Human Resources Planning and Development: The Case of RyanAir

Human Resources Planning and Development: The Case of RyanAir

 

Table of Contents

                                                                                                            Page Number

Company Background                                                                             2

RyanAir’s HR Strategy                                                                              3

Human Resource Management                                                             3

Recruitment                                                                                                 4

Performance Appraisal/Management                                                   5

Training and Development                                                                      6

Theoretical Models of HRM                                                                     6

HR Planning                                                                                                            7

Performance Management at RyanAir                                                 9

Recommendations                                                                                                11

 

 

 

Company Background

            Ryan Air was founded in 1985 by the Ryan family to provide scheduled passenger airline services between Ireland and the UK, as an alternative to the then state monopoly carrier, Aer Lingus (Middleton and Lickorish (2005). According to Doganis (2001) Ryan Air was the first low-cost, nor frills airline that had an impact on the European airline industry. When launched in 1985 it targeted the Irish ethnic market between Ireland and the United Kingdom by offering a more or less traditional type of service with a two-class cabin but at significantly lower fares. It stimulated a rapid growth of passenger traffic across the Irish Sea, much of it diverted from the sea ferries. On the London-Dublin route, where traffic had been stagnant for three years, passenger numbers more or less doubled in the next three years in response to the low fares introduced by Ryanair and to the lower fares forced on Aer Lingus and British Airways. But Ryanair was not profitable. Its unit costs, though lower than those of Aer Lingus, were not low enough to sustain its low fares strategy. By 1991 its accumulated losses amounted to close on (Sterling) £18 million and the airline was facing serious cash flow problems. It had also gone through five chief executives.

            After a visit to Southwest Airlines in Texas in 1991 yet another new management decided to reinforce the low-fare strategy but to abandon all frills in order to reduce costs. It also moved its London base from Luton to Stansted airport, which was new and offered high-speed access to Central London. The new strategy slowly turned the company round and it recorded a small pre-tax profit in 1992. Subsequently traffic and profits grew steadily and in summer 1997 Ryanair was successfully floated on the Dublin and New York stock exchanges. In the financial year 1997-98 alone its profits rose by 51 per cent to US million. Ryanair’s sparkling financial performance was an encouragement to other European entrepreneurs to assess the low-cost, no-frills model as a way of entering European aviation markets.

 

RyanAir’s HR Strategy

            RyanAir’s attitude to its workforce seems to be the same, no-nonsense, no-frills approach it has to its business and its customers. The company’s human resources is believed to have contributed to the company’s survival and success in difficult circumstances.

 

Human Resource Management

            Human Resource Management (HRM) is defied as the part of the management process that specializes in the management of people in work organizations. HRM emphasizes that employees are critical to achieving sustainable competitive advantage that human resources practices need to be integrated with the corporate strategy, and that human resource specialists help organizational controllers to meet both efficiency and equity objectives (Bratton and Gold 2001).

 

Recruitment

            Recruitment according to Sims (2002) is the process by which organizations discover, develop, seek, and attract individuals to fill actual or anticipated job vacancies. Employee recruitment includes interview, screening, and selection of most qualified candidates, filling of positions through transfer or promotion, and coordinating temporary employment. The aim of recruitment is to identify a suitable pool of applicants quickly, cost efficiently, and legally (Sims 2002). The recruitment program, to be able to succeed must be directly related to the organization’s strategies. The recruitment plan must be integrated to the organization’s strategic planning process. Effective recruitment efforts according to Sims (2002) must be consistent with the strategy, the vision, and the values of the organization. Strategic discussions focus on the general needs of the organization. Once those needs are understood, the focus turns to defining the needs of specific units or departments and the requirements for specific positions. The objectives of the company’s recruitment process are:

• To ensure that the supply of talents and skills are adequate


• To help management determine future human resources requirements


• To attract an adequate pool of job applicants where employees can be selected


• Attract and encourage applicants to apply in the organization


• Help the organization to communicate with job seekers regarding job vacancies

In order to achieved these objectives, the HR department make use of both internal and external recruitment. Internal recruitment involves recruiting current employees to fill job vacancies. External recruitment involves recruiting outside the organization. Various methods and tools in recruiting are also employed. Employee recruitment involves interview, screening, and selection of most qualified candidates, filling of positions through transfer or promotion and coordinating temporary employment. The aim of recruitment is to identify a suitable pool of applicants quickly, cost efficiently, and legally.

 

Performance Appraisal/Management

            Through the performance appraisal process, organizations measure the adequacy of their employees’ job performance and communicate these evaluations to them. Performance appraisals are a critical link in the HRM process, as they assess how well employees are performing and determine appropriate rewards or remedial actions to motivate employees to continue appropriate behaviors and correct inappropriate ones. The HRM role in performance appraisal is one of working with other managers in the organization to establish the appraisal process, the performance dimensions to be measured, the procedures to ensure accuracy, and requirements for discussion of appraisal results with employees (Sims 2002).

 

Training and Development

            Training and development such as orientation, performance management skills training, and productivity enhancement are planned learning experiences that teach employees how to perform their current and future jobs. Training focuses on present jobs, whereas development prepares employees for possible future jobs.

 

Theoretical Models of HRM

            There are two conflicting models of HRM that I would like to discuss – soft HRM and hard HRM. Soft HRM was associated by Storey (1992) with the human relations movement, the utilization of individual talents and developmental humanism. This has been equated to Walton’s (1985) concept of a ‘high commitment work system’, which aimed at eliciting a commitment so that behavior is primarily self-regulated rather than controlled by sanctions and pressures external to the individual and relations within the organization are based on high levels of trust (Wood 1996). Soft HRM has also been associated by Storey and Sisson (1993) with the goals of flexibility and adaptability and implies that communication plays a central role in management.

            Hard management, on the other hand, stresses ‘the quantitative, calculative and business-strategic aspects of managing the headcount resource in as rational a way as for any other factor of production’, as associated with Storey’s (1992) utilitarian-instrumentalist approach. Hard HRM focuses on the importance of strategic fit, where human resource policies and practices are closely linked to the strategic objectives of the organization and are coherent among them (Alpander and Botter 1981 cited in Gratton et al 1999).

            I can say that RyanAir subscribes more to the Hard Model rather than the Soft Model. Under the Hard Model, control is more concerned with performance systems, performance management, and tight control over individual activities, with the ultimate goal being to secure the competitive advantage of the organization (Guest 1995). This implies that the individual is managed on a much more instrumental basis than under the soft model, where both competitive and employee commitment are considered as equally important (Gratton et al 1999).

 

HR Planning

            In HR planning, planners analyze an organization’s HRM needs in a dynamic environment and develop activities that enable an organization to adapt to change. The HRM planning process involves forecasting HRM needs and developing programs to ensure that the right numbers and types of individuals are available at the right time and place (Sims 2002). Cascio (1995, p. 142) defines human resource planning as an effort to anticipate future business and environmental demands on an organization and to provide qualified people to fulfill business needs and satisfy demands. Human resource planning is viewed as a process. As a process, human resource planning focuses on identifying an organization’s human resource needs under changing conditions and developing the interventions and initiatives necessary to satisfy those needs (cited in Gilley and Maycunich 2000). There are three HR planning methods that RyanAir implements. These are:

1. Managerial Judgment

            In managerial judgment technique, the managers of the various departments come together and after considering the future volumes of work decide how many and what type of persons will be needed by the organization. There are two different ways in which this technique is being used by RyanAir. In the top-down approach, the top managers prepare the forecast for the number of employees needed for unit as a whole and then their discuss these estimates with the departmental heads and their subordinates to see whether any modification is necessary in the estimate prepared by them. In the second approach, which is know as bottom-up approach, the estimates about employees is demanded from the supervisors of the sections and departments and their heads consider the estimates, make necessary changes and forward them to the top managers for their consideration.

2. Delphi Technique

            In Delphi technique, a group of experts is asked to submit the estimates of employees needed. When the estimates are received from the experts, the human resource planning experts, who act as intermediaries, summarize the various responses received from the experts and report the findings to the experts. In the light of this feedback received, the experts reconsider the estimates and modify them, if necessary. This process goes on till the experts opinions begin to agree. The agreement reached by the experts is the final forecast of manpower demand.

3. HR Audit

            HR audit is carried out to find out how the present employees are utilized. The HR audit points out the information about the performance of the employees and whether the skills and abilities of the present employees are fully utilized or not. It also enables the planners to identify the employees who can be developed for undertaking more responsible jobs in the future. Information about absenteeism of the employees, productivity of the employees also becomes available through HR audit and this information can be used by the management for improving the performance of the employees.

 

Performance Management at RyanAir

Weaknesses of the Company’s Performance Appraisal

            Performance appraisal/management starts with job description. If the job description is unclear and very complex, problems in performance appraisal will arise. Some of the problems with the company’s job descriptions are:

1. Complex and difficult to understand

The job descriptions are so complex. The lengthy statements of duties, authorities, responsibilities and accountabilities are confusing not only for the employees but for the Managers as well.

2. Inaccurate Information

There are so many unimportant tasks and duties that are stated in the job description that makes it hard to understand. The employees also feel that the job descriptions set unachievable goals and exaggerated job responsibilities.

3. Imposed and inflexible

The job descriptions are often written and imposed on job holders from above. The jobholders do not have any participation in the performance planning and the creation of job description. Because the job descriptions are made at the top of the organizational hierarchy without any input from the job holders, they are often inflexible and not up-to-date.

 

The Company’s Performance Appraisal Tool

            One of the company’s performance tool is rating scale. Rating scales according to Rudman (2003) are readily adaptable to suit specific jobs and organizations, and there are virtually no limit to the aspects of person or performance that can be rated. In simple terms, rating scales require the reviewer to rate the employee’s performance in an absolute sense, not in comparison to other employees. Employees can be rated on virtually any trait or characteristic or dimension of performance or behavior. The characteristics to be assessed are chosen and each step on the scale is given a brief description in terms of quantity and quality. Some of the problems with rating scales are as follows:

1. Ratings are sometimes subjective.

2. Not all the characteristics of a job are equally important and certain characteristics are more important for some jobs than for others.

3. Ratings can be given easily enough for individual characteristics or dimensions, but it is more difficult to turn into a valid or useful overall assessment.

 

Recommendations

1. Flexible Job Descriptions/ Employee Influence in the Process

            The manager and the employee should be the ones responsible for job analysis, job design and job description. The organization’s generic or model job descriptions should be used by managers and employees only as a basis for developing and agreeing their own description of the job the employee really does. Job descriptions should not be written and imposed on job holders from above. The responsibility of designing the job description should remain with the manager and the job holders. The contents of the job description should be agreed by both the job holder and the manager. Getting employees’ commitment is a key to setting effective goals. Employees should participate fully in the setting of objectives for their own jobs, and have an opportunity to contribute to planning the objectives of the work group, the department and the organization as a whole. Each individual’s goals must fit in with those of the wider work group or workplace. How much you involve employees in setting their targets will depend on the organization’s approach to performance management and on its style and culture generally. At the very least, managers should ensure that the person responsible for achieving a particular objective understands and accepts it. Employees will not feel committed to targets that are just handed down to them by management (Rudman 2003).

2. Rating Scales coupled with Management by Objectives

            Management by objectives is the best known of the results-oriented methods of performance planning and review, and in some form, probably the most frequent used approach to performance planning and review. In simple terms, MBO is a target-setting or results-oriented approach to performance management. It recognizes that employees perform better when they have targets, and even better when they have participated in setting those targets. Job analysis is used to produce a job description that sets out the principal accountabilities or key results areas of the job: in other words, the desired outcomes. In this way, the traditional lists of tasks and duties, or inputs, give way to brief statements of expected results in each area of a job. In turn, these are translated into specific targets to be achieved over a particular time period (Rudman 2003).

 

 

References

 

Alpander, G. C., and Botter, C. H. (1981). “‘An Integrated Model of Strategic  Human Resource Planning and Utilization’”, Human Resource Management, 20 (1), 189-203.

 

Bratton, J. and Gold, J. (2001). Human Resource Management: Theory and Practice. Routledge.

 

Doganis, R. (2001). The Airline Business in the Twenty-First Century. London: Routledge.

 

Gilley, J. W. and Maycunich, A. (2000). Beyond the Learning Organization: Creating a Culture of Continuous Growth and Development through State- Of-The-Art Human Resource Practices, Cambridge, MA: Perseus Publishing. Gratton, L. et al (1999).  Strategic Human Resource Management: Corporate  Rhetoric and Human Reality, Oxford: Oxford University Press.

 

Guest, D. E. (1995). “‘Human Resource Management, Trade Unions and Industrial Relations’”, in J. Storey (ed.), Human Resource Management. A Critical Text. London: Routledge.

 

Middleton, C. T. C. and Lickorish, L. J. (2005). British Tourism: The Remarkable Story of Growth. Butterworth-Heinemann.

 

Rudman, R. (2003). Performance Planning and Review: Making Employee Appraisals Work. Crows Nest, NSW: Allen & Unwin.

 

Sims, R. (2002). Organizational Success through Effective Human Resources Management. Westport CT: Quorum Books.

 

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

 

Storey, J. and Sisson, K. (1993). Managing Human Resources and Industrial

Relations. Milton Keynes: Open University Press.

 

Walton, R. E. (1985). “‘From Control to Commitment in the Workplace’”, Harvard  Business Review, 63(2), 77-84.

 

Wood, S. (1996). “‘High Commitment Management and Unionization in the UK’”,  International Journal of Human Resource Management, 7 (1), 41-58.

 

 

 

 

 

 

 

 

 

 

 

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