Introduction
Generally, human beings are social creatures and when their ability to interact and participate in a country as citizens is hindered, they might be less productive to the nation. In most cases, factors such as low income contribute to the inability to have better living standards among families. The need to curb and reduce the impact of poverty and growing inequality in New Zealand, the government introduced the living wage (LW) to enable the citizens to have a supplemental income to cater to their basic needs. The Living Wage Aotearoa New Zealand defined the concept of LW as the amount of earnings required by employees and their households to achieve the necessities of life. According to the movement, when workers have access to LW, the ability to participate in society will increase making them live with dignity. Following the move to adopt either LW or minimum wage, employers should evaluate several factors to enable them to determine the best cause of action that would bring mutual benefit to employees and the organization.
Discussion
Auckland Airport is one of the renowned airline operators in NZ managing a number of domestic and international flights. The company has employed many workers including crew members, aircraft engineers, and other relevant personnel to facilitate the business operations of the company. The employees are entitled to wages paid by the company to enable them to provide for themselves and their family members. In NZ, the government is in charge of setting the standard rate for national minimum wage (NMW) which is calculated per hour (King & Waldegrave, 2012). The difference between LW and NMW is that companies are required to pay NMW while LW is an informal standard that allows employers to understand the amount of income workers should earn per hour to enhance their social lives. To effectively comprehend whether to implement the LW program in the corporation, Auckland Airport should consider the following factors business strategy and reward, motivation and reward, and data and information (Heery et al., 2020). When the management effectively develops a proper insight into the mentioned aspects, it will be easier for the business organization to decide on adopting LW rather than the NMW.
Auckland Airport has employed a significant operation strategy that allows it to invest for future growth. The management board has planned significantly to increase the capacity and passenger experience in the coming years. The approach is aimed at attracting several customers to use the airport and its facilities in the country. Auckland Airport has designated a number of domestic terminals and those for international travelers. It has further increased its taxiway to enable the airport to accommodate most of its requirements. The organization has further created a hub for Australasia and NZ’s best business location. The target of the corporation is to significantly increase the number of local and international passengers using the airport for their business purposes. This technique is aimed at raising the market share for the company to make it earn more revenue. Currently, consumers are influenced by the nature of services they receive and when the organization is offering the best accommodation in the industry, they are more likely to have an influx of clients. By creating a customer engagement strategy, the airline promotes smooth interactions and overall activities in the airport especially in all terminals to improve passengers’ experience.
The key reward of the customer engagement strategy being used by the corporation is increasing the relationship between the business organization and its customers. When passengers are satisfied with airport services, especially at terminals and lounges, they are motivated to come and use the services in the future. In other words, the approach enables Auckland to have a large customer base necessary for high revenue. In addition, the technique promotes customer loyalty which is essential for maintaining and even receiving referrals from previously served customers. However, despite the effectiveness of the approach, several risks are associated with the business plan utilized by the company. For instance, the nature of products plays a vital role in influencing passengers. When the airline does not offer an adequate variety of services, they are more likely to face reducing the number of travelers. Therefore, the management must consider and evaluate the array of products that when offered will attract and increase customers’ satisfaction.
The other vital aspect that Auckland airport must evaluate is the aspect of employee motivation and the reward the company will gain in return. Generally, workers become more productive when they feel inspired and supported by their employers. There are several approaches that a company can use to motivate the employees that include giving healthcare coverage, financial benefits, and even promotions. However, most firms argue adopting the LW approach will affect the overall business turnover which might lower their productivity in the market (Brydges, 2021). Generally, when an employee has access to basic social needs, they become active and can participate effectively in their activities. If LW is given to a worker, their reward will increase, and thus they will have the ability to provide for their needs and pay relevant bills (Dugovicova, 2019). The surge has the potential of motivating workers to deliver the best services for the company which in return raises the overall growth of the business organization.
There are several challenges that hinder the effective adoption of LW in business organizations. For instance, employees do not reside in the same place and therefore it becomes a change to evaluate and estimate the value of rent. During the determination of LW, it is difficult to have a standard figure that covers the workers from regions paying low rent and those from areas that have higher rates. Similarly, to calculate the LW figure, issues such as childcare support, and tax rates must be considered however, these aspects are more likely to change making it difficult to have a standard rate. In addition, the LW is based on the concept of two parents and two children but most of the employees have large family sizes thus causing complications. The process of calculating the various elements such as the cost of food per household and other determinants makes the process complex for most employers to redesign. Moreover, LW has an impact on companies’ budgets therefore paying employees more might force the firm to stop recruiting other staff members. Furthermore, it is a challenge to consider low-skilled workers their value might not meet the level of wages a company may offer after adopting the LW.
In addition, for Auckland Airport Corporation to make an effective decision on whether to adopt the LW over NMW, the management should consider utilizing the available data and information about their employees. The company should use both HR analytics and ‘big data’ to obtain proper insight into the human resource practices that can influence their perception of the choices (Sousa et al., 2019). Auckland business organizations should rely on the HR data collected and analyzed for a better workforce. Since the LW has the potential of increasing the employees’ motivation and lowering turnover, the corporation should examine the information about the rate of turnover to determine possible causes. They can use the data to explore the trends and correlate the possible factors influencing employee quitting (Vargas et al., 2018). Furthermore, Auckland can utilize HR analytics during the recruitment period to evaluate and determine candidates that are qualified and their valuable input is equivalent to the LW the firm would spend on them. Having such information at hand, the business organization will comprehend the value it will derive from either adopting LW rather than NMW hence making it easier for the employer to decide.
Similarly, considering the use of ‘big data’ will be significant for Auckland airport because the management will have the ability to examine arrays of issues that are directly related to the employees. For instance, its transactions, and other related activities can influence their decisions (Mikalef et al., 2019). ‘Big data’ can, therefore, be used by the company to harness possible opportunities and increase operational efficiency. For instance, the information from big data can be utilized to improve the compensation and training of recruits (Hamilton & Sodeman, 2020). When employers have insight into the cost and expenditure to be incurred, it is easier to choose whether to implement the LW because all the costs and benefits are well evaluated.
To make the decision of whether to implement the LW in the organization; Auckland must have the following data and information which include employee turnover rate, recruitment expenditure, employee wages, and workers’ rewards. Other useful details are age, income, tax, demographic, performance, absenteeism, and employee satisfaction. These data are essential in determining the progress and status of the organization. When examined according, they have the ability to provide better insight into how the company will be if it adopts the LW.
To evaluate the Reward System, data and information provide a reliable ground that managers can use to determine the effectiveness of the incentive. For instance, the management team can examine the number trail to examine the kind of benefit that workers value. The information will provide insight into how frequently the employees use it hence making it easier to measure. In addition, HR professionals can use the survey findings to determine the responses of workers to changes in the reward system.
Conclusion
Even though the Living Wage Aotearoa New Zealand requires corporations to adopt the LW system, most companies are finding challenging to implement the practice. The fear of reduced profits and excessive expenditure is significantly hindering employers from choosing the LW approach. However, in order for Auckland airport to make an effective decision on whether to implement LW, it is necessary for the management body to consider factors such as employee motivation, its business strategy, and the available data and information. When the mentioned aspects are fully explored, the company will be able to have the proper insight into the impacts it will have upon opting to implement the LW system. It is, therefore, fundamental for the business organization to scrutinize the HR analytics and ‘big data’ available to facilitate their decision about LW.
References
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