Malaysia Airlines System HRM Issues

Puman 8esources ManaaemenL | Croup no 4
HUNAN RESOURCE NANACENENT

ABB 10302

Nalaysian Airline System
Berhad (NAS) Human
Capital !ssues and
Strategic Solution
Program:
Bachelor of Aviation Nanagement, UniKL N!AT

By:

Nuhammad Afiq Aqwa Nd Nansor S3276210188
Bachelor of Aviation Nanagement, UniKL Nalaysian !nstitute of Aviation Technology

Nuhamad Nazmi Nohd Chazali S3276210236

Atikah Nuhd Sahar S3276210024

Nur Fatin Che Soh S3276210022

Date submitted:
14 April 2011


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Abstract

The case deals with the problems faced by the Nalaysian Airlines, the national flag air
carrier of Nalaysia. While the company had many notable achievements, since the 1370s, it
began to face major financial trouble since late 1330's. The case examines the strategies
pursued by NAS to overcome the challenges. The case also describes a brief description of
demands and challenges in the international airline industry.

Purpose - This study seeks to investigate, through the Human Resources Nanagement
practices in the context of several issues discussed, whether the issues are manageable
and gives an impact to the whole organization.

Design/methodology/approach - A discussion was held with the lecturer of Human
Resources Nanagement and several experienced lecturers that have been a managers in
the industry itself at the specific department. The theories are applied in this research and
been transformed into a model. The model is developed, we come out with additional
theories. Our group has come with a hypothesis that performance of a company tallies with
the Human Resources Nanagement strategies and efficiency because the output of the
individual performance can affect the whole organization performance. We are required to
look for issues that are related to Human Resources Nanagement in a particular company
and seek for solution to handle an issue. Then, a deeper exploratory factor analysis is used
from a conducted interview with the Human Resources Nanagement in the company itself
focusing on the Engineering Department in NAS.

Findings - The dominant issues in HRN practices in NAS were found to be: Tangibles,
Recovery, Responsiveness, and Knowledge.
Further results indicate that, although the direct effect of HRN practices is important, the
indirect effect with NAS handling the matters in the way of practicing the human resources
management theories that we have learnt is a stronger driver for the organization to
perform its best. Through our findings and methodology that is we sent a general questions

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to the interviewees that are related to our research and we add new questions based on
the interviewees' reaction and answers.

Research limitations/implications - A notable limitation is that the present study
focuses only on the airline services and uses only one industry (Air transportation industry)
to illustrate the findings. Future research should examine other aviation service categories.


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!ntroduction

The commercial airline is an extremely competitive, safetysensitive, high technology
service industry. People, employees and customers, not products and machines, must be
the arena of an organisation's core competence. The implications are vast and pervasive
affecting no less than the organisation's structure, strategy, culture, and numerous
operational activities. Pertaining to this, a lots of issues of Human Resources Nanagement
arises in retaining the competencies. Strategic management seeks to coordinate and
integrate the activities of the various functional areas of a business in order to achieve
longterm organizational objectives. A balanced scorecard is often used to evaluate the
overall performance of the business and its progress towards objectives. Human Resources
Strategic management provides overall direction to the enterprise and is closely related to
the field of Organization Studies. Strategic planning and management are more than a set
of managerial tools. Train some of the employees in the area of time management,
material handling at work etc. Retrenchment of surplus employees caused due to superior
speed Pay for performance Promotions based on efficiency High quality work environment
at the production place.These human resource issues are also known as functional
strategies of HRN. !n many cases the response to the problem or opportunity will require
the continuous attention of senior management of the organization. Be interconnected with
other issues and developments. Suboptimisation, or poor quality in regards to
management, decision making, teamwork, employee motivation, or communication can
translate into loss of customers, loss of market share, loss of organisation assets, and
above all, loss of life. !n such a safetysensitive, customer servicecentric environment, the
traditional productcentred industrial model of corporate structures and industrial relations
is inappropriate. Human resource management (HRN) expertise is required now, more than
ever, to spearhead internal marketing strategies in order to gain customer lockon. The
primary area of focus of strategy is the manner in which the HR department in NAS.


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Nalaysian Airline System Berhad (NAS) Background

Nalaysian Airline System Berhad (NYX:3786), DBA Nalaysia Airlines(abbreviated NAS), is
the governmentowned flag carrier of Nalaysia. Nalaysia Airlines operates flights from its
home base, Kuala Lumpur !nternational Airport, and its secondary hub in Bayan Lepas,
Pulau Pinang. !t has its headquarters on the grounds of Sultan Abdul Aziz Shah
Airport in Subang, Selangor.

O Organisational vision

To be the largest, most successful and most respected airline in the world."

O The Beginning

Nalaysia Airways Ltd. (NAL) was founded in 1347 by British Overseas Airways Corporation
(BOAC now British Airways), Ocean Steamship Company of Liverpool and the Straits
Steamship Company of Singapore. By the end of 1347, Nalayan Airways engaged in an
expansion exercise and NAL began providing regional flight services. The presence of BOAC
also facilitated NAL's entry as a member of !ATA. A year after the !ndependence of Nalaya
in 13S7 and with the participation of BOAC, OANTAS, the government of the Federation of
Nalaya, Singapore and the Territory of North Borneo, NAL was launched as a public limited
company. NAL then entered the jet age with the purchase of vickers viscount aircraft and
by 1360 NAL propelled into other farflung regions of Asia. The acquisition of an 82seater
Briston Britania in 1360 made mass transport by air a reality. This marked the first
international nonstop service for NAL, which operated directly between Kuala Lumpur and
Hong Kong.

After the formation of Nalaysia in 1363, the airline was renamed as Nalaysian Airlines
Limited (NAL). The formation of a new nation saw the need for NAL to be a national carrier
to integrate and connect the far corners of Nalaysia. Two years later, Borneo Airways
merged with NAL resulting in fleet and network expansion. !n 1366, the Covernments of
Nalaysia and Singapore became the majority shareholders in the national carrier and

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NalaysiaSingapore Airlines (NSA) was formed. !n 1371, the partnership between Nalaysia
and Singapore was dissolved, and Nalaysia Airlines Berhad was incorporated. With an
authorized capital of RN100 million1, the company made a final revision to its name in
November 1371, and Nalaysian Airline System Berhad (NAS) was born. By 1372, Nalaysian
Airline System was already servicing 34 domestic routes and six international destinations.

O Nodernization

The year 1376 saw NAS enter the information age, when it computerized its whole
operation. !n the 1380s, NAS became the first major government agency to be privatized
but a change of business practice did not change the company's focus on being customer
driven. As part of its modernization and expansion, NAS also invested in a new
maintenance hangar facility, as well as extending its catering facilities in Subang, where the
then international airport of Nalaysia was located. As a final part of the restructuring
exercise, NAS moved into its new corporate headquarters to a 36storey building, which
became the hub for the future direction of the company.

O Clobal reach

The year 1386 saw NAS offer the first flight service to the United States. By the end of
1387, NAS had established itself as an international carrier of choice, offering 34 domestic
routes and 27 international destinations. NAS changed its corporate identity and became
known as NAS, with the objectives to create a greater awareness of Nalaysia. As part of its
fleet modernization program, NAS invested RN3.6 billion to expand its fleet of aircrafts in
1331.As of Narch 2001, NAS had a fleet of 3S aircrafts in its network serving over 114
destinations.


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O Achievements

NAS received international acclaim from many independent organizations for various
aspects of its services. !ts top management team received an award from the Asian
!nstitute of Nanagement and the World Executive Digest, for its excellence in general
management and success in positioning itself in the airline industry. NAS received
numerous awards in the airline industry, advertising industry, worldclass publications,
NCOs, private institutions, and independent research groups. Even during the economic
downturn, some of its achievements were notable.


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Arises !ssues
O Problem 1 Push and pull factor for the employees
!ssue The push and pull factor is the common problem in any airline industry whereby
the pay for the job is demandable and varies according to the offer that is made by the
airlines especially for the License Aircraft Engineers (LAE). From our interview, this situation
is often happen in the engineering department in NAS whereby the experienced LAEs that
have worked for them for more than 10 years walk away to work with another airlines
because of the pulling factor made by the other airlines such as higher salary, more
benefits for the employees, exclusive and different working environment, opportunities to
live outside of Nalaysia and many more pulling factors that are the cause of this situation
happens. Same goes to the pushing factor which is the internal factor of the company that
causes the employee to walk away from NAS.
Discussion According to Nr. Abdul Rashid Sharif and his companion Nr. Nuhammad
Hilmi Nokhtar, from the Human Resources Nanagement in NAS Aerospace Engineering
(NAE) department the pulling factor from another airline is normal to NAS where other
airlines like in the Niddle East such as Emirates were expanding and they need readymade
engineers who have working experiences and attitude in supporting their expansion. At the
same time, Emirates needed to employ massive numbers of experienced and new
employees as fast as possible. This is where the pulling factor is so strong. Same goes to
the national low cost carrier, Air Asia whereby a lot of young engineers who have work in
NAS for only about 2 to 3 years are being offered by Air Asia to work with them and they
paid double or triple the salary that they can get in NAS. Even the veteran who has worked
in NAS for more than 1S years left to Air Asia.
Then, raise another question, did NAS aware the pushing factor that cause so many of
their engineers left the company?" Pushing factor for NAS is where the airline is bleeding
money during in 200S to 2007. NAS were having a financial problem and the motivation of
NAS workers at that time were at the lowest. As for the employee who did not satisfy with
their salary and they were afraid that they will be terminated due to the financial crisis, the
employee seeks for another airlines that having more stable in terms of financial and

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employment management and it was an opportunity for them to get higher salary and
make a better living. An information that we get from to our lecturer, Nr. Naulan Bardai,
who was once an employee and appointed Nanager in the HR Engineering Department in
NAS said that if an employee who wants to leave NAS will have to fill up a resignation
from. !n that form, the employee needs to tell the reasons to leave the company. And by
doing so, the company knows what is the reasons that become the pushing factor that
cause the employees to leave NAS. So, the employees were leaving NAS for a strong push
and pull factor. !t is a difficult time for NAS to minimize the pushing factor.

As a measure to deal with this problem, NAS have to hire expatriates of engineers from
other airlines such as Oantas, Lufthansa, S!A and many more airlines trough out the world.
Currently, there are more than 60 expatriates engineers that work in NAS. NAS also had
taken an action to minimize the pushing factor by restructuring their corporate strategy.
NAS Aerospace Engineering (NAE) has rebranding their vision which is 'to be the preferred
global NRO organization' and their new mission is 'to deliver excellent aerospace
engineering services, provide value to customers, maximize returns to stakeholders and be
the employer of choice'. By rebranding their new vision and mission, NAS Aerospace
Engineering comes with the values of safety and quality, passion for excellence, integrity,
teamwork and business sense (serve customer, make money, save money). As a result,
NAS Aerospace Engineering has been Awarded Asia Pacific Airframes NRO Center of the
Year" by Frost S Sullivan and Aviation Week's Overhaul S Naintenance 2003 Best Asia
Pacific Airline NRO Operation. This achievement has made NAS Aerospace Engineering the
preferred choice in Asia Pacific region and in the whole world. Further on, NAS has
successfully minimizing the pushing factor and this also has become the strong pulling
factors for the engineers to stay working in NAS.
Deepening into this problem, another issue that is very critical in NAS is the 'job design'
issue. ]ob design is the role that plays by a particular person in a particular job. For
example, the store man in NAS. The store man in NAS is not wide and it is limited only to
that role. According to Nr. Naulan opinion, job design is a good solution to minimize
pushing factor in a company. !f the design of the job is wide and variety, the capacity of

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earnings can be maximize and the job scope of that particular employee has been
enlarged. Furthermore, the salary of the employee can be higher and thus this will lead to
maximization of job satisfaction to the employees. This can help to reduce the pushing
factor in one organization. !n addition, Nr. Naulan stated that, he was doing his research in
13321333 about NAS job design. He found that NAS job design is the just the same from
1372, the year NAS was established until 2003 which is the year Nr. Naulan resigned from
NAS. However, until now, we still not sure whether the job design in NAS has been revise
to widen the scope of the job.

Opinion - !n our opinion regarding the pull and push factors, the organization have to
minimize the pushing factors that causing employee to runaway from the company and
work with another company since the pulling factors are cannot be controlled by the
management. The organization needs to practice a healthy and friendly working
environment in order to minimize the pushing factors and keep the employees motivation
at peak. Besides that, the company has to maintain the performance of the organization to
avoid pushing factor and be competitive.


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O Problem 2 Discriminations and diversity practices
!ssue - Discrimination means unfair treatment of a person or group on the basis of
prejudice. !n other words biasness or unfairness. Discrimination in this case usually refers
to gender discrimination between men and women where women always being looks down
by men, or where women have to compete in the men world. On other hand, the "business
case for diversity", theorizes that in a global marketplace, a company that employs a
diverse workforce (both men and women, people of many generations, people from
ethnically and racially diverse in backgrounds and have different traits. !n the aviation
industry, diversity practices are applied whereby, men and women work together, differs
from ethnicity, backgrounds and beliefs and also work with the people from all around the
world because aviation industry is a global industry. But there is a gap between men and
women capabilities where women cannot go for a higher position or higher management
job such as being appointed as a Nanaging Director and Chief Executive Officer (C.E.O)
and likewise. The term is called 'glass ceiling'
Discussion - From our interviews, both men and women are treated equally in NAS until
it reach at certain things that are requires consideration from both men and women.
According to Nr. Rashid, in NAS Aerospace Engineering, men and women are treated fairly.
Nen and women are doing the same job appointed to them. NAS practices a strong
teamwork in their working environment whereby men and women have to collaborate to
make sure the job done is at the best quality. When come to a certain level where women
who does the technical job such as maintaining the Power plant unit, airframe
maintenance, cabin, avionics instruments, auxiliary power unit (APU), radio and many more
technical work. After the women get married and have kids, the women engineers or
technician will be given an option to be moved to the white collar work. The women
engineers given a choice to change to office environment that is proper to married women.
The term whitecollar worker refers to a salaried professional who performs semi
professional office, administrative, marketing and sales coordination tasks, as opposed to a
bluecollar worker, whose job requires manual labor.
On the other hand, women who work for NAS have been given other benefit which is a
protection for them. Women who have work until late night or working until more than

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2200 hour (10 p.m.), they will be provided a free transportation by NAS to send them
home. This benefit is stated in the Employment Act 13SS (Act 26S)
(refer to Appendix 4)
. This
benefit applies to all women either in technical job or in the white collar job. This is to
protect the women employees and to give equal right for the women to compete with men.
!n addition to that, there are also several more benefits as stated in in the Employment Act
such as maternity leave.
Besides that, NAS also have an issue of gender bias practices. !n this issue, NAS has
discriminated the unfair and unequal treatment of the female cabin crew has a direct
impact on women's access to equal opportunities. A memorandum on gender bias practices
by the NAS by the joint initiative against gender discrimination was made. The ]oint
!nitiative
(refer to appendix 1)
strongly disagrees with the discriminatory practices of NAS. They
believe that NAS has discriminated against female cabin crew on the basis of gender and
denied them of their right to work in a nondiscriminatory and stressfree environment.
Bearing in mind women workers make up 60% (2300) of the NAS cabin crew, it is their
inalienable right to fair and equal treatment. This memorandum seeks avenues to end
genderbased discriminatory practices and to recognize women workers' right to equality
and justice.
Further on, NAS have an issue regarding the discrimination retirement policy to women
stewardess. Women stewardess in NAS has to retire at the age of 40 and another five
years extra for those in senior positions. This discrimination is even more pointed when
compared to their male stewardess, in which male flight attendants are given the option of
retiring at the age of SS
(refer to appendix 2)
. !n this issue, it has become a problem where
women who have reached the age of 40 and above are not as attractive as they used to
be. This issue has thickening the layer of discrimination to the already sexist and ageist
statement. NAS should start to value their employees beyond perceived gender stereotypes
and instead take a REAL look at these women who are vibrant, intelligent and attractive,
and who possess an added advantage experience. !f not, and if such ancient principles
are continued to be enforced, NAS might find itself in the precarious position of losing such
experienced stewardess.


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Opinion - From our perspective, NAS did face the discrimination problem frequently. NAS
did try to avoid discrimination between their workers and as one of their values is integrity
and teamwork in their working environment has made them success. NAS did counter the
problem and manage to solve it on its own way. !n NAS, both women and men can work in
harmony and equally as every opportunity provided by NAS to both men and women are
the same as long as they achieve their mission and vision. Diversity in a working
environment is a good and conducive working environment.


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O Problem 3 Employees Union (NASEU)
!ssue Employees Union is a representative of the group of the employees in the company
to represent the employees. Employees' Union is usually a separate management of the
company and the employee. !t is a group. And the union will voice out to the company
administration about what they want and they demanded a negotiation between them
members and the company's management. They will negotiate about their salary, benefits,
allowances and many other things. Same goes to NAS. !n NAS, there is an Employee Union
which is called, NAS Employees Union (NASEU) and it is classified as an association.
NASEU is the representative of the group people in the company to voice out about their
salary, benefits that they can get while working in NAS, what they did not satisfy with the
company and many more.

Discussion - in 1371, five new joint councils were introduced without collective bargaining
rights. Henceforth, the scope of the union's role was limited and it merely assumed
consultation status the government. !n essence, the government would solely decide on
most matters affecting the workers and unions.
The same year witnessed the Nalaysian Airlines System Employees Union action, which
received solidarity support from international workers organizations. This provided the
pretext for more restrictive trade union and labour relations laws to control public and
private sector unions. A strike was held in an action of demanding pay rise from NAS and
resulting the operation of NAS was disrupted. NAS been closed for 2 weeks. About the
same time, CUEPACS deputy president A. Ragunathan and secretary general ]amaluddin
bin Nohd. !sa had also visited Tun Dr. Nahathir Nohamad and, within two weeks, the
bickering between CUEPACS leaders and the Nalaysian Trades Union Congress (NTUC)
became public. That is the beginning of the Employees Union problem.
Then, cames several more of the NASEU problem such as demanding of their rights and
fairness as mentioned in above issue. NASEU intervention to the management of NAS
regarding the dissatisfaction of the demotion of workman, Ungku Yacob Ungku Suleiman
(refers to Appendix 3)
. This case has been up to the court and it is between NASEU and NAS

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berhad (Nalaysian airlines system bhd v. Nalaysian airlines system employees union
peninsular Nalaysia industrial court, ]ohor). The union was unhappy with the decision of
the company to demote the workman from the position of customer services officer, a
Crade C position to the lower position of customer services agent, a Crade B position. This
is a trade dispute referred to the Court by the Honourable Ninister of the Human Resources
under s. 26(2) of the !ndustrial Relations Act 1367 ('the Act'). !t is in respects of the
demotion of one Ungku Yacob Ungku Suleiman ('the workman'), a member of the
Nalaysian Airlines System Employees Union, Peninsular Nalaysia ('the union') by the
Nalaysian Airlines System Berhad ('the company').
NASEU has been demanding more and more to NAS about pay rise and more benefits for
their members for quite some time and what NAS do to overcome this problem is by
dealing closely with NASEU, negotiating with NASEU representative and tried to reasoning
with them. NAS cannot simply ignore NASEU because it is protected by the Act and laws.
So, what NAS management do is by to treating NASEU nicely. Besides that, NAS also have
gained the benefits for their employees to void any dissatisfaction and problems arise by
NASEU.
Opinion - Appointing the Employee Union in NAS (NASEU), we observe that Employee
Union is a good platform to find out what the employees wants and to survey how the HRN
efficiency can be improved from the Employee Union. HRN can work together with
Employee Union to handle the problems regarding the Human Capital Nanagement. Further
on, NAS can use NASEU as a platform to negotiating with the employees.


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O Problem 4 - Competencies (Asset or Liabilities)
!ssue What is a kemployee, and who is worthy of such a title? Nuch has been written on
the subject of kemployees, and in our opinion most of it flat misses the mark. !n fact, go
so far as to say that what most people refer to as kemployees are not really assets, but
rather large liabilities. !f you allow your organization to be held hostage by those
employees who feel like they are indispensable, you are only exacerbating the problem.
The need to retain talent and reduce turnover, disputing the conventional wisdom of how
most businesses address the risk of managing key employees. A fresh perspective on the
employees competencies.
Discussion To be a competitive airline, the airline should have better performance to
compete with other airlines in the world. That was how Nalaysia Airlines did to be one of
the competitive airlines and become S star airlines in the world. Started from domestic
carrier in 1347, Nalaysia Airlines turned into an international airline in less than a decade.
Today, Nalaysia Airlines flies around S0,000 passengers daily to some 100 destinations
worldwide. The airline holds a lengthy record of service and best practices excellence,
having received more than 100 awards in the last 10 years.
During our visit at NAS Aerospace Engineering, Nr. Abdul Rashid who is a Nanager Staff
Affairs and Human Resources and his colleagues, Nr. Nuhammad Hilmi Nokhtar said that
there are several methods to maintain and improve the organization performance especially
in the Engineering Division. Starting from recruitment, they are very strict in selected those
employees. They have adopted one method known as, Aptitude Skills Knowledge (ASK).
ASK method is that, they need a discipline, punctual and smart employee. Rather than that,
they need an employee that has a skills pertaining to the position offered and additional
knowledge in aviation field. Besides, the candidate needs to match those requirement that
stated by the organization. From ASK method, NAS can filter those who are only the best
to work with them and this way, NAS can control the quality of their job and performance
of their organization.
Noreover, they applied Personal Fatigue Delay (PFD)

in order to produce a productivity
employee. PFD is the method to measure the working hours of the employee used/spent
during carried out the job. These PFD must meet the Day in Life out (D!LO) working

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portion. As example, in Engineering and Naintenance Division, the D!LO is 80%. !t means
that, an employee that work 10 hours a day need to perform 80% from their working hours
, 10hrs x 80% = 8hours. 8 hours is the useful hour to the employee to perform their work,
while the other 2 hours is the deduction hours from 10 hours. Usually, the other 2 hours,
are for another living activities as a human being that includes going for a break, eat and
many more. That was how the organization measured the productivity of the employees
towards to be a performance organization.
Since they have introduced and practiced lots of method, unfortunately there are several
causes and effects to the organization. These cause and effect need to be monitored and
prevented, otherwise it will affect the organization performance. Regarding to Nr. Hilmi,
they have adopted cause and effect diagram by Kaoru !shikawa
(refer to appendix S)
. The cause S
effect diagram is the brainchild of Kaoru !shikawa, who pioneered quality management
processes in the Kawasaki shipyards and in the process, became one of the founding
fathers of modern management. The cause and effect diagram is used to explore all the
potential or real causes (or inputs) that result in a single effect (or output). Causes are
arranged according to their level of importance or detail, resulting in a depiction of
relationships and hierarchy of events. This can help the organization search for root causes,
identify areas where there may be problems, and compare the relative importance of
different causes.
Opinion - !n our opinion, Nr Rashid, Nr Hilmi and other colleagues did a great job in order
to match their productivity to what they can do to the organization. They have introduced,
developed and applied lots of methods to improve and maintain the organization
performance. Even though there are effects or causes to the organization, they applied
'HotStove Principle', created several methods of solution and took an immediate action.
Last but not least, to be a competent and effective organization, an organization cannot
stand alone without individuals or people who are supposing to support them at any level.
Each of the divisions or departments need to corporate together towards achieving the
organization objectives.


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Learning Points

O Ethics and Noral perspective

Sensing a need to connect ethics and moral in Human resource is important in Human
Resources Nanagement. Referring to our first problem that is 'discrimination and diversity
practices in the corporate environment', ethics and moral plays an important role in HRN.
Ethics include fairness, judgmental, beliefs, justice and many more that are related to
ethics and moral. !n our observation, ethics and moral is the base line in managing Human
Resources. We can relate that in managing human resources, we need to be fair, justice in
making actions, no discrimination, we have to be diverse in beliefs and background, we
have to be inclusive and motivation based on ideas of right and wrong. !n concerned with
principles of right and wrong or conforming to standards of behavior and character based
on those principles, "moral sense", "a moral scrutiny", "a moral lesson", "a moral
quandary", "moral convictions", "a moral life" is applied in Human Resource Nanagement.
A Code of Conduct is a written collection of the rules, principles, values, and employee
expectations, behavior, and relationships that an organization considers significant and
believes are fundamental to their successful operation. A code of conduct enumerates
those standards and values that make an organization remarkable and that enable it to
stand out from similar organizations.

O Aligning with the corporate strategy

!n addressing our fourth problem that is 'Competencies (asset or liabilities)' , the objective
has been to improve liquidity through better yield management, effective management,
and better organizational structure, preplanning of corporate structure and needs for
committed in working capabilities. Noreover, key employee title is a good motivation for
the employee to improve their working performance as an individual thus, if an individual is
performing well, the organization also will perform well. !n addition, it aims to initiate
efforts to normalize its leverage and capital structure to bring HRN more in line with its
corporate strategy to compete in the industry. HRN also strive to be standard in terms of
operational productivity, service levels and costs. !ts focus is on improving quality and

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efficiency, and putting a halt to all form of abuse within the organization. HRN intends to
reassess the effectiveness of its role in corporate network and trying to give the best out of
it. This involves reviewing the viability of the existing plan structure and organization, and
the realigning and re deploying of its men power capacity to markets that offer the greatest
opportunities for all. Furthermore, HRN has instituted various improvement programs to
raise efficiency and productivity levels to industry standards. Nutually beneficial
cooperation, alliances and tactical arrangements are also being explored with interested
industry.

O Deepening into employment act studies

From our visit, Nr. Abdul Rashid Sharif suggested that student that study management should go
into deep learning about Employment Act. Referring to our second and third problem that is
'Discrimination and diversity practices' and 'Employee union' , in Human Resource Nanagement,
Employment Act is a part of the guidance and rules especially when it comes to hiring, firing,
promoting, laboring and many more that are connected with the employment. Some company
simply just ignoring the Employment Act and they did not conducting their employees according to
the law. Nowadays, employees are protected by the law and employers cannot simply hiring and
firing the employee. Employers who are recruiting must know and understand the laws, and at the
same time follow the laws that are stated in the Employment Act.

O Up to date with current situation

From the methodology of our research, from what we can sum up is that we can get the
most current issue of what happen in the industry. From this point of learning, we can get
something that is more that we can learn in the lecture and in the books. We can just learn
the theories from the lecture and on the surface understanding of the theories. But, in this
exercise, we can relate the theories with the real life working environment. Thus, it helps
us to enhance our understanding in this subject and we can practice our knowledge from
the theories and make it into a new theory. Furthermore, by practicing this exercise, we
can also get more opinion and gain experiences from the experienced people in the
industry. Their opinion and experiences are priceless in contrast to what we can pay to
learnt in the class.

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Conclusion

!n conclusion, our research made it clear for us to recognize the theories that we have
learn in the class and applied it in this research. This is directly as a practical exercise for us
in understanding more about this subject and its significance in our study. From our
hypothesis and observation, whether Human resources Nanagement giving an impact to
the whole organization's performance. The can relate that the theories that we have learnt
in the class and books is successfully applied in this research and we conclude that the
hypothesis is true that Human Resource Nanagement give a big impact to the whole
organization's performance. The issue stated in this research proves that an efficient
Human Resource Nanagement is crucial in an organization to be success. The primary area
of focus of strategy is the manner in which the HR department in general aligns activities,
policies and procedures with the recruitment and selection and diversity and equal
opportunity imperatives of the organisation. Each of the individual positions has
characteristics that may be used to expand and/or defend their sustainability of their
business growth.

Crowth and profitability are ultimate objectives from any actions taken. !dentifying issues
such as companyfocused or competitionfocused and stays within boundaries or pushes
the boundaries are matrix variables that guide assessment. The NAS aviation market
provides distinctive examples of a business in each of the businesses that NAS do, thus
applying the theory to a realworld situation. NAS must constantly expand the market while
defending against other airlines that seek to take a greater share and Human Resources
Nanagement in NAS must play bigger and more important role in involving the company's
management.

From this exemplification of the strategy simply stated is that the market environment is
dynamic and constant assessment is necessary. Nanagers seeking to maximize differential
advantage and the competition have a wealth of strategy tools available. Each one provides
information. Using more than one contributes to a manager's ability to understand the
working environment in Human Resources Nanagement. !n a nut shell, this exercise gives
us a deep understanding in managing Human Resources.

21

Future !mplication
From this research, we have come out with one new idea to apply in our future research.
We decided to do an industrial survey to research and investigate about problems that arise
in the organization. Then, by using our knowledge in statistics, we can do a hypothesis
testing and identify the problems and solve it using statistics hypothesis testing. From that
analysis, we can go into deep research about particular problems and solve it. !n addition,
we can propose the research that has been done to be shown to the particular company.
By doing so will help us and the Bachelor of Aviation Nanagement course is well known and
recognized by the industry.

Acknowledgement

We thank to all of the persons and organization who were involved in this research
especially the representative from the Nalaysia Airlines System (NAS) Berhad, Nr. Abdul
Rashid Sharif and Nr. Nuhammad Hilmi Nokhtar who have kindly assisted us in discussing
the issues faced by NAS and being very helpful in this research. The management of UniKL
N!AT, especially our Lecturer in Human Resource Nanagement subject, Nr. Nor Hisham
Chafar, Nrs. Sahzilawati Nohd. Nor, Head of Aerospace Section, UniKL N!AT for permitting
us in getting approval for the visit, Nr. Suhaimi ]antan who helped us to get contact with
the representative from NAS and gave a very supportive information and guidance and last
but not least our Business Ethics lecturer, Nr. Ahmad Naulan Bardai who gave us a lot of
guidance in preparing for the visit and giving us so much information regarding the Human
Resources in NAS. And finally to, Nrs. Zabariah N.D !brahim for checking the final draft of
this document. Not to forget, to all of our lecturers and individuals who have helped us in
doing this research.


22
Appendix 1

NENORANDUN ON
CENDER B!AS PRACT!CES BY THE
NALAYS!A A!RL!NE SYSTEN
BY THE ]O!NT !N!T!AT!vE
ACA!NST CENDER D!SCR!N!NAT!ON

This memorandum is prepared by the ]oint !nitiative against Cender Discrimination by the Nalaysia Airline
System (NAS), the national carrier of Nalaysia.
This initiative is led by:
Nalaysia Airline System Employees Union (NASEU)
and supported by:
All Women's Action Society (AWAN)
Women's Development Collective (WDC)
Women's Aid Organisation (WAO)
Nalaysian Trades Unions Congress (NTUC) Women's Committee
National Council of Women's Organisations (NCWO)
Women's Centre for Change (WCC)
Sisters in !slam (S!S)
The ]oint !nitiative strongly disagrees with the discriminatory practices of NAS. We believe that NAS has
discriminated against female cabin crew on the basis of gender and denied them of their right to work in a
nondiscriminatory and stressfree environment. Bearing in mind women workers make up 60% (2300) of the
NAS cabin crew, it is their inalienable right to fair and equal treatment. This memorandum seeks avenues to
end genderbased discriminatory practices and to recognise women workers' right to equality and justice.
!SSUES RA!SED ACA!NST D!SCR!N!NATORY PRACT!CES
The unfair and unequal treatment of the female cabin crew has a direct impact on women's access to equal
opportunities. The differences in treatment are considerable and they are as follows:
1. RET!RENENT ACE
Existing Employment Conditions
There exists gender biasness in the retirement age, whereby female cabin crew take early retirement at 40
years of age or 4S years for female supervisors, whilst all male cabin crew retire at SS years of age.
Upon early retirement, a female cabin crew receives a "special gratuity at the rate of RN800 per year for
every completed year of service with the Company".
Discriminatory Practices
i. The existing employment conditions contravene Article 8|2] of the Federal Constitution, which clearly states
that "there shall be no discrimination on the grounds only of religion, race, descent, place of birth or gender".
This guarantees the right of women and men to equal pay for equal work or work of equal value.

23
The different ages of retirement for NAS female and male cabin crew violate the Federal Constitution.
ii. The retirement age for female cabin crew from other international airlines puts to shame the employment
policies of NAS. Their retirement age are as indicated below:
Air !ndia 60 years
Thai Airways !nternational 60 years
Cathay Pacific 60 years
All Nippon Airways 6S years
Lufthansa 60 years
Air Asia SS years
iii. !t is also known that double standards are practiced by the management of NAS. For example, expatriate
female cabin crew, employed by NAS, are allowed to retire at the age of 60 or 6S, in full compliance with
their country's employment law. Yet, when it comes to its own Nalaysian staff, female cabin crew are forced
to retire early.
iv. Nalaysia is also committed to uphold respect and equality for women being a signatory to the UN
Convention for the Elimination of All Forms of Discrimination against Women (CEDAW). Under Article 11 it
states that:
1. State Parties shall take all appropriate measures to eliminate discrimination against women in the field of
employment in order to ensure, on a basis of equality of men and women, the same rights, in particular:
a) The right to work as an inalienable right of all human beings:
e) The right to social security, particularly in cases of retirement, unemployment, sickness, invalidity and old
age and other incapacity to work, as well as the right to paid leave."
This clearly upholds women's right to the same employment opportunities.
The gratuity offered to female cabin crew upon their early retirement is meagre and shows a total disrespect
towards the years of contribution that they have made towards building the good image of NAS. Therefore,
this gratuity policy becomes irrelevant if NAS increases the retirement age of female cabin crew to SS years of
age.
For example, upon early retirement, a female cabin crew will only receive RN16,000 (This is calculated on the
following formula: RN800 x 20 years of service) as a token of appreciation for her 20 years of dedication to
NAS. This is contrasted with RN414,000 (for 1S extra years of service, this is calculated on the following
formula: (RN2,300 salary per month x 12 months x extra 1S years of service) which she will lose due to her
early retirement. !t must be noted that this special gratuity is also subjected to taxation. On the other hand,
all male cabin crew are allowed to continue to work till they are SS years of age, with full pay and benefits.
!t also makes more economic sense to maintain experienced and welltrained female cabin crew than to
spend millions of ringgit on advertisement, recruitment and training for newer and less experienced workers.
2. NATERN!TY LEAvE
The Collective Agreement between the management of NAS and NASEU states that "a married female cabin
crew with five or more years of service . shall be granted leave without pay from the date she is declared
medically unfit to fly by a medical practitioner. The leave without pay shall commence not later than the end
of her second month of pregnancy. She shall not be entitled to medical leave and compassionate leave during
the period she is granted leave without pay."
i. !t must be stressed that income generated by women is vital for the survival of the family. The denial of
seven months' pay in the course of a woman's pregnancy is a violation of worker's right and it does not
accord respect and recognition to women's contribution towards the growth and wellbeing of the company.

24
This further perpetuates the stereotype roles that women's contribution is considered secondary to the
workforce of NAS.
!iFemale cabin crew should not be penalised based on their reproductive function, i.e. to be pregnant and to
have children. Such a maternity policy falls short of ensuring an equitable coverage for women and infringes
on their effective right to work.
Article 11 of CEDAW guarantees that equitable maternity benefit as an inalienable right to all human beings.
!t states the following:
1(f). the right to protection of health and to safety in working conditions, including the safeguarding of the
function of reproduction,
2. !n order to prevent discrimination against women on the grounds of marriage or maternity and to ensure
their effective right to work, State Parties shall take appropriate measures:
(a.) To prohibit, subject to the imposition of sanctions, dismissed on the grounds of pregnancy or of maternity
leave and discrimination in dismissals on the basis of marital status,
(b.) To introduce maternity leave with pay or with comparable social benefits without loss of former
employment, seniority or social allowance.
!n any Collective Agreement, the terms and conditions should leave workers in a better condition as
compared with the Employment Act, 13SS. This means that a worker is guaranteed of all benefits attached to
maternity, including her entitlement to full pay during pregnancy.
Unfortunately the Collective Agreement between NAS and NASEU provides for employment conditions that
are below the acceptable standards as set by the Employment Act, 13SS.
3. TWO SURv!v!NC CH!LDREN
A female cabin crew is only entitled to maternity leave benefits "for not more than two surviving children. !n
the event that she becomes pregnant after having two surviving children, she shall resign from the Company,
failing which the Company reserves the right to terminate her services."
i. Limiting female cabin crew to two surviving children indicates a noncompliance to Section 37 (c) of the
Employment Act of 13SS (Act 26S), which states that it is only when a woman has five or more surviving
children that she will not be entitled to any maternity allowance.
!i The female cabin crew should not be terminated on the basis of having a third child. This policy coerces
women to fit into a particular pattern of reproduction. This infringes on women's right to choose and to make
their own decision freely and responsibly in terms of the number, spacing and timing of their children.

OUR DENANDS
]oint !nitiative Croup against Cender Bias by the Nalaysia Airline System demands that the Nanagement of
the Nalaysia Airlines System revise the employment conditions for female cabin crew with immediate effect.
The immediate revisions required are as follows:
1. RET!RENENT ACE
To increase the retirement age from 40 years of age at present to SS years of age as currently practiced for
men in similar job position.
2. NATERN!TY LEAvE
To be entitled to full maternity benefits and this should include full pay, medical leave and compassionate
leave during the pregnancy period until confinement.

23
3. TWO SURv!v!NC CH!LDREN
To comply with Section 37 (c) of the Employment Act of 13SS (Act 26S) which guarantees a woman the right
to full pay and benefits for up to S surviving children.

Signed by:
Nalaysia Airline System Employees Union (NASEU)
All Women's Action Society (AWAN)
Women's Development Collective (WDC)
Women's Aid Organisation (WAO)
Nalaysian Trades Unions Congress (NTUC) Women's Committee
National Council of Women's Organisations (NCWO)
Women's Centre for Change (WCC)
Sisters in !slam (S!S)


26
Appendix 2
Letter to the Editor
Nalaysian Airlines Discriminatory
Retirement Policy
4 ]uly 2003
Women's Aid Organisation (WAO) refers to the comment made by Dr. Nohd Don Abdullah, senior general
manager (corporate services) of NAS, with regards to the retirement age for air stewardesses ("NAS: We
have reason to hire foreigners", The Star, 30 ]une 2003, Nation 13). Dr. Nohd Don Abdullah stated that NAS
had not looked into the retirement age of 40 years (and another five extra year for those in senior positions)
because "most women would be expected to be married and have children by then".
We believe that Dr. Nohd Don Abdullah and the senior management of NAS would have to find a better
justification than that to continue to enforce such early retirement onto their female flight attendants. This
discrimination is even more pointed when compared to their male counterparts, where male flight attendants
are given the option of retiring at the age of SS.
Dr. Nohd Don Abdullahs' statement is in total contradiction to our Covernment's efforts that
encourages Nalaysian women to join the workforce and have a retirement age of S0 for women
government officials and civil servants. Not only that, the statement is fraught with sexism that
places the responsibility of nurturing children only on the shoulders of women. Such
understanding harkens to a dinasour era in today's day and age where everyone should
recognise that it is the duty of BOTH men and women to care for their children. !t is ironic that
recognising the multiple burden of women, NAS has not chosen to provide adequate support for
their employees but instead chose to wash their hands off the matter by disqualifying their
abilities.
Hiding behind the notion of freedom of contract cannot absolve this gender discriminatory attitude. The
substantive inequality that NAS' principle of employment provides for should really be seriously looked into by
the government to check for violation of Article 8(2) of our Federal Constitution, and of the Convention of the
Elimination of All Forms of Discrimination Against Women (CEDAW) that Nalaysia has ratified to in 133S.
!n addition, there are millions of women in the workforce who are married and above the age of 40 with
children, who have contributed and are continuing to contribute significantly to the Nalaysian society. Naming
a few are Datuk Rafidah Aziz, Ninister for Foreign Trade, Datuk Sharizat Abdul ]alil, Ninister for Women and
Family Development, and Datuk Dr. Ng Yen Yen, Deputy Finance Ninister. Does this mean then that
according to Dr. Nohd Don Abdullah, they should retire because of their age and marital status?
!s the senior management of NAS in effect saying that women (who might be married by age 40) are not
capable of handling a career and a household at the same time should they choose to? !f not, what is the real
reason for the age limit on retirement for air stewardesses? !s it because that by the age of 40, these air
stewardesses (women) are not as attractive as they used to be? !f that is the real reason, then this adds
another layer of discrimination to the already sexist and ageist statement. NAS should start to value their
employees beyond perceived gender stereotypes and instead take a REAL look at these women who are
vibrant, intelligent and attractive, and who posses an added advantage experience. !f not, and if such
ancient principles are continued to be enforced, NAS might find itself in the precarious position of losing the
business of all successful working, career women. Where would it find itself then?
Nah XianZhen, !ntern
]aclyn Kee, Communications Officer

27
Appendix 3

MALAYSIAN AIRLINES SYSTEM BHD v. MALAYSIAN AIRLINES SYSTEM
EMPLOYEES UNION PENINSULAR MALAYSIA
INDUSTRIAL COURT. 1OHOR
AWARD NO. 400 OF 2005 [CASE NO: 1/3-16/2004]
YUSSOF AHMAD ; EMPLOYER's PANEL: AHMAD SHARIN MOHD NOR ;
EMPLOYEE's PANEL: 1AMALUDIN KASIM
26 FEBRUARY 2005
AWARD
(NO. 400 OF 2005)
This is a trade dispute reIerred to the Court by the Honourable Minister oI the Human Resources
under s. 26(2) oI the Industrial Relations Act 1967 ('the Act'). It is in respects oI the demotion oI one
Ungku Yacob Ungku Suleiman ('the workman'), a member oI the Malaysian Airlines System
Employees Union, Peninsular Malaysia ('the union') by the Malaysian Airlines System Berhad ('the
company'). The union is unhappy with the decision oI the company to demote the workman Irom the
position oI customer services oIIicer, a Grade C position to the lower position oI customer services
agent, a Grade B position.
The Iacts are not in dispute. The workman had been guilty oI two charges oI 'blocking seats' without
authority by a competent Board oI Inquiry oI the company. The exact charge read as Iollows:
That you, as a Customer Services OIIicer oI the Company, on 21 May 2001, at about 0843 hours, at
set address 003EA2 Johor Bharu Airport Terminal Building, had blocked seat numbered 025A, 025B
and 025C Ior Ilight MH2618/ 21 May 2001 JHB/BKI by using your sign in/check agent code
'HAPD' assigned to you, without authority Irom the Company and in contravention oI the Customer
Services Department notice No. 32 dated 19 May 2000 titled 'Seat Blocking Ior Protection Against
Overbooking'. This was done in spite oI a previous warning letter dated 13 April 2000 reI JBZ 011
SM1 issued to you Ior a similar misconduct.
You have thereby committed an act oI misconduct inconsistent with the IulIilment oI your terms and
conditions oI service with the Company by virtue oI Clause 15, Para 15.10, Appendix A oI the Acts
oI Misconduct oI the MAS Disciplinary Procedure and such act oI misconduct attracts maior
punishment.
The eIIect oI the workman's action was that the seats that were blocked by the workman (without
authority) were not available to be sold by the company. This would then allow the company's staII
at the airport to release the seats at the last minute to the waiting passengers and to upgrade economy
class passengers to business class. It was suspected that the staII at the airport could be paid by those
passengers involved to get the seats or to be upgraded. The company has previously warned the
workman beIore Ior committing the same misconduct. The punishment imposed on the workman
was that he was demoted to a lower grade but he did not suIIer a salary reduction. This is not,
however, a demotion Irom an executive position to clerical position. The position oI oIIicer in the
company did not mean an executive position.

28
At the hearing the workman admitted that he had committed the misconduct but would like to give
the reasons why he did it and also he considered the punishment was harsh. In his evidence he
explained that he had a good reason Ior doing what he did. His reason was that the company
computer booking system was Iaulty in that it showed seats were available Ior sale when actually
there was not. These resulted in overbooking and caused problem when some passengers who had
conIirmed booking cannot be accommodated as there was in Iact no seats available in the plane. The
court was not satisIied on the balance oI probability with the workman's explanation. However, it
was satisIied that what the workman did was in breach oI a speciIic instruction not to do this. It is not
Ior the workman to use his own discretion to go against the company's instruction.
In respect oI the workman's contention that the punishment was harsh in the circumstances the
company's evidence was that another employee committing similar misconduct received the same
punishment. Learned counsel cited to the Court BR Ghaiye on Misconduct In Emplovment. The
learned author wrote 'the right to control employees is a distinguished Ieature oI the contract oI
employment. The right to control implies the right to ask the servants what to work (within hours oI
service) or what not to work, and to do it. When the employee does certain act which is contrary to
his position oI a subordinate, then he is said to be guilty oI insubordination'. This is what the
workman did. He was warned not to block seats and he did iust that. It does not matter that he thinks
he has good reason Ior doing it. In any event, the court is not satisIied the reason he gave was a good
reason. The court is not satisIied by doing what did he prevented overbooking.
AIter hearing the evidence and the submission, the court is satisIied that it was proper Ior the
company in the circumstances to have demoted the workman to a lower grade without loss oI salary.
We even consider that the punishment in the circumstances was rather lenient. The court thereIore
dismissed the workman's prayer Ior reinstatement to his Iormer position.
* * * * * *
Legislation referred to:
Industrial Relations Act 1967, s. 26(2)
Other source(s) referred to:
BR Ghaiye, Misconduct In Emplovment
For the companv - T Thavalingam, M/s Zaid Ibrahim & Co
For the union - Mustafar Maarof (J Kanagaratnam), Malavsian Airlines Svstem Emplovees Union.
Peninsular Malavsia


29
Appendix 4
PART VIII - EMPLOYMENT OF WOMEN
34. Prohibition of night work
(1) Except in accordance with regulations made under this Act or any
exemption granted under the proviso to this subsection no employer
shall require any female employee to work in any industrial or
agricultural undertaking between the hours of ten o'clock in the
evening and five o'clock in the morning nor commence work for the
day without having had a period of eleven consecutive hours free from
such work:
Provided that the Director General may, on application made to him in
any particular case, exempt in writing any female employee or class of
female employees from any restriction in this subsection, subject to
any conditions he may impose.
(2) Any person --
O (a) who is affected by any decision made or condition imposed
under the proviso to subsection (1); and
O (b) who is dissatisfied with such decision or condition,
may within thirty days of such decision or condition being
communicated to him appeal in writing therefrom to the Minister.

30
(3) In deciding any appeal made to him under subsection (2), the
Minister may make such decision or order thereon, including the
alteration or removal of any condition imposed or the imposition of any
further condition, as appears just and such decision or order shall be
final.
35. Prohibition of underground work
No female employee shall be employed in any underground working.
36. Prohibition of employment by Minister
Notwithstanding the provisions of this Part the Minister may by order
prohibit or permit the employment of female employees in such
circumstances or under such conditions as may be described in such
order.

Employment Act 13SS (ACT 2S6) S Regulations, Laws of Nalaysia.
Publisher: !nternational Law Book Services

International Labour Organization
NATLEX database


31
Appendix S

!llustration 1.

!shikawa Nodel and competency formula drawn by Nr. Helmi Nokhtar. The !shikawa model
is a guidance that is use in NAS to identify the environment and effect and the bones of the
fish are the elements that to measure the cause and effect. Another diagram in this picture
is the formula to measure the competency and how to measure the men power needed in a
period of time. T is the time, R is the raw that are needed, P is the package.


32
Appendix 6

Our group members with Nr. Abdul Rashid Sharif after the end of 3 hours interview and
discussion session. From left, Atikah, Afiq Aqwa, Nr Abdul Rashid Sharif, Nuhd Nazmi, and
Nur Fatin.

From left, Atikah, Afiq Aqwa, Nr Abdul Rashid Sharif, Nr. Helmi Nokhtar, and Nur Fatin.

33

Our visit in NAS's Boeing 747 together with a technician. This aircraft is under Ccheck
maintenance at Hangar 4.

NAS own Airbus A330. This aircraft is under Ccheck maintenance at Hangar 4.

34
References

N. Sadiq Sohail, (2002), Nalaysia Airlines (NAS) Facing Challenges in the New
Nillennium", Case Study Related to Business, vol 1.

Steven H. Appelbaum and Brenda N. Fewster (2007), Contemporary Recruitment and
Selection and Diversity and Equal Opportunity Practices", the ]ournal of Clobal Aviation
Human Resource Nanagement, volume 21 Number 7 2002.

Women's Aid Organisation, (2000),memorandum ongender bias practices by the
malaysia airline system", News, Women's Aid Organisation. 2000.

Laws of Nalaysia. Employment Act 13SS (Act 26S) S Regulations. Part v!!!, Employment of
Women. !nternational Law Book Services. Nalaysia. 2002.

!nterviews:
%Nr. Abdul Rashid Sharif - Nanager Staff Affairs and Human Resources. Engineering and
Naintenance division personal communlcaLlon 24 Narch 2011)

%Nr. Nuhammad Hilmi Nokhtar - Human Resource Controller. Engineering and
Naintenance division personal communlcaLlon 24 Narch 2011)

%Nr. Naulan Bardai - Lecturer, UniKL N!AT", personal communlcaLlon 23 Narch 2011, 4 April
2011)

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