RyanAir: An Investigation into Organisational Culture and Management Strategy

In this investigation, I will analyse the controversial strategies that contribute to RyanAir’s success, and how they affect the profitability, image and culture of the company.

I will discuss how Ryanair motivates its employees, and the relative success of each method they use. I will consider the compromise between employee satisfaction and performance, and how the organisation balances the two in the most efficient way possible.

I will also cover topics that relate to team management and organisation. In order to manage human teams, managers need to understand things such as what motivates people to work, how to organise an efficient working environment and how to divide responsibilities between team-members and keep track of who does what.

Motivation is defined by Luthans as “a process that starts with a physiological or psychological deficiency or need that activates behaviour or a drive that is aimed at a goal or incentive.”  Motivation most often plays a key factor in the performance of a company. Good motivation of employees will most likely lead to punctuality, good customer service and general high performance in their role within the company.

Ryanair has infamously struggled with staff motivation. A number of cost saving measures have resulted with complaints from staff on internet chat rooms such as Ryanair Don’t Care and many newspaper articles condemning the management practices of the low cost airline. Sophie Growcoot said she was “forced to pay £360 for her uniform, and £1,800 towards a safety course, and only received money for hours spent in the air.” She was therefore not paid for pre-flight briefings, or time spent on the ground between flights and during delays. She was only paid to work four days a week, but on a fifth day was required to be on standby, and expected to turn up for work at an hour’s notice if required. In addition, Ryanair do not allow employees to charge their mobile phones in company plug sockets to save on electricity costs. With all this in mind, it is no surprise that there is such a large staff turnover at Ryanair. Pilots, on average, only work for the airline for 4.8 years. The many high profile news stories condoning Ryanair’s Management has lead to RyanAir’s inclusion in the Siegel+Gale simplicity index rating for 2014 as one of the worst brands currently operating.

Douglas McGregor was a professor of Business Management at MIT. In 1960, he wrote the book ‘The Human Side of Enterprise’, in which he came up with the idea of Theory X and Theory Y. Theory X is essentially the belief that people have little or no motivation to perform well, and require detailed instructions, rewards and threats in order to motivate themselves. Theory Y states that given the appropriate working conditions, most employees will perform well. Theory X is very clearly displayed at Ryanair. For instance, the pilots are required to perform well for their own safety, as they are flying a very dangerous, complicated machine, and the wellbeing of hundreds of people is placed into their hands every day.

Taylorism is based on the ideas expressed in the book ‘The Principles of Scientific Management (1911)’ by Frederick Winslow Taylor. The book states that workers will try to do as little work as possible while still gaining the greatest outcome. Taylor comes to several conclusions, and suggests various different methods by which staff performance could be improved.

Ryanair, to some extent, adheres to this content theory of motivation with aspects such as productivity based payments, with the cabin crew receiving bonuses for sales made and additional payments  based on the number of hours flown. In 2011, it was also revealed that cabin crew were paid 50p every time they spotted someone attempting to take an oversized bag on the plane. Indeed, a significant proportion of salary for pilots and cabin crew comes from productivity based payments. During the 2013 fiscal year, productivity based payments accounted for approximately 46% of flight attendants’ pay and approximately 35% of pilots’ total compensation. This goes explicitly to indicate that Ryanair believes workers are almost solely financially motivated, thereby adhering to the principles of Taylorism. It is however, not always possible to implement performance based pay, as many aspects of the jobs of the cabin crew are not easily quantifiable, such as customer service or awareness of safety hazards.

Content theory, proposed by Abraham Maslow is based on the idea that human needs can be grouped into 5 categories:

  1. Physiological Needs (water, food, shelter)
  2. Safety Needs
  3. Social Needs (love and affection)
  4. Esteem Needs (to be appreciated and appreciate one’s self)
  5. Self-Actualisation Needs (to meet one’s full potential)

The idea put forward by Maslow is that we are constantly attempting to satisfy each of these groups of needs. We are therefore always motivated, as the final group of needs (self-actualisation) can never be truly fulfilled. Despite the credibility of content theory, the management structure of RyanAir displays limited evidence of adhering to Maslow’s principles, and staff are merely granted their physiological and safety needs. It would take a lot more research to decipher whether this is an example of poor management strategy, or a deliberate ignorance of a system that would not be economically viable for a low cost company such as RyanAir.

Despite the high staff turnover and many complaints by staff, people do still work for Ryanair. An extract from an interview from a study entitled ‘Motivation in Organizations’ by Xenia Pisneacova gives a few ideas of why people put up with the barbaric organisational culture of the firm. Pisneacova interviewed Mark Puglisi, 24, a cabin crew member at Ryan Air. He suggested that many young people are attracted to the job of being a flight attendant because of the opportunities to visit other countries and experience other cultures. As Mark put it, ‘My dream came true’. The large number of people that have the dream of a job where they can travel abroad puts Ryanair in a unique position, and explains how they can afford not to pay their staff as well as other companies do, yet still have sufficient number of people willing to work for them.

Furthermore, the value of normative commitment due to having social relationships with colleagues is clearly shown. In the interview, Puglisi says “It’s all young people so you have lots of fun at work!” This is supported by evidence showing the average age of a Ryanair pilot to be 35, nearly 10 years younger than the industry average of 44.8 (2012). If the co-workers of an employee become an integral part of their social life, they may feel less inclined to leave the company. This idea arguably supports Maslow’s content theory as it caters to the third group of needs; the social needs. It is not known whether Ryanair has deliberately hired younger people in the hope that the social side of the job will encourage them to stay working for the airline, or whether it was only younger people that contained sufficient levels of naivety to apply for such a company. I imagine it was the latter. 

Belbin’s theory tries to classify each team member’s role in order to create a clear picture of each individual’s responsibility. He defined a team role as a “tendency to behave, contribute and interrelate with others in a particular way”. Belbin tries to estimate which characteristics, personal traits and personal experiences would suit specific roles, as his model is based on the idea that each different role is more suited to people with different traits. He also defined characteristic weaknesses that accompany each team role, naming them “allowable” weaknesses. Behavioural weakness, on the other hand, are seen as areas to be aware of and potentially improve. For example, a member who can be considered as socially pro-active and short-tempered, would find it difficult to carry out a “Monitor Evaluator” role, because their patience wouldn’t be sufficient to sit down and carefully think through the team’s plans and analyse performance. They would be more suited to a social role, such as a team worker or co-ordinator, as these roles do not so much require patience as they do constant social engagement.

RyanAir has had its fair share of bad publicity, especially when it comes to the working conditions of their employees. They have, however, tried to remove this stigma in an attempt to improve its relations and public perceptions. For example, on the careers section of their website, they say the following: “We want a team that is quick-thinking, fast-acting and hard-working… You should work well with other people but be able to work on your own initiative too”. It is quite clear from their own writing that they have been trying to improve their external image to potential employees. They also make a big emphasis on teamwork and people interaction through phrases such as “we want a team” and “you should work well with other people”.

By looking at user reviews for Ryanair from people who have worked there, we can see a significantly different picture from the one RyanAir portrays. For example, on the popular job review site, Glassdoor, there are a number of people who cite teamwork and communication as problems. For instance, one user writes “Less war between crew for who’s selling more, invest more on improve TEAMWORK instead!” Despite the concerning lack of understanding for basic English syntax, they are referring to the in-flight bar, whereby cabin crew are paid on commission for each item they sell. From this alone, we can interpret that while Ryanair want people to work together, their own pay system is causing staff to work more for their own benefit rather than for the collective good of the company.

Another user writes “Ruthless and under trained managers. No access to Unions and serious consequences when challenging manager’s decisions”. This particular employee is noticeably outraged at RyanAir’s management structure and hints to managerial incompetence through lack of training. This hints at a dysfunctional recruitment policy. It may be the case that managers are selected based on their performance in a specific role, regardless of their competence in managing others. If RyanAir were to take a recruitment approach based on Belbin’s theory, perhaps they would see an improvement in productivity and less conflict, as each individual would be selected based on their suitability to the job. Managers could be picked on their social skills and critical thinking, which would come under the shaper or co-ordinator roles.

As Buchanan and Huczynski defined in their book Organisational Behaviour (2010), organisational culture refers to the “set of shared values, beliefs and norms which influence the way employees think, feel and act towards others inside and outside the organisation”. Schein’s Culture Theory (2004) is based off research conducted in the 1980s, and divides organisational culture into three levels.

Artefacts and behaviours represent and create a visible image for the company to the public. It describes the physical appearance of the organisation, in the form of employee behaviour (customer service), hierarchy structure and implementation of technology.

Values and beliefs describe the ideology of the business, in regard to attitudes towards strategy, reaction to issues and mechanics of dealing with crisis. They can be changed or influenced by a company’s owners, managers and employees, or even the society. Its purpose is mainly to control the mindset of employees, creating standards and guidelines for them to follow.

Assumptions are the preconscious, take-for-granted understandings held by individuals of the company. These usually refer to morality (treatment of employees/customers), profitability (cost reduction), innovativeness (new ways of managing, new services, new technology) and stability.

Cost-cutting seems to be the core belief of all budget airlines like Ryanair. While the success of the business is attributed to it, the culture has also caused repetitional and managerial issues. Ryanair’s management style can be described as a Top-Down model. In order to have better executions on cost reduction policies, rules have been strictly imposed from the management team to the employees. Pilots and flight attendants have little authority and autonomy while dealing with unexpected situations at work.

According to the BBC program, Panorama Report, even when a Ryanair flight full of passengers on board is delayed for several hours, it is company policy that no free drinks or food should be offered to passengers. In one instance, a passenger on a seriously delayed flight came to the cockpit to inform the captain about pressing demand for free drinks and food for children and the elderly. The captain refused him with no reason other than that disobeying the firm’s policy would cause him to lose his job. And this notion that flight crew lack authority and autonomy causes constant displeasure on board RyanAir flights. In a recent study, eight out of ten people said friendly, helpful, knowledgeable staff and a quick resolution of problems are very influential when deciding which companies to use, with 86 per cent claiming they would leave a brand that treated them poorly. Poor customer service scares away potential customers and will damage the profitability of the firm in long run.

By way of attempting to lower overheads, Ryanair is not only known for sacrificing their services qualities, but also using a essentially “exploitative” benefit and welfare system for its employees. Through forcing pilots to fly up to the very maximum of their legal hours, controlling working days and setting methods of wage payment based on flight hours, Ryanair manages to avoid extra cost which may fluctuate over time, resulting in enhanced predictability of expenses. Nevertheless, this has resulted in more and more internal complaints from the employee about the firm’s  methods of calculating salary, treatment and conditions during work. Former attendant Sophie Growcoot was employed by Ryanair via contractor. During work, She was told to join a 3-month training worth £1,800 which she had to pay for herself. She also claimed that she was only paid for on-board hours, and not meeting hours, waiting hours or time on ground. Ignoring benefits or welfare for employees and failure to reward them appropriately for their commitment and discretionary effort damages their loyalty to the company as well as their productivity. It is a significant contributor to not only a lack of stability, but also to poor customer services on the external level.

To conclude, it is apparent that Ryanair have very little regard for the wellbeing and satisfaction of their employees. They take a ruthless approach to management, ignoring the needs of their staff in order to maximise profit. While this seems unethical, it goes without saying that it has produced remarkably strong results, with revenues of over $7 billion in 2014. At the end of the day, the primary role of the owners is to please shareholders whilst keeping to international regulations, so it has to be said that Ryanair demonstrates a successful organisational culture and management strategy.

 

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