![]() 1] As quoted in the article, "FedEx Strategy to Stay Ahead of Competition," by Jimmy Yeow, Business Times, July 21, 1999. FedEx's net income of $3.5 mn in fiscal 1976 increased to $8.1 mn in 1977. In the same year, FedEx built a massive hub at Memphis, which eventually became the base of FedEx's operations across the world. FedEx had suffered losses during the initial years of operations, but by 1976 it had started generating profits. This marked the beginning of the air/ground express industry. In April 1973, FedEx commenced full-fledged operations with its network spread across 25 cities in the US. In March 1973, FedEx shifted its airline operations to Memphis, Tennessee, US. The company was incorporated as 'Federal Express Corporation' in June 1971 at Little Rock, Arkansas, US, with an initial investment of $84 mn. He decided to setup his own company to effectively serve this need. Smith (Smith)4 realized the need for an airfreight system which could deliver documents overnight. The corporation's philosophy is that employees should be doing the kind of work they want to do." 3īackground Note: The history of FedEx dates back to 1971, when Frederick W. Complimenting FedEx for its HR policies, Work Force magazine wrote, "FedEx is an example of an organization that has created an effective HR strategy that supports productivity and profitability. FedEx wasĬonsidered one of the most employee-friendly companies in the world because its innovative HR initiatives aimed at achieving maximum employee satisfaction. FedEx also conducted internal employee training programs, which were designed along the lines of executive education programs offered by management institutes. FedEx had also devised a succession planning mechanism - Succession Planning Executive Education - to groom its senior management employees for top management positions. The company's 'Leadership Evaluation and Awareness Process' gave FedEx's nonmanagerial employees the opportunity to seek managerial positions at FedEx. The company had also devised employee development programs such as 'Job Change Application Tracking System' to provide temporary employees the opportunity to gain regular employment at FedEx. FedEx's 'Guaranteed Fair Treatment Procedure' ensured that all types of employee grievances were addressed. The company devised a corporate communication program, known as the 'Survey Feedback Action' program, to encourage employees to give feedback on management policies. During its three decades in the business, FedEx had introduced several innovative HR practices. Framed and valued since FedEx's inception in 1973, the people-service-profit (PSP) philosophy (Refer Exhibit I) viewed employees as the key contributors to the company's profitability. Apart from the survey, a general evaluation of the company's philosophy and its HR practices was also conducted FedEx was among the first few companies in the world to develop a formal HR policy which viewed employees as a means for achieving long-term growth and profitability. The companies in the list were ranked on the basis of an employee survey that evaluated employees' trust in management, pride in doing work at the company, and sense of camaraderie. The company had received a high rating in areas like compensation, employee retention morale and work diversity. This was the fifth consecutive year in which FedEx's name had figured in the list. Introduction: In 2003, Fortune magazine featured FedEx Corporation (FedEx),2 a leading global logistics solutions provider, among the list of 100 'best companies to work for' in the US. Issues: » Understand the role of an organizational philosophy in the development of human resource policies in a multinational organization Finally, the case reviews the benefits reaped by the company because of its employee friendly HR practices. It also details the performance appraisal system and employee retention strategies of FedEx. The case gives an overview of the best practices employed by the company in the recruitment, selection, training and development of employees. Case Study: Best Practices at the FedEx Corporation Abstract: The case examines FedEx Corporation's various innovative HR practices, which earned it the reputation of being one of the most employee-friendly companies in the world. ![]()
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