HUMAN RESOURCE MANAGEMENTABB 10902

Malaysian Airline System Berhad (MAS) Human Capital Issues and Strategic SolutionProgram:Bachelor of Aviation Management, UniKL MIAT

By:

Muhammad Afiq Aqwa Md Mansor - 53276210188Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Muhamad Nazmi Mohd Ghazali - 53276210296Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Atikah Muhd Sahar - 53276210024Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Nur Fatin Che Soh - 53276210022Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Date submitted:14 April 2011

Abstract

The case deals with the problems faced by the Malaysian Airlines, the national flag air carrier of Malaysia. While the company had many notable achievements, since the 1970s, it began to face major financial trouble since late 1990s. The case examines the strategies pursued by MAS to overcome the challenges. The case also describes a brief description of demands and challenges in the international airline industry.

Purpose This study seeks to investigate, through the Human Resources Management practices in the context of several issues discussed, whether the issues are manageable and gives an impact to the whole organization.

Design/methodology/approach A discussion was held with the lecturer of Human Resources Management and several experienced lecturers that have been a managers in the industry itself at the specific department. The theories are applied in this research and been transformed into a model. The model is developed; we come out with additional theories. Our group has come with a hypothesis that performance of a company tallies with the Human Resources Management strategies and efficiency because the output of the individual performance can affect the whole organization performance. We are required to look for issues that are related to Human Resources Management in a particular company and seek for solution to handle an issue. Then, a deeper exploratory factor analysis is used from a conducted interview with the Human Resources Management in the company itself focusing on the Engineering Department in MAS.

Findings The dominant issues in HRM practices in MAS were found to be: Tangibles, Recovery, Responsiveness, and Knowledge.Further results indicate that, although the direct effect of HRM practices is important, the indirect effect with MAS handling the matters in the way of practicing the human resources management theories that we have learnt is a stronger driver for the organization to perform its best. Through our findings and methodology that is we sent a general questions to the interviewees that are related to our research and we add new questions based on the interviewees reaction and answers.

Research limitations/implications A notable limitation is that the present study focuses only on the airline services and uses only one industry (Air transportation industry) to illustrate the findings. Future research should examine other aviation service categories.

Introduction

The commercial airline is an extremely competitive, safety-sensitive, high technology service industry. People, employees and customers, not products and machines, must be the arena of an organisations core competence. The implications are vast and pervasive affecting no less than the organisations structure, strategy, culture, and numerous operational activities. Pertaining to this, a lots of issues of Human Resources Management arises in retaining the competencies. Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Human Resources Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. Strategic planning and management are more than a set of managerial tools. Train some of the employees in the area of time management, material handling at work etc. Retrenchment of surplus employees caused due to superior speed Pay for performance Promotions based on efficiency High quality work environment at the production place.These human resource issues are also known as functional strategies ofHRM. In many cases the response to the problem or opportunity will require the continuous attention of senior managementof the organization. Be interconnected with other issues and developments.Sub-optimisation, or poor quality in regards to management, decision making, teamwork, employee motivation, or communication can translate into loss of customers, loss of market share, loss of organisation assets, and above all, loss of life. In such a safety-sensitive, customer service-centric environment, the traditional product-centred industrial model of corporate structures and industrial relations is inappropriate. Human resource management (HRM) expertise is required now, more than ever, to spearhead internal marketing strategies in order to gain customer lock-on. The primary area of focus of strategy is the manner in which the HR department in MAS.

Malaysian Airline System Berhad (MAS) Background

Malaysian Airline System Berhad(MYX:3786),DBAMalaysia Airlines(abbreviatedMAS), is the government-ownedflag carrierofMalaysia. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport, and its secondary hub inBayan Lepas, Pulau Pinang. It has its headquarters on the grounds ofSultan Abdul Aziz Shah AirportinSubang, Selangor.

Organisational vision

To be the largest, most successful and most respected airline in the world.

The Beginning

Malaysia Airways Ltd. (MAL) was founded in 1947 by British Overseas Airways Corporation (BOAC - now British Airways), Ocean Steamship Company of Liverpool and the Straits Steamship Company of Singapore. By the end of 1947, Malayan Airways engaged in an expansion exercise and MAL began providing regional flight services. The presence of BOAC also facilitated MAL's entry as a member of IATA. A year after the Independence of Malaya in 1957 and with the participation of BOAC, QANTAS, the government of the Federation of Malaya, Singapore and the Territory of North Borneo, MAL was launched as a public limited company. MAL then entered the jet age with the purchase of Vickers Viscount aircraft and by 1960 MAL propelled into other far-flung regions of Asia. The acquisition of an 82-seater Briston Britania in 1960 made mass transport by air a reality. This marked the first international non-stop service for MAL, which operated directly between Kuala Lumpur and Hong Kong.

After the formation of Malaysia in 1963, the airline was renamed as Malaysian Airlines Limited (MAL). The formation of a new nation saw the need for MAL to be a national carrier to integrate and connect the far corners of Malaysia. Two years later, Borneo Airways merged with MAL resulting in fleet and network expansion. In 1966, the Governments of Malaysia and Singapore became the majority shareholders in the national carrier and Malaysia-Singapore Airlines (MSA) was formed. In 1971, the partnership between Malaysia and Singapore was dissolved, and Malaysia Airlines Berhad was incorporated. With an authorized capital of RM100 million1, the company made a final revision to its name in November 1971, and Malaysian Airline System Berhad (MAS) was born. By 1972, Malaysian Airline System was already servicing 34 domestic routes and six international destinations.

Modernization

The year 1976 saw MAS enter the information age, when it computerized its wholeoperation. In the 1980s, MAS became the first major government agency to be privatizedbut a change of business practice did not change the company's focus on being customer driven. As part of its modernization and expansion, MAS also invested in a new maintenance hangar facility, as well as extending its catering facilities in Subang, where the then international airport of Malaysia was located. As a final part of the restructuring exercise, MAS moved into its new corporate headquarters to a 36-storey building, which became the hub for the future direction of the company.

Global reach

The year 1986 saw MAS offer the first flight service to the United States. By the end of 1987, MAS had established itself as an international carrier of choice, offering 34 domestic routes and 27 international destinations. MAS changed its corporate identity and became known as MAS, with the objectives to create a greater awareness of Malaysia. As part of its fleet modernization program, MAS invested RM9.6 billion to expand its fleet of aircrafts in 1991.As of March 2001; MAS had a fleet of 95 aircrafts in its network serving over 114 destinations.

Achievements

MAS received international acclaim from many independent organizations for various aspects of its services. Its top management team received an award from the Asian Institute of Management and the World Executive Digest, for its excellence in general management and success in positioning itself in the airline industry. MAS received numerous awards in the airline industry, advertising industry, world-class publications, NGOs, private institutions, and independent research groups. Even during the economic downturn, some of its achievements were notable.

Arises Issues Problem 1 - Push and pull factor for the employeesIssue - The push and pull factor is the common problem in any airline industry whereby the pay for the job is demandable and varies according to the offer that is made by the airlines especially for the License Aircraft Engineers (LAE). From our interview, this situation is often happen in the engineering department in MAS whereby the experienced LAEs that have worked for them for more than 10 years walk away to work with another airlines because of the pulling factor made by the other airlines such as higher salary, more benefits for the employees, exclusive and different working environment, opportunities to live outside of Malaysia and many more pulling factors that are the cause of this situation happens. Same goes to the pushing factor which is the internal factor of the company that causes the employee to walk away from MAS.Discussion - According to Mr. Abdul Rashid Sharif and his companion Mr. Muhammad Hilmi Mokhtar, from the Human Resources Management in MAS Aerospace Engineering (MAE) department the pulling factor from another airline is normal to MAS where other airlines like in the Middle East such as Emirates were expanding and they need ready-made engineers who have working experiences and attitude in supporting their expansion. At the same time, Emirates needed to employ massive numbers of experienced and new employees as fast as possible. This is where the pulling factor is so strong. Same goes to the national low cost carrier, Air Asia whereby a lot of young engineers who have work in MAS for only about 2 to 3 years are being offered by Air Asia to work with them and they paid double or triple the salary that they can get in MAS. Even the veteran who has worked in MAS for more than 15 years left to Air Asia. Then, raise another question, did MAS aware the pushing factor that cause so many of their engineers left the company? Pushing factor for MAS is where the airline is bleeding money during in 2005 to 2007. MAS were having a financial problem and the motivation of MAS workers at that time were at the lowest. As for the employee who did not satisfy with their salary and they were afraid that they will be terminated due to the financial crisis, the employee seeks for another airlines that having more stable in terms of financial and employment management and it was an opportunity for them to get higher salary and make a better living. An information that we get from to our lecturer, Mr. Maulan Bardai, who was once an employee and appointed Manager in the HR Engineering Department in MAS said that if an employee who wants to leave MAS will have to fill up a resignation from. In that form, the employee needs to tell the reasons to leave the company. And by doing so, the company knows what is the reasons that become the pushing factor that cause the employees to leave MAS. So, the employees were leaving MAS for a strong push and pull factor. It is a difficult time for MAS to minimize the pushing factor.

As a measure to deal with this problem, MAS have to hire expatriates of engineers from other airlines such as Qantas, Lufthansa, SIA and many more airlines trough out the world. Currently, there are more than 60 expatriates engineers that work in MAS. MAS also had taken an action to minimize the pushing factor by restructuring their corporate strategy. MAS Aerospace Engineering (MAE) has rebranding their vision which is to be the preferred global MRO organization and their new mission is to deliver excellent aerospace engineering services, provide value to customers, maximize returns to stakeholders and be the employer of choice. By rebranding their new vision and mission, MAS Aerospace Engineering comes with the values of safety and quality, passion for excellence, integrity, teamwork and business sense (serve customer, make money, save money). As a result, MAS Aerospace Engineering has been Awarded Asia Pacific Airframes MRO Center of the Year by Frost & Sullivan and Aviation Weeks Overhaul & Maintenance 2009 Best Asia-Pacific Airline MRO Operation. This achievement has made MAS Aerospace Engineering the preferred choice in Asia Pacific region and in the whole world. Further on, MAS has successfully minimizing the pushing factor and this also has become the strong pulling factors for the engineers to stay working in MAS.Deepening into this problem, another issue that is very critical in MAS is the job design issue. Job design is the role that plays by a particular person in a particular job. For example, the store man in MAS. The store man in MAS is not wide and it is limited only to that role. According to Mr. Maulan opinion, job design is a good solution to minimize pushing factor in a company. If the design of the job is wide and variety, the capacity of earnings can be maximize and the job scope of that particular employee has been enlarged. Furthermore, the salary of the employee can be higher and thus this will lead to maximization of job satisfaction to the employees. This can help to reduce the pushing factor in one organization. In addition, Mr. Maulan stated that, he was doing his research in 1992-1993 about MAS job design. He found that MAS job design is the just the same from 1972, the year MAS was established until 2003 which is the year Mr. Maulan resigned from MAS. However, until now, we still not sure whether the job design in MAS has been revise to widen the scope of the job.

Opinion In our opinion regarding the pull and push factors, the organization have to minimize the pushing factors that causing employee to run-away from the company and work with another company since the pulling factors are cannot be controlled by the management. The organization needs to practice a healthy and friendly working environment in order to minimize the pushing factors and keep the employees motivation at peak. Besides that, the company has to maintain the performance of the organization to avoid pushing factor and be competitive.

Problem 2 - Discriminations and diversity practicesIssue Discrimination means unfair treatment of a person or group on the basis of prejudice. In other words biasness or unfairness. Discrimination in this case usually refers to gender discrimination between men and women where women always being looks down by men, or where women have to compete in the men world. On other hand, the "business case for diversity", theorizes that in a global marketplace, a company that employs a diverse workforce (both men and women, people of many generations, people from ethnically and racially diverse in backgrounds and have different traits. In the aviation industry, diversity practices are applied whereby, men and women work together, differs from ethnicity, backgrounds and beliefs and also work with the people from all around the world because aviation industry is a global industry. But there is a gap between men and women capabilities where women cannot go for a higher position or higher management job such as being appointed as a Managing Director and Chief Executive Officer (C.E.O) and likewise. The term is called glass ceilingDiscussion From our interviews, both men and women are treated equally in MAS until it reach at certain things that are requires consideration from both men and women. According to Mr. Rashid, in MAS Aerospace Engineering, men and women are treated fairly. Men and women are doing the same job appointed to them. MAS practices a strong teamwork in their working environment whereby men and women have to collaborate to make sure the job done is at the best quality. When come to a certain level where women who does the technical job such as maintaining the Power plant unit, airframe maintenance, cabin, avionics instruments, auxiliary power unit (APU), radio and many more technical work. After the women get married and have kids, the women engineers or technician will be given an option to be moved to the white collar work. The women engineers given a choice to change to office environment that is proper to married women. The term white-collar worker refers to a salaried professional who performs semi-professional office, administrative, marketing and sales coordination tasks, as opposed to a blue-collar worker, whose job requires manual labor. On the other hand, women who work for MAS have been given other benefit which is a protection for them. Women who have work until late night or working until more than 2200 hour (10 p.m.), they will be provided a free transportation by MAS to send them home. This benefit is stated in the Employment Act 1955 (Act 265) (refer to Appendix 4). This benefit applies to all women either in technical job or in the white collar job. This is to protect the women employees and to give equal right for the women to compete with men. In addition to that, there are also several more benefits as stated in in the Employment Act such as maternity leave.Besides that, MAS also have an issue of gender bias practices. In this issue, MAS has discriminated the unfair and unequal treatment of the female cabin crew has a direct impact on women's access to equal opportunities. A memorandum on gender bias practices by the MAS by the joint initiative against gender discrimination was made. The Joint Initiative (refer to appendix 1) strongly disagrees with the discriminatory practices of MAS. They believe that MAS has discriminated against female cabin crew on the basis of gender and denied them of their right to work in a non-discriminatory and stress-free environment. Bearing in mind women workers make up 60% (2300) of the MAS cabin crew, it is their inalienable right to fair and equal treatment. This memorandum seeks avenues to end gender-based discriminatory practices and to recognize women workers' right to equality and justice. Further on, MAS have an issue regarding the discrimination retirement policy to women stewardess. Women stewardess in MAS has to retire at the age of 40 and another five years extra for those in senior positions. This discrimination is even more pointed when compared to their male stewardess, in which male flight attendants are given the option of retiring at the age of 55(refer to appendix 2). In this issue, it has become a problem where women who have reached the age of 40 and above are not as attractive as they used to be. This issue has thickening the layer of discrimination to the already sexist and age-ist statement. MAS should start to value their employees beyond perceived gender stereotypes and instead take a REAL look at these women who are vibrant, intelligent and attractive, and who possess an added advantage - experience. If not, and if such ancient principles are continued to be enforced, MAS might find itself in the precarious position of losing such experienced stewardess.

Opinion From our perspective, MAS did face the discrimination problem frequently. MAS did try to avoid discrimination between their workers and as one of their values is integrity and teamwork in their working environment has made them success. MAS did counter the problem and manage to solve it on its own way. In MAS, both women and men can work in harmony and equally as every opportunity provided by MAS to both men and women are the same as long as they achieve their mission and vision. Diversity in a working environment is a good and conducive working environment.

Problem 3 - Employees Union (MASEU)Issue - Employees Union is a representative of the group of the employees in the company to represent the employees. Employees Union is usually a separate management of the company and the employee. It is a group. And the union will voice out to the company administration about what they want and they demanded a negotiation between them members and the companys management. They will negotiate about their salary, benefits, allowances and many other things. Same goes to MAS. In MAS, there is an Employee Union which is called, MAS Employees Union (MASEU) and it is classified as an association. MASEU is the representative of the group people in the company to voice out about their salary, benefits that they can get while working in MAS, what they did not satisfy with the company and many more.

Discussion in 1971, five new joint councils were introduced without collective bargaining rights. Henceforth, the scope of the unions role was limited and it merely assumed consultation status the government. In essence, the government would solely decide on most matters affecting the workers and unions.The same year witnessed the Malaysian Airlines System Employees Union action, which received solidarity support from international workers organizations. This provided the pretext for more restrictive trade union and labour relations laws to control public and private sector unions. A strike was held in an action of demanding pay rise from MAS and resulting the operation of MAS was disrupted. MAS been closed for 2 weeks. About the same time, CUEPACS deputy president A. Ragunathan and secretary general Jamaluddin bin Mohd. Isa had also visited Tun Dr. Mahathir Mohamad and, within two weeks, the bickering between CUEPACS leaders and the Malaysian Trades Union Congress (MTUC) became public. That is the beginning of the Employees Union problem. Then, cames several more of the MASEU problem such as demanding of their rights and fairness as mentioned in above issue. MASEU intervention to the management of MAS regarding the dissatisfaction of the demotion of workman, Ungku Yacob Ungku Suleiman (refers to Appendix 3). This case has been up to the court and it is between MASEU and MAS berhad (Malaysian airlines system bhd v. Malaysian airlines system employees union peninsular Malaysia industrial court, Johor). The union was unhappy with the decision of the company to demote the workman from the position of customer services officer, a Grade C position to the lower position of customer services agent, a Grade B position. This is a trade dispute referred to the Court by the Honourable Minister of the Human Resources under s. 26(2) of the Industrial Relations Act 1967 ('the Act'). It is in respects of the demotion of one Ungku Yacob Ungku Suleiman ('the workman'), a member of the Malaysian Airlines System Employees Union, Peninsular Malaysia ('the union') by the Malaysian Airlines System Berhad ('the company').MASEU has been demanding more and more to MAS about pay rise and more benefits for their members for quite some time and what MAS do to overcome this problem is by dealing closely with MASEU, negotiating with MASEU representative and tried to reasoning with them. MAS cannot simply ignore MASEU because it is protected by the Act and laws. So, what MAS management do is by to treating MASEU nicely. Besides that, MAS also have gained the benefits for their employees to void any dissatisfaction and problems arise by MASEU.Opinion Appointing the Employee Union in MAS (MASEU), we observe that Employee Union is a good platform to find out what the employees wants and to survey how the HRM efficiency can be improved from the Employee Union. HRM can work together with Employee Union to handle the problems regarding the Human Capital Management. Further on, MAS can use MASEU as a platform to negotiating with the employees.

Problem 4 Competencies (Asset or Liabilities)Issue - What is a k-employee, and who is worthy of such a title? Much has been written on the subject of k-employees, and in our opinion most of it flat misses the mark. In fact, go so far as to say that what most people refer to as k-employees are not really assets, but rather large liabilities. If you allow your organization to be held hostage by those employees who feel like they are indispensable, you are only exacerbating the problem. The need to retain talent and reduce turnover, disputing the conventional wisdom of how most businesses address the risk of managing key employees. A fresh perspective on the employees competencies. Discussion - To be a competitive airline, the airline should have better performance to compete with other airlines in the world. That was how Malaysia Airlines did to be one of the competitive airlines and become 5 star airlines in the world. Started from domestic carrier in 1947, Malaysia Airlines turned into an international airline in less than a decade. Today, Malaysia Airlines flies around 50,000 passengers daily to some 100 destinations worldwide. The airline holds a lengthy record of service and best practices excellence, having received more than 100 awards in the last 10 years. During our visit at MAS Aerospace Engineering, Mr. Abdul Rashid who is a Manager Staff Affairs and Human Resources and his colleagues, Mr. Muhammad Hilmi Mokhtar said that there are several methods to maintain and improve the organization performance especially in the Engineering Division. Starting from recruitment, they are very strict in selected those employees. They have adopted one method known as, Aptitude Skills Knowledge (ASK). ASK method is that, they need a discipline, punctual and smart employee. Rather than that, they need an employee that has a skills pertaining to the position offered and additional knowledge in aviation field. Besides, the candidate needs to match those requirement that stated by the organization. From ASK method, MAS can filter those who are only the best to work with them and this way, MAS can control the quality of their job and performance of their organization.Moreover, they applied Personal Fatigue Delay (PFD) in order to produce a productivity employee. PFD is the method to measure the working hours of the employee used/spent during carried out the job. These PFD must meet the Day in Life out (DILO) working portion. As example, in Engineering and Maintenance Division, the DILO is 80%. It means that, an employee that work 10 hours a day need to perform 80% from their working hours ; 10hrs x 80% = 8hours. 8 hours is the useful hour to the employee to perform their work, while the other 2 hours is the deduction hours from 10 hours. Usually, the other 2 hours, are for another living activities as a human being that includes going for a break, eat and many more. That was how the organization measured the productivity of the employees towards to be a performance organization.Since they have introduced and practiced lots of method, unfortunately there are several causes and effects to the organization. These cause and effect need to be monitored and prevented; otherwise it will affect the organization performance. Regarding to Mr. Hilmi, they have adopted cause and effect diagram by Kaoru Ishikawa (refer to appendix 5). The cause & effect diagram is the brainchild of Kaoru Ishikawa, who pioneered quality management processes in the Kawasaki shipyards and in the process, became one of the founding fathers of modern management. The cause and effect diagram is used to explore all the potential or real causes (or inputs) that result in a single effect (or output). Causes are arranged according to their level of importance or detail, resulting in a depiction of relationships and hierarchy of events. This can help the organization search for root causes, identify areas where there may be problems, and compare the relative importance of different causes. Opinion In our opinion, Mr Rashid, Mr Hilmi and other colleagues did a great job in order to match their productivity to what they can do to the organization. They have introduced, developed and applied lots of methods to improve and maintain the organization performance. Even though there are effects or causes to the organization, they applied Hot-Stove Principle, created several methods of solution and took an immediate action. Last but not least, to be a competent and effective organization, an organization cannot stand alone without individuals or people who are supposing to support them at any level. Each of the divisions or departments need to corporate together towards achieving the organization objectives.

Learning Points

Ethics and Moral perspective

Sensing a need to connect ethics and moral in Human resource is important in Human Resources Management. Referring to our first problem that is discrimination and diversity practices in the corporate environment, ethics and moral plays an important role in HRM. Ethics include fairness, judgmental, beliefs, justice and many more that are related to ethics and moral. In our observation, ethics and moral is the base line in managing Human Resources. We can relate that in managing human resources, we need to be fair, justice in making actions, no discrimination, we have to be diverse in beliefs and background, we have to be inclusive and motivation based on ideas of right and wrong. In concerned with principles of right and wrong or conforming to standards of behavior and character based on those principles; "moral sense"; "a moral scrutiny"; "a moral lesson"; "a moral quandary"; "moral convictions"; "a moral life" is applied in Human Resource Management. A Code of Conduct is a written collection of the rules, principles, values, and employee expectations, behavior, and relationships that an organization considers significant and believes are fundamental to their successful operation. A code of conduct enumerates those standards and values that make an organization remarkable and that enable it to stand out from similar organizations.

Aligning with the corporate strategy

In addressing our fourth problem that is Competencies (asset or liabilities) , the objective has been to improve liquidity through better yield management, effective management, and better organizational structure, pre-planning of corporate structure and needs for committed in working capabilities. Moreover, key employee title is a good motivation for the employee to improve their working performance as an individual thus; if an individual is performing well, the organization also will perform well. In addition, it aims to initiate efforts to normalize its leverage and capital structure to bring HRM more in line with its corporate strategy to compete in the industry. HRM also strive to be standard in terms of operational productivity, service levels and costs. Its focus is on improving quality and efficiency, and putting a halt to all form of abuse within the organization. HRM intends to reassess the effectiveness of its role in corporate network and trying to give the best out of it. This involves reviewing the viability of the existing plan structure and organization; and the realigning and re deploying of its men power capacity to markets that offer the greatest opportunities for all. Furthermore, HRM has instituted various improvement programs to raise efficiency and productivity levels to industry standards. Mutually beneficial cooperation, alliances and tactical arrangements are also being explored with interested industry.

Deepening into employment act studies

From our visit, Mr. Abdul Rashid Sharif suggested that student that study management should go into deep learning about Employment Act. Referring to our second and third problem that is Discrimination and diversity practices and Employee union , in Human Resource Management, Employment Act is a part of the guidance and rules especially when it comes to hiring, firing, promoting, laboring and many more that are connected with the employment. Some company simply just ignoring the Employment Act and they did not conducting their employees according to the law. Nowadays, employees are protected by the law and employers cannot simply hiring and firing the employee. Employers who are recruiting must know and understand the laws, and at the same time follow the laws that are stated in the Employment Act.

Up to date with current situation

From the methodology of our research, from what we can sum up is that we can get the most current issue of what happen in the industry. From this point of learning, we can get something that is more that we can learn in the lecture and in the books. We can just learn the theories from the lecture and on the surface understanding of the theories. But, in this exercise, we can relate the theories with the real life working environment. Thus, it helps us to enhance our understanding in this subject and we can practice our knowledge from the theories and make it into a new theory. Furthermore, by practicing this exercise, we can also get more opinion and gain experiences from the experienced people in the industry. Their opinion and experiences are priceless in contrast to what we can pay to learnt in the class.Conclusion

In conclusion, our research made it clear for us to recognize the theories that we have learn in the class and applied it in this research. This is directly as a practical exercise for us in understanding more about this subject and its significance in our study. From our hypothesis and observation, whether Human resources Management giving an impact to the whole organizations performance. The can relate that the theories that we have learnt in the class and books is successfully applied in this research and we conclude that the hypothesis is true that Human Resource Management give a big impact to the whole organizations performance. The issue stated in this research proves that an efficient Human Resource Management is crucial in an organization to be success. The primary area of focus of strategy is the manner in which the HR department in general aligns activities, policies and procedures with the recruitment and selection and diversity and equal opportunity imperatives of the organisation. Each of the individual positions has characteristics that may be used to expand and/or defend their sustainability of their business growth.

Growth and profitability are ultimate objectives from any actions taken. Identifying issues such as company-focused or competition-focused and stays within boundaries or pushes the boundaries are matrix variables that guide assessment. The MAS aviation market provides distinctive examples of a business in each of the businesses that MAS do, thus applying the theory to a real-world situation. MAS must constantly expand the market while defending against other airlines that seek to take a greater share and Human Resources Management in MAS must play bigger and more important role in involving the companys management.

From this exemplification of the strategy simply stated is that the market environment is dynamic and constant assessment is necessary. Managers seeking to maximize differential advantage and the competition have a wealth of strategy tools available. Each one provides information. Using more than one contributes to a managers ability to understand the working environment in Human Resources Management. In a nut shell, this exercise gives us a deep understanding in managing Human Resources.

Future ImplicationFrom this research, we have come out with one new idea to apply in our future research. We decided to do an industrial survey to research and investigate about problems that arise in the organization. Then, by using our knowledge in statistics, we can do a hypothesis testing and identify the problems and solve it using statistics hypothesis testing. From that analysis, we can go into deep research about particular problems and solve it. In addition, we can propose the research that has been done to be shown to the particular company. By doing so will help us and the Bachelor of Aviation Management course is well known and recognized by the industry.

Acknowledgement

We thank to all of the persons and organization who were involved in this research especially the representative from the Malaysia Airlines System (MAS) Berhad, Mr. Abdul Rashid Sharif and Mr. Muhammad Hilmi Mokhtar who have kindly assisted us in discussing the issues faced by MAS and being very helpful in this research. The management of UniKL MIAT, especially our Lecturer in Human Resource Management subject, Mr. Nor Hisham Ghafar, Mrs. Sahzilawati Mohd. Nor, Head of Aerospace Section, UniKL MIAT for permitting us in getting approval for the visit, Mr. Suhaimi Jantan who helped us to get contact with the representative from MAS and gave a very supportive information and guidance and last but not least our Business Ethics lecturer, Mr. Ahmad Maulan Bardai who gave us a lot of guidance in preparing for the visit and giving us so much information regarding the Human Resources in MAS. And finally to, Mrs. Zabariah M.D Ibrahim for checking the final draft of this document. Not to forget, to all of our lecturers and individuals who have helped us in doing this research.

Appendix 1

MEMORANDUM ONGENDER BIAS PRACTICES BY THE MALAYSIA AIRLINE SYSTEMBY THE JOINT INITIATIVEAGAINST GENDER DISCRIMINATION This memorandum is prepared by the Joint Initiative against Gender Discrimination by the Malaysia Airline System (MAS), the national carrier of Malaysia. This initiative is led by:Malaysia Airline System Employees Union (MASEU) and supported by:All Women's Action Society (AWAM)Women's Development Collective (WDC)Women's Aid Organisation (WAO)Malaysian Trades Unions Congress (MTUC) Women's CommitteeNational Council of Women's Organisations (NCWO)Women's Centre for Change (WCC) Sisters in Islam (SIS)The Joint Initiative strongly disagrees with the discriminatory practices of MAS. We believe that MAS has discriminated against female cabin crew on the basis of gender and denied them of their right to work in a non-discriminatory and stress-free environment. Bearing in mind women workers make up 60% (2300) of the MAS cabin crew, it is their inalienable right to fair and equal treatment. This memorandum seeks avenues to end gender-based discriminatory practices and to recognise women workers' right to equality and justice. ISSUES RAISED AGAINST DISCRIMINATORY PRACTICES The unfair and unequal treatment of the female cabin crew has a direct impact on women's access to equal opportunities. The differences in treatment are considerable and they are as follows:1. RETIREMENT AGE Existing Employment ConditionsThere exists gender biasness in the retirement age, whereby female cabin crew take early retirement at 40 years of age or 45 years for female supervisors, whilst all male cabin crew retire at 55 years of age. Upon early retirement, a female cabin crew receives a "special gratuity at the rate of RM800 per year for every completed year of service with the Company". Discriminatory Practicesi. The existing employment conditions contravene Article 8[2] of the Federal Constitution, which clearly states that "there shall be no discrimination on the grounds only of religion, race, descent, place of birth or gender". This guarantees the right of women and men to equal pay for equal work or work of equal value. The different ages of retirement for MAS female and male cabin crew violate the Federal Constitution.ii. The retirement age for female cabin crew from other international airlines puts to shame the employment policies of MAS. Their retirement age are as indicated below:Air India 60 yearsThai Airways International 60 yearsCathay Pacific 60 yearsAll Nippon Airways 65 yearsLufthansa 60 yearsAir Asia 55 yearsiii. It is also known that double standards are practiced by the management of MAS. For example, expatriate female cabin crew, employed by MAS, are allowed to retire at the age of 60 or 65, in full compliance with their country's employment law. Yet, when it comes to its own Malaysian staff, female cabin crew are forced to retire early. iv. Malaysia is also committed to uphold respect and equality for women being a signatory to the UN Convention for the Elimination of All Forms of Discrimination against Women (CEDAW). Under Article 11 it states that:1. State Parties shall take all appropriate measures to eliminate discrimination against women in the field of employment in order to ensure, on a basis of equality of men and women, the same rights, in particular:a) The right to work as an inalienable right of all human beings: e) The right to social security, particularly in cases of retirement, unemployment, sickness, invalidity and old age and other incapacity to work, as well as the right to paid leave."This clearly upholds women's right to the same employment opportunities. The gratuity offered to female cabin crew upon their early retirement is meagre and shows a total disrespect towards the years of contribution that they have made towards building the good image of MAS. Therefore, this gratuity policy becomes irrelevant if MAS increases the retirement age of female cabin crew to 55 years of age. For example, upon early retirement, a female cabin crew will only receive RM16,000 (This is calculated on the following formula: RM800 x 20 years of service) as a token of appreciation for her 20 years of dedication to MAS. This is contrasted with RM414,000 (for 15 extra years of service; this is calculated on the following formula: (RM2,300 salary per month x 12 months x extra 15 years of service) which she will lose due to her early retirement. It must be noted that this special gratuity is also subjected to taxation. On the other hand, all male cabin crew are allowed to continue to work till they are 55 years of age, with full pay and benefits. It also makes more economic sense to maintain experienced and well-trained female cabin crew than to spend millions of ringgit on advertisement, recruitment and training for newer and less experienced workers.2. MATERNITY LEAVE Existing Employment ConditionsThe Collective Agreement between the management of MAS and MASEU states that "a married female cabin crew with five or more years of service shall be granted leave without pay from the date she is declared medically unfit to fly by a medical practitioner. The leave without pay shall commence not later than the end of her second month of pregnancy. She shall not be entitled to medical leave and compassionate leave during the period she is granted leave without pay." Discriminatory Practicesi. It must be stressed that income generated by women is vital for the survival of the family. The denial of seven months' pay in the course of a woman's pregnancy is a violation of worker's right and it does not accord respect and recognition to women's contribution towards the growth and well-being of the company. This further perpetuates the stereotype roles that women's contribution is considered secondary to the workforce of MAS. IiFemale cabin crew should not be penalised based on their reproductive function, i.e. to be pregnant and to have children. Such a maternity policy falls short of ensuring an equitable coverage for women and infringes on their effective right to work. Article 11 of CEDAW guarantees that equitable maternity benefit as an inalienable right to all human beings. It states the following:1(f). the right to protection of health and to safety in working conditions, including the safeguarding of the function of reproduction;2. In order to prevent discrimination against women on the grounds of marriage or maternity and to ensure their effective right to work, State Parties shall take appropriate measures:(a.) To prohibit, subject to the imposition of sanctions, dismissed on the grounds of pregnancy or of maternity leave and discrimination in dismissals on the basis of marital status;(b.) To introduce maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowance.In any Collective Agreement, the terms and conditions should leave workers in a better condition as compared with the Employment Act, 1955. This means that a worker is guaranteed of all benefits attached to maternity, including her entitlement to full pay during pregnancy. Unfortunately the Collective Agreement between MAS and MASEU provides for employment conditions that are below the acceptable standards as set by the Employment Act, 1955. 3. TWO SURVIVING CHILDRENExisting Employment ConditionsA female cabin crew is only entitled to maternity leave benefits "for not more than two surviving children. In the event that she becomes pregnant after having two surviving children, she shall resign from the Company, failing which the Company reserves the right to terminate her services."Discriminatory Practicesi. Limiting female cabin crew to two surviving children indicates a non-compliance to Section 37 (c) of the Employment Act of 1955 (Act 265), which states that it is only when a woman has five or more surviving children that she will not be entitled to any maternity allowance.Ii The female cabin crew should not be terminated on the basis of having a third child. This policy coerces women to fit into a particular pattern of reproduction. This infringes on women's right to choose and to make their own decision freely and responsibly in terms of the number, spacing and timing of their children.

OUR DEMANDSJoint Initiative Group against Gender Bias by the Malaysia Airline System demands that the Management of the Malaysia Airlines System revise the employment conditions for female cabin crew with immediate effect. The immediate revisions required are as follows:1. RETIREMENT AGE To increase the retirement age from 40 years of age at present to 55 years of age as currently practiced for men in similar job position. 2. MATERNITY LEAVETo be entitled to full maternity benefits and this should include full pay, medical leave and compassionate leave during the pregnancy period until confinement.3. TWO SURVIVING CHILDREN To comply with Section 37 (c) of the Employment Act of 1955 (Act 265) which guarantees a woman the right to full pay and benefits for up to 5 surviving children.

Signed by:Malaysia Airline System Employees Union (MASEU) All Women's Action Society (AWAM)Women's Development Collective (WDC)Women's Aid Organisation (WAO)Malaysian Trades Unions Congress (MTUC) Women's Committee National Council of Women's Organisations (NCWO)Women's Centre for Change (WCC) Sisters in Islam (SIS)

Appendix 2Letter to the EditorMalaysian Airlines Discriminatory Retirement Policy 4 July 2003 Women's Aid Organisation (WAO) refers to the comment made by Dr. Mohd Don Abdullah, senior general manager (corporate services) of MAS, with regards to the retirement age for air stewardesses ("MAS: We have reason to hire foreigners", The Star, 30 June 2003, Nation 19). Dr. Mohd Don Abdullah stated that MAS had not looked into the retirement age of 40 years (and another five extra year for those in senior positions) because "most women would be expected to be married and have children by then". We believe that Dr. Mohd Don Abdullah and the senior management of MAS would have to find a better justification than that to continue to enforce such early retirement onto their female flight attendants. This discrimination is even more pointed when compared to their male counterparts, where male flight attendants are given the option of retiring at the age of 55. Dr. Mohd Don Abdullahs' statement is in total contradiction to our Government's efforts that encourages Malaysian women to join the workforce and have a retirement age of 50 for women government officials and civil servants. Not only that, the statement is fraught with sexism that places the responsibility of nurturing children only on the shoulders of women. Such understanding harkens to a dinasour era in today's day and age where everyone should recognise that it is the duty of BOTH men and women to care for their children. It is ironic that recognising the multiple burden of women, MAS has not chosen to provide adequate support for their employees but instead chose to wash their hands off the matter by disqualifying their abilities.Hiding behind the notion of freedom of contract cannot absolve this gender discriminatory attitude. The substantive inequality that MAS' principle of employment provides for should really be seriously looked into by the government to check for violation of Article 8(2) of our Federal Constitution, and of the Convention of the Elimination of All Forms of Discrimination Against Women (CEDAW) that Malaysia has ratified to in 1995. In addition, there are millions of women in the workforce who are married and above the age of 40 with children, who have contributed and are continuing to contribute significantly to the Malaysian society. Naming a few are Datuk Rafidah Aziz, Minister for Foreign Trade; Datuk Sharizat Abdul Jalil, Minister for Women and Family Development; and Datuk Dr. Ng Yen Yen, Deputy Finance Minister. Does this mean then that according to Dr. Mohd Don Abdullah, they should retire because of their age and marital status?Is the senior management of MAS in effect saying that women (who might be married by age 40) are not capable of handling a career and a household at the same time should they choose to? If not, what is the real reason for the age limit on retirement for air stewardesses? Is it because that by the age of 40, these air stewardesses (women) are not as attractive as they used to be? If that is the real reason, then this adds another layer of discrimination to the already sexist and age-ist statement. MAS should start to value their employees beyond perceived gender stereotypes and instead take a REAL look at these women who are vibrant, intelligent and attractive, and who posses an added advantage - experience. If not, and if such ancient principles are continued to be enforced, MAS might find itself in the precarious position of losing the business of all successful working, career women. Where would it find itself then? Mah Xian-Zhen, InternJaclyn Kee, Communications OfficerAppendix 3

MALAYSIAN AIRLINES SYSTEM BHD v. MALAYSIAN AIRLINES SYSTEM EMPLOYEES UNION PENINSULAR MALAYSIAINDUSTRIAL COURT, JOHORAWARD NO. 400 OF 2005 [CASE NO: 1/3-16/2004]YUSSOF AHMAD ; EMPLOYER's PANEL: AHMAD SHARIN MOHD NOR ; EMPLOYEE's PANEL: JAMALUDIN KASIM26 FEBRUARY 2005AWARD(NO. 400 OF 2005)This is a trade dispute referred to the Court by the Honourable Minister of the Human Resources under s. 26(2) of the Industrial Relations Act 1967 ('the Act'). It is in respects of the demotion of one Ungku Yacob Ungku Suleiman ('the workman'), a member of the Malaysian Airlines System Employees Union, Peninsular Malaysia ('the union') by the Malaysian Airlines System Berhad ('the company'). The union is unhappy with the decision of the company to demote the workman from the position of customer services officer, a Grade C position to the lower position of customer services agent, a Grade B position.The facts are not in dispute. The workman had been guilty of two charges of 'blocking seats' without authority by a competent Board of Inquiry of the company. The exact charge read as follows:That you, as a Customer Services Officer of the Company, on 21 May 2001, at about 0843 hours, at set address 003EA2 Johor Bharu Airport Terminal Building, had blocked seat numbered 025A, 025B and 025C for flight MH2618/ 21 May 2001 JHB/BKI by using your sign in/check agent code 'HAPD' assigned to you, without authority from the Company and in contravention of the Customer Services Department notice No. 32 dated 19 May 2000 titled 'Seat Blocking for Protection Against Overbooking'. This was done in spite of a previous warning letter dated 13 April 2000 ref JBZ 011 SM1 issued to you for a similar misconduct.You have thereby committed an act of misconduct inconsistent with the fulfilment of your terms and conditions of service with the Company by virtue of Clause 15, Para 15.10, Appendix A of the Acts of Misconduct of the MAS Disciplinary Procedure and such act of misconduct attracts major punishment.The effect of the workman's action was that the seats that were blocked by the workman (without authority) were not available to be sold by the company. This would then allow the company's staff at the airport to release the seats at the last minute to the waiting passengers and to upgrade economy class passengers to business class. It was suspected that the staff at the airport could be paid by those passengers involved to get the seats or to be upgraded. The company has previously warned the workman before for committing the same misconduct. The punishment imposed on the workman was that he was demoted to a lower grade but he did not suffer a salary reduction. This is not, however, a demotion from an executive position to clerical position. The position of officer in the company did not mean an executive position.At the hearing the workman admitted that he had committed the misconduct but would like to give the reasons why he did it and also he considered the punishment was harsh. In his evidence he explained that he had a good reason for doing what he did. His reason was that the company computer booking system was faulty in that it showed seats were available for sale when actually there was not. These resulted in overbooking and caused problem when some passengers who had confirmed booking cannot be accommodated as there was in fact no seats available in the plane. The court was not satisfied on the balance of probability with the workman's explanation. However, it was satisfied that what the workman did was in breach of a specific instruction not to do this. It is not for the workman to use his own discretion to go against the company's instruction.In respect of the workman's contention that the punishment was harsh in the circumstances the company's evidence was that another employee committing similar misconduct received the same punishment. Learned counsel cited to the Court BR Ghaiye on Misconduct In Employment. The learned author wrote 'the right to control employees is a distinguished feature of the contract of employment. The right to control implies the right to ask the servants what to work (within hours of service) or what not to work, and to do it. When the employee does certain act which is contrary to his position of a subordinate, then he is said to be guilty of insubordination'. This is what the workman did. He was warned not to block seats and he did just that. It does not matter that he thinks he has good reason for doing it. In any event, the court is not satisfied the reason he gave was a good reason. The court is not satisfied by doing what did he prevented overbooking.After hearing the evidence and the submission, the court is satisfied that it was proper for the company in the circumstances to have demoted the workman to a lower grade without loss of salary. We even consider that the punishment in the circumstances was rather lenient. The court therefore dismissed the workman's prayer for reinstatement to his former position.* * * * * *Legislation referred to:Industrial Relations Act 1967, s. 26(2)Other source(s) referred to:BR Ghaiye, Misconduct In EmploymentFor the company - T Thavalingam; M/s Zaid Ibrahim & CoFor the union - Mustafar Maarof (V Kanagaratnam); Malaysian Airlines System Employees Union, Peninsular Malaysia

Appendix 4PART VIII - EMPLOYMENT OF WOMEN34. Prohibition of night work(1) Except in accordance with regulations made under this Act or any exemption granted under the proviso to this subsection no employer shall require any female employee to work in any industrial or agricultural undertaking between the hours of ten o'clock in the evening and five o'clock in the morning nor commence work for the day without having had a period of eleven consecutive hours free from such work:Provided that the Director General may, on application made to him in any particular case, exempt in writing any female employee or class of female employees from any restriction in this subsection, subject to any conditions he may impose.(2) Any person -- (a) who is affected by any decision made or condition imposed under the proviso to subsection (1); and (b) who is dissatisfied with such decision or condition,may within thirty days of such decision or condition being communicated to him appeal in writing therefrom to the Minister.(3) In deciding any appeal made to him under subsection (2), the Minister may make such decision or order thereon, including the alteration or removal of any condition imposed or the imposition of any further condition, as appears just and such decision or order shall be final.35. Prohibition of underground workNo female employee shall be employed in any underground working.36. Prohibition of employment by MinisterNotwithstanding the provisions of this Part the Minister may by order prohibit or permit the employment of female employees in such circumstances or under such conditions as may be described in such order.

Employment Act 1955 (ACT 256) & Regulations, Laws of Malaysia.Publisher: International Law Book Services

International Labour OrganizationNATLEX database

Appendix 5

Illustration 1.

Ishikawa Model and competency formula drawn by Mr. Helmi Mokhtar. The Ishikawa model is a guidance that is use in MAS to identify the environment and effect and the bones of the fish are the elements that to measure the cause and effect. Another diagram in this picture is the formula to measure the competency and how to measure the men power needed in a period of time. T is the time, R is the raw that are needed, P is the package.

Appendix 6

Our group members with Mr. Abdul Rashid Sharif after the end of 3 hours interview and discussion session. From left, Atikah, Afiq Aqwa, Mr Abdul Rashid Sharif, Muhd Nazmi, and Nur Fatin.

From left, Atikah, Afiq Aqwa, Mr Abdul Rashid Sharif, Mr. Helmi Mokhtar, and Nur Fatin.

Our visit in MASs Boeing 747 together with a technician. This aircraft is under C-check maintenance at Hangar 4.

MAS own Airbus A330. This aircraft is under C-check maintenance at Hangar 4.References

M. Sadiq Sohail, (2002), Malaysia Airlines (MAS) - Facing Challenges in the New Millennium, Case Study Related to Business, Vol 1.

Steven H. Appelbaum and Brenda M. Fewster (2007), Contemporary Recruitment and Selection and Diversity and Equal Opportunity Practices, the Journal of Global Aviation Human Resource Management, Volume 21 Number 7 2002.

Women's Aid Organisation, (2000), memorandum on gender bias practices by the malaysia airline system, News, Womens Aid Organisation. 2000.

Laws of Malaysia. Employment Act 1955 (Act 265) & Regulations. Part VIII, Employment of Women. International Law Book Services. Malaysia. 2002.

Interviews:(Mr. Abdul Rashid Sharif Manager Staff Affairs and Human Resources. Engineering and Maintenance division, personal communication, 24 March 2011)

(Mr. Muhammad Hilmi Mokhtar Human Resource Controller. Engineering and Maintenance division, personal communication, 24 March 2011)

(Mr. Maulan Bardai Lecturer, UniKL MIAT, personal communication, 23 March 2011, 4 April 2011)

Human Resources Management | Group No. 4

Human Resources Management | Group No. 4