This report deals with employee relations at British Airways and addresses the following issues in general; the main contextual factors that have shaped employee relations at British Airways, ways in which changes in employee relations at BA mirrored wider changes in employee relations within in the UK, Identifies the shifts in the management style of employee relations at BA and their rationale. Lastly it critically discusses the consequences of all these changes.
The main contextual factors that have shaped employee relations at British Airways include the initial formation process in 1970s as two different companies having different cultures and traditions that were never integrated fully into one that is coherent. This resulted to a company with militaristic and bureaucratic culture. The perception of customers was generally poor and epithet. In addition, it was faced with pressure from the operators that were operating at a lower price on prized transatlantic routes. This made the company to respond by cutting the costs, with staff cutbacks. The cutbacks were achieved by the help of generous redundancy packages, however, did very little to alleviate deeper malaise afflicting the work force. The exercise of cutting the cost, though probably important, it really achieved little, with limited improvements in productivity and efficiency.
The pressure that the government mounted on it, as to start preparing for privatization, the company began to realize that the changes that are required in future lies in the concentration of securing employees 'positive support and involvement' and relating in a culture that is perceived to be deep rooted in an organization. British Airways knew that that was not going to be easy, as airlines owned by public had stronger unions and the practices that were embedded, and the employment relations. In respect to these, British airways were a bit different from the rest of the flag carriers.
The issue of reconnecting with the customers was another context. By 1980s, BA needed to re-connect with customers and this called for a different staff orientation from its staff. This resulted to a renewed focus on the involvement of employees, which then gave raise to a number of initiatives that were directed at fostering a more dynamic, customer-centered and service driven culture. The emphasis that was placed on the contact of customers by the staff through a number of initiatives starting with placing people first through a day in the life in mid 1980s, that underlined the collaborative working advantage. This led to the comprehensive training and re-education programs that ended up changing the management style and led to the move towards an organization structure that is more flexible. Though is much easier dismissing these developments, and pass them just as gimmicks, BA became a role model in the management press and culture change in 1980s. The company's reputation with customers also improved hence improving profits. The combination of factors revealed in 1990s under pressure of recession and the latterly -de-regulation of European airline industry. But it didn't take much tie for the competitors to adapt the BA customer concentration on customer service, and like BA , increasingly came to concentrate this on just certain market segments-business, long haul and first class operations.
The changes mirrored in employee relations at BA, mirrored wider changes in employee relations within in the UK; U.K has been highly unionized at one point recognizing 16different trade unions, among them is British Airlines Pilots Association (BALPA), which is a union with certain strategic influence within this airline industry. Its development was just to capitalize on deregulation between European Union and the U.S. The existence of a well established industry-wide collective bargaining framework in the U.K., acts as negotiating body on employee's side. Collective bargaining has been complex, fragmented and sectional, and the management's approach to employment relations within the UK.' pragmatic and opportunistic. The new strategic focus of the firm By 1980s meant that the approach had to change in the U.K. however firms like BA were much careful in maintaining relationships with the unions a long side an approach of culturing change that was more individualistic. In effect the companies then operated dual arrangements for the period; communicating and consulting with unions and staff, this approach that in current times continues largely. The period provided. Evidence of firms trying to bypass the union-based channels of communications, that were established long a go. In 1990s much of the UK's employment relations strategy concentrated on the reorganization of bargaining that were collective as mirrored by BA's strategies. In 1996, NJCCAT was abolished, however, national level bargaining through five different National Sector Panels for Pilots and management among others, remained, though redefined and reinforced.
Unions have been negotiating new agreements and partnership, for instance BALPA negotiated a dispute between BA and the pilots. This has been making companies to seek more collaborative approach with other unions. However, throughout the periods, employment relations difficulties have never remained far from the surfaces. There was and continues be tensions between exhortations to improved services of customers on one hand and on the other hand, cutting costs through outsourcing and enforced bouts of redundancies. The climate engendered by the latter, has made it very difficult for the deliverance of real benefits to customers that firms claim they are in business to provide.
Over other staff issues, problems have also surfaced. In 1990s, there disputes occurred involving baggage handlers, cabin crew among others and more recently , problems have occurred due to the introduction of swipe card clocking-in system, which have cost companies not only BA, large sums of money. There has been to strikes over pay and standing concerns over levels of staffing in UK over many years since 2004.
The unions' positions within BA has given a sign that, firms have continuously tried to secure major changes through negotiation process. Though this has been difficult and protracted, but it has ultimately resulted to a number of cases to far-reaching changes in the practise of employment.
There have been different shifts in the management style of employee relations at BA and each one of it has its own rationale. Although there have been efforts in some cases, due to them, the BA'S employment relations retain potentiality for serious disruption. In recent years management styles have toughened in the context of a more operating environment that is competitive. The company has renewed its focus on cost cutting and route rationalization. The recent allegations that surround excessive drinking along side continuing threads of industrial actions remain symptoms of low morale in organizations. It is significant to point out that these problems to BA are unique.
The issue of wholesale contracting out of cabin crews has not been really an option where high-levels of in-house training and employee loyalty happen to be integral part of the experience of customer service.
The issue of opening skies between Europe and U.S came into force in 2008. Under the policy any airline of EU can from any EU airport fly to U.S not just from their own countries. The problem with this is that, some routes have now been opened up for competition. This has raised some issues for BA. The Heathrow route to New York is regarded to as most lucrative route in global aviation. It has been estimated that, impacts of BA profits and profit margin could be reasonable. Given higher costs of operating out of Heathrow BA is looking forward in citing a number of transatlantic flights to operate out of the EU airports. In that connection, Paris and Brussels have been identified in short-term, while Milan and Frankfurt in long-term. Several of these uses higher costs but BA wish to use lower costs crews that will operate effectively outside their existing arrangements with staff that is UK-based. Certain issues concern airline pilots. Though BALPA has accepted lower salaries on the basis that it is a new airline starting up, but they have announced plans to go on strike.
Pension issues; the contention issues within airline concerns pension matters, BA announced in 2003 that, in light of a major deficit in pension, it would close its final salary scheme to all employees that are still new. Concerning this, BALPA union that has over 2500 members at BA threatens to strike. The strike is estimated to cost BA around $80 millions. The scheme will make some members face 36% cut in their eventual pension.
The introduction of future and terminal 5; of all the issues for BA, the company has placed much of its reputation in the introduction of Terminal 5. This was to bring radical changes in the working practices. In spite of reasonable changes in employment relation in institution in the firm, and in practices after negotiated agreements with unions, the high view held by top management in the company is that the practices that are outdated remain and these will never be tolerated in the environment that Terminal 5 promises. The changes that were brought by Walsh's predecessor were significant. Notably, they lead to systematic reduction in workforce and further reduction as agreed to follow. These assisted in returning the company to profitability.
The consequences that BA might face after the implementation of these changes are many. Though the shifts in management enhanced competitiveness of BA, this does not mean automatically the company is free from problems and issues. The management jus imposed more comprehensive human resource management through staff development initiatives, contrary to these, not all employees were able to meet the objectives of these initiatives, hence the consequences encountered after management change are with regard to some employees. This consequence was attributed to behaviours of some workers which caused internal problems to the industry operations. Another consequence is the libel case of 1993. This consequence gained negative effect to company. In addition, the initiatives in terms of customer relationships also faced a problem in the year 1997 as far as worker relations are concerned. The problem lies on the management inability to foresee and able to predict some of the problems upon the change management.
The internal consequence in accordance with employee relation also comes up when the company finalizes cost cutting approach within the company. This program resulted to worries by some cabin crew concerning the financial loss and made employees to organize strikes and rallies. The staff will join together in spite of intimidation of managers including threats for the blockage of the promotion, dismissal or even imprisonment.
Another consequence will be in terms of increasing customer dissatisfaction for the services offered by BA. Due to the inability of the management team in handling employees effectively, and show honesty and commitment, more internal Human resource problems will a raise. In return, this will affect the overall business operations making the business loss reputation and profits among its target markets.
Though had resigned, the manger who repealed him also encountered a lot of challenges and difficulties that are linked to the continuing process of downsizing as a cost cutting strategy while improving morale. The company had already faced the problems due to the introduction of electronic swipe cards for the employees to clock on and the resultant alterations to the rosters. Due to this unofficial stoppages to around 500 flights were being cancelled. This raised a lot of issues and consequences within the airline industry and BA's image had been sacralised due to these underlying problems and conflicts.