Staffing challenges and employee morale at Piedmont Airlines

Staffing at Piedmont Airlines

Finding solutions at Piedmont Airlines

Overview of Organization

Piedmont Airlines is a fully owned subsidiary of U.S. Airways. U.S. Airways is the 6th largest airline in the United States (Piedmont Airlines, Inc., 2011). Piedmont flies 440 daily departures to 55 cities throughout the Eastern United States and Canada. They operate 44 DeHaviland DHC-8 Turbo prop aircraft as their primary fleet. The headquarters is based in Salisbury, Maryland. They employ nearly 4000 aviation professionals (Piedmont Airlines, Inc., 2011).

Like many organizations, Piedmont is facing problems with employee morale. Low employee morale is closely linked to high turnover rates in many organizations. Low morale also leads to low productivity. Employee satisfaction is one of the most important factors in maintaining an experienced workforce. Poor morale leads to excessive employee absences and a higher absence rate (CCH, 2007). This costs the company money and lost time. It also has an impact on customer quality at the airlines. When an employee is absent it places greater strain on those who are at work and their ability to meet customer needs. They must take on a greater workload and the customer is greeted with longer lines, stressed employees, and a poor image of Piedmont Airlines.

Lower turnover provides a competitive advantage for the airlines in building customer relationships. An employee who is dissatisfied with their job projects this image to the customer and provides a poor customer experience. Job satisfaction has been linked to organizational commitment (Kin, Leong, & Lee, 2005). A high level of organizational commitment results in employees that are happy with the jobs and that projects a positive company image to the customers. This improves employee morale and represents an even more important issue for Piedmont Airlines.

Standard philosophy in organizational management finds that employee turnover is costly for the employer. In addition to replacement fees and costs there are hidden costs such as productivity loss, workplace safety issues, damage to morale and other costly factors (O'Connell & Kung, 2007). However, Piedmont Aairlines has a different viewpoint on employee turnover. They target a turnover rate of 29.6%, according to the Vice President of Operation's assistant. The reasoning provided is that when the turnover rate becomes too low, costs rise due to employee wages and vacation. However, when the rate increases to a higher level the costs rise due to the frequency of training classes.

This philosophy of turnover rate only takes to into account one single factor, employee costs. However, it does not take into account many of the other effects of high turnover rate. For instance, employees that are happy project this image to customers, have lower absentee rates, and are likely to speak of the company in a positive way when they are out of the work environment. Experienced employees are less likely to make mistakes than newer trainees. Experienced employees lower managerial costs in many other ways, such as refunds due to inexperienced employee mistakes. On the maintenance and safety side of the airline industry, experienced employees offer many benefits over new trainees. They are less likely to make mistakes that result in safety issues or FAA violations. Other than absentee rates, these other factors are not considered in the equation that Piedmont uses to adjust their target turnover rate. They are difficult factors to measure, but they do have a real affect on the bottom line.

A high turnover rate is counterintuitive to much of the literature on productivity, organizational effectiveness, and the importance of employee morale. Experienced employees bring many advantages that help save costs in other areas, other than simply vacation and wage increases. Mistakes and lower productivity in trainees costs the company money, that may offset the amount saved in higher wages and vacations. Employee morale is one of the most important factors in maintaining lower turnover rates, thus increasing the number of experienced employees in the airline. Experienced employees bring many benefits to the company, but Piedmont Airlines is only looking at one factor of the equation. Taking a holistic approach to cost analysis may reveal that lowering absentee rates has more positive effects than negative ones, and that these affects make a real difference in the bottom line. Currently, Piedmont Airlines is in danger of increased turnover rates due to disgruntled employees.

Resolution and Conclusion

The problems with employee morale at Piedmont airlines go beyond unhappy employees. They create problems with customer service, and even safety issues that could have a significant impact on the ability to retain profits within the company. Current management policy only looks at the cost of the employee in terms of wages and vacations, as opposed to the costs associated with hiring and training. However, this is a myopic view of the situation and the costs associated with it. Employee costs and production go beyond the human resources department and extent into all areas of the airline operation. Unhappy employees are harmful to the organization in many ways. If the situation deteriorates too far, it is possible at Piedmont Airlines could be dropped from U.S. Airways, as it presents too much of a financial liability. This is a possibility that Piedmont management is not considering in its current human resources policies.

The problems at Piedmont Airline are complex and multifaceted. The resolution of the problems will require changes on a policy level. Piedmont leadership needs to realize the value of their employees and treat them as a valuable asset that they represent. The problems will require some soul searching and changes in managerial attitude. Under the current attitude, staff feels as if they are less valuable than other company assets. Changing leadership attitudes towards employees would make significant progress towards increasing employee morale.

Aside from major attitude changes, several other changes would be needed to address the problems of employee morale found during an informal interview with employees. One of the problems found was the inability to balance work and other areas of their life. Currently, Piedmont uses software called Staffplan, that calculates the necessary manpower, shift times, and hours. There is no formal second and third shift. The flight schedule comes out on a quarterly basis and employees bid on their schedules based on seniority.

Staffplan is an excellent software package from a logistical and operations perspective. It assures that there is sufficient staff to cover all of the shifts and it accounts for peak times. However, the way shifts are distributed creates hostility between those that are senior staff members and those that are new hires. Being able to pick shifts is an excellent way to promote company longevity. It is a little privilege for sticking with the company. However, it means that life is difficult for those just starting out. They have lower pay and a rougher schedule, making it less likely that they will be with the company long enough to become senior staff members. A more equitable shift distribution system needs to be devised. It is suggested that a committee be formed to examine this issue and to propose possible solutions.

Fear of being written up for minor infractions of the rules, or possibly equipment failures that are not the fault of the employee was found to be another major morale issue. The solution to this problem lies in company policy. The present system makes little distinction between a minor and major infraction. Everything is treated as a major infraction of the rules. Human resource policies need to be rewritten so they reflect the severity of the action. Employees should not be written up for equipment failures without an investigation. It is possible that the decisions of managers and failure to maintain the equipment are the reason for the failure, not the employee that is running it. It is possible that unexpected events simply happen and that in some cases no one is at fault. These human resources policies need to be changed so that they eliminate fear and hostility between the employees and management.

A positive link is been found between perceived employee involvement climate and organizational effectiveness is measured through financial performance, turnover rate and workforce morale (Riordan, Vandenburg, & Richardson, 2005). A link between healthy workplace practices and employee well-being have been linked to organizational improvements and profitibility. This link demonstrates both direct and indirect associations between workplace improvements and improved employee morale. Five general categories were found that helped to establish this important link. These areas were work-life balance, employee growth and development, health and safety, recognition, and employee involvement in the decision-making process (Grawitch, Gottschalk, & Minz, 2006). These considerations need to be at the forefront of changes designed to improve employee morale.

In order to achieve the desired results from these changes, several considerations need to be addressed. First, the new policy and procedures design needs to take a holistic approach, rather than an approach that only considers one single factor. This research has revealed that poor employee morale has many affects on productivity and company profits. This holistic approach needs to include a SWOT analysis of the company so that it understands its strengths and weaknesses. Policy changes, such as those proposed, present both opportunities and threats. These factors need to be analyzed for the changes to be effective. In addition, compliance with ISO 14001 and Environmental Management System (EMS) need to be included as well. It is suggested that a BEC firm be employed to conduct these analyses in create the final recommendations.

It is suggested that the BEC firm be asked to address the following in their redesign of human resources and managerial policies.

• Organization communication

• Organizational goals and operations structure

• Strategy, technology, and organizational design as it relates to staffing and human resources

• Community roles of the organization

• Organizational learning styles and processes

• Strategic human resources design and is role in strategic decision making of the firm

This research has demonstrated the importance of human resources strategies and design on employee morale. It is also demonstrated that a connection exists between employee morale, turnover rate, productivity, and profitability. The costs and benefits of promoting employee morale go beyond the actual costs associated with the employee. They have an impact on every area of the business. Employee morale is currently a poor state and one which creates hostility between workers and managerial staff. However, this situation is not unrecoverable at this point. In order to turn this situation around, leadership will have to take the serious look at how they treat their employees. Resolution of the situation will require policy changes, as well as a deeper change in attitude toward employees. Piedmont needs to recognize and treat their employees as the valuable asset that they are.