Case Study-2

Air Nuigini- national carrier of Papua New Guinea used to pay more than double the salaries to expatriate pilots compared to that of national pilots. In fact national pilots are in no way inferior to expatriate pilots in skills and in performance in safety, regularity and punctuality. The salary discrimination was necessitated to attract foreign pilots due to shortage of national pilots. This practice was along with polices and practices of compensation management in other public and private organisations in Papua New Guinea. These practices resulted in the dissatisfaction among national pilots that prompted them to look for opportunities in other countries. The fast growth of airlines industry in various countries led to shortage of pilots resulting in higher salaries for pilots across the countries.

Majority of the pilots of Papua New Guinea (PNG) who are dissatisfied with the salaries in Air Nuigini based on skill levels and performance records procured jobs in various airline companies particularly in the middle-east with triple the salary levels of their previous jobs in Air Nuigini. In fact, one of the former national pilot of Papua New Guinea got the job of the Deputy CEO of one of the middle-east airline company. The migration of PNG pilots reached the peak level in April 2008 and ultimately Air Nuigini did not have required number of pilots to operate their flights and Air Nuigini had to cancel some of its domestic flights and delay the operation of international flights, resulting in halting the wings of Air Nuigini flights. Consequently, Air Nuigini modified its compensation policy and offered equal salary levels to its national pilots along with that of expatriate pilots to combat the situation.

However, it could not attract those pilots who left the company, but could halt the further migration of pilots to other companies.

Questions for Discussion

I. Do you think the compensation discrimination based on the nationality is desirable? (1Mark)

2. Why did the management of Air Nuigini failed to foresee the situation? (2Mark)

3. Suggest the strategies to prevent such situations in future and in other organizations in various countries that differentiate the salary. (2Mark)