Strategic Human Resource Management of Japanese Airlines
The Japanese Airlines is the Asias largest airline that confronts a problem of employee management. The employee management problem was caused by the low wages outsourcing employees (IASCO) which are non-Japanese, the downsizing of staff, and the cutting of remuneration. The needed of outsourcing employees occur because of the cost reduction. The emphasis on the cost saving has forced many organizations to change the company’s human resource structure same as the Japanese Airlines. Moreover, JAL faced the problem of inequality of work between IASCO’s staff and JAL’s employees. As a human resource director of Japanese Airlines, JAL should sort out the mess by having a good possible business strategy and human resource strategy. Both of the business strategy and human resource strategy should related and work together for a long-term focus to enhance the competitive advantage for JAL. The business strategy and human resource strategy are very important for the organization to create a good working cultural environment.
A business strategy is a procedure that coordinated a set of commitments to create an organization’s core competencies and competitive advantages (Liao, 2005). To build a long-term competitive advantage, the company needs to manage employees, knowledge, and competences (Pablos, 2008). Business strategy can define a company’s plan for future direction, profitability, and development. The future economic and market conditions are difficult to predict. However, the Japanese Airlines should develop the picture of future that company sees to create the talent strategy to make the successful business strategy. Human resource management practices should combine with business strategies for achieving a good organizational performance. Krama et al. (2008) says that every organization should concern on the company mission and goals to classify the human resource needs which are skills, behaviors, and culture. For example, the Japanese Airlines’ mission is to be a leader in Asia market. Therefore, JAL should analyze the company internal and external analysis. Supposing that the threat of JAL is the economic problem which caused the company to gain lower profits and lose market share so JAL should find the employees that have related skills and experience in the airline field because the experienced employees will not create more mistakes and the cost saving will occur.
The business strategies can classified into three types which are cost reduction, innovation, and quality enhancement (Liao, 2005). The human resource outsourcing can contribute to the low service quality same as the Japanese Airlines that the IASCO crew members did not perform their tasks well because they care only the money unlike JAL’s crew members that work hard and perform their tasks to bottom line profits. Moreover, the outsourcing human resource is difficult for JAL to strengthen the core competencies within the organizations because of the different in organization strategies and cultures. According to Woodall (2009), the outsourcing employees can change the culture in the work place. From the Japanese Airlines case study, the strategy of cost reduction is being concerned by JAL after the company faced the problem of outsourcing employees. Therefore, as the manager of JAL, the non-Japanese crew members that JAL will select should understand and follow the company’s business strategy. Moreover, human resource manager should find that which third party crew leasing company are match with the human resource objective and business strategy of JAL by weighting the advantages and disadvantages of the third party crew leasing company (Delmotte, 2008). The weighting results can give the direction to the Japanese Airlines that which company is the most appropriate to JAL and also meet the company’s business strategy.
Human resource strategy is the way to guide company’s human resource activities that will affect the company. According to Foot (2008), the human resource strategy occurs from a strategic approach to people management that straightens with the business strategy to achieve strategic goals of business. A good strategy can perform by individuals who follow and reach the company’s goals. The Japanese Airlines’ staff must be motivated to perform skills and tasks effectively. Therefore, the human resource department of the JAL needs to have clear strategies and structures for human resource staff to achieve goals and deliver the satisfying outcomes. Foot also states that the main focus of human resource management is to acquire, develop, and maintain a high performance work force in the organizations. Hence, the Japanese Airlines need to improve the company’s human resource function by reconsidering human resource strategy in the organization. The human resource strategy that JAL need to practice are talking to management and individuals, human resource planning, recruitment and selection, learning or training, performance management, employee relations, and job evaluation.
The first human resource strategy for the Japanese Airlines to practice and consider is talking to management and individuals. The human resource department needs to manage the internal and external relationships with third-party employees, in-house employees, and managers to be a strategic partner (Delmotte, 2008). JAL’s manager needs to be open by asking employees what they want and perform the results. According to Hills (2009), Asking and talking with employees will create the maximum satisfaction and value within the organization. However, human resource manager should be professional enough to answer the questions and solve the problems for employees when the line managers are not available to answer the questions (Woodall, 2009). The supporting from human resource function can reduce the mistakes that caused company to create higher costs. Thus, it is very important for the Japanese Airlines to talk to management and individuals.
The human resource planning is the second consideration to emphasize for the Japanese Airlines. Krama et al. (2008 P.219) says human resource planning is “the process through which organizational goals are translated into human resource goals concerning staffing levels and allocation”. The forecasting of the requirement of human resource in the organization is necessary for the company to do human resource planning. The Japanese Airlines should plan the important function of both JAL and ISACO crew members’ responsibility to meet all of the company’s needs. Krama also states that the process of human resource planning is include the developing and implementing the plans to certify the right number of employees who have appropriate skills for the right time and place. Therefore, JAL human resource management needs to develop and implement the human resource plan to be the guideline for human resource to have the same direction in finding the right employees for the right jobs at the right time.
Forecasting is the important step for human resource planning process to determine and predict the demand and supply of employees within the organizations that which function will be shortage or surplus in the future (Krama et al., 2008). According to the Japanese Airlines case study, JAL want to reduce the number of crew members because the company wants to cut the costs due to the situation of bad economy that make company making a loss. To solve the problem of the downsizing of staff, the forecasting process is required for JAL to plan and predict the future direction of human resource. The forecasting process will be advantages for JAL to have the sufficient staff requirement. All of the IASCO crew members and JAL’s employees will match with task efficiently. The excess of the Japanese Airlines’ employees will not arise even the present future.
The next step of the human resource strategy is recruitment and selection. Recruitment is the activity that the organization identifies and attracts the potential employees (Krama et al., 2008). The goal of recruiting process is to find the appropriate amount of qualified applicants. If the unqualified and large number of applicants is occurred, the company will spend a lot of expenses in selecting people. According to Smith (2008), recruiting and selecting people – the key resource of an organization is the activities that building an efficient organization. Krama et al. also states that the requirement of the best selection method is interviews, references data, physical ability tests, cognitive ability tests, honesty test, and work samples tests. The Japanese Airlines should find and select the best candidate that can match with the role completely by describe clearly about the requirement of abilities, skills, attribute, and qualifications. For the suggestion to the Japanese Airlines, the company should select the crew members both from the third-party leasing that have the ability to handle multi-task to save the cost of hiring more staff. The Japanese Airlines needs to reorganize the job design by giving more tasks and responsibilities to employees. The multi-skill is necessary for JAL to consider in the recruitment and selection process. Therefore, the recruitment and selection is the important process to give the direction to the Japanese Airlines because employees play the important role to the organization. The quality of service is depending on the performance of the company’s employees.
The learning and training are another human resource strategy that the Japanese Airlines should practice and consider. According to Pablos (2008), the employees’ knowledge can contribute to the achievement of the company competitive advantages. Therefore, JAL must provide the learning and training program to employees to gain more knowledge and improve the employees’ performance. The continued improvement in the quality of service will give the benefits to JAL in terms of the customer satisfaction. Moreover, JAL should offer a chance for employees by giving a different task that needs different types of skills to let them show the diversity of their skills. The different tasks that employees perform can give the value to JAL in terms of the competitive advantages because the company will have staff that can hold the multi-task and expert in all level of skills. The Japanese Airlines need to provide the training program for IASCO crew members and JAL employees to improve the skills and quality of service in every three months. The employees who have expert skills should be the trainer for others who are new to the company to make them improve quickly. Moreover, the IASCO crew members need to learn the culture from the JAL staff to avoid the problems of the different in service providing between IASCO crew members and JAL’s staff.
The performance management is the important factor that the Japanese Airlines should consider when the downsizing of staff is required. Foot (2008 P.239) says the performance management is a strategy which relates to every activity of the organization set in the context of its human resource policies, culture, style, and communication systems. JAL should look at the past performance of all staff when the company needs to lay off employees by having the performance appraisal. He also argued that the requirement of performance appraisal is necessary to improve current performance, provide feedback, identify potentials, identify training needs, assess competencies, solve job problems, provide information about the effectiveness of the selection process, and let individuals know what is expected of them. The rating scales is the method that the company should use to rate the employees’ performance by collecting the past performance which include the working behaviors and the completion of job description and duty. The downsizing of JAL’s employees will be selected from people who cannot meet the requirement of the performance appraisal criteria. The performance management is the fairness strategy to concern for downsizing the staff because it will not hurt the staff that perform their tasks well and have the good performance. Moreover, the company can get the benefits from the good performing employees to reduce the cost of hiring new staff.
To manage the effective performance, the organization needs to set the realistic performance objectives and standards (Smith, 2008). As the manager of the Japanese Airlines, I suggest that the company should provide the infrastructures that impact the working performance to support employees to work better. Smith also says that the performance management requires all participants in the organizations which are managers and employees to discuss and comment on the performance. To create a good performance management, JAL manager and employees should discuss together not only the manger tells employees what to do and how to do. The employees who perform the below standard performance at the first time should be called to ask for improve their performance. The human resource managers should be honest in managing performance. Moreover, the human resource manager is the person who expert in the performance management. Hence, the JAL’s human resource manager needs to provide the feedback and give the advising to all employees who have not satisfied in their performance.
The other human resource strategy that the Japanese Airline needs to practice is the employee relations. The relationship between manager and employees can be described in many ways. According to the Japanese Airlines case study, the managers should create the relationship by talking with employees and listening what employees want. The good relationship between manager and employees will be built if the manager understands and act on the employees’ requirement. Moreover, the company should find the way to build the relationship between the third-party crew members and JAL’s staff to create the good cultural working environment. To create the effective employee relations, JAL must concern on the benefits to employees – working hours and conditions, length of paid leave and other social benefits, freedom for workers to deal with tasks in their own way, involvement in decision-making (Price, 2000). For the suggestion, JAL should not reduce employees’ salary because the cutting of remuneration will make employees will not perform their tasks well. In addition, the benefits which are the rewards and incentives should remain the same as the past to motivate employees to have the morale. For example, JAL should pay the bonus for staff who have a good working performance especially IASCO crew members to motivate them to work for the company not only concern on their own profit unlike the JAL’s staff that work hard for the company to improve bottom line profits.
The last human resource strategy for the Japanese Airlines to consider and practice is the job evaluation. Mclean (2008) says that evaluation is “a set of planned, information-gathering, and analytical activities undertaken to provide those responsible to the management of change in a satisfactory assessment of the effects and/or progress of the change effort”. According to Tziner (2002), the objective of job evaluation is to make all employees have the same viewpoint of the value of each job. The job evaluation is important for JAL to improve human resource effectiveness. Mclean also states that the important reasons to evaluate human resource are to improve human resource process, stop doing ineffective working, and determine future investment in human resource management. JAL needs to consider the evaluation approaches to determine the performance of IASCO crew members and JAL’s employees. Furthermore, the job evaluation is a process to determine a pay scale by looking on the basis of the importance of assigned tasks. The result of pay scale should be fair in order to have equal pay for salary and benefits to the equal value of assigned tasks (Tziner, 2002). As the Japanese Airlines manager, I suggest that JAL should give precedence to the job evaluation to make all staff feel that the company gives employees the fairness value of work with the fairness salary and benefits.
According to Foot (2008), there are two methods of job evaluation which are non-analytical and analytical schemes. Non-analytical job evaluation – whole job ranking, paired comparison, job classification compares the whole jobs rather than analyzing the elements of each job and evaluating factor by factor. Analytical job evaluation – points rating, proprietary schemes is the method that compared skills and competencies needed in each job. From the Japanese Airlines case study, JAL should use points rating method to evaluate jobs because it is easy to understand and the points rating approach can explain the differences between jobs and pay. The person who has responsibility in job evaluation will rate the score from one (the lowest score) to ten (the highest score) for each job by using the criteria such as skill, responsibility for people, responsibility for equipment and materials, responsibility for other employees, mental effort, physical effort, and working conditions. The points rating method can help JAL to simplify the job evaluation.
In conclusion, a good business strategy and human resource strategy – talking to employees, human resource planning, recruitment and selection, learning or training, performance development, employees’ relations, and job evaluation are the method that the Japanese Airlines must follow and practice to solve the problems of the different in culture between IASCO crew members and JAL’s staff, the downsizing of employees, and the cutting of remuneration. The human resource department should play the important role to solve the problems of the Japanese Airlines by concerning on the human resource activities. The company’s business strategy and human resource strategy should related together to provide the better quality of JAL and gain competitive advantages. The cutting of remuneration should be avoided to make employees have the motivation in perform the better performance and meet the company’s goals. Finally, everyone in the organization needs to collaborate in following the company’s human resource strategy for the Japanese Airlines to be superior in the airline market.