Effectively Using an Integrated Employee Engagement Program Marilyn Field University of the Rockies October 3, 2010 Org/8530 Dr. Gary Shelton Abstract A company’s level of employee engagement is a reflection of its core values; while at the same time reflects a fulfilling and positive job-related state of mind that is characterized by the resilience and energy of its workers. The following report is an analysis of a case study conducted by Hallowell (1996) to determine whether Southwest Airline’s organizational capabilities and employee needs are linked to competitive advantage.
An examination of the data presented in the Southwest Airlines study reveals a significant level of employee commitment through the engagement and hiring of workers who fit the Southwest standards. Effectively Using an Integrated Employee Engagement Program For the last several years Southwest Airlines has been awarded as one of the best companies in which to work by Fortune Magazine.
There is an extensive list of awards and achievements attributed to Southwest Airlines including Forbes 2008 most reliable airline, best in customer service, and the number one friendliest airline to fly in 2008 by Time Magazine (Triangle Business Journal, 2008; Time Magazine. com. , 2008). A review of the literature revealed that much of Southwest Airlines continued success is due to their effectiveness in engaging their employees. The Southwest Airline employees reflect the organization’s culture as one with committed workers who strive o maintain the company’s reputation as a leader in social responsibility. A case study was conducted by Hallowell (1996) to analyze the sources of Southwest Airline’s competitive advantage. Hallowell attributes the highly acclaimed airline’s success to the high value place on its employees. Hallowell’s 1996 case study of Southwest Airline was illustrated within a frame work of particular variables with the first being that the airline value is a product of meeting the employee’s needs on a satisfactory level.
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Employee needs satisfaction is a very important variable when one considers that Southwest Airline is comprised of approximately 35,000 employees working together with the aim of flying their valued Customers to their destinations across the United States (69 cities in 39 states) (Kelly, 2010). Hallowell used value analysis to study Southwest’s competitive strategy. Value analysis breaks down which variables play a role in where value is created. It is based on Porter’ (1985) Game Theory, which focuses on how individuals interact (Levine, 2004. ).
The results of Hallowell’s study revealed that employees are motivation from the employer’s encouragement of behavioral norms and organizational values. The second comprehensive variable Hallowell (1996) studied was Southwest’s strategy for having one of the most successful airline stocks. This raises the question as to how employee engagement plays a part in stimulating shareholder’s commitment of investing in Southwest stock. The Southwest Airline’s organizational culture has encouraged its workers to have fun on the job. This is a wellness approach which has led to the company’s high degree of productivity and low turnover.
By suggesting and encouraging a positive experience for the Southwest employees, the management displays significant value for employees, which is converted into customer value and shareholder value. This value earning process forms a circle of capturing value, creating value, and converting value beginning with the employees (Hallowell). With the present economic turmoil, Southwest Airline’s Chief Executive Officer Kelly has had to make recent cuts; affecting the company’s historic low-cost initiatives (i. e. making short trips between cities and ownership of jets) (Schlangenstein & Hughes, 2010).
Southwest answered though economics with the addition of 138 airplanes (AirTran); “The addition of AirTran will allow them to satisfy their briefly dormant, but always present, inclination for growth” (Schlangenstein & Hughes, web article). Thus, Southwest increases employee motivation, which in-turn creates value, and converts that value by employing operating processes and encouraging behavioral norms which reduces costs and increases productivity essentially capturing the value leading to Southwest’s competitive advantage (Hallowell).
According to Patterson, Brenny and Maxfield et al. (2008), preparing for setbacks builds resilience by the company internally; using setbacks as guides, instead of putting on the brakes help to refine their strategies. One of the most unique characteristics of Southwest Airlines is that it motivates the employees with stimulating and enjoyable recognition programs (Southwest. com, 2010). Rewards and recognition of the day-to-day work achievements play a vital role in retaining and attracting employees at Southwest Airlines.
This strategy provides recognition for worker’s unique qualities and individualized appreciation. Southwest’s employee recognition programs contributes to the high moral maintained in the organization’s culture (World at Work, 2001). According to Hallowell (1996), an employee is recognized almost every hour for large and small achievements on a daily basis at Southwest Airlines. The Southwest case study demonstrates how a focused human resource department portrays organizational culture and values, and how their use of employee engagement tools is aligned with the company’s competitive position.
Employees who are actively engaged offer commitment and loyalty to the organization within which they are employed, and is indicative of Southwest Airlines. With this commitment Hallowell (1996) makes the analogy of a person feeling better about purchasing a piece of pie for six dollars, when they feel the pie is worth eight dollars. The same concept applies to someone who can fly Southwest at the same price as its competitors but have better service. Once again evidence of converting employee value to customer value.
Hallowell’s (1996) study makes another important point regarding employee engagement’s correlation with Southwest’s competitive advantage. Passengers moving between gates (destination and departure) are accompanied by Southwest employees, as such; these workers affect each customers experience with the airline (Hallowell). In the airline industry employee engagement has a ripple effect starting with top-level management and pilots to the baggage handlers, ramp agents, and flight attendants.
Each customer’s experience with these employees will directly affect their willingness to pay (Hallowell). For instance, Kelly (2010) in an interview with Spirit Magazine, gave an account where a passenger forgot her glasses at her residence, the passenger could not retrieve the glasses without missing her flight; the flight attendant offered the passenger her own reading glasses, and in-turn the flight attendant was recognized by her peers, and management for friendly customer service. She was publicized as Southwest’s Star of the Month (Kelly).
This strategy demonstrated the importance of employee engagement and Southwest’s ability to maintain its competitive advantage. In the case study of Southwest Airlines by Hallowell (1996); the author recognized the airline’s interviewing techniques as a strong point in the company’s overall success. Hallowell stated that the screening process by Southwest human resources eliminates uncaring potential employees by noting self-centered responses, and quickly separating the majority for those less likely to fit the standards of the organization.
Miles and Mangold (2005) stated that Southwest Airlines uses employee branding as a method of engaging employees. Employee branding is the process by which workers internalize the Southwest Airline brand and project its healthy aspects to the public (Miles & Mangold). The authors provide further support of Hallowell’s (1996) study in that they found employee branding helps Southwest achieve a competitive advantage over other organizations in the industry. Southwest. om (2010) gives the example that “LUV” and “FUN” ideology is embedded into their employees by permitting them to dress up on Halloween; have a casual dress code in the summer months, and by providing a teaching video on the Southwest Airline’s Shuffle Dance. According to Hallowell, CEO Gary Kelly dressed up as a bunny for Halloween and served Easter eggs to the employees. He went on to say that great comradery was stimulated just by stirring up “it is not Easter” controversy (Hallowell).
The third variable researched in the Southwest Airline case study, is the organization’s capabilities to create value. Hallowell’s (1996) study indicated Southwest has established processes and internal structures that influence the employees to accomplish specific organizational competencies allowing them to adapt to changing strategic needs and changing customer needs assessments. These competencies help Southwest Airline produce “superior quantity and quality of effort” from employees (Hallowell, p. 10).
One of the competencies Southwest defines as important is the extension of LUV and FUN from the employees to the customers by providing hassle-free flying, which is a direct result of employees being actively engaged with the organization’s culture (Hallowell). An important aspect to consider is that there must be harmony at the level of operations. Southwest has achieved harmony thought its employee engagement (i. e. human resource procedures) leading to operating procedure success reflecting Southwest’s organizational culture of helping one another (Hallowell).
The appreciation for human capital is evident in reviewing Hallowell’s Northwest Airline case study, along with a comprehensive literature review via the internet and scholarly journal articles. Southwest Airlines meets the cognitive and emotional needs of its employees, shareholders, and customers by making them feel connected to the company. Their LUV and FUN approach to employee engagement has enabled them to create employee value and covert that value into customer value resulting in the company capturing value. With the three variables studied in Hallowell’s research, Northwest Airline is understood as a leader in competitive advantage.
- Flowers, V. , & Hughes, C. (1973). Why employees stay. Harvard Business Review, 51(4), 49-60. Retrieved from Business Source Complete database. Hallowell, R. (1996). Southwest Airlines: A case study linking employee needs satisfaction and organizational capabilities to competitive advantage.
- Human Resource Management, 35(4), 513-534. Retrieved from Business Source Complete database. Kelly, G. (2010). On cloud nine. Sprint Magazine. Retrieved September 29, 2010 from http://www. spiritmag. com/gary_kelly/ Levine, D. (2004).
- Economic and game theory: What is game theory? UCLA Department of Economics. Retrieved September 29, 2010 from http://levine. sscnet. ucla. edu/general /whatis. htm Miles, S. & Mangold, G. (2005).
- Positioning Southwest Airlines through employee branding. Business Horizons, 48, 535-545. Retrieved September 30, 2010 from http://www. auburn. edu/~johnsrd/4160/Readings/Southwest%20Employee%20Branding. pdf Patterson, K. , Brenny, J, Maxfield, D. , Mcmillan, R. , & Switzler, A. , (2008).
- Influencer: The power to change anything. New York, NY: McGraw-Hill. Schlangenstein, M. & Hughes, J. (2010). Southwest CEO risks
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