FedEx Ã¯Â¿Â½ PAGE Ã¯Â¿Â½1Ã¯Â¿Â½
Human Resource and Technological Development in FedEx
FedEx has registered a great improve in its human resource and technological development. In late 2009, FedEx instituted a hiring freeze to eliminate a lot of the compensation benefits to its employees. The part-time employees were no longer allowed to work over 30 hours a week and the full-time employees were only allowed to work overtime once a month at the maximum. FedEx Freight reduced their salaries down 7.5 to 10%. And because FedEx believes so much in their employees and knows they are nothing without them, even the executives took a pay cut. CEO Frederick W. Smith took a 20% base salary cut in 2009 showing that he believes the cut backs are only temporary. But because of these cut backs FedEx has been able to continue growing in new areas and stay the successful parcel shipping company that we have today.
Besides the hiring freeze, pension plan freeze, and pay cuts, FedEx has also put a freeze on the purchase of new vehicles and airplanes, as well as the opening of the new FedEx Office locations. There are certain variable costs that FedEx cannot really control, like the cost of fuel. By making other cost cutting, FedEx is somewhat sustaining control on the effects that the economy has had on the industry. FedEx expects these cuts to save the company $200 million through 2009 and $600 million by 2010 ("FedEx cuts cost despite growth in earnings," 2009).
FedEx's demand of service is based on the demand of consumers for the delivery of the products all over the world. QuickMBA.com (2010) is defined as, "The price elasticity of demand measures the responsiveness of quantity demand to a change in price, with all other factors held constant," (para 1).