Human Resource Management - Best Practices at the FedEx Corporation


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Case Details:

Case Code : HROB034
Case Length : 15 Pages
Period : 1998 - 2002
Pub Date : 2003
Teaching Note :Not Available
Organization : FedEx Corporation
Industry : Logistics
Countries : USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Fedex's HR Practices

Since its inception, FedEx's management focused on providing a suitable work environment that encouraged employees to come up with innovative solutions. Employees responded positively to the faith reposed in them and displayed exemplary commitment towards their work. The extent of the commitment of the employees could be gauged from the fact that during the first couple of years, when the company was going through severe financial difficulties, the employees were prepared to sell their personal belongings and use their own credit cards to purchase fuel to deliver the packages to the customers. Even when the employees didn't receive their salary on time, they continued working with FedEx.

Smith believed that since FedEx was a service organization, its success depended heavily on its employees. Hence, in 1973, he developed and implemented FedEx's 'People-Service-Profit' (PSP) philosophy. According to this philosophy, if FedEx took proper care of its employees, they would provide efficient service to the customers, which would in turn benefit the company by generating more profits. This philosophy formed the basis of all management decisions taken at FedEx...

Growth Opportunities

FedEx believed in promoting people from within for higher management cadres. The SFA program helped management take decisions regarding promotions, though its utility was confined to evaluating the performance of the managerial cadre employees only. FedEx also provided opportunities to employees from the non-managerial cadres to move up to the managerial level. In order to encourage non-managerial cadre employees to move to the managerial level within the organization, FedEx devised a unique program known as 'Leadership Evaluation and Awareness Process' (LEAP).

This program was conceived in 1988, when FedEx observed that 10% of the non-managerial cadre employees who were given managerial level tasks for the first time quit the organization within 14 months of taking up their new tasks. Under the LEAP program, these employees got the opportunity to assess their ability to take up managerial responsibilities...

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