Silvertail Airline is the only competitor of Australia Air along with Singapore Airline. In both airlines, the management is considerably good and focused towards achieving corporate goals, however, Silvertail Airline reported a decline in its share prices due to increase in low cost carries in both domestic and international market. In order to remain competitive in the airline industry, the board of director of the company are being replaced by professionals from different fields such as leadership, marketing and innovation. The top and middle-level management personnel of the company are being removed, whereas, the maintenance department is being outsourced and various regional branches were closed. Silvertail Airline decided to make workforce reduction and redesign in order to layoff old crew members by using human resource planning. Effective human resource management in an organisation results in building an excellent team in the workplace which is focused towards achieving corporate objectives (Guest, 2011).
The primary function of human resource department in the enterprise is to hire qualified employees and provide them appropriate training in order to ensure that they are able to effective perform their duties. The HR department focuses on building relationship between the management and employees and motivating workforce to perform at their highest capacity to achieve targets of the enterprise (Wright and McMahan, 2011). This report will focus on providing an HR plan by critically evaluating the current situation and implications which could be faced by the enterprise if it complies with the plan suggested by Sam and Bobbi. This report will critically evaluate downsizing tactics and their implications for Silvertail Airline. Furthermore, this report will use appropriate inquiry and provide recommendations regarding alternatives to downsizing. All these factors will contribute to the HR plan for Silvertail Airline in order to address their HR needs such as training, career management and others.
Due to the ‘two airlines policy’ of the Singapore government, Singapore Airline and Silvertail Airline were the only two airlines operating in the country until 1990. Both airlines agreed that they would charge high prices and keep limited schedules. However, in the 1980s, the situation started to change as corporations started pressuring the government to deregulate the air transport sector. During the initial stage, the change was not able to succeed in the country, and some small airlines which entered the country failed as well. However, after the introduction of low-cost airlines at both domestic and international level, a significant change took place in the Singapore airline industry. This change resulted in adversely affecting Silvertail Airline. Due to a substantial decrease in share prices, shareholders of Silvertail Airline were angry, and they replaced the entire board of directors of the company with professionals from different fields such as accountants, marketers, advertisers. All these professionals were brought in by the company from the United States, and they were supposed to work with an open-minded and innovative Chief Executive Officer. During this restructuring process, many executive positions were disappeared in the organisation and the enterprise outsourced many roles. After making all these changes in the organisational structure, Silvertail Airline had a new and polished image in the market.
The purpose of these changes was to make the organisation leaner and meaner to address the new changes face by the enterprise in the airline industry. However, a problem persisted that many ground crew and cabin crew members had declined the management’s redundancy offers due to which a meeting was held between Sam Milroy (Recruitment Manager) and Bobbi Stephens (Cabin Crew Director). Employees are resisting the change and it is becoming difficult for the management to keep them focused. Due to hiring of new employees and removing of older ones, it would be difficult for the company to establish effective communication between managerial personnel and employees. The meeting concluded that they would rewrite the job descriptions in the company and increase the challenges of jobs and tasks for crew members so that older crew members are not able to meet the required standards based on which it would be easier for the management to separate them from the organisation.
As given in the case study, Bobbi was suggesting making drastic changes in the eligibility of employees for promotion in the company. Based on these changes, staff members should know a second language and a degree. One of the primary reasons for this change was that most of the ground crew members were too old to learn a new language and get a degree. In order to promote new, young and innovative image of the enterprise, it was necessary to increase the number of young employees in the workplace. Following were different implications face by Silvertail Airline if they adopt the plan suggested by Sam and Bobbie.
The corporation is pushing towards innovation and young brand image which would require them to adopt the latest technologies for performing their business operations. Most of the old professional at Silvertail Airline did not have knowledge regarding current trends, and they were not willing to learn them as well. Most of them were not able to cope with the changes made in the organisation. In case the plan is implemented, then the major implication face by the company include a negative impact on daily work routine of existing cabin crew and ground crew members since they required time to understand and learn new things. Furthermore, another implication is that it would increase the expenses on the enterprise as it would have to provide training to employees. It would also adversely affect the productivity of personnel which would be decreased over a period of time since they have to learn new skills and knowledge (Fraher, 2013).
Another major implication of imposing the proposed plan is that employees will lose their expertise in specific fields. Old personnel have plenty of experience and knowledge in specific field which provides them an advantage over new employees (Ouagrham-Gormley, 2014). Thus, as per the plan of executives, most of the older employees could leave the company along with their expertise. New employees who did not have enough experience are not competent to guide younger and newly joined employees towards achieving organisational goals effectively.
Another implication of this plan is that it might result in increasing retention ration in the enterprise. For example, due to lack of expertise members, young employees might not be able to understand or perform their work efficiently which would eventually increase retention ratio in the company (Ng, Sambasivan and Zubaidah, 2011). Furthermore, the company is planning to change its promotional policies by adding a clause that employees are required to learn a second language and a degree to be eligible for the promotion. Due to this clause, most of the older and experienced employees are more likely to leave the company which would result in increasing retention ratio of the company.
Due to the implementation of this plan, the probability of discrimination between employees increases based on age and experience. In the case study, it is specified that employees are required to learn a second language and a degree to be eligible for the promotion. For older cabin crew and ground crew members, it is impossible to learn a second language. Furthermore, getting a degree might take around five years. On the other hand, newly recruited employees have more opportunities to attain growth in their career. Due to this situation, the issue of discrimination arises between older and new employees based on age, education and experience. The discrimination would lead to negatively affecting the productivity of the entire workforce, and it may lead to creating dissatisfaction among employees (Greene and Kirton, 2011).
From an ethical perspective, it is wrong for Silvertail Airline to remove its loyal employees in order to improve its market image. Most of the employees are old, and it is difficult for them to get another job and start all the way from the bottom. Some employees have expertise in this field; however, others have to get a degree in order to get a new job which is difficult for them. It will also negatively affect the market image of Silvertail Airline.
Downsizing is referred to the process of reducing the size of the workforce in an enterprise by terminating employees. Commonly, it is also called layoff. Many organisations use a downsizing strategy in order to remove low performing employees and to create a competitive workplace environment to increase efficiency in the workplace (Laud and Johnson, 2012). Following are some of the key issues which are necessary to be identified by the management which planning for downsizing.
In the present case study, Silvertail Airline is focused on promoting the hiring of younger employees and in order to achieve this target the corporation is changing its promoting policies regarding qualification of employees. In this context, following are different downsizing tactics which can be used by Silvertail Airline.
It is considered as one of the most popular strategies for downsizing which is followed by a large number of companies. The key actions involved in this procedure include firing employees, layoffs, transferring individuals, mandating early retirement and others. The main purpose of this tactic is to remove employees who are working in unnecessary positions by reducing overall headcount in the company (Gandolfi, 2013). In case of Silvertail Airline, this strategy can be used by the management to remove the number of older employees in the enterprise to promote younger employees in the company. Silvertail Airline would face both positive and negative implications of implementing this strategy. Firstly, it will help the company in increasing its profits due to reducing in the number of employees.
Furthermore, this strategy would reduce the number of older employees who lack enthusiasm and initiative, and it would increase the number of younger employees in the company. However, it would have negative implications for the enterprise as well because its present employees would feel demotivated due to the strategy of the company which will negatively affect their productivity. The company will face a loss of expertise as the number of older and experienced employees’ decreases. Moreover, the corporation has to provide training to new employees that would increase its overall costs. Conclusively, this strategy has a negative impact on the operations and performance of Silvertail Airline.
This strategy assists the corporation in restructuring its personnel by modifying their job description and job specifications. This strategy assists in developing and maintains coordination between existing and new employees. It focuses on promoting the hiring of young employees that would result in increasing the overall productivity of the organisation (Bohmer and Imison, 2013). In case of Silvertail Airline, the corporation focuses on planning to hire new, young and innovative staff members who are enthusiastic and who do not shy away from a fight and did not have many family responsibilities. Older employees have too much concern regarding family responsibilities, and they are not comfortable with long-haul flights.
By implementing this strategy, Silvertail Airline would be able to attract and hire young staff members who possess qualifications and skills needed by the enterprise by redesigning position description and job description. It is the positive implication of this strategy; however, it would have negative impact as well. For example, older employees with experience would not be able to complete internal competency requirements. Moreover, change in job, and positive description resulted in increasing challenges for employees who are forty or fifty years old. Due to which most employees would not able to meet the required standards of their job due to which they could not work as cabin or ground crew for long.
It is another popular technique of downsizing in which the company provides a buyout offer to its employees. In this buyout offer, employees have a chance to choose between different options. The effectiveness of this strategy is based on the benefits offered by the company in the buyout which helps the employees in effectively dealing with the stigma of losing their jobs (Cascio, 2010). This technique is popular among large enterprises such as General Motors or Ford Motor Company. These companies use this technique to successfully reducing their workforce while sustaining their financial growth as well. In case of Silvertail Airline, the company can provide a buyout option to its older employees to reducing their number in the company and promoting the hiring of younger employees. However, it can have a negative impact because most employees would not want to lose their job because they have expertise in the specific field. Furthermore, the company will lose its expertise employees as well, and it would result in increasing its overall expenses.
As per the information is given in the case study, it is clearly demonstrated that Silvertail Airline is planning to attract young and innovative employees in the company by replacing older and well-experienced personnel. In order to achieve this target, the management is planning to change the promoting strategy of the corporation by providing that employees are required to learn a second language and have a degree to be eligible for a promotion. Following are different alternatives available for the company to downsizing strategies.
In this strategy, the company encourages senior and experienced employees to leave their jobs early. In order to achieve this target, the management gives additional amounts to employees so that they are not affected by the economy, and they have benefits such as social security and pensions benefits which would be enough for their survival (Zatzick, Marks and Iverson, 2009). In order to implement this strategy, Silvertail Airline can organise different voluntary termination programs which are offered to senior cabin crew and ground crew members which gives them the option to quit the company with financial benefits. This strategy is an effective way to hire young employees without lying off the existing ones. Furthermore, this option will allow the management to reduce payroll costing at a significant level, for example, by booking three-star hotels rather than five stars for staying employees for long periods during international flights. Moreover, buyouts will reduce the number of older staff members without terminating the employees who are loyal and working for a long time with the company. It would also assist in addressing the issue of discrimination between employees which would positively affect their productivity.
This strategy is comparatively less popular strategy for reducing the number of staff members, but it is effective. In this strategy, the management change culture and working environment of the organisation to reduce the number of employees. The objective of this strategy is to reduce the amount invested in educating and training staff for new positions (Gandolfi, 2014). This strategy is helpful for Silvertail Airline because it would enable them to replace the older employees with new and young ones without incurring heavy costs. It would also increase the productivity of employees and motivates them to perform better. However, this strategy is beneficial in the long run, and it is difficult to recognise short-term benefits of this strategy.
In this process, the underused employees are redeployed by the organisation to perform other tasks which are relevant to its success (Shi, 2012). In case of Silvertail Airline, the company can redeploy its underused employees and shift their job to sales which would result in increasing their productivity while at the same time it will increase the efficiency and reduce costs of the enterprise.
This strategy is similar to redeployment; however, there are key differences. This strategy focuses on eliminating unnecessary employees from the organisation by redesigning their jobs. Rather than focusing on reducing the headcount of employees, this strategy focuses on eliminating job positions from the organisation (Perlow and Kelly, 2014). For Silvertail Airline, it is an effective strategy as an alternative to downsizing. The company can eliminate the positions which are useless or vacant along with changing the job description and specification to redesign them for new and young employees. Furthermore, in this strategy, the company can relocate its older employees by changing their roles and responsibilities. It would result in increasing their efficiency while at the same time boosting the productivity of the organisation.
Until 1990, only two airlines were providing their services in Singapore, however, after the popularity of low-cost carriers, the business of Silvertail Airline is affected substantially. The management of Silvertail Airline is focused towards positively influencing and changing the market image of the company due to which they are focus on hiring new, young and innovative employees in the company. The management is focused on implementing different types of downsizing strategies in order to remove older employees and promote the hiring of young employees. This strategy has resulted in negatively affecting the working practices of the enterprise along with its overall productivity. Due to negative impacts of downsizing strategy, an effective HR plan is required for the company to address its future needs such as career management, training and others. Following are five critical steps regarding the preparation of an HR plan in order to meet the required needs of the company.
In this step, the HR manager focuses on determining the current skills, knowledge and abilities of existing workforce of cabin crew. The HR manager is required to evaluate credentials, strengths, certifications, and experience of employees. Along with this, the talents of existing employees are required to be evaluated by the HR manager (Dussault et al., 2010). Continues monitoring of employees performance and skills is necessary. Furthermore, performance review of employees is required to be conducted by employees to determine whether employees are willing to take additional responsibilities to accept challenging work in the enterprise.
In order to create a long-term workforce which is focused towards achieving corporate objectives, the HR manager should evaluate the requirements of the employer. Based on such information, the HR manager can provide a clear direction to employees that would enable them to develop and modify skills of employees which would result in bringing advancement into their careers so that the targets of the corporation are being achieved (Hameed and Waheed, 2011). In case of Silvertail Airline, the HR manager should evaluate the skills and knowledge requirements of cabin crew members. This information would assist them in creating effective HR action plan that would be focused towards achieving common organisational goals.
The HR manager of Silvertail Airline is required to develop a succession plan in order to bring a shift in the executive team of the company. The succession plan will minimise the disturbances face by the management while identifying critical roles in the company. The HR manager should communicate with employees while creating the succession plan to find out their career goals and their expectations for the enterprise (Hall-Ellis, 2015). Furthermore, they should focus on evaluating the necessary skills and knowledge which is required to perform the job in the future and whether the existing employees pose such skills.
The HR manager is required to loss at current job descriptions along with other information such as health benefits of crew members, training programs, employee handbook information and present business performance (Bunse et al., 2011). All these points assist the HR manager in determining the performance gap in the existing staff members so that an effective plan can be developed in the future.
Based on the above outcomes, the HR manager of Silvertail Airline would require taking certain actions to meet the gaps. For fulfilling these gaps, the corporation is required to hire new employees or to train the existing ones in order to meet the organisational expectations and boost its productivity (Khera and Gulati, 2012).
Conclusion
In conclusion, the human resource department plays a crucial role in the performance of an enterprise. Based on the evaluation of the case study, it was found that the management of Silvertail Airline was planning to create a new and innovative image of the company in the market. In order to meet this goal, the management is focusing on eliminating older employees by changing the qualifications of promotion. They are adding that employees are required to learn a second language and a degree to be eligible for the promotion. The corporation is focused towards replacing older employees from new, young and innovative employees for cabin crew positions. Different techniques of downsizing are analysing in the report along with their implications on Silvertail Airline. Various alternatives to downsizing are given in the report as well. Lastly, a systematic HR plan is given which is focused on addressing the future needs of Silvertail Airline regarding its cabin crew members.
References
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