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HR Management: Lufthansa Group

| March 7, 2015

Human resource Management: Lufthansa Group

Human resource management practices are central to organizational growth and productivity. Particularly, in the airline industry which has been in a state of constant flux, effective HR practices are critical to the organization. Lufthansa, the German airline, is currently one of the leading airlines of the world with a total staff number exceeding 117,000 as per the 2010 statistics. (Lufthansa, 2010) In an arena where bankruptcy and mergers are common it is a credit to the successful HRM practices of Lufthansa that the company achieved operational success in 2010 and the workers were even granted a special bonus payment in Jan 2011. This is really an amazing turn around considering the fact that Lufthansa was on the brink of a bankruptcy in 1991. (Bruch 2011). By 1998 the picture turned and Lufthansa reaped record profits overshadowing the achievements in the previous 70 years of its existence.

As a pioneer of the network alliance concept Lufthansa manages a network of several airlines including Singapore, Austrian, Air New Zealand etc. In order to supervise and effectively manage the integration operations of all the partnering airlines in the network, a ‘People Policy Group’ comprising of HR heads of all these organizations was instituted. By focusing on ‘growth through partnerships’ instead of domination, and by promoting ‘tight cost management’ program Lufthansa managed to turn things around. Opening communication channels or ‘creating communication platforms’ and a strong feedback system by way of employee surveys were key HR initiatives. Furthermore, the HR management at Lufthansa added a strategic component by way of providing continuous skills learning and education. There are continued vocational and professional training opportunities at Lufthansa. As Dr. Sylvia Branke, Director of executive development strategies at Lufthansa says, “The available leadership qualities, competencies, and technical expertise must be in synch with strategic corporate plans and objectives,” (Dr. Branke)

The important component of Lufthansa’s successful HR management program is the ETWeb™ Enterprise software solution that adds transparency to the alliance network’s HR potential so that at any point of time the requirements for positions could be filled quickly from the available pool of talent. The use of software to administer, monitor and evaluate scores for the executive asset management tests further automates the HR task and brings in more transparency. This way it is easier to identify needs and to spot candidates with suitable skills and managerial aptitude for such vacant positions. (Dr. Branke) Thus the complete automation of the HR process at Lufthansa bought about great process optimization and reduced costs associated with talent search and new recruitment process. Lufthansa has set global standards in strategic HR management. At Lufthansa School of business the focus is on improving the managerial skills and business performance skills of the employees. As Thomas Sattelberger, the former HR development vice president at Lufthansa says, “to support inter-organizational learning of partner companies, to build a strong alliance glue and network culture but most of all to create a shared customer obsessed alliance spirit”. (Stiles & Trevor, 2006)

HR practices at Lufthansa are among the best in the industry and are at the core of the organizational success over the last 15 years. A fully automated software solution offers excellent talent management functions and provides more transparency across the entire network alliance group helping with swift staff allocation when and where necessary. Frequent, regular and multiple feedback systems help the organization obtain better appraisal of employee concerns. Addressing this emotional component is very critical for motivation and overall production efficiency. The opportunity to continuously improve via the elearning system provides the employees with the necessary skills to improve their managerial potential making them qualified for higher positions. This focus on the continuous development of its human capital by a strong HR management system has lead to Lufthansa achieving great strides and a flying success at a time when many airlines have disintegrated under the global economic downturn.
Bibliography
1) Lufthansa (2010), Annual report 2010, viewed Nov 14th 2011 , <http://reports.lufthansa.com/2010/ar/groupmanagementreport/employees.html>
2) Dr. Heike Bruch, (2001), The Turnaround at Lufthansa : Learning from the Change Process, viewed Nov 14th 2011, <http://teaching.fec.anu.edu.au/MGMT2035/change_airline.pdf>
3) Dr. Sylvia Branke, ExecuTrack: Strategic Executive Planning gets a lift, Viewed Nov 14th 2011, < http://www.nixfon.com/pdf/CaseStudies/casestudy_lufthansa.pdf>
4) Dr. Philip Stiles & Jonathan Trevor (2006), Best Practices and key themes in global Human resource management, Viewed Nov 14th 2011, < http://www.cihrm.jbs.cam.ac.uk/research/downloads/ghrra_report.pdf>

Category: Business Essay Examples, Essay & Dissertation Samples, Management