HRM at American Airlines

1470 Words6 Pages
Case Introduction

This case examines the Human Resource Management system at American Airlines and its role in the airline's past and continued success. The case takes us through a time line from 1980 to 1992 of the company; of how the growth of the company was followed by changes in the strategy, changes in the HR policies at different time and finally their effect and impact on the employees and the company as whole.


1. 1978: Deregulations of the airline industry.

2. 1980: AA's growth plans called for ore planes, new routes, increased membership in its AAdvantage frequent flier program, and an enlarged installed base of its SABRE reservation system.

3. 1981:The Presidents Conferences began.

4. 1983: Two Tier compensation
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Developmental perspective only in leadership area.

4. Pay plans were seniority based and individual based although employees were all salaried. Difference in earning levels for even employees doing similar work was HUGE.

5. Developing leaders from within, managers were to be seen as coaches and facilitators

6. Information and Communication technology was developed: new reservation system and baggage tracking system were one of the best and most expensive of their times

Horizontal fit

Its not really a perfect horizontal fit because where as the work processes and tasks have been kept repetitive, promotions are seniority based and training is specific (all of which mesh well on one end of the spectrum), leadership skills are being focused, information sharing IS and empowerment is being emphasized, compensation plans are being directed at long-term through lower base pays and profit sharing plus bonuses and above market benefits (which integrate well together but not with the former set of action plans) also, the compensation plan is being tried to implement in isolation but it's the ripple effects on the system that are causing problems

Vertical fit

The vertical fit is again missing. Whereas the HRM practices of recruiting, promoting, developing for leadership and compensation (of low base pays) and most importantly the newly inculcated CULTURE of information sharing and focusing on emergent strategies favor differentiation strategy, the specific training
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