Management of people in organization is a key element in success of the organization's business since human resource is the most important resource to business than any other resource at the organization's disposal. The main objective of any human resource management according to Fellows, Langford, Newcombe and Urry (2002:106) is to "recruit and retain the people it needs to undertake the workâ€¦anticipates shortages and uses its staff effectively". However, the recruited personnel need continued self development through training like in-service trainings, seminars, workshops to improve on their skills and knowledge in performance of their tasks.
On the other hand, drawing from Japanese culture if any problem exists at the work place, its not that the workers are not good enough but it is because of the poor techniques that are being applied at the work place (Grugulis & Wilkinson, 2002:25). Transformations occur in organizations in order to turn this organization from loss making venture to profit making organization. These transformation always demands change in organizational culture. Culture on the other hand refers to the way things are done in the organization. However, how people respond to change in organization determines to the greater extend as to whether the organization will attain its objective in using the proposed culture. In most cases, this leads to management challenges which might pose a threat to the survival of the organization.
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This paper is therefore going to analyze major challenges that were faced by British Airways in performance management, recruitment, selection and human resource planning and the employee relations.
Challenges in Performance Management
Good management style in organization is a determining factor for the performance excellence in its core business. Culture is therefore a determining factor in performance management. Culture according to Gennard and Judge (2005:45) concerns "an organizational internal environment." It includes the role of organizational culture, its importance and influence on employees. There are a number of factors that influence a company performance which may be external, for example, market share and the market environment that the business is operating under. Internal factors also have direct impact. These factors include company's culture, style of management and how human resource is managed (Patterson, West, Lawthom, Nickel, 1998:12).
Initially, British Airways had a challenge in management styles since most managers were using military approach to management (Grugulis &Wilkinson, 2002). It is common knowledge that the military approach espouses the use of authoritarian style in managing people. In this regard, it is only wise to assert that the British Airways personnel on the operation level of management were operating under fear in their work. This was a challenge to performance since the style inhibited the spirit of innovativeness among the personnel and therefore it killed creativeness in the organization.
In addition, despite management being a universal practice, environments and nature of businesses that organizations are involved in are dynamic and different from each other. In respect to this, managers who should be recruited should be having experience in management of a similar organization with similar functions. It was therefore a challenge that affected performance because the recruitment of managers at the airline was not based on their experience in working in a service industry but were solely based on their skills and intellectual ability. This posed a challenge in performance management of the airline since the managers had to adjust first to service industry management tasks before concentrating on performance excellence of the company.
It is also important to note that British Airways had a bigger challenge in performance management as it was performing disastrously as it was a haven of losses. This was brought about by a mixture of issues which included poor organizational culture that existed in the company. Losses were accompanied by discontent among the employees and dissatisfaction of the customers. Given that one of the obvious signs of employee discontentment is high employee turnover rates (Walter, 2004:12), the airline experienced mass employee exodus during this period. Needless to say, high employee turnover is a recipe for organizational destabilization and in the long a sign of huge losses for the company.
Recruitment, Selection and HR planning
Based on Kay and Banfiled (2008) postulations, the most important resource in an organization is its employees. Precisely, the authors clarify that, "no matter how sophisticated the systems, processes and technology of an organization, it is the capabilities and commitment of its employees that ensures success" (p.63). Therefore, it is important to note that for organization to meet its objectives and to be a profit making venture, sound recruitment, selection and human resource planning strategies need to be put in place. In respect to British Airways, its plans that related to recruitment and selection were poor since they were recruiting managers who did not have good experience in the service industry and who later employed military style of management in the service delivery. This led to disastrous organizational performance and the company was therefore destined to loss making.
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Staff discontentment existed among employees. However, as Kay and Banfiled (2008:14) opine, in any work environment employees will always want to be treated as rationally, to be valued as employees and to be allowed to work in a safe working environment, to be allowed to grow and develop as employees and to be paid and rewarded fairly. In absence of one of these factors, employees are subject to develop discontentment in their work which is likely to affect the company in a more negative way. It is important therefore that during personnel recruitment, professional methods be applied in recruiting the best for the company. Most importantly, there should be human resource management plans in place capable of fulfilling the employees' expectations as outlined above (Norman, 1984).
From a different standpoint, British Airways also experienced interpersonal conflicts between the top management and the operational managers on the ground. Precisely, the airline experienced challenges since the top management employed authoritarian approach even when relating with their juniors. In respect to this scenario, Brewster, Mayrhofer and Morley (2004:210) argue that "there should be a co-operative relationship among HR specialists who have expertise in selection and recruitment techniques and line managers who know better the skills needed to fill the vacancies in their department". This is important because it ensures that the right people are recruited for the right position and therefore it helps to prevent discontentment in later stage.
The Employee Relations
Before British Airways underwent what can be termed as a "human resources management revolution" employee relationships in the company were in jeopardy as commands only followed a top-down approach where employees on the bottom only obeyed and fulfilled commands without raining questions and had no input in the decision making processes. As it is affirmed by Harvey and Turnbull (2005:331), "the extent to which authority is developed to units within the divisional firm and the extent of subsidiary autonomy is an important determinant of employee relations and organizational performance". Ideally, when autonomy is distributed to several units in the organization, it reduces authoritarian approach and it distributes centers of power to smaller units than in the case of the centered authority of power.
However, after the revolution, the new management utilized good and recommended employee relations techniques which included improved remuneration schemes that included profit sharing and share ownership which made the company personnel to feel part and parcel of the airline (Analoui, 2002). Employees were also rewarded for efforts made and the management also encouraged staff inputs whereby ideas of the employees were also considered in decision making in the company. This brought innovativeness in the employees' activities and it all helped the organization to realize its full potential in the airline operations as it became the most adored company in the world (The Way We Run Our Business, 2008/2009).
Psychological Influence on Performance Management
Sound workplace relations entail the use of applied psychology. Ideally, applied psychology can be understood to be applications and development of ideas, theories and techniques drawn from different areas of basic psychology to a specific arena. Turnaround in the airline management led to use of applied psychology approach in order to revitalize the dilapidated situation of the company. The new management used varied means in order to improve on the performance management.
Some of the workplace psychology applied to bring performance management in the organization included, continued training of the staff, encouragement of the employees innovativeness and creativeness where by employees were rewarded for their innovative ideas that were successfully implemented. Moreover, the decision to make the staff to be part of the shareholders of the company can as well as be perceived as psychological. This was instrumental in turning the company into a profit making venture since employees felt part and parcel of the company. Even so, as Bamber (2008:4) opines, to obtain performance management, "a hard strategic approach to managing labour costs" need to be incurred by companies to achieve effectiveness".
Psychological Influence on Employee Relations
According to Chelladurai (2006:85) attitude "refers to an organization of several beliefs around a specific object or situation". In this respect, attitude is closely related to an organization culture and it's determined by the culture of the people in that environment. On the other hand, Bruce (1987:21) affirms that culture determines the performance of the organizations. Before British Airways revolution, attitude of its stakeholders i.e. the employees and customers in general, they had a negative attitude towards the airline operation and this was so because of the management culture that existed at the time. However, with a turnaround in the management, the old attitude was replaced with a more positive passion to perform better which was as a result of the change in the culture of the company that was changed by the new management.
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The new management prioritized change of attitude in order to improve the employee relations on the work place. Precisely, according to Grugulis and Wilkinson (2002), a training program was established by Colin Marshall who was the new company chief executive at the time. This training programme aimed at revolutionizing the staff attitudes. In the senior management, there was also a personal commitment to improve the performance of the company by making all the stakeholders participate positively (Street, 2003). The senior management wanted the employees to feel inspired, optimistic and have a sense of belonging at the work place. This improved employee relations and ultimately guaranteed the company a revolutionized revenue output. Most importantly, this approach challenged the myth that the airline was just a haven of losses and poor management.
Area of Improvement in the British Airways
British Airways employed some dirt tricks in the effort of fighting competition with its competitors. For example, Grugulis and Wilkinson (2002) assert that the airline gave misguided information to Virgin Airlines customers that their flights were not available in the effort of directing them to BA services. This was costly to the BA since it was later involved in court tussles that resulted to the airline paying heavy fines to Virgin Airlines. Ideally, this is an area that requires BA to improve on since it can incur heavy fines and the same time malign the good name it has struggled to build over the years.
Revenue turnover is always a primary objective of any company. However, this should not be the driving force in the company in that it sacrifices anything to realize profit in its revenue (Norman, 1984). It is therefore important to note that although BA was responding to pressure from its competitors, it was not logical and ethical enough to make most of its employees redundant to employ new people who would be paid even lower than the previous employees. This undermines the principle of human resource management and it is only with time that the new employees will be disillusioned when they learn that they are being underpaid and therefore, BA will be headed to its dark days. As Dormann, Peiro and West (2004:118) opine, the BA strategy to trim down its operational costs while stepping up its productivity backfired as it brought about redundancy. It is therefore important to note that BA should retain their already motivated staff to continue being competitive in the market.
There is no doubt about the opinion that sound human resource management practices were critical in the revolutionizing the airline. Before the new management started operation, there existed poor human resource management practices which made the airline to be a haven of losses year in year out. However, with the new management in place, good practices in personnel management which included the use of work psychology that entailed motivation of all the employee cadres, a rebirth of the BA was achieved. The human resource management practices that were employed included staff training that developed the skills, knowledge and techniques of the employees.