FedEx is an international company and is one of the leading transportation, e-commerce and supply chain management services company in the United States. With six independent operating companies that compete collectively under the FedEx name worldwide: FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks and FedEx Services, an average turnover of $23 billion per annum, the organization employs over 20,000 people at its world headquarters.
FedEx Human Resources develop policies, programs and procedures that not only create a center of attention, but also retain the most competent, talented and diverse employees. To this end, Human Resources have put into practice a thriving recruitment, improvement and Employee relation programs. The Corporate HR roles consist of 45 employees who offer human resources support for the entire FedEx Organization. The general headcount for this team has not changed in over four years even though the employee support has grown by larger than 30%. (Keith, 127).
FedEx Compensation & Rewarding System
FedEx’s bonus program is driven by goal sharing. This program encourages employees to achieve strategic goals by basing individual bonus levels on corporate and business unit goals, up to 10% of an employee’s total compensation. FedEx’s formula for calculating bonuses includes corporate variables such as contributed operating margin, corporate ROE, net sales, customer returns, shipped kilometers and total unit cost.
Putting people first means that, FedEx rewards and acknowledges its employees. The hourly based workers are paid on the basis of performance. Other than this incentive there is a team performance based salary ‘Best Practice Pays’ element.
FedEx is a very performance-based company. Every person knows upfront what his performance objectives are and he also knows upfront what he can earn. So the crux of People Service People is a fairly laborious performance management and compensation system. If a person fails in his performance, then the person does not get disciplined, but he gets pulled into a constructive action plan.
Employees are encouraged to recognize their weaknesses through a Personal Development Programme (PDP). These could be general things like communication skills or dealing with conflicts in the workplace. FedEx has an online training library with 600 courses on things like leadership, project management skills, even something as basic as presentation skills. Employees can log in and take any course, but they need authentication.
The annual staff review is measured to be one of FedEx’s principal industry improvement tools. A total of 32 questions are responded automatically in business time over a period of two weeks and contribution has increased from 97% to 98%. (Keith, 128).
Productivity, Creativity & Discretionary Effort
By competing collectively under the FedEx banner, FedEx in service companies benefit from one of the world’s most documented brands. FedEx is one of the most reliable and a valued brand in the world and its trademark name is a dominant sales and marketing instrument. The overriding link between and among departments in the FedEx Corporation is “quality.” This is the motto by which every employee lives. FedEx is founded on the principle of exceptional customer service and, as can be seen by the brief outline above, it has consistently worked towards continuously improving service. FedEx has not ignored employees in this quest. (Roger, 165).
FedEx is the only transportation company and one of the very few companies overall to rank this highly in all three reputation surveys. FedEx ranked highest in customer satisfaction in the parcel delivery category. Wal-Mart Stores, Inc., the world’s largest retailer, also selected FedEx as the recipient of its “Carrier of the Year” award. Business Week recognized FedEx Kinko’s in the magazine’s “Web Smart 50” report for the company’s innovative use of Internet technology to transform business processes and reduce costs.
The culture fosters an environment where a person’s performance is what counts. The culture in FedEx is that people should put one hundred percent effort into their work, is itself not profound, but covertly that one value, as a consistent element in a FedEx assumption, reinforces other values like dedication and obligation. Just as FedEx describe them as a flexible network of networks designed to focus on very distinct customer needs, so that FedEx Corporation companies are truly global and diverse. Competing collectively, FedEx Corporation acts as the hub, allowing these independent companies to work together worldwide. Under the powerful FedEx brand name, the corporation also oversees any potential business development activities designed to strengthen the broad portfolio of services.
Strategic role for HRM is very significant for the organization’s advancement. System thinking among the line and HR manger is the first step. The performance management and incentive compensation system must define desire employee behavior and reward those behaviors in meaningful way when goals are achieved.
Almost 50% of all FedEx expenses go to employee pay and reimbursement. Many Special Awards to recognize employees’ performance:
- Bravo Zulu – award for outstanding performance beyond normal job expectations.
- Golden Falcon – award for exceptional customer service.
- Humanitarian Award – recognition for human welfare above and beyond work or community standards.
- Star/Superstar Award – a lump sum merit based award for top performers.
- Five Star Awards – the highest award for enhancing service, profitability and the spirit of teamwork. (Roger, 167)
Deadly combination and authoritative connection are terms to portray the effects of an organization policy of encouragement from within on firm performance. Whereas other firms may be short of this combination. So the only way that the organization can hope to make out the HR system appropriately is to adopt system perspective, which means industry priorities drive the growth of the HRM system.
In conclusion, as the technology change increased task specialization, there might be a potential problem in the increase cost of training employees and willingness to learn. The advances in technology give management progressive opportunities to reduce skill and discretion in work, and to tighten management surveillance and control over workers. The culture within FedEx and its leadership style has enabled the company to gain competitive advantage and become a highly successful and reliable worldwide transportation company. FedEx continues to enhance its profit potential by using aggressive management to achieve their objectives.
Motivation will be an important issue when FedEx wants their employees to be up-to-date and willing to learn. Providing cost effect learning resource and motivating willingness to learn is the only way to solve the problem. FedEx provide a library of third party on-line courses for the technical employees, the list of the course FedEx is offering to his employees continues to grow. Beyond computer technical skills, they also offer classes about things such as leadership, regulation and human resource.
Keith Lincoln, Lars Thomassen. How To Succeed At Retail: Winning Case Studies And Strategies For Retailers And Brands. London: Kogan Page, 2007: 127.
Roger Frock. Changing How The World Does Business: FedEx’s Incredible Journey To Success: The Inside Story. CA: Berrett Koehler Berkeley, 2006: 165.
The Web Smart 50. 2008. Web.