UNITED PARCEL SERVICE
By: MoChaé Gordon
center850008549640March 22, 2018
FIELD RESEARCH REPORTHuman Resources Management: BUS ADM 4441000000March 22, 2018
FIELD RESEARCH REPORTHuman Resources Management: BUS ADM 444
Table of Contents
Organization and its mission…………………. Page 2
The Role of the Human Resource Function……………. Page 10
Meeting Human Resource requirements: Job Analysis, Planning, Recruitment and selection………………. Page 11
Summary and Evaluation……………. Page13
The Organization and Its Mission
United Parcel Service(UPS) was established in 1907, it’s known for the largest courier delivery company and top global leader who provides special transportation and logistics services. UPS is an international leader in logistics, which offers a broad range of solutions including the transportation of packages and freight, the facilitation of international trade, and the deployment of advancement technology to manage the world of business more efficiently. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide.
The founders are Jim, George, Evert, and Charlie. James Emmett Casey(Jim) was born on March 29, 1888, in Candelaria, NV. In 1907, Jim founded the American Messenger Company with partner Claude Ryan in Seattle. The company served its customers by delivering telephone messages and running errands. Evert McCabe was born in Antwerp, OH, on September 24, 1886. He grew up in Indiana and later moved to Seattle where he started Motorcycle Messengers. In May 1913 the American Messenger company merged with the Motorcycle Delivery Company, owned by Evert McCabe, to form Merchants Parcel Delivery. The company was a delivery service using motorcycles as its mode of transportation. Evert was the outside representative for the business, and his primary responsibilities included sales and customer relations. He was also very involved with employee relations and later instituted an employee newsletter and an employee development program. Jim’s first role was as manager of the delivery department. Evert became president of Merchants Parcel Delivery, and later vice president of United Parcel Service, when the company first expanded into Oakland, CA.
George Casey was born on February 21, 1893, in Candelaria, NV. George joined his brother Jim Casey with the American Messenger Company in 1911. His first job with the company was to post advertising placards around the city of Seattle. He was also involved in delivery, sales, bill collection, and dispatching messengers. He left temporarily to serve in the U.S. Navy during World War I, and returned in 1919 to manage operations when the company expanded to Oakland, CA. Later, he helped plan the expansion of service into other West Coast cities. When the UPS headquarters moved to New York, George remained in Los Angeles and became general manager of all West Coast operations. He also remained on the West Coast as director and vice president and is given credit for adding “United” to United Parcel Service. The name United Parcel Service was first used when the company opened operations in Oakland, CA, in 1919. The Seattle office did not adopt the name United Parcel Service until 1925 and Jim became the President of United Parcel Service when the Oakland company was incorporated. He held that position until his retirement in March 1962, then George Smith became CEO. Although, Jim remained active with and served on UPS’s Board of Directors until May 1983.
Charles W. Soderstrom was born in 1875 in Sweden and grew up in Olean, NY. Charlie joined Merchants Parcel Delivery in 1916 as a part-time manager of the motor vehicle fleet and delivery operation. He became a full-time partner in 1917. With his knowledge of new automotive technology, he standardized the fleet around the Ford Model T and was involved in designing the bodies for the package cars. He also established the automotive operations in California. Charlie insisted on maintaining clean package cars and was responsible for the use of the color brown on the company’s vehicles. His insistence on quality service led to the addition of the word “Service” in United Parcel Service because, “that’s all we have to offer.” After Charlie joined the company, Jim’s primary responsibility was for the financial side of the business. Charlie suffered a serious injury in 1928 and after recovering, he continued to be an important advisor and employee of UPS. He retired in 1937.
The company has daily plan of goals that are tailored to not only to its customers but also the work and output done by its employees. UPS organizational structure is set up by a management committee, which is in control for daily management of the organization. However, because of UPS organizational structure being centralized, they can easily apply strategic planning for the company. To develop effective strategic plans and successfully execute them there are 6 steps the organization practices.
Their first step is to create a formal strategic plan that articulates their vision for the organization and how it’s going to get there. The five top goals of their formal strategic plan are marketing and business development, building a cohesive organizational-first culture, growing current practice areas, growing the business through lateral hires and/or acquisitions, and succession planning. The second step is to limit the number strategic objectives and projects. To avoid having too many objectives and projects the organization answers these three basic questions that helps them, where are we now, where do we wish to go, how are we going to get there? They chose three specifically because they feel its smarter to limits the company’s ambitions and focus on this number of objectives over a twelve to eighteen-month period. This is so that they don’t pile strategic work on top of everything else people are doing. The planning should align with and replace some portion of managers’ everyday work. The third step of the planning process is to engage as many people as possible in plan development. There are two main reasons they choose to get more people involved in strategic plan development and they are that more knowledge and ideas lead to a better, more realistic plan and wider awareness and engagement makes implementation easier. The more the participation in plan development, the deeper the buy-in and leadership can spend less time defending the plan and more time on managing execution. Step four is to establish clear accountability. The organization takes responsibility for the objectives after they’ve been set. Since the strategic projects are cross-functional by nature, the top leaders must be able to work effectively across the organization. Assigning responsibility for strategic goals deals with creating some sort of a “chief officer”, forming a task force, or assigning key initiatives to their board of directors. Then the fifth step is to communicate the plan by sharing it with employees. They’re involved with the strategic plans because they can be interchangeable. Leaders communicate what the strategy is, why it’s important, and how others can help implement it. Sustaining the routine of communication keeps everyone connected to the plan. So, things such as bulletin boards and other visual tools can make priorities and progress visible to staff. Finally, step six is to track the performance and conduct regular progress reviews. They measure what gets done based off performance and piece work only if there’s a regular review process. The leaders also establish key performance indicators(KPIs) to evaluate the success of the organization or of an activity, monitor progress, and adjust as needed. The top leaders of the successful service track performance and review progress on a month-to-month or quarterly basis. Some of these meetings are linked to budgeting and performance reviews while using some sort form green, yellow, red system to show when strategic initiatives are on track or not. Therefore, the way the plans are executed is how they gain a competitive edge and focusing on early wins can demonstrate the value of the planning process sooner than later.
There are twelve focuses that the committee operates from within UPS. Under this structure there is the Chairman and CEO who oversees the entire function inside of UPS operation. In this position, the CEO is responsible for the advancements of UPS establishing new lines of businesses that will complement the company’s global package delivery operations. The Chief Operating Officer (CFO) keep tabs on all the UPS operations and delivery of over 15.8 million packages and documents worldwide. The Senior Vice President of Sales and Marketing is responsible for directing the electronic commerce, customer service, customer relationship management, and product development. Then, the Senior Vice President of Supply Chain is responsible for applying UPSs’ Corporate Strategies and Engineering functions while overseeing the company’s environmental activities. The Senior Vice President of Global Transportation Services manages UPSs’ entire intermodal transportation network. The network includes the world’s 9th largest airline and a ground delivery fleet of more than 100,000 vehicles. Next, the Senior Vice President of U.S. Operations is responsible for all U.S. operations, which include the pick-up and delivery of more than 15 million packages each day and more than 345,000 employees. Senior Vice President of Human Resources manages a human resources organization that serves more than 400,000 employees worldwide. The Vice President of Communications and Brand Management has global responsibility for Public Relations, Employee Communications, and Brand Management, while the Chief Information Officer for UPS oversees daily operations of the company and is responsible for the direction of UPSs’ technology investments. The Chief Financial Officer of UPS who is responsible for all activities related to accounting, auditing, finance, financial planning, taxes and treasury. Finally, there is the Senior Vice President for UPS who oversees the company’s legal, compliance and public affairs activities worldwide. Moreover, under each department’s leadership, UPS has established an excellent work environment and building effective teams that have motivated their employees to achieve the organizational objective and goals. UPS operations run on a highly centralized organization that this focused on an annual business planning processes that are ran from both corporate headquarters in Atlanta and Memphis. In a centralized organization, top management retain the authority to make majority of the strategic and operational decision for the company monitoring their department head closely.
Today UPS employs 454,000 employees, operates 4945 UPS Stores, 1052 Customer Centers, 9070 Authorized Outlets, 38,200 drop boxes, over 189,000 vehicles (owned and leased), and 237 UPS Jet air crafts in 220 countries, (“UPS Fact Sheet,” n.d.). UPS has grown into a multi-billion-dollar operation with sales revenue of $58.26 in 2014, a little dip in 2015 with $58.05, and $60.50 billion last year in 2016, not bad for such humble beginnings, (“United Parcel Service Inc.,” (n.d.). Their stocks have stay steady opening today (April 22, 2017) at $105.71 and closing at $105.77. Not the case on January 31st of this year though, UPS saw the biggest one-day price and percentage decline in two years. On January 23, 2015 the share dropped to $11.32/9.9% which was the second largest percentage slide ever, (Kilgore, 2017).
One reason that UPS has been so successful in business is that they have managed to keep up with technology as it has advanced through the years. They now spend over a billion dollars a year investing in advanced technology to stay on top of every advance and to stay ahead of the stiff competition, FedEx and Airborne Express, (Laudon and Laudon, 2016). A special software is available to the customer via UPS or through the website for printing a bar-coded label, as soon as the label is scanned for a package delivery, the senders’ information, including destination, and arrival information is sent straight to one of UPS’s computer centers. It’s because of these smart label’s that customers can get real-time information on their packages, it is also the reason the most efficient delivery route is available to the driver, (Wilson, 2006). In 2001 UPS installed fuel-efficiency sensors on over 46,000 of their vehicles, and sensors on its delivery vehicles that tracks the trucks speed, location, and other data. By coupling the data gathered from both sensors and uploading the information into a UPS central computer the data is analyzed, by doing so the company has reduced 85 million miles off routes, saved 8.4 million gallons of fuel, saving UPS an estimated $30 million, (Laudon and Laudon, 2016).
To maintain its competitive edge over the competition UPS has developed new technologies over the years. This technology has also helped streamline the company’s operation, keep prices low, and continue to provide the best customer service. The technology advances include everything from small handheld devices that is carried by delivery driver to global communications and computer systems. The DIAD (Delivery Information Acquisition Device) was developed to record delivery information to the UPS network and allows the driver to stay connected to constantly to headquarters, to track packages, and re-route packages if there is a change in traffic patterns, any changes to schedules, and other important information concerning their deliveries. For international package-deliveries UPSnet, a global electronic communication network, was developed. Using more the 500,000 miles of communication lines, a satellite dedicated to linking over 1,300 distribution sites in over 40 countries, (“UPS: Company History,” n.d.). To manage global service UPS has developed a web based Post Sales Order Management System (OMS) which enables companies that ship that critical parts to access an inventory of parts anywhere in the world and determine the best strategy and routes to get the parts to the customer quickly. UPS spends a billion dollar every year to ensure they continue to improve the efficiency of their customer service, keep cost low, and streamline all its operations, (Laudon and Laudon, 2016).
After years of operations and advancements UPS has taken their expertise in information technology infrastructure and to manage supply chain solutions and logistics to offer their services to other organizations. There have been many changes that have occurred in the organization’s budget in recent years. The changes have noticeable increases in revenues and sales. Since 2013 the revenue has increase from 55.49billion to 65.84billion. This increase in revenue is due to the increase use of the internet with online purchasing as it seems that each year the volume of packages that are processed through the organization continues to increase. As far as figuring out if any of the old sources of funding being eliminated or reduced; and how that would affect management was not able to be answered. Although, the total composition of the organization is made up of more than 454,000 globally (374,000 in U.S.). The employees are distributed throughout the organization by operational function and by skill. The building consists of management skills that are split into HR, full-time and part-time supervising, but above management are the professional leaders of the company that occasionally make walk throughs of the company to check on things. Then there are the semi-skilled operatives overseen by supervisors that have gone through training while becoming an expert at the skill based off the amount of years spent at the company. These semi-skilled operatives also hold some educational background which is typically not a college degree. The semi-skilled workers make up most of the company and are union workers that are responsible for most of the movement and transportation of packages. A high school diploma is not required to work at UPS. As an example, there are tons of brown truck drivers and semi-truck drivers that are delivering packages without a high school diploma making 100,000 or more a year with benefits and being in the union. These truck driving positions are usually given based off seniority at the company but this has changed recently. There are also technical employees who fix things around the building and/or the trucks that are used to transport and/or move packages. There have been many noticeable employment trends in the recent years which consists of more young people being hired, more females being hired, and along with more minorities being hired seeing as the company still consists of mostly white males. Also, as stated before, there had been a change in how truck drivers are selected. It’s not really based off seniority anymore. Currently, they are in desperate need of truck drivers since the volume of packages continue to increase each year and they’re trying to keep up with the work. So, their solution now for the package car drivers and supervisors is to train and promote anyone within the company that would like to do the job regardless of seniority.
This organization United Parcel Service (UPS) is one of the world’s largest courier and local package delivery service providers. Headquartered in Georgia, USA, the company is also a provider of supply chain management solutions and operates its own airline and air cargo delivery service based in Louisville, Kentucky. UPS delivers an average of 18 million packages worldwide per day, services more than 220 countries/territories, including every address in North America and Europe. The organization also has a detailed strategic management plan with goals and objectives that I mentioned earlier since it’s part of the decision-making process within the company. UPS was also faced with a wide range of major problems. UPS had to consider about how to develop and grow its information and technology system, to continue competitive in the marketplace. With that dispute, UPS had to face the challenge of matching its intent to promote and expand from within, with require going ahead rapidly using outside resources. They also have struggled with the strategic difficulty of how to grow up their air services business. I’d recommend that UPS think of a way that they could continue their air services through other suppliers, or to obtain another small firm. Although, attaining another firm could cause UPS to deal with even more problems with cultural incorporation. Overall, UPS was dealing with the strategic problem of cultural integration and quick development. Neither factor could be unobserved if UPS wanted to remain a strong candidate in the market.
The Role of the Human Resource Function
The strong legacy of ethics and integrity is essential at United Parcel Service(UPS) for the company to be able to attract and retain the best employees, gain and keep the trust of its customers, create shareholder value, support the communities in which they operate and the protection of the company’s overall reputation. This legacy must be carried on for every employee and management to remain a competitive package delivery company. These aspects pertain to this legacy that revolves in human resources department. UPS has a formal and identifiable human resource department. To define the roles of UPS Human Resources organization, the roles represent the interests of UPS administration by actively serving as a leader with the organizational workforce, consultant, resource, and departmental authority on human resource policies, processes, programs, and transactions with support and guidance from management, division and Central Human Resources; to support a humane and supportive work environment consistent with the UPS mission and foundation values. In other words, UPS Human resources enforce the policies that the administration establishes and makes sure the policies are interpreted equally and fairly.
The Human Resources Department at UPS incorporates several different roles and responsibilities which are; employment training and development, health and safety, regulatory compliance, employee information management, and community relations. The Human Resources Department uses information technology to process some of this information about employees, to produce information, to distribute it, process it and manage it. It’s also used when training employees thus human capabilities are combined and developed with information technology to enhance productivity.
The perceived importance of the human resource department relative to other departments of the organization is that it helps solve conflicts, train and develop employees, and one of the most important, ensuring that employees are satisfied. UPS wants to be known as the employer of choice where the company is recognized for the way they treat their employees. They’re the company that want people to want to work for them and becoming an employer of choice means that the human resource department of UPS balances recruiting the most qualified applicants, selecting the most suitable candidates and retaining the most talented employees. As far as the human resource department in foreign countries, the interviewee concluded that they’d assume that they would operate in the same manner and there wasn’t valuable information online about it either. Therefore, I was unable to draw out or come up with any problems or challenges foreign countries might face in this department. The HR department seems to function well based off the way they handle things such as, determining skills needed for each position, comparing current skills with what is needed, determining training needs and resources needed, designing and implementing the training, and overall how the department carry out their objectives in a strategic style.
Meeting Human Resource requirements: Job Analysis, Planning, Recruitment and selection
At UPS the human resource department is integrated into the strategic management of the organization and systems to achieve the overall mission, strategies, and success of the firm while meeting the needs of employees and other stakeholders. There are multiple HR employees are responsible for planning and forecasting for the organization depending on the work shift. Each shift has an interchangeable group of employees usually based off age. The methods that are used to determine staffing needs include the rule of thumb method to maintain the organizational structure, the Delphi Technique to get input from a group of experts to analyze staffing history and staffing planning, and statistical regression analysis to compare relationships in historical data for forecasting staffing needs. The organization focuses on both short and long run human resources needs because the organization still has the union with and looking for committed employees by keeping in mind the turnover rate. Job analysis and job descriptions are made for each position in the organization and are frequently updated because they are constantly looking for people to work. Since they’ve been recently having a hard time retaining employees, making sure that the job analyses and job description are up to date is crucial.
There have been problems also that the HR department has encountered when planning. One specific one that I just mentioned is retention. It’s hard for them to plan and make decisions if employees are leaving. By resolving this problem, they try to make the hiring process as realistic as possible so that the employees know what to expect. I think this is a feasible solution because then employees aren’t leaving the job over dissatisfaction for what ever reason. If no human resource planning is done the strategic plan of the organization can’t develop a strategic HR plan that will allow them to make HR management decisions to support the future direction of the organization. Strategic HR planning at UPS is important from a budgetary point of view so that they can factor the costs of recruitment, training, into the organization’s operating budget. Therefore, the lack of human resource planning has not existed seeing as it would clearly have a negative impact on the organization.
Next, The safety of the employees and of the general public is of utmost important to Human Resources. Every employee is trained to avoid injury to themselves and others in all phases of an employees work duty. They make it well known that will not tolerate unsafe work practices. They encourage the involvement of all of their people in safety awareness activities and recognition for safety accomplishments. Training is the cornerstone of safety in UPS’s fleet of package delivery drivers. The company invests millions per year on safety training. The HR department becomes a key enforcer of the health and safety procedures and makes sure that the money spent in those procedures is worthwhile.
Employee information management is the non-confidential and confidential information that is shared by the employee and the employer. The personal records information maintained in Human Resources administrative office of UPS, about the recruitment and employment of any person, whether the record is stored in printed or written form, micrographic, electronically or otherwise. Some Records are included, but are not necessarily limited to letters of application, personal resumes, letters of recommendation, academic records, materials furnished by a placement service, appointment forms, records of promotion or other changes in status subsequent to appointment, salary, raises, leave accumulation, employee medical records, grievance, disciplinary hearings, and public records statute. This information is used to balance other personnel action processed through the office of Human Resource Management by performing evaluations, and correspondence in the employee’s personnel folder between the individual employee and any administrative officer of the company.
Monitoring compliance is also a role and a responsibility of the HR department in my work location. Regulatory compliance has become legal and necessary in UPS. Regulatory compliance has become a larger concern for the HR department increasingly as business practices change. Human Resources department takes steps to ensure the company does not run into problems that will affect the integrity and availability of UPS’s workforce. All UPS employees are required to comply with all regulations whether is a work locations procedures or legal regulations. Many of the procedures the HR department has to enforce are for example; all employees are requiring to comply with all dress code regulations such as, identification, boots for safety, and uniforms for all fulltime drivers. But the most critical is the legal regulations like, not working under the influence of any legal/illegal drug, harassments, assaults, like fights among employees, etc. The HR department must monitor all employees to comply with the regulatory procedures
Summary and Evaluation
The human resource department of the organization contributing to the fulfillment of its mission, objectives, and strategic plan has done this effectively by following the roles and responsibilities for them to be suitable in helping UPS maintain the reputation. Some of the problems of human resources management that have been adequately solved and is still kind of being in the process of being solved is the retaining employees, training, diversity, and recruiting. These are some of the major human resource problems that remain to be confronted and solved. The most desirable solution to these problems would be to make sure that employees are adequately trained and thoroughly exposed to the real work environment. Another solution would include external recruiting to have a set of requirements that are slightly different from internal recruiting particularly for hiring part-time supervisors off the street since UPS is known and praised for internal promoting. This is cheaper and more efficient for the company because the internal employees already know what to expect. But one specific requirement I think they should implement when hiring externally for supervisors is, after the computer training, require them to have another training period where they work hands on instead of shadowing another supervisor. An experienced supervisor should shadow, train, and guide them until they feel comfortable enough to do the job alone unless they. This allows them to get the full-blown experience because a lot of the employees they’ve hired off the street has quit within at least a month due to the amount of stress it caused them. In conclusion UPS Human Resources roles and responsibilities come down to effective human resources management. UPS a company of more than 370,000 employees worldwide, but it is not necessarily the size of our employee base that contributes to our business success. It’s about having the right tools, training, and systems in place to empower UPS employees to provide the best customer service.
Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the Digital Firm (14th ed.). Boston , MA: Pearson.
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Kilgore, T. (2017, February 01). UPS stock suffers biggest drop in 2 years as e-commerce surge is still causing problems. Retrieved April 22, 2018, from http://www.marketwatch.com/story/ups-stock-suffers-biggest-drop-in-2-years-as-e-commerce-surge-is-still-causing-problems-2017-01-31