UNIVERSITI TEKNOLOGI MARA (UiTM), SHAH ALAM

FACULTY OF COMMUNICATION AND MEDIA STUDIES

BACHELOR OF MASS COMMUNICATION (HONS.) PUBLIC RELATIONS

CORPORATE PUBLIC RELATIONS (PRO541)

TITLE:
INTERNAL RELATIONS IN AIRASIA BERHAD

PREPARED BY:
NUR SYAZWANI BINTI SHAHARUDIN 2020989541

NURUL ATIKAH BINTI SARJI 2020961393

CHE WAN NURFATIN’ AQILA BINTI CHE WAN ZUHAINI 2020983213

SARAH NUR SYIFA BINTI MOHD SYAFIQ 2020989605

FARID IZZUL BIN ISMIL 2020989765

CLASS:
MC242S3D

PREPARED FOR:
DR. MANIMEGALAI AMBIKAPATHY

SUBMISSION DATE:
11 JANUARY 2021
TABLE OF CONTENT

NO. CONTENT PAGE

1. EXECUTIVE SUMMARY 2

2. INTRODUCTION 2-3

3. KEY ISSUES 4

4. GOALS 4

5. PR STRATEGIES AND TACTICS 5-8

6. PREDICTED OUTCOMES 9-10

7. CONCLUSION 11

8. REFERENCES 12-14

9. APPENDICES 15-16

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1. EXECUTIVE SUMMARY

Internal communication is significant for an organization. Communication between

employees and employers should be smooth and to avoid any misunderstanding. However,
recently the AirAsia, which is the leading aviation company in our country are also affected by the
COVID-19, which gives impact on their internal communication. The employees are expected to
receive a temporary pay reduction between 15 to 75%. These affected the employees attitudinal
and behaviour that lead to poor morale and performance. AirAsia needs to enhance the
communication to gain the employees' confidence. These plans are to ensure the employees are
continuously productive and motivated to work, prevent any further internal conflict, and boost up
internal relations to gain trust from the employees. AirAsia might consider increasing the
employer's involvement in the company, creating a better relationship with the committees, and
understanding employee’s needs. These can be achieved through effective communication
through specific platforms, training programs for the workers, team building activities among co-
workers, and employee-oriented publication. Through the strategies and tactics that are used, the
predicted outcome is when employees are continuously productive and motivated to work,
prevent any further internal conflict, and boost up internal relations to gain trust from the
employees.

2. INTRODUCTION

Internal communication is a division of public relations within a corporation or agency that

deals with communication. Internal communications should be the biggest part of a company's
PR plan. The internal communications plan and crisis support services are highly significant to
the short-term sustainability of an organization. Internal communication programs, however,
which have been strategically developed, can and should be used for more than handling
emergencies to strengthen internal relations among the employees. It consists of newsletters from
employers to employees, company emails, intranet memos, company website updates, revisions
of policy handbooks, F.A.Q, or even staff, and executive bios.

Also, every company or organization should recognize the importance of having an

ongoing dialogue with their workers, these dialogues can produce valuable employee input with
the correct strategies and tactics (Mireles, 2015). This could help to promote a sense of belonging
and engagement in the business. By having this internal communication, messaging must be
clear, simple, succinct, and suitable. However, there are many internal communication issues and

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challenges that mostly happen in any company or organization such as, lack of engagement by
the employees, communication inconsistency between employees and employers, lack of
feedback by the employees, lack of knowledge sharing, and many more.

AirAsia Berhad is a low-cost airline company founded in Malaysia in 2001 which began as
a low-cost carrier with domestic flights in Malaysia and internationally in Indonesia, Thailand,
India, and the Philippines. Today, it has carried over 600 million guests to more than 160
destinations in its network across Asia, Australia, the Middle East, and the United States. AirAsia
has grown as a top airline company in Asia as it also provides services such as hotels, holidays,
online shopping, and digital financial services. With their main mission to allow everyone to fly,
AirAsia has been delivering world-class service at low fares.

Situation Analysis

However, the company, which is leading the aviation industry in our country, is also
affected by issues or challenges that bring a huge impact on their internal relations. It mainly
occurs because of the ongoing COVID-19 pandemic which is “an infectious disease caused by a
newly discovered severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) from Wuhan,
China” Gorbalenya, A. E. (2020). Besides, Kumar (2020) stated that AirAsia has to counter a cash
flow crisis triggered by the pandemic by reducing their staff salaries up to 75% in an attempt to
save the company. According to Channel News Asia (2020), the Chief Executive Officer of
AirAsia, Tony Fernandes has mentioned in an Instagram post that the employees "have accepted
temporary pay reductions of anywhere between 15 to 75%, depending on seniority, to share the
impact this is having on our business".

These wage cuts that affect employees’ “attitudinal and behavioural change tends to lead
to low morale and poor performance” (Wang & Seifert, 2017). Plus, Kube, Maréchal, & Puppe
(2010) founded that wage cuts can lead to a severe impact on employees’ productivity which
“remains large and significant over the course of the entire working period”. Hence, it shows that
AirAsia employees would be demotivated when experiencing pay reduction during the economic
downturn due to the pandemic that badly affected the company. It also might lead to employees’
lack of trust in the top management. Thus, the employers of AirAsia need to boost the internal
relations as an effort to improve the employees’ productivity and gain trust from them.

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3. KEY ISSUES

AirAsia Berhad, reducing their staff salaries up to 75% as an attempt to save the company
due to the COVID-19 pandemic. During the economic downturn, wage reduction of salary has
occurred due to the pandemic that badly affected the company. By having this issue, it may
contribute to the lack of confidence of workers towards the top management. To increase the
productivity of workers and gain confidence from them, AirAsia needs to enhance the internal
communication between the employees and top management. AirAsia Group Chief Executive
Officer Tan Sri Tony Fernandes said that, given the reality of the aviation sector that was facing
difficulties in recovering in the near future in which the decision to reduce the salaries of the
employees is decided.

4. GOALS

● To ensure the employees are continuously productive and motivated to work in the
company despite the pay reduction.
● To prevent any further internal conflict regarding employees’ dissatisfaction of their pay
reduction.
● To boost robust internal relations by gaining trust from the employees and showing high
concerns towards them amidst economic downturn that affects the company.

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5. PR STRATEGIES AND TACTICS

5.1. STRATEGIES

5.1.1. Increase productivity of employees and employers in the company

According to Wang & Seifert (2017), productivity can drop on average by more than 20%
when employees experience a wage cut. This may lead to the employee becoming demotivated,
isolated, or ostracized from the organisation that they may not be able to consider changes in the
corporation. Hence, AirAsia should consider understanding the employees' attitudes and values
of the workers to ensure an increase in productivity. For instance, AirAsia should conduct
programs to elevate the productivity among the employees such as through training programs
and team-building activities. Also, Palmer (2014) mentioned that through team building activities,
the employees can bring out their best performance, which leads to an overall improvement in
productivity. By acknowledging the employees’ quality of work in the company through these
programs, the employees in AirAsia, together with the top management can increase the job
efficacy in the organization. Any changes inside the company will allow an increase in productivity
and could eliminate unnecessary factors, such as enhancements to the performance of the
company's structure. For example, Apple hires the best brains in the world to come out with
innovative products and they fully depend on their employees since each one of them has their
expertise (Yarow, 2012). Hence, AirAsia could apply the same strategy to improve the employer’s
engagement and in the company.

5.1.2. Encourage two-way communication to prevent internal conflicts

Top management in a company needs to listen and recognize their passion for their role
in the company. The incorporation of ideas exchanged by workers towards top management will
improve the company's bond by sharing ideas and have two-way communication through internal
communication channels to prevent internal conflicts. This is because pay cuts can lead to
conflicts and dissatisfaction among the employees towards the top management. As Sunil (2020)
stated, in Malaysia, a recent survey by JobStreet shows that 48% of respondents have faced a
negative impact on their salaries and remuneration in which employees working for small and
medium organisations had also rated their job happiness as lower because of the salary
reduction. Hence, when the employees are unhappy with their salary reduction, this can raise
internal conflicts in the company. Also, based on the problem that occurs in AirAsia, top
management should encourage the workers to accept the pay cuts because it is the only way to

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make sure that the company survives during the pandemic by having online meetings between
the top management and employees. Workers are overwhelmed and find it incredibly difficult to
achieve results under those situations. For instance, the company can use the intranet as a
platform to communicate and create a better relationship with the employees. AirAsia has their
own intranet platform which is airasia.newsroom that updates on news and information regarding
the organization. Employees are pleased that bosses have a close relationship with them. They
feel like being here to work every day, facing problems with a smile, and always striving to get
their company to its top. Kept the workers to the company as responsibility. Comprehensive
surveys specifically revealed how workers perceived corporate communications and aided
management in designing potential communications approaches ("Recruiting, Motivating, and
Keeping Quality Employees", 2021).

5.1.3. Create a better relationship and gain trust from employees

“Employers are required to consult with employees before making certain changes to their
employment under various industrial and employment-related instruments which govern
employment relationships” (Tobin & Garnett, 2020). However, when AirAsia implements pay
reduction during the COVID-19 crisis, the employees will feel that their trust is stolen by the
organization. Hence, the top management in AirAsia should consider their internal stakeholders
as a person, not a product, by providing a safe place for them to share the company's lack: the
more the ideas, the more depth of work. This is because the more feedback they received, the
better the company would be. For instance, the company can conduct a digital consultation
session for the employers and employees to communicate and create a better relationship with
each other. While they gather, they can exchange experiences, struggles, and successes. This
can motivate them to be stronger together and support each other. A great relationship is
established when the employers successfully engage the leadership with the employees through
interpersonal communication to gain trust. To create a better relationship and gain trust that is
mutually achieved, AirAsia must establish internal communication efforts that focus on employees
and also can help the employers to achieve the company’s desired goals. As in AirAsia, their staff
are outnumbered to be monitored by the top management, hence creating a focus group in
consultation sessions can help the employers to uncover the sentiments of employees from time
to time. This can be seen in the FashionValet company where they never missed having a
recapitulate session together in the office by presenting the achievements of everyone throughout
the year to maintain relationships with employees.

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5.2. TACTICS

5.2.1. Training programs for the workers

Due to the decreasing productivity from the pay cuts, AirAsia management can construct
training programs for the employees to participate to boost it back. The programs could be in any
form such as investment courses, IT courses, and marketing courses which can boost productivity
among the employees. Eventually, this will produce an outcome that will make the employees to
be more productive and motivated to work in the company despite the pay reduction at work. As
for an example of current well-known company McDonald's, they are known for sending their
employees for training programmes for the position their employee applied for, this is proven that
training programmes for employees is one of the tactics suggested for internal communication.
This can be found on their website, which is on McDonalds website (refer Appendix 1), also can
be found in the Maxis Annual Report 2016.

5.2.2. Effective communications through specific platforms

As mentioned earlier, allowing them to voice out their inputs or opinions could enhance
their engagement in the company and dialogue throughout the company. This effort could be
made by creating a digital consultation session that is similar to a post-mortem for each
department or team at the end of the week to discuss and avoid further internal conflicts in the
company. Some problems cannot be handled by a single person to solve, it requires cooperation
from the team. This would be a chance to manage it. Regardless of these new COVID-19 norms,
the session could be done virtually through some platforms such as Discord or Zoom. In this case,
AirAsia should conduct many virtual consultations to make sure all the employees truly
understand and know how to handle the pay reduction and company economic crisis. For
instance, a media company Media Prima practices consulting sessions in their company, this can
be found on Media Prima’s Sustainability Report 2019 (refer Appendix 4). This proof that creating
a consultation session amongst employees is crucial for a company to move forward. Other than
Media Prima, Carlsberg (refer Appendix 5) also did the same thing as stated in their Annual Report
2019, they have their internal audit department and are more detailed on how they handled this
kind of initiative. Both of these companies actually care for their employees.

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5.2.3. Team building activities among co-workers

Otherwise, the organization can also conduct team building activities to initiate a better
relationship with the workers, hence, they are more comfortable to share any thoughts and
disagreement about the company to improve the flaws as much as they could. Due to the problem
that occurs on AirAsia which is pay cut among the employees, this problem can lead to a decrease
in work performances among the colleagues, hence team building is the solution which can help
to motivate everyone in the company for a better quality of work by exposing their expertise and
resolving any flaws. Having to work in a group allows workers to take on management positions
and observe their teammates perform their duties. Not only boosting productivity, “Effective team-
building exercises help cultivate trust, support, and respect among the group, positively affecting
the work environment” (Bawden-Davis, 2013). Hence, to achieve the objectives, committees need
to find agreement before coming to a decision. Team building is also known for effective
communication as a big telco company Maxis also did it with their employees as this tactic is
known for it engage employees and employers to be more friendly in a professional way. This can
be found on their Annual Report 2016. Besides, KFC (refer Appendix 3) and Sani Express (refer
Appendix 2) are also doing this in their companies according to their EMIS Report 2019/2020 and
for KFC it is stated in their KFC Unlocking Potential Annual Report 2019.

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6. PREDICTED OUTCOMES

As for predicted outcomes, it all depends on the execution of internal communications and
it has a fifty-fifty chance either it will be effective or non-effective at all. In this case, taking the
strategies and tactics into account. This might boost a positive effect in internal communications
amongst employees and employers as internal communication is the key for a company to hold
onto itself from crumbling down on the inside of the company. A positive effect in internal
communication is interaction, the effectiveness of communications through specific
platforms. AirAsia implements pay reduction towards their employees and as for in this case the
company AirAsia, AirAsia could use their intranet which is RedIcons where this channel can
strengthen bond and relation between employer and employees to avoid miscommunication and
to reinforce the effectiveness of communications through specific platforms. A recent study found
that intranets are highly important for socializing new employees in the organisation and serve as
an organisational knowledge tool to employee commitment (Chu & Chu, 2011). Through this
intranet that is created for the employees, it has become easier for the top management to receive
feedback from the employees to improve their services. Platform that is special for the employees
is not something new because other companies also have their intranet for their employees. For
example, Keretapi Tanah Melayu Berhad (KTMB) and Universiti Teknologi MARA (UiTM) have
their own intranet systems for their employees.

Also, AirAsia is expected to boost employee engagement through the digital

consultation session as it can boost employee engagement. “Enabling employees to
understand how strategic goals relate to their own work is the most important driver of employee
performance” (Bryan, 2019). Hence, it will result in an effective communication flow between the
top management and employees, which can avoid misunderstanding. This can help to bridge the
gap as the employees can understand better about the reasons for their pay cuts and they can
address their rights to the upper management, which will lead to a mutual agreement for both
parties. Digital consultation sessions could help the employees and employers through two-way
communication to clear out any misunderstandings or worries from the employees or employers.
These days COVID-19 the most effective way for AirAsia to communicate easily through digital
such as Zoom, Discords, or Google Meet. Through the digital consultations’ session, the company
should focus on two-way communication which the employers must plan to have more discussion
rather than presentation of the content. Include reflection questions for the employees. People
learn the best when they engage and contribute. For instance, this technique is used by Square,
a successful publicly traded payments company based in San Francisco also started to use the

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technologies to keep in touch with the employees through Zoom, Google Hangouts (Kelly, 2020).
Twitter and Proletariat, Inc. also used the same method to maintain the communication between
employees and employers since the pandemic most of the organization required their employees
to work from home.

Also, through the suggested tactics such as team building activities, AirAsia is expected
to enhance good communication between the employees and employers by increased
productivity and ensuring clear work objectives and a climate of cooperation and collaborative
problem-solving. Through the team building program, the feedback from the employees is vital to
be heard to prevent any further conflict, such as riots or boycott, from happening in the
organization. As Umoh (2018) stated, Neal Hartman, a senior lecturer in managerial
communication at MIT Sloan School of Management, suggested that the employees’ feedback in
any communication program must always be ongoing. Through the team building program, it can
enhance the level of trust and support (Fapohunda, 2013). Not only that through team-building
programs diverse co-workers also work together and there are increasing levels of job satisfaction
and commitment. For example, Uber, Disney, Volvo, Adidas use Catalyst Team Building which is
a team-building organization to help organize activities for their team building program (B, 2017).
These big companies use team building activities to enhance the communication between the
employees and employers which gathers employees to work together in doing fun activities so
that the employees are stronger together.

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7. CONCLUSION

To recapitulate, internal communication is a vital aspect in a company as it determines to

break or create an organization as a family. The success or failure of the company depends on
their internal communication as internal communication acts as a glue in a company. Hence,
AirAsia must always ensure to enhance their communication process between the top
management and employees to create robust internal relations in the company. Although the
employees’ salaries are reduced due to the economic downturn and pandemic crisis, it is vital for
the employers to continuously build mutual trust with each other.

Hence, through the suggested strategies, it is crucial for AirAsia to increase the
productivity of employees and employers in the company after they have to experience the salary
cuts. Also, the top management must encourage two-way communication to prevent internal
conflicts with the employees. Other than that, by establishing a better relationship and gaining
trust from the employees, AirAsia can ensure the company’s goals are successfully achieved.

The tactics, such as the employers provide platforms for effective communication process
(digital consultation session), training programs, and team-building activities are also significant
for the employers and employees to boost the internal relations and effective communication
among them. These initiatives also can help them to promote productivity and motivation, besides
preventing internal conflicts from happening in the future.

In a nutshell, the top management of AirAsia must often prioritize the importance of internal
relations and appreciate the employees to ensure they become more motivated to work in the
company despite the pay cuts. It is also vital for the employers to provide a platform or program
to communicate effectively for the employees to voice out their dissatisfaction or opinions in the
organization.

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8. REFERENCES

Abdallah Alshawabkeh, J. R. (2018). Enhancing internal communication in organisations using

enterprise social networking . International Journal Economics and Business Research,
74-75.

B, L. (2017, 07 07). The Aspiring Gentleman . Retrieved from The Aspiring Gentleman :
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eam%20activities.

Bawden-Davis, J. (2013, September 26). Team Building Exercises That Boost Productivity.
Retrieved from American Express: https://www.americanexpress.com/en-
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Berhad, B. D. (2019). Annual Report 2019. Alor Setar: Bina Darulaman Berhad.

Bros, S. (2019). Annual Report 2019. Bayan Lepas: Sinaran Bros Sdn Bhd.

Bryan, J. (2019, January 4). Gartner Top Priorities for Corporate Comms Leaders in 2019.
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Channel News Asia. (2020, April 12). Malaysia's AirAsia founders not taking salary; staff members
accept up to 75% pay cut. Retrieved from Channel News Asia:
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Chu, A. &. (2011). The intranet’s role in newcomer socialization in the hotel industry in Taiwan –
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Express, S. (2019). EMIS Annual Report 2019/2020. Kuala Lumpur: EMIS.

Fapohunda, T. M. (2013). Towards Effective Team Building in the Workplace. International

Journal of Education and Research , 4-5.

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Hanan Abdulla Al Mehairi, K. B. (2014). Employee Oriented vs. Work Oriented Cultures.
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Holdings, K. (2019). Potential Unlocking Annual Report 2019. Petaling Jaya: KFC Holdings.

Kelly, J. (2020, May 19). After Announcing Twitter’s Permanent Remote-Work Policy, Jack Dorsey
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paid/?sh=97bfe31

Kube, S., Maréchal, M. A., & Puppe, C. (2010). Do Wage Cuts Damage Work Morale? Evidence
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Kumar, P. P. (2020, June 5). AirAsia to slash workforce by 30%, considers 10% stake sale.
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(2016). Maxis Annual Report 2016. Petaling Jaya: Maxis.

McDonalds. (2021, January 1). mcdonalds.com/us/en-us/about-us/franchising/training. Retrieved

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Mireles, A. (2015, January 15). PR and Internal Communications: Changing With the Times?
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Mohamed, K. B. (2019). Media Prima Sustainability Report. Bangsar: MediaPrima.

Palmer, D. (2014, March 28). Why Team Building Promotes Better Company Productivity.
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Sunil, P. (2020, June 26). COVID-19: One-third of staff surveyed in Malaysia faced a pay cut of
more than 30%. Retrieved from Human Resources Online:

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faced-a-pay-cut-of-more-than-30

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9. APPENDICES

(Appendix 1)

(Appendix 2)

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(Appendix 3)

(Appendix 4)

(Appendix 5)

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