Best Practices at Fedex Corporation

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An example of an organisation implementing a model you have covered of Strategy and HRM alignment

Since FedEx is an express transportation service organisation, its success hugely depends on its employee’s contribution. People-Service-Profit philosophy was developed and implemented by Frederick Smith, CEO of FedEx along with its founders. They believe that ‘When people are placed first, they will provide the highest possible service, and profits will follow’ which means taking care of its employees rather than focusing on profits will result in generating higher profits eventually.Based on FedEx’s Human resources philosophy’s and their business strategy, we will outline FedEx’s Best Practices Model.

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Employment Security

As the labour market is getting competitive, retaining staff can be challenging as well as hiring the best talented people. For this reason, employers offer programs and benefits to secure employees’ position. Two ways of how FedEx reassure employees to secure their job will be explained.

FedEx Alert Line allows you to report and any confidential activities of any known of suspected violation of law, code of conduct, or any company policies and unethical behaviour subject to local country laws and regulations . Employees are provided number of ways to report it through such as manager, HR department, and FedEx Alert Line. Navex system which is used by FedEx is designed to protect reporter’s identity and does not generate or maintain any connection information with IP addresses. Also, FedEx policy is contractually committed not to reveal a reporter’s identity for any possible retaliations for employees.

Employee retention is significant whilst employees’ loyalty to the company tends to low in a competitive market place. If employees are not satisfied with their job, they will walk away and find a new one. FedEx thinks it’s important to keep their employees happy and provide an environment that they want to stay. FedEx maintains good relationships with their employees. The employees who have quit their job, are always welcome to re-join FedEx if their new job did not live up to their expectation or if their situation has changed. This allowed FedEx to reach retention rate up to 88% in 2017 .

Targeted Selection

FedEx’s aim for recruitment is hiring people who are willing to take risks and have an entrepreneurial nature. The company conducts a systematic process for recruitment and selection. They recruit the most talented people in all countries they operate their businesses in and offer internship programs to help onboard and develop new talent. Giving the increasing number of applications, HR department receives applications through their automated online database system which is called Personnel Records Information System (PRISM). It has been used for many other companies for effectiveness.

FedEx offers number of various positions, such as administration, aviation maintenance, couriers, customer service, engineering and operations, financial sector roles etc. This means the applicants can apply for positions that match their particular skill-sets and will fit into a role they like.When the application is matched with the company’s job qualification recorded in PRISM system and eligible candidates were identified, those candidates take aptitude test which is basic mathematics, English, and reasoning. Candidates who showed their potential abilities in the interview take a fitness test and a background check.PRISM system enables HR department to expedite the screening process efficiently and reduces the processing time by almost 50%. It also gives more time for HR staff to work on the other tasks such as checking on the references and fulfill HR formalities.

Workplace Teams & decentralisation

Teamwork and the company culture play a crucial role when it comes to a company’s success. Employees provide their value through teamwork, collaboration and by generating diverse ideas.In FedEx’s case, employees are adding their value to the organisational goal through their own system which include Survey Feedback Action (SFA) and the Open Door policy.

Survey Feedback Action is an annual employee survey consisting of 32part questionnaire that measures employees’ satisfaction along with their opinions towards management’s leadership performance. Employee’s review their feedback with their manager to discuss the survey findings and identify problems within and outside their department. SFA has become a problem-solving tool as employees develop formal, written action plans for solving problems. It operates both horizontally and vertically throughout the organisation .

The Open Door policy is where employees can question or put forward information regarding corporation policy such as benefits, recruitment, promotions, and holidays or complaints. The questions and complaints are addressed to direct managers in the form of an open door and the management must respond to their issues within fourteen calendar days. Communicating with senior managers who are willing to listen with an open mind and respond promptly to employee inquires can reduce friction between company and employees. Thus, it improves employee satisfaction.

High pay contingent on organisational performance

FedEx has developed number of effective HR reward programs that creates a benchmark for many other companies. Due to their effective programs, employees’ productivity level and employees work satisfaction have increased. Therefore, FedEx acquired a positive reputation as an employee- friendly company along with the associated financial benefits (ICMR India, 2003).Three main employee aware programs are outlined below, these are the Bravo Zulu, Golden Falcon Reward and Humanitarian Reward FedEx-Recognition (2019). 

Bravo Zulu is named after U.S navy semaphore signal ‘Well Done’. Employees are rewarded for showing their exemplary performance and achievements by managers. The rewards include cash bonuses, theatre tickets, dinner gift vouchers and other gifts of similar value.When employees gain customer praise for providing exceptional service and receive a positive review, ten shares of Federal Express stock will be given to the employees under the name of the Golden Falcon Reward and employees have a congratulatory visit or phone call from a senior executive.The Humanitarian award is for employees who voluntarily help others and demonstrate positive behaviours in line with the company’s vision, which rise above the employee’s basic responsibility. It expresses FedEx’s belief of taking care of each other and demonstrates the team members remarkable loyalty and compassion.

By conducting these programs effectively in line with their business strategy, employees are likely to remain in the company for a long period of time. As a result, in FedEx, employment turnover rate is very low, a favourable 6%, compared to the industry standard of 20% (ICMR India, 2003).

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