Happy Sky Company: Aligning human resource functions with strategic objectives. Happy Sky Company is a company that produces anything from cutlery to toiletries for all South African Airlines. Although Happy Sky has been profitable over the decade of its

Happy Sky Company: Aligning human resource functions with strategic objectives. Happy Sky Company is a company that produces anything from cutlery to toiletries for all South African Airlines. Although Happy Sky has been profitable over the decade of its existence, its productivity has recently declined. In the past several years, their employees have displayed diminished innovativeness, a higher turnover and absenteeism, and an overall sluggish performance. Based on these trends, Paul (the founder of the company) calls a meeting of all the managers to discuss potential courses of action to correct the problems. After a lengthy meeting, they agree to hire a full-time HR manager to assume sole responsibility for the employees. Previously, the line manager had assumed basic responsibility for managing their employees. After careful consideration, Paul decides to hire Kgomotso Molotsi, in line with the company’s new employment equity policy, to assume the primary responsibilities of developing a systematic HRM function for Happy Sky. When Kgomotso arrives at Happy Sky, she meets with Paul to discuss the strategic objectives of the company. Paul indicates that the two primary objectives of Happy Sky are, firstly, to continue its growth strategy to respond to growing demands for its services, and, secondly, to enhance the innovative nature of the workforce, in order to ensure that it remains competitive and up to date with market changes. Paul gives Kgomotso the task of developing and HRM function that will tackle the absenteeism and turnover problems while helping Happy Sky attain its two primary goals. As a first step, Kgomotso begins by reviewing the HR practices used at Happy Sky. It becomes clear that the company relies primarily upon two practices to meet its employee needs. Firstly, it recruits at the local university just 10 kilometers away. If graduating students are not interested or are unsuitable candidates for a certain job, Happy Sky places advertisements in regional newspapers to seek job candidates with the relevant skills who are willing to relocate. Although this hiring process is not comprehensive, Happy Sky has not experienced much difficulty in recruiting employees, thanks to the growth opportunities it offers. Secondly, Happy Sky has relied upon an established compensation system that applies to all employees throughout the company. Employees are paid salaries, the compensation level being based on the going market rate for similar positions. Annual salary increases are calculated according to inflation and individual performance. The average salary increase is between 3 and 7 percent of an employee’s basic salary. Kgomotso realises that, besides these recruitment and compensation practices, no other HR practices are consistently applied at Happy Sky. Instead, managers use different methods of managing the employees in their respective departments. For example, no uniform performance appraisal standards are applied throughout the organisation. Criteria used to evaluate employees range from counting days absent to measuring innovation and creativity. Similarly, each manager uses somewhat different tactics for training employees. Some units assign new employees to shadow more experienced employees, who serve as the new employees; mentors. Other managers do not offer any training and assume that the employees come to the job with all the knowledge they need to succeed. In the light of the organisation’s goals of growth and innovation, Kgomotso realises that significant changes need to be made at Happy Sky. The productivity of employees and the success of the company depend on effectively realigning the HR function.