Challenges in Qantas Airlines HRM and Solutions

This report discusses the challenges faced by Qantas Airlines HRM and provides solutions to overcome them. It explores the importance of strategic reward management in enhancing employee engagement and productivity. The report also highlights the role of industrial relations in HRM and the impact of workforce demographics on HR planning.

Student Name
INSTITUTIONAL AFFILIATION(S) |
Managing People
QANTAS AIRLINES HRM

P a g e | 1
Executive summary
Human resource management (HRM) discipline have been rooted in organisational
psychology and proves to be one of the significant parts while managing organisations. Now,
the role of HRM has become indispensable for global businesses and at national level, they
are inextricably linked for connecting management practice, culture, structure and industrial
relations of the country. In this note, industrial relations evidences to be a critical factor that
concentrates upon interpretation of company management, human resource policies,
workplace rules that needs to be taken into account and regulations that have been negotiated
with employee representatives or imposed by government of the country. While doing so, HR
managers faces much challenges especially while designing the workforce in contemporary
business scenario such as globalization, diversity, changes seen in political, technological and
legal environment and advancement in innovation.
All these challenges combinedly puts pressure on HRM of the firms where they strive
to retain, attract and nurture talented workforce. To meet such challenges, strategic rewards
management can prove beneficial for HR managers as modern reward management systems
develops the context of management transformations. It does not simply record or
acknowledges what every individual have contributed in bringing organisational
effectiveness, rather performs specific actions to meet strategic objectives and provide value
to conversation outlooks. This electronic portfolio/Workbook aims at finding three significant
issues in Qantas Airline HRM and provide appropriate solutions after critically evaluating the
identified issues alongside reporting an effective HRM management approach from
organisational perspective. This report will use current literature from authoritative sources
along with published media and news articles to verify the identified issues and proposed
solution.

P a g e | 2
Introduction
Qantas is regarded as Australia’s largest domestic and international airlines that have
been ranked among top airline companies many times. The primary objective of the company
is to excel in aviation sector and provide superior service to its targeted population situated
nationally and internationally. At present, the airlines operate in more than 146 destinations
that covers around 38 countries. Qantas poses Jetstar that is regarded as ‘no frills’ airline,
providing targeted audiences with cost effective journeys. Qantas business strategy involves
various market related and service-oriented offerings that ensures its airlines gain competitive
edge over others. The organisational structure of the company is based on hierarchical
structure that defines well-planned organisational culture in various manner that depends
upon strategic goals and objectives which are framed by top level management and HRM of
the company (Qantas, 2018). Being an HRM professional working for one of the most
reputable global firm, Qantas Airlines, this report is been prepared after recognising and
experiencing range of competitive market pressure upon the firm. Since Qantas recognises
that its people are its greatest assets, this report have been prepared to consider three critical
challenges that will be discussed further in the report, and assist the company from a HR
program perspective.
Literature review
There has been wide range of literature survey made on international HRM and
industrial relations and according to Rahim (2011), HR managers of global corporations must
establish well-maintained and standard labour-management relation system to encourage
workers productivity and growth in economies of organisations and the country it operates in.

P a g e | 3
HRM in every industrial nation is been embedded in a community as a whole that means,
policy domains are subject to societal issues, values and norms. Therefore, HRM has been
influenced by multiple policy institutions like trade unions, government authorities and co-
determination bodies. However, Sarina & Chris, (2015) asserts that societal embeddedness
and concentrated way of industry performance varies from person to person and countries
enormously. This the reason why in actual practice, HRM has become a subject to national
variation with respect to organisation formation and industry performance.
Townsend, Wilkinson, & Burgess (2016) reveals that, “Australia has gone through
three decades of extensive reform to industrial relations regulations, processes and
institutions” (p. 101) and to introduce better way of working, Enterprise based bargaining
units were introduced which is based upon enterprise bargaining principle. The reason behind
introduction of enterprise agreement includes organisational and economic flexibility and
rational labour deployment, improvement in workers productivity and political rationales to
enhance prerogatives and reducing trade upon influences. Such implementations considerably
enhanced organisation’s ethical conduct and allowed unions to break control on wages which
were exercised by Income accords and Prices. The author observes that industrial relations
phenomenon reflects faithful expression of society where they perform businesses and the
characteristics that can establish powerful relationship between diversified interest groups. It
can be noted that industrial relations cannot be undertaken without considering the rules that
are implemented and decisions that are taken by concerned community members. However,
the interrelation between industrial relation and HRM signifies that in major countries,
organisation’s management are rarely able to perform autonomously while determining
personnel planning and human resources (Townsend, Wilkinson, & Burgess, 2016).
The role of SHRM have emerged to become a significant strategic partner in firm’s
management and at the same time became a challenging task for contemporary HR managers.

P a g e | 4
Nowadays, HR professional cannot avoid such challenges rather needs to sought and make
them aligned with design and execution of different mechanisms in organisations while
developing skills and competencies and to plan and accept work design challenges in global
environment (Genç, 2014). The central factor in HRM is managing human capital as they are
viewed as driving force required for bringing successes in organisations due to competencies,
skills and knowledge possessed by them. Furthermore, Abdullah (2009) suggests that for
firms to gain competitive advantage in global environment, it is significant to select and
recruit talented workforce and skilled employees that are provided with lifelong learning. The
major challenge faced here is issues regarding particular industry workforce and due to lack
of abilities and knowledge, the HRD have to undertake various training and education
process. In literature, it is been reported that organisation which faces challenge in attracting
and retaining calibre workforce usually faces additional challenge while designing their
workforce, especially the ones who work in global environment.
Workforce demographics changes seen is another area of major concern that can
directly be related to HRM due to increase of ageing workforce, known as ‘baby boomers. In
this respect, even the developed countries like Australia and America are facing issues related
to entrance of high baby boomers into their workforce while developing countries like Asian
regions are no exception to it. Arguably, ageing population have great implication upon HRD
and future human capital of the firms whereas elite expertise workers are recognised as
technical experts and remains competent to tackle present business challenges. Looking upon
training and development side, the HRD undertakes various training and education programs
so that employees are able to apply their knowledge and attitude during any organisation
intervention as thus is regraded as key consideration in HRM. According to Srivastava &
Agarwal (2012) due to training programs, employees physical and social factors along with
psychological abilities can either encourage or discourage them while they are required to

P a g e | 5
transfer their skills into the job. In this context, though employees training and
communication may assist HRM in solving issues related to workforce design, to retain
talented employees and keep them engaged with the firm, motivation through strategic
reward management can prove to be the most effective remedy.
According to Jiang, Xiao , Qi , & Xiao (2009), as modern reward system, strategic
reward management has been used more widely by HR mangers and business practitioners.
Like other performance measurement-based approaches, strategic reward management needs
to be practised after been analysed throughout the time so that it is implemented effectively
and appropriately. With such measurements, HRM recognises remarkable profits for the
organisation and if they govern strategic reward management properly, it can enhance
decision-making process and solve existing potential compensation issues. Moreover,
strategic reward management develops the context of managing transformation by
acknowledging every employee participation and finds what have been contributed by each
member while accomplishing organisational objectives. To some extent, strategic reward
system can be divided into two categories, money or extrinsic rewards and non-money or
intrinsic rewards. While extrinsic rewards motivate employees by fulfilling their tangible
needs like salary, wages, promotion, job security, intrinsic rewards are those that fulfils
employees’ psychological needs like job autonomy, responsibility, position and recognition
(Kilimo, Namusonge, Makokha, & Nyagechi, 2016).
San, Theen, & Heng (2012) asserts that the trend of strategic reward management has
become complex than ever for HRM due to rapidly changing environment however, if
applied appropriately it helps the firms in retaining best employees along with ensuring that
organisations stay in competitive position for future success. According to the author total
reward system can be divided into five categories which includes compensation, work-life
balance, benefits, recognition and performance, career and other development opportunities.

P a g e | 6
Reward system can also undertake external influences upon business like regulatory and legal
issues, cultural barriers, and fierce competition. This statement is supported by D’souza
(2018) where the author states that “ Talent that is recognised, appreciated and rewarded in an
equitable manner increases the rate of engagement and productivity in the organisation” (p.
1431). This implies HR managers to consider reward philosophy and components that plays a
major role in enhancing employee productivity, elevating employee engagement levels and
motivating them to develop dynamic skills. Since it is very significant to balance between
what employees contribute and what they get in return, strategic reward and recognition can
potentially provide organisations with sustainable efforts that comes with highly engaged
workforce.
Case analysis
Problem 1
Qantas Airlines, formerly owned by government did not perceived much profits and
efficiency as its prime goal was not profiteering rather was to serve its nation people. After
privatisation in 1995, the organisation HRM adopted various strategic management
techniques to overcome internal and external influences upon the company. The change
procedure in the company emphasised upon cost cutting and thus cost reductive measures
affected labour wages alongside expecting them to provide with heightened productivity as
well as introduction of new structures to enable workforce training and development.
Although cost cutting measures have always been made after involving HRM of the
company, Qantas has failed in ensuring its workforce with effective and non-biased change
initiatives. Since many workers can still be recognised complaining of being underpaid, goals
for going strikes. The unresolved salary issue has made many talented workforces leave the
company, employee outcries and scandals taking place in the company. The pilots can be

P a g e | 7
seen protesting for getting decent salary and union workers continue demonstrating the
unequal pay arguing that they are paid around 25 % lesser than other airlines workers are
been paid. According to a recent news, “With the lower cost structure of its Jetstar business in
mind, Qantas seems to be focused mainly on low-road strategies to reduce pay rates and
benefits” (Tippler, 2019). This shows that although Qantas has successfully managed change
within its management, there are still few areas where its HRM implementation have been
impacted and thus needs to improve especially the impacts faced due to changing industrial
relations.
Solution
Australia is known for having most modern and competitive economy along with
flexible workforce atmosphere that links productivity with innovation and fair remuneration
for gaining superior quality work from individuals. The employers as well as employees can
also negotiate upon enterprise agreements to respond to overseas challenges. Various changes
have been made in Australian industrial laws to bring reform and maintain strong as well as
flexible employer-employee relationship. Some of the key points mentioned in current Fair
Work amendment Act 2017 for Protecting vulnerable workers can considerably get
implemented in core strategies of Qantas management to strengthen the relationship between
organisation and the employees (Fair Work Commission, n.d.). To avoid further disputes and
union strikes, the HRM can impose high penalties that can end up to 10 times the previous
amount for making serious contraventions or for conducting breaches in Qantas workplace.
The employers or top management can be stopped for making employees biased payments or
unfair remuneration plans alongside granting leaves during certain conditions that can
provide employees with flexible work arrangements. Issue of Fair Work statement and
educating the benefits behind the same to all its employees can also prove a great step while
addressing industrial relation issues in Qantas. Modern Awards can be best suited for Qantas

P a g e | 8
that can reduce and simplify previous rewards since the company faced various
discrimination issues from employee’s perspective.
Problem 2
Qantas job design analysis reveals that the HRM of the firm utilises job design
methods which determines training needs of its employees and things that can impact
organisational objectives. After identifying initial problem in the firm, it is apparent that
Qantas have made immense mistakes while making selection and recruitment of HR
personnel’s in the beginning that impacted entire job designing process adversely. Despite
providing with heavy training and education programs along with huge investments made
during job analysis and design proceeds, Qantas got involved at in-flight incident recently in
which a female passenger died due to “pressurisation issues” (ABC News, 2019). Previously
also Qantas has faced severe in-flight accident. In 2008, around 122 passengers got serious
injuries due to specious commands (McMah, 2018). Such under-job design and analysis
shows that training have not impacted the company positively and thus Qantas employees
fails to monitor their position, ending up wrong way. It is clear that Qantas HRD have
continued in intensifying their operations despite the change management and job designs
strategy failed to meet every demand of the airline industry. Though the company asserts its
commitment to develop its people completely, they still do not seem to understand how they
can implement beneficial employee relationship.
Solution
One approach that can enable organisations in every aspect while developing internal
and external competencies is to integrate HRM with its core organisational strategy as HR
professionals operates in a way that can help other resources in developing rather than

P a g e | 9
focussing upon rivals only. The 21st century HRD can handle various challenges like change
management, managing multi-cultural workforce, conflict management, workforce diversity,
work-life balance and most importantly, globalization. Hence it becomes responsibility of
increasing organisational efficiency and effectiveness by gaining competitive edge and
adding value for long term survival through strategic job designing and job analysis (Rahim,
2011). Since Qantas faces few issues in its job design and analysis, it can be recommended
that the HR of the firm undertakes flexible work hour method that can enable its employees
perform work as per their capacity and considering work-life balance. Moreover, the virtual
world has opened new opportunities for the firms that can be implemented by HRD while
arranging flexible work hours. This will help HR managers in monitoring and accessing
success behind every project along with taking better measurements while analysing job
contributions made by every employee (Nasir, 2017). Proper job analysis will further help in
designing and implementing job roles in efficient manner and after underpinning other core
activities of HR in Qantas. Though describing job positions and specifications proves to be
significant tool for HRM, the changing nature of work in aviation industry has made HRM of
Qantas difficult in documenting such issues and thus it also requires considering diversity
management while undertaking steps towards effective job designing.
Problem 3
After change initiative, Qantas management and employees agreed to participate in
the management willingly and explore new challenges faced by the airline through
partnership committee formation and collective agreements made post privatization.
However, with time the ability of unions and maintaining high membership constrained
Qantas HRM capacities while facing intense competition within airline industry.

P a g e | 10
Furthermore, the extensive externalisation of operations between intermediaries situated in
lower-cost countries affected Qantas profit margins. Not withstanding such institutional
constraints, Qantas HRM gradually shifted from unified employment relation to hybrid model
by creating an employee subsystem to respond challenges while operating in global aviation
industry. According to researchers, the implementation of the model focused more upon cost
reductive ways as it seemed most flexible way to increase profits and remain internationally
competitive. Nevertheless, dissatisfaction among employees arise due to strict decision taken
by management and identification of differentiated work rates and conditions across the
company. This low trust levels among workers group left them feel unjustly rewards for their
loyalty and commitment shown towards the firm that became central triggers for 2011
protracted industrial dispute that was culminated due to ineffective decisions made by the
HRM that impacted overall organisational behaviour (Sarina & Chris , 2015).
Solution
The issue recognised in the company concerning improper rewarding and unfair
remuneration suggests Qantas HRM to implement strategic reward management that can be
based upon total compensation and other reward theories like competency-based and person-
based pays. However, all the reward plan must be based upon suitable reward theories that
aligns with potential backgrounds or job specification. Strategic reward system will affect
Qantas employee attendance positively as well since efficient wages will motivate them for
performing in desired manner. By every means reward strategy are considered best for the
businesses that helps firm in attracting, retaining and motivating employees while meeting
company objectives (D’souza, 2018). Though Qantas HRM may face certain challenges
while differentiating between fixed pay and diversified workforce, but gradually, it will
reflect positive impact upon the organisation. In case of financial loses seen in Qantas,
performance-based rewards can prove beneficial that will motivate its sales and marketing

P a g e | 11
agents for generating more revenues. Non-financial aspects required for meeting employer
employee relationship can be linked with the intrinsic rewards framework that will motivate
Qantas employees for showing persistency while performing for the company (Jiang, Xiao ,
Qi , & Xiao , 2009).
Conclusion
Similar to other functions seen in the organisations, HRM is also divided into various
departments that performs for ensuring success in businesses by managing human capital and
effective flow of operations in an organisational setting. The above report has been prepared
for presenting three critical issues faced by Qantas Airlines and its internal HRM. The issues
in the report have also been identified publicly, as much needed information was provided by
external media and therefore requires Qantas organisation undertake critical steps to address
the identified issues. Major issues identified includes union strike due to cost reductive
measures adopted by firms that declined their wages. Alongside, the training and job
designing process in the firm had few loopholes that caused various uncertainties and
incidents reflecting incompetency of the employees. Few solutions have been provided in the
report concerning industrial relations, strategic reward management and effective job design
and analysis that can potentially help the firm in overcoming issues along with gaining
sustainable success in future.

P a g e | 12
References
ABC News. (2019). Qantas flight from Adelaide to Canberra makes emergency diversion to
Melbourne. Retrieved 05 28, 2019, from
https://www.abc.net.au/news/2019-03-05/adelaide-to-canberra-flight-makes-
emergency-diversion/10870888
Abdullah, H. (2009). Major Challenges to the Effective Management of Human Resource
Training and Development Activities. The Journal of International Social Research,
2(8), 11-25.
D’souza, S. (2018). Employee Rewards in HRM and its impact on Employee Engagement in
an Organization. International Journal of Trend in Scientific Research and
Development , 2(4), 1425-1432.
Fair Work Commission. (n.d.). National workplace relations system. Retrieved 05 28, 2019,
from https://www.fwc.gov.au/about-us/national-workplace-relations-system
Genç, K. Y. (2014). Environmental Factors Affecting Human Resources Management
Activities of Turkish Large Firms . International Journal of Business and
Management, 9(11), 102-122.
Jiang, Z., Xiao , Q., Qi , H., & Xiao , L. (2009). Total Reward Strategy: A Human Resources
Management Strategy Going with the Trend of the Times. International Journal of
Business and Management, 4(11), 177-183.
Kilimo, D., Namusonge, G. S., Makokha, E. N., & Nyagechi, A. K. (2016). Determinants of
Intrinsic and Extrinsic Rewards on Employee Performance in Kapsara Tea Factory

P a g e | 13
Company Trans Nzoia County Kenya. International Journal of Academic Research in
Business and Social Sciences, 6(10), 369-380.
McMah, L. (2018). Terror on flight QF72: ‘I’m not in control of this plane’. Retrieved 05 28,
2019, from https://www.news.com.au/travel/travel-updates/incidents/terror-on-flight-
qf72-im-not-in-control-of-this-plane/news-story/1de13e8591fa845045f52ff4387cf98b
Nasir, S. Z. (2017). Emerging Challenges of HRM in 21st Century: A Theoretical Analysis.
International Journal of Academic Research in Business and Social Sciences, 7(3),
216-223.
Qantas. (2018). Qantas Annual Report: 2018. Retrieved 05 28, 2019, from
https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1t
pgyw/file/annual-reports/2018-Annual-Report-ASX.pdf
Rahim, S. A. (2011). International Human Resource Management and Industrial Relations: A
Framework for Analysis . ASA University Review, 5(2), 59-76.
San, O. T., Theen, Y. M., & Heng, T. B. (2012). The Reward Strategy and Performance
Measurement (Evidence from Malaysian Insurance Companies). International
Journal of Business, Humanities and Technology , 02(01), 211-223.
Sarina, T., & Chris , W. F. (2015). Mutual gains or mutual losses? Organisational
fragmentation and employment relations outcomes at Qantas Group. Journal of
Industrial Relations, 57(5), 686-706.
Srivastava, E., & Agarwal, N. (2012). The Emerging Challenges in HRM. International
Journal of Scientific and Technology Research, 1(6), 46-48.
Tippler, C. J. (2019). Qantas' HR policy crashes to earth. Retrieved 05 28, 2019, from
https://www.theaustralian.com.au/business/business-spectator/qantas-hr-policy-

P a g e | 14
crashes-to-earth/news-story/350a60a3aa2d0beec22600d07a4ccead
Townsend, K., Wilkinson, A., & Burgess, J. (2016). Is Enterprise Bargaining Still a Better
Way of Working? Journal of Industrial Relations, 55(1), 100-117.