United Parcel Services (UPS)
United Parcel Service (UPS) is a package delivery corporation listed among the largest firms globally. It is an American based company established in 1907 by Jim Casey and Claude Ryan during their teenage years. Initially, the company was known as American Messenger Company. The company functions and operations commenced in Seattle and Washington. Currently, UPS has successfully grown, developed and expanded to be the most famous parcel and package delivery firm in the industry globally. It is considered as a giant leading firm providing package delivery services. More so, it is recognized for utilizing information technologies and systems to deliver services effectively and efficiently. Thus, Innovation and advances in technology have both played a key role in leading the UPS Company to achieve and sustain greater commercial success rates. They both ensure the company undertakes operations and functions efficiently and effectively to meet the set out goals and objectives (Eric, Ankit & Stephen, 2003).
UPS is a firm globally recognized for utilizing both air and ground services to deliver packages and parcels across world regions. It also strives to achieve, maintain and sustain a competitive advantage in the package delivery industry. Thus, it is vital for the firm to develop and implement information and technology systems capable of providing the best delivery services at reduced price rates. This ensures loyal clients at the UPS Company are able to access and afford package delivery services immediately, anytime, place and region in America and globally (James, 1999).
UPS utilizes DIAD, UPSnet and COMPASS technologies with unique features to deliver packages to clients. It faces competition from firms such as Airborne Express and Federal Express. However, it strives to maintain and sustain advanced information technologies against competitors. Consequently, it strives to undertake human resource management practices superior to the competitors. Thus, the company has successfully managed to achieve the top and leading positions. This is mainly concerning supply chain management and freight services on package and parcel delivery. The company operations and functions are sustainably undertaken and managed among over two hundred global countries. It has hired, trained and retained over two hundred thousand employees. They consist of drivers using company vehicles to deliver packages and parcels. It also employs package and parcel handlers tasked in ensuring clients receive their products in good condition within the stipulated period (Muhammad, 2011).
When the company was established, the only listed human and capital assets were two bicycles and a phone. The founders of the company utilized them effectively and efficiently in efforts to develop huge infrastructures. They ensured the infrastructures satisfactorily met and fulfilled company goals and objectives. Thus, they utilized the little firm infrastructures to deliver packages at reduced rates while achieving the best service. Currently, the company has employed over three hundred thousand employees. They are distributed among over one thousand operating facilities in the world. Parcels and packages are delivered using company vehicles comprising of vans, package cars, tractor-trailers and aircrafts (James, 1999).
UPS Historical Overview
UPS was established with growth strategies emphasizing on competency, alliances and acquisitions. Thus, the company applied adjacent business management techniques to create new subsidiaries. The subsidiaries were successfully developed into branches and units complimenting core business values, principles, goals and objectives at UPS. The company ensured employees recruited, hired and trained were mainly industrial engineers. Employees were required to possess talents and skills on package delivery procedures. This requirement in hiring practices at UPS ensured operations and functions in the company would be delivered effectively and efficiently (Eric, Ankit & Stephen, 2003).
In 1913, the UPS Company utilized consolidated delivery and packaging services to solve particular issues hindering delivery of services at the company. As earlier asserted, the company was initially known as the American Messenger Company. However, the United Parcel Service (UPS) brand name was officially adopted in 1919. The company also constructed a conveyor belt system tasked in handling parcels and packages in 1924. In 1929, it was listed as the first service company to deliver parcels and packages using air. Private airline operations ensured clients were able to receive their packages faster, effectively and efficiently. During the following year, UPS Company expanded operations to east coast areas including New York. In 1975, it was the first package delivery company capable to serve over forty-eight States in America. Ten years later, it commenced international air service operations. These operations ensured packages and parcels were delivered to six European nations. However, UPS Company began operating its own airline after three years (Eric, Ankit & Stephen, 2003).
This further facilitated the company to develop electronic tracking systems about ground packages in 1992. In 1994, the United Parcel Services Company online tracking software was developed. It provided a receiver’s details including an image, contact details and the signature on a real time basis. The software was however advanced in 1996 to enable the calculation of rates and tracing transit time lines. Shipment of packages and parcels in the company were therefore calculated, transited and delivered through digital wireless devices within United States. In 2002, UPS Company had witnessed growth, development and expanded internationally. This enabled the company to undertake international hub operations concerning delivery of packages (Eric, Ankit & Stephen, 2003).
The international hub operations consolidate collection of packages. It also monitors traffic conditions in air and road to ensure optimal paths are utilized during delivery operations. The DIAD technologies capture information on each parcel to be delivered before they are assembled to the nearest distribution center. Although the company records high success and performance rates, it has faced different and diverse issues. However, it has grown, developed and expanded due to impeccable human resource practices (Eric, Ankit & Stephen, 2003).
Human resource management practices can either steer a firm to failure or success. UPS Company has ensured human resource management practices steer the company to success. For a long period, the UPS Company has been listed among the leading delivery and shipping firms in the world (Eric, Ankit & Stephen, 2003). This can be attributed to the impeccable, effective and efficient human resource practices. Human resource managers at the company have integrated practices to ensure the firm hires employees capable of meeting the set out goals and objectives. It is also important for human resource managers to solve issues and challenges at the company. More so, they ought to ensure they do not re-occur in future. Thus, integrating advanced technologies has differentiated UPS Company from other delivery global firms. Clients and commercial entities acknowledge UPS as a reliable shipping and consulting firm. They all depend and trust UPS Company will deliver products in time at any region in impeccable conditions.
HR Practices at UPS
Various human resource management practices are integrated at the UPS Company. UPS Company was the first delivery firm to provide money back guarantees on shipments. This was based on the company’s efforts in delivering packages within the stipulated time. More so, the clients had to receive the packaged parcels in good condition. This provision was established to reduce complains among clients. Clients complained they were receiving their packaged parcels in poor conditions. For example, fragile products would be broken due to mishandling. Consequently, food and perishable products would not be delivered in due time to conserve and preserve their conditions. Thus, the company had to ensure delivery times are improved. More so, it had to ensure tractors, trucks, aircrafts, vans and modes of delivery were equipped to handle fragile and preserve perishable products (Muhammad, 2011).
The firm asserts it derives strengths from company employees. In December 2012, the company recorded over three hundred and ninety thousand employees. Over three hundred thousand staffs are employed in United States while the rest are distributed internationally. A management team at UPS Company comprises of at least seventy one thousand employees. They are hired on either a part-time or a full-time basis (Scott, 2012).
Company employees are hired under the National Master Agreement. Supplemental Agreements are also implemented with local unions associated with International Brotherhood of Teamsters. Approximately two thousand six hundred pilots are hired at UPS Company. They are hired under a collective bargaining agreement with Independent Pilots Association (IPA) amended in 2011. The Teamsters Local 2727 covers airline mechanics. Ground mechanics are however employed under International Association of Machinists and Aerospace Workers (IAM). Thus, UPS employs mechanics under different contracts and diverse provisions. The company Chief Executive Officer (CEO) is known as Scott Davis. He asserted the company strives to employ staffs with over twenty years experience on service delivery (Swier, 2013).
Consequently, the company strives to maintain a cordial relationship with employees. Thus, surveys are conducted regularly to determine levels of job satisfaction among company staffs. The surveys also provide an opportunity for employees at UPS to highlight various issues and challenges affecting their jobs. Employees are encouraged to discuss the challenges they face at the company workstations. The listed areas, issues and challenges are presented to company managers. Human resource managers at UPS are required to pay attention on the listed issues and challenges. They ought to derive applicable and acceptable solutions. The solutions should ensure employees at UPS are happy, safe, healthy, motivated, properly remunerated while working at UPS and satisfied (Muhammad, 2011).
The UPS employer of choice program was established in the firm to recognize and award the best performing employees. It also promotes diversity and corporate citizenship among employees. Self- insurance and high-deductible insurance programs are established at the company. They solve insurance risks among employees. Scott Davis asserts the company acknowledges employees face various risks while delivering services to clients. It was therefore important to establish insurance programs. They address the natural risks employees are likely to face while working at UPS. Global servicing operations undertaken at UPS expose employees to various natural risks. These risks include lost cargo, incurring personal injuries, damage of company properties and other liabilities concerning aircrafts, vans, motor vehicles and company infrastructures. Damaged infrastructures often interrupt company functions and operations (Scott, 2012).
Actuarial estimates are applied to determine, calculate and estimate aggregate liabilities incurred in the company. The incurred liabilities are gathered, accrued and presented as reports and claims on undiscounted rates. The company has hired managers with skills and knowledge on insurance reserves. They are tasked in accruing the presented reports before choosing the high variable claims worth to be compensated. They are tasked in ensuring risks at the company are gradually reduced. Their responsibilities are aligned to financial conditions at the company. The financial aspects at the company strive to increase revenues, share values, profits and earnings while reducing expenses and costs. Thus, it is vital to reduce financial costs incurred in compensations and insurance cover program claims. More so, the company believes losing the ability to self-insure internal risks can increase costs incurred through insurance cover programs (Muhammad, 2011).
Issues Arising from the HR Practices
The training program at UPS is managed by Teamster. It is provided on a voluntary and daily basis for a period of one hour. The trainers from Teamster are paid fifty cents for every hour they spend at the training program. Employees qualified to attend the training program include drivers, pilots, marketers and financial experts as well as senior and junior staffs at the company. However, various issues can arise at the UPS training program. The company reserves the right to choose trainers from Teamster. Thus, it can be devastating for employees already enrolled in the program if the company chooses to employ new trainers. Firstly, the cordial relationship existing between employees and trainers is broken. Extra time and financial resources are utilized in order for employees to develop trust with new the new trainers. Thus, it can incur the company extra and unnecessary costs through the training program (Swier, 2013).
Scott Davis asserted mechanics are hired under different and diverse contracts and agreements. He also affirmed they attend the training program for the same period. However, they are employed at different levels and remunerated diversely due to differing contractual terms and agreements. Some employees may find this aspect unfair and equal. This is because, it does not seem fair for a person hired at the same time, undergone the same training program and tasked with similar responsibilities to be remunerated either more or less. Most strikes among organizations are based on remuneration issues. The strikes and go-slow approaches applied by employees often disrupt operations and functions in the organization. UPS should prevent these strikes as they can incur the firm costs and expenses in repairing damages caused during the strikes (Scott, 2012).
The information technologies and systems at the UPS Company are interrelated. Trained personnel with technical knowledge and skills manage them. However, various technical issues arise at the company. They disrupt operations and functions undertaken in the entire UPS Company. The interrelations facilitate issues experienced at marketing department to affect operations within financial, logistics, production and manufacturing departments. Company clients mainly receivers are free to sue the company for loss and/or damage of products. For example, the company faced an administrative investigative case in Brazil in 2010. This was based on allegations that the company had practiced anticompetitive behaviors within the freight forwarding industry (Muhammad, 2011).
The firm had to hire highly qualified and skilled professionals in law to address the allegations and investigations. Thus, the law cases and suits incur the firm huge costs to address and solve the issues. Technology infrastructures play a vital role in ensuring the UPS undertakes service delivery operations effectively and efficiently. Thus, issues, challenges and failures with regards to technological infrastructures can affect the company’s operations adversely. For example, packages can be delivered late. Consequently, packaged parcels can be delivered to the wrong receiver costing the company its reputation and lawsuit costs (Muhammad, 2011).
Techniques and Strategies to solve HR issues
Financial Accounting Standards Board developed and issued new Accounting Standards Updates and requirements. UPS ought to adopt them in order to disclose fair values and measurements through company financial statements. Utilizing GAAP and IFRS accounting techniques at UPS can ensure financial issues and challenges at the company are reduced and eliminated. The accounting techniques address tax returns, employee benefit plans, contractual and bargaining agreements and commitments. Thus, they can reduce lawsuits from employees likely to sue the company. This is because employees at the company are likely to sue UPS for unfair and unequal employment contracts and agreements with regards to diverse remunerations. They should acknowledge and accept the accounting procedures utilized in the company to determine remunerations (Scott, 2012).
Teaching staffs on tax management, budgeting, financial analysis and cost recovery techniques and skills can improve accountability and project management. Thus, the training program ought to adopt techniques aimed at providing skills at reduced costs and expenses. For example, the company can develop a training program lasting longer than an hour per day. This can ensure trainers offer extensive knowledgeable techniques and skills among attending employees at reduced costs. However, the program ought to ensure employees develop commercial, business and management equally (Lea, 2005).
Commercial skills among drivers, pilots and engineering specialists as well as supervisors prepare them to deliver newly innovated skills and system technologies. However, it is crucial to train company employees to utilize newly innovated technical systems. This ensures employees and technology systems jointly achieve the intended goals and objectives within the company. Business skills are offered among employees in sales and marketing departments. The skills include proper ethics on formulating marketing concepts, decisions and policies. They include segmentation, positioning, consumer behaviors and market targeting (Scott, 2012).
However, the training program ought to teach employees negotiation skills and strategies while meeting, sustaining consumer needs, wants, and desires. It is important for employees and the firm to develop and sustain cordial relations with clients. Thus, it is important for employees to acquire, develop and improve listening as well as conflict resolution techniques and skills. They can protect the firm from law suits, allegations and administrative investigations (Scott, 2012).
Management skills are provided to managers and supervisors. The staffs are taught to utilize technologies and procedures aimed at improving service delivery and customer relations. However, it is vital to train them on social skills, responsibilities and sustainable corporate social roles. These skills can play a key role in solving internal and external issues within the company. Consequently, they can reduce company costs utilized in solving internal and external issues though judicial systems (Lea, 2005).
Lastly, the company should continue undertaking corporate
social responsibilities. This builds company reputations while attracting new
clients. These responsibilities include undertaking projects to clean the
environment. They also include employing local members to reduce the rates of
unemployment. This can further reduce crime rates among global societies. More
so, it challenges competing firms to undertake similar corporate social
responsibilities. They build and develop better global societies suitable to
undertake commercial and social activities. Thus, human resource management
practices at UPS are diverse. They address social, economic and legal issues at
the company (Muhammad, 2011).
Eric, O., Ankit, P., & Stephen, D. (2003). United Parcel Service: Brief History, United Press International Report.
James, P. K. (1999). United Parcel Service: Moving at the Speed of Business, United Parcel Service Report.
Lea, S. (2005). Engaging Employees in Company Success: The Ups Approach to a Winning Team, Human Resource Management Journal, 44(1): 95- 98.
Muhammad, R. B. (2011). IT and Competitive Advantage of United Parcel Services (USA), Directory of Management e-Publications, 1(1): 1-9.
Scott, D. (2012). We Shrink the Globe: UPS Annual Report, United Parcel Services Annual Financial Report.
Swier, R. (2013). United Parcel Service (UPS), Inc., International Brotherhood of Teamsters Report.