Best HR Practices at FEDEX | HR Case Study | HRM | Recruitment & Selection | Training & Development

Summary

In this video, we explore the best HR practices of FedEx, tracing its journey from its founding in 1971 to becoming a leader in global logistics. The company’s success is largely attributed to its employee-centric philosophy, 'People Service Profit,' and innovative HR practices like automated recruitment, continuous training, leadership development, and performance-based incentives. FedEx's focus on internal promotions, feedback programs, and employee engagement has played a key role in its growth. Recognized by *Fortune* as one of the best places to work, FedEx continues to prioritize employee development to drive company success.

Takeaways

• 😀 FedEx was founded in 1971 by Frederick W. Smith to address the need for overnight document delivery.
• 😀 The company adopted the People Service Profit (PSP) philosophy, emphasizing that employee satisfaction drives customer service and profitability.
• 😀 FedEx introduced the Survey Feedback Action (SFA) program in 1979 to improve employee-management relations through regular feedback.
• 😀 In the 1990s, FedEx automated its HR systems, creating PRISM, an online database to manage employee records, training, and performance.
• 😀 The company recruits employees from top universities and offers an internship program to groom future talent for various positions.
• 😀 FedEx transitioned from a manual application process to an online job portal for efficient recruitment and applicant screening.
• 😀 Continuous training is a priority at FedEx, with regular assessments of job knowledge to help employees enhance their skills.
• 😀 FedEx promotes from within, offering leadership development programs like LEAP and LDI to prepare employees for higher roles.
• 😀 Temporary employees at FedEx can become permanent through the Job Change Applicant Tracking System (JCATs), based on their performance.
• 😀 The Speed Succession Planning Program allows senior managers to evaluate and prepare employees for future leadership roles.
• 😀 FedEx's Guaranteed Fair Treatment Procedure (GFTP) provides employees with a formal grievance system, addressing complaints at multiple levels.
• 😀 The company implements an Open Door Policy, encouraging employees to voice concerns or questions about company policies directly to management.
• 😀 FedEx uses a three-tiered performance appraisal system—People, Service, and Profit—to evaluate managers' leadership, service quality, and company profitability.
• 😀 The incentive structure at FedEx is based on leadership scores (CLS) and service quality indicators, aligning rewards with employee and company performance.

Q & A

What was the original vision behind the creation of FedEx?

Frederick W. Smith, the founder of FedEx, realized the need for an airfreight system capable of delivering documents overnight. This led him to establish FedEx in 1971 to fulfill this need.

How did FedEx overcome its initial financial challenges?

Although FedEx suffered losses in its early years, it started generating profits by 1976, demonstrating resilience and the successful implementation of its strategies.

What innovative HR practices contributed to FedEx's success?

FedEx's success was largely attributed to its innovative HR practices, including a strong focus on employee development, a formal HR policy, and a commitment to employee satisfaction.

What is the 'People Service Profit' philosophy at FedEx?

The 'People Service Profit' philosophy, introduced by Smith in 1973, emphasizes that taking care of employees leads to better service for customers, which ultimately drives profitability for the company.

How did FedEx improve employee-management relations in the 1970s?

In 1979, FedEx introduced the Survey Feedback Action (SFA) program, which involved gathering employee opinions through questionnaires and using the feedback to improve relations between employees and management.

What role did technology play in FedEx's HR practices?

FedEx embraced technology early on, automating its HR systems, including the creation of the Personal Records Information System (PRISM), which evolved into a comprehensive database of employee records.

How does FedEx's recruitment process work?

FedEx recruits talent from top universities, offers internship programs, and has automated its job application and applicant screening procedures. The process includes online applications, aptitude tests, interviews, and background checks.

What is the leadership development program at FedEx?

FedEx created a Leadership Development Institute (LDI) in the mid-1980s, offering various management training programs, including the 11-week Field Applied Management Education (FAME) program to develop leadership skills.

What is the Leap program at FedEx, and how does it benefit employees?

The Leap program, introduced in 1988, was designed to help non-managerial employees assess their potential for managerial roles. It provided valuable insights into leadership abilities and helped identify those with high leadership potential.

How does FedEx handle employee grievances?

FedEx implemented the Guaranteed Fair Treatment Procedure (GFTP), allowing employees to express grievances up to three levels of management. If unresolved, complaints could be reviewed by higher executives, including the company's 'supreme court.'

How does FedEx measure employee performance and reward them?

FedEx uses a performance appraisal system based on the People Service Profit metrics, assessing leadership ability, service quality, and profit generation. Employee incentives are determined by factors such as leadership scores and service quality indicators.