Nowadays, it is very important for the organizations to make more focus on managing the performance of employees effectively. They need to use different ways and methods in order to motivate the employees so that they can work towards attaining overall business objectives (Van Dooren, Bouckaert and Halligan, 2015). The major objective of this report is to analyze the chosen new article about an Australian travel giant i.e. Flight Centre. Flight Centre Limited is one of the largest travel agencies in Australia and all over the world. The organization has started its operations in the year 1982 and it is headquartered in Brisbane, Australia. This company has recently been in the news for some wrong reasons which are published in the chosen news article. Australian travel giant has been hit by different statements of some of its underpaying employees. The below report provides the insights about the selected case and issues faced by Flight Centre. It reviews the literature on performance management, current issues and trends in this area. It provides justification about the need for improvement of coaching, performance management and delegation across the business. At the end, recommendations are given considering four key result areas in the organization.
Flight Centre Travel Group is the biggest travel agency in Australia that was established in the year 1982 and headquartered in Brisbane, Australia. The organization is listed on Australian Stock Exchange and it has yearly turnover of over $20 billion. The company has employed over 20000 people all over the world. Currently, it has around 2800 outlets and shops under its retail brands. Flight Centre has its business operations in United States, Australia, United Kingdom, New Zealand, Hong Kong, China, Singapore, Mexico, South Africa, United Arab Emirates and India etc. It has license agreements in 80 nations under its brand (Flight Centre, 2018).
The given article states about various unethical and wrong practices in which the organization has been engaged. These practices have huge adverse impact on the performance of its employees. The case states that Flight Centre is accused of ripping off its customers and underpaying the employees. They claimed that they feel like they are working being in a cult. As per the investigations of ABC, both former and current staff of Flight Centre said that travel consultants are encouraged to gouge its clients by adding thousands or hundreds of dollars to their ticket bookings. Moreover, the case showcases that company has made various promises to its employees so that it can overcome the guilt related to this wrong practice but it failed to fulfill them. For example, the firm has guaranteed its staff to give at least applicable minimum wage but 30% of its employees don’t receive minimum wage on monthly basis. Additionally, they do not pay its employees for working overtime and attending meetings. It has affected the morale of employees which has a negative effect on their performance in organization. In order to enhance employee morale, this company has developed a vibrant culture in the workplace but still it is not able to motivate them.
As mentioned above, Flight Centre has been involved in some wrong practices which have negative impact on the performance of its employees. It is very important for each and every organization to manage employee performance as they play a vital role in attaining overall objectives of business. According to Buckingham and Goodall (2015) performance management is the process through which employees and managers work together to strategize, supervise and review the work objectives of employees and their contribution to the organization (Buckingham and Goodall, 2015). In this context, Osmani and Maliqi (2012) stated that performance means the process where the human resources with their contribution of skills and knowledge perform the tasks via attainment of their goals effectively. The term performance management recognizes the objectives of company, required outcomes to attain those goals, different ways to become more effective towards these objectives and strategies and drivers to attain them (Osmani and Maliq, 2012). In an organization, there are various ways which can assist an organization to improve to retain and improve the performance of its employees. Moreover, there may be some wrongful practices which can decrease their performance (Barry, 2017).
Looking at the chosen article, it can be stated that Flight Centre is confronting the issues related to performance of employees due to wrong practices. According to McGrath and Carter (2018), Flight Centre is engaged in illegal practice as it is manually adding an additional amount to its ticket booking in online system of Flight Centre. It ranges from as little as 30$ to thousands of dollars. This process is done before showing the total costs to clients. Staff of company stated that 6.7$ bn is made on “work hard, play hard” approach and alcohol fuelled culture which drudges its employees down with depressed pay and extreme non-paid overtime hours (McGrath and Carter, 2018). Bainbridge (2018) stated that the company is charging extra from their customers on their ticket booking. For example, if the original price of ticket is $1500, it will mark-up and the final charges will be $1800 (Bainbridge, 2018).
In this relation, Aguinis (2009) described that unethical and wrong practices influence the productivity of the organization as it distracts the employees from their core roles and responsibilities. At Flight Center, this wrong behavior is bothering the staff thus keeping them from emphasizing on the work in hand. The author stated that wrong practices of a company can affect the ability of employees to work and perform effectively. The case shows that even after marking up, still company is underpaying its employees that have affected their satisfaction level and morale negatively (Aguinis, 2009).
Furthermore, McGrath and Carter (2018) stated that company is training its employees about marking up the booking and considering that it is not an illegal practice. It is one of the major issues at Flight Centre that employees are trained to conduct this practice. It has major impact on working behavior of employees (McGrath and Carter, 2018). In this context, Wei and Yazdanifard (2014) have described reinforcement theory that behavior of an employee is a function of consequence which instantly follows another’s behavior. This theory avoids different factors like needs, goals and expectations. An organization can have positive impact on employee behavior by giving different job benefits. For instance, Flight Centre is failed to provide enough benefits and payment for overtime jobs that affected their behavior negatively. The company needs to understand that these types of rewards can be very effective if they follow the behavior desired by the employees (Wei and Yazdanifard, 2014). For Flight Centre, it is very important to understand that they can affect employee behavior and their performance by practicing positive reinforces which can assist the travel agency to attain its objectives.
The above literature review indicates that Flight Centre is confronting different issues related to performance of the employees. It shows that staff is demoralized by the practices of Flight Centre Company. It states that there is need of improvement in the organization otherwise it will lose its talented and skilled employees (Mayo, 2016). There are three major areas i.e. performance management, delegation and coaching, on which Flight Centre need to focus. The company can use different strategies for improvement in its practices and management of employee performance. These strategies are discussed below:
It is one of the most significant strategies that can be used by Flight Centre in its stores. The case shows that employees at this organization claimed that they are working in culty environment. They feel that they are excluded from the company’s decision making process. This is the major reason behind the degrading of employee motivation and performance. As per Goal setting theory, the companies set a goal to motivate the employees. Flight Centre can use this strategy to attain better results. To implement this, the organization can introduce a key performance indicator that assists it to identify the employee’s performance for its goals. This goal will motivate the employees to perform better. Moreover, there should be effective communication between management and its employees.
Motivation and employee engagement are two major strategies which can support Flight Centre to improve the performance of its employees. By engaging the employees, it can involve them in making decision regarding the mark up amount. The employees are feeling very demotivated as company is not meeting the promises which it has made to its employees. They are not even getting the minimum wages applied in Australia. So, it is essential for Flight Centre to adopt some practices and incentives which can motivate them towards their roles. Moreover, it should make a provision for overtime workers as they are paying their hard work for attaining company’s objectives. This strategy will be very impactful in the case of Flight Centre (Mone and London, 2018).
Furthermore, delegation is another strategy that Flight Centre can adopt. It is true that there is need of effective assignment of roles and responsibilities of employees. The travel consultants should have the effective knowledge about their tasks. The company should create the teams and there should be a delegated person who will handle and manage the performance of team members. The leader of team will be responsible for the result of delegated tasks. This will assist the company to enhance the performance of employees at Flight Centre (Graham, Harvey and Puri, 2015).
When it is about the management of employee performance, coaching practice i.e. training and development are vital strategies which can assist Flight Centre to overcome the issues related to lower morale, unpaid overtime, underpaying and charging additional on booking. The firm should make changes in its training process and give them coaching regarding their roles and responsibilities (Saks and Gruman, 2014). They should eliminate the training of mark up from its current training program. Training program can help this company to overcome the issues and motivate the staff towards their work.
In order to handle the above situation in the case, Flight Centre should take some actions which are stated below:
It is hereby recommended that Flight Centre should comply with all the applied rules and regulations strictly. It should follow all the regulations implemented on travel agencies in Australia. The company lost a battle with ACCC and penalized by $12.5 million as it requested foreign airlines not to give their prices on websites. It is an illegal action that company has taken. Thus, it is suggested that it should follow all rules and regulations.
Moreover, the company should make changes in its business policies and processes. Currently, Flight Centre is offering its services to customers by adding a mark-up amount on online flight booking. It has affected both customer base and employee behavior in workplace. So, Flight Centre should make changes in its current policies so that they can motivate the employees and retain customers (Ramasamy, et al, 2014).
Flight Centre should value its employees and their contribution towards attaining the goals of organization. The company should understand that its employees are working hard and doing unpaid overtime. It should be valued by organization so that they can stay with company for long term.
In order to motivate employees and enhance their performance, Flight Centre should offer both monetary and non-monetary benefits to employees. There should be monetary rewards like bonus, incentives etc. These rewards will encourage the employees to work with the company with fully enthusiasm.
Conclusion
From the above analysis, it can be concluded that Flight Centre is using some wrong practices which have affected its brand image adversely. In addition to this, it has affected the satisfaction and motivation level of its employees as company is underpaying them even after taking extra amount on ticket booking. To overcome these issues, the organization can use different strategies so that it can improve the conditions and motivate the employees. These strategies will help Flight Centre to engage the employees in decision making and motivate them towards organizational goals. Moreover, some recommendations are given which can be used by Flight Centre to enhance employee morale and its overall situation.
References
Aguinis, H. (2009) Performance Management. Upper Saddle River, NJ: Pearson Prentice Hall.
Bainbridge, A. (2018) Flight Centre accused of underpaying staff, workplace bullying, Available from https://www.abc.net.au/radio/programs/am/flight-centre-accused-of-underpaying-staff-workplace-bullying/10186340 [Accessed on 8 October 2018].
Barry, W. S. (2017). Airline Management: Business Management in Transport 3. Routledge.
Buckingham, M. and Goodall, A., (2015) Reinventing performance management. Harvard Business Review, 93(4), pp.40-50.
Flight Centre. (2018). Home. Available from https://www.flightcentre.com/ [Accessed on 8 October 2018].
Graham, J.R., Harvey, C.R. and Puri, M., (2015) Capital allocation and delegation of decision-making authority within firms. Journal of Financial Economics, 115(3), pp.449-470.
Mayo, A. (2016). Human resources or human capital?: Managing people as assets. Routledge.
McGrath, P. and Carter, J.S. (2018) Flight Centre accused of ‘ripping off’ customers, underpaying staff in alcohol fuelled ‘cult’ workplace, Available from https://www.abc.net.au/news/2018-08-22/flight-centre-accused-of-ripping-off-customers-underpaying-staff/10051474 [Accessed on 8 October 2018].
Mone, E.M. and London, M., (2018) Employee engagement through effective performance management: A practical guide for managers. Routledge.
Mone, E.M. and London, M., (2018) Employee engagement through effective performance management: A practical guide for managers. Routledge.
Osmani, F. and Maliq, G. (2012) Performance Management, Its Assessment and Importance, Procedia-Social and Behavioural Sciences, 41, pp. 434-441.
Ramasamy, S., Sabatini, R., Gardi, A. and Kistan, T., (2014) Next generation flight management system for real-time trajectory based operations. Applied Mechanics and Materials, 629, pp.344-349.
Saks, A.M. and Gruman, J.A., 2014. What do we really know about employee engagement?. Human Resource Development Quarterly, 25(2), pp.155-182.
Van Dooren, W., Bouckaert, G. and Halligan, J., (2015) Performance management in the public sector. Routledge.
Wei, L.T. and Yazdanifard, R. (2014) The impact of Positive Reinforcement on Employees’ Performance in Organizations, American Journal of Industrial and Business Management, 4, pp. 9-12.
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