Strategic HRM

VRIO Framework Airline Industry

Low cost airlines

Jet Blue

Southwest Airlines

Airasia

Group 4
Anshu (H005/14)
Kaustubh (H019/14)
Megha (H023/14)
Prakash (H032/14)
Radhika K (H034/14)
Vanya (H039/14)

VRIO Framework

The VRIO Analysis is an analytical

technique which for each type of
resource considers the following
questions (evaluation dimension) for
an organization as well as for its
competitors. VRIO is an acronym
from the first letters of the names of
the dimensions:

Value
Rareness - How rare or limited is the
resource?
Imitability - How difficult is it to imitate
the resource?
Organization, respectively arrangement
- Is the resource supported by any
existing arrangements and can the
organisation use it properly?

(1) Jet Blue

Strategy and Value at Jet

Low-Cost
Differentiating
Blueon high-quality customer service

Mission "bring humanity back

to air travel"

Recruitment at Jet Blue

Internal

Ann Rhoades, "To me, hiring is the most

important thing you can do if you know

Rewards

Training

The Peer component of the lift program is critical

cool,
convenien
t, costeffective
service to
the
customer
Ann Rhodes
small
company
feeling
Dave Berger

360-degree method
of training

Online application employees and

managers can send and receive
congratulations, thank-you and gift
cards for outstanding performance

JetBlue Increases
Recognition
Satisfaction by 88

VRIO framework
Practices

Valuable

Internal

Yes

Rare

No

Supported
Difficult to by the Competitive Performa
imitate Organisati Implications
nce
on
No

Yes

Recruitment
External

Yes

Yes

No

Yes

Selection

Training and
Career
development
Performance
Compensation

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes

No

No

Yes

Yes

No

No

Yes

Rewards
Other
Practices

Customer
Bill of
Rights

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Competitive
parity
Temp
competitive
advantage
Temp
competitive
advantage
Sustained
competitive
advantage
Competitive
parity
Competitive
parity
Temp
competitive
advantage
Temp
competitive
advantage

Normal
Above
Normal
Above
Normal
Above
Normal
Normal
Normal
Above
Normal
Above
Normal

(2) Southwest airlines

Southwest Airlines
About The Company
Southwest is a major U.S. airline
and the world's largest low-cost
carrier, headquartered in Dallas,
Texas
Established in 1967 and has
nearly 46,000 employees and
operates more than 3400 flights
per day.
In June 2011, it was reported to
carry the most number of
domestic passengers in U.S when
compared to other airlines.

Mission
Southwest Airlines is dedicated to
the highest quality of Customer
Service delivered with a sense of
warmth, friendliness, individual
pride, and Company Spirit.

Workplace Culture SW Commitment to its

Employees
Stable work environment
Equal Opportunity for learning
and growth.
Creativity and Innovation are
encouraged.

Uniquenes
s
Much of Southwest's success is
due to the willingness of its
leadership to be innovative
employees are treated as the
company's number one asset..
Environment = Humor +
Responsibility

Organizational Structure SW Open Culture

Limited formal structure.

Leadership meetings are tapped
and shared with employees..
They have worker responsibility
programs.
Team environment.

Decision
Decision making is byMaking
worker/management
committees
Employees are given authority
to make decisions
Employee input into all policies
and procedures

We focus on both internal and

external
bond
Employees
arebuilding
provided the same concern, respect, and caring

attitude within the organization that they are expected to share

externally with every Southwest Customer.

Recruitment at
Southwest Airlines
Hiring

Those who will contribute to the overall operation of

the airlineelitists need not apply

Recruitm
Recruitment the best who are team players and able to
ent of
relate well with other functional groups
pilots or
mechanic
New
s
They then train newly hired - most of whom come from
hires
other, more functionally divided airlines.
from
other
airlines
A candidate who thinks he can snow a recruiter during the
interview may have already eliminated himself because hes proven
to other employees that he isnt a fit for the system.

Training at Southwest
Airlines

Hire for Attitude and Train for

Aptitude
Technical Trainings
Leadership trainings.
Managers in Training (MIT)
programme.

Relational
Competen
ce
New staff learn about the
overall work process and
understand where they fit in
and how their job relates to
and supports jobsFunctiona
of
coworkers
l
Expertise

SW Airlines believes that

leadership at frontline can play It has more supervisors per
a critical roles in organizational frontline employee than any
success.
other airline in the industry,
despite the fact that many
think the organization is flat
Leadership at
and team-based

Southwest Airlines

New leaders at Southwest are told, Dont try to learn your

job. Your first priority is to get to know your people!

Performance Management at Southwest

Airlines
Performance
Transparency

Roles and
Responsibil
ities

Cross
Functional
Performanc
e is
Measured
360 degree
Performanc
e
manageme

Crystal clear.
Decided by participative
management

Encourage employees to focus on

learning
Rather than on blaming, when things go
wrong
Flexible job boundaries exist throughout the company
where anyone is willing to pitch in wherever required.

Owing to cross functional measure of

performance
Gives a picture of overall performance
of employee

Compensation and Benefit at Southwest

Airlines
Base pay is freezed over
a multi-year contract in
return for additional
variable pay incentives
Source- Compensation:
Theory, Evidence, and
Strategic Implications

Ownersh
ip
Performance
based.

1. Generous
wages.
2. Work/Life
flexibility with
outstanding
vacation and
holiday time.
3. Freedom to
fly with nonrevenue flight
SOURCE: http://swamedia.com/channels/labor-relations/pages/labor-

VRIO framework
Practices

Valuable

Rare

Supported
Difficult to
by the
Competitive Performanc
imitate
Organisatio Implications
e
n

Recruitment

Yes

Yes

No

Yes

Temporary
competitive
advantage

Training and
Career
development

Yes

No

No

Yes

Competitive
Parity

Normal

Above
Normal

Above
Normal

Performance

Yes

Yes

No

Yes

Temporary
competitive
advantage

Compensation

Yes

No

No

Yes

Competitive
Parity

Normal

Yes

Sustained
competitive
advantage

Above
Normal

Culture

Yes

Yes

Yes

(3) Airasia

Airasia Airlines
Malaysian low
cost airline
established in
1994,
headquartered
near Kuala
Lumpur

Operates with
the world's
lowest unit
costand
described as the
airline as a
"pioneer" of
low-cost travel
in Asia

Ranked as the
world's best
low-cost airline
in 2012 World
Airline Awards at
the Franborough
Airshow

Workplace Culture Airasia

Approachable Top management

Sustainability:
With the growing complexity of AirAsias operations, more
formalized and sophisticated HRM systems and practices may
be crucial. The current underinvestment in human resource
management (particularly training) poses significant risks for
the company in sustaining employee commitment and
cooperation

Recruitment at Airasia
Airlines
A minimum level of resources invested in
hiring because of the high turnover rate the
company experiences
Hiring policy is often based on get them in
fast and now
Airasia mainly looks for strong
communication skills and good looks
Cabin crew selection especially the ladies, must be
videotaped for final approval. Typically people will go
through interviews followed by short listing and
videotaping.

Training at Airasia
Airlines

Performance Management and rewards at

Airasia Airlines

Air Asia uses a group

profit sharing scheme

AirAsia rewards people who work hard and carry the right attitude.
AirAsia calls their employees 'Allstars' as they value them as stars. The

company is committed to giving Allstars the career opportunities that

they want

VRIO framework
Supported
Difficult to
by the
Competitive Performanc
imitate
Organisatio Implications
e
n

Practices

Valuable

Rare

Recruitment

Yes

No

No

Yes

Competitive
parity

Normal

Training

Yes

No

No

Yes

Competitive
parity

Normal

Above
Normal

Performance

Yes

Yes

No

Yes

Temp
competitive
advantage

Rewards

Yes

No

No

Yes

Competitive
parity

Normal

Yes

Sustained
competitive
advantage

Above
Normal

Culture

Yes

Yes

Yes

Comparative study

Comparative Study of the 3 low cost

airlines.

Low-cost
strategy

Training and
Rewards leading to
retention.

Jet Blue

Friendly
Culture

Southwest airlines

Operational
Efficiency

Airasia

Comparative Study of the 3 low cost

airlines.
Company
Name

Jet Blue

Southwest
Airlines

Airasia

Year of
establishmen
t

CEO

1999

Mr. David
Neeleman

1967

Mrs. Gary C
Kelly

1994

Mr. Aireen
Omar

Competitive
Implication

Reason

Training

Myers-Briggs assessment and a 360degree development feedback

Rewards

The Lift Program: Vertical as well as

horozontal appreciation

Culture

Environment combines humour with

responsibility

Operational
efficiency

Fuel efficiency with regular monitoring

using a dashboard

Culture

Contact "Tony" directly to solve problems

quickly

Company Name

Trainings
POL programs: Leadership 360 degree feedback, frontJet Blue
door leaders
Cross functional technical, behavioral and leadership
Southwest Airlines
trainings for aptitude
Airasia
Training Academy
Company Name
Jet Blue
Southwest
Airlines
Airasia

Company
Name

Jet Blue
Southwest
Airlines

Rewards
Peer to peer recognition
Pay for cross functional performance
Allstars! rewards people who work hard and carry the right
attitude

Culture
All the new hires, regardless of position, are referred
to as Baby Blues. They tak part together in a dayand-a-half cultural immersion sessions. The goal is
you walk away knowing more about jetBlue over two
days then you did at your previous company over
years.
Employees are provided the same concern, respect,
and caring attitude within the organization that they
are expected to share externally with every
Southwest Customer.
Everyone in AirAsia, from the errand boys to the
senior management has Tony's contact number.

Thank YOU..!!!