Bombardier Aerospace

Bombardier Aerospace is a division of Bombardier Inc. and is regarded as one of the third largest aircraft company in the world in terms of yearly delivery of commercial airplanes overall, and the fourth largest in terms of yearly delivery of regional jets. It is headquartered in Ville-Marie, Montreal, Quebec, Canada. Bombardier started its journey with the founder J. Armand Bombardier in 1942 to manufacture tracked vehicles for transportation on snow covered terrain and has earmarked itself as one of Canada’s oldest, most diversified and reputed companies.

By 2002, the company has grown revenues to $21. 6 billion with a net income $390. 9 million from 5 operating units including: Bombardier Transportation, Bombardier Aerospace, Bombardier Recreation Products, Bombardier Capital and Bombardier International. Bombardier Aerospace, a SBU of Bombardier Inc, had over 33, 000 employees and established itself as an internationally integrated organization with full design and production operations in Canada, United States and UK. Such operations made Bombardier Aerospace as the third largest civil airframe manufacturer and a leader in region airliners, business jets and amphibious aircraft.

Its high-performance aircraft and services set the standard of excellence in several markets, including: Business Aircraft | Commercial Aircraft | Amphibious Aircraft | Jet Travel Solutions | Specialized Aircraft Solutions | Aircraft Services And Training | During 1999, after several months of negotiation and planning process Bombardier Aerospace was able to build a unique relationship with the Canadian Government, who after the Cold War started at looking how military could operate under tighter fiscal restraints.

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In a joint initiative under NATO, Bombardier Aerospace agreed to service and own training aircraft and in turn leased these aircraft to the Canadian military for training purposes. This arrangement was named as NATO Flight Training in Canada (NFTC) which aimed at managing Ground Based Flight Training School and Simulator Training. In any given time , approximately 75 students from Canada and other NATO countries were enrolled in the NFTC training program. Alex Lachance hails with 20 years of flying experience in the Canadian military and after an illustrious experience with Canadian military has also occupied several other positions.

During 2002, Alex joined Bombardier Aerospace as the manager of ground-based training operations for Nato Flight Training in Canada NFTC and almost at some point in time Ted Baker who had successfully completed Bombardier’s interview process few months before joined as an instructors in Nato Flight Training in Canada (NFTC). The hiring process at bombardier was quite a challenging once since achieving the two crucial objectives of finding an incumbent for the vacant position who is equally equipped in terms of the technical expertise required along with their fit of the candidate with the Bombardier culture of was not an easy task.

Also, it was seen that whoever bargained during the interview process, on the whole achieved a better remuneration package with the ‘per diem allowance’ paid only to those who negotiate for a moving allowance of this nature. When Ted, a new hire came to know about this, he was utterly dismayed and disappointed on the impartial and unfair compensation system of Bombardier’s. Ted raised this issue to the newly appointed manager, Alex who was utterly surprised and after being communicated took the issue to the HR.

Once he obtained a thorough idea and comprehended that the per diem allowance has been only paid to those who have bargained. He thought of raising the issue to the corporate head office. The dilemma over which Ted is now fixated is what will the after effect of implementing such a policy? Will it imply Bombardier changing its policy for all its operations? Will it mean that it will increase cost to the company? These were several questions which were pondering in Alex’s mind. Also the fact being that he has just joined the company not even few months ago he was quite perplexed and confounded regarding what step to take.   Complications Critical challenges which were witnessed in the case ‘Bombardier Aerospace’ are depicted below:

•  The interview process in the overall hiring procedure remained to be quite challenging since achieving the two crucial objectives of finding an incumbent for the vacant position who is equally equipped in terms of the technical expertise required along with their fit of the candidate with the Bombardier culture of ‘ entrepreneurial high achievement’ was not an easy job.
•  Bombardier’s current relocation policy did not seem to be fair and transparent to all. It meant candidates who better bargain in their interview process would benefit most as only if someone raises concerns on moving incidentals and meals only those were offered the ‘per diem allowance’.
•  Discrepancy which existed amongst new hires in terms of compensation was heard by some of the new appointed instructors and potential recruits expressed dismay and consternation which certainly affected employee morale to work for this company and loss resulted in lack of enthusiasm about their job.

Another associated challenge was if these newly appointed instructors those who have not been provided with the benefit of the ‘per diem allowance’ for moving incidentals and meals together lodge an objection and appeal to the Labor Relations Board, it will cause not only monetary loss for ‘Bombardier Aerospace’ via compensations but also image loss which would have trickle affect in potential future instructors as they will be reluctant to become part of Bombardier Aerospace which is unfair and unjust with their employees.

Question

Q #1. Evaluate Ted Baker’s reaction to NFTC’s relocation policy and his decision to approach Alex Lachance? | Ted Baker had successfully completed Bombardier’s interview process during summer of 2002 and was offer an appointment in Nato Flight Training in Canada (NFTC) to commence work few months later. During this same time nearly about other 20 instructors were also appointed. About few weeks after, Alex Lachance joined Bombardier Aerospace as the manager of ground-based training operations for Nato Flight Training in Canada NFTC.

After Alex joined, Ted approached him and communicated some of his major concerns about which he was extremely dismal. He had overheard the conversations of other newly employed instructors regarding their relocation benefits and compensation and most importantly the ‘per diem allowance’ provided to cover their moving incidentals and meals. Ted was extremely disappointed to see the relocation policy of Bombardier which to him reflected an unfair and inequitable system as he felt that it was not fair for some employees to receive a per diem allowance and while others did not.

Also, when Alex came to know about it, he was shocked and surprised to learn about such compensation policy and he too felt it was not an evenhanded and a just policy to handle recruits, however he did not mention anything to Ted upfront. Also, one important thing was Ted had negotiated compensation for moving allowances, a paid trip to Moose Jaw and interim lodging and this additional compensation was tied up to the typical three- year loan agreement and similarly other new recruits who were paid all these what Ted received and in addition also the per diem allowance also was tied up with the same experience.

Hence, Ted had a very disapproving reaction about the NFTC’s relocation policy.

Q # 2 In your position as Alex Lachance would you attempts to change the relocation policy? Please be specific? | If I was given the position and responsibilities of Alex Lachance, I would have adopted an absolutely fair and impartial relocation policy. Hence, for this if required changing the policy, I would have certainly opted for that taking approval from all those concerned. The case presents the scenario of a recruit ‘Ted Baker’ who felt his package was discriminated when compared to some of the recruits who were offered appointment during the same time.

If I was in the position of Alex Lachance, then after hearing the rationale from the human resource department which purely stated that these additional benefits were paid to those who displayed better bargaining power during the interview. Based on the potential incumbent’s request and negotiation skills during the hiring process they were entitled for that benefit. Hence, quite often new employees those who did not ask for the per diem allowance, they were not paid. Thus, overall it reflected an unfair and non-uniform relocation policy:

I would have taken the below specific steps to resolve this matter: * Step 1: I would have taken this issue to the Corporate Head office, Human Resource department in Montreal before circulating a new uniform hiring and compensation policy. This was to understand the implication of such policy at a group level as Bombardier had so many employees all over the world. * Step 2: Also, I would have given recommendation to the Corporate Head Office to take any of the two alternatives as the way forward I.

To re-look at the entire human resource policy and most importantly the cost attached of having to be paid all the new employees who are re-locating the ‘per diem allowance. ’ If that was feasible in terms of cost to the company then we should have proceeded with that. II. Secondly, if it came to the situation that such uniform policy will tremendously increase the cost to the company, in such an instance my recommendation would have been not to provide ‘per diem allowance’ to any of the employees as most importantly it was not fair.

Also, if some employees chose to go and appeal to the Labor Relations Board for such unfair treatment, this might cause law suit charges to be paid and also loss of reputation and image as an employer and company.

Q # 3 How would you respond to Ted Baker? | My response to Ted Baker would be a very candid, direct and impartial one which I would have provided him after thoroughly understanding and evaluating the given situation. First of all, I would have thanked Ted Baker for being upfront and telling me about the exact issue what he heard from other new instructors’ without creating rumor about the company.

And would also point out that his behavior and attitude was a reflection of him already being part of the company. As a second step I will provide him re-assurance that after critical scrutiny it has been observed that there has been some discrepancy in the past about the offer of ‘per diem allowance’. Hence, with my proposed recommendation of bringing uniformity in the relocation policy it has been notified to the Corporate Head office, Human Resource department in Montreal.

Either their decision is to continue with this benefit or not, what I will ensure Ted is the end outcome would be something which is fair, impartial and transparent to all the employees. This is how I would try to regain the confidence of Ted Baker on the company and try to bring his enthusiasm back for his job and Bombardier. Also this might reduce the dismay and consternation of Ted and allow him to recuperate his expectation and enthusiasm about working at Bombardier.

Q # 4 what’s your learning out of this case? |

HR Compensation and benefits policy affect the productivity and happiness of employees, as well as the ability of an organization to effectively realize its objectives. It is to an organization’s advantage to ensure that the employees are creatively as well as equitably compensated and knowledgeable of their benefits. Key learning’s which any organization and most importantly any head of the HR department can educe are illustrated below: * Ensure equity and fairness in the remuneration and compensation policy and system as globally it has been identified as a key component in creating a successful compensation system.

The equity can be ensured in the following three unique ways: * Provide workplace equity which implies giving perception that all employees in an organization are being treated fairly * Establish a culture of internal pay equity where all employees in an organization can perceive that they are being rewarded fairly according to the relative value of their jobs within an organization * Offer pay by omparing external pay conditions to ensure external equity exists when employees in an organization perceive that they are being rewarded fairly in relation to those who perform similar jobs in other organizations * Perceived inequity or unfairness, either external or internal, can result in low morale and loss of organizational effectiveness. For example, if employees feel they are being compensated unfairly as was illustrated in the case of Ted Baker, it can have a negative and demoralizing impact.

Employees may restrict their efforts or leave the organization, damaging the organization’s overall performance and also cause loss of goodwill. The key learning’s from this case can also be linked to one of Abraham Lincoln’s famous quote which states “It is true that you may fool all the people some of the time, you can even fool some of the people all the time, but you can’t fool all the people all the time”. Also a related quote can be drawn to express the learning’s from the case “It’s better to lose in a cause that will someday win, than win in a cause that will some-day lose!

Implications

Every organization is powered by its people. Consequently, effective HR strategies are critical to ensure productivity and maximum success. HR professionals play an important role in terms of coming up with the right strategies to support organizational direction but must have the ability to think beyond tactics to identify the high-level areas of focus that will drive success.  Consider Strategic Vision HR leaders should review the company's current vision to determine ways in which HR activities can support that vision.

In concert with other organizational leaders, HR staff must consider whether the vision is applicable based on external and internal factors and whether changes in the marketplace may be suggesting a new vision. * Consider Demographics HR leaders should examine the demographics of the workforce to determine where gaps may exist between current skills and the need for skills and experience that may emerge in the future, in alignment with the organization's vision and strategies.

HR strategy should be focused on filling these gaps through strategic recruitment, retention and training efforts. Transfer of Knowledge Ensuring transfer of knowledge between department workers -- whether they are departing voluntarily or involuntarily, or due to retirement or other reasons – is necessary to ensure continuity and minimal impact on productivity and effectiveness.

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