2.

4“Weak Culture”

Corporate culture can be defined as the system of conviction, values, traditions

and practices which are spread and shared by different individuals within the
organisation (Legge, 1995).

McShane and Glinow (2005) state that corporate culture helps workers to
comprehend organisational situations through a superior sharing and a more
effective and efficient communication, achieving better levels of cooperation with
each other.

However, due to the stifling pursuit of low-cost and the lack of dialog within the
organisation, Ryanair’s culture can be considered as weak(BBC News, 2014).
According to Deal and Kennedy (1982) a weak culture in a company occurs
when the rules are strictly imposed by the employers, bringing employeesto
consider their personal goals in a different way compared to the common
objectives of the organisation.

The weak culture affects not only the internal relationships among the
employees, provoking a sense of instability, lack of trust and difficult common
values sharing, but also the attitude towards customers.

Indeed, Ryanair’s employees are not able to react in front of customers’ requests
if these do not concern their specific field of work and much more alarming is the
aggressive and hostile service towards clients (Telegraph, 2013).

Minimizing the costs and providing a service with the lowest price is the most
important goal for Ryanair’s CEO O’Leary, although these go to the detriment of
customer care and attention.

Staff Turnover

Employee turnover is considered to be one of the persisting problems inside

organizations (Armstrong, 2009) and it means that another company may gain a
new knowledgeable employee who can become its competitive advantage, while
the former organization loses that knowledge (Branham, 2005).

From the management’s point of view (Ryan air Annual Report, 2013) Ryan air
assesses its relationships with the employees to be good, with different
negotiations with groups of employees, however the low average period of
employment of 4.8 years (Ryanair, 2013) proves that employees do not consider
these relationships in the same way.

Staff turnover issue inside the organization is highly correlated to and a

consequences of low salary and little competitive reward systems, recruitment
and training methods and last but not least uncertainty for the future (Urbancová
and Linhartová, 2011).

Though the company claims that it guarantees among the best salaries in the
low-cost airline industry (Ryan air, 2013), we can assume that this is not properly
the truth. In base on a survey conducted by the International Transport Workers
Federation (ITF, n.d.) Easyjet, the second largest low-cost airline after Ryanair,
pays its staff better than the Irish carrier and in addition the employees of the
latter are expected to pay their own uniform, around £360, mandatory safety
course, around£1,800, and their training, around £2,000 (The Guardian, 2013).

The company implements the productivity based incentive system in an attempt to control costs
related to its personnel. These incentives are associated with the on board sales and related
comissions; as regards pilots, their payment is based on the number of hours or sectors flown
(Ryanair, 2012). The maximum number of working hours for pilots is determined by industry
standards and regulations. According to the Irish Aviation Authority (IAA) regulations, pilots are
supposed to work for no more than 100 flight – hours per 28 – day cycle, 300 flight – hours
every three months and 900 flight – hours per fiscal year (Byles, 2013). However, flexibility in
the working hours is supported by the management in order to not set at risk the productivity –
based incentive system.

Since Ryanair’s strategy is focused on achieving low cost fares, the company has applied the
pilot training in order to train pilots how to fly the aircrafts with the least fuel consumption. This
demonstrates the company’s flexibility to adjust to the unexpected changes of the turbulent
economic and business environment creating a competitive advantage (Teece, Pisano, & Shuen,
1997).

According to Ryanair’s official web page in 2012 there have been many opportunities for its
employees to achieve career development. “Whereas other European airlines are cutting jobs, or
closing (as in the case of Spanair, Malev, Cimber Sterling, and OLT Express in recent months)
Ryanair is proud of its long-standing record of job creation and internal promotions” (Ryanair
Careers, 2013).

Yet, most of its employees belong to employee unions as they represent their rights about
payment and treatment within the company (Byles, 2013). However, Airscoop which is a
consultancy company, in its report for Ryanair’s business model (2011) stated that the selection
of employees’ representatives is accomplished by Ryanair’s own management since employees’
unions should not be independent (Airscoop, 2011).

From a different point view, Ryanair in an attempt to adjust HR practices and policies to its low –
cost strategy, has managed to create the reputation of the “stringiest” employer (Baum, 2006).

The last two years Ryanair has decided a pay freeze on payments for all employees and it is
likely to eliminate employment positions affecting negatively the employee relations (Byles,
2013).

Also, in 2005 the ban for members of the staff to use chargers for their mobile phones has cast a
shadow over Ryanair as an employer; the ban was communicated to the staff through memo
(Clark, 2005).

Nevertheless, all the employees of Ryanair are required to buy on their own expenses the work
uniforms, the meals and the training seminars (e.g. pilots). Even though Ryanair’s employees are
represented by unions (Byles, 2013), they are discouraged from using the company’s websites to
write anonymously their dissatisfaction for its HR practices. The company being aware of
employees’ constant complaints applies high court injunction in order to identify the employees,
who post bitter comments for the company (Clark, 2005).

In 2005 a representative of the Irish trade union, Shay Cody, has stated in The Guardian that
Ryanair is considered to apply hostile HR practices towards its workforce; this is the reason why
the turnover rate has been increased, especially among junior pilots and cabin crew.

As far as the recruitment is concerned, even though Ryan air attempts to attract new employees
to recruit the cabin crew by high salaries, it requires them to pay for their training (Ryan air,
2012). Also, pilots in order to enhance their skills and their ability to fly the new aircrafts, they
are responsible for their retraining, implying sometimes that this is an approach for their
“constructive dismissal”, since the old aircrafts are phased out (Clark, 2005).

Taking into consideration Schuler and Jackson’s model (1987), who related the competitive
strategies and the HR policies, it is clear in the case of Ryan air how the cost reduction strategy
can affect the HR policies. The company in order to gain the cost efficiency competitive
advantage applies low cost training, low levels of pay and unionism and insubstantial HR
function (Porter, Smith, Fagg, Winfield, & Bishop, 2006).

Best fit or best practice?

According to Schuler’s and Jackson’s model(1987) “different competitive strategies imply
different kinds or blends of employee behaviour” (Boxall & Purcell, 2011). Under these
circumstances, it is entailed that Ryanair belongs to the best – fit school of strategic human
resource management; the HR practices and policies are tailored to company’s strategy, which is
the low cost leadership, implying reduced employee wages and short – term productivity based
rewarding systems with adverse effects on employee relations and company’s internal reputation
(Boxall & Purcell, 2011).

Commitment to safety and quality maintenance

Ryanair gives emphasize to the safety of flights as it is considered company’s first priority
(Ryanair’s annual report, 2012). This is achieved through the constant training of pilots and its
aircrafts alignment to the highest European airline standards. Even though Ryanair’s strategy is
focused on maintaining and promoting the low – cost strategy in fares this is not applied to the
safety issues of its flights (Ryanair’s annual report, 2012). Ryanair mainly performs service
repairs and routine maintenance on its aircrafts, but there are also other maintenance contractors
that deliver those services to its aircrafts based on several airports (Ryanair’s annual report,
2012).

“Ryanair’s objective is to firmly establish itself as Europe’s biggest scheduled passenger airline, through
continued improvements and expanded offerings of its low-fares service”