Heavy Cost, Reduction in Profitability, Losses, and Damage to Corporate Image

The provided assignment content highlights the serious HR issues faced by Flyhigh, a firm experiencing dissatisfaction among its employees. The main problems are the flat structure, lack of motivation, and accusations of favoritism. To resolve these issues, HR manager plans to modify the company culture, change employee roles, and provide effective training. This will help to reduce profitability losses, maintain harmony in the organization, and improve labor relations. The plan involves introducing a hierarchical structure, formalized wage structure, and labor welfare programs.

MANAGING
HUMAN
RESOURCES

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
ILLUSTRATION INDEX
Illustration 1: Organizational Structure...........................................................................................4
Illustration 2: Maslow's Need Hierarchy Pyramid...........................................................................5
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INTRODUCTION
Human resource management is a function in an organization which is designed in order
to maximize performance of an employee. Human resource management is primarily concerned
with the management of people within an organization while focusing on policies and on
systems. Moreover, human resource management is also concerned with the process of
recruitment and selection, training and development, remuneration, providing healthy and safe
environment, handling the conflicts, etc. This report mainly focuses on human resource
management of Flyhigh plc which is a low cost airlines company headquartered at UK.
Moreover, discussion has been made in the report about the HR issues which the company is
facing and suggestions are made in order to resolve the issues by applying the relevant theories.
MAIN BODY
Flyhigh is a low cost “budget” airline which is operating its business in UK and is serving
in parts of Europe and Asia. This company was started in the year 2007 as the low budget airline
with the purpose of satisfying the need of business people but then it expanded its operations and
it included holiday travel to a small selection of popular tourist destinations. As it is known that
there is a cut throat competition in the airline industry by major players such as EasyJet, Ryanair,
Flybe, etc. due to which there is a shortage of pilots and aircrew members within the industry. It
created the problem of staffing in the industry. Such issues usually impact the low cost
companies and in this case, Flyhigh has been highly affected by the issue which have aroused in
the airline sector. Due to this, growth of the company has become stagnant as the brand image or
reputation of the company has been damaged. Flights get delayed and even canceled at short
notice due to conflicts happening in the industry. This has caused frustration in staff members
and forced the company to hire agency staff which exceeded the cost of the company.
The highest shareholder and managing director, Muhammad Saleem, who is well known
business man and entrepreneur was managing human resource of the company. But managing
employees was not his strength and due to which the company witnessed staff turnover in a
company especially in senior management team. The consequences which the company is facing
in this fierce competition have emphasized the company to hire new HR manager and for this
purpose, firm hired Robert Walker from the rival company Ryanair in order to address the
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problem and give solution to the problem . Robert identified several issues related to staffing and
selection of people. The company did not have proper staffing model and the selection processes
were also not properly followed. The selection process involved several steps which included
recruitment to be done internally or externally than preliminary screening should be done and
those candidates are selected for further steps that have fulfilled all the criteria and rest all were
rejected. After that, tests should be conducted and employees could be selected on the basis of
skills and then personal interview should be conducted where the candidate should be tested
closely. After that, those employees who cleared the interview are selected and all other are
rejected. Thus, HR manager should follow these processes and then only they should select the
staff members. Moreover, the recruiter should follow employment law and other anti-
discriminatory law so that unfair practices can be removed from the company.
Further, the company faces issue of organizational structure. The company is following
flat structure in which there is no departmental head and only one head is managing all the
people. In such structure all the workload is on the heads of a single supervisor and this causes
overlapping of the work. New HR manager wanted to change the structure to hierarchical
organization so that every department should report to their respective heads. However, flat
structure sometimes proves to be good because employees do not get confuse and they get
interpreted in a proper manner by the single supervisor. On the other hand, hierarchical structure
helps in lowering down the workload of a single person and through this overlapping of work
can be avoided.
(Source: Types of organization, 2014)
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Illustration 1: Organizational Structure

Moreover, the morale of the staff member is not boosted due to which company is facing
issue of low productivity and high employee turnover. For this purpose, HR manager should
motivate employees by using several theories of motivation that is Maslow's Need Hierarchy
theory and Herzberg's two factor theories. If these are adopted than employee will get satisfied
and will work efficiently which will lead to more productivity and less employee turnover. Maslow's Need Hierarchy Theory: This theory state that people have many types of
needs and those needs are divided into 5 levels. Thus, HR manager has to understand the
needs of the people and aims to satisfy those needs and if the requirements of the
employees get satisfied than eventually they will be motivated.
(Source: Hierarchy of Needs, 2015)
 Herzberg's Two Factor Theories: There are two factors which motivate employees at
workplace that is motivators which includes achievement, recognition, advancement, etc.
On the other hand, there are hygienic factors such as company policies, working
conditions, supervision, security, etc. HR manager should ensure that all these factors are
provided to the employee of Flyhigh so that their morale gets boosted and through this,
employee turnover can be reduced.
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Illustration 2: Maslow's Need Hierarchy Pyramid

Moreover, Flyhigh should make sure that employment law should be followed and any
unfair labor practices should not be adopted. As in this case, aircrew staff is considered to be
elite which make other employees feel that they are considered inferior. It has been disgruntled
that employees often complaints that family member of the managing director are valued more
and they are provided with all the rewards. Thus, it can be said that reward system is not proper
and favoritism is practiced in the organization. HR manager should employ the anti-
discriminatory act and other fair labor practice acts in order to remove discrimination in the
organization. If this is adopted than employees will be more satisfied and will not resist for any
changes and similarly during crisis staff will not be against the company policies (Holton and
Swanson, 2011).
On the other hand, there is one more issue related to wage payment. There is no
formalized wage structure in Flyhigh and rise in payment is done on the ad-hoc basis. This leads
to the reduction of enthusiasm among employees and due to this, they do not work in an effective
manner. In order to motivate the employees, company should have a proper wage structure so
that employees get satisfy and work with full potential. This is supported by several theories
related to wage payment and HR manager should adopt these theories in order to manage their
employees in a proper manner. Some of the theories are described as follows: The Bargaining Theory of Wages: This theory was propounded by John Davidson, in
which he stated that wages should be fixed as per the bargaining power of employees
(Köster, 2007). Thus, HR manager should be raise the wages by negotiating it with the
workforce. This will provide a sense of satisfaction among employees. Behavioural Theories of Wages: Some of the behavioral scientist proposed this theory,
in which they explained that there are several elements such as employee's acceptance
towards a wage level, the prevalent internal wage structure, employee's consideration on
wages and salaries as motivators. Thus, it can be said that, behavior of employee
influence the determination of wage structure (Werner and DeSimone, 2011).
 Subsistence Theory: The theory was given by David Recardo, in which he claimed that
wages should be paid at subsistence level. It has been assumed that if workers are paid
above the subsistence level than the number of employees will bet increase and as a
result, wage will down to the subsistence level. On the contrary, if the employees are paid
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less than the subsistence level that would lead to the employee turnover and termination
of employment contract (Wilson, 2005). Thus, it can be suggested that employees of
Flyhigh should be paid above the subsistence level during staff crisis so as to increase the
number of employees and wage payment should not go below the subsistence level.
Furthermore, the another issue faced by the company is of disputes with the unions
organization. This firm is semi-unionized and there is a great impact of union on the working of
Flyhigh. There are many aircrew members of the enterprise who are the members of of UNITE
and BALPA and both the organization have a greater influence on the working of a company
because there were many industrial disputes with Flyhigh in the past. These organization may
have disputes again in the future (Ellinger and Ellinger, 2014). To avoid such potential disputes,
HR manager should negotiate with the union labors and follow these guidelines in order to avoid
such consequences. Some of the guidelines are enumerated below:
1. Listening Complaints: HR manager should listen to the complaints of the labors so that
resolution of issues could be planned. This will put a positive impact on the labors
because their problems are listened properly by the management.
2. Negotiations: There should be proper negotiations with the workforce and union
members so that employees should also get chance to bargain and thus, it will benefit the
company ad due to this, union will not affect the business activities of an organization.
3. Labor Relations: HR manager should aim to maintain good relations with the union and
its employees (Hassan, 2007). Relations can be maintained by implementing labor
relations programs, regularly interacting with them, asking about the issues with the
management, employees, etc. Moreover, better working condition and also other benefits
and pension should be provided to them in order to maintain good relations with them.
4. Grievance Procedure: Flyhigh should have a better grievance policy so that in an
appropriate manner grievance of the employee should be handled. This will help the
company to minimize the impact of unions and thus, employees will also feel satisfied in
the company.
These are some of the methods through which company can reduce the potential impact
of UNITE and BALPA. This will also help the company to maintain relations for a long period
of time (Holland and Pyman, 2006). If the demands of union does not get fulfilled than this leads
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to strikes and litigation which will hamper the business activities and involvement of heavy cost
eventually that will reduce the profitability of a firm and also losses may get incur and corporate
image may get lost.
Moreover, the another issue which the firm is facing is the accusations of favoritism by
the dissatisfied employees. Remaining part of the shares are owned by the family members of
Muhammed Saleem, a managing director. They mainly hold top positions and other employees
often oppose them as they are already dissatisfied and they are only blamed if the things does not
go well. This has led to the conflict between top management and other employees. HR manager
has to deal with such issues in order to maintain harmony in an organization. HR should modify
the culture of the company and roles of the employees should be changed. However, there will
be resistance by the top management but manager should take counseling sessions and provide
effective training so that mindset of the top management may get change and this change get
implemented in the organization. Through this, employee will feel that they are considered on a
top priority which in turn would give a better result to the organization (Jain, 2005).
However, HR manager is faced with many challenges and for this purpose, it is being
suggested that manager should draw all the major issues and than plan accordingly. For this
purpose, competitors such as EasyJet and Ryanair should be assessed and as per their
organizational structure, Flyhigh's structure should be modified. Before the implementation of all
the changes, a training session should be conduct and all the employees should be given an
effective training which will help to shape their behaviour. Every employee should be closely
interviewed and their issues should be noted down (Khan and Sheikh, 2012). Furthermore,
manager should assess the aims, objectives and values of employees, managing director, other
shareholders, unions, etc. After that a detailed plan should be made which accomplish the
individual as well as organizational aims and objectives. HR manager should link the objectives
of individual along with that of organization so that employees may feel the part of the company.
Moreover, it is to be ensures by the manager that values of the people are not getting undermine
by any single step taken by the management. Similarly, all the related theories which are
discussed above should be followed in order to change the organizational structure and also for
motivating the employees above mentioned theories has to be adopted. This will help the
manager to satisfy the employees in an efficient manner and every satisfied employee will never
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resist for the change. In a similar manner, employment of all the Acts should also be done by
taking due care so that any employee does not feel inferior and their value does not get
undermine (Koskela and Palukka, 2011). Union member should be considered while taking any
decisions so as to avoid unnecessary strikes and litigation. For this purpose, company has to
employ better grievance procedures so that employee's complaints can be handled and resolved
their itself and better labor relations should be maintained by the HR manager in order to prevent
the potential conflicts.
CONCLUSION
As per the above study, it has been concluded that Flyhigh is under serious HR issue and
employees of this firm is totally dissatisfied with the management of the firm. HR manager has
faced the critical issues and planned to resolve these issues by adopting several method in
accordance with the theories and studies conducted by others. HR manager has planned to
change the flat structure to hierarchical structure and introduced many new methods to motivate
the employees. Moreover, company has planned to introduce new formalized wage structure so
as to avoid the negative influence on the minds of employees. Further, company is planning to
start labor welfare program so that better labor relations can be maintained with the union group
which will help to reduce the potential conflicts.
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REFERENCES
Journals
Ellinger , E. A. and Ellinger, D. A., 2014. Leveraging human resource development expertise to
improve supply chain managers' skills and competencies. European Journal of Training
and Development. 38(1/2). pp.118–135.
Hassan, A., 2007. Human resource development and organizational values. Journal of European
Industrial Training. 31(6). pp.435–448.
Holland, P. and Pyman, A., 2006. Corporate universities: a catalyst for strategic human resource
development?. Journal of European Industrial Training. 30(1). pp.19–31.
Jain, P., 2005. Strategic human resource development in public libraries in Botswana. Library
Management. 26(6/7). pp.336–350.
Khan, B. M. and Sheikh, N. N., 2012. Human resource development, motivation and Islam.
Journal of Management Development. 31(10). pp.1021–1034.
Koskela, I. and Palukka, H., 2011. Trainer interventions as instructional strategies in air traffic
control training. Journal of Workplace Learning. 23(5). pp.293–314.
Nikandrou, I., Brinia, V. and Bereri, E., 2009. Trainee perceptions of training transfer: an
empirical analysis. Journal of European Industrial Training. 33(3). pp.255–270.
Tomé, E., 2011. Human resource development in the knowledge based and services driven
economy: An introduction. Journal of European Industrial Training. 35(6). pp.524–
539.
Books
Holton, F. E. and Swanson, A. R., 2011. Foundations of Human Resource Development
ReadHowYouWant.com.
Köster, M., 2007. Human Resource Development:The Limitations of the Systematic Training
Cycle. GRIN Verlag.
Werner, J. and DeSimone, R., 2011. Human Resource Development. Cengage Learning.
Wilson, P. J., 2005. Human Resource Development: Learning & Training for Individuals &
Organizations. Kogan Page Publishers.
Online
Hierarchy of Needs. 2015. [Online]. Available through
<http://sites.psu.edu/rclerin/2015/04/10/hierarchy-of-needs/>. [Accessed on 18
December 2015].
Types of organization. 2014. [Online]. Available through
<http://www.bbc.co.uk/schools/gcsebitesize/business/people/ictrev3.shtml>. [Accessed
on 18 December 2015].
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