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CASE 11

HR and cost-effective Service excellence at Singapore airline

In the past four decades, Singapore Airlines has gained a stellar reputation in the highly competitive
commercial aviation business by providing customers with high-quality services and dominating the
business travel segment. Singapore Airlines has been the most awarded airline in the world for years.
For example, he won the Best World Airline Award from the prestigious travel magazine in England,
Condé Nast Traveler 23 of the 24 times nominated. The aircraft also won the Skytrax Airline of the Year
award three times over the past decade. This award is a reflection of Singapore Airlines' customer focus.

‘One of the key elements of Singapore Airlines' competitive success is that it manages to navigate
skillfully between the poles that most companies consider different: providing service excellence in a
cost-effective manner. Singapore Airlines fees are lower than all other full service airlines. In fact, the
cost level is so low that it is comparable to budget airlines. From 2001 to 2009, the airline cost per seat
kilometer available was only 4.6 cents. According to the 2007 International Air Transport Association
study, the costs for full-service European airlines are 8 to 16 cents, for US airlines 7 to 8 cents, and for
Asian airlines 5 to 7 cents per kilometer of seats available. Singapore Airlines even has lower costs than
most low-cost airlines in Europe and the United States, which range from 4 to 8 cents and 5 to 6 cents,
respectively.

A key challenge of implementing business-level strategies, such as effective differentiation at Singapore


Airlines through service excellence and innovation combined with superior levels of operational
efficiency, is the alignment of functional strategies such as HR, marketing, and operations with the
business-level strategy.

The five core elements of the SIA HR strategy:

• Strict selection and recruitment process


The HR strategy began with recruitment, and Singapore Airlines adopted a very strict and rigorous
selection process. Senior managers emphasize the need for cabins that can be lined with passengers and
crew who are cheerful, friendly and humble. Cabin crew applications, starting with initial screening of
age ranges, academic qualifications, and physical attributes.
The next recruitment interview consists of four rounds. In round 1 (10 applicants at once), applicants are
asked to introduce themselves and answer questions asked by the interviewer. They are judged by the
command of English, self-confidence, and care. In round 2 (six applicants at once), the candidates are
divided into two groups and given topics to be debated. Applicants are judged based on their ability to
work as a team and their current arguments logically and convincingly. For the second half of the
interview, applicants are given a part to read so that their pronunciation can be tested. In round 3, one-
on-one interviews with management were conducted to assess the candidate's skills and suitability for
the position. In the final round, also called the grooming round, a uniform test allows the interviewer to
assess the appearance of the applicant in the Singapore Airlines kebaya sarong. This evaluation
considers the posture, gait and general appearance of uniformed applicants.
• Extensive investment in training and retraining
Singapore Airlines emphasizes training, which is one of the focal points in its HR strategy. According to
the senior HR development manager, "SIA invests a large amount of money in infrastructure and
technology, but in the end, you need people to drive it. In SIA, we believe that people really make a
difference, so companies have and a holistic approach to developing Our human resources. Basically, we
carry out two types of training, functional training and general management type training. "Nearly half
of Singapore Airlines' spending is for functional training and retraining. Continuous training and
retraining is very important to maintain service excellence on Singapore Airlines. Staff members are
equipped with an open mindset that allows them to accept changes and development and provide new
services introduced by the airline on a regular basis.

• Build a High Performance Service delivery team


The nature of the work environment on board requires people to work effectively as a team to provide
service excellence. In fact, an effective team is often a prerequisite for providing the best service. Given
this, Singapore Airlines aims to create esprit de corps among its cabin crew. 7,700 crew members were
formed into "wards." Each environment consists of around 180 crew members led by "environmental
leaders", who act as advisors to guide and develop other members. Environmental leaders publish
bulletins for their teams and arrange face-to-face sessions and activities with members of their ward.
These activities include inter-environment games, overseas bonding sessions, and full-day engagement
sessions in the field.

• Empowering the front line to provide Quality of Service


Over time, flight crew soft skills and other service personnel are increasingly honed, leading to service
excellence that is difficult to imitate not only in terms of how services are provided but also in terms of
the mindset that supports this delivery. Almost all leading service companies have legendary stories
about employees who recover failed service transactions, go further to make customer days, or prevent
a kind of disaster for customers.

• Motivate staff through appreciation and recognition


Gifts and recognition are the main levers that any organization can use to encourage appropriate
behavior, emphasize positive and unwanted practices, and recognize excellence. Singapore Airlines uses
various forms of rewards and recognition, including interesting and varied work content, symbolic
actions, performance-based stock options, and a significant percentage of the variable wage component
associated with individual staff contributions and the company's financial performance. It makes low
basic salary by offering employee bonuses up to 50% of their annual base salary. This formula is
embedded and depends on the profitability of the airline.