Safety and Customer Service:Contemporary Practices in Diversity, Organizational Development and Training and Development in the Global Civil Aviation Industry
by Dr. Steven H. Appelbaum and Brenda M. Fewster
Biographical Notes
Dr. Steven H. Appelbaum holds the Concordia University Research Chair in Organizational Development and is Professor of Management at the John Molson School of Business,
Concordia University, 1455 de Maisonneuve Blvd., West, Bureau GM 503-9, Montreal, Quebec,
Canada H3G 1M8.
Brenda M. Fewster is Interlibrary Resource and Research Specialist, Webster Library,
Concordia University, Montreal, Quebec, Canada H3G 1M8.
Abstract
The commercial aviation industry is an extremely competitive, safetysensitive high technology service industry. Socio-technical systems, employees and customers must be the arenas of an organization’s core competencies. The implications are vast and pervasive affecting no less than the organization’s structure, strategy, culture and numerous operational activities. In this article, select findings of a human resource management (HRM) audit are compared to the findings of a review of the literature on diversity, organization development (culture) and training and development. The audit, conducted by 13 executives from their respective organizations, contains extensive data on airlines from nine countries from around the globe. In this article we seek to extend the discussion of excellence in safety and customer service to applied systemic organizational HRM issues and critical success factors. Human resource management (HRM) expertise is required now, more than ever, to spearhead internal marketing strategies in order to gain employee commitment in order to foster excellence in safety and customer service.
Introduction
Strategy in the aviation industry is premised upon two fundamental drivers that have been evolving since deregulation of the US airline industry in 1978: one, a growing global concern for safety; and two, ever increasing consumer expectations of broad service choice and service excellence. Sub-optimization, or poor quality in regards to management, decisionmaking, teamwork, training and development, communication or organization culture can translate into loss of employee commitment, loss of customers, loss of market share, loss of organization assets, and above all, loss of life. Researchers are increasingly turning from investigating “sharp end” factors to studying systemic processes.
The purpose of this article is to examine the role of the human resource department in aligning staffing imperatives, employee skill sets and organizational culture with the vision, mission and values of the organization. Managers, flight crew, contact personnel and back office employees are all considered in this article for the roles they play in regards to safety and customer service. With an abundance of available research on individual and small group performance readily available, it is time to extend the discussion of safety and customer service excellence to applied human resource management as a proactive strategic support function.
Methodology
The original purpose of the review of the literature was to find other empirical studies of the civil aviation industry regarding HRM practices from an applied perspective with which to compare and contrast the results of the audit presented later in this article. None were found. This is consistent with the findings of other researchers. Thomas (1997) comments on the scarcity of research in the area of airline management. “In reviewing the literature on international aviation, it is clear that researchers tend to analyze the industry at amacro-level. Although it has gained much attention recently . . . the topic of international commercial airline management suffers from a lack of theoretical and empirical work, and the scarcity of literature from a microeconomic perspective.” According to Eaton (2001), research is particularly difficult because “Airline managers are even more secretive and defensive about academic research than those in other industries” (Eaton, 2001, p. Ix).
As empirical studies of HRM practices in the civil aviation industry were not evident, the review of literature became a study of popular themes and contemporary problems in the industry. In order to keep the research current, only applied and empirical publications as of 1995 onward were considered. The research strategy was database driven drawing upon various business, management, journalistic, academic, and technological databases. A broad range of sources were consulted with a view to aggregating the fragmented material existing in an attempt to construct a snapshot image of key HRM themes found in, and regarding, the civil aviation industry. A series of select findings concerning diversity, organizational development and training and development from an HRM audit carried out in 2001 is presented. The audit data was gathered by 13students/aviation managers representing nine airlines in the Global Aviation Master’s of Business Administration (GAMBA) program at the John Molson School of Business, Concordia University, Montreal, Quebec, Canada.
Safety
Unlike the marketing approach to diversity that embraces diversity as a service and marketing strategy, the human factors approach views diversity as a variance in national, linguistic, and professional (particularly pilots and their interaction with air traffic controllers, flight attendants, and maintenance technicians) cultures that may impact adversely on communications and safety (Lima, 2000). The differences in language, nationalities and professional cultures pose well –documented challenges to operational personnel.
Another challenge faces the aviation industry. Unhealthy organizations may also pose a threat to aviation personnel, to travelers and to the general public. For at least a decade now, ICAO has championed the practice of investigating major catastrophes from a human factors organizational perspective. ICAO’s 1993 HumanDigest circular titled, Human Factors, Management and Organization, is rich in accounts of accidents in which the complex and sometimes apparently banal, but deadly, consequences of organizational deficiencies are cogently highlighted. The mechanisms of individual human error are by now well understood, and defences to cope with their damaging consequences are in place say authors Maurino, Reason, Johnston and Lee (1995) in their book, Beyond Aviation Human Factors. The need now is to turn our attentions to management and organizational processes.
Schisms between national (country of origin), linguistic (different languages in an industry dominated by American English), and professional subcultures (notably air traffic controllers, maintenance technicians, cabin crew, pilots, and managers) may also give rise to serious communication problems. Research in the variance between cultures in regards to power distance (i.e. how superiors and subordinates relate in the cockpit), collectivism (i.e. teamwork oriented, elaborate and non direct communications), and individualism (i.e. less attuned to teamwork, communications are straightforward and unemotional) and uncertainty avoidance (i.e. the need for rule-governed behavior and clearly defined procedures (Lima, 2000), are cause for concern because of the inherently global nature of the airline industry.
In his pioneering research on crew resource management (CRM), psychologist, Robert Helmreich (1996), collected data from more than 13,000 pilots at 25 airlines in 16 countries. The survey results revealed “strong cross-cultural differences in command interactions and tolerance for rules, routines and set procedures (Lima, 2000). In an attitude survey distributed to pilots from the USA, the Philipines and Taiwan, along with flight attendants from the USA, Hong Kong, Japan, Korea, Thailand, Singapore and Taiwan, respondents were asked about group processes on the flight deck. The eight Asian groups exhibited high power distance and collectivism (Orlady and Orlady, 1999), American flight attendants exhibited individualism and moderate power distance, and the US pilots rated as individualist and low power distance (Helmreich and Merritt, cited in Eaton, 2001). Professional sub-cultures such as those that exist between pilots and flight attendants have been shown to suffer from a “power distance” syndrome aswell. Due to this hierarchy of subcultures, attendants, and even co-pilots, may feel uncomfortable about approaching the pilot with questions or observations. The problem is that such submissive comes at the expense of constructive criticism and subsequent failure to make important safety related decisions and corrections (Lie, 1998). Cultural differences, however, can be overcome through training and development “if the premises are defined in away that reflects rather than challenges the culture’s values.” (Helmreich et al, 2001)
Management/Organizational Deficiencies
Seventy percent of accidents and incidents are caused by crew errors. This number rises to above 90% if human error at the organization level is included (Amalberti et al., 1998). Management often takes a hit in accident investigations for being a significant contributing factor to accidents arising from a chain of human error activities. In addition to management’s deficiencies, the literature focuses on organization structure as well as the failure of communication that occurs between the different cultures and subcultures within the aviation and airline industry. The impact on safety as a result of deregulation, in 1978, and the ensuing changes to the airline industry—such as increased privatization; liberalization; competition; and, the scramble to cooperate and form alliances, mergers, and acquisitions— all exert pressure on aviation’s defenses against system failures.
The decision processes that led to the Space Shuttle Challenger disaster dramatically exemplifies one particular dimension of the dual issues of managerial control and failed communications. In his article titled, “Why Does the Pilot Sit at the Front?”, author David Weir warns against “rigid barriers which inhibit communication” in complex socio-technical systems.
Most managerial systems operate in a degraded mode … so that minor failures are in fact quite frequent within complex systems… It is now well understood that socio-technical systems with especially rigid barriers which inhibit communication are inherently vulnerable to certain types of failure. The Challenger explosion, the sequence of events leading up to it and the existence of failures of comprehension between the engineers and managers responsible for making the final decisions about whether to fly or not to fly is an example of this (Weir, 1996).
James Reason situates management in the cockpit of responsibility for organization safety management and culture. “The famous ‘Swiss cheese’ model postulated by James Reason indicates that the organizational environment in which personnel work is determined by management decisions and processes that also determine the extent to which the work context fosters or deters errors and violations.” (Pariès,1999) Within the organization, both management and the organizational processes in place act either directly or indirectly on environmental factors and the operators themselves in a manner that may eventually penetrate gaps in the intended safeguards against system failures.
Westrum, writing on human factors in an ICAO article, likens the management of aviation organizations to the directors of theatre productions.“The decision makers – remote in time, space or organization linkages– set the stage. These decision makers put the actors in place and choose the props they will use for their performance.” (Westrum, 1996) These decision makers, in turn, shape the organization climate, values and norms in which flight personnel work. “These values and normas are communicated by the choices it makes,—the choice of people, the choice of organizational goals, the willingness to invest in training, etc. These highly visible choices communicate what is expected and valued, and what actions or accomplishments are likely to be rewarded.” (Westrum, 1996)
Westrum (1996) focuses upon the buildup of latent organization pathogens—unseen, unsafe conditions—that tend to build up before an accident. Pathological climates are typified by denial responses to those who report safety concerns. The more typical climate is the bureaucratic organization wherein the problem is explained away or a “quick fix” is applied. In generative climates, information is actively sought, responsibility is shared and failures lead to inquiries. An outstanding case in point was the investigation conducted after the Dryden, Ontario accident of 1989. Twenty-four people died as a result of a crash and accompanying fire after take-off from municipal airport in Dryden, Ontario, Canada. The immediate cause of the crash was the pilot’s decision to take-off with ice and snow contaminating the wings. Thanks to Canadian Chief Justice Virgil P. Moshansky’s insistence on examining the background of the accident, the pilots and dispatchers were revealed to be only the final links in a vast chain of unsafe activities (Westrum,1996).
In a landmark accident investigation carried out by Australia’s Bureau of Air Safety Investigation (BASI) of a fatal Monarch Airlines crash, numerous latent organization deficiencies were uncovered that revealed an environment where failures developed and were left uncorrected. On 11 June, 1993, all seven occupants of Monarch Airlines Flight OB301 died due to impact forces and a post-crash fire after the aircraft struck trees at a height of 275 feet above aerodrome at Young, New South Wales, Australia. The ensuing investigation led to the following discoveries in management, structural, communications, and training and development deficiencies:
1. management prioritized revenue operations ahead of safety;
2. inadequate resources were allocated to safety (eg. there were large gaps in the operations manual) because of the airline’s financial difficulties (eg. the airline was consistently slow in paying its accounts);
3. structural deficiencies had an adverse impact on management (management had undergone significant changes in the month prior to the accident);
4. the airline’s poor financial situation impacted adversely on planning and operational procedures;
5. communication was ineffective, particularly regarding safety;
6. there was poor control over flight operations safety (the pilot had never been route checked into Young, as required by Civil Aviation Regulations) and maintenance management (history of
high turnover in staff); and,
7. the flight crew was inadequately trained (Goeters, 1998).
In a Ph.D dissertation, Reese examined the role of ethics in decisionmaking amongst managers in the aviation industry. Reese posited that the issues leading to error invariably have an ethical component. Unlike most professional disciplines that tend to be recognized for a set of guiding principles, the aviation and aerospace industries do not have a Code of Ethics that would provide a set of principles and a model for ethics and decision-making. The gap between Reese’s research hypothesis and findings is disconcerting. In the hypothesis, Reese postulated that managers and supervisorsin aviation and aerospace positions would score higher on tests in moral reasoning ability than managers and supervisors in other industries and disciplines (Reese, 2000). The findings, in fact, showed aviation managers scored less than physicians, Navy enlisted men, and the general population (Reese, 2000).
Customer Service
According to an October 2002 Time article, the entire airline industry would be “stuck on the tarmac” by Thanksgiving if it did not rapidly adopt the new business model established by such enterprising discount carriers as Southwest and JetBlue (Eisenberg, 2002). The industry must now focus on leisure travelers and the growing ranks of cost-conscious “penny-pinching” business travelers. Full-service airline providers who have made their money by offering “frequent departures, quick connections, spacious seats and other amenities” must give way to such industry problems as “high fixed costs, a convoluted fare structure, a boom in online bargain hunting by consumers and the growing disaffection of business travelers and their bosses.” (Eisenberg, 2002) Discount fares, however do not, in themselves, fully account for the success of high performing discount carriers. Superior service quality, driven by excellence in employee performance and human resource management (HRM), is arguably what keeps these discount carriers flying high.
Recovering and Learning from Service Failure
In a service business such as an airline, people buy an experience. (Lovelock &Wright, 2002) In this context, customer satisfaction as well as customer information and feedback, become critical. The US airline industry appears to be in trouble on these fronts. In a study by the Better Business Bureau, data indicates that consumer complaints “more than doubled between 1995 and 1999.”(Lovelock & Wright, 2002). According to the American Customer Satisfaction Index (ACSI), compared to four other industries (banks, stores, hotels, phone companies) between 1995 and 2000, airlines showed the “sharpest deterioration in customer satisfaction.” (Lovelock &Wright, 2002).
Research indicates that the majority of customers are disappointed with the way companies handle their complaints and have even more negative feelings about the organization in question after having gone through the service recovery process (Tax and Brown, 1998). The best way to manage service challenges, says Sir Colin Marshall, the Chairman of British Airways, is by “creating an organization that excels in listening to its most valuable customers…. In several key places in our organization, we have created customer advocates: in our brand-management organization, in our marketplace performance unit, … and in our customer relations department.”
Many customers become even more satisfied with an organization if a service failure is followed up by a remarkable recovery (Tax and Brown, 1998). Marshall says customer relations at British Airways have been “transformed from a defensive complaint department into a department of customer champions whose mission is to retain customers” (Prokesch, 1995). This was not the case when Marshall joined BA in 1991. At that time, it took the customer relations department 12 weeks or more, on average, to respond to customer correspondence. On any given day, up to 60% of customer calls were lost. The costs of compensating customers’ grievances were rising and profits were dropping as BA lost more and more of its repeat customers (Weiser,1996). BA gained some important insights upon carrying out research into why customers defected. Fifty percent of those who did not contact the airline with their complaints defected to other airlines; however, a startling 87% of those who did contact the airline chose to remain loyal to BA. Research by BA also showed that if a customer who had not been contacted within five days of their complaint, between 40% to 50% would defect (Weiser,1996). The conclusion was that BA could turn around “willing communicators” who had received poor service (Weiser,1996). As a result of these findings, BA has adopted a policy of apologizing for poor service and owning the problem. The goal now is to respond to customers the same day and, if that is not possible, within 72 hours of a complaint.
Customer Satisfaction and the Role of Internal Marketing
A conceptual tool that can help an organization to plan according to customer perceived value is to liken service delivery to a theatrical event. The customer’s experience of the service “consists of a series of events that customers experience as a performance” (Lovelock &Wright, 2002). This experience is most visibly effected by an organization’s contact personnel (actors) but can be equally effected by back office staff (back stage) as well. In response to the need to optimize work performance by contact and backoffice staff, service organizations are slowly adopting the philosophy of internal marketing. Broadly speaking, internal marketing may be understood to mean two interrelated concepts: one, that “even employees and departments not having direct contact with external customers are still suppliers of something which adds value for internal customers, and thus indirectly for external customers as well”; and two, internal marketing can be viewed as the use of “traditional marketing techniques as communications devices to involve and motivate employees and gain their commitment to the corporate purpose” (Holloway, 1998). According to the profit-chain concept, “profit results from customer loyalty, which results from customer satisfaction with the service system; customer satisfaction (value) is generated by satisfied, loyal, and productive employees.” (Tax and Brown, 1998)
Normann, describes the link between internal and external marketing as “intimate”. The link is the inextricable combination of motivation, productivity, professionalism and the ethics of employees. The themes now appearing on service organizations’ internal discussions are that of “the role of the customer, new internal role models, new dimensions of quality and new quality standards…”(Normann, 2000). Examples cited by Normann (2000) of the most common means used for internal marketing are, “internal schools and ‘universities’, special advertisements, internal publications, massive programs involving major conferences at which top managers appear either in person or on video or both, and the manifest day-to-day priorities of senior managers.”
Improved service delivery, not price wars, may be the ticket out of the airline industry’s competitive quagmire. Recovering and learning from service failure is a crucial component of strategic customer service planning particularly in companies where customers are more closely associated with the service providers than the organization itself. In the review of the literature
that follows, various high performing airlines and aviation organizations are highlighted for their implementation of internal marketing and servant leadership strategies as leaders of effective HRM strategies.
Concluding Remarks
Safety management is informed by an organization’s overall culture, ethics, values and vision. Those practices that engender safety—sufficient staffing, appropriate skill sets; clear communications; effective teamwork; sense of community, clear mission, vision, procedures and policies; strong leadership, and sufficient resource allocation—also foster employee commitment, overall organizational efficiency, safety and customer satisfaction. Senior administrators must champion these objectives and provide their HR departments with the resources needed to operationalize the company’s vision and mission and must also be responsive to the insights and recommendations of their HR personnel.
In the following sections, a review of the literature and presentation of select audit findings are presented in the HRM areas of diversity, organization development and training and development. A key HRM theme spanning these functional areas are the concepts of data capture and information flow. The nature of information flow can be an extremely useful indicator of the way in which an organization receives and responds to employee and customer information. This information can be obtained in a number of varied forms including corporate audits, employee opinion surveys, focus groups and customer feedback.
References throughout the literature were made to the lack of respect and outright sexual harassment experienced by women working in the airline industry. According to the International Society of Women Pilots, after carrying out a survey of 134 of its members, “Of the significant incidents reported, 55 per cent (37 incidents) were categorized as gender discrimination and 45 per cent as sexually oriented harassment.” (Wentworth, cited in Eaton, 2001). Hendersen outlines the growth of both women (International Society of Women Airline Pilots) and black airline pilots (Organization of Black Airline Pilots, OBAP) associations challenging the old status quo. “About 30 years ago, the U.S. airline industry was an almost 100% white male bastion” (Hendersen, 1995). Little information can be found on the presence of women and minorities in the American transport industry, but airlines are learning how to successfully court and embrace diversity.
It is interesting to note that according to the 2000 Employee Attitude Survey results, employees did not feel the FAA was fully committed to improving personnel relations, even though management at FAA believed its reforms were on track (FAA Survey, 2001).
A lack of respect can also be communicated in an airline’s attempt to create a certain image or marketing gimmick. In 1994, JAL made female flight attendants “dress up as Minnie Mouse, with mouse ears, headbands with red polka dot bows and aprons decorated with Disney characters.”
(Eaton, 2001) Male flight attendants were not required to dress up as Mickey Mouse. Eaton (2001) asserts that for a woman to secure employment in the aviation industry, she “must achieve and maintain a particular state of embodiment, prescribed primarily according to an instrumentally imposed concept of a feminine aesthetic and practiced largely according to constraint, containment and concealment. Eaton cites the image of the Singapore Girl.
The selection procedure of SIA exemplifies the effect of such market-oriented strategies [i.e. glamorized cabin hostess connoting in-flight pleasure and a lyrical quality], as human resource management. The girls must be between 18 and 25 years of age, fluent in English, slim and attractive with a clear complexion, taller than 1.58 metres, with a pleasant personality and a smile. Although no one would admit it, the training was implicitly sexual: the Singapore Girl’s brief was to be irresistible to Western and Japanese men. (Eaton, 2001)
Discrimination and harassment based on gender and colour is one dominant theme in the discussion on diversity. Another theme found in lay and practioner aviation industry sources is the use of diversity as a marketing strategy used in recruiting, hiring, training and retaining employees. Executives in a number of successful airlines have come to embrace the concept of strategic human resource management and the opportunity imperatives presented by the diverse and global nature of the aviation industry.
Strategizing Diversity
A number of proactive airline executives are realizing the benefits of respecting the diversity of domestic and international populations and are strategically matching population demographics to their human resource management practices. At Continental Airlines, “Airline executives say one reason the company has posted several years of profits and double digit growth is its aggressive attitude in hiring, training and retaining minority employees. About 23% of its managers and 37% of its employees are minorities” (Fitzgerald, 2001). Headquartered in Houston, Texas, Continental is situated in a “laboratory of diversity,” where 39% of people aged 18 to 30 years are Hispanic, 29% are white, 22% are African-American and 8% are Asian. In its move to embrace diversity, Continental became “the first official airline of the U.S. Hispanic Chamber of Commerce [to form] alliances with the Organization of Black Airline Pilots, the Black Flight Attendants of America, the National Black MBA Association, and the Hispanic MBA Association to recruit minorities at all levels of the company” (Fitzgerald, 2001). Continental’s hiring and organization’s policies are paying off, leading to Continental having been ranked number 18 on Fortune’s 2001 list of “100 Best Companies to Work For” (Fitzgerald, 2001).
Delta Airlines has taken a number of industry-leading initiatives to promote the development of women and black pilots in an industry where only 5% of all pilots are women and less than 1% are people of colour (“Managing aMulticultural”). In June 2001, students began benefiting from Delta’s commitment to spend $1.6 million in pilot training scholarships in a joint programme with Western Michigan University and the Organization of Black Airline Pilots. Delta has also targeted selected high schools around the US where it provides financial assistance, internships, job shadowing, and facilities tours. Employees provide program support by serving as mentors in the classrooms and sharing real-life experiences with the D-TCA [Delta Techncial Career Academy] students. And, in a collaborative effort with OBAP, 30 boys and girls were brought to Ace Camp to gain first-hand knowledge of what it takes to be successful in the field of aviation (Managing a Multicultural,2001).
At Southwest and America West, where both organizations have claimed that more than 50% of their employees were female, both companies have clear equal employment directives. Southwest Airlines also seeks to mirror population statistics in its hiring and also tries to give women and minorities a “leg up” by interviewing them ahead of other candidates (Hendersen, 1995). At America West, a corporate statement of commitment regarding equal employment opportunity and affirmative action is maintained and updated annually in addition to a separate “nondiscrimination in employment policy that specifically touches upon harassment, including race, color, religion, national origin, age disability, veteran status, sex and in particular, sexual harassment” (Hendersen,1995). United has also taken a stand and has declared its commitment to “providing opportunity for career advancement to women and minorities…[setting] aggressive affirmativeaction goals and strongly [promoting] equal opportunity for all employees in the areas of recruitment, hiring and promotion…” (Hendersen,1995).
Organizational Development: A Review of the Literature
In an intensely competitive marketplace where service innovations are so easily replicated, a key strategic variable that nobody can copy is an airline’s culture. (Holloway, 1998)
A cluster of human resources practices and themes emerge from the literature that links organizational performance to strategic human resource management. Human resource functions frequently cited were recruitment, training and development, and the motivation and retention of employees. Frequently recurring themes included organization structure, management, change, communications and employee and labour relations. These, in turn, were discussed in regards to the presence or absence of trust, shared values, respect, sense of community and employee commitment.
Organization Structure, Communications, Leadership Style and Change
An organization’s structure speaks volumes about the nature of its leadership and the state of communications. Scandinavian Airline Systems (SAS) believe that organizational hierarchies create environments where those higher up legitimate their roles only “by issuing instructions, setting controls and carefully monitoring behavior” (Eaton, 2001). The opportunity costs of seeking control rather than commitment can be high. A rigid command and control style of leadership can discourage employee motivation and ultimately translate into sub-optimal performance and lower customer satisfaction. In rigid hierarchies management tends to quash employee feedback, creativity and motivation thereby losing important information and insights possessed by employees. The movement towards the flattening of organizations is indicative of a shift in human resource management from seeking control over, to gaining commitment from, employees. This is the foundation of organizational development.
Communications need to encapsulate what an airline is doing in its markets, what value it is adding, and why it would be missed were it not in business. There is little empirical evidence that this sort of communication is yet widespread in the industry. (Holloway, 1998) This particular vision of human resource management is that of “a set of processes, which—through the recruitment, training, motivation, appraisal, reward, and development of individuals, and through the effective handling of industrial relations— translates strategy into action,” (Holloway, 1998). Such a definition welds notions of strategic human resource management to how an organization selects, interacts with, evaluates, enriches, and compensates employees and how, in turn, employees provide service to the organization’s customers. Or, to paraphrase Seal and Kleiner (1999), it is the management style of the CEO, good communications, good labor-management relations, respectful treatment of employees, incentive programmes, and hiring right that are the keys to a healthy organization.
Another problematic theme in the airline industry is that of mergers and acquisitions. Airline executives are lamentably notorious for not paying due diligence to HR factors in the planning process. The result is that few mergers and acquisitions in global aviation actually work. In fact, two thirds of mergers and acquisitions either destroy, or fail to create, shareholder value. The most oft cited reason is the failure of the merging organizations to pay enough attention to people factors in their due diligence and the subsequent failure to integrate organization cultures (O’Toole, 2000). Examples of failed consolidations are legion. Delta’s absorption of Pan Am’s Atlantic Division, US Air’s difficulties with Piedmont, and Northwest’s problems with Republic are striking as they represent takeovers of airlines within the same country (Holloway, 1998). Other examples include the Canadian Airlinestakeover by Air Can (having failed for a decade after having absorbedCPAir and numerous regional airlines) and American Airlines’ takeover of Reno Air. KLM and Alitalia were clearly incompatible. Likewise, Boeing 737 operators-Piedmont and Can’s Pacific Western had both operated as profitable companies until consolidating—after which they struggled to survive (O’Toole, 2000).
Surveys, Audits, Focus Groups and Customer Feedback: Measuring What Matters
Successful well-run organizations are often cited in the literature for payingongoing attention to the opinions of line staff. When performed sincerely and professionally, such efforts can help redefine an organization’s culture and translate into lower costs of labor, improved productivity, and an increased sense of empowerment on the part of employees. The use of surveys and audits is gaining in currency because they can alert the organization to the gap between espoused values and the day-to-day reality of the organization’s employees. In most cases, there is a substantial gap between the rhetoric and the reality. (Waddock and Smith,2000). The researchers propose the use of responsibility audits to assess a company’s “overall performance against its core values, ethics policy, internal operating practices, management systems, and most importantly, the expectations of key stakeholders— owners, employees, suppliers, customers, and local communities” (Waddock and Smith, 2000). Based on their research they suggest auditing a company in four functional areas: human resources, environmental practices, quality systems and community relations. Each time a company in their beta test, “adopted proactive, responsible practices,” the company “reaped measurable improvements in efficiency and productivity, lowered legal exposure and risks to the company reputation and reduced direct and overhead costs.” (Waddock and Smith, 2000)
The case of Duncan Aviation offers an excellent example of a company that sought and acted upon employee feedback. Duncan Aviation is a leader in US aviation service and maintenance and has received #1 ratings for the last 25 years in Professional Pilot magazine’s annual survey for avionics and maintenance (Falter, 2000). At Duncan, management took employee opinions seriously when the results of a survey given to Duncan’s employees provided important and revealing feedback to the human resource specialist who conducted the research. The survey clearly indicated “low morale and low job satisfaction … across the company. Employees noted lack of communication, lack of respect, pay discrepancies, and distrust of management as areas of concern.” (Falter, 2000). The results of the study were effectively used by Duncan management to launch three HR initiatives as part of the company’s reorganization. One, the company created a “viable company-wide pay schedule based on accurate job descriptions” (after having the employees complete a job analysis questionnaire). Two, the vice-president in charge of implementing the structural changes was asked to resign when he failed to “create strong teamwork at the senior management level” (individuals were found to be scared and mistrustful of the vice-president). And three, formalized on-going employee-training programmes were implemented that improved skill levels and communication across the organization and ameliorated the employees’ sense of empowerment (Falter, 2000).
Southwest Airlines also closely monitors the perceptions of its employees and those of the unions. The attitude at Southwest is “if we’re not getting feedback, we won’t know what’s going on” (Ellis, 2001). SWA “constantly surveys its employees and unions to identify their perceptions and solicit ideas about how to run the company” (Milliman, 1999). As part of SWA’s internal marketing strategy, employee focus groups are used to generate new ideas and unions are encouraged to research problems and present solutions to SWAmanagement (Czaplewski et al, 2001). Southwest Airlines is particularly noted for the spiritual/family-like, employeecentered values espoused and practiced by management teams. According to Milliman (1999), Southwest’s strong set of values is a manifestation of spirituality. These spiritual values include the following: one, a strong emphasis on community, teamwork, and serving others; two, employees feel like they are part of a cause (i.e. an airline that offers the lowest airfares, frequent flights, and personable service); and three, employees feel they are empowered and can really make a change in their customers’ lives and at work (Milliman, 1999). Treating employees well and empowering them, is derived straight from the airline’s mission statement. “Above all, employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest customer.”
Southwest also combines learning and customer feedback in an extremely effective way. Southwest maintains some 45 employees, in two departments, to respond to the 1,000 letters received weekly from customers. Approximately 1,500 hours per week are spent personalizing answers to each customer’s letter (Bunz and Maes, 1998). Such a policy provides an effective management awareness, employee monitoring, and customer feedback mechanism all in one. With such a learning mechanism in place, Southwest can correct problems, adapt to change, and develop new services rapidly. In a competitive industry this provides a definite advantage.
Training and Development: A Review of the Literature
One of the most striking features in the literature is the contrast between the unreserved recognition of the importance of training and development and the stark reality of the impoverished state of training and development in the airline industry. Eaton (2001), suggests that the “stance taken by management on training and development is a useful yardstick for judging the qual- ity of human resource management in a company.” “The airline industry,” says Holloway, “annually spends tens of billions of dollars to acquire technology and training professionals to use that technology,” yet spends all too little on “training staff how to compete and how to both generate and retain a loyal base of satisfied consumers.” (Holloway, 1998). In this section, training and development is examined as a powerful organization development tool that develops employees’ skill sets and socializes employees into the organization’s culture, mission, vision, values and expectations.
Money Well Spent
According to the American Society for Training and Development (ASTD), seven out of the 2,500 organizations in its database stand out for their commitment to training. Southwest Airlines is one of these seven. (The other six are Dow Chemical Company, Edward Jones, Great Plains, Lens
Crafters Inc., Sears, Roebuck &Co., and South African Breweries.) The training policies that make these seven companies so outstanding are that they:
• train more employees and provide more hours of training;
• spend less per employee, but more as a percentage of payroll on training;
• spend a higher percent of their training budgets on technology;
• use more outside training providers;
• spend less on outside training providers; and,
• engage more often in human performance practices, such as compensation, work training, and
human performance management practices. (“Your Training”, 2000)
• flight attendants attend the Customer-Care Training Program; and, pilots and other employees
are kept trained in the most current performance standards (Bunz and Maes, 1998).
The inherently culturally diverse nature of the aviation industry stands much to gain from training and development in the areas of inter-group conflict and effective teamwork. Cultural rifts within airlines are inherent to the global and multi-faceted nature of the industry. Different groups in an organization may act as different tribes resulting in “intertribal” conflict. “When the beliefs or behaviors of one group are not congruent with the thoughts or actions of a different group… inter-group hostility, rather than teamwork is usually the outcome.” (Karlins et al, 1997,) Singapore
Airlines countered this problem with its OASIS (Operational Areas Seminar in Synergy) programme. In a three-day long seminar, Singapore brought pilots, cabin crew supervisors, ground engineers and station managers/traffic personnel together to “reduce intergroup conflict and enhance intergroup cooperation and effectiveness between operational areas.” (Karlins et al, 1997). This is what organizational development is intended to accomplish.
Training is used at Southwest Airlines as both a skill enhancement tool and as a means of socializing employees into Southwest’s culture. Socialization into Southwest’s culture begins with the new employees’ training at the University of People—Southwest’s in-house training center—where 25,000 people a year receive training (Bunz and Maes, 1998). In addition to new employees receiving training, managers and executives undergo a two-day training session in Dallas in the Frontline Leadership program. First-time supervisors attend The Leading with Integrity Program; flight attendants attend the Customer-Care Training Program; and, pilots and other employees are kept trained in the most current performance standards (Bunz and Maes, 1998).
Singapore Airlines, renowned in the industry for its customer service, also invests heavily in training. Fifteen percent of payroll goes to employee training compared to only 1.5 percent spent by U.S. airlines. Flight attendants at Singapore Airlines are trained for four months whereas the American industry standard is four weeks (Mycek, 2000). When the manager of training at Singapore was asked how Singapore adjusted employee training during downturns in the economy, the manager replied “no” exclaiming, “The only thing that distinguishes us is our culture, our people. Why would we possibly cut that out just because we have a temporary economic downturn?”(Mycek, 2000)
Duncan Aviation is another company that invests in employee training. In 2000, Duncan, employees averaged 40 hours of training at a total cost of approximately $2 million. Training and funding included the following: the Karen Duncan Scholarships (up to 10 awarded annually—
worth $8,000 each—for continuing education); a tuition assistance program for all employees; some tuition programs paid in full; on-going technical and skill training for all employees; and, reimbursement of flight training for all, even though flight training is not required for most jobs.
Concluding Remarks
Successful organizations such as Duncan Aviation, Southwest Airlines, and Delta Airlines pay a great deal of attention to organization culture. These organizations plan and continuously develop a safety and customer-centric culture by creating a respectful, learning oriented and nimble workforce, with a sense of community, and the ability to respond to customer needs and change. As members of a service industry, such organizations employ an employee-centered (employees should be participative, empowered, committed and motivated) strategy in order to be far more customer-centric (aware of customer perceived value and customer perceived risk). Seven themes emerge from the review of the literature. One, the organization structure in star airlines appears to be less rigid than the industry norm. Two, management style in the star airlines is far more hands-on and communicative than the military command and control style typical of the industry. Three, the highest performing airlines operationalize internal marketing and employee feedback, are customer-centric, and focus on learning, communication and teamwork. Four, management at the top airlines possess excellent interpersonal skills, are highly present, and recognize employee performance. Five, the most successful airlines embrace diversity and actively leverage workforce diversity as amarketing strategy. Six, star airlines make use of employee surveys and customer feedback to gain valuable information from and about their stakeholders. And seven, high performing organizations are committed to training and development.
Select Audit Findings: Diversity, Organization Development and Training and Development
Diversity
Contrary to the enthusiasm encountered in the review of the literature concerning the marketing opportunities promoting workforce diversity, the audit findings indicate a relatively low level of commitment to facing the challenges inherent to diversity and questions of equal opportunity and harassment. Only 60% of the audit respondents said their organizations had an equal employment opportunity policy (See Appendix 1, question no. 2). Of that 60%, only one-quarter (26.67%) have communicated that policy to all employees (question no. 4) or have trained all supervisors and manager in the proper implementation of the policy (question no. 5). On the issue of sexual harassment, while 73.33% (question no. 14) of respondents said their organizations had sexual harassment policies, only 46.67% have distributed that policy to all employees (question no. 16), and an even lower percentage of supervisors and managers (33.33%, question no. 17) have been trained in the proper implementation of the policy. Seeking employee opinions is given low priority. Seventy-three percent of respondents said their organizations do not survey employees on the issue of equal employment opportunities
and sexual harassment (question no. 32).
Organization Development
The overwhelming consensus in the literature was that more than any other organization characterisic, an organization’s culture was the key to a competitive advantage. However, consistent with other audit findings indicating low scores in the areas of communication, gathering of information, training and development, and employee input the responses in the organization development section of the audit clearly signals problems in this area of organization life. While 73.33% (See Appendix 2, question no. 3) of respondents said their organizations had identified a desired culture, only 53.33% (question no. 2) had a person in HR continually monitoring trends and techniques of organization development. Not surprisingly, less than half (40%) of the respondents said there was a consistent culture throughout their organizations, and a shockingly low 20% said that their organizations had attained the desired culture! Opportunities to improve organization development appear to by bypassed by most organizations. Only 60% of the organizations in the audit appear to provide training for the improvement of team performance (question no. 40) and amere 33.33% of respondents said training on change management was offered (question no. 47). Not surprisingly, only 33% (question no. 20) of respondents said their organizations carried out surveys or analyses of organization culture and effectiveness. What is surprising is that in spite of the above low scores, 100% of respondents said they believed their organizations provided quality customer service to both internal and external customers (question no. 37). The enormous variance between this stated belief and the numerous indicators showing otherwise, illustrates an alarming disconnect between perception and practice in human resource management in these airlines surveyed.
Training and Development
In sharp contrast to the importance given to training and development in the literature, this is another area that appears under valued. Fewer than half (46.67%) of the respondents said that employees were made aware of training programmes (See Appendix 3, question no. 16), and only one quarter (26.67%) said that their organizations published a catalog of available organization training programmes (question no. 31). Even worse, of the 26.67% who do publish a catalog, only 20% said the catalog was distributed throughout the organization (question no. 32).
Concluding Remarks and Recommendations
The most obvious conclusion to be drawn from the results of the audit is how poorly understood the concept of “internal marketing” is in the airline industry. Airlines cannot offer optimal service to external customers because they don’t know their internal customers very well. Both the review of the literature and the audit findings clearly indicate that airline administrators show little awareness of, and interest in, their own internal customers’ opinions and insights. Management also tends not to communicate many types of important information (with the exception of rules and regulations) to their internal customers (both supervisors and line personnel) and often do not provide sufficient internal services that would contribute to optimizing internal customer performance (e.g. training and development). The reason for this lies in the poor state of human resource management in the airline industry. Shareholders and managers should be aware of these deficiencies.
Relative to best industry practices, the audit results indicated low scores in all three areas examined. Little attention appears to be given to clearly communicating a policy on diversity to employees, managers or supervisors. Likewise, managers and supervisors appear to receive little training in identifying sexual harassment and applying the organization’s sexual harassment policy. Organization development is in sorry shape. Scores relating to consistency of organization culture throughout the organization, and level of attainment of desired culture, received disconcertingly low scores. Generally low scores were also found in training and development particularly in regards to training in preparation for other positions and the provision of information regarding available training programmes. In all three areas, very low scores appeared on any questions regarding employee feedback.
Unless airline administrators begin conducting internal HRM audits in their own organizations, they will remain grounded by external issues such as endless price wars and shortsighted cost cutting binges. Airline administrators must make the connection between what their external customers value and how and why employees provide that value and more. The bridge linking customer value to employee performance is human resource management in general, and Organization Development and Education, Training and Development in particular. To this end the following five recommendations are offered. One, that national and international regulatory
bodies in civil aviation collaborate on formulating an airline-specific HRM audit that could be readily adapted and used by individual airlines. An opportunity exists here for researchers in the fields of human factors and human resource management to design and conduct additional audits in the airline industry. Two, that airlines appoint a person whose responsibility it is to conduct timely employee opinion surveys on the following subjects: organization culture, organization leadership, sexual harassment, equal opportunity employment, employee relations, and benefits preferences. The results of the surveys should also be communicated to all employees. Three, that the emphasis placed on communicating rules and regulations, performance improvement and disciplinary procedures, be equaled or surpassed by the clear and ongoing communication to all employees of such things as the organization’s mission, strategy, and desired culture. Four, that training and development be greatly expanded upon in such areas as management training, teamwork, change management, technical skills, diversity, communication skills and socialization into the organization. And five, that organizations in the aviation industry view their human resources departments as strategic support units and not merely as administrative cost centers.This entails allocating sufficient resources to their respective human resources departments and that senior management be responsive to the insights and recommendations of their HR personnel.
Appendix 1. Select Audit Findings: Diversity
Question: Out of a Total of 45 Questions
1.Is there an individual within the human resources department accountable for ensuring the Organization fulfills all equal employment laws and regulations?
Yes, No, N/A (or other as indicated in the question box) %: 73.33, 26.67
2.Does the Organization have an equal employment opportunity policy?
Yes, No, N/A (or other as indicated in the question box) %: 60.00, 40.00
4.If your answer to Question 2 was yes, has that policy been distributed or communicated to all employees ?
Yes, No, N/A (or other as indicated in the question box) %: 26.67, 46.67, 26.67
5.Have all supervisors and managers been trained in the proper implementation of the Organization’s equal employment opportunity policy?
Yes, No, N/A (or other as indicated in the question box) %: 26.67, 60.00, 13.33
6.Does the Organization have a grievance procedure for employees to redress perceived violations of the Organization’s equal employment opportunity policy?
Yes, No, N/A (or other as indicated in the question box) %: 46.67, 40.00, 13.33
8.If your answer to Question 6 was yes, has the equal employment opportunity policy been communicated to all employees?
Yes, No, N/A (or other as indicated in the question box) %: 33.33, 20.00, 46.67
14.Does the Organization have a sexual harassment policy?
Yes, No, N/A (or other as indicated in the question box) %: 73.33, 26.67
16.If your answer to Question 14 was yes, has that policy been distributed or communicated to all employees?
Yes, No, N/A (or other as indicated in the question box) %: 46.67, 33.33, 20.00
17.Have all supervisors and managers been trained in the proper implementation of the Organization’s sexual harassment policy?
Yes, No, N/A (or other as indicated in the question box) %: 33.33, 46.67, 20.00
26.Have supervisors and managers been trained in what constitutes sexual harassment?
Yes, No, N/A (or other as indicated in the question box) %: 46.67, 46.67, 6.67
27.Have non-management employees been trained in what constitutes sexual harassment, the Organization’s sexual harassment policy, and the grievance
procedure?
Yes, No, N/A (or other as indicated in the question box) %: 40.00, 53.33, 6.67
28.Do all of the Organization’s advertisements for employment identify the Organization as an equal opportunity employer?
Yes, No, N/A (or other as indicated in the question box) %: 46.67, 46.67, 46.67
32.Have employee opinions on equal employment opportunity and sexual harassment been surveyed separately or as a part of a general employee opinion
survey?
Yes, no, do not survey such information, n/a %: 13.33, 13.33, 73.33,13.33
39.Does the organization accommodate disadvantaged and/or disabled people whenever possible?
Yes, No, N/A (or other as indicated in the question box) %: 80.00, 20.00
Appendix 2.
Select Audit Findings: Organization Development
Question: Out of a Total of 52 Questions
1.Is there an individual within the human resources department accountable for coordinating the Organization development activities of the Organization?
Yes, No, N/A (or other as indicated in the question box) %: 60.00, 40.00
2. Does an individual within the human resources department continually review current trends and techniques of Organization development?
Yes, No, N/A (or other as indicated in the question box) %: 53.33, 46.67
3. Has the Organization identified a desired culture?
Yes, No, N/A (or other as indicated in the question box) %: 73.33, 26.67
5. If your answer to Question 3 was yes, has it been communicated to the Organization’s managers?
Yes, No, N/A (or other as indicated in the question box) %: 60.00, 6.67, 33.33
6.Is there a consistent culture throughout the Organization?
Yes, No, N/A (or other as indicated in the question box) %: 40.00, 60.00
7. Has the Organization attained its desired culture?
Yes, No, N/A (or other as indicated in the question box) %: 20.00, 80.00
12. Is there a consistent Organization structure throughout the Organization?
Yes, No, N/A (or other as indicated in the question box) %: 53.33, 40.00, 6.67
15. Is Organization development considerations a part of the Organization’s strategic planning process?
Yes, No, N/A (or other as indicated in the question box) %: 53.33, 40.00, 6.67
16. Is Organization development considerations a part of the Organization’s tactical planning process?
Yes, No, N/A (or other as indicated in the question box) %: 66.67, 33.33
20.Are surveys and analyses of the Organization’s culture and its effectiveness conducted?
Yes, No, N/A (or other as indicated in the question box) %: 33.33, 66.67
22.Is training provided for managers and supervisors in Organization effectiveness?
Yes, No, N/A (or other as indicated in the question box) %: 66.67, 33.33
36.Have departments been encouraged to identify their internal and external customers?
Yes, No, N/A (or other as indicated in the question box) %: 93.33, 6.67
37.Does the Organization believe in providing quality customer service to both internal and external customers?
Yes, No, N/A (or other as indicated in the question box) %: 100, 0.00
38.Have employees been provided training in improving the quality of customer service?
Yes, No, N/A (or other as indicated in the question box) %: 86.67, 13.33
47.Is training offered to employees in how to deal positively with change?
Yes, No, N/A (or other as indicated in the question box) %: 33.33, 66.67
49. Is training provided for the improvement of team performance?
Yes, No, N/A (or other as indicated in the question box) %: 60.00, 40.00
Appendix 3.
Select Audit Findings: Training and Development
Question: Out of a Total of 52 Questions
1.Is there an individual within the human resources department accountable for the Organization’s entire education, training, and development activities?
Yes, No, N/A (or other as indicated in the question box) %: 60.00, 26.67, 13.33
2.Who initiates requests for employee training?
Employee, employee’s supervisor, manager of employee’s supervisor, senior manager in the employee’s department, senior human resources manager, human resources manager accountable for training, an external consultant, other %: 73.33, 93.33, 53.33, 80.00, 33.33, 46.67, 0.00, 0.00
3.Is training available in any skills unique to the Organization?
Yes, No, N/A (or other as indicated in the question box) %: 73.33,13.33, 13.33
4.Is training available for employees desiring to prepare for other positions within the Organization?
Yes, No, N/A (or other as indicated in the question box) %: 53.33, 33.33, 13.33
5.Is management or supervisory training available?
Yes, No, N/A (or other as indicated in the question box) %: 73.33, 13.33, 13.33
7.Do all training programs have clearly established and specific behavioral objectives?
Yes, No, N/A (or other as indicated in the question box) %: 40.00, 46.67, 13.33
14.How are training needs identified?
Performance to job standards, performance reviews, changes in job content, assessment program, promotion, individual employee development objectives, other %: 80.00, 53.33, 80.00, 33.33, 33.33, 53,33, 6.67
16.Are employees made aware of available training programs?
Yes, No, N/A (or other as indicated in the question box) %: 46.67, 40.00, 13.33
23. Are the people who deliver training required to have training skills?
Yes, No, N/A (or other as indicated in the question box) %: 73.33, 6.67, 20.00
29. Are the costs of training charged back to the departments of employees who have been trained?
Yes, no, sometimes, n/a %: 46.67, 13.33, 26.67, 13.33
31. Is a catalog of available Organization training programs published?
Yes, No, N/A (or other as indicated in the question box) %:26.67, 60.00, 13.33
32. If your answer to the previous question was yes, is the catalog distributed throughout the Organization?
Yes, No, N/A (or other as indicated in the question box) %: 20.00, 20.00, 60.00
44. Is there an individual with the human resources department who is available to assist employees in preparing and implementing their development plans?
Yes, No, N/A (or other as indicated in the question box) %: 66.67, 20.00, 13.33
45.Does the Organization offer a tuition reimbursement program?
Yes, No, N/A (or other as indicated in the question box) %: 53.33, 26.67, 20.00
47.Must the courses or course of study be related to the employee’s current job or Organization?
Yes, No, N/A (or other as indicated in the question box) %: 33.33, 26.67, 40.00
48. Is reimbursement based on achieving a certain grade?
Yes, No, N/A (or other as indicated in the question box) %: 46.67, 3.33, 40.00
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