LAL BAHADUR SHASTRI INSTITUTE MANAGEMENT DELHI

POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) PART-TIME TRIMESTER IV & VI END TERM EXAMINATION Paper : HRD STRATEGIES & SYSTEMS Time : 3 hrs Max. Marks : 60

Note :. Q 1- Q 5 carry 10 marks each Attempt any four from Q 1- Q 5. Q 6 is compulsory and carries 20 marks.

Q 1. Before any organization can truly reap the benefits of workplace diversity, it has to tackle several challenges posed by diversity. In the view of this statement explain the concept of workplace diversity and suggest certain strategies to counter the challenges posed by workforce diversity and unleash the diversity advantage. Cite suitable corporate examples to support your answer.

Answer 1 It is indeed true that before the organization could reap the benefits of workplace diversity, it needs to get over with the challenges posed by the same. One of the greatest challenges an organization has when trying to adopt a more inclusive environment is assimilation for any member from outside of the dominant group. A number of scholars have studied the interplay between power, ideology and discursive acts which serve to reinforce the hegemonic structure of organizations. Everything from organizational symbols, rituals, and stories serve to maintain the position of power held by the dominant group. Extending this concept to diversity inclusion where organizations seek to hire or promote individuals that are not part of this dominant group into management positions, a difficult tension develops between the socially constructed organizational norm and acceptance of cultural diversity. Often these individuals are mentored and coached to adopt the necessary traits for inclusion into the privileged group as opposed to being embraced for their

differences. According to the journal article "Cultural Diversity in the Workplace: The State of the Field", Marlene G. Fine explains that "those who assimilate are denied the ability to express their genuine selves in the workplace; they are forced to repress significant parts of their lives within a social context that frames a large part of their daily encounters with other people." Fine goes on to mention that "People who spend significant amounts of energy coping with an alien

environment have less energy left to do their jobs. Assimilation does not just create a situation in which people who are different are likely to fail, it also decreases the productivity of organizations". Another challenge faced by organizations striving to foster a more diverse workforce is the management of a diverse population. Managing diversity is more than simply acknowledging differences in people. A number of organizational theorists have suggested that work-teams which are highly diverse can be difficult to motivate and manage for a variety of reasons. A major challenge is miscommunication within an organization. There are competencies, however, which help to develop effective communication in diverse organizational environments. These skills include self-monitoring, empathy, and strategic decision-making. Self-monitoring refers to a communicator's awareness of how his/her behavior affects another person along with his/her willingness to modify this behavior based on knowledge of its impact. Empathy enables the receiver to go beyond the literal meaning of a message and consider the communicator's feelings, values, assumptions, and needs. Strategic decision-making implies that the communication sources and channels used to reach organization members, as well as the substance of the messages conveyed, are mindfully selected.

THE CHALLENGES OF WORKING THROUGH DIVERSITY In the past, employers often dealt with diversity by minimizing it where they could and by trying to ignore it when they couldn't get rid of it. When the supply of labor was abundant relative to demand, employers could control the diversity in their workforce by using selective hiring practices and by imposing standard operating procedures. From a position of relative power, companies could refuse to hire employees who were unable to work the standard workweek and punish those who were too often absent or tardy, or who just simply didn't fit in. Any negative side effects of such practices, such as lower morale or higher turnover, were treated as justifiable costs paid to ensure a smooth-running organization. But as qualified employees become scarcer, employers must become more flexible. They can no longer say, "This is when and where you must be available for work, and this is the way we will treat you while you are here." Now they must adapt to potential employees who say: "This is when and where the work must be available for me to do it, and this is the way I must be treated if you want me to stay." Flexible policies and practices help employers solve the availability issue created by a tight supply of diverse labor and inevitably bring them face to face with a second challenge, namely, ensuring that all employees and potential employees are treated fairly and feel that they are

treated fairly. Employers who fail to meet this challenge squander their hard-won human resources. During the past quarter century, concerns about fair employment practices were often driven by fear of the repercussions associated with discrimination lawsuits. Whether a company treated employees (and job applicants) fairly was, ultimately, judged by the courts using technical criteria, which were negotiated by attorneys, psychologists, and psychometricians. In this context, fair treatment came to mean equal treatment. Supervisors and managers were admonished to act as if they were blind to differences among employees, especially if those differences might be linked to sex, race, ethnicity, age, or national origin. Ironically, in this context employees stimulated battles over fairness, but once those battles began, employees' evaluations of fairness were not the stakes companies sought to win. The stakes were money, reputation in the community (perhaps), and freedom to continue conducting business as usual. Times are changing, however. Now, regardless of whether employers find themselves fighting legal battles over fair employment practices, they must take employees' perceptions of fair treatment seriously. From the perspectives of employees, issues of fairness are not con strained to sex, cultural background, age, or other legally protected attributes. The third challenge in working through diversity is unleashing and taking full advantage of the latent potential of groups. Groups are powerful motivational tools. When running effectively, work teams can be both more productive and more creative than individuals working alone. But when they function poorly, groups can have disastrous consequences for organizations, because the same social forces that push people to reach their fullest potential can also push people into unproductive and even destructive behavior patterns. It is the potential for positive synergy that attracts employers to group-based organizational structures. For this potential to be realized, relationships among team members must be relatively positive. Conflict can close down

communication channels, waste group energy, and create excessive amounts of turnover. This is not to say that all conflict should be squelched. To the contrary, constructive conflict must be encouraged to stimulate creative problem solving. Too little conflict may be a sign of complacency or stale, routine approaches to addressing new problems. The challenge for employers is to ensure that destructive conflict, which often arises when group members are unable to get along on a personal level, is minimized while ensuring that people with diverse ideas and perspectives are challenged to find resolutions to problems that everyone can endorse. THE ROLE OF HUMAN RESOURCES Tackling these three challenges of workforce diversity is a key responsibility of modern human resources management professionals. They are the ones who are best able to educate business leaders about the strategic importance of working through diversity and to mobilize them to take

immediate actions. And they are the ones with the knowledge and skills needed to analyze what their organizations need to do to respond to simultaneous changes in the nature of competition and the labor market. Finally, human resources professionals have available to them a wide range of tools for changing the attitudes and behaviors of their organizations' employees. These tools include recruiting and selection methods, performance evaluation and appraisal, compensation and reward systems, training and development techniques, and models for redesigning both jobs and the organization within which jobs are performed. To organizations that succeed in meeting these challenges will go the rewards of greater workforce productivity and improved organizational health. At the same time, employees in successful organizations will reap the benefits of employment conditions that are congruent with their individual needs and aspirations.

Q 2. Write short notes on : a. HRs role in building a competitive organization a. In todays business environment, organizations need to be constantly evaluating their internal and external environment for challenges and opportunities to remain competitive and to sustain growth. Political, economic, social, and even psychological changes within our societies create significant impact on organizations. Given any significant change or event, how ready are we as an organization to react in order to remain competitive? Many factors are driving changes in organizations today including the use of technology, globalization, changes in workforce demographics, eliminating the bureaucracies in organizational structures, and balancing work-family issues. Understanding the potential of an organizations resources and optimizing the output of such resources given the changes, provides the impetus for HR being the key source of creating the competitive advantage for the organization. Players, according to Ulrich & Beatty, contribute to the profitability of the organization, they deliver results and they do things to make a difference. The roles of players are to a) coach b) design, c) construct, d) change the organization, e) creating followers, and f) playing by the rules. Another perspective on the role of HRM suggests that in leading-edge companies, HR professionals play four key roles:

a) strategic business partners, b) innovators, c) collaborators, and d) facilitators (Schueler & Jackson, 2000). As a strategic business partner, HR professionals should understand the nature of the business from a strategic, operational, financial, and other aspects necessary to be part of an effective team managing an organization. Functioning as an innovator, HR professionals are challenged to continuously search for strategies that will create value for the organization and not merely function in a reactionary mode. Furthermore, HR professionals will also serve as collaborators with senior leaders and all employees to implement business strategies forming the strategic link throughout the organization. As facilitators, HR professionals function as the change agent providing rationale, support, and readiness for planned changes designed to support the business strategies. Even though there are several classifications or groupings of HR activities, the author uses seven groups of activities seen as being most strategic and influential in realizing the strategic business objectives of the organization. Todays economy dictates that organizations continually assess the external and internal environment and make relevant changes in order to remain competitive. The author examines each of the clusters and provides a description of each, its importance in achieving the business strategy, and how it can be measured to determine its effectiveness. b. Kurt Lewins Three Step Model As Lewin put it, "Motivation for change must be generated before change can occur. One must be helped to re-examine many cherished assumptions about oneself and one's relations to others." This is the unfreezing stage from which change begins. Unfreeze This first stage of change involves preparing the organization to accept that change is necessary, which involves break down the existing status quo before you can build up a new way of operating. Key to this is developing a compelling message

showing why the existing way of doing things cannot continue. This is easiest to frame when you can point to declining sales figures, poor financial results, worrying customer satisfaction surveys, or suchlike: These show that things have to change in a way that everyone can understand. To prepare the organization successfully, you need to start at its core you need to challenge the beliefs, values, attitudes, and behaviors that currently define it. Using the analogy of a building, you must examine and be prepared to change the existing foundations as they might not support add-on storeys; unless this is done, the whole building may risk collapse. This first part of the change process is usually the most difficult and stressful. When you start cutting down the "way things are done", you put everyone and everything off balance. You may evoke strong reactions in people, and that's exactly what needs to done. By forcing the organization to re-examine its core, you effectively create a (controlled) crisis, which in turn can build a strong motivation to seek out a new equilibrium. Without this motivation, you won't get the buy-in and participation necessary to effect any meaningful change. Change After the uncertainty created in the unfreeze stage, the change stage is where people begin to resolve their uncertainty and look for new ways to do things. People start to believe and act in ways that support the new direction. The transition from unfreeze to change does not happen overnight: People take time to embrace the new direction and participate proactively in the change. In order to accept the change and contribute to making the change successful, people need to understand how the changes will benefit them. Not everyone will fall in line just because the change is necessary and will benefit the company. This is a common assumption and pitfall that should be avoided. Time and communication are the two keys to success for the changes to occur. People need time to understand the changes

and they also need to feel highly connected to the organization throughout the transition period. When you are managing change, this can require a great deal of time and effort and hands-on management is usually the best approach. Refreeze When the changes are taking shape and people have embraced the new ways of working, the organization is ready to refreeze. The outward signs of the refreeze are a stable organization chart, consistent job descriptions, and so on. The refreeze stage also needs to help people and the organization internalize or institutionalize the changes. This means making sure that the changes are used all the time; and that they are incorporated into everyday business. With a new sense of stability, employees feel confident and comfortable with the new ways of working. The rationale for creating a new sense of stability in our every changing world is often questioned. Even though change is a constant in many organizations, this refreezing stage is still important. Without it, employees get caught in a transition trap where they aren't sure how things should be done, so nothing ever gets done to full capacity. In the absence of a new frozen state, it is very difficult to tackle the next change initiative effectively. How do you go about convincing people that something needs changing if you haven't allowed the most recent changes to sink in? Change will be perceived as change for change's sake, and the motivation required to implement new changes simply won't be there. As part of the Refreezing process, make sure that you celebrate the success of the change this helps people to find closure, thanks them for enduring a painful time, and helps them believe that future change will be successful.

Q 4. Discuss at length, some of the emerging issues and trends in the global business environment affecting the way HR functionaries are supposed to perform and deliver. In view of these issues and trends what should be HRs role orientation, agenda and vision in the 21st century. Cite suitable corporate examples to support your answer.

Making the shift to a new HR role will raise unique issues for every HR group that attempts it, but there are some common steps and activities that will increase the likelihood of success. Some of these steps and activities are:
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Strong HR leadership. As with any major change effort, a strong leader can develop a clear vision, motivate others to share that vision, and help them work toward achieving it. In order to change the role of HR in an organization, the HR leader will need to work both within the HR group and with the organizational leaders to reshape everyone's expectations of what HR can and will deliver. The success of the change will depend upon HR's ability to meet the real needs of the organization and the credibility it develops.

Acute future orientation. One of the ways that HR can provide value is to understand how changing environmental, organizational, and workforce factors will likely influence the business, anticipate the associated HR needs, and be prepared to deliver appropriate solutions to meet those needs. By maintaining a focus on workplace trends, for instance, HR can prepare to evaluate the impact that particular changes are likely to have on an organization's people and processes, and be prepared to work with the business leaders to decide how to respond-being ahead of the curve, not behind it. For example, one movement that is likely to have significant impact on the way people are hired, managed, and valued is that of intellectual capital. A "new role" HR department is one that has learned about intellectual capital and its implications, evaluated the impact on current practice, and developed ideas and recommendations for changing HR practice and other business processes.

Flexibility and creativity. An HR group that is successful in the future will likely be one that is responsive to the changing needs of its client organization. Responsiveness in the changing world of work will require being flexible-as the organizations change, so will their needs and priorities. In addition, traditional activities and processes may not be sufficient to meet the unique needs of the future-HR leaders will likely rely on creativity of their groups to achieve effective results. Increasing globalization of the market will create a need for both flexibility and creativity as businesses try to succeed in new locations, with a new workforce, and with new customers.

Delivering value. Although this is not a new challenge for HR, it remains a critical one. HR is still perceived by many within today's organizations as simply a non-revenue generating function. It is important to make apparent the value provided by working with the management team to hire the right people, manage them well, pay them appropriately, and build a working environment that encourages success. Beatty and Schneier (1997) extended the concept of delivering value within the organization by arguing that HR must deliver economic value to the customers, as well as to employees.

Here is a sampling of strategies that I have seen implemented as HR groups work to respond to environmental and organizational changes, become more valuable, and deliver results.
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Business unit assignment. Some companies are assigning HR employees to specific business units as a way of enabling them to develop a focused relationship with a small part of the business. This relationship can be enforced when the HR person has a direct reporting relationship with the leader of the business unit. In these situations, the central HR group usually provides information and services to the "distributed" HR representatives, who then deliver the service personally to the business unit. One advantage of this structure is that it fosters the flexibility and creativity mentioned above, as the local HR people can modify and tailor processes and services to meet the needs of their assigned business units.

Centers of excellence. As organizations grow by merger and acquisition, they often find themselves with multiple HR groups. These can be duplicative or complementary. When they are duplicative, they can be subject to (painful) downsizing and consolidation, leaving behind a department that is unable to serve all areas of the business as well as they had been accustomed, which can, in turn, undermine the credibility of HR. An effective response to this issue is to utilize the multiple HR groups differently. One approach that seems to work well is to develop "centers of excellence," where the HR groups in different parts of the company develop their expertise in a particular area and serve the needs of the larger company in that area-HR groups operating within this model can see each other as resources rather than competitors, and the company benefits from high levels of expertise in a number of areas.

Consulting model. A number of HR departments with whom I've worked have adopted a consulting model of providing service. They view their internal customers as clients, learn consulting skills, and take their client satisfaction as a measure of their success. In one large high-technology firm, internal clients whose needs cannot be met by the internal HR group can go to external service providers directly-even for basic HR needs.

Job rotation. One way to bring the perspective of the business into HR-and vice versa-is to rotate line managers into the HR function for periods of time. These individuals often serve as reality checks for the HR group, and then bring an increased understanding of the value of HR back to their line function when the rotation is over. This approach seems to work best when the duration of the assignment is sufficient to allow the rotated individual enough time to become proficient in some area(s) of HR and when he or she is working closely with experienced HR people who can help them learn. Sending HR people into other areas of the business can serve a similar purpose.

Increasing line managers' capabilities. Part of the future HR model is that responsibility for HR activities is shared between line management and HR people. This approach allows the manager to be more fully involved in the development and direction of employees, with HR as a resource; it requires, however, that those managers have the capabilities needed to work through issues with employees successfully. Many companies are therefore increasing line managers' access to information. Many of today's HR information systems and integrated HR systems put tools and data on each manager's desktop.

Q 5. What gets measured gets managed. In view of this statement, explain the significance of measuring HRs contribution to the organizational performance. How do you think can measurability be improved in the functional area of human resources? Suggest some measures for the same. examples to support your answer. Please ensure that you cite suitable corporate

HR professionals are increasingly feeling forced to justify in a systematic way the cost of their activities. They are increasingly looking to HR performance indicators to demonstrate the added value of their work to the success of the organisation. This practical guide demonstrates how, through analysis and linking to organisational strategy and business objectives, together with careful targeting of comparative measures, measurement can help raise the profile of HR within an organisation. Human Resource professionals in many organisations are increasingly feeling forced to justify in a systematic way the costs of their activities. They also have to make comparisons of their performance measures with those of other organisations. But what are HR practitioners

measuring? Our recent experience is that many are still primarily concerned with their own activities. That is, they are only examining the operational efficiency of the HR function itself. What and how to measure The central aim of HR management should be to ensure that these activities support business strategy and lead to committed employee behaviour. Increasingly, in devolved organisations, it is the line managers or non-HR specialists whose practices have the greatest impact on strategy and employee commitment. This implies that examining the effectiveness of management and employee performance across the organisation is just as crucial as examining the HR function itself. This report is a guide for HR practitioners. It provides some ideas and help for those who need to get to grips with measuring the performance of human resources across their organisations. It examines:
   

why measures can be helpful the strategic context of measurement choosing the most appropriate measures the effective use of measures.

Time to rethink your approach? Throughout, this report stresses that one of the biggest problems in HR measurement is the temptation to measure everything and create a multiplicity of performance indicators. As well as being time-consuming, this approach can lead to serious problems not being spotted beneath a mass of data; it also causes information overload or even paralysis. Instead, a focus on key measures, linked to key objectives, is recommended. HR practitioners need a better understanding of the business strategy of organisations in general, and their own in particular. Together with a focus on key measures, this will demonstrate that HR practitioners are aware of what is relevant and of value to the organisation, and is contributing to strategic goals. Determining whats key An example of a company that could be said to primarily adopting a strategy of innovation is a high technology manufacturing company we shall call Techmanco. It believes the way to succeed in its particular niche market is through continuously bringing better products or better applications of existing products, or better after-sales packages to its customers. This means it needs its product development, servicing, marketing and other key staff to be innovative. The theory goes that the type of environment conducive to producing innovative results, is one that harnesses cross-functional teamworking, is tolerant of ambiguity, and encourages risk-taking and creative behaviour. That is what Techmanco is striving to create.

The type of HR policies believed likely to best support such an environment are those which emphasise team, rather than individual, achievements. In this way, performance management and appraisal systems reflect team objectives and outcomes. In order to attract the top talent in their industry to stay with them, Techmanco chooses to pay above the market pay rates. However, it is careful to ensure team members from different disciplines are paid similarly. What does this mean for the HR issues that Techmanco may wish to measure? In this example there are two priority areas. Firstly, it needs to check on the attitude and experience of its staff towards the organisations climate and context to make sure the required behaviours of creativity, for example, have the best chance of thriving. Questions inserted in a regular employee attitude survey can be very helpful here. Secondly, since it believes internal equity in its pay and compensations systems and the development of transferable skills are critical to high performance in innovation, it will want to monitor both equity across teams and breadth of skills. Many ways of spotting key issues at organisation level are demonstrated in this report. More HR function specific examples are also discussed. For instance, when looking at vacancy, recruitment, retention and turnover levels, it would make sense to concentrate on those groups of staff that are particularly important to the organisation, especially if they are also difficult to replace. The quadrant shown here could help with the focussing process; it helps identify groups of staff that are the most critical in terms of retention efforts. The contents of the top right hand box will, of course, vary between organisations. Identifying key people

Q 6. Read the following case study and answer the questions given below (Each question carries 5 marks) : AIR NATIONAL

Air National's (AN) 1998 Annual Report glowed with optimism. Bradley Smith, CEO, stated in his letter to shareholders, 'As a newly privatized company, we face the future with enthusiasm, confident that we can compete in a deregulated industry: By April 2000, however, the tone had changed, with a reported pre-tax loss of $93 million. The newly appointed CEO, Clive Warren, announced a major change in the company's business strategy that would lead to a transformation of business operations and HR practices in Europe's largest airline company.

Background During the early 1980s, civil aviation was a highly regulated market, and competition was managed via close, if not always harmonious, relationships between airlines, their competitors and governments. National flag-carriers dominated the markets, and market shares were determined not by competition but by the skill of their governments in negotiating bilateral 'air service agreements'. These agreements established the volume and distribution of air traffic and thereby revenue. Within these markets, AN dominated other carriers; despite the emergence of new entrants, AN's share of the domestic market in the early 1980s, for example, increased by 60 per cent.

The competition In the middle of the 1980s, AN's external environment was subjected to two sets of significant change. First, in 1986, AN was privatized by Britain's Conservative government. This potentially reduced the political influence of the old corporation and exposed the new company to competitive forces. Preparation for privatization required a painful restructuring and 'downsizing' of assets and the workforce, driven largely by the need to make the company attractive to initially sceptical investors. Privatization also offered significant political leverage, which AN was able to deploy to secure further stability in its key product markets. It was this context, rather than the stimulus of market competition, that gave senior management the degree of stability and security needed to plan and implement new business and HRM strategies. The second set of pressures, potentially more decisive, was generated by prolonged economic recession and the ongoing deregulation of civil aviation in Europe and North America.

With these environmental forces, AN attempted to grow out of the recession by adopting a lowcost competitive strategy and joining the industry-wide price war. Bradley Smith, when he addressed his senior management team, stated, 'this strategy requires us to be aggressive in the marketplace and to be diligent in our pursuit of cost reductions and cost minimization in areas like service, marketing and advertising'. The low-cost competitive strategy failed. Passenger numbers slumped by 7 per cent during the late 1980s, contributing to a pre-tax loss. Following the appointment of the new CEO, AN changed its competitive strategy and began to develop a differentiation business strategy or what is also referred to as an 'added-value' strategy.

In 2002, following the September 11 attacks in New York and Washington in which four commercial planes were hijacked and crashed, killing almost 3000 people, international air travel bookings fell sharply. The catastrophes caused the loss of more than 100,000 airline jobs around the world. In addition, early in 2002, new discount airlines started operating in Europe, and there was a costly battle for market share between AN, HopJet Airlines and Tango Airlines.

Air National's new competitive strategy

Under the guidance of the newly appointed CEO, Clive Warren, AN prioritized high-quality customer service, 're-engineered' the company and launched a discount airline that operated as a separate company. The management structure was reorganized to provide a tighter focus on operational issues beneath corporate level. AN's operations were divided into route groups based on four major markets (Exhibit 2.1). Each group was to be headed by a general manager who was given authority over the development of the business, with a particular emphasis on marketing. The company's advertising began also to emphasize the added-value elements of AN's services. New brand names were developed, and new uniforms were introduced for the cabin crews and point-of-service staff. AN's restructuring also aimed to cut the company's cost base. Aircraft and buildings were sold and persistently unprofitable routes either suspended or abandoned altogether. AN's overall route portfolio was cut by 4 per cent during 2001 alone. Labour costs offered the most significant potential savings, and with 35,000 employees AN's reengineering included one of the biggest redundancy programmes in British history. Once the redundancy programme was underway, the company was able to focus on product development, marketing, customer service and HR development. The company's sharpened focus on the new 'customer-first' programme prompted a major review of the management of employees and their interface with customers.

Air National's human resources strategy

The competitive and HR strategies pursued by AN mainline business in the wake of this restructuring process are congruent with an HR strategy that emphasizes employee empowerment and commitment. As Clive Warren stated in a television interview, 'In an industry like ours, where there are no assembly lines or robots, people are our most important asset and our long term survival depends upon how they work as part of a team'. In the closing part of her presentation, Elizabeth Hoffman, AN's director of human resources, outlined the need for a new approach to managing AN's mainline employees: 'We must

CORPORATE MANAGEMENT

Group 1 North America

Group 2 India

Group 3 Europe

Group 4 Domestic

Exhibit 2.1 Air National's management structure

emphasize to our managers that they must give up control if our employees are to improve their performance' (Exhibit 2.2).

As part of the 'new way of doing things', demarcation between craft groups, such as avionics and mechanical engineers, were removed, and staff were organized into teams of multiskilled operatives led by team leaders. Even those middle managers who supported the new work teams found this approach to managing their subordinates uncomfortable, as one maintenance manager acknowledged: 'The hard part is having to share power. I confess, I like to be able to say yes or no without having to confer all the time and seek consensus from the team.'

AN instituted a series of customer service training seminars and invested in training and development. The senior management also developed a 'strategic partnership' with the unions. At the onset of the restructuring process, Clive Warren and Elizabeth Hoffman undertook to 'open the books' to the unions and established team briefings and regular, formal consultation meetings with union representatives. A profit-related pay system was also launched, with the full support of the unions. In addition, senior management held major training programmes, designed and delivered by leading business school academics, on the importance of trust,

motivation and 'visionary' leadership. Running parallel to these developments was the company's concurrent objective of cost reduction. Between 1996 and 2000, AN shed 37 per cent of its workforce, nearly 25 per cent leaving in 1998. Job cuts were managed entirely through voluntary severance and redeployment. The requirement to sustain and improve performance in the face of such job losses produced, a preoccupation with productivity levels, and attempts to alter shift patterns sometimes provoked conflict. Disputes were resolved quickly, usually by the company reminding employees of AN's commitment to job security, training and development, and through senior management 'throwing money at the problem'.

GoJet competitive and human resources strategy

AN also launched its GoJet product in November 2002 to take advantage of the dramatic shift by European and North American passengers towards discount airlines. GoJet planes have more seats because there is less room between the seats and the business-class section has been removed, which allows the planes to carry an additional 20 passengers.

CORPORATE LEVEL

Differentiation corporate strategy Corporate values recognizing the contribution of Air National employees Effective voice for the human resources at the strategy table

HUMAN RESOURCE LEVEL

Priority given to security of employment Investment in workplace learning Competitive and equitable pay policies

WORKPLACE LEVEL

Broad task design and self managed teams Emphasis on employee empowerment and self accountability Climate of cooperation, commitment and trust

Exhibit 2.2 Key characteristics of Air National's strategic human resource management and empower-developmental approach

GoJet costs will be 20 per cent lower than those of AN's comparable mainline flights partly because GoJet's employees will be paid a lower wage than their counterparts at AN. Clive Warren has, however, said that wages will be competitive with GoJet's competitors in the discount market, Reviewing the developments, Clive Warren considered that AN had been 'transformed by reengineering'. Deep in debt in the late 1980s, AN went into profit in the first quarter of 1998 and then suffered a loss in the last quarter of 2001 and the first quarter of 2002. The company's aircraft were flying to 164 destinations in 75 countries from 16 UK airports. 'If we are to maintain our market share in domestic and international passenger traffic we have to have a business plan that recognizes the realities of airline travel in the 21st century', said Warren.

Questions You are an HR consultant employed by a rival national airline to investigate AN's competitive and HR strategy. Prepare a written report on the following questions: 1. What factors enabled AN's senior management to take a strategic approach to its business and to adopt an empowering-developmental approach to HRM? The following factors could be considered for taking a strategic approach to its business: a) Capitalizing on Human Resource b) As in this Industry, the only resource available to boost the organization is the Humans, prime importance to this aspect needs to be paid. c) When the abovesaid organization was moving to a new sector, which was earlier unexplored by them, they needed immense support from the Organization and considering the organizational cultures may fall apart in these crucial circumstances, they wanted this fabric to last.

2. How can you understand the linkage between AN's competitive and HR strategies? Since AN was expanding at a rapid pace as per the Competitive strategy laid by its core team, it had to develop various Human Resource related implications with regard to the working manpower as well as the Organizational Hierarchy prevalent then. It had to base itself at four different places under the leadership of 4 GMs whose work was independent of each other. It gave a higher degree of autonomy to its employees to work in the direction of taking the Organization to newer heights.

3. What problems, if any, do you envisage with AN's HR strategy and GoJet's HR strategy? A higher concentration on volumes and negligence at the hands of quality can be seen as a potential error with their HR strategy of Air National. Also, a higher investment in the workforce is as bad an option as good it may seem. A higher degree of trust entrusted in the employees may make them change their preferences which may not be in the benefit of the Organization. Also, in todays competitive world Security of employment is an aspect that can be easily promised but hard to deliver. 4. What suggestions would you give to the airline (for which you are working as a consultant) to counter Air National and GO Jets strategy? Following aspects could be of help: a) Follow Competitive pay policy b) Since, AN/GO is working on low price and secure employment policy, a competitive price in the market would generate price wars and hamper the growth of the two. c) Employees seek growth in any Industry or any Employment. Setting up of various workplace learning would be of immense help. d) To counter any competitor in the market better than you, you need to deliver the best for both the end users and the Employees.