Human resources (HR) department is a significant component of any successful organization because research has shown that a comprehensive approach to HR policies and practices towards people management is essential in achieving optimal profits per employee, productivity, and profit margins. As a result, companies need to invest substantial amounts of resources towards developing their employees in order to achieve their long-term objectives (Griffin & Moorhead, 2011). Supporting research also indicates that companies that engage in a variety of people management practices including but not limited to skills development, job design and description, resourcing, employee engagement tend to achieve considerably stronger performance than those that invested in a single area.
Some key human resources strategies that have proved to be effective in helping FedEx to provide exemplary customer service, making it the envy of many companies within and without the industry include recruitment and selection processes, where the organization seeks to bring on board skilled and competent employees to serve in the various levels. It also strives to fill promotions from within, but this does not limit the HR department from recruiting qualified personnel from outside the organization. This practice has enabled the company to lower its employee turnover rate since it gives each employee an opportunity to develop and utilize their skills.
The organization has high regard for training and development, and it seeks to add value to its entire workforce as regularly as possible. In order to achieve this, the company continuously endeavors to provide training for the staff and managers, covering a wide scope to prepare them from promotion opportunities that may arise. In terms of communication practices, FedEx emphasizes on the need to maintain two-way channels of communication to facilitate sharing of ideas and information. As a result, employees are required to participate in regular question and answer sessions among other interactive discussions. The company seeks to keep its employees satisfied by ensuring they are compensated in line with market rates. It also offers incentives for pay-for-performance, promotes fair treatment, and provides employee security for its entire staff.
FedEx has been successful in keeping employee turnover rate at a minimum by ensuring that it provides its employees with opportunities to forge successful careers for themselves. As mentioned earlier, FedEx makes an effort to fill vacancies internally whenever possible. Moreover, it has put in place policies to identify and reward admirable employees to encourage them to do better each time as well as to encourage others to follow such examples. In addition, the company invests in training and developing all its employees, and the effect is that a majority of the employees tend to remain in the organization.
There is no doubt that FedEx has gone a long way in ensuring that the Human Resources department contributes to the overall goals of the company by making sure that it applies effective policies and practices. However, there is always room to do better, which is why this paper will analyze the current HR policies and practices in use at FedEx, their shortcomings, and give recommendations on how the department can improve on the problematic areas.
Recommendations to improve the HR function of FedEx
Recruiting and Selection
Earlier on, this paper highlighted that the company has a long-standing policy of hiring from within, which explains why FedEx injects substantial resources in training its employees for leadership and managerial roles among others (Frock, 2006). This policy has its strengths and drawbacks.
The advantage is that it reduces employee turnover, which can be costly in the long-run, as far as training resources are concerned. The downside of this policy is that it limits the company from ‘injecting new blood’ as regularly as may be necessary. Consequently, the organization sets its own limitations to innovativeness and creativity – the company misses opportunities to extract ideas and information from potential external talent, regarding competitors or the ways it can improve its processes or products in order to increase its competitive advantage.
In any industry, organizations that embrace talent from diverse fields or organizations tend to pick up useful ideas and information that help them in improving their own processes or products to stay ahead of the pack.
FedEx has achieved commendable results by filling positions from within whenever possible. However, the talent, obtained to fill those positions, is accustomed to the organization’s traditions and practices, which may limit the employee’s ability to use other innovative and creative mechanisms for problem solving, product/service creation or improvement among others. Therefore, it would be prudent for the company to implement policies that can strike a balance between internal and external recruitments to ensure that employee satisfaction is maintained, and the company gets an opportunity to explore external talent for new ideas and information.
Training and Development
Training and development practices are some of the key HR functions that FedEx endeavors to keep it consistent because of the value the process adds to potential and current employees. FedEx provide job skills training as well as orientation training. The organization has been conducting training and development for over 30 years (Noe, Hollenbeck, Gerhart & Wright, 2011). The company employs various training approaches such as outsourcing training services, mentoring; video training; group training, and coaching. All these methods have been successful in delivering outstanding results over the years.
The company tries to utilize more one-on-one forms of training because they provide an opportunity for the trainer to identify the strengths and weaknesses of the trainee; therefore, they tend to be more effective than group training and video training.
A crucial concern, though, is the lack of commitment by majorities of employees with respect to using video training (Aamodt & Aamodt, 2010). Previous cases have shown that quite a number of employees who embark on video training do not complete the process, which explains why the HR at FedEx rewards the employees who complete the training in order to encourage more to do the same. This mode of training requires considerable attention because it accounts for a significant proportion of training hours as it reduced training hours from 32 to 8 hours.
The HR department should employ strict regulations, pertaining to the minimum number of complete sessions that employees should undertake in order to enforce usage of video interactive training because it cuts costs and time, spent on formal training, not to mention it is a mode that an employee can refer to time and again.
The organization should also focus some more on career planning to enable its employees identify and develop their career paths early enough to make their selection and recruitment process less cumbersome. The process involves helping the employee to assess himself or herself, to identify his/her strengths and areas of interest. The second step is to help the employee explore his options, in this case, the areas within the company where his/her skills may be put to optimal use. Third is to match one’s skills with the available options with a focal point on both short-term and long-term alternatives. Lastly, the HR department should help the employee venture into those areas that fit their skills and interests, not forgetting investing in developing the employee through education and training (Lussier, 2009).
FedEx attributes a great deal of importance to performance management too because it measures the effectiveness of the resources that the company has invested in improving the performance of its employees. FedEx uses both formal and informal methods of performance management such as written evaluation reports; informal discussions; performance evaluation systems, and etcetera.
The organization conducts performance management evaluations regularly; therefore, positioning the shareholders for better returns; managers for smooth operations because employees are in line with the organization’s objectives; and higher employee satisfaction arising from the benefits attached to outstanding performance (Harvard Business School, 2006). However, the organization needs to lay emphasis on helping employees develop performance improvement plans. The organization has overlooked this area, yet it holds potential towards motivating employees to keep improving themselves.
The organization should encourage supervisors and their subordinates to work together towards developing a performance improvement plan upon identifying the employee’s problem and areas that need improvement. The two parties ought to cooperate because the effectiveness of the plan highly depends on their contributions. On one hand, FedEx should empower supervisors to apply this mechanism upon his discretion, and on the other hand, the company should encourage its employees to collaborate in the process should the supervisor find it necessary to engage the employee in the process. The Human Resources department should be responsible of reviewing the plan to make sure that there is consistency and fairness in the manner, in which employees are treated.
The supervisor is expected to monitor and send feedback to the concerned employee on the progress, made towards improving his or her performance. The supervisor also has the power to discipline the employee in the event he deems it necessary, but this should be in accordance to the organization’s employee discipline policies.
A performance improvement plan consists of six items, which are to be evaluated throughout the process (Carleton, 2010). The first item is the performance to be improved on, and it should be specific. The second one is the level of work performance that the supervisor expects from the employee, which must also remain consistent. The third item are the resources that the supervisor and HR department will provide to enable the employee improve his or her performance. Fourth is the expected feedback channel that the supervisor will use to communicate with the employee. Fifth is a clear outline of the measurements that the supervisor will consider in assessing the employee’s progress. The sixth item is the possible employee disciplinary actions that the employee may suffer if he or she does not meet the supervisor’s standards. The last item is any other source of additional information (for instance, employee handbook) that the supervisor will provide to help the employee improve his or her performance.
The organization has made it a tradition to reward high performing employees in order to motivate them in improved performance in the future. Some of the rewards are awarded instantly such as quick cash bonuses, dinner vouchers, theatre tickets, and et cetera. Other incentives include shares of FedEx stock, a phone call or visit from a senior executive to laud one for his or her performance among others. However, some of these modes have been counter-effective, especially where rating and ranking techniques are applied since they tend to reduce employee motivation to perform.
Organizations strive to maintain progressive discipline practices to ensure that employees and the HR department know the consequences of failing to comply in terms of either performance or behavior. Disciplinary actions can be either mild or severe, though the degree of severity depends on the frequency of the behavior or the seriousness of the issue (Spechler, 1993). FedEx uses both formal and informal modes to ensure employee discipline is enforced.
The organization has had several cases of indiscipline filed against its employees, while others were just reported in various mediums. The most notorious cases have been cases, filed against FedEx employees by their colleagues for sexual harassment behavior, in which the company has lost some and won some cases (Johnson, 2011). The fact that one of their own against another of their own often files sexual harassment suits is an indicator that the policies that the organization uses are not stringent enough to deter employees from the act, or they are not properly enforced.
The company should review its policies and practices on sexual harassment to ensure that it is stringent enough to discourage rogue employees from harassing their colleagues. Some of the practices that are likely to tame bad behavior include summary dismissal for unacceptable behavior such as sexual harassment. In addition, it should provide training opportunities to help employees understand the various forms of abuse, what they are expected to do should such cases arise, and ways, through which employees can stay clear of indiscipline.
Research has shown that compensation and benefits play an important role as far as employee motivation and satisfaction are concerned. Employees who receive attractive packages tend to provide better services than those, providing similar services, but with lower compensation and benefits package.
Previous research, conducted on FedEx, reveals that a substantial proportion of the organization’s revenues go to compensation and benefits in order to encourage innovativeness and creativity among members (Berger & Berger, 2000). Unfortunately, employees have over-objectified compensation and benefits, leading to gross misconduct, while in the line of duty.
The organization should put in place measures that encourage healthy competition for recognition among employees, and check unhealthy competition that could result in gross misconduct. The company should develop a compensation and benefits plan that can be used by all HR departments in any of the countries that FedEx operates in without contravening the Guaranteed Fair Treatment Procedures.
Any organization, whose workers are unionized, tends to face more challenges than those, whose workers do not belong to any trade unions (Holley, Jennings, & Wolters, 2011). This is so because trade unions tend to push for better employment conditions for its members, and this comes at a cost to the organization. The use of non-unionized labor has been a key contributor to exploitation of employees in businesses, which is one reason that disgruntled employees seek to leave such organizations to work for those that allow unionization of labor (Bernardin, 2003).
For many years, FedEx has continued to receive government support and favorable labor laws that have given the company unfair advantage over its key competitor, UPS. However, UPS has raised concerns about the issue, and it is now pushing for an even playing field.
FedEx ought to consider allowing its employees to form or join trade unions, even though it may limit the powers of such unions. This is to reduce the number of disgruntled employees who may feel that the organization is exploiting them; therefore, choosing to leave in search of an employer who supports trade union membership.
Numerous studies have been conducted on the HR practices, employed by FedEx, and it is clear that they seem indelible. However, no matter how much caution is taken when formulating and implementing these policies and practices, there will always be room to improve on some of them. This paper has highlighted the crucial issues in the organization’s HR practices as well as suggested some recommendations that the organization should consider to improve its HR practices.
The recruitment and selection process is mainly completed through internal recruitment processes, which limits the organization’s access to new ideas that could stimulate creativity and innovativeness. It would be advisable to balance internal and external recruitments in order to derive significant benefits from both sides. Training and development is a core function of the HR department at FedEx, and the company has made an effort of using different approaches to achieve its training and development needs. As noted earlier, the interactive video training has significant potential to reduce costs and time, spent on training; therefore, the organization should be strict on its use and application to ensure it attains optimal effectiveness. In addition, the organization should commit to help employees in planning their careers in a bid to increase employee satisfaction and to make internal selections easier.
Performance management is a vital component of HR departments because failure to perform reduces the employee’s productivity and company’s profitability. Therefore, it is important to formulate and implement effective performance management practices such as using performance improvement plans as a technique to boost employee performance. Employee discipline is an area that requires attention, especially in FedEx, because there have been a number of sexual harassment litigation. The organization should train employees on how to handle misconduct issues, not forgetting to inform them of the possible consequences of misconduct to reduce incidences of employee indiscipline.
FedEx has attractive compensation and benefits packages, which is a major reason why most of its employees stay in the organization. Compensation and benefits create employee satisfaction, though caution should be taken to make sure that employees are not only driven by perquisites because this could compromise the integrity of managers, in particular, as they strive to achieve higher profits in pursue of bigger bonuses. Furthermore, FedEx is notorious for its intolerance to unionized labor, and a number of its employees have not taken this kindly because it denies them an opportunity to negotiate for favorable working conditions. The organization should consider allowing members to form trade unions, albeit with minimal powers. However, the Company is a remarkable example of how sound HR practices and policies can help an organization in creating sustainable competitive advantage. However, the company faces some challenges as mentioned herein, and this proposal has made recommendations that could help the organization improve on the areas of concern.