Reference no: EM132284149
Southwest Pilots Stage an Informational Picket. What Should Management Do?
For Southwest Airlines, 2015 proved to be a record profit-making year, with earnings almost three times what it was the year prior. The company planned to use some of this money to purchase more aircraft and to reward its shareholders, but little consideration was given to its pilots, who had not received a raise since 2012. In reaction, Southwest pilots, who were feeling undervalued by the company, took to the picket lines. This activity is important because it demonstrates the kinds of legal actions employees can take to express their dissatisfaction with the current state of affairs. The goal of this exercise is to show effective ways for employees to both express and attempt to resolve their workplace dissatisfaction. Read the case about the impact of feeling undervalued by a company, and the ramifications that can result. Then, using the 3-step problem-solving approach, answer the questions that follow. Southwest Airlines pilots conducted their first-ever informational picket at Dallas Love Field in 2016. This action was long coming. Let’s consider some background. In 2015, the president and negotiating committee of the Southwest Airlines Pilots’ Association (SWAPA) all resigned. They did this because 62 percent of the company’s pilots rejected a proposed labor contract that included pay raises and increased company retirement contributions but also would have affected work rules and flying schedules. Captain Mike Panebianco, the union’s vice president, said the president resigned because he supported heavily the deal he presented to members, which they rejected.1The new union president, Captain Jon Weaks, expressed his frustration with the current state of affairs. He said, “Shared sacrifice and shared success have been historical tenets of Southwest. We are approaching four years of negotiations and we have sacrificed much during this period to contribute to the company’s record-breaking financial success. We are long past overdue for our company to share that success with hardworking professional pilots of SWAPA. After nearly four years of protracted negotiations, SWAPA has decided that it is time to publicly demonstrate our collective dissatisfaction and unified resolve to management, the flying public, and Southwest shareholders.”2 Pilots at the picket line commented on the erosion of Southwest’s company culture of shared sacrifice and shared success. Weaks commented that “culture prioritizes employees.” He and other pilots feel that the company does not value employees as much as it did in the past.3 Southwest’s record profits and the rejected contract might have influenced the pilots’ attitudes and behavior when they decided to picket. In 2015 Southwest earned a fourth-quarter profit of $536 million, almost three times what it was a year earlier. As a whole, 2015 was a record year for profits. The company planned to use some of this money to purchase more planes and reward its shareholders.4 Captain Paul Jackson, former president of SWAPA, responded to Southwest’s financial success by saying, “The airline has grown significantly in profitability, market share, and shareholder value. Everybody has double-digit and triple-digit growth, but the pilots haven’t had a raise since 2012.”5 To make matters worse for Southwest, SWAPA believes Southwest’s pilots are currently 12 percent underpaid relative to Delta and American Airlines contracts. The union further contends that Southwest pilots would be 20 percent underpaid relative to a contract that was being negotiated with Delta pilots: It was not ratified.6 SWAPA would like to see a 15 percent increase in base wages with a “modestly higher profit-sharing as a minimum to get a deal done.”
1. What is the key problem in this minicase?
The pilots are dissatisfied and are picketing.
The relative pay of Southwest’s pilots has not increased since 2012.
Southwest management is not sharing record profits with the pilots.
The employee-centered culture is being eroded by managerial actions.
The pilots are experiencing cognitive dissonance.
2. Which of Schwartz’s values most reflects the behavior of Southwest’s pilots’ behavior?
Conformity
Achievement
Security
Tradition
Benevolence
3. Some senior leaders at Southwest might feel conflict between the values formerly enacted at the airline and those enacted today. Which concept best explains this conflict?
Tradition
Attitudes
Cognitive dissonance
Power
Universalism
4. According to the pilots, which value best describes the former/past culture at Southwest?
Hedonism
Self-direction
Universalism
Power
Achievement
5. A history of NOT striking represents which aspect of the theory of planned behavior?
Perceived behavioral control
Subjective norm
Attitude toward striking behavior
Intention
Value for stability