MGT702 - Flight Centre: Enhancing Performance Management & Delegation

This report analyzes allegations against Flight Centre regarding staff underpayment and customer exploitation. It reviews newspaper articles detailing these allegations and provides a literature review on management practices. The report highlights the need for improved performance management, coaching, and delegation within the organization. Key issues include a toxic work culture, excessive unpaid overtime, and mental health concerns among employees. The report suggests building better relationships with employees, providing adequate incentives, and implementing clear goal setting. It concludes with recommendations for Flight Centre to address these issues and improve staff morale and performance, emphasizing the importance of fair treatment and ethical business practices. The report draws on relevant academic literature and evidence-based management strategies to support its findings and recommendations.

Running head: MANAGING PEOPLE
Managing people
Name of the student
Name of the university
Author note

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TABLE OF CONTENTS
Introduction................................................................................................................................2
Analysis of the report.................................................................................................................3
Management literature review....................................................................................................5
Recommendation........................................................................................................................7
Reference list..............................................................................................................................8

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Executive summary
The report below states that about the allegations which are made against the Flight Centre
who are underpaying the staffs and ripping off the customers. The next part of the report also
states the analyses of the newspapers which states the allegations made against the travel
agency. The next section consists of the literature review related to the management. Lastly,
the paper comprised of the recommendations for the managing people of the Flight Centre in
order to handle the staffs.

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Introduction
The report below reviews the allegations are made against the famous company Flight
Centre that the company has been ripping off customers and have been underpaying staffs in
the alcohol fuelled cult workplace. The travel giant of Australia are known to have ripped off
customers and underpay staffs and also complained of the cult like workplace. The news
from Australian Broadcasting Corporation reports that dozens of current and former staffs
have complained about the working conditions of the firm. There are several allegations
made about the marking up the customers, the underpayment to the employees, party culture
and the cult like working place.
SCOPE: The scope of the paper is to analyse the case related to the allegations made
against Flight Centre. The paper also states the recommendations on how to manage staffs
where they can work appropriately
IMPLICATION: the report implies that staffs should be provided enough incentives
so that they can work appropriately, provide proper delegation and proper coaching to the
employees.
CONTEXT: the report analyses the newspaper articles which states how the
employees are treated by the managers of the Flight Centre
The paper shows mostly aims to focus on the complaints recently made by the
employees and how the underpayment by the company affects the employees. The paper also
focuses on the recommendations that the Fight Centre should follow (ABC News. 2018). It
shows how the manager of Flight Centre should build a good relationship with both the past
and the present employees in order to avoid any kind of allegations.

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The domestic arm of the famous Travel Group, Flight Centre is known as Flight
Centre Australia which is one of the largest retailer of travel. The portfolio of the company
includes niche brand features around 1300 business across Australia. The managing director
of Flight Centre is Graham Turner. The company has known to have earned a revenue of A$2
billion in the year 2013 (Worthington 2016). As they are famous for their iconic red exterior,
there are presence of almost seven hundred flights across Australia. The problem with this
travel group is that there is a presence of huge toxic culture in the work place. The Australian
Services Union states that it has been concerned about the allegations of underpayment.
There have been allegations of unreasonable pressures on employees.
Analysis of the report
In a recent report it has been found out that Australian Flight Centre have been
accused of ripping off customers and underpaying staff. The Flight Centre Travel in order to
reduce cost have also cut huge amount of jobs. Around two hundred of the employees are
known to have registered complaints against Fight Centre. The staffs have also complained
about the miserable pay structure of the company. Flight centre have also ben accused of
grinding down staffs with excessive unpaid overtime hours. The workers of Flight Centre
have complained of huge number of complaints, drug abuse and harassment. Some of the
workers even complained of suffering from mental health issues after they have been abused.
According to a the recent report published by ABC it has been reported that after an
investigation it was found out that the work culture was pathetic and the employees were paid
excessively low.
Background of the organization
Flight centre travel group is one of the largest retail travel outlet in Australia which
was found in the year 1982 (Flight Centre accused of underpaying staff. 2018). Its

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headquarter is located in Brisbane in Australia. It is also the domestic arm of the Travel
Group Flight Travel in Australia. The Auckland headquarters of the Flight Centre was under
fire in the New Zealand Press for installing a mural of a woman who was scantily clad.
Majority of the employees has termed the workplace of Flight Centre as cult like work
culture in the reviews of different websites. The investigators also found out that there is a
presence of drug drawers where the consultants were encouraged to so cocaine on site. The
female staffs also complained of being sexually harassed at many company events. The staff
members complained of being sexually harassed at company events. On account of sexual
harassment I has been found out that one of the employees was been harassed by a male team
leader. However, the management overlooked the matter. Although, the Flight Centre said
that it was strictly forbidden under the workplace policies and the code of conduct. One of the
female member as also been bullied on her pregnancy and they were treated poorly. A report
from a famous newspaper shows that Flight Centre in Australia employs around twenty
thousand people globally and ten thousand people in Australia. Majority of the employees
who have contacted the Australian Broadcasting Channel said that they have been
encouraged to build in mark us to customer bookings. Some of them claimed that they had
learnt various ways to conceal mark ups from customers while claimed that only the
wealthier and the older customers were been targeted. However, countering the allegations
Flight Centre claimed that they do earn a marginal profit on the products that are been sold,
however the figures are not ben disclosed on the transaction basis. Many of the staffs have
also claimed that the Flight Centre of Australia holds a party culture which represents pay
offs for the long hours of work along with low pay (Paludi .2015). It has also been reported
that in case of an annual global gathering on the high performing sellers are known to be
eligible to attend the meeting. Flight Centre in Australia is known to have followed the work
hard and play hard culture.

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However, the manager of the firm said that it has always been following a positive
work culture that recognises the achievement of the staff. Although after the complaint from
the staffs have attracted the attention of Fair Work, the manager of Flight Centre have started
negotiating with the staffs over a new Enterprise Bargaining Agreement. A Facebook post
also showed that staffs were venting their anger over both the current and the proposed
working conditions. Commissions, working conditions and wages have been discussed in the
meetings. The ABC reported that the company wants to set a new structure of salary between
$41,000 and $44,000 depending on whether he consultants wants to work in a store which are
usually opened in the weekends (Nicholson, Pekarek and Gahan 2017). The offer also shows
that the company plans to avoid the rise in salary by lowering the percentage commission
offered to the employees. The employees also complained that process of marking up
bookings of the customers was uncomplicated and ad hoc. A practise that is been followed in
the Flight Centre online system which ranges from $30 to hundreds to thousands of dollars
before the total price s revealed to the customer. On countless occasions it has been observed
that the members continue marking up flights on countless occasions. The company is known
to have believing in a fair marginal policy. The staffs have increasingly known to have mark
up on flights because of low and confusing method of paying its staff. The wage paid to the
employees in the Flight Centre is below the minimum wage of Australia which is between
$33,500 to $4,000. The rest of the salary is mostly made up commissions which are accrued
on the sales of airfares, hotels, travel insurance and holiday packages. According to the staffs,
the pay structure is not possible to even ear a decent wage without resorting to mark up.
Multiple staffs were known to have complained that they were made to work for unpaid daily
meetings before the store opening (Worthington 2016). At that time they are also not allowed
to take breaks and are made to work in long amounts of unpaid overtime. Countering the

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allegation Flight Centre claimed that company’s fixed pay plus commission structure was
both typical of the sales industry and usually served as a source of motivation for staff.
Management literature review
Under the equity theory it is known that a motivation of the person is based on what
others consider to be fair when compared with others. Underemployment inequity is also
termed as negative inequity when the ratio of own inputs and outcomes is greater than or less
than favourable than the ratio of a comparison. The articles suggested that there is in need of
the improvement of performance management, coaching and delegation across the business.
The fundamental goal of the performance management includes promoting and improving
employee effectiveness. It is a continuous process where the managers and the employees
together work to monitor and review the work objectives of the employees. The elements of
performance management includes periodic rating, rewards and compensation, monitoring,
development and improvement and planning with expected setting. Improvement for
performance management is needed as majority of the employees have raised issues
allegations against the company. Performance management success requires clear goal
setting. As workers have several issues with the management of Flight Centre there is a need
of improving performance. Delegating is transferring some of the work to someone else and
trusting them that they will do it on time, however it will still remain accountable (Robertson
2015). There are various ways for delegations like a relationship can be build first after
assigning the right task to the right person. Commitment should be clarified along with
collaboration technology. As employees are not happy with the pay structure in Flight Centre
and also as the employees are also facing a lot of issues the it is important for the manager to
establish a relationship with the employees before assigning a work to them. Flight Centre,
the travel agency giant has been hit by claims of underpaying staffs, the manager have to
properly delegate. The Finance Sector Union has lodged a dispute with the Fair Work

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Commission alleging many staffs working at Flight Centre subsidiaries. The investigation of
ABC showed that the staffs of the Flight Centre have suffered serious mental health issues.
The employees have claimed that the mental health issues resulted due to workplace bullying.
The negative press about the cult like working condition and mark ups have dented the stock
price of the Flight Centre despite the record financial results. Due to the underpayment of the
staffs the stock price of the Flight Centre also went down. The employees use to manually
add an extra amount to the booking in the online system of Flight Centre. It ranges from as
little as $30 or even thousands of dollars. The employees use of marking up flights was done
due to the underpayment of the employees. The corporate culture of the Flight Centre also
came under fire. The party culture of the travel agency is known to have isolate those who did
not join and had been condemned a month ago. An employee also known to have been felt
like a sense of guilt because of ripping of customers.
All the allegations against the Flight centre have been strongly denied by the company
describing the report of Australian Broadcasting Centre as a beat up. The manager said that it
is not at all worrying for the firm as it already has a good reputation (ABC News. 2018). The
unions are also deeply concerned with the underpayment and bullying of the employees.
However, the Flight Centre has to pay $12.5 million as a fine for price fixing after losing its
appeal. It has denied claims of cult like workplace culture, customer price gouging and
underpaying the staffs. The ABC also raised allegations the travel agency has employed staff
below the minimum wage. Its incentive structures have also developed a culture of price
gouging (Robertson 2015). The work culture has been termed as a cult because people here
are encouraged for heavy drinking and partying the people who does not take part in parties
are been ostracised. It have been reported that only people who wants to be friends with the
people from flight centre. The work culture is also known to be have been not good as they

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have to work hard at the end of the month. All this shows that is in need of proper
improvement of performance management and delegation across the business is provided.
Recommendation.
It is recommended that performance management of the company should be improved
and delegations should be made across the business is provided. For the proper delegation of
work, there is also a need of coaching (Nicholson, Pekarek and Gahan 2017). Delegating a
task is not always as easy as it may seem. The employers should be building a proper
relationship with the employees. Some of the steps for employees performance management
programs are assessing the current situation, implement a plan and follow up. For managing
the performance of the staffs, Flight Centre can provide incentives to the staffs in order to
make them work more.
Results
When employers will be provided more incentives thy will perform better, providing
better coaching will help them in improving performance, building a good relationship with
the employers will also motivate the staffs in working and delegating the task will also make
them easy to work.

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Reference list
ABC News. (2018). Flight Centre accused of 'ripping off' customers, underpaying staff in
'cult' workplace. [online] Available at: http://www.abc.net.au/news/2018-08-22/flight-centre-
accused-of-ripping-off-customers-underpaying-staff/10051474 [Accessed 12 Oct. 2018].
Ahmed, T.M., Bezemer, C.P., Chen, T.H., Hassan, A.E. and Shang, W., 2016, May. Studying
the effectiveness of application performance management (APM) tools for detecting
performance regressions for web applications: an experience report. In Proceedings of the
13th International Conference on Mining Software Repositories (pp. 1-12). ACM.
Flight Centre accused of underpaying staff, w. (2018). Flight Centre accused of underpaying
staff, workplace bullying. [online] ABC Radio. Available at:
http://www.abc.net.au/radio/programs/am/flight-centre-accused-of-underpaying-staff-
workplace-bullying/10186340 [Accessed 12 Oct. 2018].
Flight Centre. (2018). Cheap Flights, Hotels, Tours, Cruises and Holidays - Flight Centre.
[online] Available at: https://www.flightcentre.com.au/ [Accessed 12 Oct. 2018].
Kogovsek, M. and Kogovsek, M., 2015. Hospitality and tourism gender issues remain
unsolved: A call for research. Quaestus, (6), p.194.
Mail Online. (2018). Flight Centre accused of ripping off customers and workers. [online]
Available at: https://www.dailymail.co.uk/news/article-6085437/Flight-Centre-hits-claims-
taking-advantage-customers.html [Accessed 12 Oct. 2018].
Nicholson, D., Pekarek, A. and Gahan, P., 2017. Unions and collective bargaining in
Australia in 2016. Journal of Industrial Relations, 59(3), pp.305-322.

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Paludi, M.A. ed., 2015. Bullies in the Workplace: Seeing and Stopping Adults Who Abuse
Their Co-Workers and Employees: Seeing and Stopping Adults Who Abuse Their Co-
Workers and Employees. ABC-CLIO.
Robertson, G., 2015. Unlawful discrimination in the workplace. Legaldate, 27(3), p.4.
Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the
public sector. Routledge.
Worthington, A.C., 2016. Financial literacy and financial literacy programmes in Australia.
In Financial Literacy and the Limits of Financial Decision-Making (pp. 281-301). Palgrave
Macmillan, Cham.