All entries for Sunday 28 September 2008

September 28, 2008

Human Resource Management Lesson 2 Exercise

The Role of HR department at the Iberia airline

This blog entry will analyse the role of the HR function at the Spanish airline Iberia. The information about HR comes from my own experience as Project Manager for this company, hence I have been able to gain some insight on their procedures and organisation structure.

The role that HR plays in the organisation will be analysed as well as the strengths and weaknesses of HR in the context of the organisation. 

The external context

The external context for Iberia is shaped by several aspects including economic factors such as the increasing prices of the petroleum which poses a significant cost challenge to all the airlines and the increased competition coming from low cost companies like Easy-jet or Ryanair.

Thus, one significant force driving HR decisions is the need of increase the productivity of the employees. For example Iberia's air stewardess fly an average of 850 hours a year compared with 900 of Lufthansa or 1000 hours in a low cost company (however this figure looks excellent in front of the 595 hours of Alitalia).

This productivity increase is one of the main objectives of the HR policies and also one of the main sources of conflict betweeen management and employees.

The internal context

Among other factors, the management style have greater influence on the type of HR decisions that can be taken in a company.

Some characteristics of the management style in Iberia are:

    • Few emphasis placed on developing relations with employees as Individuals
    • There's nothing like a flexible reward structure, pay is determined by the trade union collective agreement
    • The employee appraisal system in place is a very simple one
    • Employees have few to say regarding decision-making that concern them. No open discussions with employees for problem solving
    • There are no periodic surverys to test the employee's views or morale
    • Unions are recognised although the critical aspects of strategy rest with management 

    Trade unions have significant influence in Iberia partialy as a result of its past as a public company (Iberia finished its privatisation by 2001) and also because of the substantial bargaining power that the company employees have (specially the pilots). This bargaining power is exercised through powerfull trade unions.

    The Purcel's (1986) framework classify the approach to human resources by determining whether managers put emphasis on individualism or collectivism in managing the workforce.

    According with the previous characteristics, the predominant management style in Iberia would be "Constitutional". In this style, labour is viewed as a factor of production and employee subordination is assumed, although unions have been recognised and are accepted as inevitable.

    Management Style in handling employee relations

    However in Iberia it looks like there coexist different styles for different types of employees. While the previous is valid for the "flying" part of the workforce (pilots and air attendants) there are differences for the rest of the employees for which there is more emphasis on Individualism or the power exerted by the trade unions is much lower.

    The role of management in HR

    In Iberia there's few intervention on line managers in HR policy, the rules are written and deployed by the HR department itself. According to Storey's (1992) the HR department in Iberia act as "regulators" as they act mainly with a tactical view and are interventionary.

    Typology of HR functions

    In my opinion this role is played basically as a result of several external influences such as cost pressures which make the HR approach more tactical than strategical and internal influences like the management style of the company that gives few importance to the line managers as agents of the Human resource department. However, this can be the result of the particularities of this industry as it would be very difficult to line managers to deploy HR procedures or embrace a more individualistic style when the workforce is flying planes all over the world .

    Strenghts and Weaknesses

    In Iberia, in part due to the management style in place, the HR department devise a set of rules and then deploy them telling employees and manager what they shall do. A consultant process is inexistent and as a result, employees and managers see the process as another obstacle and end up avoiding doing what they have to do. What happens next is that HR moves into the role of a police enforcer, coercing employees and managers which gets everyone frustrated and distantiates HR from the rest of the company. Thus, the lack of a consultation process in place look like a major weakness of the HR role in the organisation.

    The low use that the organisation make of line managers as agents to deploy Human Resource policies is another significant weakness. It doesn't matter how good is the HR strategy if it is not well implemented at a local level and this is something very difficult to do without the help of the line managers.

    However, putting some responsibilities in the hands of the line managers may not be the perfect solution. Line manager normally have many "operational" responsibilities and tend to give less priority to the Human Resource aspect of the management (I can tell from my own experience as first line manager in IBM) especially if they have many employees reporting to them. The policy of "use the line managers to deploy HR policies" have to be implemented with care deciding which tasks makes sense to be implemented by line managers and by the Human Resource department.

    References

    Mick Marchington and Adrian Wilkinson (2005), Human Resouce Management at Work, Third Edition (2005), Chartered Institute of Personnel and Developement, 151 The broadway. London, SW19 1JQ, UK

    Purcel, J (1986)'Employee Relations Autonomy Within a Corporate Culture', Personeel Management, February

    Storey, J. (1992)'Developments in the Management of Human Resources' Oxford: Blackwell

    Helen Newell, study notes, The Warwick MBA for IBM, IB811Z, 2008, University of Warwick, Coventry CV4 7AL, UK


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