Alitalia CAI Employee Satisfaction Survey Results

Based on

The Boomerang Effect: Careless Downsizing and Survivors Mismanagement Keep Alitalia Grounded A Term Paper for the Degree of Master of Public Administration
Bowie State University
in cooperation with

Italian Pilots Association

Date:15 Aug 2011

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Theoretical Framework
Research on the effects of downsizing on financial performance shows negative results due to issues related to: the way downsizing is implemented, and survivors management. HR activities affect organizational performance (HR Outcomes: employee satisfaction, motivation, social climate between worker and management, employee trust/ commitment etc.) which in turn affects financial performance. Literacy reviewed for this paper includes studies on: Downsizing Implementation Survivors Management Impact of HR activities on HR outcomes and financial performance Airline pilots job Research Questions: Was Alitalia downsizing implemented effectively? Has the new management way of leading and managing change influenced the airline performance? Sampling Method: Non-probability sampling
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Sample Population Selection

Alitalia CAI Survivor pilots were selected as the sample population. Why pilots? Pilots play a central role in airline operations Airline pilots job peculiarities Pilots management has safety implications(1) Successful airlines manage their aircrews effectively

Sample Population Description

A total of 76 valid questionnaires were received.

The majority of pilots who replied were between 40 and 50 years old and have 8-25 years seniority with the airline. EXPERIENCE
50% = Captains 7500-15.000+ hours 38% = First Officers 4500-13000 hours 12% = did not provide this information 38%= prior military experience.

Only 10% have been relocated after downsizing. As far as their family status is concerned, the great majority are married or co-habiting. Most of their wives/partners are employed (70%), either fulltime or part-time (only 20% of them are airline employees), while a small percentage (30%) are housewives. Of all married or co-habiting pilots, half of them are fathers of one or more children.
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Survey Themes
Downsizing Implementation
Perception of Process Emotional & Physical Reactions Impact on Commitment

Employees/Unions Management Relations Leadership Communication of Goals & Strategies Work Environment

Change Management at Alitalia

Q3 I was proud to work for Alitalia LAI (before privatization)
1% 8% 0%
26% Strongly Agree Agree

Q1 I am proud to work for Alitalia CAI

1%

17%

Strongly Agree Agree Neutral

38%

53%

Neutral Disagree Strongly Disagree 28% 28%

Disagree Strongly Disagree

The lost pride: 91% to 18% (2)

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DOWNSIZING IMPLEMENTATION (PART I)

Perception of Process
Q9 Downsizing was implemented in accordance with established agreements/criteria (*)
1% 1% 5%
Strongly Agree Agree Neutral 52% 25%

Q8 Internal communication at the time of downsizing were timely, transparent and respectful of laid off employees
1% 5% 17%
Strongly Agree Agree Neutral Disagree Strongly Disagree

52%

41%

Disagree Strongly Disagree

Q10 After downsizing implementation You received adequate support from Alitalia CAI HR Dept. to cope with the consequent negative attitudes/emotions (*)
0% 3%

Q7 Thanks to downsizing Alitalia CAI today is a leader in the industry in many ways
3% 11% Strongly Agree Agree Neutral 50% 36% Disagree Strongly Disagree

0%

8% 24%

Strongly Agree Agree Neutral Disagree Strongly Disagree

65%

(*) Expand option

DOWNSIZING IMPLEMENTATION (PART II)

Emotional & Physical Reactions
Q39 Did you experience guilt since your colleagues were laid off Q40 Surviving mass layoff has affected your morale and motivation
3%
Strongly Agree Agree Neutral

13%

4%

15%

3% 25%
Strongly Agree Agree Neutral Disagree Strongly Disagree

21%

30%

38%

Disagree Strongly Disagree

48%

Q41 Surviving mass layoff has affected your health

1% 32%
Strongly Agree Agree Neutral Disagree

4% 20%

Q42 In the past two years you have experienced one or more of the following: depression, anxiety, change in eating habits, ...(*)
21% 20%
Strongly Agree Agree

13% 28% 18%

Neutral Disagree Strongly Disagree

43%

Strongly Disagree

(*) Expand option

DOWNSIZING IMPLEMENTATION (PART III)

Impact on Commitment
Q4 I feel more committed to the airline now than I did before downsizing and privatization in 2008
4% 0% 13% 39%
Strongly Agree Agree Neutral Disagree Strongly Disagree

Q21 The number of hours allocated to study my manuals has remained unchanged after privatization
4% 33% 20%
Strongly Agree Agree

5%

Neutral Disagree Strongly Disagree

44%

38%

Q20 My commitment to maintaining high professional standards has remained unchanged after privatization(*)
9% 26% 28% 17%

Q18 In the past 24 months, I have perceived external pressures as interfering with my decision making process
8% 13%
Never

20%
Strongly Agree Agree Neutral Disagree Strongly Disagree

16% 13%

Rarely Sometimes

13% 37%

Often Many times Always

(*) Expand option

EMPLOYEES/UNIONS MANAGEMENT RELATIONS (PART I)

Q38 How would you define the quality of the airline's employee/management relations
0% 35% 1% 15% Very Good Good Neutral Bad Very Bad 49% 54% 32%

Q24 How satisfied are you with HR Dept communication style

0%

14% Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

Q23 How satisfied are you with HR Practices & Policies (i.e. respectful of workers' rights, dignity, personal needs...)
0% 1% 6%
Very Satisfied Satisfied Neutral

Q6 I feel that Alitalia CAI Management cares about its people

0% 4% 8%
Strongly Agree Agree

52%

52% 36%

Neutral Disagree Strongly Disagree

41%

Dissatisfied Very Dissatisfied

Q30 How satisfied are you that HR Dept cares and is responding to the issues of most importance to you
0% 30% 1% 11%
Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

58%

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EMPLOYEES/UNIONS MANAGEMENT RELATIONS (PART II)

Q37 How would you define the quality of Alitalia CAI industrial relations (Management/Unions)
1% 0% 4%

Q36 Do you feel that Unions are effective in representing your interests and protecting your job
3% 8%
Very Good Good Neutral Bad

35%

Strongly Agree

27%

17%

Agree Neutral Disagree Strongly Disagree

68%

Very Bad

37%

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COMMUNICATION OF GOALS & STRATEGIES

Q17 Alitalia CAI is responding to important INTERNAL issues
3% 0% 9% 38% Strongly Agree Agree Neutral Disagree Strongly Disagree 50% 43% 30% 16%

Q13 Alitalia CAI leadership has a clear vision of the future

7% 4%
Strongly Agree Agree Neutral Disagree Strongly Disagree

Q15 Alitalia CAI leadership has made changes which are positive for me
0% 5% 9%
Strongly Agree Agree

Q11 I understand how Alitalia CAI stragegy differentiates us from the competition
0% 9%
Strongly Agree

17%

28%

Agree Neutral Disagree

53% 33%

Neutral Disagree Strongly Disagree

46%

Strongly Disagree

Q2 I am optimistic about my future success with this airline

0% 3% 21%
Strongly Agree Agree Neutral Disagree Strongly Disagree

Q14 Alitalia CAI leadership has made changes that are positive for the airline
1% 26% 18%
Strongly Agree Agree Neutral Disagree

32%

44%

22%

33%

Strongly Disagree

Q12 I am optimistic about the future of Alitalia CAI

Q16 Alitalia CAI Leadership is responding to the important external issues

3%

1% 36%

7% 17%
Strongly Agree Agree Neutral Disagree Strongly Disagree

17%

18%
Strongly Agree Agree Neutral Disagree

25% 37%

39%

Strongly Disagree

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WORK ENVIRONMENT (PART I)

Individual
Q27 How satisfied are you with Alitalia CAI as a place to work
Q26 How satisfied are you with the amount/frequency of informal praise & appreciation from supervisor
24% 0% 11% Very Satisfied 23% Satisfied Neutral Dissatisfied 42% Very Dissatisfied 0% 10% 27% 18% Very Satisfied Satisfied Neutral Dissatisfied 45% Very Dissatisfied

Q34 How satisfied are you with your own morale

1% 30% 21%

Q35 How satisfied are you that your work gives you a feeling of personal accomplishment
4% 27%

7%

Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

41%

11%

Very Satisfied Satisfied Neutral

30% 28%

Dissatisfied Very Dissatisfied

Q28 How satisfied are you with your ability to maintain a reasonable balance between family life & work life
0% 30% 13% 20% Very Satisfied Satisfied Neutral Dissatisfied 37% Very Dissatisfied

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WORK ENVIRONMENT (PART II)

Individual (cont)
Q25 How satisfied are you with your job security
Q5 I feel that people in Alitalia CAI get ahead primarily on the merits of their work
0% 7% 13% 44%
Strongly Agree Agree Neutral Disagree Strongly Disagree

14%

0%

14%

Very Satisfied Satisfied Neutral 27% Dissatisfied Very Dissatisfied

45%

36%

Q29 How satisfied are you that your compensation matches your responsibilities (compared to airlines in your reference group)
0% 35% 7%

Strongly Agree
24%

Agree Neutral Disagree Strongly Disagree

34%

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Notes (Results & Analysis)

1. 2. 3. An airline pilot primary task is to fly the aircraft under his command from the departure airport to destination safely. Factors affecting a pilots ability to perform his primary task, the quality of pilots employed, the commitment of pilots to exercise good airmanship, the active support received by airline management to operate their aircraft in a professional (safe) manner (i.e. aircrew training, safe operating procedures, and pilots operational decision making process) but most of all that pilots are able to exercise their professional skills free of commercial pressure (Paterson, 2008) Alitalia CAI maintained the old Alitalia LAI logo, uniforms, and symbols, so this result may look worse if one consider that current employees sense of attachment may stem from the airlines glorious past rather than its present identity. A recently published wikileaks cable from Ambassador Spogli, US Ambassador for Italy back in 2008, confirms pilots perceptions about their airline privatization process. Ambassador Spogli states: The Alitalia saga is a sad reminder of how things work in Italy and of PM Berlusconi's rather weak adherence to some of the core principles of freemarket capitalism. Berlusconi had the chance to let this be handled as a business matter, but he chose to politicize it. Under the guise of a rather quaint (and distinctly un-EU) desire to maintain the Italian-ness of the company, a group of wealthy Berlusconi cronies was enticed into taking over the healthy portions of Alitalia, leaving its debts to the Italian taxpayers. The rules of bankruptcy were changed in the middle of the game to meet the government's needs. Berlusconi pulled this one off, but his involvement probably cost the Italian taxpayers a lot of money. The way in which this deal was done -- cronies, political interference, preference for Italian buyers, custom-made laws -provided the world with a clear reminder of Italy's investment climate shortcomings. (http://espresso.repubblica.it/dettaglio/alitalia-ecco-la-truffa-di-b/2154169) Government designed social measures to protect laid off employees did not take into account pilots peculiarities. Thus those measures only delayed laid off pilots professional death and inability to sustain their families. These shortcomings certainly have affected survivor pilots feelings of guilt, morale and motivation. Mr Yap Kim Wah, Vice President of Singapore Airline, of one of the world leading airlines, lists among the most important factors contributing to his airline success his people: We have talented and good people, good industrial relations, good HR management, and we look after our staff well (Wirtz & Johnston, 2001). The books Up In The Air: How Airlines Can Improve Performance by Engaging Their Employees and The Southwest Airlines Way : Using the Power of Relationships to Achieve High Performance explain how employees, if properly managed, can make the difference, in terms of firms financial performance (Gittel, 2003, 2009) During the emergency in Japan last March, aircrews Unions had to intervene several times to ask Alitalia CAI Management to implement measures to protect its pilots and flight assistants from radiation exposure. http://www.protezionecivile.gov.it/resources/cms/documents/rass_03_04_11_03.pdf The effects on morale and motivation of the unprecedented denigration media campaign against pilots and flight assistants, Union busting, and the merger with the private airline AirOne, have not been considered for this study.

4. 5.

6. 7.

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