Employment Relations Within The Airline Industry Management Essay

Nowadays, one of the largest industries in the global market is the airline industry. The airline industry is within the part of the business environment that constantly changes because of the increase in technological issues and because of the high competitiveness between the airline companies. Even though technology is constantly developing and taking over the power of the workforce in companies, people will always be the basic factor in the development of companies because of the fact that without people, technological advantages would not be exploitable. That is why employment relations are so important for the companies wealth are future development. Advantages of wealthy employment relations are improvement in productivity and also problems in workplaces are easier to resolve. Additionally, extra information and support is provided to members of staff (either managerial or simple employers) and unions on situations that occur within the workplace and the environment surrounded. 

One of the largest companies in the airline industry that comes to mind while speaking of employment relations is British Airways. BA is one of the largest Airline companies in the world and the largest in the United Kingdom, flying to over 550 destinations worldwide. Since the founding of the company, the increasing levels of market share and company development have been common to the eyes of the owners and the CEO’s of the company over the years. BA has approximately 40.000 employees in the company’s bases worldwide. Therefore good employment relations are essential if the company wants to avoid industrial actions that will interrupt their operations. As we will se in the following chapters, BA has not only developed good employment relations but the current situation that the company is in might become a fatal hit to the company’s future growth.

EMPLOYMENT RELATIONS KEY FACTS

It is not a simple procedure when trying to give a definition to what employment relations is. According to Ed Rose, employment relations is the”regulation of the employment relationship between employer and employee, both collectively and individually, and the determination of substantive and procedural issues at industrial, organisational and workplace levels.” (p.6 Ed Rose. 2001). according to Ed Rose and the definition above, we can see that employment relations is essential for companies in order to keep the relationship between the employer and the employee in harmony urging the workers to work on a top level, in order for the company to have a positive outcome and fulfil the goals set by the company. A balance between the needs of an employer and and employee will conclude into a good relationship and with its turn maximize productivity, the workplace environment will be more pleasant for the employer to work in, the opportunity for employees to develop their skills further will be increased as well as job satisfactions and they will gain more job security if the relationship is good as a result of voice initiatives.

According to Salamon (2000), “a trade union is any organization, whose membership

Consists of employees, who seek to organize and represent their interests both in the workplace and society and, in particular, seeks to regulate the employment relationship through the direct process of collective bargaining with management”.

In our days there has been a significant decline in employment relations when speaking of trade unions. Union memberships have fallen to approximately 7 million in the current workplace, from 12 million members in the past. Also, apart from the decrease in the union memberships, the focus of unions has also been changed and as shown in the Workplace Employment Relations Survey. Pay and working conditions are not the basic focus of Unions which spend most of their time supporting complaints that concern mostly individual workers.

According to Lewis (2003) there are five basic management styles when speaking of Industrial Relations, Sophisticated paternalists, sophisticated moderns (consulters), sophisticated moderns (constitutionalists), standard moderns and traditionalists.

The prime issue for managers is “focus”. Managers should direct their attention to issues that directly affect workers performance. It is a fact, that positive psychological bonding with employees has as an outcome increase in the economic performance of the company.

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BRITISH AIRWAYS

British Airways is one of the largest airline companies in the world and recruits thousands of employees in their bases around the world. Staff which are employed by BA have many representatives when speaking of trade unions. A sample of the trade unions associated with BA are BALPA, which is the representatives of pilots, BASSA which represents the cabin crew members and Unite the Union which represents other employees of the company.

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On the companies side, a team of he companies employees has been developed in order to carry out the employment relations plan that has been developed by the company by communicating, consulting and negotiating the changes that are made by the companies managers negotiating directly with the employees representatives from the different trade unions. In order for the consultation plan to be successful the company also makes practice visits to monitor the performance of plans launched by other companies so they can develop the best possible strategy for the companies’ success in employment relations issues.

In 2005 British Airways because of some incidents affecting the operations carried out in Heathrow Airport that had to do with the ground support staff the company launched a scheme called Industrial Relations Change Programme in order to prevent further interruptions. This specific program focused on the relationship between managers and Trade Unions and had as main objective to reduce the communication barriers between the two sides in order to better their relationship and increase understanding concerning issues that came to the surface. More than 1800 managers and approximately 220 Trade Union representatives attended the seminars to improve relationships.

The present for BA employment relations is all but positive. Constant strikes and as we can see in newspapers and on the news disagreements between managers and employees have lead the company into the difficult place it is right now.

The company’s relationship with the Unite that represents the cabin crew members have obviously been disrupted because of the fact that the company is making changes to staff contracts and is constantly cutting jobs in order to cope with the crisis that the global market is facing.

Since the beginning of the strikes on December 22nd BA had not faced any similar incidents for over a decade pointing out the good relationship between employees and managers until recently. As stated in the Telegraph online web page, there is deep unhappiness among the cabin crew staff of BA for these reasons:

Cost cutting, i.e. reducing the number of cabin crew from 15 to 14 on long distance flights.

Reduce wages, i.e. The Company argues that the wages of the cabin crew staff in long distance flights is extremely high as well as pensions for this period of time when going through a global economic crisis.

Re-structuring of contracts and the fact that BA have frozen pay.

Although strike actions are difficult to carry our because of the procedure that have to be developed Unite feels that workforce strike is the only solution.

Successful negotiations between the two sides have not yed been accomplished but Unite is optimistic that the outcome will be beneficial for both the company in general and the employees as well.

Most of the companies in the elite of the Global market have been affected by the economic crisis resulting into financial difficulties as well as workplace disruptions. Measures are been taken from companies such as BA in order to strengthen labour relations and also re-develop workplace innovation schemes for them to leave back this black hole in the global economy. Since the company is positioned in the public sector, BA has developed characteristics of a public company such as unionized actions and the development of a traditional employment relations strategy increasing relationships with the government and tighter relationship with companies in the public sector. In order for BA to “crawl” out of this crisis they have to develop modern workplace strategies to top the market and sustain their brand name.

BA should develop high performance work practises in order to develop a healthy workplace environment. Practises that the company should adopt are:

High levels of performance by creating value and implemented regarding of new capital and technological developments.

Development of human capital which will result in increased employee skills and improved customization of services.

Engagement of employees in problem solving issues and performance improvements.

Building of organisational social capital to ease knowledge sharing and coordination off work.

Research in settings especially for airlines have demonstrated the advantages to firms – in terms of improved efficiency, quality and financial performance – of work practices that encourage the simultaneous development of human capital and social capital. Workers benefit from improvements in skills and social capital, and more than 70 percent prefer these work systems over either traditional union or non-union systems. Unions are important – the combination of formal and informal mechanisms for employee voice improves the productivity effects of HPWP. For workers, the combination of union representations with HPWP tends to be associated with higher wages, some of which are achieved through mutual gain-sharing or similar compensation practices.

http://news.bbc.co.uk/2/hi/uk_news/8412490.stm

http://www.telegraph.co.uk/travel/travelnews/6810822/BA-strike-QandA.html