CASE STUDY: PEOPLE EXPRESS

Hardly any things remain steady in business, so it's not amazing when the best of
examples of overcoming adversity transforms into a contextual investigation of what turned out
badly.
Is the People Express approach to human resource management effective? Why or why
not?
Maybe in some cases I can say it was, well, in fact they’ve became one of the most productive
airlines around, but considering the result after five years of success, I can conclude, it was
actually NOT effective.. It’s all because of the following factors that causes them to fall down:
 Having unusual management technique
 Little authority was imposed from the top
 Teams of employees set up their own operating systems and made their own decisions
 Individual got involved in several operation functions rather than being limited to narrow
rules
 All employees are being considered as direct owners upon hiring with a direct stake in
the profitability of the company.
 Most of managers are acting more as advisers than as drill instructors
 weak operational capabilities, including a Neanderthal reservation system and a near total
lack of financial controls and information.
 had too many discount fares and did not build a financial model to see if they would
produce a profit.
People's service appears to have deteriorated very badly. People Express has a lot of new
employees it has not been able to train very well. It is very difficult to employ more individuals
when in certainty your organization was battling budgetary misfortune. There also has been a lot
of turnover at the top. Under the pressure, Burr has tried to run People like a one-man show. And
it was not well-suited to that. Overall, maybe the People's biggest problem, though, was that its
leadership development has not kept pace with its growth.
Analyze Don Burr’s philosophy of human resource management. What advice would you
give him to improve HRM at People Express?

To build a company made up entirely of owner-managers was the corporate philosophy of

People Express chairman Donald C. Burr. Everybody at the company had at least two different
jobs - called ``cross-fertilization'' by Mr. Burr. In retrospect, business management experts,
industry analysts, and other observers say Burr's management philosophy was not adaptable to a
really large company. The aim was to encourage innovation and creativity. Don Burr’s
envisioned a low-cost carrier that would become a major national airline and put plane tickets
within reach of the masses. And he dreamed of running it with little bureaucracy or hierarchy. It
would be a place where workers managed themselves and performed a variety of tasks, where
everyone was an owner, and where worker enthusiasm would translate into high-quality
customer service. Don Burr probably was right in his belief that People had to become a major
national carrier to survive the consolidation of the airline industry. Unfortunately, he lacked the
support of his board. People's service appears to have deteriorated very badly. People has a lot of
new employees it hasn't been able to train very well, as I mentioned above. There likewise has
been a great deal of turnover at the top. Under the weight, Burr has attempted to run People like
a limited show. It isn't appropriate to that.
Other management mistakes, too, are clearer in hindsight. While employee stock ownership
boosted morale, it also allowed the attitude of employees to be blown about by the whims of
Wall Street. Presently Burr doesn't have any decision however to conserve, lose two or three
years and return at making People a significant public transporter in an alternate manner. In the
event that he does that, his stock cost will return up and his money related patrons will oblige
him. If he does that, his stock price will go back up and his financial backers will go along with
him
There were other problems. Inspiring as Burr’s style of leadership was it wasn’t structured
enough to cope with the growing complexities of bigness. Mills contends that the board of
directors, originally filled with representatives of the venture capital and other investment
interests that helped get the airline started, wasn’t adequately broadened to give Burr better
advice on how to change his strategy while there was still time.
Business visionaries whether they're an unemployed individual striking out on their claim or
a prepared experienced attempting to get the mojo back once more, must do things differently
in arrange to outlive. Everybody must alter, particularly small-business owners. Luckily, what
have not changed are the trade essentials,
those administration characteristics that effective businesspeople nearly all have: relentlessness,
commitment and vision, and essential trade skills. New strategies are required, be that as it
may, techniques outlined to work in a changing commerce climate. I certainly do not consider
myself an expert on running an airline, but it is obvious that if your growth outruns your capacity
to monitor and deliver acceptable service, you're in trouble.
If Don Burr decided to try building a new People Express type of airline again today,
would you accept his offer to become Vice President of Human Resources?       What would
you do differently from your predecessor?
Well, managing a new build People express airline is not that possible to foresee, knowing its
past error could be a great lesson to improve such mistakes, and having such wide technology,
more developed human resource management, and as well as the impact of modernization can
also help nowadays management to fulfill future goals.
Being an effective president/owner same with the vice-president is about more than just driving
your employees to work harder -- or more efficiently. Forcing employees to work a certain way
can breed resentment, even disloyalty, while being too soft can lead to bad habits, laziness, or
boredom. There’s no “right” management style, as each employee and company are going to
have an individual perspective. Yet, applying human resource management approach is one of
the best ways that can save and help extending the operation of business longer as it is expected.
If I would be a Vice-president of People Express, I’ll handle it in contrarily to the past
management structure. I’ll make sure that the organizational structure is well designated. I will
secure human resource or manpower planning to ensure effective planning to help me keep
resources and overhead to a minimum, while eliminating waste. There must also be a proper
recruitment, selection and placement of personnel to ensure we are hire capable employees that
can not only perform the tasks expected of them, but also in making sure they are a good fit for
the culture of the organization. Providing a training and development for employees, making
sure they are well-equipped and continue learning. Giving appraisal of performance of and
taking time to provide ongoing feedback to keep the lines of communication open while allowing
employees an opportunity for improvement. Also, having a remuneration of employees to make
sure employees are paid according to the industry standard or better to ensure we have happy,
productive and loyal employees. Next, setting general and specific management policies for the
organization: Every organization has specific policies for our employees. It is very important that
all employees know and understand these policies through new hire training, an employee
handbook, and updates reflecting any changes in policy or within the organization. Employees
who are vested in the success of the organization should be viewed as important stakeholders
that make a difference. Lastly, is to develop and maintain motivation for workers through
incentives, this goal is not just to benefit the worker but also their family. Establishing and
maintaining and applying human resource management within People Express could be a reason
to raise again the name of the company and not to fall again.