Overview of Compensation & Benefits

Compare and contrast compensation and benefits strategy of the “people department” of Southwest Airlines to overall strategies of two other airlines.  What distinguishes each approach from the others?  What are the strengths and weaknesses of each?

Guided Response: Be sure to include links to the companies, as well as the course text, among a minimum of five references.  Respond to at least two classmates’ posts.

I need to respond to these two student’s discussion post

Respond to

I reviewed the compensation and benefits information for Southwest Airlines, United Airlines and Delta Airlines. For the compensation piece of my research I chose to focus on Flight Attendants to establish a baseline for comparison. I did this because all three airlines utilize them and I believed it would be easier to show the data within a like career path.

 

Benefits
Southwest (Flight Attendant)
United Airlines (Flight Attendant)
Delta (Flight Attendant)

Salary
$25,491 – $121,942
$24,271 – $115,944
$24,705 – $105,098

Medical
Y
Y
Y

Dental
Y
Y
Y

Vision
Y
Y
Y

Retirement/401K
Y
Y
Y

Vacation
Y
Y
Y

 

The chart above depicts salary range and major benefit package offerings for all three airlines (payscale.com)

The first thing that jumped out to me when comparing the three airlines was the average starting salary, Southwest Airlines starting pay is slightly higher than the other two, which tells me their compensation strategy might be a bit more aggressive than their competitors.

All three employers offer the option of Medical, Dental and Vision care plans. According to their respective company benefits websites there are multiple options to choose from within each plan, to include family coverage.

The financial awards programs for all three are comparable as well, Southwest’s 401k program is more beneficial to the employee than the other two in that they match dollar for dollar up to 8.3 to 9.3 percent of the employee’s salary, United and Delta are below that.

One major area that Southwest distinguishes itself over United and Delta is in their Training and Development program. Southwest has what they call Southwest Airlines University, “it provides technical training and personal and professional development opportunities through classroom and online formats” (southwest.com). Either Delta or United mention this type of program being offered for their employees.

As you would imagine the three airlines offer very similar compensation and benefits packages to their employees with regard to medical, dental, retirement planning, and paid time off but Southwest appears to be a step ahead in what they offer. If I were to find a disadvantage in Southwest it would be that when they began operations they only used one type of aircraft, the Boeing 737. While this strategy helped them with maintenance costs, it probably hurt them with regard to employee knowledge development given they were only familiar with one airframe (Weathington, B. L. & Weathington, J. G. 2016)

 

https://www.deltajobs.net/travel_and_benefits.htmLinks to an external site.

https://www.glassdoor.com/Benefits/Southwest-Airlines-US-Benefits-EI_IE611.0,18_IL.19,21_IN1.htmLinks to an external site.

https://www.payscale.com/research/US/Job=Flight_Attendant/Hourly_Rate/cbc9177c/Southwest-Airlines-CoLinks to an external site.

https://www.payscale.com/research/US/Job=Flight_Attendant/Hourly_Rate/4bf8a22a/United-Airlines-IncLinks to an external site..

https://www.payscale.com/research/US/Job=Flight_Attendant/Hourly_Rate/8220585c/Delta-Air-Lines-IncLinks to an external site.

https://www.southwest.com/html/about-southwest/careers/workperks.htmlLinks to an external site.

https://www.united.com/web/en-US/content/company/career/benefits.aspxLinks to an external site.

Weathington, B. L. & Weathington, J. G. (2016). Compensation and benefits: Aligning rewards with strategy [Electronic version]. Retrieved from https://content.ashford.edu/

Elyse Willfong

In addition to Southwest Airlines, I chose to research pay scale and benefit summaries for JetBlue Airways and Alaska Airlines. Below is a chart of my findings: Pilot, Co-Pilot, Captain

Benefits
Southwest Airlines
JetBlue Airways
Alaska Airlines

Pay Scale
$60k-$298k
$50k-$220k
$102k-$293k

Profit Share
Y
Y
Y

401K
Y
Y
Y

Pension Plan
Y
Y
Y

Health Insurance
Y
 
 

Life Insurance
Y
 
 

Dental Insurance
Y
 
 

Vision Insurance
Y
 
 

Temp Disability
Y
 
 

Long-Term Disability
Y
 
Y

 

When comparing and contrasting these three airlines for the said position above, I noticed first that Alaska Airlines pay their pilots/captains quite a bit more for their base pay than the other two airlines. I then began looking at the summary of benefits for each airline, expecting great benefits. However, I was shocked to learn that neither JetBlue nor Alaska companies offered any type of health insurance. I did see that Alaska Airlines offered two different pension plans, whereas, the other two only offered one.

Looking at the benefits that both companies carry, I wonder how Southwest and JetBlue have any employees, as much as Alaska Airlines are paying their employees. But, I also wonder why the two latter airlines do not offer the same benefits. How do you keep employees who are not offered health benefits? I believe these to be the weaknesses.

Ref:

https://www.payscale.com/research/US/Employer=Southwest_Airlines_Co/SalaryLinks to an external site.

https://www.payscale.com/research/US/Employer=Southwest_Airlines_Co/BenefitsLinks to an external site.

https://www.payscale.com/research/US/Employer=JetBlue_Airways_Corporation/SalaryLinks to an external site.

https://www.payscale.com/research/US/Employer=JetBlue_Airways_Corporation/BenefitsLinks to an external site.

https://www.payscale.com/research/US/Employer=Alaska_Airlines,_Inc./SalaryLinks to an external site.

https://www.payscale.com/research/US/Employer=Alaska_Airlines,_Inc./BenefitsLinks to an external site.

 

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