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Name: Strategic Downsizing Process At Delta Airlines Organization: Delta Airlines Industry: Airlines Country: USA
Flow of The Presentation
• • • • • • • • Pre OD scenario Cause of change Action Research Model Formation of Core team Delta Workforce Programs Communication program Pre OD Scenario Learning
Pre OD scenario
• Delta airlines- 3rd largest US airlines • Suffered from bad industry fundamentals ―Excess workforce ―Incapable to anticipate volatile fuel prices ―Conservative financial practices • Faced competition from ‘low-wage structure competitors’ • Competitive advantage ―Union free workforce ―Work flexibility
Cause of change
• The terrorist attacks on September 11, 2001 shook the United States in a profound way. No industry or sector of the economy felt the impacts of these events more than the airline industry.
• The massive financial loses due to lack of passenger demand, canceled flights and increased expenditures for security, even airlines that did not have prior financial issues were forced to renegotiate labor contracts and lay off high numbers of employees.
Action Research Model
1. 2. Problem- Downsizing Contracting-Formation of core team 3. Data collection- intense discussions & meetings 4. Feedback- from managers & executives 5. Development of solutionformation of groups to support change 6. Action planning- provide choices to employees 7. Implementation- delta workforce program 8. Evaluation
Formation of Core team
• Led by chief learning officer • Included other HR disciplines • Organization development • Recruitment and Staffing • Global rewards and recognition • Learning services • Client based HR leaders from each operating area
Function of Core Team
• Analyze Company Industry Employee and management input • Develop Procedures Reduce operating cost Provide employee with different options Utilize long term opportunities
• Change Management • Address sustainability • Develop tools to evaluate • Process, job design organization structure • Train HR generalist to train managers
• Human Resource • Train the company mangers on new programs ,procedures and processes • Evolved as a reliable support center , source of information relating to business development
Delta Workforce Programs
• Voluntary programs One, two, three and five years leave programs where employees were given : flight privileges pension credit time for leave period upon their return ability to bid for jobs while on leave Enhanced early retirement Leave of absence
• • • • • Leader led communication Frequent field visits and interaction by executives Open forum call-ins department and division executives Frequent meetings with frontline managers Employees could replay executive messages on call-ins
Communication choices for employees
• Delta intended to keep connectivity of the employees to the company • Access company communications via telephone, internet, e-mails, newsletters . • Employees on leave program were connected through company website.
Post OD Scenario
• • • • • Downsized workforce Elimination of non value added process Trust of employees was not lost Employee engagement was maintained Delta became industry leader in strategically managing staff reduction.
• When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector. For employees, downsizing can be very unnerving and upsetting. • To create aligned and performance driven organization it is important to equate Employee Engagement with both Emotional as well as Transactional relationship with the organization. • Trust is the building block for gaining the respect of the staff, creating positive work relationships within teams, and enabling staff to handle stress and uncertainty in the work environment.
• Theory of Organization Development - Cumming, Worley