Advanced Human Resources Case Study:

Assessment Code: HMP1
Student Name: Mari K. Norris
Student ID: 000248937
Date: 5/7/2012
Mentor Name: Brianna Koucos

Between 1999 and 2004, I resided in Fairfield, CA and worked at an International Real Estate Company that gave me the opportunity to do a lot of traveling from the Bay Area, all over the US and Internationally. Prior to that, I had done quite a bit of traveling with my Mother, who believed that a well rounded child grew up with lots of different cultural experiences. As a young adult I loved to travel, but getting there was the part that I did not like. Airlines, with not much differentiation between each one, would crowd you into a plane like cattle. It never failed that the person in front of you would lay their seat back and you would have a complete stranger in your lap for a few hours or you would feel that you were so crowded in that you would have to try to make yourself as small as possible, just so that you did not get ran over by the refreshment cart or have the person next to you touch you for the whole flight. What was lacking, and still is in most cases is customer service and respect from the company for both their employees and their customers.

Because of that, you can imagine my elation in 2000 while traveling down Highway 101 in the Bay Area, to see a billboard for a new airline that believed in customer service. They stated that their planes had more legroom, that their people were friendlier and that each seat had its own TV. I was used to that kind of treatment being reserved for international flights that were over 10-12 hours long and those kind of tickets would be either first class or would cost an arm and a leg. The next part of the advertisement is what got me… “Low-cost, commuter airline”. I was intrigued and immediately decided to try out this airline on my next trip from San Francisco to Southern California.

It was everything I had hoped for. Leg room, easy check-in, friendly people and comfort. This was everything that Mr. David Neeleman, the founder of JetBlue, had in mind when he decided to create yet another low-cost airline. In a world where airlines would come and go, his vision is what created a company that would last. His vision would require a strong Human Resource person to assist him in overcoming the many pitfalls in the creation and operation of an airline. Mr. Neeleman found the right person when he decided to hire Ms. Ann Rhodes, the former VP of Human Resources for Southwest Air. She shared in Mr. Neelemans vision for a low-cost, customer oriented airline.

The challenges of Hiring

Ann Rhodes, the VP of Human Resources, had the challenge of navigating the hiring process for a company that was going to hire all over the United States, which made it that much more important for her to double check that they were adhering to the Various laws under the various Equal Employment laws. Better known as the EEOC, the Equal Employment Opportunity Commission came into existence under Title VII of the Civil Rights Act of 1964. With the creation and implementation of several anti-discriminatory laws, the EEOC provides US citizens with civil rights that strictly forbids discrimination of various protected classes, including; women, minorities and people with disabilities.

The three components of this law that would impact JetBlue’s hiring policies would be:

Age discrimination in Employment
As JetBlue began the process of acquiring talent, the focused on computer literacy could pose a barrier in age discrimination as they envisioned a “paperless” airline. The positions within the airline would require hiring a staff that was computer literate. In a world where computers had really just began to be a product in the home and baby-boomers would be the majority of the talent with extensive background, this could prove to be difficult. The idea of a “paperless” airline was visionary and would become difficult to not create age discrimination in their hiring practices, as many of the more seasoned workforce (baby-boomers age 40-65) had not used computers or rarely had the opportunity to use a computer.

The Civil Rights Act
Hiring on such a scale as would be needed to operate an airline all over the US, this would mean creating a Diversity Management Program. The need to create a working environment that was open and welcoming to a diverse workforce. The Civil Rights Act of 1964 or Title IIV states that unlawful employment practices include, “…(to) discriminate against any individual with respect to his compensation, Terms, conditions, or privileges of employment, because of such individual’s race, color, religion sex, or national origin.” (The Civil Rights Act of 1964, SEC. 2000e.2. {Section 703})

Equal Employment Opportunity (EEO) Compliance
Equal Employment Opportunity or EEO would need to be tracked and reported yearly. When reporting she would be required to submit data on age and race of successful applicants. Ann would need to compute the Diverse Impact to ensure that women and minorities were being hired at a rate of at least 80% of the most hired group.

Recruitment

As the VP of Human Resources, Ann would also need to recruit the workforce. In doing so she would need to decide on both internal and external best hiring practices.

1. Internal Hiring: As the company wanted to use technology to create a paperless airline, it would be only natural that Ann would choose to use email and the airline website as the primary source of internal recruitment. Also called Job Posting, in making sure that employees knew about an open position through email and website posting, this would ensure that Ann would be able to leverage internal talent (should the employee choose to apply for the position, also called Job Bidding) and leverage the employees relationships with outside people that may fit into the company culture by giving their employees incentives for qualified and successful recruits.

2. External Hiring: As the new age of computer technology emerged, the practice of Internet Recruiting had started taking off. The desire for JetBlue to have a technologically savvy workforce, Internet Recruitment was the obvious answer for external hiring. Ann would leverage the company career page of their website for recruitment along with general purpose job boards to get the word out the position to talented, committed individuals, typically coming from other airlines.

The Internal hiring practice created open communication for employees to have the opportunity to submit for open positions that they felt they were qualified for or recommend a friend/colleague to. It also gave the employees the opportunity to recommend the company to friends that could potentially be a valued member of the group.

The External hiring practice attracted people that were computer literate, which is one of the things that they were looking for in their workforce, got the word out to all areas of the country and gave them the opportunity to create a database of applicants.

Personnel Selection Process for Mechanics and Pilots

The recruitment of Mechanics and Pilots were extremely important positions within the airline. The Human Resource Department looked for applicants that they felt would fit into the company values: Safety, caring, integrity, fun and passion. The personnel selection process relied heavily on behavioral interviews. In those interviews, mechanics were asked to “think of a time when integrity was an issue in your previous employment.” (Jody Hoffer Gittell and Charles O’Reilly, October 29, 2001) By asking this kind of behavioral question, HR was able to find the mechanics that were not willing to clear an aircraft if they believed that there could be an issue, even if it meant that their employer would be upset. This showed that safety was of utmost concern to that applicant and they were not willing to compromise their integrity.

The Pilot interview process was conducted as a behavioral interview. Human Resources was specifically looking for pilots that had a high comfort level with computer usage and would fit into the company values. The careful selection process was imperative as Jetblue was yet again breaking new ground by paying for the pilot certification for their new A320 airplanes. Since this increased their investment in each pilot, it was important to make sure that they were hiring people that would fit into the company culture, that the employee would be happy within the company and stay for as long as possible.

No interview process is absolute. Even the highly trained Human Resource department at Jetblue had some turnover with people that said the right things during the interview, but when it came down to it, were found to not completely fit into the company value system.

PERFORMANCE APPRAISAL SYSTEM

The performance appraisal system that Jetblue decided to implement would have to take into account three factors:

1. Nondiscrimination – Part of the 1964 Civil Rights Act and Title VII has been more broadly interpreted beyond the employee selection processes that it was initially meant to protect and has taken a roll in performance appraisal systems as well. To remain compliant with Title VII, the performance evaluation would have to not have any “racial, gender, or religious stereotypes that could be considered discriminatory.” (NCIB, “Performance appraisal: the legal implications of Title VII, 1980 May-June) The easiest way to do this is to standardize the system and make it as objective as possible. 2. Company Values – The company values were worked into the performance evaluation. Those values include: Safety, Caring, Integrity, Fun and Value. As with the behavior interview process used to make sure that each new hire had the correct set of core values, the evaluation process mirrored that to track how well an employee fit into that value system and gave the employee direction for improvement. 3. Appraiser fairness: In completing a performance appraisal, the employee needs to know that the evaluator is someone that the employee “trusts and understands”, and is “someone that has observed the employees work.” (MBA Notes World, unknown author, 2011)

THE 360 DEGREE FEEDBACK EVALUATION

Advantages of using a 360 performance appraisal system:

1. Non-judgmental: a 360 degree performance evaluation allows the employee to gain a broader understanding of how they interact with each type of person they come into contact with during a work day. Evaluators are chosen from supervisors, co-workers, subordinates and customers. Combining the perspective from all of these categories gives a more complete appraisal then other systems. 2. Perception of fairness: Since a traditional evaluation can sometimes erode a superior-subordinate relationship since the employee may perceive the appraisal as unfair or untrue. The 360 appraisal system gives views from all areas in the workplace. 3. Job Satisfaction: Since part of the 360 appraisal system is to ask for input from subordinates, it creates a job satisfaction for employees. Being asked to give opinions regarding a manager or supervisor gives employees satisfaction knowing that their opinion counts.

Jetblues use of the 360 degree performance appraisal system:

Jetblue decided to use a 360 degree performance evaluation system, however renamed it to 320 (after their new airplane) degree performance evaluation. Using this type of system assists with standardizing consistency of services the they consumer expects from all groups within the company, including; pilots, mechanics, in-flight crews, maintenance personnel, administration, ground crews, customer service and others. Jetblue built their value system into the performance appraisal and focused on customer experience and communication. In using the 320 degree evaluation system, Jetblue management was better able to address employee concerns and have a better overall understanding of operating performance.

EMPLOYEE FACTORS IN DETERMINING FINANCIAL COMPENSATION

When creating a financial compensation model for any company there are four main criteria that should be looked at: 1. The scope and range of responsibilities: Is it a managerial position, a clerical position, maintenance, environmental, pilot, etc.? Is the employee supervising 100 employees, one employee or none? Are they responsible for the outcome of not just themselves, but others as well? These are all questions that human resources must look at to begin to define a compensation structure. 2. Education level: Is the employee a high school graduate or have they completed a masters degree? 3. Experience: Is the employee a new graduate or have they been in their field of expertise for many years? 4. Competency and skills: Is the employee highly skilled in a specific function? Do they have multiple skills that they bring to the position?

Each of these four factors must be taken into consideration when determining financial compensation in any company. I would venture to say that there really should be five pieces to determining financial compensation however. The fifth factor would be department budget. A budget must ALWAYS be taken into account when deciding how much or how many hours each employee would make. And of course what is fair and equitable for all concerned.

DISCRETIONARY (VOLUNTARY) EMPLOYEE BENEFITS:

There are three main types of employee benefits that encompass a variety of things. Those consist of:

1. Protection programs: these include insurance packages such as disability insurance, life insurance and retirement plans. (Martocchio, 2009) 2. Paid Time: This benefit includes holiday pay, vacation leaves and sick leaves. (Martocchio, 2009) 3. Accommodations and Enhancements: These cover a variety of programs including the promotion of mental, physical and emotional well being of employees such as employee assistance programs (EAP’s) and skills or knowledge acquisition (such as education programs), flexible work schedules, and other incentives to motivate personnel (Martoccio, 2009).

Jetblue created a variety of benefit packages to try to give the employees a choice to decide what benefits would be important to them as individuals. They provided generous packages for all workers that gave them each medical insurance, 401k plans and profit-sharing incentives. Full time workers accrued “Paid Time Off’ (PTO) and received double pay for working holidays. Each classification of worker had different benefits that were important to them. For example, the flight attendants usually would only be in that position for one to five years, so the benefits that were most important to them was flexible working hours, travel and vacation perks, and family time off. Jetblue also instituted a “work from home” policy for reservation agents and allowed top management to work from their home office. Jetblue found that there was higher productivity from workers that were happy and this would allow them to not “disrupt their families and personal lives” (Gittel & O’Reilly 2001, p. 5). The flexible employee benefit packages truly showed the employees that the part of “Caring” in their mission statement was not just something that they had on the wall, it was something that the company was willing to live up to.

References

Gittel, J.H and O’Reilly, C. (2001). Jet Blue Airways: Starting from Scratch. Harvard Business School, Boston, M.A.: Harvard Business School Publishing

Martocchio, J.J. (2009). The Costs of Employee Benefits. Retrieved December 8, 2009 from: www.routledge.com/textbooks/0415396867/slides/11.ppt

MBA Notes World, unknown author, (2007) Factors influencing effective performance Appraisal. http://www.mbanotesworld.in/2007/08/factors-influencing-effective.html

NCIB internet resource (1980 May-June) 57(3): 11-21 under Personnel http://www.ncbi.nlm.nih.gov/pubmed/10247390

Jody Hoffer Gittell and Charles O’Reilly, Harvard Business School (October 29, 2001), Jetblue Airways, “Starting from Scratch”

The Civil Rights Act. (1964).Title IIV of the Civil Rights Act. United States Government
http://www.eeoc.gov/laws/statutes/titlevii.cfm