FedEx Turnover Rate and Human Resource Strategies

In a recent literature, Bohlander and Snell (2009, PP.93) argued that “Employee turnover (rate) or turnover (rate) refers simply to the movement of employees out of an organisation”. Actually, it described “how long employees tend to stay” or “the rate of traffic through the revolving door”. “Low turnover (rate)” is helpful to the organisations, which indicated organisations retain employees by different HR programmes (Phillips and Connell, 2003, PP.2). As a common problem, high or low turnover (rate) can be caused by following reasons.

HR Programs in FedEx

Peer Recruiter

Reichert (2010) has written and demonstrated that, in the whole country (U.S.), there are “25 National Recruitment Centers” which are developed by FedEx to provide its mangers a much qualified employees during the interview process. Under the direction of regional personnel offices, these centers play the function of screening all applicants. A program called “Peer Recruiter” was introduced at each of these centers, helping to conduct a professional recruit and to screen applicants. The name of “Peer Pecruiter” has indicated that the peer recruiters will have a relative working recruit experience when doing an interview for applicants. In this way, the program can not only help select proper recruits, but also provide a chance for applicants to learn more about the expectation of the FedEx and their positions.

The retention of FedEx is related with employee relations and recruitment. FedEx really cares about employees and FedEx begins its retention efforts through centralizing the recruitment performance. There are many recruitment centers of FedEx around the world and it develop centers for the managers that with a better qualitied applicant to interview. The recruite program can play the role to help screen applicants and professional recruiters process.

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People – Service – Profits

A successful recruitment is certainly important for a company, but the problem is how to retain those applicants. In the opinion of Smith (2009) who is the CEO of FedEx, he said that FedEx has the simple managerial concepts and effective translation them into action. He called them as “People-First Philosophy”. This philosophy understood by FedEx from these concepts can be defined as “People – Service – Profits” which is “Purple Promise,”- a simple corporate philosophy . FedEx emphasizes that people comes the first, because they believe people make good business sense and the abilities of people are the basic for everything good of FedEx. Therefore, the secret of FedEx’s success and employees’ loyalty can be explained as its “Employee Friendly HR Practices”. (FedEx Express, 2002)

Programs help to reduce the turnover (rate)

The Recognition and Reward Programs (Motivating Employees)

FedEx believes that career advancement is not the only way to increase the growth, and the recognition and reward programs can also work well to reinforce desired behaviour, such as customer focus and quality. Besides, as effective approaches, those programs also keep their employees motivated and to deliver high-quality service. FedEx is willing to acknowledge the efforts of their employees. Because the important function of acknowledgment can motivate and satisfy workforce, as well as stimulate new ideas and cultivate better performance and team spirit. (Global HR, 2008)

“The Bravo Zulu Program” is one of the recognition and reward programs with this goal, recognizing the performance of its employees when they surpass their normal job responsibilities. There are wide recognition approaches, including nonfinancial Bravo Zulu appreciation letters, cash appreciation or noncash awards presented by management, etc. (Shetty, 2011)

Shetty (2011) stated that “The Suggestion Awards Program” is another recognition and reward program in FedEx. Just as the name of the program has implies, employees are encouraged to put forwards ideas to improve company’s operations. Of course, those ideas should be about productivity improvement, revenues increasing, lowering cost or promotion of safer working conditions, etc.

In FedEx’s reward process, one of the nice things is that the customer, who has voice in selecting outstanding service, is involved in the process. If the full-time employees have fulfilled service to their customers with full hearts at any time, they will win “The Golden Falcon Award”. The basis for these awards nominations are consisted of unsolicited internal and external customer letters citing outstanding performance. Every month, the winners of these awards will be announced by company video programs and publications and will receive shares of stock as well as an award. “The Five Star Award” is FedEx’s highest award which is given to individuals with outstanding performances. These performances always can materially contribute to profitability, corporation enhancement, and teamwork. Officers, managing directors, managers or senior managers, and non-managerial employees are eligible for the award. (Reichert, 2010 & Trimble, 1993)

The Communication Programs

• The Communication Programs
• Concepts
• Open Door Procedure
• A process for dealing with employee questions or complaints regarding corporate policy
• Guaranteed Fair Treatment Procedure
• An employee appeal process for having an issue or complaint heard
• Survey Feedback Action
• A key employees relations and satisfaction program

Table 3: The Employee Communication Programs

The candid communication with the employees has contributed a lot to the successful relationship and retention in FedEx. Smith (2009) emphasized on the thinking of finding the resolution of a problem. He pointed out that enormous times will be spent in dealing with the internal employee response program by FedEx. The most important point in this program is an “Open Door Procedure”. In the open situation, employees will be encouraged to freely say out and find out solutions to the controversial, disagreeable or contrary problems existing in the current policy. (Reichert, 2010)

In Reichert (2010) study, he stated that a relevant fair and open solution to the complaint of the FedEx’s employees is the “Guaranteed Fair Treatment Procedure” which involves three basic steps.

The first comes to the management review which will have the result within seven days, employees should submit a writer complaint letter to the members of management to describe the issue. Then, the members of management check all the information related to the issue, grasp the facts, make a fair decision and hold an individual meeting or telephone conference to discuss the decision. Finally, the management review will open the decision by writing it in paper, letting the complainant and personnel office know the result. (Reichert, 2010)

The second step comes to the officer review. A vice president or a senior vice president of a division is the major conductor. After the result of the first step has came out, the complainants will have seven days to submit a written complaint letter to the officer review, if they disagree about the decision made by the first step. (Reichert, 2010)

The last step is the executive review. The complainants can submit their complaints to the “Employee Relation Department” within seven days. Then the department will investigate, prepare and establish a GFTP case file to the “Appeals Board”. The “Appeals Board” reviews all information related to the issues again and makes a decision of supporting or overturning. The “Appeals Board” will respond to the complainant by written and copy a same one to personnel. As a result, the complainant and company will be bind on the final decision made by “Appeals Board”. (Reichert, 2010)

“The Survey Feedback Action (SFA) Program” which evaluates the employees relations and satisfaction. From the beginning of the manual survey to online survey, the pattern has been changing. However, there is an important thing which has not changed. Employees participated in this survey, through gathering the results to develop and implement managers’ corrective action. With the continuous improvement of employee satisfaction, FedEx retains the employees, as a result, the turnover rate will lower. (Trimble, 1993)

Advantages of the HR programs for employees and FedEx

Advantages of the HR programs for employees

Tangible evidence can be found in FedEx, the employees have the chance to know what they will obtain. FedEx strictly insists on a promotion procedure within its policy and career advancement policy. Every employee can be informed the opportunities by the “On-Line Computer Job Posting System”(Job Change Applicant Tracking System), the notices will be posted throughout the company if the position is open, making everyone see the position demand. The open position is generally taken up by the employee who works inside the company. Unless there are truly no qualified applicants inside, the company will begin to search outside. Therefore, employees have sufficient opportunities to advance in FedEx. Besides, “Tuition Refund Program” is another popular career advancement tool for employees. With the program, employees who go for further study or training will be reimbursed by company. Many students are employed by the company in the main hub and other locations. (Reichert, 2010)

According to the IBS Center for Management Research website (2003), FedEx believes that the employee retention and relation have much to do with the employees’ development, communication and motivation. Keeping looking for approaches to improve their employee training, FedEx carried out an “Interactive Video Instruction” (IVI) in 1986. The new information training and test preparation are applying to IVI which contains job knowledge tests for employees twice a year. The most important advantage of this program is that employees can use their spare time to learn and train themselves. Each employee can formulate his or her own learning pace and the training can be repeated as many times as their need. FedEx notes that IVI makes 60% of the training time to be reduced and information to be standardized.

The employee compensation is organized to stimulate new ideas, acknowledge individual effort, promote teamwork and encourage outstanding performance. The compensation programs are the blend of benefit plans, pay programs, and quality of the work programs. FedEx Express gives these types of programs with regard to both full time and part time employees, that enable the arrangement of employee can be flexible and support them to have more time with their familises.

The most important element attributing to the success is the action. As Smith (2009) said, many local part time jobs are employed by the company as local full time jobs. However, the employees who are senior and from the outside local region will oppress them and hinder the chances for the part timers to advance. A program is set up by FedEx to solve the problem and keep high value employees. Under the program, the part timers will gain credit for local service.

Advantages of the HR programs for FedEx

FedEx should implement the “People – Service – Profits Philosophy”. The question like “what your expectation on me, and what do you expect me to do?” always comes first. FedEx uses the “Extensive Orientation Program” to explain its values to employees and tries to spend sufficient time to answer that question. For FedEx, Smith (2009) thought there are three important things: carrying cargo, letting employees to know its plans and making sure employees to learn that besides earning salary. There must be some ulterior reasons or some higher-level goals of working. It is necessary for employees to set up their goals and receive rewards for their job well done. In addition, employees can also influence the contents which they have done and methods with which they done. (Trimble, 1993)

There are two programs used by FedEx to help its employees fit their jobs. The first is ‘Leadership Evaluation and Awareness Process Program’ which gives a opportunity of the non-managerial employees to seek managerial positions which can help them to learn more about the management job. Besides, the “Job Change Applicant Tracking System (JCATS)” is also applied to help post job in FedEx, by which employees can know what jobs are open in time. (Shetty, 2011)

In 2010, “New York Times” claimed that “the Fortune magazine” has recognized the FedEx Corporation as one of the 100 “Best Companies to Work For” of America. It is the only shipping company that list on the top 100 in Fortune and it has been maintain the position for 10 times in the past 11years.

From the analysis, some positive trends emerge, which can be regarded as an interactive functions that are the HR department is doing good things with the purpose of keeping their employees happy, and in turn the satisfied employees are doing better to make profits for FedEx in PSP philosophy.

The HRM creates great atmosphere, which brings a competitive advantage and a numerous qualify people into FedEx to make their good contribution to the company. FedEx’s HRM performance is beyond all of competitors. It is known as a company with very friendly employment system. In addition, 3% of FedEx’s total expense is put in training programs, which is six times more than other companies, such as “Executive Education Programs” and so on. Because of those training programs, FedEx can keep its turnover rate at a lower levle than its opponents. (Trimble, 1993)

The FedEx survey or action or feedback program is a survey of employee attitudes to act as the GFTP and other communication tools. In order to improve its department ability, management applies the survey to decide their next actions. However, the survey is anonymous for maintaining the fairness of attitudes.

In the past 13 years, every group and work unit in FedEx can see the survey in public and management never receive any individual responses. The reason is that all managers must meet, discuss and settle the problems that the employees have been put forwards, in less than six weeks. The manager whose feedback score is low should take the corrective actions to develop and improve themselves to be better. FedEx believes that people may actively involve themselves into the matters of company if they feel their influence to act on the real things.