Xiamen Airlines: Pay for Performance

Case Solution

Wenhua Wu, Ann Peng, Gerard Seijts
Ivey Publishing ()

On June 6, 2014, the Deputy General Manager of the Human Resources Department of Xiamen Airlines, based in Xiamen, Fujian Province, China, discussed his company’s “best practices” at the first China National Forum on Aircraft Safety. aviation. Since 2009, a major reform of the company’s pilot compensation system has been aimed at promoting a stronger link between salary and performance. The first results were positive, with higher productivity and job satisfaction. However, due to the growing shortage of qualified personnel in the domestic and global aviation job market and increased competition from both state-owned and new private airlines in China, there have been ongoing challenges in recruiting and retaining. of pilots. How did Xiamen Airlines become a preferred employer? Was the high compensation sustainable if the industry became less profitable? What else could the company offer to keep talented pilots?

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