HR Best Practices at FedEx, a Best Company to Work For
January 26, 2008 – Business Management Article
FedEx (NYSE: FDX), is among the 100 “Best Companies to Work For” in the US announced by
FORTUNE magazine and the Great Places to Work Institute. FedEx (the largest employer in
2008 list and only shipping company included) now figures in this list in 10 of the past 11 years
after being named to the “Best Companies to Work For” Hall of Fame in 2005. FedEx was
ranked as 97th overall. FedEx already has a reputation of being one of the most employee-
friendly companies in the world.
A History of Employee Commitment at FedEx
The history of FedEx goes back to 1971, when Frederick W. Smith felt the need for an airfreight
system which could deliver documents overnight. He decided to setup his own company to
effectively serve this need. Smith always believed that since FedEx was essentially a service
organization, employees were largely responsible for ensuring success.
FedEx was incorporated as ‘Federal Express Corporation’ in June 1971 at Little Rock, Arkansas,
US. Since it began in 1971, its’ management focused on providing a suitable work environment
that encouraged employees to come up with innovative solutions. Such was the commitment of
the employees to the company that, when FedEx was going through severe financial difficulties
during the first couple of years, the employees were prepared to sell their personal belongings.
They were also prepared to use their own credit cards to purchase fuel to deliver the packages to
the customers. Even when the employees didn’t receive their salary on time, they continued
working with FedEx.
Human Resource Management (HRM) Best Practices at the FedEx
FedEx has developed several innovative human resource programs over the years. These
programs have served as a benchmark for many companies.
FedEx’s ‘People-Service-Profit’ (PSP) philosophy
In 1973, Founder and CEO, Smith had developed and implemented FedEx’s ‘People-Service-
Profit’ (PSP) philosophy. This philosophy was based on the fact that if FedEx took proper care
of its employees, they would provide efficient service to the customers. This in turn would
benefit the company by generating more profits.
Survey-Feedback-Action Program or SFA Program at FedEx
The SFA program (a key employee relations and satisfaction program) helped management take
decisions regarding romotions. From its inception, the SFA was administered manually, but that
changed in 1992 with the introduction of online survey system in the US and other automations.
Each April, every employee is asked to participate in the on-line survey. After the results are
gathered, managers hold feedback sessions with their employees to discuss the survey findings
and identify problems within and outside of their department.
Leadership Evaluation and Awareness Process’ (LEAP)
In 1988, FedEx devised a program known as ‘Leadership Evaluation and Awareness Process’
(LEAP) to encourage non-managerial cadre employees to move to the managerial level within
Employee Communication Program
The employee communication programs implemented by FedEx included the SFA program,
Guaranteed Fair Treatment Procedure and Open Door Policy. FedEx also devised a mechanism
to address and resolve employee grievances. This was apart from employing a formal
communication system to inform employees about the major events taking place in the company.
Job Change Applicant Tracking System (JCATS)
JCATS is an on-line computer job posting system that allows hourly employees to post for any
Recognition and Reward Program
FedEx rewards employees for their work with awards such as the ‘Bravo Zulu’ and the ‘Golden
FedEx is an example of an organization that has created an effective HR strategy that supports
productivity and profitability.