Introduction Federal Express (FedEx) Corporation was founded by Frederick W. Smith in 1971 when he was just 28 years old and it specializes in overnight delivery of heavy freight, high-priority documents and packages. It has operations in 211 countries and it operates all over the United States providing delivery of time-sensitive, valuable cargo worldwide. Its main headquarters are in Memphis Tennessee USA and its subsidiaries include FedEx Express, FedEx Office, FedEx Trade Networks, FedEx Ground, FedEx Custom Critical, FedEx Freight, FedEx Supply Chain and FedEx Services.
The FedEx Express subsidiary is the number 1 express transportation provider in the world with the FedEx ground complementing the express delivery business for small package ground delivery in North America. (FedEx 2012) Over the years FedEx has put in place a number of Human Resource (HR) Practices meant to improve the well being of employees and their job satisfaction and they have centered their operations worldwide on these practices. Overall they have had immense success in building long-lasting relationships with their employees and this has in-turn helped them achieve their end goal of higher profits.
All the HR practices put in place are meant to strengthen relationships with employees and to also help in building their careers. (FedEx 2012) Part 1. IHRM Concepts, theories and models 1. 1)IHRM CONCEPTS In IHRM there are many concepts that have to be greatly considered and when we focus on the expatriates they have to undergo some training before moving to a new country, which has a different culture, language and at times living standards.
Expatriate simply refers to an individual working in another country that is not their country of origin and can at times be referred to as the Parent Country Nationals (PCN). For an expatriate to be successful in the host country there are skills that they are required to have and these include technical, communication, leadership and managerial skills. There are many other things considered and these include adaptability, personality in terms of cultural empathy, emotional stability, maturity, willpower and patience. (Lin.
C 2012) In terms of training and development main consideration is put on making the expatriate ready for the assignment and it is subdivided into pre-deployment training, cross-cultural training, language training, sensitivity training and field experiences. All these concepts are what distinguish IHRM form HR. For a company like FedEx, which has branches worldwide, such considerations are important in ensuring that the company’s practices are the same worldwide and they should also conform to the culture of the host country also. (Haslberger.
A 2005) All these concepts are important when ensuring that a company is successful when it opens a new branch in a new country. Since FedEx puts so much emphasis on employee satisfaction first they should make sure that the employee is satisfied with the living and working conditions so that they work hard to fulfill the customer’s needs. If the expatriate is not happy with the conditions in the country then it would eventually lead to withdrawal. 1. 2)MODELS With the growth of competition at international level and globalization came the importance of human resources management.
The activities of a company that extend to international level always involve a complexity of actions such as development and diversification of management tools of human resources. The need to implement human resources management models was generated by two main factors: the globalization of companies’ activities on one hand and the necessity of multinationals companies to understand the way in which management know-how should be transferred from the parent company to daughter companies (Serafinceanu, Rudeanu, Buse and Buse, 2004).
International management of human resources models are important in the way that they give a series of management solutions for human resources and those solutions can be put in practice in order to eliminate the dysfunctions encountered. So far there are many international human resources management models known, the most used are: the Perlmutter Model, The Adler-Ghadar Model, the Taylor Model and the Geert Hofstede Model. a. The Perlmutter model In this model, Perlmutter gives 4 modalities on which multinational companies can manage their human resources activities on an international level.
Those modalities are: ethnocentrism, polycentrism, geo-centrism, and region-centrism. This Model shows how every multinational company can develop and implement human resources strategies and policies at a level of daughter companies in a host country. Besides the Perlmutter Model is a comparative management model since it helps to identify the differences and resemblance, advantages and disadvantages between the four (4) approaches a company can use to manage its human resources activities at an international level. . The Adler-Ghadar Model For Adler N. J and Ghadar F. , when multinational companies develop their activities at an international level they have to concentrate their effort on many aspects of organizational development. Therefore the authors have identified four stages of development of an organization. The first stage happens at a national level, the second stage is at international level while the third and fourth stages are at a Multinational level and global level respectively.
The table below describes well the process: Stage 1 National LevelStage2 International LevelStage 3 Multinational LevelStage 4 Global level Orientation towardsProduct/serviceMarketPriceStrategy StrategyNationalInternationalMultinationalGlobal Internationalization strategy Orientation towards foreign clientsExtension of the market beyond the national bordersSupply, production and internationalization of the marketAcquiring a position of strategic competitiveness at global level Expatriated employeesNon-existingMany A fewMany
Mission of expatriated employees-Management know-how transferControl implementationCoordination and integration Type of expatriated employees-Employees with high performancesProfessional Management personnel EffectsRewards Work well doneCareer development opportunitiesOpportunities of individual and organizational career Effects on the career of the personnelUnfavorableUnfavorable at national levelFavorable Essential Employees’ integration in the organizationRather difficultVery difficultRelatively easyExtremely easy Development of resources-Limited Long Continuous
Beneficiaries of human resources development programs-Expatriated Expatriated ones and personnel in the host countryManagers (leading staff) Performance evaluationAt organizationAt daughter company levelAt the level of the entire corporationEvaluation of the strategic position Motivational factorsPecuniary rewardsPecuniary rewards and experience gainedChallenge and opportunitiesChallenge, opportunities, career development Rewards Additional pecuniary rewards to compensate the influence of external factorsAdditional pecuniary rewards to compensate the influence of external factorsGlobal rewards with a less consistence individuallyGlobal rewards with a less consistence individually Shortest path of skillsInternal Internal International Global SkillsTechnical and managementTechnical, management of adaptation to the particularities of host countryTechnical, management, knowledge allowing identification of cultural differencesTechnical, management, knowledge referring to the interaction between countries Table 1. The Adler-Ghadar Model. c. The Taylor Model Taylor created this model to explain how a parent company can transfer its knowledge and human resources practice to its daughter company in a host country. Moreover it completes the gap presented by the Adler-Ghadar model by identifying situations where the parent company applies its control on the human resource strategy of the daughter companies.
For Taylor, “the strategic international model of human resources can be defined as the whole of the values, policies, methods and techniques of management of human resources, deriving from the strategic multinational activity of a organization influencing its objectives”. As shown on the figure below, there are three types of resources that can be used by the parent organization to implement human resources strategies on daughter companies: -Parent organization’s own resources -System of values, competencies, abilities and attitudes, -Resources in the daughter companies Figure 1. The Taylor model (Beardwell, I & Holden L. , 2001: 667-670) 1. 3) IHRM THEORIES i) Herzberg two factor theory Figure 2. Herzberg two factor theory, Herzberg, F. (1966). Literature review Considering that employees are the most valuable assets, they are constantly asked to adapt to change in so many levels of the job.
The management should use motivational methods such as that of Herzberg “motivation-hygiene theory “which explains how satisfaction and dissatisfaction can affect the job. Motivating employees to perform better on the job may increase their rate of performance and work overload can make them dissatisfied . ( Herzberg, (1966). Fitzsimmons,(2002) agrees partly with the above description he says most of Herzberg’s motivators are very useful for the employees creating the same levels of authority and responsibilities and recognition. Promotional opportunities and personal growth may also be used for motivation, as well as re-engineering the job structures makes work more meaningful. However Byrne, M. 2006) disagrees saying with time salary and incentives may be valued and entitlement thus losing their ability to motivate. The other factors such as relation with others, working conditions and supervision can cause job dissatisfaction. This all is making the theory motivate and demoralize the employees; however this theory is reflecting the modern delivery systems. This theory explains more on the job enrichment which is necessary for the congenital motivation, and it’s an ongoing management process. According to Herzberg a job should carry enough challenges so has to get maximum utilization of the employee’s abilities. He also says employees who constantly increase their performance levels should be given better responsibilities Pryor, etal. 2011) Criticize the Herzberg theory saying that people only take up on this theory because it’s easy for peoples to take credit on satisfaction than the blame of dissatisfaction on the external forces. FedEx gives its employees a suitable working environment that motivates employees to be innovative. Employees responded positively to the faith reposed in them and displayed exemplary commitment towards their work. In FedEx the employee were given control and autonomy to come up with work solution. Herzberg says all this will motivate employees to be more devoted to their work and it helps with attaining the goal of reducing the turnover rate. ii) Expectancy theory (Vroom) Figure 3. Expectancy theory, Vroom, V. H. (1964).
The Expectancy theory explains how employees are motivated by their desire to be rewarded (Valence) this will gives a possibility for expected performance (Expectancy) thus making performance lead to rewards (instrumentality). Valence is the an individual’s expected outcome, which normally isn’t the actual satisfaction that employee want after achieving the right goals (Pryor, etal. (2011) . Expectancy is hoping more effort will result in good performance; it is influenced by a lot of factors such as skill, enough resources, and correct information to complete a task. Instrumentality is believing that when you perform well you will receive a valid outcome.
Those who are to make the choice on who get what outcome, and clear relationship between performance and outcome (Jenkins, etal (1998) therefore affect it. Thus making the expectancy theory more based on only three relationships. ?Effort-performance relationship: what is the possibility that one’s efforts will be recognized in their performance appraisal? ?Performance-reward relationship: employees believe that by performing better the will get organizational rewards. ?Rewards-personal goals relationship: how attractive or appealing are the rewards according to each individual. Vroom says the employees make a choice or whether to perform good or not, this is however base on the employee motivation levels.
FedEx used this theory as way to motivate their employees by giving them special recognition award such as “Courier of the year award, team spirit award and the Bravo Zulu award” these reward programs where used to motivate employees thus reducing the turnover rate. Jiwani and Husain, (2011) states that they are some advantages to using the Expectancy Theory because it is more focused on the individuals who want to maximize satisfaction and minimize on dissatisfaction. It also looks at the expectations and perception of what is real and immaterial. Rewards and payoffs are some of the advantages of this theory as well as the individuals desire to attain maximum pleasure and least pain.
However according to Weathington & Jones (2006). They argue saying there are some limitations to this theory such as how it seems unrealistic because a few people have noticed the correlation between performance and rewards, it’s gravely limited to performance being motivated by reward yet they are many other factors such as the position, effort, responsibility and education . However it has implications that manager can connect the outcomes so as to attain an expected performance level. The employees that are well deserve should be rewarded for their work thou the reward system should be fair enough in the organization. Employee motivation should be constantly assessed.
FedEx use this theory because it allows them to give their employees a guaranteed fair treatment. This theory has also lead to the continuous appearance of FedEx in Fortune magazine: 4th among FORTUNE magazine’s World’s Most Admired Companies 2006. 2nd among FORTUNE magazine’s America’s Most Admired Companies 2006. Among Top 100 Best Companies to Work For in America 2006 and Hall of Fame member for being on the list every year since its inception . 9th in U. S. Corporate Reputation survey by Harris Interactive 2005. Among Business Week magazine’s 50 Top Performers 2005. ( fedEx. com) iii) Equity theory Figure 4. Equity theory, Adams, J. S. (1965).
Adams’ Equity Theory calls for a fair balance to be struck between an employee’s inputs (hard work, skill level, tolerance, enthusiasm, and so on) and an employee’s outputs (salary, benefits, intangibles such as recognition, and so on). According to the theory, finding this fair balance serves to ensure a strong and productive relationship is achieved with the employee, with the overall result being contented, motivated employees. (Allen & White, (2002). People have manage to create their own beliefs considering what is fair for themselves to receive after contributing toward the goal accomplishments of an organization. When someone believes they have been treated unfairly it is called (inequity).
However according to Adams the equity theory will help motivate the employees ( Weathington & Reddock(2011). In FedEx, employee grievances are considered to be very valuable and are handled as serious matters because any sign of inequity has to be solved by “Guaranteed Fair Treatment Procedure”. Certain issues are handled by the company’s chief executive officer and two other top officials who will personally attend to the grievances. They do this almost every Tuesday morning, all the cases are then addressed in front of the pioneer chosen by the employees as their representatives. Part 2. HR practices by FedEx i. People Service Profit (PSP) Philosophy
From the CEO and founder of FedEx Corporation Frederick Smith the company has based its philosophy on the premise that when employees are placed first, they will in turn provide the highest service possible which customers need and therefore reward the company with continued profitability and patronage. They base their success on making employees a strategic and integral part of the decision making process and this is where their corporate philosophy stems from. From the belief that people come first then service second and profit last they acknowledge the importance of employee empowerment and satisfaction. This is done by creating a work environment where employees have enough security and feel protected to take risks and be more innovative in pursuing service, quality and customer satisfaction.
The service aspect means that once employees are well taken of and all their needs are met there should be a clearly stated and invariable or consistent service quality goal of customer satisfaction all the time. Finally, profit for the company should result after the people and customer service goals have been achieved. (Aiqin. L 2009) FedEx put in place an all-inclusive staff recognition and reward scheme that keeps the morale of employees high. They also reward employees for contribution made to society for example The Humanitarian Award, which recognizes employees who go beyond their work to serve the community. Employees have growth opportunities through training programs where they enhance their knowledge and upgrade themselves by 40 hours training a year for managers and 50 hours for frontline employees. (FedEx 2012) Advantages
Through the reward and recognition schemes they have ensured that the workforce is satisfied and this means they would work harder to achieve higher profit levels and since the workers are satisfied by the working environment, benefits and holiday package they do not find any reason to leave the company so it means low employment turnover rate for the company. By putting their employees first they build a strong commitment with the company as seen by employees sacrificing their own personal belongings to make sure the business still runs even when things are difficult. ii. Job Change Application Tracking System (JCATS) This is their promotion from within policy, which is enhanced by job posting system online for employees on hourly services for any available job.
Newly available positions are posted on the system each Friday and any employee who wants to transfer to a new location or new job enters their name into the system, which retrieves each candidate’s information from the Personnel Records and Information System. (Taylor. M 2008) After gathering up all the necessary information each employee that posted for the job would be given a score based on length of service and job performance, which is ranked from top to bottom in the JCATS system. All applicants can log into the system to find out their position on the applicant’s list and by the end of the week the highest ranked employee will get the job. (FedEx 2012) Advantages The system ensures that they put their own employees first before considering anyone from outside which in-turn helps build stronger relationships with the company hence reducing turnover rate below 6%.
Posting open positions within the company helps them to get someone they trust and know better who also understand the mission of the company and works towards achieving all the goals and it gives all employees a chance to grow their capabilities from inside one company and even a chance to tackle a new job since they are always getting training throughout the year. iii. Guaranteed Fair Treatment Procedure Like the rest of the HR practices at FedEx this is also more of a process that supports the PSP Philosophy since it allows employees to speak up about their complaints or grievances to top management if they feel they were not treated fairly.
Issues appealed could include disputed disciplinary actions, performance reviews, terminations and job postings that an employee feels he/she should have been considered seriously but were not. Employees should try to resolve their complaints with their supervisor or immediate manager before the procedure is initiated. After that proper protocol is followed when the decision moves from immediate management to vice president. If the vice president withholds upholds the complaint in favor of the management then it moves to the third and last level where a rotating vice president, vice president of HR and the president consider the complaint and make a decision whether to modify, uphold or overturn management’s decision. (FedEx 2012) Advantages
This practice encourages better communication between employees and management since employees are given a chance to appeal their complaints to the company’s top management and once an employee’s grievances are being attended to and solved it gives them morale to work harder and also they find no reason to leave the company. Giving employees a chance to appeal about any disputes they might have and making sure they understand why such course of action was taken removes any doubts in the employee’s mind that management is biased and makes them feel appreciated and they can also understand why management has to make some of the decisions they make. iv. Leadership Evaluation and Awareness Process (LEAP) This practice at FedEx ensures that employees progress to management level in the company. It was implemented to improve retention and leadership effectiveness within FedEx and its open to any employee wishing to progress to management positions in the company.
And it helps evaluate the leadership potential of candidates and give them an opportunity to carefully consider taking up leadership roles. (Bouch. G 2010) Candidates must finish the following process to become LEAP certified. •A day class that sheds light on managerial responsibilities where candidates answer the question “Is management for me? ” •Candidates demonstrate proper understanding of the nine leadership dimensions through the “Employee’s Leadership Profile” •Recommendation from manager, which either approves or oppose the employee’s leadership capabilities prepared after 3-6 months of coaching. •Assessment from fellow employees providing opinions on the candidate’s management capabilities. LEAP Panel Evaluation: interview conducted by mid-level management where a candidate present oral and written arguments and the panel will consider all recommendations and if the candidate passes he can apply for a managerial position but if not has to wait for six months before undergoing the process. (FedEx 2012) Advantages It is an opportunity for employees to progress in the company since they are always the first ones considered for any open positions in the company. It also removes the notion that someone can work 25years as a receptionist at a company but rather they will progress from a lower position until they get somewhere better.
This is a platform for employees to understand how difficult it is to be in a managerial position before they can apply and in the end it would make them appreciate the work that their managers do all the time and also make them work extra hard so as to lighten up the load of their managers. Employees are also taught to stress on issues like individual consideration, respect for others and courtesy. v. Survey Feedback Action Program This is an important satisfaction and employee relations program at FedEx, which helps management when taking promotional decisions. Every April all the employees participate in an online survey and after results are compiled managers will conduct feedback sessions with their subordinates to discuss findings from the survey and identify issues from outside and within the department that need to be dealt with.
This is done so as to rate the commitment of management to the PSP philosophy and it is the root of improvement since employees would be asked questions about management’s performance and the company in general. (Brahnam. L 2007) After data collection they will develop action plans which are formally written to solve the problems and review plans are put in place throughout the year to check if problems where accurately solved. This problem-solving tool operates both vertically and horizontally throughout the organization. (FedEx 2012) Advantages The advantages of this practice include getting more information about employee’s satisfaction that is if they are satisfied or not and also the opinions of the subordinates in terms of management’s performance.
Feedback from the survey is useful because since the frontline employees have more contact with the customers they can help tell the management what needs to be changed in the company so that overall goals are achieved. vi. Open Door Policy The program gives employees an opportunity to forward complaints about corporate policy matters like seniority, hiring, vacation and benefits. The employee has to submit an open door form with the question or complaint and the Employee Relations team would get it to the appropriate management person who can respond to the complaint better. Whoever receives the open door inquiry should respond within fourteen normal days. (FedEx 2012) Advantages
Builds a strong relationship between management and employees because employees are always welcome to forward their grievances or complaints on any matter and in such a way if any employee feels he was wronged or treated unfairly they can question management on such issues and this helps clear out issues and even increase employee retention since there is an amicable relationship between management and employees. vii. Succession Planning Executive Education (SPEED) According to Prashanth. K (2006) “this practice was instilled to groom senior management employees for top management positions. ” SPEED allows employees in the senior management positions including senior vice presidents and vice presidents to evaluate and rank the capabilities, skills and preparedness of the employees who report directly to them and are likely to replace them. These employees are periodically advised on areas they need to improve their skills and are also mentally prepared to take up the new positions. (Gordon. M 2005) Advantages
This gives employees a chance to be molded in preparation for leadership in the company and they will gain more knowledge and skills from someone who is on a managerial position already. This practice by FedEx also ensures that an employee is ready for the new position he or she is about to take on and they will not leave in a few months’ time like what managers from outside usually do. Part 3 Contemporary issues and relationship of recent research to practice. Jim E. Casey said: “Good management is not just organization. It is an attitude inspired by the will to do right. Good management is taking a sincere interest in the welfare of the people you work with.
It is the ability to make people feel that you and they are the company—not merely employees of it. Good management is your worthiness to have and hold the confidence of others”. (Casey, 1985) For almost a century, organizations always concentrated their force more on the customer satisfaction than their employees’ satisfaction. As long as the client was happy nothing else would matter: an employee leaving the company is easier to replace than a customer. FedEx came up with another point of view and innovations in term of human resources management. The management worked on providing to the employees the best work environment they could want.
In return, the employees’ commitment to their work was exemplary increased and the turnover rate considerably decreased. Since then, most of the companies understood the importance of having human resources practices that motivate employees to do their work perfectly. For example UPS, DHL, and TNT main FedEx’ competitors, have also developed strategies to attract, develop and retain a skilled, motivated, and diverse global workforce. a. FedEx vs. UPS United Parcel Service of America Inc. (UPS) is another large package delivery company and leading provider of specialized transportation and logistic services that introduced a “Winning Team” strategy. It is an imperative that aligns with overall corporate goals.
This strategy doesn’t only aim to develop an effective workforce but also to form highly committed employees. By creating this strategy the company wanted to build integrity, ownership, performance, respect, innovation, personal growth, and service excellence. The “Winning Team” strategy was combined to other strategic imperative like “Value-Added Solution”, “Customer Focus” and “ Enterprise Excellence”. They also invest much on employee communication, employee relation and on learning and development. However, even though UPS has started to understand the importance of having committed employees, the company is still way too much focused on profit and customer satisfaction than its own people.
The strength of FedEx is that it looks at all aspects of the human resource functions that are important to the successful integration of employees within the organization. Besides, UPS Human Resources Management is blocked by the fact that if they focus too much on employees there might be a gap on the customer satisfaction side. But as shown on the figure below there is a strong relationship between employees engagement and customer loyalty. One increases the other and vice-versa. Figure 4. Verde, Employee Engagement & Customer Loyalty Linkage Path, 2011 According to Verde, employees’ experience defines their engagement in the work they are doing and their behavior. And obviously, the work behavior will affect the customer experience.
If the customer experience is good and he is satisfied with the service offered it will increased the company’s revenue and profit, if he is not it will decreased it and so will the revenue on investment (ROI). b. FedEx vs. DHL Express DHL Express is part of the German transport and logistic company “Deutsche post” that provides international express mail services. It is also a leader in sea and airmail. DHL, just like every successful organization, managed to create its own human resources strategies in order to satisfy its employees and develop their career. Like FedEx, DHL understood the importance of employees in an organization and considers “people” to be its principal resources. These two organization’s businesses are essentially driven by employee-clients interactions that are appreciated in term of service quality and speed.
Almost 80% of FedEx and DHL’s employees daily enter in contact with the customer, therefore it is very important for all employees to be well trained and highly motivated (Thunderbird International Review, 2008) On that purpose, DHL started to implement training sessions in which human resources executives have to be involved in order to follow up the employees’ development process. Over the years, they have been focusing on development of general skills in long term, as a result the rate of training and development of senior executives who are sent abroad for skills-enhancement workshops has sensibly increased. Before at DHL, salary augmentations were based on recommendation of department managers and employee’s benefits decided on a companywide basis.
Now, salary increments are “modeled on the latest technique such as Hay grayding” and employees’ merit matrices were implemented across all levels of the companies. Besides, employees have ad hoc administered benefits such as medical benefits, employee leave or absences, car allowance, etc. (Thunderbird International Review, 2008) c. FedEx and TNT N. V. TNT N. V. Is another worldwide express mail delivery and FedEx great competitor. Its headquarters are in Netherlands. In June 2011, TNT china has been awarded as one of the “10 Best employers in china 2011” for its positive human resources practices. TNT International Express China’s dedication to people development has been widely recognized internationally. TNT International Express China received the international accreditation of Investor in People (IiP), an achievement that, globally, TNT is the only company in the logistics industry to have achieved. TNT International Express China also received the awards for the “100 Best Human Resource Management Companies in China” 2009 and 2010, “Best Corporate Culture Management ” and has also been voted, by the online community, as one of the most “Popular Employers” by a leading and popular human resource services provider in China (Aon Hewitt, 2011)”. But that’s not all: all over the world TNT N. V has been receiving awards and prizes for its investment in people, environmental work and so forth.
Just like FedEx, TNT focuses on people-service-growth-profit (P-S-G-P) philosophy and employees’ development. All those awards have proven that TNT invests in people as much as it invests in their customer and the quality of service offered. Most of their practices are concentrated on performance management, talent management, succession planning and 360 degrees feedback. However compared to FedEx, TNT is one step ahead: instead of focusing only on the people like his competitors, TNT’s human resources activities decided to also give attention to the environment and quality standard such as ISO 14001 environmental management system standard certification, ISO 9001 for quality management and OHSAS 18001 for health and safety management.
Hence, it is the only express logistics and mail service that holds all those standards at the same time. This makes both customers and employees happy and more committed because they feel like they are contributing to the preservation of environment. In the table below there is a comparative summary of the 3 main competitors: UPS, FedEx and DHL: UPSFEDEXDHL Home baseAtlantaMemphisBonn Founded190719711969 FounderJames E. CaseyFrederick W. SmithA. Dalsey, L. Hillbloom and R. Lynn Employees357,000184,953160,754 Revenue in billions$33. 5$27. 40$27. 5 Fuel costs in Billions$1. 05$1. 5Not disclosed Fleet (Ground)88,00041,20018,000 Air crafts582 (216 owned-366 chartered)663275 Average daily volume packages13. Million3. 2 Million1. 5 Million Table 2. Source: Monday matchup by Arik Hesseldahl, Forbes Magazine (January, 2005) All these information about those companies are provided by different sources: Internet, journal, magazine, literature reviews, books and so forth. But the question to be asked is: what is the reality like? And what do the employees really think of their company’s human resources practices? Clearly, for most companies the retention of employees is not as important as making profit or satisfying the customer. But once again let’s remember here that employees behavior and employees satisfaction are strongly linked (refer to figure 1).
The greatest asset FedEx has is its people, therefore the retention and low turnover becomes very important for the organization. This creates a continual cycle in management and successful organization culture and standards are being met and retained within the organization. Part 4 HR Practices HR Practices can be defined as methods or approaches used to manage employees, which have positive impacts on an organization’s overall business performance by enhancing employee motivation, employee satisfaction as well as customer satisfaction. Human Resource Management (HRM) is an approach used to manage people more effectively in return for good performance within an organization.
Human resource was set up for management styles which are more flexible, open and caring so as to motivate, develop and manage the employees in a way that helps them in giving their full support towards the achievement of the organization’s missions and goals. High quality Human Resource Management practices play an important role towards the achievement of departmental objectives as well as enhancing the rate of production. Human Resource Management can also be defined as practices, systems and policies that are used to influence the attitude, performance and the behavior of the employees in an organization. HRM Good Practices in Departments
Since the launch of the HRM movement in 1994, the Civil Service Bureau has become a major sponsor of various human resources initiatives that has led to many departments introducing these HRM initiatives into their organizations. There is a need for integrated and strategic approach in managing employees for them to perform effectively. In taking this approach (integrated and strategic approach) the human resource management is directly linked to the strategic direction of the department in a more systematic way. This approach can also be reflected by the following practices: ? Clarifying the strategic direction of the department by articulating its mission, value and vision statements. ?Using the Human Resource Plan to set up strategic linkages as well as integrating human resource programs. Using Manpower plans to project its short term HR needs into long term HR needs. Managers must also adopt a more flexible, caring style and open approach when managing their employees. This approach can be reflected in various ways and some of these ways are: ? Using the Performance Management System (PMS) in managing their employees more effectively for performance reasons which will call for regular coaching, developing employees on the job as well as calling for individual objectives tied to those of the organization. ?Enhancing the competency of the employees for them to perform better by effectively training them to achieve the objectives and desired results of a department. Training the employees and engaging them in the service development culture in order to deliver good quality service. There are many HR practices that can be used to create highly satisfied and motivated workers and some of these practices are: Work Environment Hasan (2009) implies that a happy and safe working environment makes the workers feel good about working in that particular environment. Employees also want to work in places where there is some form of open management i. e. where they do not feel left out in decision making processes as well as what happens within the organization. When the management is open to the employees, it makes them (employees) feel motivated to work towards the achievement of organizational goals.
Employees also want to work in organizations where they are involved in discussions regarding the company policies, objectives, goals and areas that need improvement if there are any. If the managers are open to their employees on issues related to the company, some trust will be built between the two parties resulting in the employees becoming more motivated. Several tools can be used in practicing the open management policy. Performance Incentives (Recognition and rewards) Jewell (2008) suggested that recognition and reward programs help in reinforcing the actions taken by employees so as to improve/enhance quality as well as the satisfaction of the customers.
Managers reward their employees for outstanding performances and achievements so as to show their gratitude for the job well done and these rewards maybe in form of cash, paid holidays, bonuses, dinner gift certificates etc. For the employee to be more appreciative, this recognition must be done in public places for example, during functions. Performance Feedback Many companies use this method to improve their weaknesses if there are any. The feedback does not come from the top level management only but also from the employees and other seniors in the organization. The performance feedback method is very vital in an organization because it enables the employees to say out their opinions on the areas of weakness within the organization and how they can be improved. This program also helps managers improve on their weaknesses. Employee Evaluation
Jones (2007) believes that every organization has its own employee evaluation proceedings ready to be put to use where necessary but only good evaluation systems connect the performance of individuals to the organization’s goals and priorities. He also added that the evaluation must be done not only by the boss, but also by other people at high levels who believe that the performance of the employees is very important to them. The other employees can also obtain the ratings so as to ensure that each and every employee is rated in a more accurate and fair way. Jones (2007) also believes that evaluation systems work more effectively whenever achievements are over a period of one year. Sharing of Knowledge Sharing of knowledge is a strategy that can be used to help improve the employees as well as their work.
This information can be shared by keeping the knowledgeable information in databases that can be used by the other employees, for instance, if an employee goes for a training course, the knowledge he/she acquired may be kept in the databases so that the other employees can learn from it. Innovative ideas that are fit for the employees can also be kept in these databases for the employees to see. Publicize Good Performances Each and every organization has employees who always outperform others. The performances of such employees must be reflected upon and displayed where they are visible to everyone in the organization, for instance on the notice boards, intranets etc as this may be an encouragement to other employees to use all their potential to produce high quality results. Every company has some employees who outperform others.
Such performances should be highlighted and displayed where other employees can look at them; such as on the display boards and intranet etc. This will encourage others to give their best. Discussions Organizations that are successful nurture ideas and they also know and understand that employees are capable of providing the best ideas suitable for the business; managers must therefore have discussions with their employees from time to time to listen to their ideas. These ideas can also be obtained through the use of suggestion boxes which may result in managers finding the most talented employees and grooming them into future managers. The Surprise Factor Asif. J .
Mir (2010) believes that surprising deserving staff especially when they do not expect it is some sort of reward or gift to the employees. He also added that the surprise factor can be used on any random employee as a way of motivating the employees in an organization. This type of practice encourages an organization’s growth as the employees are the ones that play an important role in an organization. The reward for the use of this practice comes in the form a very successful organization. A Model of the Role of Expatriates The figure 5 below Shows how expatriates transfer HR Practices: Figure 5. Model of the role expatriates in the international diffusion of HR practices The diagram shows the expatriates’ interaction with both the firm and the subsidiary.
Expatriates must have experience and knowledge about the parent company’s HRM practices for them to play a vital role in the diffusion process of these practices. For expatriates to play a key role in the diffusion of HRM practices, they must have a ready knowledge and experience of the parent company’s HRM practices. One influence for the diffusion of these practices is the context of expatriation from the parent company’s perspective. This context includes the kind of control by the parent company, the international orientation of the parent company as well as globalization pattern and the subsidiary staffing mode. This context also finds out the MNC’s belief in its competence and the extent whereby the transfer of HR practices is managed by expatriates.
Another context in the diffusion of the HR practices is the determinant of expatriation from the view point of the subsidiary. Another determinant of the diffusion of HRM practices is the context of expatriation from the subsidiary’s view point. Our model emphasizes the role of the subsidiary, the dependence of it on parent HRM relogical Titles and the cultural and legal distance between parent and subsidiary. This determinant decides the host country nationals (HCNs) perceptions concerning expatriates by means of how much they are willing to trust them, devote to a shared vision as well as interact with them. The model also shows that expatriates are placed in the middle of the model.
There are basically two forces shown by the model which influence the impact of the expatriates in the diffusion of HRM practices and these forces are, one conveyed by the management of the parent company and the other by the local subsidiaries. Diffusion of HRM Practices The role of expatriates in the transfer of HR practices is still a modern research subject and it is left to the expatriates themselves use the knowledge they gained at the headquarters to demonstrate the know-how transfer as the Information technology also cannot transfer the know-how. At this stage expatriates are used as the carriers of the HR practices. Global System vs. Local Practices The global HRM system of any organization can be observed; Guest (2006) however insisted that local HRM practices should not be taken lightly.
Guest (2006) went on to distinguish six HRM policies and these are -Job design/organization -Recruitment and selection -Communication – Training and development -Reward system – Change of management He went on to say these policies can be into certain practices, for example practices like training, appraisal and development have something to do with career development. Part 5. ANALYSIS i) FedEx HR PRACTISES According to Sullivan (2003) the management of FedEx focused on providing a suitable working environment, which encourages the employees to bring more innovative ideas and solutions.
Employees became more committed to their work to an extent that when the company went through some financial crisis they were willing to give up their assert so as to continue delivering packages The people service profit philosophy was also another strategy that FedEx used, which in turn benefited the company in generating more profit (Smith, 1993). They also took up on the Service feedback action, which was for the employee management relation’s improvement, by dividing workers into groups and having a group leader or representatives they would share their reviews and the management would know and help solve the grievances. (Ribeiro, K. (2007) ii) Employee retention
Davidson, etal (2007) argues that job retention was a bad idea that they embarked on, It made most of their employee to be unstable thus becoming less loyal to the company. Most of the previous workers who had been with them for a long time lost their jobs to more skilled and younger employees which created a problem in delays because they had to state training the new stuff. On the other hand Yeow, (1999) argues this point saying it made them have more skilled and updated employees . the retention created competition within the work place thus allowing employees to perform better and produce better results. They opened an opportunity to rehire those who had quit and gave them chances to pick the departments they felt they could work better in. iii) Financial background
FedEx developed over years because it started with an investment of $84 million in the year 1971,by the time they reach the 1980s their revenue was now $1billion with net income of $88. 93 million, it was the first company to ever reach a revenue of $1 billion within 10 years without having to form any kind of merger. In the next decade they registered revenue of $10 billion and it started making subsidiaries however it regrouped in 2003 and the company had a net income of $830 million and revenue of $22, 5 billion. However critics like Robertson,(2000)say though it has large revenues they are still smaller delivery companies that such as UPS that had a revenue of $33, 49 billion in the year 2003. iv) Benefits of FedEx Sullivan, (2003) says FedEx is considered to be on the 100 best companies in America.
They have managed to get this far because they believe in growth through the continuous promotion of employees. They introduced a succession program called speed which would allow employees to get even senior management posts such as the vice presidents so as to evaluate skill, preparedness and promotion’ chances of those employees who are likely to replace them. Smith (1993) adds on saying the communication and performance appraisal was also good for the company because employees are able to freely share their views, which gives an opportunity of development. Yeow in 1999, argues saying this at times will create too much completion which might lead to so many mistakes in deliveries and delays in most processes.
The HR polices have allowed the company to be recognized by the fortune magazine and it’s in the best 100 companies section for 5 years. Mc Mahan said “the key to success is the exceeding customer expectation and the way we archive that is though our employees Sullivan, (2003) says the friendly employee polices have resulted in a very low turnover with an estimation of 6% v) Theories used by FedEx The Herzberg theory has been one of the key theories used by FedEx to improve their quality of services and also as a motivation tool for their employees. FedEx gives its employees a suitable working environment, which motivates employees to be innovative.
Employees responded positively to the faith reposed in them and displayed exemplary commitment towards their work. Herzberg says all this will motivate employees to be more devoted to their work and it helps with attaining the goal of reducing the turnover rate. ( Fitzsimmons,(2002). Though Herzberg’s theory has critics who say the environment is not much of a motivator they should use motivation such as rewards. So FedEx does not depend on one theory they also use the Maslow hierarchy theory, the expectancy theory and the equity theory. Each of these theories fulfills employee satisfaction thus allowing them to perform better at their tasks.
Thou monetary reward at time might end up not being good motivation, because an employee knows it their right so they might not put too much effort (Byrne, M. (2006). Conclusion To sum it all up FedEx has reduced its turnover rate to 6% because they are not afraid to invest large amount of money on developing human resources practices that will help the employees’ commitment to their work. They have applied all the necessary theories and the best HR practices which has helped them to maintain a good working environment, and they have manage to offer their employees good rewards. They have also come up with so many motivational skills that will encourage their employees to work harder and produce good quality services thus making FedEx one of the best carriage delivery companies.
We recommend that FedEx should continue improving and innovating their strategies as way of constantly motivating their employee to keep them satisfied, because an unsatisfied employee can produce very poor results. These innovations can be done by creating new awarding systems and allowing those working part time the opportunity to work full time, instead of hiring new people to work full time. They should also avoid lay –off plans because it aggravates the employees. However FedEx has proved that it is a company that just doesn’t focus on technology and profit making. They have shown that they put their employees first since they are the ones who serve the customers.