Operating Cost And Performance Measurement In British Airways Management Essay

British Airways have a wonderful Employer Brand and are one of those companies that virtually everyone wants to work for. Consequently, the difference that we bring is around the intelligence of candidate screening and filtering – helping candidates know if a particular job is appropriate for them, right from the start. And enabling the recruitment team to spot the best people and fast track them through interview to offer, for a rapid contribution to the business.

British Airways is the UK’s largest international scheduled airline, flying to over 550 destinations at convenient times, to the best-located airports. Whether customers are in the air or on the ground, British Airways takes pride in providing a full service experience. The British Airways Group consists of British Airways PLC and a number of subsidiary companies including in particular British Airways Holidays Limited and British Airways Travel Shops Limited

In an incredibly tough trading environment we have to focus hard on pulling ourselves through the immediate crisis, while prepare the business for the better economic times. Our aim to fill the drive and competition of the Olympic spirit into the way we work and perform as a team, and it puts our customers at the heart of our culture.

The structure of the world’s leading global premium airline focuses on the improving operational performance and financially fit. To achieve the strategic goals we need to measure our HR performance across the business and to make our managers accountable for delivery of our targets. In order to become the leading global premium airline, we need to look at the way we work as well as what we are doing as a business.

Reuters reported one source as stating that under the plan ‘British Airways would have a 100% economic interest in a subsidiary that is KLM which will have some ingenious bits and pieces in the way it is structured to satisfy Dutch corporate governance rules and the aero-political implications of foreign ownership.’

Furthermore, BA would own only 49% of voting shares, with the remaining 51% held by Dutch investors and financial institutions brought in as ‘friendly’ shareholders who would hold an ‘A’ share equivalent that had no real economic value. BA meanwhile would own a ‘B’ share which would have no nominal value or voting rights, but which would capture some 99% of the economic interest. It is not certain yet whether the proposed structure would satisfy the requirements of certain bilateral treaties that have ‘ownership and control’ clauses. United Airways, a US carrier, has said that the USA might be willing to waive any objection to KLM ceasing to be Dutch and still maintain its position under a bilateral agreement with the Netherlands if Britain agreed to open the British trans-Atlantic aviation market, according to Reuters.

2. Strategy & Objectives:

Provide a human capital management (“HCM”) solution for the recruitment process that mirrors the full service experience enjoyed by passengers.

A more sophisticated, cost effective HCM solution to reduce the time attract and retain new employees and improve the candidate experience. Support opportunities at a number of levels – from school leavers to experienced professionals, with positions ranging from engineers to customer services.

Effectively manage the quantity of applications being received and be able to quickly find the best candidates. Reduce administration time and manpower costs. Make the candidate experience more consistent. A powerful management information tool was another key requirement, as was the opportunity to store and share applicant information and job vacancies between different parts of the organisation. Integrate all parts of the recruitment process and replace the separate systems that were currently being used.

3. Problem statement:

The main issue surrounding this is that of management. Much work has been done relating to how best to manage human resources. Management is an inexact science because of the very fact that humans are involved and what might work in one situation and with one group of people will not work in another situation.

3.1 Some problems that British Airways facing these days:

The selection of right employees in British Airways is very difficult, the performance measurement of employees, the cost of British Airways is very high rather than other Airways companies and the quality of British Airways does not match the cost that the customers paying for travel. How can the British Airways improve their Human Capital Management, quality of products, decrease the cost and what type of requirements needed to sustain their old employees in British Airways Company?

3.2 Challenges:

The sheer size of the company and the diversity of their operations meant that there were many different ways to start and develop a career with British Airways. The influx of applications for each position and the ability to treat each application effectively at an individual level.

3.3 Methodology:

For the purpose of data collection there are lots of methodologies like

interview,

questionnaire,

Websites and etc.

So we are using the interview method for the collection of data.

4. Selection of data:

Secondary research data:

Human Resource Management:

Accordance to Susan Heathfield (2008) “Human resource management is the function that focuses on the organization recruitment, management and providing direction for the people who works in the organization. Human Resource Management is also the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.”

4.1 Three HR activities of British Airways:

In British Airways there are 3 main Activities are following for the achievement of future strategic goals. These are

4.2 Recruitment and Selection through (HCM):

Recruitment and selection is the most integral part of the any organization. For the purpose of recruitment and selection the British Airways using HCM (human capital management). HCM is the integrated solution for the recruitment process, which truly reflects the British Airways full service experience. Effective management of volume applications from external jobseekers, internal candidates and staff moves. It has the Ability to target specific application forms that can be selected very quickly and ability to measure the efficiency and result achieved.

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4.3 Training system of British Airways through (TIS):

According to the Decenzo, David A (2005), training is the learning experiences that look for a relatively permanent change in an individual and improvement on the job performance. Tata Interactive system (TIS’ learning solutions include on-boarding, sales training, process training, product training, curriculum design, assessments, soft skills training, and technical training, among others.

According to TIS’s Alan Samuel: “BA has joined a growing number of major and important employers in the UK and Europe who are choosing TIS to design and develop e-learning materials for their staff. After just five years operating in the UK, TIS is approaching the completion of its 600th e-learning project.”

4.4 Reward System of British Airways:

According to the Micheal Armstrong and Helin Murlis (2007), the purpose of reward system is to improve the performance of organization, team and individuals. British Airways offers highly attractive rewards packages like monitor wages across the different industries in which we recruit, and undertake regular reviews to make sure our salaries remain sufficiently competitive to attract and retain the calibre of people we need. The rewards and benefits includes both financial and also non-finanacial.

Opportunities for reduced air fare travel and travel discounts

Generous holiday entitlement

Contributory pension and private healthcare schemes

Profit share scheme

Bonus

Employee share scheme

Superb sports and social amenities & opportunity to join BA Clubs

Subsidised staff restaurant

5. Accomplishment of British Airways Objectives and Goals through efficient HR management:

British Airways uses different procedures for the purpose of achieving the objectives:

5.1 Recruitment and Selection:

The purpose of recruitment and selection process for British Airways is to select the right person who is capable to do the job. For the purpose of this British Airways uses the two major selection processes.

British Airways selection process involve up to three stages depending on the position for which you are applying. Stage One includes the application form, and if you meet the first set of criteria here, you’ll be invited to attend a second stage one-day assessment. The assessment methods British Airways use include group exercises, interviews, psychometric tests, presentations, fact-finding exercises and one-to-one role-play..

Group exercises:

Group exercises look at how you work with other people, in particular examining your influencing, communication and teamwork skills.

The interview:

The interview is about you and your experience. You will be asked for examples of how you behaved in different situations drawing on examples from work, university, school, a club or home. We won’t throw in a ‘killer’ or ‘trick’ question to put you off, or ask unrelated questions to see how you behave when caught off guard.

Psychometric tests:

Psychometric tests are timed exercises that look at your ability and potential. The tests use most often focus on verbal and numerical skills. It also include a personality assessment which is another tool designed to find out a bit more about you. It adds to our understanding, but is not the sole basis of a decision as to whether you would be successful or not; after all.

5.2 For internal and external recruitments:

StepStone’s i-GRasp Solution:

StepStone is a leading international provider of online software and services for the HCM sector. StepStone i-GRasp gives organisations the tools for complete control over all aspects of external and internal HCM processes for recruitment. Allow customers to operate their own brand private career sites, covering both external and internal candidates.

Since the implementation of StepStone i-GRasp, the candidate experience has become faster and more reliable. British Airways now has specifically targeted application forms, which can be selected very quickly – this allows more flexibility and contributes to an improved candidate experience. With

StepStone i-GRasp they can select a tailor made form at the touch of a button. British Airways are also enjoying the functionality, which enables CV’s to be attached to applications – this is another simple yet effective way of improving the candidates’ experience

Human Capital Management:

An integrated HCM solution for the recruitment process, which truly reflects the British Airways, full service experience.

Effective management of volume applications from external jobseekers, internal candidates and staff moves.

In the first three weeks of going live there were 3085 applications.

Ability to target specific application forms which can be selected very quickly and the ability for candidates to attach CVs.

Ability to measure efficiency and results achieved.

A faster, more reliable, improved experience for candidates.

Ensures that the employer brand shines in the marketplace.

Ability to attract and retain the best talent.

British Airways recruitment processes usually involve personal interviews at our premises.

British Airways will never ask for money, nor ask you to email / scan or otherwise send copies of personal documents.

British Airways is currently not offering sponsorships

5.3 Training:

The main purpose of the training is to minimize the errors. British airways using these 2 major training processes

Computer based training:

Computer based training courses to be used by over 50,000 British Airways employees worldwide CBT Systems, a leading provider of interactive education software for information technology training. This significant investment in computer-based training by British Airways will allow over 50,000 employees worldwide access.

TIS:

TIS caters for three segments – Corporate, Education, and Government. It offers its clients innovative learning solutions including:

• Web-based Training & Courseware – to help achieve learning goals

• Simulations – to offer impressive learning experiences

• Electronic Performance Support Systems – to provide on-the-job support

• Software Solutions – to leverage technology in learning

• Game-based Learning – to enhance learner engagement

5.4 Rewards:

British Airways offers highly attractive rewards packages. We closely monitor wages across the different industries in which we recruit, and undertake regular reviews to make sure our salaries remain sufficiently competitive to attract and retain the calibre of people we need. Your remuneration package will be determined by your individual contract of employment. Whilst this varies from business to business, typical benefits include:

Opportunities for reduced air fare travel and travel discounts

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Generous holiday entitlement

Contributory pension and private healthcare schemes

Profit share scheme

Bonus

Employee share scheme

Superb sports and social amenities & opportunity to join BA Clubs

Subsidised staff restaurants

6. Two HRM Models used at the British Airways:

6.1 Best practice model:

Best practice model is a theory of model practice, which is based on the employment security, sophisticated selection of employees, decentralization of the power and teamwork, extensive training and motivation of employees. so British Airways using his model for future Benefits because it provides the high benefits, motivation to employees, security of employees, training of new and existing employees for the performance improvement.

For the future benefit British Airways using the new airways pension scheme (NAPS).

Normal retirement age for cabin crew raised from 55 to 60 initially and 65 after 5 years.

Normal retirement age for pilots raised from 55 to 60 – 65 if countries such as France and the USA remove restrictions on older pilots overflying them.

Slower accrual rate

Pensionable pay increases no more than inflation

Pension increases on retirement capped at 2.5 per cent each year

Company and staff to share impact of changes in life expectancy

6.2 David guest model:

David guset model is more elaborated and well furnishied model of Harvard,s which talk about the high quality, staratigic management, long term goals, objectives and high commitment.Britisg Airways also using thish model for customer satisfaction and best quality for the customers.

For the implementation of David Gusest model brutish Airways using the StepStone’s i-Grasp solution.

StepStone provides software and services for the complete spectrum of HCM, which enables organizations to use its technology to attract, retain and develop talent. StepStone delivers a powerful complete suite to reinforce each element of the attraction and retention process from the initial pre-hire attraction of candidates, through on boarding to HCM of employees post-hire including HR Management, Performance Management, Compensation Management, Skills & Competency Management as well as Career & Succession Planning, Training & Development Management and Organizational Charting. StepStone’s fully web-based software solutions have been deployed by more than 1,500 companies such as Amazon, British Airways, Cadbury Schweppes, Coca Cola, Deloitte, European Central Bank, Lufthansa, McDonald’s, Statoil, TNT, Toyota, TUI, Vodafone, Xerox and Yahoo. StepStone’s worldwide offices in Europe, North and South America, Asia and Australia, its partners and distributors guarantee customer proximity.

7. Planning and development methods usind in British Airways:

Planning Methods used in British Airways:

Accordance to the Micheal Armstrong(2006), human resource planning is a way to find out and to get the people needed to run the business for now and also for the future. Therefore HR planning is a process through which management insures the right person who nis capable to complete the task which help to achieve the long term goal.

7.1 Demand and supply forcasting method:

The demand and supply method deals with the future demand s and needs of the customers. British Airways using this method for the forecasting of future.

7.2 Launched new routes:

British Airways launched new routes from London to Hyderabad and St Kitts, launched OpenSkies, our subsidiary flying from continental Europe to North America in June 2008, and subsequently purchased L’Avion in July 2008; and British Airways announced the launch of the first London City to New York JFK service to start later this year.

7.3 Efficient and flexible Aircraft:

Investing in efficient and flexible new aircraft makes sense, even in these tough

Times. With the arrival of our new Boeing 787s delayed, we contracted six Boeing

777-300ER aircraft (two acquired, four leased), with options for a further four.

7.4 Development Methods:

According to the Richard andElwood F.Holton (2009) HRD is a process of developing and unleashing expertise for the purpose of improving individual, teamwork, processes and organizational system performance. In British Air ways they are more concerned with the skills and training.

7.5 corporate responsibility

British Airways vision is to become the world’s most responsible airline, and we have brought all our corporate responsibility activities together under the banner ‘One Destination’. We have set challenging goals for further reductions in our carbon emissions, reducing and recycling waste and minimising air and noise pollution. We have continued to invest significantly in our community relations programme and are proud of our record of raising money for charities, both as a business and through the incredible energy and commitment of our people.

7.6 Tata intractive system (TIS):

TIS caters for three segments – Corporate, Education, and Government. It offers its clients innovative learning solutions including:

• Web-based Training & Courseware – to help achieve learning goals

• Simulations – to offer impressive learning experiences

• Electronic Performance Support Systems – to provide on-the-job support

• Software Solutions – to leverage technology in learning

• Game-based Learning – to enhance learner engagement

8. Performance measurement of British Airways:

Performance measurement

By David Parmenter

David Parmenter explains a new approach to key performance indicators – and why your organisation could well be working with the wrong measures. Show me a company that thinks it has key performance indicators (KPIs), which it measures monthly and quarterly A lot of firms are using the wrong measures, many of which they incorrectly term KPIs. Few organisations really monitor their true KPIs, because they haven’t explored what a KPI actually is.

8.1 Balance scorecard:

Financial. Increased outgoings, including airport surcharges and the costs of overnight accommodation for seriously delayed passengers.

Customer. Dissatisfaction among delayed passengers and those people meeting them at their destination – they’re potential customers.

Environment/community. Increased carbon emissions from aircraft using extra fuel to circle airports after missing their landing slots.

Learning and growth. A negative impact on staff development, as employees would tend to replicate the behaviour that had caused the delays.

Internal processes. An adverse effect on aircraft servicing schedules.

Employee satisfaction. Increased stress for staff who have to deal with unhappy passengers.

The extensive research in this area has led me to conclude that there are three types of performance measures:

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8.2 Key performance indicators (KPI):

Let me explain what a KPI is by telling a story about British Airways’ former chairman, Lord King, who hired a group of consultants in the eighties to determine the key measures that he should focus on to turn around his ailing company. They told him that there was one critical success factor: the timely arrival and departure of aircraft. The importance of the “timely arrival and departure of aircraft” critical success factor can be seen by the impact of delayed flights on all six perspectives of the following balanced scorecard:

KPIs represent a set of measures focusing on those aspects of performance that are the most crucial for the continued success of an organisation. There are only a few in any one firm and, as the BA story shows, they have a profound impact if they’re monitored constantly at the top.

A few KPIs can be measured weekly, but most should be measured daily or even hourly. Measuring them monthly is closing the stable door well after the horse has bolted. Most organisational measures are very much indicators of what happened in the past month or quarter. These are not KPIs. That’s why a six-monthly customer satisfaction survey can never be a KPI.

A KPI should show what action needs to be taken – the “late plane” indicator signalled that everyone should focus on recovering lost time. Cleaners, caterers, ground crews, flight attendants and liaison officers with air traffic controllers would all work some magic to save a minute here and a minute there while keeping up standards of service.

A KPI is deep enough in the organisation that it can be tied down to an individual. Return on capital employed has never been a KPI, since it cannot be attributed to one manager.

A good KPI will affect most of the critical success factors and more than one aspect of an organisation’s balanced scorecard. When the boss focuses on the KPI and everyone follows suit, the firm wins on several fronts. An improvement in a key measure within the critical success factor of customer satisfaction should have a positive impact on many other measures. The timely departure and arrival of flights helps the ground crews to improve their service, for instance

Key result indicators (KRIs) that tell the board how managers have performed in terms of a critical success factor or perspective of the balanced scorecard.

The performance indicators (PIs) that tell staff and managers what to do.

The KPIs that tell staff and managers what to do in order to increase performance dramatically.

8.3 key result indicators (KRI):

The common feature of KRI is that they are the result of many actions. They give a clear picture of whether a firm is moving in the right direction and the progress it’s making towards planned goals – that’s the role of Pis and KPIs. KRIs that have often been mistaken for KPIs include:

Customer satisfaction or profitability

Employee satisfaction

Net profit before tax

Return on capital employed.

An organisation should have a governance report comprising up to ten measures providing KRIs for the board plus a balanced scorecard

Comprising up to 20 measures – a mix of KPIs and PIs – for the management team.

8.4 Performance Indicators (PI):

While they are, by definition, not key to the business, PIs are crucial for teams to align their daily activities with the organisation’s strategic aims. They complement the KPIs and are shown with them on the balanced scorecards of the organisation and its divisions, departments and teams.

PIs could include the following:

Profitability of the top ten per cent of customers

Net profit on key product lines

Number of employees participating in the staff suggestion scheme.

KRIs replaces outcome measures, which typically consider activity over months or quarters. PIs and KPIs are now characterised as past, current or future measures. An example of a past measure would be the number of flights last week that were delayed. A current measure would be the continually updated tally of delayed flights. A future measure would be the number of initiatives to be started in the next month to target problems causing delays to flights. You will find that the true KPIs in your organisation are either current or future measures.

Primary Data:

Questionnaire:

Analysis of Primary Data:

How can the effective leadership and mgmt fulfil strategic goals?

Remove communication barriers

Right sizing

Equal opportunity

Percentage

A

20

B

35

C

60

How can the British Airways reduce the operation cost?

Use part time workers

Permanent workers

Percentage

A

30

B

35

C

25

How can British Airways motivate to their employees?

Training

Insurance security

Pension

Percentage

A

33

B

60

C

17

How can the British Airways compete to the competitors?

Use latest technology

Reduce cost

Change long term strategies

Percentage

A

25

B

35

C

40

How the British Airways retain their employees for long term projects?

Pension

During job benefits

Good environment

Percentage

A

45

B

10

C

50

How can BA get higher profit than competitors?

Open new franchise

Improved in operations

Higher right person for right job

Percentage

A

34

B

35

C

40

Is there any impact of BA on the UK economy?

Yes

No

Percentage

A

45

B

25

What is procedure of British Airways to hiring the workers?

Internal hiring

Internet

references

Percentage

A

25

B

35

C

40

Conclusion:

British Airways is a full service global airline, offering year-round low fares with an extensive global route network. British Airways is all about bringing people together, and taking them wherever they want to go. This applies as much to our employees as the 36 million people who travel with us every year. It’s about offering greater diversity, more development, better training and more valuable experience. It’s about investing in our employees and their futures. For it’s only when they realise their the travel industry is notoriously competitive, and we have certainly had our share of challenges over the past few years. We believe we now have a firm strategy in place that gives us good cause for optimism going forward. Full potential that we can achieve our broader business goal.


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