High-Performance Work Systems
Student Learning Outcome: Students will analyze high-performance work systems as related to employee motivation. Components include employee empowerment, job enrichment, teams, goal-setting to support organizational strategy, and training.
NOTE: This assignment must be formatted in an RTF file and submitted in the Assignment Submission button in Bb. See complete instructions located in the course syllabus.
- Read the SLO Projects Section (Assignments) of course syllabus and Project #6 Grading Rubric.
Type your name, course/section, and assignment title in the upper right hand of the paper. Use appropriate headings and paragraphs for readability. Proofread for grammatical and spelling mistakes.
- Read the case study below and answer the following discussion questions. See course syllabus for instructions on proper project completion, format, and Bb submission for grading.
- Type Requirement 1. Then type the entire question. Next, type your complete answer below the question. Then, type the second question, etc.
- If you were the manager of a distressed organization, what specific steps would you take to turn the organization around? Would you consider implementing a high-performance work system? Why or why not?
- What are the primary causes for the sudden change in employee morale at Continental Airlines?
- What actions would you take to ensure that Continental continues its improved performance over the next decade?
- Explain how different employee contribution techniques (e.g., teams, job enrichment, employee empowerment, goal-setting, training, etc.) could serve to continually improve Continental’s performance.
- What additional employee motivational techniques would you recommend to
companies implementing high-performance work systems?
Continental Airlines: One Company’s Flight to Success
In the last decade, Continental Airlines has had a spotty track record. The airline twice filed for bankruptcy, realized diminished performance culminating in a $613 million loss in 1994, and was ranked dead last in industry indicators such as on-time performance among the major carriers. During these years, employees at Continental had undergone several series of layoffs and withstood both wage cuts and delayed wage increases in an effort to slash Continental’s costs. The result of these efforts was a demoralized workforce and a corporate reputation that put Continental near the top of Fortune’s list of “least admired” companies.
Despite this history, things have taken a positive turn for the airline in recent years. Since the arrival of Gordon Bethune, Continental’s new CEO, the company appears to have made a 180-degree turn and is now a highly productive and profitable carrier. Indeed, all indications are that Continental is back on track. For instance, in 1995, the carrier was number 1 in on-time performance for the first time ever and was highly ranked in baggage handling. Customer complaints are down more than 60 percent, and Continental recently gained the distinction of being the number 1 airline in customer satisfaction among the major U.S. carriers for long-distance flights. Just a few years earlier, Continental was last in this category. Moreover, sick leave and on-the-job injuries have decreased, and applications for employment at Continental are back up again. Perhaps most impressive is that Continental posted an all-time record annual profit in 1995, and in 1996 the price of Continental stock rose over 370 percent.
Compared with their listless efforts in the past, workers at Continental are now operating at a productivity level that is quite impressive. But what is the cause of this turnaround? Granted, the airline industry as a whole has realized greater profitability in recent years, but Continental’s feverish change of course has occurred for other reasons as well.
One of the first actions that Bethune took was to refocus the company and streamline operations at Continental. Once in charge of the struggling airline, Bethune eliminated more than 7,000 jobs, dismissed fifty vice presidents and replaced them with twenty new managers, and outsourced much of the carrier’s maintenance work. The thrust of this reorientation embodied Bethune’s efforts and goals to improve company service while abolishing cut-rate fares and cost-based practices. In addition to these explicit streamlining actions, Bethune also changed several practices that had significant symbolic value in the refocusing effort at Continental. For example, surveillance cameras were removed from executive offices, and the cockpits of planes were scheduled to be cleaned every thirty rather than every ninety days.
Perhaps the most important changes, however, were the actions taken to adjust the human resources management practices to facilitate the achievement of the company’s new goals. The first step was to involve the workers in the decision-making processes at Continental. When Bethune arrived and determined that there would have to be layoffs, the employees were given input into the process and decisions. Communication with top management was implemented through a toll-free number established to handle employee complaints. To deal with the sixty calls a day that came in, a committee was created to respond to these problems with a solution within forty-eight hours. Moreover, Bethune invited workers to call his voice mail, and when they called, he called them back.
To demonstrate to the employees that he was serious about their involvement in the company’s success, Bethune also changed performance appraisal practices. He ordered departments to focus on specific targets that were important to customer service rather than on traditional cost-based measures. Consequently, the focus of the performance appraisals shifted toward achievement and facilitation of on-time flights. To emphasize the importance of this goal, management devised an incentive system that promised to pay each employee $65 each month the airline finished in the top half of the Department of Transportation’s rankings. If they achieved the number 1 ranking, each employee would receive $100. In addition, employees were provided with the information they needed to achieve these goals. Automated systems were put in place to let the staff track problems, and supervisors were able to show workers how their daily actions affected performance indicators. To top it all off, once profits started to come in, Bethune paid employees a postponed wage increase that was not due until 1996.
To build on these achievements, Bethune continues to devise new ways to motivate the workers at Continental. For example, in July of 1996, to acknowledge perfect attendance by employees, seven workers were drawn from a list of thousands to receive new sport utility vehicles at the company’s expense.
Since Bethune’s arrival in 1994, employees are paying more attention to their work and there has been a sharp improvement in morale. By focusing on the workers and rewarding them for displaying the behaviors and actions necessary to the company’s success, Bethune is guiding the company in the right direction. Faced with the challenge to turn Continental Airlines around, Gordon Bethune has gained the confidence of his workers by coming through on his promises. He has the entire company rallying around the future success of Continental.
Worrying about a distressed organization deters one’s ability in turning around the situation. To fix the company, a number of steps have to be take including assessment, damage control and developing an action plan…