Assignment on Human Resource Relating to Qantas

Introduction

Qantas is an Australian Airline and is the third oldest airline in the world which was founded in the year 1920. The name “QANTAS” stands for “Queensland and Northern Territory Aerial Services” and it is also known as “The Flying Kangaroo”. The Qantas airways is its full cost legacy airline and Jetstar is the low cost carrier of Qantas. Qantas has lately been facing some challenges after the recent global economic crisis of 2008. Qantas CEO Alan Joyce says “out of touch union leaders are blocking reforms” (Source: The Australian July 21, 2011). In this paper we are going to discuss the strategic choices of Qantas and its effects on Human Resource Management.

Question 1: Evaluate the strategic choices that Qantas has from both a theoretical and practical perspective, and examine how these choices affect human resource planning.

Before Qantas became a private limited company, it was owned by the government and hence efficiency and profits weren’t the primary goals, after Qantas was privatized the HRM(Ḫuman Resource Management) division had to adopt new management practices to overcome various internal and external challenges and influences. Qantas group has two complementary airline brands named Qantas Airlines and Jetstar with about 30,000 employees working for the group. Qantas faced competition in the domestic market due to the emergence of Virgin Blue in the year 2000 which was operating at 30% lower operating and labour costs compared to Qantas. Countering Virgin Blue, Qantas created Jetstar in the year 2004 which was their low cost carrier with low fares with a similar business model as Virgin Blue and to cut down the operation and management costs of Jetstar, Qantas adopted a “no frills” service model where all the unnecessary luxuries were taken down to keep the fares low and the employees were paid lower salaries comparatively and there was a formation of a new committee called the “Flying Committee” which developed an aggressive market segmentation strategy to contain the threat of Virgin Blue’s competition. Due to Qantas’s new strategies and plans they were able to achieve 35 percent higher yields than Virgin Blue in the domestic market and their profits were more than doubled. The presence and influence of trade unions in setting wages and salaries were minimized to achieve substantial cost saving by reducing labour costs which is required to cut costs and keep lower fares for Jetstar flights. The HRM emphasized on efficiency to increase productivity and introduced flexible work structures through a workforce who were versatile and motivated and old costly practices were eliminated to make way for new practices making use of latest aviation technologies which could be carried out at lower costs and hence helping the company to cut down the costs. The Human Resource Management activity of Job analysis is considered to be an important quality or feature which is necessary for effective organizational functions. The Human Resource Management is responsible for planning, selection and recruitment and placement of workers in the company and this has been carried out very strictly in Qantas group after it was privatized and the HRM was changed. The procedures that are often taken care of by the process of job analysis include personnel selection, job evaluation, training, as well as performance appraisal. Strategic HRM focuses on connecting all HR functions with organizational goals and Qantas group adopted this to maximize their workforce efficiency. Some of the challenges that drive strategic changes in Jetstar and Qantas are: Fluctuating fuel costs, increased competition, change of laws by the government regarding workplace and labour. Jetstar which is a subsidiary of Qantas established a labour relation foundation with several non-union agreements and has negotiated new agreements with majority of occupational groups and it is similar to it’s former impulse contracts. Since Jetstar was developed from Impulse, it consists of unionized and some of non-unionized occupational groups. The unionized employees are the cabin crew which is about 85 percent of whom are members of the FAAA(Flight Attendants Association of Australia), and ground staff, who are represented by the ASU(Australian Services Union) and baggage and ramp handling workers are represented by the TWU(Transport Workers Union), but Jetstar outsources these activities and processes to a Qantas subsidiary. For non-unionized employees Jetstar maintains "works councils" inherited from Impulse to facilitate consultation. For example, for engineers there is an Engineering Consultative Committee, which comprises elected employee representatives and management representatives. It oversees the operation of the agreement, assists with dispute settlement, and is part of a broader communication and consultation process to help Jetstar cope with challenges that may arise.