Term Paper, 2015
12 Pages, Grade: A
COMPARISON BETWEEN SA AND AET WITH THE RESPECT TO HR ISSUES
INTERNALLY CONSISTENT IN HR BETWEEN SA AND AET
This report highlighted the continuous success of both companies (Southwest Airlines, Dallas, TX, USA and Airport Express Train, Oslo, Norway). This report also explored the internal consistent in Human Resources (HR) of both companies and how they achieved their continuous success and finally reached in the apex through high performances work system (HPWS) theory into their supportive practices. In addition, both companies were also achieved competitive advantages through their strategic HR practice for instances concentration on continuous training, huge number of participants, hiring through the special selection cycle, interior promotion, flexible working hours and job security.
Nevertheless, both companies followed different approaches for examples size of the company, age, ownership, competitive strategy, labour law and national context, while both of the companies were succeed through the application of high performance work system theory.
Overall, the both Southwest Airlines (SA) and Airport Express Train (AET) companies are recommended to follow the chain of impact framework and use HPWS model in internal consistent in HRM strategic practice what would consider them future success.
This report will critically examine the case study (“comparison of internal consistent human resources between Airport Express Train, Oslo, Norway and Southwest Airline, Dallas, TX, USA”) purported by Kuvaas and Dysvik (2012). This report will also evaluate about their continuous success of both SA and AET companies and how they applied high performance work system (HPWS) theory into their practice.
In addition, this report will also explore the key similarities and dissimilarities between SA and AET companies based on their internal consistent in human resource management (HRM) strategic system for instances age, size of the companies, competitive strategy, ownership, labour law and national context. HPWS is really crucial to develop any kinds of business companies. Similarly, SA and AET applied HPWS to continue their business successfully (Kuvaas and Dysvik, 2012).
Furthermore, Ramsay, Scholarios and Harley (2000) identified that HPWS particularly depends on the national and organisational context. They also reported that HPWS is literally competitive to support and develop the organisation through maximising their overall quality. Moreover, HPWS is also linked with the selection and promotion decisions to validate individual company competency model. Likewise, HPWS is also developing strategic model effectively to support and enhance the quality of the organisation through high performing of their employee. According to Huczynski and Buchanan (2013), HRM usually introduces and implements new policies to improve the quality of working condition and assure the engagement of the employees in the companies through the, high commitment work system (HCWS) and HPWS.
Moreover, Pfeffer (1998) outlined the following seven characteristics (shown in figure 1) of HPWS what is particularly linked with internal consistent in HR. He also recognised that the following seven dimensions act as the key points making profit and success of the companies. These seven dimensions are co-operative each other to support organisation and their development, while some managers argued this in the initial stage. According to evidence, however these seven key points were identified as crucial points; especially employment security was identified as a cornerstone rather than other dimensions to achieve competitive advantages of the company (Pfeffer, 1998).
Figure 1: Seven Characteristics of HPWS (Pfeffer, 1998)
illustration not visible in this excerpt
This part of the report will critically evaluate the comparison between both companies (SA and AET) and also examine their internal consistent in HR and how they achieved their business successful with the application of HPSW theory through various model.
Kuvaas and Dysvik (2012) identified the basic difference between two totally different companies on the perspective of their internal consistent in HR for instances size and age of the companies, ownership, competitive strategy, labour law and national context.
The most significant similarities were found that both companies (SA and AET) were running travel industry and they tried to achieve their competitive advantages through their employee with the application of HPWS in their HR practices (Kuvaas and Dysvik, 2012). On the other hand, SA was quite bigger that AET based on size of the company and perspective of national and organisational context, SA was also different from AET as SA was American based airlines, while AET was Norway based railway service.
In addition, both companies tried to achieve their competitive advantages through HPWS, while their competitive strategies were absolutely different from each other. Low cost with the serving of better quality was the competitive strategy of SA, while high cost with much better quality service was the competitive strategy of AET. Though, both companies practiced HPWS to develop their business (Wright, Snell and Dyer, 2005).
Moreover, SA provided job security as a part of the HPWS in HR practice to achieve long term company benefit and to compete with any other counterpart company (Pfeffer, 1998). While, AET did not provide any formal job security to their employee as based on Norway national context every job is secure by the national labour law and they followed HPWS to achieve their success (Blanpain, 2008).
Figure 2: Human Resources Management cycle (Fombrun, Tichy and Devanna, 1984)
illustration not visible in this excerpt
Furthermore, the most common similarities of both companies are that SA and AET managed to appoint their employees through the following HRM practice cycle (figure 2) (Fombrun, Tichy and Devanna, 1984). It is also noted that performance is basically composed of the recruitment process, rewards, appraise and improve their human resources system (Fombrun, Tichy and Devanna, 1984).
Pfeffer (1998) outlined that both SA and AET followed HPSW to achieve their competitive advantages. SA maintained HPSW through their HR practices for instances employment security, training to their employee and retains those trained employee to compete other companies and keep in their success rate. In addition, Pettinger (1996) proposed that SA designed their competitive strategy along with HPWS where employee contributed huge to retain their success rate and customer satisfaction.
On the other hand, AET also maintained HPWS in their HR practice through the selective recruitment and training service. AET did not provide any job security, while job was secured based on national context (Blanpain, 2008). The internal consistent in HR was almost same between SA and AET to achieve their competitive advantage and AET maintained the seven dimensions of HPWS. In SA and AET companies, the internal consistent was aligned horizontally and competitive business strategy was aligned vertically to achieve competitive advantage (Pfeffer, 1998).
Barney (1991) suggested the following resource based view (RBV) model (figure 3) focused on strategic HRD to achieve competitive advantage. In addition, RBV explores the way of HR practice and making better strategic management in the business. The major four frameworks are value, rarity, inimitability and non-substitutability and these are cooperative each other during the business development.
Figure 3: Relationship between endowments, strategies and sustained competitive advantage (Resources based view) (Barney, 1991)
illustration not visible in this excerpt
These four points are resources of the company. Subsequently, these resources will go further steps until strategies where company use their internal consistent and competitive business strategy. Once company will sustain their competitive advantage, afterwards the performance of the company would be excellent. Similarly, SA was able to holding these capabilities and these capabilities allowed them sustain their competitive advantages.
Finally, SA performed excellent and delivered high quality service to their customer Barney (1991).
Furthermore, Guest (2006) proposed the following HPWS conceptual model (figure 4). The following HPWS conceptual model emphasised some of crucial dimensions of HRM and HPW and also specified the importance of recruitment process and training Skills, teamwork, job security, competence, opportunity and Motivation. Similarly, SA and AET maintained these dimensions to boost employee quality performance.
Figure 4: High Performance Working system model (Guest, 2006)
illustration not visible in this excerpt
Moreover, Pettinger (1996) reported that human resource strategy (HRS) is considered as inspiration to manage individual along with highly motivated to perform well in the company. In addition, Pettinger (1996) also explored that team working is absolutely influential to maintain HPWS in HR practice. Both companies were facilitated all the opportunity and finally employee also developed their skills and abilities through the training and development. Without practicing the following elements HPWS could be quite impossible. While, SA and AET followed the HPWS model and consequently their business was successful. However, SA and AET national context was not similar but their organisational context was almost (Pfeffer, 1998).
The report explored the comparison of internal consistent in HR between SA and AET companies based on their age, size, competitive strategy, labour law and national context. The report also outlined their successful stories through the application of HPWS in their HR practices. The both companies used HPWS tools throughout their business cycle to hold their continuous success where job security and selective hiring were the most crucial. SA and AET tried their best to give better service and value their customer as well as their own employee. In addition, both companies remarkably developed their business with continuous success through the application of HPWS. However, competitive strategy and context of SA and AET were not similar. SA achieved their competitive advantage through the RBV model, while AET used their internal consistent HRM strategy with both national and organisational context.
To conclude, actually there is no particular context can be able to make unique and success. Absolutely, HPWS and good HRM strategic practice can lead the business success. SA and AET both companies achieved their continuous success through HPWS and HRM strategic practice, while their context was not similar.
Before establishment of the company or any organisation, the most prerequisite condition is to regulate well suited HRM strategic practice through the setting up their internal consistent in HR based on the size of the company, age, competitive business strategy, partnership, demographic, economic, cultural, national context, and labour law perspective in the origin countries. In addition, need to consider narrowly global context as well.
In addition, Tamkin (2005) proposed the following flow diagram known as the chain of impact (figure 5) what could be the great recommendation to achieve competitive advantage of any ideal companies.
According to the flow diagram, capability of the company could be made from the two influential strategic parts for instance HR strategic practice sand psychological states. HR strategic practices include training, development, management, performance appraisal, autonomy, pay and benefit, health and safety, communication, skills and qualifications. These all points will combine with engagement and job satisfaction and able to make capable to the company.
Figure 5: The chain of Impact (Tamkin, 2005)
illustration not visible in this excerpt
Afterwards, company will run in the presence of activity and then productivity customer satisfaction and finally profit will distribute to all shareholders (Tamkin, 2005). SA and AET already exist in their successive stage. Subsequently, if they follow the recommended chain of impact model the company might keep them more upward position. The HR strategic practice and psychological states obviously will continue to make HPWS in the company and to achieve competitive advantages.
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