Models of Strategic HRM: British Airways Case Study

Models of Strategic HRM British Airways Case StudyStrategic human resource solicitude may be observed as an address to the likement of human resources that furnish a strategic framework to sustain long-term trading goals and outcomes. The forward motion is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need.Comparison with the ModelFiedler Contingency ModelBath People and Performance managementleaders membership Relationship which is the most important variable in determining the situation favourable (Accept and respect by followers)The outgrowth and successful implementation of juicy performance work practices, parti on the wholey those concerned with job and work design, flexible work resourcing (recruitment, plectron and Talent Management), employee development (increasing skills and extending the skills base), reward and giving employees a articulationThe degree of task st ructure which is the second most important input into the favourableness of the situation(structured task)The formulation and embedding of a clear vision and set of values (the fine-looking idea)The leaders position power obtained through formal authority which is the third most important dimension of the situation.(Great deal of Authority and power ar officially attributed to the leader position)The provision of support and advice to line managers on their role in implementing HR policies and practice.Reason for the importance of HRM in OrganisationHuman resources are enceinte signifi toiletce to arrangements in 10 specific areas, to extent from strategic planning to company goodwill. HR practitioners in a small business who have well-adjusted expertise equip a number of services to employees. The areas in which HR maintains control can enhance employees perception of HR throughout the workforce when they moot HR considers employees to be its internal customers and renders se rvices with that in mind. at that place have ten importance of Human Resource Management in the organization.Strategy paymentBenefitsSafetyLiabilityTraining and DevelopmentEmployee SatisfactionRecruitmentSelectionComplianceStrategyHR improves the companys bottom line with its k like a shotledge of how human capital of the United States affects organizational success. Leaders with expertise in HR strategic management recruit in corporate decision-making that underlies current staffing assessments and projections for future workforce needs base on business demand.CompensationHR compensation specialists develop realistic compensation structures that set company wages competitive with other businesses in the area, in the same industry or companies competing for employees with similar skills. They conduct extensive wage and salary surveys to maintain compensation be in line with the organizations current financial status and projected revenue.BenefitsBenefits specialists can reduc e the companys hails associated with turnover, attrition and hiring replacement workers. They are important to the organization because they have the skills and expertise necessary to negotiate host benefit packages for employees, within the organizations bud lounge around and consistent with economic conditions. They as well are familiar with employee benefits most likely to attract and retain workers. This can reduce the companys costs associated with turnover, attrition and hiring replacement workers.SafetyEmployers have an obligation to provide safe working conditions. Workplace safety and risk management specialists from the HR area manage compliance with U.S. Occupational Safety and Health Administration regulations through maintaining accurate work logs and records, and developing programs that reduce the number of workplace injuries and fatalities. Workplace safety specialists also engage employees in promoting awareness and safe handling of dangerous equipment and hazard ous chemicals.LiabilityHR employee relations specialists minimize the organizations exposure and liability related to allegations of unjust employment practices. They identify, investigate and resolve workplace issues that, left unattended, could spiral out of control and embroil the organization in legal matters pertaining to federal and state anti-discrimination and torture laws.Training and DevelopmentHR training and development specialists coordinate new employee orientation, an essential step in forging a truehearted employer-employee relationship. The training and development area of HR also provides training that supports the companys fair employment practices and employee development to prepare aspiring leaders for supervisory and management roles.Employee SatisfactionEmployee relations specialists in HR help the organization achieve high performance, morale and satisfaction trains throughout the workforce, by creating ways to strengthen the employer-employee relationshi p. They administer employee opinion surveys, conduct guidance groups and seek employee input regarding job satisfaction and ways the employer can sustain good working relationships.RecruitmentHR recruiters manage the employment process from concealment resumes to scheduling interviews to processing new employees. Typically, they determine the most effective methods for recruiting applicants, including assessing which applicant tracking systems are best suited for the organizations needs.SelectionHR professionals work almost with hiring managers to effect good hiring decisions, according to the organizations workforce needs. They provide guidance to managers who arent familiar with HR or standard hiring processes to ensure that the company extends offers to suitable candidates.ComplianceHR workers ensure that the organization complies with federal state employment laws. They complete paperwork necessary for documenting that the companys employees are eligible to work in the U.S. T hey also monitor compliance with relevant laws for organizations that receive federal or state government contracts, through maintaining applicant flow logs, written af dissipatedative action plans and disparate impact analyses.Explanation and synopsis of an HRM frameworkExplanation of an HRM FrameworkExternal Context(Fixed Effect)Labour LawLabour Market ConditionCharacteristics of labour supply.Factory Specific CharacteristicsLocation, size, age, capital investment, product, unsloped integration, buyers and work place philosophy.Defect Rate, Employee Turnover, Absenteeism and Production efficiency.ProductivityOutput , Sales, Profits.Explanation of the HRM process and how strategies are developedHuman Resource Management ProcessThere could sub functions in the HRM Process in practice.The key areas of HRM Process areHuman resource planningAttraction also called as recruitmentSelectionDirectingTraining and developmentPerformance appraisalPromote, demote or transfer regarding to pe rformancesThe HR Strategy development process should contain the following moveHR culture Gathering The team has to complete the information about different HR Processes, their performance and their impact on the profitability of the organization. The profitability can be difficult, but the team can always make a good estimate about the impact of the process to the results of the organization.Organizational Development Information the information about the development of the organization in the past and its current status. Each organization has several stages in its organizational lifecycle and some trends in the organization are healthy and some trends are extremely dangerous and can impact the future profitability.HR Workshops when the input information are gathered the HR Team has to organize the workshops inside Human Resources, where the piece of the new HR Strategy can evolve. The teams should discuss the findings one by one and all the ideas should be gathered as they c an impact the overall HR Strategy.HR managerial Workshops the information from the previous HR Workshop with employees should go to the attached take aim and the HR Managers should talk about the trends and the topics, which should be included in the HR Strategy and what is the impact on the whole organization and the HR team. The results of the HR Managerial Workshops have to be recorded and the priorities of different parts of the legend have to assign.Preparation of the HR Strategy a dedicated HR sub-team has to prepare the story of the HR Strategy from the approved outcomes from the HR Managerial Workshops. The story has to be strong and appealing for the audience and HR employees.HR Strategy Feedbacks the HR Management Team has to present the pre-final version of the HR Strategy to the fellow managers in the organization and their feedback has to be appreciated and fully and honestly discussed with the managers. The same session has to be organized for the HR employees as they can say their feedback to the HR Strategy Story.HR Strategy approval the HR Strategy has to be approved by the top management as they are the final customers of Human Resources and they should fully agree with the way, the HR wants to operate in the organization within several years.An sagaciousness of the Roles in Strategic HRMHRM is pennyral to a firms strategic management policies. For starters, the business cannot implement its operating strategy, however astute, without the full cooperation of its personnel. Consequently, corporate leadership makes sure to get employees buy-in before rolling out operating tactics. HRM also enables organizations to take a peek at what rivals do and what personnel management strategies they use to trump others. another(prenominal) HRM emolument is that it allows a firm to ensure regulatory compliance in its operations, which is generally a money saver and reputation builder.Assignment TwoBritish Airways Human Resources (HR) strategya. Hu man Resources Management (HRM) modelsThere are umpteen HRM models out there (Harvard, Michigan, etc) but there are mainly three different approaches (Torrington, Hall and Taylor 2008) to achieve competitive advantage through HRM. The universalist approach described by Guest (1989) as a one size fits all i.e. derived from the best practices philosophy also supported by other academics e.g. Delery and Dory (1996), Pfeffer (1994) but some others are also questioning how easy it may be to shift focus of the organisation (Whipp 1992) and even to achieve the goals (Purcell 1991). The fit or contingency approach that can be found in Fombrun et al (1984) is base on both internal and external fit and focus on selection, appraisal, development and reward. This model has been criticised mainly because of its one-way relationship with organisational strategy. The resourced-based approach (Boxall 1996) is built on attributes of resources. To achieve competitive advantage, resources should be V aluable, Rare, Inimitable and Non-substitutable (VRIN).B. British airways HRM aspectsTo define the HR model used by British Airways, we should first analyse the main aspects of its HR Managementcreating motivation and commitment of all employees which continue to play a major part in the success of the company.some of HR measures are intelligibly designed to improve and support employees motivation (British Airways Plc. 2010).a remuneration scheme with profit sharing and encouraged share ownership, this is an effective way for employees to feel more(prenominal) involved in the companys results (British Airways Plc. 2010),training and development are instrumental to ensure resources will be able not only to feel valued in the company but also will be able to enable business objectives achievement (British Airways Plc. 2010)diversity and inclusiveness is seen as a key aspect in the recruitment strategy, this includes genders, ethnicities, religions, etc (British Airways Plc. 2010)c. HRM model used by British AirwaysThe aspects depicted in the previous paragraph show that the internal resources are linked (KPIs, ownership, etc) including the human resources. As described preceding(prenominal) we also realise that human values are in the middle of British Airways strategy. As quoted page 236 of the 4th edition of Managing interpolate (Burnes 2004), Hax and Majluf (1996 p. 10) state that The essence of the resource-based model is that competitive advantage is created when resources and capabilities that are owned exclusively by the firm are applied to developing unique competencies. Moreover, the resulting advantage can be sustained due to the lack of substitution and imitation capabilities by the firms competitors.British Airways used a Resourced Based Model to achieve above average profitability by developing VRIN (Value, Rare, Inimitable, Non-substitutable) resources (Barney 1991). To substantiate this (Parker 1999), let us go back to the mid-nineties when the group started a portfolio analysis and defined the level of criticality of its operations. Based on this review, decision has been do to outsource resources (including human resources) that are not key to the core business. As other major corporations, they retain the strategic components (VRIN) and outsourced the routine activities. This decision helping the group to achieve outsourcing goals i.e. costs reduction, higher quality of services, agility and better focus on core business to meet the business objectives as defined in the introduction.d. Limitations of the Resource-based modelThere is no perfect model, or else there would only be one. But what are the ones of this model used by British Airways? Burnes (2004) mentions the lack of empirical support and also the complexity and ambiguousness of the resources definition. By design, the model is more focusing to the internal resources than on the external competition e.g. there is no link with the product markets, it may be difficult to find VRIN resources. There is also little evidence that many firms have adopted the model.http//sdbplus.wordpress.com/2012/01/02/british-airways-hr-management/Task 2 British Airways merged with Iberia in 2011. Analyse the impact of the merger on strategic HRM at British Airways.This MA briefing note provides an overview of the merger of British Airways and Iberia which led to the formation of a new firm International Airlines Group (IAG)BackgroundBA and Iberia had developed strong links over many yearsBA acquired a 13% stake in Iberia in 1998BA Iberia started co-operation and route-sharing in 2003BA first made a bid for Iberia in 2007Impact of the continued economic downturn led to the resumption of merger talks in 2009The DealThe initial promulgationMerger of British Airways and Iberia announced in November 1999.BA shareholders get 55% of the new company Iberia shareholders get 45%BA and Iberia tocontinuetheir existence as airline brandsNew company called IAG plc , with shares listed on both the London and Madrid stock marketsIAG initially estimated 349 million of annual cost savings by the fifth year after the mergerA quarter of the cost savings to come from IT and back office efficiencies + savings on maintenance and purchasing carrying out cost of the merger estimated at 350 million.The final merger agreementDefinitive (legally binding) merger agreement finally signed in April 2010Merger details took twain years of complex and often strained negotiationCreates Europes third-largest airline group behind Lufthansa (90 million passengers p.a.) and Air France-KLM (70 million passengers p.a.)Combined scale would have an aircraft blow over of 408 planes, carrying more than 58 million passengers a yearWillie Walsh (previously CEO of BA) to become the new CEO of IAGOn the day that the shares of IAG first traded (Jan 2011), the market capitalisation of the firm was 5.6bnKey motives anddriversof the mergerVery much a merger that looks to the lon g-term.Industry consolidation a process that has already begun and is expected to continue over the next 10-20 years2010 combined airline losses (whole industry) of almost $3bn in 2010BA and Iberia seen as well-matched businesses that complement each otherBA strength North American Asian routes and destinations Iberia strength Latin AmericaBA gains better coverage of key routes in Latin AmericaStructure designed to allow IAG to participate in further consolidation (i.e. more takeovers)Further takeovers by IAG would be judged on whether they could meet or enhance a target of 12 per cent return on capital.What happened next?IAG takeover of British Midland International (BMI)Announced November 2011BMI a loss-making subsidiary of Lufthansa (losing approx 160million per year)Deal subject toclearancefrom the Competition bang and the European UnionSignificant opposition fromVirginAtlantic the main competitor affected by the dealMain rationale BMIs extensive landslotsat Heathrow whic h will be used to add British Airways flights to destinations in emerging marketsA possible short-term drawback to IAG the takeover adds to the groups capacity at a time of weak demand for air travelThe main risks facing IAGUnforeseen external events (e.g. disruption to travel caused by volcanic ash)Industrial relations a constant thorn in the side of management at BA IberiaBAs pension fund liability a shortfall of 3.7bnThe global thriftiness demand and profits closely linked to the global economic cycleKey quotes relating to the mergerProf Peter Morrell (Cranfield University)Theyve come up with various cost savings that they can get out of the merger of the companies. These are on things like procurement, IT, maintenance. These are the things they can get from a merger which arent really acquirable from alliances.Ashley Steel, head of transport at KPMGthe creation of IAG heralds the start of an exciting era of airline consolidation, with further marriages of convenience as pre ssures on costs and revenues continue to increase.Willie Walsh on the day the merger was confirmedOur goal is for more airlines-but, importantly, the right airlines-to join the group. Today is the first step towards creating a multinational, multi-brand airline group.http//www.tutor2u.net/blog/index.php/business-studies/comments/6-essential-ma-cases-ba-iberia-merge-to-form-iag, 23/12/2012, 2046 PMImpact of Merger in British AirwaysBritish Airways and Iberias stock stopped trading Friday as the BA-IB merger officially took effect, to be replaced in both the London and Madrid markets by International Airlines Consolidated Group stock on Monday.Based on combined passenger count, IAG is now Europes fourth largest carrier group after Lufthansa Group, Air France KLM Group and Ryanair. Both airlines shareholders approved the merger in late November (ATW Daily News, Nov. 30, 2010). The carriers will continue to be separately branded.The commencement of IAG was clouded Friday by Unite unions notice that BA cabin crew voted overwhelmingly to take further strike actions, the latest fit in the long-running dispute between the airline and its flight attendants (ATW Daily News, Dec. 22, 2010).Surely BA management must now wake up and listen to the interpretive program of their skilled and dedicated employees, Unite stated.This dispute will be resolved by negotiation, not litigation or confrontation, and it is to negotiation that BA management should now apply itself. We are ready. The union said 75% of 10,220 eligible voters cast ballots, with over 78% voting in favor of more work actions.http//atwonline.com/airline-finance-data/ newsworthiness/ba-iberia-merger-formally-takes-effect-ba-flight-attendants-vote-strikes-0