APPROACH TO HRM AT SOUTHWEST VS. AMERICAN AIRLINES

APPROACH TO HRM AT SOUTHWEST VS. AMERICAN AIRLINES

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Approach to HRM at Southwest vs. American Airlines

Introduction

Airlines that want to excel in their operations should pay considerable attention to the concept of Human resource management (HRM), which is a fundamental aspect of business operations. Bakator et al. (2019, p. 4) describe HRM as the practice of hiring, managing and deploying workers at the organization. A company while engaging in HRM practices perceive workers as assets of the firm (Bakator et al. 2019, p. 4). Employees in this context are sometimes perceived as human capital (Gittell, 2000, p. 106; Gittell & Bamber 2010, p. 170). The study compares and contrasts HRM practices in two firms – Southwest and American Airlines. It emerges that Southwest and American Airlines deploy Michigan and Harvard HRM frameworks, respectively, which compel the firms to focus on different critical aspects aimed at improving activities at the organization. The paper also shows the connection between HRM strategies in both companies with the firm strategy. The research describes the benefits of forming and implementing an effective HR strategy because this helps to improve how workers perform their duties and offers the chance to improve key operations. Besides, the research reveals that effective deployment of HR strategy impact on financial performance and attract buyers to the firm, which directly influence profit generation. The study identifies a fundamental aspect of HRM practice at Saudi Airlines and compares it with that of Southwest. The report affirms that effective creation and implementation of HR strategy allows the firm to improve its general performance, including encouraging workers to work hard, fostering operations, generating revenue, and attracting more buyers.

How HR Practices are Aligned with Business Strategy

Southwest and American Airlines are some of the influential operators in the American airline sector. Southwest Airlines, often referred to as Southwest, is one of the leading airlines of the U.S. and the globe’s leading low-cost carrier (Southwest 2021). Southwest has its main office in Dallas, Texas and serves both locally and internationally. The group has made significant strides since its foundation in 1967 in terms of flight operations and handling employee and consumer needs (Southwest 2021). The group knows the significance of HRM practices, which play fundamental roles in handling the more than 54,400 workers stationed at different hubs (Southwest 2021). On the other hand, American Airline in Fort Worth, Texas boasts of being the largest airline firm in the world in terms of fleet size (American Airlines 2021). American Airlines also dominates the sector in terms of revenue passenger mile as well as in terms of planned passengers carried. The group together with its affiliates makes at least 6,000 flights daily to almost 355 destination in more than 49 nations (American Airlines 2021). American being part of the Oneworld Alliance offers it a better chance to venture into the sector and to indulge in highly competitive practices. The group commenced its operations in 1926 and since then it has made considerable advancements in its operations (American Airlines 2021). With over 133,700 employees as of 2020, American emphasizes on HRM practices to ensure that all workers feel like part of the firm (American Airlines 2021). Southwest and American still have plans to improve their practices through more effective practices.

A business can either embrace some of the existing HRM models depending on their interests, available resources and aspirations. An example of a suitable HRM model is the Harvard framework for HRM that comprises of five critical aspects. It begins from the left with stakeholder interest. A firm using the Harvard framework develop HRM regulations that promote and safeguard the interests of various stakeholders, including the government, members of staff, management, shareholders, and other stakeholders impacting on the firm (Brunetto et al. 2011, p. 555). The second component is situational factors, which require a firm to develop HRM guidelines that impact on the characteristics of the workforce, foster formation of business strategies and conditions that boost performance, and which boost management philosophies. Moreover, groups that follow the Harvard model create structures that impact on situational factors such as the labor market, unions, laws and societal values and task technology (Brunetto et al. 2011, p. 555). The third component of the HRM model is HRM policy choices, and here an organization emphasizes on creating elements that enhance work systems, develop reward systems, encourage HR flow, and have significant influence on employees (Brunetto et al. 2011, p. 555). The fourth component of the Harvard model is HR outcomes. An organization that deploys the model seeks to achieve competence in its operations, and also aspires to achieve cost-effectiveness, congruence, and to be committed. The final component of the Harvard model is long-term consequences. Groups while focusing on this area aspires to achieve long-term goals such as individual well-being, societal well-being, and organizational effectiveness (Brunetto et al. 2011, p. 555). Adequately following the Harvard HRM framework provides organizations with an opportunity to create holistic and comprehensive HRM practices.

An organization may also choose to rely on the matching model commonly referred to as the Michigan model. The model primarily directs that HRM practices align with organizational strategies. As such, it regulates the roles of human resource to a reactive, organizational functions, and emphasizes the significance of societal and other factors in the external environment (Sadalla et al. 2018, p. 4). In addition to creating HRM practices that comply with social forces, a company adhering to the Michigan structure create directives that align with economic, political, and cultural forces. The Michigan model encourages a firm to develop a working strategy with the purpose of achieving strategic fit and alignment (Sadalla et al. 2018, p. 4). The framework urges senior managers to engage in effective recruitment, appraisal, development, and rewards procedures.

Southwest uses the Harvard model while American uses the Michigan HRM framework with both firms seeking to align their HRM models with the organizational strategy. Southwest’s strategy is to operate as a low cost carrier (Southwest 2021). It believes that fluctuations in economic conditions may deny some purchasers the chance to use its services, especially when prices are high yet many buyers may not be in a position to afford the rates. For example, Southwest believes that creating lower costs helps to create a business culture where members emphasize on the well-being of all buyers (Southwest 2021). On the other hand, American deploys pricing differentiations to enhance competitive advantage. Thus, the airline firm while developing its Michigan HRM practices as outlined in the model seeks to ensure that they align with the firm’s strategy. The team hopes that embracing cost differentiation provides it with a chance to attract key stakeholders, especially buyers (American Airlines 2021). American, for example, creates HRM policies that supports its strategy (cost differentiation) by encouraging employees to uphold existing work systems. Deploying the HRM practices effectively will help to achieve targeted HR and organizational outcomes as outlined in the Michigan HRM framework, including achieving competence, individual and societal well-being, cost-effectiveness, and commitment (American Airlines 2021). Each firm (Southwest and American) should not relent in their development of HRM practices align with organizational strategies.

Impact of HR Strategy upon Business Performance

Effective development and implementation of HR strategy has significant impact on how Southwest and American perform in different aspects. Effective development of the HR strategy impacts on employee performance and fosters satisfaction with their work at both airlines as it does with other businesses (Ali 2012, p. 7939). Southwest and American while developing their HRM strategies emphasize on motivational approaches that play fundamental roles in encouraging workers to do their best in all areas. Both firms while adhering to their effective HR strategy see the importance of creating motivational techniques that adhere to existing motivational theories such as Maslow hierarchy of needs that aims at helping workers achieve their physiological, safety, social, esteem, and self-actualization needs (Haque et al. 2014, p. 63). Both firms create motivational plans that adhere to the goal-setting theory, which requires individual employees to set specific targets and work towards achieving them. Moreover, an effective HR strategy may outline a motivational approach that follows the Herzberg’s two-factor theory, which states that certain factors at the workplace cause satisfaction while certain elements, especially in the macro environment may cause dissatisfaction (Kispal-Vitai, 2016, p. 6). Overall, effective development of a HR strategy presents an opportunity at American and Southwest to develop effective motivational plans that encourage workers to give their best.

Proper development of a HR strategy also impacts on general operations, financial performance, and buyers, which encourage Southwest and American to pay considerable attention to this area. Operation-wise, creating and implementing a well-formulated HRM strategy enhances key operations at the workplace (George 2019, p. 4). For example, Southwest and American get an opportunity to effectively conduct their recruitment and selection practices, which entails hiring new employees. The firms while following a well-drafted HR plan are in a better position to engage in early planning and have an opportunity to indulge in constant assessment of whether the recruitment process happens as anticipated, a process that helps to embrace suitable organizational practices. In addition, organizational operations at Southwest and American improve when relying on an appropriate HR strategy because the company is in a better position to embrace an effective approach to HR strategy (George 2019, p. 4). For example, rather than handling workers and their needs without adhering to any specific plan, a suitable HR strategy provides an opportunity to establish clear mission and goals, perform an environmental analysis, formulate strategies, and implement strategies with the objective of achieving impressive outcomes. On the other hand, financial performance improves because Southwest and American deploy well-formulated HR strategies because when workers are committed to their duties and feel motivated the chances of generating more revenue is high (George 2019, p. 6). Finally, consumers also become satisfied when the organizations follow an effective HR strategy. Buyers are more likely to be satisfied when they relate with happy workers who are committed to their duties. However, an organization that lacks a suitable HRM plan may not encourage its workers, which in the long run affects how they relate with buyers (George 2019, p. 6). In addition, customers want to relate with an organization that treats it workers well because this contributes towards building the group’s reputation. Thus, Southwest and American should find ways of enhancing their HR strategies to enjoy more merits.

Aspect of HRM in Saudia Airlines

Saudia, previously called Saudi Arabian Airlines, is the leading airline firm in the Kingdom of Saudi Arabia. The flag carrier based in Jeddah flies to more than 84 local and international hubs making it the third most competitive in the Middle East, behind UAE and Qatari-based Emirates and Qatar Airways, respectively. Saudia is part of the SkyTeam alliance, which provides it with a better chance to benefit from the airline alliance (Saudia 2021). Saudia, like Southwest and American, focuses on developing its HRM practices knowing that paying adequate attention to this area improves possibilities of improving operations. The team in charge of HRM pays considerable attention to teamwork, which is a fundamental aspect of HRM practices (Yaghi & Sindi 2016, p. 236). The HR division at Saudia pays much attention to building teamwork because working as a team improves idea generation, innovation, and creativity, which have substantial impact on how the organization conducts its operations (Yaghi & Sindi 2016, p. 236). In addition, the group pays much attention to teamwork because sharing duties and ideas enhances productivity and fosters impressive business outcomes. Another reason why the company puts much stress on teamwork and collaboration is that the practice makes it possible to take helpful risks and to learn faster (Yaghi & Sindi 2016, p. 237). More fundamentally, the HRM team encourages workers to embrace teamwork because this provides an opportunity to relieve stress that could affect how individual workers perform their duties (Yaghi & Sindi 2016, p. 237). Consequently, the HRM team at Saudi has adopted various approaches to promote teamwork at the organization. The management holds meetings where members learn the importance of teamwork and also leads the way by encouraging teamwork (Yaghi & Sindi 2016, p. 237). The group pays much attention to teamwork as a vital aspect of its HRM practices, but also pay adequate focus to other critical areas with the objective of achieving satisfying performance and gaining competitive advantage.

Comparing with South West Airlines

Saudia resembles Southwest’s Harvard HRM strategy because the American firm also pays considerable attention to working as a team. The HRM team in both instances seem to acknowledge that serving as different entities or in solitude could affect performance and also provides room for making errors. Furthermore, the HRM teams in both cases embrace various measures to improve how members work as teams in handling different practices. The HRM teams in Southwest and Saudia seems to know that when employees join hands to work as a team they increase the possibilities of generating fresh ideas and perspectives and also makes it possible to overcome potential obstacles that could derail effective operations (Yaghi & Sindi 2016, p. 238). The teams know that discouraging teamwork or failing to enact measures that encourage collaboration provides room for errors and creates room for unnecessary misunderstandings that would affect overall performance (Yaghi & Sindi 2016, p. 238). The fact that both Saudia and Southwest emphasize on teamwork as a core aspect of their HRM practices suggests that organizations that aspire to achieve impressive performance in their implementation of HRM practices should pay adequate attention to fostering teamwork.

Conclusion

The study is a critical analysis of HRM practices at some of the leading airline firms. Whereas the identified companies acknowledge the importance of HRM practices and take considerable measures to deploy the practice in their activities, all apply unique approaches that they think suit the firm and is likely to yield the anticipated results. Southwest use the Harvard HRM model while American uses the Michigan framework. Both organization try to align their HR strategies to the organizational strategy to achieve more impressive performance. The study reveals how both organizations improve how their employees serve, enhance their operations, increase financial performance, and attract more buyers and achieve consumer satisfaction through effective employment of HR strategy. The findings suggest that effective deployment of suitable HRM policies provides an opportunity to achieve significant growth and prosperity in various areas of operation. Other firms may emulate both companies that seem to be committed to enhance their HRM practices, especially with regard to creating a conducive place for everyone to serve. The paper describes how Saudi Airlines focuses on teamwork as part of its HRM practice and shows how that compares with HRM practices Southwest.

Reflection

I am a BSc graduate in HRM and has worked for eight months as a trainee in the oil and gas sector. I have also served as a recruiter in a hospital for seven months. In addition, I am currently a member of the faculty teaching HRM courses. I have gained much valuable information since enlisting for the course. Before much interaction with the various concepts in the course, I was not well conversant with certain aspects, which denied me an opportunity to apply the concepts at my place of work. For example, I was not familiar with as many motivational theories as I now know. The course has informed me that a leader should choose a motivation approach that helps to motivate workers and encourage them to do the best they can to achieve organizational goals and objectives. I am now confident to apply the various motivational techniques at the place of work knowing that both workers and the organization stand to gain significantly. I have also gained valuable insight into the various HRM models that organizations can deploy to enhance the performance of their HR teams. I now know how the Harvard and Michigan motivation models work and how they impact on organizational performance in terms of implementing HRM. I know that whereas one approach may work best with an organization another approach may not work as effective, which makes it necessary for the management to first identify the most suitable technique. I plan to use the information I have gained from the course to improve how I serve as a HRM leader in my future career. For example, I plan to use the information to draft effective HRM plans and to evaluate whether they have significant impact on organizational performance. I am confident that applying the information and skills I have gained throughout the course will allow me to achieve impressive performance in my future career.

References

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Yaghi & Sindi 2016, ‘Importance of knowledge management in establishing organization strategy: Study on Saudi Arabian Airlines HR division, Jeddah,’ International Journal of Business and Management, vol. 11, no. 3, pp. 235-247.