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3HRM Case Studies

HRM Case Studies Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Case 1: Easyjet

Q1. EasyJet Performance

In the airline industry certain common performance indicators are used to measure the competiveness of an airline, they include: number of passengers carried each year, punctuality of flights, quality of in-flight services, operating profit per seat, aircraft utilization, load factor and size of fleet. The key performance indicators for Easyjet differ slightly with that of the whole industry because it focuses on offering the cheapest flight rates. Easyjet score highly on flight punctuality where 83 per cent of its flight arrived on time and 96 per cent within an hour of their scheduled arrival. Easyjet also has a high aircraft utilization rate with its 122 airplanes carrying over 33 million passenger in 2006. Easyjet high performance is also reflected by the number of airline awards the firm has received since its inception. It operating profit per seat also rose sharply in 2007 from 332p to 430p.

Q2.Non-financial performance indicators used by Easyjet

Non-financial performance indicators provide a clue to the future performance of a company and therefore it is important for Easyjet to pay attention to these indicators. Among the key non-financial indicators used by Easyjet is their emphasis on providing optimal quality and ease to their customers. Easyjet prides itself in having one of the lowest luggage loss rates in the airline industry and rarely are their customers parted from their luggage. Another non-performance indicator used by Easyjet is the ease of booking a flight on its online ticket selling platform. Key challenges in Easyjet’s operations is its poor show in the employee satisfaction performance indicator. EasyJet has a high-employee turnover especially among pilots and cabin crews who have limited career growth opportunities. An improvement in these key performance indicators would see Easyjet continue being a high performer in the low-cost segment of the airline industry.

Q3. HRM Competitiveness

Faced by intense rivalry by other low-cost carriers, Easyjet needs to use HRM to gain a competitive advantage over these rivals. High turnover of pilots should be combated by offering pilots better remuneration and adding new models of aircrafts to their fleet so pilots can gain additional skills flying different types of aircrafts. Career development programs and opportunities would help Easyjet maintain a more satisfied cabin crew. Easyjet can also open up career advancement paths for cabin crew in other departments of the airline including management or ground operation. By adopting these two practices Easyjet will be able to stay ahead of the likes of Virgin, Ryanair and Corendon.

Case 2: BMW

Q1 HRM practices and Success

HRM practices at BMW underpin the turnaround of the firm’s operations in Birmingham that since took over from Land Rover. One of these practices is BMW’s employee engagement practices where it asks employees to contribute idea to cut cost. In a voluntary suggestion scheme BMW asked employees to contribute cost saving ideas and the employee responded with an average of two ideas each. From these idea 6 million pounds were saved. By having employees contribute to overall cost saving a sense of belonging to the organization is developed in BMW employees. Secondly, BMW has linked its remuneration rate to performance offering 260 pound bonus on condition the workers ideas save 800 pounds per worker. Additionally, BMW has implemented a time management system where overtime hours are not compensated expensively but covered by additional holidays. BMW has also transformed the work environment, putting up lawns in place of rundown buildings and has put up a sprung floor in the assembly line.

Q2. BMW’s SHRM approach

BMW success can be owed to the strategic human resource approach it has adopted. BMW HRM practices are in line to those proposed by the best-fit approach to SHRM. BMW operations in Birmingham have adopted measures that have never been used in the UK before. These include the large bonus linked to a cost cutting target and the large increase in wages and doubling of the number of workers. BMW asks its worker to contribute ideas showing its focus on cost cutting a common feature of the best-fit approach of SHRM. The best fit approach is criticized for its disregard for workers interest a feature that is apparent in BMW HRM practices. BMW introduced draconian rules on smoking and drinking in the production area. It also introduced a system where it avoids paying workers for overtime another cost cutting measure.

Q3. BMW consolidation phase

According to BMW management they would like to make further cost savings and improve the quality of products. BMW seems to prefer the simplistic view of the best-fit approach without paying attention to the people who will make the cost savings and quality improvements possible. BMW should consult the workers before doing away with the Sunday. Workers were already complaining about unjust compensation for overtime hours they had worked. Secondly, BMW want to increase pressure on employees to increase production during the week regardless of the fact they had already overshot production targets. In contrast, the best-practices approach can help BMW prevent worker unrest that is bound to occur if the company’s focus remains on cost saving, productivity and quality instead of people.

Ferrari Case Study

Q 1. Recruitment Brand

Ferrari is one of the world’s most famous brands associated with prestige and luxurious cars. Ferrari has excelled in creating a strong product brand that also doubles up as a recruitment brand. A strong brand like Ferrari assist the company communicate its values, goals and culture to those it to those it wishes to recruit. Another advantage of Ferrari being a strong brand is that it assists the organization streamline its recruitment process. Employees who are not performance driven would keep away from Ferrari. Thirdly, it enables Ferrari attract the top talent in its business sector therefore giving it a competitive edge over competitors in the race to recruit the best talent. On the downside, a company like Ferrari attracts a lot of applicants for any vacancy therefore making the recruitment process more complex than it is necessary.

Q2. Ferrari’s HRM best practices

Among the notable HRM best practices at Ferrari are: Selective recruitment and selection, employee development programs for both managerial and line staff, encouragement of creativity, intradepartmental co-operation, ensuring employee security, Performance related pay (PRP) and sharing of information, Hierarchical organizational structure and significant difference in employee status.

Ferrari is an organization that seeks to recruit and retain the best talent in the market. To achieve this objective Ferrari has to make sure its human resources management practices are aligned to this goal. Ferrari has achieved this by putting in place a career development program, ensuring the security needs of their employees are taken care of, linking pay to performance, encouraging employee to be innovative and encouraging exchange of ideas across departments. These are some of the features most desired by the most talented employees in their workplace. On the downside, Ferrari has retained a hierarchical organizational structure that has been found to hinder the potential of the most talented employees.

Q3. Risk of High-Performance work environment

Although high performance work environment create competitive advantage for a business they also place excessive pressure on individual to perform highly. Where an organization maintains a high performance environment it risks causing exhaustion, physical and psychological injuries to its employees. In Ferrari’s case the employee complain that they are being forced to hide injuries clear evidence that Ferrari’s work environment leads to injuries among employees. Where employees overexert themselves in their work they may suffer psychological injuries and form the notion that they are doing more for the organization than they are being compensated for. Ferrari employees are complaining that their performance as evidence by increased productivity does not match their pay. Therefore an organization that wants to implement a high performance work environment runs the risk of a higher wage demand from its employees.