Employee Satisfaction & Southwest Airlines
Long-established rewards systems usually have had a large proportion of the total package as base pay and just a small portion tied to performance. In today’s world new and more strategic rewards systems, have come to be implemented which are more aligned with overall organizational strategies. These new rewards include a performance based variable pay, skill base pay and recognition pay. In researching this new trend it has been shown to have a very positive effect on employee productivity and firm performance. Challenges in implementing new strategic rewards system include lack of political will to change, inherent difficulty from employee trust issues, and lastly perceived mind set that it will cost more. In fact Southwest Airlines has successfully dealt with these issues and challenges, with the appropriate supportive systems and structures. Southwest Airlines with its simple philosophy that it would fly people directly to where they wanted to go, and when they wanted has become a leader in a very turbulent industry. Herb Keller founder and other industry analysts have said the reason for the success is its culture of the firm and its dedicated employees. Aspects of its people oriented culture include employees considerable freedom and responsibility and high level of employment involvement in decision making, Southwest also does a good job of hiring the right people, it also places an emphasis on training and flexibility in using of employee skills. Looking at Southwest’s strategic rewards system it is in place to support and reinforce the organizations philosophy. Riordan on the other hand has no cohesiveness between major players and management, no solid direction, and is lacking of a dependable reward system. So what can it do to change current state? Well if Riordan can instill Southwest “employee matter” concept that would be a good start. Riordan needs to improve its compensation and rewards by...
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