Sample Essay: Jet Blue Airways: Starting From Scratch

Three National Equal Employment Opportunities Laws

Jet Blue Airways was established to adhere to corporate values of safety, caring, integrity, fun, and passion (Gittel & O’Reilly, 2001).  These values, in turn, became the basis for the human resources policies and procedures established by the company.  As a player in the highly service-oriented airline industry, the company’s commitment to its corporate values has enabled it to adhere to several key tenets of the Equal Employment Opportunity policies under the 1964 Civil Rights Act.  In particular, the Equal Employment Opportunity “prohibit the discriminatory practices in hiring, discharging, promotion, layoff, and pay of workers…these policies extend to the training, selection, or recruitment of workers” (United States Commission on Human Rights 1966, p.1).  In view of Jet Airways, one key policy that ensured that it complied with, and even surpassed, the equal opportunity tenet was on the aspect of pay.  In particular, the company provided customized employment packages intended to “ensure overall equity in treatment” (Gittel & O’Reilly 2001, p.10).  The company also waived the probationary period, which meant that employees were certain of job security.  Furthermore, the company also gave above industry compensation, medical benefits, and profit-sharing benefits to the “most overlooked group in the industry - the customer service and ramp workers” (Gittel & O’Reilly 2001, p.11).  Hence, as a service-oriented company that employs a lot of people, Jet Blue Airways and its recruitment policies are also significantly influenced by the Equal Pay Act, which “protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination (Equal Employment Opportunity Commission, 2009).  Consequently, since the company provides 401K benefits and insurance benefits, the company is adhering to the spirit of the Age Discrimination in Employment Act of 1967 which protects individuals 40 years and above (Equal Employment Opportunity commission, 2009).  The long-term compensation and added benefits provided by Jet Blue Airways are designed so that even older employees are taken cared of.

While the human resources policies of Jet Blue Airways are extremely pro-employee, the management is very strict about drug and alcohol abuse since these acts run counter to the safety code of the company.  Drugs and alcohol abuse is one condition not protected by under Title I and Title V of the Americans with Disabilities Act of 1990.  This means that companies have the right not to hire and to fire people who are confirmed drug and alcohol abusers.

Recruitment Efforts

External Recruitment

External Recruitment entails hiring people with the help of other from organizations (e.g. headhunters, employment firms, etc.) and through endorsements.  In the case of Jet Blue Airways, the company’s external recruitment policy was evident its practice of hiring talented, committed people from other airlines.  Examples of externally hired people included most of the company’s top management team, one of whom was president and Chief Operating Officer (COO) Dave Barger who previously worked for Continental Airlines.  The company also externally hired pilots from other carriers who were friends of pilots already working for Jet Blue Airways.

Internal Recruitment

Consequently, the company also practiced internal recruitment, which entailed hiring from within the company or an affiliated one.  A good example on how Jet Blue Airways applied internal recruitment was in the hiring of Ann Rhoades, who previously worked for Southwest Airlines.  Her hiring was internal by nature because Jet Blue founder David Neeleman and Ms. Rhoades used to be colleagues when Neeleman’s Morris Air was bought by Southwest Airlines.  In effect, both Neeleman and Rhoades were already previously working for one organization (i.e. Southwest Airlines) and hence there was no need for Neeleman to enlist the help of a head hunter or employment agency or seek referrals in hiring Rhoades.

Another internal method of recruitment practiced by the company entailed job postings.  An example was the local newspaper advertisement the company did in Salt Lake City for reservation agents.

Effects of Recruitment Effort

The focus of Jet Blue Airways of hiring highly competent, well experienced personnel in managerial and operational positions translates to increased costs for the company.  For example, the company provides salaries and benefits that are above industry standards.  Furthermore, employees are provided complete medical benefits, extended leaves, and other perks.  Meanwhile, the company also shoulders pilot training unlike other carriers.  Essentially, the company provides generous compensation packages because they recruit the best, most committed people who subscribe to the company’s culture.

The company’s internal recruitment efforts for its reservations agents were a success considering that 2,500 applicants applied for the job.  This internal recruitment initiative entailed a job posting performed by the company at a local newspaper.  Meanwhile, Jet Blue Airways’ external recruitment efforts using referrals has allowed it to tap well-trained, highly experienced airline pilots, mechanics, and technical personnel.  The fact that the company’s management were held in high esteem was other carriers in the industry translated into the recruitment of a string, dynamic management team.

Personnel Selection

Personnel Interview Process for Pilot and Mechanics

In recruiting mechanics and pilots, which are the most sensitive and vital positions in an airline, Jet Blue management looked for applicants who displayed integrity and showed traits consistent with company values of safety, caring, integrity, fun, and passion.  For mechanics, management conducts an interview process wherein the applicants were asked on how they handled sensitive, ethical dilemmas and situations in their previous company.  Consequently, Jet Blue officials hired those who did not compromise on passenger safety like the case of a mechanic who incurred the ire of his former bosses because he did not “sign off” or certify an aircraft because it did not comply with standards.  Meanwhile, in recruiting pilots, Jet Blue COO Dave Berger required people who were not only well-versed in computers, but also displayed a cultural fit with the Jet Blue organization.  This is extremely vital because the company incurred a heavy investment on pilots by paying their pilot certification training (i.e. US$30,000 per pilot), which other carriers did not do.  In return for the investment, Jet Blue officials expects commitment to the company’s values and culture.

Performance Appraisal System

Factors that Influence Performance Evaluation

Performance evaluation is a tedious process that takes into consideration various factors impinging on it.  One key factor is existing legislation that requires performance evaluation processes to be nondiscriminatory.  For example, performance evaluation that accounted for racial, gender, religious stereotypes are considered discriminatory under the 1964 Civil Rights Act.  Another factor concerns the influence of labor unions.  As mentioned in the Jet Blue case, labor unions are used to standardization in employment compensation packages.  This policy definitely runs counter to the customized compensation policy of the company, which is also a reason why Jet Blue officials refuse to let union activity take root in the company.  A third factor influencing performance evaluation is corporate culture.  The company leadership expects employees to commit to values and philosophy of the organization and they are assessed as to how well they live to the company credo.  In the case of Jet Blue, employees are rated in terms of how well they nurture safety, integrity, a caring attitude, passion and fun in the work place.

360-degree Feedback Evaluation

The 360-degree feedback evaluation is a type of employee performance evaluation that adheres to a multi-unit approach to feedback that includes not only employees and their supervisors, but also external and internal customers, peers, and sub-ordinates (United States Office of Personnel 1997).  This type of feedback system has several advantages.  For one, the appraisal tends to be more objective considering that multiple sources of information are derived to evaluate an employee.  In traditional performance evaluations, an employee is simply assessed by his or her supervisor.  This is a very limited form of appraisal since only one person’s view is taken into consideration.  Another advantage of the 36-degree model is the quality of information derived.  The opinions and insights of a broad number of people allows for diverse perspectives about the employee, which leads to a more balanced, relevant evaluation.  A third advantage of the 360-degree feedback system is that it helps to “gain agreement on expectations” (United States Office of Personnel 1997, p. 66).  With more people involved in setting performance benchmarks and norms of behavior, and determining compliance to these, the easier it is for employees to participate and agree on the assessment process.

In the case of Jet Blue Airways, the 360-degree performance evaluation system will benefit the company in terms of ensuring consistency in the quality of service provided to airline passengers.  To satisfy customers and succeed in the airline industry, Jet Blue needs to properly monitor and evaluate the performance of diverse groups of people such as in-flight crews, pilots, technical and maintenance people, ground crews, customer services, administrative personnel, among others.  Naturally, each group has its own concerns and interests, which need to be communicated to management.  If the performance appraisal is confined only to the employee-supervisor level, and leave out feedback from other groups, then the chances of Jet Blue management receiving subjective, incomplete, biased feedback increases.  If all groups are involved in the feedback and evaluation process, management will be able to draw a more complete picture of the overall operating performance of the company and address all employee concerns.  This is crucial so that employees will be motivated to deliver the best service to customers.

Employee Related Factors in Compensation

Compensation is the most basic right and need for employees.  Consequently, every employee needs to be given fair compensation for the work provided, but of course, the type of compensation will depends on several factors.  One is the level of competence or skills of the employee.  Competence is contingent such variables as educational attainment and previous training and enrichment. Another factor is length of experience.  Personnel with more work experience and knowhow on a specific job will naturally be assigned a higher salary compared with someone who just graduated from college.  A third factor is performance.  An employee who has shown better results and work habits will inevitably be rewarded more than someone with a sub-standard performance.  A fourth factor lies in the scope of responsibility.  Employees need to know what functions and duties they have to do; the specific outcomes expected of them; and what person, unit, or department they are accountable to.  Basically, the larger the scope of responsibility assigned to an employee, the higher the pay he or she gets.  As cited Allbusines.com (2009), the pay structure is usually made up several components namely a) basic salary, b) provision for bonuses, c) long-term benefits such as stock options or grants, and pension plans  d) insurance (e.g. health, disability, life, etc.), e) retirements plans such as 401K, f) time off and flexible schedules, and g) other miscellaneous items.

Discretionary Employee Benefits

Discretionary employee benefits pertain to compensation other than hourly wage or salary (Martocchio, 2009).  There are several types of discretionary benefits, one of which are protection programs.  These programs involve various kinds of insurance packages for the benefit of the employee such as disability insurance, life insurance and retirement plans (Martocchio, 2009).  Another type of discretionary benefit is a term called paid time.  This refers to vacation leaves, sick leaves, and holidays.  A third type of discretionary employee benefit involves accommodations and enhancements (Martocchio 2009).  These cover a sleuth of programs that promote the mental, physical, and emotional well being of employees such as family assistance programs, skills and knowledge acquisition (e.g. continuing education or schooling), flexible work schedules, and other incentives to motivate personnel (Martocchio 2009).

Jet Blue Airways as a company provides very generous discretionary benefits to its employees.  For example, all workers receive medical insurance, 401k plans, and profit-sharing incentives.  Furthermore, full-time workers are allowed personal time off when necessary and get double pay when they work on holidays.  For its flight attendants, the company also provides accommodations and enhancements such as flexible work hours, travel and vacation perks, and family time off.  Meanwhile, the company has instituted a “work from home” policy for reservations agents and allowed top management to hold office in their areas of residence so as not to “disrupt their families and personal lives” (Gittel & O’Reilly 2001, p.5).  Overall, Jet Blue Airways has lived up to its mission of caring for its people.

References

Allbusiness.com (2009). Key Compensation Components. Retrieved December 12, 2009 from:

http://www.allbusiness.com/human-resources/compensation/794-1.html

Gittel, J.H and O’Reilly, C. (2001). Jet Blue Airways: Starting from Scratch. Harvard Business

School, Boston, M.A.: Harvard Business School Publishing

Martocchio, J.J. (2009).  The Costs of Employee Benefits. Retrieved December 8, 2009 from:

www.routledge.com/textbooks/0415396867/slides/11.ppt

The United States Commission on Civil Rights (1969). Equal Opportunity under Federal law.

The University of Maryland School of Law

The United Office of Personnel Management (1997). 360-Degree Assessment: An Overview.

Performance Management Practitioner series