IndexContext of history of human resourcesHR practices at RyanairImportance of human resource management in strategyThe document assessed the role of human resource management (HRM) within the the company and its evolving role from administrative and operational to strategic. He traced the transformation of human resource management from people management to its current position where it is central to the overall business strategy. The company in question is one of the largest European airlines, Ryanair is considered the largest low-cost airline (LCC) on the continent. He highlighted the impact of human resource management errors on the company's strategy. There were pilot strikes related to finance costs in fiscal 2017 and are still ongoing, implying that in fiscal 2018 profits will be substantially impacted. The airline did not treat its employees, especially critical staff, pilots and cabin crew as rivals. They are offered relatively lower pay and fewer benefits. The strikes that began in late 2017 are the culmination of employees' efforts to gain better recognition, but their efforts were rejected by the airline. Therefore, the strikes had an impact on the strategy, including rescheduling, flight reduction, flight unpredictability and profitability. Human resource management must be aligned with the target strategy to achieve business objectives. The disconnection between these aspects results in failure or sub-par performance in strategy execution. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The paper evaluates the strategic importance of human resource management. It describes the historical evolution and background of human resource management together with the specifics of the selected organization (Ryanair). The importance of transforming human resources management from an administrative/operational role to a strategic role is underlined. Background to the History of Human Resources According to Armstrong & Taylor (2017), human resource management (HRM) is the consistent and strategic approach to a company's most valued resources, its employees. These are people who work individually but collectively contribute to a company achieving its goals (Tubey, Rotich, & Kurgat, 2015). Employee management is critical to the company's strategic goals. Before the 1990s, human resources management was considered an auxiliary function that provided job tasks such as planning vacations, organizing retirement parties, enrolling employees for health coverage, and planning company picnics ( DeCenzo, Robbins, & Verhulst, 2016). It is the product of changes made in the early 20th century (Tubey, Rotich, & Kurgat, 2015). Changes in human relations have been oriented towards creating business value through the strategic management of employees and the workforce (Tubey, Rotich, & Kurgat, 2015). Initially, HR functions were primarily transactional. With the establishment of laws and regulations governing industrial relations in different countries, the nature of human resources has changed. In the United States, “federal and state laws have placed many new requirements on employers regarding hiring and employment” (DeCenzo, Robbins, & Verhulst, 2016, p.30). As a result, jobs have changed. Changes in job descriptions that tend towards technical aspects have madeso that more skills are required and the boundaries have become increasingly blurred. Elsewhere, countries such as the United Kingdom and Australia have begun to examine work systems along with the nature of work and have instituted various regulations (Tubey, Rotich, & Kurgat, 2015). Some of these laws and regulations covered areas such as: minimum wage, protection of employees from hazardous working conditions, regulation of working hours, and discrimination. The precursor to current human resource management practices was indeed personnel management. There are some marked differences between the two approaches. People management was short-term focused and undertaken on an ad hoc basis while human resource management is strategic, proactive and in a long-term perspective (Tubey, Rotich, & Kurgat, 2015). The time orientation has changed significantly. The psychological contract has also shifted from obedience to real commitment. The roles have also been integrated into line management in human resource management being highly specialized in people management (Tubey, Rotich, & Kurgat, 2015). Furthermore, human resource management has moved from cost minimization to human resource accounting (cost maximization) in personnel management. There was centralization and bureaucracy along with a pluralist approach to employee relations in personnel management (Tubey, Rotich, & Kurgat, 2015). In addition to regulations specifically aimed at improving the workplace, the growth of employee unions and the globalization of the workforce have meant that employee relations have changed. As noted by Boxall & Purcell (2015), the approaches taken in the United States and European countries varied. In the United States, the implicit approach to change in human resource management focused on the benefits that could be accrued primarily to shareholders (Boxall & Purcell, 2015). In Europe, emphasis has been placed on context and an essentially holistic approach (Boxall & Purcell, 2015). Human Resource Practices at Ryanair The focused organization regarding HR practices is Ryanair. It is one of the leading carriers in Europe and the main low-cost carrier. It is highly regarded for the low-cost operating model adopted as a central element of its strategy. The same approach has also been adopted in the airline's approach to employee relations (Carberry & Cross, 2013). The airline's founder, who played a critical role in its strategic success, opposed unions and resisted employees' attempts to unionize (Carberry & Cross, 2013). In the airline industry, pilots are critical to operations. Less than 50% of its employees belong to recognized trade unions, most of which are located in the United Kingdom (UK); non-UK trade unions are not recognized (Figure 1, Appendix). It has also previously discouraged employees in the UK from joining unions such as BALPA (Carberry & Cross, 2013). In addition to actively dissuading employees from joining unions, Ryanair employed its cabin crew on short-term contracts, primarily through agencies rather than the airline itself (Carberry & Cross, 2013). As a result, it offers some of the lowest benefits by industry standards compared to benefits such as holiday entitlements and pensions (Carberry & Cross, 2013). In some cases, the airline has required employees to purchase their own uniform and expects employees to charge their phones before arriving at work as it does not allow the use of mobile chargers. These efforts are part of a low-cost strategic approach that discourages the use ofInternet (Carberry & Cross, 2013). Ryanair offers wages just above the minimum in your country of domicile. Newly recruited cabin crew are offered a monthly salary of between £900 and £1,100 and are paid up to £2,700 for training (Carberry & Cross, 2013). Considering the low level of unionization, employees have little room for negotiation and must work under whatever conditions the airline offers (Carberry & Cross, 2013). This has sparked angst among employees who periodically vent online. The airline went as far as requesting court orders to discover their identity (Carberry & Cross, 2013). Furthermore, concern over working conditions at Ryanair has attracted the attention of the International Transport Workers' Federation (ITWF) which has urged travelers to consider working conditions at the airline before purchasing tickets (Carberry & Cross, 2013). The inflexibility in its approach to employee relations has already been affected. Resistance to pilot unionization led to the cancellation of over 2,100 flights by the end of 2007 (Hollinger & Khan, 2017). The airline did not adequately account for pilots' flight times and, with its salaries below industry standards, lost 140 pilots to smaller rival, Norwegian Air, in 2017, representing about 5% of its pilots (Hollinger & Khan, 2017). In addition to losing pilots, mostly experienced ones to rivals, flight cancellations meant it flew fewer planes between November and April, 2018. During that period, it flew 25 fewer planes and 10 fewer planes from 'April 2018 (Samson, 2017). The few flights are likely to impact revenues especially in fiscal 2018. Furthermore, it suffered significant reputational damage and faced around €25 million in costs related to the cancellation, including €20 million in compensation to stranded customers and 5 million euros of losses on profits. (Hollinger and Khan, 2017). It also reconsidered its bid for the struggling Italian airline, Alitalia, in an attempt to put an end to the debacle (Samson, 2017). Ryanair's HR mistakes highlight the impact of employee relations on the company's overall strategy. Flight changes made after the cancellations were expected to reduce full-year traffic in fiscal 2017 from 131 million to 129 million (Samson, 2017). Around 400,000 Ryanair customers have been affected by flight cancellations (Samson, 2017). Importance of human resource management in strategy According to Boxall & Purcell (2015), human resource management goes beyond the recruitment of qualified personnel but also engages in the development of social capital and promotion of required performance. It involves creating the network of relationships that combine employees' individual talents into collective outcomes of the company's overall strategy (Boxall & Purcell, 2015). The main functions of HRM have been expanded to include: staffing (recruitment, selection and socialization), evaluation, compensation, training and development, and labor relations management (Noe et al., 2018). Human resource management has evolved from an auxiliary to ancillary function with a critical role in strategy development and execution. Despite the drawbacks in managing employee relations, Ryanair actually has a high-level human resources officer with the title of Chief People Person (CPP). The position is at similar levels to Chief Financial Officer (CFO) and Chief Technology Officer (CTO). The role of Chief Executive Officer (CEO) is of very significant interest inas the airline's largest individual shareholder. The CEO holds approximately 4.0% of Ryanair's capital and is the third largest shareholder behind the main institutional investors, HSBC and Fidelity Investments (Faurschou, 2017 ). It creates some conflict in the principal-agent relationship. Agency theory captures the relationship between shareholders (principals) and management (agents), (Hill & Jones, 2013). The expectation in the principal-agent relationship is that agents always act with the best interests of the principals (Hill & Jones, 2013). In Ryanair's case, the concern is not about the agency problem of information asymmetry. Considering that the CEO is both a principal and an agent, he actually pursues the principal-agent relationship to the extreme. Shareholders as principals are rewarded for aggressive cost efficiency within the airline. However, every other strategic aspect is only considered for cost implications, including employees. No efforts have been made to consider employees from the perspective of the theory of human capital as productive wealth embodied by work (Nafukho, Hairston, & Brooks, 2004). Work development must be considered from the perspective of benefits in terms of productive wealth generated by skills and knowledge assets (Nafukho, Hairston and Brooks, 2004). In the modern business, human resource management plays a more significant role through policies that attract and retain talent within the company and maintain competitive advantage. According to DeCenzo, Robbins, and Verhulst (2016), strategic human resources must align with the company's strategy. The administrative nature of people management has been transformed over the years by regulatory changes and the importance of talent to gain competitive advantage. It must be adapted to the strategic focus adopted by the specific company. Companies pursuing cost differentiation emphasize streamlined processes, low-cost materials, maximizing efficiency, and reducing waste (DeCenzo, Robbins, & Verhulst, 2016). The implication for human resource management is that jobs need to be structured through knowledge sharing and maximizing cross-training (DeCenzo, Robbins, & Verhulst, 2016). Compensation programs must be designed to reward efficiency and increase cost savings. Therefore, the company must select the most versatile employees in terms of skills (DeCenzo, Robbins, & Verhulst, 2016). Companies pursuing differentiation emphasize creativity and innovation as well as providing multiple choices to customers. Strategically, compensation systems are designed to reward innovation and creativity (DeCenzo, Robbins, & Verhulst, 2016). Employees must be educated to create products with differentiating characteristics. Companies that thrive on strong customer relationships require employees who have strong customer relationship skills (DeCenzo, Robbins, & Verhulst, 2016). Companies that target specific segments require employees with strong market research skills and a good understanding of the target market (DeCenzo, Robbins, & Verhulst, 2016). Ryanair's strategy is based on being a low-cost airline (LCC). The emphasis is on having the lowest cost structure in order to maximize returns and is also service oriented. In service-oriented companies, the emphasis is on the people who provide the service. Ryanair has suffered reputational damage following massive cancellations caused by pilots' strikes. Furthermore, it lost at least 5% of its most vital human resources, the pilots, to its rival. 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