Human Resources Function the Company

Human Resources Function

The company I have chosen is FedEx. It was founded in 1971, and launched the overnight delivery industry. Since that time, it has grown rapidly, spreading across the world. There are over 100,000 employees worldwide.

FedEx operates in the overnight delivery industry. The company operates the world's second-largest fleet of aircraft, and has operations in almost all countries in the world. The company is organized along divisional lines. Some of the units include Express (overnight delivery), Home/Ground (land-based delivery), and FedEx Kinko's (retail outlets). Operations are based in Memphis, TN. Kinko's is headquarted in Dallas, and there are substantial operations in Oakland, Miami, Toronto and a few main centers overseas.

The company was founded by Fred Smith, an ex-Marine who took the military's goods delivery system and applied it to the private sector. The culture has always been conservative. The drivers have typically adhered to stricter policies regarding personal appearance than other courier businesses. The culture places high value on reliability and punctuality, so these aspects are considered an integral part of the company's culture. Another key aspect of FedEx corporate culture is entrepreneurialism. The company's history is marked by stories of employees striking out on their own to solve problems. Each employee is empowered to solve problems on their own, to find unique solutions for both the company and its customers.

The employees at FedEx come from a wide variety of backgrounds. The company has long had a healthy racial mix, as well as an educational mix. Being an industry leader, and one with complex operating systems, FedEx has always attracted highly-educated talent at the managerial level. At the front-end level, a mix of education levels can be found. There is also a high level of diversity with respect to gender and sexuality.

The hierarchical structure at FedEx is relatively flat. Each division is subdivided geographically. The typical chain of command involves a couple of layers at the executive level, followed by a geographical manager. This manager will typically have only one layer between him/her and the front of the line employees. Many of the functional managers and staff (human resources, marketing, customer service) are located at the main hubs, or otherwise removed from the core delivery functions. Kinko's staff are entirely separate yet again, and the company is still operated with a high degree of autonomy from the rest of the operations.

Analysis of the Problem

There are a couple of key human resources problems at FedEx. The first one is the integration of Kinko's into the company. Prior to its acquisition by FedEx, Kinko's had a corporate culture entirely different from that of FedEx. Kinko's culture was more in line with that of a retail environment. The staff were typically young, and were allowed significant freedom of expression. The turnover level was considerably higher than that of FedEx as well. Moreover, the working atmosphere was more casual, as befits a retail environment staffed almost exclusively by young people.

The integration of Kinko's staff into the FedEx corporate culture has proven difficult for both companies. Many of the Kinko's staff balked at new restrictions on their personal appearance, and other forms of indoctrination into a more conservative culture. The high rate of turnover has been a problem for FedEx managers, who are accustomed to building their business on the basis of long-term relationships, between both they and their staff, but also between the staff and the customers. This culture clash has presented FedEx with problems in integrating Kinko's into their operations, and the profits predicted at the time of the merger have yet to materialize.

Another human resources issue facing FedEx is that of an aging workforce. The company had gone through some severe growing pains in its early years and one of the results was that the company and its employees had developed a strong relationship. Employees had given a lot to FedEx because they believed in its success and in return FedEx has taken care of its employees.

The situation now, however, is that many of these employees have decreased in efficiency. They are aging, and the job is often physically demanding, both in terms of speed of movement and in terms of heavy lifting. Many of the older workers are no longer capable to performing their tasks at the level they once did. FedEx is now faced with a situation where not only do they have older workers doing less, but these workers are also becoming injured more often, and the younger workers sometimes resent having to pick up the slack, especially since they make less money. The issue is complicated by the fact that the older employees enjoy a certain amount of protection from management, in terms of their employment, pay and working conditions.

Both of these situations are hampering FedEx at a time when their business is already under pressure due to an economic slowdown and the high cost of jet fuel. The company must find a way to increase the efficiency of its workforce despite its increasing age; and must find a way to better integrate the distinct corporate culture of its Kinko's arm in order to reap the rewards that merger was supposed to bring.

Theories and Concepts

The issue of aging employees is combines many aspects of human resource management. The first theory is that human resource managers should have a system set up to smooth the transition away from physical work for those workers who are having trouble meeting the demands of the job. At present, the main way out is retirement, but many workers fade in terms of their performance before retirement age. Many of these workers may not be suited to office work, either because of a lack of education, or because they have no familiarity with it.

The older workers do, however, bring a lot in terms of customer service. This aspect of the business is something that FedEx considers to be a differentiating factor in their service. Speed and strength are easy to find; years of experience meeting the needs of the customers and the relationships with customers that have been built over the course of years or even decades is hard to find. The best way to address the issue may be to accept a decline in efficiency as the workforce ages, but leverage those relationships to generate additional income to make up for this. For example, FedEx has many different business units that it did not have before. It may be beneficial to offer education to the older workers so that they can better promote these services, leveraging the relationships they've built over time.

There is also the issue of equity in the workplace. All employees should feel equally valued. The issue of efficiency is just one of the problems with this current situation. The younger workers often find they do more work for less pay. This situation is relatively new for FedEx, as they have only now hit their first real wave of older workers. When the current older workers were young, they formed the bulk of the employees at the time, since the company was still fairly young. A way must be found for today's younger workers to feel the same degree of ownership in their work, and the company's success, that the older workers felt. Part of the solution here is one of education - the message must be clear that the job is more than just running and lifting, that the customer service function is critical and employees should be more focused on that aspect, no matter what their other capabilities might be. That those years of experience cannot be so easily replaced as young muscle should be communicated so that all workers understand which components of their employment are most valuable to the company.

The integration of Kinko's poses an entirely different problem. The question should be evaluated on the basis of the bottom line - does moving Kinko's to a more conservative culture have any particular economic benefit? If it is deemed so, then the system of enculturation needs to be changed. It may also be asked if the culture at Kinko's can offer anything to FedEx. More lax appearance standards and working environments are the norm today. Adopting some of these may serve FedEx well.

This likely involves educating Kinko's employees about the benefits of being part of the FedEx team. Employees at other divisions of FedEx receive training and education about the company's history and lore, which helps build a sense of belonging to a team, to an entity larger than oneself. That aspect is one of the strongest aspects of FedEx culture, and it is one that is lacking from Kinko's.

Another point of consideration is the benefits and wages program at Kinko's. If a higher level of professionalism is going to be demanded, then this should be compensated for. Moreover, the issue of turnover can also be addressed. Inherently, the retail industry is known for its turnover, and this is an area where FedEx can address some of its culture-clash issues as well. Those employees with the strongest enthusiasm for FedEx culture are often those who have been with the company the longest. If FedEx is able to offer a compelling package to Kinko's workers, sufficient to improve retention rates, they may also build a group of leaders in the workplace, those who can help indoctrinate new workers into the FedEx culture.

Solutions and Implementation

To bring the cultures of FedEx and Kinko's closer together, FedEx should do two main things. The first is that they should afford Kinko's workers the same level of wages and benefits. This will help to attract and retain workers who are more in line with the FedEx culture. It will also help to ease the transition towards a greater level of professionalism for the existing workers. There needs to be opportunities for Kinko's employees to move into other areas of the company. In the retail environment, a job is seldom viewed as a career, whereas a large number of FedEx employees in other divisions do view their job as a career. I would recommend developing a specific program for Kinko's employees to move into other roles at FedEx. It will give them a greater feeling of belonging to the company, which will encourage a greater level of enculturation. In addition, it would bring some of the Kinko's culture to FedEx.