HUMAN RESOURCE MANAGEMENT

ABB 10902

Malaysian Airline System

Berhad (MAS) Human
Capital Issues and
Strategic Solution
Program:
Bachelor of Aviation Management, UniKL MIAT

By:

Muhammad Afiq Aqwa Md Mansor - 53276210188

Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Muhamad Nazmi Mohd Ghazali - 53276210296

Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Atikah Muhd Sahar - 53276210024

Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Nur Fatin Che Soh - 53276210022

Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology

Date submitted:
14 April 2011

Human Resources Management | Group No. 4

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

Human Resources Management | Group No. 4

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.

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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 of HRM. In many cases the response to the problem or opportunity will require
the continuous attention of senior management of 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.

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Malaysian Airline System Berhad (MAS) Background

Malaysian Airline System Berhad (MYX:3786), DBA Malaysia Airlines(abbreviated MAS), is
the government-owned flag carrier of Malaysia. Malaysia Airlines operates flights from its
home base, Kuala Lumpur International Airport, and its secondary hub in Bayan Lepas,
Pulau Pinang. It has its headquarters on the grounds of Sultan Abdul Aziz Shah
Airport in Subang, 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
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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 whole
operation. In the 1980s, MAS became the first major government agency to be privatized
but 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.

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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.

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Arises Issues

Problem 1 - Push and pull factor for the employees

Issue - 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
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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 AsiaPacific 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
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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.

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Problem 2 - Discriminations and diversity practices

Issue 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 ceiling

Discussion 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 semiprofessional 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
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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.

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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.

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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

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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.

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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
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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.

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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
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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.
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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.
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Future Implication
From 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.

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Appendix 1

MEMORANDUM ON

GENDER BIAS PRACTICES BY THE

MALAYSIA AIRLINE SYSTEM
BY THE JOINT INITIATIVE
AGAINST 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 Committee
National 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 Conditions

There 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 Practices

i. 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.
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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 years
Thai Airways International 60 years
Cathay Pacific 60 years
All Nippon Airways 65 years
Lufthansa 60 years
Air Asia 55 years
iii. 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 Conditions

The 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 Practices

i. 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.
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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 CHILDREN

Existing Employment Conditions

A 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 Practices

i. 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 DEMANDS
Joint 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 LEAVE
To be entitled to full maternity benefits and this should include full pay, medical leave and compassionate
leave during the pregnancy period until confinement.

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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)

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Appendix 2

Letter to the Editor

Malaysian 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, Intern
Jaclyn Kee, Communications Officer
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Appendix 3

MALAYSIAN AIRLINES SYSTEM BHD v. MALAYSIAN AIRLINES SYSTEM

EMPLOYEES UNION PENINSULAR MALAYSIA
INDUSTRIAL COURT, JOHOR
AWARD NO. 400 OF 2005 [CASE NO: 1/3-16/2004]
YUSSOF AHMAD ; EMPLOYER's PANEL: AHMAD SHARIN MOHD NOR ;
EMPLOYEE's PANEL: JAMALUDIN KASIM
26 FEBRUARY 2005
AWARD
(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.

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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 Employment
For the company - T Thavalingam; M/s Zaid Ibrahim & Co
For the union - Mustafar Maarof (V Kanagaratnam); Malaysian Airlines System Employees Union,
Peninsular Malaysia

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Appendix 4

PART VIII - EMPLOYMENT OF WOMEN

34. 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.
Human Resources Management | Group No. 4

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(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 work
No female employee shall be employed in any underground working.
36. Prohibition of employment by Minister
Notwithstanding 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 Organization

NATLEX database

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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.

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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.
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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.
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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)

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