Detailed Notes on Human Resources w Case Study - Qantas PDF

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HUMAN RESOURCES role of human resource management strategic role of human resources · Qantas is one of Australia’s largest employers, employing over 28000 people (92% based in Australia) across 200 separate job categories - $980m full year profit – one flight taking off every 34 seconds – 14.9% of all passengers travelling in/out aus – 65% domestic share – 3rd  oldest airline in the world – QANTAS AIRLINES LIMITED – Jetstar (subsidiary) interdependence with other key business functions · Operations – Staff need to be trained when new operations technology is adopted (e.g. new aircraft and security systems). Operational changes such as cutting flights during the GFC changes size and type of workforce. This could include redundancies across staff as customers fly less or moving staff to the budget carrier Jetstar as customers change their preference for air travel due to less disposable income. · Marketing – The right staff must be employed and trained to create the service that satisfies Qantas’ consumers. People are an important part of marketing at Qantas. · Finance – Recent financial decisions at Qantas like outsourcing, cutting flights to some destinations, launching new airlines in Asia have affected staff levels and the levels of industrial disputes (e.g. industrial shut down in 2011). Staffing is Qantas’ biggest expense. outsourcing

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human resource functions using contractors – domestic, global

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Human resource functions

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o Qantas has increased looked to outsourcing to become more cost effective and to simplify its business. Using contractors -domestic, global

Qantas uses subcontractors to create cost savings, access greater expertise and improve its competitiveness. Domestic o Jetstar has outsourced its entire call centre operations to Melbourne Operator Sales Force – projected $400m saving due to cost cutting in relation to outsourcing, technology, and innovation – initially work undermined dropped 9th  to 11th best airline in the world – now increased to 8th  best (Skytrax world airline awards) o O  utsources domestic voice, data and domestic services to Telstra o O  utsources data centres, its mainframe and mid-range computing operations and project management to IBM o O  nshore outsourcing larger planes from Alliance Airlines – due to frequent cancellations and delays on domestic routes and issues with aircraft and crew availability – QantasLink Chief Operating Officer Jenny Chamberlain admitted service is ‘disappointing’ – successful and resulted in Qantas buying 19.9%of alliance avation services – ultimately seeking Global o C  ontracts some maintenance jobs overseas to Singapore and New Zealand o E stablished a base in London for about 400 of its international flight attendants saving them about $18 million through rostering efficiencies and reduced accommodation and allowance costs o O  utsources its IT applications support and maintenance to 2 companies in India o O  utsources entire reservation system to a Munich based company called Amadeus, includes the moving of its inventory of fares, seats, departure control and boarding passes. o O  ffshore Boeing 717s for heavy maintenance checks after Canberra unsustainable – current workers are domestic contractors – no redundancy no consultation – culture is problematic - Singapore

key influences ·

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stakeholders – employers, employees, employer associations, unions, government organisations, society Employers

Qantas has restructured its organisation, outsourced more functions, relocated staff overseas, launched discount airlines and hired more casual staff to cut costs and increase flexibility. They have taken a confrontational stance with unions

Employees

Qantas employs over 28000 full time employees. They are concerned with existing levels of pay, working conditions and job security. They have been angered by Qantas’s cost saving tactics

Trade unions

Qantas has a highly unionised workforce. They are represented by 18 different unions. They have reacted angrily to Qantas’ drive to cut labour costs and have wages a political, community and industrial campaign against Qantas

Employer Associations

Qantas is a member of the Australian International Airlines Operation Group. They make sure Qantas’ concerns are represented to the government at the federal level and to the community

Government organisations

The government enacts employment relations legislation such as Fair work Act, Corporations Law, Work Health and Safety Act and Workers Compensation.

Society

Society want as few disputes as possible as they rely on the dependability of Qantas when travelling either domestically or internationally.

legal – the current legal framework – – –

the employment contract – common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts work health and safety and workers compensation antidiscrimination and equal employment opportunity

Qantas must follow the rules and regulation set out under the Fair Work Act, and other relevant HR legislation Ø The employment contract – common law (rights and obligations of employers and employees) minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts o Q  antas have had to implement the 10 National Employment Standards into their practises. o Q  antas will face big penalties if it is proved they do not bargain in good faith when negotiating new enterprise agreements.

Ø W  ork health and safety and worker’s compensation o Q  antas WH&S program has increased safety awareness and led ti an 80% reduction in employee injuries since 2001 o T hey must take out worker’s compensation insurance Ø A  ntidiscrimination and equal employment opportunity o Q  antas investigates and takes seriously all claims of discrimination o Q  antas ensures female employees are treated with fairness and equity. They have taken measures to increase the number of women in management (up by 11% since 2007) and on the Qantas Board (up by 15% since 2007) and support those in executive roles. 2011 industrial dispute – enterprise bargaining dispute between pilot, engineers, transport union, and Qantas – precarious international market – 31 October Qantas intended to lock involved employees out (3000ppl) potentially effecting 70 000 international and domestic customers at the time – workplace relations minister terminated industrial action with Fair Work Australia to get planes up again – impacted public perception – further decrease in share price $3 mid 2011 $1.80 Nov 2011

Economic

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Due to the GFC in 2009, there was a fall in demand for Qantas’ services as well as an increase in competition as part of the new global economy (globalisation). Qantas therefore reduced staff and froze executive pay in order to cut costs. – annual profit dropped from $1b to $100m – cut 1750 jobs due to GFC A pick up in the economy in recent years has seen staff numbers increase. However, they announced in 2014 they would axe 5000 jobs as part of a cost reduction program to improve profitability. Contributes to 0.7% of Aus GDP Technological

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Technological change in Qantas includes: Ø New security systems in response to terrorism threats Ø N  ew planes (Dreamliner and A380) Ø N  ew inflight entertainment systems Ø N  ew online check-in, self-service kiosks, etc. As a result, Qantas’ staff have had to learn new skills, or their jobs may have become redundant 2018 $3.2b fuel bill – Sydney University partnered with Qantas – QuadraX flight planning algorithm – mass data (weather, flight paths, aircraft configurations – optimal efficiency) – help airline tailor its routes and the aircraft chosen to service those routes to achieve max return on investment social – changing work patterns, living standards

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About 24% if staff at Qantas are now part-time or casual

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Female employees now comprise 41% of Qantas’ total workforce following an increase in the participation rate of women o 3  % pilots female (overall) o N  ancy Bird Walton initiative 2017 – committing to 20% intake of qualified women or 2018 Future Pilot’s Program – 2017-18 Qanatas almost doubled the number of female pilots in the pipeline. Across all of Qantas airlines 5% female pilots o Q  antas partnered with The Australian Financial Review to create the 100 Women of Influence awards (2018+) – recognise and highlight important contributions of Australia in creating a bold and diverse Australia

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Qantas have adopted more family friendly practises such as building new child care facilities and a keep in touch program for staff on maternity leave

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The number of women accepted into its graduate intake and leadership program has increased

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Population shifts have created a more ethnically and culturally diverse workforce at Qantas requiring more cultural awareness ethics and corporate social responsibility

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Modern society expects more form Qantas than just making profits. Example of HR programs implemented by Qantas are: Ø Working life – a health surveillance program, including flexible work practises Ø C  ultural diversity – Reconciliation Action Plan focusing on employing Indigenous Australians Environment – targets: o 1  .5% average fuel efficiency improvement 2009-2020 – 2018 had 7.5% improvement compared to 2009 o S tabilise net international aviation emissions through carbon neutral industry growth from 2020 o 5  0% reduction in net emissions by 2050 o 3  5% electricity consumption reduction from 2009-2020 – 2018 had 25.1% o 2  0% reduction in water consumption 2009-2020 – 2018 11.6% o 3  0% reduction in waste to Landfill by 2020 - 2018 25.7% processes of human resource management Acquisition

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Acquisition Ø I dentifying staffing needs – Qantas will conduct a job analysis to produce a job description which defines the scope of job activities, major responsibilities and positioning of the job at Qantas Ø R  ecruitment – Sources or recruitment for Qantas are internal and external. Due to high recruitment costs (advertising), these methods are constantly evaluated Ø E mployee selection – Qantas conducts interviews, personality tests, background checks, selection decisions, physical examinations which ends in a job offer and contract of employment. The wrong choice can be costly for Qantas Development

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Development

Training and development at Qantas is about a $275 million a year investment. Its objectives include: Ø Increased efficiency Ø I mproved quality of service Ø F ewer accidents and damage to equipment Ø P  ersonal growth of employees Ø M  ake employees more flexible and adaptable to change Ø R  educe absenteeism and staff turnover Training includes: Ø On the job (apprenticeships, coaching, job rotation, mentoring, etc.) Ø O  ff the job (simulation, Qantas College Online, day and block release at Qantas’ Centre of Service Excellence) Maintenance

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Maintenance

Ø R  emuneration – used to increase job satisfaction, reward peak performance and reduce staff turnover, Qantas has aimed to keep increasing pay by about 3% per year. Ø W  ork environment – excellent staff facilities help motivate and retain staff Ø F lexible working conditions – Increasing maternity leave from 10 to 12 weeks, up to 10 days’ carers leave, a keep in touch program for staff on maternity leave, new child care facilities in Sydney, Melbourne and Brisbane Ø I ncreasing parental leave for primary care givers from 52 to 104 weeks Ø C  omplying with existing legislation regarding human resource Separation

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Separation Ø Q  antas has had to downsize their staff over recent years due to the GFC, international competition, changes in technology and falls in profits Ø T hey have just downsized by 5000 staff over the last 3 years – involuntary separation

Strategies in human resource management leadership style

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Leadership style Ø Q  antas has adopted a democratic leadership style since privatisation occurred in 1995 Ø Q  antas employees now have much more input into decision making Ø U  se both centralized and decentralized organisational structure – differs based on domestic or international; – top management authoritative due to culture clash of shareholders vs employees – visionary o A  lan Joyce (CEO) § V  ision – management understand for optimal effectiveness need vision § E ncourages questions § S trong leaders – collaborative, honest, open job design – general or specific tasks

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There is a wide variety of tasks required in Qantas from baggage handling to flying the A380

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Qantas uses strategies such as job rotation, job enlargement and job sharing

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Job design is an ongoing process at Qantas aimed at allowing employee input, giving employees a sense of accomplishment, balances static and dynamic work and provides feedback about their performance

recruitment – internal or external, general or specific skills

Qantas uses a mix of internal and external recruitment ·

Alan Joyce (CEO) was an internal appointment, formally in charge of Jetstar

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Types of external recruitment include advertisements (online), contractors, head hunters, competitors ·

training and development – current or future skills Ø Q  antas has invested more than $275 million over the last 5 years Ø T raining is crucial due to rapid technological change and global competition Ø R  ecent training has included new security procedures, international business class, engineering and maintenance, leadership and culture, customer service, people and safety and informational technology procedures

Ø Q  antas uses online learning (Qantas College Online) Ø Q  antas’ 2000 pilots do vast amounts if training yearly in aircraft simulators, benefits of these activities to Qantas include: o E nhanced organisational productivity because employees can do their jobs more effectively o I mproved quality for outputs. A highly trained employee is aware of the significance of their actions o E nhanced ability to cope with change because employees have a variety of skills o A  more committed workforce performance management – developmental or administrative

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Ø Q  antas uses performance management as a tool to encourage string performers to maintain their high level of performance and to motivate poor performers to do better. Ø T he objectives of performance management at Qantas include: o T o provide a rational basis for pay and promotion decisions o T o assess the training and development needs of employees o T o help clarify strategic goals and performance expectations o T o provide individual feedback to aid performance improvement rewards – monetary and non-monetary, individual or group, performance pay

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Monetary – Qantas offer competitive wages and salaries, uses performance based pay for some employees – this means that direct remuneration is tied to individual, team and company performance. Cash bonuses based on profit o I ndirect monetary – staff travel program- siblings, step-parents, parents, partners, children – after leave after 5yrs (duration there)

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Non-monetary – Qantas offers interesting and challenging work, job recognition, job performance feedback, promotion, autonomy in the job, good relationships with co-workers and a safe and healthy environment global – costs, skills, supply

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The Qantas workforce is made up of 99 nationalities, speaking 51 different languages

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Employing a global workforce is challenging because of differences in culture, levels of economic development and legal systems

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Global costs – Qantas has outsourced some functions such as IT, maintenance and call centre operations to reduce labour costs. This can however lead to a reduction in standard of work and result in negative publicity (e.g. stapled wiring discovered on a plane serviced in Singapore

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Global skills – Overseas workers may need to be trained to become familiar with the Qantas business culture and practises. Qantas will use global staff for maintenance, IT and reservations due to their great expertise

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Global supply – Asia’s share of the global labour market will reach 65% by 2025. Qantas can take advantage of this through outsourcing. Qantas provides good working conditions which helps prevent a shortage of skilled labour.

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Global staffing approach – Qantas uses a polycentric and ethnocentric approach to staffing. Generally, tries to hire host country nationals instead of transferring its domestic staff to work in senior management positions in their foreign operations ·

workplace disputes –

resolution – negotiation, mediation, grievance procedures, involvement of courts and tribunals

Resolution – negotiation, mediation, grievance procedures, involvement of courts and tribunals Qantas has workplace dispute strategies in place to overcome disputes with minimal disruption. This hasn’t always worked to plan particularly in 2011-2913, however over the last 2 years workplace disputes have been dealt with much more amicably and successfully for Qantas

Effectiveness of human resource management

Effectiveness of human resource management Indicators ·

Corporate culture § M  ore emphasis on stronger Communication systems due to GFC. Some included flatter management structuresmeaning there is fewer layers of middle management and widening span of control allowing flexibility and adaptability for its employees. Also more emphasis on the process to resolve work conflicts in employment contracts and etc. § More emphasis on Training and Development used to improve productivity, quality of outputs and Qantas specifically uses online or electronic learning to train staff offering a database, email system, discussion system and much more. § Emphasis on much more flexible working conditions, increased paid maternity leave from 6-10 weeks, up to 10 days career's leave per year and building of Family-Friendly services such as child care facilities in large Australian hubs such as Sydney, Melbourne and Brisbane.

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Benchmarking key variables § Q  antas benchmarks the following indicators internally (previous year) or externally (different organisations typically in their industry)

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Changes in staff turnover § S taff turnover as increased from 4.6% in 2014 to 4.7% in 2015, however these are both quite an improvement on the 2013 figure of 5.5% and the 2009 figure of 8.7%.

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Absenteeism § Q  antas absenteeism rates decreased in 2013 and 2014 – 9.1 and 9 days respectively (from 9.6 days in 2012). This shows HRM is effective and reflects employee health and wellbeing, the level of staff engagement and productivity.

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Accidents § Q  antas uses 2 indicators – TRIFR (total recordable injury frequency rate) and LWCFR (lost work case frequency rate). These have both increased in 2015, indicating a deterioration in Qantas’ injury prevention performance.

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Levels of disputation § Q  antas has been plagued by recent industrial issues (2011 – 2013) with engineers, ...