Cathay Pacific Management Problems

Table of Content

Introduction

Analysis of Problems

 Problem 1

Causes

People Management Problems

Impacts to organizational performance

 Problem 2

Causes

People Management Problems

Impacts to organizational performance

Recommendations

 Alternative solutions for problem 1

 Alternative solutions for problem 2

Conclusion

References

INTRODUCTION

Background Information

Cathay Pacific Airways Limited, which is managed by the Swire Group, is the largest airline and flag carrier of Hong Kong. The company with over 14,000 staff worldwide now, was founded by 1946. It based at Hong Kong International Airport, and its operations include scheduled passenger and cargo services to over 120 places around the world. (http://www.cathaypacific.com/cpa/en_INTL/careershome?CX_LANGUAGE=en)

The union power is strong for Cathay Pacific. According to the history, union actions were taken for different reasons since 1981. (http://zh.wikipedia.org/w/index.php?title=Cathay_Pacific&variant=zh-hk#.E7.88.AD.E8.AD.B0) This union has a norm on having deviant workplace behavior.

Problem Encountered

In the following parts, we look deep into two major people management problems about the customer services officers in this company. The first one is about the protest of the reduced size and facilities of new rest room. Another one is about the increasing overtime work.

ANALYSIS OF PROBLEMS

Problem 1

Causes

Over a hundred of Customer services officers refused to work overtime for three consecutive days in order to protest the reduction of the size and facilities of their new rest room. Because of the reduction of hygiene factors, ground crews are more dissatisfied with their job and they are likely to have unionization attempts.

People Management Problems

First of all, the ground crews considered that they were not treated fairly as they perceived that the procedures decided by Cathay are unfair. Although the staffs are directly affected by the changing position of the new rest room, they have not been involved in this process of decision-making. Hence, due to the lack of procedural justice, it is considered to be unfair by the crews.

Moreover, the reduction of the sizes and facilities of rest room caused an increase in dissatisfaction of the ground staff. In accordance with Herzberg’s Two-Factor theory, satisfaction and dissatisfaction are not opposites but separate constructs. Although Cathay is planning to provide sofa and television in the new rest room, this can only help the staff changes their dissatisfaction to natural.

Consequences: Impacts to organizational performance

Because of the reduction of hygiene factors, such as a smaller rest room and fewer facilities, job dissatisfaction was created. Dissatisfied employees are more likely to miss work and reject to work overtime. In this case, the crews refused to work overtime for three consecutive days. And, the normal operation of the company would be affected without enough ground staff to serve customers. Thus, absenteeism will influence Cathay greatly.

Finally, the changes made by Cathay Pacific, such as reducing the sizes of the rest room, caused a resistance to change of the staff. For instance, the crews refused to work. Those actions could be treated as an overt and immediate form of resistance to changes. This shows that crews did not accept their change in their condition. Hence, the employees have voiced out their comments to express their dissatisfaction. For example, the staff have gathered over 100 employees to refuse working overtime for three days and planned to continue this act at the peak period, like Christmas, if the management level ignore and do not respond to their action.

Problem 2

Causes

Many ground crews of Cathay Pacific claimed that their workloads are unacceptable. The problem is becoming more serious since the company is now stopping to hire new crews and requiring them to work on day-offs. Therefore, the staff thought their benefits were reduced compare with the past.

People Management Problems

Firstly, according to Adam’s Equity Theory, employees compare their rations of outcomes-to-inputs of relevant others. In this case, the employees compared themselves with a self-inside situation, which is comparing their current situation with it was before. They found their ration decreased because of income (effort paid) increase and outcome (salary received) decrease. Since they regarded themselves as under-rewarded, they took actions to reduce tension and want to bring the situation back to normal. For example, symbolic protest was emerged. They started to “work according to the rules” and refused an overtime work. Thus, this is one kind of illegitimate political behavior under power in action.

Another problem faced by Cathay is the conflict between its management and employees. As mentioned above, the ground crews perceived that the company has negatively affected their concerned working conditions. This conflict may be resulted from poor communication between both parties, lack of openness of the company, and failure to respond to employees needs. It is obvious that Cathay failed to respond to its crews needs. Many ground staff complaint there is an increasing amount of work and overtime works. Cathay, however, did not notice the heavy workload among the staff. Thus, there is felt conflict appears among the affected employees, who have negative emotions, may create hostility, mistrust, and negative interpretation to the company.

Consequences: Impacts to organizational performance

Due to the negative emotions among the employees, they have a deviant workplace behavior. For example, they grouped together against the company’s policy on requiring them to work on holiday. This may affect the goodwill of Cathay. Therefore, frequent deviant workplace behavior influence the overall performance of Cathay is reduced.

Moreover, they voiced out their concern by working-to-rule and refused to work overtime. They actively and constructively attempt to worsen the conditions as they realized that giving pressure to the management level could attract their attention to the situation. For example, protest against overtime work to voice out their dissatisfactions to the management level for improvement. This act would directly affect the company and the passengers as the boarding procedure is slowed down.

RECOMMENDATIONS

Alternative solutions for problem 1

Firstly, as the ground staff perceives that the decision process is unfair, the company should carry out participatory management, which can invite the ground staff representatives to participate in the decision making process. For example, the executive of Cathy Pacific can hold a meeting with the employees to discuss the problems and solutions together before taking any actions. Through process control, the staff will accept the final decision easier even though the result is not what they expected.

Also, to give explanations for the outcomes, Cathay can provide evidence on how the company determines employees’ workload. If the crews find that the company is using the same method on determining their workload, it would reduce their feeling of being unfairly treated. As a result, it can increase the employee engagement.

Secondly, in order to move the staff from natural to satisfaction, managers of Cathay Pacific should provide subordinates with motivators. Motivators include something intrinsic like sense of achievement and responsibilities. By providing them with motivators, managers can make staff feeling like the organization is treasuring their effort. It helps to increase the sense of belonging of the staff. Therefore, staff would work harder and increase their satisfaction if they perceived the organizational support.

Thirdly, to reduce the absenteeism Cathay can make the staff emotionally attach to the company. By increasing the affective commitment of the ground staff, it can also raise their organizational commitment to the company. For example, Cathay can set up a department to collect the opinion and complains from the ground crews. By adopting this policy, employees will feel that Cathay is care about their needs and wants. Therefore, the perceived organizational support of the ground staff would increase, which follow by a better performance of the staff.

Finally, to turn the resistance to change to be functional and help the company becoming more effective and efficient, Cathay Pacific should let the crews to have debate. Through debate, which is some kind of communication, management of Cathay could understand more about the front line staff. Also, management can share the situation of the company with the staff and try to come up an agreement that is best for all parties with the staff.

Alternative solution for problem 2

Firstly, Cathay Pacific should review their employees’ outcomes-to-inputs rations. The company should restore the ration so that employees would feel they are being treated fairly. Moreover, if the O/I ratio comparing to other company of the industry is indifferent, the company can explain the reasons of reducing the room size and making frequent arrangement of overtime work to the staff. With enough communication, employees would increase the perceived organizational support. Hence, the employees believe the company values their contribution and their well being, thereby enhance the job satisfaction of the employees.

Secondly, to solve the conflict problem, the intentions of the company should be decided first. It depends on the cooperativeness and assertiveness that Cathay wants to attempt. However, the best way to handle the conflict is collaborating, which is both parties desire to satisfy the concerns of one another. This means the ground crews need to understand the difficulty their company faced when many of them did not go to work simultaneously. Meanwhile, Cathay should recognize that heavy workloads arise among its employees, and certain conflict management techniques have to be used. For instance, expanding human resources can help to solve the problem. Adding more ground crews to serve customers can divide the amount of work of the present customer service officers.

Consequently, customer’s satisfaction and loyalty will be increased if the frontline employees are enthusiasm for their job. The satisfied grew will be more friendly, upbeat and responsive which the customers appreciate. Also, it gives positive customer outcomes that may increase the profit of the company too. In the future, it has a positive effect towards the company.