Jet Airways is a Mumbai based Indian airlines which was founded on April 01st, 1992 and commenced its operations from May 05th, 1993 (Jet Airways, 2014). It is a premier international airline of India, which provides one of the finest experiences across the skies. The company has a high standard of service, efficient operations and has its focus on the innovations, which has not only made it reliable but also amongst the favorite domestic and international airline (Jet Airways, 2017). The company is famous not only in India, but across the world, owing to its global presence and multinational company status.
As on March 31st, 2016, the company had a staff of 14,905 as permanent employees. This high number of staff necessitates that the company follows proper human resource policies (Jet Airways, 2016). Due to the company working internationally, it has to provide cross cultural training for creating cultural awareness, particularly for Japan. Moreover, steps have to be taken by the company for preparing and training its expatriates for the new overseas assignments for Japan and Germany. This report highlights these steps in details. The report would also carry out a discussion over the reward and compensation systems adopted by multinational companies like Jet Airways.
Cross cultural training is an approach used to increase the knowledge, as well as, the skills of the people, so as to adjust to the new culture (Rees, 2013). Culture is the beliefs and the values which a person has. It acts as the base for the perception of people of a particular nation, along with the way in which they act out, their expectation and the assumptions made by them. When interacting in an international environment, the differences in the nature, faith and tradition of the people have to be analyzed in a careful manner, so as to deal in hassle free and efficient manner (Peleckis, 2013).
By analyzing the differences in cultures and the dimensions of particular cultures, the incompatibilities between the people can be evaluated and this can be used to create cultural awareness. The cultural dimension analysis given by Hofstede provides assistance in this regard, since it can help in highlighting the variances between people of two cultures Hofstede, Hofstede and Minkov, 2010). Cultural awareness helps in setting the foundation for the communication and also has the ability of standing back from a person and being aware about such person’s perceptions, beliefs and values.
Having its operations across the globe, Jet Airways has its operations and interconnectivity with different nations like US, UK, Japan, China, Australia, and the like. Each of these nations has different cultural backgrounds as compared to the Indian based Jet Airways. The culture of each of these nations, require steps from the company, to honor the traditions and steer clear from creating an unlikely or stressful situation. Also, to deal with the customers and clients from such nations, the cultural awareness becomes all the more important (Evans, 2015).
The national culture of the different nations has an impact over the corporate culture, as well as, over the strategic decisions taken by the company. And for these purposes, the people are training about the cultural issues so as to avoid cultural shocks. Cultural shock is such an experience where the person feels disoriented due to the person being subjected to an unfamiliar way of life, set of attitude, or unfamiliar culture. Culture shock is also the result of stress owing to the anxiety and uncertainty about the behavior which is culturally appropriate in the new environment. In order to deal with such cultural shocks, the cross culture trainings become more prominent (McInnes, 2012). This can be further explained with the help of taking Japan as an example to highlight the sensitivity issues.
There is a huge difference in the culture of United States and Japan. The people of Japan are very formal and on the other hand, the people of United States are not very formal. For Japan, the emphasis is given to the hierarchies and for the latter, instead of hierarchy, the emphasis is on equality. The manner of greeting people, even in the corporate culture, is quite diversified. For instance, in the cultural environment of US, hands are firmly shaken and for Japan, the bowing etiquettes are followed (Japan Today, 2014). So, when the people belonging to Japan are dealt with by Jet Airways staff, hands on approach could result in cultural shock. Hence, the staff of Jet Airways is trained to be neutral towards such clients and adopt a technique which is acceptable by people of both US and Japan.
In order to train the staff for the overseas assignments in Japan and USA, measures have to be adopted by Jet Airways to prepare the expatriates. They would have to be taught about the culture, language, customs and religion of Japan; the major attitudes and cultural values in the nation, along with the manner in which they affect the business culture: Confuciasism, collectivism, Kao, Wa and Omoiyari; interpretation and adaptation of the mindset of Japanese; the makers and breakers of relationship; the working practices in the business of the nation, including the company structure, hierarchy, decision making process and meetings; the etiquettes of business including the socializing for networking and business; the communication style of people in Japan, including expressing gratitude, personal space, silence and greetings; and the possible challenges for working in the nation and the manner of preventing and resolving them (Communicaid, 2017a).
In the similar manner, when it comes to the interactions of the expatriates of Jet Airways with the people of USA, the cultural factors have to be taken into account, which can be taught through cross cultural training. This would include being trained on the social and business etiquettes followed in the nation; the values and attitudes of the business culture of US, the management style, American multiculturalism, managing culture and country shock, historical, geographical and socio-economic overview of the nation; and the effects of the culture of US on personal interactions and society (Communicaid, 2017b). Based on the location be travelled, Jet Airways trains its staff, particularly its cabin crew, about such issues through cross cultural training programs. Though, there is a lack of dedicated programs for specific nations’ cross cultural training for the company, which is crucial in the globally sensitive environment. And so, the measures given above should be highlighted by the company, to deal with this shortfall.
In the global environment, the multinational companies have to balance the needs of the national of different categories of nations, for instance of host nation, of parent nation and of the third nations. Due to these reasons, different pay system is adopted by the multinational companies, for instance the local plus approach, the going rate approach and the balance sheet approach, depending upon the one which fits their global policies and the local laws. A range of complexities are involved with regards to the designing of the reward package for the expatriate employees (Pam, 2014). Some of the key components of international components have been summarized below.
The components of the MNC’s include basic salary, allowances and different benefits. The basic salary, in the domestic context denotes the cash compensation amount which is the benchmark for all the other compensation elements. This is the primary component for the expatriates’ package of allowance and directly relates to the base salary. This is the foundation block under the international compensation depending upon the TCN or the PCN. Differences take place as the basic salary is linked to the home nation of the TCN or the PCN, or with the international rates. The PNCs often get paid the costs for the hardship owing to the transfer (Pam, 2014).
The allowances form a key part of the overall compensation policy of the MNCs due to the different forms of allowances. The cost of living allowance involves the payment to the employee for compensating the differences in the expenditures between the foreign and the home nation. There are also housing allowances which show the amount which the employee is entitled to maintain the standard of living of the home nation. There are provisions for home leave allowances as well, along with education allowances, relocation allowances, and the like (Herod, 2009).
Another component in the international compensation programmes for expatriates includes benefits. The pension plans are often present difficulty and have to be dealt nation wise. The transportability of social security benefits, pension plans and medical coverage is also difficult to normalize. The tax deductions, enrolling expatriates in the host nation benefits programs, have to be taken into consideration. There are certain additional payments and services; for instance, the ones for lifestyle enhancement services in form of company car, fitness facilities, etc; the allowances and premiums in form of currency protection, emergency loan, etc (Stahl, Björkman and Morris, 2012).
There are different approaches to the international compensation, but the key ones are the going rate approach and the balance sheet approach. Under the going rate approach, also known as the market rate approach, the base salary for the international transfer is associated with the salary structure of the host nation. The information is usually obtained by the MNCs from the local compensation surveys and has to make a decision about the reference terms for benchmarking. Under this approach, in case the location is in a low pay nation, the MNC could supply the base pay with the additional payments and benefits (Peng, 2016).
Under the balance sheet approach, the objective is the keep the expatriate as a whole. In other words, the relativity to the PCN employees has to be maintained and proper compensations have to be given for the costs of an international assignment by maintaining the standards of the home nation, along with the financial inducement so as to portray the package as more attractive. Under this approach, the base salary of the TCNs and PCNs is linked to the salary structure of the home nation. The basic assumption of this is that the foreign assignee should not have to suffer a major loss owing to the transfer (Peng, 2016).
In the international scenarios, there are different compensation issues. Some of these include the cost of living allowances in the host nation, the repatriation allowances to the home nation, the tax burden placed on the employees who work in international locations, the labor regulations of both host and home nation, and formal and informal compensation practices which are unique to the host nation. It is crucial for the companies to manage the challenges associated with the international compensation plans. Jet Airways considers all these challenges and it is stated that the company has a competitive policy with regards to the compensation and benefits. The increments are given on periodic basis and the factors which are considered here include standard of living, inflationary trends and the other different factors, which are relevant to the company and the industry (Sinha, 2017).
The above discussion highlights the different aspects which have to be considered by multinational companies like Jet Airways, due to their operations being spread across the world. In the first segment of this discussion, the significance of understanding the culture of different nations, for carrying out the operations of the company were highlighted through the concept of cultural shock. Moreover, the theory given by Hofstede further highlighted the need for addressing the cultural differences. The examples of cultural difference in Japan and USA also helped in clarifying the steps which have to be taken by Jet Airways, which are currently absent, for carrying out new operations in these two nations. In the second part, the complexities related to the international compensation plans were discussed, where not only the techniques adopted to calculate the compensation packages was discussed, but the different components of the compensation package was also highlighted. For Jet Airways, it is crucial that it indulges in cross cultural training when it carries out new operations in different nations. It is also recommended for Jet Airways to adopt a clear technique for the international compensation packages, which is similar across all its locations.
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