Human Resources Management

FedEx Corporations Case

Lecturer: T. Hani Handoko, Ph.D

Bella Nabila 296498 IUP Business 2010

Faculty of Economics and Business Universitas Gadjah Mada

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1. At a time when technology is becoming the key distinction among transportation firms, FedEx recently announced plans to shrink its 4000employee IT division by about 200 workers. The move has been considered jarring by some because FedEx traditionally has used layoffs only as a measure of last resort. How could this action affect the company s organizational culture and employee relations, especially in lieu of its corporate philosophy? What steps should FedEx take in order to prevent or minimize possible negative effects?

FedEx management believes that the company s most important component is the human one, employees whose commitment and dedication to the company result in continuing prosperity and the company is equally committed to its employees. FedEx recently announced plans to shrink its 4000-employee IT division by about 200 workers. It really against the corporate philosophy of People-Service-Profit which people come first rather than profit. Those problems can affect the corporate philosophy that they used. FedEx should take a few steps in order to prevent or minimize possible negative effects. First, FedEx should manage their turnover system. In this case, voluntary turnover would be much better than involuntary turnover. Voluntary turnover initiated by employee (often whom the company would prefer to keep), this will lead to no negative relationship between FedEx Company and its employee. On the other hand, involuntary turnover initiated by the organization (often among people who would prefer to stay). Then the second step, FedEx should manage the involuntary turnover. When some employees occasionally fail to meet performance requirements or violate company policies while on the job, organization need to invoke a discipline program that could ultimately lead to the individual s discharge. For a number of reasons, discharging employees can be a very difficult task that needs to be handled with the utmost care and attention to detail. By procedural justice (consistency, bias suppression, information accuracy, correct ability, representativeness, ethicality) this concept of justice avoid the unilateral decision and prevailing moral standard, then

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interactional justice (explanation, social sensitivity, consideration, empathy) this concept of justice more consider on the individual feelings and how to respect employees. The last step will be outplacement counseling, which can help displaced employees manage the transition from one job to another. In addition to prevent possible negative effects, employee also need to concern about the organizational commitment, the degree to which an employee identifies with the organization and willing to put forth effort on its behalf.

2. In the past FedEx s human relations programs have kept the desire and need for union representation low. Research indicates that employees join unions because they are dissatisfied with their employer and believe the union can improve the situation. How should FedEx continue to improve its labor relations so employees are satisfied with management s treatment? Develop a strategy for FedEx in order to prevent further unionization To make employees satisfied with management s treatment, FedEx could continue to improve its labor relations by communication - management communicating with the employees, and the employees communicating with management. Successful communications have several important aspects. In the first place, there should be an ongoing communications program emanating from management to the non-supervisory work force. These communications should consist of keeping the employees informed about the current state of the business and telling them about their working conditions and benefits. The employees should be made to feel that they have a direct stake in the success of the company and should also be made to feel that the management believes that their contribution is significant to the success of the business. This can be done by providing employees with information about business affairs, sales information, new product information, information about competitors, information about the objectives that the company is seeking to obtain or information about certain problems that the company may be facing. The goal of

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such communications should be to enlist the aid and support of these employees in fulfilling the objectives of the company. Another important aspect of communications is taking steps to ensure that the employees understand that they have a good place in which to work. Specifically, the employees should understand their benefits and know what is being provided for them. The other important aspect of communications must emanate from the employee. One of the good strategy for FedEx in order to prevent further unionization is FedEx should have an open door policy, which allows employees to complain about anything that may be on their minds. Supervisors may think that such a procedure is a nuisance, but it serves as an early warning system of those signs and symptoms that could lead ultimately to a unionization threat. Management can give this procedure any name it pleases that is not important. What is important is that the procedure exists and that it works effectively; or at least that the employees think that it works fairly and effectively. The procedure should be structured so that employees have a means of raising their complaints to other individuals in the organization, and they should feel that they would receive just and fair treatment when they use the system. Furthermore, feedback also important, so the supervisors know exactly about what the co-workers want. In general, with this kind of strategy, no unionization against FedEx Corporation would exist. 3. The use of part-time labor continues to be major strategy of the FedEx senior management team. Discuss the key challenges of employing such a large group of part-time workers and how FedEx should overcome them

Part-time employees are those who whether by personal choice or due to employment conditions beyond their control work fewer hours than the regular, full-time staff of a business over the course of a year. Many small business owners rely on a blend of full- and part-time employees to attend to basic operational needs, although some industries rely more heavily on one type

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or another. Employing such a large group of part-time workers can bring advantages and disadvantages to FedEx, such as y y Costs are lower in terms of direct monetary compensation, Energy and enthusiasm especially college and high school students can give businesses a needed injection of liveliness, y y y y In-house candidates for full-time job openings, Young part-timers are often willing to learn new tasks and responsibilities, Availability during peak periods, Some smaller and isolated communities offer a larger supply of responsible and hardworking part-timers, because fewer part-time jobs are available." However, there are disadvantages associated with part-time employees as well. Indeed, it is a basic business reality that the turnover rate among part-time positions is significantly higher than the rate among full-timers. Other disadvantages included, y y Higher absenteeism rates. Inexperience, which can translate into higher training costs and/or unprofessional behavior. y Mistakes in hiring decisions, since younger applicants for part-time positions have less of a track record. y y Excessive socializing (again, especially with younger employees). Increased risks in terms of workplace safety and security.

In other words, those disadvantages will be FedEx challenges too. In order to overcome those problems, FedEx have to determine for itself how to compose its work force in this area, weighing the benefits and drawbacks associated with each type of employee.