assist other functions when needed (Miles & Mangold, 2005). Performance measurement should be used as a performance management tool to foster cooperation, learning, and improvement.

This essay is attempting to solve the problems faced by JAL. Eventually, employees form the greatest asset and must be continuously nurtured and developed as company strives to maintain reputation for excellence in the highly competitive global air travel industry. JAL should adopt a multi-faceted approach which incorporates all aspects of HR, which serves its employees from Recruitment to Retirement. There is a need to continuously improve processes and strategies. The "people factor" should be given top priority across the whole organization. Feedback and inputs from management, other divisions and diverse employee groups should be welcomed, and this will immensely contribute towards improving the standards and quality of output. JAL should have such an environment in which people can work well to the best, including the enjoyment of working that employees can develop, and be able to perform the most out of their ability and talents.

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