Managing People in Organization

Managing the performance of employees is an important process for the success and growth of an organization. This report purposes to discuss about the issues and wrong practices of Flight Centre in Australia. Flight Centre is a travel company that is listed in Australian Stock Exchange. It has 2800 stores and businesses under many corporate brands. The report is prepared on the basis of chosen new article of ABC news i.e. “Flight Centre accused of 'ripping off' customers, underpaying staff in alcohol fuelled 'cult' workplace”. The report analyses different issues which are faced by this company and its employees. The employees of company claimed that company is underpaying them that affected their morale and performance adversely. Furthermore, report includes different strategies which can be used by this company to overcome the issues. In the end section, recommendations are provided for four key areas of organization’s operations.

Running Head: MANAGING PEOPLE IN ORGANIZATION 1
Managing People in Organization

MANAGING PEOPLE IN ORGANIZATION 2
Executive Summary
Managing the performance of employees is an important process for the success and growth of
an organization. Modern organizations are using different modes and techniques for effective
management of its human resources. This report purposes to discuss about the issues and wrong
practices of Flight Centre in Australia. Flight Centre is a travel company that is listed in
Australian Stock Exchange. It has 2800 stores and businesses under many corporate brands. The
report is prepared on the basis of chosen new article of ABC news i.e. “Flight Centre accused
of 'ripping off' customers, underpaying staff in alcohol fuelled 'cult' workplace”. The report
analyses different issues which are faced by this company and its employees. The employees of
company claimed that company is underpaying them that affected their morale and performance
adversely. Furthermore, report includes different strategies which can be used by this company
to overcome the issues. In the end section, recommendations are provided for four key areas of
organization’s operations.

MANAGING PEOPLE IN ORGANIZATION 3
Table of Contents
Introduction.................................................................................................................................................4
Company Background/Case Focus...............................................................................................................4
Literature Review........................................................................................................................................5
Strategies for Improvement........................................................................................................................6
Goal Setting and Communication............................................................................................................7
Motivation and Employee Engagement..................................................................................................7
Delegation...............................................................................................................................................7
Training and development.......................................................................................................................8
Recommendations (4 Key Result Area).......................................................................................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

MANAGING PEOPLE IN ORGANIZATION 4
Introduction
Nowadays, it is very important for the organizations to make more focus on managing the
performance of employees effectively. They need to use different ways and methods in order to
motivate the employees so that they can work towards attaining overall business objectives (Van
Dooren, Bouckaert and Halligan, 2015). The major objective of this report is to analyze the
chosen new article about an Australian travel giant i.e. Flight Centre. Flight Centre Limited is
one of the largest travel agencies in Australia and all over the world. The organization has started
its operations in the year 1982 and it is headquartered in Brisbane, Australia. This company has
recently been in the news for some wrong reasons which are published in the chosen news
article. Australian travel giant has been hit by different statements of some of its underpaying
employees. The below report provides the insights about the selected case and issues faced by
Flight Centre. It reviews the literature on performance management, current issues and trends in
this area. It provides justification about the need for improvement of coaching, performance
management and delegation across the business. At the end, recommendations are given
considering four key result areas in the organization.
Company Background/Case Focus
Flight Centre Travel Group is the biggest travel agency in Australia that was established in the
year 1982 and headquartered in Brisbane, Australia. The organization is listed on Australian
Stock Exchange and it has yearly turnover of over $20 billion. The company has employed over
20000 people all over the world. Currently, it has around 2800 outlets and shops under its retail
brands. Flight Centre has its business operations in United States, Australia, United Kingdom,
New Zealand, Hong Kong, China, Singapore, Mexico, South Africa, United Arab Emirates and
India etc. It has license agreements in 80 nations under its brand (Flight Centre, 2018).
The given article states about various unethical and wrong practices in which the organization
has been engaged. These practices have huge adverse impact on the performance of its
employees. The case states that Flight Centre is accused of ripping off its customers and
underpaying the employees. They claimed that they feel like they are working being in a cult. As
per the investigations of ABC, both former and current staff of Flight Centre said that travel
consultants are encouraged to gouge its clients by adding thousands or hundreds of dollars to

MANAGING PEOPLE IN ORGANIZATION 5
their ticket bookings. Moreover, the case showcases that company has made various promises to
its employees so that it can overcome the guilt related to this wrong practice but it failed to fulfill
them. For example, the firm has guaranteed its staff to give at least applicable minimum wage
but 30% of its employees don’t receive minimum wage on monthly basis. Additionally, they do
not pay its employees for working overtime and attending meetings. It has affected the morale of
employees which has a negative effect on their performance in organization. In order to enhance
employee morale, this company has developed a vibrant culture in the workplace but still it is not
able to motivate them.
Literature Review
As mentioned above, Flight Centre has been involved in some wrong practices which have
negative impact on the performance of its employees. It is very important for each and every
organization to manage employee performance as they play a vital role in attaining overall
objectives of business. According to Buckingham and Goodall (2015) performance management
is the process through which employees and managers work together to strategize, supervise and
review the work objectives of employees and their contribution to the organization (Buckingham
and Goodall, 2015). In this context, Osmani and Maliqi (2012) stated that performance means
the process where the human resources with their contribution of skills and knowledge perform
the tasks via attainment of their goals effectively. The term performance management recognizes
the objectives of company, required outcomes to attain those goals, different ways to become
more effective towards these objectives and strategies and drivers to attain them (Osmani and
Maliq, 2012). In an organization, there are various ways which can assist an organization to
improve to retain and improve the performance of its employees. Moreover, there may be some
wrongful practices which can decrease their performance (Barry, 2017).
Looking at the chosen article, it can be stated that Flight Centre is confronting the issues related
to performance of employees due to wrong practices. According to McGrath and Carter (2018),
Flight Centre is engaged in illegal practice as it is manually adding an additional amount to its
ticket booking in online system of Flight Centre. It ranges from as little as 30$ to thousands of
dollars. This process is done before showing the total costs to clients. Staff of company stated
that 6.7$ bn is made on “work hard, play hard” approach and alcohol fuelled culture which
drudges its employees down with depressed pay and extreme non-paid overtime hours (McGrath

MANAGING PEOPLE IN ORGANIZATION 6
and Carter, 2018). Bainbridge (2018) stated that the company is charging extra from their
customers on their ticket booking. For example, if the original price of ticket is $1500, it will
mark-up and the final charges will be $1800 (Bainbridge, 2018).
In this relation, Aguinis (2009) described that unethical and wrong practices influence the
productivity of the organization as it distracts the employees from their core roles and
responsibilities. At Flight Center, this wrong behavior is bothering the staff thus keeping them
from emphasizing on the work in hand. The author stated that wrong practices of a company can
affect the ability of employees to work and perform effectively. The case shows that even after
marking up, still company is underpaying its employees that have affected their satisfaction level
and morale negatively (Aguinis, 2009).
Furthermore, McGrath and Carter (2018) stated that company is training its employees about
marking up the booking and considering that it is not an illegal practice. It is one of the major
issues at Flight Centre that employees are trained to conduct this practice. It has major impact on
working behavior of employees (McGrath and Carter, 2018). In this context, Wei and
Yazdanifard (2014) have described reinforcement theory that behavior of an employee is a
function of consequence which instantly follows another’s behavior. This theory avoids different
factors like needs, goals and expectations. An organization can have positive impact on
employee behavior by giving different job benefits. For instance, Flight Centre is failed to
provide enough benefits and payment for overtime jobs that affected their behavior negatively.
The company needs to understand that these types of rewards can be very effective if they follow
the behavior desired by the employees (Wei and Yazdanifard, 2014). For Flight Centre, it is very
important to understand that they can affect employee behavior and their performance by
practicing positive reinforces which can assist the travel agency to attain its objectives.
Strategies for Improvement
The above literature review indicates that Flight Centre is confronting different issues related to
performance of the employees. It shows that staff is demoralized by the practices of Flight
Centre Company. It states that there is need of improvement in the organization otherwise it will
lose its talented and skilled employees (Mayo, 2016). There are three major areas i.e.
performance management, delegation and coaching, on which Flight Centre need to focus. The

MANAGING PEOPLE IN ORGANIZATION 7
company can use different strategies for improvement in its practices and management of
employee performance. These strategies are discussed below:
Goal Setting and Communication
It is one of the most significant strategies that can be used by Flight Centre in its stores. The case
shows that employees at this organization claimed that they are working in culty environment.
They feel that they are excluded from the company’s decision making process. This is the major
reason behind the degrading of employee motivation and performance. As per Goal setting
theory, the companies set a goal to motivate the employees. Flight Centre can use this strategy to
attain better results. To implement this, the organization can introduce a key performance
indicator that assists it to identify the employee’s performance for its goals. This goal will
motivate the employees to perform better. Moreover, there should be effective communication
between management and its employees.
Motivation and Employee Engagement
Motivation and employee engagement are two major strategies which can support Flight Centre
to improve the performance of its employees. By engaging the employees, it can involve them in
making decision regarding the mark up amount. The employees are feeling very demotivated as
company is not meeting the promises which it has made to its employees. They are not even
getting the minimum wages applied in Australia. So, it is essential for Flight Centre to adopt
some practices and incentives which can motivate them towards their roles. Moreover, it should
make a provision for overtime workers as they are paying their hard work for attaining
company’s objectives. This strategy will be very impactful in the case of Flight Centre (Mone
and London, 2018).
Delegation
Furthermore, delegation is another strategy that Flight Centre can adopt. It is true that there is
need of effective assignment of roles and responsibilities of employees. The travel consultants
should have the effective knowledge about their tasks. The company should create the teams and
there should be a delegated person who will handle and manage the performance of team
members. The leader of team will be responsible for the result of delegated tasks. This will assist
the company to enhance the performance of employees at Flight Centre (Graham, Harvey and
Puri, 2015).

MANAGING PEOPLE IN ORGANIZATION 8
Training and development
When it is about the management of employee performance, coaching practice i.e. training and
development are vital strategies which can assist Flight Centre to overcome the issues related to
lower morale, unpaid overtime, underpaying and charging additional on booking. The firm
should make changes in its training process and give them coaching regarding their roles and
responsibilities (Saks and Gruman, 2014). They should eliminate the training of mark up from its
current training program. Training program can help this company to overcome the issues and
motivate the staff towards their work.
Recommendations (4 Key Result Area)
In order to handle the above situation in the case, Flight Centre should take some actions which
are stated below:
 Strict Compliance of rules and regulations:
It is hereby recommended that Flight Centre should comply with all the applied rules and
regulations strictly. It should follow all the regulations implemented on travel agencies in
Australia. The company lost a battle with ACCC and penalized by $12.5 million as it requested
foreign airlines not to give their prices on websites. It is an illegal action that company has taken.
Thus, it is suggested that it should follow all rules and regulations.
 Changes in its policies:
Moreover, the company should make changes in its business policies and processes. Currently,
Flight Centre is offering its services to customers by adding a mark-up amount on online flight
booking. It has affected both customer base and employee behavior in workplace. So, Flight
Centre should make changes in its current policies so that they can motivate the employees and
retain customers (Ramasamy, et al, 2014).
 Value the Employees and their efforts
Flight Centre should value its employees and their contribution towards attaining the goals of
organization. The company should understand that its employees are working hard and doing
unpaid overtime. It should be valued by organization so that they can stay with company for long
term.

MANAGING PEOPLE IN ORGANIZATION 9
 Monetary and Non-monetary rewards for employees
In order to motivate employees and enhance their performance, Flight Centre should offer both
monetary and non-monetary benefits to employees. There should be monetary rewards like
bonus, incentives etc. These rewards will encourage the employees to work with the company
with fully enthusiasm.
Conclusion
From the above analysis, it can be concluded that Flight Centre is using some wrong practices
which have affected its brand image adversely. In addition to this, it has affected the satisfaction
and motivation level of its employees as company is underpaying them even after taking extra
amount on ticket booking. To overcome these issues, the organization can use different strategies
so that it can improve the conditions and motivate the employees. These strategies will help
Flight Centre to engage the employees in decision making and motivate them towards
organizational goals. Moreover, some recommendations are given which can be used by Flight
Centre to enhance employee morale and its overall situation.
References
Aguinis, H. (2009) Performance Management. Upper Saddle River, NJ: Pearson Prentice Hall.

MANAGING PEOPLE IN ORGANIZATION 10
Bainbridge, A. (2018) Flight Centre accused of underpaying staff, workplace bullying, Available
from http://www.abc.net.au/radio/programs/am/flight-centre-accused-of-underpaying-staff-
workplace-bullying/10186340 [Accessed on 8 October 2018].
Barry, W. S. (2017). Airline Management: Business Management in Transport 3. Routledge.
Buckingham, M. and Goodall, A., (2015) Reinventing performance management. Harvard
Business Review, 93(4), pp.40-50.
Flight Centre. (2018). Home. Available from https://www.flightcentre.com/ [Accessed on 8
October 2018].
Graham, J.R., Harvey, C.R. and Puri, M., (2015) Capital allocation and delegation of decision-
making authority within firms. Journal of Financial Economics, 115(3), pp.449-470.
Mayo, A. (2016). Human resources or human capital?: Managing people as assets. Routledge.
McGrath, P. and Carter, J.S. (2018) Flight Centre accused of 'ripping off' customers, underpaying
staff in alcohol fuelled 'cult' workplace, Available from http://www.abc.net.au/news/2018-08-
22/flight-centre-accused-of-ripping-off-customers-underpaying-staff/10051474 [Accessed on 8
October 2018].
Mone, E.M. and London, M., (2018) Employee engagement through effective performance
management: A practical guide for managers. Routledge.
Mone, E.M. and London, M., (2018) Employee engagement through effective performance
management: A practical guide for managers. Routledge.
Osmani, F. and Maliq, G. (2012) Performance Management, Its Assessment and Importance,
Procedia-Social and Behavioural Sciences, 41, pp. 434-441.
Ramasamy, S., Sabatini, R., Gardi, A. and Kistan, T., (2014) Next generation flight management
system for real-time trajectory based operations. Applied Mechanics and Materials, 629, pp.344-
349.
Saks, A.M. and Gruman, J.A., 2014. What do we really know about employee
engagement?. Human Resource Development Quarterly, 25(2), pp.155-182.

MANAGING PEOPLE IN ORGANIZATION 11
Van Dooren, W., Bouckaert, G. and Halligan, J., (2015) Performance management in the public
sector. Routledge.
Wei, L.T. and Yazdanifard, R. (2014) The impact of Positive Reinforcement on Employees’
Performance in Organizations, American Journal of Industrial and Business Management, 4, pp.
9-12.