Compensation and Benefits Plan
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Compensation and Benefits Plan
Southwest Airlines Co. (SWA) is a company known for its fun-loving culture as well as “sit anywhere you like” and “bags fly free” slogans. Southwest Airlines is one of the nation’s leading US Airlines with 38 straight profitable years. The company has a unique strategy in the areas of recruitment, hiring, selecting and training personnel who will be a good fit for the company. Their compensation packages to their employees appear by some, to be second to none in the airline industry. The focus of this paper will be Southwest’s compensation strategy and how it works or doesn’t work for this company.
Current Compensation Strategy and Benefits
The broad objective of the design of compensation programs (i.e., direct as well as indirect compensation) is to integrate salary and benefits into a package that will encourage the achievement of an organization’s goals. In all cases, considerations of adequacy, equity, cost control, and balance should guide decision-making in the context of a total compensation strategy. (Cascio, 2010, p. 470)
Southwest Airlines provides standard benefits that are common to most businesses
(Benefits 2012). This includes medical, dental, vision, and health coverage, with additional coverage package options for family members (Benefits, 2012). Southwest provides time-off, dependent care spending accounts, long-term care disability insurance, and a 401(k) retirement savings plan. Less common benefits are profit sharing and stock purchase plans. Unique benefits are space-available free flying privileges.
Profit-sharing is one way of linking compensation strategy to business strategy. Southwest’s profit sharing program is designed to encourage employees to feel like they own the place. Southwest encourages creativity and innovations from employees that will save time and
money. Employees are allowed to share in those profits, which encourages workers to apply
themselves. Such ideas include the...
Southwest Airlines Co. (SWA) is a company known for its fun-loving culture as well as “sit anywhere you like” and “bags fly free” slogans. Southwest Airlines is one of the nation’s leading US Airlines with 38 straight profitable years. The company has a unique strategy in the areas of recruitment, hiring, selecting and training personnel who will be a good fit for the company. Their compensation packages to their employees appear by some, to be second to none in the airline industry. The focus of this paper will be Southwest’s compensation strategy and how it works or doesn’t work for this company.
Current Compensation Strategy and Benefits
The broad objective of the design of compensation programs (i.e., direct as well as indirect compensation) is to integrate salary and benefits into a package that will encourage the achievement of an organization’s goals. In all cases, considerations of adequacy, equity, cost control, and balance should guide decision-making in the context of a total compensation strategy. (Cascio, 2010, p. 470)
Southwest Airlines provides standard benefits that are common to most businesses
(Benefits 2012). This includes medical, dental, vision, and health coverage, with additional coverage package options for family members (Benefits, 2012). Southwest provides time-off, dependent care spending accounts, long-term care disability insurance, and a 401(k) retirement savings plan. Less common benefits are profit sharing and stock purchase plans. Unique benefits are space-available free flying privileges.
Profit-sharing is one way of linking compensation strategy to business strategy. Southwest’s profit sharing program is designed to encourage employees to feel like they own the place. Southwest encourages creativity and innovations from employees that will save time and
money. Employees are allowed to share in those profits, which encourages workers to apply
themselves. Such ideas include the...