Running head: EFFECTIVELY USING INTEGRATED EMPLOYEE

Effectively Using an Integrated Employee Engagement Program

Marilyn Field

EFFECTIVELY USING INTEGRATED EMPLOYEE

Abstract
A companys 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 Airlines 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 INTEGRATED EMPLOYEE

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 organizations culture as
one with committed workers who strive to maintain the companys reputation as a leader in
social responsibility. A case study was conducted by Hallowell (1996) to analyze the sources of
Southwest Airlines competitive advantage. Hallowell attributes the highly acclaimed airlines
success to the high value place on its employees.
Hallowells 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
employees needs on a satisfactory level. 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 Southwests 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 Hallowells study revealed that employees
are motivation from the employers encouragement of behavioral norms and organizational
values.

EFFECTIVELY USING INTEGRATED EMPLOYEE

The second comprehensive variable Hallowell (1996) studied was Southwests strategy
for having one of the most successful airline stocks. This raises the question as to how employee
engagement plays a part in stimulating shareholders commitment of investing in Southwest
stock. The Southwest Airlines organizational culture has encouraged its workers to have fun on
the job. This is a wellness approach which has led to the companys 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 Airlines Chief Executive Officer Kelly has had to make
recent cuts; affecting the companys 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
Southwests 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

EFFECTIVELY USING INTEGRATED EMPLOYEE

attracting employees at Southwest Airlines. This strategy provides recognition for workers
unique qualities and individualized appreciation. Southwests employee recognition programs
contributes to the high moral maintained in the organizations 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 companys 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.
Hallowells (1996) study makes another important point regarding employee
engagements correlation with Southwests 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 customers 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

EFFECTIVELY USING INTEGRATED EMPLOYEE

recognized by her peers, and management for friendly customer service. She was publicized as
Southwests Star of the Month (Kelly). This strategy demonstrated the importance of employee
engagement and Southwests ability to maintain its competitive advantage.
In the case study of Southwest Airlines by Hallowell (1996); the author recognized the
airlines interviewing techniques as a strong point in the companys 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 Hallowells (1996)
study in that they found employee branding helps Southwest achieve a competitive advantage
over other organizations in the industry. Southwest.com (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 Airlines 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 organizations
capabilities to create value. Hallowells (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

EFFECTIVELY USING INTEGRATED EMPLOYEE

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 organizations 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 Southwests organizational culture of helping one another (Hallowell).
The appreciation for human capital is evident in reviewing Hallowells 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 Hallowells research, Northwest Airline is understood as a leader in competitive
advantage.

EFFECTIVELY USING INTEGRATED EMPLOYEE

References
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Hallowell, R. (1996). Southwest Airlines: A case study linking employee needs satisfaction and
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Kelly, G. (2010). On cloud nine. Sprint Magazine. Retrieved from
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Levine, D. (2004). Economic and game theory: What is game theory? UCLA Department of
Economics. Retrieved from http://levine.sscnet.ucla.edu/general /whatis.htm
Miles, S. & Mangold, G. (2005). Positioning Southwest Airlines through employee branding.
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%20Branding.pdf
Patterson, K., Brenny, J, Maxfield, D., Mcmillan, R., & Switzler, A., (2008). Influencer: The
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Schlangenstein, M. & Hughes, J. (2010). Southwest CEO risks keep-it-simple strategy to reignite
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EFFECTIVELY USING INTEGRATED EMPLOYEE

Zoglin, R. & Van Dyk, D. (2008). Who is the stingiest? Time Magazine.com. Retrieved from
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