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Managing People: The Case of Virgin Atlantic Report


Introduction

The aviation industry has emerged as one of the most dynamic and fastest growing sectors of the global economy. This rapid growth has brought forth both opportunities and challenges.

On the one hand, the increasing demand for air transport has enabled this industry to remain productive even in the face of financial uncertainty (Boxall & Purcell 2012).

On the other hand, the threat of new entrants (particularly the low-cost airliners) has intensified completion (Balmforth 2009). As such, the momentum of change and the shifting landscape has increased the need for a new generation of leaders (Bratton & Good 2012).

One of the challenges that the airline CEO faces now is adopting strategic practices that will facilitate talent management.

Virgin Atlantic is one of the most progressive airliners that have maintained their competitive edge despite the turbulences in the aviation industry. The company has experienced unprecedented growth over the years by expanding into various global destinations.

Virgin Atlantic stands out as one of the most successful companies in the United Kingdom in terms of market value and competiveness. The company’s success story means that it has adopted sound human resource practices to sustain its growth (Balmforth 2009).

Bakker and Schaufeli (2008) have asserted that the human resource function plays a significant role in enhancing productivity, which translates into profitability.

This report will review the human resources practices that Virgin Atlantic has adopted over the years to maintain its competitiveness.

The report will emphasize the role of employee involvement and engagement. In addition, the ensuing discussions will also analyse the leadership styles that are effective in encouraging employee involvement and engagement in the company.

Strategic Human Resource Management (SHRM) has increasing become a norm in HRM practices. This report will also analyse the role of SHRM with particular reference to the delegation of HR functions to the line managers. Finally, the analysis will provide recommendations for enhancing the current HR practices.

Employee Engagement and Involvement

The airline industry is safety-sensitive, extremely competitive and technology –intensive. The combination of these aspects has critical implications for players in the sector in relation to organizational culture, strategy and management.

The traditional top-down model of governance, operations and policy is increasingly becoming archaic and inappropriate (McLeod & Clarke 2009). The high knowledge base that characterises this service market calls for flexible and transformational leadership.

In addition, the trend of globalisation has also necessitated the development of diversity policies to provide equal employment opportunities (Frees 2008). The HRM function is now imperative in selecting and retaining a workforce that meets the changing demands of customers (Armstrong & Taylor 2014).

The threat of new entrants, coupled with the rising costs of fuel and operations has increased competition in the airline industry. Consequently, some airliners have recorded massive losses due to poor performance.

The affected companies may recover, stagnate, or close down depending on the strategy adopted in such tough situations (Getenby et al. 2009). Virgin Atlantic has also encountered these challenges although the company has remained productive.

Conversely, the company should enhance its employee involvement and engagement practices to maintain a comparative and competitive advantage. This goal is essential considering the stiff competition from Asian and Middle East-based airliners (Balmforth 2009).

Employee engagement has moved to the forefront as one of the most viable HRM practices. Nonetheless, there is no consensus on a single definition of employee engagement (McLeod & Clarke 2009).

Firstly, Markos and Sridevi (2010) have defined employee engagement as the ability and willingness of the employees to support the realisation of the organizational goals.

Secondly, Frees (2008) conceptualises this concept as the active involvement in work-related tasks with passion and enthusiasm.

Thirdly, Endres and Mancheno-Smoak (2008) have hypothesised employee engagement in terms of employees’ perceptions and values. The common theme of these multiple definitions is the two-way relationships between the employers and their employees (Frees 2008).

The divergent views in the HR discourses do not demean the value of employee engagement. On the contrary, all HR managers concede that employee engagement generates positive organizational outcomes (Daniels, Davis & Shipton 2008).

The employees engaged and involved in decision-making processes are more productive than those who are not (Markos & Sridevi 2010). Armstrong and Taylor (2014) found out that employee engagement reduced the rate of turnover and absenteeism significantly.

Further, Frees (2008) has demonstrated that enhances the quality of customer service. The ongoing advances in technology have laid the foundation of innovation. Bakker and Schaufeli (2008) have argued that employee engagement increases the level of satisfaction, which is a prerequisite of innovative behaviour.

The primary concern is that the majority of companies (if not all) do not encourage employee engagement. MacLeod and Clarke (2009) underscored the critical role of an engaged workforce in both individual well-being and organisational success.

Conversely, Gatenby et al. (2009) have found out that organization and companies in the UK do not value employee engagement. The principal concern is that HR consultants and professionals have limited knowledge about the application of employee engagement.

According to MacLeod and Clarke, three aspects underpin the concept of employee engagement. These issues include the commitment to organizational values and goals, motivation and personal development.

Virgin Atlantic should promote employee engagement in various ways. First, the airliner should encourage an entrepreneurial culture within its system. The increasing trend towards air travel has presented growth opportunities. One area that the management should focus on is the promotion of personalised services.

An entrepreneurial environment will allow performing employees to recommend new starters for the company (Frees 2008). For example, the flight attendants can participate in the development of in-flight protocols.

Bakker and Schaufeli (2008) have argued that an entrepreneurial culture motivates the employees to make real contributions to organizational growth, in addition to influencing the strategic direction.

Second, the competitive business environment inherent in the aviation industry calls for more productivity and efficiency than before.

Although the unprecedented advances in technology will revolutionise the service market, they demand employees who posses superior professional and technical skills (Endres & Mancheno-Smoak 2008).

The CEOs cannot manage the highly knowledge-based workforce using the outdated system of totalitarian management. By contrast, these individuals expect a high level of job satisfaction, motivation and operational autonomy (Markos & Sridevi 2010).

In essence, Frees (2008) has noted that the current management practices are shifting focus to the employees. Virgin Atlantic should promote employee engagement by involving them in decision-making processes.

Third, Virgin Atlantic should develop a two-way communication to enhance employee engagement. The aviation industry is dynamic and fluid considering the ongoing advances in technology and consumer demands (Balmforth 2009).

As such, Virgin Atlantic will have to implement change progressively and continuously to adapt to both internal and external pressures (McLeod & Clarke 2009).

Effectual change management requires the active involvement of the employees in making strategic decisions from planning to implementation (Armstrong & Taylor 2014).

The Virgin Atlantic top management should adopt a consistent and clear communication of the company’s strategic direction. This strategy should also include the role of the employees in bringing this goal to fruition.

Both the HR managers and employees recognise the fact that effectual communication can have a revolutionary and dramatic effect on organizational performance and productivity (Bakker & Schaufeli 2008).

Markos and Srivedi (2010) have asserted that interactions within the organization influence the direction of all strategic decisions. Effective communication is especially crucial when planning and implementing changes (Boxall & Purcell 2012).

Virgin Atlantic should develop systems that enhance internal communication between executives and the employees. These initiatives should pay more attention on the input of junior staff. The free flow of information and mutual trust will help the company to implement change.

Fourth, Virgin Atlantic should establish a robust performance management system of providing feedback. Change is a continuous process that mandates constant monitoring and evaluation to identify gaps and opportunities (Frees 2008).

The company should conduct regular surveys to determine the factors that drive engagement. Endres and Mancheno-Smoak (2008) have shown that this activity enables the HR and line managers to concentrate on the aspects of engagement that have a fundamental influence on the employees.

The top management should use the evidence from the surveys to develop SMART (Specific-Measurable-Accountable-Realistic-Time bound) action-oriented plans.

Further, it is essential for the top management to demonstrate their commitment to employee engagement. Gonos and Gallo (2013) have opined that the followers are often sceptical when the top management does not believe in employee engagement.

In fact, Frees (2008) has found out the actions taken by leaders influence the direction of their followers. For example, the Virgin Atlantic CEO should lead by example by owning the process before passing it down to the low-level managers and employees.

According to Markos and Sridevi (2010), lip services that are not commensurate with commitment portray employee engagement as a corporate or HR fad. Thus, the top management of Virgin Atlantic should match their words with actions.

Strategic Human Resource Management

The HR function is increasingly becoming an integrated component of strategic thinking considering the role that employees play in the realization of organizational goals (Henderson 2011).

The role of employees in supporting the achievement of strategic objectives has supported the introduction and development of the Strategic Human Resource Management (SHRM).

SHRM evolved in the 1990s to facilitate the promotion of a value-driven, integrative, and proactive approach to human resource management (Reyner 2009). The primary goal of SHRM is to assimilate HR practices into the organizational strategy.

Thus, SHRM is crucial to facilitate the active participation of employees in making strategic decisions (Henderson 2011).

Virgin Atlantic faces the challenge of making strategic decisions just like the other players in the industry. Most airliners are now outsourcing some of the previously held in-house functions to respond adequately to industry fluctuations (Wang & Wang 2015).

One of these approaches has been the adoption of the Shared Services approach. This strategic decision has helped Virgin Atlantic to expand its services to the international markets (Balmforth 2009).

Conversely, Bakker and Schaufeli (2008) have found out that most companies do not include the HR functions in the development of their strategic plans.

Consequently, the employees are often dissatisfied or resist change because they do not own the strategic processes (Ramphal 2011). The SHRM should assume a crucial role in employee engagement and participation processes.

Mergers and acquisitions (M&A) have become prevalent in the aviation and other industries. The essence of M&A is to enhance productivity and efficiency by rationalising the use of scarce resources (Claydon & Beardwell 2007).

Virgin Atlantic merged with Delta Airlines in 2013 as a means of reducing costs and enhancing the delivery of transatlantic services. The transatlantic partnership was critical to counter the competition from its fiercest rival, the British Airways (Gregory 2014).

Despite its benefits, this merger has brought to the limelight practical challenges. For instance, Delta may decide to realign the HR function since it will own 49% of Virgin Atlantic’s shares. Such an action might result into employee rationalisation to reduce costs.

The scenario presented above highlights the significance of adopting the SHRM by Virgin Atlantic. The elemental concern is that the failure to adopt efficient HR practices during the development of Shared Services and M&A contributes to failure (Creasy, Stull & Peck 2009).

The primary function of the HR managers is to facilitate employee engagement and participation during the change processes (Denison, Adkins & Guidroz 2011).

According to Rayner (2009), the achievement of this goal necessitates the development of HR systems that are both adaptable and compatible with the strategic choices.

Virgin Atlantic continues to undergo significant transformations to remain productive and competitive. As such, it is essential for the company to increase the scope of SHRM practices.

The adoption of the SHRM function will require the inclusion and involvement of HR managers in strategic decision-making processes. The HR managers should not be bystanders but rather equal partners alongside the other senior managers (Creasy et al. 2009).

Denison et al. (2011) have found out that such opportunities ensure that the HR managers present the employees’ concerns from the outset. The misrepresentation of employees amounts to a violation of labour laws.

Virgin Atlantic will avoid the consequences of litigation if it addresses the demands of workers before implementing strategic decisions. One of the areas that the company should optimise on is the delegation of some of the HR practices to the line managers.

The line managers have a frequent and direct contact with employees. As such, these employees are more conversant with the needs of these employees than the senior HR managers do (Purcell & Hutchinson 2007).

Some of the functions of the line managers include interviewing prospective candidates and making recommendations for salary increments (Frees 2008). Nonetheless, the company should only assign the HR duties to the line managers who have appropriate skills and competencies.

The senior HR managers should form strategic partnerships with the line managers. This collaboration will facilitate the provision of resources and training to ensure that the HR practices are in line with the established policies (McLeod & Clarke 2009).

Another crucial component of SHRM that Virgin Atlantic should consider is the development of an innovative selection and recruitment system. The competitive and dynamic nature of the airline industry mandates the identification of appropriate talents to realise organisational goals.

A rigorous recruitment and selection system creates a sense of high expectations about performance (Marchington & Wilkinson 2012). The mismatch between organisational demands and personal capabilities increases the risk of poor performance (McLeod & Clarke 2009).

The company should complement these efforts by developing comprehensive career development and training programmes. For instance, the pilots should undergo in-house training regularly to update their skills of using modern technologies.

Finally, the trend of globalisation has diversified global communities. This diversity also manifests in HR practices (Markos & Sridevi 2010). Virgin Atlantic must adopt and implement inclusion policies to provide equal employment opportunities by promoting a distinctive corporate culture.

An organizational culture that emphasises mutual respect will enable the company to achieve its strategic goals (Frees 2008). Such customs will make the company attractive to both customers and prospective employees from diverse cultural backgrounds.

Markos & Sridevi (2010) have indicated that companies improve their performance and productivity when they harmonise organizational cultures. Bakker and Schaufeli (2008) have noted that the poor management of diverse cultures causes conflict.

Personal Reflections on Effective Leadership Styles

The preceding sections have highlighted the significance of employee engagement and strategic human resource management (SHRM). The common theme between these two components is the employer-employee relationships, particularly the interaction between managers and the junior staff.

These aspects then bring to the forefront the issue of leadership. The volatility and uncertainty in the aviation industry call for a new style of leadership to facilitate innovative thinking and change management.

The human resource executives should assume a leading role in developing the required generation of leaders. The starting point will entail the alignment of strategic priorities with the future demands for skilled talent.

Employee engagement is one of the primary functions of change management. It is imperative to reiterate the fact that the airline industry will continue to encounter massive transformations. Conversely, the successful implementation of change will require leaders who are both transformative and visionary (Marquez 2007).

Transformational leadership is central in management discourses and is the most applied style in modern society. A transformational leader influences the actions of followers by transforming their attitudes, perceptions, and beliefs about change (Gonos & Gallo 2013).

One of the major challenges faced by many organizations is achieving constant productivity and profitability. A transformational leader identifies the need for change and rallies followers towards realizing change (Alkahtani, Abu-Jared & Suleiman 2010).

The critical pillars of transformational leadership are visionary and coaching leadership styles (Chen & Chen 2008). Virgin Atlantic will continue to experience continuous change. Nonetheless, not all the employees will be receptive to the change initiatives.

The company CEO and other senior managers should adopt the transformational leadership style to influence planning and implementation processes efficiently. These leaders should share their visions and goals with the employees through consultations and active engagement.

According to Gonos and Gallo (2013), transformational and visionary leaders do not impose change on their followers.

The rapid transformations and advances in technology necessitate the development of continuous education programmes for the employees. These initiatives will ensure that the employees have the requisite skills and competencies that are in tandem with modern practices (Bakker & Schaufeli 2008).

The changing landscape of the airline industry has created the urgency for transformation. The top management of Virgin Atlantic should coach and train the employees to enhance productivity and profitability.

The company cannot compete favourably in the volatile market unless it has highly skilled personnel. Marquez (2007) has affirmed that a transformative and visionary leader does not give orders and wait for progress reports. By contrast, such leaders are part of the operations team and lead by example (Purcell & Hutchinson 2007).

Leadership and management are common terms in academic and business discourses that generate divergent viewpoints. These discussions often centre on the perceived differences and similarities between the two concepts (Gonos & Gallo 2013).

Several definitions exist regarding theories, styles and attributes of leadership and management. Both leadership and management emphasize the coordination of the HR functions (Chen & Chen 2008). The only difference lies in the manner in the coordination processed.

While managers control the realisation of organizational goals, leaders influence people to embrace change (Alkahtani, Abu-Jared & Suleiman 2010). The Virgin Atlantic CEO and other line managers should strike a balance between the two to achieve optimal outcomes.

Conclusion

Employee engagement has moved to the forefront as one of the most viable HRM practices. Nonetheless, there is no consensus on a single definition of employee engagement. Despite these contentions, employee management is a critical component of human resource management.

The concept of employee engagement is particularly crucial in the airline industry considering the dynamic and competitive nature of this service sector. Virgin Atlantic is one of the prominent airliners in the UK and across the globe.

Although the company has remained productive and competitive, the external threats will most likely challenge this hegemony. As such, the company should adopt a strategic plan to remain afloat in a highly competitive market place.

Virgin Atlantic should encourage employee engagement practices by fostering effective communication and interactions. Conversely, employee engagement is a complex and long-term process.

The company will achieve this goal if it adopts broad cultural and organizational strategies that involves employees at all the organizational levels. The company should align these initiatives with the human resource practices.

Change is inevitable in the aviation industry but the employees should be part of the transformations. The company CEO and managers should foster transformational leadership styles to influence the employees to adapt to the change successfully.

In conclusion, collaboration, strong communication and mutual trust should form the basis for implementing employee engagement.

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IvyPanda. 2019. "Managing People: The Case of Virgin Atlantic." December 24, 2019. https://ivypanda.com/essays/managing-people-the-case-of-virgin-atlantic/.

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