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Research Proposal on High Number of Turnover in Oman Air


The staff is one the first to know of the happenings within an industry or organization. As a staff of an airline company, my paper would deal with an experience that occurs within my industry. Therefore, this paper would focus on the high turnover experienced by Oman Air.



COMPANY OVERVIEW



OmanAir, founded in 1993, is the National Airline of the Sultanate of Oman and a flight partner with KLM Royal Dutch Airlines. Oman Air is the designated carrier of the Sultanate of Oman. It is a business enterprise committed to the basic objective of providing safe, reliable and profitable air transport services for passengers and cargo as well as other aviation related services. Apart from being recognized as a strong business presence, Oman Air is also respected for its professional attitude and recommended for its punctuality and service excellence.



Starting off as a regional player, Oman Air as Oman's national carrier, has witnessed rapid growth in the last 12 years. The ownership of Oman Air rests in the hands of the government of Oman, individuals & corporate shareholders. Oman Air has its hub base at Seeb International Airport in Muscat, Oman. Bahrain, Colombo, Zurich, Kenyan Airlines are Oman Air's Alliance partners. Oman Air Head Office is situated at Muscat, Oman. This airline has a strong work force of about 2,556 well-trained employees whose dedication and hard work has helped us to build a distinct identity and customer base.



Oman Air partners with many carriers around the world, while having a special code-share partnership with several select carriers. Oman Air has implemented its Frequent Flyer Programme with these code share partners. Today, it has carved a niche of its own with its renowned traditions of hospitality, and flies to several destinations, on both domestic and international sectors. Oman Air is now the airline of choice for the discerning business and leisure traveller in the regional airline scenario.



The airline currently operates to numerous international destinations, including Abu Dhabi, Al Ain, Chennai, Colombo, Dhaka, Doha, Dubai, Jedda, Kuwait, Mumbai and Trivandrum. OmanAir also serves domestic locations in Oman, including Khasab, Masirah, Salalah and Sur. Muscat is OmanAir's base.



Distinguishing itself as a leader in the region, OmanAir is the first commercial operator in the Gulf to purchase the new state-of-the-art Boeing's new version of the 737. The all-new Next Generation 737 is the best selling airplane in commercial aviation history. In order to give customers the best in new technology, comfort on-board and reliability Oman Air has replaced the entire jet fleet with these new aircraft.



Currently, Oman Air operates 6 of these new aircraft, consisting of 3 B737-700 models, and 3 B737-800 models. With the First B737 NG having joined the Oman Air fleet in December 2001 and the most recent aircraft having been delivered in April 2005, Oman Air can boast one of the newest jet fleets.



In addition to being the national carrier, serving domestic international routes, Oman Aviation also controls the provision of baggage handling, catering and duty free services at the country's airport. To a degree, it has been dwarfed by Gulf and Emirates Air in competing for international business, but is still a profitable concern. Thanks to its monopolistic position, it will benefit from any expansion in airline traffic.



In June 2005 Oman Air has been registered for the successful completion of the International Air Transport Association's Operational Safety Audits. The audits are developed by IATA and designate the standards for safety and quality covering various areas in the airlines activities i.e. Security, Flight Operations, Maintenance, Ground Services, and Cargo.



Oman Air CEO Abdulrahman Al Busaidy said: "This achievement comes as a result of Oman Air's dedicated efforts to continuously enhance its standards of quality and safety in all fields of civil aviation. Oman Air's has attributed the Successful completion of the audit to its conforming with the standards and regulations set by IATA. This places Oman Air amongst companies that comply with internationally recognised safety standards, thus minimizing audits for the airline and increasing opportunities for more code share agreements. Airlines registered in IATA IOSA are subject to auditing every 2 years.



Oman Air's Catering Department was awarded the ISO 9001/2000 Certification. Also, The European Aviation Safety Agency (EASA), has awarded Oman Air's Engineering Division licence to execute maintenance works for aircraft named EASA PART/145. Oman Air Ground Operations Department was awarded the AHS 1000 excellence certificate from IATA for compliance with the quality and control standards as per IATA specification No. 804. This is in addition to several awards of recognition and certificates of appreciation received by the Cargo Department from airlines based at Seeb International Airport for the excellent services rendered.



DISCUSSION



The airline industry is a paradox. In terms of its operations it is the most international of industries, yet in terms of ownership and control it is almost exclusively national. It has also been very highly regulated, beset by a complex web of economic regulations. These constrained airlines' market access, pricing policy and output decisions and, as a result, competition itself. While each country and government tightly controlled its own domestic air services, the traditional regulatory framework affecting international air transport operations was based essentially on bilateralism and emerged in the aftermath of the Second World War (Doganis, 2001).



Airline service tends to be what economists call an undifferentiated product -- that is, to many passengers the service of one airline is rather hard to differentiate from the service of another. Modern aircraft are very much alike, at least within any given size range. The speed, comfort, and safety aspects of a journey are likely to be much the same, whichever airline a passenger selects (O'Connor, 2001).



Airlines frequently have concentrated their advertising on desperate attempts to differentiate their product by emphasizing steak dinners aloft, friendly smiles, and similar minor benefits. Yet probably a flight is chosen not by reason of favoring one airline over another but simply by the most convenient times of departure and arrival. In a sense, flight scheduling is a form of product differentiation, and it would appear to be the most important one (O'Connor, 2001).



It is relatively easy to enter the airline business and easier still for an existing airline to expand into a new market. Unlike a railroad, which must buy a right-of-way and lay miles of track before it can make a nickel, an airline need own only the vehicle. It does not own the "road" over which its vehicles travel or the terminals. And even the vehicle can be leased or bought on credit, aircraft typically being sold with a mortgage (often called an equipment trust) on them. The economic barrier seems small indeed, compared with almost any manufacturing industry (O'Connor, 2001).



Another characteristic of airline service may seem somewhat contradictory to the one just mentioned. It is that airlines may have an inherent tendency toward gradual elimination of competitors, with a resultant oligopoly, or even monopoly, in a market. This is a controversial point, but a belief in such a tendency has been one basis for the existence of governmental economic regulation of the industry.



Is it contradictory to say that this is a field that competitors can enter with ease, yet at the same time a field where only the strongest will survive? It is not contradictory if we distinguish between the short run and the long run. It is one thing for a small company to enter the airline business, and quite another for it to survive. The relaxation of entry controls that came with deregulation has been followed, as we will later see, by the entry of many new small airlines but the survival of very few (O'Connor, 2001).



Although as an industry, airlines have differences with other industries, it does not hold true when it comes to manpower and everything else that comes with it. Airline industries like Oman Air are experiencing many troubles, some of which is not visible by those who are outside the company. One of the most important trend that is happening within Oman Air is the high turnover.



The airline staff would be the best subjects to ask in order to gain an opinion of this turnover. As people who are in the frontline of providing service within the industry, they know what is best for their organization. The staff thinks that this high turnover that is being experienced by Oman Air is a result of many interacting factors.



Work in formal organizations such as Oman Air is characterized by many properties. Of all the many properties that characterize work in formal organizations, pay is one of the most important. Pay satisfaction has been found to influence significant organizational behavior variables, including turnover (Chonko, 1996).



Perhaps the staff in Oman Air are not well-paid therefore there is the presence of high turnover. A steady salary and a prospect for promotion should therefore be seen by an employee in order for him or her to be interested in staying with the airline. The salary system of the airline should therefore be given consideration and examined of loopholes. Being overworked and underpaid is not what an employee would like from their company.



The costs associated with sales force turnover are sizable - recruiting and training new salespeople as well as the opportunity costs that result when a territory is left open and revenue is lost. Sales force turnover rates vary from industry to industry and firm to firm, but research finds average industry sales force turnover rates as high as 53%, annually. Although some turnover is beneficial (functional turnover, i.e., the departure of low performing salespeople), the loss of productive employees is an expensive proposition, up to $40 thousand per salesperson (Chonko, 1996).



The existence of functional turnover places even more importance on the effective management of sales force turnover. Since poor performers will typically choose to quit more often than better performers, this means that employee turnover frequently has positive consequences for companies because they can attempt to replace leavers who were performing poorly with average or strong performers. What is needed is improved insight into the criteria used by salespeople in their decisions to leave their current positions (Chonko, 1996).



Undesirable working hours is also another thing that contributes to a high turnover. Undesirable working hours could either be long working hours or working on graveyard shift. It is inevitable that there are times when employees have to work overtime or work more extra days for a variety of reasons. It is also inevitable that employees also have to work during the night. As an airline industry, it operates on a 24-hour basis. There are employees that are scheduled to work at nights.



Workingextended hours for a long time is highly undesirable and can be detrimental to health. Most of the staff would say that workinglonger hours will have zero effect on productivity, except it could be argued that the employee's productivity might decrease as a result of their increased stress levels.



However, the undesirability of working long hours has to be weighed against the benefits to Oman Air's success. Brief periods of extremely hard work may sometimes result in long-term business which secures employees' jobs. The company therefore has to come up with a schedule of working hours for all the staff which would best work with them and at the same time would not compromise the success of the company. Part of this process should be the implementation of a job rotation scheme that would exchange employees between departments. The company should also make informal salary adjustments to accommodate certain senior employees who would wish to remain working in a technical capacity.



A high turnover is not really a bad thing, as is discussed in the previous paragraphs. Since those who are poor performers are more likely to quit their positions, the company would be left with the best employees. But such is not the case all the time. There are also many good and productive employees who wants to move to other companies even if they are doing very well in their previous company.



The reasons for changing employers were those of typical 'cosmopolitans' who wished to advance their careers by moving from organization to organization in order to satisfy high-growth needs (Aharoni & Nachum, 2000). Their main reason could be career advancement or an interest in new work challenges.



It is true that sometimes working in the same environment doing the same things could be boring and would push somewhat to look for some other job. Employees may also feel that there is no room for advancement in the kind of work that they are doing. It could be because they are not given by the management a chance and room for growth or simply because the employees themselves do not excel in this kind of work.



Therefore, there is a need for managers to design tactics in holding the interests of their employees. This could be in the form of benefits, higher salary, or better working hours among many others. Regular increases through the early steps of the salary system would provide definite positive feedback of career progression. The 'fast track' can also be used to reduce feelings of status inconsistency.



The high turnover within Oman Air could also have another positive effect, not for the company itself but for other employees who could be more deserving and right for the position. First, the high turnover would allow employers to take in graduates who had more to prove than their older and more expensive counterparts. The more recent recruits were more willing to take on extra work and to give up their leisure time in order to complete tasks. Second, these new recruits would bring the latest technical developments with them. Third, they did not have to be retrained or 'reprogrammed'. Fourth, labour costs would be reduced because most of the new appointments, who were recent graduates, entered at the bottom of the salary scales (Aharoni & Nachum, 2000)



Pointing to the fourth statement, this would again point on the factor of low pay as a reason for high turnover. But as these are new graduates, they still have much to prove and therefore will not be expecting a salary as that of those employees who have been working long in the company.



Furthermore, even though these individuals who were part of the high turnover knowledgeable in the technical activities of their employers and in the airline industry itself, the managers of Oman Air should not believe that a turnover would damage the body of expertise and tacit knowledge that had accumulated within Oman Air. This was principally because the airline's pool of technical knowledge was not solely the possession of individual staff.



The usual things that happen within a successful organization such as organization of work around project teams, the policy of having written reports on each project and the use of formalized standard operating procedures meant that the airline company will be able to hold enough technical information to ensure that no single employee will be irreplaceable whatever their level of expertise. The high degree of turnover would not mean a failure or decrease in the operations quality of Oman Air.



On the surface it might appear that these employers managed the pool of technical expertise in their organizations by simply exploiting the prevailing labor market conditions. The process was actually much more subtle. These industries did strive to retain staff but only those who were deemed to be particularly valuable to the firm because of their technical acumen and experience. Rather than viewing the over-arching strategy as one of crude labor market exploitation, it is best conceived as a mixture of market exploitation and selective retention (Aharoni & Nachum, 2000).



CONCLUSION



Oman Air is not alone in its experience of high staff turnover. This is a fact of many airline companies and even in other industries. This high turnover could be attributed to many things, the most important of which are undesirable pay and undesirable working hours. Management should therefore address their efforts on these to if they would like to be able to retain their employees, most especially the productive ones. On the other hand, not all the time is the high turnover a doing of the airline company. It could also be that the employee would like to move to another career and do some other things which he or she cannot possibly do in an airline industry environment. Although the high turnover could affect Oman Air, it does not affect it to a large extent. The bottom line is, the pool of technical expertise within Oman Air is not solely on one employee, but within the collective groups formed by employees. Therefore no employee is irreplaceable. Those who leave the company can be replaced with someone else of the same capability. Oman Air is in no danger of failing simply because of the high turnover.





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