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12/14/2015
Research Papers
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Research Papers
Sunday, 16 June 2013
Blog Archive
Strategic Human Resource Management (Case study on
RyanAir)
CONTENT PAGE
Section Page No
...
Explain the purpose of HRM polices in regards to RyanAir 16
▼ 2013 (7)
▼ June (3)
Strategic Human Resource
Management (Case study o
...
Developing Strategic Mgt &
Leadership Skills (Case
...
Today Ryanair is Europe’s largest low fares carrier with an
annual profit of €503 million that is a 25% increase in profit from the previous year
...
d)
...
These impressive figures are a result of the Human Resource Management and
implementation of a costoriented business approach and efficient operations
...
As Snell, Youndt and Wright
(1996) comment that Strategic Human Resource Management can be established by the organization
to achieve competitive advantage according to people
...
The purpose of this report is to analyse the business factors and evaluate strategic human resource
management (SHRM) using (Ryanair) as the case study and make recommendation on how Ryanair
can improve their human resource activities and function
...
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1: Analysing the business factors that underpin human resource planning with
regards to Ryan Air
Human resource planning
According to (Investopedia, 2012), human resource planning is the ongoing process of systematic planning
to achieve optimum use of an organization's most valuable asset its human resources
...
The three key elements of the HR planning process are forecasting labour
demand, analyzing present labour supply, and balancing projected labour demand and supply
...
HRM is involves in setting policies, formulating plans and trying to
make decisions for the benefit of both the company and the staffs
...
which deals with the day to day issues
...
Manager from
other department may require certain personal information such as personnel records, staff
satisfaction, position details and HR expertise they could not have gotten this without the
human resources department and would not have the knowledge or expertise to deal with
the financial and business side of the decision making
...
We will only discuss forecasting labour
demand
...
The human
resources must use the right forecasting method to determine how many future workers with what skills and
ability the company will likely need over a given period of time
...
Managerial Judgment
2
...
Ratio Analysis
4
...
Computerized forecast
6
...
Delphi technique
For the purpose of this report only one technique will be looked at
...
Managerial judgment technique
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
...
In the topdown approach, the top managers
prepare the forecast for the number of employees needed for unit as a whole and then discuss these
estimates with the departmental heads and their subordinates to see whether any modification is necessary
in the estimate prepared by them
...
This technique is very simple and fast and the implementation can be carried out by the HR manager in a
short time
...
To be successful in the future RyanAir has to know the present situation the company is in
they has to look at the broader perspective
...
The analysis of those factors is therefore often known as Pest analysis (Johnson,
Scholes, 1999)
...
Political
The airline industry is affected by changes whether political, economic, social technological taking place
file:///I:/Research%20Papers
...
After 9/11, the tighten security measure has
affected the business, RyanAir lost a lot of revenue due to the fact that people was too scared to fly
...
Most of the airline company will do some hedge for the
fuel in order to stable the cost as fuel is a major cost for every airline
...
The fluctuation in the US dollars will affect RyanAir because the customer from US will reduce their
travelling as US dollars are depreciating
...
Nowadays people are more enjoy a travelling lifestyle
...
And more and more people will have graduation trips, backpack trips etc
...
Also, the merging of different companies from different countries also becomes
a big factor to generate revenues
...
Thus they
need the service provide by RyanAir
...
And it really affected RyanAir in almost all areas
...
High speed trains travelling to some destination and low fuel consumption cars are some of the
other means people are now using instead of travelling by plane
...
And they request
the airline industry to be an environmentallyresponsible industry
...
Legal
According to Oxbridge Writers (2005) the legislation with the most impact on Ryanair and other lowcost
carriers is an EU ruling on providing compensation, food and accommodation for passengers whose
flights are cancelled or heavily delayed
...
Ambiguous
wording in the law has been exploited by airlines: the rules do not apply if a cancellation is for reasons of
safety
...
Employees have to be on high alert
...
The (HR) team at
Ryanair has to ensure the right staffs are placed in the right position
...
Human Resource requirements
According to (Deborah, 2003) One of the main roles of an HR department is managing current
employees
...
Among the
benefits that might be handled by the HR department are insurance plans, paid vacations, paid leave
for illnesses and other health matters, pension plans and employee investments
...
Recruitment
According to Sims (2002) is the process by which organizations discover, develop, seek, and attract
individuals to fill actual or anticipated job vacancies
...
RyanAir aim to identify and recruit suitable applicants in a cost effective and legal manner, the
recruitment process involved planning, screening and selecting
...
Effective recruitment
According to Sims (2002) effective recruitment must be consistent with the strategy, the vision, and the
values 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
...
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Attract and encourage applicants to apply in the organization
Help the organization to communicate with job seekers regarding job vacancies
In order for RyanAir to reach these objectives, the HR department make use of both internal and external
recruitment
...
This process is a lot more cost effective for RyanAir as they would have saved a lot if they
decide to recruit internally
...
Filling job vacancy outside of the
organization involves
...
Performance Appraisal
According to Sims (2002) through the performance appraisal process, organizations measure the adequacy
of their employees’ job performance and communicate these evaluations to them
...
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
...
3: Developing a human resource plan for RyanAir
The Human resource department is one of the most important departments in any successful organization
...
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)
...
These are:
Managerial Judgment
Very simple and straight forward, the HR managers can carry out their functions without interference
...
This technique
has being used by RyanAir HR team successfully; the technique requires a facilitator to collect expert
opinion on the labour force
...
The
experts will make the necessary modification, if needed, the Delphi technique is a very time consuming
approach but RyanAir has being using it very well to date
...
The audit will
bring the HR department up to date with the performance of the employees and whether their skills and
abilities are fully utilized
...
Information about each staff from senior to junior will
become available through HR Auditing
...
4: Critically evaluate how HR plan can contribute to meeting the organization’s
objective
Human resource planning involves gathering of information both internally and externally in a systematic
way, the information gathered will be used to make better decision for the company
...
When companies
plan for the future they create business plans in order to help them achieve their short and longterm goals,
the employees is the company major asset, without the right employees the company will not be able to
function productively therefore the understanding of what changes or improvements are required to
succeed is a major part of any business development
...
The approach to developing a Human Resources plan will vary from one organisation to another
...
Setting the strategic direction
2
...
Planning the total workforce
file:///I:/Research%20Papers
...
Generating the required human resources
5
...
Assessing and sustaining organisational competence and performance
The airline industry plays a big part in the economy; it generates 31
...
The airline
industry has generally seen success in the many aspects involved with it – service, tourism and innovations
...
HR planning links people management to the organization's mission, vision,
goals and objectives, as well as its strategic plan and budgetary resources
...
In order to align business and HR Ryanair apply the following components
...
Evaluate the impact of legislation on the organisation
Designing the Human Resource Management System
file:///I:/Research%20Papers
...
In addition, it is
essential that a costbenefit analysis of implementing new HRM policies and practices be undertaken
Planning the total workforce
RyanAir development of a workforce plan is a critical component of the human resource strategy
...
According to Guardian (Jan 17, 2012), RyanAir planned to hire 1,000 people by the end of 2012,
thereby creating an increase in its workforce by 10%, as it boosts its fleet to 305 aircraft from 270
...
2011 Financial Statement of RyanAir
indicates that it expects to make a profit of €440m (£365m) for its 2011 financial year, up from its
previous forecast of €400m
...
5
...
These policies provide the company with the tool to manage risk by
staying up to date with current trends in employment standards and legislation
...
Purpose
HR policies allow RyanAir to clearly establish worker’s employment is atfree will and to establish that
each employee understands his or her employment
...
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Performance evaluations and salary increases, Performance improvement, Termination policies
Each company set their own polices depending on the nature of business they are in, when setting these
polices the HRM has to acknowledge the government legislation to ensure they are not in breach
...
HR policies can also be very effective at supporting and building the desired organizational
culture
...
These policies are generally thought to be best applied when good behaviour can be easily defined and bad
behaviour can be easily regulated and punished through fines or sanctions
...
Human resources was created to make sure the organization reaches its goals, which is to maximize returns
on investment for the organization’s human capital and minimize financial risk, providing the organization
with well trained and motivated employees, to ensure all reconciliation of individual goals with those of
the organization, developing overall personality of each employee in all aspect, and ensuring effective
utilization and maximum development of human resources
...
This commission established on July 2, 1965, and is listed under the Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (ADEA),[7] the
Rehabilitation Act of 1973, the Americans with Disabilities Act (ADA) of 1990, and the ADA Amendments
Act of 2008
...
According to (ryanair/doc/investor/EmployeeShareOption, n
...
Heavy restriction was
imposed on the airline industry before the 1980s; these restrictions were imposed by the individual
countries trying to protect their national airline
...
RyanAir is subject to extensive regulatory and legal compliance requirements that result in significant
costs
...
RyanAir is expected to
continue incurring expenses to comply with the FAA’s regulations
...
Aviation and Transportation Security Act
Aviation and Transportation Security Act take effect in November 2001, mandates the federalization of
certain airport security procedures and imposes additional security requirements on airports and airline
...
In addition of the highlighted level of
concern regarding passenger data, Ryanair HR has to ensure they are recruiting the right staff to deal with
such sensitive matters, any breach can result in a Hugh fine for the airline
...
Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes
for which they are processed
...
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Personal data processed for any purpose or purposes shall not be kept for longer than is necessary
for that purpose or those purposes
...
It is the responsibility of the HR manager to comply with the law and observe confidentiality regarding
matters of which they become aware of and which are subject to confidentiality
...
The employee must
maintain the highest standard of integrity and fairness to the employee and the customers of the airline
...
Organizational structure
Organizational structure is nothing more than the follow of authority of an organization
...
d) the organizational structures arranges its lines of authority and communications,
and allocates rights and duties
...
RyanAir HR Organizational Structure has to follow the needs of the organization, but it has to allow
the employees inside Human Resources to operate smoothly and to deliver consistent results over the
longer period of time
...
HR M i s a maj o r co n t ri b u t i n g fact o r t o
t h e su ccess o f t h e o rg an i zat i o n b ecau se i t i s i n a p o si t i o n t o affect t h e cu st o mers
...
d), Human Resource Management (HRM) is the function within an organization that
focuses on recruitment of, management and providing direction for the people who work in the
organization
...
A business may choose its structure based on various different criteria, and the
structures that it uses will have different effects on the business and the employees
...
The structure may have a positive effect on the organization by encouraging
employees to enhance their skills, thereby providing them with a clear career path
...
Geographic Departmentalization
Businesses may organize according to geographic areas, particularly if the business is spread out with
global operations
...
Factors Affecting Organizational Choices
The size of a company clearly affects the organizational structure that the company uses; large
companies like Ryanair use a more formal structure the airline is operating in a very unstable
environment, where customer needs are expected to change
...
8: Analysing the impact of an organizational culture on the management of human
resources for RyanAir business operation
file:///I:/Research%20Papers
...
Culture is
comprised of the organization, values, norms, working language, systems, including habits
and beliefs of the organization
...
The concept of culture is particularly important when
attempting to manage organizationwide change
...
Impact of organizational culture
Competitive edge derived from innovation and customer service
Consistent, efficient employee performance
Team cohesiveness
High employee morale
Strong company alignment towards goal achievement
An organization culture is very important to the organization if the company has good
culture this could lead to an increase in the performance of the organization
...
According to (Journalarchieves, 2012) Culture idea must be learned and shared in the
organizations (Titiev, 1959)
...
(Melear, 2006), corporate culture is impacted by history of the company, the founder of the organization
and country of origin of the organization
...
Melewar (2006) stated that the founder of the
company can affect the corporate culture
...
RyanAir has been committed to Lowcost air fare since the company was incorporated in 1985
...
Ryan air now employs over 8500 members of staff and as seen rapid growth over the years, since
RyanAir went public 1997, the money raised was used to expand the airline into a panEuropean carrier
...
They have to position
the right staff at the right place to maintain the company competitive advantage over their competitors; it is
believed that the company human resources are the source of competitive advantage over its rivals
...
The HR department have to be able to deal with the changes
and keep developing their staff in order to main their competitive edge
...
To keep the airfare low RyanAir launch their website in 2000, the aim of this is to give customers the
convenience to book ticket online
...
The website is now handling ¾ of their booking, with this number increasing
...
According to (Theguardian, 2012) on 19 June 2012 Ryanair Chief Executive, Michael O'Leary announced
his intentions to make an all cash offer to buy Aer Lingus
...
30 per
share in Aer Lingus despite shares closing at €0
...
Ryanair said the
cash offer represents a premium of 38
...
This would put the company
value at approximately €694 million
...
9: Examine how the effectiveness of human resources management is monitor in
RyanAir
The effectiveness of HR in an organization depends on the method that is use to measure the performance
of an employee
...
Human resource management (HRM), as defined by(J
...
Gold, 2007) "A strategic approach to
managing employment relations which emphasizes that leveraging people's capabilities is critical to
achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated
employment policies, programs and practices
...
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Base on the definition, HR is more than recruitment and discharging of employees, in fact,
good HR is one of the major contributing factors to the success of an organization
...
Clear Table of Organization and Effective Orientation Program should be in place
and this should be observed across all levels in the organization
Manpower Succession Plan, Merits, Awards, Incentives and Disciplinary
Measures should be created and made known to everyone
...
Inventory of knowledge and skills, including standards or proficiencies, required
in all positions / functions of the organization
Introduce a system that would assess employees and determine their strengths and
potentials, as well as areas for improvement and development skill/competency
gap then can be identified wherein areas for training can be identified to fill in the
variance
...
d) Ryan
Air now flies to 175 destinations across Europe and the UK with a record Net profit for the year to March
was 503m Euros ($643m; £406m), up 25% on a year earlier
...
3bn Euros
...
10: Make justified recommendations to improve the effectiveness of human
resources management for RyanAir
file:///I:/Research%20Papers
...
The way to do this is through
management philosophy which assumes that eliciting worker discretionary effort of enhancing motivation
and generating employee commitment will lead to improved organizational performance
...
In this circumstance effective HRM practice
has the potential to create organizations that are more intelligent and flexible than their competitors
through the use of policies and practices that focus on the development of staffs
Ryanair HRM, based on the above analysis, Ryanair has its own competitive advantage including the
unique, organizationspecific resource and its business strategy
...
For
example, there is a high staff turnover and the negative reputation of the staff being rude to customers and
the lack of customer service
...
Therefore, it is strongly recommended that Ryanair should adopt a model
which is best for the company development
...
Ryanair should motivate their staff s by making the working condition more workers friendly and
encourage their staff s, hence building their staffs moral by making them feel as if they are a part of the
Ryanair company and not just an employee of Ryanair
...
The customer service of Ryanair should improves by making the customers
feel better while travelling with the airline, hence, achieving more business opportunities and improving
Ryanair’s reputation and image
...
Conclusion
Ryanair has been playing a pioneering role in low budget segment of Europe’s aviation industry
...
This track record has resulted
from the implementation of an innovative cost oriented business model focusing on fleet commonality,
contracting out of services, airport charges, staff costs and productivity and marketing costs
...
The low fares as strategic key element account for Ryanair’s immense popularity and
annually rising passenger amounts even though complains about missing service have been recorded on a
continuous basis
...
(2004)
...
peason
...
Retrieved 08 26, 2012, from guardian:
http://www
...
co
...
(2012, 05 21)
...
Retrieved 08 24, 2012, from BBC:
http://www
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...
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...
Retrieved 08 20, 2012, from organizationalstructure:
http://www
...
com/definition/organizationalstructure
...
(2003)
...
london: wisegeek
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(2004)
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london
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Retrieved 08 18, 2012, from www
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com:
http://www
...
com/article/TheEvolutionofHRAudits/
Investopedia
...
Retrieved 07 18, 2012, from investopedia:
http://www
...
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typepad
...
(2012, 07 18)
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typepad
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typepad
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html
J
...
Gold
...
Human Resource Management: Theory and Practice
...
Johnson, Scholes
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Journalarchieves
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Retrieved 08 23, 2012, from http://www
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Melear, T
...
Seven dimension of corporate identy
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file:///I:/Research%20Papers
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perspectivebd
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Pettigrew, A
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Studying
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flightdestinations
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...
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...
com/en/about:
http://www
...
com/en/about
ryanair/doc/investor/EmployeeShareOption
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ryanair
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...
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...
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...
net:
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...
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...
organizational success through Effective Human Resource Management
...
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...
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