Assignment- 1

United Parcel Service (A)

Try to understand how UPS HR system (All HR policies) functions to support

the key deliverables.

The following are the key deliverables/ customer expectations:

1) Fast service
2) Reliable (on time service)
3) Low price
4) Effective Tracking
5) Billing/Computerized
6) Accessibility
The UPS HR system worked in the following ways to facilitate these services:
1) Standardization-
a. They made efficient use of the standardized routes which was
made mandatory by company policy
b. 200 packages in 480 minutes (1 day with 8 working hours)
resulted in 2.4 minutes per package
c. They charged same price irrespective of weight- Prices were
determined by distance and route
d. The routes were defined on the basis of a hub and spoke model
i. At hub there was a 3 hours of shift that mostly consisted of
part-time workers and college students who considered it
as an excellent work-out. There were a total of 120 hubs.
ii. At spokes Package cars used to deliver packages in local
areas- there were 1,200 package centers
2) Licenses and ‘common carrier’ advantage
 a. Licenses and ‘common carrier’ advantage provided accessibility
and low prices which improved customer retention
b. High Route density ensured high accessibility
3) Operations R&S-
a. Loaders and unloaders mainly comprised of College students
(95%)
b. Drivers- both PC drivers and hub drivers were part time workers
and there was no rigorous screening as it was a low-skill job
c. Company followed Chekov rule- By joining the company a person
automatically became a member of the union
d. An incentive for becoming a driver was that a driver could become
a full time supervisor who were considered partners in the
company
4) Accountability and autonomy-
a. The drivers were given a complete instruction booklet on
“Package Delivery and Pickup Methods” and 5 days of one-on-one
training. Drivers were held responsible directly for delay or losing
of package. They were given autonomy in handling abnormal
cases
b. Decentralization- District manager and officer formed a part of a
complete operating group who were given full responsibility for
service and cost within the district
5) Customer service and humility-
a. Company emphasized on functional performance and
discouraged elaborate décor- Humility was reflected in the
attitude of top executives
b. Computerized billing and effective tracking made for seamless
customer experience. Effective tracking was not implemented
initially by UPS but with increasing competition it adopted
effective tracking mechanisms

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 Calculate UPS PC driver's attrition rate as mentioned in the class. One can
make use of the info in exhibit 3 and 4 and some info given on p nos. 8
(car driver's opening) p nos. 11 (part time promotion proportion).

Attrition rate = No. of employees left/avg. no. of employees

# emp. in 1986 = 54,350 (Information on page 11)
# emp. in 1987 = 48,129 (Exhibit 4)
So, avg. no. of employees = 51,240
# emp. in 1986 – emp. left + emp. hired = # emp. in 1987
54350 – emp. left + emp. hired = 48129
Therefore,
No. of employees left = 54350 – 48129 + No. of employees hired
No. of employees left = 6221 + No. of employees hired

To calculate number of employees hired:

As per information on page 8:
Only 10% to 15% of part-timers hired into the package center were
eventually promoted into driving positions. UPS filled 2 slots with
people promoted from the hub and 1 with someone from outside.
So, 10% - 15% of part-timers made up for 2/3rd of the hires, 1/3rd were hires
from outside the firm.
Total part-timers = 62,611 (Exhibit 4, and as discussed in class, all Inside
Manual workers are part-timers)
So, total no. of employees hired = (0.1*62611)*(3/2) = 9,391
So, total no. of employees left = 6221 + 9391 = 15,612
Attrition rate = 15612/51240 = 30.46%

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