Reference no: EM132234600

Fun is a stimulant to people. They enjoy their work more and work more productively," says Herb Kelleher, chief executive officer at Southwest Airlines. Kelleher credits the enormous success of Southwest Airlines to the positive attitude of its employees. And he works--and plays--hard to maintain that attitude. Southwest Airlines is a relative newcomer to the airline industry. Launched in 1971, with four planes providing service to Dallas, Houston, and San Antonio, Southwest now flies 120 planes to thirty-two cities all around the country. It has a solid record and is now the most profitable airline in the U.S. Southwest has accomplished so much partly because of the "work hard, play hard" attitude instilled in its employees. Southwest offers very frequent, short-distance flights at low fares. It does this by capitalizing on operational efficiencies to stay lean. Because all of its flights are short distances, Southwest needs only one type of aircraft; it entire fleet is composed of Boeing 737s, a medium-range jet. This practice saves in maintenance, training, and parts inventory costs. Southwest doesn’t rely on travel agents and avoids using major airports. There are no assigned seats, few connections, and no meals. What Southwest does do is get you between point A and point B with a crew that goes the extra mile when needed. Southwest owes most of its success to the productivity of its employees. One Southwest ticket clerk even flew to another city with a frail, elderly passenger just to put her at ease and make sure she made her connection. Everyone at Southwest chips in to do whatever needs to be done. Pilots sometimes man the boarding gate if things are running slow; ticket agents voluntarily haul luggage if it will help get planes into the air faster. Airplanes are cleaned only once per day. Flight attendants and pilots pick up trash between flights, allowing Southwest to lead the industry in turnaround time between flights--less than fifteen minutes on 80% of its flights. Most of the major airlines’ cost per seat-mile is nearly 100% higher than Southwest. The company gets this cost advantage by paying its pilots and flight attendants considerably less than the competition and having them fly more hours. It makes up for the lower pay with generous profit sharing and stock option plans. Because a large portion of a Southwest employee’s compensation comes in the form of stock options, they have worked harder and more flexibly than their peers at other airlines. Herb also strives to maintain the same family atmosphere the company had when he knew every employee by their first name. Headquarter walls are filled with employee photos and memorabilia. “It you’re sick, if you lose a relative, if you get married, if you have a baby, you hear from us,” say Herb. Southwest also holds Christmas parties on different dates in four different locations so employees in each city get a chance to meet with corporate executives. Kelleher has been described by one industry analyst as “the sort of manager who will stay out with a mechanic in some bar until four o-clock in the morning to find out what is going on. And then he will fix whatever is wrong.” Southwest resists overhiring during good times so it can avoid layoffs when times are tough. Lean staffing means everyone works hard. But hard work doesn't get in the way of having a good time. Herb Kelleher believes that good customer service depends largely on a high level of esprit de corps. Kelleher wants Southwest employees, and its customers, to have fun. "I've always felt that there's no reason that work has to be suffused with seriousness, that professionalism can be worn light." A sense of humor has long been a basic criterion in the selection of new employees. Kelleher goes out of his way to make sure everyone has fun. The dress code is informal and comfortable. Attendants wear shorts, casual shirts, and sneakers. On-board antics are encouraged-- the zanier, the better. Passenger safety briefings are often delivered in a rap beat, and the comments from the cockpit crew often border on the outrageous. One example from a Southwest pilot: "As soon as y'll set both cheeks on your seats, we can get this ol' bird moving." And Kelleher does his share of clowning around, too. Whether flying on Easter dressed up as the Easter Bunny or visiting with maintenance employees in the middle of the night dressed in drag --Kelleher loves to have fun. Extremely selective in whom it hires, Southwest looks for people who like other people, who enjoy providing the best service possible, and who have a real zest for living. According to Kelleher, "We draft great attitudes. If you don't have a good attitude, we don't want you, no matter how skilled you are. We can change skill levels through training. We can't change attitude." Does this emphasis on hiring people with great attitudes and keeping these people happy pay off? Southwest employees and customers think so. The productivity of its employees has made Southwest the lowest-cost company in the airline industry, 15% lower than its next-lowest-competitor, American Airlines. Southwest makes more money per revenue dollar earned than any of its competitors. Customer satisfaction is very high, as is employee job satisfaction. Southwest's relationship with its employee unions are cooperative, and it has one of the lowest levels of employee turnover in the industry. In the last couple of years, the environment has been changing for Southwest. First, it faces a number of new, upstart airlines in many of its markets. JetBlue, Frontier, AirTran, Song, and Ted are matching Southwest’s low prices but offering benefits like reserved seating and free live-satellite TV. They’re able to do this because they have newer, more fuel-efficient planes and have young, lower- paid workforces. In many markets, Southwest’s planes and service look dated. Second, the declining stock market took much of the air out of Southwest’s stock. The company’s stock option plan no longer looked so attractive to employees. Third, Southwest has to deal with the reality that it is no longer the underdog. For decades, employees enjoyed the challenge of competing against United, American, Delta, and other major airlines. They loved the role of being the underdog and having to work harder to survive. Southwest’s employees are increasingly vocal and aggressive in demanding higher wages and shorter hours. In the past, workers were willing to go beyond the call of duty to help the airline get on its feet. It’s harder for management to motivate employees now by portraying the airline as the underdog. Finally, as the company has grown and matured, management has become more remote from the rank and file. When the company had a few hundred employees, it was easy for management to communicate its messages. Now, with 35,000 workers, it’s much tougher. Southwest’s management realizes that times have changed. Now they face the question of whether they need to make changes in their basic strategy and, if they do, the effect it will have on the company’s culture. For instance, the company was considering adding in-flight entertainment, although it would cost millions to install and many more millions to maintain; and purchasing smaller jets to maintain competitiveness in smaller markets. The operating costs of these smaller jets would be 15-25% higher than those of its current fleet.

What factors affect employee job satisfaction at Southwest Airlines? How would you use job satisfaction theories to explain these results?

Address: (a) Discrepancy Theory (b) Social Information Processing Theory (c) Dispositional Theory