Human Resource Management : Emirates Airlines
INTRODUCTION
Expertise of HRM is specially required today for spearheading strategies of internal marketing for gaining loyalty of customers especially in the service industry such as airlines. This paper attempts to analyse the strategic HRM approach adopted by Emirates Airlines in this fiercely competitive industry where strategy is primarily driven by the ever rising consumer expectations and the global safety concerns. The topics covered in this paper include a brief company profile of the Emirates Group, a critical analysis of the HRM versus personal management debate, HRM in context, strategic human resource management, resourcing the organization, need of establishing a performance culture, importance of managing the employment relationship, significance of managing diversity, and the strategic learning process of the company.
COMPANY PROFILE: EMIRATES GROUP
Emirates Group, a very profitable business having a turnover of roughly US$18.4bn and employs more than 50,000 workers (Emirates Group, 2013a). The Group consists of dnata which is amongst the largest provider of air services globally and the Emirates airline which is rapidly expanding as well as an award-winning global carrier. Presently, Emirates covers more than 125 locations across six continents having a fleet of about 180 wide-bodied aircrafts. Emirates goal since their maiden flight in 1985 has been quality over quantity, and hence today is known globally for its commitment towards highest quality standards in every of their business aspect.
Though Emirates is wholly Government owned it has grew in scale as well as stature through competition with the constantly number of global carriers taking advantage of the open-sky policy of Dubai. The Government of Dubai after making the first start-up investment, deemed it best to consider Emirates as a completely independent entity, and as a result today because the company is thriving owing to it. Emirates’ success is driven by the continuous explosive growth and constantly striving for providing best service amongst the competition. Airline’s business of Emirates consists of an award-winning global cargo division, a thorough destination management as well as leisure division and an airline IT developer. Emirates Airlines fly nearly 1200 flights weekly from Dubai accounting for 40% of the total Dubai International Airport’s traffic (emirates, 2013a). In 2011/2012, the airlines carried over 34 million passengers along with cargo totalling 1.8mn tonnes.
HRM VERSUS PERSONAL MANAGEMENT
HRM can be defined as a coherent & strategic approach for managing the most treasured assets of a firm i.e. the people who work there contributing collectively as well as individually towards achieving the firm objectives (Armstrong, 2006). A debate regarding the differences, between personnel management & HRM only died down lately, particularly as HRM & HR terms are now being generally used in their individual right and also as a personnel management synonym. But HRM concept understanding is enhanced with the analysis of the differences among the two and how the traditional personnel management approaches evolved for becoming the HRM practices of today. Some authors have stressed HRM’s revolutionary nature (Storey, 1993). Others have contended that both concepts have no significant difference. Few authors proposes that personnel management grew by assimilating various additional emphases of producing a richer experience combination of and that HRM cannot be called a revolution but rather an additional dimension to the multi-faceted role. Armstrong (2006) had said that HRM is considered by some as just old wine but in new a bottle. He says although there might be nothing new in this idea, inadequate attention is being given to it by most organizations.
Figure : Similarities and differences between HRM and personnel management
Source: Armstrong (2006)
HRM IN CONTEXT
The commercial service industry of airlines is exceedingly competitive, high technology dependent and safety-sensitive. People, customers, and the employees not machines & products, should be a firm’s core competence area (Appalbaum and Fewster, 2004). The implications of this are massive and pervasive, which affect the organisation’s strategy, culture, structure and various operational activities. Today the need of HRM expertise regarding organisational & general development is specifically heightened, for spearheading strategic creation of a learning-oriented, customer-centric workforce having the capability to quickly adapt to the change imperatives and the strategic goals faced by airline industry.
Source: Emirates Group, Annual Report (2011-12)
The average workforce of Emirates airlines grew by 11.2 per cent to 33634 with the main growth from flight deck & cabin crew. The HRM is accountable for the satisfaction and the efficiency of the employees. Its goal is to help the firm in meeting its objectives as well as strategic goals through effectively management of their employees and thereby maintaining them. According to Emirates their investment in HR management for their A380 fleet before recession gave them a competitive edge with no other matching the services of their A380 during the period of slowdown. The Emirates group comprise of nationalities from 167 countries. But, being a firm of Dubai origins Emirates along with dnata has implemented on-the-job training facilities primarily designed for the citizens of UAE for encouraging new talent or recruit (Emirates Group Annual Report, 2011-12).
STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategy in airlines & the aviation industry is based on 2 fundamental drivers which have evolved since the deregulation of airline industry which include a growing worldwide safety concern and the continuously rising expectations of consumers of a varied service choice as well as service excellence (Appalbaum and Fewster, 2004). Research has many a time proved that the accidents as well as the quality of poor service are rooted chiefly in the sociotechnical human aspects and not as such on technology. Sub-optimisation or in other words poor quality of management, teamwork, decision-making, communication, or employee motivation could result in customer loss, market share loss, organisation assets loss and, most of all; it could lead to loss of valuable life. Therefore, in such a customer service-centric and safety-sensitive environment, the customary product focussed corporate structure industrial model or the industrial relations would be inappropriate (Appalbaum and Fewster, 2004). Expertise of HRM is specially required today for spearheading strategies of internal marketing for gaining loyalty of customers. The key strategic focus area would be the manner through which the human resource department supports activities, procedures & policies with the strategic organisational development essentials of the firm.
The HR department of Emirates Group supports the vision of the organization by creation of innovative as well as flexible HR solutions. These HR solutions help supporting the growth of the business and the commercial targets achievement, and simultaneously balancing the firm’s interests and its requirements concerning line department. The team of HR Business Support ensures effective and efficient employee relations by professional obedience with procedures & policies, while the team of Remuneration & Planning ensures the Emirates Group has policies which will enable them in attracting and retaining a high talent workforce, in all its locations (Emirates Group, 2013b). Besides traditional channels of advertising the Emirates Group also makes use of the social media sites as a secondary channel for promoting their brand and attracting new recruits. That is, they create a buzz about their company and invite everyone for joining the conversation. The Emirates Group wants people to talk positively about them and thereby creating brand ambassadors for both their firms. This approach has worked well for the Group. The Emirates airlines advertised for nearly 4000 cabin crew vacancies in 2011 on one of the leading online music sites of Europe reaching to ten million users which resulted in a 30% rise in number of applicants (Emirates Group Annual Report, 2011-12).
RESOURCING THE ORGANISATION
Organisational development is something which can be observed in high-performing firms. Successful, well-run firms like Emirate Airlines are frequently cited in various literatures for actively moulding their organizational culture with the help of their hiring processes, new employee orientation programmes, treating employees as the firm’s internal customers besides paying continued attention to line staffs opinions. When performed professionally and sincerely, such efforts could define a firm’s culture and leads to lowering of labour costs, productivity improvement and greater sense of employee empowerment (Appalbaum and Fewster, 2004).
HR of the Emirates group knows no boundaries for their recruitment process. They can go to any extent and to any place to look for bright, motivated individuals who have the desire & ability to challenge the status quo as challenging the established ideas is the core of their business model (Emirates Group Annual Report, 2011-12). The Emirates Group uses a sophisticated model of recruitment with normative values and assessment tools proven in over 165 different country citizens. For supporting their planned growth for the year 2012/13 the Emirates airlines is planning to recruit over 4500 new pilots & cabin crew members.
ESTABLISHING A PERFORMANCE CULTURE
Holloway (1998) contends that in a fiercely competitive marketplace, in which the service innovations can easily be replicated, a vital strategic variable which nobody can replicate is the airline’s culture. A key to a healthy organisation the CEO’s management style, good communications, incentive programmes, respectful employee treatment, good labour–management relations, and an effective recruitment process (Seal and Kleiner, 1999). The underlying belief according to Czaplewski et al. (2001) is that better the treatment given to employees, the better the employees would treat the customers. Shifrin (2001) is of the view that attention towards detail, collective decision taking and an open mind approach to new notions are typical trademarks of a successful airline. Image is yet another organisational culture dimension which has the ability of unifying a workforce. The airline’s culture impact on safety subculture of the organisation is critical for the airlines. Culture since long has been acknowledged as the determining factor of safety subculture of each carrier (Holloway, 1998).
Lastly, mergers & acquisitions, which is a permanent theme in this airline industry, seldom occurs with due diligence given to the human resource factors. Hence very few mergers prove successful in this global aviation sector. In fact, 65% of the M&A either hamper, or don’t create any shareholder’s value. O’Toole (2000) further states that mostly the reason of failure is the merging firm’s lack of attention towards the human factors during the due diligence process as well as the subsequent in ability of integrating organisation cultures.
Successful firms like Emirates Airlines give utmost importance to the culture of the organisation. Such firm’s plan & develop a customer-centric as well as safety culture on a continuous basis through creation of a lively and learning-oriented workforce which believes in community service and has the ability of responding to the needs & changes of the customer. Being a member of the service industry, firm’s like Emirate Airlines adopt employee-centred strategies (since employees should be empowered, committed participative, and motivated) for being far more consumer centric (that is, knowing customer-perceived value & risks). Hence, Emirates places a high emphasis on its recruitment, employee empowerment, selection, a proactive management style, organisational development and succession planning.
The Emirates Group HR team tries to understand the needs and aspirations of all its employees. According to Emirates Group Annual Report (2011-12) they believe that people perform best when provided a supportive environment. Hence the company continuously tries to find ways of saving time and boosting productivity. They firmly believe that each small measure taken counts. For example, Emirate’s Dubai based employees can now attend to maximum of their visa needs at the company’s headquarters itself getting rid of the time and issues in making unnecessary outside trips.
The employee productivity of Emirate Airlines measured as revenue per worker increased by 3.3 per cent to AED 1.73mn in 2010/11 over the previous year and to AED 1.79mn in 2011/12 as shown in the figure below.
Source: Emirates Group, Annual Report (2011-12)
Emirates Airways is a rapid growing airline having received over 400 international excellence awards which cannot be achieved without a world-class staff (Emirates, 2013b). This excellence & high performance focus is also echoed in the several local as well as international sponsorships of the airline.
MANAGING THE EMPLOYMENT RELATIONSHIP
Administrative & operational functions, principally in the customer service firms, are based on three vital factors of success which include management commitment, employee involvement and customer focus (Laszlo, 1999). These many believe is not observed in the airline sector, which is plagued by communication issues. Holloway It is suggested that communications must encapsulate what the airline firm is doing in their markets, what addition of value is it providing, and why the airline will be missed if not in industry (Holloway, 1998). There is hardly any empirical evidence of such kind of communication existing in this airline business. Organisation communications principally are a result of the structure of an organisation. Old hierarchical control & command and structures should necessarily make way for a de-layered organisation which enhance communications and get management of the firm closer to the employees as well as the customers. The shift towards this flattening of firms indicates a HRM shift from looking for control over the employees towards obtaining commitment from the employees. The HR group of Emirates besides focussing on recruitment gives a lot of importance to employee engagement.
MANAGING DIVERSITY
Cultural rifts in the airline industry are intrinsic to the international and multidimensional nature of this industry (Appalbaum and Fewster, 2004). Different groups within a firm can be considered as a different tribe resulting into intertribal conflict. Karlins et al. (1997) opines that when the behaviors or beliefs of a group don’t match with the actions or thoughts of another group resulting into intergroup hostility in place of teamwork. Emirates Group has a diverse workforce consisting of more than 160 nationalities providing the company a unique strength to be an international organisation. The company understands that talent is not only nationality exclusive, and thus their diversity of cultures, religious, nationalities as well as ethnic backgrounds enhances their workforce by facilitating new ideas, thinking styles & innovations which result in business success (Emirates Group, 2013c). The employee diversity of Emirate also matches Dubai’s cosmopolitan as well as multicultural population consisting of more than 85 per cent of residents being expatriates.
THE STRATEGIC LEARNING PROCESS
Emirates Group considers its people the heart & soul of the organization, hence recruiting, training as well as retaining the high calibre talent is amongst the core business values. Recognizing the significance of increasing knowledge & skills and self-development, Emirates runs high caliber training programs accessible to each of its employee throughout the Group (Emirates Group, 2013d). These varied courses are provided through numerous mediums which include on-the-job, classroom based, online (eLearning), simulation, practical assessment, project based and sometimes an amalgamation of the above methods. A LRC (Learning Resource Centres) network exists in numerous Emirates Group offices in Dubai which provide an atmosphere for group or self-based learning away from their busy workplace. Further has a learning portal by the name ‘My Learning Zone’ which offers a one-stop access point for training & development information as well as for online study courses for each of its employees (Emirates Group, 2013d).
The cabin crew of Emirates is considered as amongst the best comprising of a diversity of people from across the globe. As the firm’s cabin crew is on a constant basis in immediate customer contact besides also being responsible for each & every on-board operations, the company spends nearly 5 to 6 per cent of its revenues for training & development purposes in contrast to other airlines which generally spend around 3 to 4 per cent. Training & Development constitutes a very vital process for a firm. Training puts emphasis on the skillsets an employee would learn that would be utilized in their job. Big returns for an employer are ensured in context of contribution & productivity, if the employees receive training at the optimum time.
Emirates Airlines has adopted a systematic training approach. Theoretically, it denotes a 3 step process which includes assessment that is essentially a query as to the company requirements regarding an employee. The 2nd step includes the training activity that helps attaining the firm objectives as to that which would satisfy objectives & goals of the airline. The 3rd step would be the process of evaluation, which is measurement of the outcomes of the numerous training events (Stone, 2005). Emirates Airline acknowledged that their frequent flyers required a better service quality comprising the assessment phase. This drove their Emirates Airline’s objectives of offering a service that would be superior compared to any other service provided by any competitor. Simulation is also a kind of training provided by Emirates Airlines and is typically amongst the most costly training method types. Emirates Airlines makes use of simulation training as machine simulation, a term provided to the facilities which are offered to the employees which are the exact imitations of the actual work atmosphere equipment. In this increasingly demanding & competitive environment, retaining effectiveness as well as the quality of the learning & development while decreasing costs is the prime focus of Emirates Group. Their partner, Plateau acts as a crucial enabler of their flexible learning & development strategies. As a vital fragment of Emirates’ core infrastructure of their learning initiatives, this partner firm would enable the Emirates group in meeting current as well as forthcoming corporate training requirements while facilitating as well as expediting employee & partner training along with development throughout the world. To support the continued business expansion & growth, Emirates Group has embraced a learner-centric training approach of their employees as well as partners. Such initiatives encourage the individuals in taking accountability for their self-learning as well as development and facilitate training & development professionals along with the focus of the organization on improving performance as well as facilitating learning.
CONCLUSION
Emirates Group is a very profitable business having a turnover of roughly US$18.4bn and employs more than 50,000 workers. Presently, Emirates covers more than 125 locations across six continents having a fleet of about 180 wide-bodied aircrafts. Though Emirates is wholly Government owned it has grew in scale as well as stature through competition with the constantly number of global carriers taking advantage of the open-sky policy of Dubai. Emirates Airlines fly nearly 1200 flights weekly from Dubai accounting for 40% of the total Dubai International Airport’s traffic. HRM can be defined as a coherent & strategic approach for managing the most treasured assets of a firm i.e. the people who work there contributing collectively as well as individually towards achieving the firm objectives. Some authors have stressed HRM’s revolutionary nature while others have contended that HRM & personal management have no significant difference. People, customers, and the employees not machines & products, should be a firm’s core competence area of an airlines. The average workforce of Emirates airlines grew by 11.2 per cent to 33634 with the main growth from flight deck & cabin crew. Emirates’ investment in HR management for their A380 fleet before recession gave them a competitive edge with no other matching the services of their A380 during the period of slowdown. Strategy in airlines & the aviation industry is based on 2 fundamental drivers which have evolved since the deregulation of airline industry which include a growing worldwide safety concern and the continuously rising expectations of consumers of a varied service choice as well as service excellence. The HR department of Emirates Group supports the vision of the organization by creation of innovative as well as flexible HR solutions. The team of HR Business Support ensures effective and efficient employee relations by professional obedience with procedures & policies, while the team of Remuneration & Planning ensures the Emirates Group has policies which will enable them in attracting and retaining a high talent workforce, in all its locations. Besides traditional channels of advertising the Emirates Group also makes use of the social media sites as a secondary channel for promoting their brand and attracting new recruits by creating a buzz and positive word of mouth. Successful, well-run firms like Emirate Airlines are frequently cited in various literatures for actively moulding their organizational culture with the help of their hiring processes, new employee orientation programmes, treating employees as the firm’s internal customers besides paying continued attention to line staffs opinions. The Emirates Group uses a sophisticated model of recruitment with normative values and assessment tools proven in over 165 different country citizens. A key to a healthy organisation the CEO’s management style, good communications, incentive programmes, respectful employee treatment, good labour–management relations, and an effective recruitment process. Attention towards detail, collective decision taking and an open mind approach to new notions are typical trademarks of a successful airline. Image is yet another organisational culture dimension which has the ability of unifying a workforce. Culture since long has been acknowledged as the determining factor of safety subculture of each carrier. Successful firms like Emirates Airlines give utmost importance to the culture of the organisation. Being a member of the service industry, Emirate Airlines adopt employee-centred strategies for being far more consumer centric. Hence, Emirates places a high emphasis on its recruitment, employee empowerment, selection, a proactive management style, organisational development and succession planning. Emirates Airways is a rapid growing airline having received over 400 international excellence awards which cannot be achieved without a world-class staff. The HR group of Emirates besides focussing on recruitment gives a lot of importance to employee engagement. Emirates Group has a diverse workforce consisting of more than 160 nationalities providing the company a unique strength to be an international organisation.
REFERENCES
Appelbaum, S.H. and Fewster, B.M. (2004) “Human Resource Management Strategy in the Global Airline Industry – A Focus on Organisational Development”, Business Briefing: Aviation Strategies: Challenges & Opportunities Of Liberalization, US.
Armstrong, M. (2006) A Handbook of Human Resource Management Practice, Tenth edition, Kogan Page Limited London, United Kingdom.
Czaplewski, A J.,Fersuon, J.M. and J F Milliman, (2001) “Southwest Airlines: How Internal Marketing Pilots Success”, Marketing Management (September/October), pp.14–17, ProQuest, ProQuest Information and Learning Company.
Emirates Group Annual Report (2011-12) “Emirates Group Annual Report”, Emirates Group.
Holloway, S. (1998) Changing Planes: A Strategic Management Perspective on an Industry in Transition, Volume One: Situation Analysis, Ashgate Publishing Ltd, Aldershot.
Karlins, M K F., McCully, L. and C T Chan (1997), “Expanding Teamwork Beyond the Cockpit Door: An Integrative Program (“OASIS”) for Pilots, Cabin Crew, Station Managers/Traffic and Ground Engineers”, Aviation Training: Learners, Instruction and Organization, (Eds R A Telfer and Phillip J Moore), Avebury Aviation, Aldershot, UK.
Laszlo, G P. (1999) “Southwest Airlines – Living Total Quality in a Service Organization”, Managing Service Quality, 9(2), pp. 1–5, Emerald, MCB UP Ltd.
O’Toole, K. (2000) “Buyer Beware of the Human Element”, Airline Business (2000), Lexis-Nexis, Reed Elsevier.
Seal, J. and Kleiner, B.H. “Managing Human Behaviour in the Airline Industry”, Management Research News, 22(2/3), Lexis-Nexis, Reed Elsevier.
Shifrin, C. (2001) “Still Delivering”, Airline Business, 74 (April), Lexis-Nexis, Reed Elsevier.
Stone, R. (2005) Human Resource Management, 5th ed. John Wiley & Sons, Australia, pp. 371-378.
Storey, J (1993) “The take-up of human resource management by main-stream companies: key lessons from research”, International Journal of Human Resource Management, 4 (3), pp 60–65.
Online Sources:
Emirates (2013a) “The Emirates Story”, [Online] accessed on 1st May 2013 from http://www.emirates.com/in/English/about/the_emirates_story.aspx
Emirates (2013b) “Careers”, [Online] accessed on 1st May 2013 from http://www.emirates.com/in/English/about/careers.aspx
Emirates Group (2013a) “About Us”, [Online] accessed on 1st May 2013 from https://www.emiratesgroupcareers.com/english/about/companies/Default.aspx
Emirates Group (2013b) “Human Resources”, [Online] accessed on 1st May 2013 from https://www.emiratesgroupcareers.com/english/Careers_Overview/human_resources/Human_Resources.aspx
Emirates Group (2013c) “Cultural Diversity”, [Online] accessed on 1st May 2013 from https://www.emiratesgroupcareers.com/english/about/cultural_diversity.aspx
Emirates Group (2013d) “Human Resource: Learning & Development”, [Online] accessed on 1st May 2013 from https://www.emiratesgroupcareers.com/english/Careers_Overview/human_resources/Learning_Development.aspx